Misys Annual Report 2006 - Home

Misys plc Annual Report 2006
Making things that really matter, work better.

Contents
01 This is Misys
10 Chairman’s statement
12 Chief Executive’s report
16 Misys Group overview
18 Misys Banking Systems
22 Misys Healthcare Systems
26 Sesame
28 People and corporate responsibility
32 Financial review
40 Board of Directors
42 Directors’ report
44 Corporate governance report
48 Directors’ remuneration report
57 Statement of Directors’ responsibilities
58 Independent auditors’ report to the members of Misys plc
59 Consolidated income statement
59 Statement of recognised income and expenditure
60 Statement of cash flows
61 Consolidated balance sheet
62 Accounting policies
66 Notes to the financial statements
93 Independent auditors’ report to the members of Misys plc on the parent company accounts
94 Company balance sheet
95 Notes to the Company financial statements
100 Five year financial record
101 Investor information
Financial highlights 2005/06
Dividend per share (pence)
7.18
Adjusted earnings per share
(pence)
14.3
Revenue (£m)
953

Misys makes world-class software
We develop and deliver IT products and solutions
for the banking and healthcare markets. We are
one of the top five software providers to healthcare
organisations in North America and one of the top
five software providers to financial institutions around
the world. Our expertise is in ‘Making things that
really matter, work better’.
So how is Misys aiming to create value for shareholders?
Highlights 2005/06
> Strong cash flow from operations
> Continued transition to higher growth market segments
> Product development investment to improve quality and cost-efficiency
> Core product sales improved in Banking and Healthcare
> Banking: improved sales performance and better customer alignment
> Healthcare: good operating profit performance and strong industry recognition
> Sesame: revenue growth and launch of multi-tie offering
> Successful sale of General Insurance business
Page 01

Unsustainable rising costs. Inefficiencies.
Medical errors. Complexity. Improving
performance in line with government
commitments is presenting tough challenges
for the US healthcare system. IT has a vital
role to play in this transformation.
By making things work better in healthcare…
Page 02 Misys plc Annual Report 2006
Healthcare accounts
for 16.2% of the US
economy – more
than housing,
clothing and
energy combined

… and in banking
Intense competition. Global business. Complex
regulation. Demands in banking have never
been greater. Software is at the heart of one
of the biggest, fastest-moving industries in the
world. The opportunities are enormous.
Annual growth
in bank IT
budgets is
around 4–5%
Page 03

Constantly improving our trusted products…
This year we invested £90 million in product
development. That enables us to enhance
the performance and functionality of our most
successful products and solutions, ensuring they
remain valuable to customers going forward.
Page 04 Misys plc Annual Report 2006
Misys has nearly
40% of its worldwide
employees
engaged in product
development

We increased
the number of
staff devoted
to product
development
by 10%
... and innovating for the future
Established products generate strong cash
flow. And that means we can invest in creating
new products for high growth markets.
We use our unique processes, experienced
people and deep industry knowledge to
address customers’ most important
challenges and opportunities.
Page 05

Our products have a critical role to play.
In banking, Misys software carries out the
complex processing needed by institutions
to manage money safely and efficiently.
Every day billions of dollars, euros and
pounds pass across our systems.
To provide support for everyday life…
Page 06 Misys plc Annual Report 2006
Misys is a market
leader in banking
software with over
1,200 customers
worldwide

… and life changing information
The availability, accuracy and mobility of
information is just as critical in healthcare.
Thousands of care givers rely on our products
to capture and share medical data. Improved
connectivity and efficient data sharing can
create better quality of life.
110,000
physicians trust
Misys products
to manage
essential patient
data every day
Page 07

Delivered by committed, talented people...
It takes a rare combination of technical and business
expertise to deliver sophisticated software solutions.
Talk to people anywhere within Misys and you’ll
witness the same desire to produce great products
that make a real difference – to customers and the
wider public.
Page 08 Misys plc Annual Report 2006
We employ
6,000 people
in over 30
countries
worldwide

We invest in attracting, developing and inspiring
the best people in our industry, providing
talented employees with opportunities to
make a real difference. Our business is about
technology, but it’s the quality of Misys people
that sets our products and solutions apart.
... in locations around the world
We serve
customers
in more than
120 countries
Page 09

Chairman’s statement
Sir Dominic Cadbury
Our new Chairman assesses a
year of transition for Misys and
outlines clear priorities for the
Company going forward.
Misys generated revenue of £953m and
operating profit of £56m this year. Our
cash generation continued to be strong,
with cash flow from operations of £76m and
net debt of £95m. We continued to return
cash to shareholders by buying back a
total of 12m shares in the year. Adjusted
earnings per share for the year were 14.3p.
The Board recommends a final dividend
of 4.49p per share, bringing the full year
dividend to 7.18p.
The Board
We acknowledge that in recent years Misys
has not delivered the value that shareholders
are entitled to expect. When I took over the
Chairmanship this year from Kevin Lomax
it became my job to lead the Board, enabling
him to focus on running the business as
Chief Executive. I now manage the Board
and our relationships with investors and it
is the Board that makes the final decision
on all key Company issues, and ensures
proper mechanisms are in place to manage,
protect and maximise the Company’s value
for shareholders.
The separation of roles clarified
responsibilities and accountabilities at
Page 10 Misys plc Annual Report 2006
Board level and was an essential first step
in the process of delivering greater
shareholder value.
But it was only one of many actions taken
during the year to position Misys for
sustained, profitable long-term growth in
our core markets. We have continued to
invest to capitalise on higher growth market
segments, for example. This has included
more organic product development, the
acquisition of complementary solutions and
the realignment of our businesses to match
market opportunities.
We are in two strong market sectors, both
of which have potential for real growth.
Product investment remains core to our
strategy: in the last year, in our continuing
businesses, we again increased investment
in product development to nearly £90m.
We made a number of other changes to
the composition of the Board this year,
adding two new independent non-executive
Directors. In October 2005 the Company
appointed John Ormerod as a non-executive
Director and Chairman of the Audit
Committee, and in November he became
senior independent Director. John was
Practice Senior Partner at Deloitte in
London and serves on audit committees at
Gemalto International and HBOS. In
November the Company appointed
John King as a non-executive Director.
John has more than 30 years’ experience in
the US healthcare industry and now serves
on the Audit, Remuneration and Nomination
Committees of Misys. Both Ian Dyson and
Bob Ingram stood down from the Board and
we thank them for their commitment during
their time with the Company. Tony Alexander
will be retiring from the Board at the close
of the Annual General Meeting this year
and we thank him for his strong contribution
and commitment during his many years
with Misys.
Banking
Misys has a strong, established position in
the international banking market. This offers
excellent growth opportunities as we expect
financial services institutions to continue to
increase spending with third party software
vendors. Our challenge is to compete in
the most valuable segments of this market
while increasing operating margin.
During the year we reorganised our Banking
business to respond to market developments
and to capitalise on our strengths. This has

created a streamlined and more efficient
organisation which is better aligned with
its customers. We have now established
two new business units, Core Banking and
Treasury & Capital Markets (‘TCM’). The
success of TCM is an indication of what
Misys can achieve with the right products
and the right organisational structures.
The combination of our Retail and
Wholesale operations in the new Core
Banking unit provides the right foundation
for future growth and will realise cost
savings, much of which will be invested
in the business.
Structural change is testing for any business,
but Banking is now well positioned with a
clear focus and a more coherent offering to
customers and I have been impressed by
the commitment of people here to making
changes quickly and effectively.
Healthcare
In the United States, healthcare is the
largest component of the country’s economy
and spending on it is expected to continue
to increase. Misys has a strong presence
in this market as a supplier of IT solutions
to physicians, hospitals and other care
givers. This is a valuable and sustainable
market with growth driven by rising costs,
limited clinical capacity, quality concerns
and increasing patient demand for
treatment.
The case for investment in IT to reduce
costs and raise quality is widely recognised
and we are well positioned to benefit from
care providers’ further investment in
software solutions. Market demand, our
increased investment in our core products
Our cash generation
continued to be strong
and our strong relationships with
existing customers provide us with a firm
foundation from which to pursue new
opportunities for growth. Our commitment
to excellence and customer service has
been underlined through the year with
numerous awards and increased industry
recognition for key products.
People
The quality of our products and processes
and the calibre of the people working
here are vital to our performance. Misys
employees have great passion for their
products and solutions and I want to thank
everyone in the Company for their
commitment in the last year.
Getting full value from our assets
This year we streamlined the Company’s
portfolio by selling our General Insurance
business. The sale was completed on
5 May 2006, producing gross proceeds
of approximately £183m and profit after
tax of £172m. The sale underlines the
Company’s ability to execute a major
transaction successfully, at the right value.
With Sesame, our UK financial adviser
support services business, we decided
to end our discussions with potential
purchasers as their offers did not match
the value of the business. Sesame is a
strong business with good prospects – a
leader in its market. We recognise that
we are not its natural owners and remain
committed to selling at a time when we
can get good value for shareholders.
The whole Board
is focused on the
need to deliver the
value shareholders
rightly expect
Looking ahead
I believe there is great scope for us to
improve our financial performance by
maintaining prudent cost control, finding
new efficiencies and establishing ourselves
in the higher growth market segments.
We continue to refine key performance
indicators for the business around
customer satisfaction, product quality,
sales growth and total shareholder return
which will help us better measure
performance.
This has been a year of transition for Misys:
the actions taken and the plans put in place
have better positioned the Company to
deliver long-term shareholder value. The
whole Board is focused on the need to
deliver the value shareholders rightly expect.
At the present time we are in an offer period
for the Company, which may or may not lead
to an actual bid. The Independent Committee
of the Board, comprising all of the nonexecutive
Directors and led by myself, is
conducting a disciplined process to ensure
equal access for all interested parties.
We will evaluate any offer that may come
forward and recommend whatever course
of action we judge will deliver best value
to shareholders.
Sir Dominic Cadbury
Chairman, Misys plc
Page 11

Chief Executive’s report
Kevin Lomax
After a year of corporate change
and business repositioning,
Kevin Lomax, Chief Executive,
discusses the issues addressed,
the actions taken and the
opportunities ahead.
Page 12 Misys plc Annual Report 2006
Repositioning for growth
Over the last year we have taken a number
of steps to build long-term value in the
business. We have continued to invest
in product development and quality
improvements, to make complementary
acquisitions and to position our businesses
to capture market growth effectively. We
have made good progress and customer
response to our product offering has been
positive, but we know we have more to
do to improve our performance overall.
Our core markets are the banking and
healthcare software markets and we have
an enviably extensive customer base in
both. This year we have built on the strength
of our successful, established products –
which have significant market share and
generate high levels of repeat revenues
– to address new, higher growth market
segments. We are developing and enhancing
our products for these higher growth
segments, both organically and through
bolt-on acquisitions where that provides
enhanced functionality faster, while still cost
effectively, and it is these areas that will
drive our business over the coming years.
A successful realignment in Banking
For much of the last year I have also been
Chief Executive of our Banking business.
Over the year we have reduced costs,
refined our market focus and prioritised
our product strategy.
In June 2005 we established a dedicated
Treasury & Capital Markets (‘TCM’)
business which has performed very
successfully in its first year. We brought
together previously discrete businesses as
a single business unit, with headquarters
in New York. This has given us a more
powerful market presence and enabled
our teams to become more efficient and
more effective at sharing technical and
commercial expertise. Our customers have
responded positively to the changes.

We have taken a
number of steps to
build long-term
value in the business
In the wholesale and retail banking
market, customer requirements are
converging. We recognised that we had
too many points of contact with the same
customers, which was confusing for them
and inefficient for us. Banks are also
looking to reduce the number of their IT
suppliers and the relationship is becoming
much more of a partnership between
the customer and larger vendors able to
provide a wide range of products.
We responded by reorganising these
operations into one Core Banking business
in the second half of the year, making it
easier for us to converge our products
onto a single technical platform. This
simplified our customer proposition and
removed duplications at management
level. We also refined our Risk Vision
offering, focusing it on serving existing
customers going forward. Overall, the
reorganisation will generate cost savings
of around £15m; much of this saving will
be reinvested in product development.
Restructuring businesses inevitably
causes some disruption to employees
and, naturally, some had concerns about
their future. We worked hard to minimise
the period of uncertainty for people. In
creating Core Banking there were some
job reductions and redundancies, but the
most far-reaching changes came from
improving management processes,
speeding up our decision-making and
creating a unified team.
Banking software contracts have become
larger and more complex over recent years
which has meant that, by their nature, they
take longer to negotiate and to implement.
Delays to a couple of particularly large
Our product
development
programme is
directed at higher
growth areas
contracts led to an earnings shortfall in
the first half of the year, which impacted
our margin. This was clearly disappointing
and painful for us. We have resolved these
issues now and those particular contracts
are progressing.
Despite already having one of the largest
customer bases in the industry, we had
secured more than 30 new-name
customers across Banking by year-end.
We also increased our Initial Licence Fee
revenue and order intake. Total revenue
grew by 8%. This was an encouraging
sales performance but we must improve
our bottom line too.
The restructuring is now complete and we
have set out a very clear plan for moving
forward. Employee engagement is crucial
to this and we take it very seriously: people
have been extremely committed and hard
working throughout the changes. Our
business and product strategy in Banking
is well defined – we know what we need
to do. It’s all about operational excellence;
getting quality products into the highgrowth
markets on time and on budget
and being responsive to customer needs.
The way we achieved good momentum
in TCM during its first 12 months shows
that we can bring the business through
transition quickly and Core Banking is
now moving in the right direction too.
Convergence in our markets
and products
Banks used to operate in technological
silos but they’re moving towards much
more integrated processes and easier-to-
use systems for everything from consumer
accounts to commercial lending or trading.
By developing our existing products and
continuing to innovate for the future we
can offer banks the integrated systems
they need.
A number of our established products
were the innovative, high-growth products
of yesterday. They have been very
successful, today they’re generating
excellent returns from both recurring
licence fees and renewals and we’re able
to invest that cash in the next generation
of products. This is an enormous
opportunity for Misys.
There are potential efficiencies for us too.
We can develop common features and
functions within our retail and wholesale
banking products, so reducing development
costs and improving time-to-market.
Service Oriented Architecture (‘SOA’), which
provides common architectural ‘building
blocks’ within software, is a major
development. Our strategy is to converge
our products around SOA, with common
solutions and platforms.
Our competitive strengths
Conditions in the sector remain positive.
Some very large horizontal software
companies have a presence in the banking
software market, underlining its current
attractiveness. We recognise the power
of their brands, but decision makers in
banking tell us they look for performance
and sector expertise above a famous
name. We have the domain knowledge
needed to talk about banking business
Page 13

Chief Executive’s report
continued
We have proven
products, an impressive
installed base and
strong relationships
with customers
solutions first and software solutions
second and we believe that’s what
customers need. Misys serves more than
1,200 financial institutions so repeat
business will continue to be the bulk of
our revenue but we will also continue to
target new name business. We have an
exceptional installed customer base – one
of the largest in the industry – together
with excellent development expertise,
great talent and a strong mix of proven and
next-generation products, all of which are
very powerful competitive strengths.
Opportunities in a buoyant
healthcare market
Healthcare IT is a strong and growing
market, especially in North America.
We have a significant presence across what
we call the major venues of care – the
physician’s office, the hospital, the patient’s
home and long-term care facilities. We
have very strong customer relationships
and a good product offering in each area
and we need to capitalise further on these.
We are concentrating our investment in
higher growth segments such as electronic
health records (‘EHR’) and web-based
claims processing to capture more of
the market’s buoyant growth.
This is really just the beginning of the
opportunity. Penetration of clinical solutions
in the healthcare market remains relatively
low. The first phase is for everyone to get
an EHR; the next phase is about
connecting all of the different venues of
care so that records and other information
can be shared seamlessly across the
healthcare system.
Page 14 Misys plc Annual Report 2006
As more customers adopt electronic
solutions the demand for connectivity –
and for greater interoperability between
devices and systems – will increase. We
are right at the heart of this opportunity
with our web-based data sharing product
Misys Connect and our complete clinical
products portfolio Misys Optimum, both
of which will help us capture more of the
market growth.
Enhancing our offering
In order to stay competitive we must invest
in the right products at the right time,
further improve customer service, keep a
tight rein on costs and build the value of
our reputation within the market long term.
The product strategy in Healthcare is
the same as in Banking; we’re using the
strong cash generation from established
products to invest in new high growth
products. That’s already having an effect.
In 2002 just 5% of our revenue was from
markets growing at 10% or more, such as
EHR; this year, including acquisitions, 32%
of revenues were from high growth areas.
We expect that trend to continue and we’ve
focused R&D spend on our EHR products
in line with market opportunities. Success
will be determined by our ability to capture
market growth. Competition is tough, but –
as in Banking – we have proven products,
an impressive installed base and strong
relationships with customers. During the
year we made a significant acquisition to
enhance our transactions processing
business, which provides the software to
process payment claims by physicians.
This business had grown rapidly, driven by
an expanding customer base and achieved
a high penetration of that base. But we
needed to find new opportunities for
revenue growth. So in January 2006 we
acquired Payerpath, a very dynamic webbased
system, run on a subscription basis,
that increases the efficiency of claims
processing and enables a higher fulfilment
of claims. It’s easy for physicians to use
too. We’re evolving from a commoditised
service in a very mature market to a value
added solution that also enables us to
target new high growth markets.
Product development
Misys is a software product and solutions
company. We have nearly 30 years’
experience of building and delivering
software around the world and we have
established world-class processes.
Our two core divisions are in major,
vertical software markets and have core
competencies in developing, acquiring,
integrating and selling software into their
specific markets.
Our Healthcare and Banking product
development programmes are very much
focused on the higher growth market
segments, enabling us to deliver enhanced
product architecture and functionality
in the areas most important to our
customers. We are investing where they
are investing, placing particular emphasis
on segments with the potential for strong
and sustainable growth.

Our centres in
Bangalore and
Manila are hugely
important – critical
to our success
Offshoring and excellence
We established our Manila development
centre in 1991 and opened our first
development centre in Bangalore in 1998,
so we have solid experience in offshoring.
Offshoring has enabled us to reduce costs,
but we look way beyond conventional
notions of lower cost development. We
see these as centres of excellence where
our people are adding real value to our
business. People in Misys really identify
with their products and get deeply involved
with different aspects of their design and
development. In Bangalore we also have
experienced managers with direct
experience of banking in the United States,
United Kingdom and other major centres.
The centres in Bangalore and Manila
are hugely important to Misys, not least
because of the availability of very high
quality talent and we are recruiting to
expand our teams here. Our new purposebuilt
centre in Bangalore, which we
expect to occupy later this financial year,
underlines our commitment to innovation
and product quality as well as cost
efficiency. It will provide facilities and
support services for both Banking and
Healthcare development teams.
Commitment to quality
The software industry has a relatively poor
record when it comes to quality. At Misys
we need to create products that are right
first time. That means building in excellent
quality from the very beginning, with
world-class processes and people who
At Misys we need
to create products
that are right
first time
are prepared to say ‘that’s not right, we
need to fix it now’. We have introduced
Lean Six Sigma (‘LSS’) – quality and
process improvement techniques – to help
us improve the quality and efficiency of
our processes.
We began doing this in Healthcare last
year, training a number of employees in
the techniques, and have now completed
a range of projects, with more underway.
We’ve seen huge benefits from this
new approach in terms of reduced costs,
but more important are the significant
improvements achieved in terms of
customer service and satisfaction, as
recognised by a number of recent industry
awards. We intend to undertake LSS
projects in Banking later this year.
Looking ahead
Misys is in two of the largest and most
dynamic vertical software markets. We are
well positioned in both and we have taken
a number of actions in the last year to
improve our performance. The business
strategy is right, the product strategy is
right and we have excellent people. It’s
now all about execution. The opportunities
are very exciting and we are focused on
delivering value and returning Misys to
acceptable levels of overall growth.
Kevin Lomax
Chief Executive, Misys plc
Page 15

Misys Group overview
6,000
employees
Misys plc is one of the world’s largest and longestestablished
providers of industry-specific software.
Founded in 1979, Misys primarily serves the international
banking and healthcare industries, combining
technological expertise with in-depth understanding
of customers’ markets and operational needs.
Financial highlights
Revenue (continuing operations)
(£m)
06
05
04
03
953
855
869
982
Page 16 Misys plc Annual Report 2006
Dividends per share
(pence)
06
05
04
03
30
countries
7.18
6.84
6.52
5.67
£953m revenue

Banking
Page 18
£267m
Revenue
Misys Banking Systems is one of the
top five providers of software to financial
institutions worldwide. We serve retail,
wholesale and investment banks, corporate
treasuries, hedge funds and other financial
institutions. Our products enable customers
to improve the quality and efficiency of
the systems they use to collect, analyse,
transmit and manage financial data.
Healthcare
Page 22
Misys Healthcare Systems is one of the
top five providers of software in the North
American healthcare IT market. We serve
physicians’ offices, hospitals, patients’
homes and long-term care facilities. Our
products enable customers to make more
efficient and effective use of patient data.
And they help to improve communication
between patients and providers.
Sesame
Page 26
£316m
Revenue
£370m
Revenue
Sesame is one of the largest providers of
support services to financial advisers in
the UK. It supports independent financial
advisers who cover every available product
and multi-tie advisers who advise on
products from five leading providers. Its
services offer enhanced rates, regulatory
advice, professional development
resources and research.
£38m
Adjusted operating profit
Key products and product areas
• Misys Midas Plus
– Core banking – wholesale
• Misys Equation
– Core banking – retail
• Misys Bankmaster
– Core banking – retail
• Misys Treasury Plus
– Fund management
£48m
Adjusted operating profit
Key products and product areas
• Misys CPR – Computer-based
patient records
• Misys EMR – Electronic
medical records
• Misys Homecare
• Misys Optimum – Family of
leading clinical products and
web-based technologies
£9m
Adjusted operating profit
Key products and product areas
• Sesame Network – Provides
advisers with core services,
specialist support and
other benefits.
• Sesame Direct – Provides
research, rate quotations,
technology and compliance
advice to intermediaries
regulated directly by the FSA.
2,500
Employees
• Misys Summit
– Multi-asset class solution
• Misys Opics Plus
– Comprehensive front to
back office solution
• Misys Trade Portal
– e-business
• Misys Loan IQ
– Commercial lending
For more on our products visit
www.misysbanking.com
2,800
Employees
• Payerpath, A Misys Company
– Financial transactions
processing
• Misys Lab, Misys Radiology
– Departmental solutions
• Misys Tiger, Misys Vision
– Physicians’ practice
management solutions
• Misys Connect – Web-based
data sharing
For more on our products visit
www.misyshealthcare.com
800
Employees
• Sesame Select – Provides
advisers with a range of
competitively priced products
from five of the top financial
services brands in the
United Kingdom.
For more on our products visit
www.sesame.co.uk
Page 17

Misys Banking Systems
Intense competition, consolidation and the
need for ever-greater operational efficiency
all served to drive market growth this year.
For Misys it was a demanding 12 months
with significant change.
Page 18 Misys plc Annual Report 2006
Market overview
The banking sector remains highly dynamic
as financial institutions continue to pursue
growth strategies through globalisation and
cross-border consolidation. Cross-border
mergers and acquisitions have been rising
for the past three years, particularly in
Europe and in the faster growing economies
of developing countries in Central and
Eastern Europe.
In Asia Pacific smaller, local banks are
facing increased competition from foreign
entrants and aggressive, larger domestic
banks. There has been strong underlying
growth in many of these economies, with
India and China, in particular, driving
investment.
In terms of IT, market consolidation
stimulates demand as acquiring banks
work to assimilate acquisitions. Indeed,
many financial institutions are evolving
towards a more integrated approach
throughout their business, introducing
common products, systems and standards
across all areas rather than operating as
technologically independent divisions. An
increasing number of banks are also
converging their retail IT solutions (those
used to serve consumers and small
businesses) and wholesale solutions (those
serving larger business clients and interbank
transactions) in pursuit of better
customer service and cost efficiencies.
Banks in the treasury and capital markets
space, where the speed to market of
new services is a competitive advantage
for institutions, are also searching for
efficiencies, performance improvement
and simplified vendor relationships.
Cost control is critical and focused on
two key activities: the search for greater
efficiencies within transactions to relieve
margin pressure and the hubbing of IT
infrastructure and systems management
in one low cost, high quality centre. This
strong emphasis on cost cutting – together
with high levels of M&A and complex
compliance – is driving demand for systems
consolidation. With many large banks
dedicating up to 90% of IT investment to
maintenance (Celent IT Spending Trends
in European Banking, 2005), there are
opportunities for new solutions able to
replace inefficient legacy products.
Our market remains relatively fragmented,
however. A small number of software
companies – including Misys – has the
greatest presence, with hundreds of niche
businesses focused on producing one or
two best-in-class products, together with
a number of mid-size players. Major
vendors such as SAP and Oracle are
seeking to enter or extend their presence
in this market. Many customers are
streamlining vendor relationships, creating
opportunities for established players to
develop strategic supplier relationships.
Overall, annual growth in bank IT budgets
is around 4–5% (Financial Insights, 2005),
with in-house development still common.
We believe that as cost pressures increase
and systems consolidate around common
standards such as .NET and Java, thirdparty
packaged solutions will remain a
significant growth area.

Our market position and strategy
Misys is one of the top five financial
software providers worldwide. With 1,200
customers in more than 120 countries, we
serve more international banks than any
other banking software business.
Our strategy is to focus on customers
in the high growth markets within the
wholesale, retail and treasury and capital
markets banking sectors.
Three key strengths set us apart. First,
the breadth of our international coverage
provides us with exceptional experience
across all markets and regulatory
jurisdictions. International banks trust
us to understand the issues they will face
wherever they choose to operate. Second,
we have a very large base of installed
products within customers’ organisations,
which means our employees develop deep
customer understanding and we benefit
from robust recurring revenue streams.
Third, our product development centres of
excellence throughout the world develop,
support and bring to market high quality,
cost efficient products.
The last 12 months have been demanding
with performance affected by contract
deferrals. We have, however, made
considerable changes in the business
and its management to position it for
sustained growth.
In June 2005, we created our Treasury &
Capital Markets (‘TCM’) business, bringing
together previously discrete product areas,
including Misys Opics, Misys Loan IQ and
Misys Summit. Treasury & Capital Markets
had a very successful first year, establishing
itself as a major force in a dynamic market
segment.
In the second half of the year we
restructured our businesses responsible
for retail and wholesale solutions, bringing
them together as Core Banking. This
enabled us to simplify our management
structure – reducing overhead – speeding
up decision making and making it easier
for our customers to do business with us.
We also decided to discontinue large scale
development of our Risk Vision product.
We will retain the Risk business unit and
will focus it exclusively on supporting our
existing Risk Vision customers, undertaking
funded development where existing
customers request it. A major customer
recently signed a contract to upgrade,
a clear sign of confidence in the product
and we expect more customers to request
upgrades and funded development in
the near future. We also incorporated
Almonde, our powerful Basel II compliance
solution, into the Core Banking business.
We now have two main business units.
They are focused on market segments which
have differing needs and different dynamics,
but they are also working together closely
to maximise our strengths in this sector.
While we were reorganising the business
we maintained a strong momentum in
product and new business development.
We prioritised investment and
management resource on the products
Misys systems
manage
approximately
1 in 3 of the
world’s loans
and markets with high growth potential,
with organic development complemented
by bolt-on acquisitions that enhanced our
product offering.
Investing in product development
As a software product provider, product
development plays a vital role in our
business. This year we again increased
spending on product development and moved
forward with important product upgrades and
complementary functionality acquisitions.
Nearly 40% of our employees are in
development functions and we were
successful in increasing our development
resource while keeping tight control on costs.
Nearly 80% of product development now
takes place at our centres of excellence
in Bangalore and Manila, including work
on Equation Plus and Midas Plus. TCM
is now also establishing a development
team in Bangalore, focusing on its Opics
product at first.
Page 19

Misys Banking Systems
continued
This year in Core Banking…
• We continued our development of Misys
Equation Plus
Misys Equation provides real-time
information on retail banking transactions
across all accounts, offices, channels
and territories. This new version is being
written entirely in the Java programming
language and will offer advanced customer
relationship management and business
process management functionality.
Using Java, Equation Plus will be able to
integrate seamlessly with banks’ existing
retail products and systems, expanding
our addressable market substantially. We
completed initial tests this year and we are
pleased with what we have seen thus far.
• We achieved positive momentum for
Misys Midas Plus with Global Processing
Midas has been a major product in
our portfolio for many years and used
extensively by banks around the world
in their wholesale operations. The latest
version, Misys Midas Plus, has improved
functionality, including global processing
for banks. Global processing supports
the market trend towards hubbing, where
banks centralise IT infrastructure and
systems management in one location.
It is one of the most technologically
advanced products on the market and
able to provide support across every
local currency, language, regulation
and technical standard currently in use
by major banks.
• SOA/common architecture
This year we started to integrate elements
of Equation functionality into Midas Plus,
Page 20 Misys plc Annual Report 2006
enabling us to meet customer demand
for more integrated retail-to-wholesale
systems. Over the longer term, as
convergence in requirements gathers pace
in the market, we expect to develop more
commonalities between the two product
families utilising Service Orientated
Architecture (‘SOA’) and common
systems, such as cash management, to
generate cost efficiencies. We do not
envisage merging Equation and Midas
into one product; both have distinct
market share and extensive customer
bases that need to be protected.
• We acquired and integrated Almonde
In July 2005 we acquired Almonde, the
leading regulatory risk management
software firm. We integrated Almonde’s
market leading asset and liability
management and regulatory compliance
solutions with our existing banking
solutions.
• We acquired and integrated INTESIO
In February 2006 we bought INTESIO, a
specialist multi-channel retail banking
solutions business. INTESIO software
integrates data from many different
channels – call centres, Internet, points
of sale, phone and bank counter –
providing banks with a holistic picture
of real-time transactions and we are
using the software in our development
of Misys Equation Plus.
• We acquired and integrated NEOMAlogic
In March 2006 we acquired NEOMAlogic,
the award-winning trade finance solutions
company. NEOMAlogic’s electronic
banking trade finance solution, Global
Trade Portal, enables corporate customers
Misys Treasury Plus
is trusted to confirm
US$100bn of foreign
exchange and money
market transactions
each working day
of banks to manage their trade services
via the Internet. We have re-branded this
product as Misys Trade Portal. Misys
Trade Portal was recently awarded ‘Best
Trade Finance Software Provider’ for
coming first in a poll conducted by Trade
Finance Magazine, beating competitors
such as SAP.
… and in Treasury & Capital Markets
• We strengthened Misys Summit
Misys Summit is an award winning
multi-asset class solution used by many
institutions from global banks to hedge
funds and corporate treasuries. Over
the past three years Misys has invested
to re-engineer Misys Summit. Our
investment in the MUST product has
positioned Summit to benefit from the
continuing product innovation trend in
complex cross-asset instruments with
multi-underlyings, including credit
derivatives.
• We launched Misys Opics Plus
Misys Opics has been a successful front
to back office product for more than a
decade and is used by more than 140
financial institutions worldwide. We have
invested in re-engineering Misys Opics,
launching Misys Opics Plus in May
2006. This provides customers with
an SOA environment delivering huge
performance leaps in processing and
scalability. We have also built in significant
risk and compliance functionality to
further enhance the product.

• We increased the addressable market
for Misys Loan IQ
Misys Loan IQ remains the market
leading middle and back office solution
in commercial lending for both the
syndicated lending and secondary loans
markets. We have responded to market
demands by increasing our front office
capability and offering greater user
configurability. The product is currently
being migrated to Java and is on schedule
for release later next year.
Quality improvement
This year our product development
teams made particularly significant
progress in the area of product architecture.
We are investigating how best to exploit
commonality in our products, with a more
consistent product set that meets customer
expectations and has fewer defects.
Before any new products are launched they
will undergo rigorous, external testing.
We have established a core competency
testing team, separate from the product
developers, who will act as the customer
advocate. They will give an independent
assessment of each product based on code,
functionality and customer expectations.
The production process improvement
programme based on Lean Six Sigma
introduced in Misys Healthcare Systems
generated clear cost and performance
improvements, particularly in the area of
customer satisfaction, which is critical for
us. Later this year we expect to introduce
Lean Six Sigma programmes in Banking,
drawing on Healthcare’s experiences to
further improve our quality and therefore
customer satisfaction as well.
Looking ahead
We have come through a demanding year
and as a result of the changes we have put
in place we are now in a stronger position
to address opportunities in a dynamic
market. In particular, we have a clear
product strategy and an energised sales
force. Our reorganisation has enabled us
to streamline and present a more coherent
face to customers. We have entered the
new financial year confident we can
generate impressive value long term.
80% of product
development takes
place in our Bangalore
and Manila centres
Bank of India rolls out Misys Midas Plus across
three continents
This year Bank of India implemented Misys Midas Plus in its
international branch banking operations. This was one of the
widest and most advanced deployments of any core banking
system in the world, stretching across 16 locations, seven time
zones and three continents.
Concentrating its operations in Singapore, the system provides
the bank with a single real-time view of its entire business
worldwide. All functionality is managed centrally, including
transaction processing across treasury and capital markets,
commercial lending, trade finance, payments and retail services.
Page 21

Misys Healthcare Systems
The US healthcare system is increasingly
turning to IT to address fundamental
challenges. Recognised in the market
for our high standards of customer
service, we are continuing to evolve
our product portfolio to serve the most
valuable segments within this market.
Page 22 Misys plc Annual Report 2006
Market overview
Healthcare provision in North America is
under enormous pressure. Medical care
is already the largest consumer of US GDP,
but costs are expected to increase further
due to an ageing population, the prevalence
of chronic diseases and increasing demand
for treatment.
High levels of medical errors and resulting
claims, as well as complicated payment
arrangements, are overwhelming the
system in some places. Many providers
report capacity issues, with too few clinical
staff and the need to spend too much time
on paperwork.
The complexity of the healthcare system
is a contributory factor. A wide range of
individuals and organisations provide clinical
services to patients and relationships
between these providers can be disjointed.
Meanwhile, the US government has made
a public commitment to improving quality
of care, while patients are demanding
better information and more choice when
making decisions about the treatment
that they are increasingly paying for.
There is wide acceptance that IT can
play a valuable role in helping providers
address these issues. For this reason, we
expect overall spending on IT in the US
healthcare system to increase from $8.9bn
in 2004 to around $16.3bn by 2008. Overall,
we believe third party IT providers have
penetrated just 15% of clinical systems in
the ambulatory sector (non hospital-based
services) in the healthcare market so far.
We expect to see significant sustained
growth of electronic health records
(‘EHR’) in particular, as care givers extend
their use of IT to address cost and
quality issues.
Many of our addressable market segments
remain relatively immature and fragmented,
with a large number of software providers
serving a very broad range of customers.
We believe buyers will continue to choose
from two types of software provider –
one able to deliver the best solution of its
type for a specific function, or a strategic
supplier able to support the customer
across a range of needs and functions.
However, many buyers are now seeking
to reduce the number of vendors they use
while extending their strategic relationships
with larger suppliers and this trend is
likely to benefit established players with
broad offerings, such as Misys.
Our market position and strategy
We are one of the largest providers of
healthcare IT solutions in North America
and one of few businesses able to offer
software products across all four main
venues of care – physicians’ offices,
hospitals, patients’ homes and long-term
care facilities. Our strategy is to provide
leading products in each venue of care,
with the greatest emphasis on the fastest
growing segments within each area.
Our ability to work with clinical information
across all venues of care sets us apart from
many competitors. We have also developed
exceptional relationships with customers
over 25 years of doing business, enabling

Misys products are
used by: 1,200 hospitals,
110,000 physicians,
18,000 physician
practices, 600
homecare agencies
us to deliver products and services
which add real value to our customers’
organisations. Our deep knowledge of the
physicians’ office segment, for example,
is particularly valuable as we believe a
substantial amount of patient information
is captured outside the hospital before it
travels across the wider system.
Investing in our product development
We again invested significantly in developing
our products in the last year. Clearly, the
efficiency of our development processes
is important to us and we increased
headcount in our offshore development
centre in Bangalore. In Healthcare we now
employ around 350 experts in Bangalore,
an increase from last year of 50%. We will
move into a new purpose-built office in
Bangalore later this financial year, which
we will share with Banking, helping us to
find further efficiencies.
In line with our strategy, we concentrated
development investment and management
resource on the most valuable products
and those with the highest growth
potential. Interoperability is a focal point
and we have continued to advance the
development of Misys Connect, our Webbased
data sharing solution.
In particular, this year…
• We launched Misys EMR version 8.0
Our biggest undertaking yet was the
successful launch of Misys EMR version
8.0, which went on general release in
May 2006. This has significantly upgraded
functionality for large and medium-sized
physician practices. Fifty existing
customers went live with version 8.0
within a few weeks of launch. R&D this
year has concentrated on introducing
new levels of interoperability with devices,
laboratories and pharmacies, together
with improved functionality to further
support the clinical decision-making
processes.
• We launched Misys CPR version 5.0
We launched Misys CPR version 5.0
successfully in February 2006. Our focus
here is making CPR (Computer-based
Patient Record) products, targeted at
hospitals, smarter, easier to use and
deploy and more collaborative, with
reduced cost of ownership. This year
we added secure Web access, improved
database and documentation
management and integration for
laboratories, enhanced configuration
and display, and added a fully integrated
prescription system.
• We further developed our Homecare
product
Better IT can help to improve
communications between patients based
at home and their healthcare providers.
This year we continued the migration
of our Misys Homecare solution to
.NET architecture, which increases our
addressable market by making products
compatible with many more healthcare
systems. We also upgraded the clinical
functionality and usability of our products
and introduced PDA-support for home
health aides. Our new PDA application
was recognised as Number 1 in the
TEPR (Towards an Electronic Patient
Record) ‘Hot New Products’ awards.
• We launched Misys PatientLink
In August 2005 we launched a new Web
site service for health providers, Misys
PatientLink. This addresses demand for
better communications between patients
and providers. Our secure portal, which
is fully integrated with our EMR and
physician practice management systems,
enables patients to complete forms,
request appointments, access results
and communicate with physicians
online, saving time for both the patient
and provider.
• We acquired and integrated Payerpath
In January 2006 we acquired Payerpath
Inc, the leading Internet-based health
claims transactions business in the
United States. Payerpath, A Misys
Company, as it is now branded, is an
excellent complement to our wellestablished
transaction services
business and will enable us to serve
high growth markets such as payment
and eligibility data, and clinical data.
We see excellent opportunities to convert
existing Misys customers to higher value
Payerpath products, to extend Payerpath
into new areas within healthcare and to
extend our relationships with existing
Payerpath customers.
• Partnerships
We continue to build partnerships
whenever appropriate and this year we
signed initial agreements with a number
of companies including Microsoft, Dell,
Intel and IBM.
Page 23

Misys Healthcare Systems
continued
Projected IT spend
in US healthcare by
2008 is US$16.3bn
Quality improvements
Better product and management processes
have a direct effect on product performance,
customer satisfaction and profitability. In
2005 we introduced a Lean Six Sigma pilot
programme, which, after positive initial
results, was extended in 2006. Lean
Six Sigma is a set of quality and process
improvement techniques pioneered by
some very successful international
companies.
The ‘Lean’ aspect of the programme
addresses the speed and efficiency of our
operational processes, while ‘Six Sigma’
addresses the quality and consistency of
those processes. One example of success
was in our Homecare operation where we
were able to reduce initial response times
from more than 72 minutes to less than 5
for more than 90% of the calls coming in.
By year-end we had completed 15 Lean
Six Sigma projects and are seeing real
benefits in terms of improvements to
customer service. Our numerous awards
for customer satisfaction underline that
satisfaction levels are also increasing
significantly.
In development we have introduced CMMI
(Capability Maturity Model Integration) and
automated software testing to improve
quality and speed of development. CMMI
is a rigorous process that will allow us to
reduce the number of defects earlier in
the development cycle, thus improving the
quality of the product to the customer and
improving our efficiency.
Page 24 Misys plc Annual Report 2006
As a result of this focus on quality, the
reported defects in our CPR product
have been reduced by over 70% since we
acquired the original product in 2003.
Reported defects in our EMR product have
also declined by nearly 40% over the same
time frame.
Thought leadership
We take our position as a leader in the
healthcare IT sector very seriously and
invest in a range of initiatives designed to
position Misys as a leader in both strategy
and deployment. This year we developed
the Misys Center for Community Health
Leadership; a body supported by industry
experts across the country and designed to
support the successful adoption of electronic
health records. The Center was launched
formally in June 2006, with a clear focus
on increasing connectivity between
healthcare providers in local communities
through the provision of grants of up to
US$10m in software from Misys.
Customer satisfaction
Customer satisfaction is a key performance
indicator for Misys Healthcare Systems.
During the year our focus on this was
recognised in a number of significant
industry awards.
• KLAS Enterprises is dedicated to
improving standards in healthcare
information technology. Its annual ‘Best
in KLAS’ awards are based on customer
satisfaction surveys completed by
physician practices throughout the US.
This year:
Misys Radiology – 2005 Best in KLAS
Misys Laboratory – 2005 Best in KLAS
Misys CPR – 3rd in Acute Care,
Orders, Charting
Misys Homecare – 3rd in Home Health
Misys Homecare – 2nd in Hospice
Misys Vision – 2005 Best in KLAS
Misys EMR – Increased customer
satisfaction ratings by 4%
• Frost & Sullivan recognised Misys
Healthcare Systems with two major
awards: one in January for its exceptional
leadership and dedication to serving
its home care clients; and in May for
customer service leadership in healthcare
billing and claims management. The
awards are based on Frost & Sullivan’s
research coverage of the US market.
• Out of over 200 vendors in the healthcare
IT marketplace, Misys Healthcare
Systems was among an elite group of
only 12 receiving a 5-star rating for
Electronic Medical Record (‘EMR’) and
practice management solutions from the
AC Group, which evaluates and ranks
practice management and EMR vendors
in the healthcare marketplace twice
annually. The report recommended Misys
EMR as a top choice for multi-specialty
groups as well as for practices seeking
an integrated practice management and
EMR solution.

Defects in our CPR
product have been
reduced by over 70%
since we acquired the
original product in 2003
Looking ahead
We expect substantial and sustained
growth in demand for IT products and
solutions in this market and believe the
prospects for established healthcare IT
specialists such as Misys are particularly
good. New and existing competitors
represent a significant challenge, but we
are confident that our advantages will
enable us to compete in the high growth
markets across all venues of care.
In addition to the core market developments
described earlier, we see a number of
promising trends in this sector.
These include:
• Demand for a universal connection
across the healthcare community, with
all venues of care and patients linked
by easy-to-use systems based on open
standards. Our Web-based data sharing
solution, Misys Connect, will play an
important role in making this a reality.
• Interest in pay-for-performance models,
with electronic medical records seen as
one possible way to assess and record
the effectiveness of outcomes.
• Growing international market
opportunities, with a number of
healthcare systems observing the benefits
IT is delivering to customers in the US.
Currently, we serve 50 hospitals outside
the US and we see opportunities to
grow here.
We are transitioning to higher growth
market areas and we have the expertise
and development capabilities needed
to lead in our chosen segments. Our
emphasis now is on generating higher
levels of revenue growth, continuing to
enhance product quality and striving
to provide the best possible service to
our customers.
Brockville General Hospital implements Misys CPR in record time
This 103-bed acute care facility in Ontario, Canada, successfully
deployed our computer-based patient record system in just four
months. Misys CPR now enables all 600 employees to access
patients’ medical records, supporting more informed clinical
decision-making.
Implementation began in December 2005 and by April 2006 CPR
functionality was being used live in the laboratory, radiology and
patient registration departments.
Later this financial year all physicians within the hospital will also
be using a computerised physician order entry function within
Misys CPR, which places orders, tracks medication administration
and improves clinical and business reporting.
Page 25

Sesame
Sesame is a leading provider of support
services to financial advisers in the
United Kingdom. Sesame is capitalising
on opportunities presented by a more
positive investment climate, growth
in mortgages and response to its
new multi-tie offering.
Page 26 Misys plc Annual Report 2006
Market overview
All key economic, regulatory, consumer and
financial trends in the United Kingdom affect
Sesame’s addressable market. The mortgage
sector performed better than expected this
year. Financial advisers remain interested
in both standard and non-standard lending
– such as buy-to-let and sub-prime
mortgages and additional services such
as protection, insurance, valuations and
conveyancing. There was further growth
in investment and pensions, as a result of
positive equity markets, ‘A Day’ pension
reform and increased consumer confidence.
High levels of consumer complaints affected
a significant number of advisers this year,
inhibiting their ability to grow profits.
Business failures and heightened risk
generated consolidation in the market and
Sesame benefited from this.
The implementation of the Financial
Services Authority’s (‘FSA’) depolarisation
rules – which came into effect during 2005 –
had a profound effect on the market. The
changes enable financial advisers to offer
advice based on products from the whole
of the market (all product providers), a
single company, or a limited number of
companies. This third option – known as
multi-tie – was introduced by the FSA’s
rule changes and was intended to provide
consumers with better advice and a clearer
understanding of how their adviser will
be paid for the services provided, or the
introductions they make.
The changes in regulation have shaken up
existing business models for all participants.
Several large product providers opted to
concentrate on the products likely to create
the greatest value for them long-term and
exited certain segments of the market.
Advisers are reassessing their strategy.
Many are drawn to the multi-tie model and
Sesame expects to see substantial growth
in demand for multi-tie offers and services
in the next couple of years.
Market position and strategy
Sesame provides services to more than
7,000 financial advisers in the United
Kingdom, which makes it one of the largest
support services providers in its market.
Its strategy is to provide financial advisers
using both independent and multi-tie
models with the best support possible.
It assesses its performance according to
the level of revenue generated from its
core adviser customers, the quality of its
processes and customer satisfaction.
Sesame’s services enable advisers to
make informed decisions when advising
their clients on financial products. It uses
its scale to help advisers benefit from better
commission terms from product providers
and discounted professional indemnity
insurance. It also provides in-depth product
research; regulatory, technology and
training support; and online services that
help to minimise administration and

increase cost efficiency. Scale is essential
to its profitability, as it enables the business
to deliver innovative and competitive
propositions to its customers and also
means it has the capital base to provide
ongoing compliance support and meet its
obligations as a regulated firm.
Sesame had a positive year, benefiting
from strong growth in productivity per
adviser across all major product lines
and particularly mortgages.
Sesame Network provides a rich suite
of bundled services (e.g. compliance,
research, technology, commission rates
and processing) to its clients and the
primary source of income is a percentage
of commission and fees received by its
customers for their services to retail clients.
Sesame Direct offers a bundled or menu
range of services, but as the firms are
regulated directly by the FSA, it is not
responsible for the advice of these firms.
Sesame Select was launched in July 2005.
This is an ‘open multi-tie’ proposition
that provides advisers, who are directly
authorised by the FSA, with a range of
competitively priced products sourced from
five of the top financial services brands in
the United Kingdom – AXA, Legal & General,
Norwich Union, Prudential and Standard Life.
In the circumstance where the adviser is
not able to meet a client’s needs via the
chosen five, then they will go ‘off panel’ to
the open market thereby ensuring retail
Sesame’s services
enable advisers to
make informed
decisions when
advising their clients
on financial products
clients are not disadvantaged. At year-end
Sesame had attracted more than 1,000
financial advisers into Sesame Select
and 700 had begun trading. As expected,
a number of these advisers have
transferred from Sesame’s existing
propositions, contributing to a reduction in
the membership of the Sesame Network
and Sesame Direct.
In the general insurance field, in June
2006 Sesame launched a new product
for financial advisers, Sesame Insure, in
collaboration with Royal & SunAlliance,
to strengthen its position in this market.
During the year Sesame continued to invest
in its brand. It was the first business in its
market to establish a national brand and this
has given it a powerful voice in the industry.
Sesame has high levels of recognition
amongst customers, providers and media
and plans to leverage this and continue
to enhance the value of its brand with
consumers. The clarity and character of
the brand has also proved popular with
employees, assisting the delivery of higher
customer service. Sesame places particular
importance on building financial awareness
in the younger generation and its jargonfree
guide for 14-24 year-olds – ‘Money
Money Money’ – continues to attract
readers; its associated lesson plans are
used as course material in over 700 schools.
Looking ahead
Sesame, since its formation in 2003, has
consistently developed and implemented
rigorous processes designed to mitigate
risk, particularly any failure to comply
with a regulation or otherwise motivate a
customer complaint. These improvements
provide the business with great long-term
stability. Sesame is essentially in a longterm
transition from its traditional network
business, to a service company offering
solutions to advisers, no matter their
regulatory status, their choice of
independent or multi-tie style of trading or
the product range they offer to their clients.
The attraction of Sesame Select as a
business model is that it provides healthy
revenue potential per registered individual
but with much lower cost, as the embedded
regulatory risk is transferred to the directly
authorised firm. This improved business
model, together with the opportunity to
generate more income per user by delivering
new innovative propositions, such as general
insurance, will drive growth in the business.
Sesame is not within Misys’ main focus as
a software company and it sits outside the
Company’s long-term strategy. Discussions
with potential purchasers of Sesame were
ended in March 2006 as the Misys plc Board
considered it was not possible to achieve
a sale price at that time which reflected
Sesame’s value and long-term prospects.
Misys will continue to own and manage
Sesame for the time being.
Page 27

People and corporate responsibility
We place enormous importance on
attracting and retaining quality people
and we take our commitment to the
wider community very seriously.
Page 28 Misys plc Annual Report 2006
People
We employ more than 6,000 people around
the world. We are a product-led Company
and the core competence of our employees
is in developing and delivering software
products and solutions for customers
in healthcare and banking. Nearly 40%
of our people are employed in product
development and many have been with
Misys for more than 10 years. People at
Misys are very proud of the products they
create, sell and service and of their
market knowledge and that enthusiasm,
commitment and expertise is a competitive
differentiator for us.
Peak performance
In 2004, Misys introduced the Peak
Performance Organisation (‘PPO’) concept.
Over the last two years employees from
across the Group have used the PPO
approach to identify common characteristics,
develop a set of shared beliefs and
establish a common purpose across our
core business areas. Peak Performance
is about achieving and sustaining success
as a business through working in a more
cohesive way. We now have a very clear
purpose and sense of direction and PPO
has helped us to develop useful signposts
for all employees to follow. We have also
defined a goal which encapsulates a set
of key performance indicators for the
Company. These are to lead the software
industry in our chosen markets in terms
of customer satisfaction, growth and Total
Shareholder Return.
Employee engagement
The PPO programme has demonstrated
how much our employees feel committed
to the business and how they want to be
involved going forward. The ability of
management to respond to the needs and
suggestions of employees and for employees
to be engaged in the way the Company
plans its future, is very important. We have
conducted employee engagement surveys
within our individual businesses to identify
employee views on key issues. These have
shown that we have more to do in order
to further enhance engagement and our
communications. Employees’ ideas about
how we can improve the business are
important to us and so such surveys are a
meaningful tool. We continuously look for
ways to increase employee engagement
and will act upon the findings of surveys,
in consultation with our employees. In the
new financial year we intend to carry out
our first Group-wide employee survey
which will give us a clear benchmark
from which to move forward.
We place great importance on the
quality and regularity of the Company’s
communications with employees. Over the
last 12 months we have increased our
internal communications activities at all
levels within the Group to communicate
information about changes in our business
and their market context, to explain
business strategy and priorities and to
elicit employee input. We regularly hold
formal and informal employee briefings as
well as management and sales conferences
to update and obtain feedback from
employees on all aspects of the business
as well as making use of Company email,

webcasts and Intranet sites to provide
information, news and interviews with
management. During the year we also
launched *PEAK, our first quarterly
Group-wide publication for all employees,
which encourages employees to provide
‘success stories’ about Misys for wider
promotion around the Group. We regard
communications with employees, as with
all key stakeholders, as a two-way process
and we welcome and act on feedback.
We are also committed to encouraging
employee share ownership. For many years
we have operated tax efficient savingsrelated
share option plans (sharesave
plans) for all eligible UK employees and
for overseas employees in jurisdictions
where it is practicable to do so. Cashbased
phantom share option plans, which
operate in a similar manner to sharesave
plans, are offered where local regulations
mean such schemes are not practicable.
Employees are also frequently provided
with information about benefits such
as pensions.
Employment policies
Misys respects the human rights of all
employees and is committed to the
principles of equal opportunity in all
employment practices, policies and
procedures. We treat all employees and job
applicants fairly and on merit regardless
of gender, sexual orientation, age, race,
nationality, physical ability, political beliefs
or religion. We seek to attract the ablest
candidates from the widest pool of relevant
talent. We do not tolerate harassment or
discrimination of any kind.
People with disabilities are given the same
consideration as others when applying
for jobs. Where employees become
disabled, every effort will be made to retain
them in their current role or to explore
possibilities for retraining or redeployment
within the Group.
Development of key technical skills
The quality of our employees has a direct
effect on the quality of our products,
our relationships with customers and –
ultimately – our financial performance.
Wherever we operate we ensure our
people get access to the training and
development they need to remain at the
cutting edge of technology.
We have made very strong progress with
training and development of our people in
our development centres around the world
and we have had development capability
in certain countries for more than 15 years.
We are very much an international Company
and our approach to offshoring has always
focused on quality and efficiency rather
than just cost management. Today, the
employees in our Manila and Bangalore
centres of excellence are some of the
most experienced, knowledgeable and
skilled in the Company and are critical
to our competitiveness.
Competition for the best talent is tough
in these areas and we are investing in
substantial recruitment campaigns.
Excellent graduates are particularly
important to our future and we are
rolling out a new graduate recruitment
During the year we
launched *PEAK, our
first quarterly Groupwide
publication for
all employees
programme in our Manila and Bangalore
development centres.
We aim to recruit 15 graduates in each
location, with the focus on creating a
pipeline of technical talent. Through the
graduate programme we are establishing
relationships with local universities where
students are gaining technical skills
closely related to the capabilities we need
now and in the future. The programme will
create a pool of home-grown Misys talent,
skilled in the programming languages
vital to our business. After the 12 month
programme our graduates will have a
clear understanding of the Misys culture,
our direction and how they can contribute.
Governance
Our approach to corporate governance
matters is described in the Corporate
governance report on pages 44 to 47.
Misys is very mindful of its role, impact
and responsibilities in the communities it
operates in as well as the wider global
community.
Code of Ethics
We believe it is essential that Misys, our
employees, advisers and agents meet a
high ethical standard wherever we operate.
Ethical conduct promotes trust and
encourages collaboration and we are
committed to conducting business with
integrity. We have a clear Code of Ethics,
a Whistleblowing Policy and reporting
mechanisms – enabling all employees to
Page 29

People and corporate responsibility
continued
report concerns to their line manager,
through the legal or HR department, or
to a Board member.
Our Code of Ethics and Whistleblowing
Policy are published on www.misys.com.
Environment, health and safety
Misys is committed to developing and
maintaining sound environmental, health
and safety standards across all operations.
We depend on the hard work, commitment
and trust of our employees. We recognise
our legal responsibilities to employees,
subcontractors and visitors to Misys
premises and we seek to ensure their
safety and well being in the work place.
We also recognise our commitments to
the wider community with regard to
environmental performance and always
seek to reduce any impacts our operations
may have.
For the first time we are evaluating
our environmental, health and safety
performance across every one of our
businesses and locations. Our aim for
the medium term is to develop clear
and consistent environmental reporting
throughout the Company, with
environmental factors included in all
key operational decision making.
Page 30 Misys plc Annual Report 2006
300 employees in Raleigh,
US, were involved in
organising and taking
part in the local Triangle
Race in support of breast
cancer research
In 2004 an external international
consultancy undertook an environmental,
health and safety audit of key Misys sites
in the United Kingdom, United States
and India and reported to the Board,
concluding that those key sites were
substantially compliant with all relevant
legislation. In 2005/06 we extended the
scope of the audit to include Misys
locations in Hong Kong, Manila and
Singapore. The findings are due to be
reported to the Board in the current year.
Established in March 2005, our
Environmental, Health and Safety Working
Group supports the Board in meeting its
legal obligations in respect of employee
health, safety and welfare at work and
environmental issues. The group works to
identify risks and process improvements,
and to ensure critical improvements are
delivered Company-wide. It is sponsored
by the Finance Director, chaired by the
Company Secretary and its members
consist of key facilities managers from
around the business. The group met four
times between 1 June 2005 and 31 May
2006 and met twice in the previous year.
Objectives of the Environmental, Health
and Safety Working Group
• Formulate and establish a formal
management structure to ensure the
implementation of Environmental, Health
& Safety (‘EH&S’) issues
• Formulate and establish an effective
monitoring and evaluation procedure
• Formulate and establish a procedure to
determine and gather baseline data in
respect of EH&S performance, including
objective and target setting for the Group
• Formulate and establish an effective
compliance programme
• Review and produce an up-to-date EH&S
policy/policies for the Group
• Establish a training matrix and outline
minimum training requirements for the
Group on EH&S matters
In 2005/06 the Group made good progress
against these objectives.
FTSE4Good
Misys is a constituent member of the
FTSE4Good Index. Created by the
independent financial index company FTSE
Group, the index identifies and facilitates
investment in companies that meet globally
recognised corporate responsibility
standards. Companies in the FTSE4Good
Index Series are doing more to manage their
social, ethical and environmental impacts
and are better positioned to capitalise on
the benefits of responsible business practice.

Misys and the community
Misys’ main community contribution is
through the involvement of many of its
employees in a wide variety of charitable
activities and through the Misys Charitable
Foundation.
The Misys Charitable Foundation
The Misys Charitable Foundation was
established in 1997 to help improve
education in information and
communications technology (‘ICT’) worldwide.
It is 100% funded by Misys plc but
is run independently of the Company.
The Company provided a further £100,000
funding to the Foundation in 2005/06, in
line with our commitment to donate at
least £100,000 each year for five years
from 2003 onwards. In 2004/05 the
Company donated £124,453 to the
Foundation.
The Foundation provides three types
of support:
• Scholarships provided through educational
institutions to enable exceptional
students in financial need to undertake
undergraduate and postgraduate studies
in ICT-related disciplines.
• Purchase of ICT equipment through grants
given to educational institutions, notably
primary schools with limited funds.
• General grants to support special
projects where there is a broader
contribution towards ICT education.
In total, the Misys Foundation has funded
267 students at university from 1998 through
to 2007, with 65 of these scholarships
awarded this year. The Foundation has
donated more than £1m since it was
established and in 2005/06 gave £170,000 of
funding to scholarships.
A further £67,500 of funding was given
to nine schools this year, five of which
were nominated for support by Misys
employees. The Foundation encourages
the Company’s employees to nominate
schools for such support. Support
was also given to Voluntary Service
Organisation (‘VSO’) for the provision of
funding for a teacher from the United
Kingdom to develop the IT curriculum in
secondary schools in Ethiopia. In addition,
redundant IT hardware from Misys was
donated to Digital Links International, a
charity that arranges the refurbishment
and dispatch of equipment to needy
schools in Africa. The Foundation also
covered the transport and training costs
involved. During the year the Foundation
gave further donations of £500 to a
number of causes.
The Misys Foundation
has funded 267
students at university
from 1998 to 2007
Other community involvement
In addition to its support for the Misys
Foundation, the Company donates to many
other charities and causes, and supports
employee giving and involvement. This
year, for example:
• During the year the Company donated
US$20,000 to the Hurricane Katrina
appeal fund. Misys employees raised
a further US$66,583 for the fund.
• The Company will re-launch its ‘Give As
You Earn’ scheme in the United Kingdom
during 2006, and will make funds of
up to £100,000 in total available for
matched giving to specified charities
designated by the Company.
• 300 employees in our Healthcare
business in Raleigh, United States, were
involved in organising and taking part in
the local Triangle Race, in support of
breast cancer research.
• 200 employees in Raleigh and 50
employees in Richmond, United States,
provided community support during the
holiday season, helping needy families
with clothing, personal items, toys.
Page 31

Financial review
Operating results for the year ended 31 May 2006
Page 32 Misys plc Annual Report 2006
Revenue Operating profit Return on revenue
2006 2005 2006 2005 2006 2005
£m £m £m £m % %
Banking 265 248 37 41 14 17
Healthcare 314 304 49 45 15 15
Sesame 370 313 9 5 2 2
Group – – (9) (9)
Like for like results 949 865 86 82 9 10
Changes in exchange rates – (16) – (2)
Profit on disposal of WebMD common stock – – – 3
Disposals – 6 – 1
Acquisitions 4 – – –
Adjusted results 953 855 86 84
Exceptional items – – (28) (12)
Other – – (2) –
Statutory operating results from continuing operations 953 855 56 72
i. The statutory operating profit from continuing operations is analysed by business into Banking £22.3m (2005: £40.9m), Healthcare
£45.4m (2005: £42.6m), Sesame £1.9m loss (2005: £5.3m loss) and Group costs £10.0m (2005: £6.4m).
ii. Restating the results for 2005 using the average exchange rates for 2006 has increased 2005 revenues by £16.8m (Banking: £3.4m
and Healthcare: £13.4m) and operating profit £2.5m (Banking: £0.3m, Healthcare: £2.2m). The most significant impact is from the
movement in the US dollar, where the average exchange rate in 2006 was US$1.78:£1 compared to US$1.86:£1 in 2005.
iii. Profit on disposal of WebMD common stock of £nil (2005: £2.7m) are included within Group costs.
iv. The businesses disposed of in the current year related solely to Sesame and contributed revenue of £0.4m in the current year
(2005: £6.4m) and adjusted operating loss of £0.1m (2005: £0.9m profit).
v. The businesses acquired in the current and prior year contributed incremental revenue and adjusted operating profit for Banking:
revenue of £1.7m and profit of £0.4m and for Healthcare: revenue £2.3m and losses of £0.8m.
vi. Exceptional items consist of: Restructuring programme in Banking £13.9m (2005: £nil); Acquisition integration costs in Healthcare
£2.0m (2005: £nil); Profit on disposal of associate in Sesame £8.0m (2005: £nil); Loss on disposal of businesses in Sesame £2.8m
(2005: £2.7m); Estimated costs and redress payments associated with regulatory reviews and complaints in Sesame £15.7m (2005:
£8.9m) and Discontinued disposal costs in Group £1.4m (2005: £nil).
vii.Other items include gains on embedded derivatives in Banking £0.3m (2005: £nil) and amortisation of acquired intangibles in
Banking £1.9m (2005: £0.3m) and Healthcare £0.5m (2005: £nil).

To assist the reader’s understanding of the results the table
opposite shows the results for all businesses owned throughout
both periods on a ‘like for like’ basis and also reconciles these to
the figures for revenue and operating profit on an adjusted basis
and as reported in the income statement. During the year we
disposed of the General Insurance business and the results for
General Insurance are excluded from revenue and operating
profit from continuing operations and are included at the foot of
the income statement, just above attributable profits. Accordingly,
General Insurance does not appear in the reconciliation above.
The ‘like for like’ results are stated before exceptional items, gains
and losses on embedded derivatives, amortisation of acquired
intangibles and profit on disposal of WebMD common stock.
They also exclude the results of businesses disposed of and the
incremental benefit of acquisitions. Figures are quoted in sterling
using average exchange rates for the year ended 31 May 2006.
Adjusted results are stated before exceptional items, gains and
losses on embedded derivatives and amortisation of acquired
intangibles.
Group and divisional performance
Group
Information in this section relating to the Group and divisional
performance and within revenue profile are on a like for like basis
as defined and presented above unless otherwise stated.
Revenue for the year at £949m was 10% above that of the
previous year. Banking, Healthcare and Sesame all reported
increases in revenue. Operating profit at £86m was 5% ahead of
last year whilst the operating margin was slightly below last year.
Operating profit in Banking declined, but both Healthcare and
Sesame delivered strong increases.
Banking
all figures in £ millions 2006 2005
ILF order intake 84 77
Closing ILF order book 31 31
Overall, Banking delivered solid growth with total revenue at
£265m rising by 7%. Initial Licence Fees (‘ILF’) order intake at
£84m was 8% ahead of the prior year, resulting in strong growth
in ILF revenue, up 15% for the full year. The closing order book at
£31m was in line with last year.
Maintenance revenue at £121m, 3% ahead of last year, showed
stronger growth than in the last couple of years, reflecting growth
in ILF and the continued stability of our large installed customer
base. Professional services revenue was flat at £48m, principally
reflecting the impact of the contract deferrals highlighted at the
time of our AGM trading update.
Operating profit at £37m was 10% behind last year, principally
reflecting the contract deferrals, with operating margin at 14%
for the full year (2005: 17%), having been 12% in the first half.
During the year we brought together our Retail and Wholesale
banking operations as Core Banking, and have integrated the
Basel II compliance solution, Almonde into that business unit. We
are retaining our Risk Vision business and focussing it on serving
our existing customers. As a result of this restructuring, which was
announced at the time of our Interim Statement, the division has
incurred an exceptional charge of £14m (including a £3m write-off
of capitalised development costs relating to Risk Vision). This
charge was within the expected range indicated at the time of our
Interim Statement and we expect to achieve cost savings of about
£15m in the financial year ending 31 May 2007 which will be largely
reinvested in the business, particularly in product development.
Healthcare
all figures in £ millions 2006 2005
ILF order intake 55 58
Closing ILF order book 27 29
Revenue at £314m was 3% ahead of last year overall with
maintenance and professional services revenue growing strongly.
Order intake for professional services was ahead in all businesses
resulting in revenue growth of 11% in the year to £34m. This
growth reflects the increasing importance of professional services
in our total order intake mix. ILF revenue was down 4% at £57m
and ILF order intake also decreased by 4% to £55m. We continue
to see stronger demand for Misys EMR and Misys Homecare
which has resulted in strong growth in order intake from new
clients. This growth was more than offset by reduced ILF order
intake in both Hospital Systems and upgrade sales to our existing
physician customers. The reduction in Hospital Systems is partly
a result of a change in sales mix with a higher proportion of the
contract value being related to professional services.
Maintenance revenue showed good growth at £123m, 8% ahead
of last year, demonstrating the strength of our installed customer
base. Transaction services revenue was flat at £68m.
Operating profit at £49m was 9% ahead of last year, reflecting an
improvement in the operating margin from 14.7% to 15.4%.
Page 33

Financial review
continued
Sesame
Number of RIs at 31 May 2006 2005
Sesame Network RIs 4,300 5,050
Sesame Direct RIs 2,400 3,100
Sesame Select RIs 700 –
7,400 8,150
Gross cash received per Network RI (£’000) 74 59
Revenue at £370m was 18% higher than in the prior year.
This reflects a significant increase in RI productivity, including
strong take-up of Sesame’s mortgage offerings in an investment
climate that was generally more positive than in recent years.
Encouragingly over 1,000 financial advisers were recruited into
the Sesame Select open multi-tie proposition, with 700 having
begun trading, since launch last July. As expected, a number of
these advisers have transferred from our existing propositions,
contributing to a reduction in the membership of both Sesame
Network and Sesame Direct. Operating profit at £9m was well
ahead of last year and the operating margin improved slightly
to just over 2%, in part as a result of favourable timing effects.
Group costs
The net charge for the year, at £9m, is broadly in line with last year.
Exceptional items
A net exceptional charge of £28m for continuing operations
has been made this year mainly in respect of the restructuring
programme within Banking and additional provisions in respect
of regulatory reviews and endowment complaint costs within
Sesame. In the prior period a net operating exceptional charge
of £12m principally related to regulatory review and future
endowment complaints costs.
Revenue profile
Page 34 Misys plc Annual Report 2006
Endowment complaints
During the past two years, along with the rest of the industry,
Sesame has experienced a significant increase in the volume
of complaints from consumers about advice given by IFAs
regarding the sales of endowment policies. This is due to
increased consumer awareness, poor stock market performance
over the life of the policies and action taken by the majority
of product providers to crystallise their liabilities with regard
to past endowment complaints. Given the levels of endowment
complaints that were being received, the increasing rate at which
they were being upheld and the expectation that the volumes
of future complaints were going to be significant, last year a
provision was made for the Directors’ best estimate of the costs
associated with complaints that were to be received in the future
with respect to past sales of endowments. During the year
these estimates have been reviewed and updated to reflect the
Directors’ current best estimate of the costs associated with
complaints that are to be received in the future based on the
actual experience over the last year. This reassessment of the
provision for future endowment complaints together with similar
assessments of the other regulatory review provisions which
when created were treated as exceptional last year, has resulted
in a further net exceptional charge in the current year of £16m.
The additional charge arising from this reassessment of the
future endowment complaints provision is consistent with the
experience of others in the industry that have had to reassess
and increase previous provisions.
Other exceptional items
Further details of other exceptional items can be found in note
2 to the financial statements and principally relate to profits
and losses on disposal of businesses together with acquisition
integration costs and costs related to the terminated disposal
process for Sesame.
2006 2006 2005
Statutory Like for like Like for like
Continuing operations £m % £m % £m %
ILF 144 15 144 15 132 15
Maintenance 246 26 246 26 234 27
Transaction Processing 447 47 445 47 387 45
Professional Services 84 9 82 9 80 9
Hardware 32 3 32 3 32 4
953 100 949 100 865 100

Revenue may be analysed under five generic headings, being
ILF, maintenance (including recurring licence fees (‘RLF’)),
transaction processing, professional services and hardware.
ILF is the revenue generated when Misys sells the right to use a
software product (including significant upgrades) to a customer.
When a customer buys software they also enter into either
a maintenance or RLF contract. These contracts provide
technical support or trouble-shooting assistance (helpdesk, etc).
In addition, a maintenance contract provides routine upgrades
and enhancements. Maintenance also includes fees for support
contracts for hardware.
Related to some products, Misys provides transaction processing
services, comprising both EDI services, being an electronic link
between parties who wish to exchange data, and computer aided
processing activities, such as data centre capabilities or Internet
transactions. Misys undertakes both forms of transaction
processing in Sesame; while Healthcare and to a much lesser
extent in Banking currently focuses on EDI.
On a like for like basis, all revenue streams have recorded growth
in the current year. The strongest growth was in transaction
processing driven by the strong performance in Sesame. ILF
also grew strongly up 9% driven by another strong performance
in Banking. Maintenance revenues also showed good growth at
5% compared with a growth rate of 4% last year driven by an
increase in the rate of growth in both Healthcare and Banking.
Professional services showed more muted growth up 4%
compared with last year with stronger growth in Healthcare
and in Banking remaining in line with last year following certain
contract deferrals during the year as discussed earlier. Hardware
revenues are less significant due both to their size and their
lower margin and were in line with last year.
Other financial information
Unless otherwise stated, the information in this section is
presented on an ‘as reported’ basis.
Deferred income
Deferred income on the balance sheet, which represents
amounts invoiced but not yet recognised as revenue, is £119m
(2005: £117m) on a reported basis. Within the overall balance,
£84m (2005: £80m) relates to deferred maintenance fees which
are generally invoiced annually in advance and recognised over
the contract period. The remaining £35m (2005: £37m) relates
to amounts invoiced for products and services that have not yet
been delivered, completed or fully accepted by the customer at
the balance sheet date. The reduction reflects the disposal of
General Insurance and adjusting for this the amount is in line
with last year.
Finance costs
The interest and other finance costs charge at £16m was £6m
higher than last year. This was due mainly to increased average
interest rates and a small increase in average borrowings, the
latter due to the share buyback programme towards the end
of the year ended 31 May 2005 and during the year ended
31 May 2006. Interest cover, including results from discontinued
operations and before exceptional items, gains and losses on
embedded derivatives and amortisation of acquired intangibles,
was slightly more than six times.
Profit before taxation
Statutory profit before taxation, at £39m, was £22m below last
year reflecting the increased charge for exceptional items and
higher financing costs. The tax charge on ongoing ordinary
activities at £15m is broadly in line with last year. The underlying
effective tax rate, based on the adjusted profit before taxation
of continuing and discontinued operations, at 18% was slightly
ahead of last year. Adjusted profit before taxation excludes
exceptional items, gains and losses on embedded derivatives,
amortisation of acquired intangibles and exchange gains and
losses on debt previously hedging goodwill written off to
reserves.
Acquisitions and disposals
Within Banking, the Group acquired Almonde Inc in July 2005,
INTESIO GmbH in February 2006 and NEOMAlogic SARL in March
2006, for a total consideration, including expenses, of £29m,
which resulted in goodwill of £13m. Since we were already acting
as agent for Almonde there are no incremental results for this
business. Excluding Almonde, the acquisitions have contributed
£1.5m revenue and £0.6m operating profit in the period since
acquisition.
Within the Healthcare business, the Group acquired Payerpath Inc
in January 2006, along with other assets in the physicians market
in March 2006, for a total consideration, including expenses,
of £31m, resulting in goodwill of £20m. The acquisitions have
contributed revenue of £2.3m and operating losses of £2.8m in the
period since acquisition, of which £2.0m of acquisition integration
costs has been disclosed as an exceptional item.
Within Sesame, the Group disposed of its 60% shareholding
in AssureWeb Ltd in July 2005 and its 29% investment in First
Software (UK) Ltd in August 2005 for total net consideration of
£11m, realising a combined profit in the year of £5m which has
been disclosed as an exceptional item. The revenue and losses
for AssureWeb up to the date of disposal were £0.4m and £0.1m
respectively (2005: £6.4m revenue and £1.8m operating loss –
after an impairment of assets of £2.7m disclosed as an
exceptional item in 2005).
Page 35

Financial review
continued
Discontinued operations
During the year the Group disposed of the General Insurance
business which has been shown under discontinued operations.
In the current year, this business generated profit after tax of
£187m comprising the realised profit on disposal of £172m after
taxation and an operating profit and profit after taxation of £15m
up to the date of disposal on 5 May 2006. The prior year figure
of £16m relates to the operating profit and profit after taxation
for the whole of the year ended 31 May 2005. In calculating the
adjusted EPS figures, the operating profits noted above have
been included within this calculation whereas the realised profit
on disposal of £172m after taxation has been excluded.
Cash flow and net debt
The Group has maintained its strong cash performance with net
cash flow generated from operations of £107m (2005: £100m).
This good performance, which follows equally strong cash
generation in prior years, results from the Group’s rigorous
focus on cash and cash management by operating businesses.
Cash payments in respect of both interest and taxation of £16m
and £15m respectively, are broadly in line with the charge in the
income statement. These cash outflows were significantly ahead
of the prior year as a result of higher financing costs, mainly as
a result of higher prevailing interest rates, and the timing of the
settlement of taxation charges. As a result net cash flow from
operating activities of £76m was £7m below last year.
Capitalised expenditure on developed software and other capital
expenditure totalled £23m compared with £20m last year.
Accordingly the net cash flow generated by operating activities
after capitalised development costs and other capital expenditure
was £54m compared with £63m last year.
Dividend payments in the full year, being last year’s final dividend
and this year’s interim dividend totalled £34m in line with last year
as the increase in the dividend per share was offset by the effect of
the shares repurchased both this year and at the end of last year.
During the year the Group has repurchased a further 12m shares
at a cost of £25m compared with £53m last year for 26m shares.
The net cash inflow from corporate activities (i.e. proceeds from
disposals less the cost of acquisitions) was a net inflow in the
year of £119m compared with an outflow last year of £9m. In
the year just ended, this principally related to the disposal of
the General Insurance business which raised net cash of
£180m, offset by net cash consideration of £51m in respect of
acquisitions during the year. The principal acquisition was
in respect of Payerpath within the Healthcare business.
As a result of these various cash flows net debt at 31 May 2006
was £95m compared with £219m last year.
Page 36 Misys plc Annual Report 2006
Earnings per share and proposed dividend
Basic EPS at 44.0p was 31.6p above last year, principally due to the
profit on the disposal of the General Insurance business. Adjusted
EPS (adjusted to exclude exceptional items, gains and losses on
embedded derivatives, amortisation of acquired intangibles and
exchange gains and losses on debt previously hedging goodwill
written off to reserves) at 14.3p (2005: 14.8p) was 3% below
last year. In the opinion of the Directors the adjusted basic EPS
provides more comparable and representative information on
continuing and established trading activities of the Group. The
Board is recommending a final dividend of 4.49p per share. This
will raise the full year dividend to 7.18p, an increase of 5% over
last year.
IFRS
Misys has adopted International Financial Reporting Standards
(‘IFRS’) as adopted by the European Union and with those parts
of the Companies Act 1985 that are applicable to companies
reporting under IFRS from 1 June 2005 with a transition date
of 1 June 2004. Comparative figures for the year ended 31 May
2005 and the balance sheet at 31 May 2005 that were previously
reported in accordance with accounting principles generally
accepted in the United Kingdom, have been restated to comply
with IFRS, with the exception of IAS 32 ‘Financial Instruments:
Disclosures and Presentation’ and IAS 39 ‘Financial Instruments:
Recognition and Measurement’ which have been applied
prospectively from 1 June 2005.
The most significant impacts of transition to IFRS on net assets
are the removal of amortisation of goodwill and the capitalisation
of development costs, which along with share-based payments
also effect the income statement. There has been no impact on
the underlying cash flows generated by the businesses.
Further information on the transition to IFRS, including a
reconciliation of retained profit for the year ended 31 May 2005
and shareholders equity at 1 June 2004 and 31 May 2005, is
shown in note 38 to the financial statements.
Risk factors
Our business is influenced by a number of risks and the more
significant of these are described below. However the financial
performance of our business could be adversely affected not only
by these factors but also by the risks that we do not presently
consider to be significant or by other risks that are presently
unknown to us. Not all of the risks that are identified below are
under the direct control of Misys but in most cases we have built
systems and controls into the Group operations to monitor and,
where possible, mitigate the potential damage that could result
from these risks (see also the Corporate governance report).

Risks arising from the markets in which we operate
Economic cycles
The market demand for the products offered by our Banking and
Sesame businesses are sensitive to an economic downturn. The
strength of the revenues of the Banking business is reliant upon
banks continuing to seek competitive advantage and greater
efficiencies from technology and this encourages them to make
further investments in this area. Such investments are more
likely to be made during periods of economic growth. The same
can be said of Sesame which owes its revenues to the success
of the member firms which it services and this can be related to
economic growth particularly in the UK. However the Healthcare
business is not considered to be as sensitive to the state of the
economy, as the US propensity to spend on healthcare has been
somewhat insensitive to the condition of the US economy.
Strategy
The markets in which we operate move quickly. Entering and
exiting new segments of the market, developing new products
and discontinuing others can have substantial lead times. To do
this successfully we need to predict both future areas of demand
and also the future capabilities of our competitors. At times it is
difficult to obtain quality information on the changing demands
of the market which may result in decisions needing to be made
with imperfect data. Failure in this area could result in our
making investments in the wrong product or failing to invest
in a product that will enjoy a successful market. In view of these
risks the strategy adopted is comprehensively communicated
throughout the senior management team and the
implementation of this strategy is regularly reviewed.
Acquisitions and disposals
One of our key strategic objectives going forward is to seek
acquisition opportunities with a view to complementing our
existing product and services portfolio. Consequently we
regularly acquire or dispose of companies. This gives rise to
execution risks in identifying and valuing the target, managing
the process to best advantage and integrating or separating the
target business. These tasks are therefore performed to a set
of procedures by a dedicated team that call upon external
resources as required.
Product development
Likewise, having made a decision to invest in a product there
are many risks in bringing a product development project to
a conclusion on schedule and within budget. This process is
managed by developing a product roadmap, for each product
group, that identifies the enhancements that will be made to
successive versions of the product in the years ahead. Our
application software products and services are complex and
may contain undetected errors, failures, performance problems
or defects. The early releases of a product will have been
subjected to beta tests but not the more stringent test of
widespread use by large numbers of users. Consequently,
despite rigorous pre release testing, problems may not become
apparent until the system is used in production environments.
Certain Healthcare products will need to meet with the
regulations imposed by the US Food and Drug Administration,
which impose high standards of quality assurance that become
an inherent part of our procedures. However the ultimate risk of
patient harm remains. The product development teams network
extensively amongst themselves and beyond to ensure best
practice is followed.
Risks arising from operations
People
Our people are our greatest asset and the market for quality
technology skills and management is very competitive. It
consequently remains a constant challenge to retain, develop,
incentivise, manage and motivate our staff. If we were to lose the
services of members of management or employees who possess
specialised market knowledge and technology skills, we may not
be able to manage our operations effectively or develop new
application software products and services. We therefore take
talent management very seriously. Our people are appraised
regularly, given individual development plans and other incentive
packages. Potential successors are identified for all senior roles.
Contract implementation
Misys prides itself on being seen as a business partner to its
customers and supplying them with mission critical systems. Often
the system will transcend departmental boundaries within the
client’s organisation and may be a part of a larger project involving
other suppliers. The process of introducing a system in such an
environment may be disruptive to the client in the short term and
the implementation may be subject to project management by the
client or by others. Consequently our large contracts, such as
some of the contracts we have with banks and hospitals, will have
long implementation schedules and an increased risk of delays
during these implementation periods with consequential risks to
the cash flows and profits that were expected from that contract.
It is also possible that the needs of the client will change during
the implementation period for a reason that is outside Misys’
control. In the extreme, the client may no longer have a need for
the Misys product that they have contracted for. Such instances
are rare and typically resolved through negotiation.
Furthermore the products and services developed by the software
applications industry in general, are characterised by lengthy
sales cycles that may cause revenues and operating results to be
unpredictable and to vary significantly from period to period.
Page 37

Financial review
continued
Political uncertainty
Misys has operations in over 30 countries and customers in over
120. This geographic diversity exposes parts of our business to
the risk of political unrest. We maintain significant research and
development operations in Bangalore and Manila. Political or
social instability in either of those areas could seriously harm
our research and development operations. Our operations do
have business continuity plans but a level of disruption could
nevertheless be expected if political unrest, or indeed any other
disruptive event such as a natural disaster, should occur.
Key suppliers
Certain of our products are dependent upon inputs from
key suppliers. We are dependent on the performance, service
and reliability of operating systems, middleware, databases,
programming language compilers and similar software
infrastructure, all of which we obtain from a large number of third
party providers. Such third party applications may suffer from
defects or errors which could adversely affect the performance of
our application software products and services. Moreover, if we are
unable to adapt our application software products and services to
function with new releases of such third party applications, or if
such third party applications were to be withdrawn or discontinued,
we may incur significant costs in eliminating these third party
components from our products and our ability to deliver new
systems and maintain existing customers could be adversely
affected. Suppliers are consequently chosen that have stable
strategies that match our own and produce a mutually beneficial
relationship that is carefully managed by both parties.
Infringement of intellectual property rights
Over many years we have made significant investments in our
products which have resulted in Misys owning substantial
intellectual property rights. We generally protect our proprietary
application software products and services by licensing rights to
use the application, rather than selling or licensing the computer
source code. We also protect our proprietary software and
services by copyright law. Possible infringement of our intellectual
property rights could cause us to lose revenue, adversely affect
our ability to operate our business and could damage our
trademarks. Furthermore there is always the risk that we have
inadvertently infringed the intellectual property rights of a third
party. If any such claim against us were successful we would
probably face one of three choices. Firstly we may need to redesign
our product, which would demand further investment in
that product. Secondly we could take a licence on the infringing
intellectual property that is contained within our product and this
may not always be possible on acceptable commercial terms.
Thirdly we could cease to sell that product and accept the decline
in revenues. An intellectual property claim that is made against
us, whether or not it has merit, would also be a drain on
management attention and so prove to be disruptive to our
Page 38 Misys plc Annual Report 2006
business and could cause delays in product development. The risk
is mitigated through our contractual arrangements and by the
careful adherence to Group policy on open sourced software.
Government regulation
In recent years the UK financial services industry has been
subject to increased regulation from the Financial Services
Authority. This has resulted in many cases of parties successfully
claiming to have been mis-sold financial products. The cost to
Sesame of investigating these claims is significant. Furthermore,
if the claims are ultimately found to be justified, there are further
costs to Sesame which may or may not be recoverable from the
member firms or from our insurers. Consequently an increase
in the rate of claims being made, an increase in the uphold rates
of such claims, further regulation by the Financial Services
Authority or further mis-selling reviews under existing regulation
could all consequently result in further costs to Sesame. In
addition, the Group is subject to the laws and regulations of a
number of countries covering a wide variety of areas affecting
international transactions, including export controls, anticorruption
legislation and data protection requirements.
Attack by IT viruses
As an IT business this will always be a threat that requires sound
IT infrastructure and virus protection software. Furthermore
Sesame and Healthcare both obtain substantial revenues from
online trading activity. A disruption to service would, in time,
result in customers reverting to traditional means of conducting
business and so circumventing the Misys service. Finally if third
parties misappropriate our users’ information, we may be liable
for substantial damages, our reputation may be damaged and
users may be deterred from using our application software
products and services.
Financial risks
Tax risks
The geographic diversity of Misys was described above under
Political Uncertainty. We may be subject to tax audit in many of
the countries in which we operate, in accordance with the local
practice. This introduces an exposure to new tax risks, such as
a challenge to our transfer pricing policies, and it raises the
possibility of the same profits being taxed in more than one
country. Furthermore tax legislation is complex and often results
in lengthy negotiations before certainty of the tax treatment to a
complex transaction is achieved.
Legislative risks
Some of the countries in which we have operations control the
repatriation of earnings and capital. These controls may vary at
short notice and consequently give us a risk of delaying or even
preventing cash flows back to the parent.

Fluctuations in exchange rates
The same geographic diversity leaves us exposed to fluctuations
in exchange rates with the highest exposure being against the
US dollar and euro. Where possible we routinely hedge currency
exposures on trading transactions that would otherwise give us a
risk from movements in the exchange rate; for example between
entering into a sales contract and receiving payment. However
the translation risk which arises when consolidating the financial
results of the overseas entities is not hedged. We also run the
economic risk that results for example from the cost base of the
development centres being unrelated to the currencies of the
markets in which the end products are eventually sold.
Retirement benefits
We operate a number of ongoing and legacy pension schemes
in the countries in which we operate. While we do not foresee
a material problem from a deficit on a defined contribution
scheme, in many countries pensions are highly regulated and we
therefore remain at risk from falling outside of local regulations.
Treasury controls and operations
The Group has in place treasury policies that are reviewed
annually by the Board and more regularly by the Treasury
Committee that comprises certain executive Directors and a
non-executive Director. The policy covers all significant areas
of treasury activity, including foreign exchange, interest rate,
liquidity and credit risk. The Group has a centralised treasury
that provides a service to the corporate centre and to the
operating businesses. Its primary function is to manage the
foreign exchange, interest rate, liquidity and credit risks arising
from the operations of the business. It is not a profit centre and
enters into derivative contracts solely for the purpose of hedging
the exposures that arise in the normal course of business. The
Group’s policy is not to enter into speculative transactions.
The Treasury Committee is responsible for ensuring that the
Group operates within the treasury policies agreed by the Board.
Regular reports are made to the Board from the Treasurer and
from the Treasury Committee.
The Group finances its operations through a mixture of retained
profits, new equity, loan notes and bank borrowings. It is policy
to ensure that the Group has sufficient financial resources to
support the business and, as a result, substantial committed
facilities are maintained. The Group also has a policy to ensure
that it maintains a comfortable margin between committed
facilities and the likely peak borrowings during a year.
The core debt financing of the Group is provided by a revolving
facility of $850m (£454m at 31 May 2006 exchange rates). This
comprises a tranche of $585m, which matures in March 2010,
and a second tranche of $265m, which matures no later than
March 2008. During the year the maturity of the second tranche
was extended from a final maturity which had been March 2007.
These facilities allow the Group to borrow funds in any major
currency at the related floating rates of interest.
The Group has substantial investments in the US and
consequently the debt drawn under the revolving facility is
predominantly in US dollars. However the floating rate nature of
the debt gives the Group an exposure to interest rate fluctuations.
In managing this we have sought a balance between the certainty
of interest charge and the flexibility to permit our borrowing
levels to change dramatically, such as following a substantial
corporate transaction. Consequently the Group has protected
the interest charge on $100m of the bank debt from increases in
interest rates via an interest rate cap that matures in June 2007.
This gives the Group a mixture of floating rate and capped debt.
The Group has operations in over 30 countries and trades in over
120. Subsidiaries may trade in currencies other than the
functional currency of their operation and in such cases the
currency is usually sterling or US dollars. It is the Group’s
policy to eliminate transactional currency exposures through
forward foreign currency contracts as soon as the contractual
commitments to receive (or pay) the foreign currency is known.
The Group is also subject to a currency exposure on the
translation of the net assets of, and profits earned by, its
overseas subsidiaries which are primarily those located in the
US and Europe. This exposure is not hedged.
The Group invests its cash and cash equivalents, and enters
into contracts for derivative financial instruments, with
institutions of high credit quality, and limits its exposure to any
one counterparty. The Group’s revenue is derived from various
industries and could be directly affected by the overall conditions
of those industries. The large number of customers, their
geographical distribution, and the reasonably short collection
terms mitigates the credit risk associated with this. The Group
routinely monitors its exposure to credit losses and maintains
an allowance for anticipated losses.
Howard Evans
Finance Director, Misys plc
Page 39

Board of Directors
1 5
2 6
3 7
4 8
9
10
11
Page 40 Misys plc Annual Report 2006

1
Sir Dominic Cadbury 2,3,4
Chairman (66)
Sir Dominic Cadbury joined the Board as
senior independent Director in May 2000 and
held that role until November 2005 when he
was appointed non-executive Chairman. He is
Chairman of the Remuneration Committee.
Sir Dominic’s career was spent at Cadbury
Schweppes, which he joined in 1964, being
appointed to the Board in 1975, serving as
Group Chief Executive from 1983 to 1993,
then as Chairman until May 2000. In October
2005 he joined the Board of New Star Asset
Management Group plc as Deputy Chairman
and as senior independent non-executive
Director. He retired as Chairman of the
Wellcome Trust on 30 April 2006. Sir Dominic
is Chancellor of Birmingham University.
2
Kevin Lomax 4,5
Chief Executive (57)
A founding investor in Misys in 1979 and a
Board member since July of that year, Kevin
Lomax was non-executive Chairman from 1980
to 1985. He was executive Chairman from 1985
to November 2005 when he became Chief
Executive. He has extensive experience in the
industrial sector, including previous executive
positions with Hansons and STC. He is also a
non-executive Director of Marks and Spencer
Group plc, since 2000, and will retire from that
position on 31 August 2006.
3
Tom Skelton 4
CEO, Misys Healthcare Systems (45)
Appointed to the Board in July 2002. Tom Skelton
has been Chief Executive Officer of Misys
Healthcare Systems since 2000, prior to which
he held a number of senior positions within the
Company. Tom has extensive experience in the
US healthcare market gained in a career
spanning over 20 years.
4
Jasper McMahon 4,5
Corporate Development Director (47)
Appointed to the Board in July 2002. Jasper
McMahon became Director of Business
Development in 2001 and was appointed
Corporate Development Director at the end
of 2003. Jasper was previously Chief Executive
of the Company’s Internet Services Division,
having joined Misys in 1996 to develop its
internet-based financial services business.
Jasper joined Misys from McKinsey & Co,
prior to which he was in investment banking.
5 9
John Ormerod 1,2,3,4,5
Senior Independent Director (57)
Appointed a non-executive Director in October
2005 and senior independent Director in
November 2005. John Ormerod is Chairman
of the Audit Committee. He was Practice Senior
Partner London at Deloitte until 2004, where
he was a Member of the UK Board and the UK
Executive Committee. Prior to Deloitte, John had
a 30 year career with Andersen UK, culminating
as Regional Managing Partner UK & Ireland.
John will retire from the Board of Transport for
London in August 2006. He is a non-executive
Director of Gemalto NV. He serves as a co-opted
member on the Audit Committee of HBOS plc.
He is also a trustee of the Roundhouse and a
member of the UK Regional Advisory Board of
the London Business School.
6
Tony Alexander 1,2,3,4
Non-executive Director (68)
Appointed a non-executive Director in May 1996.
Tony Alexander served as Chairman of the Audit
Committee from 1997 until October 2004. Tony
spent most of his career at Hanson plc, where
he was Chief Operating Officer, UK from 1986
to 1996. He is Joint Vice-Chairman of Imperial
Tobacco Group, and a Director of Platinum
Investment Trust.
7
Al-Noor Ramji 2,3,4
Non-executive Director (52)
Appointed a non-executive Director in February
2005. Al-Noor Ramji is Chief Information Officer
of BT Group plc, as well as Chief Executive
Officer of BT Exact, BT’s research, technology
and IT operations business. Prior to joining
BT in 2004, he was Executive Vice President,
CIO and Chief e-Commerce Officer at Qwest
Communications. From 1996 to 2001 Al-Noor
was Global CIO at Dresdner Kleinwort Benson,
prior to which he held a number of senior IT
and business positions in the investment
banking sector.
8
John King 1,2,3,4
Non-executive Director (67)
Appointed a non-executive Director in November
2005. John King has over 30 years’ experience
of the US healthcare industry, most recently as
President and CEO of Legacy Health System
until 1999. Prior to Legacy, John was President
and CEO of Evangelical Health Systems (now
Advocate Health Systems). He is a member
of the American Hospital Association and a
Fellow in the American College of Healthcare
Executives. John serves on the boards of the
Center for Healthcare Governance, Health
Dialog and Health East.
Howard Evans 4,5
Finance Director (55)
Appointed to the Board in February 1998.
Howard Evans joined Misys as Finance Director
in 1998. Howard was previously Finance Director
of Courtaulds, prior to which he was a partner
in chartered accountants Price Waterhouse.
10
Dr Jürgen Zech 1,2,3,4
Non-executive Director (67)
Appointed a non-executive Director in October
2002. Dr Jürgen Zech has held senior roles
within the financial services industry in the
United Kingdom, the United States and Germany
throughout his career and has extensive
experience of the global insurance industry. He
is Chairman of denkwerk GmbH and a Director
of Partner Re, Bermuda and of Seeburger AG.
Dr Zech served as a non-executive Director of
Barclays Group plc until May 2005.
11
George ‘Chuck’ Farr 1,2,3,4
Non-executive Director (65)
Appointed a non-executive Director in July 1998.
Chuck Farr is Chairman of the Nomination
Committee. He has broad industry experience.
Chuck was Vice Chairman of American Express
until 1998, prior to which he spent 27 years with
McKinsey serving as a Director and member of
the Board from 1978 to 1995. His earlier career
included a number of positions within Procter &
Gamble. Chuck is a member of the Board of the
Swiss Re-insurance Company.
Notes:
1 Member of the Audit Committee
2 Member of the Nomination Committee
3 Member of the Remuneration Committee
4 Member of the General Purposes Committee
5 Member of the Treasury Committee
Ages are as at 27 July 2006
Page 41

Directors’ report
The purpose of the Annual Report is to provide information to the
members of the Company. The Annual Report contains certain
forward-looking 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
from those anticipated. Nothing in this Annual Report should be
construed as a profit forecast.
The Directors of Misys plc submit their report and the audited
financial statements for the year ended 31 May 2006.
Principal activities
The Group’s principal activities are the development and licensing of
a variety of software products and solutions to customers primarily
in the international banking and healthcare industries. A wholly owned
subsidiary of the Company, Sesame, is one of the largest providers of
support services to financial advisers in the United Kingdom.
A review of the activities of the Group is provided in the Chairman’s
statement, the Chief Executive’s report and the review of the
businesses on pages 10 to 27 and the Financial review on pages 32
to 39 of this Annual Report.
Acquisitions and disposals during the period are disclosed in note 17
on page 76.
Business review
In accordance with s234ZZB of the Companies Act 1985, a review
of the development and performance of the business of the Group,
including the financial performance during the year, key performance
indicators and a description of the principal risks and uncertainties
facing the Group, are set out in the Financial review section of this
Annual Report on pages 32 to 39, which is incorporated in this report
by reference.
Financial instruments
Information on financial instruments is disclosed in notes 24 and 25
on pages 81 to 83.
Dividends
The Directors recommend a final dividend of 4.49p per ordinary
share. This, together with the interim dividend of 2.69p per share
paid on 7 April 2006, makes a total dividend of 7.18p per share for
the year (2005: 6.84p).
The proposed final dividend, if approved at the Annual General
Meeting on 4 October 2006 (‘AGM’), will be paid on 9 October 2006 to
shareholders appearing on the register at the close of business on
4 August 2006.
Directors
Details of the Directors of the Company at the end of the financial
year are given on page 41. The following new non-executive Directors
were appointed during the year: John Ormerod on 1 October 2005
and John King on 2 November 2005. Both Robert Ingram and Ian
Dyson retired from their roles as non-executive Directors at the close
of the 2005 AGM on 13 September 2005 and Ivan Martin retired as an
executive Director on 31 December 2005.
In accordance with the Articles of Association, Sir Dominic Cadbury,
George Farr and Kevin Lomax will retire from the Board and, upon the
recommendation of the Nomination Committee, all offer themselves
for re-election at the AGM. Tony Alexander will be retiring from
Page 42 Misys plc Annual Report 2006
the Board at the close of the AGM. As it is the first AGM since their
appointments, John Ormerod and John King will retire and offer
themselves for election. Sir Dominic Cadbury and Kevin Lomax, if
re-elected, and John Ormerod and John King, if elected, will serve
the customary three-year term. For reasons set out in the Corporate
governance report at page 44, George Farr will be subject to annual
re-election and, if re-elected, will be appointed for one year.
Biographical details of all Directors, including those being proposed
for election and re-election, are given on page 41.
Kevin Lomax has a service contract requiring one year’s notice
of termination. As non-executive Directors, Sir Dominic Cadbury,
George Farr, John King and John Ormerod each have a letter of
appointment rather than a service contract.
Details of executive Directors’ service agreements, non-executive
Directors’ letters of appointment, emoluments and share interests
can be found in the Directors’ remuneration report on pages 48 to 56.
The Company has granted indemnities to its Directors in their
capacity as Directors of the Company and in their capacity as
directors of the subsidiaries of the Company. The Company has
also granted indemnities to some of the directors of its subsidiaries
and such indemnities remain in force pursuant to the transitional
provision of the Companies (Audit, Investigations and Community
Enterprise) Act 2004 (Commencement) and Companies Act 1989
(Commencement No 18) Order 2004. For some years the Company
has purchased insurance to cover its Directors and officers against
their costs in defending themselves in civil legal proceedings taken
against them in that capacity and in respect of damages resulting
from the unsuccessful defence of any proceedings. Neither the
insurance nor the indemnity provide cover where the Director has
acted fraudulently or deceitfully.
With the exception of service contracts and the indemnities referred
to above, during the year under review and up to the date of this
report, no Director has had any interest in any material contract with
the Company.
Research and development
In the markets in which the Group operates, effective R&D is vital
to maintaining competitive advantage and securing future income
streams. The extent of the Group’s commitment to R&D is detailed
in both the Chairman’s statement on page 10 and the Chief
Executive’s report on pages 12 to 15. Effective use of products
generated through R&D is also vital. The Group has devoted
considerable additional effort to plan and manage its products
through their life cycles.
People and corporate responsibility
Information on employee engagement, equal opportunities (including
policies relating to disabled persons), training and ethical and
environmental matters can be found in the section on People and
corporate responsibility on pages 28 to 31.
Charitable donations
The Group’s commitment to community involvement and charitable
donations is described in the People and corporate responsibility
section on page 31. In line with its policy, the Group made no political
donations in the year under review (2005: nil).

Creditor payment policy
It is the Company’s policy to agree terms and conditions for its
business transactions with its suppliers. The Company seeks
to abide by the payment terms agreed with suppliers whenever
it is satisfied that the supplier has abided by its contractual
obligations. The trade creditors of the Group at 31 May 2006
represent 34 days (2005: 39 days) as a proportion of the total
amount invoiced by suppliers during the year.
Share capital
The authorised and issued share capital of the Company, together
with details of the movements in the Company’s issued share
capital during the year, are shown in note 33 on page 88.
During the year the Directors continued the share buyback
programme started in October 2002 as they believed that, at the
prevailing share price, it was in the best interests of shareholders
and an appropriate use of cash resources.
At the 2005 AGM shareholders authorised the Directors to make
market purchases of the Company’s ordinary shares up to a
maximum nominal value of £0.5m, which represented 10% of issued
share capital, and to either cancel the shares or hold the shares
as Treasury shares which may then be cancelled, sold for cash or
transferred for the purposes of the Company’s employees’ share
plans, depending on the best interests of the Company’s
shareholders at the time.
Pursuant to this authority, and the authority obtained at the 2004
AGM which it superseded, the Company has in the financial year
ended 31 May 2006 purchased, at an aggregate consideration of
£24,756,719 before expenses, an additional 11,740,000 ordinary
shares of 1p each, all of which were put into Treasury. During the
year 2,408,564 shares were transferred out of Treasury to meet
the Company’s obligations under its employees’ share plans and
8,000,000 shares were cancelled out of Treasury.
Under the 2005 AGM authority which expires at the conclusion of
the 2006 AGM, the Company may purchase a further 39,094,580 of
its own shares. It is proposed that the authority be renewed at the
forthcoming AGM.
At close of business on 24 July 2006, Misys plc had 551,727,036
ordinary shares in issue, of which 52,215,010 are held in Treasury.
Also included in the special business of the 2006 AGM are proposals
to renew the Directors’ authority to allot shares for cash up to
prescribed limits. Further details are given in the Notice of AGM.
Substantial shareholdings
As at 26 July 2006, the following substantial shareholdings were
recorded in the register maintained by the Company in accordance
with the Companies Act 1985:
UBS AG acting through its business group and
various legal entities 14.06%
HBOS plc through various legal entities 4.38%
Legal & General Group plc and/or its subsidiaries 3.85%
Deutsche Bank AG and its subsidiary companies 3.31%
Barclays Bank through various legal entities 3.02%
Annual General Meeting
The 2006 AGM will take place at 11.30 am on Wednesday,
4 October 2006 at The Lincoln Centre, 18 Lincoln’s Inn Fields,
London WC2A 3ED.
A separate circular sent to shareholders with this Report contains
the Notice of AGM and explains the business to be considered at the
meeting. A copy of the Notice will be published on the Company’s
website (www.misys.com).
Going concern
After making due enquiry, embracing the normal forecasting
process, the Directors consider that the Group has adequate
resources and committed borrowing facilities to continue in
operational existence for the foreseeable future. Consequently,
they have continued to adopt the going concern basis in preparing
the financial statements.
Auditors
Each of the Company’s Directors in office as at the date of this
report confirms that so far as he is aware, there is no relevant audit
information, that is, information needed by the Company’s auditors
in connection with preparing their report, of which the Company’s
auditors are unaware, and that he has taken all steps which he ought
to have taken as a Director in order to make himself aware of any
relevant audit information and to establish that the auditors are
aware of that information.
PricewaterhouseCoopers LLP have expressed their willingness to
continue in office as auditors and a resolution to reappoint them and
authorise the Directors to fix their remuneration will be proposed at
the forthcoming AGM.
By Order of the Board
Dan Fitz
General Counsel and Company Secretary
27 July 2006
Page 43

Corporate governance report
The Board is committed to the highest standards of corporate
governance. It is accountable to the Company’s shareholders for
good governance in its management of the affairs of the Group.
The Board confirms that the Company was fully compliant with all
the provisions of the 2003 Combined Code on Corporate Governance
(‘the Code’) throughout the year ended 31 May 2006, except as
indicated and explained below (alphanumeric references are to
provisions of the Code):
• A.2.1 and A.1.3: the roles of Chairman and Chief Executive were
combined in the same person for the period ending 3 November
2005 at which point the roles were separated and the Company
came into compliance.
• B.2.1: following his appointment as Chairman and on the basis
that he was ‘independent’ under the Code at that time, the Board
determined that Sir Dominic Cadbury should remain a member of,
and continue to chair, the Remuneration Committee. This decision
was taken in light of his experience and expertise in fulfilling that
role and of the proposal to amend the Combined Code to permit
the Chairman to sit on the Remuneration Committee. He does not
participate in any of the Committee’s deliberations relating to his
remuneration either as Chairman or otherwise. Sir Dominic’s
position as Chairman of the Remuneration Committee will be
kept under active review.
• D.2.3: All of the Directors apart from Robert Ingram attended
the 2005 Annual General Meeting.
The Board
The Chairman
During the year the Board decided to separate the roles of Chairman
and Chief Executive. Accordingly, Sir Dominic Cadbury was appointed
Chairman in November 2005. Kevin Lomax was confirmed as Chief
Executive. Sir Dominic’s appointment was initially on an interim
basis. In March 2006, this was made permanent as the culmination
of a process summarised under ‘Board Committees – Nomination
Committee’ below.
Composition and independence
The Board currently comprises the non-executive Chairman, four
executive Directors and six independent non-executive Directors.
Their biographies appear on page 41. The Board collectively has
a wide range of relevant business, financial and international
experience, which is vital to the successful direction of a global
company. John Ormerod was appointed a non-executive Director on
1 October 2005. John’s background is in corporate governance and
audit, with wide experience in the professional services and financial
spheres gained from work with a range of major international
organisations. Since his appointment he has been Chairman of the
Audit Committee and he succeeded Sir Dominic Cadbury as senior
independent Director in November 2005. John King was appointed a
non-executive Director on 2 November 2005. He brings to the Board
thirty years of experience of the US healthcare industry and holds
senior appointments in a number of healthcare bodies.
The non-executive Directors fulfil a vital role in corporate
accountability by bringing their independent judgement to bear on
issues brought before the Board and Board committees. They bring
considerable knowledge and experience from other areas of business
and public life, together with an international perspective, and their
views carry significant weight in the Board’s decisions. They also
meet as a group without executive Directors being present.
Having conducted a review, the Board considers all the non-executive
Directors to be ‘independent’ in accordance with provision A.3.1 of
the Code. In doing so, the Board weighed a number of factors
including whether each non-executive Director is objective, provides
a challenge to management, is prepared to challenge the views of
others, demonstrates a good understanding of the business, has the
best interests of the Company in mind and has no relationships or
Page 44 Misys plc Annual Report 2006
circumstances that are likely to affect his judgement. The Board
specifically considered the independence of Tony Alexander as he
has served on the Board for ten years, having been appointed a
non-executive Director on 1 May 1996. The Board considers that he
continues to demonstrate all of the aforementioned characteristics.
There is no evidence that length of tenure is having an adverse
impact on his independence. Therefore the Board regards him as
independent. Tony will be retiring from the Board at the close of the
2006 AGM. Under the Articles of Association, George Farr will offer
himself for re-election at the 2006 AGM. As he will have served on
the Board for nine years by the end of July 2007, he will seek reelection
for one year only.
Sir Dominic Cadbury was considered to be independent on his
appointment as Chairman. Under the Combined Code, after
appointment the test of independence is no longer appropriate
in relation to a chairman.
As disclosed in the Directors’ report, HBOS plc has at the date of this
report a notifiable shareholding in the Company of 4.38% as defined
under s.198 Companies Act 1985. John Ormerod is not a director of
HBOS plc but serves as a co-opted member on its Audit Committee.
This connection has been disclosed to the Board which considers
that this does not affect his independence.
The non-executive Directors met as a group in May 2006 for two
primary reasons. The first was to discuss, with the Chairman
present, the results of the performance evaluation of the Chief
Executive. The second was to discuss, in the absence of the
Chairman and led by the senior independent Director, the
performance of the Chairman and other issues.
As part of its evaluation of the performance of the Board, the Board
has reviewed the availability of the non-executive Directors, including
the Chairman, and considers that each candidate for re-election as a
Director at the 2006 AGM is able to devote the necessary amount of
time to the business of the Company.
No executive Director has more than one non-executive directorship
with a FTSE 100 company. The Chief Executive will retire as a nonexecutive
Director of Marks and Spencer Group plc on 31 August 2006.
Responsibilities
The Board is responsible to the shareholders for the conduct of
the Company’s business and determines Group strategy, reviews
trading performance, ensures adequate funding and examines major
investments. It has a formal schedule of matters reserved for its
decision including approval of the accounts and dividends, significant
strategic decisions, fixed forecast, transactions, settlement of litigation
over a certain threshold, fundamental changes to the internal control
system, the adoption of new employee incentivisation plans, and the
delegation of authority to committees and individual Directors. The full
schedule is available on the Company’s website.
In light of the integrity of the individual Directors and of the current
balance of four executive Directors, the non-executive Chairman and
six independent non-executive Directors, the Board is of the view that
no individual or small group of individuals can dominate the Board’s
decision taking. Following the retirement of Ian Dyson and Robert
Ingram at the 2005 AGM, the Board recruited two new non-executive
Directors to ensure it maintained a majority of independent nonexecutive
Directors for the foreseeable future. In November 2005
John Ormerod succeeded Sir Dominic Cadbury in the role of senior
independent Director, and as such he provides an alternative
to the Chairman as a Board-level contact for shareholders.
During the year, as reported above, the combined role of Chairman
and Chief Executive was separated. The Chairman is responsible for
running the Board and carrying out the duties enumerated under the
Code, including ensuring effective communications with shareholders.

Kevin Lomax continues in the role of Chief Executive and, following the
departure of Ivan Martin, has taken over responsibility for the running of
Misys Banking Systems. The day-to-day operation of Misys Healthcare
Systems is under the control of its CEO, Tom Skelton, who sits on the
Misys plc Board and reports directly to the Chief Executive. The CEO of
Sesame also reports to the Chief Executive. Operational responsibility
for the strategic development of the Group is shared among the Chief
Executive, the Corporate Development Director, and the divisional CEOs
with input from senior managers around the Group.
A formal procedure exists to allow the Directors, in appropriate
circumstances, to take independent professional advice in respect
of their duties, with any fees incurred being paid by the Company.
In addition, all Directors have access to the Company Secretary,
who also acts as General Counsel, for advice.
Board processes
One of the responsibilities of the Chairman is to ensure that Board
members receive sufficient and timely information regarding
corporate and business issues to enable them to discharge their
duties and to enable them to make further enquiries where
necessary. The Board regularly reviews the quality and quantity of
this information and recommends adjustments as necessary or
advisable. From time to time, the Board also receives detailed
presentations from non-Board members on the operating divisions,
product strategy, new opportunities for the Group and other matters
of significance. The Board meets at least eight times a year aiming
to hold two meetings each year in the United States, one of which is
combined with a two day conference involving an in-depth review of
Group strategy as well as meetings with senior management.
The Board also reviews periodically whether the number of
regularly scheduled meetings is appropriate for the anticipated
needs of the business.
Training
The Chairman is also charged with ensuring that all new Board
members are equipped to fulfil their duties and responsibilities.
As part of the early familiarisation programme, new non-executive
Directors are encouraged to meet the executive Directors individually
and engage in an induction programme of visits to different
businesses within the Group where they have the opportunity to
meet the senior management. All Directors receive training about
their duties, significant changes in the law and the sectors in which
the Company operates.
Board evaluation
During the year the Directors conducted, by way of a detailed
questionnaire and discussion, an evaluation of the performance
of the Board collectively, of its three principal Committees (Audit,
Nomination and Remuneration), of the Chairman and of the Chief
Executive. In light of the number of recent arrivals and departures
on the Board, the Board decided to defer until the next review, the
formal evaluation by questionnaire of individual Directors. However,
the Chairman did make himself available to discuss any issues
regarding individual performance or any areas of concern. The
Company Secretary analysed the questionnaires and provided initial
feedback to the Chairman and the senior independent Director.
The Board received and reviewed the overall average scores. These
results formed one of the bases for further discussion by the Board
collectively, and by the non-executive Directors in respect of the
evaluation of the Committees, the performance of the Chairman
and the Chief Executive. The review identified a few areas for
improvement, including enhancing the induction of new Directors
and increased exposure to executives below Board level.
Board committees
Responsibilities at Board level are divided among five standing Board
Committees, which operate within formally defined written terms
of reference that are available on request and from the Company’s
website. These oversight roles are complemented by an active
internal audit function. Further details on internal control are
provided in the section below. Details of membership of the Board
Committees is set out below.
In addition to the five standing Board Committees, as announced on
9 June 2006, the Board has received a request from certain members
of the senior management team to explore the possibility of making
an offer for the Company. An Independent Committee of the Board,
comprising all the non-executive Directors and chaired by the
Chairman, has been formed to consider the request. The quorum is
any three members and the Company Secretary acts as secretary.
JPMorgan Cazenove has been appointed to advise the Independent
Committee.
The Audit Committee was chaired by Ian Dyson until his resignation
from the Board in September 2005. He was succeeded by John
Ormerod who has recent and relevant financial experience. Its other
members are Tony Alexander, George Farr, John King and Dr Jürgen
Zech. Sir Dominic Cadbury served on the Committee until his
appointment as Chairman in November 2005. The Committee met
four times during 2005/06 (2004/05: three times), with the Finance
Director, Group Financial Controller, Head of Internal Audit and the
external auditors, PricewaterhouseCoopers LLP (‘PwC’) invited to
attend as appropriate. During the year the Committee met the
external auditors twice, and the Head of Internal Audit once. The
Head of Internal Audit has direct access to the Committee Chairman
and met with him on a number of occasions during the year.
The Committee’s duties include the review and approval, where
required, of the draft results prior to publication, the effectiveness
and reliability of the Group’s system of internal control, the internal
audit function, any changes to financial reporting requirements and
matters arising from the annual Group audit. The Committee is also
responsible for reviewing the Company’s policy on whistleblowing and
this is scheduled for October 2006.
The Committee recognises that the independence of the Group’s
auditors is of paramount importance to shareholders and has
established a policy for monitoring and approving the level of non-audit
fees (e.g. accounting, tax or other financial consultancy related work)
paid to the Group auditors in order to identify and minimise any
potential conflicts of interest. The policy prohibits using PwC in projects
which represent a real threat to the independence of the audit team
such as where the external auditor would be in a position where it is
auditing its own work (e.g. financial systems implementations) or
where there is evident self-interest, for example where an interest in
the outcome of their work might conflict with the auditor’s objectivity.
If PwC is to be considered for the provision of non-audit services
(such as tax advice and compliance, due diligence work in relation to
acquisitions) the scope and fees must be approved in advance by the
Group Finance Director and the Committee Secretary and, in the case
of fees in excess of £50,000 for a single project, by the Committee
Chairman. This may involve a competitive tender process unless there
are compelling commercial or timescale reasons to use PwC. A report
on non-audit services is reviewed and approved by the Committee at
each of its January and July meetings. The non-audit fees paid to PwC
amounted to £1.9m or 56% of total fees paid. The Committee believes
that the quality of the audit process was not adversely affected by PwC’s
non-audit work for the Group.
During the year the Committee’s work has included:
• reviewing the Group’s draft 2005 financial statements and 2006
interim results, including the transition to IFRS, and related
announcements prior to Board approval, together with PwC’s
reports thereon;
• reviewing the appropriateness of the Group’s accounting policies;
• reviewing the risks associated with the Group’s businesses;
• reviewing periodic reports from the internal audit function;
• reviewing and approving PwC’s terms of engagement, fees and
non-audit fees; and
• reviewing PwC’s strategy for the audit of the 2006 financial
statements.
Page 45

Corporate governance report
continued
The Nomination Committee, chaired by George Farr, consists of all the non-executive Directors including the Chairman, and meets as
necessary, liaising closely with the Chief Executive. It met six times during 2005/06 (three times during 2004/05) and participants attended
either in person or by telephone. It assesses the suitability of persons for appointment as Directors and, when appropriate, nominates
new candidates for the approval of the Board. The Committee plays an important role in succession planning for the Board and key senior
executives and performs regular assessments of the requirements of the Board as a whole. Under its terms of reference, the Committee
oversees the search and selection process for new Directors and aims to do so in compliance with the recommendations under the Code.
As such, the Committee seeks to make appointments on merit and against objective criteria. The Committee also seeks to satisfy itself that
there are in place plans for orderly succession of appointments to the Board and to senior management positions.
During the year the Committee oversaw the recruitment of two new non-executive Directors, John King and John Ormerod, in both cases
using a search firm after having drawn up the criteria to be satisfied by each of the successful candidates. The Committee also launched
a search for a non-executive Chairman, again using a recruitment firm to identify suitable candidates. As the search progressed, it became
evident to the recruitment firm and to members of the Committee that Sir Dominic Cadbury had the credentials to be a strong contender
to fill the role. On being approached about being considered for the post of permanent Chairman, Sir Dominic agreed to add his name to
the list of candidates and thereafter he did not participate in any deliberations regarding the appointment. The Committee considered the
candidates for the role and decided to recommend to the Board that Sir Dominic Cadbury be appointed Chairman on a permanent basis.
The Board accepted this recommendation and the appointment was made permanent with effect from 22 March 2006.
The Remuneration Committee, chaired by Sir Dominic Cadbury, consists of all the non-executive Directors and meets when necessary,
but at least three times a year. It met eight times during the year (six times during 2004/05) and participants attended either in person or
by telephone. The Chief Executive and other executive Directors are invited to attend the Committee’s meetings as the members consider
appropriate. Details of the Committee’s main functions, and its remuneration policies for the Company’s Directors and senior executives,
are provided in the Directors’ remuneration report on pages 48 to 56.
The Treasury Committee was established by the Board to review the function and operation of the Group’s centralised treasury, whose
primary role is to manage the foreign exchange, interest rate, liquidity and credit risks arising from the operation of the business. The
Committee is governed by written terms of reference and meets as necessary, reporting its decisions to the next meeting of the Board.
Its membership comprises the Chief Executive, the Finance Director, the Corporate Development Director, the Group Treasurer and John
Ormerod as the non-executive Director member (succeeding Ian Dyson). The minimum attendance required is two Directors, one of whom
must be the Chief Executive or the Finance Director.
The General Purposes Committee transacts routine business of the Board, principally in relation to the Company’s employee share plans.
The Committee operates within clearly defined written terms of reference and financial limits. It meets when necessary and reports to the
Board on its decisions on a regular basis. All the Directors, together with the Company Secretary, are members of the Committee, with a
minimum of two Directors required to attend.
The attendance record of each Director during the year is set out below.
Audit Nomination Remuneration
Board Committee Committee Committee
Number of meetings held during the year 8 4 6 8
A G L Alexander 8 4 6 8
Sir Dominic Cadbury (i), (ii) 8 2(3) 4(4) 8
G L Farr 7 4 6 8
J G King (appointed 2 November 2005) (i) 5(5) 1(1) 4(4) 4(4)
J Ormerod (appointed 1 October 2005) (i) 5(5) 2(2) 5(5) 5(5)
A Ramji 6 – 4 6
Dr J Zech 8 4 6 8
I Dyson (retired 13 September 2005) (i) 3(3) 1(1) 1(1) 3(3)
R Ingram (retired 13 September 2005) (i) 0(3) – 0(3) 0(1)
J K Lomax 8 – – –
H Evans 8 – – –
I Martin (retired 31 December 2005) (i) 4(5) – – –
J P McMahon 8 – – –
T K Skelton 8 – – –
(i) Figures in brackets indicate the maximum possible number of meetings he could have attended where different from the maximum held during the year.
(ii) Sir Dominic Cadbury stepped down from the Audit Committee on being appointed Chairman of the Board.
The General Purposes Committee and Treasury Committee hold a number of ad hoc meetings attended by the Directors and accordingly are
not included in the above table. All the Directors attended the 2005 AGM except Robert Ingram who had a previous commitment.
Page 46 Misys plc Annual Report 2006

Relations with shareholders
The Company acknowledges the importance of maintaining a
purposeful relationship with its investors. The Chairman and all
executive Directors hold briefing meetings with financial analysts
and institutional shareholders, including presentations following
the interim and preliminary results announcements, and their views
are communicated to the Board.
In addition, business and market briefings are held periodically
to ensure that the analysts and investing community receive a
broader view of the Group’s operations and the issues faced by the
business. On 24 March 2006 a seminar was held in London which
provided an opportunity for analysts to gain a deeper understanding
of Misys Healthcare Systems.
The executive Directors regularly conduct one-on-one and/or group
meetings with institutional shareholders. The Chairman, the senior
independent Director, and the non-executive Directors, are available
to meet with shareholders on request. During the year, a number
of meetings with major shareholders were held to discuss the
proposed separation of the combined Chairman/Chief Executive role
and other major issues.
The Board, including the non-executive Directors, has access to the
services of Makinson Cowell, which provides independent advice
concerning the relationship between the Company and its institutional
investors, and produces regular written reports to the Board.
The principal communications with private investors are through the
Company’s website (www.misys.com), the annual report and financial
statements, the interim statement and the AGM. All the Directors
aim to attend the AGM, which provides shareholders with the
opportunity to question the Chairman and the Board. The Company
responds as necessary to enquiries from individual shareholders on
a wide range of issues.
The financial and other information, including presentations to
analysts and investors in audio and text formats, are made available
on the Company’s website. Further details are contained in the
Investor information section on page 101.
Auditors’ independence
The Company has reviewed its relationships with its auditors,
PricewaterhouseCoopers LLP, and concluded that there are
sufficient controls and processes in place to ensure the required
level of independence.
Internal control
In line with best practice identified in the Turnbull guidance, the
following section summarises the Group’s system of internal control
which comprises a number of distinct individual processes and
procedures that, when taken together, provide a reasonable, but
not absolute, assurance against material mis-statement or loss.
The Directors are aware of the revised Turnbull guidance issued in
October 2005 that will affect compliance and reporting on internal
controls in the financial year ending 31 May 2007.
Risk management
A comprehensive risk management process has been developed
that identifies, evaluates and manages the key business, operational,
financial and compliance risks that are considered to be important both
from an overall Group and individual business perspective. The process
involves each division regularly reviewing the most important risks to
which the business is exposed and the control processes in place that
manage and/or mitigate the potential exposure to those risks.
The business risks and controls are then evaluated by the senior
management team who determine which risks, in their opinion, are
the most significant to the Group overall. Senior executives are given
responsibility to deal with any items requiring action and to report
regularly on progress. The risks, identified controls and progress
against any actions are then reported to the Audit Committee on a
regular basis.
Financial monitoring and reporting
The Group operates a system of rolling forecasts, which are updated
quarterly, such that forecasts covering the next twelve months are
always available. On at least an annual basis these forecasts are
formally approved by the Board and become the ‘fixed’ forecast which
is used in subsequent months to monitor actual performance. The
actual results, including key performance indicators, are prepared
on a monthly basis and both the month and cumulative results are
compared with the relevant fixed and the then latest forecast as
well as the prior year. There is a high emphasis placed on cash
generation with cash flows and balances monitored at business,
divisional and Group level by a system of weekly and monthly cash
reports. Treasury and taxation policies are reviewed at least annually
and are themselves subject to regular reporting to the Board.
Authority levels
Defined levels of authority at Group, divisional and business unit
level are established for the approval of major development projects,
contractual and other commitments of a revenue nature and capital
expenditure. Authority levels are reviewed regularly and approved by
the Group or divisional Board as appropriate.
Investment appraisal
Potential capital investment or acquisition opportunities are
reviewed rigorously against the Group’s standards for investment
return, growth potential and normal terms and conditions before
contractual commitment.
System of operating unit control procedures
Business unit performance and internal control are monitored by
regular divisional Board and management meetings, which are
attended by Misys executive and divisional Directors. Financial
controls and procedures are detailed in a Group Finance Manual,
which is circulated to all business units, regularly updated and
published on the Group’s intranet. Written confirmation of compliance
with internal financial control policies is obtained from the finance
directors and general managers of the operating units. In addition,
compliance with the Group’s policies and procedures is monitored by
means of regular visits to operating units by the Group’s financial
management including the Group Internal Audit function.
Internal audit
The internal audit function, through a structured review process,
assesses the key financial controls and levels of compliance with
the Group’s policies and procedures. The central Group functions,
including Group Finance, Group Tax and Group Treasury, are also
reviewed as part of internal audit’s work plan. During the financial
year the work of the internal audit function has been supplemented
by reviews carried out by two of the ‘Big Four’ auditing firms (other
than PwC), which have provided access to skills and resources for
specialist functions, such as treasury, as well as the opportunity for
external input to, and critique of, processes in more standard areas.
The Audit Committee reviews regularly the work plan and key
findings arising from the internal audit process.
The process and systems described above have been in place during
the financial year ended 31 May 2006 and up to the date of the
approval of the Annual Report and Accounts.
The Directors acknowledge that they have overall responsibility
for the Group’s system of internal control and for reviewing its
effectiveness and confirm that they have reviewed its effectiveness
during the year.
On behalf of the Board
Dan Fitz
General Counsel and Company Secretary
27 July 2006
Page 47

Directors’ remuneration report
This report from page 48 up to and including 51 is unaudited. The
disclosures on pages 52 to 56 have been audited.
This report has been prepared by the Remuneration Committee
(the ‘Committee’) and approved by the Board. It has been drawn up in
accordance with the 2003 Combined Code on Corporate Governance,
Schedule 7A to the Companies Act 1985 and the UK Listing Authority
Listing Rules.
This report will be put to shareholders for approval at the Annual
General Meeting on 4 October 2006.
The Committee
The members of the Committee during the year were:
• Sir Dominic Cadbury (Committee Chairman)
• Tony Alexander
• Ian Dyson (retired 13 September 2005)
• George Farr
• Robert Ingram (retired 13 September 2005)
• John King (appointed 2 November 2005)
• John Ormerod (appointed 1 October 2005)
• Al-Noor Ramji
• Dr Jürgen Zech
The Committee is comprised of the Chairman and the non-executive
Directors.
The Committee is responsible for determining the policy on
remuneration for the executive Directors and other senior executives.
It sets the individual remuneration of the executive Directors and
approves the grant to them of options and awards under the
Company’s discretionary share incentive plans. The Committee
also sets the broad policy for share incentive grants to less senior
executives. Going forward, these will normally be under the Share
Award Plan approved by shareholders at the 2004 AGM. Additionally,
the Committee is responsible for setting the fees of the Chairman.
The Committee has the flexibility to use different sources of external
advice as appropriate. During the year the Committee has consulted
New Bridge Street Consultants LLP and Frederic W Cook &
Company, Inc, remuneration consultants, for information on market
practice and advice on policy. Frederic W Cook provided advice on
US market practice. The Committee also consulted Pinsent Masons,
legal advisers. New Bridge Street Consultants and Frederick W Cook
provide no other type of advice or service to the Company. Pinsent
Masons, legal advisers, also advised the Company on share plans
and employment matters. In addition, the Committee has also had
access to advice from the Group HR Director, the Company Secretary
and the Chief Executive. None of these participated in discussions
relating to their own remuneration. The Committee Chairman did not
participate in discussions relating to the fees to be paid to him either
as a non-executive Director or as Chairman.
During the year, the Committee has met on eight occasions and
participants attended either in person or by telephone.
Page 48 Misys plc Annual Report 2006
Executive remuneration: guiding principles
The Committee meets regularly to determine how best to
implement the appropriate compensation strategies for
executive Directors and other senior executives, whilst at the
same time administering and applying the rules of the various
plans. In setting the current policy the Committee continues
to be guided by the following principles which aim to ensure
a strong link between performance and reward within an
appropriate cost framework:
• salaries should be targeted at median for the relevant
market;
• reinforcing a pay-for-performance culture, bonuses will carry
stretching, measurable performance targets. These may be
based on Group, divisional or, where appropriate in specific
circumstances, individual performance. The Company
conducts a rigorous annual review of its various businesses
and markets, resulting in challenging budget targets being
set. The Committee then establishes annual bonus
performance targets with reference to this budget target;
• a minimum of 50% of executive Directors’ net annual bonus
will normally be deferred, for up to two years, and satisfied
in shares, absent special circumstances;
• operating within a limit restricting dilution to 10% of issued
share capital over 10 years, awards over new shares of no
more than 2% of issued share capital may be made in any
year (barring special circumstances), ensuring phasing of
awards smoothly over 10 years;
• although the plans allow option grants of up to 400% of
salary, bearing in mind other elements of the compensation
package, the Committee believes that, in the current climate,
grants of market value options should be more in the region
of 100% of salary, with LTIP awards being limited to no more
than 100% of salary;
• options are only exercisable if stretching long-term earnings
per share (‘EPS’) growth targets are achieved. These are
reviewed annually prior to each grant by the Committee to
ensure they remain appropriately stretching. Stretching total
shareholder return (‘TSR’) conditions are attached to LTIP
awards, which reward long-term stock market out
performance. This approach ensures there is a balance in
long-term performance measures between growth in
profitability (EPS) and stock market out performance (TSR);
• we do not re-test targets attached to share incentives; the
Committee determines the extent to which targets have been
met after taking such independent external advice as it
considers appropriate and any option or award that fails the
relevant performance hurdle will lapse;
• the Committee applies a policy encouraging executive
Directors to build and maintain over time a shareholding in
the Company equivalent to at least 100% of basic salary. For
current executive Directors this is expected to be achieved
within three to five years of the policy’s introduction in 2004.
Sir Dominic Cadbury
Chairman, Remuneration Committee

Remuneration policy for executive Directors
Misys is one of the world’s largest independent applications
software product groups. The Committee aims to provide
remuneration packages that are appropriate to the needs of a
global software business.
The Committee has once again reviewed executive remuneration
policy and is satisfied that it continues to be appropriate. The key
points are:
• the packages must be competitive within the software industry
and in the markets in which Misys recruits;
• a significant proportion of total remuneration will be performancerelated
and therefore ‘at risk’;
• basic salaries and benefits will continue to be targeted at the
market median for executive Directors for the country in which
the executive Director is based;
• annual bonus will be targeted to the annual growth plans of the
relevant business and part will normally be deferred to aid
retention;
• ‘on target’ bonus will be payable for budgeted performance levels
agreed as part of the strict budget-setting process. Maximum
payment is only achievable for performance in excess of budget;
• long-term share incentive plans will be subject to challenging
sliding-scale targets designed to encourage higher levels of
performance. Performance will be measured over a three year
period with no re-testing;
• share and cash incentives will be designed to align the interests
of executive Directors with those of shareholders;
• performance criteria will be reviewed annually to reflect the
executive Director’s role and the current business expectations.
In implementing its policy, and following a review undertaken by New
Bridge Street Consultants and Frederic W Cook & Company, the
Committee made changes to Tom Skelton’s base salary and annual
bonus arrangements during 2005/06. These changes are designed
to ensure that Mr Skelton’s total remuneration package is in line
with that for the most senior executives in comparable healthcare
software businesses in the USA, where Mr Skelton is based. The
changes involved increasing Mr Skelton’s base salary from $511,680
to $612,000. This increase was backdated to 1 June 2005. The
maximum bonus potential for Mr Skelton for 2005/06 was increased
from 150% of base salary to 200% of base salary. The maximum
bonus potential for other executive Directors remains unchanged
at 150% of base salary.
Although Mr Skelton’s potential maximum bonus has been
increased, there is no increase in the actual amount of bonus that
may be paid to him immediately as cash (75% of salary maximum)
and any amounts of annual bonus earned above 150% of base salary
will be deferred under the Misys Senior Executive Bonus Plan
(deferral for a two year period, normally in shares).
Approximate expected value of future annual remuneration package
The intended relative proportions of fixed and variable remuneration
are set out below.
Kevin Lomax, Howard Evans, Jasper McMahon
Fixed Performance-related
Salary 40% Annual bonus 30% Long-term share
incentives 30%
Tom Skelton
Fixed Performance-related
Salary 36.5% Annual bonus 36.5% Long-term share
incentives 27%
For this purpose, provision for pensions and benefits in kind
have been ignored. The value placed on annual bonus is for
‘on-target’ bonus and on long-term incentives is an estimate
of the expected value.
Remuneration of Chairman
On Sir Dominic Cadbury’s appointment as Chairman on an interim
basis with effect from 3 November 2005 (later confirmed as
permanent with effect from 22 March 2006), the Committee sought
advice from New Bridge Street Consultants on the market rate
applicable and his annual fee was fixed at £160,000. He continues
to receive an additional annual fee of £10,000 for chairing the
Remuneration Committee.
Policy on non-executive Directors
Non-executive Directors have letters of appointment. Appointments
are for a three year term, which may be extended by mutual
agreement. Non-executive Directors are paid a basic annual fee
(£35,000) and additional fees for chairing Board committees
(Remuneration Committee and Audit Committee: each £10,000;
Nomination Committee: £5,000). There is also flexibility to pay
additional fees for special duties. Sir Dominic Cadbury received an
additional fee at the rate of £20,000 p.a. for his duties as senior
independent Director prior to his appointment as interim Chairman
on 3 November 2005. John Ormerod succeeded Sir Dominic Cadbury
as senior independent Director and the additional annual fee paid for
this role was reduced to £10,000 with effect from 1 December 2005 in
recognition of the fact that the duties of the role are reduced with a
non-executive Chairman in position.
Non-executive Directors are entitled to reimbursement of travel
and accommodation costs in connection with the performance of
their duties. They are not eligible for pensions or incentives, or for
compensation for early termination of their appointment period.
Components of remuneration packages
The main components of executive Directors’ remuneration are:
Base salary
Having taken independent advice and following the annual review
of base salaries in accordance with the remuneration policy, the
executive Directors’ annual base salaries with effect from 1 June
2006 are shown in the table below. As noted above, Tom Skelton’s
base salary was increased during the year.
From From
1 June 2006 1 June 2005
J K Lomax £479,980 £466,000
H Evans £342,784 £332,800
J P McMahon £307,434 £298,480
T K Skelton $630,360 $612,000
Base salary is the only element of the remuneration package which
is pensionable. Base salary increases below Board level were broadly
in line with inflation in the relevant markets.
Annual bonus
The Misys Senior Executive Bonus Plan was operated in 2005/06.
In respect of annual bonuses earned for 2005/06, the Committee
exercised its discretion to require deferral of at least 50% of the
bonus amount for two years, subject to continuing employment.
The Committee would normally direct that the deferred element be
satisfied in shares rather than cash. However, at the date of this
report the Company is in an offer period under the City Code on
Takeovers and Mergers and is subject to certain restrictions on
the award of shares. Accordingly the Committee may exercise its
discretion to direct that the deferred element be satisfied in cash
rather than shares.
Page 49

Directors’ remuneration report
continued
The plan will operate again in 2006/07. Maximum bonus potentials
for executive Directors are as described above. The bonus targets
for 2006/07 will relate to Group operating profit targets and, where
appropriate, divisional operating profit targets drawn from the
management accounts. As in previous years, the targets will be set
so that the performance level required to achieve maximum bonus
is stretching.
Discretionary share options
For 2006/07, the Committee has decided that the normal value of
options granted to executive Directors will not exceed 100% of basic
salary. This policy remains unchanged from 2005/06.
The Committee reviews each year whether the performance targets
continue to be appropriate. The targets to be applied to executive
Directors’ share options granted in financial year 2006/07 will be
based on a compound annual growth in adjusted earnings per share
over a fixed three year period on a tiered basis.
Tier of grant by reference Annual compound
to basic salary growth for tier to vest
Up to 50%
51% to 100% (pro-rata
RPI + 3%
on a straight-line basis) RPI + 3% to 6%
Options normally lapse upon cessation of employment. In
circumstances specified in the rules, leavers may retain their options
until the performance target is determined; exercise will normally be
permitted on a time apportioned basis within a specified period.
Long-term Share Incentive Plan
Executive Directors may be granted the right to acquire shares, free
of charge, if performance targets are met. The policy continues to be
that the normal grant level will not exceed 100% of basic salary.
Performance criteria are reviewed each year by the Committee to
ensure they remain appropriately stretching. Following this review
it is not proposed to change the targets for 2006/07 awards from
previous years. The performance criteria applied to long-term
incentive awards to executive Directors in financial year 2006/07 will
be based on Total Shareholder Return (‘TSR’) over a fixed three year
period. The Company’s TSR performance will be measured relative
to that of the top 30 FTSE Techmark companies, ranked by market
capitalisation. Awards will only vest if the Committee is satisfied
that the Company’s TSR over the performance period is a genuine
reflection of the Company’s underlying financial performance.
TSR performance ranking % of award receivable
Top quartile 100%
Between median and top quartile pro rata between 30%
and 100%
Median 30%
Below median zero
Performance graph
The graph below measures the Company’s TSR performance over a
five year period as required by the Companies Act. This is compared
against the TSR performance of the FTSE Techmark All-Share Index.
The Directors believe this is the most appropriate broad equity market
index against which TSR should be measured because it is made up
of companies in similar markets and geographic locations to Misys.
In view of the volatility of the sector, an additional graph is provided
to illustrate the Company’s relative longer term performance.
Page 50 Misys plc Annual Report 2006
TSR over the last five years (£)
120
100
80
60
40
20
0
This graph looks at the value, by the end of May 2006, of £100 invested in Misys over the
last five financial years compared with the value of £100 invested in the FTSE Techmark
All-Share Index. To produce a ‘fair value’, each point is an average of the return index
over a 30 day period around the year end.
Misys Return Index FTSE Techmark All-Share Index Misys Share Price
Source: Thomson Financial
TSR: 1996 onwards (£)
700
600
500
400
300
200
100
May 01 May 02 May 03 May 04 May 05 May 06
0
Jan 96 Jan 97 Jan 98 Jan 99 Jan 00 Jan 01 Jan 02 Jan 03 Jan 04 Jan 05 Jan 06
This graph shows the value, by the end of May 2006, of £100 invested in Misys compared
with the value of £100 invested in the FTSE Techmark All-Share Index since 1 January
1996 (the earliest date for which published data for the Techmark Index exists).
To produce a ‘fair value’, each point after the initial point is an average of the return
index over a 30 day period around the year end.
Misys FTSE Techmark All-Share Index
Source: Thomson Financial
Pensions
UK based executive Directors benefit from Company contributions
ranging from 20% to 40% of basic salary. Contributions are either
paid to the Company’s defined contribution pension plan or as an
allowance for use in their personal pension arrangements. Tom
Skelton receives a Company contribution of 20% of basic salary.
Additionally the Company continues to contribute to the existing
employee pension arrangements for Tom Skelton under the Group’s
retirement savings plan in the United States. As a consequence of
the changes to pensions legislation, Kevin Lomax has ceased to
participate in the Company’s defined contribution pension plan from
1 April 2006. From that date, Mr Lomax will receive an additional
payment that will replace the benefit of the contributions previously
made by the Company to the Company’s pension plan. To ensure that
the overall cost to the Company has not been increased, the
replacement payment made to Mr Lomax has been set at a level that
is lower than the previous pension contributions paid for Mr Lomax
(40% of base salary) to reflect the payment of employers’ National
Insurance Contributions by the Company.
Other benefits
Executive Directors are entitled to a car allowance. They benefit from
private health insurance and life insurance cover. They are also
eligible to participate in the savings related share option schemes
operated in the United Kingdom and overseas, on the same terms as
other employees.

Executive Directors’ service contracts
The contract for each of the executive Directors provides that either the Director or the Company may terminate the employment by giving
12 months’ written notice. There is no contractual obligation to pay any sum in lieu of notice or by way of compensation or damages. Any
severance payment would normally be based on net pay and benefits for any unexpired notice period, in the expectation that the Director
will make reasonable attempts to mitigate his loss.
Directors’ contracts
The contractual arrangements with each executive and non-executive Director who served in the year are summarised below.
Date of current
contract/letter
of appointment Notice period/unexpired term of appointment
J K Lomax 26 July 2002 12 months; re-elected for a further three year term at 2003 AGM
H Evans 17 July 2002 12 months; re-elected for a further three year term at 2004 AGM
J P McMahon 17 July 2002 12 months; re-elected for a further three year term at 2005 AGM
T K Skelton 18 July 2002 12 months; re-elected for a further three year term at 2005 AGM
Sir Dominic Cadbury 13 March 2000 (i) Appointed as Chairman for an initial three year term, expiring 22 March 2009
A G L Alexander 1 May 1996 (i) Re-elected for a further one year term at 2005 AGM
G L Farr 17 June 1998 (i) Re-elected for a further three year term at 2003 AGM
J G King 2 November 2005 1 month
J Ormerod 21 September 2005 1 month
A Ramji 25 January 2005 1 month; elected for a three year term at 2005 AGM
Dr J Zech 19 September 2002 (i) Re-elected for a further three year term at 2003 AGM
(i) Non-executive Directors appointed before 2005 do not have a formal notice period within their letters of appointment. From 2005, terms of appointment for non-executive
Directors include a notice period of one month.
Ivan Martin’s contract with the Company as CEO of Misys Banking Systems was terminated, with immediate effect, by mutual agreement on
31 December 2005.
In lieu of the payments that Mr Martin could have received during a period of 12 months’ notice, Mr Martin received the following amounts:
• a termination payment of £317,876;
• a compensatory payment of £45,000 for loss of his statutory rights;
• continued private health cover until 31 May 2006 and £9,043 in lieu of life assurance and private health insurance cover to 31 December 2006;
• £100,000 as compensation for loss of participation in annual bonus arrangements for the financial year 2006/07. This amount was paid on
30 June 2006 following fulfilment of agreed post-termination obligations;
• £150,000 additional pension contribution as compensation for loss of pension benefits; and
• £80,000 as compensation for loss of use of the rental accommodation previously provided in connection with his duties, including settlement
of liabilities related to use of this property in previous years.
The duty of Ivan Martin to mitigate his losses was considered by the Committee but the Committee (acting on legal advice) was unable to
materially reduce the agreed payments because of the commercial importance of ensuring the enforceability of Mr Martin’s contractual noncompete
covenants for a period of 12 months from his departure. Additionally, Mr Martin’s age and length of service affected Mr Martin’s
ability to mitigate.
The Remuneration Committee additionally applied the following policy in relation to Mr Martin’s share-based incentives:
• all share awards subject to performance conditions (Long-term Share Incentive Plan awards and Discretionary Share options) could be
retained by Mr Martin but these may only be exercised if the original performance conditions are fulfilled. The maximum number of shares
available has been reduced on a time pro-rata basis;
• retention-based awards made to Mr Martin before he joined the Board that have vested were allowed to be retained by him;
• Mr Martin’s outstanding awards under the Company’s share plans linked to deferral of annual bonus (the Misys Annual Award Plan until
2004 and the Misys Senior Executive Bonus Plan in 2005) that had not fulfilled the two year deferral period by 31 December 2005 will be
treated as vested from 30 July 2006.
Under the rules of the Annual Award Plan, Mr Martin may retain all unexercised awards that had vested at the date of his termination of
employment.
The Committee believes that the application of these treatments to Mr Martin’s share incentives was an appropriate use of the discretions
reserved to it under the Company’s share plans in the context of Mr Martin’s departure. In accordance with its stated policy, performance
conditions are applied to all performance linked awards over the original performance period, and time pro-rating is applied.
The Committee permitted Mr Martin to retain those share awards linked to deferral of annual bonus as these would have been expected to
vest if the Company had not restructured its executive director team.
Page 51

Directors’ remuneration report
continued
Directors’ emoluments
The amounts payable by the Company to each Director for financial year 2005/06 are set out below. These figures exclude share benefits,
which are shown separately. No Director has waived any emoluments.
Total 2006 Pension
Base (or from contributions
salary/ Benefits Car Other date of
fee Bonus in kind allowances payments appoint- Total 2006 2005
all figures in £ (i) (ii) (iii) (iv) (v) ment) 2005 (vi)
J K Lomax 466,000 307,560 7,926 21,600 – 803,086 1,004,984 177,188 174,400
H Evans
I Martin
332,800 219,648 7,648 14,500 – 574,596 735,319 133,120 128,000
(retired 31 December 2005) 204,334 – 27,419 8,458 701,919 942,130 615,685 50,475 83,200
J P McMahon 298,480 196,996 4,460 14,500 – 514,436 659,698 59,696 57,400
T K Skelton (vii) 344,596 489,324 446 6,757 6,627 847,750 575,963 73,873 61,623
Sir Dominic Cadbury 108,750 – – – – 108,750 65,000 – –
A G L Alexander
I Dyson
35,000 – – – – 35,000 38,333 – –
(retired 13 September 2005) 11,250 – – – – 11,250 41,666 – –
G L Farr (viii) R A Ingram
40,000 – – – – 40,000 40,000 – –
(retired 13 September 2005) (viii) J G King
8,750 – – – – 8,750 35,000 – –
(appointed 2 November 2005) (viii) J Ormerod
20,417 – – – – 20,417 – – –
(appointed 1 October 2005) 36,513 – – – – 36,513 – – –
A Ramji 35,000 – – – – 35,000 11,666 – –
Dr J Zech (viii) 35,000 – – – – 35,000 35,000 – –
Total 1,976,890 1,213,528 47,899 65,815 708,546 4,012,678 3,858,314 494,352 504,623
(i) I Dyson received an additional fee at the rate of £10,000 p.a. for the period 1 June 2005 to 13 September 2005 in respect of his chairmanship of the Audit Committee:
J Ormerod took over the chairmanship of the Audit Committee with effect from 1 October 2005 and received that additional fee for the period commencing on that date.
J Ormerod became senior independent Director from 3 November 2005 and his additional fee for this position has been paid at the rate of £10,000 p.a. for the period
1 December 2005 to 31 May 2006. For the period from 3 November 2005 to 1 December 2005, the fee was paid on the basis of £20,000 p.a.
(ii) Half of the bonus is payable in cash and half is deferred for two years to be satisfied in cash or shares. The performance conditions for the 2005/06 Annual Bonus Plan
for J K Lomax, H Evans and J P McMahon were based on a range of Group operating profit targets set at the beginning of the financial year. The targets required to be
achieved in 2005/06 were a range of 1.5% to 12.5% above the comparable performance achieved the prior year. The Annual Bonus Plan for T K Skelton was based on the
comparable operating profit for Healthcare.
(iii) Benefits in kind include all taxable benefits arising from employment by the Company, namely car fuel provision, private healthcare and use of home telephone and the
cost of providing additional lump sum life cover. I Martin’s total includes costs associated with the provision of rented accommodation in connection with his duties.
(iv) Car allowances are the only expense allowances.
(v) The figure for I Martin comprises those payments detailed on page 51. T Skelton received cash for unused holiday entitlement under arrangements that apply for all
US employees.
(vi) The total for J K Lomax represented contributions to the Company’s pension plan until 31 March 2006. From 1 April 2006, Mr Lomax began receiving an allowance that
replaces contributions to the Company’s pension plan. This allowance will be reduced to reflect the cost to the Company of employer’s National Insurance Contributions
so that the overall cost to the Company is not increased. The total for H Evans is an allowance to enable him to contribute to personal pension arrangements. The total
for I Martin includes an allowance equivalent to 6% of base salary to enable him to make personal pension arrangements in addition to the Company’s pension plan. The
amount for T K Skelton comprises an allowance equivalent to 20% of base salary to enable him to contribute to personal pension arrangements (£68,918) and to a 401k
plan (£4,955). These pension allowances form part of the Directors’ total emoluments for the purpose of disclosure under the Companies Act 1985. Therefore, the total of
such emoluments is £4,253,454 (2005: £4,011,357).
(vii) Payments made to T K Skelton were made in US dollars and have been converted using the rate US$1.776 = £1.
(viii) Fees paid to G L Farr, R A Ingram, and J G King were converted to US dollars on payment and those to Dr J Zech were converted to euros on payment.
Page 52 Misys plc Annual Report 2006

External directorships
The Company recognises that executive Directors may broaden their experience by serving as non-executive Directors of other companies and
they are permitted to accept such appointments by prior agreement with the Board. It is normal practice for executive Directors to retain fees
received for non-executive appointments. Kevin Lomax served as a non-executive Director of Marks and Spencer Group plc and Chairman of its
Audit Committee during the financial year for which he received a fee of £61,667.
Share Options and Long-term Share Incentive Plan
The executive Directors hold options granted under Misys’ current share plans and under the share plans which were operated previously.
Jasper McMahon and Tom Skelton each also hold options granted before their appointment to the Board.
The performance criteria that applied to options granted and Long-term Share Incentive Plan awards made in 2005/06 are the same as those
proposed for grants in 2006/07, described on page 50 above.
The options held by each executive Director over shares in the Company are summarised below.
At 1 June 2005 At 31 May 2006 Exercisable
Weighted Weighted
average average
exercise exercise
price price
(i) Plan name Number (pence) Number (pence) From To
J K Lomax a 1998 Unapproved TI (ii) – – 198,297 235.00 28-Jul-08 28-Jul-15
a 1998 Unapproved TI (ii) 402,000 264.00 402,000 264.00 24-Jul-06 24-Jul-13
b 1998 Unapproved TI (ii) 656,142 193.61 249,142 175.00 29-Jul-07 29-Jul-14
b AAP (iii) 77,082 0.00 77,082 0.00 24-Jul-05 24-Jul-10
b LTIP (iv) – – 198,297 0.00 27-Jul-08 28-Jul-13
b LTIP (iv) 608,663 0.00 410,126 0.00 24-Jul-06 29-Jul-12
b MSEBP (vi) – – 115,319 0.00 01-Sept-07 01-Sept-10
b Savings related 5,062 140.00 6,024 147.82 01-Oct-07 31-Mar-09
H Evans a 89 ESOP 6,660 450.16 6,660 450.16 12-Feb-01 12-Feb-08
a 91 ESOS 93,340 450.16 93,340 450.16 12-Feb-03 12-Feb-08
a 1998 Unapproved TI (ii) – – 141,617 235.00 28-Jul-08 28-Jul-15
a 1998 Unapproved TI (ii) 295,000 264.00 295,000 264.00 24-Jul-06 24-Jul-13
b 1998 Unapproved TI (ii) 532,857 194.71 182,857 175.00 29-Jul-07 29-Jul-14
b AAP (iii) 49,318 0.00 – – – –
b LTIP (iv) – – 141,617 0.00 28-Jul-08 28-Jul-13
b LTIP (iv) 426,892 0.00 301,038 0.00 24-Jul-06 29-Jul-12
b MSEBP (vi) – – 84,681 0.00 01-Sept-07 01-Sept-10
b Savings related 5,062 140.00 6,024 147.82 01-Oct-07 31-Mar-09
I Martin a 1998 Approved TII 16,666 180.00 16,666 180.00 03-Feb-06 30-Oct-06
a 1998 Unapproved TI (ii) – – 47,464 235.00 28-Jul-08 28-Jul-09
a 1998 Unapproved TI (ii) 295,000 264.00 295,000 264.00 24-Jul-06 30-Jul-07
b 1998 Unapproved TI (ii) 407,857 191.55 122,072 175.00 29-Jul-07 29-Jul-08
b 1998 Unapproved TII 433,334 180.00 – – – –
a Retention Option (v) 104,100 317.00 104,100 317.00 23-Nov-04 30-Jan-07
b AAP (iii) 182,674 0.00 110,770 0.00 9-Oct-03 30-Jan-07
b LTIP (iv) – – 47,464 0.00 28-Jul-08 28-Oct-08
b LTIP (iv) 422,989 0.00 240,253 0.00 24-Jul-06 29-Oct-07
b MSEBP (vi) – – 54,468 0.00 30-Jul-06 30-Jul-07
a Savings related 4,438 193.34 – – – –
Page 53

Directors’ remuneration report
continued
The options held by each executive Director (continued)
Page 54 Misys plc Annual Report 2006
At 1 June 2005 At 31 May 2006 Exercisable
Weighted Weighted
average average
exercise exercise
price price
(i) Plan name Number (pence) Number (pence) From To
J P McMahon a 89 ESOP 13,710 218.71 13,710 218.71 29-Jan-00 29-Jan-07
a 91 ESOS 88,275 218.71 88,275 218.71 29-Jan-02 29-Jan-07
a 1998 Unapproved TI (ii) – – 127,012 235.00 28-Jul-08 28-Jul-15
a 1998 Unapproved TI (ii) 265,000 264.00 265,000 264.00 24-Jul-06 24-Jul-13
b 1998 Unapproved TI (ii) 369,000 191.67 164,000 175.00 29-Jul-07 29-Jul-14
a 1998 Unapproved TII 28,790 434.17 28,790 434.17 27-Nov-01 27-Nov-08
b 1998 Unapproved TII 450,000 180.00 – – – –
a Retention Option (v) 94,637 317.00 94,637 317.00 23-Nov-04 23-Nov-11
b AAP (iii) 44,386 0.00 – – – –
b LTIP (iv) – – 127,012 0.00 28-Jul-08 28-Jul-13
b LTIP (iv) 379,816 0.00 270,060 0.00 24-Jul-06 29-Jul-12
b MSEBP (vi) – – 75,915 0.00 01-Sept-07 01-Sept-10
a Savings Related – – 962 189.00 01-Oct-08 31-Mar-09
T K Skelton a 1998 Unapproved TI (ii) – – 125,013 235.00 28-Jul-08 28-Jul-15
a 1998 Unapproved TI (ii) 282,000 264.00 282,000 264.00 24-Jul-06 24-Jul-13
b 1998 Unapproved TI (ii) 574,270 196.94 154,270 175.00 29-Jul-07 29-Jul-14
a 1998 Unapproved TII 47,959 475.64 47,959 475.64 27-Nov-01 02-Aug-09
b 1998 Unapproved TII 450,000 180.00 – – – –
a 2000 Unapproved TIII 163,697 343.00 163,697 343.00 26-Jul-02 26-Jul-08
a Retention Option (v) 132,545 317.00 132,545 317.00 23-Nov-04 23-Nov-11
b AAP (iii) 106,680 0.00 52,676 0.00 29-Jul-06 29-Jul-11
b LTIP (iv) – – 125,013 0.00 28-Jul-08 28-Jul-13
b LTIP (iv) 409,256 0.00 266,976 0.00 24-Jul-06 29-Jul-12
b MSEBP (vi) – – 69,058 0.00 1-Sept-07 01-Sept-10
(i) The market price on 31 May 2006 was 179.75p per share with a range during the year from 252.50p to 177.00p. The exercise price per share is above market price at
year end in cases marked (a) and below in cases marked (b).
(ii) Options marked ‘TI’ are classed by Misys as ‘Type I’. The Committee has set performance conditions for Type I options, based on adjusted earnings per share growth
above growth in RPI over a fixed three year period, with targets ranging from 3% to 12% per annum.
(iii) Nil cost options under the Misys Annual Award Plan are not subject to any performance criteria, only employment conditions.
(iv) Nil cost options under the LTIP vested in 2001 at 31.22% of their maximum potential and became exercisable in three equal annual tranches three, four and five years
after grant. Until 2002 nil cost options under the LTIP were subject to performance targets based on compound growth in adjusted earnings per share. LTIP awards
granted in 2003 were subject to targets based on comparative total shareholder return against a comparator group. LTIP awards granted in 2004 and 2005 are subject
to performance conditions as described on page 50.
(v) On 23 November 2001, prior to their appointment to the Board, market value options were granted which vested on 23 November 2004.
(vi) Nil cost options under the Misys Senior Executive Bonus Plan are not subject to any performance conditions, only employment conditions.
Under arrangements existing prior to the adoption of the current plans, executive Directors participated in a number of market value approved
and unapproved share option schemes, and in the Misys Share Incentive Programme. All options granted under these prior arrangements
have now vested in full. Executive Directors have also participated in the Company’s savings related share option schemes or US stock
purchase plan on the same basis as other employees.
The options set out above were granted under the Misys share plans current at the time of grant. The options shown with a zero exercise price
were granted as nil-cost options under the Misys 1998 Long-term Share Incentive Plan, Misys Annual Award Plan and the Misys Senior
Executive Bonus Plan. All other options were granted at market value.

Movements in the executive Directors’ share options during the year are summarised below.
Grant in year (i) Exercised in year (ii) Lapsed in year (iii)
Weighted
average
Exercise Exercise exercise
price price price
Exercise Plan name Number (pence) Number (pence) Number (pence)
J K Lomax MSEBP 115,319 0.00 – – – –
1998 Unapproved Plan – ‘TI’ 198,297 235.00 – – 407,000 205.00
1998 LTIP 198,297 0.00 – – 198,537 0.00
Savings related 962 189.00 – – – –
H Evans MSEBP 84,681 0.00 – – – –
1998 Unapproved Plan – ‘TI’ 141,617 235.00 – – 350,000 205.00
1998 LTIP 141,617 0.00 – – 125,854 0.00
AAP – – 49,318 b 0.00 – –
Savings related 962 189.00 – – – –
I Martin MSEBP 54,468 0.00 – – – –
1998 Unapproved Plan – ‘TI’ 141,617 235.00 – – 379,938 207.63
1998 Unapproved Plan – ‘TII’ – – – – 433,334 180.00
1998 LTIP 141,617 0.00 – – 276,889 0.00
AAP – – 21,925 e 0.00 – –
AAP – – 25,320 e 0.00 – –
AAP – – 24,659 e 0.00 – –
Share Award Contract – – 71,661 f 0.00 – –
Savings related – – 1,668 d 164.00 2,770 211.00
J P McMahon MSEBP 75,915 0.00 – – – –
1998 Unapproved Plan – ‘TI’ 127,012 235.00 – – 205,000 205.00
1998 LTIP 127,012 0.00 – – 109,756 0.00
1998 Unapproved Plan – ‘TII’ – – – – 450,000 180.00
AAP – – 44,386 c 0.00 – –
Savings related 962 189.00 – – – –
T K Skelton MSEBP 69,058 0.00 – – – –
1998 Unapproved Plan – ‘TI’ 125,013 235.00 – – 420,000 205.00
1998 LTIP 125,013 0.00 – – 142,280 0.00
1998 Unapproved Plan – ‘TII’ – – – – 450,000 180.00
AAP – – 54,004 a 0.00 – –
(i) Grants under the MSEBP were made on 1 September 2005 and grants under the 1998 Unapproved Plan – T1 and the 1998 LTIP were made on 2 August 2005 at 100%
of basic salary, with performance targets where relevant are described on page 50.
(ii) The following information provides the dates on which options were exercised and the market price of the Company’s shares on those dates:
a 01/08/2005 229.75p
b 03/08/2005 235.00p
c 14/11/2005 217.00p
d 29/03/2006 234.50p
e 10/05/2006 207.25p
f 19/05/2006 187.00p
(iii) Market price options granted to executive Directors in 2002 failed to satisfy the minimum performance criteria required of compound annual growth in adjusted EPS
exceeding RPI by a rate of 7% and hence lapsed on 25 July 2005. 1998 LTIP awards granted in 2002 also failed to satisfy the minimum performance criteria required
of compound annual growth rate in adjusted EPS of 10% and hence lapsed on 25 July 2005.
The aggregate gain on options exercised by executive Directors during the year was £620,999 (2005: £191,773).
There have been no changes in executive Directors’ share options between 31 May 2006 and 27 July 2006.
Page 55

Directors’ remuneration report
continued
Directors’ interests in shares
At 1 June
2005
(or date of
At 31 May appointment,
Number of shares 2006 if later)
J K Lomax (i) 7,462,545 7,461,403
H Evans 123,647 97,230
J P McMahon 219,484 175,098
T K Skelton 227,500 196,720
Sir Dominic Cadbury 150,000 150,000
A G L Alexander 64,285 64,285
G L Farr 30,140 30,140
J G King 57,000 –
J Ormerod 5,000 5,000
A Ramji 23,436 20,596
Dr J Zech 15,000 15,000
(i) Included within the total for J K Lomax are 55,358 shares (2005: 55,358) held in the Lomax Charitable Trust.
Awards under Misys share plans may be satisfied using shares held in the Misys Employees’ Share Trust. As potential beneficiaries of this
Trust, the Directors are deemed to have a beneficial interest in the Trust’s shares which at 31 May 2006 amounted to 22,366,638 shares.
Options under the Misys ESOP 1989 Share Option Scheme are satisfied using shares held in the Misys Employees’ Share Ownership Plan
Trust. As the Directors are potential beneficiaries of this Trust, the Directors are deemed to have a beneficial interest in the Trust’s shares
which at 31 May 2006 amounted to 129,482 shares.
There have been no changes in Directors’ interests in the shares of the Company between 31 May 2006 and 27 July 2006.
Approved by the Board
Sir Dominic Cadbury
Chairman, Remuneration Committee
27 July 2006
Page 56 Misys plc Annual Report 2006

Statement of Directors’ responsibilities
The Directors are responsible 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, and for preparing the parent company financial
statements and the Directors’ remuneration report in accordance
with applicable law and United Kingdom Accounting Standards
(United Kingdom Generally Accepted Accounting Practice).
The Directors are responsible for preparing financial statements
for each financial year which give a true and fair view, in accordance
with IFRSs as adopted by the European Union, of the state of affairs
of the Group and of the profit or loss of the Group and a true and
fair view, in accordance with United Kingdom Generally Accepted
Accounting Practice, of the state of affairs of the Company for that
period. 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 whether the Group financial statements comply with IFRSs
as adopted by the European Union, and with regard to the parent
company financial statements whether applicable accounting
standards have been followed, subject to any material departures
disclosed and explained in the financial statements.
The Directors confirm that they have complied with the above
requirements in preparing the financial statements.
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 Group financial statements comply with the Companies Act
1985 and Article 4 of the IAS Regulation and the parent company
financial statements and the Directors’ remuneration report comply
with the Companies Act 1985. 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.
The Directors are responsible for the maintenance and integrity of
the corporate and financial information included on the Company’s
website. Legislation in the United Kingdom governing the preparation
and dissemination of financial statements may differ from legislation
in other jurisdictions.
Page 57

Independent auditors’ report to the members of Misys plc
We have audited the Group financial statements of Misys plc for the
year ended 31 May 2006, which comprise the consolidated income
statement, the consolidated statement of recognised income and
expenditure, the statement of cash flows, the consolidated balance
sheet, the accounting policies and the related notes.
We have reported separately on the parent company financial
statements of Misys plc for the year ended 31 May 2006 and on the
information in the Directors’ 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 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 Financial review that is cross referred
from the Business review section of the Directors’ report. We also
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 2003 FRC
Combined Code 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.
Page 58 Misys plc Annual Report 2006
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 items
listed in the contents section of the Annual Report, apart from
the 2006 audited financial statements and the part of the Directors’
remuneration report to be audited. 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 31 May 2006 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
London
27 July 2006

Consolidated income statement
for the year ended 31 May 2006
all figures in £ millions Note 2006 2005
Continuing operations
Revenue 1 953.3 854.7
Operating profit before exceptional items 83.6 83.4
Exceptional items 2 (27.8) (11.6)
Operating profit 1 55.8 71.8
Finance costs (21.4) (14.5)
Finance income 5.1 4.0
Net finance costs 7 (16.3) (10.5)
Profit before taxation 39.5 61.3
Taxation 8 (13.5) (14.7)
Profit after taxation from continuing operations 26.0 46.6
Discontinued operations
Profit after taxation and before exceptional items 15.2 15.8
Exceptional items 2 171.9 –
Profit for the year from discontinued operations 4 187.1 15.8
Profit for the year 213.1 62.4
Attributable to:
Shareholders of Misys plc 213.1 62.0
Minority interests – 0.4
213.1 62.4
pence pence
Basic earnings per share 10 44.0 12.4
Diluted earnings per share 10 43.6 12.3
Dividends per share 9 7.18 6.84
Statement of recognised income and expenditure
for the year ended 31 May 2006
all figures in £ millions Note 2006 2005
Exchange differences on translation of foreign operations 1.9 (0.6)
Actuarial gains (losses) on defined benefit pension schemes 29 2.9 (2.5)
Taxation (charge) credit on items taken directly to or transferred from equity 27 (2.4) 0.8
Net income (expense) recognised directly in equity 2.4 (2.3)
Net profit for the period 213.1 62.4
Total income recognised in the period 215.5 60.1
Adjustment for the implementation of IAS 39 37 (1.7) –
Attributable to:
213.8 60.1
Shareholders of Misys plc 213.8 59.7
Minority interests – 0.4
213.8 60.1
Page 59

Statement of cash flows
for the year ended 31 May 2006
all figures in £ millions Note 2006 2005
Operating activities
Net cash flow generated from operations 106.5 100.4
Net interest paid 11 (15.4) (9.8)
Taxation paid (14.8) (7.2)
Net cash flow from operating activities 76.3 83.4
Investing activities
Acquisitions and disposals of businesses 12 119.0 (8.7)
Expenditure on developed software (14.4) (11.2)
Other capital expenditure and financial investment 13 (8.3) (9.0)
Net cash flow from investing activities 96.3 (28.9)
Net cash flow from financing activities 14 (166.7) (60.5)
Net cash flow from operating, investing and financing activities 5.9 (6.0)
Differences on exchange 0.2 0.6
Increase (decrease) in cash and cash equivalents in the period 6.1 (5.4)
Net cash and cash equivalents at the start of the period 101.6 107.0
Net cash and cash equivalents at the end of the period 16 107.7 101.6
all figures in £ millions 2006 2005
Continuing operations
Profit after taxation 26.0 46.6
Net finance costs 16.3 10.5
Taxation charge 13.5 14.7
Amortisation charge net of (profit) loss on disposal of other intangibles 11.7 5.4
Depreciation charge net of (profit) loss on disposal of property, plant and equipment 9.1 8.0
Share-based payment charge 9.5 10.2
Difference between pension charge and cash contributions (5.0) –
Net (profit) loss on disposal of businesses (5.2) 2.7
Decrease in inventories 0.3 0.2
Increase in trade and other receivables (14.5) (43.2)
Increase in payables and provisions 25.4 34.8
Increase (decrease) in deferred income 5.8 (5.7)
Other non-cash movements (0.2) 0.1
Net cash flow generated from continuing operations 92.7 84.3
Discontinued operations
Profit after taxation 187.1 15.8
Depreciation charge net of (profit) loss on disposal of property, plant and equipment 0.2 0.4
Share-based payment charge 0.3 0.2
Net profit on disposal of businesses (171.9) –
(Increase) decrease in inventories (0.1) 0.1
Decrease (increase) in trade and other receivables 0.2 (0.3)
(Decrease) increase in payables and provisions (1.5) 0.3
Decrease in deferred income (0.5) (0.4)
Net cash flow generated from discontinued operations 13.8 16.1
Net cash flow generated from operations 106.5 100.4
Page 60 Misys plc Annual Report 2006

Consolidated balance sheet
as at 31 May 2006
all figures in £ millions Note 2006 2005
Non current assets
Goodwill 17 241.1 216.3
Other intangible assets 18 47.0 22.4
Property, plant and equipment 19 18.0 22.4
Investments 20 3.8 4.1
Trade and other receivables 21 17.5 13.6
Derivative financial instruments 24 0.5 –
Deferred tax assets 27 22.7 21.9
Current assets
350.6 300.7
Inventories 0.9 1.2
Trade and other receivables 21 175.7 166.8
Derivative financial instruments 24 1.0 –
Current tax assets 4.5 2.7
Cash and cash equivalents 16 117.2 101.6
Current liabilities
299.3 272.3
Trade and other payables 22 (153.8) (137.7)
Loans and overdrafts 23 (11.8) (3.1)
Derivative financial instruments 24 (0.7) –
Current tax liabilities (49.9) (56.6)
Provisions 26 (64.8) (54.3)
Deferred income 28 (114.7) (108.8)
(395.7) (360.5)
Net current liabilities (96.4) (88.2)
Total assets less current liabilities 254.2 212.5
Non current liabilities
Trade and other payables 22 (3.7) (2.0)
Loans and overdrafts 23 (200.1) (317.3)
Derivative financial instruments 24 (2.5) –
Provisions 26 (35.9) (35.3)
Deferred income 28 (4.3) (8.5)
Retirement benefit obligations 29 (0.7) (8.8)
(247.2) (371.9)
Net assets (liabilities) 7.0 (159.4)
Equity
Share capital 34 5.5 5.6
Share premium account 34 67.2 66.5
Capital redemption reserve 34 0.3 0.2
Other reserves 35 (66.0) (235.0)
Equity shareholders’ funds (deficit) 7.0 (162.7)
Minority interests 34 – 3.3
Total equity 7.0 (159.4)
Approved by the Board
Kevin Lomax
Howard Evans
27 July 2006
Page 61

Accounting policies
Basis of preparation
The financial statements have been prepared in accordance with
International Financial Reporting Standards (‘IFRS’) as adopted by
the European Union and with those parts of the Companies Act 1985
that are applicable to companies reporting under IFRS.
Misys adopted IFRS with a transition date of 1 June 2004. Comparative
figures for the year ended 31 May 2005 and the Group’s balance sheet
as at 31 May 2005 that were previously reported in accordance with
accounting principles generally accepted in the United Kingdom (‘UK
GAAP’) have been restated to comply with IFRS, with the exception of
IAS 32 ‘Financial Instruments: Disclosure and Presentation’ and IAS 39
‘Financial Instruments: Recognition and Measurement’ which have
been applied prospectively from 1 June 2005.
IFRS 1 ‘First-time Adoption of International Financial Reporting
Standards’ allows certain exemptions from the retrospective
application of IFRS prior to 1 June 2004. Where these exemptions
have been used, they are explained under the relevant headings
below. The consolidated financial information has been prepared
under the historical cost convention, except as described under the
heading ‘Financial Instruments’.
Basis of consolidation
The Group’s financial statements consolidate the financial
statements of Misys plc and its subsidiary undertakings.
On acquisition, the assets, liabilities and contingent liabilities of a
subsidiary are measured at their fair value at the date of acquisition.
Any excess of the cost of acquisition over the fair values of the
identifiable net assets acquired is recognised as goodwill. Any
deficiency of the cost of acquisition below the fair values of
identifiable net assets acquired (i.e. discount on acquisition) is
credited to income in the period of acquisition.
Subsidiary undertakings acquired during the period have been included
in the financial statements from the date of acquisition. Subsidiary
undertakings disposed of are included in the financial statements up
to the date of disposal. Accordingly, the consolidated income statement,
the consolidated statement of recognised income and expense and the
consolidated cash flow statement include the results and cash flows for
the period of ownership.
Recent accounting developments
IFRS 7 ‘Financial Instruments: Disclosures’ was issued in August
2005 and is required to be implemented by Misys from 1 June 2007.
This new standard incorporates the disclosure requirements of IAS
32, which it supersedes, and adds further quantitative and qualitative
disclosures in relation to financial instruments. These disclosures
will be made in future periods.
IFRIC 8 ‘Scope of IFRS 2’ applicable from 1 May 2006 addresses the
issue of whether IFRS 2 applies to transactions in which the entity
cannot specifically identify some or all of the goods and services
received. This interpretation is not expected to have a material
impact on the Group.
IFRIC 9 ‘Reassessment of Embedded Derivatives’ applicable from
1 June 2006 prohibits reassessment of the treatment of embedded
derivatives subsequent to initial recognition unless there is a change
in the terms of the contract that significantly modifies the cash flows
that otherwise would occur under the contract, in which case
reassessment is required. This interpretation is not expected to
have a material impact on the Group.
Critical accounting estimates and judgements
Estimates and judgements are continually evaluated and are based on
historical experience and other factors, including expectations of future
events that are believed to be reasonable under the circumstances.
Page 62 Misys plc Annual Report 2006
The preparation of financial statements under IFRS requires
management to make estimates and assumptions concerning the
future. The resulting accounting estimates will, by definition, seldom
equal the related actual results.
Critical accounting estimates and judgements arise in relation to
revenue recognition, the impairment of intangible assets, recognition
of provisions in respect of onerous property contracts, regulatory
reviews and complaints provisions and the recognition of deferred tax
assets. The accounting policies in respect of these items are set out
below and details of the estimates and judgements impacting the
financial statements are set out in notes 17, 26 and 27.
Revenue recognition
Revenue represents the fair value of consideration received or
receivable from clients for goods and services provided by the Group,
net of discounts and sales taxes.
Revenue from system sales is recognised when a signed contract
exists, delivery to a customer has occurred with no significant vendor
obligations remaining and where the collection of the resulting
receivable is considered probable. In instances where a significant
vendor obligation exists, revenue recognition is delayed until the
obligation has been satisfied. No revenue is recognised for multiple
deliveries or multiple element products if an element of the contract
remains undelivered and is essential to the functionality of the
elements already delivered.
Maintenance fees are recognised rateably over the period of the
contract. EDI and remote processing services (transaction
processing) are recognised as the services are performed.
Revenue from professional services, such as implementation,
training and consultancy, is recognised as the services are
performed.
Revenue on certain larger composite contracts is recognised
on a percentage of completion basis over the period from the
commencement of performance on the contract to customer
acceptance. The degree of completion of a contract is measured
using the costs incurred to date or milestones reached, depending
upon the nature of the individual contract and the most appropriate
measure of the percentage of completion. Losses on contracts are
recognised as soon as a loss is foreseen by reference to the
estimated costs of completion.
Within Sesame, commission revenue received from insurers based
on gross premiums written is presented gross of commission payable
to Independent Financial Advisors (IFAs) and is recognised when
earned. Annual fees received from certain IFAs for industry training,
compliance support and access to Misys network’s listing of
insurance providers and products are recognised over the relevant
subscription period.
Share incentive schemes
The Group operates several equity-settled, share-based compensation
plans. The fair value of the employee services received in exchange for
the grant of the options is recognised as an expense. The total amount
to be expensed over the vesting period is determined by reference to
the fair value of the options granted, excluding the impact of any nonmarket
vesting conditions (for example, profitability and sales growth
targets). Non-market vesting conditions are included in assumptions
about the number of options that are expected to become exercisable.
At each balance sheet date, a revised estimate is made of the
number of options that are expected to become exercisable. If the
revised estimate differs from the original estimate, the charge to the
income statement is adjusted over the remaining vesting period of
the options.

Pensions
The Group operates a number of defined contribution pension schemes
covering the majority of its employees. The costs of these pension
schemes are charged to the income statement as incurred. In addition,
the Group has a closed funded defined benefit pension scheme in the
UK, as well as a number of other smaller defined benefit arrangements
outside the UK. The remaining active members of the closed UK
defined benefit scheme now contribute to a defined contribution section
of the scheme. Full independent actuarial valuations are carried out on
at least a triennial basis and updated to each balance sheet date. The
assets of the schemes are held separately from those of the Group.
Pension scheme assets are measured using market values. Pension
scheme liabilities are measured using a projected unit method and
discounted at the current rate of return on a high quality corporate
bond of equivalent term and currency to the liability. The pension
scheme surplus (to the extent that it is recoverable) or deficit is
recognised in full on the balance sheet. Any current or past service
cost is recognised in the income statement. The net of the expected
increase in the present value of the schemes’ liabilities, and the
Group’s long-term expected return on its schemes’ assets, are
included in the income statement.
Any difference arising from experience or assumption changes and
differences between the expected return on assets and those actually
achieved are charged or credited to the statement of total recognised
income and expense as they arise.
Leases
Leases are classified as finance leases whenever the terms of the
lease transfer substantially all the risks and rewards of ownership
to the lessee. All other leases are classified as operating leases.
Property, plant and equipment held under finance leases are
capitalised in the balance sheet at the lower of cost or present value
of the minimum lease payments and are depreciated over their
useful lives. The capital elements of future obligations under leases
are included as liabilities in the balance sheet. The interest elements
of the lease obligations are charged to income on an actuarial basis
over the period of the lease. Rentals paid under operating leases are
charged to income on a straight line basis over the lease term.
Onerous property contracts
Provision for onerous lease commitments is based on an estimate
of the net unavoidable lease payments on these properties, being the
rental due, plus any termination costs, less any income expected to
be derived from the properties being sublet. The provisions are
discounted at an appropriate rate to take into account the effect of
the time value of money.
Taxation
Taxation is that chargeable on the profits for the period, together with
deferred taxation. Deferred taxation is recognised, using the liability
method, in respect of all temporary differences that have originated
but not reversed at the balance sheet date where transactions or
events have occurred at that date that will result in an obligation to
pay more, or a right to pay less, tax in the future.
Resultant deferred tax assets are recognised only to the extent that it
is probable that there will be suitable taxable profits from which the
underlying temporary differences can be deducted, or where there
are deferred tax liabilities against which the assets can be recovered.
Deferred tax is measured on an undiscounted basis at the tax rates that
are expected to apply in the periods in which timing differences reverse,
based on tax rates and laws enacted at the balance sheet date.
Current and deferred tax is recognised in the income statement
except when the tax relates to items charged or credited directly to
equity, in which case the tax is also dealt with in equity.
Foreign currencies
Items included in the financial statements of Group companies are
measured using the currency of the primary economic environment in
which each entity operates, their functional currency. The consolidated
financial statements are presented in sterling.
Each overseas operation translates foreign currency transactions
into their own functional currency at rates ruling at the date of each
transaction. Foreign currency monetary assets and liabilities are
retranslated at rates ruling at the balance sheet date, and currency
translation differences are recognised in the income statement.
On consolidation, the results of overseas operations are translated to
sterling at the average exchange rate for the period, and their assets
and liabilities are translated at exchange rates prevailing on the
balance sheet date. Currency translation differences are recognised
in the translation reserve.
Exchange gains and losses on foreign currency borrowings used to
finance an equity investment in an overseas operation are offset in
reserves against the exchange differences arising on the retranslation
of the net investment, up to the level of the investment. The exchange
differences on any ineffective portion are recognised in the income
statement.
Goodwill and fair value adjustments arising on the acquisition of a
foreign entity are treated as assets and liabilities of the foreign entity
and translated at the closing rate.
When a foreign operation is disposed, the accumulated translation
differences that relate to it are removed from equity and recognised
in the income statement as part of the gain or loss on disposal.
As permitted under IFRS 1, cumulative translation differences in
respect of foreign operations have been deemed to be nil at
1 June 2004.
The Group hedges its exposure to certain foreign exchange risks
using derivatives and foreign currency borrowings. Details of the
accounting policies in respect of these are given in the financial
instruments section.
Intangible assets – goodwill
Goodwill arising on consolidation represents the consideration, net
of costs, less the Group’s interest in the fair value of the identifiable
assets and liabilities acquired.
Goodwill is recognised as an intangible asset and reviewed for
impairment at least annually. Any impairment is recognised
immediately in the income statement and is not subsequently
reversed.
On the disposal of a previously acquired subsidiary, the attributable
amount of goodwill is included in the determination of the gain or
loss on disposal.
Goodwill arising on acquisitions before the date of transition to IFRS
has been retained at the previous UK GAAP amounts, subject to being
tested for impairment at that date. As permitted under IFRS 1,
goodwill written off to reserves under UK GAAP prior to 1 June 1998
has not been reinstated and is not included in determining any
subsequent gain or loss on disposal.
Contingent consideration
Where part or all of the amount of purchase consideration is
contingent on future events, the cost of acquisition initially recorded
is a reasonable estimate of the fair value of amounts expected to be
payable in the future.
Page 63

Accounting policies
continued
The cost of acquisition is adjusted when revised estimates are made,
with corresponding adjustments continuing to be made to goodwill
until the ultimate outcome is known. These liabilities are reported
under provisions in the balance sheet.
Other intangible assets and research and development expenditure
Research expenditure, including the cost of in-house software
research, is expensed in the period in which it is incurred.
Software development expenditure is capitalised when the Group is
able to demonstrate all of the following: the technical feasibility of
the resulting asset; the ability (and intention to) complete the
development and use or sell it; how the asset will generate probable
future economic benefits; and the ability to measure reliably the
expenditure attributable to the asset during its development.
Development costs which do not meet these criteria are recognised
in the income statement as incurred and are not subsequently
capitalised.
Capitalised development costs are normally amortised on a straight
line basis over their useful economic lives, once the related software
product is available for use.
Intangible assets purchased separately, such as software licences that
do not form an integral part of related hardware, are capitalised at cost
and amortised over their useful economic lives. Intangible assets
acquired through a business combination are initially measured at fair
value and amortised over their useful economic lives.
Estimated useful lives by major class of assets are as follows:
Acquired intangibles 4-10 years
Developed software 3-5 years
Third party software 3-5 years
Property, plant and equipment
Property, plant and equipment are stated at cost less accumulated
depreciation. Depreciation is calculated on a straight line basis so as
to write off the cost, less estimated residual value of each asset, over
its expected useful life. The residual values and useful economic lives
of property, plant and equipment are reviewed annually. Freehold land
is not depreciated. The useful lives by major class of assets applied
from the date of purchase are:
Freehold and long leasehold property 50 years
Short leasehold property over lease term
Computer and other equipment 4-10 years
Impairment of assets
Assets that are subject to amortisation are reviewed for impairment
whenever events or changes in circumstances indicate that the
carrying amount may not be recoverable. Goodwill is reviewed for
impairment annually.
An impairment loss is recognised for the amount by which the
asset’s carrying amount exceeds its recoverable amount. The
recoverable amount is the higher of an asset’s fair value less costs
to sell and its value in use.
Page 64 Misys plc Annual Report 2006
For the purposes of assessing impairment, assets are grouped at the
lowest levels for which there are separately identifiable cash flows
(cash-generating units).
Inventories
Inventories are stated at the lower of cost and net realisable value.
Cost is determined using the first-in, first-out (FIFO) method.
Financial instruments
Financial assets and liabilities are recognised on the Group’s balance
sheet when the Group becomes party to the contractual provisions of
the instrument. A more detailed description of the accounting policy
for each type of significant financial instrument is given below:
Trade receivables
Trade receivables do not carry any interest and are stated at
amortised cost, as the carrying value is reduced by appropriate
allowances for estimated irrecoverable amounts.
Investments
Investments are recognised and derecognised on a trade date where
a purchase or sale of an investment is under a contract whose terms
require delivery of the investment within the timeframe established
by the market concerned. Investments are initially measured at fair
value, equating to cost, including transaction costs.
Investments are subsequently measured at fair value unless this
cannot be measured reliably by reference to quoted prices in an
active market, in which case they continue to be measured at
historical cost, net of any impairment.
Financial liabilities and equity
Financial liabilities and equity instruments are classified according
to the substance of the contractual arrangements entered into. An
equity instrument is any contract that evidences a residual interest
in the assets of the Group after deducting all of its liabilities.
Bank borrowings
Borrowings are initially stated as the ‘net proceeds’, being the
principal loan element, net of issue and finance costs. Issue costs
together with finance costs are allocated to the income statement
over the term of the facility at the effective rate of interest. Accrued
finance costs attributable to borrowings where the maturity at the
date of issue is less than 12 months are included in other payables
within current liabilities. For all other borrowings, accrued finance
charges and issue costs are included in the carrying value of those
borrowings.
Trade payables
Trade payables are non-interest bearing and are stated at amortised
cost.
Equity instruments
Equity instruments issued by the Company are recorded at the
proceeds received, net of direct issue costs.
Derivative financial instruments and hedge accounting
(from 1 June 2005)
The business activities of the Group expose it to financial risks that
arise from changes in both foreign exchange rates and interest rates.
The Group uses forward currency contracts and interest rate caps to
hedge these exposures. The Group does not use derivative financial
instruments for speculative purposes.

Changes in the fair value of derivative financial instruments are
recognised directly in equity where they are designated as effective
hedges of future cash flows. The ineffective portion of the hedge,
where it occurs, is recognised immediately in the income statement.
If the item being hedged is a non-financial asset or liability then
the associated gains or losses on the associated derivative that
had previously been recognised in equity are included in the
measurement of the asset or liability at the time it is recognised.
Conversely if the item being hedged is a financial asset or liability,
any amounts arising from changes in fair value that are deferred in
equity are subsequently recognised in the income statement in the
same accounting period in which the hedged item affects net income.
Changes in the fair value of derivative financial instruments, where
they are not designated as effective hedges of future cash flows, are
recognised in the income statement. Any changes in the fair value of
the underlying transaction are also recognised in the income
statement.
Hedge accounting of a transaction is discontinued when the hedging
instrument is sold, terminated, or exercised, or when the hedging
instrument no longer qualifies for hedge accounting.
Under these circumstances any cumulative gain or loss on the
hedging instrument, which has already been recognised in equity, is
retained in equity until the transaction occurs. However if a hedged
transaction is no longer expected to occur, any net cumulative gain
or loss that has already been recognised in equity is immediately
transferred to the income statement.
A derivative that is embedded in another financial instrument, or
in a host contract, is treated as a separate derivative if its risks and
characteristics are not closely related to those of the host contract.
Under these circumstances the host contract is not carried at fair
value but any unrealised gains or losses on the derivative are
reported in the income statement.
Derivative financial instruments and hedge accounting
(from 1 June 2004 to 31 May 2005)
During this period derivative instruments were used by the Group
solely to reduce or eliminate exposure to foreign exchange and
interest rate risks. Derivative instruments that were used included
forward currency contracts, currency swaps and interest rate caps.
These derivative instruments were considered to be hedges because
they were used to reduce the risk profile of an existing underlying
exposure in accordance with the Group’s risk management policies.
When derivatives were used for hedging purposes, the Group
deferred the derivative’s impact on the income statement profit
until the impact of the underlying transaction was also recognised.
Premiums or discounts arising on the purchase of derivative
instruments were amortised over the shorter of the life of the
instrument and the underlying transaction.
Where forward currency contracts were used to hedge balance
sheet items, the balance sheet items were translated at the rate of
exchange that was contained within the hedge. Where the instrument
was used to hedge against future transactions that were not yet
shown on the balance sheet, any gains and losses were deferred
until the transaction occurred.
Where a derivative ceased to be a hedge, either as a result of the
underlying exposure which it was hedging having been extinguished
or because the future transaction was no longer considered likely to
occur, the derivative was either cancelled, sold or matched against a
new derivative. Any cost of termination was recognised in the profit
and loss account in the period of termination. Where the derivative
was matched by a new derivative, any resultant gain or loss was
immediately recognised in the profit and loss account.
Provisions
Provisions are recognised when the Group has a present legal
or constructive obligation as a result of past events and it is probable
that an outflow of resources will be required to settle the obligation;
and if this amount is capable of being reliably estimated. If such an
obligation is not capable of being reliably estimated it is classified as
a contingent liability.
Exceptional items
Where certain expense or revenue items recorded in a period
are material by their size or incidence, these are disclosed as
exceptional within a separate line on the income statement.
Page 65

Notes to the financial statements
1 Segmental analysis
The Group’s primary segment reporting is by business sector with geographical reporting being the secondary format. The business sectors
consist of Banking, Healthcare, Sesame and Group.
Revenue and operating profit (loss) by business
2006
all figures in £ millions Banking Healthcare Sesame Group Total
Revenue from continuing operations 266.6 316.7 370.0 – 953.3
Operating profit from continuing operations 22.3 45.4 (1.9) (10.0) 55.8
Net finance costs (16.3)
Profit before taxation 39.5
Taxation (13.5)
Profit for the year from continuing operations 26.0
Profit for the year from discontinued operations 187.1
Profit for the year 213.1
2005
all figures in £ millions Banking Healthcare Sesame Group Total
Revenue from continuing operations 245.0 290.5 319.2 – 854.7
Operating profit from continuing operations 40.9 42.6 (5.3) (6.4) 71.8
Net finance costs (10.5)
Profit from taxation 61.3
Taxation (14.7)
Profit for the year from continuing operations 46.6
Profit for the year from discontinued operations 15.8
Profit for the year 62.4
All revenue is derived from external customers.
Included within Banking operating profit are exceptional costs of £13.9m (2005: £nil), gains on embedded derivatives of £0.3m (2005: £nil)
and amortisation of acquired intangibles of £1.9m (2005: £0.3m). Included within Healthcare are exceptional costs of £2.0m (2005: £nil) and
amortisation of acquired intangibles of £0.5m (2005: £nil). Included in Sesame are exceptional costs of £10.5m (2005: £11.6m). Included
within Group are exceptional costs of £1.4m (2005: £nil).
Included within Group expenses is income of £nil (2005: £2.7m) arising on the disposal of the final one third of the warrants held in relation
to WebMD common stock.
Page 66 Misys plc Annual Report 2006

1 Segmental analysis (continued)
Other segment information
Continuing Discontinued 2006
all figures in £ millions Banking Healthcare Sesame Group operations operations Total
Net assets (liabilities)
Assets 146.2 236.5 116.9 33.1 532.7 – 532.7
Liabilities (147.1) (89.6) (128.4) (65.9) (431.0) – (431.0)
Net Group balances (25.9) (409.2) (227.7) 662.8 – – –
Net (debt) funds 34.2 6.8 96.4 (232.1) (94.7) – (94.7)
Capital investment
7.4 (255.5) (142.8) 397.9 7.0 – 7.0
Goodwill and acquired intangibles 25.1 28.9 – – 54.0 – 54.0
Developed software 10.4 4.0 – – 14.4 – 14.4
Other 5.0 2.8 0.3 0.3 8.4 0.2 8.6
Depreciation and amortisation
40.5 35.7 0.3 0.3 76.8 0.2 77.0
Acquired intangibles 1.9 0.5 – – 2.4 – 2.4
Developed software 3.0 2.0 – – 5.0 – 5.0
Other 5.4 3.7 0.9 0.5 10.5 0.2 10.7
10.3 6.2 0.9 0.5 17.9 0.2 18.1
Share-based payment charge 3.7 3.8 0.3 1.7 9.5 0.3 9.8
Employees (average) 2,537 2,771 786 54 6,148 308 6,456
Continuing Discontinued 2005
all figures in £ millions Banking Healthcare Sesame Group operations operations Total
Net assets (liabilities)
Assets 111.6 213.2 109.9 32.8 467.5 3.9 471.4
Liabilities (114.6) (79.5) (113.7) (95.8) (403.6) (8.4) (412.0)
Net Group balances 1.5 (423.8) (235.6) 629.5 (28.4) 28.4 –
Net (debt) funds 24.7 10.0 99.5 (364.2) (230.0) 11.2 (218.8)
Capital investment
23.2 (280.1) (139.9) 202.3 (194.5) 35.1 (159.4)
Goodwill and acquired intangibles 4.8 – – – 4.8 – 4.8
Developed software 5.0 6.2 – – 11.2 – 11.2
Other 5.8 2.6 1.2 0.6 10.2 0.3 10.5
Depreciation and amortisation
15.6 8.8 1.2 0.6 26.2 0.3 26.5
Acquired intangibles 0.3 – – – 0.3 – 0.3
Developed software 2.4 1.2 – – 3.6 – 3.6
Other 5.2 3.1 1.1 0.4 9.8 0.3 10.1
7.9 4.3 1.1 0.4 13.7 0.3 14.0
Share-based payment charge 3.7 4.7 0.3 1.5 10.2 0.2 10.4
Employees (average) 2,521 2,740 884 56 6,201 306 6,507
Capital investment comprises expenditure on goodwill, other intangible assets and property, plant and equipment.
Segment assets consist primarily of goodwill, other intangible assets, property, plant and equipment, and trade and other receivables
and exclude cash balances and intercompany receivables. Included within Group segment assets are amounts relating to corporation tax
recoverable and deferred tax assets. Segment liabilities consist primarily of trade and other payables and provisions and exclude bank
overdrafts, loans, loan notes, finance leases and intercompany payables. Included within Group segment liabilities are amounts relating
to corporation tax payable, deferred tax liabilities and retirement benefit obligations.
Page 67

Notes to the financial statements
continued
1 Segmental analysis (continued)
United Rest of Asia 2006
all figures in £ millions – continuing operations Kingdom Europe Pacific Americas Other Total
Revenue by destination 415.1 107.2 34.7 364.6 31.7 953.3
Assets by location of operations 216.9 24.2 7.1 273.0 11.5 532.7
Capital investment by location of operations 11.2 25.0 0.3 39.4 0.9 76.8
Employees (average) by location of operations 1,441 417 495 2,905 890 6,148
United Rest of Asia 2005
all figures in £ millions – continuing operations Kingdom Europe Pacific Americas Other Total
Revenue by destination 356.3 93.8 26.9 345.4 32.3 854.7
Assets by location of operations 183.2 24.8 4.7 246.9 7.9 467.5
Capital investment by location of operations 12.5 0.8 0.7 11.1 1.1 26.2
Employees (average) by location of operations 1,519 427 537 3,025 693 6,201
Excluded from the above analysis are the following items relating to discontinued operations: revenue by destination United Kingdom £30.2m
(2005: £32.3m), Rest of Europe £1.1m (2005: £1.4m); assets by location of operation United Kingdom £nil (2005: £3.9m); capital investment by
location of operation United Kingdom £0.2m (2005: £0.3m) and employees by location of operation United Kingdom 307 (2005: 303), Rest of
Europe 1 (2005: 3).
all figures in £ millions – continuing operations Banking Healthcare Sesame
2006
Total
Initial licence fees 83.6 57.1 3.3 144.0
Maintenance 121.6 123.2 1.4 246.2
Transaction processing 11.6 70.4 364.9 446.9
Professional services 49.6 34.2 0.4 84.2
Hardware 0.2 31.8 – 32.0
266.6 316.7 370.0 953.3
all figures in £ millions – continuing operations Banking Healthcare Sesame
2005
Total
Initial licence fees 72.1 56.6 – 128.7
Maintenance 115.5 108.6 2.8 226.9
Transaction processing 9.3 65.1 310.0 384.4
Professional services 47.8 29.6 6.4 83.8
Hardware 0.3 30.6 – 30.9
245.0 290.5 319.2 854.7
2 Exceptional items
all figures in £ millions 2006 2005
Profit on disposal of associate 8.0 –
Loss on disposal of businesses (2.8) (2.7)
Estimated costs and redress payments associated with regulatory reviews and endowment complaints (15.7) (8.9)
Restructuring programme (13.9) –
Acquisition integration costs (2.0) –
Discontinued disposal costs (1.4) –
Exceptional items within continuing operations (27.8) (11.6)
Profit on disposal of operations (note 4) 171.9 –
Total exceptional items before taxation 144.1 (11.6)
Taxation on exceptional items within continuing operations 1.6 –
Total exceptional items after taxation 145.7 (11.6)
Page 68 Misys plc Annual Report 2006

2 Exceptional items (continued)
Profit on disposal of associate
The profit on disposal of £8.0m in the current period relates to the disposal of the 29% investment in First Software (UK) Limited. There is no
tax impact in respect of this item recognised within the taxation charge. There was a cash inflow, net of expenses, of £8.6m (2005: £nil) in
respect of this item in the year.
Loss on disposal of businesses
The loss on disposal of £2.8m (2005: £2.7m) relates to the disposal of the 60% holding in AssureWeb Limited on 7 July 2005, with the charge
being made in 2005 in respect of the impairment of assets on the impending sale of this business. There is no tax impact in respect of this
item recognised within the taxation charge. There was a cash inflow, net of expenses, of £2.7m (2005: £nil) in respect of this item in the year.
Estimated costs and redress payments associated with regulatory reviews and endowment complaints
The exceptional charge of £15.7m (2005: £8.9m) relates to the estimated costs and redress payments in respect of endowment complaints that
have been received during the year and are anticipated in the future, arising from a regulatory review of structured capital at risk products and
from a former network member review. There is no tax impact in respect of this item recognised within the taxation charge. There was a cash
outflow of £13.5m (2005: £0.2m) in respect of these items in the year. These are described more fully in note 26.
Restructuring programme
The exceptional charge of £13.9m (2005: £nil) relates to restructuring within Banking. These costs consist principally of redundancy costs,
onerous contract costs and the write off of developed software. A tax credit of £0.8m (2005: £nil) has been recognised in respect of this item,
within the taxation charge. There was a cash outflow of £3.8m (2005: £nil) in respect of this item in the year.
Acquisition integration costs
The exceptional charge of £2.0m (2005: £nil) relates to the costs associated with the integration of the acquisitions made in the second half.
These costs consist principally of redundancy and onerous contract costs. A tax credit of £0.8m (2005: £nil) has been recognised in respect of
this item within the taxation charge. There was a cash outflow of £0.5m (2005: £nil) in respect of this item in the year.
Discontinued disposal costs
The exceptional charge of £1.4m (2005: £nil) relates to costs incurred in the potential sale process of Sesame which was terminated during
the year. There is no tax impact in respect of this item recognised within the taxation charge. There was a cash outflow of £1.4m (2005: £nil)
in respect of this item in the year.
3 Operating costs
all figures in £ millions – continuing operations 2006 2005
Cost of sales 665.7 580.5
Occupancy costs 40.9 39.1
Sales and marketing costs 69.4 62.8
Administrative expenditure 59.6 65.4
Other operating charges 34.1 23.5
Exceptional items (note 2) 27.8 11.6
897.5 782.9
Included within operating costs from continuing operations are the following items:
all figures in £ millions – continuing operations 2006 2005
Research and development expenditure 89.7 86.8
Capitalisation of developed software (14.4) (11.2)
75.3 75.6
Amortisation of developed software 5.0 3.6
Amortisation of other intangible assets 4.1 1.7
Depreciation of property, plant and equipment 8.8 8.4
Impairment of assets – 2.7
Loss (profit) on disposal of property, plant and equipment 0.3 (0.4)
Operating lease costs – land and buildings 16.3 15.5
– plant and machinery 1.2 1.2
Remuneration of auditors for Group audit services 1.5 1.0
Other fees paid to auditors 1.9 0.9
Other fees paid to auditors principally includes work such as international corporation and sales tax advice of £0.6m (2005: £0.7m),
the transition to IFRS of £0.5m (2005: £0.1m) and other transactions advisory related work of £0.8m (2005: £0.1m).
Page 69

Notes to the financial statements
continued
4 Discontinued operations
all figures in £ millions 2006 2005
Revenue 31.3 33.7
Operating costs (16.1) (17.9)
Profit for the year 15.2 15.8
Profit on disposal of operations 171.9 –
Profit for the year from discontinued operations 187.1 15.8
On 5 May 2006, the Group sold the General Insurance business. Further information is provided in note 17.
Cash flows from discontinued operations
all figures in £ millions 2006 2005
Net cash flows from operating activities 13.8 16.1
Net cash flows from investing activities 169.5 0.3
Net cash flows from financing activities – –
5 Share-based payments
During the period ended 31 May 2006, the following material share-based payment arrangements existed:
Page 70 Misys plc Annual Report 2006
183.3 16.4
2006 2005
Options Fair value Options Fair value Contractual
granted per share granted per share life
‘000 £ ‘000 £ Years
Long Term Incentive Plan 832 1.45 1,162 1.26 (i) 8
Misys 1998 Unapproved Share Option Plan (Type I) 832 1.10 1,062 0.93 10
Misys 2000 Share Option Plan (Type III) – – 9,249 0.93 7 or 10
Misys Share Award Plan 2,441 2.14 (i) – – 10
Annual Award Plan – – 1,691 1.62 7
Misys Senior Executive Bonus Plan 888 2.07 – – 5
Sharesave (UK) 338 0.86 1,000 0.96 3
Sharesave (non UK) 119 0.86 245 1.22 3
(i) Where several grants were made in the year, the weighted average fair value has been provided.
Details of the Long Term Incentive Plan (‘LTIP’), the Misys Senior Executive Bonus Plan (‘MSEBP’) and the Misys 1998 Unapproved Share
Option Plan (Type I) are shown in the Directors’ remuneration report.
In the year ended 31 May 2005, grants of options under the Misys 2000 Share Option Plan (Type III) were awarded to senior managers throughout
the Group at the market value ruling on the date of grant. In the year ended 31 May 2006, grants under the Misys Share Award Plan (‘MSAP’) were
made to senior managers at nil cost.
In the year ended 31 May 2005, awards under the Annual Award Plan (‘AAP’) were made to Directors and certain senior managers. The nil cost
award comprised three elements: an Annual Award of shares which related to the executives’ bonus payment. These shares were beneficially
owned at grant but were placed in trust for two years. Deferred and Matching Awards of shares were granted at nil cost and vested after two years.
The Sharesave Schemes provide for a yearly award of options at a discount to the market price and are eligible to all Group employees.
In the tables below similar share-based payment arrangements have been aggregated as follows:
• Share option schemes – nil cost: includes LTIP, MSAP, AAP and MSEBP.
• Share option schemes – market value: includes Type I and Type III.
• Savings-related share option schemes: includes the Sharesave (UK) and Sharesave (non UK) schemes.
Share-based payment charges
Share-based payment charges are calculated by spreading the fair value of an option over the vesting period having taken into account any
performance conditions.
The vesting period is typically three years from date of grant or the beginning of the bonus year in respect of grants under the AAP and the
MSEBP.

5 Share-based payments (continued)
All options are valued using the Black-Scholes option pricing model except grants under the LTIP which use the Monte Carlo option pricing model.
The following assumptions have been used in the option pricing models:
2006 2005 2004
Risk-free interest rate % 4.1 – 4.2 4.9 – 5.3 3.5 – 4.5
Dividend yield %
Volatility
3.3 2.6 2.9
(i) of Misys plc ordinary shares %
Share option schemes – nil cost 47 82 70
Share option schemes – market value 61 66 – 67 54 – 66
Savings-related share option schemes
Expected lives (years) of options granted
47 82 70
Share option schemes – nil cost (excluding LTIP) 3 3 3
Share option schemes – market value 6.5 4.5 – 6.5 4.5 – 6.5
Savings-related share option schemes 3 3 3
The following additional assumptions have been used for the Monte Carlo option pricing model:
2006 2005 2004
Volatility (i) of the top 30 Techmark companies % 44 51 54
Correlation coefficient (ii) 0.16 0.19 0.18
Expected lives (years) of options granted under LTIP 3 4 4
(i) Expected volatility was calculated using the share price history for the period equivalent to the expected life.
(ii) The share price correlation between the top 30 Techmark companies was determined by the historical correlation of the share price movements over the same period
as the volatility.
Both models incorporate the share price at the date of grant. The weighted average share price for options granted during the year was
£2.35 (2005: £1.86; 2004: £2.52).
Options outstanding
At 31 May 2006, options and awards outstanding, and a reconciliation of movements between balance sheet dates is shown in respect of the
Company’s ordinary shares of 1p each under the following schemes:
Share option schemes – Share option schemes – Savings-related
nil cost market value share option schemes
Weighted Weighted Weighted Weighted Weighted
Number fair value Number exercise fair value Number exercise fair value
‘000 £ ‘000 price £ £ ‘000 price £ £
At 1 June 2003 5,879 30,216 3.26 4,976 2.32
Options granted 2,347 2.14 17,576 2.50 1.16 2,093 2.14 1.27
Options exercised (1,833) (1,261) 1.55 (109) 1.55
Options lapsed or expired (726) (4,956) 3.71 (1,361) 2.70
At 31 May 2004 5,667 41,575 2.94 5,599 2.18
Options granted 2,853 1.45 10,311 1.90 0.93 1,245 1.48 1.01
Options exercised (1,439) (759) 1.64 (1,808) 2.10
Options lapsed or expired (1,728) (9,929) 2.91 (1,527) 2.33
At 31 May 2005 5,353 41,198 2.71 3,509 1.90
Options granted 4,161 1.99 832 2.35 1.10 457 1.89 0.86
Options exercised (1,112) (2,261) 1.91 (460) 1.71
Options lapsed or expired (1,706) (7,322) 2.35 (672) 2.39
At 31 May 2006 6,696 32,447 2.84 2,834 1.82
Range of exercise prices – £1.56 – £10.55 £1.40 – £8.11
Weighted average remaining life 7.1 years 4.4 years 1.1 years
The average share price during the year ended 31 May 2006 was £2.22.
Page 71

Notes to the financial statements
continued
5 Share-based payments (continued)
The outstanding nil cost share options and awards at 31 May 2006 include 214,129 (2005: 505,777) shares held by the Trustee to the sole
benefit of the participants.
Weighted average exercise information is excluded for nil cost schemes.
Options outstanding at 31 May 2006 are further analysed as follows:
Share option schemes – Share option schemes – Savings-related
nil cost market value share option schemes
Latest Weighted Latest Weighted Latest
Grant Number exercise Number exercise exercise Number exercise exercise
Year ended 31 May ‘000 date ‘000 price £ date ‘000 price £ date
1997 – – 328 2.26 01/04/07 – – –
1998 – – 329 3.40 11/02/08 – – –
1999 – – 692 4.35 14/04/09 – – –
2000 – – 672 5.42 16/02/10 25 4.50 01/10/06
2001 – – 2,470 6.57 08/10/10 4 5.35 01/10/07
2002 61 08/10/08 4,781 3.36 22/11/11 427 2.34 01/10/08
2003 58 24/07/09 3,155 1.99 02/02/13 320 1.54 01/05/08
2004 986 11/11/11 11,176 2.49 11/11/13 607 1.98 01/05/09
2005 1,946 28/07/12 8,106 1.90 08/05/15 1,037 1.49 01/07/08
2006 3,645 09/02/16 738 2.35 27/07/15 414 1.90 01/07/09
At 31 May 2006 6,696 32,447 2.84 2,834 1.82
Options exercisable
At the balance sheet date the following options and awards had vested:
Share option schemes – Share option schemes – Savings-related
nil cost market value share option schemes
Weighted Weighted
Number Number exercise Number exercise
At 31 May ‘000 ‘000 price £ ‘000 price £
2004 446 17,016 3.55 150 4.63
2005 257 21,401 3.31 160 4.58
2006 267 18,097 3.31 107 2.50
6 Directors and employees
Directors’ remuneration
Details of the Directors’ remuneration are given in the Directors’ remuneration report.
Employee costs
all figures in £ millions 2006 2005
Wages and salaries 261.5 248.5
Social security costs 23.6 22.3
Pension costs 12.5 12.9
297.6 283.7
Included in the above are total employee costs of £10.3m (2005: £10.0m) in respect of discontinued operations.
Page 72 Misys plc Annual Report 2006

7 Finance costs
all figures in £ millions 2006 2005
Bank loans and overdraft interest payable (19.3) (6.9)
Interest on listed bonds – (6.2)
Amortisation of issue costs on financing (0.5) (0.1)
Other interest payable (0.1) (0.2)
Expected return on pension scheme assets (note 29) 2.1 2.0
Interest on pension scheme liabilities (note 29) (1.9) (1.9)
Unwinding of discount on provisions (1.7) (1.2)
Finance costs (21.4) (14.5)
Bank interest receivable 4.2 3.8
Unwinding of discount on receivables 0.7 0.2
Exchange gains or losses on debt previously hedging goodwill written off to reserves (note 37) 0.2 –
Finance income 5.1 4.0
Net finance costs (16.3) (10.5)
8 Taxation
all figures in £ millions 2006 2005
UK corporation tax at 30% 1.9 3.1
UK prior year items – (2.4)
Overseas taxation 10.0 11.7
Overseas prior year items (1.4) (0.2)
Irrecoverable withholding taxes 0.3 1.8
Current taxation (including tax relating to exceptional items) 10.8 14.0
Deferred taxation (note 27) 2.7 0.7
Included within current taxation is a £1.6m credit (2005: £nil) in respect of tax on exceptional items.
13.5 14.7
The taxation charge for the current and prior year is lower than the standard rate of UK corporation tax based on profit before taxation for the
following reasons:
all figures in £ millions 2006 2005
Profit on ordinary activities before taxation 226.6 77.1
Tax on profit on ordinary activities at the standard rate of UK tax of 30%
Effects of:
68.0 23.1
Permanent differences (primarily exemption on disposal of investments) (57.8) (2.5)
Profits arising overseas which are subject to rates of tax other than the UK standard rate (8.4) (13.8)
Effects of temporary differences on which deferred tax is not recognised 13.1 9.3
Adjustments to UK taxation charge in respect of prior periods – (2.4)
UK and overseas research and development tax credits (0.3) (0.6)
Adjustments to overseas taxation charge in respect of prior periods (1.4) (0.2)
Irrecoverable withholding tax 0.3 1.8
13.5 14.7
As a UK reporting entity, Misys plc is UK tax resident and therefore the applicable rate for the reconciliation is considered to be the standard
rate of UK tax of 30%.
Page 73

Notes to the financial statements
continued
9 Equity dividends
all figures in £ millions 2006 2005
Amounts recognised as distributions to equity holders in the period
Interim dividend for the year ended 31 May 2006 of 2.69p per share 13.0 –
Final dividend for the year ended 31 May 2005 of 4.28p per share 20.7 –
Interim dividend for the year ended 31 May 2005 of 2.56p per share – 12.8
Final dividend for the year ended 31 May 2004 of 4.08p per share – 20.7
Proposed final dividend for the year ended 31 May 2006 of 4.49p per share 21.4
The proposed final dividend of 4.49p (2005: 4.28p) together with the interim dividend of 2.69p (2005: 2.56p) totals 7.18p (2005: 6.84p).
Page 74 Misys plc Annual Report 2006
33.7 33.5
Dividends amounting to £1.6m (2005: £1.6m) in respect of the Company’s shares held by employee share trusts have been deducted in arriving
at the amounts recognised and proposed as distributions to equity holders.
10 Earnings per share
Earnings per share (‘EPS’) have been calculated in accordance with IAS 33 ‘Earnings Per Share’ by dividing profit attributable to shareholders
by the weighted average number of shares in issue during the period.
Adjusted basic and adjusted diluted EPS are presented to provide more comparable and representative information. Accordingly, the adjusted basic
and adjusted diluted EPS figures exclude exceptional items, gains and losses on embedded derivatives, amortisation of acquired intangibles and
exchange gains or losses on debt previously hedging goodwill written off to reserves. Where applicable, all items below are shown net of taxation.
all figures in £ millions 2006 2005
Profit attributable to shareholders 213.1 62.0
Exceptional items after taxation (note 2) (145.7) 11.6
Gains and losses on embedded derivatives after taxation (0.2) –
Amortisation of acquired intangibles 2.4 0.3
Exchange gains or losses on debt previously hedging goodwill written off to reserves (0.2) –
Adjusted profit attributable to shareholders 69.4 73.9
Profit for the year from discontinued operations 187.1 15.8
pence pence
Basic earnings per share 44.0 12.4
Diluted earnings per share 43.6 12.3
Adjusted basic earnings per share 14.3 14.8
Adjusted diluted earnings per share 14.2 14.7
Basic earnings per share from discontinued operations 38.7 3.2
Diluted earnings per share from discontinued operations 38.3 3.1
The weighted average numbers of basic and diluted shares in issue during the period were 484.1m and 488.4m respectively (2005: 499.5m
and 505.8m). Dilution arises principally as a result of outstanding share options.
11 Net interest paid
all figures in £ millions 2006 2005
Interest received 4.2 4.0
Bank loans and overdraft interest paid (19.6) (4.5)
Interest on listed bonds – (7.8)
Facility arrangement fees – (1.3)
Other interest paid – (0.2)
Net cash flow from interest paid (15.4) (9.8)

12 Acquisitions and disposals of businesses
all figures in £ millions 2006 2005
Cash consideration paid in respect of current year acquisitions (including expenses) (55.3) (4.9)
Cash consideration paid in respect of prior years’ acquisitions (0.2) (5.0)
Cash consideration received in respect of current year disposals (net of expenses) 191.3 –
Cash consideration received in respect of prior year disposals – 0.2
Cash at bank and in hand acquired 4.2 1.0
Cash at bank and in hand disposed of (21.0) –
Net cash flow from acquisitions and disposals 119.0 (8.7)
13 Other capital expenditure and financial investment
all figures in £ millions 2006 2005
Purchase of property, plant and equipment (5.5) (8.1)
Purchase of third party software (2.0) (1.3)
Purchase of investments (0.8) (0.6)
Sale of property, plant and equipment – 1.0
Net cash flow from other capital expenditure and financial investment (8.3) (9.0)
14 Financing activities
all figures in £ millions 2006 2005
Dividends paid (33.7) (33.5)
(Decrease) increase in borrowings (note 15) (111.6) 23.2
Capital element of finance leases (1.3) (1.0)
Payments for the purchase of own shares (25.3) (52.9)
Share options exercised 5.2 3.7
Net cash flow from financing activities (166.7) (60.5)
15 Movement in borrowings
all figures in £ millions 2006 2005
Reduction in funds placed on interest bearing deposit – 45.0
Receipt of funds in respect of cross currency swaps – 43.9
Repayment of listed bonds – (318.7)
Net movements on listed bonds – (229.8)
Repayment of bank loans (391.0) (49.7)
Receipt of bank loans 280.6 304.1
Repayment of loan notes (1.1) (1.4)
Repayment of other loans (0.1) –
(Decrease) increase in borrowings (111.6) 23.2
Page 75

Notes to the financial statements
continued
16 Analysis of net debt
Acquisitions Other Differences
At 1 June (excluding non cash on At 31 May
all figures in £ millions 2005 Cash flow cash) changes exchange 2006
Cash 101.6 15.4 – – 0.2 117.2
Bank overdraft – (9.5) – – – (9.5)
Page 76 Misys plc Annual Report 2006
101.6 5.9 – – 0.2 107.7
Bank loan (316.2) 110.4 – (0.3) 7.1 (199.0)
Other loans – 0.1 (0.1) – – –
Loan notes (2.1) 1.1 – (0.2) – (1.2)
Finance leases (2.1) 1.3 (0.3) (1.1) – (2.2)
Net debt (218.8) 118.8 (0.4) (1.6) 7.3 (94.7)
Within the regulated business of Sesame are cash balances of £71.7m (2005: £59.5m) subject to certain restrictions over their use. In addition
to these amounts, there are cash balances of £2.3m (2005: £1.2m) not available for the general use of the Group.
17 Goodwill
all figures in £ millions 2006 2005
Cost and net book value at 1 June 216.3 212.6
Differences on exchange (5.7) 0.7
Additions through business combinations completed in the current year 32.9 –
Additions through business combinations completed in the prior year 0.4 3.0
Disposals (2.8) –
Cost and net book value at 31 May 241.1 216.3
Significant cash generating units
The goodwill held in the Hospital Systems and Sesame cash generating units (‘CGUs’), being £141.7m and £35.7m respectively, are considered
significant in comparison to the total carrying amounts of goodwill assets at 31 May 2006.
At 31 May 2006 impairment reviews of the carrying value of these assets were conducted. The value in use of each of these assets was
determined from the present value of the future cash flows. Discount rates of 11.5% and 14% respectively were used.
The following key assumptions were used in the discounted cash flow projections for the Hospital Systems CGU:
• a longer-term sustainable growth rate of 3%, used to determine an appropriate terminal value multiple;
• average near-term nominal growth for the major products within the CGU of 8%; and
• average operating margins of 15%.
The growth rates and margins used to estimate future performance are based on past performance and the experience of growth rates and
margins achievable in the US Healthcare markets as a guide. The assumptions used in estimating the future performance of the Hospital
Systems CGU are consistent with past performance.
The following key assumptions were used in the discounted cash flow projections for the Sesame CGU:
• a longer-term sustainable growth rate of 2.5%, used to determine an appropriate terminal value multiple;
• average near-term nominal growth for the major products within the CGU of 4%; and
• average operating margins on net revenue of 9%.
The growth rates and margins used to estimate future performance are based on past performance and the experience of growth rates and
margins achievable in the UK mortgage and investment markets as a guide. The assumptions used in estimating the future performance of
the Sesame CGU are consistent with past performance as well as the expectations arising from the change of the business model over time,
brought about by the launch of Sesame Select.
The projections of both covered a period of 10 years as it is considered that this is a suitable time period over which to review and consider
annual performance, before applying a fixed terminal value multiple to the final year cash flows of the detailed projection.
The growth rates used to estimate future performance beyond the periods covered by the annual and strategic planning processes do not
exceed the long-term average growth rates for similar products.
Sensitivity analysis around the base case assumptions have been performed and it has been concluded that no reasonably possible changes
in key assumptions would cause the carrying amount of the Hospital Systems and Sesame CGUs to exceed their recoverable amounts.

17 Goodwill (continued)
Current year acquisitions
Within Banking, the Group completed three acquisitions, which created goodwill of £12.6m. Almonde Inc was acquired on 10 July 2005 for
a cash consideration, including acquisition expenses, of £11.0m. INTESIO GmbH was acquired on 10 February 2006 for a cash consideration,
including acquisition expenses, of £7.6m. NEOMAlogic SARL was acquired on 24 March 2006 for a cash consideration, including acquisition
expenses, of £10.6m. In each case 100% of the share capital was acquired. Prior to acquisition, Misys acted as an agent for Almonde and there
are no incremental revenues; and the operating loss since acquisition was £0.4m. The remaining two acquisitions contributed £1.5m revenue
and £0.6m operating profit in the period since acquisition.
Within Healthcare, the Group completed two acquisitions, which created goodwill of £20.3m. Payerpath Inc was acquired on 30 January 2006
for a cash consideration, including acquisition expenses, of £28.0m. Other assets within the physicians market were acquired on 1 March 2006
for a cash consideration, including acquisition expenses, of £2.5m. In each case 100% of the share capital was acquired. In the period since
acquisition, they have contributed revenue of £2.3m and operating losses of £2.8m, of which £2.0m has been treated as an exceptional item.
An analysis of the aggregate net assets acquired for all acquisitions in the year is shown below since no single acquisition is material to the Group.
Book Fair value Fair
all figures in £ millions value adjustment value
Intangible assets 0.2 20.6 20.8
Property, plant and equipment 0.9 – 0.9
Deferred tax assets – 4.9 4.9
Cash 4.2 – 4.2
Other assets 3.3 (0.2) 3.1
Other liabilities (6.4) (0.7) (7.1)
Net assets acquired 2.2 24.6 26.8
Goodwill 32.9
Total consideration 59.7
Total consideration includes directly attributable expenses of £1.8m and deferred consideration of £4.4m. The fair value adjustments contain
provisional amounts which will be finalised within 12 months of acquisition.
Prior year acquisitions
Additions to goodwill in the year include further contingent consideration of £0.4m in respect of IDOM Consulting (UK) Limited.
Current year disposals
On 5 May 2006 the Group disposed of its shareholding in a number of companies comprising the General Insurance business for a total cash
consideration of £183.0m, realising a profit on disposal £171.9m. This business has been classified as a discontinued operation as required
under IFRS 5.
On 7 July 2005 the Group disposed of its 60% shareholding in AssureWeb Limited for a total cash consideration of £3.0m, realising a loss on
disposal of £2.8m. This has been disclosed as an exceptional item.
On 5 August 2005 the Group disposed of its 29% investment in First Software (UK) Limited for a total cash consideration of £8.6m, realising
a profit on disposal of £8.0m. This has been disclosed as an exceptional item.
General First
all figures in £ millions Insurance AssureWeb Software Total
Proceeds on disposal, net of expenses 180.0 2.7 8.6 191.3
Cash at bank and in hand disposed of (10.7) (10.3) – (21.0)
Share of other net liabilities (assets) disposed of 2.6 7.2 (0.2) 9.6
Goodwill written off – (2.4) (0.4) (2.8)
Profit (loss) on disposal 171.9 (2.8) 8.0 177.1
Page 77

Notes to the financial statements
continued
18 Other intangible assets
Customer Trade Total Third
Complete relation- names and acquired Developed party
all figures in £ millions technology ships brands intangibles software software Total
Cost
At 1 June 2005 1.8 – – 1.8 24.6 10.8 37.2
Differences on exchange (0.2) (0.2) – (0.4) (0.7) (0.2) (1.3)
On acquisition of subsidiary undertakings 16.1 4.2 0.4 20.7 – 0.1 20.8
On disposal of subsidiary undertakings – – – – – (0.1) (0.1)
Additions – – – – 14.4 2.0 16.4
Disposals – – – – (5.9) (0.5) (6.4)
At 31 May 2006 17.7 4.0 0.4 22.1 32.4 12.1 66.6
Amortisation and impairment
At 1 June 2005 (0.3) – – (0.3) (6.2) (8.3) (14.8)
Differences on exchange – – – – 0.2 0.2 0.4
Charge for the year (2.2) (0.2) – (2.4) (5.0) (1.7) (9.1)
On disposal of subsidiary undertakings – – – – – 0.1 0.1
Disposals – – – – 3.3 0.5 3.8
At 31 May 2006 (2.5) (0.2) – (2.7) (7.7) (9.2) (19.6)
Net book value
At 31 May 2006 15.2 3.8 0.4 19.4 24.7 2.9 47.0
Customer Trade Total Third
Complete relation- names and acquired Developed party
all figures in £ millions technology ships brands intangibles software software Total
Cost
At 1 June 2004 – – – – 13.3 11.9 25.2
Differences on exchange – – – – 0.1 0.1 0.2
On acquisition of subsidiary undertakings 1.8 – – 1.8 – – 1.8
Additions – – – – 11.2 1.3 12.5
Disposals – – – – – (2.5) (2.5)
At 31 May 2005 1.8 – – 1.8 24.6 10.8 37.2
Amortisation and impairment
At 1 June 2004 – – – – (2.6) (9.2) (11.8)
Differences on exchange – – – – – (0.1) (0.1)
Charge for the year (0.3) – – (0.3) (3.6) (1.4) (5.3)
Disposals – – – – – 2.4 2.4
At 31 May 2005 (0.3) – – (0.3) (6.2) (8.3) (14.8)
Net book value
At 31 May 2005 1.5 – – 1.5 18.4 2.5 22.4
Page 78 Misys plc Annual Report 2006

19 Property, plant and equipment
Computer
Freehold Leasehold and other
all figures in £ millions properties properties equipment Total
Cost
At 1 June 2005 4.7 7.0 52.7 64.4
Differences on exchange – (0.2) (0.8) (1.0)
On acquisition of subsidiary undertakings – – 0.9 0.9
On disposal of subsidiary undertakings (1.6) – (3.7) (5.3)
Additions – 1.3 5.3 6.6
Disposals – (0.2) (2.4) (2.6)
At 31 May 2006 3.1 7.9 52.0 63.0
Depreciation
At 1 June 2005 (0.6) (3.8) (37.6) (42.0)
Differences on exchange – 0.2 0.7 0.9
Charge for the year (0.1) (1.0) (7.9) (9.0)
On disposal of subsidiary undertakings – – 2.8 2.8
Disposals – 0.2 2.1 2.3
At 31 May 2006 (0.7) (4.4) (39.9) (45.0)
Net book value
At 31 May 2006 2.4 3.5 12.1 18.0
Computer
Freehold Leasehold and other
all figures in £ millions properties properties equipment Total
Cost
At 1 June 2004 5.1 5.3 55.9 66.3
Differences on exchange – 0.1 0.4 0.5
On acquisition of subsidiary undertakings – – 0.1 0.1
Additions – 1.7 7.5 9.2
Disposals (0.4) (0.1) (11.2) (11.7)
At 31 May 2005 4.7 7.0 52.7 64.4
Depreciation
At 1 June 2004 (0.4) (2.4) (41.1) (43.9)
Differences on exchange – (0.1) (0.3) (0.4)
Charge for the year (0.2) (1.4) (7.1) (8.7)
Disposals – 0.1 10.9 11.0
At 31 May 2005 (0.6) (3.8) (37.6) (42.0)
Net book value
At 31 May 2005 4.1 3.2 15.1 22.4
Included in the above analysis is plant and equipment acquired under finance leases, with a net book value of £2.2m (2005: £2.0m) after
accumulated depreciation of £2.2m (2005: £1.8m). The net book value of leasehold properties comprises long leasehold £0.1m (2005: £0.3m)
and short leasehold £3.4m (2005: £2.9m).
Included within additions for the year is £0.2m (2005: £0.3m) and within the depreciation charge for the year is £0.2m (2005: £0.3m) in respect
of discontinued operations.
Page 79

Notes to the financial statements
continued
20 Investments
all figures in £ millions 2006 2005
At 1 June 4.1 3.5
Additions 0.8 0.6
Disposals (0.2) –
Movements in fair value (0.9) –
At 31 May 3.8 4.1
The Group investments primarily comprise investments in US and European technology funds held at fair value with adjustments taken through the
income statement. The investments are denominated in US dollars and euros and are non interest bearing. No market exists for trading in these
funds and they are held for long-term growth. The Group has entered into agreements, whereby these funds can be drawn down to invest in start
up and early stage companies in the Information Technology sector. A total of £0.8m of this commitment remains undrawn at 31 May 2006.
21 Trade and other receivables
all figures in £ millions 2006 2005
Trade receivables 87.1 83.2
Less: provision for impairment of receivables (14.2) (10.1)
72.9 73.1
Other receivables 50.1 47.7
Prepayments 15.5 14.0
Contract work in progress 9.5 11.8
Accrued income 27.7 20.2
Current trade and other receivables 175.7 166.8
Other receivables 15.0 13.6
Accrued income 2.5 –
Non current trade and other receivables 17.5 13.6
Total trade and other receivables 193.2 180.4
Other receivables include amounts recoverable in Sesame from members and insurers (note 26).
22 Trade and other payables
all figures in £ millions 2006 2005
Trade payables 26.8 29.4
Other taxation and social security 7.9 10.0
Other payables 23.5 17.9
Accruals 95.6 80.4
Current trade and other payables 153.8 137.7
Other payables 1.4 0.8
Accruals 2.3 1.2
Non current trade and other payables 3.7 2.0
Total trade and other payables 157.5 139.7
Accruals comprise:
all figures in £ millions 2006 2005
Cost of sales (excluding staff related costs) 28.7 19.2
Staff related costs (including sales commissions and bonuses) 47.2 42.0
Other 22.0 20.4
97.9 81.6
Page 80 Misys plc Annual Report 2006

23 Loans and overdrafts
all figures in £ millions 2006 2005
Bank overdrafts 9.5 –
Loan notes 1.2 2.1
Finance leases 1.1 1.0
Current loans and overdrafts 11.8 3.1
Bank loans 199.0 316.2
Finance leases 1.1 1.1
Non current loans and overdrafts 200.1 317.3
Total loans and overdrafts 211.9 320.4
During the year to May 2005 the Group negotiated a new $850m revolving credit facility with a syndicate of banks. The facility comprised one
tranche of $585m which will mature not later than March 2010 and a second tranche of $265m which was originally scheduled to mature not later
than March 2007. During the year to May 2006 the maturity of this second tranche was extended and it will now mature not later than March 2008.
Bank loans
At 31 May 2006 the bank loans drawn down under the facility comprise £154.0m denominated in US dollars and £45.0m in sterling, which bore
interest at 5.68% and an average of 5.52% respectively. All bank loans are unsecured.
Arrangement fees of £1.3m in respect of the $850m facility were included in the original carrying value of the loan. During the year to May
2006 further arrangement fees of £0.2m were incurred. These costs are amortised in the income statement over the expected term of the
facility. The amount of unamortised facility arrangement fees at 31 May 2006 is £0.8m.
The facility is guaranteed by Misys plc and certain other companies within the Group.
The Group is subject to certain financial covenants on its bank loans: these include a minimum ratio of operating profit, before depreciation and
amortisation to net interest; and a maximum ratio of net debt to operating profit, before depreciation and amortisation.
24 Derivative financial instruments
All derivative financial instruments are measured at their fair value and are calculated by reference to the net present value of future cash flows,
based on exchange rates and interest rates quoted in international financial markets at the balance sheet date.
31 May 2006 1 June 2005
all figures in £ millions Assets Liabilities Assets Liabilities
Interest rate swaps 0.1 – – –
Forward foreign currency contracts 0.8 (0.6) 0.9 (1.5)
Embedded derivatives 0.6 (2.6) 1.0 (3.2)
Analysed as follows:
1.5 (3.2) 1.9 (4.7)
Current 1.0 (0.7) 1.3 (2.1)
Non current 0.5 (2.5) 0.6 (2.6)
1.5 (3.2) 1.9 (4.7)
Derivative financial instruments at 1 June 2005 are shown on the adoption of IAS 39 ‘Financial Instruments: Recognition and Measurement’.
Forward currency contracts used to hedge fair value and cash flow risks
Financial assets and liabilities, which are denominated in currencies other than those of the functional currencies of the entities concerned,
are hedged using forward currency contracts. Gains and losses on these contracts are recorded in the income statement where they are offset
by compensating gains and losses on the underlying items.
The Group also uses forward currency contracts to hedge the cash flow risk on contractually committed future cash flows. Where the amounts
are material, the hedge accounting provisions of IAS 39 are adopted and gains and losses on these contracts are held in equity until they
mature, when they are transferred to the income statement. Where the hedge accounting provisions of IAS 39 are not adopted, gains and
losses are recognised immediately in the income statement. Gains and losses held in equity on forward currency contracts as of 31 May 2006
will be released to the income statement at various dates up to one year from the balance sheet date.
Embedded derivatives
Certain long-term software licencing contracts are priced in currencies other than those of the functional currencies of the entities entering
into the contracts (usually US dollars, pounds sterling or euros). Under IAS 39, such contracts may contain an embedded foreign currency
derivative which must be extracted from the host contract and measured separately at each balance sheet date. Gains or losses on these
derivatives are charged or credited to the income statement. The contracts are generally of up to 10 years’ duration, and this is therefore the
period over which the assets and liabilities are expected to crystallise.
Page 81

Notes to the financial statements
continued
25 Financial instruments
Financial liabilities
The interest rate and maturity profile of the Group’s financial liabilities are as follows:
At 31 May 2006
Page 82 Misys plc Annual Report 2006
Weighted
Weighted average
average Weighted period
Non interest average for non
Floating Fixed interest rate on period for interest
rate rate bearing fixed rate which rate bearing
Total liabilities liabilities liabilities liabilities is fixed liabilities
£m £m £m £m % Years Years
Denominated in sterling 150.8 55.7 71.3 23.8 5.0 4.2 1.0
Denominated in US dollars 156.0 154.0 1.9 0.1 5.5 1.5 0.5
Denominated in euros 4.9 – 4.9 – 3.0 4.3 –
311.7 209.7 78.1 23.9
Due within one year 76.2 10.7 42.1 23.4
Due within one to two years 19.7 – 19.2 0.5
Due within two to five years 211.9 199.0 12.9 –
Due after more than five years 3.9 – 3.9 –
At 31 May 2005
311.7 209.7 78.1 23.9
Denominated in sterling 153.9 65.9 60.0 28.0 4.8 4.7 1.5
Denominated in US dollars 254.1 252.4 1.6 0.1 5.5 1.4 0.5
408.0 318.3 61.6 28.1
Due within one year 61.2 2.1 33.8 25.3
Due within one to two years 15.6 – 14.5 1.1
Due within two to five years 326.8 316.2 9.0 1.6
Due after more than five years 4.4 – 4.3 0.1
408.0 318.3 61.6 28.1
In both years the carrying value of the Group’s financial liabilities are equal to their fair value.
Floating rate liabilities comprise bank loans, overdrafts and loan notes and bear interest at rates linked to UK and US LIBOR or UK base rates,
depending on the denomination of the loan. Fixed rate liabilities comprise property, lapse and regulatory review and complaints provisions and
finance leases. The liabilities on which no interest is paid comprise non interest bearing contingent consideration and property and regulatory
review and complaints provisions. These financial liabilities are disclosed in notes 23 and 26.
Financial assets
Financial assets primarily comprise cash deposits and investments. Cash which bears interest at nominal rates comprises £60.6m (2005:
£26.8m) denominated in sterling, £14.3m (2005: £15.5m) in US dollars, £12.4m (2005: £6.6m) in euros and £6.4m (2005: £7.0m) in other
currencies. Cash deposits of £23.5m (2005: £45.7m) denominated in sterling, accrue interest at rates based on LIBOR. Investments of £3.8m
(2005: £4.1m) primarily comprise contractual rights to receive financial assets of US and European technology funds which are non interest
bearing. Full details of these assets are given in note 20. In addition, the Group has sterling financial assets of £17.5m (2005: £13.6m) in
respect of a receivable falling due in more than one year. This primarily relates to non interest bearing amounts in Sesame, expected to be
recovered from members within the next four years.
Financial risk management
The Group’s business activities expose it to a variety of financial risks: currency risk; credit risk; liquidity risk and interest rate risk. The
Group’s overall risk management programme focuses on the unpredictability of financial markets and seeks to minimise the potential effects
of this on the Group’s financial performance. The Group uses derivative financial instruments to hedge certain risk exposures.
Risk management is carried out by a central treasury department (Group Treasury) under policies approved by the Board of Directors. Group
Treasury identifies, evaluates and hedges financial risks in close co-operation with the Group’s operating units. The Board provides written
principles for overall risk management, as well as written policies covering specific areas, such as foreign exchange risk, interest rate risk,
credit risk, use of financial instruments and investing excess liquidity.
Foreign exchange risk
The Group operates internationally and is exposed to foreign exchange risk arising from various currency exposures, primarily the US dollar and
the euro. Such risks can arise from future commercial transactions, recognised assets and liabilities and net investments in foreign operations.

25 Financial instruments (continued)
Foreign exchange risks arise in a subsidiary when future commercial transactions and recognised assets and liabilities are denominated in
currencies that are not the entity’s functional currency. To manage this risk the subsidiary enters into forward contracts with Group Treasury.
Group Treasury is responsible for managing the net position in each currency that arises from such exposures by using forward currency
contracts with relationship banks.
Each subsidiary designates contracts with Group Treasury as fair value hedges or cash flow hedges, as appropriate. Foreign exchange
contracts taken with relationship banks are designated at Group as hedges of foreign exchange risk on specific assets, liabilities or future
transactions on a gross basis and are treated as cash flow hedges.
The Group’s risk management policy is to hedge all contractually committed transactions as they occur.
Credit risk
The Group’s principal financial assets are cash, bank balances and trade and other receivables. The Group’s credit risk is primarily attributable
to its trade receivables. It has policies in place to ensure that sales are made to customers with an appropriate credit history. Derivative
counterparties and cash transactions are limited to high-quality financial institutions. The Group has policies that limit the amount of credit
exposure to any financial institution. The Group has no significant concentrations of credit risk, with exposures spread over a large number of
counterparties and customers.
Liquidity risk
Prudent liquidity risk management implies maintaining sufficient cash and marketable securities, the availability of funding through an
adequate amount of committed credit facilities and the ability to close out market positions. Due to the dynamic nature of the underlying
businesses, Group Treasury aims to maintain flexibility in funding by keeping committed credit lines available.
Cash flow and fair value interest rate risk
The Group’s interest rate risk arises from floating rate bank loans and from cash held on deposit. The Group’s cash balances are kept in
interest bearing current accounts and on short-term deposit, so as to maximise the level of return while maintaining an adequate level of
liquidity. The Group does not invest surplus funds in long-term fixed interest securities, and is therefore not exposed to any significant fair
value interest rate risk.
The Group’s borrowings are primarily at variable interest rates, which expose the Group to cash flow interest rate risk. Interest rate caps are
used to protect the Group against significant increases in interest rates.
26 Provisions for liabilities and charges
Regulatory Contingent
reviews and considerall
figures in £ millions Lapse complaints Property ation Other Total
At 1 June 2005 35.1 34.4 18.0 0.1 2.0 89.6
Additional provisions charged to income statement 52.6 35.2 3.6 – 0.2 91.6
Unwinding of discount 0.6 0.3 0.8 – – 1.7
Release of provisions – (2.0) – – – (2.0)
Utilisation of provisions (49.4) (26.3) (2.9) – (1.2) (79.8)
On disposal of subsidiary undertaking – – (0.2) – (0.2) (0.4)
At 31 May 2006
Analysed as follows
38.9 41.6 19.3 0.1 0.8 100.7
Current 26.0 32.7 5.7 – 0.4 64.8
Non current 12.9 8.9 13.6 0.1 0.4 35.9
38.9 41.6 19.3 0.1 0.8 100.7
IFA Network provisions
Regulatory reviews
Lapse and complaints
all figures in £ millions Provision Receivable Net Provision Receivable Net
At 1 June 2005 (35.1) 31.2 (3.9) (34.4) 16.0 (18.4)
Net movement (3.8) 3.6 (0.2) (7.2) 5.1 (2.1)
At 31 May 2006 (38.9) 34.8 (4.1) (41.6) 21.1 (20.5)
Page 83

Notes to the financial statements
continued
26 Provisions for liabilities and charges (continued)
Lapse
Lapse provisions of £38.9m (2005: £35.1m) are held in respect of
commissions reclaimable by product providers on policies that may
be cancelled within their indemnity period which is generally less
than four years. The lapse provisions are mostly recoverable from
members and are shown gross of the recoverable element, with
the corresponding entry of £34.8m (2005: £31.2m) held within
other receivables.
Regulatory reviews and complaints
Regulatory reviews and complaints provisions principally
comprise the estimated costs arising from both received and
future endowment complaints, costs arising from other received
complaints, amounts in respect of a specific review relating to a
former network member, the costs arising from a regulatory review
of structured capital at risk products sales, and the FSAVC and
pensions review processes. These provisions are expected to be
utilised over the next four years and are partly recoverable from
members and through insurance cover. The amounts are shown
gross of the estimated recoverable element of £21.1m (2005: £16.0m)
which is included within trade and other receivables. As a result the
net provision is £20.5m (2005: £18.4m).
The net amounts charged to the income statement in the year in
respect of regulatory reviews and complaints were £19.3m (2005:
£7.9m) including £15.7m (2005: £8.9m) disclosed as an exceptional
item (note 2).
Endowment complaints
During the past two years, along with the rest of the industry,
Sesame has experienced a significant increase in the volume of
complaints from consumers about advice given by IFAs regarding
the sales of endowment policies. This is due to increased consumer
awareness, poor stock market performance over the life of the
policies and action taken by the majority of product providers to
crystallise their liabilities with regard to past endowment complaints.
In 2005, given the levels of endowment complaints that were being
received, the increasing rate at which they were being upheld and
the expectation that the volumes of future complaints were going to
be significant, a provision was made for the Directors’ best estimate
of the costs associated with complaints that were to be received in
the future with respect to past sales of endowments.
During the year the estimates made at 31 May 2005 have been
reviewed and updated to reflect the Directors’ current best estimate
based on the actual experience to date on the number of complaints
received and the uphold rate. Assets have been recognised with
respect to the estimated recoveries from professional indemnity
insurance and the network members who gave the original advice.
The net provision for both received and future endowment complaints
at 31 May 2006, and included within the regulatory reviews and
complaints provision, is £19.8m (2005: £10.6m).
Page 84 Misys plc Annual Report 2006
In calculating this figure significant judgement has been applied in
estimating the volume of future endowment complaints, particularly
where Sesame does not have records of the total number of
endowment sales made prior to the acquisition by Misys of the
networks involved. In addition, the volume and pattern of future
endowment complaints will in part depend on future actions by
product providers and the performance of investment markets.
The effect of the significant uncertainties around the potential volume
of future endowment complaints is compounded by the uncertainties
surrounding the calculation of ultimate redress costs described
above. As a result the final cost of future endowment complaints,
which includes the administrative costs of handling these complaints,
could be greater or less than the provision which has been made.
Structured capital at risk products
As noted in the 2005 Annual Report, in common with other
companies in the sector a thematic review of Sesame’s and its
predecessor networks’ past sales of structured capital at risk
products was carried out by the Financial Services Authority (‘FSA’)
during 2005. As a result of the review Sesame agreed to reassess
the conclusions reached on historic complaints received, review
promotional material and carry out a review of the suitability of a
sample of sales selected from the general population of sales of
structured capital at risk products made by its network members.
The reassessment of the complaints received to date is nearing
completion and the sample review and the review of promotional
material is at an advanced stage. Sesame has provided the FSA with
the findings of the reviews and based upon this information the FSA
has agreed that it would be disproportionate to require Sesame to
undertake a wider or full population review.
Other provisions
The property provisions comprise the net present value of the
estimated future costs of vacant and sublet properties and the excess
over market value for occupied properties of subsidiaries acquired in
previous years. The provision relating to vacant and sublet properties
is expected to be utilised on average over the next seven years, and
the excess over market value provision over the next six years.
Included within the charge for the year is £3.6m (2005: £nil) which
has been disclosed as an exceptional item.
Contingent consideration is non interest bearing and is payable in cash.
Included in other provisions are amounts in respect of litigation and
non property related onerous contracts.

27 Deferred taxation
Deferred tax assets comprise:
Other
temporary
all figures in £ millions Losses differences Total
At 1 June 2005 11.8 10.1 21.9
Adjustment on the implementation of IAS 39 (note 37) – 0.9 0.9
Acquisition of subsidiaries 3.8 1.1 4.9
Charged to the income statement (0.1) (2.6) (2.7)
Charged to equity in respect of share-based payments – (0.1) (0.1)
Other charges to equity – (2.4) (2.4)
Currency translation differences – 0.2 0.2
At 31 May 2006 15.5 7.2 22.7
Other
temporary
all figures in £ millions Losses differences Total
At 1 June 2004 8.9 12.5 21.4
Credited (charged) to income statement 2.9 (3.6) (0.7)
Charged to equity in respect of share-based payments – 0.1 0.1
Other charges to equity – 0.8 0.8
Currency translation differences – 0.3 0.3
At 31 May 2005 11.8 10.1 21.9
Deferred tax assets recoverable within one year are £5.5m (2005: £3.9m).
Deferred tax assets of £15.5m (2005: £11.8m) have been recognised in respect of carried forward losses, which, on the basis of the latest
forecasts, are expected to be recovered against future profits. Deferred tax assets of £32.2m (2005: £27.2m) in respect of other losses have not
been recognised due to uncertainty with respect to the unwind against future profit streams.
Deferred tax assets on other temporary differences of £7.2m (2005: £10.1m) have been recognised in respect of deductions which on the basis of the
latest forecasts, are more likely than not to be utilised. Other temporary differences of £31.8m (2005: £20.3m) and accelerated capital allowances of
£5.9m (2005: £5.7m) have not been recognised due to the unpredictability of future profits when these temporary differences will unwind.
There would be no additional cost of repatriation of unremitted earnings of subsidiaries to the UK because of the availability of foreign tax
credits against any UK tax liability arising.
There is an unrecognised deductible temporary difference of £232.8m (2005: £232.8m) in respect of capital losses in the UK. These losses can
only be utilised against specific types of future capital gain.
28 Deferred income
all figures in £ millions 2006 2005
Maintenance fees 81.7 76.9
Other income 33.0 31.9
Current deferred income 114.7 108.8
Maintenance fees 2.0 3.5
Other income 2.3 5.0
Non current deferred income 4.3 8.5
Total deferred income 119.0 117.3
Deferred maintenance fees represent amounts invoiced in advance for contracts which provide technical support and trouble shooting
assistance (helpdesk, etc) in addition to upgrades and enhancements to the Group’s software products and hardware maintenance.
Maintenance fees are recognised as revenue rateably as the services are provided over the period of the contract.
Other deferred income represents amounts invoiced, including deposits, primarily in respect of initial licence fees for software products and
professional services for which the revenue recognition criteria have yet to be satisfied.
Page 85

Notes to the financial statements
continued
29 Retirement benefit obligations
Defined contribution schemes
The Group operates a number of defined contribution pension schemes covering the majority of its employees. The cost of these pension
schemes was £12.5m (2005: £12.9m) and was charged to the income statement as incurred. There were no outstanding or prepaid
contributions at either the beginning or the end of the financial year.
Defined benefit schemes
In 2003/04 the active members of the UK final salary scheme ceased to accrue benefits on the basis of their final salary during the year.
Thereafter the benefits of the active members accrue on a money purchase (defined contribution) basis. The Group made a special payment
of £5.0m in the current year to address the deficit in the scheme.
In addition, the Group operates a number of other smaller defined benefit arrangements.
The latest full actuarial valuation of the UK scheme was carried out as at 31 May 2005; the assumptions of which have been updated to 31 May
2006 by qualified independent actuaries. The last full actuarial valuations of the other Group schemes were carried out on a number of different
dates; these assumptions have been updated to 31 May 2006 by qualified independent actuaries.
The principal assumptions used in the valuations of the schemes are:
all figures in % 2006 2005 2004
Rate of increase in salaries n/a n/a 6.0
Rate of increase in pensions in payment 3.5 3.5 3.5
Discount rate 5.0 5.1 5.8
Inflation assumption 3.0 2.7 3.0
The expected rates of return on scheme assets are based on the long-term expected rates of return for each asset class. Mortality assumptions
are based on the PA92 Standard Mortality tables. The year end assets in the schemes and the expected rates of return were:
Long term
expected
rate of
return %
2006
Value
£m
Long term
expected
rate of
return %
2005
Value
£m
Long term
expected
rate of
return %
2004
Value
£m
Equities 7.4 30.6 7.4 23.0 8.1 20.0
Government bonds 4.4 4.6 4.4 3.8 5.1 3.5
Corporate bonds 5.0 4.6 5.1 3.8 5.8 3.5
Cash 4.6 0.1 4.8 – 4.3 0.1
Total market value of assets 39.9 30.6 27.1
Actuarial value of liabilities (40.6) (39.4) (33.5)
Deficit in the schemes (0.7) (8.8) (6.4)
Related deferred tax asset 0.2 2.7 1.8
Pension liability (0.5) (6.1) (4.6)
Movement in deficit during the year:
all figures in £ millions
Scheme assets
2006 2005
Fair value at 1 June 30.6 27.1
Expected return on plan assets (note 7) 2.1 2.0
Actuarial gain 3.0 2.0
Contributions paid 5.0 –
Net benefits paid out (0.8) (0.5)
Fair value at 31 May
Benefit obligations
39.9 30.6
Present value at 1 June (39.4) (33.5)
Interest cost (note 7) (1.9) (1.9)
Actuarial losses (0.1) (4.5)
Net benefits paid out 0.8 0.5
Present value at 31 May (40.6) (39.4)
Net liability (0.7) (8.8)
Page 86 Misys plc Annual Report 2006

29 Retirement benefit obligations (continued)
The actual return on schemes’ assets was £5.1m (2005: £4.0m). The total gain recognised in the statement of recognised income and
expenditure was £2.9m (2005: £2.5m loss). The cumulative amount of gains recognised in the statement of recognised income and expenditure
was £0.4m (2005: £2.5m loss).
History of experience gains and losses:
2006 2005
Experience gains on schemes’ assets
Amount (£m) 3.0 2.0
Percentage of schemes’ assets
Experience gains on schemes’ liabilities
7.5% 6.5%
Amount (£m) 4.1 –
Percentage of schemes’ liabilities 10.1% –
30 Contingent liabilities
Within Sesame, the regulatory requirements governing the IFA network business receive significant attention. Compliance with these
regulations is subject to a process of ongoing review and appraisal by both the FSA and the Directors. Provision is made for the costs arising
from specific regulatory reviews as well as from complaints from consumers, both received and anticipated, where these can be reliably
estimated as set out in note 26.
The final cost of settling these complaints is uncertain and depends upon the proportion of complaints ultimately proved to be valid, the redress
cost on each policy, which in turn is dependent upon the performance of investment markets, and the administrative cost of handling the
complaints. The recoverability of these costs will depend on whether the Sesame or member insurance policy responds, and if so, what level of
excess will apply and the ability of Sesame to recover costs from members, many of whom are no longer part of the network. In establishing the
year end provision, assumptions have been made regarding each of these based on recent actual experience. As a result the actual cost may differ
from that for which provision has been made. No allowance has been made for any future regulatory action by the FSA.
Contingent liabilities that are quantifiable arise from property rental guarantees that have been issued in the normal course of business and
also from bonds that have been issued in support of tenders submitted to prospective customers. These amount to £9.7m (2005: £8.5m).
As set out in note 29, the Group operates defined contribution pension schemes including within the US. The Group has applied to the IRS to
correct a number of errors that had inadvertently been made in the operation of part of the US schemes, in order to preserve their favourable
tax treatment. At this stage it is not practicable to estimate whether or not this will result in a cost to the Company. The annual contributions
to the schemes by the Group are £5.2m (2005: £5.9m).
The Group’s subsidiaries and the Company can be parties to legal actions and claims arising in the ordinary course of business. Whilst the
outcome of current outstanding actions and claims remains uncertain, it is expected that they will be resolved without a material impact on
the Group’s financial position.
31 Commitments
Commitments of the Group under non cancellable operating leases at 31 May:
2006 2005
Land and Plant and Land and Plant and
all figures in £ millions buildings machinery buildings machinery
Rental payments due within one year 16.8 0.4 16.3 0.9
Rental payments due between two and five years 50.9 0.6 41.4 0.7
Rental payments due after five years 31.2 – 24.6 –
98.9 1.0 82.3 1.6
Capital expenditure on property, plant and equipment committed by the Group at 31 May 2006 was £0.3m (2005: £nil).
Page 87

Notes to the financial statements
continued
32 Related party transactions
Transactions between Misys plc and its subsidiaries, which are related parties, have been eliminated on consolidation and are not disclosed
in this note.
Remuneration of key management personnel
The key management personnel of the Group comprise the Directors of the Company and three senior managers and their remuneration is
set out below in aggregate.
all figures in £ millions 2006 2005
Short-term employment benefits 4.3 3.9
Post employment benefits 0.6 0.6
Termination benefits 0.7 –
Share-based payment benefits 2.2 2.1
33 Called up share capital
The Company has an authorised share capital of 750,000,000 1p ordinary shares (2005: 750,000,000). The table below reconciles the allotted
and fully paid share capital to those shares not held by the Company.
all figures in numbers
Allotted,
fully paid
share capital Treasury MEST ESOP Total
At 1 June 2005 559,407,803 (51,062,000) (23,020,128) (129,482) 485,196,193
Purchase of own shares – (11,740,000) (161,396) – (11,901,396)
Share options exercised 319,233 2,408,564 814,886 – 3,542,683
Cancellation of treasury shares (8,000,000) 8,000,000 – – –
At 31 May 2006 551,727,036 (52,393,436) (22,366,638) (129,482) 476,837,480
During the year 319,233 (2005: 690,319) shares were issued for a consideration of £0.6m (2005: £1.2m) to satisfy share awards.
During the year 11,740,000 (2005: 26,410,000) ordinary shares were purchased by the Company, representing 2.1% (2005: 4.7%) of the issued
share capital of Misys plc, for a total cost, including expenses, of £24.9m (2005: £52.9m). These are held as Treasury shares within reserves
and represent a deduction from shareholders’ funds.
During the year 2,408,564 (2005: 1,613,677) Treasury shares, with a cost of £4.9m (2005: £3.3m), were utilised to satisfy share awards and
8,000,000 (2005: nil) Treasury shares with a cost of £16.1m (2005: nil) were cancelled. In the prior year 164,323 Treasury shares, with a cost of
£0.3m, were transferred to the Misys Employee Share Trust (‘MEST’).
The MEST purchases shares in the market using funds contributed by the respective Group employing companies. These shares are used to
satisfy awards made under the Group’s share incentive arrangements. At 31 May 2006 the MEST held 22,366,638 (2005: 23,020,128) shares
purchased for a cost of £53.1m (2005: £54.5m) and with a market value of £40.2m (2005: £49.8m). During the year it utilised shares with a cost
of £1.8m (2005: £6.7m) to satisfy share awards.
The Employee Share Ownership Plan (‘ESOP’) purchases shares in the market using funds loaned by the Company. Share purchases are timed
to ensure that the ESOP has sufficient shares to satisfy its requirements as and when its obligations fall due. The Trustees of the ESOP have
waived its rights to dividends. At 31 May 2006, the ESOP held 129,482 (2005: 129,482) shares, purchased for a cost of £0.3m (2005: £0.3m) and
with a market value of £0.2m (2005: £0.3m). During the prior year the ESOP utilised shares with a cost of £35,000 to satisfy its obligations.
Page 88 Misys plc Annual Report 2006

34 Share capital and reserves
Equity
Capital share-
Share Share redemption Other Minority holders’
all figures in £ millions capital premium reserve reserves Total interest funds
At 1 June 2005 5.6 66.5 0.2 (235.0) (162.7) 3.3 (159.4)
Adjustment on the implementation of IAS 39 (note 37) – – – (1.7) (1.7) – (1.7)
Total recognised income and expense for the period – – – 215.5 215.5 – 215.5
Dividends paid – – – (33.7) (33.7) – (33.7)
Share options exercised – 0.6 – – 0.6 – 0.6
Share options settled from own shares – 0.1 – 4.5 4.6 – 4.6
Cancellation of treasury shares (0.1) – 0.1 – – – –
Purchase of and other movements in own shares – – – (25.3) (25.3) – (25.3)
Share-based payments – – – 9.8 9.8 – 9.8
Deferred tax on share-based payments – – – (0.1) (0.1) – (0.1)
Minority interests disposed of – – – – – (3.3) (3.3)
At 31 May 2006 5.5 67.2 0.3 (66.0) 7.0 – 7.0
Equity
Capital share-
Share Share redemption Other Minority holders’
all figures in £ millions capital premium reserve reserves Total interest funds
At 1 June 2004 5.6 65.3 0.2 (220.4) (149.3) 2.9 (146.4)
Total recognised income and expense for the period – – – 59.7 59.7 0.4 60.1
Dividends paid – – – (33.5) (33.5) – (33.5)
Share options exercised – 1.2 – – 1.2 – 1.2
Share options settled from own shares – – – 2.5 2.5 – 2.5
Purchase of and other movements in own shares – – – (53.8) (53.8) – (53.8)
Share-based payments – – – 10.4 10.4 – 10.4
Deferred tax on share-based payments – – – 0.1 0.1 – 0.1
At 31 May 2005 5.6 66.5 0.2 (235.0) (162.7) 3.3 (159.4)
35 Other reserves
Retained Treasury Own Translation
all figures in £ millions earnings shares shares reserve Total
At 1 June 2005 (77.3) (102.3) (54.8) (0.6) (235.0)
Adjustment on the implementation of IAS 39 (note 37) (1.7) – – – (1.7)
Total recognised income and expense for the period 213.6 – – 1.9 215.5
Dividends paid (33.7) – – – (33.7)
Share options settled from own shares (2.2) 4.9 1.8 – 4.5
Cancellation of treasury shares (16.1) 16.1 – – –
Purchase of and other movements of own shares – (24.9) (0.4) – (25.3)
Share-based payments 9.8 – – – 9.8
Deferred tax on share-based payments (0.1) – – – (0.1)
At 31 May 2006 92.3 (106.2) (53.4) 1.3 (66.0)
Page 89

Notes to the financial statements
continued
35 Other reserves (continued)
Retained Treasury Own Translation
all figures in £ millions earnings shares shares reserve Total
At 1 June 2004 (106.2) (53.0) (61.2) – (220.4)
Total recognised income and expense for the period 60.3 – – (0.6) 59.7
Dividends paid (33.5) – – – (33.5)
Share options settled from own shares (7.5) 3.3 6.7 – 2.5
Purchase of and other movements of own shares (0.9) (52.6) (0.3) – (53.8)
Share-based payments 10.4 – – – 10.4
Deferred tax on share-based payments 0.1 – – – 0.1
At 31 May 2005 (77.3) (102.3) (54.8) (0.6) (235.0)
36 Post balance sheet events
On 18 July 2006, the Group announced the disposal of its Apollo asset management business.
37 Adoption of IAS 39
As permitted by IFRS 1 ‘First-time Adoption of International Financial Reporting Standards’, the Group elected to defer implementation of
IAS 39 ‘Financial Instruments: Recognition and Measurement’ until the year ending 31 May 2006. The effect of adopting IAS 39 on the balance
sheet at 1 June 2005 is as follows:
At 31 May Transition At 1 June
all figures in £ millions
Non current assets
2005 adjustment 2005
Trade and other receivables 13.6 0.6 14.2
Deferred tax assets
Current assets
21.9 0.9 22.8
Trade and other receivables
Current liabilities
166.8 1.1 167.9
Trade and other payables
Non current liabilities
(137.7) (1.7) (139.4)
Trade and other payables (2.0) (2.6) (4.6)
Other assets and liabilities (222.0) – (222.0)
Net liabilities (159.4) (1.7) (161.1)
The most significant financial instruments recognised on the adoption of IAS 39 for the Group are embedded foreign currency derivatives which
occur when certain software licensing contracts are priced in a currency which is different to the functional currency of those companies
entering into the transaction. The net effect of this at 1 June 2005 was a £2.2m charge.
Other financial instruments recognised include foreign exchange contracts, taken out to eliminate transactional currency exposures, and interest
rate hedges, taken out to protect the Group’s interest charge from increases in interest rates, which had an effect of a charge of £0.2m and £0.2m
respectively at 1 June 2005.
There was a deferred tax asset on the above items of £0.9m at 1 June 2005.
Exchange gains or losses on debt previously hedging goodwill written off to reserves
On consolidation, the results of overseas operations are translated into sterling at the average exchange rate for the period, and their assets
and liabilities are translated at exchange rates prevailing on the balance sheet date. Currency translation differences are recognised in the
translation reserve. All material assets and liabilities that are not denominated in the functional currency of the operation involved are hedged
using forward foreign currency contracts. Exceptions to this are the Group’s external foreign currency borrowings (principally US dollar
borrowings) which are held as a partial natural hedge against the Group’s foreign net investments.
On the adoption of IAS 39 a portion of the US dollar borrowings, which qualified for hedge accounting under UK GAAP, no longer qualify
for this treatment. This difference arises as a result of the different treatment of goodwill previously written off to reserves under IAS 39
compared with UK GAAP. As a result, the foreign exchange gains or losses arising on the retranslation of the non-qualifying amount of the
US$ borrowings are recognised in the income statement as ‘exchange gains or losses on debt previously hedging goodwill written off to
reserves’. This resulted in a charge of £0.2m in the year, being the first period of adoption. This comprised a charge of £6.4m in the first half
and a credit of £6.2m in the second half.
Foreign exchange gains and losses on embedded derivatives and on debt previously hedging goodwill written off to reserves are excluded from
the calculation of adjusted earnings per share.
Page 90 Misys plc Annual Report 2006

38 Transition to IFRS
Reconciliation of retained profit for the year ended 31 May 2005
all figures in £ millions Note
Retained profit under UK GAAP 14.8
Goodwill amortisation a 52.1
Development costs b 7.6
Share-based payments c (8.9)
Other d (3.2)
Retained profit under IFRS 62.4
Reconciliation of shareholders’ equity as at 31 May 2005
31 May 1 June
all figures in £ millions Note 2005 2004
Total equity under UK GAAP (252.6) (182.5)
Goodwill amortisation a 52.1 –
Development costs b 18.4 10.7
Other adjustments d 22.7 25.4
Total equity under IFRS (159.4) (146.4)
Earnings per share for the year ended 31 May 2005
Basic Diluted
all figures in pence UK GAAP IFRS UK GAAP IFRS
Earnings per share 2.9 12.4 2.8 12.3
Goodwill amortisation 10.4 – 10.3 –
Amortisation of acquired intangibles – 0.1 – 0.1
Estimated cost and redress payments associated with
regulatory reviews and endowment complaints 1.8 1.8 1.8 1.8
Loss on disposal of business 0.5 0.5 0.5 0.5
Adjusted earnings per share 15.6 14.8 15.4 14.7
Background
The Group previously prepared its financial statements in accordance with UK GAAP. From 1 June 2005, the Group is required to prepare its consolidated
financial statements in accordance with IFRS, as adopted by the European Union. As the 2006 financial statements include comparatives for 2005, the
Group’s date of transition to IFRS under IFRS 1 ‘First Time Adoption of IFRS’ is 1 June 2004 and the 2005 comparatives are restated to IFRS.
IFRS 1 exemptions
IFRS 1 permits those companies adopting IFRS for the first time certain exemptions. The Group has taken the following exemptions:
• IAS 32 ‘Financial Instruments: Disclosure and Presentation’ and IAS 39 ‘Financial Instruments: Recognition and Measurement’ on financial
instruments have been adopted from 1 June 2005 and comparative information has not be restated.
• IFRS 3 ‘Business Combinations’ has been applied prospectively from 1 June 2004.
• Cumulative translation differences for all foreign operations have been set to zero at 1 June 2004.
• The Group has recognised actuarial gains and losses in full through the statement of recognised income and expense.
• IFRS 2 ‘Share-based Payments’ has been applied to all equity instruments that had not vested on or before 31 May 2004.
IFRS adjustments
The primary adjustments arising from the adoption of IFRS are described further below:
(a) Goodwill
Under UK GAAP goodwill was capitalised and amortised over its useful economic life, up to a maximum period of 20 years. Under IFRS,
goodwill is not amortised but is subject to impairment testing on at least an annual basis. The goodwill amortisation charge under UK GAAP
of £52.1m for the year ended 31 May 2005 has been reversed in the IFRS restated results.
Page 91

Notes to the financial statements
continued
38 Transition to IFRS (continued)
(b) Developed software
Under UK GAAP, the costs of internally developed software licences
and upgrades were expensed as incurred, irrespective of the future
value expected from the results of the development activity. IAS 38
‘Intangible Assets’ requires that certain development costs are
capitalised when the criteria set out in the standard are met.
The effect of adopting IFRS is to capitalise development costs
previously expensed under UK GAAP. Any capitalised costs are
amortised over the useful life of the product. The impact on the
income statement for the year to 31 May 2005 is £7.6m.
(c) Share-based payments
The Group operates a variety of share-based employee incentive
arrangements which typically include the grant of share options.
Under UK GAAP, the intrinsic value of an award under the Group’s
share plans was charged as an operating cost over the period of
performance of the employee receiving the award. Inland Revenue
approved SAYE schemes (and their overseas equivalents) were
outside the scope of UITF Abstract 17, and a charge was therefore
not recorded in respect of these schemes even where the options
were granted at a discount to the market price at the date of
invitation.
IFRS 2 requires that an expense is recognised in the income
statement based on the fair value of an award at the date of grant
for all share-based incentive schemes. The expense is spread over
the period for which services are received from employees, which
is assumed to be the vesting period of the award.
The impact of adopting IFRS is to increase the share-based payment
charge in the income statement, primarily because IFRS 2 covers
market value schemes and schemes which were outside the scope
of UITF 17.
The total IFRS charge for the year to 31 May 2005 is £10.4m
compared with £1.5m under UK GAAP, resulting in an incremental
charge of £8.9m.
(d) Other adjustments
Acquired intangible assets
After transition to IFRS, there is a requirement to assess and recognise
the fair value of all separately identifiable intangible assets that are
acquired as part of a business combination. Under UK GAAP, such
items were generally subsumed within goodwill. As a result of this
change, £1.8m was reclassified from goodwill to other intangibles in
respect of the acquisition of IDOM Consulting (UK) Limited in August
2004, of which £0.3m was amortised during the year. A deferred tax
liability of £0.6m arose on the recognition of the intangible assets,
giving rise to an additional £0.6m goodwill. As explained in note 10,
the adjusted EPS excludes this charge for the amortisation of acquired
intangible assets.
Discounting
Under IFRS, provisions are discounted to their fair value at the
balance sheet date. As the discounting effect unwinds over time, the
resulting increase in the provision is treated as a finance cost. Where
provisions relate to claims that are recoverable from a third party, the
corresponding debtor balance has also been discounted.
Page 92 Misys plc Annual Report 2006
The effect of this adjustment on the balance sheet at 31 May 2005
is to decrease non-current provisions by £1.2m and non-current
receivables by £0.9m. An additional charge of £0.2m has been
included within finance costs for the full year.
Holiday pay
IAS 19 requires that a liability is recorded for all accrued entitlements
for holiday at each balance sheet date. The additional accrual at 31
May 2005 (which has been adjusted within current trade and other
payables) is £2.0m, and an additional charge of £0.8m has been
recorded in the year to 31 May 2005.
Dividends
Under UK GAAP, dividends were recognised as an expense in the
income statement. An accrual was made for dividends that were
proposed by the Directors after the balance sheet date but prior to
the date of signing the financial statements and a corresponding
expense was recognised.
Distributions to equity holders are not recognised in the income
statement under IFRS, they are disclosed as a component of the
movement in equity. A liability is recorded for a final dividend when
it is approved by the Company’s shareholders, and for an interim
dividend when it is paid.
The impact of IFRS is to remove the £20.7m accrual for the 2004/05
final dividend in the balance sheet at 31 May 2005.
Taxation
Deferred tax under UK GAAP was provided on all timing differences
that had originated but not reversed at the balance sheet date.
Timing differences arise when gains and losses are included in tax
computations in a later or earlier period from that in which they
appear in the Group’s financial statements.
IAS 12 ‘Income Taxes’ has a balance sheet focused approach.
The standard requires that full provision be made for all taxable
temporary differences except those arising on goodwill. A temporary
difference is the difference between the carrying amount of an asset
or liability in the balance sheet and its associated tax base.
A temporary difference is a taxable temporary difference if it will
give rise to taxable amounts in the future when the asset or liability
is settled.
Current tax assets and liabilities are shown separately on the face of
the balance sheet.
The principal impact of adopting IFRS has been to recognise an
additional deferred tax asset of £3.1m at 31 May 2005. This is in
respect of developed software costs, tax allowable goodwill on
acquisitions, share-based payments and holiday pay liabilities.
The movement on this balance during the year ended 31 May 2005
is such as to create an additional deferred tax charge of £1.9m in
that year.
Cash flow statement
The transition from UK GAAP to IFRS does not change any of the
cash flows of the Group. The IFRS cash flow format is similar to UK
GAAP but presents various cash flows in different categories and in
a different order from the UK GAAP cash flow statement. All of the
IFRS accounting adjustments net out within cash flow from operating
activities except for the reclassification of expenditure on developed
software to cash used in investing activities.

Independent auditors’ report to the members of Misys plc
on the parent company accounts
We have audited the parent company financial statements of Misys
plc for the year ended 31 May 2006 which comprise the balance
sheet, and the related notes. These parent company financial
statements have been prepared under the accounting policies set
out therein. We have also audited the information in the Directors’
remuneration report that is described as having been audited.
We have reported separately on the Group financial statements
of Misys plc for the year ended 31 May 2006.
Respective responsibilities of Directors and auditors
As described on page 57 the Directors’ responsibilities for preparing
the Directors’ 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 Directors’ 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 Directors’
remuneration report to be audited have been properly prepared in
accordance with the Companies Act 1985. We report to you whether in
our opinion the information given in the Directors’ report is consistent
with the parent company financial statements. The information given in
the Directors’ report includes that specific information presented in the
Financial review that is cross referred from the business review section
of the Directors’ report. We also 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 items
listed in the contents section of the Annual Report, apart from the
2006 audited financial statements and the part of the remuneration
report to be audited. 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 Directors’ 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 Directors’ 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 Directors’ 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 31 May 2006;
• the parent company financial statements and the part of the
Directors’ 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
London
27 July 2006
Page 93

Company balance sheet
at 31 May 2006
2005
all figures in £ millions Note 2006 (restated)
Fixed assets
Tangible assets D 1.2 2.7
Investments in subsidiary undertakings E 89.3 175.4
Debtors F 669.4 756.3
Current assets
Page 94 Misys plc Annual Report 2006
759.9 934.4
Debtors G 40.3 47.1
Derivative financial instruments H 1.6 –
Cash at bank and in hand 4.2 3.7
Creditors falling due within one year
46.1 50.8
Loans and overdrafts I (38.5) (54.9)
Derivative financial instruments H (1.5) –
Other creditors J (57.5) (103.1)
(97.5) (158.0)
Net current liabilities (51.4) (107.2)
Total assets less current liabilities 708.5 827.2
Creditors falling due after more than one year
Bank loans (199.0) (316.2)
Amounts due to subsidiary undertakings (329.2) (326.0)
Provisions for liabilities and charges K (0.2) (0.8)
Net assets 180.1 184.2
Capital and reserves
Called up share capital N 5.5 5.6
Share premium account N 67.2 66.5
Capital redemption reserve N 0.3 0.2
Profit and loss account N 107.1 111.9
Equity shareholders’ funds 180.1 184.2
Comparative figures have been restated following the adoption of a number of new accounting standards (see note B on page 96).
Approved by the Board
Kevin Lomax
Howard Evans
27 July 2006

Notes to the Company financial statements
A. Accounting convention and policies
Accounting convention
The financial statements are prepared under the historical cost
convention in accordance with the applicable UK Accounting Standards,
the Companies Act 1985 and the accounting policies set out below.
Share incentive schemes (from 1 June 2005)
The Group operates several equity-settled, share-based compensation
plans. The fair value of the employee services received in exchange for
the grant of the options is recognised as an expense. The total amount
to be expensed over the vesting period is determined by reference to
the fair value of the options granted, excluding the impact of any nonmarket
vesting conditions (for example, profitability and sales growth
targets). Non-market vesting conditions are included in assumptions
about the number of options that are expected to become exercisable.
At each balance sheet date, a revised estimate is made of the
number of options that are expected to become exercisable. If the
revised estimate differs from the original estimate, the charge to the
profit and loss account is adjusted over the remaining vesting period
of the options.
The share-based payment charge is recharged as an expense to the
relevant employing subsidiary.
Taxation
Taxation is that chargeable on the profits for the period, together
with deferred taxation. Deferred taxation is recognised, in respect of
all timing differences that have originated but not reversed at the
balance sheet date where transactions or events have occurred at
that date that will result in an obligation to pay more, or a right to
pay less, tax in the future.
Fixed assets
Fixed assets are stated at cost less accumulated depreciation.
Depreciation is calculated on a straight line basis so as to write off
the cost, less estimated residual value of each asset, over its expected
useful life. The residual values and useful economic lives of fixed
assets are reviewed annually. Freehold land is not depreciated,
freehold properties are depreciated over 50 years.
Investments
Investments are shown at cost less any provision considered
necessary for impairment. The need for any impairment write down
is assessed by comparison of the carrying value of the asset against
the higher of net realisable value or value in use. The value in use is
determined from estimated discounted future cash flows. Discount
rates used are based on the cost of capital of the Company.
Bank borrowings
Borrowings are initially stated as the ‘net proceeds’, being the
principal loan element, net of issue and finance costs. Issue costs
together with finance costs are allocated to the profit and loss
account over the term of the facility at the effective rate of interest.
Accrued finance costs attributable to borrowings where the maturity
at the date of issue is less than 12 months are included in other
payables within current liabilities. For all other borrowings, accrued
finance charges and issue costs are included in the carrying value
of those borrowings.
Derivative financial instruments and hedge accounting
(from 1 June 2005)
The business activities of the Group expose it to financial risks that
arise from changes in both foreign exchange rates and interest
rates. The Company, on behalf of the Group, uses forward currency
contracts and interest rate caps to hedge these exposures. The Group
does not use derivative financial instruments for speculative purposes.
Changes in the fair value of derivative financial instruments are
recognised directly in equity where they are designated as effective
hedges of future cash flows. The ineffective portion of the hedge, where
it occurs, is recognised immediately in the profit and loss account.
If the item being hedged is a non-financial asset or liability then
the associated gains or losses on the associated derivative that had
previously been recognised in equity are included in the measurement
of the asset or liability at the time it is recognised. Conversely if the
item being hedged is a financial asset or liability, any amounts arising
from changes in fair value that are deferred in equity are subsequently
recognised in the profit and loss account in the same accounting period
in which the hedged item affects net income.
Changes in the fair value of derivative financial instruments, where
they are not designated as effective hedges of future cash flows, are
recognised in the profit and loss account. Any changes in the fair
value of the underlying transaction are also recognised in the profit
and loss account. Where a financial instrument does not qualify for
hedge accounting, any changes in the fair value are recognised in the
profit and loss account as it arises.
Hedge accounting of a transaction is discontinued when the hedging
instrument is sold, terminated, or exercised, or when the hedging
instrument no longer qualifies for hedge accounting. Under these
circumstances any cumulative gain or loss on the hedging instrument,
which has already been recognised in equity, is retained in equity until
the transaction occurs. However if a hedged transaction is no longer
expected to occur, any net cumulative gain or loss that has already
been recognised in equity is immediately transferred to the profit and
loss account.
Derivative financial instruments and hedge accounting
(from 1 June 2004 to 31 May 2005)
During this period derivative instruments were used by the Company,
on behalf of the Group, solely to reduce or eliminate exposure to
foreign exchange and interest rate risks. Derivative instruments that
were used included forward currency contracts, currency swaps and
interest rate caps. These derivative instruments were considered to
be hedges because they were used to reduce the risk profile of an
existing underlying exposure in accordance with the Group’s risk
management policies. When derivatives were used for hedging
purposes, the Group deferred the derivative’s impact on the profit
and loss account profit until the impact of the underlying transaction
was also recognised. Premiums or discounts arising on the purchase
of derivative instruments were amortised over the shorter of the life
of the instrument and the underlying transaction.
Where forward currency contracts were used to hedge balance
sheet items, the balance sheet items were translated at the rate of
exchange that was contained within the hedge. Where the instrument
was used to hedge against future transactions that were not yet
shown on the balance sheet, any gains and losses were deferred
until the transaction occurred.
Where a derivative ceased to be a hedge, either as a result of the
underlying exposure which it was hedging having been extinguished
or because the future transaction was no longer considered likely to
occur, the derivative was either cancelled, sold or matched against
a new derivative. Any cost of termination was recognised in the profit
and loss account in the period of termination. Where the derivative
was matched by a new derivative, any resultant gain or loss was
immediately recognised in the profit and loss account.
Cash flow disclosure
The Company is included within the consolidated financial
statements of Misys plc and has taken advantage of the exemption
from preparing a cash flow statement under the terms of FRS 1
(revised 1996) ‘Cash Flow Statements’.
Page 95

Notes to the Company financial statements
continued
B. New accounting policies
Prior year adjustments
The Accounting Standards Board (ASB) issued FRS 20 ‘Share Based Payment’ in April 2004. The company incurs a charge under this
standard, which is allocated to its subsidiaries based on the employing company of the relevant employee. In the year ended 31 May 2005
this has been capitalised as a cost of investment, which has led to a prior period adjustment to retained earnings of £8.9m with a
corresponding increase in the cost of investment in subsidiaries.
The ASB issued FRS 21 ‘Events after the Balance Sheet date’ in May 2004. This prohibits the recording of a provision for a proposed dividend
where the dividend is declared after the balance sheet date. The effect on the comparative figures is to exclude the 2005 proposed final
dividend from the balance sheet at 31 May 2005 resulting in retained earnings and equity shareholders’ funds increasing by £20.7m.
Current year transition
The ASB issued FRS 23 ‘The Effects of Changes in Foreign Exchange rates’, FRS 25 ‘Financial Instruments: Disclosure and Presentation’
and FRS 26 ‘Financial Instruments: Measurement’ in December 2004. These standards do not require the restatement of comparative
periods. This has resulted in a £0.3m charge recognised in retained earnings in respect of the fair value of foreign exchange contracts and
interest rate caps at 1 June 2005.
C. Profit for the year
As permitted by section 230 of the Companies Act 1985, the profit and loss account of the Company is not presented as part of these
financial statements. The profit attributable to shareholders for the year is £40.3m (2005: £125.8m), which includes auditors’ remuneration
of £0.1m (2005: £0.2m).
D. Tangible assets
Page 96 Misys plc Annual Report 2006
Freehold land and properties
all figures in £ millions
Cost
2006 2005
At 1 June 3.5 3.5
Disposals (2.0) –
At 31 May
Depreciation
1.5 3.5
At 1 June (0.8) (0.7)
Charge for the year – (0.1)
Disposals 0.5 –
At 31 May
Net book value
(0.3) (0.8)
At 31 May 1.2 2.7
E. Investments in subsidiary undertakings
all figures in £ millions
Cost
2006
2005
(restated)
At 1 June 175.4 139.6
Prior year adjustment (note B) 8.9
At 1 June restated 175.4 148.5
Additions – 26.9
Disposals (81.9) –
At 31 May
Provisions for impairment
93.5 175.4
At 1 June – –
Charge for the year (4.2) –
At 31 May
Net book value
(4.2) –
At 31 May 89.3 175.4

Principal subsidiary undertakings
The Company is the beneficial owner of and has 100% of the nominal value and voting rights over all the equity share capital, through subsidiary
undertakings, of the following principal operating subsidiary undertakings. These develop and license application software products to customers
in well defined vertical markets together with transaction processing, professional services and e-commerce activities:
Banking Country of
Company name incorporation and operation Markets served
Misys International Banking Systems GmbH Germany Global products and services in the
Misys International Banking Systems Inc USA following areas:
Misys International Banking Systems Limited England and Wales • Wholesale international banking
Misys International Banking Systems Limited Republic of Ireland • Retail and universal banking
Misys International Banking Systems Limited Hong Kong • Enterprise risk management
Misys International Financial Systems Pte Limited Singapore • Treasury and capital markets
Misys International Banking Systems SA (France) France • Integration technology
Misys International Banking Systems SA (Luxembourg) Luxembourg • Enterprise-wide compliance
Misys International Financial Systems Pvt Limited India management
Summit Systems SA France
Summit Systems Inc USA
Summit Systems International Limited England and Wales
Misys IQ LLC USA
Healthcare Country of
Company name incorporation and operation Markets served
Misys Healthcare Systems LLC USA US products and services in the
Misys Hospital Systems Inc USA following areas:
M Transaction Services Inc USA • Practice management systems
Payerpath Inc USA for physicians
• Electronic medical records
• Mobile applications
• Clinical laboratory management
• Radiology
• Pharmacy
• Clinical alerting
• Patient scheduling
• Transaction services
• Homecare
Sesame Country of
Company name incorporation and operation Markets served
Sesame Limited England and Wales UK products and services in the
Sesame Services Limited England and Wales following areas:
Sesame Learning Limited England and Wales • Transaction processing for IFAs
Sesame General Insurance Services Limited England and Wales • Research and compliance
services
• Broker support services
In addition to the companies shown above, the Group also holds investments in a number of other subsidiary undertakings, which in the
Directors’ opinion do not significantly affect the figures in the consolidated financial statements. Details of all Group companies will be
annexed to the Company’s next annual return, in compliance with section 231 and Parts I and II of Schedule 5 of the Companies Act 1985.
Page 97

Notes to the company financial statements
continued
F. Debtors falling due in more than one year
all figures in £ millions 2006 2005
Amounts due from subsidiary undertakings 668.6 755.6
Other debtors 0.8 0.7
G. Debtors falling due within one year
Page 98 Misys plc Annual Report 2006
669.4 756.3
all figures in £ millions 2006 2005
Amounts due from subsidiary undertakings 24.1 43.7
Corporation tax recoverable 15.0 –
Other debtors 0.6 2.7
Prepayments 0.6 0.7
H. Derivative financial instruments
40.3 47.1
31 May 2006 1 June 2005
all figures in £ millions Assets Liabilities Assets Liabilities
Interest rate swaps 0.1 – – –
Forward foreign currency contracts 1.5 (1.5) 1.8 (2.4)
I. Loans and overdrafts falling due within one year
1.6 (1.5) 1.8 (2.4)
2005
all figures in £ millions 2006 (restated)
Bank loans and overdrafts 37.3 52.8
Loan notes 1.2 2.1
38.5 54.9
The loan notes were issued on the acquisition of DBS Management plc. The loan notes are interest bearing at a floating rate linked to LIBOR,
denominated in sterling and are repayable on demand.
J. Other creditors falling due within one year
all figures in £ millions 2006 2005
Trade creditors 2.5 1.1
Amounts due to subsidiary undertakings 41.4 84.7
Corporation tax 8.1 10.7
Other taxation and social security 0.3 0.7
Other creditors 0.9 1.0
Accruals 4.3 4.9
57.5 103.1
K. Provisions for liabilities and charges
all figures in £ millions Property Other Total
At 1 June 2005 0.4 0.4 0.8
Utilisation of provisions (0.2) (0.4) (0.6)
At 31 May 2006 0.2 – 0.2

L. Contingent liabilities
The Company has entered into a netting arrangement with its bankers, under which certain of the Group’s liabilities may be offset by the funds
held at bank by other Group undertakings. The Directors are of the opinion that this arrangement does not have a material impact on the
results and financial position of the Company.
Contingent liabilities that are quantifiable arise from property rental guarantees that have been issued in the normal course of business and
also from bonds that have been issued in support of tenders submitted to prospective customers. These amount to £9.7m (2005: £8.5m).
There are contingent liabilities that arise in the normal course of business in respect of guarantees in relation to subsidiaries. These are not
expected to result in a material gain or loss to the Company.
M. Called up share capital
The Company has authorised share capital of 750,000,000 (2005: 750,000,000) 1p ordinary shares. The table below reconciles the allotted and
fully paid share capital to those shares not held by the Company.
all figures in numbers Allotted, fully paid share capital Treasury MEST ESOP Total
At 1 June 2005 559,407,803 (51,062,000) (23,020,128) (129,482) 485,196,193
Purchase of own shares – (11,740,000) (161,396) – (11,901,396)
Share options exercised 319,233 2,408,564 814,886 – 3,542,683
Cancellation of treasury shares (8,000,000) 8,000,000 – – –
At 31 May 2006 551,727,036 (52,393,436) (22,366,638) (129,482) 476,837,480
Further information is provided in note 33 of the Group accounts.
N. Share capital and reserves
Share Capital Profit and
Share premium redemption loss
all figures in £ millions capital account reserve account
At 1 June 2005 restated 5.6 66.5 0.2 111.9
Adjustment on the implementation of FRS 23 and 26 (note B) – – – (0.3)
Profit retained for the year – – – 40.3
Dividends paid – – – (33.7)
Share options exercised – 0.6 – –
Purchase of and other movements of own shares – – – (25.3)
Share options settled from own shares – 0.1 – 4.4
Cancellation of treasury shares (0.1) – 0.1 –
Share-based payments – – – 9.8
At 31 May 2006 5.5 67.2 0.3 107.1
Share Capital Profit and
Share premium redemption loss
all figures in £ millions capital account reserve account
At 1 June 2004 5.6 65.3 0.2 39.0
Profit retained for the year – – – 125.8
Dividends paid – – – (33.5)
Share options exercised – 1.2 – –
Share options settled from own shares – – – 2.5
Purchase of and other movements in own shares – – – (51.5)
At 31 May 2005 as reported 5.6 66.5 0.2 82.3
Prior year adjustment (note B) – – – 29.6
At 31 May 2005 as restated 5.6 66.5 0.2 111.9
Page 99

Five year financial record
Page 100 Misys plc Annual Report 2006
Prepared under IFRS Prepared under UK GAAP
all figures in £ millions 2006 2005 2005 2004 2003 2002
Revenue
Banking 266.6 245.0 245.0 240.2 278.1 303.2
Healthcare 316.7 290.5 290.5 293.6 297.9 286.0
Sesame 370.0 319.2 319.2 334.9 406.1 417.0
Continuing operations 953.3 854.7 854.7 868.7 982.1 1,006.2
Discontinued operations – – 33.7 31.2 31.4 35.0
Operating profit
953.3 854.7 888.4 899.9 1,013.5 1,041.2
Banking 36.2 40.9 43.9 38.4 53.2 59.8
Healthcare 47.4 42.6 41.7 43.5 48.0 47.2
Sesame 8.6 6.3 6.5 10.3 20.8 16.6
Group (8.6) (6.4) (6.3) (5.3) (3.7) (1.0)
Continuing operations excluding exceptional items 83.6 83.4 85.8 86.9 118.3 122.6
Exceptional items (27.8) (11.6) (8.9) (8.0) – (18.7)
Goodwill amortisation for continuing operations – – (52.1) (63.5) (59.9) (56.9)
Discontinued operations – – 15.8 14.8 12.9 12.2
55.8 71.8 40.6 30.2 71.3 59.2
Non operating exceptional items – – (2.7) 0.4 0.3 (2.2)
Interest and other finance costs (16.3) (10.5) (10.3) (7.5) (10.7) (15.4)
Profit on ordinary activities before taxation 39.5 61.3 27.6 23.1 60.9 41.6
Tax on profit on ordinary activities (13.5) (14.7) (12.8) 1.4 (14.9) (12.8)
Profit on ordinary activities after taxation 26.0 46.6 14.8 24.5 46.0 28.8
Profit attributable to discontinued operations 187.1 15.8 – – – –
Equity minority interests – (0.4) (0.4) (0.6) (0.4) (0.6)
Profit attributable to shareholders 213.1 62.0 14.4 23.9 45.6 28.2
Net (debt) funds (94.7) (218.8) (218.8) (183.2) (192.2) (159.3)
pence pence pence pence pence pence
Adjusted basic earnings per share 14.3 14.8 15.6 14.8 18.7 17.6
Adjusted diluted earnings per share 14.2 14.7 15.4 14.6 18.5 17.4
Dividends per share 7.18 6.84 6.84 6.52 5.67 4.93
Adjusted cash flows per share 15.0 12.7 12.7 11.5 19.2 20.1
Average number of employees
number number number number number number
Banking 2,537 2,521 2,521 2,629 2,828 3,071
Healthcare 2,771 2,740 2,740 2,572 2,449 2,239
Sesame 786 884 884 888 917 850
Group 54 56 56 59 58 62
Continuing operations 6,148 6,201 6,201 6,148 6,252 6,222

Investor information
Financial calendar
Ex-dividend date for 2006
final dividend 2 August 2006
Record date for 2006 final dividend 4 August 2006
Annual General Meeting
Final dividend of 4.49p per
4 October 2006
ordinary share to be paid 9 October 2006
Announcement of 2007 interim results January 2007
2007 interim dividend payment date April 2007
Preliminary announcement of 2007 results July 2007
Annual General Meeting
The AGM will take place at 11.30 am on Wednesday 4 October 2006
at The Lincoln Centre, 18 Lincoln’s Inn Fields, London, WC2A 3ED.
The Notice of AGM accompanies this Report and will also be
displayed on the corporate website.
Electronic communications
Shareholders may choose to receive communications from the
Company in electronic format instead of by post. The Company’s
electronic communications capability is provided by Lloyds TSB
Registrars via their internet-based service, Shareview. Shareview
allows shareholders to view their details online, download dividend
mandate and share transfer forms as well as change address and
mandate details. Shareholders are also able to elect to receive
annual report and accounts, AGM & EGM Notices and Proxy Forms
(and any accompanying documents) in electronic format instead of
by post. The Company will continue to issue share certificates and
dividend cheques in hard copy format by post.
Register your e-mail address for electronic communications by
logging on to www.shareview.co.uk
For the 2006 AGM, shareholders may register the appointment of
a proxy electronically by going to the Lloyds TSB Registrars proxy
appointment website at www.sharevote.co.uk and inputting the voting
reference number when prompted (the voting reference number may be
found on the proxy form). Alternatively, shareholders who are members
of CREST can use the CREST electronic proxy appointment service.
Corporate website
This report and more information about the Company’s activities
and financial information is available on the corporate website at
www.misys.com
Misys share price
The Misys share price is quoted in most UK daily national
newspapers under ‘Software & Computer Services’, ‘Support
Services’ or ‘Information Technology’ sections.
Company Secretary and Registered Office
Dan Fitz, Burleigh House, Chapel Oak, Salford Priors, Evesham,
WR11 8SP, UK. Telephone: +44 (0)1386 871373.
E-mail: group.secretariat@misys.co.uk
The Company is registered in England No. 1360027.
Designed and produced by salterbaxter
Printed by St Ives Westerham Press
Registrar
Lloyds TSB Registrars, The Causeway, Worthing, BN99 6DA, UK.
Telephone: (from UK) 0870 600 3964; (from outside UK) +44 121 415
7047; www.shareview.co.uk
Enquiries about holdings of Misys plc shares should be directed to
the Registrar.
Direct dividend payments
The Direct Dividend Payment service enables future dividends to be
paid automatically into a bank or building society account. Benefits of
the service to shareholder’s include:
• No lost dividend cheques in the post
• The dividend payment is received more quickly as the payment
reaches the shareholders account on the date of payment.
The benefit to Misys is improved efficiency through lower postage
charges. To register for this service, please call Lloyds TSB
Registrars on the number above to request a direct dividend payment
form or log onto Shareview at www.shareview.co.uk. Alternatively, the
direct dividend payment form can be downloaded from the Investor
section on the corporate website.
Sharedealing services
This service has been established with the Company’s brokers,
JPMorgan Cazenove Ltd, and is designed to provide shareholders
with a simple way of buying and selling Misys shares by post. Further
information can be obtained from JPMorgan Cazenove Ltd at the
address below.
Alternatively, shareholders can make use of Lloyds TSB Registrars
sharedealing facilities either by telephoning Lloyds TSB Registrars
on 0870 850 0852 or by logging on to www.shareview.co.uk/dealing
Bankers
Lloyds TSB Bank plc
25 Gresham Street, London
EC2V 7HN, UK
Investment bank and
stockbrokers
JPMorgan Cazenove Ltd
20 Moorgate, London
EC2R 6DA, UK
Legal advisers
Allen & Overy LLP
One New Change
London EC4M 9QQ, UK
Debevoise & Plimpton LLP
919 Third Avenue, New York
NY 10022, USA
Shearman & Sterling LLP
Broadgate West
9 Appold Street
London EC2A 2AP, UK
Page 101

Head Office
Burleigh House, Chapel Oak
Salford Priors, Evesham
WR11 8SP, UK
T: +44 (0)1386 871373
F: +44 (0)1386 871045
Corporate Office
125 Kensington High Street
London, W8 5SF, UK
T: +44 (0)20 7368 2300
F: +44 (0)20 7368 2400
Misys Banking Systems
1 St George’s Road, Wimbledon
London, SW19 4DR, UK
T: +44 (0)20 8879 1188
F: +44 (0)20 8947 3373
Misys Healthcare Systems
8529 Six Forks Road, Raleigh
North Carolina, 27615, USA
T: +1 919 847 8102
F: +1 919 846 1555
Sesame
Oasis Park, Stanton Harcourt Road
Eynsham, Witney, OX29 4AE, UK
T: +44 (0)1865 886000
F: +44 (0)1865 886001
www.misys.com