Misys plc

Misys plc

SUMMARY =
RESULTS

           &n=
bsp;           &nb=
sp;           &nbs=
p;     Like for like           &n=
bsp;            =

           &n=
bsp;           &nb=
sp;           &nbs=
p;       revenues            =
Like for like  =

           &n=
bsp;    Statutory revenues         (note =
2)          =
return on revenue

           &n=
bsp;        2005     2004         2005       =
2004        2005    2004 =

           &n=
bsp;          =
=A3m       =A3m           =
=A3m         =A3m           =
%       % =

Banking           &n=
bsp;  245      240          =
238        222          =
18      17 =

Healthcare           290      =
294          =
288        273          =
15      15 =

General           &n=
bsp;           &nb=
sp;           &nbs=
p;            =
;            =
           =

Insurance           &n=
bsp; 34       31           =
34         31          =
47      46 =

Sesame           &n=
bsp;   319      335          =
319        335           =
2       3 =

Group           &n=
bsp;      -        -            =
-          =
-           =
-       - =

Continuing           &n=
bsp;           &nb=
sp;           &nbs=
p;            =
;            =
        =

operations           =
888      900          =
879        861          =
11      11 =

           &n=
bsp;           &nb=
sp;           &nbs=
p;            =
Add back           &n=
bsp;           &nb=
sp;           &nbs=
p;       =

           &n=
bsp;           &nb=
sp;  Statutory      Operating    Goodwill        =
Adjusted      Like for like

           &n=
bsp;          operating profit  exceptional amortisation  operating profit operating =
profit

           &n=
bsp;           &nb=
sp;           &nbs=
p;     (note 1a)    (note 1b)       (note 1)         (note =
2)    =

           &n=
bsp;           &nb=
sp;  2005     2004 2005   2004   2005   2004    2005   2004     2005    2004 =

           &n=
bsp;           &nb=
sp;   =A3m       =A3m    =A3m     =A3m     =A3m     =A3m     =A3m      =
=A3m       =A3m      =A3m =

Banking           &n=
bsp;        36       =
27     =
-      =
-      =
8     =
12     =
44      39       =
43      37

Healthcare           &n=
bsp;     20       20     -      -     22     23     42      43       =
43      40

General =
Insurance          =
16       15     -      -      -      -     16      =
15       16      =
15  =

Sesame           &n=
bsp;        (25)     (27)    9      8     22     29      6      =
10     =
   6      =
10  =

Group           &n=
bsp;          =
(6)      (5)    -      -      -      -     (6)     (5)      =
(6)     =
(5)

Continuing =
operations      41       =
30     =
9      =
8     =
52     =
64    =
102     =
102      102      =
97  =

           &n=
bsp;           &nb=
sp;         =
Statutory           &n=
bsp;   Adjusted  =

           &n=
bsp;           &nb=
sp;           &nbs=
p;            =
;         (note =
3)  =

           &n=
bsp;           &nb=
sp;         2005  2004           &n=
bsp;  2005 2004

           &n=
bsp;           &nb=
sp;           =
=A3m    =
=A3m           &n=
bsp;    =A3m   =A3m

Non operating =
exceptional items           &n=
bsp;           &nb=
sp;            =

           &n=
bsp;           =
(note 4)   =
(3)     =
0           &n=
bsp;     -     -

         Profit =
before taxation    =
28    =
23           &n=
bsp;    91    94

          =
Profit after taxation    15    25                7=
9    =
81

           &n=
bsp;         Net =
income    =
14    =
24           &n=
bsp;    78    80

       =
Basic earnings per share  =
2.9p  4.4p           &n=
bsp; 15.6p 14.8p

   Full year dividend per =
share 6.84p 6.52p           &n=
bsp;            =

           &n=
bsp;           =
Net debt   =
219   183           &n=
bsp;            =

Notes:

1.        =
Adjusted operating profit is stated before goodwill =
amortisation

totalling =A352.1m (2004: =A363.5m), =
all on continuing operations and, in =
respectof

Sesame, operating exceptional items of =
=A38.9m (2004: =A38.0m).

a.        =
The operating exceptional items of =A38.9m (2004: =A38.0m) relate =
to the

estimated additional costs and redress =
payments associated with special

regulatory reviews =
and endowment complaints which are discussed in =
greater

detail on page =
11.

b.       =
Goodwill amortisation totalled =A352.1m (2004: =A363.5m) analysed =
as

Banking: =A38.4m (2004: =A311.5m), Healthcare =
=A321.5m (2004: =A322.8m) and Sesame =A3

22.2m =
(2004: =A329.2m).

2.        =
The 'like for like' results are stated before the =
operating

exceptional items and the charge for =
goodwill amortisation, and 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 =
2005.

a.        =
The businesses disposed of in the prior year related solely to =
the

Banking Division and in the prior year =
contributed incremental revenue of =A3

13.3m and =
operated at breakeven.

b.       =
The businesses acquired in the current and prior year =
contributed

incremental revenue and operating =
profit (pre goodwill amortisation) for

Banking: =
revenue of =A37.3m and a profit of =A30.5m and for Healthcare: revenue =
=A3

2.6m and loss of =
=A30.8m.

c.        =
Restating the results for 2004 using the average exchange rates =
for

2005 has decreased 2004 revenues by =A326.3m =
(Banking: =A35.6m and Healthcare: =A3

20.7m) and =
operating profit =A34.5m (Banking: =A31.3m, Healthcare: =A33.2m).  The

most =
significant impact is from the movement in the US dollar, where =
the

average exchange rate in 2005 was US$1.86:=A31 =
compared to US$1.73:=A31 in 2004.

3.     Adjusted to =
exclude exceptional items, goodwill amortisation and =
the

2004 exceptional tax credit in respect of prior =
years.

4.     Non =
operating exceptional items relate to the impairment of assets =
on

the post year end sale of a business of =A32.7m =
and in respect of the prior year

a profit on the =
disposal and part disposal of operations of =
=A30.4m.

CHAIRMAN'S =
STATEMENT

In this =
statement a year ago I set out our objectives and strategy as =
a

company.  =
We had set ourselves the challenge of leading our industry =
in

customer satisfaction, growth and total =
shareholder return.  I =
said that we

would achieve this goal principally =
through organic development, and that =
our

competitive advantage would come from the =
skills we built - skills in product

development and =
professional services as much as in deal making or =
financial

control.  I also talked about the importance of the Misys =
brand, our ability to

manage talent, our =
productivity and the continuing management of our =
portfolio.

None of this =
has changed.  But over the =
past year we have turned our words into

actions, =
and backed up our intentions with our financial commitment.  =
During

the year, like for like R&D =
investment in our core businesses was =A388m, =
an

increase of 10% on the prior year.  We have pushed our key product =
development

plans forward aggressively, built up =
our development and service centres in

India and =
the Philippines, installed systems and infrastructure to =
support

better sales and service delivery, and =
further strengthened our management

teams. =

A key element =
of these actions was the adoption of a 'Peak =
Performance'

programme to revitalise and unite the =
company around the shared objective of

achieving =
and sustaining best performance again.  This programme began =
by

articulating a clear company purpose and shared =
beliefs.  Over the last =
year we

have embedded this sense of purpose =
throughout the organisation and it has

proved =
hugely popular and motivating.

In terms of =
market conditions, demand for banking software, having been =
subdued

since early 2001, has at last shown some =
consistent, if modest, improvement.

The US =
healthcare IT market overall has remained strong, while the take-off =
in

demand for enterprise clinical systems has =
accelerated.  The general =
insurance

broker systems market in the UK has =
remained stable, while the market served by

Sesame =
- the market for investment, savings, protection and borrowing =
products

- has continued to be =
flat.

This has been =
a year of real progress and, whilst the positive =
market

environment is encouraging, we take more =
comfort from the performance of our

own businesses, =
which have shown renewed vigour in the past year.  =
The

contracts they have won have validated =
the investments we have been making in

our key =
products.

Our beliefs =
about the markets we serve remain unchanged: while =
the

industry-specific software markets remain =
attractive because of their size,

growth and =
potential profitability, they are maturing, and are beginning =
to

consolidate.  One of the most powerful forces driving them in this =
direction is

the need of customers - whether banks =
or healthcare organisations - to work

with fewer, =
larger and more capable vendors in order to drive down the cost =
of

developing and deploying increasingly =
sophisticated systems.  =
These customers

need to work with vendors =
who can offer them a comprehensive solution and =
who

are committed to long-term investment in their =
products.  This trend =
favours

Misys which has the scale, industry =
expertise and financial strength to meet

this =
challenge.

Our intention =
to divest the Sesame business is unchanged.  We have said

previously that =
there are two preconditions which must be met before it will =
be

in shareholders' interests for us to start a =
process to divest the business:

the first is that =
the new multi-tie business model must come to life as =
a

consequence of the Financial Services Authority =
('FSA') 'depolarisation' rule

changes coming into =
effect, and the second is that we must see some evidence =
of

a sustainable improvement in trading conditions, =
for which stability in the

size of the Sesame =
membership would be a good proxy.  Although the multi-tie is

still =
subject to regulatory approval, both of these preconditions are now =
close

to being met and we have appointed Lexicon =
Partners, the specialist investment

bank, to help =
us with the disposal of this business.

Notwithstanding=
 our primary focus on organic growth, acquisitions remain =
an

important means of developing our business.  On 7 July 2005 we acquired =
Almonde

Inc, a vendor of risk management systems, =
enabling us to extend the Basel II

functionality of =
our banking offering.

We have also =
continued our share buyback programme in order to enhance =
the

company's financial performance.  The increase in the level of =
debt at the year

end is partly a consequence of =
this share buyback programme.  =
I am confident

that the financial gearing we =
have taken on is prudent.

Our employees =
have contributed with energy and enthusiasm to our shared =
purpose

and their efforts have played a major part =
in the progress we have achieved in

the past =
year.  I thank them for =
their hard work and commitment.

We have no =
doubt that the actions we have taken to position Misys for =
growth

will enable us to make further =
progress.  We have a great =
deal more to do - I

am confident that we have the =
management, the talent, and the will to do =
it.

FINANCIAL =
SUMMARY

In the year =
ended 31 May 2005 statutory revenues were =A3888m, 1% below =
the

previous year (2004: =A3900m).  Statutory operating profit was =
=A341m (2004: =A330m),

but, when adjusted to =
exclude operating exceptional items and =
goodwill

amortisation, was =A3102m (2004: =
=A3102m).  Basic earnings =
per share were 2.9 pence

(2004: 4.4 pence) and =
adjusted basic earnings per share were 15.6 pence =
(2004:

14.8 pence), an increase of 6%.  Our cash performance has =
remained strong with

operating cash flow of =A389m =
(2004: =A398m).  After =
spending =A353m buying back 26m

shares at an =
average cost of 200 pence per share, net debt at =A3219m was =
=A336m

higher than at the end of May =
2004.

During the =
year, along with the rest of the financial services industry, =
Sesame

has experienced a significant increase in =
the volume of complaints from

consumers about =
advice given by Independent Financial Advisers regarding =
the

sales of endowment polices.  Given the expectation that the =
volume of future

complaints will be significant, a =
provision of =A310m has been made for =
the

Directors' best estimate of the cost of =
complaints that will be incurred in the

future with =
respect to past sales of endowments.  This is the largest item

within =
the net operating exceptional charge of =A39m that has been made this =
year

in relation to regulatory reviews and future =
endowment complaints costs.

Exchange rates =
once again had an impact on our reported results.  Had =
exchange

rates remained unchanged, growth in =
revenues and adjusted operating profits

would have =
been higher by 3% and 5% respectively.

The Board is =
recommending a final dividend of 4.28 pence per share.  This =
would

raise the full year dividend to 6.84 pence, =
an increase of 5% over last year.

BOARD

As previously =
announced, Ian Dyson will be retiring from the Board =
following

the Company's Annual General Meeting =
('AGM') in September 2005.  =
In addition,

Bob Ingram has decided not to =
seek re-election at the AGM.  =
We would like to

thank both of them for =
their valuable contribution to the Company.

OUTLOOK

The prospects =
for Misys' future performance have been enhanced by the =
actions

we have taken to reposition the business =
for growth.  In addition, =
in our core

markets, there has been some =
improvement in the demand for banking =
software

while healthcare software demand has =
remained strong.  The =
encouraging results

achieved for the past year =
reflect both these factors.  =
We believe the company

is well positioned to =
continue to make progress.

BUSINESS =
PERFORMANCE AND FINANCIAL REVIEW

The =
information in this section is presented on a 'like-for-like' =
basis.  =
The

'like for like' results are stated =
before operating exceptional items, =
goodwill

amortisation and the incremental benefit =
of acquisitions in the current and

prior periods =
and exclude the results of businesses disposed of in the =
prior

period.  All figures are quoted in sterling using average =
exchange rates for

the year ended 31 May =
2005.

Overview

Overall =
Company revenues for the year at =A3879m were 2% above those of =
the

previous year.

Banking, =
Healthcare and General Insurance all generated increased revenues =
and

operating profits, reflecting our continued =
investment in key products and are

underpinned by =
stronger underlying market conditions, particularly in Banking. =

Sesame's revenues were 5% below the previous year, =
reflecting a continuation of

the weaker market =
conditions seen over the last two years.  The 2% overall

growth in Company =
revenues flowed through to operating profit, which at =
=A3102m

was 5% above the prior year, =
notwithstanding increased development =
expenditure

in both Banking and Healthcare.  Strong growth in profits in =
Banking and good

growth in Healthcare and General =
Insurance was partly offset by the reduction

in =
profits at Sesame.  Group =
operating margins were broadly in line with =
the

prior year.

Banking

Misys Banking =
Systems, one of the leading global providers of =
software

solutions to the banking industry, =
delivered an encouraging performance with

strong =
increases in order intake, revenue and operating profit.  Whilst =
this

performance reflects some improvement in =
market conditions, more importantly it

reflects the =
benefits we are now seeing from our increased investment in =
this

business and its product =
range.

Market =
conditions

Trading =
conditions in the banking software markets, whilst benefiting from =
IT

budgets for the year rising by a relatively =
modest 4-5% on average, remain

mixed with market =
demand varying by region and by sector.  The retail banking

systems =
market has remained especially active, whilst wholesale and =
capital

markets are showing signs of =
improvement.  =
Geographically, marked regional

variations =
continue to exist with developing markets such as China, South =
East

Asia and Eastern Europe in particular =
remaining strong.

The long term =
trend towards greater use by banks of third party =
solutions

continues as banks seek to reduce costs, =
improve efficiency and respond to

increased =
regulatory and customer requirements.  Banks are also continuing =
to

consolidate their IT spending through the =
streamlining of vendor

relationships.  As a consequence, vendors such =
as Misys, who are able to

deliver comprehensive =
solutions, are being awarded larger and more =
complex

contracts.  As we have previously indicated, a feature of these =
larger

contracts is that contract negotiation =
becomes more protracted and it is more

difficult to =
predict when such deals which have been awarded will be =
signed.

Trading =
performance

The momentum =
achieved in the second half of the previous year was =
maintained

throughout 2004/05 with total revenues =
at =A3238m rising by 7%.  =
Initial Licence

Fees ('ILF') order intake at =
=A376m was 16% ahead of the prior year, resulting =
in

both a strong growth in ILF revenues, up 13% for =
the full year and an 18%

increase in the closing =
order book to =A331m.  As =
a consequence of the extended

nature of contract =
negotiation and implementation, the ILF order book is =
being

recognised over a longer period than has =
historically been the case.

Maintenance =
revenues at =A3112m again showed modest growth at 2% ahead of =
last

year.  =
More significantly, professional services revenues which had =
declined

for a number of years grew strongly, =
particularly in the first half, with total

revenues =
at =A346m, 12% higher than the previous year.  The closing order =
book

for professional services is ahead of a year =
ago and this, together with the

stronger ILF order =
intake, means that further growth in professional =
services

revenue should be seen in =
2005/06

Operating =
profit at =A343m was 17% ahead of last year reflecting both the =
strong

growth in revenues and improving =
margins.

Business =
performance

In wholesale =
banking, we were awarded a number of major contracts =
for

MidasPlus, demonstrating the continued success =
of the new version of this core

banking =
product.  To date, 28 =
deals have been signed for MidasPlus, of =
which

eight are for global processing.  Our most significant global =
processing deal

ever was signed during the period =
with Fortis, a Tier 1 European bank.  Fortis,

already a Midas user, is =
deploying MidasPlus with Global Processing across =
both

its commercial and merchant banking =
operations.  This deal =
also includes both

Misys IQ and Misys Message =
Manager, underscoring our view that banks wish =
to

reduce the number of vendors with whom they =
deal.  Significant =
MidasPlus deals

were also won with Raiffeisen =
International (Austria) and HVB (London).

Reflecting the =
functional capability of MidasPlus, the product recently won =
an

award for 'Cash Management Solution of the Year' =
in the Banker =
Technology

Awards.

Our wholesale =
banking partnership with S1 Corporation for =
multi-channel

architecture was recently extended to =
retail banking.  Already, =
this

partnership is demonstrating value with the =
award of a significant deal from

Indusind in India =
soon after our year end.  =

In retail =
banking, where we are already the largest international =
software

provider, our increased investment in our =
Equation product and our continued

investment in =
talent, have helped Misys Retail Banking achieve a =
significant

increase in order intake.  This included a major contract =
for the existing

version of Equation with AK Bars =
in Russia, a new customer.  =
The development of

EquationPlus continues to =
plan and we expect this product to be fully =
available

for general release during calendar 2006 =
with the first components deliverable

during the =
first quarter of 2006.

In risk =
management, we have recently announced the acquisition of Almonde, =
the

regulatory risk management software firm.  This builds on the success of =
our

previous partnership arrangement with them and =
allows us to extend the Basel II

functionality of =
our offering.  We won =
several significant risk contracts

during the year =
including those with Bayerische Landesbank in Germany =
and

Standard Bank South Africa.  The contract pipeline for this =
product area is

encouraging as banks work to meet =
the requirement to embed risk solutions into

their =
IT infrastructures.  Other =
recent contract wins included Albaraka in

Saudi =
Arabia and EBS in Ireland.  =
We also now have around 100 =
employees

dedicated to our risk business in our =
Bangalore development facility.

On 1 June 2005 =
we established our Treasury and Capital Markets =
business,

combining three of our major product =
groups: Summit, Misys OPICS and Misys IQ.

This =
business is led from New York and is one of the largest suppliers =
of

treasury and capital markets systems, with =
around 270 customers worldwide.

Fuelled by the =
demand for systems capable of handling derivatives and =
complex

products, there was particularly strong =
demand for Summit solutions from Asia.

New name =
contracts awarded included the Agricultural Bank of China, the Bank =
of

Communication (Hong Kong) and First Commercial =
Bank (Taiwan).  Within the =
US,

Summit added new customers within the =
structured fixed income market including

FHLB =
Pittsburgh and BB&T.

We continue to =
make significant investment in Opics, with OpicsPlus expected =
to

be launched shortly.  Opics performed strongly during the year with =
contracts

signed worldwide including a major =
contract with SEB in Sweden and a =
contract

extension with UBOC in the =
US.

In line with =
our stated strategy at its acquisition, Misys IQ has extended =
its

distribution footprint, winning contracts in =
new geographies including Europe.

In addition, =
Misys IQ was awarded one of its largest ever contracts by US =
based

JPMorgan Chase.

We have =
continued to invest in both developing and increasing the pool =
of

talent we have within Misys Banking =
Systems.  During the year =
we made a

significant number of appointments of =
high calibre individuals across =
the

business.

Healthcare=

Misys =
Healthcare Systems is a top five provider of IT solutions in the =
US

healthcare market.  It delivered a strong performance with good growth in =
order

intake, revenues and operating profit.  The benefit of investment in =
our

clinical portfolio is increasingly =
evident.

Market =
conditions

Healthcare =
provision and spending remain near the top of the political =
agenda

in the United States, and there is a strong =
push to transform delivery by

promoting adoption of =
inter operable electronic health records.  This push is

evidenced by the =
appointment of the first National Coordinator for =
Health

Information Technology.  Health information systems and =
electronic medical

records, especially those that =
integrate the major venues of care and connect

all =
care givers seamlessly, are seen as essential to improving the quality =
of

clinical outcomes as well as reducing =
administrative costs.  The =
shift and

acceleration in spending towards such =
clinical systems continues.

Trading =
performance

Revenues at =
=A3288m were 6% ahead of last year with growth occurring in all =
major

revenue streams with the exception of =
transaction processing.

Order intake =
for professional services was ahead in all businesses, =
feeding

through to revenues, which at =A329m grew =
10% in the year.  This =
growth reflects

the increasing importance of =
professional services in our total order =
intake

mix.

ILF order =
intake at =A356m was 7% ahead of last year.  This reflected the

continued =
strong demand for Misys EMR and Misys Homecare, partly offset =
by

reduced ILF order intake in Hospital Systems as =
a result of delays in

finalising a number of larger =
Misys CPR orders.  Growth =
in ILF order intake led

to growth in ILF revenues, =
which at =A357m were 5% ahead of the prior year. =

Maintenance =
revenues also showed good growth at 7% ahead of last year.  =
In

contrast, transaction services revenues =
fell by 1%.

As previously =
indicated, one-off costs relating to the integration of Misys =
CPR

have been incurred over the last two years and =
this integration was completed

in line with our =
original plans by 31 May 2005.  =
The costs incurred in

financial year 2004/05 =
amount to =A33.4m which were in addition to the =
=A32.4m

incurred in the year ended 31 May =
2004.  In addition, as =
announced in June

2004, investment in the Misys EMR =
product is being accelerated and it is

anticipated =
that the incremental spend over the two years ending 31 May =
2006

will be =A34.3m.  These expenditures are also proceeding according to =
plan with

costs of =A32.2m incurred in the year =
ended 31 May 2005.  It is =
expected that the

balance of these costs will be =
incurred in the current financial year, with =
the

majority in the first half.  These costs, and those related =
to Misys CPR, have

not been treated as exceptional =
and have been charged against operating

profit. =

Operating =
profit at =A343m was 6% ahead of last year, notwithstanding =
the

increased investment in Misys CPR and EMR.  At 17%, margins before =
the

increased investment in Misys CPR and EMR were =
slightly ahead of last year.

Margins, after the =
increased investment, were broadly in line with last year. =

Business =
performance

We are seeing =
the benefit of the investment in our clinical portfolio.  =
In

particular, sales activity for Misys EMR =
and Misys Homecare was particularly

encouraging =
with some significant customer wins.

In the year =
ended 31 May 2004, we signed a contract with Michigan based =
POH

Medical Center, our first combined Misys CPR / =
Misys EMR deal.  =
The

enterprise-wide, integrated, =
computer-based patient record system went live =
in

April 2005 and now more than 1,000 healthcare =
professionals are using it to

communicate and =
coordinate care throughout patient visits, from registration =
to

clinical care to final =
discharge.

A large number =
of other Misys EMR contracts were signed during the past =
year

including: Mercy Medical Group, a 150 =
physician group practice, which deployed

the =
solution to 500 users across 64 locations; Fremont Medical Centers, a =
large

multi-location practice that selected Misys =
EMR for its physicians and their

staff; and United =
Physicians which selected Misys EMR and Misys Tiger as =
the

clinical and practice management solutions for =
its 1,500 physician members.

Misys Homecare =
won significant contracts including Metropolitan Jewish =
Health

System in New York, which signed a =
multimillion dollar agreement to bring the

solution =
to over 400 users in its certified home care agencies.  =
Cleveland

Clinic Home Care Services selected =
Misys Homecare to manage its clinical,

financial =
and administrative IT needs for 300 clinicians and 140 =
business

personnel.

Large =
contracts for other Misys Healthcare Systems solutions included: =
an

agreement with the University of South Alabama =
Health System for Misys

Laboratory; a contract with =
50 physicians and providers at Summit Medical =
Group

in Kentucky for Misys Vision; and a contract =
with Texas Health Resources to

extend the Misys =
Radiology information system across its =
organisation.

Transaction =
services saw a decline in revenues, following further =
price

compression in parts of the claims processing =
market.  This trend was =
evident

during the previous period.  However, this business unit =
put in place some

significant partnerships with =
organisations such as  =
Availity and Post-N-Track

that strengthen =
its connections to payer organisations including =
UnitedHealth

Group, one of the US's largest =
providers.

Our clinical =
portfolio serves all venues of care - hospitals, =
physicians'

offices, the patient's home and long =
term care facilities.  The =
quality of our

offering was recently recognised in =
the 2004 KLAS Vendor Relationship

Evaluation when a =
number of our products were ranked first or second in =
their

categories.

Misys Optimum =
is our suite of clinical solutions covering each venue of care. =

In February 2005 we announced Misys Connect, a new =
web-based data sharing

solution, to provide =
additional functionality to Misys Optimum users.  =
Misys

Connect allows care givers to access =
patient information wherever it is held

without =
leaving their current application and is an important step in =
linking

community based physicians with the acute =
care enterprise to improve decision

making and =
hospital-physician relations.

While our =
focus remains primarily on the US healthcare IT market, given =
its

size and potential, the compatibility and =
strength of our product offering

means that we =
continue to take advantage of international opportunities. =

During the year major hospital systems projects =
went live in both the United

Kingdom and Saudi =
Arabia and are performing well.

General =
Insurance

Misys General =
Insurance is the leading supplier of solutions for =
insurance

intermediaries in the UK. The market is =
generally stable and records =
steady

growth.

Record =
revenues of =A334m were 8% ahead of last year driven by our =
continued

commitment to product development.  Our new product launches have =
performed

well.  Premium Finance revenues were boosted by the =
substantial increase in

electronic transmission of =
documentation between finance providers =
and

intermediaries whilst OASys Commercial, which =
supports the digitisation of

commercial lines =
insurance, is well positioned for future growth.  With =
good

cost control and the strong growth in =
revenues, operating profit at =A316m set

another =
new record for the business.

The ongoing =
investment in our products and our consequent ability =
increasingly

to offer non-standardised solutions =
has enabled us to attract larger customers

such as =
the partnerships established with both Towergate, one of the UK's =
top

insurance intermediaries, and Carole Nash, the =
biggest broker for =
motorbike

insurance.

Sesame

Sesame is a =
leading provider of support services to financial advisers in =
the

UK.  =
While the market for savings and protection products has remained =
flat,

there was strong take up of Sesame's new =
service offerings by its members and

reinforced =
brand awareness through targeted marketing initiatives. =

Today, we are =
announcing Sesame's multi-tie proposition.  Sesame Select offers

products =
from five of the UK's leading financial services providers: AXA, =
Legal

& General, Norwich Union, Prudential and =
Standard Life.  Sesame is =
confident

that its multi-tie proposition will be =
attractive to a significant number of

advisers, =
allowing Sesame, over time, to build a new and profitable =
revenue

stream.

With the FSA =
extending its reach to include the regulation of mortgages =
and

general insurance during the past year, Sesame =
has created innovative

market-leading product and =
service propositions for its existing and =
future

members.  Membership growth over the year was encouraging: the =
number of

Registered Individuals (RIs) across =
Sesame's regulated network of =
appointed

representatives together with Sesame =
Direct, the service company for directly

regulated =
firms, grew by over 20% to 8,150 members at the year =
end.

Revenues at =
=A3319m were 5% below last year, although the rate of =
reduction

slowed in the second half.  Operating profit of =A36m was =
=A34m below last year,

although slightly ahead of =
internal expectations at the start of the year, =
as

mortgage revenue started earlier than expected =
and there were benefits from the

delay of costs =
associated with the launch of the multi-tie =
proposition.

Misys =
announced on 11 July 2005 that Sesame had sold its 60 per cent stake =
in

AssureWeb, the B2B internet portal for =
transaction of life and pensions

business, to the =
five existing investing providers (AEGON UK, Clerical =
Medical,

Friends Provident, Norwich Union and =
Scottish Widows). The investing providers

will see =
their collective ownership stake in AssureWeb increase from 40% =
to

100% and have now taken full operational =
responsibility.

It is Misys' =
stated intention to divest the Sesame business.  As announced =
in

our Trading Update on 22 June 2005, Lexicon =
Partners, the specialist corporate

finance firm, =
has been appointed to undertake preparatory work.  =
Misys'

expectations continue to be that =
divestment of Sesame will take place in the

next 12 =
months.

OTHER =
FINANCIAL INFORMATION

Unless =
otherwise stated, the information in this section is presented on =
a

statutory basis.

Group =
costs  =

The net charge =
for the year, at =A36m, is an increase of =A31m on last year =
and

includes =A33m (2004: =A33m) profit arising on =
the disposal of warrants held in

relation to =
WebMD's common stock.  =
This is the last of the three tranches =
of

warrants and accordingly Group costs next year =
will not benefit from this

profit. =

Operating =
exceptional items

A net =
operating exceptional charge of =A39m has been made this year in =
relation

to regulatory review and future endowment =
complaints costs.

During the =
year, 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 =
sales of endowment polices.  =
This is due to increased

consumer awareness, =
recent poor stock market conditions and action taken by =
the

majority of product providers to crystallise =
their liabilities with regard to

past endowment =
complaints.  Given the =
significant levels of endowment

complaints =
currently being received, the increasing rate at which these =
are

being upheld and the expectation that the =
volume of future complaints will be

significant, a =
provision of =A310m has been made for the Directors' best =
estimate

of the cost of complaints that will be =
received in the future with respect to

past sales =
of endowments.

Separately, =
and 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 FSA during the year.  As a result of the

review Sesame =
agreed to reassess the conclusions reached on historic =
complaints

received, and based on the results of =
this work to date a charge of =A33m has

been =
recorded during the year.

These charges =
have been partly offset by a credit of =A34m following =
a

reappraisal of the =A38m provision charged last =
year in respect of a former

network member =
review.

Further =
details of these items can be found in notes 3, 16 and =
18.

Profit before =
tax and earnings per share ('EPS')

Statutory =
profit before taxation at =A328m was =A35m above last year, =
reflecting

the improvement in the statutory =
operating results discussed above.  The tax

charge on ordinary =
activities at =A313m was broadly in line with last =
year,

although last year also benefited from an =
exceptional tax credit in respect of

prior years of =
=A314m.  The underlying =
effective tax rate on profit before

taxation, =
exceptional items and goodwill amortisation at 14% was broadly =
in

line with last year.

Basic EPS at =
2.9p was 1.5p below last year.  =
Adjusted basic EPS (adjusted to

exclude =
exceptional items, goodwill amortisation and the 2003/04 =
exceptional

tax credit in respect of prior years =
noted above) at 15.6p (2004:14.8p) was 6%

ahead of =
last year.  In the opinion =
of the Directors, the adjusted basic EPS

provides =
more comparable and representative information on the continuing =
and

established trading activities of the =
Group.

Operating cash =
flow

The Group has =
maintained its strong cash performance with operating cash =
flow

of =A389m (2004: =A398m).  This good performance, which =
follows even stronger cash

generation in prior =
years, resulted from rigorous cash management by =
the

Group's operating businesses.  As a result the cumulative =
operating cash flow

over the last five years of =
=A3573m is =A318m above the cumulative operating =
profit

before goodwill amortisation over the same =
period.  Capital =
expenditure at =A310m

was =A31m below last year's =
level.

The net cash =
inflow from trading before corporate activities (i.e. before =
the

cost of acquisitions, proceeds from disposals, =
dividend payments and financing

including the share =
buyback programme) was in line with last year at =
=A363m

(2004: =A363m).

Dividend =
payments in the full year, being last year's final dividend and =
this

year's interim dividend, totalled =A334m =
compared with =A333m in the prior year.

Net debt, =
interest charges and borrowings

Net debt at 31 =
May 2005 was =A3219m compared with =A3183m at 31 May 2004.  =
This

increase in net debt of =A336m is =
mainly as a result of the share buyback

discussed =
above.

The interest =
and other finance costs charge at =A310m was =A33m higher than =
last

year, due to a combination of increased =
average interest rates and increased

average =
borrowings, the latter due to the share buyback programme towards =
the

end of the year ended 31 May 2004 and during =
the year ended 31 May 2005.

Interest cover, before =
goodwill amortisation, was 10 times.

Profit and =
loss account for the year ended 31 May 2005

           &n=
bsp;           &nb=
sp;           &nbs=
p;            =
;           =
       2005     =
2004

all figures in =
=A3 millions           &n=
bsp;           &nb=
sp;        note    Total    =
Total

Turnover           &n=
bsp;           &nb=
sp;           &nbs=
p;            =
;   2    888.4    899.9

           &n=
bsp;           &nb=
sp;           &nbs=
p;            =
;            =
            =

Operating =
profit           &n=
bsp;           &nb=
sp;           &nbs=
p;       2     40.6     30.2 =

           &n=
bsp;           &nb=
sp;           &nbs=
p;            =
;            =
            &=
nbsp;

Analysed =
as:           &n=
bsp;           &nb=
sp;           &nbs=
p;            =
;            =

Total =
operating profit pre operating exceptional items           &n=
bsp;           &nb=
sp;

and goodwill amortisation           &n=
bsp;           &nb=
sp;           &nbs=
p;   101.6    101.7

Operating =
exceptional items           &n=
bsp;           &nb=
sp;        3     (8.9)    =
(8.0)

Goodwill =
amortisation           &n=
bsp;           &nb=
sp;           &nbs=
p; 12    =
(52.1)   =
(63.5)

           &n=
bsp;           &nb=
sp;           &nbs=
p;            =
;            =
     40.6     30.2

           &n=
bsp;           &nb=
sp;           &nbs=
p;            =
;            =
            &=
nbsp;

Non operating =
exceptional items           &n=
bsp;           &nb=
sp;    3     (2.7)     0.4

           &n=
bsp;           &nb=
sp;           &nbs=
p;            =
;            =
            &=
nbsp;

Net interest =
payable and similar charges           &n=
bsp;       5     (9.6)    =
(6.3)

Other finance =
costs                  &n=
bsp;           &nb=
sp;         6     (0.7)    =
(1.2)

Profit on =
ordinary activities before taxation           &n=
bsp;        27.6     23.1 =

Exceptional =
tax credit in respect of prior years           =
7        -     14.6 =

Tax on ongoing =
ordinary activities                &n=
bsp;        7    (12.8)   =
(13.2)

Tax on profit =
on ordinary activities           &n=
bsp;           &nb=
sp;    (12.8)     1.4

Profit on =
ordinary activities after taxation           &n=
bsp;         14.8     24.5 =

           &n=
bsp;           &nb=
sp;           &nbs=
p;            =
;               &n=
bsp;           &nb=
sp;

Equity =
minority interests           &n=
bsp;           &nb=
sp;           &nbs=
p;    (0.4)    (0.6)

Profit =
attributable to shareholders           &n=
bsp;           &nb=
sp;      14.4     23.9 =

           &n=
bsp;           &nb=
sp;           &nbs=
p;            =
;            =
                &n=
bsp;

Equity =
dividends           &n=
bsp;           &nb=
sp;           &nbs=
p;       8    (33.5)   =
(34.1)

Retained loss =
for the financial year           &n=
bsp;          =
19    =
(19.1)   =
(10.2)

           &n=
bsp;           &nb=
sp;           &nbs=
p;            =
;            =
            &=
nbsp;

           &n=
bsp;           &nb=
sp;           &nbs=
p;            =
;            =
    pence     pence

Dividends per =
share           &n=
bsp;           &nb=
sp;           &nbs=
p;     8    6.84     6.52

           &n=
bsp;           &nb=
sp;           &nbs=
p;            =
;           =
DILUTED        =
BASIC

all figures in =
pence           &n=
bsp;           &nb=
sp;   note   2005 2004      2005 2004 =

Earnings per =
share           &n=
bsp;           &nb=
sp;     9      2.8  4.3       =
2.9  4.4

Goodwill =
amortisation           &n=
bsp;           &nb=
sp;         10.3 =
11.5      =
10.4 11.7

Exceptional =
items after taxation           &n=
bsp;           &nb=
sp;           &nbs=
p;           =

  -    Cost of regulatory reviews and           &n=
bsp;           &nb=
sp;           &nbs=
p;

endowment =
complaints           &n=
bsp;           &nb=
sp;          =
1.8  1.5       =
1.8  1.5

  -    Profit on disposal and part disposal =
of           &n=
bsp;           &nb=
sp;         =

operations           &n=
bsp;           &nb=
sp;           &nbs=
p;        -    (0.1)     -    =
(0.1)

  -    Impairment of assets on the post =
year           &n=
bsp;           &nb=
sp;           =

end sale of a business           &n=
bsp;           &nb=
sp;        0.5  -         0.5  -

Exceptional =
tax credit in respect of prior           &n=
bsp;           &nb=
sp;           &nbs=
p;

years           &n=
bsp;           &nb=
sp;           &nbs=
p;            =
; -    =
(2.6)     =
-    =
(2.7)

Adjusted =
earnings per share                    9      =
15.4 14.6      15.6 14.8 =

i.    All turnover and =
operating profit is derived from continuing =
operations.

ii.    There is no =
difference between the profit on ordinary activities =
before

taxation, the retained loss for the =
financial year, and their historical =
cost

equivalents.

iii.   Adjusted basic and =
diluted earnings per share are presented to =
provide

more comparable and representative =
information on the continuing and

established =
trading activities.  =
Accordingly, the adjusted basic and =
diluted

earnings per share figures exclude =
exceptional items, goodwill amortisation and

the =
2004 exceptional tax credit in respect of prior =
years.

Statement of =
cash flows for the year ended 31 May 2005

all figures in =
=A3 millions           &n=
bsp;           =
       note      =
2005      =
2004

Net cash =
inflow from operating activities (see table           &n=
bsp;           &nb=
sp;

below)           &n=
bsp;           &nb=
sp;           &nbs=
p;            =
;          89.2      98.2 =

Returns on =
investments and servicing of finance           &n=
bsp;     (9.8)     (7.0)

Taxation           &n=
bsp;           &nb=
sp;           &nbs=
p;            =
;        (7.2)    =
(18.8)

Capital =
expenditure and financial investment           &n=
bsp;        (9.0)     =
(9.2)

Acquisitions =
and disposals           &n=
bsp;           &nb=
sp;           &nbs=
p;  (8.7)    (22.0)

Equity =
dividends paid           &n=
bsp;           &nb=
sp;           &nbs=
p;      (33.5)    =
(33.3)

Net cash =
inflow before financing           &n=
bsp;           &nb=
sp;        21.0       =
7.9

Financing           &n=
bsp;           &nb=
sp;           &nbs=
p;            =
10    =
(27.0)     =
(8.9)

Decrease in =
cash           &n=
bsp;           &nb=
sp;           &nbs=
p;     11     (6.0)     (1.0)

           &n=
bsp;           &nb=
sp;           &nbs=
p;            =
;            =
            &=
nbsp;

           &n=
bsp;           &nb=
sp;           &nbs=
p;            =
;            =
            &=
nbsp;

Reconciliation =
of net cash flow to movement in net           &n=
bsp;           &nb=
sp;

debt           &n=
bsp;           &nb=
sp;           &nbs=
p;            =
;            =
            &=
nbsp;

Decrease in =
cash           &n=
bsp;           &nb=
sp;           &nbs=
p;            =
(6.0)     =
(1.0)

Cash inflow =
from movement in borrowings           &n=
bsp;            =
(20.9)    =
(83.4)

Increase in =
net debt resulting from cash flows           &n=
bsp;     (26.9)    (84.4)

Bank loan and =
finance leases acquired           &n=
bsp;           &nb=
sp;      -      =
(0.7)

Accretion on =
payment to Cordon Limited           &n=
bsp;       11     (7.1)      0.4 =

Amortisation =
of issue costs           &n=
bsp;           &nb=
sp;      11     (0.1)     (1.1)

Inception of =
finance leases           &n=
bsp;           &nb=
sp;      11     (1.1)     (1.1)

Differences on =
exchange           &n=
bsp;                &n=
bsp;     11     (0.4)     22.9

Increase in =
net debt           &n=
bsp;           &nb=
sp;           &nbs=
p;       (35.6)    =
(64.0)

Opening net =
debt           &n=
bsp;           &nb=
sp;           &nbs=
p;          =
(183.2)   =
(119.2)

Closing net =
debt           &n=
bsp;           &nb=
sp;           &nbs=
p;     11   (218.8)   (183.2)

           &n=
bsp;           &nb=
sp;           &nbs=
p;            =
;            =
            &=
nbsp;

           &n=
bsp;           &nb=
sp;           &nbs=
p;            =
;            =
            &=
nbsp;

Net cash =
inflow from operating activities           &n=
bsp;           &nb=
sp;            &n=
bsp;

Operating =
profit           &n=
bsp;           &nb=
sp;           &nbs=
p;            =
40.6      30.2 =

Goodwill =
amortisation           &n=
bsp;           &nb=
sp;            =
12     =
52.1      63.5 =

           &n=
bsp;           &nb=
sp;           &nbs=
p;            =
;            =
    92.7      93.7 =

Depreciation =
charge net of (profit) loss on disposal           &n=
bsp;           &nb=
sp;

of fixed assets           &n=
bsp;           &nb=
sp;           &nbs=
p;            =
;  9.9      11.0 =

Difference =
between pension charge and cash           &n=
bsp;           &nb=
sp;           &nbs=
p;

contributions           &n=
bsp;           &nb=
sp;           &nbs=
p;            =
;      -      =
(8.1)

Increase in =
stocks (including contract work in           &n=
bsp;           &nb=
sp;         =

progress)           &n=
bsp;           &nb=
sp;           &nbs=
p;            =
;       (2.7)     =
(2.1)

(Increase) =
decrease in debtors           &n=
bsp;           &nb=
sp;         (40.5)     17.4 =

Increase =
(decrease) in creditors and provisions           &n=
bsp;     34.3     (22.3)

(Decrease) =
increase in deferred income           &n=
bsp;           &nb=
sp;  (6.1)      4.3 =

Other non cash =
movements           &n=
bsp;               &n=
bsp;           &nb=
sp; 1.6       4.3 =

           &n=
bsp;           &nb=
sp;           &nbs=
p;            =
;            =
    89.2      98.2 =

Other non cash =
movements primarily comprise the profit and loss account =
charge

in relation to the Group's share =
plans.

Statement of =
total recognised gains and losses for the year ended 31 May =
2005

all figures in =
=A3 millions           &n=
bsp;           &nb=
sp;         note    2005     =
2004

Profit for the =
financial year           &n=
bsp;           &nb=
sp;            =
14.4     =
23.9

Exchange =
adjustments offset in reserves           &n=
bsp;         19    2.0    =
(56.6)

Actuarial =
(losses) gains recognised in post retirement           &n=
bsp;           &nb=
sp;

benefit scheme           &n=
bsp;           &nb=
sp;           &nbs=
p;          19   (2.5)     4.8 =

Movement in =
deferred tax relating to pension liability      19    0.8     =
(3.9)

Total =
recognised gains and losses for the financial year         14.7    =
(31.8)

Reconciliation =
of movements in equity shareholders' deficit for the year =
ended

31 May 2005

all figures in =
=A3 millions           &n=
bsp;           &nb=
sp;        note      =
2005    =
2004

Total =
recognised gains and losses for the financial year          =
14.7   =
(31.8)

Equity =
dividends           &n=
bsp;           &nb=
sp;           &nbs=
p;       8     (33.5)  =
(34.1)

New share =
capital subscribed           &n=
bsp;           &nb=
sp;           &nbs=
p;   1.2     2.2

Payments for =
the purchase of own shares           &n=
bsp;        19    (52.9)  =
(94.5)

Other =
movements on investment in own shares           &n=
bsp;    19      3.1     2.7 =

Goodwill =
written back on disposal           &n=
bsp;           &nb=
sp;           =
-     =
16.2

(Increase) =
decrease in cumulative goodwill written off           &n=
bsp;           &nb=
sp;

to reserves due to exchange =
adjustments           &n=
bsp;        19     (3.1)   65.7 =

Net movement =
in equity shareholders' deficit           &n=
bsp;         (70.5)  =
(73.6)

Opening equity =
shareholders' deficit           &n=
bsp;           &nb=
sp;    (185.4) (111.8)

Closing equity =
shareholders' deficit           &n=
bsp;           &nb=
sp;    (255.9) (185.4)

Balance sheet =
at 31 May 2005

all figures in =
=A3 millions           &n=
bsp;           &nb=
sp;         note      =
2005    =
2004

Fixed =
assets           &n=
bsp;           &nb=
sp;           &nbs=
p;            =
;            =
        =

Intangible =
assets - goodwill           &n=
bsp;           &nb=
sp;        12    165.0   212.6 =

Tangible =
assets           &n=
bsp;           &nb=
sp;           &nbs=
p;            =
;    24.9    25.1

Investments           &n=
bsp;           &nb=
sp;           &nbs=
p;            =
;         4.1     3.5 =

           &n=
bsp;           &nb=
sp;           &nbs=
p;            =
;            =
      194.0   241.2

           &n=
bsp;                   &n=
bsp;           &nb=
sp;           &nbs=
p;            =
;            =

Current =
assets           &n=
bsp;           &nb=
sp;           &nbs=
p;            =
;            =

Stocks =
(including contract work in progress)           &n=
bsp;    13     13.0    10.2

Debtors           &n=
bsp;           =
           &n=
bsp;           &nb=
sp;      14    188.4   151.4 =

Cash at bank =
and in hand           &n=
bsp;           &nb=
sp;            =
11    =
101.6   107.0 =

           &n=
bsp;           &nb=
sp;           &nbs=
p;            =
;            =
      303.0   268.6

           &n=
bsp;           &nb=
sp;           &nbs=
p;               &n=
bsp;           &nb=
sp;           &nbs=
p;

Creditors =
falling due within one year           &n=
bsp;           &nb=
sp;           &nbs=
p;       =

Bank loans and =
overdrafts           &n=
bsp;           &nb=
sp;           &nbs=
p;      (3.1)  =
(13.9)

Other =
creditors           &n=
bsp;           &nb=
sp;           =
           &n=
bsp;   (214.2) (211.1)

           &n=
bsp;           &nb=
sp;           &nbs=
p;            =
;            =
     (217.3) =
(225.0)

           &n=
bsp;           &nb=
sp;           &nbs=
p;            =
;            =
            &=
nbsp;       =

Net current =
assets           &n=
bsp;           &nb=
sp;           &nbs=
p;             85.7    43.6 =

Total assets =
less current liabilities           &n=
bsp;           &nb=
sp;     279.7   284.8

           &n=
bsp;           &nb=
sp;           &nbs=
p;            =
;            =
            &=
nbsp;       =

Creditors =
falling due after more than one year           &n=
bsp;  15   =
(318.1) (276.3)

Provisions for =
liabilities and charges           &n=
bsp;          =
16    =
(90.8)  =
(64.4)

Deferred =
income           &n=
bsp;           &nb=
sp;           &nbs=
p;         17   (117.3) =
(122.1)

Net =
liabilities excluding post retirement benefit           &n=
bsp;           &nb=
sp;       =

liabilities           &n=
bsp;           &nb=
sp;           &nbs=
p;            =
;      (246.5) =
(178.0)

Post =
retirement benefit liabilities           &n=
bsp;           &nb=
sp;        (6.1)   =
(4.5)

Net =
liabilities           &n=
bsp;           &nb=
sp;           &nbs=
p;            =
;  (252.6) (182.5)

                    &n=
bsp;           &nb=
sp;           &nbs=
p;            =
;            =
           =

Capital and =
reserves           &n=
bsp;           &nb=
sp;           &nbs=
p;            =
;            =

Called up =
share capital           &n=
bsp;           &nb=
sp;           &nbs=
p;         5.6     5.6 =

Share premium =
account           &n=
bsp;           &nb=
sp;           &nbs=
p;          =
66.5    =
65.3

Capital =
redemption reserve           &n=
bsp;           &nb=
sp;           &nbs=
p;      0.2     0.2

Profit and =
loss account           &n=
bsp;           &nb=
sp;           &nbs=
p; 19   =
(328.2) (256.5)

Equity =
shareholders' deficit            &n=
bsp;           &nb=
sp;           &nbs=
p;(255.9) (185.4)

Equity =
minority interests           &n=
bsp;           &nb=
sp;           &nbs=
p;       3.3     2.9 =

           &n=
bsp;           &nb=
sp;           &nbs=
p;            =
;            =
     (252.6) =
(182.5)

Notes to the =
financial statements

01 Basis of =
preparation and presentation

The financial =
information set out in this announcement does not constitute =
the

Company's statutory accounts for the years =
ended 31 May 2005 or 31 May 2004.

The financial =
information for the year ended 31 May 2004 is derived from =
the

statutory accounts for that year which have =
been delivered to the Registrar of

Companies.  The auditors reported on those =
accounts.  Their report =
was

unqualified and did not contain a statement =
under either Section 237 (2) or

Section 237 (3) of =
the Companies Act 1985.  =
The statutory accounts for the year

ended 31 =
May 2005 will be finalised on the basis of the financial =
information

presented by the Directors in this =
Preliminary Announcement and will be

delivered to =
the Registrar of Companies following the Company's Annual =
General

Meeting.

02 Segmental =
analysis

TURNOVER AND =
OPERATING PROFIT (LOSS) BY BUSINESS

           &n=
bsp;           &nb=
sp;           &nbs=
p;   TURNOVER     OPERATING PROFIT (LOSS)    =

all figures in =
=A3 millions         2005       =
2004            =
2005          =
2004

Banking           &n=
bsp;           &nb=
sp; 245.0      240.2            =
35.5          26.9 =

Healthcare           &n=
bsp;          =
290.5      293.6            =
20.2          20.7 =

General =
Insurance           &n=
bsp;    33.7       31.2            =
15.8          14.8 =

Sesame           &n=
bsp;           &nb=
sp;  319.2      334.9           =
(24.6)        =
(26.9)

Group           &n=
bsp;           &nb=
sp;       -          =
-            =
(6.3)         =
(5.3)

Continuing =
operations     =
      888.4      =
899.9            =
40.6          30.2 =

Included =
within operating profit are the following amounts for =
goodwill

amortisation: Banking =A38.4m (2004: =
=A311.5m); Healthcare =A321.5m (2004: =
=A322.8m);

and Sesame =A322.2m (2004: =A329.2m). =

Included =
within the current year Group expenses is income of =A32.7m (2004: =
=A3

2.7m) arising on the disposal of the final one =
third of the warrants held in

relation to WebMD =
common stock.

Included =
within the results of Sesame are revenues of =A36.4m (2004: =A37.6m) =
and

operating profit of =A30.9m (2004: =A31.4m) in =
respect of AssureWeb Limited which

was disposed of =
post year end.

The operating =
loss in Sesame, and the United Kingdom, includes =A30.8m (2004: =
=A3

1.4m) income from fixed asset investments. In =
addition, the operating loss of

Sesame includes =
operating exceptional costs of =A38.9m (2004: =A38.0m), =
as

described more fully in note =
3.

OPERATING =
PROFIT (LOSS) BY LOCATION OF OPERATIONS

           &n=
bsp;           &nb=
sp;  OPERATING PROFIT (LOSS)

all figures in =
=A3 millions       2005         =
2004

United =
Kingdom           &n=
bsp;      6.4        =
(12.0)

Rest of =
Europe           &n=
bsp;      5.3          8.1 =

Asia =
Pacific           &n=
bsp;       (4.8)         1.7 =

Americas           &n=
bsp;           =
31.4         29.3 =

Other           &n=
bsp;           &nb=
sp;   2.3          3.1 =

           &n=
bsp;           &nb=
sp;       40.6         30.2 =

Included =
within operating profit are the following amounts for =
goodwill

amortisation: United Kingdom =A324.7m =
(2004: =A332.3m); Rest of Europe =A3nil =
(2004:

=A32.1m); Asia Pacific =A30.1m (2004: =
=A30.3m); and Americas =A327.3m (2004: =
=A328.8m).

The Directors =
consider that turnover by destination, the number of =
its

employees by location of operations and the =
analysis of revenue by type and by

business aids =
the understanding of the Group's global activities.  These are =
as

follows:

TURNOVER BY =
DESTINATION AND NUMBER OF EMPLOYEES BY LOCATION OF =
OPERATIONS

           &n=
bsp;   TURNOVER BY DESTINATION           &n=
bsp;  EMPLOYEES (AVERAGE)        =

                 &n=
bsp;         2005           &n=
bsp;  2004            =
2005          =
2004

           &n=
bsp;           &nb=
sp;     =A3m           &n=
bsp;    =A3m          =
number        =
number

United =
Kingdom           =
388.6           &n=
bsp; 414.6           =
1,822         1,928 =

Rest of =
Europe     =
       95.2           &n=
bsp;  84.1           &n=
bsp; 430           =
473

Asia =
Pacific           &n=
bsp;  26.9           &n=
bsp;  33.5           &n=
bsp; 679           =
518

Americas           &n=
bsp;     345.4           &n=
bsp; 340.2           =
3,025         3,006 =

Other           &n=
bsp;         32.3             &n=
bsp;27.5           &n=
bsp; 551           =
518

           &n=
bsp;           &nb=
sp; 888.4           &n=
bsp; 899.9           =
6,507         6,443 =

ANALYSIS OF =
REVENUE BY TYPE AND BY BUSINESS

           &n=
bsp;           &nb=
sp;           &nbs=
p;            =
;            =
            =
2005

all figures in =A3 millions Banking =
Healthcare General Insurance Sesame  Total

ILF           &n=
bsp;           &nb=
sp; 72.1       56.6           &n=
bsp;   2.0      -  130.7

Maintenance           &n=
bsp;    115.5      108.6           &n=
bsp;  11.9    2.8  238.8

Transaction =
Processing       9.3       =
65.1           &n=
bsp;  13.6  =
310.0  398.0 =

Professional =
Services       47.8       =
29.6           &n=
bsp;   3.9    6.4   87.7

Hardware           &n=
bsp;         0.3       =
30.6           &n=
bsp;   2.3      -   33.2

           &n=
bsp;           &nb=
sp;   245.0      290.5           &n=
bsp;  33.7  =
319.2  888.4 =

           &n=
bsp;           &nb=
sp;           &nbs=
p;            =
;            =
            =
2004

all figures in =A3 millions Banking =
Healthcare General Insurance Sesame  Total

ILF           &n=
bsp;           &nb=
sp; 64.5       57.7           &n=
bsp;   1.3  =
  0.9  124.4 =

Maintenance           &n=
bsp;    118.7      107.9           &n=
bsp;  11.3    4.3  242.2

Transaction =
Processing      11.4       =
71.1           &n=
bsp;  11.9  =
322.0  416.4 =

Professional =
Services       45.2       =
28.0           &n=
bsp;   3.8    7.7   84.7

Hardware           &n=
bsp;         0.4       =
28.9           &n=
bsp;   2.9      -   32.2

           &n=
bsp;           &nb=
sp;   240.2      293.6           &n=
bsp;  31.2  =
334.9  899.9 =

03 Exceptional =
items

OPERATING =
EXCEPTIONAL ITEMS

all figures in =
=A3 millions           &n=
bsp;              &n=
bsp;           &nb=
sp;    2005   2004

Estimated =
costs and redress payments associated with future           &n=
bsp;        =

endowment complaints           &n=
bsp;           &nb=
sp;           &nbs=
p;           =
10.0      -

Estimated =
costs and redress payments associated with the initial           &n=
bsp;

phase of a regulatory =
review of past sales of structured capital           &n=
bsp;

at risk products           &n=
bsp;           &nb=
sp;           &nbs=
p;            =
;    2.8      -

Estimated =
costs and redress payments associated with a regulatory              <=
o:p>

review of a former network member           &n=
bsp;           &nb=
sp;          =
(3.9)   8.0 =

           &n=
bsp;           &nb=
sp;           &nbs=
p;            =
;            =
        8.9    8.0 =

The operating =
exceptional items relate to Sesame.

Future =
endowment complaints

The operating =
exceptional charge of =A310.0m is the estimated costs and =
redress

payments in respect of endowment complaints =
that are anticipated to be received

in the future, =
as described more fully in notes 16 and 18.  Given its size,

this charge has =
been treated as an operating exceptional =
item.

Regulatory =
review of structured capital at risk products

The operating =
exceptional charge of =A32.8m is the estimated costs and =
redress

payments arising from the reassessment of =
the past conclusions reached on

complaints received =
in respect of sales of structured capital at =
risk

products.  This reassessment forms part of a regulatory review =
which is

described more fully in note 18.  These costs have been treated =
as an operating

exceptional charge given their size =
and because the majority of the sales were

made =
before Misys acquired the relevant member network. =

Former network =
member review

In the prior =
year an operating exceptional item of =A38.0m was charged to =
the

profit and loss account representing the =
estimated additional costs and redress

payments =
associated with a regulatory review of one former network member =
of

Sesame Limited (formerly Kestrel Financial =
Management Limited). During the year

Sesame and the =
FSA have reached agreement on how this review should proceed =
and

this work is well advanced.  As a result the estimated =
additional costs and

redress payments associated =
with the review have been recalculated resulting =
in

a credit of =A33.9m this =
year.

NON OPERATING =
EXCEPTIONAL ITEMS

In the current =
year a non operating exceptional charge of =A32.7m has been =
made

in relation to the impairment of the assets of =
AssureWeb Limited which was

disposed of on 7 July =
2005.  There was no cash =
outflow in respect of this item

in the =
year.

In the prior =
year a profit on the disposal and part disposal of operations of =
=A3

0.4m was made relating to the disposal of the =
Misys Securities Trading Systems

and certain parts =
of the Misys Asset Management Systems businesses and the =
part

disposal of AssureWeb Limited (formerly =
AssureSoft Limited).  The =
cash inflow

on these items in the current year was =
=A30.2m (2004: =A318.7m), net of expenses

and cash =
disposed of with the businesses.

04 Operating =
costs

all figures in =
=A3 millions    =
2005     =
2004

Cost of =
sales           &n=
bsp;  603.1    619.0

Occupancy =
costs           &n=
bsp; 41.7     43.3

Sales and =
marketing costs   =
64.4     =
61.7

Administrative =
expenditure  67.5     69.1 =

Other =
operating charges     19.0     13.1

Goodwill =
amortisation       52.1     63.5 =

           &n=
bsp;           &nb=
sp;   847.8    869.7

The Directors =
consider that the nature of the Group's business is such that =
the

analysis of operating costs shown above is more =
informative than that required

by the Companies Act =
1985.

Included =
within administrative expenditure is the remuneration of the =
auditors

for Group audit services of =A31.0m (2004: =
=A30.9m).  In addition, =
other fees paid

to the auditors, principally in =
respect of work such as international

corporation =
and sales tax advice, totalled =A30.9m (2004: =A31.3m), including =
=A30.7m

(2004: =A30.9m) within the United =
Kingdom.

Included =
within operating costs are operating lease charges of =A315.6m (2004: =
=A3

17.7m) in relation to land and buildings and =
=A31.4m (2004: =A31.8m) in relation to

plant and =
machinery.  A depreciation =
charge of =A310.1m (2004: =A311.0m) is

included =
within operating costs.

Included =
within cost of sales is research and development expenditure of =
=A390.7m

(2004: =
=A388.4m).

05 Net =
interest payable and similar charges

All figures in =
=A3 millions           &n=
bsp;       2005    =
2004

Bank loans and =
overdraft interest payable  =
(6.9)   =
(2.2)

Interest on =
listed bonds           &n=
bsp;       (6.2)   =
(5.7)

Amortisation =
of issue costs on financing   (0.1)   (1.1)

Other interest =
payable           &n=
bsp;         (0.2)   =
(0.1)

Interest =
payable and similar charges      (13.4)   =
(9.1)

Interest =
receivable           &n=
bsp;           &nb=
sp; 3.8     =
2.8

Net interest =
payable and similar charges   (9.6)   (6.3)

The =A36.2m =
(2004: =A35.7m) interest paid or payable on the listed bonds =
comprises

the interest payable in respect of the =
=A3750m subscription price of =A332.7m

(2004: =
=A337.1m), the accretion in the value of the =A3370m payment to =
Cordon

Limited of =A325.6m (2004: =A328.6m) and the =
interest on the deposit with Interval

Limited of =
=A30.9m (2004: =A32.8m).  =
See note 15 for a detailed description =
of

these transactions.

06 Other =
finance costs

all figures in =
=A3 millions           &n=
bsp;        2005    =
2004

Expected =
return on pension scheme assets     2.0     1.5

Interest on =
pension scheme liabilities      (1.9)   =
(1.8)

Unwinding of =
discount on property provision (0.8)   (0.9)

           &n=
bsp;           &nb=
sp;           &nbs=
p;        (0.7)   =
(1.2)

07 Tax on =
profit on ordinary activities

TAX ON ONGOING =
ORDINARY ACTIVITIES

all figures in =
=A3 millions           &n=
bsp;  2005    2004

Current =
tax           &n=
bsp;           &nb=
sp;           &nbs=
p;

UK corporation =
tax at 30% (2004: 30%)  =
3.1     2.8 =

UK prior year =
items           &n=
bsp;       (2.4)   =
(0.3)

Overseas =
taxation           &n=
bsp;         11.7    10.5 =

Overseas prior =
year items           &n=
bsp; (0.2)   =
(1.1)

Irrecoverable =
withholding taxes        1.8     2.0 =

Total current =
tax           &n=
bsp;         14.0    13.9

Deferred tax =
credit           &n=
bsp;       (1.2)   =
(0.7)

           &n=
bsp;           &nb=
sp;           &nbs=
p;  12.8    =
13.2

The tax charge =
for the current year is higher (2004: higher) than the =
standard

rate of UK corporation tax based on profit =
before tax for the =
following

reasons:

all figures in =
=A3 millions           &n=
bsp;           &nb=
sp;           &nbs=
p;     2005     2004

Profit on =
ordinary activities before taxation           &n=
bsp;        27.6     23.1 =

           &n=
bsp;           &nb=
sp;           &nbs=
p;            =
;            =
           &n=
bsp;

Tax on =
profit on ordinary activities at the standard rate of UK           &n=
bsp;

tax of 30%           &n=
bsp;           &nb=
sp;           &nbs=
p;            =
;        8.3      6.9 =

Effects =
of:           &n=
bsp;           &nb=
sp;           &nbs=
p;            =
;            =

Expenses not =
deductible for tax purposes (primarily goodwill           &n=
bsp;       =

amortisation)           &n=
bsp;           &nb=
sp;           &nbs=
p;            =
;    13.1     15.2

Profits =
arising overseas which are subject to rates of tax           &n=
bsp;         =

other than the UK standard rate           &n=
bsp;           &nb=
sp;         (13.8)   =
(14.3)

Effects of =
short term timing differences           &n=
bsp;           &nb=
sp;  7.8      7.1 =

Adjustments to =
UK tax charge in respect of prior periods         (2.4)    =
(0.3)

UK and =
overseas research and development tax credits           &n=
bsp; (0.6)    =
(1.6)

Adjustments to =
overseas tax charge in respect of prior periods   (0.2)    =
(1.1)

Irrecoverable =
withholding tax           &n=
bsp;           &nb=
sp;           &nbs=
p; 1.8      2.0 =

Total current =
tax charge for the period           &n=
bsp;           &nb=
sp;  14.0     13.9

The =
exceptional items have no current tax impact in either =
year.

EXCEPTIONAL =
TAX CREDIT IN RESPECT OF PRIOR YEARS

During the =
prior year there was a =A314.6m tax credit arising on the =
resolution

of certain issues that had been subject =
to overseas tax audits.  =
The tax credit

reflected both the release of =
overseas current tax liabilities of =A39.5m, =
and

the establishment of =A35.1m of deferred tax =
assets relating to future tax

deductions.  This was separately disclosed =
to provide more comparable and

representative =
information on the ongoing tax on profit on ordinary =
activities.

08 Equity =
dividends

all figures in =
=A3 millions           &n=
bsp;           &nb=
sp;       2005    =
2004

Interim paid: =
2.56p (2004: 2.44p) per ordinary share   12.8    13.4

Final =
proposed: 4.28p (2004: 4.08p) per ordinary share 20.7    20.7 =

           &n=
bsp;           &nb=
sp;           &nbs=
p;            =
;       33.5    34.1 =

The final =
dividend of 4.28p (2004: 4.08p) per share, if approved at the =
AGM,

will be paid on 19 September 2005 to =
shareholders appearing on the register at

the close =
of business on 29 July 2005.  =
The shares will become ex-dividend on

27 =
July 2005.

09 Earnings =
per share

Earnings per =
share ('EPS') has been calculated in accordance with FRS =
14

'Earnings Per Share', by dividing profit =
attributable to shareholders by the

weighted =
average number of shares in issue during the =
year.

Adjusted basic =
and diluted EPS are presented to provide more comparable =
and

representative information on the continuing =
and established trading

activities.  Accordingly, the adjusted =
basic and diluted EPS figures exclude

exceptional =
items, goodwill amortisation and the 2004 exceptional tax credit =
in

respect of prior =
years.

10 =
E

all figures in =
=A3 millions           &n=
bsp;           &nb=
sp;           =
2005     =
2004

Profit =
attributable to shareholders           &n=
bsp;            =
14.4     =
23.9

Goodwill =
amortisation           &n=
bsp;           &nb=
sp;           &nbs=
p;  52.1     63.5

Exceptional =
items after taxation           &n=
bsp;           &nb=
sp;           &nbs=
p;

  - Cost of regulatory reviews =
and endowment complaints     8.9      8.0 =

  - Profit on disposal and part =
disposal of operations        -     =
(0.4)

  - Impairment of assets on post =
year end sale of business  =
2.7        - =

Exceptional =
tax credit in respect of prior years           &n=
bsp;  -    =
(14.6)

Adjusted =
profit attributable to shareholders           &n=
bsp;   78.1     80.4

all figures in =
millions     =
           &n=
bsp;    2005     2004

Average number =
of shares in issue         499.5    544.2 =

Share options =
and awards           &n=
bsp;        6.3      6.9 =

Diluted =
average number of shares in issue 505.8    551.1

10 =
Financing

all figures in =
=A3 millions             &n=
bsp;   2005     2004

Increase in =
borrowings           &n=
bsp;       23.2     84.1 =

Capital =
element of finance leases        (1.0)    =
(0.7)

Payments for =
the purchase of own shares (52.9)   (94.5)

Share options =
exercised           &n=
bsp;       3.7      2.2 =

Net cash =
outflow from financing         (27.0)    =
(8.9)

11 Analysis of =
net debt

           &n=
bsp;           &nb=
sp;      At           &n=
bsp;           &nb=
sp;           &nbs=
p;         =
At

           &n=
bsp;           &nb=
sp;           &nbs=
p;            =
;   Other           &n=
bsp;           =

                &n=
bsp;         1 =
June    =
Cash           &n=
bsp;      Differences    31 =
May

all figures in =A3           &n=
bsp;           &nb=
sp;        non cash           &n=
bsp;           =

millions           &n=
bsp;        2004    flow         =
changes  on =
exchange      =
2005

Cash           &n=
bsp;          107.0    (6.0)           &n=
bsp; -           =
0.6     =
101.6

Bank =
loans           &n=
bsp;    (49.7) (253.1)           =
(0.1)       (13.3)   =
(316.2)

Loan =
notes           &n=
bsp;     (3.5)    1.4           &n=
bsp;  -           &n=
bsp; -      =
(2.1)

Listed =
bonds           &n=
bsp; (235.0)  229.8            =
(7.1)        12.3         - =

Finance =
leases           &n=
bsp; (2.0)    =
1.0            =
(1.1)           =
-      =
(2.1)

Net debt           &n=
bsp;     (183.2)  (26.9)           =
(8.3)        (0.4)   =
(218.8)

The other non =
cash changes on listed bonds comprise the accretion on =
the

payment to Cordon Limited of =A37.1m (note =
15).

12 Intangible =
assets - goodwill

all figures in =
=A3 millions       =

Cost           &n=
bsp;           &nb=
sp;

At 1 June =
2004            =
419.7

Differences on =
exchange     =
1.5

Acquisitions           &n=
bsp;    4.2

At 31 May =
2005            =
425.4

           &n=
bsp;           &nb=
sp;        =

Amortisation           &n=
bsp;        =

At 1 June =
2004            =
207.1

Differences on =
exchange     =
1.2

Charge for the =
year        52.1 =

At 31 May =
2005            260.4 =

           &n=
bsp;           &nb=
sp;        =

Net book =
value           &n=
bsp;

At 31 May =
2005            =
165.0

At 31 May =
2004            =
212.6

Goodwill =
arising on acquisitions to date is being amortised on a straight =
line

basis so as to write off the goodwill over its =
economic life, depending on the

nature of the =
acquisition, for periods not normally exceeding 10 years.  The

range =
of economic lives used for accounting purposes is in line with the =
asset

lives typically used internationally by IT =
product companies for these types of

acquisitions, =
which the Directors believe to be the most appropriate =
periods.

Goodwill =
capitalised on acquisitions totalled =A34.2m in the year, all in =
respect

of current year acquisitions, with =A30.7m =
amortisation being charged in relation

to these =
acquisitions.

13 =
Stocks

all figures in =
=A3 millions           &n=
bsp;           &nb=
sp;       2005    =
2004

Work in =
progress (including contract work in progress) 11.8     8.1 =

Goods for =
resale           &n=
bsp;              &n=
bsp;           &nb=
sp; 1.2     2.1

           &n=
bsp;           &nb=
sp;           &nbs=
p;            =
;       13.0    10.2 =

14 =
Debtors

all figures in =
=A3 millions           &n=
bsp;           &nb=
sp;           &nbs=
p;       2005   =
2004

Trade =
debtors           &n=
bsp;           &nb=
sp;            =
           &n=
bsp;      73.1   65.3 =

Corporation =
tax recoverable           &n=
bsp;           &nb=
sp;           &nbs=
p;     2.7    3.0

Other debtors =
including recoverable amounts in IFA network (note           &n=
bsp;

16)           &n=
bsp;           &nb=
sp;           &nbs=
p;            =
;            =
    62.2   35.6

Prepayments           &n=
bsp;           &nb=
sp;           &nbs=
p;            =
;        14.0   16.1 =

Accrued =
income           &n=
bsp;           &nb=
sp;           &nbs=
p;            =
;     20.2   16.4

Deferred =
taxation           &n=
bsp;           &nb=
sp;           &nbs=
p;            =
;  16.2   =
15.0

           &n=
bsp;           &nb=
sp;           &nbs=
p;            =
;            =
      188.4  151.4

15 Creditors =
falling due after more than one year

all figures in =
=A3 millions     =
2005   =
2004

Due within one =
to two years           &n=
bsp;

Bank =
loans           &n=
bsp;           -  40.0 =

Finance =
leases           &n=
bsp;     0.6   0.6

Other =
creditors           &n=
bsp;    0.8     -

           &n=
bsp;           &nb=
sp;       1.4  40.6 =

Due within two =
to five years           &n=
bsp;

Bank =
loans           &n=
bsp;       316.2   0.2 =

Listed =
bonds            =
         - =
235.0

Finance =
leases           &n=
bsp;     0.5   0.5

           &n=
bsp;           &nb=
sp;     316.7 235.7 =

           &n=
bsp;           &nb=
sp;     318.1 276.3 =

In the year to =
31 May 2002 the Group issued a five year Eurobond =
which,

together with the transactions summarised =
below, enabled it to raise net

funding of up to =
=A3380m.  In addition the =
Group had benefited from a short term

$250m credit =
facility that had been negotiated during the year to 31 =
May

2004.   During the current year the Eurobond and the =
existing bank loans were

repaid and redeemed in =
full.  They were replaced =
by loans drawn down against a

new $850m revolving =
credit facility negotiated with a syndicate of =
banks.

BANK =
LOANS

The bank loans =
drawn down under the facility comprise =A3252.4m denominated =
in

dollars and =A365.0m in sterling.  The year end dollar loan bore =
interest at

3.71% and the sterling loans bore =
interest at an average of 5.6%.  =
All bank

loans are unsecured.  The facility was first drawn =
14 March 2005 and has a

maximum maturity of five =
years.

Facility =
arrangement fees of =A31.3m were included in the original carrying =
value

of net debt.  The amounts in the balance sheet have been stated net =
of

unamortised facility arrangement fees of =
=A31.2m.  These costs are =
allocated to

the profit and loss account over the =
expected term of the facility.

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 =
borrowings;

these include a minimum ratio of =
operating profit, before depreciation and

goodwill =
amortisation, to net interest; and a maximum ratio of net debt =
to

operating profit, before depreciation and =
goodwill amortisation.

LISTED =
BOND

The five year =
Eurobond was a =A3750m, fixed rate bond issued by =
Misys

International Finance Limited and listed on =
the Luxembourg Stock Exchange.  =
The

bond bore interest at 6.37%, but the net =
funding raised was converted into

floating rate US =
dollar denominated debt through a series of interest rate =
and

currency swaps.

JPMorgan =
Europe Limited contracted to subscribe (on maturity of the bond or =
on

its earlier redemption) up to =A3750m for an =
issue of up to 750 million =A31

preference shares =
by Misys International Finance Limited.  JPMorgan Europe

Limited has sold =
its rights and obligations with regards to these =
preference

shares to Interval Limited, a company =
that is independent of the Group.

Misys =
International SA, a wholly owned subsidiary within the Group, paid =
=A3370m

as an initial payment to Cordon Limited (a =
wholly owned subsidiary of Interval

Limited).  This figure represented the =
discounted price which was supplemented

by a =
further payment of =A3232m on maturity redemption of the bond, for =
the

rights to the preference shares noted =
above.

At 31 May 2004 =
Misys Finance Limited, also a wholly owned subsidiary within =
the

Group, had a balance of =A345m deposited with =
Interval Limited at an interest

rate of 4.63%.  Issue costs of =A37.7m were =
included in the original carrying

value of the =
debt, these had been fully amortised during the course of =
the

prior year.

The Group had =
the ability to insist on a net settlement of the rights =
and

obligations arising out of the above =
transactions.  Accordingly =
the constituent

elements of the above transactions =
had been offset in the Group balance sheet

in the =
prior year.

16 Provisions =
for liabilities and charges

           &n=
bsp;           &nb=
sp;         =
Regulatory    =
Contingent           &n=
bsp;          all figures in =A3           &n=
bsp;    reviews and           &n=
bsp;           &nb=
sp;            =
millions           &n=
bsp;    Lapse    complaints consideration Property =
Other  =
Total
 
At 1 June =
2004          =
25.2          =
12.1           =
0.4     =
20.1   =
6.6   64.4 =
 
Differences =
on           &n=
bsp;           &nb=
sp;           &nbs=
p;            =
;            =
     
exchange           &n=
bsp;       -           &n=
bsp; -           &n=
bsp; -        -   0.1    0.1 =
 
Additional =
provisions           &n=
bsp;           &nb=
sp;           &nbs=
p;            =
;          =
charged to the profit           &n=
bsp;           &nb=
sp;           &nbs=
p;            =
;          =
and loss account        =
74.3          =
31.7           &n=
bsp; -        -   1.0  107.0 =
 
Unwinding of =
discount      =
-           &n=
bsp; -           &n=
bsp; -      0.8     -    0.8 =
 
Release of =
provisions      -          (3.3)            =
-        -  (0.5)  =
(3.8)
 
Utilisation =
of           &n=
bsp;           &nb=
sp;           &nbs=
p;            =
;            =
     
provisions           &n=
bsp; (63.7)         (5.6)         (0.3)    (2.9) (5.2) =
(77.7)
 
At 31 May =
2005          =
35.8          =
34.9           0.1     18.0   2.0   90.8 =
 
 
 
 
IFA NETWORK =
PROVISIONS
 
 
 
           &n=
bsp;           &nb=
sp;           &nbs=
p;            =
; REGULATORY REVIEWS AND        =
           &n=
bsp;           &nb=
sp;LAPSE           &n=
bsp;        COMPLAINTS           &n=
bsp;        =
 
all figures in =
=A3           &n=
bsp;                &n=
bsp;           &nb=
sp;           &nbs=
p;          
millions           &n=
bsp;    Provision Debtor   Net      =
Provision   =
Debtor      =
Net
 
At 1 June =
2004           &n=
bsp; (25.2)   =
21.3 (3.9)         (12.1)      =
3.1    =
(9.0)
 
Net =
movement           &n=
bsp;   (10.6)   10.5 (0.1)         (22.8)     13.0    =
(9.8)
 
At 31 May =
2005           &n=
bsp; (35.8)   =
31.8 (4.0)         (34.9)     16.1   =
(18.8)
 
 
 
 
Lapse =
provisions of =A335.8m (2004: =A325.2m) 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 =A331.8m (2004: =A321.3m) held =
within
debtors.
 
 
 
Regulatory =
reviews and complaints provisions principally comprise amounts =
in
respect of a specific review relating to a =
former network member, the costs
arising from the =
initial stages of a regulatory review of structured capital =
at
risk sales, the estimated costs arising from =
both received and future endowment
complaints 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 =
=A316.1m (2004: =A33.1m) which is included =
within
debtors.  As a result the net provision is =A318.8m (2004: =
=A39.0m).
 
 
 
The amounts =
charged to the profit and loss account in the year in respect =
of
regulatory reviews and complaints were =A37.9m =
(2004: =A310.0m) including =A38.9m
(2004: =A38.0m) =
recognised as operating exceptional items (see note =
3).
 
 
 
The final cost =
of settling 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. =
 
 
 
Future =
endowment complaints
 
 
 
During the =
year, 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 =
level of endowment complaints currently being received, =
the
increasing rate at which these are being upheld =
and the expectation that the
volumes of future =
complaints will be significant, a provision has also =
been
made for the Directors' best estimate of the =
costs associated with complaints
that will be =
received in the future with respect to past sales of endowments. =
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 established for future endowment complaints at 31 May =
2005,
and included within the regulatory reviews =
and complaints provision, was =A310.0m
(2004: =
=A3nil).  The charge in =
respect of this provision has been disclosed as =
an
operating exceptional item given its =
size.
 
 
 
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 cost 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 that for which provision has =
been
made.
 
 
 
OTHER =
PROVISIONS
 
 
 
Contingent =
consideration is non interest bearing and is payable in =
cash.
 
 
 
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 =
eight years, and the excess over market value provision over =
the
next seven years.
 
 
 
Included in =
other provisions are amounts primarily in respect of litigation =
and
non property related onerous =
contracts.
 
 
 
17 Deferred =
income
 
 
 
all figures in =
=A3 millions           &n=
bsp;       2005     =
2004
 
To be =
recognised within one year           &n=
bsp;           &nb=
sp; 
 
Maintenance =
fees           &n=
bsp;           &nb=
sp;   76.9     73.7 
 
Other =
income           &n=
bsp;           =
        31.9     38.1 =
 
           &n=
bsp;           &nb=
sp;           &nbs=
p;      108.8    111.8 =
 
           &n=
bsp;           &nb=
sp;           &nbs=
p;            =
;         =
 
To be =
recognised after more than one year           &n=
bsp;    
 
Maintenance =
fees           &n=
bsp;           &nb=
sp;    3.5      2.8 =
 
Other =
income           &n=
bsp;           &nb=
sp;        5.0      7.5 =
 
           &n=
bsp;           &nb=
sp;           &nbs=
p;        8.5     10.3 =
 
           &n=
bsp;           &nb=
sp;           &nbs=
p;      117.3    122.1 =
 
 
 
 
Deferred =
maintenance fees represent amounts invoiced in advance for =
contracts
which provide technical support, trouble =
shooting assistance (helpdesk etc) in
addition to =
upgrades and enhancements to the Group's software products, =
and
also hardware maintenance.  Maintenance fees are =
recognised as revenue rateably
as the services are =
provided over the period of the contract.  Deferred other
income represents =
amounts invoiced, including deposits, in respect of =
initial
licence fees for software products and =
professional services for which the
revenue =
recognition criteria have yet to be =
satisfied.
 
 
 
 
 
18 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 16.
 
 
 
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 FSA during the year.  =
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 at an advanced stage. =
Based on the results of this work to date a charge =
of =A32.8m (2004: =A3nil) has
been recorded during =
the year.  The charge has =
been disclosed as an operating
exceptional item =
given its size and the fact that the majority of the =
sales
were made before the Misys acquired the =
relevant member network.
 
 
 
The review of =
promotional material is at an early stage.
 
 
 
Sesame has =
recently provided the FSA with the preliminary findings of =
the
review and, on the basis of this review, it is =
likely that a further more
detailed review of some =
element of the full population of sales will =
be
necessary.  The extent of any further review is not known and =
will be subject
to agreement with the =
FSA.
 
 
 
At present, it =
is not possible to estimate the costs of review or redress =
that
may be incurred as a result of any further =
review work, including that in
respect of =
promotional material.  As =
a result no provision has been made for
this =
potential liability.  =
Further review work is likely to result =
in
additional provisions being made which =
themselves may be material but, in the
opinion of =
the Directors, should not have a material effect on the value of =
the
Misys Group.  Insurance cover and amounts recoverable from network =
members may
be available to offset a portion of any =
potential liability. 
 
 
 
19 =
Reserves
 
 
 
PROFIT AND =
LOSS ACCOUNT RESERVE
 
 
 
           &n=
bsp;           &nb=
sp;           &nbs=
p;   Own  =
           &n=
bsp;           &nb=
sp;           
           &n=
bsp;           &nb=
sp;           &nbs=
p;         Treasury   Profit and loss        =
all figures in =A3 millions           =
shares     =
shares           =
account   =
Total
 
           &n=
bsp;           &nb=
sp;            =
(61.2)           &n=
bsp;                &n=
bsp;        At 1 June 2004           &n=
bsp;           &nb=
sp;        (53.0)           =
(142.3)  =
(256.5)
 
Net exchange =
adjustments           &n=
bsp;   -          =
-           &n=
bsp;  (1.1)    (1.1)
 
Loss retained =
for the year           &n=
bsp; -          =
-           &n=
bsp; (19.1)   =
(19.1)
 
Purchase of =
own shares           &n=
bsp;     -      (52.9)           &n=
bsp;    -    (52.9)
 
Shares =
vested           &n=
bsp;            =
6.7        3.3           &n=
bsp;  (7.5)     2.5 
 
Other =
movements on investment in           &n=
bsp;           &nb=
sp;           &nbs=
p;           =
own shares           &n=
bsp;           &nb=
sp;  (0.3)       0.3           &n=
bsp;   0.6      0.6 =
 
Actuarial loss =
on the pension           &n=
bsp;           &nb=
sp;           &nbs=
p;            =
;  
scheme           &n=
bsp;           &nb=
sp;         -          =
-           &n=
bsp;  (2.5)    (2.5)
 
Movement on =
deferred tax relating           &n=
bsp;           &nb=
sp;           &nbs=
p;          =
to the pension scheme           &n=
bsp;      -          =
-           &n=
bsp;    0.8     0.8 
 
           &n=
bsp;           &nb=
sp;            =
(54.8)           &n=
bsp;           &nb=
sp;           &nbs=
p; 
At 31 May 2005           &n=
bsp;                   (=
102.3)            =
(171.1) (328.2)
 
 
 
 
The cumulative =
positive goodwill written off against profit and loss =
account
reserves is =A3907.3m (2004: =
=A3904.2m).  The goodwill =
written off to reserves
increased by =A33.1m in the =
year due to movements on exchange with the equal =
and
opposite gain in the profit and loss =
reserve.
 
 
 
Included in =
net exchange adjustments are exchange gains of =A33.5m (2004: =
losses
of =A39.6m) arising on borrowings =
denominated in, or swapped into, foreign
currencies =
designated as hedges of net investments overseas.