7306 Misys AR 2011-Small-Indexed

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Overview
01 Highlights
02 At the heart of nancial services
06 Global reach
10 Relationships that matter
14 Leading technology and innovation
Business review
18 Chairmans statement
20 Chief Executives review
24 Key performance indicators
26 Misys Sophis
28 Treasury & Capital Markets
30 Banking
32 Open Source
34 Global Services
36 People
38 Social and environmental responsibility
40 Financial review
Corporate governance
48 Board of Directors
50 Corporate governance report
62 Directors remuneration report
Financial statements
74 Statement of Directors responsibilities
75 Audit opinion for the Misys plc Group
76 Consolidated income statement
76 Consolidated statement of
comprehensive income
77 Consolidated statement of cash ows
78 Consolidated balance sheet
79 Consolidated statement of changes
in equity
80 Accounting policies
87 Notes to the nancial statements
119 Audit opinion for the Misys plc
Parent Company only
120 Company balance sheet
121 Notes to the Company nancial
statements
130 Five year nancial record
131 Investor information
Misys Leading technology and innovation
Performance highlights
3 Revenue 370m up 4% for the full year,
accelerating to 8% in the 2nd half
3 Order intake 213m up 3%
3 Adjusted operating prot 72m up 12%
3 Adjusted basic EPS up 22% pro-forma
for the share count reduction following
return of capital to shareholders
3 Misys Sophis revenue for the 4th quarter,
its rst in the Group, up 32% on the
prior year quarter. Sophis integration
successful cost and revenue synergies
on track
3 Banking returned to growth with revenue
of 167m up 3% including a 10%
increase in the 2nd half. BankFusion
adoption accelerated with 27 sales
in the period and 40 customers in total
3 Treasury & Capital Markets (TCM)
revenue 185m up 3%. TCMs market
position continued to strengthen with
25 new name wins
Hov do ve renun No.? 3
Hghlghts
See nancial review for a reconciliation
to as reported measures
i
;on
revenue
..%
pro-forma adjusted EPS growth

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adjusted operating prot
qo
BankFusion customers
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new name wins in TCM
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Annual Report 2011 01
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50 of the top 50 banks rely on Misys
No.
capital markets solutions provider
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02 Annual Report 2011
With over 1,300 customers in 120 countries relying on our solutions,
Misys is truly at the heart of the nancial services industry. In capital
markets, the acquisition of Sophis catapulted Misys to a leadership position
with the broadest asset class coverage in the industry and over a third of
the installed base in our market place. In banking, we are delivering much
needed innovation in the core banking systems space with our BankFusion
solutions, and are at the forefront of transaction banking with our portal
solutions for payments, cash management and trade nance.

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syndicated loan book runners use Misys
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Financial services is changing
The nancial services market is
changing rapidly. Financial institutions
of all shapes and sizes need to keep
abreast of regulatory requirements,
respond to changing customer
expectations, manage risk and take
advantage of opportunities in new
growth areas. Subject to a higher level of
scrutiny than ever before, they also need
to ensure transparency across all areas
of their business. Financial technology
is playing a critical role by delivering the
functionality and agility needed to keep
up with the fast pace of change.
Misys is a pure play nancial services
provider, committed to innovation
in nancial services technology. We
provide a broad range of solutions to
help all types of nancial institutions
run their businesses more efciently
and cost-effectively. Our solutions help
our customers to comply with industry
regulations, meet the changing
requirements of their customers and
retain competitive advantage. Many
nancial institutions are using our
solutions to help them to grow their
business by expanding into new
sectors and geographies.
Growth regions
Misys has over 1,300 customers
in 120 countries around the globe.
Financial institutions in the emerging
markets of Latin America and Asia were
less affected by the credit crisis and we
are seeing continuing growth in demand
from these regions. We are partnering
with many clients to help them adopt
best practice processes to get the most
from their software solutions as well as
building additional functionality to meet
local regulations and business
requirements.
Our global footprint and partner network
means that we have the resources and
expertise to service clients worldwide.
The importance of innovation
Global institutions and those in the more
mature markets of the USA and Western
Europe are re-engineering their existing
systems to be able to cope with these
changes. In the growth markets of Asia,
Latin America and the Middle East and
Africa many banks and other nancial
institutions do not have complex legacy
systems in place and can take more
immediate advantage of packaged
solutions.
We are engineering our solutions to make
it as easy as possible for our clients to take
advantage of the benets that we offer. By
championing the concept of continuous
migration with our BankFusion solutions,
we are enabling banks to renovate their
existing systems with new functionality
while minimising the impact on their
day-to-day operations.
We are integrating many of our
solutions to provide end-to-end support
for a broad range of nancial activities,
and to enable our clients to access the
full range of functionality available across
our different products.
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go to page 16
go to page 12
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Focus on leadership
Leading in capital markets
The acquisition of Sophis has catapulted
Misys into a leadership position in the
capital markets sector. We now generate
more than 60% of our revenue from our
Capital Markets business units Treasury
& Capital Markets and Misys Sophis.
Our capital markets solutions address
requirements across four major areas
of business: sell-side, buy-side, lending
and risk management.
Leading in banking
Transaction banking is becoming more
important as banks return to fee-earning
activities after the credit crisis. In many
cases their underlying systems are in
need of modernisation. Misys is the
leading provider in the transaction banking
space and is the only organisation that
can offer banks a fully integrated solution
for payments, cash management and
trade nance via our portal solutions.
The ability to have a single view of cash
and trade transactions is leading many
banks to look at how they can increase
their efciency by consolidating their
systems in these areas.
Misys is leading the way in innovating core
banking systems with the BankFusion
platform. BankFusion is the newest core
banking system available in the market
embracing the latest technology
developments and offering a completely
new approach to delivering, implementing
and upgrading a core banking system.

Misys provides a comprehensive
suite of solutions to help nancial
institutions run their businesses more
efciently and cost effectively.
Customer Geography
Misys Solution Portfolio
Hov do ve Luke udvunLuge o our posLon? 3
Opics
Summit
Loan IQ
BankFusion
Universal
Banking
BankFusion
Equation
BankFusion
Midas
RISQUE
LIFE
VALUE
iSophis
Core
Payment
Manager
Online,
Mobile &
Portal
Trade
Innovation
Transaction Misys Sophis
Capital Markets Banking
TCM
RISK
Americas
250 customers
19% of total
Europe
500 customers
38% of total
Middle East
and Africa
230 customers
18% of total
Asia Pacic
320 customers
25% of total

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Misys serves customers
in over 120 countries
go to www.misys.com
i
Misys
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Misys is a truly global organisation, providing software solutions to nancial
institutions across the world, from the recognised nancial centres of London,
New York, Hong Kong and Singapore to the growth regions of Africa, Latin
America and Asia. We have aligned our resources to these geographical
growth opportunities and are committed to providing the best software,
services and support to our customers, regardless of their location. Our
global footprint and diverse pools of talent in different locations enable us
to meet these objectives.
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q,ooo
staff in over 35 ofces worldwide
5
Six Global Development Centres
providing centres of excellence for
R&D and 24/7 customer support
,oo
customers across 120 countries
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Relocating leadership roles
Misys has viewed globalisation very
pragmatically and moved ownership
and accountability of work rather than
just focusing on traditional labour
arbitrage. Instead of centralising all
leadership roles in the head ofce, we
have multiple global leadership roles
in our development locations based in
emerging economies. This shows the
strategic shift in our capacity planning
and approach to global sourcing.
Building a globally distributed
development model
At Misys, our strategy has been to
develop a globally distributed development
model to minimise the risk of having all of
our development expertise housed in a
single location and to introduce different
perspectives to our development process.
It also provides us access to skills and
resources around the world as and when
required. Our goal is to have development
capabilities for each product line in at
least two locations. This strategy is on
track following the successful migration
of our development capacity to the East
with four Global Development Centres
based in Bangalore (India), Bucharest
(Romania), Manila (the Philippines)
and Beijing (China).
Each of these locations is a centre of
excellence for different technical skills
so that we can continue to support our
existing solutions, while also developing
new solutions based on the latest
technical innovations.
As these locations are experiencing
unprecedented growth, our challenge is to
keep pace with the competition and attract
and retain talent. We have devised many
innovative ways to manage attrition and
create a culture of high performance. We
run very successful graduate programmes
in these locations, attracting engineering
students from some of the best universities.
During the year we also added
Development Centres in Paris and
Dublin with the acquisition of Sophis.
Bangalore
1,200 employees 3
20% growth 3
265 people hired during the year 3
Centre of excellence for BankFusion 3
Bangalore is our primary Development
Centre; a multi-function, multi-divisional
hub covering every solution in the Misys
portfolio (with the exception of Misys
Sophis). 75% of staff are focused on
development and together constitute
our centre of excellence for Java and
.Net solutions. Bangalore is also the
global centre for innovations in Open
Source solutions for Misys. We have
doubled in size over the past four years,
achieving the critical mass that we need
to service our clients development
requirements.
Bangalore is host to a huge ecosystem of
domain expertise in both IT and nancial
services, providing us with access to
leading talent with the right skills for our
business. The competitive environment
means that we need to stay sharp and
provide our employees with exciting and
technically challenging work. Misys has
a strong reputation with the major
universities and is able to attract top
graduates to work in our organisation.
In addition to acting as a main R&D hub
for Misys, Bangalore also hosts customer
support and professional services teams;
it is a global solutions centre (GSC) for
customisations and a shared services
centre for nance.
CoLu reuch
Distribution of Misys R&D professionals
Bangalore 32%
Manila 19%
Partners 18%
Western Europe 10%
Bucharest 8%
New York 7%
London 6%
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Misys has introduced an innovative
programme called excellence through
education where selected employees
are sponsored for higher education in
software engineering in collaboration
with a university. Flexible hours allow our
staff to pursue advanced education and
converge their academic learning with
industry experience.
Beijing
Newly established Opics 3
development team
Double-byte expertise to support 3
North Asia
Global Solutions Centre for 3
customisations
The growth regions of Asia, and China
in particular, are of increasing importance
to Misys continued growth. To meet
current and anticipated demand from
the region, we are scaling Beijing as a
strategic Development Centre to support
North Asia, including the development
of double-byte versions of our solutions.
This year, we established an Opics
development team in Beijing to assist
with the large number of opportunities in
China, and to accelerate the development
of generic product functionality for
Chinese clients. The team will deliver
both strategic and funded developments
for the region. We will add other product
lines over time starting with Summit,
and our intention is to have BankFusion
development facilities in Beijing which
will supplement the Bangalore and
Manila Development Centres.
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The main areas of focus across all
our Global Development Centres
are on quality and productivity. Our
ultimate goal is for these centres to
deliver end-to-end world-class
software solutions.
Manoj Kumar,
Vice President, Solution Management
and Development
Manila
650 employees 3
24/7 global call centre 3
Centre of excellence for Midas 3
and Equation
Manila is the home of Misys global call
centre which provides 24/7 level 1 and 2
support to clients across the globe. The
language skills that Manila offers make it
the perfect location to consolidate our
customer support teams. We are actively
rotating employees between support and
services roles to encourage knowledge
transfer and to provide our support staff
with a 360 view of the customer. It is
also our centre of excellence for our Midas
and Equation banking solutions. We have
recently started BankFusion shared
application development in Manila
alongside Bangalore.
Bucharest
235 employees 3
Centre of excellence for C++/Summit 3
Bucharest provides an excellent pool
of good quality engineering skills
accompanied by high levels of
productivity and quality. Bucharest
provides time zone and travel advantages
for servicing the needs of our European
clients. We are expanding the footprint in
Bucharest from just being an R&D centre
to evolve into a resource pool of experts
for delivering professional services to our
European customers.
Misys Sophis Development Centres
148 employees 3
Centre of excellence for C++ & C# 3
and Quality Assurance
We have two further Development
Centres in Paris and Dublin that support
our Misys Sophis solutions. They provide
a pool of highly skilled engineers including
talented nancial engineers skilled in
developing and integrating cutting-edge
mathematical models for pricing. We
focus on maintaining the right balance
of expertise between technical skills and
business knowledge. As such, we are
able to attract top-level graduates and
experienced people to work on
developing and maintaining our solutions.
They are responsible for all buy-side
and asset class functionality, quantitative
models, and server and technical
architecture-related developments.
These bases also provide Quality
Assurance (QA), documentation and
global IT second level support. They
host the back-ofce development team
focusing on operations and accounting
as well as the team in charge of security
nance developments. The QA team is
in charge of testing and validating all
Misys Sophis solutions, the Documentation
team is responsible for the technical
documentation that is delivered with
our products and the Support team
helps our consultants to solve technical
issues for our clients.
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percentage points year-on-year

increase in customer satisfaction
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By strengthening relationships between our customers, our partners
and our people, Misys is able to grow its business, expand into new
markets and gain market share.
We have built a global partner network of more than 100 partners that provide
us with the scalability and expertise to expand our coverage, extend our scale
and drive deeper customer relationships. Together, we create compelling
solutions enabling our customers to differentiate themselves and drive a
competitive edge. Fostering close relationships with our customers and
partners provides valuable insight to Misys so that we can deliver the best
solutions in an ever-growing and changing market.
oo
+
partners
%
of new name business won in
conjunction with partners
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Evolving the partner model
We work as one team with our partners
to be fully aligned in front of customers.
In some regions we have implemented
partner-led coverage strategies localising
our products, addressing local issues and
resolutions and driving high value solutions
while increasing customer satisfaction.
Our ability to partner more effectively
has enabled us to provide more
comprehensive, cost-effective solutions
that drive greater customer value.
Partnerships are essential in helping
Misys to scale our business. We have
built a Partner Value Net that enables
us to execute with more speed, scope
and scale. In turn, our partners provide
Misys with greater reach into the
marketplace, greater scale to execute
on customer requirements, and their
complementary skills and solutions
deliver greater depth of value to our
customers.
We bring together the collective talent
of the best information technology
companies, systems integrators,
consultancy practices and local partners
empowering an entire community
to benet from a strong collaboration
of knowledge, relationships and skills.
They offer a broad range of value added
services around Misys solutions, working
on design, implementation and delivery
of them.
Partners are an extension of our sales
force and delivery teams. In-country
specialists are key to extending our reach
and helping us cover new territories,
enabling us to extend farther and faster
than we could do on our own.
Teaming for customer value
No one company can provide all the
solutions to meet the diverse needs
of nancial institutions in todays
marketplace. Our Partner Value Net
comprises global, regional and in-country
partnerships across all our business
lines and market segments. We align as
one team to drive and support business
opportunities that lead to incremental
revenue. The depth and breadth of our
network ensures better alignment to
our customers demands for integrated,
end-to-end solutions and provides the
skills and services they require.
By tapping into our Partner Value Net
we increase our market presence, learn
about new opportunities and can fast
track the sales cycle resulting in increased
market penetration and higher revenues.
With regular governance and execution
on our joint business plans, we consistently
grow our revenues together. This year,
we closed 35% of new name business in
conjunction with our partners, and expect
to increase this rate further over the
coming 12 months.
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Global partner footprint
Regional GTM Partners
Misys has more than 100 partners across the world including more than
40 solution and technology partners. Our strategic partners include everis,
HCL Technologies, IBM and Microsoft.
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Long-standing relationships
Our customer base is one of our biggest
assets. We have an impressive installed
base worldwide and enjoy long-standing
relationships with many of our customers.
We are actively engaged in strengthening
our customer-facing resources so that we
can deepen these relationships further,
helping our customers to address their
pain points, expand their businesses and
gain competitive advantage with our
technology solutions.
Enabling our customers to compete
We are investing heavily in technology
and innovation to deliver world-class
solutions to our customers. In many
nancial institutions, the decision to invest
in software and systems is based on cost
and efciency considerations, the need to
meet changing customer and regulatory
requirements, and the need to achieve
(or retain) competitive advantage.
We are developing new solutions such
as BankFusion, utilising portal technology
to provide integrated transaction banking
solutions and unlocking the value of our
capital markets solutions to meet the
evolving needs of our customers.
Creating bespoke solutions
Packaged software solutions are easier
to upgrade and maintain and have a lower
total cost of ownership. This being said,
we appreciate that our customers have
requirements specic to their business
or the regions in which they operate. We
work with our customers to understand
their needs. Where appropriate, we
incorporate bespoke developments into
our product roadmaps so that all of our
customers can take advantage of them.
This symbiotic relationship is hugely
benecial to our customer base.
Improving customer satisfaction
Achieving continuous improvements in
customer satisfaction rates is a priority
for all Misys employees, and is included
as a key measure in each employees
performance plan. Misys uses Net
Promoter
from Satmetrix
to support
its customer loyalty programme, effectively
capturing customer feedback, identifying
actions to improve and distributing relevant
information to employees so they can
follow up with customers.
Great relationships = shared success
We value all of our relationships and
invest in them to ensure shared success.
Our strong management team and
values are geared towards client focus
and delivering results.
Our strategic partners include:
HCL Technologies is a leading global IT Services company,
focusing on transformational outsourcing, underlined by
innovation and value creation. It offers an integrated portfolio
of services including software-led IT solutions, remote
infrastructure management services, engineering and R&D
services and BPO. We work together with HCL for off-shore
development, IT support, professional services, and global
go-to-market coverage to open new markets. This extends
our reach in fast growing economies to gain market share
and is delivering growth and value for customers.
For a century, only IBM has created technology around the
world to invent and integrate hardware, software and services
to enable the Financial Services industry to work smarter. We
partner with IBM at many levels, from hardware and middleware
technology and services, to developing complete customer
value propositions for our joint customers.

IBM is a registered trademark of International Business Machines Corporation.
everis is a multi-national consulting company offering
business development and strategy, technological applications,
maintenance and outsourcing solutions. everis has operations
in Europe, Latin America and the US with more than 10,000
consultants. We work together with everis to increase our
penetration in Europe, expand international markets, jointly
collaborate to implement a range of services to existing and
new clients and deliver local, customised solutions, presence
and support.
Founded in 1975, Microsoft is the worldwide leader in
software, services and Internet technologies for personal
and business computing. Microsoft offers a wide range of
innovative products and services designed to help individuals
and organisations realise their full potential. We work with
Microsoft to develop new delivery mechanisms for our
banking solutions and differentiated performance for our
capital markets solutions.
Improving customer satisfaction with Net Promoter
from Satmetrix

Misys uses Satmetrix
to support its customer loyalty programme.

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TCM Misys Banking
2011 2010 2009 2008 2007
For more information on Technology
and Innovation go to page 16
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solutions are driving our business
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Investment in technology and innovation has been at the heart of our
turnaround strategy to deliver world class solutions to our customers.
We have shifted our R&D spend so that the majority is invested in the
development of new solutions, which are now gaining signicant traction
with our customers. We are delivering innovation in all areas of our business
from core banking to portal technology and componentisation projects that
unlock the functionality within our different software solutions. Misys is also
pioneering developments in the carbon and healthcare markets with our
open source solutions.
.;
new BankFusion
customers this year
;o%+
of R&D spend is on
new solutions
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Driving innovation
This year has been a turning point
as many of our new solutions hit the
marketplace and gained signicant
traction. We saw a big increase in
licence orders from our new solutions
which contributed 41% of our total
licence revenues. We are pleased to
see that our hard work and commitment
to BankFusion is starting to pay off.
Our development teams are using the
BankFusion architecture to unlock the
depth and breadth of nancial services
functionality that we have embedded
within our different products and make
it available to all our customers. With
BankFusion we can build a component
or application once and re-use it many
times for example, enabling the treasury
capabilities within our Opics solution
to be made available within BankFusion
Universal Banking. This makes our
development processes more efcient
and effective but, more importantly, it
enables us to deliver more comprehensive,
integrated solutions to our customers
and accelerate time to market.
With clear development principles rmly
in place, we have been able to construct
the building blocks for our new solutions
and foster innovation within the nancial
services technology sector.
Improving quality and service levels
This year, we launched a major quality
initiative to improve customer service
levels and new code quality for all our
new solutions. As part of the programme,
we are introducing new, improved
service level agreements to give
customers greater certainty over when
they can expect problems to be resolved.
We are also committing resources to
drive down customer defect backlogs
thus ensuring that when customers raise
problems, they are dealt with quickly.
Finally, we are strengthening our testing
practices to improve the quality of our
new code releases. Specically, we
are increasing the coverage of our test
cases, introducing continuous integration
and automated testing. We are also using
customer test cases in our own testing;
this not only improves the coverage of
our testing processes but it means that
customers can shorten their own testing
cycles.
Delivering the next generation of
banking systems
We are delivering much needed
innovation in the core banking systems
space with our BankFusion solutions, the
foundation of which is the BankFusion
Platform a process-centric graphical
development environment that enables
business processes to be created or
re-congured quickly and easily. We
used the BankFusion Platform to build
BankFusion Universal Banking (UB)
a completely new retail banking solution.
In addition, we are building out a set
of shared applications starting with
Teller, Loan Origination and Islamic
Banking to extend the functionality
of BankFusion UB, as well as other
Misys and third party banking systems.
We plan to make the BankFusion
Platform available to banks to extend
their own banking systems, utilising
pre-congured common banking
services and shared applications
from Misys as well as in-house and
third-party applications. This is a
completely new approach that enables
banks to maximise the value of their
existing assets.
Maximising functionality,
minimising disruption
Many banks need to add new capabilities
to their core banking systems without the
disruption of a major system replacement.
BankFusion banking solutions meet this
requirement by enabling clients to extend
the life of their existing systems. Since its
general release in September 2010, the
rapid take-up of BankFusion Equation
has demonstrated the demand for
a new approach within our own client
base. We will also extend this capability
to non-Misys customers who can use
BankFusion to incorporate new
functionality into their in-house or
legacy core banking systems.
1echnoogy
und nnovuLon
For more information on our Banking
business, please go to page 30
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Hov do ve ook n .o? 3
Harnessing the power of the portal
Our customers are shifting from highly-
geared lending to fee-earning activities.
Misys is providing integrated transaction
banking services to banks who seek
to improve and expand these services
for their corporate clients. Our portal
technology means that banks can run
trade nance and cash management
applications on the same platform,
benet from more efcient systems
management and reduced cost of
ownership, and leverage a exible
platform to expand into new
geographies and banking services.
Unlocking the value of our capital
markets solutions
Our BankFusion service-oriented
architecture (SOA) strategy is also being
implemented across our capital markets
solutions to make it easier for nancial
institutions to implement, consume and
scale our solutions according to their
specic business requirements. Our
componentisation project will extend
to the recently acquired Misys Sophis
solutions to provide even greater
cross-asset class coverage, portfolio
management and risk management
capabilities to both sell-side and
buy-side clients.
Responding to market requirements
The fast pace of change in the capital
markets means that our solutions must
be kept up-to-date with market and
regulatory changes as well as local
requirements. Our teams are constantly
working with clients to ensure that we
deliver the capabilities they need to run
their businesses.
Risk management
We have a wealth of risk management
capabilities within our solutions that
address the needs of the Capital Markets
sector, even more so with the addition
of Misys Sophis. Our intention is to
consolidate the best of breed components
from the Misys Sophis Risk Management
Solution, Misys Eagleye, Misys Risk Vision
and Misys Opics Risk Plus into a global
enterprise risk management solution that
will be available on a single platform.
Phase 1 of this project will create a
comprehensive market risk solution so
that clients can monitor and measure
the full range of market risks, including VAR
calculations (Value at Risk) and implement
stress testing scenarios direct from their
front ofce application. Phase 2 will extend
the solution to include credit risk.
Technology trends
While much of our development effort
is focused on delivering solutions that
meet banks short-to-medium term
requirements, we actively track trends
to determine the future development of
our solutions. We are seeing increased
demand for our hosted services across
many of our solutions and, in the longer
term, we believe cloud computing
represents a signicant opportunity to
deliver our solutions on a self-service,
pay-as-you-go basis. We are working
actively with Microsoft and other partners
to ensure our solutions are ready for the
cloud when customer demand emerges.
Pioneers in Open Source
Misys Open Source Solutions,
dedicated to the development and
distribution of open source solutions,
is growing into a major player in the
rapidly emerging carbon and healthcare
markets. Our pioneering healthcare
information exchanges and carbon
registry systems have attracted the
attention of government and voluntary
agencies and major corporations
worldwide.
Innovative ideas from our employees
help to create new solutions that enable our
customers to achieve competitive advantage
and position Misys as an industry leader.
Our inventors work tirelessly to ensure
that their ideas will succeed. In 2010,
we launched our Intellectual Property
Programme to help encourage and protect
the value of our innovation.
We led our rst patent application in
the US for BankFusion in 2010. This was
followed by two further applications in 2011,
a second for BankFusion and another for
mobile banking. We expect to le additional
patent applications in the coming year
relating to additional BankFusion features,
new Misys Open Source offerings and new
Trade Portal features.
1he Msys Intellectual Proerty Programme
Leverng vuue
Patents are core assets that uniquely
secure company innovation and will
play a key role in realising the long
term business goals of Misys. We will
continue to encourage our innovators
and work to develop our Intellectual
Property Programme even further.
Robin Crewe,
Chief Technology Ofcer
q%
of orders came from new solutions
For more information on our Capital
Markets business, please go to
pages 26 to 29
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Charman's statement
Transformation
This has been a year of transformation
for Misys. We completed three signicant
transactions; the sale of Allscripts, the
capital return to shareholders and the
acquisition of Sophis. Together, these
repositioned Misys as a pure play
nancial services software company.
More importantly, strong market
positions and compelling products for
both the capital markets and banking
sectors mean that Misys is now well
positioned for future growth.
Shareholder value
In June 2010, we announced our plan
to sell the majority of our stake in
Allscripts and the intention to return
the majority of the net proceeds to
shareholders through a tender offer.
With the overwhelming support of our
shareholders, we sold the entire stake
and completed the return of 670m to
shareholders by way of a tender offer
and B Share scheme.
The stake in Allscripts was acquired
in late 2008 through a signicant
investment that involved purchasing
shares in, and merging Misys US
healthcare business with, Allscripts.
In just two years this investment yielded
a return of around 130%.
The divestiture of our stake in Allscripts
and the capital return to shareholders
were complex transactions and in many
ways without precedent. They involved
a complicated, three-way transatlantic
set of transactions with many US and
UK legal and regulatory requirements
and the distribution of four shareholder
circulars.
Robust performance
Last year, Misys delivered robust
operating performance, with a good
end to the nancial year as revenue
growth improved to 8% in the second
half. Group revenue for the whole year
was 370m, an increase of 4% on the
previous year on a pro-forma, constant
currency basis. Adjusted operating prot
was up 12% with the adjusted operating
margin 1.3 percentage points higher as
management made further savings in
the back-ofce whilst sustaining our
investment in product development and
customer-facing resources. Adjusted
pro-forma basic earnings per share rose
by 22% to 15.1p.
Strengthening our position in
nancial services
As a newly focused nancial services
software provider we see acquisitions
in our chosen markets as a key way of
reinforcing Misys prospects for future
growth. In November, we announced
the proposed acquisition of Sophis,
a leading provider of portfolio and risk
management solutions which are largely
complementary to our existing offerings.
We see Sophis as an exciting engine
for growth, in particular through its
leadership position in the buy-side;
providing solutions to organisations
ranging from global asset managers
to start-up hedge funds.
The rst post acquisition revenue
contribution from the Misys Sophis
division for the fourth quarter, included
in our nancial results, was encouraging,
showing impressive growth of 32% on
the previous year. We are very pleased
with the energy and enthusiasm of the
Misys Sophis employees.
Together, the Treasury and Capital
Markets and Misys Sophis divisions
occupy a leading position within the
capital markets and Misys is now ideally
placed to win more deals in this sector,
as well as being able to take advantage
of cross-selling opportunities and more
immediate cost synergies.
In our Banking business we continued
to invest in the development of our
innovative BankFusion platform. This
was rewarded both by sales success
that exceeded our expectations and
the emerging consensus amongst
market commentators as to the special
capabilities BankFusion can unlock
for its customers.
Improving customer satisfaction
Nothing demonstrates the power
of Mike Lawries turnaround strategy
for Misys more than the dramatic
improvement in customer satisfaction
achieved each year. Last year was no
exception with signicant improvements
across the business, with the strongest
scores recorded in product reliability
and customer relationships.
As u ocused provder o soLvure
Lo Lhe hnuncu servces secLor,
Lhere s sgnhcunL poLenLu or
urLher vuue creuLon uL Msys.
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Rewarding the creation of
shareholder value
Last year, a series of major and complex
corporate transactions challenged
our remuneration committee to make
changes to incentive arrangements
that struck the right balance between
fairly rewarding management for their
achievements and securing value for
money for shareholders. Throughout the
year, we actively consulted shareholders
on matters as diverse as recalibrating
existing long-term incentives, resetting
dilution limits and the creation of a new
incentive arrangement for our Chief
Executive. We were particularly grateful
for shareholders consistent support,
all the more so as our remuneration
committee had to be innovative in
its proposals.
Board succession
I am pleased to welcome Stephen
Wilson and Timothy Tuff to the Board as
executive and independent non-executive
Directors respectively. Together, they bring
greater international and direct experience
of our industry to the Board.
Condence in our future
The strength of Misys prospects for
future growth recently prompted an
approach with a potential bid for the
Company. We will evaluate any and
all such approaches thoroughly to
ensure the best possible outcome for our
employees, customers and shareholders.
Your Board believes that Mike Lawrie
and the Misys team can justiably
be very proud of the Companys
transformation. Aside from creating
signicant shareholder value, they
have undoubtedly made Misys a more
attractive place to work and a better
company to do business with. The
Board has great condence in Misys
on-going strategy and its ability to
continue to generate signicant growth
and value for shareholders.
It traditionally falls to the Chairman to
record the Boards thanks to the CEO
and their entire team. Rarely can such
thanks be more richly deserved than in
respect of last years achievements by
the Misys team. Throughout the year,
their effort and persistence has been
extraordinary. I would also like to thank
our shareholders for their active interest
and consistent support, without which
this very critical year in Misys
transformation simply wouldnt
have happened.
James Crosby
Chairman
James Crosby Chairman
For more information on our approach
to Corporate Governance please go
to pages 50 to 61
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Che LecuLve's revev
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Lo shurehoders
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This has been a year of great progress with our strategy and corporate
structure. We completed the acquisition of Sophis to create the leading
capital markets platform and delivered signicant value to shareholders
from the divestment of Allscripts. We have great condence in the future
opportunities for Misys to continue its path to leadership in our industry.

Mike Lawrie
Chief Executive Ofcer
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Chef Lecutve's revev
conLnued
The year was one of signicant progress
in the ongoing transformation of Misys
that began in 2007. We established Misys
as a pure play nancial services software
company by divesting Allscripts and
subsequently increased our exposure to
the fast-growing capital markets sector
by acquiring Sophis. We have continued
to invest in innovation and technology,
with the bulk of our investment going
towards the development of new
solutions. We are also investing to
expand the skills base in the customer-
facing parts of our organisation. The
results of our investments began to be
evident in increased revenues from Asia
and other growth regions, a return to
growth in our banking division, and rapid
revenue growth from Misys Sophis.
These achievements have generated
increased interest in Misys. The interest
in our organisation is a great tribute to
our ongoing strategy and the dedication
of our staff to make our transformation
a success.
Return of capital to shareholders
and creation of pure play nancial
services software company
During the year, we returned 670m to
Misys shareholders from the proceeds
of our divestment of Allscripts. As a result
of the Allscripts sale, we created a pure
play nancial services company, with an
opportunity to be a leader in the nancial
services industry.
Increased exposure to high-growth
capital markets
We believe capital markets will be the
faster-growing of the nancial services
markets that we operate in, and we
substantially increased our presence
with the acquisition of Sophis, a leader in
portfolio and risk management solutions,
which improves our asset class coverage
and greatly accelerates our buy-side
strategy. Its integration into the Misys
group has been successful. Since
acquisition, Misys Sophis has already
demonstrated a high level of growth,
with 32% revenue growth in its rst
quarter as part of the Group.
Substantial investment in product
development now producing a
pipeline of new solutions
We have continued to invest heavily in
research and development 19% of
revenue this year. Our signicant product
development spend is now producing a
pipeline of new and innovative solutions.
As a result, 41% of our orders in the year
came from new solutions developed over
the last two years, compared with 28%
in the previous year.
Investment in people and skills
This year, we made a record number
of new hires around 900 people.
Our investments in people have been
focused on the growth regions of Asia,
Latin America, Africa and the Middle
East, where we see exciting sales
opportunities in the years ahead. 75%
of our people are now outside the UK
and US.
q%
growth in revenues across Asia, Latin
America, Africa and the Middle East
qo
BankFusion customers
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We made signicant investments in the
customer-facing parts of our operations
to upgrade our skills base and attract
new talent into our organisation sales,
customer service and pre-sales solution
consulting. Our training programmes
have been expanded, including the
successful launch of new graduate
programmes in New York, India and
London. We have extended existing
partnerships and established new
ones, with industry leaders such as
HCL, everis, IBM and Microsoft.
Our independent customer survey
this year has shown a signicant rise in
customer satisfaction to the highest level
since the beginning of our turnaround.
This makes us more relevant to our
customers and gives us the permission
to upgrade customers to our new
solutions.
Growth from new regions and
new solutions
Our investments in Asia, Latin America,
Africa and the Middle East have brought
early signs of growth. Revenues across
these regions grew 14%.
Our new solutions have brought back
growth to our Banking business, with
12% order intake growth in the year,
as a result of our new solutions.
We have launched and established
BankFusion as the newest and most
modern core banking platform in the
last decade, with 40 customers so
far, just over a year after its general
release. BankFusion is now recognised
independently as one of the leading
banking platforms in the marketplace.
We have applied for two patents so
far to protect the unique technology
underpinning BankFusion, and are
continuing to invest in the banking
functionality available in the platform.
During this year, we made signicant
progress in the ongoing transformation of
Misys. We have a strong leadership team
in place that is ready to take the business
to the next level. As a result, we are
strongly positioned to create value for
our customers and for our shareholders,
making Misys an innovative workplace for
our people. We are condent in the future
of our business and our ongoing strategy
to achieve and maintain a leadership
position in all of our market segments.
Mike Lawrie
Chief Executive Ofcer
Hov huve ve done? 3
Misys business segment reporting structure
Banking TCM Misys Sophis
;%
of our people outside of UK and US
Misys
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key erformance ndcators
Our key perornunce ndcuLors Lruck Lhe
progress o our sLruLegy Lo Lrunsorn Msys
und ucheve eudershp n our chosen hnuncu
servces soLvure nurkeLs Lhrough nvesLnenL,
revenue grovLh und operuLng ehcences.
Reported Group revenues rose by
8% including the rst post-acquisition
revenue contribution from Misys Sophis
in Q4. On a pro-forma, constant currency
basis, Group revenues increased by 4%
with consistent growth across the
Banking and TCM divisions and
signicant growth in Misys Sophis.
Adjusted operating margin expanded
0.8 percentage points (1.3 percentage
points on a pro-forma, constant currency
basis) resulting from reductions in
general administration and infrastructure
costs, whilst investment in product
development, sales and solution
implementation was sustained.
Group adjusted operating prot
increased by 13% (12% on a pro-forma,
constant currency basis) due to revenue
growth and well executed cost disciplines.
Outlook
3 Our medium term target for revenue
growth (at constant currency and
pro-forma for the Sophis acquisition)
is 5-8%.
Outlook
3 We expect to continue to improve
margins through further productivity
gains in the back ofce, Misys Sophis
synergies and the benets of revenue
growth.
Outlook
3 We are capable of growing adjusted
operating prot in excess of revenue
growth as we continue to realise further
efciencies in our business model.
Group revenue Adjusted operating margin Adjusted operating prot
Margin expansion (2007-2011)
+pp
Compound annual growth (2007-2011)
+8%
+;%
m
2
0
0
7
2
0
0
8
2
0
0
9
2
0
1
0
2
0
1
1
2
7
4
3
0
2 3
4
4
3
4
2
3
7
0
2
0
0
7
2
0
0
8
2
0
0
9
2
0
1
0
2
0
1
1
1
4
.
3
1
4
.
5
1
5
.
1 1
8
.
6
1
9
.
4
%
2
0
0
7
2
0
0
8
2
0
0
9
2
0
1
0
2
0
1
1
3
9
4
4
5
2
6
4
7
2
m
All key performance indicators exclude Allscripts
and include Misys Sophis for Q4 in 2011
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Order intake grew 9% to 213m,
reecting accelerated sales of our
new Banking solutions and the rst
contribution from Misys Sophis. On
a pro-forma, constant currency basis,
order intake rose by 3%.
We sustained a high level of product
development spend, increasing the
development of key new solutions as
spending on old solutions was reduced.
The increase in adjusted operating
prot per employee reects our focus
on productivity improvements during
the year. This year, we made good
progress on cost savings across a
range of administrative functions, whilst
we increased implementation capacity
in our Centres of Excellence located in
Bangalore, Manila and Beijing. We also
expanded our sales and solution
consulting activities in all regions.
Outlook
3 As our new solutions gain acceptance
in the marketplace, our objective is
to generate high levels of order intake
growth from new customers, upgrades
and associated implementations.
Outlook
3 We aim to sustain research and
development spending as a proportion
of revenue. Development resource
will be efciently allocated between
maintaining existing solutions and
developing new solutions to meet
the needs of our customers.

Outlook
3 We aim to continue delivering higher
productivity per employee through
increased revenues, streamlining
processes, and more efcient use of
our development and implementation
skills outside the US and UK.
Total order intake Research and development Adjusted operating prot per employee
Year on year growth
8%
+8%
Year on year growth
+.%
2
0
0
7
2
0
0
8
2
0
0
9
2
0
1
0
2
0
1
1
1
1
1
1
5
6
1
6
8
1
9
5
2
1
3
m
2
0
0
7
2
0
0
8
2
0
0
9
2
0
1
0
2
0
1
1
5
8 6
1
6
9
6
4 6
9
m
2
0
0
7
2
0
0
8
2
0
0
9
2
0
1
0
2
0
1
1
1
4
1
5
1
5
1
7
1
9
k
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Msys Sohs
Msys $ophs uddresses u urge sce o Lhe
hnuncu servces secLor, ron nvesLnenL
Lunks on Lhe se-sde Lo goLu usseL
nunugenenL orgunsuLons, hedge unds
und uny ohces on Lhe Luy-sde.
How rms manage risk is changing
As regulation intensies and cross-asset
class strategies, as well as the use of
derivatives, become more prevalent, fully
integrated portfolio and risk management
solutions are becoming increasingly
important. The turmoil of the past three
years has increased the need for rms
to understand and assess their risk
exposure.
In the buy-side, the use of derivatives
and risk management are becoming
an integral part of rms trading and
compliance strategies to secure and
improve performance. In the sell-side,
liquidity shortages have led banks to
review liquidity risk as well as their
day-to-day cash at risk. New Basel
regulations have also resulted in banks
taking a much more analytical view
of credit risk with the introduction of
measures such as CVA (credit value
adjustment) and IRC (incremental
risk charge).
As a result, both buy-side and sell-side
rms must combine trading and risk
management practices in the way in
which they manage their assets.
Demand for cross-asset portfolio
and risk management solutions
is on the rise
For many organisations, their current
trading or portfolio management
solutions are not geared up to deal
with the complexity of todays nancial
instruments and the associated market
and credit risk implications. The last
few years have seen many banks
strengthening their securities nance
business and increasing their use of
instruments such as Portfolio Swaps
and ETFs (Exchange Traded Funds)
as they strive to improve market access
and investment offerings for their client
base. These changes are driving
investment banks to strengthen their
business processes and improve risk
management procedures.
Interest in commodities has increased
with investment banks creating more
investment and hedging products to
satisfy increased demand pushed
up by high volatility in the commodity
markets. Last year, three Misys Sophis
clients incorporated European and US
gas and power commodities into their
portfolios for the rst time in order to
leverage regulation changes.
As nancial institutions expand the
scope of their investment or trading
strategies, they are looking for a solution
that can handle multiple asset classes,
as well as sophisticated risk calculations.
We have kept pace with recent trends
by strengthening our ow business
processes, introducing new commodity,
fund and synthetic products and
investing in market, credit and liquidity
enterprise risk management.
Pascal Xatart Executive Vice President
and CEO Misys Sophis
Business summary
4th quarter revenue 17m up 32% 3
4th quarter total order intake up 3
1% at 11m
4th quarter adjusted operating 3
prot 6m up 155%
4th quarter adjusted operating 3
margin 33% up from 17%
Key new buy-side customers 3
added
+.%
4th quarter revenue
Financial performance measures reported
on a like-for-like basis. See the nancial review
for reconciliation to as reported measures.
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Positioned for growth
Misys Sophis heritage lies in the
sell-side, where we developed a market
leading trading and risk management
solution, renowned for its handling of
equities and equity derivatives. This
expertise led us to develop a similar
solution for the buy-side, which quickly
surpassed the capabilities of other
portfolio management solutions due to
its ability to process complex products
and derivatives, its integrated risk
management capabilities and its ability
to address the specic needs of
hedge funds.
Our goal is to position Misys Sophis as
the de facto provider of portfolio and
risk management solutions, recognised
as being able to handle every part of a
nancial institutions needs, from both a
functional and an asset class standpoint.
Today, we are recognised as the
market leading solution for equities,
equity derivatives and commodities
on the sell-side and the leading cross-
asset portfolio and risk management
solution on the buy-side. With the full
force of Misys behind us, we will be
able to expand our solutions further,
leveraging its development resources
and geographical coverage to position
ourselves to capture a larger share
of, as well as actively expand, our
addressable market.
A successful integration with Misys
We are very pleased to be part of
the Misys team and the opportunities
that this affords to our people and our
business. Our sales teams have already
advanced a number of cross-selling
opportunities and we fully expect this
activity to increase over the coming
12 months.
Misys Sophis VALUE will be positioned
as Misys agship solution for the
buy-side and we feel condent that we
will be able to win a larger percentage
of the buy-side pipeline with this offering,
further solidifying our leadership position
in this segment.
Misys Sophis RISQUE, our solution for
the sell-side is complementary to Misys
Summit. By combining our research
and development efforts, our clients
will be able to benet from additional
functionality currently available in the
Misys suite of products, as well as
improved asset class coverage in the
areas of Forex, xed income and interest
rate and credit derivatives. Equally,
Summit clients will be able to benet
from RISQUE functionality in equities,
equity derivatives and commodities.
Expanding our penetration
of the buy-side
The buy-side market for portfolio and
risk management solutions is still at a
relatively early stage of development.
With more than 10,000 organisations
worldwide that have a potential need
for a system, this represents a massive
opportunity, and as such will remain a
rm focus for Misys Sophis. As our
prospective customer base is widely
dispersed across the globe, we will
leverage Misys geographic footprint,
especially outside of Europe and in the
emerging markets of Asia Pacic and
Latin America.
More exibility for our clients
At Misys Sophis, our philosophy
has been to deliver our solutions in the
way that our clients wish to use them,
be these in-house implementations,
hosted or leasing options, or Software-
as-a-Service (SaaS) delivery. The
software componentisation project
currently underway at Misys will result
in even more exibility for our clients in
the way in which they can select and
consume our solutions and services.
Strategy update
Plan
Reinforce leadership in the 3
buy-side
Leverage cross-selling 3
opportunities
Improve breadth and depth of 3
system functionality
Maximise integration with TCM 3
products
Geographic expansion 3
A long standing client, Banca Aletti (the
investment banking arm of Banco Popolare an
Italian cooperative bank) has been using Misys
Sophis RISQUE since 2005. The bank initially
implemented RISQUE to manage its equities and
equity derivatives business and quickly extended
the platform to cover all of its trading activities
including xed income, credit, ination, forex
and commodities. Today, a very relevant part of
the banks portfolio is managed on the RISQUE
platform which is its primary front-to-back ofce
trading and risk management system.
A new risk reporting challenge
The new Basel 2.5 framework requires IRC
(Incremental Risk Charge) reporting to be in place
by 1 January 2012. Banco Popolare wanted to
have this in place as soon as possible for the
whole Banco Popolare Group as part of its
internal model for market risk and in order to be
fully compliant with the Basel Accord and other
regulatory requirements.
Leveraging Misys to deliver a rapid solution
The Misys Sophis team leveraged the depth of
functionality available in the broader Misys solution
suite to provide a fast, proven solution to Banco
Popolare. As Misys Opics Risk Plus (ORP) already
has the ability to calculate IRC, a new module
integrating ORP and RISQUE will be delivered
so that Banco Popolare can take advantage of
this functionality within Banca Alettis existing
RISQUE system.
banco Poolare and ts nvestment bankng arm banca Alett
Leverng vuue
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1reasury 8 Catal Markets
1ogeLher vLh Lhe nevy ucqured Msys $ophs
dvson, ve ure Lhe eudng soLvure provder Lo
Lhe cupLu nurkeLs vLh Lhe LroudesL usseL cuss
coveruge und LggesL cusLoner nsLued Luse n
Lhe ndusLry.
Leading provider to the
capital markets
Treasury & Capital Markets (TCM) is a
global leader in its industry and provides
a number of fully-integrated solutions and
services to nancial institutions, including:
cross-asset, front-to-back portfolio and
risk management systems, commercial
loan trading and processing systems,
and conrmation matching systems for
the foreign exchange, derivatives and
precious metals markets.
TCM predominantly sells and implements
its solutions with sell-side rms,
corporations, government-sponsored
entities and asset servicers. Together with
the newly acquired Misys Sophis division,
we are the leading provider of software
solutions to the capital markets with more
than 20 years experience and over 500
customers globally, including 19 of the top
20 capital markets rms, and covering all
segments of the market, including the
TCM markets, asset managers, hedge
funds and life insurance companies.
Our customers use our solutions to
enable more effective and efcient trading
performance and processing, improved
monitoring and reporting, and risk
management across all asset classes.
During the past few years, nancial
institutions have remained focused
on improving efciency and generating
cost savings across their IT platforms.
Many have turned to integrated solutions
such as ours that offer the benets of
automation via straight-through processing
(STP) and are looking to reduce the
number of systems that they need to
support. This is especially true in light
of industry consolidation, where
organisations are less inclined to support
multiple infrastructures across businesses
that have merged or been acquired.
Actions and progress
We continued to win new customers
We improved our market position again
this year, adding 25 new customers;
signicant customers wins included a
large tier 1 bank in the United States,
Macquarie Bank in Australia, OSK in
Malaysia, BEAC in the Cameroon, Hypo
Real Estate in Germany and Mizrahi Bank
in Israel. We continued to expand our
presence in China with six new name
banks, bringing our total Chinese
customer base to 35. We also added
three new name banks in Mexico,
extending our position in this fast growing
market. In general, mid-tier banks were
less affected by the nancial crisis and
have been active with their IT spend;
21 out of our 25 new name wins were
mid-tier banks, and 32 of our customers
in this segment went live last scal year.
We enhanced our market-leading
solutions
Last scal year, we released new
versions of software for each of our
three key solutions: Summit FT v5.5,
Opics Plus v3.1, and Loan IQ v7.1.
Summit FT v5.5
Added business intelligence,
advanced reporting capabilities
and functional improvements in
FX options and equities
Added new back ofce and
reconciliation capabilities through
our partnership with SmartStream
Commenced a major technology
refresh with the aim of componentising
the system in a service-oriented
architecture (SOA) over a three year
period. This programme will leverage
the BankFusion platform capabilities to
enable interoperability of functionality
across our TCM systems
Business summary
Total revenue 185m up 3% 3
Total order intake 108m down 3% 3
Adjusted operating prot 43m 3
up 2% as a result of strong cost
controls whilst maintaining
investment in technology and
feature upgrades
Adjusted operating margin 3
maintained at 23%
25 new name customers 3
Ed Ho Executive Vice President
and General Manager
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Opics Plus v3.1
We encountered some issues with early
customers upgrading to Opics Plus v3.x
software during the year. We have now
largely worked through these issues
but they did have a short term negative
impact on Opics Plus revenue growth.
We now have:
Added new blotters and double-byte
capabilities (to meet requirements
in countries such as China, where
we have signicant market share)
13 Opics Plus upgrades in the year
15 customers are now live on an
Opics Plus v3.x release
We expect many more of our Opics
customers to upgrade to version 3.x
this coming scal year
Loan IQ v 7.1
Released the Java version of
the software
Enhanced our bi-lateral lending
capabilities for commercial lending,
including signicant performance
and scalability enhancements
Added double-byte capabilities
for the Asia Pacic market
Three customers in early adopter
status upgrading to this release
We have built new web-based portals
across all three key solutions enabling
our clients to interact directly with
their customers, and giving them a
competitive edge through online client
access. We have successfully sold these
portal solutions into the Summit, Opics
Plus and Loan IQ customer bases.
We are helping our customers respond
to tough conditions
Regulation and compliance are high on
everyones agenda as many organisations
are compelled to upgrade their systems to
meet regulatory requirements. Laws and
regulations are changing rapidly (many of
which are still being discussed) and are
becoming more stringent. We anticipate
that this will drive the demand for new
solutions and will continue to shape our
product roadmaps. We are currently
developing new functionality for Central
Counterparty Clearing, with the input of
some of our customers, with the rst phase
of delivery in September 2011. We also
won our rst standalone risk management
deal in China with Shanghai Pudong Bank
to assist them with their Basel compliance
with Chinese regulators. We expect to
leverage this solution and extend it to our
other customers in China.
We are generating new revenue
opportunities
One of our key goals for this year was
to extend our presence in the buy-side
market. This has been achieved with the
acquisition and ongoing integration of the
Misys Sophis business. Our divisions are
working closely together on cross-selling
opportunities and we expect to be able
to drive deeper into this market and
leverage Misys Sophis leading position
in the buy-side, equities and equity
derivatives. We aim to achieve signicant
revenue synergies over the next three
years across our existing customer base
and prospects.
Maintaining leadership
Our priority in the coming year will be
to maintain and build on our leadership
position by strengthening our client and
partner relationships, integrating the
Misys Sophis skills and expertise with
TCM, and continuing to invest in our
people, our technology and the value
propositions of our solutions. Regulation
and compliance will drive the demand
for our new solutions, and will continue
to shape our product roadmaps.
Performance and scalability, especially
across vanilla asset classes, are
becoming much more relevant as
transaction volumes rise exponentially.
Delivering further improvements in these
areas will be of paramount importance
to our continued success.
Strategy update
Lead: (2-4 years) Future
Extend product portfolio coverage 3
and functionality
Achieved with further
developments planned
Target needs of mid-tier banks 3
Expand footprint in emerging 3
economies
Continue with STP and system 3
consolidation opportunities
Continue technology upgrade 3
programme across all solutions
Improve breadth and depth of 3
system functionality to support
customer needs
Generate revenue opportunities 3
with Misys Sophis through cross-
sale efforts
Boost services capability 3
and capacity
Achieved
Extend into higher value 3
service offerings
Achieved
Increase use of partnerships 3
Achieved
Misys has been a key strategic
vendor to our rm, with Summit,
Misys Sophis RISQUE and Loan IQ
as signicant systems in our IT hub.
The acquisition of Sophis further
strengthens the interrelationships
between our two companies, and
we look forward to the further
integration of the solutions and the
stronger value propositions that
Misys will provide for us.

Marnix van Stiphout
ING Bank
.
new name customers
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bankng
Ly nukng conLnuous ngruLon u reuLy, ve
ure hepng Lunks Lo nnnse Lhe rsk o core
Lunkng sysLen repucenenLs or upgrudes,
und ure chungng Lher upprouch Lo sysLen
renovuLon.
Banks want to get the best out of
new technologies
This is where Misys comes in. We are
developing some of the most innovative
solutions available to meet banks
requirements for their core banking
and transaction banking businesses.
BankFusion is the newest core banking
solution to hit the streets in the past
decade. Embracing the latest
developments in service-oriented
architecture and componentisation,
our development teams have
created a completely new approach
to delivering, implementing and
upgrading a banking system.
BankFusion shows strong demand
The traction that we have experienced
with BankFusion over the year
demonstrates that the banking
community is ready to rethink its
approach to systems and technology.
Adoption rates have been strong,
particularly within our existing client
base, and by the end of the year we
had 40 BankFusion customers.
The attraction of BankFusion is twofold.
Firstly, it minimises the risk associated
with a core system replacement which
has led many banks to maintain their
legacy systems and customise them over
time. Today, the cost of maintaining these
systems and keeping them up-to-date
with ever changing requirements is
becoming untenable, in particular at a
time when banks are keeping a sharp
eye on their cost-to-income ratios.
BankFusion takes a continuous
migration approach to system renovation,
enabling banks to identify and prioritise
key functions, upgrading or replacing each
area over time while keeping the business
running. In this way, system upgrades or
replacements can be implemented with
a minimum of disruption to a banks
day-to-day business operations.
Secondly, a bank has the option to take
BankFusion as a packaged system such
as BankFusion Universal Banking which
they can easily add to and maintain over
time. Both options make it signicantly
easier for banks to upgrade or replace
existing processes and add new
functionality as and when required.
A banking system for today
Today, banks face a plethora of challenges
which their legacy banking systems were
simply not designed to meet. For example,
a banks cost-to-income ratio can be
adversely impacted by the high cost of
maintaining older banking systems, largely
due to the vast multitude of interfaces
between them, and the inability to bring
new products to market quickly or make
them compatible with new distribution
channels such as mobile banking,
affecting its protability.
The exibility inherent within BankFusion
means that it is better able to address
these issues, equipping banks with
the ability to innovate and bring new
products to market within days, not
weeks, incorporate new regulations
and market changes within their
ongoing business processes, and
realise synergies from M&A activities
more quickly. We are helping banks
to reduce their cost-to-income ratio,
making them best in class.
Business summary
Total revenue 167m up 3% 3
including a 10% increase in
the 2nd half
Total order intake 93m up 12% 3
Adjusted operating prot 36m up 3
17% as a result of higher revenues
and continued cost discipline
Adjusted operating margin 3
increased to 21%
BankFusion adoption accelerated 3
with 27 sales in the period and
40 customers in total
26 new name customers of trade 3
or payments solutions
Al-Noor Ramji
Executive Vice President and
General Manager
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Leading the way in transaction
banking
Misys has continued to consolidate its
market-leading position in transaction
banking solutions through a winning
combination of solution innovation, new
customer wins and highly successful
implementations. We are uniquely
placed, both in the breadth of our
transaction banking solutions portfolio
and our ability to integrate them for
maximum operational efciency.
This year, our trade nance solutions won
the global award for best Trade Finance
Tech-Vendor in Trade Finance Magazines
Awards for Excellence. Sales order intake
grew by over 50% this year, including 26
new customer wins, reinforcing Misys
as the leader in trade services solutions.
Misys Trade Portal has been updated
with enhanced user-interface tools and
improved navigation.
Misys Payment Manager has also
established itself as a market leader,
attracting signicant customer wins
and demonstrating highly successful
implementations in less than six months.
Enabling new distribution channels
for retail banking customers
Impressive progress has been made
by our online banking portfolio. The
Misys personal nance solution for
retail banking customers has enjoyed
exceptional sales growth, winning
customers across our territories. Misys
Mobile has won its rst customers and
is expanding into new areas including
social media.
Making life easier for banks
corporate clients
Online, mobile and portal solutions are
changing the way in which banks can
offer services to their corporate clients.
Banks are also taking advantage of the
efciency gains and new services that
can be delivered by combining our portal
solutions, such as cash management,
trade services, and money market/foreign
exchange solutions. This ability to offer
a consolidated view of cash and trade
transactions is helping banks to win new
business from corporate treasurers. At
Misys we are using portal technology
as well as making our solutions available
on a single platform so that banks can
provide new and competitive solutions
to their customers. This unied vision for
online banking solutions means that our
clients are able to rationalise their banking
infrastructure, reduce maintenance and
management costs and automate
previously manual processes.
National Bank of Oman (NBO), one
of the largest banks in Oman and the
rst local bank in the Sultanate, has
chosen the Misys trade nance solution
as part of its plan to expand its trade
nance business. The Misys solution
will help the bank launch innovative
trade products as well as increasing
traditional trade volumes.
The integrated solution combines the
power of the back-ofce processing
system, Misys TI Plus, with the award-
winning Misys Trade Portal, the
e-business console. This will enable
customers to connect seamlessly to
NBO and conduct their international
trade business at the same time as
accessing a wide range of nancial
supply chain services.
We were very impressed by the
fully integrated front-to-back trade
nance solution offered by Misys.
The corporate Service Level
Agreement-driven workow and
business dashboard incorporated
into the system were important
differentiating factors. We are
condent that Misys TI Plus and
Trade Portal will help us to meet
our growth targets for our traditional
products as well as newer ones,
such as factoring.

Humayun Kabir
General Manager Wholesale
Banking, National Bank of Oman
Natonal bank of Oman
Leverng vuue
Strategy update
Grow Misys BankFusion developer 3
community
Not achieved
Grow Misys BankFusion developer 3
community
Penetrate Tier 1 and Tier 2 banks 3
Help banks to launch new services 3
by leveraging social networking
channels
Maintain add-on module pipeline 3
for cross-sell
Achieved
3 Leader in core banking operating
system market
In progress gaining traction
with BankFusion
.5
new Transaction Banking customers
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Oen Source
1hs yeur hus seen sgnhcunL progress n Lhe
deveopnenL o our Lusness us ve nov huve
uy operuLonu sysLens up und runnng n
LoLh o our LurgeL nurkeLs.
Misys Open Source Solutions (MOSS)
is pioneering the development and
adoption of open source solutions in
two key sectors healthcare in the
creation of health information exchanges
(HIEs) and the carbon market in the
development of global environmental
registries that enable organisations to
measure, reduce and trade their carbon
emissions. This year has seen signicant
progress in the development of our
business. Our rst healthcare clients are
live on the Misys Connect Exchange
and Misys Connect Portal and in
partnership with The Climate Registry
we have developed and deployed the
largest cloud-based voluntary carbon
registry system in the world.
Health Information Exchanges
a ripe market for open source
The US market for healthcare information
technology is booming, thanks to the
American Recovery and Reinvestment
Act of 2009 that has set aside more
than $US 40 billion in incentive dollars
to providers provided that they use
the technology in a meaningful way.
2011 marks the rst year when those
payments began to ow as part of the
Stage 1 meaningful use demonstrations.
Stage 2 of the meaningful use payments
is expected to be predicated on the
use of HIEs. HIEs aim to promote
interoperability by enabling the sharing
of patient records between provider
ofces and hospitals, and tying together
the related services required for end-to-
end patient care.
In many cases, cost has been an
impediment to the creation of community
exchanges. MOSS led a number of
worldwide open source development
projects that resulted in the creation of
core exchange components that make
up the Misys Connect Exchange
platform. Coupling the open source
platform with the proprietary Misys
Connect Portal provides users with
cost effective, best-of-breed solutions
that are open and standards-based.
The Hartford Hospital exchange (in
Connecticut) was the rst exchange
to go live with an initial patient load of
over 2.5 million patient records.
eHealthConnecticut was the second
exchange to go live and is now fully
operational and is transferring data
between three hospitals and two
Federally Qualied Health Centres.
With a proven, operational open source
HIE in the market, we are gaining traction
both inside the US, elsewhere in the
Americas region, and in Europe and
Australia. We are now focused on
building out our distribution network
to pursue these and other opportunities
around portals and community
data solutions.
Bob Barthelmes Executive Vice President
and General Manager
Business summary
Deployed largest cloud-based 3
voluntary carbon registry system
in the world
First clients live on the Misys 3
Connect Exchange and Misys
Connect Portal
Over 2.5 million patient records on 3
Hartford Hospital exchange
Announced partnership with iCET 3
and The Climate Registry to deploy
an Energy & Climate Registry for
China
Being an emergent segment, Open Source
is reported within Corporate & Other in the
nancial statements.
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Leading in carbon registry systems
As a result of our partnership with
The Climate Registry, a non-prot
organisation that provides meaningful
information to reduce greenhouse gas
emissions, we have developed and
deployed the largest cloud-based
voluntary registry system in the world.
More than 8,000 facilities from 850
organisations are providing data to
the registry making it one of the leading
bodies involved in the monitoring,
reporting and verication of emissions.
At the UN Climate Summit, held in
Mexico in late 2010, it was announced
that we are working in partnership with
the Innovation Center for Energy &
Transportation (iCET) and The Climate
Registry to deploy an Energy & Climate
Registry for China. We are in discussions
with several other NGOs regarding the
deployment of our registry platform in
other regions.
Extending our footprint
We are starting to reap the rewards
of our investment in open source
solutions with live platforms now
fully operational in both of our target
sectors. Our focus for the coming year
will be to extend our footprint in the
US for healthcare, as well exploring
opportunities in Europe and Australia
which are growth regions for HIEs;
and to continue working with NGOs to
expand the roll out of our environmental
registry platforms. We are also actively
expanding our partner relationships to
build our distribution network.
iCET announce Chinas Energy
and Climate Registry
iCET announced that it will join
forces with the Beijing Environmental
Exchange, Los Angeles-based The
Climate Registry and New York-based
software company MOSS to promote
the Energy and Climate Registry as
the predominant greenhouse gas
reporting platform in China.
The goal of the Energy and Climate
Registry (ECR) is to produce a reliable,
consistent and veriable information
database and reporting tool for energy
consumption and carbon emissions
on the corporation and local
municipality levels. By joining to
the ECR, multinational and domestic
corporations will be encouraged to
voluntarily sign up to report input
parameters to calculate energy
consumptions and produce GHG
emission inventories, which will be
veried by a certied third party.
Costs are less than half of what
we would have expected if we
had gone with a commercial HIE
product and it is certainly meeting
the expectations I had from a cost
standpoint from the very beginning.

Stephan D. ONeill
Vice President of information
services, Hartford Hospital and
board member, eHealthConnecticut
Strategy update
3Develop a protable Open Source
business
Achieved
Extend healthcare footprint in US 3
3Explore healthcare opportunities in
Europe and Australia
3Continue working with NGOs to
expand roll out of environmental
registry platforms
Build partner distribution network 3
3Integrate third-party technologies
into our platforms
Achieved
3 Develop Connect strategy
Achieved
3Develop carbon trading platform
application
Not achieved
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Global Servces
1he un o Lhe CoLu $ervces Leun s Lo
Le Lhe provder o choce or Lechnoogy
und consuLng servces ussocuLed vLh Lhe
sue, npenenLuLon, upgrude und ongong
supporL o u o Msys' soLvure souLons.
Revenue grew 10%
Our teams engage with customers
at each stage of their relationship
with Misys; from solution consultancy
at the outset of an implementation or
upgrade through to implementation
and integration services, product training
and ongoing support and maintenance.
We have streamlined the organisational
structure to better meet customer-needs,
concentrating non-customer-facing
staff in our Global Service Centres in
Bangalore, Beijing, Bucharest and Manila
and retaining project specialists and
consultants in customer-facing roles
across our regions.
Building a high performance team
Operating as a high performance team
is a strategic imperative for the success
of our services business. Our value lies
in our ability to unlock the full potential
of our software efciently and effectively
so that our clients can benet from
their investment in Misys solutions
and expand their use within their
organisations. To deliver the levels
of performance that we want to
achieve across all areas of our services
organisation, we are basing our services
strategy around three key components:
Creating exceptional value for our
customers
Ensuring operational excellence
Developing unique skills and
knowledge in our people
The main thrust over the course of the
year has been on honing the Global
Services teams to deliver operational
excellence and achieving the right
structure to focus on further developing
our skills to meet customer needs.
Operational excellence
push on protable growth
We are undertaking in-depth reviews
of our projects to better measure and
control their timeliness, resource
optimisation and customer satisfaction.
By establishing clear measurements
that can be applied to each project
and devolving accountability to project
managers, we have started to see a
positive impact on project metrics.
Localising accountability at the project
level promotes earlier engagement with
sales and solutions consulting, resulting
in a more effective execution by all
project participants.
This is integrated into the companys
wider drive to devolve more decision-
making into its regional operating units
and down to client-facing staff. The
next step is to industrialise the services
process to deliver projects faster with
the ultimate goal of being able to offer
competitive, xed price projects for
standard implementations. We are
making good progress in this area by
standardising methodologies and tools,
developing best practices that can be
re-used easily across different projects,
and systematically identifying those
project components that can be
delivered off-shore.
Effective customer support
71% of our support staff are now based in
our Global Service Centres in Bangalore,
Manila, Bucharest and Beijing. Our most
seasoned support staff remain close to
customer locations, working on-site with
key customers to resolve issues.
Our support teams strive to ensure
customer success. Successful customers
engender loyalty, will buy more and are
more likely to recommend Misys. This
year, we launched the Make it 10
Carlos Lopez-Abadia Vice President
Services & Support
Global Services provides:
System integration services for 3
Misys solutions
Implementation & technical 3
services
Training & education via the Misys 3
Academy
Custom development 3
Premium Support Services 3
Application Support 3
Business summary
Extended services and support 3
offerings through initiatives such as
premium support
Total revenue grew by 10% 3
Service orders grew by 11% 3
Global Services revenues are managed and
included within business division results. Financial
performance measures reported on a pro-forma,
constant currency basis. See the nancial review
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initiative aimed at achieving 10 out of 10
in post support case surveys. As a result
of this initiative, ratings of 9 and above
jumped by 45%, giving an industry
leading Net Promoter score for case
satisfaction.
Investing in people
We have launched a number of initiatives
to ready our workforce to meet the
changing requirements of our client base.
Initiatives such as these enable our people
to develop their skills and progress whilst
beneting our clients via more highly
trained, motivated teams that understand
their business better:
Recruitment we have stepped up
our recruitment programmes to bring
in new skills including more extensive
project management capabilities that
are required in the eld. This includes
enhanced graduate schemes that
provide a true career path within Misys
so that we can develop and nurture
the leaders of tomorrow.
Skills rotation we have embarked on
a programme to rotate resources
between our services and support teams
to provide our staff with a 360 view of
the customer. Commenced in Asia, this
programme has already delivered more
than 5,000 man days of services through
our support staff and is now being rolled
out globally.
Certication programmes we are
expanding our online-based training
to provide self-service opportunities for
staff to continually increase and update
their product knowledge. In conjunction
with this initiative, we are launching
a 3-level certication programme to
measure our skills progression to
continuously challenge ourselves and
grow our expertise.
Misys Managed Services Asian Banker award: Best Back
Ofce Trading System
Misys Managed Services, in particular
Premium Support Services continued
to grow signicantly over the year
reecting the growth potential
highlighted in last years annual report.
Revenues grew by 73% reecting the
pipeline generated over the year by the
launch of this new service offering.
Over 23% of our expanded customer
base has now taken some form of
Managed Services from Misys.
Misys won this award for the successful
implementation of Misys Summit FT at
Bank of Communications in Shanghai
to support the front-to-back operations
of the banks derivatives business.
Speed of implementation, the benet to
the banks entire derivatives business
and the skilled professional services
team that supported the bank
throughout the project were the key
factors in Misys success.
The objective was to provide Bank of
Communications with a real-time
straight-through-processing solution for
its derivative products that would be up
and running within a six month
timeframe.
Partner relationships complement our
unique services and support offerings
for Misys solutions. We partner with
HCL and everis on a global level, where
their business consulting expertise and
project scoping skills add signicant
value to client engagements. We
engage with many partners at a local
level to help us win business and
provide local expertise.
Next year will see us delivering the
growth that we have lined the Global
Services team up to achieve. We intend
to leverage the potential for learning
and training programmes and continue
to drive protable growth, faster
implementations and superior support
for our clients.
Client service is of utmost importance
to us. We continually strive to improve
our service in every way we can, to
all our clients, whatever their size.
This means we have to introduce
the best technology on the market
to improve systems, achieve optimal
efciency and keep costs and risks
to a minimum.

With increasing trading volumes
and new nancial instruments, we
needed a system that could support
our operations seamlessly from the
front ofce to the back. Misys
Summit FT is the very best of fully
integrated solutions on the market
and the Misys team worked with us
tirelessly to achieve a smooth and
timely transition.

Shen Shaozhen
General Manager, Bank of
Communications Operations Centre
Partnerng for success
Leverng vuue
Strategy update
Extend product portfolio coverage 3
and functionality
Ongoing process
Continued improvement to 3
infrastructure, methodologies
and processes
Develop proprietary methodologies 3
Drive quality and customer 3
satisfaction
Increase speed of delivery 3
Extend into higher value 3
service offerings
Achieved with Premium
Support Services
Increase use of partnerships 3
In progress
8
projects went live in 2011
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Peole
Our peope ure our nosL nporLunL usseL und
ve conLnue Lo ocus und nvesL n our LuenL
Lo ensure Lhey huve Lhe sks needed Lo grov
Lhe Msys Lusness.
Our business depends on our people,
and our people depend on a working
environment and culture that empowers
them to succeed, whatever their role in
the organisation. We have reviewed our
organisational design and streamlined
our business to adjust to regional
demands and new growth markets
whilst maintaining close alignment with
our customers.
We have hired approximately 900 new
employees over the course of the year,
60% of which were for development
and customer support roles, demonstrating
our commitment to these areas of
our business. Our core development
and customer support activities are
concentrated in our Global Development
Centres in India, the Philippines, China,
Romania, Ireland and France.
Overall headcount has increased by 6%
excluding the impacts of the divestiture
of Allscripts and acquisition of Sophis.
Through our recruitment programme, we
are bringing in new expertise from both
within and outside of our industry, as well
as having a renewed focus on graduate
recruitment to support our future talent
ow and drive a high performance
culture. We are currently embarking on
a global recruitment drive for our sales
and pre-sales functions.
Developing talent
Identifying, nurturing and developing
talent lies at the heart of our people
strategy. We are continuing to invest
in our employees to ensure that they
have the skills needed to grow the
Misys business and will be signicantly
expanding our people programmes and
learning initiatives over the coming year.
Distinguished Engineer Programme
launched in 2010 to recognise the
importance of technical leadership within
Misys. This programme was designed to
provide additional career opportunities
and reward outstanding technical
performance.
Leadership & management courses
ensure that we have consistent
leadership skills across our global
centres, regional hubs and local ofces
in order to provide world-class support to
our customers. Over 400 managers have
completed our Essential Management
Skills courses. Next year, we are
launching a more advanced programme
for senior managers to help them and
their teams prepare for and navigate the
next wave of growth to drive results.
Top 100 our top performing employees
are identied and prioritised for talent
management, coaching and succession
planning. We now have a strong
management team in place which is
positioned to take Misys to the next level.
The Top 100 underpins the Executive
Team with their ability to communicate
our company vision, demonstrate
strategic agility, lead with integrity and by
example, and inspire and develop others.
Our people programmes:
Online and classroom based 3
learning
Misys Academy 3
Distinguished Engineer Programme 3
Graduate trainees 3
Employee engagement 3
Employee engagement:
Improvements in overall 3
engagement score
Enthusiasm for delivering good 3
customer service was higher than
the norm (+10% above benchmark)
Belief in the effectiveness of the 3
Executive team
Nearly 75% of the organisation 3
responded to this survey (66%
last year)
Top down communications 3
effective and easy to understand
Overall strategy and goal alignment 3
is positive people understand
how their work contributes to the
objectives of the organisation
Frank Douglas
Executive Vice President
and Group HR Director
oo
new employees
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Graduate programmes focus on
developing transferable skills that
combine business knowledge with
functional and product training. Our
graduate recruits balance on the job
learning with e-learning curriculums
and class-based training.
We have a renewed focus on graduate
recruitment and development in
support of our talent mission: to improve
business results and gain competitive
advantage now and for the future by
identifying and building talent across
the organisation growing talent from
within. We currently have graduate
programmes in some of our key sites,
Manila, Bangalore, New York and a focus
on sales in London. We will continue
to strengthen our bench and our
approach to an end-to-end leadership
development framework to help us
attract and retain the best talent in
the market.
Safeguarding our staff
Our people are our business and
therefore we need to ensure that we
have adequate safeguards in place to
ensure their safety. We have a global
security strategy that provides all
employees with access to medical,
security and travel assistance. A
dedicated Business Continuity team
keeps all employees up-to-date with
the latest security announcements
worldwide via the corporate intranet
and utilises a global notication service
for those travelling on business and in
times of crisis. Our business continuity
plans were put into action to deal with
the Japanese tsunami and earthquake
disaster, enabling us to provide
immediate assistance to employees
and their families.
Promoting equal opportunities
and diversity
Misys is committed to a workplace
that is free from unlawful discrimination,
harassment, victimisation and retaliation
where everyone will receive equal
treatment regardless of gender, colour,
ethnic or national origin, disability, age,
marital status, sexual orientation or
religion. We promote equality and work
to the principle that all employees are
selected and treated on the basis of their
abilities, merits and potential and do not
take irrelevant factors into consideration.
Misys recognises the diversity of the local
population within which it operates and
embraces diversity within the workplace
to enhance the vibrancy of culture and
experience and encourages fairness
and justice.
It is our policy that people with disabilities
should have full and fair consideration
for all vacancies. Should an individual
become disabled whilst employed at
Misys we will endeavour to retain them in
the workforce. We will actively retrain and
adjust their working environment where
possible to facilitate their needs and to
allow them to maximise their potential.
We conduct an annual survey to review
how our employees are feeling about the
business, their role and our future. This
feedback is essential in building business
plans to ensure that we motivate staff
and implement the changes necessary
to achieve our next level of growth.
The HR organisation is focused on
streamlining processes, policies and
management information to deliver
consistent service and provide the
information required to support
decision-making.
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Socal and envronmental
resonsblty
ve recognse Lhe nporLunce o
nunugng Lhe npucL o our Lusness
n u susLunuLe vuy.
Misys remains a values driven
organisation. We are present in many
countries around the world and recognise
the importance of managing our impact
in a sustainable way in all regions within
which we operate. This includes
environmental performance, business
ethics, supporting local communities
and looking after our employees. During
the past year, we have introduced several
company-wide initiatives to drive forward
this agenda. These initiatives reect
our overall business strategy and the
aspirations of our Board, our employees,
our partners, our customers and the
communities we serve.
Last year, we reported that we had
established an Environment and Social
Responsibility Committee which reports
directly into the General Counsel and
Company Secretary. This committee
has met bi-monthly through the year
and is delivering on the responsibility
agenda. At each meeting, the committee
considers our environmental initiatives
and the charitable giving and
volunteering framework.
The Misys Charitable Foundation
2010/11 was the nal year of operation
for the Misys Charitable Foundation
as reported in last years annual report.
The Foundation was set up in 1997
with the primary objective of furthering
education in IT on both a domestic
and international level.
The achievements of the Foundation
have only been made possible by the
tireless work of Nigel Talbot-Rice who
retired this year as a director of the
Foundation. During its nal year, the
Foundation awarded scholarships to 58
students worth approximately 95,000.
A further 61,000 was donated to
schools and other organisations for the
provision of IT equipment. Since 1997,
the Foundation has made grants of over
1.95m to its charitable causes.
The work of the Foundation has reaped
rewards this year with 32 Misys scholars
having graduated in the UK. Of these,
26 achieved rst class degrees with the
remaining 6 receiving a 2(1).
We have received many letters of
thanks in recognition of the work of
the Foundation and in particular Nigel
Talbot-Rice. The Board of Misys plc
would like to thank Nigel for his hard
work and dedication to the Foundation
over many years.
The Misys Club
We have launched the Misys Club
to harness and mobilise community
and environment initiatives across the
Group with support from management.
We have site leaders in our four main
ofces that oversee and facilitate the
organisation of local events under the
Misys Club framework. Each site has
selected two charities to support and
Misys will match fund raising by staff for
those charities up to 25,000 per site.
Tom Kilroy Executive Vice President
General Counsel and Company Secretary
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We have also introduced a framework that
allows each member of staff to spend a
day volunteering in their local community.
This can be done on an individual basis or
as a team event. This should benet not
only the communities within which we
operate but also our staff.
Charitable donations
Prior to the establishment of the Misys
Club, we continued to make direct
donations to charity throughout our
regions totalling 18,877. We supported
various causes from The Cystic Fibrosis
Society to Big Brothers, Big Sisters, a
mentoring organisation for children. In
the future, all charitable donations will
be made through the Misys Club.
Social responsibility and governance
Building on the work undertaken last year,
we have strengthened our ethics culture
further across the business. We have
introduced a compulsory e-learning
course on understanding the Code of
Conduct. You can nd a copy of the
Code on our website, www.misys.com.
We have also introduced compulsory
training on bribery and corruption for
those most likely to be exposed to
unacceptable behaviour. Given the
diverse markets within which we operate,
we recognise the need to provide all our
employees with the tools and knowledge
to do business effectively and in an ethical
manner to the benet of all parties.
We operate a raising concerns hotline
and web reporting tool to ensure that
all staff are able to report any concerns
they have in respect of illegal or unethical
behaviour, in condence, and without
fear of reprisal. The service is run by
an external organisation to guarantee
condentiality. There is an established
process for considering all matters
reported through the hotline. A
committee consisting of the General
Counsel, the Head of HR, the Deputy
Company Secretary and the Internal
Audit Director review all matters reported
on the line and if necessary escalate to
the Audit Committee.
Environment
We reported our carbon footprint for
the rst time last year. Our business
has changed signicantly during the year
and we have rebased our footprint to
better reect the business we are now.
We have taken on additional buildings
during 2010/11 to accommodate the
growth in the business and our growing
workforce. When tting new buildings
or ofce locations, Misys promotes
green construction practices through
its vendors and internal standards that
increase Misys productivity while
reducing the negative environmental
impacts of its locations.
On a rebased basis our carbon output
per employee for 2010/11 was 2.96.
We continue to take steps to reduce
our CO
2
emissions. We have
consolidated substantial parts of our
corporate operations to more efcient
and environmently-friendly ofces. For
example, in the UK we now occupy one
site. Our headquarters at One Kingdom
Street, Paddington, London has the
highest possible BRE Environmental
Assessment Method rating of Excellent.
The building was constructed on re-used
land close to a major public transport
hub. It employs ground-source heat
pumps, solar panels, specialist glazing
and heat-recovery systems. We have
taken on new premises in Bangalore
and Beijing and we have ensured that
the buildings are tted out in an
environmentally responsible way.
Across our business, we operate
recycling schemes and always use
materials that are renewable, recycled
or re-usable where we can. We have
invested in enhanced tele- and video-
conferencing facilities and support the
green meeting concept, thereby
reducing the need for overseas travel.
Our Board is committed to monitoring
our approach to CSR and is kept
up-to-date on progress by the General
Counsel and Company Secretary.
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!nancal revev
Information in this section is presented on an adjusted basis, excluding
exceptionals and other items. Results from Allscripts Healthcare Solutions, Inc.
(Allscripts) are excluded. These are reported in the accounts as the discontinued
operation. Comparisons to prior year are on a pro-forma constant currency
basis, including pre-acquisition results from Misys Sophis in the prior years fourth
quarter comparatives (see notes on page 47). These measures provide more
comparable and representative information on the trading activities of the Group
than as reported measures. Reconciliation to the as reported measures is
shown on page 41.
Group Operating Results
The corporate transactions that took place during the year
position us well for future growth. The disposal of Allscripts
transformed Misys into a pure play nancial services software
business. The renancing and convertible bond issue in
November 2010 equipped us well for future investment in
the business. The acquisition of Sophis in February 2011
accelerated our capital markets strategy and as a result a
majority of the Groups revenues and prots are from the
capital markets divisions.
Operational progress was strong, including a strong end to the
nancial year with an acceleration to approximately 8% revenue
growth in the second half. Overall revenues for the year were
370m (2009/10: 355m), a growth of 4%. The revenues
reected a return to growth by the Banking division in the
second half, consistent growth through the year in Treasury
& Capital Markets (TCM) and impressive growth in Misys
Sophis in its rst quarter as part of the Misys Group. Recurring
revenues from maintenance, ASP subscriptions, software
leasing and transaction processing constituted 49% of revenues.
Order intake (which excludes maintenance and transaction
processing) grew 3% to 213m (2009/10: 206m).
Adjusted operating prot was 72m. Growth on last year was
12% and the adjusted operating margin was 1.3 percentage
points higher as back-ofce savings were made whilst
investment was sustained in product development and
solution implementation.
OperuLonu progress vus sLrong,
ncudng u sLrong end Lo Lhe
hnuncu yeur vLh un ucceeruLon
n revenue grovLh und .% grovLh
n udjusLed operuLng prohL.
;on
Overall revenues for the year
;.n
Adjusted operating prot
+.%
Growth adjusted operating margin
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Group Operating Results
Operating results from continuing operations for the year ended 31 May 2011
2009/10 2009/10
m 2010/11
As
reported
%
growth
Pro-forma,
constant
currency
%
growth
Revenue
Banking 167 162 4% 162 3%
Treasury & Capital Markets 185 179 3% 179 3%
Misys Sophis 17 13 32%
Open Source 1 1 30% 1 35%
Revenue 370 342 8% 355 4%
Operating Prot
Banking 36 32 10% 31 15%
Treasury & Capital Markets 43 42 2% 42 2%
Misys Sophis 6 2 155%
Corporate & Other (12) (10) (12%) (11) (10%)
Adjusted Operating Prot 72 64 13% 64 12%
before: Acquired intangible asset amortisation, embedded
derivatives gains/(losses) and exchange differences
transferred from reserves (15) (2)
Exceptional items (21) (8)
Operating Prot 36 54 (32%)
Group Revenue Prole
Continuing Operations
Pro-forma, constant
currency
2010/11 2009/10
m
%
of total
%
growth m
%
of total
Initial Licence Fees 102 28 8% 95 27
Application Service
Provision &
Software Leasing 5 1 1% 5 1
Global Services 86 23 10% 78 22
Maintenance 166 45 (1%) 167 47
Transaction
Processing 11 3 6% 10 3
TOTAL 370 100 4% 355 100
Initial Licence Fees grew 8%, a result of greater sales of new
solutions by the Banking division and of new customer licences
by Misys Sophis.
Application Service Provision and Software Leasing
revenues were at similar levels to prior year.
Global Services revenues grew 10% as recently sold solutions
progressed in their implementations and customers adopted
more of our expanded range of support services.
Maintenance was 1% lower than last year, a result of a small
number of contract reductions and cancellations in advance of
recent new customers starting their maintenance contracts.
Transaction Processing fees grew 6% from new adoption of this
service by a number of fund managers and hedge funds and from
greater transaction volumes generated by our existing customers.
Stephen Wilson Chief Financial Ofcer
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Divisional Review
The information in this section is presented on an adjusted
basis, with comparisons to prior year on a constant currency
basis, pro-forma for the acquisition of Sophis and disposal of
Allscripts, unless stated otherwise (see notes on page 47).
Misys Sophis
The acquisition of Sophis was completed at the end of February
2011 and Misys Sophis results are consolidated into the Misys
Group results from the beginning of the fourth quarter.
Misys Sophis has continued to strengthen its market position,
particularly in the buy-side market with sales to asset
managers and hedge funds. During calendar year 2010, 22
new buy-side customers were added, and so far in 2011 new
customers have been added at a similar pace. New customers
in the fourth quarter included specialist investment managers
such as Aldersgate Investment Management in the UK. In
addition, some key long-term buy-side customers such as
ING Life extended their existing Sophis solutions.
During the fourth quarter, a new version of the buy-side solution,
Value, was released. Improved risk features include pre-trade risk
control, liquidity risk management and real-time risk calculations.
New instruments covered include bond-linked contracts for
difference and exchange-traded funds. Returns attribution has
been incorporated into portfolio performance analysis.
Collaboration between Misys Sophis and TCM has resulted
in the rst cross-sell success. Banca Aletti in Italy, a sell-side
Misys Sophis Risque customer, added an Opics Plus module
to meet Basel regulatory requirements by calculating and
reporting a weekly Incremental Risk Charge on xed income
and credit derivatives positions.
Development work began during the year on a new generation
of consolidated cross-asset risk management solutions drawing
on the collective expertise and software functionality within
both Misys Sophis and TCM. The market risk solution was
demonstrated to potential customers during June 2011, and
further solutions for credit and liquidity risk are intended to follow.
m 2010/11 2009/10
%
change
Order intake
ILF/ASP/Software Leasing 8 8
Global Services 3 3 3%
Total Order Intake 11 11 1%
Revenue
ILF/ASP/Software Leasing 8 5 73%
Maintenance 6 6 (1%)
Total Revenue 17 13 32%
Total costs (11) (11)
Adjusted Operating Prot 6 2 155%
Adjusted Operating Margin 33% 17%
Misys Sophis revenues for the fourth quarter were 16.8m
(2009/10: 12.7m). 32% growth on last years fourth quarter
was driven by strong ILF sales from new and extending
buy-side customers of the Value solution, and by the roll-out of
ILF and service revenues during implementation of sales from
the previous year.
Order intake grew 1% as the pipeline started to build up after
a strong end to the previous Sophis nancial year.
Adjusted operating prot was 5.6m, a substantial increase on
the previous years 2.2m, resulting from the higher revenues.
Treasury & Capital Markets (TCM)
TCM has continued to strengthen its market position. The
volume of new name sales was consistent with the previous
year at 25 and was spread across the key Summit, Opics Plus
and Loan IQ solutions, with particular success in growth
regions. In addition, some signicant sales of solution
extensions have reinforced TCMs position with key customers.
Summit, our market-leading cross-asset solution for the
sell-side, added new customers in both developed and growth
regions, including Shanghai Pu Dong Development Bank for
middle-ofce risk management and Misrahi Terahot in Israel
for foreign exchange, money markets and ination-linked
investments. Many existing customers, such as Crdit Agricole,
extended Summit systems to replace in-house and competitor
systems. A new Summit upgrade during the year improved
cross-asset functionality, pricing analytics and market data
interfaces.
Opics Plus, our solution for the mid-market including growth
regions, added 13 new customers, including HSBC in Mexico,
Shinhan Bank in China and others in Thailand and Kenya.
Existing customers such as Union Bank in the US and China
Bohai Bank upgraded to new Opics Plus features such as the
Opics Portal, middle-ofce risk alerts and localisation features
for China.
Our Loan IQ lending solution was the fastest-growing TCM
solution, continuing its expansion into commercial lending with
some large new customers in the US, Australia and Germany
such as Bayerische Landesbank. Some existing customers,
including WestDeutsche Landesbank in Germany, signicantly
extended their Loan IQ systems. New commercial lending, loan
origination and portal features were released during the year.
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m 2010/11 2009/10
%
change
Order intake
ILF/ASP/Software Leasing 56 64 (12%)
Total Order Intake 108 112 (3%)
Revenue
ILF`/ASP/Software Leasing 51 55 (7%)
Maintenance 76 76
Transaction processing 11 10 6%

TCM revenues grew 3% to 184.9m. Services grew 22% as
implementations progressed on recent new and upgrading
customers, resulting in 87 go-lives during the year.
Order intake was 3% below the prior year, reecting last years
very strong nish. Services orders grew 9% and included
implementations for large new Loan IQ customers as well
as Opics Plus upgrades.
Adjusted operating prot grew 2%, resulting from revenue
growth and cost control, whilst investment continued in
technology and feature upgrades.
Banking
In Banking, our new solutions have started to generate
signicant revenues for the rst time. New solutions, principally
comprising BankFusion and Transaction Banking, contributed
45% of the banking divisions ILF order intake, up signicantly
from 22% in the previous year.
BankFusion was adopted by 27 customers in the period,
bringing the total number of sales to 40. These BankFusion
sales ranged across various aspects of the BankFusion
strategy, including new name wins, replacements of legacy
Misys systems with BankFusion Universal Banking, and
conversions of legacy Misys solutions to BankFusion versions.
In addition, during the second half of the year, existing
BankFusion customers began to extend their BankFusion
solutions by adding new application functionality such as
Branch Teller modules (Habib Bank and Amsterdam Trade
Bank), and by extending their BankFusion solutions into new
territories and operations (Nordea and BBAC).
In Transaction Banking, there were 26 new sales of trade or
payments solutions, many incorporating our unied portal
technology. Trade Services sales included Pohjola Bank in
Finland and Chinatrust Commercial Bank. Payments sales
included Qatar International Islamic Bank and United Overseas
Bank in Singapore, where Cash Portal was part of our biggest
ever sale in Asia.
m 2010/11 2009/10
%
change
Order intake
Total Order Intake 93 83 12%
Revenue
Maintenance 84 85 (1%)
Global Services 35 37 (3%)
Order intake returned to growth during the year with a 12%
increase on the prior year, including 30% growth in ILF orders
in the second half, from accelerating sales of the new
BankFusion and Transaction Banking solutions.
Revenues grew 3% to 167.5m, including 10% growth in the
second half. The strong sales of new solutions in the second
half brought ILF revenue growth of 40% for the second half
and 19% for the full year.
Adjusted operating prot rose 15% to 35.7m as a result of
higher revenues and continued cost discipline.
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Corporate & Other
The net charge for the period was 11.9m compared with
10.8m in the prior year period, principally due to a rise in
share-based payments expenses.
Open Source
Open Source is considered an operating segment but is not
a reportable segment required to be disclosed under IFRS 8.
It is included in the Corporate & Other category in the
divisional results.
Misys Open Source Solutions (MOSS), operating in the
healthcare and carbon markets, gained momentum in sales
of its interoperability solutions for the free exchange of data,
based on a services, subscription and maintenance model.
In healthcare, MOSS Healthcare Information Exchange
platforms generated revenues during the year from some
key healthcare agencies such as Hartford Hospital and
eHealthConnecticut. Over 2.5 million patient records have
been loaded into the MOSS system in Connecticut. This early
success has helped in building a strong pipeline of other
healthcare opportunities, both inside the US, elsewhere in the
Americas region and in Europe and Australia. Other healthcare
information solutions opportunities for MOSS include portals
and community data solutions. These will enable the adoption
of Electronic Health Records and the co-ordination of care by
Accountable Care Organizations under the US governments
healthcare IT stimulus programme.
In carbon, MOSS has developed solutions for measurement
and reporting of carbon emissions by corporations,
government agencies and voluntary organisations. For a large
US utility, MOSS completed a project for identication and
processing of energy saving incentives and rebates. With The
Climate Registry MOSS went live with 8,000 facilities in North
America on the worlds largest voluntary carbon reporting
system. This project has generated interest from government
agencies in China, Costa Rica, Israel and Brazil which has
resulted in a large sales pipeline.
Global Services
Global services revenues are reported separately under each
of the principal divisions.
In addition to activity related to the implementation of software
solutions (professional services, consulting, education and
training), we have extended the services and support offered
to customers through initiatives such as premium support.
Services orders grew 11% and revenues grew 10%. This was
due partly to the progress in implementation and go-live of
some large systems sold over this year and the previous year,
particularly some of the large Loan IQ installations sold by
TCM. These implementations include a growing proportion
of recently-developed new solutions which are beginning to
yield larger-scale installations than the old solutions which
they replace.
The growth in services was also in part due to the adoption by
customers of additional services such as premium support.
Prot and Loss
Operating prot is presented in this section on an as reported
basis, which includes amortisation of acquired intangibles,
gains (losses) on embedded derivatives, exchange difference
transferred from reserves (2009/10 only) and exceptional items.
These items are excluded from adjusted operating prot.
Operating results
Continuing operations, m 2010/11 2009/10
%
growth
Revenue 370 342 8%
Adjustments (intangibles amortisation,
embedded derivatives, exchange
differences transferred from reserves) (15) (2)
Operating Prot before exceptional items 57 62 (8%)
Exceptional items (21) (8)
Operating Prot 36 54 (32%)
Net Finance (charge) (4) (9)
Prot before taxation 32 45
Taxation 2 (20)
Prot after taxation 34 25
Earnings Per Share
Weighted Average Number of shares in
issue (millions) 443.5 529.4
Basic Earnings Per Share 7.7p 4.6p
Adjusted Basic Earnings Per Share 11.0p 7.6p 45%
Revenue rose by 8% due to revenue growth in the Banking
and TCM divisions and additionally the rst post-acquisition
revenue contribution from Misys Sophis. Currency movements
had in aggregate no material impact.
Operating prot before exceptional items fell by 8%. The principal
positive impacts were adjusted operating prot growth from the
Banking and TCM divisions and the rst post-acquisition
contribution from Misys Sophis. These were more than offset by
exchange rate losses on embedded derivatives and by post-
acquisition amortisation of acquired Sophis intangible assets.
Exceptional charges from continuing operations, before interest
and tax, of 21.0m arose from advisory fees in relation to the
Sophis acquisition, Misys Sophis integration costs and costs
associated with the Misys turnaround and restructuring
programme. Last years exceptional charge of 8.4m was due
principally to advisory fees in relation to the Allscripts disposal
and to property provisions established as part of the
restructuring and turnaround programme.
An exceptional prot, before tax, from discontinued operations,
of 606.2m resulted from the disposal of Allscripts shares.
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Divisional operating results
Revenue Operating prot
Continuing operations, m 2010/11 2009/10 2010/11 2009/10
Banking 167 162 30 32
Treasury & Capital Markets 185 179 37 42
Misys Sophis 17 (8)
Corporate & Other 1 1 (23) (20)
Group 370 342 36 54
TCM operating prot was impacted by exceptional costs
of 4.5m (2009/10: no charge), principally severance from
the rationalisation of product development as part of the
restructuring and turnaround programme. Banking operating
prot included a 3.8m loss on embedded derivatives
(2009/10: 1.4m gain). In Misys Sophis, the operating loss was
due to a 9.3m charge for amortisation of acquired intangibles
and a 4.6m exceptional charge, largely for onerous lease
costs on vacation of certain Misys Sophis properties. The
Corporate & Other operating loss included 10.8m of
exceptional charges for advisory fees, principally in connection
with the disposal of Allscripts and acquisition of Sophis.
Prot before taxation
The decrease in prot before taxation to 32.2m (2009/10:
45.0m) resulted from the higher exceptional charges,
acquired intangibles amortisation and embedded derivatives
charges outlined above. These were partially offset by higher
adjusted operating prots. The net nance charge was 4.1m
(2009/10: 8.7m), including exceptional nance income of
4.8m associated with the Allscripts disposal and Sophis
acquisition (2009/10: exceptional nance credit of 1.4m
associated with a VAT refund).
Taxation
There was a tax credit for the year of 2.1m (2009/10: 20.5m
charge). This includes an exceptional tax credit of 9.4m
arising from a release of tax provisions following a favourable
settlement of corporation tax liabilities for 2005/06 and earlier
periods. In 2009/10 there was an exceptional charge of 10.8m
relating to loss of future tax benets in connection with the
disposal of Allscripts.
The underlying effective tax rate of 23%, based on adjusted
prot before taxation, was 2% lower than for the previous year,
due principally to an increase in recognised tax losses in the
US, UK and Ireland and the impact of the lower tax rate in
Misys Sophis. In addition, following the favourable settlement
mentioned above, the Group now has unrecognised tax
benets of 87.0m.
Divestment of Allscripts
During the year Misys completed the disposal of its majority
shareholding in Allscripts. The disposal took place through
share sales in August 2010, November 2010 and February 2011.
Total disposal proceeds were 988.5m after underwriting fees.
The disposal gave rise to an exceptional prot of 606.2m after
advisory fees and other costs associated with the transaction.
Allscripts results in the period prior to the majority disposal are
reported as discontinued operations. Revenues were 101.7m
and operating prot before exceptionals was 12.5m.
Return of Capital to Misys shareholders
Misys shareholders benetted from the return of 670m of
proceeds from the Allscripts disposal. The return was in
two stages. In December 2010, 525m was returned by way
of a purchase of shares from shareholders through a Tender
Offer. In March and April 2011, a further 145m was returned
in the form of a payment of 38p per share to all remaining
shareholders together with a 7 for 8 share consolidation.
At 31 May 2011 the issued share count (excluding Treasury
shares) stood at 338.8m.
The Misys Employee Share Trust received a return of capital
income of 6.2m which was netted off in reserves against the
return of capital expenses. Its shareholding was reduced by
2.0m in the share consolidation and at 31 May 2011 stood
at 14.0m. Excluding the Misys Employee Share Trust and
Employee Share Ownership Plan, the share count at 31 May
2011 was 324.7m and the weighted average issued share
count for the year was 443.5m (2009/10: 529.4m).
Earnings Per Share (EPS)
In the opinion of the Directors, adjusted basic EPS from
continuing operations (excluding exceptional items, embedded
derivatives gains or losses, and amortisation of acquired
intangible assets) provides the most comparable and
representative information on continuing trading activities of the
Group. Adjusted basic EPS from continuing operations was
11.0p (2009/10: 7.6p), based on the weighted average shares
in issue for the respective periods.
Pro-forma for the share count reduction from the return of
capital, adjusted basic EPS was 15.1p (2009/10: 12.4p),
showing 22% growth. We are pleased with this result, which
was due to higher adjusted operating prots in the Banking
and TCM divisions, the rst post-acquisition contribution from
Sophis, and the reduced effective tax rate.

Balance Sheet and Cash Flow
Capital expenditure, research & development
Research and development expenditure in continuing
operations including capitalised expenditure was 69.3m
(2009/10: 64.4m). Over the last ve years an increasing
proportion of this expenditure has been devoted to developing
new products as opposed to maintaining existing products.
During the year, as spending on old solutions was reduced,
there was a signicant increase in development of key new
solutions, principally BankFusion and Asian localisation
features in Opics Plus, resulting in 21.4m of capitalised
software development (2009/10: 18.3m).
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!nancal revev
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2010/11 2009/10
m Banking
Misys
Sophis TCM
Open
Source Total Banking TCM
Open
Source Total
Research & development
expenditure (including capitalised
expenditure) 37 2 30 1 69 34 29 1 64
Capitalisation of developed software 13 1 7 21 12 6 18
Amortisation of developed software (5) (4) (9) (5) (4) (9)
Net Capitalisation 8 1 3 12 7 2 9
Total capital expenditure and investment was 27.0m
(2009/10: 22.8m), the balance after software development
being 5.8m (2009/10: 4.4m), principally investments in
computer and systems infrastructure.
Acquisition of Sophis and Financing
The acquisition of Sophis was completed on 28 February
2011, for an enterprise value of 380.9m (at 1:1.171). The
enterprise value included net debt of 145.4m and a payment
of 2.6m to Sophis shareholders based on Sophis
performance for the year ended 31 December 2010.
New credit facilities of 280m were agreed in November 2010,
partly to nance the Sophis acquisition and partly for ongoing
development of the business. The facilities comprise a 90m
term loan and a 190m revolving credit facility, both expiring in
August 2014. The new facilities replaced the previous 210m
facility, which was due to expire in May 2012, and incorporate
improved terms and lower margins over LIBOR, which will vary
according to the Groups net debt to EBITDA ratio.
In November 2010, Misys issued 100m of senior unsecured
convertible bonds due in November 2015 and convertible into
Misys shares at an initial conversion price of 3.69. As a result
of the share consolidation in February the conversion price was
adjusted to 3.75.
The overall level of debt taken on to fund the acquisition is
considered prudent in view of the highly cash-generative
nature of the enlarged Misys Group, which will enable net
debt to be reduced rapidly. At the end of the year 190m
of the new credit facilities remained unused.
Derivatives
The Group hedges exposures to foreign exchange rates and
interest rates arising on future foreign currency cash ows and
expected debt, using forward currency contracts and interest
rate swaps. In addition, certain recurring licence fees priced in
currencies other than the functional currencies of the Misys
selling entity, or its customer, contain an embedded currency
derivative. Including both types of derivative, the total market
value of derivatives assets at 31 May 2011 was 3.0m
(2009/10: 6.0m), and of derivatives liabilities was 3.9m
(2009/10: 2.7m).
Cash Flow and Net Debt
Trade receivables from continuing operations increased to
69.4m at the end of the year from 65.7m at the start of the
nancial year. The increase was a result of the consolidation
of Misys Sophis trade receivables, offset by better cash
collection improving underlying trade receivables. Accrued
income increased to 53.8m at the end of the year from
36.6m at the start of the year, due to the consolidation
of acquired Misys Sophis accrued income balances and
also a result of strong fourth quarter revenues. Days sales
outstanding (based on trade receivables and accrued income
compared with trailing quarter revenues) was 86 days at the
end of the year compared with 89 days at the start of the year.
Cash ow from operations was positively impacted by higher
adjusted operating prot. After tax and interest, there was
a net cash inow from continuing operations of 79.5m
(2009/10: 67.1m).
Net debt at the end of the period was 94.2m, compared
with net debt at the start of the period of 96.1m (excluding
Allscripts). Net cash inow from continuing operations and
Allscripts disposal proceeds were offset by the Sophis
purchase consideration and the return of Allscripts disposal
proceeds to shareholders. Of the convertible bond liability
of 99.5m, net of issuance costs, at 31 May 2011, 83.4m is
treated as debt and 16.1m is treated as equity in respect of
the value of bondholders options to convert debt to equity.
Our strong balance sheet position provides ample exibility for
further investment in the transformation of Misys.
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Adjusted operating results
Adjusted results are stated before exceptional items, gains or
losses on embedded derivatives and amortisation of acquired
intangible assets. There are no adjustments for exchange
differences transferred from reserves upon repayment of
internal funding loans (2009/10: 2.0m in Corporate & Other),
since these are no longer required in the income statement,
except upon loss of control of a subsidiary, following a revision
to International Accounting Standard 21.
The non-exceptional items excluded from adjusted results
are losses on embedded derivatives in Banking of 3.8m
(2009/10: gain of 1.4m) and in TCM of 0.2m (2009/10: gain
of 0.1m), amortisation of acquired intangible assets in Banking
of 0.8m (2009/10: 1.0m), TCM of 0.5m (2009/10: no
charge) and in Misys Sophis of 9.3m (2009/10: no charge).
Constant currency results
The most signicant currency impacts were from the
movement in the US dollar and the Euro against Sterling,
where average exchange rates during 2010/11 were US$1.58
and 1.17 compared to US$1.59 and 1.13 in 2009/10.
Prior year results are retranslated at 2010/11 exchange rates
for comparative purposes. Retranslation of prior year revenues
results in an increase of 0.4m (Banking 0.4m, TCM 0.1m
and a decrease in Corporate & Other of 0.1m). Retranslation
of prior year adjusted operating prots results in a decrease of
1.7m (Banking: 1.4m, TCM: 0.1m, Corporate: 0.2m).
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Mike Lawrie
John King
Philip Rowley Timothy Tuff Stephen Wilson
John Ormerod Jeff Ubben
Sir James Crosby
board of Lrectors
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Philip Rowley
123
Non-executive Director (58)
Appointed a non-executive Director in November 2008. Philip
Rowley was Chairman and CEO of AOL Europe until February
2007. He is a qualied chartered accountant and was Group
Finance Director of Kingsher plc from 1998 to 2000. During
2000 and 2001 he was Deputy Chief Executive and Chief
Financial Ofcer of Kingshers General Merchandise Division.
His previous roles included Executive Vice President and Chief
Financial Ofcer of EMI Music Worldwide and Chief Operating
Ofcer and CFO of Golden Books Family Entertainment, the
largest childrens book publisher in the US. He is non-executive
Chairman of HMV Group plc and a non-executive Director of
ARM Holdings Plc and Promethean World plc. He is also
Chairman of Livestation Limited and Pouncer Media Limited.
Timothy Tuff
123
Appointed a non-executive Director in February 2011. Timothy
Tuff was the Chairman, President and Chief Executive Ofcer
of John H. Harland Company from 1998 to 2007. Harland
was a leading supplier of printed and software products to the
nancial industry and, through its subsidiary Scantron, to the
educational industry. Timothy joined Harland after ve years as
President and CEO of Boral Industries, where he managed the
North American and European operations of Australia-based
Boral, Ltd., a world leader in building and construction materials.
He also serves as a Venture Partner for Ampersand Capital
Partners, is a Director of Printpack Inc., and of KnowledgeWorks
Foundation and serves on the Board of Councilors for the
Carter Center.
Stephen Wilson
5
Executive Director (51)
Stephen was appointed to the Board as an executive Director
in October 2010 following his appointment as Chief Financial
Ofcer in June 2010. He joined Misys in May 2009 as Vice
President, Group Finance, responsible for Investor Relations,
Corporate Development, Tax, Treasury and Internal Audit.
Prior to joining Misys Stephen worked at IBM for 25 years
where he developed his nancial career most recently as
Vice President and Chief Financial Ofcer for IBM UK and
Ireland. Stephen is a Fellow of the Chartered Institute of
Management Accountants.
Mike Lawrie
4
Chief Executive (58)
Mike joined the Board in November 2006. Mike was previously
a General Partner with ValueAct Capital. From 2004 to 2005
he was Chief Executive Ofcer of Siebel Systems Inc., the
international software and solutions company. Prior to that,
Mike spent 27 years with IBM where he rose to become
Senior Vice President and Group Executive with responsibility
for sales and distribution of all IBM products and services
worldwide. Previously at IBM he had been the General
Manager for all operations in Europe, the Middle East and
Africa. He previously served on the US Advisory Board of
NTT DoCoMo and as a Director of SSA Global, Inc., Symbol
Technology, Inc., and Good Technology, Inc. Mike is the lead
independent non-executive Director of Juniper Networks, Inc.,
and is also a Trustee of Drexel University, Philadelphia.
Sir James Crosby
234
Chairman (55)
James joined the Board as a non-executive Director in
January 2009 and held that role until September 2009
when he was appointed Chairman. Thirty years in fund
management, insurance and banking culminated in his time
as Chief Executive of Halifax and HBOS (1999 to 2006).
He is the Senior Independent Director of Compass Group
plc and a Trustee and Treasurer of Cancer Research UK.
John King
123
Appointed a non-executive Director in November 2005. John
is Chairman of the remuneration committee. He has over 30
years experience of the US healthcare industry as President
and CEO of Legacy Health Systems until 1999. Prior to Legacy,
John was President and CEO of Evangelical Health Systems
(now Advocate Health Systems). He is a member of the
American Hospital Association and a Fellow in the American
College of Healthcare Executives. John serves on the Boards
of the Center for Healthcare Governance, Pacic University
and AHA Services, Inc.
John Ormerod
123
Senior Independent Director (62)
Appointed a non-executive Director in October 2005 and Senior
Independent Director in November 2005. John Ormerod is
Chairman of the audit committee. He is a chartered accountant
and has over 30 years experience in professional practice. He
is a non-executive Director of Gemalto NV, Computacenter plc,
ITV plc and Chairman of Tribal Group plc. John is also a Trustee
of the Design Museum.
Jeff Ubben
4
Appointed a non-executive Director in January 2007.
Jeff Ubben is a co-founder, Chief Executive Ofcer and
the Chief Investment Ofcer of ValueAct Capital, a San
Francisco based investment partnership. Prior to that, he
was a Managing Partner at BLUM Capital Partners, a private
investment partnership and previously spent eight years at
Fidelity Management and Research, where he managed the
Fidelity Value Fund. Jeff is a Director of Sara Lee Corp., and
Gartner Group, Inc., and previously served on the Boards of
Per-Se Technologies, Inc., and of Catalina Marketing Corp. He
is a former Chairman and Director of Martha Stewart Living
Omnimedia, Inc., and has served on the boards of a number
of other public and private companies.
Notes
1 Member of the audit committee
2 Member of the nomination committee
3 Member of the remuneration committee
4 Member of the executive committee
5 Member of the treasury and nance committee
Membership of Committees and ages are
as at 28 July 2011.
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Cororate governance reort
Lrectors' reort
The past year has been one of signicant change for the
business during which we have built on our governance
process review completed last year. We have also considered
our Board composition and made two appointments to the
Board to ensure it is aligned to meeting the changing
requirements of the business.
One new executive Director and one new independent
non-executive Director joined the Board. The appointment
of Stephen Wilson has brought a stronger executive
representation to the Board and we have also strengthened the
industry and geographical representation with the appointment
of Timothy Tuff. Their biographies are set out on page 49 and
give more details on their respective backgrounds. We will
continue to monitor Board composition, balance and overall
diversity during the coming year.
Effective governance is vital to our business and our values.
Our approach is to ensure that the governance structure
enhances the business and supports it in achieving its strategic
goals. We keep our governance framework under regular
review and have made certain updates during the year to
ensure that it remains relevant to both the external and internal
governance environment.
As a Board, we keep our objectives under constant review
and part of this process is to consider our responsibilities
and delivery against our objectives. For the rst time this year,
we appointed an external advisor, Dr Tracy Long of Boardroom
Review, to assess how the Board and its Committees are
performing and to highlight any areas where we could improve.
The review afrmed our belief that the Board was operating
effectively and was responsive to the needs of the business.
Where improvements have been suggested we are taking
steps to implement them. The Board style continues to be
one of openness and constructive debate between Directors
and this was reected in the ndings of the review. This review
also gave us an external assessment of individual Directors,
including myself as Chairman.
We have considered the recommendations as set out in The
UK Corporate Governance Code. We plan to comply with all
new aspects of the code and in particular will be putting all
our Directors up for re-election at the AGM.
I hope the following governance report will give you a fuller and
deeper understanding of how we are governing our Company
and engaging with our shareholders.
James Crosby
Chairman
28 July 2011
Sir James Crosby
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Who is on our Board?
Our Board is led by James Crosby who is also Chairman of
the nomination committee. Mike Lawrie is our CEO. Our Senior
Independent Director is John Ormerod who is also Chairman
of the audit committee and John King is Chairman of our
remuneration committee. Other Board members are Stephen
Wilson, Philip Rowley, Timothy Tuff and Jeff Ubben. Full details
on all our Directors can be found on page 49.
We appointed Stephen Wilson, our CFO, to the Board on
1 October 2010 as an executive Director. Stephen brings
with him a wealth of experience in the software sector and
is a valuable addition to the overall balance of the Board.
Timothy Tuff was appointed as an independent non-executive
Director on 23 February 2011. He was subsequently appointed
as a member to each of the audit, remuneration and
nomination committees. His strong background in nancial
services software and international business complements
the existing skill set of the rest of the Board members. Our
Directors bring UK and international experience of the software
and nancial services industries as well as the specialist skills
needed to lead and participate in key Board committees such
as audit and remuneration.
Currently our articles provide that Directors may be appointed
by ordinary resolution of the shareholders or by resolution
of the Board. At each AGM, any Director who has been
appointed by the Board since the previous AGM, or for whom
it is the third AGM following the AGM at which they were last
elected or re-elected, shall retire and offer himself for election
or re-election.
However, in line with The UK Corporate Governance Code,
we have decided that all Directors will stand for election or
re-election at the 2011 AGM.
Our non-executive Directors full a vital role in corporate
accountability by bringing their independent judgement to bear
on issues brought before the Board and its Committees. Their
knowledge and experience gained in other areas of international
business and public life contributes greatly to the understanding
and decision making process of the Board. Over half our Board
is made up of non-executive Directors with exactly half of the
Board being independent (not including the Chairman who was
considered independent at the time of his appointment). During
the year, there were no signicant changes to the Chairmans
commitments and none which could affect his ability to devote
sufcient time to the Companys affairs.
We do not consider Jeff Ubben to be independent under
Provision A.3.1 of the Combined Code as a result of his
interest in ValueAct Capital, a major shareholder in the
Company. Mike Lawrie is a non-executive Director of
Juniper Networks, Inc., and a Trustee of Drexel University
and does not hold any non-executive Directorships with
any FTSE 100 company.
Chairman
Executive Directors
Non-independent
non-executive Directors
Independent
non-executive Directors
James Crosby 2 year tenure
John Ormerod 5 year tenure
John King 5 year tenure
Philip Rowley 2 year tenure
Timothy Tuff 3 month tenure
Jeff Ubben 4 year tenure
Mike Lawrie 4 year tenure
Stephen Wilson 8 month tenure
How is our Board
structured?
What is the tenure
of the Board?
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Attendance of Directors at meetings of the Board and its Committees.
Director 2010 AGM Main Board
Audit
Committee
Remuneration
Committee
Nomination
Committee
Sch Ad Hoc Sch Ad Hoc Sch Ad Hoc Sch
Sir James Crosby 1 (1) 8 (8) 9 (9) 7 (7) 4 (4) 1 (1)
M Lawrie 1 (1) 8 (8) 9 (9)
S Wilson (app 1 Oct 2010) 5 (5) 4 (4)
J G King 1 (1) 8 (8) 8 (9) 7 (7) 1 (1) 7 (7) 4 (4) 1 (1)
J Ormerod 1 (1) 8 (8) 9 (9) 7 (7) 1 (1) 7 (7) 4 (4) 1 (1)
P Rowley 1 (1) 8 (8) 9 (9) 7 (7) 1 (1) 7 (7) 4 (4) 1 (1)
T Tuff (app 23 Feb 2011) 2 (2) 1 (1) 2 (2) 2 (2)
J Ubben 1 (1) 8 (8) 9 (9)
Lrectors' reort conLnued
Typically the Board meets around 8 times a year and the
Committees up to 5 times a year. However, this year, due to
increased corporate activity, the Board met 17 times. The
Board aims to hold two of its meetings at Misys overseas
operations. This year, the Board held meetings in New York
and an in-depth two day strategy session in Bangalore.
Bangalore is our fastest growing site housing much of our
development operations as well as customer support, services
and nance teams and has over 1,200 employees. Whilst in
Bangalore, the Board had the opportunity to meet many of the
local leaders, see the local teams in action and review plans to
further develop an increasingly important centre for Misyss
various businesses.
What has the Board done during the year?
Our employees
Delivery on
our strategy
Leadership
Effectiveness
Our customers
Consulted openly and collaboratively during
the disposal of Allscripts
Returned 670m to our shareholders
Active consultation on recalibration of existing
incentive arrangements to reect major
corporate activity
Appointed two Board members using an external
search agency for the non-executive Director
Undertook a detailed review of succession
planning and talent across the organisation
Addressed the total reward framework throughout
the organisation
Reviewed and consulted with shareholders on a
new long-term incentive arrangement for the CEO
Introducted a new engagement survey to
enable staff to feedback how they really
feel achieving a 74% response rate
Launched the Misys Club, a framework
for employee giving and volunteering
Refreshed and enhanced our product
portfolio delivering new products to market
in each division
Listened to customer feedback and
improved on our Satmetrix score for the 4th
year in a row
Made signicant strides with our new suite of
banking products in particular BankFusion
Continued investment in our quality
programmes
Engaged an external consultant to facilitate
the effectiveness review of the Board and
performance review of Directors
Delivered a full induction process for
new Directors
Continued to enhance our risk management
processes with new, more focused, reports
to the Board
On target to deliver on internal
business plans
Disposal of Allscripts and creation of
a pure play nancial services business
Acquisition of Sophis resulting in a
leading position within the capital
markets industry
Banking returned to growth through
sales of new solutions
Commitment to
our shareholders
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Misys plc Board
Remuneration Committee
Executive Committee
Treasury and Finance
Committee
Management Processes
Nomination Committee Audit Committee
The Boards role is to provide leadership, set the strategic
direction of the business and continuously monitor
performance against strategic objectives through oversight and
the effective monitoring of risk. Critical to this role is the Boards
oversight of succession planning, particularly for the CEO and
other senior executives, and the management of risk. Both
have been an area of focus for the Boards attention in 2011.
The Directors may exercise all the powers of the Company
subject to the provisions of relevant law, the Companys
Articles and any special resolution of the Company in the
furtherance of their role.
How do we approach Governance?
We believe that strong governance processes and oversight
sit at the heart of our culture, not only in the Boardroom but
across the whole of the business, enabling it to better deliver on
its responsibilities to all of our partners and other stakeholders.
Our Code of Conduct sets out how we expect our Board,
employees, partners, suppliers and others to live by our
values and demonstrate strong ethical behaviour.
We are also committed to operating in an environmentally
sustainable way and to promoting community involvement.
This year we launched the Misys Club, an initiative to support
employee giving and volunteering, and further details can
be found in the Social and Environmental section of the
business review.
Our policy is not to make political donations and we have not
done so in this period (2010: nil).
The Chairman is responsible for the effective operation of the
Board and for inuencing the culture around the Board table
and between Directors. The Misys Board has an open style
of communication, one which encourages an environment
of constructive debate and healthy challenge between Board
members, both inside and outside the Boardroom. Regular
updates between meetings ensure that Directors are always
able to contribute to and have oversight of a fast moving
executive agenda.
How did we comply with the Combined Code?
Compliance with the Combined Code (which applies to
Misys for the year ended 31 May 2011) is an important step in
achieving good and transparent corporate governance. To that
end we have complied with the principles and provisions of the
2008 Combined Code during this year. In previous years we had
highlighted that we only had one executive Director on the Board
but the Directors considered the balance of the Board was
compliant with the code due to the independent strengths of the
non-executive DIrectors. The appointment of Stephen Wilson
as an executive Director has further strengthened the Board.
How do we manage conicts?
In order to make strong, good quality decisions, it is important
that no-one involved in the decision making process is conicted
in such a way that could impair their decision making. However,
we recognise that from time to time conicts may arise and
accordingly we have a formal system in place for the Directors to
declare any situational conict they may have. Such conicts may
be authorised by the other Directors that are not interested in the
matter and they may impose limits or conditions when giving the
authorisation, or subsequently, as they see t. We maintain a
register of conicts and keep this under review on an annual
basis. In particular, the Board is mindful of the position of Jeff
Ubben who is also an executive with ValueAct Capital, our largest
shareholder. The process for managing and monitoring conicts
continues to operate effectively.
How is our governance framework structured?
Our governance framework provides the formal governance
structure within which the Board and its Committees operate.
The framework details the terms of reference for each of the
Committees and sets out the matters that are specically
reserved to the Board. It also clearly denes the roles of the
Chairman, the Chief Executive and the Senior Independent
Director. The Board process itself, including the timely and
relevant provision of information, conduct at meetings
and the reporting of the each of the Committees up to the
Board is also covered. We deliver our Board papers through
an electronic portal that enables Directors to access Board
papers wherever they may be in the world.
Arrangements for the induction of Directors, ongoing
development and monitoring our effectiveness are clearly
dened in the framework.
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This year we have further enhanced our governance framework
taking into consideration the FRC Report on the Effectiveness
of Boards and the ICSA best practice guidance notes on
Committee Terms of Reference.
We introduced a role description for the Senior Independent
Director and updated and improved our Committee terms of
reference where we felt it would improve the effectiveness,
performance and oversight of the relevant Committee.
We also believe that in order for a Director to contribute at their
most effective, an extensive and tailored induction should be
provided to all new Directors. Furthermore, following the initial
induction, ongoing development for all Directors is important.
Our Committee composition is such that we have common
membership across our Committees, thereby ensuring that
there are no gaps in the remit or the matters considered by
each Committee nor unnecessary duplication.
Each of the Committees has detailed terms of reference and
reports to the Board on its activities at each Board meeting.
Effectiveness
How do we ensure effectiveness?
Our open and collaborative culture is supported by well
organised internal processes which support the Board in
maximising their decision making process. The Board and its
Committees operate forward looking rolling agendas which
are aligned to both the strategic aims of the Group and the
Groups risk processes. Meetings and discussions outside
the Boardroom are also facilitated as part of this process,
particularly during the overseas site visits where the Board
takes full advantage of a forum that provides for detailed
discussion, consultation and debate.
Induction process
We have appointed new Directors during the year and provided
each with a comprehensive personalised induction. Stephen
Wilson had been the Vice President Group Finance and CFO
prior to his Board appointment and during that tenure had
developed a good understanding of the business. Upon his
appointment as a Director, he was provided with a detailed
review of his additional responsibilities and the obligations
placed upon him as a Director. Timothy Tuff was new to the
business and his induction was more comprehensive and
included a detailed overview of the Company including its
Governance practices, constitutional make-up and culture. He
also met with key personnel across the business to help build
his understanding of the business, its strategy, our shareholder
expectations and the strategic priorities in each area. He has
visited various sites including Bangalore, London and New
York. He also met with one of our strategic partners, HCL,
and nally with our external advisors.
The governance structure is designed to deliver an effective
two way ow of information from the business up to the Board
and from the Board back to the business. The CEO reports
directly to the Board and provides a regular update to the
Directors on business performance and opportunities. He is
supported in the management of the business and on the
delivery of strategy by a management team made up of the
senior business leaders and the CFO. The CEO meets with the
management team on a bi-weekly basis to review and discuss
operational performance and other matters. The management
team, and other senior managers as appropriate, are provided
with opportunities to report directly to the Board on their
progress. Through the CEO updates, the Board monitors what
management is doing within the framework of delivering on the
strategy and probes their thinking to ensure they are on the
right path.
On an ongoing basis the non-executive Directors are provided
with targeted development sessions which are built into the
rolling agenda. These sessions are developed to address the
needs of the Directors as they arise or in response to particular
requests. During the year we covered updates in respect of
the UK Corporate Governance Code, recent and prospective
changes to accounting practices, the impact of the Bribery Act
and aspects of crisis management.
How do we measure our effectiveness?
Despite all of the above, it is important that we monitor how
we are performing. During January 2011 Dr Tracy Long of
Boardroom Review carried out a full assessment of the
effectiveness of the Board and its Committees, the
performance of each individual Director and in particular the
Chairman. Boardroom Review has substantial experience of
such reviews in the UK so were able to test the Boards
effectiveness in a comparative context.
During her review Dr Long highlighted the strengths of the
Board as including a exible approach to strategic shifts and
challenges, a continually improving risk management and control
environment, an open relationship between Board members and
the CEO and nally, strong Board dynamics. This endorsed the
feeling that already existed among the individual Board members.
Critically, she also identied ways in which the Board could
improve its effectiveness. For example, it was felt that the Board
collectively should discuss updates on the competitive context in
each of our businesses more frequently. Whilst this had always
been considered as part of our strategy away day, more regular
updates will now be provided. Whilst the non-executive Directors
receive opportunities to meet with our advisors and key
management on a regular basis, it was recommended that they
could benet from more regular invitations to attend relevant
industry conferences and customer advisory groups.
Summary of responsibilities of our Board and Committees
Board
Responsible for setting the strategic direction of the Company and monitoring performance against the strategic plan in a manner that is
most likely to promote the long-term success of the business.
Audit Committee Remuneration Committee Nomination Committee
Supports the Board in reviewing the
integrity of the nancial statements
and the effectiveness of the system
of internal control.
Keeps under review the relationship and
performance of the external auditors.
Determines the framework and broad
remuneration strategy and policy for
executive Directors and other senior
employees. In doing so keeps under
review the alignment of our remuneration
strategy to the wider environment.
Reviews the composition of the Board
and makes recommendations for Board
appointments.
Monitors ongoing succession planning for
Directors and senior executives.
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Highlights of what our Committees have achieved during the year?
Audit Committee Remuneration Committee Nomination Committee
Reviewed and received reports from
the auditors on the annual nancial
statements and other published
nancial information.
Monitored the work of internal audit.
Reviewed the Groups approach to risk
and oversaw improvements in the
Enterprise Risk Management System
and linkages to the Boards risk
appetite.
Oversaw the audit and disclosure
process during the disposal of
Allscripts and the subsequent return
of capital to shareholders.
Reviewed foreign currency hedging
and accounting policies.
Maintained nancial oversight during
the acquisition of Sophis.
Closely monitored the external
auditors independence and non-audit
fees during the year.
Engaged with investors on the impact of
the disposal of Allscripts on the Companys
share plans.
Agreed retention incentive arrangements
with the CEO having consulted with our
largest shareholders.
Oversaw the re-alignment of our share plan
targets for the Omnibus Share Scheme
arising due to the capital return and
acquisition of Sophis.
Engaged an external search agency on the
non-executive Director search resulting in
the appointment of Timothy Tuff.
Reviewed the succession planning of the
Companys leadership team.
Kept under review the composition of the
Board.
Accountability Board Committees
Audit Committee
Our audit committee is chaired by John Ormerod and
both he and Philip Rowley have recent and relevant nancial
experience. Following his appointment to the Board, Timothy
Tuff was appointed to the Committee on 23 March 2011. John
King is also a member of the Committee. An environment of
open communication and dialogue is vital to the Committees
effectiveness and as such the CFO, the Group Financial
Controller, the Head of Internal Audit and the external auditors
have a standing invitation to attend meetings.
To ensure integrity is maintained and to allow individuals to
highlight any specic matters to the members of the audit
committee, they met in private with the CFO three times,
the Head of Internal Audit twice and the external auditors,
PwC, twice during the year. There is also an open line of
communication between the Committee Chairman and all
senior management as and when required. The Committee
receives detailed reports from the external auditor and from
the Head of Internal Audit regularly.
The audit committee has detailed terms of reference which
facilitate its oversight of the nancial reporting process, the
Groups risk management processes, the external auditor, the
Groups system of internal control, the internal audit function,
changes in nancial reporting requirements and matters arising
from the annual audit. In addition to the Committee highlights
set out above, the Committee met its obligations under its
terms of reference during the year.
We operate an independent condential raising concerns line.
All matters reported via the line are considered by a committee
comprised of the EVP General Counsel, the EVP Group HR
Director, the Head of Internal Audit and the Deputy Company
Secretary. Matters are investigated and where necessary
escalated to the audit committee. The Committee reviews
annually the number of matters reported and the outcome
of any investigations.
The External Auditor
The effectiveness and independence of the external auditor
is vital to ensuring that the Committee has condence in the
Groups published nancial information as well as providing
insight on risks and controls. We judge the external auditor not
only on their understanding of the Companys business and
the quality of the relationship across Misys but on the quality of
their audit ndings, the degree of challenge and managements
response and, nally, their independence. As part of this
process, the Committee seeks feedback from management,
the business areas the external auditor has visited and reviews
reports of the Audit Inspection Unit.
Before the commencement of each audit the Committee
discusses and approves the audit plan. PwC explain the
programme of work they plan to undertake to address the
risks they have identied to ensure that these risks do not lead
to a material mis-statement in the nancial statements. The
Committee receives updates on the audit as it progresses
and discusses any risks identied during the audit.
The Committee monitors closely the auditors independence.
We have reviewed in the year the policy which limits the scope
of non-audit assignments for which the auditors may be
engaged and the policy for recruitment of staff from the audit
rm. This policy prohibits using the auditors for example to
implement nancial reporting systems or undertake asset
valuations. Where the auditors are considered for non-audit
assignments, in the absence of overriding reasons to use our
audit rm, competitive proposals are obtained. The Committee
closely monitors the amount the Company spends with PwC
on non-audit fees. We have a detailed policy in place that
requires that any permitted non-audit work must have the
scope of work and fees approved in advance by the CFO
and the Committee Secretary if less than 50,000 and, if over
this amount, pre-approval must be sought from the Committee
itself. Rotation of the audit partner and the audit team is also
important and a new lead audit partner was appointed during
2009 and a new audit senior manager in 2010 thus providing a
fresh approach to the audit and to the level of challenge.
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Having completed the review of the external auditor we are
satised that they have carried out their obligations in an effective
and appropriate manner and continue to remain independent.
On that basis we will be recommending their re-appointment at
the 2011 AGM. We are conscious that PwC have been auditors
to the Company for 12 years and whilst we are content with their
performance and the degree of rigour they bring to the audit
process the Committee feels it would be appropriate to conduct
a market appraisal during the course of the next year.
The internal audit function has continued to develop during the
year. The detailed audit plan is developed as part of the risk
management process that is overseen by the Head of Internal
Audit and which the Board approves. The programme of audits
provide objective assurance over the processes and controls.
Actions are agreed in response to recommendations made
and these are followed up by the internal audit function to
ensure that the required actions are implemented.
Nomination Committee
Our nomination committee is chaired by James Crosby and
all other independent Directors are members.
The Committee leads deliberations around Board succession
and the procedure for the appointment of Directors to the
Board. Timothy Tuff was appointed to the Board following a
comprehensive search conducted by an independent external
search agency and a rigorous interview process. The agency
was provided with a detailed brief that included consideration
of the existing Directors mix of skills and the overall diversity of
the Board. We have also increased the executive representation
with the appointment of Stephen Wilson, our CFO, to the Board.
We review our Board succession on a continual basis and will
continue to make recommendations to the Board as and when
appropriate.
Remuneration Committee
The remuneration committee is chaired by John King. Details
of the how the Committee operates, its membership, and our
remuneration policies are set out in the remuneration report on
pages 63 to 65.
The Executive Committee
Our executive committee is made up of three or more Directors
including the CEO and the Chairman. Mike Lawrie is the
Committee Chairman. The aim of the Committee is to facilitate
the CEO in making decisions on how best to progress the
strategy or objectives set by the Board of Directors between
meetings of the Board. It focuses in particular, but not
exclusively, on business development opportunities which
enhance value for shareholders. However, it has no authority
to change strategy or objectives set by the Board.
Treasury and Finance Committee
Our treasury and nance committee is chaired by the CFO
and is a management Committee that reports directly into the
Board. This Committee maintains oversight of the treasury
policy and operations, monitors pension plan funding and,
reviews and approves the insurance arrangements for the
Group with the exception of the Directors and Ofcers
Insurance which is approved by the Board.
Risk Management
How do we monitor our risks?
The Board is ultimately accountable for ensuring that we have
a robust approach to risk management and have appropriate
internal controls in place. The Board is also responsible for
monitoring the effectiveness of the agreed approach.
Taking risks is an inherent part of entrepreneurial activity and
the assessment of risk is part of our culture. Specically, we
give careful consideration to the key risks in our business and
how we can best mitigate those risks to meet our business
objectives.
Over the last year we have continued to improve risk
management throughout the Group embedding a process
which aligns strategy and risk management, actively considers
high impact but low likelihood risks and maintains the Board
focus on the key risks facing the Group.
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Risk Management Process
The risk management process includes a review by the Board
of the Groups risk prole on a semi-annual basis, facilitated
by internal audit. The effectiveness of the risk management
process is monitored by the audit committee. The process
involves identifying, prioritising and allocating ownership for risks
and developing and implementing appropriate mitigation plans
to address those risks. Each key risk identied through the
process is owned by a member of the executive team.
We review our risks in terms of potential likelihood and
impact. Our analysis also includes both gross and net
risk assessments so that we can identify the extent to which
management has addressed the key risks through appropriate
controls and mitigation activity. The Group Internal Audit Plan
is based on the results of the risk management process and
therefore tests the effectiveness of the most important controls
of the Group.
Risk management at Misys is dynamic and ongoing. For
example, a key risk included in last years annual report
related to the disposal of our US healthcare business,
Allscripts. This disposal was successfully managed in the
rst half of this nancial year and, therefore, the risk has been
removed from the analysis. Meanwhile, a new risk related to
the effective integration of our recent Sophis acquisition has
been added to the analysis.
A summary of the risks that we currently see as important to
our business, together with associated key mitigation activities,
is shown overleaf. This summary also shows the alignment
of the risks with the key strategic imperatives of the Group.
Risk
assessment,
prioritise risk
and ownership
Risk
identification
Existing controls,
new mitigation and
action plans
Execute
action
plans
Reporting
and
performance
Monitoring
and assurance
Board evaluation of risk
with a particular focus
on significant risks
Management actions with Board oversight
Management actions
Misys Risk Management Process
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Develop a focused strategy and integrated portfolio for each of the business units
Business strategy, market and product development risks Mitigation
The fnano|a| serv|oes seotor |s ourrent|y subjeot
to regulatory review and concerns related to
economic factors (e.g. Eurozone sovereign
indebtedness). This could lead customers to
reduce expenditures.
The Group operates aoross the fnano|a| serv|oes seotor. lt |s geograph|oa||y
diversied with customers in 120 countries; it has a wide range of products
across the capital markets and banking sectors and it has a large installed base
with approximately 50% of revenues recurring.
The M|sys Soph|s aoqu|s|t|on oase |no|udes
revenue and cost synergy projections which
may not be captured.
We|| struotured |ntegrat|on prooesses w|th mon|tor|ng of performanoe aga|nst
detailed synergy targets and regular executive/Board reviews.
M|sys Soph|s |noent|ves a||gned and ongo|ng oross produot tra|n|ng and sa|es
collaboration.
Next generat|on M|sys so|ut|ons, |no|ud|ng
products based on our new BankFusion
technology, need to be developed in line
with product roadmaps and need to succeed
in the market.
Deve|opment funot|on oont|nu|ng to |mp|ement best praot|oe methodo|og|es and
processes.
We|| defned governanoe prooesses to ensure produot roadmaps are met.
Regu|ar d|a|ogue w|th oustomers e.g. through M|sys oustomer adv|sory boards
and product/regional user groups) to support market acceptance of products.
Build a solution orientation
Contract implementation and service level risks Mitigation
lmp|ementat|on of M|sys bus|ness or|t|oa|
solutions at customer sites requires effective
management to deliver value on time and
to budget.
Oustomer serv|oe |eve| agreements need to
be met.
Modu|ar approaoh to oustomer |mp|ementat|ons.
G|oba| so|ut|on oentres |n key markets prov|d|ng subjeot matter expert|se.
Sk|||ed |mp|ementat|on and serv|oes teams.
Oustomer support and re|ated prooesses are we|| defned and mon|tored.
Continuously innovate to capture market opportunities
Intellectual property (IP) risks Mitigation
The foous on |nnovat|on may |ead to |nfr|ngement
of our IP rights and/or the inadvertent
infringement by us of third party IP rights.
Oopyr|ght |aw and ||oens|ng of r|ghts to use M|sys app||oat|ons.
Oross-funot|ona| lP oouno|| and lP po||o|es and prooedures.
App||oat|on for S patents oover|ng oerta|n nove| aspeots of
BankFusion technology.
Patent reward programme estab||shed dur|ng the year for emp|oyees.
Awareness programmes w|th respeot to oompet|tor produots and re|ated lP.
Develop winning partnerships and collaborations
Partnerships, acquisitions and disposals risks Mitigation
Opportun|t|es to oomp|ement our ex|st|ng
product/services portfolio, build a partner
ecosystem and/or streamline operations
may not be identied and captured.
Ded|oated and exper|enoed oorporate deve|opment & partnersh|p teams.
Exeout|ve dea| oomm|ttee and Board rev|ew of s|gn|foant opportun|t|es.
We|| defned and embedded M&A and partner prooesses and too|s.
Revitalise the organisation
People risks Mitigation
Extens|on of the Oompany`s g|oba| reaoh to
emerging markets may mean that the supply
of people with the required skills is limited.
Ta|ented staff need to be deve|oped and reta|ned
in competitive markets.
Ta|ent reoru|tment and management programmes |no|ud|ng graduate
programmes in key emerging markets.
Regu|ar benohmark|ng of oompensat|on and benefts aoross key markets.
Emp|oyee engagement surveys and fo||ow up aot|on p|ans.
Retent|on programmes for ta|ented staff aoqu|red v|a the Soph|s transaot|on.
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What Internal Controls do we have in place?
Our system of internal control is designed to support the
achievement of the Groups objectives and to manage the
related risks. We recognise that the system is designed to
manage, rather than eliminate, the risk of failure to achieve
business objectives and can only provide reasonable, and
not absolute, assurance against misstatement or loss.
As mentioned elsewhere in the governance report, the Board had
a two day strategy meeting in March 2011 at which the Directors
challenged and questioned the senior management around their
strategic priorities and performance. A detailed nancial and
operational budget is produced which is reviewed and approved
by the Board in April, in advance of the new nancial year. In
November 2010 the Board completed a detailed review of the
management team and the associated succession planning.
Together, these provide the overall framework for business
planning and the resources required to deliver on the
Groups plans.
We operate a control framework which provides a comprehensive
system of delegated authorities from the Board and its
Committees to the business units of the organisation. All major
development projects, contractual and other commitments
relating to revenue and capital expenditure require appropriate
approvals. Authority levels under the framework are reviewed
periodically and are updated as necessary.
We also have a system of policies and procedures that
underpin our internal control and cover areas such as nancial
reporting and planning, capital expenditure, business
continuity, IT controls, treasury and cash management.
With specic regard to preparing consolidated accounts,
we operate rigorous controls including detailed policies and
formal processes for business units, nance functions, Group
consolidation reviews and analyses of material variances,
technical reviews and other controls. These controls are
monitored and assessed during the year by internal audit.
We have strengthened our system of internal controls by
continuing to centralise our transaction processing in Bangalore.
We have also developed our Group analysis and reporting
function and continue to review and enhance our processes
around working capital, cash management and compliance.
The new requirements such as the Bribery Act and the Senior
Accounting Ofcer Certication are also being addressed
We have introduced a suite of new policies and processes
to underpin our anti-bribery programme and strengthen our
bribery controls. We have introduced a new tax reporting tool
during the year.
The Board reviews the effectiveness of the Companys
system of internal controls. This is principally carried out
through the work of the audit committee. This Committee
reviews the effectiveness of internal controls principally
through discussions with management on signicant risks,
the review of both the internal and external audit plans
and subsequent ndings and other relevant reports. If any
signicant failings or weaknesses are identied that need to
be addressed these are highlighted to the Board who ensure
that appropriate action is taken.
Other key imperatives
IT and business continuity risks Mitigation
An adequate lT |nfrastruoture |s requ|red to
support our geographically distributed business
and to protect our information assets.
lnformat|on seour|ty po||o|es and prooedures and ongo|ng systems, seour|ty
and network infrastructure reviews across key sites.
lnterrupt|on from natura| events, po||t|oa| or
social instability needs to be effectively
managed. This is particularly important given the
location of many of our key sites in emerging
markets with, for example, key development
sites and customer support sites located in
India and the Philippines.
Bus|ness oont|nu|ty, d|saster reoovery and pandem|o response p|ans overseen
by a dedicated business continuity team.
Ons|te |no|dent management teams and re|ated po||o|es and prooedures.
Ongo|ng work to |norease the speed and test|ng of our se|f-reoovery oapab|||t|es
and to reduce our dependence on third-party providers.
Legal and regulatory risks Mitigation
Oomp||anoe w|th |aws and regu|at|ons |no|ud|ng
the UK Bribery Act needs to be maintained.
|ega| funot|on mon|tors |ega| and regu|atory requ|rements |n markets served.
M|sys Oode of Oonduot wh|oh a|| emp|oyers must aoknow|edge.
Ant| br|bery po||o|es and prooedures have reoent|y been upgraded and
implemented.
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Shareholders
How do we engage with our shareholders?
We strongly believe in regular engagement with our shareholders
and schedule a quarterly pattern of presentations and
conference calls with our investors. We also engage with them
on an ad hoc basis in order to respond to any specic questions
that they may have at any time between scheduled events.
In addition, in reporting to shareholders on the corporate
transactions that we undertook during the year, we provided
a high degree of transparency on the nancial details of the
transactions, on the underlying strategic rationales and on the
impact of these transactions upon the nancial targets and
nancial statements of the Group. During all stages of the
transactions we clearly stated our expectations for progress
towards their completion.
About the 2011 Annual General Meeting
This year the AGM will be held on 28 September 2011 at The
Lincoln Centre, Lincoln Inn Fields, London at midday. The
Notice of AGM accompanies this annual report and explains
the business to be considered at the meeting. Both this annual
report and the Notice of AGM are available on our website
www.misys.com.
Share capital
Our share capital comprises ordinary shares of 1
1
/7 pence each
which are listed on the London Stock Exchange.
The issued share capital of the Company, together with details
of the movements in the Companys issued share capital during
the year, are shown in the notes to the nancial statements.
At close of business on 28 July 2011, the Company held
362,505,513 ordinary shares in issue of which 23,225,756
were held in treasury.
We completed a tender offer on 16 December 2010 under
which we bought back and cancelled 169,354,057 ordinary
shares of one pence each. On 14 February 2011 we completed
a share capital consolidation of 7 new ordinary shares of 1
1
/7
pence in the Company for every 8 ordinary shares held on
11 February 2011. Further details on the impact of these
We actively seek the views of our major shareholders, not only
in respect of our nancial results and strategic progress, but
also in a consultative manner. Accordingly, we consulted with
our major shareholders on several occasions during the year
on specic matters arising as a result of the disposal of
Allscripts and the subsequent return of capital. We also
consulted with major shareholders during the year on directors
remuneration.
We engage with our other shareholders through the AGM,
other general meetings and our website www.misys.com.
Who are our substantial shareholders?
The voting interests in the ordinary share capital of the
Company of our substantial shareholders as have been
notied to the Company as at 28 July 2011 are shown below
changes on our share capital is given in Note 31 on page 113
of the nancial statements. Shares held in treasury were
consolidated in the same way as all other shares. During the
year, 6,415,383 shares were transferred out of treasury to meet
the Companys obligations under its employee share plans.
The rights and obligations of our shareholders are contained
in our articles. Shareholders are entitled to receive the annual
report, to attend and speak at general meetings, to appoint
proxies and exercise voting rights. No shares carry any special
control or nancial rights.
In accordance with the authority granted at a general meeting
held on 11 February 2011, the Company may make market
purchases of up to 33,563,163 of its own shares (representing
approximately 10% of its issued share capital). This authority
expires at the conclusion of the 2011 AGM and remained in
force at 31 May 2011.
Other disclosures that we are required to make
Principal activities and business review
Our principal activities are the development, management
and licensing of a variety of software products and solutions
to customers in the nancial services industry. We also partner
with other world class companies to sell and distribute Misys
products and solutions.
Holder % issued share capital No. of ordinary shares Nature of holding
ValueAct Capital Master Fund, L.P. 20.21 77,500,319 Total
VA Partners I, LLC, ValueAct Capital Management, L.P.,
ValueAct Capital Management, LLC, ValueAct Holdings, L.P., 20.21 77,500,319 Indirect
ValueAct Holdings, L.P. and ValueAct Holdings GP, LLC
1

Schroders plc 11.94 51,417,864 Direct
45,783,197 Indirect
Crdit Agricole Cheureux International Limited 5.19 17,603,724 Direct
FMR LLC and its Group 5.14 25,890,800 Indirect
Threadneedle Asset Management Ltd 5.06 27,677,470 Total
Comprising: Thereadneedle Asset Management Ltd 0.14 745,317 Direct
4.81 26,298,748 Indirect
0.12 633,405 CFDs
Standard Life Investment Ltd 4.99 19,140,585 Total
Comprising: Vidacos Nominees Limited 2.81 10,784,422 Direct
2.18 8,356,163 Indirect
Lloyds TSB Group plc on behalf of various nominees 3.02 16,492,181 Indirect
1 This notication has been reported on an aggregated basis and includes the 20.21 % holding of ValueAct Capital Master Fund, L.P. shown above.
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The Companies Act 2006 requires us to present a fair review
of the business performance and development of the Group. A
review of the activities of the Group, its nancial performance and
likely future business developments is provided in the Chairmans
statement, the Chief Executives review, the business review, the
nancial review on pages 18 to 47, all of which are incorporated
into this report by reference. A description of the principal risks
and uncertainties is included in this report.
Going concern
In adopting the going concern basis for preparing the nancial
statements, the Directors have considered the business
activities as set out on pages 26 to 35 as well as the Groups
principle risks and uncertainties as set out on pages 56 to 59.
After making due enquiries and embracing the normal
forecasting process, the Directors consider that the Group
and the Company have adequate resources and committed
borrowing facilities to continue in operation for the foreseeable
future and accordingly have continued to adopt the going
concern basis in preparing the nancial statements.
Events after the balance sheet date
On 21 June 2011 the Board announced that it had received a
preliminary approval that may or may not lead to an offer being
made for the Company
On 23 June 2011 Fidelity National Information Services, Inc.
conrmed that it had made a preliminary approach regarding
a possible cash offer for Misys plc.
Financial instruments
Information on nancial instruments is disclosed in the notes
to the nancial statements.
Dividends
The Board continues to believe that shareholder interests
are being best served by re-investing cash ow into the
development and future growth of each of the Groups
businesses. The Directors do not therefore propose to
recommend payment of a nal dividend for the year (2010: nil).
People
We are dependent on the skills and commitment of all our
employees in order to achieve our organisational goals. Further
information on our approach to employee engagement, equal
opportunities and training and development can be found in
the People section of the business review on pages 36 and 37.
Research and development
In the markets in which we operate, effective research and
development is vital to maintaining competitive advantage and
securing future business and income streams. Our approach
to research and development is detailed throughout the
business review.
Signicant agreements and change of control
There are a number of agreements that take effect, alter or
terminate upon a change of control of the Company following
a takeover bid, such as commercial contracts, bank loan
agreements, property lease arrangements and employee
share plans. With the exception of the bank loan agreements
noted above, there is no individual contractual arrangement
that is considered to be essential to the continuing operation
of the Group.
In addition, there exist agreements between the Company,
its Chief Executive, its Chief Financial Ofcer and certain other
senior employees which provide for compensation of loss of
ofce or employment due to a takeover. Further information
can be found in the remuneration report.
Signicant contracts
ValueAct Capital Master Fund L.P. (ValueAct Capital) has a
holding of approximately 20.21% in the Company on an
aggregated basis. Jeff Ubben who is a non-executive Director of
the Company, is Chief Executive Ofcer, Chief Investment Ofcer
and a principal investor in ValueAct Captial and accordingly
has an interest in all contracts between the Company and
undertakings which are part of the ValueAct Group.
During the year and up to the date of this report, no other Director
has had any interest in any material contract with the Company.
Creditor payment policy
It is our policy to agree terms and conditions with our suppliers
in advance of conducting business. We seek to abide by the
payment terms that we agree with our suppliers whenever we
are happy that the contractual obligations have been met.
The trade creditors of the Group at 31 May 2011 represent 34
days (2010: 31 days) and of the Company represent nil days
(2010: nil days) as a proportion of the total amount invoiced
by suppliers during the year. The Company had delegated its
trade to other Group subsidiaries.
Articles
The articles of the Company may be amended by a special
resolution of shareholders passed at a general meeting of
the Company.
Indemnities and insurance
We provide our Directors and ofcers with insurance cover
to cover their costs in defending themselves in civil legal
proceedings taken against them in that capacity and in respect
of damages resulting from the unsuccessful defence of any
proceedings. We have also granted qualifying third party
indemnities (for the purposes of s.234 of the Companies Act
2006) to our Directors in their capacity as Directors of the
Company and its subsidiaries. Neither the insurance nor
the indemnity provide cover where the Director has acted
fraudulently or deceitfully.
Provision of information to the auditors
Each Director that holds ofce as at the date of this report
conrms that, so far as he is aware, there is no relevant audit
information of which the Companys auditors are unaware and
that he has taken all steps which he ought to have taken as a
Director to make himself aware of any relevant audit information
and to establish that the auditors are aware of that information.
This annual report has been prepared for, and only for, the
members of the Company and no other persons. By their
nature, the statements concerning the risks and uncertainties
facing the Group in this annual report are affected by future
events and circumstances which can cause results and
developments to differ materially from those anticipated and
which are beyond our control. The forward-looking statements
reect knowledge and information available at the date of
preparation and we have no obligation to update these
forward-looking statements. Nothing in this annual report
should be construed as a prot forecast.
Tom Kilroy
Company Secretary
28 July 2011
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Lrectors' remuneraton reort
Misys has experienced signicant change in the past year with
the disposal of Allscripts and the subsequent return of capital,
followed soon thereafter by the acquisition of Sophis in early
2011. Individually, these transactions were so signicant in
relation to Misys capital base that in each case the Committee
was required to review very carefully their implications for share
based rewards. In doing so the Committee had to ensure that
achievements were fairly rewarded and that for the future,
incentive arrangements were adjusted so as to be no more
or less stretching than before.
The Committee reviewed our reward strategy to ensure that it
reects our growing needs to attract and retain talent in Asia
and other emerging markets and that it remained aligned to
a key principle: that management should be focused on
delivering value to our shareholders.
Throughout the year we actively consulted with and secured
the support of our largest shareholders; most specically
on recalibrating our EPS based incentives, re-setting dilution
limits and establishing a new bespoke incentive for our CEO.
Shareholders overwhelmingly approved specic proposals
put to them at the general meeting held in August 2010 to
approve the Allscripts sale and capital return.
Accordingly, for the years impacted by the changes to the
capital structure of the Company, the base EPS used to
calculate performance measures in the Omnibus Plan
was increased. This ensured that our Omnibus Plan EPS
performance measures continued to be stretching and
fullled a commitment made to shareholders when the
Allscripts transaction was approved.
Shareholders also approved new dilution targets under our
share plans to take account of the reduction in our issued
share capital through the Tender Offer and Share Capital
Consolidation. If we had taken no action in this regard we
would have immediately breached our existing limits and
severely impacted our ability to attract and retain talent
within the organisation.
The Board believes that Mike Lawrie continues to provide
exceptional leadership to the Company. Therefore, in
recognition of the importance of the CEO to ensuring a
continued focus on performance, we approved the CEO
Incentive Plan, a bespoke arrangement that is designed
to secure the tenure of the CEO beyond the expiry of the
Transformation Incentive Plan on 1 November 2011.
Finally we looked at ways to further improve the effectiveness
of the Committee. We reviewed and enhanced our rolling
agenda to better align it to the business and to provide the
Committee with a clear structure to its work during the year.
I hope that you will agree with our approach to the various
challenges that have faced us during the year and I am
condent that we have taken the right steps to secure and
reward the management team in a way that will allow the
business to move to the next stage of its journey. The
remuneration report has been prepared by the remuneration
committee and approved by the Board for submission to
shareholders at the 2011 AGM.
John King
Chairman, remuneration committee
28 July 2011
John King
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Who is on our Committee?
Committee Members
John King (Chairman) Independent Director
James Crosby
Independent on
appointment to the Board
John Ormerod Independent Director
Timothy Tuff (appointed to the
Committee on 23 March) Independent Director
Philip Rowley Independent Director
Deloitte LLP were retained to provide independent advice to
the Committee. Deloitte LLP and Hewitt New Bridge Street Ltd
also advised the Committee on the performance monitoring of
the Groups share plans. In addition, Pinsent Masons LLP
provided legal advice to both the Company and the Committee
on share plans, other general employment matters and certain
commercial matters. Towers Watson advises the Company on
its UK pension arrangements.
The Committee also received support from an independent
consultant, Paul Williams, on various matters including a review
of the Companys approach to pay and benets.
The Committee also consults with the EVP of HR, the EVP
General Counsel and Company Secretary, the CEO and
the CFO on a regular basis. No member of the Committee,
nor any party from whom advice was sought, participated
in discussions relating to their own remuneration.
The Committee met 11 times during 2010/11 with Committee
members attending 100% of meetings. Full details of the
attendance at meetings is shown in the corporate governance
report on page 52.
What responsibilities does the Committee have?
The Committee is responsible for agreeing the framework
and broad remuneration strategy and policy for the executive
Directors and other senior executives, both of which are
designed to support the business growth agenda and attract,
retain and motivate talented leaders. In doing so we determine
the individual remuneration and benets packages for the
executive Directors and EVPs and other direct reports to the
CEO, ensuring that they are structured to reward performance
and not failure.
The Committee also reviews and determines the fees of the
Chairman of the Board, although the Chairman is not present
during any discussion in relation to his remuneration.
The Committee approves the design and targets for all
incentive schemes, including annual bonus plans and share
incentive plans that include the executive Directors and the
EVPs. The totality of all awards and option grants made under
each of the Companys share incentive plans is considered
and approved by the Committee having due regard for the
Companys dilution limits. Vesting under many of the awards
made is subject to achievement against performance targets
which are monitored by the Committee.
The Committee keeps under review the appropriateness of
the remuneration strategy as aligned to business strategy and
against business performance with respect to its peers in order
to ensure that the overall objective of attracting leading talent
is achieved.
We have prepared this report in accordance with the
Combined Code on Corporate Governance, Schedule 8 of the
Large and Medium-Sized Companies and Group (Accounts
and Reports) Regulations 2008 and the UK Listing Authority
Listing Rules. We will be asking you to approve an advisory
resolution on the report at the 2011 AGM, which we hope you
will support.
The auditors are required to report on the Directors
emoluments table and the tables of share options and awards
along with all associated footnotes. Accordingly, these tables
and footnotes form the audited section of this report.
How does the Committee ensure it delivers on its
responsibilities?
The Committee reviewed and amended the annual rolling
calendar of business in order to improve the effectiveness of
the Committee. It now ows from a review of remuneration
strategy at the start of the year, through consideration of
specic policy matters leading nally to approvals. It is
designed to deliver a complete and holistic review by the
Committee on all aspects of remuneration. In addition, at each
meeting the Committee receives any relevant industry updates
and reviews the share dilution limit schedule to ensure it
remains fully informed on all matters that may impact its
decision making.
The annual rolling calendar is set out below:
Date Purpose Matters considered
January Strategic outlook
Trends in reward and governance
Reward issues
March
Committee
effectiveness
Past performance
Future objectives/goals
April Policy setting
Review of reward principles
Benchmarking review
July Approval
Salary reviews
Bonus reviews
Share awards
Directors remuneration report
September AGM
Investor engagement
CEO scorecard
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What has the Committee done during the year?
The matters considered by the Committee in 2010/11 in addition to those as set out in the annual rolling calendar are shown
in the chart below:
General reward principles For executive Directors
to support the development of Misys as a global employer
of choice
a signicant proportion of total compensation is performance-
related
that total remuneration opportunity is targeted at market-
competitive levels
performance-linked incentive awards are designed to
encourage executive Directors to create long-term shareholder
value and align their personal interests with those of the
Company
reward is based on performance business performance measures are based on targets that are
relevant to the business and aligned with shareholders interests
employees have the opportunity to participate in ownership
of Misys shares
executive Directors are expected to build and maintain a
meaningful shareholding in the Company to provide further
alignment of their interests with those of shareholders
employees are eligible to participate in employee benets
which are a portion of total reward
business performance measures are established and executive
Directors are paid for performance
Our remuneration philosophy
The remuneration philosophy is designed to align with the business and its growth strategy. It recognises that in order to deliver on
the growth strategy the Company needs to be able to attract, and keep, the best available global talent in the markets within which
it operates. This means offering competitive remuneration that is delivered through performance-driven compensation.
Exceptional remuneration will only be awarded for exceptional performance.
Engaged with
shareholders
Secured CEO
retention
Reviewed performance
measures following the
disposal of Allscripts
Benchmarked
against our peers
We engaged with our
shareholders over the impact on
the Companys share plans
resulting from the disposal of
Allscripts, the return of capital and
the acquisition of Sophis. Due to
the reduction of our issued share
capital, we renewed our Dilution
Limits under our plans to 10% in
10 years and introduced a new
2% per annum ow rate. The EPS
performance measure was
re-based to remove the volatility
caused following the disposal of
Allscripts and the acquisition of
Sophis. This ensured that
management was rewarded for
performance but that the targets
in future years remained
stretching.
We reviewed the ongoing mechanism in place
for the CEO having due regard to the Boards
view that his continued service of the
Company is vital to achieving its objectives.
The CEO Incentive Plan is a one-off 3 year
incentive plan subject to stretching
performance measures that align his
interests to those of shareholders.
Completed a benchmarking review
against our peers for executive
Directors and senior management.
Completed
a full review of the
Committees remit
and effectiveness
Engaged Boardroom Review to
complete an external effectiveness
review of the Committee.
Updated its annual rolling calendar.
Improved the interface with
management and information
provided to the Committee.
Ensured retention of key staff by
rewarding them for delivering value
to our shareholders under the
return of capital following the
Allscripts disposal.
Made certain other adjustments
to the baseline EPS to reect the
changed capital structure of the
Company including the impact of
the convertible on EPS.
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In applying its remuneration principles during the year, the Committee considered data on recent changes in pay and conditions
for other senior executives throughout the Group. The Companys policy is to pay an appropriate market rate for each employees
function and location. EVPs are also expected to build and maintain a meaningful shareholding in the Company over time. The
Committee was satised that Directors pay and conditions have, on average, not improved more than those of other employees
in the nancial year.
How is our remuneration policy structured?
The table below summarises the Companys policies in respect of each of the key elements of executive Directors and EVPs
remuneration.
What do our Directors receive?
In each year, a signicant portion of each executive Directors total remuneration is performance based and is dependent upon
the achievement of stretching annual and longer term targets. The chart below shows the proportion of xed and variable pay for
the Chief Executive, the CFO and an average for the EVP population.
Element Policy Details
Base salary Provides the xed element of the
remuneration package
Reviewed annually and normally set for the
12 months commencing 1 August
Annual bonus Incentivises the achievement of specic
goals in the short term
Targets based on Group operating prot and
specic operational and individual objectives
Element of deferral aids retention and
provides alignment with shareholders
50% of bonus is normally deferred into
shares
Medium and long-term incentives Incentivises executives to achieve medium
and long-term nancial performance
improvement
Aligns the interests of executives and
shareholders
Provides for the retention of key individuals
The Misys Omnibus Plan is designed to
deliver a combination of matching shares,
performance shares and share options
Pension and benets Provides post-retirement benets for
participants in a cost-efcient manner
Pension contributions are on a dened
contribution basis
Shareholding guidelines Executive Directors to build up a holding
equivalent to 100% of base salary
Supports alignment with shareholders
interests
0 10 20 30 40 50 60 70 80 90 100
CEO
CFO
30% 40% 30%
35% 35% 30%
35% 35% 30%
Salary Bonus Long-term incentives
EVPs
The above pay mix chart has been calculated on the basis of xed remuneration delivered to the executive Directors through
salary. Annual bonuses have been valued at target, and long-term incentives have been calculated on an expected value basis.
(An expected value calculation provides a single valuation for a long-term incentive award, based upon the probability of
achieving the performance conditions associated with the award).
How does Misys compensation compare?
We commissioned Deloitte LLP to perform an in-depth benchmarking exercise in respect of our executive Directors and EVPs
against global practices of global companies of a similar size and complexity in both the UK and US markets. The benchmarking
results were considered by the Committee when considering the total reward packages for the executive Directors and other
senior management at the level immediately below the Board.
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Executive Directors remuneration
Salary
The Committee reviews the salaries of executive Directors on
an annual basis. When considering the xed element of the
remuneration packages, full regard is given to the total
remuneration package including variable and deferred pay.
The Chief Executive is domiciled in the United States and
his annual base salary is paid in US dollars.
Base salary is the only element of remuneration which is
pensionable for executive Directors.
Annual bonus
The Misys Senior Executive Bonus Plan (MSEBP) provides
incentives in both the short and medium-term for executive
Directors based on stretching nancial, operational and
personal objectives. At least half of any annual award will
normally be deferred into shares for a period of one year.
The targets for the annual bonus are established by the
Committee at the commencement of each nancial year.
For 2010/11, the overall annual bonus potential for the
executive Directors is dependent upon their meeting or
exceeding a threshold Group operating prot target with the
actual level of payment then dependent upon the extent to
which targets are met in respect of Group operating prot,
revenue, cost savings, customer satisfaction scores and
personal objectives.
The potential bonus achievements for the executive Directors
are as follows:
On target annual bonus Maximum bonus
Mike Lawrie 100% 120% of base salary
200% of base
salary
Stephen Wilson 100% of base salary
150% of base
salary
For the year just ended, the Committee determined the annual
bonus payment for the executive Directors by reference to
specic targets set at the beginning of the year:
Group nancial targets are met or exceeded
customer satisfaction levels are met or exceeded
personal performance targets are met or exceeded
Taking into account the extent to which performance
objectives were met, the Committee approved an annual
bonus payment of 190% of base salary for the Chief Executive
and 147% for the CFO, half of which will be satised in cash
and half of which will be deferred into shares for a period
of one year.
Benets
The Chief Executive is eligible to receive certain benets
including private health insurance, life assurance cover, UK
accommodation and expatriate tax advice. The CFO receives
a car cash allowance and private medical insurance for himself
and his family. The executive Directors are also eligible to
participate in the savings-related SAYE share option plan
operated in the UK on the same terms as other employees.
Pensions
The Companys pension policy is to provide dened
contributions to executive Directors, either through the
Companys dened contribution pension plan or as an
allowance for use in their personal pension plans. The CFO
participates in the Companys dened contribution pension
plan. The Chief Executive receives a contribution equivalent
to 20% of his base salary to a deferred compensation plan
established in the US. For UK purposes this plan is treated
as an employer nanced retirement benet scheme.
Non-executive Directors remuneration
Chairman and non-executive Directors
The Chairman and non-executive Directors all have letters of
appointment for a three-year term, which may be extended by
mutual agreement.
The Board considered the level of fees paid to non-executive
Directors (unchanged since 2007). Taking advice from Deloitte
LLP and considering other independent market data, the
Board felt that the fees for non-executive Directors should
be adjusted in order to bring them in line with market levels.
Accordingly, with effect from 1 March 2011, the base fee for
a non-executive Director was increased from 40,000 to
45,000. The fee for acting as the senior independent Director
was reduced from 20,000 to 15,000 per annum. All other
fees remained unchanged.
The current fee levels for the non-executive Directors are as set
out below:
m Fees
Chairman
1
180,000
Basic fee 45,000
Additional fee for the Senior Independent Director 15,000
Additional fee for chairing the audit committee 8,000
Additional fee for chairing the remuneration committee 8,000
Additional fee for chairing the nomination committee 5,000
1 The Chairman does not receive any additional fees in respect of his
appointment to any of the committees.
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Medium and Long-Term Share Incentives
Share awards
Our share plans provide medium and long-term incentives
for executive Directors and other key members of staff and
are designed to achieve medium and long-term growth.
A description of each of the plans and the performance
conditions for each are set out below.
The Misys Omnibus Share Plan (the Omnibus Plan)
The Omnibus Plan is the primary plan operated by the
Company and is designed to deliver maximum exibility
for the award of share incentives.
Three types of award, all of which are subject to performance
conditions, may be granted under the Omnibus Plan:
performance shares awards to acquire shares for no
cost;
share options traditional market value share options; and
matching shares awards to acquire shares at no cost to
the participant and which are linked to the award of deferred
shares under the MSEBP.
All of these awards are subject to performance conditions as
set out below.
Shares awarded as performance shares or share options
must meet the following targets in order to be satised.
Compound annual growth rate (CAGR)
of Misys adjusted EPS over performance period
Percentage of total award
shares that will vest
Less than 10% nil
From 10% to 12.5%
From 25% to 100%
on a straight-line basis
12.5% or more 100%
During the year, the Committee implemented adjustments to
the EPS performance targets for performance shares and
share options on the basis of the principles approved by
shareholders at the general meeting held in August 2010. The
adjustments were designed to recognise the value returned
to shareholders on the disposal of Allscripts and to align the
interests of shareholders and award holders. In summary:
There was no adjustment to the number of shares in
outstanding awards and no acceleration of vesting; and
The performance targets for a proportion of awards (50%)
have been treated as satised in full.
The remaining portion of awards have been treated as follows:
The original EPS performance targets for Misys (including
Allscripts) were measured to the end of 2009/10 to determine
vesting for a time pro-rated element (17% of awards for
2009/10; 33% for 2008/09 awards); and
Performance targets have been increased for the remaining
proportion of awards based on the performance of the
remaining Misys businesses (excluding Allscripts) ensuring
that they are no less stretching than before.
The performance targets for these remaining portions are
as follows:
2008/09 awards the performance target requires growth
in operating prots of the Banking and TCM divisions over
the 3 year period 2008/09 to 2010/11. The target is
measured from a base gure of 42.4 million and requires
a CAGR of 11.4% for any vesting and 12.5% CAGR for
full vesting.
2009/10 awards the performance target requires EPS
growth of between 10% CAGR and 12.5% CAGR in
2010/11 and 2011/12. The EPS base gure for 2009/10 has
been raised from 10.3 pence to 15.1 pence to reect the
Companys altered capital structure following the return
of capital.
2010/11 awards none of the awards made in 2010/11
were adjusted. The performance targets for the whole of
these awards requires EPS growth of between 10% CAGR
and 12.5% CAGR. The EPS base gure is 15.1 pence.
Vesting is further subject to the Committee being satised
regarding the overall results of the Company over the
performance period, taking into account such factors it
determines appropriate including the Companys business
and shareholder value performance.
Shares awarded as matching shares in respect of the bonus
deferral arrangements of the MSEBP are subject to further
performance conditions that utilise a matrix of operating prot
and revenue targets as shown in the following table. If specic
revenue and operating prot targets are met, up to 50% of the
award shares may vest one year after grant. The remaining
50% of the award will be tested against the second years
targets.
A
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P
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120%
of target
37.5% 56.25% 75% 87.5% 100%
110%
of target
25% 43.75% 62.5% 75% 87.5%
100%
of target
12.5% 31.25% 50% 62.5% 75%
90%
of target
0% 0% 31.25% 43.75% 56.25%
80%
of target
0% 0% 12.5% 25% 37.5%
80%
of target
90%
of target
100%
of target
110%
of target
120%
of target
Revenue
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The Transformation Incentive Plan (TIP)
The TIP was established in 2006, at the start of the turn-
around programme and is a one time plan specically
designed to drive execution of the turnaround strategy by
the leadership team at the time. As a condition of receiving
an award, participants were required to make a personal
investment in the business equal to the value of one quarter
of the award received. The performance targets applied to this
award are based on share price growth over a ve year period
as set out in the following table, measuring share price as an
average over 20 dealing days with straight line vesting between
each point. In addition the Misys share price on the vesting
date must also be higher than the price on the grant date for
any portion of the award to vest.
Vesting opportunities are on the third, fourth and fth
anniversaries of the grant. The second testing date for this award
was 1 November 2010, as a result of which 19% of the award
vested. The nal vesting opportunity will be in November 2011.
Share price % of award that vests
<2.25 0%
2.25 12.5%
2.50 25%
3.00 50%
3.50 75%
4.00 100%
No further awards will be made under this plan.
As was disclosed to shareholders in the circular relating to
the disposal of Allscripts and the proposed Tender Offer, the
Committee considered the impact of these events on the
performance conditions for the TIP. The Committee concluded
that it would:
not adjust the originally specied share price targets nor
accelerate vesting of awards;
treat the Tender Offer price as a measurement share price
for the TIP; and
regard the underpin performance condition relating to the
initial share price as satised in relation to shares that vested
on the basis of measuring the performance target using the
Tender Offer price.
CEO Incentive Plan
With the imminent expiry of the TIP and in recognition of the
importance of the CEO in ensuring a continued focus on
performance, the Committee introduced the CEO Incentive
Plan. The CEO Incentive Plan is a one-off 3 year incentive
arrangement designed solely for Mike Lawrie, which was
entered into on 28 February 2011 following discussions
with major shareholders. The Plan is bespoke and therefore a
relatively unusual plan but the Committee and the Board is of
the opinion that it is a natural continuation of the TIP plan which
expires later this year.
The plan has been designed to incentivise the CEO to remain
with the Company to extract further value for shareholders
and directly aligns his interests with shareholders as any
award under this scheme requires a signicant increase in
shareholder value. In addition, and in order to receive benets
under the plan, he is also required to maintain a minimum
shareholding in the Company of 6 times salary and
to not reduce his shareholding from its February 2011 level.
The Committee believes that this plan offers a very signicant
incentive for Mike to remain with Misys and to continue to
deliver on the strategy for the benet of all of the Companys
shareholders. The Board also believes that the scale and
duration of the nancial commitment that Mike is prepared
to make for the 3 year life of the Plan should be of great
reassurance to shareholders.
All shares awarded under the plan are subject to stretching
performance targets measured over a three year period. Only
8.3% of the award shares will vest upon achievement of the
lowest threshold with 100% vesting for maximum performance.
Vesting between each point will be measured by calculating,
on a straight line basis, performance between each target
point. The maximum number of share awards under the plan is
1,600,000. Performance targets are measured over a period of
any 60 consecutive trading days in the performance period,
and will vest according to the schedule below:
Share price threshold achieved
in the performance period
Maximum number of
shares which will vest
3.75 133,333
4.00 426,667
4.25 720,000
4.50 1,013,333
4.75 1,306,667
5.00 1,600,000
In addition no award shares will vest unless the Committee is
satised regarding the Companys underlying nancial
performance in the performance period.
In the event of a change of control of Misys, or if he leaves
in circumstances of death or ill health, awards only vest to the
extent performance conditions were achieved. If he left Misys
for any other reason (other than dismissal for misconduct),
Mike could keep performance vested award shares subject
to time pro-rated reductions and the delayed release of such
shares until the original three year vesting date and provided
that the personal shareholding requirements are maintained
until vesting.
The plan will be available for inspection for 15 minutes before
and until the close of the 2011 AGM since it has not been
approved by shareholders. Awards under the plan will be
satised using shares held in the Employee Benet Trust.
Benets under the plan are not pensionable.
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1998 Unapproved Plan
The 1998 Unapproved Plan is an unapproved share option
scheme. Whilst there are awards outstanding under the plan,
there is no intention to use the plan in the future. Mike Lawrie
has one award outstanding under the Plan which was granted
in August 2007, the details of which are set out in the share
option table on page 72.
The performance targets applied to this award are based on
compound annual growth in adjusted EPS over a xed three
year period in excess of growth in the UK Retail Price Index
(RPI) as follows:
Annual compound growth rate in adjusted EPS % of salary that vests
RPI + 3% p.a. Up to 50%
RPI + 3% to 6% p.a. 51% to 100%
RPI + 6% to 9% p.a. 100% to 200%
Sharesave (SAYE)
The Company operates a savings related SAYE share option
plan which all employees are eligible to participate in, including
executive Directors. Participants make monthly savings (up to a
maximum of 250 per month) over a three year period. At the
end of the savings period, the funds are used to purchase
shares under option. Shares awarded under this scheme are
not subject to the satisfaction of performance targets.
Dilution limits
As a result of the return of capital made to our shareholders
during the year, the number of shares in issue was signicantly
reduced. This required us to review our dilution limits under
our share plans in order that we could continue to incentivise
executives and employees to continue delivering returns to
our shareholders in the future.
Accordingly, at the General Meeting held on 15 August 2010,
shareholders approved the amendment of the Companys
share plans to adopt a new share plans dilution limit of 10%
of the Companys issued share capital over 10 years. This limit
applies only to new awards made after the Tender Offer. In line
with the Companys previous grant policy, an additional formal
limit was added within the rules such that in any one year
awards over new issue or treasury shares would not exceed
more than 2% of issued share capital. The Committee receives
regular updates on the dilution position under the Companys
share plans and carefully considers the impact on dilution of
any awards made.
The Company sources shares for share awards through a mixture
of newly issued shares, shares held in treasury and shares
acquired and held in the Companys employee share trust.
Shareholding guidelines
Executive Directors are required to build and maintain over time
a shareholding in the Company equivalent to at least 100% of
base salary. The Chief Executive maintains a shareholding well
in excess of this target.
Executive Directors service contracts
Mike Lawries contract provides that he may terminate his
employment with the Company by giving three months written
notice and the Company may terminate his employment by
giving 12 months written notice. On termination, Misys has
a contractual obligation to pay in lieu of at least six months of
the notice period other than in the case of summary dismissal.
In the event of a change of control, if the contract is terminated
either directly or indirectly as a result within the following
12 month period, he will be entitled to receive a sum equal to
12 months salary, on-target bonus, pension contribution and
health insurance. Change of control would also bring forward
the vesting date for the Chief Executives Transformation
Incentive Plan at which point performance conditions would
be applied to the outstanding award with no time pro-rating.
Stephen Wilsons contract provides that he may terminate
his employment by giving six months written notice and the
Company may terminate his employment by giving six months
written notice. On termination, Misys has an absolute discretion
to make a payment in lieu of notice for the six month notice
period other than in the case of summary dismissal. In the
event of a change of control, if the contract is terminated either
directly or indirectly as a result within the following 12 month
period, he will be entitled to receive a sum equal to 12 months
salary and on target bonus.
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conLnued
Directors contracts
The contractual arrangements with each executive and non-
executive Director who served in the year are summarised
below. Stephen Wilson and Timothy Tuff who were appointed
during the year will be put forward for election at the 2011
AGM. In order to align ourselves with The UK Corporate
Governance Code and best practice in this area all other
Directors will put themselves forward for re-election at the
2011 AGM.
Date of current contract/
letter of appointment Notice period
M Lawrie 13 October 2006 12 months re-elected
at 2010 AGM
S Wilson 16 July 2010 6 months to
be elected at the
2011 AGM
Sir James Crosby 30 January 2009 1 month elected
at the 2009 AGM
J Ormerod 21 September 2005 1 month re-elected
at the 2009 AGM
J King 2 November 2005 1 month re-elected
at the 2009 AGM
P Rowley 5 November 2008 1 month elected
at the 2009 AGM
T Tuff 23 February 2011 1 month to be
elected at the
2011 AGM
J Ubben 16 January 2007 1 month re-elected
at the 2010 AGM
Performance graph
The following graph measures the Companys Total
Shareholder Return (TSR) performance over a ve year period
as required by the Companies Act 2006. This is compared
against the TSR performance of the FTSE TechMark All-Share
Index. The Directors do not believe that this is the ideal group
of comparator companies. It is however the most appropriate
broad equity market index available against which TSR can be
measured as it is made up of companies in similar markets and
geographic locations to Misys.
This graph shows the value at 31 May 2011 of 100 invested in
Misys plc on 31 May 2006 compared with the value of 100
invested in the FTSE TechMark All-Share Index plotted over
the ve year period.
180
160
140
120
100
80
60
May 06 May 07 May 08 May 09 May 10 May 11
V
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(
)
Misys
FTSE TechMark All-Share Index
External directorships
The Company recognises that executive Directors may
broaden their experience by serving as non-executive Directors
of other companies and they are permitted to accept such
appointments by prior agreement with the Board. It is normal
practice for executive Directors to retain fees received for
non-executive appointments. During the year, Mike Lawrie
served as a non-executive Director of Juniper Networks, Inc.,
for which he received a fee of US $65,000. In addition, he
also participates in its share option plan under which he
holds 78,764 share options. He also sits on the Board of
Trustees of Drexel University, for which he does not receive
any compensation. Stephen Wilson does not hold any
external directorships.
Directors interests in shares
The interests of Directors in the ordinary shares of the
Company are set out below. All interests are benecial and
have been adjusted to account for the 7 for 8 consolidation
completed on 14 February 2011.
Number of shares
At 1 June 2010
(or date of
appointment
if later)
1 June 2010
(adjusted for 7 for
8 consolidation)
At 31 May 2011
(or date ceased
to be a Director
if earlier)
M Lawrie
1,3
1,303,411 1,140,485 1,160,628
S Wilson 35,000 30,625 30,625
Sir James Crosby 53,912 47,173 47,173
J Ormerod 50,000 43,750 43,750
J King
3
150,000 131,250 131,250
P Rowley 27,305 23,891 23,891
T Tuff 18,000
J Ubben
1,2
146,756,217 128,411,690 70,744,050
1 Mike Lawrie and Jeff Ubben are investors in ValueAct Capital Partners, L.P.,
which has an interest in ValueAct Capital Master Fund L.P. and as such have
an interest in respectively 97,757 and 2,889,122 ordinary shares, being their
proportionate interest in the total number of ordinary shares held by ValueAct
Capital Master Fund L.P. These ordinary shares are shown in their interests in
the table above.
2 67,812,779 shares are owned directly by ValueAct Capital Master Fund, L.P.
and may be deemed to be benecially owned by (i) VA Partners I, LLC as
General Partner of ValueAct Capital Master Fund, L.P., (ii) ValueAct Capital
Management, L.P. as the manager of ValueAct Capital Master Fund, L.P., (iii)
ValueAct Capital Management, LLC as General Partner of ValueAct Capital
Management, L.P., (iv) ValueAct Holdings, L.P. as the sole owner of the limited
partnership interests of ValueAct Capital Management, L.P. and the
membership interests of ValueAct Capital Management, LLC, and as the
majority owner of the membership interests of VA Partners I, LLC and (v)
ValueAct Holdings GP, LLC as General Partner of ValueAct Holdings, L.P.
Jeff Ubben disclaims benecial ownership of the reported stock except to
the extent of his pecuniary interest therein.
3 Mike Lawrie resigned as a Director of Allscripts on 20 August 2010 and John
King resigned on 17 November 2010. At their dates of resignation, they both
held an interest in 70,000 and 10,000 shares of common stock in Allscripts
respectively.
There have been no changes in Directors interests in shares of
the Company between 31 May 2011 and 28 July 2011.
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Directors emoluments
Audited information
The amounts payable by the Company to each Director in respect of qualifying services for the nancial year 2010/11 are set out
below. These gures exclude share benets, which are shown separately. No Director has waived any emoluments other than in
respect of serving on the Allscripts Board for part of the year.
Base
salary/fee Bonus
1
Benets
in kind
2
Car
allowances
Other
payments
Total 2011 (or
from date of
appointment)
Total
2010
Pension
contributions
2011
3
2010
Executive
Directors
M Lawrie
4
$1,088,700 $2,068,530 $61,988 $3,219,218 $3,336,089 $217,740 $217,740
S Wilson
6
216,667 318,500 967 7,333 543,467 26,000
Non-executive
Directors
James Crosby 180,000 180,000 153,316
J Ormerod 68,000 68,000 68,000
J King
5
71,901 71,901 98,160
P Rowley 41,250 41,250 40,000
T Tuff
6
11,942 11,942
J Ubben 41,250 41,250 40,000
1 Half of the bonus payment was deferred into shares.
2 Benets in kind include those benets that are normally taxable in the UK. For Mike Lawrie, this includes accommodation whilst working in the UK. This amount
has been converted to US dollars at an exchange rate of 1.58 dollars to the UK pound, being the average rate for the nancial year 2010/11. The amount for Mike
Lawrie also includes his US-based private medical and dental insurance with a value of US $13,989.
3 The amount contributed for Mike Lawrie is paid into a deferred compensation plan in the US.
4 Mike Lawries contractual salary is denominated in sterling and paid in US dollars at a xed exchange rate of 1.91 dollars to the pound (being the exchange rate at
the time he was appointed in 2006) giving a dollar salary of US $1,088,700.
5 The fee gure for John King includes 41,250 for sitting on the Misys Board, 8,000 for his Chairmanship of the Remuneration Committee and US $35,790 for
the period to 17 November for sitting on the Board of Directors of Allscripts (of which US $16,393 was paid to him by Allscripts). He resigned from the Allscripts
Board on 17 November 2010. The US dollar amounts are converted at an exchange rate of 1.58 dollar to the UK pound being the average rate for the nancial
year 2010/11.
6 Stephen Wilson and Timothy Tuff were appointed to the Board on 1 October 2010 and 23 February 2011 respectively.
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conLnued
At 1 June
2010
Awarded
during the
year
Vested/
Released
during the
year
Exercised
during the
year
Lapsed
during the
year
At
31 May
2011
Market
price
at date of
allocation
Market
price
at date of
release
Weighted
average
exercise
price
Vesting
date
Expiry
date
M Lawrie CEO
TIP
Share option
contract
2
1,013,069 192,483 1,013,069 208.00
03 Nov
2009
03 Nov
2016
TIP Share
award contract
5
753,724 192,483 192,483 561,241 286.00
01 Nov
2011
01 Nov
2011
Misys
Omnibus
Share Plan
Share Options 696,538 696,538 122.75
02 Oct
2011
02 Oct
2018
Share Options 464,673 464,673 184.00
13 Aug
2012
13 Aug
2019
Share Options 318,554 318,554 268.40 268.40
18 Aug
2013
18 Aug
2020
Performance
Shares 348,269 348,269
02 Oct
2011
02 Oct
2011
Performance
Shares 232,336 232,336
13 Aug
2012
13 Aug
2012
Performance
Shares 159,227 159,277 266.00
18 Aug
2013
18 Aug
2013
Matching
Shares
5
309,782 68,880 86,011 154,891
13 Aug
2011
13 Aug
2011
Matching
Shares 212,369 212,369 266.00
18 Aug
2011
18 Aug
2012
MSEBP
5
309,782 309,782 0 256.40
13 Aug
2010
13 Aug
2010
MSEBP 212,369 212,369 266.00
18 Aug
2011
18 Aug
2012
LTIP
4
242,725 242,725 0
10 Aug
2010
10 Aug
2010
1998
Unapproved
Plan
3
485,451 485,451 485,451 241.00
10 Aug
2010
10 Aug
2017
SAYE 2007
5
989 989 989 0 191.00
01 Oct
2010
01 Apr
2011
2008 1,372 1,372 137.00
01 Oct
2011
01 Apr
2012
2009 1,269 1,269 143.00
01 Oct
2012
01 Apr
2013
2010 882 882 271.70 204.00
01 Oct
2013
01 Apr
2014
CEO Incentive
Plan 1,600,000 1,600,000 328.60
28 Feb
2014
28 Feb
2014
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At 1 June
2010 (or
date of
appointment)
Awarded
during the
year
Vested/
Released
during the
year
Exercised
during the
year
Lapsed
during the
year
At 31 May
2011
Market price
at date of
allocation
Market
price
at date of
release
Weighted
average
exercise
price
Vesting
date
Expiry
date
S Wilson CFO
Misys
Omnibus
Share Plan
Share Options 64,412 16,103 64,412 155.00
11 May
2010,
11 & 12
12 May
2019
Share Options 90,815 90,815 268.40 268.40
18 Aug
2013
18 Aug
2020
Performance
Shares 28,161 28,161
20 Aug
2012
20 Aug
2019
Performance
Shares 144,927 144,927
11 May
2012
13 Oct
2019
Performance
Shares 10,514 10,514
20 Nov
2012
20 Nov
2019
Performance
Shares 90,815 90,815 266.00
18 Aug
2013
18 Aug
2020
SAYE 822 882 271.70 204.00
01 Oct
2013
01 April
2014
1 The closing share price on 31 May 2011 was 361.8 pence. The highest and lowest closing prices during the year were 368.9 pence and 227.01 pence
respectively. No amounts were paid in respect of the awards of any share options.
2 The value of the award is equal to 2m based on the Misys share price at the time of grant.
3 Granted on 10 August 2007 at a value of 200% of base salary.
4 Awards made to Mike Lawrie under the Misys Long Term Incentive Plan on 10 August 2007 were in the form of contingent share awards.
5 Aggregate gains on exercise of options and awards were 615,101 (2010: 672,089).
Approved by the Board
John King
Chairman, Remuneration Committee
28 July 2011

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Statement of Lrectors' resonsbltes
The Directors are responsible for preparing the Annual Report,
the Directors remuneration report and the nancial statements
in accordance with applicable law and regulations.
Company law requires the Directors to prepare nancial
statements for each nancial year. Under that law, the Directors
have prepared the Group nancial statements in accordance
with International Financial Reporting Standards (IFRSs) as
adopted by the European Union and the Parent Company
nancial statements in accordance with United Kingdom
Generally Accepted Accounting Practice (United Kingdom
Accounting Standards and applicable law). Under company
law, the Directors must not approve the nancial statements
unless they are satised that they give a true and fair view of
the state of affairs of the Group and the Company and of the
prot or loss of the Group for that period. In preparing those
nancial statements, the Directors are required to:
select suitable accounting policies and then apply them
consistently;
make judgements and accounting estimates that are
reasonable and prudent;
state whether IFRSs as adopted by the European Union
and applicable United Kingdom Accounting Standards have
been followed, subject to any material departures disclosed
and explained in the Group and Parent Company nancial
statements respectively; and
prepare the nancial statements on the going concern
basis unless it is inappropriate to presume that the Group
will continue in business.
The Directors are responsible for keeping adequate accounting
records that are sufcient to show and explain the Companys
transactions and disclose with reasonable accuracy at any
time the nancial position of the Company and the Group
and to enable them to ensure that the nancial statements and
the Directors remuneration report comply with the Companies
Act 2006 and, as regards the Group nancial statements,
Article 4 of the IAS Regulation. They are also responsible
for safeguarding the assets of the Company and the Group
and hence for taking reasonable steps for the prevention
and detection of fraud and other irregularities.
The Directors are responsible for the maintenance and integrity
of the Companys website. Legislation in the United Kingdom
governing the preparation and dissemination of nancial
statements may differ from legislation in other jurisdictions.
Each of the Directors, whose names and functions are listed
in Board of Directors section, conrm that, to the best of
their knowledge:
the Group nancial statements, which have been prepared
in accordance with IFRSs as adopted by the EU, give a true
and fair view of the assets, liabilities, nancial position and
prot of the Group;
the Financial Review and Principal Risks and Uncertainties
sections include a fair review of the development and
performance of the business and the position of the Group,
together with a description of the principal risks and
uncertainties that it faces;
so far as the Directors are aware, there is no relevant audit
information of which the Companys auditors are unaware;
and
they have taken all the steps that they ought to have taken as
Directors in order to make themselves aware of any relevant
audit information and to establish that the Companys
auditors are aware of that information.
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Audt onon for the Msys lc Grou
Independent auditors report to the members of Misys plc
Introduction
We have audited the Group nancial statements of Misys plc
for the year ended 31 May 2011 which comprise the
consolidated income statement, the consolidated statement
of comprehensive income, the consolidated statement of
cash ows, the consolidated balance sheet, the consolidated
statement of changes in equity, the accounting policies and the
related notes. The nancial reporting framework that has been
applied in their preparation is applicable law and International
Financial Reporting Standards (IFRSs) as adopted by the
European Union.
Respective responsibilities of Directors and auditors
As explained more fully in the Directors Responsibilities
Statement set out on page 74, the Directors are responsible for
the preparation of the Group nancial statements and for being
satised that they give a true and fair view. Our responsibility
is to audit and express an opinion on the Group nancial
statements in accordance with applicable law and International
Standards on Auditing (UK and Ireland). Those standards
require us to comply with the Auditing Practices Boards
Ethical Standards for Auditors.
This report, including the opinions, has been prepared for and
only for the Companys members as a body in accordance
with Chapter 3 of Part 16 of the Companies Act 2006 and for
no other purpose. We do not, in giving these opinions, accept
or assume responsibility for any other purpose or to any other
person to whom this report is shown or into whose hands it
may come save where expressly agreed by our prior consent
in writing.
Scope of the audit of the nancial statements
An audit involves obtaining evidence about the amounts
and disclosures in the nancial statements sufcient to give
reasonable assurance that the nancial statements are free
from material misstatement, whether caused by fraud or
error. This includes an assessment of: whether the accounting
policies are appropriate to the Groups circumstances and
have been consistently applied and adequately disclosed;
the reasonableness of signicant accounting estimates made
by the Directors; and the overall presentation of the nancial
statements. In addition, we read all the nancial and non-
nancial information in the annual report to identify material
inconsistencies with the audited nancial statements. If we
become aware of any apparent material misstatements or
inconsistencies, we consider the implications for our report.
Opinion on nancial statements
In our opinion, the Group nancial statements:
give a true and fair view of the state of the Groups affairs as
at 31 May 2011 and of its prot and cash ows for the year
then ended;
have been properly prepared in accordance with IFRSs as
adopted by the European Union; and
have been prepared in accordance with the requirements of
the Companies Act 2006 and Article 4 of the lAS Regulation.
Opinion on other matter prescribed by the
Companies Act 2006
In our opinion, the information given in the Directors Report
for the nancial year for which the Group nancial statements
are prepared is consistent with the Group nancial statements.
Matters on which we are required to report by exception
We have nothing to report in respect of the following:
Under the Companies Act 2006, we are required to report to
you if, in our opinion:
certain disclosures of Directors remuneration specied by
law are not made; or
we have not received all the information and explanations
we require for our audit.
Under the Listing Rules, we are required to review:
the Directors statement, set out on page 74, in relation
to going concern;
the part of the Corporate Governance Statement relating to
the Companys compliance with the nine provisions of the
June 2008 Combined Code specied for our review; and
certain elements of the report to shareholders by the Board
on Directors remuneration.
Other matter
We have reported separately on the parent Company nancial
statements of Misys plc for the year ended 31 May 2011 and
on the information in the Directors Remuneration Report that
is described as having been audited.
Giles Hannam (Senior Statutory Auditor)
for and on behalf of PricewaterhouseCoopers LLP
Chartered Accountants and Statutory Auditors
London
28 July 2011
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Consoldated ncome statement
or Lhe yeur ended Muy .o
All gures in millions Note 2011 2010
Continuing operations
Revenue 1 370.0 341.9
Adjusted operating prot before: 1 71.9 63.6
Amortisation of acquired intangibles 1 (10.6) (1.0)
(Losses) gains on embedded derivatives 1 (4.0) 1.5
Translation exchange differences recycled from reserves 1 (2.0)
Operating prot before exceptional items 57.3 62.1
Exceptional gains 5.2
Exceptional losses (21.0) (13.6)
Net exceptional items 2 (21.0) (8.4)
Operating prot 1 36.3 53.7
Finance costs (10.5) (10.4)
Exceptional nance income 2 4.8 1.4
Finance income 1.6 0.3
Net nance costs 7 (4.1) (8.7)
Prot before taxation 32.2 45.0
Taxation before exceptional items 8 (11.5) (12.5)
Taxation on exceptional items and exceptional nance income 2 4.2 2.8
Exceptional tax credit (charge) 2 9.4 (10.8)
Taxation 8 2.1 (20.5)
Prot after taxation from continuing operations 34.3 24.5
Discontinued operation
Prot after taxation and before exceptional items 7.8 43.2
Exceptional items after taxation 2 606.9 (6.3)
Prot after taxation from discontinued operation 3 614.7 36.9
Prot for the year 649.0 61.4
Prot for the year attributable to equity holders of Misys plc 649.0 44.3
Prot for the year attributable to non controlling interest 17.1
Pence Pence
Basic earnings per share 9 146.3 8.4
Diluted earnings per share 9 143.2 8.2
Consoldated statement of comrehensve ncome
Prot for the year 649.0 61.4
Other comprehensive income:
Exchange difference on the translation of foreign operations (7.3) 62.4
Actuarial losses recognised 27 (0.9) (1.3)
Tax (charge) credit on items taken directly to equity (4.3) 0.3
Other comprehensive income for the period (net of tax) (12.5) 61.4
Total comprehensive income for the year 636.5 122.8
Total comprehensive income attributable to:
Equity holders of Misys plc 645.9 82.1
Non controlling interest (9.4) 40.7
Total income recognised in the year 636.5 122.8
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Consoldated statement of cash fovs
Operating activities
Net cash ow generated from operations 79.1 168.7
Net interest paid 10 (3.9) (10.6)
Net taxation paid (7.3) (6.3)
Net cash ow from operating activities 67.9 151.8
Investing activities
Acquisitions and disposals of businesses 11 464.5 (2.9)
Expenditure on developed software (28.0) (31.8)
Other capital expenditure and nancial investment 12 215.1 (10.9)
Net cash ow from (used in) investing activities 651.6 (45.6)
Net cash ow used in nancing activities 13 (771.5) (66.2)
(Decrease) increase in cash and cash equivalents in the year (52.0) 40.0
Net cash and cash equivalents at the start of the year 114.9 63.1
Differences on exchange (6.1) 11.8
Net cash and cash equivalents at the end of the year 15 56.8 114.9
All gures in millions 2011 2010
Continuing operations
Prot after taxation 34.3 24.6
Net nance costs 4.1 8.7
Taxation (credit) charge (2.1) 20.5
Amortisation of other intangible assets 22.3 11.8
Depreciation and impairment charge of property, plant and equipment 6.5 4.5
Share-based payment charges 7.4 6.3
Differences between pension charge and cash contributions 1.4 1.2
Increase in trade and other receivables (6.0) (12.8)
Decrease in trade and other payables and provisions (3.0) (5.9)
Increase in deferred income 9.1 10.6
Movement in derivative receivables and payables 4.1 (1.6)
Other non-cash movements 1.4 (0.8)
Net cash ow generated from continuing operations 79.5 67.1
Discontinued operation
Prot after taxation 614.7 36.8
Net nance costs 0.1 1.0
Taxation charge 3.9 22.8
Depreciation and impairment charge of property, plant and equipment 1.1 4.8
Share-based payment charges 2.3 12.0
Net prot on disposal of businesses (603.8)
Loss on disposal of available for sale asset 1.3
Prot on disposal of available for sale asset (11.6)
Increase (decrease) in inventories 0.1 (0.3)
Decrease (increase) in trade and other receivables 2.7 (25.9)
(Decrease) increase in trade and other payables and provisions (4.5) 18.9
(Decrease) increase in deferred income (11.7) 11.3
Other non-cash movements 0.6
Net cash ow (used in) generated from discontinued operation (0.4) 101.6
Net cash ow generated from operations 79.1 168.7
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Consoldated balance sheet
us uL Muy .o
Non current assets
Goodwill 16 231.1 315.5
Other intangible assets 17 275.9 224.4
Property, plant and equipment 18 14.5 30.8
Investments 19 5.5 7.1
Trade and other receivables 20 8.7 1.6
Derivative nancial instruments 23 2.0 4.9
Deferred tax assets 25 35.6 19.5
573.3 603.8
Current assets
Inventories 2.1
Trade and other receivables 20 134.4 285.7
Derivative nancial instruments 23 1.0 1.1
Current tax asset 5.0
Cash and cash equivalents 15 56.8 120.3
192.2 414.2
Current liabilities
Trade and other payables 21 (88.8) (142.9)
Loans and overdrafts 22 (17.9) (46.3)
Derivative nancial instruments 23 (1.6) (0.7)
Current tax liabilities (24.3) (31.2)
Provisions 24 (8.0) (7.7)
Deferred income 26 (105.3) (166.5)
(245.9) (395.3)
Net current (liabilities) assets (53.7) 18.9
Total assets less current liabilities 519.6 622.7
Non current liabilities
Trade and other payables 21 (3.9) (5.9)
Loans and overdrafts 22 (133.1) (73.1)
Derivative nancial instruments 23 (2.3) (2.0)
Deferred tax liabilities 25 (27.6) (11.1)
Provisions 24 (11.3) (18.0)
Deferred income 26 (5.2) (6.6)
Retirement benet obligations 27 (6.2) (4.3)
(189.6) (121.0)
Net assets 330.0 501.7
Equity
Share capital 4.3 5.9
Share premium account 12.7 151.9
Capital redemption reserve 147.7 0.3
Other reserves 32 165.3 193.8
Shareholders' funds 330.0 351.9
Non controlling interest 149.8
Total equity 330.0 501.7
Mike Lawrie
28 July 2011
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Consoldated statement of changes n equty
All gures in millions
Share
capital
Share
premium
Capital
redemption
reserve
Other
reserves
Attributable
to the
owners of
the parent
Non
controlling
interest
Total
equity
At 1 June 2010 5.9 151.9 0.3 193.8 351.9 149.8 501.7
Total comprehensive income for the year 645.9 645.9 (9.4) 636.5
Shares issued in the year to
purchase Sophis 0.1 5.5 5.6 5.6
Transactions with owners
Share options settled from own shares 1.0 6.1 7.1 7.1
Business disposed (39.9) (39.9) (140.4) (180.3)
Convertible debt equity component 16.1 16.1 16.1
Shares repurchased for cancellation (1.7) 1.7 (525.0) (525.0) (525.0)
B share scheme shares issued 145.7 (145.7)
B share scheme redemption of B shares (111.8) 111.8 (105.6) (105.6) (105.6)
B share scheme dividends paid (33.9) 33.9 (33.9) (33.9) (33.9)
Expenses incurred on transactions
with owners (5.5) (5.5) (5.5)
Share-based payments 9.7 9.7 9.7
Deferred tax on share-based payments 3.6 3.6 3.6
At 31 May 2011 4.3 12.7 147.7 165.3 330.0 330.0
No ordinary shares were purchased by the Misys Employee Share Trust during the current or preceding year.
for the year ended 31 May 2010
Share
capital
Share
premium
Capital
redemption
reserve
Other
reserves
Attributable
to the
owners of
the parent
Non
controlling
interest
Total
equity
At 1 June 2009 5.9 151.9 0.3 85.2 243.3 92.5 335.8
Total comprehensive income for the year 82.1 82.1 40.7 122.8
Transactions with owners
Shares options settled from own shares 2.9 2.9 2.9
Exercise of Allscripts share options 0.8 0.8
Conversion of Allscripts 3.5% senior
convertible debentures 3.5 3.5 5.7 9.2
Share-based payments 12.9 12.9 5.4 18.3
Deferred tax on share-based payments 7.2 7.2 4.7 11.9
At 31 May 2010 5.9 151.9 0.3 193.8 351.9 149.8 501.7
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Accountng olces
The consolidated nancial statements have been prepared in
accordance with International Financial Reporting Standards
(IFRSs) and International Financial Reporting Interpretations
Committee (IFRIC) interpretations as adopted by the European
Union (EU) and with those parts of the Companies Act 2006
that are applicable to companies reporting under IFRS.
The Group, in addition to complying with its legal obligation
to apply IFRSs as adopted by the European Union, has also
applied IFRSs as issued by the International Accounting
Standards Board.
Going concern
As a result of the funding activities undertaken the Group
has improved both its short-term and medium-term liquidity
position and diversied its funding sources through the
issuance of a convertible bond. Interest cover and debt to
EBITDA ratios are comfortably within the targets set by the
Board and banking covenants. The Groups forecasts and
projections, taking account of reasonable potential variations
in trading performance, show that the Group should be able
to operate within the level of its current nancing for the
foreseeable future.
After making enquiries, the Directors have a reasonable
expectation that the Group has adequate resources to
continue in operational existence for the foreseeable future.
The Group therefore continues to adopt the going concern
basis in preparing its consolidated nancial statements.
Changes in accounting policy and disclosures
The Group has adopted the following new and amended IASs
and IFRSs as of 1 June 2010:
IFRS 3 (revised), Business combinations, and consequential
amendments to IAS 27, Consolidated and separate nancial
statements, IAS 28, Investments in associates, and IAS 31,
Interests in joint ventures, are effective prospectively to
business combinations for which the acquisition date is on
or after the beginning of the rst annual reporting period
beginning on or after 1 July 2009.
The revised standard continues to apply the acquisition
method to business combinations but with some signicant
changes compared with IFRS 3. For example, all payments
to purchase a business are recorded at fair value at the
acquisition date, with contingent payments classied as debt
subsequently re-measured through the income statement.
There is a choice on an acquisition-by-acquisition basis to
measure the non-controlling interest in the acquiree either at
fair value or at the non-controlling interests proportionate share
of the acquirees net assets. All acquisition-related costs are
expensed.
The revised standard was applied to the acquisition of the
controlling interest in Sophis Management GP (Luxembourg)
Sarl and Sophis Holding GP (Luxembourg) Sarl (together
Sophis) on 28 February 2011. Acquisition-related costs
of 7.7m have been expensed in the consolidated income
statement, which previously would have been included in
the consideration for the business combination. See note 16
for further details of the business combination that occurred
in 2011.
IAS 27 (revised) requires the effects of all transactions with
non-controlling interests to be recorded in equity if there is
no change in control and these transactions will no longer
result in goodwill or gains and losses. The standard also
species the accounting when control is lost. Any remaining
interest in the entity is re-measured to fair value and a gain or
loss is recognised in prot or loss.
The following IFRSs and IFRIC interpretations and
amendments have been adopted by the Group but none had
any material impact on the Group results or nancial position:
Annual improvements to IFRSs (2009) and (2010)
As required by the amendments to IAS 21 The effects of
changes in foreign exchange rates the Group has opted
to recycle cumulative translation reserves, arising from
differences on quasi-equity long-term intra-group loans,
on loss of control of subsidiaries
Amendment to IAS 32 Classication of right issues
Amendment to IAS 36 Impairment of assets
Amendment to IAS 39, Financial instruments: Recognition
and measurement, on eligible hedged items
Amendment to IFRS 2, Share based payments
Group cash-settled share-based payment transactions
(effective 1 January 2010)
IFRIC 17 Distribution of non-cash assets to owners
The following new standards, interpretations and amendments
to existing standards have been published and are mandatory
for the Groups accounting periods beginning on or after
1 January 2011 or later periods but the Group has not early
adopted them:
IFRS 9 Financial instruments (not yet endorsed by the EU)
IFRS 10 Consolidated nancial statements (not yet
endorsed by the EU)
IFRS 11 Joint arrangements (not yet endorsed by the EU)
IFRS 12 Disclosure of involvement with other entities
(not yet endorsed by the EU)
IFRS 13 Fair value measurement (not yet endorsed by
the EU)
IAS 24 (revised) Related party disclosures
IAS 27 (further revision) Separate nancial statements
(not yet endorsed by the EU)
IAS 28 (further revision) Investment in associates and joint
ventures (not yet endorsed by the EU)
IFRIC 14 Prepayments of a minimum funding requirement
IFRIC 19 Extinguishing nancial liabilities with equity
instruments
The Group has undertaken an initial review of the impact of
these new standards, interpretations and amendments and
has concluded that they are unlikely to be material.
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A summary of the Groups accounting policies is given below.
Accounting convention
The consolidated nancial information has been prepared
under the historical cost convention, except for certain
items which are measured at fair value, as disclosed in the
accounting policies below. These accounting policies have
been consistently applied to all the years presented, unless
otherwise stated.
Basis of consolidation
The Groups nancial statements consolidate the nancial
statements of Misys plc (the Company) and its subsidiary
undertakings. On acquisition, the assets, liabilities and
contingent liabilities of a subsidiary are measured at their
fair value at the date of acquisition.
The Group uses the acquisition method of accounting to
account for business combinations. The consideration
transferred for the acquisition of a subsidiary is the fair value
of the assets transferred, the liabilities incurred and the equity
interests issued by the Group. The consideration transferred
includes the fair value of any asset or liability resulting from
a contingent consideration arrangement. Acquisition-related
costs are expensed as incurred. Identiable assets acquired
and liabilities and contingent liabilities assumed in a business
combination are measured initially at their fair values at the
acquisition date. On an acquisition-by-acquisition basis, the
Group recognises any non-controlling interest in the acquiree
either at fair value or at the non-controlling interests
proportionate share of the acquirees net assets.
The excess of the consideration transferred, the amount of any
non-controlling interest in the acquiree and the acquisition date
fair value of any previous equity interest in the acquiree over
the fair value of the Groups share of the identiable net assets
acquired is recorded as goodwill. If this is less than the fair
value of the net assets of the subsidiary acquired in the case of
a bargain purchase, the difference is recognised directly in the
statement of comprehensive income. Prior to the adoption of
IFRS, goodwill arising on acquisition was taken to reserves in
accordance with UK GAAP.
Subsidiary undertakings acquired during the period
are included in the nancial statements from the date
of acquisition. Subsidiary undertakings disposed of are
included in the nancial statements up to the date of
disposal. Accordingly, the consolidated income statement,
the consolidated statement of comprehensive income and
the consolidated statement of cash ow include the results
and cash ows for the period of ownership.
Subsidiaries are all entities over which the Group has the
power to govern the nancial and operating policies generally
accompanying a shareholding of more than one half of the
voting rights. The existence and effect of potential voting rights
that are currently exercisable or convertible are considered
when assessing whether the Group controls another entity.
Inter-company transactions, balances and unrealised gains
on transactions between Group companies are eliminated.
Unrealised losses are also eliminated but considered as an
impairment indicator of the asset transferred. Accounting
policies of subsidiaries have been changed where necessary
to ensure consistency with the policies adopted by the Group.
Critical accounting estimates and judgements
Estimates and judgements are continually evaluated and are
based on historical experience and other factors, including
expectation of future events that are believed to be reasonable
under the circumstances. Due to inherent uncertainty involved
in making estimates and assumptions, actual outcomes could
differ from those assumptions and estimates. The critical
judgements that have been made in arriving at the amounts
recognised in the Groups nancial statements and the key
sources of estimation uncertainty that have a signicant risk of
causing a material adjustment to the carrying values of assets
and liabilities within the next nancial year are discussed below.
Revenue recognition
The recognition of Initial Licence Fees is dependent upon
there being no signicant vendor obligations outstanding.
Management exercises judgement in assessing whether such
obligations are signicant and if necessary the value of the
revenue to be deferred.
The revenue and prot of xed price global services contracts
is recognised on a percentage of completion basis when the
outcome of a contract can be estimated reliably. Management
exercises judgement in determining whether a contracts
outcome can be estimated reliably. Management also makes
some estimates in the calculation of future contract costs, fair
values of contracts, the value of discounts given, the value of
upgrade clauses in contracts which are used in determining
the value of amounts recoverable on contracts and timing of
revenue recognition. Estimates are continually revised based
on changes in the facts relating to each contract.
Impairment of goodwill and intangible assets
Goodwill is reviewed annually for impairment and other
intangible assets are reviewed for impairment whenever events
or changes in circumstances indicate that the carrying amount
may not be recoverable. An impairment review requires an
estimate to be made of the value in use or the fair value less
costs to sell as appropriate. The value in use calculation
includes estimates about the future nancial performance of
the cash generating units, including managements estimates
of long-term operating margins and long-term growth rates.
Capitalisation of development costs
Expenditure on developed software is capitalised when the
Group is able to demonstrate all of the following: the technical
feasibility of the resulting asset; the ability (and intention) to
complete the development and use or sell it; how the asset
will generate probable future economic benets; and the ability
to measure reliably the expenditure attributable to the asset
during its development. Management estimates the future
sales and long-term operating margins of the asset.
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Accountng olces
conLnued
Onerous property contracts
Property provisions require an estimate to be made of the
net present value of the future costs of vacant and sublet
properties. The calculation includes estimates of future cost
involved, including managements estimates of the long-term
letting potential of the properties.
Taxation
The Group is subject to income taxes in numerous
jurisdictions. Management is required to exercise signicant
judgement in determining the worldwide provision for income
taxes. Certain transactions require the use of estimates and
judgements to determine the nancial effect where the ultimate
tax determination is uncertain. When the nal outcome of such
matters is different, or expected to be different, from previous
estimates, such differences will impact income tax in the
period in which the determination is made.
The Group recognises deferred tax assets on temporary
differences where it is probable that future prots will be
available against which the deferred tax asset can be utilised.
Where the future results differ from expectations, such
differences will impact the deferred tax asset recognised
in the period in which the determination is made.
Segmental reporting
The Groups segmental analysis is by business sector which
reects the basis on which operations are reported to the
Chief Operating Decision Maker. The business sectors are
dened by distinctly separate product offerings or markets.
Segment results, assets and liabilities include items directly
attributable to a segment as well as those that can be
allocated on a reasonable basis.
Revenue recognition
Revenue represents the fair value of consideration received
or receivable from clients for goods and services provided
by the Group, net of discounts and sales taxes. Revenue is
recognised when a valid contract exists, delivery to a customer
has occurred with no signicant vendor obligations remaining
and where the collection of the resulting receivable is
considered probable.
Where these circumstances exist but no invoice to the
customer has been raised, under the terms of the contracts
revenue is recognised as normal but the corresponding
receivable is shown as accrued income on the balance sheet.
Initial licence fees (ILF) are the revenue generated when Misys
sells the right to use a software product, including signicant
upgrades, and when a fee is payable for a signicant variation
of an existing product. ILF from sales of standard, unmodied
software are recognised when a valid contract exists, delivery
to a customer has occurred with no signicant vendor
obligations remaining and where the collection of the resulting
receivable is considered probable. In instances where a
signicant vendor obligation exists, revenue recognition is
delayed until the obligation has been satised. No revenue is
recognised for multiple deliveries or multiple element products
if an element of the contract remains undelivered and is
essential to the functionality of the elements already delivered.
Licence and installation fees from sales of standard software
sold on an Application Service Provider (ASP) model are
recognised over the expected life of the contract.
Revenue from global services, such as implementation, training
and consultancy, is recognised as the services are performed.
In certain circumstances, the percentage of completion
method is used to determine the degree of completion of
a contract. This involves a comparison of the costs incurred
on the contract to date with the total expected costs of
the contract. Losses on contracts are recognised as soon
as a loss is foreseen by reference to the estimated costs
of completion.
Initial licence fees on sales of bespoke or heavily customised
software, together with revenue from the associated
professional services contract, are recognised on a percentage
of completion basis over the period from the commencement
of performance on the contract to customer acceptance.
Maintenance fees are recognised rateably over the period
of the contract. Revenue from Electronic Data Interchange
(EDI) and remote processing services (transaction processing)
is recognised as the services are performed.
Share incentive schemes
The Group operates several equity-settled, share-based
compensation plans. The fair value of the employee services
received in exchange for the grant of the options is recognised
as an expense.
The total amount to be expensed over the vesting period is
determined by reference to the fair value of the options
granted, excluding the impact of any non-market vesting
conditions (for example, protability and sales growth targets).
Non-market vesting conditions are included in assumptions
about the number of options that are expected to become
exercisable.
At each balance sheet date, a revised estimate is made of the
number of options that are expected to become exercisable.
If the revised estimate differs from the original estimate, the
charge to the income statement is adjusted over the remaining
vesting period of the options.
The social security contributions payable in connection with
the grant of the share options is considered an integral part of
the grant itself and the charge will be treated as a cash-settled
transaction.
Pensions
The Group operates a number of dened contribution pension
schemes covering the majority of its employees. The costs of
these pension schemes are charged to the income statement
as incurred. In addition, the Group has a closed funded dened
benet pension scheme in the UK, as well as a number of
other smaller dened benet arrangements outside the UK.
The remaining active members of the closed UK dened
benet scheme now contribute to a dened contribution
section of the scheme and do not accrue further benets
under the dened benet scheme. Full independent actuarial
valuations are carried out on a regular basis and updated to
each balance sheet date. The assets of the schemes are held
separately from those of the Group.
Pension scheme assets are measured using bid market values.
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Pension scheme liabilities are measured using a projected
unit method and discounted at the current rate of return on
a high quality corporate bond of equivalent term and currency
to the liability. The pension scheme surplus (to the extent that
it is recoverable) or decit is recognised in full on the balance
sheet. Any current or past service cost is recognised in the
income statement. The net of the expected increase in the
present value of the schemes liabilities, and the Groups
long-term expected return on its schemes assets, are included
in the income statement.
Any difference arising from experience or assumption changes
and differences between the expected return on assets
and those actually achieved are charged or credited to
the statement of comprehensive income and expense
as they arise.
Leases
Leases are classied as nance leases whenever the terms
of the lease transfer substantially all the risks and rewards
of ownership to the lessee. All other leases are classied
as operating leases.
Property, plant and equipment held under nance leases is
capitalised in the balance sheet at the lower of cost or present
value of the minimum lease payments and is depreciated over
its useful life. The capital elements of future obligations under
leases are included as liabilities in the balance sheet.
Lease payments are apportioned between nance charges
and reduction of the lease obligation so as to achieve a
constant rate of return on the remaining balance of the liability.
Rentals paid under operating leases are charged to income
on a straight line basis over the lease term.
Taxation
Taxation comprises the amount chargeable on the prots for
the period, together with deferred taxation. Deferred taxation
is recognised, using the liability method, in respect of all
temporary differences that have originated but not reversed
at the balance sheet date where transactions or events have
occurred at that date that may result in an obligation to pay
more, or a right to pay less, tax in the future.
Deferred tax assets are recognised only to the extent that it is
probable that there will be sufcient taxable prots from which
the underlying temporary differences can be deducted or
where there are deferred tax liabilities against which the assets
can be recovered.
Deferred tax is measured on an undiscounted basis at the tax
rates that are expected to apply in the periods in which the
related deferred tax asset is realised or the deferred tax liability
is settled based on tax rates and laws enacted or substantively
enacted at the balance sheet date.
The carrying amount of deferred tax assets is reviewed at
each balance sheet date and are reduced to the extent that
it is no longer probable that sufcient prots will be available.
Unrecognised deferred tax assets are reassessed at each
balance sheet date and are recognised to the extent that it is
probable that future prots will allow the deferred tax asset
to be recovered.
Current and deferred tax is recognised in the income
statement except when the tax relates to items charged
or credited directly to equity, in which case the tax is also
recognised in equity.
Foreign currencies
Items included in the nancial statements of Group companies
are measured using the currency of the primary economic
environment in which each entity operates (their functional
currency). The consolidated nancial statements are presented
in sterling.
Each subsidiary translates foreign currency transactions into
its own functional currency at rates ruling at the date of each
transaction. Foreign currency monetary assets and liabilities
are retranslated at rates ruling at the balance sheet date and
currency translation differences are recognised in the income
statement.
On consolidation, the results of overseas operations are
translated to sterling at the average exchange rate for the
period. Assets and liabilities of overseas operations are
translated at exchange rates prevailing on the balance sheet
date. The currency translation differences arising on both
elements are recognised in the translation reserve.
Exchange gains and losses on foreign currency borrowings
used to nance an equity investment in an overseas operation
are offset in reserves against the exchange differences arising
on the retranslation of the net investment, up to the level of
the investment. The exchange differences on any ineffective
portion are recognised in the income statement. Cumulative
translation reserves are recycled to the income statement on
loss of control of subsidiaries.
Goodwill and fair value adjustments arising on the acquisition
of a foreign entity are treated as assets and liabilities of the
foreign entity and translated at the closing rate.
When a foreign operation is disposed of, the cumulative
translation differences that relate to it, including changes to any
long-term intra-Group borrowing, are removed from equity and
recognised in the income statement as part of the gain or loss
on disposal.
The Group hedges its exposure to certain foreign exchange
risks using derivatives and foreign currency borrowings.
Details of the accounting policies in respect of these items
are given in the derivative nancial instruments and hedge
accounting section.
Business combinations
Goodwill represents the excess of the cost of an acquisition
over the fair value of the Groups share of the net identiable
assets of the acquired subsidiary at the date of acquisition.
Goodwill is recognised as an intangible asset. It is not
amortised but is reviewed for impairment annually and
whenever there is a potential indicator of impairment.
Any impairment is recognised immediately in the income
statement and is not subsequently reversed.
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Accountng olces
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On acquisition, specic intangible assets are identied and
recognised separately from goodwill and then amortised over
their estimated useful lives. These include such items as brand
names, customer relationships and complete technology,
to which value is rst attributed at the time of acquisition. The
capitalisation of these assets and related amortisation charges
are based on judgments about the value and economic life
of such items. These economic lives for intangible assets
are estimated at between four and fteen years for acquisition
intangibles.
On the disposal of a previously acquired subsidiary, the
attributable amount of goodwill is included in the determination
of the gain or loss on disposal.
Transaction costs
Acquisition-related costs are expensed as incurred.
Contingent consideration
Where part or the entire amount of purchase consideration
is contingent on future events, it is classied as debt
and recognised at fair value at acquisition date. This is
subsequently re-measured through the income statement.
Discontinued operations and assets held for sale
Where the Group expects to recover the carrying amount of a
group of assets through a sale transaction rather than through
continuing use and a sale is considered highly probable at the
balance sheet date, the assets are classied as held for sale
and measured at lower of cost and fair value less costs to sell.
No depreciation or amortisation is charged in respect of non
current assets classied as held for sale.
If the group of assets constitutes a separate major line
of business, it is classied as a discontinued operation.
Other intangible assets and research and development
expenditure
Research expenditure, including the cost of in-house software
research, is expensed in the period in which it is incurred.
Expenditure on developed software is capitalised when the
Group is able to demonstrate all of the following: the technical
feasibility of the resulting asset; the ability (and intention) to
complete the development and use or sell it; how the asset
will generate probable future economic benets; and the ability
to measure reliably the expenditure attributable to the asset
during its development.
Development costs which do not meet these criteria are
recognised in the income statement as incurred and are not
subsequently capitalised.
Capitalised expenditure on developed software is amortised
over its useful economic life in line with expected future
economic benets, once the related software product is
available for use.
Intangible assets purchased separately, such as software
licences that do not form an integral part of related hardware,
are capitalised at cost and amortised over their useful
economic lives. Intangible assets acquired through a business
combination are initially measured at fair value and amortised
on a systematic basis that reects the pattern of benets
expected over their useful economic lives. If the pattern of
future benets cannot be determined reliably, the intangible
assets are amortised on a straight line basis. The amortisation
period is reviewed annually.
Estimated useful lives by major class of assets are as follows:
Acquired intangibles 4-15 years
Developed software 3-7 years
Third party software 3-7 years
Property, plant and equipment
Property, plant and equipment is stated at cost less
accumulated depreciation. Cost includes the original purchase
price of the asset and the cost attributable to bringing the asset
to its working condition for its intended use. Depreciation is
calculated on a straight line basis so as to write off the cost,
less estimated residual value of each asset, over its expected
useful life.
The residual values and useful economic lives of property, plant
and equipment are reviewed annually. The useful lives by major
class of asset applied from the date of purchase are:
Leasehold improvements
5-15 years or the period of
the lease if shorter
Computer and other equipment 4-10 years
Impairment of assets
Assets that are subject to depreciation or amortisation are
reviewed for impairment whenever events or changes in
circumstances indicate that the carrying amount may not
be recoverable and at each reporting date.
Goodwill and developed software not yet brought into use
are reviewed for impairment annually. An impairment loss
is recognised for the amount by which the assets carrying
amount exceeds its recoverable amount. The recoverable
amount is the higher of an assets fair value less costs to sell
and its value in use.
For the purposes of assessing impairment, assets are grouped
at the lowest levels for which there are separately identiable
cash ows (cash generating units).
An asset is derecognised upon disposal or when no future
economic benets are expected from its future use or disposal.
Any gain or loss arising on derecognition of the asset is
included in the income statement in the year the asset is
derecognised.
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Financial assets
Financial assets are classied in the following categories:
at fair value through prot or loss, loans and receivables
and available for sale.
Financial assets at fair value through prot or loss are nancial
assets held for trading. Derivatives are also classied as held
for trading unless they are designated as hedges. Gains and
losses arising from changes in fair value of nancial assets
at fair value through prot or loss are included in the income
statement in the period in which they arise. Financial assets
at fair value through prot or loss are subsequently held at
fair value.
Loans and receivables are non-derivative nancial assets
with xed or determinable payments that are not quoted in
an active market and are carried at amortised cost.
Available for sale nancial assets are measured at fair value.
Unrealised gains and losses are recognised in equity except
for impairment losses, interest and dividends arising from
those assets which are recognised in the consolidated
income statement.
Trade and other receivables
Trade receivables are recognised initially at fair value and
subsequently measured at amortised cost using the effective
interest method, less provision for impairment.
Where there is objective evidence that there is an impairment
loss, the amount of loss is measured as the difference between
the carrying amount and the present value of the estimated
future cash ows discounted at the effective interest rate.
The amount of loss is recognised in the income statement
within administrative and other operating charges. The carrying
amount of a receivable is reduced by appropriate allowances
for estimated irrecoverable amounts through the use of an
allowance account for trade receivables. Amounts charged
to the allowance account are written off when there is no
expectation of further recovery. Subsequent recoveries
of amounts previously written off are credited against
administrative and other operating charges in the income
statement.
Investments
Equity instruments that do not have a quoted market price
in an active market and whose fair value cannot be reliably
measured are stated at cost, subject to review for impairment.

Financial liabilities and equity
Financial liabilities and equity instruments are classied
according to the substance of the contractual arrangements
entered into. An equity instrument is any contract that
evidences a residual interest in the assets of the Group
after deducting all of its liabilities.
Trade payables
Trade payables are recognised initially at fair value and
interest method.
Bank loans and overdrafts
Bank loans and overdrafts are initially recognised at fair
value less directly attributable transaction costs and are
interest rate method. The difference between the proceeds
(net of transaction costs) and the redemption value is
recognised in the income statement, within nance costs,
over the period of the borrowings. Borrowings are classied
as current liabilities unless the Group has an unconditional right
to defer settlement of the liability for at least 12 months after
the balance sheet date.
Equity instruments
Ordinary shares are classied as equity. Incremental costs
directly attributable to the issue of new shares or options are
shown in equity as a deduction, net of tax, from the proceeds.
Where any Group company purchases the Companys equity
share capital (treasury shares), the consideration paid including
any directly attributable costs (net of income taxes) is deducted
from equity attributable to the Companys equity holders until
the shares are cancelled or re-issued.
Derivative nancial instruments and hedge accounting
Derivative nancial instruments are initially recognised at
fair value on the date a derivative is entered into and are
subsequently remeasured at fair value. The method of
recognising the resulting gain or loss depends on whether the
derivative is designated as a hedging instrument and, if so, the
nature of the item being hedged. Changes in the fair value of
derivative nancial instruments, where they are not designated
as hedging instruments, are recognised in the income
statement as operating costs.
Certain nancial assets and liabilities, which are denominated
in currencies other than those of the functional currencies of
the entities concerned, are hedged using forward currency
contracts. Gains and losses on these contracts are recorded
in operating costs together with offsetting gains and losses on
the underlying items.
Expected future non-sterling cash ows of the Group are also
hedged with forward currency contracts. Hedge accounting
is not applied and the gains and losses are recorded in the
income statement under nance income/cost.
Hedge accounting
The business activities of the Group expose it to nancial risks
that arise from changes in both foreign exchange rates and
interest rates. The Group uses forward currency contracts and
interest rate swaps to hedge these exposures. In accordance
with its treasury policy, the Group does not enter into
derivatives for speculative purposes.
The Group designates certain derivatives as either:
(a) hedges of the fair value of recognised assets or liabilities
or a rm commitment (fair value hedges);
(b) hedges of a particular risk associated with a recognised
asset or liability or a highly probable forecast transaction
(cash ow hedge); or
(c) hedges of a net investment in a foreign operation.
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Accountng olces
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Changes in the fair value of derivative nancial instruments that
are designated and effective as hedges of future cash ows
are recognised directly in equity and any ineffective portion is
recognised immediately in the income statement.
If the item being hedged is a non-nancial asset or liability, the
gains or losses on the associated derivative that had previously
been recognised in equity are included in the measurement of
the asset or liability at the time it is recognised.
Conversely, if the item being hedged is a nancial asset or
liability, any amounts arising from changes in fair value that are
deferred in equity are subsequently recognised in the income
statement in the same accounting period in which the hedged
item affects net income.
Hedge accounting of a transaction is discontinued when the
hedging instrument is sold, terminated or exercised or when
the hedging instrument no longer qualies for hedge
accounting.
Under these circumstances, any cumulative gain or loss on
the hedging instrument, which has already been recognised
in equity, is retained in equity until the transaction occurs.
However, if a hedged transaction is no longer expected to
occur, any net cumulative gain or loss that has already been
recognised in equity is immediately transferred to the income
statement.
Embedded derivatives
Certain long-term software licensing contracts are priced in
currencies (usually US dollars, sterling or euros) which are
not the functional currencies of the entities entering into the
contracts. Under IAS 39, such contracts are considered to
contain an embedded foreign currency derivative which must
be extracted from the host contract and measured separately
at each balance sheet date except where the currency of the
contract is recognised as a common means of exchange in the
country concerned. Gains or losses on these derivatives are
charged or credited to the income statement. The contracts
are generally of up to 10 years duration and this is therefore
the period over which the assets and liabilities recognised in
the balance sheet are expected to crystallise.
Quasi-equity loans
Intercompany loans which are considered to be part of the
long-term capital structure of subsidiary undertakings are
deemed to be quasi-equity loans. As allowed by IAS 21,
foreign exchange gains and losses on these loans are taken
to reserves. If the subsidiary undertaking is subsequently sold,
cumulative gains or losses taken to reserves are recycled to
the income statement as part of the prot or loss on disposal.
Research and development tax credits
Research and development tax credits are claimed against
qualifying development spend in certain territories. These
are recognised on an accruals basis in line with the related
development costs. As permissible under IAS 20, the income
statement impact of the credits is offset against development
costs.
Provisions
Provisions are recognised when the Group has a present legal
or constructive obligation as a result of past events and it is
probable that an outow of resources will be required to settle
the obligation and if this amount is capable of being reliably
estimated. If such an obligation is not capable of being reliably
estimated, no provision is recognised and the item is disclosed
as a contingent liability where material.
Provision for onerous lease commitments on property
contracts is based on an estimate of the net unavoidable lease
and other payments in respect of these properties including
dilapidation costs. These comprise rental and other property
costs payable, plus any termination costs, less any income
expected to be derived from the properties being sublet. The
provisions are discounted at an appropriate rate to take into
account the effect of the time value of money.
Exceptional items
Where certain expense or revenue items recorded in a period
are material by their nature, size or incidence, these are
disclosed as exceptional within a separate line on the income
statement. Examples of items classied as exceptional
include:
a) prot or loss on the disposal of a business;
b) restructuring costs including those associated with the
turnaround programme;
c) acquisition integration costs; and
d) transaction costs relating to business combinations
or disposals.
Cash and cash equivalents
Cash and cash equivalents include cash held at bank and in
hand together with short-term highly liquid investments with
an original maturity of less than three months that are readily
convertible to known amounts of cash and subject to an
insignicant change in value.
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Notes to the nancal statements
1. Segmental analysis
Operating segments are reported in a manner consistent with the internal reporting to the Chief Operating Decision Maker
(CODM). The CODM has been identied as the Misys Operations Team, comprising the Group Chief Executive, Chief Financial
Ofcer and all Executive Vice Presidents. The Misys Operations Team is responsible for resource allocation and assessing the
performance of the operating segments. The operating segments are dened by distinctly separate product offerings or markets.
The operating segments consist of Banking, Treasury & Capital Markets (TCM), Misys Sophis and Open Source. The Corporate
& Other category includes Open Source and corporate costs as these operations are not reportable segments as required to be
disclosed under IFRS 8. Global Services is considered as a horizontal function with performance assessed by the CODM in each
of the dened operating segments.
Allscripts was previously reported as an operating segment but was disposed of in the year and hence is now reported under
discontinued operation. Similarly, Misys Sophis has been reported as a new segment after its acquisition from 1 March 2011.
Certain costs within the Corporate & Other segment are allocated to the other reportable segments based on revenue.
Revenue, operating prot (loss) by business
All gures in millions Banking TCM
Misys
Sophis
Corporate
& Other
2011
Total
Revenue 167.4 184.9 16.8 0.9 370.0
Adjusted operating prot 35.6 42.6 5.6 (11.9) 71.9
Amortisation of acquired intangibles (0.8) (0.5) (9.3) (10.6)
Losses on embedded derivatives (3.8) (0.2) (4.0)
Operating prot (loss) before exceptional items 31.0 41.9 (3.7) (11.9) 57.3
Exceptional items (1.1) (4.5) (4.6) (10.8) (21.0)
Operating prot (loss) 29.9 37.4 (8.3) (22.7) 36.3
Exceptional nance income 4.8
Net nance costs (8.9)
Prot before taxation 32.2
Taxation before exceptional items (11.5)
Taxation on exceptional items and exceptional nance income 4.2
Exceptional tax credit 9.4
Taxation 2.1
Prot for the period from continuing operations 34.3
Prot for the period from discontinued operation 614.7
Prot for the year 649.0
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1. Segmental analysis continued
Misys
Sophis
Corporate
& Other
2010
Total
Revenue 161.7 179.5 0.7 341.9
Adjusted operating prot 32.3 42.0 (10.7) 63.6
Amortisation of acquired intangibles (1.0) (1.0)
Gains on embedded derivatives 1.4 0.1 1.5
Translation exchange differences recycled from reserves (2.0) (2.0)
Operating prot (loss) before exceptional items 32.7 42.1 (12.7) 62.1
Exceptional items (1.4) (7.0) (8.4)
Operating prot (loss) 31.3 42.1 (19.7) 53.7
Exceptional nance income 1.4
Net nance costs (10.1)
Prot before taxation 45.0
Taxation before exceptional items (12.5)
Taxation on exceptional items and exceptional nance cost 2.8
Exceptional tax charge (10.8)
Taxation (20.5)
Prot for the year from continuing operations 24.5
Prot for the year from discontinued operation 36.9
Prot for the year 61.4
Excluded from the above are the following items relating to the discontinued operation (Allscripts): revenue 101.7m (2010:
440.4m); operating prot before exceptional items 12.5m (2010: 68.7m) and prot before tax 618.6m (2010: 59.7m).
All revenue is derived from external customers. No individual customer contributed more than 10% of total Group revenue in the
current or prior year.
Revenue
The table below gives a list of the revenue streams by segment.
All gures in
millions Banking TCM
Misys
Sophis
Corporate
& Other
2011
Total Banking TCM
Corporate
& Other
2010
Total
Initial licence
fees 48.0 48.1 6.0 102.1 40.3 51.3 91.6
ASP
subscriptions
revenue 0.1 3.0 2.2 0.1 5.4 0.2 3.5 3.7
Maintenance 83.8 76.3 5.7 0.2 166.0 84.7 76.3 161.0
Transaction
processing 10.8 10.8 10.2 10.2
Global services 35.5 46.7 2.9 0.6 85.7 36.5 38.2 0.7 75.4
167.4 184.9 16.8 0.9 370.0 161.7 179.5 0.7 341.9
Sophis was acquired on 28 February 2011 and so contributed no revenue in the preceding year.
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Other segmental information
Misys
Sophis
Corporate
& Other
Continuing
operations
Discontinued
operation
2011
Total
Net assets (liabilities)
Assets 129.0 121.0 415.2 100.3 765.5 765.5
Liabilities (100.1) (98.6) (24.1) (212.7) (435.5) (435.5)
28.9 22.4 391.1 (112.4) 330.0 330.0
Capital investment
Goodwill and acquired intangibles 0.5 2.0 389.7 (0.9) 391.3 391.3
Developed software 13.4 7.2 1.1 (0.3) 21.4 6.6 28.0
Other 2.2 3.0 0.2 0.4 5.8 1.9 7.7
16.1 12.2 391.0 (0.8) 418.5 8.5 427.0
Depreciation, amortisation, impairment
and derecognition
Acquired intangibles 0.8 0.5 9.3 10.6 3.5 14.1
Developed software 5.5 3.6 0.5 0.1 9.7 1.1 10.8
Other 3.4 2.7 0.5 1.9 8.5 1.5 10.0
9.7 6.8 10.3 2.0 28.8 6.1 34.9
Share-based payment charge 3.2 1.9 0.1 4.6 9.8 2.3 12.1
Employees (average number) 2,075 1,285 100 307 3,767 640 4,407
Misys
Sophis
Corporate
& Other
Continuing
operations
Discontinued
operation
2010
Total
Net assets (liabilities)
Assets 118.1 137.3 51.3 306.7 711.3 1,018.0
Liabilities (103.0) (87.3) (169.1) (359.4) (156.9) (516.3)
15.1 50.0 (117.8) (52.7) 554.4 501.7
Capital investment
Developed software 11.6 6.5 0.3 18.4 13.4 31.8
Other 1.7 1.1 1.6 4.4 10.5 14.9
13.3 7.6 1.9 22.8 23.9 46.7
Depreciation, amortisation, impairment
and derecognition
Acquired intangibles 1.0 1.0 14.8 15.8
Developed software 5.0 3.9 8.9 3.0 11.9
Other 3.2 2.6 0.8 6.6 7.0 13.6
9.2 6.5 0.8 16.5 24.8 41.3
Share-based payment charge 1.0 1.0 4.0 6.0 13.7 19.7
Employees (average number) 1,525 1,029 1,164 3,718 2,412 6,130
Capital investment comprises expenditure on investments, goodwill, other intangible assets and property, plant and equipment.
Banking and TCM assets consist primarily of goodwill, other intangible assets, property, plant and equipment and trade and other
receivables and exclude cash balances, corporation tax recoverable and deferred tax assets which are included within Corporate as
these are managed centrally. Misys Sophis assets include all of the above items, including cash and taxation assets.
Banking and TCM liabilities consist primarily of trade and other payables and provisions and exclude bank overdrafts, loans,
corporation tax payable, deferred tax liabilities and retirement benet obligations, which are included within Corporate as
these are managed centrally. Misys Sophis liabilities include all of the above items including taxation liabilities.
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1. Segmental analysis continued
Misys plc is domiciled in the UK. The total revenue from external customers in the UK and United States of America is included
in the table below. The total revenue from external customers from other countries is shown under the regional headings below.
United
Kingdom
Rest of
Europe Asia Pacic
United
States of
America
Middle East
and Africa Other
2011
Total
Revenue by destination 40.6 141.8 62.9 67.7 47.5 9.5 370.0
Assets by location of operations 112.6 497.4 26.2 94.5 26.3 8.5 765.5
Non-current assets by location
of operations 32.0 443.3 54.9 3.5 2.0 535.7
Capital investment by location
of operations 4.6 397.3 13.4 2.3 0.9 418.5
Employees by location of operations
(average number) 535 537 2,130 454 111 3,767
United
Kingdom
Rest of
Europe Asia Pacic
United
States of
America
Middle East
and Africa Other
2010
Total
Revenue by destination 47.7 131.8 50.1 59.6 46.5 6.2 341.9
Assets by location of operations 90.5 63.2 28.1 92.8 24.3 7.8 306.7
Non-current assets by location
of operations 36.5 39.2 1.7 57.6 0.4 2.2 137.6
Capital investment by location
of operations 7.2 6.5 0.6 7.5 1.0 22.8
Employees by location of operations
(average number) 402 543 2,077 490 111 95 3,718
Excluded from the above are the following items relating to the discounted operation (Allscripts) all of which relate to the United
States of America: revenue 101.7m (2010: 440.4m): assets nil (2010: 711.3m); non-current assets nil (2010: 441.8m); capital
investment 8.5m (2010: 23.4m); and average number of employees 640 (2010: 2,412).
2. Exceptional items
Restructuring activities and turnaround programme (A) (4.4) (8.7)
Advisory and professional fees related to corporate activities (B) (8.9) (4.9)
Integration costs (C) (7.7)
Receipt from sale of legal claim (D) 3.9
Exceptional refund of VAT (E) 1.3
Exceptional items within continuing operations (21.0) (8.4)
Exceptional nance income within continuing operations (F) 4.8 1.4
Taxation credit on exceptional items within continuing operations 4.2 2.8
Exceptional tax credit (charge) (G) 9.4 (10.8)
Exceptional items after taxation within continuing operations (2.6) (15.0)
Loss on disposal of Medication Services Group (0.3)
Prot on disposal of businesses (H) 603.8
Advisory and professional fees (7.9) (7.8)
Net prot on disposal of available for sale asset (I) 10.3
Exceptional items within discontinued operation 606.2 (8.1)
Taxation credit on exceptional items within discontinued operation 0.7 1.8
Exceptional items after taxation within discontinued operation 606.9 (6.3)
Exceptional items after taxation 604.3 (21.3)
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(A) Restructuring activities and turnaround programme
A total charge of 4.4m (2010: 8.7m) has been recognised
as an exceptional item in relation to costs incurred in the
Group-wide restructuring and turnaround programme.
In the current year, these costs primarily relate to:
severance costs 5.9m (2010: 3.4m) in relation to the
relocation of development activities for the USA and
Western Europe and other restructuring programmes; and
net property credit of 1.5m (2010: cost of 5.3m) being
a provision release in respect of vacant properties which
have been sublet of 3.8m (2010: cost of 7.6m) offset by
a charge of 2.3m (2010: credit of 2.3m) on the surrender
of a property lease.
These costs are analysed by business as follows:
Banking 1.2 1.4
TCM 4.4
Corporate & Other (1.2) 7.3
4.4 8.7
There was a related cash outow of 6.0m in the current year
(2010: 4.6m).
(B) Advisory and professional fees relating to corporate activities
Included within the current year costs are 7.7m (2010: nil)
regarding the acquisition of Sophis, comprised of consultancy,
legal and tax fees regarding the acquisition. Costs incurred for
other corporate activities are 1.2m (2010: 4.9m).
(C) Integration costs
The current year costs comprise 3.1m relating to a write-off
of software held by Misys which is no longer required following
the merger with Sophis, 3.0m being provision for onerous
lease costs created on the exit of Sophis properties, 0.4m
being write-off of xtures and ttings in these properties and
1.2m (2010: nil) provision for management retention bonuses
agreed as part of the acquisition.
(D) Receipt from sale of legal claim
On 27 May 2010, an offer of $6m from a third party was
accepted to sell an outstanding claim against Lehman Brothers
arising from its administration in 2009. The original claim by
Misys arose as a result of the failure to complete funding for
the Allscripts acquisition. This cash was received before
31 May 2010.
(E) Exceptional refund of VAT
Agreement was reached with HMRC relating to the repayment
of VAT incurred between years 1988 to 1995 relating to
acquisition costs. A total of 2.7m including interest (see F)
was credited in 2010.
(F) Exceptional nance income
A net credit of 4.8m has arisen as a result of exceptional items
in relation to the disposal of Allscripts and acquisition of Sophis
(see note 7). Last year, a credit of 1.4m had arisen as a result
of supplemental interest on the refund of VAT (see E above).
(G) Taxation
The exceptional current tax credit of 9.4m included within UK
prior year items relates to the successful settlement of historical
UK tax issues arising in 2002 to 2006 resulting in the release of
the related provisions. In 2010, the exceptional tax charge of
10.8m relates to the loss of future tax benets in continuing
operations following the restructuring of the US group due to
the disposal of Allscripts recognised as a 2.7m charge within
current taxation and a 8.1m charge within deferred taxation.
(H) Prot on disposal of business
A prot of 603.8m has been realised as a result of the sale
of the Groups majority stake in Allscripts in August 2010. The
prot on disposal is exempt from tax in the relevant taxing
jurisdiction. In addition, Allscripts incurred 7.9m of exceptional
costs in the period to the date of disposal relating to the
separation from Misys and merger with Eclipsys.
(I) Net prot on available for sale assets
Following the disposal of Allscripts (note H above) in August
2010, there was a further disposal of 12.5m shares of the
residual shareholding in November 2010. Misys received
proceeds of 139.4m which gave rise to a loss of 1.3m
compared to the carrying value calculated as at August 2010.
In February 2011, there was a further disposal of 6.5m shares
of the residual shareholding. Misys received proceeds of
84.9m which gave rise to a prot of 11.6m compared to the
carrying value calculated as at November 2010. This prot from
disposal is also exempt from tax.
3. Discontinued operation
The results of the Groups discontinued operation (Allscripts),
which have been included in the consolidated income
statement, were as follows:
Revenue 101.7 440.4
Operating costs (89.2) (371.7)
Operating prot for the period 12.5 68.7
Exceptional items (note 2) 606.2 (8.1)
Net nance costs (0.1) (1.0)
Prot before tax from discontinued
operation 618.6 59.6
Taxation (note 8) (3.9) (22.7)
Prot after tax from discontinued
operation 614.7 36.9
Employees costs related to Allscripts include:
Wages and salaries 34.4 133.9
Social security costs 10.4
Share-based payment benets 2.4 13.8
36.8 158.1
Net cash ows from operating activities (1.4) 93.9
Net cash ows from investing activities (8.5) (20.8)
Net cash ows from nancing activities (26.9)
(9.9) 46.2
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3. Discontinued operation continued
A prot of 603.8m arose on disposal of Allscripts, being the
proceeds of disposal less the carrying amount of the Allscripts
net assets and attributable goodwill.
Proceeds on disposal, net of underwriting expenses 764.2
Fair value of investment retained 214.1
Net assets at disposal less non-controlling interest (137.3)
Goodwill disposed (note 16) (240.0)
Disposal costs (9.4)
Foreign exchange recycling from reserves 12.2
Prot on disposal 603.8
After the disposal in August 2010, Misys retained a 10.3%
interest in Allscripts. This holding was reduced to 3.5% as
a result of a further disposal in November 2010 with the nal
disposal of Allscripts stock taking place in February 2011.
In addition, Allscripts incurred 7.9m of exceptional costs
in the period from 1 June 2010 to disposal in August 2010.
Advisory and professional fees (7.9) (7.8)
Loss on disposal of Medication
Services Group (0.3)
Net prot on disposal of available
for sale asset 10.3
2.4 (8.1)
4. Operating costs
Cost of sales 194.2 178.9
Sales and marketing costs 41.2 37.8
Administrative and other
operating charges 77.3 63.1
Exceptional items (note 2) 21.0 8.4
333.7 288.2
Included within operating costs are the following items:
Research and development expenditure 69.3 64.4
Capitalisation of developed software (21.4) (18.4)
47.9 46.0
Amortisation of developed software 9.7 8.9
Impairment and depreciation of
property, plant and equipment 6.5 4.5
Foreign exchange differences 0.8 1.9
Operating lease costs
and buildings 13.8 15.3
plant and equipment 0.2 0.3
Amortisation of other intangible assets includes 9.8m
(2010: nil) in respect of intangible assets acquired with Sophis.
Details of employee costs are provided in note 6.
During the year, the Group obtained the following services from
the Companys auditor and its associates:
Fees payable to
PricewaterhouseCoopers LLP for the
audit of the consolidated nancial
statements 0.6 0.6
Statutory audit fees payable
to associate members of
PricewaterhouseCoopers LLP 0.4 0.9
Other fees in respect of assurance
services required by legislation
and regulation 0.8 1.6
1.8 3.1
Tax services 0.7 2.4
Other services 0.2 0.6
2.7 6.1
Tax fees in 2010 include 1.7m relating to the disposal of
Allscripts.
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5. Share-based payments
This note summarises IFRS 2 Share-based payment disclosure requirements for Misys plc share option schemes. During
the year, the share-based payment charge including accrued social security expense was 9.8m (2010: 6.0m) related
to continuing operations and 2.3m (2010: 13.7m) related to the discontinued operation. Excluding social security expense,
the share-based payment charge was 7.4m (2010: 6.3m) related to continuing operations and 2.3m (2010: 12.0m) related
to the discontinued operation.
The following material share-based payment arrangements existed at the end of the year:
Type of arrangement
No.
of options
granted in
2011
000
No.
of options
granted in
2010
000
Fair value
per share of
2011 grant
1
Fair value
per share of
2010 grant
1
Contractual
life
years
Long-Term Incentive Plan 8
Misys 1998 Unapproved Share Option Plan (Type 1) 10
Misys Share Award Plan 15 15 2.71 1.84 10
Misys Senior Executive Bonus Plan 1,112 1,766 1.11 0.67 5
Sharesave (UK) 178 312 1.20 0.79 3
Sharesave (non UK) 122 413 1.17 1.11 3
Transformation Incentive Plan:
TIP (nil cost) 10
TIP (market value) 10
Restricted stock units contract 2
Trustee Share Award 441 2.85 10
CEO Incentive Plan 1,600 1.96 3
Omnibus Share Plan 4,915 6,464 2.09 1.66 3
1 Where several grants were made in the year, the weighted average fair value has been provided.
Details of the Long-Term Incentive Plan (LTIP), the Misys Senior Executive Bonus Plan (MSEBP) and the Transformation Incentive
Plan (TIP) are shown in the Directors remuneration report.
In the years ended 31 May 2009, 2010 and 2011, grants under the Misys Share Award Plan (MSAP) were made to senior
managers at nil cost.
The Sharesave Schemes provide for a yearly award of options at a discount to the market price and are available to all Group
employees.

In the tables below, similar share-based payment arrangements have been aggregated as follows:
Share option schemes nil cost: includes LTIP, MSAP, MSEBP, TIP (nil cost) CEO Incentive Plan and Trustee Share Award;
Share option schemes market value: includes Type 1, TIP (market value) and Omnibus Share Plan; and
Savings-related share option schemes: includes the Sharesave (UK) and Sharesave (non UK) schemes.
Modication of share option schemes
The non-market performance conditions of certain share option schemes were modied during the year to reect the impact of
the return of cash to shareholders following the disposal of Allscripts via a tender offer and B share scheme. This modication
has not resulted in a change to the fair value of the schemes and no additional charge has been expensed during the year as
a result of the modication. The schemes modied were the Omnibus Share Plan, Transformation Incentive Plan, MSEBP,
Share Options, MSAP and Sharesave.
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5. Share-based payments continued
Share-based payment charges
Share-based payment charges are calculated by spreading the fair value of an option over the vesting period having taken into
account any performance conditions when estimating the number of options expected to vest. The vesting period is typically
three years from date of grant or the beginning of the bonus year in respect of grants under the MSEBP.
All options are valued using the Black-Scholes option pricing model except grants under the LTIP and TIP which use the
Monte Carlo option pricing model as they have market performance conditions which are included in the fair value calculation.
The following assumptions have been used in the option pricing models:
Type of arrangement 2011 2010 2009
Risk-free interest rate % 0.6-1.99 0.6-2.2 0.5-5.0
Dividend yield % nil nil nil
Volatility
1
of Misys plc ordinary shares %
Share option schemes nil cost 32-47 41-57 39-65
Share option schemes market value 39-47 42-46 41-61
Savings-related share option schemes 44-46 45-46 38-46
Expected lives (years) of options granted under:
Share option schemes nil cost 1-6.5 1.0-6.5 0.4-6.5
Share option schemes market value 6.5-6.5 3.0-6.5 3.0-6.5
Savings-related share option schemes 3.1-3.3 3.1-3.3 3.1-3.3
1 Expected volatility was calculated using the share price history for the period equivalent to the expected life.
The following additional assumptions have been used for the Monte Carlo option pricing models:
LTIP Total Shareholder Return 2011 2010* 2009
Volatility of the top 30 TechMark companies % 42
Volatility1 of Misys plc ordinary shares % 45
Correlation coefcient 0.30
* There were no options granted during the year that required use of the Monte Carlo option pricing model.
All models incorporate the share price at the date of grant. The weighted average share price of options granted during the year
was 2.86 (2010: 1.87; 2009: 1.27).
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Options outstanding
At 31 May 2011, options and awards outstanding and a reconciliation of movements between balance sheet dates are shown in
respect of the Companys ordinary shares of 1p each under the following schemes:
Share option schemes
nil cost
market value
Savings-related share
option schemes
Number
000
Weighted
fair value
Number
000
Weighted
exercise
price
Weighted
fair value
Number
000
Weighted
exercise
price
Weighted
fair value
At 1 June 2008 10,018 18,156 2.79 1,060 1.81

Options granted 8,871 1.05 2,765 1.23 0.51 688 1.13 0.61
Options exercised (1,259)
Options lapsed or expired (3,134) (6,149) 2.65 (512) 1.84
At 31 May 2009 14,496 14,772 2.55 1,236 1.42
Options granted 7,062 1.76 1,183 1.84 0.64 725 1.44 0.97
Options exercised (2,895) (838) 1.97 (75) 1.90
At 31 May 2010 14,742 10,807 2.55 1,617 1.38
Options granted 5,909 2.35 2,174 3.02 1.29 300 2.34 1.18
Options exercised (4,277) (3,034) 2.23 (213) 1.87
At 31 May 2011 12,034 7,625 2.40 1,519 1.50
Range of exercise prices 1.23-3.43 0.94-2.78
Weighted average
remaining life 4.16 Years 4.65 Years 1.92 Years
The average share price during the year ended 31 May 2011 was 2.99 (2010: 2.08).
Weighted average exercise information is excluded for nil cost schemes.
Options outstanding at 31 May 2011 are further analysed as follows:
nil cost
market value
option schemes
Number
000
Latest
exercise
date
Number
000
Weighted
exercise
price
Latest
exercise
date
Number
000
Weighted
exercise
price
Latest
exercise
date
2002 725 3.40 14/11/2011
2003 173 2.04 25/07/2011
2004 480 2.53 08/03/2012
2005 511 2.04 09/05/2015
2006 10 28/07/2015
2007 797 17/05/2017 1,403 2.18 17/05/2017
2008 245 19/03/2018 485 2.41 10/08/2017 126 1.32 01/01/2012
2009 1,541 28/10/2018 1,010 1.25 12/05/2019 503 1.12 31/12/2012
2010 3,959 10/02/2020 759 1.84 13/08/2019 600 1.46 01/01/2014
2011 5,482 02/09/2020 2,079 3.03 18/08/2020 290 2.35 31/12/2014
12,034 7,625 2.40 1,519 1.50
Options exerciseable
At the balance sheet date, the following options and awards had vested:
nil cost
market value
option schemes
Number
000
Number
000
Weighted
exercise price
Number
000
Weighted
exercise price
2009 305 8,812 3.01 24 1.89

2010 4,204 8,249 2.80
2011 1,182 3,842 2.45 1 1.91
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6. Directors and employees
Directors remuneration
Details of the Directors remuneration are given in the Directors
remuneration report.
Employee costs
Wages and salaries 166.1 162.0
Social security costs 16.0 15.2
Pension costs 5.3 5.1
Share-based payment benets 9.8 6.0
197.2 188.3
The above analysis represents information regarding continuing
operations only. Information regarding the discontinued
operation is given in note 3.
7. Net nance costs
Bank loans and overdraft interest
payable (4.2) (6.7)
Interest payable on convertible bond (2.9)
Amortisation of nancing facility costs (1.3) (2.0)
Expected return on pension scheme
assets (note 27) 2.4 2.4
Interest cost on pension scheme
liabilities (note 27) (2.6) (2.4)
Realised loss on forward currency
exchange contracts (0.9) (0.4)
Unwinding of discount on provisions
(note 24) (1.0) (1.3)
Finance costs (10.5) (10.4)
Exceptional nance income 4.8 1.4
Interest receivable 1.6 0.3
Net nance costs (4.1) (8.7)
An element of the Groups derivatives is ineligible for hedge
accounting under IFRS. Gains or losses on these derivatives
arising from market movements are credited or charged to
nancing fair value re-measurements within nance income
and nance expense in the Group income statement. These
gains or losses are not regarded as part of operating prot as
they relate to nancing activities of the Group.
Details of exceptional nance income are given below:
All gures in millions 2011
Foreign exchange gains and net prots on options
and forward contracts taken out to hedge the
proceeds received from the sale of the Allscripts
stake 11.3
Fair value loss on currency forward contracts and
options taken out to hedge the costs of the
proposed Sophis acquisition (2.5)
Arrangement fees written off relating to term loans
repaid in the period (note 22) (2.7)
Unconditional arrangement fees for new credit
facilities to fund Sophis acquisition incurred prior
to shareholder approval (note 22) (1.3)
Total exceptional nance income 4.8
In the prior year, a credit of 1.4m arose as a result of
supplemental interest on the refund of a VAT claim (see note 2)
which was treated as exceptional.
8. Taxation
Taxation on ordinary activities
Current taxation
UK corporation tax (4.9) (0.2)
UK prior year items (note 2G) 10.7 (0.3)
Overseas taxation (13.3) (10.4)
Overseas prior year items 1.1 3.6
Irrecoverable withholding taxes (2.2) (2.1)
Current taxation (including tax relating
to continuing operations' exceptional
items) (8.6) (9.4)
Deferred taxation (note 25) 10.7 (11.1)
Tax credit (charge) continuing
operations 2.1 (20.5)
The taxation charge before exceptional items was 11.5m
(2010: 12.5m).
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Included within current taxation are credits of 5.7m (2010: 2.8m) in respect of tax on exceptional items, a charge of 1.5m
(2010: 0.4m) in respect of tax on exceptional interest and a credit of 9.4m (2010: charge of 10.8m) in respect of exceptional
tax items (see note 2).
The taxation charge for the current year based on prot before taxation is lower (2010: higher) than the standard rate of
UK corporation tax for the following reasons:
Prot on ordinary activities before taxation 32.2 45.0
Tax on prot on ordinary activities at the standard rate of UK tax of 27.8% (2010: 28%) (8.9) (12.6)
Effects of:
Permanent differences (5.6) (11.7)
Prots arising overseas which are subject to rates of tax other than the UK standard rate (4.4) 3.5
Impact of changes in tax rates (1.5) 0.6
Adjustments to UK taxation charge in respect of prior periods (note 2G) 10.7 (0.3)
Adjustments to overseas taxationcharge in respect of prior periods 1.1 3.6
Effects of deferred tax recognition in respect of temporary differences 15.4 (2.1)
Deferred tax effect of prior periods (2.5) 0.5
Irrecoverable withholding tax (2.2) (2.0)
Total tax credit (charge) 2.1 (20.5)
Total tax credit (charge)
Continuing operations 2.1 (20.5)
Discontinued operation (3.9) (22.7)
(1.8) (43.2)
The total tax charge for the year includes UK prior year adjustments of 10.7m credit (2010: 0.3m charge) which comprises
an exceptional tax credit for 9.4m (2010: nil) (see note 2G) and a non exceptional credit of 1.3m (2010: 0.3m). The charge
also includes a credit for the rst time recognition of deferred tax assets of 15.4m (2010: 2.1m charge). This covers a numbers
of countries where deferred tax assets are now considered likely to be utilised against future prots arising in the corresponding
tax jurisdiction.
A number of changes to the UK Corporation tax system were announced in the March 2011 UK Budget Statement.
Legislation to reduce the main rate of corporation tax from 26% to 25% from 1 April 2012 is expected to be included in the
Finance Act 2011. Further reductions to the main rate are proposed to reduce the rate by 1% per annum to 23% by 1 April 2014.
These further changes had not been substantively enacted at the balance sheet date and are not therefore included in these
nancial statements.
The effect of the changes expected to be enacted in the Finance Act 2011 would be to reduce the deferred tax asset provided at
the balance sheet date by 1.0m. This 1.0m decrease in the deferred tax asset would decrease prot by 0.9m and decrease
other comprehensive income by 0.1m. This decrease in the deferred tax asset is due to the reduction in the corporation tax rate
from 26 per cent to 25 per cent with effect from 1 April 2012.
The proposed reductions of the main rate of corporation tax by 1% per year to 23% by 1 April 2014 are expected to be enacted
separately each year. The overall effect of the further changes from 25% to 23%, if applied to the deferred tax balance at the
balance sheet date, would be to further reduce the deferred tax asset by an additional 1.9m (being 0.9m decrease in prot
and 0.1m decrease in other comprehensive income in 2013 and a further 0.9m decrease in prot in 2014).
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9. Earnings per share
Earnings per share (EPS) have been calculated by dividing prot attributable to shareholders by the weighted average number
of shares in issue during the period. Diluted EPS includes the dilutive effect of outstanding share options.
Adjusted basic and adjusted diluted EPS are presented to provide more comparable and representative information. Accordingly,
the adjusted basic and adjusted diluted EPS gures exclude exceptional items, gains and losses on embedded derivatives,
amortisation of acquired intangibles and translation exchange differences recycled from reserves.
Continuing
operations
Discontinued
operation 2011
Continuing
operations
Discontinued
operation 2010
Prot for the period after tax 34.3 614.7 649.0 24.5 36.9 61.4
Non controlling interest (17.1) (17.1)
Prot attributable to shareholders 34.3 614.7 649.0 24.5 19.8 44.3
Add back:
Exceptional items after taxation (note 2) 2.6 (606.9) (604.3) 15.0 6.3 21.3
(Losses) gains on embedded derivatives (after tax) 3.0 3.0 (1.0) (1.0)
Amortisation of acquired intangibles (after tax) 9.0 3.5 12.5 1.0 9.7 10.7
Translation exchange differences recycled
from reserves (after tax) 0.7 0.7
Adjusted prot items attributable to
non controlling interest (5.1) (5.1) (6.8) (6.8)
Adjusted prot attributable to shareholders 48.9 6.2 55.1 40.2 29.0 69.2
Pence Pence Pence Pence Pence Pence
Basic earnings per share 7.7 138.6 146.3 4.6 3.8 8.4
Diluted earnings per share 7.6 135.7 143.2 4.6 3.6 8.2
Adjusted basic earnings per share 11.0 1.4 12.4 7.6 5.5 13.1
Adjusted diluted earnings per share 10.8 1.4 12.2 7.5 5.3 12.8
The weighted average numbers of basic and diluted shares in issue during the year were 443.5m and 453.1m respectively
(2010: 529.4m and 537.4m).
10. Net interest paid
Interest received 1.7 0.4
Bank loans and overdraft interest paid (5.6) (11.0)
Net cash ow from interest paid (3.9) (10.6)
Net interest paid and recognised within the discontinued operation during the period included in the above was 0.2m (2010: 1.2m).
11. Acquisitions and disposals of businesses
Cash consideration paid in respect of current year acquisitions (211.9)
Cash consideration paid in respect of prior year acquisitions (2.4)
Cash consideration received in respect of current year disposals (net of expenses) 676.4
Cash consideration paid in respect of prior year disposals (0.5)
Net cash ow from acquisitions and disposals 464.5 (2.9)
Net cash outow on current year acquisitions represents the cash consideration paid for the equity interest on the acquisition of
Sophis of 229.9m offset by cash acquired of 18.0m (see note 16).
Cash consideration received in respect of current year disposals represents proceeds on disposal of Allscripts of 764.2m
net of cash held by Allscripts at the time of disposal of 78.4m and disposal costs of 9.4m (see note 3).
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12. Other capital expenditure and nancial investment
Purchase of third party software (2.7) (3.8)
Purchase of acquired intangibles (0.5)
Purchase of property, plant and equipment (5.0) (8.2)
Purchase of investments (1.4) (1.3)
Sale of property, plant and equipment 0.4 0.4
Proceeds on sale of investments 224.3 2.0
Net cash ow from other capital expenditure and nancial investment 215.1 (10.9)
Other capital expenditure and nancial investment recognised within the discontinued operation during the period included in the
above was an outow of 1.9m (2010: 7.4m).
Sale of investment relates to the disposal of the remaining stakes in Allscripts in November 2010 and February 2011.
13. Financing activities
(Decrease) increase in bank borrowings (note 14) (212.2) (68.9)
Capital element of nance leases (0.2) (0.9)
Share options exercised 7.1 3.6
Convertible debt (net of costs) 81.8
Convertible debt equity component 16.1
Premium paid for foreign exchange options regarding Sophis acquisition (6.5)
Sale of hedge option 11.7
Foreign exchange gains on settled transactions 2.0
Arrangement fees for new facility (1.3)
B share scheme redemption of B shares (105.6)
B share scheme dividends paid (33.9)
Return of cash to shareholders (525.0)
Advisory costs and stamp duty on tender offer and B share scheme (5.5)
Net cash ow from nancing activities (771.5) (66.2)
14. Movement in bank borrowings
Repayment of bank loans (250.0) (99.8)
Repayment of Sophis bank loans post acquisition (163.4)
Draw-down of bank facilities 204.0 58.1
Capitalised fees in respect of bank facilities (2.8) (0.2)
Receipt of other loans 0.1
Repayment of other loans (27.1)
Decrease in bank borrowings (212.2) (68.9)
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15. Analysis of net funds (debt)
At
1 June 2010 Cash ow Acquisition Disposals
Non cash
movements
Differences
on exchange
At
31 May 2011
Cash 120.3 3.0 18.0 (78.4) (6.1) 56.8
Bank overdraft (5.4) 5.4
114.9 8.4 18.0 (78.4) (6.1) 56.8
Bank loans (note 22) (112.3) 212.2 (163.4) (4.1) (67.6)
Convertible bond (note 22) (97.9) 14.5 (83.4)
Finance leases (1.7) 0.2 1.4 0.1
Net funds (debt) 0.9 122.9 (145.4) (77.0) 10.4 (6.0) (94.2)
Included in the above amounts are cash balances of 33.9m (2010: 4.3m) not available for the general use of the Group which
include 27.4m (US$ 45.0m) cash collateral for a guarantee relating to potential tax liabilities. This guarantee was put in place as
part of the Allscripts disposal. Prior year balances also include 98.7m related to the discontinued operation which were not
available for general use of the Group due to the sizeable non-controlling interest in Allscripts.
16. Goodwill
Opening cost and net book value 315.5 289.8
Differences on exchange (16.0) 29.1
Acquisition of Sophis 171.6
Disposal of Allscripts (note 3) (240.0)
Adjustment to goodwill (3.4)
Cost and net book value at 31 May 231.1 315.5
Included within the cost and net book value at 31 May 2010 is 256.6m related to the discontinued operation.
Cash generating units
Goodwill relating to the Banking 20.3m (2010: 19.9m), TCM 35.2m (2010: 39.0m) and Misys Sophis 175.6m (2010: nil)
groups of cash generating units (CGUs) are considered signicant in comparison to the total carrying amount of goodwill assets
at 31 May 2011. The recoverable amounts of the Banking, TCM and Misys Sophis CGUs were determined based on value-in-use
calculations and no impairment was identied during the year. Misys Sophis was acquired on 28 February 2011. Management
has reviewed post acquisition trading which was in line with expectation.
Where the recoverable amount of a CGU is determined based on value-in-use calculations, these calculations use pre-tax cash
ows for each CGU based on approved budgets and management forecasts which are consistent with the recent nancial
performance of the relevant CGU. For Banking and TCM value-in-use calculations, it was not necessary to look at cash ows
beyond ve years as cash ows within this time horizon were signicantly in excess of the carrying amounts of the CGUs and
hence no terminal value was assigned. The value-in-use calculation for Misys Sophis includes long term cash ow growth of 2%.
Direct and indirect costs and corporate overheads have been calculated using the same percentage of revenue as for the
recent budget and incorporates planned margin improvement. Management determined budgeted operating margin based
on past performance and its expectations of market development as outlined in the business review section.
Sensitivity analyses have been performed around the base case assumptions with the conclusion that no reasonably possible
changes in key assumptions would cause the recoverable amount to be less than the carrying amount.
For the value-in-use calculations, the rst three years cash ows were based on budget and management forecasts and
thereafter growth rates based on current and expected future performance as reected in the table below.
The following assumptions have been used in order to determine recoverable amounts based on value-in-use calculations:
CGU
Growth rates
for cash ows
years 1-3
Growth rates
for cash ows
years 4-5
Pre-tax
discount rate
2011
Pre-tax
discount rate
2010
Banking 8% 3% 10% 10%
TCM 10% 9% 12% 12%
Misys Sophis 15% 13% 13%
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Acquisition of Sophis
On 28 February 2011, the Group acquired 100% of the issued share capital of Sophis for consideration of 235.5m. As a result
of this acquisition, the Group has established its position as the number one application software and services provider in capital
markets as Misys Sophis buy-side solutions are complementary to the Groups sell-side strengths.
An analysis of the net assets acquired is shown below:
All gures in millions Book value
Provisional
fair value
adjustments
Provisional
fair value at
28 Feb 2011
Intangible assets 212.2 212.2
Property, plant and equipment 1.2 1.2
Deferred tax assets (liabilities) 8.0 (26.5) (18.5)
Cash 18.0 18.0
Other assets 29.5 (1.0) 28.5
External debt (161.8) (1.6) (163.4)
Other liabilities (10.7) (3.4) (14.1)
Net assets acquired (115.8) 179.7 63.9
Goodwill 171.6
Total consideration 235.5
An analysis of the enterprise value of Sophis is shown below:
Consideration paid in cash 208.6
Consideration held in escrow 21.3
External debt net of cash acquired 145.4
Net cash outow on acquisition of subsidiaries 375.3
Equity consideration shares issued 5.6
Enterprise value of Sophis 380.9
The goodwill arising on the acquisition of Sophis is principally attributable to the anticipated protability achieved through
perceived cost and revenue synergies. The fair value adjustments are based on an independent valuation at the time of
acquisition and primarily relate to identied intangible assets (technology, customer relationships and brand name) and related
deferred tax and other taxation.
Acquisition costs of 7.7m have been recognised as an exceptional expense in the current year.
Included in the prot for the year is an 8.6m loss attributable to the additional business generated by the Sophis Group. Had
this business combination been effected at 1 June 2010, the results of the combined Group from continuing operations would
have been revenue of 417.3m, operating prot of 22.2m, adjusted operating prot of 84.4m and prot after tax of 11.0m. The
directors consider these pro-forma numbers to represent an approximate measure of the performance of the combined Group
on an annualised basis and to provide a reference point for comparison in future periods.
In determining the pro-forma revenue and prot of the Group had Sophis been acquired at the beginning of the current
reporting period, the directors have:
calculated depreciation of plant and equipment and intangibles acquired on the basis of the fair values arising in the initial
accounting for the business combination rather than the carrying amounts recognised in the pre-acquisition nancial
statements;
calculated borrowing costs based on the funding levels, credit ratings and debt/equity position of the Group after the business
combination; and
calculated the effect of alignment of accounting policies from 1 June 2010.
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17. Other intangible assets
Complete
technology
Customer
relationships
Trade names
and brands
Total
acquired
intangibles
Developed
software
Third party
software Total
Cost
At 1 June 2010 79.1 73.7 36.2 189.0 95.9 32.6 317.5
Differences on exchange 0.1 (3.8) (1.9) (5.6) (4.2) (1.5) (11.3)
On disposal of Allscripts (58.1) (67.6) (33.9) (159.6) (29.0) (16.8) (205.4)
On acquisition of Sophis 157.0 35.7 19.5 212.2 5.7 0.1 218.0
Transfers 2.6 2.6 (2.6)
Disposals (3.0) (0.4) (3.4)
Additions 0.5 0.5 28.0 2.7 31.2
At 31 May 2011 181.2 38.0 19.9 239.1 93.4 14.1 346.6
Accumulated amortisation and impairment
At 1 June 2010 (31.1) (13.3) (3.3) (47.7) (28.4) (17.0) (93.1)
Differences on exchange 0.6 0.9 0.2 1.7 1.6 0.8 4.1
Charge for the year (10.5) (2.9) (0.7) (14.1) (10.8) (2.4) (27.3)
Transfers (1.2) (1.2) 1.2
On disposal of Allscripts 16.1 13.0 3.5 32.6 4.5 8.2 45.3
Disposals 0.1 0.2 0.3
At 31 May 2011 (26.1) (2.3) (0.3) (28.7) (33.0) (9.0) (70.7)
Net book value
At 31 May 2011 155.1 35.7 19.6 210.4 60.4 5.1 275.9
Complete
technology
Customer
relationships
Trade names
and brands
Total
acquired
intangibles
Developed
software
Third party
software Total
Cost
At 1 June 2009 73.3 66.4 32.5 172.2 76.1 27.6 275.9
Differences on exchange 5.8 7.3 3.7 16.8 5.5 2.0 24.3
Derecognised (17.5) (17.5)
Disposals (0.8) (0.8)
Additions 31.8 3.8 35.6
At 31 May 2010 79.1 73.7 36.2 189.0 95.9 32.6 317.5
Accumulated amortisation and impairment
At 1 June 2009 (22.3) (5.8) (1.3) (29.4) (31.4) (13.0) (73.8)
Differences on exchange (1.0) (1.2) (0.3) (2.5) (2.6) (1.0) (6.1)
Charge for the year (7.8) (6.3) (1.7) (15.8) (11.9) (3.7) (31.4)
Derecognised 17.5 17.5
Disposals 0.7 0.7
At 31 May 2010 (31.1) (13.3) (3.3) (47.7) (28.4) (17.0) (93.1)
Net book value
At 31 May 2010 48.0 60.4 32.9 141.3 67.5 15.6 224.4
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The following prior year balances relate to the discontinued operation:
Complete
technology
Customer
relationships
Trade names
and brands
Total
acquired
intangibles
Developed
software
Third party
software Total
At 31 May 2010
Cost 62.1 72.2 36.2 170.5 24.2 17.9 212.6
Accumulated amortisation (15.5) (12.4) (3.4) (31.3) (3.6) (8.5) (43.4)
Net book value 46.6 59.8 32.8 139.2 20.6 9.4 169.2
Derecognition of 17.5m developed software in the prior year relates to software which has been assessed as having no further
commercial value.
Trade names and brands relate principally to the Sophis brand which is being amortised over 15 years from the date of
acquisition on 28 February 2011. Complete technology relates principally to the core technology underlying the Sophis portfolio
of products and is being amortised over a period of 8 years from the date of acquisition. The fair value of the intangible assets
acquired during the year is based on an independent valuation at the time of acquisition.
18. Property, plant and equipment
Leasehold
property
improvements
Computer
and other
equipment Total
Cost
At 1 June 2010 18.2 55.9 74.1
Differences on exchange (0.9) (3.5) (4.4)
On acquisition of Sophis 1.2 1.2
On disposal of Allscripts (3.9) (25.3) (29.2)
Additions 0.9 4.1 5.0
Disposals (0.5) (2.2) (2.7)
At 31 May 2011 13.8 30.2 44.0
Accumulated depreciation
At 1 June 2010 (6.7) (36.6) (43.3)
Differences on exchange 0.4 2.3 2.7
Charge for the period (1.1) (4.5) (5.6)
On disposal of Allscripts 2.0 14.4 16.4
Impairment (1.6) (0.4) (2.0)
Disposals 0.5 1.8 2.3
At 31 May 2011 (6.5) (23.0) (29.5)
Net book value
At 31 May 2011 7.3 7.2 14.5
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18. Property, plant and equipment continued
Freehold
properties
Leasehold
property
improvements
Computer
and other
equipment Total
Cost
At 1 June 2009 1.5 16.9 47.8 66.2
Differences on exchange 1.1 4.9 6.0
Additions 0.6 9.2 9.8
Disposals (1.5) (0.4) (6.0) (7.9)
At 31 May 2010 18.2 55.9 74.1
Accumulated depreciation
At 1 June 2009 (0.8) (5.0) (31.4) (37.2)
Differences on exchange (0.6) (3.4) (4.0)
Charge for the year (1.5) (7.8) (9.3)
Disposals 0.8 0.4 6.0 7.2
At 31 May 2010 (6.7) (36.6) (43.3)
Net book value
At 31 May 2010 11.5 19.3 30.8
The following prior year balances relate to the discontinued operation:
Leasehold
property
improvements
Computer
and other
equipment Total
At 31 May 2010
Cost 4.1 25.5 29.6
Accumulated depreciation (2.1) (14.3) (16.4)
Net book value 2.0 11.2 13.2
Included in the above analysis is plant and equipment acquired under nance leases with a net book value of nil (2010: 1.6m)
after accumulated depreciation of 0.2m (2010: 3.8m). Prior year balances include net book value of 1.5m after accumulated
depreciation of 3.7m related to the discontinued operation. The net book value of leasehold properties comprised of short
leasehold amounting to 6.5m (2010: 11.5m).
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19. Investments
At 1 June 7.1 6.1
Differences on exchange 0.2
Additions 1.4 1.3
Disposal (0.7)
Impairment and other fair value
movements (0.8) 0.2
On disposal of business (2.2)
Transfer from subsidiary investment 214.1
Fair value movements in Allscripts
investment (0.1)
Disposal of Allscripts investment (214.0)
At 31 May 5.5 7.1
Included within investments at 31 May 2010 is 2.2m related
to the discontinued operation.
The Groups investments comprise investments in US and
European Technology Funds and marketable securities, which
are classied as fair value through prot or loss. Fair value
gains and losses are recognised within operating costs. The
investments are denominated in US dollars and Euros and are
non interest bearing.
Transfer from subsidiary investment relates to the remaining
investment in Allscripts after the disposal in August 2010
(see note 3).
20. Trade and other receivables
Trade receivables 69.4 177.5
Less: provision for impairment
of receivables (4.6) (8.0)
64.8 169.5
Other receivables 10.7 20.4
Prepayments 8.7 27.6
Accrued income 50.2 68.2
Current trade and other receivables 134.4 285.7
Other receivables 5.1 0.8
Prepayments 0.6
Accrued income 3.6 0.2
Non current trade and other receivables 8.7 1.6
Total trade and other receivables 143.1 287.3
The following prior year balances relate to the discontinued
operation:
Trade receivables 111.8
Less: provision for impairment of receivables (5.9)
105.9
Other receivables 7.9
Prepayments 19.6
Accrued income 31.8
165.2
The quality of trade receivables can be assessed by reference
to the historical default rate of 1.3m (2010: 5.0m) for the
preceding 365 days at 0.8% of the opening net trade
receivables balance (2010: 3.7%).
The carrying value of trade receivables that would otherwise
be past due or impaired but whose terms were renegotiated
were 0.2m (2010: nil).
The amount of provision against receivables as at 31 May 2011
was 4.6m (2010: 8.0m). The individually impaired
receivables relate to receivables over 365 days, customers in
nancial difculty, customer acceptance issues and cancelled
contracts.
As at 31 May 2011, trade receivables of 31.2m (2010: 91.0m)
were past due but not impaired. In the table below, these are
the receivables over 30 days. These relate to a number of
independent customers for whom there is no recent history
of default. The ageing analysis of net trade receivables is
as follows:
0-30 days 33.6 78.5
30-60 days 8.0 26.7
60-90 days 8.3 16.2
90-120 days 3.6 16.2
Over 120 days 11.3 31.9
64.8 169.5
The maximum exposure to credit risk at the reporting date is
the fair value of each class of receivable mentioned above.
The Group does not hold any collateral as security.
Movements in the Groups provision for impairment of trade
receivables are as follows:
At 1 June (8.0) (7.4)
Provision for impairment of receivables (2.7) (7.2)
Receivables written off during the year
as uncollectible 1.3 5.0
Unused amounts reversed 1.8 2.2
On acquisition of business (2.2)
On disposal of business 5.2
Foreign exchange and other (0.6)
At 31 May (4.6) (8.0)
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21. Trade and other payables
Trade payables 13.4 28.5
Other taxation and social security 8.6 12.7
Other payables 5.4 5.4
Accruals 61.4 96.3
Current trade and other payables 88.8 142.9
Other payables 0.1 1.2
Accruals 3.8 4.7
Non current trade and other payables 3.9 5.9
Total trade and other payables 92.7 148.8
Accruals comprise:
Cost of sales (excluding staff
related costs) 15.4 48.8
Staff related costs (including sales
commissions and bonuses) 35.9 48.4
Other 13.9 3.8
Total accruals 65.2 101.0
Other accruals include 10.1m (2010: nil) payable to
Allscripts for historical tax matters relating to US Banking
and TCM tax liabilities.
The following prior year balances relate to discontinued
operation:
Trade payables 21.1
Other taxation and social security 4.5
Other payables 1.0
Accruals 45.8
72.4
22. Loans and overdrafts
Bank overdrafts 5.4
Bank loans 17.9 40.0
Finance leases 0.9
Current loans and overdrafts 17.9 46.3
Convertible bond 83.4
Finance leases 0.8
Non current loans and overdrafts 133.1 73.1
Total loans and overdrafts 151.0 119.4
Included within total loans and overdrafts at 31 May 2010 is
1.6m related to the discontinued operation.
Bank overdrafts
This relates to GBP and Euro overdraft facilities.
Bank loans
In November 2010, a new credit facility was agreed comprising
a 90m term loan and a 190m multicurrency credit facility.
The term loan is repayable in installments between May 2011
and August 2014. The revolving facility expires in August 2014.
Initial arrangement fees relating to this facility of 1.3m have
been expensed as an exceptional item being unconditional
arrangement fees for new credit facilities to fund the Sophis
acquisition. The remaining arrangement fees of 2.8m paid
on drawdown are carried on the balance sheet. These costs
are being amortised over the expected term of the facility.
At 31 May 2011, 20m of the term loan had been repaid and
none of the revolving credit facility was being used.
At 31 May 2010, the Group had a 210m credit facility
comprised of an 80m term loan and 130m revolving credit
facility. Both of these were fully repaid by November 2010.
Fees of 2.7m relating to the expired credit facility have been
expensed as an exceptional item as the facility no longer
exists (note 7).
The Group is subject to certain nancial covenants under
the term loan and revolving credit facility agreement. These
include a minimum ratio of operating prot before depreciation,
amortisation and exceptional items to net interest charged
and a maximum ratio of net borrowings to operating prot,
before depreciation, amortisation and exceptional items.
These covenants have not been breached during the year
nor are they forecast to be breached in the foreseeable future.
Convertible bonds
The Company issued 1,000 2.5% convertible bonds at a par
value of 100m on 22 November 2010. The bonds mature
ve years from the issue date at their nominal value of 100m
or can be converted into shares at the holders option from
4 January 2011 until 15 November 2015 at the prevailing
conversion price.
If not previously converted or redeemed, the bonds will be
redeemed at par ve years from the settlement date. The
Company will have the option to call all outstanding bonds
at any time on or after 7 December 2013 if the parity value
on each of at least 20 dealing days in any period of
30 consecutive dealing days on the London Stock Exchange
exceeds 127% of the principal amount.
The values of the liability component and the equity conversion
component were determined at issuance of the bond. The fair
value of the liability component, included in non-current
borrowings, was calculated using a market interest rate for
an equivalent non-convertible bond. The residual amount,
representing the value of the equity conversion option,
is included in shareholders equity in other reserves.
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The amounts charged in the accounts relating to the convertible bonds can be reconciled as follows:
Cash received from issue of bonds 100.0
Less: Cost of issue (2.1)
Proceeds received (note 13) 97.9
Interest accrued on convertible bonds 2.9
Coupon payment made in May 2011 (1.3)
99.5
Disclosed as:
Debt 83.4
Equity 16.1
99.5
23. Derivative nancial instruments
All derivative nancial instruments are measured at their fair value and are calculated by reference to the net present value of future
cash ows, based on exchange rates and interest rates quoted on international nancial markets, at the balance sheet date.
2011 2010
All gures in millions Assets Liabilities Assets Liabilities
Forward foreign currency contracts 0.6 (0.8) 0.2 (0.3)
Embedded derivatives 2.4 (3.1) 5.8 (2.4)
3.0 (3.9) 6.0 (2.7)
Analysed as follows:
Current 1.0 (1.6) 1.1 (0.7)
Non current 2.0 (2.3) 4.9 (2.0)
3.0 (3.9) 6.0 (2.7)
Forward currency contracts used to economically hedge fair value and cash ow risks
Certain nancial assets and liabilities, which are denominated in currencies other than those of the functional currencies of
the entities concerned, are hedged using forward currency contracts. Gains and losses on these contracts are recorded as
operating costs in the income statement together with offsetting gains and losses on the underlying items.
Expected future non-sterling cash ows of the Group are also hedged with forward currency contracts. Hedge accounting is
not applied and the gains and losses are recorded in the income statement under nance income/cost.
Embedded derivatives
Certain long-term software licensing contracts are priced in currencies (usually US dollars, sterling or euros) other than those of
the functional currencies of the customer and IPR holder entering into the contracts or the commonly used functional currency
of that market. Under IAS 39, such contracts may contain an embedded foreign currency derivative which must be extracted
from the host contract and measured separately at each balance sheet date. Gains or losses on these derivatives are charged
or credited to the income statement in operating costs. The contracts are generally of up to 10 years duration and this is
therefore the period over which the assets and liabilities recognised in the balance sheet are expected to crystallise.
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24. Provisions
All gures in millions Property
Contingent
consideration Other Total
At 1 June 2010 22.0 0.2 3.5 25.7
Net provisions (credited) charged to the income statement (1.1) (0.2) 2.1 0.8
Business disposed (0.8) (0.8)
Unwinding of discount 1.0 1.0
Utilisation of provisions (4.6) (2.8) (7.4)
Foreign exchange movements 0.3 (0.3)
At 31 May 2011 16.8 2.5 19.3
Analysis of total provision:
Current 5.5 2.5 8.0
Non current 11.3 11.3
16.8 2.5 19.3
Included within the property provision at 31 May 2010 is 0.8m related to the discontinued operation.
The property provisions comprise the net present value of the estimated future costs of vacant and sublet properties and
the excess rent over market value for occupied properties of subsidiaries acquired in previous years after taking into account
dilapidations. The provision relating to vacant and sublet properties is expected to be utilised on average over the next ve years
and the excess over market value provision over the next one year. During the year, the discount rate applicable to all new
property provisions was 2.75% representing the ve year corporate bond rate (2010: 2.75%).
Included in contingent consideration are amounts relating to various acquisitions. Included in other provisions are amounts
principally in respect of professional fees, maintenance costs and restructuring costs for the current year and non property
related onerous contracts.
25. Deferred taxation
All gures in millions Losses
Other
deductible
temporary
differences Total
At 1 June 2010 36.3 (27.9) 8.4
Credited to the income statement continuing operations (note 8) 10.2 2.0 12.2
Impact of change in tax rates taken to the income statement (note 8) (1.3) (0.2) (1.5)
On disposal of business (23.1) 33.4 10.3
Charged to equity in respect of share-based payments 0.7 2.9 3.6
Credit to equity in respect of IAS 21 movement (4.7) (4.7)
Deferred tax arising on pension 0.4 0.4
Arising on acquisition of business 4.6 (23.1) (18.5)
Currency translation differences 0.2 (2.4) (2.2)
At 31 May 2011 27.6 (19.6) 8.0
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All gures in millions Losses
Other
deductible
temporary
differences Total
At 1 June 2009 49.1 (25.5) 23.6
Charged to the income statement (17.0) (11.9) (28.9)
Impact of change in tax rates taken to the income statement (0.3) 0.9 0.6
Charged to equity in respect of share-based payments 11.9 11.9
Credit to equity in respect of IAS 21 movement (0.1) (0.1)
Currency translation differences 4.5 (3.2) 1.3
At 31 May 2010 36.3 (27.9) 8.4
Certain deferred tax assets and liabilities have been offset. The following is an analysis of the deferred tax balances (after offset)
for nancial reporting purposes:
2011 2010
Losses
Other
deductible
temporary
differences Total Losses
Other
deductible
temporary
differences Total
Deferred tax assets 26.2 9.4 35.6 15.7 3.8 19.5
Deferred tax liabilities 1.4 (29.0) (27.6) 20.6 (31.7) (11.1)
As shown above 27.6 (19.6) 8.0 36.3 (27.9) 8.4
Included within deferred tax liabilities at 31 May 2010 is 10.3m related to the discontinued operation.
Deferred tax assets of 27.6m (2010: 36.3m) have been recognised in respect of carried forward tax losses where latest
forecasts show that these are expected to be recovered against future prot streams. Deferred tax liabilities of 29.0m
(2010: 31.7m) offset by deferred tax assets of 9.4m (2010: 3.8m) have been recognised in respect of other taxable temporary
differences, including 0.1m (2010: nil) in respect of unremitted earnings of subsidiaries of the UK and 26.5m (2010: 0.6m)
relating to intangibles arising on the acquisition of Sophis.
Deferred tax assets recoverable within one year are 7.4m (2010: 1.0m).
Deferred tax assets of 86.8m (2010: 43.2m) relating to tax losses and 0.2m (2010: 6.6m) relating to other deductible
temporary differences have not been recognised on the basis that they are unlikely to be recovered against future prot streams.
In addition, 250.0m (2010: 494.0m) of UK capital losses have been agreed with the UK tax authorities but have not been
recognised as these can only be utilised against specic types of future gains.
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26. Deferred income
Current
Maintenance fees 87.2 115.2
Other income 18.1 51.3
105.3 166.5
Non current
Maintenance fees 2.2 2.2
Other income 3.0 4.4
5.2 6.6
Included within deferred income at 31 May 2010 is 71.6m
related to the discontinued operation.
Deferred maintenance fees represent amounts invoiced in
advance for contracts which provide technical support and
trouble-shooting assistance (helpdesk, etc.) in addition to
upgrades and enhancements to the Groups software products
and hardware maintenance.
Maintenance fees are recognised as revenue rateably as the
services are provided over the period of the contract. Other
deferred income represents amounts invoiced, including
deposits, primarily in respect of initial licence fees for software
products and professional services for which the revenue
recognition criteria have yet to be satised.
27. Retirement benet obligations
Dened contribution schemes
The Group operates a number of dened contribution
pension schemes covering the majority of its employees.
The cost of these pension schemes including 0.5m relating
to Sophis was 4.7m (2010: 4.7m) and was charged to the
income statement as incurred. There were no outstanding or
prepaid contributions at either the beginning or the end of the
nancial year.
Dened benet schemes
In 2003/04, the active members of the UK nal salary scheme
ceased to accrue benets on the basis of their nal salary
during the year. Thereafter the benets of the active members
accrue on a money purchase (dened contribution) basis.
In addition, the Group operates a number of other smaller
dened benet arrangements.
The latest full actuarial valuation of the UK scheme was carried
out as at 31 May 2008; the assumptions of which have been
updated to 31 May 2011 by qualied independent actuaries.
The last full actuarial valuations of the other Group schemes
were carried out on a number of different dates; these
assumptions have been updated to 31 May 2011 by qualied
independent actuaries. A new full actuarial valuation of the
UK scheme is in progress.
The principal assumptions used in the valuations of the
UK scheme only are:
2011
%
2010
%
Rate of increase in salaries n/a n/a
Rate of increase in pensions in payment:
Fixed 3% 3.0 3.0
Fixed 3.5% 3.5 3.5
RPI max 5% min 3% 3.8 3.9
RPI max 5% min 3.5% 4.1 4.1
Post 1988 Guaranteed minimum pension 2.2 2.6
Discount rate 5.4 5.5
Ination assumption 3.6 3.7
Mortality rates (age) Years Years
Current pensioner male 87 89
Current pensioner female 89 91
Future retiree male 89 91
Future retiree female 91 92
The Group employs a building block approach in determining
the long-term rate of return on pension plan assets. Historical
markets are studied and assets with higher volatility are
assumed to generate higher returns consistent with widely
accepted capital market principles. The overall expected rate
of return on assets is then derived by aggregating the expected
return for each asset class over the actual asset allocation for
the Plan at 31 May 2011.
Mortality assumptions are based on 100% of standard S1PxA
year of use tables with allowance for future improvements to be
in line with CMI_2010 Core Projections assuming a long term
rate of future improvement of 1.25% per annum for both males
and females. Mortality assumptions in the prior year were
based on the PxA00 year of use tables. We believe that the
underlying population of the S1PxA tables better reect the
membership of the UK scheme.
The year-end assets and liabilities in the schemes were:
Equities 9.6 5.1
Government bonds 23.0 23.0
Corporate bonds 16.3 17.4
Insurance policies 0.2 0.2
Other 0.1 0.3
Market value of assets 49.2 46.0
Adjustment for unrecoverable surplus (3.5)
Total market value of assets 45.7 46.0
Actuarial value of liabilities (51.9) (50.3)
Decit in the schemes (6.2) (4.3)
Related deferred tax asset 1.6 1.2
Net pension liability (4.6) (3.1)
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Movement in the plan assets and obligations during the year:
Plan assets:
Fair value at 1 June 46.0 39.3
Expected return on plan assets (note 7) 2.4 2.4
Actuarial gain (loss) (1.1) 4.9
Contributions paid by employer 0.6 0.5
Net benets paid out (2.0) (1.3)
Foreign exchange (0.2) 0.2
Fair value at 31 May 45.7 46.0
Benet obligations:
Present value at 1 June (50.3) (41.0)
Current service cost (2.0) (1.7)
Interest cost (note 7) (2.6) (2.4)
Actuarial gain (loss) 0.2 (6.2)
Net benets paid out 2.0 1.3
Business disposals 0.2
Gains arising from curtailments or
settlements 0.2
Foreign exchange 0.4 (0.3)
Present value at 31 May (51.9) (50.3)
Net liability (6.2) (4.3)
An asset of 3.5m (2010: nil) in respect of the UK nal salary
scheme has not been recognised as the Group would not be
able to derive future economic benet from it.
The amounts recognised in the statement of comprehensive
income are as follows:
Current service cost (included in
employee costs) (0.6) (0.4)
Deferred pension costs (included
in investments) (1.4) (1.3)
Interest cost on pension scheme
liabilities (2.6) (2.4)
Expected return on plan assets 2.4 2.4
Included in nance income (0.2)
Gains arising from curtailments
or settlements 0.2
Total income statement expense (0.6) (0.4)
The long term expected rate of return on the UK scheme
assets is 5.1% (2010: 5.1%) and on overseas scheme assets
7.8% (2010: 8.3%).
The actual return on the schemes assets was a gain of 4.7m
(2010: 4.9m).
Total actuarial gains/(losses) 2.6 (3.7)
Change in irrecoverable surplus (3.5) 2.4
Total loss (0.9) (1.3)
Cumulative amount of actuarial
losses recognised (2.2) (1.3)
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27. Retirement benet obligations continued
History of experience gains and losses in the UK scheme:
2011 2010 2009 2008 2007
Experience gains (losses) on schemes assets
Amounts (m) 2.3 2.5 (2.2) (4.5) 3.2
Percentage of schemes assets 4.9% 5.7% 5.5% 10.9% 8.3%
Experience (losses) gains on schemes liabilities
Amounts (m) (0.3) (0.1) 1.6 (2.3)
Percentage of schemes liabilities 0.7% 0.2% 4.3% 5.6%
History of asset values, benet obligation and decit in schemes:
All gures in millions 2011 2010 2009 2008 2007
Fair value of plan assets 45.7 46.0 39.3 42.3 38.2
Dened benet obligation (51.9) (50.3) (41.0) (43.8) (39.3)
Decit in scheme (6.2) (4.3) (1.7) (1.5) (1.1)
The expected contributions to dened benet schemes for the next nancial year beginning 1st June 2011 are 0.5m
(2010: 0.5m).
28. Contingent liabilities
Contingent liabilities that are quantiable arise from property rental guarantees that have been issued in the normal course
of business, from letters of credit and also from bonds that have been issued in support of tenders submitted to prospective
customers. These amount to 3.2m (2010: 19.7m). Included within contingent liabilities at 31 May 2010 is 17.0m related to the
discontinued operation.
The Groups subsidiaries and the Company can be parties to legal actions and claims arising in the ordinary course of business.
Whilst the outcome of current outstanding actions and claims remains uncertain, it is expected that they will be resolved without
a material impact to the Groups nancial position.
At year-end, there was a $45m guarantee in place relating to potential tax liabilities arising as a result of the disposal of Allscripts,
which Misys would be responsible for covering if they were to become payable.
29. Commitments
Commitments of the Group under non cancellable operating leases at 31 May:
2011 2010
Land and
buildings
Plant and
equipment
Land and
buildings
Plant and
equipment
Rental payments due within one year 15.6 0.1 19.7 0.8
Rental payments due between one and ve years 48.8 64.5 0.9
Rental payments due after ve years 33.5 55.6
Total 97.9 0.1 139.8 1.7
Included within commitments at 31 May 2010 is 30.5m for land and buildings and 1.1m for plant and equipment related to the
discontinued operation.
Capital expenditure on property, plant and equipment committed by the Group at 31 May 2011 was 0.4m (2010: 0.2m).
conLnued
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30. Related party transactions
Transactions between Misys plc and its subsidiaries, which are related parties, have been eliminated on consolidation and
are not disclosed in this note.
Remuneration of key management personnel
The key management personnel of the Group comprise the Company Directors and other senior management. Their
remuneration is set out below in aggregate.
Short-term employment benets 6.8 8.3
Post employment benets 0.2 0.2
Termination benets 0.2
Share-based payments benets 6.6 9.0
Included with in the above disclosure at 31 May 2010 is 1.5m in short-term employment benets and 4.3m in share-based
payments benets related to the discontinued operation.
ValueAct Capital has a holding of 67,812,779 shares representing 20.21% (2010: 25.7%) in the Company on an aggregated basis,
which reduced as result of the tender offer on 15 December 2010. Jeff Ubben, who is a non-executive Director of the Company,
is Chief Executive Ofcer and Chief Investment Ofcer of ValueAct Capital. The Company has also considered whether Mike
Lawrie is a related party to ValueAct Capital through his equity shareholding interest, as disclosed in the Directors remuneration
report. As he does not hold a management position within ValueAct Capital nor does his equity shareholding give the right to
signicant inuence over ValueAct Capital, it has been concluded that he is not a related party to ValueAct Capital as dened
by IAS 24 Related Party Disclosure.
31. Called up share capital
The table below reconciles the allotted and fully paid share capital to those shares not held by the Company.
Number of Shares
Allotted, fully
paid share
capital Treasury MEST ESOP Net
At 1 June 2010 594,584,179 (46,477,433) (17,133,515) (103,272) 530,869,959
Shares cancelled during the year (182,150,609) 12,796,552 (169,354,057)
Share consolidation (51,554,197) 3,606,820 2,012,467 12,909 (45,922,001)
Sophis consideration stock 1,626,140 1,626,140
Share options exercised 6,415,383 1,108,687 7,524,070
At 31 May 2011 362,505,513 (23,658,678) (14,012,361) (90,363) 324,744,111
Par value of each share is 1.14 pence. During the year, 6,415,383 (2010: 1,049,481) treasury shares, with a cost of 6.8m
(2010: 0.8m), were utilised to satisfy share awards.
Shareholders approved the return of capital via a Tender Offer of the proceeds of disposal of Allscripts on 13 August 2010.
On 16 December 2010, 169,354,057 ordinary shares were tendered and were repurchased for cancellation at a strike price
of 310 pence per ordinary share, for a total cost of 525 million.
To enable the Company to return the balance of the proceeds from the Allscripts disposal shareholders approved a 146 million
return of share capital, by way of a B share scheme, at the Companys General Meeting on 11 February 2011. 383,579,014
B shares were issued on 14 February 2011. Shareholders owning 89,266,979 B shares elected to receive the initial dividend
payment of 38 pence each and these shares were subsequently converted to deferred shares. The remaining shares were
redeemed at a later date for 38 pence each. The nal redemption date for B shares was 7 April 2011 and all transactions relating
to the B share scheme have now been completed.
The share consolidation, approved as part of the B share scheme, took place on 14 February 2011, when shareholders
exchanged 8 existing ordinary shares of 1p each for 7 new ordinary shares of 1
1
/7 pence each (1.14p).
The Misys Employee Share Trust (MEST) purchases shares in the market using funds contributed by the respective Group
employing companies. These shares are used to satisfy awards made under the Groups share incentive arrangements. At 31 May
2011, the MEST held 14,012,361 (2010: 17,133,515) shares purchased for a cost of 37.9m (2010: 40.6m) and with a market value
of 50.7m (2010: 38.6m). During the year, it utilised shares with a cost of 2.6m (2010: 6.6m) to satisfy share awards.
The Employee Share Ownership Plan (ESOP) purchases shares in the market using funds loaned by the Company. Share
purchases are timed to ensure that the ESOP has sufcient shares to satisfy its requirements as and when its obligations fall due.
The Trustees of the ESOP have waived its rights to dividends. At 31 May 2011, the ESOP held 90,363 (2010: 103,272) shares,
purchased for a cost of 0.2m (2010: 0.2m) and with a market value of 0.3m (2010: 0.2m).
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32. Other reserves
Retained
earnings
Convertible
bond reserve
Treasury
shares Own shares
Translation
reserve Total
At 1 June 2010 285.1 (94.1) (40.7) 43.5 193.8
Total comprehensive income for the period 643.8 2.1 645.9
Transactions with owners:
Share options settled from own shares (10.1) 13.5 2.7 6.1
Convertible bond equity component 16.1 16.1
Business disposed (39.9) (39.9)
Shares repurchased for cancellation (525.0) (525.0)
B share scheme dividends paid (33.9) (33.9)
B share scheme redemption of B shares (105.6) (105.6)
Expenses incurred on transactions with owners (5.5) (5.5)
Share-based payments 9.7 9.7
Deferred tax on share-based payments 3.6 3.6
At 31 May 2011 262.1 16.1 (80.6) (38.0) 5.7 165.3
Retained
earnings
Convertible
bond reserve
Treasury
shares Own shares
Translation
reserve Total
At 1 June 2009 224.1 (96.3) (47.3) 4.7 85.2
Total comprehensive income for the period 43.3 38.8 82.1
Conversion of Allscripts 3.5% senior convertible
debentures 3.5 3.5
Deferred tax on share-based payments 7.2 7.2
At 31 May 2010 285.1 (94.1) (40.7) 43.5 193.8
Own shares reserve relates to Misys Employee Share Trust and Employee Share Ownership Plan (see note 31).
The Misys Employee Share Trust was a beneciary of the B share scheme and received funds of 6.2m. This income in MEST
has been netted against the redemption of B shares expense within retained earnings.
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33. Financial instruments: risk management
Misys operates a centralised treasury function which is responsible for managing the liquidity, interest and foreign currency
risks associated with the Groups activities under policies approved by the Board of Directors. As part of its strategy for the
management of these risks, the Group uses derivative nancial instruments. In accordance with the Groups treasury policy,
derivative instruments are not entered into for speculative purposes. Treasury policy is reviewed and approved by the Board and
species the parameters within which treasury operations must be conducted, including authorised counterparties, instrument
types, transaction limits and principles governing the management of liquidity, interest and foreign currency risks.
The Groups principal nancial instruments, other than derivatives, are cash, short term deposits, bank loans, overdrafts, trade
and other receivables and trade and other payables. The main purpose of these nancial instruments is to raise nance for the
Groups operations.
Foreign exchange risk
The Group operates internationally and is exposed to foreign exchange risk arising from various currency exposures. Foreign
exchange risk arises from future commercial transactions, recognised assets and liabilities and net investment in foreign
operations.
Management has established a policy requiring Group companies to manage their foreign exchange risk against their functional
currency. Group companies are required to hedge on a monthly basis. Group Treasury nets and consolidates the global
prescribed hedges in the market with external forward contracts. Additionally, Group Treasury reviews the actual non-sterling
exposure cushion of the Group and hedges those exceeding the levels set by the Group foreign exchange policy with external
forward contracts.
The Groups net exposure to foreign currency risk is illustrated by the sensitivity analysis in note 37.
Interest rate risk
The Group is exposed to cash ow interest rate risk on oating rate bank loans, overdrafts and cash held on deposit. The
Groups borrowings are primarily at variable interest rates set for periods of six months or less. Based on the various scenarios,
the Group manages its cash ow interest rate risk by using interest rate hedging instruments such as caps or swaps which
are used to protect the Group against signicant increases in interest rates. Under the interest rate swap, the Group agrees
with other parties to exchange, at specied intervals, the difference between the specied swap rate and oating rate interest
amounts calculated by reference to the agreed notional amounts.
The Groups cash balances are kept in interest bearing current accounts and on short-term deposit to maximise the level of
return while maintaining an adequate level of liquidity. The Group does not generally invest surplus funds in long-term xed
interest securities and therefore its exposure to fair value interest rate risk is not generally signicant.
The Groups net exposure to interest rate risk is illustrated by the sensitivity analysis in note 37.
Credit risk
Credit risk arises from cash and cash equivalents, derivative nancial instruments and deposits with banks and nancial
institutions but primarily from outstanding trade receivables and committed transactions. The Group has policies in place
to ensure that sales are made to customers with an appropriate credit history.
Derivative and cash transactions are limited to high-quality nancial institutions. The Group has policies that limit the amount
of credit exposure to any nancial institution. For customer contracts, the Group and each reporting subsidiary have specied
risk control and authorisation procedures in place to assess the credit quality of a customer. Where there is no independent
risk rating for a customer, such an assessment takes into account nancial position, past experience and other factors.
The Group has no signicant concentrations of credit risk, with exposures spread over a large number of customers and
counterparties.
Liquidity risk
The Group manages its cash and borrowing requirements centrally to minimise net interest expense within risk parameters
set by the Board, whilst ensuring that the Group has sufcient liquid resources to meet the operating needs of the business.
The long-term forecast cash and borrowings prole of the Group is monitored to ensure that adequate headroom remains
under current and projected committed borrowing facilities.
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33. Financial instruments: risk management continued
The table below shows the maturity analysis of the undiscounted remaining contractual cash ows of the Groups non-derivative
nancial liabilities.
Less than
one year 1 to 2 years 2 to 5 years Over 5 years
2011
Total
Bank loans and overdrafts 23.3 22.9 32.9 79.1
Convertible bond 2.5 2.5 106.2 111.2
Trade and other payables 74.8 0.4 1.1 2.4 78.7
Other liabilities 4.2 0.3 4.5
Total cash ows 104.8 25.8 140.2 2.7 273.5
Less than
2010
Total
Bank loans and overdrafts 49.4 78.5 127.9
Trade and other payables 124.9 0.6 1.3 2.7 129.5
Finance lease liabilities 0.9 0.4 0.4 1.7
Other liabilities 4.7 1.2 5.9
Total cash ows 179.9 80.7 1.7 2.7 265.0
The table below analyses the Groups outow and inow from derivative nancial instruments into relevant maturity groupings
based on the remaining contractual maturity period at the balance sheet date. The amounts disclosed in the table are the
contractual undiscounted cash ows.
Less than
2011
Total
Derivative nancial instruments (gross settled)
inows (1.0) (1.0) (1.0) (3.0)
outows 1.6 1.6 0.7 3.9
Total cash ows 0.6 0.6 (0.3) 0.9
Less than
2010
Total
Derivative nancial instruments (gross settled)
inows (1.1) (1.1) (3.8) (6.0)
outows 0.7 0.6 1.4 2.7
Total cash ows (0.4) (0.5) (2.4) (3.3)
Capital risk
The capital structure of the Group consists of debt and equity attributable to equity holders of the Company, comprising issued
capital, reserves and retained earnings as shown in the consolidated statement of changes in equity and note 32. The Group
manages its capital with the objective that all entities within the Group continue as a going concern while maintaining an efcient
structure to minimise the cost of capital.
In order to maintain or adjust the capital structure, the Group may adjust the amount of dividends paid to shareholders,
return capital to shareholders, issue new shares or sell assets to reduce debt. During the year a return of capital was made
to shareholders as described in note 31.
The Group is subject to certain nancial covenants on its funding facility and monitors capital largely on this basis. This includes
a maximum ratio of net borrowings to operating prot before depreciation, amortisation and exceptionals (EBITDA) of 3 times
and a minimum ratio of EBITDA to net interest of 5.0 times. At 31 May 2011, the net borrowings to adjusted EBITDA ratio was
1.3 (2010: 1.2) times and EBITDA to net interest payable ratio (as dened in the loan agreement) was 15.4 (2010: 9.6). The
covenants were met throughout the year.
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34. Financial instruments
The Group uses derivative instruments in order to manage foreign currency exchange risk arising from future commercial
transactions, recognised assets and liabilities. The Group is also exposed to cash ow interest rate risk from oating rate
bank loans, overdrafts and cash held on deposit.
Forward foreign exchange contracts
The fair value of foreign exchange derivatives at 31 May 2011 was a net liability of 0.2m (2010: 0.1m).
35. Financial instruments: categories
Fair value
hierarchy
1
Fair value
through P&L
Loans &
receivables
Amortised
cost
Not a
nancial
instrument
2
Current Non-current
At 31 May 2011
Financial assets
Investments Level 1 3.9 3.9
Derivative nancial instruments Level 2 3.0 1.0 2.0
Trade and other receivables 134.4 8.7 134.4 8.7
Cash and cash equivalents 56.8 56.8
8.5 191.2 8.7 192.2 16.2
Financial liabilities
Derivative nancial instruments Level 2 (3.9) (1.6) (2.3)
Borrowings (151.0) (17.9) (133.1)
Trade and other payables (83.1) (9.6) (88.8) (3.9)
(3.9) (234.1) (9.6) (108.3) (139.3)
Fair value
hierarchy
1
Fair value
through P&L
Loans &
receivables
Amortised
cost
Not a
nancial
instrument
2
Current Non-current
At 31 May 2010
Financial assets
Derivative nancial instruments Level 2 6.0 1.1 4.9
Trade and other receivables 259.0 28.3 285.7 1.6
Cash and cash equivalents 120.3 120.3
13.1 379.3 28.3 407.1 13.6
Financial liabilities
Derivative nancial instruments Level 2 (2.7) (0.7) (2.0)
Borrowings (119.4) (46.3) (73.1)
Trade and other payables (135.5) (13.3) (142.9) (5.9)
(2.7) (254.9) (13.3) (189.9) (81.0)
1 Fair value hierarchy shows the fair value measurement categories as described below.
2 Assets that do not qualify as a nancial instrument include prepayments of 8.7m (2010: 28.3m). Liabilities that do not qualify as nancial instruments are
tax and other social security payments of 9.6m (2010: 13.3m).
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35. Financial instruments: categories continued
Fair value measurement hierarchy
Fair value measurements of nancial instruments (where
relevant) are classied using the following fair value hierarchy
which reects the signicance of the inputs used in making
the measurements:
Level 1 quoted prices (unadjusted) in active markets for
identical assets or liabilities;
Level 2 input other than quoted prices included within
Level 1 that are observable for the asset or liability, either
directly (i.e. as prices) or indirectly (i.e. derived from prices); and
Level 3 inputs for the asset or liability that are not based on
observable market data (unobservable inputs).
The fair value of nancial instruments traded in active markets
is based on quoted market prices at the close of business
on the balance sheet date. A market is regarded as active
if quoted prices are readily and regularly available from an
exchange, dealer, broker, industry group, pricing service or
regulatory agency and those prices represent actual and
regularly occurring market transactions on an arms length
basis. The quoted market price used for nancial assets
held by the Group is the current bid price. These instruments
are included in Level 1 and comprise investments in quoted
marketable securities.
The fair value of nancial instruments that are not traded in
an active market (for example, over-the-counter derivatives)
is determined by using valuation techniques. The valuation
techniques maximise the use of observable market data
where it is available and rely as little as possible on entity
specic estimates. If all signicant inputs required to fair
value an instrument are observable, the instrument is
included in Level 2.
Specic valuation techniques used to value nancial
instruments include:
Quoted market prices;
Forward exchange rates; and
External consultants valuations.
Financial assets
Cash and cash equivalents primarily comprise cash deposits
and investments. Cash which bears interest at nominal rates
comprises 13.5m (2010: 6.1m) denominated in sterling,
32.4m (2010: 103.8m) in US dollars, 1.8m (2010: 16.0m)
in euros and 9.1m (2010: 6.8m) in other currencies.
36. Financial instruments: fair values
The fair values of each category of the Groups nancial
instruments approximate to their carrying values in the Groups
balance sheet.
37. Financial instruments: sensitivity analysis
Foreign currency sensitivity analysis
The Groups principal foreign currency exposures are to
the US Dollar and the Euro. The table below illustrates the
hypothetical sensitivity of the Groups reported prot and equity
to a 10% increase and decrease in the US Dollar/Sterling and
Euro/Sterling exchange rates at the year-end date, assuming
all other variables remain unchanged. The sensitivity rate of
10% represents the Directors assessment of a reasonably
possible change for the foreseeable future.
Income statement
Sterling strengthens by 10%
US Dollar (2.8) 0.4
Euro 2.5 (2.0)
Sterling weakens by 10%
US Dollar 2.8 (0.4)
Euro (2.5) 2.0
Year-end exchange rates applied in the above analysis
are US Dollar 1.64 (2010: 1.45) and Euro 1.14 (2010: 1.18).
Interest rate sensitivity analysis
The table below illustrates the hypothetical sensitivity of the
Groups reported prot to a 0.5% increase or decrease in
interest rates, assuming all other variables were unchanged.
The sensitivity rate of 0.5% represents the Directors
assessment of a reasonably possible change for the
foreseeable future.
Income statement
Interest rate increase of 0.5% (0.3) (0.6)
Interest rate decrease of 0.5% 0.3 0.6
38. Principal subsidiary undertakings
Information on the principal subsidiary undertakings included in
the consolidated accounts at 31 May 2011 is provided in note E
of the Company accounts.
39. Events after the reporting period
On 21 June 2011, the Board announced that it had received
a preliminary approach that may or may not lead to an offer
being made for the Company.
On 23 June 2011, Fidelity National Information Services, Inc.
conrmed that it had made a preliminary approach regarding
a possible cash offer for Misys plc.
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Audt onon for the Msys lc
Parent Comany only
Independent auditors report to the members of Misys plc
Introduction
We have audited the Company nancial statements of Misys
plc for the year ended 31 May 2011 which comprise the
Company balance sheet and the related notes. The nancial
reporting framework that has been applied in their preparation
is applicable law and United Kingdom Accounting Standards
(United Kingdom Generally Accepted Accounting Practice).
Respective responsibilities of Directors and auditors
As explained more fully in the Directors Responsibilities
Statement set out on page 74, the Directors are responsible for
the preparation of the Company nancial statements and
for being satised that they give a true and fair view. Our
responsibility is to audit and express an opinion on the
Company nancial statements in accordance with applicable
law and International Standards on Auditing (UK and Ireland).
Those standards require us to comply with the Auditing
Practices Boards Ethical Standards for Auditors.
This report, including the opinions, has been prepared for and
only for the Companys members as a body in accordance
with Chapter 3 of Part 16 of the Companies Act 2006 and for
no other purpose. We do not, in giving these opinions, accept
or assume responsibility for any other purpose or to any other
person to whom this report is shown or into whose hands it
may come save where expressly agreed by our prior consent
in writing.
Scope of the audit of the nancial statements
An audit involves obtaining evidence about the amounts
and disclosures in the nancial statements sufcient to give
reasonable assurance that the nancial statements are free
from material misstatement, whether caused by fraud or error.
This includes an assessment of: whether the accounting
policies are appropriate to the Companys circumstances and
have been consistently applied and adequately disclosed;
the reasonableness of signicant accounting estimates made
by the Directors; and the overall presentation of the nancial
statements. In addition, we read all the nancial and non-
nancial information in the annual report to identify material
inconsistencies with the audited nancial statements. If we
become aware of any apparent material misstatements or
inconsistencies we consider the implications for our report.
Opinion on nancial statements
In our opinion, the Parent Company nancial statements:
give a true and fair view of the state of the Companys affairs
as at 31 May 2011;
have been properly prepared in accordance with United
Kingdom Generally Accepted Accounting Practice; and
have been prepared in accordance with the requirements
of the Companies Act 2006.
Opinion on other matters prescribed by the
Companies Act 2006
In our opinion:
the part of the Directors remuneration report to be
audited has been properly prepared in accordance with
the Companies Act 2006; and
the information given in the Directors Report for the
nancial year for which the Company nancial statements
are prepared is consistent with the Company nancial
statements.
Matters on which we are required to report by exception
We have nothing to report in respect of the following matters
where the Companies Act 2006 requires us to report to you if,
in our opinion:
adequate accounting records have not been kept by
the Company, or returns adequate for our audit have not
been received from branches not visited by us; or
the Company nancial statements and the part of the
Directors remuneration report to be audited are not in
agreement with the accounting records and returns; or
certain disclosures of Directors remuneration specied by
law are not made; or
we have not received all the information and explanations
we require for our audit.
Other matter
We have reported separately on the Group nancial statements
of Misys plc for the year ended 31 May 2011.
Giles Hannam (Senior Statutory Auditor)
for and on behalf of PricewaterhouseCoopers LLP
Chartered Accountants and Registered Auditors
London
28 July 2011
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Comany balance sheet
us uL Muy .o
Non current assets
Tangible xed assets D 4.7 6.5
Investments in subsidiary undertakings E 460.0 89.2
Amounts due from subsidiary undertakings 750.8 758.7
Deferred tax asset F 5.9
1,221.4 854.4
Current assets
Debtors G 50.2 67.3
Derivative nancial instruments H 0.9 0.4
Cash at bank and in hand 39.6 12.6
90.7 80.3
Creditors falling due within one year
Loans and overdrafts I (17.9) (45.4)
Derivative nancial instruments H (1.1) (0.4)
Other creditors J (99.0) (62.2)
Provisions for liabilities and charges K (0.7) (1.2)
(118.7) (109.2)
Net current liabilities (28.0) (28.9)
Total assets less current liabilities 1,193.4 825.5
Creditors falling due after more than one year
Bank loans I (133.1) (72.3)
Amounts due to subsidiary undertakings (812.0) (450.4)
Accruals (3.6) (4.1)
Provisions for liabilities and charges K (0.8) (3.0)
Retirement benet obligations M (0.2)
Net assets 243.9 295.5
Equity
Called up share capital O 4.3 5.9
Share premium account O 12.7 151.9
Capital redemption reserve O 147.7 0.3
Other reserves P 79.2 137.4
Equity shareholders' funds 243.9 295.5
Mike Lawrie
28 July 2011
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Notes to the Comany nancal statements
A. Accounting convention and policies
Accounting convention
The nancial statements have been prepared on a going
concern basis which the Directors believe to be appropriate.
The Company is in a net asset position and has net current
assets after excluding intercompany balances. The nancial
position and resources of the Misys Group are sufcient to
support the going concern basis for the Company.
The nancial statements have been prepared under the
historical cost convention, except as described under the
headings share incentive schemes and derivative nancial
instruments and hedge accounting, and in accordance with
the applicable UK Accounting Standards, the Companies Act
2006 and the accounting policies set out below.
Share incentive schemes
The Group operates several equity settled, share-based
compensation plans. The fair value of the employee services
received in exchange for the grant of the options is recognised
as an expense.
The total amount to be expensed over the vesting period
is determined by reference to the fair value of the options
granted, excluding the impact of any non-market vesting
conditions (for example, protability and sales growth targets).
Non-market vesting conditions are included in assumptions
about the number of options that are expected to become
exercisable.
At each balance sheet date, a revised estimate is made of the
number of options that are expected to become exercisable.
If the revised estimate differs from the original estimate, the
charge to the income statement is adjusted over the remaining
vesting period of the options.
The social security contributions payable in connection with
the grant of the share options is considered an integral part of
the grant itself, and the charge will be treated as a cash-settled
transaction.
The share-based payment charge is recharged as an expense
to the relevant employing subsidiary. Full details of the share
incentive schemes are disclosed in the Directors remuneration
report and note 5 of the Group accounts.
Leases
Rentals paid under operating leases are charged to income
on a straight line basis over the lease term.
Taxation
Taxation that is chargeable on the prots for the period,
together with deferred taxation using tax rates enacted or
substantively enacted at the balance sheet date. Deferred
taxation is provided in full on timing differences which result
in obligation at the balance sheet date to pay more tax or
the right to pay less tax at a future date. Timing differences
arise from the inclusion of items of income and expenditure
in taxation computations in periods different from those in
which they are included in the nancial statements. Deferred
tax assets are recognised to the extent that they are likely
to be recovered. Deferred tax assets and liabilities are not
discounted.
Fixed assets
Fixed assets are stated at cost less accumulated depreciation.
Cost includes the original purchase price of the asset and the
cost attributable to bringing the asset to its working condition
for its intended use. Depreciation is calculated on a straight line
basis so as to write off the cost, less estimated residual value
of each asset, over its expected useful life. The residual values
and useful economic lives of xed assets are reviewed annually.
Freehold land is not depreciated. The useful lives by major
class of asset applied from the date of purchase are:
5-15 years or the period
Leasehold improvements of the lease if shorter
Computer and other equipment 4-10 years
Investments
Investments are shown at cost less any provision considered
necessary for impairment. The need for any impairment
write-down is assessed by comparison of the carrying value
of the asset against the higher of net realisable value or value in
use. The value in use is determined from estimated discounted
future cash ows. Discount rates used are based on the cost
of capital of the Company.
Bank loans and overdrafts
Bank loans and overdrafts are initially recognised at fair
value less directly attributable transaction costs and are
interest method. The difference between the proceeds (net of
transaction costs) and the redemption value is recognised in
the prot and loss account over the period of the borrowings.
Foreign currencies
The Company translates foreign currency transactions into
its own functional currency at rates ruling at the date of each
transaction. Foreign currency monetary assets and liabilities
are retranslated at rates ruling at the balance sheet date
and currency translation differences are recognised in the
income statement.
Derivative nancial instruments and hedge accounting
Derivatives are initially recognised at fair value on the date
a derivative contract is entered into and are subsequently
remeasured at fair value. The method of recognising the
resulting gain or loss depends on whether the derivative is
designated as a hedging instrument and, if so, the nature of
the item being hedged. Changes in the fair value of derivative
nancial instruments, where they are not designated as hedging
instruments, are recognised in the prot and loss account.
Pensions
The Company has a closed funded dened benet pension
scheme in the UK, as well as a number of other smaller dened
benet arrangements outside the UK.
The remaining active members of the closed UK dened
benet scheme now contribute to a dened contribution
section of the scheme and do not accrue further benets
under the dened benet scheme. Full independent actuarial
valuations are carried out on a regular basis and updated to
each balance sheet date. The assets of the schemes are held
separately from those of the Company.
Pension scheme assets are measured using bid market values.
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A. Accounting convention and policies continued
Pension scheme liabilities are measured using a projected
unit method and discounted at the current rate of return on a
high quality corporate bond of equivalent term and currency
to the liability. The pension scheme surplus (to the extent that
it is recoverable) or decit is recognised in full on the balance
sheet. Any current or past service cost is recognised in the
income statement. The net of the expected increase in the
present value of the schemes liabilities, and the Companys
long-term expected return on its schemes assets, are included
in the income statement.
Hedge accounting
The business activities of the Group expose it to nancial risks
that arise from changes in both foreign exchange rates and
interest rates. The Company, on behalf of the Group, uses
forward currency contracts and interest rate swaps to hedge
these exposures. In accordance with its treasury policy, the
Group does not enter into derivatives for speculative purposes.
The Group designates certain derivatives as either:
a) hedges of the fair value of recognised assets or liabilities
or a rm commitment (fair value hedges); or
b) hedges of a particular risk associated with a recognised
asset or liability or a highly probable forecast transaction
(cash ow hedge).
Changes in the fair value of derivative nancial instruments that
are designated and effective as hedges of future cash ows
are recognised directly in equity and any ineffective portion
is recognised immediately in the prot and loss account.
Conversely, if the item being hedged is a nancial asset or
liability, any amounts arising from changes in fair value that
are deferred in equity are subsequently recognised in the
prot and loss account in the same accounting period in
which the hedged item affects net income.
Changes in the fair value of derivative nancial instruments,
where they are not designated as effective hedges of future
cash ows, are recognised in the prot and loss account. Any
changes in the fair value of the underlying transaction are also
recognised in the prot and loss account. Where a nancial
instrument does not qualify for hedge accounting, any changes
in the fair value are recognised in the prot and loss account
as it arises.
Under these circumstances, any cumulative gain or loss on
the hedging instrument, which has already been recognised
in equity, is retained in equity until the transaction occurs.
However, if a hedged transaction is no longer expected to
occur, any net cumulative gain or loss that has already been
recognised in equity is immediately transferred to the prot
and loss account.
Provisions
Provisions are recognised when the Company has a present
legal or constructive obligation as a result of past events and
it is probable that an outow of resources will be required
to settle the obligation and if this amount is capable of being
reliably estimated. If such an obligation is not capable of being
reliably estimated, no provision is recognised and the item is
disclosed as a contingent liability where material.
Provision for onerous lease commitments on property
contracts is based on an estimate of the net unavoidable lease
and other payments in respect of these properties including
dilapidation costs. These comprise rental and other property
costs payable, plus any termination costs, less any income
expected to be derived from the properties being sublet.
The provisions are discounted at an appropriate rate to
take into account the effect of the time value of money.
Cash ow disclosure
The Company is included within the consolidated nancial
statements of Misys plc, which are publicly available.
Consequently, the Company has taken advantage of the
exemption from preparing a cash ow statement under
the terms of FRS 1 (revised 1996) Cash ow statements.
B. Prot for the year
As permitted by section 408 of the Companies Act 2006,
the prot and loss account of the Company is not presented
as part of these nancial statements. The prot attributable
to shareholders for the year is 582.9m (2010: 19.3m loss),
which includes auditors remuneration of 0.2m (2009: 0.1m).
Included within the current year gain is 607.0m of dividends
received from Group companies as part of the corporate
restructuring programme.
C. Commitments
Commitments of the Company under non cancellable
operating leases at 31 May:
Annual payments expiring after 5 years 4.1 4.1
All operating lease commitments relate to land and buildings. The
Company has no capital commitments at 31 May 2011 (2010: nil).
D. Tangible xed assets
Cost
At 1 June 7.5 8.8
Additions 0.1 0.2
Disposals (0.3) (1.5)
At 31 May 7.3 7.5
Depreciation and impairment
At 1 June (1.0) (1.3)
Charge for the year (1.9) (0.5)
Disposals 0.3 0.8
At 31 May (2.6) (1.0)
Net book value
At 31 May 4.7 6.5
Included in the above analysis are disposals of nil (2010:
1.5m) relating to freehold land and properties; costs of
6.3m (2010: 6.3m), additions of 0.1m (2010: 0.2m) and
accumulated depreciation of 2.4m (2010: 0.8m) relating
to leasehold improvements; and cost of 1.0m (2010: 1.2m),
disposals of 0.3m (2010: nil) and accumulated depreciation
of 0.2m (2010: 0.2m) relating to xtures and ttings.
conLnued
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E. Tangible xed assets
Cost
At 1 June 93.4 93.8
Additions 376.3 0.1
Disposals (5.5)
Transfer to other Group company (0.5)
At 31 May 464.2 93.4
Provisions for impairment
At 1 June and 31 May (4.2) (4.2)
Net book value
At 31 May 460.0 89.2
Principal subsidiary undertakings
The Company is the benecial owner of and has 100% of the nominal value and voting rights over all the equity share capital,
through subsidiary undertakings, of the following principal operating subsidiary undertakings within Banking, TCM and Misys
Sophis. These develop and licence application software products to customers in well dened vertical markets together with
undertaking transaction processing, professional services and e-commerce activities:
Company name
Country of incorporation
and operation Markets served
Banking and TCM
Misys International Banking Systems GmbH Germany Global products and services
Misys International Banking Systems Inc USA in the following areas:
Misys International Banking Systems Limited England and Wales Retail and international branch banking
Misys International Banking Systems Limited Republic of Ireland Transaction banking
Misys International Banking Systems Limited Hong Kong Treasury and capital markets
Misys International Financial Systems Pte Limited Singapore Enterprise-wide market and credit risk management
Misys International Banking Systems SA France Software integration technology
Misys International Banking Systems SA Luxembourg
Misys Software Solutions (India) Private Limited India
Summit Systems SA France
Summit Systems Inc USA
Summit Systems International Limited England and Wales
Kapiti Limited England and Wales
Misys IQ Limited England and Wales
Misys Philippines Inc Philippines
Sophis
Sophis Technology (Ireland) Limited Republic of Ireland Portfolio and risk management services in the
following areas:
Investment banks
Treasury and capital markets
Hedge funds
Asset managers
Pension funds
In addition to the companies shown above, the Group also holds investments in a number of other subsidiary undertakings,
which in the Directors opinion do not signicantly affect the gures in the consolidated nancial statements. Details of all Group
companies will be annexed to the Companys next annual return in compliance with section 409 and 410 and Parts I and II of
Schedule 4 of the Companies Act 2006.
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F. Deferred tax assets
In the current year, there is a deferred tax asset of 5.9m
(2010: nil) relating to tax losses (4.9m) and other timing
differences (1.0m). The amount of 5.9m was credited
to the prot and loss account. Deferred tax assets have been
recognised in respect of carried forward tax losses where
latest forecasts show that these are expected to be recovered
against future prot streams.
G. Debtors falling due within one year
Amounts due from subsidiary
undertakings 48.7 56.2
Other debtors 0.3 3.4
Corporation tax 7.3
Prepayments 1.2 0.4
Total 50.2 67.3
H. Derivative nancial instruments
all gures in millions Assets
2011
Liabilities Assets
2010
Liabilities
Forward foreign
currency contracts 0.9 (1.1) 0.4 (0.4)
I. Loans and overdrafts
Total falling due within one year 17.9 45.4
Bank loans payable within two
to ve years 49.7 72.3
Convertible bond 83.4
Total falling due after more
than one year 133.1 72.3
Total 151.0 117.7
Bank loans
In November 2010, a new credit facility was agreed comprising
a 90m term loan and a 190m multicurrency credit facility.
The term loan is repayable in installments between May 2011
and August 2014. The revolving facility expires in August 2014.
Initial arrangement fees relating to this facility of 1.3m have
been expensed as an exceptional item being unconditional
arrangement fees for new credit facilities to fund the Sophis
acquisition. The remaining arrangement fees of 2.8m paid
on drawdown are carried on the balance sheet. These costs
are being amortised over the expected term of the facility.
At 31 May 2011, 20m of the term loan had been repaid
and none of the revolving credit facility was being used.
At 31 May 2010, the Group had a 210m credit facility
comprised of an 80m term loan and 130m revolving credit
facility. Both of these were fully repaid by November 2010.
Fees of 2.7m relating to the expired credit facility have been
expensed as an exceptional item as the facility no longer exists.
Convertible bonds
The Company issued 1,000 2.5% convertible bonds at a par
value of 100m on 22 November 2010. The bonds mature
ve years from the issue date at their nominal value of 100m
or can be converted into shares at the holders option from
4 January 2011 until 15 November 2015 at the prevailing
conversion price.
If not previously converted or redeemed, the bonds will
be redeemed at par ve years from the settlement date.
The Company will have the option to call all outstanding
bonds at any time on or after 7 December 2013 if the parity
value on each of at least 20 dealing days in any period of
30 consecutive dealing days on the London Stock Exchange
exceeds 127% of the principal amount.
The values of the liability component and the equity conversion
component were determined at issuance of the bond. The
fair value of the liability component, included in non-current
borrowings, was calculated using a market interest rate
for an equivalent non-convertible bond. The residual amount,
representing the value of the equity conversion option,
is included in shareholders equity in other reserves.
J. Other creditors falling due within one year
Amounts due to subsidiary
undertakings 84.9 58.4
Other creditors 0.2 0.2
Accruals 13.9 3.6
Total 99.0 62.2
K. Provisions for liabilities and charges
2011
Property
2010
Property
At 1 June 4.2 7.9
Net provisions (credited)
charged to the income statement (1.2) 2.2
Unwinding of discount 0.3
Utilisation of provisions (1.5) (6.2)
At 31 May 1.5 4.2
Analysis of total provision:
Current 0.7 1.2
Non current 0.8 3.0
Total 1.5 4.2
The property provisions comprise the net present value of
the estimated future costs of vacant and sublet properties
and the excess rent over market value for occupied properties
after taking into account dilapidations.
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L. Contingent liabilities
Contingent liabilities that are quantiable arise from property
rental guarantees that have been issued in the normal course
of business and also from bonds that have been issued in
support of tenders submitted to prospective customers.
These amount to 0.3m (2010: 0.3m).
There are contingent liabilities that arise in the normal course
of business in respect of guarantees in relation to subsidiaries.
These are not expected to result in a material gain or loss to
the Company.
At year-end, there was a $45m guarantee in place relating
to potential tax liabilities arising as a result of the disposal
of Allscripts, which Misys would be responsible for covering
if they were to become payable.
M. Retirement benet obligations
Dened benet scheme
In 2003/04, the active members of the UK nal salary scheme
ceased to accrue benets on the basis of their nal salary
during the year. Thereafter, the benets of the active members
accrue on a money purchase (dened contribution) basis.
The latest full actuarial valuation of the UK scheme was carried
out as at 31 May 2008; the assumptions of which have been
updated to 31 May 2011 by qualied independent actuaries.
A new full actuarial valuation of the UK scheme is in progress.
The principal assumptions used in the valuation of the
UK scheme only are:
2011
%
2010
%
Rate of increase in salaries n/a n/a
Rate of increase in pensions in payment:
Fixed 3% 3.0 3.0
Fixed 3.5% 3.5 3.5
RPI max 5% min 3% 3.8 3.9
RPI max 5% min 3.5% 4.1 4.1
Post 1988 Guaranteed Minimum
Pension 2.2 2.6
Discount rate 5.4 5.5
Ination assumption 3.6 3.7
Mortality rates (age) Years Years
Current pensioner male 87 89
Current pensioner female 89 91
Future retiree male 89 91
Future retiree female 91 92
The Company employs a building block approach in
determining the long-term rate of return on pension plan
assets. Historical markets are studied and assets with higher
volatility are assumed to generate higher returns consistent
with widely accepted capital market principles. The overall
expected rate of return on assets is then derived by
aggregating the expected return for each asset class
over the actual asset allocation for the Plan at 31 May 2011.
Mortality assumptions are based on 100% of standard S1PxA
year of use tables with allowance for future improvements to be
in line with CMI_2010 Core Projections assuming a long term
rate of future improvement of 1.25% per annum for both males
and females. Mortality assumptions in the prior year were
based on the PxA00 year of use tables. We believe that the
underlying population of the S1PxA tables better reect the
membership of the UK scheme.
The year-end assets in the schemes were:
Equities 9.4 4.9
Government bonds 21.2 21.3
Corporate bonds 16.2 17.3
Other 0.2
Market value of assets 46.8 43.7
Adjustment for unrecoverable surplus (3.5)
Total market value of assets 43.3 43.7
Actuarial value of liabilities (43.3) (43.9)
Decit in the schemes (0.2)
Net pension liability (0.2)
Movement in decit during the year:
Plan assets:
Fair value at 1 June 43.7 37.3
Actuarial gain 2.3 4.9
Contributions paid by employer 0.5 0.5
Net benets paid out (1.9) (1.2)
Fair value at 31 May 46.8 43.7
Benet obligations:
Present value at 1 June (43.9) (37.3)
Current service cost
Interest cost (2.4) (2.3)
Actuarial gain (loss) 1.1 (5.5)
Net benets paid out 1.9 1.2
Present value at 31 May (43.3) (43.9)
Net Asset (liability) 3.5 (0.2)
An asset of 3.5m (2010: nil) in respect of the UK nal
salary scheme has not been recognised as the Company
would not be able to derive future economic benet from it.
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M. Retirement benet obligations continued
The amounts recognised in the income statement are
as follows:
Current service cost (included
in employee costs)
Interest cost on pension
scheme liabilities (2.4) (2.3)
Included in nance cost (0.2) (0.1)
Total income statement expense (0.2) (0.1)
The long term expected rate of return on the UK scheme
assets is 5.1% (2010: 5.1%).
The actual return on the schemes assets was a gain of 4.5m
(2010: 4.7m).
Total actuarial gains (losses) 3.4 (3.0)
Change in irrecoverable surplus,
effect of limit in para 58(b) (3.5) 2.4
Total losses (0.1) (0.6)
Cumulative amount of actuarial
losses recognised (1.9) (1.8)
History of experience gains and losses in the UK scheme:
2011 2010 2009 2008 2007
Experience
gains (losses) on
schemes assets
Amounts (m) 2.3 2.5 (2.2) (4.5) 3.2
Percentage of
schemes assets 4.9% 5.7% 5.5% 10.9% 8.3%
Experience
(losses) gains
on schemes
liabilities
Amounts (m) (0.3) (0.1) 1.6 (2.3)
Percentage of
schemes liabilities 0.7% 0.2% 4.3% 5.6%
History of asset values, benet obligation and decit in schemes:
Fair value of
plan assets 46.8 43.7 39.7 41.2 44.3
Dened benet
obligation (43.3) (43.9) (37.3) (41.1) (37.3)
Surplus (decit)
in scheme 3.5 (0.2) 2.4 0.1 7.0
The expected contributions to the dened benet scheme
for the next nancial year beginning 1 June 2011 are 0.5m
(2010: 0.5m).
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N. Called up share capital
Number of shares
Allotted,
fully paid
share capital Treasury MEST ESOP Net
At 1 June 2010 594,584,179 (46,477,433) (17,133,515) (103,272) 530,869,959
Shares cancelled during the year (182,150,609) 12,796,552 (169,354,057)
Share consolidation (51,554,197) 3,606,820 2,012,467 12,909 (45,922,001)
Sophis consideration stock 1,626,140 1,626,140
Share options exercised 6,415,383 1,108,687 7,524,070
At 31 May 2011 362,505,513 (23,658,678) (14,012,361) (90,363) 324,744,111
Par value of each share is 1.14 pence. During the year, 6,415,383 (2010: 1,049,481) treasury shares, with a cost of 6.8m
(2010: 0.8m), were utilised to satisfy share awards.
Shareholders approved the return of capital via a Tender Offer of the proceeds of disposal of Allscripts on 13 August 2010.
On 16 December 2010, 169,354,057 ordinary shares were tendered and were repurchased for cancellation at a strike price
of 310 pence per ordinary share, for a total cost of 525 million.
To enable the Company to return the balance of the proceeds from the Allscripts disposal shareholders approved a 146 million
return of share capital, by way of a B share scheme, at the Companys General Meeting on 11 February 2011. 383,579,014
B shares were issued on 14 February 2011. Shareholders owning 89,266,979 B shares elected to receive the initial dividend
payment of 38 pence each and these shares were subsequently converted to deferred shares. The remaining shares were
redeemed at a later date for 38 pence each. The nal redemption date for B shares was 7 April 2011 and all transactions relating
to the B share scheme have now been completed.
The share consolidation, approved as part of the B share scheme, took place on 14 February 2011, when shareholders
exchanged 8 existing ordinary shares of 1p each for 7 new ordinary shares of 1
1
/7 pence each (1.14p).
The Misys Employee Share Trust (MEST) purchases shares in the market using funds contributed by the respective Group
employing companies. These shares are used to satisfy awards made under the Groups share incentive arrangements.
At 31 May 2011, the MEST held 14,012,361 (2010: 17,133,515) shares purchased for a cost of 37.9m (2010: 40.6m) and
with a market value of 50.7m (2010: 38.6m). During the year, it utilised shares with a cost of 2.6m (2010: 6.6m) to satisfy
share awards.
The Employee Share Ownership Plan (ESOP) purchases shares in the market using funds loaned by the Company. Share
purchases are timed to ensure that the ESOP has sufcient shares to satisfy its requirements as and when its obligations fall due.
The Trustees of the ESOP have waived its rights to dividends. At 31 May 2011, the ESOP held 90,363 (2010: 103,272) shares,
purchased for a cost of 0.2m (2010: 0.2m) and with a market value of 0.3m (2010: 0.2m).
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O. Share capital and reserves
Share
capital
Share
premium
account
Capital
redemption
reserve
Other
reserves
At 1 June 2010 5.9 151.9 0.3 137.4
Prot retained for the year 582.9
Shares issued 0.1 5.5
Shares repurchased for cancellation (1.7) 1.7 (525.0)
Convertible bond equity component 16.1
B share scheme shares issued 145.7 (145.7)
B share scheme redemption of shares (111.8) 111.8 (105.6)
B share scheme dividends paid (33.9) 33.9 (33.9)
Expenses incurred on transactions with owners (5.5)
Actuarial loss (0.1)
Share options exercised 1.0 5.5
Share-based payments 7.4
At 31 May 2011 4.3 12.7 147.7 79.2
Share
capital
Share
premium
account
Capital
redemption
reserve
Other
reserves
At 1 June 2009 5.9 151.9 0.3 149.1
Loss retained for the year (19.3)
Actuarial loss (0.6)
Share options exercised 1.8
Share-based payments 6.4
At 31 May 2010 5.9 151.9 0.3 137.4
P. Other reserves
Retained
earnings
Convertible
bond reserve
Treasury
shares
Own
shares Total
At 1 June 2010 272.2 (94.1) (40.7) 137.4
Total recognised income and expense for the period 582.9 582.9
Purchase of and other movement in own shares (525.0) (525.0)
Convertible bond equity component 16.1 16.1
B shares redemption of shares (105.6) (105.6)
B share scheme dividends paid (33.9) (33.9)
Expenses incurred on transactions with owners (5.5) (5.5)
Actuarial loss (0.1) (0.1)
At 31 May 2011 181.7 16.1 (80.6) (38.0) 79.2
Retained
earnings
Convertible
bond reserve
Treasury
shares
Own
shares Total
At 1 June 2009 292.7 (96.3) (47.3) 149.1
Total recognised income and expense for the period (19.3) (19.3)
Actuarial loss (0.6) (0.6)
At 31 May 2010 272.2 (94.1) (40.7) 137.4
conLnued
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Q. Events after the reporting period
On 21 June 2011, the Board announced that it had received a preliminary approach that may or may not lead to an offer being
made for the Company.
On 23 June 2011, Fidelity National Information Services, Inc. conrmed that it had made a preliminary approach regarding a
possible cash offer for Misys plc.
R. Related party transactions
The company is exempt under the terms of FRS 8 from disclosing related party transactions with other 100% owned subsidiaries
of Misys plc Group.
ValueAct Capital has a holding of 67,812,779 shares representing 20.21% (2010: 25.7%) in the Company on an aggregated basis,
which reduced as result of the tender offer on 15 December 2010. Jeff Ubben, who is a non-executive Director of the Company,
is Chief Executive Ofcer and Chief Investment Ofcer of ValueAct Capital.
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!ve year nancal record
Revenue
Banking 167.4 161.7 183.0 159.8 148.6
TCM 184.9 179.5 161.1 141.7 125.1
Misys Sophis 16.8
Corporate & Other 0.9 0.7
Continuing operations 370.0 341.9 344.1 301.5 273.7
Operating prot (loss)
Banking 31.0 32.7 38.5 17.2 16.3
TCM 41.9 42.1 36.5 32.1 28.4
Misys Sophis (3.7)
Corporate & Other (11.9) (12.7) (21.6) (11.0) (9.5)
Continuing operations excluding exceptional items 57.3 62.1 53.4 38.3 35.2
Exceptional items (21.0) (8.4) 31.1 (14.6) (24.3)
36.3 53.7 84.5 23.7 10.9
Interest and other nance costs (4.1) (8.7) (14.0) (3.4) (13.9)
Prot (loss) before taxation 32.2 45.0 70.5 20.3 (3.0)
Taxation 2.1 (20.5) 3.0 (11.4) (1.9)
Prot (loss) after taxation from continuing operations 34.3 24.5 73.5 8.9 (4.9)
Prot after taxation from the discontinued operation 614.7 36.9 16.1 104.4 19.9
Prot for the year attributable to non-controlling interest (17.1) (7.6)
Prot for the year attributable to equity holders of Misys plc 649.0 44.3 82.0 113.3 15.0
Net funds (debt) (94.2) 0.9 (128.9) 25.5 (91.1)
Pence Pence Pence Pence Pence
Adjusted basic earnings per share 12.4 13.1 9.8 14.0 14.6
Adjusted diluted earnings per share 12.2 12.8 9.7 14.0 14.5
Dividends per share 7.91 7.53
Number Number Number Number Number
Average number of employees
Banking 2,075 1,525 1,375 1,788 1,790
TCM 1,285 1,029 1,044 1,066 892
Misys Sophis 100
Corporate & Other 307 1,164 971 81 70
Continuing operations 3,767 3,718 3,390 2,935 2,752
Discontinued operation 640 2,412 2,021 1,601 1,597
4,407 6,130 5,411 4,536 4,349
Adjusted earnings per share includes continuing and discontinued operations.
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Investor nformaton
Financial Calendar
Annual General Meeting 28 September 2011
Announcement of 2011 interim results
(provisional)
January 2012
Preliminary announcement of 2012 results (provisional) July 2012
Annual General Meeting
The AGM will take place at 12 noon on Wednesday 28
September 2011 at The Lincoln Centre, 18 Lincolns Inn Fields,
London WC2A 3ED. The Notice of AGM accompanies this
Report and will also be displayed on the Companys website.
Electronic Communications
Changes in legislation have provided companies with greater
exibility when communicating with their shareholders. By
using electronic communication Misys is able to distribute
messages to all its shareholders instantaneously, reduce costs
and its environmental impact. Only those shareholders who
have elected to receive shareholder documents in hard copy
will receive documents in this form. If in future you would like to
receive the annual report electronically rather than by post,
please register online at www.misys.com
Shareholders who have not elected to receive documents
in hard copy will receive a notication at the time of their
publication advising that they are available electronically
and how to access them.
Company Website
Whether you are looking for information about our activities,
nancial information, social, environmental and ethical
responsibilities, our approach to governance, latest press
releases, this report and further information about the
Company is available on our corporate website at
www.misys.com.
Misys Share Price
The Misys share price is quoted in most UK daily national
newspapers under Software & Computer Services, Support
Services or Information Technology sections.
Company Secretary and Registered Ofce
Tom Kilroy, Misys plc, One Kingdom Street, Paddington,
London W2 6BL Tel: +44 (0) 20 3320 5000. The Company
is registered and domiciled in England No. 1360027.
Registrar
Our registrar is Equiniti, Aspect House, Spencer Road,
Lancing, West Sussex, BN99 6DA Telephone: (from UK)
*0871 384 2070; (from outside UK) +44 (0) 121 415 7047
www.shareview.co.uk. Please direct any enquiries about
holdings of Misys plc shares to the registrar.
*Calls to 0871 numbers are charged at 8p per minute from a
BT landline. Charges from other telephony providers may vary.
Lines are open from 8.30am to 5.30pm Monday to Friday,
excluding bank holidays.
Share Register Fraud: Protecting your investment
Shareholders are advised to be wary of any unsolicited advice,
offers to buy shares at a discount, or offers of free reports
about the Company. If you receive any unsolicited advice make
sure you get the correct name of the person and organisation
and check that they are appropriately authorised by the FSA by
visiting www.fsa.gov.uk/pages/register. More information can
be found at www.moneyadviceservice.org.uk.
Tips on protecting your shares
Keep any documentation that contains your shareholder
reference number in a safe place and destroy any
documentation which you no longer need by shredding it.
Inform Equiniti promptly when you change your address.
Consider holding your shares electronically in a CREST
account via a nominee.
Sharedealing services
Shareholders can make use of the Equiniti share dealing
facilities either by telephoning Equiniti on 08456 037 037
(UK only) or by logging on to www.shareview.co.uk/dealing.
Sharegift
The Orr Mackintosh Foundation operates a purely voluntary
charity share donation scheme for shareholders who wish to
dispose of small numbers of shares when the dealing costs or
minimum fee makes it uneconomical to sell them. Details of the
scheme are available from ShareGift at www.sharegift.org or
can be obtained from Equiniti.
Combined Code
A copy of the Combined Code can be found at www.fsa.gov.uk
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Bankers
The Royal Bank of Scotland plc
135 Bishopsgate
London
EC2M 3UR, UK
Legal Advisers
Allen & Overy LLP
One Bishops Square
London,
E1 6AD, UK
Allen & Overy LLP
1221 Avenue of the Americas
New York,
NY 10020, USA
Joint Corporate Brokers
JPMorgan Cazenove Limited
20 Moorgate
London
EC2R 6DA, UK
Deutsche Bank AG
1 Great Winchester Street
London
EC2N 2DB, UK
Auditor
PricewaterhouseCoopers LLP
One Embankment Place
London
WC2N 6RH, UK
Investor nformaton
conLnued
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Misys would like to thank all those who participated in producing
this report, particularly the members of staff for their contributions.
This document has been printed on Heaven 42, which is produced
using virgin wood bre from fully sustainable forests. All pulps used
are Elemental Chlorine Free (ECF) and manufactured at a mill that
has been awarded the ISO 14001 and EMAS certicates for environmental
management. The use of the FSC logo identies products which contain
wood from well-managed forests certied in accordance with the rules
of the Forest Stewardship Council. The paper is also completely
bio-degradable and recyclable.
If you have nished reading this report and no longer wish to retain it,
please pass it on to other interested readers or dispose of it in your
recycled paper waste.
An online version of this report is available on our website at
www.misys.com/report2011
Designed and produced by The College www.thecollege.uk.com
4OY_YVRI
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percentage points year-on-year

to support its customer loyalty programme.

At 1 June 2008 10,018 18,156 2.79 1,060 1.81

2009 305 8,812 3.01 24 1.89

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