iSOFT Group plc
2005 annual report and accounts
for the year ended 30 April 2005 Contents
01 Financial Headlines
02 Letter from the Chairman
05 Chief Executive’s Report
09 Operating and Finance Review
15 Report of the Directors
21 Corporate Governance Report
27 Corporate Social Responsibility Statement
31 Remuneration Report
41 Audit Committee Report
42 Independent Auditors’ Report
45 Financial Statements
74 Five Year Summary
77 Company Information
78 Notable Dates
It is hard to imagine an area of our lives that has not been
changed by technology. 
In many industries suppliers use modern technology to build and
deliver sophisticated, personalised services around their individual
customers.  Retailers, banks and service providers combine
information from multiple sources and deliver it to customers 
via easy to use interfaces across a variety of devices.
Our strategic product, LORENZO, brings the benefit of this
technology approach to healthcare.  It is now possible to provide
personalised advice to citizens on symptoms and drugs, patients 
can book and amend appointments on-line and reminders and repeat
prescriptions can be sent to mobile devices using simple messaging.
By harnessing modern technology solutions in these ways, there 
is an unprecedented opportunity to advance the quality of 
healthcare and improve the well being of citizens. 01
75.5%
Turnover growth of 75.5%
to £262.0m
In the year ended 30 April 2005
Net cash inflow from operating
activities
#
totalled £81.8m, representing
a normalised operating profit* cash
conversion ratio of 113.6%
£81.8m
86.1%
Normalised profit before tax*
increased 86.1% to £68.5m,
a profit margin of 26.1%
Underlying earnings per share* for the
year increased 23.2% to 21.81 pence
23.2%
Year ended 30 April 2005 2004 2003 2002 2001
Turnover (£’m) 262.0 149.3 91.5 60.1 31.1
Normalised operating profit* (£’m) 72.0 39.5 25.6 16.4 7.6
Normalised profit before tax* (£’m) 68.5 36.8 23.5 15.4 7.2
Underlying earnings per share* 21.81p 17.70p 15.09p 10.49p 4.77p
Average monthly employees 2,546 1,338 580 430 252
* stated before amortisation of goodwill and exceptional items
#
stated before the cash impact of restructuring
FINANCIAL HEADLINES 2005 02
Dear Shareholder,
In the year ended 30 April 2005, iSOFT made
considerable progress towards its objective of
being the global leader in the provision of
innovative software solutions for healthcare
provider organisations.  Our results for the period
are testimony to this progress with good growth 
in turnover and profit, and further significant
strengthening of our working capital position.
Leadership in our market depends on the relevance
of our software solutions and their acceptance by
our existing customers and adoption by new ones.
In these regards we can demonstrate substantial
advancement as our LORENZO application set
progressively replaces our traditional software
portfolio in our customer base, and continues its
high success rate in new procurements in our
chosen markets.  The year ended 30 April 2005
has seen a number of landmark decisions in favour
of LORENZO over our international competitors,
which bodes well for the future as iSOFT looks to
extend its geographic reach.
During the year we have made extensive
enhancements to LORENZO to allow flexible
deployments in different healthcare settings.  
At the functional level, the vast majority of
LORENZO enhancements are aimed at giving
clinicians direct benefits from working with the
application, particularly in patient-facing settings.
We are pleased with the reactions received from
clinicians to the care management innovations
being introduced in LORENZO. Their feedback
heavily influences our research and development
direction and priorities.
The impressive progress of LORENZO owes much
to our extensive off-shore Product Development
Centre in Chennai, India.  Access to the large pool
of IT talent in that location has been essential in
developing the highly organised and productive
software development organisation that iSOFT
now possesses.  At 30 April 2005 our workforce in
Chennai numbered 956 software specialists. 
Following on from our success in Chennai, I am
also pleased to announce the opening of our new
Solution Centre in Hyderabad, India.  This centre
has been established to work on the packaging
and configuration of LORENZO for deployment in
diverse international healthcare settings. 
We expect to host our growing number of third
party implementation partners at this location 
to work collaboratively on future new LORENZO
based solutions.
In the UK, at our new Manchester Group
headquarters, we have now completed a
dedicated demonstration centre for LORENZO.
This ‘NUCLEUS’ facility will be aimed at existing
and prospective customers, to allow them to see
the full functionality of LORENZO including its
interoperability with third party applications,
diagnostic medical equipment and new and
emerging device technologies.  This facility will also
host investor days that will allow our shareholders
to appreciate more closely the value of iSOFT’s
work in advancing the quality of healthcare in its
selected markets.
Organisationally, the year ended 30 April 2005 
has been one of restructuring and subsequent
consolidation following the final regulatory
clearance of the merger with Torex in April 2004.  
The year ended 30 April 2005 has seen a number of landmark
decisions in favour of LORENZO over our international competitors,
which bodes well for the future as iSOFT looks to extend its
geographic reach. The successful integration of that business has
provided a strong middle management team to
support our current workloads and the next phase
of development for the iSOFT business.  
However, we continue to take important steps to
strengthen further our senior management team.
At Board level, we have already announced 
Gavin James as our new Group Finance Director.  
I am delighted that Gavin has agreed to join the
iSOFT executive team from his role as Finance
Director of Morse plc.  We are already benefiting
significantly from his considerable, relevant public
company experience.  We also announced during
the year, promotion to the Board for Ravi Kumar
as Chief Technology Officer.  This recognises not
only the outstanding contribution made by Ravi
to the development of our application offering,
but also acknowledges the importance of
product and technology decisions in our business
strategy formulation.
Further to the executive appointments, I am also
able to announce changes to the non-executive
members of the iSOFT Group Board.  I am pleased
to confirm the appointment to the Board of Ken
Lever as a non-executive director.  Ken is currently
Finance Director of Tomkins plc.  His experience of
international operations and his independent
financial perspectives will be of great value to
iSOFT.  Sir Digby Jones, who has been a 
non-executive director since our listing on the
London Stock Exchange in July 2000, will not seek
re-election at iSOFT Group’s forthcoming Annual
General Meeting in July 2005.  The Board and
management of iSOFT are grateful to Sir Digby for
his guidance and support, and are pleased that he
will continue to be available as an advisor to 
the Group.
Finally, I am able to confirm my own intention to
stand down as Non-executive Chairman and from
the Board on the appointment of a successor
during the course of the current financial year.  
I am privileged to have been involved in the iSOFT
success story, firstly as Chief Executive and more
latterly as Non-executive Chairman.  The next
Chairman will lead iSOFT into a period of
international growth as befits our standing as a
world class software application vendor.  The
Board has commenced a process to recruit a new
Chairman with the best possible experience in line
with our strategic direction.  
In conclusion, I congratulate the management and
all the employees of iSOFT for another year of
outstanding performance.  The strong demand for
our software solutions has meant a lot of hard
work for our staff.  Their commitment, diligence
and invention remain key factors in our success.
Patrick Cryne
Non-executive Chairman
03
LETTER FROM THE CHAIRMAN 2005 Pharmacist. I want to 
be working with patients.
Accurate information is
vital to medicines
management, now I can
use it to improve the
quality of care I deliver.
04 05
CHIEF EXECUTIVE’S REPORT 2005
A year of delivery
I am pleased to report that the year ended 30 April
2005 was an important year of successful delivery
for the iSOFT Group.  In addition to delivering a
strong financial performance, the Group realised the
synergies anticipated from our merger with Torex,
successfully launched the market-leading LORENZO
set of software applications into both existing and
new international markets and won a number of
important new contracts.
Group revenues grew to £262.0m, an increase of
75.5% from the previous year. Profit before tax,
exceptional items and goodwill amortisation grew
86.1% to £68.5m.  A robust operating cash
performance contributed to net cash generation
before financing of £48.9m.  The resulting year end
net funds position of £56.4m, gives iSOFT sufficient
resources to take advantage of an increasing
number of business development opportunities.
Looking forward, recognition of the key role that
better information management has to play in
improving the efficiency of healthcare provision
worldwide is creating a number of specific
international opportunities for exciting sales 
growth. We plan to take advantage of these, either
through direct sales, partnership with third party
service or technology organisations, or through
acquisition of companies with established access 
to attractive markets. 
The healthcare applications market opportunity
For some time we have developed the Group in
anticipation of modern information systems playing
a pivotal role in the development of more efficient
and effective healthcare economies.  The key
challenge for every major healthcare economy is to
balance increasing costs of healthcare delivery with
the growing demands of ageing populations. 
Our view is now widely accepted and increasing
numbers of healthcare providers are investing in
large scale modern information technology systems
in order to connect up the supply chain.  Some
countries are ahead of others in the procurement
and implementation of modern solutions, but we
are only at the start of the modernisation process.
Most of the work to implement the necessary
systems will be completed in the next five to
ten years.
iSOFT is in an unrivalled position to benefit from
this, having developed the most advanced set of
application software solutions available for the
healthcare market.  We also have the depth of
international experience and expertise required 
to understand the solutions needed by different
healthcare markets, and the scale to continue
developing them. 
As a result, the work that we undertake with our
customers and partners is recognised internationally
as being at the very forefront of the development of
modern healthcare information systems.
Importance of the strategic application set
LORENZO was developed specifically to meet 
the growing international need for modern scalable
healthcare information systems.  We have long
believed that the major healthcare economies face 
a common core set of problems, though each
usually also exhibit a number of individual local
market characteristics. 
Typically, the most substantive area of difference
from country to country results from the funding
models that govern the reimbursement of the 
cost of healthcare provision to the provider.
Consequently, we have developed a comprehensive 
core application set capable of meeting the
standard common elements of healthcare delivery,
while also being flexible enough to be configured 
to suit specific local characteristics.
There is, therefore, great value in a core strategic
application set such as LORENZO, built on a modern
technology platform and designed to meet the
requirements of modernising healthcare economies.
We have achieved the flexibility to adapt LORENZO
For some time we have developed the Group in anticipation 
of modern information systems playing a pivotal role
in the development of more efficient and effective 
healthcare economies. to local requirements by using the latest software
development tools and technical architectures.  
We recognised early that it is simply not possible 
to achieve this by iterating existing legacy software
product code bases constrained by old 
technology platforms.
Available from early 2004, LORENZO was the first
solution on the market targeted to meet the
demanding requirements of healthcare providers
around the world.  It has achieved significant acclaim
from healthcare providers who have performed
detailed procurement evaluations, industry analysts
and the world’s leading technology organisations. 
We have now established a strong market position
and intend to leverage this at a time when demand
for information systems based on international best
practice is growing.
Consistent business strategy
Throughout the financial year, iSOFT has continued 
to be guided by the consistent and clearly defined
business strategy employed since its listing on the
London Stock Exchange in July 2000.  In simple
terms, this strategy has been to focus on the
development of world class software applications,
which address fully the clinical and administrative
information management requirements of healthcare
provider organisations.
As our revenues and profits have grown, we believe
this strategy has now been well-proven.  Furthermore,
management has established a reputation for
effective delivery and execution, both in development
of software application products and the accessing 
of international markets.
In the year ahead, management will continue 
to pursue this strategy, looking to secure market
share leadership in each of our existing territories
and respond to growing international demand by
entering new markets. 
Existing international operations
During the year, our first priority was to develop our
existing international business units and we have
made good progress in introducing LORENZO 
to customers in those markets.  Healthcare
organisations across the world have shown great
interest in our success as application provider to
three of the five regions in the National Programme
for IT in the NHS in England, the world’s first
procurement programme to purchase systems on
behalf of an entire national health community. 
Elsewhere, we achieved a number of notable
successes during the year.
In Germany, further to our success in being selected
to supply systems to Aachen University Hospital, we
are delighted to now have an agreement to supply
LORENZO to the Robert-Bosch-Krankenhaus in
Stuttgart, one of the country’s leading private
healthcare institutions.
In Australia, we have extended our patient
management system supply into Queensland and
we are currently engaged in contract negotiations
for the supply of a state-wide patient administration
system into Victoria.
Finally, in terms of development of existing markets,
I am very pleased to announce that we are engaged
in advanced discussions with Leiden University
Medical Centre with regards to the first delivery of
LORENZO into Holland.
Prospects for international growth
Following the progress of the past few years, 
iSOFT is increasingly being acknowledged as the
leading supplier of modern healthcare applications. 
As a result, either directly or by way of third party
introductions, iSOFT is now invited to tender for
most significant procurements of healthcare
application solutions worldwide.
Our challenge, therefore, is evaluating the
opportunities that arise and, for those that qualify,
to identify the most appropriate means of response.
06 Depending on the nature and size of the opportunity,
it may be more appropriate to respond directly 
or through a partner. 
We continue to make good progress with a 
number of significant current opportunities notably
in Asia Pacific.  
In December 2004, we identified that SingHealth,
the largest cluster of public healthcare institutions in
Singapore, had commenced a formal study to
evaluate a possible roll out of LORENZO across the
cluster. I am now pleased to confirm that iSOFT will
enter into a development partnership with SingHealth.
With this partnership, iSOFT will deliver an initial
solution to SingHealth by December 2005.  We are
delighted to have this opportunity to demonstrate
the capability of a LORENZO-based solution working
in partnership with one of the world’s most
advanced regional healthcare delivery, research and
teaching organisations.
I am also pleased to announce that, further to the
RFI exercise initiated in November 2004 by the
Hospital Authority, the statutory body that manages
all public hospitals in Hong Kong, a solution design
and pilot exercise will be conducted with iSOFT as a
continuation of the Authority’s evaluation of the
options available for the development of their next
generation clinical management system.
Additionally, we continue to examine closely
opportunities for acquisition that would accelerate
entry into a particular market.  iSOFT has a record
of being a discerning buyer.  We are proud of our
ability to select transactions that create value,
execute them and complete integration exercises in
a speedy and efficient manner.
We expect to continue to be presented with 
a large number of potential acquisition opportunities,
but will only take advantage of a transaction if it
stands up to rigorous strategic and financial
analysis.  Any acquisition candidate would have to
either enable us to consolidate an existing market
position, or offer access to a significant new
geographic market for LORENZO.  In the
circumstances, therefore, such a candidate would
typically possess effective sales, application delivery
and service capabilities. 
The Group is well organised and resourced to
respond to business development opportunities.
There is substantial management strength, both 
at Board level and throughout the operational
business units.  The announcement in April of the
appointment of Gavin James as Group Finance
Director adds further valuable experience in
managing international operations, integration of
acquisitions and managing distribution partnership
arrangements between application vendors and IT
services companies.
Outlook
In the coming year, we expect that our application
offering will continue to become increasingly sought
after by the marketplace.  Installations of LORENZO
will grow in number providing further valuable
references for the strength of iSOFT’s market
leadership position.
We are excited about prospects in our traditional
markets of Asia Pacific and Europe, where we are
evaluating a number of major sales opportunities.
We are also now examining the North American
market in greater detail.
The momentum now building in the international
iSOFT proposition, and the growing demand from
the market, provides the basis for further exciting
growth over the coming years.  As a result, we look
forward to the current year with confidence and are
on track for another year of success.
Tim Whiston
Chief Executive Officer
In the coming year, we expect that our application 
offering will continue to become increasingly sought 
after by the marketplace.
CHIEF EXECUTIVE’S REPORT 2005
07 08
Surgeon.  I want
patients to benefit
from the best
knowledge available.
Clinical excellence
should be part of the
standard service. It has
to be built deep into
the fabric of care
systems and processes. 09
OPERATING AND FINANCE REVIEW 2005
Overview
The year ended 30 April 2005 represented another
year of progress for iSOFT.  We continued our
record of achievement, recording organic growth
and delivering higher than expected synergies from
the Torex merger.  We also made significant
progress in developing the Group and its market
proposition outside the UK.
Trading results
In the year ended 30 April 2005, turnover for 
the Group increased 75.5% to £262.0m. Of this
headline growth, 7% was organic growth taking
the proforma 2004 enlarged post-merger Group 
as the comparator. 
Normalised operating profit* increased by 82.3%
to £72.0m, and normalised profits before tax*
grew 86.1% to £68.5m. 
Underlying earnings per share* increased 23.2%
to 21.81p.
The strong cash generation inherent in the
business model was again demonstrated with 
cash generated from operating activities during 
the year before cash flows from restructuring of
£81.8m.  This represents a conversion ratio of
113.6% of normalised operating profit*, with 
the resulting year end cash balance standing 
at £110.1m. 
The results profile for the year in terms of revenue,
profits and cash continued to be weighted to the
second half of the year reflecting primarily the
seasonality of the UK business. 
Improvement in the operating profit margins
relative to the prior year is a result of the combined
ongoing benefits of a reducing proportion of low
margin revenues associated with the supply of
third party products, our increased use of offshore
resources and the annual cost synergies realised as
a result of the successful merger integration
completed in the year.
A reconciliation to the statutory accounts of
normalised operating profit, normalised profit
before taxation and underlying earnings per share
is set out in the table below.
The year ended 30 April 2005 was an important year of delivery for
the iSOFT Group.  Group revenues grew to £262.0m, an increase of
75.5% from the previous year. Profit before tax, exceptional items
and goodwill amortisation grew to £68.5m.
Year ended 30 April 2005 Operating Profit before Earnings per
profit taxation share
£m £m pence
As disclosed in the statutory accounts 48.0 44.5 11.10
Goodwill amortisation 25.3 25.3 11.10
Exceptional items (1.3) (1.3) (0.56)
Tax on exceptional items - - 0.17
Normalised/underlying amounts
*
72.0 68.5 21.81
* stated before amortisation of goodwill and exceptional items 10
Operating performance
The iSOFT strategy, to develop and promote one
common software application offering suitable 
for all markets provides a focal point for our
operational and marketing activities.  The LORENZO
application offering continues to be positively
received by customers in each of our current markets
and by potential new customers in existing and
new international markets.
LORENZO is acknowledged for delivering greater
processing power, functionality and utility by those
healthcare provider organisations seeking
comprehensive modern application solutions. 
The trading performance of the business in the 
UK during the year benefited from the introduction
of the National Programme for IT in the NHS in
England, both in terms of new revenue streams
derived from delivery of application software under
regional contracts, together with revenues derived
from the development and maintenance of our
existing installed customer base. 
In Germany and Switzerland, whilst the benefits 
of the merger integration are taking a little longer
to flow through to the trading results, we are
particularly pleased with the early success achieved
in introducing LORENZO into these markets.
In Australia, New Zealand and Holland we 
have enjoyed the benefits of significant existing
market shares and are working to identify and
develop a number of early adopter references for
LORENZO in these territories with both existing
and new customers.
Application development
During the year ended 30 April 2005 our research
and development expenditure increased from
£12.7m to £18.3m.  This figure equates to 7% 
of turnover and is representative of our ongoing
commitment to maintaining our reputation as a
world class application company.  We continue 
to invest in our dedicated Product Development
Centre in Chennai, India, with the number of
application specialists in this centre having grown
122% over the course of the year to 956. This
dedicated facility, where code development and
maintenance for all strategic products is performed,
is now complemented by our new Solution Centre
facility in Hyderabad, India.  Together these centres
provide us with major competitive advantage in
accelerating our application development cycle
times, allowing us to bring application solutions 
to market quickly.
Solution design work continues to be undertaken
by staff located in our core markets principally the
UK, Ireland, Germany, Switzerland, Holland,
Australia and New Zealand.  Combined with the
development and solution staff based in India, the
total average number of staff directly employed in
research and development activities during the
year was 1,019 (2004: 491), representing 40.0%
(2004: 36.7%) of the total Group average headcount
of 2,546 (2004: 1,338). 11
OPERATING AND FINANCE REVIEW 2005
Business integration
Following final clearance by the Office of Fair Trading
of the merger with Torex on 29 April 2004, the
operating businesses have been fully and successfully
integrated.  The integration has resulted in a Group
with strong country operations in the UK, Ireland,
Germany, Switzerland, Holland, Australia and New
Zealand.  These markets provide both an
established customer base and a platform to access
new customers and markets with the LORENZO
application offering. 
The benefit of the integration is a stronger more
efficient operational organisation with greater
focus.  The integration and business improvement
initiatives completed have secured annual cost
structure synergy benefits of £12.2m, the majority
of which were realised in the year ended 
30 April 2005.
At the time of the merger with Torex, estimates
were made of the fair value of the net assets
acquired. During the course of the year ended
30 April 2005 to the extent that these estimates
required adjustment, in order to properly reflect
the fair value of the assets and liabilities assumed
as a result of the merger, they have been revised
with surpluses adjusted back through the calculation
of the goodwill arising on consolidation.
At 30 April 2004 an exceptional provision was
established for the cost of integration of the two
businesses.  This provision has been utilised during
the current year and credited to the profit and loss
account where the provision is not required.
Our experience of successfully integrating
businesses over the last five years provides a
proven framework for addressing the challenges 
of merging entities in order to build value.
Interest
Net interest payable in the year was £3.1m 
(2004: £2.6m) reflecting increased working capital
requirements and the higher proportion of profit
and revenues in the second half of the financial
year, relative to the first half.
Taxation
The increase in the effective tax rate before
goodwill amortisation for the year to 27.3%
(2004: 23.6%) is due primarily to the increased
size of the Group and the higher proportion of
profits arising in territories with tax rates higher
than the UK.
Earnings per share
Underlying earnings per share* increased by
23.2% to 21.81p per share (2004:17.70p).
In accordance with FRS 14, the basic earnings per
share after goodwill amortisation and exceptional
items were 11.10p (2004: 6.66p).  Diluted
earnings per share were 10.97p (2004: 6.57p).
The LORENZO application offering continues to be positively
received by customers in each of our current markets 
and by potential new customers in existing and new 
international markets.
* stated before amortisation of goodwill and exceptional items 12
Balance sheet and funding
The Group consolidated balance sheet remained
strong with closing net assets totalling £478.5m
(2004: £452.2m).  The net funds position was
£56.4m (2004: £3.8m), with cash balances of
£110.1m (2004: £75.0m) held at the year end.
At the balance sheet date, the Group had a term
loan of £51.0m and a multi-currency revolving
credit facility of £85.0m.  
These facilities are structured to suit the Group’s
short term seasonality in trading and medium 
term requirements. 
Cash deposits are managed to retain flexibility
whilst ensuring reasonable interest receipts and
minimal credit risk.
Foreign currency transactional exposure is monitored
on an ongoing basis and is managed using natural
hedges where possible. 
Accounting policies
The financial statements have been prepared on
the basis of consistent accounting policies in line
with those used in the previous financial year. 
Pensions
The Group uses a mixture of defined benefit and
defined contribution schemes, the former having
been acquired as part of the merger with Torex.
The Torex Medical Systems defined benefit scheme
was closed to new members in April 2000.  This
pension scheme is accounted for in accordance
with FRS 17.  At the balance sheet date, the FRS 17
deficit in respect of the scheme was £9.2m and
the liability recorded in the Group accounts, net of
the related deferred tax asset, was £6.4m.
International Financial Reporting Standards
As a publicly quoted company, iSOFT will be
required to adopt International Financial Reporting
Standards (IFRS) together with revised International
Accounting Standards (IAS) in issue at 31 March
2004 for their financial statements for the period
commencing 1 May 2005.  Full IFRS consolidated
statements will be produced for the first time for
the year ending 30 April 2006, with the first
reported results under IFRS being the interim results
for the six months ending 31 October 2005.  
The consolidated financial statements for the year
ended 30 April 2005 remain in accordance with
UK GAAP.  The Group’s profit and loss account,
balance sheet, cash flow statement and related
notes for the current year will, however, have to be
restated in the future for comparative purposes. 
We have already made significant progress in
identifying and quantifying the key accounting
changes and accounting policy differences that
exist between UK GAAP and IFRS. 
As a result of work performed to date, we are
confident that we will be able to fully comply with
the accounting and reporting requirements of IFRS
in the year ended 30 April 2006. 13
OPERATING AND FINANCE REVIEW 2005
The key differences arising that are expected to affect
iSOFT include:
• Development expenditure – as permitted by
UK GAAP , the Group currently expenses all 
development expenditure as incurred, whereas 
IFRS requires such expenditure, providing certain 
criteria are met, to be capitalised and amortised 
over its useful life commencing with the date at 
which the asset is available for use.
• Goodwill amortisation – under UK GAAP , the 
Group’s policy is to amortise goodwill on a 
straight-line basis over its estimated useful 
economic life of up to 20 years.  Under IFRS, 
instead of an annual charge to the profit and 
loss account, an impairment review will be 
carried out at each balance sheet date. This 
is required irrespective of there being an 
indicator of impairment in existence.  If 
impairment is identified, the resulting debit 
will be charged to profit and loss account. 
• Share based payments – under UK GAAP the 
cost of share options is based on the difference 
between exercise price and the market value of 
the option at the date of grant. Since grants 
made under the Group’s share option schemes 
have generally been made at an exercise price 
equal to the market value they have not 
resulted in a charge to the profit and loss 
account.  Under IFRS the Group is required to 
measure the cost of all share options granted 
since 7 November 2002 that have not fully 
vested at 30 April 2005, using an option 
pricing model.
This summary is not intended to be an exhaustive
list, and further differences may arise as a result 
of our on-going detailed assessment and
interpretations of IFRS.
Dividends
Consistent with a progressive dividend policy, the
directors have proposed a final dividend of 1.82p
per share (2004: 1.70p).  Combined with the
interim dividend of 0.75p (2004: 0.70p) per share,
this gives a total dividend payment for the year of
2.57p per share (2004: 2.40p).  The proposed
dividend if approved at the Annual General
Meeting, will be paid on 29 July 2005 to
shareholders on the register on 1 July 2005.
Tim Whiston
Chief Executive Officer
Our experience of successfully integrating businesses over the 
last five years provides a proven framework for addressing the
challenges of merging entities in order to build value. Community Carer.
Information needs to 
be accessible to clinical
professionals in every
location and every care
setting, regardless of 
its source.
14 15
REPORT OF THE DIRECTORS 2005
The directors present their annual report and the
audited financial statements of the Company and
the Group for the year ended 30 April 2005.
Principal activities
The Group is an international product business,
licensing market leading software applications 
to healthcare provider organisations from an
established product portfolio.  It also provides
solution design and development, installation,
system configuration, training and customer
support services in respect of its applications.
Business review and future developments
The directors consider that the Group will continue
to enjoy growth for the foreseeable future.  The
Letter from the Chairman on page 2, the Chief
Executive’s Report on page 5, and the Operating
and Finance Review on page 9 provide further
details of the performance of the business during
the year and of expected future developments.
The Corporate Social Responsibility Statement on
page 27 provides an update on the Group’s policies
in respect of employees and the environment.
Results and dividends
The results of the Group are set out in the
consolidated profit and loss account on page 45.
The directors recommend the payment of a final
dividend of 1.82p per share (2004: 1.70p) to the
holders of the ordinary shares on the register at 
1 July 2005, which together with the interim
dividend of 0.75p per share (2004: 0.70p), gives 
a total equity dividend for the year of 2.57p per
share (2004: 2.40p).
After deduction for dividends, the retained profit
for the financial year was £19.3m. 
Directors
The directors of the Company as at the balance
sheet date are shown below:
Tim Whiston (37), Chief Executive Officer, joined
the business as Finance Director in August 1997
and was subsequently appointed to the Board of
iSOFT Group plc on 14 April 2000.  He took on the
role of Chief Executive Officer on 2 February 2004.
Steve Graham (41), Group Commercial Director,
was appointed to the Board of iSOFT Group plc on
28 April 1999.
Ravi Kumar (37), Chief Technology Officer, first
joined the business on 1 September 1992 and was
appointed to the Board of iSOFT Group plc on 
7 October 2004.  
Patrick Cryne (54), Non-executive Chairman, was
appointed to the Board of iSOFT Group plc on 
28 April 1999 as Chief Executive Officer.  He took
on the role of Executive Chairman on 
23 December 2003 and Non-executive Chairman
with effect from 14 December 2004.
Geoff White (52), Non-executive Deputy Chairman,
and chair of the Nomination Committee
†
, was
appointed to the Board of iSOFT Group plc on 
19 May 2000.  On 6 January 2005 he resigned as
chair of the Remuneration Committee and was
appointed chair of the Nomination Committee.  He
is non-executive Chairman of Punch Graphix plc
and non-executive Chairman of Oracle (1747) Ltd
trading as The SMP Group and non-executive
director of Tekdata Group Ltd.  He was formerly
Chief Executive of Pressac plc until June 2001 
and a non-executive director of Derby City 
NHS Trust.  He is a fellow of the Institute of
Chartered Accountants.
The Group is an international product business, licensing market
leading software applications to healthcare provider organisations
from an established product portfolio.
* Member of the Audit Committee   
#  
Member of the Remuneration Committee   
†  
Member of the Nomination Committee 16
Sir Digby Jones (49), Senior Independent 
Non-executive director
#†
, was appointed to the
Board of iSOFT Group plc on 19 May 2000.  He
resigned as chair of the Nomination Committee on
6 January 2005.  He is Director General of the
Confederation of British Industry (CBI), a non-
executive director of Alba plc, a director of Business
in the Community, a non-executive director of the
unlisted mhl support plc and non-executive
Chairman of the unlisted etrinsic plc.
Eurfyl ap Gwilym (60), Non-executive director
and chair of the Audit Committee*
#
, was
appointed to the Board of iSOFT Group plc on 
19 May 2000.  He is a non-executive director of
the Principality Building Society, NCC Group plc
and Pure Wafer plc.  He was formerly a director 
of the Terence Chapman Group plc. 
Dr Colin Wall (55), Non-executive director and
chair of the Remuneration Committee*
#
, joined the
iSOFT Group plc Board on 23 December 2003
having been appointed as a non-executive director
of Torex PLC in October 1998.  On 6 January 2005
he was appointed chair of the Remuneration
Committee. He was employed with Blue Circle
Industries plc in a number of senior management
roles and subsequently worked in a number of
consultancy roles.
David Thorpe (55), Non-executive director*
†
,
joined the iSOFT Group plc Board on 
23 December 2003, having been appointed as
non-executive director of Torex PLC on 28 May 2003.
He has held a number of senior positions for
Electronic Data Systems (EDS) including UK Chief
Executive and latterly President of EDS Europe.  
He is a non-executive director of VT Group plc,
The Innovation Group plc and of Staffware plc.  
TIM 
WHISTON
STEVE 
GRAHAM
RAVI
KUMAR
PATRICK 
CRYNE
* Member of the Audit Committee   
#  
Member of the Remuneration Committee   
†  
Member of the Nomination Committee He is also non-executive Chairman of Tunstall Ltd.
He is a member of the Chartered Institute of Public
Finance and Accounting.
Rene Kern (41), Non-executive director, was
appointed to the Board of iSOFT Group plc on 
14 March 2003.  He is a managing director and 
a member of the executive and investment
committees of General Atlantic LLC who at the
balance sheet date owned 7.7% of the shares of
iSOFT Group plc.  He is also a non-executive
director of Intec Telecom Systems plc and
RiskMetrics Group Inc.
On 21 June 2005 the Group announced that Gavin
James had been appointed to the Board of iSOFT
Group plc as Group Finance Director.  He has been
the Finance Director of Morse plc for the past
seven years and prior to that was the Group
Finance Director of Menvier-Swain Group plc.  
As previously announced, Mark Woodbridge
resigned as a director on 7 October 2004 and
John Whelan stood down from the Board with
effect from 27 April 2005.
On 21 June 2005 the Group announced that 
Ken Lever had agreed to join the Board as a non-
executive director.  He is the Finance Director of
Tomkins Plc and a non-executive director of Vega
Group PLC.  He is a chartered accountant and a
member of ICAEW Financial Reporting Committee
and Chairman of the Hundred Group Financial
Reporting Committee.  He has held executive
directorships at Albright and Wilson plc, Alfred
McAlpine plc and Corton Beach plc and was a
partner in Arthur Andersen.  
Patrick Cryne has informed the Board of his
intention to step down from his role of Non-
executive Chairman and retire from the Board by
the end of the current financial year in April 2006.
After leaving the Board, Patrick has agreed to
remain closely involved with iSOFT as an advisor to
the Company on strategic issues.  A search for an
independent Non-executive Chairman will
commence immediately.
The Board considers that Sir Digby Jones, Geoff
White, Eurfyl ap Gwilym, David Thorpe and Colin
Wall were independent throughout the year and
that they remain independent at the date of this
report. The Board does not consider Patrick Cryne
and Rene Kern to be independent.
All directors are subject to election by the
shareholders at the first opportunity after their
appointment, and to re-election thereafter at
intervals of no more than three years.
Ravi Kumar, Gavin James and Ken Lever will stand
for election at the Annual General Meeting, it
being the first Annual General Meeting since 
their appointment. 
The directors retiring by rotation are Steve Graham,
Sir Digby Jones and Geoff White.  Steve Graham
and Geoff White offer themselves for re-election 
at the Annual General Meeting. 
Sir Digby Jones has informed the Board of his
intention not to seek re-election as a non-executive
director at the forthcoming Annual General Meeting.
He will therefore step down from the Board at the
end of that meeting. 
The Non-executive Chairman has confirmed that
the directors standing for re-election have fully met
the performance standards required of directors by
the Company and that they continue to
demonstrate commitment to the role.
17
REPORT OF THE DIRECTORS 2005 18
Directors’ share interests
The beneficial share interests in the ordinary share capital of the Company of those persons who were
directors at the balance sheet date were as follows:
Beneficial interests include the director’s personal
holdings and those of their spouse and minor
children as well as holdings in family trusts of which
the director’s spouse or their minor children are
beneficiaries or potential beneficiaries.  Included in
the total shown above for Patrick Cryne is 550,000
of such holdings.
Rene Kern had no beneficial share interests at the
balance sheet date, however, he is an employee of
General Atlantic LLC who owned 7.7% of the
issued share capital of iSOFT Group plc at the
balance sheet date.
There have been no changes in the above interests
between 30 April 2005 and 21 June 2005.
Research and Development
The Group has a continuing commitment to 
a significant level of application development
investment.
During the year, development investment totalled
£18.3m (2004: £12.7m), representing 7.0% of
turnover.  All research and development
expenditure is charged to the profit and loss
account as incurred. 
This expenditure ensures that iSOFT’s software
application portfolio benefits from the latest
technologies and continues to address the current
and emerging customer business needs, thus
protecting the market position of the Group 
and the potential for future revenue generation. 
Ordinary % issued Ordinary % issued
shares at capital shares at capital
1 May 2004
*
30 April 2005
Patrick Cryne 12,000,000 5.32% 9,000,000 3.95%
Steve Graham 8,000,000 3.55% 5,000,000 2.20%
Ravi Kumar 650,000 0.29% 650,000 0.29%
Tim Whiston 402,488 0.18% 449,547 0.20%
Colin Wall 206,403 0.09% 84,841 0.04%
Geoff White 110,454 0.05% 50,454 0.02%
Eurfyl ap Gwilym 45,454 0.02% 45,454 0.02%
Sir Digby Jones 25,000 0.01% 25,000 0.01%
David Thorpe 10,000 0.00% 20,000 0.01%
* at 1 May 2004 or date of appointment if later The Board’s commitment to development is
demonstrated by an average of 1,019 employees
having been dedicated to this area in 2005, out 
of a total average employee base of 2,546.  
Quality
iSOFT maintains a policy of ensuring that
appropriate standards of operation are maintained
across the Group.  Our achievement of ISO 9001:2000
accreditation has been extended to our Product
Development Centre in Chennai which supports
our commitment to this quality standard.
iSOFT has begun working towards obtaining 
ISO 17799 Information Security Management
System (ISMS) and Capability Maturity Model
®
Integration (CMMI) Level 4 accreditation.
Payments to creditors
Whilst the Company does not follow any specific
external code or standard on payment practice, the
policy for all suppliers is to fix terms of payment
when agreeing the terms of each business
transaction and to ensure that the supplier is aware
of those terms.  The Company seeks to abide by
those terms whenever it is satisfied that the
supplier has met the contractual obligations.  
At 30 April 2005, the number of days of trade
creditors for the Company, calculated by reference
to the total amounts invoiced by suppliers, was 
26 days (2004: 36 days).
Share capital
Full details of changes in share capital in the year
are shown in note 23 to the financial statements
on page 70.
19
REPORT OF THE DIRECTORS 2005
Fidelity International Limited 11.9%
F&C Asset Management 10.0%
General Atlantic LLC 7.7%
Insight Investment Management 7.2%
Legal and General
Investment Management 3.4%
Other than the directors, the Company has been
notified of the following interests in more than 3%
of the issued share capital of the Company at the
date of this report:
Annual General Meeting
The Annual General Meeting will be held at 
the Radisson SAS Hotel, Manchester Airport, 
Chicago Avenue, Manchester M90 3RA on 
Monday 25 July 2005.  The resolutions to be
proposed at the Annual General Meeting, together
with explanatory notes, appear in the separate
Notice of Annual General Meeting sent to all
shareholders.  The proxy card for registered
shareholders is distributed with the Annual 
Report and Accounts.
Auditors
The Company has gone through a process of
reviewing its external auditors as detailed in the
Audit Committee Report, and as a result a
resolution will be proposed to appoint Deloitte LLP
at the forthcoming Annual General Meeting.
Approval
The Report of the Directors was approved by 
the Board on 21 June 2005 and signed on its
behalf by:
Teifion Hill
Company Secretary Laboratory specialist.
Information is the key 
to better care. Only true
accessibility, accuracy and
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across disciplinary boundaries
can satisfy the needs of
frontline professionals.
20 21
CORPORATE GOVERNANCE REPORT 2005
Corporate Governance philosophy
and approach
The Board of iSOFT Group plc is committed to the
highest levels of business integrity, high ethical
values and professionalism in all its activities.  As an
essential part of this commitment, the Board
supports the highest standards in corporate
governance and seeks to apply recommended best
practice where this is appropriate for the Group.  
The Board acknowledges that the Group operates
in a rapidly developing business environment.
Changes to the risk profiles in the business
environment arise as a result of both external
challenges, in a highly competitive and politically
driven market place, and through internal
challenges including the growth in the size of the
business and the development of new products,
management systems and procedures.  These
challenges also manifest themselves in greater detail
as risks to the success of the Group’s financial,
operational and compliance activities.  As a result,
the Board is diligent in evaluating and prioritising
each risk and in determining appropriate systems
and controls to detect and address them on an 
on-going basis.  By doing so, the Board believes
that an effective mechanism for continual
improvement in risk mitigation and opportunity
management is being adopted.
The Board of directors
The Group is controlled by the Board which, at 
30 April 2005 comprised the Non-executive
Chairman, the Chief Executive Officer, two further
executive directors and six experienced non-executive
directors, five of whom were independent during
the year.  Biographical details of each director are set
out on pages 15 to 17.  Each non-executive director
is encouraged to contribute to both the full Board
and its committees as appropriate.
The directors are encouraged to bring an
independent judgement to bear on both strategic
and operational matters.  Any director may
challenge company policy and decisions are taken
democratically after discussion. 
There is a formal schedule of matters reserved for
the Board.  These include strategy, approval of
annual budgets, significant investments and risk
management.  Prior to the merger with Torex, the
Board considered what matters should be reserved
to it annually as part of the annual business
planning process.  Following the merger with Torex,
the Board no longer believes this approach to be
appropriate and has adopted a schedule of matters
reserved for the Board that reflects the increased
size and complexity of the Group. 
Statement of directors’ roles
With the objective of ensuring successful creation of
shareholder value within a framework of acceptable
risk, the Board sees its role to include:
• assisting value creation through entrepreneurial 
leadership and by the controlled and measured 
management of a wide range of business risks; 
• deciding the strategic direction and providing 
the resources required to fulfil the future needs 
of the business;
• representing the interests of shareholders and 
satisfying all statutory duties due to them;
• ensuring appropriate behaviour with respect to 
the various codes of corporate governance and 
good business practices and by providing an 
audit trail of accountability;
• overseeing good corporate citizenship and 
ethical behaviour by the Group and its  
employees with regard to all its internal and 
external stakeholders;
• providing a challenging confidential forum, free 
from conflicts, in which the Chief Executive 
Officer can test strategic thinking with an 
informed group having broad continuity 
over time;
• requiring the Chief Executive Officer to report 
openly on the operational performance of all 
parts of the Group;
The Board of directors is committed to the highest levels 
of business integrity, high ethical values and professionalism 
in all its activities. • monitoring the effectiveness of the Chief Executive
Officer and his executive team against a series of 
performance objectives and benchmarks;
• setting a control framework within which the Chief
Executive Officer can operate and authorising his 
decisions on major issues and investments; 
• constituting subcommittees of the Board to 
address the issues of remuneration, appointments 
and audit; and
• providing open disclosure in respect of the 
remuneration of executive directors and senior 
members of staff in order to incentivise other staff.
The directors confirm that they have complied with
the above requirements in performing their roles.
The Board believes that its style of involvement with
management through the Chief Executive Officer
and the executive directors is the most effective way
to provide confidence in the control environment of
the Group.  Through openness, the provision of
well-defined information and discussion, the Board
endeavours to understand and provide leadership as
to the willingness of the Group to take appropriate
risks in the interests of the shareholders.
Shareholder communication
The Board is committed to good communication
with its shareholders and maintaining an open and
proactive dialogue with its institutional investors.
The Board values the views of shareholders and
recognises their interests in the Group’s strategy and
performance.  A regular dialogue is maintained with
investment fund managers, other investors and
equity analysts to ensure that the investing
community receives a balanced and consistent view
of the Group’s performance.
The Chief Executive Officer and Group Finance
Director normally attend investor meetings and
briefings and the Non-executive Chairman attends
as required and, in particular, at the interim and full
year results announcements. 
All shareholders are welcomed to the Annual
General Meeting where the Non-executive Chairman
provides an overview of the Group’s business
performance and future prospects. Shareholders are
encouraged to raise questions and express their
views.  The Non-executive Chairman aims to ensure
that all directors including the chairs of the
committees are available at the meeting to answer
relevant questions.
The Group has established an investor relations facility
on its website where up to date financial and other
information can be found.  In addition, the directors
are currently looking to invest in resources to further
enhance the Group’s investor relation services.
Statement of directors' responsibilities for 
the financial statements
Company law in the United Kingdom requires 
the directors to prepare financial statements for
each financial year which give a true and fair view
of the state of affairs of the Company and the
Group and of the profit or loss of the Group for
that period.
In preparing those financial statements, 
the directors are required to:
• select suitable accounting policies and then 
apply them consistently;
• make judgments and estimates that are 
reasonable and prudent;
• state whether applicable United Kingdom 
accounting standards have been followed, 
subject to any material departures disclosed 
and explained in the financial statements; and
• prepare the financial statements on the going 
concern basis unless it is inappropriate to presume
that the Company will continue in business.
The directors are responsible for keeping proper
accounting records which disclose with reasonable
accuracy at any time the financial position of the
Company and enable them to ensure that the
22 23
CORPORATE GOVERNANCE REPORT 2005
financial statements comply with the Companies
Act 1985.  They are also responsible for safeguarding
the assets of the Company and hence for taking
reasonable steps for the prevention and detection of
fraud and other irregularities.
The directors confirm that they have complied 
with the above requirements in preparing the
financial statements.
The Annual Report is available on the Group’s
website www.isoftplc.com. The maintenance and
integrity of the Group's website is the responsibility
of the directors.  The work carried out by the
auditors does not involve consideration of these
matters and, accordingly, the auditors accept no
responsibility for any changes that may have
occurred to the information contained in the
financial statements since they were initially
presented on the website.
Legislation in the United Kingdom governing 
the preparation and dissemination of the financial
statements and other information included 
in annual reports may differ from legislation 
in other jurisdictions.
Appointments to the Board
Each member of the Board brings different experience
and skills to the operation of the Board and its
various committees.  The Board composition is kept
under review and when a new appointment is to be
made, consideration is given to the particular skills,
knowledge and experience that a potential new
member could add to the existing board composition.
Comprehensive, formal and tailored induction is
provided to new Board members.  The Group has
long recognised the vital role that non-executive
directors have in ensuring high governance
standards and maintains a significant, high calibre,
non-executive representation on the Board.
All directors are required to submit themselves for
re-election at regular intervals and at least every
three years.
Information and professional development
The directors have implemented appropriate
reporting procedures to ensure that they are
supplied with timely, accurate and comprehensive
information to enable the Board to discharge its
duties in full.  Existing Board members have many
years of relevant experience, all are responsible for
ensuring continuing professional development to
maintain up to date and effective skills and
knowledge.  The directors have access to seek
independent advice, at the Group’s expense, if
necessary for the proper performance of their
duties.  The directors also have access to the
Company Secretary for his advice and services.
Performance evaluation
The Board monitors performance against the
achievement of the Group’s strategic objectives.
Each Executive director has defined responsibilities
for performance and measurement of achievement.
These include a mix of financial and non-financial,
predictive and historic indicators. 
Board committees
The Audit Committee, the Nomination Committee
and the Remuneration Committee deal with specific
aspects of the Group’s affairs in accordance with
their written terms of reference.  During the year,
each committee reviewed its respective terms of
reference and amended them to reflect changes to
the size and structure of the Group.  The memberships
of each committee were changed on 6 January 2005.
Each are comprised of only independent non-
executive directors.  The non-executive directors met
twice during the period without the executive
directors being present. The Nomination Committee
Geoff White chairs the Nomination Committee.  Its
terms of reference include the authority to review
and make recommendations to the Board about
Board appointments. Members of the committee
are Sir Digby Jones and David Thorpe.  The
committee met twice during the year.  All members
were present at each meeting with the exception of
Sir Digby Jones who did not attend one meeting.
The Remuneration Committee
The Remuneration Committee is chaired by Colin
Wall.  Sir Digby Jones and Eurfyl ap Gwilym are
members of the committee.  The committee met
four times during the year.  All members of the
committee were present at all meetings except Sir
Digby Jones who did not attend two meetings and
David Thorpe who did not attend one meeting.  The
Remuneration Report is set out on page 31.
The Audit Committee
The Audit Committee is chaired by Eurfyl ap Gwilym.
It met three times during the year.  David Thorpe
and Colin Wall are members of the committee with
other directors and the external auditors invited as
appropriate.  All members were present at each
meeting except David Thorpe and Sir Digby Jones
who each did not attend one meeting.  The report
of the Audit Committee is set out on page 41.
Internal control
The Board retains full responsibility for the Group’s
system of internal controls, which operate on a
global basis, and for reviewing its effectiveness.
However, such a system is designed to manage
rather than eliminate the risk of failure to achieve
business objectives and can, therefore, provide 
only reasonable and not absolute assurance against
material misstatement or loss.  In accordance 
with the Combined Code, the directors have
reviewed the effectiveness of the Group’s system 
of internal controls during the year, including
financial, operational, compliance and risk
management controls.  
Key elements of the Group’s internal controls are:
• a clearly defined management structure and 
delegation of authority to committees of the 
Board, heads of departments and individual 
business units;
• clearly documented internal procedures set out 
in the Group’s ISO 9001:2000 accredited quality 
management system;
24
Patrick Cryne   8  1
Tim Whiston  9
Steve Graham    8
Ravi Kumar
1
----  5
Geoff White  9  2  -- 2  -2  2
Sir Digby Jones     6  1   2  -1  2
Eurfyl ap Gwilym  9  4  3  2
Colin Wall  9  4  3  2
David Thorpe   8  2  -- 1   2  2
Rene Kern   8  1
John Whelan
2
    4
Mark Woodbridge
3
  ----- 1
11 May 2004
9 Jun 2004
22 Jul 2004
9 Sep 2004
19 Nov 2004
6 Jan 2005
11 Feb 2005
14 Mar 2005
21 Apr 2005
Total
14 May 2005
20 Apr 2005
Total
9 Jun 2004
19 Nov 2004
8 Feb 2005
12 Apr 2005
Total
15 Jun 2004
6 Dec 2004
8 Feb 2005
Total
5 Jan 2005
13 Apr 2005
Total
1 Ravi Kumar was appointed as a director on 7 October 2004
2 John Whelan resigned as a director on 27 April 2005
3 Mark Woodbridge resigned as a director on 7 October 2004
4 The composition of the committee changed on 6 January 2005
 = Present    = Not present   - = Not applicable
Table of directors attendance at meetings
Board
Meeting
Nomination
Committee
4
Remuneration
Committee
4
Audit
Committee
4
Non-
executive
meetings 25
CORPORATE GOVERNANCE REPORT 2005
• regular internal quality audits of key processes 
and procedures under the Group’s ISO 9001:2000 
accredited quality management system;
• an internal quality management function;
• high recruitment standards together with formal 
career development and training to ensure the 
integrity and competence of staff;
• regular and comprehensive information provided 
to management, covering financial performance 
and key performance indicators, including 
non-financial measures;
• a detailed budgeting process and rolling three 
year strategic plans;
• procedures for the approval of capital expenditure 
and investment and acquisition projects;
• on-going review of contractual agreements with 
existing and new customers; and
• monthly monitoring and re-forecasting of results 
against budget, with investigation and action 
taken in response to variances. 
In addition, during the year the Group introduced
an internal audit function dedicated to testing
internal financial controls.  Further detail is provided
in the Audit Committee report on page 41.
Compliance with Combined Code provisions
During the year, the Company undertook a full and
detailed review of its compliance with the Combined
Code issued in July 2003 as annexed to the Listing
Rules.  Where the Company was not in compliance
it has taken steps to comply and at the end of the
year believes that the only provisions where it does
not comply are:
• A.2.2 Patrick Cryne is not independent as he 
does not satisfy the independence criteria 
set out in provision A.3.1; and 
• A.4.6 The work of the Nomination Committee 
is not set out in a separate section of the 
Annual Report.
During the year, the Board reviewed the role and
performance of the Board, its committees and
individual directors.  This review resulted in revised
terms of reference for the Board and its committees,
changes to the membership of the committees and
the appointment of a non-executive deputy chairman.
During the year the Audit Committee reviewed the
arrangements for employees to raise concerns about
possible improprieties to ensure compliance with the
Combined Code.  The committee has issued an
open door policy applicable to all employees.
Going concern
The directors are satisfied that the Group has
adequate resources to continue in operational
existence for the foreseeable future, a period of 
not less than twelve months from the date of 
this report.  
For this reason, they continue to adopt the going
concern basis in preparing the financial statements.
The directors have satisfied themselves that the
Group is in a sound financial position and that
sufficient cash resources will be available to meet
foreseeable investment opportunities or other 
cash requirements.
Approval
This report was approved by the Board on 
21 June 2005 and signed on its behalf by:
Geoff White
Non-executive Deputy Chairman New mother. We’re the
expert on us. We’re your
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26 27
CORPORATE SOCIAL RESPONSIBILITY STATEMENT 2005
Commitment to Corporate Social Responsibility
It is iSOFT’s view that operating in an environmentally
and socially sustainable manner provides a stronger
basis for future development of the business
operations, financial performance, protection of
reputation and market valuation.    
Employment policy
The objective of iSOFT’s employment policy is to
support our business goals through the attraction,
retention and realisation of full potential from 
a high-calibre workforce.
The directors recognise the importance of
individual employee contributions in delivering 
the Group’s successful performance to date and
have maintained the commitment that each
employee receives a formal appraisal every six
months.  The appraisal process is an important
means by which individual reward and personal
advancement is determined.
The directors further recognise that sustaining the
Group’s competitive advantage over the longer
term is dependent on employees realising their
potential.  It is Group practice, therefore, to ensure
that employee development, reward and career
advancement takes full account of ability,
commitment and individual contribution to the
collective achievements of the business.  
As an international business, the ability to deploy
employees quickly around the world will impact 
on the future growth capacity of the Group.  
The directors have during the year, created and
strengthened the means by which employees can
be joined into global teams consistent with the
company’s strategic approach to product
development and market penetration.
iSOFT has continued to grow its presence in India
and has established close links to local universities
and proactively supports local community initiatives
such as education sponsorship.
Equal opportunities policy
The Group is a committed equal opportunities
employer and has established working practices 
to promote an employment environment that 
is free from discrimination and harassment.  
The iSOFT policy ensures that no employee, or
applicant, is treated less favourably on the grounds
of gender, marital status, race, colour, disability 
or sexual orientation or is disadvantaged by
conditions or requirements that cannot objectively
be justified.
Disabled individuals are afforded the same
opportunities as others, and the Group actively
supports the employment of disabled persons both
during the recruitment process and in the retention
of employees who become disabled whilst in the
employment of the Group.
It is iSOFT’s view that operating in an environmentally and 
socially sustainable manner provides a stronger basis for future
development of the business operations, financial performance,
protection of reputation and market valuation. Health and safety policy
The health and safety of our employees is of
paramount importance to iSOFT.  
In fostering a working environment which
encourages productivity, participation and
togetherness, the Group has created a workplace
which embraces statutory requirements and best
practice guidelines wherever possible.
Employee equity participation
A significant number of employees have
shareholding interests in the Company either
directly or under share option and ‘Sharesave’
schemes.  The directors actively encourage
employee equity participation, subject always to
the Group’s employee share dealing code rules, 
as they firmly believe that this encourages the
profitable development of the Group.  Details of
the current employee share option schemes and
the options granted during the year are provided
in note 23 to the financial statements on page 70.
Participation in the Sharesave schemes is
encouraged across the Group and membership
levels are high amongst eligible employees.
Business Improvement Programme
The merger of the iSOFT and Torex organisations
was completed during the year and the directors
view the Business Improvement Programme,
established to design and implement a single
Group-wide operating structure, as an 
outstanding success.   
As a result, the Business Improvement Programme
will continue to be operated within the Group with
the objective of delivering continual improvement
in operational and organisational processes.
Employee communication and consultation
During the year, regular employee and management
briefings and communication took place to enhance
individual understanding of the Group’s strategy,
market environment and financial and operating
performance.  Priority was given to ensuring that
employees were made aware of significant matters
relating to the Group’s trading performance,
organisational developments and prospects.
iSOFT has an Employee Consultation Forum
(‘VOiCE’) with elected representatives.  VOiCE was
established to create a means of active involvement,
social dialogue, information dissemination and
communication with the employees of the Group
based within the UK. A similar forum has been
established in Chennai, India. 
The Group has works councils in Germany and
Holland.  The German works council has helped
transition all German employees on to common
terms and conditions.  In Holland, the Group is in
the process of negotiating with the works council
a new collective labour agreement.
28 Social, Environmental and Ethical 
(SEE) matters 
The iSOFT business as a whole recognises that
achieving success in environmental and social
management is a joint responsibility between
employees and management.  Indeed active
employee participation in community events and
charities is strongly supported through the giving
of time and the internal promotion and support
for such activities.
The directors recognise that whilst iSOFT’s business
activities as a developer and supplier of software
applications, have minimal direct environmental
impact, there are environmental impacts in running
a company and our commitment to adopting best
practice evidences our responsibility.
The Group maintains an environmental policy to
raise awareness, establish standards, assess the
impact of its business activities on the environment,
set improvement objectives and monitor
performance against these objectives. 
The Group’s philosophy is to establish a paperless
working environment wherever appropriate.  This 
is supported in practice through the automation 
of a number of internal management and
administrative processes such as performance
appraisals, job profiles and a competency
framework, and annual leave requests.  The Group
continues to look at ways to move closer still to a
paperless working environment.  
The responsibility for maintaining and enforcing
the SEE policy resides at Board level.  A copy of 
the current environmental policy is available on 
the Group website.
Donations
The Board believes that the choice of charitable
activities is a matter of conscience for individual
members of staff, particularly given our wide
involvement with numerous healthcare institutions. 
In response to the Tsunami disaster in December
2004, the Group donated £22,500 to match the
individual donations made by employees.  The
resulting total was then donated to relief
organisations operating in the communities
neighbouring our development centre in Chennai,
India to assist with recovery of the local affected
areas.  Other charitable donations during the year
totalled £10,000 (2004: nil). 
iSOFT made no financial contributions to political
parties in the year.
Approval
This report was approved by the Board on 
21 June 2005 and signed on its behalf by:
Tim Whiston
Chief Executive Officer
29
CORPORATE SOCIAL RESPONSIBILITY STATEMENT 2005 Hospital CIO. Technology 
has the potential to transform
our experience of healthcare.
Combined with the dedication
and commitment of healthcare
professionals, it can improve
the quality of life for all.
30 31
REMUNERATION REPORT 2005
Introduction
This report sets out the iSOFT Group executive
remuneration policy, structure and details of
remuneration received by directors in the year
ended 30 April 2005 as required by the Directors’
Remuneration Report Regulations 2002.  There were
no major changes to remuneration in 2005 as
compared to 2004.  A number of changes are
proposed for next year and these are outlined in
detail later in this report. 
Role of the Remuneration Committee
The Remuneration Committee is responsible for:
• establishing and recommending to the Board 
the policy for executive remuneration;
• determining, on behalf of the Board and 
shareholders, the level and structure of 
remuneration packages of the executive 
directors and selected senior executives; and
• reviewing and ensuring the alignment of 
executive remuneration with remuneration 
throughout the organisation, including 
company share schemes.
The remuneration of non-executive directors 
is determined by the Board as a whole.  No
director is involved in discussions relating to his
own remuneration.
Membership and meetings
The members of the Remuneration Committee
during the year were Colin Wall, appointed 
11 May 2004 and chair of the committee since 
6 January 2005, Sir Digby Jones, Eurfyl ap Gwilym,
Geoff White, chair until he resigned from the
committee on 6 January 2005, and David Thorpe
who was appointed to the committee on 
11 May 2004 and resigned on 6 January 2005.
All of the members of the committee are
independent non-executive directors.  The committee
met four times during the year.  Details of
attendance at meetings can be found on page 24.
Advisers
During the year the Remuneration Committee
received guidance on executive remuneration from
the Non-executive Chairman, the Chief Executive
Officer, the Group HR Director and the Company
Secretary, except on matters relating to their own
remuneration.  The committee received advice from
New Bridge Street Consultants LLP who have been
appointed to provide independent external advice.
The Company has also been assisted by Kepler
Associates Ltd during the year.  No other services
were provided to the Company during the year by
New Bridge Street or by Kepler Associates Ltd.  
Executive directors’ remuneration policy
The Remuneration Committee aims to align
executive director and senior management
interests with the interests of shareholders by
ensuring that remuneration at senior levels is
weighted toward performance-related elements.
The policy is also specifically designed to attract,
retain and motivate the talent the business needs.
Remuneration packages of the executive directors
are reviewed annually to ensure that they remain
aligned with the Group’s business objectives and
the creation of shareholder value.  During the year,
the committee carried out a full review of iSOFT’s
executive remuneration policies and practices to
ensure that they are competitive and appropriate
for a company of iSOFT’s size and structure, and
that policy reflects current best practice.  As a
result of this review, the committee has developed
an updated remuneration policy which provides 
a competitive base salary with a significant
proportion of remuneration linked directly to
Group and individual performance.  
The Remuneration Committee aims to align executive director and
senior management interests with the interests of shareholders by
ensuring that remuneration at senior levels is weighted toward
performance related elements. 32
The proposed arrangements are highly
performance-oriented, and are intended to deliver
upper quartile levels of reward for outstanding
performance.  The new proposals, outlined later in
this report will, subject to approval by shareholders,
result in decreased remuneration for below average
performance and higher reward for superior
performance. The proposed mix of incentives has
been rebalanced towards long term performance.
Remuneration for the year ended 
30 April 2005
The remuneration of executive directors during 
the year comprised the following:
• base salary;
• annual performance bonus;
• share options;
• pension contribution; and
• other benefits.
Base salary
Base salaries are reviewed annually and
adjustments made where necessary to reflect
changes in responsibilities, individual performance
and market rates. 
As a result of the review conducted during the
year, the committee determined that, in future, the
competitiveness of pay will be assessed primarily in
terms of total remuneration, with less emphasis on
base salary alone.  Base salary and total
remuneration levels are benchmarked against
similar positions in comparable companies.  There
were no increases in base salary for the executive
directors during the year.  Details of Directors’
emoluments are set out on page 36.
Annual performance bonus
The Group provides performance related bonuses
for executive directors.  Bonuses are payable at the
discretion of the committee based on the Group’s
financial performance and individual performance.
The financial performance targets are set with
reference to, amongst other things, Group
normalised profit before tax, amended for the
impact of any acquisitions.  The committee 
ensures that the individual performance criteria 
are suitably challenging and as such are aligned
with shareholder interests.
For the year ended 30 April 2005, performance
related bonuses for executive directors were
restricted to 200% of basic annual salary.  The
maximum bonus would be payable only in the
event of outstanding performance, substantially in
excess of the targets set.
As in previous years, 50% of any bonus earned was
payable in the form of shares in the Company
(‘Bonus Shares’) under a deferred share bonus plan.
The monetary value of the bonus not taken up in
cash is translated into shares based on the average
market price of the Company’s shares in the three
trading days preceding the award date.  The only
remaining condition attaching to the above awards
is that the directors remain in employment with
the Company for three years from the date of the
relevant award.
Exceptionally, Bonus Shares may be released early
if the executive director ceases to hold
employment with the Group by reason of death,
disability, injury, redundancy, retirement or otherwise
if the Remuneration Committee so determines.
Bonus Shares may also be released early in the
event of a takeover or corporate reconstruction of
the Group.  Following the awards made in respect
of the year ended 30 April 2005, it is not intended
to make any further awards under the deferred
share bonus plan. 33
REMUNERATION REPORT 2005
The average market price of the Company’s shares
on the three trading days prior to 30 April 2003
was 265 pence, for the three trading days prior to
30 April 2004 was 409 pence, and for three
trading days prior to 30 April 2005 was 355 pence.
There have been no variations in the terms and
conditions of the deferred share bonus plan during
the year.
Bonuses paid to executive directors for the year
ranged from 119% to 135% of base salary,
reflecting the fact that performance in the year did
not meet in full the stretch performance targets
set.  Details of the annual performance bonuses
and Bonus Shares awarded in this year are set out
on pages 36 and 38 respectively.
Under the new proposals, annual bonuses for the
year ending 30 April 2006 and for subsequent
years will be capped at 100% of base salary.
Share options
The Group operates an approved and an
unapproved share option scheme.  All options
granted to executive directors are subject to the
achievement of certain performance conditions.
Details of the share options granted to date are set
out on page 37.
Options granted during the year have challenging
performance targets, based on normalised profit
before tax growth in the three years following 
the grant. 
Following approval of the new proposals it is not
intended to make any further awards to executive
directors under the share option schemes other
than in exceptional circumstances such as
recruitment of a new executive director.
Pension contributions
The Group makes an annual payment to executive
directors equal to 20% of base salary. Directors are
responsible for using these funds to make their
own pension arrangements. The Company does
not operate a defined benefit scheme for directors.
Details of the contributions paid to the executive
directors during the year are set out on page 39.
Other benefits
Other benefits comprise private medical insurance
and life assurance.  One director was entitled to a
car allowance.
Service contracts and termination
provisions policy
The Combined Code and the latest guidelines
issued by institutional investors recommend that
notice periods of no more than one year be set as
an objective for executive directors and that any
payments to a departing executive director should
be determined having full regard to the duty of
mitigation.  It is the Company’s intention to achieve
these objectives, wherever possible.
Details of the service contracts of those serving as
executive directors at the year end are set out below.
Contract Unexpired Notice Termination
date term period payments
T Whiston 25 Mar 2003 Rolling 12 months 1 year’s salary plus 1 year’s pension 
contribution and benefits
S Graham 19 May 2000 Rolling 12 months 1 year’s salary plus 1 year’s pension 
contribution and benefits
R Kumar 01 Nov 2004 Rolling 12 months 1 year’s salary plus 1 year’s pension 
contribution and benefits 34
The Company’s policy is that in normal
circumstances executive directors should have
rolling service contracts with an indefinite term
providing for a maximum of one year’s notice from
either party to reflect market practice. 
With effect from 14 December 2004, when he
became Non-executive Chairman, Patrick Cryne’s
base salary was reduced to £200,000 and he
ceased to be entitled to a bonus for subsequent
periods.  He is still entitled to private medical
insurance, life assurance and pension. 
Roger Dickens resigned as a director of iSOFT on
23 December 2003.  He is retained by the Group 
as a Business and Strategy Executive under a
service contract effective 23 December 2003 and 
is paid an aggregate annual remuneration of
£360,000. He is not entitled to any performance
related or other bonus.  The contract is for a fixed
period until 23 December 2006 and thereafter
until terminated by either party giving to the other 
nine weeks notice.
External appointments
The consent of the Board is required for any
external appointments proposed by an individual
director, such as a non-executive director position
with another company, to ensure that the
appointment does not give rise to a conflict of
interest.  Where an appointment is accepted, it
must be undertaken in the director’s own time.
The director is permitted to retain any remuneration
earned from the external appointment.
Proposed new arrangements
In summary, the Remuneration Committee
proposes to:
• reduce the annual bonus maximum from 200% 
to 100% of basic salary;
• introduce a new Performance Share Plan which 
would provide nil-cost options over shares or 
conditional shares to a value of up to 200% 
of salary with the level of vesting dependent on 
iSOFT’s 3-year Total Shareholder Return relative 
to the FTSE Software and Computer Services 
Index.  Further, executives may not be granted 
awards under the share option scheme in any 
year in which they receive an award under the 
proposed Performance Share Plan other than in 
exceptional circumstances, for example in the 
year of their appointment to the Board;
• allow executive directors to invest up to 100% 
of their annual bonus into iSOFT shares, with the 
opportunity to earn a match of up to 3 for 1 
based on stretching 3-year Earnings per Share 
(EPS) growth targets; and
• introduce a share ownership guideline of 
125% of salary for executive directors.
The Performance Share Plan (PSP) 2005
Executives would receive annual grants of nil-cost
options or conditional shares, vesting 3 years from
the date of grant to the extent to which the
performance condition has been achieved.  Initial
awards would have a value of 125% of base
salary.  Grant sizes would be reviewed from time
to time, taking account of total remuneration for
executives within the Group versus the market.  It
is not intended to change the grant sizes each year
but there would be an overall annual plan limit of
200% of base salary to allow flexibility in
exceptional circumstances.
The performance measure would be iSOFT’s Total
Shareholder Return (TSR), i.e. share price growth
and dividends, relative to that of the companies
that make up the FTSE Software & Computer
Services Index.    35
REMUNERATION REPORT 2005
The graph below illustrates TSR performance of
the Company in comparison to the FTSE Software
& Computer Services Index over the period since
listing in July 2000.  The Committee has decided
that the FTSE Software & Computer Services Index 
is a suitable comparator as the Company has been
a constituent of this index for a significant period
since flotation.
No options or conditional shares would vest if iSOFT
is ranked below median, 20% of shares would vest
for median performance and full vesting would
occur only for top quartile performance.  Vesting
between median and upper quartile would be on a
straight-line basis.  The executives will be entitled
to a payment equal to the dividends which would
have been due during the three year performance
period on those shares that actually vest.
The Bonus Co-investment Plan (BCP) 2005
Subject to shareholder approval, executives would
be able to voluntarily commit up to 100% of their
earned annual bonus into iSOFT shares. Committed
shares would be held in an employees’ trust
established by iSOFT for a period of 3 years.
At the end of the holding period, executives could
receive a matching share award in the form nil-cost
option or matching shares.  The maximum value of
shares subject to a matching share award would be
up to 300% of the value of the gross annual bonus
used to purchase the executive’s committed shares,
depending on EPS growth over the 3 years.  The
number of matching shares awarded would be
based on a straight line from zero at EPS growth
of 5% per annum to 3 for 1 at 20% growth 
per annum.
The Remuneration Committee believes that the
combination of TSR and EPS, as the performance
conditions on which the proposed long-term share
incentive arrangements would vest, provides a
better alignment between the interests of
shareholders and executives.  Executives will be
rewarded for delivery of superior TSR compared to
companies in the FTSE Software & Computer
Services Index and for exceptional growth in EPS.  
Kepler Associates Ltd advised the Company that
the fair value of the long term incentive
arrangements, taking into account the TSR
performance requirements for the PSP 2005 and
the EPS scale for the BCP 2005, is 113% of base
salary, compared to 111% under the current plans.
The plans have been designed with reference to
the relevant ABI guidelines.
The proposed PSP 2005 and BCP 2005 will be
submitted for shareholder approval at the Annual
General Meeting on 25 July 2005. 
50
0
100
150
200
250
300
350
%
OCT
00
OCT
01
OCT
02
DATE
OCT
03
OCT
04
APR
01
APR
02
APR
03
APR
04
APR
05
iSOFT
FTSE SOFTWARE &
COMPUTER SERVICES
INDEX
Relative TSR
Performance Base salary Benefits
*
Performance Total Total Prevailing
earned/fees related 2005 2004 base
bonus salary/fees
payable at 30 April
in cash 2005
£’000 £’000 £’000 £’000 £’000 £’000
Patrick Cryne 341 1 158 500 635 200
Tim Whiston 430 1 290 721 605 430
Steve Graham 360 1 243 604 581 360
John Whelan
1
270 1 320 591 90 -
Ravi Kumar
2
140 4 112 256 - 250
Geoff White 80 - - 80 41 120
Sir Digby Jones 60 - -6041 60
Eurfyl ap Gwilym 60 - - 60 41 60
Colin Wall 48 - - 48 15 60
David Thorpe 45 - - 45 15 50
Rene Kern
3
-- - - - -
Roger Dickens
4
- - - - 218 -
Chris Moore
5
- - - - 31 -
Mark Woodbridge
6
130 - - 130 141 -
Total 1,964 8 1,123 3,095 2,454 1,590
* Benefits comprise private medical insurance, life assurance and car allowances.  Pension contributions made by the Company are shown 
separately on page 39.
Directors’ emoluments (audited)
Directors’ remuneration for the year ended 30 April 2005 was as follows:
1 John Whelan resigned as a director on 27 April 2005.
The Remuneration Committee has exercised its discretion such 
that the performance bonus earned in the year was paid in 
cash, with no award payable in shares under the deferred 
share bonus plan.
2 Ravi Kumar was appointed as a director on 7 October 2004.
3 Rene Kern is a director but receives no fee.
4 Roger Dickens resigned as a director on 23 December 2003 
and has been retained as an adviser under a service agreement.
5 Chris Moore resigned as a director on 2 February 2004.  
He received £1,000,000 during the year as compensation 
for loss of office.
6 Mark Woodbridge resigned on 7 October 2004. He received 
£495,000 during the year as compensation for loss of office.
In addition to the amounts shown above, a gain of £139,000 
was made on the exercise of share options whilst a director of 
the Company. 
36 37
REMUNERATION REPORT 2005
Exercise At 1 May Granted At 30 April Date from Expiry
price 2004
*
during 2005 which date
pence the year exercisable
Tim Whiston
110
1
101,000 - 101,000
3
11 Jul 2003 10 Jul 2010
174
1
250,000 - 250,000
3
20 Dec 2003 19 Dec 2010
249
1
850,000 - 850,000
3
22 Jun 2004 21 Jun 2011
145
2
480,176 - 480,176 11 Oct 2005 10 Oct 2012
145
2
19,824 - 19,824 11 Oct 2005 10 Oct 2012
372
2
- 430,000 430,000 9 Feb 2008 8 Feb 2015
Steve Graham
372
2
- 351,929 351,929 9 Feb 2008 8 Feb 2015
372
2
- 8,071 8,071 9 Feb 2008 8 Feb 2015
Ravi Kumar
110
1
101,000 - 101,000
3
11 Jul 2003 10 Jul 2010
218
1
125,000 - 125,000
3
11 Oct 2004 10 Oct 2011
151
2
80,176 - 80,176 30 Sep 2005 29 Sep 2012
151
2
19,824 - 19,824 30 Sep 2005 29 Sep 2012
338
2
150,000 - 150,000 24 Mar 2007 23 Mar 2014
372
2
- 250,000 250,000 9 Feb 2008 8 Feb 2015
* Or at date of appointment if later.
Share options (audited)
In addition to the directors’ share interests noted in the Report of the Directors on page 18, the following
share options have been granted to directors:
Tim Whiston, Patrick Cryne, Steve Graham and Ravi Kumar participate in the Group’s Sharesave schemes.
At both 1 May 2004 and 30 April 2005, each were entitled to purchase 5,422 shares at a price of 
175 pence per share from 1 October 2005.  These rights expire on 31 March 2006.
1 Options are exercisable subject to the performance of the 
Company's Total Shareholder Return (TSR) relative to growth in the 
Retail Price Index (RPI) over the three year period from the date of 
grant of the option: 
• 25% of options may be exercised if the Company's TSR over 
the period exceeds the growth in RPI by 20%
• 50% of options may be exercised if the Company's TSR over 
the period exceeds the growth in RPI by 35%
• 100% of options may be exercised if the Company's TSR over 
the period exceeds the growth in RPI by 50%
2 Options are exercisable subject to the growth in the Company's 
normalised profit before tax relative to the growth in RPI over the 
three year period from the date of grant of the option:
• 50% of options may be exercised if normalised profit before 
tax growth exceeds the growth in RPI by 10% 
• 100% of options may be exercised if normalised profit before 
tax growth exceeds the growth in RPI by 20%.
In both cases, where the performance target growth falls between 
the levels specified, the proportion of options that may be exercised
will be calculated on a straight line basis. Where the growth is less 
than the minimum growth level specified above, all of the 
options lapse and cease to be exercisable.
3 The performance criteria for these options have been satisfied. 38
Non-executive directors
Non-executive directors do not have service
agreements and are appointed under letters of
appointment.  There are no provisions for early
termination payments. Re-appointment is not
automatic and current terms of appointment
expire in May 2006, except in the case of David
Thorpe and Colin Wall, whose appointments were
effective in December 2003 and expire in
December 2006.  Letters of appointment are
available for inspection at the Company’s
registered office.
The remuneration of non-executive directors is
determined by the Board with regard to market
comparatives. Independent advice is sought to
ensure parity is maintained with similar businesses.
The basic annual fee for non-executive directors
was increased during the year in line with market
comparatives and commensurate with the 
growth in the size of the Company.  The Board
may pay additional remuneration for any services
outside the scope of the ordinary duties of 
a non-executive director.
The mid market price of the Company’s shares at 
1 May 2004 and 30 April 2005 was 416.0 pence
and 351.0 pence respectively.  The range during
the financial year was between 320.5 pence and 
446.0 pence.
Deferred share bonus awards (audited)
Shares awarded to the directors and former directors under the deferred share bonus plan are as follows:
Award date At 1 May Shares Lapsed At 30 April Vesting date
2004 awarded number 2005
number number number
Patrick Cryne 30 April 2003 95,351 - - 95,351 1 May 2006
30 April 2004 62,378 - - 62,378 1 May 2007
30 April 2005 - 44,507 - 44,507 1 May 2008
Tim Whiston 30 April 2003 95,351 - - 95,351 1 May 2006
30 April 2004 63,112 - - 63,112 1 May 2007
30 April 2005 - 81,690 - 81,690 1 May 2008
Steve Graham 30 April 2003 82,637 - - 82,637 1 May 2006
30 April 2004 61,644 - - 61,644 1 May 2007
30 April 2005 - 68,450 - 68,450 1 May 2008
Ravi Kumar 30 April 2005 - 47,605 - 47,605 1 May 2008
John Whelan
1
30 April 2004 39,628 - - 39,628 1 May 2007
Roger Dickens 30 April 2003 76,403 - - 76,403 1 May 2006
Mark Woodbridge 30 April 2004 9,173 - 9,173 - -
1 The Remuneration Committee exercised its discretion to allow John Whelan to retain his deferred bonus shares. 39
REMUNERATION REPORT 2005
2005 2004
£’000 £’000
Patrick Cryne 68 76
Tim Whiston 86 69
Steve Graham 72 66
John Whelan 54 11
Ravi Kumar 28 -
Roger Dickens - 43
Chris Moore - 6
Total 308 271
Pension contributions (audited)
Combined Code
The Committee and its operation comply with the
principles of good governance and the Combined
Code on corporate governance as appended to
the Listing Rules of the FSA.
Share ownership guideline
To further align the interests of shareholders and
executives, the Committee has proposed to introduce
a share ownership guideline of 125% of salary for
executive directors at the same time as introducing
the proposed new incentive arrangements.
Approval
This report was approved by the Board on 
21 June 2005 and signed on its behalf by:
Colin Wall
Chair of the Remuneration Committee Ward nurse.  Being connected
and supported to provide the
care patients need, when and
how they need it, is a
fundamental concept of
modernised healthcare.
40 41
AUDIT COMMITTEE REPORT 2005
Role of the Audit Committee 
The Audit Committee is responsible for making
recommendations on the appointment of external
auditors, the level of the audit fee and for ensuring
their independence.  The committee reviews
proposed results publications and the effectiveness
of internal controls. In addition, it also responsible
for risk management.
Audit Committee membership and meetings 
The Audit Committee is chaired by Eurfyl ap Gwilym.
The other members of the committee are David
Thorpe and Colin Wall both from 11 May 2004.
Geoff White and Sir Digby Jones were members 
of the committee until 6 January 2005.  All
members of the committee are independent 
non-executive directors. Other directors and the
external auditors are invited to Audit Committee
meetings as appropriate.
The committee met three times during the year
with the Group finance team and were joined by
the external auditors on two occasions.  In
addition, the committee also met with the external
auditors without the executive directors being
present on two occasions.  All of the committee
meetings were fully attended, save that Sir Digby
Jones and David Thorpe were absent from one of
the meetings each.  Details of the remuneration of
the members of the committee are set out on
page 36 of the Remuneration Report.
Financial statements, internal financial
controls and risk management systems 
The Audit Committee meets to review the Group’s
annual and interim financial statements, internal
management arrangements, accounting policies
and internal financial controls.  
The committee continues to review the risk
management processes and the internal control
framework in place throughout the organisation.
The key elements of this framework are summarised
in the Corporate Governance report included
within this annual report.
External auditors
The Audit Committee also reviews annually the
performance of the Group’s external auditors 
to ensure that an objective, professional and 
cost-effective relationship is maintained.  The 
committee is also responsible for monitoring 
non-audit fees paid to the external auditors to
ensure that no conflicts of interest arise. 
It was agreed by the Board and the committee that
it would be appropriate to review the choice of
external auditors during the year.  The committee
followed a structured process that involved
meetings with candidate firms, receipt of written
proposals and oral presentations.  The committee
decided that the strongest candidate firm was
Deloitte LLP .  The Company will propose at the
Annual General Meeting that Deloitte LLP be
appointed as the Company’s external auditor.
The committee must authorise all non-audit work
above £5,000 commissioned from the external
auditors in advance of such work being undertaken.
The committee has reviewed the non-audit fees paid
to the external auditors which, in aggregate, totalled
£32,000 and has deemed that in the year ended
30 April 2005 they do not affect independence.  
Internal audit function 
During the year, the Group introduced an internal
financial audit function, outsourced to Ernst &
Young LLP, to further enhance the existing internal
control framework.  Work performed to date has
included the documentation of a risk assessment
and controls review for all Group entities together
with verification of this documentation within two
territories.  It is anticipated that all territories will
be subject to verification over the next 12 months. 
The internal auditors report formally to the 
Audit Committee.   
The Group also has an internal quality audit team
which focuses on ensuring that the Group complies
with rigorous quality processes covering both
operational and financial procedures.  The Group’s
quality processes are also subject to annual external
audits which all received satisfactory results during
the year.
Approval
The report was approved by the Board on 
21 June 2005 and signed on its behalf by:
Eurfyl ap Gwilym
Chair of the Audit Committee Independent Auditors’ Report to the
shareholders of iSOFT Group plc
We have audited the financial statements on pages
45 to 73.  We have also audited the information in
the Remuneration Report that is described as
having been audited.
This report is made solely to the Company’s
shareholders, as a body, in accordance with
Section 235 of the Companies Act 1985.  Our
audit work has been undertaken so that we might
state to the Company’s shareholders those matters
we are required to state to them in an auditors’
report and for no other purpose.  To the fullest
extent permitted by law, we do not accept or
assume responsibility to anyone other than the
Company and the Company’s shareholders as a
body, for our audit work, for this report, or for the
opinions we have formed.
Respective responsibilities of directors 
and auditors
The directors’ responsibilities for preparing the
Annual Report, the Remuneration Report and the
financial statements in accordance with applicable
law and United Kingdom Accounting Standards
are set out in the Statement of Directors’
Responsibilities on pages 22 and 23.
Our responsibility is to audit the financial statements
and the part of the Remuneration Report to be
audited in accordance with relevant legal and
regulatory requirements, United Kingdom Auditing
Standards and the Listing Rules of the Financial
Services Authority.  We report to you our opinion
as to whether the financial statements give a true
and fair view and whether the financial statements
and the part of the Remuneration Report to be
audited have been properly prepared in accordance
with the Companies Act 1985.  We also report to
you if, in our opinion, the Report of the Directors is
not consistent with the financial statements, if the
Company has not kept proper accounting records,
if we have not received all the information and
explanations we require for our audit, or if
information specified by law or the Listing Rules
regarding directors’ remuneration and transactions
with the Company and other members of the
Group is not disclosed.
We review whether the Corporate Governance
Statement reflects the Company’s compliance with
the nine provisions of the Combined Code on
Corporate Governance issued by the Financial
Reporting Council into 2003 specified for our
review by the Listing Rules of the Financial Services
Authority and we report if it does not.  We are not
required to consider whether the Board’s statements
on internal control cover all risks and controls or
form an opinion on the effectiveness of the Group’s
corporate governance procedures or its risk and
control procedures.
We read other information contained in the
Annual Report and consider whether it is
consistent with the audited financial statements.
The other information comprises the Letter from
the Chairman, the Chief Executive’s Report, the
Operating and Finance Review, the Corporate
Governance Report, the Corporate Social
Responsibility Statement, the unaudited part of the
Remuneration Report, the Audit Committee Report
and the Five Year Summary.  We consider the
implications for our report if we become aware 
of any apparent misstatements or material
inconsistencies with the financial statements.  
Our responsibilities do not extend to any 
other information.
Basis of audit opinion
We conducted our audit in accordance with United
Kingdom Auditing Standards issued by the Auditing
Practices Board.  An audit includes examination, on
a test basis, of evidence relevant to the amounts
and disclosures in the financial statements and the
part of the Remuneration Report to be audited.  
It also includes an assessment of the significant
estimates and judgements made by the directors in
the preparation of the financial statements, and of
whether the accounting policies are appropriate 
to the Group's circumstances, consistently applied
and adequately disclosed.
We planned and performed our audit so as to
obtain all the information and explanations which
we considered necessary in order to provide us
with sufficient evidence to give reasonable
assurance that the financial statements and the
part of the Remuneration Report to be audited are
free from material misstatement, whether caused
by fraud or other irregularity or error.  In forming
our opinion we also evaluated the overall adequacy
of the presentation of information in the financial
statements and the part of the Remuneration
Report to be audited.
Opinion
In our opinion:
• the financial statements give a true and fair view 
of the state of affairs of the Company and the 
Group as at 30 April 2005 and of the Group’s 
profit for the year then ended; and
• the financial statements and the part of the 
Remuneration Report to be audited have been 
properly prepared in accordance with the 
Companies Act 1985.
42
INDEPENDENT AUDITORS’ REPORT 2005
RSM Robson Rhodes LLP
Chartered Accountants and Registered
Auditors. Manchester, England
21 June 2005 43
FINANCIAL STATEMENTS 2005  * stated before amortisation of goodwill and exceptional items
There is no difference between the results reported above and those on a historical cost basis.
Note Continuing Continuing 
operations: operations:
Ongoing Acquisitions Total Total
2005 2005 2005 2004
£'000 £'000 £'000 £'000
Turnover 2 261,692 300 261,992 149,260
Net operating costs 3 (213,817) (154) (213,971) (128,948)
Operating profit before goodwill 
amortisation and exceptional items 71,812 146 71,958 39,533
Goodwill amortisation (25,221) - (25,221) (11,310)
Exceptional items 3 1,284 - 1,284 (7,911)
Operating profit 3 47,875 146 48,021 20,312
Net interest payable and similar charges 4 (3,136) (2,614)
Other finance cost 22iii (361) (105)
Profit on ordinary activities 
before taxation 44,524 17,593
Tax on profit on ordinary activities 7 (19,009) (6,809)
Profit on ordinary activities 
after taxation 25,515 10,784
Minority interests - equity (297) (85)
Profit for the financial year 25,218 10,699
Dividends on equity shares 9 (5,874) (4,711)
Retained profit for the year 19,344 5,988
Earnings per share:
Basic 10 11.10p 6.66p
Diluted 10 10.97p 6.57p
Underlying
*
10 21.81p 17.70p
Consolidated profit and loss account 
for the year ended 30 April 2005
45
FINANCIAL STATEMENTS 2005 Consolidated statement of total recognised gains and losses 
for the year ended 30 April 2005
Group Company Group Company
2005 2005 2004 2004
£’000 £’000 £’000 £’000
Profit for the financial year 25,218 7,526 10,699 7,248
Dividends (5,874) (5,874) (4,711) (4,711)
19,344 1,652 5,988 2,537
Other recognised gains and losses 90 - (216) -
Shares issued net of costs 6,646 6,646 372,895 372,895
Net increase in shareholders’ funds 26,080 8,298 378,667 375,432
Opening shareholders’ funds 451,937 430,551 73,270   55,119
Closing shareholders’ funds 478,017 438,849 451,937 430,551
Reconciliation of movements in shareholders’ funds
for the year ended 30 April 2005
Note 2005 2004
£'000 £'000
Profit for the financial year 25,218 10,699
Foreign exchange loss (2) (243)
Actuarial gain/(loss) recognised in the pension scheme 22iv 132 (40)
Movement on deferred tax relating to actuarial gain/(loss)
recognised in pension scheme 22v (40) 67
Total recognised gains for the financial year 25,308 10,483
46
FINANCIAL STATEMENTS 2005 Note 2005 2004
£’000 £’000
Fixed assets
Intangible assets – goodwill 11 456,434 473,237
Tangible assets 12 11,116 11,870
467,550 485,107
Current assets
Assets held for resale 15 1,000 7,500
Stocks 1,211 3,837
Debtors 16 117,705 106,936
Cash at bank and in hand 110,140 75,034
230,056 193,307
Creditors: amounts falling due within one year 17 (165,299) (142,397)
Net current assets 64,757 50,910
Total assets less current liabilities 532,307 536,017
Creditors: amounts falling due after one year 18 (43,062) (67,212)
Provisions for liabilities and charges 21 (4,336) (10,487)
Net assets excluding pension liability 484,909 458,318
Pension liability 22 (6,417) (6,119)  
Net assets including pension liability 478,492 452,199
Capital and reserves
Called up share capital 23 22,778 22,542
Share premium account                                               24 43,082 36,672
Merger reserve                                                            24 336,907 363,865
Profit and loss account                                               24 75,250 28,858
Equity shareholders’ funds 478,017 451,937
Minority interests - equity 475 262
Capital employed 478,492 452,199
Consolidated balance sheet 
as at 30 April 2005
The financial statements were approved by the Board of Directors on 21 June 2005 and signed on its behalf by:
Tim Whiston
Chief Executive Officer
Steve Graham
Group Commercial Director
47
FINANCIAL STATEMENTS 2005 48
FINANCIAL STATEMENTS 2005
Note 2005 2004
£’000 £’000
Fixed assets
Tangible fixed assets 12 1,041 -
Investments 13 445,598 444,825
446,639 444,825
Current assets
Debtors 16 100,630 114,588
Cash at bank and in hand 366 -
100,996 114,588
Creditors: amounts falling due within one year 17 (70,552) (67,911)
Net current assets 30,444 46,677
Total assets less current liabilities 477,083 491,502
Creditors: amounts falling due after one year 18 (38,226) (60,951)
Provisions for liabilities and charges 16 (8) -
Net assets 438,849 430,551
Capital and reserves
Called up share capital 23 22,778 22,542
Share premium account 24 43,082 36,672
Merger reserve 24 363,865 363,865
Profit and loss account 24 9,124 7,472
Equity shareholders’ funds 438,849 430,551
Company balance sheet 
as at 30 April 2005
The financial statements were approved by the Board of Directors on 21 June 2005 and signed on its behalf by:
Tim Whiston
Chief Executive Officer
Steve Graham
Group Commercial Director Note 2005 2004
£'000 £'000
Net cash inflow from operating activities before
cash outflow from restructuring 81,770 35,938
Cash outflow from restructuring (5,441) (319)
Net cash inflow from operating activities 25 76,329 35,619
Returns on investments and servicing of finance
Interest 1,254 785
Interest paid (4,222) (3,199)
Issue costs of new bank loans (327) (608)
Finance lease interest paid (7) (57)
Net cash outflow from returns on investments 
and servicing of finance (3,302) (3,079)
Taxation (9,529) (5,325)
Capital expenditure 
Payments for tangible fixed assets (3,566) (3,034)
Receipts from sale of tangible fixed assets 234 896
Net cash outflow from capital expenditure (3,332) (2,138)
Acquisitions and disposals
Purchase of subsidiary undertakings 14 (684) (4,633)
Overdrafts acquired with subsidiary undertakings 14 - (5,134)
Deferred consideration paid on prior year acquisitions (7,315) (2,126)
Disposal of assets held for resale 2,223 60,794
Net cash (outflow) / inflow from acquisitions and disposals (5,776) 48,901
Equity dividends paid (5,560) (2,365)
Net cash inflow before financing 48,830 71,613
Financing
Issue of ordinary shares 5,874 6,067
Expenses paid in connection with ordinary share issue - (1,890)
New bank and other loans - 70,000
Repayment of bank and other loans (18,973) (115,965)
Capital element of finance lease payments made (624) (341)
Net cash outflow from financing (13,723) (42,129)
Increase in cash 26 35,107 29,484
Consolidated cash flow statement 
for the year ended 30 April 2005
49
FINANCIAL STATEMENTS 2005 50
FINANCIAL STATEMENTS 2005
Notes to the financial statements
The financial statements have been prepared under the historical cost convention in accordance with the
Companies Act 1985 and applicable accounting standards.  The accounting policies have been applied
consistently throughout both the current year and preceding year. 
The principal accounting policies adopted by the directors are described below:
i_Basis of consolidation
The consolidated financial statements incorporate the financial statements of the Company and its
subsidiary undertakings using acquisition accounting.  The results of subsidiary undertakings acquired or
disposed of during a financial year are included from, or up to, the effective date of acquisition or
disposal. Inter-company transactions and balances are eliminated on consolidation.  Where a subsidiary
is held exclusively for resale, the financial results of that company are not consolidated.
ii_Goodwill
Positive goodwill is the excess of the fair value of consideration paid for an acquired entity over the
aggregate of the fair values of that entity’s identifiable assets and liabilities.  Positive goodwill relating to
acquisitions is shown in the balance sheet as an asset.  On completion of each acquisition the directors
estimate the useful economic life and it is over this period that the goodwill is amortised on a straight-
line basis.  For transactions where the primary objective is the acquisition of customer base, and where
the customer relationships continue under multi-year contract arrangements, the directors believe it
appropriate to ascribe useful economic lives of up to 20 years.  To date all acquisitions have been
assessed by directors to have useful economic lives of 20 years.  In addition to systematic amortisation,
the book value is written down to recoverable amount when any impairment in value is identified.
Where goodwill is subsequently adjusted following the finalisation of contingent deferred consideration,
the revised carrying value of goodwill is amortised on a prospective basis over its remaining useful
economic life.  Where a merger reserve is created on acquisition, goodwill amortisation charged in the
year relating to the acquisition is transferred to the merger reserve from the profit and loss reserve.
iii_Research and development
Research and development costs are fully written off in the year in which they are incurred.
iv_Turnover
The Group’s revenues are derived from the sale of software product licenses, the attendant installation,
maintenance and support service revenues, supplies of third party hardware and software, and the
development of bespoke software for individual customers.  All revenue is reported exclusive of value
added tax and other sales tax.
The Group follows guidance set out under US GAAP, in particular SOP 97-2 and SAB 101, and
Application Note G to FRS 5, for all revenues other than those derived from the development of
bespoke software.  Revenue derived from the development of bespoke software for individual customers
is recognised on a long term contract basis (see v opposite).  The Group’s approach to revenue
recognition under SOP 97-2 and SAB 101 is that revenue is only recognised when:
1. persuasive evidence of an arrangement exists;
2. the price to the customer is fixed or determinable;
3. any services deliverable under the supply arrangement are clearly separable from the 
software supply; 
4. physical delivery has occurred or services have been rendered; 
5. contract milestones have been achieved; and
6. collectibility is reasonably assured and there are no material outstanding conditions 
or contingencies attaching to the receipt of monies due.
In the event that services deliverable under a supply arrangement are not clearly separable from the
software supply, total revenue in relation to the supply arrangement is recognised straight-line over the
period of the arrangement.
Turnover from the sale of software product licenses is recognised at the time the software license is
granted in accordance with agreed contractual triggers, typically the supply of the software product to
the customer.  Revenues from the attendant installation, maintenance and support services are
recognised proportionally over the period that the services are provided with due regard for future
anticipated costs.  Payments received in advance of services are recorded in the balance sheet as
deferred income.
01
Accounting
policies Notes to the financial statements
51
FINANCIAL STATEMENTS 2005
v_Long-term contracts
Profit on long-term contracts is taken as the work is carried out if the final outcome can be assessed with
reasonable certainty.  The profit is calculated on a prudent basis to reflect the proportion of the work
carried out at the year end, by recording turnover and related costs, being cost of direct materials and
labour, as contract activity progresses.  Turnover is calculated by reference to the value of work carried out
based on requirements completed to date relative to total contractual requirements as at the balance sheet
date.  Revenues derived from variations on contracts are recognised only when they have been agreed by
the customer.  Full provision is made for losses on all contracts in the year in which they are first foreseen.
vi_Foreign exchange
Transactions denominated in foreign currencies are translated into sterling at the rates ruling at the dates of
transactions.  Monetary assets and liabilities denominated in foreign currencies at the balance sheet date are
translated at the rates ruling at that date.  Translation differences are taken to the profit and loss account. 
Results of overseas subsidiaries are translated using the average exchange rate for the period.  The balance
sheets of overseas subsidiaries are translated using the closing year end rate.  Exchange differences arising
from the re-translation of the opening net assets of overseas subsidiaries are taken to reserves.
vii_Tangible fixed assets
Tangible fixed assets are stated at invoice cost less any applicable discounts.  Depreciation is provided at
rates calculated to write down the cost of tangible assets over their estimated useful life on a straight-line
basis.  The annual rates of depreciation, by category of fixed asset, are as follows:
• freehold property 2%
• office equipment, fixtures and fittings 12.5% to 20.0%
• computer equipment 33.3%
viii_Assets held for resale
Acquired assets held for resale are stated at the directors’ valuation of anticipated net realisable value.
ix_Stocks
Stocks comprise goods held for resale and are stated at the lower of cost and net realisable value.  Cost
includes all costs in bringing each product to its present location and condition.
x_Share schemes
The Company has taken advantage of the exemption in UITF 17 “Employee Share Schemes” (Revised
2000) in respect of the accounting for its employee savings related option schemes which states that the
requirements of the Abstract need not be applied to such schemes.
The cost in relation to the deferred bonus scheme is charged in the year of performance.  The related
credit entry is made within liabilities reflecting the fact that the deferred shares will be satisfied by a
purchase of shares from the market.
xi_Fixed asset investments
Fixed asset investments are stated at cost less any write down for impairment.
xii_Leased assets
Assets held under finance leases are included in the balance sheet and depreciated in accordance with the
Group’s normal accounting policy for the class of asset concerned.  The present value of future rentals is
shown as a liability. The interest element of rental obligations is charged to the profit and loss account
over the period of the lease in proportion to the balance of capital repayments outstanding.
Rentals payable under operating leases are charged to the profit and loss account on a straight-line basis
over the period of the lease.
01
Accounting
policies
cont... 52
FINANCIAL STATEMENTS 2005
Notes to the financial statements
The principal activity of the Group is the development and supply of software application products and
related services to the healthcare sector.  All turnover and profit is generated from this activity.
Turnover by geographical market 2005 2004
£’000 £’000
United Kingdom and other EU states 245,322 134,563
Asia Pacific 16,670 14,697
261,992 149,260
xiii_Taxation
Corporation tax is provided on taxable profits at the current rate.
Deferred tax is provided on timing differences that have arisen but not reversed by the balance sheet
date, where the timing differences result in an obligation to pay more tax, or a right to pay less tax, in the
future.  Timing differences arise because of differences between the treatment of certain items for
accounting and taxation purposes.
Deferred tax assets are recognised to the extent that it is regarded as more likely than not that they will
be recovered.  
Deferred tax is measured at the tax rates that are expected to apply in the periods when the timing
differences are expected to reverse, based on tax rates and law enacted or substantively enacted at the
balance sheet date.  Deferred tax assets and liabilities are not discounted.
Where law or accounting standards require gains and losses to be recognised in the statement of total
recognised gains and losses, the related taxation is also taken directly to the statement of total recognised
gains and losses.
xiv_Pensions
Defined benefit pension schemes are accounted for in accordance with FRS17. The pension scheme assets
are measured using market values.  Pension scheme liabilities are measured using the projected unit
actuarial method and are discounted at the current rate of return on a high quality corporate bond of
equivalent term and currency to the liability.  Any increase in the present value of liabilities within the
Group’s defined benefit pension schemes expected to arise from employee service in the period is charged
to operating profit.  The expected return on the schemes’ assets and the increase during the period in the
present value of the schemes’ liabilities arising from the passage of time are included in other finance
income/cost.  Actuarial gains and losses are recognised in the consolidated statement of total recognised
gains and losses.  Pension scheme surpluses, to the extent that they are considered recoverable, or deficits
are recognised in full and presented on the face of the balance sheet net of related deferred tax. 
The Group also operates a number of defined contribution pension schemes.  The pension charge shown
in the financial statements for these schemes represents the total contributions payable by the Group for
the year.
Multi-employer defined benefit schemes are accounted for as defined contribution schemes when the
Group is unable to identify its share of the underlying assets and liabilities of the schemes.
01
Accounting
policies
cont...
02
Segmental
analysis Notes to the financial statements
53
FINANCIAL STATEMENTS 2005
Geographical operations
United Kingdom Asia Pacific Rest of World Total Total
and other EU states
2005 2004 2005 2004 2005 2004 2005 2004
£’000 £’000 £’000 £’000 £’000 £’000 £’000 £’000
Total turnover 247,377 135,320 17,817 14,697 11,466 2,845 276,660 152,862
Internal turnover (2,055) (757) (1,147) - (11,466) (2,845) (14,668) (3,602)
External turnover 245,322 134,563 16,670 14,697 - - 261,992 149,260
Operating profit before
goodwill amortisation 
and exceptional items 65,020 36,858 4,464 2,166 2,474 509 71,958 39,533
Goodwill amortisation (24,939) (11,145) (218) (130) (64) (35) (25,221) (11,310)
Exceptional items 1,284 (7,911) - -- - 1,284 (7,911)
Operating profit 41,365 17,802 4,246 2,036 2,410 474 48,021 20,312
Net assets 461,842 442,948 12,688 7,795 3,962 1,456 478,492 452,199
Turnover, operating profit and net assets from acquisitions are materially derived from Asia Pacific in the
current year.
02
Segmental
analysis
cont...
Net operating costs are analysed as follows:
Continuing operations
Note Ongoing Acquisitions Total Total
2005 2005 2005 2004
£’000 £’000 £’000 £’000
Change in stocks of finished goods (2,626) - (2,626) (280)
Other external charges (48,366) - (48,366) (35,823)
Staff costs 5 (91,309) - (91,309) (48,338)
Exceptional staff costs 1,284 - 1,284 (5,864)
Total staff costs 5 (90,025) - (90,025) (54,202)
Depreciation of tangible fixed assets 12 (3,617) - (3,617) (1,994)
Goodwill amortisation 11 (25,221) - (25,221) (11,310)
Other operating charges (43,962) (154) (44,116) (23,292)
Exceptional other operating charges - - - (2,047)
Total other operating charges (43,962) (154) (44,116) (25,339)
Total operating costs (213,817) (154) (213,971) (128,948)
Exceptional income in 2005 comprises the crediting to profit and loss account of redundancy provisions no
longer required which were created in 2004 for the costs of rationalising and reorganising the Group
following the merger with Torex.
03
Operating
profit 54
FINANCIAL STATEMENTS 2005
Notes to the financial statements
2005 2004
£’000 £’000
Operating profit is stated after charging:
Research and development 18,283 12,690
Current service costs in respect of defined benefit scheme 676 226
Loss on disposal of fixed assets 350 1
Depreciation and amortisation:
- Goodwill 25,221 11,310
- Tangible fixed assets, owned 3,287 1,589
- Tangible fixed assets, held under finance leases 330 405
Operating lease rentals:
- Premises 3,085 1,638
- Vehicles and equipment 2,974 1,423
During the period, the following services were provided by the Group’s auditor:
2005 2004
£’000 £’000
Audit services – Group and statutory audits 303 331
Further assurance services 32 24
Tax services – compliance services - 3
335 358
Included in the analysis above are fees and expenses of £25,000 (2004: £25,000) in respect of the parent
company. In order to ensure that the independence of the Group’s auditors is not compromised, the level
of non-audit work performed by them is kept to a minimum.  All individual pieces of non-audit work
above £5,000 must receive prior authorisation from the Audit Committee.
03
Operating
profit
cont...
2005 2004
£’000 £’000
Interest receivable comprises:
Bank interest 1,254 785
Interest payable comprises:
Bank loans and overdrafts (4,222) (3,199)
Amortisation of loan arrangement fees (161) (143)
Finance leases (7) (57)
(4,390) (3,399)
Net interest payable and similar charges (3,136) (2,614)
04
Net interest
payable and
similar
charges Notes to the financial statements
55
Staff costs (including executive directors) during the period were as follows: 
2005 2004  
£’000 £’000    
Wages and salaries 78,642 41,840
Social security costs 9,744 4,706
Other pension costs 2,923 1,792
91,309 48,338
Exceptional redundancy costs (see note 2) (1,284) 5,864
Total staff costs 90,025 54,202
The average monthly number of employees, including executive directors, employed by the Group during 
the period was:
2005 2004
Number Number
Development 1,019 491
Sales and marketing 157 91
Installation and project management 935 479
Customer services 255 137
Administration 180 140
2,546 1,338
05
Employee
information
Total remuneration in respect of directors was as follows:
2005 2004
£’000 £’000
Salary and fees 1,964 1,613
Benefits 8 4
Bonus (payable in cash) 1,123 837
Aggregate emoluments 3,095 2,454
Pension contribution payments 308 271
3,403 2,725
In addition to the amounts, above £1,495,000 (2004: nil) was paid to former directors by way of
severance and compensation for loss of office as detailed in the Remuneration Report on page 36 and
gains of £139,000 were made on exercise of share options (2004: nil) by one of the former directors as
detailed in the Remuneration Report on page 36.
A total of five directors received pension contributions to fund personal pension arrangements (2004: six).
Further details of directors’ remuneration are included in the audited section of the Remuneration Report
on pages 31 to 39.
06
Directors’
remuneration
FINANCIAL STATEMENTS 2005 56
FINANCIAL STATEMENTS 2005
Notes to the financial statements
i_Analysis of tax charge in the period 2005 2004
£’000 £’000
United Kingdom corporation tax
Current tax on income for the year 11,958 7,248
Adjustments in respect of prior years (3,020) (336)  
8,938 6,912
Double tax relief - (76)
8,938 6,836
Overseas taxation
Overseas taxation 8,298 1,838
Adjustments in respect of prior years (627) 264
7,671 2,102
Total current taxation 16,609 8,938
Deferred taxation
Net origination/(reversal) of timing differences (note 16) 2,568 (2,129)
Balance arising on pension fund liability (note22v) (168) -
Total deferred taxation 2,400 (2,129)
Tax on profit on ordinary activities                         19,009  6,809
ii_Reconciliation of current tax charge 2005 2004
£’000 £’000
Profit on ordinary activities before taxation 44,524 17,593
Theoretical tax at UK corporation tax rate of 30% (2004: 30%) 13,357 5,278
Effects of:
Expenditure not tax deductible 6,401 2,083
Movement on deferred tax not provided 1,848 55
Utilisation of tax losses (113) 255
Adjustments in respect of prior periods (3,647) (72)
Difference in tax rates in overseas companies (683) (49)
Withholding tax - (76)
Exchange rate differences - 9
Group relief surrendered for nil consideration - 146
Accelerated capital allowances (554) 1,309
Actual current taxation charge (note 7_i) 16,609 8,938
iii_Factors that may affect future tax charges
The iSOFT Group has operations in various overseas jurisdictions, some of which have higher corporation
tax rates than the UK.  The profitability of these overseas operations will have an effect on the Group tax
charge going forward.
07
Tax on profit
on ordinary
activities Notes to the financial statements
57
2005 2004
£’000 £’000
Equity dividends
Ordinary shares of £0.10 each:
- Interim dividend of 0.75p per share (2004: 0.70p) 1,728 879
- Proposed final dividend of 1.82p per share (2004: 1.70p) 4,146 3,832
5,874 4,711
09
Dividends
Weighted Weighted
average 2005 average 2004
number of Per share number of Per share
Earnings shares amount Earnings shares amount
£’000 ‘000 pence £’000 ‘000 pence
Basic earnings per share
Earnings attributable to shareholders 25,218 227,123 11.10 10,699 160,595 6.66
Dilutive effect of options - 2,614 (0.13) - 2,252 (0.09)
Diluted earnings per share 25,218 229,737 10.97 10,699 162,847 6.57
Underlying earnings per share (excluding goodwill amortisation and exceptional items)
Basic earnings per share 25,218 227,123 11.10 10,699 160,595 6.66
Goodwill amortisation 25,221 - 11.10 11,310   - 7.04
Exceptional items (1,284) - (0.56) 7,911 - 4.93
Tax on exceptional items 385 - 0.17 (1,502) - (0.93)
Underlying earnings per share 49,540 227,123 21.81 28,418 160,595 17.70
Underlying earnings per share excludes the effect of goodwill amortisation and exceptional items.  
This is presented to show more comparable and representative information on the underlying 
trading performance.
Basic earnings per share are calculated by dividing the earnings attributable to ordinary shareholders by
the weighted average number of shares in issue.  For diluted earnings per share, the weighted average
number of ordinary shares in issue is adjusted for the potential ordinary share dilution from share options.
Reconciliations of the earnings and weighted average number of shares are set out below:
10
Earnings 
per share
Of the profit for the financial year, a profit of £7,526,000 (2004: 7,248,000) is dealt with in the accounts
of iSOFT Group plc.  The directors have taken advantage of the exemption available under section 230 of 
the Companies Act 1985 and have not presented a profit and loss account for the Company alone.
08
Profits of
holding
company
FINANCIAL STATEMENTS 2005 58
FINANCIAL STATEMENTS 2005
Notes to the financial statements
Group Goodwill
£’000
Cost
At 1 May 2004 494,417
Additions (note 14) 1,320
Adjustment in respect of fair value review (note 14) 7,098
At 30 April 2005 502,835
Amortisation
At 1 May 2004 21,180
Charge for the year 25,221 
At 30 April 2005 46,401
Net book value 
At 30 April 2005 456,434
At 1 May 2004 473,237
Acquisition accounting has been adopted in respect of all business combinations.  The additions to
goodwill during the year represent the acquisition of the HIS business of Hewlett Packard in New Zealand
in September 2004 resulting in goodwill of £615,000 and an additional 6% stake in iSOFT R&D Private
Limited resulting in additional goodwill of £705,000.  
The goodwill arising on the merger with Torex has been adjusted to reflect the fair value of the acquisition,
with details of these adjustments being included in note 14. Goodwill in respect of all acquisitions is
amortised over 20 years being the period over which the directors estimate that the value of the
underlying business acquired will continue to exceed the value of the underlying assets.
Company
The Company has no intangible fixed assets.
11
Intangible
fixed assets Company Fixtures
fittings &
equipment Total
£’000 £’000
Cost
At 1 May 2004 - -
Additions 1,050 1,050
At 30 April 2005 1,050 1,050
Depreciation
At 1 May 2004 - -
Charge for the year 9 9
At 30 April 2005 99
Net book value 
At 30 April 2005 1,041 1,041
At 1 May 2004 - -
Notes to the financial statements
59
Group Freehold Fixtures
land & fittings &
buildingsequipment Total
£’000 £’000 £’000
Cost
At 1 May 2004 4,443 34,837 39,280
Additions 231 3,335 3,566
Disposals (24) (3,078) (3,102)
Exchange adjustments - (1) (1)
At 30 April 2005 4,650 35,093 39,743
Depreciation
At 1 May 2004 981 26,429 27,410
Fair value adjustment (note 14) - 119 119
Disposals (24) (2,494) (2,518)
Exchange adjustments - (1) (1)
Charge for the year 262 3,355 3,617
At 30 April 2005 1,219 27,408 28,627
Net book value 
At 30 April 2005 3,431 7,685 11,116
At 1 May 2004 3,462 8,408 11,870
At the balance sheet date the net book value of tangible fixed assets includes £819,000
(2004: £1,149,000) in respect of assets held under finance leases.  Depreciation charged in the period on
those assets amounted to £330,000 (2004: £405,000).
12
Tangible
fixed assets
FINANCIAL STATEMENTS 2005 60
FINANCIAL STATEMENTS 2005
Notes to the financial statements
Principal trading Class of Proportion Nature Country of
Subsidiaries share held of shares of business incorporation
iSOFT plc Ordinary 100% Computer services England & Wales
iSOFT R&D Private Limited
*
Ordinary 88%Software development India
iSOFT Australia Pty Limited
*
Ordinary 100% Computer services Australia
iSOFT NZ Limited
*
Ordinary 100% Computer services New Zealand
iSOFT Holdings (Singapore) Limited
*
Ordinary 100% Computer services Singapore
iSOFT Ltd Ordinary 100% Computer services Ireland
Revive Health Limited
*
Ordinary 100% Computer services England & Wales
Torex Health Limited
*
Ordinary 100% Computer services England & Wales
Torex Services Limited
*
Ordinary 100% Computer services England & Wales
Torex Medical Systems Limited
*
Ordinary 100% Computer services England & Wales
Torex-Hiscom BV
*
Ordinary 100% Computer services Netherlands
iSOFT Deutschland GmbH
*
Ordinary 100% Computer services Germany
iSOFT Switzerland GmbH
*
Ordinary 100% Computer services Switzerland
iSOFT Business Solutions (Ireland) Limited
*
Ordinary 100% Computer services Ireland
T orex Business Solutions (Hong Kong) Limited
*
Ordinary 100% Computer services Hong Kong
iSOFT Business Solutions UK Limited
*
Ordinary 100% Computer services England & Wales
Torex Radiology Systems Limited
*
Ordinary 100% Computer services England & Wales
Torex Protos Limited
*
Ordinary 100% Computer services England & Wales
HAS Solutions Pty Limited
*
Ordinary 100% Computer services Australia
Paramedical Pty Limited
*
Ordinary 100% Computer services Australia
* denotes shares not held directly by iSOFT Group plc.
All of the above undertakings have been consolidated in the Group financial statements and a full list of
subsidiary undertakings will be annexed to the Company’s next annual return.
All companies have a financial year end of 30 April with the exception of iSOFT R&D Private Limited which has
a financial year end of 31 March.
13
Fixed asset
investments
Company Shares in subsidiary
undertakings
£’000
Cost and net book value
At 1 May 2004 444,825
Addition 773
At 30 April 2005 445,598 Notes to the financial statements
61
i_Merger with Torex PLC
On 23 December 2003, the merger of iSOFT Group plc and Torex PLC (“Torex”) was declared
unconditional.  Acquisition accounting was adopted. The provisional fair values of Torex established at the
time of the acquisition have been adjusted as follows:
Provisional Revised
Fair value Revaluations fair value 
£’000 £’000 £’000
Tangible fixed assets 9,449 (119) 9,330
Assets held for resale 69,160 (4,277) 64,883
Stocks 3,557 - 3,557
Debtors 49,976 309 50,285
Deferred tax 6,779 (3,997) 2,782
Overdraft (5,134) - (5,134)
Corporation tax (7,127) 620 (6,507)
Deferred consideration (8,667) 428 (8,239)
Trade and other creditors (64,733) 1,209 (63,524)
Debt (69,675) - (69,675)
Provisions for liabilities and charges (2,930) (1,271) (4,201)
Pension liability (5,964) - (5,964)
Net liabilities acquired (25,309) (7,098) (32,407)
Goodwill 397,187 7,098 404,285
Consideration 371,878 - 371,878
Satisfied by:
Shares issued 367,825
Acquisition costs 4,053
371,878
Revaluation adjustments comprise:
• Write off of obsolete fixed assets of £119,000 identified in 2005.
• An adjustment of £4,277,000 in respect of assets held for resale arising from the disposal of Torex 
Laboratory Systems Limited to Varleigh UK Ltd in March 2005.  
• Reduction of provisions required for bad debts of £309,000, following collection of debts.
• Reassessment of the corporation tax liabilities of Torex to reflect a reduction of corporation tax liabilities 
of £620,000 and £3,997,000 reduction in deferred tax assets.
• A reduction in the provisions in respect of onerous contracts included in accrued liabilities totalling 
£1,209,000 following a detailed review in 2005.
• Reduction of deferred consideration payable of £428,000 in respect of the acquisition of HAS Solutions 
Pty Limited.
• Additional property provisions of £1,271,000 in respect of onerous lease commitments identified in 2005.
14
Acquisitions
FINANCIAL STATEMENTS 2005 62
FINANCIAL STATEMENTS 2005
Notes to the financial statements
ii_Acquisition of New Zealand HIS business of Hewlett Packard
On 14 October 2004 the Group acquired the New Zealand HIS business of Hewlett Packard.  Acquisition
accounting has been adopted and the book and provisional fair values on acquisition were as follows:
Book value Revaluations Provisional fair value
£000 £000 £000
Net assets acquired - Debtors 83 (14) 69
Goodwill 615
Consideration 684
Satisfied by:
Cash 656
Acquisition costs 28
684
From 14 October 2004 to 30 April 2005, the acquired business contributed £0.3m to turnover, £0.1m to
operating profit before goodwill amortisation and exceptional items and £0.1m to profit before taxation,
goodwill amortisation and exceptional items.  The post acquisition cashflows were not material. 
iii_Further investment in iSOFT R&D Private Limited
On 7 September 2004, the Group increased its stake in iSOFT R&D Private Limited (“iSOFT R&D”) from
82% to 88%. 
In accordance with FRS 2, given that the carrying values of the net assets in iSOFT R&D were not materially
different from their fair values and the change in stake is not considered significant, the net assets of
iSOFT R&D have not been revalued on consolidation.  Accordingly, the additional goodwill generated by
the increase in stake is as follows:
£’000
Consideration – satisfied in shares 772
Additional net assets acquired (67)
Goodwill on increase in stake 705
14
Acquisitions
cont...
Group Company Group Company
2005 2005 2004 2004
£’000 £’000 £’000 £’000
Business held for resale -- 6,500 - 
Property held for resale 1,000 - 1,000 -
1,000 - 7,500 -
The property held for resale relates to a property acquired on the merger with Torex which is in the process
of disposal. The property is held at its estimated net realisable value and the company expects the disposal
to be completed in the next financial year.
15
Assets held
for resale Notes to the financial statements
63
16
Debtors
FINANCIAL STATEMENTS 2005
Group Company Group Company
2005 2005 2004 2004
£’000 £’000 £’000 £’000
Trade debtors 57,565 - 42,380 -
Amounts owed by Group undertakings - 100,001 - 113,980
Amounts recoverable on contracts 19,495 - --
Deferred taxation  2,947 - 9,513 -
Other debtors 4,478 457 4,938 463
Prepayments and accrued income 33,220 172 50,105 145
117,705 100,630 106,936 114,588
In the normal course of its business the Group enters into financing arrangements with third party funders in
respect of specific customer contracts.  These transactions are entered into to provide PFI (Private Finance
Initiative) compliant finance for the capital cost of multi-year customer contracts.  In these arrangements the
present value of the customer receivable is matched by the amount due to the funding provider.  Given that all
significant rights and benefits, and all significant exposures to risk, are transferred, the Group does not recognise
the equal and opposite related balances.  This treatment is in accordance with FRS 5.
Prepayments and accrued income include a balance of £6,887,000 (2004: £4,215,000) due after one year.
Movement in deferred tax asset - Group £’000 
Balance at 1 May 2004 9,513
Amount debited to profit and loss account (2,568)
Acquisition fair value adjustments (note 14) (3,997)
Exchange rate differences (1)
Balance at 30 April 2005 2,947
Analysis of deferred tax asset - Group 2005 2004
£’000 £’000 
Accelerated capital allowances (313) 662
Short-term timing differences 2,892 5,234
Losses carried forward 368 3,617
Deferred tax asset 2,947 9,513
There are other potential deferred tax assets totalling £6,502,000 (2004: £2,143,000) that have not been
recognised on the basis that the future economic benefit is as yet uncertain.
Company
The Company had a deferred tax liability of £8,000 (2004: nil) related to accelerated capital allowances. 64
FINANCIAL STATEMENTS 2005
Notes to the financial statements
17
Creditors:
amounts
falling due
within one
year
Group Company Group Company
2005 2005 2004 2004
£’000 £’000 £’000 £’000
Bank and other borrowings (note 19) 14,095 28,157 9,850 21,997
Trade creditors 5,189 269 11,118 353
Amounts owed to Group undertakings - 32,770 - 36,864
Corporation tax 20,611 200 14,151 -
Other taxation and social security 23,826 - 11,648 -
Accruals and other creditors 59,854 5,010 41,189 1,105
Deferred income 36,037 - 43,737 -
Deferred consideration 1,541 - 6,872 3,760
Proposed dividends 4,146     4,146 3,832 3,832
165,299 70,552 142,397 67,911
Deferred consideration, of which £1,541,000 (2004: £6,872,000) is payable within one year and £74,000
(2004: £4,738,000) is payable after one year, comprises:
• £324,000 (2004: £6,000,000) in respect of the Torex acquisition of HAS Solutions Pty Limited (“HAS”) 
on 6 September 2003. In September 2004 agreement was reached with the vendors to settle the 
deferred consideration by way of £2,400,000 in cash, conversion of £2,252,000 of deferred consideration
to loan notes repayable prior to 31 May 2006 (see note 19), and the agreement of earn out settlements 
and liabilities totalling £920,000.  The balance of £428,000 has been adjusted through goodwill.
• £918,000 (2004: £918,000) in respect of the Torex acquisition of GAP Management AG on 
29 May 2002.  The deferred consideration is payable within one year.
• £373,000 (2004: £495,000) relating to the acquisition of i-Health on 9 January 2004.  The deferred 
consideration is payable based on proportion of revenue in each of the five years ending 31 December 2008.
The amount included in the financial statements represents the Company’s estimate of the amounts 
that will become payable under the terms of the sale and purchase agreement.  The maximum 
potential deferred consideration payable under the terms of the sale and purchase agreement is 
approximately £8,700,000.
Group Company Group Company
2005 2005 2004 2004
£’000 £’000 £’000 £’000
Bank and other borrowings (note 19) 39,661 38,226 61,417 60,573
Deferred consideration (note 17) 74 - 4,738 -
Other creditors 3,327    - 1,057 378
43,062 38,226 67,212 60,951
18
Creditors:
amounts
falling due
after one
year Notes to the financial statements
65
FINANCIAL STATEMENTS 2005
Group Company Group Company
2005 2005 2004 2004
£’000 £’000 £’000 £’000
Due within one year:
Bank overdraft - 16,157 - 12,772
Bank loans 12,680 12,000 9,225 9,225
Unsecured loan notes (see note 17) 1,126 - - -
Finance leases 289 - 625 -
14,095 28,157 9,850 21,997
Due after one year:
Bank loans 38,226 38,226 60,820 60,573
Unsecured loan notes (see note 17) 1,126 - - -
Finance leases 309 - 597 -
39,661 38,226 61,417 60,573
53,756 66,383 71,267 82,570
All of the Group bank loans and overdraft are secured by a floating charge over the assets of the Group
and are subject to interest at between 0.65% and 1.125% over the bank’s base rate dependent on the
level of the Group’s net debt position. Bank loans are stated net of unamortised issue costs of £774,000
(2004: £608,000).
Further details of the Group’s banking facilities are included in note 20.
19
Bank and
other
borrowings
20
Financial risk
management
The Group’s financial instruments comprise bank borrowings, cash and various items, such as trade
debtors, trade creditors etc. that arise directly from its operations.  Short-term debtors and creditors have
been excluded from all of the following disclosures except in relation to currency risk.  The main risks
arising from, and impacted by, the financial assets and liabilities of the Group are interest rate risk, foreign
currency risk and liquidity risk.  The Board reviews and agrees policies for managing these risks and they
are summarised below.  The Group does not trade in financial instruments.
Interest rate risk
The Group finances its operations through a mixture of retained profits and bank borrowings.  There are
also finance lease commitments.  The Group has arranged facilities whereby United Kingdom held cash
balances are used to net off the balance on the loans, with interest calculated on the net balance.  The
interest rate exposure of the financial liabilities of the Group was as follows:
2005 2004
Fixed Floating Non Fixed Floating Non
interest interest interest interest interest interest
rate rate bearing Total rate rate bearing Total
£’000 £’000 £’000 £’000 £’000 £’000 £’000 £’000
Sterling
- Loans - 53,158 - 53,158 - 70,045 - 70,045
- Finance leases 598 - - 598 1,222 - - 1,222
- Deferred consideration - - 1,615 1,615 - - 11,610 11,610
- Provisions - - 4,336 4,336 - - 10,487   10,487
At 30 April 598 53,158 5,951 59,707 1,222 70,045 22,097 93,364 66
FINANCIAL STATEMENTS 2005
Notes to the financial statements
The weighted average interest rate on fixed rate borrowings was 8.0% (2004: 8.0%) and the weighted
average period to maturity was 1.0 years (2004: 1.0 years).  The weighted average period to maturity on
non-interest bearing financial liabilities was 0.8 years (2004: 1.7 years).  The only financial assets held by
the Group are cash at bank. Amounts held at the year end were:
2005 2004
£’000 £’000
Sterling 45,215 37,094
Euros 58,709 27,866
Australian dollar 3,441 8,705
New Zealand dollar 432 -
Singapore dollar 535 260
Swiss franc 466 694
Indian rupees 834 336
Hong Kong dollar 218 73
Canadian dollar 129 -
US dollar 12 -
South African rand 114 -
Norwegian kroner 35 6
110,140 75,034
All cash is at floating rates based on relevant national LIBID equivalents or government bond rates.
Currency risk
The Group is exposed to translation and transaction foreign exchange risk.  The Group regularly reviews its
exposure to translation risk and where appropriate will match this risk with an appropriate level of
borrowings in the same currency.  
If necessary, transaction risk would be minimised by use of the forward hedge market.  At the year end,
there are no currency hedging arrangements in place (2004: none).
There are net foreign currency monetary assets/(liabilities) held by subsidiaries with a functional currency 
of sterling of £32,118,000 (2004: £16,788,000) denominated in euros, £4,525,000 (2004: £252,000)
denominated in Australian dollars, and £777,000 (2004: £393,000) denominated in South African rands.  
In addition, there are net foreign currency monetary assets/(liabilities) held by subsidiaries with a functional
currency of the euro of £191,000 (2004: £1,245,000) denominated in sterling, £113,000 (2004: £173,000)
denominated in Hong Kong dollars, and £58,000 (2004: £130,000) denominated in Swiss francs; held by
subsidiaries with a functional currency of Australian dollars of £728,000 (2004: nil) denominated in New
Zealand dollars and £535,000 (2004: nil) denominated in Singaporian dollars.  There are also net monetary
assets held by a subsidiary with a functional currency of Indian rupees of £3,937,000 (2004: nil)
denominated in sterling.
Liquidity risk
It is the Group’s policy to maintain a mix of short, medium and long term borrowings with its bankers.
Flexibility is achieved by the use of a revolving credit facility and a fixed term loan facility.  The facilities
provide for a term loan of £51,000,000 and a multi-currency revolving credit facility of £85,000,000.  The
term loan is repayable in quarterly payments which commenced in August 2004 with the last payment
scheduled for September 2008.  The revolving credit facility is also subject to review in September 2008.
As at 30 April 2005, £11,850,000 of the revolving credit facility was unused by the Group.
20
Financial risk
management
cont... Notes to the financial statements
67
FINANCIAL STATEMENTS 2005
Maturity of financial liabilities
The maturity profile of the Group’s financial liabilities, other than short term trade creditors and accruals, 
at 30 April 2005 was:
2005 2004
Bank Loan Finance Bank Finance
loans notes leases Other Total loans leases Other Total
£’000 £’000 £’000 £’000 £’000 £’000 £’000 £’000 £’000
Due within one year, or 
on demand 12,680 1,126 289 2,901 16,996 9,225 625 15,143 24,993
Due after one year but not
more than two years 12,000 1,126 309 729 14,164 12,124 597 2,004 14,725
Due after two years 
but not 
more than five years 26,226 - - 1,153 27,37938,878 -4,08442,962
Due in more than 
five years - - - 1,168 1,168 9,818 - 866 10,684
At 30 April 50,906 2,252 598 5,951 59,707 70,045 1,222 22,097 93,364
Other financial liabilities represent deferred consideration payable of £1,615,000 (2004: £11,610,000), the
Group’s restructuring provision of £407,000 (2004: £7,280,000) and the Group’s property provisions of
£3,929,000 (2004: £3,207,000).
Fair value of financial instruments
There is no difference between the book value and fair value of the aforementioned financial instruments.
20
Financial risk
management
cont...
Group
Restructuring Property Total
£’000 £’000 £’000
At 1 May 2004 7,280 3,207 10,487
Fair value adjustment (note 14) - 1,271 1,271
Utilised (5,589)(549)(6,138)
Credited to profit and loss account (note 3) (1,284) - (1,284)
At 30 April 2005 407 3,929 4,336
The restructuring provision represents the remaining cost of the restructuring of the Group following the
merger with Torex on 23 December 2003.  The provision held in respect of properties represents the
estimated cost of exiting a number of vacant properties held by the Group of £2,806,000 and the
provision for leasehold dilapidations on a number of the Group’s leasehold properties of £1,123,000.  
The anticipated cost of exiting the Group’s vacant properties has been estimated taking account of residual
lease commitments, contracted sub let income and other potential penalties associated with termination of
leases.  The provision is expected to be utilised over the next seven years.  The dilapidations provision has
been calculated taking advice from property surveyors where necessary.
21
Provisions
for liabilities
and charges 68
FINANCIAL STATEMENTS 2005
Notes to the financial statements
30 April 30 April 23 December
2005 2004 2003
% %%
Rate of increase in pensionable salaries 4.3 4.4 4.3
Rate of increase in pensions in payment and deferment 2.8 2.9 2.8
Discount rate 5.4 5.6 5.5
Inflation assumption 2.8 2.9 2.8
The assets of the scheme and the weighted average expected return were:
Long term rate of Long term rate of Long term rate of
return expected Value at return expected Value at return expected Value at
at 30 April 30 April at 30 April 30 April at 23 December 23 December
2005 2005 2004 2004 2003 2003
% £’000 % £’000 % £’000
Equities 7.5 9,626 7.5 8,834 7.5 8,848
Bonds 4.7 1,179 4.9 1,085 4.9 1,170
Insurance policy 5.0 1,256 5.0 1,193 5.0 1,173
Other 3.75 751 3.75 684 3.75 489
Total market value of assets 12,812 11,796 11,680
Present value of scheme liabilities (21,979) (20,537) (20,199)
Deficit in the scheme (9,167) (8,741) (8,519)
Related deferred tax asset 2,750 2,622 2,555
Net pension liability (6,417) (6,119) (5,964)
i_Analysis of amount charged to operating profit in respect of defined benefit scheme:
Year to Period to
30 April 2005 30 April 2004
£’000 £’000
Current service cost 676 226
Past service cost - -
Total operating charge 676 226
The Group uses a mixture of defined benefit and defined contribution schemes, the former having been
acquired as part of the merger with Torex.  The assets of the Torex Medical Systems (‘TMS’) defined benefit
scheme are held in a separate trustee administered fund.  Full actuarial valuations of the scheme are undertaken
on a tri-annual basis.  The last completed full actuarial valuation was as at 1 January 2002.  The most recent
actuarial valuation of the scheme for FRS 17 disclosures was at 30 April 2005.  The FRS 17 valuation of the
TMS scheme used the projected unit method and was carried out by KPMG, professionally qualified actuaries.
The principal assumptions used by the actuaries were:
22
Pension
commitments ii_Movement in deficit during the period:
Year to Period to
30 April 30 April
2005 2004
£’000 £’000
Deficit in scheme brought forward (8,741) (8,519)
Movement:
Current service cost (676) (226)
Contributions 479 149
Other finance cost (361) (105)
Actuarial gain/(loss) 132 (40)
Deficit in scheme carried forward (9,167) (8,741)
iii_Analysis of the amount charged to other finance cost:
Year to Period to
30 April 30 April
2005 2004
£’000 £’000
Expected return on pension scheme assets 813 261
Interest on pension scheme liabilities (1,174) (366)
Net finance cost (361) (105)
iv_Analysis of the amount recognised in the statement of total recognised gains and losses:
Year to Period to
30 April 30 April
2005 2004
£’000 £’000
Actual return less expected return on pension scheme assets 203 (250)
Experience gains and losses arising on pension scheme liabilities 645 30
Changes in the assumptions underlying the present value
of the scheme liabilities (716) 180
Actuarial gain/(loss) recognised in the statement of total
recognised gains and losses 132 (40)
v_Analysis of deferred tax movement on pension fund deficit:
Year to Period to
30 April 30 April
2005 2004
£’000 £’000
Opening deferred tax asset arising on deficit in the scheme 2,622 2,555
Amount recognised in statement of total recognised gains and losses (40) 67
Amount credited to profit and loss account (note 7) 168 -
Closing deferred tax asset arising on deficit in the scheme 2,750 2,622
Notes to the financial statements
69
FINANCIAL STATEMENTS 2005
22
Pension
commitments
cont... 70
FINANCIAL STATEMENTS 2005
Notes to the financial statements
vii_Overseas arrangements
As a result of the merger with Torex, the Group also acquired pension obligations in the Netherlands.
Torex-Hiscom BV participates in an industry-wide defined benefit pension plan, known as the PGGM.  
The PGGM provides pension benefits related to final pay at retirement for approximately 1.8 million
people, who are current or former employees in the healthcare and social work sector in the Netherlands.
The PGGM is a multi-employer plan under which Torex-Hiscom BV is unable to identify its share of the
underlying assets and liabilities, and the Group has therefore adopted defined contribution accounting 
as permitted by FRS 17.  The premiums paid by the employer for the year were 1,412,600 euros
(approximately £965,000).  The employer’s contributions are expected to increase by up to 15% 
in the foreseeable future to restore the funding level of the PGGM in respect of past service benefits 
to its target level.
22
Pension
commitments
cont...
23
Share capital
2005 2004
£ £
Authorised
350,000,000 (2004: 350,000,000) ordinary shares of £0.10 each 35,000,000 35,000,000
2005 2004
£ £
Allotted, called up and fully paid
227,783,124 (2004: 225,421,755) ordinary shares of £0.10 each 22,778,312 22,542,176
Shares issued during the period
On 7 September 2004, the Company allotted 200,000 shares at a fair value of £772,000 in consideration
for an additional 6% stake in iSOFT R&D Private Limited (see note 14_iii).
2,161,369 shares have been issued during the year to satisfy the Company’s requirements under the
Group’s share option schemes.  Consideration received was £5,874,000
vi_History of experience gains and losses:
Year to Period to 
30 April 2005 30 April 2004
Difference between the actual and expected return on scheme assets:
Amount (£’000) 203 (250)
Percentage of scheme assets 2% (2%)
Experience gains and losses on scheme liabilities:
Amount (£’000) 645 30
Percentage of the present value of the scheme liabilities 3% -
Total amount recognised in the statement of total recognised gains and losses:
Amount (£’000) 132 (40)
Percentage of the present value of the scheme liabilities 1% - Notes to the financial statements
71
23
Share capital
cont...
FINANCIAL STATEMENTS 2005
Share options
The following options are outstanding under the Company’s unapproved and approved share option
schemes.  Exercise of these options is subject to employees meeting individual performance criteria and
also to the performance of the Group measured over three years from the date of grant.  Options include
directors’ share options.  All options were granted at market value at the date of grant.
These share schemes have been set up under a joint election to transfer the liability for employers NI to
the employee. As a result, in accordance with UITF25, no profit and loss charge arises.
The following Torex share options were rolled over into options over iSOFT Group shares at the time of the
merger and are still outstanding.
Date of grant Number Subscription price End of personal Period exercisable
per share (pence) performance period
11 Jul 2000 408,000 110.0 10 Jul 2001 11 Jul 2003 - 10 Jul 2010
20 Dec 2000 250,000 174.0 19 Dec 2001 20 Dec 2003 - 19 Dec 2010
13 Apr 2001 50,000 189.0 12 Apr 2002 13 Apr 2004 - 12 Apr 2011
22 Jun 2001 850,000 249.0 21 Jun 2002 22 Jun 2004 - 21 Jun 2011
11 Oct 2001 502,000 217.5 10 Oct 2002 11 Oct 2004 - 10 Oct 2011
30 Sept 2002 1,635,000 151.3 29 Sept 2003 30 Sept 2005 -29 Sept 2012
11 Oct 2002 500,000 145.0 10 Oct 2003 11 Oct 2005 - 10 Oct 2012
27 Nov 2002 500,000 233.0 26 Nov 2003 27 Nov 2005 - 26 Nov 2012
25 Mar 2004 1,725,000 338.0 24 Mar 2005 25 Mar 2007 - 24 Mar 2014
09 Feb 2005 4,470,000 371.7 09 Feb 2006 09 Feb 2008 - 08 Feb 2015
Date of grant Number Subscription price End of personal Period exercisable
per share (pence) performance period
9 Feb 2000 53,515 295.67 23 Dec 2003 9 Feb 2003 - 8 Feb 2010
15 Mar 2001 282,521 374.46 23 Dec 2003 15 Mar 2004 - 14 Mar 2011
24 Sep 2001 17,691 317.66 23 Dec 2003 24 Sep 2004 - 23 Sep 2011
27 Feb 2002 111,453 418.27 23 Dec 2003 27 Feb 2005 - 26 Feb 2012
19 Aug 2003 8,846 219.87 23 Dec 2003 19 Aug 2005 - 18 Aug 2012
In addition to the options above, 1,073,841 options were outstanding in respect of the Company’s savings
related share option scheme.  277,997 of these options have an exercise price of 175.0 pence (first
exercisable in 2006), 82,249 have an exercise price of 239.0 pence (first exercisable in 2007), and 713,595
have an exercise price of 266.0 pence (first exercisable in 2008).
Further details of share options in respect of directors are included in the Remuneration Report on page 37. 72
FINANCIAL STATEMENTS 2005
Notes to the financial statements
24
Reserves
25
Reconciliation
of operating
profit to net
operating cash
flows 
Group Share premium Merger Profit and loss
account reserve account
£’000 £’000 £’000
At 1 May 2004 36,672 363,865 28,858
Retained profit for the year - - 19,344
Transfer - (26,958) 26,958
Premium on shares issued net of issue costs 6,410 - -
Exchange differences - - (2)
Actuarial gain recognised in the pension scheme - - 132
Movement on deferred tax on actuarial gain recognised
on the pension fund -               -             (40)
At 30 April 2005 43,082 336,907 75,250
The profit and loss account includes £453,000 (2004 restated: £155,000), stated after deferred taxation of
£195,000 (2004 restated: £67,000) in respect of pension scheme liabilities of the Torex Medical Systems defined
benefit scheme (see note 22).  Prior year numbers have been restated as the prior year financial statements
incorrectly reported the full FRS17 pension liability as being included in the profit and loss account rather than
the movement from the opening fair value assigned on the merger with Torex. 
The transfer between merger reserve and the profit and loss account is made as a consequence of utilising
merger relief under Section 131 Companies Act 1985 in respect of a prior year acquisition.  The balance transferred
represents the total amortisation charge to the profit and loss account to date arising on the Torex merger.
Company Share premium Merger Profit and loss
account reserve account
£’000 £’000 £’000
At 1 May 2004 36,672 363,865 7,472
Retained profit for the year - - 1,652
Premium on shares issued 6,410 - -
At 30 April 2005 43,082 363,865 9,124
2005 2004
£’000 £’000
Operating profit 48,021 20,312
Exceptional (income credited)/costs charged to operating profit (1,284) 7,911
Operating profit before exceptional items 46,737 28,223
Goodwill amortisation 25,221 11,310
Depreciation of tangible fixed assets 3,617 1,994
Difference between pension charge and cash contributions 197 77
Decrease/(Increase) in stocks 2,626 (417)
Increase in debtors (16,974) (17,815)
Increase in creditors 20,507 12,600
Decrease in property provision (511) (35)
Loss on disposal of fixed assets 350 1
Net cash inflow from operating activities before cash outflow 
from restructuring 81,770 35,938
Net cash outflow from restructuring (5,441) (319)
Net cash inflow from operating activities 76,329 35,619 At 30 April 2005, the Group has lease agreements in respect of properties, vehicles, plant and equipment
for which payments extend over a number of years.
2005 2004
Property Vehicles, plant Property Vehicles, plant
and equipment and equipment
£’000 £’000 £’000 £’000 
Annual commitments under non- 
cancellable operating leases expiring:
Within one year 748 657 478 441
Within two to five years 1,321 1,915 1,469 2,246
After five years 1,912 - 1,313 6
3,981 2,572 3,260 2,693
Notes to the financial statements
73
FINANCIAL STATEMENTS 2005
At
At 1 May Cash Non cash Exchange 30 April
2004 flow movements movement 2005
£’000 £’000 £’000 £’000 £’000
Cash at bank and in hand 75,034 35,107 - (1) 110,140
Bank loans (70,045) 19,300 (161) - (50,906)
Loan notes - - (2,252) -  (2,252)
Finance leases (1,222) 624 - - (598)
Borrowings (71,267) 19,924 (2,413) - (53,756)
Net funds 3,767 55,031 (2,413) (1) 56,384
The cash outflow from bank loans includes £327,000 of debt issue costs paid in the year.
2005 2004
£’000 £’000
Increase in cash 35,107 29,484
Cash outflow from decrease in debt 19,924 46,914
Increase in net funds from cash flows 55,031 76,398
Debt acquired with subsidiaries - (69,675)
New finance leases incepting in the period - (37)
Loan notes issued (2,252) -
Exchange movement (1) 99
Amortisation of loan arrangement fees (161) (143)
Increase in net funds in the period 52,617 6,642
Net funds/(debt) at 1 May 2004 and 1 May 2003 3,767 (2,875)
Net funds at 30 April 2005 and 30 April 2004 56,384 3,767
26
Analysis of
change in 
net funds
27
Reconciliation
of net cash
flow to
movement 
in net funds
28
Operating
lease
commitments
At the year end capital commitments totalled £1,332,000 (2004: nil) 29
Capital
commitments 74
FIVE YEAR SUMMARY 2005
£39.5m
£72.0m 2005
2004
2003
2002
2001
£25.6m
£16.4m
£7.6m
Normalised operating profit
*
£36.8m
£68.5m 2005
2004
2003
2002
2001
£23.5m
£15.4m
£7.2m
Normalised profit before tax
*
17.70p
21.81p 2005
2004
2003
2002
2001
15.09p
10.49p
4.77p
Underlying earnings per share
*
1,338
2,546 2005
2004
2003
2002
2001
580
430
252
Average monthly number of employees
2005
2004
2003
2002
2001
£91.5m
£60.1m
£31.1m
Turnover
£149.3m
£262.0m 75
FIVE YEAR SUMMARY 2005
* stated before amortisation of goodwill and exceptional items
#
before cash outflow from restructuring
Results 2005 2004 2003 2002 2001
£m £m £m £m £m
Turnover 262.0 149.3 91.5 60.1 31.1
Normalised operating profit
*
72.0 39.5 25.6 16.4 7.6
Normalised profit before tax
*
68.5 36.8 23.5 15.4 7.2
Key Statistics
Earnings per share 11.10p 6.66p 11.17p 7.69p 3.07p
Diluted earnings per share 10.97p 6.57p 11.08p 7.61p 3.06p
Underlying earnings per share
*
21.81p 17.70p 15.09p 10.49p 4.77p
Net funds/(debt) 56.4 3.8 (2.9) 3.7 (13.5)
Gearing - - 3.9% - 48.5%
Net cash flow from operating activities
#
81.8 35.9 23.5 16.9 8.3
Average monthly number of employees 2,546 1,338 580 430 252 The next few years will see a revolution in
healthcare in which LORENZO will play a central
role, improving the quality of life for millions of
people worldwide.
Be inspired.
76 77
COMPANY INFORMATION 2005
Board of directors
Patrick Cryne
Non-executive Chairman
Executive directors
Tim Whiston
Chief Executive Officer
Steve Graham
Group Commercial Director
Ravi Kumar
Chief Technology Officer
Gavin James
Group Finance Director
Non-executive directors
Sir Digby Jones
Senior Non-executive Director
Geoff White
Non-executive Deputy Chairman
Eurfyl ap Gwilym
Rene Kern
Dr Colin Wall
David Thorpe
Ken Lever
Company Secretary
Teifion Hill
Financial advisors &
stockbrokers
Morgan Stanley & Co. 
International Limited
25 Cabot Square
Canary Wharf
London E14 4QA
Bridgewell Ltd
Old Change House
128 Queen Victoria Street
London EC4V 4BJ
External Auditors
RSM Robson Rhodes LLP
Colwyn Chambers
19 York Street
Manchester M2 3BA
Solicitors
Ashurst
Broadwalk House 
5 Appold Street 
London EC2A 2HA
Remuneration advisors
New Bridge Street Consultants LLP
20 Little Britain 
London EC1A 7DH
Registered & head office
iSOFT Group plc 
Manchester Business Park
Aviator Way
Manchester M22 5TG
Bankers
Lloyds TSB Bank plc
25 Gresham Street
London EC2V 7HN
Royal Bank of Scotland plc
135 Bishopsgate
London EC2M 3UR
Barclays Bank plc
5 The North Colonnade
Canary Wharf
London E14 4BB
HSBC Bank plc
8 Canada Square
London E14 5HQ
Public relations
Financial Dynamics
Holborn Gate
26 Southampton Buildings
London WC2A 1PB 
Registrars
Lloyds TSB Registrars
The Causeway Worthing
West Sussex BN99 6DA 
Registered number
3716736
Website
www.isoftplc.com 78
NOTABLE DATES 2005
2005
APRIL
MAY
JUNE
JULY
AUGUST
SEPTEMBER
OCTOBER
NOVEMBER
DECEMBER
2006
JANUARY
FEBRUARY
MARCH
APRIL
Financial year end
Preliminary results announced
Annual General Meeting
Final dividend payment
Financial half year
Interim results announced
Interim dividend payment
Financial year end  iSOFT Group plc
2005 annual report and accounts
for the year ended 30 April 2005
Group Headquarters
iSOFT GROUP PLC
Aviator Way
Manchester Business Park
Manchester M22 5TG
Tel: +44 (0) 161 490 2700
Email: info@isoftplc.com
www.isoftplc.com