SECURITIES AND EXCHANGE COMMISSION

                            Washington, D.C. 20549


                                   FORM 40-F

           [ ] REGISTRATION STATEMENT PURSUANT TO SECTION 12 OF THE
                        SECURITIES EXCHANGE ACT OF 1934

          [X] ANNUAL REPORT PURSUANT TO SECTION 13(a) OR 15(d) OF THE
                        SECURITIES EXCHANGE ACT OF 1934

For the fiscal year ended September 30, 2005     Commission File Number 0-23464
                           ------------------------

                               HUMMINGBIRD LTD.
            (Exact name of Registrant as specified in its charter)
<TABLE>
<CAPTION>

<S>                                                 <C>                         <C>
          Canada                                    7372                        Not Applicable
 (Province or other Jurisdiction       (Primary Standard Industrial            (I.R.S. Employer
of Incorporation or Organization)       Classification Code Number)           Identification No.)
</TABLE>

                                1 Sparks Avenue
                           Toronto, Ontario, Canada
                                    M2H 2W1
                                (416) 496-2200
  (Address and telephone number of Registrants' principal executive offices)

                             Hummingbird USA Inc.
                             480 San Antonio Road
                                   Suite 100
                        Mountain View, California 94040
                                (650) 917-7300
           (Name, address (including zip code) and telephone number
       (including area code) of agent for service in the United States)
       ----------------------------------------------------------------


 Securities registered or to be registered pursuant to Section 12(b) of the Act.

                                     None

Securities registered or to be registered pursuant to Section 12(g) of the Act.

 Title of each class:              Name of each exchange on which registered:
 --------------------              ------------------------------------------
 Common Shares, No Par Value       The Toronto Stock Exchange
                                   The Nasdaq Stock Market

       Securities for which there is a reporting obligation pursuant to
                           Section 15(d) of the Act.

                                     None

For annual reports, indicate by check mark the information filed with this Form:

   [X] Annual information form       [X] Audited annual financial statements

 Indicate the number of outstanding shares of each of the issuer's classes of
             capital or common stock as of the close of the period
                        covered by this annual report.

                  The Registrant had 17,418,338 Common Shares
                     outstanding as at September 30, 2005

    Indicate by check mark whether the Registrant by filing the information
     contained in this Form is also thereby furnishing the information to
    the Commission pursuant to Rule 12g3-2(b) under the Securities Exchange
                       Act of 1934 (the "Exchange Act").
        If "Yes" is marked, indicate the filing number assigned to the
                   registrant in connection with such Rule.

           Yes          82-                             No     X
               -------      --------                        --------

    Indicate by check mark whether the Registrant (1) has filed all reports
  required to be filed by Section 13 or 15(d) of the Exchange Act during the
    preceding 12 months (or for such shorter period that the Registrant was
        required to file such reports) and (2) has been subject to such
                  filing requirements for the past 90 days.

           Yes    X                                     No
               -------                                      --------



<PAGE>


                   DOCUMENTS FILED UNDER COVER OF THIS FORM
                   ----------------------------------------

Document No. 1:            Annual Information Form for the year ended September
                           30, 2005.

Document No. 2:            Audited Consolidated Financial Statements for the
                           financial year ended September 30, 2005, prepared
                           in accordance with United States generally accepted
                           accounting principles.

Document No. 3:            Management's Discussion and Analysis of Financial
                           Condition and Results of Operations for the year
                           ended September 30, 2005, prepared in accordance
                           with United States generally accepted accounting
                           principles.


<PAGE>

                                                                Document No. 1

<PAGE>


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                                HUMMINGBIRD LTD.



                         [HUMMINGBIRD GRAPHIC OMITTED]



                            ANNUAL INFORMATION FORM



                           For the Fiscal Year Ended
                               September 30, 2005





                               December 28, 2005


<PAGE>


                               TABLE OF CONTENTS

                                                                           Page
                                                                           ----

1. CORPORATE STRUCTURE .....................................................3

         1.1 Name, Address and Incorporation ...............................3
         1.2 Intercorporate Relationships ..................................4

2. GENERAL DEVELOPMENT OF THE BUSINESS .....................................4

         2.1 Corporate Profile .............................................4
         2.2 Significant Events - Last Three Fiscal Years ..................5

3. DESCRIPTION OF THE BUSINESS .............................................6

         3.1 General .......................................................6

                  3.1.1 Industry Background ................................6
                  3.1.2 Products and Services ..............................8
                  3.1.3 Professional Services and Training ................14
                  3.1.4 Strategy ..........................................14
                  3.1.5 Sales and Marketing ...............................16
                  3.1.6 Research and Development ..........................16
                  3.1.7 Intellectual Property .............................17
                  3.1.8 Competition .......................................18
                  3.1.9 Employees .........................................18
                  3.1.10 Facilities .......................................18
                  3.1.11 New Products .....................................18
                  3.1.12 Other ............................................19

         3.2. Risk Factors ................................................19

4. DIVIDENDS ..............................................................19

5. DESCRIPTION OF CAPITAL STRUCTURE .......................................20

6. MARKET FOR SECURITIES ..................................................20

7. ESCROWED SECURITIES ....................................................21

8. DIRECTORS AND OFFICERS .................................................21

9. PROMOTERS ..............................................................24

10. LEGAL PROCEEDINGS .....................................................24

11. INTEREST OF MANAGEMENT AND OTHERS IN MATERIAL TRANSACTIONS ............24

12. TRANSFER AGENTS AND REGISTRARS ........................................24

13. MATERIAL CONTRACTS ....................................................25

14. INTERESTS OF EXPERTS ..................................................25

15. AUDIT COMMITTEE .......................................................25

16. ADDITIONAL INFORMATION ................................................26


APPENDIX A - CHARTER OF THE AUDIT COMMITTEE ...............................28

APPENDIX B - GLOSSARY OF TECHNICAL TERMS ..................................33


                                     - 2 -
<PAGE>


Certain terms used in this Annual Information Form are defined in the Glossary
of Technical Terms. Unless otherwise noted, all amounts are in U.S. dollars and
in accordance with U.S. generally accepted accounting principles. The
information given herein is as at September 30, 2005, unless otherwise
indicated.


FORWARD-LOOKING STATEMENTS

This annual information form and the documents incorporated by reference herein
contain forward-looking statements within the meaning of the U.S. Private
Securities Litigation Reform Act of 1995. Forward-looking statements are
necessarily made based on estimates and assumptions made by the Company in
light of its experience and its perception of historical trends, current
conditions and expected future developments, as well as other factors the
Company believes are appropriate in the circumstances. These estimates and
assumptions are inherently subject to significant business, economic and
competitive uncertainties, many of which, with respect to future events, are
subject to change. These uncertainties and contingencies can affect actual
results and could cause actual results to differ materially from those
expressed or implied in any forward-looking statements made by the Company, or
on its behalf. In particular, the words "expect," "anticipate," "estimate,"
"may," "will," "should," "intend," "believe," and similar expressions are
intended to identify forward-looking statements. In light of the risks and
uncertainties inherent in all forward-looking statements, the inclusion of
forward-looking statements included or incorporated by reference in this annual
information form should not be considered as a representation by the Company,
or any other person that the Company's objectives or plans will be achieved.
Numerous factors could cause the Company's actual results to differ materially
from those in the forward-looking statements, including the following: (i)
reductions in spending on information technology as a result of adverse
economic conditions; (ii) fluctuations in the Company's quarterly operating
results; (iii) the length and unpredictability of the Company's sales and
implementation cycles; (iv) the Company's ability to successfully integrate
recent or subsequent acquisitions; (v) competition in the Company's industry;
(vi) reductions in revenues associated with the Company's Connectivity
products; (vii) the Company's ability to enhance its current products and
develop new products at competitive prices or in a timely manner; (viii) the
Company's ability to develop products that are compatible with existing
software, hardware and systems; (ix) the concentration of the Company's
customers in a small number of industries; (x) undetected errors in the
Company's software; (xi) the Company's ability to access required technology;
(xii) the Company's ability to protect its proprietary rights and proprietary
technology; (xiii) third-party claims for infringement of intellectual property
rights by the Company; (xiv) foreign exchange risks; (xv) risks associated with
the Company's foreign operations; (xvi) the development of new technology or
standards that render the Company's technology obsolete; and (xvii) dependence
on key personnel. The Company cautions that the foregoing list is not
exhaustive. These factors should be considered carefully, and readers should
not place undue reliance on the Company's forward-looking statements. The
Company undertakes no obligation to release publicly the results of any future
revisions it may make to forward-looking statements to reflect events or
circumstances after the date of this annual information form or to reflect the
occurrence of unanticipated events, except as required by law.



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1. CORPORATE STRUCTURE
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1.1 Name, Address and Incorporation

Hummingbird Ltd. ("Hummingbird" or the "Company") was incorporated under the
Canada Business Corporations Act on September 27, 1984 as 135748 Canada Inc.
Its corporate name was changed to Voiceterm Inc. on December 12, 1984, to
Hummingbird Communications Ltd. on February 20, 1985, and to Hummingbird Ltd.
on March 31, 2000. On June 4, 1985, the articles of the Company were amended to
convert all outstanding Class A Shares into Common Shares and to cancel all
authorized and un-issued Class B Shares. On September 3, 1985, the Company was
amalgamated with 141881 Canada Limited and continued under the name Hummingbird
Communications Ltd. On January 13, 1987, the articles were amended to create an
unlimited number of Special Shares, an unlimited number of Preferred Shares
issuable in series and Redeemable Retractable Preferred Shares Series A. On
March 10, 1993, the articles were further amended to create Redeemable
Retractable Preferred Shares Series B and on July 9, 1993 and July 30, 1993,
the articles were further amended to provide for articles appropriate for a
public company and to subdivide the issued and outstanding Common Shares and
Special


                                     - 3 -
<PAGE>

Shares. On April 1, 1998, the Company was amalgamated with Andyne Computing
Limited under the name Hummingbird Communications Ltd. On October 1, 1999, the
Company was amalgamated with PC DOCS Group International Inc., PC DOCS Group
Canada Inc. and Fulcrum Technologies, Inc. under the name Hummingbird
Communications Ltd. On March 31, 2000, the Company changed its name to
Hummingbird Ltd. On October 1, 2000, the Company was amalgamated with 3137163
Canada Inc. under the name Hummingbird Ltd. Hummingbird Ltd.'s registered and
principal office is located at 1 Sparks Avenue, Toronto, Ontario M2H 2W1.

1.2 Intercorporate Relationships


                          [HUMMINGBIRD LTD. WORLDWIDE
                              CORPORATE STRUCTURE
                               GRAPHIC OMITTED]


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2. GENERAL DEVELOPMENT OF THE BUSINESS
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2.1 Corporate Profile

Hummingbird Ltd. is a leading global provider of enterprise software solutions.
The Company's software offerings fall into two principal product families: (i)
Hummingbird Enterprise, and (ii) Hummingbird Connectivity.

The Company's flagship offering, Hummingbird Enterprise, is an integrated
Enterprise Content Management (ECM) suite enabling users to capture, create,
access, manage, share, find, extract, analyze, protect, publish and archive
business content across the extended enterprise from anywhere in the world.
Corporations, firms, and governments rely on Hummingbird Enterprise as an ECM
solutions enablement platform for compliance, best practices, service delivery,
business continuity, disaster recovery, information visibility, corporate
governance, and risk mitigation.


                                     - 4 -
<PAGE>

Hummingbird Connectivity is the Company's market leading host access product
suite that includes software applications for accessing mission-critical back
office applications and related data from the majority of today's systems,
including mainframe, AS/400, Linux and UNIX platform environments.

Hummingbird was founded over 20 years ago in 1984. Today the Company's products
are sold and supported in approximately 100 countries worldwide. The Company
sells its products directly to customers and indirectly through distributors,
value-added resellers, systems integrators and original equipment
manufacturers. Hummingbird's products & solutions are used in a wide range of
industries - predominantly in law firms and corporate legal departments,
government (national & international, local & regional), financial services,
energy, utilities and manufacturing.


2.2 Significant Events - Last Three Fiscal Years

The following discussion describes how Hummingbird's business has developed
over the last three completed fiscal years.

Fiscal Year 2003

In March 2003, the Company acquired LegalKEY Technologies, Inc., a New
York-based privately held software and solutions company specializing in
integrated practice support solutions for law firms and professional services
organizations.

In March 2003, the Company acquired Key Automation Nederland B.V. and its
affiliate, Dispro B.V., privately held distributors and integrators of document
solutions based in the Netherlands. Key Automation/Dispro was a long-standing
Hummingbird partner with significant expertise in the deployment of government
compliance solutions based on Hummingbird Enterprise. This acquisition
strengthened the Company's position in the government market.

In June 2003, the Company acquired Kramer Lee and Associates Limited, a
privately held U.K-based provider of practice support solutions for law firms,
insurance and financial services clients in the United Kingdom. The acquisition
infused additional domain expertise within Hummingbird and further strengthened
the Company's market leadership in the legal vertical market segment.

In July 2003, the Company acquired Valid Information Systems Limited, a
privately held software and solutions company based in the United Kingdom that
operates in the compliance and records management markets in the United
Kingdom. This acquisition has accelerated Hummingbird's traction within the
U.K. central government.

Fiscal Year 2004

There were no acquisitions or significant events to report for fiscal year
2004.

Fiscal Year 2005

In June 2005, the Company acquired RedDot Solutions AG, a privately held
provider of content management software, headquartered in Oldenburg Germany and
New York. With over 1,300 clients globally, RedDot Solutions is recognized as a
leader in delivering simple to install and easy to use content management
solutions to mid-size enterprises. This acquisition strengthens Hummingbird's
position as a market leader in the integrated Enterprise Content Management
market segment while extending and accelerating market reach within mid-size
enterprises where the demand for enterprise content management solutions is
expected to outpace all other segments of the market.

Outlook

Hummingbird continues to focus on its strategy to organically grow the
Enterprise Content Management business, preserve its commanding market share in
the Connectivity business, maintain profitable operations and manage the
Company's assets and resources with a view to creating sustainable shareholder
value.


                                     - 5 -
<PAGE>

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3. DESCRIPTION OF THE BUSINESS
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3.1 General

Hummingbird Ltd. is a leading global provider of enterprise software solutions.
The Company's software offerings fall into two principal product families: (i)
Hummingbird Enterprise - Enterprise Content Management, and (ii) Hummingbird
Connectivity.

3.1.1 Industry Background

Enterprise Content Management (ECM) Market

Information is among the most valuable assets of any organization. However, the
rapid growth of structured and unstructured data has resulted in disparate
repositories of data throughout organizations and a significant management and
control problem. Yet an organization's ability to efficiently manage and
utilize the vast quantities of content and data generated through everyday
processes, transactions and events, can yield numerous advantages.

Organizations are meeting these challenges with ECM systems that enable the
management of all content throughout its lifecycle. ECM allow users to
systematically capture, create, manage, review, distribute, publish, store and
preserve business content based on rules defined by the organization or
mandated by regulations.

While the ECM market has been in continuous state of evolution over the past 10
years, a number of business drivers have taken ECM from a strategic "project",
to an essential - and even mandated - requirement for organizations in
virtually every market. Compliance is the primary driver. Industry analyst
research cites concern over increasing regulatory issues as the number one
motivation behind organizational interest in ECM. It is this increased
regulatory burden relating to privacy, electronic discovery and compliance
which has driven substantial growth in ECM as organizations are required to
manage data in a manner that allows them to meet regulatory requirements. The
two other main thrusts behind ECM deployment are cost reduction and the belief
that by leveraging content, new opportunities and business advantage will be
generated.

The foregoing market drivers require systemic changes in how organizations
capture, manage, control and preserve content such as e-mail, electronic and
physical documents and web content. Failure to do so not only means increased
legal exposure but in many cases loss of competitive advantages. Content knows
no boundaries. It freely flows within and across the extended enterprise. To
harness this asset, organizations are now making significant investments in the
development of ECM. The emphasis is on centralized content repositories,
implementation of business processes that streamline content creation, approval
and retention practices and to empower knowledge workers to access content in
context, both when they need it and in the format they need it.

The market demand for ECM software is accelerating. The consensus industry
analyst estimates for license revenue growth are greater than a 10% Cumulative
Average Growth Rate (CAGR) between 2005 and 2008; growing from US$1.2 billion
to US$1.9 billion, outpacing virtually every segment of the IT software market.
Total revenue growth including software license, maintenance and professional
services is expected to grow from $ 2.1 billion in 2005 to $ 3.9 billion in
2008. IT industry analyst Gartner anticipates mainstream adoption of ECM as the
management and preservation of intellectual assets become IT investment
priorities.

Hummingbird has correctly anticipated a trend towards market consolidation in
the ECM market and has delivered ahead of its peer group of competitors, an
integrated ECM offering. Since the launch of the first version of Hummingbird
Enterprise in 2002, the company has capitalized on being first to market with
an integrated ECM offering. This suite is designed to support mission-critical
content life cycle management solutions that includes capturing, creating,
accessing, managing, sharing, finding, analyzing, protecting and publishing
content as part of an integrated process, thereby helping organizations manage
risk, improve process efficiencies and position them for competitive
advantages.

The Company has considerably expanded its strategy by focusing on repeatable
and high value line of business content life cycle management solutions such as
Contract Life Cycle Management, Correspondence Management, Deal Management and
Proactive Compliance solutions for manufacturing, government, financial and
professional services market segments. With already established market
leadership in the aforementioned vertical markets, the Company is further
entrenching its leadership with high value solutions that enables its customers
to derive



                                     - 6 -
<PAGE>

incremental value and a tangible Return on Investment (ROI), while generating
incremental revenue from a highly loyal and committed installed base of global
customers.

Connectivity Market

Hummingbird Connectivity solutions allow users to access back-office UNIX,
Mainframe and AS/400 applications from Windows desktops and the Web. They
enable organizations to increase operational efficiencies by providing
transparency between various software platforms on which files are created and
maintained throughout an organization. Because of the importance of linking
internal organizations, connectivity solutions are considered part of the
foundation of most organizations' systems. The connectivity market includes
host access, traditional PC to host client, and Web to host client access
products. The Company believes that periodic desktop and software upgrades, as
well as growth in the number of end-users, will continue to support demand for
the connectivity market in the future, although there can be no assurance that
the Company's market share will remain at its current level in the future.

During the 1990s the X Window system grew in popularity largely due to the
increased deployment of the UNIX operating system in client/server
environments. Although X Window was designed as a universal network-based
graphics and windowing system and is commonly used for applications running on
Digital VMS, IBM mainframe and other operating systems, its most significant
application is in UNIX environments. X Window has assisted in the expansion of
the UNIX market by providing an industry-standard network windowing solution
for UNIX, utilizing an intuitive graphical user interface. The X Window
protocol is currently at version X11R6.8. "Broadway" is an extension of the X
protocol, which allows Broadway-enabled browsers and companion X servers to
provide remote access to interactive Windows and UNIX applications over the
Internet.

Today, virtually all UNIX systems are shipped with X Window bundled in. PC X
server software was introduced in 1988 to enable PCs to display X Window
applications. PC X server software became accepted as an attractive means of
enabling PC users to obtain access to X applications on a network, while still
permitting local desktop DOS or Windows application processing. With the
proliferation of more powerful Pentium-based PCs, PC X server software has
evolved to deliver higher performance at significantly lower incremental cost.

PC-X servers evolved to become a vital component of PC networking, offering a
wide variety of connectivity and administrative features. The functionality of
PC-X server products increased significantly as user requirements became more
sophisticated. Today, PC-X server products deliver a highly functional suite of
networking utilities and services, including file and print services, various
terminal emulations, security tools, network management abilities, and other
integrated applications. A PC running PC-X server software can simultaneously
display multiple X applications and local PC applications in separate windows,
enabling the user to copy and paste data, text and graphics from one window to
another. This allows the transfer of information among otherwise incompatible
computer environments. Since the graphical user interfaces of Windows and
OSF/Motif, the most commonly used window manager in the X Window environment,
are similar in look and feel, users can switch easily from Windows applications
to X applications.

The Company believes that the historical growth in the PC-X server market is
attributable primarily to the large installed base of PCs networked via the
TCP/IP protocol. TCP/IP is the most commonly used protocol both for open
inter-connectivity among disparate networks and for X Windows networking. Over
the years, the proliferation of UNIX workstations and the increased number of
X-compliant applications drove the growth in the PC-X server market; however,
since a PC running PC-X server software can simultaneously display multiple X
applications, these drivers have diminished in importance. Going forward,
demand for X Windows applications is being driven primarily by increases in the
number of end-users using the applications.

According to International Data Corporation (IDC), the PC-X server market in
1999 was valued at US $124.4 million. IDC estimated that the Company's flagship
connectivity product, Exceed(TM) held over 71% of the worldwide PC-X server
market. The Company has been the market share leader since 1991. According to
IDC, in 1999, the Company's closest competitor had a 20% share of the market.
IDC discontinued its coverage of the PC X server market in 2000 and thus,
market size figures have not been available since then. However, the Company
believes that its market share remains relatively consistent with the IDC
figures reported above.


                                     - 7 -
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3.1.2 Products and Services

Hummingbird's products can be broken out into four main product lines:
Hummingbird Enterprise, Business Intelligence & Data Integration, LegalKEY
Practice Support Solutions, and Connectivity.

Hummingbird Enterprise

Hummingbird Enterprise is a state-of the art integrated ECMplatform that
enables organizations to unlock the value of business content and provides the
foundation for building process-centric ECM solutions. Key elements of
Hummingbird Enterprise feature a highly secure, scalable, and high performance
framework for building content-centric business solutions for:

     o    Controlling and managing content throughout its lifecycle
     o    Streamlining, automating, auditing, and reporting on business
          processes
     o    Implementing sound records management practices and ensuring
          regulatory compliance
     o    Establishing team collaboration workspaces and virtual deal rooms
          with integrated content-centric workflow
     o    Simplify capture, access, search, and retrieval of content for
          faster, more effective decision making

Several key features of Hummingbird Enterprise are briefly described below.

Enterprise Content Repository -- Hummingbird Enterprise provides a scalable
repository for storing a variety of business content including business
documents, electronic records, email messages and attachments, Web content,
scanned and OCRed content, instant messaging threads and reports.

Highly Sophisticated Security Model -- Hummingbird Enterprise provides
inclusionary and exclusionary group and/or role-based security, allowing
organizations to restrict/permit access to content stored in the repository at
the object, folder and library level.

E-Mail Management -- Hummingbird Enterprise provides both client-side and
server-side automated rules-based e-mail management capabilities that helps
companies comply with regulations mandating the retention of e-mail messages
and attachments as records. With Hummingbird Enterprise, incoming and outgoing
e-mail messages and attachments can be easily captured, profiled, categorized
and stored into the Hummingbird Enterprise repository.

Records Management -- Hummingbird Enterprise certified records management
capabilities include the automatic creation, retention and final disposition of
records at any stage of the content lifecycle, thereby enabling long-term
access and audit and retention control of all content in compliance with
various regulatory compliance and governance requirements.

Web Content Management -- On June 21, 2005 the Company announced and completed
the acquisition of RedDot Solutions a leading provider of Web Content
Management software to mid-market customers globally. With the addition of
RedDot's web content management capabilities, Hummingbird Enterprise will
enable the collecting, assembling and staging of content (both graphic and
textual) for the purpose of publishing to Web sites or intranets. Additionally,
content delivery can be automated to streamline the process, ensure
traceability and eliminate bottlenecks.

Knowledge Management -- Hummingbird Enterprise automatically categorizes and
indexes all content stored in the Hummingbird Enterprise repository, allowing
users to search content based on metadata, actual text in the document or both.
Hummingbird Enterprise's advanced knowledge management functionality allows for
content residing in Microsoft Exchange, Web Sites, databases, enterprise
applications and file systems to be indexed. Hummingbird Enterprise can execute
a search that will find content across these disparate content repositories
within the organization and get a ranked, unified result set.

Business Process Management -- Empowers business process owners and content
managers to easily define, apply and reuse business logic and processes
providing them with the ability to generate cohesive interactions among people,
business systems and content.

Reporting --Allows non-technical users to access, query, report and analyze
information stored in corporate data warehouses, data marts and business
applications.

Content Integration --Provides data integration tools that allow for data
extraction, transformation and loading from a range of databases and
applications.


                                     - 8 -
<PAGE>


Content Lifecycle Management

Hummingbird Enterprise provides a comprehensive framework for Content Life
Cycle Management (CLM). CLM is the ability to systematically capture, create,
manage, review, distribute, publish, store and preserve business content based
on rules defined by the organization or mandated by regulations. (See Content
Lifecycle Management figure below).



                [CONTENT LIFECYCLE MANAGEMENT GRAPHIC OMITTED]



The fully integrated Hummingbird Enterprise ECM platform is comprised of the
following core components:

<TABLE>

Product                              Product Type       Functionality
<CAPTION>

<S>                                  <C>                <C>
Hummingbird Enterprise BI Query      Query and          Helps users ask questions about corporate data and visualize the
                                     Reporting          answers for more effective decision-making. BI Query utilizes
                                                        data models and a powerful reporting environment to access and
                                                        analyze enterprise data sources quickly and easily.

Hummingbird Enterprise DM            Document           DM library services such as check-in and check-out, version
                                     Management         control, and user and document-level security for business
                                                        documents. It is a secure and simple system that provides the
                                                        power to control information throughout global organizations, to
                                                        meet competitive challenges and harvest collaborative knowledge.
                                                        It delivers a centralized repository, feature-rich functionality
                                                        and intuitive interface for users while working in tandem with
                                                        other modules for collaboration, instant messaging, workflow,
                                                        records management, reporting and analysis, and much more.

                                                        Hummingbird Imaging is an add-on to Hummingbird

</TABLE>

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<PAGE>

<TABLE>
<CAPTION>

<S>                                  <C>                <C>
                                                        Enterprise DM allowing users to integrate and manage scanned
                                                        documents, faxes, optical character recognition (OCR) and other
                                                        electronic images on their network

Hummingbird Enterprise               Content Sharing    Is a highly secure, Web-based collaborative workspace for
Collaboration                                           dispersed teams across and beyond the enterprise. It enables
                                                        businesses across the entire industry spectrum to streamline
                                                        collaborative processes, enhance team productivity and speed the
                                                        delivery of targeted results in any collaborative activity.

Hummingbird Enterprise Content       Enterprise         Allows Hummingbird Enterprise content to be shared across each of
Integration                          Integration        the components of Hummingbird Enterprise. Providing organizations
                                                        with a unified view of their enterprise content - enterprise
                                                        content that is accessible, meaningful and actionable.

Hummingbird Enterprise Email         Email Management   Captures, manages, preserves and leverages corporate e-mail as a
Management                                              mission critical asset. Hummingbird Enterprise is integrated with
                                                        all the major e-mail systems such as Microsoft(R) Outlook, Novell
                                                        GroupWise and Lotus Notes.

Hummingbird Enterprise IM            Real-Time          Is a highly secure corporate instant messaging platform. It
                                     Messaging          offers unique value in three areas - real-time collaboration,
                                                        capturing and retaining knowledge transferred during chat
                                                        sessions and enhanced productivity.

Hummingbird Enterprise KM            Knowledge          Allows users to conduct single, unified searches across multiple
                                     Management         unstructured information sources including Lotus Notes, Microsoft
                                                        Exchange Server, Web sites, file repositories, document
                                                        management systems, multimedia libraries, and more. Additionally,
                                                        structured data sources like databases and enterprise operational
                                                        systems are also indexed to provide a truly amalgamated result
                                                        set.

Hummingbird Enterprise Mobility      Mobile Content     Is both a framework and an out-of-the-box solution that enables
                                     Access             users to access enterprise content no matter which device they
                                                        use. It provides users with "actionable mobility" - a highly
                                                        interactive environment that facilitates exchange between mobile
                                                        devices of knowledge workers and critical business systems.

Hummingbird Enterprise RM            Records            Provides a completely secure, feature rich, standards-compliant
                                     Management         records management solution for classifying documents and other
                                                        content as business records in support of legal or regulatory
                                                        compliance, archiving and the automation of retention policies.
                                                        When combined with records management methodologies and best
                                                        practices, it helps establish comprehensive lifecycle management
                                                        of paper and electronic records. It provides a fluid process for
                                                        the protection of content assets against risks such as litigation
                                                        or disaster while meeting complex regulatory requirements.

Hummingbird Enterprise Webtop        Content Access     Is a comprehensive, standards-based portal platform that
                                                        integrates all components of Hummingbird Enterprise to deliver
                                                        personalized content, applications and collaboration capabilities
                                                        within "dynamic views" or virtual workspaces, based on the role
                                                        of the user in the business process. As a

</TABLE>


                                                         - 10 -
<PAGE>

<TABLE>
<CAPTION>

<S>                                                     <C>
                                                        portal platform it also enables organizations to extend existing
                                                        investment in information technology by providing an environment
                                                        for integrating applications, presenting and publishing content,
                                                        and leveraging workflow capabilities to streamline business
                                                        processes.

Hummingbird Enterprise WorkFlow      Process            Empowers business process owners and content managers to easily
                                     Automation         define, apply and reuse business logic and processes providing
                                                        them with the ability to generate cohesive interactions among
                                                        people, business systems and content. Capabilities typically
                                                        include task assignment, automated tracking (audit trail
                                                        generation), work state communication (in process, completed,
                                                        bottleneck, etc.) and graphic representation of the workflow
                                                        itself.

Hummingbird Enterprise R/KYV         Records
                                     Management for     Hummingbird Enterprise R/KYV provides a comprehensive
                                     UK Government      compliance solution to meet the requirements of UK Central
                                                        Government Agencies and Departments in support of legislatively
                                                        mandated initiatives such as Freedom Of Information and Privacy
                                                        requirements.

DOCS Open                            Document
                                     Management         Hummingbird DOCS Open is a client/server, Windows-based
                                                        solution that gives organizations the ability to create
                                                        centralized repositories, or libraries, containing all of the
                                                        unstructured data they generate. Powerful search and retrieval
                                                        tools make this information easily available for use and
                                                        collaboration across the entire enterprise. Versioning and
                                                        security profiles ensure lifecycle document integrity. Imaging,
                                                        Routing and Records Management services round out the
                                                        Hummingbird DOCS Open Family. DOCS Open was Hummingbird's
                                                        original document management solution which is still supported
                                                        by Hummingbird and is owned by many customers worldwide.

RedDot                               Web Content        Provides web content management software to create and manage the
                                     Management         content that drives mission critical business applications such
                                                        as customer centric web sites, intranets and extranets (Please
                                                        refer to the expanded RedDot product line discussion below).

</TABLE>

RedDot

Web Content is becoming an increasingly important component of Enterprise
Content Management. Organizations need to stream-line content repositories to
optimize efficiencies, reduce redundant tasks, and empower their content
owners.

With the acquisition of RedDot, a leading provider of Web Content Management
software to customers globally, Hummingbird has successfully rounded out its
integrated enterprise content management (ECM) offering, extended its
geographic reach, and strengthened its position in the rapidly growing mid-size
enterprise ECM market.

Hummingbird and RedDot customers now have an integrated Document and Web
Content Management Solution that comprehensively administers the content
lifecycle. With RedDot Content Management Server (CMS), Hummingbird customers
can leverage strong Web content management capabilities to complement their
investment in Hummingbird's enterprise content management solutions.



                                    - 11 -
<PAGE>


Product Name                 Functionality

RedDot CMS                   RedDot CMS is a set of modules that provides
                             organizations with an easy to use, easy to deploy,
                             and easy to administer web content management
                             solution. RedDot CMS places the ability to update
                             web content in the hands of those who know it best
                             while supporting a permissions-based security
                             module and meeting industry and regulatory
                             requirements

RedDot XCMS                  RedDot's Extended Content Management System
                             (XCMS)(TM) helps organizations manage their
                             information in a central and secure way. XCMS
                             introduces online collaboration and business
                             process automation securely to foster innovation
                             and add new value to organizations.

RedDot LiveServer            RedDot LiveServer allows organizations to easily
                             deliver personalized content from their RedDot CMS
                             website, intranet and extranet, and incorporate
                             content from a variety of structured and
                             unstructured data sources.


Business Intelligence (BI) and Data Integration

Companies today recognize that in order to remain competitive they require
solutions that leverage their data assets. The business intelligence and data
integration market, sometimes also referred to as the "data analysis market"
encompasses three main areas: data warehousing (framing and unifying multiple
data sources in a coherent information repository), data exchange (transforming
and exchanging information between disparate enterprise applications to achieve
consistency between operational systems), and query and reporting (user-driven
multidimensional querying, reporting, manipulating and exploring data to
discover and analyze trends and patterns).

The demand for data integration and reporting technologies has surged in recent
times, driven by the general business climate of increased competition.
Companies in nearly every industry are looking to improve their time-to-market,
customer services and operational processes by utilizing more effectively and
quickly the vast amounts of data they acquired and invested in. In essence,
data integration and reporting software allows companies to transform
information into knowledge, enabling fast and informed business decisions. In
addition, there is an ongoing trend toward decisions being made at lower levels
of many organizations. Data integration and reporting software equips employees
at all organizational levels with decision-support tools that reduce training
time and that are tailored to their environments.

The following table provides a summary of the products that belong to
Hummingbird's Business Intelligence and Data Integration product line:

<TABLE>
Product Name              Product Type         Functionality
<CAPTION>

<S>                       <C>                  <C>
Hummingbird BI            Business             Allows non-technical end-users to access, query, report and
                          Intelligence         analyze information stored in corporate data warehouses, data
                                               marts, and business applications.

Hummingbird Genio         Data Integration     A data integration solution that spans the functional areas of
                                               data extraction, transformation, and loading (ETL) and enterprise
                                               application integration (EAI).

Hummingbird Met@Data      Metadata Management  An enterprise metadata management solution, which delivers
                                               seamless metadata access and integration, maximizing reuse of
                                               important metadata and ensuring metadata usability.

</TABLE>

                                    - 12 -
<PAGE>


LegalKEY Practice Support Solutions

LegalKEY Practice Support Solutions provide a true end-to-end matter lifecycle
management solution and proactive compliance framework.

Attorneys and support staff need technology to get out of the way and let them
focus on client issues. Practical compliance methods enable attorneys and
support staff to focus on matter-centric tasks while proactive compliance tools
centralize and automate governance processes to manage work product throughout
the matter lifecycle.

Hummingbird Enterprise for Legal with LegalKEY Practice Support Solutions helps
law firms comply with a multitude of regulations, laws, governances, and
procedural firm best practices throughout the matter lifecycle. By taking a
holistic view to managing practice processes, firms enable attorneys and
support staff to nimbly navigate compliance complexities. Attorneys can open
new business faster while addressing compliance and risk issues, achieve
records compliance without being records managers, and avoid malpractice losses
while improving docketing efficiencies.

The table below provides a summary of the products that comprise LegalKEY
Practice Support Solutions.

<TABLE>
Product Name                    Functionality
<CAPTION>

<S>                             <C>
Conflicts Management            Execute quick and thorough conflicts searches and produce succinct and
                                relevant reports for optimal firm protection.

New Business Intake             Automate the client intake process for faster approvals, increased
                                protection and reduced risk.

Critical Dates Management       Create and manage detailed dockets and events, including LegalKEY Court
                                rules integration so that no deadlines are missed.

Records Management              For complete, content-driven management of all information- regardless of
                                source of origin or media type.

</TABLE>

Connectivity

Hummingbird Connectivity seamlessly delivers enterprise mission critical data
to the user desktop and is designed to bridge the gap between legacy systems
and enterprise users by delivering the quickest, easiest and most secure single
point of access to UNIX systems, mainframe and AS/400s.

Exceed is the most secure and popular PC X server in the market. It allows
users to cost-effectively connect the powerful Microsoft Windows desktops to a
wide variety of X Window enabled servers, and access high-end X applications.

HostExplorer provides high-speed desktop connectivity to enterprise hosts,
including IBM Mainframe, AS/400 and UNIX systems. HostExplorer delivers a
variety of terminal model types and runs with Windows 2000/XP and Windows
Server 2000/2003 32-bit and 64-bit operating systems across corporate intranets
and the Internet.

The Company's NFS Maestro line provides file and print services solutions for
mixed PC and UNIX environments. This technology allows users to access remote
data in a familiar graphical Windows environment without having to understand
UNIX, NFS commands or underlying network complexities. The NFS client provides
quick access to file and print services on any NFS server throughout the
network. In addition, the NFS client includes a suite of TCP/IP client
applications that provide networking functions. The NFS server applications
make local operating system resources available to other NFS clients throughout
the enterprise.

Exceed onDemand permits remote users to access back office applications,
providing the full range of PC X Server functionality in an ultra-thin,
two-tiered application that can be accessed through dial-up connections. Exceed
onDemand is extremely light and fast, and delivers seamless, reliable, secure,
flexible, robust and cost-effective access from remote locations to the many
types of computing platforms in an enterprise, including UNIX, Linux, VMS, X
Windows and IBM mainframes.

Connectivity SecureTerm is Hummingbird's brand new secure terminal solution.
Connectivity SecureTerm preserves the legacy of UNIX applications while
providing a strong set of security standards and unparalleled

                                    - 13 -
<PAGE>

terminal and file transfer functionalities. Connectivity SecureTerm is the
industry's first full-featured web-to-host secure shell terminal and file
transfer software for Windows. It allows organization to protect sensitive
corporate data by bringing strong authentication, powerful encryption and
guaranteed data integrity to replace traditional non-secure network protocols

3.1.3 Professional Services and Training

The Company's professional services group forms a critical component of its
integrated solution offering. This group is dedicated to helping customers and
partners derive greater value from the Company's solutions in a timely fashion,
thus maximizing the return they can generate on their technology investment. In
addition to providing comprehensive, ongoing training courses, the Company's
professional services group offers a wide range of customer services including:
mix-and match programming services (integrating the Company's products into
existing corporate applications), building data models and reports, and
analyzing data and building data sources using the Company's analysis tools. By
providing a wealth of expertise in all aspects of the Company's technologies,
the professional services group is able to offer customers guidance through
every stage of implementing the Company's products and solutions.

Service and Support

The Company provides customers with support via telephone, e-mail and the
Internet. In addition, technical support staff often make on-site visits to
customers. The Company's technical support engineers not only provide
assistance in diagnosing problems, but also work closely with customers to
address system integration issues and to assist in increasing the efficiency
and productivity of their systems. The Company maintains in-house hardware
platforms and host applications from numerous vendors, in order to permit
compatibility testing during product development and replication of customer
problems to assist in customer support. In addition, to be able to provide
better global support to all of its customers, the Company offers local
technical support from its offices around the world.

The Company generally provides a 90-day service warranty for its products. To
encourage customer upgrades, the Company notifies registered customers of new
releases and offers upgrades at a discount to the suggested list price of the
product. The Company seeks to incorporate, into its products, features and
functionality that are responsive to customer needs, including an easy to use
installation facility and over-the-network installation and upgrade capability.
Larger sales are site licenses under which customers may purchase an annual
maintenance program, which entitles them to an automatic upgrade upon shipment
of a new release.

The Company believes that its experience in solving customer problems together
with the technical expertise of its support personnel, combine to differentiate
it from its competitors and constitute a competitive advantage.

3.1.4 Strategy

The Company's primary strategy is to strengthen and consolidate its market
leadership position in the rapidly growing enterprise content management
market. The key elements of the Company's strategy are:

Maintain Technology Leadership by Continuing to Invest in Research and
Development

The Company intends to maintain its technological leadership by continuing to
invest in the research and development of its enterprise content management
product suite. The Company is committed to providing the following features to
its customers:

     o    Seamless integration between the components of its products that will
          ensure lower deployment and administration costs
     o    An effective method of bridging the management of unstructured and
          structured business content
     o    Advanced knowledge management capabilities that empower users to
          categorize and find content in context
     o    A rules engine that automates repetitive processes such as document
          profiling and classification
     o    The ability to access and manage content from mobile devices and
          smart phones
     o    The scalability and performance necessary to support very large
          content management implementations that leverage IT investments



                                    - 14 -
<PAGE>

     o    Additional features and enhancements that enable faster creation of
          business solutions and content centric applications

Focus on Select Vertical Markets

The Company focuses on select verticals including legal, government and
financial services. The Company intends to accomplish this by offering an
integrated enterprise content management solution tailored specifically to
these verticals that leverage its prior strategic acquisitions in these market
segments. The Company will also focus its sales and marketing efforts on
expanding its market leadership position in the legal and government verticals,
and on further developing its presence in certain key growth verticals,
including financial services, energy, utilities and manufacturing.

Create and Market Solutions for Emerging Opportunities

A key dimension of the Company's growth strategy is to invest in solutions that
address specific business requirements across its target verticals. The Company
has created specific solutions such as Hummingbird Enterprise for Contract
Management, which allows companies to streamline the contract management
process through the use of a powerful contract creation environment, and
Hummingbird Enterprise for ESRI, which enables organizations to link enterprise
content with geographic information systems (GIS) data and maps. The Company
has also created solutions that assist businesses in complying with the
Sarbanes-Oxley Act of 2002 and with anti-money laundering regulations. The
Company intends to continue to enhance its products in a way that allows it to
respond quickly to future business opportunities as they arise.

Continue to Provide Superior Support for Customers

The Company seeks to provide a high level of customer service and support. It
is the Company's belief that its experience in solving customer problems,
together with the technical expertise of its support personnel, combine to
differentiate the Company from its competitors and constitute a competitive
advantage. The Company also believes that its extensive experience in servicing
its large customer base has assisted the Company in developing, over time, a
robust and stable product line.

Continue to Pursue Strategic Acquisitions

The Company has completed several acquisitions since 1995 that have added
complementary solutions to its product offerings. For example, in June 2005,
the Company acquired RedDot(TM) Solutions AG, a privately held provider of
content management software. This acquisition strengthens Hummingbird's
position as a market leader in the integrated Enterprise Content Management
market segment while extending and accelerating market reach within mid-size
enterprises where the demand for enterprise content management solutions is
expected to outpace all other segments of the market The Company is evaluating
other acquisition opportunities, to determine whether they present the
potential to add functionality to Hummingbird Enterprise, and/or to grow its
distribution and service capabilities.

Leverage Global Distribution Channels

The Company is focused on expanding and augmenting its highly effective
distribution channels in order to maintain leadership in the markets in which
it operates. The Company's strategy is to complement its direct sales
initiatives with partners that have specific domain knowledge within its
targeted verticals and forge specialized relationships that accelerate time to
market delivery of such targeted solutions. By creating such specialized
partnerships the Company hopes to increase the average transaction value per
deal and raise entry barriers for its competitors.

Focus on Maintaining Customer Loyalty

The Company seeks to maximize revenue from its diverse installed base of
customers by investing in initiatives that are designed to foster customer
loyalty and generate repeat business. These investments include programmatic
initiatives that are focused on selling Hummingbird Enterprise to the Company's
installed base of connectivity and DOCS Open customers. The Company also
participates in advisory boards that engage its customers in market-driven
product development.


                                    - 15 -
<PAGE>

3.1.5 Sales and Marketing

As the market for enterprise content management solutions continues to grow
worldwide, the principal objectives of the Company's marketing strategy are to
maintain its position as a recognized enterprise content management leader and
to enhance its position as a key provider of comprehensive software solutions
for the management of enterprise information assets. The Company's marketing
activities include user group meetings, advisory boards, participation in trade
shows and conferences, nurturing relationships with key industry analyst firms,
advertising, public relations and publication of technical articles.

The Company sells its products through a direct sales force that targets major
multinational accounts, and a large and established network of distributors and
resellers across North America, Europe, Australia and the rest of the world.
The Company believes that its highly effective distribution channels are
important to its leadership in the enterprise software market.

The Company's direct sales force markets primarily to major customers, performs
telemarketing and supports distributors and resellers. Significant analysis of
the customer's enterprise network and requirements may precede the sales
proposal, requiring the involvement of the Company's technical support and
system engineering personnel. These employees participate in the sales cycle by
educating prospective customers on the advantages of enterprise content
management solutions, and by assisting in system planning, configuration and
integration.

Approximately three-quarters of the Company's direct sales force is dedicated
to selling Hummingbird Enterprise. The Company provides integration and
cross-training efforts that it feels are necessary for the effective execution
of its integrated solution positioning in the marketplace. This integration
allows the Company to maximize its ability to benefit from the unified
marketing message that it launched in February 2002. The remaining quarter of
the Company's sales force is dedicated to selling the Hummingbird Connectivity
suite.

The Americas represent the Company's largest geographic market, generating
approximately 51% of the Company's sales for fiscal 2005. The Company sells its
products in the Americas through a combination of a direct sales force and a
network of authorized distributors, resellers and systems integrators. The
Company addresses this market through its Toronto based headquarters, and also
maintains sales offices in several other North American cities, including
Ottawa, Ontario; Mountain View, California; Washington, D.C.; Burlington,
Massachusetts; Tallahassee, Florida; Dallas, Texas; New York, New York; Los
Angeles, California; and Chicago, Illinois.

For fiscal 2005 sales in Europe represented 41% of the Company's total sales,
and sales in the rest of the world were approximately 8%. The Company has sales
offices in Switzerland, United Kingdom, Germany, France, Sweden, Italy, Belgium
and Holland. The Company also has offices or arrangements with local resellers
in Australia, Japan, South Korea, Hong Kong, Taiwan, Singapore, Malaysia,
Thailand, Indonesia, India, China, Mexico, Venezuela, New Zealand and Israel.

3.1.6 Research and Development

The Company believes that its success is based largely on its ability to
develop innovative technology. The Company must continue to develop and
introduce new features and functionality in order to maintain its competitive
position, and to broaden its enterprise software offering.

The Company's product development team focuses on enhancing its products by
continually increasing performance and adding new features and support options.
Software enhancements are based on new protocol and standards releases, such as
new PC operating system releases, customer suggestions and requests, and
internally engineered innovations. Historically, the Company has issued new
software releases approximately once per year per product.

Given the rapidly evolving nature of the software industry, the Company
considers its program of new product development and on-going product
enhancements to be a significant competitive advantage. In fiscal 2005 the
Company released upgrades to each of its products.

The Company intends to further enhance its existing product offerings in the
current fiscal year through on-going research and development efforts. The
Company's main research and development facilities in Canada are in


                                    - 16 -
<PAGE>

Toronto, Ottawa, Kingston, Halifax and Montreal, in the United States in
Tallahassee, Florida and New York, New York, and Edinburgh, Scotland and
London, England in the United Kingdom.

3.1.7 Intellectual Property

The Company's success is heavily dependent upon proprietary technology. The
Company has no patents, and existing copyright and trademark laws afford only
limited practical protection for its software. In addition, the laws of some
foreign countries do not protect the Company's proprietary rights to the same
degree that they are protected by the laws of the United States and Canada.
Accordingly, the Company relies primarily on trade secret protection and
confidentiality and proprietary information agreements to protect its
intellectual property. The loss of any material trademark, trade name or
copyright could have a material adverse effect on the Company's operations.
There can be no assurance that the Company's efforts to protect its
intellectual property rights will be successful. Despite the precautions taken
by the Company, it may be possible for unauthorized third parties to copy
certain portions of the Company's products or to obtain and use information
that the Company regards as proprietary.

A substantial portion of the Company's sales are derived from the licensing of
its products under "shrink wrap" license agreements that are not signed by
licensees and therefore may be unenforceable under the laws of certain foreign
jurisdictions. Although the Company does not believe that its products infringe
on the rights of third parties, there can be no assurance that third parties
will not assert infringement claims against the Company in the future or that
any such assertion will not result in costly litigation or require the Company
to obtain a license to distribute the intellectual property rights of such
parties. In addition, there can be no assurance that such licenses will be
available on reasonable terms or at all.

While the Company's competitive position may be affected by its ability to
protect its proprietary information, the Company believes that, because of the
rapid pace of technological change in the industry, factors such as the
technical expertise, knowledge and innovative skill of the Company's management
and technical personnel, its name recognition, the timeliness and quality of
support services it provides and its ability to rapidly develop, enhance and
market software products may be more significant in maintaining its competitive
position.

Trademarks

The Company holds the following trademarks:

DOCS(R), Hummingbird(R) (Word mark and symbol), Know How. Now.(TM) ,
LegalKEY(R), Transforming Information into Intelligence(TM) , 360(degree) View
of Enterprise Content(TM) Hummingbird Enterprise(TM), Hummingbird
Enterprise(TM) Suite, Hummingbird Enterprise(TM) DM, Hummingbird Enterprise(TM)
RM, Hummingbird Enterprise(TM) Collaboration, Hummingbird Enterprise(TM)
Webtop, Hummingbird Enterprise(TM) IM, Hummingbird Enterprise(TM) Mobility,
Hummingbird Enterprise(TM) KM, Hummingbird Enterprise(TM) Workflow, Hummingbird
Enterprise(TM) Documents Hummingbird Enterprise(TM) for Solutions, Hummingbird
Enterprise(TM) for Contract Management, Hummingbird Enterprise(TM) for ESRI,
Hummingbird Enterprise(TM) in Industry, Hummingbird Enterprise(TM) in Legal,
Hummingbird Enterprise(TM) R/KYV, Hummingbird Enterprise(TM) Content
Integration, Hummingbird BI(TM), BI Server(TM), BI Analyze(TM), BI Web(TM), BI
Query(TM) , Hummingbird Genio(R), Hummingbird Metadata(TM), SearchBuilder(R),
SearchServer(R), DOCS Open(R), Hummingbird Content Drive(TM), Hummingbird Core
Services(TM), Imagebasic(R), Imagebasic for the Web(TM) , Tempest(TM) , Tempest
Storage Management Server(TM), Tempest Distributed Cache Server(TM),
Application Collaboration(R), e-Clip(R), me-Clip(R), Hummingbird
Connectivity(TM), Connectivity Kerberos(TM), Connectivity Secure Shell(TM),
Connectivity SecureTerm(TM), Connectivity SSL(TM), Exceed(R), Exceed
Connectivity Suite(TM), Exceed 3D(TM) , Exceed onDemand(R), Exceed
PowerSuite(TM), Exceed X Development Kit(TM), Exceed XDK(TM), Host Access
Services(TM), HostExplorer(R), Hummingbird Deployment Wizard(TM) , Hummingbird
Basic(TM), Hummingbird Connectivity(TM), Hummingbird e-Gateway(TM), Hummingbird
InetD(TM), Hummingbird FTP(TM), Hummingbird SOCKS Client(TM), NFS Maestro(TM),
NFS Maestro Client(TM), NFS Maestro Gateway(TM), NFS Maestro Server(TM), NFS
Maestro Solo(TM), Exceed onDemand Deployment Wizard(TM), Exceed onDemand Server
Manager(TM), Exceed onDemand Client(TM), Exceed onDemand Server(TM),
HostExplorer Web(TM), HostExplorer Print Services(TM), NFS Maestro Tuner(TM),
Hummingbird Proxy Server(TM), Hummingbird Deployment Packager(TM), Hummingbird
Certificate Manager(TM), TXP(TM) (Thin X Protocol), TXPM(TM) (Thin X Proxy
Manager), Xweb(R), LegalKEY(R), Enterprise Records Management(TM), Hummingbird
Enterprise for Legal(TM), Practice Support Solutions, LegalKEY(R), LegalKEY New
Business Intake(TM), LegalKEY Conflicts Management(TM), LegalKEY Critical Dates
Management(TM), LegalKEY Practice Support Services(TM), LegalKEY Records
Management(TM), Let The Information FlowTM, RedDot(R), DynaMents(TM), Powered
By RedDot(TM), XCMS(TM), RedDot Solutions Everyone Can Change the Web and
Design(TM), RedDot and Design(TM), RedDot Smartedit(TM)


                                    - 17 -
<PAGE>

3.1.8 Competition

The market for the Company's products is intensely competitive and
significantly affected by new product introductions and other market activities
of industry participants. The Company believes that the principal competitive
factors affecting the market include industry expertise, business solution
domain knowledge, product flexibility, product ease of use, product
functionality, solution and product architecture, solution price, product
quality, customer support capabilities, customer support options, sales force
training, sales force size, sales force experience and its overall reputation
in the marketplace.

Hummingbird competes in the Enterprise Content Management market putting it in
direct competition with FileNet, Interwoven, Open Text, Stellent, Vignette,
IBM, EMC, Microsoft and Oracle. Certain of these competitors have longer
operating histories, greater financial, technical, marketing and other
resources, greater name recognition and a larger installed base of customers
than the Company.

In the area of network connectivity, the Company has been a market leader in PC
X server market since 1993. The Company's principal competitors in the PC X
server market and other areas of network connectivity include the newly formed
AttachmateWRQ and NetManage, Inc.. To a lesser extent, the Company also
experiences competition from Tarantella Inc., Seagull Software, Esker, Starnet
Communications, SSH Communications Security and Microsoft Corporation.

The Company was an early entrant into the network connectivity market and has
developed strong brand name recognition. The Company has earned numerous
independent awards for technological strength and has completed many large
enterprise installations. The Company's various network connectivity products
are considered by industry analysts and technology reviewers to be leaders in
their markets.

The Company's assessment of its competitors' product and services offerings is
based on its knowledge of the software industry, as derived from market
intelligence, public announcements and demonstrations, trade shows and
publications, promotional and technical literature and industry analysts'
reports.

3.1.9 Employees

As of September 30, 2005, the Company had a total of 1,504 full time employees,
including 429 in research and development, 517 in sales and marketing, 354 in
customer support and professional services, and 204 in corporate support and
administration functions. None of the Company's employees are subject to a
collective bargaining agreement nor has the Company experienced any work
stoppages. The Company believes that its employee relations are good.

3.1.10 Facilities

The Company's headquarters are located in Toronto, Ontario, Canada and consists
of leased (approximately 54,600 square feet) and owned premises (approximately
85,000 square feet). Space for the Company's other offices is leased on varying
terms.

3.1.11 New Products

The following new products were launched during fiscal 2005

<TABLE>

--------------------------------------------------------------------------------------------------------------------
Hummingbird                          Legal             Hummingbird               Hummingbird
Enterprise(TM)                       Key               Integration Suite         Connectivity(TM)
--------------------------------------------------------------------------------------------------------------------
<CAPTION>

<S>                                <C>                 <C>                       <C>
Hummingbird Enterprise(TM) 2005    LegalKEY(R)         Hummingbird               Exceed onDemand 5.0
                                   Conflicts           Genio(R) 6.0
Consisted of the following         Management(TM)                                Hummingbird Connectivity 2006:
components:                        Version 4.0,
                                                                                 Exceed PowerSuite 2006
Hummingbird Enterprise(TM) 2005 DM                                               Exceed 2006
Hummingbird Enterprise(TM) 2005 RM                                               Exceed 3D 2006
                                                                                 Exceed XDK 2006

                                                                                 HostExplorer 2006

</TABLE>


                                    - 18 -
<PAGE>

<TABLE>

<S>                                <C>                 <C>                       <C>
Hummingbird Enterprise(TM) 2005                                                  NFS Maestro Solo 2006
Collaboration                                                                    NFS Maestro Client 2006
Hummingbird Enterprise(TM) 2005                                                  NFS Maestro Server 2006
Webtop                                                                           NFS Maestro Gateway 2006
Hummingbird Enterprise(TM) 2005 IM
Hummingbird Enterprise(TM) 2005                                                  Connectivity SSL 2006
Mobility                                                                         Connectivity Kerberos 2006
Hummingbird Enterprise(TM) 2005 KM                                               Connectivity Secure Shell 2006
Hummingbird Enterprise(TM) 2005                                                  Connectivity SecureTerm 2006
Workflow
Hummingbird Enterprise(TM) 2005                                                  Hummingbird FTP 2006
Content Integration                                                              Hummingbird InetD 2006
Hummingbird Enterprise(TM) 2005 -
Automated E-mail Management                                                      Exceed Connectivity Suite 2006
                                                                                 HostExplorer Connectivity Suite 2006

DOCS Open 4.0
---------------------------------- ---------------------------------------------------------------------------------------

</TABLE>


3.1.12 Other

The market for ECM products and solutions is in the process of splitting into
two distinct approaches to providing enterprise content management capabilities
to customers. Some vendors are moving toward an infrastructure vision of ECM.
They are enhancing their current products and creating new products with the
view that ECM capabilities should be part of the information technology
infrastructure, in the same way that databases are considered.

The other group of vendors, of which Hummingbird is part, are approaching the
market from the perspective of content and process based applications or
solutions, built upon the existing ECM product sets provided by each vendor.
These vendors believe that the most effective way of presenting ECM to
customers is by treating ECM as part of a solution that addresses a specific,
defined need within the business, such as Contract Management.

This split may have significant effect upon Hummingbird's product development
plans, marketing activities and sales capabilities.

In addition, it is expected that this division of ECM vendors will also
contribute to continued consolidation within the market and further mergers and
acquisitions by both groups of vendors. Hummingbird has acquired companies in
the past in order to more effectively compete in the marketplace and it is
expected that this activity will continue. It should also be noted that some of
Hummingbird's most significant competitors have been acquired by other
organizations.


3.2. Risk Factors

A discussion of the risks and uncertainties to which Hummingbird Ltd. is
subject, is presented under the heading "Outlooks, Risks and Uncertainties That
Could Affect Future Results", in the Company's Management's Discussion and
Analysis of Financial Condition and Results of Operations ("MD&A") for the year
ended September 30, 2005.


-------------------------------------------------------------------------------
4. DIVIDENDS
-------------------------------------------------------------------------------

The Company has not declared or paid any cash dividends on its common shares to
date. The Company's current policy is to retain earnings to finance the growth
and development of the business, and therefore the Company does not anticipate
paying cash dividends in the foreseeable future. Declaring and paying dividends
is a decision of the Board of Directors. The Company's dividend policy will be
reviewed from time to time, taking into


                                    - 19 -
<PAGE>

consideration the financial position of the Company, its cash utilization
strategy and other relevant factors. There are no restrictions that could
prevent the Company from paying dividends in the future.


-------------------------------------------------------------------------------
5. DESCRIPTION OF CAPITAL STRUCTURE
-------------------------------------------------------------------------------

The Company is authorized to issue an unlimited number of common shares without
nominal or par value of which 17,418,338 were issued and outstanding as of
September 30, 2005. The Company is also authorized to issue an unlimited number
of preference shares without nominal or par value issuable in series, however,
no such shares are currently outstanding.

Common Shares
-------------

Voting - Each common share entitles its holder to receive notice of and to
attend all general and special meetings of shareholders, other than meetings at
which only the holders of a particular class or series are entitled to vote.
Each holder of common shares is entitled to one vote in respect of each common
share held.

Dividends - The holders of common shares are entitled to receive, out of any or
all profits or surplus of the Company properly available for the payment of
dividends (after the payment of any dividend payable on the Company's
securities entitled to receive dividends in priority to the common shares), any
dividends as and when declared by the Board of Directors.

Dissolution - The holders of common shares are entitled to share ratably in any
distribution of the assets of the Company upon the liquidation, dissolution or
winding-up.

Preference Shares
-----------------

The preference shares are issuable in series. Subject to the Company's
articles, the Board of Directors is authorized to fix, before issuance, the
designation, rights, privileges, restrictions and conditions attaching to each
series. The preference shares will rank prior to the Common Shares with respect
to dividends and return of capital on dissolution. Except with respect to
matters as to which the holders of preference shares are entitled by law to
vote as a class, the holders of preference shares are not entitled to vote at
meetings of shareholders.


-------------------------------------------------------------------------------
6. MARKET FOR SECURITIES
-------------------------------------------------------------------------------

Trading Price and Volume

The Company's common shares are listed and posted for trading on the Toronto
Stock Exchange (ticker symbol "HUM") and the NASDAQ National Market System
(ticker symbol "HUMC").

The following table sets out the trading prices and volumes of the Company's
common shares on the Toronto Stock Exchange for the periods indicated:

<TABLE>
--------------------------------------------------------------------------------------------------------
          Month              Volume               High                 Low               Close
--------------------------------------------------------------------------------------------------------
<CAPTION>

<S>      <C>                 <C>                 <C>                 <C>                 <C>
October, 2004                448,400             $27.75              $25.60              $26.81
--------------------------------------------------------------------------------------------------------
November, 2004               489,900             $28.75              $25.65              $28.50
--------------------------------------------------------------------------------------------------------
December, 2004               473,200             $32.71              $27.41              $32.05
--------------------------------------------------------------------------------------------------------
January, 2005                396,100             $32.35              $28.15              $29.91
--------------------------------------------------------------------------------------------------------

</TABLE>


<TABLE>
<CAPTION>

<S>       <C>                <C>                 <C>                 <C>                 <C>
--------------------------------------------------------------------------------------------------------
February, 2005               398,300             $32.73              $29.85              $31.41
--------------------------------------------------------------------------------------------------------
March, 2005                  675,400             $31.50              $27.76              $28.53
--------------------------------------------------------------------------------------------------------
April, 2005                  566,700             $29.39              $25.60              $25.99
--------------------------------------------------------------------------------------------------------
May, 2005                    841,000             $26.60              $23.00              $26.60
--------------------------------------------------------------------------------------------------------
June, 2005                   496,100             $28.20              $25.70              $26.00
--------------------------------------------------------------------------------------------------------
July, 2005                   293,400             $26.98              $23.06              $23.10
--------------------------------------------------------------------------------------------------------
August, 2005                 478,600             $27.56              $20.51              $26.84
--------------------------------------------------------------------------------------------------------
September, 2005              308,400             $28.70              $24.80              $25.90
--------------------------------------------------------------------------------------------------------
</TABLE>

                                    - 20 -
<PAGE>

-------------------------------------------------------------------------------
7. ESCROWED SECURITIES
-------------------------------------------------------------------------------

To the Company's knowledge there are no securities of Hummingbird that are held
in escrow.


-------------------------------------------------------------------------------
8. DIRECTORS AND OFFICERS
-------------------------------------------------------------------------------

The following table sets forth information about the Company's directors and
their respective positions as of November 30, 2005. The term of office of each
director expires at the end of the annual meeting of shareholders to be held on
March 3, 2006.

<TABLE>
-----------------------------------------------------------------------------------------------------------------------
                                                Principal Occupation
Name and Address                                Date Elected Director

-----------------------------------------------------------------------------------------------------------------------
<CAPTION>

<S>                                             <C>
FRED EFIM SORKIN                                Chairman of the Board of the Company
     Toronto, Ontario, Canada                   September, 1984

-----------------------------------------------------------------------------------------------------------------------
ALAN BARRY LITWIN                               President and Chief Executive Officer of the Company
     Toronto, Ontario, Canada                   September, 1984

-----------------------------------------------------------------------------------------------------------------------
JOHN THOMAS McLENNAN                            Independent Director
     Mahone Bay, Nova Scotia, Canada            October, 1995

-----------------------------------------------------------------------------------------------------------------------
ANDREW JOSEPH MALIK                             Managing Director, Lehman Brothers Inc.
      New York, New York, U.S.A.                November, 1997

-----------------------------------------------------------------------------------------------------------------------
INDER PAL SINGH DUGGAL                          Chief Financial Officer, Secretary and Treasurer of the Company
      Richmond Hill, Ontario, Canada            May, 1999

-----------------------------------------------------------------------------------------------------------------------
MARK DAVID SPITZER                              Independent Director
      New York, New York, U.S.A.                November, 2000

-----------------------------------------------------------------------------------------------------------------------
STEPHEN ANDREW CRANE                            Independent Director
      New York, New York, U.S.A                 April 2004
-----------------------------------------------------------------------------------------------------------------------
JACK LANGER                                     Independent Director
      Old Tappan, New Jersey, U.S.A             April 2004
-----------------------------------------------------------------------------------------------------------------------

</TABLE>

Fred Efim Sorkin (3). Mr. Sorkin currently serves as the Company's Chairman, a
position he has held since 1984, when he co-founded the firm. Prior to this,
Mr. Sorkin served as the Company's Chairman and Chief Executive Officer from
1984 to December 2004. Mr. Sorkin came to Canada from Lithuania in 1976, where
he was a mainframe hardware and software scientist. He earned his Ph.D. in
Computer Science, as well as two Master degrees in mathematics and
electronics, from the state university in Lithuania. Following a three-year
association with Montreal-based Comterm, Mr. Sorkin joined Micom, a subsidiary
of Phillips, N.V. in 1979, where he specialized in electronics product
development as head of research and development. In 1981, Mr. Sorkin founded
Execunet, based in Ottawa, which was later acquired by Mitel Corporation and
became Vice President and General Manager of Mitel's office products division.
After leaving Mitel in 1984, Mr. Sorkin was a partner in Helix Investments
Limited, a venture capital/closed-end fund, and later that year founded
Hummingbird.

Alan Barry Litwin. President, Chief Executive Officer and co-founder of
Hummingbird Ltd., Mr. Litwin has provided leadership as the chief technology
architect at Hummingbird since its founding in September 1984, and as Executive
Vice President from 1988 until his appointment as President in 1999. Mr. Litwin
currently serves as the Company's President and Chief Executive Officer, a
position he has held since December 2004. Mr. Litwin has been a member of the
Company's board of directors since 1984. Mr. Litwin began his career in 1974
with Comterm where he specialized in the development of advanced compilers. In
1976, he joined Montreal-based Nexsys where he focused on microcomputer
software. In 1979, Mr. Litwin moved to Phillips/Micom, and then from 1981
to 1982,

                                    - 21 -
<PAGE>

he served as Vice President of Execunet. From 1982 to 1984, Mr. Litwin was
Assistant to the Executive Vice President of Mitel's Corporation's Office
Product Division. Mr. Litwin holds a master's degree in Computer Science from
McGill University in Montreal.

John Thomas McLennan (2). Mr. McLennan has been a member of the Company's board
of directors since 1995. Mr. McLennan was Vice Chairman and Chief Executive
Officer of Allstream Inc. (formerly AT&T Canada) from May 2000 until June 2004.
Prior to his appointment at AT&T Canada, Mr. McLennan was President and founder
of Jenmark Consulting, a management consulting firm specializing in the
telecommunications and technology sectors. From 1994 to 1997 Mr. McLennan was
President and Chief Executive Officer of Bell Canada, and President of Bell
Ontario from 1993 to 1994. Mr. McLennan is also a member of the Board of
Directors of Air Canada, Manitoba Telecom Services, Platform Computing, Amdocs
Limited, Medisys Health Group and Canada Health Infoway. Mr. McLennan is
Chancellor of the University College of Cape Breton.

Andrew Joseph Malik (3). Mr. Malik has been a member of the Company's board of
directors since 1997. He currently serves as the board's Lead Director. Mr.
Malik is a Managing Director and has been with Lehman Brothers for over
eighteen years. He has held positions in capital markets and investment banking
and is currently head of the Banking Development Group. Prior to joining Lehman
Brothers, Mr. Malik was a partner of LF Rothschild, Unterberg, Towbin for
sixteen years. Over the last quarter century he has aided several hundred
technology and emerging growth companies in going public, and has effected over
one thousand equity, debt and M&A transactions. He sits on the board of
advisors for TripleHop Technologies, and holds other directorship positions.

Inder Pal Singh Duggal. Mr. Duggal currently serves as the Company's Chief
Financial Officer, Secretary and Treasurer, a position he has held since
December 1, 2004. Prior to this, Mr. Duggal served as the Company's Chief
Financial Officer and Chief Controller, a position he had held since 1993. He
has been a member of the Company's board of directors since 1999. After
completing his Chartered Accountancy designation in India, Mr. Duggal joined
Tata Robins Fraser Ltd., a company that belongs to Tata Group, one of the
largest private sector entities in India. In 1981 he joined Union de Banques
Arabes et Francabees ("UBAF"), a subsidiary of Credit Lyonnais, France. Mr.
Duggal came to the United States and completed the Certified Public Accountants
examination in 1987. When Mr. Duggal left UBAF in 1990, he was the Senior
Manager, Credit and Marketing at a branch responsible for international
banking, finance and operations. After coming to Canada in 1990, Mr. Duggal
worked for a Canadian chartered bank in the Finance and Control Division for
fifteen months before joining Hummingbird in 1992.

Mark David Spitzer (1). Mr. Spitzer has been a member of the Company's board of
directors since 2000. Mr. Spitzer co-founded International Telecommunication
Data Systems, Inc. (ITDS) in 1989 and served as its Chief Financial Officer for
eight years. ITDS provided comprehensive transactional billing, customer care,
and management information solutions to providers of wireless
telecommunications services, and was acquired by Amdocs in November 1999. Mr.
Spitzer also served on the Entrepreneurial Advisory Board at the Wharton School
of Business at the University of Pennsylvania focusing on development of new
curriculum, business plan competitions, and the access to venture capital and
angel networks for students.

Stephen Andrew Crane(1) (2) (3). Mr. Crane was appointed to the Company's
board of directors in April, 2004. Mr. Crane currently serves on the Board and
Audit Committee of First Security Benefit Life Insurance & Annuity Company.
Mr. Crane was Chairman of the Board, President and Chief Executive Officer of
AlphaStar Insurance Group Limited from 1999 through 2004. Prior to joining
AlphaStar, Mr. Crane was President and Chief Executive Officer of Gryphon
Holdings Inc. from 1993 until 1999. From 1989 until 1993, Mr. Crane was
President and Chief Executive Officer of G. L. Hodson & Son, Inc. From 1982
until 1989, Mr. Crane was Chief Financial Officer of Corroon & Black
Corporation. From 1976 until 1982, Mr. Crane was a financial officer of Orion
Capital Corporation, and its Chief Financial Officer from 1980 until 1982. Mr.
Crane holds an A.B. degree from Princeton University and an M.B.A. degree in
Finance from the Harvard Graduate School of Business.

Jack Langer (1) (2). Mr. Langer was appointed to the Company's board of
directors in April, 2004. Mr. Langer was Managing Director, Global Co-Head
Media Group and Member of the Investment Banking Business Development Committee
at Lehman Brothers Inc. from 1997 to 2002. Mr. Langer also served in a senior
executive capacity as an investment banker with Bankers Trust & Company, Kidder
Peabody & Company Inc., Drexel, Burnham Lambert & Co. and E.F. Hutton &
Company, Inc. Over his 27 year career in investment banking Mr. Langer has
worked on equity, bank, subordinated debt and merger and acquisition
transactions totaling over $15 billion in the cable, broadcasting, DBS,
entertainment, movie theater and other media industries. Mr. Langer is also a
member of the Board of CKX, Inc., SBA Communications Corp., and Atlantic
Broadband Group. Mr. Langer holds a B.A. degree in

                                    - 22 -
<PAGE>

economics from Yale College and an M.B.A. degree in Finance from the Harvard
Graduate School of Business. Mr. Langer is Associate Fellow at Yale
University.

(1) Member of the Audit Committee
(2) Member of the Compensation Committee
(3) Member of the Corporate Governance Committee


The following table sets forth information about the Company's executive
officers and their respective positions as of November 30, 2005:

<TABLE>
-------------------------------------------------- -----------------------------------------------------------
Name and Address                                   Position and Principal Occupation

-------------------------------------------------- -----------------------------------------------------------
<CAPTION>

<S>                                                <C>
ALAN BARRY LITWIN                                  President & Chief Executive Officer
    Toronto, Ontario, Canada
-------------------------------------------------- -----------------------------------------------------------

INDER PAL SINGH DUGGAL                             Chief Financial Officer, Secretary & Treasurer
    Richmond Hill, Ontario, Canada
-------------------------------------------------- -----------------------------------------------------------

ANDREW GEORGE PERY                                 Chief Marketing Officer & Senior Vice President, Marketing
    Ottawa, Ontario, Canada
-------------------------------------------------- -----------------------------------------------------------

JULIUS DENIS da COSTA                              Senior Vice President, Sales
    Mississauga, Ontario, Canada
-------------------------------------------------- -----------------------------------------------------------

ANTHONY GEORGE HEYWOOD                             Senior Vice President, EMEA
    London, United Kingdom
-------------------------------------------------- -----------------------------------------------------------

EUGENE CHERNY                                      Vice President
    King City, Ontario, Canada
-------------------------------------------------- -----------------------------------------------------------

RODNEY DESMEULES                                   Vice President
    Hungerford, Berkshire, United Kingdom
-------------------------------------------------- -----------------------------------------------------------

ELIAS DIAMANTOPOLOUS                               Vice President
    Ottawa, Ontario, Canada
-------------------------------------------------- -----------------------------------------------------------

GIOVANNI EVANGELISTI                               Vice President
    Paris, France
-------------------------------------------------- -----------------------------------------------------------

MARK FAGAN                                         Vice President
    Buckinghamshire, United Kingdom
-------------------------------------------------- -----------------------------------------------------------

JEFFREY EDWARD FLANAGAN                            Chief Controller
    Toronto, Ontario, Canada
-------------------------------------------------- -----------------------------------------------------------

YURI FRAYMAN                                       Vice President
    Sunny Isles, Florida, U.S.A.
-------------------------------------------------- -----------------------------------------------------------

</TABLE>

<TABLE>
<CAPTION>

<S>                                               <C>
LEO HEFFERNAN                                      Vice President
    Fenwick, Ontario, Canada
-------------------------------------------------- -----------------------------------------------------------

ALP HUG                                            Vice President
    Thornhill, Ontario, Canada
-------------------------------------------------- -----------------------------------------------------------

HEATHER PERCY                                      Vice President
   Toronto, Ontario, Canada
-------------------------------------------------- -----------------------------------------------------------
</TABLE>

                                    - 23 -
<PAGE>

<TABLE>
<CAPTION>

<S>                                               <C>
LARRY RUDOLF                                       Vice President
    Thornhill, Ontario, Canada
-------------------------------------------------- -----------------------------------------------------------

JOHN WAGER                                         Vice President
    Toronto, Ontario, Canada
-------------------------------------------------- -----------------------------------------------------------

MICHAEL WAYLING                                    Vice President
    Toronto, Ontario, Canada
-------------------------------------------------- -----------------------------------------------------------
</TABLE>


Each of the officers of the Company has been employed at his or her principal
occupation as indicated above, or in other positions with the Company, for the
last five years, except as follows: Andrew Pery held a similar position at Open
Text Corporation, a company operating in the software industry. Anthony Heywood
held a similar position with Xchange, Inc., a customer relationship management
company. Jeffrey Flanagan held similar positions at Compaq Canada and
Hewlett-Packard Canada. Mark Fagan was the Chief Operating Manager for
Marketplace Relationship Management Limited. Yuri Frayman was founder of
LegalKEY, a company acquired by Hummingbird in 2003. Leo Heffernan held similar
senior management roles at both Sobey's Capital Inc. and Canadian Tire
Financial Services. John Wager held a similar position at PeopleSoft.

As a group, directors and senior officers own, directly or indirectly, or
exercise control or direction over approximately 2.1 million (12.3% of the
total outstanding) common shares of the Company, as at September 30, 2005. The
information as to shares owned indirectly or over which control or direction is
exercised by the directors and officers, but which are not registered in their
names, not being within the knowledge of the Company, has been furnished by
such directors and officers.


-------------------------------------------------------------------------------
9. PROMOTERS
-------------------------------------------------------------------------------

No person or Company has acted as a promoter for Hummingbird at any time during
the Company's last three financial years or during the current financial year.


-------------------------------------------------------------------------------
10. LEGAL PROCEEDINGS
-------------------------------------------------------------------------------

The Company is subject to legal proceedings relating to a small number of
employees that were discharged in the fiscal year as part of a restructuring,
and who are disputing their severance package. The Company has accrued amounts
related to these disputes that it considers appropriate. However, the amount
ultimately paid may be higher or lower, depending on the outcome of the
proceedings. Except for the foregoing, the Company is not currently subject to
any material legal proceedings. However, it may from time to time become a
party to various legal proceedings arising in the ordinary course of business.


-------------------------------------------------------------------------------
11. INTEREST OF MANAGEMENT AND OTHERS IN MATERIAL TRANSACTIONS
-------------------------------------------------------------------------------

No director or officer of the Company, at any time during the Company's last
three financial years, nor any associate or affiliate of any of the foregoing,
has had any material interest, directly or indirectly, in a transaction that
has materially affected or will materially affect the Company.


-------------------------------------------------------------------------------
12. TRANSFER AGENTS AND REGISTRARS
-------------------------------------------------------------------------------

The transfer agent and registrar for the Company's common shares is CIBC Mellon
Trust Company, P.O. Box 7010 Adelaide Street Postal Station Toronto, Ontario
Canada M5C 2W9.

                                    - 24 -
<PAGE>


-------------------------------------------------------------------------------
13. MATERIAL CONTRACTS
-------------------------------------------------------------------------------

There were no material contracts other than those entered into in the ordinary
course of business during the past three fiscal years ended September 30, 2005
that require disclosure.


-------------------------------------------------------------------------------
14. INTERESTS OF EXPERTS
-------------------------------------------------------------------------------

The Company's auditors are Deloitte & Touche LLP, Chartered Accountants, 5140
Yonge Street, Suite 1700, Toronto, Ontario, Canada M2N 6L7. The Company's
consolidated financial statements as at September 30, 2005 and for the year
then ended have been filed under National Instrument 51-102 in reliance on the
report of Deloitte & Touche LLP, independent chartered accountants, given on
their authority as experts in auditing and accounting. As at September 30,
2005, the partners and employees of Deloitte & Touche LLP collectively owned
beneficially, directly or indirectly less than 1% of the Company's outstanding
shares.


-------------------------------------------------------------------------------
15. AUDIT COMMITTEE
-------------------------------------------------------------------------------

Audit Committee's Charter
-------------------------

The text of the Audit Committee's Charter, as approved by the Board of
Directors, is attached to this Annual Information Form as Appendix A.

Composition of the Audit Committee
----------------------------------

The members of Hummingbird's Audit Committee are Mark D. Spitzer (Chairman),
Stephen A. Crane and Jack Langer. All members of the Audit Committee are
"independent" and "financially literate," each as defined in Multilateral
Instrument 52-110.

Stephen A. Crane. Mr. Crane is considered an "audit committee financial expert"
within the meaning of applicable SEC and OSC rules. Mr. Crane currently serves
on the Board and Audit Committee of First Security Benefit Life Insurance &
Annuity Company. Mr. Crane was Chairman of the Board, President, and Chief
Executive Officer of AlphaStar Insurance Group Limited from 1999 through 2004.
Prior to joining AlphaStar, Mr. Crane was President and Chief Executive Officer
of Gryphon Holdings Inc. from 1993 until 1999. From 1989 until 1993, Mr. Crane
was President and Chief Executive Officer of G. L. Hodson & Son, Inc. From 1982
until 1989, Mr. Crane was Chief Financial Officer of Corroon & Black
Corporation. From 1976 until 1982, Mr. Crane was a financial officer of Orion
Capital Corporation, and its Chief Financial Officer from 1980 until 1982. Mr.
Crane holds an A.B. degree from Princeton University and an M.B.A. degree in
Finance from the Harvard Graduate School of Business.

Mark D. Spitzer. Mr. Spitzer is considered an "audit committee financial
expert" within the meaning of applicable SEC and OSC rules. Mr. Spitzer
co-founded International Telecommunication Data Systems, Inc. (ITDS) in 1989
and served as its Chief Financial Officer for eight years. ITDS provided
comprehensive transactional billing, customer care, and management information
solutions to providers of wireless telecommunications services, and was
acquired by Amdocs in November 1999. Mr. Spitzer also served on the
Entrepreneurial Advisory Board at the Wharton School of Business at the
University of Pennsylvania focusing on development of new curriculum, business
plan competitions, and the access to venture capital and angel networks for
students.

Jack Langer. Mr. Langer was appointed to the Company's board of directors in
April, 2004. Mr. Langer was Managing Director, Global Co-Head Media Group and
Member of the Investment Banking Business Development Committee at Lehman
Brothers Inc. from 1997 to 2002. Mr. Langer also served in a senior executive
capacity as an investment banker with Bankers Trust & Company, Kidder Peabody
& Company Inc., Drexel, Burnham Lambert & Co. and E.F. Hutton & Company, Inc.
Over his 27 year career in investment banking Mr. Langer has worked on equity,
bank, subordinated debt and merger and acquisition transactions totaling over
$15 billion in the cable, broadcasting, DBS, entertainment, movie theater and
other media industries. Mr. Langer is also a member of the Board of CKX, Inc.,
SBA Communications Corp., and Atlantic Broadband Group. Mr. Langer holds a
B.A. degree in economics from Yale College and an M.B.A. degree in Finance
from the Harvard Graduate School of Business. Mr. Langer is Associate Fellow
at Yale University.


                                    - 25 -
<PAGE>

Pre-Approval Policies and Procedures
------------------------------------

The Audit Committee has adopted specific policies and procedures for the
engagement of non-audit services to be provided by the independent auditor. The
Committee may approve policies and procedures for the pre-approval of services
to be rendered by the independent auditor, which policies and procedures are
detailed as to the particular service. All non-audit services to be provided to
the Company or any of its affiliates by the independent auditor or any of its
affiliates which are not covered by pre-approval policies and procedures
approved by the Committee shall be subject to pre-approval by the Committee.

Audit Fees
----------

The aggregate fees billed in respect of each of the last two fiscal years for
professional services rendered by Deloitte & Touche LLP, are as follows (in
thousands of U.S. dollars):

                           Fiscal Year Ended              Fiscal Year Ended
                           September 30, 2005             September 30, 2004
                           ------------------             ------------------

Audit Fees(1)                 $ 722.3                           $ 614.3
Audit-Related Fees(2)         $ 346.1                           $ 172.8
Tax Fees(3)                   $ 734.7                           $ 521.2
All Other Fees(4)             $   -                             $   -


(1) "Audit Fees" consist of the aggregate fees billed by Deloitte & Touche LLP
(the "Outside Auditors"), the Registrant's principal accountant, for
professional services rendered by it for the audit of the Registrant's annual
financial statements or services that are normally provided by the Outside
Auditors in connection with statutory and regulatory filings or engagements.

(2) "Audit-Related Fees" consist of the aggregate fees billed by the Outside
Auditors for assurance and related services rendered by it that are reasonably
related to the performance of the audit or review of the Registrant's financial
statements and are not reported as audit fees. Professional services provided
included review of the Registrant's quarterly financial statements and
accounting advice on certain matters.

(3) "Tax Fees" consist of the aggregate fees billed by the Outside Auditors for
professional services rendered by it for tax compliance, tax advice and tax
planning. Tax services provided included tax advisory services and review and
filing of the Registrant's annual income tax returns.

(4) "All Other Fees" consist of fees billed by the Outside Auditors for
products and services other than Audit Fees, Audit-Related Fees and Tax Fees.
No fees were billed by the Outside Auditors for the fiscal years ended
September 30, 2005 and 2004, respectively, for products and services provided
by it, other than the services reported in the preceding three paragraphs.


-------------------------------------------------------------------------------
16. ADDITIONAL INFORMATION
-------------------------------------------------------------------------------

Additional information pertaining to Hummingbird Ltd. can be found on SEDAR at
www.sedar.com.

Additional information, including directors' and officers' remuneration and
indebtedness, principal holders of the Company's securities, options to
purchase securities and interests of insiders and material transactions, where
applicable, is contained in the Company's Management Proxy Circular for the
2005 Annual Meeting of Shareholders of the Company to be filed subsequent to
this Annual Information Form.


Additional financial information is provided in the Company's comparative
FY2005 financial statements and MD&A. At any time the securities of the Company
are in the course of a distribution under a preliminary short form prospectus
or a short form prospectus, the Secretary of the Company at 1 Sparks Avenue,
Toronto, Ontario, M2H 2W1, will provide any person, upon request, with a copy
of: (i) this Annual Information Form, together with a copy of any document, or
the pertinent pages of any document, incorporated by reference herein; (ii) the
Company's most

                                    - 26 -
<PAGE>


recent Annual Report containing the audited consolidated financial statements
of the Company for the most recently completed fiscal year together with the
accompanying report of the auditor; (iii) any interim financial statements of
the Company subsequent to the audited consolidated financial statements for
the most recently completed fiscal year; (iv) the Management Proxy Circular
for the most recent annual meeting of shareholders involving the election of
directors; and (v) any other document incorporated by reference into the
preliminary short form prospectus or the (final) short form prospectus filed
in connection with such distribution of securities. At any other time, the
Secretary of the Company will provide any other document referred to in items
(i), (ii) and (iii) above.

RIGHT OF FIRST REFUSAL

Pursuant to an agreement dated April 2, 1992, as amended, between Mr. Litwin
and Mr. Sorkin, each of Mr. Litwin and Mr. Sorkin has granted the other a right
of first refusal with respect to any Common Shares he owns.



                                    - 27 -
<PAGE>


-------------------------------------------------------------------------------
                                                                     APPENDIX A
-------------------------------------------------------------------------------

                     CHARTER OF THE AUDIT COMMITTEE OF THE
                     BOARD OF DIRECTORS OF HUMMINGBIRD LTD.
                            AS ADOPTED BY THE BOARD
                              ON DECEMBER 4, 2003
___________________________________________________________________

I.   AUTHORITY

The Audit Committee (the "Committee") of the Board of Directors (the "Board")
of Hummingbird Ltd. (the "Corporation") is established pursuant to Section 171
of the Canada Business Corporations Act. The Committee shall be comprised of
three or more directors, as determined from time to time by resolution of the
Board. Consistent with the appointment of other Board committees, the members
of the Committee shall be elected by the Board at the annual organizational
meeting of the Board or at such other time as may be determined by the Board.
The Chairman of the Committee shall be designated by the Board, provided that
if the Board does not so designate a Chairman, the members of the Committee, by
majority vote, may designate a Chairman. The presence in person or by telephone
of a majority of the Committee's members shall constitute a quorum for any
meeting of the Committee. All actions of the Committee will require the vote of
a majority of its members present at a meeting of the Committee at which a
quorum is present.

II.  PURPOSE OF THE COMMITTEE

The Committee's purpose is to provide assistance to the Board in fulfilling its
legal and fiduciary obligations with respect to matters involving the
accounting, auditing, financial reporting, internal control and legal
compliance functions of the Corporation and its subsidiaries.

The Committee is directly responsible for the appointment (subject to
shareholder approval), compensation, retention and oversight of the work of the
Corporation's independent auditor engaged for the purpose of preparing or
issuing an audit report or related work or performing other audit, review or
attest services for the Corporation. In accordance with the requirements of the
Sarbanes-Oxley Act of 2002 (the "SOA"), the Securities Exchange Act of 1934
(the "Exchange Act") and the rules promulgated thereunder by the Securities and
Exchange Commission (the "SEC"), the rules of the National Association of
Securities Dealers, Inc. (the "NASD"), the rules of the Toronto Stock Exchange
(the "TSX") and the rules and instruments promulgated by the Ontario Securities
Commission (the "OSC"), the independent auditor must report directly to the
Committee and is accountable to the Committee (as representatives of the
shareholders of the Corporation). The Committee's oversight responsibilities
include the authority to approve all audit engagement fees and terms, as well
as all permitted non-audit engagements and resolution of disagreements between
management and the independent auditor regarding financial reporting.

It is the objective of the Committee to maintain free and open means of
communications among the Board, the independent auditor, and the financial and
senior management of the Corporation.

III. COMPOSITION OF THE COMMITTEE

Independence

Each member of the Committee shall be an "independent" director within the
meaning of Section 10A(m)(3) of the Exchange Act, Rule 10A-3(b)(1) thereunder,
and Rule 4200(a)(15) of the NASD, and an "unrelated" director within the
meaning of section 472 of the TSX Listed Company Manual, subject to applicable
exceptions.


                                    - 28 -
<PAGE>


Financial Literacy and Expertise

All members of the Committee must be able to read and understand fundamental
financial statements, including a company's balance sheet, income statement and
cash flow statement. At least one member of the Committee shall be an "audit
committee financial expert" within the meaning of applicable SEC and OSC rules
and at least one member shall have accounting or related financial experience
as required under applicable TSX and NASD rules. Specifically, the audit
committee financial expert and the member with accounting or related financial
experience must have the following attributes:

     (a)  An understanding and ability to analyze and interpret a full set of
          financial statements, including the notes attached thereto, prepared
          in accordance with the generally accepted accounting principles used
          to prepare those statements;

     (b)  An ability to assess the general application of generally accepted
          accounting principles in connection with the accounting for
          estimates, accruals and reserves;

     (c)  Experience preparing, auditing, analyzing or evaluating financial
          statements that present a breadth and level of complexity of
          accounting issues that are generally comparable to the breadth and
          complexity of issues that can reasonably be expected to be raised by
          the registrant's financial statements, or experience actively
          supervising one or more persons engaged in such activities;

     (d)  An understanding of internal controls and procedures for financial
          reporting ; and

     (e)  An understanding of audit committee functions.

The Committee shall ensure that the Corporation provides to applicable
regulatory authorities any required certification relating to adequacy of this
Charter and composition of the Committee.

IV.  DUTIES AND RESPONSIBILITIES OF THE COMMITTEE

In carrying out its duties and responsibilities, the Committee's policies and
procedures should remain flexible, so that it may be in a position to best
react or respond to changing circumstances or conditions. While there is no
"blueprint" to be followed by the Committee in carrying out its duties and
responsibilities, the following should be considered within the authority of
the Committee (it being understood that the Committee may diverge from such
matters as considered appropriate given the circumstances):

Selection and Evaluation of Auditors

     (a)  Select the firm of independent public accountants to audit the books
          and accounts of the Corporation and its subsidiaries for each fiscal
          year;

     (b)  Annually Review and approve the terms of engagement and determine the
          remuneration of Corporation's independent auditor; and

     (c)  Review the performance of the Corporation's independent auditor and
          replace or terminate the independent auditor when circumstances
          warrant.

Independence of Auditors

     (a)  Ensure that the Corporation's independent auditor is independent and
          capable of exercising impartial judgment on all issues encompassed
          within it's engagement. Regard shall be had to all applicable rules
          and regulations relating to independence, including those with
          respect to financial relationships, employment relationships,
          business relationships, the provision of non-audit services,
          contingent fees, partner rotation and compensation.

     (b)  Ensure that the independent auditor delivers to the Committee on a
          periodic basis a formal written statement delineating all
          relationships between the independent auditor and the Corporation,
          consistent with Independence Standards Board Standard 1;

     (c)  Actively engage in a dialogue with the independent auditor with
          respect to any disclosed relationships or services that may impact
          the objectivity and independence of the independent auditor; and

     (d)  Take appropriate action to satisfy itself of the auditor's
          independence.


                                    - 29 -
<PAGE>

General Responsibility for Oversight of Auditors

     (a)  The Corporation's independent auditor shall be ultimately accountable
          to the Committee and the Committee shall be responsible for the
          appointment (subject to shareholder approval), compensation,
          retention and oversight of the work of the Corporation's independent
          auditor;

     (b)  Pre-approve all audit and permitted non-audit services to be provided
          by the independent auditor. The Committee may approve policies and
          procedures for the pre-approval of services to be rendered by the
          independent auditor, which policies and procedures are detailed as to
          the particular service. All non-audit services to be provided to the
          Corporation or any of its affiliates by the independent auditor or
          any of its affiliates which are not covered by pre-approval policies
          and procedures approved by the Committee shall be subject to
          pre-approval by the Committee; and

     (c)  Resolve all disagreements between management and the independent
          auditor regarding financial reporting.

Oversight of Annual Audit and Quarterly Financial Statements

     (d)  Review and approve the annual audit plan of the Corporation's
          independent auditor, including the audit and non-audit services that
          the auditor is providing for the Corporation and its subsidiaries,
          the level of responsibility assumed by the auditor under generally
          accepted auditing standards and a summary of the audit approach;

     (e)  Before the release of annual financial statements, discuss with the
          independent auditor all matters required by SAS 61 (including the
          independent auditor's responsibility under GAAP, the selection of and
          changes in significant accounting policies or their application,
          management judgments and accounting estimates, significant audit
          adjustments, the independent auditor's responsibility for information
          other than financial statements, disagreements with management,
          consultation with other accountants, and difficulties encountered in
          performing the audit) and CICA Handbook section 5751 (which governs
          the communications between the external auditors and the Committee);

     (f)  Receive a report from the Corporation's independent auditor, prior to
          the filing of the audit report with the SEC or the OSC, regarding:

          (i)  all critical accounting policies and practices used by the
               Corporation;

          (ii) all material alternative accounting treatments of financial
               information within Canadian GAAP that have been discussed with
               management, including the ramifications of the use of such
               alternative treatments, and the treatment preferred by the
               independent auditor; and

         (iii) other material written communications between the independent
               auditor and management;

     (g)  Review and discuss with management the quarterly financial
          statements. Discuss with the independent auditor the results of its
          procedures on the statements.

     (h)  Prior to any disclosure, review and recommend for approval:

          (i)  the annual financial statements and related documents (MD&A,
               AIF, etc.);

          (ii) the quarterly financial reports and related documents (including
               MD&A); and

         (iii) other disclosure documents containing financial information
               that would likely be material to either the quarterly or annual
               financial statements.


                                    - 30 -
<PAGE>

Oversight and Monitoring of Other Financial Disclosures

     (i)  Review and recommend to the Board for approval all financial
          information of the Corporation contained in any prospectus, annual
          information form, information circular or similar document of the
          Corporation, and any earnings press release to be issued in
          conjunction with the annual results;

     (j)  Annually or more frequently as required, discuss with management the
          types of financial and operational information and earnings guidance
          to be disclosed to credit rating agencies that are subject to
          confidentiality agreements. The Committee need not discuss in advance
          with management each instance in which the Corporation gives earnings
          guidance to credit rating agencies, unless the substance of a
          presentation to any credit rating agency constitutes a material shift
          in Corporation strategy not previously approved by the Board;

     (k)  Annually or more frequently as required, discuss with management the
          types of financial and operational information and earnings guidance
          to be disclosed to analysts or shareholders (in groups or one-on-one)
          and the processes for ensuring that new material information is first
          or simultaneously disseminated in the public domain and subsequently
          included on the Corporation's website. The Committee need not discuss
          in advance with management each instance in which the Corporation
          gives earnings guidance to analysts, unless the substance of a
          presentation to any analyst constitutes a material shift in
          Corporation strategy not previously approved by the Board; and

     (l)  Review the public disclosure required in connection with the
          Committee's pre-approval of audit and non-audit services provided by
          the independent auditor.


Oversight of Financial Reporting Processes and Internal Controls

     (m)  Review with management and the independent auditor the adequacy and
          effectiveness of the Corporation's accounting and internal control
          policies and procedures, including controls and security of the
          computerized information systems.

     (n)  Review with management its compliance with prescribed policies,
          procedures and internal control;

     (o)  Review with management and the independent auditor any reportable
          conditions and material weaknesses affecting internal control;

     (p)  Establish and maintain free and open means of communication between
          and among the Board, the Committee, the Corporation's independent
          auditor and the Corporation's management; and

     (q)  Review with management major financial and asset related risks and
          the steps taken to monitor and control such risks.

Other Matters

     (r)  Meet with the general counsel, and outside counsel when appropriate,
          to review legal and regulatory matters, including any matters that
          may have a material impact on the financial statements of the
          Corporation;

     (s)  Establish procedures for the receipt, retention and treatment of
          complaints received by the Corporation regarding accounting, internal
          controls or auditing matters and the confidential, anonymous
          submission by employees of the Corporation of concerns regarding
          questionable accounting or auditing matters;

     (t)  Review and approve all related party transactions with any director
          or nominee, executive officer, holder of more than 5% of any class of
          the Corporations voting securities or any family member of the
          foregoing persons, other than those related party transactions in
          respect of which the board has delegated review to a special
          committee of independent directors.

     (u)  Conduct or authorize investigations into any matters within the
          Committee's scope of responsibilities, including retaining outside
          counsel or other consultants or experts for this purpose; and

     (v)  Perform such additional activities, and consider such other matters,
          within the scope of its responsibilities, as the Committee or the
          Board deems necessary or appropriate.


                                    - 31 -
<PAGE>

With respect to the duties and responsibilities listed above, the Committee
should:

     (w)  Report regularly to the Board on its activities, as appropriate;

     (x)  Exercise reasonable diligence in gathering and considering all
          material information;

     (y)  Understand and weigh alternative courses of conduct that may be
          available;

     (z)  Focus on weighing the benefit versus harm to the Corporation and its
          shareholders when considering alternative recommendations or courses
          of action;

     (aa) If the Committee deems it appropriate, secure independent expert
          advice and understand the expert's findings and the basis for such
          findings, including retaining independent counsel, accountants or
          others to assist the Committee in fulfilling its duties and
          responsibilities;

     (bb) Provide management and the Corporation's independent auditor with
          appropriate opportunities to meet privately with the Committee; and

     (cc) Review the Charter of the Audit Committee annually.


V.   MEETINGS OF THE COMMITTEE

The Committee shall meet with such frequency and at such intervals as it shall
determine is necessary to carry out its duties and responsibilities. As part of
its purpose to foster open communications, the Committee shall meet at least
annually with management and the Corporation's independent auditor in separate
executive sessions to discuss any matters that the Committee or each of these
groups or persons believe should be discussed privately. The Chairman should
work with the Chief Financial Officer and management to establish the agendas
for Committee meetings. The Committee, in its discretion, may ask members of
management or others to attend its meetings (or portions thereof) and to
provide pertinent information as necessary. The Committee shall maintain
minutes of its meetings and records relating to those meetings and the
Committee's activities and provide copies of such minutes to the Board.

VI.  ADVISORS AND FUNDING

The Committee shall have the authority to engage independent counsel and other
advisors as it determines necessary to carry out its duties. The Corporation
shall provide for appropriate funding, as determined by the Committee, for
payment of any compensation (i) to any independent auditor engaged for the
purpose of rendering or issuing an audit report or related work or performing
other audit, review or attest services for the Corporation, and (ii) to any
independent advisors employed by the Committee.

VII. DISCLOSURE AND REVIEW OF CHARTER

The charter shall be (1) published in the Corporation's annual report or
information circular once every three years or following a material amendment
to it; or (2) be posted in an up-to-date format on the Corporation's web site.
The Committee should review and reassess annually the adequacy of this Charter
as required by the applicable rules of NASDAQ or the TSX.

While the Committee has the duties and responsibilities set forth in this
charter, the Committee is not responsible for planning or conducting the audit
or for determining whether the Corporation's financial statements are complete
and accurate and are in accordance with generally accepted accounting
principles. Management has the responsibility for preparing the financial
statements and implementing internal controls and the independent auditor has
the responsibility of auditing the financial statements. Similarly, it is not
the responsibility of the Committee to resolve disagreements, if any, between
management and the independent auditor or to ensure that the Corporation
complies with all laws and regulations.


                                   - 32 -
<PAGE>


-------------------------------------------------------------------------------
                                                                     APPENDIX B
-------------------------------------------------------------------------------

GLOSSARY OF TECHNICAL TERMS

Client is a software program that is used to contact and obtain data from a
server software program on another computer, often across a distance. Each
client program is designed to work with one or more specific kinds of server
programs, and each server requires a specific kind of client.

Computer server (or application server) is a computer on a network running
applications, which can be accessed by other nodes or computers, on the
network.

Data Analysis includes data warehousing, data mining, and on-line analytical
processing (OLAP).

Data Mart is a database, or collection of databases, designed to help managers
make strategic business decisions. Data marts are usually smaller and more
focused than data warehouses (enterprise wide).

Data Mining is the automatic discovery and analysis of data trends and
patterns.

ECM is an integrated suite of content-focused modules that provide document
management, document imaging, records management, web content management,
document-centric team collaboration, and content workflow. ECM enables
organizations to facilitate the control and management of business content
offering organizations a true framework to deploy content-driven industry and
process-specific solutions that mitigate risk, reduce costs, and generate
business advantage.

FTP (File Transfer Protocol) is a very common method of moving files between
two Internet sites. FTP is a special way to login to another Internet site for
the purposes of retrieving and/or sending files.

Host is a computer, such as a mainframe, mid-range computer, mini computer or
workstation that provides processing capability to multiple users. It may be
accessed by terminals or other computers.

HTML (Hyper Text Mark Up Language) is the standard document format used on the
World Wide Web.

HTTP (Hyper Text Transport Protocol) is the protocol for moving hypertext files
across the Internet, with an HTTP client program on one end, and an HTTP server
program on the other end. HTTP is currently the most important protocol used in
the World Wide Web.

Intranet refers to the utilization of Internet and Web technologies within a
corporate internetwork involving collaborative document and information sharing
across diverse computing platforms.

Java is a high level programming language developed by Sun Microsystems. It is
an object-oriented language simpler than C++, eliminating common programming
errors. Compiled Java code can run on most computers, and is well suited for
the Web.

Network is the connection of 2 or more computers so that they can share
resources.

Node is a single computer connected to a network.

NFS or Network File System is an open protocol that allows users to access and
share files and print services with a wide range of computer environments.

OLAP (On-line Analytical Processing) allows users to manipulate and view data
within a multidimensional framework in order to make critical business
decisions. OLAP includes querying, reporting, manipulating and exploring data
in an organizational data repository.

PC X server is software that implements the display server component of the X
Window System on a personal computer. PC X servers are perceived as being the
"glue" that ties together personal computers and networked computer systems,
enabling PCs to access and display graphics oriented and other applications
running on these computers.

                                    - 33 -
<PAGE>

Server is a computer, or a software package that provides a specific kind of
service to client software running on other computers. The term can refer to a
particular piece of software, such as a Web server, or to the machine on which
the software is running. A single server could have several different server
software packages running on it, thus providing many different servers to
clients on the network.

TCP/IP or Transmission Control Protocol/Internet Protocol is a network protocol
developed in the 1970s by the U.S. military. Today, it is one of the most
common network protocols in use and is the underlying network protocol for the
Internet and the majority of UNIX and X Windows systems.

Thin Client is software that is installed and maintained on a centralized
server, rather than on each desktop computer.

UNIX is today's most widely used multi-user, multitasking operating system used
in many technical and commercial environments. The X Window System was
originally associated with the UNIX environment, but now operates in a variety
of other open computing environments.

VMS, also known as OpenVMS, is a product of Digital Electronic Corporation
(DEC) that supports the VAX and Alpha operating platforms.

WAN (Wide Area Network) is any internetwork or network that covers an area
larger than a single building or campus.

Workstation is a computer designed to incorporate graphics and networking
capability with an operating system that supports multitasking. Workstations
normally include large, high-resolution displays, a keyboard and mouse or other
graphics input devices. The majority of workstations today support applications
that run under X Windows.

X development tools are a set of program libraries and subroutines used by
software developers to design X Windows applications.

X server is a component of the X Window System that controls the users'
display. It consists of a protocol and input/output functions that interact
with the screen, keyboard and mouse.

X terminal is a single purpose computer terminal specifically designed to
provide the display server component of the X Window System. As opposed to
workstations, an X terminal does not support an industry standard operating
system nor does it provide local disk storage. The only function of an X
terminal is to display X applications running elsewhere on a network.

X Window System (or X) is a network computing windows system standard designed
by MIT that provides computer users with a single graphical display environment
providing access to all elements of their computing network. The X Window
System is a network transparent system that allows multiple software
applications from multiple remote computers to be displayed simultaneously on
the same user's screen.

The X Window protocol is currently at version X11R6.8. "Broadway" is an
extension of the protocol that allows Broadway-enabled browsers and companion X
servers to provide remote access to interactive Windows and UNIX applications
through the Internet.




                                    - 34 -
<PAGE>




<PAGE>
                                                                Document No. 2

<PAGE>



                      Consolidated Financial Statements of


                      HUMMINGBIRD LTD.


                      September 30, 2005 and 2004




<PAGE>



Report of Independent Registered Chartered Accountants


TO THE SHAREHOLDERS OF HUMMINGBIRD LTD.


We have audited the consolidated balance sheets of Hummingbird Ltd. as at
September 30, 2005 and 2004 and the consolidated statements of earnings,
shareholders' equity and cash flows for the years then ended. These financial
statements are the responsibility of the Company's management. Our
responsibility is to express an opinion on these financial statements based on
our audits.

We conducted our audits in accordance with Canadian generally accepted auditing
standards. Those standards require that we plan and perform an audit to obtain
reasonable assurance whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation.

In our opinion, these consolidated financial statements present fairly, in all
material respects, the financial position of the Company as at September 30,
2005 and 2004 and the results of its operations and its cash flows for the years
then ended in accordance with accounting principles generally accepted in the
United States of America.


The Company is not required to have, nor were we engaged to perform, an audit of
its internal control over financial reporting. Our audit included consideration
of internal control over financial reporting as a basis for designing audit
procedures that are appropriate in the circumstances, but not for the purpose of
expressing an opinion on the effectiveness of the Company's internal control
over financial reporting. Accordingly, we express no such opinion.




/s/Deloitte & Touche LLP



Independent Registered Chartered Accountants

Toronto, Ontario

November 7, 2005








<PAGE>

CONSOLIDATED BALANCE SHEETS


<TABLE>
<CAPTION>

As at September 30 (thousands of U.S. dollars)                                             2005               2004
---------------------------------------------------------------------------------------------------------------------
ASSETS
CURRENT
       <S>                                                                               <C>              <C>
  Cash and cash equivalents (Note 3)                                              $       84,997     $      125,543
  Short-term investments (Note 3)                                                              -              4,943
  Accounts receivable, net of allowances of $9,197 in 2005 and $9,272 in 2004             66,771             57,620
  Unbilled receivables                                                                       664                832
  Income taxes recoverable                                                                   804                  -
  Inventory                                                                                  862                873
  Prepaid expenses                                                                         5,350              5,443
  Other receivables                                                                        1,528              2,138
---------------------------------------------------------------------------------------------------------------------
                                                                                         160,976            197,392
OTHER ASSETS                                                                               2,068              3,150
FIXED ASSETS (Note 4)                                                                     11,584             13,324
GOODWILL AND OTHER INTANGIBLE ASSETS (Note 5)                                            204,002            157,784
---------------------------------------------------------------------------------------------------------------------
                                                                                  $      378,630     $      371,650
=====================================================================================================================

LIABILITIES

CURRENT
        Accounts payable and accrued liabilities (Note 6)                         $       33,972     $       20,394
        Income taxes payable                                                                   -              7,167
        Current portion of other long-term liabilities (Note 9)                              997                212
        Deferred revenue                                                                  74,035             65,521
---------------------------------------------------------------------------------------------------------------------
                                                                                         109,004             93,294
DEFERRED INCOME TAXES (Note 11)                                                           10,308             11,398
OTHER LONG-TERM LIABILITIES (Note 9)                                                          67              1,038
---------------------------------------------------------------------------------------------------------------------
                                                                                         119,379            105,730
=====================================================================================================================


SHAREHOLDERS' EQUITY

SHARE CAPITAL (Note 10)
        Authorized: unlimited common and preferred shares
        Issued and outstanding: 17,418,338 common in 2005 and 17,448,279 in 2004         164,907            164,521
ADDITIONAL PAID-IN CAPITAL                                                                 3,510              3,510
RETAINED EARNINGS                                                                         91,941             98,819
ACCUMULATED OTHER COMPREHENSIVE LOSS                                                      (1,107)              (930)
---------------------------------------------------------------------------------------------------------------------
                                                                                         259,251            265,920
---------------------------------------------------------------------------------------------------------------------
                                                                                  $      378,630     $      371,650
=====================================================================================================================

Approved by the Board of Directors

</TABLE>


Fred Sorkin, Director                                Andrew J. Malik, Director



<PAGE>



CONSOLIDATED STATEMENTS OF EARNINGS



<TABLE>
<CAPTION>



Years ended September 30 (thousands of U.S. dollars, except share data)                          2005             2004
---------------------------------------------------------------------------------------------------------------------

<S>                                                                                           <C>              <C>
SALES                                                                                 $       236,102   $      220,224
COST OF SALES                                                                                  27,977           26,062
---------------------------------------------------------------------------------------------------------------------
GROSS PROFIT                                                                                  208,125          194,162
---------------------------------------------------------------------------------------------------------------------
EXPENSES
        Sales and marketing                                                                   106,276           94,947
        Research and development                                                               46,392           40,074
        General and administration                                                             24,434           21,241
        Restructuring charges (Note 7)                                                         10,031                -
        Other charges (Note 8)                                                                  9,660                -
        Amortization of other intangible assets                                               19, 630           22,892

        In-process research and development (Note 2)                                            2,850                -
---------------------------------------------------------------------------------------------------------------------
TOTAL EXPENSES                                                                                219,273          179,154
---------------------------------------------------------------------------------------------------------------------
OPERATING (LOSS) INCOME                                                                       (11,148)          15,008
INTEREST AND OTHER INCOME, NET                                                                  3,127            1,405
---------------------------------------------------------------------------------------------------------------------
(LOSS) INCOME BEFORE INCOME TAXES                                                              (8,021)          16,413
---------------------------------------------------------------------------------------------------------------------
INCOME TAX (RECOVERY) EXPENSE (Note 11)
        Current                                                                                 6,858           16,192
        Deferred                                                                               (9,040)          (6,650)
---------------------------------------------------------------------------------------------------------------------
                                                                                               (2,182)           9,542
---------------------------------------------------------------------------------------------------------------------
NET (LOSS) INCOME                                                                     $        (5,839)   $       6,871
=====================================================================================================================
BASIC (LOSS) EARNINGS PER SHARE                                                       $         (0.33)   $       0. 39
=====================================================================================================================
DILUTED (LOSS) EARNINGS PER SHARE                                                     $        (0. 33)   $       0. 39
=====================================================================================================================
BASIC WEIGHTED AVERAGE NUMBER OF SHARES (in thousands)                                         17,464           17,556
=====================================================================================================================
DILUTED WEIGHTED AVERAGE NUMBER OF SHARES (in thousands)                                       17,464           17,720
=====================================================================================================================

</TABLE>





<PAGE>



CONSOLIDATED STATEMENTS OF SHAREHOLDERS' EQUITY

<TABLE>
<CAPTION>


Years ended September 30 (thousands of U.S. dollars, except share data)
---------------------------------------------------------------------------------------------------------------------
                                                                                                Accumulated
                                              Common Shares         Additional                        Other
                                                (Note 10)              Paid-In     Retained   Comprehensive
                                              Shares      Amount       Capital     Earnings            Loss       Total
---------------------------------------------------------------------------------------------------------------------

BALANCE AS AT
<S>                                       <C>           <C>            <C>         <C>               <C>        <C>
     SEPTEMBER 30, 2003                   17,544,953  $  164,307        $ 3,510    $ 94,640          $ (930)   $ 261,527


COMPREHENSIVE INCOME
     Net income                                    -           -             -        6,871               -        6,871

SHARES REPURCHASED                          (215,300)     (2,026)            -       (2,692)               -      (4,718)
(Note 10)

STOCK OPTIONS EXERCISED
     UNDER THE ESOP (Note 10)                118,626       2,240             -            -               -        2,240

-------------------------------------------------------------------------------------------------------------------------
BALANCE AS AT
     SEPTEMBER 30, 2004                   17,448,279     164,521         3,510       98,819            (930)     265,920

COMPREHENSIVE LOSS
                                        ---------------------------------------------------------------------------------
     Net loss                                      -           -             -       (5,839)               -      (5,839)
     Foreign currency translation                  -           -             -            -            (177)        (177)
     adjustment
                                         --------------------------------------------------------------------------------
TOTAL COMPREHENSIVE LOSS                           -           -             -       (5,839)           (177)      (6,016)

SHARES REPURCHASED (Note 10)                 (95,100)       (900)             -      (1,039)              -       (1,939)

STOCK OPTIONS EXERCISED
     UNDER THE ESOP (Note 10)                 65,159       1,286             -            -               -       1,286

-------------------------------------------------------------------------------------------------------------------------
BALANCE AS AT
     SEPTEMBER 30, 2005                   17,418,338    $164,907       $ 3,510      $91,941        $ (1,107)   $259,251

=========================================================================================================================

</TABLE>


<PAGE>



CONSOLIDATED STATEMENTS OF CASH FLOWS

<TABLE>
<CAPTION>


Years ended September 30 (thousands of U.S. dollars)                                   2005           2004

---------------------------------------------------------------------------------------------------------------------
NET INFLOW (OUTFLOW) OF CASH RELATED TO THE FOLLOWING ACTIVITIES

OPERATING
<S>                                                                                  <C>             <C>
Net  (loss) income                                                                $  (5,839)    $     6,871

Add (deduct) items not affecting cash:
          Amortization of other intangible assets                                    19,630          22,892
          In-process research and development                                         2,850               -
          Deferred income taxes                                                      (9,040)         (6,594)
          Depreciation                                                                3,632           3,737
Changes in operating assets and liabilities:
          Accounts receivable                                                        (5,987)         (1,612)
          Unbilled receivables                                                          168            (266)
          Income taxes payable/recoverable                                           (8,471)         10,609
          Inventory                                                                      11            (136)
          Prepaid expenses                                                              387          (1,446)
          Other receivables                                                           1,113           1,869
          Accounts payable and accrued liabilities                                    9,957          (7,969)
          Deferred revenue                                                            5,072          10,820
---------------------------------------------------------------------------------------------------------------------
                                                                                     13,483          38,775
---------------------------------------------------------------------------------------------------------------------
INVESTING
          Short-term investments - net matured                                        4,943           4,482
          Decrease in other assets                                                    1,082             323
          Acquisition of subsidiaries - net of cash acquired (Note 2)               (57,923)         (4,532)
          Additions to fixed assets                                                  (2,601)         (3,437)
          Proceeds on disposition of fixed assets                                     1,309              -
---------------------------------------------------------------------------------------------------------------------
                                                                                    (53,190)         (3,164)
---------------------------------------------------------------------------------------------------------------------
FINANCING
          Repayment of other long-term liabilities                                     (186)         (2,173)
          Shares repurchased (Note 10)                                               (1,939)         (4,718)
          Issuance of shares                                                          1,286           2,240
---------------------------------------------------------------------------------------------------------------------
                                                                                       (839)         (4,651)
---------------------------------------------------------------------------------------------------------------------
(DECREASE) INCREASE IN CASH AND CASH EQUIVALENTS                                    (40,546)         30,960
CASH AND CASH EQUIVALENTS, BEGINNING OF YEAR                                        125,543          94,583
---------------------------------------------------------------------------------------------------------------------
CASH AND CASH EQUIVALENTS, END OF YEAR                                            $  84,997     $   125,543
=====================================================================================================================

SUPPLEMENTARY CASH FLOW INFORMATION
          Interest paid                                                           $      60     $        32
          Income taxes paid                                                          15,329           5,583
          Interest received                                                           2,947           1,530
</TABLE>


<PAGE>



Notes to the Consolidated Financial Statements
September 30, 2005 and 2004 (amounts in thousands of U.S dollars, except share
data)


1.     DESCRIPTION OF THE BUSINESS, BASIS OF PRESENTATION
       AND SIGNIFICANT ACCOUNTING POLICIES

       a)    Description of the business

             Hummingbird Ltd. (the "Company") is an enterprise software
             solutions company that specializes in the development of decision
             enabling web-based work environments. Reference to the Company
             includes the parent company and all of its subsidiaries.

       b) Significant accounting policies

          i)     Generally accepted accounting principles

                 These consolidated  financial  statements have been prepared in
                 accordance with accounting principles generally accepted in the
                 United States of America (U.S. GAAP).

          ii)    Basis of consolidation

                 The consolidated  financial  statements include the accounts of
                 the Company and its  subsidiary  companies.  In accounting  for
                 acquisitions   using  the  purchase  method,  the  Company  has
                 included  results  of  operations  of  subsidiaries   from  the
                 effective   dates  of   their   respective   acquisition.   All
                 intercompany transactions are eliminated upon consolidation.

          iii)   Cash and cash equivalents

                 Cash  and  cash  equivalents   include  investments  having  an
                 original term to maturity of 90 days or less.

          iv)    Short-term investments

                 Short-term  investments are investments having an original term
                 to maturity of greater than 90 days. Short-term investments are
                 carried at cost,  are  classified  as "held to  maturity",  and
                 consist of commercial  paper,  corporate debt, and money market
                 funds.  The held to maturity  investments  are written  down to
                 market value if there is an other than temporary  impairment in
                 their value.

          v)     Unbilled receivables

                 Unbilled  receivables  represent  amounts  accrued for software
                 shipped to customers or consulting, training and other services
                 rendered which will become  billable in accordance with various
                 contractual payment terms.

          vi)    Inventory


                 Inventory is stated at the lower of cost or net realizable
                 value as determined by the first-in first-out method.

          vii)   Other assets

                 This amount is comprised of payments made to third parties for
                 the licensing of technology used directly or indirectly in the
                 Company's products, and rent and lease deposits. Third party
                 licensing and technology amounts are amortized over periods
                 ranging from one to five years on a straight-line basis, which
                 approximates the useful life of the asset. Rent and lease
                 deposits are fixed in nature and are recoverable.





<PAGE>


           viii) Fixed assets

                 Fixed assets are stated at cost less accumulated depreciation.
                 Depreciation is provided as follows:

                 Buildings                     4% declining balance
                 Laboratory equipment          5 years straight-line
                 Furniture and fixtures        5 years straight-line
                 Leasehold improvements        5 years straight-line

                 The cost of repairs and maintenance is charged to expense as
                 incurred. Renewals and betterments are capitalized. Upon
                 retirement or sale of an asset, its cost and related
                 accumulated depreciation are removed from the accounts and any
                 gain or loss is recorded in income or expense. The Company
                 continually reviews fixed assets to determine that the carrying
                 values have not been impaired.

           ix)  Goodwill and other intangible assets

                 The Company follows the United States Financial Accounting
                 Standards Board ("FASB") Statement of Financial Accounting
                 Standards ("SFAS") No. 141, "Business Combinations" and No.
                 142, "Goodwill and Other Intangible Assets". SFAS No. 141
                 requires that the purchase method of accounting be used for all
                 business combinations initiated after June 30, 2001. In
                 accordance with SFAS No. 142, goodwill recorded on acquisition
                 is not amortized, but is instead subject to an annual
                 impairment test of all recorded goodwill. This annual test is a
                 two-step process; the first step will test the goodwill for
                 impairment and the second step, if required, will measure the
                 impairment. The test is performed on August 1 of each year, and
                 more frequently if events or changes in circumstances indicate
                 that goodwill may be impaired. Goodwill is tested for
                 impairment at a level of reporting referred to as a reporting
                 unit. The Company as a whole is considered one reporting unit.
                 The first step of the test compares the fair value of the net
                 assets to the carrying value, using various methods and
                 indicators. One of the tests used is to compare the fair value
                 of the outstanding shares on the NASDAQ National Market Site to
                 the carrying value of the Company's net assets, since quoted
                 market prices in active markets are considered to be the best
                 evidence of fair value. If the carrying value exceeds the fair
                 value, the second step would be performed to compare the
                 implied fair value of the goodwill, which is the excess fair
                 value over the fair value assigned to other assets and
                 liabilities, to the carrying amount of goodwill. When the
                 carrying amount of goodwill exceeds the implied fair value of
                 goodwill, an impairment loss is recognized.

                 The Company tests for impairment of goodwill on an annual basis
                 as of August 1 and at any other time if events occur or
                 circumstances changes that would indicate that it is more
                 likely than not that the fair value of goodwill is less than
                 its carrying amount. For fiscal years 2005 and 2004, the
                 Company determined there was no impairment of the recorded
                 goodwill.

                 Other intangible assets (excluding goodwill) are subject to
                 amortization and have useful lives as follows:

                  Acquired technology          2 to 8 years
                  Non-competition agreements   2 to 4 years
                  Trademarks                   5 to 10 years
                  Customer relationships       3 to 5 years
                  Customer contracts           1 to 5 years

                 The Company evaluates the recoverability of other intangible
                 assets periodically and takes into account events or
                 circumstances that warrant revised estimates of useful lives or
                 indicate that impairment exists. No impairments of other
                 intangible assets have been identified during any of the
                 periods presented.



<PAGE>


           x)    Revenue recognition

The              Company follows the provisions of Statement of Position (SOP)
                 97-2, "Software Revenue Recognition" and Staff Accounting
                 Bulletin (SAB) 104, "Revenue Recognition in Financial
                 Statements." Revenue is recognized from the sale of product and
                 software licenses when delivery has occurred based on purchase
                 orders, contracts or other documentary evidence, provided that
                 collection of the resulting receivable is deemed probable by
                 management. A provision is made for estimated sales returns and
                 other insignificant vendor obligations. Revenue from post
                 contract customer support is recognized ratably over the period
                 that the customer support services are provided, which is
                 generally one year. The amount of revenue allocated to this
                 undelivered service is based on the vendor-specific objective
                 evidence of its fair value using the residual method. Under the
                 residual method, the total fair value of the undelivered
                 service, as indicated by vendor-specific objective evidence, is
                 recorded as unearned, and the difference between the total
                 contract fee and the amount recorded as unearned for the
                 undelivered service is recognized as revenue related to
                 delivered elements of the contract. Revenues from consulting,
                 training and other services are recognized as services are
                 performed. Deferred revenue represents unearned income
                 associated with support agreements, software license revenue
                 where significant vendor obligations remain and any other
                 situations where payments are received in advance of revenue
                 recognition.

           xi)   Foreign currency translation

                 The functional currency of the parent company and the majority
                 of its subsidiaries is the U.S. dollar. For these subsidiaries
                 and the parent company, monetary assets and liabilities
                 denominated in currencies other than the U.S. dollar are
                 translated into U.S. dollars at the rate of exchange prevailing
                 at year end while all other balance sheet items are translated
                 at historic rates. Revenue and expense items are translated at
                 the rate of exchange in effect on the transaction dates.
                 Realized and unrealized foreign exchange transaction gains and
                 losses are included in income in the year in which they are
                 measured and are disclosed in Note 14.

                 For subsidiaries using a functional currency other than the
                 U.S. dollar, all assets and liabilities are translated into
                 U.S. dollars using the exchange rates in effect at year end.
                 Revenue and expense items are translated at exchange rates in
                 effect on the transaction dates. Translation gains and losses
                 resulting from changes in exchange rates are reported in other
                 comprehensive loss in shareholders' equity.

           xii)  Income taxes

                 The Company calculates its provision for income taxes in
                 accordance with SFAS No. 109, "Accounting for Income Taxes",
                 which requires an asset and liability approach to financial
                 accounting for income taxes. This approach recognizes the
                 amount of taxes payable or refundable for the current year, as
                 well as deferred tax assets and liabilities for the future tax
                 consequences of events recognized in the financial statements
                 and tax returns. Deferred income taxes are adjusted to reflect
                 the effects of enacted changes in tax laws or tax rates.

                 In establishing the appropriate income tax valuation
                 allowances, the Company assesses the realizability of its net
                 deferred tax assets quarterly and, based on all available
                 evidence, both positive and negative, determines whether it is
                 more likely than not that the net deferred tax assets, or a
                 portion thereof, will be realized.

           xiii) Investment tax credits

                 Investment tax credits arising from qualifying scientific
                 research and experimental development efforts are recorded as
                 reductions of income tax expense when there is reasonable
                 assurance the credits will be realized.

           xiv)  Lease inducements

                 Lease inducements represent leasehold improvements paid for by
                 the landlord and the value of rent-free periods. Lease
                 inducements are amortized on a straight-line basis over the
                 periods of the leases and the amortization is recorded as a
                 reduction of rent expense.

           xv)   Software development costs

                 The Company expenses research costs when they are incurred.
                 Software development costs are expensed as incurred unless they
                 meet the criteria for deferral and amortization required by
                 generally accepted accounting principles. Development costs
                 incurred prior to the establishment of technological
                 feasibility are expensed, as they do not meet the
                 capitalization criteria. Capitalized costs are amortized on a
                 straight-line basis over the remaining economic lives of the
                 related products, not exceeding two years. The Company
                 reassesses the relevant criteria for deferral and amortization
                 at each reporting date. There have been no costs capitalized
                 and amortized for the periods presented.



<PAGE>


           xvi)  Derivatives

                 The Company's net earnings and cash flows may be negatively
                 impacted by fluctuating foreign exchange rates. To effectively
                 manage this risk, the Company may enter into foreign currency
                 contracts. The Company applies the recommendations of SFAS No.
                 133 "Accounting for Derivative Instruments and Hedging
                 Activities" and the corresponding amendments under SFAS 138 and
                 149. Pursuant to these accounting standards, for a derivative
                 designated as an accounting hedge, the effective portions of
                 the changes in the fair value of the derivative are recorded in
                 other comprehensive income (loss) and are recognized in net
                 earnings when the hedged item affects net earnings. Ineffective
                 portions of changes in the fair value of the hedge are
                 recognized in net earnings. If the derivative used is not
                 designated as an accounting hedge relationship or if it becomes
                 ineffective, changes in fair value of the derivative are
                 recognized in net earnings. During the years ended September
                 30, 2005 and 2004, the Company did not enter into any
                 derivative contracts.


           xvii) Stock options

                 The Company accounts for stock-based compensation in accordance
                 with Accounting Principles Board (APB) Opinion No.25,
                 "Accounting for Stock Issued to Employees". Pursuant to this
                 accounting standard, the Company records deferred compensation
                 for share options granted to employees at the date of grant
                 based on the difference between the exercise price of the
                 options and the market value of the underlying shares at that
                 date. Deferred compensation is amortized to compensation
                 expense over the vesting period of the underlying options. No
                 compensation expense is recorded for stock options that are
                 granted to employees and directors when the exercise price is
                 equal to or greater than the fair market value of the shares at
                 the time of grant.

                 Had the Company applied a fair value based method described by
                 SFAS No. 123 "Accounting for Stock-based Compensation" and the
                 corresponding amendments under SFAS No.148 "Accounting for
                 Stock-based Compensation - Transition and Disclosure", which
                 recognizes the fair values of the stock options granted as
                 compensation cost over the vesting period, compensation related
                 to stock options would have resulted in the pro forma amounts
                 indicated below for the following years:

                                                              2005        2004
           =====================================================================
           Net (loss) income - reported                     $ (5,839) $ 6,871
           Stock-based compensation expense                   (2,970)  (3,473)
           ---------------------------------------------------------------------
           Net (loss) income - pro forma                    $ (8,809) $ 3,398
           =====================================================================

           Basic (loss) earnings per share - reported        $ (0.33) $  0.39
           ---------------------------------------------------------------------
           Diluted (loss) earnings per share - reported      $ (0.33) $  0.39
           ---------------------------------------------------------------------
           Basic (loss) earnings per share - pro forma       $ (0.50) $  0.19
           ---------------------------------------------------------------------
           Diluted (loss) earnings per share - pro forma     $ (0.50) $  0.19
           ---------------------------------------------------------------------

           The Black-Scholes option value model was developed for use in
           estimating the fair value of traded options that have no vesting
           restrictions and are fully transferable, and requires the input of
           assumptions, including the expected stock price volatility. The
           options granted to employees have characteristics significantly
           different from those of traded options, and changes in the input
           assumptions can materially affect the fair value estimates. The fair
           value of the stock options on their date of grant was estimated by
           utilizing a Black-Scholes option pricing model with weighted average
           assumptions for fiscal 2005 and 2004, as follows:

                                                          2005           2004
           =====================================================================
           Expected dividend                              0.0%           0.0%
           Expected volatility                           39.0%          41.8%
           Risk-free interest rate                        4.0%           4.0%
           Expected option life in years                  4              4
           Weighted average stock option fair
            value per option granted                    $ 8.98        $  8.46
           =====================================================================



<PAGE>





           xviii) Guarantees

                 The Company follows the FASB Interpretation No. 45 ("FIN 45"),
                 "Guarantor's Accounting and Disclosure Requirements for
                 Guarantees, Including Indirect Guarantees and Indebtedness of
                 Others", an interpretation of SFAS Nos. 5, 57 and 107, and
                 rescission of FIN 34, "Disclosure of Indirect Guarantees of
                 Indebtedness of Others". FIN 45 elaborates on the disclosures
                 to be made by the guarantor in its interim and annual financial
                 statements about its obligations under certain guarantees that
                 it has issued. It also requires that a guarantor recognize, at
                 the inception of a guarantee, a liability for the fair value of
                 the obligation undertaken in issuing the guarantee. The
                 provisions related to recognizing a liability at inception of
                 the guarantee for the fair value of the guarantor's obligations
                 do not apply to product warranties or to guarantees accounted
                 for as derivatives.

           xix)  Asset Retirement Obligations

                 The Company follows SFAS No. 143 "Accounting for Asset
                 Retirement Obligations". SFAS 143 requires entities to record
                 the fair value of a liability for an asset retirement
                 obligation in the period in which it is incurred. When the fair
                 value of the liability is initially recorded, a corresponding
                 increase to the carrying amount of the related asset is also
                 recorded and depreciated over the useful life of the asset.
                 Over time, the liability is increased to reflect an interest
                 element (accretion) considered in its initial measurement at
                 fair value.

           xx)  Comprehensive Income (Loss)

                 Comprehensive income (loss) includes net income (loss) and
                 other comprehensive income (loss). Other comprehensive loss
                 refers to changes in net assets from transactions which are not
                 included in net income (loss). These changes are recorded as a
                 separate component of shareholders' equity. Other comprehensive
                 income (loss) includes the foreign currency translation
                 adjustments for subsidiaries that have a functional currency
                 other than the U.S. dollar.

           xxi)  Use of estimates

                 The preparation of financial statements in accordance with
                 generally accepted accounting principles requires management to
                 make estimates and assumptions that affect the reported amounts
                 of assets and liabilities and disclosure of contingent assets
                 and liabilities at the date of the financial statements, and
                 the reported amounts of revenues and expenses during the
                 reporting period. Actual results could differ from those
                 estimates. Estimates are used when accounting for items and
                 matters such as allowance for doubtful accounts, asset
                 valuations, impairment assessments, income taxes, employee
                 benefits, purchase price allocations, restructuring and other
                 provisions, and contingencies.



<PAGE>


2.     ACQUISITIONS

       RedDot Solutions AG

       On June 21, 2005, the Company acquired 100% of the issued and outstanding
       shares of RedDot Solutions AG ("RedDot").

       RedDot, based in Germany with operations in the U.S.A, the United
       Kingdom, Germany, Australia, Italy and Poland, was a privately held
       content management software company specializing in delivering content
       management solutions to mid-size enterprises. The acquisition of RedDot
       has created a strong foundation for product integration and market
       development to address the needs of mutual customers of RedDot and the
       Company.

       Under the terms of the acquisition, the Company paid cash of $47,904 for
       RedDot. In addition, depending upon the financial performance of RedDot
       for its fiscal year ending December 31, 2005, the Company may be required
       to make two contingent payments; (a) up to $1,225 on maintaining certain
       profitability plus (b) up to 2.3 times revenue in excess of an agreed
       revenue amount provided certain profitability is achieved. The aggregate
       estimated amount of the contingent consideration is $5,500. In accordance
       with SFAS No. 141, the contingent consideration is not recorded in the
       purchase price as of the date of acquisition because the amount of the
       contingent consideration is not determinable at the acquisition date
       beyond reasonable doubt. Furthermore, following the guidelines specified
       in Emerging Issues Task Force (EITF) No. 95-8 "Accounting for Contingent
       Consideration Paid to the Shareholders of an Acquired Enterprise in a
       Purchase Business Combination", any future payments made in connection
       with this contingent consideration will be accounted for as goodwill.


       The following table summarizes the estimated fair value of assets
       acquired and liabilities assumed:


       -------------------------------------------------------------------------
       Current assets (including cash of $2,401)                  $    6,418
       Fixed assets                                                      600
       Current liabilities                                            (7,092)
       Deferred income taxes                                          (8,300)
       Other intangibles assets:
           Acquired technology                                         8,700
           In-process research and development                         2,850
           Non-competition agreements                                  4,250
           Customer relationship                                       2,700
           Trademarks                                                  5,100
           Goodwill                                                   35,249
       -------------------------------------------------------------------------
                                                                  $   50,475
       =========================================================================
       Consideration given:
         Cash                                                      $  47,904
         Transaction costs (gross amount $3,222 less
           tax benefit of $651)                                        2,571
       -------------------------------------------------------------------------
                                                                   $  50,475
       =========================================================================

       The acquisition was accounted for as a purchase transaction in
       accordance with SFAS No. 141 and accordingly, the assets acquired and
       liabilities assumed were recorded at their estimated fair values at the
       date of the acquisition. In calculating the amounts allocated to assets
       and liabilities acquired, including intangible assets and in-process
       research and development ("IPR&D"), the Company used established
       valuation techniques accepted in the high technology industry,
       including the income method, which discounts expected future cash flows
       to present value, cash method and market method. Consideration was
       given to relevant market sizes and growth factors, expected industry
       trends, product sales cycles, and the estimated lives of each product's
       underlying technology. For IPR&D, consideration was also given to the
       projects' stage of completion, the complexity of the work completed to
       date, the difficulty of completing the remaining development and the
       estimated cost to complete the projects.

<PAGE>



       The estimated fair value of acquired in-process research and
       development of $2,850 from the acquisition of RedDot was expensed in
       the current fiscal year, as the technological feasibility of the
       project had not been achieved and no alternative future uses have been
       established.

       The other acquired intangible assets (excluding goodwill) are subject
       to amortization and have weighted average useful lives as follows:

           Acquired technology             5 years
           Non-competition agreements      2 years
           Customer relationships          5 years
           Trademarks                      5 years

       Goodwill recorded as a result of this transaction will not be
       amortized, but will be tested annually for impairment as described in
       Note 1.

       In accordance with EITF No. 95-3, "Recognition of Liabilities in
       Connection with a Business Combination", the Company recognized
       liabilities, net of tax benefit, in connection with the acquisition of
       RedDot totaling $2,571. This amount is included in the purchase price
       and represents severance and related charges and transaction costs
       including professional fees. Of the total liabilities accrued in
       connection with the RedDot acquisition, $2,753 remains accrued as at
       September 30, 2005.

       Included in transaction costs of $3,222, an amount of $1,350 is
       included for anticipated restructuring charges related to staff
       termination costs for RedDot employees worldwide. This restructuring
       plan is expected to be completed by the end of fiscal 2006 and the
       following table provides a continuity of these restructuring costs:

<TABLE>
<CAPTION>


                                                           Employee Costs          Other             Total
       =================================================================================================================
      <S>                                                    <C>                  <C>               <C>
       Integration costs on RedDot acquisition in 2005       $1,250               $ 100             $ 1,350
       Amounts paid in 2005                                       -                 (33)                (33)
       -----------------------------------------------------------------------------------------------------------------
       Balance September 30, 2005                      $      1,250               $  67             $ 1,317
       =================================================================================================================

</TABLE>

       The results of operations of RedDot have been included in the Company's
       financial statements subsequent to the date of acquisition.

       Legal Key Technologies, Inc.

       During fiscal 2003, the Company acquired Legal Key Technologies, Inc.
       ("LegalKEY"). The terms of the agreement included contingent
       consideration based on the agreed upon financial performance in the
       calendar years of 2003 and 2004. The Company made payments of $823 and
       $810 for fiscal 2005 and 2004 respectively in relation to this
       contingent consideration. These contingent payments were accounted for
       as goodwill.

       Valid Information Systems Limited

       During fiscal 2003, the Company acquired Valid Information Systems
       Limited ("Valid"). Under the terms of the acquisition, the Company paid
       cash of $15,778 towards the purchase price of $16,609. The remaining
       amount of $831 is payable 30 months from the date of acquisition and is
       shown under other long-term liabilities (see Note 9). The terms of the
       agreement included contingent consideration based on the agreed upon
       financial performance in Valid's fiscal years of 2004 and 2005. The
       Company recorded $11,267 in fiscal 2005 in relation to this contingent
       consideration, of which $9,026 was allocated to goodwill and the
       balance of $2,241 was recorded as other charges (see Note 8). For the
       fiscal year 2004, the Company paid $3,722 in relation to this
       contingent consideration which was recorded as goodwill.

       Integration Costs

       The following table provides a continuity of the integration costs,
       excluding tax benefit, relating to the 2003 acquisitions:
<TABLE>
<CAPTION>

                                                Employee Costs      Other            Total
       ---------------------------------------------------------------------------------------
<S>                                                  <C>             <C>               <C>
       Balance September 30, 2003                $   257          $   127      $      384
       Amounts paid in 2004                         (257)            (127)           (384)
       ---------------------------------------------------------------------------------------
       Balance September 30, 2005 and 2004       $   -            $    -      $        -
       =======================================================================================

</TABLE>


3.     CASH AND SHORT-TERM INVESTMENTS

<PAGE>


       Cash and cash equivalents includes highly liquid investments having an
       original term to maturity of 90 days or less.

       As at September 30, 2005, the Company had $nil (2004 - $4,943) in
       short-term investments having an original term to maturity of greater
       than 90 days. Short-term investments were invested primarily in
       commercial paper and money market funds, none of which had a maturity
       date greater than six months. The market value of these investments
       approximated cost.


4.     FIXED ASSETS

<TABLE>
<CAPTION>

                                                                    2005                                     2004
                               -----------------------------------------------------------------------------------------
                                              Accumulated       Net Book                   Accumulated      Net Book
                                  Cost       Depreciation        Value          Cost       Depreciation       Value
                               ------------ ----------------------------------------------------------------------------
       <S>                         <C>             <C>            <C>              <C>          <C>             <C>
       Land and buildings       $   3,678   $       1,262      $   2,416        $   4,984    $   1,334       $   3,650
       Laboratory equipment        44,554          37,552          7,002           40,198       32,516           7,682
       Furniture and fixtures       9,513           8,519            994            8,898        8,107             791
       Leasehold improvements       4,169           2,997          1,172            3,808        2,607           1,201
       -----------------------------------------------------------------------------------------------------------------
                               $   61,914    $     50,330     $   11,584        $  57,888    $  44,564       $  13,324
       =================================================================================================================
</TABLE>



5.     GOODWILL AND OTHER INTANGIBLE ASSETS

<TABLE>
<CAPTION>


                                                                    2005                                     2004
                               -----------------------------------------------------------------------------------------
                                              Accumulated       Net Book               Accumulated      Net Book
                                  Cost       Depreciation        Value      Cost       Depreciation       Value
                               -----------------------------------------------------------------------------------------
       <S>                         <C>             <C>            <C>              <C>          <C>             <C>
       Acquired technology      $  110,607    $    79,394     $   31,213  $  101,907   $    65,493   $   36,414
       Other intangibles            62,716         41,315         21,401      50,666        35,586       15,080
       -----------------------------------------------------------------------------------------------------------------
       Total other intangible
        assets subject to
        amortization               173,323        120,709         52,614     152,573       101,079       51,494
       Goodwill                    200,882         49,494        151,388     155,784        49,494      106,290
       -----------------------------------------------------------------------------------------------------------------
                               $   374,205    $   170,203     $  204,002    $ 308,357   $  150,573    $ 157,784
       =================================================================================================================
</TABLE>


      The following table provides a summary of goodwill:

                                                                          Total

      --------------------------------------------------------------------------
       Balance as at October 1, 2003                                    $151,252
       Additions during the year due to:

         Contingent consideration (Note 2)                                 4,532
       -------------------------------------------------------------------------
       Balance as at September 30, 2004                                  155,784
       Additions during the year due to:
         Acquisition (Note 2)                                             35,249
         Contingent consideration (Note 2)                                 9,849
       -------------------------------------------------------------------------
       Balance as at September 30, 2005                                 $200,882
       =========================================================================


       The estimated amortization of the other intangible assets for the next
       five years is as follows:

       2006                                             $20,920

       2007                                              16,333

       2008                                               8,228

       2009                                               4,752

       2010                                               2,381
       ----------------------------------------------------------
                                                        $52,614
       ==========================================================




<PAGE>


6.     ACCOUNTS PAYABLE AND ACCRUED LIABILITIES
                                                    2005            2004
       =========================================================================

       Accounts payable - trade                    $ 10,632       $      8,420
       Accruals:

         Trade payables                               5,283              5,859
         Payroll related                              8,668              6,054
         Acquisition related                          2,753                  -
         Restructuring (Note 7)                       5,803                  -
         Other                                          833                 61
       -------------------------------------------------------------------------
                                                   $ 33,972       $     20,394
       =========================================================================


7.      RESTRUCTURING CHARGES

       During the current fiscal year, the Company undertook a thorough review
       of its global operations and, in particular, considered areas where there
       was an overlap in its operations due to recent acquisitions. In its
       review, the Company considered the changing market conditions, which have
       impacted sales and profitability since these acquisitions were made in
       2003. Pursuant to this review, it was determined that a restructuring
       ("First Plan") was necessary to reduce the Company's cost structure and
       to refocus its future operating strategy. As a result, restructuring
       charges of $8,832, relating to 37 terminated employees, were recorded
       during the year ended September 30, 2005. The First Plan is expected to
       be completed during the first six months of the fiscal year 2006. A
       significant portion of the restructuring charge relates to a small group
       of employees. Some of these severance payments are currently in dispute,
       and the amount ultimately paid may be higher or lower than the amount
       accrued in these financial statements.

       Later in the fiscal year, as part of the continuous review of its global
       operations, the Company believed that there were still some areas where
       the cost structure could be reduced to achieve further efficiencies in
       operations. Pursuant to this review, it was determined a second
       restructuring ("Second Plan") was required. As a result, restructuring
       charges of $1,199, relating to staff costs in respect of an additional 45
       terminated employees, were recorded during the year ended September 30,
       2005. The Second Plan is expected to be completed by the end of the
       fiscal year 2006.

       Restructuring costs recognized but remaining to be paid from the First
       Plan as at September 30, 2005 are as follows:


                                                                 Total
       =========================================================================
        Restructuring charge - First Plan                     $ 8,832
         Amounts paid                                          (3,262)
       -------------------------------------------------------------------------
        Balance outstanding - September 30, 2005              $ 5,570
       =========================================================================


       Restructuring costs recognized, but remaining to be paid from the Second
       Plan as at September 30, 2005 are as follows:


                                                              Total
       =========================================================================
        Restructuring charge - Second Plan                   $ 1,199
        Amounts paid                                            (966)
       ------------------------------------------------------------------------
        Balance outstanding - September 30, 2005             $   233
       =========================================================================




<PAGE>


8.     OTHER CHARGES

       The Company recorded other charges in the amount of $9,660 during the
       year ended September 30, 2005 as follows:

       a.     Retiring allowances and special payments, including payroll taxes,
              provided to certain senior management of $4,114.

       b.     Corporate charges relating to acquisitions and other development
              initiatives of $1,569.

       c.     Other costs relating to the write down of furniture and fixtures,
              laboratory equipment and the write off of certain receivables of
              $589. In addition, the Company had various recoverable amounts
              representing primarily legacy sales tax receivables resulting from
              acquired companies and the periods of integration of these
              companies. During the year management completed an analysis of
              these amounts and determined that an allowance of $1,147 was
              required.

       d.     Contingent consideration of $2,241 paid to certain employees of
              Valid, under the terms of the acquisition, upon Valid achieving
              agreed upon financial performance (see Note 2).


9.     OTHER LONG-TERM LIABILITIES

       Other long-term liabilities consists of the following:


                                                          2005          2004
      =========================================================================

       Lease inducements                               $    172      $    255
       Retention money on Valid acquisition (Note 2)        831           831
       Long-term debt is comprised of:
          Capital lease obligations                          58           164
          Term loans                                          3             -
       -------------------------------------------------------------------------
                                                                        1,250
                                                          1,064
       Less: amounts due within one year                    997           212
       -------------------------------------------------------------------------
                                                      $      67      $  1,038
       =========================================================================

       Capital lease obligations are comprised of various leases for
       automobiles, bearing interest from 10.0% to 15.0% per annum, and are
       secured by the underlying assets.

       During the year ended September 30, 2005, interest expense on long-term
       debt was $11 (2004 - $30).

       The following repayment schedule is for the long-term debt portion of
       other long-term liabilities:

      2006                                    $       54
      2007                                             7
      ----------------------------------------------------
                                              $        61
      ====================================================



<PAGE>


10.    SHARE CAPITAL

       Authorized

       Unlimited number of common shares, no par value.

       Unlimited number of preferred shares issuable in series and whose
       attributes shall be fixed by the Board of Directors prior to issue.

       Share Issuances

       During the year, 65,159 common shares were issued pursuant to the
       Employee Stock Option Plan for proceeds of $1,286 (2004 - 118,626 for
       $2,240).

       Share Repurchase Program

       On November 22, 2004, the Company announced that it had received approval
       to commence a normal course issuer bid (the "2005 Bid") for up to
       1,500,000 of its common shares. The 2005 Bid is being conducted at
       prevailing market prices on the Toronto Stock Exchange or the NASDAQ
       National Market Site, and all shares purchased under the 2005 Bid will be
       cancelled. The 2005 Bid commenced on November 24, 2004, and will
       terminate on the earlier of November 23, 2005, or the date on which a
       total of 1,500,000 common shares have been repurchased pursuant to its
       terms. During its year ended September 30, 2005, the Company repurchased
       and cancelled 95,100 shares at an average price of $20.40 per share for a
       total consideration of $1,939, which has been applied to reduce share
       capital and retained earnings by $900 and $1,039, respectively.

       On November 13, 2003, the Company received approval to commence a normal
       course issuer bid (the "2004 Bid") for up to 1,000,000 of its common
       shares at prevailing market prices on the Toronto Stock Exchange or the
       NASDAQ National Market Site. The 2004 Bid commenced on November 17, 2003,
       and was to terminate on the earlier of November 16, 2004, or the date on
       which a total of 1,000,000 common shares had been repurchased pursuant to
       the 2004 Bid. During its year ended September 30, 2004, the Company
       repurchased and cancelled 215,300 shares under the 2004 Bid at an average
       price of $21.92 per share for a total consideration of $4,718, which was
       applied to reduce share capital and retained earnings by $2,026 and
       $2,692, respectively.

       Employee Stock Option Plan

       The Company's current stock option plan, the 1996 Employee Stock Option
       Plan ("1996 ESOP"), has been in effect since January 1996 and was
       approved by the Shareholders at the Company's annual and special meeting
       on March 19, 1996 (amended March 25, 1997 and further amended effective
       May 14, 1999, September 1999, March 23, 2000, and March 23, 2001). Under
       the 1996 ESOP, the Company has, pursuant to Shareholders' approval,
       progressively increased the number of shares available for issue under
       the ESOP. At September 30, 2005, 5,286,596 common shares were reserved
       for issuance under the ESOP.

       One third of such options become exercisable on each of the three
       anniversaries after the respective date of grant. Options are exercisable
       for six years after their date of grant.

       The following table is a summary of stock options granted, exercised and
       cancelled in the last two years:


<TABLE>
<CAPTION>

                                                            Number          Range of Exercise          Weighted Average
                                                         of Options              Prices *              Exercise Price *
       ----------------------------------------------------------------------------------------------------------------------
<S>                                                     <C>                 <C>             <C>            <C>
       Outstanding as at October 1, 2003                  2,935,316         $ 19.82   -  $  60.09        $ 30.17
           Granted                                          335,050           24.07   -     27.48          25.57
           Exercised                                       (118,626)          19.82   -     29.03          21.44
           Cancelled                                       (512,499)          19.82   -     60.09          36.01
       ----------------------------------------------------------------------------------------------------------------------
       Outstanding as at September 30, 2004               2,639,241           19.82   -     60.09          33.03
           Granted                                           96,000           22.92   -     27.06          24.94
           Exercised                                        (65,159)          19.82   -     23.18          20.27
           Cancelled                                       (443,604)          19.82   -     60.09          33.71
       ----------------------------------------------------------------------------------------------------------------------
       Outstanding as at September 30, 2005               2,226,478         $ 20.25  -   $  60.09        $ 32.79
       ======================================================================================================================

</TABLE>




<PAGE>



       The following stock options have been granted and remain outstanding at
       September 30, 2005:
<TABLE>
<CAPTION>

                                            Options Outstanding                               Options Exercisable
       -----------------------------------------------------------------------------------------------------------------------

             Range of            Number       Weighted Average     Weighted Average         Number         Weighted Average
        Exercise Prices *      of Options     Exercise Price*       Remaining Life        of Options       Exercise Price*
                                                                      in Years
       -----------------------------------------------------------------------------------------------------------------------
        <S>                     <C>               <C>                   <C>                <C>                <C>
        $ 20.25  - $ 24.63        927,838          $ 22.48               3.0                713,271          $  22.06
          25.68  -   29.51        764,240            27.97               2.4                543,023             28.43
          41.40  -   41.79         70,300            41.56               1.1                 70,300             41.56
          50.40  -   60.09        464,100            60.00               0.6                464,100             60.00
       -----------------------------------------------------------------------------------------------------------------------
                                2,226,478          $ 32.79               2.2              1,790,694          $  34.59
       =======================================================================================================================


       * The exercise price is based on the closing sale price as per the Toronto Stock Exchange, which is in Canadian dollars.
         This value has been converted to U.S. dollars based on the exchange rate on September 30, 2005.
</TABLE>


11.    INCOME TAXES

       The Company's income tax expense varies from tax computed using statutory
       rates due to the following:
<TABLE>
<CAPTION>

                                                                              2005             2004
       ------------------------------------------------------------------------------------------------
<S>                                                                      <C>               <C>
       (Loss) income before income taxes                                 $ (8,021)         $ 16,413
       ================================================================================================
       Combined basic Federal and Provincial income taxes at
          36.12% (36.25% - 2004)                                         $ (2,897)          $ 5,950
       Increase (decrease) resulting from:
         Foreign rate differences                                            (359)              460
         Non-deductible amortization of intangibles                           907             1,142
         Effects on deferred tax amounts from increases in income tax rate      -             2,141
         Non-deductible amounts                                             3,101             2,175
           Investment tax credits                                          (1,750)           (1,600)
         Other                                                             (1,184)             (726)
       -------------------------------------------------------------------------------------------------
       Income tax (recovery) expense                                    $ ( 2,182)            9,542
       =================================================================================================
</TABLE>


       The income tax expense is made up of the following components:
<TABLE>
<CAPTION>

                                                                               2005         2004
       ----------------------------------------------------------------- -------------- ---------------
<S>                                                                         <C>            <C>
       Current income tax expense                                           $ 6,858     $ 16,192
       Deferred income tax (recovery) expense relating to:
         Temporary differences                                               (9,040)      (8,791)
         Increase in income tax rate                                             -         2,141
       ----------------------------------------------------------------- -------------- ---------------
       Income tax (recovery) expense                                       $ (2,182)    $  9,542
       ================================================================================================
</TABLE>


<PAGE>



<TABLE>
<CAPTION>

       The Company's deferred tax assets and (liabilities) consisted of the
       following:
                                                                                              2005            2004
       -------------------------------------------------------------------------------------------------------------
       Deferred tax assets
         Temporary differences:
<S>                                                                                        <C>               <C>
            Tax value of fixed assets in excess of net book value                          $      -       $    678
            Expenses not currently deductible for tax purposes                               10,087          6,755
       -------------------------------------------------------------------------------------------------------------
                                                                                             10,087          7,433
         Loss carry-forwards, scientific research and development expenditures,
         and investment tax credits                                                          47,821         52,236
       ------------------------------------------------------------------------------------------------------------
                                                                                             57,908         59,669
      -------------------------------------------------------------------------------------------------------------
       Deferred tax liabilities
         Temporary differences:
            Net book value of fixed assets in excess of tax values                             (629)             -
            Net book value of identifiable intangible assets in excess of tax bases         (20,691)       (19,727)
            Net book value of other assets in excess of tax values                             (241)          (271)
       ------------------------------------------------------------------------------------------------------------
                                                                                            (21,561)       (19,998)
       Valuation allowance                                                                  (46,655)       (51,069)
       -------------------------------------------------------------------------------- -------------- ---------------
       Net deferred tax liabilities                                                       $ (10,308)    $  (11,398)
       ================================================================================================================

</TABLE>


       A valuation allowance of $46,655 (2004 - $51,069) has been recorded for a
       portion of the deferred tax asset attributable to certain tax loss
       carry-forwards, scientific research and development expenditures, and
       investment tax credits carried forward as it is more likely than not that
       the income tax benefit will not be realized.

       As of September 30, 2005, the Company has tax losses of approximately
       $58,141 available to reduce future years' income for tax purposes. These
       losses, shown by country of origin converted to U.S. dollars, expire as
       follows:

<TABLE>
<CAPTION>

                                                                                                      United
                      Australia   Germany     Canada     France     Italy      Japan    Singapore     Kingdom     U.S.A.   Total

<S>    <C>          <C>         <C>          <C>        <C>       <C>      <C>       <C>            <C>       <C>       <C>
       2006         $       -   $     -      $     -         -    $     -   $ 1,016  $       -     $    -           -  $  1,016
       2007                 -         -        3,337         -          -         -          -          -           -     3,337
       2008                 -          -           -         -          -         -          -          -           -         -
       2009                 -          -           -         -          -       995          -          -           -       995
       2010                 -          -           -         -          -       363          -          -         780     1,143
       2011                 -          -           -         -          -       138          -          -         250       388
       Indefinite       4,073     10,672           -    30,523       2,486        -        692      2,816           -    51,262
       ---------------------------------------------------------------------------------------------------------------------------
                     $  4,073  $  10,672    $  3,337 $  30,523    $  2,486  $  2,512    $  692   $  2,816    $  1,030 $  58,141
       ===========================================================================================================================

</TABLE>


       The Company has carried forward to future periods scientific research and
       development expenditures of approximately $66,000 for Canadian federal
       tax purposes, $36,100 for Ontario provincial tax purposes, and $9,100 for
       Quebec provincial tax purposes. There is no expiry period applicable to
       these amounts. In addition, the Company has carried forward Canadian
       federal scientific research and development tax credits of $5,600 that
       expire in 2012 and 2013 in the amounts of $3,660 and $1,940,
       respectively.


12.    EARNINGS (LOSS) PER COMMON SHARE

       Basic earnings (loss) per share have been calculated based on the
       weighted average number of common shares without the inclusion of
       dilutive effects. Diluted earnings (loss) per share are calculated based
       on the weighted average number of common shares plus dilutive common
       share equivalents outstanding which, in the Company's case, consist
       entirely of stock options. The following is a reconciliation of shares
       used in the calculation:

<TABLE>
<CAPTION>


       (thousands of shares)                                                                           2005            2004
       ---------------------------------------------------------------------------------------------------------------------
<S>                                                                                                 <C>              <C>
       Weighted average number of basic shares outstanding                                          17, 464          17,556
       Incremental shares to be issued if stock options "in the money" are exercised                      -             164
       ---------------------------------------------------------------------------------------------------------------------
       Weighted average number of diluted shares outstanding                                         17,464          17,720
       =====================================================================================================================

</TABLE>

       For the year ended September 30, 2005, all options (2004 - 1,934,209) to
       purchase shares were excluded in the diluted share calculation because
       they were anti-dilutive for earnings per share purposes.



<PAGE>



13.    COMMITMENTS, CONTINGENCIES AND GUARANTEES

       Commitments

       The Company has entered into agreements related to operating leases for
       premises, automobiles and equipment requiring payments as follows:

       2006                                              $     7,433
       2007                                                    5,351
       2008                                                    4,619
       2009                                                    3,893
       2010                                                    2,674
       Thereafter                                              3,623
       --------------------------------------------------------------
                                                          $   27,593
       -=============================================================

       Product Warranties and Indemnities

       The Company's standard warranty covers a 90-day period and warrants
       against substantial nonconformance to the published documentation at time
       of delivery. The Company has not experienced any material returns where
       it was under obligation to honor this standard warranty, and as such
       there is no warranty provision recorded in the consolidated financial
       statement.

       The Company's software license agreements generally include certain
       provisions for indemnifying customers against liabilities if the
       Company's software products infringe a third party's intellectual
       property rights. Furthermore, certain of the Company's software license
       agreements also include provisions indemnifying customers against
       liabilities in the event the Company breaches confidentiality. To date,
       the Company has not incurred any material costs as a result of such
       indemnifications and has not accrued any liabilities related to such
       obligations in these consolidated financial statements.

       Contingent Payments

       During fiscal 2005, the Company acquired RedDot (Note 2) and under the
       terms of the agreement, may be required to make further contingent
       payments which are estimated at $5,500, however, the actual amount may be
       higher.

       Letters of Credit and Guarantees

       As of September 30, 2005, the Company had various letters of credit and
       guarantees outstanding relating to leased premises and customer
       contracts, and had unused lines of credit, that total approximately
       $1,000.

       Other Contingencies

       The Company is subject to various claims and proceedings, which have been
       instituted against it during the normal course of business. Management
       believes that the disposition of the matters pending or asserted, for
       which provision has not been made, is not expected to have a material
       adverse effect on the financial position of the Company or its results of
       operations.


14.    FINANCIAL INSTRUMENTS

       Foreign exchange risk

       The Company's objective with respect to managing foreign currency
       exposure is to neutralize the impact of foreign currency exchange
       movements. To achieve this objective, the Company may, from time to time,
       enter into foreign currency transactions either on the spot or in foreign
       markets to hedge foreign currency receivables and payables. It is the
       Company's policy to enter into foreign exchange contracts only with major
       Canadian chartered banks and major international banks, and therefore the
       Company does not anticipate non-performance by these parties. As at
       September 30, 2005, the Company had no foreign exchange contracts
       outstanding. For the years ended September 30, 2005 and 2004 the Company
       recognized net foreign exchange translation losses of $2,156 and net
       foreign exchange translation gains of $2,219, respectively. These amounts
       have been charged or credited to sales and marketing expenses.



<PAGE>


       Concentration of credit risk

       Surplus cash is invested according to the Company's investment policy,
       which states the primary objective as the preservation of capital.
       Investment credit risk is managed by limitations placed on the grade of
       securities, diversification of issuers and limitations on terms to
       maturity. Cash and cash equivalents at September 30, 2005 and 2004 were
       invested in high quality money market instruments purchased through major
       banks and financial institutions. Short-term investments at September 30,
       2004 were invested primarily in commercial paper and money market funds.

       The Company markets and supports its products internationally, both
       directly and through resellers, and is not dependent on any single
       customer, group of customers or suppliers. Credit risk related to the
       Company's trade receivables is minimized due to its large customer base,
       geographical distribution and diversification of operations.

       Fair value of financial instruments

       The carrying values of the Company's financial instruments, including
       cash and cash equivalents, short-term investments, accounts receivable,
       other long-term debt, other liabilities, accounts payable and accrued
       liabilities approximate their fair values due to their short-term nature.


15.    SEGMENT INFORMATION

       The Company operates and manages its businesses in one industry segment -
       the computer software development industry. Within this business segment,
       the Company derives its revenue from two principal product families: (i)
       Hummingbird Enterprise; and, (ii) Hummingbird Connectivity. Hummingbird
       Enterprise is comprised of Hummingbird's solutions for document and
       content management, records management, knowledge management,
       collaboration, data integration and business intelligence. Hummingbird
       Connectivity includes the Company's software applications for accessing
       mission-critical back office applications and legacy data from Windows
       desktops.

       Sales by product line

                                                      2005            2004
       -------------------------------------------------------------------------
       Hummingbird Enterprise                     $169,108          $  150,195
       Hummingbird Connectivity                     66,994              70,029
       -------------------------------------------------------------------------
                                                 $ 236,102          $  220,224
       =========================================================================

       Sales and long-lived assets by country of origin

       Sales                                             2005          2004
       -------------------------------------------------------------------------

       U.S.A.                                       $ 107,951      $ 108,223
       Canada                                          18,501         18,562
       U.K.                                            37,964         35,503
       Rest of Europe                                  58,828         51,530
       Asia Pacific                                    12,858          6,406
       ------------------------------------------------------------------------
                                                    $ 236,102      $ 220,224
       ========================================================================



<PAGE>



       Long- lived assets                                2005           2004
       ------------------------------------------------------------------------
       Fixed assets and other assets
          U.S.A.                                      $ 1,366        $ 1,899
          Canada                                        8,558         10,281
          U.K.                                            970          2,266
          Rest of Europe                                2,412          1,643
          Asia Pacific                                    346            385
       -------------------------------------------------------------------------
       Total fixed assets and other assets             13,652         16,474
       Goodwill and other intangible assets           204,002        157,784
       =========================================================================
                                                   $  217,654      $ 174,258
       =========================================================================

       It is not practicable to allocate goodwill and other intangible assets by
       country of origin.


       Geographical distribution of sales by customer location was approximately
       as follows:

                                          2005                2004
       ------------------------------------------------------------------------

       U.S.A.                         $ 106,983            $ 107,503
       Canada                            13,484               13,703
       U.K.                              40,701               38,951
       Rest of Europe                    56,091               48,085
       Other                             18,843               11,982
       -------------------------------------------------------------------------
                                      $ 236,102            $ 220,224
       =========================================================================



16.    NEW ACCOUNTING PRONOUNCEMENTS

       Accounting for Stock-Based Compensation -SFAS 123R

       In 2004, the FASB revised SFAS No.123 (SFAS 123R), which received
       approval in January 2005 and requires the recognition of the fair values
       of the stock options granted as compensation expense over the vesting
       period. Prior to this, as permitted by SFAS 123, the Company did not
       adopt the provisions in respect of the fair value based method of
       accounting for all of the employee stock-based transactions and, instead,
       included the required pro forma disclosure as if this method had been
       applied for options granted. SFAS No. 123R permits public companies to
       adopt its requirements using one of two methods:

       o Modified prospective method: Compensation cost is recognized beginning
         with the effective date of adoption (a) based on the requirements of
         SFAS 123R for all share-based payments granted after the effective date
         of adoption and (b) based on the requirements of Statement 123 for all
         awards granted to employees prior to the effective date of adoption
         that remain unvested on the date of adoption.

       o Modified retrospective method: Includes the requirements of the
         modified prospective method described above, but also permits
         restatement using amounts previously disclosed under the pro forma
         provisions of SFAS 123 either for (a) all prior periods presented or
         (b) prior interim periods of the year of adoption.

       Beginning October 1, 2005, the Company will adopt SFAS 123R using the
       modified prospective method. The impact of the retroactive adjustment on
       the Company's financial statements is disclosed in Note 1.



       Inventory Costs - SFAS No. 151

       In December 2004, the FASB issued SFAS No. 151, which clarifies the
       accounting for unusual costs and the allocation of fixed production
       costs. For the Company, this standard is effective for fiscal year 2006.
       The Company has determined that this standard will not have a material
       impact on the consolidated financial statements.



<PAGE>

       Exchange of Non-Monetary Assets - SFAS No. 153

       In December 2004, the FASB issued SFAS No. 153, as an amendment to APB
       Opinion No. 29. SFAS No. 153 provides guidance on the measurement of
       exchanges of non-monetary assets, with exceptions for exchanges that do
       not have commercial substance. Under SFAS No. 153, a non-monetary
       exchange has commercial substance if, as a result of the exchange, the
       future cash flows of an entity are expected to change significantly.
       Under SFAS No. 153, a non-monetary exchange is measured based on the fair
       values of the assets exchanged. If fair value is not determinable, the
       exchange lacks commercial substance or the exchange is to facilitate
       sales to customers, a non-monetary exchange is measured based on the
       recorded amount of the non-monetary asset relinquished. For the Company,
       SFAS No. 153 was effective for non-monetary exchanges beginning on July
       1, 2005. This standard did not have a material impact on the consolidated
       financial statements.


       Accounting Changes and Error Corrections - SFAS No. 154

       In May 2005, the FASB issued SFAS No. 154, which replaces APB Opinion No.
       20, "Accounting Changes", and SFAS No. 3, "Reporting Accounting Changes
       in Interim Financial Statements - An Amendment of APB Opinion No. 28".
       SFAS No.154 provides guidance on the accounting for and reporting of
       changes in accounting principles and error corrections. SFAS No. 154
       requires retrospective application to prior period financial statements
       of voluntary changes in accounting principle and changes required by new
       accounting standards when the standard does not include specific
       transition provisions, unless it is impracticable to do so. SFAS No. 154
       also requires certain disclosures for restatements due to corrections of
       an error. For the Company, SFAS No. 154 will be effective for accounting
       changes and corrections of errors made in its fiscal year beginning on
       October 1, 2006. The impact that the adoption of SFAS No. 154 will have
       on the Company's consolidated financial statements will depend on the
       nature of future accounting changes adopted by the Company and the nature
       of transitional guidance provided in future accounting pronouncements by
       the FASB.


       Consolidation of Variable Interest Entities - FSP FIN 46R-5

       In March 2005, the FASB issued FASB Staff Position ("FSP") No. 46(R)-5,
       "Implicit Variable Interests" under FASB Interpretation ("FIN") No. 46
       (revised December 2003), "Consolidation of Variable Interest Entities"
       ("FSP FIN 46R-5"). FSP FIN 46R-5 provides guidance for a reporting
       enterprise on whether it holds an implicit variable interest in Variable
       Interest Entities ("VIEs") or potential VIEs when specific conditions
       exist. This FSP is effective in the first period beginning after March 3,
       2005 in accordance with the transition provisions of FIN 46 (Revised
       2003), "Consolidation of Variable Interest Entities - an Interpretation
       of Accounting Research Bulletin No. 51" ("FIN 46R"). The Company was
       required to adopt FIN 46-R at the end of the first interim or annual
       reporting period ending after March 15, 2004. The Company does not have
       any arrangements with variable interest entities that require
       consolidation of their financial information, or disclosure thereof, in
       the financial statements.





<PAGE>



17.    DIFFERENCES FROM CANADIAN GENERALLY ACCEPTED ACCOUNTING PRINCIPLES
       (CANADIAN GAAP)


       These consolidated financial statements have been prepared in accordance
       with U.S. GAAP. The Company is also a reporting issuer in each of the
       provinces and territories of Canada and, prior to the current fiscal
       year, had prepared financial statements and Management's Discussion and
       Analysis also in accordance with Canadian GAAP. According to new Canadian
       securities regulations, issuers that are required to file reports with
       the U.S. Securities and Exchange Commission (SEC) can satisfy their
       Canadian continuous disclosure compliance requirements by using financial
       statements prepared in accordance with U.S. GAAP, provided that a
       reconciliation between U.S. GAAP and Canadian GAAP is included in the
       notes to the financial statements. The significant differences between
       U.S. GAAP and Canadian GAAP, and their effect on the consolidated
       financial statements of the Company, are described below:


       Condensed Balance Sheets
<TABLE>
<CAPTION>


                                     September 30, 2005                                        September 30, 2004
       --------------------------------------------------------------------------------------------------------------------------


                        U.S. GAAP       Adjustments         Canadian GAAP       U.S. GAAP       Adjustments     Canadian GAAP


       Assets

<S>                        <C>            <C>               <C>               <C>           <C>                  <C>
       Current assets      $ 160,976      $    -            $ 160,976         $ 197,392             -            $ 197,392
       Other assets            2,068           -                2,068             3,150             -                3,150
       Fixed assets           11,584           -               11,584            13,324             -               13,324
       Goodwill and
        other intangible
        assets (a, d)        204,002     (19,193)             184,809           157,784       (19,880)             137,904
       --------------------------------------------------------------------------------------------------------------------------

       Total assets        $ 378,630   $ (19,193)           $ 359,437         $ 371,650     $ (19,880)           $ 351,770
       --------------------------------------------------------------------------------------------------------------------------


       Liabilities and shareholders' equity

       Current liabilities $ 109,004      $    -            $ 109,004         $  93,294     $       -            $  93,294
        Deferred income
           taxes (b)          10,308       2,887               13,195            11,398         2,778               14,176
        Other long-term
           liabilities            67           -                   67             1,038             -                1,038
       --------------------------------------------------------------------------------------------------------------------------
       Total liabilities     119,379       2,887              122,266           105,730         2,778              108,508
       Total shareholders'
        equity (a, b, c, d)  259,251     (22,080)             237,171           265,920       (22,658)             243,262
       Total liabilities
       and shareholders'
       equity               $378,630   $ (19,193)           $ 359,437         $ 371,650     $ (19,880)           $ 351,770


</TABLE>





<PAGE>


       Reconciliation of Net (Loss) Income
<TABLE>
<CAPTION>


                                                                        September 30     September 30
                                                                             2005            2004
      ----------------------------------------------------------------------------------------------

<S>                                                                      <C>                <C>
       Net (loss) income, U.S. GAAP                                    $ (5,839)           $ 6,871

         Amortization of other intangible assets (a, d)                  (3,303)            (2,997)
         In-process research and development expense (a)                  2,850                  -
         Income taxes (b)                                                 1,031                891
         Stock based compensation expense (c)                            (2,970)            (3,473)
      ----------------------------------------------------------------------------------------------
       Net (loss) income, Canadian GAAP                                $ (8,231)           $ 1,292
      ==============================================================================================

       Basic (loss) earnings per share, Canadian GAAP                  $  (0.47)           $  0.07
       ---------------------------------------------------------------------------------------------

       Diluted (loss) earnings per share, Canadian GAAP           $       (0.47)           $  0.07
      ==============================================================================================
</TABLE>



      Consolidated Statements of Cash Flows


       There are no significant differences with respect to the consolidated
       statements of cash flows between U.S. GAAP and Canadian GAAP.




       Explanation of U.S. GAAP and Canadian GAAP Differences

       A description of differences between U.S. GAAP and Canadian GAAP, in
       terms of the impact on the Company's consolidated financial statements,
       is presented below.


       a. Acquired in-process research and development

       In accordance with Canadian GAAP, it is the Company's policy to
       capitalize the amounts representing the fair value of acquired in-process
       research and development and amortize such amounts over their estimated
       useful lives of 2 to 8 years. Under U.S. GAAP, acquired in-process
       research and development is expensed, net of the benefit of tax loss
       carry forwards, at the time of the original accounting for the
       acquisition. For the years ended September 30, 2005 and 2004, acquired
       in-process research and development expensed under U.S. GAAP was $2,850
       and $nil, respectively.

       This difference in the accounting treatment also results in a different
       amortization charge to the consolidated statements of earnings, and
       accordingly the carrying amount of goodwill and other intangible assets
       on the consolidated balance sheets. For the years ended September 30,
       2005 and 2004, amortization of acquired in-process research and
       development charged to the consolidated statements of earnings under
       Canadian GAAP was $3,303 and $2,997, respectively.


       b. Deferred income taxes related to acquired in-process research and
       development

       There is a difference in income tax expense and deferred income taxes
       relating to the different accounting treatment under U.S. GAAP and
       Canadian GAAP of acquired in-process research and development as
       discussed above in (a) "Acquired in-process research and development".
       The capitalization of acquired in-process research and development
       creates an additional deferred income tax liability under Canadian GAAP.
       The periodic amortization of the acquired in-process research and
       development decreases the income tax provision under Canadian GAAP. For
       fiscal 2005, under Canadian GAAP, the impact of the amortization of the
       acquired in-process research and development was to increase income tax
       recovery by $1,031 (decreased income tax expense by $891 for fiscal
       2004).




<PAGE>


       c. Stock-based compensation

       Under U.S. GAAP, companies may choose between the intrinsic value method
       and fair value method of accounting for stock-based compensation. The
       Company has elected to account for stock-based compensation using the
       intrinsic value method in accordance with APB 25 and to disclose the pro
       forma effect of recording compensation expense under the fair value
       method. This disclosure can be found in Note 1(b) (xvii) to these
       consolidated financial statements.

       Under Canadian GAAP, the Company accounts for stock-based compensation in
       accordance with the Canadian Institute of Chartered Accountants (CICA)
       Handbook Section 3870, "Stock-based Compensation and Other Stock-based
       Payments". Section 3870 was revised in September 2003 and requires that
       all stock-based awards made to employees, consultants or directors be
       measured and recognized using a fair value based method, such as the
       Black-Scholes option pricing model. Previously the standard encouraged
       the use of a fair value based method for all awards granted to employees,
       but only required the use of a fair value based method for direct awards
       of stock, stock appreciation rights, and awards that called for
       settlement in cash or other assets.


       Beginning October 1, 2004, the Company adopted this new recommendation
       retroactively for Canadian GAAP purposes. As a result, opening retained
       earnings as at October 1, 2004 has been decreased to reflect the charge
       of the fair value of $45,084. This amount consists of $12,816 recorded as
       share capital for the fair value of options exercised, and $32,268,
       recorded as contributed surplus, for the fair value of options cancelled
       or expired after the vesting period and the amortized value of any
       currently outstanding options.

       The Company expensed $2,970 for fiscal 2005 ($3,473 for fiscal 2004)
       under Canadian GAAP, representing the fair value of stock options granted
       to employees. As discussed, in Note 16, the adoption of revised SFAS No.
       123R in fiscal 2006 will essentially conform the accounting treatment
       under U.S. GAAP with the accounting treatment under Canadian GAAP for
       stock option grants, but some differences may remain.


       d. Business combinations


       During January 1998, the Company acquired Andyne Computing Limited
       ("Andyne") through an exchange of 1,520,406 common shares of the Company,
       plus a nominal cash amount for fractional shares, for 8,110,000
       outstanding shares and stock options of Andyne. Under U.S. GAAP, this
       acquisition was accounted for under the pooling of interests method and
       accordingly, the Company's consolidated financial statements for all
       periods prior to the acquisition were restated to include the financial
       statements of Andyne. Under Canadian GAAP, this acquisition was accounted
       for by the purchase method and therefore the purchase consideration of
       $48,555, representing the fair value of 1,520,406 common shares of the
       Company issued in connection with this transaction, was recorded in the
       Company's share capital.

       In addition, at the beginning of fiscal 2001, in accordance with CICA
       Handbook Section 3465 "Income Taxes", the Company adopted the liability
       method of tax allocation for accounting for income taxes. Up until the
       end of fiscal 2000, the Company followed the deferred method of tax
       allocation in accounting for income taxes under Canadian GAAP. The
       Company adopted the liability method retroactively, but for those
       business combinations that occurred prior to the adoption of this
       section, the Company concluded that a determination of the related
       adjustment to the assets and liabilities acquired was impractical.
       Consequently, none of those assets or liabilities were adjusted, and the
       cumulative effect of the adoption was to decrease retained earnings and
       increase deferred income taxes by $48,225. Under U.S. GAAP, the Company
       had initially recorded deferred income taxes relating to these
       acquisitions as an increase to goodwill and other intangible assets.



       e. Investment tax credits


       Under Canadian GAAP, investment tax credits are deducted from research
       and development expense, whereas, under U.S. GAAP, these amounts are
       deducted from the income tax expense. For fiscal 2005, this difference
       resulted in a decrease in loss before income taxes of $2,325 with a
       corresponding decrease in the income tax recovery under Canadian GAAP.
       For fiscal 2004, the impact of this difference was to increase income
       before income taxes by $2,100 with a corresponding increase in the income
       tax expense under Canadian GAAP. These differences did not result in any
       differences in net (loss) income for fiscal 2005 and 2004.









<PAGE>

                                                                Document No. 3

<PAGE>



Management's Discussion and Analysis of Financial
Condition and Results of Operations ("MD&A")

HUMMINGBIRD LTD.


Year ended September 30, 2005














<PAGE>

Management's Discussion and Analysis of Financial Condition
and Results of Operations ("MD&A")

Forward-Looking Statements

The following discussion contains forward-looking statements that are subject
to significant risks and uncertainties. A number of important factors could
cause actual results to differ materially from historical results and
percentages, and results anticipated by the forward-looking statements
contained in the following discussion. Such factors and risks include, but are
not limited to, intense competition and rapid change in the enterprise
software industry, including price and product feature competition; the
introduction of new products by existing or new competitors; the economic
environment; dependence on distributors and the emergence of new distribution
channels; the timing and customer acceptance of new or upgraded products; and
the ability to develop, market, support and acquire new products in an
environment of rapidly changing technology. Readers should carefully review
the risks described herein and in the other documents Hummingbird Ltd.
("Hummingbird" or the "Company") files from time to time with the United
States Securities and Exchange Commission or the various Securities
Commissions and similar regulatory authorities in Canada.

Overview

This MD&A is dated November 7, 2005 and should be read in conjunction with the
Company's September 30, 2005 annual audited consolidated financial statements
and notes thereto. The Company reports its annual audited consolidated
financial statements and notes in U.S. dollars, and in accordance with U.S.
generally accepted accounting principles or "U.S. GAAP" (collectively,
"Consolidated Financial Statements"). As required by Canadian Securities
Administrators, a reconciliation of the Consolidated Financial Statements,
prepared under U.S. GAAP to Canadian generally accepted accounting principles
("Canadian GAAP") is included in Note 17 to the Consolidated Financial
Statements. The Consolidated Financial Statements are included in the Annual
Report to Shareholders. Information relating to the Company, including its
most recent annual information form, is available on SEDAR at www.sedar.com.

The financial information in this MD&A has been prepared in accordance with
U.S. GAAP, unless otherwise specified. Unless otherwise indicated, all dollar
amounts in this MD&A are in U.S. dollars.

The Company is a leading global provider of enterprise software solutions.
Hummingbird's enterprise content management ("ECM") solutions enable
organizations to manage the lifecycle of enterprise content from creation to
disposition. Hummingbird Enterprise, the flagship product, is an integrated
suite of software applications that allows users to extract both structured
and unstructured data from disparate corporate locations to access, manage,
share, find and analyze data, and efficiently manage all content for a single
point of access and administration. The Company's solutions enable users to
address critical business needs, such as information management, business
continuity, disaster recovery, compliance and risk management. Hummingbird's
ECM solution is rooted in document management, offering complete capabilities
in records management, knowledge management, collaboration, data integration
and business intelligence, among others. The Company's host access product
suite includes software applications for accessing mission-critical back
office applications and related data from the majority of today's systems,
including mainframe, AS/400, Linux and UNIX platform environments.
Hummingbird's products are marketed and sold through a direct corporate sales
force and a worldwide network of partners, resellers, and distributors.


<PAGE>

Acquisition History

On June 21, 2005, the Company acquired 100% of the issued and outstanding
shares of RedDot Solutions AG ("RedDot").

RedDot, based in Germany, was a privately held content management software
company specializing in delivering simple-to-install and easy-to-use content
management solutions to mid-size enterprises. RedDot's solutions create and
manage the content that drives business. RedDot has over 1,300 clients
globally with operations in the U.S.A, the United Kingdom, Germany, Australia,
Italy and Poland.

The acquisition of RedDot has created a strong foundation for product
integration and market development to address the needs of mutual customers of
RedDot and the Company.

The Company paid $47.9 million as cash consideration for RedDot. In addition,
depending upon the financial performance of RedDot for their fiscal year
ending December 31, 2005, the Company may be required to make two contingent
payments; (a) up to $1.2 million on maintaining certain profitability plus (b)
up to 2.3 times of revenue in excess of an agreed revenue amount provided
certain profitability is achieved. The aggregate estimated amount of the
contingent consideration is $5.5 million, however, the actual amount may be
higher. Any future payments in connection with this acquisition will be
accounted for as goodwill, in accordance to U.S. GAAP.

In accordance with Emerging Issues Task Force (EITF) No. 95-3, "Recognition of
Liabilities in Connection with a Business Combination", the Company recorded
$2.6 million ($3.2 million less tax benefit of $0.6 million) in the purchase
price of the RedDot acquisition as transaction costs. This amount represents
severance and related charges and transaction costs including professional
fees. Included in the gross amount is a restructuring accrual for $1.4 million
which relates to staff termination costs for RedDot employees worldwide. It is
expected that this restructuring plan will be completed by the end of fiscal
2006. Of the total liabilities accrued in connection with the RedDot's
acquisition, $2.5 million remains accrued as at September 30, 2005.

Intangible assets of $56.0 million, including goodwill of $35.2 million, were
recorded as the fair value of assets and liabilities acquired. In addition to
this, a fair value of acquired in-process research and development of $2.8
million was written off at the time of the original accounting for the
acquisition.

The Company did not have any acquisitions during the fiscal year 2004.

In fiscal year 2003, the Company acquired all the issued and outstanding
shares of the following companies:
<TABLE>
<CAPTION>

                                             Key Automation Nederland
                              Legal Key       B.V. and its affiliate     Kramer Lee    Valid Information
(amounts in thousands of  Technologies, Inc.        Dispro B.V.         & Associates    Systems Limited
 U.S. dollars)               ("LegalKEY")       ("Key Automation")       ("Kramer")        ("Valid")
------------------------------------------------------------------------------------------------------------

<S>                         <C>                   <C>                  <C>                <C>
Date of acquisition         March 10, 2003        March 26, 2003       June 26, 2003      July 1, 2003
Principal location              U.S.A.              Netherlands             U.K.              U.K.
Original purchase price        $ 4,623                $ 9,350             $ 6,131           $ 17,715
Additional contingent
 consideration paid            $ 1,633                $     -             $     -           $ 14,989
</TABLE>



Under the terms of each acquisition, contingent consideration payments were
made based on the agreed upon future financial performance of each acquired
entity.

<PAGE>

During the fiscal year 2005, the Company paid the final contingent
consideration of $0.8 million to the former shareholders of LegalKEY, which
was accounted for as an addition to goodwill, and paid $11.2 million to the
former shareholders of Valid. Of this $11.2 million, $9.0 million was
accounted for as an addition to goodwill and the balance of $2.2 million was
treated as compensation expense and recorded in other charges.

During the fiscal year 2004, the Company paid contingent consideration of $0.8
million to the former shareholders of LegalKEY and $3.7 million to the former
shareholders of Valid based upon their respective financial performances.
These payments were recorded as an addition to goodwill.



Critical Accounting Policies and Estimates

The discussions and analysis of the Company's financial condition and results
of operations are based upon the Company's consolidated financial statements,
which have been prepared in accordance with U.S. GAAP. The Company ceased to
prepare its financial statements in accordance with Canadian GAAP commencing
with the September 30, 2005 annual audited consolidated financial statements,
as permitted by Canadian Securities Administrators. The preparation of the
financial statements in accordance with U.S. GAAP requires management to make
certain estimates, judgments and assumptions. Management continually evaluates
these estimates, judgments and assumptions. Management believes that the
estimates, judgments and assumptions upon which it relies are reasonable based
upon information available to management at the time that these estimates,
judgments and assumptions are made. These estimates, judgments and assumptions
can affect the reported amounts of assets and liabilities as of the date of
the consolidated financial statements as well as the reported amounts of
revenues and expenses during the periods presented. To the extent there are
material differences between these estimates, judgments or assumptions and
actual results, the Company's consolidated financial statements will be
affected. The accounting policies that reflect management's more significant
estimates, judgments and assumptions and which management believes are the
most critical to aid in fully understanding and evaluating the reported
financial results include the following:

Revenue recognition

The Company follows the provisions of Statement of Position (SOP) 97-2,
"Software Revenue Recognition" and Staff Accounting Bulletin (SAB) 104,
"Revenue Recognition in Financial Statements." Revenue is recognized from the
sale of product and software licenses when delivery has occurred based on
purchase orders, contracts or other documentary evidence, provided that
collection of the resulting receivable is deemed probable by management. A
provision is made for estimated sales returns and other insignificant vendor
obligations. Revenue from post contract customer support is recognized ratably
over the period that the customer support services are provided, which is
generally one year. The amount of revenue allocated to this undelivered
service is based on the vendor-specific objective evidence of its fair value
using the residual method. Under the residual method, the total fair value of
the undelivered service, as indicated by vendor-specific objective evidence,
is recorded as unearned, and the difference between the total contract fee and
the amount recorded as unearned for the undelivered service is recognized as
revenue related to delivered elements of the contract. Revenues from
consulting, training and other services are recognized as services are
performed. Deferred revenue represents unearned income associated with support
agreements, software license revenue where significant vendor obligations
remain and any other situations where payments are received in advance of
revenue recognition.

Allowance for doubtful accounts

The Company records an allowance for doubtful accounts related to accounts
receivable that are considered to be impaired reflecting the inability of its
customers to make required payments. The allowance is based on the Company's
knowledge of the financial condition of its customers, the aging of the
receivables, the current business environment, customer and industry
concentrations, and historical experience. A change in one or more of these
factors could impact the estimated allowance and provision for bad debts
recorded.

<PAGE>

Goodwill

The Company follows the United States Financial Accounting Standard ("FASB"),
Statements of Financial Accounting Standards ("SFAS") No. 141 "Business
Combinations" and SFAS No. 142 "Goodwill and Other Intangible Assets".
Accordingly, assets acquired and liabilities assumed are recorded at their
estimated fair values at the date of the acquisition. The results of
operations are included in our financial statements subsequent to the dates of
acquisition.

Goodwill recorded on acquisition is not amortized, but is instead subject to
an annual impairment test of all recorded goodwill. This annual test is a
two-step process; the first step will test the goodwill for impairment and the
second step, if required, will measure the impairment. The test is performed
on August 1 of each year, and more frequently if events or changes in
circumstances indicate that goodwill may be impaired. Goodwill is tested for
impairment at a level of reporting referred to as a reporting unit. The
Company as a whole is considered one reporting unit. The first step of the
test compares the fair value of the net assets to the carrying value, using
various methods and indicators. One of the tests used is to compare the fair
value of the outstanding shares on the NASDAQ National Market Site to the
carrying value of the Company's net assets, since quoted market prices in
active markets are considered to be the best evidence of fair value. If the
carrying value exceeds the fair value, the second step would be performed to
compare the implied fair value of the goodwill, which is the excess fair value
over the fair value assigned to other assets and liabilities, to the carrying
amount of goodwill. When the carrying amount of goodwill exceeds the implied
fair value of goodwill, an impairment loss is recognized.

The Company tests for impairment of goodwill on an annual basis as of August 1
and at any other time if events occur or circumstances changes that would
indicate that it is more likely than not that the fair value of goodwill is
less than its carrying amount. For fiscal years 2005 and 2004, the Company
determined there was no impairment of the recorded goodwill.

Income Taxes

The Company calculates its provision for income taxes in accordance with SFAS
No. 109, "Accounting for Income Taxes", which requires an asset and liability
approach to financial accounting for income taxes. This approach recognizes
the amount of taxes payable or refundable for the current year, as well as
deferred tax assets and liabilities for the future tax consequences of events
recognized in the financial statements and tax returns. Deferred income taxes
are adjusted to reflect the effects of enacted changes in tax laws or tax
rates.

In establishing the appropriate income tax valuation allowances, the Company
assesses the realizability of its net deferred tax assets quarterly and, based
on all available evidence, both positive and negative, determines whether it
is more likely than not that the net deferred tax assets, or a portion,
thereof will be realized.

Changes in accounting policy

There were no changes in accounting policies during the years ended September
30, 2005 and 2004.


<PAGE>

Results of Operations

Fiscal years ended September 30

<TABLE>
<CAPTION>

(U.S. dollars in thousands, except
per share data)                                       2005                           2004              % change
--------------------------------------------------------------------------------------------------    from fiscal
                                                                                                            2004
                                                   Actual      % of Sales      Actual    % of Sales      to 2005
                                     -----------------------------------  ------------------------ -------------

<S>                                              <C>             <C>          <C>          <C>             <C>
Sales                                            $ 236,102       100.0%       $220,224     100.0%          7.2%
Cost of sales                                       27,977        11.8%         26,062      11.8%          7.3%
----------------------------------------------------------------------------------------------------------------
Gross profit                                       208,125        88.2%        194,162      88.2%          7.2%
----------------------------------------------------------------------------------------------------------------
Expenses
  Sales and marketing                              106,276        45.0%         94,947      43.1%         11.9%
  Research and development                          46,392        19.7%         40,074      18.2%         15.8%
  General and administration                        24,434        10.3%         21,241       9.6%         15.0%
  Restructuring charges                             10,031         4.3%              -         -         100.0%
  Other charges                                      9,660         4.1%              -         -         100.0%
  Amortization of other intangible
   assets                                           19,630         8.3%         22,892      10.4%       (14.2%)
  In-process research and development                2,850         1.2%              -         -        100.0%
----------------------------------------------------------------------------------------------------------------
Total expenses                                     219,273        92.9%        179,154      81.4%         22.4%
----------------------------------------------------------------------------------------------------------------
Operating (loss) income                            (11,148)       (4.7%)        15,008       6.8%       (174.3%)
Interest and other income, net                       3,127         1.3%          1,405       0.6%        122.6%
----------------------------------------------------------------------------------------------------------------
(Loss) income before income taxes                   (8,021)       (3.4%)        16,413       7.4%       (148.9%)
Income tax (recovery) expense                       (2,182)       (1.0%)         9,542       4.3%       (122.9%)
----------------------------------------------------------------------------------------------------------------
Net (loss) income                                $  (5,839)       (2.4%)       $ 6,871       3.1%       (185.0%)
----------------------------------------------------------------------------------------------------------------

Basic (loss) earnings per share                  $  (0.33)                      $ 0.39                  (184.6%)
----------------------------------------------------------------------------------------------------------------
Diluted (loss) earnings per share                $  (0.33)                      $ 0.39                  (184.6%)
----------------------------------------------------------------------------------------------------------------
</TABLE>





<PAGE>

Results of Operations

Sales of $236.1 million for the fiscal year 2005 represent a 7.2% increase
from $220.2 million for the fiscal year 2004. Loss before income taxes was
$8.0 million for the current fiscal year, compared to income before income
taxes of $16.4 million in the last year. Net loss for the year ended September
30, 2005 was $5.8 million, compared to net income of $6.9 million in the year
ended September 30, 2004. Basic loss per share and diluted loss per share were
$0.33 for the current fiscal year compared to basic and diluted earnings per
share of $0.39 in fiscal 2004.

Sales

The Company generates revenues through the sale of software licenses, related
support and maintenance, and professional services, including training,
consulting and implementation of Hummingbird software. The two principal
product families are Hummingbird Connectivity and Hummingbird Enterprise.
Hummingbird Connectivity is the Company's legacy business that includes
software applications for accessing mission-critical back office applications
and legacy data from Windows desktops. Hummingbird Enterprise primarily
encompasses the Company's document and content management, records management,
knowledge management, collaboration, data integration and business
intelligence software.


Sales from the Company's two product families were:


($US millions)                         2005         2004       % change
                                                               from 2004
-------------------------------- -------------- ------------ --------------
Hummingbird Enterprise                $ 169.1      $ 150.2            12.6%

Hummingbird Connectivity                 67.0         70.0            (4.3%)
-------------------------------- -------------- ------------ --------------
                                      $ 236.1      $ 220.2            7.2%
-------------------------------- -------------- ------------ --------------

The fiscal 2005 sales of the Company's Hummingbird Enterprise product family
were $169.1 million or $18.9 million higher than the $150.2 million recorded
last year. Hummingbird Connectivity sales for the fiscal year 2005 were $67.0
million versus $70.0 million in the previous year.

The increase in Hummingbird Enterprise sales was mainly due to a strong
selling effort to both new and existing customers, further market recognition
of the product, and additional revenue from the inclusion of RedDot.
Consistent with our product focus, we believe that the emerging trend in the
industry is towards enterprise wide business solutions and we expect sales
from Hummingbird Enterprise to continue to increase as a percentage of the
Company's total revenue. Sales from Hummingbird Connectivity were down
slightly from fiscal 2004. Hummingbird Connectivity is a mature product and
the customer base for this product family is fairly established.

Cost of Sales

Cost of sales falls into four broad categories: personnel costs related to the
provision of professional services; royalties to companies whose software is
embedded in the Company's products; third party products resold by the
Company; and, production costs, including product media, duplication, manuals
and packaging. For the year ended September 30, 2005, costs of sales increased
by $1.9 million or 7.3% to $28.0 million from $26.1 million in the last fiscal
year. The majority of this increase from fiscal 2004 is due to the effect of
changes in foreign exchange rates and the inclusion of RedDot's cost of sales.
As a percentage of sales, the current fiscal year's cost of sales remained
unchanged at 11.8% in comparison to fiscal 2004.


<PAGE>

Gross Profit

Gross profit increased by 7.2% or $14.0 million to $208.1 million in the
current fiscal year compared to $194.2 million for last year. The rise was
predominantly due to the higher level of sales. Gross profit in the current
fiscal year remained the same at 88.2% of sales in comparison with last fiscal
year.

Sales and Marketing Expenses

Sales and marketing expenses consist of costs of personnel, facilities, travel
and marketing activities in the form of advertising, promotions, seminars, and
trade shows. Sales and marketing expenses have increased to $106.3 million
from $94.9 million partly due to higher sales compensation and related costs,
the effect of changes in foreign exchange rates and the inclusion of RedDot's
expense. Included in the current year's expenses are foreign exchange
translation losses of $2.2 million, whereas, foreign exchange translation
gains of $2.2 million were credited to sales and marketing expenses in fiscal
2004. Sales and marketing expenses were 45.0% of sales in the current year,
slightly higher than the 43.1% of sales in the previous fiscal year.

Research and Development Expenses

Research and development expenses include personnel and related equipment
costs required to develop and to support the Company's products. In addition,
these expenses include facilities costs and licensing fees for technology used
in research and development efforts. The Company expenses all research costs
as they are incurred. Development costs are only capitalized if they meet the
criteria set out by generally accepted accounting principles. No development
costs have been capitalized in the current or previous fiscal years. The
Company believes that significant investments in research and development are
required to remain competitive.

Research and development expenses in fiscal 2005 of $46.4 million have
increased by 15.8% from the $40.1 million in the prior fiscal year. For the
current fiscal year, research and development expenses were 19.6% of sales,
higher than the 18.2% in fiscal 2004. The increase is due to increased
operational costs, the effect of changes in foreign exchange rates and the
inclusion of RedDot's expense.

General and Administration Expenses

General and administration expenses consist primarily of personnel costs and
overhead expenses relating to the Company's human resources, finance and
management information systems functions. In the current fiscal year, general
and administration expenses totaled $24.4 million, an increase of $3.2 million
or 15.0% from the $21.2 million incurred in the last fiscal year. General and
administrative expenses were 10.3% of sales in fiscal 2005, up from 9.6% in
fiscal 2004. The increase from fiscal 2004 is due to the effect of inflation
on costs, higher professional fees to ensure compliance with regulatory
requirements, the effect of changes in foreign exchange rates and the
inclusion of RedDot's expense.

Restructuring Charges

In fiscal year 2005, the Company recorded restructuring charges totaling $10.0
million.

In the first quarter of the current year, the Company reviewed its global
operations and in particular considered areas where there was an overlap of
its operations due to recent acquisitions. This review resulted in a
restructuring plan ("First Plan") to reduce the Company's cost structure and
to refocus its future operating strategy. As a result, restructuring charges
of $8.8 million relating to staffing costs in respect of 37 terminated
employees were recorded in fiscal 2005 under the First Plan. A significant
portion of the restructuring charge relates to a small group of employees.
Some of these severance payments are currently in dispute, and the amount
ultimately paid may be higher or lower than the amount accrued in these
financial statements.


<PAGE>

Later in the fiscal year, as part of the continuous review of its global
operations, the Company believed that there were still some areas where the
cost structure could be reduced to achieve further efficiencies in operations.
Pursuant to this review, it was determined a second restructuring plan
("Second Plan") was required. As a result, restructuring charges of $1.2
million, relating to staff costs in respect of an additional 45 terminated
employees, were recorded under the Second Plan during the year ended September
30, 2005.

The First Plan is expected to be completed during the first six months of
fiscal year 2006. The Second Plan is expected to be completed by the end of
fiscal year 2006.

There were no restructuring charges recorded in fiscal 2004.

Other Charges

The Company recorded other charges in the amount of $9.7 million during the
year ended September 30, 2005 as follows:

     a.  Retiring allowances and special payments, including payroll taxes,
         provided to certain senior management of $4.1 million.

     b.  Corporate charges relating to acquisitions and other development
         initiatives of $1.6 million.

     c.  Other costs relating to the write down of furniture and fixtures,
         laboratory equipment and the write off of certain receivables of $0.6
         million. In addition, the Company had various recoverable amounts
         representing primarily legacy sales tax receivables resulting from
         acquired companies and the periods of integration of these companies.
         During the year management completed an analysis of these amounts and
         determined that an allowance of $1.1 million was required.

     d.  Contingent consideration of $2.2 million paid to certain employees of
         Valid, under the terms of the acquisition, upon Valid achieving
         agreed upon financial performance.

Amortization of Other Intangible Assets

Amortization of other intangible assets expense consists of the amortization
of intangibles with definite lives. These amounts are being amortized over
periods ranging from one to ten years. In the year ended September 30, 2005,
amortization charge decreased to $19.6 million compared to $22.9 million in
the year ended September 30, 2004. The decrease is due to certain intangibles
becoming fully amortized.

In-process Research and Development Expense

The estimated fair value of acquired in-process research and development of
$2.8 million from the acquisition of RedDot was expensed in the current fiscal
year, as the technological feasibility of the project had not been achieved
and no alternative future uses had been established. There were no
acquisitions in the last fiscal year, and as such, no comparable in-process
research and development expense.

Interest and Other Income, Net

Interest and other income primarily represent the netting of interest income
and expense. Interest and other income for the year ended September 30, 2005
increased to $3.1 million from $1.4 million in the year ended September 30,
2004. This increase was due to the effect of a higher balance of available
cash for investing during the first nine months of the financial year, as well
as an increase in short-term interest rates. The Company, as at September 30,
2005, has all of its invested cash in investments having an original maturity
term of less than 90 days. As a percentage of sales, interest and other income
in the current fiscal year increased to 1.3% from 0.6% in the last fiscal
year.



<PAGE>

Income Tax (Recovery) Expense

In the year ended September 30, 2005, the Company had an income tax recovery
for accounting purposes of $2.2 million on a loss before income taxes of $8.0
million, representing an effective tax rate of 27.2%. This low tax rate was
primarily due to the non-deductibility of the amortization of intangibles
arising largely from acquisitions, in-process research and development
acquired during the year, and contingent consideration paid relating to prior
year acquisitions and expensed in the year for accounting purposes with these
impacts partially offset by restructuring and other costs incurred in
predominantly higher tax rate jurisdictions. Excluding these impacts, the
effective tax rate would have been 34.5%. In fiscal 2004, the Company had a
tax expense for accounting purposes of $9.5 million on income before taxes of
$16.4 million, representing an effective tax rate of 58.1%. This high tax rate
was primarily due to the non-deductibility of the amortization of intangibles
arising largely from acquisitions. Also included in the income tax expense is
a deferred tax charge of $2.1 million resulting from the recognition of the
impact of income tax rate increases on the deferred tax balances set up at
previous rates. Excluding these impacts, the effective tax rate would be
37.0%.

Net (Loss) Income

In the year ended September 30, 2005, net loss was $5.8 million compared to
net income of $6.9 million in fiscal 2004.

The following are the main changes in the income statement for fiscal 2005
compared to fiscal 2004:

     o   Revenue for fiscal 2005 increased by $15.9 million.

     o   Income tax charge decreased by $11.7 million (for fiscal 2005 income
         tax recovery of $2.2 million compared to income tax expense of $9.5
         million for fiscal 2004).

     o   Restructuring charges of $10.0 million and other charges of $9.7
         million recorded in fiscal 2005. No similar charges were incurred in
         fiscal 2004.

     o   During fiscal 2005, the Company incurred total foreign exchange
         translation losses of $2.1 million, compared to gains of $2.2 million
         in the prior year. The foreign exchange translation losses or gains
         are charged or credited to sales and marketing expense.

     o   For fiscal 2005, cost of sales, sales and marketing, excluding the
         foreign exchange translation gains or losses, research and
         development, and general and administrative expenses increased,
         compared to fiscal 2004, by $1.9 million, $7.1 million, $6.4 million
         and $3.2 million respectively.

     o   In accordance with U.S. GAAP, $2.8 million, being the fair value of
         acquired in-process research and development on the acquisition of
         RedDot, was charged to the consolidated statement of earnings in the
         current year.

     o   Amortization of other intangible assets decreased by $3.3 million.


Basic and Diluted (Loss) Earnings Per Share

Basic loss per share for the year ended September 30, 2005 was $0.33 compared
to basic earnings per share of $0.39 in the fiscal 2004. The earnings per
share for the fiscal 2005 was based on a basic weighted average number of
shares of 17.46 million versus a basic weighted average number of shares of
17.56 million in the prior fiscal year.

Diluted loss per share for the current fiscal year was also $0.33 based on a
diluted weighted average number of shares of 17.46 million versus diluted
earnings per share of $0.39 based on a diluted weighted average number of
shares of 17.72 million in the previous fiscal year.



<PAGE>

Results under Canadian GAAP

In the year ended September 30, 2005 under Canadian GAAP, the Company recorded
a net loss of $8.2 million, resulting in basic and diluted loss per share of
$0.47, compared to a net income of $1.3 million and basic and diluted earnings
per share of $0.07 in fiscal 2004.

The difference in the results of operations under U.S. GAAP are related to the
treatment of acquired in-process research and development, stock-based
compensation and the related income tax effects thereon, which are explained
in more detail in note 17 of the annual audited consolidated financial
statements.

Liquidity and Capital Resources

Fiscal years ended September 30

<TABLE>
<CAPTION>

(U.S. dollars in thousands)
-------------------------------------------------------------------------------------------------
                                                                                   % change
                                                             2005       2004       from 2004
                                                      -------------------------------------------
<S>                                                       <C>        <C>                 <C>
Working capital                                           $ 51,972   $ 104,098      (50.1%)
Cash and cash equivalents, and short-term investments       84,997     130,486      (34.9%)
-------------------------------------------------------------------------------------------------
</TABLE>

Working capital for the Company decreased to $52.0 million at September 30,
2005 from $104.1 million at September 30, 2004. The acquisition of RedDot and
the final contingent consideration payments for the Valid acquisition were the
major reasons for this decline.

The Company had cash and cash equivalents and short-term investments of $85.0
million as at September 30, 2005 compared to $130.5 million as at September
30, 2004. The decrease in cash was primarily due to the acquisition of RedDot
in the third quarter of the current fiscal year. As of September 30, 2005, the
Company has all of its invested cash in investments having an original
maturity term of less than 90 days. Short-term investments consist primarily
of commercial paper and have an original term to maturity of greater than 90
days.

The Company had an operating cash inflow of $13.5 million during the current
year, down from the operating cash inflow of $38.8 million during fiscal 2004.
The decline in operating cash inflow for the current year compared to the
prior year was mainly due to the net loss of $5.8 million for the current
fiscal year compared to income of $6.9 million for the prior year. In addition
to this, changes in income taxes payable, accounts receivable, accounts
payable and accrued liabilities and deferred revenue also impacted the
operating cash flow.

Capital expenditures decreased to $2.6 million in the current year from $3.4
million in the previous fiscal year. These expenditures consisted primarily of
purchases of laboratory equipment, leasehold improvements, and furniture and
fixtures. Also during the current year, the Company disposed of a building for
net proceeds of $1.3 million.

The Company has issued and outstanding common shares totaling 17,418, 338 at
September 30, 2005 (September 30, 2004 - 17,448,279). During November 2004,
the Company received approval to commence a normal course issuer bid for up to
1,500,000 of its common shares. This bid will terminate on the earlier of
November 23, 2005 or the date on which the maximum number of shares approved
under this bid have been repurchased. Under this bid the Company repurchased
and cancelled 95,100 of its own shares at a cost of $1.9 million during the
current year. During the fiscal year 2004, the Company repurchased and
cancelled 215,300 shares for a total consideration of $4.7 million. These
shares were repurchased under a bid that was approved during November 2003 and
expired on November 16, 2004. The Company received $1.3 million from employees
exercising their stock options in the year ended September 30, 2005 (2004 -
$2.2 million). At September 30, 2005, there were 2,226,478 stock options
outstanding (September 30, 2004 - 2,639,241). One third of such stock options
become exercisable on each of the three anniversaries after the respective
date of grant. Stock options are exercisable for six years after their date of
grant.

<PAGE>

The Company has not paid any dividends in the fiscal years ended September 30,
2005 and 2004. The Company currently intends to retain earnings to finance the
growth and development of the Company's business and, therefore, does not
anticipate paying cash dividends in the foreseeable future.

Management believes that current cash balances together with cash flow from
operations will be sufficient to meet the cash requirements of working
capital, capital expenditures, and operating expenses for the next twelve
months. Management also believes that the Company's financial position
provides it with the flexibility to generate additional funds by either
borrowing or issuing equity to finance any acquisitions, within reason, that
cannot be managed with the Company's existing cash resources.


Financial Position

Cash and cash equivalents plus short-term investments decreased as at
September 30, 2005 by $45.5 million to $85.0 million compared to a balance of
$130.5 million as at September 30, 2004. The decrease in cash was primarily
due to the acquisition of RedDot and payment of contingent consideration for
the Valid acquisition, during the year, offset to a certain extent by the cash
generated from operations. There were no investments classified as short-term
investments as at September 30, 2005.

Accounts receivable were $66.8 million at the end of the current fiscal year
compared to $57.6 million as at September 30, 2004, representing an increase
of $9.2 million. The increase was due to the increased level of sales and
billing activity in the current year and the inclusion of RedDot.

Accounts payable and accrued liabilities were $34.0 million as at September
30, 2005, $13.6 million higher than the balance of $20.4 million as at
September 30, 2004. This increase was mainly due to the accrued restructuring
and other charges, accruals relating to the RedDot acquisition and the
inclusion of RedDot's liabilities.

Income taxes of $0.8 million were recoverable as at September 30, 2005, while
income taxes of $7.2 million were payable as at September 30, 2004. This
change was primarily due to the final payment of the taxes payable for the
September 30, 2004 taxation year being paid during fiscal 2005 and instalment
payments for fiscal 2005 more closely matching tax expense for the year.

Deferred revenue as at September 30, 2005 was $74.0 million versus $65.5
million as at September 30, 2004, an increase of $8.5 million. The rise was
mostly due to increased billing activity for maintenance and support contracts
as well as the deferred revenue balance from RedDot. Revenue for these items
is deferred and recognized over the maintenance and support contract period.

As at September 30, 2005, the Company had other long-term liabilities totaling
$1.1 million, compared to the $1.3 million at September 30, 2004. Other
long-term liabilities consists of the following:

(U.S. dollars in thousands)                    September 30,  September 30,
                                                    2005           2004
------------------------------------------------------------- -------------

Lease inducements                                   $ 172          $ 255
Retention money                                       831            831
Long-term debt is comprised of:
   Capital lease obligations                           58            164
   Term loans                                           3              -
------------------------------------------------------------- -------------
                                                  $ 1,064        $ 1,250
------------------------------------------------------------- -------------

The retention money relates to the Valid acquisition, and is payable to the
former shareholders of Valid in January 2006.

<PAGE>

Long-term debt is comprised of various capital lease obligations for office
equipment and automobiles, bearing interest from 10.0% to 15.0%, and is
secured by the underlying assets.

The Company has also entered into agreements related to operating leases for
premises, automobiles and equipment. The following table lists the Company's
contractual payments for its other long-term liabilities and lease commitments
as of September 30, 2005.

<TABLE>
<CAPTION>

(U.S. dollars in thousands)
--------------------------------------------------------------------------------------------------------------
                                               Payments due by period
--------------------------------------------------- ------------ ----------- ----------- ---------- ----------
                                                                  Less than      1 to 3    4 to 5
                                                          Total      1 year      years     years    Thereafter
--------------------------------------------------- ------------ ----------- ----------- ---------- ----------
<S>                                                      <C>          <C>         <C>        <C>        <C>
Capital lease obligations                                $   58       $  54       $   4      $   -      $   -
Term loans                                                    3           3           -          -          -
Retention money on Valid acquisition                        831         831           -          -          -
--------------------------------------------------- ------------ ----------- ----------- ---------- ----------
                                                            892         888           4          -          -
Operating leases                                         27,593       7,433      13,863      2,674      3,623
--------------------------------------------------- ------------ ----------- ----------- ---------- ----------
Total contractual cash obligations                      $28,485      $8,321     $13,867     $2,674     $3,623
--------------------------------------------------- ------------ ----------- ----------- ---------- ----------
</TABLE>



<PAGE>

Selected Historical Consolidated Financial Data

The selected consolidated financial data as of and for the three months ended
December 31, 2003 through September 30, 2005 are derived from our unaudited
interim consolidated financial statements. The selected consolidated financial
data as of September 30, 2002, 2003, 2004 and 2005 are derived from our
audited consolidated financial statements. Historical results are not
necessarily indicative of the financial position or results that may be
expected for any future period, or for a full year. Please read the selected
historical consolidated financial information set forth below together with
our historical consolidated financial statements and the related notes,
together with this Management's Discussion and Analysis of Financial Condition
and Results of Operations.

<TABLE>
<CAPTION>

                                                                     Three months ended
                                                                     ------------------
Selected Consolidated                Dec.31,    Mar.31,    June 30,   Sept.30,    Dec.31,    Mar.31,   June 30,   Sept.30,
Statements of Income Data             2003       2004       2004       2004        2004       2005       2005       2005
                                    ---------  --------   --------   --------    --------   --------   --------   --------
(U.S dollars in thousands,
    except per share data)
<S>                                 <C>        <C>        <C>        <C>         <C>        <C>        <C>        <C>
Sales                               $ 50,007   $ 54,664   $ 56,227   $ 59,326    $ 53,900   $ 54,256   $ 61,722   $ 66,224
Net (loss) income                     (1,297)     2,068      2,368      3,732      (1,729)    (1,213)    (1,874)    (1,023)

Diluted (loss) earnings per share      (0.07)      0.12       0.13       0.21       (0.10)     (0.07)     (0.11)     (0.06)
Diluted WA* shares outstanding        17,551     17,811     17,740     17,566      17,464     17,500     17,474     17,418



----------------------------------------------------------------------------------------------------------------------------

                                                                                  Years ended September 30,
                                                                                  -------------------------
Selected Consolidated Statements of Income Data                           2002         2003         2004          2005
(U.S. dollars in thousands, except per share data)                    -------------------------------------------------------
Sales                                                                  $ 180,400    $ 192,583     $ 220,224    $ 236,102
Net (loss) income                                                         (2,914)       3,720         6,871       (5,839)

Diluted (loss) earnings per share                                          (0.16)        0.21          0.39        (0.33)
Diluted WA* shares outstanding                                            18,305       17,928        17,720       17,464

    * - Weighted average, in thousands
-----------------------------------------------------------------------------------------------------------------------------



                                                                              As at
    Consolidated Balance Sheets       Dec.31,     Mar.31,    June.30,   Sept.30,   Dec.31,    Mar.31,    June 30,   Sept.30,
    Data (U.S. dollars in              2003        2004       2004        2004      2004       2005       2005        2005
    thousands)

    Cash, cash equivalents and        115,571     116,907    127,041    130,486    134,165    129,083     90,513      84,997
        short-term investments
    Working capital                    93,406      96,194    101,886    104,098    105,671    106,836     47,477      51,972
    Total assets                      366,474     368,442    367,734    371,650    371,489    365,344    383,707     378,630
    Other long-term liabilities         3,324       1,370      1,353      1,250      1,191      1,142      1,099       1,064
    Shareholders' equity              260,539     263,185    264,177    265,920    265,029    264,208    260,447     259,251

-----------------------------------------------------------------------------------------------------------------------------
</TABLE>

The Company's revenues have steadily increased year over year, since fiscal
2002. Quarterly revenues have followed a fairly consistent trend of building
each quarter, from the first through to the fourth. First quarter revenue,
over the same period, has always been down from the preceding fourth quarter.

As described in detail under acquisition history, during fiscal 2003 the
Company made four acquisitions and during fiscal 2005 the Company acquired
RedDot. These acquisitions, along with the noted increase in the Hummingbird
Enterprise business, have resulted in increased revenues. There has been a
corresponding increase in operating costs and amortization expense associated
with the acquisitions.

<PAGE>

The Company's annual share repurchase program has resulted in a steady
reduction in the weighted average number of shares outstanding.

The Company's cash, cash equivalents and short-term investments balance
normally increases quarter over quarter, but fell in the last half of fiscal
2005 with cash being used to acquire RedDot.

<PAGE>

Outlooks, Risks and Uncertainties That Could Affect Future Results

The Company believes that its success in the rapidly evolving market for
enterprise software depends largely upon the following factors:

   o identifying underserved segments of the market;

   o developing products that solve a prevalent business problem;

   o communicating the value proposition of its products to the appropriate
     audience;

   o effectively combining direct and partner-influenced distribution; and

   o ensuring the successful deployment and referenceability of its products.

These factors form the basis of the Company's ability to compete effectively
in a challenging and dynamic environment.

Past performance is not a guarantee of future performance. From time to time,
certain information provided by the Company or its employees may involve risks
and uncertainties, specifically, any statements relating to the Company's
expectations for the future sales of its products. Factors that may cause such
differences include, but are not limited to, the factors discussed below.
These factors, and others, are discussed from time to time in the Company's
filings with various regulatory authorities. Although management remains
optimistic about the Company's long-term prospects, the Company's future
results are subject to substantial risks and uncertainties.

Global Economic Slowdown

Since early fiscal 2001, the Company has witnessed the weakening of global
macro-economic conditions. This weakness affected information technology
spending patterns on a global basis, and as a result affected our ability to
forecast current and future periods revenues. In spite of the weakness in
economic activity, our customer base remains solid, and the Company remains
encouraged by the level of interest that the marketplace continues to show in
its offerings. The Company continues to expect to increase its market share
and is confident about achieving its long-term business goals.

Competition

The markets for the Company's products are intensely competitive and
significantly affected by new product introductions and other market
activities of industry participants. The Company expects competition to
persist, increase and intensify in the future as the markets for the Company's
products continue to develop and as additional companies enter each of its
markets. Numerous releases of products and services that compete with those of
the Company can be expected in the near future. There can be no assurance that
the Company will be able to compete effectively with current and future
competitors. If these or other competitors were to engage in aggressive
pricing policies with respect to other competing products, or significant
price competition were to otherwise develop, the Company would likely be
forced to lower its prices, which could have a material adverse affect on the
Company's business, operating results and financial condition.

Potential Acquisitions and Investments

The Company expects to continue to acquire or invest in businesses, products
and technologies that expand or complement the Company's current business or
products. Such acquisitions or investments may involve significant commitments
of financial or other resources of the Company. There can be no assurance that
any such acquisitions or investments will generate revenue, income or other
returns for the Company, or that financial or other resources committed to
such activities will not be lost. Such activities could also place additional
strains on the Company's administrative and operational resources and its
ability to manage growth.



<PAGE>

Management of Growth and Integration of Acquisitions

Over the past several years, the Company has experienced growth in sales and
business operations. The Company believes that continued growth of its product
lines and number of personnel is required to maintain its competitive
position. The Company has grown both organically and by acquisition in the
past and expects to continue to do so in the future. There can be no
assurances that the Company will complete any future acquisitions and, if
completed, such acquisitions will be successfully integrated into the Company.

The Company's growth has placed, and will likely continue to place, strains on
its resources and increased demands on its internal systems, procedures and
controls. If the Company completes future acquisitions, which is likely, the
need to integrate and manage the businesses acquired would increase the
demands on the Company's management, resources, systems, procedures and
controls. There can be no assurance that the Company's administrative
infrastructure, systems, procedures and controls will continue to adequately
support the Company's operations or that management will be able to achieve
the rapid, effective execution of the product and business initiatives
necessary to successfully penetrate the markets for the Company's products,
and successfully integrate any business acquisitions in the future. If the
Company is unable to manage growth effectively, the Company's business,
operating results and financial condition may be adversely affected.

Volatility in Stock Price

The market price of the Company's common shares can be highly volatile and
subject to fluctuations. These fluctuations in market price may continue due
to quarterly variations in operating results, announcements of technological
innovations or new products by the Company or its competitors, changes in
financial estimates by securities analysts or other events or factors. In
addition, the financial markets have experienced significant price
fluctuations that have particularly affected the market price of equity
securities of many high technology companies, and that have been unrelated to
the operating performance of such companies or have resulted from the failure
of the operating results of such companies to meet market expectations in a
particular quarter or year.

Foreign Currency Risk

The Company operates internationally and, accordingly, a portion of our
financial resources is held in currencies other than the United States dollar,
the functional currency of the Company. Further to this, the Company generates
revenues and incurs expenses in numerous currencies. The Company's exposure to
various currencies may change over time as the geographic mix of our worldwide
business changes. These currencies could be unfavorably impacted by global
developments, country specific events and many other factors. Consequently,
the Company's future results could be adversely affected by significant
foreign exchange fluctuations.

Environment and Market Risk

Sales are subject to some conditions outside the Company's control such as
economic cycles, the growth of complimentary businesses such as corporate
networks and software applications or events in specific industry verticals.
The Company currently generates approximately 28% of its revenues from its
Hummingbird Connectivity family of products, which holds a significant portion
of the market share in this space. The future growth opportunities therefore
could be limited in this business. On the other hand, the Company is a pioneer
in the ECM market with our Hummingbird Enterprise family of products, which is
an evolving and growing business. The liquidity and financial position of the
Company is a function of the decisions it will have to make to successfully
compete in these markets.

As the marketplace for the Company's products evolves, the Company's future
results could be impacted by a dependence on a few distributors and the
emergence of new distribution channels. In addition, the timing and customer
acceptance of new or upgraded products may also affect the Company's results
in the future.

<PAGE>

Potential Fluctuations in Quarterly Operating Results

The Company considers fluctuations in its quarterly earnings to have an impact
on its future financial position. The Company's expense levels are based in
part on its expectations of future orders and sales, and the Company may not
be able to adjust spending in a timely manner to compensate for any sales
shortfall.

Intellectual Property Rights

The Company operates in an international environment with approximately 46% of
its revenue derived from countries outside North America. Although the Company
makes every effort to protect its intellectual property rights, there can be
no guarantee that unlicensed copying of the Company's software will not take
place, especially in countries where software piracy laws and enforcement are
weak.

Personnel Significance

The Company's employees are a significant asset. Market forces and competitive
pressures may adversely impact the ability of the Company to recruit and
retain key qualified personnel.

Off Balance Sheet Arrangements

The Company has no off-balance sheet arrangements that have or are reasonably
likely to have a current or future material effect on our financial condition,
changes in financial condition, revenues or expenses, results of operations,
liquidity, capital expenditures or capital resources.

Financial Instruments

The Company did not enter into any derivative contracts during the years ended
September 30, 2005 and 2004. As at September 30, 2005 and 2004 there were no
outstanding derivative instruments.

Related Party Transactions

The Company has not engaged in any transactions that would be considered
related party transactions.

Recent Accounting Pronouncement

Accounting for Stock-Based Compensation - SFAS 123R

In 2004, the FASB revised SFAS No.123 (SFAS 123R), which received approval in
January 2005 and requires the recognition of the fair values of the stock
options granted as compensation expense over the vesting period. Prior to
this, as permitted by SFAS 123, the Company did not adopt the provisions in
respect of the fair value based method of accounting for all of the employee
stock-based transactions and, instead, included the required pro forma
disclosure as if this method had been applied for options granted. SFAS No.
123R permits public companies to adopt its requirements using one of two
methods:

o Modified prospective method: Compensation cost is recognized beginning with
the effective date of adoption (a) based on the requirements of SFAS 123R for
all share-based payments granted after the effective date of adoption and (b)
based on the requirements of Statement 123 for all awards granted to employees
prior to the effective date of adoption that remain unvested on the date of
adoption.

o Modified retrospective method: Includes the requirements of the modified
prospective method described above, but also permits restatement using amounts
previously disclosed under the pro forma provisions of SFAS 123 either for (a)
all prior periods presented or (b) prior interim periods of the year of
adoption.

Beginning October 1, 2005, the Company will adopt SFAS 123R using the modified
prospective method. The impact of the retroactive adjustment on the Company's
financial statements is disclosed in Note 1.

<PAGE>


Inventory Costs - SFAS No. 151

In December 2004, the FASB issued SFAS No. 151, which clarifies the accounting
for unusual costs and the allocation of fixed production costs. For the
Company, this standard is effective for fiscal year 2006. The Company has
determined that this standard will not have a material impact on the
consolidated financial statements.

Exchange of Non-Monetary Assets - SFAS No. 153

In December 2004, the FASB issued SFAS No. 153, as an amendment to APB Opinion
No. 29. SFAS No. 153 provides guidance on the measurement of exchanges of
non-monetary assets, with exceptions for exchanges that do not have commercial
substance. Under SFAS No. 153, a non-monetary exchange has commercial
substance if, as a result of the exchange, the future cash flows of an entity
are expected to change significantly. Under SFAS No. 153, a non-monetary
exchange is measured based on the fair values of the assets exchanged. If fair
value is not determinable, the exchange lacks commercial substance or the
exchange is to facilitate sales to customers, a non-monetary exchange is
measured based on the recorded amount of the non-monetary asset relinquished.
For the Company, SFAS No. 153 will be effective for non-monetary exchanges
that occur beginning on July 1, 2005. The Company has determined that this
standard did not have a material impact on the consolidated financial
statements.

Accounting Changes and Error Corrections - SFAS No. 154

In May 2005, the FASB issued SFAS No. 154, which replaces APB Opinion No. 20,
"Accounting Changes", and SFAS No. 3, "Reporting Accounting Changes in Interim
Financial Statements - An Amendment of APB Opinion No. 28". SFAS No.154
provides guidance on the accounting for and reporting of changes in accounting
principles and error corrections. SFAS No. 154 requires retrospective
application to prior period financial statements of voluntary changes in
accounting principle and changes required by new accounting standards when the
standard does not include specific transition provisions, unless it is
impracticable to do so. SFAS No. 154 also requires certain disclosures for
restatements due to corrections of an error. For the Company, SFAS No. 154
will be effective for accounting changes and corrections of errors made in its
fiscal year beginning on October 1, 2006. The impact that the adoption of SFAS
No. 154 will have on the Company's consolidated financial statements will
depend on the nature of future accounting changes adopted by the Company and
the nature of transitional guidance provided in future accounting
pronouncements by the FASB.

Consolidation of Variable Interest Entities - FSP FIN 46R-5

In March 2005, the FASB issued FASB Staff Position ("FSP") No. 46(R)-5,
"Implicit Variable Interests" under FASB Interpretation ("FIN") No. 46
(revised December 2003), "Consolidation of Variable Interest Entities" ("FSP
FIN 46R-5"). FSP FIN 46R-5 provides guidance for a reporting enterprise on
whether it holds an implicit variable interest in Variable Interest Entities
("VIEs") or potential VIEs when specific conditions exist. This FSP is
effective in the first period beginning after March 3, 2005 in accordance with
the transition provisions of FIN 46 (Revised 2003), "Consolidation of Variable
Interest Entities - an Interpretation of Accounting Research Bulletin No. 51"
("FIN 46R"). The Company was required to adopt FIN 46-R at the end of the
first interim or annual reporting period ending after March 15, 2004. The
Company does not have any arrangements with variable interest entities that
require consolidation of their financial information, or disclosure thereof,
in the financial statements.




<PAGE>


A.       Disclosure Controls and Procedures

Disclosure controls and procedures are defined by the Securities and Exchange
Commission as those controls and other procedures that are designed to ensure
that information required to be disclosed by Hummingbird Ltd. (the
"Registrant") in reports filed or submitted by it under the Securities
Exchange Act of 1934 is recorded, processed, summarized and reported within
the time periods specified in the Securities and Exchange Commission's rules
and forms. The Registrant's Chief Executive Officer and Chief Financial
Officer have evaluated the Registrant's disclosure controls and procedures as
of the end of the period covered by this Annual Report on Form 40-F and have
determined that such disclosure controls and procedures are effective.

B.       Changes in Internal Control Over Financial Reporting

There has not been any significant change in the Registrant's internal control
over financial reporting that occurred during the fiscal year ended September
30, 2005 that has materially affected, or is reasonably likely to materially
affect, the Registrant's internal control over financial reporting.

C.       Notice of  Pension Fund Blackout Period

The Registrant was not required by Rule 104 of Regulation BTR to send any
notice to any of its directors or executive officers during the fiscal year
ended September 30, 2005.

D.       Audit Committee Financial Expert

The Registrant's board of directors has determined that Mark D. Spitzer and
Stephen A. Crane, individuals serving on the audit committee of the
Registrant's board of directors, are audit committee financial experts, as
that term is defined in Item 401(h)(2) of Regulation S-K under the Securities
Exchange Act of 1934, as amended. The Registrant's board of directors has also
determined that Mr. Spitzer and Mr. Crane are independent, as that term is
defined in the applicable listing standards of the Nasdaq Stock Market, Inc.

E.       Code of Ethics

The Registrant has adopted a code of ethics that applies to all employees
including its chief executive officer, chief financial officer, controller and
its principal accounting officer. The Registrant has posted the text of its
code of ethics on its website. The text of the code of ethics can be viewed by
visiting www.hummingbird.com and selecting the "Corporate Governance" icon
within the section entitled "Company".

F.       Principal Accountant Fees and Services

         Audit Fees

The aggregate fees billed by Deloitte & Touche LLP (the "Outside Auditors"),
the Registrant's principal accountant, for the fiscal years ended September
30, 2004 and 2005 for professional services rendered by it for the audit of
the Registrant's annual financial statements or services that are normally
provided by the Outside Auditors in connection with statutory and regulatory
filings or engagements were $614,327 and $722,273, respectively.

         Audit-Related Fees

The aggregate fees billed by the Outside Auditors for the fiscal years ended
September 30, 2004 and 2005, for assurance and related services rendered by it
that are reasonably related to the performance of the audit or review of the
Registrant's financial statements and are not reported above as audit fees
were $172,811 and $346,119, respectively. Professional services provided
included review of the Registrant's quarterly financial statements and
accounting advice on certain matters.

<PAGE>


         Tax Fees

The aggregate fees billed by the Outside Auditors for the fiscal years ended
September 30, 2004 and 2005, for professional services rendered by it for tax
compliance, tax advice and tax planning were $521,191 and $734,650,
respectively. Tax services provided included tax advisory services and review
and filing of the Registrant's annual income tax returns.

         All Other Fees

No fees were billed by the Outside Auditors for the fiscal years ended
September 30, 2004 and 2005, respectively, for products and services provided
by it, other than the services reported in the preceding three paragraphs.


         Audit Committee Pre-Approval Policies

All audit and non-audit services performed by the Outside Auditors are
pre-approved by the audit committee of the Registrant.

G.       Off-Balance Sheet Arrangements

The Registrant is not a party to any off-balance sheet arrangements that have
or are reasonably likely to have a current or future effect on its financial
condition, changes in financial condition, revenues or expenses, results of
operations, liquidity, capital expenditures or capital resources that is
material to investors.

H.       Tabular Disclosure of Contractual Obligations

See "Management's Discussion and Analysis of Financial Condition and Results
of Operations for the year ended September 30, 2005", included as Document No.
3 to this Annual Report.

I.       Critical Accounting Policies

See "Management's Discussion and Analysis of Financial Condition and Results
of Operations for the year ended September 30, 2005", included as Document No.
3 to this Annual Report.

J.       Audit Committee Members

The Registrant has a separately-designated standing audit committee
established in accordance with Section 3(a)(58)(A) of the Exchange Act. The
members of the audit committee are: Mark D. Spitzer, Stephen A. Crane and Jack
Langer.

K.       Nasdaq Exemptions

As permitted by Rule 4350(a)(1) of the Nasdaq Marketplace Rules, the
Registrant follows Canadian practice with respect to quorum requirements in
lieu of those required by Rule 4350(f) of the Nasdaq Marketplace Rules (which
provides that a quorum for a shareholder meeting of a Nasdaq-listed company
must be at least 33-1/3% of the outstanding common shares of the company). The
Registrant's by-laws provide that the minimum quorum for a meeting of
shareholders consists of at least two voting persons present and authorized to
cast in the aggregate not less than 25% of the total number of votes attaching
to all shares carrying the right to vote at that meeting. The Registrant's
quorum requirements are not prohibited by the requirements of the Canada
Business Corporations Act and the Registrant intends to continue to comply
with the requirements of the Canada Business Corporations Act. The rules of
the Toronto Stock Exchange, upon which the Registrant's common shares are also
listed, do not contain specific quorum requirements.



<PAGE>



                 UNDERTAKING AND CONSENT TO SERVICE OF PROCESS

A.       Undertaking

The Registrant undertakes to make available, in person or by telephone,
representatives to respond to inquiries made by the Commission staff, and to
furnish promptly, when requested to do so by the Commission staff, information
relating to: the securities registered pursuant to Form 40-F; the securities
in relation to which the obligation to file an annual report on Form 40-F
arises; or transactions in said securities.

B.       Consent to Service of Process

The Registrant has previously filed with the Commission a Form F-X in
connection with the Common Shares.


<PAGE>



                                   SIGNATURE

         Pursuant to the requirements of the Exchange Act, the Registrant
certifies that it meets all of the requirements for filing on Form 40-F and
has duly caused this annual report to be signed on its behalf by the
undersigned, thereto duly authorized.


                                          HUMMINGBIRD LTD.


December 30, 2005                         By: /s/ Inder P.S. Duggal
                                              --------------------------------
                                          By:    Inder P.S. Duggal
                                          Title: Chief Financial Officer,
                                                 Secretary and Treasurer




<PAGE>



                                 EXHIBIT INDEX


Number        Document
------        --------

   1.         Consent of Deloitte & Touche LLP
  31.         Certification of CEO and CFO pursuant to Section 302 of
              the Sarbanes-Oxley  Act of 2002
  32.         Certification of CEO and CFO pursuant to Section 906
              of the Sarbanes-Oxley Act of 2002