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, 2004     Commission File Number 0-23464

                              __________________

                               HUMMINGBIRD LTD.
            (Exact name of Registrant as specified in its charter)


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


                                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.

                                              Name of each exchange
         Title of each class:                 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 17,448,279 Common Shares
                     outstanding as at September 30, 2004

         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,
                   2004.

Document No. 2:    Audited Consolidated Financial Statements for the financial
                   year ended September 30, 2004, 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,
                   2004, prepared in accordance with United States generally
                   accepted accounting principles.

<PAGE>


                                                                Document No. 1


<PAGE>


                                HUMMINGBIRD LTD.



                            ANNUAL INFORMATION FORM




                           For the Fiscal Year Ended
                               September 30, 2004



                               February 16, 2005

<PAGE>

                               TABLE OF CONTENTS


1. CORPORATE STRUCTURE.......................................................4

     1.1 Name and Incorporation..............................................4
     1.2 Intercorporate Relationships........................................4

2. GENERAL DEVELOPMENT OF THE BUSINESS.......................................5

     2.1 Enterprise Content Management (ECM) Industry Background.............5
        2.1.1 Document Management (DM).......................................5
        2.1.2 Records Management (RM)........................................7
        2.1.3 Knowledge Management (KM)......................................7
        2.1.4 Collaboration..................................................7
        2.1.5 Business Intelligence (BI) and Data Integration................7
        2.1.6 Portal (Webtop)................................................8
     2.2 Connectivity Industry Background....................................8
        2.2.1 X Window and X Servers.........................................8
     2.3 Acquisitions and Dispositions.......................................9

3. DESCRIPTION OF THE BUSINESS..............................................10

     3.1 General............................................................10
     3.2 Company Strategy...................................................11
     3.3 Products...........................................................12
     3.4 Professional Services and Training.................................15
     3.5 Sales and Marketing................................................15
     3.6 Research and Development...........................................16
     3.7 Intellectual Property..............................................18
     3.8 Employees..........................................................18
     3.9 Facilities.........................................................18
     3.10 Legal Proceedings.................................................18
     3.11 Trademarks........................................................18
     3.12 Competition.......................................................19

4. SELECTED CONSOLIDATED FINANCIAL INFORMATION..............................20

     Income Statement Data..................................................20
     Balance Sheet Data.....................................................20
     Quarterly Results......................................................21
     Income Statement Data..................................................22
     Balance Sheet Data.....................................................22
     Quarterly Results (unaudited)..........................................23
     Dividends..............................................................23
     Description of Capital Structure.......................................23

5. MANAGEMENT'S DISCUSSION AND ANALYSIS.....................................24

6. MARKET FOR SECURITIES....................................................24

7. DIRECTORS AND EXECUTIVE OFFICERS.........................................24

8. ADDITIONAL INFORMATION...................................................28

9. RIGHT OF FIRST REFUSAL...................................................28

GLOSSARY OF TECHNICAL TERMS.................................................29

                                      -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, 2004, unless otherwise
indicated.

SPECIAL NOTE REGARDING 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.

                                      -3-

<PAGE>


1. CORPORATE STRUCTURE

1.1 Name 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 unissued 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 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.

1.2 Intercorporate Relationships

Unless otherwise indicated all subsidiaries are wholly-owned.


[HUMMINGBIRD LTD.
TORONTO, CANADA
Organizational Chart Omitted

The chart indicates that the following are direct 100% owned (unless otherwise
indicated) subsidiaries of Hummingbird Ltd and the jurisdiction of
incorporation of such corporations: HCL France SA, France (23% owned by HL)
(77% owned by H UK Ltd.); Hummingbird USA Inc. USA; Hummingbird Japan KK,
Japan (70% held by HL) (30% held by Fujitsu); Nihon PC Docs KK, Japan;
Hummingbird Korea Pty Inc, Korea; Hummingbird Australia Pty Limited,
Australia; Hummingbird Asia Ptd. Ltd., Singapore; Fulcrum Technologies
Delaware, USA; Canterbury-Systems Corp., Ontario (Inactive) Canada;
Hummingbird Canada Ltd., Bare Trustee Co., Canada; PC Docs Canada Inc.
(Inactive) Bare Trustee Co., Canada; World Preferred.com Quality Group, Inc.
(hold 30%), Canada; PC Docs Asia Ltd., British Virgin Island Co. (Inactive)
Operating Branch Singapore; Hummingbird Communications Pty Limited, Australia;
Fulcrum Technologies GmbH, Germany; Hummingbird Spa, Italy; 1239296 Ontario
Inc., Kingston Building, Canada; CMS/Data Canada Inc., Canada; 1342048 Ontario
Inc., Canada (Inactive); Hummingbird SA, Geneva, Basel, Switzerland; Fulcrum
Services Europe SA, France (Inactive); PC Docs SARL (Inactive) France; PC Docs
Group Europe Ltd., U.K.; Fulclrum Technologies Limited, U.K.; Hummingbird UK
Limited; U.K.

The chart also indicates that the following subsidiaries own the following
indirect subsidiaries of Hummingbird Ltd.:

(A) HCL France SA, France owns Hummingbird France SA, France who owns Leonards
Logic Limited, UK;

(B) Hummingbird USA Inc., USA owns (i) PC Docs (Europe) Ltd. who owns PC Docs
(UK) Ltd. (Inactive) UK; (ii) Hummingbird Holdco Corporation Delaware, USA who
owns CompInfo I.P. Inc. USA and Compinfo, Inc, USA; and (iii) Legal Key
Technologies Inc., New York;

(C) Fulcrum Technologies Delaware, USA owns Trip Services International Inc.,
USA (Inactive) who owns DataRamp LLC, Delaware USA (Inactive); and

(D) Hummingbird UK Limited, U.K. owns (i) Valid Information Systems Limited,
(ii) Hummingbird Holdings GmbH, Germany who owns Hummingbird Communications
GmbH, Germany and Hummingbird Business Intelligence GmbH, Germany; (iii)
PeopleDoc Limited, U.K. who owns Medical Document Imaging (MDI) Systems
Limited Scotland; (iv) Kramer Lee & Associates Limited, U.K.; (v) Hummingbird
Communications BV, Netherlands who owns Key Automation Nederland B.V.,
Netherlands Corporation and Dispro B.V. Netherlands Corporation; and (vi)
Hummingbird Ab Sweden, Stockholm & Uppsala.


                                      -4-
<PAGE>

2. GENERAL DEVELOPMENT OF THE BUSINESS

The Company is a leading global provider of enterprise software solutions. The
Company's enterprise software solutions fall into two principal product
families: (i) Hummingbird Enterprise (formerly known as Enterprise Information
Portal Solutions), and (ii) Hummingbird Connectivity (formerly known as Host
Access and Network Connectivity). The Company's flagship offering, Hummingbird
Enterprise, is an integrated enterprise content management (ECM) suite of
software applications that allows users to manage the entire lifecycle of their
enterprise content, effectively empowering organizations to capture, create,
access, share, find, analyze, protect, publish and efficiently manage all
structured and unstructured data. 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.

The Company was founded in 1984 as a consulting firm that designed voice-data
integration and micro-to-mainframe communication products. In 1989, the Company
entered the PC-X server market with its first product, the DOS-based
HCL-Exceed. In January 1991, the Company introduced its Windows-based product,
HCL-Exceed/W, and by the end of 1991, the Company had established itself as the
market share leader among PC-X server software vendors. Since 1991, the Company
has continued to enhance the Exceed product line, introducing new Exceed
products for all PC operating systems, and developing many other features and
functions. Exceed is part of the Hummingbird Connectivity suite today.

2.1 Enterprise Content Management (ECM) Industry Background

Information is among the most valuable assets of any organization. An
organization's ability to efficiently manage and utilize the vast quantities of
data generated through everyday processes, transactions and events can create a
competitive advantage and the ability to control and track that information is
often a legal or regulatory requirement. However, the rapid growth of
unstructured data has resulted in disparate repositories of data throughout
organizations and a significant management and control problem.

By providing a secure enterprise repository for all types of information,
documents and data, enterprise content management solutions allow organizations
to capture, create, access, manage, share, find, analyze, protect and publish
content in a secure and controlled manner. In an effort to automate and
streamline the management of data, organizations have sought the complementary
functionality provided by collaboration, knowledge management, records
management, business intelligence applications and portal (webtop), thereby
creating the need for solutions that can integrate these functionalities in a
unified, seamless platform. Unlike standalone applications, unified and
integrated enterprise content management solutions enable organizations to
lower their cost of deployment and administration, while providing an
enterprise wide platform that allows the organization to meet future
requirements for document or content management. The seamless
interconnectivity, rapid deployment and high return on investment that these
integrated solutions can provide have also driven organizations to make
enterprise content management an important element of their overall business
strategies.

Corporate scandals, threats of terrorism, and increasingly stringent reporting
requirements have created an immediate need for solutions that help
organizations to comply with new regulations such as the Sarbanes-Oxley Act of
2002 as well as other regulations that require corporate control over internal
resources. These new rules have driven substantial growth in enterprise content
management solutions, as organizations are required to manage data in a manner
that allows them to meet regulatory requirements.

Gartner/Dataquest estimates that enterprise content management license revenue
will grow from approximately $1.0 billion in 2003 to approximately $1.7 billion
in 2008 representing a compound annual growth rate of 10.7%.

The Company anticipated a trend towards customer demand for an integrated ECM
offering, and expects to continue to capitalize on this trend by providing
integrated enterprise software solutions. The Company was the first to market
with an integrated suite of content management applications branded as
Hummingbird Enterprise. This suite is designed to support end-to-end content
life cycle management that includes capturing, creating, accessing, managing,
sharing, finding, analyzing, protecting and publishing content as part of an
integrated process.

2.1.1 Document Management (DM)

Structured data, such as sales records, inventory data or accounting and
billing information, is typically stored in tables in


                                      -5-
<PAGE>

traditional database management systems. Unstructured data, such as word
processing, spreadsheet, CAD drawings, image, graphics and multimedia files, is
produced by a myriad of desktop and professional applications. Unstructured
data typically exists in hard copy as well as in a multitude of electronic data
types and file formats, and is believed to comprise approximately 80% of the
content in the average enterprise. In a typical corporate environment,
unstructured electronic documents are created, modified, distributed and stored
using multiple software systems which run on a variety of different platforms
that may be geographically dispersed, with little compatibility or data sharing
capability between systems.

Over the last 10 years, the Internet has emerged as an increasingly important
medium for business. Internet technologies are having a significant influence
on the configuration of network computing environments as organizations are
increasingly adopting private "intranets" and "extranets", based on Internet
data formats and communications technologies to connect geographically
dispersed networks and information repositories and communicate with customers
and partners 24x7 from anywhere in the world.

The proliferation of relational database management systems (RDBMS) enabled the
effective management of much of the structured data within large organizations.
However, these systems are not designed to manage the complexity and variety of
unstructured data. As a result, individuals are spending a disproportionate
amount of their time locating, assembling, processing and duplicating data
rather than engaging in more productive activities. In addition, today's PC
users often work in collaborative teams that are geographically dispersed,
creating additional opportunities for errors to occur.

Enterprise document management (EDM) technologies emerged in order to address
these problems. EDM systems provide a means to store, easily locate and
retrieve document-based information throughout the document lifecycle. An
effective document management system must be able to operate in a heterogeneous
computing environment, permit users to collaborate and contribute information
across enterprise and geographic boundaries and be flexible enough to adapt to
emerging hardware and software platforms, including the Internet and intranets.
In addition, the ability to create libraries for secure document access and
retrieval based on a variety of criteria, to maintain a record of user activity
and to control multiple document versions is essential. While a number of
technology suppliers have developed proprietary software systems to address
these challenges, many of these solutions serve only single applications (for
example, word processing) and individual environments (for example, a single
network operating system) and therefore do not address enterprise-wide
concerns. Over the last couple of years the enterprise document management
technologies became part of the broader enterprise content management market.

Enterprise content management technologies extend the management of documents
to include any type of content, from scanned invoices, email, presentations,
and collaboration projects to video and instant messaging.

Acquired through the purchase of PC DOCS Group International, Inc. in 1999, the
Company's document management technology was formerly known as the DOCS family
of products, including DOCS Open, CyberDOCS, PowerDOCS, and DOCSFusion. This
product family was renamed as part of a comprehensive re-branding initiative
undertaken by the Company in February 2002, and is now known as Hummingbird
Enterprise DM.

Hummingbird Enterprise DM facilitates the capture, management, sharing, and
protection of corporate content resources. User queries are easily executed
across global DM repositories, enabling users to find and control documents and
easily distribute them for review, collaboration, and publication with project
teams inside and outside the traditional corporate landscape. From electronic
documents, e-mails, and multimedia to paper, forms, and records, the complex
variety of digital file types demands a secure, flexible environment that
enables users to easily catalog, find, and share information - a demand met by
Hummingbird Enterprise DM.

Hummingbird Enterprise DM companion solutions provide imaging, workflow, Web
publishing, and engineering file management capabilities, seamlessly integrated
into Hummingbird's document and records management interfaces to increase
productivity and enhance workgroup cooperation. Hummingbird Enterprise DM
Extension for AutoCAD provides a link between AutoCAD and Hummingbird
Enterprise DM, allowing organizations to manage engineering drawings while
strategically incorporating them into enterprise content repositories.
Hummingbird Enterprise DM WorkFlow delivers content routing features enabling
users to define, automate, and manage the tasks associated with document
creation and review. Hummingbird Imaging transforms paper-based documents into
digital knowledge assets through capture, markup, and OCR capabilities,
enabling access and storage of paper-based and electronic documents in a
consolidated repository. Hummingbird Web Publishing is a template-driven
solution for creating and maintaining corporate Web sites, automatically
transforming content into HTML or XML from external file systems and
Hummingbird Enterprise DM repositories.

                                      -6-
<PAGE>

2.1.2 Records Management (RM)

Records Management (RM) is a wide-ranging discipline that extends the
functionality of content/document management systems to enable the management
and categorization of electronic records. RM includes features that govern the
filing, movement and disposal of enterprise records that are instrumental in
managing the entire lifecycle of enterprise content. Hummingbird's core records
management product is Hummingbird Enterprise RM.

Demand for Records Management solutions is being driven by the increasing
requirements for organizations to retain and dispose of documents in order to
comply with regulatory requirements or changes in legislation. Effective
Corporate Governance policies, privacy regulations and investor protection
legislation all require organizations to implement effective and complete
records management polices and procedures for their critical documents and
records. For most organizations this drives the need for a Records Management
environment linked to their document creation and control capabilities
(Document Management) and therefore drives the need for integrated Electronic
Content Management systems that include Records Management.

2.1.3 Knowledge Management (KM)

Knowledge Management (KM) software builds a comprehensive index of all terms
that appear in documents, which can then be searched in their original format
for relevant information. Unlike traditional database management systems, KM
software does not require information to be rigorously structured before it is
stored and later accessed. KM technology provides an effective mechanism for
retrieving documents based on their content without needing to know where
specifically on an organization's networks they may be physically stored.

Hummingbird's core knowledge management product is Hummingbird Enterprise KM.
Acquired through the purchase of PC DOCS Group International Inc. in 1999, the
technology was formerly known as the Fulcrum family of products, specifically
SearchServer and Knowledge Server.

2.1.4 Collaboration

As awareness of the value of enterprise knowledge increases, organizations are
becoming increasingly interested in capturing information that resides outside
traditional systems. This problem has been compounded by the fact that workers
are increasingly decentralized and mobile. Collaboration software captures the
interactions between groups of users, in the context of the projects to which
they relate, so that the information revealed in their exchanges can be
leveraged in subsequent activities. Hummingbird's core collaboration product is
Hummingbird Enterprise Collaboration. Acquired with the purchase of PeopleDoc
Limited in 2001, the technology was previously known as PD Accord.

2.1.5 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 Company's core business intelligence product is Hummingbird BI. Acquired
with the purchase of Andyne Computing Limited in 1998, the technology was
formerly known as the GQL and Pablo family of products. The Company's core data
integration product is Hummingbird Genio, which was acquired with the purchase
of Leonard's Logic, SA in 1999.

                                      -7-
<PAGE>

2.1.6 Portal (Webtop)

Hummingbird Enterprise Webtop is the Company's portal offering in the
enterprise content management marketplace. Recent and future enhancements of
Hummingbird Enterprise Webtop are focused on increasing the extent of
integration between the framework and the Company's content/document
management, knowledge management, collaboration, business intelligence and data
integration solutions. The Company maintains an open metadata strategy and
publishes XML-based application programming interfaces (APIs) for integrating
additional applications into the Hummingbird Enterprise Webtop environment.
Through this integrated approach, the products that form the Hummingbird
Enterprise suite provide access to all business-critical information and
resources, transforming information into intelligence.

During fiscal 2000 and 2001 the Company's go-to-market strategy was to lead
primarily with its enterprise portal offering. As the market evolved, however,
the Company's other information management technologies have proven to be
significant competitive differentiators. Accordingly, in February 2002, the
Company launched a new brand identity that streamlined its product naming
conventions and emphasized its full range of technologies in a more balanced
approach. The Hummingbird Enterprise Webtop technology was formerly known as
Hummingbird EIP.

2.2 Connectivity Industry Background

Connectivity solutions provide desktop users with access to mission critical
back office applications on legacy systems. 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.

Hummingbird Connectivity (formerly known as Host Access and Network
Connectivity) includes the Company's traditional applications for accessing
back-office UNIX, Mainframe and AS/400 applications from Windows desktops and
the Web. A renaming of these product families occurred in February 2002 as part
of a comprehensive re-branding initiative that was undertaken by the Company.

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.


2.2.1   X Window and X Servers

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 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.


                                      -8-
<PAGE>

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 also 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 for the last four years. However,
the Company believes that its market share remains relatively consistent with
the IDC figures reported above.

There can be no assurance that the Company's market share will remain at this
level in the future.

2.3 Acquisitions and Dispositions

As part of the Company's strategy to expand its product and solution
offerings, the Company has completed the following strategic acquisitions
over the preceding seven years.

In 1998, the Company acquired Andyne Computing Limited (an Ontario
corporation), which developed, marketed and supported a line of business
intelligence software. Andyne's integrated decision support products included
Andyne GQL, GQL Reports and PaBLO. These products exploited client/server
computing technology to provide powerful access and analysis by end users of
database information stored on server computers. During the second and third
quarters of 1998, the Company upgraded these products and introduced its
first business intelligence product offering based on those core products:
BI/Broker, BI/Query, BI/Web, and BI/Analyze. In 1999 the Company began
selling these products as an integrated suite called BI/Suite, and continues
to maintain and enhance this integrated business intelligence solution. In
February 2002, BI/Suite was renamed to Hummingbird BI and is part of the
Hummingbird Enterprise family of products.

In March 1999, the Company acquired Leonard's Logic, SA, a France-based
software company which made Genio, a data transformation and exchange tool
that facilitates the flow of information through corporate decision support
systems, including data marts, data warehouses and OLAP (on-line analytical
processing) environments. Leonard's Logic was based in Paris, France, with
offices in Europe and North America.

In June 1999, the Company acquired PC DOCS Group International Inc., a
publicly traded Ontario corporation. PC DOCS developed, marketed and
supported object-oriented client/server and Web Document Management and
Knowledge Management systems for unstructured data. The Company has continued
to enhance these product lines, and currently markets them as Hummingbird
Enterprise DM and Hummingbird Enterprise KM, components of the Hummingbird
Enterprise suite. The Company is also working to integrate this and other
acquired technologies with the Company's


                                      -9-
<PAGE>

internally developed portal framework to develop comprehensive software
solutions for the management of all forms of structured and unstructured
data. The Company launched the first solution in this area, Hummingbird EIP
(now known as Hummingbird Enterprise Webtop), designed to provide customers
with the ability to access and analyze and act on all relevant business
information from various formats, sources and locations through a single Web
browser-based user interface.

In July 2001, the Company acquired PeopleDoc Limited, a private company based
in Scotland. PeopleDoc specialized in software used to create and secure
Web-based collaborative environments in which projects can be managed across
the Internet. This technology has been integrated into the Company's
Hummingbird Enterprise suite, and is marketed under the name Hummingbird
Enterprise Collaboration.

In March 2003, the Company acquired LegalKey Technologies, Inc., a New
York-based privately held software and solutions company specializing in
integrated practice support applications for law firms and professional
services organizations. The Company is integrating these solutions into its
Hummingbird Enterprise suite of products.

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
strengthens the Company's position in the government market.

In June 2003, the Company acquired Kramer Lee and Associates Limited, a
privately held provider of practice support solutions based in the United
Kingdom for law firms and insurance and financial services clients in the
United Kingdom. The acquisition infuses additional domain expertise within
Hummingbird and further strengthens 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.


3. DESCRIPTION OF THE BUSINESS

3.1 General

The Company is a leading global provider of enterprise software solutions. Its
enterprise content management (ECM) solutions enable organizations to manage
the lifecycle of enterprise content from creation to disposition. Its flagship
product, Hummingbird Enterprise, is an integrated suite of software
applications that allows users to extract both structured and unstructured data
from disparate corporate locations to capture, create, access, share, find,
analyze, protect and publish data, and efficiently manage all content from a
single point of access and administration. The Company solutions enable users
to address critical business needs, such as information management, business
continuity, disaster recovery, compliance, corporate governance and risk
management. The Company solutions are designed as modular applications that are
fully interoperable with each other, enabling its customers to incrementally
build an enterprise content management solution to meet their evolving
information needs in a cost effective manner. The Company's ECM solution is
rooted in document management, offering integrated capabilities in records
management, knowledge management, collaboration, data integration and business
intelligence, among others.

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.

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. The Company's products are used in a wide range of
industries, including legal, central, state/provincial and federal government,
aerospace/defense, manufacturing, automotive, petrochemical, banking and
financial services, telecommunications, utilities, pharmaceutical and education.
Some of the Company's major customers include 7-Eleven, AT&T, Amec Group
Ltd., AXA Group Baker & McKenzie, Barclays Bank Plc, Boeing, British Telecom,

                                    -10-
<PAGE>

City of Rotterdam, Daimler Chrysler, General Electric, Government of
Canada, Hydro Quebec, Inco, Norfolk Southern Rail Technologies, Nokia, Morgan
Stanley, Motorola, the Port of Seattle, Procter and Gamble, Public Works &
Government Services Canada, Saatchi & Saatchi, Telecom Italia, United States
Internal Revenue Service, Wells Fargo and Viacom.

In fiscal 2004 the Company generated revenues of $220.2 million, with no single
end-user customer accounting for more than 2.0% of total revenues.


3.2 Company Strategy

The Company's Primary Business 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

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 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.

                                     -11-
<PAGE>

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 fiscal 2003
the Company consolidated its market leadership within the legal and government
segments through the acquisitions of Legal Key Technologies, Inc., Kramer Lee &
Associates, Key Automation Nederland B.V. and its affiliate, Dispro B.V., and
Valid Information Systems Limited. 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.


3.3 Products

Hummingbird Enterprise

Hummingbird Enterprise is an integrated enterprise content management platform
that enables organizations to unlock the value of business content and provides
the foundation for building process-centric enterprise content management
solutions. It provides a comprehensive framework for content life cycle
management with the ability to systematically capture, create, access, manage,
share, find, analyze, protect and publish data based on processes and rules
defined by the organization.

Several key features of Hummingbird Enterprise are:

Content Management. Hummingbird Enterprise delivers a comprehensive platform
that allows users to harness and manage content, thereby enabling them to
leverage their organization's knowledge assets. Effectively managing the
various types of electronic documents relied upon by organizations, including
e-mail, multimedia, paper, forms, and records, requires a secure, flexible
environment that enables users to easily catalog, find, and share information.
Hummingbird Enterprise provides such an environment.

Shared Repository. Hummingbird Enterprise provides a repository for storing
business content, such as documents, electronic records, e-mail, Web content,
instant messaging threads, or reports.

Strong Security. Hummingbird Enterprise provides extensive security features,
including internal and external user authentication. Administrators can
configure role-based groups with granular permissions that control who can
create, search for, and manage content, allow or deny access to documents and
assign retention and disposition rules to documents.

E-mail Management. Hummingbird Enterprise provides automated rules-based e-mail
management capability which helps companies comply with regulations mandating
the retention of e-mail as records, since both incoming and outgoing e-mail
messages and attachments are captured, profiled, categorized and stored within
the shared repository.

Records Management. Hummingbird Enterprise includes a records management feature
that enables the automatic creation, retention and final disposition of records
at any stage of the content lifecycle, thereby enabling long-term access,

                                     -12-
<PAGE>

audit and retention control of all content in compliance with various
regulatory requirements.

Knowledge Management. Hummingbird Enterprise allows users to manage and
categorize content, thereby facilitating the convenient navigation and display
of relevant content in the appropriate context. It also allows users to conduct
single, unified searches across multiple information sources, including Lotus
Notes, Microsoft Exchange Server, Web sites, file repositories, document
management systems, multimedia libraries, databases, and enterprise
applications.

Architecture. Hummingbird Enterprise is based on a scalable high performance
Web-based architecture that supports full life cycle content management. It is
designed around a multi-tiered platform, with the following four layers:

   o     the access layer, which supports a wide range of client interfaces that
         encompass Webtop, MS Outlook, MS Explorer and MS Office, Mobile devices
         and third-party Portal frameworks

   o     the transaction services layer, which houses the metadata, permissions,
         security and business rules associated with the management, sharing and
         publishing of content

   o     the Web-server layer, which provides Web application access to
         Hummingbird Enterprise

   o     the application programming interfaces (APIs) that provide a formal
         framework for customization and application integration

The components of Hummingbird Enterprise are as follows:

<TABLE>
<CAPTION>

Product                            Product Type         Functionality
---------------------------------- -------------------- -------------------------------------------------------------------
<S>                                <C>                  <C>
Hummingbird Enterprise DM          Document management  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 Enterprise RM          Records management   Provides a completely secure, feature rich, standards-compliant
                                                        records management solution.  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 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             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 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).
---------------------------------- -------------------- -------------------------------------------------------------------
</TABLE>

                                                          -13-
<PAGE>
<TABLE>
<CAPTION>
---------------------------------- -------------------- -------------------------------------------------------------------
<S>                                <C>                  <C>
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 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 IM          Realtime messaging   Is a highly secure corporate instant messaging platform. It
                                                        offers unique value in three areas - real-time collaboration,
                                                        capturing and retaining knowledge transferred during chat
                                                        sessions, and enhanced productivity.
---------------------------------- -------------------- -------------------------------------------------------------------
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 Imaging                Image management     Allows users to integrate and manage scanned documents, faxes,
                                                        optical character leader text (OCR), and other electronic images
                                                        on their network.
---------------------------------- -------------------- -------------------------------------------------------------------
Hummingbird Enterprise WorkFlow    Process Automation   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.
---------------------------------- -------------------- -------------------------------------------------------------------
</TABLE>

DOCS Open

DOCS Open is the Company's legacy two-tier client server based document
management offering. It provides a robust document management repository,
document routing, imaging and records management capabilities. The Company's
DOCS Open installed base of customers provides a continuous source of high
margin maintenance renewal revenue. The Company also markets Hummingbird
Enterprise to its DOCS Open customers as a product upgrade.

Hummingbird 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


                                     -14-
<PAGE>

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 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


3.4 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 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.

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 offer 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.


3.5 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.

                                     -15-
<PAGE>

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.

To date, the United States has been the Company's most important geographic
market representing approximately 49% of the Company's sales for fiscal 2004.
Like in other parts of the world, the Company sells its products in the United
States through a combination of a direct sales force and a network of
authorized distributors, resellers and systems integrators. In addition to
addressing the U.S. market through the Company's Toronto based headquarters,
the Company maintains sales offices in several North American cities, including
Ottawa, Ontario; Mountain View, California; Washington, D.C.; Raleigh, North
Carolina; Burlington, Massachusetts; Tallahassee, Florida; Dallas, Texas; New
York, New York; Los Angeles, California; and Chicago, Illinois.

Sales activities outside of the United States are handled predominantly by way
of indirect channels through authorized distributors and resellers in each
country, where products are sold. For fiscal 2004, sales in Canada represented
approximately 6% of total sales, sales in Europe approximately 40%, and sales
in the rest of the world approximately 5%. The Company established a European
sales office in Geneva, Switzerland in March 1992, and since that time have
established offices in the United Kingdom, Germany, France, Sweden, Italy,
Belgium and Holland. In the rest of the world, the Company 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.


3.6 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 2004 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 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.

                                     -16-
<PAGE>
<TABLE>
<CAPTION>

PRODUCTS RELEASED IN FISCAL 2004

------------------------------ ---------------- --------------------- -------------------- ----------------------------------
Hummingbird Enterprise(TM)        Other            Hummingbird BI        Hummingbird          Hummingbird Connectivity(TM)
                                                                      Integration Suite
------------------------------ ---------------- --------------------- -------------------- ----------------------------------
<S>                            <C>              <C>                   <C>                  <C>
Hummingbird                    DOCS Open v4.0   Hummingbird BI 8.5    Hummingbird Genio
Enterprise(TM) 2004                                                   5.1                  Version 9.0 64-bit Products:
-------------------                                                                        ----------------------------
                               Hummingbird      Hummingbird BI 8.5.1  Hummingbird          Exceed PowerSuite(TM) 9.0 64-bit
Consisted of the following     SearchServer                           Met@Data 2.0            Edition
components:                    v5.4.0                                                      Exceed(R) 9.0 64-bit Edition
                                                                                           Exceed 3D(TM) 9.0 64-bit Edition
Hummingbird                                                                                Exceed XDK(TM) 9.0 64-bit Edition
Enterprise(TM) 2004 DM                                                                     NFS Maestro Solo(TM) 9.0 64-bit
Hummingbird                                                                                   Edition
Enterprise(TM) 2004  RM                                                                    NFS Maestro Client(TM) 9.0 64-bit
Hummingbird Enterprise(TM)                                                                    Edition
2004 Collaboration                                                                         NFS Maestro Server(TM) 9.0 64-bit
Hummingbird Enterprise(TM)                                                                     Edition
2004 Webtop                                                                                HostExplorer(R) 9.0 64-bit Edition
Hummingbird Enterprise(TM)
2004 IM                                                                                    Exceed onDemand:
Hummingbird Enterprise(TM)                                                                 ----------------
2004 Mobility                                                                              Exceed onDemand(R) 4.5
Hummingbird Enterprise(TM)                                                                 Hummingbird Connectivity(TM) 10
2004 KM                                                                                    Exceed Connectivity Suite(TM) 10
Hummingbird Enterprise(TM)                                                                 HostExplorer Connectivity Suite(TM)10
2004 Workflow                                                                              Exceed PowerSuite(TM) 10
Hummingbird Enterprise(TM)                                                                 Exceed(R) 10
2004 Documents                                                                             Exceed 3D(TM) 10
                                                                                           Exceed XDK(TM) 10
                                                                                           NFS Maestro Solo(TM) 10
Hummingbird Enterprise(TM) 2004                                                            NFS Maestro Client(TM) 10
Content Integration                                                                        NFS Maestro Server(TM) 10
Hummingbird Enterprise(TM) 2004                                                            NFS Maestro Gateway(TM) 10
- Automated E-mail Management                                                              HostExplorer(R) 10
                                                                                           Connectivity Secure Secure 10
                                                                                           Connectivity SecureTerm(TM) 10
                                                                                           (New product)
                                                                                           Connectivity SSL(TM) 10
                                                                                           Connectivity Kerberos(TM) 10
                                                                                           Hummingbird InetD(TM) 10
                                                                                           Hummingbird FTP(TM) 10
------------------------------ ---------------- --------------------- -------------------- ----------------------------------
</TABLE>


                                                             -17-
<PAGE>

3.7 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.

3.8 Employees

As of September 30, 2004, the Company had a total of 1,433 full time employees,
including 424 in research and development, 498 in sales and marketing, 304 in
customer support and professional services, and 207 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.

3.9 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.

3.10 Legal Proceedings

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 its business.

3.11 Trademarks

The Company holds the following trademarks:

Hummingbird(R) (Word mark and symbol), Know How. Now.(TM), Transforming
Information into Intelligence(TM), 360(0) View of Enterprise Content(TM),
Hummingbird Core Services(TM), Hummingbird Mobility(TM), Hummingbird BI(TM),
Hummingbird Collaboration(TM), Hummingbird Connectivity(TM), Hummingbird
DM(TM), Hummingbird DM WorkFlow(TM), Hummingbird Enterprise(TM), Hummingbird
Enterprise WorkFlow(TM), Hummingbird ETL(TM), Hummingbird Imaging(TM),
Hummingbird KM(TM), Hummingbird Portal(TM), Hummingbird RM(TM), Hummingbird
Web Publishing(TM), SearchServer(TM), DOCS(R), DOCS Open(R), Hummingbird
Imaging(TM), Hummingbird DM Extension (TM) for AutoCAD, Hummingbird DM
Extension(TM) for Siebel, Imagebasic(R), Imagebasic for the Web(TM),
Lawpack(R) (Design), Lawpack Connect(R), Lawpack Puts Law In Order(TM),


                                     -18-
<PAGE>

Tempest(TM), Tempest Storage Management Server(TM), Tempest Distributed Cache
Server(TM), Connect II(TM), Hummingbird ETL(TM) Metalink, Hummingbird
Enterprise Information Portal(TM), Application Collaboration(R), Hummingbird
Portal JumPStart(TM), Hummingbird RM JumPStart(TM), Hummingbird
SearchServer(TM), e-Clip(R), me-Clip(R), Dispro(TM), Key Automation(TM),
PeopleDoc(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) Dynamic Views,
Hummingbird Enterprise(TM) for Contract Management, Hummingbird Enterprise(TM)
for ESRI, Hummingbird Enterprise(TM) for Legal, Hummingbird BI(TM), BI
Server(TM), BI Analyze(TM), BI Web(TM), BI Query(TM), 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), HostExplorer Connectivity Suite(TM),
Hummingbird Deployment Wizard(TM), Hummingbird Basic(TM), Hummingbird
Connectivity(TM), Hummingbird Connectivity Suite(TM), Hummingbird
e-Gateway(TM), Hummingbird FTP(TM), Hummingbird InetD(TM), Hummingbird SOCKS
Client(TM), NFS Maestro(TM), NFS Maestro Client(TM), NFS Maestro Gateway(TM),
NFS Maestro Server(TM), NFS Maestro Solo(TM), Hummingbird Genio(R),
Hummingbird Integration Suite(TM), Hummingbird Met@Data(TM), Hummingbird
SearchServer(TM), SearchBuilder(TM), LegalKEY(R), Let The Information Flow(R),
Enterprise Records Management(TM), New Business Intake(TM), Conflicts
Management(TM), Critical Dates Management(TM)

3.12 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 Enterprise competes in the broad enterprise content management
space, which puts the Company in direct competition with vendors of standalone
document management, business intelligence, data integration and enterprise
portal products as well as other vendors that sell integrated offerings. The
Company's core content/document, knowledge and collaboration management
products compete with offerings from Documentum Inc., (acquired by EMC),
FileNet Corporation, Open Text Corporation, Interwoven, Inc., Microsoft
Corporation and International Business Machines Corp. (IBM). 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 Walker Richer
Quinn, Inc. (WRQ), NetManage, Inc. and Attachmate Corporation. To a lesser
extent, the Company also experiences competition from Tarantella Inc. 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.

                                     -19-
<PAGE>

4. SELECTED CONSOLIDATED FINANCIAL INFORMATION


(U.S. GAAP, amounts in thousands of U.S. dollars, except share data)

INCOME STATEMENT DATA

                                                2004         2003        2002
                                                ----         ----        ----

Sales                                        $ 220,224    $ 192,583   $ 180,400
Cost of sales                                   26,062       18,477      16,085
                                            ------------------------------------
Gross profit                                   194,162      174,106     164,315
                                            ------------------------------------
Expenses
     Sales and marketing                        94,947       82,004      76,894
     Research and development                   40,074       37,810      34,958
     General and administration                 21,241       20,582      20,198
     Restructuring                                   -            -       7,324
     Amortization of intangibles                22,892       19,662      29,829
     In-process research and development             -        4,269           -
                                            ------------------------------------
Total expenses                                 179,154      164,327     169,203
                                            ------------------------------------
Operating income (loss)                         15,008        9,779     (4,888)
Interest and other income, net                   1,405        1,594       2,230
                                            ------------------------------------
Income (loss) before income taxes               16,413       11,373     (2,658)
Income tax expense                               9,542        7,653         256
                                            ------------------------------------
Net income (loss)                              $ 6,871      $ 3,720   $ (2,914)
                                            ====================================


Basic earnings (loss) per share                  $0.39        $0.21     $(0.16)
                                            ====================================

Diluted earnings (loss) per share                $0.39        $0.21     $(0.16)
                                            ====================================


BALANCE SHEET DATA

                                                2004         2003        2002
                                                ----         ----        ----

Total assets                                  $371,650     $365,790    $349,583
                                            ====================================
Other long-term liabilities                   $  1,250     $  3,423     $   548
                                            ====================================


                                     -20-
<PAGE>


QUARTERLY RESULTS
(unaudited)
(U.S. GAAP, amounts in thousands of U.S. dollars, except share data)


Fiscal Quarter  Sales       Net Income       Basic Earnings    Diluted Earnings
                              (Loss)        (Loss) Per Share   (Loss) Per Share

Dec 31/01      $  44,102     $ (5,726)         $  (0.31)           $  (0.31)
Mar 31/02         46,073        4,680              0.26                0.25
Jun 30/02         44,024       (1,819)            (0.10)              (0.10)
Sep 30/02         46,201          (49)            (0.00)              (0.00)

Dec 31/02      $  44,076      $ 2,004           $  0.11            $   0.11
Mar 31/03         47,021        1,778              0.10                0.10
Jun 30/03         48,105        1,380              0.08                0.08
Sep 30/03         53,381       (1,442)            (0.08)              (0.08)

Dec 31/03      $  50,007     $ (1,297)          $ (0.07)           $ (0.07)
Mar 31/04         54,664        2,068              0.12                0.12
Jun 30/04         56,227        2,368              0.13                0.13
Sep 30/04         59,326        3,732              0.21                0.21



                                     -21-
<PAGE>


SELECTED CONSOLIDATED FINANCIAL INFORMATION

(Canadian GAAP, amounts in thousands of U.S. dollars, except share data)

INCOME STATEMENT DATA


                                                2004         2003        2002
                                                ----         ----        ----

Sales                                        $ 220,224    $ 192,583   $ 180,400
Cost of sales                                   26,062       18,477      16,085
                                            ------------------------------------
Gross profit                                   194,162      174,106     164,315
                                            ------------------------------------
Expenses
     Sales and marketing                        94,947       82,004      76,894
     Research and development                   37,974       35,470      27,508
     General and administration                 21,241       20,582      20,198
     Merger and restructuring                        -            -       7,324
     Amortization of intangibles                25,889       23,602      36,377
                                          --------------------------------------
Total expenses                                 180,051      161,658     168,301
                                          --------------------------------------
Operating income (loss)                         14,111       12,448     (3,986)
Interest and other income, net                   1,405        1,594       2,230
                                          --------------------------------------
Income (loss) before income taxes               15,516       14,042     (1,756)
Income tax expense (recovery)                   10,751        8,664       4,642
                                          --------------------------------------
Net income (loss)                              $ 4,765      $ 5,378   $ (6,398)
                                          ======================================


Basic (loss) earnings per share                  $0.27        $0.30     $(0.35)
                                          ======================================

Diluted (loss) earnings per share                $0.27        $0.30     $(0.35)
                                          ======================================


BALANCE SHEET DATA

                                                2004         2003        2002
                                                ----         ----        ----

Total assets                                 $351,770      $348,907    $330,997
                                          ======================================
Other long-term liabilities                  $  1,250      $  3,423    $   548
                                          ======================================


                                     -22-
<PAGE>


QUARTERLY RESULTS
(unaudited)
(Canadian GAAP, amounts in thousands of U.S. dollars, except share data)

Fiscal Quarter     Sales      Net Income     Basic Earnings     Diluted Earnings
                                (Loss)      (Loss) Per Share    (Loss) Per Share

Dec 31/01        $  44,102     $ (6,556)         $ (0.36)         $ (0.36)
Mar 31/02           46,073        3,735             0.20             0.20
Jun 30/02           44,024       (2,793)           (0.15)           (0.15)
Sep 30/02           46,201         (784)           (0.04)          (0.04)

Dec 31/02        $  44,076     $    779          $  0.04           $ 0.04
Mar 31/03           47,021        2,461             0.14             0.14
Jun 30/03           48,105          984             0.06             0.06
Sep 30/03           53,381        1,154             0.07             0.07

Dec 31/03        $  50,007     $ (2,029)         $ (0.12)         $ (0.12)
Mar 31/04           54,664        1,549             0.09             0.09
Jun 30/04           56,227        1,850             0.11             0.10
Sep 30/04           59,326        3,395             0.19             0.19



Dividends

The Company currently intends to retain earnings to finance the growth and
development of the Company's business and, therefore, the Company does not
anticipate paying cash dividends in the foreseeable future. The Company's
dividend policy will be reviewed from time to time in the context of its
earnings, financial condition and other relevant factors.


Description of Capital Structure

       The following table sets forth the capitalization of the Company as of
September 30, 2004:

<TABLE>
<CAPTION>

   (U.S. GAAP, amounts in thousands of U.S. dollars, except share data)

<S>                                                                               <C>
   Cash, cash equivalents and short term investments.........................     $   130,486
                                                                                  ===============
   Liabilities:
   Short-term liabilities....................................................     $    93,294
   Long-term liabilities.....................................................          12,436
                                                                                  ---------------
             Total liabilities...............................................         105,730
   Shareholders' equity:
         Common shares (authorized - unlimited; issued and outstanding -
         17,448,279).........................................................         164,521
         Additional paid-in capital..........................................           3,510
         Retained earnings...................................................          98,819
         Accumulated other comprehensive loss................................            (930)
                                                                                  ---------------
             Total shareholders' equity......................................         265,920
                                                                                  ---------------

         Total capitalization................................................     $   371,650
                                                                                  ===============
</TABLE>

                                        -23-
<PAGE>

<TABLE>
<CAPTION>

(Canadian GAAP, amounts in thousands of U.S. dollars, except share data)

<S>                                                                               <C>
   Cash, cash equivalents and short term investments............................  $   130,486
                                                                                  ===============
   Liabilities:
   Short-term liabilities.......................................................  $    93,294
   Long-term liabilities........................................................       15,214
                                                                                  ---------------
             Total liabilities..................................................      108,508

   Shareholders' equity:
         Common shares (authorized - unlimited; issued and outstanding -
         17,448,279)............................................................      199,534
         Retained earnings......................................................       43,399
         Cumulative translation adjustments.....................................          329
                                                                                  ---------------
             Total shareholders' equity.........................................      243,262
                                                                                  ---------------

         Total capitalization...................................................  $   351,770
                                                                                  ===============
</TABLE>


The above tables are based on the number of common shares outstanding on
September 30, 2004 and excludes:

o    5,286,596 common shares reserved for issuance under the Company's
     stock option plan as of September 30, 2004 that may be issued upon the
     exercise of options that may be granted after such date; and

o    2,639,241 common shares issuable upon exercise of stock options
     outstanding under the Company's stock option plan as of September 30,
     2004 at a weighted average exercise price of $28.74 per share.


5. MANAGEMENT'S DISCUSSION AND ANALYSIS

Reference is made to the section entitled "Management's Discussion and
Analysis" on pages 7 to 23 of the 2004 Annual Report to Shareholders, which
section is incorporated herein by reference.

6. MARKET FOR SECURITIES

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

7. DIRECTORS AND EXECUTIVE OFFICERS

The following table sets forth information about the Company's directors and
their respective positions as of January 31, 2005. The term of office of each
director expires at the end of the annual meeting of shareholders to be held on
March 9, 2005.

                                                 PRINCIPAL OCCUPATION
NAME AND ADDRESS                                 DATE ELECTED DIRECTOR

FRED SORKIN                                      Chairman of the Board of the
     Toronto, Ontario, Canada                    Company September, 1984


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


                                     -24-
<PAGE>

JOHN T. McLENNAN                                 Independent Director
     Mahone Bay, Nova Scotia, Canada             October, 1995


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


INDER P.S. DUGGAL                                Chief Financial Officer, Chief
     Richmond Hill, Ontario, Canada              Controller, Secretary and
                                                 Treasurer of the Company
                                                 May, 1999

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


STEPHEN A. CRANE                                 Independent Director
     New York, New York, U.S.A                   April 2004

JACK LANGER                                      Independent Director
     Old Pappan, New Jersey, U.S.A               April 2004


Fred 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 1, 2004. He currently serves on the Company's Corporate
Governance Committee. 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. In 1984 Mr. Litwin joined Mr. Sorkin in founding
Hummingbird. He currently serves as the Company's President and Chief Executive
Officer, a position he has held since December 1, 2004. Prior to this, Mr.
Litwin served as the Company's President, a position he had held since 1999.
Mr. Litwin has been a member of the Company's board of directors since 1984,
and has been the Company's chief product technology architect since the Company
was founded. 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 development.
In 1979, Mr. Litwin moved to Micom/Phillips where he again specialized in
software development. In 1981, Mr. Litwin moved to Execunet with Mr. Sorkin and
then to Mitel as Assistant to the Vice President, when Execunet was acquired by
Mitel in 1981. Mr. Litwin has a master's degree in Computer Science from McGill
University in Montreal.

Inder P.S. Duggal. Mr. Duggal currently serves as the Company's Chief
Financial Officer, Chief Controller, 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.

                                     -25-
<PAGE>

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.

Stephen A. Crane (1) (2) (3). Mr. Crane was appointed to the Company's board of
directors in April, 2004. He currently serves as a member of the Company's
Audit Committee, the Compensation Committee and the Corporate Governance
Committee. Mr. Crane has been Chairman and Chief Executive Officer of AlphaStar
Insurance Group Limited since November 1999. Since December 15, 2003 Alphastar
has been under bankruptcy protection pursuant to Chapter 11 of the United
States Bankruptcy Code. Mr. Crane also serves as Member of the Board of
AlphaStar Insurance Company and First Security Benefit and Life Insurance &
Annuity Company. Mr. Crane holds degrees from Princeton University and the
Harvard Graduate School of Business Administration.

Jack Langer (1) (2). Mr. Langer was appointed to the Company's board of
directors in April, 2004. He currently serves as a member of both the Audit
Committee and the Compensation Committee. Mr. Langer is a Member of the Board
of Directors for Spanish Broadcasting System, Inc. and Atlantic Broadband
Corporation. He also serves as Chairman of the Compensation Committee and is
an Audit Committee member of Spanish Broadcasting System, Inc. Mr. Langer
also served in a senior executive capacity as an investment banker with
Lehman Brothers Inc., Bankers Trust & Company, and Kidder Peabody & Company
Inc. Mr. Langer holds degrees from Yale College and Harvard Graduate School
of Business Administration.

Andrew J. Malik (3). Mr. Malik has been a member of the Company's board of
directors since 1997. He currently serves on the Company's Corporate Governance
Committee. Mr. Malik is a Managing Director and has been with Lehman Brothers
for 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. His clients
include Intel, IONA Technologies, Smart Force, MKS Instruments and Vitesse
Semiconductor. He sits on the board of advisors for TripleHop Technologies, and
holds other directorship positions.

John T. McLennan (2). Mr. McLennan has been a member of the Company's board of
directors since 1995. He currently serves as the Company's Vice Chairman and as
a member of the Compensation Committee. 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.

Mark D. Spitzer (1). Mr. Spitzer has been a member of the Company's board of
directors since 2000. He currently serves on the Company's Audit Committee. 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.

The board of directors of the Company is comprised of three committees, namely
the Audit Committee, Compensation Committee and Corporate Governance Committee.

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


                                    -26-
<PAGE>

The following table sets forth information about the Company's executive
officers and their respective positions as of January 31, 2005:

                                                            Position and
Name and Address                                         Principal Occupation
----------------                                   -----------------------------

ALAN BARRY LITWIN                                  President & Chief Executive
  Toronto, Ontario, Canada                         Officer

INDER P.S. DUGGAL                                  Chief Financial Officer,
  Richmond Hill, Ontario, Canada                   Chief Controller, Secretary
                                                    & Treasurer

ANDREW PERY                                        Chief Marketing Officer &
  Ottawa, Ontario, Canada                          Senior Vice President,
                                                   Marketing
JULIUS da COSTA
  Mississauga, Ontario, Canada                     Senior Vice President, Sales

TONY HEYWOOD
  London, United Kingdom                           Senior Vice President, EMEA

FABRIZIO MIGNINI
  New York, New York, U.S.A.                       Senior Vice President, Sales

BOB BERKOW
  New York, New York, U.S.A.                       Vice President

EUGENE CHERNY
  King City, Ontario, Canada                       Vice President

RODNEY DESMEULES                                   Vice President
  Hungerford, Berkshire, United Kingdom

ELIAS DIAMANTOPOLOUS                               Vice President
  Ottawa, Ontario, Canada

GIOVANNI EVANGELISTI                               Vice President
  Paris, France

ANDREW EWING                                       Vice President
  Wraysbury, Middlesex, United Kingdom

MARK FAGAN                                         Vice President
 Buckinghamshire, United Kingdom

LEO HEFFERNAN                                      Vice President
 Fenwick, Ontario, Canada

ALP HUG                                            Vice President
  Thornhill, Ontario, Canada

HEATHER PERCY                                      Vice President
 Toronto, Ontario, Canada

LARRY RUDOLF                                       Vice President
  Thornhill, Ontario, Canada

MICHAEL WAYLING
  Toronto, Ontario, Canada                         Vice President

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.
Fabrizio Mignini, Bob Berkow, Elias Diamantopolous, Giovanni Evangelisti and
Heather Percy all held senior management positions with PC DOCS Group
International Inc., a company which operated in the software and solutions
industry prior to being acquired by the Company in 1999. Tony

                                    -27-
<PAGE>

Heywood held a similar position with Xchange, Inc., a customer relationship
management company. Mark Fagan was the Chief Operating Manager for
Marketplace Relationship Management Limited. Andrew Ewing was founder and
principal of The Alliance Forge, providing consultancy, facilitation and
advocacy in the technology sector. Leo Heffernan held similar senior
management roles at both Sobey's Capital Inc. and Canadian Tire Financial
Services.

As a group, directors and senior officers own, directly or indirectly, or
exercise control or direction over approximately 2.1 million (12.2% of the
total outstanding) common shares of the Company, as at September 30, 2004. 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.

8. ADDITIONAL INFORMATION

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 prepared
for the annual meeting of shareholders to be held on March 9, 2005.

Additional financial information is provided in the Company's audited
consolidated financial statements for the year ended September 30, 2004
contained in its Annual Report to shareholders. A copy of this Annual
Information Form and each such document, including any interim financial
statements released by the Company, may be obtained upon request from the
Secretary of the Company at 1 Sparks Avenue, Toronto, Ontario, M2H 2W1.

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 will provide any person, upon request, with a copy of:
(i) this Annual Information Form, together with one copy of any document, or
the pertinent pages of any document, incorporated by reference herein; (ii) the
Company's most 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.

9. 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.

                                    -28-
<PAGE>

GLOSSARY OF TECHNICAL TERMS

Browser is a client program (software) that is used to look at various kinds of
Internet resources on the World Wide Web.

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.

Data Warehouse is a collection of data designed to support management decision
making. A data warehouse includes development of systems to extract data from
operating systems plus installation of a warehouse database system. Generally,
data warehouses combine many different databases across an enterprise.

E-mail (electronic mail) is a message, usually text, sent from one person to
another via computer and which may contain document attachments. E-mail can
also be sent automatically to a large number of addresses.

Fat Client is software that is installed and maintained on the desktop computer
rather than on the server (see Thin client). This software performs the bulk of
the data processing operations.

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.

Internet is the vast collection of inter-connected networks that all use the
TCP/IP protocols and that evolved from the ARPANET of the late 60's and early
70's. An internetwork is the connection of 2 or more networks.

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.

Local Area Network (LAN) is a computer network limited to the immediate area,
usually the same building or floor of a building.

Multithreaded refers to multiple units of execution, providing for increased
speed and more efficient usage of computer resources.

                                     -29-
<PAGE>

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.

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.

Telnet is the command and program used to login from one Internet site to
another. The telnet command/program gets you to the "login" prompt of another
host.

Terminal emulation is a device or application that allows a computer user to
send commands to another computer. At a minimum, it involves the use of a
keyboard and a display screen and some simple circuitry. Usually terminal
software in a personal computer is used and acts as ("emulates") a physical
terminal, allowing commands to be typed to a computer somewhere else.

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.

Window is a specific area on the display screen in which an application is
displayed. How windows look is defined by the graphic user interface and how
windows behave is enforced by the window manager.

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.

World Wide Web ("Web") is a network of computer servers that uses a special
communications protocol to link different servers throughout the Internet and
permits communication of graphics, video and sound. The Web is based on a
client/server model and a set of standards for information access and
navigation that permits non-technical users to exploit the capabilities of the
Internet.

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

                                     -30-
<PAGE>

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.


                                     -31-



<PAGE>

                                                                Document No. 2

<PAGE>



                                                                     U.S. GAAP



         Consolidated Financial Statements of


         HUMMINGBIRD LTD.


         September 30, 2004 and 2003

<PAGE>

Auditors' Report                                                      U.S. GAAP


TO THE SHAREHOLDERS OF HUMMINGBIRD LTD.


We have audited the consolidated balance sheets of Hummingbird Ltd. as at
September 30, 2004 and 2003 and the consolidated statements of income,
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,
2004 and 2003 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.

On October 21, 2004 we reported separately to the Shareholders of Hummingbird
Ltd. on the consolidated financial statements for the same periods prepared in
accordance with Canadian generally accepted accounting principles.


/s/ Deloitte & Touche LLP
Chartered Accountants

Toronto, Ontario
October 21, 2004

                                                                             2
<PAGE>

Consolidated Balance Sheets                                           U.S. GAAP

<TABLE>
<CAPTION>
As at September 30 (thousands of U.S. dollars)                                           2004            2003
-------------------------------------------------------------------------------------------------------------
<S>                                                                               <C>             <C>
ASSETS

CURRENT
   Cash and cash equivalents (Note 3)                                             $   125,543     $    94,583
   Short-term investments (Note 3)                                                      4,943           9,425
   Accounts receivable, net of allowances of $9,272 in 2004 and $9,419 in 2003         57,620          56,008
   Unbilled receivables                                                                   832             566
   Income taxes recoverable                                                                --           3,226
   Inventory                                                                              873             737
   Prepaid expenses                                                                     5,443           3,997
   Other receivables                                                                    2,138           4,007
-------------------------------------------------------------------------------------------------------------
                                                                                      197,392         172,549

OTHER ASSETS                                                                             3150           3,473
FIXED ASSETS (Note 4)                                                                  13,324          13,624
INTANGIBLES (Note 5)                                                                  157,784         176,144
-------------------------------------------------------------------------------------------------------------
                                                                                  $   371,650     $   365,790
=============================================================================================================

LIABILITIES
CURRENT
   Accounts payable and accrued liabilities (Note 6)                                   20,394          28,363
   Income taxes payable                                                                 7,167              --
   Current portion of other long-term liabilities (Note 7)                                212             965
   Deferred revenue                                                                    65,521          54,701
-------------------------------------------------------------------------------------------------------------
                                                                                       93,294          84,029
DEFERRED INCOME TAXES (Note 9)                                                         11,398          17,776
OTHER LONG-TERM LIABILITIES (Note 7)                                                    1,038           2,458
-------------------------------------------------------------------------------------------------------------
                                                                                      105,730         104,263
=============================================================================================================

SHAREHOLDERS' EQUITY
SHARE CAPITAL (Note 8)
   Authorized: unlimited common and preferred shares
   Issued and outstanding: 17,448,279 common in 2004 and 17,544,953 in 2003           164,521         164,307
ADDITIONAL PAID-IN CAPITAL                                                              3,510           3,510
RETAINED EARNINGS                                                                      98,819          94,640
ACCUMULATED OTHER COMPREHENSIVE LOSS                                                     (930)           (930)
-------------------------------------------------------------------------------------------------------------
                                                                                      265,920         261,527
-------------------------------------------------------------------------------------------------------------
                                                                                      371,650         365,790
=============================================================================================================
</TABLE>

Approved by the Board of Directors

/s/ Fred Sorkin                                      /s/ Mark D. Spitzer
Fred Sorkin, Director                                Mark D. Spitzer, Director

                                                                             3
<PAGE>

Consolidated Statements of Income                                    U.S. GAAP

<TABLE>
<CAPTION>
Years ended September 30
(thousands of U.S. dollars, except share data)                     2004            2003
---------------------------------------------------------------------------------------

<S>                                                         <C>             <C>
SALES                                                       $   220,224     $   192,583
COST OF SALES                                                    26,062          18,477
---------------------------------------------------------------------------------------
GROSS PROFIT                                                    194,162         174,106
---------------------------------------------------------------------------------------
EXPENSES
   Sales and marketing                                           94,947          82,004
   Research and development                                      40,074          37,810
   General and administration                                    21,241          20,582
   Amortization of intangibles                                   22,892          19,662
   In-process research and development (Note 2)                      --           4,269
---------------------------------------------------------------------------------------
TOTAL EXPENSES                                                  179,154         164,327
---------------------------------------------------------------------------------------
OPERATING INCOME                                                 15,008           9,779
INTEREST AND OTHER INCOME, NET                                    1,405           1,594
---------------------------------------------------------------------------------------
INCOME BEFORE INCOME TAXES                                       16,413          11,373
---------------------------------------------------------------------------------------
INCOME TAX EXPENSE (RECOVERY) (Note 9)
   Current                                                       16,192          12,243
   Deferred                                                      (6,650)         (4,590)
---------------------------------------------------------------------------------------
                                                                  9,542           7,653
---------------------------------------------------------------------------------------
NET INCOME                                                  $     6,871     $     3,720
=======================================================================================
BASIC EARNINGS PER SHARE                                    $      0.39     $      0.21
=======================================================================================
DILUTED EARNINGS  PER SHARE                                      $0. 39     $      0.21
=======================================================================================
BASIC WEIGHTED AVERAGE NUMBER OF SHARES (in thousands)           17,556          17,816
=======================================================================================
DILUTED WEIGHTED AVERAGE NUMBER OF SHARES (in thousands)         17,720          17,928
=======================================================================================
</TABLE>

                                                                             4
<PAGE>

Consolidated Statements of Shareholders' Equity                      U.S. GAAP

<TABLE>
<CAPTION>

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

                                                                                               Accumulated
                                       Common Shares            Additional                           Other
                                         (Note 8)                  Paid-In        Retained   Comprehensive
                                     Shares          Amount        Capital        Earnings            Loss          Total
-------------------------------------------------------------------------------------------------------------------------

<S>                             <C>            <C>             <C>            <C>             <C>             <C>
BALANCE AS AT
   SEPTEMBER 30, 2002           18,307,438     $   171,040     $     3,510    $    98,864     $      (930)    $   272,484

COMPREHENSIVE INCOME
   Net income                           --              --              --          3,720              --           3,720

SHARES REPURCHASED (Note 8)       (816,400)         (7,638)             --         (7,944)             --         (15,582)

STOCK OPTIONS EXERCISED
   DURING FISCAL 2003
   UNDER THE ESOP (Note 8)          53,915             905              --             --              --             905

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

BALANCE AS AT
   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 (Note 8)       (215,300)         (2,026)             --         (2,692)             --          (4,718)

STOCK OPTIONS EXERCISED
   DURING FISCAL 2004
   UNDER THE ESOP (Note 8)         118,626           2,240              --             --              --           2,240

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

BALANCE AS AT
   SEPTEMBER 30, 2004           17,448,279     $   164,521     $     3,510    $    98,819     $      (930)    $   265,920
==========================================================================================================================
</TABLE>

                                                                             5
<PAGE>

Consolidated Statements of Cash Flows                                U.S. GAAP

<TABLE>
<CAPTION>
Years ended September 30 (thousands of U.S. dollars)                       2004            2003
-----------------------------------------------------------------------------------------------
NET INFLOW (OUTFLOW) OF CASH RELATED TO THE FOLLOWING ACTIVITIES

<S>                                                                 <C>             <C>
OPERATING
Net income                                                          $     6,871     $     3,720
Add (deduct) items not affecting cash:
   Amortization of intangibles                                           22,892          19,662
   In-process research and development                                       --           4,269
   Deferred income taxes                                                 (6,594)         (5,031)
   Depreciation                                                           3,737           3,808
Changes in operating assets and liabilities:
   Accounts receivable                                                   (1,612)          1,193
   Unbilled receivables                                                    (266)            340
   Income taxes payable/recoverable                                      10,609           6,105
   Inventory                                                               (136)           (217)
   Prepaid expenses and other assets                                     (1,123)           (797)
   Other receivables                                                      1,869             366
   Accounts payable and accrued liabilities                              (7,969)            590
   Deferred revenue                                                      10,820           5,956
-----------------------------------------------------------------------------------------------
                                                                         39,098          39,964
-----------------------------------------------------------------------------------------------
INVESTING
   Short-term investments - net matured                                   4,482          13,746
   Acquisition of subsidiaries - net of cash acquired (Note 2)           (4,532)        (37,634)
   Additions to fixed assets                                             (3,437)         (3,446)
-----------------------------------------------------------------------------------------------
                                                                         (3,487)        (27,334)
-----------------------------------------------------------------------------------------------
FINANCING
   (Repayment of) increase in  other long-term liabilities               (2,173)             77
   Shares repurchased (Note 8)                                           (4,718)        (15,582)
   Issuance of shares                                                     2,240             905
-----------------------------------------------------------------------------------------------
                                                                         (4,651)        (14,600)
-----------------------------------------------------------------------------------------------
INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS                         30,960          (1,970)
CASH AND CASH EQUIVALENTS, BEGINNING OF YEAR                             94,583          96,553
-----------------------------------------------------------------------------------------------
CASH AND CASH EQUIVALENTS, END OF YEAR                              $   125,543     $    94,583
===============================================================================================

SUPPLEMENTARY CASH FLOW INFORMATION
   Interest paid                                                    $        32     $        41
   Income taxes paid                                                      5,583           7,554
   Interest received                                                      1,530           1,295
</TABLE>

                                                                             6
<PAGE>

Notes to the Consolidated Financial Statements                       U.S. GAAP


September 30, 2004 and 2003
(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.

     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.

          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 a other than temporary impairment in
               their value.

          v)   Unbilled receivables

               Unbilled receivables represent amounts receivable 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, 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.

         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 is 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.

                                                                             7
<PAGE>

Notes to the Consolidated Financial Statements                       U.S. GAAP

          ix)  Intangibles

               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. SFAS No.
               142 requires that the carrying value of goodwill be evaluated
               annually for impairment and disallows the amortization of
               goodwill. Accordingly, there is no amortization of goodwill
               included in amortization expense.

               SFAS No. 142 also requires that an annual impairment test date
               be selected where a two-step process will be performed on an
               annual basis. The Company has chosen August 1 as the date for
               this annual impairment test. On August 1, 2004 the Company
               performed the annual impairment test and determined there was
               no impairment of the recorded goodwill. As a result, the second
               step was not required.

               Intangible assets (excluding goodwill) are subject to
               amortization and have weighted average useful lives as follows:

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

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

          x)   Revenue recognition

               The Company follows the provisions of Statement of Position
               (SOP) 97-2, "Software Revenue Recognition" and Staff Accounting
               Bulletin (SAB) 101, "Revenue Recognition in Financial
               Statements." Revenue is recognized from the sale of product and
               software licenses when delivery has occurred based on purchase
               orders, provided that no significant vendor obligations remain
               and 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 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 Company and all of its
               subsidiaries is the U.S. dollar. Accordingly, 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 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 occur and are disclosed in Note 12.

          xii) Income taxes

               The Company calculates its provision for income taxes in
               accordance with Statement of Financial Accounting Standards No.
               109 "Accounting for Income Taxes" ("SFAS 109"), 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.

                                                                             8
<PAGE>

Notes to the Consolidated Financial Statements                       U.S. GAAP


          xiii) Investment tax credits

               Investment tax credits arising from qualifying scientific
               research and experimental development costs are recorded as a
               reduction 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)  Product 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 criteria.
               Capitalized costs are amortized on a straight-line basis over
               the remaining economic life of the related product, 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.

          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
               swaps. 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 (loss) when the hedged item affects net earnings
               (loss). Ineffective portions of changes in the fair value of
               the hedge are recognized in net earnings (loss). 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 (loss).
               During the year ended September 30, 2004, the Company did not
               enter into any short-term derivative contracts. During the year
               ended September 30, 2003, the Company entered into minor
               short-term derivative contracts. As at September 30, 2004 and
               2003 there were no outstanding derivative instruments.

         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 on a straight-line
               basis 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 the fair market value of the
               shares at the time of grant.

               Had the Company applied a fair value based method described by
               Statement of Financial Accounting Standards No. 123 ("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 effected the amounts indicated
               below for the following years:

<TABLE>
<CAPTION>
                                                                           2004            2003
               --------------------------------------------------------------------------------
<S>                                                                 <C>             <C>
               Net income - reported                                $     6,871     $     3,720
               Stock-based compensation expense                          (3,473)         (4,849)
               --------------------------------------------------------------------------------
               Net income (loss) - pro forma                        $     3,398     $    (1,129)
               ================================================================================
               Basic earnings per share - reported                  $      0.39     $      0.21
               --------------------------------------------------------------------------------
               Diluted earnings per share - reported                $      0.39     $      0.21
               --------------------------------------------------------------------------------
               Basic earnings (loss) per share - pro forma          $      0.19     $     (0.06)
               --------------------------------------------------------------------------------
               Diluted earnings (loss) per share - pro forma        $      0.19     $     (0.06)
               --------------------------------------------------------------------------------
</TABLE>

                                                                             9
<PAGE>

Notes to the Consolidated Financial Statements                       U.S. GAAP

                 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 2004 and 2003, as follows:

<TABLE>
<CAPTION>
                                                                            2004       2003
                 --------------------------------------------------------------------------
<S>                                                                         <C>        <C>
                 Expected dividend                                          0.0%       0.0%
                 Expected volatility                                       41.8%      42.4%
                 Risk-free interest rate                                    4.0%       4.0%
                 Expected option life in years                                4          4
                 Weighted average stock option fair value per option     $ 8.46     $ 7.91
                 --------------------------------------------------------------------------
</TABLE>

        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 FASB Statement 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)  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.

                                                                            10
<PAGE>

Notes to the Consolidated Financial Statements                       U.S. GAAP


2.   ACQUISITIONS

     Fiscal 2004

     There were no acquisitions during the year ended September 30, 2004,
     however there was contingent consideration paid on behalf of the fiscal
     2003 acquisitions as noted below.

     Fiscal 2003

     The following table summarizes the estimated fair value of assets
     acquired and liabilities assumed for the acquisitions in the fiscal year
     2003:

<TABLE>
<CAPTION>
                                                    Dispro/Key                                         Diamond
                                      LegalKEY      Automation      Kramer Lee           Valid            Head          Total
-----------------------------------------------------------------------------------------------------------------------------
<S>                                <C>             <C>             <C>             <C>             <C>            <C>
Current assets                     $     2,998     $     3,490     $     1,624     $     1,140     $        --    $     9,252

Fixed assets                               178             206           1,191             370              --          1,945

Liabilities                             (2,108)         (2,377)         (4,098)         (6,740)             --        (15,323)

Deferred income taxes                   (1,247)         (1,102)         (1,489)         (4,903)             --         (8,741)
Intangibles
  Acquired technology                    2,224           2,245           1,369          13,669              --         19,507
  In-process research
   and development                         809             241              --           3,219              --          4,269
  Non-competition agreements               599             905           2,597           2,204              --          6,305
  Trademarks                               295              --              --              --              --            295
  Customer relationships                    --              --             568              --              --            568
  Customer contracts                        --              --             428             470              --            898
  Goodwill                                 875           5,742           3,941           8,286           2,100         20,944
-----------------------------------------------------------------------------------------------------------------------------
                                   $     4,623     $     9,350     $     6,131     $    17,715     $     2,100    $    39,919
=============================================================================================================================

Consideration given:
  Cash paid                        $     4,400     $     9,074     $     5,785     $    15,778     $     2,100    $    37,137
  Transaction costs                        169             227             248             806              --          1,450
  Integration costs                         54              49              98             300              --            501

  Retention money                           --              --              --             831              --            831
-----------------------------------------------------------------------------------------------------------------------------
                                   $     4,623     $     9,350     $     6,131     $    17,715     $     2,100    $    39,919
=============================================================================================================================

Contingent consideration paid in
2004:                              $       810     $        --     $        --     $     3,722     $        --    $     4,532
=============================================================================================================================
</TABLE>

     The acquisitions were accounted for as purchase transactions in
     accordance with SFAS 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. 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 project.


                                                                            11
<PAGE>

Notes to the Consolidated Financial Statements                       U.S. GAAP


     The amounts allocated to IPR&D projects were expensed in the period that
     the acquisition occurred if technological feasibility of the project had
     not been achieved and no alternative future uses had been established. In
     connection with the acquisitions described below, IPR&D expense of $4,269
     for the year ended September 30, 2003 represents the write off of IPR&D.

     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                           3 years
         Trademarks                                           5 years
         Customer relationships                               3 years
         Customer contracts                                   1 year


     Goodwill recorded on acquisition will not be amortized but instead will
     be subject to the annual impairment test of all recorded goodwill.

     The results of operations of the acquired entities have been included in
     the Company's financial statements subsequent to the dates of
     acquisition.


     Legal Key Technologies, Inc.

     On March 10, 2003, the Company acquired 100% of the issued and
     outstanding shares of Legal Key Technologies, Inc. ("LegalKEY").

     LegalKEY, based in New York, U.S.A., was a privately held software and
     solutions company specializing in integrated practice management
     applications for law firms and professional service organizations.

     Under the terms of the acquisition, the Company paid cash of $4,400 for
     LegalKEY. In addition, during fiscal 2004 the Company made a contingent
     payment of $810 based on the agreed upon financial performance in
     calendar year 2003, and may be required to make a further contingent
     payment, in cash, of up to $800 subject to interest accrued annually at 1
     1/2 % based on the agreed upon financial performance in calendar year
     2004. This and any future payment in connection with this acquisition
     will be accounted for as goodwill. The Company incurred direct
     transaction and integration costs of $223 as a result of this
     acquisition.


     Key Automation Nederland B.V. and its affiliate Dispro B.V

     On March 26, 2003, the Company acquired 100% of the issued and
     outstanding shares of Key Automation Nederland B.V. and its affiliate
     Dispro B.V. ("Dispro/Key Automation").

     Dispro/Key Automation, based in the Netherlands, were privately held
     distributors and integrators of document management solutions. Dispro/Key
     Automation were already long-standing partners of the Company with over
     ten years of experience in the deployment and integration of Hummingbird
     products.

     Under the terms of the acquisition, the Company paid cash of $9,074 for
     Dispro/Key Automation. The Company incurred direct transaction and
     integration costs of $276 as a result of this acquisition.


     Kramer Lee & Associates

     On June 26, 2003, the Company acquired 100% of the issued and outstanding
     shares of Kramer Lee & Associates ("Kramer Lee").

     Kramer Lee, based in the UK, was a privately held software and solutions
     company specializing in domain expertise in practice management solutions
     for law firms, professional service organizations, investment banks and
     insurance companies.

     Under the terms of the acquisition, the Company paid cash of $5,785 for
     Kramer Lee. In addition, the Company may be required to make the
     remaining contingent payment, in cash, to Kramer Lee of up to $367 (200
     GBP), based on the agreed upon financial performance subsequent to the
     acquisition. Any future payment in connection with this acquisition will
     be accounted for as goodwill. The Company incurred direct transaction and
     integration costs of $346 as a result of this acquisition.

                                                                            12
<PAGE>

Notes to the Consolidated Financial Statements                       U.S. GAAP


     Valid Information Systems Limited

     On July 1, 2003, the Company acquired 100% of the issued and outstanding
     shares of Valid Information Systems Limited ("Valid").

     Valid, based in the United Kingdom, was a privately held software and
     solutions company that operates in the compliance and records management
     market in the United Kingdom.

     Under the terms of the acquisition, the Company paid cash of $15,778
     towards the purchase price of $16,609 (10,000 GBP). The remaining amount
     of $831 is payable 30 months from the date of acquisition and is shown
     under other long-term liabilities (see Note 7). In addition, during
     fiscal 2004 the Company made a contingent payment of $3,722 (2,000 GBP)
     based on the agreed upon financial performance in calendar year 2004, and
     may be required to make a further contingent payment, in cash, of up to
     $11,464 (6,250 GBP) based on the agreed upon financial performance of
     Valid in the fiscal year of 2005. This and any future contingent payment
     in connection with this acquisition will be accounted for as goodwill.
     The Company incurred direct transaction and integration costs of $1,106
     as a result of this acquisition.


     Diamond Head Software, Inc.

     During fiscal 2000, the Company acquired certain assets of Diamond Head
     Software, Inc. ("Diamond Head"). The asset purchase agreement included
     contingent consideration based on the revenue or income of certain
     products to be earned over a period of 3 years from the acquisition date.
     During fiscal 2003, the Company made a one-time payment of $2,100 in
     relation to this contingent consideration.

     Integration Costs

     The following table provides a summary of the integration costs relating
     to the 2003 acquisitions:

<TABLE>
<CAPTION>
                                            Employee
                                               Costs         Other           Total
     -------------------------------------------------------------------------------
<S>                                      <C>             <C>             <C>
     Integration costs on acquisition    $       335     $       166     $       501
     Amounts incurred in 2003                    (78)            (39)           (117)
     -------------------------------------------------------------------------------
     Balance September 30, 2003                  257             127             384
     Amounts incurred in 2004                   (257)           (127)           (384)
     -------------------------------------------------------------------------------
     Balance September 30, 2004          $        --     $        --     $        --
     ===============================================================================
</TABLE>


     Pro Forma Information

     Unaudited pro forma results, assuming the acquisitions had taken place at
     the beginning of fiscal 2003 are estimated to be as follows for the year
     ended September 30, 2003:

                                                                           2003
      -------------------------------------------------------------------------
      Sales                                                           $ 201,953
      -------------------------------------------------------------------------
      Net loss                                                        $  (2,153)
      -------------------------------------------------------------------------
      Diluted loss per share                                          $   (0.12)
      -------------------------------------------------------------------------


     These pro forma results have been prepared for comparative purposes only
     and may not be indicative of what the actual consolidated results of
     operations might have been if the acquisitions had been effective at the
     beginning of fiscal 2003.


3.   CASH AND SHORT-TERM INVESTMENTS

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

     As at September 30, 2004 the Company had $4,943 (2003 - $9,425) 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. There were no sales of short-term investments during
     the year.


                                                                            13
<PAGE>

Notes to the Consolidated Financial Statements                       U.S. GAAP


4.   FIXED ASSETS

<TABLE>
<CAPTION>
                                                                    2004                                         2003
                               --------------------------------------------------------------------------------------
                                              Accumulated       Net Book                   Accumulated       Net Book
                                      Cost   Depreciation          Value           Cost   Depreciation          Value
                               --------------------------------------------------------------------------------------

<S>                            <C>            <C>            <C>            <C>            <C>            <C>
     Land and buildings        $     4,984    $     1,334    $     3,650    $     4,742    $     1,076    $     3,666
     Laboratory equipment           40,198         32,516          7,682         37,092         29,576          7,516
     Furniture and fixtures          8,898          8,107            791          8,715          7,578          1,137
     Leasehold improvements          3,808          2,607          1,201          3,676          2,371          1,305
     ----------------------------------------------------------------------------------------------------------------
                               $    57,888    $    44,564    $    13,324    $    54,225    $    40,601    $    13,624
     ================================================================================================================
</TABLE>


5.   INTANGIBLES

<TABLE>
<CAPTION>
                                                                           2004                                         2003
                                      --------------------------------------------------------------------------------------
                                                     Accumulated       Net Book                   Accumulated       Net Book
                                             Cost   Depreciation          Value           Cost   Depreciation          Value
                                      --------------------------------------------------------------------------------------

<S>                                   <C>            <C>            <C>            <C>            <C>            <C>
     Acquired technology              $   101,907    $    65,493    $    36,414    $   101,907    $    50,256    $    51,651
     Other intangibles                     50,666         35,586         15,080         50,666         27,931         22,735
     -----------------------------------------------------------------------------------------------------------------------
     Total subject to amortization        152,573        101,079         51,494        152,573         78,187         74,386
      Goodwill                            155,784         49,494        106,290        151,252         49,494        101,758
     -----------------------------------------------------------------------------------------------------------------------
                                      $   308,357    $   150,573    $   157,784    $   303,825    $   127,681    $   176,144
     =======================================================================================================================
</TABLE>


     The following table provides a summary of goodwill:

<TABLE>
<CAPTION>
                                                                          Total
     --------------------------------------------------------------------------
<S>                        <C>                                           <C>
     Balance as at October 1, 2002                                    $ 130,308
     Additions during the year due to:
        Acquisitions (Note 2)                                            18,844
        Contingent consideration (Note 2)                                 2,100
     --------------------------------------------------------------------------
     Balance as at September 30, 2003                                   151,252
     Additions during the year due to:
        Contingent consideration (Note 2)                                 4,532
     --------------------------------------------------------------------------
     Balance as at September 30, 2004                                 $ 155,784
     --------------------------------------------------------------------------
</TABLE>


     The estimated amortization of the intangibles for the next five years and
     thereafter is as follows:

          2005                                                        $  18,123
          2006                                                           15,496
          2007                                                           11,496
          2008                                                            4,928
          2009                                                            1,451
     --------------------------------------------------------------------------
                                                                      $  51,494
     ==========================================================================


                                                                            14
<PAGE>

Notes to the Consolidated Financial Statements                       U.S. GAAP


6.   ACCOUNTS PAYABLE AND ACCRUED LIABILITIES

                                                           2004           2003
     --------------------------------------------------------------------------
     Accounts payable - trade                       $     8,420    $    11,062
     Accruals:
        Trade payables                                    5,859          8,671
        Payroll related                                   6,054          6,455
        Acquisition related                                  --          1,705
         Other                                               61            470
     --------------------------------------------------------------------------
                                                    $    20,394    $    28,363
     ==========================================================================


7.   OTHER LONG-TERM LIABILITIES

     Other long-term liabilities consists of the following:

                                                           2004           2003
     --------------------------------------------------------------------------
     Lease inducements                              $       255    $       362
     Retention money on Valid acquisition (Note 2)          831            831
     Long-term debt, described below, is
     comprised of:
        Capital lease obligations                           164            384
        Overdraft facility                                   --            187
        Term loans                                           --            874
        Mortgage                                             --            785
     --------------------------------------------------------------------------
                                                          1,250          3,423
       Less: amounts due within one year                    212            965
     --------------------------------------------------------------------------
                                                    $     1,038    $     2,458
     ==========================================================================


     Capital lease obligations are comprised of various leases for
     automobiles, bearing interest from 10.0% to 15.0% per annum, repayable in
     monthly installments of principal and interest totaling $10, expiring
     over the next one to two years, and are secured by the underlying assets.
     These leases are obligations of a subsidiary acquired during fiscal 2003.

     The overdraft facility, term loans and mortgage were obligations of
     subsidiaries acquired during fiscal 2003, and were fully repaid during in
     the year.

     During the year ended September 30, 2004, interest expense on long-term
     debt was $30 (2003 - $48).


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

         2005                                                      $       104
         2006                                                               60
         ---------------------------------------------------------------------
                                                                   $       164
         =====================================================================


                                                                            15
<PAGE>

Notes to the Consolidated Financial Statements                       U.S. GAAP


8.   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, 118,626 common shares were issued pursuant to the
     Employee Stock Option Plan for proceeds of $2,240 (2003 - 53,915 for
     $905).

     Share Repurchase Program

     On November 13, 2003, the Company received approval to commence a normal
     course issuer bid ("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 is
     to terminate on the earlier of November 16, 2004, or the date on which a
     total of 1,000,000 common shares have been repurchased pursuant to its
     terms.

     During the 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.

     On October 24, 2002 the Company received approval to commence a normal
     course issuer bid ("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 bid commenced on October 29, 2002 and was to
     terminate on the earlier of October 28, 2003 or the date on which a total
     of 1,000,000 common shares had been repurchased pursuant to the Bid. The
     Bid terminated on October 28, 2003 and the total number of shares
     repurchased and subsequently cancelled was 816,400.

     During the year ended September 30, 2003, the Company repurchased and
     cancelled 816,400 shares under the Bid at an average price of $19.09 per
     share for a total consideration of $15,582, which was applied to reduce
     share capital and retained earnings by $7,638 and $7,944, respectively.


                                                                            16
<PAGE>

Notes to the Consolidated Financial Statements                       U.S. GAAP


     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). This
     plan replaced the 1993 Employee Stock Option Plan, which had been in
     effect since July 1993. 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, 2004, 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>           <C>
     Outstanding as at October 1, 2002          2,798,012        $  17.24   -   $ 52.29       $   34.83
         Granted                                  465,950           17.61   -     25.68           19.96
         Exercised                                (53,915)          17.24   -     22.34           19.76
         Cancelled                               (274,731)          17.24   -     52.39           35.54
     -------------------------------------------------------------------------------------------------------
     Outstanding as at September 30, 2003       2,935,316           17.24   -     52.29           26.24
         Granted                                  335,050           20.95   -     23.91           22.25
         Exercised                               (118,626)          17.24   -     25.26           18.66
         Cancelled                               (512,499)          17.24   -     52.29           31.33
     -------------------------------------------------------------------------------------------------------
     Outstanding as at September 30, 2004       2,639,241        $  17.24   -   $ 52.29       $   28.74
     -------------------------------------------------------------------------------------------------------
</TABLE>


     The following stock options have been granted and remain outstanding at
     September 30, 2004:

<TABLE>
<CAPTION>
                                    Options Outstanding                                   Options Exercisable
      ---------------------------------------------------------------------------    ------------------------------
                                                                 Weighted Average
            Range of            Number      Weighted Average      Remaining Life       Number      Weighted Average
        Exercise Prices *     of Options     Exercise Price*         in Years        of Options     Exercise Price*
      -------------------------------------------------------------------------------------------------------------
<S>                           <C>               <C>                    <C>             <C>              <C>
       $ 17.24 - $ 21.37      1,008,703         $  19.29               3.6             585,314          $  19.05
         22.08 -   25.68        971,172            24.38               3.0             588,383             24.91
         29.26 -   39.62        103,200            35.64               2.0             103,200             35.64
         43.86 -   52.29        556,166            52.22               1.6             556,166             52.22
      -------------------------------------------------------------------------------------------------------------
                              2,639,241         $  28.74               2.9           1,833,063          $  31.93
      =============================================================================================================
</TABLE>

     *    - 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, 2004.


                                                                            17
<PAGE>

Notes to the Consolidated Financial Statements                       U.S. GAAP


9.   INCOME TAXES

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

<TABLE>
<CAPTION>
                                                                                                2004            2003
     ---------------------------------------------------------------------------------------------------------------
<S>                                                                                      <C>             <C>
     Income before income taxes                                                          $    16,413     $    11,373
     ===============================================================================================================

     Combined basic Federal and Provincial income taxes at 36.25% (37.12% - 2003)        $     5,950     $     4,222
     Increase (decrease) resulting from:
        Foreign rate differences                                                                 460             559
        Non-deductible amortization of intangibles                                             1,142           3,019
          Effects on deferred tax amounts from increases in income tax rate                    2,141              --
        Non-deductible amounts                                                                 2,175             935
          Investment tax credits                                                              (1,600)         (1,780)
        Other                                                                                   (726)            698
     ---------------------------------------------------------------------------------------------------------------
     Income tax expense                                                                  $     9,542     $     7,653
     ===============================================================================================================
</TABLE>


     The income tax expense is made up of the following components:

<TABLE>
<CAPTION>
                                                                                                2004            2003
     ---------------------------------------------------------------------------------------------------------------
<S>                                                                                      <C>             <C>
     Current income tax expense                                                          $    16,192     $    12,243
     Deferred income tax (recovery) expense relating to:
        Temporary differences                                                                 (8,791)         (4,813)
        Loss carry-forwards                                                                       --             223
        Increase in income tax rate                                                            2,141              --
     ---------------------------------------------------------------------------------------------------------------
     Income tax expense                                                                  $     9,542     $     7,653
     ===============================================================================================================
</TABLE>


     The Company's deferred tax assets and (liabilities) consisted of the
     following:

<TABLE>
<CAPTION>
                                                                                                2004            2003
     ---------------------------------------------------------------------------------------------------------------
<S>                                                                                      <C>             <C>
     Deferred tax assets
        Temporary differences:
           Tax value of fixed assets in excess of net book value                         $       678     $     1,737
           Expenses not currently deductible for tax purposes                                  6,755           4,352
     ---------------------------------------------------------------------------------------------------------------
                                                                                               7,433           6,089
        Loss carry-forwards, scientific research and development expenditures,
          and investment tax credits                                                          52,236          13,681
        Share issue costs                                                                         --             203
     ---------------------------------------------------------------------------------------------------------------
                                                                                              59,669          19,973
     ---------------------------------------------------------------------------------------------------------------
     Deferred tax liabilities
        Temporary differences:
           Net book value of identifiable intangible assets in excess of tax bases           (19,727)        (24,939)
           Net book value of other assets in excess of tax values                               (271)           (324)
     ---------------------------------------------------------------------------------------------------------------
                                                                                             (19,998)        (25,263)
     ---------------------------------------------------------------------------------------------------------------
     Valuation allowance                                                                     (51,069)        (12,486)
     ---------------------------------------------------------------------------------------------------------------
     Net deferred liabilities                                                            $   (11,398)    $   (17,776)
     ===============================================================================================================
</TABLE>


     A valuation allowance of $51,069 (2003 - $12,486) 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 not certain that the
     income tax benefit will be realized.

                                                                            18
<PAGE>

Notes to the Consolidated Financial Statements                       U.S. GAAP


     As of September 30, 2004, the Company has tax losses of approximately
     $45,177 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      Canada    Germany      France       Italy       Japan   Singapore     Kingdom      U.S.A.    Total
             --------------------------------------------------------------------------------------------------------------------
<C>          <C>          <C>        <C>         <C>         <C>         <C>         <C>         <C>         <C>         <C>
2005         $      --   $      --   $     --   $      --   $      --   $   1,181   $      --   $      --   $      --   $   1,181
2006                --          --         --          --          --         989          --          --          --         989
2007                --       2,715         --          --          --          --          --          --          --       2,715
2008                --          --         --          --          --          --          --          --          --          --
2009                --          --         --          --          --         968          --          --          --         968
2010                --          --         --          --          --         354          --          --       1,109       1,463
2011                --          --         --          --          --         134          --          --         250         384
Indefinite         662          --      7,212   $  12,663       1,345          --         669      14,926          --      37,477
---------------------------------------------------------------------------------------------------------------------------------
             $     662   $   2,715   $  7,212   $  12,663   $   1,345   $   3,626   $     669   $  14,926   $   1,359   $  45,177
=================================================================================================================================
</TABLE>

     The Company has carried forward to future periods scientific research and
     development expenditures of approximately $46,000 for Canadian federal
     tax purposes and $40,000 for Ontario 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 $7,380 that expire in 2011 and 2012 in the amounts of $3,668
     and $3,712, respectively.


10.  EARNINGS PER COMMON SHARE

     Basic earnings per share have been calculated based on the weighted
     average number of common shares without the inclusion of dilutive
     effects. Diluted earnings per share are calculated based on the weighted
     average number of 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)                                                             2004     2003
     -----------------------------------------------------------------------------------------------
<S>                                                                                  <C>      <C>
     Weighted average number of basic shares outstanding                             17,556   17,816
     Incremental shares to be issued if stock options "in the money" are exercised      164      112
     -----------------------------------------------------------------------------------------------
     Weighted average number of diluted shares outstanding                           17,720   17,928
     ===============================================================================================
</TABLE>


     For the year ended September 30, 2004, 1,934,209 options (2003 -
     1,899,930) to purchase shares were excluded in the diluted share
     calculation because they were anti-dilutive for earnings per share
     purposes.

                                                                            19
<PAGE>

Notes to the Consolidated Financial Statements                       U.S. GAAP


11.  COMMITMENTS AND CONTINGENCIES

     Commitments

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

        2005                                                       $     6,871
        2006                                                             5,329
        2007                                                             3,920
        2008                                                             3,312
        2009                                                             2,854
        Thereafter                                                       3,354
        ----------------------------------------------------------------------
                                                                    $   25,640
        ======================================================================


     Product Warranties

     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 provision, and as
     such there is no warranty provision recorded in the accompanying
     consolidated balance sheet or reflected in the results of operations for
     the year ended September 30, 2004.

     Contingent Payments

     During fiscal 2003, the Company acquired various subsidiaries (Note 2)
     and under the terms of the agreements, may be required to make further
     contingent payments up to a maximum of $12,631.

     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.


                                                                            20
<PAGE>

Notes to the Consolidated Financial Statements                       U.S. GAAP


12.  FINANCIAL INSTRUMENTS

     Off-balance sheet 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 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, 2004,
     the Company had no foreign exchange contracts outstanding. For the years
     ended September 30, 2004 and 2003 the Company had net foreign exchange
     gains of $2,219 and $4,028, respectively. These amounts have been
     recorded as a reduction in sales and marketing expenses.

     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 on the grade of
     securities, diversification of issuers and limitations on terms to
     maturity. Cash and cash equivalents at September 30, 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,
     long-term debt, capital lease obligations, other liabilities, accounts
     payable and accruals approximate fair value due to their short-term
     nature.


                                                                            21
<PAGE>
Notes to the Consolidated Financial Statements                       U.S. GAAP


13.  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

                                                           2004           2003
     -------------------------------------------------------------------------
     Hummingbird Connectivity                       $    70,029    $    70,617
     Hummingbird Enterprise                             150,195        121,966
     -------------------------------------------------------------------------
                                                    $   220,224    $   192,583
     =========================================================================


     Sales and long-lived assets by country of origin

<TABLE>
<CAPTION>

     September 30, 2004
                                     U.S.A.         Canada         Europe   Asia Pacific   Consolidated
     --------------------------------------------------------------------------------------------------
<S>                             <C>            <C>            <C>            <C>            <C>
     Sales                      $   108,223    $    18,562    $    87,033    $     6,406    $   220,224
     Fixed and other assets     $     1,899    $    10,281    $     3,909    $       385    $    16,474
     Intangibles                         --             --             --             --        157,784
     --------------------------------------------------------------------------------------------------
     Total long-lived assets             --             --             --             --    $   174,258
     ==================================================================================================


     September 30, 2003
                                     U.S.A.         Canada         Europe   Asia Pacific   Consolidated
     --------------------------------------------------------------------------------------------------
     Sales                      $   101,741    $    15,178    $    69,267    $     6,397    $   192,583
     Fixed and other assets     $     2,307    $    10,486    $     3,880    $       424    $    17,097
     Intangibles                         --             --             --             --    $   176,144
     --------------------------------------------------------------------------------------------------
     Total long-lived assets             --             --             --             --    $   193,241
     ==================================================================================================
</TABLE>

     It is not practicable to allocate intangibles by country of origin.


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

                                                         2004             2003
     --------------------------------------------------------------------------
     U.S.A.                                         $ 107,503         $ 100,529
     Europe                                            87,036           69,237
     Canada                                            13,703            10,051
     Other                                             11,982            12,766
     --------------------------------------------------------------------------
                                                    $ 220,224         $ 192,583
     ==========================================================================


                                                                            22
<PAGE>

Notes to the Consolidated Financial Statements                       U.S. GAAP


14.  GUARANTEES

     The Company has no guarantees and indemnities and as such, has not
     recorded a liability for guarantees and indemnities in the accompanying
     consolidated balance sheet as at September 30, 2004.


15.  NEW ACCOUNTING PRONOUNCEMENTS

     In January 2003, the FASB issued interpretation No. 46 ("FIN
     46"),"Consolidation of Variable Interest Entities". The primary
     objectives of this interpretation are to provide guidance on the
     identification of entities for which control is achieved through means
     other than through voting rights ("variable interest entities") and how
     to determine when and which business enterprise (the "primary
     beneficiary") should consolidate the variable interest entity. This new
     model for consolidation applies to an entity in which either (i) the
     equity investors (if any) do not have a controlling financial interest;
     or (ii) the equity investment at risk is insufficient to finance that
     entity's activities without receiving additional subordinated financial
     support from other parties. In addition, FIN 46 requires that the primary
     beneficiary, as well as all other enterprises with a significant variable
     interest entity, make additional disclosures. Certain disclosure
     requirements of FIN 46 were effective for financial statements issued
     after January 31, 2003. In December 2003, the FASB issued FIN 46 (revised
     December 2003), "Consolidation of Variable Interest Entities" ("FIN
     46-R") to address certain FIN 46 implementation issues. The effective
     dates and impact of FIN 46 and FIN 46-R are as follows: (i)
     Special-purpose entities ("SPEs") created prior to February 1, 2003. The
     Company must apply either the provisions of FIN 46 or early adopt the
     provisions of FIN 46-R at the end of the first interim or annual
     reporting period ending after December 15, 2003. (ii) Non-SPEs created
     prior to February 1, 2003. The Company is required to adopt FIN 46-R at
     the end of the first interim or annual reporting period ending after
     March 15, 2004. (iii) All entities, regardless of whether an SPE, that
     were created subsequent to January 31, 2003. The provisions of FIN 46
     were applicable for variable interests in entities obtained after January
     31, 2003. The Company does not have any arrangements with variable
     interest entities that will require consolidation of their financial
     information in the financial statements.

     In April 2003, the FASB issued SFAS No. 149, "Amendment of Statement 133
     on Derivative Instruments and Hedging Activities." SFAS No. 149 amends
     and clarifies financial accounting and reporting for derivative
     instruments, including certain derivative instruments embedded in other
     contracts and for hedging activities under SFAS No. 133, "Accounting for
     Derivative Instruments and Hedging Activities." The changes are intended
     to improve financial reporting by requiring that contracts with
     comparable characteristics be accounted for similarly. Additionally,
     those changes are expected to result in more consistent reporting of
     contracts as either derivatives or hybrid instruments. SFAS No. 149 is
     effective for contracts and hedging relationships entered into or
     modified after June 30, 2003, and for provisions that relate to SFAS
     No.133 implementation issues that have been effective for fiscal quarters
     that began prior to June 15, 2003, apply in accordance with their
     respective effective dates. The adoption of this statement did not have a
     significant effect on the Company's consolidated financial position or
     results of operations.

     In May 2003, the FASB issued SFAS No. 150, "Accounting for Certain
     Financial Instruments with Characteristics of both Liability and Equity."
     SFAS No. 150 establishes standards for how an issuer classifies and
     measures certain financial instruments with characteristics of both
     liability and equity. It also requires that an issuer classify a
     financial instrument that is within its scope as a liability (or an asset
     in some circumstances). Many of those instruments were previously
     classified as equity. SFAS No. 150 is effective for financial instruments
     entered into or modified after May 31, 2003, and otherwise is effective
     at the beginning of the first interim period beginning after June 15,
     2003, except for mandatorily redeemable noncontrolling interests. The
     adoption of this statement did not have a significant effect on the
     Company's consolidated financial position or results of operations.

                                                                            23



<PAGE>

                                                                Document No. 3


<PAGE>


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


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

HUMMINGBIRD LTD.


Year ended September 30, 2004

<PAGE>

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


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 Ontario Securities
Commission.

Overview

This MD&A is dated October 21, 2004 and should be read in conjunction with the
Company's September 30, 2004 annual audited consolidated financial statements
and notes. The Company reports its annual audited consolidated financial
statements and notes in U.S. dollars, and in accordance with U.S. GAAP. The
consolidated U.S. GAAP financial statements are included in the Annual Report
to Shareholders.

The Company is a leading global provider of enterprise software solutions. Our
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. Our solutions enable users to address critical business
needs, such as information management, business continuity, disaster recovery,
compliance and risk management. Our ECM solution is rooted in document
management, offering complete capabilities in records management, knowledge
management, collaboration, data integration and business intelligence, among
others. Our 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. Our products are marketed and sold through a direct
corporate sales force and a worldwide network of partners, resellers, and
distributors.

Acquisition History

There were no acquisitions in fiscal 2004, however as described below, two
contingent payments were made with respect to the 2003 acquisitions.

In fiscal 2003, the Company completed four acquisitions, as follows.

On July 1, 2003, the Company acquired all of the issued and outstanding shares
of Valid Information Systems Limited ("Valid"). Valid, based in the United
Kingdom, was a privately held software and solutions company that operates in
the compliance and records management market in the United Kingdom. The
Company paid $17.7 million in total consideration for Valid, including
transaction costs, integration costs and retention money. In addition, during
fiscal 2004 the Company made a contingent payment of $3.7 million based on the
agreed upon financial performance in calendar year 2004, and may be required
to make a further contingent payment, in cash, of up to $11.5 million based on
the agreed upon financial performance of Valid in the fiscal year of 2005.
This and any future contingent payment in connection with this acquisition
will be accounted for as goodwill.

On June 26, 2003, the Company acquired all of the issued and outstanding
shares of Kramer Lee & Associates ("Kramer Lee"). Kramer Lee, based in the UK,
was a privately held software and solutions company specializing in domain
expertise in practice management solutions for law firms, professional service
organizations, investment banks and insurance companies. Under the terms of
the acquisition, the Company paid cash of $6.1 million in total consideration
for Kramer Lee, including transaction and integration costs. In addition, the
Company may be required to make a contingent payment, in cash, to Kramer Lee
of up to $0.4 million, based on the agreed upon financial performance
subsequent to the acquisition. Any future payments in connection with this
acquisition will be accounted for as goodwill.

On March 26, 2003, the Company acquired all of the issued and outstanding
shares of Key Automation Nederland B.V. and its affiliate Dispro B.V.
("Dispro/Key Automation"). Dispro/Key Automation, based in the Netherlands,
were privately held distributors and integrators of document management
solutions. The Company paid $9.4 million in total consideration for Dispro/Key
Automation, including transaction costs and integration costs.


<PAGE>

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


On March 10, 2003, the Company acquired all of the issued and outstanding
shares of Legal Key Technologies, Inc. ("LegalKEY"). LegalKEY, based in New
York, U.S.A., was a privately held software and solutions company specializing
in integrated practice management applications for law firms and professional
service organizations. The Company paid $4.6 million in total consideration
for LegalKEY, including transaction costs and integration costs. In addition,
during fiscal 2004 the Company made a contingent payment of $0.8 million based
on the agreed upon financial performance in the calendar year 2003, and may be
required to make a further contingent payment, in cash, of up to $0.8 million
subject to interest accrued annually at 1 1/2 % based on the agreed upon
financial performance in the calendar year 2004. This and any future payment
in connection with this acquisition will be accounted for as goodwill.

These acquisitions were accounted for as purchase transactions in accordance
with the Statement of Financial Accounting Standards 141 for U.S. GAAP
purposes. Accordingly, the assets acquired and liabilities assumed were
recorded at their estimated fair values at the dates of the acquisition. The
results of operations have been included in the Company's financial statements
subsequent to the dates of acquisition. Goodwill recorded on acquisition will
not be amortized but instead will be subject to the annual impairment test of
all recorded goodwill.

Critical Accounting Policies and Estimates

The discussion and analysis of the Company's financial condition and results
of operations is based upon our consolidated financial statements, which have
been prepared in accordance with U.S. GAAP. The preparation of financial
statements in accordance with GAAP requires management to make estimates and
assumptions that affect the reported amounts of assets and liabilities, and
related disclosures of contingent assets and liabilities at the date of the
financial statements, and the reported amounts of revenue and expenses during
the reported period. The Company regularly evaluates its estimates and
assumptions based on historical experience and other relevant factors. Under
different assumptions or conditions, the actual results could differ
materially from these estimates and assumptions. The significant accounting
policies and methods used are described in Note 1 of the annual audited U.S.
GAAP financial statements included in the 2004 Annual Report. The following
critical accounting policies are impacted by judgments, assumptions and
estimates used in the preparation of the September 30, 2004 annual audited
financial statements.

Revenue recognition

The Company follows the provisions of Statement of Position (SOP) 97-2,
"Software Revenue Recognition" and Staff Accounting Bulletin (SAB) 101,
"Revenue Recognition in Financial Statements" for U.S. GAAP purposes. Revenue
is recognized from the sale of product and software licenses when delivery has
occurred based on purchase orders or contracts, provided that no significant
vendor obligations remain and 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 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 the 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 our
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.

Goodwill

The Company accounts for acquisitions as purchase transactions in accordance
with Statement of Financial Accounting Standards ("SFAS") No. 141 for U.S.
GAAP purposes. 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.


<PAGE>

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


Goodwill recorded on acquisition is not amortized, but is instead subject to
the 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 our 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. On August 1, 2004 the Company
performed its annual impairment test and determined there was no impairment of
the recorded goodwill. As a result, the second step was not required.

Change in accounting policy


There were no changes in accounting policies for the year ended September 30,
2004. The Company changed its accounting policy with respect to amortization
of goodwill for the year ended September 30, 2003. This was an adoption of the
new accounting standard that disallows the amortization of goodwill and,
accordingly, there has been no amortization of goodwill included in
amortization expense since October 1, 2002.


Results of Operations in Accordance with U.S. GAAP

Fiscal years ended September 30

<TABLE>
<CAPTION>

                                                              2004                        2003
(U.S. dollars in thousands) from fiscal                                                                     % change
---------------------------------------------------------------------------------------------------------   from fiscal
                                                       Actual    % of Sales          Actual        % of      to  2003
                                                       Actual    % of Sales          Actual       Sales          2004
                                                     -------------------------    ----------------------- -------------
<S>                                                     <C>             <C>            <C>         <C>            <C>
Sales                                                 $ 220,224          100%         $192,583      100%         14.4%
Cost of sales                                            26,062         11.8%           18,477      9.6%         14.1%
-----------------------------------------------------------------------------------------------------------------------
Gross profit                                            194,162         88.2%          174,106     90.4%         11.5%
-----------------------------------------------------------------------------------------------------------------------
Expenses
  Sales and marketing                                    94,947         43.1%           82,004     42.6%         15.8%

  Research and development                               40,074        18. 2%           37,810     19.6%          6.0%

  General and administration                             21,241          9.6%           20,582     10.7%          3.2%

  Amortization of intangibles                            22,892         10.4%           19,662     10.2%         16.4%

  In-process research and development expense               -            -               4,269      2.2%        (100%)
-----------------------------------------------------------------------------------------------------------------------
Total expenses                                          179,154         81.4%          164,327     85.3%          9.0%
-----------------------------------------------------------------------------------------------------------------------
Operating income                                         15,008          6.8%            9,779      5.1%         53.5%
Interest and other income, net                            1,405          0.6%            1,594      0.8%       (11.9%)
-----------------------------------------------------------------------------------------------------------------------
Income before income taxes                               16,413          7.5%           11,373      5.9%         44.3%
Income tax expense                                        9,542          4.3%            7,653      4.0%         24.7%
-----------------------------------------------------------------------------------------------------------------------
Net income                                              $ 6,871          3.1%          $ 3,720      1.9%         84.7%
-----------------------------------------------------------------------------------------------------------------------

Basic earnings per share                                $  0.39                         $ 0.21                   85.7%
-----------------------------------------------------------------------------------------------------------------------
Diluted earnings per share                              $  0.39                         $ 0.21                   85.7%
-----------------------------------------------------------------------------------------------------------------------
</TABLE>


Results of Operations

Sales of $220.2 million for the fiscal year 2004 represent a 14.4% increase
from $192.6 million for the fiscal year 2003. Income before income taxes was
$16.4 million for the current fiscal year, compared to income before income
taxes of $11.4 million in the last year. Net income for the year ended
September 30, 2004 was $6.9 million, compared to net income of $3.7 million in
the year ended September 30, 2003. Basic earnings per share and diluted
earnings per share were $0.39 for the current fiscal year compared to basic
and diluted earnings per share of $0.21 in fiscal 2003.

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.

<PAGE>

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


Sales for the fiscal year 2004 were $220.2 million versus $192.6 million for
last year. Sales from the Company's two product families were:


($U.S. millions)                 2004       2003                  % change
                                                                  from 2003
----------------------------------------- --------------------- --------------
Hummingbird Connectivity        $  70.0               $  70.6          (0.8%)
Hummingbird Enterprise            150.2                 122.0           23.1%
----------------------------------------- --------------------- --------------
                                $ 220.2               $ 192.6           14.4%
----------------------------------------- --------------------- --------------

Hummingbird Connectivity sales for the fiscal year 2004 were $70.0 million
versus $70.6 million in the previous year. The fiscal 2004 sales of the
Company's Hummingbird Enterprise sales were $150.2 million or $28.2 million
higher than the $122.0 million recorded last year.

Sales from Hummingbird Connectivity were relatively unchanged. Hummingbird
Connectivity is a mature product and the customer base for this product family
is fairly established. 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 companies
acquired in the previous fiscal year. 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.

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, 2004, costs of sales increased
by $7.6 million or 41.1% to $26.1 million from $18.5 million in the last
fiscal year. As a percentage of sales, the current fiscal year's cost of sales
at 11.8% was higher than the 9.6% in fiscal 2003.

Gross Profit

Gross profit increased by 11.5% or $20.1 million to $194.2 million in the
current fiscal year compared to $174.1 million in same period of last year.
The rise was predominantly due to the higher level of sales. Gross profit was
88.2% of sales in the current fiscal year, lower than the 90.4% in the year
ended September 30, 2003.

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 $94.9 million from
$82.0 million partly due to a higher sales commissions and related costs due
to the increase in sales. Sales and marketing expenses were 43.1% of sales in
the current year, slightly higher than the 42.6% in the previous fiscal year.


<PAGE>

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


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
strict 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 2004 of $40.1 million have
increased by 6.0% from the $37.8 million in the prior fiscal year. For the
current fiscal year, research and development expenses were 18.2% of sales,
lower than the 19.6% in fiscal 2003. The absolute dollar increase is primarily
due to the inclusion of expenses of the acquired companies that took place in
the previous fiscal year.

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 $21.2 million, an increase of $0.7 million
or 3.2% from the $20.6 million incurred in the last fiscal year. General and
administrative expenses were 9.6% of sales in fiscal 2004, down from 10.7% in
fiscal 2003.

Amortization of Intangibles

Amortization of intangibles expense consists of the amortization of
intangibles with a definite life. These amounts are being amortized over
periods ranging from one to ten years. In the year ended September 30, 2004,
amortization of intangibles increased to $22.9 million compared to $19.7
million in the year ended September 30, 2003. The increase is due to
additional amortization from intangibles arising from the acquisitions that
took place in the prior fiscal year.

In-process Research and Development Expense

In-process research and development expenses were recorded on the acquisitions
in the second and the fourth quarter of the previous year. There were no
acquisitions in the current fiscal year, and as such, no comparable in-process
research and development expense.

Interest and Other Income, Net

Interest and other income primarily represents the netting of interest income
and expense. Interest and other income for the year ended September 30, 2004
decreased to $1.4 million from $1.6 million in the year ended September 30,
2003. This decrease was due to the effect of lower short-term interest rates,
as the Company has a majority 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 decreased to 0.6% from
0.8% in the last fiscal year.

Income Tax Expense

In the fiscal year ended September 30, 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 have
been 37.0%. In the comparable period in fiscal 2003, the Company had a tax
expense of $7.7 million on income before tax of $11.4 million, representing an
effective rate of 67.3%. This high rate of tax rate was primarily due to the
non-deductibility of the amortization of intangibles arising largely from
acquisitions. Excluding this impact, the effective tax rate would have been
38.3%.

Net Income

In the year ended September 30, 2004, net income was $6.9 million compared to
net income of $3.7 million in fiscal 2003.

Basic and Diluted Earnings Per Share

Basic earnings per share for the year ended September 30, 2004 was $0.39
compared to basic earnings per share of $0.21 in the fiscal 2003. The earnings
per share for the fiscal 2004 was based on a basic weighted average number of
shares of 17.56 million versus a basic weighted average number of shares of
17.82 million in the prior fiscal year.

<PAGE>

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


Diluted earnings per share for the current fiscal year was also $0.39 based on
a diluted weighted average number of shares of 17.72 million versus diluted
earnings per share of $0.21 based on a diluted weighted average number of
shares of 17.93 million in the previous fiscal year.


Liquidity and Capital Resources

Fiscal years ended September 30

(U.S. dollars in thousands)
--------------------------------------------------------------------------------
                                                2004         2003  % change
                                                                  from 2003
                                            ------------------------------------
Working capital                             $ 104,098    $ 88,520         17.6%
Cash and cash equivalents, and short-term     130,486     104,008         25.5%
investments
Net cash provided by operating activities      39,098      39,964         (2.2%)
--------------------------------------------------------------------------------


The Company had cash and cash equivalents, and short-term investments of
$130.5 million as at September 30, 2004 compared to $104.0 million as at
September 30, 2003. As mentioned previously, the Company has a majority 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 $39.1 million during the current
year down, from the operating cash inflow of $40.0 million during fiscal 2003.

Capital expenditures remained unchanged at $3.4 million in the current year in
comparison with the previous fiscal year. These expenditures consisted
primarily of purchases of laboratory equipment, leasehold improvements, and
furniture and fixtures.

The Company has issued and outstanding common shares totaling 17,448,279 at
September 30, 2004 (September 30, 2003 - 17,544,953). The Company repurchased
and cancelled 215,300 of its own shares at a cost of $4.7 million during the
current year, down from the $15.6 million in the last fiscal year. The Company
received $2.2 million from employees exercising their stock options in the
year ended September 30, 2004 (year ended September 30, 2003 - $0.9 million).


The Company has not paid any dividends in the fiscal years ending September
30, 2004 and 2003. 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 increased as at
September 30, 2004 by $26.5 million to $130.5 million compared to a balance of
$104.0 million as at September 30, 2003.

Accounts receivable were $57.6 million at the end of the current fiscal year
compared to $56.0 million as at September 30, 2003, representing an increase
of $1.6 million. The increase was due to the increased level of sales and
billing activity in the current year.

Accounts payable and accrued liabilities were $20.4 million as at September
30, 2004, $8.0 million lower than the balance of $28.4 million as at September
30, 2003. This reduction was mainly due to the timing of the settlement of
outstanding amounts.

Deferred revenue as at September 30, 2004 was $65.5 million versus $54.7
million as at September 30, 2003, an increase of $10.8 million. The rise was
mostly due to increased billing activity for maintenance and support
contracts. Revenue for these items is deferred and recognized over the
maintenance and support contract period.

<PAGE>

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


As at September 30, 2004, the Company had other long-term liabilities totaling
$1.3 million, compared to the $3.4 million at September 30, 2003. Other
long-term liabilities consists of the following:

(U.S. dollars in thousands)             September 30,    September 30,
                                            2004             2003
----------------------------------------------------------------------

Lease inducements                          $ 255             $ 362
Retention money                              831               831
Long-term debt is comprised of:
   Capital lease obligations                 164               384
   Overdraft facility                         -                187
   Term loans                                 -                874
   Mortgage                                   -                785
----------------------------------------------------------------------
                                          $ 1,250          $ 3,423
----------------------------------------------------------------------

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

Capital lease obligations are comprised of various leases for office equipment
and automobiles, bearing interest from 10.0% to 15.0%, repayable in monthly
installments of principal and interest totaling $10 thousand, expiring over
the next one to two years and are secured by the underlying assets. These
leases are obligations of a subsidiary acquired during fiscal 2003.

The overdraft facility, term loans and mortgage were obligations of
subsidiaries acquired during the previous fiscal year. The term loans and
mortgage were fully repaid during the current year, which accounts for the
significant decrease in other long-term liabilities.

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, 2004.

<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                               $   164      $  104      $   60      $   -     $    -
Lease inducements                                           255         108         147          -          -
Retention money on prior year acquisition                   831           -         831          -          -
--------------------------------------------------------------------------------------------------------------
                                                          1,250         212       1,038          -          -
Operating leases                                         25,641       6,871      12,562      5,558        650
--------------------------------------------------------------------------------------------------------------
Total contractual cash obligations                     $ 26,891     $ 7,083    $ 13,600     $5,558     $  650
--------------------------------------------------------------------------------------------------------------
</TABLE>


     Selected Historical Consolidated Financial Data


     The selected consolidated financial data as of and for the three months
     ended December 31, 2002 through September 30, 2004 are derived from our
     unaudited interim consolidated financial statements. The selected
     consolidated financial data as of September 30, 2002, 2003 and 2004 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.
     The financial information contained in the table below has been prepared
     in accordance with U.S. GAAP. 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.


<PAGE>

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


<TABLE>
<CAPTION>
                                                                        Three months ended
-------------------------------------------------------------------------------------------------------------------------------
Selected Consolidated Statements of      Dec.31,    Mar.31,    June 30,   Sept.30,   Dec.31,     Mar.31,    June 30,   Sept.30,
Income Data (Unaudited)                    2002       2003       2003       2003        2003       2004       2004       2004
(U.S dollars in thousands, except        ------     ------     ------     ------      ------     ------     ------     ------
    per share data)

<S>                                    <C>        <C>          <C>        <C>        <C>         <C>        <C>        <C>
Sales                                  $ 44,076   $ 47,021     $ 48,105   $ 53,381   $ 50,007    $ 54,664   $ 56,227   $ 59,326
Net income (loss)                         2,004      1,778        1,380     (1,442)    (1,297)      2,068      2,368      3,732
Diluted earnings (loss) per share          0.11       0.10         0.08      (0.08)     (0.07)       0.12       0.13       0.21
Diluted WA* shares outstanding           18,318     17,955       17,739     17,568      17,551     17,811     17,740     17,566
</TABLE>


Selected Consolidated Statements                  Years ended September 30,
of Income Data                                 -------------------------------
                                                2002         2003        2004
(U.S. dollars in thousands, except per         ------       ------      ------
  share data)
Sales                                       $ 180,400    $ 192,583    $ 220,224
Net income (loss)                              (2,914)       3,720        6,871
Diluted earnings (loss) per share              (0.16)         0.21         0.39
Diluted WA* shares outstanding                 18,305       17,928       17,720

* - Weighted average

<TABLE>
<CAPTION>
                                                                           As at
------------------------------------------------------------------------------------------------------------------------------------
Consolidated Balance Sheets Data        Dec.31,      Mar.31,    June 30,   Sept.30,   Dec.31,      Mar.31,       June.30,   Sept.30,
(U.S. dollars in thousands)              2002         2003       2003       2003       2003         2004          2004        2004
                                        -------      -------    -------    -------    -------      -------       -------    -------
                                      (unaudited)  (unaudited)(unaudited)           (unaudited)  (unaudited)   (unaudited)
<S>                                     <C>          <C>        <C>        <C>        <C>          <C>           <C>        <C>
Cash, cash equivalents and              119,686      110,244    111,205    104,008    115,571      116,907       127,041    130,486
    short-term investments
Working capital                         123,903      111,504    108,389     88,520     93,406       96,194       101,886    104,098
Total assets                            348,762      352,068    356,565    365,790    366,474      368,442       367,734    371,650
Other long-term liabilities                 506          426      1,584      3,423      3,324        1,370         1,353      1,250
Shareholders' equity                    268,941      263,937    265,313    261,527    260,539      263,185       264,177    265,920
</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 has always been down from the preceding fourth quarter.

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

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


The Company's cash, cash equivalents and short-term investments balance
normally increases quarter over quarter, but lowered in the last half of
fiscal 2003 with cash being used to purchase the acquisitions. Other long-term
liabilities increased as amounts were assumed with the acquisitions, and have
since been paid down with available cash.

<PAGE>

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


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


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 32% 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 ongrowing 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>

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


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 45% 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 year ended
September 30, 2004, During the year ended September 30, 2003, the Company
entered into minor short-term derivative contracts. As at September 30, 2004
and 2003 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 Pronouncements

In January 2003, FASB issued FIN 46, "Consolidation of Variable Interest
Entities" which clarifies the application of Accounting Research Bulletin No.
51 "Consolidated Financial Statements" to those entities defined as "Variable
Interest Entities" (also referred to as special purpose entities) in which
equity investors do not have the characteristics of a controlling financial
interest or do not have sufficient equity at risk for the entity to finance
its activities without additional subordinated financial support from other
parties. FIN 46 applies immediately to all Variable Interest Entities created
after January 31, 2003, and by the beginning of the first interim or annual
reporting period commencing after June 15, 2003 for Variable Interest Entities
created prior to February 1, 2003. There was no material impact on the results
of operations from the adoption of this pronouncement.

In April 2003, the FASB issued SFAS No. 149, "Amendment of Statement 133 on
Derivative Instruments and Hedging Activities." SFAS No. 149 amends and
clarifies financial accounting and reporting for derivative instruments,
including certain derivative instruments embedded in other contracts and for
hedging activities under SFAS No. 133, "Accounting for Derivative Instruments
and Hedging Activities." The changes are intended to improve financial
reporting by requiring that contracts with comparable characteristics be
accounted for similarly. Additionally, those changes are expected to result in
more consistent reporting of contracts as either derivatives or hybrid
instruments. SFAS No. 149 is effective for contracts and hedging relationships
entered into or modified after June 30, 2003, and for provisions that relate
to SFAS No.133 implementation issues that have been effective for fiscal
quarters that began prior to June 15, 2003, apply in accordance with their
respective effective dates. The adoption of this statement did not have a
significant effect on the Company's consolidated financial position or results
of operations.

<PAGE>

In May 2003, the FASB issued SFAS No. 150, "Accounting for Certain Financial
Instruments with Characteristics of both Liability and Equity." SFAS No. 150
establishes standards for how an issuer classifies and measures certain
financial instruments with characteristics of both liability and equity. It
also requires that an issuer classify a financial instrument that is within
its scope as a liability (or an asset in some circumstances). Many of those
instruments were previously classified as equity. SFAS No. 150 is effective
for financial instruments entered into or modified after May 31, 2003, and
otherwise is effective at the beginning of the first interim period beginning
after June 15, 2003, except for mandatorily redeemable noncontrolling
interests. The adoption of this statement did not have a significant effect on
the Company's consolidated financial position or results of operations.


In December 2003, the Financial Accounting Standards Board ("FASB") issued
Interpretation No. 46R ("FIN 46R"), a revision to Interpretation No. 46 ("FIN
46"), "Consolidation of Variable Interest Entities". FIN 46R clarifies some of
the provisions of FIN 46 and exempts certain entities from its requirements.
FIN 46R is effective at the end of the first interim period ending after March
15, 2004. There was no material impact on the results of operations from the
adoption of this pronouncement.


<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, 2004 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, 2004.

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 its chief
executive officer, chief financial officer and 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, 2003 and 2004 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 $404,240 and $614,327, respectively.

         Audit-Related Fees

The aggregate fees billed by the Outside Auditors for the fiscal years ended
September 30, 2003 and 2004, 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 $10,289 and $172,811, 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, 2003 and 2004, for professional services rendered by it for tax
compliance, tax advice and tax planning were $432,806 and $521,191,
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, 2003 and 2004, 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, 2004", 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, 2004", 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.


<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.


February 16, 2005                            By: /s/ Inder P.S. Duggal
                                                 ----------------------------
                                             Name:  Inder P.S. Duggal
                                             Title: Chief Financial Officer,
                                                    Chief Controller, 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.......................