Financial Express (Holdings) Limited (“we”, “our”, “us” and derivatives) are committed to protecting and respecting your privacy. This Privacy Policy, together with our Terms of Use, sets out the basis on which any personal data that we collect from you, or that you provide to us, will be processed by us relating to your use of any of the below websites (“sites”).

  • FEAnalytics.com
  • FEInvest.net
  • FETransmission.com
  • Investegate.co.uk
  • Trustnet.hk
  • Trustnetoffshore.com
  • Trustnetmiddleeast.com

For the purposes of the Data Protection Act 1998, the data controller is Trustnet Limited of 2nd Floor, Golden House, 30 Great Pulteney Street, London, W1F 9NN. Our nominated representative for the purpose of this Act is Kirsty Witter.

WHAT INFORMATION DO WE COLLECT ABOUT YOU?

We collect information about you when you register with us or use any of our websites / services. Part of the registration process may include entering personal details & details of your investments.

We may collect information about your computer, including where available your operating system, browser version, domain name and IP address and details of the website that you came from, in order to improve this site.

You confirm that all information you supply is accurate.

COOKIES

In order to provide personalised services to and analyse site traffic, we may use a cookie file which is stored on your browser or the hard drive of your computer. Some of the cookies we use are essential for the sites to operate and may be used to deliver you different content, depending on the type of investor you are.

You can block cookies by activating the setting on your browser which allows you to refuse the setting of all or some cookies. However, if you use your browser settings to block all cookies (including essential cookies) you may not be able to access all or part of our sites. Unless you have adjusted your browser setting so that it will refuse cookies, our system will issue cookies as soon as you visit our sites.

HOW WE USE INFORMATION

We store and use information you provide as follows:

  • to present content effectively;
  • to provide you with information, products or services that you request from us or which may interest you, tailored to your specific interests, where you have consented to be contacted for such purposes;
  • to carry out our obligations arising from any contracts between you and us;
  • to enable you to participate in interactive features of our service, when you choose to do so;
  • to notify you about changes to our service;
  • to improve our content by tracking group information that describes the habits, usage, patterns and demographics of our customers.

We may also send you emails to provide information and keep you up to date with developments on our sites. It is our policy to have instructions on how to unsubscribe so that you will not receive any future e-mails. You can change your e-mail address at any time.

In order to provide support on the usage of our tools, our support team need access to all information provided in relation to the tool.

We will not disclose your name, email address or postal address or any data that could identify you to any third party without first receiving your permission.

However, you agree that we may disclose to any regulatory authority to which we are subject and to any investment exchange on which we may deal or to its related clearing house (or to investigators, inspectors or agents appointed by them), or to any person empowered to require such information by or under any legal enactment, any information they may request or require relating to you, or if relevant, any of your clients.

You agree that we may pass on information obtained under Money Laundering legislation as we consider necessary to comply with reporting requirements under such legislation.

ACCESS TO YOUR INFORMATION AND CORRECTION

We want to ensure that the personal information we hold about you is accurate and up to date. You may ask us to correct or remove information that is inaccurate.

You have the right under data protection legislation to access information held about you. If you wish to receive a copy of any personal information we hold, please write to us at 3rd Floor, Hollywood House, Church Street East, Woking, GU21 6HJ. Any access request may be subject to a fee of £10 to meet our costs in providing you with details of the information we hold about you.

WHERE WE STORE YOUR PERSONAL DATA

The data that we collect from you may be transferred to, and stored at, a destination outside the European Economic Area (“EEA”). It may be processed by staff operating outside the EEA who work for us or for one of our suppliers. Such staff may be engaged in, amongst other things, the provision of support services. By submitting your personal data, you agree to this transfer, storing and processing. We will take all steps reasonably necessary, including the use of encryption, to ensure that your data is treated securely and in accordance with this privacy policy.

Unfortunately, the transmission of information via the internet is not completely secure. Although we will do our best to protect your personal data, we cannot guarantee the security of your data transmitted to our sites; any transmission is at your own risk. You will not hold us responsible for any breach of security unless we have been negligent or in wilful default.

CHANGES TO OUR PRIVACY POLICY

Any changes we make to our privacy policy in the future will be posted on this page and, where appropriate, notified to you by e-mail.

OTHER WEBSITES

Our sites contain links to other websites. If you follow a link to any of these websites, please note that these websites have their own privacy policies and that we do not accept any responsibility or liability for these policies. Please check these policies before you submit any personal data to these websites.

CONTACT

If you want more information or have any questions or comments relating to our privacy policy please email publishing@financialexpress.net in the first instance.

 Information  X 
Enter a valid email address

Xansa PLC (XAN)

  Print      Mail a friend

Monday 17 October, 2005

Xansa PLC

IFRS Statement

Xansa PLC
17 October 2005


17 October 2005
                                   Xansa plc

            Restatement of financial information under International
                      Financial Reporting Standards (IFRS)


                                                                                                     Contents

Section 1 Adoption of International Financial Reporting Standards (IFRS)                                 1
Section 2 IFRS Statements                                                                                7
Section 3 Summary of Group Accounting Policies                                                          11
Section 4 Reconciliation of previously published UK GAAP information to IFRS Statements                 20


Contacts

Gordon Stuart                                        Giles Sanderson
Finance Director, Xansa                              Financial Dynamics
Tel : + 44 (0)8702 416181                            Tel : + 44 (0)20 7831 3113



Section 1
Adoption of International Financial Reporting Standards (IFRS)





Introduction

The Group previously prepared its financial statements in accordance with UK
generally accepted accounting principles (UK GAAP).  With effect from 1 May
2005, in accordance with European law, it will be preparing financial statements
under International Financial Reporting Standards (IFRS).


In order to explain how the Group's reported performance and financial position
are affected by this change, the following unaudited financial information is
provided below:



  • Consolidated balance sheets under IFRS as at 1 May 2004, 31 October 2004
    and 30 April 2005;
  • Consolidated income statements under IFRS for the six months to 31 October
    2004 and year to 30 April 2005;
  • Consolidated statements of cash flows under IFRS for the six months to 31
    October 2004 and year to 30 April 2005;
  • Consolidated statements of changes in equity under IFRS for the six months
    to 31 October 2004 and year to 30 April 2005;
  • Reconciliation of consolidated balance sheet under IFRS to UK GAAP as at 1
    May 2004, 31 October 2004 and 30 April 2005;
  • Consolidated statement of recognised income and expense under IFRS for the
    six months to 31 October 2004 and year to 30 April 2005.

It should be noted that, although this financial information has been prepared
on the basis of IFRS expected to be in place for use by EU-listed companies as
at 30 April 2006, these standards are subject to ongoing review and endorsement
by the European Commission and are, therefore, still subject to potential
change.  Information contained in this document may require further updating for
audit adjustments or subsequent amendments to IFRS, and related guidance.

The IFRS information contained in this document is unaudited.



Basis of preparation

The financial information contained in this document has been prepared based
upon IFRS published by 31 August 2005.  It has been assumed that the European
Commission will subsequently endorse the amendment to IAS 19 Employee Benefits -
Actuarial Gains and Losses, Group Plans and Disclosures.



Transitional arrangements and transition date

The rules for first time adoption of IFRS are set out in IFRS 1 First-time
Adoption of International Financial Reporting Standards.  Since the financial
statements for the year to 30 April 2006 include comparatives for the year to 30
April 2005, the Group's date of transition to IFRS is 1 May 2004.  As required
by IFRS 1, estimates carried forward at the transition date, including but not
limited to assessments of provisions and contingent liabilities (and, where
applicable, adjusted to comply with IFRS) are consistent with estimates made
prior to transition.  In accordance with IFRS 1, the Group must define
accounting policies compliant with IFRS at its first reporting date and apply
these policies retrospectively to each period presented.  IFRS 1 allows a number
of optional exemptions and also contains certain mandatory exceptions to this
principle in order to ease the transition requirements of first-time adoption.

The Group has applied the following exemptions available under IFRS 1:

  • The Group has applied IFRS 3 'Business Combinations' prospectively with
    effect from the transition date.





  • The Group has recognised all cumulative actuarial gains and losses at the
    transition date for all employee benefit plans falling within the scope of
    IAS 19 'Employee Benefits'.  This means that the net deficit on the Group's
    employee defined benefit pension plan will be included within net assets at
    1 May 2004.
  • The Group has applied the IFRS 1 exemption from the requirement for
    retrospective application of IAS 21 'The Effects of Changes in Foreign
    Exchange Rates' in respect of cumulative translation differences.  This
    means that the Group has elected not to classify any retained earnings
    arising prior to 1 May 2004 within cumulative translation differences, which
    are, therefore, deemed to be zero at the transition date.
  • The Group has applied the IFRS 1 exemption from the requirement to restate
    its comparative information for the effects of adopting IAS 32 'Financial
    Instruments: Disclosure and Presentation' and IAS 39 'Financial Instruments:
    Recognition and measurement'.  The Group will not restate comparative
    information at 1 May 2004 or for the year to 30 April 2005 for these
    standards.
  • As permitted under IFRS 1 and IFRS 2 'Share-based Payment', the Group has
    made no adjustment in either the income statement or balance sheet for
    grants of share options or free or matching shares that occurred prior to 7
    November 2002 or, for grants after that date, which had vested by 1 January
    2005.



Key changes in accounting policies

The following notes highlight the main differences between UK GAAP and IFRS that
have a material effect on the financial statements of the Group.



(a)    Share-based payment

Under UK GAAP, grants of options under Xansa's Save As You Earn (SAYE) scheme
were exempt from an accounting charge.  The Group recognised a charge in respect
of other employee share options and awards based upon the difference between the
exercise price of the option and the market value of a Xansa share at the date
of grant.  Accordingly, only grants of free and matching shares attracted a
charge under UK GAAP, based upon their intrinsic value.  IFRS 2 requires the
Group to recognise a charge reflecting the fair value of all employee share
options granted since 7 November 2002 that had not vested by 1 January 2005.

The UK GAAP charge for the year to 30 April 2005 totalled £2.5 million.  The
impact of IFRS on profit before taxation for the year to 30 April 2005 is an
additional charge of £0.2 million.  In the year to 30 April 2006, the IFRS
charge will increase to reflect expense covering an additional year of option
grants and a full year's charge in respect of the grant of free shares in June
2004.


(b)    Employee benefits

Pension scheme accounting

Xansa operates a defined benefit pension scheme in the UK called the Xansa
Pension Plan (the Plan), together with a number of defined contribution plans.
Under UK GAAP, the Group accounted for these schemes in accordance with SSAP 24,
which requires that the expected cost be charged to the profit and loss account
so as to accrue the cost over the service lives of employees on the basis of a
constant percentage of earnings.

Under IAS 19, the net surplus or deficit for each defined benefit scheme is
calculated based upon the present value of the discounted obligation less the
fair value of the plan assets.  As noted above, the actuarial deficit at the
transition date has been recognised in full.  Actuarial gains and losses
occurring after the transition date will be recognised as they occur in the
Consolidated Statement of Recognised Income and Expense.

The charge to income under IAS 19 comprises the current service cost, interest
cost on scheme liabilities, expected return on scheme assets, past service cost
and the impact of any settlements or curtailments.

The impact on profit before taxation for the year to 30 April 2005 is a credit
of £0.4 million, comprising a credit to operating profit of £2.1 million and a
charge to finance costs of £1.7 million.  The credit to operating profit
benefits from a one-off credit of £3.0 million arising from the determination of
Plan assets to be transferred out of the Plan.  Net assets at 30 April 2005
reduced by £80.5 million, after adjusting for the impact of deferred taxation.



Holiday pay

Under UK GAAP, the Group does not recognise a liability in respect of holiday
pay to which employees are entitled, but which has not yet been taken.  Under
IAS 19 a holiday pay accrual is required.

The impact on profit before taxation for the year to 30 April 2005 is a credit
of £0.2 million.  Net assets at 30 April 2005 reduce by £2.0 million, after
adjusting for the impact of deferred taxation.

The timing of when employees use their holiday entitlement means that the impact
on profit before taxation for the six months to 31 October 2004 is a credit of
£0.7 million.  Net assets at 31 October 2004 reduce by £1.6 million, after
adjusting for the impact of deferred taxation.



(c)     Intangible assets

Reclassification of capitalised software costs

Under UK GAAP, software assets were included as part of property, plant and
equipment, whereas under IFRS, unless they are integral to another fixed asset,
they are included as part of intangible assets.  In the balance sheet, a
reclassification of £4.6 million from property, plant and equipment to
intangible assets was reflected under IFRS at 30 April 2005.  There was no
impact on either profit before taxation or total net assets under IFRS.

The treatment of goodwill under IFRS is discussed in the following note.




(d)    Business combinations

Under UK GAAP, goodwill arising on acquisition of a business is capitalised and
amortised over its remaining useful life, with impairment calculations being
performed if there is evidence of a reduction in value.  Under IAS 38 any
goodwill arising from business combinations is not amortised, but is subject to
impairment tests annually or whenever there is an indication of impairment.
Negative goodwill is recognised immediately in the income statement.

The requirement to cease amortising goodwill has the impact of increasing profit
before taxation by £5.0 million in the year to 30 April 2005.  Net assets at 30
April 2005 increased by £5.0 million.



(e)    Taxation

There is no difference in accounting for current taxation between UK GAAP and
IFRS.

In respect of deferred taxation, under UK GAAP, the Group recognised deferred
taxation only on timing differences that arose from the inclusion of gains and
losses in tax assessments in periods different from those in which they were
recognised in the financial statements.  Under IAS 12 Income Taxes, deferred tax
is provided in full, using the liability method, on temporary differences
arising between the tax bases of assets and liabilities and their carrying
amounts in the financial statements.  Deferred tax assets are recognised to the
extent that it is probable that future taxable profit will be available against
which the temporary differences can be utilised.

The impact on the taxation charge for the year to 30 April 2005 is a charge of
£0.2 million, being the tax effect of the adjustments for pensions and holiday
pay.  The impact on net assets at 30 April 2005 is an increase of £12.9 million,
represented by £12.3 million increase in respect of the pension deficit and £0.6
million in respect of holiday pay and share-based payments.



(f)      Foreign currency translation

Under UK GAAP, the Group translated the profit and loss account of its
subsidiaries into Sterling using the closing rate at the end of the period.
Under IFRS the profit and loss account of its subsidiaries is translated in to
Sterling at average exchange rates for the period.  The impact of this is to
reduce profit before taxation for the year to April 2005 by £0.1 million.



(g)    Events after the balance sheet date

Under UK GAAP, the Group recognised a provision for the dividend declared within
its financial statements.  IFRS specifically states that dividends approved by
the relevant authority after the reporting date do not meet the definition of a
present obligation and should not therefore be recognised.  The impact of this
is to increase net assets at 30 April 2005 by £6.8 million.



(h)    Other

Other adjustments, relating to sundry reclassifications, have been made, but
have no impact on net assets at 30 April 2005 or profit for the year to 30 April
2005.



Financial instruments

There is currently no standard that comprehensively addresses accounting for
financial instruments under UK GAAP.  As noted above, the Group has applied the
IFRS 1 exemption from the requirement to restate its comparative information for
the effects of adopting IAS 32 Financial Instruments: Disclosure and
Presentation and IAS 39 Financial Instruments: Recognition and measurement.
Therefore, the Group will adopt these standards with effect from 1 May 2005.

Under UK GAAP, gains or losses arising on derivative instruments were held off
balance sheet.  Gains or losses on the derivative were matched in the profit and
loss account with gains or losses arising on the asset or liability being hedged
when the hedged transaction occurred.  Premiums paid to purchase derivative
instruments such as interest rate caps were amortised to the profit and loss
account on a straight line over the term of the instrument.

Under IFRS, all derivative financial instruments will initially be recognised on
the balance sheet at fair value.  Subsequent measurement depends on the
designation of the instrument.

IAS 39 places significant restrictions on the use of hedge accounting in
relation to specific designation and effectiveness criteria.



Section 2
IFRS Statements



Consolidated IFRS balance sheet

                                     As at 30 April        As at 31 October         As at 1 May
                                               2005                    2004                2004
                                          £ million               £ million           £ million

ASSETS
Non-current assets
Property, plant and equipment                  20.9                    20.7                21.9
Deferred income tax assets                     15.9                    13.7                14.8
Intangible assets                              81.9                    81.5                80.3
Prepayments                                     1.7                     2.2                 2.7
Investment in joint venture                    10.0                       -                   -

                                              130.4                   118.1               119.7
Current assets
Trade and other receivables                    47.3                    56.7                46.1
Amounts due from joint ventures                 0.8                       -                   -
Prepayments                                     6.5                     6.4                 7.0
Cash and cash equivalents                      27.4                    18.1                48.1

                                               82.0                    81.2               101.2

TOTAL ASSETS                                  212.4                   199.3               220.9

EQUITY AND LIABILITIES
Total equity attributable to                 (16.8)                  (11.1)              (11.3)
equity holders of the parent

Non-current liabilities
Trade and other payables                        2.8                       -                   -
Interest bearing loan and                      37.6                    36.1                   -
borrowings
Provisions for liabilities and                 98.0                    84.3                80.9
charges
                                              138.4                   120.4                80.9

Current liabilities
Trade and other payables                       73.7                    78.1                85.2
Interest bearing loans and                      5.5                     5.7                56.0
borrowings
Income tax payable                              6.6                     6.2                 6.1
Provisions                                      5.0                       -                 4.0

                                               90.8                    90.0               151.3

TOTAL LIABILITIES                             229.2                   210.4               232.2

TOTAL LIABILITIES AND EQUITY                  212.4                   199.3               220.9




Consolidated income statement


                                                                         Year to 30      Six months to
                                                                         April 2005         31 October
                                                                                                  2004

                                                                          £ million          £ million

Group revenue                                                                 376.4              189.5

Group operating profit:
Before share-based payments                                                    23.2               10.7
Share-based payments                                                          (2.7)              (1.5)
Group operating profit:                                                        20.5                9.2
Interest income                                                                 0.3                0.1
Interest expense                                                              (5.3)              (2.6)
Profit before taxation                                                         15.5                6.7
Taxation                                                                      (2.7)              (1.0)
Profit for the period                                                          12.8                5.7

Attributable to:
Equity shareholders of the Company                                             12.4                5.5
Minority interests                                                              0.4                0.2
                                                                               12.8                5.7

Earnings per share expressed in pence per share
Basic                                                                         4.14p              1.84p
Diluted                                                                       4.05p              1.81p

Diluted earnings per share before share-based payments                        4.77p              2.21p





Consolidated cash flow statement

                                                                       Year to 30     Six months to 31
                                                                       April 2005         October 2004

                                                                        £ million            £ million

Profit before tax for the period                                             15.5                  6.7
Adjustments for:
Depreciation                                                                  6.9                  3.5
Loss on sale of property, plant & equipment                                   0.1                    -
Cost of employee share schemes                                                2.7                  1.5
Interest income                                                             (0.3)                    -
Interest expense                                                              5.3                  2.5
IAS 19 Pension cost in excess of contributions                              (2.1)                  0.4
Working capital                                                            (16.2)               (17.9)

Cash generated from operations                                               11.9                (3.3)

Interest paid                                                               (4.2)                (2.4)
Income tax paid                                                             (0.7)                (0.3)

Net cash generated from operating activities                                  7.0                (6.0)

Cash flows from investing activities
Proceeds on disposal of property, plant and equipment                         0.3                    -
Interest received                                                             0.3                    -
Purchases of property, plant and equipment                                  (9.0)                (5.3)

Net cash flows used in investing activities                                 (8.4)                (5.3)

Cash flows from financing activities
Proceeds from issuance of ordinary shares                                     0.1                  0.1
Proceeds from borrowings                                                     38.0                 37.0
Repayments of amounts borrowed                                             (46.4)               (46.2)
Cash paid to acquire own shares                                             (0.7)                (0.4)
Proceeds from sale of own shares                                              1.4                  0.6
Payment of finance lease liabilities                                        (1.2)                (0.8)
Dividends paid to the Company's equity holders                              (7.6)                (5.6)

Net cash flows from financing activities                                   (16.4)               (15.3)

Net increase (decrease) in cash and cash equivalents                       (17.8)               (26.6)

Cash and cash equivalents:
At beginning of period                                                       39.7                 39.7
Effect of changes in foreign exchange rates                                     -                    -
At end of period                                                             21.9                 13.1



 Consolidated statement of recognised income and expense


                                                                         Year to 30      Six months to
                                                                         April 2005         31 October
                                                                                                  2004

                                                                          £ million          £ million

Employee defined benefit obligations:
 - actuarial losses on defined benefits obligations                          (15.9)                  -
 - deferred taxation recognised directly in equity                              2.8              (0.4)
Employee share option scheme - deferred taxation recognised directly          (0.1)                  -
in equity
Net exchange adjustments                                                      (0.6)              (1.0)

Net (expense) income recognised directly in equity                           (13.8)              (1.4)

Profit for the period                                                          12.4                5.5

Total recognised (expense) income for the period                              (1.4)                4.1

Attributable to:
Equity shareholders of the Company                                            (1.8)                3.9
Minority interests                                                              0.4                0.2

                                                                              (1.4)                4.1




Section 3
Summary of Group Accounting Policies



The financial information in this document has been prepared on the basis of the
accounting policies set out below.



Basis of preparation

The financial information contained in this document has been reported based
upon IFRS published by 31 August 2005, except in respect of IAS 32 'Financial
Instruments: Disclosure and Presentation' and IAS 39 'Financial Instruments:
Recognition and measurement', as permitted by the exemption in IFRS 1.  It has
been assumed that the European Commission will subsequently endorse the
amendment to IAS 19 Employee Benefits - Actuarial Gains and Losses, Group Plans
and Disclosures.



Basis of consolidation

(a)    Subsidiaries

Subsidiaries are all entities over which the Group has the power to govern the
financial and operating policies, so as to obtain benefits from the activities
of the entities, generally accompanying a shareholding of more than one half of
the voting rights and taking in to account the existence of potential voting
rights.

Subsidiaries are fully consolidated from the date on which control is
transferred to the Group.  They are de-consolidated from the date that control
ceases.

The purchase method of accounting is used to account for the acquisition of
subsidiaries by the Group.  The recognised identifiable assets, liabilities and
contingent liabilities of a subsidiary are measured at fair values at the date
of acquisition.

The interest of minority shareholders is stated at the minority's proportion of
the fair values of the identifiable assets, liabilities and contingent
liabilities recognised.

Where necessary, adjustments are made to the financial statements of
subsidiaries to bring the accounting policies used in line with those used by
the Group.

All inter-company transactions and balances between Group entities are
eliminated on consolidation.

(b)    Joint ventures

An entity is regarded as a joint venture if the Group has joint control over its
operating and financial policies and for which there is a contractual agreement.
  The Group's interests in jointly controlled entities are accounted for by the
equity method whereby the Group's income statement includes its share of their
profits and losses and the Group's balance sheet includes its share of their net
assets.  Where necessary, adjustments are made to the financial statements of
joint ventures to bring the accounting policies used in line with those used by
the Group.

The Group recognises the portion of gains or losses on the sale of services to
the joint venture that is attributable to the other venturers.



Foreign currency translation

(a)    Functional and presentation currency

Items included in the financial statements of each of the Group's entities are
measured using the currency of the primary economic environment in which the
entity operates (the 'functional currency').  The consolidated financial
statements are presented in Sterling, which is Xansa plc's functional and
presentation currency.

(b)    Transactions and balances

Foreign currency transactions are translated into the functional currency using
the exchange rates prevailing at the dates of the transactions.  Foreign
exchange gains and losses resulting from the settlement of such transactions and
from the translation at period end exchange rates of monetary assets and
liabilities denominated in foreign currencies are recognised in the income
statement, except when deferred in equity as qualifying cash flow hedges.

(c)     Group entities

From 1 May 2004, the results and financial position of all the Group's entities
that have a functional currency different from the presentation currency are
translated into the presentation currency as follows:

Assets and liabilities, including goodwill and fair value adjustments for each
balance sheet presented, are translated at the closing rate at the date of that
balance sheet.

Income and expenses for each income statement are translated at average exchange
rates as a reasonable approximation to the rates prevailing on the transaction
dates; and

All resulting exchange differences are recognised as a separate component of
equity.

Prior to 1 May 2004, exchange differences were recognised in retained earnings.

On consolidation exchange differences arising from the translation of the net
investment in foreign entities are taken to equity.



Property, plant and equipment

Property, plant and equipment is stated at historical cost less depreciation.
Historical cost includes expenditure that is directly attributable to the
acquisition of the items.  Subsequent costs are included in the asset's carrying
amount or recognised as a separate asset, as appropriate, only when it is
probable that future economic benefits associated with the expenditure will flow
to the Group and the cost of the item can be measured reliably.  All repairs and
maintenance expenditures are charged to the income statement during the
financial period in which they are incurred.

Depreciation is calculated using the straight-line method to allocate the cost
of each asset to its residual value over its useful economic life as follows:


          Long leasehold land and buildings                                33 - 50 years
          Fixtures, fittings and equipment                                 5 - 10 years
          Motor vehicles                                                   4 years
          Electronic equipment                                             4 years





Additions to short leasehold property are amortised over the shorter of the
lease term or the useful life of the assets.

Assets in the course of construction are not depreciated until they are brought
in to commercial use.

The assets' residual values and useful lives are reviewed at each balance sheet
date and adjusted if appropriate.  An asset's carrying amount is written down
immediately to its recoverable amount if the asset's carrying amount is greater
than its estimated recoverable amount.

Gains and losses on disposals are determined by comparing the disposal proceeds
with the carrying amount and are included in the income statement.



Leased assets

Leases of property, plant and equipment where the Group assumes substantially
all the risks and rewards of ownership are classified as finance leases.  Assets
held under finance leases are capitalised at the lower of the fair value of the
leased asset and the present value of the minimum lease payments.  The
corresponding leasing commitments, net of finance charges, are included in
liabilities.

Leasing payments are analysed between capital and interest components so that
the interest element is charged to the income statement over the period of the
lease at a constant periodic rate of interest on the remaining balance of the
liability outstanding.

Depreciation on assets held under finance leases is charged to the income
statement.

All other leases are treated as operating leases with annual rentals charged to
the income statement, net of any incentives granted to the lessee, over the term
of the lease.



Intangible assets

(a)    Goodwill

Goodwill is calculated as the difference between the fair value of the
consideration exchanged, including directly attributable acquisition costs, and
the net fair values of the identifiable assets and liabilities acquired and is
capitalised.  Goodwill is tested for impairment annually and whenever there is
an indication of impairment is carried at cost less accumulated impairment
losses.  An impairment loss is recognised for the amount by which the asset's
carrying amount exceeds its recoverable amount.  The recoverable amount is the
higher of an asset's fair value less costs to sell and value in use.

Where the acquired interest in the net fair value of the identifiable assets and
liabilities exceeds the cost of the business combination, the excess is
recognised immediately in the income statement.



(b)    Application software

Application software is stated at historical cost less amortisation.
Amortisation is charged to the income statement on a straight line basis over
three years.



Borrowing costs

Borrowing costs are recognised as an expense in the period in which they are
incurred using the effective interest rate method.



Trade receivables, loans and other amounts receivable

Trade receivables, loans and other amounts receivable are stated at the fair
value of the amounts due, less provision for impairment.  A provision for
impairment is established when there is objective evidence that the Group will
not be able to collect all amounts due according to the original terms of the
receivable.  The amount of the provision is recognised in the income statement.



Cash and cash equivalents

Cash and cash equivalents include cash in hand, deposits held at call with
banks, other short-term highly liquid investments with original maturities of
three months or less, and bank overdrafts.  Bank overdrafts are shown within
borrowings in current liabilities on the balance sheet.



Share capital

Ordinary shares are classified as equity.  Incremental costs directly
attributable to the issue of new shares or options are shown in equity as a
deduction, net of tax, from the proceeds.

Where the Company's equity share capital is purchased by an ESOP trust
controlled by the Company, the consideration paid, including any directly
attributable incremental costs (net of income taxes), is deducted from equity
attributable to the Company's equity holders until the shares are disposed of.
When such shares are subsequently disposed of, any consideration received, net
of any directly attributable incremental transaction costs and the related
income tax effects, is included in equity attributable to the Company's equity
holders.



Borrowings

Borrowings are stated at the amount of net proceeds received after deduction of
issue costs.  Issue costs are recognised in the income statement using the
effective interest rate method.



Provisions

Provisions for liabilities and charges are recognised when the Group has a
present legal or constructive obligation as a result of past events, it is more
likely than not that an outflow of resources will be required to settle the
obligation and the amount can be reliably measured.  If the effect is material,
provisions are measured using expected future cash flows discounted at a pre-tax
rate that reflects current market assessments of the time value of money and,
where appropriate, the risks specific to the liability.



Income taxes

The charge for current tax is based upon results for the year as adjusted for
items which are non-taxable or disallowed.  It is calculated using rates that
have been enacted or substantively enacted by the balance sheet date.

Deferred tax is accounted for using the balance sheet liability method in
respect of temporary differences arising from differences between the carrying
amount of assets and liabilities in the financial statements and the
corresponding tax base used in the computation of taxable profit.  In principle,
deferred tax liabilities are recognised for all taxable temporary differences
and deferred tax assets are recognised to the extent that it is probable that
taxable profits will be available against which deductible temporary differences
can be utilised.  Such assets and liabilities are not recognised if the
temporary differences arise from goodwill or from the initial recognition (other
than in a business combination) of other assets and liabilities in a transaction
which affects neither the tax profit nor the accounting profit at the time of
the transaction.

Deferred tax liabilities are recognised for taxable temporary differences
arising on investments in subsidiaries and interests in joint ventures, except
where the Group is able to control the reversal of the temporary difference and
it is probable that the temporary difference will not reverse in the foreseeable
future.

Deferred tax is calculated using the enacted or substantively enacted rates that
are expected to apply when the asset or liability is settled.  Deferred tax is
charged or credited in the income statement, except when it relates to items
credited or charged directly to equity, in which case the deferred tax is also
dealt with in equity.

Deferred tax assets and liabilities are offset when they relate to income taxes
levied by the same taxation authority and the Group has a legally enforceable
right and intends to settle its current tax assets and liabilities on a net
basis.



Employee benefits

(a)    Pension obligations

The Group operates a defined benefit pension scheme in the UK, together with a
number of defined contribution plans.  The schemes are generally funded through
payments to insurance companies or trustee payments to insurance companies or
trustee-administered funds, determined by periodic actuarial calculations.

A defined benefit plan is a pension plan that defines an amount of pension
benefit that an employee will receive on retirement, usually dependent on one or
more factors such as age, years of service or compensation.

The liability recognised in the balance sheet in respect of defined benefit
pension plans is the present value of the defined benefit obligation at the
balance sheet date less the fair value of plan assets.  The defined benefit
obligation is calculated annually by independent actuaries using the projected
unit credit method.  The present value of the defined benefit obligation is
determined by discounting the estimated future cash outflows using interest
rates of high-quality corporate bonds that are denominated in the currency in
which the benefits will be paid, and that have terms to maturity approximating
to the terms of the related pension liability.  Actuarial gains and losses
arising from experience adjustments and changes in actuarial assumptions are
charged or credited to equity immediately.

Past service costs are recognised immediately as an expense to the extent that
the benefits have vested.

A defined contribution plan is a pension plan under which the Group pays fixed
contributions into a separate fund.  The Group has no legal or constructive
obligations to pay further contributions once the contributions have been paid.
The contributions are recognised as employee benefit expense over the period to
which the employees' services relate.

(b)    Share based compensation

The Group operates a number of equity-settled, share-based compensation plans.
For all grants made from 7 November 2002 onwards and which had not vested by 1
January 2005, the fair value of the grant of the options and awards of free or
matching shares is recognised as an expense in exchange for the employee
services received.  The total amount to be expensed over the vesting period is
determined by reference to the fair value of the grant or award, excluding the
impact of any non-market vesting conditions (for example, profitability
targets).  Non-market vesting conditions are included in the assumptions about
the number of options that are expected to become exercisable.  At each balance
sheet date, for options granted and free and matching shares awarded with
non-market vesting conditions, the Group revises its estimates of the number of
options that are expected to become exercisable and the number of shares that
are expected to vest.  It recognises the impact of the revision of original
estimates, if any, in the income statement and a corresponding adjustment to
equity, over the remaining vesting period.



Revenue recognition

(a)    Sales of services

Sales comprise the total value of fees and expenses due from external customers
in the ordinary course of business, after deducting all credits and allowances
and net of value added and sales taxes, for services provided.  Revenue is
recognised to the extent that it is probable that economic benefits will flow to
the Group and the revenue can be reliably measured.

Revenue on time and material contracts is recognised in line with the effort
expended.  Revenue on fixed price contracts is recognised in proportion to the
cost of work performed on each contract relative to the estimated total cost of
completing the contract.  If the contract outcome cannot be measured reliably
then revenue is only recognised to the extent of the costs incurred that are
recoverable.

Distinguishable components of a contract are separated out and recognised
individually, provided the value of each component can be reliably estimated.
Revenue and costs that relate to the same transaction are recognised
simultaneously.

(b)    Interest income

Interest income is recognised on a time-proportion basis using the effective
interest method.



Contracts in progress

Provision is made for the whole of any anticipated contract losses as soon as
they are identified.



Dividend distribution

A dividend distribution to the Company's equity holders is recognised as a
liability in the Group's financial statements in the period in which dividends
are approved by the Company's shareholders.



Adoption of IAS 32 and IAS 39



As previously noted, the Group has deferred the adoption of IAS 32 and IAS 39
until 1 May 2005.  Consequently, the Group's previous UK GAAP accounting
policies concerning financial instruments have been applied in the financial
information for the year ended 30 April 2005 presented in this document.

The Group's accounting policy under IFRS and the anticipated impacts of adoption
on its financial statements are summarised below.

Financial instruments are recorded initially at fair value.  Subsequent
measurement depends on the designation of the instrument, as follows:

(a)     Deposits with banks are classified as loans and receivables and are held
at amortised cost.

(b)     Borrowings from banks and trade and other payables are held at amortised
cost.

(c)     Derivative financial instruments are measured at fair value, with
changes in fair value recognised in the income statement, unless the instrument
is designated as a hedging item and meets the criteria to qualify for hedge
accounting set out in IAS 39.

(d)     Derivative financial instruments meeting criteria to qualify for hedge
accounting set out in IAS 39 are measured at fair value, with changes in fair
value recognised directly in shareholders' equity.

Hedging instruments

Under IAS 39, hedging relationships are categorised by type and must meet strict
criteria to qualify for hedge accounting.

(a)    Cash flow hedges

Hedges of highly probable forecast transactions are designated as cash flow
hedges.  To the extent that movements in the fair values of these instruments
effectively offset the underlying risk being hedged they are recognised in the
hedging reserve in equity until the period during which the hedged forecast
transaction affects profit or loss, at which point the cumulative gain or loss
is recognised in the income statement, offsetting the value of the hedged
transaction.

Movements in the fair value of hedging instruments where the instrument fails to
meet the IAS 39 hedge accounting criteria or where the movement represents the
ineffective portion of a qualifying hedging relationship are recognised in the
income statement immediately, under the heading net finance cost.

Previously, premiums paid to purchase hedging instruments such as interest rate
caps were amortised to the profit and loss account over the term of the
instrument.  Movements in the fair values of such instruments were not
recognised.  Cash flows arising on the hedging instrument subsequent to the
initial purchase were recognised in the profit and loss account in the same
period as cash flows arising on the hedged transaction.

Previously, movements in the fair value of forward foreign currency contracts
taken out by a subsidiary to hedge receipts in a currency other than that
subsidiary's functional currency were not recognised until the underlying
receipt occurred, at which time the cash flow of the forward foreign currency
contract would be matched against the cash flow of the hedged receipt.

The strict nature of the IAS 39 hedge accounting criteria is likely to lead to
greater volatility in the reported results of the Group, as movements in the
fair values of non-qualifying or ineffective hedging instruments are required to
be recognised in different periods to those in which the hedged transactions
affect profit or loss.

Non-derivative financial assets and financial liabilities

Non-derivative financial assets and financial liabilities are classified as
loans and receivables and debt instruments respectively.  They will continue to
be recognised initially at fair value and measured subsequently at amortised
cost.



Investment in joint venture

Xansa's 50%-owned joint venture, NHS Shared Business Services Ltd, is party to
agreements with its shareholders which may result in the recognition of
additional assets or liabilities on its balance sheet under IAS 32 and IAS 39,
which would affect the carrying value of the investment in the joint venture in
Xansa's balance sheet.  A compensating adjustment would be made to goodwill
arising on the investment in Xansa's balance sheet.



Section 4
Reconciliation of previously published UK GAAP information to IFRS statements



Consolidated balance sheet

As at 1 May 2004
                                               UK GAAP       Dividend   Pensions         Other               IFRS
                                                                                   adjustments
                                             £ million      £ million  £ million     £ million          £ million

ASSETS
Non-current assets
Property, plant and equipment                     23.9              -          -         (2.0)               21.9
Deferred income tax assets                           -              -        9.6           5.2               14.8
Intangible assets                                 77.3              -          -           3.0               80.3
Prepayments                                          -              -          -           2.7                2.7

                                                 101.2              -        9.6           8.9              119.7
Current assets
Deferred income tax assets                         4.4              -          -         (4.4)                  -
Trade and other receivables                       46.1              -          -             -               46.1
Prepayments                                        9.8              -      (0.1)         (2.7)                7.0
Cash and cash equivalents                         21.3              -          -          26.8               48.1

                                                  81.6              -      (0.1)          19.7              101.2

TOTAL ASSETS                                     182.8              -        9.5          28.6              220.9

EQUITY AND LIABILITIES
Issued capital                                    17.0              -          -             -               17.0
Shares to be issued                                0.5              -          -         (0.5)                  -
Share premium account                             63.8              -          -             -               63.8
Merger reserve                                   760.3              -          -             -              760.3
Own shares                                      (23.2)              -          -             -             (23.2)
Retained earnings                              (766.5)            6.6     (67.7)         (1.6)            (829.2)
Total equity attributable to equity               51.9            6.6     (67.7)         (2.1)             (11.3)
holders of the parent

Non-current liabilities
Interest bearing loan and borrowings                 -              -          -             -                  -
Provisions for liabilities and charges             3.7              -       77.2             -               80.9

                                                   3.7              -       77.2             -               80.9

Current liabilities
Trade and other payables                          88.8          (6.6)          -           3.0               85.2
Interest bearing loans and borrowings             28.3              -          -          27.7               56.0
Income tax payable                                 6.1              -          -             -                6.1
Provisions                                         4.0              -          -             -                4.0

                                                 127.2          (6.6)          -          30.7              151.3

TOTAL LIABILITIES                                130.9          (6.6)       77.2          30.7              232.2

TOTAL LIABILITIES AND EQUITY                     182.8              -        9.5          28.6              220.9



Consolidated balance sheet

As at 31 October 2004
                                 UK GAAP       Dividend   Pensions       Goodwill         Other             IFRS
                                                                     amortisation   adjustments
                               £ million      £ million  £ million      £ million     £ million        £ million

ASSETS
Non-current assets
Property, plant and                 24.4              -          -              -         (3.7)             20.7
equipment
Deferred income tax assets             -              -        9.6              -           4.1             13.7
Intangible assets                   74.8              -          -            2.5           4.2             81.5
Prepayments                            -              -          -              -           2.2              2.2

                                    99.2              -        9.6            2.5           6.8            118.1

Current assets
Deferred income tax assets           3.5              -          -              -         (3.5)                -
Trade and other receivables         56.7              -          -              -             -             56.7
Prepayments                          9.6              -      (0.1)              -         (3.1)              6.4
Cash and cash equivalents            3.4              -          -              -          14.7             18.1

                                    73.2              -      (0.1)              -           8.1             81.2

TOTAL ASSETS                       172.4              -        9.5            2.5          14.9            199.3

EQUITY AND LIABILITIES
Total equity attributable           53.7            3.3     (69.0)            2.5         (1.6)           (11.1)
to equity holders of the
parent

Non-current liabilities
Interest bearing loan and           26.7              -          -              -           9.4             36.1
borrowings
Provisions for liabilities           5.8              -       78.5              -             -             84.3
and charges
                                    32.5              -       78.5              -           9.4            120.4

Current liabilities
Trade and other payables            79.1          (3.3)          -              -           2.3             78.1
Interest bearing loans and           0.9              -          -              -           4.8              5.7
borrowings
Income tax payable                   6.2              -          -              -             -              6.2

                                    86.2          (3.3)          -              -           7.1             90.0

TOTAL LIABILITIES                  118.7          (3.3)       78.5              -          16.5            210.4

TOTAL LIABILITIES AND              172.4              -        9.5            2.5          14.9            199.3
EQUITY



Consolidated balance sheet

As at 30 April 2005
                                    UK GAAP       Dividend   Pensions       Goodwill         Other            IFRS
                                                                        amortisation   adjustments
                                  £ million      £ million  £ million      £ million     £ million       £ million

ASSETS
Non-current assets
Property, plant and equipment          25.3              -          -              -         (4.4)            20.9
Deferred income tax assets                -              -       12.3              -           3.6            15.9
Intangible assets                      72.3              -          -            5.0           4.6            81.9
Prepayments                               -              -          -              -           1.7             1.7
Investment in joint venture            10.0              -          -              -             -            10.0

                                      107.6              -       12.3            5.0           5.5           130.4

Current assets
Deferred income tax assets              3.0              -          -              -         (3.0)               -
Trade and other receivables            47.3              -          -              -             -            47.3
Amounts due from joint ventures         0.8              -          -              -             -             0.8
Prepayments                             9.0              -      (0.2)              -         (2.3)             6.5
Cash and cash equivalents               9.5              -          -              -          17.9            27.4

                                       69.6              -      (0.2)              -          12.6            82.0

TOTAL ASSETS                          177.2              -       12.1            5.0          18.1           212.4

EQUITY AND LIABILITIES
Issued capital                         17.1              -          -              -             -            17.1
Share premium account                  66.1              -          -              -             -            66.1
Merger reserve                        760.3              -          -              -             -           760.3
Own shares                           (20.6)              -          -              -             -          (20.6)
Retained earnings                   (768.8)            6.8     (80.5)            5.0         (2.2)         (839.7)
Total equity attributable to           54.1            6.8     (80.5)            5.0         (2.2)          (16.8)
equity holders of the parent

Non-current liabilities
Trade and other payables                  -              -          -              -           2.8             2.8
Interest bearing loan and              25.3              -          -              -          12.3            37.6
borrowings
Provisions for liabilities and          5.4              -       92.6              -             -            98.0
charges

                                       30.7              -       92.6              -          15.1           138.4

Current liabilities
Trade and other payables               80.5          (6.8)          -              -             -            73.7
Interest bearing loans and              0.3              -          -              -           5.2             5.5
borrowings
Income tax payable                      6.6              -          -              -             -             6.6
Provisions                              5.0              -          -              -             -             5.0

                                       92.4          (6.8)          -              -           5.2            90.8

TOTAL LIABILITIES                     123.1          (6.8)       92.6              -          20.3           229.2

TOTAL LIABILITIES AND EQUITY          177.2              -       12.1            5.0          18.1           212.4



Consolidated income statement

For the six months ended 31 October 2004


                                 UKGAAP      Pensions       Goodwill        Share         Other           IFRS
                                                        amortisation   accounting   adjustments

                              £ million     £ million      £ million    £ million     £ million      £ million

Group turnover                    189.5             -              -            -             -          189.5

Group operating profit
(loss):
Before share-based payments        10.4         (0.4)              -            -           0.7           10.7
and goodwill amortisation
Share-based payments              (1.4)             -              -        (0.1)             -          (1.5)
Goodwill amortisation             (2.5)             -            2.5            -             -              -

Group operating profit              6.5         (0.4)            2.5        (0.1)           0.7            9.2
(loss):
Interest income                     0.1             -              -            -             -            0.1
Interest expense                  (1.7)         (0.9)              -            -             -          (2.6)

Profit (loss) before                4.9         (1.3)            2.5        (0.1)           0.7            6.7
taxation
Taxation                          (1.2)           0.4              -            -         (0.2)          (1.0)

Profit (loss) for the               3.7         (0.9)            2.5        (0.1)           0.5            5.7
period

Attributable to:
Equity shareholders of the          3.5         (0.9)            2.5        (0.1)           0.5            5.5
Company
Minority interests                  0.2             -              -            -             -            0.2

                                    3.7         (0.9)            2.5        (0.1)           0.5            5.7

Earnings pre share
expressed in pence per
share
Basic                             1.17p       (0.30)p          0.83p      (0.03)p         0.17p          1.84p
Diluted                           1.15p       (0.30)p          0.82p      (0.03)p         0.17p          1.81p

Diluted earnings per share        2.34p       (0.30)p              -            -         0.17p          2.21p
before share-based payments
and goodwill amortisation





Consolidated income statement

For the year ended 30 April 2005


                                   UKGAAP      Pensions       Goodwill       Share         Other           IFRS
                                                          amortisation  accounting   adjustments

                                £ million     £ million      £ million   £ million     £ million      £ million

Group turnover                      376.4             -              -           -             -          376.4

Group operating profit (loss):
Before distribution of shares        21.6           2.1              -           -         (0.5)           23.2
from the trusts, reorganisation
costs and goodwill amortisation
and impairment
Distribution of shares from the     (2.5)             -              -       (0.2)             -          (2.7)
trusts
Goodwill amortisation and           (5.0)             -            5.0           -             -              -
impairment

Group operating profit (loss):       14.1           2.1            5.0       (0.2)         (0.5)           20.5
Interest income                       0.3             -              -           -             -            0.3
Interest expense                    (3.6)         (1.7)              -           -             -          (5.3)

Profit (loss) before taxation        10.8           0.4            5.0       (0.2)         (0.5)           15.5
Taxation                            (2.5)         (0.1)              -           -         (0.1)          (2.7)

Profit (loss) for the period          8.3           0.3            5.0       (0.2)         (0.6)           12.8

Attributable to:
Equity shareholders of the            7.9           0.3            5.0       (0.2)         (0.6)           12.4
Company
Minority interests                    0.4             -              -           -             -            0.4
                                      8.3           0.3            5.0       (0.2)         (0.6)           12.8

Earnings pre share expressed in
pence per share
Basic                               2.64p         0.10p          1.67p     (0.07)p       (0.20)p          4.14p
Diluted                             2.58p         0.10p          1.63p     (0.06)p       (0.20)p          4.05p

Diluted earnings per share          4.87p         0.10p              -           -       (0.20)p          4.77p
before share-based payments and
goodwill amortisation





                      This information is provided by RNS
            The company news service from the London Stock Exchange