IFRS Restatement Report

Berkeley Berry Birch PLC
21 December 2005


Berkeley Berry Birch plc
Adoption of International Financial Reporting Standards
Restatement of Financial Information for the year ended 31 March 2005

Introduction

Until 31 March 2005, the Group prepared its audited annual financial statements
and unaudited interim results under UK Generally Accepted Accounting Principles
('UK GAAP'). As an EU-listed company, Berkeley Berry Birch plc is required to
adopt International Financial Reporting Standards ('IFRS') for the reporting of
the Group's results with effect from 1 April 2005. The results for the six
months to 30 September 2005 will therefore represent the Group's first interim
statements prepared in accordance with its accounting policies under IFRS.

This report:

• summarises the main changes to the Group's accounting policies (Appendix
  I);

• restates the Group's results for the year ended 31 March 2005 and the
  interim results for the six months ended 30 September 2004 from a UK GAAP basis
  to an unaudited IFRS basis (Appendix II); and

• states the Group's principal accounting policies under IFRS (Appendix
  III).

No adjustments have been made for any changes in estimates made at the time of
approval of the UK GAAP financial statements for the year ended 31 March 2005 or
the interim statements for the period ended 30 September 2004 on which the IFRS
financial information is based, as required by IFRS 1.

These results are based on the IFRS expected to be applicable as at 31 March
2006 and the interpretation of those standards. IFRS are subject to possible
amendment by, and interpretive guidance from, the International Accounting
Standards Board, as well as the ongoing review and endorsement by the EU, and
are therefore still subject to change. These figures may therefore require
amendment, to change the basis of accounting and/or presentation of certain
financial information, before their inclusion in the IFRS financial statements
for the year ending 31 March 2006, when the Group prepares its first complete
set of IFRS financial statements.


Appendix I
Main changes to the Group's accounting policies

The main IFRS adjustment affecting the Group's financial statements is in
respect of the accounting for post retirement benefits. Under UK GAAP, the Group
accounted for post retirement benefits under SSAP24, whereby the costs of
providing pensions under the Group's defined benefit scheme were charged against
operating profit on a systematic basis with the net actuarial loss in the scheme
allocated over the expected average remaining service lives of current
employees. As permitted under IFRS1, the net actuarial loss of £2,967,000 as at
1 April 2004, the date of transition to IFRS, has been recognised as a liability
on the balance sheet. This change is similar to that which would have been
required under FRS17, which the Group would have been required to comply with
from 1 April 2005 had it not been required to adopt IFRS. In respect of
actuarial gains and losses arising after 1 April 2004, the Group has elected to
recognise these in full in the period in which they occur outside the income
statement and presented in the statement of changes in total equity.

Under UK GAAP, goodwill arising on the acquisition of businesses on the balance
sheet is amortised over its useful economic life. Under IFRS, such goodwill is
not amortised but is subject to annual impairment reviews. Under the IFRS
transitional arrangements, the net book value of the goodwill at 1 April 2004 of
£26,197,000 is deemed to be the cost going forward. As a result of the
impairment provision made at March 2005, the impact of no longer amortising
goodwill is not material in the year ended 31 March 2005.

Under UK GAAP, certain items, notably profits and losses on the disposal of
property, businesses and subsidiaries are required to be disclosed separately
below operating profit/(loss) in arriving at the profit/(loss) before taxation
in the income statement. Under the IFRS presentation, such amounts form part of
the operating profit/(loss).

Other than changes in presentation, the main change to the cash flow statement
is in respect of the bank deposit given as security by the parent company for a
letter of credit in favour of the Group's captive insurance company. Under
UKGAAP this deposit does not meet the definition of either cash or liquid
resources whereas under IFRS it forms part of cash and cash equivalents and
therefore such balances are £600,000 higher at 31 March 2005 (£606,000 at 30
September 2004).


Appendix II
Restatement of the Group's results for the year ended 31 March 2005

The table below shows the restatement of the consolidated income statement for
the year ended 31 March 2005 from UK GAAP to IFRS. As described above, the profit
on disposal of property (£68,000), the loss on disposal of business (£1,139,000)
and the loss on disposal of subsidiary undertakings (£554,000) have been
reallocated to form part of the operating loss in the IFRS format.

                                        UK GAAP                                                                Restated
                                        in IFRS_________________Effect of adoption of IFRS_________________       Under
                                         format         (a)         (b)         (c)         (d)         (e)        IFRS
                                          £'000       £'000       £'000       £'000       £'000       £'000       £'000
------------------------------------------------------------------------------------------------------------------------

Revenue                                  67,283           -           -           -           -           -      67,283
Costs of sales                          (48,914)          -           -           -           -           -     (48,914)
------------------------------------------------------------------------------------------------------------------------
Gross profit                             18,369           -           -           -           -           -      18,369
Operating expenses                      (42,764)      1,405      (1,257)          -          74          (3)    (42,545)
Disposal of business                     (1,139)          -           -         (53)          -           -      (1,192)
Disposal of subsidiaries                   (554)          -           -           -           -           -        (554)
------------------------------------------------------------------------------------------------------------------------
Operating loss                          (26,088)      1,405      (1,257)        (53)         74          (3)    (25,922)
Interest income                             410           -           -           -           -           -         410
Interest expense                            (35)          -           -           -           -           -         (35)
------------------------------------------------------------------------------------------------------------------------
Loss before tax                         (25,713)      1,405      (1,257)        (53)         74          (3)    (25,547)
Taxation                                     27           -           -           -           -           -          27
------------------------------------------------------------------------------------------------------------------------
Profit for the period                   (25,686)      1,405      (1,257)        (53)         74          (3)    (25,520)
========================================================================================================================
Attributable to:
Shareholders' equity                    (25,662)      1,405      (1,257)        (53)         74          (3)    (25,496)
Minority interests                          (24)          -           -           -           -           -         (24)
------------------------------------------------------------------------------------------------------------------------
Loss for the financial Period           (25,686)      1,405      (1,257)        (53)         74          (3)    (25,520)
========================================================================================================================

Loss per share (pence)
Basic and diluted                         (28.2)                                                                  (28.1)


Notes on effect of adoption of IFRS:

(a  Under IFRS, goodwill is not amortised and therefore the charge in the year 
    has been reversed.
(b) The reversal of the amortisation in respect of the goodwill arising on the 
    acquisition of the Berkeley Financial Services Group increases the net book 
    value at 31 March 2005 by £1,257,000 and hence the impairment charge to 
    reduce the goodwill to its estimated recoverable amount is increased
    accordingly.
(c) The reversal of the amortisation in respect of the goodwill arising on the 
    acquisition of Professional Financial Solutions Limited increases the net 
    book value at 31 March 2005 by £53,000 and hence the loss on the disposal 
    of this goodwill is increased accordingly.
(d) This adjustment reflects the difference in the charge for pensions as a 
    result of adopting IAS19.
(e) This adjustment is for the movement in the accrual for untaken holiday 
    entitlement required under IAS19.

The table below shows the restatement of the consolidated balance sheet as at 31
March 2005:

                                   UK GAAP                                                                     Restated
                                   in IFRS___________________Effect of adoption of IFRS____________________       Under
                                    format        (a)        (b)        (c)        (d)        (e)        (f)       IFRS
                                     £'000      £'000      £'000      £'000      £'000      £'000      £'000      £'000
------------------------------------------------------------------------------------------------------------------------
Assets
Non-current assets
Intangible assets                    3,806        221      1,405     (1,257)       (53)         -          -      4,122
Property, plant and equipment          998       (221)         -          -          -          -          -        777
------------------------------------------------------------------------------------------------------------------------
                                     4,804          -      1,405     (1,257)       (53)         -          -      4,899
------------------------------------------------------------------------------------------------------------------------
Current assets
Trade and other receivables         10,075          -          -          -          -          -          -     10,075
Cash and cash equivalents           12,749          -          -          -          -          -          -     12,749
------------------------------------------------------------------------------------------------------------------------
                                    22,824          -          -          -          -          -          -     22,824
------------------------------------------------------------------------------------------------------------------------
------------------------------------------------------------------------------------------------------------------------
Total assets                        27,628          -      1,405     (1,257)       (53)         -          -     27,723
------------------------------------------------------------------------------------------------------------------------
Liabilities
Non-current liabilities
Long-term borrowings                   (32)         -          -          -          -          -          -        (32)
Retirement benefit liabilities           -          -          -          -          -     (3,251)         -     (3,251)
Other provisions for liabilities
 and charges                        (5,729)         -          -          -          -          -          -     (5,729)
Other non-current liabilities         (310)         -          -          -          -          -          -       (310)
------------------------------------------------------------------------------------------------------------------------
                                    (6,071)         -          -          -          -     (3,251)         -     (9,322)
------------------------------------------------------------------------------------------------------------------------
Current liabilities
Short-term borrowings                 (255)         -          -          -          -          -          -       (255)
Trade and other payables           (11,978)         -          -          -          -          -        (56)   (12,034)
Current tax payable                   (150)         -          -          -          -          -          -       (150)
Other provisions for liabilities
 and charges                        (5,172)         -          -          -          -          -          -     (5,172)
------------------------------------------------------------------------------------------------------------------------
                                   (17,555)         -          -          -          -          -        (56)   (17,611)
------------------------------------------------------------------------------------------------------------------------
------------------------------------------------------------------------------------------------------------------------
Total liabilities                  (23,626)         -          -          -          -     (3,251)       (56)   (26,933)
------------------------------------------------------------------------------------------------------------------------
------------------------------------------------------------------------------------------------------------------------
Net assets                           4,002          -      1,405     (1,257)       (53)    (3,251)       (56)       790
========================================================================================================================

Capital and reserves
Called up share capital              9,179          -          -          -          -          -          -      9,179
Share premium account               17,019          -          -          -          -          -          -     17,019
Merger reserve                       5,589          -      1,257     (1,257)         -          -          -      5,589
Profit and loss account            (27,970)         -        148          -        (53)    (3,251)       (56)   (31,182)
------------------------------------------------------------------------------------------------------------------------
Shareholders' equity                 3,817          -      1,405     (1,257)       (53)    (3,251)       (56)       605
Minority interests                     185          -          -          -          -          -          -        185
------------------------------------------------------------------------------------------------------------------------
Total equity                         4,002          -      1,405     (1,257)       (53)    (3,251)       (56)       790
========================================================================================================================

Notes on effect of adoption of IFRS:

(a) 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. This adjustment
    transfers the net book value of software asset of £221,000 at 31 March 2005 
    from property, plant and equipment to intangible assets.
(b) Under UK GAAP, goodwill on the balance sheet is amortised over its useful 
    economic life. Goodwill is not amortised under IFRS from 1 April 2004
    and therefore the amortisation charge since then of £1,405,00 is added back 
    to intangible assets. The amortisation of the goodwill arising on the 
    acquisition of the Berkeley Financial Services Group of £1,257,000 was 
    charged against the merger reserve which arose on this acquisition and is 
    therefore adjusted against that reserve rather than the profit and loss 
    account.
(c) The reversal of the amortisation in respect of the goodwill arising on the 
    acquisition of the Berkeley Financial Services Group increases the net book 
    value at 31 March 2005 by £1,257,000 and hence the impairment charge to 
    reduce the goodwill to its estimated recoverable amount is increased
    accordingly.
(d) The reversal of the amortisation in respect of the goodwill arising on the 
    acquisition of Professional Financial Solutions Limited increases the net 
    book value at 31 March 2005 by £53,000 and hence the loss on the disposal 
    of this goodwill is increased accordingly.
(e) Under IFRS, the deficit in the Group's defined benefit pension scheme is 
    recognised as a liability on the balance sheet.
(f) This adjustment is for the accrual for untaken holiday entitlement required 
    under IAS19.

The table below shows the restatement of the consolidated income statement for
the six months ended 30 September 2004 from UKGAAP to IFRS.

                                        UK GAAP       Effect of        Restated
                                        in IFRS____adoption of IFRS____   under
                                         format        (a)        (b)      IFRS
                                          £'000      £'000      £'000     £'000 
--------------------------------------------------------------------------------
Revenue                                  35,026          -          -    35,026
Cost of sales                           (25,570)         -          -   (25,570)
--------------------------------------------------------------------------------
Gross profit                              9,456          -          -     9,456
Operating expenses                      (10,123)       697         37    (9,389)
--------------------------------------------------------------------------------
Operating loss                             (667)       697         37        67
Interest income                             188          -          -       188
Interst expense                             (20)         -          -       (20)
--------------------------------------------------------------------------------
Loss before tax                            (499)       697         37       235
Taxation                                      -          -          -         -
--------------------------------------------------------------------------------
Profit for the period                      (499)       697         37       235
================================================================================

Attributable to:
Shareholders' equity                       (493)       697         37       241
Minority interests                           (6)         -          -        (6)
--------------------------------------------------------------------------------
Loss for the financial period              (499)       697         37       235
================================================================================

Loss per share
Basic and diluted                          (0.5)                            0.3

Notes on effect of adoption of IFRS:

(a) Under IFRS, goodwill is not amortised and therefore the charge in the period
    has been reversed.
(b) This adjustment reflects the difference in the charge for pensions as a 
    result of adopting IAS19.

The table below shows the restatement of the consolidated balance sheet as at 30
September 2004. The UK GAAP balance sheet has been restated for the change in
accounting policy in respect of the presentation of provisions to record such
balances gross of amounts recoverable from third parties as described in note 2
on page 31 of the Annual Report and Accounts 2005. Previously, these provisions
were shown net of recoverable amounts. The restatement has increased debtors and
provisions at 30 September 2004 by £6,008,000. There was no impact on the income
statement for the period ended 30 September 2004.



                                   UK GAAP
                                  restated                                                                     Restated
                                   in IFRS___________________Effect of adoption of IFRS____________________       Under
                                    format        (a)        (b)        (c)        (d)        (e)        (f)       IFRS
                                     £'000      £'000      £'000      £'000      £'000      £'000      £'000      £'000
------------------------------------------------------------------------------------------------------------------------
Assets
Non-current assets
Intangible assets                   25,408        243        697          -          -          -          -     26,348
Property, plant and equipment        2,171       (243)         -          -          -          -          -      1,928
------------------------------------------------------------------------------------------------------------------------
                                    27,579          -        697          -          -          -          -     28,276
------------------------------------------------------------------------------------------------------------------------
Current assets
Trade and other receivables         13,496          -          -          -          -          -          -     13,496
Cash and cash equivalents           10,922          -          -          -          -          -          -     10,922
------------------------------------------------------------------------------------------------------------------------
                                    24,418          -          -          -          -          -          -     24,418
------------------------------------------------------------------------------------------------------------------------
------------------------------------------------------------------------------------------------------------------------
Total assets                        51,997          -        697          -          -          -          -     52,694
------------------------------------------------------------------------------------------------------------------------
Liabilities
Non-current liabilities
Long-term borrowings                  (376)         -          -          -          -          -          -       (376)
Retirement benefit liabilities           -          -          -          -     (2,930)         -          -     (2,930)
Other provisions for liabilities
 and charges                        (6,414)         -          -          -          -          -          -     (6,414)
Other non-current liabilities         (317)         -          -          -          -          -          -       (317)
------------------------------------------------------------------------------------------------------------------------
                                    (7,107)         -          -          -     (2,930)         -          -    (10,037)
------------------------------------------------------------------------------------------------------------------------
Current liabilities
Short-term borrowings                 (208)         -          -          -          -          -          -       (208)
Trade and other payables           (10,571)         -          -          -          -        (53)         -    (10,624)
Current tax payable                    (27)         -          -          -          -          -          -        (27)
Other provisions for liabilities
 and charges                        (4,420)         -          -          -          -          -       (475)    (4,895)
------------------------------------------------------------------------------------------------------------------------
                                   (15,226)         -          -          -          -        (53)      (475)   (15,754)
------------------------------------------------------------------------------------------------------------------------
------------------------------------------------------------------------------------------------------------------------
Total liabilities                  (22,333)         -          -          -     (2,930)       (53)      (475)   (25,791)
------------------------------------------------------------------------------------------------------------------------
------------------------------------------------------------------------------------------------------------------------
Net assets                          29,664          -        697          -     (2,930)       (53)      (475)   (26,903)
========================================================================================================================

Capital and reserves
Called up share capital              9,179          -          -          -          -          -          -      9,179
Share premium account               17,019          -          -          -          -          -          -     17,019
Shares to be issued                    475          -          -          -          -          -       (475)         -
Revaluation reserve                    358          -          -       (358)         -          -          -          -
Merger reserve                      25,777          -        629          -          -          -          -     26,406
Profit and loss account            (23,347)         -         68        358     (2,930)       (53)         -    (25,904)
------------------------------------------------------------------------------------------------------------------------
Equity shareholders' funds          29,461          -        697          -     (2,930)       (53)      (475)    26,700
Minority interests                     203          -          -          -          -          -          -        203
------------------------------------------------------------------------------------------------------------------------
Total equity                        29,664          -        697          -     (2,930)       (53)      (475)    26,903
========================================================================================================================

Notes on effect of adoption of IFRS:

(a) 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. This adjustment
    transfers the net book value of software asset of £243,000 at 30 September 
    2004 from property, plant and equipment to intangible assets.
(b) Under UK GAAP, goodwill on the balance sheet is amortised over its useful 
    economic life. Goodwill is not amortised under IFRS from 1 April 2004 and 
    therefore the amortisation charge since then of £697,000 is added back to
    intangible assets. The amortisation of the goodwill arising on the 
    acquisition of the Berkeley Financial Services Group of £629,000 was charged
    against the merger reserve which arose on this acquisition and is therefore
    adjusted against that reserve rather than the profit and loss account.
(c) Until 31 March 2004, freehold buildings were stated at valuation less 
    accumulation depreciation. As permitted under IFRS1, on the transition to
    IFRS the revalued amount has been treated as deemed cost at the date of the
    revaluation and therefore the revaluation reserve of £358,000 has been
    transferred to the profit and loss account.
(d) Under IFRS, the deficit in the Group's defined benefit pension scheme is 
    recognised as a liability on the balance sheet.
(e) This adjustment is for the accrual for untaken holiday entitlement required
    under IAS19.
(f) Under UK GAAP, where a deferred consideration can be settled in shares or 
    cash at the option of the company, the liability is treated as equity.
    Under IFRS, unless the number of shares to be issued is fixed, a deferred
    consideration for an acquisition is treated as a liability.


Appendix III
Principal accounting policies

Basis of preparation

The consolidated income statement and the consolidated balance sheet have been
prepared under the historical cost convention and in accordance with
International Financial Reporting Standards ('IFRS') as adopted by the European
Union. IFRS1, 'First time adoption of International Financial Reporting
Standards' allows certain exemptions from retrospective application of IFRS in
the opening balance sheet at 1 April 2004 and where these have been used they
are explained in the accounting policies below.

Basis of consolidation

The consolidated financial statements incorporate the accounts of the Company
and each of its subsidiaries for the financial year. The results of subsidiaries
or businesses acquired or disposed of during a financial year are included in
the consolidated income statement from or up to the effective date of
acquisition or disposal.

Goodwill

Goodwill arising on acquisitions is capitalised and subject to annual impairment
reviews. Goodwill represents the difference between the fair value of the
consideration paid and the fair value of the assets and liabilities acquired.
Where the consideration includes an element contingent on one or more future
events, the consideration includes an estimate of the fair value of the amounts
expected to be paid in the future. Goodwill is stated at cost less accumulated
impairment losses.

The profit or loss on disposal of a business does not include any attributable
goodwill arising on acquisitions made before 1 February 1998, which was
previously eliminated against reserves under the former Group policy. Goodwill
acquired from 1 February 1998 to 31 March 2004 was capitalised and amortised
over its useful economic life.

As permitted under IFRS1, in respect of acquisitions prior to 1 April 2004, the
classification and accounting treatment of business combinations has not been
amended on transition to IFRS.

Intangible assets other than goodwill

These consist mainly of purchased customer databases and computer software,
which are carried at cost less accumulated amortisation calculated on a
straight-line basis over their useful economic lives.

Property, plant and equipment

Property, plant and equipment is stated at cost less accumulated depreciation.
Until 31 March 2004, freehold buildings were stated at valuation less
accumulation depreciation. As permitted under IFRS1, on the transition to IFRS
the revalued amount has been treated as deemed cost at the date of the
revaluation.

Depreciation is provided on a straight-line basis at rates which, in the opinion
of the Directors, reduce the assets to their residual values over their
estimated useful lives. Assets held under finance leases are depreciated over
the shorter of the lease terms and the useful lives of equivalent owned assets.
Freehold land is not depreciated. The rates of depreciation applied are:

       Freehold buildings            2%
       Leasehold improvements       11%
       IT equipment           25%-33.3%
       Fixtures and fittings    15%-20%
       Motor vehicles               25%

Trade and other receivables

Trade and other receivables are recognised initially at fair value. A provision
for impairment of trade and other receivables is made when there are indications
that the Group will not be able to collect all amounts due according to the
original terms of the receivables concerned.

Revenue

Revenue represents commissions, retained brokerage, fees and administration
charges earned by subsidiary undertakings. Commission income, which accounts for
the majority of the Group's income and principally arises in the network
services and financial services business segments, comprises commissions
receivable on inception of a new policy or investment product ('initial
commissions') and commission payable on renewal ('renewal commissions'). Initial
commissions are accounted for when the policy is issued by the product provider
after taking account of provisions for the potential cancellation of policies
where commission is received under indemnity terms. Renewal commissions are
accounted for when received. Income in respect of insurance brokerage, is
recognised at the inception date of the policy or when the policy placement has
been completed and confirmed, whichever is later. Fees for financial advice and
administration charges are accounted for as invoiced with accruals being made
for work performed but not invoiced.

Taxation

Corporation taxes are payable on taxable profits at current rates. Deferred tax
is provided on temporary differences between the carrying amount of assets and
liabilities for financial reporting purposes and the amount used for taxation
purposes, except that the recognition of deferred tax assets is limited to the
extent that the Group anticipates making sufficient taxable profits in the
future to absorb the reversal of the underlying timing differences.

Tax is recognised in the income statement except to the extent that it relates
to items recognised directly to equity, in which case it is recognised in
equity.

Pension costs

In respect of the Group's defined benefit scheme, assets are measured at their
fair value and liabilities are measured on an actuarial basis using the
projected unit credit method. Any surplus or deficit of scheme assets over
liabilities is recognised as an asset or liability in the balance sheet
respectively. The current service cost and any past service costs together with
the expected return on scheme assets less the unwinding of discount on the
scheme liabilities is charged to operating expenses. As permitted under IFRS1,
all actuarial gains and losses at 1 April 2004, the date of transition to IFRS,
were recognised. In respect of actuarial gains and losses that arise subsequent
to this date, these are recognised in full in the period in which they occur
outside the income statement and presented as part of the total recognised
income (expense) in the reconciliation of total equity.

Contributions to the Group's defined contribution schemes are charged to the
income statement in the period in which they become payable.

Leases

Assets held under finance leases are capitalised at their fair value on the
inception of the lease and depreciated over the shorter of the period of the
lease and the estimated useful economic lives of the assets. The finance charges
are allocated over the period of the lease in proportion to the capital amount
outstanding and are charged to the income statement.

Operating lease rentals are charged to the income statement in equal annual
amounts over the lease term.




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