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ITV PLC (ITV)

  Print      Mail a friend       Annual reports

Wednesday 01 June, 2005

ITV PLC

IFRS Statement

ITV PLC
01 June 2005

                                    ITV plc

Preliminary International Financial Reporting Standards Financial Statements for
                                      2004



Introduction

ITV plc will be reporting its financial results in accordance with International
Financial Reporting Standards as adopted by the European Union ('IFRS') from 1
January 2005.  The Group's first IFRS results will be the interim results for
the six months to 30 June 2005 with the first Annual Report under IFRS being for
the year ended 31 December 2005.  The Group's date of transition to IFRS is 1
January 2004.  The purpose of this statement is to present the effect of IFRS on
ITV plc at the date of transition and for the 2004 full year and half year
comparative periods.



Summary

IFRS does not affect the underlying business performance of ITV, has no impact
on cash generated from operations, and does not have a significant impact on
ITV's results before amortisation for the year ended 31 December 2004.  EBITA
remains virtually unchanged at £254m and although PBT reduces to £168m this is
principally due to an increased amortisation charge.

Looking forward, IFRS is expected to have minimal further impact on EBITA.  The
increased amortisation charge, and other IFRS changes, will have a reduced
effect on PBT in 2005.  In 2006, amortisation will reduce significantly and will
also be below the estimated 2006 UK GAAP amortisation charge).


Impact on 2004 profit:                                                               £m

Pensions - operating cost                                                             5
Share based payments                                                                (5)
Other                                                                               (1)
Impact on EBITA                                                                     (1)
Goodwill amortisation                                                                72
Amortisation of other intangibles                                                 (105)
Net financing costs (pensions)                                                      (6)
Joint ventures and associates                                                         1
Impact on profit before tax                                                        (39)
Taxation                                                                             36
Impact on profit after tax                                                          (3)



Contents

1    Introduction

2    Basis of preparation

3    IFRS 1 exemptions

4    Key impact analysis

     4.1     Presentation of financial statements

     4.2     Business combinations

     4.3     Post employment benefits

     4.4     Share based payments

     4.5     Deferred taxation

     4.6     Recognition of acquired programme rights

     4.7     Recognition of dividends

     4.8     Financial instruments

     4.9     Earnings per share

     4.10   Guide to impact on 2005
    
5    Consolidated Income Statement

6    Consolidated Balance Sheet

7    Consolidated Cash Flow Statement

8    Consolidated Statement of Recognised Income and Expense

9    Consolidated Statement of Changes in Equity

Appendix 1 - Significant accounting policies

Appendix 2 - Reconciliation of income statements from UK GAAP to IFRS

Appendix 3 - Reconciliation of balance sheets from UK GAAP to IFRS

Appendix 4 - Report of KPMG Audit Plc

Appendix 5 - Forward looking statements



1.      Introduction

This document explains how ITV's previously reported UK GAAP financial
performance and position are reported under IFRS.  It includes, on an IFRS
basis:
     
•    the Group's consolidated income statement for the year ended 31 December 
     2004 and the six months ended 30 June 2004 along with a consolidated cash 
     flow statement, a consolidated statement of recognised income and expense
     and a consolidated statement of changes in equity for these periods; and
     
•    the Group's consolidated balance sheet at 31 December 2004, 30 June 2004 
     and 1 January 2004;

Set out below are the key factors affecting the conversion to IFRS including the
IFRS 1 exemptions taken, a key impact analysis and restated primary statements
for 2004.  The appendices set out ITV's IFRS accounting policies and
reconciliations of the 2004 statements under IFRS from UK GAAP.

KPMG have audited the IFRS statements for the year ended 31 December 2004.
Their audit report is attached in Appendix 4.  The interim financial information
presented is unaudited.


2.   Basis of preparation

The restated financial information presented in this document has been prepared
in accordance with International Financial Reporting Standards (IFRS) and
International Accounting Standards (IAS) adopted by the International Accounting
Standards Board (IASB), and interpretations issued by the International
Financial Reporting Interpretations Committee of the IASB.

ITV is required to prepare its consolidated accounts in accordance with those
standards and interpretations as adopted by the European Union (called 'IFRS' in
this document).  This restatement has been prepared on the assumption that all
IFRS and interpretations, that ITV proposes adopting, effective for 2005
reporting will be endorsed by the European Commission.  At the date of
publication of this document not all of these standards have been endorsed in
full.  In particular, the EU yet to endorse the amendment to IAS 19 (Employee
Benefits).  ITV has assumed that the amendment to IAS 19 is endorsed and intends
to adopt it for its 2005 financial reporting.

Were these standards not to be endorsed in time for 2005 financial reporting
then the accounting policies or presentation of certain financial information
contained in this document may need to be changed.  It is therefore possible
that further changes will be required to this information before it is presented
in the 2005 interim results and in the 2005 annual report.

Details of ITV plc's significant IFRS accounting policies are given in Appendix
1.


3.   IFRS 1 exemptions

IFRS 1 (First-time Adoption of International Financial Reporting Standards) sets
out the procedures that ITV must follow when IFRS is adopted for the first time
as the basis for preparing Group consolidated financial statements.  It sets out
a number of exemptions that are available on first-time adoption to assist
companies in the transition to reporting under IFRS.  ITV has taken the
following decisions on these exemptions:
          
     a)   Business combinations: ITV has taken the exemption from restating
          business combinations occurring before the date of transition, 1 
          January 2004.
          
     b)   Employee benefits: ITV has elected to recognise all cumulative 
          actuarial gains and losses in respect of employee benefit schemes at 
          the date of transition to IFRS.  This is consistent with the Group's 
          accounting policy adopted under the amendment to IAS 19 issued on 16 
          December 2004 whereby actuarial gains and losses are recognised 
          through the statement of recognised income and expense in full in the 
          period in which they arise.
          
     c)   Share-based payments:  ITV has applied IFRS 2 only to share options 
          and awards granted after 7 November 2002 that had not vested at 1 
          January 2005.
          
     d)   Financial instruments:  ITV has taken the exemption from applying IAS 
          32 (Financial Instruments: Disclosure and Presentation) and IAS 39 
          (Financial Instruments: Recognition and Measurement) to the 
          comparative information to be presented in the Group's first IFRS 
          financial statements and will adopt IAS 32 and IAS 39 with effect from 
          1 January 2005.  As such, the 2004 information relating to financial 
          instruments continues to be presented under the current UK GAAP basis.  
          This is discussed under key impacts below.
          
     e)   Fair value or revaluation as deemed cost:  ITV has not taken the 
          option to restate items of property, plant and equipment to their fair 
          value at 1 January 2004.  ITV has elected for all items to take their 
          cost or revalued amount as shown previously under UK GAAP as their 
          deemed cost under IFRS.
          
     f)   Cumulative translation differences:  ITV has taken the option to set
          the cumulative level of translation differences relating to foreign 
          operations held within reserves to nil at 1 January 2004.

     
4.   Key Impact Analysis

The analysis below sets out the most significant adjustments made to arrive at
the IFRS 2004 income statements and balance sheets.  The impact of these can
also be seen in the reconciliations in Appendices 2 and 3.  Other less
significant adjustments are included within these reconciliations.

     
4.1  Presentation of financial statements

The primary statements included in this document have been presented in
accordance with IAS 1 (Presentation of Financial Statements).  However, this
presentation may require modification in the event that further guidance is
issued.  The key presentational differences are as follows:

Income statement:
     
•    The Group's share of the profit of joint ventures and associates is now 
     presented including its share of interest and tax.  The interest and tax
     lines in the income statement now exclude these amounts.

•    Net financing costs are analysed between financing income and financing 
     costs on the face of the income statement.

Balance sheet:

•    Assets and liabilities are analysed between current and non-current (see 
     accounting policies in Appendix 1 for definitions).

•    Provisions are analysed between current and non-current liabilities.

•    Deferred tax is shown separately on the face of the balance sheet and
     disclosed as non-current.

•    The defined benefit pensions deficit is shown separately on the face of the 
     balance sheet.

•    Current tax liabilities are shown separately on the face of the balance 
     sheet.


4.2  Business combinations

As detailed in section 3, ITV has taken the exemption from applying IFRS 3
(Business Combinations) to combinations occurring before 1 January 2004.  The
goodwill arising from combinations occurring before that date therefore remains
at the amount shown under UK GAAP at 1 January 2004 and so there is no impact on
the 2004 opening balance sheet.

Business combinations occurring after 1 January 2004 have been accounted for in
accordance with IFRS 3.  This impacts on the acquisition accounting for Carlton
Communications Plc and the purchase of additional stakes in GMTV and GSkyB, all
of which occurred during 2004.  The principal impact is that intangible assets
(which meet the definition for recognition under IAS 38 (Intangible Assets) and
whose fair value can be measured) are recognised separately from goodwill.
These assets are then amortised over their useful lives.  Additionally the fair
values identified under UK GAAP must be revisited under IFRS.  The main impact
of this is that the pensions deficits are brought onto the balance sheet using
an IAS 19 (Employee Benefits) valuation rather than the SSAP 24 (Accounting for
Pension Costs) valuation used under UK GAAP.  Both the intangible assets and
pensions adjustments lead to associated deferred tax balances being recognised
(see section 4.5).  The net of these reduces the goodwill recognised.

IFRS 3 prohibits the amortisation of goodwill instead requiring that it is
subjected to annual impairment testing.  This causes a reduction in the Group's
amortisation charge for the year ended 31 December 2004 of £72m.  Additionally
goodwill balances held within investments in joint ventures and associates are
also no longer amortised leading to a credit of £5m to the share of profit of
associates and joint ventures.  The balance sheet shows corresponding increases
to goodwill and investments in associates and joint ventures.

The net impact on the income statement is to increase the amortisation charge in
2004 by £33m.  This reflects the initially high level of amortisation on the
intangible assets included under the acquisition accounting for Carlton.

On the balance sheet at 31 December 2004, goodwill is lower than previously
reported under UK GAAP by £255m while other intangible assets increase by £435m
giving a net increase in intangible assets on the face of the balance sheet of
£180m.

Due to the short useful lives of some of the intangible assets recognised (e.g.
customer contracts generally have a life of 1 to 2 years), the amortisation
charge from these in 2005 will be £13 million lower than 2004, and amortisation
in 2006 will reduce further to be more than £50m less than the 2004 IFRS charge.


4.3  Post employment benefits

The principal impact of IAS 19 (Employee Benefits) on ITV is in relation to
accounting for defined benefit pension schemes.

IAS 19 requires defined benefit pension schemes accounting to be based on fair
values at the balance sheet date. Separate charges for operating and net
financing costs based on actuarial assumptions in place at the start of the year
are required through the income statement while recognition through the balance
sheet is dependent upon the policy adopted for the recognition of actuarial
gains and losses.  As discussed in section 3, ITV has elected to recognise all
cumulative actuarial gains and losses in respect of employee benefit schemes at
the date of transition to IFRS.  Additionally ITV has chosen to adopt early the
amendment to IAS 19 (issued on 16 December 2004) and recognise actuarial gains
and losses arising from the full year actuarial valuation in full through the
statement of recognised income and expense in the period in which they arise.
The treatment and impact is broadly in line with that previously disclosed in
accordance with FRS 17 under UK GAAP.

The operating charge through the income statement reduces by £5m while the net
financing cost, for which there was no equivalent under UK GAAP (SSAP 24), is
£6m.  The reduction reflects a different measurement basis and the recognition
of a short term curtailment gain on ITV's pension schemes which had a
significant drop in active members as a result of the merger between Granada and
Carlton.

The balance sheet shows a total IAS 19 pensions deficit of £672m at 31 December
2004 of which, under UK GAAP, the unfunded element of £27m was previously
recognised within creditors and an amount of £95m was included within provisions
under acquisition accounting for Carlton.  A movement through the statement of
recognised income and expense for the year of £123m reflects the actuarial gains
and losses.  The deficit is shown before a deferred tax asset of £202m
recognised within non-current assets in the balance sheet.  This gives a net
deficit of £470m.

On an ongoing funding basis the latest valuations show a total deficit of £586m
at 31 December 2004 against the IAS 19 deficit of £672m.  This is a more
relevant figure as it is these valuations that determine the future funding
requirements for ITV.

Expenditure relating to defined contribution pension schemes continues to be
charged through the income statement as incurred.

The IFRS defined benefit pensions charge for 2005 will remain approximately the
same as 2004 at operating level while a higher interest charge is expected due
to the increased deficit recognised at 31 December 2004.


4.4  Share based payments

Under IFRS 2 (Share Based Payment) the charge through the income statement is
based upon the fair value of share options and awards granted.  The fair value
of the equity instrument is measured at grant date and spread over the vesting
period through the income statement with a corresponding increase in equity.
The fair value of the share options and awards is measured using either a
Monte-Carlo or Black-Scholes model as appropriate taking into account the terms
and conditions of the individual scheme.  The amount recognised as an expense is
adjusted to reflect changes to the expected vesting except where forfeiture is
due only to changes in the expected achievement of market based criteria.

IFRS 2 requires a charge for all such grants including awards, options and SAYE
schemes unlike 2004 UK GAAP which based the charge on the intrinsic market value
of the underlying shares at the date of grant and so, for ITV, a charge arose on
awards only.

ITV has applied IFRS 2 only to share options and awards granted after 7 November
2002 that had not vested at 1 January 2005 as permitted under IFRS 1.  As ITV
has not previously presented the fair value of share options and awards granted,
the IFRS 1 option to apply IFRS 2 to all share options and awards granted,
including those granted before 7 November 2002, cannot be taken by the Group.

The charge under IFRS is £5m higher in 2004 than under UK GAAP.  There is no
impact on the net assets of the Group as the charge to the income statement is
matched by an equal credit through reserves.

As ITV is unable to apply IFRS 2 to share options and awards granted pre 7
November 2002, the charge through the income statement in 2005 will increase as
more schemes are captured within the valuation period.  This is expected to
increase the IFRS charge by up to £5m in 2005.


4.5  Deferred taxation

IAS 12 (Income Taxes) requires deferred tax to be provided on all temporary
differences rather than timing differences under UK GAAP.

The total impact on the 2004 income statement is a reduction in the tax charge
of £33m.  On the balance sheet the net deferred tax asset increases by £24m.
The tax recognised directly through equity in 2004 is £37m.  The key impacts on
deferred tax are in the following areas:

•    A deferred tax liability has been recognised in relation to intangible
     assets brought on to the balance sheet at fair value in accordance with 
     IFRS 3 (Business Combinations).  This liability is released through the 
     income statement in line with the amortisation of these intangible assets.  
     At the 31 December 2004 a deferred tax liability of £151m remains on the 
     balance sheet following a credit of £33m through the income statement in 
     the period.

•    The defined benefit pension schemes deficit recognised in the balance sheet 
     results in an increase to the deferred tax asset of £174m at 31 December
     2004.  The movements in this asset are through  the income statement with a 
     £2m increase to the charge in 2004, in respect of the operating charge and 
     net interest, and £37m through the statement of recognised income and 
     expense, in respect of the actuarial gains and losses.

•    Deferred tax is provided on share based payments as the tax basis differs 
     from the requirements of IFRS.  At 31 December 2004 an additional deferred 
     tax asset of £5m is recognised with a credit of £2m being recognised
     through the income statement in 2004.  Movements through equity for the 
     year are nil.


4.6  Recognition of acquired programme rights

Under UK GAAP, ITV had a policy of recognising, within the cost of programming
rights in stock, contractual commitments in relation to acquired programming
rights which were not yet available for transmission (e.g. film rights).  Under
IFRS, acquired programming rights are recognised at the level of payments made
until the asset is available for transmission, whereupon the full cost of the
rights is recognised within programme rights in current assets.  This has
resulted in a reduction to programme rights held on the balance sheet, with a
corresponding reduction in trade payables, of £110m.

     
4.7  Recognition of dividends

Under IAS 10 (Events After the Balance Sheet Date) dividends are recognised in
the period in which they are declared.  Additionally ITV no longer shows
dividends on the face of the income statement but instead shows them as a
movement in equity.  The impact on the balance sheet is to reduce liabilities by
£53m at 31 December 2004.


4.8  Financial instruments

ITV has taken the IFRS 1 exemption from applying IAS 32 (Financial Instruments:
Disclosure and Presentation) and IAS 39 (Financial Instruments: Recognition and
Measurement) to its 2004 results.  As such the 2004 information in this document
for financial instruments continues to be presented under the current UK GAAP
basis.  When these standards are adopted from 1 January 2005 the balance sheet
at that date will be restated to show their impact.

Under IFRS all derivative financial instruments are recognised as assets or
liabilities in the balance sheet at fair value.  Gains and losses are recognised
in the income statement unless they meet the definition of a cash flow hedge
under IAS 39 in which case the element of the gains and losses which fulfil the
hedge effectiveness criteria are taken directly to equity.

Marketable shares and securities classified as available for sale are recognised
at fair value with fair value movements going directly to equity.

Debt instruments are carried at amortised cost unless they are designated as the
hedged item in a hedge relationship in which case they are held at fair value
with movements being taken to the income statement to match against the movement
in the hedging item.

The impact on the 1 January 2005 balance sheet is limited with the net assets
effect being a decrease of £4m from IAS 39 itself and an increase to deferred
tax assets of £3m resulting from the application of IAS 12 to these adjustments.


4.9  Earnings per share

Basic earnings per share for 2004 are 3.5p (UK GAAP 3.5p).  Adjusted earnings
per share for 2004 under IFRS are 6.4p (UK GAAP 6.6p).  Adjusted earnings per
share are based on earnings before amortisation of intangible assets,
reorganisation, integration and impairment costs, gains on sale of investments
and the tax associated with these items.


4.10 Guide to impact on 2005

The impact from individual standards is discussed above and the net effect on
PBT in 2005 is expected to be similar to that in 2004.  This excludes any
potential volatility caused by the introduction of IAS 39.

     
5.   Consolidated Income Statement under IFRS
                                                                      12 months ended 31    6 months ended
                                                                           December 2004      30 June 2004
                                                                                   Total             Total
                                                                                      £m                £m

Group and share of joint ventures' turnover                                        2,132               991
Less share of joint ventures' turnover                                              (79)              (35)

Revenue                                                                            2,053               956

Operating costs before depreciation, amortisation of intangible                  (1,694)             (815)
assets and reorganisation, integration and impairment costs
Operating costs - reorganisation, integration and impairment                        (70)              (23)
costs
EBITDA                                                                               289               118
Depreciation of property, plant and equipment                                       (35)              (19)
EBITA                                                                                254                99
Amortisation of intangible assets                                                  (111)              (60)

Total operating costs                                                            (1,910)             (917)

Group operating profit                                                               143                39

Financing income                                                                      22                 9
Financing costs                                                                     (41)              (17)

Net financing costs                                                                 (19)               (8)
Share of profit of associates and joint ventures                                      13                 5
Investment income                                                                      7                 4
Gain on sale of property                                                               7                 5
Gain on sale of investments                                                           17                 -

Profit  before  tax                                                                  168                45
Taxation                                                                            (25)               (8)

Profit for the period                                                                143                37
Profit attributable to minority interest                                             (6)               (5)

Profit attributable to equity shareholders of the company                            137                32

Basic earnings per share                                                            3.5p              0.8p
Diluted earnings per share                                                          3.4p              0.8p


All results are from continuing operations.


     
6.   Consolidated Balance Sheet under IFRS

                                                                31 December        30 June 1 January 2004
                                                                       2004           2004
                                                                         £m             £m             £m

Non-current assets
Property, plant and equipment                                           258            259            193
Intangible assets                                                     3,797          3,756          1,259
Distribution rights                                                      12             18              6
Investments in joint ventures and associates                             83            113             33
Other investments                                                       140            151            157

Deferred tax asset in respect of pension scheme deficits                202            168            127
Other deferred tax balances                                           (136)          (129)            (3)

Net deferred tax asset                                                   66             39            124

                                                                      4,356          4,336          1,772

Current assets
Current asset investments                                                 -            174              -
Assets held for resale                                                    -             59              -
Programme rights and other stock                                        368            271            229

Trade and other receivables < 1 year                                    349            336            206
Trade and other receivables > 1 year                                      8             30              3

Trade and other receivables                                             357            366            209
Cash and cash equivalents                                               582            400            185

                                                                      1,307          1,270            623

Current liabilities
Borrowings                                                             (10)          (412)            (4)

Trade and other payables < 1year                                      (713)          (617)          (309)
Trade and other payables > 1 year                                         -           (20)              -

Trade and other payables                                              (713)          (637)          (309)
Current tax liabilities                                               (225)          (222)          (141)
Provisions                                                             (32)           (20)            (8)

                                                                      (980)        (1,291)          (462)

Net current assets/(liabilities)                                        327           (21)            161

Non-current liabilities
Borrowings                                                            (852)          (557)           (54)
Defined benefit pension deficit                                       (672)          (559)          (422)
Other payables                                                          (7)            (7)           (30)
Provisions                                                             (43)           (62)           (39)

                                                                    (1,574)        (1,185)          (545)

Net assets                                                            3,109          3,130          1,388

Attributable to equity shareholders
Share capital                                                           422            422            277
Share premium account                                                    91             90              -
Capital reserve                                                         112            112            112
Merger reserve                                                        1,669          1,669              -
Other reserves                                                          885            879          1,079
Income and expense reserve                                             (86)           (64)           (81)

Total attributable to equity shareholders                             3,093          3,108          1,387
Minority interest                                                        16             22              1

Total equity                                                          3,109          3,130          1,388


     
7.   Consolidated Cash Flow Statement under IFRS

                                                                   12 months ended        6 months ended
                                                                  31 December 2004          30 June 2004
                                                                     £m         £m          £m        £m

Cash flows from operating activities
Continuing activities                                                          329                   213
Discontinued activities*                                                       (8)                   (6)

Cash generated from operations                                                 321                   207
Interest received                                                    19                      7
Interest paid on bank and other loans                              (43)                   (25)
Interest paid on finance leases                                     (4)                    (2)
Dividends received                                                    7                      4
Dividends received from investments in joint ventures                 4                      2
and associates
Taxation paid                                                      (12)                    (8)

                                                                              (29)                  (22)

Net cash from operating activities                                             292                   185

Cash flows from investing activities
Acquisition of subsidiary undertakings, net of cash                 434                    461
and cash equivalents acquired
Proceeds from sale of assets held for resale                         59                      -
Proceeds from sale of property, plant and equipment                  35                     19
Acquisition of minority interest                                  (154)                  (140)
Acquisition of property, plant and equipment                       (36)                    (7)
Acquisition of investments                                          (2)                    (2)
Proceeds from sale of investments                                   208                      2

Net cash from investing activities                                             544                   333

Cash flows from financing activities
Proceeds from issue of ordinary share capital                         8                      7
Bank and other loans repaid                                       (192)                   (85)
Capital element of finance lease payments                           (4)                    (2)
Preference dividends paid to shareholders                           (5)                    (5)
Redemption of redeemable shares on merger                         (200)                  (200)
Equity dividends paid                                              (48)                   (28)

Net cash used in financing activities                                        (441)                 (313)

Net increase in cash and cash equivalents                                      395                   205

Cash and cash equivalents at 1 January 2004                                    185                   185

Effects of exchange rate changes on cash and cash                                2                    10
equivalents

Cash and cash equivalents at 31 December 2004                                  582                   400


*Cash flows in respect of discontinued activities relates to expenditure against
provisions held in respect of activities which have been previously
discontinued.

     
8.   Consolidated Statement of Recognised Income and Expense

                                                                            12 months ended 6 months ended 30
                                                                           31 December 2004         June 2004
                                                                                         £m                £m

Exchange differences on translation of foreign operations                               (2)               (1)
Actuarial gains and losses on defined benefit pension schemes                         (123)                 -
Taxation on items taken directly to equity                                               37                 -

Net income recognised directly in equity                                               (88)               (1)
Profit for the period                                                                   143                37

Total recognised income and expense for the period                                       55                36

Attributable to:
Equity shareholders of the company                                                       49                31
Minority interests                                                                        6                 5

Total recognised income and expense for the period                                       55                36


9.   Consolidated Statement of Changes in Equity

                                       Attributable to equity shareholders

                             Share     Share  Capital   Merger    Other   Income  Total   Minority     Total
                           capital   premium  reserve  reserve  reserve      and          interest
                                                                         expense
                                                                         reserve
                                £m        £m       £m       £m       £m       £m     £m         £m        £m

At 1 January 2004              277         -      112        -    1,079     (81)  1,387          1     1,388
Business combinations          143        85        -    1,669        6        -  1,903        174     2,077
Redemption of Granada            -         -        -        -    (200)        -  (200)          -     (200)
redeemable shares
Purchase of minority             -         -        -        -        -        -      -      (159)     (159)
interest
Shares issued in the             2         6        -        -        -        -      8          -         8
period
Total recognised income          -         -        -        -        -       49     49          6        55
and expense
Movements due to share           -         -        -        -        -       11     11          -        11
based compensation
Dividends paid to                -         -        -        -        -        -      -        (6)       (6)
non-equity shareholders
Equity dividends                 -         -        -        -        -     (65)   (65)          -      (65)

At 31 December 2004            422        91      112    1,669      885     (86)  3,093         16     3,109

At 31 December 2004 the income and expense reserve includes the translation
reserve of £(2)m (1 January 2004: nil).


                                       Attributable to equity shareholders

                             Share     Share  Capital   Merger    Other   Income  Total   Minority     Total
                           capital   premium  reserve  reserve  reserve      and          interest
                                                                         expense
                                                                         reserve
                                £m        £m       £m       £m       £m       £m     £m         £m        £m

At 1 January 2004              277         -      112        -    1,079     (81)  1,387          1     1,388
Business combinations          143        85        -    1,669        -        -  1,897        167     2,064
Redemption of Granada            -         -        -        -    (200)        -  (200)          -     (200)
redeemable shares
Purchase of minority             -         -        -        -        -        -      -      (146)     (146)
interest
Shares issued in the             2         5        -        -        -        -      7          -         7
period
Total recognised income          -         -        -        -        -       31     31          5        36
and expense
Movements due to share           -         -        -        -        -        6      6          -         6
based compensation
Dividends paid to                -         -        -        -        -        -      -        (5)       (5)
non-equity shareholders
Equity dividends                 -         -        -        -        -     (20)   (20)          -      (20)

At 30 June 2004                422        90      112    1,669      879     (64)  3,108         22     3,130

At 30 June 2004 the income and expense reserve includes the translation reserve
of £(1)m (1 January 2004: nil).


Appendix 1:

Significant accounting policies
     
a)   Basis of preparation

The restated financial information presented in this document has been prepared
in accordance with International Financial Reporting Standards (IFRS) and
International Accounting Standards (IAS) adopted by the International Accounting
Standards Board (IASB), and interpretations issued by the International
Financial Reporting Interpretations Committee of the IASB.

ITV is required to prepare its consolidated accounts in accordance with those
standards and interpretations as adopted by the European Union (called 'IFRS' in
this document).  This restatement has been prepared on the assumption that all
IFRS and interpretations, that ITV proposes adopting, effective for 2005
reporting will be endorsed by the European Commission.  At the date of
publication of this document not all of these standards have been endorsed in
full.  In particular the EU has yet to endorse the amendment to IAS 19 (Employee
Benefits).  ITV has assumed that the amendment to IAS 19 is endorsed and intends
to adopt it for its 2005 financial reporting.

Were these standards not to be endorsed in time for 2005 financial reporting
then the accounting policies or presentation of certain financial information
contained in this document may need to be changed.  It is therefore possible
that further changes will be required to this information before it is presented
in the 2005 interim results and in the 2005 annual report.

b)   Basis of accounting

The consolidated primary statements presented have been prepared under the
historical cost convention.

The accounting policies set out below have been applied consistently in
presenting this financial information and in preparing an opening IFRS balance
sheet at 1 January 2004 for the purpose of the transition to IFRS.

c)   Revenue recognition

Revenue is stated exclusive of VAT and consists of sales of goods and services
to third parties.  Revenue from services is recognised when the outcome can be
estimated reliably and by reference to the stage of completion of the
transaction.  Revenue from the sale of goods is recognised when the Group has
transferred the significant risks and rewards of ownership and control of the
goods sold and the amount of revenue can be measured reliably.  Key classes of
revenue are recognised on the following basis:

     Advertising and sponsorship         on transmission
     Programme production                on delivery
     Programme rights                    when contracted and available for 
                                         exploitation

Revenue on barter transactions is recognised only when the goods or services
being exchanged are of a dissimilar nature.
     
d)   Subsidiaries, associates and joint ventures

Subsidiaries are entities that are directly or indirectly controlled by the
Group.  Control exists where the Group has the power to govern the financial and
operating policies of the entity so as to obtain benefits from its activities.
The proportion of net income and net assets attributable to minority
shareholders is presented separately as a minority interest in the consolidated
income statement and consolidated balance sheet.

A joint venture is an entity in which the Group holds an interest under a
contractual arrangement where the Group and one or more other parties undertake
an economic activity that is subject to joint control.  The Group accounts for
its interests in joint ventures using the equity method.

An associate is an entity, other than a subsidiary or joint venture, over which
the Group has significant influence.  Significant influence is the power to
participate in the financial and operating decisions of an entity but is not
control or joint control over those policies.  These investments are accounted
for using the equity method.

e)   Current/non-current distinction

Current assets include assets held primarily for trading purposes, cash and cash
equivalents and assets expected to be realised in, or intended for sale or
consumption in, the course of the Group's operating cycle.  All other assets are
classified as non-current assets.

Current liabilities include liabilities held primarily for trading purposes,
liabilities expected to be settled in the course of the Group's operating cycle
and those liabilities due within one year from the reporting date.  All other
liabilities are classified as non-current liabilities.

f)   Property, plant and equipment

Owned assets

Property, plant and equipment are stated at cost less accumulated depreciation
and impairment losses.  Certain items of property, plant and equipment that had
been revalued to fair value prior to 1 January 2004, the date of transition to
IFRS, are measured on the basis of deemed cost, being the revalued amount at the
date of that revaluation.

Leases

Finance leases are those which transfer substantially all the risks and rewards
of ownership to the lessee. Assets held under such leases are capitalised within
property, plant and equipment and depreciation is provided where appropriate.
Outstanding finance lease obligations, which comprise principal plus accrued
interest, are included within borrowings.  The finance element of the agreements
is charged to the income statement over the term of the lease on a systematic
basis.

All other leases are operating leases the rentals on which are charged to the
income statement on a straight line basis over the lease term.

Depreciation

Depreciation is provided to write off the cost of property, plant and equipment
less estimated residual value on a straight line basis over their estimated
future lives. The major categories of property, plant and equipment are
depreciated as follows:

   Vehicles, equipment and fittings   3 to 10 years
   Plant and machinery                10 to 15 years
   Properties:
     television studios               50 years
     leaseholds                       shorter of residual lease term or 50 years
   Freehold land                      not depreciated
   Freehold buildings                 up to 50 years

     
g)   Intangible assets

Business combinations and goodwill

All business combinations that have occurred since 1 January 2004 are accounted
for by applying the purchase method.  Goodwill represents the difference between
the cost of the acquisition and the fair value of the net identifiable assets
acquired.  Subsequent adjustments to the fair values of assets acquired made
within twelve months of the acquisition date are accounted for from the date of
acquisition.  Consequently 2004 interim financial information presented has been
restated to reflect changes to the fair value adjustments made in the full year
accounts.

For business combinations prior to this date, but after 30 September 1998,
goodwill is included at its deemed cost, which represents the amount recorded
under relevant GAAP at the time.  The classification and accounting treatment of
business combinations occurring prior to 1 January 2004, the date of transition
to IFRS, has not been reconsidered as permitted under IFRS 1.

Goodwill is stated at cost less any accumulated impairment losses and is
allocated to cash generating units.  Goodwill is not amortised but tested
annually for impairment.

Goodwill arising on acquisitions prior to 30 September 1998 was recognised as a
deduction from equity.

Other intangible assets

Other intangible assets acquired by the Group are stated at cost less
accumulated amortisation except those acquired as part of a business combination
which are shown at fair value at the date of acquisition (in accordance with
IFRS 3 (Business Combinations)) less accumulated amortisation.

Amortisation

Amortisation is charged to the income statement over the estimated useful lives
of intangible assets unless such lives are indefinite.  Goodwill is not
amortised but is tested for impairment at each balance sheet date.  The useful
lives and amortisation methods for each major class of intangible asset are as
follows:

     Film libraries               20 years          Sum of digits
     Channel 3 licences           11 years          Straight line
     Brands                       11 years          Straight line
     Customer contracts           up to 2 years     Straight line
     Customer relationships       7 to 10 years     Straight line
     
h)   Distribution rights

Programme rights acquired primarily for the purposes of distribution are
classified within the balance sheet as non-current assets.  They are recognised
initially at cost and charged through the income statement over either a 3 or 5
year period depending on genre.

i)   Other investments

Other investments comprise equity securities which do not meet the definition of
subsidiaries, joint ventures and associates, and are held at initial cost less
any impairment subsequently recognised.

j)   Impairment of assets

Assets that have an indefinite useful life are not subject to amortisation and
are tested annually for impairment.  Assets that are subject to amortisation or
depreciation are reviewed for impairment whenever events or changes in
circumstances indicate that the carrying amount may not be recoverable.  An
impairment loss is recognised in the income statement for the amount by which
the asset's carrying amount exceeds its recoverable amount. For the purposes of
assessing impairment, assets are grouped at the lowest levels for which there
are separately identifiable cash flows (cash-generating units).

The recoverable amount is the higher of an asset's fair value less costs to sell
and value in use. In assessing value in use, the estimated future cash flows are
discounted to their present value using a pre-tax discount rate that reflects
current market assessments of the time value of money and the risks specific to
the asset.

In respect of assets other than goodwill, an impairment loss is reversed if
there has been a change in the estimates used to determine the recoverable
amount.  An impairment loss is reversed only to the extent that the asset's
carrying amount does not exceed the carrying amount that would have been
determined, net of depreciation or amortisation, if no impairment loss had been
recognised.  Impairment losses in respect of goodwill are not reversed.

k)   Foreign currencies

Foreign currency transactions

Transactions in foreign currencies are translated into sterling at the rate of
exchange ruling at the date of the transaction.  Foreign currency monetary
assets and liabilities at the balance sheet date are translated into sterling at
the rate of exchange ruling at that date.  Foreign exchange differences arising
on translation are recognised in the income statement.  Non-monetary assets and
liabilities measured at historical cost are translated into sterling at the rate
of exchange on the date of the transaction.

Financial statements of foreign operations

The assets and liabilities of foreign operations are translated into sterling at
the rate of exchange ruling at the balance sheet date.  The revenues and
expenses of foreign operations are translated into sterling at the average rate
of exchange ruling during the financial period.  Exchange differences arising on
translation are recognised directly in a separate component of equity.

Net investment in foreign operations

Exchange differences arising on the translation of the net investment in foreign
operations, and of related hedges, are taken directly to the translation reserve
within equity.

In respect of all foreign operations only those translation differences arising
since 1 January 2004, the date of transition to IFRS, are presented as a
separate component of equity.

l)   Programme rights

Where programming, sports rights and film rights are acquired for the primary
purpose of broadcasting these are recognised within current assets.  An asset is
recognised when the Group controls, in substance, the respective assets and the
risks and rewards associated with them.  For acquired programme rights an asset
is recognised as payments are made and in full when the acquired programming is
available for transmission.  Programming produced internally either for the
purpose of broadcasting or to be sold in the normal course of the Group's
operating cycle is recognised within current assets at production cost.

Programme costs and rights are written off to operating costs in full on first
transmission except certain film rights which are written off over a number of
transmissions.  Films and programme costs not yet written off at the balance
sheet date are included on the balance sheet at the lower of cost and net
realisable value.

m)   Cash and cash equivalents

Cash and cash equivalents comprises cash balances and call deposits with
maturity of less than or equal to three months.

n)   Provisions

A provision is recognised in the balance sheet when the Group has a present
legal or constructive obligation arising from past events and it is probable
that an outflow of economic benefits will be required to settle the obligation.
Provisions are determined by discounting the expected future cash flows by a
rate which reflects current market assessments of the time value of money and
the risks specific to the liability.

o)   Borrowings

Borrowings consist of loans, loans notes and finance leases.

p)   IFRS 5 (Non-current Assets Held for Sale and Discontinued Operations)

IFRS 5 has been issued but it is not yet effective and applies prospectively for
periods beginning on or after 1 January 2005.  ITV has therefore not adopted
this standard for the purposes of this document and discontinued operations and
assets held for sale continue to be accounted for under current UK GAAP
principles.

q)   Taxation

The tax charge for the period comprises both current and deferred tax.  Taxation
is recognised in the income statement except to the extent that it relates to
items recognised directly in equity, in which case it is recognised in equity.

Current tax is the expected tax payable on the taxable income for the year and
any adjustment to tax payable in respect of previous years.

Deferred tax is provided using the balance sheet liability method on any
temporary differences between the carrying amounts for financial reporting
purposes and those for taxation purposes.  The amount of deferred tax provided
is based on the expected manner of realisation or settlement of the carrying
amount of assets and liabilities.

A deferred tax asset is recognised only to the extent that it is probable
sufficient taxable profit will be available to utilise the temporary difference.

r)   Employee benefits

Defined contribution schemes

Obligations under the Group's defined contribution schemes are recognised as an
expense in the income statement as incurred.

Defined benefit plans

The Group's obligation in respect of defined benefit pension plans is calculated
separately for each plan by estimating the amount of future benefit that
employees have earned in return for their service in the current and prior
periods; that benefit is discounted to determine its present value and the fair
value of plan assets is deducted.  The discount rate is the yield at the balance
sheet date on high quality corporate bonds.  The calculation is performed by a
qualified actuary using the projected unit credit method.

In accordance with IFRS 1 ITV has chosen to recognise the full pensions deficit
on the balance sheet at 1 January 2004.  The Group has taken the option of
adopting early the amendment to IAS 19 (Employee Benefits) issued on 16 December
2004.  As a result, actuarial gains and losses are recognised in full in the
period in which they arise through the statement of recognised income and
expense.

Share based compensation

The group operates a number of share based compensation schemes including an
SAYE scheme which is open to all employees.  The fair value of the equity
instrument is measured at grant date and spread over the vesting period through
the income statement with a corresponding increase in equity.  The fair value of
the share options and awards is measured using either a Monte-Carlo or
Black-Scholes model as appropriate taking into account the terms and conditions
of the individual scheme.  The amount recognised as an expense is adjusted to
reflect the actual vesting except where forfeiture is due only to market based
criteria not being achieved.

s)   Derivatives and other financial instruments

The Group uses a limited number of derivative financial instruments to hedge its
exposure to fluctuations in interest and foreign exchange rates.  The Group does
not hold or issue derivative instruments for speculative purposes.

Interest rate swap and option agreements are used to manage the interest basis
of borrowings.  Interest receipts and payments under these agreements are
accrued so as to match the net income or cost with the related finance expense.
No amounts are recognised in respect of future periods.

The difference between the fair value and book value of bonds and derivative
instruments arising on the acquisition accounting for Carlton is amortised
through net interest over the remaining life of the instruments.

t)   Dividends

Dividends are recognised through equity in the period in which they are
declared.

u)   Investment income

Investment income comprises dividends received from the Group's investments.
Dividend income is recognised in the income statement on the date the Group's
right to receive payments is established.

v)   Net financing costs

Net financing costs comprise interest payable on borrowings, interest receivable
on funds invested, foreign exchange gains and losses and the net financing costs
in respect of defined benefit pension schemes.  Additionally the difference
between the fair value and book value of bonds and derivative instruments
arising on the acquisition accounting for Carlton is amortised through net
interest over the remaining life of the instruments.


Appendix 2:

Consolidated Income Statement for the 12 months ended 31 December 2004






                                             UK GAAP        IAS 1   IAS 19  IFRS 2       IFRS 3  Other    IFRS      IFRS
                                                     Presentation Employee   Share     Business                   effect
                                                                  benefits   based combinations          
                                                                           payment
                                                  £m           £m       £m      £m           £m     £m      £m        £m

Group and share of joint ventures'             2,132            -        -       -            -      -   2,132         -
revenue
Less share of joint ventures' revenue           (79)            -        -       -            -      -    (79)         -

Revenue                                        2,053            -        -       -            -      -   2,053         -

Operating costs before depreciation,        
amortisation of intangible assets and
reorganisation, integration and
impairment costs                             (1,694)            -        5     (5)            -      - (1,694)         -
Operating costs - reorganisation,               
integration and impairment costs                (69)            -        -       -          (1)      -    (70)       (1)
EBITDA                                           290            -        5     (5)          (1)      -     289       (1)
Depreciation of property, plant and            
equipment                                       (35)            -        -       -            -      -    (35)         -
EBITA                                            255            -        5     (5)          (1)      -     254       (1)
Amortisation of intangible assets               (78)            -        -       -         (33)      -   (111)      (33)

Total operating costs                        (1,876)            -        5     (5)         (34)      - (1,910)      (34)

Group operating profit                           177            -        5     (5)         (34)      -     143      (34)

Financing income                                  22            -        -       -            -      -      22         -
Financing costs                                 (35)            1      (6)       -            -    (1)    (41)       (6)

Net financing costs                             (13)            1      (6)       -            -    (1)    (19)       (6)
Share of profit of associates and joint           
ventures                                          12          (4)        -       -            5      -      13         1
Investment income                                  7            -        -       -            -      -       7         -
Gain on sale of property                           7            -        -       -            -      -       7         -
Gain on sale of investments                       17            -        -       -            -      -      17         -

Profit  before  tax                              207          (3)      (1)     (5)         (29)    (1)     168      (39)
Taxation                                        (61)            3      (2)       2           33      -    (25)        36

Profit after tax                                 146            -      (3)     (3)            4    (1)     143       (3)
Profit attributable to minority                  (7)            -        -       -            1      -     (6)         1
interest

Profit attributable to equity                   
shareholders                                     139            -      (3)     (3)            5    (1)     137       (2)



Consolidated Income Statement for the 6 months ended 30 June 2004

                                               UK GAAP         IAS 1   IAS 19  IFRS 2       IFRS 3*    IFRS       IFRS
                                                        Presentation Employee   Share      Business             effect
                                                                     benefits   based  combinations
                                                                              payment
                                                    £m            £m       £m      £m            £m      £m         £m

Group and share of joint ventures'                 
revenue                                            994             -        -       -           (3)     991        (3)
Less share of joint ventures' revenue             (35)             -        -       -             -    (35)          -

Revenue                                            959             -        -       -           (3)     956        (3)

Operating costs before depreciation,                              
amortisation of intangible assets and
reorganisation, integration and                
impairment costs                                 (818)             -        2     (2)             3   (815)          3
Operating costs - reorganisation,                
integration and impairment costs                  (23)             -        -       -             -    (23)          -
EBITDA                                             118             -        2     (2)             -     118          -
Depreciation of property, plant and              
equipment                                         (19)             -        -       -             -    (19)          -
EBITA                                               99             -        2     (2)             -      99          -
Amortisation of intangible assets                 (37)             -        -       -          (23)    (60)       (23)

Total operating costs                            (897)             -        2     (2)          (20)   (917)       (20)

Group operating profit                              62             -        2     (2)          (23)      39       (23)

Financing income                                     9             -        -       -             -       9          -
Financing costs                                   (15)             1      (3)       -             -    (17)        (2)

Net financing costs                                (6)             1      (3)       -             -     (8)        (2)
Share of profit of associates and joint          
ventures                                             5           (2)        -       -             2       5          -
Investment income                                    4             -        -       -             -       4          -
Gain on sale of property                             5             -        -       -             -       5          -

Profit  before  tax                                 70           (1)      (1)     (2)          (21)      45       (25)
Taxation                                          (28)             1        -       1            18     (8)         20

Profit after tax                                    42             -      (1)     (1)           (3)      37        (5)
Profit attributable to minority interest           (5)             -        -       -             -     (5)          -

Profit attributable to equity                      
shareholders                                        37             -      (1)     (1)           (3)      32        (5)


* Includes adjustment in respect of changes to the fair values in acquisition
accounting between publishing the 2004 interim results and the 2004 full year
results (see accounting policies)


Appendix 3:  Consolidated Balance Sheet as at 31 December 2004

                            UK           IAS 1    IAS 2  IAS 10    IAS    IAS 19         IFRS 3  Other   IFRS     IFRS
                          GAAP    Presentation   Inven-    Div-     12  Employee       Business        31 Dec   effect
                        31 Dec                   tories  idends    Tax  benefits   combinations          2004
                          2004
                            £m              £m      £m    £m        £m        £m             £m    £m       £m     £m

Non-current assets
Property, plant
and equipment              258               -       -     -         -         -              -     -      258      -
Intangible assets        3,617               -       -     -         -         -            180     -    3,797    180
Distribution
rights                       -               -      12     -         -         -              -     -       12     12
Investments in
joint ventures
and associates              78               -       -     -         -         -              5     -       83      5
Other investments          140               -       -     -         -         -              -     -      140      -
Deferred tax asset 
in respect of pension
scheme deficits              -              28       -     -         -       174              -     -      202    202
Other deferred
tax balances                 -              14       -     -        (5)        1           (146)    -     (136)  (136)

Net deferred tax
asset                        -              42       -     -        (5)      175           (146)    -       66     66
                         4,093              42      12     -        (5)      175             39     -    4,356    263
Current assets
Programme rights
and other stock            490               -    (122)    -         -         -              -     -      368   (122)

Trade and other
receivables < 1 year       349               -       -     -         -         -              -     -      349      -
Trade and other
receivables > 1 year        50             (42)      -     -         -         -              -     -        8    (42)

Trade and other
receivables                399             (42)      -     -         -         -              -     -      357    (42)

Cash and cash
equivalents                582               -       -     -         -         -              -     -      582      -
                         1,471             (42)   (122)    -         -         -              -     -    1,307   (164)

Current liabilities
Borrowings                 (10)              -       -     -         -         -              -     -      (10)     -

Trade and other
payables < 1 year       (1,054)           225      50    53         -        13              -     -     (713)    341
Trade and other
payables > 1 year          (60)              -      60     -         -         -              -     -        -     60

Trade and other
payables                 (1,114)           225     110    53         -        13              -     -     (713)   401

Current tax
liabilities                  -            (225)      -     -         -         -              -     -     (225)  (225)

Provisions                   -             (32)      -     -         -         -              -     -      (32)   (32)
                         (1,124)           (32)    110    53         -        13              -     -     (980)   144

Net current
assets/(liabilities)        347            (74)    (12)   53         -        13              -     -      327    (20)
Non-current liabilities
Borrowings                (852)              -       -     -         -         -              -     -     (852)     -
Defined benefit
pension deficit              -               -       -     -         -      (672)             -     -     (672)  (672)
Other payables               -               -       -     -         -         -              -    (7)      (7)    (7)
Provisions                (170)             32       -     -         -        95              -     -      (43)   127
                         (1,022)            32       -     -         -      (577)             -    (7)  (1,574)  (552)

Net assets               3,418               -       -    53        (5)     (389)            39    (7)   3,109   (309)

Attributable to equity
shareholders
Share capital              422               -       -     -         -         -              -     -      422      -
Share premium account       91               -       -     -         -         -              -     -       91      -
Capital reserve            112               -       -     -         -         -              -     -      112      -
Revaluation reserve         39               -       -     -         -         -              -   (39)       -    (39)
Merger reserve           1,671               -       -     -         -         -             (2)    -    1,669     (2)
Other reserves             879               -       -     -         -         -              6     -      885      6
Income and expense reserve 193               -       -    53        (5)     (389)            30    32      (86)  (279)

Total attributable equity
shareholders             3,407               -       -    53        (5)     (389)            34    (7)   3,093   (314)

Minority interest           11               -       -     -         -         -              5     -       16      5
Total equity             3,418               -       -    53        (5)     (389)            39    (7)   3,109   (309)



Consolidated Balance Sheet as at 30 June 2004

                        UK GAAP        IAS 1       IAS 2    IAS 10   IAS   IAS 19      IFRS 3*   Other    IFRS     IFRS
                        30 June Presentation Inventories Dividends    12 Employee     Business         30 June   effect
                           2004                                      Tax Benefits combinations            2004
                             £m           £m          £m        £m    £m       £m           £m      £m      £m       £m
Non-current assets
Property, plant and 
equipment                   263            -           -         -     -        -          (4)       -     259       (4)
Intangible assets         3,598            -           -         -     -        -          158       -   3,756      158
Distribution rights           -            -          18         -     -        -            -       -      18       18
Investments in joint 
ventures and associates     112            -           -         -     -        -            1       -     113        1
Other investments           151            -           -         -     -        -            -       -     151        -
Deferred tax asset in 
respect of pension scheme 
deficits                      -           29           -         -     -      139            -       -     168      168
Other deferred tax 
balances                      -           28           -         -   (5)        1         (153)      -    (129)    (129)
Net deferred tax asset        -           57           -         -   (5)      140         (153)      -      39       39
                          4,124           57          18         -   (5)      140            2       -   4,336      212
Current assets
Current asset investments   168            -           -         -     -        -            6       -     174        6
Assets held for resale       40            -           -         -     -        -           19       -      59       19
Programme rights and other 
stock                       342            -         (59)        -     -        -          (12)     -     271       (71)

Trade and other 
receivables < 1 year        337            -           -         -     -        -           (1)      -     336       (1)
Trade and other 
receivables > 1 year         87          (57)          -         -     -        -            -       -      30      (57)

Trade and other 
receivables                 424          (57)          -         -     -        -           (1)      -     366      (58)
Cash and cash equivalents   398            -           -         -     -        -            2       -     400        2
                          1,372          (57)        (59)        -     -        -           14       -   1,270     (102)
Current liabilities
Borrowings                 (412)            -           -         -     -        -           -       -    (412)        -

Trade and other 
payables < 1 year          (935)          237          16        45     -       21          (1)      -    (617)     318
Trade and other 
payables > 1 year           (45)            -          25         -     -        -           -       -     (20)      25

Trade and other payables   (980)          237          41        45     -       21          (1)      -    (637)     343
Current tax liabilities       -          (237)          -         -     -        -          15       -    (222)    (222)
Provisions                    -           (19)          -         -     -        -          (1)      -     (20)     (20)
                         (1,392)          (19)         41        45     -       21          13       -  (1,291)     101
Net current assets/
(liabilities)               (20)          (76)        (18)       45     -       21          27       -     (21)      (1)
Non-current liabilities
Borrowings                 (557)            -           -         -     -        -           -       -    (557)       -
Defined benefit pension 
deficit                       -             -           -         -     -     (559)          -       -    (559)    (559)
Other payables                -             -           -         -     -        -           -      (7)     (7)      (7)
Provisions                 (169)           19           -         -     -       97          (9)      -     (62)     107
                           (726)           19           -         -     -     (462)         (9)     (7) (1,185)    (459)

Net assets                3,378             -           -        45    (5)    (301)         20      (7)  3,130     (248)

Attributable to equity
shareholders
Share capital               422            -           -         -     -        -            -       -     422        -
Share premium account        90            -           -         -     -        -            -       -      90        -
Capital reserve             112            -           -         -     -        -            -       -     112        -
Revaluation reserve          39            -           -         -     -        -            -     (39)      -      (39)
Merger reserve            1,671            -           -         -     -        -           (2)      -   1,669       (2)
Other reserves              879            -           -         -     -        -            -       -     879        -
Income and expense reserve  143            -           -        45    (5)    (301)          22      32     (64)    (207)
Total attributable to     
equity shareholders       3,356            -           -        45    (5)    (301)          20      (7)  3,108     (248)
Minority interest            22            -           -         -     -        -            -       -      22        -
Total equity              3,378            -           -        45    (5)    (301)          20      (7)  3,130     (248)

* Includes adjustment in respect of changes to the fair values in acquisition
accounting between publishing the 2004 interim results and the 2004 full year
results (see accounting policies)


Consolidated Balance Sheet as at 1 January 2004

                                 UK GAAP        IAS 1       IAS 2    IAS 10 IAS 12   IAS 19   Other    IFRS      IFRS
                                   1 Jan Presentation Inventories Dividends    Tax Employee           1 Jan    effect
                                    2004                                           benefits            2004
                                      £m           £m          £m        £m     £m       £m      £m      £m        £m
Non-current assets
Property, plant and equipment        193            -           -         -      -        -       -     193         -
Intangible assets                  1,259            -           -         -      -        -       -   1,259         -
Distribution rights                    -            -           6         -      -        -       -       6         6
Investment in joint ventures and      33            -           -         -      -        -       -      33         -
associates
Other investments                    157            -           -         -      -        -       -     157         -
Deferred tax asset in respect of       -            -           -         -      -      127       -     127       127
pension scheme deficits
Other deferred tax balances            -            6           -         -     (9)       -       -      (3)       (3)
Net deferred tax asset                 -            6           -         -     (9)     127       -     124       124
                                   1,642            6           6         -     (9)     127       -   1,772       130
Current assets
Programme rights and other stock     276            -        (47)         -      -        -       -     229       (47)
Trade and other receivables < 1 year 206            -           -         -      -        -       -     206         -
Trade and other receivables > 1 year   9           (6)          -         -      -        -       -       3        (6)
Trade and other receivables          215           (6)          -         -      -        -       -     209        (6)
Cash and cash equivalents            185            -           -         -      -        -       -     185         -
                                     676           (6)        (47)        -      -        -       -     623       (53)
Current liabilities
Borrowings                            (4)           -           -         -      -        -       -      (4)        -
Trade and other payables < 1year    (512)         141          21        20      -       21       -    (309)      203
Trade and other payables > 1year     (20)           -          20         -      -        -       -       -        20
Trade and other payables            (532)         141          41        20      -       21       -    (309)      223
Current tax liabilities                -         (141)          -         -      -        -       -    (141)     (141)
Provisions                             -           (8)          -         -      -        -       -      (8)       (8)
                                    (536)          (8)         41        20      -       21       -    (462)       74
Net current assets/(liabilities)     140          (14)         (6)       20      -       21       -     161        21
Non-current liabilities
Borrowings                           (54)           -           -         -      -        -       -     (54)        -
Defined benefit pension deficit        -            -           -         -      -     (422)      -    (422)     (422)
Other payables                       (25)           -           -         -      -        -      (5)    (30)       (5)
Provisions                           (47)           8           -         -      -        -       -     (39)        8
                                    (126)           8           -         -      -     (422)     (5)   (545)     (419)
Net assets                         1,656            -           -        20     (9)    (274)     (5)  1,388      (268)
Attributable to equity shareholders
Share capital                        277            -           -         -      -        -       -      277        -
Capital reserve                      112            -           -         -      -        -       -      112        -
Revaluation reserve                   39            -           -         -      -        -     (39)       -      (39)
Other reserves                     1,079            -           -         -      -        -       -    1,079        -
Income and expense reserve           148            -           -        20     (9)    (274)     34      (81)    (229)
Total attributable to equity       1,655            -           -        20     (9)    (274)     (5)   1,387     (268)
shareholders
Minority interest                      1            -           -         -      -        -       -        1        -
Total equity                       1,656            -           -        20     (9)    (274)     (5)   1,388     (268)



Appendix 4 - Report of KPMG Audit Plc



Special Purpose Audit Report of KPMG Audit Plc to ITV plc on its Preliminary
International Financial Reporting Standards ('IFRS') Financial Statements

We have audited the accompanying consolidated preliminary IFRS balance sheet of
ITV plc ('the Company') as at 31 December 2004, and the related consolidated
statements of income, changes in equity and cash flows for the year then ended
and the related accounting policy notes ('the preliminary IFRS financial
statements') set out in sections 5 to 9 and Appendix 1 but excluding half year
information.

Respective responsibilities of directors and KPMG Audit Plc

The directors of the Company have accepted responsibility for the preparation of
the preliminary IFRS financial statements which have been prepared as part of
the Company's conversion to IFRS.  Our responsibilities, as independent auditor,
are established in the United Kingdom by the Auditing Practices Board, our
profession's ethical guidance and the terms of our engagement.

Under the terms of engagement we are required to report to you our opinion as to
whether the preliminary IFRS financial statements have been properly prepared,
in all material respects, in accordance with the accounting policies note to the
preliminary IFRS financial statements.  We also report to you if, in our
opinion, we have not received all the information and explanations we require
for our audit.

We read other information accompanying the preliminary IFRS financial statements
and consider whether it is consistent with the preliminary IFRS financial
statements.  We consider the implications for our report if we become aware of
any apparent misstatements or material inconsistencies with the preliminary IFRS
financial statements.

Our report has been prepared for the Company solely in connection with the
Company's conversion to IFRS.  Our report was designed to meet the agreed
requirements of the Company determined by the Company's needs at the time.  Our
report should not therefore be regarded as suitable to be used or relied on by
any party wishing to acquire rights against us other than the Company for any
purpose or in any context.  Any party other than the Company who chooses to rely
on our report (or any part of it) will do so at its own risk.  To the fullest
extent permitted by law, KPMG Audit Plc will accept no responsibility or
liability in respect of our report to any other party.

Basis of audit opinion

We conducted our audit having regard to Auditing Standards issued by the UK
Auditing Practices Board.  An audit includes examination, on a test basis, of
evidence relevant to the amounts and disclosures in the preliminary IFRS
financial statements.  It also included an assessment of the significant
estimates and judgements made by the directors in the preparation of the
preliminary IFRS financial statements, and of whether the accounting policies
are appropriate to the Group's circumstances, consistently applied and
adequately disclosed.  We planned and performed our audit so as to obtain all
the information and explanations which we considered necessary in order to
provide us with sufficient evidence to give reasonable assurance that the
preliminary IFRS financial statements are free from material misstatement,
whether caused by fraud or other irregularity or error.  In forming our opinion
we also evaluated the overall adequacy of the presentation of information in the
preliminary IFRS financial statements.

Emphasis of matters

Without qualifying our opinion, we draw your attention to the following matters:
     
•    The accounting policies note to the preliminary IFRS financial statements 
     explains why the accompanying preliminary IFRS financial statements may 
     require adjustment before their inclusion as comparative information in the
     IFRS financial statements for the year ending 31 December 2005 when the 
     Company prepared its first IFRS financial statements.

•    As described in the accounting policies note to the preliminary IFRS 
     financial statements, as part of its conversion to IFRSs, the Company has
     prepared the preliminary IFRS financial statements for the year ended 31
     December 2004 to establish the financial position, results of operations 
     and cash flows of the Company necessary to provide the comparative 
     financial information expected to be included in the Company's first 
     complete set of IFRS financial statements for the year ending 31 December 
     2005.  The preliminary IFRS financial statements do not themselves include 
     comparative financial information for the prior period.

•    As explained in the accounting policies note, and in accordance with IFRS 
     1, no adjustments have been made for any changes in estimates made at the
     time of approval of the UK GAAP financial statements on which the 
     preliminary IFRS financial statements are based.

Opinion

In our opinion, the accompanying preliminary IFRS financial statements for the
year ended 31 December 2004 have been prepared, in all material respects, in
accordance with the basis set out in the accounting policies note, which
describes how IFRS have been applied under IFRS 1, including the assumptions
made by the directors of the Company about the standards and interpretations
expected to be effective, and the policies expected to be adopted, when they
prepare the first complete set of consolidated IFRS financial statements of the
Company for the year ending 31 December 2005.


KPMG Audit Plc
Chartered Accountants
Registered Auditor

1 June 2005

8 Salisbury Square
London EC4Y 8BB


Appendix 5 - Forward looking statements

This announcement contains forward looking statements relating to ITV plc and
its subsidiaries ('ITV').  Such forward looking statements are based on current
expectations and are subject to a number of risks and uncertainties which could
cause actual results and performance to differ materially from any expected
future results or performance, express or implied, by the forward looking
statements.  Factors that may cause forward looking statements to differ
materially from actual results include, among other things, the effect of
government regulation on ITV's activities, the level of ITV's future advertising
revenues and programme costs and the numbers of viewers of ITV's channels.




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