Information  X 
Enter a valid email address

Business Post Group (UKM)

  Print      Mail a friend       Annual reports

Monday 14 November, 2005

Business Post Group

IFRS

Business Post Group PLC
14 November 2005


                            Business Post Group plc
           Transition to International Financial Reporting Standards

Introduction

Business Post Group plc has adopted International Financial Reporting Standards
(IFRS) with effect from 1 April 2004. This announcement accompanies the 2006
interim announcement and provides the transitional financial information
together with the principal accounting policies adopted under IFRS applied from
1 April 2004.

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

   •Consolidated income statements under IFRS for the six months to 30
    September 2004 and year to 31 March 2005;
   •Consolidated balance sheets under IFRS as at 1 April 2004, 30 September
    2004 and 31 March 2005;
   •Consolidated statements of cash flows under IFRS for the six months to 30
    September 2004 and year to 31 March 2005;
   •Reconciliation of consolidated income statements under IFRS to UK GAAP
    for the six months to 30 September 2004 and year to 31 March 2005;
   •Reconciliation of consolidated balance sheets under IFRS to UK GAAP as at
    1 April 2004, 30 September 2004 and 31 March 2005;
   •Proforma changes to the consolidated balance sheet following the adoption
    of IAS 32 and IAS 39; and
   •A statement of the principal accounting policies of the Group under IFRS.

The key changes to the financial statements for the year ended 31 March 2005
arising from the transition to IFRS are:

   •Under IFRS, pre-tax costs of £1.0m are charged to income in relation to
    share-based incentives compared to £0.1m under UK GAAP.
   •Goodwill is not amortised under IFRS and consequently the £0.5m charge is
    reversed.
   •Under IFRS, dividends are recognised within equity in the period in which
    they are approved whereas, under UK GAAP, dividends were recognised in the
    period in which they were declared. This increases net assets at 31 March
    2005 by £6.9m.
   •The recognition of a £1.8m deferred tax asset relating to share-based
    incentives as at 31 March 2005, £0.3m of which is recognised in the income
    statement.

The impact of the change to IFRS on key ratios for the year ended 31 March 2005
is:
                                                        IFRS            UK GAAP
Basic earnings per share                               25.6p              25.7p
Diluted earnings per share                             25.2p              25.3p
Profit before tax                                     £19.6m             £20.0m
Shareholders' funds                                   £62.7m             £53.5m

Peter Fitzwilliam                                               14 November 2005
Finance Director


Understanding the change

IFRS has no impact on corporate strategy, operating decisions, cash flows, or on
the underlying value of the business.

The significant accounting changes for the Group are:

 1. Under IFRS, the costs of all share-based payments including employee
    sharesave schemes are recognised whereas, under UK GAAP, only awards granted
    at a discount to the market were recognised, with employee sharesave
    specifically exempted. For the year ended 31 March 2005, this has resulted
    in an additional pre-tax charge to the income statement of £0.9m, offset by
    a deferred tax credit of £0.3m.


 2. The amortisation of goodwill under UK GAAP has been replaced by an annual
    impairment test under IFRS. For the year ended 31 March 2005, this has
    resulted in a £0.5m increase in net assets and profit after tax.


 3. Dividends payable and receivable are recognised under IFRS in the period in
    which they are approved, rather than declared under UK GAAP. At 31 March
    2005, this has increased net assets by £6.9m.


 4. Deferred tax relating to share-based payments has been provided by charging
    to the income statement or, where applicable, directly to equity. Deferred
    tax assets and liabilities are no longer offset, whereas under UK GAAP these
    were shown on a net basis.


 5. Under UK GAAP, capitalised computer software was included within property,
    plant and equipment whereas, under IFRS, capitalised software not integral
    to plant and equipment is classified as an intangible asset. The net book
    value of computer software reclassified as intangible assets was £0.6m at 31
    March 2005.

It should be noted that the standards currently in issue are subject to
interpretation issued from time to time by the International Financial Reporting
Interpretations Committee (IFRIC). Further standards may be issued by the IASB
that may require adoption for financial years beginning on or after 1 January
2005. Due to the large number of new and revised standards included within the
body of standards that comprise IFRS, there is not yet sufficient established
practice from which to draw in forming decisions regarding the interpretation
and application of the standards. Accordingly, practice is continuing to evolve.
At this stage therefore, the full financial effect of reporting under IFRS as it
will be applied and reported on in the company's first IFRS financial statements
for the year ended 31 March 2006 may be subject to change. The IFRS results are
unaudited.

Consolidated Income Statement

                 Half Year ended 30 September 2004      Year ended 31 March 2005
                                                                              
                   UK          Effect of      IFRS    UK GAAP    Effect of    IFRS
                  GAAP        transition                         transition
                                to IFRS                           to IFRS
                   £m               £m         £m        £m           £m       £m

Revenue          109.9                -      109.9     233.3            -    233.3
Cost of          (87.1)               -      (87.1)   (184.7)           -   (184.7)
sales            -------         --------     ------   -------      -------   ------
Gross profit      22.8                -       22.8      48.6            -     48.6
Administrative
expenses         (13.9)            (0.2)     (14.1)    (28.3)        (0.4)   (28.7)
                 -------         --------     ------   -------      -------   ------
Operating          8.9             (0.2)       8.7      20.3         (0.4)    19.9
profit
Net interest
payable           (0.1)               -       (0.1)     (0.3)           -     (0.3)
                 -------         --------     ------   -------      -------   ------
Profit before
taxation           8.8             (0.2)       8.6      20.0         (0.4)    19.6
Tax on profit on
ordinary
activities        (2.8)             0.1       (2.7)     (6.2)         0.3     (5.9)
                 -------         --------     ------   -------      -------   ------
                                                                              ------
Profit for the
period             6.0             (0.1)       5.9      13.8         (0.1)    13.7
                 -------         --------     ------   -------      -------   ------

Basic earnings
per share         11.2p                       11.0p     25.7p                 25.6p

Diluted
earnings          11.0p                       10.9p     25.3p                 25.2p
per share

The profit for the period is wholly attributable to equity holders of the company.

Consolidated Balance Sheet
                             At 30 September 2004              At 31 March 2005
                                      Effect of                  Effect of
                                     transition                 transition
                          UK GAAP      to IFRS  IFRS    UK GAAP  to IFRS  IFRS
                             £m          £m      £m       £m       £m      £m
Assets
Non-current assets
Goodwill                      9.1       0.3      9.4      9.0      0.5     9.5
Intangible assets             0.0       0.5      0.5      0.0      0.6     0.6
Investment                    0.0       1.2      1.2      0.0      1.1     1.1
properties
Property, plant and
equipment                    35.1      (1.7)    33.4     34.8     (1.7)   33.1
Trade and other
receivables                   1.1       0.0      1.1      3.3      0.0     3.3
Deferred tax assets           0.0       1.1      1.1      0.0      1.8     1.8
                           --------  --------  ------  --------  -------  ------
                             45.3       1.4     46.7     47.1      2.3    49.4
                           --------  --------  ------  --------  -------  ------
Current assets
Inventories                   0.0       0.1      0.1      0.0      0.2     0.2
Trade and other
receivables                  48.8      (0.1)    48.7     47.4     (0.2)   47.2
Cash and cash
equivalents                   0.9       0.0      0.9      3.4      0.0     3.4
                           --------  --------  ------  --------  -------  ------
                             49.7       0.0     49.7     50.8      0.0    50.8
                           --------  --------  ------  --------  -------  ------



Liabilities
Current liabilities
Borrowings                   (3.0)      0.0    (3.0)     (1.0)     0.0    (1.0)
Trade and other payables    (26.7)      3.4   (23.3)    (30.7)     6.9   (23.8)
Current tax liabilities      (3.1)      0.0    (3.1)     (2.8)     0.0    (2.8)
Provisions                    0.0      (0.1)   (0.1)      0.0     (0.1)   (0.1)
                           --------  --------  ------  --------  -------  ------
                            (32.8)      3.3   (29.5)    (34.5)     6.8   (27.7)
                           --------  --------  ------  --------  -------  ------
                           --------  --------  ------  --------  -------  ------
Net current assets           16.9       3.3    20.2      16.3      6.8    23.1
                           --------  --------  ------  --------  -------  ------

Non-current liabilities
Borrowings                   (8.0)      0.0    (8.0)     (8.0)     0.0    (8.0)
Deferred tax liabilities     (1.3)      0.0    (1.3)     (1.4)     0.0    (1.4)
Provisions                   (0.4)      0.1    (0.3)     (0.5)     0.1    (0.4)
                           --------  --------  ------  --------  -------  ------
                             (9.7)      0.1    (9.6)     (9.9)     0.1    (9.8)
                           --------  --------  ------  --------  -------  ------
                           --------  --------  ------  --------  -------  ------
Net assets                   52.5       4.8    57.3      53.5      9.2    62.7
                           ========  ========  ======  ========  =======  ======

Shareholders' funds
Share capital                 5.4       0.0     5.4       5.4      0.0     5.4
Share premium                11.0       0.0    11.0      12.2      0.0    12.2
Retained earnings            36.1       4.8    40.9      35.9      9.2    45.1
                          --------- --------- ------- --------- -------- -------
                             52.5       4.8    57.3      53.5      9.2    62.7
                          ========= ========= ======= ========= ======== =======

Consolidated Balance Sheet at 1 April 2004
(Date of transition to IFRS)
                                                 At 1 April 2004
                                                        Effect of
                                                        transition
                                      UK GAAP             to IFRS         IFRS
                                         £m                  £m            £m
Assets
Non-current assets
Goodwill                                 10.8                0.0          10.8
Intangible assets                         0.0                0.5           0.5
Investment properties                     0.0                1.2           1.2
Property, plant and equipment            32.7               (1.7)         31.0
Trade and other receivables               4.8                0.0           4.8
Deferred tax assets                       0.0                0.5           0.5
                                       --------           --------       -------
                                         48.3                0.5          48.8
                                       --------           --------       -------
Current assets
Inventories                               0.0                0.1           0.1
Trade and other receivables              37.4               (0.1)         37.3
Cash and cash equivalents                 4.6                0.0           4.6
                                       --------           --------       -------
                                         42.0                0.0          42.0
                                       --------           --------       -------
Liabilities
Current liabilities
Borrowings                               (1.0)               0.0          (1.0)
Trade and other payables                (26.8)               6.4         (20.4)
Current tax liabilities                  (2.8)               0.0          (2.8)
Provisions                                0.0               (0.1)         (0.1)
                                       --------           --------       -------
                                        (30.6)               6.3         (24.3)
                                       --------           --------       -------
                                       --------           --------       -------
Net current assets                       11.4                6.3          17.7
                                       --------           --------       -------

Non-current liabilities
Borrowings                               (9.0)               0.0          (9.0)
Deferred tax liabilities                 (1.2)               0.0          (1.2)
Provisions                               (0.4)               0.1          (0.3)
                                       --------           --------       -------
                                        (10.6)               0.1         (10.5)
                                       --------           --------       -------
                                       --------           --------       -------
Net assets                               49.1                6.9          56.0
                                       ========           ========       =======

Shareholders' funds
Share capital                             5.3                0.0           5.3
Share premium                            10.3                0.0          10.3
Retained earnings                        33.5                6.9          40.4
                                      ---------          ---------      --------
                                         49.1                6.9          56.0
                                      =========          =========      ========


Consolidated Cash Flow Statement
                                    Half year ended           Year ended 
                                  30 September 2004         31 March 2005
                                         Effect of              Effect of
                                        transition             transition
                                 UK GAAP  to IFRS IFRS  UK GAAP  to IFRS  IFRS
                                    £m       £m    £m      £m      £m      £m
Cash flows from operating
activities
Operating
profit                              8.9    (0.2)   8.7    20.3    (0.4)   19.9
Depreciation of
property, plant
and equipment                       2.1    (0.1)   2.0     4.5    (0.2)    4.3
Amortisation of
goodwill                            0.3    (0.3)   0.0     0.5    (0.5)    0.0
Amortisation of
intangibles                         0.0     0.1    0.1     0.0     0.2     0.2
Interest
received                            0.2     0.0    0.2     0.4     0.0     0.4
Interest paid                      (0.3)    0.0   (0.3)   (0.7)    0.0    (0.7)
Taxation paid                      (2.5)    0.0   (2.5)   (6.1)    0.0    (6.1)
Other non cash
flow items                          0.0     0.5    0.5     0.0     0.9     0.9
Changes in working capital
(excluding the effects of
acquisitions and disposal of
subsidiaries)
(Increase) in
inventories                         0.0     0.0    0.0     0.0    (0.1)   (0.1)
(Increase) in
receivables                        (6.3)    0.0   (6.3)   (9.4)    0.1    (9.3)
Increase in                                                              
payables                            3.3     0.0    3.3     5.5     0.0     5.5
Increase in
provisions                          0.0     0.0    0.0     0.1     0.0     0.1
                                  ------- ------- ------ ------- -------  ------
Net cash inflow
from operating
activities                          5.7     0.0    5.7    15.1     0.0    15.1
                                  ------- ------- ------ ------- -------  ------

Cash flows from investing
activities
Purchase of subsidiary
undertakings                        0.0     0.0    0.0     0.6     0.0     0.6
Proceeds from disposal of
property, plant and equipment       0.0     0.0    0.0     0.1     0.0     0.1
Purchase of property, plant and
equipment                          (4.5)    0.1   (4.4)   (6.7)    0.3    (6.4)
Purchase of intangible assets       0.0    (0.1)  (0.1)    0.0    (0.3)   (0.3)
                                  ------- ------- ------ ------- -------  ------
Net cash outflow from investing
activities                         (4.5)    0.0   (4.5)   (6.0)    0.0    (6.0)
                                  ------- ------- ------ ------- -------  ------
Cash flows from financing
activities
Equity dividends paid              (6.4)    0.0   (6.4)   (9.9)    0.0    (9.9)
Issue of share capital              0.7     0.0    0.7     2.0     0.0     2.0
Purchase of treasury shares         0.0     0.0    0.0    (1.2)    0.0    (1.2)
Repayment of borrowings            (1.0)    0.0   (1.0)   (1.0)    0.0    (1.0)
                                  ------- ------- ------ ------- -------  ------
Net cash outflow from financing
activities                         (6.7)    0.0   (6.7)  (10.1)    0.0   (10.1)
                                  ------- ------- ------ ------- -------  ------

Net decrease in cash and cash
equivalents                        (5.5)    0.0   (5.5)   (1.0)    0.0    (1.0)
Cash and cash equivalents at
beginning of period                 4.4     0.0    4.4     4.4     0.0     4.4
                                  ------- ------- ------ ------- -------  ------
Cash and cash equivalents at end
of period                          (1.1)    0.0   (1.1)    3.4     0.0     3.4
                                  ------- ------- ------ ------- -------  ------



UK GAAP required cash flows to be presented under seven different headings
whereas IAS 7 Cash Flow Statements requires cash flows to be presented under
three headings: cash flows from operating, investing and financing activities.
Consequently there are a number of re-classifications. There are no material
differences between the cash flow statement presented under IFRS and the cash
flow statement presented under UK GAAP.

Consolidated Income Statement - IFRS Adjustments
For the half year ended 30 September 2004
                                                    Share-based
                                         Goodwill      payments
                                          IFRS 3        IFRS 2           Total
                                          Note 1        Note 2       adjustments
                                             £m            £m               £m

Revenue                                       -             -              0.0
Cost of sales                                 -             -              0.0
                                         --------      --------        ---------
Gross profit                                  -             -              0.0
Administrative expenses                     0.3          (0.5)            (0.2)
                                         --------      --------        ---------
Operating profit                            0.3          (0.5)            (0.2)
Net interest payable                          -             -              0.0
                                         --------      --------        ---------
Profit before taxation                      0.3          (0.5)            (0.2)
Tax on profit on ordinary                     -           0.1              0.1
activities                               
                                         --------      --------        ---------
Profit for the period                       0.3          (0.4)            (0.1)
                                         --------      --------        ---------

Consolidated Income Statement - IFRS Adjustments
For the year ended 31 March 2005
                                                       Share-based
                                              Goodwill   payments
                                               IFRS 3      IFRS 2         Total
                                               Note 1      Note 2      adjustments
                                                  £m          £m             £m

Revenue                                            -           -            0.0
Cost of sales                                      -           -            0.0
                                              --------    --------      ---------
Gross profit                                       -           -            0.0
Administrative expenses                          0.5        (0.9)          (0.4)
                                              --------    --------      ---------
Operating profit                                 0.5        (0.9)          (0.4)
Net interest payable                               -           -            0.0
                                              --------    --------      ---------
Profit before taxation                           0.5        (0.9)          (0.4)
Tax on profit on ordinary activities               -         0.3            0.3
                                              --------    --------      ---------
Profit for the period                            0.5        (0.6)          (0.1)
                                              --------    --------      ---------


Consolidated Balance Sheet - IFRS Adjustments
At 30 September 2004
                                    Share-based
                       Goodwill       payments   Dividends
                        IFRS 3         IFRS 2      IAS 10   Other         Total
                        Note 1         Note 2      Note 3   Note 4     adjustments
                           £m            £m          £m        £m            £m
Assets
Non-current assets
Goodwill                   0.3           0.0         0.0      0.0           0.3
Intangible assets          0.0           0.0         0.0      0.5           0.5
Investment properties      0.0           0.0         0.0      1.2           1.2
Property, plant and
equipment                  0.0           0.0         0.0     (1.7)         (1.7)
Trade and other
receivables                0.0           0.0         0.0      0.0           0.0
Deferred tax assets        0.0           1.1         0.0      0.0           1.1
                        --------     ---------    --------  -------     ---------
                           0.3           1.1         0.0      0.0           1.4
                        --------     ---------    --------  -------     ---------
Current assets
Inventories                0.0           0.0         0.0      0.1           0.1
Trade and other
receivables                0.0           0.0         0.0     (0.1)         (0.1)
Cash and cash
equivalents                0.0           0.0         0.0      0.0           0.0
                        --------     ---------    --------  -------     ---------
                           0.0           0.0         0.0      0.0           0.0
                        --------     ---------    --------  -------     ---------
Liabilities
Current liabilities
Borrowings                 0.0           0.0         0.0      0.0           0.0
Trade and other
payables                   0.0           0.0         3.4      0.0           3.4
Current tax
liabilities                0.0           0.0         0.0      0.0           0.0
Provisions                 0.0           0.0         0.0     (0.1)         (0.1)
                        --------     ---------    --------  -------     ---------
                           0.0           0.0         3.4     (0.1)          3.3
                        --------     ---------    --------  -------     ---------
                        --------     ---------    --------  -------     ---------
Net current assets         0.0           0.0         3.4     (0.1)          3.3
                        --------     ---------    --------  -------     ---------

Non-current
liabilities
Borrowings                 0.0           0.0         0.0      0.0           0.0
Deferred tax
liabilities                0.0           0.0         0.0      0.0           0.0
Provisions                 0.0           0.0         0.0      0.1           0.1
                        --------     ---------    --------  -------     ---------
                           0.0           0.0         0.0      0.1           0.1
                        --------     ---------    --------  -------     ---------
                        --------     ---------    --------  -------     ---------
Net assets                 0.3           1.1         3.4      0.0           4.8
                        ========     =========    ========  =======     =========

Shareholders' funds
Share capital              0.0           0.0         0.0      0.0           0.0
Share premium              0.0           0.0         0.0      0.0           0.0
Retained earnings          0.3           1.1         3.4      0.0           4.8
                       ---------    ----------   --------- --------    ----------
                           0.3           1.1         3.4      0.0           4.8
                       =========    ==========   ========= ========    ==========

Consolidated Balance Sheet - IFRS Adjustments
At 31 March 2005
                                Share-based
                    Goodwill      payments    Dividends
                     IFRS 3        IFRS 2       IAS 10      Other         Total
                     Note 1        Note 2       Note 3      Note 4     adjustments
                        £m           £m           £m          £m            £m
Assets
Non-current
assets
Goodwill               0.5          0.0          0.0         0.0           0.5
Intangible             0.0          0.0          0.0         0.6           0.6
assets
Investment             0.0          0.0          0.0         1.1           1.1
properties
Property,
plant and              0.0          0.0          0.0        (1.7)         (1.7)
equipment
Trade and
other                  0.0          0.0          0.0         0.0           0.0
receivables
Deferred tax           0.0          1.8          0.0         0.0           1.8
assets              --------     --------     --------    --------     ---------
                       0.5          1.8          0.0         0.0           2.3
                    --------     --------     --------    --------     ---------
Current
assets
Inventories            0.0          0.0          0.0         0.2           0.2
Trade and
other                  0.0          0.0          0.0        (0.2)         (0.2)
receivables
Cash and cash
equivalents            0.0          0.0          0.0         0.0           0.0
                    --------     --------     --------    --------     ---------
                       0.0          0.0          0.0         0.0           0.0
                    --------     --------     --------    --------     ---------
Liabilities
Current
liabilities
Borrowings             0.0          0.0          0.0         0.0           0.0
Trade and
other                  0.0          0.0          6.9         0.0           6.9
payables
Current tax
liabilities            0.0          0.0          0.0         0.0           0.0
Provisions             0.0          0.0          0.0        (0.1)         (0.1)
                    --------     --------     --------    --------     ---------
                       0.0          0.0          6.9        (0.1)          6.8
                    --------     --------     --------    --------     ---------
                    --------     --------     --------    --------     ---------
Net current            0.0          0.0          6.9        (0.1)          6.8
assets              --------     --------     --------    --------     ---------

Non-current
liabilities
Borrowings             0.0          0.0          0.0         0.0           0.0
Deferred tax
liabilities            0.0          0.0          0.0         0.0           0.0
Provisions             0.0          0.0          0.0         0.1           0.1
                    --------     --------     --------    --------     ---------
                       0.0          0.0          0.0         0.1           0.1
                    --------     --------     --------    --------     ---------
                    --------     --------     --------    --------     ---------
Net assets             0.5          1.8          6.9         0.0           9.2
                    ========     ========     ========    ========     =========

Shareholders'
funds
Share                  0.0          0.0          0.0         0.0           0.0
capital
Share                  0.0          0.0          0.0         0.0           0.0
premium
Retained               0.5          1.8          6.9         0.0           9.2
earnings
                   ---------    ---------    ---------   ---------    ----------
                       0.5          1.8          6.9         0.0           9.2
                   =========    =========    =========   =========    ==========

Consolidated Balance Sheet - IFRS Adjustments
At 1 April 2004
                                      Share-based
                             Goodwill   payments   Dividends
                              IFRS 3     IFRS 2     IAS 10     Other          Total
                              Note 1     Note 2     Note 3     Note 4     adjustments
                                 £m         £m          £m        £m            £m
Assets
Non-current assets
Goodwill                        0.0        0.0         0.0       0.0           0.0
Intangible assets               0.0        0.0         0.0       0.5           0.5
Investment properties           0.0        0.0         0.0       1.2           1.2
Property, plant and
equipment                       0.0        0.0         0.0      (1.7)         (1.7)
Trade and other
receivables                     0.0        0.0         0.0       0.0           0.0
Deferred tax assets             0.0        0.5         0.0       0.0           0.5
                             --------   --------    --------  --------     ---------
                                0.0        0.5         0.0       0.0           0.5
                             --------   --------    --------  --------     ---------
Current assets
Inventories                     0.0        0.0         0.0       0.1           0.1
Trade and other
receivables                     0.0        0.0         0.0      (0.1)         (0.1)
Cash and cash
equivalents                     0.0        0.0         0.0       0.0           0.0
                             --------   --------    --------  --------     ---------
                                0.0        0.0         0.0       0.0           0.0
                             --------   --------    --------  --------     ---------
Liabilities
Current liabilities
Borrowings                      0.0        0.0         0.0       0.0           0.0
Trade and other
payables                        0.0        0.0         6.4       0.0           6.4
Current tax
liabilities                     0.0        0.0         0.0       0.0           0.0
Borrowings                      0.0        0.0         0.0       0.0           0.0
Provisions                      0.0        0.0         0.0      (0.1)         (0.1)
                             --------   --------    --------  --------     ---------
                                0.0        0.0         6.4      (0.1)          6.3
                             --------   --------    --------  --------     ---------

Net current assets              0.0        0.0         6.4      (0.1)          6.3
                             --------   --------    --------  --------     ---------

Non-current liabilities
Borrowings                      0.0        0.0         0.0       0.0           0.0
Deferred tax liabilities        0.0        0.0         0.0       0.0           0.0
Provisions                      0.0        0.0         0.0       0.1           0.1
                             --------   --------    --------  --------     ---------
                                0.0        0.0         0.0       0.1           0.1
                             --------   --------    --------  --------     ---------
                             --------   --------    --------  --------     ---------
Net assets                      0.0        0.5         6.4       0.0           6.9
                             ========   ========    ========  ========     =========


Notes to the IFRS Adjustments
KEY INCOME STATEMENT AND BALANCE SHEET ADJUSTMENTS

 1. Business combinations

IFRS 3 Business Combinations introduces significant changes to the accounting
for acquisitions compared to UK GAAP. The international standard requires
recognition of all intangible assets that meet the IAS 38 recognition criteria.
Any goodwill arising from business combinations is not amortised under IFRS 3,
but is subject to impairment tests annually or whenever there is an indication
of impairment. Negative goodwill is recognised immediately in the income
statement. The requirement to cease amortising goodwill has the impact of
increasing profit before taxation by £0.5 million in the year to 31 March 2005
(six months to 30 September 2004 - £0.3 million). Net assets at 31 March 2005
increased by £0.5 million (30 September 2004 - £0.3 million; 1 April 2004 - not
applicable).

 2. Share-based payments

Under UK GAAP, the Group recognised a charge in respect of grants made to
employees under the long term incentive plan based on the difference between the
exercise price of the option and the market value of a Business Post share at
the grant date. No other share-based payment charges were recognised under UK
GAAP as either the grant had been made at market value (share option schemes) or
were specifically exempt from being reported (employee sharesave schemes).

IFRS 2 requires that all share-based payments are reported in the profit and
loss account, including share option schemes, long term incentive plans and
employee sharesave schemes, based on the fair value of the award at the grant
date (equity-settled plans) or at each reporting date (cash settled plans).

Under the transitional rules the Group is required to report the costs of all
grants made after 7 November 2002 that had not vested at 1 April 2004, the
effective date of IFRS. However, the standard encourages application of IFRS 2
to other grants providing the company has disclosed publicly the fair value of
those awards determined in accordance with IFRS 2. The Group has therefore
elected to apply IFRS 2, 'Share-based Payments' retrospectively to all options
granted but not fully vested at the reporting date, rather than only those
granted after 7 November 2002. The fair values of awards granted prior to 7
November 2002 were published on the Business Post website on 16 May 2005.
Consequently the share-based payment charge for the year ended 31 March 2005
reflects all options granted and not fully vested at 31 March 2004.

For the year ended 31 March 2005, application of IFRS 2 results in a pre-tax
charge to the income statement of £0.9m. The pre-tax effect is offset by a
deferred tax credit of £0.3m, and thus the net effect on post-tax profit for the
year ended 31 March 2005 is £0.6m. Deferred tax is calculated on the basis of
the difference between the market price at the balance sheet date and the option
exercise price. The excess of the deferred tax over the cumulative income
statement charge is recognised in equity (for the year ended 31 March 2005 this
amounted to a credit of £1.0m to retained earnings). The deferred tax asset
recognised as at 31 March 2004 and 31 March 2005 relating to the share option
schemes is £0.5m and £1.8m respectively.

 3. Dividends

Under UK GAAP, the Group recognised a provision for the dividend declared within
its financial statements. IFRS states that dividends approved after the
reporting date do not meet the definition of a present obligation and should not
therefore be recognised. Instead they should be accounted for in the period in
which they are approved. The impact of this is to increase net assets at 31
March 2005 by £6.9 million (30 September 2004 - £3.4 million; 1 April 2004 -
£6.4 million).


 4. Other

Deferred taxation
In respect of deferred taxation, under UK GAAP, the Group recognised deferred
taxation only on timing differences that arose from the inclusion of gains and
losses in tax assessments in periods different from those in which they were
recognised in the financial statements.

Under IAS 12, 'Income Taxes', deferred tax is provided in full, using the
liability method, on temporary differences arising between the tax bases of
assets and liabilities and their carrying amounts in the financial statements.
Deferred tax assets are recognised to the extent that it is probable that future
taxable profit will be available against which the temporary differences can be
utilised.

Under UK GAAP, deferred tax assets and liabilities were shown on a net basis.
IFRS requires separate disclosure of deferred tax assets and liabilities.

Consequently, an additional £1.8m deferred tax asset, as calculated on the
difference in the market price of a Business Post Group share at the balance
sheet date and the option exercise price following the application of IFRS 2,
'Share-based payments', has been included within non-current assets as at 31
March 2005.

Investment properties
IFRS significantly widens the definition of investment properties. Investment
properties previously disclosed within property, plant and equipment have now
been separately reclassified. The net book value of investment properties
reclassified was £1.1m at 31 March 2005, £1.1m at 30 September 2004, and £1.2m
at 31 March 2004.

Intangible assets
Under UK GAAP, capitalised computer software was included within property, plant
and equipment. In accordance with IFRS, capitalised software not integral to
plant and equipment is classified as an intangible asset. The net book value of
computer software reclassified as intangible assets was £0.6m at 31 March 2005,
£0.5m at 30 September 2004 and £0.5m at 1 April 2004.

Provisions
Under UK GAAP, Group provisions are not disclosed according to their expected
usage date. IFRS requires that provisions should be classified into current
liabilities and non-current liabilities. As a result, £0.1m of provisions have
been reclassified as current liabilities in the consolidated balance sheet as at
each of 31 March 2005, 30 September 2004 and 1 April 2004.

 5. Financial instruments

The exemption permitting the deferral of the introduction of IAS 32 and IAS 39,
the International Accounting Standards on Financial Instruments, until 1 April
2005 has been utilised. Comparative information has not been restated.

IFRS requires that the interest rate cap contract is recognised at fair value,
whereas under UK GAAP the cost of this hedging instrument was amortised over its
useful economic life. This has resulted in a £0.1m write-down against reserves
at 1 April 2005.

Principal Accounting Policies
The principal accounting policies of the Group under IFRS are set out below.
These have been applied with effect from 1 April 2004.




Basis of Accounting
The financial statements have been prepared under the historical cost convention
as modified by the revaluation of certain financial assets and financial
liabilities held for trading, using the accounting policies the Group expects to
adopt in its 2006 Annual Report. These accounting policies are based on the
EU-adopted International Financial Reporting Standards (IFRS) and IFRIC
interpretations that the Group expects to be applicable at that time. The IFRS
and IFRIC interpretations that will be applicable at 31 March 2006, including
those that will be applicable on an optional basis, are not known with certainty
at the time of preparing these interim financial statements.

 a. Consolidation

Subsidiaries are consolidated from the date on which control is transferred to
the Group and cease to be consolidated from the date on which control is
transferred out of the Group. On acquisition of a subsidiary, all the
subsidiary's assets and liabilities that exist at the date of acquisition are
recorded at their fair values reflecting their condition at that date. Changes
to those assets and liabilities, and the resulting gains and losses that arise
after the Group has gained control of the subsidiary are credited or charged to
the post acquisition income statement.

Goodwill represents the excess of the cost of the acquisition over the fair
value of identifiable net assets of a subsidiary at the date of acquisition.
Goodwill is not amortised but is measured at cost less impairment losses.

Goodwill is tested for impairment at least annually. The company performs its
annual impairment review at the cash-generating unit level.

On the disposal of a business, goodwill relating to that business remaining on
the balance sheet is included in the determination of the profit or loss on
disposal.

 b. Intangible assets

Intangible assets include acquired computer software licences not part of the
operating software acquired with a related piece of hardware. These are
capitalised on the basis of the costs incurred to acquire and bring to use the
specific software. These costs are amortised over their estimated useful lives,
normally four years.

Intangible assets created within the business are not capitalised and
expenditure is charged against profits in the year in which it is incurred.

 c. Property, plant and equipment

Property, plant and equipment are stated at cost less accumulated depreciation
and any impairment in value. Land is not depreciated. Depreciation is calculated
over the estimated economic useful life of the asset as follows:

Freehold buildings                 fifty years on a straight line basis
Short leasehold premises           the period of the lease on a straight line
                                   basis
Motor vehicles, plant, and         10% to 33% annually on a reducing balance
equipment                          basis
Computer equipment                 14% to 33% annually on a straight line
                                   basis.

Property, plant and equipment are impaired if their recoverable amount falls
below their carrying value. Impairment losses are charged immediately to the
income statement.

Investment property is accounted for under the cost model, at cost less
accumulated depreciation and accumulated impairment losses.

 d. Investments

Investments in Group undertakings are stated at cost less any provision for
impairment.

 e. Inventories

Inventories are stated at the lower of cost and net realisable value.

 f. Finance and operating leases

Costs in respect of operating leases are charged on a straight-line basis over
the term of the lease. Leasing agreements, which transfer to the Group
substantially all the benefits and risks of ownership of an asset, are treated
as if the asset has been purchased outright. The assets are included in fixed
assets and the capital elements of the leasing commitments are shown as
obligations under finance leases. The lease rentals are treated as consisting of
capital and interest elements. The capital element is applied to reduce the
outstanding obligations and the interest element is charged against profit so as
to give constant periodic rates of charge on the remaining balance outstanding
at each accounting period. Assets held under finance leases are depreciated over
the shorter of the lease term and the useful lives of equivalent owned assets.

 g. Revenue

Revenue is recognised in the accounting period in which consignments are
delivered to customers.

Franchise income is recognised over the life of the franchise agreement in
proportion to the share of services rendered, by reference to the proportion of
the total services to be provided.

All revenues are stated net of value added tax.

 h. Deferred taxation

The company provides deferred income tax using the balance sheet liability
method on all temporary differences at the balance sheet date between the tax
bases of assets and liabilities and their carrying amounts for financial
reporting purposes. Deferred tax assets are recognised for all deductible
temporary differences to the extent that it is probable that taxable profit will
be available against which the deductible temporary differences, carry-forward
of unused tax assets and unused tax losses can be utilised. Deferred income tax
assets and liabilities are measured at the tax rates that apply to the period
when the asset is realised or the liability is settled, based on tax rates (and
tax laws) that have been enacted or substantively enacted at the balance sheet
date.

Deferred taxation is recognised in the income statement unless it relates to
taxable transactions taken directly to equity, in which case the deferred tax is
also recognised in equity. The deferred tax is released to the income statement
at the same time as the taxable transaction is recognised in the income
statement.

 i. Pension costs

The Group sponsors employees' personal pension plans. The assets of the plans
are held separately from those of the Group in independently administered funds.
The pension costs charged in the income statement represent contributions
payable by the Group to the plans together with the administration charges of
the plans.

 j. Foreign currencies

Transactions in foreign currencies are recorded in sterling at the rate ruling
at the transaction date. Monetary assets and liabilities denominated in foreign
currencies are translated at the rate of exchange ruling at the balance sheet
date. All exchange differences arising from trading transactions are dealt with
in the income statement.

 k. Share-based payments

The costs of equity-settled share-based payments are recognised in the income
statement with a corresponding increase in equity over the vesting period as
services are provided to the Group. The charge is based on the fair value of the
equity instrument granted and the number of equity instruments that are expected
to vest.

The fair value is measured at grant date and takes account of vesting conditions
that relate to the market price of the company's shares. In order to determine
the value of the instrument a pricing model relevant to the type of instrument
is used.

The costs of cash-settled share-based payments are recognised in the income
statement with a corresponding increase in equity over the vesting period as
services are provided to the Group. The charge is based on the fair value of the
liability at each reporting date, with any changes in fair value recognised in
the income statement.

 l. Provisions

Provisions are recognised when the Group has a present obligation (legal or
constructive) as a result of a past event, it is probable that an outflow of
resources embodying economic benefits will be required to settle the obligation
and a reliable estimate can be made of the amount of the obligation. Where the
Group expects a provision to be reimbursed, for example under an insurance
contract, the reimbursement is recognised as a separate asset but only when the
reimbursement is virtually certain. If the effect of the time value of money is
material, provisions are determined by discounting the expected future cashflows
at a pre-tax rate that reflects current market assessments of the time value of
money and, where appropriate, the risks specific to the liability. Where
discounting is used, the increase in the provision due to the passage of time is
recognised as an interest expense.

 m. Dividends

Dividends are recognised in the financial statements as a distribution from
retained earnings in the period in which they are approved.

 n. Financial instruments

The Group classifies its financial assets into the following categories:
financial assets at fair value through profit or loss, loans and receivables,
and available for sale financial assets.

The interest rate cap instrument is re-measured at fair value at each reporting
date, with any gains or losses credited or charged to the income statement.

Loans and receivables are recorded at cost less provision for bad debts.

Available for sale financial assets includes cash, which is stated inclusive of
accrued interest.

Financial liabilities are all classified at amortised cost.

Key Exemptions and Exceptions

In adopting IFRS, the principal exemptions and exceptions applied by the
company, as set out within IFRS 1, are as follows:

(a)    The Group has elected not to apply IFRS 3, 'Business Combinations',
retrospectively to business combinations that occurred before the date of
transition. Consequently, goodwill amortisation for the year ended 31 March 2005
has been reversed.
(b)    The Group has elected to apply IFRS 2, 'Share-based Payments'
retrospectively to all options granted but not fully vested at the reporting
date. Consequently the share-based payment charge for the year ended 31 March
2005 reflects all options granted and not fully vested at 31 March 2004.
(c)    The Group has applied the IFRS 1 exemption from the requirement to
restate comparative information for the effects of adopting IAS 32, 'Financial
Instruments: Disclosure and Presentation', and IAS 39, 'Financial Instruments:
Recognition and Measurement'. The Group will not restate comparative information
at 1 April 2004 or for the year to 31 March 2005 for these standards.




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