28th Sep 2005 07:02
IFG Group PLC28 September 2005 IFG GROUP PLC ANNOUCEMENT 28 SEPTEMBER 2005 PRESS ANNOUNCEMENT FINANCIAL HIGHLIGHTSFOR THE SIX MONTHS ENDED 30 JUNE 2005 Adjusted Adjusted Measures Measures Total Total Six Months Six Months Six Months Six Months Ended Ended Ended Ended 30 June 2005 30 June 2004 30 June 2005 30 June 2004 Unaudited Unaudited Unaudited Unaudited •'000 •'000 Notes •'000 •'000 Revenue 42,523 40,366 1 42,523 44,965Operating profit 6,303 6,968 2 5,601 7,088Profit before income tax 5,164 5,050 2 4,434 4,930EPS calculationconsistent with prior year - in cent 6.26 6.03 3 n/a n/aBasic earningsper ordinary share - in cent n/a n/a 5.13 6.21Interim dividend per ordinary share - in cent 0.95 0.76Group debt 38,500 41,200Renewal income 13,666 11,960 Commenting on the results, Richard Hayes, chief executive, said: "The 42% increase in profits from the three core activities of scale afterinterest coupled with continuing investment in areas where we see furtherpotential leaves us well on course to deliver on our ambitious growth targets." Adjusted measures of revenue and earnings are presented in this first set ofIFRS financial information to be issued by IFG Group plc in order to enableusers to understand the Group's comparative performance as it would have beenmeasured under Irish GAAP in effect during 2004. Notes: 1. Revenue in relation to adjusted measures excludes amounts in respect ofemployee leasing in 2004. The results of the employee leasing unit are includedunder associates in 2005. 2. Adjusted measures figures are stated before exceptional items, IFRSadjustments and share option charges. 3. Reconciliation of adjusted earnings: Six Months Ended Six Months Ended 30 June 2005 30 June 2004 Per share Earnings Per share Earnings Cent •'000 Cent •'000Profit attributable to equityholders 5.13 3,343 6.21 4,039IFRS adjustments 0.37 239 (0.47) (308)Exceptional adjustments 0.43 285 0.17 109Share option charges 0.33 217 0.12 79 ------- ------- ------- -------Adjusted earnings 6.26 4,084 6.03 3,919 ======= ======= ======= ======= The directors report that operating profit for the six months ended 30 June 2005was €5.6 million compared with €7.1 million in the previous period. Profitbefore taxation was €4.4 million compared with a profit before taxation of €4.9million in the previous period. Basic earnings per share were 5.13 cent (2004HY6.21 cent). The Group has performed to expectations in the first half. This reflects animprovement in the underlying performance of the business when adjustment ismade for certain non recurring trading profits in the first half of 2004. Renewal income credited, a key measurement of the future of the company, was€13.7 million, an increase of 14% on the 2004 comparative figure of €12.0million. Renewal income includes insurance renewals, trustee fees, actuarialfees and fund management fees which recur over a long period. The Board has decided to pay an interim dividend of 0.95 cent (2004HY 0.76 cent)per share subject to withholding tax at 20%. The dividend which represents anincrease of 25% on the previous period will be paid to qualifying shareholderson the Register at the close of business on 18 November 2005. Dividends warrantswill be posted on 2 December 2005. Debt Group Banking and deferred consideration commitments are summarised and comparedto the previous half year and year-end below. As at 30 June As at 31 December As at 30 June 2005 2004 2004 Core Invest Total Core Invest Total Core Invest Total •'m •'m •'m •'m •'m •'m 'm •'m •'mNet debt perbalance sheet 34.7 3.8 38.5 30.2 3.8 34.0 30.1 3.8 33.9Bank guaranteeddeferredconsideration - - - - - - 4.5 - 4.5 ------ ------ ------ ------ ------ ------- ------ ------ ------Total bankcommitment 34.7 3.8 38.5 30.2 3.8 34.0 34.6 3.8 38.4Contingentdeferredconsideration - 2.7 2.8 ------ ------ ------ ------ ------ ------- ------ ------ ------TotalCommitment 38.5 36.7 41.2 ====== ====== ====== ====== ====== ======= ====== ====== ====== The overall net debt position is slightly higher than at the start of the year.This is largely a function of the timing of significant cash payments andreceipts in both our International and Mortgage Intermediary businesses (thecomparable figure on 31st August 2005 is €29.0 million). The long term record ofdebt reduction is expected to be maintained through the second half of the yearand to be reflected in the debt levels at the end of year. Net debt now consists of a mix of secured lending and unsecured borrowingfacilities, with maturity and amortisation profiles over the next four years. Group Performance The performance of the Group in the first six months split between its mainactivities was as follows: Total Total Operating Operating Profit/(loss) Profit/(loss) Six Months Six Months Ended Ended 30 June 2005 30 June 2004 •'000 •'000 International Trustee and Corporate Services 2,954 2,765Financial ServicesActuarial and Pensioneer Trustee 1,622 1,575Financial Services - UK 309 (5) Mortgage & Title Insurance 1,865 1,518Financial Services including Central Overhead -Ireland (447) 1,083Employee leasing - 32 ---------- ---------Operating profit before non recurring items 6,303 6,968 IFRS adjustments (200) 308Exceptional items (285) (109)Share option charges (217) (79) ---------- ---------Operating Profit 5,601 7,088 ========== ========= In the first half financing costs have been reduced to €1.3 million against €2.2million in the same period last year. This has been achieved by repayment of 8%STG£4 million loan note coupled with increased interest earned through businessactivity. The profits from the three core activities of scale, International Trustee andCorporate Services, Actuarial and Pensioneer Trustee and Mortgage and TitleInsurance amounting to €6.4 million (2004 €5.9m) less the interest paid of €1.3million (2004 €2.2 million) have grown by 42%. The International Trustee and Corporate Services division continues to deliveracross all business lines. The business exceeded corresponding 2004 profits by7% and this must be viewed in the context of a first half in the previous yearwhich was unexpectedly good. In August, the Group announced that the divisionhas entered into a three year contract with one of its existing clients for theprovision of management and secretarial services under which it has received anupfront payment of £7.5 million (€10.9 million). UK Actuarial and Pensioneer Trustee was marginally up on the prior period andhas recovered from a poor second half in 2004. This reflects a stabilising ofthe Manchester business. While pension reform legislation is not expected toaffect the business until next year, it is expected to offer new and attractiveopportunities in due course. The UK fee based IFA business remains firm, and the market opportunity aroundadvising people emigrating from the UK is attractive, but the traditional IFAoperation generally remains weak. We are undertaking a review of the businessstructure. The closure of Berkeley Jacobs has positively impacted the results. In Ireland, the Mortgage Intermediary business continues to deliver in primelending. Cheques issued by lenders to clients of the Group amounted to €644m(2004HY €503m), an increase of 28%. Our non conforming operation is deliveringto conservative targets with cheques issued at €34m compared to €12m for the same period in the previous year. The Title Insurance business is now deliveringon the Group's second half investment in 2004, with requests for insurance up by37%. There was a broadly good performance from the remaining Irish Financial Servicesbusiness which has been adversely affected by poor performance from ourInvestment Management and Policy Trading units. Outlook The business continues to narrow towards a set of core competencies which theBoard believes will deliver growth. The Group remain focused on debt reductionand remain confident of achieving expectations for the full year. Consolidated Income StatementSix months ended 30 June 2005 Six Months Six Months Year Ended Ended Ended 30 June 2005 30 June 2004 31 Dec 2004 Unaudited Unaudited Audited Notes •'000 •'000 •'000 Revenue 4 42,523 44,965 95,373 Cost of sales (2,287) (3,760) (19,226) --------- --------- ---------Gross profit 40,236 41,205 76,147 Operating expensesAdministrative expenses(excluding exceptional items) (34,350) (34,008) (66,068)Exceptional items 5 (285) (109) (9,567) --------- --------- ---------Total administrative expenses (34,635) (34,117) (75,635) Operating profit 4 5,601 7,088 512Finance costs-net (1,267) (2,224) (3,703)Share of profit of associates 100 66 106 --------- --------- ---------Profit/(loss) before income tax 4,434 4,930 (3,085)Income tax (expense)/credit 6 (672) (606) 516 --------- --------- --------- Profit/(loss) for the period 3,762 4,324 (2,569) ========= ========= ========= Profit/(loss) for periodattributable to:Equity holders of the Company 3,343 4,039 (3,227)Minority interest 419 285 658 --------- --------- --------- 3,762 4,324 (2,569) ========= ========= =========Earnings per ordinary share (cent)Basic 3 5.13 6.21 (4.96) ========= ========= =========Fully Diluted 3 5.12 6.19 (4.96) ========= ========= ========= Consolidated Balance SheetAs at 30 June 2005 30 June 2005 30 June 2004 31 Dec 2004 Unaudited Unaudited Audited •'000 •'000 •'000AssetsNon-current assetsProperty plant & equipment 6,041 5,975 5,870Intangible assets 53,862 60,720 51,203Investments in associates 2,141 408 2,041Deferred income tax assets 959 996 1,492Available for sale financial assets 335 727 630 --------- --------- --------- 63,338 68,826 61,236 --------- --------- --------- Current assetsInventories 1,539 1,714 1,124Trade and other receivables 35,646 44,099 34,786Current income tax asset 1,358 1,320 1,415Cash and cash equivalents 14,525 21,023 17,944 --------- --------- --------- 53,068 68,156 55,269 --------- --------- --------- --------- --------- ---------Total assets 116,406 136,982 116,505 ========= ========= ========= LiabilitiesNon-current liabilitiesBorrowings 39,801 46,602 39,026Retirement benefit obligations 881 881 881Provisions for other liabilitiesand charges 1,250 5,972 1,250 --------- --------- --------- 41,932 53,455 41,157 --------- --------- --------- Current liabilitiesTrade and other payables 28,208 35,566 32,387Current income tax liabilities 899 2,370 1,574Borrowings 13,201 8,308 12,936Provisions for other liabilitiesand charges 2,997 4,576 3,682 --------- --------- --------- 45,305 50,820 50,579 --------- --------- --------- --------- --------- ---------Total liabilities 87,237 104,275 91,736 ========= ========= ========= --------- --------- ---------Net assets 29,169 32,707 24,769 ========= ========= ========= Equity and reservesShare capital 7,827 7,800 7,827Share premium 44,867 44,831 44,867Other reserves 2,491 493 2,231Retained earnings (27,806) (22,069) (31,529) --------- --------- --------- 27,379 31,055 23,396 Minority interest 1,790 1,652 1,373 --------- --------- --------- Total equity 29,169 32,707 24,769 ========= ========= ========= Consolidated Cash Flow StatementSix months ended 30 June 2005 Six months Six months Year Ended Ended Ended 30 June 2005 30 June 2004 31 Dec 2004 Unaudited Unaudited Audited Notes •'000 •'000 •'000 Cash flows from operatingactivitiesCash generated from operations 8 1,737 13,758 23,258Interest received 332 205 383Taxation payments (674) (563) (825) --------- --------- ---------Total cash flows fromoperating activities 1,395 13,400 22,816 --------- --------- --------- Cash flows from investingactivitiesPurchase of property, plantand equipment (734) (1,021) (2,011)Sale of property, plant andequipment 90 61 110Purchase of subsidiaryundertakings (315) (109) (492)Deferred consideration onprior (2,687) (24,700) (29,136)year acquisitionsInterest on loan notesissued on acquisitions - (34) (75)Sale of interest insubsidiary undertaking - 9,050 8,381 --------- --------- ---------Total cash flows frominvesting activities (3,646) (16,753) (23,223) --------- --------- --------- Cash flows from financingactivitiesEquity dividends paid - - (1,444)Interest paid (1,757) (2,128) (3,819)Dividends paid to minorityinterests - - (606)Issue of share capital - - 63Repayment of debt (132) (1,910) (1,739)New loans in period - 16,475 20,897Senior unsecured notes repaid - (7,700) (13,408)Capital element of financelease rentals (67) (173) (294) --------- --------- ---------Total cash flows fromfinancing activities (1,956) 4,564 (350) --------- --------- --------- Net effect of currencytranslation on cash and bankoverdrafts 570 682 31 --------- --------- --------- (Decrease)/increase in cashand bank overdrafts (3,637) 1,893 (726) Cash and bank overdrafts atthe beginning of the period 16,307 17,033 17,033 --------- --------- --------- Cash and bank overdrafts 12,670 18,926 16,307 ========= ========= ========= Statements of Changes in Equity Attributable Share Share Conversion Other Translation Retained To Equity Minority Total Caital Premium Reserve Reserves Reserve Earnings Holders Interest Equity •'000 •'000 •'000 •'000 •'000 •'000 •'000 •'000 •'000 Balance at 1January 2005 7,827 44,867 414 2,036 (6,276) (25,437) 23,431 1,373 24,804Change in equity for the period Currencytranslationadjustments - - - - 1,634 - 1,634 (2) 1,632 Profit for theperiod - - - - - 3,343 3,343 419 3,762 Dividends - - - - - (1,070) (1,070) - (1,070) Fair valueadjustments - - - (176) - - (176) - (176) Equity shareoptionsgranted - - - 217 - - 217 - 217 ----- ------ ------ ------ ------ ------ ------ ------ -----At 30 June2005 7,827 44,867 414 2,077 (4,642) (23,164) 27,379 1,790 29,169 ===== ====== ====== ====== ====== ====== ====== ====== ===== Balance at 1January 2004 7,800 44,831 414 - (4,773) (20,512) 27,760 1,370 29,130 Change in equity for the period Currencytranslationadjustments - - - - 197 - 197 (3) 194 Profit for theperiod - - - - - 4,039 4,039 285 4,324 Dividends - - - - - (1,020) (1,020) - (1,020) Equity shareoptionsgranted - - - 79 - - 79 - 79 ----- ------ ------ ------ ------ ------ ------ ------ -----At 30 June2004 7,800 44,831 414 79 (4,576) (17,493) 31,055 1,652 32,707 ===== ====== ====== ====== ====== ====== ====== ====== ===== Balance at 1January 2004 7,800 44,831 414 - (4,773) (20,512) 27,760 1,370 29,130 Change in equity for the period Currencytranslationadjustments - - - - (1,503) - (1,503) (1) (1,504) Loss for theperiod - - - - - (3,227) (3,227) 658 (2,569) Revaluation ofinvestment inassociate - - - 1,570 - - 1,570 - 1,570 Dividends - - - - - (1,514) (1,514) (606) (2,120) Issue of sharecapital 27 36 - - - - 63 - 63 Sale ofinterest insubsidiarywith MinorityInterest - - - - - - - (48) (48) Equity shareoptionsgranted - - - 247 - - 247 - 247 ----- ------ ------ ------ ------ ------ ------ ------ ----- At 31 December2004 7,827 44,867 414 1,817 (6,276) (25,253) 23,396 1,373 24,769 Adoption ofIAS 32 and IAS39 - - - 219 - (184) 35 - 35 ----- ------ ------ ------ ------ ------ ------ ------ ----- At 1 January2005 7,827 44,867 414 2,036 (6,276) (25,437) 23,431 1,373 24,804 ===== ====== ====== ====== ====== ====== ====== ====== ===== Supplementary Information1. Basis of Preparation As part of the European Commission's plans to develop a single European capitalmarket, the application of IFRS is mandatory for the consolidated financialstatements for all European entities whose securities are listed on a regulatedexchange in the European Union (EU) and applies in respect of accounting periodscommencing on or after 1 January 2005. Accordingly, IFG Group plc ("Group") hasprepared these interim results for the period to 30 June 2005 on this basis. The Group's transition date is 1 January 2004 as this is the start date of theearliest period for which comparative information under IFRS will be presentedin the Group's 2005 Annual Report. The comparative financial information for theyear ended 31 December 2004 and for the six months ended 30 June 2004 have beenrestated on a basis consistent with those accounting policies expected to beapplied by the Group in preparing its first full financial statements inaccordance with IFRS at 31 December 2005, except where otherwise required orpermitted by IFRS 1 "First time adoption of International Financial ReportingStandards". In preparing this financial information, management has used its best knowledgeof the expected standards and interpretations, facts and circumstances, andaccounting policies that will be applied when Group prepares its first set offinancial statements in accordance with IFRS issued by the IASB and adopted foruse by the EU as of 31 December 2005. As a result, although the financial information presented in this report isbased on management's best knowledge of expected standards and interpretations,and current facts and circumstances this may change. For example, IFRS standardsand interpretation of those standards by the International Financial ReportingInterpretations Committee ("IFRIC") are subject to ongoing review and possibleamendment or interpretative guidance and therefore subject to change. Therefore,until Group prepares it first full set of financial statements in accordancewith IFRS issued by the IASB and adopted for use by the EU at 31 December 2005,the possibility cannot be excluded that the financial information presentedherein may have to be adjusted. This interim statement has been prepared on the historical cost basis except forcertain fixed assets, where the previous revaluation, being broadly comparableto fair value, was regarded as deemed cost on transition to IFRS, and themeasurement at fair value of certain financial instruments on adoption of IAS 32and IAS 39 at 1 January 2005. A separate document has been issued simultaneously with this Interim Report on28 September 2005 detailing the impact of IFRS on the Group's financialstatements for the year ended 31 December 2004 and the six months ended 30 June2004. That document also contains a full list of the Group's provisional IFRSaccounting policies and exemptions that have been availed of under IFRS. The interim statement was approved by the Board of Directors on 28 September2005. The interim financial information has been reviewed, but not audited, bythe Group's auditors, PricewaterhouseCoopers (PwC). 2. Provisional IFRS accounting policies Basis of preparation of the consolidated financial statements The consolidated financial statements of IFG Group Plc, which are presented ineuro have been prepared using the historical cost convention as modified by themeasurement at fair value of share options and available-for-sale financialassets. The preparation of financial statements in conformity with IFRS requires the useof certain critical accounting estimates. It also requires management toexercise its judgment in the process of applying the Company's accountingpolicies. These assumptions affect the reported amounts of revenues, expenses,assets and liabilities, and the disclosure of contingent liabilities at the dateof the financial statements. If in the future such estimates and assumptionswhich are based on management's best judgement at the date of the financialstatements, deviate from the actual outcome, the original estimates andassumptions will be modified as appropriate in the year in which thecircumstances change. Consolidation These financial statements are the consolidated financial statements of IFGGroup plc, a company registered in the Republic of Ireland and its subsidiaries("IFG"). The subsidiaries are entities over which the Group has the power to govern thefinancial and operating policies generally accompanying shareholdings of morethan 50% of the voting rights. Companies acquired during the year areconsolidated from the date on which control is transferred to the Group and arede-consolidated from the date that control ceases. The purchase method of accounting is used to account for the acquisition ofsubsidiaries by the Group. The cost of an acquisition is measured as the fairvalue of the assets given, equity instruments issued and liabilities incurred orassumed at the date of exchange, plus costs directly attributable to theacquisition. The excess of the cost of the acquisition over the fair value ofthe Group's share of the identifiable net assets acquired is recorded asgoodwill. Inter-company balances and transactions and resulting unrealisedincome are eliminated in full. Minority interests represent the proportion of the profit or loss and net assetsof a subsidiary attributable to equity interests that are not owned, directly orindirectly through subsidiaries, by the parent company. Associates Associates are entities, not being subsidiary undertakings, over which the Grouphas the ability to exercise significant influence over the operating andfinancial policies. The Group's share of the results and net assets ofassociates are included based on the equity method of accounting. The results ofassociates are included from the effective date on which the Group's significantinfluence arises until the date on which such significant influence ceases. Segment Reporting A segment is a distinguishable component of the Group that is engaged either inproviding services (business segment), or in providing services within aparticular economic environment (geographical segment), which is subject torisks and rewards that are different from those other segments. Foreign Currency Translation The presentational and functional currency of the Group and its Irishsubsidiaries is the euro (•). Transactions denominated in foreign currencies aretranslated into Euro at the rate of exchange ruling at the transaction date.Monetary assets and liabilities denominated in foreign currencies are translatedat the rate of exchange ruling at the balance sheet date. All translationdifferences are taken to the consolidated income statement with the exception ofdifferences on foreign currency borrowings that provide a hedge against a netinvestment in a foreign entity. These are taken directly to equity together withthe exchange difference on the net investment in the foreign entity until thedisposal of the net investment, at which time they are recognised in theconsolidated income statement. Results and cash flows of subsidiary undertakings with different functionalcurrency to the parent are translated into euro using average exchange ratesduring the year, and the related balance sheets have been translated using therates of exchange ruling at the balance sheet date. Adjustments arising ontranslation of the results of subsidiary undertakings with different functionalcurrency to the parent at average rates, and on the restatement of the openingnet assets at closing rates, are dealt with in a separate translation reservewithin equity, net of differences on related currency borrowings. All othertranslation differences are taken to the income statement. On disposal of a foreign operation, accumulated currency translation differencesare recognised in the income statement as part of the overall gain or loss ondisposal. The cumulative currency translation differences arising prior to thetransition date have been set to zero for the purposes of ascertaining the gainor loss on disposal of a foreign operation subsequent to 1 January 2004.Goodwill and fair value adjustments arising on acquisition of a foreignoperation are regarded as assets and liabilities of the foreign operation, areexpressed in the functional currency of the foreign operation and are recordedat the exchange rate at the date of the transaction and subsequentlyretranslated at the applicable closing rates. Property, Plant and Equipment Property, plant and equipment are stated at cost or deemed cost less accumulateddepreciation and impairment losses. The Group's UK properties were revalued in2003. At date of transition the Group has elected to use these revaluations asdeemed cost given that they were broadly comparable to fair value. Subsequent costs are included in an asset's carrying amount or recognised as aseparate asset, as appropriate, only when it is probable that future economicbenefits associated with the item will flow to the Group and the cost of thereplaced item can be measuredreliably. All other repair and maintenance costs are charged to the incomestatement during the financial period in which they are incurred. Property, plant and equipment are depreciated over their useful economic life ona straight line basis at the following rates: Buildings 2%Fixtures & Fittings 10-25%Motor vehicles 20-25%Office equipment 10-25%Computer equipment 20-33% The residual value and useful lives of property, plant and equipment arereviewed and adjusted if appropriate at each balance sheet date. On disposal of property, plant and equipment the cost and related accumulateddepreciation and impairments are removed from the financial statements and thenet amount, less any proceeds, is taken to the income statement. Business Combinations The Group applies the purchase method of accounting for all businesscombinations. The Group has availed of the IFRS 1 exemption in relation to businesscombinations and has not re-stated business combinations prior to the date oftransition. IFRS 3 will be applied prospectively by the Group from transitiondate and goodwill amortisation ceased from transition date. The cost of a business combination is the aggregate of the fair values at thedate of exchange of assets given, liabilities incurred or assumed, equityinstruments issued by the acquirer and any directly attributable costs.Adjustments to the business combination's cost that are contingent on futureevents are included in the combination's cost at the acquisition date if theadjustment is probable and has been reliably measured. At the date of acquisition, acquiree's identifiable net assets and contingentliabilities are measured at their fair values. Adjustments to the initialaccounting for a business combination are recognized within twelve months of theacquisition date and are effected prospectively from that date. The interest of minority shareholders is calculated based on fair values ofassets and liabilities at acquisition date. Intangible Assets Goodwill Goodwill arising on acquisitions prior to the date of transition to IFRS hasbeen retained at the previous Irish GAAP amount being its deemed cost subject tobeing tested for impairment. Goodwill written off to reserves under Irish GAAPprior to 1998 has not been reinstated and is not included in determining anysubsequent profit or loss on disposal. Goodwill on acquisitions is initially measured at cost being the excess of thecost of the business combination over the acquirer's interest in the net fairvalue of the identifiable asset, liabilities and contingent liabilities.Following initial recognition, goodwill is measured at cost less any accumulatedimpairment losses. Goodwill relating to acquisitions from 1 January 2004 andgoodwill carried in the balance sheet at 1 January 2004 is not amortised.Goodwill is reviewed for impairment annually or more frequently if events orchanges in circumstances indicate that the carrying value may be impaired. As atthe acquisition date, any goodwill acquired is allocated to each of thecash-generating units expected to benefit from the combination's synergies.Impairment is determined by assessing the recoverable amount of thecash-generating unit, to which the goodwill relates. Where goodwill forms part of a cash-generating unit and part of the operationwithin that unit are disposed of, the goodwill associated with the operationdisposed of is included in the carrying amount of the operation when determiningthe gain or loss on disposal of the operation. Goodwill disposed of in thiscircumstance is measured on the basis of the relative values of the operationdisposed of and the proportion of the cash-generating unit retained. Computer Software Computer software is stated at cost, less amortisation and provisions forimpairment, if any. Costs incurred on acquisition of computer software arecapitalised as are costs directly related to developing the programs. Costsassociated with maintaining software are recognised as an expense when incurred.Capitalised computer software is amortised over 3 to 5 years. Impairment of assets Assets that have an indefinite useful life are not subject to amortisation andare tested annually for impairment. Assets that are subject to amortisation arereviewed for impairment when events or circumstances indicate that the carryingvalue may be impaired or may not be recoverable. An impairment loss isrecognised to the extent that the carrying value of the assets exceeds itsrecoverable amount. For the purposes of assessing impairment, assets are groupedat the lowest levels for which there are separately identifiable cash flows(cash generating units). Financial assets From 1 January 2004 to 31 December 2004Financial fixed assets include investments in companies other than subsidiaries,associates and joint ventures. Such financial fixed assets are recorded at costless provision for impairment. From 1 January 2005The Group classifies its investments in the following categories: held tomaturity investments, loans and receivables and available-for-sale financialassets. The classification depends on the purpose for which the investments wereacquired. Management determines the classification of its investments at initialrecognition (i.e. 1 January 2005 being the date of transition for financialinstruments). Held-to-maturity investments. Held-to-maturity financial assets are securities with a fixed maturity that theGroup has the intent and ability to hold until maturity. During the periodspresented the Group did not hold any investments in this category. Loans and receivables Loans and receivables are non-derivative financial assets with fixed ordeterminable payments that are not quoted in an active market. They arise whenthe Group provides services directly to a debtor with no intention of tradingthe receivable. They are included in current assets, except for maturitiesgreater than 12 months after the balance sheet date. These are classified asnon-current assets. Loans and receivables are included in trade and otherreceivables in the balance sheet. Available-for-sale financial assets Available-for-sale financial assets are non-derivatives that are eitherclassified in this category or not classified in any other category. They areincluded in non-current assets unless management intends to dispose of theinvestment within 12 months of the balance sheet date. All financial assets are initially recorded at cost, including transactioncosts. All purchases and sales are recognised on the settlement date.Held-to-maturity financial assets are subsequently carried at amortised costusing the effective interest method. Available-for-sale financial assets aresubsequently carried at fair value with all unrealised changes in fair valuerecorded in equity. When available-for-sale financial assets are sold orimpaired, the accumulated fair value adjustments are included in the incomestatement as gains and losses from investment securities. Financial assets are assessed for impairment at each balance sheet date. In thecase of equity securities classified as available-for-sale, a significant orprolonged decline in the fair value of the security below its cost is consideredin determining whether the securities areimpaired. For such assets, any impairment charge is the amount currently carriedin equity for the difference between the original cost, net of any previousimpairment, and the fair value. Inventory Inventory is stated at the lower of cost and net realisable value. Work inprogress comprises cost incurred in bringing the pipeline of work to its presentcondition. Cash and Cash Equivalents Cash and short term deposits in the balance sheet comprise cash at bank and inhand and short term deposits with an original maturity of three months or less.Bank overdrafts that are repayable on demand and form part of the Group's cashmanagement are included as a component of cash and cash equivalents for thepurpose of the statement of cash flows. They are however shown as part ofborrowings in current liabilities on the balance sheet. Leases Finance leases, which transfer to the Group substantially all the risks andbenefits to ownership of the leased asset, are capitalised at the inception ofthe lease at the fair value of the leased asset or if lower the present value ofthe minimum lease payments. The corresponding liability to the lessor isincluded in the balance sheet as a finance lease obligation. Lease payments areapportioned between the finance charges and reduction of the lease obligation soas to achieve a constant rate of interest on the remaining balance of theliability. Finance charges are charged to the income statement as part offinance costs. Capitalised leased assets are depreciated over the shorter of the estimateduseful life of the asset or the lease term. Leases where the lessor retainssubstantially all the risks and benefits of ownership of the assets areclassified as operating leases. Operating lease payments are recognised as anexpense in the income statement on a straight line basis over the lease term. Interest - Bearing Loans and Borrowings All loans and borrowings are initially recognised at cost being the fair valueof the consideration received net of issue costs associated with the borrowing. After initial recognition, interest-bearing loans and borrowings aresubsequently measured at amortised cost using the effective interest method.Amortised cost is calculated by taking into account any issue costs, and anydiscount or premium on settlement. Gains and losses are recognised in the incomestatement when the liabilities are derecognised or impaired, as well as throughthe amortisation process. Taxation The tax expense in the income statement represents the sum of the tax currentlypayable and deferred tax.Tax currently payable is based on taxable profit for the year. Taxable profitdiffers from net profit as reported in the income statement because it excludesitems of income or expense that are taxable or deductible in other years and itfurther excludes items that are not taxable or deductible. The Group's liabilityfor current tax is calculated using rates that have been enacted orsubstantially enacted at the balance sheet date. Deferred income tax is provided in full, using the liability method, on alltemporary differences between the tax bases of assets and liabilities and theircarrying amounts in the financial statements. Deferred income tax is determinedusing tax rates (and laws) that have been enacted or substantially enacted bythe balance sheet date and are expected to apply in the year when the relateddeferred income tax asset is realised or the deferred income tax liability issettled. Deferred income tax is provided on temporary differences arising on investmentsin subsidiaries except to the extent that the timing of the reversal iscontrolled by the Group and it is probable that the temporary difference willnot reverse in the foreseeable future.Deferred income tax assets are recognised to the extent that it is probable thattaxable profit will be available against which the deductible temporarydifferences can be utilised.The carrying amount of deferred income tax assets is reviewed at each balancesheet date and reduced to the extent that it is no longer probable thatsufficient taxable profit would be available to allow all or part of thedeferred income tax asset to be utilised. Employee Benefits (A) Pension obligations Defined Contribution PlansObligations to the defined contribution pension plans are recognised as anexpense in the income statement as incurred. Defined Benefit PlanThe Group has taken the option to recognise in full in equity at the transitiondate the cumulative actuarial gains and losses applicable to the Group's definedbenefit pension scheme. From 1 January 2004, the Group will apply the "corridorapproach" in relation to the recognition of actuarial gains and lossesapplicable to the Group's defined benefit scheme. Actuarial gains and losses comprise the effects of differences between theprevious actuarial assumptions and what has actually occurred and the effects ofchanges in actuarial assumptions. The "corridor approach" refers to a thresholdbeing the higher of 10% of the fair value of the plan assets or 10% of thepresent value of the defined benefit obligations at the end of the previousreporting period. Actuarial gains and losses at the end of the previousreporting period in excess of this threshold are recognised as income or expenseover the average remaining service lives of employees participating in the plan.Other than these and the actuarial deficit recognised on transition to IFRS, theactuarial gain or loss is not recognised. The Group operates a defined benefit pension scheme via its subsidiary IFGManagement for eligible employees which require contributions to be made toseparately administered funds. The Group's net obligation in respect of definedbenefit pension schemes is calculated by estimating the amount of futurebenefits that employees have earned in return for their service in the currentand prior periods. That benefit is discounted to determine its present value,and the fair value of any plan asset is deducted. The discount rate employed indetermining the present value of the schemes' liabilities is determined byreference to market yields at the balance sheet date on high quality corporatebonds for a term consistent with the currency and term of the associatedpost-employment benefit obligations. The net surplus or deficit arising in the Group's defined benefit pensionschemes are shown within either non-current assets or liabilities on the face ofthe Group Balance Sheet. The deferred tax impact of pension scheme surpluses anddeficits is disclosed separately within deferred tax assets or liabilities asappropriate. Past service costs are recognised as an expense over the average period untilthe benefits become vested, in which case the past service costs are recognisedas an expense immediately. To the extent that the benefits vest immediately, theexpense is recognised immediately in the income statement. The expected returnon the plans' assets and the expected increase during the period in the presentvalue of the plans's liabilities arising are included in finance costs (net). The amounts charged to the income statement in respect of defined benefit plansconsist of current service cost, interest cost, the expected return of any planassets, actuarial gains and losses ( under the "corridor approach"), the effectof any curtailments or settlements and past service costs. (B) Share Based Payment Transactions Group share schemes allow employees to acquire shares in the company. The fairvalue of share options granted is recognised as an employee expense in theincome statement with a corresponding increase in equity. The fair value wasdetermined using the Black-Scholes model. Share options granted by the companyare subject to non market-based vesting conditions. The expense for the shareoptions shown in the income statement is based on the fair value of the totalnumber of options expected to vest and is allocated to accounting periods on astraight line basis over the vesting period. The cumulative charge to the incomestatement is only reversed where options do not vest where an employee inreceipt of share options leaves the Group before the end of the vesting period.The proceeds received by the company when the share options are exercised arecredited to share capital and share premium. In line with the transitionalarrangements set out in IFRS 2, "Share Based Payment", the recognition andmeasurement principles of this standard have been applied only in respect ofshare entitlements granted after 7 November 2002 and not vested by 1 January2005. The Group does not operate any cash-settled share-based payment schemes orshare-based payment transactions with cash alternatives as defined in IFRS 2. Provisions A provision is recognised in the balance sheet when the Group has a presentlegal or constructive obligation as a result of a past event, and it is probablethat an outflow of economic benefits would be required to settle the obligation.If the effect of the time value of money is material, provisions are determinedby discounting the expected future cash flows at a pre-tax rate that reflectsthe time value of money and, where appropriate, the risks specific to theliability.A provision for restructuring is recognised when the Group has approved adetailed and formal restructuring plan and announced its main provisions.Provisions are not recognised for future operating losses. Trade receivables Trade receivables are recognised initially at fair value and subsequentlymeasured at amortised cost using the effective interest method, less provisionfor impairment. A provision for impairment of trade receivables is establishedwhere there is objective evidence that the Group will not be able to collect allamounts due according to the original terms of receivables. The amount of theprovision is the difference between the asset's carrying amount and the presentvalue of estimated future cash flows. The amount of the provision is recognisedin the income statement. Revenue recognition Revenue comprises fees and commissions from the intermediation of financialservices, the provision of international trustee & corporate services, theprovision of actuarial and pensioneer trustee services and from employeeleasing. Revenue is recognised, when, and to the extent that, the Group hasobtained the right to consideration in exchange for the services that itprovides.Accordingly, initial commissions from the intermediation of financial servicesare recognised as revenue on the effective inception date of the product orservice, subject to a reduction for expected clawback where commission is earnedon an indemnity basis. Renewal or trail commissions are recognised as revenuewhen the contingent events which give rise to the right to receive thosecommissions, typically renewal or persistency, have occurred. In certaincircumstances, the Group may obtain a right to consideration when some but notall of it's contractual obligations have been fulfilled. In these circumstances,the Group recognises revenue to the extent that a right to consideration hasbeen obtained in relation to services provided up to that point.Where the Group receives payment from customers in advance of the performance ofits contractual obligations, a liability equal to the amount received isrecognised. That liability is reduced and the amount of the reduction recognisedas revenue, when and as the Group obtains the right to consideration in exchangefor the contracted service it provides. Net Financing Costs Net financing costs comprise interest payable on borrowings calculated using theeffective interest rate method, interest receivable on funds invested and gainsand losses on hedging instruments that are recognised in the income statement.Interest income is recognised in the income statement as it accrues, using theeffective interest method. The interest expense component of finance leasepayments is recognised in the income statement using the effective interest ratemethod. Share Capital Financial instruments that have been issued are classified as equity where theymeet the definition of equity and confer on the holder a residual interest inthe assets of the Group. Dividends Dividends on ordinary shares are recognised as a liability in the Group'sfinancial statements in the period in which the dividends are approved by theCompany's shareholders. Dividends declared after the balance sheet date aredisclosed in the subsequent events note. Netting Financial assets and liabilities are offset and the net amount reported in thebalance sheet if, and only if, there is a currently enforceable legal right toset off the recognised amounts and there is an intention to settle on a netbasis, or to realise an asset and settle the liability simultaneously. Accounting for Derivative Financial Instruments and Hedging activities Derivative financial instrumentsDerivative financial instruments are mainly used to manage exposures to foreignexchange risks.Derivatives are initially recognised at fair value on the date a derivativecontract is entered into and are subsequently remeasured at fair value. TheGroup does not have any hedging derivatives. Hedging The Group documents at the inception of the hedging transaction the relationshipbetween hedging instruments and hedged items, as well as its risk managementobjective and strategy for undertaking various hedge transactions. The Groupalso documents its assessments, both at hedge inception and on an ongoing basis,of the effectiveness of the hedge in offsetting changes in fair values or cashflows of hedged items. Net investment hedgesWhere foreign currency borrowings provide a hedge against a net investment in aforeign operation, foreign exchange differences are taken directly to a foreigncurrency translation reserve (being a separate component of equity). Cumulativegains and losses remain in equity until disposal of the net investment in theforeign operation at which point the related differences are transferred to theincome statement as part of the overall gain or loss on sale. Convertible Loan NotesFrom 1 January 2004 to 31 December 2004Convertible loan notes are classified as long term borrowings withinliabilities. From 1 January 2005Convertible loan notes are regarded as compound financial instruments ,consisting of a liability component and an equity component. The fair value ofthe liability component is estimated using the prevailing market interest rateat the date of issue for similar non-convertible debt and is included inliabilities. The difference between the fair value of the liability and the fairvalue of the compound financial instrument as a whole represents equity. 3. Earnings per Ordinary Share 30 June 2005 30 June 2004 31 Dec 2004 Unaudited Unaudited AuditedBasic-------Profit/(loss) after taxation andminority interest (•'000) 3,343 4,039 (3,227) --------- --------- ---------Weighted average number of ordinaryshares in issuefor the calculation of earningsper share 65,222,859 64,997,859 65,065,051 --------- --------- ---------Basic earnings/(loss) per share (•cent) 5.13 6.21 (4.96) --------- --------- ---------Diluted--------- Profit/(loss) after taxation andminority interest (•'000) 3,343 4,039 (3,227) --------- --------- ---------Weighted average number of ordinaryshares for the calculation ofdiluted earnings per share 65,235,655 65,228,910 65,103,129 --------- --------- --------- Diluted earnings/(loss) per share(• cent) 5.12 6.19 (4.96) --------- --------- --------- 4. Segmental Analysis Revenue 30 June 2005 30 June 2004 31 Dec 2004 Unaudited Unaudited Audited •'000 •'000 •'000Business Sector----------------- Financial Services 32,360 31,748 65,912International Trustee andCorporate Services 10,163 8,618 17,970Employee Leasing - 4,599 11,491 --------- --------- --------- 42,523 44,965 95,373 ========= ========= ========= Operating profit/(loss) 30 June 2005 30 June 2004 31 Dec 2004 Unaudited Unaudited Audited •'000 •'000 •'000Business Sector-----------------Financial Services 2,739 4,178 (4,824)Investment - 176 (97)International Trustee andCorporate Services 2,862 2,702 5,286Employee Leasing - 32 147 --------- --------- --------- 5,601 7,088 512 ========= ========= ========= 5. Exceptional Items 30 June 2005 30 June 2004 31 Dec 2004 Unaudited Unaudited Audited •'000 •'000 •'000Exceptional Items------------------- Director's pension 285 285 570Profit on sale of businesses - (176) (483)Goodwill impairment - - 7,374Impairment of investment - - 97Exceptional bonus payments - - 419Closure of pension releasebusiness - - 1,590 --------- --------- --------- 285 109 9,567 ========= ========= ========= 6. Taxation The charge for taxation for the six months ended 30 June 2005 is based on theestimated effective rate of taxation for the period. 30 June 2005 30 June 2004 31 Dec 2004 Unaudited Unaudited Audited •'000 •'000 •'000 Current tax - current periodexpense 590 1,872 1,262Current tax - prior period(over)/under provision (473) 18 3 --------- --------- ---------Total current tax 117 1,890 1,265Expense/(release) of deferred taxliability to current tax liability 555 (1,284) (1,781) --------- --------- ---------Net tax expense/(credit) 672 606 (516) ========= ========= ========= 7. Dividends 30 June 2005 30 June 2004 31 Dec 2004 Unaudited Unaudited Audited •'000 •'000 •'000Final declared dividend 1,070 1,020 1,020Interim dividend paid - - 494 --------- --------- --------- 1,070 1,020 1,514 ========= ========= ========= An interim ordinary dividend of €0.95 cent (2004 €0.76 cent) has been declaredsubsequent to 30 June 2005. 8. Reconciliation of operating profit to net cash inflow from operatingactivities 30 June 2005 30 June 2004 31 Dec 2004 Unaudited Unaudited Audited •'000 •'000 •'000Operating profit 5,601 7,088 512Impairment of investments andgoodwill - - 7,471Depreciation and amortisation 673 595 1,689(Profit)/loss on sale of fixedassets (18) 6 (11)Currency translation adjustment 156 (575) (856)Non-cash share based payments 217 79 247Decrease/(increase) in debtors (73) (7,685) 1,478Pension release closure - - 823Increase in stocks (359) (434) (598)Loan from/(to) associatedundertakings 103 (17) (90)(Decrease)/increase in creditors (4,563) 14,701 12,593 --------- --------- --------- 1,737 13,758 23,258 ========= ========= ========= 9. Contingent Liability On 11 February 2004, the Financial Services Authority ("FSA") published a FinalNotice arising from the investigation conducted by its Enforcement Divisionduring 2003, into sales and advice processes at Berkeley Jacobs FinancialServices Limited ('BJFS') during the period December 2000 to March 2003. BJFShas undertaken to review the advice provided to clients who released pensionbenefits during that period in order to establish whether these clients may havebeen disadvantaged. Arrangements for the review have been agreed with the FSAand it is progressing. An amount of €2.0m has been provided, being thedirectors' best estimate both of the costs of undertaking the review and theamount of redress, which might need to be paid in due course. However, as thisestimate is based on a number of assumptions which it is not possible toobjectively support, it is subject to uncertainty. The eventual costs could begreater or less than the amounts provided. Supplementary Information (Cont.) 10. Income StatementSix months ended 30 June 2004 - Reconciliation from Irish GAAP Irish Correction Goodwill/ Employee Associates Dividends Share Other IFRS GAAP of error Intangibles Benefits Options •'000 •'000 •'000 •'000 •'000 •'000 •'000 •'000 •'000 Revenue 44,965 - - - - - - - 44,965Cost of sales (2,605) (1,155) - - - - - - (3,760) ----- ------ ------ ------ ------ ------ ----- ----- -----Gross profit 42,360 (1,155) - - - - - - 41,205 OperatingexpensesAdministrativeexpenses (37,437) 1,663 2,111 (200) (66) - (79) - (34,008) Exceptionalitems (109) - - - - - - - (109) ----- ------ ------ ------ ------ ------ ----- ----- ----- (36,391) 508 2,111 (200) (66) - (79) - (34,117) Operatingprofit/(loss) 4,814 508 2,111 (200) (66) - (79) - 7,088 Financecosts-net (2,224) - - - - - - - (2,224) Share ofprofit ofassociates - - - - 66 - - - 66 ----- ------ ------ ------ ------ ------ ----- ----- ----- Profit beforeincome tax 2,590 508 2,111 (200) - - (79) - 4,930 Income taxexpense (606) - - - - - - - (606) ----- ------ ------ ------ ------ ------ ----- ----- -----Profit/(loss)for the period 1,984 508 2,111 (200) - - (79) - 4,324 Minorityinterest (285) - - - - - - - (285) ----- ------ ------ ------ ------ ------ ----- ----- -----Profit/(loss)for thefinancial year 1,699 508 2,111 (200) - (79) - 4,039 Dividends (494) - - - - (526) - - (1,020) ----- ------ ------ ------ ------ ------ ----- ----- -----Retainedprofit/(loss)for year 1,205 508 2,111 (200) - (526) (79) - 3,019 ===== ====== ====== ====== ====== ====== ===== ===== =====Profit/(loss)for periodattributableto:Equity holdersof the company 1,699 4,039 Minorityinterest 285 285 ----- ----- 1,984 4,324 ===== ===== 11. Balance Sheet as at 30 June 2004Reconciliation from Irish GAAP to IFRS Irish Goodwill Employee Dividends Correction Deferred Share ReClass Foreign IFRS GAAP /Intangibles Benefits of Error Tax Options -ifications Exchange & Other •'000 •'000 •'000 •'000 •'000 •'000 •'000 •'000 •'000ASSETSNon-currentassets Propertyplant & equipment 6,244 - - - - - - (269) - 5,975 IntangibleAssets 61,772 2,111 - - - - - 269 (3,432) 60,720 Investmentsin associates 408 - - - - - - - - 408 Deferredincome taxassets 965 - - - - 31 - - - 996 Investments 727 - - - - - - - - 727 ----- ------ ------ ------ ------ ------ ----- ------ ------ ----- 70,116 2,111 - - - 31 - - (3,432) 68,826 ----- ------ ------ ------ ------ ------ ----- ------ ------ ----- CurrentAssets Invent-ories 1,714 - - - - - - - - 1,714 Trade andotherrecei-vables 41,945 - - - 759 - - 1,395 - 44,099 Currentincome tax asset 1,320 - - - - - - - - 1,320 Cash and cash equival-ents 21,023 - - - - - - - - 21,023 ----- ------ ------ ------ ------ ------ ----- ------ ------ ----- 66,002 - - - 759 - - 1,395 - 68,156 ----- ------ ------ ------ ------ ------ ----- ------ ------ -----Total assets 136,118 2,111 - - 759 31 - 1,395 (3,432)136,982 ===== ====== ====== ====== ====== ====== ===== ====== ====== ===== LIABILITIES Non-currentliabilitiesBorrow-ings 46,602 - - - - - - - - 46,602 Deferredincome taxliabilities 32 - - - - (32) - - - - Retirementbenefitobligations - - 881 - - - - - - 881Provisionsforotherliabilities and charges 5,972 - - - - - - - - 5,972 ----- ------ ------ ------ ------ ------ ----- ------ ------ ----- 52,606 - 881 - - (32) - - - 53,455 ----- ------ ------ ------ ------ ------ ----- ------ ------ ----- Currentliabilities Trade andother payables 34,237 - 200 (494) - - - 1,623 - 33,943 Currentincometax lia-bilities 2,370 - - - - - - - - 3,993 Borrow-ings 8,308 - - - - - - - - 8,308 Provisionsforotherliabilities and charges 4,576 - - - - - - - - 4,576 Other current liabilities - - - - - - - - - - ----- ------ ------ ------ ------ ------ ----- ------ ------ ----- 49,491 - 200 (494) - - - 1,623 - 50,820 ----- ------ ------ ------ ------ ------ ----- ------ ------ ----- Totallia-bilities 102,097 - 1,081 (494) - (32) - 1,623 - 104,275 ===== ====== ====== ====== ====== ====== ===== ====== ====== ===== ----- ------ ------ ------ ------ ------ ----- ------ ------ ----- Net Assets 34,021 2,111 (1,081) 494 759 63 - (228) (3,432) 32,707 ===== ====== ====== ====== ====== ====== ===== ====== ====== =====Equity &Reserves Share Capital 7,800 - - - - - - - - 7,800 Share Premium 44,831 - - - - - - - - 44,831 Other 687 - - - - - 79 (273) - 493reserves Retainedearnings(20,949) 2,111 (1,081) 494 759 63 -79 45 (3,432)(22,069) ----- ------ ------ ------ ------ ------ ----- ------ ------ ----- 32,369 2,111 (1,081) 494 759 63 - (228) (3,432) 31,055Minorityinterest 1,652 - - - - - - - - 1,652 ----- ------ ------ ------ ------ ------ ----- ------ ------ ----- Total equity 34,021 2,111 (1,081) 494 759 63 - (228) (3,432) 32,707 ===== ====== ====== ====== ====== ====== ===== ====== ====== ===== Independent review report to IFG Group plc Introduction We have been instructed by the company to review the financial information forthe six months ended 30 June 2005 which comprises the consolidated interimbalance sheet as at 30 June 2005 and the related consolidated interim statementsof income, cash flows and changes in shareholders' equity for the six monthsthen ended. We have read the other information contained in the interim reportand considered whether it contains any apparent misstatements or materialinconsistencies with the financial information. Directors' responsibilities The interim report, including the financial information contained therein, isthe responsibility of, and has been approved by the directors. The directors areresponsible for preparing the interim report in accordance with the ListingRules of the Irish Stock Exchange. As disclosed in note 1, the next annualfinancial statements of the group will be prepared in accordance with accountingstandards adopted for use in the European Union. This interim report has beenprepared in accordance with the basis of preparation and the provisional IFRSaccounting policies set out in the supplemental information section. The provisional IFRS accounting policies are consistent with those that thedirectors intend to use in the next annual financial statements. As explained innote 1, there is, however, a possibility that the directors may determine thatsome changes are necessary when preparing the full annual financial statementsfor the first time in accordance with accounting standards adopted for use inthe European Union. The IFRS standards and IFRIC interpretations that will beapplicable and adopted for use in the European Union at 31 December 2005 are notknown with certainty at the time of preparing this interim financialinformation. Review work performed We conducted our review in accordance with guidance contained in Bulletin 1999/4issued by the Auditing Practices Board for use in Ireland. A review consistsprincipally of making enquiries of management and applying analytical proceduresto the financial information and underlying financial data and, based thereon,assessing whether the disclosed provisional IFRS accounting policies have beenapplied. A review excludes audit procedures such as tests of controls andverification of assets, liabilities and transactions. It is substantially lessin scope than an audit and therefore provides a lower level of assurance.Accordingly we do not express an audit opinion on the financial information.This report, including the conclusion, has been prepared for and only for thecompany for the purpose of the Listing Rules and for no other purpose. We donot, in producing this report, accept or assume responsibility for any otherpurpose or to any other person to whom this report is shown or into whose handsit may come save where expressly agreed by our prior consent in writing. Review conclusion On the basis of our review we are not aware of any material modifications thatshould be made to the financial information as presented for the six monthsended 30 June 2005. PricewaterhouseCoopersChartered AccountantsDublin27 September 2005 NoteThe maintenance and integrity of the IFG Group plc web site is theresponsibility of the directors; the work carried out by the auditors does notinvolve consideration of these matters and, accordingly, the auditors accept noresponsibility for any changes that may have occurred to the interim reportsince it was initially presented on the web site. Legislation in Ireland governing the preparation and dissemination of financialinformation may differ from legislation in other jurisdictions. This information is provided by RNS The company news service from the London Stock ExchangeRelated Shares:
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