Colefax Group PLC (CFX) Announcements

Colefax Group PLC
24 January 2008


                               COLEFAX GROUP PLC

                           ("Colefax" or "the Group")

    Statement on the Impact of Adoption of International Financial Reporting
                                   Standards

Colefax Group Plc currently prepares its financial statements in accordance with
UK Generally Accepted Accounting Principles (UK GAAP).

From 1st May 2007 Colefax Group Plc will be required to report its results in
accordance with International Accounting Standards and International Financial
Reporting Standards (collectively 'IFRS') as adopted by the European Union (EU).

The Group's first accounting period under IFRS will be for the financial year
ended 30th April 2008, and its first interim results will be for the six months
ended 31st October 2007. The transition date to IFRS for the Group is 1st May
2006 (the Transition Date), being the start of the period of comparative
information.

This statement presents and explains how the Group's financial performance and
position under IFRS differs from that reported under UK GAAP. Restated
information is presented for:

    The consolidated balance sheet as at 1st May 2006 (the transition date)
    The consolidated income statement for the six month period ending 31st
     October 2006
    The consolidated balance sheet as at 31st October 2006
    The consolidated income statement for the year ended 30th April 2007
    The consolidated balance sheet as at 30th April 2007

The adoption of IFRS is a change to the accounting standards used by the Group
and does not affect the Group's strategy, underlying business performance or its
cash flows.

A full restatement of these policies and reconciliation of the resultant changes
will be disclosed in the financial statements for the year ended 30th April
2008.

The financial information presented in this document is unaudited.

The effect of the adoption of IFRS on the financial assets of the Group is
minimal as can be seen from the table below:

                         Six months to 31 October    Year to 30 April 2007
                                   2006
                              UK GAAP         IFRS        UK GAAP        IFRS
                                '000        '000          '000       '000
-----------------------------------------------------------------------------
Profit from operations          2,493        2,453          5,946       5,842
Profit before taxation          2,536        2,477          5,926       5,806
Profit for the year             1,661        1,626          3,971       3,899

Net assets                     15,504       15,107         15,691      15,269

BASIS OF PREPARATION

The key differences between UK GAAP and IFRS affecting the Group's accounting
policies are set out below.

It is important to note that the IFRS position as stated is the Group's
interpretation based on the financial reporting standards currently in issue and
changes may arise as new accounting pronouncements are developed and issued.
Emerging industry consensus on the practical application of IFRS and further
technical opinions may also result in amendments to the current views contained
in this statement. As a result of this, the Group's first IFRS financial
statements may be prepared on a different basis to that presented herein.

DIFFERENCES BETWEEN UK GAAP AND IFRS

The following represent the differences relevant to the Group of moving from UK
GAAP to IFRS. Their financial effect on the results is set out in the Appendix.

(a) Employee Benefits - Short-term benefits (IAS 19)

IAS 19 'Employee Benefits' requires holiday pay to be accrued recognising the
employee benefits to be paid in exchange for that service during the accounting
period. This results in the recognition of a provision of 105,000 and deferred
taxation of 31,000 on transition to IFRS and a reduction in pre-tax profit of
10,000 for the year ended 30th April 2007.

Net assets at 1st May 2006 are reduced by 74,000, at 31st of October 2006 are
reduced by 73,000 and at 30th April 2007 are reduced by 76,000.

(b) Employee Benefits - Post-employment benefits (IAS 19)

IAS 19 'Employee Benefits' requires retirement benefits to be accrued
recognising the employee benefits to be paid on retirement. This results in the
recognition of a provision of 149,000 and deferred taxation of 52,000 on
transition to IFRS and an increase in pre-tax profit of 2,000 in the year ended
30th April 2007.

Net assets at 1st May 2006 are reduced by 97,000, at 31st October 2006 are
reduced by 94,000 and at 30th April 2007 are reduced by 94,000.

(c) Leases (IAS 17)

IAS 17 'Leases' requires operating lease payments to be recognised as an expense
on a straight-line basis over the full length of the lease. This results in the
recognition of a provision of 346,000 and deferred taxation of 141,000 on
transition to IFRS and a reduction of 59,000 in pre-tax profit in the six
months ending 31st October 2006 and reduction of 112,000 for the year ended
30th April 2007.

Net assets at 1st May 2006 are reduced by 205,000, at 31st October 2006 are
reduced by 230,000 and at 30th April 2007 are reduced by 252,000.

(d) Deferred Tax Asset (IAS 12)

Unlike FRS 17 'Retirement Benefits', IAS 19 'Employee Benefits' requires the
pension deficit to be shown gross under long term liabilities rather than net of
deferred tax. We will continue to recognise a deferred tax asset of 93,000 at
1st May 2006 and 31st October 2006 and 83,000 at 30th April 2007 but it will
now be reported within current deferred tax assets.

(e) Foreign Exchange Reserve (IAS 21)

IAS 21 'The Effects of Changes in Foreign Exchange Rates' requires the exchange
differences arising on consolidation on the translation of overseas subsidiaries
to be recognised as a separate equity reserve. This results in an increase in
the foreign exchange reserve of 392,000 at 1st May 2006, a reduction in the
foreign exchange reserve of 370,000 at 31st October 2006 and a reduction in the
foreign exchange reserve of 539,000 at 30th April 2007.

(f) Reclass of profit/loss on disposal of property, plant and equipment (FRS 3)

FRS 3 'Reporting Financial Performance' requires that profit or loss on disposal
of property, plant and equipment be reported as part of the profit from
operations. This results in an increase in profit from operations of 19,000 at
31st October 2006 and 16,000 at 30th April 2007.

APPENDIX I

Reconciliation of Group Balance Sheet at 1st May 2006

                                Short-term Long-term    Lease Deferred  Foreign
                                  employee  employee payments    tax a exchange
                                  benefits  benefits              sset  reserve
                        UK GAAP     IAS 19    IAS 19   IAS 17   IAS 12   IAS 21     IFRS
Note                                   (a)       (b)      (c)      (d)      (e)
                          '000      '000     '000    '000   '000     '000    '000
Non-current assets
Property, plant and       
equipment                 5,403          -         -        -        -        -    5,403
Current assets:
Inventories and         
contracts in progress    10,942          -         -        -        -        -   10,942
Trade and other          
receivables              11,498         31        52      141       93        -   11,815
Cash and cash            
equivalents               2,347          -         -        -        -        -    2,347        
                      ------------------------------------------------------------------
                         24,787         31        52      141       93        -   25,104

Trade and other          
payables: amounts
falling due within one
year                     14,493        105       149      346        -        -   15,093
                      ------------------------------------------------------------------
Net current assets       10,294       (74)      (97)    (205)       93        -   10,011
                      ------------------------------------------------------------------
Total assets less       
current liabilities      15,697       (74)      (97)    (205)       93        -   15,414
Non-current
liabilities:
Deferred taxation            57          -         -        -        -        -       57
Pension liability           134          -         -        -       93        -      227
                      ------------------------------------------------------------------
                            191          -         -        -       93        -      284
                      ==================================================================
Net assets               15,506       (74)      (97)    (205)        -        -   15,130
                      ==================================================================

Capital and reserves:
Called up share           
capital                   1,709          -         -        -        -        -    1,709
Share premium account    11,087          -         -        -        -        -   11,087
Capital redemption        
reserve                   1,157          -         -        -        -        -    1,157
ESOP share reserve        (287)          -         -        -        -        -    (287)
ESOP capital reserve        228          -         -        -        -        -      228
Foreign exchange             
reserve                       -          -         -        -        -      392      392
Profit and loss          
account                   1,612       (74)      (97)    (205)        -    (392)      844
                      ------------------------------------------------------------------
Total equity             15,506       (74)      (97)    (205)        -        -   15,130
                      ==================================================================

Total equity reported      Note                                                   
under UK GAAP                                                                     15,506
Holiday pay accrual         (a)                                                     (74)
Retirement benefits         (b)                                                   
accrual                                                                             (97)
Straight-line lease         (c)                                                    
adjustment                                                                         (205)
                                                                                --------
Total adjustment to                                                               
equity                                                                             (376)
                                                                                --------
Total equity reported                                                             
under IFRS                                                                        15,130
                                                                                ========

APPENDIX II

Reconciliation of Group Income Statement for the six months ended 31st October
2006

                                            Lease     Reclass
                                         payments   profit on
                                                  disposal of
                                                    property,
                                                      plant &
                                                    equipment
                             UK GAAP       IAS 17       FRS 3        IFRS
Note                                          (c)         (f)
                               '000        '000      '000s       '000

Revenue                       33,764            -           -      33,764
Cost of sales                 14,870            -           -      14,870
                          -----------------------------------------------
Gross profit                  18,894            -           -      18,894
Operating expenses            16,401           59        (19)      16,441
                          -----------------------------------------------
Profit from operations         2,493         (59)          19       2,453
Profit/loss on disposal           
of property, plant and
equipment                         19            -        (19)           -
                          -----------------------------------------------
Profit on ordinary            
activities before
interest and taxation          2,512         (59)           -       2,453
Finance income                    24            -           -          24
                          -----------------------------------------------
Profit on ordinary            
activities before
taxation                       2,536         (59)           -       2,477
Tax on profit on ordinary       
activities                       875         (24)           -         851
                          -----------------------------------------------
Profit for the period          1,661         (35)           -       1,626
                          ===============================================

Profit reported under UK  Note                                     
GAAP                                                                1,661
Straight-line lease       (c)                                       
adjustment                                                           (35)
                                                                 --------
Profit reported under                                           
IFRS                                                                1,626
                                                                 ========

Basic earnings per share      10.31p                               10.09p
Diluted earnings per           
share                          9.95p                                9.74p


APPENDIX III

Reconciliation of Group Balance Sheet at 31st October 2006

                         Short-term Long-term    Lease Deferred  Foreign
                           employee  employee payments      tax exchange
                           benefits  benefits             asset  reserve
                 UK GAAP     IAS 19    IAS 19   IAS 17   IAS 12   IAS 21   IFRS
Note                            (a)       (b)      (c)      (d)      (e)
                   '000      '000     '000    '000   '000    '000s  '000
Non-current
assets:
Property, plant   
and equipment      5,402          -         -        -        -        -  5,402
Current assets:
Inventories and  
contracts in
progress          11,878          -         -        -        -        - 11,878
Trade and other  
receivables       10,288         31        50      158       93        - 10,620
Cash and cash     
equivalents        4,366                    -        -        -        -  4,366
                ---------------------------------------------------------------
                  26,532         31        50      158       93        - 26,864

Trade and other   
payables:
amounts falling
due within one
year              16,263        104       144      388        -        - 16,899
                ---------------------------------------------------------------
Net current      
assets            10,269       (73)      (94)    (230)       93        -  9,965
                ---------------------------------------------------------------
Total assets     
less current
liabilities       15,671       (73)      (94)    (230)       93        - 15,367
Provision for
liabilities:
Deferred             
taxation              33          -         -        -        -        -     33
Pension              
liability            134          -         -        -       93        -    227
                ---------------------------------------------------------------
                     167          -         -        -       93        -    260
                ---------------------------------------------------------------
Net assets        15,504       (73)      (94)    (230)        -        - 15,107
                ===============================================================
Capital and
reserves:
Called up share  
capital            1,664          -         -        -        -        -  1,664
Share premium   
account           11,087          -         -        -        -        - 11,087
Capital           
redemption
reserve            1,202          -         -        -        -        -  1,202
ESOP share       
reserve            (287)          -         -        -        -        -  (287)
ESOP capital        
reserve              228          -         -        -        -        -    228
Foreign exchange      
reserve                -          1         3       10        -    (384)  (370)
Profit and loss    
account            1,610       (74)      (97)    (240)        -      384  1,583
                ---------------------------------------------------------------
Total equity      15,504       (73)      (94)    (230)        -          15,107
                ===============================================================

Total equity reported    Note                                          
under IFRS                                                               15,504
Holiday pay              (a)                                             
accrual                                                                    (73)
Retirement benefits      (b)                                               
accrual                                                                    (94)
Straight-line lease      (c)                                              
adjustment                                                                (230)
                                                                        -------
Total adjustment to                                                      
equity                                                                    (397)
                                                                        -------
Total equity reported                                                    
under IFRS                                                               15,107
                                                                        =======


APPENDIX IV

Reconciliation of Group Income Statement for the year ended 30th April 2007

                            Short-term Long-term     Lease   Reclass
                              employee  employee  payments profit in
                              benefits  benefits            disposal
                                                                  of
                                                           property,
                                                             plant &
                                                           equipment
                    UK GAAP     IAS 19    IAS 19    IAS 17     FRS 3    IFRS
Note                               (a)       (b)       (c)       (f)
                      '000      '000     '000     '000    '000s   '000

Revenue              71,013          -         -         -         -  71,013
Cost of sales        31,602          -         -         -         -  31,602
                  ----------------------------------------------------------
Gross profit         39,411          -         -         -         -  39,411
Operating expenses   33,465         10       (2)       112      (16)  33,569
                  ----------------------------------------------------------
Profit from          
operations            5,946       (10)         2     (112)        16   5,842
Profit/loss on      
disposal of
property, plant
and equipment            16          -         -         -      (16)       -
                  ----------------------------------------------------------
Profit on ordinary    
activities before
interest and
taxation              5,962       (10)         2     (112)         -   5,842
Finance charge         (36)          -         -         -         -    (36)
                  ----------------------------------------------------------
Profit on ordinary    
activities before
taxation              5,926       (10)         2     (112)         -   5,806
Tax on profit on  
ordinary
activities            1,955        (4)         1      (45)         -   1,907
                  ----------------------------------------------------------
Profit for the      
period                3,971        (6)         1      (67)         -   3,899
                  ==========================================================

Profit reported under UK    Note                                      
GAAP                                                                   3,971
Holiday pay                 (a)                                          
accrual                                                                  (6)
Retirement                  (b)                                            
benefits accrual                                                           1
Straight-line lease         (c)                                         
adjustment                                                              (67)
                                                                     -------
Total adjustments                                                       
to profit                                                               (72)
                                                                     -------
Profit reported                                                      
under IFRS                                                             3,899
                                                                     =======

Basic earnings per   
share                 25.3p                                            24.8p
Diluted earnings    
per share             24.3p                                            23.9p


APPENDIX V

Reconciliation of Group Balance Sheet at 30th April 2007

                                Short-term Long-term    Lease Deferred  Foreign
                                  employee  employee payments      tax exchange
                                  benefits  benefits             asset  reserve
                        UK GAAP     IAS 19    IAS 19   IAS 17   IAS 12   IAS 21     IFRS
Note                                   (a)       (b)      (c)      (d)      (e)
                          '000      '000     '000    '000   '000    '000s    '000
Non-current assets:
Property, plant and       
equipment                 5,135          -         -        -        -        -    5,135
Current assets:
Inventories and         
contracts in progress    12,045          -         -        -        -        -   12,045
Trade and other         
receivables              11,384         33        50      172       83        -   11,722
Cash and cash             
equivalents               4,113          -         -        -        -        -    4,113
                      ------------------------------------------------------------------
                         27,542         33        50      172       83        -   27,880

Trade and other          
payables: amounts
falling due within one
year                     16,831        109       144      424        -        -   17,508
                      ------------------------------------------------------------------
Net current assets       10,711       (76)      (94)    (252)       83        -   10,372
                      ------------------------------------------------------------------
Total assets less      
current liabilities      15,846       (76)      (94)    (252)       83        -   15,507
Provision for
liabilities:
Deferred taxation            35          -         -        -        -        -       35
Pension liability           120          -         -        -       83        -      203
                      ------------------------------------------------------------------
                            155          -         -        -       83        -      238
                      ------------------------------------------------------------------
Net assets               15,691       (76)      (94)    (252)        -        -   15,269
                      ==================================================================

Capital and reserves:
Called up share          
capital                   1,565          -         -        -        -        -    1,565
Share premium account    11,141          -         -        -        -        -   11,141
Capital redemption        
reserve                   1,308          -         -        -        -        -    1,308
ESOP share reserve        (157)          -         -        -        -        -    (157)
ESOP capital reserve        508          -         -        -        -        -      508
Foreign exchange              
reserve                       -          4         2       20        -    (565)    (539)
Profit and loss         
account                   1,326       (80)      (96)    (272)        -      565    1,443
                      ------------------------------------------------------------------
Total equity             15,691       (76)      (94)    (252)        -        -   15,269
                      ==================================================================

Total equity reported      Note                                                   
under UK GAAP                                                                     15,691
Holiday pay accrual         (a)                                                     (76)
Retirement benefits         (b)                                                     
accrual                                                                             (94)
Straight-line lease         (c)                                                   
adjustment                                                                         (252)
                                                                                --------
Total adjustment to                                                                
equity                                                                             (422)
                                                                                --------
Profit reported under                                                            
IFRS                                                                              15,269
                                                                                ========

Enquiries:

Colefax Group Plc     Rob Barker, Finance Director and Company Secretary 020 7318 6000

KBC Peel Hunt         David Anderson and Alina Savych 020 7418 8900

Biddicks              Katie Tzouliadis 020 7448 1000






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