3i Group plc Interim report 2005

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Basis of preparation

The interim financial statements of 3i Group plc are for the six months to 30 September 2005. These interim consolidated financial statements have been prepared in accordance with those IFRS standards and IFRIC interpretations issued and effective or issued and early adopted as at the time of preparing these statements (November 2005) and in respect of the revisions to IAS 39 published by the International Accounting Standards Board ("IASB") in June 2005 and IAS 19 issued but awaiting EU ratification. The standards to be applied, which will be adopted for the first time for the purpose of preparing consolidated financial statements for the year to 31 March 2006, will be those issued by the IASB and endorsed by the EU as at 31 March 2006. The IFRS standards 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 consolidated financial statements.

3i Group plc's consolidated financial statements were prepared in accordance with the United Kingdom's Generally Accepted Accounting Principles (UK GAAP) until the year to 31 March 2005. In preparing 3i Group plc's interim consolidated financial statements, the Board of Directors has amended certain accounting and valuation methods applied in the UK GAAP financial statements to comply with IFRS. The comparative figures in respect of 2004 were restated to reflect these adjustments. These figures have not been subject to audit.

The Group's IFRS accounting policies set out in the Transition to IFRS have been consistently applied to all periods presented. The effects of the transition from UK GAAP to IFRS on the Group's profit after taxation, net assets and cash flows are provided in the Transition to IFRS.

These interim consolidated financial statements have been prepared on the historical cost basis, except for investment property, land and buildings, derivative financial instruments and financial assets at fair value through profit or loss that have been included at fair value. The basis of consolidation is included in the Transition to IFRS.

This interim report does not constitute statutory accounts. The statutory accounts for the year to 31 March 2005, prepared under UK GAAP, have been filed with the Registrar of Companies on which the auditors issued a report, which was unqualified and did not contain a statement under section 237(2) or section 237(3) of the Companies Act 1985.

Transitional arrangements

Rules regarding transitional arrangements are set out in IFRS 1, First-time adoption of IFRS, which generally requires full retrospective adoption of all accounting standards at the reporting date. Details of the primary IFRS exemptions that the Group has taken advantage of are included in the Transition to IFRS.

Forward-looking statements

3i's actual future results may differ materially from the plans, goals and expectations set forth in any of its forward-looking statements. Any forward-looking statements speak only as of the date they are made. 3i does not undertake to update forward-looking statements to reflect any changes in its expectations with regard thereto or any changes in events, conditions or circumstances on which any such statement is based.

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