Statement re IFRS transition

European Motor Hldgs PLC 18 October 2005 EUROPEAN MOTOR HOLDINGS plc ("EMH") ADOPTION OF INTERNATIONAL FINANCIAL REPORTING STANDARDS European Motor Holdings plc has today published its unaudited full year restated results for the year ended 28 February 2005 under International Financial Reporting Standards ("IFRS"). The full report, which is now available on EMH's website at www.emhplc.com/IFRS.pdf, covers the following areas: • Basis of preparation • First time adoption of IFRS • Financial impact of transition • Principal accounting policies Reconciliations of UK GAAP to IFRS in respect of profits for the six months ended 31 August 2004 and the year ended 28 February 2005, and the financial position as at 1 March 2004 (the transition date), 31 August 2004 and 28 February 2005 following the adoption of IFRS are also provided. EMH has previously reported its results under UK Generally Accepted Accounting Principles ("UK GAAP"). All EU listed companies are required to report their consolidated financial statements under IFRS for accounting periods beginning on or after 1 January 2005. The group's first annual report under IFRS will be for the year ending 28 February 2006 with the first IFRS interim results being for the six months ended 31 August 2005. The report available on the website explains the main changes that are required to the group's financial statements on adoption of IFRS. The results for the year ended 28 February 2005 under both UK GAAP and IFRS are shown below for comparison. Results for the year ended 28 February 2005 UK GAAP IFRS £m £m ------------------------------ --------- -------- Operating profit before exceptional items 14.7 15.8 Exceptional items 8.3 8.5 ------------------------------ --------- -------- Profit before interest 23.0 24.3 Net interest 0.8 (0.1) Exceptional interest 6.3 6.3 ------------------------------ --------- -------- Profit before tax 30.1 30.5 Tax (9.7) (9.3) ------------------------------ --------- -------- Profit after tax 20.4 21.2 ------------------------------ --------- -------- As can be seen from the above table, the impact of the transition is broadly neutral on profit before tax. The tax charge is lower under IFRS because the UK GAAP charge included an exceptional element that would have been provided in prior years under IFRS in respect of rolled over gains. The impact on net assets is similarly broadly neutral (an increase from £80.0 million to £80.1 million) with an increase as the final dividend is no longer provided for under IFRS, offset by reductions principally as a result of the inclusion of the net pension deficit and deferred tax liability on rolled over gains, which were previously unprovided under UK GAAP. There is no impact on the business fundamentals, including underlying cash flows, as a result of the transition from UK GAAP to IFRS. EMH will be announcing its interim results for the six months ended 31 August 2005 on 26 October 2005. For further information, please contact Richard Palmer (Chief Executive) Ann Wilson (Finance Director) Tel 01491 413399 This information is provided by RNS The company news service from the London Stock Exchange