**FORM
      20-F**


**(MARK
      ONE)**


**o** **REGISTRATION STATEMENT PURSUANT TO SECTION 12(B) OR (G) OF THE SECURITIES
      EXCHANGE ACT OF 1934**


**OR**


**x** **ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE ACT
      OF
      1934**


**ý** **For
      the fiscal year ended:**  **December
      31, 2006**


**OR**


******TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIE EXCHANGE
      ACT
      OF 1934**


**For
      the transition period from _______ to** **__**


**OR**


**SHELL
      COMPANY REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE ACT
      OF
      1934**




**Date
      of event requiring this shell company report
      ................**




**Commission
      file number:**  **0-22320**




**Trinity
      Biotech plc**





**(Exact
      name of Registrant as specified in its charter)**




**Ireland**





**(Jurisdiction
      of incorporation or organisation)**




**IDA
      Business Park, Bray, Co. Wicklow, Ireland**





**(Address
      of principal executive offices)**




**Securities
      registered or to be registered pursuant to Section 12 (b) of the
      Act:**


**None**





**(Title
      of Class)**




**Name
      of each exchange on which registered:**


**None**





**(Title
      of Class)**




**Securities
      registered or to be registered pursuant to Section 12 (g) of the
      Act:**


**American
      Depository Shares**


**(each
      representing 4 ‘A’ Ordinary Shares, par value US$0.0109)**





**(Title
      of each class)**




**Securities
      for which there is a reporting obligation pursuant to Section 15 (d) of the
      Act:**


**None**





**(Title
      of each class)**




**Indicate
      the number of outstanding shares of each of the issuer's classes of capital
      or
      common stock as of the close of the period covered by the annual report:
      73,601,497 Class 'A' Ordinary Shares and 700,000 Class 'B' Ordinary
      Shares.**




**Indicate
      by check mark if the registrant is a well-known seasoned issuer, as defined
      in
      Rule 405 of the Securities Act.**


**Yes** **__** **No** **X**




**If
      this report is an annual or transition report, indicate by check mark if the
      registrant is not required to file reports pursuant to Section 13 or 15(d)
      of
      the Securities Exchange Act of 1934.**


**Yes** **__** **No** **X**




**Indicate
      by check mark whether the registrant (1) has filed all reports required to
      be
      filed by Section 13 or 15 (d) of the Securities Exchange Act of 1934 during
      the
      preceding 12 months (or for such shorter period that the registrant was required
      to file such reports), and (2) has been subject to such filing requirements
      for
      the past 90 days.**


**Yes
      X** **No __**




**Indicate
      by check mark whether the registrant is a large accelerated filer, an
      accelerated filer or a non-accelerated filer. See definition of “accelerated
      filer and large accelerated file” in Rule 12b-2 of the Exchange
      Act:**


**Large
      accelerated filer** **o** **Accelerated filer** **x** **Non -accelerated filer** **o**




**Indicate
      by check mark which financial statement item the registrant has elected to
      follow:**


**Item
      17 __**  **Item
      18 X**




**If
      this is an annual report, indicate by check mark whether the registrant is
      a
      shell company (as defined in Rule 12b-2 of the Exchange
      Act).**


**Yes** **__** **No** **X**


**This
      Report on Form 20-F is incorporated by reference into our Registration Statement
      on Form F-3 File No. 333-112568, 333-116537, 333-103033, 333-107363, 333-114099
      and 333-124385 and our Registration Statements on Form S-8 File No. 33-76384,
      333-220, 333-5532, 333-7762 and 333-124384.**











**TABLE
                OF CONTENTS****Page****PART
                I**Item
                1
            Identity
                of Directors, Senior Management and Advisors
            1Item
                2
            Offer
                statistics and Expected timetable
            1Item
                3
            Selected
                Consolidated Financial Data
            1Item
                4
            Information
                on the Company
            7Item
                5
            Operating
                and Financial Review and Prospects
            14Item
                6
            Directors
                and Senior Management
            33Item
                7
            Major
                Shareholders and Related Party Transactions
            36Item
                8
            Financial
                Information
            38Item
                9
            The
                Offer and Listing
            38Item
                10
            Memorandum
                and Articles of Association
            40Item
                11
            Qualitative
                and Quantitative Disclosures about Market Risk
            50Item
                12
            Description
                of Securities other than Equity Securities
            52**PART
                II**Item
                13
            Defaults,
                Dividend Arrangements and Delinquencies
            52Item
                14
            Material
                Modification to the Rights of Security Holders and Use of
                Proceeds
            52Item
                15
            Control
                and Procedures
            52Item
                16A
            Audit
                Committee Financial Expert
            53Item
                16B
            Code
                of Ethics
            53Item
                16C
            Principal
                Accounting Fees and Services
            54**PART
                III**Item
                17
            Consolidated
                Financial Statements
            54Item
                18
            Consolidated
                Financial Statements
            54Item
                19
            Exhibits
            126





As
      used
      herein, references to “we”, “us”, “Trinity Biotech” or the “Group” in this form
      20-F shall mean Trinity Biotech plc and its world-wide subsidiaries,
      collectively. References to the “Company” in this annual report shall mean
      Trinity Biotech plc.





We
      have a
      secondary listing on the Irish Stock Exchange. For this reason, we are not
      subject to the same ongoing regulatory requirements as those which would apply
      to an Irish company with a primary listing on the Irish Stock Exchange,
      including the requirement that certain transactions require the approval of
      shareholders. For further information, shareholders should consult their own
      financial advisor.





Our
      financial statements are presented in US Dollars and are prepared in accordance
      with International Financial Reporting Standards (“IFRS”), as adopted by the
      European Union (“EU”), which differ in certain respects from US generally
      accepted accounting principles (See Item 18, note 33 to the consolidated
      financial statements). IFRS as adopted by the EU differ in certain respects
      from
      IFRS issued by the International Accounting Standards Board (“IASB”). However,
      as none of these differences are relevant in the context of Trinity Biotech,
      the
      consolidated financial statements for the periods presented would be no
      different had IFRS as issued by the IASB been applied. All references in this
      annual report to “Dollars” and “$” are to US Dollars, and all references to
“euro” or “€” are to European Union euro. Except as otherwise stated herein, all
      monetary amounts in this annual report have been presented in US Dollars. For
      presentation purposes all financial information including comparative figures
      from prior periods have been stated in round thousands.





The
      provisions of IAS 32 and IAS 39 have been applied from January 1, 2005. An
      explanation of how the transition to compliance with IAS 32 and IAS 39, as
      adopted by the EU, from the previous basis of accounting, Irish GAAP (“Previous
      GAAP’’) has affected the reported financial position of the Group as at January
      1, 2005 is provided in Item 18, note 31 to the consolidated financial
      statements.








**Item
      1** ******   ***Identity
      of Directors, Senior Management and Advisers***





Not
      applicable.





**Item
      2** ******   ***Offer
      Statistics and Expected Timetable***




Not
      applicable.





**Item
      3** ******   ***Selected Consolidated Financial Data***





The
      following selected consolidated financial data of Trinity Biotech as at December
      31, 2006 and 2005, and for each of the years ended December 31, 2006, 2005
      and
      2004 have been derived from, and should be read in conjunction with, the audited
      consolidated financial statements and notes thereto set forth in Item 18 of
      this
      annual report. The selected consolidated financial data as at December 31,
      2004,
      December 31, 2003 and December 31, 2002 are derived from the audited
      consolidated financial statements not appearing in this Annual Report. This
      data
      should be read in conjunction with the financial statements, related notes
      and
      other financial information included elsewhere herein.








1











*Year
                ended December 31*
            *Year
                ended December 31*
            *Year
                ended December 31****Consolidated
                Statement of Income Data***
            *2006*
            *2005*
            *2004**(US$’000
                except for share and per share data)*Revenues
            118,674
            98,560
            80,008Cost
                of sales - including share based payments of US$89,000 (2005: US$110,000)
                (2004: US$81,000)
            (62,090)
            (51,378)
            (40,047)Cost
                of sales - inventory provision
            (5,800)
            -
            -Gross
                profit
            50,784
            47,182
            39,961Other
                operating income
            275
            161
            302Research
                and development expenses - including share based payments of US$36,000
                (2005: US$210,000) (2004: US$96,000)
            (6,696)
            (6,070)
            (4,744)Selling,
                general and administrative - including share based payments of
                US$1,016,000 (2005: US$1,048,000) (2004: US$581,000)
            (42,422)
            (34,651)
            (29,332)Operating
                profit
            1,941
            6,622
            6,187Financial
                income
            1,164
            389
            302Financial
                expenses
            (2,653)
            (1,058)
            (824)Profit
                before tax
            452
            5,953
            5,665Income
                tax credit / (expense)
            2,824
            (673)
            49Profit
                for the year
            3,276
            5,280
            5,714Basic
                earnings per ‘A’ ordinary share (US Dollars)
            0.05
            0.09
            0.10Basic
                earnings per ‘B’ ordinary share (US Dollars)
            0.10
            0.18
            0.20Diluted
                earnings per ‘A’ ordinary share (US Dollars)
            0.05
            0.09
            0.09Diluted
                earnings per ‘B’ ordinary share (US Dollars)
            0.10
            0.18
            0.18Basic
                earnings per ADS (US Dollars)
            0.19
            0.36
            0.41Diluted
                earnings per ADS (US Dollars)
            0.19
            0.35
            0.37Weighted
                average number of shares
              used
                in computing basic EPS
            70,693,753
            58,890,084
            55,132,024Weighted
                average number of shares
              used
                in computing diluted EPS
            72,125,740
            67,032,382
            65,527,802***Consolidated
                Balance Sheet Data***
            *December
                31,*
              *2006*
              *US$’000*
            *December
                31, 2005*
              *US$’000*
            *December
                31, 2004*
              *US$’000*Net
                current assets (current assets less current liabilities)
            61,435
            44,964
            53,448Non
                current liabilities
            (45,928)
            (19,083)
            (16,636)Total
                assets
            249,131
            184,602
            156,040Capital
                stock
            978
            830
            776Shareholders’
                equity
            167,262
            133,618
            118,894








2


**Amounts
      Adjusted for US GAAP**


***Year
                ended December 31,******Consolidated
                Statement of Income data***
            *2006*
              *US$’000*
            *2005*
              *US$’000*
            *2004*
              *US$’000*
            *2003*
              *US$’000*
            *2002*
              *US$’000*Revenues
            118,674
            98,560
            80,008
            65,531
            51,978Net
                (loss) / profit
            (1,946)
            2,582
            4,048
            5,146
            5,043Basic
                (loss) / earnings per ‘A’ ordinary share (US Dollar)
            (0.03)
            0.04
            0.07
            0.12
            0.12Basic
                (loss) / earnings per ‘B’ ordinary share (US Dollar)
            (0.06)
            0.08
            0.14
            0.24
            0.24Diluted
                (loss) / earnings per ‘A’ ordinary share
            (0.03)
            0.04
            0.07
            0.11
            0.12Diluted
                (loss) / earnings per ‘B’ ordinary share
            (0.06)
            0.08
            0.14
            0.22
            0.24***As
                at December 31****,****Consolidated
                Balance Sheet Data***
            *2006*
              *US$’000*
            *2005*
              *US$’000*
            *2004*
              *US$’000*
            *2003*
              *US$’000*
            *2002*
              *US$’000*Total
                assets
            239,426
            181,699
            158,869
            128,650
            99,067Shareholders’
                equity
            161,303
            132,769
            122,033
            87,234
            70,944





No
      dividends were declared in any of the periods from December 31, 2002 to December
      31, 2006.





***Risk
      Factors***





Before
      you invest in our shares, you should be aware that there are various risks,
      which are described below. You should consider carefully these risks together
      with all of the other information included in this annual report before you
      decide to purchase our shares.





***Trinity
      Biotech’s operating results may be subject to
      fluctuations.***





·
            Trinity
                Biotech’s operating results may fluctuate as a result of many factors
                related to its business, including the competitive conditions in
                the
                industry, loss of significant customers, delays in the development
                of new
                products and currency fluctuations, as described in more detail below,
                and
                general factors such as the size and timing of orders, the prevalence
                of
                various diseases and general economic
                conditions.





***A
      need for capital might arise in the future if Trinity Biotech’s capital
      requirements increase or revenues decrease.***





·
            Up
                to now Trinity Biotech has funded its operations through the sale
                of its
                shares and securities convertible into shares, cashflows from operations
                and bank borrowings. Trinity Biotech expects that the proceeds of
                recent
                equity financings, bank borrowings, lease financing, current working
                capital and sales revenues will fund its existing operations and
                payment
                obligations. However, if our capital requirements are greater than
                expected, or if our revenues are not sufficient to fund our operations,
                we
                may need to find additional financing which may not be available
                on
                attractive terms or at all. Any future financing could have an adverse
                effect on our current shareholders or the price of our shares in
                general.





***Trinity
      Biotech’s acquisition strategy may be less successful than expected, and
      therefore, growth may be limited.***





·
            Trinity
                Biotech has historically grown organically and through the acquisition
                of,
                and investment in, other companies, product lines and technologies.
                There
                can be no guarantees that recent or future acquisitions can be
                successfully assimilated or that projected growth in revenues or
                synergies
                in operating costs can be achieved. Our ability to integrate future
                acquisitions may also be adversely affected by inexperience in dealing
                with new technologies, and changes in regulatory or competitive
                environments. Additionally, even during a successful integration,
                the
                investment of management’s time and resources in the new enterprise may be
                detrimental to the consolidation and growth of our existing
                business.




3


***The
      diagnostics industry is highly competitive, and Trinity Biotech’s research and
      development could be rendered obsolete by technological advances of
      competitors.***





·
            Trinity’s
                principal business is the supply of medical diagnostic test kits
                and
                related diagnostic instrumentation. The diagnostics industry is extremely
                competitive. Trinity Biotech is competing directly with companies
                which
                have greater capital resources and larger marketing and business
                organisations than Trinity Biotech. Trinity Biotech’s ability to grow
                revenue and earnings may be adversely impacted by competitive product
                and
                pricing pressures and by its inability to gain or retain market share
                as a
                result of the action of competitors. We have invested in research
                and
                development ("R&D") but there can be no guarantees that our R&D
                programmes will not be rendered technologically obsolete or financially
                non-viable by the technological advances of our competitors, which
                would
                also adversely affect our existing product lines and inventory. The
                main
                competitors of Trinity Biotech (and their principal products with
                which
                Trinity Biotech competes) include Dade-Behring (Sysmex® CA, D-Dimer plus,
                Enzygnost®), Zeus Scientific Inc. (Zeus EIA, IFA), Diasorin Inc. (ETITM),
                Abbott Diagnostics (AxSYMTM, IMxTM), Diagnostic Products Corp. - DPC
                (ImmuliteTM), Bio-Rad (ELISA, WB & A1c), Roche Diagnostics (COBAS
                AMPLICORTM, AmpliscreenTM, AccutrendTM) and OraSure Technologies, Inc
                (OraQuick ®).





***Trinity
      Biotech is highly dependent on suitable distributors worldwide.***





·
            Trinity
                Biotech currently distributes its product portfolio through distributors
                in approximately 80 countries worldwide. Our continuing economic
                success
                and financial security is dependent on our ability to secure effective
                channels of distribution on favourable trading terms with suitable
                distributors.





***Trinity
      Biotech’s business could be adversely affected by changing market conditions
      resulting in the reduction of the number of institutional
      customers.***





·
            The
                diagnostics industry is in transition with a number of changes that
                affect
                the market for diagnostic test products. Changes in the healthcare
                industry delivery system have resulted in major consolidation among
                reference laboratories and in the formation of multi-hospital alliances,
                reducing the number of institutional customers for diagnostic test
                products. There can be no assurance that we will be able to enter
                into
                and/or sustain contractual or other marketing or distribution arrangements
                on a satisfactory commercial basis with these institutional
                customers.





***Trinity
      Biotech’s long-term success depends on its ability to develop new products
      subject to stringent regulatory control. Even if new products are successfully
      developed, Trinity Biotech’s proprietary know-how, manufacturing techniques and
      trade secrets may be copied by competitors. Furthermore, Trinity Biotech’s
      patents have a limited life time and are thereafter subject to competition
      with
      generic products. Also, competitors might claim an exclusive patent for products
      Trinity Biotech plans to develop.***





·
            We
                are committed to significant expenditure on research and development
                (“R&D”). However, there is no certainty that this investment in
                research and development will yield technically feasible or commercially
                viable products. Our organic growth and long-term success is dependent
                on
                our ability to develop and market new products but this work is subject
                to
                very stringent regulatory control and very significant costs in research,
                development and marketing. Failure to introduce new products could
                significantly slow our growth and adversely affect our market
                share.





·
            Even
                when products are successfully developed and marketed, Trinity Biotech’s
                ownership of the technology behind these products has a finite life.
                In
                general, generic competition, which can arise through replication
                of the
                Trinity Biotech’s proprietary know-how, manufacturing techniques and trade
                secrets or after the expiration of a patent, can have a detrimental
                effect
                on a product’s revenue, profitability and market share. There can be no
                guarantee that the net income and financial position of Trinity Biotech
                will not be adversely affected by competition from generic products.
                Conversely, on occasion, certain companies have claimed exclusive
                patent,
                copyright and other intellectual property rights to technologies
                in the
                diagnostics industry. If these technologies relate to Trinity Biotech’s
                planned products, Trinity Biotech would be obliged to seek licences
                to use
                this technology and, in the event of being unable to obtain such
                licences
                or it being obtainable on grounds that would be materially disadvantageous
                to Trinity Biotech, we would be precluded from marketing such products,
                which could adversely impact our revenues, sales and financial position.




4


***Trinity
      Biotech’s patent applications could be rejected or the existing patents could be
      challenged; our technologies could be subject to patent infringement claims;
      and
      trade secrets and confidential know-how could be obtained by
      competitors.***





·
            We
                can provide no assurance that the patents Trinity Biotech may apply
                for
                will be obtained or that existing patents will not be challenged.
                The
                patents owned by Trinity Biotech and its subsidiaries may be challenged
                by
                third parties through litigation and could adversely affect the value
                of
                our patents. We can provide no assurance that our patents will continue
                to
                be commercially valuable.





·
            Trinity
                Biotech currently owns 30 US patents with remaining patent lives
                varying
                from less than one year to 16 years. In addition to these US patents,
                Trinity Biotech owns a total of 7 additional non-US patents with
                expiration dates varying between the years 2008 and
                2023.





·
            Also,
                our technologies could be subject to claims of infringement of patents
                or
                proprietary technology owned by others. The cost of enforcing our
                patent
                and technology rights against infringers or defending our patents
                and
                technologies against infringement charges by others may be high and
                could
                adversely affect our business.





·
            Trade
                secrets and confidential know-how are important to our scientific
                and
                commercial success. Although we seek to protect our proprietary
                information through confidentiality agreements and other contracts,
                we can
                provide no assurance that others will not independently develop the
                same
                or similar information or gain access to our proprietary
                information.





***Trinity
      Biotech’s business is heavily regulated and compliance with applicable
      regulations could reduce revenues and profitability.***





·
            Our
                manufacturing and marketing of diagnostic test kits are subject to
                government regulation in the United States of America by the Food
                and Drug
                Administration ("FDA"), and by comparable regulatory authorities
                in other
                jurisdictions. The approval process for our products, while variable
                across countries, is generally lengthy, time consuming, detailed
                and
                expensive. Our continued success is dependent on our ability to develop
                and market new products, some of which are currently awaiting approval
                from these regulatory authorities. There is no certainty that such
                approval will be granted or, even once granted, will not be revoked
                during
                the continuing review and monitoring
                process.





·
            We
                are required to comply with extensive post market regulatory requirements.
                Non-compliance with applicable regulatory requirements of the FDA
                or
                comparable foreign regulatory bodies can result in enforcement action
                which may include recalling products, ceasing product marketing,
                paying
                significant fines and penalties, and similar actions that could limit
                product sales, delay product shipment, and adversely affect
                profitability.





***As
      a foreign private issuer whose shares are listed on the NASDAQ National Market,
      we are allowed to follow certain home country corporate governance practices
      instead of certain NASDAQ requirements.***





·
            As
                a foreign private issuer whose shares are listed on the NASDAQ National
                Market, we are permitted to follow certain home country corporate
                governance practices instead of certain requirements of the NASDAQ
                Marketplace Rules. We have elected to follow home country corporate
                legislation with respect to the number of persons on our audit committee,
                the number of independent directors on our Board of Directors, director
                nomination procedures, and the composition of our compensation committee,
                as described in more detail under Item 6 of this annual report.





·
            In
                addition, we may follow Irish law instead of the NASDAQ Marketplace
                Rules
                that require that we obtain shareholder approval for certain dilutive
                events, such as for the establishment or amendment of certain equity
                based
                compensation plans, an issuance that will result in a change of control
                of
                Trinity Biotech, certain transactions other than a public offering
                involving issuances of a 20% or more interest in Trinity Biotech
                and
                certain acquisitions of the stock or assets of another company.








5


***Trinity
      Biotech’s success is dependent on certain key management
      personnel.***





·
            Trinity
                Biotech’s success is dependent on certain key management personnel. Our
                key employees are Ronan O’Caoimh, our CEO and Chairman, Brendan Farrell,
                our President, Dr Jim Walsh, our COO, and Rory Nealon, our CFO and
                Secretary, with all of which we have entered into employment contracts.
                We
                carry a life assurance policy for Mr O’Caoimh in the amount of €533,000
                (US$706,000). Competition for qualified employees among biotechnology
                companies is intense, and the loss of such personnel or the inability
                to
                attract and retain the additional highly skilled employees required
                for
                the expansion of our activities, could adversely affect our business.
                In
                the USA, the UK, France, Germany and Sweden we have been able to
                attract
                and retain qualified personnel. In Ireland, we have experienced some
                difficulties in attracting and retaining staff due to competition
                from
                other employers in our industry and due to the strength of the Irish
                economy.





***Trinity
      Biotech is dependent on its suppliers for the primary raw materials required
      for
      its test kits.***





·
            The
                primary raw materials required for Trinity Biotech's test kits consist
                of
                antibodies, antigens or other reagents, glass fibre and packaging
                materials which are acquired from third parties. Although Trinity
                Biotech
                does not expect to be dependent upon any one source for these raw
                materials, alternative sources of antibodies with the characteristics
                and
                quality desired by Trinity Biotech may not be available. Such
                unavailability could affect the quality of our products and our ability
                to
                meet orders for specific products.





***Trinity
      Biotech may be subject to liability resulting from its products or services.***





·
            Trinity
                Biotech may be subject to claims for personal injuries or other damages
                resulting from its products or services. Trinity Biotech has global
                product liability insurance in place for its manufacturing subsidiaries
                up
                to a maximum of €6,500,000 (US$8,609,000) for any one accident, limited to
                a maximum of €6,500,000 (US$8,609,000) in any one year period of
                insurance. A deductible of US$25,000 is applicable to each insurance
                event
                that may arise. There can be no assurance that our product liability
                insurance is sufficient to protect us against liability that could
                have a
                material adverse effect on our
                business.





***Currency
      fluctuations may adversely affect our earnings and
      assets.***





·
            Trinity
                Biotech records its transactions in US Dollars, euro and Swedish
                Kroner
                and prepares its financial statements in US Dollars. A substantial
                portion
                of our expenses is denominated in euro. However, Trinity Biotech’s
                revenues are primarily denominated in US Dollars. As a result, the
                Group
                is affected by fluctuations in currency exchange rates, especially
                the
                exchange rate between the US dollar and the euro, which may adversely
                affect our earnings and assets. The percentage of 2006 consolidated
                revenue denominated in US Dollars was approximately 67%. Of the remaining
                33% revenue, 26% relates to revenue denominated in Euro and 7% relates
                to
                sterling, yen and Swedish Kroner denominated revenues. Thus, a 10%
                decrease in the value of the euro would have approximately a 3% adverse
                impact on consolidated revenues.





·
            As
                part of the process of mitigating foreign exchange risk, the principal
                exchange risk identified by Trinity Biotech is with respect to
                fluctuations in the euro. This is attributable to the level of euro
                denominated expenses exceeding the level of euro denominated revenues
                thus
                creating a euro deficit. Trinity Biotech continuously monitors its
                exposure to foreign currency movements and based on expectations
                on future
                exchange rate exposure implements a hedging policy which may include
                covering a portion of this exposure through the use of forward contracts.
                In the medium term, our objective is to increase the level of non-US
                Dollar denominated revenue, thus creating a natural hedge of the
                non-US
                Dollar expenditure.





***The
      conversion of our outstanding employee share options and warrants would dilute
      the ownership interest of existing shareholders.***





·
            The
                warrants issued in 2004 and the total share options exercisable at
                December 2006, as described in Item 18, note 19 to the consolidated
                financial statements, are convertible into American Depository Shares
                (ADSs), 1 ADS representing 4 Class “A” Ordinary Shares. The exercise of
                the share options exercisable and of the warrants will likely occur
                only
                when the conversion price is below the trading price of our ADSs
                and will
                dilute the ownership interests of existing shareholders.




6


For
      instance, should the options and warrant holders of the 5,605,469 ‘A’ Ordinary
      shares (1,401,367 ADSs) exercisable at December 31, 2006 be exercised, Trinity
      Biotech would have to issue 5,605,469 additional ‘A’ ordinary shares (1,401,367
      ADSs). On the basis of 73,601,497 ‘A’ ordinary shares outstanding at December
      31, 2006, this would effectively dilute the ownership interest of the existing
      shareholders by approximately 7%.





***It
      could be difficult for US holders of ADSs to enforce any securities laws claims
      against Trinity Biotech, its officers or directors in Irish
      Courts.***





·
            At
                present, no treaty exists between the United States and Ireland for
                the
                reciprocal enforcement of foreign judgements. The laws of Ireland
                do
                however, as a general rule, provide that the judgements of the courts
                of
                the United States have in Ireland the same validity as if rendered
                by
                Irish Courts. Certain important requirements must be satisfied before
                the
                Irish Courts will recognise the United States judgement. The originating
                court must have been a court of competent jurisdiction, the judgement
                may
                not be recognised if it is based on public policy, was obtained by
                fraud
                or its recognition would be contrary to Irish public policy. Any
                judgement
                obtained in contravention of the rules of natural justice will not
                be
                enforced in Ireland.





***Trinity
      Biotech is exposed to potential risks and increased costs from the requirements
      of Section 404 of the Sarbanes Oxley Act of 2002 to evaluate internal controls
      over financial reporting.***





·
            Section
                404 of the Sarbanes Oxley Act of 2002 requires that the Group evaluates
                and reports on the effectiveness of internal controls in providing
                reasonable assurance regarding the reliability of Financial Reporting.
                The
                initial compliance date for management to evaluate and report on
                internal
                control over financial reporting under Section 404 of the Sarbanes
                Oxley
                Act of 2002 for Foreign Accelerated Filers is for the financial year
                ending on or after July 15, 2006. The Group has prepared and implemented
                an internal plan for compliance and has completed the process of
                documenting and testing the system of internal controls over financial
                reporting to provide the basis for this report for the year ending
                December 31, 2006, which is set out in Item 15. The requirement to
                provide
                an auditors’ report on internal controls over financial reporting of the
                Group will apply for the financial year ending December 31,
                2007.





Due
      to
      ongoing evaluation and testing of the Group’s internal controls and the
      uncertainties of the interpretation of these new requirements, the Group cannot
      assure that there may not be significant deficiencies or material weaknesses
      that would be required to be reported. In the event that significant
      deficiencies or material weaknesses are reported, investor perceptions may
      be
      adversely affected and may cause a decline in the market price of our
      stock.





The
      Group
      has incurred increased costs and an increased amount of management time and
      external resources in order to comply with the above legislation by the end
      of
      2006 and may continue to do so in years to come. The process of documenting
      and
      testing the Group’s internal controls over financial reporting and considering
      improvements has required the Group to hire additional personnel and outside
      advisory services, resulting in additional accounting and consultancy
      expenses.








**Item
      4** ******


***Information
      on the Company***





***History
      and Development of the Company***


Trinity
      Biotech (“the “Group”) develops, acquires, manufactures and markets medical
      diagnostic products for the clinical laboratory and point-of-care (“POC”)
      segments of the diagnostic market. These test kits are used to detect
      autoimmune, infectious and sexually transmitted diseases, diabetes and disorders
      of the blood, liver and intestine. The Group is also a significant provider
      of
      raw materials to the life sciences industry. The Group sells worldwide in over
      80 countries through its own sales force and a network of international
      distributors and strategic partners.





Trinity
      Biotech was incorporated as a public limited company (“plc”) registered in
      Ireland in 1992. The Company commenced operations in 1992 and, in October 1992,
      completed an initial public offering of its securities in the US. The principal
      officers of the Group are located at IDA Business Park, Bray, Co Wicklow,
      Ireland. The Group has expanded its product base through internal development
      and acquisitions.


7


The
      Group, which has its headquarters in Bray Ireland, employs in excess of 800
      people worldwide and markets its portfolio of over 500 products to customers
      in
      80 countries around the world. Trinity Biotech markets its products in the
      US
      and the rest of the world through a combination of direct selling and a network
      of national and international distributors. The Group has established direct
      sales forces in the US, Germany, France and the UK. Trinity Biotech has
      manufacturing facilities in Bray, Ireland, Umea, Sweden and Lemgo, Germany,
      in
      Europe and in Jamestown, New York, Carlsbad, California and Kansas City,
      Missouri in the US.





The
      following represents the acquisitions made by Trinity Biotech in recent
      years.





***Acquisition
      of Haemostasis line of bioMerieux Inc***


In
      June
      2006, Trinity Biotech acquired the haemostasis product line of bioMerieux Inc.
      (“bioMerieux”) for a total consideration of US$44.4 million, consisting of cash
      consideration of US$38.2 million, deferred consideration of US$5.5 million
      (net
      of discounting) and acquisition expenses of US$0.7 million. At the year end,
      Trinity Biotech has accrued US$5,688,000 for the deferred consideration which
      will be paid in June 2007 and June 2008, (see Item 18, note 23 to the
      consolidated financial statements). A further US$5.5 million of consideration
      was contingent on the performance of the product line during 2006. However,
      the
      Group has determined that this contingent element is not payable as certain
      milestones concerning the performance of the business line were not met during
      2006. The bioMerieux portfolio comprises a range of haemostasis test kits in
      addition to a range of automated instruments which are comparable to various
      test kits and instruments within Trinity Biotech’s product range.




***Acquisition
      of the distribution business of Laboratoires Nephrotek
      SARL***


In
      October, 2006, Trinity Biotech acquired the French distribution business of
      Laboratoires Nephrotek SARL (“Nephrotek”) for a total consideration of
      US$1,175,000, consisting of cash consideration of US$1,060,000, of which
      US$239,000 remained payable at December, 31 2006 and acquisition expenses of
      US$115,000.





***Acquisition
      of Primus Corporation***


In
      July
      2005, Trinity Biotech completed the acquisition of Primus Corporation for
      US$14.3 million before costs, consisting of a cash consideration of US$8.6
      million and a one year promissory note of US$3.0 million. An additional US$2.7
      million of additional consideration was paid to the shareholders in 2006 based
      on the growth of the business during 2005 less an adjustment for the working
      capital at the date of acquisition. Primus Corporation is a leader in the field
      of providing tests for the detection and monitoring of diabetes
      patients.





***Acquisition
      of Research Diagnostics Inc***


In
      March
      2005, Trinity Biotech purchased the assets of Research Diagnostics Inc (“RDI”)
      for US$4.2 million in cash. RDI provides a comprehensive range of
      immunodiagnostic products to pharmaceutical companies, diagnostic manufacturers
      and research facilities worldwide.





***Acquisition
      of the assets of Adaltis US, Inc***


In
      April
      2004, Trinity acquired the assets of Adaltis US, Inc for US$2,852,000 in cash.
      Adaltis US, Inc. is the US distribution arm for Adaltis, Inc. As part of the
      transaction, Trinity Biotech has obtained exclusive distribution rights to
      Adaltis’ open-end microplate analytical instrumentation in the US and
      non-exclusive distribution rights in the rest of the world, except China.





***Acquisition
      of the assets of Fitzgerald Industries International
      Inc***


In
      April
      2004, Trinity Biotech also completed the acquisition of the assets of Fitzgerald
      Industries International Inc. for US$16 million. Under the terms of the purchase
      agreement, contingent consideration would be payable depending on the financial
      performance of that business during the first two years of operation post
      acquisition relative to its pre-acquisition performance. At December 31, 2005
      it
      was determined, based on the performance of Fitzgerald in 2005, that an amount
      of US$1,002,000 would be payable to the shareholders of Fitzgerald. This was
      paid by the Group in 2006. Fitzgerald provides a comprehensive range of raw
      materials to pharmaceutical companies, reference laboratories, diagnostic
      manufacturers and research facilities worldwide.


8


***Principal
      Markets***


The
      primary market for Trinity Biotech’s tests remains the US. During fiscal 2006,
      the Group sold 51% (US$60.7 million) (2005: 51% or US$50.6 million) of product
      in the US. Sales to non-US (principally European and Asian/ African) countries
      represented 49% (US$57.9 million) for fiscal year 2006 (2005: 49% or US$47.9
      million).





For
      a
      more comprehensive segmental analysis please refer to Item 5, “Results of
      Operations” and Item 18, note 2 to the consolidated financial
      statements.





***Principal
      Products***


Trinity
      Biotech develops, acquires, manufactures and markets a wide range of diagnostic
      products. The complete portfolio is divided into 4 product lines which are
      sold
      under the following established brand names:





**Haemostasis**
            **Point
                of Care**
            **Infectious**
            **Clinical****Diseases**
            **Chemistry**Biopool®
            UniGoldTM
            Bartels®
            PrimusTMAmaxTM
            CapillusTM
            CAPTIATM
            EZTMDestinyTM
            Recombigen®
            MarDx®MicroTrakTMMarBlot®





***Haemostasis***


The
      haemostasis product line comprises of test kits and instrumentation used for
      the
      detection of blood disorders. Trinity has two established ranges of haemostasis
      products, Biopool® and AmaxTM, which were acquired by the Group in 2001 and 2002
      respectively. The Amax range of products includes a portfolio of diagnostic
      instrumentation including the DestinyTM range.





Following
      the acquisition of the bioMerieux haemostasis line in 2006, the haemostasis
      product line has become the largest in revenue terms within Trinity Biotech.
      The
      acquisition of bioMerieux has significantly increased the market share of
      Trinity Biotech within the haemostasis market. In particular, the acquisition
      has strengthened the Group’s position in our direct selling markets in the USA,
      the UK, France and Germany.





The
      haemostasis market continues to grow, driven by increasing demands for blood
      clotting and bleeding tests due to an aging population and improvement in
      healthcare systems. Trinity Biotech has recognised and also demonstrated a
      flexibility to adapt to these demands.





Trinity
      Biotech instrumentation and assays for haemostasis are recognised as being
      among
      the highest quality available. The comprehensive product offering is marketed
      globally to hospitals, clinical laboratories, commercial reference laboratories
      and research institutions.





***Point
      of Care (POC)***


Point
      of
      Care refers to diagnostic tests which are carried in the presence of the
      patient. Trinity Biotech’s current range of POC tests principally test for the
      presence of HIV antibodies. The Group’s principal products are UniGoldTM and
      CapillusTM.





UniGoldTM
      and CapillusTM products have been used for several years in voluntary counselling
      and testing centres (VCTs) in sub-Saharan Africa where they provide a
      cornerstone to early detection and treatment intervention. In the USA, the
      Centres for Disease Control (CDC) recommend the use of rapid tests to control
      the spread of HIV/AIDS. As part of this, UniGold HIV is used in public health
      facilities, hospitals and other outreach facilities. Trinity Biotech, through
      both UniGoldTM and CapillusTM, make a very significant contribution to the global
      effort to meet the challenge of HIV.





***Infectious
      Diseases***


The
      infectious diseases product line is the most diverse within Trinity Biotech.
      The
      products are used to perform tests on patient samples and the results generated
      are reported to physicians to guide diagnosis for a broad range of infectious
      diseases. The Trinity Biotech product line has grown to include diagnostic
      kits
      for autoimmune diseases (e.g. lupus, celiac and rheumatoid arthritis), hormonal
      imbalances, sexually transmitted diseases (syphilis, chlamydia and herpes),
      intestinal infections, lung/bronchial infections, cardiovascular and a wide
      range of other diseases.


9


The
      vast
      majority of the infectious diseases product line is FDA cleared for sale in
      the
      USA and CE marked for sale in Europe. Products are sold in over 80 countries,
      with the focus on North America, Europe and Asia.





The
      main
      drivers of expansion and opportunity for the product line have been:


1.
      The
      increased Trinity Biotech instrumentation offering/portfolio through
      collaboration with Adaltis and Dynex and implementation of a system sell (i.e.
      combining instruments and reagents) strategy;


2.
      Focus
      on key accounts in affiliate markets;


3.
      Expansion of product portfolio to meet market demands.





***Clinical
      Chemistry***


The
      Trinity Biotech speciality clinical chemistry business includes products such
      as
      ACE, Bile Acids, Lactate, Oxalate and G6PDH that are clearly differentiated
      in
      the marketplace. These products are suitable for both manual and automated
      testing and have proven performance in the diagnosis of many disease states
      from
      liver and kidney disease to G6PDH deficiency which is an indicator of haemolytic
      anaemia.





In
      2005
      Trinity Biotech acquired Primus Corporation, a leader in the field of in-vitro
      diagnostic testing for haemoglobin A1c and haemoglobin variants, used in the
      detection of diabetes. Primus manufactures a range of instrumentation using
      patented HPLC (high pressure liquid chromatography) technology. These products
      are the most accurate and precise methods available for detection and monitoring
      the patient status and overall diabetic control. Primus sells the products
      to
      physicians’ offices and reference laboratories directly in the USA and via a
      distribution network in other countries.





***Sales
      and Marketing***


Trinity
      Biotech sells its product through its own direct sales-force in four countries:
      the United States, Germany, France and the United Kingdom. In the United States
      there are approximately 127 sales and marketing professionals responsible for
      the sale of the Trinity Biotech range of haemostasis reagents and
      instrumentation, clinical chemistry, point of care and infectious disease
      products. The Group also has sales forces of 29 in Germany and 12 in the UK.
      In
      October 2006, Trinity Biotech established a direct selling operation in France,
      Trinity Biotech France SARL, which currently employs 10 sales professionals.
      In
      addition to our direct sales operations, Trinity Biotech also operates in
      approximately 80 countries, through over 300 independent distributors and
      strategic partners.





***Manufacturing
      and Raw Materials***


Trinity
      Biotech uses a wide range of biological and non-biological raw materials. The
      primary raw materials required for Trinity Biotech's test kits consist of
      antibodies, antigens, human plasma, latex beads, rabbit brain phospholipids,
      bovine source material, other reagents, glass fibre and packaging materials.
      The
      reagents used as raw materials have been acquired for the most part from third
      parties. Although Trinity Biotech is not dependent upon any one source for
      such
      raw materials, alternative sources of antibodies and antigens with the
      specificity and sensitivity desired by Trinity Biotech may not be available
      from
      time-to-time. Such unavailability could affect the supply of its products and
      its ability to meet orders for specific products, if such orders are obtained.
      Trinity Biotech's growth may be limited by its ability to obtain or develop
      the
      necessary quantity of antibodies or antigens required for specific products.
      Thus, Trinity Biotech's strategy is, whenever possible, to establish alternative
      sources of supply of antibodies.





***Competition***


The
      diagnostic industry is very competitive. There are many companies, both public
      and private, engaged in the sale of medical diagnostic products and
      diagnostics-related research and development, including a number of well-known
      pharmaceutical and chemical companies. Competition is based primarily on product
      reliability, customer service and price. The Group’s competition includes
      several large companies such as, but not limited to, Roche, Abbott, Johnson
      & Johnson, Bayer and Dade-Behring.





***Patents
      and Licences***


*Patents*


Many
      of
      the Trinity Biotech’s tests are not protected by specific patents, due to the
      significant cost of putting patents in place for Trinity Biotech’s wide range of
      products. However, Trinity Biotech believes that substantially all of its tests
      are protected by proprietary know-how, manufacturing techniques and trade
      secrets.





10


From
      time-to-time, certain companies have asserted exclusive patent, copyright and
      other intellectual property rights to technologies that are important to the
      industry in which Trinity Biotech operates. In the event that any of such claims
      relate to its planned products, Trinity Biotech intends to evaluate such claims
      and, if appropriate, seek a licence to use the protected technology. There
      can
      be no assurance that Trinity Biotech would, firstly, be able to obtain licences
      to use such technology or, secondly, obtain such licences on satisfactory
      commercial terms. If Trinity Biotech or its suppliers are unable to obtain
      or
      maintain a licence to any such protected technology that might be used in
      Trinity Biotech’s products, Trinity Biotech could be prohibited from marketing
      such products. It could also incur substantial costs to redesign its products
      or
      to defend any legal action taken against it. If Trinity Biotech’s products
      should be found to infringe protected technology, Trinity Biotech could also
      be
      required to pay damages to the infringed party.





*Licences*


Trinity
      Biotech has entered into a number of key licensing arrangements including the
      following:





In
      2005
      Trinity Biotech obtained a license from the University of Texas for the use
      of
      Lyme antigen (Vlse), thus enabling the inclusion of this antigen in the Group’s
      Lyme diagnostic products.





In
      2002,
      Trinity Biotech obtained the Unipath and Carter Wallace lateral flow licences
      under agreement with Inverness Medical Innovations. In 2006, Trinity Biotech
      renewed its license agreement with Inverness Medical Innovations covering IMI’s
      most up to date broad portfolio of lateral flow patents, and expanded the field
      of use to include over the counter (”OTC”) for HIV products, thus ensuring
      Trinity Biotech’s freedom to operate in the lateral flow market with its UniGold
      technology.





On
      December 20, 1999 Trinity Biotech obtained a non-exclusive commercial licence
      from the National Institute of Health (“NIH”) in the US for NIH patents relating
      to the general method of producing HIV-1 in cell culture and methods of
      serological detection of antibodies to HIV-1.





Trinity
      Biotech has also entered into a number of licence/supply agreements for key
      raw
      materials used in the manufacture of its products.





***Government
      Regulation***


The
      preclinical and clinical testing, manufacture, labelling, distribution, and
      promotion of Trinity Biotech’s products are subject to extensive and rigorous
      government regulation in the United States and in other countries in which
      Trinity Biotech’s products are sought to be marketed. The process of obtaining
      regulatory clearance varies, depending on the product categorisation and the
      country, from merely notifying the authorities of intent to sell, to lengthy
      formal approval procedures which often require detailed laboratory and clinical
      testing and other costly and time-consuming processes. The main regulatory
      bodies which require extensive clinical testing are the Food and Drug
      Administration (“FDA”) in the US, the Irish Medicines Board (as the authority
      over Trinity Biotech in Europe) and Health Canada.





The
      process in each country varies considerably depending on the nature of the
      test,
      the perceived risk to the user and patient, the facility at which the test
      is to
      be used and other factors. As 51% of Trinity Biotech’s 2006 revenues were
      generated in the US and the US represents approximately 43% of the worldwide
      diagnostics market, an overview of FDA regulation has been included
      below.





*FDA
      Regulation*


Our
      products are medical devices subject to extensive regulation by the FDA under
      the Federal Food, Drug, and Cosmetic Act. The FDA’s regulations govern, among
      other things, the following activities: product development, testing; labelling,
      storage, premarket clearance or approval, advertising and promotion and sales
      and distribution.




*Access
      to US Market.* Each
      medical device that Trinity Biotech may wish to commercially distribute in
      the
      US will require either pre-market notification (more commonly know as 510(k))
      clearance or premarket application (“PMA”) approval prior to commercial
      distribution. Devices intended for use in blood bank environments fall under
      even more stringent review and require a Blood Licence Application (“BLA”). Some
      low risk devices are exempted from these requirements. The FDA has introduced
      fees for the review of 510(k) and PMA applications. The fee for a PMA or BLA
      in
      2007 is in excess of US$280,000.




11


*510(k)
      Clearance Pathway* .
      To
      obtain 510(k) clearance, Trinity Biotech must submit a premarket notification
      demonstrating that the proposed device is substantially equivalent in intended
      use and in safety and effectiveness to a “predicate device” - either a
      previously cleared class I or II device or a class III preamendment device,
      for
      which the FDA has not called for PMA applications. The FDA’s 510(k) clearance
      pathway usually takes from 3 to 9 months, but it can last longer. After a device
      receives 510(k) clearance, any modification that could significantly affect
      its
      safety or effectiveness, or that would constitute a major change in its intended
      use, requires a new 510(k) clearance or could even require a PMA
      approval.




*PMA
      Approval Pathway* .
      A
      device that does not qualify for 510(k) clearance generally will be placed
      in
      class III and required to obtain PMA approval, which requires proof of the
      safety and effectiveness of the device to the FDA’s satisfaction. A PMA
      application must provide extensive preclinical and clinical trial data and
      also
      information about the device and its components regarding, among other things,
      device design, manufacturing and labeling. In addition, an advisory committee
      made up of clinicians and/or other appropriate experts is typically convened
      to
      evaluate the application and make recommendations to the FDA as to whether
      the
      device should be approved. It generally takes from one to three years but can
      take longer.




Although
      the FDA is not bound by the advisory panel decision, the panel’s recommendation
      is important to the FDA’s overall decision making process. The PMA approval
      pathway is more costly, lengthy and uncertain than the 510(k) clearance process.
      It generally takes from one to three years or even longer. After approval of
      a
      PMA, a new PMA or PMA supplement is required in the event of a modification
      to
      the device, its labeling or its manufacturing process. The FDA has recently
      implemented substantial fees for the submission and review of PMA
      applications.




*BLA
      approval pathway.* BLA
      approval is required for some products intended for use in a blood bank
      environment, where the blood screened using these products may be administered
      to an individual following processing. This approval pathway involves even
      more
      stringent review of the product.




*Clinical
      Studies* .
      A
      clinical study is required to support a PMA application and is required for
      a
      510(k) premarket notification. Such studies generally require submission of
      an
      application for an Investigational Device Exemption (“IDE”) showing that it is
      safe to test the device in humans and that the testing protocol is
      scientifically sound.





*Postmarket
      Regulation*


After
      the
      FDA permits a device to enter commercial distribution, numerous regulatory
      requirements apply, including the Quality System Regulation (“QSR”), which
      requires manufacturers to follow comprehensive testing, control, documentation
      and other quality assurance procedures during the manufacturing process;
      labeling regulations; the FDA’s general prohibition against promoting products
      for unapproved or “off-label” uses; and the Medical Device Reporting (“MDR”)
      regulation, which requires that manufacturers report to the FDA if their device
      may have caused or contributed to a death or serious injury or malfunctioned
      in
      a way that would likely cause or contribute to a death or serious injury if
      it
      were to recur.




Trinity
      Biotech is subject to inspection by the FDA to determine compliance with
      regulatory requirements. If the FDA finds any failure to comply, the agency
      can
      institute a wide variety of enforcement actions, ranging from a public warning
      letter to more severe sanctions such as fines, injunctions, and civil penalties;
      recall or seizure of products; the issuance of public notices or warnings;
      operating restrictions, partial suspension or total shutdown of production;
      refusing requests for 510(k) clearance or PMA approval of new products;
      withdrawing 510(k) clearance or PMA approvals already granted; and criminal
      prosecution.





Unanticipated
      changes in existing regulatory requirements or adoption of new requirements
      could have a material adverse effect on the Group. Any failure to comply with
      applicable QSR or other regulatory requirements could have a material adverse
      effect on the Group’s revenues, earnings and financial standing.





There
      can
      be no assurances that the Group will not be required to incur significant costs
      to comply with laws and regulations in the future or that laws or regulations
      will not have a material adverse effect upon the Group’s revenues, earnings and
      financial standing.





12


*CLIA
      classification*


Purchasers
      of Trinity Biotech’s clinical diagnostic products in the United States may be
      regulated under The Clinical Laboratory Improvements Amendments of 1988 (“CLIA”)
      and related federal and state regulations. CLIA is intended to ensure the
      quality and reliability of clinical laboratories in the United States by
      mandating specific standards in the areas of personnel qualifications,
      administration and participation in proficiency testing, patient test
      management, quality control, quality assurance and inspections. The regulations
      promulgated under CLIA established three levels of diagnostic tests (“waived”,
“moderately complex” and “highly complex”) and the standards applicable to a
      clinical laboratory depend on the level of the tests it performs.





Export
      of
      products subject to 510(k) notification requirements, but not yet cleared to
      market, are permitted without FDA export approval, if statutory requirements
      are
      met. Unapproved products subject to PMA requirements can be exported to any
      country without prior FDA approval provided, among other things, they are not
      contrary to the laws of the destination country, they are manufactured in
      substantial compliance with the QSR, and have been granted valid marketing
      authorisation in Australia, Canada, Israel, Japan, New Zealand, Switzerland,
      South Africa or member countries of the European Union or of the European
      Economic Area (“EEA”). FDA approval must be obtained for exports of unapproved
      products subject to PMA requirements if these export conditions are not met.




There
      can
      be no assurance that Trinity Biotech will meet statutory requirements and/or
      receive required export approval on a timely basis, if at all, for the marketing
      of its products outside the United States.




*Regulation
      outside the United States*


Distribution
      of Trinity Biotech’s products outside of the United States is also subject to
      foreign regulation. Each country’s regulatory requirements for product approval
      and distribution are unique and may require the expenditure of substantial
      time,
      money, and effort. There can be no assurance that new laws or regulations will
      not have a material adverse effect on Trinity Biotech’s business, financial
      condition, and results of operation. The time required to obtain needed product
      approval by particular foreign governments may be longer or shorter than that
      required for FDA clearance or approval. There can be no assurance that Trinity
      Biotech will receive on a timely basis, if at all, any foreign government
      approval necessary for marketing its products.




***Organisational
      Structure***


Trinity
      Biotech plc and its subsidiaries (“the Group”) is a manufacturer of diagnostic
      test kits and instrumentation for sale and distribution worldwide. Trinity
      Biotech’s executive offices are located at Bray, Co. Wicklow, Ireland while its
      research and development, manufacturing and marketing activities are principally
      conducted at Trinity Biotech Manufacturing Limited, based in Bray, Co. Wicklow,
      Ireland, Trinity Biotech (UK Sales) Limited, based in Berkshire England, Trinity
      Biotech GmbH, based in Lemgo, Germany, and at Trinity Biotech (USA), MarDx
      Diagnostics Inc, Primus Corporation and Biopool US Inc. based in Jamestown,
      New
      York State, Carlsbad, California, Kansas City, Missouri and Berkeley Heights,
      New Jersey respectively. The Group’s distributor of raw materials for the life
      sciences industry, Fitzgerald Industries, is based in Boston, Massachusetts
      and
      Bray, Co. Wicklow, Ireland.





For
      a
      more comprehensive schedule of the subsidiary undertakings of the Group please
      refer to Item 18, note 32 to the consolidated financial statements.





***Property,
      Plant and Equipment***


Trinity
      Biotech has six manufacturing sites worldwide, three in the US (Jamestown,
      NY,
      Kansas City, MO and Carlsbad, CA), one in Bray, Co. Wicklow, Ireland, one in
      Umea, Sweden and one in Lemgo, Germany. The US and Irish facilities are each
      FDA
      and ISO registered facilities. As part of its ongoing commitment to quality,
      Trinity Biotech was granted the latest ISO 9001: 2000 and ISO 13485: 2003
      certification. This certificate was granted by the Underwriters Laboratory,
      an
      internationally recognised notified body. It serves as external verification
      that Trinity Biotech has an established an effective quality system in
      accordance with an internationally recognised standard. By having an established
      quality system there is a presumption that Trinity Biotech will consistently
      manufacture products in a controlled manner. To achieve this certification
      Trinity Biotech performed an extensive review of the existing quality system
      and
      implemented any additional regulatory requirements.





13


Trinity
      Biotech’s manufacturing and research and development facilities consisting of
      approximately 45,000 square feet are located at IDA Business Park, Bray, Co.
      Wicklow, Ireland. This facility is ISO 9001 approved and was purchased in
      December 1997. The facilities include offices, research and development
      laboratories, production laboratories, cold storage and drying rooms and
      warehouse space. Trinity Biotech spent US$4.2 million buying and fitting out
      the
      facility. In December 1999, the Group sold the facility for net proceed of
      US$5.2 million and leased it back from the third party purchaser for 20 years.
      The current annual rent which is reviewed every five years is set at €479,000
      (US$634,000).





Trinity
      Biotech has entered into a number of related party transactions with JRJ
      Investments (“JRJ”), a partnership owned by Mr O’Caoimh and Dr Walsh, directors
      of the Company, to
      provide current and potential future needs for the Group’s manufacturing and
      research and development facilities, located at IDA Business Park, Bray, Co.
      Wicklow, Ireland. In July 2000, Trinity Biotech entered into a 20 year lease
      with JRJ for a 25,000 square foot warehouse adjacent to the existing facility
      at
      a current annual rent of €275,000 (US$364,000). In November 2002, Trinity
      Biotech entered into an agreement for a 25 year lease with JRJ, for 16,700
      square feet of offices at an annual rent of €381,000 (US$504,000), payable from
      2004. In December 2006, Trinity Biotech has agreed to enter into a
      further
      25 year lease for an additional 43,000 square foot manufacturing facility
      adjacent to the existing facilities at an annual rent of €484,000 (US$641,000).
      (See Item 7 - Major Shareholders and Related Party Transactions).





Trinity
      Biotech USA operates from a 24,000 square foot FDA and ISO 9001 approved
      facility in Jamestown, New York. The facility was purchased by Trinity Biotech
      USA in 1994. Additional warehousing space is also leased in upstate New York
      at
      an annual rental charge of US$115,000.





MarDx
      operates from two facilities in Carlsbad, California. The first facility
      comprises 21,500 square feet and is the subject of a five year lease, renewed
      in
      2006, at an annual rental cost of US$244,000. The second adjacent facility
      comprises 14,500 square feet and is the subject of a five year lease, renewed
      in
      2006, at an annual rental cost of US$160,000.





Trinity
      Biotech also operates from an additional facility located in Umea, Sweden.
      The
      Umea facility is 8,712 square feet and the annual rental is US$129,000. The
      lease, renewed in December 2006, expires in December 2008.





Trinity
      Biotech GmbH owns an ISO 9001 approved manufacturing and office facility of
      78,000 square feet in Lemgo, Germany.





Trinity
      Biotech also has sales and marketing functions which operate from additional
      premises in the UK and France. Trinity Biotech leases two units in Berkshire,
      UK, at an annual rent of £91,000 (US$178,000). In 2006, Trinity Biotech entered
      into a lease for a 5,750 square foot premises in France, at an annual rent
      of
€46,000 (US$61,000).





Additional
      office space is leased by the Group in Ireland, Kansas City, Missouri, Concord,
      Massachusetts and New  Jersey
      at
      an annual cost of US$121,000, US$100,000, US$109,000 and US$154,000,
      respectively.





***Capital
      expenditures and divestitures***


Following
      the acquisition of the haemostasis product line of bioMerieux, the Group is
      currently expanding its operations in Ireland. Significant capital expenditure
      will be undertaken as part of the integration of the manufacture of this product
      line with the existing manufacturing operations being carried out in Ireland.
      Most of the expenditure on this integration will be carried out during
      2007.





Trinity
      Biotech has no divestitures or other significant capital expenditures in
      progress.





**Item
      5**


***Operating
      and Financial Review and Prospects***





***Operating
      Results***


Trinity
      Biotech’s consolidated financial statements include the attributable results of
      Trinity Biotech plc and all its subsidiary undertakings collectively. This
      discussion covers the years ended December 31, 2006, December 31, 2005 and
      December 31, 2004, and should be read in conjunction with the consolidated
      financial statements and notes thereto appearing elsewhere in this Form 20-F.
      The financial statements have been prepared in accordance with IFRS as adopted
      by the EU which differs from US GAAP as indicated in Note 33 to the consolidated
      financial statements.


14


***Overview***


Trinity
      Biotech develops, manufactures and markets diagnostic test kits used for the
      clinical laboratory and point of care (“POC”) segments of the diagnostic market.
      These test kits are used to detect infectious diseases, sexually transmitted
      diseases, blood disorders and autoimmune disorders. The Group markets over
      500
      different diagnostic products in approximately 80 countries. In addition, the
      Group manufactures its own and distributes third party haemostasis and
      infectious diseases diagnostic instrumentation. The Group, through its
      Fitzgerald operation, is also a significant provider of raw materials to the
      life sciences industry.





***Factors
      affecting our results***


The
      global diagnostics market is growing due to, among other reasons, the ageing
      population and the increasing demand for rapid tests in a clinical
      environment.





Our
      revenues are directly related to our ability to identify high potential products
      while they are still in development and to bring them to market quickly and
      effectively. Efficient and productive research and development is crucial in
      this environment as we, like our competitors, search for effective and
      cost-efficient solutions to diagnostic problems. The growth in new technology
      will almost certainly have a fundamental effect on the diagnostics industry
      as a
      whole and upon our future development. For further information about the Group’s
      principal products, principal markets and competition please refer to Item
      4,
“Information on the Company”.





***Critical
      Accounting Policies and Estimates***


Our
      discussion and analysis of our financial condition and results of operations
      are
      based upon our consolidated financial statements, which have been prepared
      in
      accordance with International Financial Reporting Standards (IFRS), as adopted
      by the EU. The preparation of these financial statements requires us to make
      estimates and judgements that affect the reported amount of assets, liabilities,
      revenues and expenses, and related disclosure of contingent assets and
      liabilities.





On
      an
      on-going basis, we evaluate our estimates, including those related to intangible
      assets, contingencies and litigation. We base our estimates on historical
      experience and on various other assumptions that are believed to be reasonable
      under the circumstances, the results of which form the basis for making
      judgements about the carrying values of assets and liabilities that are not
      readily apparent from other sources. Actual results may differ from these
      estimates under different assumptions or conditions.





We
      believe the critical accounting policies described below reflect our more
      significant judgements and estimates used in the preparation of our consolidated
      financial statements.





*Research
      and development expenditure*


Under
      IFRS as adopted by the EU, we write-off research and development expenditure
      as
      incurred, with the exception of expenditure on projects whose outcome has been
      assessed with reasonable certainty as to technical feasibility, commercial
      viability and recovery of costs through future revenues. Such expenditure is
      capitalised at cost within intangible assets and amortised over its expected
      useful life of 15 years, which commences when commercial production starts.





Factors
      which impact our judgement to capitalise certain research and development
      expenditure include the degree of regulatory approval for products and the
      results of any market research to determine the likely future commercial success
      of products being developed. We review these factors each year to determine
      whether our previous estimates as to feasibility, viability and recovery should
      be changed. During 2006 and 2005 there were no changes in the assumptions
      regarding the degree of regulatory approval for any of the projects being
      undertaken. The Group did make changes to the estimates used to determine the
      future commercial success of the projects in the normal course of business
      by
      including updated revenue estimates. However, these changes in revenue estimates
      did not result in changes in the carrying value of any of the development costs
      capitalised during or prior to 2006. At December 31, 2006 the carrying value
      of
      capitalised development costs was US$17,290,000 (2005: US$11,853,000) (note
      11).
      The increase in 2006 was attributable to development costs of US$5,862,000
      being
      capitalised during 2006, foreign exchange movements of US$43,000 and partially
      offset by amortisation of US$468,000. Given the expected cash flows that will
      result from the successful conclusion of the Company’s on-going development
      projects when compared to their respective carrying values, any reasonably
      possible change in estimate would not result in a change to these carrying
      values. In the event that any of the projects cannot be completed this would
      result in a write off of the balance in question. The projects which are
      currently in progress have a range of carrying values up to
      US$3,304,000.




15


*Impairment
      of intangible assets and goodwill*


Definite
      lived intangible assets are reviewed for indicators of impairment annually
      while
      goodwill and indefinite lived assets are tested for impairment annually,
      individually or at the cash generating unit level. Factors considered important,
      as part of an impairment review, include the following:




•
            
            Significant
                underperformance relative to expected historical or projected future
                operating results;•
            
            Significant
                changes in the manner of our use of the acquired assets or the strategy
                for our overall business;•
            
            Obsolescence
                of products;•
            
            Significant
                decline in our stock price for a sustained period; and our market
                capitalisation relative to net book value.




When
      we
      determine that the carrying value of intangibles, non-current assets and related
      goodwill may not be recoverable based upon the existence of one or more of
      the
      above indicators of impairment, any impairment is measured based on our
      estimates of projected net discounted cash flows expected to result from that
      asset, including eventual disposition. Our estimated impairment could prove
      insufficient if our analysis overestimated the cash flows or conditions change
      in the future. As part of the impairment review for 2006 and 2005, updated
      estimates of cash flows from sales were employed based on the latest sales
      and
      forecast information available. These revised estimates did not result in any
      impairment of intangible assets, non-current assets or related goodwill. In
      the
      event that there was a 10% variation in the assumed level of future growth
      in
      cashflows from sales, which would represent a reasonably likely range of
      outcomes, no impairment of assets would occur in any of the Group’s cash
      generating units at December 31, 2006 and December 31, 2005. Similarly if there
      was a 10% variation in the discount rate used to calculate the potential
      impairment of the carrying values, which would represent a reasonably likely
      range of outcomes, no impairment of assets would occur at December 31, 2006
      and
      December 31, 2005. See Item 18, note 11 to the consolidated financial
      statements.




*Allowance
      for slow-moving and obsolete inventory*


We
      evaluate the realisability of our inventory on a case-by-case basis and make
      adjustments to our inventory provision based on our estimates of expected
      losses. We write-off any inventory that is approaching its “use-by” date and for
      which no further re-processing can be performed. We also consider recent trends
      in revenues for various inventory items and instances where the realisable
      value
      of inventory is likely to be less than its carrying value. Given the allowance
      is calculated on the basis of the actual inventory on hand at the particular
      balance sheet date, there were no material changes in estimates made during
      2005
      or 2006 which would have an impact on the carrying values of inventory during
      those periods.





At
      December 31, 2006 our allowance for slow moving and obsolete inventory was
      US$7,284,000 which represents approximately 13.8% of gross inventory value.
      This
      compares with US$3,654,000, or approximately 9.1% of gross inventory value,
      at
      December 31, 2005 (see Item 18, note 14 to the consolidated financial
      statements).  The
      change in the estimated allowance for slow moving and obsolete inventory as
      a
      percentage of gross inventory was principally due a provision put in place
      during 2006 in relation to the discontinuation of a number of haemostasis
      products following the acquisition of the haemostasis product line of
      bioMerieux. In the event that the estimate of the provision required for slow
      moving and obsolete inventory was to increase or decrease by 2% of gross
      inventory, which would represent a reasonably likely range of outcomes, then
      a
      change in allowance of US$1,057,000 at December 31, 2006 (2005: US$802,000)
      would result.





*Allowance
      for impairment of receivables*


We
      make
      judgements as to our ability to collect outstanding receivables and where
      necessary make allowances for impairment. Such impairments are made based upon
      a
      specific review of all significant outstanding receivables. In determining
      the
      allowance, we analyse our historical collection experience and current economic
      trends. If the historical data we use to calculate the allowance for impairment
      of receivables does not reflect the future ability to collect outstanding
      receivables, additional allowances for impairment of receivables may be needed
      and the future results of operations could be materially affected. Given the
      specific manner in which the allowance is calculated, there were no material
      changes in estimates made during 2006 or 2005 which would have an impact on
      the
      carrying values of receivables in these periods. At December 31, 2006, the
      allowance was US$1,074,000 which represents approximately 0.9% of Group
      revenues. This compares with US$587,000 at December 31, 2005 which represents
      approximately 0.6% of Group revenues (see Item 18, note 15 to the consolidated
      financial statements). In the event that this estimate was to increase or
      decrease by 0.4% of Group revenues, which would represent a reasonably likely
      range of outcomes, then a change in the allowance of US$475,000 at December
      31,
      2006 (2005: US$394,000) would result.


16





*Accounting
      for income taxes*


Significant
      judgement is required in determining our worldwide income tax expense provision.
      In the ordinary course of a global business, there are many transactions and
      calculations where the ultimate tax outcome is uncertain. Some of these
      uncertainties arise as a consequence of revenue sharing and cost reimbursement
      arrangements among related entities, the process of identifying items of revenue
      and expense that qualify for preferential tax treatment and segregation of
      foreign and domestic income and expense to avoid double taxation. Although
      we
      believe that our estimates are reasonable, no assurance can be given that the
      final tax outcome of these matters will not be different than that which is
      reflected in our historical income tax provisions and accruals. Such differences
      could have a material effect on our income tax provision and profit in the
      period in which such determination is made. Deferred tax assets and liabilities
      are determined using enacted or substantially enacted tax rates for the effects
      of net operating losses and temporary differences between the book and tax
      bases
      of assets and liabilities.





While
      we
      have considered future taxable income and ongoing prudent and feasible tax
      planning strategies in assessing whether deferred tax assets can be recognised,
      there is no assurance that these deferred tax assets may be realisable. The
      extent to which recognised deferred tax assets which are recognised are not
      realisable could have a material adverse impact on our income tax provision
      and
      net income in the period in which such determination is made. In addition,
      we
      operate within multiple taxing jurisdictions and are subject to audits in these
      jurisdictions. These audits can involve complex issues that may require an
      extended period of time for resolution. In management's opinion, adequate
      provisions for income taxes have been made.





Item
      18,
      note 12 to the consolidated financial statements outlines the basis for the
      deferred tax assets and liabilities and Schedule II includes a movement on
      the
      valuation allowances for income taxes during the period. There was no material
      changes in estimates used to calculate the income tax expense provision during
      2006 or 2005.





**Impact
      of Recently Issued Accounting Pronouncements**


The
      consolidated financial statements have been prepared in accordance with
      International Financial Reporting Standards (“IFRS”) as adopted by the EU. IFRS
      as adopted by the EU differ in certain respects from IFRS as issued by the
      International Accounting Standards Board (“IASB”). However, the consolidated
      financial statements for the periods presented would be no different had we
      applied IFRS as issued by the IASB as all standards issued by the IASB with
      effective dates up to December 31, 2006 have been adopted by the EU. During
      2006, the IASB and the International Financial Reporting Interpretations
      Committee (“IFRIC”) issued additional standards, interpretations and amendments
      to existing standards which are effective for periods starting after the date
      of
      these financial statements and which have not yet been adopted by the EU. A
      list
      of these additional standards, interpretations and amendments, and the potential
      impact on the financial statements of the Group, is outlined in Item 18 *Financial
      Statements,* note
      1(z).





***Recently
      Issued US GAAP Accounting Pronouncements***


The
      Group
      has considered the impact of recently issued accounting pronouncements under
      US
      GAAP. The Group’s consideration is outlined in Item 18 *Financial
      Statements* ,
      note
      33.





17


***Results
      of Operations***


***Year
      ended December 31, 2006 compared to the year ended December 31,
      2005***


*The
      following compares our results in the year ended December 31, 2006 to those
      of
      the year ended December 31, 2005 under IFRS as adopted by the EU. Our analysis
      is divided as follows:*





*1.*  *Overview*


*2.*  *Revenues*


*3.*  *Operating
      Expenses*


*4.*  *Retained
      Profit*





***1.
      Overview***





In
      2006
      consolidated revenues increased by US$20.1 million, which represents a growth
      rate of 20.4%. In 2006 haemostasis became the Group’s most significant product
      line representing 39% of product revenues. The remaining revenues came from
      the
      infectious diseases (35%), point of care (13%) and clinical chemistry (13%)
      product lines. Geographically, 51% of sales were generated in the Americas,
      29%
      in Europe and 20% in the rest of the world.





The
      gross
      margin for the year ended December 31, 2006 was 43%. Following the acquisition
      of the haemostasis product line of bioMerieux, Trinity Biotech sought to combine
      the range of products acquired with the Group’s existing product range. As part
      of this process it was decided to discontinue various existing products and
      this
      resulted in a US$5.8 million provision against the existing inventory of the
      Group. Excluding the impact of the US$5.8 million inventory provision, the
      gross
      margin was 48% which is consistent with the gross margin for the year ended
      December 31, 2005.





Operating
      profit decreased by 71%, primarily due to the impact of the US$5.8 million
      inventory provision. Excluding the impact of this inventory write-off the
      operating profit increased by 17% primarily due to increased sales. However,
      the
      impact of increased sales, which grew by 20%, was offset by increased selling,
      general & administrative (SG&A) and research and development (R&D)
      costs. This caused the operating margin, excluding the impact of the inventory
      write off, to remain at the 2005 level of 7%.





The
      profit for the year decreased by 38% primarily due to the impact of the
      inventory provision (compared to a decrease of 71% in operating profit). The
      lower level of decrease in profit of the year compared to the level of decrease
      in operating profit is due to the impact of higher net interest financing costs
      in 2006 being more than offset by the impact of an overall income tax credit.
      Excluding the after tax impact of the inventory write-off, the increase in
      profit for the year ended December 31, 2006 was US$2,224,000, an increase of
      42%.





***2.
      Revenues***





The
      Group’s revenues consist of the sale of diagnostic kits and related
      instrumentation and the sale of raw materials to the life sciences industry.





Revenues
      on the sale of the above products are generally recognised on the basis of
      shipment to customers. The Group ships its products on a variety of freight
      terms, including ex-works, CIF (carriage including freight) and FOB (free on
      board), depending on the specific terms agreed with customers. In cases where
      the Group ships on terms other than ex-works, the Group does not recognise
      the
      revenue until its obligations have been fulfilled in accordance with the
      shipping terms.





No
      right
      of return exists in relation to product sales except in instances where
      demonstrable product defects occur. The Group has defined procedures for dealing
      with customer complaints associated with such product defects as they arise.





The
      Group
      also derives a portion of its revenues from leasing infectious diseases and
      haemostasis diagnostic instruments to customers. In cases where the risks and
      rewards of ownership of the instrument passes to the customer, the fair value
      of
      the instrument is recognised at the time of sale matched by the related cost
      of
      sale. In the case of operating leases of instruments which typically involve
      commitments by the customer to pay a fee per test run on the instruments,
      revenue is recognised on the basis of customer usage of the instruments. In
      certain markets, the Group also earns revenue from servicing infectious diseases
      and haemostasis instrumentation located at customer premises.





18


*Revenues
      by Product Line*





The
      following table sets forth selected sales data for each of the periods
      indicated.





**Year
                ended December 31,****2006**
            **2005****US$’000**
            **US$’000**
            **%
                Change****Revenues**Infectious
                diseases
            42,051
            44,078
            (5%)Haemostasis
            46,476
            29,766
            56%Clinical
                Chemistry
            14,868
            11,880
            25%Point
                of Care
            15,279
            12,836
            19%**Total**
            **118,674**
            **98,560**
            **20%**





Trinity
      Biotech’s consolidated revenues for the year ended December 31, 2006 were
      US$118,674,000 compared to consolidated revenues of US$98,560,000 for the year
      ended December 31, 2005, which represents an overall increase of US$20,114,000.





*Infectious
      Diseases*


Sales
      of
      infectious diseases products have decreased by US$2,027,000. This decrease
      is
      principally due to a reduction in sales of US$2,338,000 to Wampole. For
      further information relating to this matter please refer to Item 8 “Legal
      Proceedings”. This decrease was partially offset by an increase of US$311,000
      which is attributable to the net increase in non - Wampole sales over a wide
      range of infectious diseases products.





*Haemostasis
      Revenues*


The
      net
      increase in haemostasis revenues of US$16,710,000 is principally attributable
      to
      the impact of the acquisition of the haemostasis product line of bioMerieux
      in
      June 2006 (US$20.9 million), which has been offset by a decline in existing
      sales compared to 2005.





*Clinical
      Chemistry Revenues*


The
      increase in clinical chemistry revenues of US$2,988,000 is principally due
      to
      increased sales arising from the full year impact of the acquisition of Primus
      in July 2005. Primus specialises in the field of in vitro diagnostic testing
      for
      haemoglobin A1c and haemoglobin variants (used in the detection and monitoring
      of diabetes patients).





*Point
      of Care*


Sales
      of
      Point of Care products have increased by US$2,443,000 which is primarily
      attributable to increased sales of Trinity’s Unigold rapid HIV test in the USA
      and to a lesser extent increased sales of rapid HIV products in
      Africa.





*Revenues
      by Geographical Region*





The
      following table sets forth selected sales data, analysed by geographic region,
      based on location of customer:





**Year
                ended December 31,****2006**
            **2005****US$‘000**
            **US$’000**
            **%
                Change****Revenues**Americas
            60,748
            50,627
            20%Europe
            34,452
            25,301
            36%Asia/Africa
            23,474
            22,632
            4%**Total**
            **118,674**
            **98,560**
            **20%**







19


The
      US$10,121,000 increase in the Americas is primarily attributable to the
      following factors:


-
            The
                inclusion of sales of US$9,822,000 of bioMerieux haemostasis products
                from
                the date of acquisition in June
                2006;


-
            The
                full year impact of Primus, which was acquired in July 2005, of
                US$3,012,000;


-
            Partially
                offset by the US$2,338,000 reduction in sales to Wampole as discussed
                above.





The
      US$9,151,000 increase in Europe is primarily due to the impact of the
      acquisition of the haemostasis product line of bioMerieux acquired in June
      2006.





The
      US$842,000 increase in Asia/Africa is primarily due to the impact of the
      acquisition of the haemostasis product line of bioMerieux acquired in June
      2006
      (US$1,714,000). This was largely offset by lower sales of US$658,000 of
      Fitzgerald products following the particularly strong flu season in 2005.





For
      further information about the Group’s principal products, principal markets and
      competition please refer to Item 4, “Information on the Company”.





***3.
      Operating Expenses***





The
      following table sets forth the Group’s operating expenses.





**Year
                ended December 31,****2006**
            **2005****US$’000**
            **US$’000**
            **%
                Change**Revenues
            118,674
            98,560
            20%Cost
                of sales (including share-based payments )
            (62,090)
            (51,378)
            21%Cost
                of sales - inventory provision
            (5,800)
            -
            100%Gross
                profit
            50,784
            47,182
            8%Other
                operating income
            275
            161
            71%Research
                & development
            (6,696)
            (6,070)
            10%SG&A
                expenses
            (42,422)
            (34,651)
            23%Operating
                profit
            **1,941**
            **6,622**
            **(71%)**





*Cost
      of sales*


Cost
      of
      sales (excluding the impact of the once-off US$5.8 million inventory provision)
      increased by US$10,712,000 from US$51,378,000 for the year ended December 31,
      2005 to US$62,090,000, for the year ended December 31, 2006, an increase of
      21%.
      This increase in cost of sales is broadly in line with the increase in revenues
      for the Group. Cost of sales excluding the US$5.8 million inventory provision
      for the year represents 52% of revenues, the same level as in 2005. See Revenues
      section above for details on movements in revenues during 2006.





The
      Group
      made a US$5.8 million inventory provision resulting from the acquisition of
      the
      haemostasis product line of bioMerieux in 2006. This arose from the process
      of
      combining the acquired bioMerieux range of products with the Group’s existing
      product range. As part of this process it was decided to discontinue various
      existing products, hence the requirement for the inventory
      provision.




*Gross
      Margin*


The
      gross
      margin for 2006 was 43%. Excluding the impact of the US$5.8 million inventory
      write-off the gross margin would have been 48%, the same level as in 2005.
      The
      gross margin for the first 6 months of 2006 was 49%. This fell to 47% in the
      second 6 months of 2006. This is largely due to the acquisition of the
      haemostasis product line of bioMerieux Inc., as haemostasis products tend to
      have a lower margin on average than the other Trinity Biotech product lines.





*Research
      and development*


Research
      and development expenditure increased to US$6,696,000 in 2006 compared to
      expenditure of US$6,070,000 in 2005. This represents 6% of consolidated
      revenues, which is consistent with 2005. For a consideration of the Company’s
      various R&D projects see “Research and Products under Development” in Item 5
      below.


20





*Selling,
      General & Administrative expenses (SG&A)*


The
      following table outlines the breakdown of SG&A expenses in 2006 compared to
      a similar breakdown for 2005.





**Year
                ended December 31,****2006**
              **US$’000**
            **2005**
              **US$’000**
            **Increase/**
              **(decrease)**
              **US$’000**
            **%
                Change**SG&A
                (excl. share-based payments and amortisation)
            38,719
            31,800
            6,919
            22%Share-based
                payments
            1,016
            1,048
            (32)
            (3%)Amortisation
            2,687
            1,803
            884
            49%**Total**
            **42,422**
            **34,651**
            **7,771**
            **23%**





*Selling
      General & Administrative Expenditure* (excluding share-based payments and amortisation)


SG&A
      (excluding share-based payments and amortisation) increased 22% or by
      US$6,919,000 from US$31,800,000 to US$38,719,000, which compares to revenue
      growth of 20% during the same period.





The
      principal reasons for the increase in SG&A expenses of US$6,919,000 in 2006,
      is as follows:


·
            Increased
                SG&A costs of US$3,901,000 in the USA. This is partially due to the
                full year impact of Primus which was acquired in July 2005 of
                US$2,524,000. The remaining increase of US$1,377,000 is mainly
                attributable to increased personnel and related costs following the
                acquisition of the haemostasis product line of
                bioMerieux;


·
            Increased
                SG&A costs in the Head Office/Irish operations of US$1,390,000. This
                is mainly due to a combination of strengthening of the Group’s marketing
                and central administration functions in conjunction with the increase
                in
                scale of the Group and level of activity of the Irish manufacturing
                operation;


·
            An
                increase of US$1,538,000 in the Group’s European operations (excluding
                Ireland). Of this increase US$363,000 related to the newly established
                direct sales operation in France. The remaining increase of US$1,175,000
                arose principally in Germany and UK mainly due to the increase in
                employee
                numbers and related costs associated with the expansion of these
                entities
                following the acquisition of the haemostasis product line of
                bioMerieux.





*Share-based
      payments*


The
      Group
      recorded a total charge to the income statement in 2006 of US$1,141,000 (2005:
      US$1,368,000) for share-based payments. Of the 2006 charge US$89,000 (2005:
      US$110,000) was charged against cost of sales. Of the remaining US$1,052,000,
      US$36,000 (2005: US$210,000) was charged against research and development
      expenses and US$1,016,000 (2005: US$1,048,000) was charged against selling
      and
      general administration expenses.





The
      expense represents the value of share options granted to directors and employees
      which is charged to the income statement over the vesting period of the
      underlying options. The Group has used a trinomial valuation model for the
      purposes of valuing these share options with the key inputs to the model being
      the expected volatility over the life of the options, the expected life of
      the
      option and the risk free rate. The expense for 2006 is broadly in line with
      that
      of 2005 and is due to the impact of the newly issued options being offset by
      a
      reduction in the expense resulting from forfeiture and expiration of previous
      share options granted to employees and key management personnel. For further
      details refer to Item 18, note 19 to the consolidated financial
      statements.





*Amortisation*


The
      increase in amortisation of US$884,000 from US$1,803,000 to US$2,687,000 is
      largely attributable to the amortisation of intangible assets acquired as part
      of the Group’s acquisitions in 2005 and 2006. The impact of the full year of the
      acquisition of Primus and RDI, both of which were acquired in 2005, was
      US$172,000 whilst a further US$585,000 was amortised in relation to intangible
      assets valued on the acquisition of the haemostasis product line of bioMerieux
      and the direct selling operation in France in 2006.





The
      remaining increase of US$127,000 is mainly attributable to amortisation of
      development costs which were capitalised and are now being amortised over the
      expected life of the products to which they related.





21


***4.
      Profit for the year***





The
      following table sets forth selected income statement data for each of the
      periods indicated.


**Year
                ended December 31,****2006**
            **2005****US$‘000**
            **US$‘000**
            **%
                Change**Operating
                Profit
            1,941
            6,622
            (71%)**Net
                financing costs**
            **(1,489)**
            **(669)**
            **123%**Profit
                before tax
            452
            5,953
            (92%)**Income
                tax credit/(expense)**
            **2,824**
            **(673)**
            **(520%)**Profit
                of the year
            3,276
            5,280
            (38%)





*Net
      Financing Costs*


Net
      financing costs increased to US$1,489,000 compared to US$669,000 in 2005. This
      increase is primarily due to the impact of the additional debt financing taken
      on by the Group during 2006 due to the acquisition of the haemostasis line
      of
      bioMerieux. The loan facility was amended in July 2006, increasing the original
      loan facility by US$30 million from US$13,340,000 to US$43,340,000. The
      increased interest expense in relation to this additional debt was offset by
      lower interest charges in relation the Group’s convertible notes as they were
      being repaid during 2006 and an increase in deposit interest earned during
      the
      year of US$775,000 due to a combination of higher cash balances and higher
      interest rates.





*Taxation*


The
      Group
      recorded a net tax credit of US$2,824,000 in the year ended December 31, 2006.
      This compared to a tax charge of US$673,000 for 2005. This represented an
      increase in current tax of US$16,000 which is more than offset by a decrease
      in
      deferred tax of US$3,513,000. The increase in current tax is primarily
      attributable to an increase in current year profits in the Group’s Irish
      operations. The net deferred tax credit is primarily attributable to an increase
      in deferred tax assets arising from current year losses in certain of the
      Group’s subsidiary undertakings. The increase in deferred tax assets was
      partially offset by an increase in deferred tax liabilities attributable to
      an
      upfront deduction for certain development expenditure and licence fees,
      primarily in Ireland, for items that have not as yet been expensed in the
      Group’s income statement. For further details on the Group’s tax charge please
      refer to Item 18, note 8, Income Tax Expense/ (Credit), and note 12, Deferred
      Tax Assets and Liabilities, to the consolidated financial
      statements.





*Profit
      for the year*


Profit
      for the year decreased by US$2,004,000, from US$5,280,000 to US$3,276,000.
      Excluding the after tax impact of the once-off inventory provision of
      US$5,800,000, the profit for the year was US$7,504,000, an increase of
      US$2,224,000 (42%) and represents 6% of consolidated revenues, which is the
      same
      level as in 2005.





***Results
      of Operations***


***Year
      ended December 31, 2005 compared to year ended December 31,
      2004***


*The
      following compares our results in the year ended December 31, 2005 to those
      of
      the year ended December 31, 2004 under IFRS as adopted by the EU.*


*Our
      analysis is divided as follows:*





*1.*  *Overview*


*2.*  *Revenues*


*3.*  *Operating
      Expenses*


*4.*  *Retained
      Profit*





***1.
      Overview***





In
      US
      Dollars, consolidated revenues increased by 23% through a combination of
      increased sales of existing products (11%) and sales from acquisitions (12%).
      Geographically, 51% of sales were generated in the USA, 26% in Europe and 23%
      in
      the rest of the world.





The
      gross
      margin for the year ended December 31, 2005 was 48% compared to 50% for the
      year
      ended December 31, 2004. The decrease in gross margin is primarily explained
      by
      a high level of sales of infectious diseases and haemostasis instrumentation.
      Sales of instrumentation traditionally have lower margins than the accompanying
      reagents and consumables.


22




Operating
      profit increased by 7%, primarily due to the impact of increased sales. However,
      the impact of sales, which grew by 23%, was partially offset by lower gross
      margins, increased selling, general & administrative (SG&A) costs, the
      impact of share based payments and increased amortisation charges. The
      combination of the above factors caused the operating margin to fall from 8%
      in
      2004 to 7% in 2005.





Following
      the introduction of IFRS as adopted by the EU, the Group recorded a charge
      to
      the income statement of US$1,368,000 in 2005 for share-based payments. This
      compared to US$758,000 in 2004.





Retained
      profit for the period decreased by 8% (compared to an increase of 7% for
      operating profit). The decrease in retained profit compared to the increase
      in
      operating profit is due to the impact of increased financing costs primarily
      attributable to a higher effective rate of interest being applied to convertible
      debt and a higher effective rate of taxation compared to 2004.





***2.
      Revenues***





The
      Group’s revenues consist of the sale of diagnostic kits and related
      instrumentation and the sale of raw materials to the life sciences industry.
      Revenues on the sale of the above products are generally recognised on the
      basis
      of shipment to customers. The Group ships its products on a variety of freight
      terms, including ex-works, CIF (carriage including freight) and FOB (free on
      board), depending on the specific terms agreed with customers. In cases where
      the Group ships on terms other than ex-works, the Group does not recognise
      the
      revenue until its obligations have been fulfilled in accordance with the
      shipping terms.





No
      right
      of return exists in relation to product sales except in instances where
      demonstrable product defects occur. The Group has defined procedures for dealing
      with customer complaints associated with such product defects as they arise.
      Very occasionally, sales transactions are made on extended credit terms. In
      these instances, in accordance with IFRS as adopted by the EU and US GAAP,
      this
      revenue is recognised when the amounts fall due rather than at the date of
      shipment.





The
      Group
      also derives a portion of its revenues from leasing infectious diseases and
      haemostasis diagnostic instruments to customers. In cases where the risks and
      rewards of ownership of the instrument passes to the customer, the fair value
      of
      the instrument is recognised at the time of sale matched by the related cost
      of
      sale. In the case of operating leases of instruments which typically involve
      commitments by the customer to pay a fee per test run on the instruments,
      revenue is recognised on the basis of customer usage of the instruments. In
      certain markets, the Group also earns revenue from servicing infectious diseases
      and haemostasis instrumentation located at customer premises.





*Revenues
      by Product Line*





The
      following table sets forth selected sales data for each of the periods
      indicated.





**Year
                ended December 31,****2005**
            **2004****US$’000**
            **US$’000**
            **%
                Change****Revenues**Infectious
                diseases
            44,078
            36,402
            21Haemostasis
            29,766
            26,836
            11Clinical
                Chemistry
            11,880
            6,963
            71Point
                of Care
            12,836
            9,807
            31**Total**
            **98,560**
            **80,008**
            **23**





Trinity
      Biotech’s consolidated revenues for the year ended December 31, 2005 were
      US$98,560,000 compared to consolidated revenues of US$80,008,000 for the year
      ended December 31, 2004.





23


*Infectious
      Diseases*


Sales
      of
      infectious diseases products have increased by US$7,676,000. Of this
      US$8,983,000 is due to increased sales arising from the full year impact of
      the
      acquisition of Fitzgerald made in April 2004 together with the acquisition
      of
      RDI during 2005. This increase was partially offset by a reduction in sales
      of
      US$1,559,000 to Wampole. For
      further information relating to this matter please refer to Item 8 “Legal
      Proceedings”. The remaining increase of US$252,000 is attributable to the net
      increase in non-Wampole sales over a wide range of products.





*Haemostasis
      Revenues*


The
      increase in haemostasis revenues of US$2,930,000 is attributable to increased
      sales of the Company’s Biopool/Amax range of products. In particular the
      increase was attributable to an increase in the sales of the Company’s Amax
      range of haemostasis instruments (US$2,017,000). The remaining increase of
      US$913,000 is due to an increase in non-instrumentation products, namely
      reagents, consumables and service revenues.





*Clinical
      Chemistry Revenues*


The
      increase in clinical chemistry revenues of US$4,917,000 is primarily
      attributable to the acquisition of Primus in July 2005. Primus specialises
      in
      the field of in vitro diagnostic testing for haemoglobin A1c and haemoglobin
      variants.





*Point
      of Care*


Sales
      of
      Point of Care have increased by US$3,029,000 which is primarily attributable
      to
      increased sales of rapid HIV products to Africa and sales of Trinity’s Unigold
      rapid HIV test in the USA.





*Revenues
      by Geographical Region*





The
      following table sets forth selected sales data, analysed by geographic region,
      based on location of customer:





**Year
                ended December 31,****2005**
            **2004****US$’000**
            **US$’000**
            **%
                Change****Revenues**USA
            50,627
            41,380
            22Europe
            25,301
            22,718
            11Asia/Africa
            22,632
            15,910
            42**Total**
            **98,560**
            **80,008**
            **23**





The
      US$9,247,000 increase in the US is primarily attributable to the following
      factors:


-
            The
                full year impact of Fitzgerald which was acquired in 2004, plus a
                further
                increase due to the acquisition of RDI (now part of Fitzgerald) in
                2005
                resulting in an overall increase in Fitzgerald sales in the USA of
                US$4,664,000;


-
            The
                inclusion of sales of US$2,900,000 of Primus products in the US from
                the
                date of acquisition on July 19,
                2005;


-
            An
                increase of US$1,080,000 in sales of Adaltis products partially
                attributable to 2005 being the first full year since its acquisition
                in
                April 2004 ;


-
            Sales
                of existing product ranges in the USA (excluding sales to Wampole)
                have
                increased by US$2,162,000. This is partially offset by the US$1,559,000
                reduction in sales to Wampole as discussed above.





The
      US$2,583,000 increase in Europe is due the full year impact of the acquisition
      of Fitzgerald and the impact of the RDI acquisition in 2005 (US$824,000), sales
      of Primus products of US$1,386,000 with the remaining increase of US$373,000
      arising principally in relation to direct sales in the United
      Kingdom.





The
      US$6,722,000 increase in Asia/Africa is primarily due to increased revenues
      in
      Fitzgerald of US$3,495,000 due to the full year impact of the business acquired
      during 2004, the impact of RDI and particularly strong sales of flu product
      in
      the Japanese market, sales of Primus products of US$1,594,000 with the remaining
      increase of US$1,633,000 being primarily attributable to increased sales of
      HIV
      products to Africa.





For
      further information about the Group’s principal products, principal markets and
      competition please refer to Item 4, “Information on the
      Company”.


24


***3.
      Operating Expenses***





The
      following table sets forth the Group’s operating expenses.





**Year
                ended December 31,****2005**
            **2004****US$’000**
            **US$’000**
            **%
                Change**Revenues
            98,560
            80,008
            23Cost
                of sales (including share-based payments)
            (51,378)
            (40,047)
            28Other
                operating income
            161
            302
            (47)Research
                & development
            (6,070)
            (4,744)
            28SG&A
                expenses
            (34,651)
            (29,332)
            18Operating
                profit
            **6,622**
            **6,187**
            **7**





*Cost
      of sales*


Trinity
      Biotech’s consolidated cost of sales increased 28% or by US$11,331,000 from
      US$40,047,000 for the year ended December 31, 2004 to US$51,378,000 for the
      year
      ended December 31, 2005. The increase in cost of sales is attributable to the
      incremental cost of sales associated with the 2005 acquisitions of RDI and
      Primus US$4,873,000 with the balance of US$6,458,000 attributable to the
      increased cost of sales associated with higher sales levels of the Group’s
      existing product ranges. See Revenues section above for details on movements
      in
      revenues during 2005.




*Research
      and development*


Research
      and development (“R&D”) expenditure increased to US$6,070,000 in 2005. This
      represents 6.2% of consolidated revenues compared to expenditure of US$4,744,000
      or 5.9% of consolidated revenues in 2004. For a consideration of the Group’s
      various R&D projects see “Research and Products under Development” in Item
      5.





*Selling,
      General & Administrative expenses*


The
      following table outlines the breakdown of SG&A expenses in 2005 compared to
      a similar breakdown for 2004.





**Year
                ended December 31,****2005**
              **US$’000**
            **2004**
              **US$’000**
            **Increase**
              **US$’000**
            **%
                Change**SG&A
                (excl. share-based payments and amortisation)
            31,800
            27,640
            4,160
            15Share-based
                payments
            1,048
            581
            467
            80Amortisation
            1,803
            1,111
            692
            62**Total**
            **34,651**
            **29,332**
            **5,319**
            **18**





*Selling
      General & Administrative Expenditure (SG&A)* (excluding share-based payments and amortisation)


SG&A
      (excluding share-based payments and amortisation) increased 15% or by
      US$4,160,000 from US$27,640,000 to US$31,800,000, which compares to revenue
      growth of 23% during the same period. The lower growth in SG&A expenditure
      compared with revenue growth is attributable to economies of scale, particularly
      in relation to the Group’s selling activities and central administration costs.
      The increase in SG&A costs in 2005 are primarily due to the impact of the
      acquisitions of Primus and RDI in 2005 and the full year impact of Fitzgerald
      and Adaltis both of which were acquired in 2004.





A
      detailed analysis of this increase in SG&A expenses of US$4,160,000 in 2005
      is as follows:


·
            Increased
                SG&A expenditure in relation to Fitzgerald (US$1,391,000). 2005
                represented the first full year for Fitzgerald compared to 2004 when
                the
                results were included from April 2004 (the date of acquisition).
                The
                increase in costs was also attributable to the acquisition of RDI,
                whose
                activities were absorbed into the Fitzgerald organisation from March
                2005.


·
            Increased
                SG&A costs of US$1,164,000 in the USA. This was mainly attributable
                to
                costs in relation to Primus whose results have been incorporated
                from the
                date of acquisition on July 19, 2005. The impact of Primus has partially
                been offset by cost savings in the existing US distribution and
                manufacturing entities.





25


·
            Increased
                SG&A costs in the Head Office/European operations (excluding
                Fitzgerald and the UK) of US$896,000. This is mainly due to a combination
                of


(i)
      increased
      marketing costs in conjunction with the growth in the business;


(ii)
      increased costs associated with the first time implementation of International
      Financial Reporting Standards, as adopted by the EU;


(iii)
      increased stock exchange costs associated with Trinity Biotech’s listing on the
      Nasdaq National Market;


(iv)
      increased costs associated with the Group’s preparation for compliance with
      Section 404 of the Sarbanes-Oxley Act 2002; as partially offset by


(v)
      lower
      costs associated with implementing the CE marking process as required under
      the
      In Vitro Diagnostic Directive when compared with 2004.


·
            An
                increase of US$263,000 in the UK. The UK direct sales operation,
                which was
                established in 2002, was expanded during 2004. 2005 represents the
                first
                full year impact of increasing the sales force in late
                2004.


·
            A
                reduction in foreign exchange gains in 2005 compared to 2004 (US$446,000).





*Amortisation*


The
      increase in amortisation of US$692,000 from US$1,111,000 to US$1,803,000 is
      largely attributable to the amortisation of intangible assets acquired as part
      of the Group’s acquisitions in 2004 and 2005. The impact of the full year of the
      acquisition of Fitzgerald and Adaltis, both of whom were acquired in 2004 was
      US$154,000 whilst a further US$255,000 was amortised in relation to intangibles
      assets valued on the acquisition of Primus and RDI in 2005.





The
      remaining increase of US$283,000 is mainly attributable to amortisation of
      development costs which were capitalised and are now being amortised over the
      expected life of the products to which they related.





*Share-based
      payments*


Following
      the introduction of IFRS as adopted by the EU, the Group recorded a total charge
      to the income statement in 2005 of US$1,368,000 (2004: US$758,000) for
      share-based payments. Of the 2005 charge US$110,000 (2004: US$81,000) was
      charged against cost of sales. Of the remaining US$1,258,000, US$210,000 (2004:
      US$96,000) was charged against research and development expenses and
      US$1,048,000 (2004: US$581,000) was charged against selling and general
      administration expenses.





The
      expense represents the value of share options granted to directors and employees
      which is charged to the income statement over the vesting period of the
      underlying options. The Group has used a trinomial valuation model for the
      purposes of valuing these share options with the key inputs to the model being
      the expected volatility over the life of the options, the expected life of
      the
      option and the risk free rate. The increase in the expense for 2005 compared
      to
      2004 is due to the full year impact of the 3,162,824 options issued during
      2004
      plus the impact of a further 1,670,000 options issued during the course of
      2005.
      For further details refer to Item 18, note 19 to the Consolidated Financial
      Statements.





***4.
      Retained Profit***





The
      following table sets forth selected income statement data for each of the
      periods indicated.


**Year
              ended December 31,****2005**
            **2004****US$’000**
            **US$’000**
            **%
                Change**Operating
                Profit
            6,622
            6,187
            7**Net
                financing costs**
            **(669)**
            **(522)**
            **28**Profit
                before tax
            5,953
            5,665**Income
                tax (expense)/credit**
            **(673)**
            **49**Retained
                profit
            5,280
            5,714







26


*Net
      Financing Costs*


Net
      financing costs increased to US$669,000 compared to US$522,000 in 2004. This
      increase is primarily due to the impact of IAS 32 *Financial
      Instruments: Disclosure and Presentation* on the
      interest charge attributable to convertible debentures, which was implemented
      for the first time in 2005. Under IAS 32, interest on convertible debentures
      is
      charged based on an effective interest rate. This effective interest rate
      includes the nominal interest rate of 3%, a cost ascribed to the equity element
      of the instrument and the transaction costs incurred at the time the debt was
      raised. This compares to the charge for 2004 which was based entirely on the
      nominal interest rate of 3%, as the provisions of IAS 32 did not apply in 2004.
      The impact of the above increase was partially offset by the lower average
      level
      of convertible debt outstanding during 2005 compared with 2004 due to scheduled
      repayments of the debt. Please refer to “Liquidity and Capital Resources” later
      in this section for information on Trinity Biotech’s use of debt.





*Taxation*


A
      tax
      charge of US$673,000 was incurred in the year ended December 31, 2005. This
      compares to a tax credit of US$49,000 for 2004. This represented a decrease
      in
      current tax in absolute terms of US$439,000 which is more than offset by an
      increase in deferred tax of US$1,161,000. The decrease in current tax is
      attributable to an upfront deduction for certain development expenditure and
      licence fees, primarily in Ireland, for items that have not as yet been expensed
      in the Group’s income statement, and to current year losses in the US, Germany
      and Sweden. The upfront deductions had the impact of decreasing the current
      tax
      charge, primarily in Ireland, and of increasing the Group’s deferred tax
      liability. This increase in the net deferred tax position was partially offset
      by the increase in the deferred tax asset caused by the current year losses
      in
      the US and Germany. The Group was able to offset the current year loss in Sweden
      against its deferred corporation tax liabilities from previous years. For
      further details on the Group’s tax charge please refer to Note 8 “Income Tax
      Expense/(Credit)” and Note 12 “Deferred Tax Assets and Liabilities” of the Notes
      to the Consolidated Financial Statements contained in Item 18 “Financial
      Statements”.





*Profit
      for the year*


Profit
      for the period decreased by US$434,000, from US$5,714,000 to US$5,280,000.
      As a
      percentage of consolidated revenues this represents a decrease to 5.3% from
      7.1%. This decrease is principally due to the combination of higher SG&A
      costs (including the impact of share-based payments under IFRS as adopted by
      the
      EU), financing costs (mainly due to a change in the basis in calculating
      interest on convertible debt under IFRS as adopted by the EU) and an increased
      tax charge more than offsetting the increased gross margins earned from higher
      sales levels.





***Liquidity
      and Capital Resources***





***Financing***


Trinity
      Biotech has a US$43,340,000 club banking facility with Allied Irish Bank plc
      and
      Bank of Scotland (Ireland) Limited. The facility consists of a five year term
      loan of US$41,340,000 and a one year revolver of US$2,000,000. The facility
      was
      amended in July 2006, increasing the original loan facility by US$30 million
      from US$13,340,000 to US$43,340,000. The term loan is repayable in ten equal
      biannual instalments commencing in January 2007. This facility is secured by
      the
      assets of the Group (see Item 18, note 27 (c) to the consolidated financial
      statements).Various covenants apply to the Group’s bank borrowings. As at
      December 31, 2006, the Group was in breach of a number of these covenants which
      had been waived by the banks. The bank also agreed to amend those covenants
      for
      subsequent periods. At December 31, 2006, the total amount outstanding under
      the
      facility amounted to US$42,917,000. The debt is stated net of unamortised
      funding costs of US$423,000.





In
      April
      2006, Trinity Biotech completed the private placement of 11,593,840 of Class
‘A’
Ordinary Shares of the Group. Net proceeds from this placement after costs
      associated with the deal amounted to US$24,010,000.





The
      additional US$30 million loan facility and the proceeds of the US$24 million
      private placement were principally used to fund the Group’s acquisitions during
      2006. In June 2006 the Group acquired the haemostasis product line of bioMerieux
      for a total consideration of US$44.4 million, consisting of cash consideration
      of US$38.2 million, deferred consideration of US$5.5 million (net of
      discounting) and acquisition expenses of US$755,000. The cash consideration
      of
      US$38.2 million and the acquisition expenses of US$755,000 were paid in 2006.
      Of
      the deferred consideration of US$5.5 million (US$6.0 million before the impact
      of discounting), US$3.0 million is payable is June 2007 and US$2.5 million
      in
      June 2008. In October 2006 the Group acquired the French distribution business
      of Laboratoires Nephrotek SARL for US$1,204,000, consisting of cash
      consideration of US$1,089,000 and acquisition expenses of US$115,000, of which
      US$239,000 remained payable at December 31, 2006. The remaining proceeds from
      the abovementioned funding will be used to fund the future growth of the
      Group.


27


At
      December 31, 2006, the balance outstanding on the convertible notes, resulting
      from the private placement of US$20,00,000 in July 2003 and a further
      US$5,000,000 in January 2004, was US$1,836,000 (2005: US$9,039,000), including
      accrued interest at year end of US$14,000 (2005: US$70,000). The Group made
      four
      principal repayments of US$1,822,000 each during 2006. Two repayments were
      made
      by way of cash and two repayments were made by the issue of shares. The final
      principal repayment was made on January 2, 2007 by way of shares.





***Working
      capital***


In
      the
      Group’s opinion the Group’s existing cash position and cash generated from
      operations will be sufficient to support its existing operations for at least
      the next 12 months. The amount of cash generated from operations will depend
      on
      a number of factors which include the following:


·
            The
                ability of the Group to continue to generate revenue growth from
                its
                existing product lines;


·
            The
                ability of the Group to generate revenues from new products following
                the
                successful completion of its development
                projects;


·
            The
                extent to which capital expenditure is incurred on additional property
                plant and equipment;


·
            The
                level of investment required to undertake both new and existing
                development projects;


·
            Successful
                working capital management in the context of a growing
                Group.





The
      Group
      expects that the cashflows that the business will generate will be sufficient
      to
      repay the debt obligations which were outstanding at December 31, 2006. These
      obligations include the repayment of the remaining convertible notes, bank
      loans, deferred consideration and finance leases. The timing of these repayment
      obligations and the expected maturity dates are set out in more detail in Item
      11. However, if the assumptions underlying such expectations change, the Group
      may be required to raise additional capital to meet its cash requirements.





In
      the
      event that the Group makes any further acquisitions, we believe that the Group
      may be required to obtain additional debt and/or equity funding. The exact
      timing and amount of such funding will depend on the Group’s ability to identify
      and secure acquisition targets which fit with the Group’s growth strategy and
      core competencies. It is anticipated that some or all of the costs of such
      acquisitions may be met from debt funding. The cost of such funding will depend
      on prevailing interest rates at the time and the size and nature of the funding
      being provided. The extent of future equity requirements will depend on the
      size
      of any acquisitions and the availability and/or the cost of debt
      funding.





***Cash
      management***


As
      at
      December 31, 2006, Trinity Biotech's consolidated cash and cash equivalents,
      excluding restricted cash, were US$2,821,000. This compares to cash and cash
      equivalents, excluding restricted cash of US$9,881,000 at December 31, 2005.





Cash
      generated from operations for the year ended December 31, 2006 amounted to
      US$8,317,000 (2005: US$10,602,000). These cash flows were generated by profit
      before interest and taxation of US$1,941,000 (2005: US$6,622,000), as adjusted
      for non cash items of US$13,731,000 (2005: US$6,014,000) less cash outflows
      due
      to changes in working capital of US$7,355,000 (2005: US$2,034,000).





The
      increase in other non cash charges from US$6,014,000 for the year ended December
      31, 2005 to US$13,731,000 for the year ended December 31, 2006 is mainly
      attributable to an inventory provision of US$5.8 million during 2006. Following
      the acquisition of the haemostasis product line of bioMerieux, Trinity Biotech
      sought to combine the range of products acquired with the Group’s existing
      product range. As part of this process it was decided to discontinue various
      existing products and this resulted in a US$5.8 million provision against
      inventory. The remaining increase in non cash charges is attributable to
      increased depreciation and amortisation expenses of US$1,302,000 and US$884,000
      respectively in 2006, marginally offset by a decrease in share based expenses
      of
      US$227,000.





The
      net
      cash outflows in 2006 due to changes in working capital of US$7,355,000 are
      due
      to the following:


·
            An
                increase in accounts receivable by US$9,962,000 due to increased
                Group
                revenues arising from both continuing activities and acquisitions
                in 2006;


·
            An
                increase in trade and other payables by US$8,041,000 due to the
                combination of increased activity in the Group, including the impact
                of
                the acquisitions undertaken during the
                year;


·
            An
                increase in inventory by US$5,434,000 due to a combination of inventory
                purchased as part of the acquisition of the haemostasis product line
                of
                bioMerieux during 2006 (see Item 18, note 26 of the consolidated
                financial
                statements) and the building up safety stock levels on key finished
                products.


28


Net
      interest paid amounted to US$803,000 (2005: US$601,000). This consisted of
      interest paid of US$1,642,000 (2005: US$972,000) on the Group’s interest bearing
      debt including bank loans, convertible notes and finance leases and was
      partially offset by interest received of US$839,000 (2005: US$371,000) on the
      Group’s cash deposits.





Net
      cash
      outflows from investing activities for the year ended December 31, 2006 amounted
      to US$63,267,000 (2005: US$24,398,000) which were principally made up as
      follows:


·
            Payments
                for acquisitions in 2006 (US$46,136,000) principally consisting of
                payments for the acquisition of the haemostasis product line of bioMerieux
                of US$38,397,000 (including acquisition expenses) and payments for
                the
                acquisition of the assets of Nephrotek of US$936,000 (including
                acquisition expenses). In addition, payments were made during 2006
                relating to acquisitions in 2005 and 2004 totalling US$6,803,000.
                A one
                year promissory note of US$3,000,000, issued as part of the acquisition
                of
                Primus in 2005, was paid to the shareholders of Primus on the first
                anniversary of the acquisition in 2006. As part of the acquisition
                of
                Primus in 2005 and Fitzgerald in 2004, additional consideration was
                due to
                the shareholders depending on the growth of the respective businesses
                during 2005. As a result, US$2,705,000 was paid to the shareholders
                of
                Primus and US$1,098,000 was paid to the shareholders of Fitzgerald
                in
                2006;


·
            Payments
                to acquire intangible assets of US$6,085,000 (2005: US$5,509,000),
                which
                principally related to development expenditure capitalised as part
                of the
                Group’s on-going product development
                activities;


·
            Acquisition
                of property, plant and equipment of US$4,751,000 (2005: US$4,039,000)
                incurred as part of the Group’s investment programme for its manufacturing
                and distribution activities;


·
            Movements
                in financial fixed assets, which resulted in a cash outflow of
                US$6,500,000 in 2006 (2005: US$1,852,000), was due to an increase
                in the
                level of cash deposits (restricted cash) which the Group agreed to
                keep
                with its lending banks in accordance with the terms of its bank facility.
                At December 31, 2005 the Group was required to keep US$9,000,000
                on
                deposit as restricted cash with its lending banks. This restriction
                was
                increased to US$15,500,000 at December 31, 2006, resulting in a cash
                outflow from investing activities of US$6,500,000 in
                2006.





Net
      cash
      provided by financing activities for the year ended December 31, 2006 amounted
      to US$48,621,000 (2005: US$9,679,000). The Group received US$30,000,000 as
      part
      of an amendment to it current loan facilities to fund the acquisition of the
      haemostasis product line of bioMerieux and raised US$25,265,000 (2005:
      US$4,755,000) from issuing share capital. These inflows were offset by the
      repayment of convertible notes by cash in 2006 of US$3,644,000 (2005:
      US$1,822,000), repayments of debt and other liabilities of US$1,276,000 (2005:
      US$1,865,000), expenses paid in connection with share issues and debt financing
      of US$1,526,000 (2005: US$195,000) and net repayments on finance lease
      obligations of US$198,000 (2005: US$194,000).




The
      majority of the Group’s activities are conducted in US Dollars. The primary
      foreign exchange risk arises from the fluctuating value of the Group’s euro
      denominated expenses as a result of the movement in the exchange rate between
      the US Dollar and the euro. Trinity Biotech continuously monitors its exposure
      to foreign currency movements and based on expectations on future exchange
      rate
      exposure implements a hedging policy which may include covering a portion of
      this exposure through the use of forward contracts. When used these forward
      contracts are cashflow hedging instruments whose objective is to cover a portion
      of these euro forecasted transactions.





As
      at
      December 31, 2006, year end borrowings were US$45,294,000 (2005: US$27,128,000)
      and cash and cash equivalents were US$2,821,000 (US$18,321,000 inclusive of
      restricted cash) (2005: US$9,881,000 (US$18,881,000 inclusive of restricted
      cash)). For a more comprehensive discussion of the Group’s level of borrowings
      at the end of 2006, the maturity profile of the borrowings, the Group’s use of
      financial instruments, its currency and interest rate structure and its funding
      and treasury policies please refer to Item 11 “Qualitative and Quantitative
      Disclosures about Market Risk”.





29


***Contractual
      obligations***


The
      following table summarises our minimum contractual obligations and commercial
      commitments, including interest, as of December 31, 2006:





**Contractual
                Obligations**
            **Payments
                due by Period**Total
              US$’000
            less
                than 1 year
              US$’000
            1-3
                Years
              US$’000
            3-5
                Years
              US$’000
            more
                than 5 years
              US$’000Bank
                loans
            46,345
            10,989
            17,688
            17,668
            -Capital
                (finance) lease obligations
            535
            278
            257
            -
            -Other
                financial liabilities
            5,688
            3,120
            2,568
            -
            -Operating
                lease obligations
            48,266
            3,650
            7,201
            5,353
            32,062Convertible
                notes
            1,836
            1,836
            -
            -
            -Total
            102,670
            19,873
            27,714
            23,021
            32,062





Trinity
      Biotech incurs debt and raises equity to pursue its policy of growth through
      acquisition. Trinity Biotech believes that, with further funds generated from
      operations, it will have sufficient funds to meet its capital commitments and
      continue existing operations for the foreseeable future. If operating margins
      on
      sales were to decline substantially, if the Group’s increased investment in its
      US direct sales force was not to generate comparable margins in sales or if
      the
      Group was to make a large and unanticipated cash outlay, the Group would have
      further funding requirements. If this were the case, there can be no assurance
      that financing will be available at attractive terms, or at all. The Group
      believes that success in raising additional capital or obtaining profitability
      will be dependent on the viability of its products and their success in the
      market place.





***Impact
      of Inflation***


Although
      Trinity Biotech's operations are influenced by general economic trends, Trinity
      Biotech does not believe that inflation had a material effect on its operations
      for the periods presented. Management believes, however, that continuing
      national wage inflation in Ireland and the impact of inflation on costs
      generally will result in a sizeable increase in the Irish facility’s operating
      costs in 2007.





***Impact
      of Currency Fluctuation***


Trinity
      Biotech's revenue and expenses are affected by fluctuations in currency exchange
      rates especially the exchange rate between the US Dollar and the euro. Trinity
      Biotech's revenues are primarily denominated in US Dollars and its expenses
      are
      incurred principally in US Dollars and euro. The weakening of the US Dollar
      in
      recent years could have an adverse impact on future profitability. Management
      are actively seeking to increase the size of the euro revenue base to mitigate
      this risk. The revenues and costs incurred by US subsidiaries are denominated
      in
      US Dollars.





Trinity
      Biotech holds most of its cash assets in US Dollars. As Trinity Biotech reports
      in US Dollars, fluctuations in exchange rates do not result in exchange
      differences on these cash assets. Fluctuations in the exchange rate between
      the
      euro and the US Dollar may impact on the Group’s euro monetary assets and
      liabilities and on euro expenses and consequently the Group's earnings.





***Off-Balance
      Sheet Arrangements***


After
      consideration of the following items the Group’s management have determined that
      there are no off balance sheet arrangements which need to be reflected in the
      financial statements.





***Leases
      with Related Parties***


The
      Group
      has entered into lease arrangements for premises in Ireland with JRJ Investments
      (“JRJ”), a partnership owned by Mr O’Caoimh and Dr Walsh, directors of the
      Trinity Biotech plc. Independent valuers have advised Trinity Biotech that
      the
      rent fixed with respect to these leases represents a fair market rent. Details
      of these leases with related parties are set out in Item 4 “Information on the
      Company”, Item 7 “Major Shareholders and Related Party Transactions” and Item
      18, note 28 to the consolidated financial statements.





***Research
      & Development (“R&D”) carried out by third
      parties***


Certain
      of the Group’s R&D activities have been outsourced to third parties. These
      activities are carried out in the normal course of business with these
      companies.





***Research
      and Products under Development***


30


***History***


Historically,
      Trinity Biotech had been primarily focused on infectious disease diagnostics.
      The Group acquired a broad portfolio of microtitre plate (EIA) and Western
      Blot
      products and has added to these over the last number of years through additional
      internally developed products. In addition, the Group has invested in the
      development of its UniGold rapid test platform for the detection of various
      infectious diseases. More recently, the Group has entered into several other
      diagnostic areas including haemostasis and Clinical Chemistry. The Research
      and
      Development (R&D) activities of the Group have mirrored this expansion by
      developing new products in these areas also.





***Centres
      of Excellence***


Trinity
      Biotech has research and development groups focusing separately on microtitre
      plate based tests, rapid tests, western blot products, clinical chemistry
      products, haemostasis and immunofluorescent assays. These groups are located
      in
      Dublin, Germany and the US and largely mirror the production capability at
      each
      production site, hence creating a centre of excellence for each product type.
      In
      addition to in-house activities, Trinity biotech sub-contracts some research
      and
      development from time to time to independent researchers based in the US and
      Europe.





The
      following is a list of the principal projects which are currently being
      undertaken by the R&D groups within Trinity Biotech.





***UniGold
      Rapid Test Development Group***


*Development
      of UniGold* ** *LUA
      Rapid test*


The
      Trinity Biotech Uni-Gold TM Legionella Urinary Antigen (LUA) Test is a rapid test for the presumptive
      diagnosis of Legionnaire’s Disease. The development of this test commenced in
      January 2005 and development work continued through 2006. The product has also
      undergone successful external performance evaluation and is currently undergoing
      stability trials to confirm the product shelf life. It is anticipated to
      complete this in 2007 when the product will be CE marked and launched on the
      market.





*UniGold
      HIV Recombigen* â *Rapid Test for Over-the-Counter (OTC) Use*


In
      December 2003, Trinity Biotech successfully obtained FDA approval for its 10
      minute rapid HIV test, UniGold Recombigen â .
      The
      product was successfully launched and is now one of the leading HIV rapid tests
      on the US market. In 2006, Trinity Biotech decided to further develop the
      product and to ultimately seek FDA approval for ‘over-the-counter’ (OTC) use of
      the product on the US market. Initial testing was done on the format of such
      an
      OTC test. Following discussions with the FDA, Trinity Biotech prepared its
      strategy to have its product undergo suitable clinical trials. The clinical
      trials are planned to commence in 2007.





***Microtitre
      Plate Development Group***


*Development
      of microtitre plate assay for the detection of EU Lyme IgG and
      IgM*


Trinity
      Biotech is a leading supplier of diagnostic tests for the detection of Lyme
      disease. Development was recently completed of two new tests to specifically
      detect for the strains of Lyme disease prevalent in Europe. Development and
      transfer to production was completed by December 2006 including some clinical
      trial data. It is anticipated that the final clinical data will be completed
      in
      early 2007 which will allow the product to be CE marked and launched on the
      market in 2007.





***Western
      Blot Development Group***


A
      Western
      Blot kit is a test
      where antigens (usually proteins) from a specific bacteria or virus are
      transferred onto a nitrocellulose strip. When a patient’s plasma is added to the
      strip, if antibodies to that bacteria or virus are present in a patient’s
      sample, then they will bind to the specific antigens on the strip. If antibodies
      to any of the antigens are present in sufficient concentration, coloured bands
      corresponding to one or more of those antigens will be visible on the reacted
      nitrocellulose strip.





*HIV
      Western Blot*


Trinity
      Biotech is developing a western blot test for detecting antibodies to HIV for
      use as a diagnostic and confirmatory product. Similar products for other
      diseases have been designed and developed at the Trinity Biotech facility in
      Carlsbad, California where there is a long history in Western Blot products.
      The
      development work on the Recombigen â HIV-1
      Western Blot test is being carried out at this site. An Investigational New
      Drug
      (IND) application was completed and submitted to the CBER division of the FDA
      on
      July 20, 2004. Approval for this application was granted by the FDA on September
      24, 2004. This application outlined the manufacturing processes for the product
      and defined the clinical trials to be performed on the product to support a
      BLA
      application. Further refinement of the design, process and raw material
      evaluations continued in 2005 and in 2006.


31


Clinical
      trials and product validation are planned for completion in 2007. Once all
      trials are complete, a BLA application to the FDA will be made to allow sales
      of
      this product in the USA. In addition, once trials are complete, this product
      would be available for sale outside of the USA.





*US
      Lyme Western Blot*


For
      many
      years, Trinity Biotech’s US Domestic Lyme Western Blot has been a market leader.
      During 2006, a project was undertaken to further develop the product by adding
      additional process controls to the test, increasing the effectiveness of the
      product in the end-users hands. This work was successfully completed and Group
      expects to launch the enhanced product in early 2007.





*Automated
      Blotting Instrument and Blot Scanner*


2006
      also
      saw the initiation of a project to introduce the use of an automated blotting
      instrument with Trinity Biotech’s Western Blot tests, initially focusing on the
      US Lyme Western Blot allowing increased throughput for end-users. This work
      progressed successfully, culminating on the commencement of validation of the
      system in late 2006. Validation is due for completion in early 2007 with launch
      of the system, which is called TrinBlot. Once the product is launched, the
      Group
      intends to extend the range of products which can be used on the TrinBlot.
      In
      addition to the automated blotter, work also commenced on adapting an automated
      scanner to aid in the interpretation of the western blots. This system is due
      to
      be validated in early 2007 with launch also planned in the first half of the
      year.





***Clinical
      Chemistry***


Trinity
      Biotech, at its Kansas City site is in the process of developing a point of
      care
      test for the measurement of haemoglobin A1c. This project is nearing completion
      with performance evaluations and initial submissions to the FDA having being
      carried out during 2006. FDA approval along with CLIA waiver is expected during
      2007.





***Haemostasis
      Development Group***


*Destiny
      Max Development Project*


The
      Group
      is in the process of developing a new high throughput haemostasis instrument
      called the Destiny Max. The Destiny Max instrument is intended to meet the
      requirements of large laboratories, commercial laboratories, reference
      laboratories and anti-coagulation clinics, i.e. high volume laboratories. 
In so doing, Trinity Biotech will be able to compete effectively in an overall
      system approach whereby placement of the Destiny Max instruments will drive
      increased sales of the associated Trinity Biotech reagents, controls and
      accessories.  Having successfully developed a prototype instrument during
      2006, Trinity Biotech is currently finalising the final design and software
      aspects of the instrument. Completion of the development and validation phase
      of
      the project is scheduled for late 2007. Launch of the instrument onto the
      various worldwide markets is expected to take place in late 2007 and early
      2008,
      with launch in the USA following thereafter post FDA approval.





*D-Dimer
      Latex Agglutination Assay*


The
      measurement of D-Dimer levels in patient’s blood is a useful tool in the
      diagnosis of DVT (deep vein thrombosis) and PE (pulmonary embolism). One of
      the
      main functions of the D-Dimer assay is to aid the clinician in deriving a
      diagnosis of exclusion of DVT (a DVT rule out test) thus reducing the
      requirement for further expensive imaging testing of patients that are truly
      DVT
      negative. Trinity Biotech currently has several leading D-Dimer assays, one
      of
      which is for use on its Amax/Destiny instrument range. The aim of this project
      is to redesign the current D-Dimer product with a view to improving its accuracy
      levels. The aim is also to enable this enhanced D-Dimer test to be usable on
      Trinity Biotech’s full instrument range including the proposed DestinyMax. This
      project is expected to continue during 2007, after which it will be launched
      on
      the market.





***Immunofluorescent
      Assay Development Group***


*VRK
      DFA kit*


The
      purpose of this project is to develop a test kit for the detection of a range
      of
      viruses responsible for respiratory system infections. These include Influenza
      A
      and B, RSV (respiratory syncytial virus), Para Influenza 1, 2, and 3 and
      Adenovirus. The test was prepared for initial external clinical performance
      evaluation which commenced in January 2006 during the 2005/2006 northern
      hemisphere flu season and proved very successful. Further development and
      refinement of the product continued throughout 2006 and further external data
      will be obtained during the 2006/2007 northern hemisphere flu season. It is
      expected to subsequently submit a 510(k) approval later in 2007.





***Trend
      Information***


For
      information on trends in future operating expenses and capital resources, see
      “Results of Operations”, “Liquidity and Capital Resources” and “Impact of
      Inflation” under Item 5.


32


**Item
      6**


***Directors
      and Senior Management***





**Directors
      and Executive Officers**





*Name*
              
              *Age*
              *Title*Ronan
                  O'Caoimh
              
              51
              Chairman
                  of the Board of Directors Chief Executive OfficerBrendan
                  K. Farrell
              
              59
              Director,
                  PresidentJim
                  Walsh, PhD
              
              48
              Director,
                  Chief Operating OfficerRory
                  Nealon
              
              39
              Director,
                  Chief Financial Officer, Company SecretaryDenis
                  R. Burger, PhD
              
              63
              Non
                  Executive DirectorPeter
                  Coyne
              
              47
              Non
                  Executive Director





**Board
      of Directors**





**Ronan
      O’Caoimh, Chairman and Chief Executive Officer** ,
      co-founded Trinity Biotech in June 1992 and acted as Chief Financial Officer
      until March 1994 when he became Chief Executive Officer. He has been Chairman
      since May 1995. Prior to joining Trinity Biotech, Mr O’Caoimh was Managing
      Director of Noctech Limited, an Irish diagnostics company. Mr O’Caoimh was
      Finance Director of Noctech Limited from 1988 until January 1991 when he became
      Managing Director. Mr O’Caoimh holds a Bachelor of Commerce degree from
      University College Dublin and is a Fellow of the Institute of Chartered
      Accountants in Ireland.





**Brendan
      Farrell, President** ,
      joined
      Trinity Biotech in July 1994. He was previously Marketing Director of B.M.
      Browne Limited, a company involved in the marketing and distribution of medical
      and diagnostic products. Prior to that he was Chief Executive of Noctech
      Limited, an Irish based diagnostics company, following six years with Baxter
      Healthcare where he was Director of European Business Development. Mr Farrell
      has a Masters degree in Biochemistry from University College Cork.





**Jim
      Walsh, PhD, Chief Operating Officer** ,
      joined
      Trinity Biotech in October 1995. Prior to joining the Trinity Biotech, Dr Walsh
      was Managing Director of Cambridge Diagnostics Ireland Limited (CDIL). He was
      employed with CDIL since 1987. Before joining CDIL he worked with Fleming GmbH
      as Research & Development Manager. Dr Walsh has a degree in Chemistry and a
      PhD in Microbiology from University College Galway.





**Rory
      Nealon, Chief Financial Officer** ,
      joined
      Trinity Biotech as Chief Financial Officer and Company Secretary in January
      2003. Prior to joining Trinity Biotech, he was Chief Financial Officer of
      Conduit plc, an Irish directory services provider with operations in Ireland,
      the UK, Austria and Switzerland. Prior to joining Conduit he was an Associate
      Director in AIB Capital Markets, a subsidiary of AIB Group plc, the Irish
      banking group. Mr Nealon holds a Bachelor of Commerce degree from University
      College Dublin, is a Fellow of the Institute of Chartered Accountants in
      Ireland, a member of the Institute of Taxation in Ireland and a member of the
      Institute of Corporate Treasurers in the UK.





**Denis
      R. Burger, PhD, non-executive director** ,
      co-founded Trinity Biotech in June 1992 and acted as Chairman from June 1992
      to
      May 1995. He is currently a non-executive director of the Company. Dr Burger
      is
      also a 50% partner in Sovereign Ventures, a healthcare consulting and funding
      firm based in Portland, Oregon. Until March 2007, Dr Burger was the Chairman
      and
      Chief Executive Officer of AVI Biopharma Inc, an Oregon based bio-technology
      Company. He was also a co-founder and, from 1981 to 1990, Chairman of Epitope
      Inc. In addition, Dr Burger has held a professorship in the Department of
      Microbiology and Immunology and Surgery (Surgical Oncology) at the Oregon Health
      Sciences University in Portland. Dr Burger received his degree in Bacteriology
      and Immunology from the University of California in Berkeley in 1965 and his
      Master of Science and PhD in 1969 in Microbiology and Immunology from the
      University of Arizona.


33


**Peter
      Coyne, non-executive director** ,
      joined
      the board of Trinity Biotech in November 2001 as a non-executive director.
      Mr
      Coyne is a director of AIB Corporate Finance, a subsidiary of AIB Group plc,
      the
      Irish banking group. He has extensive experience in advising public and private
      groups on all aspects of corporate strategy. Prior to joining AIB, Mr Coyne
      trained as a chartered accountant and was a senior manager in Arthur Andersen’s
      Corporate Financial Services practice. Mr Coyne holds a Bachelor of Engineering
      degree from University College Dublin and is a Fellow of the Institute of
      Chartered Accountants in Ireland.








***Compensation
      of Directors and Officers***





The
      basis
      for the executive directors’ remuneration and level of annual bonuses is
      determined by the remuneration committee of the board. In all cases, bonuses
      and
      the granting of share options are subject to stringent performance criteria.
      The
      remuneration committee consists of Dr Denis Burger (committee chairman and
      senior independent director), Mr Peter Coyne and Mr Ronan O’Caoimh.  Directors’
      remuneration shown below comprises salaries, pension contributions and other
      benefits and emoluments in respect of executive directors. Non-executive
      directors are remunerated by fees and the granting of share options.
      Non-executive directors who perform additional services on the audit committee
      or remuneration committee receive additional fees. The fees payable to
      non-executive directors are determined by the board. Each director is reimbursed
      for expenses incurred in attending meetings of the board of
      directors.





Total
      directors and non executive directors’ remuneration, excluding pension, for the
      year ended December 31, 2006 amounted to US$2,213,000. The pension charge for
      the year amounted to US$119,000. See Item 18, note 5 to the consolidated
      financial statements. The split of directors’ remuneration set out by director
      is detailed in the table below:




*Director*
            *Salary/
                Benefits*
            *Performance
                related bonus*
            *Defined
                contribution pension*
            *Total*
              *2006*
            *Total*
              *2005**US$’000*
            *US$’000*
            *US$’000*
            *US$’000*
            *US$’000*Ronan
                O’Caoimh
            552
            246
            56
            854
            664Brendan
                Farrell
            419
            157
            26
            602
            459Rory
                Nealon
            250
            109
            18
            377
            267Jim
                Walsh
            257
            123
            19
            399
            4331,478
            635
            119
            2,232
            1,823


*Non-executive
                director*
            *Fees*
            
            
            *Total*
              *2006*
            *Total*
              *2005**US$’000*
            
            
            *US$’000*
            *US$’000*Denis
                R. Burger
            50
            
            
            50
            30Peter
                Coyne
            50
            
            
            50
            30100
            
            
            100
            60


As
      at
      December 31, 2006 there are no amounts which are set aside or accrued by the
      Company or its subsidiaries to provide pension, retirement or similar benefits
      for the directors.





The
      total
      share-based compensation expense recognised in the consolidated income statement
      in 2006 in respect of options granted to both executive and non executive
      directors amounted to US$732,000. See Item 18, note 5 to the consolidated
      financial statements.








34





The
      directors were granted 860,000 share options during 2006. The following table
      details the options granted to the directors and fair value of the options
      at
      the date of grant:


*Director*
            *Number
                of share options*
            *Fair
                value at date of grant**US$’000*Ronan
                O’Caoimh
            350,000
            403Brendan
                Farrell
            285,000
            328Rory
                Nealon
            150,000
            173Jim
                Walsh
            25,000
            29Denis
                Burger
            25,000
            29Peter
                Coyne
            25,000
            29860,000
            991





In
      addition, see Item 7 - Major Shareholders and Related Party Transactions for
      further information on the compensation of Directors and Officers.





***Board
      Practices***





The
      Articles of Association of Trinity Biotech provide that one third of the
      directors in office (other than the Managing Director or a director holding
      an
      executive office with Trinity Biotech) or, if their number is not three or
      a
      multiple of three, then the number nearest to but not exceeding one third,
      shall
      retire from office at every annual general meeting. If at any annual general
      meeting the number of directors who are subject to retirement by rotation is
      two, one of such directors shall retire and if the number of such directors
      is
      one that director shall retire. Retiring directors may offer themselves for
      re-election. The directors to retire at each annual general meeting shall be
      the
      directors who have been longest in office since their last appointment. As
      between directors of equal seniority the directors to retire shall, in the
      absence of agreement, be selected from among them by lot.





In
      accordance with the Articles of Association of the Company, Mr. Peter Coyne
      will
      retire by rotation and, being eligible, offer himself for re-election at the
      Annual General Meeting of the Company.





The
      board
      has established audit and remuneration committees. The functions and membership
      of the remuneration committee are described above. The audit committee is
      responsible to the board for the review of the quarterly and annual reports
      and
      ensuring that an effective system of internal controls is maintained. It also
      appoints the external auditors, reviews the scope and results of the external
      audit and monitors the relationship with the auditors. The audit committee
      comprises the two independent non-executive directors of the Group, Mr Peter
      Coyne (committee chairman) and Dr Denis Burger.





Because
      Trinity Biotech is a foreign private issuer, it is not required to comply with
      all of the corporate governance requirements set forth in Nasdaq Rule 4350
      as
      they apply to U.S. domestic companies. The Group’s corporate governance measures
      differ in the following significant ways. First, the audit committee of the
      Group currently consists of two members - while U.S. domestic companies listed
      on Nasdaq are required to have three members on their audit committee. Second,
      the board of directors of the Group has only two independent, non-executive
      directors, while U.S. domestic companies are required to have a majority of
      independent directors on their board. In addition, the Group has not appointed
      an independent nominations committee or adopted a board resolution addressing
      the nominations process. Finally, the Group’s Chief Executive Officer serves on
      the Group’s remuneration committee with two non-executive independent directors,
      while U.S. domestic companies are required to have executive officer
      compensation determined by a remuneration committee comprised solely of
      independent directors or a majority of the independent directors.





In
      respect of the practices noted above, the Group is required under its home
      legislation in lieu of Nasdaq Rule 4350, to comply with these practices, or
      if
      the Group does not comply with these practices, explain reasons for
      non-compliance.





35
  ***Employees***





As
      of
      December 31, 2006, Trinity Biotech had 826 employees (2005: 734) consisting
      of 1
      research director and 44 research scientists and technicians, 520 manufacturing
      and quality assurance employees, and 261 finance, administration
      and marketing staff (2005: a research director and 41 research scientists and
      technicians, 466 manufacturing and quality assurance employees, and 226 finance,
      administration and marketing staff). Trinity Biotech's future hiring levels
      will
      depend on the growth of revenues.





The
      geographic spread of the Group’s employees was as follows: 374 in Bray, Co.
      Wicklow, Ireland, 316 in its US operations, 103 in Germany, 16 in the United
      Kingdom, 10 in France and 7 in Sweden.





***Stock
      Option Plan***





The
      board
      of directors has adopted the Employee Share Option Plan, as most recently
      updated in 2006, (the "Plan"), the purpose of which is to provide Trinity
      Biotech's employees, consultants, officers and directors with additional
      incentives to improve Trinity Biotech's ability to attract, retain and motivate
      individuals upon whom Trinity Biotech's sustained growth and financial success
      depends. The Plan is administered by a compensation committee designated by
      the
      board of directors. Options under the Plan may be awarded only to employees,
      officers, directors and consultants of Trinity Biotech.





The
      exercise price of options is determined by the compensation committee. The
      term
      of an option will be determined by the compensation committee, provided that
      the
      term may not exceed seven years from the date of grant. All options will
      terminate 90 days after termination of the option holder’s employment, service
      or consultancy with Trinity Biotech (or one year after such termination because
      of death or disability) except where a longer period is approved by the board
      of
      directors. Under certain circumstances involving a change in control of Trinity
      Biotech, the committee may accelerate the exercisability and termination of
      the
      options. As of February 28, 2007 4,812,083 of the options outstanding were
      held
      by directors and officers of Trinity Biotech.





As
      of
      February 28, 2007 the following options were outstanding:





Number
                  of ‘A’
              Range
                  of
              Range
                  ofOrdinary
                  Shares
              Exercise
                  Price
              Exercise
                  PriceSubject
                  to Option
              per
                  Ordinary Share
              per
                  ADSTotal
                  options outstanding
              
              8,041,070
              US$0.98-US$4.50
              US$3.92-US$18.00


In
      addition, Trinity Biotech granted warrants to purchase 940,405 Class 'A'
      Ordinary Shares at prices ranging from US$1.50 to US$2.75 per ordinary share
      to
      agents who were involved in the private placements in 1994, 1995 and 1999 and
      the debenture issues in 1997, 1999 and 2002. A further warrant to purchase
      100,000 Class ‘A’ Ordinary Shares was granted to a consultant of the Group. In
      January 2004, the Group completed a private placement and as part of this the investors
      were granted five year warrants to purchase an aggregate of 1,058,824 Class
‘A’
Ordinary Shares of Trinity Biotech at an exercise price of US$5.25 per ordinary
      share and the agent received 200,000 warrants to purchase 200,000 Class ‘A’
Ordinary Shares of Trinity Biotech at an exercise price of US$5.25 per ordinary
      share. As
      of
      February 28, 2007 there were warrants to purchase 1,317,324 Class ‘A’ Ordinary
      Shares in the Group outstanding.








**Item
      7**


***Major
      Shareholders and***


***Related
      Party Transactions***





As
      of
      February 28, 2007 Trinity Biotech has outstanding 74,586,141 ‘A’ Ordinary shares
      and 700,000 ‘B’ Ordinary shares. Such totals exclude 9,358,394 shares issuable
      upon the exercise of outstanding options and warrants.





The
      following table sets forth, as of February 28, 2007, the Trinity Biotech ‘A’
Ordinary Shares and ‘B’ Ordinary Shares beneficially held by (i) each person
      believed by Trinity Biotech to beneficially hold 5% or more of such shares,
      (ii)
      each director and officer of Trinity Biotech, and (iii) all officers and
      directors as a group.


36


Except
      as otherwise noted, all of the persons and groups shown below have sole voting
      and investment power with respect to the shares indicated. The Group is not
      controlled by another corporation or government.





Number
                of ‘A’ Ordinary SharesBeneficially Owned
            Percentage
                Outstanding ‘A’ Ordinary Shares
            Number
                of ‘B’ Ordinary Shares Beneficially Owned
            Percentage
                Outstanding ‘B’ Ordinary Shares
            Percentage
                Total
              Voting
                PowerRonan
                O’Caoimh
            4,545,621
                (1)
            6.0%
            -
            -
            5.9%Brendan
                Farrell
            1,726,635
                (2)
            2.3%
            -
            -
            2.2%Rory
                Nealon
            412,500
                (3)
            0.6%
            -
            -
            0.5%Jim
                Walsh
            1,852,782
                (4)
            2.5%
            -
            -
            2.4%Denis
                R. Burger
            153,250
                (5)
            0.2%
            -
            -
            0.2%Peter
                Coyne
            126,250
                (6)
            0.2%
            -
            -
            0.2%Potenza
                Investments Inc, (“Potenza”)
              Statenhof
                Building, Reaal 2A
              23
                50AA Leiderdorp
              Netherlands
            -
            -
            500,000
                (7)
            71.4%
            1.3%Officers
                and Directors as a group (6 persons)
            8,817,038
                (1)(2)(3)(4)(5)(6)
            11.4%
            -
            -
            11.2%





(1) Includes
      854,166 shares issuable upon exercise of options.





(2) Includes
      1,137,500 shares issuable upon exercise of options.





(3) Includes
      212,500 shares issuable upon exercise of options.





(4) Includes
      499,167 shares issuable upon exercise of options.





(5) Includes
      106,250 shares issuable upon exercise of options.





(6) Includes
      126,250 shares issuable upon exercise of options.





(7) These
‘B’
      shares have two votes per share.





***Related
      Party Transactions***





The
      Group
      has entered into various arrangements with JRJ Investments (“JRJ”), a
      partnership owned by Mr O’Caoimh and Dr Walsh, directors of Trinity Biotech, to
      provide for current and potential future needs to extend its premises at IDA
      Business Park, Bray, Co. Wicklow, Ireland.





In
      July
      2000, Trinity Biotech entered into an agreement with JRJ pursuant to which
      the
      Group took a lease of a 25,000 square foot premises adjacent to the existing
      facility for a term of 20 years at a rent of €7.62 per square foot (“the Current
      Extension”) for an annual rent of €190,000 (US$252,000). During 2006, the rent
      on this property was reviewed and increased to €11.00 per square foot, resulting
      in an annual rent of €275,000 (US$364,000).





On
      November 20, 2002, the Group entered into an agreement for a 25 year lease
      with
      JRJ for offices that have been constructed on part of these lands. The annual
      rent of €381,000 (US$520,000) is payable from 2004. Independent valuers have
      advised the Group that the rent fixed in respect of the Current Extension and
      the lease represents a fair market rent.




37


At
      December 31, 2006 the Trinity Biotech has agreed to enter a further 25 year
      lease with JRJ for an additional 43,000 square foot manufacturing facility,
      in
      Bray Ireland, at a rate of €11.25 per square foot giving a total annual rent of
€484,000 (US$641,000). This lease will commence upon completion of the
      construction of the facility by JRJ during 2007. Independent valuers have
      advised the board that the rent in relation to this new premises represents
      a
      fair market rent.




Trinity
      Biotech and its directors (excepting Mr O’Caoimh and Dr Walsh who express no
      opinion on this point) believe that the arrangements entered into represent
      a
      fair and reasonable basis on which the Group can meet its ongoing requirements
      for premises.




Rayville
      Limited, an Irish registered company, which is wholly owned by the four
      executive directors and certain other executives of the Group, owns all of
      the
‘B’ non-voting Ordinary Shares in Trinity Research Limited, one of the Group’s
      subsidiaries. The ‘B’ shares do not entitle the holders thereof to receive any
      assets of the company on a winding up. All of the ‘A’ voting ordinary shares in
      Trinity Research Limited are held by the Group. Trinity Research Limited may,
      from time to time, declare dividends to Rayville Limited and Rayville Limited
      may declare dividends to its shareholders out of those amounts. Any such
      dividends paid by Trinity Research Limited are ordinarily treated as
      compensation expense by the Group in the consolidated financial statements
      prepared in accordance with IFRS as adopted by the EU, notwithstanding their
      legal form of dividends to minority interests, as this best represents the
      substance of the transactions. The amount of dividends included in compensation
      expense was US$969,000, US$1,410,000 and US$1,911,000 for 2004, 2005 and 2006
      respectively, of which US$914,000, US$1,333,000 and US$1,779,000 respectively
      related to the four executive directors of the Group. There were no dividends
      payable to Rayville Limited as of December 31, 2004, 2005 or 2006.





In
      addition, in December 2006, the remuneration committee of the Board approved
      the
      payment of a dividend of US$5,331,000 by Trinity Research Limited to Rayville
      Limited on the ‘B’ shares held by it. This will be used to fund executive
      compensation over the next number of years under the arrangement described
      above
      and will be reflected in compensation expense over the corresponding period.
      As
      this payment is matched by a loan from Rayville Limited to Trinity Research
      Limited which is repayable solely at the discretion of the remuneration
      committee of the Board and is unsecured and interest free, the Group has netted
      this dividend paid to Rayville Limited against the corresponding loan from
      Rayville Limited in the 2006 consolidated financial statements.








**Item
      8**


***Financial
      Information***


***Legal
      Proceedings***








***Dispute
      Regarding the Distribution Agreement with Inverness Medical Innovations
      Inc***


In
      December 2003, Trinity
      Biotech initiated legal proceedings in the Superior Court of Middlesex County,
      Massachusetts against Inverness Medical and its affiliate Wampole for
      declaratory judgement, breach of contract and unfair and deceptive business
      practices in connection with the Defendants’ performance under a distribution
      agreement initially entered into in 1995 by Clark Laboratories Inc (now part
      of
      the Trinity Biotech Group) and subsequently amended in 2002. This legal dispute
      was settled during 2006. On August 3, 2006 the parties entered into a settlement
      agreement, a patent licence and a supply agreement. Under
      the
      terms of these agreements the parties settled their claims; Inverness granted
      Trinity Biotech a royalty bearing licence to its lateral flow patents for all
      diagnostic uses with the exception of women’s health and cardiology, including
      an Over the Counter (“OTC”) license for Trinity Biotech’s Unigold HIV products.
      In addition, Inverness agreed to manufacture Trinity Biotech’s Unigold HIV tests
      primarily for sale in the African market in its new facility in Hangzhou, China,
      and reimbursed Trinity Biotech US$1,000,000 towards its costs of US$967,000,
      incurred as part of the litigation.





**Item
      9**


***The
      Offer and Listing***





Trinity
      Biotech's American Depository Shares (“ADSs”) are listed on the NASDAQ National
      Cap Market under the symbol "TRIB". In 2005, the Trinity Biotech adjusted the
      ratio of American Depository Receipts (“ADSs”) to Ordinary Shares and changed
      its Nasdaq Listing from the Nasdaq Small Capital listing to a Nasdaq National
      Market Listing. The ratio of ADSs to underlying Ordinary Shares has changed
      from
      1 ADS : 1 Ordinary Share to 1 ADS : 4 Ordinary Shares and all historical data
      has been restated as a result.







38


The
      Group’s ‘A’ Ordinary Shares are also listed and trade on the Irish Stock
      Exchange. The Group’s depository bank for the ADSs is The Bank of New York. On
      February 28, 2007, the reported closing sale price of the ADSs was US$10.13
      per
      ADS. The following tables set forth the range of quoted high and low sale prices
      of Trinity Biotech's ADSs for (a) the years ended December 31, 2002, 2003,
      2004,
      2005 and 2006; (b) the quarters ended March 31, June 30, September 30 and
      December 31, 2005; March 31, June 30, September 30 and December 31, 2006; and
      (c) the months of March, April, May, June, July, August, September, October,
      November and December 2006 and January and February 2007 as reported on NASDAQ.
      These quotes reflect inter-dealer prices without retail mark-up, mark-down
      or
      commission and may not necessarily represent actual transactions.




ADSsHigh
              
              Low**Year
                  Ended December 31**2002
              $7.44
              
              $3.562003
              $26.88
              
              $5.002004
              $23.96
              
              $9.402005
              $11.72
              
              $6.282006
              $9.54
              
              $7.09**2005**Quarter
                  ended March 31
              $11.72
              
              $10.00Quarter
                  ended June 30
              $9.88
              
              $6.28Quarter
                  ended September 30
              $8.76
              
              $6.34Quarter
                  ended December 31
              $8.27
              
              $6.67**2006**Quarter
                  ended March 31
              $9.31
              
              $8.20Quarter
                  ended June 30
              $9.51
              
              $7.45Quarter
                  ended September 30
              $9.30
              
              $7.09Quarter
                  ended December 31
              $9.54
              
              $8.34**Month
                  Ended**March
                  31, 2006
              $9.31
              
              $8.80April
                  30, 2006
              $9.51
              
              $8.45May
                  31, 2006
              $8.81
              
              $8.15June
                  30, 2006
              $8.70
              
              $7.45July
                  31, 2006
              $7.76
              
              $7.09August
                  31, 2006
              $8.47
              
              $7.91September
                  30, 2006
              $9.30
              
              $8.07October
                  31, 2006
              $9.54
              
              $8.34November
                  30, 2006
              $9.31
              
              $8.95December
                  31, 2006
              $9.15
              
              $8.36January
                  31, 2007
              $9.28
              
              $8.68February
                  28, 2007
              $10.45
              
              $8.98


The
      number of record holders of Trinity Biotech's ADSs as at February 28, 2007
      amounts to 375, inclusive of those brokerage firms and/or clearing houses
      holding Trinity Biotech's securities for their clientele (with each such
      brokerage house and/or clearing house being considered as one holder).







39


**Item
      10**


***Memorandum
      and***


***Articles
      of Association***


***Objects***


The
      Company’s objects, detailed in Clause 3 of its Memorandum of Association, are
      varied and wide ranging and include principally researching, manufacturing,
      buying, selling and distributing all kinds of patents, pharmaceutical, medicinal
      and diagnostic preparations, equipment, drugs and accessories. They also include
      the power to acquire shares or other interests or securities in other companies
      or businesses and to exercise all rights in relation thereto. The Company’s
      registered number in Ireland is 183476.





***Powers
      and Duties of Directors***


A
      director may enter into a contract and be interested in any contract or proposed
      contract with the Company either as vendor, purchaser or otherwise and shall
      not
      be liable to account for any profit made by him resulting therefrom provided
      that he has first disclosed the nature of his interest in such a contract at
      a
      meeting of the board as required by Section 194 of the Irish Companies Act
      1963.
      Generally, a director must not vote in respect of any contract or arrangement
      or
      any proposal in which he has a material interest (otherwise than by virtue
      of
      his holding of shares or debentures or other securities in or through the
      Group). In addition, a director shall not be counted in the quorum at a meeting
      in relation to any resolution from which he is barred from voting.





A
      director is entitled to vote and be counted in the quorum in respect of certain
      arrangements in which he is interested (in the absence of some other material
      interest). These include the giving of a security or indemnity to him in respect
      of money lent or obligations incurred by him for the Group, the giving of any
      security or indemnity to a third party in respect of a debt or obligation of
      the
      Group for which he has assumed responsibility, any proposal concerning an offer
      of shares or other securities in which he may be interested as a participant
      in
      the underwriting or sub-underwriting and any proposal concerning any other
      company in which he is interested provided he is not the holder of or
      beneficially interested in 1% or more of the issued shares of any class of
      share
      capital of such company or of voting rights.





The
      Board
      may exercise all the powers of the Group to borrow money but it is obliged
      to
      restrict these borrowings to ensure that the aggregate amount outstanding of
      all
      monies borrowed by the Group does not, without the previous sanction of an
      ordinary resolution of the Company, exceed an amount equal to twice the adjusted
      capital and reserves (both terms as defined in the Articles of Association).
      However, no lender or other person dealing with the Group shall be obliged
      to
      see or to inquire whether the limit imposed is observed and no debt incurred
      in
      excess of such limit will be invalid or ineffectual unless the lender has
      express notice at the time when the debt is incurred that the limit was or
      was
      to be exceeded.





Directors
      are not required to retire upon reaching any specific age and are not required
      to hold any shares in the capital of the Group. The Articles provide for
      retirement of the directors by rotation.





All
      of
      the above mentioned powers of directors may be varied by way of a special
      resolution of the shareholders.





***Rights,
      Preferences and Restrictions Attaching to Shares***


The
‘A’
      Ordinary Shares and the ‘B’ Ordinary Shares rank pari passu in all respects save
      that the ‘B’ Ordinary Shares have two votes per share and the right to receive
      dividends and participate in the distribution of the assets of the Company
      upon
      liquidation or winding up at a rate of twice that of the ‘A’ Ordinary
      Shares.





Where
      a
      shareholder or person who appears to be interested in shares fails to comply
      with a request for information from the Company in relation to the capacity
      in
      which such shares or interest are held, who is interested in them or whether
      there are any voting arrangements, that shareholder or person may be
      disenfranchised and thereby restricted from transferring the shares and voting
      rights or receiving any sums in respect thereof (except in the case of a
      liquidation). In addition, if cheques in respect of the last three dividends
      paid to a shareholder remain uncashed, the Company is, subject to compliance
      with the procedure set out in the Articles of Association, entitled to sell
      the
      shares of that shareholder.





At
      a
      general meeting, on a show of hands, every member who is present in person
      or by
      proxy and entitled to vote shall have one vote (so, however, that no individual
      shall have more than one vote) and upon a poll, every member present in person
      or by proxy shall have one vote for every share carrying voting rights of which
      he is the holder. In the case of joint holders, the vote of the senior (being
      the first person named in the register of members in respect of the joint
      holding) who tendered a vote, whether in person or by proxy, shall be accepted
      to the exclusion of votes of the other joint holders.


40





One
      third
      of the directors other than an executive director or, if their number is not
      three or a multiple of three, then the number nearest to but not exceeding
      one
      third, shall retire from office at each annual general meeting. If, however,
      the
      number of directors subject to retirement by rotation is two, one of such
      directors shall retire. If the number is one, that director shall retire. The
      directors to retire at each annual general meeting shall be the ones who have
      been longest in office since their last appointment. Where directors are of
      equal seniority, the directors to retire shall, in the absence of agreement,
      be
      selected by lot. A retiring director shall be eligible for re-appointment and
      shall act as director throughout the meeting at which he retires. A separate
      motion must be put to a meeting in respect of each director to be appointed
      unless the meeting itself has first agreed that a single resolution is
      acceptable without any vote being given against it.





The
      Company may, subject to the provisions of the Companies Acts, 1963 to 2006
      of
      Ireland, issue any share on the terms that it is, or at the option of the
      Company is to be liable, to be redeemed on such terms and in such manner as
      the
      Company may determine by special resolution. Before recommending a dividend,
      the
      directors may reserve out of the profits of the Company such sums as they think
      proper which shall be applicable for any purpose to which the profits of the
      Company may properly be applied and, pending such application, may be either
      employed in the business of the Company or be invested in such investments
      (other than shares of the Company or of its holding company (if any)) as the
      directors may from time to time think fit.





Subject
      to any conditions of allotment, the directors may from time to time make calls
      on members in respect of monies unpaid on their shares. At least 14 days notice
      must be given of each call. A call shall be deemed to have been made at the
      time
      when the directors resolve to authorise such call.





The
      Articles do not contain any provisions discriminating against any existing
      or
      prospective holder of securities as a result of such shareholder owning a
      substantial number of shares.





***Action
      Necessary to Change the Rights of Shareholders***


In
      order
      to change the rights attaching to any class of shares, a special resolution
      passed at a class meeting of the holders of such shares is required. The
      provisions in relation to general meetings apply to such class meetings except
      the quorum shall be two persons holding or representing by proxy at least one
      third in nominal amount of the issued shares of that class. In addition, in
      order to amend any provisions of the Articles of Association in relation to
      rights attaching to shares, a special resolution of the shareholders as a whole
      is required.





***Calling
      of AGM’s and EGM’s of Shareholders***


The
      Company must hold a general meeting as its annual general meeting each year. Not
      more than 15 months can elapse between annual general meetings. The annual
      general meetings are held at such time and place as the directors determine
      and
      all other general meetings are called extraordinary general meetings. Every
      general meeting shall be held in Ireland unless all of the members entitled
      to
      attend and vote at it consent in writing to it being held elsewhere or a
      resolution providing that it be held elsewhere was passed at the preceding
      annual general meeting. The directors may at any time call an extraordinary
      general meeting and such meetings may also be convened on such requisition,
      or
      in default may be convened by such requisitions, as is provided by the Companies
      Acts, 1963 to 2006 of Ireland.





In
      the
      case of an annual general meeting or a meeting at which a special resolution
      is
      proposed, 21 clear days notice of the meeting is required and in any other
      case
      it is seven clear days notice. Notice must be given in writing to all members
      and to the auditors and must state the details specified in the Articles of
      Association. A general meeting (other than one at which a special resolution
      is
      to be proposed) may be called on shorter notice subject to the agreement of
      the
      auditors and all members entitled to attend and vote at it. In certain
      circumstances provided in the Companies Acts, 1963 to 2006 of Ireland, extended
      notice is required. These include removal of a director. No business may be
      transacted at a general meeting unless a quorum is present. Five members present
      in person or by proxy (not being less than five individuals) representing not
      less than 40% of the ordinary shares shall be a quorum. The Company is not
      obliged to serve notices upon members who have addresses outside Ireland and
      the
      US but otherwise there are no limitations in the Articles of Association or
      under Irish law restricting the rights of non-resident or foreign shareholders
      to hold or exercise voting rights on the shares in the Company.





However,
      the Financial Transfers Act, 1992 and regulations made thereunder prevent
      transfers of capital or payments between Ireland and certain countries. These
      restrictions on financial transfers are more comprehensively described in
“Exchange Controls” below. In addition, Irish competition law may restrict the
      acquisition by a party of shares in the Company but this does not apply on
      the
      basis of nationality or residence.





41


***Other
      Provisions of the Memorandum and Articles of
      Association***


The
      Memorandum and Articles of Association do not contain any
      provisions:


-
      which
      would have an effect of delaying, deferring or preventing a change in control
      of
      the Company and which would operate only with respect to a merger, acquisition
      or corporate restructuring involving the Company (or any of its subsidiaries);
      or


-
      governing the ownership threshold above which a shareholder ownership must
      be
      disclosed; or


-
      imposing conditions governing changes in the capital which are more stringent
      than is required by Irish law. ******





The
      Company incorporates by reference all other information concerning its
      Memorandum and Articles of Association from the Registration Statement on Form
      F-1 on June 12, 1992.





***Irish
      Law***





Pursuant
      to Irish law, Trinity Biotech must maintain a register of its shareholders.
      This
      register is open to inspection by shareholders free of charge and to any member
      of the public on payment of a small fee. The books containing the minutes of
      proceedings of any general meeting of Trinity Biotech are required to be kept
      at
      the registered office of the Company and are open to the inspection of any
      member without charge. Minutes of meetings of the Board of Directors are not
      open to scrutiny by shareholders. Trinity Biotech is obliged to keep proper
      books of account. The shareholders have no statutory right to inspect the books
      of account. The only financial records, which are open to the shareholders,
      are
      the financial statements, which are sent to shareholders with the annual report.
      Irish law also obliges Trinity Biotech to file information relating to certain
      events within the Company (new share capital issues, changes to share rights,
      changes to the Board of Directors). This information is filed with the Companies
      Registration Office (the "CRO") in Dublin and is open to public inspection.
      The
      Articles of Association of Trinity Biotech permit ordinary shareholders to
      approve corporate matters in writing provided that it is signed by all the
      members for the time being entitled to vote and attend at general meeting.
      Ordinary shareholders are entitled to call a meeting by way of a **** requisition.
      The requisition must be signed by ordinary shareholders holding not less than
      one-tenth of the paid up capital of the Company carrying the right of voting
      at
      general meetings of the Company. Trinity Biotech is generally permitted, subject
      to company law, to issue shares with preferential rights, including preferential
      rights as to voting, dividends or rights to a return of capital on a winding
      up
      of the Company. Any shareholder who complains that the affairs of the Company
      are being conducted or that the powers of the directors of the Company are
      being
      exercised in a manner oppressive to him or any of the shareholders (including
      himself), or in disregard of his or their interests as shareholders, may apply
      to the Irish courts for relief. Shareholders have no right to maintain
      proceedings in respect of wrongs done to the Company.





Ordinarily,
      our directors owe their duties only to Trinity Biotech and not its shareholders.
      The duties of directors are twofold, fiduciary duties and duties of care and
      skill. Fiduciary duties are owed by the directors individually and owed to
      Trinity Biotech. Those duties include duties to act in good faith towards
      Trinity Biotech in any transaction, not to make use of any money or other
      property of Trinity Biotech, not to gain directly or indirectly any improper
      advantage for himself at the expense of Trinity Biotech, to act bona fide in
      the
      interests of Trinity Biotech and exercise powers for the proper purpose. A
      director need not exhibit in the performance of his duties a greater degree
      of
      skill than may reasonably be expected from a person of his knowledge and
      experience. When directors, as agents in transactions, make contracts on behalf
      of the Company, they generally incur no personal liability under these
      contracts.





It
      is
      Trinity Biotech, as principal, which will be liable under them, as long as
      the
      directors have acted within Trinity Biotech’s objects and within their own
      authority. A director who commits a breach of his fiduciary duties shall be
      liable to Trinity Biotech for any profit made by him or for any damage suffered
      by Trinity Biotech as a result of the breach. In addition to the above, a breach
      by a director of his duties may lead to a sanction from a Court including
      damages of compensation, summary dismissal of the director, a requirement to
      account to Trinity Biotech for profit made and restriction of the director
      from
      acting as a director in the future.





42


***Material
      Contracts***





See
      Item
      4 “History and Development of the Company” regarding acquisitions made by the
      Group.








***Exchange
      Controls and Other Limitations***


***Affecting
      Security Holders***





Irish
      exchange control regulations ceased to apply from and after December 31, 1992.
      Except as indicated below, there are no restrictions on non-residents of the
      Republic of Ireland dealing in domestic securities which includes shares or
      depository receipts of Irish companies such as Trinity Biotech, and dividends
      and redemption proceeds, subject to the withholding where appropriate of
      withholding tax as described under Item 10, are freely transferable to
      non-resident holders of such securities.





The
      Financial Transfers Act, 1992 was enacted in December 1992. This Act gives
      power
      to the Minister of Finance of the Republic of Ireland to make provision for
      the
      restriction of financial transfers between the Republic of Ireland and other
      countries. Financial transfers are broadly defined and include all transfers,
      which would be movements of funds within the meaning of the treaties governing
      the European Communities. The acquisition or disposal of ADSs representing
      shares issued by an Irish incorporated company and associated payments may
      fall
      within this definition. In addition, dividends or payments on redemption or
      purchase of shares, interest payments, debentures or other securities in an
      Irish incorporated company and payments on a liquidation of an Irish
      incorporated company would fall within this definition. Currently, orders under
      this Act prohibit any financial transfer to or by the order of or on behalf
      of
      residents of the Federal Republic of Yugoslavia, Federal Republic of Serbia,
      Angola and Iraq, any financial transfer in respect of funds and financial
      resources belonging to the Taliban of Afghanistan (or related terrorist
      organisations), financial transfers to the senior members of the Zimbabwean
      government and financial transfers to any persons, groups or entities listed
      in
      EU Council Decision 2002/400/EC of June 17, 2002 unless permission for the
      transfer has been given by the Central Bank of Ireland. Trinity Biotech does
      not
      anticipate that Irish exchange controls or orders under the Financial Transfers
      Act, 1992 will have a material effect on its business.





For
      the
      purposes of the orders relating to Iraq and the Federal Republic of Yugoslavia,
      reconstituted in 1991 as Serbia and Montenegro, a resident of those countries
      is
      a person living in these countries, a body corporate or entity operating in
      these countries and any person acting on behalf of any of these
      persons.





Any
      transfer of, or payment for, an ordinary share or ADS involving the government
      of any country which is currently the subject of United Nations sanctions,
      any
      person or body controlled by any government or country under United Nations
      sanctions or any persons or body controlled acting on behalf of these
      governments of countries, may be subject to restrictions required under these
      sanctions as implemented into Irish law.








***Taxation***





The
      following discussion is based on US and Republic of Ireland tax law, statutes,
      treaties, regulations, rulings and decisions all as of the date of this annual
      report. Taxation laws are subject to change, from time to time, and no
      representation is or can be made as to whether such laws will change, or what
      impact, if any, such changes will have on the statements contained in this
      summary. No assurance can be given that proposed amendments will be enacted
      as
      proposed, or that legislative or judicial changes, or changes in administrative
      practice, will not modify or change the statements expressed herein.





This
      summary is of a general nature only. It does not constitute legal or tax advice
      nor does it discuss all aspects of Irish taxation that may be relevant to any
      particular Irish Holder or US Holder of ordinary shares or ADSs.





This
      summary does not discuss all aspects of Irish and US federal income taxation
      that may be relevant to a particular holder of Trinity Biotech ADSs in light
      of
      the holder's own circumstances or to certain types of investors subject to
      special treatment under applicable tax laws (for example, financial
      institutions, life insurance companies, tax-exempt organisations, and non-US
      taxpayers) and it does not discuss any tax consequences arising under the laws
      of taxing jurisdictions other than the Republic of Ireland and the US federal
      government. The tax treatment of holders of Trinity Biotech ADSs may vary
      depending upon each holder’s own particular situation.


43


Prospective
      purchasers of Trinity Biotech ADSs are advised to consult their own tax advisors
      as to the US, Irish or other tax consequences of the purchase, ownership and
      disposition of such ADSs.





***US
      Federal Income Tax Consequences to US Holders***





The
      following is a summary of the material US federal income tax consequences that
      generally would apply with respect to the ownership and disposition of Trinity
      Biotech ADSs, in the case of a purchaser of such ADSs who is a US Holder (as
      defined below) and who holds the ADSs as capital assets. This summary is based
      on the US Internal Revenue Code of 1986, as amended (the “Code”), Treasury
      Regulations promulgated thereunder, and judicial and administrative
      interpretations thereof, all as in effect on the date hereof and all of which
      are subject to change either prospectively or retroactively. For the purposes
      of
      this summary, a US Holder is: an individual who is a citizen or a resident
      of
      the United States; a corporation created or organised in or under the laws
      of
      the United States or any political subdivision thereof; an estate whose income
      is subject to US federal income tax regardless of its source; or a trust that
      (a) is subject to the primary supervision of a court within the United States
      and the control of one or more US persons or (b) has a valid election in effect
      under applicable US Treasury regulations to be treated as a US
      person.





This
      summary does not address all tax considerations that may be relevant with
      respect to an investment in ADSs. This summary does not discuss all the tax
      consequences that may be relevant to a US holder in light of such holder’s
      particular circumstances or to US holders subject to special rules, including
      persons that are non-US holders, broker dealers, financial institutions, certain
      insurance companies, investors liable for alternative minimum tax, tax exempt
      organisations, regulated investment companies, non-resident aliens of the US
      or
      taxpayers whose functional currency is not the dollar, persons who hold ADSs
      through partnerships or other pass-through entities, persons who acquired their
      ADSs through the exercise or cancellation of employee stock options or otherwise
      as compensation for services, investors that actually or constructively own
      10%
      or more of Trinity Biotech’s voting shares, and investors holding ADSs as part
      of a straddle or appreciated financial position or as part of a hedging or
      conversion transaction.





If
      a
      partnership or an entity treated as a partnership for US federal income tax
      purposes owns ADSs, the US federal income tax treatment of a partner in such
      a
      partnership will generally depend upon the status of the partner and the
      activities of the partnership. A partnership that owns ADSs, the partners in
      such partnership should consult their tax advisors about the US federal income
      tax consequences of holding and disposing of ADSs.





This
      summary does not address the effect of any US federal taxation other than US
      federal income taxation. In addition, this summary does not include any
      discussion of state, local or foreign taxation. You are urged to consult your
      tax advisors regarding the foreign and US federal, state and local tax
      considerations of an investment in ADSs.





For
      US
      federal income tax purposes, US Holders of Trinity Biotech ADSs will be treated
      as owning the underlying Class ‘A’ Ordinary Shares, represented by the ADSs held
      by them. The gross amount of any distribution made by Trinity Biotech to US
      Holders with respect to the underlying shares represented by the ADSs held
      by
      them, including the amount of any Irish taxes withheld from such distribution,
      will be treated for US federal income tax purposes as a dividend to the extent
      of Trinity Biotech's current and accumulated earnings and profits, as determined
      for US federal income tax purposes. The amount of any such distribution that
      exceeds Trinity Biotech’s current and accumulated earnings and profits will be
      applied against and reduce a US Holder’s tax basis in the holder’s ADSs, and any
      amount of the distribution remaining after the holder’s tax basis has been
      reduced to zero will constitute capital gain. The capital gain will be treated
      as a long-term, or short-term, capital gain depending on whether or not the
      holder’s ADSs have been held for more than one year as of the date of the
      distribution.





Dividends
      paid by Trinity Biotech generally will not qualify for the dividends received
      deduction otherwise available to US corporate shareholders.





Subject
      to complex limitations, any Irish withholding tax imposed on such dividends
      will
      be a foreign income tax eligible for credit against a US Holder's US federal
      income tax liability (or, alternatively, for deduction against income in
      determining such tax liability). The limitations set out in the Code include
      computational rules under which foreign tax credits allowable with respect
      to
      specific classes of income cannot exceed the US federal income taxes otherwise
      payable with respect to each such class of income. Dividends generally will
      be
      treated as foreign-source passive category income or, in the case of certain
      US
      Holders, general category income for US foreign tax credit purposes. Further,
      there are special rules for computing the foreign tax credit limitation of
      a
      taxpayer who receives dividends subject to a reduced tax, see discussion below.


44


A
      US
      Holder will be denied a foreign tax credit with respect to Irish income tax
      withheld from dividends received on the ordinary shares to the extent such
      US
      Holder has not held the ordinary shares for at least 16 days of the 31-day
      period beginning on the date which is 15 days before the ex-dividend date or
      to
      the extent such US Holder is under an obligation to make related payments with
      respect to substantially similar or related property. Any days during which
      a US
      Holder has substantially diminished its risk of loss on the ordinary shares
      are
      not counted toward meeting the 16-day holding period required by the statute.
      The rules relating to the determination of the foreign tax credit are complex,
      and you should consult with your personal tax advisors to determine whether
      and
      to what extent you would be entitled to this credit.





Subject
      to certain limitations, “qualified dividend income” received by a noncorporate
      US Holder in tax years beginning on or before December 31, 2010 will be subject
      to tax at a reduced maximum tax rate of 15%. Distributions taxable as dividends
      paid on the ordinary shares should qualify for the 15% rate provided that
      either: (i) we are entitled to benefits under the income tax treaty between
      the
      United States and Ireland (the "Treaty") or (ii) the ADSs are readily tradable
      on an established securities market in the US and certain other requirements
      are
      met. We believe that we are entitled to benefits under the Treaty and that
      the
      ADSs currently are readily tradable on an established securities market in
      the
      US. However, no assurance can be given that the ordinary shares will remain
      readily tradable. The rate reduction does not apply unless certain holding
      period requirements are satisfied. With respect to the ADSs, the US Holder
      must
      have held such ADSs for at least 61 days during the 121-day period beginning
      60
      days before the ex-dividend date. The rate reduction also does not apply to
      dividends received from passive foreign investment companies, see discussion
      below, or in respect of certain hedged positions or in certain other situations.
      The legislation enacting the reduced tax rate contains special rules for
      computing the foreign tax credit limitation of a taxpayer who receives dividends
      subject to the reduced tax rate. US Holders of Trinity Biotech ADSs should
      consult their own tax advisors regarding the effect of these rules in their
      particular circumstances.





Upon
      a
      sale or exchange of ADSs, a US Holder will recognise a gain or loss for US
      federal income tax purposes in an amount equal to the difference between the
      amount realised on the sale or exchange and the holder’s adjusted tax basis in
      the ADSs sold or exchanged. Such gain or loss generally will be capital gain
      or
      loss and will be long-term or short-term capital gain or loss depending on
      whether the US Holder has held the ADSs sold or exchanged for more than one
      year
      at the time of the sale or exchange.





For
      US
      federal income tax purposes, a foreign corporation is treated as a “passive
      foreign investment company” (or PFIC) in any taxable year in which, after taking
      into account the income and assets of the corporation and certain of its
      subsidiaries pursuant to the applicable "look through" rules, either (1) at
      least 75% of the corporation’s gross income is passive income or (2) at least
      50% of the average value of the corporation’s assets is attributable to assets
      that produce passive income or are held for the production of passive income.
      Based on the nature of its present business operations, assets and income,
      Trinity Biotech believes that it is not currently subject to treatment as a
      PFIC. However, no assurance can be given that changes will not occur in Trinity
      Biotech’s business operations, assets and income that might cause it to be
      treated as a PFIC at some future time.





If
      Trinity Biotech were to become a PFIC, a US Holder of Trinity Biotech ADSs
      would
      be required to allocate to each day in the holding period for such holder’s ADSs
      a pro rata portion of any distribution received (or deemed to be received)
      by
      the holder from Trinity Biotech, to the extent the distribution so received
      constitutes an “excess distribution,” as defined under US federal income tax
      law. Generally, a distribution received during a taxable year by a US Holder
      with respect to the underlying shares represented by any of the holder’s ADSs
      would be treated as an “excess distribution” to the extent that the distribution
      so received, plus all other distributions received (or deemed to be received)
      by
      the holder during the taxable year with respect to such underlying shares,
      is
      greater than 125% of the average annual distributions received by the holder
      with respect to such underlying shares during the three preceding years (or
      during such shorter period as the US Holder may have held the ADSs). Any portion
      of an excess distribution that is treated as allocable to one or more taxable
      years prior to the year of distribution during which Trinity Biotech was
      classified as a PFIC would be subject to US federal income tax in the year
      in
      which the excess distribution is made, but it would be subject to tax at the
      highest tax rate applicable to the holder in the prior tax year or years. The
      holder also would be subject to an interest charge, in the year in which the
      excess distribution is made, on the amount of taxes deemed to have been deferred
      with respect to the excess distribution. In addition, any gain recognised on
      a
      sale or other disposition of a US Holder’s ADSs, including any gain recognised
      on a liquidation of Trinity Biotech, would be treated in the same manner as
      an
      excess distribution. Any such gain would be treated as ordinary income rather
      than as capital gain. Finally, the 15% reduced US federal income tax rate
      otherwise applicable to dividend income as discussed above, will not apply
      to
      any distribution made by Trinity Biotech in any taxable year in which it is
      a
      PFIC (or made in the taxable year following any such year), whether or not
      the
      distribution is an “excess distribution”.


45





If
      Trinity Biotech became a PFIC, a US Holder may make a "qualifying electing
      fund"
      election in the year Trinity Biotech first becomes a PFIC or in the year the
      holder acquires the shares, whichever is later. This election provides for
      a
      current inclusion of Trinity Biotech's ordinary income and capital gain income
      in the US Holder’s US taxable income. In return, any gain on sale or other
      disposition of a US Holder’s ADSs in Trinity Biotech, if it were classified as a
      PFIC, will be treated as capital, and the interest penalty will not be imposed.
      This election is not made by Trinity Biotech, but by each US
      Holder.




Alternatively,
      if the ADSs are considered “marketable stock” a US Holder may elect to
“mark-to-market” its ADSs, and such US Holder would not be subject to the rules
      described above. Instead, such US Holder would generally include in income
      any
      excess of the fair market value of the ADSs at the close of each tax year over
      its adjusted basis in the ADSs. If the fair market value of the ADSs had
      depreciated below the US Holders adjusted basis at the close of the tax year,
      the US Holder may generally deduct the excess of the adjusted basis of the
      ADSs
      over its fair market value at that time. However, such deductions generally
      would be limited to the net mark-to-market gains, if any, that the US Holder
      included in income with respect to such ADSs in prior years. Income recognized
      and deductions allowed under the mark-to-market provisions, as well as any
      gain
      or loss on the disposition of ADSs with respect to which the mark-to-market
      election is made, is treated as ordinary income or loss (except that loss is
      treated as capital loss to the extent the loss exceeds the net mark-to-market
      gains, if any, that a US Holder included in income with respect to such ordinary
      shares in prior years). However, gain or loss from the disposition of ordinary
      shares (as to which a “mark-to-market” election was made) in a year in which
      Trinity Biotech is no longer a PFIC, will be capital gain or loss. The ADSs
      should be considered “marketable stock” if they traded at least 15 days during
      each calendar quarter of the relevant calendar year in more than de minimis
      quantities.





If
      Trinity Biotech were to become a CFC, each US Holder treated as a US Ten-percent
      Shareholder would be required to include in income each year such US Ten-percent
      Shareholder’s pro rata share of Trinity Biotech’s undistributed “Subpart F
      income.” For this purpose, Subpart F income generally would include interest,
      original issue discount, dividends, net gains from the disposition of stocks
      or
      securities, net gains on forward and option contracts, receipts with respect
      to
      securities loans and net payments received with respect to equity swaps and
      similar derivatives.





Any
      undistributed Subpart F income included in a US Holder’s income for any year
      would be added to the tax basis of the US Holder’s ADSs. Amounts distributed by
      Trinity Biotech to the US Holder in any subsequent year would not be subject
      to
      further US federal income tax in the year of distribution, to the extent
      attributable to amounts so included in the US Holder’s income in prior years
      under the CFC rules but would be treated, instead, as a reduction in the tax
      basis of the US Holder’s ADSs, the PFIC rules discussed above would not apply to
      any undistributed Subpart F income required to be included in a US Holder’s
      income under the CFC rules, or to the amount of any distributions received
      from
      Trinity Biotech that were attributable to amounts so included.





Distributions
      made with respect to underlying shares represented by ADSs may be subject to
      information reporting to the US Internal Revenue Service and to US backup
      withholding tax at a rate equal to the fourth lowest income tax rate applicable
      to individuals (which, under current law, is 28%). Backup withholding will
      not
      apply, however, if the holder (i) is a corporation or comes within certain
      exempt categories, and demonstrates its eligibility for exemption when so
      required, or (ii) furnishes a correct taxpayer identification number and makes
      any other required certification.





Backup
      withholding is not an additional tax. Amounts withheld under the backup
      withholding rules may be credited against a US Holder’s US tax liability, and a
      US Holder may obtain a refund of any excess amounts withheld under the backup
      withholding rules by filing the appropriate claim for refund with the Internal
      Revenue Service.





Any
      US
      Holder who holds 10% or more in vote or value of Trinity Biotech will be subject
      to certain additional United States information reporting
      requirements.





US
      Holders may be subject to state or local income and other taxes with respect
      to
      their ownership and disposition of ADSs. US Holders of ADSs should consult
      their
      own tax advisers as to the applicability and effect of any such
      taxes.





46


***Republic
      of Ireland Taxation***





For
      the
      purposes of this summary, an “Irish Holder” means a holder of ordinary shares or
      ADSs evidenced by ADSs that (i) beneficially owns the ordinary shares or ADSs
      registered in their name; (ii) in the case of individual holders, are resident,
      ordinarily resident and domiciled in Ireland under Irish taxation laws; (iii)
      in
      the case of holders that are companies, are resident in Ireland under Irish
      taxation laws; and (iv) are not also resident in any other country under any
      double taxation agreement entered into by Ireland.




For
      Irish
      taxation purposes, Irish Holders of ADSs will be treated as the owners of the
      underlying ordinary shares represented by such ADSs.





Solely
      for the purposes of this summary of Irish Tax Considerations, a “US Holder”
means a holder of ordinary shares or ADSs evidenced by ADSs that (i)
      beneficially owns the ordinary shares or ADSs registered in their name; (ii)
      is
      resident in the United States for the purposes of the Republic of Ireland/United
      States Double Taxation Convention (the Treaty); (iii) in the case of an
      individual holder, is not also resident or ordinarily resident in Ireland for
      Irish tax purposes; (iv) in the case of a corporate holder, is not a resident
      in
      Ireland for Irish tax purposes and is not ultimately controlled by persons
      resident in Ireland; and (v) is not engaged in any trade or business and does
      not perform independent personal services through a permanent establishment
      or
      fixed base in Ireland.




The
      Board
      of Directors does not expect to pay dividends for the foreseeable future. Should
      Trinity Biotech begin paying dividends, such dividends will generally be subject
      to a 20% withholding tax (DWT). Under current legislation, where DWT applies
      Trinity Biotech will be responsible for withholding it at source. DWT will
      not
      apply where an exemption applies and where Trinity Biotech has received all
      necessary documentation from the recipient prior to payment of the
      dividend.





Corporate
      Irish Holders will generally be entitled to claim an exemption from DWT by
      delivering a declaration, which confirms that the company is resident in Ireland
      for tax purposes, to Trinity Biotech in the form prescribed by the Irish Revenue
      Commissioners. Such corporate Irish Holders will generally not otherwise be
      subject to Irish tax in respect of dividends received.




Individual
      Irish Holders will be subject to income tax on the gross amount of any dividend
      (that is the amount of the dividend received plus any DWT withheld), at their
      marginal rate of tax (currently either 20% or 41% depending on the individual’s
      circumstances). Individual Irish Holders will be able to claim a credit against
      their resulting income tax liability in respect of DWT withheld. Individual
      Irish Holders may, depending on their circumstances, also be subject to the
      Irish health levy of up to 2.5% and pay related social insurance contribution
      of
      up to 3% in respect of their dividend income.





Shareholders
      who are individuals resident in the US (and certain other countries) and who
      are
      not resident or ordinarily resident in Ireland may receive dividends free of
      DWT
      where the shareholder has provided Trinity Biotech with the relevant declaration
      and residency certificate required by legislation.





Corporate
      shareholders that are not resident in Ireland and who are ultimately controlled
      by persons resident in the US (or certain other countries) or corporate holders
      of ordinary shares resident in a relevant territory (being a country with which
      Ireland has a double tax treaty, which includes the United States) or resident
      in a member state of the European Union other than Ireland which are not
      controlled by Irish residents or whose principal class of shares or its 75%
      parent’s principal class of shares are substantially or regularly traded on a
      recognised stock exchange in a country with which Ireland has a tax treaty,
      may
      receive dividends free of DWT where they provide Trinity Biotech with the
      relevant declaration, auditors’ certificate and Irish Revenue Commissioners’
certificate or a certificate from the tax authority in the relevant territory
      as
      required by Irish law.





US
      resident holders of ordinary shares (as opposed to ADSs) should note that these
      documentation requirements may be burdensome. As described below, these
      documentation requirements do not apply in the case of holders of ADSs. US
      resident holders who do not comply with the documentation requirements or
      otherwise do not qualify for an exemption may be able to claim treaty benefits
      under the treaty. US resident holders who are entitled to benefits under the
      treaty will be able to claim a partial refund of DWT from the Irish Revenue
      Commissioners.


47


Special
      DWT arrangements are available in the case of shares held by US resident holders
      in Irish companies through American depository banks using ADSs who enter into
      intermediary agreements with the Irish Revenue Commissioners and hence such
      banks are viewed as qualifying intermediaries under Irish Tax
      legislation.


Under
      such agreements, American depository banks who receive dividends from Irish
      companies and pay the dividends on to the US resident ADS holders are allowed
      to
      receive and pass on a dividend from the Irish company on a gross basis (without
      any withholding) if:





·
            the
                depository bank’s ADS register shows that the direct beneficial owner of
                the dividends has a US address on the register,
                or


·
            there
                is an intermediary between the depository bank and the beneficial
                shareholder and the depository bank receives confirmation from the
                intermediary that the beneficial shareholder’s address in the
                intermediary’s records is in the
                US.





Where
      the
      above procedures have not been complied with and DWT is withheld from dividend
      payments to US Holders of ordinary shares or ADSs evidenced by ADSs, such US
      Holders can apply to the Irish Revenue Commissioners claiming a full refund
      of
      DWT paid by filing a declaration, a certificate of residency and, in the case
      of
      US Holders that are corporations, an auditor’s certificate, each in the form
      prescribed by the Irish Revenue Commissioners.




The
      DWT
      rate applicable to US Holders is reduced to 5% under the terms of the Treaty
      for
      corporate US Holders holding 10% or more of our voting shares, and to 15% for
      other US Holders. While this will, subject to the application of Article 23
      of
      the Treaty, generally entitle US Holders to claim a partial refund of DWT from
      the Irish Revenue Commissioners, US Holders will, in most circumstances, likely
      prefer to seek a full refund of DWT under Irish domestic legislation.





Under
      the
      Irish Taxes Consolidation Act 1997, non-Irish shareholders may, unless exempted,
      be liable to DWT tax on dividends received from Trinity Biotech. Such a
      shareholder will not suffer DWT on dividends if the shareholder is:


·
            an
                individual resident in the US (or certain other countries with which
                Ireland has a double taxation treaty) and who is neither resident
                nor
                ordinarily resident in Ireland; or


·
            a
                corporation that is not resident in Ireland and which is ultimately
                controlled by persons resident in the US (or certain other countries
                with
                which Ireland has a double taxation treaty);
                or


·
            a
                corporation that is not resident in Ireland and whose principal class
                of
                shares (or its 75% parent’s principal class of shares) are substantially
                or regularly traded on a recognised stock exchange;
                or


·
            is
                otherwise entitled to an exemption from
                DWT.





*Disposals
      of Ordinary Shares or ADSs*


Irish
      Holders that acquire ordinary shares or ADSs will generally be considered,
      for
      Irish tax purposes, to have acquired their ordinary shares or ADSs at a base
      cost equal to the amount paid for the ordinary shares or ADSs. On subsequent
      dispositions, ordinary shares or ADSs acquired at an earlier time will generally
      be deemed, for Irish tax purposes, to be disposed of on a “first in first out”
basis before ordinary shares or ADSs acquired at a later time. Irish Holders
      that dispose of their ordinary shares or ADSs will be subject to Irish capital
      gains tax (CGT) to the extent that the proceeds realised from such disposition
      exceed the indexed base cost of the ordinary shares or ADSs disposed of and
      any
      incidental expenses. The current rate of CGT is 20%. Indexation of the base
      cost
      of the ordinary shares or ADSs will only be available up to December 31, 2002,
      and only in respect of ordinary shares or ADSs held for more than 12 months
      prior to their disposal.





Irish
      Holders that have unutilised capital losses from other sources in the current,
      or any previous tax year, can generally apply such losses to reduce gains
      realised on the disposal of the ordinary shares or ADSs.





An
      annual
      exemption allows individuals to realise chargeable gains of up to €1,270 in each
      tax year without giving rise to CGT. This exemption is specific to the
      individual and cannot be transferred between spouses. Irish Holders are
      required, under Ireland’s self-assessment system, to file a tax return reporting
      any chargeable gains arising to them in a particular tax year.





Where
      disposal proceeds are received in a currency other than euro they must be
      translated into amounts to calculate the amount of any chargeable gain or loss.
      Similarly, acquisition costs denominated in a currency other than euro must
      be
      translated at the date of acquisition in euro amounts.




48


Irish
      Holders that realise a loss on the disposition of ordinary shares or ADSs will
      generally be entitled to offset such allowable losses against capital gains
      realised from other sources in determining their CGT liability in a year.
      Allowable losses which remain unrelieved in a year may generally be carried
      forward indefinitely for CGT purposes and applied against capital gains in
      future years.





Transfers
      between spouses will not give rise to any chargeable gain or loss for CGT
      purposes with the acquiring spouse acquiring the same pro rata base cost and
      acquisition date as that of the transferring spouse.





US
      Holders will not be subject to Irish capital gains tax (CGT) on the disposal
      of
      ordinary shares or ADSs provided that such ordinary shares or ADSs are quoted
      on
      a stock exchange at the time of disposition. A stock exchange for this purpose
      includes, among others, the Irish Stock Exchange (the ISE) or the Nasdaq
      National Market (NASDAQ). While it is our intention to continue the quotation
      of
      our ordinary shares on the ISE and the quotation of ADSs on NASDAQ, no
      assurances can be given in this regard.





If,
      for
      any reason, our ADSs cease to be quoted on NASDAQ and our ordinary shares cease
      to be quoted on the ISE, US Holders will not be subject to CGT on the disposal
      of their ordinary shares or ADSs provided that the ordinary shares or ADSs
      do
      not, at the time of the disposal, derive the greater part of their value from
      land, buildings, minerals, or mineral rights or exploration rights in Ireland.





A
      gift or
      inheritance of ordinary shares will be or in the case of ADSs may be within
      the
      charge to capital acquisitions tax, regardless of where the disponer or the
      donee/successor in relation to the gift/inheritance is domiciled, resident
      or
      ordinarily resident **.** The
      capital acquisitions tax is charged at a rate of 20% on the taxable value of
      the
      gift or inheritance above a tax-free threshold. This tax-free threshold is
      determined by the amount of the current benefit and of previous benefits,
      received within the group threshold since December 5, 1991, which are within
      the
      charge to the capital acquisitions tax and the relationship between the former
      holder and the successor. Gifts and inheritances between spouses are not subject
      to the capital acquisitions tax. Gifts of up to €3,000 can be received each year
      from any given individual without triggering a charge to capital acquisitions
      tax. Where a charge to Irish CGT and capital acquisitions tax arises on the
      same
      event, capital acquisitions tax payable on the event can be reduced by the
      amount of the CGT payable. There should be no clawback of the same event credit
      of CGT offset against capital acquisitions tax provided the donee/successor
      does
      not dispose of the ordinary shares or ADRs within two years from the date of
      gift/inheritance.





The
      Estate Tax Convention between Ireland and the United States generally provides
      for Irish capital acquisitions tax paid on inheritances in Ireland to be
      credited, in whole or in part, against tax payable in the United States, in
      the
      case where an inheritance of ordinary shares or ADSs is subject to both Irish
      capital acquisitions tax and US federal estate tax. The Estate Tax Convention
      does not apply to Irish capital acquisitions tax paid on gifts.





Irish
      stamp duty, which is a tax imposed on certain documents, is payable on all
      transfers of ordinary shares of an Irish registered company (other than
      transfers made between spouses, transfers made between 90% associated companies,
      or certain other exempt transfers) regardless of where the document of transfer
      is executed. Irish stamp duty is also payable on electronic transfers of
      ordinary shares. A transfer of ordinary shares made as part of a sale or gift
      will generally be stampable at the ad valorem rate of 1% of the value of the
      consideration received for the transfer, or, if higher, the market value of
      the
      shares transferred. A minimum stamp duty of €1.00 will apply to a transfer of
      ordinary shares. Where the consideration for a sale is expressed in a currency
      other than euro, the duty will be charged on the euro equivalent calculated
      at
      the rate of exchange prevailing at the date of the transfer.




Transfers
      of ordinary shares where no beneficial interest passes (e.g. a transfer of
      shares from a beneficial owner to a nominee), will generally be exempt from
      stamp duty if the transfer form contains an appropriate certification, otherwise
      a nominal stamp duty rate of €12.50 will apply.





Transfers
      of ADSs are exempt from Irish stamp duty as long as the ADSs are quoted on
      any
      recognised stock exchange in the US or Canada.




49


Transfers
      of ordinary shares from the Depositary or the Depositary’s custodian upon
      surrender of ADSs for the purposes of withdrawing the underlying ordinary shares
      from the ADS system, and transfers of ordinary shares to the Depositary or
      the
      Depositary’s custodian for the purposes of transferring ordinary shares onto the
      ADS system, will be stampable at the ad valorem rate of 1% of the value of
      the
      shares transferred if the transfer relates to a sale or contemplated sale or
      any
      other change in the beneficial ownership of ordinary shares. Such transfers
      will
      be exempt from Irish stamp duty if the transfer does not relate to or involve
      any change in the beneficial ownership in the underlying ordinary shares and
      the
      transfer form contains the appropriate certification. In the absence of an
      appropriate certification, stamp duty will be applied at the nominal rate of
      €12.50.




The
      person accountable for the payment of stamp duty is the transferee or, in the
      case of a transfer by way of gift or for consideration less than the market
      value, both parties to the transfer. Stamp duty is normally payable within
      30
      days after the date of execution of the transfer. Late or inadequate payment
      of
      stamp duty will result in liability for interest, penalties and
      fines.





**Dividend
      Policy**





Since
      its
      inception Trinity Biotech has not declared or paid dividends on its ‘A’ Ordinary
      Shares. Trinity Biotech anticipates, for the foreseeable future, that it will
      retain any future earnings in order to fund the business operations of the
      Group. Trinity Biotech does not, therefore, anticipate paying any cash or share
      dividends on its ‘A’ Ordinary Shares in the foreseeable future.





Any
      cash
      dividends or other distributions, if made, are expected to be made in US
      Dollars, as provided for by the Articles of Association.


**Documents
      on Display**





This
      annual report and the exhibits thereto and any other document that we have
      to
      file pursuant to the Exchange Act may be inspected without charge and copied
      at
      prescribed rates at the Securities and Exchange Commission public reference
      room
      at 100 F Street, N.E., Room 1580, Washington, D.C. 20549; and on the Securities
      and Exchange Commission Internet site (http://www.sec.gov). You may obtain
      information on the operation of the Securities and Exchange Commission’s public
      reference room in Washington, D.C. by calling the Securities and Exchange
      Commission at 1-800-SEC-0330 or by visiting the Securities and Exchange
      Commission’s website at http://www.sec.gov, and may obtain copies of our filings
      from the public reference room by calling (202) 551-8090. The Exchange Act
      file
      number for our Securities and Exchange Commission filings is 000-22320.





**Item
      11**


**Qualitative
      and Quantitative Disclosures about Market Risk**





**Qualitative
      information about Market Risk**


Trinity
      Biotech’s treasury policy is to manage financial risks arising in relation to or
      as a result of underlying business needs. The activities of the treasury
      function, which does not operate as a profit centre, are carried out in
      accordance with board approved policies and are subject to regular internal
      review. These activities include the Group making use of spot and forward
      foreign exchange markets.





Trinity
      Biotech uses a range of financial instruments (including cash, bank borrowings,
      convertible notes, promissory notes and finance leases) to fund its operations.
      These instruments are used to manage the liquidity of the Group in a cost
      effective, low-risk manner. Working capital management is a key additional
      element in the effective management of overall liquidity. Trinity Biotech does
      not trade in financial instruments or derivatives.





The
      main
      risks arising from the utilisation of these financial instruments are interest
      rate risk, liquidity risk and foreign exchange risk.





Trinity
      Biotech’s reported net income, net assets and gearing (net debt expressed as a
      percentage of shareholders’ equity) are all affected by movements in foreign
      exchange rates.







50


Trinity
      Biotech borrows in appropriate currencies at fixed and floating rates of
      interest. Year-end borrowings, net of cash and cash equivalents and restricted
      cash totalled US$26,973,000 (2005: US$8,247,000) at interest rates ranging
      from
      3% to 6.87% and including US$2,377,000 of fixed rate debt at interest rates
      ranging from 3% to 5% (2005: US$9,714,000 at interest rates ranging from 3%
      to
      5%) ***.*** In broad
      terms, a one-percentage point increase in interest rates would increase interest
      income by US$183,000 (2005: US$189,000) and increase the interest expense by
      US$433,000 (2005: US$174,000).





Long-term
      borrowing requirements are met by funding in the US and Ireland. Short-term
      borrowing requirements are primarily drawn under committed bank facilities.
      At
      the year-end, 27% of gross debt fell due for repayment within one year.




The
      majority of the Group’s activities are conducted in US Dollars. The primary
      foreign exchange risk arises from the fluctuating value of the Group’s euro
      denominated expenses as a result of the movement in the exchange rate between
      the US Dollar and the euro. Arising from this, where considered necessary,
      the
      Group on occasions pursues a treasury policy which aims to sell US Dollars
      forward to match a portion of its uncovered euro expenses at exchange rates
      lower than budgeted exchange rates. These forward contracts are cashflow hedging
      instruments whose objective is to cover a portion of these euro forecasted
      transactions. There were no forward contracts in place at December 31, 2006.
      With an increasing level of euro denominated sales, the Group anticipates that,
      over the next three years, a higher proportion of its non-US Dollar expenses
      will be matched by non-US Dollar revenues. The Group had foreign currency
      denominated cash balances equivalent to US$952,000 at December 31, 2006 (2005:
      US$1,486,000).





**Quantitative
      information about Market Risk**







**Interest
      rate sensitivity**


Trinity
      Biotech monitors its exposure to changes in interest and exchange rates by
      estimating the impact of possible changes on reported profit before tax and
      net
      worth. The Group accepts interest rate and currency risk as part of the overall
      risks of operating in different economies and seeks to manage these risks by
      following the policies set above.





Trinity
      Biotech estimates that the maximum effect of a rise of one percentage point
      in
      one of the principal interest rates to which the Group is exposed, without
      making any allowance for the potential impact of such a rise on exchange rates,
      would be a decrease in profit before tax for 2006 by approximately
      3%.





The
      table
      below provides information about the Group’s long term debt obligations that are
      sensitive to changes in interest rates. The table presents principal cash flows
      and related weighted average interest rates by expected maturity dates. Weighted
      average variable rates are based on rates set at the balance sheet date. The
      information is presented in US Dollars, which is Trinity Biotech’s reporting
      currency.





***Group***
              ***Maturity***
              ***Before
                December 31***
            ***2007***
            ***2008***
            ***2009***
            ***2010***
            ***2011***
            ***After
                2012***
            ***Total***
            ***Fair***
              ***value*****Long-term
                debt**Variable
                rate - US$000
            10,109
            8,146
            8,183
            8,221
            8,258
            -
            42,917
            42,917Average
                interest rate
            6.75%
            6.75%
            6.75%
            6.75%
            6.75%
            **-**
            6.75%Fixed
                rate - US$000
            2,109
            243
            25
            -
            -
            -
            2,377
            2,373Average
                interest rate
            3.30%
            5.34%
            6.96%
            -
            -
            -
            3.55%





**Exchange
      rate sensitivity**


At
      year-end 200 6,
      approximately 11% of the Group’s US$167,262,000 net worth (shareholders’ equity)
      was denominated in currencies other than the US Dollar, principally the euro.





A
      strengthening or weakening of the US Dollar by 10% against all the other
      currencies in which the Group operates would not materially reduce the Group’s
      2006 year-end net worth.




51


**Item
      12**


***Description
      of Securities Other than Equity Securities***


Not
      applicable.





**Part
      II**





**Item
      13**


***Defaults,
      Dividend Arrearages and Delinquencies***


Not
      applicable.





**Item
      14**


***Material
      Modifications to the Rights of Security Holders and Use of
      Proceeds***


Not
      applicable.





**Item
      15**


***Control
      and Procedures***





***Evaluation
      of Disclosure Controls and Procedures***


The
      Group’s disclosure and control procedures are designed so that information
      required to be disclosed in reports filed or submitted under the Securities
      Exchange Act 1934 is prepared and reported on a timely basis and communicated
      to
      management, to allow timely decisions regarding required disclosure ***.*** Our
      management, with the participation of our Chief Executive Officer and Chief
      Financial Officer, have evaluated the effectiveness of the design and operation
      of our disclosure controls and procedures pursuant to Rule 13a-15(d) of the
      Securities Exchange Act of 1934 as of the end of the period covered by this
      Form
      20-F. As more fully described below, a material weakness has been identified
      in
      our internal control over financial reporting. Consequently, given the overlap
      between disclosure controls and internal control over financial reporting,
      the
      Chief Executive Officer and Chief Financial Officer have concluded that
      disclosure controls and procedures were not effective as of December 31, 2006.





In
      designing and evaluating our disclosure controls and procedures, our management,
      with the participation of the Chief Executive Officer and Chief Financial
      Officer, recognized that any controls and procedures, no matter how well
      designed and operated, can provide only reasonable assurance of achieving the
      desired control objectives, and our management necessarily was required to
      apply
      its judgement in evaluating the cost-benefit relationship of possible controls
      and procedures. Because of the inherent limitations in all control systems,
      no
      evaluation of controls can provide absolute assurance that all control issues
      and instances of fraud, if any, within the Group have been
      detected.





***Management’s
      Report on Internal Control over Financial Reporting***


The
      management of Trinity Biotech are responsible for establishing and maintaining
      adequate internal control over financial reporting. Trinity Biotech’s internal
      control over financial reporting is a process designed under the supervision
      of
      the principal executive and principal financial officers to provide reasonable
      assurance regarding the reliability of financial reporting and preparation
      of
      Trinity Biotech’s financial statements for external reporting purposes in
      accordance with IFRS, as adopted by the EU, with a reconciliation to US
      GAAP.





Management
      has assessed the effectiveness of internal control over financial reporting
      based on the Internal Control - Integrated Framework issued by the Committee
      of
      Sponsoring Organizations of the Treadway Commission (COSO).





As
      part
      of the year end financial statement close process, a material weakness was
      identified in relation to controls concerning revenue recognition from a cut
      off
      perspective. In accordance with Group policy, revenue is recognized when the
      significant risks and rewards of ownership have been transferred to the buyer.
      The Group uses a third party operated logistics provider in China as temporary
      storage for goods in advance of shipment to customers. In some instances the
      goods are collected from this facility by the customer. At year end, the Group
      did not have a control in place to confirm that instructions provided to the
      logistics provider to ensure that all goods had been collected prior to raising
      an invoice had been followed and accordingly did not comply with the Group
      policy. The majority of shipments from this facility, which are made using
      the
      Group’s own freight forwarder, were unaffected by this issue.




52


Given
      the
      size and nature of the issue identified it has been determined that the above
      matter constitutes a material weakness. A material weakness is a control
      deficiency, or combination of control deficiencies, that results in more than
      a
      remote likelihood that a material misstatement of the annual or interim
      financial statements will not be prevented or detected. This weakness was
      identified as part of the preparation of the financial statements for 2006
      and
      has been accounted for correctly in the financial statements presented in Item
      18. Since the issue was identified, the Group has enhanced the controls which
      operate in this area and will be monitoring the effectiveness of these controls
      as part of its compliance with Section 404 of the Sarbanes Oxley Act of 2002.
      Given the existence of the weakness outlined above, management has concluded
      that the Group did not maintain effective internal control over financial
      reporting as of December 31, 2006.





Section
      404 of the Sarbanes Oxley Act 2002 requires our auditors to issue an attestation
      report on our internal control over financial reporting as of December 31,
      2007
      and therefore managements assessment of internal controls over financial
      reporting was not subject to auditor attestation as of December, 31 2006, as
      allowed under Section 404, Sarbanes Oxley Act 2002. Accordingly, no such
      attestation report is included from our auditors regarding internal control
      over
      financial reporting.





Trinity
      Biotech’s internal control over financial reporting includes policies and
      procedures that pertain to the maintenance of records that, in reasonable
      detail, accurately and fairly reflect transactions and dispositions of assets;
      provide reasonable assurances that transactions are recorded as necessary to
      permit preparation of financial statements in accordance with IFRS, as adopted
      by the EU, with a reconciliation to US GAAP, and that receipts and expenditures
      are being made only in accordance with authorization of management and the
      directors of Trinity Biotech; and provide reasonable assurance regarding
      prevention or timely detection of unauthorised acquisition, use or disposition
      of Trinity Biotech’s assets that could have a material effect on our financial
      statements. Because of its inherent limitations, internal control over financial
      reporting may not prevent or detect all misstatements. Also, projections of
      any
      evaluation of the effectiveness of internal control to future periods are
      subject to the risk that controls may become inadequate because of changes
      in
      conditions, and that the degree of compliance with the policies or procedures
      may deteriorate.





***Changes
      in Internal Controls over Financial Reporting***


There
      were no changes to our internal control over financial reporting that occurred
      during the period covered by this Form 20-F that have materially affected,
      or
      are reasonably likely to materially affect, our internal control over financial
      reporting.





**Item
      16**




***16A*** ***Audit
      Committee Financial Expert***


Mr
      Peter
      Coyne is an independent director and a member of the audit
      committee.





Our
      board
      of directors has determined that Mr Peter Coyne meets the definition of an
      audit
      committee financial expert, as defined in Item 401 of Regulation S-K.





This
      determination is made on the basis that Mr Coyne is a Fellow of the Institute
      of
      Chartered Accountants in Ireland and was formerly a senior manager in Arthur
      Andersen’s Corporate Financial Services practice. Mr Coyne is currently a
      director of AIB Corporate Finance, a subsidiary of AIB Group plc, the Irish
      banking group and has extensive experience in advising public and private groups
      on all aspects of corporate strategy.





***16B*** ***Code
      of Ethics***


Trinity
      Biotech has adopted a code of ethics that applies to the Chief Executive
      Officer, Chief Financial Officer, Chief Accounting Officer and all organisation
      employees. Written copies of the code of ethics are available free of charge
      upon request. If we make any substantive amendments to the code of ethics or
      grant any waivers, including any implicit waiver, from a provision of these
      codes to our Chief Executive Officer, Chief Financial Officer or Chief
      Accounting Officer, we will disclose the nature of such amendment or waiver
      on
      our website.





53


***16C*** ***Principal
      Accounting Fees and Services***


*Fees
      Billed by Independent Public Accountants*


The
      following table sets forth, for each of the years indicated, the fees billed
      by
      our independent public accountants and the percentage of each of the fees out
      of
      the total amount billed by the accountants.





*Year
                ended December 31,*
              *2006*
            *Year
                ended December 31,*
              *2005**KPMG
                fees*
              *US$’000*
            %
            *Ernst
                & Young Fees*
              *US$’000*
            *KPMG
                fees*
              *US$’000*
            *Total
                Fees*
              *US$’000*
            *%*Audit
            683
            75%
            511*
            -
            511
            70%Audit-related
            206
            23%
            -
            108
            108
            15%Tax
            20
            2%
            -
            106
            106
            15%Total
            909
            
            511
            214
            725





*
      Audit
      fees billed by Ernst & Young in 2005 relate to the audit of the 2004
      financial statements.




***Pre-Approval
      Policies and Procedures***




Our
      Audit
      Committee has adopted a policy and procedures for the pre-approval of audit
      and
      non-audit services rendered by our independent public accountants, KPMG. The
      policy generally pre-approves certain specific services in the categories of
      audit services, audit-related services, and tax services up to specified
      amounts, and sets requirements for specific case-by-case pre-approval of
      discrete projects, those which may have a material effect on our operations
      or
      services over certain amounts. Pre-approval may be given as part of the Audit
      Committee’s approval of the scope of the engagement of our independent auditor
      or on an individual basis. The pre-approval of services may be delegated to
      one
      or more of the Audit Committee’s members, but the decision must be presented to
      the full Audit Committee at its next scheduled meeting. The policy prohibits
      retention of the independent public accountants to perform the prohibited
      non-audit functions defined in Section 201 of the Sarbanes-Oxley Act or the
      rules of the SEC, and also considers whether proposed services are compatible
      with the independence of the public accountants.





***Exemptions
      from the Listing Requirements and Standards for Audit
      Committee***





Not
      applicable.





***Purchase
      of equity securities by the issuer and affiliates and
      purchasers***





The
      maximum number of shares that may yet be purchased under the Group share option
      plan by Trinity Biotech or on the Group’s behalf at December 31, 2006 was
      7,168,320 (2005: 5,633,037). No shares were purchased by Trinity Biotech or
      on
      our behalf or by any affiliated purchaser in 2006 and 2005. No shares were
      purchased as part of a publicly announced repurchase plan or program in 2006
      and
      2005.








**Part
      III**





**Item
      17**


***Financial
      Statements***





The
      registrant has responded to Item 18 in lieu of responding to this
      item.





**Item
      18**


***Financial
      Statements***


54


**Report
      of Independent Registered Public Accounting Firm**







The
      Board
      of Directors and Shareholders of Trinity Biotech plc





We
      have
      audited the accompanying consolidated ** balance
      sheets of Trinity Biotech plc and subsidiaries (“the Company”) as of December
      31, 2006 and 2005, and the related consolidated statements of income, recognised
      income and expense, and cash flows for each of the years in the two-year period
      ended December 31, 2006. In connection with our audits of the consolidated
      financial statements, we also have audited the financial statement schedule.
      These consolidated financial statements and the financial statement schedule
      are
      the responsibility of the Company’s management. Our responsibility is to express
      an opinion on these consolidated financial statements and the financial
      statement schedule based on our audits.





We
      conducted our audits in accordance with the standards of
      the
      Public Company Accounting Oversight Board ( United
      States ).
      Those
      standards require that we plan and perform the audit to obtain reasonable
      assurance about whether the financial statements are free of material
      misstatement. An audit includes examining, on a test basis, evidence supporting
      the amounts and disclosures in the financial statements. An audit also includes
      assessing the accounting principles used and significant estimates made by
      management, as well as evaluating the overall financial statement presentation.
      We believe that our audits provide a reasonable basis for our
      opinion.




In
      our
      opinion, the consolidated financial statements referred to above present fairly,
      in all material respects, the financial position of Trinity Biotech plc and
      subsidiaries as of December 31, 2006 and 2005, and the results of their
      operations and their cash flows for each of the years in the two-year period
      ended December 31, 2006, in conformity with International Financial Reporting
      Standards as adopted by the European Union. Also in our opinion, the related
      financial statement schedule, when considered in relation to the basic
      consolidated financial statements taken as a whole, presents fairly, in all
      material respects, the information set forth therein.




International
      Financial Reporting Standards as adopted by the European Union vary in certain
      significant respects from U.S. generally accepted accounting principles.
      Information relating to the nature and effect of such differences is presented
      in Note 33 to the consolidated financial statements.







KPMG


Dublin,
      Ireland


May
      8,
      2007


55





Report
      of
      Independent Registered Public Accounting Firm








The
      Board
      of Directors and Shareholders of Trinity Biotech plc





We
      have
      audited the accompanying consolidated statements of income, recognised income
      and expense, and cash flows of Trinity Biotech plc (the “Company”) for the year
      ended December 31, 2004. Our audit also included the financial statement
      schedule included at Item 18. These financial statements and schedule are the
      responsibility of the Company’s management. Our responsibility is to express an
      opinion on these financial statements and schedules based on our
      audit.





We
      conducted our audit in accordance with the standards of the Public Company
      Accounting Oversight Board (United States). Those standards require that we
      plan
      and perform the audit to obtain reasonable assurance about whether the financial
      statements are free of material misstatement. We were not engaged to perform
      an
      audit of the Company’s internal control over financial reporting. Our audit
      included consideration of internal control over financial reporting as a basis
      for designing audit procedures that are appropriate in the circumstances but
      not
      for the purpose of expressing an opinion on the effectiveness of the Company’s
      internal control over financial reporting. Accordingly we express no such
      opinion. An audit also includes examining, on a test basis, evidence supporting
      the amounts and disclosures in the financial statements, assessing the
      accounting principles used and significant estimates made by management, and
      evaluating the overall financial statement presentation. We believe that our
      audit provides a reasonable basis for our opinion.




In
      our
      opinion, the consolidated financial statements referred to above present fairly,
      in all material respects, the consolidated results of operations and cash flows
      of Trinity Biotech plc for the year ended December 31, 2004 in conformity with
      International Financial Reporting Standards as adopted by the European Union,
      which differ in certain respects from U.S. generally accepted accounting
      principles (see Note 33 to the consolidated financial statements). Also, in
      our
      opinion, the related financial statement schedule, when considered in relation
      to the basic financial statements taken as a whole, presents fairly in all
      material respects the information set forth therein.







Ernst
      & Young








Dublin,
      Ireland


March
      31,
      2006











56


**CONSOLIDATED
      INCOME STATEMENTS**








*Year
                ended December**Notes*
            *2006*
              *US$‘000*
            *2005*
              *US$‘000*
            *2004*
              *US$‘000*Revenues
            2
            118,674
            98,560
            80,008Cost
                of sales - including share-based payments (note 19) of US$89,000
                (2005:
                US$110,000) (2004: US$81,000)
            
            (62,090)
            (51,378)
            (40,047)Cost
                of sales - inventory provision
            2(h)
            (5,800)
            -
            -**Gross
                profit**
            
            50,784
            47,182
            39,961Other
                operating income
            4
            275
            161
            302Research
                and development expenses - including share-based payments (note 19)
                of
                US$36,000 (2005: US$210,000) (2004: US$96,000)
            
            (6,696)
            (6,070)
            (4,744)Selling,
                general and administrative expenses - including share-based payments
                (note
                19) of US$1,016,000 (2005: US$1,048,000) (2004:
                US$581,000)
            
            (42,422)
            (34,651)
            (29,332)**Operating
                profit**
            
            1,941
            6,622
            6,187Financial
                income
            3
            1,164
            389
            302Financial
                expenses
            2,
                3
            (2,653)
            (1,058)
            (824)**Net
                financing costs**
            
            (1,489)
            (669)
            (522)**Profit
                before tax**
            5
            452
            5,953
            5,665Income
                tax credit / (expense)
            2,
                8
            2,824
            (673)
            49**Profit
                for the year (all attributable to equity holders)**
            2
            3,276
            5,280
            5,714Basic
                earnings per ordinary share (US Dollars)
            9
            0.05
            0.09
            0.10Diluted
                earnings per ordinary share (US Dollars)
            9
            0.05
            0.09
            0.09Basic
                earnings per ADS (US Dollars)
            9
            0.19
            0.36
            0.41Diluted
                earnings per ADS (US Dollars)
            9
            0.19
            0.35
            0.37


57








**CONSOLIDATED
      STATEMENTS OF RECOGNISED INCOME AND EXPENSE**





*Year
                ended December 31,**Notes*
            *2006*
              *US$‘000*
            *2005*
              *US$‘000*
            *2004*
              *US$‘000*Foreign exchange
              translation differences
            18
            1,347
            (1,740)
            118*Cash
                flow hedges*:Effective
                portion of changes in fair value
            
            226
            (295)
            -Deferred
                tax on income and expenses recognised directly in equity
            
            4
            41
            -***Net
                income/ (expense) recognised directly in
                equity***
            
            1,577
            (1,994)
            118Cash
                flow hedge recycled to the income statement
            
            (166)
            (183)
            -Profit
                for the year
            2
            3,276
            5,280
            5,714***Total
                recognised income and expense (all attributable to equity holders)***
            
            4,687
            3,103
            5,832





As
      more
      fully explained in note 31, financial instrument accounting including the effect
      of deferred tax is determined on a different basis from January 1, 2005 due
      to
      the transitional provisions of IAS 32 and 39.


58








**CONSOLIDATED
      BALANCE SHEETS**





*Notes*
            *December
                31, 2006*
              *US$‘000*
            *December
                31, 2005*
              *US$‘000***ASSETS****Non-current
                assets**Property,
                plant and equipment
            10
            22,255
            19,202Goodwill
                and intangible assets
            11
            121,768
            85,197Deferred
                tax assets
            12
            7,656
            3,277Other
                assets
            13
            76
            61**Total
                non-current assets**
            
            151,755
            107,737**Current
                assets**Inventories
            14
            45,572
            36,450Trade
                and other receivables
            15
            33,115
            20,885Income
                tax receivable
            
            368
            649Financial
                assets - restricted cash
            16
            15,500
            9,000Cash
                and cash equivalents
            17
            2,821
            9,881**Total
                current assets**
            
            97,376
            76,865**TOTAL
                ASSETS**
            2
            249,131
            184,602**EQUITY
                AND LIABILITIES****Equity
                attributable to the equity holders of the parent**Share
                capital
            18
            978
            830Share
                premium
            18
            151,774
            124,227Retained
                earnings
            18
            10,818
            6,280Translation
                reserve
            18
            (275)
            (1,622)Other
                reserves
            18
            3,967
            3,903**Total
                equity**
            
            167,262
            133,618**Current
                liabilities**Interest-bearing
                loans and borrowings
            20
            10,382
            7,720Convertible
                notes-interest bearing
            21
            1,836
            7,203Income
                tax payable
            
            44
            260Trade
                and other payables
            22
            20,459
            12,768Other
                financial liabilities
            23
            3,120
            3,707Derivative
                financial instruments
            31
            -
            44Provisions
            24
            100
            199**Total
                current liabilities**
            
            35,941
            31,901**Non-current
                liabilities**Interest-bearing
                loans and borrowings
            20
            33,076
            10,369Other
                financial liabilities
            23
            2,568
            -Convertible
                notes-interest bearing
            21
            -
            1,836Other
                income tax payable
            
            -
            48Other
                payables
            25
            838
            102Deferred
                tax liabilities
            12
            9,446
            6,728**Total
                non-current liabilities**
            
            45,928
            19,083**TOTAL
                LIABILITIES**
            2
            81,869
            50,984**TOTAL
                EQUITY AND LIABILITIES**
            
            249,131
            184,602







59





**CONSOLIDATED
      STATEMENTS OF CASH FLOWS**


*Year
                ended December 31,**Notes*
            *2006*
              *US$‘000*
            *2005*
              *US$‘000*
            *2004*
              *US$‘000***Cash
                flows from operating activities**Profit
                for the year
            
            3,276
            5,280
            5,714*Adjustments
                to reconcile net profit to cash provided by operating
                activities:*Depreciation
            
            3,736
            2,434
            1,629Amortisation
            
            2,687
            1,803
            1,111Income
                tax (credit)/ expense
            
            (2,824)
            673
            (49)Financial
                income
            
            (1,164)
            (389)
            (302)Financial
                expense
            
            2,653
            1,058
            824Share-based
                payments
            
            1,141
            1,368
            758Foreign
                exchange losses on operating cash flows
            
            (100)
            (292)
            (131)(Profit)/
                loss on disposal / retirement of property, plant and
                equipment
            
            (2)
            469
            14Other
                non-cash items
            
            6,269
            232
            76**Operating
                cash flows before changes in working capital**
            
            **15,672**
            **12,636**
            **9,644**(Increase)/
                decrease in trade and other receivables
            
            (9,962)
            (8,034)
            1,447(Increase)/
                decrease in inventories
            
            (5,434)
            1,311
            (5,883)Increase/
                (decrease) in trade and other payables
            
            8,041
            4,689
            (2,419)**Cash
                generated from operations**
            
            **8,317**
            **10,602**
            **2,789**Interest
                paid
            
            (1,642)
            (972)
            (931)Interest
                received
            
            839
            371
            291Income
                taxes paid
            
            (146)
            (792)
            (1,666)**Net
                cash used in operating activities**
            
            **7,368**
            **9,209**
            **483****Cash
                flows from investing activities**Payments
                to acquire subsidiaries and businesses
            26
            (46,136)
            (13,129)
            (19,090)Cash
                received with subsidiary
            
            -
            127
            -Payments
                to acquire intangible assets
            
            (6,085)
            (5,509)
            (3,601)(Acquisition)
                / disposal of financial assets
            
            (6,500)
            (1,852)
            10,852Proceeds
                from disposal of property, plant and equipment
            
            205
            4
            31Acquisition
                of property, plant and equipment
            
            (4,751)
            (4,039)
            (3,824)**Net
                cash used in investing activities**
            
            **(63,267)**
            **(24,398)**
            **(15,632)****Cash
                flows from financing activities**Proceeds
                from issue of ordinary share capital
            
            25,265
            4,755
            31,708Proceeds
                from borrowings, short-term debt
            
            6,000
            1,800
            -Proceeds
                from borrowings, long-term debt
            
            24,000
            7,200
            -Expenses
                paid in connection with share issue and debt financing
            
            (1,526)
            (195)
            (2,238)Repayment
                of long-term debt
            
            (1,276)
            (1,217)
            (2,214)Proceeds
                from new finance leases
            
            78
            154
            -Payment
                of finance lease liabilities
            
            (276)
            (348)
            (267)Issue
                of convertible debentures
            
            -
            -
            5,000Repayment
                of convertible debt
            
            (3,644)
            (1,822)
            (1,822)Repayment
                of other financial liabilities
            
            -
            (648)
            (2,675)**Net
                cash from financing activities**
            
            **48,621**
            **9,679**
            **27,492**(Decrease)
                / increase in cash and cash equivalents
            
            (7,278)
            (5,510)
            12,343Effects
                of exchange rate movements on cash held
            
            218
            252
            233Cash
                and cash equivalents at beginning of year
            
            9,881
            15,139
            2,563**Cash
                and cash equivalents at end of year**
            17
            **2,821**
            **9,881**
            **15,139**


60


**NOTES
        TO THE CONSOLIDATED FINANCIAL STATEMENTS**
 **DECEMBER
        31, 2006**


1.
              BASIS
                  OF PREPARATION AND SIGNIFICANT ACCOUNTING
                  POLICIES
 
 The
        principal accounting policies adopted by Trinity Biotech plc and its
        subsidiaries, (“the Group”), are as follows:
 
 *a)*
              *Statement
                  of compliance*
 The
        consolidated financial statements have been prepared in accordance with
        International Financial Reporting Standards (IFRS) as adopted by the EU.
        IFRS as
        adopted by the EU differ in certain respects from IFRS as issued by the
        International Accounting Standards Board (“IASB”). However, as none of these
        differences are relevant in the context of Trinity Biotech, the consolidated
        financial statements for the periods presented would be no different had
        IFRS as
        issued by the IASB been applied. An explanation of how the transition to
        compliance with IAS 32 and IAS 39, as adopted by the EU (first applied from
        January 1, 2005), from the old basis of accounting, Irish GAAP (“Previous
        GAAP”), has affected the reported financial position, financial performance and
        cash flows of the Group at January 1, 2005, is provided in note 31.
 
 *b)*
              *Basis
                  of preparation*
 The
          consolidated financial statements have been prepared in United States Dollars
          (US$), rounded to the nearest thousand, under the historical cost basis
          of
          accounting, except for derivative financial instruments and share-based
          payments
          which are initially recorded at fair value.
 
 The
        preparation of financial statements in conformity with IFRS as adopted by
        the EU
        requires management to make judgements, estimates and assumptions that affect
        the application of policies and amounts reported in the financial statements
        and
        accompanying notes. The estimates and associated assumptions are based on
        historical experience and various other factors that are believed to be
        reasonable under the circumstances, the results of which form the basis of
        making the judgements about the carrying value of assets and liabilities
        that
        are not readily apparent from other sources. Actual results may differ from
        these estimates.
 
 The
        estimates and underlying assumptions are reviewed on an ongoing basis. Revisions
        to accounting estimates are recognised in the period in which the estimate
        is
        revised if the revision affects only that period or in the period of the
        revision and future periods if the revision affects both current and future
        periods.
 
 Judgements
        made by management that have a significant effect on the financial statements
        and estimates with a significant risk of material adjustment in the next
        year
        are discussed in note 30.
 
 The
        accounting policies set out below, with the exception of the accounting policies
        relating to financial instruments and convertible notes, have been applied
        consistently to all periods presented in these consolidated financial
        statements. The provisions of IAS 32 and IAS 39 have been applied from January
        1, 2005. See note 31 for an explanation of the transition to IAS 32 and IAS
        39
        from January 1, 2005.
 
 The
        accounting policies have been applied consistently by all Group
        entities.
 
 *c)*
              *Basis
                  of consolidation*
 ***Subsidiaries***
 Subsidiaries
                  are entities controlled by the Company. Control exists when the
                  Company
                  has the power, directly or indirectly, to govern the financial
                  and
                  reporting policies of an entity so as to obtain benefits from its
                  activities. In assessing control, potential voting rights that
                  presently
                  are exercisable or convertible are taken into account. The financial
                  statements of subsidiaries are included in the consolidated financial
                  statements from the date that control commences until the date
                  that
                  control ceases.
 
 ***Transactions
        eliminated on consolidation***
 Intra-group
          balances and any unrealised gains or losses or income and expenses arising
          from
          intra-group transactions are eliminated in preparing the consolidated financial
          statements.
 
 *d)*
              *Property,
                  plant and equipment*
 ***Owned
        assets***
 Items
        of
        property, plant and equipment are stated at cost less any accumulated
        depreciation and any impairment losses (see note 1(h)). The cost of
        self-constructed assets includes the cost of materials, direct labour and
        attributable overheads. It is not Group policy to revalue any items of property,
        plant and equipment.


61
 **NOTES
          TO THE CONSOLIDATED FINANCIAL STATEMENTS**
 **DECEMBER
          31, 2006**





Depreciation
        is charged to the income statement on a straight-line basis to write-off
        the
        cost of the assets over their expected useful lives as follows:
 ·Leasehold
                    improvements
                
                5-10
                    years·Office
                    equipment and fittings
                
                10
                    years·Buildings
                
                50
                    years·Computer
                    equipment
                
                3-5
                    years·Plant
                    and equipment
                
                5-10
                    years
 
 Land
        is
        not depreciated. The residual values, if not insignificant, useful lives
        and
        depreciation methods of property, plant and equipment are reviewed and adjusted
        if appropriate, at each balance sheet date.
 
 ***Leased
        assets - as lessee***
 Leases
        under terms of which the Group assumes substantially all the risks and rewards
        of ownership are classified as finance leases. Property, plant and equipment
        acquired by way of finance lease is stated at an amount equal to the lower
        of
        its fair value and present value of the minimum lease payments at inception
        of
        the lease, less accumulated depreciation and any impairment losses.
 
 Depreciation
        is calculated in order to write-off the amounts capitalised over the estimated
        useful lives of the assets, or the lease term if shorter, by equal annual
        instalments. The excess of the total rentals under a lease over the amount
        capitalised is treated as interest, which is charged to the income statement
        in
        proportion to the amount outstanding under the lease. Leased assets are reviewed
        for impairment (see note 1(h)).
 
 Leases
                  other than finance leases are classified as "operating leases",
                  and the
                  rentals thereunder are charged to the income statement on a straight
                  line
                  basis over the period of the leases. Lease incentives are recognised
                  in
                  the income statement on a straight-line basis over the lease
                  term.
 
 ***Leased
        assets - as lessor***
 Leases
        where the Group substantially transfers the risks and benefits of ownership
        of
        the asset to the customer are classified as finance leases within finance
        lease
        receivables. The Group recognises the amount receivable from assets leased
        under
        finance leases at an amount equal to the net investment in the
        lease. Finance lease income is recognised in the income statement
        reflecting a constant periodic rate of return on the Group’s net investment in
        the lease.
 
 Assets
        provided to customers under leases other than finance leases are classified
        as
        operating leases and carried in property, plant and equipment at cost and
        are
        depreciated on a straight line basis over the useful life or the lease term,
        if
        shorter.
 
 ***Subsequent
        costs***
 The
        Group
        recognises in the carrying amount of an item of property, plant and equipment
        the cost of replacing part of such an item when that cost is incurred if
        it is
        probable that the future economic benefits embodied within the item will
        flow to
        the Group and the cost of the item can be measured reliably. All other costs
        are
        recognised in the income statement as an expense as incurred.
 
 *e)*
              *Business
                  combinations*
 All
        business combinations are accounted for by applying the purchase method.
 
 The
        cost
        of a business combination is measured as the aggregate of the fair values
        at the
        date of exchange of assets given, liabilities incurred or assumed and equity
        instruments issued in exchange for control together with any directly
        attributable expenses. To the extent that settlement of all or any part of
        a
        business combination is deferred for a period of 12 months or longer, the
        fair
        value of the deferred component is determined through discounting the amounts
        payable to their present value at the date of exchange. The discount component
        is unwound as an interest charge in the income statement over the life of
        the
        obligation.
 
 Where
        a
        business combination agreement provides for an adjustment to the cost of
        the
        combination contingent on future events, the estimated present value of the
        adjustment is included in the cost at the acquisition date.
 
 When
        the
        initial accounting for a business combination is determined provisionally,
        any
        subsequent adjustments to the provisional values allocated to the identifiable
        assets, liabilities and contingent liabilities are made within twelve months
        of
        the acquisition date and treated retrospectively as an adjustment to
        goodwill.


62
 **NOTES
          TO THE CONSOLIDATED FINANCIAL STATEMENTS**
 **DECEMBER
          31, 2006**




*f)*
              *Goodwill*
 In
                  respect of business combinations that have occurred since January
                  1, 2004
                  (being the transition date to IFRS), goodwill represents the difference
                  between the cost of the acquisition and the fair value of the net
                  identifiable assets acquired.
 
 In
                  respect of acquisitions prior to this date, goodwill is included
                  on the
                  basis of its deemed cost, which represents the amount recorded
                  under
                  Previous GAAP. Save for retrospective restatement of deferred tax
                  as an
                  adjustment to retained earnings in accordance with IAS 12,*Income
                  Taxes,*the
                  classification and accounting treatment of business combinations
                  undertaken prior to the transition date has not been reconsidered
                  in
                  preparing the Group’s opening IFRS balance sheet as at January 1,
                  2004.
 
 To
                  the extent that the Group’s interest in the net fair value of the
                  identifiable assets, liabilities and contingent liabilities acquired
                  exceeds the cost of a business combination, the identification
                  and
                  measurement of the related assets, liabilities and contingent liabilities
                  are revisited accompanied by a reassessment of the cost of the
                  transaction, and any remaining balance is immediately recognised
                  in the
                  income statement.
 
 At
                  the acquisition date, any goodwill is allocated to each of the
                  cash
                  generating units expected to benefit from the combination’s synergies.
                  Following initial recognition, goodwill is stated at cost less
                  any
                  accumulated impairment losses (see note 1(h)).
 
 *g)*
              *Intangibles,
                  including research and development (other than
                  goodwill)*
 An
                  intangible asset, which is an identifiable non-monetary asset without
                  physical substance, is recognised to the extent that it is probable
                  that
                  the expected future economic benefits attributable to the asset
                  will flow
                  to the Group and that its cost can be measured reliably. The asset
                  is
                  deemed to be identifiable when it is separable (that is, capable
                  of being
                  divided from the entity and sold, transferred, licensed, rented
                  or
                  exchanged, either individually or together with a related contract,
                  asset
                  or liability) or when it arises from contractual or other legal
                  rights,
                  regardless of whether those rights are transferable or separable
                  from the
                  Group or from other rights and obligations.
 
 Intangible
                  assets acquired as part of a business combination are capitalised
                  separately from goodwill if the intangible asset meets the definition
                  of
                  an asset and the fair value can be reliably measured on initial
                  recognition. Subsequent to initial recognition, these intangible
                  assets
                  are carried at cost less any accumulated amortisation and any accumulated
                  impairment losses (note 1(h)). Definite lived intangible assets
                  are
                  reviewed for indicators of impairment annually while indefinite
                  lived
                  assets are tested for impairment annually, either individually
                  or at the
                  cash generating unit level.
 *Research
                  and development*
 Expenditure
                  on research activities, undertaken with the prospect of gaining
                  new
                  scientific or technical knowledge and understanding, is recognised
                  in the
                  income statement as an expense as incurred. Expenditure on development
                  activities, whereby research findings are applied to a plan or
                  design for
                  the production of new or substantially improved products and processes,
                  is
                  capitalised if the product or process is technically and commercially
                  feasible and the Group has sufficient resources to complete the
                  development. The expenditure capitalised includes the cost of materials,
                  direct labour and attributable overheads and third party costs.
                  Subsequent
                  expenditure on capitalised intangible assets is capitalised only
                  when it
                  increases the future economic benefits embodied in the specific
                  asset to
                  which it relates. All other development expenditure is expensed
                  as
                  incurred. Subsequent to initial recognition, the capitalised development
                  expenditure is carried at cost less any accumulated amortisation
                  and any
                  accumulated impairment losses (note 1(h)).
 
 Expenditure
        on internally generated goodwill and brands is recognised in the income
        statement as an expense as incurred.
 
 *Amortisation*
 Amortisation
                  is charged to the income statement on a straight-line basis over
                  the
                  estimated useful lives of intangible assets, unless such lives
                  are
                  indefinite. Other intangible assets are amortised from the date
                  they are
                  available for use. The estimated useful lives are as
                  follows:
 
 §
              Patents
                  and licences
              
              
              6-15
                  years§
              Capitalised
                  development costs
              
              
              15
                  years§
              Other
                  (including acquired customer and supplier lists)
              
              
              6-15
                  years
 
 Certain
                  trade names acquired are deemed to have an indefinite useful
                  life.




63
 **NOTES
          TO THE CONSOLIDATED FINANCIAL STATEMENTS**
 **DECEMBER
          31, 2006**





Where
                  amortisation is charged on assets with finite lives, this expense
                  is taken
                  to the income statement through the ‘selling, general and administrative
                  expenses’ line.
 
 Useful
                  lives are examined on an annual basis and adjustments, where applicable,
                  are made on a prospective basis.
 
 *h)*
              *Impairment*
 The
        carrying amount of the Group’s assets, other than inventories and deferred tax
        assets, are reviewed at each balance sheet date to determine whether there
        is
        any indication of impairment. If any such indication exists, the asset’s
        recoverable amount (being the greater of fair value less costs to sell and
        value
        in use) is assessed at each balance sheet date.
 
 Fair
        value less costs to sell is defined as the amount obtainable from the sale
        of an
        asset or cash-generating unit in an arm’s length transaction between
        knowledgeable and willing parties, less the costs that would be incurred
        in
        disposal. Value in use is defined as the present value of the future cash
        flows
        expected to be derived through the continued use of an asset or cash-generating
        unit. In assessing value in use, the estimated future cash flows are discounted
        to their present value using a pre-tax discount rate that reflects current
        market assessments of the time value of money and the risks specific to the
        asset for which the future cash flow estimates have not yet been adjusted.
        The
        estimates of future cash flows exclude cash inflows or outflows attributable
        to
        financing activities and income tax. For an asset that does not generate
        largely
        independent cash flows, the recoverable amount is determined by reference
        to the
        cash generating unit to which the asset belongs.
 
 For
        goodwill, assets that have an indefinite useful life and intangible assets
        that
        are not yet available for use, the recoverable amount is estimated at each
        balance sheet date at the cash generating unit level. The goodwill and
        indefinite-lived assets were reviewed for impairment at December 31, 2004,
        December 31, 2005 and December 2006. See note 11.
 
 An
        impairment loss is recognised whenever the carrying amount of an asset or
        its
        cash-generating unit exceeds its recoverable amount. Impairment losses are
        recognised in the income statement.
 
 Impairment
        losses recognised in respect of cash-generating units are allocated first
        to
        reduce the carrying amount of any goodwill allocated to cash-generating units
        and then to reduce the carrying amount of other assets in the units on a
        pro-rata basis.
 
 An
        impairment loss is reversed only to the extent that the asset’s carrying amount
        does not exceed the carrying amount that would have been determined, net
        of
        depreciation or amortisation, if no impairment loss had been
        recognised.
 
 An
        impairment loss in respect of goodwill is not reversed.
 
 Following
        recognition of any impairment loss (and on recognition of an impairment loss
        reversal), the depreciation charge applicable to the asset or cash generating
        unit is adjusted prospectively with the objective of systematically allocating
        the revised carrying amount, net of any residual value, over the remaining
        useful life.
 
 *i)*
              *Inventories*
 Inventories
                  are stated at the lower of cost and net realisable value. Cost
                  is based on
                  the first-in, first-out principle and includes all expenditure
                  which has
                  been incurred in bringing the products to their present location
                  and
                  condition, and includes an appropriate allocation of manufacturing
                  overhead based on the normal level of operating capacity. Net realisable
                  value is the estimated selling price of inventory on hand in the
                  ordinary
                  course of business less all further costs to completion and costs
                  expected
                  to be incurred in selling these
                  products.
 
 The
        Group
        provides for inventory, based on estimates of the expected realisability
        of the
        Group’s inventory. The estimated realisability is evaluated on a case-by-case
        basis and any inventory that is approaching its “use-by” date and for which no
        further re-processing can be performed is written off.
 
 *j)*
              *Trade
                  and other receivables*
 Trade
        and
        other receivables are stated at their amortised cost less impairment losses
        incurred. Cost approximates fair value given the short dated nature of these
        assets.
 
 *k)*
              *Trade
                  and other payables*
 Trade
        and
        other payables are stated at cost. Cost approximates fair value given the
        short
        dated nature of these liabilities.


64
 **NOTES
          TO THE CONSOLIDATED FINANCIAL STATEMENTS**
 **DECEMBER
          31, 2006**




*l)*
              *Cash
                  and cash equivalents*
 Cash
        and
        cash equivalents comprise cash balances and short-term deposits with a maturity
        of three months or less. The Group has no short-term bank overdraft facilities.
        Where restrictions are imposed by third parties, such as lending institutions,
        on cash balances held by the Group these are treated as financial assets
        in the
        financial statements.
 
 *m)*
              *Interest-bearing
                  loans and borrowings*
 ***Loans
        and borrowings, including promissory notes***
 From
        January 1, 2005 under IFRS as adopted by the EU, interest-bearing loans,
        borrowings and promissory notes are recognised initially at fair value less
        attributable transaction costs. Subsequent to initial recognition,
        interest-bearing borrowings are stated at amortised cost, with any difference
        between cost and redemption value being recognised in the income statement
        over
        the period of the borrowings on an effective interest basis.
 
 ***Convertible
        notes***
 From
        January 1, 2005 under IFRS as adopted by the EU, convertible notes that can
        be
        converted into share capital at the option of the holder, where the number
        of
        shares issued does not vary with changes in their fair value, are accounted
        for
        as compound financial instruments. Transaction costs that relate to the issue
        of
        a compound financial instrument are allocated to the liability and equity
        components in proportion to the allocation of proceeds. The equity component
        of
        the convertible notes is calculated as the excess of the issue proceeds over
        the
        present value of the future interest and principal payments, discounted at
        the
        market rate of interest applicable to similar liabilities that do not have
        a
        conversion option. The interest expense recognised in the income statement
        is
        calculated using the effective interest rate method.
 
 The
        Group
        has availed of the exemption in IFRS 1 from presenting its financial instruments
        and convertible notes in the comparative information in accordance with IAS
        32
        and IAS 39. The transition date for compliance with IAS 32 and IAS 39 is
        January
        1, 2005. To the extent that the liability element of a compound financial
        instrument was no longer outstanding at January 1, 2005, the date of transition
        to IFRS as adopted by the EU for IAS 32 and IAS 39, the Group has availed
        of the
        exemption in IFRS 1 and the amounts within equity that are attributable to
        the
        equity and liability elements have not been identified separately.
 
 As
        at
        December 31, 2004, in line with Previous GAAP convertible notes are recognised
        and carried at cost less attributable transaction costs.
 
 *n)*
              *Share-based
                  payments*
 For
        equity-settled share-based payments (share options), the Group measures the
        services received and the corresponding increase in equity at fair value
        at the
        measurement date (which is the grant date) using a trinomial model. Given
        that
        the share options granted do not vest until the completion of a specified
        period
        of service, the fair value, which is assessed at the grant date, is recognised
        on the basis that the services to be rendered by employees as consideration
        for
        the granting of share options will be received over the vesting
        period.
 
 The
        share
        options issued by the Group are not subject to market-based vesting conditions
        as defined in IFRS 2, *Share-based
        Payments* .
        Non-market vesting conditions are not taken into account when estimating
        the
        fair value of share options as at the grant date; such conditions are taken
        into
        account through adjusting the number of equity instruments included in the
        measurement of the transaction amount so that, ultimately, the amount recognised
        equates to the number of equity instruments that actually vest. The expense
        in
        the income statement in relation to share options represents the product
        of the
        total number of options anticipated to vest and the fair value of those options;
        this amount is allocated to accounting periods on a straight-line basis over
        the
        vesting period. Given that the performance conditions underlying the Group’s
        share options are non-market in nature, the cumulative charge to the income
        statement is only reversed where the performance condition is not met or
        where
        an employee in receipt of share options relinquishes service prior to completion
        of the expected vesting period. Share based payments, to the extent they
        relate
        to direct labour involved in development activities, are capitalised, see
        1(g).
 
 The
        proceeds received net of any directly attributable transaction costs are
        credited to share capital (nominal value) and share premium when the options
        are
        exercised.
 
 The
        Group
        does not operate any cash-settled share-based payment schemes or share-based
        payment transactions with cash alternatives as defined in IFRS
        2.


65
 **NOTES
          TO THE CONSOLIDATED FINANCIAL STATEMENTS**
 **DECEMBER
          31, 2006**





*o)*
            *Government
                grants*


Grants
                that compensate the Group for expenses incurred such as research
                and
                development, employment and training grants are recognised as revenue
                or
                income in the income statement on a systematic basis in the same
                periods
                in which the expenses are incurred. Grants that compensate the Group
                for
                the cost of an asset are recognised in the income statement as other
                operating income on a systematic basis over the useful life of the
                asset.





*p)*
            *Revenue
                recognition*


***Goods
      sold and services rendered***


Revenue
                from the sale of goods is recognised in the income statement when
                the
                significant risks and rewards of ownership have been transferred
                to the
                buyer. Revenue from products is generally recorded as of the date
                of
                shipment. Revenue is recognised when the Group has satisfied all
                of its
                obligations to the customer. Revenue, including amounts invoiced
                for
                shipping and handling costs, represents the value of goods supplied
                to
                external customers, net of discounts and excluding sales
                taxes.





Revenue
      from services rendered is recognised in the income statement in proportion
      to
      the stage of completion of the transaction at the balance sheet
      date.





Revenue
                is recognised to the extent that it is probable that economic benefit
                will
                flow to the Group, that the risks and rewards of ownership have passed
                to
                the buyer and the revenue can be measured. No revenue is recognised
                if
                there is uncertainty regarding recovery of the consideration due
                at the
                outset of the transaction or the possible return of goods.**





The
      Group
      leases instruments under operating and finance leases as part of its business.
      In cases where the risks and rewards of ownership of the instrument pass to
      the
      customer, the fair value of the instrument is recognised as revenue at the
      time
      of sale matched by the related cost of sale. In the case of operating leases
      of
      instruments which typically involve commitments by the customer to pay a fee
      per
      test run on the instruments, revenue is recognised on the basis of customer
      usage of the instruments. See also note 1(d).





***Other
      operating income***


Rental
      income from sub-leasing premises under operating leases, where the risks and
      rewards of the premises remain with the lessor, is recognised in the income
      statement as other operating income on a straight-line basis over the term
      of
      the lease.





*q)*
            *Employee
                benefits*


***Defined
      contribution plans***


The
                Group operates defined contribution schemes in various locations
                where its
                subsidiaries are based. Contributions to the defined contribution
                schemes
                are recognised in the income statement in the period in which they
                become
                payable.





***Other
                long-term benefits***


Where
                employees participate in the Group’s other long-term benefit schemes (such
                as permanent health insurance schemes under which the scheme insures
                the
                employees), or where the Group contributes to insurance schemes for
                employees, the Group pays an annual fee to a service provider, and
                accordingly the Group expenses such payments as incurred.





*r)*
            *Foreign
                currency*


A
                majority of the revenue of the Group is generated in US Dollars.
                The
                Group’s management has determined that the US dollar is the primary
                currency of the economic environment in which the Company and its
                subsidiaries (with the exception of the Group’s subsidiaries in Germany
                and Sweden) principally operate. Thus the functional currency of
                the
                Company and its subsidiaries (other than those subsidiaries in Germany
                and
                Sweden) is the US Dollar. The functional currency of the German and
                Swedish subsidiaries is the euro and the Swedish Kroner, respectively.
                The
                presentation currency of the Company and Group is the US
                Dollar.





Results
      and cash flows of subsidiary undertakings, which have a functional currency
      other than the US Dollar, are translated into US Dollars at average exchange
      rates for the year, and the related balance sheets have been translated at
      the
      rates of exchange ruling on the balance sheet date. Monetary assets and
      liabilities denominated in foreign currencies are translated at the rates of
      exchange ruling at the balance sheet date. The resulting gains and losses are
      included in the income statement. Non-monetary assets and liabilities that
      are
      measured in terms of historical cost in a foreign currency are translated using
      the exchange rate at the date of the transaction.


66
 **NOTES
          TO THE CONSOLIDATED FINANCIAL STATEMENTS**
 **DECEMBER
          31, 2006**





*s)*
              *Derivative
                  financial instruments*
 The
        Group
        uses derivative financial instruments to hedge its exposure to foreign exchange
        risks. The Group enters into forward contracts to sell US Dollars forward
        for
        euro. The principal exchange risk identified by the Group is with respect
        to
        fluctuations in the euro as a substantial portion of its expenses are
        denominated in euro but its revenues are primarily denominated in US Dollars.
        Trinity Biotech monitors its exposure to foreign currency movements and may
        use
        these forward contracts as cash flow hedging instruments whose objective
        is to
        cover a portion of this euro expense.
 
 At
        the
        inception of a hedging transaction entailing the use of derivatives, the
        Group
        documents the relationship between the hedged item and the hedging instrument
        together with its risk management objective and the strategy underlying the
        proposed transaction. The Group also documents its quarterly assessment of
        the
        effectiveness of the hedge in offsetting movements in the cash flows of the
        hedged items.
 
 From
        January 1, 2005 under IFRS as adopted by the EU, derivative financial
        instruments are recognised at fair value. Where derivatives do not fulfil
        the
        criteria for hedge accounting, they are classified as held-for-trading and
        changes in fair values are reported in the income statement. The fair value
        of
        forward exchange contracts is calculated by reference to current forward
        exchange rates for contracts with similar maturity profiles and equates to
        the
        current market price at the balance sheet date.
 
 The
        portion of the gain or loss on a hedging instrument that is deemed to be
        an
        effective hedge is recognised directly in the hedging reserve in equity and
        the
        ineffective portion is recognised in the income statement. As the forward
        contracts are exercised the net cumulative gain or loss recognised in the
        hedging reserve is transferred to the income statement.
 
 The
        Group
        has availed of the exemption in IFRS 1 and is not presenting comparative
        information for derivative financial instruments in accordance with IAS 32
        and
        IAS 39. The transition date for compliance with IAS 32 and IAS 39 is January
        1,
        2005. In 2004, in line with Previous GAAP where derivatives are used to hedge
        cross-currency cash flows arising from trading activities, the profit or
        loss on
        the derivative was recognised in the income statement when the contract was
        settled.
 
 *t)*
              *Segment
                  reporting*
 A
        segment
        is a distinguishable component of the Group that is engaged either in providing
        products or services (business segment), or in providing products or services
        within a particular economic environment (geographical segment), which is
        subject to risks and returns different to those of other segments. Stemming
        from
        the Group’s internal organisational and management structure and its system of
        internal financial reporting, segmentation by geographic location of assets
        is
        regarded as being the predominant source and nature of the risks and returns
        facing the Group and is thus the primary segment format under IAS 14, *Segment
        Reporting.* Business
        segmentation is therefore the secondary segment format.
 
 *u)*
              *Tax
                  (current and deferred)*
 Income
        tax on the profit or loss for the year comprises current and deferred tax.
        Income tax is recognised in the income statement except to the extent that
        it
        relates to items recognised directly in equity, in which case it is recognised
        in equity.
 
 Current
        tax represents the expected tax payable (or recoverable) on the taxable profit
        for the year using tax rates enacted or substantively enacted at the balance
        sheet date and taking into account any adjustments stemming from prior
        years.
 
 Deferred
        tax is provided on the basis of the balance sheet liability method on all
        temporary differences at the balance sheet date which is defined as the
        difference between the tax bases of assets and liabilities and their carrying
        amounts in the financial statements. Deferred tax assets and liabilities
        are not
        subject to discounting and are measured at the tax rates that are anticipated
        to
        apply in the period in which the asset is realised or the liability is settled
        based on tax rates and tax laws that have been enacted or substantively enacted
        at the balance sheet date. The amount of deferred tax provided is based on
        the
        expected manner of realisation or settlement of the carrying amount of assets
        and liabilities.







67
 **NOTES
          TO THE CONSOLIDATED FINANCIAL STATEMENTS**
 **DECEMBER
          31, 2006**





Deferred
        tax assets and liabilities are recognised for all temporary differences (that
        is, differences between the carrying amount of the asset or liability and
        its
        tax base) with the exception of the following:
 i.
              Where
                  the deferred tax liability arises from goodwill not deductible
                  for tax
                  purposes or the initial recognition of an asset or a liability
                  in a
                  transaction that is not a business combination and affects neither
                  the
                  accounting profit nor the taxable profit or loss at the time of
                  the
                  transaction; and
 ii.
              Where,
                  in respect of temporary differences associated with investments
                  in
                  subsidiary undertakings, the timing of the reversal of the temporary
                  difference is subject to control and it is probable that the temporary
                  difference will not reverse in the foreseeable future.
 
 Where
        goodwill is tax deductible, a deferred tax liability is not recognised on
        initial recognition of goodwill. It is recognised subsequently for the taxable
        temporary difference which arises when the goodwill is amortised for tax
        with no
        corresponding adjustment to the carrying value of the goodwill.
 
 The
        carrying amounts of deferred tax assets are subject to review at each balance
        sheet date and are reduced to the extent that future taxable profits are
        considered to be inadequate to allow all or part of any deferred tax asset
        to be
        utilised.
 
 *v)*
              *Provisions*
 A
        provision is recognised in the balance sheet when the Group has a present
        legal
        or constructive obligation as a result of a past event, and it is probable
        that
        an outflow of economic benefits will be required to settle the obligation.
 
 *w)*
              *Cost
                  of sales*
 Cost
                  of sales comprises product cost including manufacturing and payroll
                  costs,
                  quality control, shipping, handling, and packaging costs and the
                  cost of
                  services provided.
 
 *x)*
              *Finance
                  income and costs*
 Financing
        expenses comprise costs payable on leases, loans and borrowings including
        promissory notes. Interest payable on loans and borrowings, promissory notes
        and
        convertible notes is calculated using the effective interest rate method.
        Interest payable on finance leases is allocated to each period during the
        lease
        term so as to produce a constant periodic rate of interest on the remaining
        balance of the liability.
 
 Finance
                  income comprises interest income on deposits and is recognised
                  in the
                  income statement as it accrues, using the effective interest
                  method.
 
 In
        2004,
        in line with Previous GAAP, interest payable on loans and borrowings and
        convertible notes was recognised in the income statement as they accrued
        using
        the nominal rate of interest. Interest payable on finance leases was allocated
        to each period during the lease term so as to produce a constant period rate
        of
        interest on the remaining balance of the liability.
 
 In
        2004
        in line with Previous GAAP finance income was recognised in the income statement
        as it accrued, using the nominal rate of interest.
 
 *y)*  *Warrant
        reserve*
 The
        Group
        calculates the fair value of warrants at the date of issue taking the amount
        directly to equity. The fair value is calculated using a recognised valuation
        methodology for the valuation of financial instruments (that is, the trinomial
        model). The fair value which is assessed at the grant date is calculated
        on the
        basis of the contractual term of the warrants.
 
 *z)*
              *New
                  IFRS Standards and Interpretations not
                  applied*
 The
        consolidated financial statements have been prepared in accordance with
        International Financial Reporting Standards (“IFRS”) as adopted by the EU. IFRS
        as adopted by the EU differ in certain respects from IFRS as issued by the
        IASB.
        However, the consolidated financial statements for the periods presented
        would
        be no different had we applied IFRS as adopted by the EU. The standards applied
        are those effective for accounting periods ending on or after December 31,
        2006.
 
 The
        IASB
        and IFRIC have issued additional standards and interpretations which are
        effective for periods starting after the date of these financial statements
        and
        some of which have not yet been adopted by the EU. The following standards
        and
        interpretations have yet to be adopted by the Group:


68
 **NOTES
          TO THE CONSOLIDATED FINANCIAL STATEMENTS**
 **DECEMBER
          31, 2006**





***International
                  Financial Reporting Standards (IFRS/IAS)***
              ***Effective
                  date***IFRS
                  7
              Financial
                  Instruments: Disclosures
              January
                  1, 2007 (adopted by the EU)IFRS
                    8
              Operating
                  Segments
              January
                  1, 2009 (not adopted by the EU)IAS
                  1
              Amendment
                  to IAS 1 - Presentation of Financial Statements:  Capital
                  Disclosures
              January
                  1, 2007 (adopted by the EU)***International
                  Financial Reporting Interpretations Committee
                  (IFRIC)***IFRIC
                  8
              Scope
                  of IFRS 2 Share-based Payment
              May
                  1, 2007 (adopted by the EUIFRIC
                  9
              Reassessment
                  of Embedded Derivatives
              January
                  1, 2007 (adopted by the EU)IFRIC
                  10
              Interim
                  Financial Reporting and Impairment
              January
                  1, 2007 (not adopted by the EU)IFRIC
                  11
              Group
                  and Treasury Share Transactions
              January
                  1, 2008 (not adopted by the EU)IFRIC
                  12
              Service
                  Concession Arrangements
              January
                  1, 2008 (not adopted by the EU)
 
 The
                  Group does not anticipate that the adoption of these standards
                  and
                  interpretations will have a material effect on its financial statements
                  on
                  initial adoption. Upon adoption of IFRS 7 and IAS 1, the Group
                  will be
                  required to disclose additional information about its financial
                  instruments, their significance and the nature and extent of the
                  risks to
                  which they give rise, together with greater detail as to the fair
                  value of
                  its financial instruments and its risk exposure. There will be
                  no effect
                  on reported income or net assets.
 
 
 2.  SEGMENT
        INFORMATION
 Segment
          information is presented in respect of the Group’s geographical and business
          segments. The primary format, geographical segments, is based on the Group’s
          management and internal reporting structure. Sales of product between companies
          in the Group are made on commercial terms which reflect the nature of the
          relationship between the relevant companies. Segment results, assets and
          liabilities include items directly attributable to a segment as well as
          those
          that can be allocated on a reasonable basis. Unallocated items comprise
          interest-bearing loans, borrowings and expenses and corporate expenses.
          Segment
          capital expenditure is the total cost during the period to acquire segment
          plant, property and equipment and intangible assets that are expected to
          be used
          for more than one period, whether acquired on acquisition of a business
          combination or through acquisitions as part of the current
          operations.
 
 *Geographical
                  segments*
 The
                  Group comprises two main geographical segments (i) the Americas
                  and (ii)
                  Rest of World. The Group’s geographical segments are determined by the
                  location of the Group’s assets and operations.
 
 The
                  Group has also presented a geographical analysis of the segmental
                  data for
                  Ireland on the basis of the aggregation thresholds contained in
                  IAS
                  14.
 
 *Business
                  segments*
 The
                  Group operates in one business segment, the market for diagnostic
                  tests
                  for a range of diseases and other medical conditions. In determining
                  the
                  nature of its segmentation, the Group has considered the nature
                  of the
                  products, their risks and rewards, the nature of the production
                  base, the
                  customer base and the nature of the regulatory environment. The
                  Group
                  acquires, manufactures and markets a range of diagnostic products.
                  The
                  Group’s products are sold to a similar customer base and the main body
                  whose regulation the Group’s products must comply with is the Food and
                  Drug Administration (“FDA”) in the
                  US.
 
 The
                  following presents revenue and profit information and certain asset
                  and
                  liability information regarding the Group’s geographical
                  segments.
 
 a)
              The
                  distribution of revenue by geographical area based on location
                  of assets
                  was as follows:
 **Revenue***Americas*
                *Rest
                    of World**Year
                    ended December 31, 2006*
                
                *Ireland*
                *Other*
                *Eliminations*
                *Total**US$‘000*
                *US$‘000*
                *US$‘000*
                *US$’000*
                *US$‘000*Revenue
                    from external customers
                33,247
                55,665
                29,762
                -
                118,674Inter-segment
                    revenue
                21,161
                24,968
                9,679
                (55,808)
                -Total
                    revenue
                54,408
                80,633
                39,441
                (55,808)
                118,674
 
 69
 **NOTES
              TO THE CONSOLIDATED FINANCIAL STATEMENTS**
 **DECEMBER
              31, 2006**


*Americas*
              *Rest
                  of World**Year
                  ended December 31, 2005*
              
              *Ireland*
              *Other*
              *Eliminations*
              *Total**US$‘000*
              *US$‘000*
              *US$‘000*
              *US$’000*
              *US$‘000*Revenue
                  from external customers
              31,136
              54,859
              12,565
              -
              98,560Inter-segment
                  revenue
              22,197
              14,402
              6,594
              (43,193)
              -Total
                  revenue
              53,333
              69,261
              19,159
              (43,193)
              98,560
 
 
 *Americas*
              *Rest
                  of World**Year
                  ended December 31, 2004*
              
              *Ireland*
              *Other*
              *Eliminations*
              *Total**US$‘000*
              *US$‘000*
              *US$‘000*
              *US$’000*
              *US$‘000*Revenue
                  from external customers
              28,937
              40,985
              10,086
              -
              80,008Inter-segment
                  revenue
              20,860
              13,077
              6,549
              (40,486)
              -Total
                  revenue
              49,797
              54,062
              16,635
              (40,486)
              80,008
 
 b)
              The
                  distribution of revenue by customers’ geographical area was as
                  follows:
 **Revenue**
              *December
                  31, 2006*
                *US$‘000*
              *December
                  31, 2005*
                *US$‘000*
              *December
                  31, 2004*
                *US$‘000*Americas
              60,748
              50,627
              41,380Europe
                  (including Ireland) *
              34,452
              25,301
              22,718Asia
                  / Africa
              23,474
              22,632
              15,910118,674
              98,560
              80,008
 *Revenue
        for customers in Ireland is not disclosed separately due to the immateriality
        of
        these revenues.
 
 c)
              The
                  distribution of revenue by major product group was as
                  follows:
 **Revenue**
              *December
                  31, 2006*
                *US$‘000*
              *December
                  31, 2005*
                *US$‘000*
              *December
                  31, 2004*
                *US$‘000*Infectious
                  diseases
              42,051
              44,078
              36,402Haemostasis
              46,476
              29,766
              26,836Point
                  of care
              15,279
              12,836
              9,807Clinical
                  chemistry
              14,868
              **11,880
              6,963118,674
              98,560
              80,008
 
 d)
              The
                  distribution of segment results by geographical area was as
                  follows:
 
 *Year
                  ended December 31, 2006**Americas*
              *Rest
                  of World**Ireland*
              *Other*
              *Total**US$‘000*
              *US$‘000*
              *US$‘000*
              *US$‘000***Result**
              (6,621)
              10,790
              (1,843)
              2,326Unallocated
                  expenses *
              
              
              
              (385)Operating
                  profit
              
              
              
              1,941Net
                  financing costs (note 3)
              
              
              
              (1,489)Profit
                  before tax
              
              
              
              452Income
                  tax credit (note 8)
              
              
              
              2,824Profit
                  for the year
              
              
              
              3,276




70
 **NOTES
            TO THE CONSOLIDATED FINANCIAL STATEMENTS**
 **DECEMBER
            31, 2006**




*Year
                  ended December 31, 2005**Americas*
              *Rest
                  of World**Ireland*
              *Other*
              *Total**US$‘000*
              *US$‘000*
              *US$‘000*
              *US$‘000***Result**
              (369)
              10,339
              (1,581)
              8,389Unallocated
                  expenses *
              
              
              
              (1,767)Operating
                  profit
              
              
              
              6,622Net
                  financing costs (note 3)
              
              
              
              (669)Profit
                  before tax
              
              
              
              5,953Income
                  tax expense (note 8)
              
              
              
              (673)Profit
                  for the year
              
              
              
              5,280
 
 *Year
                  ended December 31, 2004**Americas*
              *Rest
                  of World**Ireland*
              *Other*
              *Total**US$‘000*
              *US$‘000*
              *US$‘000*
              *US$‘000***Result**
              (4,941)
              12,205
              667
              7,931Unallocated
                  expenses *
              
              
              
              (1,744)Operating
                  profit
              
              
              
              6,187Net
                  financing costs (note 3)
              
              
              
              (522)Profit
                  before tax
              
              
              
              5,665Income
                  tax credit (note 8)
              
              
              
              49Profit
                  for the year
              
              
              
              5,714
 *
        Unallocated expenses represent head office general and administration costs
        of
        the Group which cannot be allocated to the results of any specific geographical
        area.
 
 
 e)
              The
                  distribution of segment assets and segment liabilities by geographical
                  area was as follows:
 
 *As
                  at December 31, 2006**Americas*
              *Rest
                  of World**Ireland*
              *Other*
              *Total**US$‘000*
              *US$‘000*
              *US$‘000*
              *US$‘000***Assets
                  and liabilities**Segment
                  assets
              57,162
              145,473
              20,151
              222,786*Unallocated
                  assets:*Income
                  tax assets (current and deferred)
              
              
              
              8,024Restricted
                  cash
              
              
              
              15,500Cash
                  and cash equivalents
              
              
              
              2,821Total
                  assets as reported in the Group balance sheet
              
              
              
              249,131Segment
                  liabilities
              6,268
              17,130
              3,687
              27,085*Unallocated
                  liabilities:*Income
                  tax liabilities (current and deferred)
              
              
              
              9,490Interest-bearing
                  loans and borrowings and convertible notes (current and
                  non-current)
              
              
              
              45,294Total
                  liabilities as reported in the Group balance sheet
              
              
              
              81,869






71
 **NOTES
            TO THE CONSOLIDATED FINANCIAL STATEMENTS**
 **DECEMBER
            31, 2006**






*As
                  at December 31, 2005**Americas*
              *Rest
                  of World**Ireland*
              *Other*
              *Total**US$‘000*
              *US$‘000*
              *US$‘000*
              *US$‘000***Assets
                  and liabilities**
              50,501
              99,336
              11,958
              161,795Segment
                  assets*Unallocated
                  assets:*Income
                  tax assets (current and deferred)
              
              
              
              3,926Restricted
                  cash
              
              
              
              9,000Cash
                  and cash equivalents
              
              
              
              9,881Total
                  assets as reported in the Group balance sheet
              
              
              
              184,602Segment
                  liabilities
              7,415
              8,078
              1,327
              16,820*Unallocated
                  liabilities:*Income
                  tax liabilities (current and deferred)
              
              
              
              7,036Interest-bearing
                  loans and borrowings and convertible notes (current and
                  non-current)
              
              
              
              27,128Total
                  liabilities as reported in the Group balance sheet
              
              
              
              50,984
 
 f)
              The
                  distribution of long-lived assets, which are property, plant and
                  equipment, goodwill and intangible assets and other non-current
                  assets
                  (excluding deferred tax assets), by geographical area was as
                  follows:
 *December
                  31, 2006*
                *US$‘000*
              *December
                  31, 2005*
                *US$‘000*Rest
                  of World - Ireland
              110,936
              75,878Rest
                  of World - Other
              8,537
              4,973Americas
              24,626
              23,609144,099
              104,460
 
 g)
              The
                  distribution of depreciation and amortisation by geographical area
                  was as
                  follows:
 *December
                  31, 2006*
                *US$‘000*
              *December
                  31, 2005*
                *US$‘000*
              *December
                  31, 2004*
                *US$‘000****Depreciation:***Rest
                  of World - Ireland
              1,336
              1,118
              1,023Rest
                  of World - Other
              1,163
              427
              211Americas
              1,237
              889
              3953,736
              2,434
              1,629***Amortisation:***Rest
                  of World - Ireland
              2,298
              1,569
              997Rest
                  of World - Other
              104
              87
              59Americas
              285
              147
              552,687
              1,803
              1,111
 
 
 h)
              The
                  distribution of share-based payment expense by geographical area
                  was as
                  follows:
 *December
                  31, 2006*
                *US$‘000*
              *December
                  31, 2005*
                *US$‘000*
              *December
                  31, 2004*
                *US$‘000*Rest
                  of World - Ireland
              922
              1,174
              588Rest
                  of World - Other
              24
              22
              19Americas
              195
              172
              1511,141
              1,368
              758
 See
        note
        19 for further information on share-based payments.






72
 **NOTES
          TO THE CONSOLIDATED FINANCIAL STATEMENTS**
 **DECEMBER
          31, 2006**





Other
        significant non-cash expenses for the year ended December 31, 2006 relate
        to an
        inventory provision of US$5.8 million. Following the acquisition of the
        haemostasis product line of bioMerieux Inc (“bioMerieux”), Trinity Biotech
        sought to combine the range of products acquired with the Group’s existing
        product range. As part of this process it was decided to discontinue various
        existing products and this resulted in a US$5.8 million write-off of inventory.
        This write-off has been disclosed as a separate line item in cost of sales
        in
        the 2006 income statement. See note 26.
 
 i)
              The
                  distribution of interest expense by geographical area was as
                  follows:
 *December
                  31, 2006*
                *US$‘000*
              *December
                  31, 2005*
                *US$‘000*
              *December
                  31, 2004*
                *US$‘000*Rest
                  of World - Ireland
              1,982
              **894
              806Rest
                  of World - Other
              12
              8
              7Americas
              659
              156
              112,653
              1,058
              824
 
 
 j)
              The
                  distribution of taxation credit/ (expense) by geographical area
                  was as
                  follows:
 *December
                  31, 2006*
                *US$‘000*
              *December
                  31, 2005*
                *US$‘000*
              *December
                  31, 2004*
                *US$‘000*Rest
                  of World - Ireland
              (1,156)
              (1,105)
              (1,167)Rest
                  of World - Other
              975
              236
              125Americas
              3,005
              196
              1,0912,824
              (673)
              49
 
 
 k)
              During
                  2006, 2005 and 2004 there were no customers with 10% or more of
                  total
                  revenues.
 
 
 l)
              The
                  distribution of capital expenditure by geographical area was as
                  follows:
 *December
                  31, 2006*
                *US$‘000*
              *December
                  31, 2005*
                *US$‘000*Rest
                  of World - Ireland
              38,716
              12,837Rest
                  of World - Other
              4,471
              1,023Americas
              2,789
              16,37445,976
              30,234
 
 
 3.
              FINANCIAL
                  INCOME AND EXPENSES
 
 *Note*
              *December
                  31, 2006*
                *US$‘000*
              *December
                  31, 2005*
                *US$‘000*
              *December
                  31, 2004*
                *US$‘000*Financial
                  income:Interest
                  income
              
              1,164
              389
              302Financial
                  expense:Finance
                  lease interest
              
              (27)
              (33)
              (40)Interest
                  payable on interest bearing loans and borrowings
              *20*
              (2,167)
              (312)
              (193)Convertible
                  note interest *
              *21*
              (278)
              (713)
              (485)Other
                  interest expense
              
              (181)
              -
              (106)(2,653)
              (1,058)
              (824)(1,489)
              (669)
              (522)


73
 **NOTES
          TO THE CONSOLIDATED FINANCIAL STATEMENTS**
 **DECEMBER
          31, 2006**


Other
        interest expense recognised in 2006 comprises an interest expense arising
        from
        the discounting of the additional consideration payable to bioMerieux, resulting
        from the acquisition of the haemostasis product line during 2006, to reflect
        the
        fair value of this additional consideration, see note 23. The interest expense
        of US$106,000 recognised in 2004 relates to interest incurred with respect
        to
        financial liabilities from an unconnected third party.


*
          The
          Group has availed of the exemption in IFRS 1 and has not applied IAS 32
          until
          January 1, 2005. Interest on the convertible notes from January 1, 2005
          is
          recognised in the income statement using the effective interest rate method.
          In
          2004, in line with Previous GAAP, interest was recognised in the income
          statement using the coupon rate, adjusted for transaction
          costs.
 
 4.
              OTHER
                  OPERATING INCOME
 
 *December
                  31, 2006*
                *US$‘000*
              *December
                  31, 2005*
                *US$‘000*
              *December
                  31, 2004*
                *US$‘000*Rental
                  income from premises
              204
              161
              167Employment/
                  training grants
              71
              -
              135275
              161
              302
 
  5.
              PROFIT
                  BEFORE TAX
 
 The
        following amounts were charged/ (credited) to the income statement:
 
 *December
                  31, 2006*
                *US$‘000*
              *December
                  31, 2005*
                *US$‘000*
              *December
                  31, 2004*
                *US$‘000*Directors’
                  emoluments
                (including
                  non- executive directors):Remuneration
              2,213
              1,752
              1,321Pension
              119
              131
              172Share based payments
              732
              828
              339Auditors’
                  remunerationAudit fees
              629
              688
              419Non audit fees
              50
              164
              17Depreciation
                      - leased assets
              120
              92
              184Depreciation
                  - owned assets
              3,616
              2,342
              1,445Amortisation
              2,687
              1,803
              1,111(Profit)/
                  loss on disposal of fixed assets
              (2)
              469
              14Net
                  foreign exchange differences
              (240)
              (295)
              (741)Operating
                  lease rentals:Plant and machinery
              85
              17
              19Land and buildings
              2,838
              1,800
              1,695Other equipment
              240
              125
              280Employment/
                  training grants
              (71)
              -
              (135)
 
 
 6.
              PERSONNEL
                  EXPENSES
 *December
                  31, 2006*
                *US$‘000*
              *December
                  31, 2005*
                *US$‘000*
              *December
                  31, 2004*
                *US$‘000*Wages
                  and salaries
              42,113
              35,595
              31,731Social
                  welfare costs
              4,407
              3,613
              3,280Pension
                  costs
              987
              761
              450Share-based
                  payments
              1,141
              1,368
              75848,648
              41,337
              36,219








74
 **NOTES
          TO THE CONSOLIDATED FINANCIAL STATEMENTS**
 **DECEMBER
          31, 2006**


Personnel
        expenses are shown net of capitalisations. Total personnel expenses (wages
        and
        salaries, social welfare costs and pension costs), inclusive of amounts
        capitalised, for the year ended December 31, 2006 amounted to US$49,647,000
        (2005: US$42,088,000) (2004: US$37,002,000). Total share based payments,
        inclusive of amounts capitalised in the balance sheet, amounted to US$1,262,000
        for the year ended December 31, 2006. No share based payments were capitalised
        in 2005 and 2004. See note 19.


The
          average number of persons employed by the Group in the financial year was
          794
          (2005: 703) (2004: 671) and is analysed into the following categories:
 *December
                    31,*
                  *2006*
                *December
                    31,*
                  *2005*
                *December
                    31,*
                  *2004*Research
                    and development
                44
                42
                41Administration
                    and sales
                246
                207
                171Manufacturing
                    and quality
                504
                454
                459794
                703
                671
 
 7
                PENSION
                    SCHEME
 
 The
          Group
          operates defined contribution pension schemes for certain of its full time
          employees. The benefits under these schemes are financed by both Group
          and
          employee contributions. Total contributions made by the Group in the financial
          year and charged against income amounted to US$987,000 (2005: US$761,000)
          (2004:
          US$450,000) (note 6). This represents the total cost paid and due by the
          Group
          to the pension schemes for the financial year and as such it was not necessary
          to accrue or prepay pension contributions at the year end.
 
 8.
                INCOME
                    TAX CREDIT / (EXPENSE)
 
 (a)  The
          charge for tax based on the profit comprises:
 
 *December
                    31, 2006*
                  *US$‘000*
                *December
                    31, 2005*
                  *US$‘000*
                *December
                    31, 2004*
                  *US$‘000**Current
                    tax expense*Corporation
                    tax at 12.5%
                (519)
                (361)
                (1,125)Manufacturing
                    relief
                49
                -
                144(470)
                (361)
                (981)Overseas
                    tax *
                (25)
                172
                139Adjustment
                    in respect of prior years **
                290
                -
                214Total
                    current tax expense
                (205)
                (189)
                (628)*Deferred
                    tax credit / (expense) ****Origination
                    and reversal of temporary differences (see note 12)
                107
                (926)
                (264)Benefit
                    of tax losses recognised (see note 12)
                2,922
                442
                941Total
                    deferred tax credit / (expense)
                3,029
                (484)
                677Total
                    income tax credit / (expense) in income statement
                2,824
                (673)
                49
 *
          The
          overseas tax charge in 2006 relates primarily to US state taxes. The credit
          in
          2005 of US$172,000 relates primarily to a current year trading loss in
          Sweden
          which the Group is able to offset against its deferred tax liabilities
          in Sweden
          from previous years. The credit in 2004 of US$139,000 primarily arose as
          a
          result of refunds due relating to a loss carry-back claim in respect of
          the 2004
          US trading loss. No similar credits arose in 2006.
 
 **
          The
          credit in 2006 of US$290,000 relates primarily to the release of US$200,000
          that
          had been provided at December, 31 2005 which is not considered to be required
          at
          December 31, 2006. The remaining US$90,000 principally arises in respect
          of the
          finalisation of a claim for Irish Research and Development Tax Credits
          (“R&D
          tax credits”) in respect of the year ended December, 31 2005.
  75
 **NOTES
              TO THE CONSOLIDATED FINANCIAL STATEMENTS**
 **DECEMBER
              31, 2006**




***
        In
        2006 there was a deferred tax expense of US$741,000 (2005: US$747,000) (2004:
        US$277,000) recognised in respect of Ireland. In 2006 there was a deferred
        tax
        credit of US$3,770,000 (2005: US$263,000) (2004: US$954,000) recognised in
        respect of overseas tax jurisdictions.
 
 *Effective
                  tax rate*
              *December
                  31, 2006*
              *December
                  31, 2005*
              *December
                  31, 2004*Profit
                  on ordinary activities before taxation
              452
              5,953
              5,665As
                  a percentage of profit before tax:Current
                  tax
              46.32%
              3.17%
              11.09%Total
                  (current and deferred)
              (625.44%)
              11.31%
              (0.86%)
 
 The
        following table reconciles the applicable Republic of Ireland statutory tax
        rate
        to the effective total tax rate for the Group:
 *December
                  31, 2006*
              *December
                  31, 2005*
              *December
                  31, 2004*Irish
                  corporation tax
              12.50%
              12.50%
              12.50%Manufacturing
                  relief
              (10.76%)
              -
              (2.54%)Adjustments
                  in respect of prior years
              (64.15%)
              -
              (3.78%)Effect
                  of tax rates on overseas earnings
              (529.98%)
              (5.10%)
              (5.13%)Effect
                  of non deductible expenses
              43.90%
              3.91%
              2.72%Effects
                  of benefit of loss carryforwards
                Effect
                  of Irish income taxable at higher tax rate
                R&D
                  tax credit
              (25.18%)
                2.44%
                (54.21%)
              -
                -
                -
              (4.63%)
                -
                -Effective
                  tax rate
              (625.44%)
              11.31%
              (0.86%)
 
 
 **Movement
        in deferred tax recognised directly in equity**
 
 *December
                  31, 2006**US$‘000*
              *December
                  31, 2005*
                *US$‘000*
              *December
                  31, 2004*
                *US$‘000*Relating
                  to forward contracts as hedged instruments
              4
              41
              -4
              41
              -
 
 (b)
              The
                  distribution of profit before taxes by geographical area was as
                  follows:
 
 *December
                  31, 2006*
                *US$‘000*
              *December
                  31, 2005*
                *US$‘000*
              *December
                  31, 2004*
                *US$‘000*Rest
                  of World - Ireland
              9,585
              7,873
              9,957Rest
                  of World - Other
              (1,855)
              (1,567)
              660Americas
              (7,278)
              (353)
              (4,952)452
              5,953
              5,665
 
 (c)
              At
                  December 31, 2006, the Group had net operating loss carryforwards
                  of
                  approximately US$8,138,000 (2005: US$3,331,000, 2004: US$2,260,000)
                  in the
                  US, US$580,000 (2005: US$244,000, 2004: US$256,000) in the UK,
                  US$2,320,000 (2005: US$668,000, 2004: US$410,000) in Germany and
                  US$290,000 (2005: US$Nil, 2004: US$nil) in Ireland. The utilisation
                  of
                  these net operating loss carryforwards is limited to future profitable
                  operations in the US, UK, Germany and Ireland. The US net operating
                  loss
                  has a maximum carryforward of 20 years. US$3,043,000 of the net
                  operating
                  losses in the US will expire by December 31, 2024 while the balance
                  of
                  US$5,095,000 will expire by December 31, 2026. The UK, German and
                  Irish
                  losses can be carried forward indefinitely. A deferred tax asset
                  has been
                  recognised for the loss carryforwards in the US, UK, Ireland and
                  Germany.
                  The tax value of these loss carryforwards is US$4,447,000 (2005:
                  US$1,525,000) (see note 12). A deferred tax asset of US$87,000
                  (2005:
                  US$nil) in respect of net operating losses in France was not recognised
                  in
                  2006 due to uncertainties regarding future full utilisation of
                  these
                  losses in the related tax jurisdiction in future periods. The Group
                  has US
                  state credit carryforwards of US$326,000 at December 31, 2006 (2005:
                  US$331,000). A deferred tax asset of US$185,000 (2005: US$316,000)
                  in
                  respect of US state credit carryforwards was not recognised in
                  2006 due to
                  uncertainties regarding future full utilisation of these state
                  credit
                  carryforwards in the related tax jurisdiction in future periods.
                  Excepting
                  state credit carryforwards of US$39,000 which expire by December
                  31, 2009,
                  the balance of the state credits carry forward
                  indefinitely.







76
 **NOTES
          TO THE CONSOLIDATED FINANCIAL STATEMENTS**
 **DECEMBER
          31, 2006**





(d)
              There
                  are no income tax consequences for the Company attaching to the
                  payment of
                  dividends by Trinity Biotech plc to shareholders of the
                  Company.
 
 
 9.
              EARNINGS
                  PER SHARE
 
 *Basic
                  earnings per ordinary share*
 Basic
        earnings per ordinary share for the Group is computed by dividing the profit
        after taxation of US$3,276,000 (2005: US$5,280,000) (2004: US$5,714,000)
        for the
        financial year by the weighted average number of ‘A’ ordinary and ‘B’ ordinary
        shares in issue of 70,693,753 (2005: 58,890,084) (2004: 55,132,024). 1,400,000
        of the total weighted average shares used as the EPS denominator relate to
        the
        700,000 ‘B’ ordinary shares in issue. In all respects these shares are treated
        the same as ‘A’ ordinary shares except for the fact that they have two voting
        rights per share, rights to participate in any liquidation or sale of the
        Group
        and to receive dividends as if each Class ‘B’ ordinary share were two Class ‘A’
ordinary shares. Hence the EPS for a ‘B’ ordinary share is exactly twice the EPS
        of an ‘A’ ordinary share.
 
 *December
                  31, 2006*
              *December
                  31, 2005*
              *December
                  31, 2004*‘A’
                  ordinary shares
              69,293,753
              57,490,084
              53,732,024‘B’
                  ordinary shares
              1,400,000
              1,400,000
              1,400,000Basic
                  earnings per share denominator
              70,693,753
              58,890,084
              55,132,024*Reconciliation
                  to weighted average earnings per share denominator:*Number
                  of A ordinary shares at January 1 (note 18)
              60,041,521
              54,904,318
              45,160,640Number
                  of B ordinary shares at January 1 (multiplied by 2)
              1,400,000
              1,400,000
              1,400,000Weighted
                  average number of shares issued during the year
              9,252,232
              2,585,766
              8,571,384Basic
                  earnings per share denominator
              70,693,753
              58,890,084
              55,132,024
 
 The
          weighted average number of shares issued during the year is calculated
          by taking
          the number of shares issued by the number of days in the year each share
          is in
          issue divided by 365 days.
 
 *Diluted
          earnings per ordinary share*
 Diluted
          earnings per ordinary share is computed by dividing the profit after tax
          of
          US$3,276,000 (2005: US$5,280,000) (2004: US$5,714,000) for the financial
          year,
          adjusted for the after tax effect of the interest saving on convertible
          notes of
          US$nil (2005: US$535,000) (2004: US$386,000) by the diluted weighted average
          number of ordinary shares in issue of 72,125,740 (2005: 67,032,382) (2004:
          US$65,527,802).
 
 The
          basic
          weighted average number of shares for the Group may be reconciled to the
          number
          used in the diluted earnings per ordinary share calculation as
          follows:
  *December
                  31,*
                *2006*
              *December
                  31, 2005*
              *December
                  31, 2004*Basic
                  earnings per share denominator (see above)
              70,693,753
              58,890,084
              55,132,024Issuable
                  on exercise of options and warrants
              1,431,987
              2,168,545
              4,156,551Issuable
                  on conversion of convertible notes
              -
              5,973,753
              6,239,227Diluted
                  earnings per share denominator *
              72,125,740
              67,032,382
              65,527,802





77
 **NOTES
          TO THE CONSOLIDATED FINANCIAL STATEMENTS**
 **DECEMBER
          31, 2006**


*
        The
        after tax effect of the interest saving on convertible notes for 2006 was
        anti-dilutive and hence the diluted EPS has been calculated excluding the
        after
        tax effect of the interest saving on the convertible notes of US$208,000
        in
        2006. If the after tax effect on interest saving on convertible notes had
        not
        been anti-dilutive, 2,209,506 shares issuable on the conversion of convertible
        notes would have been included in the diluted earnings per share denominator.
        The after tax effect of the interest saving on convertible notes for 2005
        and
        2004 was not anti-dilutive and therefore 2,168,545 shares and 4,156,551 shares
        issuable on the exercise of options and 5,973,753 shares and 6,239,227 shares
        issuable on the conversion of convertible notes have been included in the
        diluted earnings per share denominator for 2005 and 2004 respectively.
 
 *Earnings
        per ADS*
 In
        June
        2005, Trinity Biotech adjusted its ADS ratio from 1 ADS: 1 Ordinary Share
        to 1
        ADS: 4 Ordinary Shares. Earnings per ADS for all periods presented have been
        restated to reflect this exchange ratio.
 
 Basic
        earnings per ADS for the Group is computed by dividing the profit after taxation
        of US$3,276,000 (2005: US$5,280,000) (2004: US$5,714,000) for the financial
        year
        by the weighted average number of ADS in issue of 17,673,438 (2005:14,722,521)
        (2004: 13,783,006).
 
 *December
                  31, 2006*
              *December
                  31, 2005*
              *December
                  31, 2004*‘A’
                  ordinary shares - ADS
              17,323,438
              14,372,521
              13,433,006‘B’
                  ordinary shares - ADS
              350,000
              350,000
              350,000Basic
                  earnings per share denominator
              17,673,438
              14,722,521
              13,783,006
 
 Diluted
        earnings per ADS for the Group is computed by dividing the profit after taxation
        of US$3,276,000 (2005: US$5,280,000) (2004: US$5,714,000) for the financial
        year, adjusted for the after tax effect of interest saving on convertible
        notes
        of US$nil (2005: US$535,000) (2004: US$386,000) by the diluted weighted average
        number of ADS in issue of 18,031,435 (2005: 16,758,095) (2004:
        16,381,950).
 
 The
        basic
        weighted average number of ADS shares for the Group only may be reconciled
        to
        the number used in the diluted earnings per ADS share calculation as
        follows:
 
 *December
                  31, 2006*
              *December
                  31, 2005*
              *December
                  31, 2004*Basic
                  earnings per share denominator (see above)
              17,673,438
              14,722,521
              13,783,006Issuable
                  on exercise of options and warrants
              357,997
              542,136
              1,039,137Issuable
                  on conversion of convertible notes
              -
              1,493,438
              1,559,807Diluted
                  earnings per share denominator *
              18,031,435
              16,758,095
              16,381,950
 
 *
        The
        after tax effect of the interest saving on convertible notes for 2006 was
        anti-dilutive and hence the diluted EPS per ADS has been stated excluding
        the
        after tax effect of the interest saving on the convertible notes of US$208,000
        in 2006. If the after tax effect on interest saving on convertible notes
        had not
        been anti-dilutive, 552,377 ADSs issuable on the conversion of convertible
        notes
        would have been included in the diluted earnings per ADS denominator. The
        after
        tax effect of the interest saving on convertible notes for 2005 and 2004
        was not
        anti-dilutive and therefore 542,136 ADSs and 1,039,137 ADSs issuable on the
        exercise of options and 1,493,438 ADSs and 1,559,807 ADSs issuable on the
        conversion of convertible notes have been included in the diluted earnings
        per
        ADS denominator for 2005 and 2004 respectively.











78
 **NOTES
          TO THE CONSOLIDATED FINANCIAL STATEMENTS**
 **DECEMBER
          31, 2006**


10.  PROPERTY,
      PLANT AND EQUIPMENT





*Freehold
                land and buildings*
              *US$‘000*
            *Leasehold
                improvements*
              *US$‘000*
            *Computers,
                fixtures and fittings*
              *US$‘000*
            *Plant
                and*
              *equipment*
              *US$‘000*
            *Total*
              *US$‘000**Cost*At
                January 1, 2005
            5,504
            2,699
            3,432
            12,795
            24,430Acquisitions
                through business combinations (note 26)
            -
            187
            92
            2,116
            2,395Other
                additions
            17
            191
            716
            3,398
            4,322Disposals
                / retirements
            -
            (36)
            (231)
            (571)
            (838)Exchange
                adjustments
            (457)
            (16)
            (34)
            (540)
            (1,047)At
                December 31, 2005
            5,064
            3,025
            3,975
            17,198
            29,262At
                January 1, 2006
            5,064
            3,025
            3,975
            17,198
            29,262Acquisitions
                through business combinations (note 26)
            -
            -
            -
            2,418
            2,418Other
                additions
            18
            370
            1,023
            2,935
            4,346Disposals
                / retirements
            -
            -
            -
            (629)
            (629)Exchange
                adjustments
            357
            12
            24
            526
            919At
                December 31, 2006
            5,439
            3,407
            5,022
            22,448
            36,316*Accumulated
                depreciation*At
                January 1, 2005
            (584)
            (760)
            (1,738)
            (5,331)
            (8,413)Charge
                for the year
            (119)
            (268)
            (444)
            (1,603)
            (2,434)Disposals
                / retirements
            -
            25
            178
            162
            365Exchange
                adjustments
            21
            16
            17
            368
            422At
                December 31, 2005
            (682)
            (987)
            (1,987)
            (6,404)
            (10,060)At
                January 1, 2006
            (682)
            (987)
            (1,987)
            (6,404)
            (10,060)Charge
                for the year
            (112)
            (318)
            (609)
            (2,697)
            (3,736)Disposals
                / retirements
            -
            -
            -
            120
            120Exchange
                adjustments
            (24)
            (12)
            (18)
            (331)
            (385)At
                December 31, 2006
            (818)
            (1,317)
            (2,614)
            (9,312)
            (14,061)*Carrying
                amounts*At
                December 31, 2006
            4,621
            2,090
            2,408
            13,136
            22,255At
                December 31, 2005
            4,382
            2,038
            1,988
            10,794
            19,202





There
      were no indications in the current year that the above carrying value may not
      be
      recoverable.










79
 **NOTES
          TO THE CONSOLIDATED FINANCIAL STATEMENTS**
 **DECEMBER
          31, 2006**


***Assets
      held under operating leases (where the Company is the
      lessor)***


Included
      in the carrying amount of property, plant and equipment are a number of assets
      which generate operating lease revenue for the Group. The net book value of
      these assets as at December 31, 2006 is US$3,753,000 (2005: US$2,328,000).
      Depreciation charged on these assets in 2006 amounted to US$1,281,000 (2005:
      US$522,000).





***Assets
      held under finance leases***


Included
      in the carrying amount of property, plant and equipment is an amount for
      capitalised leased assets of US$654,000 (2005: US$696,000). The depreciation
      charge in respect of capitalised leased assets for the year ended December
      31,
      2006 was US$120,000 (2005: US$92,000). The leased equipment secures the lease
      obligations (note 27). This is split as follows;





*At
                December 31, 2006*
            *Freehold
                land and buildings*
              *US$‘000*
            *Leasehold
                improvements*
              *US$‘000*
            *Computers,
                fixtures and fittings*
              *US$‘000*
            *Plant
                and equipment*
              *US$‘000*
            *Total*
              *US$‘000*Depreciation
                charge
            -
            39
            46
            35
            120*Carrying
                value*At
                December 31, 2006
            -
            271
            185
            198
            654





*At
                December 31, 2005*
            *Freehold
                land and buildings*
              *US$‘000*
            *Leaseholdimprovements*
              *US$‘000*
            *Computers,*
              *fixtures
                and fittings*
              *US$‘000*
            *Plant
                and equipment*
              *US$‘000*
            *Total*
              *US$‘000*Depreciation
                charge
            -
            39
            46
            7
            92*Carrying
                value*At
                December 31, 2005
            -
            310
            231
            155
            696




***Property,
      plant and equipment under construction***


Included
      in plant and equipment at December 31, 2006 is an amount of US$121,000 (2005:
      US$1,157,000) relating to assets in the course of construction. During the
      year,
      plant and equipment of US$1,157,000 which was under construction in 2005 was
      completed and depreciation was charged on these assets in 2006. A further
      US$121,000 was included as assets under construction in 2006, relating to
      leasehold improvements and plant and equipment which were not fully completed
      by
      December 31, 2006. These assets were not depreciated in 2006.


80
 **NOTES
          TO THE CONSOLIDATED FINANCIAL STATEMENTS**
 **DECEMBER
          31, 2006**


11.
              GOODWILL
                  AND INTANGIBLE ASSETS
 
 *Goodwill*
                *US$‘000*
              *Development
                  costs*
                *US$‘000*
              *Patents
                  and licences*
                *US$‘000*
              *Other*
                *US$‘000*
              *Total*
                *US$‘000**Cost*At
                  January 1,2005
              43,472
              7,087
              2,835
              12,712
              66,106Acquisitions,through
                  businesscombinations (note 26)
              11,466
              400
              2,140
              3,865
              17,871Other
                  additions
              -
              4,916
              168
              562
              5,646Disposals
                Exchange
                  adjustments
              -
                -
              -
                (86)
              -
                -
              (154)
                7
              (154)
                (79)At
                  December 31, 2005
              54,938
              12,317
              5,143
              16,992
              89,390At
                  January 1, 2006
              54,938
              12,317
              5,143
              16,992
              89,390Acquisitions,
                  through businesscombinations (note 26)
              21,679
              -
              4,950
              6,435
              33,064Other
                  additions
              -
              5,862
              -
              286
              6,148Disposals
              -
              -
              -
              -
              -Exchange
                  adjustments
              -
              61
              -
              6
              67At
                  December 31, 2006
              76,617
              18,240
              10,093
              23,719
              128,669*Accumulated
                  amortisation*At
                  January 1, 2005
              -
              (120)
              (1,253)
              (1,179)
              (2,552)Charge
                  for the year
              -
              (350)
              (259)
              (1,194)
              (1,803)Disposals
              -
              -
              -
              154
              154Exchange
                  adjustments
              -
              6
              -
              2
              8At
                  December 31, 2005
              -
              (464)
              (1,512)
              (2,217)
              (4,193)At
                  January 1, 2006
              -
              (464)
              (1,512)
              (2,217)
              (4,193)Charge
                  for the year
              -
              (468)
              (611)
              (1,608)
              (2,687)Disposals
              -
              -
              -
              -
              -Exchange
                  adjustments
              -
              (18)
              -
              (3)
              (21)At
                  December 31, 2006
              -
              (950)
              (2,123)
              (3,828)
              (6,901)*Carrying
                  amounts*At
                  December 31, 2006
              76,617
              17,290
              7,970
              19,891
              121,768At
                  December 31, 2005
              54,938
              11,853
              3,631
              14,775
              85,197
 
 Included
        within development costs are costs of US$11,282,000 which were not amortised
        in
        2006 (2005: US$6,280,000). These development costs are not being amortised
        as
        the projects to which the costs related were not fully complete at December
        31,
        2006 or at December 31, 2005.
 
 Other
        intangible assets consist primarily of acquired customer and supplier lists,
        trade names, website and software  costs.
  Amortisation
        is charged to the income statement through the selling, general and
        administrative expenses line.
 
 Included
        in other intangibles are the following indefinite lived assets:
 *December
                  31, 2006**US$‘000*
              *December
                  31, 2005*
                *US$‘000*Fitzgerald
                  trade name
              970
              970RDI
                  trade name
              560
              560Primus
                  trade name
              1,870
              1,8703,400
              3,400




81
 **NOTES
          TO THE CONSOLIDATED FINANCIAL STATEMENTS**
 **DECEMBER
          31, 2006**


No
        trade
        names were purchased as part of the 2006 acquisitions (note 26). The trade
        name
        assets purchased as part of the acquisition of Primus and RDI in 2005 and
        Fitzgerald in 2004 were valued by an external valuer using the relief from
        royalty method and based on factors such as (1) the market and competitive
        trends and (2) the expected usage of the name. It was considered that these
        trade names will generate net cash inflows for the Group for an indefinite
        period.
 
 **Impairment
        testing for intangibles including goodwill and indefinite lived
        assets**
 
 Goodwill
        and the above other intangibles are tested annually for impairment at each
        balance sheet date at a cash-generating unit (CGU) level, i.e. the individual
        legal entities. For the purpose of these annual impairment reviews goodwill
        is
        allocated to the relevant CGU.
  Significant
        carrying amounts of goodwill acquired through business combinations and
        intangible assets with indefinite useful lives have been allocated to the
        following cash-generating units:
 
 *December
                  31, 2006*
                *US$‘000*
              *December
                  31, 2005*
                *US$‘000*Trinity
                  Biotech Manufacturing Limited
              39,156
              30,131Benen
                  Trading Limited
              12,086
              12,086Primus
                  Corporation
              9,558
              9,558Biopool
                  US Inc
              5,823
              -MarDx
                  Diagnostics Inc
              3,571
              3,571Trinity
                  Biotech UK (Sales) Limited
              3,328
              -Clark
                  Laboratories Inc
              2,994
              2,994Trinity
                  Biotech GmbH
              1,830
              -Trinity
                  Biotech France SARL
              1,673
              -80,019
              58,340
 
 The
        recoverable amount of goodwill and intangible assets contained in each of
        the
        Group’s CGUs is determined based on the greater of the fair value less cost to
        sell and value in use calculations.  The Group operates in one business
        segment and accordingly the key assumptions are similar for all CGUs.  The
        value in use calculations use cash flow projections based on actual operating
        results extrapolated for five years using a revenue growth rate of 6% and
        a cost
        growth rate of 3%.  The revenue growth rate is based on the long term
        expected growth rate within the Diagnostics industry and the cost growth
        rate is
        based on expected cost inflation in the economies in which the Group operates.
        At the end of the five year period terminal values for each CGU, based on
        a
        price earnings ratio of 15, are used in the calculations. The cashflows and
        terminal values for the CGUs are discounted using pre-tax discount rates
        which
        range from 11.82% to 20.73%.  There was no impairment on goodwill or
        intangible assets at December 31, 2006.
 
 
 12. DEFERRED
        TAX ASSETS AND LIABILITIES
 
 **Recognised
        deferred tax assets and liabilities**
 Deferred
        tax assets and liabilities of the Group are attributable to the
        following:
 *Assets*
              
              *Liabilities*
              
              *Net**2006*
              *2005*
              *2006*
              *2005*
              *2006*
              *2005**US$’000*
              *US$’000*
              *US$’000*
              *US$’000*
              *US$’000*
              *US$’000*Property,
                  plant and equipment
              29
              37
              (1,752)
              (1,687)
              (1,723)
              (1,650)Intangible
                  assets
              -
              -
              (6,285)
              (4,492)
              (6,285)
              (4,492)Inventories
              1,886
              981
              -
              -
              1,886
              981Provisions
                  and valuation allowances
              1,055
              640
              -
              -
              1,055
              640Other
                  items
              239
              94
              (1,409)
              (549)
              (1,170)
              (455)Tax
                  value of loss carryforwards recognised
              4,447
              1,525
              -
              -
              4,447
              1,525Deferred
                  tax assets/(liabilities)
              7,656
              3,277
              (9,446)
              (6,728)
              (1,790)
              (3,451)


82
 **NOTES
          TO THE CONSOLIDATED FINANCIAL STATEMENTS**
 **DECEMBER
          31, 2006**


The
      deferred tax asset in 2006 is due mainly to deductible temporary differences
      created by net operating losses and US state credit carryforwards, and the
      elimination of unrealised intercompany inventory profit. The deferred tax asset
      increased in 2006 due principally to the increase in net operating losses
      available for offset against future profits.





The
      deferred tax asset in 2005 is due mainly to deductible temporary differences
      created by net operating losses and US state credit carryforwards, and the
      elimination of unrealised intercompany inventory profit. The deferred tax asset
      increased in 2005 due principally to the increase in net operating losses
      available for offset against future profits.





At
      December 31, 2006, the Group recognised a deferred tax asset of US$4,447,000
      in
      respect of net operating loss carryforwards in the USA, Germany, UK and Ireland.
      The utilisation of these net operating loss carryforwards is limited to future
      profitable operations in the USA, Germany, UK and Ireland. A deferred tax asset
      of US$142,000 was also recognised in respect of US state carryforwards.





At
      December 31, 2005, the Group recognised a deferred tax asset of US$1,525,000
      in
      respect of net operating loss carryforwards in the USA, Germany and the UK.





The
      deferred tax liability is caused by the net book value of non current assets
      being greater than the tax base of non current assets, temporary differences
      due
      to the acceleration of the recognition of certain charges in calculating taxable
      income permitted in Ireland, the USA and Germany, and deferred tax recognised
      on
      fair value asset uplifts in connection with business combinations. The deferred
      tax liability increased in 2006 as the excess of the net book value of non
      current assets over the tax base increased and the Group was able to recognise
      an upfront charge relating to licence fees in the calculation of its taxable
      income in Ireland. The increase was also as a result of the recognition of
      deferred tax liabilities on the fair value of the intangible assets acquired
      in
      business combinations of US$1,370,000 (2005: US$2,041,000). See note 26,
      Business Combinations.





**Unrecognised
      deferred tax assets**





Deferred
      tax assets have not been recognised by the Group in respect of the following
      items:


*December
                31, 2006*
            *December
                31, 2005**US$’000*
            *US$’000*Deductible
                temporary differences
            -
            427Capital
                losses
            6,138
            6,138US
                state credit carryforwards
            185
            316Net
                operating losses
            264
            -6,587
            6,881





No
      deferred tax asset is recognised in respect of a capital loss of US$6,138,000
      in
      the Company in 2006 or 2005 as it was not probable that there will be future
      capital gains against which to offset these capital losses. No deferred tax
      asset was recognised in 2005 in respect of management expenses forward as at
      December, 31 2005 as it was not probable that there would be future taxable
      income in the Company against which to offset the unutilised management expenses
      forward. These losses are available indefinitely for offset against future
      taxable profits of the Company. During 2006 the Company utilised US$137,000
      of
      management expenses forward. As the Company had sufficient taxable income in
      2006 to utilise part of the management expenses forward, and on the basis that
      it is expected to have future taxable income to utilise the balance of the
      management expenses forward, a deferred tax asset was recognised in respect
      of
      the unutilised management expenses forward as at December, 31 2006.





A
      deferred tax asset of US$185,000 (2005: US$316,000) in respect of US state
      credit carryforwards was not recognised due to uncertainties regarding future
      full utilisation of these state credit carryforwards in the related tax
      jurisdiction in future periods.





A
      deferred tax asset of US$87,000 (2005: US$nil) in respect of net operating
      losses of US$264,000 (2005: US$nil) in France was not recognised due to
      uncertainties regarding future full utilisation of these losses in the related
      tax jurisdiction in future periods.




**Unrecognised
      deferred tax liabilities**





At
      December 31, 2006 and 2005, there was no recognised or unrecognised deferred
      tax
      liability for taxes that would be payable on the unremitted earnings of certain
      of the Group's subsidiaries. The Group is able to control the timing of the
      reversal of the temporary differences of its subsidiaries and it is probable
      that these temporary differences will not reverse in the foreseeable
      future.


83
 **NOTES
          TO THE CONSOLIDATED FINANCIAL STATEMENTS**
 **DECEMBER
          31, 2006**


**Movement
        in temporary differences during the year**
 
 *Balance*
                *January,
                  1 2006*
              *Recognised
                  in income*
              *Recognised
                  in goodwill*
              *Recognised
                  in equity*
              *Balance*
                *December
                  31, 2006**US$’000*
              *US$’000*
              *US$’000*
              *US$’000*
              *US$’000*Property,
                  plant and equipment
              (1,650)
              (73)
              -
              -
              (1,723)Intangible
                  assets
              (4,492)
              (422)
              (1,371)
              -
              (6,285)Inventories
              981
              906
              -
              -
              1,886Provisions
                  and valuation allowances
              640
              415
              -
              -
              1,055Other
                  items
              (455)
              (719)
              -
              4
              (1,170)Tax
                  value of loss carryforwards recognised
              1,525
              2,922
              -
              -
              4,447(3,451)
              3,029
              (1,371)
              4
              (1,790)
 
 *Balance*
                *January
                  1, 2005*
              *Recognised
                  inincome*
              *Recognised
                  in goodwill*
              *Recognised
                  in equity*
              *Balance*
                *December
                  31, 2005**US$’000*
              *US$’000*
              *US$’000*
              *US$’000*
              *US$’000*Property,
                  plant and equipment
              (1,140)
              53
              (563)
              -
              (1,650)Intangible
                  assets
              (2,276)
              (459)
              (1,757)
              -
              (4,492)Inventories
              1,176
              (272)
              77
              -
              981Provisions
                  and valuation allowances
              173
              135
              332
              -
              640Other
                  items
              (126)
              (383)
              13
              41
              (455)Tax
                  value of loss carryforwards recognised
              1,083
              442
              -
              -
              1,525(1,110)
              (484)
              (1,898)
              41
              (3,451)
 
 
 13.
              OTHER
                  ASSETS
  *December
                  31, 2006*
                *US$‘000*
              *December
                  31, 2005*
                *US$‘000*Other
                  assets
              76
              6176
              61
 
 
 14.
              INVENTORIES
 
 *December
                  31, 2006*
                *US$‘000*
              *December
                  31, 2005*
                *US$‘000*Raw
                  materials and consumables
              10,598
              8,983Work-in-progress
              10,167
              10,192Finished
                  goods
              24,807
              17,27545,572
              36,450
 
 All
        inventories are stated at the lower of cost or net realisable value. Total
        inventories for the Group are shown net of provisions of US$7,284,000 (2005:
        US$3,654,000).





84
 **NOTES
          TO THE CONSOLIDATED FINANCIAL STATEMENTS**
 **DECEMBER
          31, 2006**


15.
              TRADE
                  AND OTHER RECEIVABLES
 
 *December
                  31, 2006*
                *US$‘000*
              *December
                  31, 2005*
                *US$‘000*Trade
                  receivables, net of impairment losses
              28,359
              17,591Prepayments
              3,492
              1,956Value
                  added tax
              422
              29Called
                  up share capital not received
              -
              61Finance
                  lease receivables
              707
              1,159Other
                  receivables
              135
              8933,115
              20,885
 
 Trade
        receivables for the Group are shown net of the impairment losses provision
        of
        US$1,074,000 (2005: US$587,000). See note 1(j).
 
 ***Leases
        as lessor***
 *(i)
        Finance lease commitments - Group as lessor*
 The
        Group
        leases instruments as part of its business. Future minimum finance lease
        receivables with non-cancellable terms are as follows:
  *December
                  31, 2006*
                *US$‘000*Gross
                  investment
              Unearned
                  income
              Minimum
                  payments receivableLess
                  than one year
              
              429
              161
              268Between
                  one and five years
              
              887
              448
              4391,316
              609
              707
 
 *December
                  31, 2005*
                *US$’000*Gross
                  investment
              Unearned
                  income
              Minimum
                  payments receivableLess
                  than one year
              
              438
              60
              378Between
                  one and five years
              
              933
              152
              7811,371
              212
              1,159
 
 Under
        the
        terms of the lease arrangements, no contingent rents are
        receivable.
 *(ii)
          Operating lease commitments - Group as lessor*
 The
        Group
        has leased a facility consisting of 9,000 square feet in Dublin, Ireland.
        This
        property has been sub-let by the Group. The lease contains a clause to enable
        upward revision of the rent charge on a periodic basis. The Group also leases
        instruments under operating leases as part of its business.
 
 Future
        minimum rentals receivable under non-cancellable operating leases are as
        follows:
 
 *December
                    31, 2006*
                  *US$’000*Land
                    and buildings
                Instruments
                TotalLess
                    than one year
                171
                948
                1,119Between
                    one and five years
                684
                1,513
                2,197More
                    than five years
                812
                -
                8121,667
                2,461
                4,128





85
 **NOTES
          TO THE CONSOLIDATED FINANCIAL STATEMENTS**
 **DECEMBER
          31, 2006**





*December
                31, 2005*
              *US$’000*Land
                and buildings
            Instruments
            TotalLess
                than one year
            153
            1,190
            1,343Between
                one and five years
            611
            1,589
            2.200More
                than five years
            879
            -
            8791,643
            2,779
            4,422





16. FINANCIAL
        ASSETS





*December
                31, 2006*
              *US$’000*
            *December
                31, 2005*
              *US$’000*Restricted
                cash
            15,500
            9,000





As
      part
      security for the Group’s banking facility (note 20), the Group has US$15,500,000
      (2005: US$9,000,000) which it must hold on interest-bearing deposit. As a
      result, this cash of US$15,500,000 (2005: US$9,000,000) is shown as a financial
      asset at December 31, 2006.





17. CASH
      AND
      CASH EQUIVALENTS





*December
                31, 2006*
              *US$’000*
            *December
                31, 2005*
              *US$’000*Cash
                at bank and in hand
            2,579
            4,916Short-term
                deposits
            242
            4,965Cash
                and cash equivalents in the statements of cash flows
            2,821
            9,881


Cash
      relates to all cash balances which are readily available at year end. Cash
      equivalents relate to all cash balances on deposit, with a maturity of less
      than
      three months, which are not restricted. See note 27 (c).


86
 **NOTES
          TO THE CONSOLIDATED FINANCIAL STATEMENTS**
 **DECEMBER
          31, 2006**




18. CAPITAL
        AND RESERVES
   *Sharecapital*
                  *‘A’
                    ordinary shares*
                
                
                *Share
                    capital*
                  *‘B’
                    ordinary shares*
                
                
                *Share
                    premium*
                
                
                *Translation
                    reserve*
                
                
                *Warrant
                    reserve*
                
                
                *Owned
                    shares*
                
                
                *Hedging
                    reserves*
                
                
                *Convertible
                    notes - equity component*
                
                
                *Retained
                    earnings*
                
                
                *Total**US$’000*
                
                
                *US*$*’000*
                
                
                *US*$*’000*
                
                
                *US*$*’000*
                
                
                *US*$*’000*
                
                
                *US*$*’000*
                
                
                *US*$*’000*
                
                
                *US*$*’000*
                
                
                *US*$*’000*
                
                
                *US*$*’000*Balance
                    at January 1, 2004
                
                
                658
                
                
                12
                
                
                87,596
                
                
                -
                
                
                -
                
                
                -
                
                
                -
                
                
                -
                
                
                (6,543
                )
                
                81,723Total
                    recognised income and expense
                
                
                -
                
                
                -
                
                
                -
                
                
                118
                
                
                -
                
                
                -
                
                
                -
                
                
                -
                
                
                5,714
                
                
                5,832Options
                    and warrants exercised
                
                
                12
                
                
                -
                
                
                1,968
                
                
                -
                
                
                -
                
                
                -
                
                
                -
                
                
                -
                
                
                -
                
                
                1,980Class
                    A shares issued on conversion of convertible notes
                
                
                1
                
                
                -
                
                
                426
                
                
                -
                
                
                -
                
                
                -
                
                
                -
                
                
                -
                
                
                -
                
                
                427Class
                    A shares issued in private placement
                
                
                63
                
                
                -
                
                
                24,272
                
                
                -
                
                
                -
                
                
                -
                
                
                -
                
                
                -
                
                
                -
                
                
                24,335Class
                    A shares issued to fund an acquisition
                
                
                30
                
                
                -
                
                
                7,691
                
                
                -
                
                
                -
                
                
                -
                
                
                -
                
                
                -
                
                
                -
                
                
                7,721Share
                    issue expenses
                
                
                -
                
                
                -
                
                
                (1,509
                )
                
                -
                
                
                -
                
                
                -
                
                
                -
                
                
                -
                
                
                -
                
                
                (1,509
                )Share-based
                    payments
                
                
                -
                
                
                -
                
                
                -
                
                
                -
                
                
                -
                
                
                -
                
                
                -
                
                
                -
                
                
                758
                
                
                758Own
                    shares acquired
                
                
                -
                
                
                -
                
                
                -
                
                
                -
                
                
                -
                
                
                (2,373
                )
                
                -
                
                
                -
                
                
                -
                
                
                (2,373
                )Balance
                    at December 31, 2004
                
                
                764
                
                
                12
                
                
                120,444
                
                
                118
                
                
                -
                
                
                (2,373
                )
                
                -
                
                
                -
                
                
                (71
                )
                
                118,894Balance
                    at December 31, 2004
                
                
                764
                
                
                12
                
                
                120,444
                
                
                118
                
                
                -
                
                
                (2,373
                )
                
                -
                
                
                -
                
                
                (71
                )
                
                118,894Adjustment
                    in respect of adoption of IAS 32 and 39 on January 1, 2005 (note
                    1(a))
                
                
                -
                
                
                -
                
                
                (3,779
                )
                
                -
                
                
                3,803
                
                
                -
                
                
                373
                
                
                164
                
                
                (297
                )
                
                264Balance
                    at January 1, 2005 as restated
                
                
                764
                
                
                12
                
                
                116,665
                
                
                118
                
                
                3,803
                
                
                (2,373
                )
                
                373
                
                
                164
                
                
                (368
                )
                
                119,158Total
                    recognised income and expense
                
                
                *-*
                
                
                *-*
                
                
                *-*
                
                
                (1,740
                )
                
                -
                
                
                -
                
                
                (437
                )
                
                -
                
                
                5,280
                
                
                3,103Share-based
                    payments
                
                
                -
                
                
                -
                
                
                -
                
                
                -
                
                
                -
                
                
                -
                
                
                -
                
                
                -
                
                
                1,368
                
                
                1,368Options
                    and warrants exercised
                
                
                27
                
                
                -
                
                
                2,464
                
                
                -
                
                
                -
                
                
                -
                
                
                -
                
                
                -
                
                
                -
                
                
                2,491Class
                    A shares issued on conversion of convertible notes
                
                
                27
                
                
                -
                
                
                5,439
                
                
                -
                
                
                -
                
                
                -
                
                
                -
                
                
                -
                
                
                -
                
                
                5,466Share
                    issue expenses
                
                
                -
                
                
                -
                
                
                (341
                )
                
                -
                
                
                -
                
                
                -
                
                
                -
                
                
                -
                
                
                -
                
                
                (341
                )Own
                    shares sold
                
                
                -
                
                
                -
                
                
                -
                
                
                -
                
                
                -
                
                
                2,373
                
                
                -
                
                
                -
                
                
                -
                
                
                2,373Balance
                    at December 31, 2005
                
                
                818
                
                
                12
                
                
                124,227
                
                
                (1,622
                )
                
                3,803
                
                
                -
                
                
                (64
                )
                
                164
                
                
                6,280
                
                
                133,618Balance
                    at January 1, 2006
                
                
                818
                
                
                12
                
                
                124,227
                
                
                (1,622
                )
                
                3,803
                
                
                -
                
                
                (64
                )
                
                164
                
                
                6,280
                
                
                133,618Total
                    recognised income and expense
                
                
                -
                
                
                *-*
                
                
                *-*
                
                
                1,347
                
                
                -
                
                
                -
                
                
                64
                
                
                -
                
                
                3,276
                
                
                4,687Share-based
                    payments
                
                
                -
                
                
                -
                
                
                -
                
                
                -
                
                
                -
                
                
                -
                
                
                -
                
                
                -
                
                
                1,262
                
                
                1,262Options
                    exercised
                
                
                2
                
                
                -
                
                
                212
                
                
                -
                
                
                -
                
                
                -
                
                
                -
                
                
                -
                
                
                -
                
                
                214Class
                    A shares issued on conversion of convertible notes
                
                
                20
                
                
                -
                
                
                3,624
                
                
                -
                
                
                -
                
                
                -
                
                
                -
                
                
                -
                
                
                -
                
                
                3,644Class
                    A shares issued in private placement
                
                
                126
                
                
                -
                
                
                24,879
                
                
                -
                
                
                -
                
                
                -
                
                
                -
                
                
                -
                
                
                -
                
                
                25,005Share
                    issue expenses
                
                
                -
                
                
                -
                
                
                (1,168
                )
                
                -
                
                
                -
                
                
                -
                
                
                -
                
                
                -
                
                
                -
                
                
                (1,168
                )Balance
                    at December 31, 2006
                
                
                966
                
                
                12
                
                
                151,774
                
                
                (275
                )
                
                3,803
                
                
                -
                
                
                -
                
                
                164
                
                
                10,818
                
                
                167,262






87
 **NOTES
          TO THE CONSOLIDATED FINANCIAL STATEMENTS**
 **DECEMBER
          31, 2006**




***Share
        capital***
 
 *Class
                  ‘A’ Ordinary shares*
              *Class
                  ‘A’ Ordinary shares**In
                  thousands of shares*
              *2006*
              *2005*In
                  issue at January 1
              60,041
              54,904Issued
                  for cash
              11,739
              2,615Issued
                  for non cash (note 21)
              1,822
              2,522In
                  issue at December 31
              73,602
              60,041
 
 *Class
                  ‘B’ Ordinary shares*
              *Class
                  ‘B’ Ordinary shares**In
                  thousands of shares*
              *2006*
              *2005*In
                  issue at January 1
              700
              700Issued
                  for cash
              -
              -In
                  issue at December 31
              700
              700
 
 The
        Group
        had authorised share capital of 100,000,000 ‘A’ ordinary shares of US$0.0109
        each (2005: 75,000,000 ‘A’ ordinary shares of US$0.0109 each) and 700,000 ‘B’
ordinary shares of US$0.0109 each (2005: 700,000 ‘B’ ordinary shares of
        US$0.0109 each) as at December 31, 2006.
 
 (a)
              In
                  April 2006, Trinity Biotech completed a US$25,005,000 private placement
                  of
                  11,593,840 of Class ‘A’ Ordinary Shares of the Group. The Group issued a
                  further 145,156 shares from the exercise of employee options for
                  a
                  consideration of US$214,000. Transactions costs relating to the
                  private
                  placement and the exercise of employee options amounted to US$1,168,000.
                  1,821,980 shares (equivalent to US$3,644,000) were issued on a
                  non cash
                  basis as the Group made part of its convertible debt repayments
                  by way of
                  shares during the year (see note
                  21).
 (b)
              During
                  2005, the Group issued 2,615,375 ‘A’ Ordinary Shares from the exercise of
                  employee options for a consideration of US$2,491,000, settled in
                  cash. A
                  further 2,522,000 shares (equivalent to US$5,465,000) were issued
                  on a non
                  cash basis as the Group chose to make part of its convertible debt
                  repayments in 2005 by way of shares.
 (c)
              Since
                  its incorporation the Group has not declared or paid dividends
                  on its ‘A’
                  Ordinary Shares or ‘B’ Ordinary Shares. The Group anticipates, for the
                  foreseeable future, that it will retain any future earnings in
                  order to
                  fund its business operations. The Group does not, therefore, anticipate
                  paying any cash or share dividends on its ‘A’ Ordinary or ‘B’ Ordinary
                  shares in the foreseeable future. As provided in the Articles of
                  Association of the Company, dividends or other distributions will
                  be
                  declared and paid in US Dollars.
  (d)
              The
                  Class ‘B’ Ordinary Shares have two votes per share and the rights to
                  participate in any liquidation or sale of the Group and to receive
                  dividends as if each Class ‘B’ Ordinary Share were two Class ‘A’ Ordinary
                  Shares. In all other respects they rank pari passu with the ‘A’ ordinary
                  shares.
  
 ***Currency
        translation reserve***
 The
        currency translation reserve comprises all foreign exchange differences arising
        from the translation of the financial statements of foreign currency denominated
        operations of the Group since January 1, 2004.
 
  ***Warrant
        reserve***
 The
        warrant reserve comprises the equity component of share warrants issued by
        the
        Group. There were no new warrants issued by the Group in 2006 or 2005. At
        31
        December, 2004 the fair value of these warrants was included within share
        premium. As part of the adoption of IAS 32 and IAS 39 the Group has elected
        to
        disclose the fair value of these warrants as a separate reserve within equity.
        The Group calculates the fair value of warrants at the date of issue taking
        the
        amount directly to reserves. The fair value is calculated using the trinomial
        model. The fair value which is assessed at the grant date is calculated on
        the
        basis of the contractual term of the warrants. In accordance IFRS 2, 1,258,824
        warrants with a value of (US$3,803,000) have been fair valued and classified
        as
        a separate reserve.





88
 **NOTES
          TO THE CONSOLIDATED FINANCIAL STATEMENTS**
 **DECEMBER
          31, 2006**





The
        following input assumptions were made to fair value the warrants:
 Fair
                  value at date of measurement
              US$3.02Share
                  price
              US$4.78Exercise
                  price
              US$5.25Expected
                  volatility
              78.31%Contractual
                  life
              5
                  yearsRisk
                  free rate
              3.26%Expected
                  dividend yield
              -
 
 A
        further
        58,500 warrants which were outstanding at December 31, 2006 do not fall within
        the scope of IFRS 2 and hence were not fair valued.
  ***Owned
        shares***
 In
        April
        2004, the Group completed the acquisition of the assets of Fitzgerald Industries
        International Inc (Fitzgerald) for US$16,000,000 in cash (before contingent
        consideration and costs). **** The
        acquisition was partly funded by the issue of 2,783,984 ‘A’ Ordinary Shares of
        the Group. As at December 31, 2004, the Group funded the in substance repurchase
        of 817,470 shares with a value of US$2,373,000. All of these shares were
        resold
        in the market in 2005.
  ***Hedging
        reserve***
 The
        hedging reserve comprises the effective portion of the cumulative net change
        in
        the fair value of cash flow hedging instruments related to hedged transactions
        entered into but not yet crystallised. At December 31, 2006 the Group had
        no
        hedged transactions outstanding.
 
 
 19. SHARE
        OPTIONS AND SHARE WARRANTS
 
 ***Warrants***
 The
        Company granted warrants to purchase 940,405 Class 'A' Ordinary Shares in
        the
        Company to agents of the Company who were involved in the Company's private
        placements in 1994 and 1995 and the debenture issues in 1997, 1999 and 2002.
        A
        further warrant to purchase 100,000 Class 'A' Ordinary Shares was also granted
        to a consultant of the Company. In January 2004, the Company completed a
        private
        placement of 5,294,118 Class ‘A’ Ordinary Shares of the Company at a price of
        US$4.25 per share. The investors were granted five year warrants (vesting
        immediately) to purchase an aggregate of 1,058,824 Class ‘A’ Ordinary Shares in
        the Company at an exercise price of US$5.25 per share. The Company granted
        further warrants (vesting immediately) to purchase 200,000 Class 'A' Ordinary
        Shares in the Company to agents of the Company who were involved in this
        private
        placement in January 2004 at an exercise price of US$5.25. These warrants
        also
        have a term of five years. At December 31, 2006 there were warrants to purchase
        1,317,324 Class ‘A’ Ordinary shares in the Company outstanding .
 
 *December
                  31, 2006*
              *December
                  31, 2005*Outstanding
                  at beginning of period
              1,317,324
              1,317,324Granted
              -
              -Exercised
              -
              -Outstanding
                  at end of period
              1,317,324
              1,317,324
 
 ***Options***
 Under
        the
        terms of the Company’s Employee Share Option Plan, options to purchase 8,294,743
        (excluding warrants of 1,317,324) Class 'A' Ordinary Shares were outstanding
        at
        December 31, 2006. Under the plan, options are granted to officers, employees
        and consultants of the Group at the discretion of the compensation committee
        (designated by the board of directors), under the terms outlined below.
 
 The
        terms
        and conditions of the grants are as follows, whereby all options are settled
        by
        physical delivery of shares:





89
 **NOTES
          TO THE CONSOLIDATED FINANCIAL STATEMENTS**
 **DECEMBER
          31, 2006**


*Vesting
      conditions*


The
      options vest following a period of service by the officer or employee. The
      required period of service is determined by the compensation committee at the
      date of grant of the options (usually the date of approval by the compensation
      committee) and it is generally over a four year period. There are no market
      conditions associated with the share option grants.





*Contractual
      life*


The
      term
      of an option will be determined by the compensation committee, provided that
      the
      term may not exceed seven years from the date of grant (some of the Group’s
      earlier plans had a ten year life). All options will terminate 90 days after
      termination of the option holder’s employment, service or consultancy with the
      Group (or one year after such termination because of death or disability) except
      where a longer period is approved by the Board of Directors. Under certain
      circumstances involving a change in control of the Group, the committee may
      accelerate the exercisability and termination of the options.





The
      number and weighted average exercise price of share options and warrants per
      ordinary share is as follows (as required by IFRS 2, this information relates
      to
      all grants of share options and warrants by the Group):







*Options
                and warrants*
            *Weighted-average
                exercise price*
              *US$*
            *Range*
              *US$*Outstanding
                January 1, 2004
            8,327,394
            1.44
            0.81
                -5.00Granted
            3,162,824
            3.68
            2.33-
                5.25Exercised
            (1,113,538)
            1.82
            0.98
                - 2.75Forfeited
            (430,339)
            1.66
            0.98
                -4.00Outstanding
                at end of period
            9,946,341
            2.10
            0.81
                -5.25Exercisable
                at end of year
            5,693,844
            2.20
            0.81
                -5.25Outstanding
                January 1, 2005
            9,946,341
            2.10
            0.81
                -5.25Granted
            1,670,000
            1.69
            1.59
                -3.00Exercised
            (2,615,376)
            1.00
            0.81-1.75Forfeited
            (152,508)
            1.99
            0.98-4.00Outstanding
                at end of period
            8,848,457
            2.35
            0.81-5.25Exercisable
                at end of year
            4,589,342
            US$2.69
            0.81-5.25Outstanding
                January 1, 2006
            8,848,457
            2.35
            0.81-5.25Granted
            1,617,000
            2.02
            1.35-2.30Exercised
            (145,155)
            1.47
            0.98-1.75Forfeited
            (708,235)
            2.15
            0.81-5.00Outstanding
                at end of period
            9,612,067
            US$2.32
            0.98-5.25Exercisable
                at end of year
            5,605,469
            US$2.50
            0.98-5.25





The
      weighted average share price at the date of exercise for options exercised
      in
      2006 is US$2.19 (2005: US$2.09) (2004: US$4.21).





The
      opening share price per Class ‘A’ Ordinary share at the start of the financial
      year was US$2.04 (2005 US$2.93) (2004: US$5.58) and the closing share price
      at
      December 31, 2006 was US$2.14 (2005: US$2.04) (2004: US$2.93). The average
      share
      price for the year was US$2.14.






90
 **NOTES
          TO THE CONSOLIDATED FINANCIAL STATEMENTS**
 **DECEMBER
          31, 2006**


A
      summary
      of the range of prices for the Company’s stock options and warrants for the year
      ended December 31, 2006 follows:




**Outstanding**
            **Exercisable**Exercise
                price range
            No.
                of options
            Weighted-
                avg exercise price
            Weighted-avg
                contractual life remaining(years)
            No.
                of options
            Weighted-
                avg exercise price
            Weighted-avg
                contractuallife remaining (years)US$0.81-US$0.99
            1,233,834
            US$0.98
            2.43
            1,233,834
            US$0.98
            2.43US$1.00-US$2.05
            3,635,210
            US$1.60
            4.12
            1,868,542
            US$1.52
            2.60US$2.06-US$2.99
            3,153,366
            US$2.39
            5.29
            1,038,772
            US$2.57
            4.01US$3.00-US$5.25
            1,589,657
            US$4.87
            2.39
            1,464,321
            US$5.01
            2.239,612,067
            
            
            5,605,469





The
      weighted-average remaining contractual life of options outstanding at December
      31, 2006 was 4.0 years (2005: 4.24 years). The information above also includes
      outstanding warrants.


A
      summary
      of the range of prices for the Company’s stock options and warrants for the year
      ended December 31, 2005 follows:





**Outstanding**
            **Exercisable**Exercise
                pricerange
            No.
                of options
            Weighted-
                avg exercise price
            Weighted-avg
                contractual life remaining (years)
            No.
                of options
            Weighted-
                avg exercise price
            Weighted-avg
                contractual liferemaining(years)US$0.81-US$0.99
            1,339,322
            US$0.97
            3.32
            839,322
            US$0.97
            3.05US$1.00-US$2.05
            3,576,340
            US$1.57
            4.64
            1,580,561
            US$1.49
            2.74US$2.06-US$2.99
            2,262,974
            US$2.56
            4.79
            746,305
            US$2.52
            3.53US$3.00-US$5.25
            1,669,821
            US$4.84
            3.35
            1,423,154
            US$5.12
            3.008,848,457
            
            
            4,589,342





The
      recognition and measurement principles of IFRS 2 have been applied to share
      options granted under the Company’s share options plans since November 7, 2002
      which have not vested by January 1, 2005 in accordance with IFRS 2 as adopted
      by
      the EU.







91
 **NOTES
          TO THE CONSOLIDATED FINANCIAL STATEMENTS**
 **DECEMBER
          31, 2006**


**Charge
      for the year under IFRS 2**




The
      charge to the income statement is calculated based on the fair value of the
      options granted which have not yet vested.




The
      fair
      value of the options is expensed over the vesting period of the option.
      US$1,141,000 was charged to the income statement in 2006, (2005: US$1,368,000)
      (2004: US$758,000) split as follows:









*December
                31, 2006*
              *US$‘000*
            *December31,
                2005*
              *US$‘000*
            *December31,
                2004*
              *US$‘000*Share-based
                payments - cost of sales
            89
            110
            81Share-based
                payments - research and development
            36
            210
            96Share-based
                payments - selling, general and administrative
            1,016
            1,048
            581Total
            1,141
            1,368
            758





The
      total
      share based payments charge for the year was US$1,262,000. However, a total
      of
      US$121,000 of research and development share based payments was capitalised
      in
      intangible assets during the year.




The
      fair
      value of services received in return for share options granted are measured
      by
      reference to the fair value of share options granted. The estimate of the fair
      value of services received is measured based on a trinomial model. The following
      are the input assumptions used in determining the fair value of share options
      granted in 2006 and 2005:






**Key
                management personnel**
            **Other
                employees**
            **Keymanagementpersonnel**
            **Other
                employees****2006**
            **2006**
            **2005**
            **2005**Weighted
                average fair value at measurement date
              Total
                share options granted
            US$1.17
              
              860,000
            US$0.97
              
              757,000
            US$0.95
              
              650,000
            US$0.75
              
              1,019,000Weighted
                average share price
            US$2.09
            US$1.95
            US$1.67
            US$1.69Weighted
                average exercise price
            US$2.09
            US$1.95
            US$1.67
            US$1.71Weighted
                average expected volatility
            56.11%
            54.88%
            60.3%
            59.72%Weighted
                average expected life
            5.73
                years
            4.47
                years
            5.33
                years
            3.28
                yearsWeighted
                average risk free interest rate
            4.55%
            4.83%
            4.51%
            4.01%Expected
                dividend yield
            0%
            0%
            0%
            0%





The
      expected life of the options is based on historical data and is not necessarily
      indicative of exercise patterns that may occur. The expected volatility is
      based
      on the historic volatility (calculated based on the expected life of the
      options). The Group has considered how future experience may affect historical
      volatility. The profile and activities of the Group are not expected to change
      in the immediate future and therefore Trinity Biotech would expect estimated
      volatility to be consistent with historical volatility.




92
 **NOTES
          TO THE CONSOLIDATED FINANCIAL STATEMENTS**
 **DECEMBER
          31, 2006**


20.
            INTEREST-BEARING
                LOANS AND BORROWINGS


This
      note
      provides information about the contractual terms of the Group’s interest-bearing
      loans and borrowings. For more information about the Group’s exposure to
      interest rate and foreign currency risk, see note 29.





*Note*
            *December
                31, 2006*
              *US$’000*
            *December
                31, 2005*
              *US$’000***Current
                liabilities**Finance
                lease liabilities
            
            256
            241Promissory
                note
            
            -
            3,000Bank
                loans, secured
            27(c)-
                Repayable by instalment
            
            8,157
            2,504-
                Repayable not by instalment
            
            1,969
            1,97510,382
            7,720**Non-current
                liabilities**Finance
                lease liabilities
            
            248
            381Bank
                loans, secured
            27(c)-
                Repayable by instalment
            
            32,828
            9,98833,076
            10,369





***Bank
      loans***


Trinity
      Biotech has a US$43,340,000 club banking facility with Allied Irish Bank plc
      and
      Bank of Scotland (Ireland) Limited. The facility consists of a five year term
      loan of US$41,340,000 and a one year revolver of US$2,000,000. Due to the
      acquisition of the haemostasis product line of bioMerieux, (see note 26), the
      facility was amended in July 2006, increasing the original loan facility by
      US$30 million from US$13,340,000 to US$43,340,000. The term loan is repayable
      in
      ten equal biannual instalments commencing in January 2007. This facility is
      secured on the assets of the Group (see note 27 (c)).Various covenants apply
      to
      the Group’s bank borrowings. At December 31, 2006, the total amount outstanding
      under the facility amounted to US$42,917,000. The debt is stated net of
      unamortised funding costs of US$423,000.





***Finance
      lease liabilities***


Finance
      lease liabilities are payable as follows:





*December
                31, 2006*
              *US$’000*Minimum
                lease payments
            Interest
            PrincipalLess
                than one year
            278
            22
            256In
                more than one year, but not more than two
            234
            8
            226In
                more than two years but not more than three
            23
            1
            22535
            31
            504








*December
                31, 2005*
              *US$’000*Minimum
                lease payments
            Interest
            PrincipalLess
                than one year
            267
            26
            241In
                more than one year, but not more than two
            220
            15
            205In
                more than two years but not more than three
            181
            5
            176668
            46
            622





Under
      the
      terms of the lease arrangements, no contingent rents are payable.





**Promissory
      notes**


During
      2006, the Group issued a promissory note for the payment of deferred
      consideration to bioMerieux as part of the acquisition of their haemostasis
      product line. However, these notes are non interest bearing and are included
      under Other Financial Liabilities at December 31, 2006 (see note 23). In July
      2005, Trinity Biotech completed the acquisition of Primus Corporation for a
      total consideration of US$14,503,000.


93
 **NOTES
          TO THE CONSOLIDATED FINANCIAL STATEMENTS**
 **DECEMBER
          31, 2006**


Part
        of
        the consideration included a one year promissory note of US$3 million. Interest
        was charged on this note at a quarterly rate of 0.5% above the base interest
        rate of the US Federal Reserve Bank and this interest was paid to the
        shareholders of Primus on a quarterly basis. As the interest rate applying
        to
        the promissory note represented a commercial interest rate, the Group did
        not
        discount the promissory note. The principal amount of US$3,000,000 was paid
        to
        the shareholders of Primus during 2006.
 
 21.
              CONVERTIBLE
                  NOTES - INTEREST BEARING
 
 *December
                  31, 2006*
                *US$’000*
              *December
                  31, 2005*
                *US$’000***Convertible
                  notes**Due
                  within one year
              
              1,836
              7,203Due
                  greater than one year
              
              -
              1,836Total
              
              1,836
              9,039
 
 At
        December 31, 2006, the balance outstanding on the convertible notes, resulting
        from the private placement of US$20,00,000 in July 2003 and a further
        US$5,000,000 in January 2004, was US$1,836,000 (2005: US$9,039,000) including
        accrued interest at year end of US$14,000 (2005: US$70,000). The Group made
        four
        principal repayments of US$1,822,000 each during 2006. Two repayments were
        made
        by way of cash and two repayments were made by the issue of shares. The final
        principal repayment was made on January 2, 2007 by way of shares.
 
 The
        Company has availed of the exemption in IFRS 1 and has not applied IAS 32
        until
        January 1, 2005. Under IAS 32, the equity and liability elements of the
        convertible notes are recorded separately, with the equity component of the
        convertible notes being calculated as the excess of the issue proceeds over
        the
        present value of the future interest and principal repayments, discounted
        at the
        market rate of interest applicable to similar liabilities that do not have
        a
        conversion option. Transaction costs are allocated to the liability and equity
        components in proportion to the allocation of proceeds. The corresponding
        interest expense recognised in the income statement is calculated using the
        effective interest rate method. The effective interest rate is the normal
        coupon
        rate of 3% adjusted for the effect of transaction costs.
  *2006*
                  *US$’000*
                *2005*
                  *US$’000*Proceeds
                    from issue of convertible notes
                25,000
                25,000Transaction
                    costs
                (1,307)
                (1,307)Net
                23,693
                23,693Converted
                    to shares
                (15,533)
                (11,889)Cash
                    repayments
                (7,288)
                (3,644)Amount
                    classified as equity
                (297)
                (297)Accreted
                    interest capitalised
                1,261
                1,176Carrying
                    amount of liability at December 31
                1,836
                9,039
  
 The
        amount of the convertible notes classified as equity on January 1, 2005 of
        US$297,000 is net of attributable transaction costs of US$16,000. Of the
        US$297,000, US$71,000 has been reclassified from equity to share capital
        and
        share premium following the share conversions in December 2003 and January
        2004. At December 31, 2005 and 2006 the amount classified as equity of
        US$226,000 is stated net of the related deferred tax asset of US$62,000 and
        carried at US$164,000.
 
 22.
              TRADE
                  AND OTHER PAYABLES
 
 *December
                  31, 2006*
                *US$’000*
              *December
                  31, 2005*
                *US$’000*Trade
                  payables
              7,752
              6,065Payroll
                  taxes
              415
              296Employee
                  related social insurance
              438
              347Accrued
                  liabilities
              8,983
              5,345Deferred
                  income
              2,871
              71520,459
              12,768


94
 **NOTES
          TO THE CONSOLIDATED FINANCIAL STATEMENTS**
 **DECEMBER
          31, 2006**





23.
            OTHER
                FINANCIAL LIABILITIES





*December
                31, 2006*
              *US$’000*
            *December
                31, 2005*
              *US$’000***Consideration**Due
                within 1 year
            3,120
            3,707Due
                greater than 1 year
            2,568
            -5,688
            3,707





**Consideration**


In
      June
      2006, the Group acquired the haemostasis product line of bioMerieux for a cash
      consideration of US$38.2  million.
      In addition bioMerieux is entitled to deferred consideration up to a maximum
      of
      US$6.2 million, payable in June 2007 and up to an additional US$5.3 million,
      payable in June 2008, depending on the performance of the product line during
      2006. At December 31, 2006, it was determined that the deferred consideration
      of
      US$3.2million and US$2.8 million would be payable in July 2007 and July 2008
      respectively. In accordance with the Group’s policy these deferred consideration
      amounts have been discounted to reflect their fair value at the date of
      acquisition. At December 31, 2006, the fair value of the deferred consideration
      amounted to US$3,120,000 and US$2,568,000 respectively.





The
      Group
      has issued a promissory note for the payment of the deferred consideration.
       According to the terms of this promissory note, there are certain events
      of default which may cause the deferred consideration to become payable
      immediately.  In this instance the payment may, at the election of the
      holder of the promissory note, be payable in shares in Trinity Biotech, at
      a
      price of 90% of the average trading price for the preceding 20 days.  As at
      December 31, 2006 the Group was not in default of the terms of the promissory
      note and hence the deferred consideration has been classified according to
      the
      payment terms as outlined above.





In
      July
      2005, Trinity Biotech completed the acquisition of Primus Corporation for
      US$14.5 million. The shareholders of Primus were entitled to an additional
      consideration depending on the growth of the Company during 2005 net of an
      adjustment relating to the level of working capital at the date of acquisition.
      At December 31, 2005 given the financial performance of Primus post acquisition,
      it was determined that US$2,705,000 would be payable to the former shareholders
      of Primus in 2006. This was paid to the shareholders of Primus in
      2006.





In
      April,
      2004, the Group acquired the trade and assets of Fitzgerald Industries
      International, Inc. (“Fitzgerald”) for US$16 million in cash. Under the terms of
      the purchase agreement, contingent consideration would be payable depending
      on
      the financial performance of that business during the first two years of
      operation post acquisition relative to its pre-acquisition performance. At
      December 31, 2005 it was determined, based on the performance of Fitzgerald
      in
      2005, that an amount of US$1,002,000 would be payable to the shareholders of
      Fitzgerald. This was paid by the Group in 2006.





24.
            PROVISIONS





*December
                31, 2006*
              *US$’000*
            *December
                31, 2005*
              *US$’000*Provisions
            100
            199





Movement
      on provisions during the year is as follows:


*December
                31, 2006*
              *US$’000*Balance
                at January 1, 2006
            199Provisions
                made during the year
            100Provisions
                released during the year
            (199)Balance
                at December 31, 2006
            100





The
      above
      provision at December 31, 2006 represents the estimated cost of product
      warranties, the exact amount which cannot be determined, arising out of the
      acquisition of the haemostasis product line of bioMerieux. US$100,000 represents
      management’s best estimates of these obligations at December 31, 2006 and was
      recorded by way of a fair value adjustment on acquisition.


95
 **NOTES
          TO THE CONSOLIDATED FINANCIAL STATEMENTS**
 **DECEMBER
          31, 2006**


The
        provision at December 31, 2005 represented estimated royalty amounts, the
        exact
        amount of which could not be determined at that date. The provision was
        determined to be US$nil and released during 2006.
 
 25.
              OTHER
                  PAYABLES
 
 *December
                  31, 2006*
                *US$’000*
              *December
                  31, 2005*
                *US$’000*Other
                  payables
              838
              102
 26.
                BUSINESS
                    COMBINATIONS
 
 *2006
          Acquisitions*
 In
          June
          2006, Trinity Biotech acquired the haemostasis product line of bioMerieux
          Inc.
          (“bioMerieux”) for a total consideration of US$44.4 million, consisting of cash
          consideration of US$38.2 million, deferred consideration of US$5.5 million
          (net
          of discounting) and acquisition expenses of US$0.7million. At the year
          end,
          Trinity Biotech has accrued US$5,688,000 for the deferred consideration
          which
          will be paid in June 2007 and June 2008 (see note 23). A further US$5.5
          million
          of consideration was contingent on the performance of the product line
          during
          2006. However, the Group has determined that this contingent element is
          not
          payable as certain milestones concerning the performance of the business
          line
          were not met during 2006.
  The
        results of this acquisition for 2006 are incorporated from the date of
        acquisition in the consolidated income statement for the year ended December
        31,
        2006. The bioMerieux portfolio comprises a range of haemostasis test kits
        in
        addition to a range of automated instruments which are comparable to various
        instruments within Trinity Biotech’s Destiny instrument range.
 
  In
        October, 2006, Trinity Biotech acquired the French distribution business
        of
        Laboratoires Nephrotek SARL (“Nephrotek”) for a total consideration of
        US$1,175,000, consisting of cash consideration of US$1,060,000, of which
        US$239,000 remained payable at December, 31 2006 and acquisition expenses
        of
        US$115,000.
 
 *bioMerieux*
                *US$’000*
              *Nephrotek*
                *US$’000*
              *Total*
                *US$’000*Property,
                  plant and equipment
              2,354
              64
              2,418Inventories
              12,529
              345
              12,874Intangible
                  assets
              11,150
              235
              11,38526,033
              644
              26,677Deferred
                  tax liability (see note 12)
              1,293
              77
              1,370Trade
                  and other payables
              1,319
              69
              1,3882,612
              146
              2,758Fair
                  value of net assets
              23,421
              498
              23,919Goodwill
                  arising on acquisition
              21,002
              677
              21,67944,423
              1,175
              45,598Consideration:Cash
                  payments
              38,157
              821
              38,978Deferred
                  consideration
              5,511
              239
              5,750Costs
                  associated with the acquisition
              755
              115
              87044,423
              1,175
              45,598


96
 **NOTES
          TO THE CONSOLIDATED FINANCIAL STATEMENTS**
 **DECEMBER
          31, 2006**


Goodwill
      capitalised during 2006 in respect of the acquired haemostasis product line
      from
      bioMerieux and the acquired distribution business from Nephrotek amounted to
      US$21,679,000 and comprises:





Book
                values
              *US$’000*
            Fair
                value adjustments
              *US$’000*
            Fair
                value
              *US$’000*
            Consideration
              *US$’000*
            Goodwill
              *US$’000***bioMerieux**Property,
                plant and equipment
            2,659
            (305)
            2,354Inventories
                (including prepayments)*
            12,848
            (319)
            12,529Intangible
                assets
            -
            11,150
            11,15015,507
            10,526
            26,033Deferred
                tax liability
            -
            1,293
            1,293Trade
                and other payables
            1,219
            100
            1,31914,288
            9,133
            23,421
            44,423
            21,002**Nephrotek**Property,
                plant and equipment
            96
            (32)
            64Inventories
            394
            (49)
            345Intangible
                assets
            -
            235
            235490
            154
            644Deferred
                tax liability
            -
            77
            77Trade
                and other payables
            40
            29
            69450
            48
            498
            1,175
            677





*
      As part
      of the acquisition of the haemostasis product line of bioMerieux, the Group
      agreed to acquire inventories from bioMerieux with a fair value of US$12,529,000
      over a period of 12 months following the acquisition. By December 31, 2006
      Trinity had received US$7,774,000 of this acquisition inventory.





The
      goodwill of US$21,002,000 arising on the transaction is attributable to future
      synergies that will accrue to Trinity Biotech.  These synergies will be
      achieved through the significant increase in scale of the haemostasis product
      line which this acquisition brings.  These synergies include the positive
      impact that the rationalisation of the combined haemostasis line such as greater
      operating efficiencies in the Group’s Irish manufacturing operations.





Following
      the acquisition of the haemostasis product line of bioMerieux, Trinity Biotech
      sought to combine the range of products acquired with the Group’s existing
      product range. As part of this process it was decided to discontinue various
      existing products and this resulted in a US$5.8 million provision against the
      existing inventory of the Group. This provision has been disclosed as a separate
      line item in cost of sales in the 2006 income statement.





During
      the period, following the acquisition, fair value adjustments were made to
      recognise intangible assets acquired in 2006. The inventory acquired under
      the
      acquisition of the haemostasis product line of bioMerieux is being provided
      to
      Trinity Biotech on a phased basis over the 12 month period after the acquisition
      date. Consequently, at December 31, 2006, the fair valuation of inventory has
      been assessed on a provisional basis and will be confirmed during 2007. The
      fair
      value of all other assets and liabilities was complete at December 31,
      2006.





If
      the
      acquisitions had occurred on January 1, 2006 the Group revenue would have been
      US$141,935,000 and the retained profit for the financial period would have
      been
      US$5,559,000.  This
      information was compiled using a combination of available financial information
      or where unavailable, extrapolations of the results of the haemostasis line
      of
      bioMerieux and the distribution business of Nephrotek, both of which were
      acquired during 2006.





*Impact
      of the acquisition on the income statement*


Since
      their acquisition, the haemostasis product line of bioMerieux Inc. and the
      French distribution business of Laboratoires Nephrotek SARL have been fully
      integrated into the business of Trinity Biotech in each of the markets in which
      it operates. Consequently it is not practical to disclose the profit impact
      of
      these acquisitions during 2006.





97
 **NOTES
          TO THE CONSOLIDATED FINANCIAL STATEMENTS**
 **DECEMBER
          31, 2006**


The
      revenues attributable to these two acquisitions which have been included in
      the
      results for 2006 have been estimated at US$21,068,000.





*Impact
      of acquisitions on cash flow*


There
      were two acquisitions in 2006 which had a cash outflow of US$39,334,000. These
      were partly funded by US$30,000,000 received as part of the amendment to the
      current bank loan facility (see note 20). As the working capital of the
      businesses acquired was integrated into the Group’s existing operations by
      December 31, 2006, post acquisition operating cashflows are not obtainable.





The
      following represents the increases to goodwill which took place in
      2006.


*US$’000*Goodwill
                recognised with respect to 2006 acquisitions-
                bioMerieux
            21,002-
                Nephrotek
            677Total
                goodwill movement in 2006
            21,679




*2005
      Acquisitions*


In
      March
      2005, Trinity Biotech completed the acquisition of the assets of Research
      Diagnostics Inc (“RDI”), a
      provider of immunodiagnostic products for US$4,200,000 in cash. Acquisition
      expenses amounted to US$105,000. In July 2005, Trinity Biotech completed the
      acquisition of 100% of the equity in Primus Corporation (“Primus”), a leader in
      the field of in-vitro diagnostic testing for haemoglobin A1c and haemoglobin
      variants for US$14,503,000 consisting of a cash consideration of US$8,587,000
      and a one year promissory note of US$3,000,000. Acquisition expenses amounted
      to
      US$211,000. Under the terms of the purchase agreement, the shareholders of
      Primus were also entitled to an additional consideration based on the growth
      of
      the Group during the remainder of 2005. At December 31, 2005, the Group has
      accrued US$2,705,000 for this additional consideration which was paid in 2006.
      The results of these acquisitions for 2005 are incorporated from the date of
      acquisition in the consolidated statement of income for the year ended December
      31, 2005. The fair value of the identifiable assets and liabilities were as
      follows:





*Primus*
              *US$’000*
            *RDI*
              *US$’000*
            *Total*
              *US$
                ‘000*Property,
                plant and equipment
            2,395
            -
            2,395Trade
                and other receivables
            1,848
            -
            1,848Inventories
            1,304
            113
            1,417Intangible
                assets
            4,615
            1,790
            6,40510,162
            1,903
            12,065Deferred
                tax liability (see note 12)
            1,825
            216
            2,041Trade
                and other payables
            1,649
            -
            1,6493,474
            216
            3,690Fair
                value of net assets
            6,688
            1,687
            8,375Goodwill
                arising on acquisition
            7,688
            2,618
            10,30614,376
            4,305
            18,681Consideration:Cash
                payments
            8,587
            4,200
            12,787Less
                cash transferred with subsidiary
            (127)
            -
            (127)Deferred
                consideration
            3,000
            -
            3,000Other
                consideration (see note 23)
            2,705
            -
            2,705Costs
                associated with the acquisition
            211
            105
            31614,376
            4,305
            18,681





98
 **NOTES
          TO THE CONSOLIDATED FINANCIAL STATEMENTS**
 **DECEMBER
          31, 2006**





Goodwill
        capitalised during 2005 in respect of acquired businesses amounted to
        US$10,306,000 and comprises:
 
 Book
                  values
                *US$’000*
              Fair
                  value adjustments
                *US$’000*
              Fair
                  value
                *US$’000*
              Consideration
                *US$’000*
              Goodwill
                *U000***Primus**Property,
                  plant and equipment
              2,371
              24
              2,395Trade
                  and other receivables
              1,848
              -
              1,848Inventories
              1,858
              (554)
              1,304Intangible
                  assets
              330
              4,285
              4,6156,407
              3,755
              10,162Deferred
                  tax liability
              -
              1,825
              1,825Trade
                  and other payables
              1,566
              (33)
              1,533Creditors
                  greater than one year
              116
              -
              1164,725
              1,963
              6,688
              14,376
              7,688**RDI**Property,
                  plant and equipment
              10
              (10)
              -Inventories
              146
              (33)
              113Intangible
                  assets
              -
              1,790
              1,790156
              1,747
              1,903Deferred
                  tax liability
              -
              216
              216156
              1,531
              1,687
              4,305
              2,618
 
 
 27.
              COMMITMENTS
                  AND CONTINGENCIES
 
 (a)
              ***Capital
                  Commitments***
 The
        Group
        had capital commitments of US$1,731,000 authorised and contracted for as
        at
        December 31, 2006 (2005: US$nil). These capital commitments relate to additional
        plant and equipment required for the Group’s premises in Bray, Ireland as part
        of the integration of the bioMerieux acquisition.
  (b)
              ***Leasing
                    Commitments***
 The
          Group
          leases a number of premises under operating leases. The leases typically
          run for
          periods up to 25 years. Lease payments are reviewed periodically (typically
          on a
          5 year basis) to reflect market rentals. Operating lease commitments payable
          during the next 12 months amount to US$3,650,000 (2005: US$2,277,000) payable
          on
          leases of buildings at Dublin and Bray, Ireland, Berkshire, UK, Paris,
          France,
          Umea, Sweden, upstate New York, Kansas City, New Jersey, Massachusetts
          and
          Carlsbad, California and motor vehicles and equipment in Sweden, UK and
          Germany.
          US$475,000 (2005: US$249,000) of these operating lease commitments relates
          to
          leases whose remaining term will expire within one year, US$194,000 (2005:
          US$82,000) relates to leases whose remaining term expires between one and
          two
          years, US$937,000 (2005: US$342,000) between two and five years and the
          balance
          of US$2,044,000 (2005: US$1,604,000) relates to leases which expire after
          more
          than five years. See note 28.
   99
 **NOTES
              TO THE CONSOLIDATED FINANCIAL STATEMENTS**
 **DECEMBER
              31, 2006**





Future
        minimum operating lease commitments with non-cancellable terms in excess
        of one
        year are as follows:
 *Year
                  ended**2006**Operating
                  leases**US$’000*2007
              3,6502008
              3,8592009
              3,3422010
              2,7972011
              2,556Later
                  years
              32,062Total
                  lease obligations
              48,266*Year
                  ended**2005**Operating
                  leases**US$’000*2006
              2,2772007
              1,9982008
              ****1,9362009
              1,7192010
              1,539Later
                  years
              15,998Total
                  lease obligations
              25,467
 
 
 
 For
        future minimum finance lease commitments, in respect of which the lessor
        has a
        charge over the related assets, see note 20.
 
 (c)
              ***Bank
                  Security***
 The
        Group’s bank borrowings (note 20) are secured by a fixed and floating charge
        over the assets of Group entities, including specific charges over the shares
        in
        the subsidiaries and the Group’s patents. Various covenants apply to the Group’s
        bank borrowings with respect to profitability, interest cover, capital
        expenditure, working capital and location of assets. As at December 31, 2006
        the
        Group was in breach of a number of these covenants which had been waived
        by the
        banks. The banks also agreed to amend those covenants for subsequent periods.
        The Group has agreed to maintain US$15,500,000 (2005: US$9,000,000) on deposit
        with its lending banks. Resulting from the restrictions on this cash, the
        US$15,500,000 (2005: US$9,000,000) is shown as a financial asset at December
        31,
        2006. See note 16.
 
 (d)
              ***Section
                  17 Guarantees***
 Pursuant
        to the provisions of Section 17, Irish Companies (Amendment) Act, 1986, the
        Company has guaranteed the liabilities of Trinity Biotech Manufacturing Limited,
        Trinity Biotech Manufacturing Services Limited, Trinity Research Limited,
        Benen
        Trading Limited, Trinity Biotech Financial Services Limited and Trinity Biotech
        Sales Limited, subsidiary undertakings in the Republic of Ireland, for the
        financial year to December 31, 2006 and, as a result, these subsidiary
        undertakings have been exempted from the filing provisions of Section 17,
        Irish
        Companies (Amendment) Act, 1986. Where the Company enters into these guarantees
        of the indebtedness of other companies within its Group, the Company considers
        these to be insurance arrangements and accounts for them as such.  The
        Company treats the guarantee contract as a contingent liability until such
        time
        as it becomes probable that the company will be required to make a payment
        under
        the guarantee.  The Company does not enter into financial guarantee with
        third parties.


100
 **NOTES
          TO THE CONSOLIDATED FINANCIAL STATEMENTS**
 **DECEMBER
          31, 2006**


(e) ***Legal
        Settlement***
 In
        December 2003, Trinity
        Biotech initiated legal proceedings in the Superior Court of Middlesex County,
        Massachusetts against Inverness Medical and its affiliate Wampole for
        declaratory judgement, breach of contract and unfair and deceptive business
        practices in connection with the Defendants’ performance under a distribution
        agreement initially entered into in 1995 by Clark Laboratories Inc (now part
        of
        the Trinity Biotech Group) and subsequently amended in 2002. This legal dispute
        was settled during 2006. In August 3, 2006 the parties entered into a settlement
        agreement, a patent licence and a supply agreement. Under
        the
        terms of these agreements the parties settled their claims; Inverness granted
        Trinity a royalty bearing licence to its lateral flow patents for all diagnostic
        uses with the exception of women’s health and cardiology, including an Over the
        Counter (“OTC”) license for Trinity’s Unigold HIV products. In addition,
        Inverness agreed to manufacture Trinity’s Unigold HIV tests primarily for sale
        in the African market in its new facility in Hangzhou, China, and reimbursed
        Trinity US$1,000,000 towards its costs of US$967,000, incurred as part of
        the
        litigation.
 
 (f)
              ***Government
                  Grant Contingencies***
 The
        Group
        has received research and employment grant income from Irish development
        agencies. Subject to existence of certain conditions specified in the grant
        agreements, this income may become repayable. No such conditions existed
        as at
        December 31, 2006. However if the income were to become repayable, the maximum
        amounts repayable as at December 31, 2006 would amount to
        US$581,000.
 
 28.
              RELATED
                  PARTY TRANSACTIONS
 The
        Group
        has related party relationships with its subsidiaries, and with its directors
        and executive officers.
 
 ***Leasing
        arrangements with related parties***
 The
        Group
        has entered into various arrangements with JRJ Investments (“JRJ”), a
        partnership owned by Mr O’Caoimh and Dr Walsh, directors of the Company, to
        provide for current and potential future needs to extend its premises at
        IDA
        Business Park, Bray, Co. Wicklow, Ireland.
 
 In
        July
        2000, Trinity Biotech entered into an agreement with JRJ pursuant to which
        the
        Group took a lease of a 25,000 square foot premises adjacent to the existing
        facility for a term of 20 years at a rent of €7.62 per square foot (“the Current
        Extension”) for an annual rent of €190,000 (US$252,000). During 2006, the rent
        on this property was reviewed and increased to €11.00 per square foot, resulting
        in an annual rent of €275,000 (US$364,000).
 
 On
        November 20, 2002, the Group entered into an agreement for a 25 year lease
        with
        JRJ for offices that have been constructed adjacent to its premises at IDA
        Business Park, Bray, Co. Wicklow, Ireland. The annual rent of €381,000
        (US$504,000) is payable from January 1, 2004. Independent valuers have advised
        the Group that the rent fixed in respect of the Current Extension and the
        lease
        represents a fair market rent.
 
 At
        December 31, 2006 the Group has agreed to enter a further 25 year lease with
        JRJ
        for an additional 43,000 square foot manufacturing facility, in Bray Ireland,
        at
        a rate of €11.25 per square foot giving a total annual rent of €484,000
        (US$641,000). This lease will commence upon completion of the construction
        of
        the facility by JRJ during 2007. The directors determined, taking into account
        the advice of an independent valuer, that the rent in relation to this new
        premises represents a fair market rent.
 
 Trinity
        Biotech and its directors (excepting Mr O’Caoimh and Dr Walsh who express no
        opinion on this point) believe that the arrangements entered into represent
        a
        fair and reasonable basis on which the Group can meet its ongoing requirements
        for premises.
 
 *Compensation
        of key management personnel of the Group*
 
 The
        key
        management personnel of the Group is made up of the four executive directors.
        Compensation for the year ended December 31, 2006 of these personnel is detailed
        below:
 
 December
                  31, 2006
              December
                  31, 2005*US$’000*
              *US$’000*Short-term
                  employee benefits
              2,113
              1,752Post-employment
                  benefits
              119
              131Equity
                  compensation benefits
              665
              8282,897
              2,711
   101
 **NOTES
            TO THE CONSOLIDATED FINANCIAL STATEMENTS**
 **DECEMBER
            31, 2006**


Total
        director emoluments included in note 5 includes non executive director’s fees of
        US$100,000 and equity compensation benefits of US$67,000. Total director’s
        remuneration is also included in “personnel expenses” (see note 6).
 
 *Directors’
        and executive officers interests in the Company’s shares and share option
        plan*
 *‘A’
                  Ordinary Shares*
              *Share
                  options*At
                  January 1, 2006
              5,881,205
              4,211,666Exercised
              -
              -Granted
              -
              860,000Lapsed/
                  forfeited
              -
              (259,583)Shares
                  sold
              -
              -Shares
                  purchased
              -
              -At
                  December 31, 2006
              5,881,205
              4,812,083
 
 *‘A’
                  Ordinary Shares*
              *Share
                  options*At
                  January 1, 2005
              1,379,530
              6,108,541Exercised
              -
              (2,546,875)Granted
              -
              650,000Shares
                  sold
              -
              -Shares
                  purchased
              4,501,675
              -At
                  December 31, 2005
              5,881,205
              4,211,666
 
 Rayville
        Limited, an Irish registered company, which is wholly owned by the four
        executive directors and certain other executives of the Group, owns all of
        the
‘B’ non-voting Ordinary Shares in Trinity Research Limited, one of the Group’s
        subsidiaries. The ‘B’ shares do not entitle the holders thereof to receive any
        assets of the company on a winding up. All of the ‘A’ voting ordinary shares in
        Trinity Research Limited are held by the Group. Trinity Research Limited
        may,
        from time to time, declare dividends to Rayville Limited and Rayville Limited
        may declare dividends to its shareholders out of those amounts. Any such
        dividends paid by Trinity Research Limited are ordinarily treated as
        compensation expense by the Group in the consolidated financial statements
        prepared in accordance with IFRS as adopted by the EU, notwithstanding their
        legal form of dividends to minority interests, as this best represents the
        substance of the transactions. The amount of dividends included in compensation
        expense was US$969,000, US$1,410,000 and US$1,911,000 for 2004, 2005 and
        2006
        respectively, of which US$914,000, US$1,333,000 and US$1,779,000 respectively
        related to the four executive directors of the Group. There were no dividends
        payable to Rayville Limited as of December 31, 2004, 2005 or 2006.
 
 In
        addition, in December 2006, the remuneration committee of the Board approved
        the
        payment of a dividend of US$5,331,000 by Trinity Research Limited to Rayville
        Limited on the ‘B’ shares held by it. This will be used to fund executive
        compensation over the next number of years under the arrangement described
        above
        and will be reflected in compensation expense over the corresponding period.
        As
        this payment is matched by a loan from Rayville Limited to Trinity Research
        Limited which is repayable solely at the discretion of the remuneration
        committee of the Board and is unsecured and interest free, the Group has
        netted
        this dividend paid to Rayville Limited against the corresponding loan from
        Rayville Limited in the 2006 consolidated financial statements.
 
 
 29.
              DERIVATIVES
                  AND FINANCIAL INSTRUMENTS
 The
        Group
        uses a range of financial instruments (including cash, bank borrowings,
        convertible notes, promissory notes and finance leases) to fund its operations.
        These instruments are used to manage the liquidity of the Group in a cost
        effective, low-risk manner. Working capital management is a key additional
        element in the effective management of overall liquidity. The Group does
        not
        trade in financial instruments or derivatives.
 
 The
        main
        risks arising from the utilisation of these financial instruments are interest
        rate risk, liquidity risk and credit risk.
 102
 **NOTES
              TO THE CONSOLIDATED FINANCIAL STATEMENTS**
 **DECEMBER
              31, 2006**


***Interest
      rate risk***


The
      Group
      borrows in US dollars at floating and fixed rates of interest. Year-end
      borrowings totalled US$45,294,000 (2005: US$27,128,000), (net of cash and
      restricted cash: US$26,973,000 (2005: US$8,247,000)), at interest rates ranging
      from 3.0% to 6.87% (2005: 3.0% to 5.65%) and including US$2,377,000 (2005:
      US$9,714,000) of fixed rate debt at interest rates ranging from 3% to 5% (2005:
      3% to 5%). In
      broad
      terms, a one-percentage point increase in interest rates would increase interest
      income by US$183,000 (2005: US$189,000) and increase the interest expense by
      US$433,000 (2005: US$174,000) resulting in an increase in the net interest
      charge of US$246,000 (2005: decrease by US$15,000).





***Effective
      interest rate and repricing analysis***


The
      following table sets out all interest-earning financial assets and interest
      bearing financial liabilities held by the Group at December 31, indicating
      their
      effective interest rates and the period in which they re-price:





**As
                at December 31, 2006**
              **US$’000**
            **Note**
            **Effective
                interest rate**
            **Total**
              **US$’000**
            **1
                year**
              **US$’000**
            **1-2
                years**
              **US$’000**
            **2-5
                years**
              **US$’000**Cash
                and cash equivalents
            17
            5.22%
            2,821
            2,821
            -
            -Financial
                asset - restricted cash
            16
            5.22%
            15,500
            15,500
            -
            -Secured
                bank loans - floating
            20
            6.87%
            (42,917)
            (42,917)
            -
            -Secured
                bank loans - fixed
            20
            5%
            (37)
            -
            -
            (37)Convertible
                notes - fixed
            21
            6.23%
            (1,836)
            (1,836)
            -
            -Finance
                lease liabilities - fixed
            20
            5.91%
            (504)
            (5)
            (104)
            (395)**Total**
            
            
            **(26,973)**
            **(26,437)**
            **(104)**
            **(432)**




The
      effective interest rate for the convertible notes is the normal coupon rate
      of
      3% adjusted for the effect of transaction costs. The effective interest rate
      on
      all other loans and borrowings is the same as the actual interest
      rates.





**As
                at December 31, 2005**
              **US$’000**
            **Note**
            **Effective
                interest rate**
            **Total**
              **US$’000**
            **1
                year**
              **US$’000**
            **1-2
                years**
              **US$’000**
            **2-5
                years**
              **US$’000**Cash
                and cash equivalents
            17
            4.22%
            9,881
            9,881
            -
            -Financial
                asset - restricted cash
            16
            4.22%
            9,000
            9,000
            -
            -Secured
                bank loans - floating
            20
            5.65%
            (14,414)
            (14,414)
            -
            -Secured
                bank loans - fixed
            20
            5%
            (53)
            -
            -
            (53)Promissory
                note -
              Floating
            20
            4.27%
            (3,000)
            (3,000)
            -
            -Convertible
                notes - fixed
            21
            6.23%
            (9,039)
            -
            (9,039)
            -Finance
                lease liabilities - fixed
            20
            5.60%
            (622)
            (54)
            -
            (568)**Total**
            
            
            **(8,247)**
            **1,413**
            **(9,039)**
            **(621)**




***Liquidity
      risk***


The
      Group’s operations are cash generating. Short-term flexibility is achieved
      through the management of the group’s short-term deposits and through the use of
      a revolver loan facility.





103
 **NOTES
          TO THE CONSOLIDATED FINANCIAL STATEMENTS**
 **DECEMBER
          31, 2006**


***Foreign
      exchange risk***


The
      majority of the Group’s activities are conducted in US Dollars. The primary
      foreign exchange risk arises from the fluctuating value of the Group’s euro
      denominated expenses as a result of the movement in the exchange rate between
      the US Dollar and the euro. Arising from this, where considered necessary,
      the
      Group pursues a treasury policy, where necessary, which aims to sell US Dollars
      forward to match a portion of its uncovered euro expenses at exchange rates
      lower than budgeted exchange rates. These forward contracts are primarily
      cashflow hedging instruments whose objective is to cover a portion of these
      euro
      forecasted transactions . All
      of
      the forward contracts normally have maturities of less than one year after
      the
      balance sheet date. Where necessary, the forward contracts are rolled over
      at
      maturity. There were no forward contracts in place at December 31,
      2006.





With
      an
      increasing level of euro denominated sales, the Group anticipates that, over
      the
      next three years, a higher proportion of its non-US Dollar expenses will be
      matched by non-US Dollar revenues. The Group had foreign currency denominated
      cash balances equivalent to US$952,000 at December 31, 2006 (2005:
      US$1,486,000).





*IFRS
      1 exemption from IAS 39*


The
      Group
      has availed of the exemption in IFRS 1 and applied the requirements of IAS
      39
      prospectively from January 1, 2005.





*Forecasted
      transactions*


From
      January 1, 2005 the Group states its forward exchange contracts at fair value
      in
      the balance sheet. The Group classifies certain of its forward exchange
      contracts as hedging forecasted transactions and thus accounts for them as
      cash
      flow hedges. During 2005 and 2006, changes in the fair value of these contracts
      were recognized in equity and then in the case of contracts which were exercised
      during 2005 and 2006, the cumulative gain or losses were transferred to the
      income statement.





There
      were no forward exchange contracts in place at December 31, 2006. At December
      31, 2005 the fair value of all forward exchange contracts amounted to a
      liability of US$44,000 which comprised of assets of US$6,000,000 and liabilities
      of US$6,044,000.





***Credit
      Risk***


The
      Group
      has no significant concentrations of credit risk. Exposure to credit risk is
      monitored on an ongoing basis. The Group maintains specific provisions for
      potential credit losses. To date such losses have been within management’s
      expectations. Due to the large number of customers and the geographical
      dispersion of these customers, the Group has no significant concentrations
      of
      accounts receivable.





With
      respect to credit risk arising from the other financial assets of the Group,
      which comprise cash and cash equivalents, restricted cash and potentially
      forward contracts, the Group’s exposure to credit risk arises from default of
      the counter-party, with a maximum exposure equal to the carrying amount of
      these
      instruments.





The
      Group
      maintains cash and cash equivalents and restricted cash with various financial
      institutions. These financial institutions are located in a number of countries
      and Group policy is designed to limit exposure to any one institution. The
      Group
      performs periodic evaluations of the relative credit standing of those financial
      institutions.





The
      carrying amount reported in the balance sheet for cash and cash equivalents
      and
      restricted cash approximates their fair value.




***Fair
      value of interest bearing financial liabilities***


Carrying
                Value
              US$’000
            Fair
                Value
              US$’000Convertible
                notes
            1,836
            1,836Interest
                bearing loans
            42,954
            42,953Finance
                leases
            504
            501**Total**
            45,294
            45,290

















104
 **NOTES
          TO THE CONSOLIDATED FINANCIAL STATEMENTS**
 **DECEMBER
          31, 2006**


***Interest
        rate profile of financial liabilities***
 The
        interest rate profile of financial liabilities of the Group was as
        follows:
 
 *December
                  31, 2006*
                *US$
                  ‘000*
              *December
                  31, 2005*
                *US$
                  ‘000*Floating
                  rate financial liabilities
              42,917
              17,414Fixed
                  rate financial liabilities
              2,377
              9,71445,294
              27,128
 
 Floating
        rate financial liabilities comprise other borrowings that bear interest at
        rates
        of between 6.62% and 6.87%. These borrowings are provided by lenders at margins
        ranging from 1.25% to 1.50% over inter-bank rates.
 
 The
        tables below provide information about the Group’s long-term debt obligations
        that are sensitive to changes in interest rates. The table presents principal
        cash flows and related weighted average interest rates by expected maturity
        dates. Weighted average variable rates are based on estimated future interest
        rates. The information is presented in US Dollars, which is the Group’s
        reporting currency.
 
 ***Group******Maturity******Before
                  December 31***
              ***2007***
              ***2008***
              ***2009***
              ***2010***
              ***2011***
              ***After
                  2012***
              ***Total***
              ***Fair***
                ***value*****Long-term
                  debt**Variable
                  rate - US$000
              10,109
              8,146
              8,183
              8,221
              8,258
              -
              42,917
              42,917Average
                  interest rate
              6.75%
              6.75%
              6.75%
              6.75%
              6.75%
              **-**
              6.75%Fixed
                  rate - US$000
              2,109
              243
              25
              -
              -
              -
              2,377
              2,373Average
                  interest rate
              3.30%
              5.34%
              6.96%
              -
              -
              -
              3.55%
 
 
 *December
                  31, 2006*
              *December
                  31, 2005****Fixed
                  rate financial liabilities***Weighted
                  average interest rate
              3.55%
              3.15%Weighted
                  average period for which rate is fixed
              0.46
                  years
              1.13
                  years
 
 
 ***Maturity
        of financial liabilities***
 The
        maturity profile of the Group financial liabilities was as follows:
 
 *December
                  31, 2006*
                *US$’000*
              *December
                  31, 2005*
                *US$’000*In
                  one year or less, or on demand
              12,218
              14,922In
                  more than one year, but not more than two
              8,389
              4,546In
                  more than two years, but not more than three
              8,208
              2,680In
                  more than three years, but not more than four
              8,221
              2,492In
                  more than four years, but not more than five
              8,258
              2,48845,294
              27,128
 
 ***Fair
        Values of Financial Assets and Liabilities***
 There
        is
        no significant difference between the fair value and the carrying value of
        the
        Group’s financial assets and liabilities as at December 31, 2006 or December 31,
        2005. At December 31, 2006 forward contracts with a carrying value of US$nil
        (2005:$44,000) had a fair value of US$nil (2005: US$44,000).
 
 30.
              ACCOUNTING
                  ESTIMATES AND JUDGEMENTS
 The
        preparation of these financial statements requires us to make estimates and
        judgements that affect the reported amount of assets, liabilities, revenues
        and
        expenses, and related disclosure of contingent assets and
        liabilities.





105
 **NOTES
          TO THE CONSOLIDATED FINANCIAL STATEMENTS**
 **DECEMBER
          31, 2006**


On
      an
      on-going basis, we evaluate our estimates, including those related to intangible
      assets, contingencies and litigation. We base our estimates on historical
      experience and on various other assumptions that are believed to be reasonable
      under the circumstances, the results of which form the basis for making
      judgements about the carrying values of assets and liabilities that are not
      readily apparent from other sources. Actual results may differ from these
      estimates under different assumptions or conditions.





**Key
      sources of estimation uncertainty**


Note
      11
      contains information about the assumptions and their risk factors relating
      to
      goodwill impairment. Note 19 outlines information regarding the valuation of
      share options. In note 29, detailed analysis is given about the interest rate
      risk, credit risk, liquidity risk and foreign exchange risk of the
      Group.





**Critical
      accounting judgements in applying the Group’s accounting
      policies**


Certain
      critical accounting judgements in applying the group’s accounting policies are
      described below:





*Research
      and development expenditure*


Under
      IFRS as adopted by the EU, we write-off research and development expenditure
      as
      incurred, with the exception of expenditure on projects whose outcome has been
      assessed with reasonable certainty as to technical feasibility, commercial
      viability and recovery of costs through future revenues. Such expenditure is
      capitalised at cost within intangible assets and amortised over its expected
      useful life of 15 years, which commences when commercial production starts.





Factors
      which impact our judgement to capitalise certain research and development
      expenditure include the degree of regulatory approval for products and the
      results of any market research to determine the likely future commercial success
      of products being developed. We review these factors each year to determine
      whether our previous estimates as to feasibility, viability and recovery should
      be changed.




*Impairment
      of intangible assets and goodwill*


Definite
      lived intangible assets are reviewed for indicators of impairment annually
      while
      goodwill and indefinite lived assets are tested for impairment annually,
      individually or at the cash generating unit level.




Factors
      considered important, as part of an impairment review, include the following:




•
            
            Significant
                underperformance relative to expected historical or projected future
                operating results;•
            
            Significant
                changes in the manner of our use of the acquired assets or the strategy
                for our overall business;•
            
            Obsolescence
                of products;•
            
            Significant
                decline in our stock price for a sustained period; and our market
                capitalisation relative to net book value.




When
      we
      determine that the carrying value of intangibles, non-current assets and related
      goodwill may not be recoverable based upon the existence of one or more of
      the
      above indicators of impairment, any impairment is measured based on our
      estimates of projected net discounted cash flows expected to result from that
      asset, including eventual disposition. Our estimated impairment could prove
      insufficient if our analysis overestimated the cash flows or conditions change
      in the future.




*Allowance
      for slow-moving and obsolete inventory*


We
      evaluate the realisability of our inventory on a case-by-case basis and make
      adjustments to our inventory provision based on our estimates of expected
      losses. We write-off any inventory that is approaching its “use-by” date and for
      which no further re-processing can be performed. We also consider recent trends
      in revenues for various inventory items and instances where the realisable
      value
      of inventory is likely to be less than its carrying value.





*Allowance
      for impairment of receivables*


We
      make
      judgements as to our ability to collect outstanding receivables and where
      necessary make allowances for impairment. Such impairments are made based upon
      a
      specific review of all significant outstanding receivables. In determining
      the
      allowance, we analyse our historical collection experience and current economic
      trends. If the historical data we use to calculate the allowance for impairment
      of receivables does not reflect the future ability to collect outstanding
      receivables, additional allowances for impairment of receivables may be needed
      and the future results of operations could be materially affected (see note
      1).


106
 **NOTES
          TO THE CONSOLIDATED FINANCIAL STATEMENTS**
 **DECEMBER
          31, 2006**


*Accounting
      for income taxes*


Significant
      judgement is required in determining our worldwide income tax expense provision.
      In the ordinary course of a global business, there are many transactions and
      calculations where the ultimate tax outcome is uncertain. Some of these
      uncertainties arise as a consequence of revenue sharing and cost reimbursement
      arrangements among related entities, the process of identifying items of revenue
      and expense that qualify for preferential tax treatment and segregation of
      foreign and domestic income and expense to avoid double taxation. Although
      we
      believe that our estimates are reasonable, no assurance can be given that the
      final tax outcome of these matters will not be different than that which is
      reflected in our historical income tax provisions and accruals. Such differences
      could have a material effect on our income tax provision and profit in the
      period in which such determination is made. Deferred tax assets and liabilities
      are determined using enacted or substantially enacted tax rates for the effects
      of net operating losses and temporary differences between the book and tax
      bases
      of assets and liabilities.





While
      we
      have considered future taxable income and ongoing prudent and feasible tax
      planning strategies in assessing whether deferred tax assets can be recognised,
      there is no assurance that these deferred tax assets may be realisable. The
      extent to which recognised deferred tax assets which are recognised are not
      realisable could have a material adverse impact on our income tax provision
      and
      net income in the period in which such determination is made. In addition,
      we
      operate within multiple taxing jurisdictions and are subject to audits in these
      jurisdictions. These audits can involve complex issues that may require an
      extended period of time for resolution. In management's opinion, adequate
      provisions for income taxes have been made.





Note
      12
      to the financial statements outlines the basis for the deferred tax assets
      and
      liabilities and Schedule II includes a movement on the valuation allowances
      for
      income taxes during the period. There were no material changes in estimates
      used
      to calculate the income tax expense provision during 2006 or 2005.








31.
            EXPLANATION
                OF TRANSITION TO IAS 32 and IAS 39 AS ADOPTED BY THE
                EU


The
      transition date for compliance with IAS 32 and IAS 39 was January 1, 2005.
      In
      preparing its opening IFRS as adopted by the EU balance sheet, at January 1,
      2005, to incorporate IAS 32 and IAS 39, the Group adjusted amounts reported
      previously in financial statements prepared in accordance with its old basis
      of
      accounting, Irish GAAP (“Previous GAAP”). An explanation of how the transition
      from Previous GAAP to IFRS as adopted by the EU has effected the Group’s
      financial position, financial performance and cash flows resulting from the
      transition under IFRS to IAS 32 and IAS 39 is set out in the following notes
      and
      tables.





***Transition
      to IAS 32 and IAS 39***


The
      Group
      has availed of the exemption in IFRS 1 and has not applied IAS 32 and IAS 39
      until January 1, 2005. The convertible debentures and forward contracts are
      presented under IFRS in line with Previous GAAP at December 31, 2004.





The
      Group
      uses financial instruments throughout its businesses: borrowings (including
      convertible debt), cash and cash equivalents are used to finance the Group’s
      operations; trade debtors and trade creditors arise directly from operations
      and
      derivatives (principally forward contracts) are used to manage exchange
      risk.





IAS
      39
      requires, in general, that financial instruments are recorded initially at
      fair
      value with subsequent measurement either at fair value or at amortised cost
      dependent on the nature of the financial asset or liability. Except for the
      convertible debt and forward contracts as outlined below, this would not result
      in any adjustments as:


·
            Cash
                and cash equivalents, accounts receivable and payable are stated
                at cost,
                which approximates fair value given the short-dated nature of these
                assets
                and liabilities;


·
            Loans
                are stated at cost which approximates amortised cost as the interest
                rate
                re-prices at regular, short
                intervals.





*Convertible
      notes*


The
      application of IAS 32 to the compound financial instruments resulted in the
      separation of the equity and liability elements, with the equity component
      of
      the convertible notes being calculated as the excess of the issue proceeds
      over
      the present value of the future interest and principal payments, discounted
      at
      the market rate of interest applicable to similar liabilities that do not have
      a
      conversion option. Transaction costs were allocated to the liability and equity
      components in proportion to the allocation of proceeds. Certain transaction
      costs which had been included in share premium on conversion of the convertible
      debentures are reclassified to the carrying value of the liability. Interest
      expense is calculated using the effective interest rate method.


107
 **NOTES
          TO THE CONSOLIDATED FINANCIAL STATEMENTS**
 **DECEMBER
          31, 2006**


*Forward
      contracts*


The
      application of IAS 32 and IAS 39 to the Group’s forward contracts has resulted
      in the fair value of these contracts being recognised on the balance sheet,
      the
      unrecognised gains and losses are recognised in equity.





*Deferred
      tax*


A
      deferred tax liability was created on the temporary difference between the
      tax
      base of the convertible debenture and its tax base at the inception of the
      convertible debenture. This liability is being unwound over its life and regular
      timing differences arise on the accrued and paid convertible debenture interest.
      This has resulted in a deferred tax asset at January 1, 2005.





A
      deferred tax liability was created on the temporary difference that arose on
      the
      fair value of the forward contracts as this gain is not chargeable for tax
      purposes until it is recognised.





The
      reconciliation of the balance stated under IFRS as adopted by the EU (prior
      to
      the application of IAS 32 and IAS 39) at January 1, 2005 to the balance stated
      under IFRS as adopted by the EU (including the application of IAS 32 and IAS
      39)
      at January 1, 2005 is as follows:


*US$’000****Convertible
                  notes***Balance
                  at January 1, 2005 (prior to the application of IAS 32 and IAS
                  39)
              15,819Accreted
                  interest capitalised
              336Amount
                  classified as equity
              (226)Transaction
                  costs
              (25)Balance
                  at January 1, 2005 (following the application of IAS 32 and IAS
                  39)
              15,904***Current
                  assets - derivative financial instruments***Balance
                  at January 1, 2005 (prior to the application of IAS 32 and IAS
                  39)
              -Fair
                  value of hedging contracts
              418Balance
                  at January 1,2005 (following the application of IAS 32 and IAS
                  39)
              418***Retained
                  earnings***Balance
                  at January 1, 2005 (prior to the application of IAS 32 and IAS
                  39)
              (71)Convertible
                  notes interest at effective rate
              (336)Deferred
                  tax on convertible notes
              39Balance
                  at January 1, 2005 (following the application of IAS 32 and IAS
                  39)
              (368)***Deferred
                  tax liability***Balance
                  at January 1, 2005 (prior to the application of IAS 32 and IAS
                  39)
              3,517Deferred
                  tax on fair value of hedging contracts
              45Deferred
                  tax on convertible notes
              24Balance
                  at January 1, 2005 (following the application of IAS 32 and IAS
                  39)
              3,586***Other
                  reserves -convertible notes equity component***Balance
                  at January 1, 2005 (prior to the application of IAS 32 and IAS
                  39)
              -Convertible
                  notes residual
              226Deferred
                  tax on convertible notes
              (62)Balance
                  at January 1, 2005 (following the application of IAS 32 and IAS
                  39)
              164***Other
                  reserves - hedging reserve***Balance
                  at January 1, 2005 (prior to the application of IAS 32 and IAS
                  39)
              -Fair
                  value of hedging contracts
              418Deferred
                  tax on fair value of hedging contracts
              (45)Balance
                  at January 1, 2005 (following the application of IAS 32 and IAS
                  39)
              373***Other
                  reserves - warrant reserve***Balance
                  at January 1, 2005 (prior to the application of IAS 32 and IAS
                  39)
              -Fair
                  value of warrants
              3,803Balance
                  at January 1, 2005 (following the application of IAS 32 and IAS
                  39)
              3,803***Share
                  premium***Balance
                  at January 1, 2005 (prior to the application of IAS 32 and IAS
                  39)
              120,444Fair
                  value of warrants
              (3,803)Convertible
                  notes transaction costs
              24Balance
                  at January 1, 2005 (following the application of IAS 32 and IAS
                  39)
              116,665





108
 **NOTES
            TO THE CONSOLIDATED FINANCIAL STATEMENTS**
 **DECEMBER
            31, 2006**





32.
              GROUP
                  UNDERTAKINGS
 The
        consolidated financial statements include the financial statements of Trinity
        Biotech plc and the following principal subsidiary
        undertakings:
 *Name
                  and registered office*
              *Principal
                  activity*
              *Principal
                  Country of incorporation and operation*
              *Group
                  % holding*Trinity
                  Biotech plc
                IDA
                  Business Park, Bray,
                Co.
                  Wicklow, Ireland
              Investment
                  and holding company
              Ireland
              Holding
                  companyTrinity
                  Biotech Manufacturing Limited
                IDA
                  Business Park, Bray,
                Co.
                  Wicklow, Ireland
              Manufacture
                  and sale of diagnostic test kits
              Ireland
              100%Trinity
                  Research Limited
                IDA
                  Business Park, Bray,
                Co.
                  Wicklow, Ireland
              Research
                  and development
              Ireland
              100%Benen
                  Trading Limited
                IDA
                  Business Park, Bray,
                Co.
                  Wicklow, Ireland
              Trading
              Ireland
              100%Trinity
                  Biotech Manufacturing Services Limited
                IDA
                  Business Park, Bray,
                Co.
                  Wicklow, Ireland
              Engineering
                  services
              Ireland
              100%Trinity
                  Biotech Financial Services Limited
                IDA
                  Business Park, Bray,
                Co
                  Wicklow, Ireland
              Provision
                  of financial services
              Ireland
              100%Trinity
                  Biotech Inc
                Girts
                  Road, Jamestown, NY 14702,USA
              Holding
                  Company
              U.S.A.
              100%Clark
                  Laboratories Inc
                Trading
                  as Trinity Biotech (USA)
                Girts
                  Road, Jamestown
                NY14702,
                  USA
              Manufacture
                  and sale of diagnostic test kits
              U.S.A.
              100%Mardx
                  Diagnostics Inc
                5919
                  Farnsworth Court
                Carlsbad
                CA
                  92008, USA
              Manufacture
                  and sale of diagnostic test kits
              U.S.A.
              100%Fitzgerald
                  Industries International, Inc
                2711
                  Centerville Road, Suite 400
                Wilmington,
                  New Castle
                Delaware,
                  19808
              Management
                  services company
              U.S.A.
              100%Biopool
                  US Inc (trading as Trinity Biotech Distribution)
                Girts
                  Road, Jamestown
                NY14702,
                  USA
              Sale
                  of diagnostic test kits
              U.S.A.
              100%
  109
 **NOTES
              TO THE CONSOLIDATED FINANCIAL STATEMENTS**
 **DECEMBER
              31, 2006**








Primus
                Corporation
              4231
                E 75thTerrace
              Kansas
                City,
              MO
                64132
            Manufacture
                and sale of diagnostic test kits and instrumentation
            U.S.A.
            100%Trinity
                Biotech (UK Sales) Limited
              54
                Queens Road
              Reading
                RG1 4A2, England
            Sale
                of diagnostic kits
            UK
            100%Trinity
                Biotech GmbH
              Otto
                Hesse Str 19
              64293
                Darmstadt, Germany
            Manufacture
                of diagnostic
              instrumentation
                and
              sale
                of diagnostic test kits
            Germany
            100%Biopool
                AB
              S-903
                47 Umea
              Sweden
            Manufacture
                and
              sale
                of diagnostic test kits
            Sweden
            100%Trinity
                Biotech France SARL
              300A
                Rue Marcel Paul
              21
                Des Grands Godets
              93
                500 Champigny sur marne
            Sale
                of diagnostic kits
            France
            100%






33.
              DIFFERENCES
                  BETWEEN IFRS AS ADOPTED BY THE EU AND ACCOUNTING PRINCIPLES GENERALLY
                  ACCEPTED IN THE UNITED STATES
  The
        Consolidated Financial Statements are prepared in accordance with International
        Financial Reporting Standards (IFRS) as adopted by the EU. IFRS as adopted
        by
        the EU differ in certain significant respects from US generally accepted
        accounting principles (“US GAAP”). These differences relate principally to the
        following items and the necessary adjustments are shown in the tables set
        out
        below:
 
 *(a)*
              *Goodwill:*
 The
        difference in the carrying value of goodwill under US GAAP and IFRS as adopted
        by the EU relates to the differing treatment of goodwill acquired prior to
        1998
        and the different transition dates under US GAAP and IFRS as adopted by the
        EU
        for the move from the systematic amortisation of goodwill over a lifetime
        of 20
        years to impairment testing of the carrying value of goodwill on an annual
        basis
        or more frequently if there are indicators of impairment. The treatment of
        the
        e xcess
        of
        the acquirer’s interest in the net fair value of acquiree’s identifiable assets,
        liabilities and contingent liabilities over cost (“negative goodwill”) also
        differs under IFRS as adopted by the EU and US GAAP.
 
 In
        prior
        years under Previous GAAP (Irish GAAP), goodwill was either written-off
        immediately on completion of the acquisition against shareholders' equity,
        or
        capitalised in the balance sheet and amortised through the statement of income
        on a systematic basis over its useful economic life. From 1998 until January
        1,
        2004, the date of transition to IFRS as adopted by the EU, goodwill was
        capitalised and amortised over the period of its expected useful life, however,
        historic goodwill pre 1998 continued to remain an offset against shareholders’
equity. From January 1, 2004 goodwill is accounted for in accordance with
        IFRS 3 *Business
        Combinations.* IFRS 3 prohibits
        the amortisation of goodwill acquired in a business combination and instead
        requires the goodwill to be tested for impairment annually, or more frequently
        if events or changes in circumstances indicate that the asset might be impaired,
        in accordance with IAS 36 *Impairment
        of Assets.* Additional
        goodwill of US$21,777,000, representing goodwill that was written off against
        shareholders equity under Previous GAAP, would be recognised under US GAAP,
        net
        of US GAAP amortisation of US$9,231,000 to December 31, 2003.
 
 G oodwill
        impairment tests are undertaken at a consistent time in each annual period.
        Impairment is determined by assessing the recoverable amount of the
        cash-generating unit to which the goodwill relates. Where the recoverable
        amount
        of the cash-generating unit is less than the carrying amount, an impairment
        loss
        is recognised. The Group tested its goodwill for impairment on the date of
        its
        transition to IFRS as adopted by the EU and at December 31, 2006, 2005, and
        2004
        in the manner prescribed by IAS 36 and determined that its goodwill was not
        impaired on these dates.
  110
 **NOTES
            TO THE CONSOLIDATED FINANCIAL STATEMENTS**
 **DECEMBER
            31, 2006**


Negative
        goodwill arises when the net amounts assigned to assets acquired and liabilities
        assumed exceed the cost of an acquired entity. Under IFRS as adopted by the
        EU, if
        the
        acquirer’s interest in the net fair value of the identifiable assets,
        liabilities and contingent liabilities exceeds the cost of the business
        combination, the acquirer shall (a) reassess the identification and measurement
        of the acquiree’s identifiable assets, liabilities and contingent liabilities
        and the measurement of the cost of the combination and (b) recognise immediately
        in profit or loss any excess remaining after that reassessment.
 
 Under
        US
        GAAP, goodwill is not amortised, but is instead subject to impairment tests
        annually or more frequently if indicators of impairment are present. On December
        31, 2006, 2005, and 2004 the Group performed its annual impairment tests
        of
        goodwill and indefinite-lived intangible assets, and concluded that there
        was no
        impairment in the carrying value of goodwill at those dates.
 
 Negative
        goodwill is allocated to reduce proportionately
        the values assigned to the acquired non-current assets, any excess is recognised
        in income as an extraordinary gain.
 
 At
        December 31, 2004, the Group had recognised US$3,451,000 of negative goodwill
        in
        retained earnings under IFRS as adopted by the EU. Under US GAAP US$2,500,000
        of
        this negative goodwill would be allocated to reduce property, plant and
        equipment. The balance of US$951,000 would be recognised in retained earnings.
        Depreciation of US$57,000 (2005: US$57,000 and 2004: US$54,000), under IFRS
        as
        adopted by the EU, on property, plant and equipment acquired would not be
        recognised under US GAAP as the value of the acquired building has been fully
        offset by the negative goodwill arising on the acquisition. The cumulative
        impact on equity under US GAAP of amortisation not recognised is US$256,000.
 
 Under
        IFRS 3 *Business
        Combinations,* following the completion of the fair value exercises in 2005 in respect of
        the
        acquisitions made during 2004, amendments were made to the fair values reported
        in the 2004 financial statements related to the net assets acquired in the
        2004
        business combinations. The net difference of US$56,000 was taken as an
        adjustment to goodwill on acquisition under IFRS in 2005 (See note 26). Under
        US
        GAAP, the Group has expensed fair value adjustments arising in 2005 relating
        to
        the 2004 acquisitions as the Group has applied a shorter purchase price
        allocation period under US GAAP.
 
 The
        aggregate amount of goodwill relating to acquisitions during the period for
        the
        Group and for each reportable segment for each of the periods presented is
        as
        follows:
 
 *2006*
              *2005*
              *2004**US$’000*
              *US$’000*
              *US$’000*Rest
                  of World
              21,679
              3,722
              8,728Americas
              -
              7,688
              -21,679
              11,410
              8,728
 
 The
        net
        book value of goodwill under US GAAP at December 31, 2006 and 2005 was
        US$89,107,000 and US$67,428,000, respectively.
 
 Intangible
        assets comprise goodwill, which is not amortisable, and certain other
        non-current intangible assets, which are amortisable. Other non-current asset
        amortisation under US GAAP for the year ended December 31, 2006 was US$2,175,000
        (2005: US$1,410,000 and 2004: US$715,000). Amortisation of non-current
        intangible assets under US GAAP is estimated to be approximately US$2,750,000
        in
        2007, US$2,698,000 in 2008, US$2,602,000 in 2009, US$2,481,000 in 2010,
        US$2,282,000 in 2011 and US$11,234,000 thereafter.
 
 *(b)*
              *Share
                  Capital Not Paid:*
 Under
        IFRS as adopted by the EU, unpaid share capital is classified as a receivable
        under current assets. Under US GAAP, share capital receivable is reported
        as a
        reduction to Shareholders' Equity. Unpaid share capital at December 31, 2006
        is
        US$nil (2005: US$61,000). **





111
 **NOTES
          TO THE CONSOLIDATED FINANCIAL STATEMENTS**
 **DECEMBER
          31, 2006**


*(c)*
              *Statement
                  of Comprehensive Income:*
 The
        Group
        prepares a “Statement of Recognised Income and Expense” which is similar to the
“Statement of Comprehensive Income” required under US GAAP. SFAS 130 requires
        disclosure of the cumulative amounts of other comprehensive income and amounts
        reclassified from the Statement of Comprehensive Income to earnings each
        period.
  *(d)*
              *Sale
                  and Leaseback:*
 Under
        IFRS as adopted by the EU, the Group’s sale and leaseback transaction, which
        took place in December 1999, was recorded as a disposal of assets with the
        gain
        on the disposal of US$1,014,000 recognised in the income statement in the
        period
        of the transaction. Under US GAAP, this amount is deferred and released to
        the
        income statement over the period of the lease (20 years).
 
 *(e)*
              *Product
                  Development Costs:*
 Under
        IFRS as adopted by the EU, development expenditure on projects whose outcome
        can
        be assessed with reasonable certainty as to technical feasibility, commercial
        viability and recovery of costs through future revenues, are capitalised
        at cost
        within intangible assets. US GAAP, as set forth in SFAS 2, *Accounting
        for Research and Development Costs* ,
        requires development costs to be written off as incurred. However, SFAS
        86 *Accounting for the Costs of Computer Software to be Sold, Leased or Otherwise
        Marketed* specifies
        that costs incurred internally in creating a computer software product shall
        be
        charged to expense when incurred as research and development until technological
        feasibility has been established for the product. Technological feasibility
        is
        established upon completion of a detail program design or, in its absence,
        completion of a working model. Thereafter, all software production costs
        shall
        be capitalized and subsequently reported at the lower of unamortized cost
        or net
        realizable value. The Group has determined that technological feasibility,
        as
        defined by SFAS 86 i.e. the completion of all planning, designing, coding,
        and
        testing activities that are necessary to establish that the product can be
        produced to meet its design specifications including functions, features,
        and
        technical performance requirements has not yet been established for its software
        development projects and accordingly the Group has expensed this development
        expenditure under US GAAP in 2006, 2005 and 2004.
 
 ***(f)*
              *Share-based
                  Payment:*
 Under
        IFRS as adopted by the EU, IFRS 2 *Share-based
        Payment* requires
        that for equity-settled share-based payment transactions (i.e. the issuance
        of
        share options), the Group measures the services received and the corresponding
        increase in equity at fair value at the measurement date (which is the grant
        date) using a recognised valuation methodology for the valuation of financial
        instruments such as the trinomial model. Given that the share options granted
        do
        not vest until the completion of a specified period of service, the fair
        value
        is determined on the basis that the services to be rendered by employees
        as
        consideration for the granting of share options will be received over the
        vesting period, which is assessed at the grant date. The expense in the income
        statement in relation to share options represents the product of the total
        number of options anticipated to vest and the fair value of those options;
        this
        amount is allocated to accounting periods on a straight-line basis over the
        vesting period. Given that the performance conditions underlying the Group’s
        share options are non-market in nature, the cumulative charge to the income
        statement is only reversed where the performance condition is not met or
        where
        an employee in receipt of share options relinquishes service prior to completion
        of the expected vesting period. The proceeds received net of any directly
        attributable transaction costs are credited to share capital (nominal value)
        and
        share premium when the options are exercised. Share based payments, to the
        extent that they relate to direct labour involved in development activities
        are
        capitalised.
 
 Under
        US
        GAAP, the Group has adopted SFAS 123R *Share
        Based Payment* with
        effect from January 1, 2006, with the trinomial model, as used under IFRS
        as
        adopted by the EU, being used to calculate the fair value of options granted.
        SFAS 123R requires a public entity to measure the cost of employee services
        received in exchange for an award of equity instruments based on the grant-date
        fair value of the award (with limited exceptions), and recognise the cost
        over
        the period during which an employee is required to provide service in exchange
        for the award—the requisite service period (usually the vesting period). No
        compensation cost is recognized for equity instruments for which employees
        do
        not render the requisite service. If an equity award is modified after the
        grant
        date, incremental compensation cost will be recognized in an amount equal
        to the
        excess of the fair value of the modified award over the fair value of the
        original award immediately before the modification.





112
 **NOTES
          TO THE CONSOLIDATED FINANCIAL STATEMENTS**
 **DECEMBER
          31, 2006**


The
        Group
        has adopted SFAS 123R using the modified prospective transition method. Under
        the modified prospective transition method, the compensation cost for the
        year
        ended December 31, 2006 includes; (a) compensation costs for all share-based
        payments granted prior to, but not yet vested as of January 1, 2006, based
        on
        the grant date fair value estimated in accordance with the original provisions
        of SFAS 123 and b) compensation cost for all share options granted subsequent
        to
        January 1, 2006, based on the grant date fair values estimated in accordance
        with the provisions of SFAS 123R. The compensation expense on the share-based
        payments granted prior to, but not yet vested as of January 1, 2006, calculated
        under the provisions of SFAS 123, would be no different had the provisions
        of
        SFAS 123R been applied.
 
 Under
        US
        GAAP additional share based payments of US$71,000 were recognised in the income
        statement as certain options granted prior to November 7, 2002 are excluded
        from
        the scope of IFRS 2 but are in scope for SFAS 123R. Under SFAS 123R share
        based
        payments totalling US$1,333,000 were recorded as a movement in shareholders’
equity in 2006.
 
 Prior
        to
        the implementation of SFAS 123R in 2006, the Group had elected to follow
        Accounting Principles Board Opinion No. 25 *Accounting
        for Stock Issued to Employees* (“APB
        25”) and related interpretations in accounting for its employee stock options
        and therefore did not recognise a compensation expense in the income statement
        as all options were granted at an exercise price equal to the market price
        on
        the date of grant. The proforma effect of using the fair value of the options
        was disclosed in accordance with SFAS 123 as if the Group had accounted for
        its
        employee options under the fair value method, which would be different had
        we
        had applied SFAS 123R.
 
 *(**g)*
              *Derivatives
                  and Financial Instruments:*
 ***Forward
        contracts***
 As
        part
        of a managed hedging policy, Trinity Biotech entered into a series of forward
        contracts to sell US Dollars forward for euro. The Group adopted the provisions
        of IAS 32 *Financial
        Instruments: Disclosure and Presentation* and IAS
        39 *Financial
        Instruments: Recognition and Measurement* on
        January 1, 2005. IAS 39 requires, in general, that financial instruments
        are
        recorded initially at fair value with subsequent measurement either at fair
        value or at amortised cost depending on the nature of the financial asset
        or
        liability. The unrecognised gains and losses on forward contracts are recognised
        in the statement of changes in equity and the fair values of these contracts
        are
        recognised on the balance sheet. From January 1, 2005 the Group has followed
        the
        criteria in IAS 39 regarding documentation and designation of instruments
        used
        for hedging purposes. The Group has availed of the exemption in IFRS 1 *First
        time Adoption of International Financial Reporting Standards* and is
        presenting comparative information for derivative financial instruments under
        IFRS as adopted by the EU in line with Previous GAAP.
 
 Under
        US
        GAAP all derivatives are recognised on the balance sheet at fair value.
        Derivatives that are not qualifying hedges or where hedge correlation cannot
        be
        demonstrated must be adjusted to fair value through income. Under Previous
        GAAP
        used until January 1, 2005 derivatives are not recognised until settled.
        Realised gains and losses on transactions where derivatives are used to hedge
        cross-currency cashflows are ultimately recorded in the income statement
        on
        settlement.
 
 During
        2001 Trinity Biotech began documenting its hedging transactions in accordance
        with the requirements of SFAS 133. During the year ended December 31, 2004,
        US$868,000 of foreign exchange gains were recognised in the income statement.
        This included realised foreign exchange gains of US$126,000 on the exercise
        of
        forward contracts under US GAAP, relating to contracts entered into during
        the
        year which had not been designated as hedging instruments. At December 31,
        2004
        contracts with a fair value of US$47,000 were recorded in other comprehensive
        income under US GAAP.
 
 The
        Group
        designated all of its forward contracts outstanding at January 1, 2005, as
        cashflow hedging instruments on its transition to IAS 32 and IAS 39. Under
        US
        GAAP, the Group had not designated forward contracts, with a fair value of
        US$244,000 at January 1, 2005, as cashflow hedging instruments at inception
        of
        the contracts. Accordingly US$244,000 of foreign exchange gains which were
        recycled to the income statement in 2005 under IFRS, as adopted by the EU,
        had
        already been recognised directly in the income statement under US GAAP in
        2004.


113
 **NOTES
          TO THE CONSOLIDATED FINANCIAL STATEMENTS**
 **DECEMBER
          31, 2006**


In
        2005 a
        loss of US$239,000 was recognised in other comprehensive income in respect
        of
        forward contracts designated as hedging instruments, in accordance with SFAS
        133. During the year ended December 31, 2005 US$51,000 of foreign exchange
        gains
        were recognised in the income statement. This included realised foreign exchange
        gains of US$16,000 on the exercise of forward contracts under US GAAP, relating
        to contracts entered into during the year which had not been designated as
        hedging instruments. At December 31, 2005 contracts with a fair value of
        (US$64,000) were recorded in other comprehensive income, which were reclassified
        into earnings on the exercise of forward contracts in the year ended December
        31, 2006. The last of the Group’s forward contracts expired in December 2006 and
        there were no forward contracts outstanding at December 31, 2006.
 
 ***Convertible
        Debt***
 Under
        IFRS from Jan uary
        1,
        2005 the Group’s convertible debentures are accounted for as compound financial
        instruments in accordance with IAS 32; the equity and liability elements
        are
        separately recorded, with the equity component of the convertible notes being
        calculated as the excess of the issue proceeds over the present value of
        the
        future interest and principle payments, discounted at the market rate of
        interest applicable to similar liabilities that do not have a conversion
        option,
        the equity portion being the residual. Transaction costs are allocated to
        the
        liability and equity components in  proportion
        to the allocation of proceeds. The corresponding interest expense recognised
        in
        the income statement is calculated using the effective interest rate method.
        Under US GAAP, the Group has considered whether the embedded conversion option
        should be separated from the debt and accounted for separately at fair value
        at
        each reporting period in accordance with SFAS 133 *Accounting
        for Derivative Instruments* and
        EITF
        Issue No.00-19, *Accounting
        for Derivative Financial Instruments Indexed to, and Potentially Settled
        in, a
        Company’s Own Stock* .
        The
        Group has determined that the conversion feature does not have intrinsic
        value
        as the convertible debt securities are
        convertible into common stock of the issuer at a specified price at the option
        of the holder and that conversion price exceeds the fair market value of
        the
        underlying stock at the date the parties committed to the terms of the
        convertible debt. Therefore, no portion of the proceeds from the issuance
        of the
        convertible debt is accounted for as attributable to the conversion feature.
        As
        a result of the differing accounting treatment under IFRS and US GAAP of
        convertible debt, under US GAAP the Group has recognised additional
        shareholders’ equity of US$150,000 at December 31, 2005 and additional profit in
        the income statement in 2005 of US$64,000. In 2006 the Group recognised an
        additional charge of US$150,000 in the income statement under US GAAP. As
        the
        last tranche of convertible notes is payable on January 2, 2007 there is
        no
        difference in shareholders’ equity at December 31, 2006.
 
 *(h)*
              *Capitalisation
                  of Interest Charges in Self-Constructed
                  Assets:*
 IFRS
        23 *Capitalisation
        of Borrowing Costs* generally requires the immediate expensing of borrowing costs. However, the
        Standard permits, as an allowed alternative treatment, the capitalisation
        of
        borrowing costs that are directly attributable to the acquisition, construction
        or production of a qualifying asset. Under IFRS the Group has elected to
        expense
        borrowing costs directly attributable to qualifying assets. Under US GAAP,
        SFAS
        34 *Capitalisation
        of Interest Cost* requires
        interest cost to be capitalised as part of the historical cost of acquiring
        qualifying assets. To
        qualify for interest capitalization under SFAS 34, assets must require a
        period
        of time to get them ready for their intended use.  The
        interest cost eligible for capitalization shall be the interest cost recognized
        on borrowings and other obligations. Under US GAAP the Group has capitalised
        interest costs totalling US$77,000 at December 31, 2006 and US$52,000 at
        December 31, 2005 relating to qualifying assets.
 
 *(i)*
              *In-Process
                  Research and Development (“R&D”):*******
 IFRS
        3 *Business
        Combinations* requires
        all intangible assets, including in-process R&D, acquired in a business
        combination, to be measured at fair value at the date of acquisition and
        recognised separately from goodwill. Subsequent to initial recognition, the
        intangible asset is carried at cost less any accumulated amortisation and
        impairment losses. Under US GAAP intangible assets acquired in a business
        combination are initially recognised and measured in accordance with SFAS
        141 *Business
        Combinations* .
        Costs
        are assigned to all identifiable tangible and intangible assets of an acquired
        entity, including any resulting from research and development activities
        of the
        acquired entity or to be used in research and development activities of the
        acquired entity, in accordance with SFAS 141. FIN 4 *Applicability
        of FASB Statement No. 2 to Business Combinations Accounted for by the Purchase
        Method* addresses the accounting treatment for identifiable tangible and intangible
        assets to be used in research and development activities that are acquired
        in a
        purchase business combination. Costs assigned to assets to be used in a
        particular research and development project and that have no alternative
        future
        use should be charged to expense at the date of consummation of the combination.
        In 2005 the Group assigned a fair value of US$400,000 to in-process R&D
        acquired as part of the acquisition of Primus. Under US GAAP this intangible
        had
        been charged to expense at the date of consummation of the
        combination.  Amortization
        of US$27,000 (2005: US$12,000) under IFRS as adopted by the EU on this
        in-process R&D acquired would not be recognised under US
        GAAP.


114
 **NOTES
          TO THE CONSOLIDATED FINANCIAL STATEMENTS**
 **DECEMBER
          31, 2006**


*(**j)*
            *Deferred
                Tax:*


Deferred
      tax differences arise between IFRS and US GAAP due to the impact of the nature
      and timing of the reconciling items arising. The principal causes of the
      deferred tax differences are the reversal of deferred tax liabilities created
      under IFRS by the capitalisation of qualifying development expenditure, the
      impact of the write off of negative goodwill against non current assets acquired
      under US GAAP on the carrying value of the Group’s property, plant and equipment
      and the recognition of the deferred tax asset on unrealised intercompany stock
      profit reflected at the seller’s rate under US GAAP and at the buyer’s rate
      under IFRS. The Group’s deferred tax position under IFRS has also been adjusted
      to reflect the impact on deferred tax of the immediate write off of in-process
      R&D acquired in a business combination at the date of consummation of the
      combination under US GAAP, the capitalisation of interest charges in
      self-constructed assets, the reversal of the deferred tax liability recognised
      on the equity component of convertible notes under IFRS and greater taxable
      temporary differences under US GAAP on tax-deductible goodwill as a lesser
      net
      book value has been recognised for this goodwill under IFRS than under US GAAP.
      The systematic amortisation of goodwill ceased under US GAAP in 2002. It
      continued for an additional two years under Previous GAAP until the transition
      to IFRS on January 1, 2004.





CUMULATIVE
      EFFECT ON SHAREHOLDERS’ EQUITY


*2006*
            *2005*
            *2004**US$’000*
            *US$’000*
            *US$’000*Total
                shareholders’ equity under IFRS as adopted by the EU
            167,262
            133,618
            118,894US
                GAAP adjustments:Goodwill-
                Gross (i)
            21,777
            21,777
            21,777-
                Gross (ii)
            (2,500)
            (2,500)
            (2,500)-
                   Gross (iii)
            (56)
            (56)
            --
                Aggregate amortisation
            (9,231)
            (9,231)
            (9,231)In
                process R&D acquired in a business combination-
                Gross
            (400)
            (400)
            --
                Aggregate amortisation
            39
            12
            -Product
                development costs-
                Gross
            (18,219)
            (12,296)
            (7,416)-
                Aggregate amortisation
            1,048
            555
            164Capitalisation
                of interest in self-constructed assets-
                Gross
            77
            52
            --
                Aggregate depreciation
            (7)
            (1)
            -Property,
                plant and equipment
            256
            176
            119Share
                capital not paid
            -
            (61)
            (158)Adjustment
                for sale and leaseback
            (658)
            (709)
            (760)Adjustment
                for fair value of derivative instruments
            -
            -
            418Adjustment
                for equity component of convertible debt
            -
            150
            -Deferred
                tax
            1,915
            1,683
            726Shareholders’
                equity under US GAAP
            161,303
            132,769
            122,033





(i)  Goodwill
      written-off under Previous GAAP against shareholders’ equity of
      US$21,777,000.


(ii)  Excess
      of
      the acquirer’s interest in the net fair value of assets, liabilities and
      contingent liabilities acquired over cost recognised in retained earnings under
      IFRS as adopted by the EU and not against the carrying value of non-current
      assets acquired as required by US GAAP.


(iii)  Fair
      value adjustments to 2004 business combinations not recognised in goodwill
      under
      US GAAP.




At
      December 31, 2006 the cumulative total fair value of derivative instruments
      in
      other comprehensive income was US$nil (2005: (US$60,000)) (2004:
      US$47,000). At December 31, 2006 the total accumulated translation reserve
      in
      other comprehensive income was (US$4,355,000) (2005: (US$5,682,000)) (2004:
      (US$3,975,000)).




SFAS
      109 *Accounting
      for Income taxes* requires
      that all current deferred tax assets and liabilities and all non-current
      deferred tax assets and liabilities for a particular tax paying component and
      within a particular tax jurisdiction be offset and shown as a single
      amount.


115
 **NOTES
          TO THE CONSOLIDATED FINANCIAL STATEMENTS**
 **DECEMBER
          31, 2006**


DEFERRED
      TAX ASSETS AND LIABILITIES


*December
                31, 2006*
              *US$’000*
            *December
                31, 2005*
              *US$’000*
            *December
                31, 2004*
              *US’000*Current
                deferred tax asset
            3,780
            1,534
            173Current
                deferred tax liability
            (91)
            -
            (94)Non-current
                deferred tax asset
            1,388
            813
            1,227Non-current
                deferred tax liability
            (4,952)
            (4,116)
            (1,621)





EFFECT
                ON NET PROFIT
              For
                the year ended
            *December
                31, 2006*
              *US$’000*
            *December
                31, 2005*
              *US$’000*
            *December
                31,2004*
              *US$’000*Profit
                after taxation under IFRS as adopted by the EU
            3,276
            5,280
            5,714*US
                GAAP adjustments*Fair
                value adjustments relating to 2004 business combinations written
                off
            -
            (56)
            -Write
                back of depreciation charge for property, plant and equipment offset
                by
                negative goodwill
            57
            57
            54Recognition
                of deferred gain on sale and leaseback transaction
            51
            51
            51Recognition
                of additional fair-valued stock-based compensation under SFAS 123R
            (71)
            -
            -Reversal
                of fair-valued stock-based compensation
            -
            1,354
            745Expensing
                of development costs-
                Cost
            (5,862)
            (4,916)
            (3,201)-
                Amortisation
            475
            394
            164Capitalisation
                of interest in self-constructed assets-
                Gross
            25
            52
            --
                Depreciation
            (6)
            (1)
            -In-process
                R&D acquired in a business combination-
                Gross
            -
            (400)
            --
                Amortisation
            27
            12
            -Adjustment
                for fair value of derivative instruments
            -
            (244)
            126Adjustment
                for residual value of convertible debt
            (150)
            64
            -Deferred
                tax
            232
            935
            395(Loss)/
                profit under US GAAP
            (1,946)
            2,582
            4,048(Loss)/
                profit per ‘A’ ordinary share (US Dollars)
            (0.03)
            0.04
            0.07(Loss)/
                profit per ‘B’ ordinary share (US Dollars)**
            (0.06)
            0.08
            0.14Diluted
                (loss)/ profit per ‘A’ ordinary share (US Dollar)
            (0.03)
            0.04
            0.07Diluted
                (loss)/ profit per ‘B’ ordinary share (US Dollar) **
            (0.06)
            0.08
            0.14Weighted-average
                number of ‘A’ ordinary shares used in computing basic (loss)/ profit per
                ordinary share
            70,693,753
            58,890,084
            55,132,024Diluted
                weighted-average number of ‘A’ ordinary shares used in computing diluted
                (loss)/ profit per ordinary share
            74,563,197
            67,142,527
            65,740,993





116
 **NOTES
          TO THE CONSOLIDATED FINANCIAL STATEMENTS**
 **DECEMBER
          31, 2006**


**
      As the
‘B’ ordinary shareholders have twice the voting and dividend rights of the ‘A’
ordinary shareholders, the basic profit per ordinary share and the diluted
      profit per ordinary share for the ‘B’ ordinary shares is twice that of the ‘A’
ordinary shares.





The
      Group’s debentures are convertible into Class ‘A’ Ordinary Shares of the Group
      at a price ranging from US$3.55-US$4.00 at the option of the holder. In
      addition, under the terms of the agreement, the Group has the option to satisfy
      each repayment either in cash or in shares. Where the repayment of convertible
      notes is to be satisfied in shares, the number of shares will be based on,
      at
      the holders’ option, either the conversion price or 97% of the volume weighted
      average price per ADS for the twenty trading days for the period immediately
      preceding the repayment date.





CONSOLIDATED
      STATEMENTS OF COMPREHENSIVE INCOME





*December
                31*
              *2006*
            *December
                31*
              *2005*
            *December
                31*
              *2004**US$’000*
            *US$’000*
            *US$’000*(Loss)
                / profit under US GAAP
            (1,946)
            2,582
            4,048Translation
                adjustment
            1,327
            (1,707)
            116Fair
                value of derivative instruments (net of deferred tax)
            64
            (239)
            (54)Total
                comprehensive income
            (555)
            636
            4,110








CHANGES
      IN US GAAP EQUITY FOR THE YEARS ENDED DECEMBER 31, 2006, DECEMBER 31, 2005
      AND


DECEMBER
      31, 2004





MOVEMENT
                IN SHAREHOLDERS’ EQUITY - US GAAP
            *December
                31*
              *2006*
            *December
                31*
              *2005*
            *December
                31*
              *2004**US$’000*
            *US$’000*
            *US$’000*US
                GAAP Shareholders’ Equity at January 1
            132,769
            122,033
            87,234Net
                (loss)/profit for the period
            (1,946)
            2,582
            4,048‘A’
                shares issued for cash
            25,005
            -
            24,335‘A’
                shares issued for conversion of debenture
            3,644
            5,466
            427‘A’
                shares issued on conversion of warrant
            -
            -
            348Options
                exercised
            214
            2,491
            1,632Share
                based payments
            1,333
            -
            -Stock-based
                compensation - additional paid-in capital
            -
            14
            13‘A’
                shares issued as consideration for acquisition
            -
            -
            7,721Share
                issue expenses
            (1,168)
            (341)
            (1,509)Share
                proceeds outstanding
            -
            2,373
            (2,373)Share
                capital now paid
            61
            97
            95Other
                comprehensive income:Translation
                adjustment
            1,327
            (1,707)
            116Fair
                value of derivative instruments
            64
            (239)
            (54)US
                GAAP Shareholders’ Equity at December 31
            161,303
            132,769
            122,033







117
 **NOTES
          TO THE CONSOLIDATED FINANCIAL STATEMENTS**
 **DECEMBER
          31, 2006**





**Non
      cash transactions**


In
      January 2004, the Group completed a private placement of 5,294,118 of Class
‘A’
Ordinary Shares of the Group at a price of US$4.25 per share. The investors
      were
      granted five year warrants to purchase an aggregate of 1,058,824 Class ‘A’
Ordinary Shares of the Group at an exercise price of US$5.25 per share. The
      Group further granted warrants to purchase 200,000 Class 'A' Ordinary Shares
      in
      the Group to agents of the Group who were involved in this private placement
      at
      an exercise price of US$5.25. Under the terms of the placement, investors were
      also granted the right to purchase an additional 2,647,059 Class ‘A’ Ordinary
      Shares of the Group at a price of US$4.25 per share for a period of up to 30
      days after the closing of the transaction. An additional 431,617 Class ‘A’
Ordinary Shares of the Group were issued within the 30 day period following
      the
      closing of the transaction to investors who exercised this option.





In
      April
      2004, Trinity Biotech completed the acquisition of the assets of Fitzgerald
      Industries International Inc (Fitzgerald) for US$16,000,000 in cash **.** The
      acquisition was partly funded by the issue of 2,783,984 ‘A’ Ordinary Shares.
      Additional consideration was payable for the acquisition of the business of
      Fitzgerald, depending on the financial performance of that business during
      the
      first 18 months of operation post acquisition relative to its pre-acquisition
      performance. At December 31, 2004 the payment of these amounts was not
      considered to be probable, therefore no provisions for these amounts were made.
      At December 31, 2005 it was determined, based on the performance of Fitzgerald
      in 2005, that deferred consideration of US$1,002,000 was payable. This deferred
      consideration was paid during 2006.





In
      July
      2005, Trinity Biotech completed the acquisition of Primus Corporation, a leader
      in the field of in-vitro diagnostic testing for haemoglobin A1c and haemoglobin
      variants for US$14,503,000 consisting of cash consideration of US$8,587,000
      and
      a one year promissory note of US$3,000,000. Acquisition expenses amounted to
      US$211,000. Under the terms of the purchase agreement, the shareholders of
      Primus were also entitled to an additional consideration based on the growth
      of
      the Company during the remainder of 2005. At December 31 2005, the Group accrued
      US$2,705,000 for this additional consideration and this was paid in 2006.





In
      June
      2006, Trinity Biotech acquired the haemostasis product line of bioMerieux Inc.
      (“bioMerieux”) for a total consideration of US$44.4 million, consisting of cash
      consideration of US$38.2 million, deferred consideration of US$5.5 million
      (net
      of discounting) and acquisition expenses of US$0.7 million. At the year end,
      Trinity Biotech has accrued US$5,688,000 for the deferred consideration which
      will be paid in June 2007 and June 2008 (see note 23). A further US$5.5 million
      of consideration was contingent on the performance of the product line during
      2006. However, the Group has determined that this contingent element is not
      payable as certain milestones concerning the performance of the business line
      were not met during 2006.






In
      October, 2006, Trinity Biotech acquired the French distribution business of
      Nephrotek for a total consideration of US$1,204,000, consisting of cash
      consideration of US$1,089,000, of which US$239,000 remained payable at December,
      31 2006 and acquisition expenses of US$115,000.





**Share
      Option Schemes**


Under
      US
      GAAP, equity settled share-based payments made to employees are recognised
      in
      the financial statements based on the fair value of awards measured at the
      date
      of grant. The Group uses the graded-vesting method for recognising the share
      share-based compensation expense over the requisite service period for each
      separately vesting tranche of award. The fair value of share options is
      calculated using a trinomial option-pricing model which is consistent with
      the
      Group’s approach to valuing share options under IFRS as adopted by the
      EU.





The
      estimated weighted average grant date fair value per ‘A’ Ordinary Share of share
      options granted during the year ended December 31, 2006 was as
      follows:





*December
                31,*
              *2006*
              *US$*
            *December
                31,*
              *2005*
              *US$*
            *December
                31,*
              *2004*
              *US$*Key
                management personnel
            1.17
            0.95
            1.15Other
                employees
            0.97
            0.75
            1.37





118
 **NOTES
          TO THE CONSOLIDATED FINANCIAL STATEMENTS**
 **DECEMBER
          31, 2006**








The
      fair
      value of share options was estimated using a trinomial option pricing model
      with
      the following weighted average assumptions:


**Key
                management personnel**
            **Key
                management personnel**
            **Key
                management personnel****2006**
            **2005**
            **2004**Weighted
                average risk-free interest rate
            4.55%
            4.51%
            3.54%Weighted
                average expected dividend yield
            -
            -
            -Weighted
                average expected volatility
            55.11%
            60.30%
            66.48%Weighted
                average expected life
            5.73
                years
            5.33
                years
            5.28
                years





**Other
                employees**
            **Otheremployees**
            **Other
                employees****2006**
            **2005**
            **2004**Weighted
                average risk-free interest rate
            4.83%
            4.01%
            2.66%Weighted
                average expected dividend yield
            -
            -
            -Weighted
                average expected volatility
            54.88%
            59.72%
            65.24%Weighted
                average expected life
            4.47
                years
            3.28
                years
            3.17
                years





Expected
      volatility is based on historical volatility of the Group’s common stock over a
      period equal to the expected term of the options; the expected life represents
      the weighted average period of time that options granted are expected to be
      outstanding given consideration to vesting schedules and our historical exercise
      experience. The risk free rate is based on the U.S. government bonds zero coupon
      yield curve in effect at time of grant for periods corresponding with the
      expected life of the options.





Share
      options are generally awarded with an exercise price equal to the market price
      of the Group’s shares at the date of grant. Share options typically vest over a
      period of 4 years from the date of grant and expire 7 years from the date of
      grant (some options granted in earlier years expire 10 years from date of
      grant).





The
      following table summarises the option activity for the year ended December
      31,
      2006:


*Number
                of shares*
            *Weighted-averageexercise
                price*
              *US$*
            *Aggregate
                intrinsic value*
              *US$*
            *Weighted
                average Remaining lifein years*Outstanding
              January
                1, 2006
            8,848,457
            2.35Granted
            1,617,000
            2.02Exercised
            (145,155)
            1.47Forfeited
            (708,235)
            2.15Outstanding
              December
                31, 2006
            9,612,067
            2.32
            3,468,000
            4.0Exercisable
                at end of year
            5,605,469
            2.50
            2,604,000
            2.73





The
      intrinsic value of share options exercised during 2006 was US$97,000. The total
      fair value of options vested in 2006 was US$1,475,000.





The
      total
      amount of cash received by the Group resulting from the exercise of options
      during 2006 amounted to US$214,000. The Group issues new ‘A’ ordinary shares for
      all options exercised.





119
 **NOTES
          TO THE CONSOLIDATED FINANCIAL STATEMENTS**
 **DECEMBER
          31, 2006**








Non-vested
      share options outstanding as at December 31, 2006, are as follows:


*Share
                Options*
            *Weighted-average
                exercise price*
              *US$*
            *Weighted
                average grant date fair value per ‘A’ Ordinary
                Share*
              *US$*Non-vested
                options January 1, 2006
            4,215,784
            1.99
            1.08Granted
            1,617,000
            2.02
            1.07Vested
            (1,471,436)
            1.86
            1.01Forfeited
            (354,750)
            2.01
            1.01Non
                vested options December 31, 2006
            4,006,598
            2.06
            0.95





As
      at
      December 31, 2006, total unrecognised compensation cost related to unvested
      options amounted to US$2,362,000, which the Group expects to recognise over
      a
      weighted average period of 1.15 years.





**Charge
      for the year under US GAAP**


The
      charge to the income statement is calculated based on the fair value of the
      options granted which have not yet vested.




The
      fair
      value of the options is expensed over the vesting period of the option.
      US$1,333,000 was charged to the income statement in 2006 under US GAAP, split
      as
      follows:




*December
                31, 2006*
              *US$’000*Cost
                of sales
            94Research
                and development
            166Selling,
                general and administrative
            1,073Total
            1,333





Prior
      to
      the adoption of SFAS 123R, the Group accounted for its share options in
      accordance with the provisions of SFAS 123 (as amended by Statement 148) which
      allowed entities to continue to use the provisions of APB 25 and provide pro
      forma net income and pro forma earnings per share disclosures for employee
      stock
      options as if the fair value based method defined in SFAS 123 had been applied.





In
      2005
      and 2004, the Group elected to follow APB 25 and did not recognise a
      compensation expense in the income statement under US GAAP. In 2006, the pre-tax
      and post tax impact of the implementation of SFAS 123R was a charge to the
      income statement of US$1,333,000. Had the Group applied the principles of APB
      25
      in 2006, the effect on the 2006 net loss as reported and earning per share
      disclosures would be as follows;





*December
                31, 2006*
              *US$’000*Net
                loss as reported
            (1,946)Add:
              Total
                stock based employee compensation included in reported net income,
                net of
                related tax effects
            1,333Net
                loss had APB 25 been applied in 2006
            (613)Earnings
                per share had APB 25 been applied in 2006:Basic
                - per ‘A’ ordinary share (US Dollars)
            (0.01)Basic
                - per ‘B’ ordinary share (US Dollars)
            (0.02)Diluted
                - per ‘A’ ordinary share (US Dollars)
            (0.01)Diluted
                - as per ‘B’ ordinary share (US Dollars)
            (0.02)





120
 **NOTES
          TO THE CONSOLIDATED FINANCIAL STATEMENTS**
 **DECEMBER
          31, 2006**





Therefore,
      the impact of the implementation of SFAS 123R on the earnings per share in
      2006
      was to increase the loss per basic and diluted earning by US$0.02 per ‘A’
Ordinary share and increase the loss per basic and diluted earnings by US$0.04
      per ‘B’ Ordinary share.





The
      following table shows the pro forma net income and pro forma earnings per share
      disclosures for employee stock options as if the fair value based method defined
      in SFAS 123 had been applied in 2005 and 2004. The compensation expense recorded
      in 2006 of US$1,333,000 would have been no different had SFAS 123 been applied.





*December
                31, 2005*
              *US$’000*
            *December
                31,*
              *2004*
              *US$’000*Net
                (loss) /income as reported
            2,582
            4,048Add:
              Total
                stock based employee compensation included in reported net income,
                net of
                related tax effects
            14
            13Deduct:
              Total
                stock based employee compensation under fair value based methods
                for all
                rewards, net of related tax effects
            (1,607)
            (1,361)Proforma
                net (loss) / income
            989
            2,700Earnings
                per share:Basic
                - as reported per ‘A’ ordinary share
              (US
                Dollars)
            0.04
            0.07Basic
                - as reported per ‘B’ ordinary share
              (US
                Dollars)
            0.08
            0.14Diluted
                - as reported per ‘A’ ordinary share (US Dollars)
            0.04
            0.07Diluted
                - as reported per ‘B’ ordinary share (US Dollars)
            0.08
            0.14Basic
                - proforma per ‘A’ ordinary share (US Dollars)
            0.02
            0.05Basic
                - proforma per ‘B’ ordinary share (US Dollars)
            0.04
            0.10Diluted
                - proforma per ‘A’ ordinary share
              (US
                Dollars)
            0.02
            0.05Diluted
                - proforma per ‘B’ ordinary share
              (US
                Dollars)
            0.04
            0.10





**Capital
      shares reserved for future issuance**


The
      following table sets forth the shares of common stock reserved for future
      issuance:





*December
                31, 2006*Shares
                issuable on conversion of debentures
            497,324Shares
                underlying outstanding stock options
            8,294,743Shares
                available for grant under option plans
            4,309,170Shares
                issuable upon exercise of warrants
            1,317,324**14,418,561**





**Investments**


The
      Group
      had no trading securities as at December 31, 2006 or December 31, 2005. The
      gross realised gains on sales of trading securities during 2006 was US$Nil
      (2005: US$Nil). The Group had no “available for sale” or “held-to-maturity
      securities” as at December 31, 2006 or December 31, 2005.










121
 **NOTES
          TO THE CONSOLIDATED FINANCIAL STATEMENTS**
 **DECEMBER
          31, 2006**





**Fair
      Values of Financial Instruments**


The
      following methods and assumptions were used by the Group in estimating its
      fair
      value disclosures for financial instruments:





·
            Cash
                and cash equivalents, trade accounts receivable and trade accounts
                payable: The carrying amount reported in the balance sheet for cash
                and
                cash equivalents, trade accounts receivable and trade accounts payable
                approximates their fair value.


·
            Long
                and short-term
                debt: The carrying amounts of the Group’s variable interest borrowings
                approximate their fair value as these borrowings bear interest at
                market
                rates. In the case of the Group’s fixed rate debt the fair value has been
                calculated with referenceto the market rates prevailing at the
                year end.


·
            Forward
                contracts: The fair value of the Group’s forward exchange contracts is
                calculated is by reference to current forward exchange rates for
                contracts
                with similar maturity profiles and equates the market price at the
                balance
                sheet date.





The
      carrying amounts and fair values of the Group’s financial instruments at
      December 31, 2006 and 2005 are as follows:


*December
                  31, 2006*
              
              *December
                  31, 2005*Carrying
              Fair
              Carrying
              FairAmount
              Value
              Amount
              ValueUS$’000
              US$’000
              US$’000
              US$’000Cash
                  and cash equivalents
              2,821
              2,821
              9,881
              9,881Financial
                  assets - restricted cash
              15,500
              15,500
              9,000
              9,00Trade
                  accounts receivable
              28,359
              28,359
              17,591
              17,591Trade
                  accounts payable
              7,752
              7,752
              6,065
              6,065Short-term
                  debt
              12,218
              12,217
              14,922
              14,998Long-term
                  debt
              33,076
              33,073
              12,206
              12,099Forward
                  contracts
              -
              -
              64
              64








**Additional
      Unaudited Proforma Information for Acquisitions made in
      2006**


The
      information below presents the proforma effect of the acquisitions made in
      2006
      as if they had occurred on January 1, 2006 and January 1, 2005.


*December
                31*
              *2006*
            *December
                31*
              *2005**US$’000*
            *US$’000*Proforma
                revenues
            141,935
            144,247Proforma
                income before extraordinary items
            337
            6,323Proforma
                net income
            337
            6,323Proforma
                earnings
              per
                ‘A’ ordinary share (US Dollar)
            0.05
            0.11Proforma
                earnings
              per
                ‘B’ ordinary share (US Dollar)
            0.10
            0.22Proforma
                diluted earnings
              per
                ‘A’ ordinary share (US Dollar)
            0.05
            0.10Proforma
                diluted earnings
              per
                ‘B’ ordinary share (US Dollar)
            0.10
            0.20





122
 **NOTES
          TO THE CONSOLIDATED FINANCIAL STATEMENTS**
 **DECEMBER
          31, 2006**





The
      proforma information was compiled using a combination of available financial
      information or where unavailable, extrapolations of the results of the
      haemostasis line of bioMerieux and the distribution business of Nephrotek,
      both
      of which were acquired during 2006.





**Impact
      of Recently Issued US Accounting Pronouncements**


The
      following discussion considers the potential impact of recently issued US GAAP
      accounting pronouncements on the financial statements of the Group.





***Accounting
      for servicing of financial assets***


In
      March
      2006 the Financial Accounting Standards Board (the “FASB”) issued Statement of
      Financial Reporting No. 156 (“SFAS 156”). This Statement amends FASB Statement
      No. 140, *Accounting
      for Transfers and Servicing of Financial Assets and Extinguishments of
      Liabilities,* with
      respect to the accounting for separately recognized servicing assets and
      servicing liabilities, and is effective for financial periods beginning after
      September 15, 2006. The Group does not currently engage in transfers of
      financial fixed assets and accordingly does not anticipate that the adoption
      of
      this statement will have a material impact on its financial
      statements.





***Accounting
      for certain hybrid financial instruments***


I n
      February 2006, the FASB issued SFAS 155 *Accounting
      for certain hybrid financial instruments*  *-
      an
      amendment of FASB Statements No. 133 and 140.* This
      Statement amends FASB Statements No. 133, *Accounting
      for Derivative Instruments and Hedging Activities,* and No.
      140, *Accounting
      for Transfers and Servicing of Financial Assets and Extinguishments of
      Liabilities.* This
      Statement resolves issues addressed in Statement 133 Implementation Issue No.
      D1, *“Application
      of Statement 133 to Beneficial Interests in Securitized Financial
      Asset”* , and
      is
      effective for all financial instruments acquired or issued after the beginning
      of an entity’s first fiscal year that begins after September 15, 2006. The Group
      does not anticipate that the adoption of this statement will have a material
      impact on its financial statements.





***Fair
      value measurements***


In
      September 2006, the FASB issued SFAS No. 157, *Fair
      value measurements* ,
      which
      defines fair value, establishes guidelines for measuring fair value and expands
      disclosures regarding fair value measurements. SFAS No. 157 does not require
      any
      new fair value measurements but rather eliminates inconsistencies in guidance
      found in various prior accounting pronouncements. SFAS No. 157 is effective
      for
      fiscal years beginning after November 15, 2007. The Group does not anticipate
      that the adoption of this statement will have a material impact on its financial
      statements.





***Accounting
      for uncertainty in income taxes***


FASB
      interpretation No. 48 (“FIN No. 48”) *Accounting
      for uncertainty in income taxes* - an
      interpretation of FASB Statement No. 109, which prescribes a new recognition
      threshold and measurement attribute for the financial statement recognition
      and
      measurement of a tax position taken or expected to be taken in a tax return
      was
      issued in July 2006. FIN No. 48 also provides guidance on derecognition,
      classification, interest and penalties, accounting in interim periods,
      disclosure and transition. FIN No. 48 amends SFAS No. 5, *Accounting
      for Contingencies* ,
      to
      eliminate its applicability to income taxes. FIN No. 48 is effective for fiscal
      years beginning after December 15, 2006. The cumulative effect of applying
      FIN
      No. 48 will be reported as an adjustment to the opening balance of retained
      earnings (or other appropriate components of equity or net assets in the balance
      sheet) for the fiscal year beginning after December 15, 2006. The Group is
      currently evaluating the impact of FIN No. 48 but does
      not
      anticipate that the adoption of this statement will have a material impact
      on
      its financial statements.





***Consideration
      of the effects of prior year misstatements when quantifying misstatements in
      current year financial statements***


In
      September 2006, the SEC issued Staff Accounting Bulletin No. 108 (“SAB No.
      108”), *Considering
      the effects of prior year misstatements when quantifying misstatements in
      current year financial statements* ,
      which
      provides interpretive guidance on how the effects of the carryover or reversal
      of prior year misstatements should be considered in quantifying current year
      misstatement. SAB No. 108 is effective for the year ended December 31, 2006.
      The
      implementation of SAB No. 108 did not have a material effect on our consolidated
      financial position or results from operations.





123


**Schedule
        II**
 
 **TRINITY
        BIOTECH PLC**
 
 **VALUATION
        AND QUALIFYING ACCOUNTS**
 
 **Allowance
        for impairment of receivables**
 
 Balance
                  at
              Charged
                  to
              Charged
                  to
              
              Balancebeginning
              costs
                  and
              other
              
              at
                  endof
                  period
              expenses
              accounts
              Deductions
              of
                  periodUS$’000
              US$’000
              US$’000
              US$’000
              US$’000(a)
              (b)2006
              587
              896
              (100)
              (309)
              1,0742005
              462
              279
              (36)
              (118)
              5872004
              478
              180
              (143)
              (53)
              462
 
 
 (a)
              Amounts
                  recovered during the year.
 (b)
              Amounts
                  written-off during the year.
 
 
 **Valuation
                  Allowance for Income Taxes**
              Balance
                  at
              Provided
              Reductions
              Balancebeginning
              
              
              at
                  endof
                  period
              
              
              of
                  periodUS$’000
              US$’000
              US$’000
              US$’000(a)
              (b)2006
              
              316
              87
              (131)
              2722005
              
              302
              14
              -
              3162004
              
              179
              302
              (179)
              302
 
 
 (a)
              Increase
                  in valuation allowance associated with deferred tax
                  asset.
 (b)
              Reduction
                  in valuation allowance associated with deferred tax
                  asset.




124





***Signatures***





The
      registrant hereby certifies that it meets all of the requirements for filing
      on
      Form 20-F and that it has duly caused and authorised the undersigned to sign
      this annual report on its behalf.






TRINITY
                  BIOTECH PLCBy:RONAN
                  O’CAOIMHMr
                  Ronan O’CaoimhDirector/Chief
                  Executive OfficerDate:
                  May 8, 2007By:RORY
                  NEALONMr
                  Rory NealonDirector/Chief
                  Financial OfficerDate:
                  May 8, 2007


125





**Item
      19**





***Exhibits***










**Exhibit
      No.** **Description
      of Exhibit**





12.1
            Certification
                by Chief Executive Officer Pursuant to Section 302 of the Sarbanes-
                Oxley
                Act of 2002.





12.2
            Certification
                by Chief Financial Officer Pursuant to Section 302 of the Sarbanes-
                Oxley
                Act of 2002.





13.1
            Certification
                by Chief Executive Officer Pursuant to 18 U.S.C. Section 1350, As
                Adopted
                Pursuant to Section 906 of the Sarbanes-Oxley Act of
                2002.





13.2
            Certification
                by Chief Financial Officer Pursuant to 18 U.S.C. Section 1350, As
                Adopted
                Pursuant to Section 906 of the Sarbanes-Oxley Act of
                2002.








126