As filed with the Securities and Exchange Commission
  on March 22, 2001  UNITED STATES
  SECURITIES AND EXCHANGE COMMISSION   FORM 20-F




||_| | 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            

For the fiscal year ended December 31, 2000

OR

||_| | TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
        ACT OF 1934
|--- | ------------------------------------------------------------------------------------------------

Commission file number 333-6200

INTERTEK TESTING SERVICES LIMITED(Exact name of Registrant as specified in its charter)

ENGLAND(Jurisdiction of incorporation or organisation)

25 SAVILE ROW, LONDON, W1S 2ES, ENGLAND
  (011) 44-20-7396-3400(Address of principal executive office)

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

|Title of each class |  | Name of each Exchange on which registered
|------------------- |  | -----------------------------------------
|None                |  | N/A                                      

None


The Registrants Guarantees of $203 million aggregate
  principal amount of 101⁄4% Senior Subordinated Notes due 2006,

Series B issued by Intertek Finance plc (the Issuer),
  a subsidiary of the Registrant




69,172,061 Ordinary A Shares of 1p each
  11,578,635 Ordinary B Shares of 1p each
  105,478,482 Zero Coupon Redeemable Preference Shares of £1 each

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

Item 17 |_|      Item 18 |X|



---







|Table of Contents   | Page                                                                              
|------------------- | ----------------------------------------------------------------------------------
|                   
|General information | 1                                                                                 
|                    |                                                                                   
|PART I             
|Item 1:             | Identity of Directors, Senior Management and
      Advisors                       
|Item 2:             | Offer Statistics and Expected Timetable                                           
|Item 3:             | Key Information                                                                   
|Item 4:             | Information on the Company                                                        
|Item 5:             | Operating and Financial Review and Prospects                                      
|Item 6:             | Directors, Senior Management and Employees                                        
|Item 7:             | Major Shareholders and Related Party Transactions                                 
|Item 8:             | Financial Information                                                             
|Item 9:             | The Offer and Listing                                                             
|Item 10:            | Additional Information                                                            
|Item 11:            | Quantitative and Qualitative Disclosures about
      Market Risk                  
|Item 12:            | Description of Securities Other than Equity
      Securities                      
|                    |                                                                                   
|PART II            
|Item 13:            | Defaults, Dividend Arrearages and Delinquencies                                   
|Item 14:            | Material Modifications to the Rights of Security
      Holders and Use of Proceeds
|                    |                                                                                   
|PART III           
|Item 17:            | Financial Statements                                                              
|Item 18:            | Financial Statements                                                              
|Item 19:            | Exhibits                                                                          



---





#### General information

Throughout this annual report, the term Company refers to Intertek
  Testing Services Limited and the terms we, our, us,
  ITS or Group refer to Intertek Testing Services Limited
  and its consolidated subsidiaries. References to sterling and £
  are to Great British pounds and all references to dollars or $
  are to United States dollars. Our historical consolidated financial statements
  are prepared in accordance with accounting principles generally accepted in
  the United Kingdom (U.K. GAAP) and are presented in sterling. UK
  GAAP differs in certain significant respects from generally accepted accounting
  principles in the United States (U.S. GAAP). For a discussion of
  the most significant relevant differences between U.K. GAAP and U.S. GAAP, see note
  30 to our consolidated financial statements.

-1-

---





#### PART I

#### Item 1: Identity of Directors, Senior Management and Advisors

Not applicable.

#### Item 2: Offer Statistics and Expected Timetable

Not applicable.

#### Item 3: Key Information

#### Selected financial data

We set out in the following table selected financial data for Inchcape Testing
  Services (the Predecessor Company) and ITS. The income statement
  data for the period from January 1 to October 7, 1996 and the balance sheet
  data at October 7, 1996 are derived from the combined financial statements of
  the Predecessor Company. The income statement data for the period from October
  8 to December 31, 1996 and for the years ended at December 31, 1997, 1998, 1999
  and 2000 and the balance sheet data at December 31, 1996, 1997, 1998, 1999 and
  2000 are derived from the audited consolidated financial statements of ITS.
  Our acquisition from Inchcape plc was accounted for under the purchase method
  of accounting, and as a result of the acquisition, financial data relating to
  the Predecessor Company generally will not be comparable to that of ITS with
  respect to interest expense, amortisation of debt issuance costs incurred in
  connection with the acquisition and income from other Inchcape plc companies.

In order to provide a meaningful five year history, the table includes income
  data for the year ended December 31, 1996 (Supplemental Period 1996).
  This data is derived from information reported for the Predecessor Company for
  the period from January 1 to October 7, 1996 and from information reported by
  the Group for the period from October 8 to December 31, 1996, adjusted for the
  acquisition and post acquisition financing and to reflect the accounting policies
  adopted by the Group. In addition, the results have been retranslated to reflect
  the cumulative average exchange rates for the year ended December 31, 1996.

The selected financial data is prepared in accordance with U.K. GAAP, which differs
  in certain significant respects from U.S. GAAP as described in note 30 to our
  Consolidated Financial Statements. This table should be read in conjunction
  with our Consolidated Financial Statements and the discussion under Operating
  and Financial Review and Prospects included elsewhere in this Annual Report.

-2-

---





Selected Financial Data (continued)

|Amounts in £m                                                                                    | Predecessor
        Company                                      |    | ITS                                                                |      
|------------------------------------------------------------------------------------------------ | ---------------------------------------------------------------- | -- | ------------------------------------------------------------------ | -----
|                                                                                                 |                                                                  |   
|                                                                                                 | Period from
        January 1 to
        October 7,
        1996 |    | Period from
        October 8 to
        December
        31, 1996 |      
|                                                                                                 |                                                                  |   
|Income Statement data                                                                            |                                                                 
|                                                                                                
|Amounts in conformity with U.K. GAAP:                                                            |                                                                 
|                                                                                                
|Revenues                                                                                         |                                                                  |    |                                                                    |      
|Continuing operations                                                                            |                                                                  |    |                                                                    | 211.9
|Discontinued operations                                                                          |                                                                  |    |                                                                    | 31.7 
|                                                                                                 |                                                                  |   
|Total                                                                                            |                                                                  |    |                                                                    | 243.6
|                                                                                                 |                                                                  |   
|                                                                                                
|Operating income/(loss)
      before exceptional items                                          
|Continuing operations                                                                            |                                                                  |    |                                                                    | 22.5 
|Discontinued operations                                                                          |                                                                  |    |                                                                    | 2.0  
|                                                                                                 |                                                                  |   
|Total                                                                                            |                                                                  |    |                                                                    | 24.5 
|                                                                                                 |                                                                  |   
|                                                                                                
|Operating income/(loss)
      after operating exceptional items                                 
|Continuing operations                                                                            |                                                                  |    |                                                                    | 19.7 
|Discontinued operations                                                                          |                                                                  |    |                                                                    | 2.0  
|                                                                                                 |                                                                  |   
|Total                                                                                            |                                                                  |    |                                                                    | 21.7 
|                                                                                                 |                                                                  |   
|                                                                                                
|Net interest expense                                                                             |                                                                  |    |                                                                    | (3.2 
|Income/(loss) before taxation                                                                    |                                                                  |    |                                                                    | 23.9 
|Net income/(loss)                                                                                |                                                                  |    |                                                                    | 11.6 
|                                                                                                
|Amounts in conformity with U.S. GAAP:                                                           
|                                                                                                
|Operating income/(loss)                                                                          |                                                                  | b) |                                                                    | 20.6 
|Income/(loss) from continuing
         operations before taxation
         and minority interest |                                                                  | b) |                                                                    | 22.8 
|Net income/(loss)                                                                                |                                                                  | b) |                                                                    | 2.9  



|a) | Information is not available for the Supplemental
      Period 1996.
|-- | --------------------------------------------------------------------



|b) | Continuing and discontinuing operations have been
      reported as a combined total because separate information for discontinued
      operations is not available for the October 31, 1996 and December 31, 1996
      periods.
|-- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

-3-

---





Selected Financial Data (continued)

|Amounts in £m                               | Predecessor
        Company |  | ITS                       |    
|------------------------------------------- | --------------------------- |  | ------------------------- | ---
|                                            |                             | 
|                                            | October 7,
        1996     |  | December
        31, 1996 |    
|                                            |                             | 
|Balance Sheet data                          |                            
|                                           
|Amounts in conformity with U.K. GAAP:       |                            
|                                           
|Cash                                        |                             |  |                           | n/a
|Total assets                                |                             |  |                           | n/a
|Total debt                                  |                             |  |                           | n/a
|Shareholders deficit                       |                             |  |                           | n/a
|                                           
|Amounts in conformity
      with U.S. GAAP:
|                                           
|Cash                                        |                             |  |                           | n/a
|Total assets                                |                             |  |                           | n/a
|Total debt                                  |                             |  |                           | n/a
|Shareholders equity/(deficit)              |                             |  |                           | n/a



|a) | Information is not available for the Supplemental
      Period 1996.
|-- | --------------------------------------------------------------------



|b) | Continuing and discontinuing operations have been
      reported as a combined total because separate information for discontinued
      operations is not available as at October 31, 1996 and December 31, 1996.
|-- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

-4-

---





Selected Financial Data (continued)

|Amounts in £m                                               | Predecessor
        Company                                      |    | ITS                                                                |      
|----------------------------------------------------------- | ---------------------------------------------------------------- | -- | ------------------------------------------------------------------ | -----
|                                                            |                                                                  |   
|                                                            | Period from
        January 1 to
        October 7,
        1996 |    | Period from
        October 8 to
        December
        31, 1996 |      
|                                                            |                                                                  |   
|Other Financial Data                                        |                                                                 
|                                                           
|Amounts derived from U.K. GAAP financial
      information: |                                                                 
|                                                           
|Cash inflow from
         operating activities              |                                                                  |    |                                                                    | 28.3 
|Returns on investments
         and servicing of finance    |                                                                  |    |                                                                    | 1.3  
|Taxation                                                    |                                                                  |    |                                                                    | (8.2 
|                                                           
|Capital expenditure and
         financial investment       |                                                                  |    |                                                                    | (12.3
|Acquisitions and disposals                                  |                                                                  |    |                                                                    | 6.7  
|                                                           
|Equity dividends paid                                       |                                                                  |    |                                                                    | (28.3
|                                                           
|Cash (outflow)/inflow
         before financing             |                                                                  |    |                                                                    | (12.5
|Financing                                                   |                                                                  |    |                                                                    | 3.2  
|                                                           
|(Decrease)/increase in
         cash in the period          |                                                                  |    |                                                                    | (9.3 
|                                                           
|Amounts derived from U.S. GAAP financial
      information:
|                                                           
|Depreciation and
         amortisation                      |                                                                  | b) |                                                                    | 12.2 
|                                                           
|Capital expenditure                                         |                                                                  | b) |                                                                    | 12.4 
|                                                           
|Net cash provided by
         operating activities          |                                                                  | b) |                                                                    | 16.7 
|Net cash used in
         investing activities              |                                                                  | b) |                                                                    | (5.6 
|Net cash (used in)/
         provided by financing          |                                                                  | b) |                                                                    | (20.3



|a) | Information is not available for the Supplemental
      Period 1996.
|-- | --------------------------------------------------------------------



|b) | Continuing and discontinuing operations have been
      reported as a combined total because separate information for discontinued
      operations is not available for the October 31, 1996 and December 31, 1996
      periods.
|-- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

-5-

---





#### Exchange rates

On March 12, 2001, the dollar noon buying rate in New York City for cable transfers
  in pounds sterling as certified for customs purposes by the Federal Reserve
  Bank of New York (the Noon Buying Rate) was 1.47.

The following table sets out, for the periods indicated, the period average
  rate calculated from the average of the Noon Buying Rate on the last business
  day of each full month during the period and where the period is less than one
  full month, the last day of the period.

|Year ended December 31, |  | Period Average
|----------------------- |  | --------------
|                        | 
|                       
|1996                    |  | 1.56          
|1997                    |  | 1.64          
|1998                    |  | 1.66          
|1999                    |  | 1.61          
|2000                    |  | 1.51          

The following table sets out, for the periods indicated, the high and low exchange
  rates during the previous six months.

|               |  | High |  | Low 
|-------------- |  | ---- |  | ----
|               |  |      | 
|              
|September 2000 |  | 1.48 |  | 1.40
|October 2000   |  | 1.48 |  | 1.42
|November 2000  |  | 1.46 |  | 1.40
|December 2000  |  | 1.50 |  | 1.42
|January 2001   |  | 1.51 |  | 1.45
|February 2001  |  | 1.48 |  | 1.43

#### Capitalization and indebtedness

Not applicable.

#### Reasons for the offer and use of proceeds

Not applicable.

#### Risk Factors

Significant leverage and ability to service debt could affect our ability
  to grow and service our debt obligations

We are highly leveraged. At December 31, 2000 we had £330.9 million in
  total borrowings on a consolidated basis and £112.7 million of shareholdersequity.
  We may incur additional indebtedness in the future, subject to certain limitations
  in the instruments governing the Companys and its subsidiaries indebtedness.
  The degree to which we are leveraged could have important consequences for holders
  of our debt and our subsidiariesdebt, as well as for our operations and
  financial position, including (i) our ability to obtain additional financing
  for working capital, capital expenditures, acquisitions or general corporate
  purposes may be limited, (ii) we must dedicate a substantial portion of our
  cash flow to the payment of interest on our indebtedness, reducing the funds
  available to us for other purposes; (iii) some of our indebtedness bears interest
  at floating rates, which may make ITS vulnerable to increases in interest rates;
  (iv) certain loans incurred in connection with our acquisition are secured and
  rank in priority to holders of the 10.25% Senior Subordinated Notes Due 2006
  (the Notes) issued by our subsidiary, Intertek Finance plc, and
  will come due prior to the Notes becoming due; (v) our indebtedness imposes
  numerous financial and other restrictive covenants that limit our ability to,
  among other things, borrow additional funds, dispose of assets or pay cash dividends
  and the failure to comply with such restrictions may result in an event of default
  which, if not cured

-6-

---





or waived, could have a material adverse effect on our business, and (vi) our
  substantial leverage may hinder our ability to adjust rapidly to changing market
  conditions and could make us more vulnerable in the event of a downturn in general
  economic conditions or our business.

Our ability to make scheduled payments of the principal of, or to pay interest
  on, or to refinance our indebtedness and to make scheduled payments under our
  operating and capitalised leases depends on our future performance, which to
  a certain extent is subject to economic, financial, competitive and other factors
  beyond our control. Based upon the current level of operations and anticipated
  growth, management believes that available cash, together with available borrowings
  under our credit agreements and other sources of liquidity, will be adequate
  to meet our anticipated requirements for working capital, capital expenditures,
  research and development expenses, interest payments and scheduled principal
  payments. We can offer no assurance, however, that our business will continue
  to generate sufficient cash flow from operations in the future to pay principal
  and interest on indebtedness. If unable to do so, we will be unable to repay
  our existing debt and may be required to refinance all or a portion thereof
  (including the Notes), to sell assets or to obtain additional financing. We
  can offer no assurance that any such refinancing would be possible or that any
  such sales of assets or additional financing could be achieved.

#### The right of payment of holders of the Notes is subordinate to senior indebtedness

The Notes issued by our subsidiary, Intertek Finance, are subordinated in right
  of payment to all existing and future senior indebtedness of Intertek Finance.
  The Notes are guaranteed on a senior subordinated basis by the Company and certain
  of its other subsidiaries. The guarantees of the Notes are subordinated in right
  of payment to all existing and future senior indebtedness of the guarantors.
  As of December 31, 2000, the Company and the other guarantors of the Notes have
  £323.9 million of senior indebtedness outstanding. The Notes and the guarantees
  will rank at least pari passu with all present and future subordinated indebtedness
  of Intertek Finance and the guarantors of the Notes.

#### Adverse consequences of our company structure

The Company, Intertek Finance and the guarantors of the Notes have no operations
  of their own. As a result, they are wholly dependent on the earnings of the
  operating companies that are their subsidiaries. Generally, claims of creditors
  of a subsidiary, including trade creditors, secured creditors and creditors
  holding indebtedness and guarantees issued by such subsidiary, and claims of
  preferred stockholders (if any) of such subsidiary, will have priority with
  respect to the assets and earnings of such subsidiary over the claims of the
  creditors of its parent company, except to the extent the claims of creditors
  of the parent company are guaranteed by such subsidiary. The Notes therefore
  are effectively subordinated to creditors (including trade creditors) and preferred
  stockholders (if any) of the direct and indirect subsidiaries of the Company,
  Intertek Finance and each other guarantor of the Notes. As of December 31, 2000,
  the total liabilities, including provisions for liabilities and charges of all
  of the operating subsidiaries was £101.3 million. Although there are restrictions
  on us that limit the incurrence of indebtedness and preferred stock of certain
  subsidiaries, such limitations are subject to a number of significant qualifications.
  Moreover, our subsidiaries may incur liabilities that are not considered indebtedness
  or preferred stock. In addition, the ability of certain subsidiaries of ITS
  and the other guarantors of the Notes to pay dividends may be restricted by,
  among other things, applicable corporate and other laws and regulations and
  by the terms of agreements to which such subsidiaries become subject. Although
  there are limits on the ability of such subsidiaries to enter into consensual
  restrictions on their ability to pay dividends and make other payments, such
  limitations are subject to a number of significant qualifications.

#### Restrictive covenants in loan agreements and our shareholders agreement
  could hinder our ability to grow and service our debt

The indenture for the Notes, the Subscription and Shareholders Agreement
  among the Company and the holders of certain classes of its shares (the Shareholders
  Agreement), and ITS loan agreements impose operating and financial
  restrictions that restrict, among other things, the ability of the Company,
  Intertek Finance and the other guarantors of the Notes (i) to incur additional
  indebtedness; (ii) to incur liens; (iii) to pay dividends or make certain other
  restricted payments; (iv) to enter into certain transactions with affiliates;
  (v) to incur indebtedness that is subordinate in right of payment to senior
  indebtedness but senior in right of payment to the Notes; (vi) to impose restrictions
  on the ability of a subsidiary to pay dividends or make certain payments to
  Intertek Finance, the Company or other guarantors of the Notes; (vii) to merge
  or consolidate with other persons; or (viii) to sell, assign, transfer, lease,
  convey or otherwise dispose of all or substantially all of the assets of Intertek
  Finance or a guarantor of the Notes.

-7-

---





In addition, other agreements, including the credit agreement entered into
  by the Company in November 1996, as amended (the Credit Agreement),
  prevent the prepayment of certain indebtedness (including the Notes) and require
  that the Company maintain certain financial ratios and meet certain financial
  condition tests. The Companys ability to meet those financial ratios and
  tests can be affected by events beyond its control, and we can offer no assurance
  that the Company will meet these tests. A breach of any of these covenants could
  result in default under these agreements, and under other agreements containing
  cross default provisions, which would permit lenders to declare outstanding
  amounts, together with interest, to be immediately due and payable. If Intertek
  Finance, the Company and the other guarantors of the Notes were unable to pay
  those amounts, the lenders could proceed against the collateral securing that
  indebtedness, which collateral includes the capital stock of the guarantors
  of the Notes. If the amounts outstanding under certain credit agreements were
  to be accelerated, holders of the Notes could also accelerate the payment thereof.
  If some or all of the indebtedness of Intertek Finance or its affiliates was
  to be accelerated, we can offer no assurance that the assets of the Company,
  Intertek Finance and the other guarantors of the Notes would be sufficient to
  repay that indebtedness in full, including the Notes.

#### Certain insolvency laws and other considerations

Each of Intertek Finance, Intertek Testing Services UK Limited (UKCo),
  which is one of the guarantors of the Notes, and ITS are limited companies organized
  under the laws of England. Accordingly, insolvency proceedings with respect
  to either Intertek Finance, UKCo or ITS are likely to proceed under, and be
  governed by UK insolvency laws.

The procedural and substantive provisions of UK insolvency and administrative
  laws generally are more favorable to secured creditors than comparable provisions
  of the US law and afford other creditors only limited protection from such secured
  creditors. Although the Notes are secured by a second priority lien on certain
  intercompany notes, the lenders under the Credit Agreement have a first priority
  lien on the notes evidencing the intercompany loans, and the capital stock of
  certain of the Companys subsidiaries have been pledged to secure the loans.
  Under the terms of an intercreditor deed entered into in connection with the
  offering of the Notes, after the occurrence of an insolvency event, the security
  trustee under the Credit Agreement shall have the right to direct the disposition
  of any collateral. In connection with a sale of the capital stock of a subsidiary
  guarantor pursuant to an enforcement of security, the applicable subsidiary
  guarantee and second lien on an Intercompany Note will be released. In addition,
  under UK insolvency law, the liabilities of Intertek Finance, UKCo and the Company
  in respect of the Notes and the guarantees, respectively, will be paid in the
  event of a bankruptcy or similar proceeding after certain debts of Intertek
  Finance, UKCo or the Company, as the case may be, which are entitled to priority
  under UK law. Such debts may include (i) amounts owed to the UK Inland Revenue,
  (ii) amounts owed to UK Customs and Excise, (iii) amounts owed in respect of
  UK Social Security contributions, (iv) amounts owed in respect of occupational
  pension schemes and (v) amounts owed to employees.

#### Litigation can arise from our normal operations

If we perform a test, inspection or certification inaccurately or improperly
  then a commercial dispute or litigation may arise for damages. Although we have
  a well established quality assurance programme to mitigate such occurrence,
  from time to time we are involved in various claims and lawsuits incidental
  to the ordinary course of our business. We maintain a professional indemnity
  insurance policy that provides coverage, appropriate to our operations, for
  most customer claims arising from errors or omissions in work undertaken, although
  claims up to the deductible are self-financed.

In particular, as is set forth in greater detail under Item 8 below, two of
  our subsidiary corporations are currently involved in investigations by the
  US Environmental Protection Agency (EPA).

We are unable to predict the outcome of these actions. However, on the basis
  of currently available information, we consider that the costs to ITS of any
  civil and criminal penalties arising from this investigation that may be legally
  enforceable are unlikely to have a material adverse effect on the financial
  position of ITS in the foreseeable future, although we are not able to quantify
  the cost of any adverse publicity. We have notified Inchcape plc of the investigation
  and are pursuing possible rights of recovery against Inchcape plc under the
  agreement pursuant to which Inchcape plc sold our business to us. Our group
  professional indemnity insurance policy may respond at least in part, to legal
  costs, civil damages and third party claims.

-8-

---





#### Environmental regulations may affect our business

We are subject to worldwide laws and regulations and ordinances that govern
  activities or operations that may have adverse environmental effects, such as
  discharges to air and water, as well as handling and disposal of solid and hazardous
  wastes. In many jurisdictions these laws are complex, change frequently, and
  have tended to become more stringent over time. There can be no assurance that
  violations of such laws have not occurred or will not occur or be identified
  or that such laws will not change in the future in a manner that could materially
  and adversely affect our business. Such laws and regulations also may impose
  obligations to investigate and remediate or pay for the investigation and remediation
  of environmental conditions, and compensate public and private parties for related
  damages. In jurisdictions such as the United States, such obligations, including
  but not limited to those under the Comprehensive Environmental Response, Compensation
  and Liability Act, may be joint and several and may apply to conditions at properties
  presently or formerly owned or operated by an entity or its predecessors, as
  well as to conditions at properties at which wastes or other contamination attributable
  to an entity or its predecessors have been sent or otherwise come to be located.
  We can give no assurance that we will not incur such liability in connection
  with facilities we currently own or operate or other locations, in a manner
  that could materially adversely affect our business and financial position.
  We are aware of contamination at the following two properties which we presently
  own:

Cortland, New York, U.S.A., is a major ETL SEMKO operating location with a
  significant heating, ventilation and air conditioning testing capacity. Site
  contamination was discovered and clean up efforts were started several years
  ago. These clean up operations cost $50,000 in 2000, and we estimate ongoing
  clean up operation costs of about $50,000 to $100,000 per annum for 10 years.
  There is a risk that the regulators may require more expensive remedial work.

In April 1998, we decided to move our existing Caleb Brett operations in Antwerp
  to a newly acquired site following an acquisition in Belgium. After vacating
  our original site, we became aware of soil contamination under the building.
  We estimate that clean up operations will last for about one year and will cost
  approximately £90,000. The clean up plan was approved by the Belgian authorities
  and the clean up operation has commenced.

In connection with our acquisition from Inchcape plc on November 6, 1996, we
  obtained rights to indemnification from Inchcape plc in certain circumstances
  for breaches of Inchcape plcs environmental representations and warranties
  in the related acquisition agreement. Those rights to recover for breach of
  warranty are subject to limitations, however, including the necessity that amounts
  sought from Inchcape plc exceed £250,000, and the requirement that we give
  notice to Inchcape plc prior to the fifth anniversary of the closing of the
  acquisition, depending on the issue involved. We have notified Inchcape plc
  of the contamination at both of the above sites but we can give no assurance
  that this or any other material environmental liability will be covered by such
  indemnification rights.

#### ITS principal shareholder may have interests different to those holders
  of the Notes

As of December 31, 2000, approximately 45.18% of the outstanding Ordinary A
  and B shares of the Company were held by funds managed by Charterhouse, and
  ITS owns all of Intertek Finances voting stock. As of December 31, 2000,
  approximately 55.78% of the outstanding redeemable preference shares of the
  Company were held by funds managed by Charterhouse. Circumstances may give rise
  to perceived or actual conflicts of interests between Charterhouse as shareholder
  and the Note holders.

#### Our revenues are dependent on economic and political conditions

Each of our divisions service a different market, and the revenues of each
  division are dependent upon the condition of the market it services. In particular,
  the revenues of Labtest and ETL SEMKO are dependent on the market for manufactured
  goods, and the revenues of Caleb Brett are dependent upon the petroleum and
  petrochemical market. Our FTS division works for governments in developing countries
  where there can be longer payment cycles for accounts receivable and contracts
  can be terminated at short notice at the sole discretion of the government.
  We believe the diversified nature of our operations can reduce the effect of
  various market shocks. However, we can offer no assurance that future changes
  in underlying markets, or at ITS, the inherent instability within our markets,
  will not adversely affect our revenues. In addition, our subsidiaries are located
  throughout the world, and we are subject to certain risks inherent in doing
  business in international markets, including political instability and change,
  variations in effective income tax rates, difficulties in collecting accounts
  receivable, longer payment cycles and withholding taxes that limit the repatriation
  of earnings. One or more of these factors could have an adverse effect on our
  international operations.

-9-

---





For instance, in January 1999, the Nigerian government unexpectedly announced
  that its pre-shipment inspection programmes would cease in March 1999. This
  had a negative effect on our revenues and operating income in 1999. In September
  1999, the new government in Nigeria re-introduced inspection programmes but
  awarded us a smaller part of the contract. The new programme has started slowly.
  Pre-shipment inspection programmes in Colombia and Ghana also ceased in 2000.

#### Fluctuations in foreign currency exchange rates may have a material impact
  on our results of operations and financial position

Over 80% of our revenues are generated by operations outside the United Kingdom
  and therefore fluctuations in exchange rates between the currencies in which
  these revenues are denominated and sterling may have a material impact on our
  results of operations and financial condition. Over 50% of our revenues and
  the majority of our borrowings, interest payments and debt repayments are denominated
  in US dollars or currencies linked to the US dollar, such as the Hong Kong dollar.
  Where there is material transaction exposure from currency rate movements we
  take out forward foreign exchange contracts to minimise this exposure.

#### Changes in regulations can adversely affect our revenues

One of the activities of our ETL SEMKO division is the testing of products
  to determine if such products meet legally required standards established in
  North America, individual European country standards and/or standards established
  by European Union directives and then issuing safety marks certifying the products
  compliance with the relevant standard. Our revenues could be adversely affected
  if government authorities adopt uniform safety standards or eliminate various
  safety requirements. In addition, the European Union currently allows manufacturers
  to self-certify their products under the CE safety mark. Although many manufacturers
  continue to rely on outside testing agencies such as ITS for certification rather
  than self-certifying, we can give no guarantee that companies will not self-certify
  their products in the future. Furthermore, to the extent other government authorities
  permit manufacturers to self certify their products, demand for our services
  could decline.

#### Forward-looking statements

The following statement is made pursuant to the safe harbour provisions for
  forward-looking statements described in the Private Securities Litigation Reform
  Act of 1995. Some of the information in this annual report on Form 20-F contains
  forward-looking statements that involve substantial risks and uncertainties.
  You can identify these statements by forward-looking words such as expect,
  anticipate, believe, seek, estimate
  and similar words. Statements that we make that are not statements of historical
  fact also may be forward-looking statements. Forward-looking statements are
  not guarantees of our future performance, and involve risks, uncertainties and
  assumptions that may cause our actual results to differ materially from the
  expectations we describe in our forward-looking statements. There may be events
  in the future that we are not accurately able to predict, or over which we have
  no control. You should not place undue reliance on forward-looking statements.
  We do not promise to notify you if we learn that our assumptions or projections
  are wrong for any reason. We disclaim any obligation to update our forward-looking
  statements.

-10-

---





#### Item 4: Information on the Company

#### History and development of the company

Both our legal and our commercial name is Intertek Testing Services Limited.
  We are a private company limited by shares, originally incorporated under the
  English Companies Act 1985 on July 19, 1996. We are a holding company and our
  business is conducted by 148 subsidiaries in 94 countries. Prior to November
  1996, our business operated as a division of Inchcape plc called Inchcape Testing
  Services. In November 1996, a management buyout led by Charterhouse Development
  Capital Limited purchased Inchcape Testing Services from Inchcape plc, forming
  the Intertek Testing Services group (ITS). Our global business is
  the testing, inspection and certification of manufactured goods and commodities
  to customers throughout the world. Our registered office is located at 25 Savile
  Row, London, W1S 2ES and the telephone number at that location is (44) 20 7396
  3400. Our agent for service of process in connection with our Senior Subordinated
  Notes is CT Corporation System, 111 Eighth Avenue, New York, New York 10011.

In 1998, we sold our Environmental Testing division as the returns from this
  division were unsatisfactory.

Despite extensive restructuring in 1999, our minerals testing division, Bondar
  Clegg, continued to generate operating losses and we considered that the outlook
  for minerals testing was poor, so we decided to exit this market. In the first
  quarter of 2000, we sold the businesses that comprised this division.

Our total capital expenditures for 1998, 1999 and 2000 were £14.1 million,
  £17.7 million and £26.4 million respectively. These expenditures were
  primarily for laboratory equipment, improvements to laboratories and for computer
  equipment. In 2000, we spent £3.6 million establishing a new Caleb Brett
  testing facility in the United Kingdom and £2.2 million on two electrical
  testing chambers in the United States. Principal capital expenditures currently
  in progress consist of approximately £1.0 million for setting up new laboratories
  in China and France and £2.1 million for a major upgrade to computer equipment
  in the United States. Our expenditure on the acquisition of new businesses in
  1998, 1999 and 2000 was £11.3 million, £8.5 million and £ 2.0
  million, respectively. The acquisitions were principally in our Caleb Brett
  and ETL SEMKO divisions and acquisitions were made in order to extend our geographical
  coverage and enhance our market position and strategic strengths.

#### Business overview

We are a leading international organisation engaged in the testing, inspection
  and certification of manufactured goods and commodities. We are organised into
  four operating divisions, each focusing on the testing, inspection and certification
  of different manufactured goods and commodities. Our customer base is diverse
  and different in each division and includes retailers, distributors, manufacturers,
  petroleum companies, traders and governments. The majority of our work is on
  a job by job basis except for the FTS division where over 90% of revenues are
  from term contracts. Apart from our government clients in the FTS division,
  no individual customer contributes more than 2% to the groups revenues.
  We currently employ over 9,500 people and operate 479 inspection offices and
  243 testing laboratories in 94 countries.

We believe that the growth of the Internet offers significant opportunities
  to expand our business. Increasingly, our customers are demanding closer integration
  between their systems and ours. We are actively improving our information technology
  systems to answer these demands. A new ordering, inquiry and reporting system
  is now online in the Caleb Brett division (myCalebBrett.com). Similar
  systems will be available in all our divisions in the near future. Other Internet
  based IT initiatives are also underway which will allow our divisions to provide
  better and more tailored services to our customers. This is in keeping with
  our commitment to put customers first.

An increasing number of commodities and products are being traded via the Internet,
  mainly on business-to-business but also business-to-consumer sites. We provide
  testing, inspection and certification services for many of the commodities and
  products traded, ensuring that customers are able to buy products over the Internet
  reliably and with confidence. We are working actively with sites to ensure we
  are integrated into their online buying and trading processes. Our goal is to
  be the service partner of choice in online inspection and testing. Our aim is
  to ensure that we have a market share in each e-business area equal to or greater
  than our market share in traditional business areas.

-11-

---





The following is a summary of revenues by division.

|Revenues by division    | 1998
      £m |  | 1999
      £m |  | 2000
      £m
|----------------------- | ------------- |  | ------------- |  | -------------
|                        |              
|Caleb Brett             | 123.0         |  | 137.2         |  | 157.5        
|ETL SEMKO               | 84.9          |  | 88.2          |  | 99.5         
|Labtest                 | 64.6          |  | 78.3          |  | 94.0         
|Foreign Trade Standards | 65.3          |  | 47.5          |  | 47.4         
|                        |              
|Continuing operations   | 337.8         |  | 351.2         |  | 398.4        
|Discontinued operations | 22.0          |  | 11.3          |  | 0.7          
|                        |              
|Total                   | 359.8         |  | 362.5         |  | 399.1        
|                        |              

Revenues were attributable to subsidiaries operating in the following geographic
  areas.

|Revenues by geographic area    | 1998
      £m |  | 1999
      £m |  | 2000
      £m
|------------------------------ | ------------- |  | ------------- |  | -------------
|                               |              
|Americas                       | 137.0         |  | 143.3         |  | 163.5        
|Europe, Africa and Middle East | 126.5         |  | 117.7         |  | 120.4        
|Asia and Far East              | 74.3          |  | 90.2          |  | 114.5        
|                               |              
|Continuing operations          | 337.8         |  | 351.2         |  | 398.4        
|Discontinued operations        | 22.0          |  | 11.3          |  | 0.7          
|                               |              
|Total                          | 359.8         |  | 362.5         |  | 399.1        
|                               |              

A detailed discussion of our results is given in the Operating and Financial
  Review and Prospects, elsewhere in Item 5 of this Annual Report.

An overview of each operating division is given below.

#### Caleb Brett

Caleb Brett was founded in 1885 and is a joint leader in the market for testing
  and inspecting crude oil, petroleum products and chemicals. We believe that
  Caleb Brett has strong name recognition coupled with an international reputation
  for reliability and confidentiality. Caleb Bretts primary business is
  providing independent verification of the quality and quantity of crude oil,
  petroleum products and chemicals and, to a lesser extent, agricultural produce.

#### Business overview

Petroleum and chemical companies and traders require independent testing services
  to verify the quality and quantity of petroleum and chemical cargoes at the
  point of shipment. We believe that the market has benefited from increasingly
  complex and rigorous environmental regulation in North America and Europe, which
  has required increased testing. Also, multinational oil companies and petroleum
  traders are increasingly outsourcing their testing activities to companies such
  as Caleb Brett. Caleb Brett issues certificates that are internationally recognised
  as evidence of the quality and quantity of commodity shipments. Caleb Bretts
  activities in petroleum and chemical testing are divided into three sub-divisions:
  Inspection, Inspection Related Testing and Free Standing Testing.

Inspection of cargoes involves the physical checking, sampling
  and measuring of the quantity of a commodity at points of loading and unloading,
  such as seaports, storage tanker terminals and the ends of transportation pipelines.

Inspection Related Testing is laboratory testing of samples taken
  to assess their composition and whether they comply with specifications demanded
  by customers or by legislation.

-12-

---





Free Standing Testing involves the analysis of samples unrelated
  to cargo shipments, including situations where an oil or chemical company or
  trader outsources its laboratory testing work to Caleb Brett.

Caleb Brett also performs marine surveying and agricultural inspection. Marine
  surveying is the evaluation of cargo damage, primarily for insurance purposes.
  Agricultural inspection and testing is the physical sampling, quantification,
  inspection and testing of commodities, such as vegetable oils and cotton.

#### Geographic coverage

Caleb Brett has 330 offices and 174 laboratories worldwide. Head offices are
  located in Singapore for Caleb Brett Asia, the United Kingdom for Caleb Brett
  Europe Africa Middle East, and the United States for Caleb Brett Americas.

#### Customers

Caleb Bretts customers include oil and chemical companies and traders
  with whom we have well established long-term relationships. The majority of
  our oil company customers purchase services from Caleb Brett on a job-by-job,
  port-by-port basis. Caleb Brett does not have any customers which represent
  more than 5% of its revenues.

#### Sales and marketing

We believe that Caleb Brett has been able to increase its market share through
  its extensive network of facilities, its well equipped, quality-controlled and
  technically proficient laboratories, its reputation for service and its international
  co-ordination which leads to close contact with customers. Marketing is carried
  out on a global, regional and local level. The Internet is starting to become
  an important route to market.

#### Competition

Multinational oil companies typically split inspection and testing contracts
  between two or more suppliers to sustain competition. Based on our knowledge
  of the market for testing and inspecting crude oil, petroleum products and chemicals,
  we believe that Caleb Brett and Societe Generale de Surveillance are regarded
  as market leaders in this industry, together sharing over 50% of the market
  in 1999. Other global competitors include Inspectorate and Saybolt which each
  hold approximately 10% of the market. We believe that competition in this market
  will continue to be relatively stable as a result of high start-up and fixed
  costs, as well as the importance of brand name recognition.

#### Operations

All of Caleb Bretts offices include staff capable of performing relevant
  sampling, testing and inspection operations. Field inspectors attend and superintend
  vessels during loading or discharge, sample the cargo and measure the cargo
  quantity. Laboratory technicians test samples. Caleb Brett uses sophisticated
  information systems to allow it to maximise reporting accuracy, minimise operating
  costs and turnaround times and offer the highest level of service to its customers.

#### Growth strategy

We believe that the market for traditional inspection related testing is mature
  in Europe and the United States, and we anticipate low growth in these regions.
  As a result of consolidation in the oil industry, there has been an increasing
  number of intercompany movements, which tend not to attract third party inspections.
  This decline has been offset by increasing business in Asia and Latin America
  where markets are developing and the state oil companies have privatised parts
  of their business. We intend to concentrate on maintaining our market share
  in Europe and the United States and expanding in developing countries, making
  acquisitions as appropriate. Free standing testing is the fastest growing sector
  within Caleb Brett, and we intend to continue investing in our petroleum and
  petrochemical laboratories. In addition, we plan to increase further our level
  of customer service through improved responsiveness combined with fast and accurate
  turnaround. This strategy is supported by tailored information technology solutions,
  for example a new ordering, inquiry, and reporting system called myCalebBrett.com
  which came online in 2000. Following the success of our outsourcing agreement
  with BP in the United Kingdom in 2000, a number of multinational oil companies
  and petroleum traders have expressed an interest in outsourcing their laboratories
  to Caleb Brett. We believe outsourcing will be a key growth area in 2001 and
  beyond. Caleb Brett made four small acquisitions in 2000 that expanded our range
  of services and geographic

-13-

---





spread. In 2000, we sold a small loss adjusting business in Chile and a small
  loss making business in Thailand in which we had a 49% interest, ceased operating.

#### Personnel

Caleb Brett employs over 4,500 people in 57 countries. Less than 10% of employees
  are members of various unions around the world, with the majority being in continental
  Europe.

#### ETL SEMKO

ETL SEMKO tests and certifies electrical and electronic products, telecommunication
  equipment, building products and heating, ventilation and air conditioning equipment.
  ETL SEMKO also certifies the quality of management systems to standards such
  as ISO 9000 in North and South America and Europe. ETL is a long established
  brand name which traces its origins back to Thomas Edison in the United States.
  SEMKO is the name of the former state owned certification body in Sweden that
  we acquired in 1994. Prior to January 1999, ETL SEMKO was known as Conformity
  Assessment and prior to January 1998, this business was part of our Quality
  Systems division.

#### Business overview

ETL SEMKOs activities are divided into the following three subdivisions:
  Conformity Assessment, Performance and Quality Management Systems.

Conformity Assessment primarily involves the testing of electronic,
  electrical and building products and telecommunications equipment to allow manufacturers
  to mark their products with nationally or regionally recognised safety marks
  and to have their products certified as complying with a number of nationally
  recognised performance standards. These services facilitate the sale of products
  to markets in any country around the world.

Safety marks owned and issued by ETL SEMKO include ETL (United
  States), cETL (Canada), S (Sweden) and WH
  (United States and Canada). ETL SEMKO is also authorised to apply the GS
  mark (Germany) and the NOM mark (Mexico). ETL SEMKO has Notified
  Body Status in the European Union and also has electro-magnetic compatibility,
  telephone and other accreditations required for products it tests and certifies.
  These safety marks and certifications are widely relied upon by manufacturers,
  retailers and consumers to ensure that products conform to the applicable standards.
  In some countries and for some products, the safety marks and certifications
  are a legal requirement. Even when not required by governmental regulation,
  many manufacturers continue to use our safety marks and testing and certification
  services to ensure product quality. For example, the S mark, which
  has not been mandatory in Sweden since 1990, continues to be widely used throughout
  that country as evidence that a product has met the applicable safety standards.

Performancetesting is demanded by industry associations to guard
  against products that might damage consumer confidence in a particular industry.
  For example, we have been nominated by the Air Conditioning and Refrigeration
  Institute and the Gas Appliance Manufacturers Association in the United States
  to verify the accuracy of information provided in the yellow Energy Guide
  labels found on many appliances. We also test individual manufacturers
  products to provide independent competitive performance data, which can then
  be used for marketing.

Quality Management Systems activities involve the certification
  of the business processes and services of an organisation to ISO 9000. Certification
  involves a company defining and documenting its business processes and standards
  of service. Companies receiving certifications are subject to regular audits
  over time as a condition of continuing certification. ETL SEMKO manages this
  activity within North and South America. In Europe, this activity is performed
  through an associate company, Dekra, in which we have a 49% holding. In Asia,
  this activity is carried out within the Labtest division.

#### Geographic coverage

ETL SEMKO has 35 offices and 36 laboratories worldwide. Head offices are located
  in Sweden for ETL SEMKO Europe and Asia, and the United States for ETL SEMKO
  Americas.

-14-

---





#### Customers

ETL SEMKOs customers include industrial companies such as Adtran, LG
  Electronics, Ericsson, Matsushita and Electrolux. We also have a number of long-standing
  relationships with various industry organisations, such as the Air Conditioning
  and Refrigeration Institute, which has been our customer since 1956. ETL SEMKO
  does not have any customers which represent more than 3% of its revenues.

#### Sales and marketing

ETL SEMKO provides a wide range of testing services near points of manufacture
  worldwide, and the goods tested by ETL SEMKO may be sold in all the major markets
  of the world. With its global sales force and its network of testing centres,
  ETL SEMKO benefits from the migration of manufacturing from North America and
  Europe to Asia and other parts of the developing world. For example, telephones
  manufactured in China for export to the United States are primarily tested in
  China to ensure compliance with the US Federal Communications Commission standards.

New business is obtained through a variety of means, including direct mailing,
  advertisements, tele-sales, seminars, trade shows, trade associations and customer
  visits and referrals. In Europe, ETL SEMKOs customers tend to be larger,
  quality-conscious companies with a wide range of testing requirements. Typically,
  new business is obtained by the engineers, who are the primary point of contact
  for customers, offering new services to existing customers. In the United States,
  ETL SEMKO has a centralised marketing team based in its regional head office.
  Each member of this team is responsible for the marketing of a defined range
  of services (e.g. telecommunications, building products, electrical products,
  etc). In Asia, marketing is mainly carried out by marketing and sales executives.
  We have established an Asian marketing and sales group to co-ordinate marketing
  throughout the Asian region.

#### Competition

Based on our knowledge of the market in which we operate, we believe that ETL
  SEMKO has no direct global competitor offering the same range of services. Underwriters
  Laboratories, a non-profit organisation in the United States which is primarily
  engaged in safety mark testing, has the major share of consumer goods testing
  in the market in the United States and a small presence in Europe. The German
  Technischer Uberwachungs are nonprofit organisations which have the major market
  share in Germany with operations in America and Asia. We believe that ETL SEMKO
  has the potential to increase its market share as a result of its range of safety
  labels and accreditations, its brand name recognition, its global presence and
  the high startup costs and barriers to entry in the product testing and certification
  market. However, there is a possible trend towards increasing global harmonisation
  of standards and self-certification in lieu of third party testing which may
  have an adverse effect on the market for ETL SEMKOs services.

#### Operations

ETL SEMKO has the experience to test and certify many types of products for
  a wide range of performance and safety features including electromagnetic emission
  of telecommunications, computers and other electronic equipment; the energy
  efficiency of heating, ventilation and air conditioning equipment; thermal and
  acoustic insulation properties of fire doors, glass and other building products;
  and the safety performance of sporting goods. We use a wide range of laboratory
  facilities and specialist test engineers.

#### Growth strategy

Our objective for ETL SEMKO is to increase our market share while maintaining
  our operating margin. We aim to achieve this by continuing to develop strong
  partnerships with our customers so that we can promote and provide all of our
  testing and certification services on a one stop basis. The continued
  development of our interactive websites and Internet marketing is an integral
  part of this strategy. A new Oracle computer system is being implemented in
  the United States that will allow customers on-line access to project status
  and test reports. We are increasingly organising ETL SEMKO into customer driven
  market segments such as telecommunications equipment, information technology
  equipment, medical equipment, building products and heating, ventilation and
  air conditioning equipment. We believe these segments allow for more focused
  and effective marketing. We have outsourcing partnerships with ABB, Electrolux
  and Ericsson, and we anticipate that outsourcing contracts will continue to
  be a growth area. In addition to the above initiatives, we are continuing to
  broaden the geographical spread of ETL SEMKO by making strategic acquisitions,
  particularly in Europe where the market is mature and organic growth is slower.
  We also acquire businesses that allow us entry into niche markets such as explosives-

-15-

---





related accreditation that we can then market globally. In March 2000 we acquired
  the assets of a small laboratory in Italy from Electrolux. This laboratory carries
  out electro magnetic compatibility testing for Electrolux and others, providing
  us with a facility in the fast growing Italian market. Also in March 2000, we
  acquired the Radio Communications Testing operation of ERA Technology in the
  United Kingdom. This operation was merged into our existing facility in Leatherhead
  and has enabled us to enter the mobile telephone handset testing market in the
  United Kingdom. In December 2000, we acquired a laboratory business in Japan
  which has test facilities for EMC, telecommunications and safety testing.

#### Personnel

ETL SEMKO employs approximately 1,600 people in 13 countries. Less than 12%
  of employees are members of various unions around the world, with the majority
  being in Sweden.

#### Labtest

Labtest is one of the largest international providers of testing and inspection
  services for textiles, toys, footwear, hardlines and other consumer products.

#### Business overview

Labtest performs testing to ensure that products meet safety standards and
  the specifications of distributors and retailers. The purchasers typically specify
  their own quality and performance standards, but may specify nationally recognised
  standards. Manufacturers operating in developing countries routinely seek such
  testing and inspection of consumer goods to assist them in selling their products
  to markets such as North America and Europe. Labtest divides its activities
  into the following subdivisions, Textiles, Toys, Inspection, Code of Conduct,
  Quality Management Systems and Risk Analysis and Management:

Textilestesting is principally an activity in which large textile
  and clothing retailers specify standards for the testing of products at the
  point of manufacture. Testing is mainly carried out for colour fastness, abrasion
  resistance, size conformity, shrinkage resistance and flammability. Based on
  our knowledge of the textile testing market and our competitors, we believe
  that Labtest is the world leader in textile testing.

Toystesting is mainly to ensure products conform to national
  and international safety standards. Services include design and packaging evaluation,
  safety testing, durability testing and performance testing.

Inspection primarily involves visual inspection of finished products
  at the manufacturers factory prior to shipment to verify the quantity,
  quality and basic specification of the products to be shipped. Inspection may
  be carried out on behalf of the manufacturer or the buyer.

Code of Conduct work has resulted from consumers and pressure
  groups being increasingly concerned about the social conditions to which workers
  in developed and developing countries are subjected. Code of Conduct audit work
  includes factory tours, document review and employee interviews. Retailers usually
  commission the audits and we work closely with both manufacturers and retailers
  to obtain the best all-round solution to any problems identified. The main focus
  of these audits is the review of child labour conditions, involuntary labour,
  coercion and harassment, health and safety, working hours, compensation and
  environmental protection.

Quality Management Systems involves the certification of the
  business processes and services of an organisation to ISO 9000 and similar standards.
  In China, Hong Kong and Taiwan, Quality Management Systems work is carried out
  through a partnership with the British Standards Institute. In addition, Quality
  Management Systems activities include pharmaceutical product testing.
  This involves testing equipment, utilities such as pure gases and air, installations
  and associated processes to standards issued by national and legal health authorities
  such as the Food and Drug Administration in the United States.

Risk Analysis and Managementworks with world market leaders
  to minimise the risk associated with toys, childrens clothes and other
  consumer products.

#### Geographic coverage

Labtest has 63 offices and 33 laboratories worldwide. The head office is located
  in Hong Kong.

-16-

---





#### Customers

Labtests customers are retailers, mainly in North America and Europe,
  and manufacturers, mainly in Asia. Customers include McDonalds and retailers
  such as Gap Inc, The Home Depot, Tommy Hilfiger (HK) Ltd and Li & Fung (Trading)
  Ltd. Labtests top ten customers account for approximately 20% of revenues.

#### Sales and marketing

Labtest provides a full range of testing services for both points of manufacture
  and retailers buying offices. Labtest is able to ensure that the goods
  tested may be sold in all the major markets in the world because it has the
  accreditations and reputation to meet the requirements of its retail and distribution
  customers worldwide. With its network of testing centres in developing countries,
  Labtest benefits from the migration of manufacturing from North America and
  Europe to Asia and other developing world regions. For example, our testing
  laboratory in Turkey offers American and European textile and garment importers
  a local testing service in the country of production. Labtests marketing
  efforts focus mainly on the major retailers of North America and Europe. Labtest
  assigns an account manager to most of these major retailers who is responsible
  for marketing to that client and providing a full range of services. The account
  manager is likely to be a specialist, for example, in textiles or inspection,
  and will draw upon the support of other experts within the division, as and
  when appropriate, to service the client.

#### Competition

Based on our knowledge of the markets in which we operate and our competitors
  performance, we believe that Labtest has 36% of the textile testing market,
  20% of the toys testing market and 25% of the inspection market. Societe Generale
  de Surveillance competes with us in all these sectors, ACTS Testing Laboratories
  is a competitor primarily in the toys testing market and Merchandise Testing
  Laboratories competes with us primarily in the textiles testing sector.

#### Operations

Labtest has the expertise to inspect and test a wide range of consumer products
  to the specifications required by retailers and distributors. Labtest testing
  facilities are usually located near to the point of manufacture of the product
  and range from the largest textile testing laboratory in the world in Hong Kong
  to small startup operations in new territories such as Morocco. We employ experts
  in a number of specialist fields such as textile analysis and toy testing.

#### Growth strategy

We expect the market for Labtest to continue growing as a result of increasing
  sourcing of products from developing countries. In addition, Labtest benefits
  from the greater consumer desire for product varieties, the trend towards shorter
  product life cycles and increasing awareness of consumer protectionism. Labtest
  aims to continue its strong revenue growth while maintaining its operating margins.
  We anticipate an increase in the volume of consumer products purchased over
  the Internet which will potentially increase business for Labtest. We are developing
  our computer systems to allow our customers on line access to an ordering, reporting
  and analysis system. We continue to expand the geographical coverage of Labtest.
  In 2000 we opened offices in Bangladesh and Madagascar and laboratories in China
  and Thailand. Further expansion is planned in China.

#### Personnel

Labtest employs approximately 2,300 people in 21 countries. Korea is the only
  country where employees are members of a union.

-17-

---





#### Foreign Trade Standards

#### Business overview

FTS provides independent pre-shipment inspection services to the governments
  of developing countries to assist them in the enforcement of customs duties
  and exchange controls. FTS also provides inspection and testing services to
  government standards organisations to ensure that imports of specified products
  meet safety and other national standards. In providing these services, FTS inspects,
  tests and reviews at source the quantity, quality and price of goods to be shipped,
  to check that import duties are correctly calculated and that such goods comply
  with the laws, standards and relevant customs regulations of the importing country.
  This work is contracted directly with the governments and standards organisations
  of developing countries. This division also provides customs training services
  to customs departments. Pre-shipment inspection contracts fall into one of four
  categories:



|Single Contracts                |  | A single inspection organisation is successful at securing the contract
      with the government and inspects inbound trade shipments.                                                                                                                                                                                                                 
|------------------------------- |  | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|                                |  |                                                                                                                                                                                                                                                                                                                                                         
|Shared Contracts                |  | Two or three inspection organisations are selected to inspect imports
      and typically have responsibilities divided between them according to the
      location of the exporter. For example, one inspection organisation may cover
      imports from the Americas, a second, imports from Europe and Africa and
      a third, imports from Asia.
|                                |  |                                                                                                                                                                                                                                                                                                                                                         
|Competitive Contracts           |  | A number of inspection companies are authorised to perform inspection
      work for the country concerned. Inspection work is performed by one of these
      organisations on a competitive basis. Competitive contracts are common in
      South America.                                                                                           
|                                |  |                                                                                                                                                                                                                                                                                                                                                         
|Standards Body 
      Contracts |  | Independent product testing and certification services provided to a national
      Standards Body (e.g. the Saudi Arabian Standards Organisation (SASO),
      to confirm that products imported into the Kingdom of Saudi Arabia comply
      with relevant SASO or international standards).                                                       

In addition to pre-shipment inspection work, FTS also provides a wide range
  of inspection and expediting activities, usually focused on larger engineering
  plants and projects. The service covers review of specifications sent to suppliers,
  technical inspection activities, including witnessing of tests on finished products
  and materials.

#### Geographic coverage

FTS has 47 offices worldwide and its head office is located in the United Kingdom.

#### Customers

FTS customers include the governments of Argentina, Bangladesh, Ecuador,
  Georgia, Iran, Mexico, Mozambique, Nigeria, Uganda and Uzbekistan and the Saudi
  Arabian Standards Organisation. Some of these contracts may be cancelled at
  short notice. For example, in January 1999, the Nigerian government unexpectedly
  announced that its pre-shipment inspection programmes would cease in March 1999.
  This had a negative effect on our revenues and operating income in 1999. We
  have in the past, and may also in the future, experience delays in receiving
  payment for our services from certain governments. FTS largest customer
  accounted for 29% of its revenues in 2000.

#### Sales and marketing

FTS marketing efforts for government contracts are managed by a business
  development team based in London. Business development efforts require extensive
  work in the targeted country, including high level lobbying to encourage the
  government, usually via the Ministry of Finance or the government Standards
  Body, to issue a tender for pre-shipment inspection services. The marketing
  team also makes regular contact with major international organisations that
  advise countries on economic policy, such as the World Bank and the International
  Monetary Fund. In competitive contracts such as those in parts of Latin America,
  there needs to be a marketing effort to shippers and receivers of products and
  commodities. Local sales teams are used to promote FTS services to importers,
  against its competitors.

-18-

---





#### Competition

Four companies dominate the pre-shipment inspection market. The high cost of
  entry caused by the requirement to have an extensive worldwide inspection network
  has prevented newcomers from creating a significant impact. Based on the number
  of pre-shipment inspection programmes in existence and our knowledge of our
  competitors we estimate that we have about 16% of the pre-shipment inspection
  market, Societe Generale de Surveillance have approximately 39%, Bureau Veritas
  have about 26% and Cotecna have about 12%.

#### Operations

Inspection requirements typically involve verification of shipment quantity,
  quality, product specification and value. The requirement for inspection work
  is normally first notified in the country of import. FTS logs the job in its
  worldwide information system and notifies its regional office located near the
  exporter. FTS information system automatically generates fax notification
  to the exporter, informing it of the requirements for inspection. After the
  receipt of information from the exporter as to when and where the goods to be
  shipped may be inspected, FTS will despatch an inspector to the appropriate
  location. As well as our own full-time inspectors, we use the services of sub-contractors
  around the world, who operate on a pay-per-job basis, minimising fixed costs.
  Concurrently, the FTS office in the exporters region will check the invoice
  for consistency with the appropriate inspection result and for price. At this
  point, the FTS information system produces customs and other certificates for
  official use in the country of import.

#### Growth strategy

Our strategy for FTS is to focus on increasing our share of the global pre-shipment
  inspection market whilst maintaining both a minimum operating margin and a rigorous
  compliance programme to ensure that all employees and consultants operate professionally
  and ethically. Increasingly, governments with existing single pre-shipment inspection
  contracts and governments setting up new pre-shipment inspection programmes
  are keen to encourage competitive pricing. This trend has eroded the dominance
  of Societe Generale de Surveillance in the pre-shipment inspection market and
  allowed other inspection companies to gain market share. We are reducing operating
  costs by developing a web-based computer system that allows importers and exporters
  to enter their own information. We are also developing an on-line enquiry system
  that will allow clients to query an online database and determine the status
  of their files. We plan to develop Government Standards Programmes such as the
  SASO programme, which utilise the inspection services of our other divisions,
  thus maximising income for the group. We anticipate that Customs Reform contracts,
  such as the contract in Georgia, will be a growth area, and we are developing
  information technology systems and training personnel in customs reform services.

#### Personnel

FTS employs approximately 750 people in 17 countries.

-19-

---





#### Organizational structure

We are organised under the English Companies Act 1985 and, as set forth in
  our Memorandum and Articles of Association. Intertek Testing Services Limited
  is the ultimate parent company for the 148 subsidiary companies that conduct
  our business on a worldwide basis. Our significant operating subsidiaries are
  detailed below. All these subsidiaries are wholly owned. Intertek Testing Services
  Hong Kong Limited and Intertek Testing Services NA Inc. each contributed more
  than 10% of the operating income from continuing businesses for the Group in
  2000. All other subsidiaries contributed less than 10% each. Intertek Testing
  Services NA Inc. and Caleb Brett USA Inc. each contributed more than 10% of
  the total assets of the Group at December 31, 2000. All other subsidiaries contributed
  less than 10% each. Revenues from the operations listed below comprised 66%
  of continuing group revenues for 2000.

|Country of incorporation and company
      name |  | Principal activity               
|----------------------------------------------- |  | ---------------------------------
|                                               
|France                                          | 
|Intertek Testing Services France SARL           |  | Labtest / FTS                    
|                                               
|Hong Kong                                       | 
|Intertek Testing Services Hong Kong Limited     |  | Labtest / Caleb Brett / ETL SEMKO
|                                               
|Sweden                                          | 
|SEMKO AB                                        |  | ETL SEMKO                        
|                                               
|Taiwan                                          | 
|Intertek Testing Services Taiwan Limited        |  | Labtest / Caleb Brett / ETL SEMKO
|                                               
|United Kingdom                                  | 
|Intertek Testing Services International Limited |  | FTS                              
|ITS Testing Services (UK) Limited               |  | Caleb Brett                      
|                                               
|United States and Canada                        | 
|Caleb Brett USA Inc                             |  | Caleb Brett                      
|Intertek Testing Services NA Inc.               |  | ETL SEMKO                        
|Intertek Testing Services NA LTD                |  | ETL SEMKO                        
|RAM Consulting Inc.                             |  | Labtest                          

#### Property, plant and equipment

At December 31, 2000, we operated from 479 offices and 243 laboratories in
  94 countries. The majority of laboratories have approximately 10,000 to 20,000
  square feet of space. Most of our properties are leased and approximately 76%
  of our leases expire in less than five years. Our principal executive office
  is located in London, England and occupies 6,960 square feet under a lease expiring
  in June 2006. The other leased premises have remaining terms generally ranging
  from 1 to 24 years. Our Labtest operation in Hong Kong currently occupies 180,800
  square feet of a building in Kowloon which it rents under various two year leases.
  The majority of the leases expire in 2001 and we currently expect that they
  will be renewed.

We own a small number of sites that had a net book value of £8.5 million
  at December 31, 2000. The ETL SEMKO facility in Stockholm, Sweden occupies 161,400
  square feet and accounts for £4.6 million of that total. The Caleb Brett
  facility in Rotterdam, the Netherlands, which occupies 34,000 square feet and
  is owned by ITS Caleb Brett Nederland BV, has a net book value of £0.9
  million. The ETL SEMKO facility in Cortland, New York, which occupies 150,000
  square feet and is owned by Intertek Testing Services NA, Inc., also has a net
  book value of £0.9 million. We believe that our facilities are suitable
  for their present and intended purposes and are adequate for our current and
  expected levels of operations.

-20-

---





We are aware of contamination at the following two properties which we presently
  own.

#### Cortland, New York, United States

Cortland is a major ETL SEMKO operating location with a significant heating,
  ventilation and air conditioning testing capacity. Site contamination was discovered
  and clean up efforts were started several years ago. These clean-up operations
  cost approximately $50,000 in 2000, and we estimate ongoing clean up operation
  costs of about $50,000 to $100,000 per annum. There is a risk that the regulators
  may require more expensive remedial work.

#### Antwerp, Belgium

In April 1998, we decided to move our existing Caleb Brett operations in Antwerp
  to a newly acquired site following an acquisition in Belgium. After vacating
  our original site, we became aware of soil contamination under the building.
  We estimate that clean up operations will last for about one year and will cost
  approximately £90,000. The clean up plan was approved by the Belgian authorities
  and the clean up operation has commenced.

In connection with our acquisition from Inchcape plc on November 6, 1996, we
  obtained rights to indemnification from Inchcape plc in certain circumstances
  for breaches of Inchcape plcs environmental representations and warranties
  in the related acquisition agreement. Those rights to recover for breach of
  warranty are subject to limitations, however, including the necessity that amounts
  sought from Inchcape plc exceed £250,000, and the requirement that we give
  notice to Inchcape plc prior to the fifth anniversary of the closing of the
  acquisition, depending on the issue involved. We have notified Inchcape plc
  of the contamination at both of the above sites but we can give no assurance
  that this or any other material environmental liability will be covered by such
  indemnification rights.

#### Intellectual property

We own or have the right to use various patents, copyrights, trademarks, service
  marks and certification marks in the United States and worldwide. We use our
  well-known certification marks to signify to consumers that a product bearing
  such a mark meets various nationally and/or internationally recognised safety
  standards. ETL SEMKO issues the proprietary ETL (U.S.), cETL
  (Canada), S (Northern Europe), and WH (US and Canada)
  safety marks, and is accredited to authorise the application of the GS
  mark in Germany and the NOM mark in Mexico. We also use other trade
  names, registered and unregistered, such as Caleb Brett, SEMKO,
  Intertek, ITS, Labtest and Warnock
  Hersey . We believe that our brand and trade names provide us with significant
  competitive advantage in marketing our services. Invalidation of several of
  these marks, through a lawsuit or governmental proceeding, could have a materially
  adverse effect on our business. In addition, invalidation of a mark with great
  commercial importance in a particular country could have a materially adverse
  effect on our business in that country.

We believe that our use of intellectual property does not infringe the intellectual
  property rights of third parties. However, we cannot be sure that competitors
  or other third parties will not in the future assert infringement or royalty
  claims against, or otherwise seek to invalidate our intellectual property rights.

Several agreements currently exist under which we are either a licensor or
  licensee of intellectual property. We have no reason to anticipate the loss
  or invalidation of these licenses but in any event we do not consider that such
  a loss would have a materially adverse effect on our business. We protect our
  intellectual property by registering our trademarks, patents and trade names
  with the appropriate governmental authorities and defend such intellectual property
  from infringement through litigation if necessary.

-21-

---





#### Item 5: Operating and Financial Review and Prospects

The following discussion of our financial condition and results of operations
  should be read in conjunction with our consolidated financial statements and
  the related notes, and the other financial information included elsewhere in
  this document. Our consolidated financial statements are prepared in accordance
  with U.K. GAAP and we discuss in note 30 to the financial statements the principal
  differences between UK and U.S. GAAP as they relate to us. This discussion contains
  forward-looking statements based on assumptions about our future business. Our
  actual results could materially differ from those contained in the forward-looking
  statements.

#### Impact of exchange rates

Our financial statements are reported in pounds sterling (sterling
  or £). We have 148 subsidiary companies, of which 136 report
  in currencies other than sterling. Subsidiaries report in the currency of the
  country in which they are domiciled, apart from those based in countries where
  there is hyperinflation, which report in their functional currency which is
  US dollars. We translate the results of overseas operations into sterling at
  the cumulative average exchange rates for the period, and our results can therefore
  vary from period to period because of fluctuations in exchange rates which are
  unrelated to the underlying operational performance.

We set out below a discussion of our operating results and financial condition
  for the years ended 1998, 1999 and 2000, followed by a detailed review of the
  performance of each division. The tables below show growth rates of 1999 over
  1998 and 2000 over 1999 at actual exchange rates and at comparable exchange
  rates. The actual growth rate is the percentage change of one period over the
  prior period where each period is translated into sterling using the exchange
  rates applicable in that period. The comparable growth rate is the percentage
  change of one period over the prior period where both periods are translated
  into sterling using the prior periods exchange rates. This reflects the
  underlying growth in revenues and operating income without the fluctuations
  caused by changes in translation rates. We do not hedge translation exchange
  rate exposure.

Over 50% of our revenues and the majority of our borrowings, interest payments
  and debt repayments are denominated in US dollars or currencies linked to the
  US dollar, such as the Hong Kong dollar. Where there is material transaction
  exposure from currency rate movements we take out forward foreign exchange contracts
  to minimise this exposure.

-22-

---





#### Summary of results of continuing operations

#### Revenues

Our revenues are derived from our inspection, testing and certification activities.
  Our customer base is diverse and different in each division and includes retailers,
  distributors, manufacturers, petroleum companies, traders and governments. Apart
  from our government clients in the FTS division, no individual customer contributes
  more than 2% to the groups revenues. The majority of our work is on a
  job by job basis except for the FTS division where over 90% of revenues are
  from term contracts.

The table below compares revenues by division for 1998 and 1999 at actual and
  comparable exchange rates.

|Revenues by division    |  | 1998£m |  | 1999£m |  | Growth/
      (decline) £m |   | Actual% |   | Comparable% |  
|----------------------- |  | ------ |  | ------ |  | -------------------------- | - | ------- | - | ----------- | -
|                        |  |        | 
|Caleb Brett             |  | 123.0  |  | 137.2  |  | 14.2                       |   | 11.5    |   | 11.7        |  
|ETL SEMKO               |  | 84.9   |  | 88.2   |  | 3.3                        |   | 3.9     |   | 2.4         |  
|Labtest                 |  | 64.6   |  | 78.3   |  | 13.7                       |   | 21.2    |   | 18.6        |  
|                        |  |       
|Sub total               |  | 272.5  |  | 303.7  |  | 31.2                       |   | 11.5    |   | 10.4        |  
|Foreign Trade Standards |  | 65.3   |  | 47.5   |  | (17.8                      | ) | (27.3   | ) | (28.9       | )
|                        |  |       
|Continuing operations   |  | 337.8  |  | 351.2  |  | 13.4                       |   | 4.0     |   | 2.8         |  
|Discontinued operations |  | 22.0   |  | 11.3   |  | (10.7                      | ) | (48.6   | ) | (45.5       | )
|                        |  |       
|Total                   |  | 359.8  |  | 362.5  |  | 2.7                        |   | 0.8     |   | (0.1        | )
|                        |  |       

Revenues from continuing operations grew by £13.4 million or 2.8% at comparable
  rates in 1999 over 1998. The growth was 4.0% at actual rates. The higher growth
  rate at actual rates is due to translation gains arising from the strength of
  the US dollar and currencies linked to the US dollar, against sterling. We discuss
  these results in more detail in the operating and financial review by division.

Revenues from discontinued operations included Environmental Testing which
  ceased operating in 1998 and Bondar Clegg which ceased operating in 2000.

In 1998 and 1999 revenues were generated by operations in the following geographic
  areas:

|Revenues by geographic area    |  | 1998£m |  | 1999£m |  | Growth/
      (decline) £m |   | Actual% |   | Comparable% |  
|------------------------------ |  | ------ |  | ------ |  | -------------------------- | - | ------- | - | ----------- | -
|                               |  |        | 
|Americas                       |  | 137.0  |  | 143.3  |  | 6.3                        |   | 4.6     |   | 4.2         |  
|Europe, Africa and Middle East |  | 126.5  |  | 117.7  |  | (8.8                       | ) | (7.0    | ) | (6.3        | )
|Asia and Far East              |  | 74.3   |  | 90.2   |  | 15.9                       |   | 21.4    |   | 15.7        |  
|                               |  |       
|Continuing operations          |  | 337.8  |  | 351.2  |  | 13.4                       |   | 4.0     |   | 2.8         |  
|Discontinued operations        |  | 22.0   |  | 11.3   |  | (10.7                      | ) | (48.6   | ) | (45.5       | )
|                               |  |       
|Total                          |  | 359.8  |  | 362.5  |  | 2.7                        |   | 0.8     |   | (0.1        | )
|                               |  |       

In 1999, 41% of revenues from continuing operations were generated in the Americas
  (1998: 40%), 33% in Europe, Africa and the Middle East (1998: 37%), and 26%
  in Asia and the Far East (1998: 23%). In 1999, we had operations in 85 countries,
  an increase of 2 over 1998. In 1999, 34% of revenues were generated in the United
  States (1998: 34%), 15% in the United Kingdom (1998: 19%) and 13% in Hong Kong
  (1998: 12%). No other individual country accounted for more than 10% of revenues
  in either 1999 or 1998.

-23-

---





Revenues from the Americas increased by £6.3 million or 4.2% at comparable
  rates, in 1999 over 1998, primarily due to strong growth in Caleb Brett and
  ETL SEMKO in the United States. The growth rate was 4.6% at actual rates due
  to currency translation gains caused by the strength of the US dollar against
  sterling.

Revenues from Europe, Africa and the Middle East decreased by £8.8 million
  or 6.3% at comparable rates, in 1999 over 1998. This was primarily due to the
  cancellation of the Nigerian FTS programme which generated revenues in the United
  Kingdom and the disposal of our majority share in the Quality Management business
  in Sweden.

In Asia and the Far East, revenues increased by £15.9 million or 15.7%
  at comparable rates, in 1999 over 1998 due to strong growth in textiles and
  toys testing in Labtest and growth in Caleb Brett and ETL SEMKO. The growth
  rate was 21.4% at actual rates due to currency translation gains as the Hong
  Kong dollar reflected the strength of the US dollar against sterling.

The table below compares revenues by division for 1999 and 2000 at actual and
  comparable exchange rates.

|Revenues by division    |  | 1999£m |  | 2000£m |  | Growth/
      (decline) £m |   | Actual% |   | Comparable% |  
|----------------------- |  | ------ |  | ------ |  | -------------------------- | - | ------- | - | ----------- | -
|                        |  |        | 
|Caleb Brett             |  | 137.2  |  | 157.5  |  | 20.3                       |   | 14.8    |   | 11.8        |  
|ETL SEMKO               |  | 88.2   |  | 99.5   |  | 11.3                       |   | 12.8    |   | 7.8         |  
|Labtest                 |  | 78.3   |  | 94.0   |  | 15.7                       |   | 20.1    |   | 14.7        |  
|Foreign Trade Standards |  | 47.5   |  | 47.4   |  | (0.1                       | ) | (0.2    | ) | (2.1        | )
|                        |  |       
|Continuing operations   |  | 351.2  |  | 398.4  |  | 47.2                       |   | 13.4    |   | 9.6         |  
|Discontinued operations |  | 11.3   |  | 0.7    |  | (10.6                      | ) | (93.8   | ) | (93.8       | )
|                        |  |       
|Total                   |  | 362.5  |  | 399.1  |  | 36.6                       |   | 10.1    |   | 6.3         |  
|                        |  |       

Revenues from continuing operations grew by £47.2 million or 9.6% at comparable
  rates in 2000 over 1999. The growth was 13.4% at actual rates. The higher growth
  rate at actual rates is due to translation gains arising from the strength of
  the US dollar and currencies linked to the US dollar, against sterling. Revenues
  in all divisions grew strongly apart from FTS where there was a small decline.

Revenues from discontinued operations in 1999 and 2000 comprised the Bondar
  Clegg division which ceased operating in 2000.

-24-

---





Revenues in 1999 and 2000 were generated by operations in the following geographic
  areas:

|Revenues by geographic area    |  | 1999£m |  | 2000£m |  | Growth/
      (decline) £m |   | Actual% |   | Comparable% |  
|------------------------------ |  | ------ |  | ------ |  | -------------------------- | - | ------- | - | ----------- | -
|                               |  |        | 
|Americas                       |  | 143.3  |  | 163.5  |  | 20.2                       |   | 14.1    |   | 7.3         |  
|Europe, Africa and Middle East |  | 117.7  |  | 120.4  |  | 2.7                        |   | 2.3     |   | 4.8         |  
|Asia and Far East              |  | 90.2   |  | 114.5  |  | 24.3                       |   | 26.9    |   | 19.3        |  
|                               |  |       
|Continuing operations          |  | 351.2  |  | 398.4  |  | 47.2                       |   | 13.4    |   | 9.6         |  
|Discontinued operations        |  | 11.3   |  | 0.7    |  | (10.6                      | ) | (93.8   | ) | (93.8       | )
|                               |  |       
|Total                          |  | 362.5  |  | 399.1  |  | 36.6                       |   | 10.1    |   | 6.3         |  
|                               |  |       

In 2000, 41% of revenues were generated in the Americas (1999: 41%), 30% in
  Europe Africa and the Middle East (1999: 33%), and 29% in Asia and the Far East
  (1999: 26%). In 2000, we extended our operations into 9 new countries which
  increased the total number of countries in which we operate to 94 (1999: 85).
  In 2000, 34% of revenues were generated in the United States (1999: 34%), 14%
  in the United Kingdom (1999: 15%) and 14% in Hong Kong (1999: 13%). No other
  individual country accounted for more than 10% of revenues in either 2000 or
  1999.

Revenues from the Americas increased by £20.2 million or 7.3% at comparable
  rates, in 2000 over 1999, primarily due to strong growth in Caleb Brett and
  ETL SEMKO in the United States. The growth rate was 14.1% at actual rates due
  to currency translation gains caused by the strength of the US dollar against
  sterling.

Revenues from Europe, Africa and the Middle East increased by £2.7 million
  or 4.8% at comparable rates, in 2000 over 1999. Growth in revenues in Europe
  from outsourcing work and acquisitions was offset by the termination of the
  Nigerian inspection programmes in March 1999 and the cessation of a short term
  food aid programme which boosted Caleb Brett revenues in 1999. The growth rate
  was 2.3% at actual rates due to currency translation losses caused by the strength
  of sterling against other European currencies.

In Asia and the Far East, revenues increased by £24.3 million or 19.3%
  at comparable rates, in 2000 over 1999 due to strong growth in textiles and
  toys testing in Labtest and growth in Caleb Brett and ETL SEMKO. The growth
  rate was 26.9% at actual rates due to currency translation gains as the Hong
  Kong dollar reflected the strength of the US dollar against sterling.

#### Operating costs before exceptional items

Our operating costs principally comprise labour costs, property and equipment
  rental, depreciation and laboratory consumables. Operating costs for continuing
  operations increased by £10.3 million or 2.6% at comparable rates to £303.2
  million in 1999 over 1998. Operating costs for continuing operations increased
  by £35.2 million or 8.0% at comparable rates to £338.4 million in
  2000 over 1999. The costs increased broadly in line with revenues.

-25-

---





#### Operating income before exceptional items

The table below compares operating income before exceptional items, by division
  for 1998 and 1999 at actual and comparable exchange rates.

|Operating income/(loss) by division |  | 1998£m |   | 1999£m |   | Growth/
      (decline) £m |   | Actual% |   | Comparable% |  
|----------------------------------- |  | ------ | - | ------ | - | -------------------------- | - | ------- | - | ----------- | -
|                                    |  |        |  
|Caleb Brett                         |  | 13.4   |   | 14.8   |   | 1.4                        |   | 10.4    |   | 9.7         |  
|ETL SEMKO                           |  | 10.9   |   | 12.4   |   | 1.5                        |   | 13.8    |   | 11.9        |  
|Labtest                             |  | 16.9   |   | 21.6   |   | 4.7                        |   | 27.8    |   | 23.7        |  
|                                    |  |       
|Sub total                           |  | 41.2   |   | 48.8   |   | 7.6                        |   | 18.4    |   | 16.0        |  
|Foreign Trade Standards             |  | 8.1    |   | 3.1    |   | (5.0                       | ) | (61.7   | ) | (64.2       | )
|                                    |  |       
|Sub total                           |  | 49.3   |   | 51.9   |   | 2.6                        |   | 5.3     |   | 2.9         |  
|Central overheads                   |  | (4.4   | ) | (3.9   | ) | 0.5                        |   | 11.4    |   | 11.4        |  
|                                    |  |       
|Continuing operations               |  | 44.9   |   | 48.0   |   | 3.1                        |   | 6.9     |   | 4.2         |  
|Discontinued operations             |  | (2.7   | ) | (2.1   | ) | 0.6                        |   |        |   |            |  
|                                    |  |       
|Total                               |  | 42.2   |   | 45.9   |   | 3.7                        |   | 8.8     |   | 6.2         |  
|                                    |  |       

Operating income from continuing operations grew by £3.1 million or 4.2%
  at comparable rates in 1999 over 1998. The growth was 6.9% at actual rates.
  Excluding FTS and central overheads, operating income grew by £7.6 million
  or 16.0% at comparable rates. Over 60% of this growth came from textiles and
  toys testing in Labtest due to the increased demand for quality testing of consumer
  merchandise sourced from Asia and other developing countries. The decline in
  FTS operating income was caused by the cancellation of pre-shipment inspection
  programmes in Nigeria from March 31, 1999.

Operating income from discontinued operations included Environmental Testing
  which ceased operating in 1998 and Bondar Clegg which ceased operating in 2000.

The table below compares operating income before exceptional items, by division
  for 1999 and 2000 at actual and comparable exchange rates.

|Operating income/(loss) by division |  | 1999£m |   | 2000£m |   | Growth/
      (decline) £m |   | Actual% |   | Comparable% |  
|----------------------------------- |  | ------ | - | ------ | - | -------------------------- | - | ------- | - | ----------- | -
|                                    |  |        |  
|Caleb Brett                         |  | 14.8   |   | 16.6   |   | 1.8                        |   | 12.2    |   | 8.8         |  
|ETL SEMKO                           |  | 12.4   |   | 15.0   |   | 2.6                        |   | 21.0    |   | 16.1        |  
|Labtest                             |  | 21.6   |   | 27.8   |   | 6.2                        |   | 28.7    |   | 21.3        |  
|Foreign Trade Standards             |  | 3.1    |   | 5.8    |   | 2.7                        |   | 87.1    |   | 80.6        |  
|                                    |  |       
|Sub total                           |  | 51.9   |   | 65.2   |   | 13.3                       |   | 25.6    |   | 20.0        |  
|Central overheads                   |  | (3.9   | ) | (5.2   | ) | (1.3                       | ) | (33.3   | ) | (30.8       | )
|                                    |  |       
|Continuing operations               |  | 48.0   |   | 60.0   |   | 12.0                       |   | 25.0    |   | 19.2        |  
|Discontinued operations             |  | (2.1   | ) | (0.7   | ) | 1.4                        |   |        |   |            |  
|                                    |  |       
|Total                               |  | 45.9   |   | 59.3   |   | 13.4                       |   | 29.2    |   | 23.1        |  
|                                    |  |       

Operating income from continuing operations grew by £12.0 million or 19.2%
  at comparable rates in 2000 over 1999. The growth was 25.0% at actual rates.
  All operating divisions contributed to this growth, particularly Labtest

-26-

---





where the strong growth in textiles and toys testing continued. Caleb Brett
  benefited from new outsourcing work, and telecommunications testing grew well
  in ETL SEMKO. Existing and new FTS programmes contributed to the growth in operating
  income.

Operating losses from discontinued operations in 1999 and 2000 comprised Bondar
  Clegg which was sold in 2000.

#### Exceptional items

#### Operating exceptional items

|                                    |  | 1998
£m |   | 1999
£m |   | 2000
£m |  
|----------------------------------- |  | ------- | - | ------- | - | ------- | -
|                                    |  |         |  
|Foreign Trade Standards             |  |         |   |         |   |         |  
|Provision against Nigerian invoices |  | (20.1   | ) | (8.0    | ) | (2.6    | )
|Payments from Nigerian government   |  | 7.9     |   | 19.3    |   | 12.2    |  
|                                    |  |        
|Sub total                           |  | (12.2   | ) | 11.3    |   | 9.6     |  
|Restructuring costs                 |  |        |   | (2.6    | ) |        |  
|                                    |  |         |  
|                                    |  | (12.2   | ) | 8.7     |   | 9.6     |  
|                                    |  |        
|Caleb Brett                         | 
|Provision against Nigerian invoices |  | (1.8    | ) | (0.5    | ) |        |  
|Payments from Nigerian government   |  |        |   | 2.3     |   |        |  
|EPA fine and costs                  |  |        |   |        |   | (2.7    | )
|                                    |  |        
|                                    |  | (1.8    | ) | 1.8     |   | (2.7    | )
|                                    |  |        
|Total continuing operations         |  | (14.0   | ) | 10.5    |   | 6.9     |  
|                                    |  |         |  
|                                   
|Discontinued operations             | 
|Bondar Clegg restructuring          |  |        |   | (2.2    | ) |        |  
|Environmental Testing EPA costs     |  | (5.2    | ) | (2.9    | ) | (7.8    | )
|                                    |  |        
|Total discontinued operations       |  | (5.2    | ) | (5.1    | ) | (7.8    | )
|                                    |  |         |  
|Total operating exceptional items   |  | (19.2   | ) | 5.4     |   | (0.9    | )
|                                    |  |         |  

#### Continuing operations

#### Foreign Trade Standards

Due to delays in receiving payments from the Nigerian government for our work
  on the Nigerian pre-shipment inspection programmes, in 1997, we adopted a policy
  of making full provision against unpaid invoices. The provision for each year
  was charged to our profit and loss account as an exceptional cost and the associated
  debt was removed from working capital. When payments were received, they were
  credited as exceptional income in the period in which the cash was received.

From March 31, 1999, the Nigerian government cancelled its pre-shipment inspection
  programmes. Revenues for these programmes ceased, and the debt owed to us by
  the government was capped. Due to the significant size of the outstanding receivables
  from the Nigerian government, shortly before the cessation of the programmes
  we only carried out inspections if we first received payment from exporters
  or importers. In the period January to March 1999, we collected £5.4 million
  advance payments that will be repaid to exporters or importers when we receive
  payment for the inspections from the government and on submission of a valid
  claim. The advance payments are held as creditors in our balance sheet.

-27-

---





In September 2000, we received £8.8 million from the Nigerian government,
  which cleared invoices issued under the cancelled programmes through January
  1999. The unpaid debt under the old programme is £4.7 million and we anticipate
  this being settled in 2001.

In September 1999, the new government in Nigeria re-introduced a pre-shipment
  inspection programme. FTS is participating in this new programme but in a much
  smaller capacity than the previous programmes. The new programme generated revenues
  of approximately £5.2 million in 2000. We received regular payments from
  the government during 2000, which totalled £3.4 million and cleared invoices
  through June 2000. At December 31, 2000, the amount owed by the government was
  £2.6 million. This was reduced by a further payment of £0.5 million
  which we received in January 2001. In view of the regular payments received
  from the government and the reduced debt exposure, we have stopped making exceptional
  provisions for unpaid invoices issued in respect of the new government pre-shipment
  inspection programme. The debt of £2.6 million was included in our working
  capital at December 31, 2000. Any future debt provision will be calculated in
  accordance with the ageing policy applicable to FTS government debts and will
  be charged against operating income for the FTS division.

Following the termination of the old Nigerian inspection programmes in 1999,
  we restructured the FTS division at a cost of £2.6 million. Costs were
  mostly personnel redundancies and relocation costs.

#### Caleb Brett

The oil export-monitoring scheme performed by Caleb Brett was also cancelled
  by the Nigerian government from March 31, 1999, and we received full payment
  for the remaining debt in 1999.

As discussed in Item 8 of this Annual Report, one of our Caleb Brett subsidiaries
  in the United States is being investigated by the Environmental Protection Agency
  in Linden, New Jersey and in Puerto Rico. We have incurred legal costs of £1.0
  million in 2000, and we expect to incur further costs of £1.0 million in
  2001. In addition, we have agreed to pay a fine of USD $1.0 million (£0.7
  million) to conclude the Linden investigation. The total exceptional charge
  in connection with these investigations was £2.7 million in 2000.

#### Discontinued operations

#### Bondar Clegg

Bondar Clegg, our minerals testing division, was restructured to streamline
  its operations and facilitate its disposal. Termination and closure costs of
  £2.2 million were incurred in 1999. We sold this division in 2000.

#### Environmental Testing

As discussed in Item 8 to this Annual Report, although Environmental Testing
  ceased operating in August 1998, the EPA investigation into the data manipulation
  problems at the Dallas laboratory is ongoing and we are continuing to incur
  legal costs. We have charged exceptional costs of £5.2 million in 1998,
  £2.9 million in 1999 and £7.8 million in 2000 in connection with this
  investigation. We are pursuing possible rights of recovery against our former
  parent, Inchcape plc, but we have not included a provision for this potential
  recovery in our financial statements.

-28-

---





#### Non-operating exceptional items

|                                             |  | 1998
£m |   | 1999
£m |  | 2000
£m |  
|-------------------------------------------- |  | ------- | - | ------- |  | ------- | -
|                                             |  |         |  
|Net (losses)/gains on disposal of operations |  |         |   |         |  |         |  
|Caleb Brett                                  |  |        |   |        |  | (0.5    | )
|ETL SEMKO                                    |  |        |   | 2.4     |  |        |  
|Foreign Trade Standards                      |  |        |   |        |  | (2.6    | )
|                                             |  |        
|Total continuing businesses                  |  |        |   | 2.4     |  | (3.1    | )
|                                             |  |         |  
|                                            
|Bondar Clegg                                 | 
|Proceeds from disposals                      |  |        |   |        |  | 1.8     |  
|Less net assets                              |  |        |   |        |  | (6.0    | )
|Less closure costs                           |  |        |   |        |  | (1.0    | )
|Less attributable goodwill                   |  |        |   |        |  | (6.9    | )
|                                             |  |        
|Net loss on disposal and closure of division |  |        |   |        |  | (12.1   | )
|                                             |  |         |  
|                                            
|Environmental Testing                        | 
|Closure costs                                |  | (1.4    | ) |        |  |        |  
|                                             |  |        
|Total discontinued operations                |  | (1.4    | ) |        |  | (12.1   | )
|                                             |  |         |  
|                                            
|Total non-operating exceptional items        |  | (1.4    | ) | 2.4     |  | (15.2   | )
|                                             |  |         |  

#### Continuing operations

#### Caleb Brett

In 2000, Caleb Brett sold a small loss adjusting business in Chile for £0.2
  million. Goodwill of £0.6 million that was previously written off to reserves
  was transferred to the profit and loss account, resulting in an exceptional
  charge of £0.4 million. Caleb Brett also incurred a loss of £0.1 million
  when an investment in a small company in Thailand in which we had a 49% interest
  was liquidated.

#### ETL SEMKO

In 1999, ETL SEMKO sold its Compliance Engineering magazine business in the
  United States for net consideration of £3.3 million. Goodwill of £1.1
  million that was previously written off to reserves was transferred to the profit
  and loss account, resulting in an exceptional credit of £2.2 million. This
  was a non-core business which generated revenues of £0.3 million to the
  date of disposal in 1999 (1998: £2.1 million), and a small loss in 1999
  (1998: £0.3 million income).

In 1999, ETL SEMKO sold its Quality Management business in Sweden to a German
  company in which we retain a 49% interest. In order to facilitate the acquisition
  of an electrical safety testing business from ERA Technology, we sold 20% of
  our interest in a testing and certification facility in the United Kingdom to
  the British Electrotechnical Approvals Board. These disposals generated net
  income of £0.2 million.

#### Foreign Trade Standards

In 2000, FTS sold its Technical Services business in the United States for
  its net asset value of £1.0 million. Goodwill of £2.6 million that
  was previously written off to reserves was transferred to the profit and loss
  account, resulting in an exceptional charge of £2.6 million. This was a
  non-core business which generated revenues of £0.7 million to the date
  of disposal in 2000 (1999: £4.3 million and 1998: £6.7 million), and
  no profit in 2000 or 1999 (1998: £0.2 million).

-29-

---





#### Discontinued operations

#### Bondar Clegg

Our minerals testing division, Bondar Clegg, ceased operating at the beginning
  of 2000. The net assets of businesses in North and South America and Africa
  were sold for £1.7 million, which generated a net loss of £4.2 million.
  In addition, we incurred termination and closure costs of £1.0 million.
  After deducting goodwill of £6.9 million that was previously written off
  to reserves, the total exceptional loss on disposal was £12.1 million.

The division generated revenues of £0.7 million to the date of closure
  in 2000 (1999: £11.3 million and 1998: £16.5 million) and an operating
  loss of £0.7 million to the date of closure in 2000 (1999: £(2.1)
  million and 1998: £(0.1) million).

#### Environmental Testing

The majority of Environmental Testing was sold in August 1998 for its net asset
  value of £1.9 million. The remainder was closed and we incurred costs of
  £1.4 million in 1998 relating to personnel redundancies, disposal of assets
  and property closures.

#### Net interest expense

Net interest of £32.2 million was charged in 1999, an increase of £0.3
  million over the charge in 1998. The increase was largely due to the issue of
  Parent Subordinated PIK Debentures in lieu of interest payments, offset by a
  reduction in Senior Term A interest caused by the repayment of capital.

Net interest of £35.8 million was charged in 2000, an increase of £3.6
  million over the charge in 1999. The increase was due to the issue of Parent
  Subordinated PIK Debentures in lieu of interest payments, increased use of the
  Senior Revolver during 2000 and foreign exchange losses caused by translating
  interest on non sterling borrowings into sterling.

A detailed breakdown of net interest expense is given in note 7 to our financial
  statements.

#### Income taxes

The income tax charge in 1999 was £9.4 million, an increase of £2.2
  million over the charge in 1998. This represented 68.7% of operating income
  before exceptional items in 1999 and 68.9% in 1998. The tax rate was higher
  than the underlying tax rate of the territories in which we operate, largely
  due to our inability to obtain full potential tax relief on interest expense
  in the United Kingdom and the United States and on operating losses in other
  territories. The location of taxable profits and deductible expenses has a significant
  impact on the tax charge year by year. Without the unrelieved interest expense,
  our effective tax rate on operating income before exceptional items would have
  been 40.1% in 1999 and 36.8% in 1998 which more closely reflects our underlying
  tax rate.

The tax charge in 2000 was £10.9 million, an increase of £1.5 million
  over the charge in 1999. This represented 46.2% of operating income before exceptional
  items compared to 68.7% in 1999. The tax rate was lower in 2000 because we were
  able to obtain tax relief on more of our interest expense. Excluding unrelieved
  interest expense, our tax rate was 38.5% in 2000 compared to 40.1% in 1999.

-30-

---





#### Operating and financial review by division

We set out below a discussion of the performance of each of our operating divisions
  for 1999 compared to 1998 and 2000 compared to 1999. The operating income by
  division given below is before exceptional items.

#### Caleb Brett

|Operating results |  | 1998
      £m |   | 1999
      £m |   | Growth
      £m |   | 2000
      £m |   | Growth
      £m |  
|----------------- |  | ------------- | - | ------------- | - | --------------- | - | ------------- | - | --------------- | -
|                  |  |               |  
|Revenues          |  | 123.0         |   | 137.2         |   | 14.2            |   | 157.5         |   | 20.3            |  
|Actual growth     |  |               |   |               |   | 11.5            | % |               |   | 14.8            | %
|Comparable growth |  |               |   |               |   | 11.7            | % |               |   | 11.8            | %
|                 
|Operating income  |  | 13.4          |   | 14.8          |   | 1.4             |   | 16.6          |   | 1.8             |  
|Actual growth     |  |               |   |               |   | 10.4            | % |               |   | 12.2            | %
|Comparable growth |  |               |   |               |   | 9.7             | % |               |   | 8.8             | %
|Operating margin  |  | 10.9          | % | 10.8          | % |                 |   | 10.5          | % |                 |  
|                  |  |              

#### 1999 compared to 1998

Revenues in Caleb Brett increased £14.2 million, or 11.7% at comparable
  rates, in 1999 over 1998. In 1998, our European revenues benefited from a new
  oil export-monitoring scheme with the Nigerian government, however the scheme
  was cancelled from March 1999 which had a negative impact on revenue growth.
  Increased revenues in 1999 came from a short-term European Community food aid
  programme and from acquisitions made in 1998 which were fully integrated in
  1999. Petroleum consumption and refining activity contracted in Asia in 1999,
  and we continued to experience severe price competition in this region. Activity
  in Hong Kong was reduced in 1998 and 1999 due to the continuing embargo on transhipment
  activity to China.

Operating income increased £1.4 million, or 9.7% at comparable rates,
  in 1999 over 1998. Growth in operating income generated by the food aid programme
  was offset by the loss of income from the oil export monitoring scheme. Goodwill
  amortisation increased by £0.3 million to £0.7 million in 1999 over
  1998. Price competition, particularly in Asia but also in the United States,
  caused a small reduction in the operating margin.

#### 2000 compared to 1999

Revenues in Caleb Brett increased £20.3 million, or 11.8% at comparable
  rates, in 2000 over 1999. Revenues from the Americas grew strongly in 2000,
  primarily due to the sustained growth of the economy in the United States that
  resulted in increased consumption of petroleum products. We also gained a new
  coal sampling and analysis contract in Canada. Revenues in Europe benefited
  from more outsourcing work, including a new outsourcing agreement with BP in
  the United Kingdom which started in March 2000. Under this agreement, Caleb
  Brett will provide analytical services, consultancy and problem solving expertise
  in support of BPs global refining, marketing and technology businesses.
  The expertise of Caleb Brett and BP has been combined in our new centre for
  excellence in Sunbury, England which is attracting the attention of oil and
  chemical companies with regard to their outsourcing more testing work. The food
  aid programme that benefited revenues in 1999 did not continue in 2000 and had
  a negative impact on growth. Whilst the market in Asia continued to fluctuate
  in 2000, some countries such as Singapore and Malaysia performed well, principally
  due to work from new customers. The regional head office for Caleb Brett Asia
  moved from Australia to Singapore in 2000.

Operating income increased £1.8 million, or 8.8% at comparable rates,
  in 2000 over 1999. Growth was largely driven by increased margins in the United
  States and outsourcing work in Europe and the United States, offset by the cessation
  of the food aid programme and the oil export monitoring scheme and a provision
  made in 2000 for a potentially irrecoverable debt.

-31-

---





Caleb Brett made four small acquisitions in 2000 at a total cost of £1.4
  million. These acquisitions have expanded our range of services and geographic
  spread. They did not have a significant impact on revenues and operating income
  in 2000.

In 2000, Caleb Brett sold a small loss adjusting business in Chile for £0.2
  million, and a small loss-making business in Thailand in which we had a 49%
  interest, ceased operating.

#### ETL SEMKO

|Operating results |  | 1998
      £m |   | 1999
      £m |   | Growth
      £m |   | 2000
      £m |   | Growth
      £m |  
|----------------- |  | ------------- | - | ------------- | - | --------------- | - | ------------- | - | --------------- | -
|                  |  |               |  
|Revenues          |  | 84.9          |   | 88.2          |   | 3.3             |   | 99.5          |   | 11.3            |  
|Actual growth     |  |               |   |               |   | 3.9             | % |               |   | 12.8            | %
|Comparable growth |  |               |   |               |   | 2.4             | % |               |   | 7.8             | %
|                 
|Operating income  |  | 10.9          |   | 12.4          |   | 1.5             |   | 15.0          |   | 2.6             |  
|Actual growth     |  |               |   |               |   | 13.8            | % |               |   | 21.0            | %
|Comparable growth |  |               |   |               |   | 11.9            | % |               |   | 16.1            | %
|Operating margin  |  | 12.8          | % | 14.1          | % |                 |   | 15.1          | % |                 |  
|                  |  |              

#### 1999 compared to 1998

Revenues in ETL SEMKO increased £3.3 million, or 2.4% at comparable rates,
  in 1999 over 1998. Growth was impacted by a number of acquisitions and disposals
  in 1999, as outlined below.

In January 1999, we acquired our joint venture partners 50% interest
  in a semi-conductor business in the United States for £0.6 million. We
  now own 100% of this venture and it has been integrated into our existing business
  in the United States.

In May 1999, we acquired a safety testing laboratory in Germany for £0.5
  million.

In July 1999, we bought the electrotechnical safety and electro magnetic compatibility
  testing business of ERA Technology Ltd in the United Kingdom for net consideration
  of £1.4 million. The acquisition was carried out in conjunction with the
  British Electrotechnical Approvals Board (BEAB), which is a consumer
  product safety certification body in the United Kingdom. The new business was
  merged with our existing ETL SEMKO business in the United Kingdom to create
  a major testing and certification facility in the United Kingdom. BEAB acquired
  a 20% stake in this business.

In November 1999, we acquired Integral Sciences Inc, an independent analytical
  testing laboratory specialising in refrigeration chemistry in the United States,
  for £2.2 million. As a result of this acquisition, we can now offer heating,
  ventilation and air conditioning and refrigeration manufacturers a wider range
  of product safety and performance testing and certification services.

In January 1999, we sold our Compliance Engineering magazine business for £3.3
  million. This business was a non-core activity and was not generating acceptable
  operating margins. In April 1999, we sold our controlling interests in our Quality
  Management businesses (primarily ISO 9000 testing) in Sweden and Germany to
  a company in Germany in which we retained a 49% share. This change in management
  control resulted in a change in the accounting treatment of these businesses.
  In 1998 and the first quarter of 1999, 100% of the revenues and operating income
  from these businesses were included in the operating results for ETL SEMKO.
  From April 1999 onwards, revenues are excluded and only 49% of the operating
  income is included.

-32-

---





The disposal and change of accounting reduced revenues by £4.3 million
  in 1999 over 1998. This was partially offset by new revenues from the acquisitions
  of about £3.3 million.

The strong economy in the United States led to increased demand for performance
  testing to client specific standards, telecommunications testing, and heating,
  ventilation and air conditioning testing, and building material testing. The
  market for safety testing was stable and we reduced costs in this sector in
  the United States at the end of 1999. The market in Europe continued to suffer
  from the trend towards global harmonisation of standards and self-certification.
  Revenues in Europe benefited from new outsourcing agreements with Electrolux
  and Ericsson gained at the end of 1999. ETL SEMKO is small but growing rapidly
  in Asia where revenues increased by 35% in 1999 over 1998. We opened a new electro
  magnetic compatibility testing laboratory in Taiwan in 1999.

Operating income increased £1.5 million, or 11.9% at comparable rates,
  in 1999 over 1998 because of the revenue increases described above. The acquisitions
  had minimal impact on operating income in 1999 since they had less than a full
  years income and we incurred integration costs. The disposal and change
  of accounting reduced operating income by £0.9 million in 1999 compared
  with 1998. We attribute the improvement in operating margin from 12.8% in 1998
  to 14.1% in 1999, to our strategy of concentrating our business on sectors with
  higher margins.

#### 2000 compared to 1999

Revenues in ETL SEMKO increased £11.3 million, or 7.8% at comparable rates,
  in 2000 over 1999. Revenues in 1999 included £2.5 million from the magazine
  and Quality Management businesses where controlling interests were sold in 1999.
  In June 2000, the Federal Communications Commission (FCC) in the
  United States designated ETL SEMKO, Americas as a Telecommunications Certification
  Body. This allows us to test and certify information technology and telecommunications
  equipment to FCC requirements. The market for telecommunications testing in
  the United States grew strongly for the first nine months of 2000 and then declined
  towards the end of the year. We attribute this to the volatility of customers
  in the technology sector. The semiconductor market grew strongly in 2000, which
  benefited revenues in the United States and the United Kingdom. The strong economy
  in the United States has resulted in low unemployment, and we experienced problems
  in retaining and recruiting skilled technical staff in some operations. Revenues
  in Asia continued to show strong growth and we opened new operations in Korea
  and Shanghai during 2000.

We acquired three businesses in 2000 for total consideration of £0.7 million.
  In March 2000 we acquired the assets of a small laboratory in Italy from Electrolux.
  This laboratory carries out electro magnetic compatibility testing for Electrolux
  and others, providing us with a facility in the fast growing Italian market.
  Also in March 2000, we acquired the Radio Communications Testing operation of
  ERA Technology in the United Kingdom. This operation was merged into our existing
  facility in Leatherhead, England and has enabled us to enter the mobile telephone
  handset testing market in the United Kingdom. Capital expenditure of £1.0
  million upgraded the testing facility and equipment to the required standard.
  In December 2000, we acquired a laboratory business in Japan which has test
  facilities for EMC, telecom and safety testing. This will be merged with our
  existing operation in Japan and we expect to incur some integration costs early
  in 2001.

Operating income increased £2.6 million, or 16.1% at comparable rates,
  in 2000 over 1999. This was principally due to the acquisitions in 1999 and
  2000 and to improved economies of scale in Hong Kong. Our operating company
  in Sweden was awarded a refund of pension contributions of approximately £2.8
  million. In September 2000, £0.6 million was received in cash and the balance
  will be deducted from pension contributions over the next six years. A credit
  of £0.5 million was released to operating income in 2000 and the balance
  will be credited over the next six years.

-33-

---





#### Labtest

|Operating results |  | 1998
      £m |   | 1999
      £m |   | Growth
      £m |   | 2000
      £m |   | Growth
      £m |  
|----------------- |  | ------------- | - | ------------- | - | --------------- | - | ------------- | - | --------------- | -
|                  |  |               |  
|Revenues          |  | 64.6          |   | 78.3          |   | 13.7            |   | 94.0          |   | 15.7            |  
|Actual growth     |  |               |   |               |   | 21.2            | % |               |   | 20.1            | %
|Comparable growth |  |               |   |               |   | 18.6            | % |               |   | 14.7            | %
|                 
|Operating income  |  | 16.9          |   | 21.6          |   | 4.7             |   | 27.8          |   | 6.2             |  
|Actual growth     |  |               |   |               |   | 27.8            | % |               |   | 28.7            | %
|Comparable growth |  |               |   |               |   | 23.7            | % |               |   | 21.3            | %
|Operating margin  |  | 26.2          | % | 27.6          | % |                 |   | 29.6          | % |                 |  
|                  |  |              

#### 1999 compared to 1998

Revenues in Labtest increased £13.7 million, or 18.6% at comparable rates,
  in 1999 over 1998. The growth in revenues in Labtest is driven by textile and
  toy testing in Asia and to a lesser extent in Europe. We attribute this growth
  to a number of factors, including the growth in consumer demand, the migration
  of manufacturing from the West to Asia and other developing countries, the faster
  introduction of new products by manufacturers and the increasing demand by consumers
  for good quality and safe products.

We opened new textile testing laboratories in France and India in 1999. We
  opened a new toy testing laboratory in Los Angeles in 1999. We also opened other
  new Labtest operations in Spain and South Africa. Although we incurred some
  start up costs for these new facilities in 1999, the expansion of the Labtest
  network increases business throughout the division and tends to generate improved
  operating margins. The earthquakes in Turkey and Taiwan disrupted operations
  in 1999 but did not have a material impact on revenues.

Operating income in Labtest increased £4.7 million or 23.7% at comparable
  rates, in 1999 over 1998. This increase was driven by the revenue growth.

#### 2000 compared to 1999

Revenues in Labtest increased £15.7 million, or 14.7% at comparable rates,
  in 2000 over 1999. Demand for textile and toy testing continued to grow in 2000,
  and there was growth in the inspection of consumer goods in Asia. Whilst an
  economic downturn in the United States could lead to reduced imports of consumer
  goods, this has not yet started to impact the Labtest business or the order
  level. We believe that the key business drivers continued to be safety, quality
  consciousness of buyers, new fibres and more designs.

Code of Conduct work which is a new sector of inspection in Labtest added £2.9
  million to revenues in 2000 and is continuing to expand. This work resulted
  from consumers and pressure groups being increasingly concerned about the social
  and safety conditions of workers in developed and developing countries. Retailers
  usually commission the audits and we work closely with both manufacturers and
  retailers to obtain the best all-round solution to any problems identified.
  Code of Conduct audit work includes factory inspections, document review and
  employee interviews.

In 2000, we opened new inspection offices in Bangladesh and Madagascar and
  set up new laboratories in China and Thailand.

Operating income in Labtest increased £6.2 million or 21.3% at comparable
  rates, in 2000 over 1999. This increase was mainly from textiles and toys testing
  and from Code of Conduct work, as well as other revenue increases.

-34-

---





#### Foreign Trade Standards

|Operating results           |  | 1998
      £m |   | 1999
      £m |   | Decline
      £m |    | 2000
      £m |   | (Decline)/
      growth
      £m |   
|--------------------------- |  | ------------- | - | ------------- | - | ---------------- | -- | ------------- | - | -------------------------------- | --
|                            |  |               |  
|Revenues                    |  | 65.3          |   | 47.5          |   | (17.8            | )  | 47.4          |   | (0.1                             | ) 
|Actual decline              |  |               |   |               |   | (27.3            | )% |               |   | (0.2                             | )%
|Comparable decline          |  |               |   |               |   | (28.9            | )% |               |   | (2.1                             | )%
|                           
|Operating income            |  | 8.1           |   | 3.1           |   | (5.0             | )  | 5.8           |   | 2.7                              |   
|Actual (decline)/growth     |  |               |   |               |   | (61.7            | )% |               |   | 87.1                             | % 
|Comparable (decline)/growth |  |               |   |               |   | (64.2            | )% |               |   | 80.6                             | % 
|Operating margin            |  | 12.4          | % | 6.5           | % |                  |    | 12.2          | % |                                  |   
|                            |  |              

#### 1999 compared to 1998

Revenues in FTS decreased £17.8 million, or 28.9% at comparable rates,
  in 1999 over 1998. The decrease is largely attributable to the Nigerian pre-shipment
  inspection programmes that were cancelled from March 1999. In September 1999,
  the new government in Nigeria reintroduced inspection programmes but awarded
  us a smaller part of the contract. The new programme started slowly and generated
  revenues of £0.7 million in 1999.

Operating income in FTS decreased £5.0 million or 64.2% at comparable
  rates, in 1999 over 1998. The decrease is largely attributable to the cancelled
  Nigerian pre-shipment inspection programmes. Following the cessation of the
  Nigerian programmes we restructured the FTS division at a cost of £2.6
  million. We reported these costs as exceptional operating costs in our financial
  statements and they are excluded from operating income.

#### 2000 compared to 1999

Revenues in FTS decreased £0.1 million, or 2.1% at comparable rates, in
  2000 over 1999. New programmes in Nigeria, Georgia and Bangladesh all contributed
  to revenues in 2000, and existing programmes in Saudi Arabia, Ecuador and Mozambique
  also performed well. The decrease in revenues was attributable to the disposal
  of the technical services operation and the cessation of programmes in Ghana
  and Colombia.

In 2000, FTS sold its technical services operation in the United States for
  its net asset value of £1.0 million. This was a non-core business which
  generated revenues of £0.7 million to the date of disposal in 2000, (1999:
  £4.3 million and 1998: £6.7 million) and no profit in 2000 or 1999
  (1998: £0.2 million).

Operating income in FTS increased £2.7 million or 80.6% at comparable
  rates, in 2000 over 1999. New programmes in Nigeria and Bangladesh performed
  well. Growth in operating income was reduced by ceased contracts in Ghana and
  Colombia.

We were awarded half of a new two-year pre-shipment inspection programme in
  Kenya in January 2001. The Ugandan programme, which was expected to end in March
  2001, has been extended until after the government elections in April 2001.

-35-

---





#### Central overheads

Central overheads comprise the costs of our corporate head office in London,
  our tax and human resources team in the United States and costs associated with
  non-trading holding companies. Principally these costs comprise salaries, property
  rental, travel, and legal and professional fees.

Overheads decreased by £0.5 million or 11.4% at comparable rates, to £3.9
  million in 1999 over 1998. In 1998, we expanded the central management team.
  In particular, we hired a Chief Operating Officer, who subsequently left and
  has not been replaced.

Overheads increased by £1.3 million or 30.8% at comparable rates, to £5.2
  million in 2000 over 1999. This was primarily due to our expansion of our internal
  audit team and increased expenditure on internal control compliance and e-commerce.

#### Discontinued operations

#### Bondar Clegg

Despite extensive restructuring in 1999, the operating results from our minerals
  testing division, Bondar Clegg, continued to be unsatisfactory and operations
  in this division ceased at the beginning of 2000. The Bondar Clegg businesses
  in North and South America, Ghana and Mali were sold for £1.5 million and
  the operations in Eritrea, Guinea and Burkina Faso were closed. The disposal
  of fixed assets and inventory in the African operations generated proceeds of
  approximately £0.2 million. The Bondar Clegg head office in Vancouver was
  closed in March 2000 and the employment of its personnel was terminated. The
  operating results for Bondar Clegg up to the date of cessation are reported
  as discontinued in our financial statements and prior periods have been reclassified
  to show a comparable historic trend.

The division generated revenues of £0.7 million to the date of closure
  in 2000 (1999: £11.3 million and 1998: £16.5 million) and an operating
  loss of £0.7 million to the date of closure in 2000 (1999: £(2.1)
  million and 1998: £(0.1) million).

#### Environmental Testing

We sold our Environmental Testing division in August 1998 for £1.9 million.
  The division generated revenues of £5.5 million and an operating loss of
  £2.6 million to the date of sale in 1998.

#### Effects of U.S. GAAP adjustments on operating income

As described in note 30 to the consolidated financial statements, our operating
  results would be different under U.S. GAAP. The primary U.S. GAAP adjustment affecting
  our operating results was goodwill amortisation. Under U.S. GAAP the following
  amounts would be deducted from operating income.

|Adjustments to continuing operating income      |  | 1998
      £m |   | 1999
      £m |   | 2000
      £m |  
|----------------------------------------------- |  | ------------- | - | ------------- | - | ------------- | -
|                                                |  |               |  
|Caleb Brett                                     |  | (9.6          | ) | (7.7          | ) | (4.5          | )
|ETL SEMKO                                       |  | (10.0         | ) | (9.2          | ) | (5.3          | )
|Labtest                                         |  | (2.0          | ) | (1.3          | ) | (1.2          | )
|Foreign Trade Standards                         |  | (1.5          | ) | (1.5          | ) | (0.4          | )
|Central overheads                               |  | (0.3          | ) | (0.3          | ) | (0.3          | )
|                                                |  |              
|Total adjustment to continuing operating income |  | (23.4         | ) | (20.0         | ) | (11.7         | )
|                                                |  |              

-36-

---





#### Financial condition and liquidity

At December 31, 2000 we had cash of £21.3 million compared to £20.2
  million at December 31, 1999.

Net cash inflow from operating activities includes operating income after operating
  exceptionals, before depreciation and other non-cash items, as well as working
  capital movements. Our net cash inflow from operating activities increased by
  £12.1 million to £71.9 million in 2000 over 1999. Operating income
  increased by £7.0 million in 2000 over 1999 and this resulted in improved
  cash inflow. We received £12.2 million from the Nigerian government in
  2000 and provided £2.6 million against invoices compared to £21.6
  million cash received in 1999 and £8.5 million provision. Receipts from
  exporters, which will only be repaid once we receive cash from the government,
  cover the remaining debt of £4.8 million. We anticipate the debt being
  cleared in 2001.

In 2000, we spent £3.5 million (1999: £5.4 million) on legal costs
  in connection with an Environmental Protection Agency investigation in Richardson,
  Texas. Until this investigation is concluded we will continue to incur legal
  costs, and we anticipate spending a further £5.8 million. We also spent
  £1.0 million on legal fees in 2000 (1999: £0.5 million) in connection
  with the two Environmental Protection Agency investigations in Linden, New Jersey
  and Puerto Rico. Subject to final sentencing by the court, we have agreed to
  settle the Linden investigation by paying a fine of £0.7 million. We expect
  to pay this in 2001. We also anticipate additional legal costs in connection
  with the ongoing investigation in Puerto Rico. We have provided £1.0 million
  in 2000 to be spent in 2001. The outcome of the investigations in Richardson
  and Puerto Rico is uncertain, and we are unable to estimate and provide for
  any potential settlement. The length of time it will take to conclude these
  investigations is also uncertain, and we may incur additional legal costs.

We spent £26.4 million on tangible fixed assets in 2000 compared to £17.7
  million in 1999. This was mostly expenditure on laboratory and computer equipment.
  In order to service the BP outsourcing agreement we spent £3.6 million
  on establishing a new Caleb Brett laboratory in the United Kingdom. We also
  spent £1.0 million upgrading the testing facilities of the radio communications
  testing business that we acquired in 2000. We bought two electrical testing
  chambers in ETL SEMKO in the United States at a total cost of £2.2 million.
  We also started the installation of an Oracle computer system in ETL SEMKO in
  the United States. This cost £0.8 million in 2000 and is expected to cost
  £2.1 million in 2001. We plan to open a number of new laboratories in 2001
  but none are expected to cost more than £0.7 million. We will also continue
  to upgrade computer systems in the group.

We acquired eight small businesses in 2000 for total consideration of £2.4
  million. We paid £1.9 million in 2000 with the balance due in future years.
  We paid £0.1 million in 2000 for acquisitions made in prior years. In 1999
  we spent £8.3 million on acquisitions. In 2000, we received net proceeds
  of £1.5 million for the disposal of Bondar Clegg and a further £0.3
  million is due in 2001. We also spent £1.1 million in termination and closure
  costs in connection with the cessation of Bondar Clegg. We received £1.0
  million for the disposal of other non-core businesses in 2000.

At December 31, 2000, our total borrowings were £330.9 million (1999:
  £303.7 million) less unamortised debt issuance costs of £8.5 million
  (1999: £10.0 million). A detailed description of our borrowings is given
  in note 15 of our consolidated financial statements.

Apart from the Revolving Credit Facility, our borrowings are denominated in
  currencies other than sterling, and are therefore affected by exchange rate
  fluctuations. Our total borrowings increased by £27.2 million in 2000 and
  £24.6 million of the increase was due to currency translation. Our Parent
  Subordinated PIK Debentures, which are denominated in US dollars, increased
  by £17.4 million in 2000 (1999: £10.9 million). This was due to the
  issue of new debentures each quarter, in lieu of total interest payments of
  £9.9 million (1999: £8.2 million) and currency translation of £7.5
  million (1999: £2.7 million). In 2000, we made scheduled repayments of
  £6.3 million (1999: £5.5 million) of our Senior Term A Loans and repaid
  £0.5 million of other loans. At December 31, 2000 we had drawn £10.0
  million of our revolving credit facility leaving £17.4 million available.
  We have utilised a further £3.5 million to date in 2001. There were no
  scheduled repayments of the Senior Subordinated Notes or Senior Term B Loans
  in 2000.

In 2000, we paid interest and finance charges of £23.5 million (1999:
  £22.4 million) on our borrowings and received interest of £0.5 million
  (1999: £0.7 million) on bank balances. These figures exclude interest relating
  to the Parent Subordinated PIK Debentures, which was funded by further issues
  of debentures.

-37-

---





We paid dividends of £3.4 million to minority shareholders in 2000 compared
  to £2.1 million in 1999.

We anticipate that available cash, cash flows from operations and borrowing
  availability under our Revolving Credit Facility will be sufficient to satisfy
  our working capital and capital expenditure requirements for the foreseeable
  future. We are committed to spending £0.8 million in 2001 to complete the
  setting up of new laboratories commenced in 2000 and we have sufficient cash
  available to meet those commitments. To the extent that we should desire to
  increase our financial flexibility and capital resources or choose or be required
  to fund future capital or other commitments from sources other than operating
  cash or from borrowings under our existing credit facility, we may consider
  raising additional capital by increasing the credit facility or through the
  raising of additional equity. There can be no assurance, however, that additional
  capital will be available to us on acceptable terms, if at all.

Our ability to meet our debt repayments in the longer term will depend upon
  the achievement of our business plan. There can be no assurance that we will
  generate sufficient cash flow from operations or that future working capital
  will be available in an amount sufficient to enable us to service our indebtedness,
  or make necessary capital expenditures.

In order to purchase the business from Inchcape plc, we raised finance in the
  form of Senior Subordinated Notes, Senior Term Loans and Parent Subordinated
  PIK Debentures. See note 15 of our financial statements. Subject to the provisions
  under which these Loans were made, and subject to certain exceptions and applicable
  law, there are no restrictions on the ability of: (a) the Company or any of
  its direct and indirect subsidiaries from paying dividends or making any other
  distributions or loans or advances to Intertek Finance plc or (b) the direct
  and indirect subsidiaries of the Company from paying dividends or making any
  other distributions or loans or advances to the Company.

#### New Accounting Standards

#### UK Accounting Standards

Financial Reporting Standard 17: Pensions and Financial Reporting Standard
  19: Deferred tax have been issued but are not effective until accounting periods
  ending on or after June 22, 2001 and January 23, 2002, respectively. Management
  has not yet determined the effect of these new standards.

#### US Accounting Standards

Statement of Financial Accounting Standards (SFAS) 133, Accounting
  for Derivative Instruments and Hedging Activities, as amended by SFAS 137, Accounting
  for Derivative Instruments and Hedging Activities  Deferral of the Effective
  Date of FASB Statement No. 133, and SFAS 138, Accounting for Certain Derivative
  Instruments and Certain Hedging Activities, is effective for the Group as of
  January 1, 2001. SFAS 133 requires that an entity recognize all derivatives
  as either assets or liabilities measured at fair value. The accounting for changes
  in the fair value of a derivative depends on the use of the derivative. Derivatives
  that are not designated as part of a hedging relationship must be adjusted to
  fair value through income. If the derivative is a hedge, depending on the nature
  of the hedge, the effective portion of the hedges change in fair value
  is either (1) offset against the change in fair value of the hedged asset, liability
  or firm commitment through income or (2) held in equity until the hedged item
  is recognized in income. The ineffective portion of a hedges change in
  fair value is immediately recognized in income. Adoption of these new accounting
  standards will result in cumulative after-tax reductions in other comprehensive
  income on a U.S. GAAP basis of approximately £0.4 million in the first quarter
  of fiscal 2001. The adoption will also impact assets and liabilities recorded
  on the balance sheet on a U.S. GAAP basis.

#### European Monetary Union  Euro

On January 1, 1999, eleven of the European Union member states, including seven
  countries in which we operate, established fixed conversion rates between their
  existing currencies and adopted one common currency, the Euro. The conversion
  to the Euro eliminates currency exchange rate risk among the eleven member countries.

The currencies of the eleven member states remain legal tender in the participating
  countries during a three-year transition period from January 1, 1999 through
  January 1, 2002. Effective January 1, 1999, the Euro is traded on currency exchanges
  and is available for non-cash transactions during the three-year transitional
  period. Beginning on January 1, 2002, the European Central Bank will issue Euro-denominated
  bills and coins for use in cash

-38-

---





transactions. On or before July 1, 2002, the participating countries will withdraw
  all bills and coins and use the Euro as their legal currency.

Our operating units affected by the Euro have established plans to address
  the issues raised by the conversion. These issues, among others, include such
  matters as pricing, continuity of contracts, accounting and financial reporting,
  taxation, treasury activities and computer systems. A number of our operating
  units in France and Portugal have converted their systems and began reporting
  in Euros during 2000. We anticipate that the remaining operating units will
  convert their local records to the Euro during the three-year transition period.

Although we have not identified any immediate problems, we cannot be certain
  that the harmonisation of currencies in Europe will not have a material adverse
  impact on the operating results, financial position or liquidity of our European
  businesses.

-39-

---





#### Item 6: Directors, Senior Management and Employees

#### Directors and senior management

#### Directors of the Company

We set out below the names, ages and positions of the directors of the Company
  at March 12, 2001.

The Articles of Association of the Company confer on Charterhouse the right
  to appoint two non-executive directors (one as deputy chairman) of the Company,
  so long as any person who has funds managed by Charterhouse, or any member of
  Charterhouses wholly-owned group, holds shares in the Company. If Charterhouses
  right lapses it is exercisable by holders of a majority of the A Shares. Charter
  Intertek LLC also has a right to appoint a non-executive director while it is
  a shareholder in the Company. If this right lapses it is exercisable by the
  holders of a majority of the A Shares. The holders of a majority of the A Shares
  have a right to appoint one non-executive director.

| | Name            |  | Age |  | Position                                         
| | --------------- |  | --- |  | -------------------------------------------------
| | Richard Nelson  |  | 58  |  | Executive Chairman                               
| | William Spencer |  | 41  |  | Senior Vice President and Chief Financial Officer
| | Stuart Simpson  |  | 44  |  | Non-executive Director                           
| | Simon Drury     |  | 43  |  | Non-executive Director                           
| | Vanni Treves    |  | 60  |  | Non-executive Director                           

Richard Nelson became a director and executive chairman of the Company
  in 1996. Prior to the Acquisition, Mr. Nelson had been the President and Chief
  Executive Officer of Inchcape Testing Services Limited since 1987. Prior to
  this, he was a director of Transcontinental Services from 1972 and Chief Executive
  from 1982 to the date of its acquisition by Inchcape in 1984. Mr. Nelson was
  retained as Chief Executive of Transcontinental by Inchcape and was nominated
  to the same position in 1987 when Inchcape combined Transcontinental with its
  consumer goods testing and minerals testing businesses to form ITS. He was educated
  at Rugby School and Sorbonne University. He qualified as a Chartered Accountant
  and then attended the London Business School, where he graduated in 1969 with
  a Master of Science in Economics.

William Spencerbecame a director of the Company in 1996. Mr. Spencer
  joined the Group in 1992 and was appointed Finance Director of Inchcape Testing
  Services LTD in 1995 after serving as Chief Financial Officer of Caleb Brett
  for Europe and Asia. Prior to joining us, he worked for Olivetti, Rexam and
  Centrica in various financial positions. He was educated at the University of
  Manchester Institute of Science and Technology, where he graduated with a Bachelor
  of Science with honors in Management Science. He qualified as a Chartered Management
  Accountant in 1985 and as a Corporate Treasurer in 1989.

Stuart Simpsonbecame a non-executive director of the Company in 1996.
  Mr. Simpson earned a Masters in Business from the London Business School and
  is also a Chartered Engineer. He worked in civil engineering project management
  for five years before joining 3i, the UK venture capital house. He joined Charterhouse
  in 1985 and became a director in 1988. He has been responsible for many investments
  in large management buyout and development capital transactions.

Simon Drurybecame a non-executive director of the Company in 1998.
  Mr. Drury earned a Masters in Business from Cranfield University. He worked
  as a senior engineer in the Chemical industry for 7 years before joining CIN
  Industrial Investments as an Investment Manager. He joined Charterhouse in 1988
  and became a director in 1994.

Vanni Trevesbecame a non-executive director of the Company in January
  2001. Mr. Treves was educated at University College, Oxford and the University
  of Illinois. He has been a partner of Macfarlanes Solicitors since 1970 during
  which time he also served as Senior Partner. Mr. Treves serves as non-executive
  director for a number of other institutions, including Chairman of Equitable
  Life, London Business School and Channel Four Television Corporation.

-40-

---





#### Other senior management

We
set out below the names, ages and positions of our key employees at March 12,
2001.

| | Name              |  | Age |  | Position                                   
| | ----------------- |  | --- |  | -------------------------------------------
|
| | Raymond Kong      |  | 53  |  | Executive Vice President                   
| | Robert Dilworth   |  | 39  |  | Vice President                             
| | Gosta Fredriksson |  | 54  |  | Vice President                             
| | John Hannaway     |  | 46  |  | Vice President                             
| | John Hodson       |  | 39  |  | Vice President                             
| | Bernard Leroy     |  | 50  |  | Vice President                             
| | Albert Lo         |  | 48  |  | Vice President                             
| | Mark Loughead     |  | 41  |  | Vice President                             
| | Nigel Lucas       |  | 43  |  | Vice President                             
| | Jag Sisodia       |  | 49  |  | Vice President                             
| | Henry Yeung       |  | 43  |  | Vice President                             
| | Brian Pitzer      |  | 48  |  | Vice President and Human Resources Director
| | Aston Swift       |  | 31  |  | Treasurer                                  
| | David Turner      |  | 40  |  | Secretary                                  

Raymond Kong became an Executive Vice President in January 1998
and is the Chief Operating Officer of Labtest. He was one of the founders of the
Labtest division and has been with us for 25 years. Mr. Kong was responsible for
creating the global Labtest networks and service diversification. He was appointed
Regional Director responsible for Quality Systems East in 1991. He also serves
on a number of advisory committees for The Government of The Hong Kong Special
Administrative Region.

Robert Dilworth was promoted to Vice President
in January 2000 with responsibility for the FTS division globally. Mr. Dilworth
joined us in 1979 as a chemist with Caleb Brett. He was appointed manager of Environmental
services in the UK in 1988 and further promoted to General Manager, Environmental,
Europe, Africa and Middle East in 1994. After a break of service from September
1997 to September 1998 when he worked for BSI, he rejoined us as Director of Government
Standards Contracts.

Gösta Fredriksson became Vice President
in January 1998 with responsibility for ETL SEMKO in Europe and Asia. Mr. Fredriksson
was head of Safety Testing in Semko when we acquired it in 1994. He joined Semko
in 1962. He has participated in the development of European certificate schemes
such as CCA, Key-mark, LOVAG, IECEE-CCB and CCB-FCS.

John Hannaway
became Vice President in January 1998 with responsibility for Caleb Brett in Asia.
He joined us in 1992 as Marketing Manager of Caleb Brett Australia and became
General Manager in 1993. Prior to joining the Group, Mr. Hannaway spent three
years as divisional manager for SGS Redwood Australia.

John Hodson
became Vice President in January 1998 with responsibility for Caleb Brett in the
Americas. Mr. Hodson joined the Group in 1986 as Regional Manager in West Africa,
and having spent time working in the U.K., Dubai and Singapore, was promoted to
Vice President of Caleb Brett Asia in 1995. He moved to Houston to run operations
in the Americas in 1998. Prior to joining us, Mr. Hodson spent four years with
Core Laboratories in West Africa, establishing laboratory testing facilities for
the oil exploration sector.

Bernard Leroy became Vice President in January 2000 with responsibility
  for Labtest in Europe, Middle East and Africa. He joined us in 1992 as General
  Manager of ITS Labtest France. Prior to joining us, Mr. Leroy worked as head
  of the Physica chemical laboratory then, Quality Assurance manager at Upjohn
  CO. and founded Sigma Controle, a French leader in Inspection and Technical
  services to retailers. We acquired Sigma Controle in 1992. Mr. Leroy was educated
  at the University of Paris, where he obtained a Master of Sciences in Biochemistry
  and a degree in Applied Statistics.

-41-

---





Albert Lobecame Vice President in January 1998 with responsibility
  for Labtest in South East Asia and Textile testing in China. Mr. Lo joined us
  in 1988 as head of the textile laboratory in Hong Kong. Mr. Lo was educated
  at the University of Leeds in the U.K. for a Master of Science. Before joining
  us, Mr. Lo had worked in quality assurance for a buying office based in the
  Asia Pacific region.

Mark Loughead became Vice President in January 1998 with responsibility
  for Caleb Brett in Europe, Africa and the Middle East. Mr. Loughead joined us
  in 1988 as Operations Manager of Caleb Brett in Aberdeen. He was promoted to
  his present position following a period as Scottish Regional Manager. Prior
  to joining us, Mr. Loughead spent 13 years at Inspectorate including six years
  in the Middle East.

Nigel Lucas
became Vice President in November 2000 with responsibility for Compliance. Mr.
Lucas joined us in 1980 as a Chemist/Surveyor in the Caleb Brett division. He
became head of Quality Assurance in Caleb Brett in 1986 and became General Manager
in charge of its UK upstream and downstream inspection and testing activities
in 1989. From 1997, he was responsible for global inspection and certificate issuance
in the FTS division. Mr. Lucas was educated at Hull University and earned a Masters
in Business from Warwick University. Before joining us, he was a deck officer
with Blue Star Ship Management.

Jag Sisodia became Vice President
in January 1998 with responsibility for ETL SEMKO in the Americas. Mr. Sisodia
joined us in 1987 as Chief Financial Officer of the FTS division, after which
he became Chief Financial Officer of the business he is presently running. Prior
to joining us, Mr. Sisodia had accounting positions in MCI Communications, Laventhal
& Horwath, and Seidman & Seidman. He holds a Bachelor of Arts and a Masters
in Business Administration from The American University, Washington DC and is
a Maryland Certified Public Accountant.

Henry Yeung became Vice President
in January 1998 and currently has responsibility for Labtest Americas. Mr. Yeung
joined us in 1977 and has worked in Hong Kong, Taiwan and China. Mr. Yeung is
a Chartered Colourist, a Fellow of the Society of Dyers and Colourist and a Licentiate
of the Textile Institute. He has a Masters in Business Administration from the
University of East Asia and a Master of Science from the University of Warwick.

Brian
Pitzer became Vice President and Human Resources Director in January 1998.
Mr. Pitzer joined us in March 1990 and developed the human resources function
in the Americas region. He also addressed the human resources issues of acquisitions
and organic growth in the region through the mid 1990s. He is responsible
for worldwide human resource programs. Prior to joining us, he spent 14 years
at NCR Corporation in a variety of management positions in both field and corporate
settings.

Aston Swiftbecame Treasurer in June 1999 after serving
as Chief Financial Officer of the Foreign Trade Standards division since 1998.
Prior to joining us, Mr. Swift worked in internal audit at BSkyB after qualifying
in 1994 as a Chartered Accountant. Mr. Swift holds a degree in Chemistry from
Oxford University.

David Turner joined us as Company Secretary in
September 1997. He is responsibile for company secretarial and legal matters.
Before joining us, he was Assistant Company Secretary of The Mercantile and General
Reinsurance Company for 7 years. Mr. Turner graduated from Reading University
in 1981 with a Bachelor of Science (Honours) degree and has been a Chartered Secretary
since 1991.

#### Compensation

In 2000, we paid approximately £0.8
million to our four directors who held office during the year, which included
contributions made to their pension plans of approximately £0.1 million.
For the year ended December 31, 2000, our highest paid director received approximately
£0.5 million and pension plan contributions of approximately £0.1 million.
We pay the employers of our non-executive directors for the services of each non-executive
director. We do not pay our executive directors for serving as directors.

We
paid approximately £2.2 million to our 14 key officers, excluding our directors,
for the year ended December 31, 2000 which included contributions made to their
pension plans of approximately £0.2

-42-

---





million. Key officers are also
entitled to receive annual bonuses of up to 50% of their base salary on
achieving certain financial targets.

#### Board Practices

Article 106 of the Articles
of Association of the Company sets out the rules governing the appointment and
retirement of our directors. Once appointed, a Director remains in office,
subject to Companies Act requirements, until they resign or are removed under
the terms of the Articles. There is no provision for retirement by rotation.
None of our directors or key officers have service contracts which require more
than twelve months notice, or are entitled to more than twelve months
remuneration in lieu of notice.

#### Audit Committee

The members of our Audit Committee are Messrs. Simpson, Drury and Treves, all
of whom are non-executive directors. The Committee meets at least three times a
year and the Chief Financial Officer, Vice President of Compliance, Internal
Auditors and External Auditors are invited to attend. The main duties of the
Audit Committee are to ensure that the financial performance of the Group is
properly monitored and reported on, to review the financial statements, to
monitor internal control systems and to make recommendations to the Board
concerning the appointment and remuneration of the auditors.

#### Remuneration Committee

The members of our Remuneration Committee are Messrs. Simpson
and Drury, both of whom are nonexecutive directors. The Committee meets at
least twice a year and the Executive Chairman and Human Resource Director are
invited to attend. The Committees responsibilities include consideration
of service agreements, approval of remuneration for all employees earning more
than £60,000 per annum (or local currency equivalent), and the operation of
our Share Option Scheme.

#### Employees

The table below shows the number of full-time employees in each division for
1998, 1999 and 2000.

|Employees by division   |  | 1998
      Number |  | 1999
      Number |  | 2000
      Number
|----------------------- |  | ----------------- |  | ----------------- |  | -----------------
|                        |  |                  
|Caleb Brett             |  | 3,683             |  | 3,999             |  | 4,587            
|ETL SEMKO               |  | 1,298             |  | 1,425             |  | 1,594            
|Labtest                 |  | 1,971             |  | 2,272             |  | 2,605            
|Foreign Trade Standards |  | 1,262             |  | 909               |  | 749              
|Central                 |  | 28                |  | 29                |  | 33               
|                        | 
|Continuing operations   |  | 8,242             |  | 8,634             |  | 9,568            
|Discontinued operations |  | 1,067             |  | 809               |  |                 
|                        | 
|Total                   |  | 9,309             |  | 9,443             |  | 9,568            
|                        |  |                  

Following the cancellation of the Nigerian pre-shipment inspection
programme in 1999, we restructured the FTS division and reduced the number of
employees. In 2000, we sold the Technical Services division of FTS which further
reduced employee numbers.

-43-

---





The table below shows the number of full time employees in each geographic
area for 1998, 1999 and 2000.

|Employees by geographic area   |  | 1998
      Number |  | 1999
      Number |  | 2000
      Number
|------------------------------ |  | ----------------- |  | ----------------- |  | -----------------
|                               |  |                  
|Americas                       |  | 2,868             |  | 2,805             |  | 2,856            
|Europe, Africa and Middle East |  | 2,540             |  | 2,683             |  | 2,816            
|Asia and Far East              |  | 2,834             |  | 3,146             |  | 3,896            
|                               | 
|Continuing operations          |  | 8,242             |  | 8,634             |  | 9,568            
|Discontinued operations        |  | 1,067             |  | 809               |  |                 
|                               | 
|Total                          |  | 9,309             |  | 9,443             |  | 9,568            
|                               | 

We increased our employee headcount by 392 or 4.8% in 1999 over 1998,
principally in Asia due to expansion in Labtest and ETL SEMKO. In 2000 we increased
our headcount by 934 or 10.8% to 9,568. Again, the largest increase was in Asia,
particularly in China where both Labtest and ETL SEMKO extended their operations.

We
have to comply with various labour laws throughout the world. To date, compliance
with such laws has not been a material burden for us. A small number of employees
are members of trade unions and works councils. There are a few collective labour
agreements, principally in the Netherlands and Belgium, which are renegotiated
from time to time. We consider our relationship with our employees to be good
and have never experienced a significant labour dispute, strike or stoppage.

#### Share
ownership

Our directors and their immediate families and senior management
who held Shares in the Company as of March 12, 2001 are shown below:

|                  |  | Number of
        Ordinary  A
        Shares |  | % of total
        shares
        outstanding
        in that class |  | Number of
        Preference
        Shares
|----------------- |  | ---------------------------------------------- |  | ------------------------------------------------------------------- |  | -------------------------------------------
|                 
|Simon Drury       |  | 89,072                                         |  | 0.13%                                                               |  | 1,621(1)                                   
|Stuart Simpson    |  | 122,071                                        |  | 0.18%                                                               |  | 2,448(1)                                   
|                 
|                  |  | Number of
        Ordinary  B
        Shares |  |                                                                     |  |                                            
|                 
|Richard Nelson    |  | 3,632,514                                      |  | 31.37%                                                              |  |                                            
|William Spencer   |  | 993,201                                        |  | 8.58%                                                               |  |                                            
|Senior Management |  | 4,569,136                                      |  | 39.46%                                                              |  |                                            



|(1) | Number of Preference
shares held is less than 1% of the total Preference Shares outstanding.
|--- | --------------------------------------------------------------------------------------------

-44-

---





#### Share Option Scheme

On March 1, 1997, we adopted a Share Option Scheme for senior management to
encourage their participation in our future growth.

The following table
shows options for C Shares in the Company outstanding at March 12, 2001.

|Number of options
      outstanding |  | Subscription
        price per share |  | Exercisable between
|----------------------------------- |  | ------------------------------------ |  | -------------------
|                                   
|1,748,883                           |  | 10p                                  |  | March 1, 2000      
|11,806                              |  | 10p                                  |  | September 1, 2000  
|276,830                             |  | 10p                                  |  | December 31, 2000  
|35,418                              |  | 10p                                  |  | June 1, 2001       
|70,834                              |  | 10p                                  |  | December 31, 2001  
|100,351                             |  | 10p                                  |  | June 1, 2002       
|47,224                              |  | 10p                                  |  | December 31, 2002  
|88,543                              |  | 10p                                  |  | March 31, 2003     
|407,305                             |  | 140p                                 |  | December 31, 2003  

At March 12, 2001, none of our directors held any options to subscribe
for Ordinary Shares of the Company. At that date, key officers held 513,539 options
to subscribe for C Shares of the Company representing 0.6% of the equity on a
fully diluted basis.

#### Item 7: Major Shareholders and Related Party Transactions

#### Major
shareholders

At March 12, 2001, the share capital of the Company (the Ordinary
Shares) was divided into 69,172,061 Ordinary A Shares of 1 pence each (the
A shares), 11,578,635 Ordinary B Shares of 1 pence each (the B
Shares), 2,951,417 Ordinary C Shares of 1 pence each (the C Shares),
and 7,110,713 Ordinary D Shares of 1 pence each (the D Shares). 69,172,061
of the A Shares and 11,578,635 of the B Shares have been allotted, called up,
fully paid and outstanding. None of the C Shares and D Shares have been issued.
In addition, the Company has 105,478,482 Zero Coupon Redeemable Preference Shares
of £1 each (the Preference Shares), all of which have been allotted,
called up, fully paid and outstanding.

#### Ordinary Shares

The A Shares,
B Shares, C Shares and D Shares rank equally in all respects except that: (i)
the holders of A Shares and D Shares have a right in the event of a winding-up
to receive the subscription price of those shares in preference to the holders
of B Shares and C Shares, but rank equally with the holders of B Shares and C
Shares in the event of a distribution of any surplus assets available after repayment
to the holders of B Shares and C Shares of the subscription price on those shares;
(ii) the C Shares confer no right to receive notice of, attend or vote at general
meetings of the Company; and (iii) the D Shares confer on the holders the right
to receive notice of and to attend, but not to vote at, general meetings of the
Company.

-45-

---





Shareholders who hold more than 5% of the Ordinary Shares in the Company and
the holdings of Former Directors and Officers as of March 12, 2001 are shown in
the table below:

|Name                                      |  | Number of
      A Shares Held |  | Number of
      B Shares Held |  | % of Total
      Share
      Capital (a)
|----------------------------------------- |  | ----------------------------- |  | ----------------------------- |  | ----------------------------------------
|                                         
|Charterhouse General Partners Limited (b) |  | 30,251,608                    |  |                              |  | 37.46                                   
|                                         
|Charter Intertek LLC (b)                  |  | 11,344,281                    |  |                              |  | 14.05                                   
|                                         
|Abu Dhabi Investment Authority            |  | 6,001,169                     |  |                              |  | 7.43                                    
|                                         
|Directors and Officers as a group         |  | 211,143                       |  | 9,194,851                     |  | 11.65                                   
|                                         
|Former Directors and Officers as a group  |  |                              |  | 2,383,784                     |  | 2.95                                    
|                                         
|                                          | 
|                                          |  | 47,808,201                    |  | 11,578,635                    |  | 73.54                                   
|                                          | 

(a) This table does not reflect the issuance of C Shares (which are reserved for issue
to employees) upon the exercise of options granted to management or the issuance of D
Shares upon the exercise of the Warrants issued to certain financial institutions,
including BT Investment Partners, Inc., in connection with their purchase of the Parent
Subordinated PIK Debentures. Upon the exercise of the share options, and the Warrants,
directors and officers as a group will own 14.21% and the Warrant holders as a group will
own 13.93% of the fully diluted ordinary shares of the Parent. See Warrants below.

In addition, the table does not
reflect the issuance of 105,478,482 Preference Shares of the Parent purchased
by Charterhouse and other financial institutions as described below.

(b) Charterhouse General Partners Limited is a wholly owned subsidiary of Charterhouse
Development Capital Holdings Limited, which is the sole owner of Charterhouse Development
Capital Limited.

Other wholly owned subsidiaries and managed
funds of Charterhouse Development Capital Holdings Limited as a group own 45.18%
of the total issued share capital.

A substantial portion of the membership
interests in Charter Intertek LLC are owned by Charterhouse Equity Partners II,
L.P. The general partner of Charterhouse Equity Partners II, L.P. is CHUSA Equity
Investors II, L.P., whose general partner is Charterhouse Equity II, Inc., a wholly-owned
subsidiary of Charterhouse Group International, Inc.

#### Zero Coupon Redeemable
Preference Shares

On a return of capital on a winding up, the Preference
Shares rank senior to the Ordinary Shares of the Company, but not otherwise. No
dividends are payable on the Preference Shares. The Preference Shares will be
mandatorily redeemed on November 8, 2009. The Company is required upon the written
request from holders of 30% or more of the Preference Shares to redeem all of
those shares in issue from any source of funds legally available for that purpose.
No redemption, however, may be made to the extent prohibited by the terms of certain
credit agreements, bonds and debentures to which we are subject, and which contain
prohibitions or restrictions on redemptions. Holders of Preference Shares are
entitled to receive notice of but not attend and vote at general meetings, except
that they can attend and vote on any resolution regarding the winding-up of the
Company, a reduction in the Companys capital or on modification of the rights
and restrictions attached to the Preference Shares.

-46-

---





#### Warrants

The Warrants acquired in connection with the purchase by certain financial
institutions, including BT Investment Partners, Inc., of Parent Subordinated PIK
Debentures confer the right to subscribe to 7.83% of the fully diluted ordinary
share capital of the Company. The Warrants will be exercisable only upon sale in
connection with the acquisition by a person (other than a person who has funds
managed by Charterhouse or any other member of Charterhouses wholly-owned
group) of more than 50% of the Ordinary Shares of the Company (calculated
excluding Ordinary Shares underlying the Warrants) or the unconditional granting
of permission for any of the Ordinary Shares of the Company to be dealt in on
any recognised investment exchange.

#### Shareholders Agreement

The Company and the holders of A Shares, B Shares and Preference
Shares are parties to a Subscription and Shareholders Agreement (the
Shareholders Agreement). The Shareholders Agreement
provides that, among other things, without Institutional consent, the Company or
its subsidiaries may not take certain actions, including: (i) any amendment to
the memorandum or articles of association of the Company or its subsidiaries;
(ii) any variation in the authorised or issued share capital (or the rights
attaching to it or any class of it) of the Company or its subsidiaries or the
creation of any options or other rights to subscribe for or to convert into
shares in such a company or the purchase (by the Company or its subsidiaries) of
any shares in the capital of such a company; (iii) the declaration or
distribution of any dividend or other payment out of the distributable profits
or reserves of the Company or its subsidiaries or the reduction of any other
reserve of the Company or its subsidiaries; (iv) the transfer of any shares in
the capital of the Company or its subsidiaries; (v) the sale, transfer, leasing,
licensing or disposal by the Company or its subsidiaries (otherwise than in the
normal course of business) of all or a substantial part of its business,
undertaking or assets whether by a single transaction or series of transactions,
related or not; (vi) the entry into negotiations concerning the sale of shares
in the Company or its subsidiaries or of any material part of the business or
assets of the Company or its subsidiaries, the refinancing of the Company or its
subsidiaries, or the making of any application or submission of any business
plan to any person with a view to attracting additional or substitute finance
for the Company or any part of it; (vii) anything which is of a material nature
(in the context of the Group as a whole) and not in the normal course of
business; (viii) the entry into any new borrowing facility (other than the
Credit Agreement) by the Company or its subsidiaries, the variation of the terms
of any borrowing facilities or the issue or redemption of any loan capital and
(ix) certain arrangements with affiliates.

The Company is not directly or indirectly owned or controlled
by any government. We are not aware of any arrangements that might result in a
change of control of the Company.

#### Related party transactions

In connection with our acquisition from Inchcape plc, we are required to pay
a one-off acquisition advisory fee of £3.8 million to Charterhouse. This
has not been paid, but is payable on demand when cash reserves permit.
Charterhouse or funds managed by it may, from time to time, provide financial
advisory services for which it will receive customary fees and expenses.

Except as disclosed above, we have not participated in any material
transaction in which any of our associates, directors, key officers or persons
connected with them, had any direct or indirect interest. We have not given any
loans or guarantees to our associates, directors, key officers or persons
connected with them.

#### Interest of experts and counsel

Not applicable.

-47-

---





#### Item 8: Financial Information

#### Consolidated
Statements and Other Financial Information

Our Consolidated Financial Statements
dated March 22, 2001, are included in Item 19 to this Annual Report.

#### Legal
proceedings

From time to time we are involved in various claims and lawsuits
incidental to the ordinary course of our business, including claims for damages,
negligence and commercial disputes regarding inspection and testing and disputes
from former employees. We are not currently party to any legal proceedings other
than ordinary litigation incidental to the conduct of our business and the investigations
described below. On the basis of currently available information, we consider
that the cost to ITS of an unfavourable outcome, arising from any such ordinary
litigation is unlikely to have a material adverse effect on the financial position
of ITS in the foreseeable future. We hold a professional indemnity insurance policy
that provides coverage for certain claims from customers. We consider this policy
adequate for normal commercial purposes.

#### Investigations by the U.S. Environmental
Protection Agency

Two of our subsidiary corporations are currently involved
in investigations by the U.S. Environmental Protection Agency (EPA). Details
of each investigation are given below:

#### Caleb Brett USA, Inc.  Linden,
New Jersey

In February 1997, Caleb Brett, through its routine quality assurance
and quality control procedures, discovered evidence of false testing results at
the Caleb Brett laboratory in Linden, New Jersey, which involved testing of gasoline
to certain standards set by the EPA.

In September 1999, the Department of
Justice announced that three laboratory supervisors had pleaded guilty to criminal
charges that they participated in a scheme to falsify chemical analyses of gasoline.

In
September 2000, Caleb Brett USA, Inc. pleaded guilty in Federal District Court
in New Jersey to the crime of conspiracy to make false statements to governmental
investigators and agreed to pay a U.S. $1.0 million fine. We made a provision
of £0.7 million for this fine in 2000. The sentencing is scheduled for April
12, 2001 when the final sentence and payment terms will be confirmed. The Court
may accept the agreement with the government or impose a fine of a greater or
lesser amount. Due to the fact that Caleb Brett employees misled federal investigators
about the falsification of data during the investigation, Caleb Brett as a corporation
was prosecuted. Under applicable law, Caleb Brett is responsible for certain acts
of its employees, even though such acts were not committed with the knowledge
or permission of the company.

#### Caleb Brett USA, Inc.  Puerto Rico

Caleb
Brett USA, Inc. has been informed that an investigation is underway by the U.S.
Department of Justice Environmental Crime Section of certain practices at its
Puerto Rico facility. The investigation, which relates to events in 1997 and prior,
is on going and we are unable to predict the outcome or estimate the cost of any
civil or criminal penalties that may arise. However, on the basis of currently
available information, we consider that the costs to ITS of any civil and criminal
penalties, arising from this investigation, that may be legally enforceable, are
unlikely to have a material adverse effect on the financial position of ITS in
the foreseeable future, although we are not able to quantify the cost of any adverse
publicity. We have notified Inchcape plc of the investigation and are pursuing
possible rights of recovery against Inchcape plc under the agreement pursuant
to which Inchcape plc sold our business to us. This event may give rise to a claim
under our group professional indemnity insurance policy and our brokers have been
notified.

-48-

---





#### Intertek Testing Services Environmental
Laboratories, Inc.  Richardson, Texas

In December 1997, Intertek
Testing Services Environmental Laboratories, Inc. (ITS Environmental)
discovered certain discrepancies in reported testing results at its facility in
Richardson, Texas. ITS Environmental promptly reported this discrepancy to the
EPA and to clients. Civil and criminal investigations are under way. A government
investigation at the ITS Environmental facility uncovered further discrepancies
beyond those initially discovered and disclosed by ITS Environmental.

In
August 1998, ITS Environmental sold its laboratory business in Burlington, Vermont,
United States and St. Helens, United Kingdom and stopped commercial operations
at the laboratory in Richardson. These actions resulted in the discontinuation
of business at ITS Environmental. This sale has not relieved ITS Environmental
of any liability it may face as a result of these investigations or otherwise.

After
commercial operations ceased in August 1998, the facility in Richardson, Texas
was used to reprocess the original data used in the reported test results subject
to the government investigation. The reprocessing is complete and the facility
is now closed. ITS Environmental developed what it believed to be an effective
data screening and reprocessing method. The reprocessing effort was aimed at providing
clients with data of known quality. The EPA has advised ITS Environmental that
the reprocessing is not acceptable to the EPA for clean up or compliance purposes.
Nevertheless, ITS Environmental believes that it can establish the scientific
integrity of the reprocessing work, which ITS believes confirms that the original
data was accurate to within normally accepted limits. This has been confirmed
by an independent consultant which specialises in reprocessing of data.

ITS
Environmental continues to co-operate fully with the government investigation.

On
December 9, 1999, a complaint was filed by a customer in federal court in Chicago,
Illinois against Intertek Testing Services Environmental Laboratories, Inc. seeking
declaratory judgement and damages arising from analyses performed between 1991
and 1997. On December 17, 1999, a complaint was filed in state court in Kansas
City, Missouri, against Intertek Testing Services Limited seeking damages from
improper testing and analysis. On December 15, 2000, Intertek Testing Services
Limited was voluntarily dismissed from this case by the plaintiff, without prejudice
to refile the complaint at a later date. On January 12, 2000, a third complaint
was filed in state court in Los Angeles, California, against Intertek Testing
Services Limited and Intertek Testing Services Environmental Laboratories, Inc.
seeking damages arising for improper testing and analysis and alleging fraud.
Intertek Testing Services Limited was voluntarily dismissed from the case without
prejudice to be brought back in as a defendant at a later date. This complaint
has been amended to name Intertek Testing Services NA Inc. and Testing Holdings
Inc., as defendants.

On September 21, 2000, the U.S. Department of Justice
announced that a federal grand jury in Dallas, Texas returned an indictment of
thirty counts against thirteen persons who were formerly employed at Intertek
Testing Services Environmental Laboratories Inc in Richardson, Texas. Charges
against the thirteen persons include conspiracy to commit mail fraud, conspiracy
to present false, fictitious and fraudulent claims against the United States and
wire fraud. The trial date has been set for October 5, 2001. To date, no criminal
charges have been filed against ITS Environmental.

We are unable to predict
the outcome of these actions. However, on the basis of currently available information,
we consider that the costs to ITS of any civil and criminal penalties, arising
from this investigation, that may be legally enforceable, are unlikely to have
a material adverse effect on the financial position of ITS in the foreseeable
future, although we are not able to quantify the cost of any adverse publicity.
We have notified Inchcape plc of the investigation and are pursuing possible rights
of recovery against Inchcape plc under the agreement pursuant to which Inchcape
plc sold our business to us. Our group professional indemnity insurance policy
may respond at least in part, to legal costs, civil damages and third party claims.

#### Dividend
policy

The Company is restricted from paying dividends to shareholders
unless it receives certain consents. The Shareholders Agreement requires
that dividends cannot be paid without Institutional Consent. The Credit

-49-

---





Agreement requires that dividends
be approved by a two third majority by value, of the lending banks. To date, no
dividends have been paid by the Company.

#### Item 9: The Offer and Listing

While
the Notes are listed on the Luxembourg Stock Exchange, there is no active trading
market on that exchange for the Notes.

#### Item 10: Additional Information

#### Memorandum
and articles of association.

Intertek Testing Services Limited is an English
company registered with the Registrar of Companies at Companies House in Cardiff,
United Kingdom and has been assigned company number 3227453. Our registered office
is at 25 Savile Row, London W1S 2ES, United Kingdom. The telephone number at that
location is (44) 20-7396-3400.

The purpose of the Company is to perform
any and all corporate activities permissible under the English Companies Act 1985
and are set forth in detail in Clause 3(1) to 3(13) of the Memorandum of Association
of the Company.

Article 106 of the Articles of Association of the Company
(the Articles) provides that, as long as he has disclosed to the directors
the nature and extent of any material interest of his and, unless an Institutional
Director, obtained Institutional Consent, a director may vote as a director on
any resolution concerning any matter in which he has, directly or indirectly,
an interest or duty. And an interested director shall not, by reason of his office,
be accountable to the Company for any benefit realised through any such contract
or arrangement. No provision is made in the Articles for directors to vote compensation
to themselves or any members of their body under any circumstances. Directors
of the Company are not required to own shares of the Company in order to serve
as directors. Directors are empowered by the Memorandum and Articles to borrow
funds, but that power is effectively limited by the Credit Agreement, the Indenture
of the Notes and the Debentures. Directors are not required by the Articles to
retire on reaching any age.

Rights of holders of shares can only be varied
by passing resolutions with a with a 75% majority at General Meetings of holders
of the share class. The directors may call annual and extraordinary meetings as
they see fit. Shareholders may also requisition a general meeting pursuant to
the provisions of the English Companies Act 1985. Rights of admission and voting
at general meetings attach to each class of share and are described elsewhere
in this Annual Report. Share transfers that would result in a change of control
may not be registered unless an Approved Offer is made. This imposes various requirements
to be met including keeping the offer open for twenty-one days and the offer having
Institutional Consent. Full details are set out in Article 46 of the Articles.

#### Material
contracts

We have not entered into any material contracts other than contracts
entered into in the ordinary course of business, in the past two years.

#### Exchange
controls

There are no limitations under U.K. law, as currently in effect,
on the rights of non-U.K. resident shareholders, by virtue of their non-resident
status, to hold or exercise voting rights attaching to the Ordinary Shares of
the Company.

There are currently no U.K. laws, decrees or regulations that
would affect the transfer of capital or remittance of dividends, interest or other
payments to non-U.K. resident shareholders, except as disclosed below.

-50-

---





#### Taxation

#### CERTAIN UNITED
STATES FEDERAL INCOME TAX CONSEQUENCES

The following summary describes
the material United States federal income tax consequences of the ownership of
Notes. Except where noted, it deals only with Notes held as capital assets by
United States Holders, as defined below, and does not deal with special situations,
such as those of dealers in securities or currencies, traders in securities that
elect to use a mark-to-market method of accounting for their securities holdings,
financial institutions, life insurance companies, tax-exempt entities, persons
holding Notes as a part of a hedging, integrated or conversion transaction, constructive
sale or a straddle or United States Holders of Notes whose functional currency
is not the United States dollar. Furthermore, the discussion below is based upon
the provisions of the Internal Revenue Code of 1986, as amended (the Code),
and regulations, rulings and judicial decisions made under the Code, and such
authorities may be repealed, revoked or modified so as to result in United States
federal income tax consequences different from those discussed below.

If
a partnership holds Notes, the tax treatment of a partner will generally depend
on the status of the partner and the activities of the partnership. Any holder
that is a partner of a partnership holding Notes is urged to consult its own tax
advisor.

A United States Holder of a Note means a holder that
is (i) a citizen or resident of the United States, (ii) a corporation or partnership
created or organised in or under the laws of the United States or any political
subdivision thereof, (iii) an estate the income of which is subject to United
States federal income taxation regardless of its source or (iv) a trust (x) that
is subject to the supervision of a court within the United States and the control
of one or more United States persons as described in section 7701(a)(30) of the
Code or (y) that has a valid election in effect under applicable U.S. Treasury
regulations to be treated as a United States person. A Non-United States
Holder is a holder that is not a United States Holder.

Persons
considering the purchase, ownership or disposition of Notes should consult their
own tax advisors concerning the United States federal income tax consequences
in light of their particular situations as well as any consequences arising under
the laws of any other taxing jurisdiction.

#### Payments of interest

Interest
on a Note will generally be taxable to a United States Holder as ordinary income
at the time it is paid or accrued in accordance with the United States Holders
method of accounting for tax purposes.

It is unclear whether the interest
income on a Note will constitute foreign or United States source income for United
States federal income tax purposes. A United States Holder of a Note should consult
its own tax advisor with respect to the source of such income.

#### Market discount

If
a United States Holder purchases a Note for an amount that is less than its stated
redemption price at maturity, the amount of the difference will be treated as
market discount for United States federal income tax purposes, unless
such difference is less than a specified de minimis amount. Under the market
discount rules, a United States Holder will be required to treat any principal
payment on, or any gain on the sale, exchange, retirement or other disposition,
of a Note as ordinary income to the extent of the market discount which has not
previously been included in income and is treated as having accrued on such Note
at the time of such payment or disposition. In addition, the United States Holder
may be required to defer, until the maturity of the Note or its earlier disposition
in a taxable transaction, the deduction of all or a portion of the interest expense
on any indebtedness incurred or continued to purchase or carry such Note.

Any
market discount will be considered to accrue ratably during the period from the
date of acquisition to the maturity date of the Note, unless the United States
Holder elects to accrue on a constant interest method. A United States Holder
of a Note may elect to include market discount in income currently as it accrues
(on either a ratable or constant interest method), in which case the rule described
above regarding deferral of interest deductions will not apply. This election
to include market discount in income currently, once made, applies to all market
discount obligations acquired on or after the first taxable year to which the
election applies and may not be revoked without the consent of the U.S. Internal
Revenue Service.

-51-

---





Amortizable bond premium

A
United States Holder that purchases a Note for an amount in excess of the sum
of all amounts payable on the Note after the purchase date other than stated interest
will be considered to have purchased the Note at a premium. A United
States Holder generally may elect to amortize the premium over the remaining term
of the Note on a constant yield method as an offset to interest when includible
under the United States Holders regular accounting method.

In the
case of instruments like the Notes that provide for alternative payment schedules,
bond premium is calculated by assuming that (i) the holder will exercise or not
exercise options in a manner that maximises the holders yield and (ii) the
issuer will exercise or not exercise options in a manner that minimises the holders
yield, except with respect to call options for which the issuer is assumed to
exercise such call options in a manner that maximises the holders yield.
Bond premium on a Note held by a United States Holder that does not make such
an election will decrease the gain or increase the loss otherwise recognized on
disposition of the Note.

The election to amortize premium on a constant
yield method once made applies to all debt obligations held or subsequently acquired
by the electing United States Holder on or after the first day of the first taxable
year to which the election applies and may not be revoked without the consent
of the IRS. A United States Holder should consult its own tax advisors before
making this election.

#### Sale, exchange, retirement or other disposition of
the Notes

A United States Holders tax basis in a Note will, in general,
be the United States Holders cost therefor, increased by any market discount
previously included in income by the United States Holder and reduced by any amortized
premium and any cash payments on the Note other than qualified stated interest.
Upon the sale, exchange, retirement or other disposition of a Note, a United States
Holder will recognize gain or loss equal to the difference between the amount
realized upon the sale, exchange, retirement or other disposition (less any accrued
qualified stated interest not previously included in income, which will be taxable
as ordinary interest income) and the adjusted tax basis of the Note. Except as
described above with respect to market discount, such gain or loss will be capital
gain or loss. Capital gains of individuals derived in respect of capital assets
held for more than one year are eligible for reduced rates of taxation. The deductability
of capital losses is subject to limitations.

#### Information reporting and
backup withholding

In general, information reporting requirements will
apply to certain payments of principal, interest and premium paid on Notes and
to the proceeds of sale of a Note made to United States Holders other than certain
exempt recipients (such as corporations). A 31% backup withholding tax will apply
to such payments if the United States Holder fails to provide a taxpayer identification
number or certification of foreign or other exempt status or fails to report in
full dividend and interest income.

Any amounts withheld under the backup
withholding rules will be allowed as a refund or a credit against a United States
Holders United States federal income tax liability provided the required
information is furnished to the IRS.

#### Non-United States Holders

As
stated above, it is unclear whether the interest income on a Note will constitute
foreign or United States source income for United States federal income tax purposes.
Consequently, the Issuer will withhold United States federal income tax at a rate
of 30% on any interest payment made to a Non-United States Holder unless such
interest qualifies as portfolio interest under the Code or is otherwise
exempt from withholding as described below.

Under present United States
federal income and estate tax law, and subject to the discussion below concerning
backup withholding:

(a) no withholding of United States federal income tax
will be required with respect to the payment by the Issuer or any paying agent
of principal or interest of a Note owned by a Non-United States Holder, provided
(i) that the Non-United States Holder does not actually or constructively own
10% or more of the

-52-

---





total combined voting power of
all classes of stock of the Issuer or Testing Holdings USA Inc. entitled to vote
within the meaning of section 871(h)(3) of the Code and the regulations thereunder,
(ii) the Non-United States Holder is not a controlled foreign corporation that
is related to the Issuer or Testing Holdings USA Inc. through stock ownership,
(iii) the Non-United States Holder is not a bank whose receipt of interest on
a Note is described in section 881(c)(3)(A) of the Code and (iv) either (A) the
Non-United States Holder provides its name and address on an IRS Form W-8BEN (or
successor form), and certifies, under penalty of perjury, that it is not a United
States person or (B) if the Non-United States Holder holds its notes through certain
foreign intermediaries or certain foreign partnerships, it satisfies the certification
requirements of applicable United States Treasury regulations. Special certification
rules apply to certain Non-United States Holders that are entities rather than
individuals;

(b) the 30% U.S. federal withholding tax generally will not
apply to any gain that a Non-United States Holder realises on the sale, exchange,
retirement or other disposition of a Note; and

(c) a Note beneficially owned
by an individual who at the time of death is a Non-United States Holder will not
be subject to United States federal estate tax as a result of such individuals
death, provided that such individual does not actually or constructively own 10%
or more of the total combined voting power of all classes of stock of the company
entitled to vote within the meaning of section 871(h)(3) of the Code and provided
that the interest payments with respect to such Note would not have been, if received
at the time of such individuals death, effectively connected with the conduct
of a United States trade or business by such individual.

If a Non-United
States Holder cannot satisfy the requirements of the portfolio interest
exception described in (a) above, the Issuer will withhold United States federal
income tax at a rate of 30% on payments of premium, if any, and interest made
to such Non-United States Holder unless the beneficial owner of the Note provides
the Issuer or its paying agent, as the case may be, with a properly executed (1)
IRS Form W-8BEN (or successor form) claiming an exemption from or reduction in
withholding under the benefit of an applicable tax treaty or (2) IRS Form W-8ECI
(or successor form) stating that interest paid on the Note is not subject to withholding
tax because it is effectively connected with the beneficial owners conduct
of a trade or business in the United States. Alternative documentation may be
applicable in certain situations.

If a Non-United States Holder is engaged
in a trade or business in the United States and interest on the Note (that is
treated as United States source income for United States federal income tax purposes)
is effectively connected with the conduct of such trade or business, the Non-United
States Holder, although exempt from the withholding tax discussed above, will
be subject to United States federal income tax on such interest income on a net
income basis in the same manner as if it were a United States Holder. In addition,
if such holder is a foreign corporation, it may be subject to a branch profits
tax equal to 30% (or lesser rate under an applicable tax treaty) of its effectively
connected earnings and profits for the taxable year, subject to adjustments. For
this purpose, such interest income will be included in such foreign corporations
earnings and profits.

Any gain realized upon the sale, exchange, retirement
or other disposition of a Note generally will not be subject to United States
federal income tax unless (i) such gain is effectively connected with a trade
or business in the United States of the Non-United States Holder, or (ii) in the
case of a Non-United States Holder who is an individual, such individual is present
in the United States for 183 days or more in the taxable year of such sale, exchange,
retirement or other disposition, and certain other conditions are met.

#### Information
reporting and backup withholding

In general, no information reporting or
backup withholding will be required with respect to payments made by the Issuer
or any paying agent to Non-United States Holders if the requirements described
in (a)(iv) above have been satisfied (and the payor does not have actual knowledge
that the beneficial owner is a United States person).

In addition, no information
reporting or backup withholding will be required with respect to the proceeds
of the sale of a Note within the United States or conducted through certain United
States related financial intermediaries if the requirements described in (a)(iv)
above have been satisfied (and the payor does not have actual knowledge that the
beneficial owner is a United States person) or if the holder otherwise establishes
an exemption.

-53-

---





Any amounts withheld under the
backup withholding rules will be allowed as a refund or a credit against a Non-United
States Holders United States federal income tax liability provided the required
information is furnished to the IRS.

#### CERTAIN UNITED KINGDOM TAX CONSEQUENCES

The
following summary describes certain U.K. tax consequences of the ownership of
the Notes as of the date hereof. Except where noted, it relates only to the position
of persons who are the absolute beneficial owners of their Notes and may not apply
to special situations, such as those of dealers in securities. Furthermore, the
discussion below is generally based upon the provisions of the current U.K. tax
laws and U.K. Inland Revenue practice, and such provisions may be repealed, revoked
or modified so as to result in U.K. income tax consequences different from those
discussed below.

Persons considering the purchase, ownership or disposition
of Notes should consult their own tax advisers concerning U.K. tax consequences
in light of their particular situations as well as any consequences arising under
the law of any other relevant tax jurisdiction. No representations with respect
to the tax consequences to any particular holder of Book-Entry Interests are made
hereby.

#### Interest on the Global Notes

The Global Notes will constitute
quoted Eurobonds within the meaning of section 124 of the Income and
Corporation Taxes Act 1988 (the Act) as long as they continue to be
in bearer form and listed on a recognised stock exchange within the
meaning of section 841 of the Act. The Luxembourg Stock Exchange is currently
recognised for these purposes. Accordingly, payments of interest on the Global
Notes may be made without withholding on account of U.K. income tax where the
Global Notes are held in a recognised clearing system (DTC, Euroclear Bank S.A./N.V.
as operator of the Euroclear System (Euroclear) and Clearstream Banking,
société anonyme (Clearstream, Luxembourg) are recognised
for these purposes) and, where applicable, any other administrative conditions
imposed by regulations made under the Act (as amended by the Finance Act 1996)
have been satisfied.

In all other cases an amount must be withheld on account
of U.K. income tax at the lower rate (currently 20%), subject to any direction
to the contrary by the Inland Revenue under an applicable double taxation treaty.

Where
a U.K. collecting agent in the course of a trade carried on by him either (a)
acts as custodian of the Global Notes and receives interest on those Notes or
directs that interest on the Global Notes be paid to another person or consents
to such payment; or (b) collects or secures payment of or receives interest on
the Global Notes for a Noteholder (except in either case by means solely of clearing
a check or arranging for the clearing of a check), the collecting agent will be
required to withhold on account of U.K. income tax at the lower rate unless: (i)
the relevant Global Notes are held in a recognized clearing system
and the collecting agent either: (A) pays or accounts for the interest directly
or indirectly to the recognized clearing system; or (B) is acting
as depository for the recognized clearing system; or (ii) the person
beneficially entitled to the interest is at the time the interest is paid either
not resident in the United Kingdom and beneficially owns the relevant Notes or
is specified by regulations; or (iii) the interest arises to trustees not resident
in the United Kingdom of certain discretionary or accumulation trusts (where,
inter alia, none of the beneficiaries of the trust is resident in the United Kingdom);
or (iv) the person beneficially entitled to the interest is eligible for certain
reliefs from tax in respect of the interest; or (v) the interest fails to be treated
as the income of, or of the government of, a sovereign power or of an international
organization.

In the case of each of the above exceptions, further administrative
conditions imposed by the regulations referred to above may have to be satisfied
for the relevant exception to be available.

The Finance Act 2000 contains
legislation which provides that for so long as the Notes are listed on a recognised
stock exchange, there will be no obligation upon any person by or through whom
a payment of interest is made (including the Issuer or any paying agent or any
collecting agent) to deduct or withhold on account of United Kingdom income tax
from that payment of interest. The legislation will have effect for payments of
interest made on the bonds on or after April 1, 2001. The Finance Act 2000 also
provides for the abolition from April 1, 2001 of the paying and collecting agent
rules summarised above. Instead of the obligation on paying and collecting agents
to withhold tax in certain circumstances, the Inland Revenue are extending their
information powers with effect from April 6, 2001 so that paying and collecting
agents can be

-54-

---





obliged to provide them with
details about interest payments in respect of quoted Eurobonds, including the
amount of the interest and the name and address of the person entitled to it.

#### Proposed
European Union Savings Directive

The European Union is currently considering
proposals for a new directive regarding the taxation of savings income. It is
proposed that, subject to a number of important conditions being met, Member States
will be required to provide to the tax authorities of another Member State details
of payments of interest or other similar income paid by a person within its jurisdiction
to an individual resident in that other Member State, subject to the right of
certain Member States to opt instead for a withholding system for a transitional
period in relation to such payments, and subject to the proposals not being required
to be applied to Notes issued before March 1, 2001. The proposals are not yet
final, and they may be subject to further amendment and/or clarification.

Interest
on the Notes constitutes U.K. source income for U.K. tax purposes and, as such,
may be subject to income tax by direct assessment even where paid without withholding.
However, interest with a U.K. source received without deduction or withholding
on account of U.K. tax will not be chargeable to U.K. tax in the hands of a Noteholder
who is not resident for tax purposes in the U.K. unless that Noteholder carries
on a trade, profession or vocation in the United Kingdom through a U.K. branch
or agency in connection with which the interest is received or to which the Notes
are attributable. There are exemptions for interest received by certain categories
of agent (such as some brokers and investment managers).

#### Interest on the
Definitive Notes

Payments of interest on the Definitive Notes will be made
under deduction of U.K. income tax at the lower rate by the Issuer subject to
any direction to the contrary by the Inland Revenue under an applicable double
taxation treaty.

Notwithstanding that interest is received subject to a
deduction of income tax, holders of Definitive Notes who are resident in the United
Kingdom for tax purposes or holders who are non-resident and carrying on a trade,
profession or vocation in the United Kingdom through a U.K. branch or agency,
may either be liable to pay further U.K. tax on the interest received or be entitled
to a refund of all or part of the tax deducted depending on their individual circumstances.

#### Potential
application of applicable double tax treaties

Where interest on the Notes
has been paid subject to deduction of income tax, holders of Notes who are not
resident in the U.K. may be able to recover all or part of the tax deducted if
there is an appropriate provision in an applicable double tax treaty. A United
States Holder who is entitled to the benefit of the United States/United Kingdom
Double Tax Treaty will normally be eligible to recover in full any U.K. tax withheld
from payments of interest to which such holder is beneficially entitled by making
a claim under the United States/United Kingdom Double Tax Treaty on the appropriate
form. Alternatively, in certain circumstances, a claim may be made by a United
States Holder in advance of a payment of interest. If the claim is accepted by
the U.K. Inland Revenue, it will authorize subsequent payments to that United
States Holder to be made without deduction of U.K. withholding tax. Claims for
repayment must be made within six years of the end of the U.K. year of assessment
(generally April 5 in each year) to which the interest relates and must be accompanied
by the original statement provided by the Issuer when the interest payment was
made, showing the amount of U.K. income tax deducted. Because a claim is not considered
until the U.K. Inland Revenue receives the appropriate form from the Internal
Revenue Service, forms should be sent to the Internal Revenue Service, in the
case of an advance claim well before the relevant interest payment date or, in
the case of a claim for repayment of the tax, well before the end of the appropriate
limitation period.

United Kingdom Corporation Tax Payers

In
general Noteholders which are within the charge to U.K. corporation tax will be
charged to tax on all returns on and fluctuations in value of the Notes (whether
attributable to currency fluctuations or otherwise) broadly in accordance with
their statutory accounting treatment. Such Noteholders will generally be charged
to tax in each accounting period by reference to interest accrued in that period.

-55-

---





Other United Kingdom Tax Payers

Taxation
of Chargeable Gains. A disposal of Notes by an individual Noteholder who is
resident or ordinarily resident in the United Kingdom or who carries on a trade,
profession or vocation in the U.K. through a branch or agency to which the Notes
are attributable, may give rise to a chargeable gain or allowable loss for the
purposes of the U.K. taxation of chargeable gains.

Accrued Income Scheme.
On a disposal of Notes by a Noteholder, any interest which has accrued since the
last interest payment date may be chargeable to tax as income if that Noteholder
is resident or ordinarily resident in the United Kingdom or carries on a trade,
profession or vocation in the U.K. through a U.K. branch or agency to which the
Notes are attributable.

Based on the Issuers understanding of the
Inland Revenues practice in this area, it is considered that the Notes will
not be treated as constituting relevant discounted securities for
the purposes of the Finance Act 1996.

No U.K.
stamp duty or stamp duty reserve tax is payable on the issue, transfer or redemption
of Exchange Notes (whether Global or Definitive) assuming that the interest rate
paid will not exceed a reasonable commercial return.

#### Documents on display

Documents
concerning the Company which are referred to in this document may be inspected
at the registered office of the Company, which is 25 Savile Row, London, W1S 2ES.

-56-

---





#### Item 11: Quantitative and Qualitative
Disclosures about Market Risk

#### Disclosures about market risks

Our
primary market risk exposures are interest rate risk and foreign currency risk.
Our exposure to market risk for changes in interest rates relates primarily to
our senior debt obligations (senior secured long-term debt and revolving credit
facility) upon which interest is paid at variable rates. We use interest rate
swap and interest rate cap agreements to hedge fluctuations in these variable
rates. We are also exposed to changes in foreign currency because all of our long-term
debt is denominated in foreign currencies, most significantly the U.S. dollar.
We have revenues denominated in various foreign currencies, also predominantly
the U.S. dollar. These foreign currency income streams are matched with the foreign
currency debt and interest repayments to minimize the foreign currency exposure.
We have entered into foreign exchange contracts to hedge (into sterling) firmly
committed foreign currency purchases and foreign currency receipts. In certain
circumstances, hedges are in other currencies where, for example, a subsidiary
that earns revenue in U.S. dollars has to buy its supplies in Australian dollars.
This is reflective of our geographical diversity. The purpose of the foreign currency
exchange contracts is to lock in the exchange rates. Increases or decreases in
our foreign currency firm commitments are partially offset by gains and losses
on the hedging instrument. We do not use foreign exchange contracts for trading
purposes.

#### Interest rate sensitivity

The table below provides information
about our derivative financial instruments and other financial instruments that
are sensitive to changes in interest rates, including interest rate swaps, interest
rate cap agreements and debt obligations. For debt obligations, the table presents
principal cash flows and related weighted average interest rates by expected maturity
dates. For interest rate swaps and caps, the table presents notional amounts and
weighted average interest rates by expected (contractual) maturity dates. Notional
amounts are used to calculate the contractual payments to be exchanged under the
contract. Weighted average variable rates are based on implied forward rates in
the yield curve at the reporting date. The information is presented in Sterling
equivalents, which is our reporting currency. The instruments actual cash
flows are denominated in U.S. dollar (USD), Swedish Kroner (SEK), Euros (EUR)
and Hong Kong Dollars (HKD) as indicated in parentheses.

|2000                          | Expected Maturity Date |      | Total
      £m  |     | Fair Value
      £m
|----------------------------- | ---------------------- | ---- | --------------- | --- | -------------------
|                             
|                              | Dec-01
      £m        |      | Dec-02
      £m |     | Dec-03
      £m    
|                              |                       
|Liabilities                   |                        |      |                 |     |                    
|                             
|Revolving advances short-term |                        |      |                 |     |                    
|                             
|Floating Rate (GBP)           |                        | 10.0 |                 |    |                    
|Average Interest Rate (1)     |                        | 8.0  | %               |    |                    
|                             
|Underlying Long Term Debt (2) |                        |      |                 |     |                    
|                             
|Fixed Rate (USD)              |                        |     |                 |    |                    
|Average Interest Rate         |                        |     |                 |    |                    
|                             
|Fixed Rate (USD)              |                        |     |                 |    |                    
|Average Interest Rate (3)     |                        |     |                 |    |                    
|                             
|Floating Rate (USD)           |                        | 4.7  |                 | 5.8 |                    
|Average Interest Rate (1)     |                        | 8.2  | %               | 8.1 | %                  
|                             
|Floating Rate (SEK)           |                        | 1.0  |                 | 1.2 |                    
|Average Interest Rate (1)     |                        | 8.0  | %               | 7.2 | %                  
|                             
|Floating Rate (EUR)           |                        | 0.6  |                 | 0.8 |                    
|Average Interest Rate (1)     |                        | 7.2  | %               | 7.2 | %                  
|                             
|Floating Rate (HKD)           |                        | 6.4  |                 | 7.5 |                    
|Average Interest Rate (1)     |                        | 7.6  | %               | 7.7 | %                  
|                              |                        |      |                 |     |                    
|                              |                        |      |                 |     |                    
|                              |                        |      |                 |     |                    

-57-

---







|2000                                |  | Expected Maturity Date |   | Total
        £m |  | Fair Value
        £m | 
|----------------------------------- |  | ---------------------- | - | ---------------- |  | --------------------- | 
|                                    | 
|Dec-01
      £m                     |  | Dec-02
      £m        |   | Dec-03
      £m  |  | Dec-04
      £m       | 
|                                    |  |                       
|Interest rate swaps                 |  |                        |   |                  |  |                       | 
|                                   
|Pay Fixed to Receive Variable (USD) |  | 15.6                   |   |                 |  |                      | 
|Average Pay Rate                    |  | 6.3                    | % |                 |  |                      | 
|Average Receive Rate (4)            |  | 6.0                    | % |                 |  |                      | 
|                                   
|Pay Fixed to Receive Variable (USD) |  | 21.1                   |   |                 |  |                      | 
|Average Pay Rate                    |  | 6.5                    | % |                 |  |                      | 
|Average Receive Rate (4)            |  | 6.0                    | % |                 |  |                      | 
|                                   
|Pay Fixed to Receive Variable (SEK) |  | 7.7                    |   |                 |  |                      | 
|Average Pay Rate                    |  | 6.8                    | % |                 |  |                      | 
|Average Receive Rate (4)            |  | 5.5                    | % |                 |  |                      | 
|                                   
|Pay Fixed to Receive Variable (EUR) |  | 4.7                    |   |                 |  |                      | 
|Average Pay Rate                    |  | 5.1                    | % |                 |  |                      | 
|Average Receive Rate (4)            |  | 4.7                    | % |                 |  |                      | 
|                                   
|Pay Fixed to Receive Variable (HKD) |  | 29.6                   |   |                 |  |                      | 
|Average Pay Rate                    |  | 6.4                    | % |                 |  |                      | 
|Average Receive Rate (4)            |  | 5.7                    | % |                 |  |                      | 
|                                    |  |                        |   |                  |  |                       | 
|                                    |  |                        |   |                  |  |                       | 
|                                    |  |                        |   |                  |  |                       | 



|(1) | The interest rate
applicable to the relevant currency is determined based on the inter-bank offering
rate plus a spread (not in excess of 2.75% nor lower than 1.50% per year) based
on the ratio of total net indebtedness of the Group as defined in the Credit Agreement.
Rates included in the table represent average rates in effect at December 31,
2000.
|--- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



|(2) | Including
current portion.
|--- | --------------------------



|(3) | This
debt is separately itemised due to the fact that interest is capitalised over
the life of the debt.
|--- | --------------------------------------------------------------------------------------------------------



|(4) | The
receive rates consist of the implied forward borrowing rates in the yield curve
at the reporting date.
|--- | ----------------------------------------------------------------------------------------------------------

-58-

---







|1999                          |  | Expected Maturity Date |   | Total
      £m  |   | Fair Value
      £m |  
|----------------------------- |  | ---------------------- | - | --------------- | - | ------------------- | -
|                              | 
|Dec-00
      £m               |  | Dec-01
      £m        |   | Dec-02
      £m |   | Dec-03
      £m     |  
|                              |  |                        |  
|Liabilities                   |  |                        |   |                 |   |                     |  
|Revolving advances short-term |  |                        |   |                 |   |                     |  
|                              | 
|Floating Rate (GBP)           |  | 6.0                    |   |                |   |                    |  
|Average Interest Rate (5)     |  | 7.9                    | % |                |   |                    |  
|                              | 
|Floating Rate (USD)           |  | 4.3                    |   |                |   |                    |  
|Average Interest Rate (5)     |  | 7.8                    | % |                |   |                    |  
|                              | 
|Underlying Long Term Debt (2) |  |                        |   |                 |   |                     |  
|                              | 
|Fixed Rate (USD)              |  |                       |   |                |   |                    |  
|Average Interest Rate         |  |                       |   |                |   |                    |  
|                              | 
|Fixed Rate (USD)              |  |                       |   |                |   |                    |  
|Average Interest Rate (3)     |  |                       |   |                |   |                    |  
|                              | 
|Floating Rate (USD)           |  | 1.9                    |   | 4.4             |   | 5.4                 |  
|Average Interest Rate (5)     |  | 8.6                    | % | 9.3             | % | 9.4                 | %
|                              | 
|Floating Rate (SEK)           |  | 0.5                    |   | 1.0             |   | 1.2                 |  
|Average Interest Rate (5)     |  | 7.0                    | % | 8.5             | % | 8.9                 | %
|                              | 
|Floating Rate (EUR)           |  | 0.3                    |   | 0.7             |   | 0.8                 |  
|Average Interest Rate (5)     |  | 6.3                    | % | 7.4             | % | 7.8                 | %
|                              | 
|Floating Rate (HKD)           |  | 2.8                    |   | 5.9             |   | 6.9                 |  
|Average Interest Rate (5)     |  | 8.8                    | % | 9.1             | % | 9.2                 | %
|                              |  |                        |   |                 |   |                     |  
|                              |  |                        |   |                 |   |                     |  
|                              |  |                        |   |                 |   |                     |  



|(2) | Including
current portion.
|--- | --------------------------



|(3) | This
debt is separately itemised due to the fact that interest is capitalised over
the life of the debt.
|--- | --------------------------------------------------------------------------------------------------------



|(5) | The
interest rate applicable to the relevant currency is determined based on the inter-bank
offering rate plus a spread (not in excess of 2.75% nor lower than 1.50% per year)
based on the ratio of total net indebtedness of the Group as defined in the Credit
Agreement. Rates included in the table represent average rates in effect at December
31, 1999.
|--- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

-59-

---







|1999                                |  | Expected Maturity Date |   | Total
        £m |   | Fair Value
        £m | 
|----------------------------------- |  | ---------------------- | - | ---------------- | - | --------------------- | 
|                                    | 
|Dec-00
      £m                     |  | Dec-01
      £m        |   | Dec-02
      £m  |   | Dec-03
      £m       | 
|                                    |  |                       
|Interest rate swaps                 |  |                        |   |                  |   |                       | 
|                                   
|Pay Fixed to Receive Variable (USD) |  |                       |   | 14.3             |   |                      | 
|Average Pay Rate                    |  |                       |   | 6.3              | % |                      | 
|Average Receive Rate (4)            |  | 6.5                    | % | 7.1              | % |                      | 
|                                   
|Pay Fixed to Receive Variable (USD) |  |                       |   | 22.4             |   |                      | 
|Average Pay Rate                    |  |                       |   | 6.5              | % |                      | 
|Average Receive Rate (4)            |  | 6.5                    | % | 7.1              | % |                      | 
|                                   
|Pay Fixed to Receive Variable (SEK) |  |                       |   | 7.9              |   |                      | 
|Average Pay Rate                    |  |                       |   | 6.8              | % |                      | 
|Average Receive Rate (4)            |  | 4.4                    | % | 5.9              | % |                      | 
|                                   
|Pay Fixed to Receive Variable (EUR) |  |                       |   | 4.8              |   |                      | 
|Average Pay Rate                    |  |                       |   | 5.1              | % |                      | 
|Average Receive Rate (4)            |  | 3.9                    | % | 4.9              | % |                      | 
|                                   
|Interest Rate Caps                  |  |                        |   |                  |   |                       | 
|Notional Amount                     |  | 29.6                   |   |                 |   |                      | 
|HKD Strike (cap)                    |  | 8.0                    | % |                 |   |                      | 
|Forward Rate                        |  | 6.5                    | % |                 |   |                      | 
|                                    |  |                        |   |                  |   |                       | 
|                                    |  |                        |   |                  |   |                       | 
|                                    |  |                        |   |                  |   |                       | 



|(4) | The receive rates
consist of the implied forward borrowing rates in the yield curve at the reporting
date.
|--- | ----------------------------------------------------------------------------------------------------------

-60-

---





#### Exchange rate sensitivity

The table below provides information about our derivative financial instruments and
other financial instruments by functional currency and presents such information
in sterling equivalents. The table summarizes information on instruments and transactions
that are sensitive to foreign currency exchange rates, including foreign currency
forward exchange agreements and foreign currency denominated debt obligations.
For debt obligations, the table presents principal cash flows and related weighted
average interest rates by expected maturity dates. For foreign currency forward
exchange agreements, the table presents the notional amounts and weighted average
exchange rates by expected (contractual) maturity dates. These notional amounts
generally are used to calculate the contractual payments to be exchanged under
the contract.

|2000                           |  | Expected Maturity Date |   | Total
      £m  |   | Fair Value
      £m
|------------------------------ |  | ---------------------- | - | --------------- | - | -------------------
|                              
|Dec-01
      £m                |  | Dec-02
      £m        |   | Dec-03
      £m |   | Dec-04
      £m    
|                               |  |                       
|Liabilities                    |  |                        |   |                 |   |                    
|                              
|Underlying Long Term Debt      |  |                        |   |                 |   |                    
|                              
|Fixed Rate (USD)               |  |                       |   |                |   |                   
|Average Interest Rate          |  |                       |   |                |   |                   
|                              
|Fixed Rate (USD)               |  |                       |   |                |   |                   
|Average Interest Rate          |  |                       |   |                |   |                   
|                              
|Floating Rate (USD)            |  | 4.7                    |   | 5.8             |   | 12.1               
|Average Interest Rate          |  | 8.2                    | % | 8.1             | % | 8.3                
|                              
|Floating Rate (SEK)            |  | 1.0                    |   | 1.2             |   | 2.4                
|Average Interest Rate          |  | 8.0                    | % | 7.2             | % | 7.5                
|                              
|Floating Rate (EUR)            |  | 0.6                    |   | 0.8             |   | 1.6                
|Average Interest Rate          |  | 7.2                    | % | 7.2             | % | 7.3                
|                              
|Floating Rate (HKD)            |  | 6.4                    |   | 7.5             |   | 15.6               
|Average Interest Rate          |  | 7.6                    | % | 7.7             | % | 7.8                
|                               |  |                        |   |                 |   |                    
|                               |  |                        |   |                 |   |                    
|                               |  |                        |   |                 |   |                    
|                              
|Forward exchange agreements    |  |                        |   |                 |   |                    
|                              
|(Receive GBP pay USD)          |  |                        |   |                 |   |                    
|Contract Amount                |  | 4.2                    |   |                 |   |                    
|                               |  |                        |   |                 |   |                    
|Average Contract Exchange Rate |  | 1.47                   |   |                 |   |                    
|                               |  |                        |   |                 |   |                    

-61-

---







|1999                           |  | Expected Maturity Date |   | Total
      £m  |   | Fair
      Value
      £m |  
|------------------------------ |  | ---------------------- | - | --------------- | - | ------------------------- | -
|                              
|Dec-00
      £m                |  | Dec-01
      £m        |   | Dec-02
      £m |   | Dec-03
      £m           |  
|                               |  |                        |  
|Liabilities                    |  |                        |   |                 |   |                           |  
|Revolving advances             |  |                        |   |                 |   |                           |  
|                              
|Floating Rate (USD)            |  | 4.3                    |   |                |   |                          |  
|Average Interest Rate          |  | 7.8                    | % |                |   |                          |  
|                              
|Underlying Long Term Debt (6)  |  |                        |   |                 |   |                           |  
|                              
|Fixed Rate (USD)               |  |                       |   |                |   |                          |  
|Average Interest Rate          |  |                       |   |                |   |                          |  
|                              
|Fixed Rate (USD)               |  |                       |   |                |   |                          |  
|Average Interest Rate          |  |                       |   |                |   |                          |  
|                              
|Floating Rate (USD)            |  | 1.9                    |   | 4.4             |   | 5.4                       |  
|Average Interest Rate          |  | 8.6                    | % | 9.3             | % | 9.4                       | %
|                              
|Floating Rate (SEK)            |  | 0.5                    |   | 1.0             |   | 1.2                       |  
|Average Interest Rate          |  | 7.0                    | % | 8.5             | % | 8.9                       | %
|                              
|Floating Rate (EUR)            |  | 0.3                    |   | 0.7             |   | 0.8                       |  
|Average Interest Rate          |  | 6.3                    | % | 7.4             | % | 7.8                       | %
|                              
|Floating Rate (HKD)            |  | 2.8                    |   | 5.9             |   | 6.9                       |  
|Average Interest Rate          |  | 8.8                    | % | 9.1             | % | 9.2                       | %
|                               |  |                        |   |                 |   |                           |  
|                               |  |                        |   |                 |   |                           |  
|                               |  |                        |   |                 |   |                           |  
|                              
|Forward exchange agreements    |  |                        |   |                 |   |                           |  
|                              
|(Receive GBP pay CHF)          |  |                        |   |                 |   |                           |  
|Contract Amount                |  | 3.2                    |   |                |   |                          |  
|Average Contract Exchange Rate |  | 2.55                   |   |                |   |                          |  
|                              
|(Receive GBP pay USD)          |  |                        |   |                 |   |                           |  
|Contract Amount                |  | 5.3                    |   |                |   |                          |  
|Average Contract Exchange Rate |  | 1.60                   |   |                |   |                          |  
|                              
|(Receive CAD pay USD)          |  |                        |   |                 |   |                           |  
|Contract Amount                |  | 1.6                    |   |                |   |                          |  
|Average Contract Exchange Rate |  | 1.48                   |   |                |   |                          |  
|                              
|(Receive HKD pay GBP)          |  |                        |   |                 |   |                           |  
|Contract Amount                |  | 0.4                    |   |                |   |                          |  
|Average Contract Exchange Rate |  | 12.66                  |   |                |   |                          |  
|                               |  |                        |   |                 |   |                           |  
|                               |  |                        |   |                 |   |                           |  
|                               |  |                        |   |                 |   |                           |  



|(6) | The amortised amounts
were amended in March 1999 in accordance with the amendment and restatement agreement
date March 5, 1999.
|--- | -------------------------------------------------------------------------------------------------------------------------------

-62-

---





#### Item 12: Description of Securities Other than Equity Securities

Not applicable.

#### PART
II

#### Item 13: Defaults, Dividend Arrearages and Delinquencies

None.

#### Item
14: Material Modifications to the Rights of Security Holders and Use of Proceeds

Not
applicable.

#### PART III

#### Item 17: Financial Statements

Not applicable.

#### Item
18: Financial Statements

Reference is made to Item 19(a) for a full list
of consolidated financial statements filed as part of this Annual Report.

#### Item
19: Exhibits



|(a) | Financial Statements Filed as part of this Report                                                                                                    
|--- | -----------------------------------------------------------------------------------------------------------------------------------------------------
|    | The following financial statements and related schedules, together with
        the report of independent auditors, are filed as part of this Report.



|                                                                  | Page
|----------------------------------------------------------------- | ----
|Report of Independent Auditors                                    | F-1 
|Consolidated Statements of Operations                             | F-2 
|Consolidated Balance Sheets                                       | F-3 
|Consolidated Statements of Cash Flows                             | F-4 
|Consolidated Statements of Total Recognised Gains and Losses      | F-5 
|Consolidated Statements of Changes in Shareholders
      Deficit | F-5 
|Notes to the Consolidated Financial Statements                    | F-6 



|(b) | Exhibits Filed as part of this Report
|--- | -------------------------------------

None.

If requested, we agree to
furnish to the Securities and Exchange Commission a list or diagram of the Companys
subsidiaries indicating for each subsidiary (a) its country or other jurisdiction
of incorporation or organisation, (b) its relationship to the Company and (c)
the percentage of voting securities owned or other basis of control by its immediate
parent, if any.





-63-

---





### Report of Independent Auditors

To the Board of Directors and Shareholders of Intertek Testing Services Limited

We have audited the accompanying consolidated balance sheets of Intertek Testing
  Services Limited and its subsidiaries (the Company) as of December
  31, 1999 and 2000 and the related consolidated statements of operations, cash
  flows, changes in shareholders deficit and total recognised gains and
  losses for each of the three years ended December 31, 2000. These consolidated
  financial statements are the responsibility of the Companys management.
  Our responsibility is to express an opinion on these consolidated financial
  statements based on our audits.

We conducted our audits in accordance with generally accepted auditing standards
  in the United Kingdom and the United States. These standards require that we
  plan and perform the audit to obtain reasonable assurance about whether the
  financial statements are free from 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 the 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 consolidated financial position of the
  Company at December 31, 1999 and 2000 and the consolidated results of its operations
  and its cash flows for the years ended December 31, 1998, 1999 and 2000 in conformity
  with generally accepted accounting principles in the United Kingdom.

Accounting principles generally accepted in the United Kingdom vary in certain
  significant respects from accounting principles generally accepted in the United
  States. Application of accounting principles generally accepted in the United
  States would have affected the consolidated results of operations for each of
  the three years ended December 31, 2000 and consolidated shareholders
  deficit as of December 31, 1999 and 2000 to the extent summarised in Note 30
  to the consolidated financial statements.

KPMG

Chartered Accountants

London, England

March 22, 2001

F-1

---





#### INTERTEK TESTING SERVICES LIMITED
  CONSOLIDATED STATEMENTS OF OPERATIONS

|                                                                        | Notes |  | Year ended
        December 31,
        1998
        £m |   | Year ended
        December 31,
        1999
        £m |   | Year ended
        December 31,
        2000
        £m |  
|----------------------------------------------------------------------- | ----- |  | ------------------------------------------------------- | - | ------------------------------------------------------- | - | ------------------------------------------------------- | -
|Revenues                                                                | 3     |  |                                                         |   |                                                         |   |                                                         |  
|Continuing operations                                                   |       |  | 337.8                                                   |   | 351.2                                                   |   | 398.4                                                   |  
|Discontinued operations                                                 |       |  | 22.0                                                    |   | 11.3                                                    |   | 0.7                                                     |  
|                                                                        |       |  |                                                         |  
|Group revenues                                                          |       |  | 359.8                                                   |   | 362.5                                                   |   | 399.1                                                   |  
|Operating costs                                                         | 4     |  | (336.8                                                  | ) | (311.4                                                  | ) | (341.6                                                  | )
|                                                                        |       |  |                                                         |  
|Group operating income                                                  |       |  | 23.0                                                    |   | 51.1                                                    |   | 57.5                                                    |  
|Share of operating profit in associates                                 |       |  |                                                        |   | 0.3                                                     |   | 0.9                                                     |  
|                                                                        |       |  |                                                         |  
|Total operating income                                                  | 6     |  | 23.0                                                    |   | 51.4                                                    |   | 58.4                                                    |  
|                                                                       
|                                                                       
|Operating income/(loss) before exceptional items                       
|Continuing operations                                                   |       |  | 44.8                                                    |   | 48.0                                                    |   | 60.0                                                    |  
|Discontinued operations                                                 |       |  | (2.6                                                    | ) | (2.1                                                    | ) | (0.7                                                    | )
|                                                                        |       |  |                                                         |  
|                                                                        | 3     |  | 42.2                                                    |   | 45.9                                                    |   | 59.3                                                    |  
|                                                                       
|Exceptional items (charged)/credited 
           to operating income    | 4, 5  | 
|Continuing operations                                                   |       |  | (14.0                                                   | ) | 10.5                                                    |   | 6.9                                                     |  
|Discontinued operations                                                 |       |  | (5.2                                                    | ) | (5.0                                                    | ) | (7.8                                                    | )
|                                                                        |       |  |                                                         |  
|Total operating income                                                  |       |  | 23.0                                                    |   | 51.4                                                    |   | 58.4                                                    |  
|                                                                        |       |  |                                                         |  
|                                                                       
|Operating income/(loss) after exceptional items                        
|Continuing operations                                                   |       |  | 30.8                                                    |   | 58.5                                                    |   | 66.9                                                    |  
|Discontinued operations                                                 |       |  | (7.8                                                    | ) | (7.1                                                    | ) | (8.5                                                    | )
|                                                                        |       |  |                                                         |  
|Total operating income                                                  |       |  | 23.0                                                    |   | 51.4                                                    |   | 58.4                                                    |  
|                                                                       
|                                                                       
|Non-operating exceptional items                                         | 5     | 
|Continuing operations                                                   |       |  |                                                        |   | 2.4                                                     |   | (3.1                                                    | )
|Discontinued operations                                                 |       |  | (1.4                                                    | ) |                                                        |   | (12.1                                                   | )
|                                                                        |       |  |                                                         |  
|Total non-operating exceptional items                                   |       |  | (1.4                                                    | ) | 2.4                                                     |   | (15.2                                                   | )
|                                                                        |       |  |                                                         |  
|                                                                       
|Income on ordinary activities before 
          net interest            |       |  | 21.6                                                    |   | 53.8                                                    |   | 43.2                                                    |  
|Net interest expense                                                    | 7     |  | (31.8                                                   | ) | (32.2                                                   | ) | (35.8                                                   | )
|                                                                        |       |  |                                                         |  
|(Loss)/income before taxation                                           |       |  | (10.2                                                   | ) | 21.6                                                    |   | 7.4                                                     |  
|Taxation                                                                | 8     |  | (7.2                                                    | ) | (9.4                                                    | ) | (10.9                                                   | )
|                                                                        |       |  |                                                         |  
|(Loss)/income after taxation                                            |       |  | (17.4                                                   | ) | 12.2                                                    |   | (3.5                                                    | )
|Minority interests                                                      |       |  | (3.2                                                    | ) | (3.2                                                    | ) | (3.6                                                    | )
|                                                                        |       |  |                                                         |  
|Net (loss)/income for the group and 
           its share of associates | 21    |  | (20.6                                                   | ) | 9.0                                                     |   | (7.1                                                    | )
|                                                                        |       |  |                                                         |  

The accompanying notes on pages F-6 to F-53 are an integral
  part of these financial statements.

F-2

---





#### INTERTEK TESTING SERVICES LIMITED
  CONSOLIDATED BALANCE SHEETS

|                                                                          | Notes  |  | December 31,
      1999
      £m |   | December 31,
      2000
      £m |  
|------------------------------------------------------------------------- | ------ |  | -------------------------------- | - | -------------------------------- | -
|                                                                         
|ASSETS                                                                    |        |  |                                  |   |                                  |  
|Current assets                                                            |        |  |                                  |   |                                  |  
|Cash                                                                      |        |  | 20.2                             |   | 21.3                             |  
|Trade receivables                                                         | 12     |  | 70.1                             |   | 81.6                             |  
|Inventories                                                               | 14     |  | 2.6                              |   | 1.7                              |  
|Other current assets                                                      | 13     |  | 15.6                             |   | 19.1                             |  
|                                                                          |        |  |                                  |  
|Total current assets                                                      |        |  | 108.5                            |   | 123.7                            |  
|Goodwill                                                                  | 9      |  | 15.8                             |   | 16.8                             |  
|Property, plant and equipment, net                                        | 10     |  | 53.8                             |   | 67.9                             |  
|Investments                                                               | 11     |  | 0.5                              |   | 0.9                              |  
|                                                                          |        |  |                                  |  
|Total assets                                                              |        |  | 178.6                            |   | 209.3                            |  
|                                                                          |        |  |                                  |  
|                                                                         
|LIABILITIES AND SHAREHOLDERS DEFICIT                                     |        |  |                                  |   |                                  |  
|Current liabilities                                                       |        |  |                                  |   |                                  |  
|Borrowings (including current portion of long term 
          borrowings) | 15     |  | 15.4                             |   | 22.1                             |  
|Accounts payable, accrued liabilities and deferred 
          income      | 16     |  | 69.5                             |   | 80.5                             |  
|Income taxes payable                                                      |        |  | 5.4                              |   | 6.9                              |  
|                                                                          |        |  |                                  |  
|Total current liabilities                                                 |        |  | 90.3                             |   | 109.5                            |  
|                                                                          |        |  |                                  |  
|Long term borrowings                                                      | 15     |  | 278.2                            |   | 300.3                            |  
|Provisions for liabilities and charges                                    | 17     |  | 6.8                              |   | 13.9                             |  
|Minority interests                                                        |        |  | 5.8                              |   | 6.3                              |  
|Commitments and contingencies                                             | 27, 28 |  |                                  |   |                                  |  
|Shareholders deficit                                                     |        |  |                                  |   |                                  |  
|Ordinary shares                                                           | 19     |  | 0.8                              |   | 0.8                              |  
|Redeemable preference shares                                              | 19     |  | 105.5                            |   | 105.5                            |  
|Shares to be issued                                                       | 19     |  | 2.8                              |   | 2.8                              |  
|Premium in excess of par value                                            | 19     |  | 3.6                              |   | 3.6                              |  
|Retained deficit                                                          | 21     |  | (315.2                           | ) | (333.4                           | )
|                                                                          |        |  |                                  |  
|Total shareholders deficit                                               | 22     |  | (202.5                           | ) | (220.7                           | )
|                                                                          |        |  |                                  |  
|Total liabilities and shareholders deficit                               |        |  | 178.6                            |   | 209.3                            |  
|                                                                          |        |  |                                  |  

The accompanying notes on pages F-6 to F-53 are an integral
  part of these financial statements.

F-3

---





#### INTERTEK TESTING SERVICES LIMITED
CONSOLIDATED STATEMENTS OF CASH FLOWS

|                                                                  | Notes |  | Year ended
      December 31,
      1998
      £m |   | Year ended
      December 31,
      1999
      £m |   | Year ended
      December 31,
      2000
      £m |  
|----------------------------------------------------------------- | ----- |  | ------------------------------------------------- | - | ------------------------------------------------- | - | ------------------------------------------------- | -
|                                                                  |       |  |                                                   |   |                                                   |   |                                                   |  
|Total operating cash inflow                                       | 23    |  | 32.4                                              |   | 59.8                                              |   | 71.9                                              |  
|Returns on investments and servicing of finance                   | 24    |  | (25.0                                             | ) | (23.9                                             | ) | (26.4                                             | )
|Taxation                                                          |       |  | (5.9                                              | ) | (6.9                                              | ) | (10.1                                             | )
|Capital expenditure and financial investment                      | 24    |  | (14.0                                             | ) | (17.5                                             | ) | (26.1                                             | )
|Acquisitions and disposals                                        | 24    |  | (11.7                                             | ) | (5.0                                              | ) | (0.6                                              | )
|                                                                  |       |  |                                                   |  
|                                                                 
|Cash (outflow)/inflow before financing                            |       |  | (24.2                                             | ) | 6.5                                               |   | 8.7                                               |  
|                                                                 
|Financing                                                         | 24    |  | 16.0                                              |   | (1.6                                              | ) | (7.3                                              | )
|                                                                  |       |  |                                                   |  
|                                                                 
|(Decrease)/increase in cash in the period                         |       |  | (8.2                                              | ) | 4.9                                               |   | 1.4                                               |  
|                                                                  |       |  |                                                   |  
|                                                                 
|Reconciliation of net cash flow
          to movement in net debt | 25    | 
|                                                                 
|(Decrease)/increase in cash in the period                         |       |  | (8.2                                              | ) | 4.9                                               |   | 1.4                                               |  
|                                                                 
|Cash (outflow)/inflow from increase in debt                       |       |  | (11.0                                             | ) | 22.0                                              |   | 7.4                                               |  
|                                                                  |       |  |                                                   |  
|Change in net debt resulting from cash flows                      |       |  | (19.2                                             | ) | 26.9                                              |   | 8.8                                               |  
|Debt issued in lieu of interest payment                           |       |  | (7.1                                              | ) | (8.1                                              | ) | (10.1                                             | )
|Acquisitions and disposals                                        |       |  | (0.4                                              | ) | (1.6                                              | ) | (0.7                                              | )
|Other non-cash movements                                          |       |  | (1.9                                              | ) | (2.0                                              | ) | (2.1                                              | )
|Exchange adjustments                                              |       |  | 1.7                                               |   | (9.6                                              | ) | (23.6                                             | )
|                                                                  |       |  |                                                   |  
|                                                                 
|Movement in net debt in the period                                |       |  | (26.9                                             | ) | 5.6                                               |   | (27.7                                             | )
|Net debt at the start of the period                               |       |  | (252.1                                            | ) | (279.0                                            | ) | (273.4                                            | )
|                                                                  |       |  |                                                   |  
|                                                                 
|Net debt at the end of the period                                 |       |  | (279.0                                            | ) | (273.4                                            | ) | (301.1                                            | )
|                                                                  |       |  |                                                   |  

The accompanying notes on pages F-6 to F-53 are an integral
  part of these financial statements.

F-4

---





#### INTERTEK TESTING SERVICES LIMITED
  CONSOLIDATED STATEMENTS OF TOTAL RECOGNISED GAINS AND LOSSES

|                                    |  | Year ended
      December 31,
      1998
      £m |   | Year ended
      December 31,
      1999
      £m |   | Year ended
      December 31,
      2000
      £m |  
|----------------------------------- |  | ------------------------------------------------- | - | ------------------------------------------------- | - | ------------------------------------------------- | -
|                                   
|Net (loss)/income from subsidiaries |  | (20.6                                             | ) | 9.4                                               |   | (7.2                                              | )
|Net (loss)/income from associates   |  |                                                  |   | (0.4                                              | ) | 0.1                                               |  
|                                    |  |                                                   |  
|                                    |  | (20.6                                             | ) | 9.0                                               |   | (7.1                                              | )
|Exchange adjustments                |  | 0.9                                               |   | (11.0                                             | ) | (21.1                                             | )
|                                    |  |                                                   |  
|Total recognised gains and losses   |  | (19.7                                             | ) | (2.0                                              | ) | (28.2                                             | )
|                                    |  |                                                   |  

There is no material difference between income before taxation, and net income
  for the financial periods, as stated in the statements of operations and their
  historical cost equivalents.

#### CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDERS DEFICIT

|                             | Ordinary
      shares
      £m |  | Redeemable
      preference
      shares
      £m |  | Shares
      to be
      issued
      £m |  | Premium
      in excess
      of par value
      £m |  | Retained
      deficit
      £m |   | Total
      £m |  
|---------------------------- | ------------------------------ |  | ------------------------------------------------- |  | ---------------------------------------- |  | --------------------------------------------------- |  | ------------------------------- | - | -------------- | -
|                             |                                |  |                                                   |  |                                          |  |                                                     |  |                                 |   |                |  
|Balance at January 1, 1998   | 0.3                            |  | 81.8                                              |  | 2.8                                      |  | 2.9                                                 |  | (294.5                          | ) | (206.7         | )
|                            
|Net loss                     |                               |  |                                                  |  |                                         |  |                                                    |  | (20.6                           | ) | (20.6          | )
|Issue of shares              |                               |  | 4.9                                               |  |                                         |  | 0.1                                                 |  |                                |   | 5.0            |  
|Exchange adjustments         |                               |  |                                                  |  |                                         |  |                                                    |  | 0.9                             |   | 0.9            |  
|                             |                                | 
|Balance at December 31, 1998 | 0.3                            |  | 86.7                                              |  | 2.8                                      |  | 3.0                                                 |  | (314.2                          | ) | (221.4         | )
|                            
|Net income                   |                               |  |                                                  |  |                                         |  |                                                    |  | 9.0                             |   | 9.0            |  
|Issue of shares              | 0.5                            |  | 18.8                                              |  |                                         |  | 0.6                                                 |  |                                |   | 19.9           |  
|Goodwill on disposals        |                               |  |                                                  |  |                                         |  |                                                    |  | 1.0                             |   | 1.0            |  
|Exchange adjustments         |                               |  |                                                  |  |                                         |  |                                                    |  | (11.0                           | ) | (11.0          | )
|                             |                                | 
|Balance at December 31, 1999 | 0.8                            |  | 105.5                                             |  | 2.8                                      |  | 3.6                                                 |  | (315.2                          | ) | (202.5         | )
|                            
|Net loss                     |                               |  |                                                  |  |                                         |  |                                                    |  | (7.1                            | ) | (7.1           | )
|Goodwill on disposals        |                               |  |                                                  |  |                                         |  |                                                    |  | 10.0                            |   | 10.0           |  
|Exchange adjustments         |                               |  |                                                  |  |                                         |  |                                                    |  | (21.1                           | ) | (21.1          | )
|                             |                                | 
|Balance at December 31, 2000 | 0.8                            |  | 105.5                                             |  | 2.8                                      |  | 3.6                                                 |  | (333.4                          | ) | (220.7         | )
|                             |                                | 

Included in retained deficit is £287.2 million relating to goodwill (1999:
  £277.4 million and 1998: £270.6 million). This comprises goodwill
  of £285.0 million written off to reserves in relation to the acquisition
  of subsidiaries prior to December 1997 (1999: £276.2 million and 1998:
  £270.2 million) and £2.2 million amortised goodwill in relation to
  acquisitions from January 1, 1998 (1999: £1.2 million and 1998: £0.4
  million).

The accompanying notes on pages F-6 to F-53 are an integral
  part of these financial statements.

F-5

---





#### INTERTEK TESTING SERVICES LIMITED
  NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

#### 1. Accounting policies

The significant accounting policies adopted by the Company and its subsidiaries
  are set out below. Financial Reporting Standard 15: Tangible Fixed Assets and
  Financial Reporting Standard 16: Current tax have been adopted and no prior
  year adjustments are required.

#### Basis of consolidation

The consolidated financial statements of the Company include the financial
  statements of the Company and its subsidiaries. The acquisition method of accounting
  has been adopted. Under this method, the results of subsidiaries acquired or
  sold are included in the consolidated statement of income of the Company from,
  or up to, the date control passes. The consolidated statements of income of
  the Company include their respective shares of income from associated undertakings.
  The consolidated balance sheets of the Company include interests in associates
  at their respective shares of the net tangible assets.

#### Use of estimates

Preparation of financial statements in conformity with U.K. GAAP requires management
  to make estimates and assumptions that affect the reported amounts of assets
  and liabilities and disclosure of contingent assets and liabilities at the date
  of the financial statements and the reported amounts of revenues and expenses
  for an accounting period. Such estimates and assumptions could change in the
  future as more information becomes known or circumstances alter, such that the
  groups actual results may differ from the amounts reported and disclosed
  in the financial statements.

#### Foreign currencies

The results of operations and cash flows of foreign subsidiaries and associated
  undertakings are translated into sterling at the average of the month end rates
  of exchange for the period. Assets and liabilities in foreign currencies are
  translated into sterling at closing rates of exchange except where rates are
  fixed under contractual arrangements. The difference between net income/(loss)
  translated at average and at closing rates of exchange is included in the statement
  of total recognised gains and losses as a movement in shareholders equity/(deficit).
  Exchange differences arising from the retranslation to closing rates of exchange
  of opening shareholders equity, long-term foreign currency borrowings
  used to finance foreign currency investments, and foreign currency borrowings
  that provide a hedge against shareholders equity are also reflected as
  movements in shareholders equity/(deficit). All other exchange differences
  are dealt with in operations.

#### Property, plant and equipment and depreciation

Property, plant and equipment are stated at cost less depreciation, which is
  provided, except for freehold land, on a straight line basis over the estimated
  useful lives of the assets, mainly at the following annual rates:

|Freehold buildings and long leasehold land and
      buildings |  | 2             | 
|-------------------------------------------------------------- |  | ------------- | 
|Short leasehold land and buildings                             |  | term of lease | 
|Plant, machinery and equipment                                 |  | 10% - 33.3%   | 

#### Leases

Assets held under capital leases are treated as if they had been purchased
  at the present value of the minimum lease payments. This cost is included in
  property, plant and equipment, and depreciation is provided over the shorter
  of the lease term or the estimated useful life. The corresponding obligations
  under these leases are included within borrowings. The finance charge element
  of rentals payable is charged to operations to produce a constant rate of interest.
  Operating lease rentals are charged to operations on a straight line basis over
  the periods of the leases.

#### Inventories

Inventories are stated at the lower of cost or net realisable value. Cost comprises
  expenditure incurred in the normal course of business in bringing inventories
  and work in progress to their present location and condition.

#### Revenues

Revenues represent the total amount receivable for services provided and goods
  sold, excluding sales-related taxes and intra-group transactions. Revenue is
  recognised when the relevant service is completed or goods delivered.

F-6

---





#### INTERTEK TESTING SERVICES LIMITED
  NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

1. Accounting Policies (continued)

#### Taxation

Deferred taxation is provided using the liability method at current taxation
  rates on timing differences to the extent that the directors consider that it
  is probable that a liability or asset will crystallise.

#### Pension benefits

Liabilities under defined contribution pension schemes are charged to operations
  when incurred. ITS has a number of defined benefit pension schemes for which
  contributions are based on triennial actuarial valuations. Pension charges in
  operations have been calculated at a substantially level percentage of current
  and expected future pensionable payroll, with variations from regular cost spread
  over the expected remaining service lives of employees.

#### Goodwill

Purchased goodwill in respect of acquisitions since January 1, 1998 is capitalised
  in accordance with the requirements of FRS 10: Goodwill and Intangible Assets,
  and is amortised on a straight line basis over its estimated useful life, which
  is up to 20 years. Purchased goodwill in respect of acquisitions before January
  1, 1998 was written off to reserves in the year of acquisition in accordance
  with the accounting standard then in force. When a subsequent disposal occurs
  any goodwill previously written off to reserves is written back through the
  profit and loss account.

#### Cash and cash equivalents

Cash, for the purpose of the cash flow statement, comprises cash in hand and
  deposits repayable on demand, less overdrafts payable on demand.

#### Derivative financial instruments

ITS uses various derivative financial instruments to manage its exposure to
  foreign exchange and interest rate risks. Derivative financial instruments are
  considered hedges if they meet certain criteria. A forward exchange contract
  is considered a hedge of an identifiable foreign currency commitment if such
  contract is designated as, and is effective as, a hedge of a firm foreign currency
  commitment. An interest rate swap agreement is considered a synthetic
  alteration (and accounted for like a hedge) when the agreement is designated
  with a specific liability and it alters the interest rate characteristics of
  such liability. An interest rate cap agreement must also meet the same criteria
  as an interest rate swap to be considered as a hedge of a specific liability.
  Derivative financial instruments failing to meet the aforementioned criteria
  are accounted for at fair value, with the resulting unrealised gains and losses
  included in the statement of operations.

Forward exchange contracts

Forward exchange contracts are designed as hedges of firm foreign currency
  commitments. Gains and losses on such contracts are deferred and recognised
  in income or as an adjustment of the carrying amount when the hedged transaction
  occurs.

Interest rate cap agreements

Interest rate cap agreements are accounted for under the accruals basis. Amounts
  receivable under the agreement are accrued when due as a reduction of interest
  charges. Premiums paid for purchased interest rate cap agreements are amortised
  to interest charges over the term of the caps.

Interest rate swaps

Interest rate swap agreements are designed to change the interest rate characteristics
  of floating-rate borrowings. Accordingly, these agreements are accounted for
  under the settlement basis. The interest differential between the amounts received
  and amount paid is recognised as an adjustment to interest charges over the
  term of the swap.

#### 2. Basis of preparation

The accompanying consolidated financial statements of the Company and its subsidiaries
  have been prepared in conformity with accounting principles generally accepted
  in the United Kingdom (U.K. GAAP) and are presented under the historical
  cost convention. These principles differ in certain material respects from generally
  accepted accounting principles in the United States (U.S. GAAP)
   see Note 30.

F-7

---





#### INTERTEK TESTING SERVICES LIMITED
  NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

2. Basis of preparation (continued)

The Directors have reviewed the Groups budget for the current year and
  outline projections for the subsequent year including cash flows and forecasts
  of headroom available against debt covenants. Following this review, the Directors
  have formed a judgement that, at the time of approval of the financial statements,
  the Group has sufficient resources to continue operating for the foreseeable
  future. For this reason, the Directors continue to prepare the financial statements
  on a going concern basis.

These consolidated financial statements do not constitute statutory accounts
  within the meaning of section 240 of the Companies Act 1985 for any of the three
  years ended December 31, 1998, 1999, and 2000. Statutory accounts for 1998 and
  1999 have been filed with the United Kingdom Registrar of Companies; the statutory
  accounts for 2000 will be filed following the companys annual general
  meeting. The auditors have reported on those accounts; their reports were unqualified
  and did not contain statements under section 237(2) or (3) of the Companies
  Act 1985.

#### 3. Segment information

ITS comprises four operating divisions which are organised as follows: (1)
  Caleb Brett, which tests and inspects crude oil, petroleum products and chemicals
  and agricultural produce; (2) ETL SEMKO, which tests and certifies electrical
  and electronic products, telecommunication equipment, building products and
  heating, ventilation and air conditioning equipment; (3) Labtest, which tests
  and inspects textiles, toys and other consumer products and (4) Foreign Trade
  Standards, which provides independent pre-shipment inspection services to governments.
  Central overheads comprise the costs of the corporate head office and non-operating
  holding companies. ITS sold its Bondar Clegg division in 2000 and the results
  to the date of sale are disclosed as a discontinued operation. Prior year results
  have been restated to reflect this disclosure. The Environmental Testing division
  which operated principally in the United States and the United Kingdom was sold
  in 1998 and its results to the date of sale are disclosed as a discontinued
  operation. The accounting policies of each division are the same as those described
  in the summary of accounting policies.

|By division                                            |  | Year ended
      December 31,
      1998
      £m |   | Year ended
      December 31,
      1999
      £m |   | Year ended
      December 31,
      2000
      £m |  
|------------------------------------------------------ |  | ------------------------------------------------- | - | ------------------------------------------------- | - | ------------------------------------------------- | -
|                                                      
|Revenues                                               |  |                                                   |   |                                                   |   |                                                   |  
|Caleb Brett                                            |  | 123.0                                             |   | 137.2                                             |   | 157.5                                             |  
|ETL SEMKO                                              |  | 84.9                                              |   | 88.2                                              |   | 99.5                                              |  
|Labtest                                                |  | 64.6                                              |   | 78.3                                              |   | 94.0                                              |  
|Foreign Trade Standards                                |  | 65.3                                              |   | 47.5                                              |   | 47.4                                              |  
|                                                       |  |                                                   |  
|Total continuing operations                            |  | 337.8                                             |   | 351.2                                             |   | 398.4                                             |  
|Bondar Clegg                                           |  | 16.5                                              |   | 11.3                                              |   | 0.7                                               |  
|Environmental Testing                                  |  | 5.5                                               |   |                                                  |   |                                                  |  
|                                                       |  |                                                   |  
|Total discontinued operations                          |  | 22.0                                              |   | 11.3                                              |   | 0.7                                               |  
|                                                       |  |                                                   |  
|Total                                                  |  | 359.8                                             |   | 362.5                                             |   | 399.1                                             |  
|                                                       |  |                                                   |  
|                                                      
|Operating income/(loss) before exceptional
      items
|Caleb Brett                                            |  | 13.4                                              |   | 14.8                                              |   | 16.6                                              |  
|ETL SEMKO                                              |  | 10.9                                              |   | 12.4                                              |   | 15.0                                              |  
|Labtest                                                |  | 16.9                                              |   | 21.6                                              |   | 27.8                                              |  
|Foreign Trade Standards                                |  | 8.0                                               |   | 3.1                                               |   | 5.8                                               |  
|Central overheads                                      |  | (4.4                                              | ) | (3.9                                              | ) | (5.2                                              | )
|                                                       |  |                                                   |  
|Total continuing operations                            |  | 44.8                                              |   | 48.0                                              |   | 60.0                                              |  
|Bondar Clegg                                           |  | (0.1                                              | ) | (2.1                                              | ) | (0.7                                              | )
|Environmental Testing                                  |  | (2.5                                              | ) |                                                  |   |                                                  |  
|                                                       |  |                                                   |  
|Total discontinued operations                          |  | (2.6                                              | ) | (2.1                                              | ) | (0.7                                              | )
|                                                       |  |                                                   |  
|Total                                                  |  | 42.2                                              |   | 45.9                                              |   | 59.3                                              |  
|                                                       |  |                                                   |  

F-8

---





#### INTERTEK TESTING SERVICES LIMITED
  NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

3. Segment information (continued)

|                                |  | Year ended
      December 31,
      1998
      £m |   | Year ended
      December 31,
      1999
      £m |   | Year ended
      December 31,
      2000
      £m |  
|------------------------------- |  | ------------------------------------------------- | - | ------------------------------------------------- | - | ------------------------------------------------- | -
|Operating exceptional items     |  |                                                   |   |                                                   |   |                                                   |  
|Foreign Trade Standards         |  | (12.2                                             | ) | 8.7                                               |   | 9.6                                               |  
|Caleb Brett                     |  | (1.8                                              | ) | 1.8                                               |   | (2.7                                              | )
|                                |  |                                                  
|Total continuing operations     |  | (14.0                                             | ) | 10.5                                              |   | 6.9                                               |  
|Bondar Clegg                    |  |                                                  |   | (2.2                                              | ) |                                                  |  
|Environmental Testing           |  | (5.2                                              | ) | (2.8                                              | ) | (7.8                                              | )
|                                |  |                                                  
|Total discontinued operations   |  | (5.2                                              | ) | (5.0                                              | ) | (7.8                                              | )
|                                |  |                                                  
|Total                           |  | (19.2                                             | ) | 5.5                                               |   | (0.9                                              | )
|                                |  |                                                  
|                               
|Non-operating exceptional items | 
|Caleb Brett                     |  |                                                  |   |                                                  |   | (0.5                                              | )
|ETL SEMKO                       |  |                                                  |   | 2.4                                               |   |                                                  |  
|Foreign Trade Standards         |  |                                                  |   |                                                  |   | (2.6                                              | )
|                                |  |                                                  
|Total continuing operations     |  |                                                  |   | 2.4                                               |   | (3.1                                              | )
|Bondar Clegg                    |  |                                                  |   |                                                  |   | (12.1                                             | )
|Environmental Testing           |  | (1.4                                              | ) |                                                  |   |                                                  |  
|                                |  |                                                  
|Discontinued operations         |  | (1.4                                              | ) |                                                  |   | (12.1                                             | )
|                                |  |                                                  
|Total                           |  | (1.4                                              | ) | 2.4                                               |   | (15.2                                             | )
|                                |  |                                                  
|                               
|Depreciation and amortisation   | 
|Caleb Brett                     |  | 4.1                                               |   | 4.7                                               |   | 5.6                                               |  
|ETL SEMKO                       |  | 3.1                                               |   | 3.4                                               |   | 4.7                                               |  
|Labtest                         |  | 1.5                                               |   | 2.0                                               |   | 2.8                                               |  
|Foreign Trade Standards         |  | 1.1                                               |   | 0.8                                               |   | 0.7                                               |  
|Central overheads               |  | 0.1                                               |   | 0.2                                               |   | 0.1                                               |  
|                                |  |                                                  
|Total continuing operations     |  | 9.9                                               |   | 11.1                                              |   | 13.9                                              |  
|Bondar Clegg                    |  | 1.1                                               |   | 1.0                                               |   | 0.2                                               |  
|Environmental Testing           |  | 0.5                                               |   |                                                  |   |                                                  |  
|                                |  |                                                  
|Total discontinued operations   |  | 1.6                                               |   | 1.0                                               |   | 0.2                                               |  
|                                |  |                                                  
|Total                           |  | 11.5                                              |   | 12.1                                              |   | 14.1                                              |  
|                                |  |                                                  
|                               
|Capital expenditure             | 
|Caleb Brett                     |  | 3.9                                               |   | 6.3                                               |   | 10.4                                              |  
|ETL SEMKO                       |  | 4.1                                               |   | 5.7                                               |   | 9.9                                               |  
|Labtest                         |  | 3.9                                               |   | 5.0                                               |   | 4.8                                               |  
|Foreign Trade Standards         |  | 0.7                                               |   | 0.4                                               |   | 0.9                                               |  
|Central overheads               |  | 0.1                                               |   |                                                  |   |                                                  |  
|                                |  |                                                  
|Total continuing operations     |  | 12.7                                              |   | 17.4                                              |   | 26.0                                              |  
|Bondar Clegg                    |  | 1.2                                               |   | 0.4                                               |   | 0.3                                               |  
|Environmental Testing           |  | 0.1                                               |   |                                                  |   |                                                  |  
|                                |  |                                                  
|Total discontinued operations   |  | 1.3                                               |   | 0.4                                               |   | 0.3                                               |  
|                                |  |                                                  
|Total                           |  | 14.0                                              |   | 17.8                                              |   | 26.3                                              |  
|                                |  |                                                  

#### Unallocated costs

Cash, borrowings and income tax are managed centrally and are therefore not
  allocated to the divisions. Interest expense and income and income tax expense
  are therefore not allocated to the divisions.

F-9

---





#### INTERTEK TESTING SERVICES LIMITED
  NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

3. Segment information (continued)

|                                                   |  | December 31,
      1999
      £m |   | December 31,
      2000
      £m |  
|-------------------------------------------------- |  | -------------------------------- | - | -------------------------------- | -
|                                                  
|Total assets                                       |  |                                  |   |                                  |  
|Caleb Brett                                        |  | 78.8                             |   | 93.4                             |  
|ETL SEMKO                                          |  | 48.7                             |   | 59.6                             |  
|Labtest                                            |  | 30.5                             |   | 36.4                             |  
|Foreign Trade Standards                            |  | 48.4                             |   | 43.6                             |  
|Central overheads                                  |  | 45.9                             |   | 61.6                             |  
|                                                   |  |                                 
|Sub total                                          |  | 252.3                            |   | 294.6                            |  
|Trading balances with other ITS group companies    |  | (89.2                            | ) | (85.3                            | )
|                                                   |  |                                 
|Total continuing operations                        |  | 163.1                            |   | 209.3                            |  
|Bondar Clegg                                       |  | 15.4                             |   |                                 |  
|Environmental Testing                              |  | 0.1                              |   |                                 |  
|                                                   |  |                                 
|Total discontinued operations                      |  | 15.5                             |   |                                 |  
|                                                   |  |                                 
|Total                                              |  | 178.6                            |   | 209.3                            |  
|                                                   |  |                                 
|                                                  
|Capital employed                                   | 
|Caleb Brett                                        |  | 40.4                             |   | 49.1                             |  
|ETL SEMKO                                          |  | 28.0                             |   | 29.4                             |  
|Labtest                                            |  | 13.9                             |   | 16.4                             |  
|Foreign Trade Standards                            |  | (2.1                             | ) | 0.6                              |  
|Central overheads                                  |  | 20.3                             |   | 26.7                             |  
|                                                   |  |                                 
|Total continuing operations                        |  | 100.5                            |   | 122.2                            |  
|Bondar Clegg                                       |  | 4.6                              |   |                                 |  
|Environmental Testing                              |  | (2.8                             | ) | (7.3                             | )
|                                                   |  |                                 
|Total discontinued operations                      |  | 1.8                              |   | (7.3                             | )
|                                                   |  |                                 
|Total                                              |  | 102.3                            |   | 114.9                            |  
|                                                   |  |                                 
|                                                  
|Reconciliation of capital employed to consolidated | 
|shareholders deficit                              | 
|Capital employed                                   |  | 102.3                            |   | 114.9                            |  
|Taxation                                           |  | (5.4                             | ) | (6.9                             | )
|Net borrowings                                     |  | (293.6                           | ) | (322.4                           | )
|Minority interest                                  |  | (5.8                             | ) | (6.3                             | )
|                                                   |  |                                 
|Consolidated shareholders deficit                 |  | (202.5                           | ) | (220.7                           | )
|                                                   |  |                                 

Central overheads comprises assets not attributable to the operating divisions,
  principally cash.

F-10

---





#### INTERTEK TESTING SERVICES LIMITED
  NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

3. Segment information (continued)

|By geographic area                                     |  | December 31,
      1999
      £m |   | December 31,
      2000
      £m |  
|------------------------------------------------------ |  | -------------------------------- | - | -------------------------------- | -
|                                                      
|Total assets                                           |  |                                  |   |                                  |  
|Americas                                               |  | 93.4                             |   | 103.9                            |  
|Europe, Africa and Middle East                         |  | 122.4                            |   | 141.4                            |  
|Asia and Far East                                      |  | 36.5                             |   | 49.3                             |  
|Trading balances due from other ITS group companies    |  | (89.2                            | ) | (85.3                            | )
|                                                       |  |                                 
|Total continuing operations                            |  | 163.1                            |   | 209.3                            |  
|Total discontinued operations                          |  | 15.5                             |   |                                 |  
|                                                       |  |                                 
|Total                                                  |  | 178.6                            |   | 209.3                            |  
|                                                       |  |                                 
|                                                       | 
|Total assets in significant countries                  | 
|United States                                          |  | 72.5                             |   | 86.4                             |  
|United Kingdom                                         |  | 45.6                             |   | 69.0                             |  
|Others (each under 10% of total)                       |  | 134.2                            |   | 139.2                            |  
|Trading balances due from other ITS group companies    |  | (89.2                            | ) | (85.3                            | )
|                                                       |  |                                 
|Total continuing operations                            |  | 163.1                            |   | 209.3                            |  
|Total discontinued operations                          |  | 15.5                             |   |                                 |  
|                                                       |  |                                 
|Total                                                  |  | 178.6                            |   | 209.3                            |  
|                                                       |  |                                 
|                                                       | 
|Property, plant and equipment                          | 
|Americas                                               |  | 24.5                             |   | 32.4                             |  
|Europe, Africa and Middle East                         |  | 17.6                             |   | 22.3                             |  
|Asia and Far East                                      |  | 9.5                              |   | 13.2                             |  
|                                                       |  |                                 
|Total continuing operations                            |  | 51.6                             |   | 67.9                             |  
|Total discontinued operations                          |  | 2.2                              |   |                                 |  
|                                                       |  |                                 
|Total                                                  |  | 53.8                             |   | 67.9                             |  
|                                                       |  |                                 
|                                                       | 
|Property, plant and equipment in significant countries | 
|United States                                          |  | 21.2                             |   | 27.5                             |  
|United Kingdom                                         |  | 5.0                              |   | 9.6                              |  
|Sweden                                                 |  | 5.5                              |   | 5.2                              |  
|Others (each under 10% of total)                       |  | 19.9                             |   | 25.6                             |  
|                                                       |  |                                 
|Total continuing operations                            |  | 51.6                             |   | 67.9                             |  
|Total discontinued operations                          |  | 2.2                              |   |                                 |  
|                                                       |  |                                 
|Total                                                  |  | 53.8                             |   | 67.9                             |  
|                                                       |  |                                 

F-11

---





#### INTERTEK TESTING SERVICES LIMITED
  NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

3. Segment information (continued)

|                                                                                       |  | Year ended
      December 31,
      1998
      £m |   | Year ended
      December 31,
      1999
      £m |   | Year ended
      December 31,
      2000
      £m |  
|-------------------------------------------------------------------------------------- |  | ------------------------------------------------- | - | ------------------------------------------------- | - | ------------------------------------------------- | -
|                                                                                      
|Revenues by geographic origin                                                          |  |                                                   |   |                                                   |   |                                                   |  
|Americas                                                                               |  | 137.0                                             |   | 143.3                                             |   | 163.5                                             |  
|Europe, Africa and Middle East                                                         |  | 126.5                                             |   | 117.7                                             |   | 120.4                                             |  
|Asia and Far East                                                                      |  | 74.3                                              |   | 90.2                                              |   | 114.5                                             |  
|                                                                                       |  |                                                  
|Total continuing operations                                                            |  | 337.8                                             |   | 351.2                                             |   | 398.4                                             |  
|Total discontinued operations                                                          |  | 22.0                                              |   | 11.3                                              |   | 0.7                                               |  
|                                                                                       |  |                                                  
|Total                                                                                  |  | 359.8                                             |   | 362.5                                             |   | 399.1                                             |  
|                                                                                       |  |                                                  
|                                                                                       | 
|Revenues from significant countries of origin                                          | 
|United States                                                                          |  | 114.2                                             |   | 119.1                                             |   | 133.7                                             |  
|United Kingdom                                                                         |  | 65.2                                              |   | 51.6                                              |   | 56.0                                              |  
|Hong Kong                                                                              |  | 39.0                                              |   | 44.4                                              |   | 54.2                                              |  
|Others (each under 10% of total)                                                       |  | 119.4                                             |   | 136.1                                             |   | 154.5                                             |  
|                                                                                       |  |                                                  
|Total continuing operations                                                            |  | 337.8                                             |   | 351.2                                             |   | 398.4                                             |  
|Total discontinued operations                                                          |  | 22.0                                              |   | 11.3                                              |   | 0.7                                               |  
|                                                                                       |  |                                                  
|Total                                                                                  |  | 359.8                                             |   | 362.5                                             |   | 399.1                                             |  
|                                                                                       |  |                                                  
|                                                                                       | 
|Operating income/(loss) before exceptional
      items                                
|Americas                                                                               |  | 12.0                                              |   | 10.2                                              |   | 15.0                                              |  
|Europe, Africa and Middle East                                                         |  | 11.5                                              |   | 9.8                                               |   | 9.5                                               |  
|Asia and Far East                                                                      |  | 21.3                                              |   | 28.0                                              |   | 35.5                                              |  
|                                                                                       |  |                                                  
|Total continuing operations                                                            |  | 44.8                                              |   | 48.0                                              |   | 60.0                                              |  
|Total discontinued operations                                                          |  | (2.6                                              | ) | (2.1                                              | ) | (0.7                                              | )
|                                                                                       |  |                                                  
|Total                                                                                  |  | 42.2                                              |   | 45.9                                              |   | 59.3                                              |  
|                                                                                       |  |                                                  
|                                                                                       | 
|Operating income/(loss) before exceptional 
          items from significant countries | 
|United States                                                                          |  | 9.3                                               |   | 8.9                                               |   | 12.0                                              |  
|United Kingdom                                                                         |  | 3.5                                               |   | (0.6                                              | ) | (1.7                                              | )
|Hong Kong                                                                              |  | 10.7                                              |   | 14.0                                              |   | 19.1                                              |  
|Others (each under 10% of total)                                                       |  | 21.3                                              |   | 25.7                                              |   | 30.6                                              |  
|                                                                                       |  |                                                  
|Total continuing operations                                                            |  | 44.8                                              |   | 48.0                                              |   | 60.0                                              |  
|Total discontinued operations                                                          |  | (2.6                                              | ) | (2.1                                              | ) | (0.7                                              | )
|                                                                                       |  |                                                  
|Total                                                                                  |  | 42.2                                              |   | 45.9                                              |   | 59.3                                              |  
|                                                                                       |  |                                                  

F-12

---





#### INTERTEK TESTING SERVICES LIMITED
  NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

3. Segment information (continued)

|                                                |  | Year ended
      December 31,
      1998
      £m |  | Year ended
      December 31,
      1999
      £m |  | Year ended
      December 31,
      2000
      £m | 
|----------------------------------------------- |  | ------------------------------------------------- |  | ------------------------------------------------- |  | ------------------------------------------------- | 
|                                               
|Revenues by geographic area of destination      |  |                                                   |  |                                                   |  |                                                   | 
|Americas                                        |  | 140.8                                             |  | 148.1                                             |  | 170.7                                             | 
|Europe, Africa and Middle East                  |  | 120.7                                             |  | 111.9                                             |  | 111.0                                             | 
|Asia and Far East                               |  | 76.3                                              |  | 91.2                                              |  | 116.7                                             | 
|                                                |  |                                                  
|Total continuing operations                     |  | 337.8                                             |  | 351.2                                             |  | 398.4                                             | 
|Total discontinued operations                   |  | 22.0                                              |  | 11.3                                              |  | 0.7                                               | 
|                                                |  |                                                  
|Total                                           |  | 359.8                                             |  | 362.5                                             |  | 399.1                                             | 
|                                                |  |                                                  
|                                               
|Revenues from significant destination countries
|United States                                   |  | 111.3                                             |  | 117.1                                             |  | 131.3                                             | 
|Hong Kong                                       |  | 38.2                                              |  | 43.6                                              |  | 51.5                                              | 
|Others (each under 10% of total)                |  | 188.3                                             |  | 190.5                                             |  | 215.6                                             | 
|                                                |  |                                                  
|Total continuing operations                     |  | 337.8                                             |  | 351.2                                             |  | 398.4                                             | 
|Total discontinued operations                   |  | 22.0                                              |  | 11.3                                              |  | 0.7                                               | 
|                                                |  |                                                  
|Total                                           |  | 359.8                                             |  | 362.5                                             |  | 399.1                                             | 
|                                                |  |                                                  

#### 4. Operating costs and gross profit

|                      |  | Year ended
      December 31,
      1998
      £m |  | Year ended
      December 31,
      1999
      £m |  | Year ended
      December 31,
      2000
      £m | 
|--------------------- |  | ------------------------------------------------- |  | ------------------------------------------------- |  | ------------------------------------------------- | 
|                     
|Cost of sales         |  | 292.1                                             |  | 292.0                                             |  | 313.3                                             | 
|Administrative costs  |  | 44.7                                              |  | 19.4                                              |  | 28.3                                              | 
|                      |  |                                                  
|Total operating costs |  | 336.8                                             |  | 311.4                                             |  | 341.6                                             | 
|                      |  |                                                  
|                      |  |                                                   |  |                                                   |  |                                                   | 
|Gross profit          |  | 67.7                                              |  | 70.5                                              |  | 85.8                                              | 
|                      |  |                                                  

Gross profit is total revenues less cost of sales. Administrative costs comprise
  the following:

|Administrative costs before exceptional items |  | 25.5 |  | 24.9 |   | 27.4 | 
|--------------------------------------------- |  | ---- |  | ---- | - | ---- | 
|Operating exceptional items (note 5)          |  | 19.2 |  | (5.5 | ) | 0.9  | 
|                                              |  |     
|Total administrative costs                    |  | 44.7 |  | 19.4 |   | 28.3 | 
|                                              |  |     

Administrative costs comprise expenses incurred at the head office and the
  regional offices of each division. All expenses incurred at other operating
  locations are included in cost of sales.

F-13

---





#### INTERTEK TESTING SERVICES LIMITED
  NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

#### 5. Exceptional items

|                                      |  | Year ended
      December 31,
      1998
      £m |   | Year ended
      December 31,
      1999
      £m |   | Year ended
      December 31,
      2000
      £m |  
|------------------------------------- |  | ------------------------------------------------- | - | ------------------------------------------------- | - | ------------------------------------------------- | -
|                                     
|Operating exceptional items           |  |                                                   |   |                                                   |   |                                                   |  
|Foreign Trade Standards               |  |                                                   |   |                                                   |   |                                                   |  
|Nigeria                               |  | (12.2                                             | ) | 11.3                                              |   | 9.6                                               |  
|Restructuring                         |  |                                                  |   | (2.6                                              | ) |                                                  |  
|                                      |  |                                                  
|                                      |  | (12.2                                             | ) | 8.7                                               |   | 9.6                                               |  
|                                     
|Caleb Brett                           | 
|Nigeria                               |  | (1.8                                              | ) | 1.8                                               |   |                                                  |  
|EPA fine and costs                    |  |                                                  |   |                                                  |   | (2.7                                              | )
|                                      |  |                                                  
|Total continuing operations           |  | (14.0                                             | ) | 10.5                                              |   | 6.9                                               |  
|Bondar Clegg                          |  |                                                  |   | (2.2                                              | ) |                                                  |  
|Environmental Testing                 |  | (5.2                                              | ) | (2.8                                              | ) | (7.8                                              | )
|                                      |  |                                                  
|Discontinued operations               |  | (5.2                                              | ) | (5.0                                              | ) | (7.8                                              | )
|                                      |  |                                                  
|Total operating exceptional items     |  | (19.2                                             | ) | 5.5                                               |   | (0.9                                              | )
|                                      |  |                                                  
|                                     
|Non-operating exceptional items       | 
|Caleb Brett                           |  |                                                  |   |                                                  |   | (0.5                                              | )
|ETL SEMKO                             |  |                                                  |   | 2.4                                               |   |                                                  |  
|Foreign Trade Standards               |  |                                                  |   |                                                  |   | (2.6                                              | )
|                                      |  |                                                  
|Total continuing operations           |  |                                                  |   | 2.4                                               |   | (3.1                                              | )
|Bondar Clegg                          |  |                                                  |   |                                                  |   | (12.1                                             | )
|Environmental Testing                 |  | (1.4                                              | ) |                                                  |   |                                                  |  
|                                      |  |                                                  
|Discontinued operations               |  | (1.4                                              | ) |                                                  |   | (12.1                                             | )
|                                      |  |                                                  
|Total non-operating exceptional items |  | (1.4                                              | ) | 2.4                                               |   | (15.2                                             | )
|                                      |  |                                                  

Due to the irregular nature of payments received from the Nigerian government
  for pre-shipment inspection work carried out by FTS, in 1997, ITS adopted a
  policy of making full provision against invoices issued to this client and only
  reversing the provision when cash is received. On March 31, 1999 the Nigerian
  Government cancelled its pre-shipment inspection programmes. In September 1999,
  the new government re-introduced a pre-shipment inspection programme. FTS is
  participating in this programme but in a much smaller capacity than the previous
  programmes. In view of the regular payments received from the government and
  the reduced debt exposure, from July 2000 we stopped making exceptional provisions
  for unpaid invoices issued in respect of the new government pre-inspection programme.
  The tax effect of the exceptional credit to income in 2000 was £nil (1999:
  £nil and 1998: £1.9 million).

The exceptional charge to operating income, of £2.6 million in 1999 in
  respect of FTS is a result of restructuring this division following the termination
  of the old inspection programmes in Nigeria. The tax effect of this exceptional
  charge to income in 1999 was £0.1 million.

Until March 1999, the Caleb Brett division also provided testing services to
  the Nigerian Government and the policy of making full provision against invoices
  issued to this client and only reversing the provision when cash was received
  was also adopted. The tax effect of the exceptional credit to income was £nil
  in 1999 and 1998.

The Caleb Brett division is being investigated by the Environmental Protection
  Agency in Linden, New Jersey and in Puerto Rico. The exceptional charge of £2.7
  million related to legal costs of £1.0 million in 2000 and further expected
  costs of £1.0 million in 2001. In addition, we have agreed to pay a fine
  of £0.7 million to conclude the Linden investigation. The tax effect of
  this exceptional charge was £nil.

The exceptional charge to operating income of £2.2 million for Bondar
  Clegg in 1999 related to restructuring costs. The tax effect of this exceptional
  charge was £nil.

F-14

---





#### INTERTEK TESTING SERVICES LIMITED
  NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

5. Exceptional items (continued)

The exceptional charge to operating income of £7.8 million (1999: £2.8
  million and 1998: £5.2 million) for Environmental Testing was primarily
  for legal costs relating to the ongoing investigation by the Environmental Protection
  Agency (See note 27). The tax effect of this exceptional charge was £nil
  (1999: £nil and 1998: £nil).

During 2000, Caleb Brett sold a small loss adjusting business in Chile for
  £0.2 million. Goodwill of £0.6 million that was previously written
  off to reserves was transferred to the profit and loss account, resulting in
  an exceptional charge of £0.4 million. Caleb Brett also incurred an exceptional
  charge of £0.1 million, when an investment in a small company in Thailand
  in which we had a 49% interest, was liquidated. The tax effect of this exceptional
  charge was £nil.

During 2000, FTS sold its technical services business in the United States
  for its net asset value of £1.0 million. Goodwill of £2.6 million
  that was previously written off to reserves was transferred to the profit and
  loss account, resulting in an exceptional charge of £2.6 million. The tax
  effect of this exceptional charge was £nil.

During 1999, ETL SEMKO disposed of a non-core activity in the United States
  that generated an exceptional credit of £2.2 million. This credit was after
  deducting attributable goodwill of £1.1 million from the disposal proceeds
  of £3.3 million. The tax effect of this exceptional credit was £nil.
  ETL SEMKO sold 51% of its Quality Management business in Sweden for £0.2
  million. This generated an exceptional credit of £0.1 million. The tax
  effect of this exceptional credit was £0.1 million. ETL SEMKO sold 20%
  of its stake in a testing and certification facility in the United Kingdom for
  £0.2 million. This generated an exceptional credit of £0.1 million.
  The tax effect of this exceptional credit was £nil.

The non-operating exceptional charge of £1.4 million for Environmental
  Testing in 1998 related to the loss on disposal of Environmental operations
  in the United States and the United Kingdom and closure costs. There was no
  related tax impact.

Our minerals testing division, Bondar Clegg, ceased operating at the beginning
  of 2000. The businesses in North and South America, Ghana and Mali were sold
  for £1.5 million and we received £0.2 million for the sale of assets
  in Africa. We incurred termination and closure costs of £1.0 million. The
  disposals and closure of Bondar Clegg generated a net loss of £5.2 million.
  Goodwill of £6.9 million that was previously written off to reserves was
  charged to the profit and loss account, resulting in an exceptional charge of
  £12.1 million. The tax effect of this exceptional charge was £nil.

#### 6. Operating income

|                                           |  | Year ended
      December 31,
      1998
      £m |  | Year ended
      December 31,
      1999
      £m |  | Year ended
      December 31,
      2000
      £m | 
|------------------------------------------ |  | ------------------------------------------------- |  | ------------------------------------------------- |  | ------------------------------------------------- | 
|                                          
|Operating income is stated after charging: |  |                                                   |  |                                                   |  |                                                   | 
|Depreciation of tangible assets            |  | 11.1                                              |  | 11.3                                              |  | 13.0                                              | 
|Amortisation of intangible goodwill        |  | 0.4                                               |  | 0.8                                               |  | 1.1                                               | 
|Directors emoluments                      |  | 0.8                                               |  | 0.8                                               |  | 0.8                                               | 
|Staff costs                                |  | 155.1                                             |  | 168.2                                             |  | 178.0                                             | 
|Leasing and hire charges                   |  | 15.9                                              |  | 17.5                                              |  | 18.1                                              | 
|Auditors remuneration:                    | 
|Group - as auditors                        |  | 0.5                                               |  | 0.6                                               |  | 0.6                                               | 
|Group - other services                     |  | 0.1                                               |  | 0.3                                               |  | 0.2                                               | 
|Company - as auditors                      |  |                                                  |  |                                                  |  |                                                  | 

F-15

---





#### INTERTEK TESTING SERVICES LIMITED
  NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

#### 7. Net interest expense

|                                         |  | Year ended
      December 31,
      1998
      £m |   | Year ended
      December 31,
      1999
      £m |   | Year ended
      December 31,
      2000
      £m |  
|---------------------------------------- |  | ------------------------------------------------- | - | ------------------------------------------------- | - | ------------------------------------------------- | -
|                                        
|Interest expense and other charges       |  |                                                   |   |                                                   |   |                                                   |  
|Senior Subordinated Notes                |  | 12.4                                              |   | 12.8                                              |   | 13.7                                              |  
|Parent Subordinated PIK Debentures       |  | 7.2                                               |   | 8.3                                               |   | 10.3                                              |  
|Senior Term Loan A                       |  | 6.7                                               |   | 5.5                                               |   | 5.1                                               |  
|Senior Term Loan B                       |  | 3.1                                               |   | 3.0                                               |   | 3.1                                               |  
|Senior Revolver                          |  | 0.6                                               |   | 0.4                                               |   | 0.8                                               |  
|Other borrowings                         |  | 0.7                                               |   | 0.8                                               |   | 0.8                                               |  
|Foreign exchange gains on external loans |  | 0.1                                               |   | 0.1                                               |   | 0.4                                               |  
|Amortisation of debt issuance costs      |  | 1.9                                               |   | 2.0                                               |   | 2.1                                               |  
|                                         |  |                                                  
|Interest expense                         |  | 32.7                                              |   | 32.9                                              |   | 36.3                                              |  
|Interest income on bank balances         |  | (0.9                                              | ) | (0.7                                              | ) | (0.5                                              | )
|                                         |  |                                                  
|Net interest expense                     |  | 31.8                                              |   | 32.2                                              |   | 35.8                                              |  
|                                         |  |                                                  

#### 8. Taxation

|                                                  |  | Year ended
      December 31,
      1998
      £m |   | Year ended
      December 31,
      1999
      £m |   | Year ended
      December 31,
      2000
      £m |  
|------------------------------------------------- |  | ------------------------------------------------- | - | ------------------------------------------------- | - | ------------------------------------------------- | -
|                                                 
|U.K Corporation tax on profit ordinary activities |  | 0.5                                               |   | 0.5                                               |   | 0.5                                               |  
|Double taxation relief                            |  | (0.4                                              | ) | (0.5                                              | ) | (0.5                                              | )
|                                                  |  |                                                  
|                                                  |  | 0.1                                               |   |                                                  |   |                                                  |  
|Overseas taxes                                    |  | 8.1                                               |   | 7.2                                               |   | 10.6                                              |  
|Transfer (from)/to deferred taxation              |  | (1.1                                              | ) | 1.8                                               |   | (0.3                                              | )
|Adjustments to prior year liabilities             |  |                                                  |   | 0.2                                               |   | 0.2                                               |  
|                                                  |  |                                                  
|                                                  |  | 7.1                                               |   | 9.2                                               |   | 10.5                                              |  
|Associated companies                              |  | 0.1                                               |   | 0.2                                               |   | 0.4                                               |  
|                                                  |  |                                                  
|                                                  |  | 7.2                                               |   | 9.4                                               |   | 10.9                                              |  
|                                                  |  |                                                  

The following table sets out the reconciliation of the notional tax charge
  at U.K. standard rate to the actual tax charge:

|(Loss)/income before taxation                 |  | (10.2 | ) | 21.6 |   | 7.4  |  
|--------------------------------------------- |  | ----- | - | ---- | - | ---- | -
|                                              |  |      
|Notional tax (credit)/charge at U.K. standard | 
|rate 30% (1999: 30.25% and 1998: 31%)         |  | (3.1  | ) | 6.5  |   | 2.2  |  
|Differences in overseas tax rates             |  | (1.7  | ) | (1.4 | ) | (1.8 | )
|Tax on dividends                              |  | 0.4   |   | 0.7  |   | 1.1  |  
|Permanent differences - disallowables         |  | 1.2   |   | 0.3  |   | 5.9  |  
|Permanent differences - untaxed income        |  | (0.9  | ) | (0.5 | ) | (0.3 | )
|Unprovided deferred tax                       |  | 10.3  |   | 4.5  |   | 2.8  |  
|Other                                         |  | 1.0   |   | (0.7 | ) | 1.0  |  
|                                              |  |      
|                                              |  | 7.2   |   | 9.4  |   | 10.9 |  
|                                              |  |      

F-16

---





#### INTERTEK TESTING SERVICES LIMITED
  NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

#### 9. Goodwill

|                         |  | Total
      £m |  
|------------------------ |  | -------------- | -
|                        
|Cost                     |  |                |  
|                        
|At December 31, 1998     |  | 13.4           |  
|Additions                |  | 4.1            |  
|Exchange adjustments     |  | (0.5           | )
|                         |  |               
|At December 31, 1999     |  | 17.0           |  
|                        
|Additions                |  | 2.2            |  
|Exchange adjustments     |  | (0.2           | )
|                         |  |               
|At December 31, 2000     |  | 19.0           |  
|                         |  |               
|                        
|Accumulated amortisation | 
|                        
|At December 31, 1998     |  | 0.4            |  
|Charged for the year     |  | 0.8            |  
|                         |  |               
|At December 31, 1999     |  | 1.2            |  
|                        
|Charged for the year     |  | 1.1            |  
|Exchange adjustments     |  | (0.1           | )
|                         |  |               
|At December 31, 2000     |  | 2.2            |  
|                         |  |               
|                        
|Net book value           | 
|                        
|At December 31, 1998     |  | 13.0           |  
|                         |  |               
|                        
|At December 31, 1999     |  | 15.8           |  
|                         |  |               
|                        
|At December 31, 2000     |  | 16.8           |  
|                         |  |               

Purchased goodwill is amortised to £nil in equal instalments over the
  Directors estimate of its useful life, not exceeding 20 years.

F-17

---





#### INTERTEK TESTING SERVICES LIMITED
  NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

#### 10. Property, plant and equipment

|                         |  | Land and
      Buildings
      £m |   | Plant and
      machinery
      £m |   | Total
      £m |  
|------------------------ |  | --------------------------------- | - | ---------------------------------- | - | -------------- | -
|                        
|Cost                     |  |                                   |   |                                    |   |                |  
|                        
|At December 31, 1998     |  | 9.5                               |   | 57.8                               |   | 67.3           |  
|                         |  |                                  
|                        
|Exchange adjustments     |  | (0.2                              | ) | 2.2                                |   | 2.0            |  
|Acquisitions             |  |                                  |   | 1.4                                |   | 1.4            |  
|Additions                |  |                                  |   | 17.7                               |   | 17.7           |  
|Transfers                |  |                                  |   | (0.3                               | ) | (0.3           | )
|Disposals                |  |                                  |   | (4.9                               | ) | (4.9           | )
|                         |  |                                  
|At December 31, 1999     |  | 9.3                               |   | 73.9                               |   | 83.2           |  
|                        
|Exchange adjustments     |  | (0.1                              | ) | 5.7                                |   | 5.6            |  
|Acquisitions             |  |                                  |   | 0.6                                |   | 0.6            |  
|Additions                |  | 0.1                               |   | 26.3                               |   | 26.4           |  
|Disposals                |  |                                  |   | (9.6                               | ) | (9.6           | )
|                         |  |                                  
|At December 31, 2000     |  | 9.3                               |   | 96.9                               |   | 106.2          |  
|                         |  |                                  
|                        
|Accumulated depreciation | 
|                         |  |                                   |   |                                    |   |               
|At December 31, 1998     |  | (0.6                              | ) | (20.8                              | ) | (21.4          | )
|                         |  |                                  
|Exchange adjustments     |  |                                  |   | (1.4                               | ) | (1.4           | )
|Charged for the year     |  | (0.2                              | ) | (11.1                              | ) | (11.3          | )
|Transfers                |  |                                  |   | 0.1                                |   | 0.1            |  
|Disposals                |  |                                  |   | 4.6                                |   | 4.6            |  
|                         |  |                                  
|At December 31, 1999     |  | (0.8                              | ) | (28.6                              | ) | (29.4          | )
|                        
|Exchange adjustments     |  |                                  |   | (3.2                               | ) | (3.2           | )
|Charged for the year     |  | (0.3                              | ) | (12.7                              | ) | (13.0          | )
|Disposals                |  |                                  |   | 7.3                                |   | 7.3            |  
|                         |  |                                  
|At December 31, 2000     |  | (1.1                              | ) | (37.2                              | ) | (38.3          | )
|                         |  |                                  
|                        
|Net book value           | 
|                        
|At December 31, 1998     |  | 8.9                               |   | 37.0                               |   | 45.9           |  
|                         |  |                                  
|                        
|At December 31, 1999     |  | 8.5                               |   | 45.3                               |   | 53.8           |  
|                         |  |                                  
|                        
|At December 31, 2000     |  | 8.2                               |   | 59.7                               |   | 67.9           |  
|                         |  |                                  

F-18

---





#### INTERTEK TESTING SERVICES LIMITED
  NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

#### 11. Investments

Investments consist of investments in associated undertakings.

|                                 |  | Total
      £m |  
|-------------------------------- |  | -------------- | -
|                                
|At December 31, 1998             |  | 0.2            |  
|Exchange adjustment              |  | (0.1           | )
|Transfer from minority interests |  | 0.7            |  
|Dividends received               |  | (0.4           | )
|Retained profit for the year     |  | 0.1            |  
|                                 |  |               
|At December 31, 1999             |  | 0.5            |  
|                                
|Sale of associate interest       |  | 0.3            |  
|Dividends received               |  | (0.4           | )
|Retained profit for the year     |  | 0.5            |  
|                                 |  |               
|At December 31, 2000             |  | 0.9            |  
|                                 |  |               

#### 12. Trade receivables

Trade receivables are shown net of the following allowances for doubtful receivables:

|                             |  | Balance at
      beginning of
      period
      £m |  | Exchange
      adjustments
      £m |   | Receivables
      recovered
      £m |   | New
      provisions
      £m |  | Receivables
      written off
      £m |   | Balance at
      end of period
      £m | 
|---------------------------- |  | --------------------------------------------------- |  | ----------------------------------- | - | ------------------------------------ | - | ----------------------------- |  | -------------------------------------- | - | --------------------------------------- | 
|                            
|Year ended December 31, 1999 |  |                                                     |  |                                     |   |                                      |   |                               |  |                                        |   |                                         | 
|Nigerian government          |  | 25.5                                                |  | 1.0                                 |   | (21.6                                | ) | 8.5                           |  |                                       |   | 13.4                                    | 
|Other clients                |  | 4.6                                                 |  |                                    |   | (1.5                                 | ) | 3.8                           |  | (1.6                                   | ) | 5.3                                     | 
|                             |  |                                                    
|Total                        |  | 30.1                                                |  | 1.0                                 |   | (23.1                                | ) | 12.3                          |  | (1.6                                   | ) | 18.7                                    | 
|                             |  |                                                    
|                            
|Year ended December 31, 2000 | 
|Nigerian government          |  | 13.4                                                |  | 0.9                                 |   | (12.2                                | ) | 2.6                           |  |                                       |   | 4.7                                     | 
|Other clients                |  | 5.3                                                 |  | (0.7                                | ) | (2.5                                 | ) | 5.3                           |  | (3.0                                   | ) | 4.4                                     | 
|                             |  |                                                    
|Total                        |  | 18.7                                                |  | 0.2                                 |   | (14.7                                | ) | 7.9                           |  | (3.0                                   | ) | 9.1                                     | 
|                             |  |                                                    

F-19

---





#### INTERTEK TESTING SERVICES LIMITED
  NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

#### 13. Other current assets

|                               |  | December 31,
      1999
      £m |  | December 31,
      2000
      £m | 
|------------------------------ |  | -------------------------------- |  | -------------------------------- | 
|                              
|Assets held for resale         |  | 0.2                              |  | 0.2                              | 
|Other receivables              |  | 6.8                              |  | 10.1                             | 
|Prepayments and accrued income |  | 8.6                              |  | 8.8                              | 
|                               |  |                                 
|                               |  | 15.6                             |  | 19.1                             | 
|                               |  |                                 

Within other receivables is £2.2 million due in more than one year (1999:
  £2.3 million).

#### 14. Inventories

|                 |  | December 31,
      1999
      £m |  | December 31,
      2000
      £m | 
|---------------- |  | -------------------------------- |  | -------------------------------- | 
|                
|Raw materials    |  | 1.4                              |  | 0.5                              | 
|Work in progress |  | 0.4                              |  | 0.4                              | 
|Finished goods   |  | 0.8                              |  | 0.8                              | 
|                 |  |                                 
|                 |  | 2.6                              |  | 1.7                              | 
|                 |  |                                 

#### 15. Borrowings

|                                   |  | December 31,
      1999
      £m |  | December 31,
      2000
      £m | 
|---------------------------------- |  | -------------------------------- |  | -------------------------------- | 
|                                  
|Due in less than one year:         |  |                                  |  |                                  | 
|Senior Term Loan A                 |  | 4.7                              |  | 12.1                             | 
|Senior Revolver                    |  | 10.4                             |  | 10.0                             | 
|Other borrowings                   |  | 0.3                              |  |                                 | 
|                                   |  |                                 
|                                   |  | 15.4                             |  | 22.1                             | 
|                                   |  |                                 
|                                  
|Due in more than one year:         | 
|Senior Term Loan A                 |  | 54.7                             |  | 46.0                             | 
|Senior Term Loan B                 |  | 33.7                             |  | 34.7                             | 
|Senior Subordinated Notes          |  | 120.9                            |  | 133.5                            | 
|Parent Subordinated PIK Debentures |  | 68.6                             |  | 86.1                             | 
|Other borrowings                   |  | 0.3                              |  |                                 | 
|                                   |  |                                 
|                                   |  | 278.2                            |  | 300.3                            | 
|                                   |  |                                 

F-20

---





#### INTERTEK TESTING SERVICES LIMITED
  NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

15. Borrowings (continued)

#### Maturity of borrowings:

|                        |  | Senior Term
      Loan A
      £m |   | Senior Term
      Loan B
      £m |   | Senior
      Resolver 
      £m |  | Senior
      Subordinated
      Notes 
      £m |   | Parent
      Subordinated
      PIK Debentures£m |   | Total
      borrowings£m |  
|----------------------- |  | --------------------------------- | - | --------------------------------- | - | ------------------------------- |  | ----------------------------------------------- | - | ------------------------------------------------ | - | ------------------------ | -
|                       
|Due in less than 1 year |  | 12.8                              |   |                                  |   | 10.0                            |  |                                                |   |                                                 |   | 22.8                     |  
|Due in 1 to 2 years     |  | 15.3                              |   |                                  |   |                                |  |                                                |   |                                                 |   | 15.3                     |  
|Due in 2 and 5 years    |  | 31.7                              |   | 35.5                              |   |                                |  |                                                |   |                                                 |   | 67.2                     |  
|Due in over 5 years     |  |                                  |   |                                  |   |                                |  | 138.1                                           |   | 87.5                                             |   | 225.6                    |  
|                        |  |                                  
|                        |  | 59.8                              |   | 35.5                              |   | 10.0                            |  | 138.1                                           |   | 87.5                                             |   | 330.9                    |  
|Debt issuance costs     |  | (1.7                              | ) | (0.8                              | ) |                                |  | (4.6                                            | ) | (1.4                                             | ) | (8.5                     | )
|                        |  |                                  
|                        |  | 58.1                              |   | 34.7                              |   | 10.0                            |  | 133.5                                           |   | 86.1                                             |   | 322.4                    |  
|                        |  |                                  

#### Description of borrowings

(a) Senior Term Loans

In November 1996, the Company entered into a credit agreement (the Credit
  Agreement) comprising a £125.0 million Term Loan Facility (the Term
  Loan Facility), split into a £85.0 million multicurrency Term A Facility
  (the Term A Facility), a £40.0 million multicurrency Term B
  Facility (the Term B Facility) and a $48.8 million multicurrency
  Revolving Credit Facility. The Term A Facility amortises over seven years with
  the final repayment on December 15, 2003 and the Term B Facility is repayable
  in two equal instalments in June and December 2004. The commitments under the
  Revolving Credit Facility terminate on December 15, 2003.

Borrowings under the Credit Agreement are secured by substantially all the
  tangible and intangible assets of the Company.

Term A Loans and advances under the Revolving Credit Facility initially bear
  interest at a rate equal to LIBOR (as adjusted) plus 2.00%. The margin over
  LIBOR may be reduced, initially to 1.75% and then to 1.5%, following satisfaction
  of certain financial performance tests. The directors, believe the margin over
  LIBOR will be reduced to 1.75% from the next interest period following the filing
  of this Annual Report

Term B Loans bear interest at a rate equal to LIBOR (as adjusted) plus 2.75%.
  Overdue amounts on the Term A Loans, the Term B Loans and the Revolving Credit
  Facility will bear interest at the applicable interest rate plus 1.00% per annum
  (see note 30).

(b) Senior Subordinated Notes

In November 1996, the Company issued US $203.0 million principal amount of
  Senior Subordinated Notes (the Notes). The cash consideration received
  at the date of issue was £123,547,000. The Notes mature at par on November
  1, 2006. Interest on the Notes accrues at the rate of 10.25% per annum and is
  payable semi-annually in cash on each May 1 and November 1. The Notes are redeemable,
  in whole, or in part, at the Companys option at any time on or after November
  1, 2001 at the redemption price of 105.125% of the principal amount, during
  the year commencing November 1, 2001, 103.417% of the principal amount, during
  the year commencing November 1, 2002, 101.708% of the principal amount during
  the year commencing November 1, 2003 and, thereafter, at 100% of the principal
  amount plus accrued and unpaid interest.

F-21

---





#### INTERTEK TESTING SERVICES LIMITED
  NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

15. Borrowings (continued)

Description of borrowings (continued)

(c) Parent Subordinated PIK Debentures

In November 1996, the Company issued £50.0 million of units (the Units)
  consisting of 12.0% Subordinated Debentures due November 1, 2007 (the Parent
  Subordinated PIK Debentures) and warrants to purchase 14.2% of the fully
  diluted share capital of the Company (Warrants) pursuant to a securities
  purchase agreement (the Securities Purchase Agreement). The Warrants
  will be exercisable only upon sale in connection with the acquisition by a person
  (other than a person who has funds managed by Charterhouse or any other member
  of Charterhouses wholly-owned group) of more that 50% of the Ordinary
  Shares of the Parent (calculated excluding the Ordinary Shares underlying the
  Warrant) or the unconditional granting of permission for any of the Ordinary
  Shares of the Parent to be dealt on any recognised investment exchange. The
  Warrants were recorded at their fair value of £2.8 million which is being
  amortised over the life of the Parent Subordinated PIK Debentures.

Interest on the Parent Subordinated PIK Debentures is accrued quarterly at
  a rate of 12.0% per annum, subject, upon, and during the continuation of certain
  events of default, to an increase to the lesser of (i) 24.0% per annum or (ii)
  the highest rate of interest then allowed under applicable law. In lieu of cash,
  interest on the Parent Subordinated PIK Debentures may, at the option of the
  Company, be paid by issuing additional Parent Subordinated PIK Debentures on
  any interest payment date (i) on or prior to February 1, 2002, (ii) after February
  1, 2002, to the extent the Companys pro-forma total fixed charge coverage
  ratio would be less than 1.10 to 1.00 or (iii) if (a) at the time of any such
  payment, there exists a payment default in respect of certain senior indebtedness
  (including the Notes and indebtedness incurred under the Credit Agreement noted
  above) or (b) after giving effect to any such payment an event of default pursuant
  to which such indebtedness under the Indenture or Credit Agreement may be accelerated
  shall occur and be continuing and the Company is prevented by the holders under
  the Indenture or the creditors under the Credit Agreement from paying such cash
  interest. All interest to date has been paid through the issuance of additional
  Parent Subordinated Debentures.

The Parent Subordinated PIK Debentures may be redeemed at any time at the option
  of the Company in whole or in part (provided that, at any such time,
  the Company redeems a minimum of US $5.0 million in aggregate principal amount
  of the Parent Subordinated PIK Debentures) at a redemption price equal to 100%
  of the principal amount thereof, plus accrued and unpaid interest thereon to
  the redemption date.

The Parent Subordinated PIK Debentures are unsecured liabilities of the Company.

#### 16. Accounts payable, accrued liabilities and deferred income

|                                   |  | December 31,
      1999
      £m |  | December 31,
      2000
      £m | 
|---------------------------------- |  | -------------------------------- |  | -------------------------------- | 
|                                  
|Trade accounts payable             |  | 24.2                             |  | 27.3                             | 
|Other taxation and social security |  | 4.3                              |  | 4.3                              | 
|Other creditors                    |  | 4.6                              |  | 4.8                              | 
|Accruals and deferred income       |  | 36.4                             |  | 44.1                             | 
|                                   |  |                                 
|                                   |  | 69.5                             |  | 80.5                             | 
|                                   |  |                                 

Within accruals and deferred income is £0.7 million due in more than one
  year (1999: £0.1 million).

F-22

---





#### INTERTEK TESTING SERVICES LIMITED
  NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

#### 17. Provisions for liabilities and charges

|                                          |  | Deferred tax
      £m |   | Pension
      benefits
      £m |   | Restructuring
      £m |   | Other
      £m |   | Total
      £m |  
|----------------------------------------- |  | --------------------- | - | ------------------------------- | - | ---------------------- | - | -------------- | - | -------------- | -
|                                         
|At December 31, 1998                      |  |                      |   | 0.5                             |   | 4.0                    |   | 4.0            |   | 8.5            |  
|Exchange adjustments                      |  |                      |   |                                |   |                       |   | 0.1            |   | 0.1            |  
|Transfer from current assets              |  | (1.3                  | ) |                                |   |                       |   |               |   | (1.3           | )
|Charged during the year                   |  | 1.7                   |   | 1.8                             |   | 7.7                    |   | 1.1            |   | 12.3           |  
|Released during the year                  |  |                      |   | (0.2                            | ) |                       |   | (0.7           | ) | (0.9           | )
|Utilised during the year                  |  |                      |   | (1.7                            | ) | (9.2                   | ) | (1.0           | ) | (11.9          | )
|                                          |  |                      
|At December 31, 1999                      |  | 0.4                   |   | 0.4                             |   | 2.5                    |   | 3.5            |   | 6.8            |  
|                                         
|Exchange adjustments                      |  |                      |   |                                |   |                       |   | 0.1            |   | 0.1            |  
|Transfers to current (assets)/liabilities |  |                      |   |                                |   | (1.5                   | ) | 3.7            |   | 2.2            |  
|Charged during the year                   |  | (0.2                  | ) | 1.8                             |   | 1.0                    |   | 12.5           |   | 15.1           |  
|Released during the year                  |  |                      |   |                                |   |                       |   | (0.9           | ) | (0.9           | )
|Utilised during the year                  |  |                      |   | (2.1                            | ) | (1.4                   | ) | (5.9           | ) | (9.4           | )
|                                          |  |                      
|At December 31, 2000                      |  | 0.2                   |   | 0.1                             |   | 0.6                    |   | 13.0           |   | 13.9           |  
|                                          |  |                      

Included in Other provisions are costs (including an estimate of future legal
  costs) relating to investigations by the Environmental Protection Agency in
  the United States and amounts in respect of other claims. The charge in respect
  of claims in 2000 includes an amount of £3.1 million for which an equivalent
  asset has been recognised in Other receivables reflecting the expected reimbursement
  of this amount.

#### 18. Deferred taxation

|                                   |  | December 31,
      1999
      £m |   | December 31,
      2000
      £m |  
|---------------------------------- |  | -------------------------------- | - | -------------------------------- | -
|                                   |  |                                  |   |                                  |  
|Total potential deferred taxation: |  |                                  |   |                                  |  
|Accelerated capital allowances     |  | (1.2                             | ) | (0.1                             | )
|Losses carried forward             |  | (11.4                            | ) | (14.1                            | )
|Other timing differences           |  | (8.4                             | ) | (14.6                            | )
|                                   |  |                                 
|                                   |  | (21.0                            | ) | (28.8                            | )
|                                   |  |                                 
|Liability                          |  | 0.4                              |   | 0.2                              |  
|                                   |  |                                 

F-23

---





#### INTERTEK TESTING SERVICES LIMITED
  NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

#### 19. Share capital

|                                                                                          |  | December 31,
      1999
      £m |  | December 31,
      2000
      £m | 
|----------------------------------------------------------------------------------------- |  | -------------------------------- |  | -------------------------------- | 
|                                                                                         
|(a) Authorised share capital                                                              |  |                                  |  |                                  | 
|Equity:                                                                                   |  |                                  |  |                                  | 
|Ordinary A shares of 69,172,061 at 1p each                                              |  | 0.7                              |  | 0.7                              | 
|Ordinary B shares of 11,578,635 at 1p each                                              |  | 0.1                              |  | 0.1                              | 
|Ordinary C shares of 2,951,417 at 1p each                                               |  |                                 |  |                                 | 
|Ordinary D shares of 7,110,713 at 1p each                                               |  | 0.1                              |  | 0.1                              | 
|                                                                                         
|Non equity: Zero coupon redeemable preference shares 
          of 105,478,482 at £1 each |  | 105.5                            |  | 105.5                            | 
|                                                                                          |  |                                 
|                                                                                          |  | 106.4                            |  | 106.4                            | 
|                                                                                          |  |                                 
|                                                                                         
|(b) Issued and outstanding share capital                                                  | 
|Equity:                                                                                   | 
|Ordinary A shares of 69,172,061 at 1p each                                              |  | 0.7                              |  | 0.7                              | 
|Ordinary B shares of 11,578,635 at 1p each                                              |  | 0.1                              |  | 0.1                              | 
|Ordinary C shares of 1p each (none in issue)                                            |  |                                 |  |                                 | 
|Ordinary D shares of 1p each (none in issue)                                            |  |                                 |  |                                 | 
|                                                                                         
|Non equity: Zero coupon redeemable preference shares 
          of 105,478,482 at £1 each |  | 105.5                            |  | 105.5                            | 
|                                                                                          |  |                                 
|                                                                                          |  | 106.3                            |  | 106.3                            | 
|                                                                                          |  |                                 

#### Ordinary shares

The A Shares, B Shares, C Shares and D Shares rank pari passuin all
  respects except that: (i) the holders of A Shares and D Shares have a right
  on a winding-up to receive the subscription price of those shares in preference
  to the holders of B Shares and C Shares, but rank pari passuwith the
  holders of B Shares and C Shares on the distribution of any surplus assets available
  after repayment to the holders of B Shares and C Shares of the subscription
  price on those shares; (ii) the C Shares confer no right to receive notice of,
  attend or vote at general meetings of the Company; and (iii) D Shares confer
  on the holders the right to receive notice of and to attend, but not to vote
  at, general meetings of the Company.

#### Zero Coupon Redeemable Preference Shares

The Preference Shares rank senior on a return of capital to the Ordinary Shares
  of the Company on a winding up but not otherwise. No dividends will be payable
  on the Preference Shares. The Preference Shares will be mandatorily redeemed
  on November 8, 2009 at par value. The Company is required upon the written request
  from holders of 30% or more of the Preference Shares to redeem all of those
  shares in issue from any source of funds legally available therefor. Holders
  of Preference Shares are entitled to receive notice but not to attend and vote
  at general meetings, except that they can attend and vote on any resolution
  regarding the winding-up of the Company, a reduction in the Companys capital
  or a modification of the rights and restrictions attached to the Preference
  Shares.

F-24

---





#### INTERTEK TESTING SERVICES LIMITED
  NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

19. Share capital (continued)

|                                     |  | December 31,
      1999
      £m |  | December 31,
      2000
      £m | 
|------------------------------------ |  | -------------------------------- |  | -------------------------------- | 
|                                    
|(c) Premium in excess of par value - |  |                                  |  |                                  | 
|Ordinary A shares
      of 1p each |  | 3.1                              |  | 3.1                              | 
|Ordinary B shares
      of 1p each |  | 0.5                              |  | 0.5                              | 
|                                     |  |                                 
|                                     |  | 3.6                              |  | 3.6                              | 
|                                     |  |                                 
|                                    
|(d) Shares to be issued              |  | 2.8                              |  | 2.8                              | 
|                                     |  |                                 

During the period ended December 31, 1996 the Company issued warrants to subscribe
  for ordinary D shares of 1p each (see note 15 (c)). The shareholder
  warrants can only be exercised on November 1, 2007 unless certain events occur
  beforehand. The shareholder warrants, if exercised in full, would represent
  7.83% of the fully diluted share capital of the Company. In accordance with
  FRS 4, the net proceeds of issue of these warrants ( £2.8 million) have
  been included within shareholders deficit as shares to be issued.

#### 20. Share option scheme

The Company established a share option scheme for senior management on March
  1, 1997. The board of directors has allocated options to purchase a maximum
  of 2,951,417 Ordinary C shares under the scheme. 495,848 (1999:
  188,894) options were granted and the weighted average exercise price was £1.17
  (1999: £0.10 and 1998: £0.10). 242,013 (1999: 170,187) were forfeited
  during the year and the weighted average exercise price was £0.10 (1999:
  £0.10 and 1998: £0.10). 1,646,001 options were issued during 1999
  as part of the share rights issue. The weighted average grant-date fair value
  of options granted during the year was £0.20 (1999: £0.10 and 1998:
  £0.10).

The options may not be exercised before the later of (i) three years from the
  grant date and (ii) the sale of the entire issued share capital of the Company
  to a single person or the admission to listing on a securities market of the
  shares of the Company. The options may not be exercised after seven years from
  grant date. The board of directors of the Company has set the exercise price
  at £0.10 and £1.40 per share, being the Directors estimate of
  the fair value of the underlying shares at the grant date. Accordingly, no compensation
  cost has been recorded in the accompanying consolidated statement of income.

|                                                    |  | Number    |  | Exercise
      price
      (£) |  | Exercisable between
|--------------------------------------------------- |  | --------- |  | ------------------------------ |  | -------------------
|                                                    |  |          
|The outstanding options are exercisable as follows: |  |           |  |                                |  |                    
|                                                    |  | 1,748,883 |  | 0.10                           |  | March 1, 2000      
|                                                    |  | 11,806    |  | 0.10                           |  | September 1, 2000  
|                                                    |  | 276,830   |  | 0.10                           |  | December 31, 2000  
|                                                    |  | 35,418    |  | 0.10                           |  | June 1, 2001       
|                                                    |  | 70,834    |  | 0.10                           |  | December 31, 2001  
|                                                    |  | 100,351   |  | 0.10                           |  | June 1, 2002       
|                                                    |  | 47,224    |  | 0.10                           |  | December 31, 2002  
|                                                    |  | 88,543    |  | 0.10                           |  | March 31, 2003     
|                                                    |  | 407,305   |  | 1.40                           |  | December 31, 2003  
|                                                    |  |           |  |                                |  |                    
|                                                    |  | 2,787,194 |  |                                |  |                    
|                                                    |  |           |  |                                |  |                    

No options are exercisable at December 31, 2000.

F-25

---





#### INTERTEK TESTING SERVICES LIMITED
  NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

#### 21. Retained deficit

|                      |  | Year ended
      December 31,
      1998
      £m |   | Year ended
      December 31,
      1999
      £m |   | Year ended
      December 31,
      2000
      £m |  
|--------------------- |  | ------------------------------------------------- | - | ------------------------------------------------- | - | ------------------------------------------------- | -
|                     
|At beginning of year  |  | (294.5                                            | ) | (314.2                                            | ) | (315.2                                            | )
|Exchange adjustments  |  | 0.9                                               |   | (11.0                                             | ) | (21.1                                             | )
|Net (loss)/income     |  | (20.6                                             | ) | 9.0                                               |   | (7.1                                              | )
|Goodwill on disposals |  |                                                  |   | 1.0                                               |   | 10.0                                              |  
|                      |  |                                                  
|At end of year        |  | (314.2                                            | ) | (315.2                                            | ) | (333.4                                            | )
|                      |  |                                                  

Included in retained deficit is £287.2 million relating to goodwill (1999:
  £277.4 million and 1998: £270.6 million). This comprises goodwill
  of £285.0 million written off to reserves in relation to the acquisition
  of subsidiaries prior to December 1997 (1999: £276.2 million and 1998:
  £270.2 million) and £2.2 million amortised goodwill in relation to
  acquisitions from January 1, 1998 (1999: £1.2 million and 1998 £0.4
  million).

#### 22. Reconciliation of movement in shareholders deficit

|                                                 |                                  | Year ended
      December 31,
      1998
      £m |                                  | Year ended
      December 31,
      1999
      £m |   | Year ended
      December 31,
      2000
      £m |  
|------------------------------------------------ | -------------------------------- | ------------------------------------------------- | -------------------------------- | ------------------------------------------------- | - | ------------------------------------------------- | -
|                                                
|Total recognised gains and losses for the period |                                  | (19.7                                             | )                                | (2.0                                              | ) | (28.2                                             | )
|Issue of ordinary share capital                  |                                  | 0.1                                               |                                  | 1.1                                               |   |                                                  |  
|Issue of redeemable preference shares            |                                  | 4.9                                               |                                  | 18.8                                              |   |                                                  |  
|Goodwill on disposals                            |                                  |                                                  |                                  | 1.0                                               |   | 10.0                                              |  
|                                                 |                                  |                                                  
|                                                 |                                  | (14.7                                             | )                                | 18.9                                              |   | (18.2                                             | )
|Opening shareholders deficit                    |                                  | (206.7                                            | )                                | (221.4                                            | ) | (202.5                                            | )
|                                                 |                                  |                                                  
|Closing shareholders deficit                    |                                  | (221.4                                            | )                                | (202.5                                            | ) | (220.7                                            | )
|                                                 |                                  |                                                   |                                 
|                                                
|                                                 | December 31,
      1999
      £m |                                                   | December 31,
      2000
      £m |                                                  
|                                                 |                                  |                                                  
|                                                
|Analysis of closing shareholders deficit        |                                  |                                                   |                                  |                                                  
|Equity interests                                 | (308.0                           | )                                                 | (326.2                           | )                                                
|Non-equity interests                             | 105.5                            |                                                   | 105.5                            |                                                  
|                                                 |                                  |                                                  
|                                                 | (202.5                           | )                                                 | (220.7                           | )                                                
|                                                 |                                  |                                                  

F-26

---





#### INTERTEK TESTING SERVICES LIMITED
  NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

#### 23. Reconciliation of operating income to operating cash flows

|                                                                    |  | Year ended
      December 31,
      1998
      £m |   | Year ended
      December 31,
      1999
      £m |   | Year ended
      December 31,
      2000
      £m |  
|------------------------------------------------------------------- |  | ------------------------------------------------- | - | ------------------------------------------------- | - | ------------------------------------------------- | -
|                                                                   
|Operating income                                                    |  | 23.0                                              |   | 51.4                                              |   | 58.4                                              |  
|Depreciation charge                                                 |  | 11.1                                              |   | 11.3                                              |   | 13.0                                              |  
|Goodwill amortisation                                               |  | 0.4                                               |   | 0.8                                               |   | 1.1                                               |  
|Loss on sale of fixed assets                                        |  | 0.2                                               |   | 0.1                                               |   | 0.1                                               |  
|(Increase)/decrease in inventories                                  |  | (1.1                                              | ) | 1.1                                               |   | (0.1                                              | )
|Increase in receivables and prepayments                             |  | (11.4                                             | ) | (3.9                                              | ) | (11.9                                             | )
|Increase/(decrease) in payables                                     |  | 5.8                                               |   | (6.7                                              | ) | 7.6                                               |  
|Cash payments from exporters                                        |  |                                                  |   | 5.0                                               |   |                                                  |  
|Discontinued operating exceptional charge 
          Environmental |  | 5.2                                               |   | 2.9                                               |   | 7.8                                               |  
|Decrease in other provisions                                        |  | (0.8                                              | ) | (2.3                                              | ) | (3.6                                              | )
|                                                                    |  |                                                  
|                                                                    |  | 32.4                                              |   | 59.7                                              |   | 72.4                                              |  
|Equity income of associates                                         |  |                                                  |   | (0.3                                              | ) | (0.9                                              | )
|Less dividends received from associates                             |  |                                                  |   | 0.4                                               |   | 0.4                                               |  
|                                                                    |  |                                                  
|Total operating cash inflow                                         |  | 32.4                                              |   | 59.8                                              |   | 71.9                                              |  
|                                                                    |  |                                                  

#### 24. Analysis of cash flows

|                                               |  | Year ended
      December 31,
      1998
      £m |   | Year ended
      December 31,
      1999
      £m |   | Year ended
      December 31,
      2000
      £m |  
|---------------------------------------------- |  | ------------------------------------------------- | - | ------------------------------------------------- | - | ------------------------------------------------- | -
|                                              
|Returns on investment and servicing of finance |  |                                                   |   |                                                   |   |                                                   |  
|Net interest paid                              |  | (22.6                                             | ) | (21.8                                             | ) | (23.0                                             | )
|Dividends paid to minorities                   |  | (2.4                                              | ) | (2.1                                              | ) | (3.4                                              | )
|                                               |  |                                                   |  
|                                               |  | (25.0                                             | ) | (23.9                                             | ) | (26.4                                             | )
|                                               |  |                                                   |  
|                                              
|Capital expenditure and financial investment   | 
|Purchase of property, plant and equipment      |  | (14.1                                             | ) | (17.7                                             | ) | (26.4                                             | )
|Sale of property, plant and equipment          |  | 0.1                                               |   | 0.2                                               |   | 0.3                                               |  
|                                               |  |                                                   |  
|                                               |  | (14.0                                             | ) | (17.5                                             | ) | (26.1                                             | )
|                                               |  |                                                   |  
|                                              
|Acquisitions and disposals                     | 
|Purchase of subsidiary undertakings            |  | (10.7                                             | ) | (8.3                                              | ) | (2.0                                              | )
|Acquisition provision payments                 |  | (0.6                                              | ) | (0.2                                              | ) |                                                  |  
|Sale of subsidiary undertakings                |  | (0.4                                              | ) | 3.5                                               |   | 1.4                                               |  
|                                               |  |                                                   |  
|                                               |  | (11.7                                             | ) | (5.0                                              | ) | (0.6                                              | )
|                                               |  |                                                   |  
|                                              
|Financing                                      | 
|Issue of ordinary shares                       |  | 0.1                                               |   | 1.1                                               |   |                                                  |  
|Issue of redeemable preference shares          |  | 4.9                                               |   | 18.8                                              |   |                                                  |  
|Issue/(repayment) of short term debt           |  | 16.4                                              |   | (5.9                                              | ) | (0.6                                              | )
|Repayment of other loans                       |  | (5.5                                              | ) | (16.1                                             | ) | (6.8                                              | )
|Cash subscribed by minorities                  |  | 0.1                                               |   | 0.5                                               |   | 0.1                                               |  
|                                               |  |                                                   |  
|                                               |  | 16.0                                              |   | (1.6                                              | ) | (7.3                                              | )
|                                               |  |                                                   |  

F-27

---





#### INTERTEK TESTING SERVICES LIMITED
  NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

24. Analysis of cash flows (continued)

During 2000, the Company purchased eight businesses throughout the Group. The
  provisional analysis of net assets acquired and the fair value to the Company
  is set out below. The resulting provisional goodwill of £2.2 million has
  been capitalised and is being amortised over 20 years.

|                                                            |  | Book value
      £m |   | Other fair value
      adjustments
      £m |   | Total
      £m |  
|----------------------------------------------------------- |  | ------------------- | - | ------------------------------------------- | - | -------------- | -
|                                                            |  |                     |   |                                             |   |                |  
|Trade receivables                                           |  | 0.1                 |   |                                            |   | 0.1            |  
|Property, plant and equipment                               |  | 0.9                 |   | (0.3                                        | ) | 0.6            |  
|Accounts payable                                            |  | (0.3                | ) |                                            |   | (0.3           | )
|Current taxation                                            |  | (0.2                | ) |                                            |   | (0.2           | )
|                                                            |  |                    
|                                                            |  | 0.5                 |   | (0.3                                        | ) | 0.2            |  
|                                                            |  |                     |   |                                             |  
|Minority interests                                          |  |                     |   |                                             |   |               |  
|                                                            |  |                     |   |                                             |   |               
|Provisional fair value of net assets acquired:              |  |                     |   |                                             |   | 0.2            |  
|                                                            |  |                     |   |                                             |   |               
|                                                           
|Fair value of consideration:                                |  |                     |   |                                             |   |                |  
|Initial cash consideration (including fees of £0.2 million) |  |                     |   |                                             |   | 1.9            |  
|Deferred consideration payable                              |  |                     |   |                                             |   | 0.5            |  
|Cash acquired                                               |  |                     |   |                                             |   |               |  
|                                                            |  |                     |   |                                             |   |               
|                                                            |  |                     |   |                                             |   | 2.4            |  
|Less fair value of net assets acquired                      |  |                     |   |                                             |   | (0.2           | )
|                                                            |  |                     |   |                                             |   |               
|Provisional goodwill arising on acquisition                 |  |                     |   |                                             |   | 2.2            |  
|                                                            |  |                     |   |                                             |   |               

Other fair value adjustments principally relate to the reduction in property,
  plant and equipment fixed assets to their net realisable value.

#### Net cash outflow on purchase of subsidiaries and associates

|                                                                                                                          |  | Year ended
      December 31,
      1998
      £m |   | Year ended
      December 31,
      1999
      £m |   | Year ended
      December 31,
      2000
      £m |  
|------------------------------------------------------------------------------------------------------------------------- |  | ------------------------------------------------- | - | ------------------------------------------------- | - | ------------------------------------------------- | -
|                                                                                                                         
|Fair value of consideration                                                                                               |  | 14.9                                              |   | 5.6                                               |   | 2.2                                               |  
|Net deferred consideration paid on prior year 
          acquisitions                                                     |  |                                                  |   | 3.0                                               |   | 0.1                                               |  
|Net deferred consideration payable                                                                                        |  | (3.5                                              | ) | (0.4                                              | ) | (0.5                                              | )
|Cash and cash equivalents acquired                                                                                        |  |                                                  |   | (0.1                                              | ) |                                                  |  
|Loans acquired                                                                                                            |  | (0.7                                              | ) |                                                  |   |                                                  |  
|Fees payable                                                                                                              |  | 0.6                                               |   | 0.4                                               |   | 0.2                                               |  
|                                                                                                                          |  |                                                   |  
|Net cash outflow in respect of acquisitions 
          made during the period and on prior period 
          acquisitions |  | 11.3                                              |   | 8.5                                               |   | 2.0                                               |  
|                                                                                                                          |  |                                                   |  

F-28

---





#### INTERTEK TESTING SERVICES LIMITED
  NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

#### 25. Analysis of net debt

|                         |  | At December
      31, 1999
      £m |   | Cash flow
      £m |  | Acquisitions
      and disposals
      £m |   | Debt issued in
      lieu of interest
      payment
      £m |   | Other non-
      cash changes
      £m |   | Exchange
      adjustments
      £m |   | At December
      31, 2000
      £m |  
|------------------------ |  | ----------------------------------- | - | ------------------ |  | ----------------------------------------- | - | ------------------------------------------------------------ | - | -------------------------------------- | - | ----------------------------------- | - | ----------------------------------- | -
|                        
|Net cash                 |  |                                     |   |                    |  |                                           |   |                                                              |   |                                        |   |                                     |   |                                     |  
|Cash in hand and at bank |  | 20.2                                |   | 1.4                |  | (0.7                                      | ) |                                                             |   |                                       |   | 0.4                                 |   | 21.3                                |  
|                         |  |                                    
|                        
|Debt                     | 
|Debt due within one year |  | (15.4                               | ) | 7.4                |  |                                          |   |                                                             |   | (13.5                                  | ) | (0.6                                | ) | (22.1                               | )
|Debt due after one year  |  | (278.2                              | ) |                   |  |                                          |   | (10.1                                                        | ) | 11.4                                   |   | (23.4                               | ) | (300.3                              | )
|                         |  |                                    
|                         |  | (293.6                              | ) | 7.4                |  |                                          |   | (10.1                                                        | ) | (2.1                                   | ) | (24.0                               | ) | (322.4                              | )
|                        
|                         |  |                                    
|                         |  |                                    
|                         |  |                                    
|Total net debt           |  | (273.4                              | ) | 8.8                |  | (0.7                                      | ) | (10.1                                                        | ) | (2.1                                   | ) | (23.6                               | ) | (301.1                              | )
|                         |  |                                    

#### 26. Pension plans

The Group operates a number of pension plans throughout the world. In most
  locations, these are defined contribution arrangements. There are significant
  defined benefit plans in the United Kingdom, United States, Hong Kong and Taiwan.
  These are all funded plans, with assets held in separate trustee administered
  funds.

The total pension cost for the group was:

|                           |  | Year ended
      December 31,
      1998
      £m |  | Year ended
      December 31,
      1999
      £m |  | Year ended
      December 31,
      2000
      £m | 
|-------------------------- |  | ------------------------------------------------- |  | ------------------------------------------------- |  | ------------------------------------------------- | 
|                          
|Defined contribution plans |  | 5.0                                               |  | 6.1                                               |  | 6.1                                               | 
|Defined benefit plans      |  | 1.6                                               |  | 1.8                                               |  | 1.8                                               | 
|                           |  |                                                  
|                           |  | 6.6                                               |  | 7.9                                               |  | 7.9                                               | 
|                           |  |                                                  

The pension cost for the defined contribution plans is the contribution payable
  by the group during the year.

The pension cost for the defined benefit plans was assessed in accordance with
  the advice of qualified actuaries based on actuarial valuations conducted during
  the year using appropriate methods and assumptions. The projected unit method
  was used and the principal assumption was that, on average, annual investment
  returns would exceed salary increases by 1.8%.

At the year end, the aggregate market value of the main defined benefit plans
  was £35.0 million. The benefits accrued to members of the UK plan (allowing
  for expected future salary and pension increases) were 125% funded at the last
  actuarial valuation conducted at April 1, 2000. The accrued benefits in the
  other plans were between 75% and 108% funded, reflecting differences in local
  funding practice. Actual contributions to the plans were determined on the basis
  of separate actuarial advice and were £2.2 million (1999: £1.7 million
  and 1998: £1.3 million). A prepayment at year end of £0.8 million
  (1999: £0.3 million and 1998: £0.4 million) is included in other current
  assets, this being the value of surplus assets in the defined benefit plans
  at the date of acquisition and the accumulated differences between the actual
  contributions paid and the pension cost since that date.

F-29

---





#### INTERTEK TESTING SERVICES LIMITED
  NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

#### 27. Contingent liabilities

|                  |  | December 31,
      1999
      £m |  | December 31,
      2000
      £m
|----------------- |  | -------------------------------- |  | --------------------------------
|                 
|Performance bonds |  | 3.1                              |  | 2.7                             
|Other guarantees  |  | 3.0                              |  | 1.6                             
|                  | 
|                  |  | 6.1                              |  | 4.3                             
|                  | 

From time to time ITS is involved in various claims and lawsuits incidental
  to the ordinary course of our business, including claims for damages, negligence
  and commercial disputes regarding inspection and testing and disputes from former
  employees. We are not currently party to any legal proceedings other than ordinary
  litigation incidental to the conduct of our business and the investigations
  described below. On the basis of currently available information, the Directors
  consider that the cost to ITS of an unfavourable outcome, arising from any such
  ordinary litigation is unlikely to have a material adverse effect on the financial
  position of ITS in the foreseeable future.

We hold a professional indemnity insurance policy that provides coverage for
  certain claims from customers. We consider this policy adequate for normal commercial
  purposes.

#### Investigations by the U.S. Environmental Protection Agency

#### Caleb Brett USA, Inc.  Linden, New Jersey

In February 1997, Caleb Brett, through its routine quality assurance and quality
  control procedures, discovered evidence of false testing results at the Caleb
  Brett laboratory in Linden, New Jersey, which involved testing of gasoline to
  certain standards set by the EPA.

In September 1999, the Department of Justice announced that three laboratory
  supervisors pleaded guilty to criminal charges that they participated in a scheme
  to falsify chemical analyses of gasoline.

In September 2000, Caleb Brett USA, Inc. pleaded guilty in Federal District
  Court in New Jersey to the crime of conspiracy to make false statements to governmental
  investigators and agreed to pay a U.S. $1.0 million fine. We made a provision
  of £0.7 million for this fine in 2000. The sentencing is scheduled for
  April 12, 2001 when the final sentence and payment terms will be confirmed.
  The Court may accept the agreement with the government or impose a fine of a
  greater or lessor amount. Due to the fact that Caleb Brett employees mislead
  federal investigators about the falsification of data during the investigation,
  Caleb Brett as a corporation was prosecuted. Under applicable law, Caleb Brett
  is responsible for certain acts of its employees, even though such acts were
  not committed with the knowledge or permission of the company.

#### Caleb Brett USA, Inc.  Puerto Rico

Caleb Brett USA, Inc. has been informed that an investigation is underway by
  the U.S. Department of Justice Environmental Crime Section of certain practices
  at its Puerto Rico facility. The investigation, which relates to events in 1997
  and prior, is at a preliminary stage and we are unable to predict the outcome
  or estimate the cost of any civil or criminal penalties that may arise. However,
  on the basis of currently available information, we consider that the costs
  to ITS of any civil and criminal penalties, arising from this investigation,
  that may be legally enforceable, are unlikely to have a material adverse effect
  on the financial position of ITS in the foreseeable future, although we are
  not able to quantify the cost of any adverse publicity and of the time spent
  by ITS executives on this case. We have notified Inchcape plc of the investigation
  and are pursuing possible rights of recovery against Inchcape plc under the
  Share Purchase Deed. This event may give rise to a claim under our group professional
  indemnity insurance policy and our brokers have been notified.

F-30

---





#### INTERTEK TESTING SERVICES LIMITED
  NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

27. Contingent liabilities (continued)

#### Intertek Testing Services Environmental Laboratories, Inc.  Richardson,
  Texas

In December 1997, Intertek Testing Services Environmental Laboratories, Inc.
  (ITS Environmental) discovered certain discrepancies in reported
  testing results at its facility in Richardson, Texas. ITS Environmental promptly
  reported this discrepancy to the EPA and to clients. Civil and criminal investigations
  are under way. A government investigation at the ITS Environmental facility
  uncovered further discrepancies beyond that initially discovered and disclosed
  by ITS Environmental.

In August 1998, ITS Environmental sold its laboratory business in Burlington,
  Vermont, United States and St. Helens, United Kingdom and stopped commercial
  operations at the laboratory in Richardson. These actions resulted in the discontinuation
  of business at ITS Environmental. This sale has not relieved ITS Environmental
  of any liability it may face as a result of these investigations or otherwise.

After commercial operations ceased in August 1998, the facility in Richardson,
  Texas was used to reprocess the original data. The reprocessing is complete
  and the facility is now closed. ITS Environmental developed what it believed
  to be an effective data screening and reprocessing method. The reprocessing
  effort was aimed at providing clients with data of known quality. The EPA has
  advised ITS Environmental that the reprocessing is not acceptable to the EPA
  for clean up or compliance purposes. Nevertheless, ITS Environmental believes
  that it can establish the scientific integrity of the reprocessing work, which
  ITS believes confirms that the original data was accurate to within normally
  accepted limits. This has been confirmed by an independent consultant which
  specialises in reprocessing of data.

ITS Environmental continues to co-operate fully with the government investigation.

On December 9, 1999, a complaint was filed by a customer in federal court in
  Chicago, Illinois against Intertek Testing Services Environmental Laboratories,
  Inc. seeking declaratory judgement and damages arising from analyses performed
  between 1991 and 1997. On December 17, 1999, a complaint was filed in state
  court in Kansas City, Missouri, against Intertek Testing Services Limited seeking
  damages from improper testing and analysis. On December 15, 2000, Intertek Testing
  Services Limited was voluntarily dismissed from this case by the plaintiff,
  without prejudice to refile the complaint at a later date. On January 12, 2000,
  a third complaint was filed in state court in Los Angeles, California, against
  Intertek Testing Services Limited and Intertek Testing Services Environmental
  Laboratories, Inc. seeking damages arising for improper testing and analysis
  and alleging fraud. Intertek Testing Services Limited was voluntarily dismissed
  from the case without prejudice to be brought back in as a defendant at a later
  date. This complaint has been amended to name Intertek Testing Services NA Inc.
  and Testing Holdings Inc., as defendants.

On September 21, 2000, the U.S. Department of Justice announced that a federal
  grand jury in Dallas, Texas returned an indictment of thirty counts against
  thirteen persons who were formerly employed at Intertek Testing Services Environmental
  Laboratories Inc in Richardson, Texas. Charges against the thirteen persons
  include conspiracy to commit mail fraud, conspiracy to present false, fictitious
  and fraudulent claims against the United States and wire fraud. The trial date
  has been set for October 5, 2001. To date, no criminal charges have been filed
  against ITS Environmental.

We are unable to predict the outcome of these actions. However, on the basis
  of currently available information, we consider that the costs to ITS of any
  civil and criminal penalties, arising from this investigation, that may be legally
  enforceable, are unlikely to have a material adverse effect on the financial
  position of ITS in the foreseeable future, although we are not able to quantify
  the cost of any adverse publicity and of the time spent by ITS executives on
  this case. We have notified Inchcape plc of the investigation and are pursuing
  possible rights of recovery against Inchcape plc under the Share Purchase Deed.
  Our group professional indemnity insurance policy may respond at least in part,
  to legal costs, civil damages and third party claims.

F-31

---





#### INTERTEK TESTING SERVICES LIMITED
  NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

#### 28. Other commitments

ITS had annual commitments under non-cancellable operating leases as follows:

|                                            |  | December 31,
      1999
      £m |  | December 31,
      2000
      £m
|------------------------------------------- |  | -------------------------------- |  | --------------------------------
|                                           
|Payable in one year:                        |  |                                  |  |                                 
|Expiring within one year                    |  | 2.9                              |  | 2.5                             
|Expiring within two to five years inclusive |  | 7.7                              |  | 8.7                             
|Expiring in more than five years            |  | 2.0                              |  | 2.6                             
|                                            | 
|                                            |  | 12.6                             |  | 13.8                            
|                                            | 
|Being in respect of:                        | 
|Land and buildings                          |  | 9.5                              |  | 10.8                            
|Other                                       |  | 3.1                              |  | 3.0                             
|                                            | 
|                                            |  | 12.6                             |  | 13.8                            
|                                            | 

#### 29. Financial instruments

Derivative financial instruments

The Company uses derivative financial instruments to manage interest rate and
  foreign currency risks. Whilst these hedging instruments are subject to fluctuations
  in value, such fluctuations are generally offset by the value of the underlying
  exposures being hedged. The Company is not a party to any leverage derivatives
  and does not hold derivative financial instruments for trading purposes.

The notional amount of derivatives summarised in this footnote does not represent
  amounts exchanged by parties and, thus, are not a measure of the exposure of
  the Company through its use of derivatives. The amounts exchanged are calculated
  on the basis of the notional amount and the other terms of the derivatives,
  which relate to interest rate or exchange rates.

Counterparties to financial instruments expose the Company to credit-related
  losses in the event of non-performance, but it does not expect any counterparties
  to fail to meet their obligations given their high credit ratings. The Company
  does not demand collateral when entering into derivative financial instruments.
  The credit exposure of interest rate and foreign currency contracts is represented
  by the fair value of contracts with a positive fair value at the end of each
  period.

The following numerical disclosures relate to the Groups financial assets
  and financial liabilities as defined in FRS 13: Derivatives and Other Financial
  Instruments. For all the numerical disclosures, short-term debtors and creditors,
  which arise directly from the Group operations, apart from the disclosures,
  have been excluded as permitted under FRS 13.

Foreign exchange risk management

A substantial portion of the Companys sales is derived from customers
  located outside the United Kingdom. In addition the net assets of foreign subsidiaries
  represent a significant portion of the Companys shareholders funds.
  The Companys administrative operations are conducted in several countries
  outside of the United Kingdom and operating costs are incurred in currencies
  other than the pound sterling. Because of the high proportion of international
  activity, the Companys income is exposed to exchange rate fluctuations.
  Risk of two kinds arise as a result: a transaction risk, that is,
  the risk that currency fluctuations will have a negative effect on the value
  of the Companys commercial cash flows in various currencies, and a translation
  risk, that is, the risk of adverse currency fluctuations in the translation
  of foreign currency operations and foreign assets and liabilities into pound
  sterling.

The Company enters into forward exchange contracts to hedge certain firm commitments
  denominated in foreign currencies. Some of the contracts involve the exchange
  of two foreign currencies, according to local needs in foreign subsidiaries.
  The term of the currency derivatives do not exceed one year.

F-32

---





#### INTERTEK TESTING SERVICES LIMITED
  NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

29. Financial instruments (continued)

The table below summarises by major currency the contractual amounts of the
  Companys forward exchange contracts in pound sterling. The buy
  amounts represent the pound sterling equivalent of commitments to purchase foreign
  currency, and the sell amounts represent the pound sterling equivalent
  of commitment to sell foreign currencies.

|                     |  | December 31, 1999 |  | December 31, 2000
|-------------------- |  | ----------------- |  | -----------------
|                     |  | Buy
      £m      |  | Sell
      £m    
|                    
|United States Dollar |  |                  |  | 6.8              
|Swiss Franc          |  |                  |  | 3.2              
|Canadian Dollar      |  | 1.6               |  |                 
|Hong Kong Dollar     |  | 0.4               |  |                 

The following table presents information regarding the forward exchange contract
  amounts in pound sterling equivalent and the estimated fair value of the Companys
  forward contracts with a positive fair value (assets) and a negative fair value
  (liabilities):

|            |  | December 31, 1999         |  | December 31, 2000  
|----------- |  | ------------------------- |  | -------------------
|            |  | Contract amount 
      £m |  | Fair Value
      £m
|           
|Assets      |  | 10.0                      |  | 0.1                
|Liabilities |  | 0.4                       |  |                   
|            |  |                           |  |                    
|Net Assets  |  |                           |  | 0.1                
|            |  |                           |  |                    

Interest rate risk management

The Company has a significant amount of borrowings bearing interest at variable
  rates. To reduce its exposure to interest rate fluctuations, the Company enters
  into interest rate cap and swap agreements.

The Company utilises interest rate cap agreements to limit the impact of increases
  in interest rates on its floating-rate debt. Interest rate cap agreements require
  premium payments to counterparties based upon a notional principal amount. Interest
  rate cap agreements entitle the Company to receive from the counterparties the
  amount, if any, by which the selected market interest rate exceeds the strike
  rate stated in the agreements. At December 31, 2000, the notional amount in
  pound sterling of interest rate cap agreements amounted to £nil (1999:
  £29.6 million) and the interest rate cap was not applicable (1999: 8%).
  Unamortised premiums included in other current assets amount to £nil at
  December 31, 2000 (1999: £0.1 million).

The Company also enters into interest rate swap agreements to convert certain
  long-term borrowing at floating rates (based on inter-bank borrowing rates in
  various countries) to fixed rates, that are lower than those available to the
  Company if the fixed-rate borrowing were made directly. Under the interest rate
  swap agreements, the Company agrees with other parties to exchange, at specified
  intervals, the difference between fixed-rate and floating-rate interest amounts
  calculated by reference to an agreed notional principal amount.

F-33

---





#### INTERTEK TESTING SERVICES LIMITED
  NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

29. Financial instruments (continued)

The following table summarises the Companys interest rate swaps at December
  31, 1999 and 2000:

|December 31, 1999         
|--------------------------
|                          
|Notional amount
        £m
|14.3                      
|22.4                      
|7.9                       
|4.8                       
|                          
|                          
|                          



|December 31, 2000         
|--------------------------
|                          
|Notional amount
        £m
|15.6                      
|21.1                      
|7.7                       
|4.7                       
|29.6                      
|                          
|                          
|                          

Concentration of credit risk

At December 31, 2000 the Company did not consider there to be any significant
  concentration of credit risk. Potential concentrations of credit risk to the
  Company comprise principally cash and cash equivalents and trade receivables.
  The Company maintains cash deposits with several major banks which at times
  may exceed insured limits. Management periodically assesses the financial condition
  of the institutions and believes that any possible credit risk is minimal. Concentration
  of credit risk with respect to trade receivables is limited due to the large
  number of customers comprising the Companys customer base and their dispersion
  across many different geographic locations.

Fair value of financial instruments

The Companys on-balance sheet financial instruments, with the exception
  of borrowings, are generally short term in nature. Accordingly, the fair value
  of such instruments approximates their carrying value. Borrowings include fixed-rate
  loans for which their fair value differs from their carrying value. The fair
  value of fixed-rate borrowings was calculated based on discounted cash flows
  using the current rates offered to the Company for debt of the same maturities.
  The fair value of variable rate borrowings approximates carrying value because
  such loans reprice at market rate periodically. The fair value of long-term
  borrowings, including current portion, was approximately £330.5 million
  and £285.7 million (carrying value £325.2 million and £297.0
  million) at December 31, 2000 and 1999, respectively. The fair value of off-balance
  sheet financial instruments is as follows:

|                           |  | Year Ended
      December 31,
      1999
      £m |  | Year Ended
      December 31,
      2000
      £m |  
|-------------------------- |  | ------------------------------------------------- |  | ------------------------------------------------- | -
|                          
|Forward exchange contracts |  | 0.1                                               |  | 0.1                                               |  
|Interest rate caps         |  | 0.1                                               |  |                                                  |  
|Interest rate swaps        |  | 0.1                                               |  | (0.5                                              | )

F-34

---







#### INTERTEK TESTING SERVICES LIMITED
  NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

29. Financial instruments (continued)

Exchange rate sensitivity

The following table provides information about the Companys derivative
  financial instruments and other financial instruments by functional currency
  and presents such information in sterling equivalents. The table summarizes
  information on instruments and transactions that are sensitive to foreign currency
  exchange rates, including foreign currency forward exchange agreements and foreign
  currency denominated debt obligations. For debt obligations, the table presents
  principal cash flows and related weighted average interest rates by expected
  maturity dates. For foreign currency forward exchange agreements, the table
  presents the notional amounts and weighted average exchange rates by expected
  (contractual) maturity dates. These notional amounts generally are used to calculate
  the contractual payments to be exchanged under the contract.

|2000                           |  | Expected Maturity Date |   | Total
      £m  |   | Fair
      Value
      £m |  
|------------------------------ |  | ---------------------- | - | --------------- | - | ------------------------- | -
|                              
|Dec-01
      £m                |  | Dec-02
      £m        |   | Dec-03
      £m |   | Dec-04
      £m           |  
|                               |  |                        |  
|Liabilities                    |  |                        |   |                 |   |                           |  
|                               | 
|Underlying long term debt (a)  | 
|                              
|Fixed rate (USD)               |  |                       |   |                |   |                          |  
|Average interest rate          |  |                       |   |                |   |                          |  
|                              
|Fixed rate (USD)               |  |                       |   |                |   |                          |  
|Average interest rate          |  |                       |   |                |   |                          |  
|                              
|Floating rate (USD)            |  | 4.7                    |   | 5.8             |   | 12.1                      |  
|Average interest rate          |  | 8.2                    | % | 8.1             | % | 8.3                       | %
|                              
|Floating rate (SEK)            |  | 1.0                    |   | 1.2             |   | 2.4                       |  
|Average interest rate          |  | 8.0                    | % | 7.2             | % | 7.5                       | %
|                              
|Floating rate (EUR)            |  | 0.6                    |   | 0.8             |   | 1.6                       |  
|Average interest rate          |  | 7.2                    | % | 7.2             | % | 7.3                       | %
|                              
|Floating rate (HKD)            |  | 6.4                    |   | 7.5             |   | 15.6                      |  
|Average interest rate          |  | 7.6                    | % | 7.7             | % | 7.8                       | %
|                               |  |                        |   |                 |   |                           |  
|                               |  |                        |   |                 |   |                           |  
|                               |  |                        |   |                 |   |                           |  
|                              
|Forward exchange agreements    |  |                        |   |                 |   |                           |  
|                              
|(Receive GBP pay USD)          |  |                        |   |                 |   |                           |  
|Contract amount                |  | 4.2                    |   |                |   |                          |  
|Average contract exchange rate |  | 1.47                   |   |                |   |                          |  
|                               |  |                        |   |                 |   |                           |  
|                               |  |                        |   |                 |   |                           |  
|                               |  |                        |   |                 |   |                           |  

F-35

---





#### INTERTEK TESTING SERVICES LIMITED
  NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

29. Financial instruments (continued)

|1999                           |  | Expected Maturity Date |   | Total
      £m  |   |                
|------------------------------ |  | ---------------------- | - | --------------- | - | ---------------
|                               | 
|Dec-00
      £m                |  | Dec-01
      £m        |   | Dec-02
      £m |   | Dec-03
      £m
|                               |  |                       
|Liabilities                    |  |                        |   |                 |   |                
|Revolving advances             |  |                        |   |                 |   |                
|                              
|Floating rate (USD)            |  | 4.3                    |   |                |   |               
|Average interest rate          |  | 7.8                    | % |                |   |               
|                              
|Underlying long term debt (a)  | 
|                              
|Fixed rate (USD)               |  |                       |   |                |   |               
|Average interest rate          |  |                       |   |                |   |               
|                              
|Fixed rate (USD)               |  |                       |   |                |   |               
|Average interest rate          |  |                       |   |                |   |               
|                              
|Floating rate (USD)            |  | 1.9                    |   | 4.4             |   | 5.4            
|Average interest rate          |  | 8.6                    | % | 9.3             | % | 9.4            
|                              
|Floating rate (SEK)            |  | 0.5                    |   | 1.0             |   | 1.2            
|Average interest rate          |  | 7.0                    | % | 8.5             | % | 8.9            
|                              
|Floating rate (EUR)            |  | 0.3                    |   | 0.7             |   | 0.8            
|Average interest rate          |  | 6.3                    | % | 7.4             | % | 7.8            
|                              
|Floating rate (HKD)            |  | 2.8                    |   | 5.9             |   | 6.9            
|Average interest rate          |  | 8.8                    | % | 9.1             | % | 9.2            
|                               |  |                        |   |                 |   |                
|                               |  |                        |   |                 |   |                
|                               |  |                        |   |                 |   |                
|                               |  |                        |   |                 |   |                
|Forward exchange agreements    |  |                        |   |                 |   |                
|(Receive GBP pay CHF)          |  |                        |   |                 |   |                
|Contract amount                |  | 3.2                    |   |                |   |               
|Average contract exchange rate |  | 2.55                   |   |                |   |               
|                              
|(Receive GBP pay USD)          | 
|Contract amount                |  | 5.3                    |   |                |   |               
|Average contract exchange rate |  | 1.60                   |   |                |   |               
|                              
|(Receive CAD pay USD)          | 
|Contract amount                |  | 1.6                    |   |                |   |               
|Average contract exchange rate |  | 1.48                   |   |                |   |               
|                              
|(Receive HKD pay GBP)          | 
|Contract amount                |  | 0.4                    |   |                |   |               
|Average contract exchange rate |  | 12.66                  |   |                |   |               
|                               |  |                        |   |                 |   |                
|                               |  |                        |   |                 |   |                
|                               |  |                        |   |                 |   |                

(a) The amortised amounts were amended in March 1999 in accordance with the
  amendment and restatement agreement dated March 5, 1999.

Unrecognised gains and losses

There are no material unrecognised gains or losses arising from the use of
  financial assets and financial liabilities as hedges.

F-36

---





#### INTERTEK TESTING SERVICES LIMITED
  NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

#### 30. Summary of differences between U.K. and U.S. GAAP

The consolidated financial statements are prepared in conformity with U.K.
  GAAP. These accounting principles differ in certain material respects from U.S.
  GAAP. Described below are the material differences between U.K. GAAP and U.S.
  GAAP affecting the net income/(loss) and shareholders equity/(deficit)
  which are set forth in the tables that follow.

#### Goodwill and other intangible assets

Under U.K. GAAP, purchased goodwill in respect of acquisitions before January
  1, 1998 was written off to reserves in the year of acquisition. Purchased goodwill
  in respect of acquisitions since January 1, 1998 is capitalised in accordance
  with the requirements of FRS 10, Goodwill and Intangible Assets. Positive goodwill
  is amortised to £nil over equal instalments over its estimated useful life,
  not exceeding 20 years. Under U.S. GAAP, goodwill and identifiable intangibles
  are capitalised and are written off over their estimated useful lives, generally
  not exceeding 40 years. Goodwill and identifiable intangibles are being written
  off over periods not exceeding 20 years for U.S. GAAP.

The gross cost under U.S. GAAP as of December 31, 2000 of goodwill is £239.0
  million (1999: £234.6 million) and identifiable intangibles related to
  the covenants not to compete is £nil (1999: £38.7 million). Accumulated
  amortisation under U.S. GAAP as of December 31, 2000 of goodwill is £50.8
  million (1999: £38.0 million) and of identifiable intangibles is nil (1999:
  £38.7 million).

#### Redeemable preference shares

Under U.K. GAAP, preference shares with mandatory redemption features or that
  are redeemable at the option of the security holders are classified as a component
  of shareholders equity. U.S. GAAP requires such redeemable preference
  shares to be classified outside of shareholders equity. Additionally,
  under U.S. GAAP, the initial carrying amount of redeemable preferred stock is
  equal to its fair value at date of issuance. When the fair value of mandatorily
  redeemable preferred stock at the time of its issuance is less than the mandatory
  redemption amount, the carrying amount is increased by periodic accretion, using
  the interest method, such that the carrying amount will equal the mandatory
  redemption amount at the mandatory redemption date.

#### Disposal of business segment

Under U.K. GAAP, the profit or loss arising on the disposal of a business segment
  after the year end, but before the earlier of three months and the date when
  the financial statements are approved, is not recognised in the financial statements
  but is disclosed as a post balance sheet event and the disposed business segment
  is classified as a discontinued operation in the financial statements. U.S.
  GAAP requires that if a loss is expected from such disposal, such loss be recognised
  in the not yet released financial statements.

#### Pension costs  defined benefit plans

Under U.K. GAAP, the cost of providing pension benefits is expensed over the
  average expected service lives of eligible employees on the basis of a constant
  percentage of current and estimated future earnings. Under U.S. GAAP, Statement
  of Financial Accounting Standards (SFAS) No. 87, Employers Accounting
  for Pensions, requires that pension costs be determined based on a comparison
  of the projected benefit obligation with the market value of the underlying
  plan assets and other unrecognised gains and losses assessed on an actuarial
  basis.

As a result of this difference in methodology, the U.S. GAAP pension expense
  can be significantly different from that determined under U.K. GAAP and tends
  to be more sensitive to changing economic conditions.

#### Compensated absences

Under U.S. GAAP, compensated absences, being an employees paid holiday
  entitlements, are accrued as earned. For companies that do not allow employees
  to carry compensated absences over from one year to the next, no accrual is
  required. U.K. GAAP does not require a provision for compensated absences to
  be made.

#### Deferred taxation

Under U.K. GAAP, deferred taxation is accounted for using the liability method
  to the extent that it is considered probable that a liability or asset will
  crystallise in the foreseeable future. Under U.S. GAAP, deferred taxation is
  provided on all temporary differences and carryforwards. Deferred tax assets
  are recognised to the extent that it is more likely than not that they will
  be realised. Where doubt exists as to whether a deferred tax asset will be realised,
  an appropriate valuation allowance is established.

F-37

---





#### INTERTEK TESTING SERVICES LIMITED
  NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

30. Summary of differences between U.K. and U.S. GAAP (continued)

Effect of material differences between U.K. and U.S. GAAP and additional
  disclosures

(a) Net (loss)/income

|                                                                                              |  | Year ended
      December 31,
      1998
      £m |    | Year ended
      December 31,
      1999
      £m |    | Year ended
      December 31,
      2000
      £m |  
|--------------------------------------------------------------------------------------------- |  | ------------------------------------------------- | -- | ------------------------------------------------- | -- | ------------------------------------------------- | -
|                                                                                             
|Net (loss)/income reported under U.K. GAAP                                                    |  | (20.6                                             | )  | 9.0                                               |    | (7.1                                              | )
|U.S. GAAP Adjustments:                                                                        | 
|Goodwill amortisation                                                                         |  | (11.6                                             | )  | (11.6                                             | )  | (9.9                                              | )
|Covenants not to compete amortisation                                                         |  | (12.5                                             | )  | (9.7                                              | )  |                                                  |  
|Loss on disposal and closure of discontinued 
          operations                            |  |                                                  |    | (11.6                                             | )  |                                                  |  
|Previously recognised loss on disposal and closure
      
          of discontinued operation |  |                                                  |    |                                                  |    | 11.6                                              |  
|Pensions                                                                                      |  | (0.2                                              | )  |                                                  |    | (0.7                                              | )
|Compensated absences                                                                          |  | (0.3                                              | )  | (0.1                                              | )  | 0.1                                               |  
|Deferred taxes                                                                                |  |                                                  |    |                                                  |    |                                                  |  
|Tax effect of U.S. GAAP reconciling adjustments                                               |  |                                                  |    |                                                  |    |                                                  |  
|                                                                                              |  |                                                  
|Net loss in conformity with U.S. GAAP                                                         |  | (45.                                              | 2) | (24.                                              | 0) | (6.0                                              | )
|                                                                                              |  |                                                  
|                                                                                             
|Continuing operations                                                                         |  | (35.                                              | 1) | (4.6                                              | )  | 1.2                                               |  
|Discontinued operations                                                                       |  | (10.                                              | 1) | (19.                                              | 4) | (7.2                                              | )
|                                                                                              |  |                                                  
|Net loss in conformity with U.S. GAAP                                                         |  | (45.2                                             | )  | (24.0                                             | )  | (6.0                                              | )
|                                                                                              |  |                                                  

(b) Shareholdersdeficit

The approximate effects on shareholders deficit of material differences
  between U.K. and U.S. GAAP are as follows:

|                                                             |  | Year ended
      December 31,
      1999
      £m |   | Year ended
      December 31,
      2000
      £m |  
|------------------------------------------------------------ |  | ------------------------------------------------- | - | ------------------------------------------------- | -
|                                                            
|Shareholders deficit reported under
      U.K. GAAP         |  | (202.5                                            | ) | (220.7                                            | )
|U.S. GAAP Adjustments:                                       | 
|Goodwill                                                     |  | 190.0                                             |   | 188.2                                             |  
|Redeemable preference shares, including cumulative accretion |  | (26.1                                             | ) | (30.0                                             | )
|Loss on disposal and closure of discontinued operations      |  | (5.0                                              | ) |                                                  |  
|Pensions                                                     |  | 1.0                                               |   | 0.3                                               |  
|Compensated absences                                         |  | (0.7                                              | ) | (0.6                                              | )
|                                                             |  |                                                  
|Shareholders deficit in conformity with U.S. GAAP
      *   |  | (43.3                                             | ) | (62.8                                             | )
|                                                             |  |                                                  

* Shareholders deficit and the carrying value of the preference shares
  as of December 31, 1999 have been reduced by £79.4 million from amounts
  previously shown as of December 31, 1999 in order to reflect the carrying value
  of such shares as of that date at their initial carrying value plus cumulative
  accretion from date of original issue.

F-38

---





#### INTERTEK TESTING SERVICES LIMITED
  NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

30. Summary of differences between U.K. and U.S. GAAP (continued)

(b) Shareholders deficit (continued)

The following table reconciles shareholders deficit under U.S. GAAP:

|                                                      |  | Year ended
      December 31,
      1999 |   | Year ended
      December 31,
      2000 |  
|----------------------------------------------------- |  | ---------------------------------------- | - | ---------------------------------------- | -
|                                                     
|Shareholders deficit at beginning of
      year      |  | (7.4                                     | ) | (43.3                                    | )
|Issue of shares                                       |  | 1.1                                      |   |                                         |  
|Accretion of discount on redeemable preference shares |  | (7.5                                     | ) | (3.9                                     | )
|Net loss for the year                                 |  | (24.0                                    | ) | (6.0                                     | )
|Exchange adjustments                                  |  | (5.5                                     | ) | (9.6                                     | )
|                                                      |  |                                         
|Shareholders deficit at end of year                  |  | (43.3                                    | ) | (62.8                                    | )
|                                                      |  |                                         

(c) Cash flows

The statements of cash flows prepared in accordance with U.K. GAAP present
  substantially the same information as that required under U.S. GAAP. Under U.S.
  GAAP however, there are certain differences from U.K. GAAP with regard to classification
  of items within the cash flow statement and with regard to the definition of
  cash.

Under U.K. GAAP, cash flows are presented separately for operating activities,
  returns on investments and servicing of finance, taxation, capital expenditure
  and financial investment, acquisitions and disposals, equity dividends paid,
  management of liquid resources and financing. Under U.S. GAAP, three categories
  of cash flow activity are reported, those being operating activities, investing
  activities and financing activities. Cash flows from taxation and returns on
  investments and servicing of finance would, with the exception of dividends
  paid, be included as operating activities under U.S. GAAP. Capital expenditure
  and financial investment, acquisitions and disposals and management of liquid
  resources would be included as investing activities. The payment of dividends
  would be included under financing activities under U.S. GAAP.

Set out below is a summary of the statements of cash flows under U.S. GAAP.

|                                                                    |  | Year ended
      December 31,
      1998
      £m |   | Year ended
      December 31,
      1999
      £m |   | Year ended
      December 31,
      2000
      £m |  
|------------------------------------------------------------------- |  | ------------------------------------------------- | - | ------------------------------------------------- | - | ------------------------------------------------- | -
|                                                                   
|Net cash provided by operating activities                           |  | 4.0                                               |   | 34.7                                              |   | 31.5                                              |  
|Net cash used in investing activities                               |  | (25.2                                             | ) | (23.9                                             | ) | (23.2                                             | )
|Net cash provided by/(used in) financing activities                 |  | 15.9                                              |   | (4.6                                              | ) | (11.0                                             | )
|                                                                    |  |                                                  
|                                                                    |  | (5.3                                              | ) | 6.2                                               |   | (2.7                                              | )
|Effect of exchange rate changes                                     |  | (0.5                                              | ) | 0.1                                               |   | 0.4                                               |  
|                                                                    |  |                                                  
|Net (decrease)/increase in cash by continuing 
          operations |  | (5.8                                              | ) | 6.3                                               |   | (2.3                                              | )
|                                                                    |  |                                                  
|(Decrease)/increase in cash by continuing operations                |  | (5.8                                              | ) | 6.3                                               |   | (2.3                                              | )
|(Decrease)/increase in cash by discontinued operations              |  | (2.5                                              | ) | (2.9                                              | ) | 3.4                                               |  
|Cash at beginning of period                                         |  | 25.1                                              |   | 16.8                                              |   | 20.2                                              |  
|                                                                    |  |                                                  
|Cash at end of period                                               |  | 16.8                                              |   | 20.2                                              |   | 21.3                                              |  
|                                                                    |  |                                                  

F-39

---





#### INTERTEK TESTING SERVICES LIMITED
  NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

30. Summary of differences between U.K. and U.S. GAAP (continued)

(d) Pensions

The disclosures below detail the additional information required by SFAS No.
  132 Employers Disclosures about Pensions and Other Post Retirement
  Benefits in respect of the Companys funded defined benefit plans.

The Companys principal defined benefits pension plans are located in
  the United Kingdom, United States, Taiwan and Hong Kong. The following is a
  summary of the funded status and the net periodic benefit costs for the defined
  benefit pension plans:

|                                                                                       |  | December 31,
      1999
      £m |   | December 31,
      2000
      £m |  
|-------------------------------------------------------------------------------------- |  | -------------------------------- | - | -------------------------------- | -
|                                                                                      
|Change in benefit obligation                                                           |  |                                  |   |                                  |  
|Projected benefit obligation at beginning of year                                      |  | 23.1                             |   | 27.9                             |  
|Service cost                                                                           |  | 2.2                              |   | 2.6                              |  
|Interest cost                                                                          |  | 1.4                              |   | 2.0                              |  
|Plan participants contributions                                                       |  | 0.3                              |   | 0.4                              |  
|Acquisition                                                                            |  |                                 |   | 2.2                              |  
|Actuarial loss/(gain)                                                                  |  | 1.9                              |   | (2.0                             | )
|Benefits paid                                                                          |  | (1.1                             | ) | (1.0                             | )
|Exchange rate effects                                                                  |  | 0.1                              |   | 1.2                              |  
|                                                                                      
|Projected benefit obligation at end of year                                            |  | 27.9                             |   | 33.3                             |  
|                                                                                      
|Change in plan assets                                                                  | 
|Fair value of plan assets at beginning of year                                         |  | 23.0                             |   | 26.2                             |  
|Actual return on plan assets                                                           |  | 2.2                              |   | 2.8                              |  
|Employer contributions                                                                 |  | 1.7                              |   | 2.2                              |  
|Plan participants contribution                                                        |  | 0.3                              |   | 0.4                              |  
|Acquisition                                                                            |  |                                 |   | 3.2                              |  
|Benefits paid                                                                          |  | (1.1                             | ) | (1.0                             | )
|Exchange rate effects                                                                  |  | 0.1                              |   | 1.1                              |  
|                                                                                      
|Fair value of plan assets at end of year                                               |  | 26.2                             |   | 34.9                             |  
|                                                                                      
|                                                                                      
|Funded status                                                                          |  | (1.7                             | ) | 1.6                              |  
|Unrecognised actuarial loss                                                            |  | 3.2                              |   | (0.4                             | )
|                                                                                      
|Net amount recognised                                                                  |  | 1.5                              |   | 1.2                              |  
|                                                                                      
|Amounts recognised in the statement of financial position
      
          consist of: | 
|Prepaid benefit cost                                                                   |  | 1.7                              |   | 1.3                              |  
|Accrued benefit liability                                                              |  | (0.3                             | ) | (0.1                             | )
|Shareholders deficit *                                                                |  | 0.1                              |   |                                 |  
|                                                                                      
|Net amount recognised                                                                  |  | 1.5                              |   | 1.2                              |  
|                                                                                      

* Amount charged directly to Shareholders deficit to record the additional
  minimum liability.

F-40

---





#### INTERTEK TESTING SERVICES LIMITED
  NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

30. Summary of differences between U.K. and U.S. GAAP (continued)

(d) Pensions (continued)

The following is a summary of the weighted average assumptions:

|                                         |  | December 31,
      1998                           |    | December 31,
      1999                           |    | December 31,
      2000                           |  
|---------------------------------------- |  | ------------------------------------------------- | -- | ------------------------------------------------- | -- | ------------------------------------------------- | -
|                                        
|Discount Rate                            |  | 6.4                                               | %  | 6.7                                               | %  | 7.2                                               | %
|Expected return on plan assets           |  | 7.9                                               | %  | 8.0                                               | %  | 8.0                                               | %
|Rate of compensation increase            |  | 4.8                                               | %  | 5.5                                               | %  | 5.6                                               | %
|                                        
|                                        
|                                         |  | Year Ended
      December 31,
      1998
      £m |    | Year Ended
      December 31,
      1999
      £m |    | Year Ended
      December 31,
      2000
      £m |  
|                                        
|Components of net periodic benefit cost: |  |                                                   |    |                                                   |    |                                                   |  
|Service cost                             |  | 2.1                                               |    | 2.2                                               |    | 2.6                                               |  
|Interest cost                            |  | 1.5                                               |    | 1.4                                               |    | 2.0                                               |  
|Expected return on plan assets           |  | (1.                                               | 8) | (1.                                               | 9) | (2.2                                              | )
|Amortisation of prior service cost       |  |                                                  |    |                                                  |    |                                                  |  
|Recognised actuarial (loss)/gain         |  |                                                  |    |                                                  |    |                                                  |  
|                                         |  |                                                  
|Net periodic benefit cost                |  | 1.8                                               |    | 1.7                                               |    | 2.4                                               |  
|                                         |  |                                                  

There were no pension plans with accumulated benefits obligations in excess
  of plan assets as of December 31, 2000. The projected benefit obligation, accumulated
  benefit obligation and fair value of plan assets for the pension plans with
  accumulated benefit obligations in excess of plan assets were £0.9 million,
  £0.9 million and £0.9 million respectively, as of December 31, 1999.

(e) Impairment of long-lived assets

The Company reviews impairment of long-lived assets and certain identifiable
  intangibles whenever events or changes in circumstances indicate that the carrying
  amount of an asset may not be recoverable. Recoverability of assets to be held
  and used is measured by a comparison of the carrying amount of an asset to future
  net cash flows expected to be generated by the asset. If such assets are considered
  to be impaired, the impairment to be recognised is measured by the amount by
  which the carrying amount of the assets exceed the net present value of future
  cash flows. Assets to be disposed of are reported at the lower of the carrying
  amount or fair value less costs to sell.

F-41

---





#### INTERTEK TESTING SERVICES LIMITED
  NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

30. Summary of differences between U.K. and U.S. GAAP (continued)

(f) Share option scheme

The Company adopted SFAS No. 123, "Accounting for Stock-Based Compensation",
  which permits entities to recognise as expense over the vesting period the fair
  value of all stock-based awards on the date of grant. Alternatively, SFAS No.
  123 allows entities to continue to apply the provisions of APB Opinion No. 25
  and provide pro forma net loss disclosures for share options granted as if the
  fair value-based method defined in SFAS No. 123 had been applied. Management
  has elected to apply the provisions of APB Opinion No. 25 and provide the pro
  forma disclosure provisions of SFAS No. 123.

The fair value of each option grant is estimated on the date of grant using
  the Black Scholes option-pricing model with the following weighted average assumptions
  used for grants in the respective years.

|                        |  | 1998    |   | 1999    |   | 2000    |  
|----------------------- |  | ------- | - | ------- | - | ------- | -
|                        |  |         |   |         |   |         |  
|Expected dividend yield |  | 0       | % | 0       | % | 0       | %
|Risk free rate          |  | 6.0     | % | 6.0     | % | 6.0     | %
|Expected volatility     |  | 0       | % | 0       | % | 0       | %
|Average expected lives  |  | 3 years |   | 3 years |   | 3 years |  

Had compensation cost for the share options granted during the year, for purposes
  of the U.S. GAAP reconciliation, been determined consistent with the methodology
  described by SFAS No. 123, the Companys net loss would have not been significantly
  different than the actual net loss.

The weighted average exercise price of outstanding options is£0.29 (1999:
  £0.10). The weighted average fair value of the share options granted by
  the Company during 2000 was estimated at £0.19 (1999: £0.02 and 1998:
  £0.2).

The weighted average remaining contractual life for all shares is 4.1 (1999:
  4.5) years. The weighted average remaining contractual life for £0.10 shares
  is 3.6 (1999: 4.5) years. The weighted average remaining contractual life for
  £1.40 shares is 7.0 (1999: nil) years.

(g) Comprehensive income

The Company has adopted SFAS No. 130, Reporting Comprehensive Income,
  which established standards for the reporting and presentation of comprehensive
  income/(loss) and its components in a full set of financial statements. The
  Companys comprehensive loss differs from net income only by the amount
  of the foreign currency exchange adjustments charged to shareholders deficit
  for the period and the periodic accretion of the redeemable preference stock.
  Comprehensive loss for each of the years ended December 31, 1998, 1999 and 2000
  is equal to the total recognised gains and losses shown on the consolidated
  statement of total recognised gains and losses.

The following table reconciles accumulated other comprehensive loss under U.S.
  GAAP:

|                                                    |      | Year Ended
      December 31,
      1998 |      | Year Ended
      December 31,
      1999 |       | Year Ended
      December 31,
      2000 |  
|--------------------------------------------------- | ---- | ---------------------------------------- | ---- | ---------------------------------------- | ----- | ---------------------------------------- | -
|                                                   
|Other comprehensive loss at beginning
      of year | (5.5 | )                                        | (7.9 | )                                        | (26.4 | )                                       
|Exchange adjustments                                |      | 0.9                                      |      | (11.0                                    | )     | (21.2                                    | )
|Redeemable preference share accretion               |      | (3.3                                     | )    | (7.5                                     | )     | (3.9                                     | )
|                                                    |      |                                         
|Other comprehensive loss at end of year             |      | (7.9                                     | )    | (26.4                                    | )     | (51.5                                    | )
|                                                    |      |                                         

F-42

---





#### INTERTEK TESTING SERVICES LIMITED
  NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

#### 31. Issuer, guarantor and non-guarantor companies

Intertek Finance plc (the Issuer) is a wholly owned direct subsidiary
  of the Company and the Issuer has issued the Notes which are fully and unconditionally
  guaranteed on a senior subordinated basis by the Company and certain of its
  wholly owned direct subsidiaries: Intertek Testing Services UK Limited, Testing
  Holdings USA Inc., Yickson Enterprises Limited, Kite Overseas Holdings BV, ITS
  Holding Limited, Testing Holdings Sweden AB, Testing Holdings France EURL, Testing
  Holdings Germany GmbH (collectively, the Guarantor subsidiaries).
  In addition, each of the Guarantors guarantee is itself guaranteed by
  each other Guarantor, fully and unconditionally, on a senior subordinated basis.
  Subject to the provisions of the agreement under which the loans to finance
  the acquisition of the business were made, certain exceptions and applicable
  law, there are no restrictions on the ability of:



|(a) | the Company or any of its direct and indirect subsidiaries
      from paying dividends or making any other distributions or loans or advances
      to the Issuer or
|--- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------



|(b) | the direct and indirect subsidiaries of the Company
      from paying dividends or making any other distribution or loans or advances
      to the Company.
|--- | -----------------------------------------------------------------------------------------------------------------------------------------------------------

Separate financial statements and other disclosures concerning the Issuer,
  the Company and the Guarantor subsidiaries are not presented because management
  has determined that they are not material to the investors. In lieu of the separate
  guarantor financial statements, management has presented condensed consolidating
  financial information. The condensed consolidating financial information presented
  below has been segregated between (a) the Issuer, (b) the Company, (c) the Guarantor
  subsidiaries and (d) the non-Guarantor subsidiaries.

F-43

---





#### INTERTEK TESTING SERVICES LIMITED
  NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

31. Issuer, guarantor and non-guarantor companies (continued)

Statements of Operations
  Year ended December 31, 2000

|                                      |  | Intertek
      Finance plc
      £m |  | Intertek
      Testing
      Services
      Ltd
      £m |   | Guarantor
      subsidiaries
      £m |   | Non-
      Guarantor
      subsidiaries
      £m |   | Consolidation
      adjustments
      £m |   | Consolidated
      totals
      £m |  
|------------------------------------- |  | ----------------------------------- |  | -------------------------------------------------------- | - | ------------------------------------- | - | ------------------------------------------------ | - | ---------------------------------------- | - | ---------------------------------- | -
|                                      |  |                                     | 
|Total group revenue                   |  |                                    |  |                                                         |   |                                      |   | 444.0                                            |   | (44.9                                    | ) | 399.1                              |  
|Operating (costs)/income              |  |                                    |  | (0.3                                                     | ) |                                      |   | (386.2                                           | ) | 44.9                                     |   | (341.6                             | )
|Equity income of associated companies |  |                                    |  |                                                         |   |                                      |   | 0.9                                              |   |                                         |   | 0.9                                |  
|                                      |  |                                    
|Operating (loss)/income               |  |                                    |  | (0.3                                                     | ) |                                      |   | 58.7                                             |   |                                         |   | 58.4                               |  
|Non-operating exceptional items       |  |                                    |  | (3.6                                                     | ) | (4.6                                  | ) | (7.0                                             | ) |                                         |   | (15.2                              | )
|                                      |  |                                    
|Income/(loss) before interest         |  |                                    |  | (3.9                                                     | ) | (4.6                                  | ) | 51.7                                             |   |                                         |   | 43.2                               |  
|Net interest receivable/(payable)     |  | 0.1                                 |  | (8.9                                                     | ) | (8.0                                  | ) | (19.0                                            | ) |                                         |   | (35.8                              | )
|                                      |  |                                    
|Income/(loss) before taxation         |  | 0.1                                 |  | (12.8                                                    | ) | (12.6                                 | ) | 32.7                                             |   |                                         |   | 7.4                                |  
|Taxation                              |  |                                    |  | 0.4                                                      |   | 0.8                                   |   | (12.1                                            | ) |                                         |   | (10.9                              | )
|                                      |  |                                    
|Income/(loss) after taxation          |  | 0.1                                 |  | (12.4                                                    | ) | (11.8                                 | ) | 20.6                                             |   |                                         |   | (3.5                               | )
|Minority interests                    |  |                                    |  |                                                         |   |                                      |   | (3.6                                             | ) |                                         |   | (3.6                               | )
|Dividends from/(to) group companies   |  |                                    |  |                                                         |   | 3.3                                   |   | (3.3                                             | ) |                                         |   |                                   |  
|                                      |  |                                    
|Net income/(loss)                     |  | 0.1                                 |  | (12.4                                                    | ) | (8.5                                  | ) | 13.7                                             |   |                                         |   | (7.1                               | )
|                                      |  |                                    
|                                     
|Statements of Operations              | 
|Year ended December 31, 1999          | 
|                                     
|                                      |  | Intertek
      Finance plc
      £m |  | Intertek
      Testing
      Services
      Ltd
      £m |   | Guarantor
      subsidiaries
      £m |   | Non-
      Guarantor
      subsidiaries
      £m |   | Consolidation
      adjustments
      £m |   | Consolidated
      totals
      £m |  
|                                      |  |                                     | 
|Total group revenue                   |  |                                    |  |                                                         |   |                                      |   | 413.8                                            |   | (51.3                                    | ) | 362.5                              |  
|Operating income/(costs)              |  | 0.1                                 |  | 0.2                                                      |   |                                      |   | (363.0                                           | ) | 51.3                                     |   | (311.4                             | )
|Equity income of associated companies |  |                                    |  |                                                         |   |                                      |   | 0.3                                              |   |                                         |   | 0.3                                |  
|                                      |  |                                    
|Operating income/(loss)               |  | 0.1                                 |  | 0.2                                                      |   |                                      |   | 51.1                                             |   |                                         |   | 51.4                               |  
|Non-operating exceptional items       |  |                                    |  | (1.9                                                     | ) |                                      |   | 4.3                                              |   |                                         |   | 2.4                                |  
|                                      |  |                                    
|Income/(loss) before interest         |  | 0.1                                 |  | (1.7                                                     | ) |                                      |   | 55.4                                             |   |                                         |   | 53.8                               |  
|Net interest receivable/(payable)     |  | 0.1                                 |  | (7.3                                                     | ) | (7.2                                  | ) | (17.8                                            | ) |                                         |   | (32.2                              | )
|                                      |  |                                    
|Income/(loss) before taxation         |  | 0.2                                 |  | (9.0                                                     | ) | (7.2                                  | ) | 37.6                                             |   |                                         |   | 21.6                               |  
|Taxation                              |  |                                    |  | 0.1                                                      |   | 1.3                                   |   | (10.8                                            | ) |                                         |   | (9.4                               | )
|                                      |  |                                    
|Income/(loss) after taxation          |  | 0.2                                 |  | (8.9                                                     | ) | (5.9                                  | ) | 26.8                                             |   |                                         |   | 12.2                               |  
|Minority interests                    |  |                                    |  |                                                         |   |                                      |   | (3.2                                             | ) |                                         |   | (3.2                               | )
|Dividends from/(to) group companies   |  |                                    |  |                                                         |   | 2.8                                   |   | (2.8                                             | ) |                                         |   |                                   |  
|                                      |  |                                    
|Net income/(loss)                     |  | 0.2                                 |  | (8.9                                                     | ) | (3.1                                  | ) | 20.8                                             |   |                                         |   | 9.0                                |  
|                                      |  |                                    
|                                     
|Statements of Operations              | 
|Year ended December 31, 1998          | 
|                                     
|                                      |  | Intertek
      Finance plc
      £m |  | Intertek
      Testing
      Services
      Ltd
      £m |   | Guarantor
      subsidiaries
      £m |   | Non-
      Guarantor
      subsidiaries
      £m |   | Consolidation
      adjustments
      £m |   | Consolidated
      totals
      £m |  
|                                      |  |                                     | 
|Total group revenue                   |  |                                    |  |                                                         |   |                                      |   | 425.4                                            |   | (65.6                                    | ) | 359.8                              |  
|Operating income/(costs)              |  | 0.1                                 |  |                                                         |   |                                      |   | (402.5                                           | ) | 65.6                                     |   | (336.8                             | )
|Equity income of associated companies |  |                                    |  |                                                         |   |                                      |   |                                                 |   |                                         |   |                                   |  
|                                      |  |                                    
|Operating income/(loss)               |  | 0.1                                 |  |                                                         |   |                                      |   | 22.9                                             |   |                                         |   | 23.0                               |  
|Non-operating exceptional items       |  |                                    |  |                                                         |   |                                      |   | (1.4                                             | ) |                                         |   | (1.4                               | )
|                                      |  |                                    
|Income/(loss) before interest         |  | 0.1                                 |  |                                                         |   |                                      |   | 21.5                                             |   |                                         |   | 21.6                               |  
|Net interest receivable/(payable)     |  |                                    |  | (7.5                                                     | ) | 4.1                                   |   | (28.4                                            | ) |                                         |   | (31.8                              | )
|                                      |  |                                    
|Income/(loss) before taxation         |  | 0.1                                 |  | (7.5                                                     | ) | 4.1                                   |   | (6.9                                             | ) |                                         |   | (10.2                              | )
|Taxation                              |  | 0.2                                 |  | 0.5                                                      |   | 1.3                                   |   | (9.2                                             | ) |                                         |   | (7.2                               | )
|                                      |  |                                    
|Income/(loss) after taxation          |  | 0.3                                 |  | (7.0                                                     | ) | 5.4                                   |   | (16.1                                            | ) |                                         |   | (17.4                              | )
|Minority interests                    |  |                                    |  |                                                         |   |                                      |   | (3.2                                             | ) |                                         |   | (3.2                               | )
|Dividends from/(to) group companies   |  |                                    |  |                                                         |   | 3.0                                   |   | (3.0                                             | ) |                                         |   |                                   |  
|                                      |  |                                    
|Net income/(loss)                     |  | 0.3                                 |  | (7.0                                                     | ) | 8.4                                   |   | (22.3                                            | ) |                                         |   | (20.6                              | )
|                                      |  |                                    

F-44

---





#### INTERTEK TESTING SERVICES LIMITED
  NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

31. Issuer, guarantor and non-guarantor companies (continued)

Balance Sheets
  December 31, 2000

|                                                                                |  | Intertek
      Finance plc
      £m |  | Intertek
      Testing
      Services
      Ltd
      £m |   | Guarantor
      subsidiaries
      £m |   | Non-
      Guarantor
      subsidiaries
      £m |   | Consolidation
      adjustments
      £m |   | Consolidated
      totals
      £m |  
|------------------------------------------------------------------------------- |  | ----------------------------------- |  | -------------------------------------------------------- | - | ------------------------------------- | - | ------------------------------------------------ | - | ---------------------------------------- | - | ---------------------------------- | -
|                                                                                |  |                                     | 
|ASSETS                                                                          |  |                                     |  |                                                          |   |                                       |   |                                                  |   |                                          |   |                                    |  
|Current assets                                                                  |  |                                     |  |                                                          |   |                                       |   |                                                  |   |                                          |   |                                    |  
|Cash                                                                            |  |                                    |  | (11.2                                                    | ) | 0.7                                   |   | 31.8                                             |   |                                         |   | 21.3                               |  
|Trade receivables                                                               |  |                                    |  |                                                         |   |                                      |   | 81.6                                             |   |                                         |   | 81.6                               |  
|Inventories                                                                     |  |                                    |  |                                                         |   |                                      |   | 1.7                                              |   |                                         |   | 1.7                                |  
|Other current assets                                                            |  | 145.8                               |  | 92.9                                                     |   | 218.6                                 |   | 294.9                                            |   | (733.1                                   | ) | 19.1                               |  
|                                                                                |  |                                    
|Total current assets                                                            |  | 145.8                               |  | 81.7                                                     |   | 219.3                                 |   | 410.0                                            |   | (733.1                                   | ) | 123.7                              |  
|Goodwill                                                                        |  |                                    |  |                                                         |   |                                      |   | 16.8                                             |   |                                         |   | 16.8                               |  
|Property, plant and equipment, net                                              |  |                                    |  |                                                         |   |                                      |   | 67.9                                             |   |                                         |   | 67.9                               |  
|Investments in subsidiary undertakings                                          |  |                                    |  | 128.6                                                    |   | 217.8                                 |   | 74.5                                             |   | (420.9                                   | ) |                                   |  
|Investments                                                                     |  |                                    |  |                                                         |   |                                      |   | 0.9                                              |   |                                         |   | 0.9                                |  
|                                                                                |  |                                    
|Total assets                                                                    |  | 145.8                               |  | 210.3                                                    |   | 437.1                                 |   | 570.1                                            |   | (1,154.0                                 | ) | 209.3                              |  
|                                                                                |  |                                    
|LIABILITIES AND SHAREHOLDERS
      EQUITY/(DEFICIT)                           
|Current liabilities                                                             | 
|Borrowings (including current portion
      of long term 
          borrowings) |  |                                    |  | 10.0                                                     |   | 12.0                                  |   | 0.1                                              |   |                                         |   | 22.1                               |  
|Accounts payable, accrued liabilities
      and deferred 
          income      |  | 11.0                                |  | 42.7                                                     |   | 223.2                                 |   | 536.7                                            |   | (733.1                                   | ) | 80.5                               |  
|Income taxes payable                                                            |  |                                    |  | (0.4                                                     | ) | (2.3                                  | ) | 9.6                                              |   |                                         |   | 6.9                                |  
|                                                                                |  |                                    
|Total current liabilities                                                       |  | 11.0                                |  | 52.3                                                     |   | 232.9                                 |   | 546.4                                            |   | (733.1                                   | ) | 109.5                              |  
|Long term borrowings                                                            |  | 134.4                               |  | 86.1                                                     |   | 81.4                                  |   | (1.6                                             | ) |                                         |   | 300.3                              |  
|Provisions for liabilities and charges                                          |  |                                    |  |                                                         |   |                                      |   | 13.9                                             |   |                                         |   | 13.9                               |  
|Minority interests                                                              |  |                                    |  |                                                         |   |                                      |   | 6.3                                              |   |                                         |   | 6.3                                |  
|Shareholders equity/(deficit)                                                  | 
|Ordinary shares                                                                 |  | 0.1                                 |  | 0.8                                                      |   | 115.1                                 |   | 195.9                                            |   | (311.1                                   | ) | 0.8                                |  
|Redeemable preference shares                                                    |  |                                    |  | 105.5                                                    |   |                                      |   |                                                 |   |                                         |   | 105.5                              |  
|Shares to be issued                                                             |  |                                    |  | 2.8                                                      |   |                                      |   |                                                 |   |                                         |   | 2.8                                |  
|Premium in excess of par value                                                  |  |                                    |  | 3.6                                                      |   | 25.8                                  |   | 0.6                                              |   | (26.4                                    | ) | 3.6                                |  
|Retained earnings/(deficit)                                                     |  | 0.3                                 |  | (40.8                                                    | ) | (18.1                                 | ) | (191.4                                           | ) | (83.4                                    | ) | (333.4                             | )
|                                                                                |  |                                    
|Total shareholders equity/(deficit)                                            |  | 0.4                                 |  | 71.9                                                     |   | 122.8                                 |   | 5.1                                              |   | (420.9                                   | ) | (220.7                             | )
|                                                                                |  |                                    
|Total liabilities and shareholders
      equity/(deficit)                      |  | 145.8                               |  | 210.3                                                    |   | 437.1                                 |   | 570.1                                            |   | (1,154.0                                 | ) | 209.3                              |  
|                                                                                |  |                                    

F-45

---





#### INTERTEK TESTING SERVICES LIMITED
  NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

31. Issuer, guarantor and non-guarantor companies (continued)

Balance Sheets
  December 31, 1999

|                                                                              |  | Intertek
      Finance plc
      £m |  | Intertek
      Testing
      Services
      Ltd
      £m |   | Guarantor
      subsidiaries
      £m |   | Non-
      Guarantor
      subsidiaries
      £m |   | Consolidation
      adjustments
      £m |   | Consolidated
      totals
      £m |  
|----------------------------------------------------------------------------- |  | ----------------------------------- |  | -------------------------------------------------------- | - | ------------------------------------- | - | ------------------------------------------------ | - | ---------------------------------------- | - | ---------------------------------- | -
|                                                                              |  |                                     | 
|ASSETS                                                                        |  |                                     |  |                                                          |   |                                       |   |                                                  |   |                                          |   |                                    |  
|Current assets                                                                |  |                                     |  |                                                          |   |                                       |   |                                                  |   |                                          |   |                                    |  
|Cash                                                                          |  |                                    |  | (7.5                                                     | ) | 0.8                                   |   | 26.9                                             |   |                                         |   | 20.2                               |  
|Trade receivables                                                             |  |                                    |  |                                                         |   |                                      |   | 70.1                                             |   |                                         |   | 70.1                               |  
|Inventories                                                                   |  |                                    |  |                                                         |   |                                      |   | 2.6                                              |   |                                         |   | 2.6                                |  
|Other current assets                                                          |  | 130.3                               |  | 82.6                                                     |   | 197.8                                 |   | 256.5                                            |   | (651.6                                   | ) | 15.6                               |  
|Deferred taxation asset                                                       |  |                                    |  |                                                         |   |                                      |   |                                                 |   |                                         |   |                                   |  
|                                                                              |  |                                    
|Total current assets                                                          |  | 130.3                               |  | 75.1                                                     |   | 198.6                                 |   | 356.1                                            |   | (651.6                                   | ) | 108.5                              |  
|Goodwill                                                                      |  |                                    |  |                                                         |   |                                      |   | 15.8                                             |   |                                         |   | 15.8                               |  
|Property, plant and equipment, net                                            |  |                                    |  |                                                         |   |                                      |   | 53.8                                             |   |                                         |   | 53.8                               |  
|Investments in subsidiary undertakings                                        |  |                                    |  | 128.6                                                    |   | 206.6                                 |   | 74.4                                             |   | (409.6                                   | ) |                                   |  
|Investments                                                                   |  |                                    |  |                                                         |   |                                      |   | 0.5                                              |   |                                         |   | 0.5                                |  
|                                                                              |  |                                    
|Total assets                                                                  |  | 130.3                               |  | 203.7                                                    |   | 405.2                                 |   | 500.6                                            |   | (1,061.2                                 | ) | 178.6                              |  
|                                                                              |  |                                    
|LIABILITIES AND SHAREHOLDERS
      EQUITY/(DEFICIT)                         
|Current liabilities                                                           | 
|Borrowings (including current portion
      of long
         term borrowings) |  |                                    |  | 10.3                                                     |   | 5.2                                   |   | (0.1                                             | ) |                                         |   | 15.4                               |  
|Accounts payable, accrued liabilities
      and
         deferred income      |  | 8.0                                 |  | 37.1                                                     |   | 192.1                                 |   | 483.9                                            |   | (651.6                                   | ) | 69.5                               |  
|Income taxes payable                                                          |  |                                    |  | (0.7                                                     | ) | (1.8                                  | ) | 7.9                                              |   |                                         |   | 5.4                                |  
|                                                                              |  |                                    
|Total current liabilities                                                     |  | 8.0                                 |  | 46.7                                                     |   | 195.5                                 |   | 491.7                                            |   | (651.6                                   | ) | 90.3                               |  
|Long term borrowings                                                          |  | 122.1                               |  | 68.6                                                     |   | 89.1                                  |   | (1.6                                             | ) |                                         |   | 278.2                              |  
|Provisions for liabilities and charges                                        |  |                                    |  |                                                         |   |                                      |   | 6.8                                              |   |                                         |   | 6.8                                |  
|Minority interests                                                            |  |                                    |  |                                                         |   |                                      |   | 5.8                                              |   |                                         |   | 5.8                                |  
|Shareholders equity/(deficit)                                                | 
|Ordinary shares                                                               |  |                                    |  | 0.8                                                      |   | 105.8                                 |   | 205.1                                            |   | (310.9                                   | ) | 0.8                                |  
|Redeemable preference shares                                                  |  |                                    |  | 105.5                                                    |   |                                      |   |                                                 |   |                                         |   | 105.5                              |  
|Shares to be issued                                                           |  |                                    |  | 2.8                                                      |   |                                      |   |                                                 |   |                                         |   | 2.8                                |  
|Premium in excess of par value                                                |  |                                    |  | 3.6                                                      |   | 23.6                                  |   | 2.9                                              |   | (26.5                                    | ) | 3.6                                |  
|Retained earnings/(deficit)                                                   |  | 0.2                                 |  | (24.3                                                    | ) | (8.8                                  | ) | (210.1                                           | ) | (72.2                                    | ) | (315.2                             | )
|                                                                              |  |                                    
|Total shareholders equity/(deficit)                                          |  | 0.2                                 |  | 88.4                                                     |   | 120.6                                 |   | (2.1                                             | ) | (409.6                                   | ) | (202.5                             | )
|                                                                              |  |                                    
|Total liabilities and shareholders
      equity/(deficit)                    |  | 130.3                               |  | 203.7                                                    |   | 405.2                                 |   | 500.6                                            |   | (1,061.2                                 | ) | 178.6                              |  
|                                                                              |  |                                    

F-46

---





#### INTERTEK TESTING SERVICES LIMITED
  NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

31. Issuer, guarantor and non-guarantor companies (continued)

Statements of Cash Flows
  December 31, 2000

|                                                              |  | Intertek
      Finance plc
      £m |   | Intertek
      Testing
      Services
      Ltd
      £m |   | Guarantor
      subsidiaries
      £m |   | Non-
      Guarantor
      subsidiaries
      £m |   | Consolidation
      adjustments
      £m |  | Consolidated
      totals
      £m |  
|------------------------------------------------------------- |  | ----------------------------------- | - | -------------------------------------------------------- | - | ------------------------------------- | - | ------------------------------------------------ | - | ---------------------------------------- |  | ---------------------------------- | -
|                                                              |  |                                     |  
|Total operating cash inflow/(outflow)                         |  |                                    |   | 0.3                                                      |   | (0.6                                  | ) | 72.2                                             |   |                                         |  | 71.9                               |  
|Returns on investments and servicing
      of finance         |  | (2.3                                | ) | 1.5                                                      |   | (7.8                                  | ) | (17.8                                            | ) |                                         |  | (26.4                              | )
|Taxation                                                      |  |                                    |   | 0.7                                                      |   | 0.4                                   |   | (11.2                                            | ) |                                         |  | (10.1                              | )
|Capital expenditure and financial investment                  |  |                                    |   |                                                         |   |                                      |   | (26.1                                            | ) |                                         |  | (26.1                              | )
|Acquisitions and disposals                                    |  |                                    |   | (1.2                                                     | ) | (0.7                                  | ) | 1.3                                              |   |                                         |  | (0.6                               | )
|                                                              |  |                                    
|                                                             
|Cash (outflow)/inflow before financing                        |  | (2.3                                | ) | 1.3                                                      |   | (8.7                                  | ) | 18.4                                             |   |                                         |  | 8.7                                |  
|                                                             
|Financing                                                     |  | 2.3                                 |   | (5.0                                                     | ) | 8.6                                   |   | (13.2                                            | ) |                                         |  | (7.3                               | )
|                                                              |  |                                    
|                                                             
|(Decrease)/increase in cash in the
      period               |  |                                    |   | (3.7                                                     | ) | (0.1                                  | ) | 5.2                                              |   |                                         |  | 1.4                                |  
|                                                              |  |                                    
|                                                             
|Reconciliation of net cash flow
      to movement in net debt | 
|                                                             
|(Decrease)/increase in cash in the
      period               |  |                                    |   | (3.7                                                     | ) | (0.1                                  | ) | 5.2                                              |   |                                         |  | 1.4                                |  
|                                                             
|Cash inflow from increase in debt                             |  |                                    |   | 0.4                                                      |   | 6.3                                   |   | 0.7                                              |   |                                         |  | 7.4                                |  
|                                                              |  |                                    
|Change in net debt resulting from cash
      flows            |  |                                    |   | (3.3                                                     | ) | 6.2                                   |   | 5.9                                              |   |                                         |  | 8.8                                |  
|Debt issued in lieu of interest payment                       |  |                                    |   | (10.1                                                    | ) |                                      |   |                                                 |   |                                         |  | (10.1                              | )
|Acquisitions and disposals                                    |  |                                    |   |                                                         |   |                                      |   | (0.7                                             | ) |                                         |  | (0.7                               | )
|Other non-cash movements                                      |  | (0.7                                | ) | (0.1                                                     | ) | 0.7                                   |   | (2.0                                             | ) |                                         |  | (2.1                               | )
|Exchange movements                                            |  | (11.6                               | ) | (7.3                                                     | ) | (6.1                                  | ) | 1.4                                              |   |                                         |  | (23.6                              | )
|                                                              |  |                                    
|                                                             
|Movement in net debt in the period                            |  | (12.3                               | ) | (20.8                                                    | ) | 0.8                                   |   | 4.6                                              |   |                                         |  | (27.7                              | )
|Net debt at the start of the period                           |  | (122.1                              | ) | (86.5                                                    | ) | (93.5                                 | ) | 28.7                                             |   |                                         |  | (273.4                             | )
|                                                              |  |                                    
|                                                             
|Net debt at the end of the period                             |  | (134.4                              | ) | (107.3                                                   | ) | (92.7                                 | ) | 33.3                                             |   |                                         |  | (301.1                             | )
|                                                              |  |                                    

F-47

---





#### INTERTEK TESTING SERVICES LIMITED
  NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

31. Issuer, guarantor and non-guarantor companies (continued)

Statements of Cash Flows
  December 31, 1999

|                                                              |  | Intertek
      Finance plc
      £m |   | Intertek
      Testing
      Services
      Ltd
      £m |   | Guarantor
      subsidiaries
      £m |   | Non-
      Guarantor
      subsidiaries
      £m |   | Consolidation
      adjustments
      £m |  | Consolidated
      totals
      £m |  
|------------------------------------------------------------- |  | ----------------------------------- | - | -------------------------------------------------------- | - | ------------------------------------- | - | ------------------------------------------------ | - | ---------------------------------------- |  | ---------------------------------- | -
|                                                              |  |                                     |  
|Total operating cash (outflow)/inflow                         |  | (0.1                                | ) | (3.5                                                     | ) | 0.5                                   |   | 62.9                                             |   |                                         |  | 59.8                               |  
|Returns on investments and servicing
      of finance         |  | (2.2                                | ) | 0.3                                                      |   | (1.9                                  | ) | (20.1                                            | ) |                                         |  | (23.9                              | )
|Taxation                                                      |  | 0.1                                 |   | 0.5                                                      |   | 1.5                                   |   | (9.0                                             | ) |                                         |  | (6.9                               | )
|Capital expenditure and financial investment                  |  |                                    |   |                                                         |   |                                      |   | (17.5                                            | ) |                                         |  | (17.5                              | )
|Acquisitions and disposals                                    |  |                                    |   | (0.2                                                     | ) | (0.2                                  | ) | (4.6                                             | ) |                                         |  | (5.0                               | )
|                                                              |  |                                    
|                                                             
|Cash (outflow)/inflow before financing                        |  | (2.2                                | ) | (2.9                                                     | ) | (0.1                                  | ) | 11.7                                             |   |                                         |  | 6.5                                |  
|                                                             
|Financing                                                     |  | 2.2                                 |   | 2.2                                                      |   | 0.7                                   |   | (6.7                                             | ) |                                         |  | (1.6                               | )
|                                                              |  |                                    
|                                                             
|(Decrease)/increase in cash in the
      period               |  |                                    |   | (0.7                                                     | ) | 0.6                                   |   | 5.0                                              |   |                                         |  | 4.9                                |  
|                                                              |  |                                    
|                                                             
|Reconciliation of net cash flow
      to movement in net debt | 
|                                                             
|(Decrease)/increase in cash in the
      period               |  |                                    |   | (0.7                                                     | ) | 0.6                                   |   | 5.0                                              |   |                                         |  | 4.9                                |  
|                                                             
|Cash inflow from increase in debt                             |  |                                    |   | 6.0                                                      |   | 14.8                                  |   | 1.2                                              |   |                                         |  | 22.0                               |  
|                                                              |  |                                    
|Change in net debt resulting from cash
      flows            |  |                                    |   | 5.3                                                      |   | 15.4                                  |   | 6.2                                              |   |                                         |  | 26.9                               |  
|Debt issued in lieu of interest payment                       |  |                                    |   | (8.1                                                     | ) |                                      |   |                                                 |   |                                         |  | (8.1                               | )
|Acquisitions and disposals                                    |  |                                    |   |                                                         |   |                                      |   | (1.6                                             | ) |                                         |  | (1.6                               | )
|Other non-cash movements                                      |  | (0.6                                | ) | (0.2                                                     | ) | (0.6                                  | ) | (0.6                                             | ) |                                         |  | (2.0                               | )
|Exchange movements                                            |  | (5.2                                | ) | (2.7                                                     | ) | (2.0                                  | ) | 0.3                                              |   |                                         |  | (9.6                               | )
|                                                              |  |                                    
|                                                             
|Movement in net debt in the period                            |  | (5.8                                | ) | (5.7                                                     | ) | 12.8                                  |   | 4.3                                              |   |                                         |  | 5.6                                |  
|Net debt at the start of the period                           |  | (116.3                              | ) | (80.7                                                    | ) | (106.3                                | ) | 24.3                                             |   |                                         |  | (279.0                             | )
|                                                              |  |                                    
|                                                             
|Net debt at the end of the period                             |  | (122.1                              | ) | (86.4                                                    | ) | (93.5                                 | ) | 28.6                                             |   |                                         |  | (273.4                             | )
|                                                              |  |                                    

F-48

---





#### INTERTEK TESTING SERVICES LIMITED
  NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

31. Issuer, guarantor and non-guarantor companies (continued)

Statements of Cash Flows
  December 31, 1998

|                                                              |  | Intertek
      Finance plc
      £m |   | Intertek
      Testing
      Services
      Ltd
      £m |   | Guarantor
      subsidiaries
      £m |   | Non-
      Guarantor
      subsidiaries
      £m |   | Consolidation
      adjustments
      £m |   | Consolidated
      totals
      £m |  
|------------------------------------------------------------- |  | ----------------------------------- | - | -------------------------------------------------------- | - | ------------------------------------- | - | ------------------------------------------------ | - | ---------------------------------------- | - | ---------------------------------- | -
|                                                              |  |                                     |  
|Total operating cash inflow/(outflow)                         |  | 0.3                                 |   | 2.5                                                      |   | (0.4                                  | ) | 30.0                                             |   |                                         |   | 32.4                               |  
|Returns on investments and servicing
      of finance         |  | (2.3                                | ) | (7.5                                                     | ) | 6.3                                   |   | (18.9                                            | ) | (2.6                                     | ) | (25.0                              | )
|Taxation                                                      |  | (0.1                                | ) | 1.4                                                      |   | 0.9                                   |   | (8.1                                             | ) |                                         |   | (5.9                               | )
|Capital expenditure and financial investment                  |  |                                    |   |                                                         |   |                                      |   | (14.0                                            | ) |                                         |   | (14.0                              | )
|Acquisitions and disposals                                    |  |                                    |   | 2.0                                                      |   | (0.1                                  | ) | (13.6                                            | ) |                                         |   | (11.7                              | )
|                                                              |  |                                    
|                                                             
|Cash (outflow)/inflow before financing                        |  | (2.1                                | ) | (1.6                                                     | ) | 6.7                                   |   | (24.6                                            | ) | (2.6                                     | ) | (24.2                              | )
|                                                             
|Financing                                                     |  | 2.1                                 |   | (4.7                                                     | ) | (6.5                                  | ) | 25.1                                             |   |                                         |   | 16.0                               |  
|                                                              |  |                                    
|                                                             
|(Decrease)/increase in cash in the
      period               |  |                                    |   | (6.3                                                     | ) | 0.2                                   |   | 0.5                                              |   | (2.6                                     | ) | (8.2                               | )
|                                                              |  |                                    
|                                                             
|Reconciliation of net cash flow
      to movement in net debt | 
|                                                             
|(Decrease)/increase in cash in the
      period               |  |                                    |   | (6.3                                                     | ) | 0.2                                   |   | 0.5                                              |   | (2.6                                     | ) | (8.2                               | )
|                                                             
|Cash (outflow)/inflow from increase
      in debt             |  |                                    |   | (16.3                                                    | ) |                                      |   | 5.3                                              |   |                                         |   | (11.0                              | )
|                                                              |  |                                    
|Change in net debt resulting from cash
      flows            |  |                                    |   | (22.6                                                    | ) | 0.2                                   |   | 5.8                                              |   | (2.6                                     | ) | (19.2                              | )
|Debt issued in lieu of interest payment                       |  |                                    |   | (7.1                                                     | ) |                                      |   |                                                 |   |                                         |   | (7.1                               | )
|Acquisitions                                                  |  |                                    |   |                                                         |   |                                      |   | (0.4                                             | ) |                                         |   | (0.4                               | )
|Other non-cash movements                                      |  | (0.4                                | ) | (0.2                                                     | ) | 1.7                                   |   | (3.0                                             | ) |                                         |   | (1.9                               | )
|Exchange movements                                            |  | 0.7                                 |   | 0.5                                                      |   | 1.0                                   |   | (0.5                                             | ) |                                         |   | 1.7                                |  
|                                                              |  |                                    
|                                                             
|Movement in net debt in the period                            |  | 0.3                                 |   | (29.4                                                    | ) | 2.9                                   |   | 1.9                                              |   | (2.6                                     | ) | (26.9                              | )
|Net debt at the start of the period                           |  | (116.6                              | ) | (51.3                                                    | ) | (109.2                                | ) | 25.0                                             |   |                                         |   | (252.1                             | )
|                                                              |  |                                    
|                                                             
|Net debt at the end of the period                             |  | (116.3                              | ) | (80.7                                                    | ) | (106.3                                | ) | 26.9                                             |   | (2.6                                     | ) | (279.0                             | )
|                                                              |  |                                    

F-49

---





#### INTERTEK TESTING SERVICES LIMITED
  NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

31. Issuer, guarantor and non-guarantor companies (continued)

Statements of Cash FlowsDecember 31, 2000

|                                                                             |  | Intertek
      Finance plc
      £m |   | Intertek
      Testing
      Services
      Ltd
      £m |   | Guarantor
      subsidiaries
      £m |   | Non-
      Guarantor
      subsidiaries
      £m |    | Consolidation
      adjustments
      £m |  | Consolidated
      totals
      £m |  
|---------------------------------------------------------------------------- |  | ----------------------------------- | - | -------------------------------------------------------- | - | ------------------------------------- | - | ------------------------------------------------ | -- | ---------------------------------------- |  | ---------------------------------- | -
|                                                                             |  |                                     |  
|Reconciliation of operating income
      to operating
          cash inflow: |  |                                     |   |                                                          |   |                                       |   |                                                  |    |                                          |  |                                    |  
|Operating income                                                             |  |                                    |   | (0.3                                                     | ) |                                      |   | 58.6                                             |    |                                         |  | 58.3                               |  
|Depreciation charge                                                          |  |                                    |   |                                                         |   |                                      |   | 13.0                                             |    |                                         |  | 13.0                               |  
|Goodwill amortisation                                                        |  |                                    |   |                                                         |   |                                      |   | 1.1                                              |    |                                         |  | 1.1                                |  
|Loss on sale of fixed assets                                                 |  |                                    |   |                                                         |   |                                      |   | 0.1                                              |    |                                         |  | 0.1                                |  
|Increase in inventories                                                      |  |                                    |   |                                                         |   |                                      |   | (0.1                                             | )  |                                         |  | (0.1                               | )
|Decrease/(increase) in receivables
      and prepayments                     |  |                                    |   | 0.1                                                      |   | (0.8                                  | ) | (11.2                                            | )  |                                         |  | (11.9                              | )
|Increase in payables                                                         |  |                                    |   | 0.5                                                      |   | 0.2                                   |   | 7.0                                              |    |                                         |  | 7.7                                |  
|Discontinued operating exceptional
      charges                             |  |                                    |   |                                                         |   |                                      |   | 7.8                                              |    |                                         |  | 7.8                                |  
|Decrease in other provisions                                                 |  |                                    |   |                                                         |   |                                      |   | (3.6                                             | )  |                                         |  | (3.6                               | )
|                                                                             |  |                                    
|                                                                             |  |                                    |   | 0.3                                                      |   | (0.6                                  | ) | 72.7                                             |    |                                         |  | 72.4                               |  
|Equity income of associates                                                  |  |                                    |   |                                                         |   |                                      |   | (0.9                                             | )  |                                         |  | (0.9                               | )
|Less dividends received from associates                                      |  |                                    |   |                                                         |   |                                      |   | 0.4                                              |    |                                         |  | 0.4                                |  
|                                                                             |  |                                    
|Total operating cash inflow/(outflow)                                        |  |                                    |   | 0.3                                                      |   | (0.6                                  | ) | 72.2                                             |    |                                         |  | 71.9                               |  
|                                                                             |  |                                    
|                                                                            
|Returns on investment and servicing
      of finance                         | 
|Net interest paid                                                            |  | (2.3                                | ) | 1.5                                                      |   | (9.2                                  | ) | (13.0                                            | )  |                                         |  | (23.0                              | )
|Dividends received                                                           |  |                                    |   |                                                         |   | 1.4                                   |   | (1.4                                             | )  |                                         |  |                                   |  
|Dividends paid to minorities                                                 |  |                                    |   |                                                         |   |                                      |   | (3.4                                             | )  |                                         |  | (3.4                               | )
|                                                                             |  |                                    
|                                                                             |  | (2.3                                | ) | 1.5                                                      |   | (7.8                                  | ) | (17.8                                            | )  |                                         |  | (26.4                              | )
|                                                                             |  |                                    
|                                                                            
|Capital expenditure and financial
      investment                           | 
|Purchase of property, plant and equipment                                    |  |                                    |   |                                                         |   |                                      |   | (26.4                                            | )  |                                         |  | (26.4                              | )
|Sale of property, plant and equipment                                        |  |                                    |   |                                                         |   |                                      |   | 0.3                                              |    |                                         |  | 0.3                                |  
|                                                                             |  |                                    
|                                                                             |  |                                    |   |                                                         |   |                                      |   | (26.1                                            | )  |                                         |  | (26.1                              | )
|                                                                             |  |                                    
|                                                                            
|Acquisitions and disposals                                                   | 
|Purchase of subsidiaries                                                     |  |                                    |   |                                                         |   | (0.1                                  | ) | (1.9                                             | )  |                                         |  | (2.0                               | )
|Acquisition provision payments                                               |  |                                    |   |                                                         |   |                                      |   |                                                 |    |                                         |  |                                   |  
|Sale of subsidiary undertakings                                              |  |                                    |   | (1.2                                                     | ) | (0.6                                  | ) | 3.2                                              |    |                                         |  | 1.4                                |  
|                                                                             |  |                                    
|                                                                             |  |                                    |   | (1.2                                                     | ) | (0.7                                  | ) | 1.3                                              |    |                                         |  | (0.6                               | )
|                                                                             |  |                                    
|                                                                            
|Financing                                                                    | 
|Issue/(repayment) of short term debt                                         |  |                                    |   | 0.6                                                      |   |                                      |   | (1.2                                             | )  |                                         |  | (0.6                               | )
|Issue/(repayment) of other loans                                             |  | 2.3                                 |   | (5.5                                                     | ) | 8.5                                   |   | (12.                                             | 1) |                                         |  | (6.8                               | )
|Cash subscribed by minorities                                                |  |                                    |   |                                                         |   |                                      |   | 0.1                                              |    |                                         |  | 0.1                                |  
|                                                                             |  |                                    
|                                                                             |  | 2.3                                 |   | (4.9                                                     | ) | 8.5                                   |   | (13.                                             | 2) |                                         |  | (7.3                               | )
|                                                                             |  |                                    

F-50

---





#### INTERTEK TESTING SERVICES LIMITED
  NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

31. Issuer, guarantor and non-guarantor companies (continued)

Statements of Cash Flows
  December 31, 1999

|                                                                              |  | Intertek
      Finance plc
      £m |   | Intertek
      Testing
      Services
      Ltd
      £m |   | Guarantor
      subsidiaries
      £m |   | Non-
      Guarantor
      subsidiaries
      £m |   | Consolidation
      adjustments
      £m |  | Consolidated
      totals
      £m |  
|----------------------------------------------------------------------------- |  | ----------------------------------- | - | -------------------------------------------------------- | - | ------------------------------------- | - | ------------------------------------------------ | - | ---------------------------------------- |  | ---------------------------------- | -
|                                                                              |  |                                     |  
|Reconciliation of operating income
      to operating 
          cash inflow: |  |                                     |   |                                                          |   |                                       |   |                                                  |   |                                          |  |                                    |  
|Operating income                                                              |  | 0.1                                 |   | 0.1                                                      |   |                                      |   | 51.1                                             |   |                                         |  | 51.3                               |  
|Depreciation charge                                                           |  |                                    |   |                                                         |   |                                      |   | 11.4                                             |   |                                         |  | 11.4                               |  
|Goodwill amortisation                                                         |  |                                    |   |                                                         |   |                                      |   | 0.9                                              |   |                                         |  | 0.9                                |  
|Loss on sale of fixed assets                                                  |  |                                    |   |                                                         |   |                                      |   | 0.1                                              |   |                                         |  | 0.1                                |  
|Decrease in inventories                                                       |  |                                    |   |                                                         |   |                                      |   | 1.1                                              |   |                                         |  | 1.1                                |  
|(Increase)/decrease in receivables
      and prepayments                      |  |                                    |   | (0.9                                                     | ) | 0.5                                   |   | (3.5                                             | ) |                                         |  | (3.9                               | )
|Increase in payables                                                          |  | (0.2                                | ) | (2.7                                                     | ) |                                      |   | (3.9                                             | ) |                                         |  | (6.8                               | )
|Cash payments from exporters                                                  |  |                                    |   |                                                         |   |                                      |   | 5.0                                              |   |                                         |  | 5.0                                |  
|Discontinued operating exceptional
      charges                              |  |                                    |   |                                                         |   |                                      |   | 2.9                                              |   |                                         |  | 2.9                                |  
|Increase in other provisions                                                  |  |                                    |   |                                                         |   |                                      |   | (2.3                                             | ) |                                         |  | (2.3                               | )
|                                                                              |  |                                    
|                                                                              |  | (0.1                                | ) | (3.5                                                     | ) | 0.5                                   |   | 62.8                                             |   |                                         |  | 59.7                               |  
|Equity income of associates                                                   |  |                                    |   |                                                         |   |                                      |   | (0.3                                             | ) |                                         |  | (0.3                               | )
|Less dividends received from associates                                       |  |                                    |   |                                                         |   |                                      |   | 0.4                                              |   |                                         |  | 0.4                                |  
|                                                                              |  |                                    
|Total operating cash (outflow)/inflow                                         |  | (0.1                                | ) | (3.5                                                     | ) | 0.5                                   |   | 62.9                                             |   |                                         |  | 59.8                               |  
|                                                                              |  |                                    
|                                                                             
|Returns on investment and servicing
      of finance                          | 
|Net interest paid                                                             |  | (2.2                                | ) | 0.3                                                      |   | (4.7                                  | ) | (15.2                                            | ) |                                         |  | (21.8                              | )
|Dividends paid to minorities                                                  |  |                                    |   |                                                         |   | 2.8                                   |   | (4.9                                             | ) |                                         |  | (2.1                               | )
|                                                                              |  |                                    
|                                                                              |  | (2.2                                | ) | 0.3                                                      |   | (1.9                                  | ) | (20.1                                            | ) |                                         |  | (23.9                              | )
|                                                                              |  |                                    
|                                                                             
|Capital expenditure and financial
      investment                            | 
|Purchase of property, plant and equipment                                     |  |                                    |   |                                                         |   |                                      |   | (17.7                                            | ) |                                         |  | (17.7                              | )
|Sale of property, plant and equipment                                         |  |                                    |   |                                                         |   |                                      |   | 0.2                                              |   |                                         |  | 0.2                                |  
|                                                                              |  |                                    
|                                                                              |  |                                    |   |                                                         |   |                                      |   | (17.5                                            | ) |                                         |  | (17.5                              | )
|                                                                              |  |                                    
|                                                                             
|Acquisitions and disposals                                                    | 
|Purchase of subsidiary undertakings                                           |  |                                    |   |                                                         |   | (0.2                                  | ) | (8.1                                             | ) |                                         |  | (8.3                               | )
|Acquisition provision payments                                                |  |                                    |   | (0.2                                                     | ) |                                      |   |                                                 |   |                                         |  | (0.2                               | )
|Sale of subsidiaries                                                          |  |                                    |   |                                                         |   |                                      |   | 3.5                                              |   |                                         |  | 3.5                                |  
|                                                                              |  |                                    
|                                                                              |  |                                    |   | (0.2                                                     | ) | (0.2                                  | ) | (4.6                                             | ) |                                         |  | (5.0                               | )
|                                                                              |  |                                     |  
|                                                                             
|Financing                                                                     | 
|Ordinary shares issued and to be issued                                       |  |                                    |   | 1.1                                                      |   |                                      |   |                                                 |   |                                         |  | 1.1                                |  
|Issue of redeemable preference shares                                         |  |                                    |   | 18.8                                                     |   |                                      |   |                                                 |   |                                         |  | 18.8                               |  
|Repayment of short term debt                                                  |  |                                    |   | (5.9                                                     | ) |                                      |   |                                                 |   |                                         |  | (5.9                               | )
|Issue/(repayment) of other loans                                              |  | 2.2                                 |   | (11.8                                                    | ) | 0.7                                   |   | (7.2                                             | ) |                                         |  | (16.1                              | )
|Cash subscribed by minorities                                                 |  |                                    |   |                                                         |   |                                      |   | 0.5                                              |   |                                         |  | 0.5                                |  
|                                                                              |  |                                    
|                                                                              |  | 2.2                                 |   | 2.2                                                      |   | 0.7                                   |   | (6.7                                             | ) |                                         |  | (1.6                               | )
|                                                                              |  |                                    

F-51

---





#### INTERTEK TESTING SERVICES LIMITED
  NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

31. Issuer, guarantor and non-guarantor companies (continued)

Statements of Cash Flows
  December 31, 1998

|                                                                       |  | Intertek
      Finance plc
      £m |   | Intertek
      Testing
      Services
      Ltd
      £m |   | Guarantor
      subsidiaries
      £m |   | Non-
      Guarantor
      subsidiaries
      £m |   | Consolidation
      adjustments
      £m |   | Consolidated
      totals
      £m |   
|---------------------------------------------------------------------- |  | ----------------------------------- | - | -------------------------------------------------------- | - | ------------------------------------- | - | ------------------------------------------------ | - | ---------------------------------------- | - | ---------------------------------- | --
|                                                                       |  |                                     |  
|Reconciliation of operating income to operating
          cash inflow: |  |                                     |   |                                                          |   |                                       |   |                                                  |   |                                          |   |                                    |   
|Operating income                                                       |  | 0.1                                 |   |                                                         |   |                                      |   | 22.9                                             |   |                                         |   | 23.0                               |   
|Depreciation charge                                                    |  |                                    |   |                                                         |   |                                      |   | 11.2                                             |   |                                         |   | 11.2                               |   
|Goodwill amortisation                                                  |  |                                    |   |                                                         |   |                                      |   | 0.4                                              |   |                                         |   | 0.4                                |   
|Loss on sale of fixed assets                                           |  |                                    |   |                                                         |   |                                      |   | 0.2                                              |   |                                         |   | 0.2                                |   
|Increase in inventories                                                |  |                                    |   |                                                         |   |                                      |   | (1.1                                             | ) |                                         |   | (1.1                               |   
|Increase in receivables and prepayments                                |  |                                    |   |                                                         |   | (0.3                                  | ) | (11.1                                            | ) |                                         |   | (11.4.                             | ) 
|Increase/(decrease) in payables                                        |  | 0.2                                 |   | 2.5                                                      |   | (0.1                                  | ) | 3.1                                              |   |                                         |   | 5.7                                |   
|Discontinued operating exceptional charges                             |  |                                    |   |                                                         |   |                                      |   | 5.2                                              |   |                                         |   | 5.2                                |   
|Decrease in other provisions                                           |  |                                    |   |                                                         |   |                                      |   | (0.8                                             | ) |                                         |   | (0.8                               | ) 
|                                                                       |  |                                    
|Total operating cash inflow                                            |  | 0.3                                 |   | 2.5                                                      |   | (0.4                                  | ) | 30.0                                             |   |                                         |   | 32.4                               |   
|                                                                       |  |                                    
|                                                                      
|Returns on investment and servicing of
      finance                   | 
|Net interest paid                                                      |  | (2.3                                | ) | (7.5                                                     | ) | 3.3                                   |   | (16.1                                            | ) |                                         |   | (22.6                              | ) 
|Dividends paid to minorities                                           |  |                                    |   |                                                         |   | 3.0                                   |   | (2.8                                             | ) | (2.6                                     | ) | (2.4                               | ) 
|                                                                       |  |                                    
|                                                                       |  | (2.3                                | ) | (7.5                                                     | ) | 6.3                                   |   | (18.9                                            | ) | (2.6                                     | ) | (25.0                              | ) 
|                                                                       |  |                                    
|                                                                      
|Capital expenditure and financial investment                           | 
|Purchase of property, plant and equipment                              |  |                                    |   |                                                         |   |                                      |   | (14.1                                            | ) |                                         |   | (14.1                              | ) 
|Sale of property, plant and equipment                                  |  |                                    |   |                                                         |   |                                      |   | 0.1                                              |   |                                         |   | 0.1                                |   
|                                                                       |  |                                    
|                                                                       |  |                                    |   |                                                         |   |                                      |   | (14.0                                            | ) |                                         |   | (14.0                              | ) 
|                                                                       |  |                                    
|                                                                      
|Acquisitions and disposals                                             | 
|Purchase of subsidiaries                                               |  |                                    |   | 2.6                                                      |   | (0.1                                  | ) | (13.2                                            | ) |                                         |   | (10.                               | 7)
|Acquisition provision payments                                         |  |                                    |   | (0.6                                                     | ) |                                      |   |                                                 |   |                                         |   | (0.6                               | ) 
|Sale of subsidiaries                                                   |  |                                    |   |                                                         |   |                                      |   | (0.4                                             | ) |                                         |   | (0.4                               | ) 
|                                                                       |  |                                    
|                                                                       |  |                                    |   | 2.0                                                      |   | (0.1                                  | ) | (13.6                                            | ) |                                         |   | (11.7                              | ) 
|                                                                       |  |                                    
|                                                                      
|Financing                                                              | 
|Ordinary shares issued and to be issued                                |  |                                    |   | 0.2                                                      |   |                                      |   |                                                 |   |                                         |   | 0.2                                |   
|Issue of redeemable preference shares                                  |  |                                    |   | 4.8                                                      |   |                                      |   |                                                 |   |                                         |   | 4.8                                |   
|Issue of short term debt                                               |  |                                    |   | 16.4                                                     |   |                                      |   |                                                 |   |                                         |   | 16.4                               |   
|Issue/(repayment) of other loans                                       |  | 2.1                                 |   | (26.1                                                    | ) | (6.5                                  | ) | 25.0                                             |   |                                         |   | (5.5                               | ) 
|Cash subscribed by minorities                                          |  |                                    |   |                                                         |   |                                      |   | 0.1                                              |   |                                         |   | 0.1                                |   
|                                                                       |  |                                    
|                                                                       |  | 2.1                                 |   | (4.7                                                     | ) | (6.5                                  | ) | 25.1                                             |   |                                         |   | 16.0                               |   
|                                                                       |  |                                    

F-52

---





#### INTERTEK TESTING SERVICES LIMITED
  NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

31. Issuer, guarantor and non-guarantor companies (continued)

Statements of Cash Flows
  December 31, 2000

|                                                    |  | Intertek
      Finance plc
      £m |   | Intertek
      Testing
      Services
      Ltd
      £m |   | Guarantor
      subsidiaries
      £m |   | Non-
      Guarantor
      subsidiaries
      £m |   | Consolidation
      adjustments
      £m |  | Consolidated
      totals
      £m |  
|--------------------------------------------------- |  | ----------------------------------- | - | -------------------------------------------------------- | - | ------------------------------------- | - | ------------------------------------------------ | - | ---------------------------------------- |  | ---------------------------------- | -
|                                                    |  |                                     |  
|Analysis of changes in net debt                     |  |                                     |   |                                                          |   |                                       |   |                                                  |   |                                          |  |                                    |  
|                                                   
|Cash at bank at December 31, 1999                   |  |                                    |   | (7.6                                                     | ) | 0.9                                   |   | 26.9                                             |   |                                         |  | 20.2                               |  
|Cash flow                                           |  |                                    |   | (3.6                                                     | ) | (0.2                                  | ) | 5.2                                              |   |                                         |  | 1.4                                |  
|Acquisitions and disposals                          |  |                                    |   |                                                         |   |                                      |   | (0.7                                             | ) |                                         |  | (0.7                               | )
|Exchange adjustments                                |  |                                    |   |                                                         |   |                                      |   | 0.4                                              |   |                                         |  | 0.4                                |  
|                                                    |  |                                    
|Cash at bank at December 31, 2000                   |  |                                    |   | (11.2                                                    | ) | 0.7                                   |   | 31.8                                             |   |                                         |  | 21.3                               |  
|                                                    |  |                                    
|                                                   
|Debt due within one year at December
      31, 1999 |  |                                    |   | (10.4                                                    | ) | (5.2                                  | ) | 0.2                                              |   |                                         |  | (15.4                              | )
|Cash flow                                           |  |                                    |   | 0.4                                                      |   | 6.3                                   |   | 0.7                                              |   |                                         |  | 7.4                                |  
|Other non-cash changes                              |  |                                    |   |                                                         |   | (12.2                                 | ) | (1.3                                             | ) |                                         |  | (13.5                              | )
|Exchange adjustments                                |  |                                    |   |                                                         |   | (0.9                                  | ) | 0.3                                              |   |                                         |  | (0.6                               | )
|                                                    |  |                                    
|Debt due within one year at December
      31, 2000 |  |                                    |   | (10.0                                                    | ) | (12.0                                 | ) | (0.1                                             | ) |                                         |  | (22.1                              | )
|                                                    |  |                                    
|                                                   
|Debt due after one year at December
      31, 1999  |  | (122.1                              | ) | (68.6                                                    | ) | (89.1                                 | ) | 1.6                                              |   |                                         |  | (278.2                             | )
|Debt issued in lieu of interest payment             |  |                                    |   | (10.1                                                    | ) |                                      |   |                                                 |   |                                         |  | (10.1                              | )
|Other non-cash changes                              |  | (0.7                                | ) | (0.1                                                     | ) | 13.0                                  |   | (0.8                                             | ) |                                         |  | 11.4                               |  
|Exchange adjustments                                |  | (11.6                               | ) | (7.3                                                     | ) | (5.3                                  | ) | 0.8                                              |   |                                         |  | (23.4                              | )
|                                                    |  |                                    
|Debt due after one year at December
      31, 2000  |  | (134.4                              | ) | (86.1                                                    | ) | (81.4                                 | ) | 1.6                                              |   |                                         |  | (300.3                             | )
|                                                   
|                                                    |  |                                     |  
|Total net debt at December 31, 2000                 |  | (134.4                              | ) | (107.3                                                   | ) | (92.7                                 | ) | 33.3                                             |   |                                         |  | (301.1                             | )
|                                                    |  |                                     |  

F-53

---





#### SIGNATURES

Pursuant to the requirements of Section 12 of the Securities Exchange Act of
  1934, the Registrant certifies that it meets all of the requirements for filing
  on Form 20-F and has duly caused this annual report to be signed on its behalf
  by the undersigned, thereunto duly authorised.

INTERTEK TESTING SERVICES LIMITED
  (Registrant)

|By: |  | /s/ RICHARD NELSON              
|--- |  | --------------------------------
|    |  |                                 
|    |  | Name: 
      Title: 
      Date:
|    |  |                                 
|By: |  | /s/ WILLIAM SPENCER             
|    |  |                                 
|    |  | Name: 
      Title: 
      Date: