UNITED STATES
                       SECURITIES AND EXCHANGE COMMISSION
                             Washington, D.C. 20549
                              --------------------

                                    FORM 10-K
(Mark One)
/X/              ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
                         SECURITIES EXCHANGE ACT OF 1934
                   For the fiscal year ended December 31, 2006

                                       OR

/ /         TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
                         SECURITIES EXCHANGE ACT OF 1934
                For the transition period from _______ to _______

                         Commission file number 0-21874

                           Berkeley Technology Limited
             (Exact name of registrant as specified in its charter)
                             ----------------------


Jersey, Channel Islands                                 Not applicable
(State or other jurisdiction                (I.R.S. Employer Identification No.)
 of incorporation or organization)

                          Minden House, 6 Minden Place
                           St. Helier, Jersey JE2 4WQ
                                 Channel Islands
          (Address of principal executive offices, including zip code)

                              011 44 (1534) 607700
              (Registrant's telephone number, including area code)


        Securities registered pursuant to Section 12(b) of the Act: None

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

                               Title of each class
 American Depositary Shares, each representing ten Ordinary Shares of $0.05 par
         value per share Ordinary Shares of $0.05 par value per share *

*Not for  trading,  but only in  connection  with the  registration  of American
Depositary  Shares,  pursuant to the requirements of the Securities and Exchange
Commission.

     Indicate by check mark if the registrant is a well-known  seasoned  issuer,
as defined in Rule 405 of the Securities Act. Yes [ ] No [X]

     Indicate by check mark if the  registrant  is not  required to file reports
pursuant to Section 13 or Section 15(d) of the Act. Yes [ ] No [X]

     Indicate  by check mark  whether the  registrant  (1) has filed all reports
required to be filed by Section 13 or 15(d) of the  Securities  Exchange  Act of
1934  during  the  preceding  12 months  (or for such  shorter  period  that the
registrant was required to file such reports),  and (2) has been subject to such
filing requirements for the past 90 days. Yes [X] No [ ]

     Indicate by check mark if disclosure of delinquent  filers pursuant to Item
405 of Regulation S-K (ss.229.405 of this chapter) is not contained herein,  and
will not be contained,  to the best of the registrant's knowledge, in definitive
proxy or information  statements  incorporated  by reference in Part III of this
Form 10-K or any amendment to this Form 10-K. [X]

     Indicate by check mark whether the registrant is a large accelerated filer,
an accelerated filer, or a non-accelerated filer. See definition of "accelerated
filer and large  accelerated  filer" in Rule 12b-2 of the Exchange  Act.  (Check
one): Large accelerated  filer [ ] Accelerated  filer [ ] Non-accelerated  filer
[X]

     Indicate  by check mark  whether  the  registrant  is a shell  company  (as
defined in Rule 12b-2 of the Act). Yes [ ] No [X]

     The aggregate  market value of the voting stock held by  non-affiliates  of
the  registrant,  based on the closing sale price of the Ordinary Shares on June
30, 2006 as reported on the London  Stock  Exchange  (using an exchange  rate of
(pound)1.00  = $1.85)  was  $3,853,808.  Ordinary  Shares  held by each  current
executive officer and director and by each person who is known by the registrant
to own 10% or more of the  outstanding  Ordinary  Shares have been excluded

<PAGE>

from this computation in that such persons may be deemed to be affiliates of the
registrant.  This determination is not necessarily conclusive that these persons
are affiliates of the registrant.

     As of March 23, 2007, the registrant had  outstanding  64,439,073  Ordinary
Shares, $0.05 par value per share.


                       DOCUMENTS INCORPORATED BY REFERENCE

     The registrant's  definitive proxy statement for its Annual General Meeting
of  Shareholders  to be held on September 18, 2007, is incorporated by reference
in Part III of this Form 10-K.



<PAGE>



                                TABLE OF CONTENTS

<TABLE>
<CAPTION>
                                    PART I                                                                    Page

<S>                                                                                                            <C>
Item 1.    Business.........................................................................................    1
Item 1A.   Risk Factors.....................................................................................    4
Item 1B.   Unresolved Staff Comments........................................................................    5
Item 2.    Properties.......................................................................................    5
Item 3.    Legal Proceedings................................................................................    5
Item 4.    Submission of Matters to a Vote of Security Holders..............................................    5


                                     PART II

Item 5.    Market for Registrant's Common Equity, Related Stockholder Matters and Issuer Purchases
               of Equity Securities.........................................................................    5
Item 6.    Selected Financial Data..........................................................................   10
Item 7.    Management's Discussion and Analysis of Financial Condition and Results of Operations............   11
Item 7A.   Quantitative and Qualitative Disclosures About Market Risk.......................................   20
Item 8.    Financial Statements and Supplementary Data......................................................   21
Item 9.    Changes in and Disagreements with Accountants on Accounting and Financial Disclosure.............   56
Item 9A.   Controls and Procedures..........................................................................   56


                                    PART III

Item 10.   Directors and Executive Officers of the Registrant...............................................   56
Item 11.   Executive Compensation...........................................................................   57
Item 12.   Security Ownership of Certain Beneficial Owners and Management and Related
               Stockholder Matters..........................................................................   57
Item 13.   Certain Relationships and Related Transactions...................................................   57
Item 14.   Principal Accountant Fees and Services...........................................................   57


                                     PART IV

Item 15.   Exhibits and Financial Statement Schedules ......................................................   58


Signatures .................................................................................................   68
Exhibit Index...............................................................................................   69

</TABLE>
<PAGE>











     As used herein,  the terms  "registrant,"  "Company,"  "we," "us" and "our"
refer to Berkeley Technology Limited.  Except as the context otherwise requires,
the term "Group" refers collectively to the registrant and its subsidiaries.

Forward-Looking Statements and Factors That May Affect Future Results

     Statements  contained  in this  Annual  Report  on Form  10-K  that are not
historical  facts,  including,  but not limited to,  statements  found in Item 1
"Business," Item 7 "Management's  Discussion and Analysis of Financial Condition
and Results of Operations" and Item 7A "Quantitative and Qualitative Disclosures
About Market Risk," are forward-looking statements within the meaning of Section
21E of the  Securities  Exchange Act of 1934, as amended (the  "Exchange  Act").
Such forward-looking  statements are based on current  expectations,  estimates,
forecasts and projections about the industries in which we operate, management's
current  beliefs and  assumptions  made by management.  Words such as "expects,"
"anticipates,"  "intends," "plans," "believes," "seeks,"  "estimates,"  "goals,"
variations of such words and similar  expressions  are intended to identify such
forward-looking  statements.  These  statements  are not  guarantees  of  future
performance and involve certain risks,  uncertainties  and assumptions  that are
difficult to predict.  Future  outcomes and results may differ  materially  from
what is expressed or forecasted in such forward-looking statements. We undertake
no obligation to update any forward-looking  statements,  whether as a result of
new information, future developments or otherwise.

                                     PART I

Item 1.    BUSINESS

OVERVIEW

     We are a financial services company based in Jersey,  Channel Islands, with
an office in San  Francisco,  specializing  in venture  capital  and  consulting
primarily in the  telecommunications  industry.  We represent Silicon Valley and
other  telecommunications  equipment  companies in dealing with large  incumbent
European and Japanese telecommunications companies.

     The  impact of poor  equity  and bond  market  conditions  in 2001 and 2002
resulted in a significant  contraction  of our  operations  and capital base. We
continue  to service  the  policyholders  of London  Pacific  Assurance  Limited
("LPAL") in Jersey, but new policies have not been sold since July 2002 to avoid
the  capital  requirements  related  to the sale of new  policies.  All but $0.1
million in policyholder liabilities are scheduled to mature by mid-2007.

     The  Company was  incorporated  in 1985 in Jersey,  Channel  Islands and is
listed on the London Stock Exchange ("LSE"). Our Ordinary Shares currently trade
under the symbol "BEK.L." American Depositary Receipts ("ADRs") representing our
Ordinary  Shares began trading in the U.S.  market in 1992.  Our ADRs  currently
trade  on  the   Over-the-Counter   ("OTC")  Bulletin  Board  under  the  symbol
"BKLYY.PK." Each ADR represents ten Ordinary Shares.

BUSINESS SEGMENTS

     We  currently  have two  business  segments  that we  operate  through  our
subsidiaries:  venture capital and consulting, and life insurance and annuities.
Our principal operating subsidiaries,  by business segment and location, are set
forth below:
<TABLE>
<CAPTION>
Principal Subsidiaries                           Business Segment                   Location
------------------------------------------       -------------------------          -------------------------
<S>                                              <C>                                <C>
Berkeley International Capital Corporation       Venture capital and consulting     San Francisco, California
Berkeley International Capital Limited           Venture capital and consulting     Guernsey, Channel Islands
London Pacific Assurance Limited                 Life insurance and annuities       Jersey, Channel Islands
</TABLE>

                                       1
<PAGE>

     See Item 7 "Management's Discussion and Analysis of Financial Condition and
Results of Operations - Results of  Operations by Business  Segment" and Note 17
to the  Consolidated  Financial  Statements  in Item 8 of this  Form  10-K for a
summary of our  financial  information  by  business  segment  and  geographical
location.

Venture Capital and Consulting

     Berkeley   International   Capital   Corporation   ("BICC")   and  Berkeley
International   Capital  Limited  ("BICL")  comprise  our  venture  capital  and
consulting  business.   In  past  years,  our  venture  capital  and  consulting
subsidiaries  focused  primarily  on  U.S.  high  technology   companies,   with
investments generally ranging from $5 million to $25 million.

     After  the  impact  of  equity  and  bond  losses  in 2001  and 2002 on our
operations  and  capital  base,  we have not made any  further  venture  capital
investments.  Our current  venture  capital  strategy is focused on  identifying
opportunities  where we can assist  private  technology  companies to grow their
business and in locating  investment  capital.  Our  consulting  activities  are
continuing to grow as we add new clients who engage us to assist them with their
European and Asian business strategies.

Berkeley International Capital Corporation

     BICC is primarily responsible for our activities in the venture capital and
consulting  areas.   Currently,   this  involves  working  with  North  American
technology  companies  that are  looking to grow their  businesses  or to expand
their  investor  base  overseas,  primarily  in Europe and  Japan.  We advise on
overseas  operations and assist in locating  partners,  customers and investment
capital.

     Typically,  BICC seeks a retainer  (monthly  or  upfront  depending  on the
nature of the assignment) from its North American technology company clients for
its consulting  work, and a "success fee" upon the successful  conclusion of its
assignment.  The consulting work may involve  assistance in the preparation of a
business  plan;  market  research;   strategy  development;   identification  of
customers  and/or investor  prospects;  introductory  meetings with  prospective
customers or  investors;  and  assistance  in the  implementation  of the chosen
strategy or transaction.

     As  an  example  of  its  work,  BICC  was  engaged  by  a  North  American
telecommunications   equipment  company  to  develop  a  business  strategy  for
penetration  of the European  and Japanese  markets.  This  engagement  involved
detailed market and prospect  research and meetings with potential  clients that
may lead to  substantial  business for the client  company.  Another  example of
BICC's work is an  engagement  involving  the  preparation  of a business  plan,
reviewing  financing  structures and  introducing  investors who could finance a
European sales and customer  support  initiative  for a U.S.  telecommunications
equipment company.

     BICC has a long history and experience in both the U.S. technology industry
and the overseas  investment  and business  markets.  It is well  positioned  to
benefit from the globalization  forces that are at work in the industry and that
are challenging so many young technology companies. It can also provide overseas
investors  and  businesses  with the  access  they  desire  to U.S.  businesses,
technologies and potential sources of funding.

     Over the past 27 years,  BICC  arranged  over $1.9 billion of placements in
the private capital markets.  Placements were typically  arranged in later stage
technology companies,  which were near alpha test of their product and needed to
scale up their  engineering,  marketing  and sales  infrastructure.  Within this
strategy,  BICC  has been  able to  identify  many  promising  young  technology
companies  that  have  grown  in  prominence  in  their  fields  and  gone on to
successful public offerings or acquisition  transactions.  Many of the companies
are  headquartered  in close proximity to BICC's offices which allows for easier
access to the  companies'  management.  Most of these  companies  specialize  in
telecommunications   (both   central   office  and  customer   premises),   data
communications,   software,   semiconductors  and  knowledge   learning.   These
placements  included  investments  in 3Com,  Acuson,  Adaptec,  Altera,  America
Online,  Atmel,  Cadence Design Systems,  Cirrus Logic,  Cypress  Semiconductor,
Flextronics,  IDT, Linear Technology, LSI Logic, Nellcor, Oracle, PMC Sierra and
Packeteer, Inc.

                                       2
<PAGE>

     Of the private  technology  investments  arranged by BICC, one  investment,
Alacritech, Inc., is currently held by LPAL.

Berkeley International Capital Limited

     BICL,  formed in 1988 and based in Guernsey,  Channel  Islands,  previously
held principal positions in connection with private equity transactions arranged
by its sister  company,  BICC.  Some of these private  equity  positions  became
listed equity securities  pursuant to IPOs or in connection with the acquisition
of the private  issuing  company by a listed  company.  As of December 31, 2003,
BICL held $3.4 million of such  positions in listed  equity  securities.  During
2004, BICL sold all of its listed equity securities.

Competition

     Our venture  capital and consulting  business faces  competition  primarily
from  commercial  banks,  investment  banks,  venture  capital firms,  insurance
companies,  hedge funds and consulting firms,  many of which have  substantially
greater financial resources.  The marketplace for venture capital and consulting
is highly  competitive,  and demand for services is also  influenced by economic
and stock market conditions.

Life Insurance and Annuities

     Formed in 1999, our Jersey, Channel Islands insurance subsidiary, LPAL, has
principally  been  engaged  in  marketing  and  servicing   investment  oriented
insurance products.  LPAL sold Sterling,  U.S. dollar and Euro guaranteed return
bonds in its home market of Jersey,  Channel Islands, and in the U.K., Guernsey,
Isle of Man and other  permitted  jurisdictions.  The  products  guarantee  both
capital and yield for the duration of the investment period, which are typically
three or five years.  From LPAL's start of  operations  in the first  quarter of
2000  through the end of June 2002,  LPAL  generated  premiums  totaling  $135.0
million.  LPAL  generated  sales  directly to the public and  through  financial
intermediaries in the Channel Islands, U.K., Isle of Man and other international
locations.

     On July 2, 2002,  we  announced  that LPAL would  discontinue  writing  new
policies  effective  immediately.  The decision to  discontinue  the issuance of
policies  was  made to avoid  the  increased  capital  requirements  created  by
additional  policyholder  liabilities.  Subsequent  to this  announcement,  LPAL
policy surrenders increased substantially. The number of policyholders fell from
2,603 at June 30, 2002 to 925 at December 31, 2002. The primary financial impact
of the high  level of  surrenders  was the  reduction  in the  level of  capital
required to support the  policyholder  liabilities.  The number of policyholders
continued to decline to 75 at December 31,  2006;  however,  much of the decline
during 2003  through  2006 was  attributable  to policy  maturities  rather than
policy surrenders.

     We have no plans currently for LPAL to write new policies.

     LPAL's strategy for its investment portfolio has been to at least match the
level of policyholder liabilities with corporate bonds and cash. At December 31,
2006,  policyholder  liabilities  totaled  $3.6  million and the market value of
LPAL's  corporate bonds,  cash and accrued  interest  totaled $13.6 million.  In
addition,  LPAL's portfolio  included private equities valued at $0.8 million at
December 31, 2006.

REGULATION

London Pacific Assurance Limited

     LPAL is regulated by the Jersey  Financial  Services  Commission  ("JFSC").
Under Article 6 of the Insurance  Business  (Jersey) Law 1996, LPAL is permitted
to conduct  long-term  insurance  business.  LPAL is required  to submit  annual
audited financial  statements  (prepared under United States generally  accepted
accounting principles as permitted by regulation),  and an audited annual filing
to the  JFSC in the  format  consistent  with  that  required  by the  Financial
Services  Authority in the United Kingdom.  The annual filing  submitted by LPAL
must be  accompanied by a Certificate  from the Appointed  Actuary that based on
sufficiently



                                       3
<PAGE>

prudent assumptions,  assets are sufficient to cover all liabilities. The annual
filing  contains  a  report  from  the  Appointed  Actuary  on the  matching  of
investments to liabilities.

     The JFSC sets out the conditions with which LPAL must comply and determines
the reporting  requirements  and the frequency of  reporting.  These  conditions
require that: (i) LPAL must hold, at all times,  approved  assets at least equal
to the long-term  insurance fund plus the required minimum solvency margin, (ii)
the margin of solvency must be the greater of (pound)50,000 or 2.5% of the value
of the long-term  business  fund, and (iii) assets equal to not less than 90% of
liabilities must be placed with approved independent custodians.  As of December
31, 2006, LPAL met all of these conditions.

     LPAL is also required under the insurance  laws to appoint an actuary.  The
actuary must be qualified as defined under the laws and is required to supervise
the long-term insurance fund. No transfers,  except in satisfaction of long-term
insurance  business  liabilities,  including  dividends,  are permitted from the
long-term  insurance  fund  without  written  consent from the actuary and prior
approval from the JFSC.

Group

     Our Chief  Financial  Officer and  in-house  attorney are  responsible  for
managing our subsidiaries'  compliance with applicable regulatory  requirements.
Although  the  scope  of  regulation  and  form  of  supervision  to  which  our
subsidiaries  are subject,  as described  above,  may vary from  jurisdiction to
jurisdiction,  the  applicable  laws  and  regulations  often  are  complex  and
generally  grant  broad  discretion  to  supervisory   authorities  in  adopting
regulations  and supervising  regulated  activities.  Our continuing  ability to
engage in businesses in the  jurisdictions in which our  subsidiaries  currently
operate is dependent upon compliance with the rules and regulations  promulgated
from time to time by the appropriate authorities in each of these jurisdictions.
The burden of such  regulation  weighs  equally upon all  companies  carrying on
activities  similar to those of our  subsidiaries,  and we do not consider  such
regulations to adversely affect the competitive position of our subsidiaries.

EMPLOYEES

     As of December 31,  2006,  we had 9  employees.  The  breakdown by business
segment is as follows:  venture  capital and  consulting,  4; life insurance and
annuities, 2; and corporate, 3.

     None of our employees are covered by a collective  bargaining agreement and
we have not experienced any work stoppages.


Item 1A.     RISK FACTORS

Ability to Rebuild Our Venture Capital and Consulting Business

     There is a risk that we will not be able to rebuild our venture capital and
consulting business  significantly over the next two to three years. The venture
capital and consulting market is highly  competitive with  significantly  larger
participants,  and thus there is no assurance  that we will be successful in our
strategy.

Lack of Profitable Operations in Recent Years

     There is a risk that we will not be able to return to profitability after a
period of operating losses in recent years. We are earning  consulting  revenues
and  investment  income,  and we  have  reduced  operating  costs  considerably.
However, operating losses in future periods will continue to erode our available
capital base.

Lack of Liquidity for Our Shares and ADRs

     The Company's ADRs are not traded on a major stock  exchange.  Our ADRs can
be bought or sold on the OTC Bulletin Board, but liquidity is extremely limited.
Our Ordinary  Shares are listed on the London Stock

                                       4
<PAGE>


Exchange, but liquidity is also limited. Due to this lack of liquidity, there is
a risk that our shares or ADRs cannot be sold  without an adverse  affect on the
price.


Item 1B.     UNRESOLVED STAFF COMMENTS

     None.


Item 2.    PROPERTIES

     We currently  operate from two offices located in Jersey (Channel  Islands)
and San Francisco, California,  consisting of approximately 400 and 3,800 square
feet, respectively. We lease both offices. These leases expire in September 2010
and  October  2008,  respectively.  Our life  insurance  and  annuities  segment
operations, as well as our head office corporate activities,  are carried out in
the Jersey office. Our venture capital and consulting operations, as well as our
U.S.  corporate  activities,  are carried out in the San Francisco  office.  The
Jersey office, at approximately 3,000 square feet, was too large for our current
level of business and  staffing,  and  therefore in June 2006, we entered into a
sublease  agreement  for the  remaining  term of our lease for the entire office
space except for approximately 400 square feet through July 2007.

     See Note 11 to the Consolidated Financial Statements in Item 8 of this Form
10-K for further information regarding our leases.


Item 3.    LEGAL PROCEEDINGS

     There are no legal proceedings pending against the Group.


Item 4.    SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS

     No matters were  submitted  to our  shareholders  during the quarter  ended
December 31, 2006.


                                     PART II

Item 5.    MARKET FOR REGISTRANT'S COMMON EQUITY, RELATED STOCKHOLDER MATTERS
           AND ISSUER PURCHASES OF EQUITY SECURITIES

MARKET INFORMATION

     The principal  trading market for our Ordinary Shares is the LSE, under the
symbol "BEK.L," on which such shares have been listed since February 1985. ADSs,
each representing ten Ordinary Shares,  are evidenced by ADRs for which The Bank
of New York is the  Depositary.  Our ADSs have traded in the United  States from
September  1992 through  August 1993 on the OTC Bulletin  Board,  from September
1993 through November 1999 on The Nasdaq Stock MarketSM under the symbol "LPGL,"
from November 1999 through July 3, 2002 on the New York Stock Exchange  ("NYSE")
under the symbol  "LDP,"  from July 12,  2002  through  June 15, 2003 on the OTC
Bulletin  Board under the symbol  "LDPGY.PK"  and since June 16, 2003 on the OTC
Bulletin Board under the symbol  "BKLYY.PK." As of December 31, 2006, there were
64,439,073  Ordinary  Shares  outstanding of which  12,901,640,  or 20.0%,  were
represented  by 1,290,164  ADSs.  ADS holders may exercise  their voting  rights
through the ADR Depositary.

     In June 2002, we completed a one-for-ten reverse split of our ADSs. On June
24,  2002,  every ten of our ADSs  issued and  outstanding  were  converted  and
reclassified into one post-split ADS.  Consequently,  effective from the opening
of  business  on June  24,  2002,  each ADS is  equal  to ten  Ordinary  Shares.


                                       5
<PAGE>



Fractional new ADSs were sold by the Depositary Bank and paid in cash to the ADR
holders. This ADS split did not affect our Ordinary Shares listed on the LSE.

     On July 9, 2002,  trading of our ADRs was suspended and the securities were
withdrawn from listing and registration on the NYSE due to a fall in price below
the minimum  permitted by the NYSE. As a result of the delisting,  the liquidity
of our common stock and its price were  adversely  affected.  These  actions may
limit our ability to raise  additional  capital in the  future,  and there is no
assurance  that a significant  trading  market for the ADRs will develop.  If an
active trading market does not develop,  ADR holders may be unable to sell their
ADRs.

     Subsequent to the delisting,  the ability of ADR holders to buy and sell is
limited to trading on the OTC Bulletin  Board.  Shares  traded on the OTC market
generally  experience  lower  trading  volume than those traded on the organized
exchanges.  The trading volume of the ADRs has decreased substantially since the
NYSE delisting and the transfer of the ADRs to the OTC Bulletin Board.

     The following table shows, for the quarters indicated, the reported highest
and lowest middle market quotations (which represent an average of bid and asked
prices) for our Ordinary  Shares on the LSE,  based on its Daily  Official List,
and the high and low trade price  information  of the ADSs as obtained  from the
OTC Bulletin Board:
<TABLE>
<CAPTION>

                                                                         LSE                    OTC Bulletin Board
                                                                     Pounds Per                    U.S. Dollars
                                                                   Ordinary Share                     Per ADS
                                                               ---------------------         ----------------------
                                                                 High          Low              High          Low
                                                               --------     --------         --------      --------
2005:
<S>                                                                <C>          <C>              <C>           <C>
First quarter.................................................     0.11         0.09             1.95          1.50
Second quarter................................................     0.10         0.08             1.65          1.40
Third quarter.................................................     0.10         0.07             1.50          1.20
Fourth quarter................................................     0.09         0.06             1.25          0.70

2006:
First quarter.................................................     0.07         0.06             1.10          0.70
Second quarter................................................     0.07         0.06             1.20          0.85
Third quarter.................................................     0.07         0.06             1.06          0.90
Fourth quarter................................................     0.07         0.04             1.14          0.55
</TABLE>

Holders

     As of February 28, 2007, we had approximately  1,336 Ordinary  shareholders
of record and 67 ADS holders of record.  Because many  Ordinary  Shares and ADSs
are held by brokers and various  institutions on behalf of other holders, we are
unable to estimate the total number of beneficial  holders  represented by these
holders of record.

Dividends

     Until 2002, we paid dividends on our Ordinary Shares in every year since we
became  listed on the LSE in 1985.  Dividends on our  Ordinary  Shares were paid
twice a year. In view of our  requirement  to conserve cash in order to meet the
operating  needs and growth  opportunities  of the  business,  we did not pay an
interim or final dividend for 2005 or an interim dividend for 2006. Our Board of
Directors will not be recommending a final dividend for the year 2006.

     Holders of ADSs are  entitled  to receive  dividends  paid,  if any, on our
Ordinary Shares through the ADR Depositary.

     Under  current  practice,  holders of ADSs who are  residents of the United
States for tax purposes  receive the net dividend  (the gross  dividend less the
associated Jersey income tax). See "Taxation - Taxation of Dividends" below.

                                       6
<PAGE>



     Currently,  Jersey  does  not have  exchange  control  restrictions  on the
payment of  dividends  on the  Ordinary  Shares or on the conduct of the Group's
operations.  See Note 8 to the  Consolidated  Financial  Statements in Item 8 of
this Form 10-K for details regarding regulatory restrictions on dividends.

TAXATION

     The following summary of certain Jersey and U.S. tax consequences regarding
share ownership is based on law and published  practice as of February 28, 2007,
and is subject to any changes in Jersey and U.S. law or published practice or in
the establishment of any double taxation  convention between Jersey and the U.S.
occurring after that date. The summary is not a complete  analysis or listing of
all the possible tax  consequences and does not address the tax implications for
special classes of holders,  such as banks,  insurance  companies and dealers in
securities.   The  summary  also  does  not  address   U.S.   state  income  tax
consequences.  Owners of Ordinary  Shares and ADSs should  consult their own tax
advisors as to the tax consequences of such ownership.

     There is no double tax treaty or similar  convention  between the U.S.  and
Jersey.  For the purposes of the U.S. Internal Revenue Code of 1986, as amended,
it is assumed that  beneficial  owners of ADSs, in accordance  with the terms of
the Deposit Agreement,  will be treated as the owners of the underlying Ordinary
Shares represented by the ADSs.

Taxation of Dividends

     Dividends are declared gross in U.S. dollars. Dividends paid by the Company
are treated as having suffered Jersey income tax at the standard rate (currently
20%) on the gross amount thereof.

     Charities,  superannuation  funds and certain  assurance  companies  in the
U.K., together with individual  investors who are not resident in Jersey, may be
entitled to a full or partial repayment of the Jersey income tax credit suffered
on distributions,  on submission of a claim to the Jersey  Comptroller of Income
Tax.  Shareholders who are unsure of their tax position should consult their tax
advisor.

     Generally,  the  net  dividend  paid to a  holder  or  owner  who is a U.S.
citizen, a U.S. resident, a U.S. domestic corporation or a trust or estate whose
income is subject to U.S. federal income taxation  regardless of source (a "U.S.
holder") will be included in gross income and treated as foreign source dividend
income for U.S. federal income tax purposes to the extent payment is made out of
the Company's  current or accumulated  earnings and profits as determined  under
U.S.  federal  income  tax  principles.  Such  dividends  generally  will not be
eligible for the "dividends  received"  deduction  permitted to be taken by U.S.
corporations.

     However,  special  rules apply for  purposes of  determining  the  dividend
income and potential  foreign tax credits  available to a U.S.  corporation that
controls 10% or more of the Company's voting stock. Any such shareholder  should
consult its tax advisor with respect to the U.S. interest in the Company.

Taxation of Capital Gains

     Currently, there are no Jersey taxes levied on capital gains. A U.S. holder
that sells or exchanges an ADR or Ordinary Share will generally recognize a gain
or loss  for  U.S.  federal  income  tax  purposes,  in an  amount  equal to the
difference  between the amount realized and the holder's tax basis in either the
ADS  represented  by the ADR or the  Ordinary  Share.  Such a gain or loss  will
generally  be a  capital  gain or loss if the ADR or the  Ordinary  Share  was a
capital asset in the hands of the U.S.  holder and will generally be a long-term
capital  gain or loss if the ADR or  Ordinary  Share  was held for more than one
year  (including,  in the case of an ADR,  the period  during which the Ordinary
Shares surrendered in exchange  therefore were held). In general,  the long-term
capital gain of a non-corporate  U.S. holder is subject to a maximum tax rate of
20% if the ADRs or Ordinary  Shares were sold before May 6, 2003.  Under certain
conditions,  an 18%  capital  gains tax rate is  available  if the holder made a
certain  election for shares held on December 31, 2000.  If the ADRs or Ordinary
Shares were sold after May 5, 2003, the maximum tax rate is 15%.


                                       7
<PAGE>


Backup Withholding Tax

     A U.S. holder may be subject to U.S. backup withholding tax (currently at a
rate of 30%) with respect to dividends  received or gross proceeds from the sale
of ADRs or Ordinary Shares unless the holder provides a taxpayer  identification
number and certain  certifications  or otherwise  establishes  an exemption from
backup withholding. Certain classes of persons, such as corporations, are exempt
from backup withholding. Backup withholding is not an additional tax; the amount
withheld may be credited against the holder's U.S. federal income tax liability,
and a refund  of any  excess  may be  obtained  from the U.S.  Internal  Revenue
Service.

Estate and Gift Tax

     No death, estate, gift, inheritance or capital transfer taxes are levied in
Jersey.

Stamp Duty and Stamp Duty Reserve Tax

     No U.K. stamp duty should be payable on any transfer of an Ordinary  Share,
or of an ADS, provided it is executed and retained outside the U.K. Therefore, a
transfer of an ADS in the United States would not ordinarily give rise to a U.K.
stamp duty charge.

     An instrument  transferring Ordinary Shares, or an ADS, could be subject to
U.K.  stamp duty if its execution  relates to anything done or to be done in the
U.K. For example,  a U.K. stamp duty may apply if such instrument is executed in
the U.K. or is brought into the U.K.  after  execution.  If the transfer is on a
sale then the rate of stamp duty will be 0.5% of the  consideration  given. This
charge is rounded up to the nearest  (pound)5.  Gifts and other  transfers which
are neither sales,  nor made in contemplation of a sale, are not subject to this
charge.  Instead,  they will  either be exempt  or  subject  to a fixed  duty of
(pound)5 per transfer.

     A transfer from the Depositary to an ADS holder of the underlying  Ordinary
Shares may be subject to a fixed  stamp duty of (pound)5  if the  instrument  of
transfer relates to anything done or to be done in the U.K. For example, a fixed
stamp duty of (pound)5 may apply if such  transfer is executed in the U.K. or is
to be brought into the U.K. after execution.  A transfer of Ordinary Shares from
the Depositary directly to a purchaser on behalf of an ADS holder may be subject
to a  stamp  duty at a rate of  0.5%  of the  consideration  (rounded  up to the
nearest (pound)5) if execution of the instrument of transfer relates to anything
done or to be done in the U.K.; for example, if such transfer is executed in the
U.K. or is to be brought into the U.K. after execution.

     U.K.  stamp duty reserve tax may not be payable on an agreement to transfer
the Ordinary Shares or ADSs.

EQUITY COMPENSATION PLANS

     Information regarding our equity compensation plans is presented in Item 12
of this Form 10-K.

WARRANTS

     On November 11, 2002,  we agreed to grant  1,933,172  warrants to subscribe
for our Ordinary  Shares to Bank of Scotland in connection with the extension of
our credit  facility  (which was fully repaid and terminated in June 2003).  The
warrants  were  granted  on  February  14,  2003 and have an  exercise  price of
(pound)0.1143 (based on the average of the closing prices of the Ordinary Shares
over the trading days from November 1, 2002 through  November 11,  2002),  which
was higher than the market price of  (pound)0.09  on November  11,  2002.  These
warrants are exercisable at any time prior to February 14, 2010.

                                       8
<PAGE>

SHARE PERFORMANCE GRAPH

     The graph  presented  below  compares  the yearly  change in the  Company's
cumulative total return on ADRs for the five years ended December 31, 2006, with
the cumulative  total returns of the S&P 500 Index and the S&P Insurance  Index.
The  comparison  assumes  $100 was  invested on December 31, 2001 in each of the
Company ADRs, the stocks included in the S&P 500 Index,  and the stocks included
in the S&P Insurance Index. It also assumes reinvestment of all dividends.

     This performance  graph shall not be deemed "filed" for purposes of Section
18 of the Securities  Exchange Act of 1934, as amended,  or otherwise subject to
the liabilities  under that Section,  and shall not be deemed to be incorporated
by reference into any filing of Berkeley  Technology Limited with the Securities
and Exchange Commission ("SEC").

                 Comparison of Five-Year Cumulative Total Return



[GRAPH]


<TABLE>
<CAPTION>





                                    ------------ ----------- ----------- ----------- ----------- -----------
                                        2001        2002        2003        2004        2005        2006
----------------------------------- ------------ ----------- ----------- ----------- ----------- -----------
<S>                                  <C>          <C>         <C>         <C>         <C>         <C>
Berkeley Technology Limited          $   100.00   $    1.26   $    6.31   $    4.29   $    1.77   $    1.26
----------------------------------- ------------ ----------- ----------- ----------- ----------- -----------
S&P 500 Index                        $   100.00   $   76.63   $   96.85   $  105.56   $  108.73   $  123.54
----------------------------------- ------------ ----------- ----------- ----------- ----------- -----------
S&P Insurance Index                  $   100.00   $   78.43   $   93.64   $   99.18   $  111.63   $  122.09
----------------------------------- ------------ ----------- ----------- ----------- ----------- -----------
</TABLE>





                                       9
<PAGE>



Item 6.    SELECTED FINANCIAL DATA

     The following is a summary of selected  financial data for the Group.  This
data  should be read in  conjunction  with the  audited  consolidated  financial
statements, and the notes thereto, presented in Item 8 "Financial Statements and
Supplementary Data" of this Form 10-K.

<TABLE>
<CAPTION>
                                                                         Years Ended/As of December 31,
                                                             ---------------------------------------------------------------
                                                                2006         2005         2004         2003        2002 (2)
                                                             -----------  -----------  -----------  -----------  -----------
                                                                      (In thousands, except per share and ADS data)
Operating Results
<S>                                                          <C>          <C>          <C>          <C>          <C>
Revenues from continuing operations, including net realized
   and change in net unrealized investment gains and losses  $     1,943  $     2,093  $    (5,759) $     9,198  $   (33,337)
Income (loss) from continuing operations before income
   taxes................................................          (2,678)      (3,235)     (11,851)       1,047      (54,478)
Income tax expense (benefit) on continuing operations...               5           12          290          (42)       1,291
Income (loss) from continuing operations................          (2,683)      (3,247)     (12,141)       1,005      (55,769)
Income (loss) from discontinued operations..............          (1,000)           -            -        9,965     (154,678)
Income tax expense (benefit) on discontinued operations.               -            -            -           38       (4,943)
Net income (loss).......................................          (3,683)      (3,247)     (12,141)      11,016     (205,504)
Basic earnings (loss) per share:
   Continuing operations................................           (0.05)       (0.06)       (0.24)        0.02        (1.10)
   Discontinued operations..............................           (0.02)           -            -         0.20        (2.95)
                                                             -----------  -----------  -----------  -----------  -----------
Total basic earnings (loss) per share...................           (0.07)       (0.06)       (0.24)        0.22        (4.05)
Diluted earnings (loss) per share:
   Continuing operations................................           (0.05)       (0.06)       (0.24)        0.02        (1.10)
   Discontinued operations..............................           (0.02)           -            -         0.20        (2.95)
                                                             -----------  -----------  -----------  -----------  -----------
Total diluted earnings (loss) per share.................           (0.07)       (0.06)       (0.24)        0.22        (4.05)
Basic earnings (loss) per ADS:
   Continuing operations................................           (0.53)       (0.64)       (2.39)        0.21       (10.99)
   Discontinued operations..............................           (0.20)           -            -         1.96       (29.50)
                                                             -----------  -----------  -----------  -----------  -----------
Total basic earnings (loss) per ADS.....................           (0.73)       (0.64)       (2.39)        2.17       (40.49)
Diluted earnings (loss) per ADS:
   Continuing operations................................           (0.53)       (0.64)       (2.39)        0.21       (10.99)
   Discontinued operations..............................           (0.20)           -            -         1.94       (29.50)
                                                             -----------  -----------  -----------  -----------  -----------
Total diluted earnings (loss) per ADS...................           (0.73)       (0.64)       (2.39)        2.15       (40.49)

Financial Position
Cash and total investments (continuing operations)......          19,567       32,840       43,279       61,944       69,378
Total assets............................................          20,237       33,803       44,707       63,513       80,217
Bank debt...............................................               -            -            -            -        9,314
Guarantees under bank facility..........................               -            -            -            -       10,590
Shareholders' equity....................................          15,923       19,603       22,893       34,897       21,486
Book value per share (1)................................            0.31         0.39         0.45         0.69         0.42
Book value per ADS (1)..................................            3.13         3.85         4.51         6.88         4.23

Ordinary Share and ADS Data
Ordinary Shares outstanding as of December 31...........          64,439       64,439       64,439       64,439       64,439
Weighted-average shares used in:
   Basic earnings per share calculation.................          50,917       50,917       50,754       50,754       50,753
   Diluted earnings per share calculation...............          50,917       50,917       50,754       51,188       50,753
Total dividends per share/ADS relating to the year .....               -            -            -            -            -
Market price per share on December 31...................    (pound)0.053  (pound)0.06  (pound)0.11  (pound)0.14 (pound)0.055
Market price per ADS on December 31.....................     $      0.70  $      0.70  $      1.70  $      2.51  $      0.50
Market capitalization as of December 31.................     $     6,631  $     6,706  $    13,115  $    16,148  $     5,706
<FN>
(1) Based on the net asset value of the Group after deducting the cost of the shares held by the employee benefit trusts, and
    on the number of shares outstanding excluding the shares held by the employee benefit trusts.

(2) Reclassifications have been made related to discontinued operations. The Group's financial advisory services and asset
    management businesses were sold in 2003, and the Group's U.S. life insurance company was deconsolidated in 2002.
</FN>
</TABLE>

                                       10
<PAGE>

Item 7.    MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
           RESULTS OF OPERATIONS

     This  Management's  Discussion  and  Analysis of  Financial  Condition  and
Results  of  Operations   should  be  read  in  conjunction   with  the  audited
consolidated  financial statements,  and the notes thereto,  presented in Item 8
"Financial   Statements  and   Supplementary   Data"  of  this  Form  10-K.  The
consolidated  financial  statements are prepared in accordance  with  accounting
principles  generally  accepted in the United  States.  This item should also be
read in conjunction  with the  "Forward-Looking  Statements and Factors That May
Affect Future  Results"  which are set forth below and in our other filings with
the SEC.

Forward-Looking Statements and Factors That May Affect Future Results

     This  Management's  Discussion  and  Analysis of  Financial  Condition  and
Results  of   Operations   and  other   sections  of  this  Form  10-K   contain
forward-looking  statements  within the meaning of Section 21E of the Securities
Exchange Act of 1934, as amended.  Such forward-looking  statements are based on
current expectations,  estimates, forecasts and projections about the industries
in which we  operate,  management's  current  beliefs  and  assumptions  made by
management.   Words  such  as  "expects,"   "anticipates,"  "intends,"  "plans,"
"believes," "seeks,"  "estimates," "goals," variations of such words and similar
expressions  are intended to identify  such  forward-looking  statements.  These
statements are not guarantees of future  performance  and involve certain risks,
uncertainties and assumptions that are difficult to predict. Future outcomes and
results may differ  materially  from what is  expressed  or  forecasted  in such
forward-looking   statements.   We  undertake  no   obligation   to  update  any
forward-looking  statements,  whether  as a result  of new  information,  future
developments or otherwise.

     Factors   that  could  cause  or   contribute   to   deviations   from  the
forward-looking statements include those discussed in this section, elsewhere in
this Form 10-K and in our other filings with the SEC. The factors  include,  but
are not  limited  to,  (i) the  risks  described  in Item 7A  "Quantitative  and
Qualitative  Disclosures  About Market Risk," (ii)  variations in demand for our
products and services,  (iii) the success of our new products and services, (iv)
significant  changes  in  net  cash  flows  in or out  of  our  businesses,  (v)
fluctuations in the performance of debt and equity markets  worldwide,  (vi) the
enactment  of  adverse  state,  federal  or  foreign  regulation  or  changes in
government policy or regulation  (including  accounting standards) affecting our
operations,  (vii) the effect of economic  conditions  and interest rates in the
U.S., the U.K. or  internationally,  (viii) the ability of our  subsidiaries  to
compete in their respective  businesses,  (ix) our ability to attract and retain
key personnel,  and (x) actions by  governmental  authorities  that regulate our
businesses, including insurance commissions.



                                       11
<PAGE>



RESULTS OF OPERATIONS BY BUSINESS SEGMENT

     Income before income taxes for our reportable operating segments,  based on
management's internal reporting structure, is as follows:
<TABLE>
<CAPTION>
                                                                                             Years Ended December 31,
                                                                                       -------------------------------------
                                                                                           2006        2005         2004
                                                                                       -----------  -----------  -----------
                                                                                                  (In thousands)
Loss from continuing operations before income tax expense
  by operating segment:
<S>                                                                                    <C>          <C>          <C>
Venture capital and consulting ..............................................          $      (403) $      (584) $    (1,365)
Life insurance and annuities ................................................                 (221)        (701)      (8,091)
                                                                                       -----------  -----------  -----------
                                                                                              (624)      (1,285)      (9,456)
Reconciliation of segment amounts to consolidated amounts:
Interest and other fee income................................................                  283          366          125
Corporate expenses...........................................................               (2,336)      (2,312)      (2,415)
Interest expense.............................................................                   (1)          (4)        (105)
                                                                                       -----------  -----------  -----------
Consolidated loss from continuing operations before
  income tax expense.........................................................          $    (2,678) $    (3,235) $   (11,851)
                                                                                       -----------  -----------  -----------
                                                                                       -----------  -----------  -----------
</TABLE>

     Business  segment data contained in Note 17 to the  Consolidated  Financial
Statements in Item 8 of this Form 10-K should be read in  conjunction  with this
discussion.  A detailed  discussion of the results for each  reportable  segment
follows.

Venture Capital and Consulting

     Certain information  regarding our venture capital and consulting segment's
results of operations is as follows:
<TABLE>
<CAPTION>
                                                                                             Years Ended December 31,
                                                                                       -------------------------------------
                                                                                           2006        2005         2004
                                                                                       -----------  -----------  -----------
                                                                                                  (In thousands)
Revenues and net investment gains (losses):
<S>                                                                                    <C>          <C>          <C>
Consulting fees..............................................................          $       705  $       536  $       490
Net realized investment gains ...............................................                    -            -        2,010
Change in net unrealized investment gains and losses on
   trading securities........................................................                   18           (1)      (2,625)
                                                                                       -----------  -----------  -----------
Total revenues and net investment gains (losses).............................                  723          535         (125)

Operating expenses...........................................................                1,126        1,119        1,240
                                                                                       -----------  -----------  -----------
Loss from continuing operations before income tax expense....................          $      (403) $      (584) $    (1,365)
                                                                                       -----------  -----------  -----------
                                                                                       -----------  -----------  -----------
</TABLE>

2006 compared to 2005

     In 2006,  our venture  capital and  consulting  segment  contributed a loss
before  income  taxes  of $0.4  million  to our  overall  loss  from  continuing
operations before income taxes,  compared to a loss before taxes of $0.6 million
in 2005.  The  losses for both  years  were  attributable  to an excess of fixed
operating expenses over consulting fee income.

     Consulting  fees  earned by the  venture  capital  and  consulting  segment
increased from $536,000 in 2005 to $705,000 in 2006, as the number of consulting
clients increased during the year. BICC advises Silicon

                                       12
<PAGE>

Valley and other  telecommunications  equipment  companies in dealing with large
incumbent European and Japanese  telecommunications  companies.

     In prior  years,  this  segment's  results were  significantly  impacted by
fluctuations  in the market value of its portfolio of listed equity  securities.
As of the end of the third quarter of 2006,  all listed equity  investments  had
been sold, and our results will no longer be impact by equity market volatility.

2005 compared to 2004

     In 2005,  the venture  capital and  consulting  segment  contributed a loss
before  income  taxes  of $0.6  million  to our  overall  loss  from  continuing
operations before income taxes,  compared to a loss before taxes of $1.4 million
in 2004. The loss for 2005 was  attributable to an excess of operating  expenses
over consulting fee income.  The 2004 results were  attributable to net realized
and unrealized investment losses on listed equity securities of $0.6 million, in
addition to a $0.8 million  excess of operating  expenses  over  consulting  fee
income.

Life Insurance and Annuities

     Certain  information  regarding our life insurance and annuities  segment's
results of operations is as follows:
<TABLE>
<CAPTION>
                                                                                             Years Ended December 31,
                                                                                       -------------------------------------
                                                                                           2006        2005         2004
                                                                                       -----------  -----------  -----------
                                                                                                  (In thousands)
Revenues and net investment gains (losses):
<S>                                                                                    <C>          <C>          <C>
Investment income............................................................          $       937  $     1,213  $     1,295
Insurance policy charges.....................................................                    2            4            4
Net realized investment gains (losses).......................................                   (2)         (43)       1,273
Change in net unrealized investment gains and losses on
   trading securities........................................................                    -           18       (8,331)
                                                                                       -----------  -----------  -----------
Total revenues and net investment gains (losses).............................                  937        1,192       (5,759)

Expenses:
Amounts credited on insurance policyholder accounts..........................                  468          980        1,358
General and administrative expenses..........................................                  690          913          974
                                                                                       -----------  -----------  -----------
Total expenses...............................................................                1,158        1,893        2,332
                                                                                       -----------  -----------  -----------
Loss from continuing operations before income tax expense....................          $      (221) $      (701) $    (8,091)
                                                                                       -----------  -----------  -----------
                                                                                       -----------  -----------  -----------
</TABLE>

     As  previously  disclosed in our 2002  through 2005 Annual  Reports on Form
10-K,  on July 2, 2002,  we announced  that LPAL would  discontinue  writing new
policies effective immediately.  The decision to discontinue the issuance of new
policies  was  made to avoid  the  increased  capital  requirements  created  by
additional  policyholder  liabilities.  Subsequent  to this  announcement,  LPAL
policy surrenders  increased  substantially.  Approximately 98% of LPAL's $140.2
million in policyholder liabilities as of June 30, 2002 have been surrendered or
have matured as of December 31, 2006.  Policyholder  liabilities  as of December
31, 2006 were $3.6  million.  Almost all of the  surrenders  since June 30, 2002
occurred  in the  second  half of 2002;  most of the  decrease  in  policyholder
liabilities since the end of 2002 is attributable to policy maturities.

     LPAL  now  focuses  on  managing  the  remaining   block  of   policyholder
liabilities. There are no plans currently to write new policies.

                                       13
<PAGE>

2006 compared to 2005

     In 2006, LPAL contributed a loss before income taxes of $0.2 million to our
overall loss from continuing  operations before income taxes, compared to a loss
before income taxes of $0.7 million in 2005.

     The spread between  investment income and amounts credited to policyholders
increased  from $0.2 million in 2005 to $0.5 million in 2006,  primarily  due to
increased  returns  on  invested  assets  resulting  from  more  investments  in
corporate bonds instead of lower-yielding  cash  equivalents,  and an increasing
interest rate environment.  Interest and dividend income on investments  totaled
$0.9  million in 2006,  compared  with $1.2  million in 2005.  This $0.3 million
decrease was primarily due to the decline in the level of LPAL's  corporate bond
investments,  which was consistent with the decline in policyholder  liabilities
since December 31, 2005. Amounts credited on policyholder  accounts decreased by
$0.5 million in 2006 to $0.5  million,  compared to $1.0  million in 2005.  This
decrease was primarily due to policy  maturities  since  December 31, 2005.  The
average rate credited to policyholders  was 5.1% in 2006,  compared with 5.7% in
2005.

     Total invested  assets  decreased to $14.5 million as of December 31, 2006,
compared to $24.7 million as of December 31, 2005, primarily due to policyholder
benefits paid of $11.6 million.  On total average  invested  assets in 2006, the
average net return,  including both realized and unrealized investment gains and
losses, was 4.6%, compared with 4.2% in 2005.

     Policyholder liabilities as of December 31, 2006 were $3.6 million of which
$3.5  million is scheduled  to mature  during  2007.  LPAL expects to meet these
maturities  primarily  by using the cash balance as of December 31, 2006 of $4.4
million. In the absence of significant redemptions, policyholder liabilities are
projected to be approximately $0.1 million at the end of 2007.

     Included in general and  administrative  expenses for 2005 are $0.3 million
of employee  severance costs. In order to reduce operating costs and to conserve
cash,  and in  light of the  decrease  in the size of  LPAL's  operations,  LPAL
reduced  its staff in January  2005.  Excluding  the $0.3  million  of  employee
severance costs, general and administrative expenses for 2005 were $0.6 million,
compared  with $0.7 million for 2006.  This $0.1 million  increase was primarily
due to the partial  allocation  of corporate  insurance  expense to this segment
since the fourth quarter of 2005.

     Subsequent  to December 31,  2006,  LPAL  received a $1.2  million  payment
representing a partial  distribution  resulting from the settlements achieved in
the WorldCom,  Inc.  securities  litigation.  LPAL held certain  WorldCom,  Inc.
publicly  traded bonds which it sold at a loss in 2002. The $1.2 million payment
will be recognized in the first quarter of 2007 in our consolidated statement of
operations as a realized gain, which reverses part of the realized loss recorded
in  2002.  LPAL  expects  to  receive  an  additional  $0.4  million  as a final
distribution later in 2007.

2005 compared to 2004

     In 2005, LPAL contributed a loss before income taxes of $0.7 million to our
overall loss from continuing  operations before income taxes, compared to a loss
before income taxes of $8.1 million in 2004.

     The spread between  investment income and amounts credited to policyholders
increased from negative $63,000 in 2004 to positive $233,000 in 2005,  primarily
due to increased  returns on invested assets  resulting from more investments in
corporate bonds instead of lower-yielding  cash  equivalents,  and an increasing
interest rate environment.  Interest and dividend income on investments  totaled
$1.2  million in 2005,  compared  with $1.3  million in 2004.  This $0.1 million
decrease was primarily due to the decline in the level of LPAL's  corporate bond
investments,  which was consistent with the decline in policyholder  liabilities
since December 31, 2004. Amounts credited on policyholder  accounts decreased by
$0.4 million in 2005 to $1.0  million,  compared to $1.4  million in 2004.  This
decrease was primarily due to policy  maturities  since  December 31, 2004.  The
average rate credited to policyholders  was 5.7% in 2005,  compared with 5.6% in
2004.

     Net investment losses totaled $25,000 in 2005, compared with net investment
losses of $7.1 million in 2004.  During 2004,  LPAL held  significant  levels of
listed equity securities, causing LPAL's results to be

                                       14
<PAGE>

impacted by equity market volatility.  By the end of January 2005, LPAL sold all
of its listed  equity  securities  and as such,  LPAL's  equity  market risk was
reduced significantly.

     Total invested  assets  decreased to $24.7 million as of December 31, 2005,
compared to $33.1 million as of December 31, 2004, primarily due to policyholder
benefits paid of $6.7 million.  On total average  invested  assets in 2005,  the
average net return,  including both realized and unrealized investment gains and
losses, was 4.2%, compared with -15.3% in 2004.

     Included in general and  administrative  expenses for 2005 are $0.3 million
of employee  severance costs. In order to reduce operating costs and to conserve
cash,  and in  light of the  decrease  in the size of  LPAL's  operations,  LPAL
reduced  its staff in January  2005.  Excluding  the $0.3  million  of  employee
severance costs, general and administrative expenses for 2005 were $0.6 million,
compared  with $1.0 million for 2004.  This $0.4 million  decrease was primarily
due to lower staff costs.

Corporate and Other

2006 compared to 2005

     Corporate  expenses  remained  level  in 2006  compared  to  2005,  at $2.3
million. Lower corporate insurance costs (due to their partial allocation to the
life insurance and annuities segment from the fourth quarter of 2005) and a $0.1
million reduction in legal expenses associated with the legal proceedings (which
terminated  during  2006) as  described  in Note 4 "Cash  Held in Escrow" to the
Consolidated  Financial  Statements in Item 8 of this Form 10-K,  were offset by
$0.2 million of losses  associated  with the  sublease of our Jersey  office and
$58,000 of SFAS 123R compensation expense.

2005 compared to 2004

     Corporate  expenses  decreased by $0.1 million to $2.3 million in 2005,  as
compared to $2.4  million for 2004.  This  decrease was  primarily  due to lower
staff  costs,  facilities  expense,   professional  services  fees,  shareholder
reporting costs and corporate  insurance  costs,  which were partially offset by
legal fees associated with the legal proceedings  (which terminated during 2006)
described  in  Note 4  "Cash  Held  in  Escrow"  to the  Consolidated  Financial
Statements in Item 8 of this Form 10-K.

Consolidated Loss from Continuing Operations Before Income Taxes

2006 compared to 2005

     Our consolidated loss from continuing  operations before income tax expense
was $2.7 million in 2006, compared to a loss of $3.2 million in 2005. This lower
loss of $0.5 million was due  primarily  to a decline in  operating  expenses of
$0.2 million (primarily lower legal expenses as discussed above), an increase in
consulting  fee income of $0.2  million,  and an increase in the spread  between
investment income and amounts credited to policyholders of $0.15 million.

     Due to the sale of all of our listed equity  securities  (most were sold in
2004), our results are no longer impacted by equity market volatility.

     We continue  to pursue  opportunities  to grow the  business in the future,
however,  there is no guarantee that we will be successful in  redeveloping  our
venture capital and consulting operations.

2005 compared to 2004

     Our consolidated  loss from continuing  operations  before income taxes was
$3.2 million in 2005,  compared to a loss of $11.9 million in 2004.  This change
was  primarily  due to net realized  and  unrealized  investment  losses of only
$26,000 in 2005,  compared to net realized and unrealized  investment  losses of
$7.7 million in 2004.  During 2004, we held significant  levels of listed equity
securities  and  our  results  were  significantly  impacted  by  equity  market
volatility.

                                       15
<PAGE>

Income Taxes

     We are  subject  to  taxation  on our income in all  countries  in which we
operate based upon the taxable income arising in each country. However, realized
gains on certain  investments are exempt from Jersey and Guernsey  taxation.  We
are subject to income tax in Jersey at a rate of 20%. In the United  States,  we
are subject to both federal and  California  taxes at rates up to 34% and 8.84%,
respectively.

2006 compared to 2005 (continuing operations)

     The $5,000 tax expense  for 2006 is  comprised  of our  minimum  California
taxes.  Other than these taxes,  no other tax expense or benefits are applicable
to our Group for this period.  While losses were  contributed  by our Jersey and
Guernsey  operations,  we  did  not  recognize  any  tax  benefits  due  to  the
uncertainty   surrounding  their  recovery  before  expiry.   Losses  were  also
contributed by our U.S  subsidiaries  during 2006; we did not recognize any U.S.
tax benefits due to the 100% valuation  allowances that we have provided for all
deferred tax assets.

2005 compared to 2004 (continuing operations)

     The $12,000 tax expense  for 2005 is  comprised  of our minimum  California
taxes and other state  taxes.  Other than these  taxes,  no other tax expense or
benefits are applicable to our Group for this period. Losses were contributed by
our Jersey and Guernsey operations,  for which no tax benefits will be realized.
Losses were also  contributed  by our U.S  subsidiaries  during 2005; we did not
recognize  any U.S. tax benefits due to the 100%  valuation  allowances  that we
have provided for all deferred tax assets.

Discontinued Operations

     The $1.0 million loss on discontinued  operations recorded in 2006 resulted
from the  write-off of the $1.0 million of cash held in escrow which was part of
the proceeds from the sale of London Pacific  Advisors in June 2003 held back to
cover any of the Group's indemnity obligations. For further information see Note
4 "Cash Held in Escrow" to the  Consolidated  Financial  Statements in Item 8 of
this Form 10-K.

     While  the  $1.0  million  loss on  discontinued  operations  in  2006  was
attributable to one of our U.S  subsidiaries,  we did not recognize any U.S. tax
benefits  due to the 100%  valuation  allowances  that we have  provided for all
deferred tax assets.


CRITICAL ACCOUNTING POLICIES

     Management has identified those accounting policies that are most important
to the accurate  portrayal of our financial  condition and results of operations
and that require management's most complex or subjective  judgments,  often as a
result of the need to make  estimates  about  the  effect  of  matters  that are
inherently  uncertain.  These most critical  accounting  policies pertain to our
investments, life insurance policy liabilities and contingent liabilities. These
critical accounting policies are described below.

Determination of Fair Values of Investments

     When a quoted market price is available  for a security,  we use this price
in the  determination  of fair value.  If a quoted market price is not available
for a  security,  management  estimates  the  security's  fair  value  based  on
valuation methodologies as described below.

     We  hold  investments  in  privately  held  equity  securities,   primarily
convertible  preferred  stock in venture  capital  companies  doing  business in
various segments of technology  industries.  Venture capital  investing  entails
making  investments in companies  that are  developing  products or services for
large  emerging  markets  with the  belief  that  these  investments  will yield
superior  returns if these  companies  are  successful. These

                                       16
<PAGE>


investments  are  normally  held  for a  number  of  years.  When we make  these
investments, most of the companies are still developing the products they intend
to bring to market or are in the early stages of product sales.  Venture capital
financed companies are net consumers of cash and often dependent upon additional
financing to execute their business plans. These investments involve substantial
risk and the companies  generally lack meaningful  historical  financial results
used in traditional  valuation  models.  The process of pricing these securities
range from fierce competitive bidding between financial institutions to existing
investors   negotiating   prices  with  the  company  without  outside  investor
validation.  Investments  in convertible  preferred  stock come with rights that
vary  dramatically  both from company to company and between rounds of financing
within  the same  company.  These  rights,  such as  anti-dilution,  redemption,
liquidation  preferences  and  participation,  bear  directly  on the  price  an
investor is willing to pay for a security.  The returns on these investments are
generally  realized  through an initial public offering of the company's  shares
or, more commonly, through the company's acquisition by a public company.

     One of the  factors  affecting  fair value is the  amount of time  before a
company  requires  additional  financing to support its  operations.  Management
believes that companies that are financed to the estimated  point of operational
profitability  or for a period  greater  than one year will most  likely  return
value to the investor through an acquisition between a willing buyer and seller,
as the company does not need to seek financing from an opportunistic investor or
insider in an adverse  investment  environment.  If a particular  company  needs
capital in the near term,  management  considers  a range of factors in its fair
value  analysis,  including  our  ability  to  recover  our  investment  through
surviving liquidation  preferences.  Management's  valuation  methodologies also
include  fundamental  analysis that evaluates the investee company's progress in
developing  products,  building  intellectual  property  portfolios and securing
customer  relationships,  as well as overall industry conditions,  conditions in
and prospects for the investee's  geographic  region,  and overall equity market
conditions.   This  is  combined  with   analysis  of   comparable   acquisition
transactions and values to determine if the security's  liquidation  preferences
will ensure full recovery of our investment in a likely acquisition  outcome. In
its valuation analysis, management also considers the most recent transaction in
a company's shares.

     The determination of fair values of investments requires the application of
significant  judgment.  It is possible that the factors  evaluated by management
and fair values will change in subsequent  periods,  especially  with respect to
our  privately  held equity  securities in  technology  companies,  resulting in
material impairment charges in future periods.

Other-than-temporary Impairments

     Management  performs an ongoing review of all  investments in the portfolio
to   determine   if   there   are  any   declines   in  fair   value   that  are
other-than-temporary.

     Since our listed equity  securities are  classified as trading  securities,
impairment  adjustments  are not  required as any change in the market  value of
these securities between reporting periods is included in earnings.

     In  relation  to  our  equity   securities  that  do  not  have  a  readily
determinable  fair  value  and are  classified  as  available-for-sale,  factors
considered in impairment  reviews include:  (i) the length of time and extent to
which  estimated  fair  values  have been  below  cost and the  reasons  for the
decline,  (ii)  the  investee's  recent  financial  performance  and  condition,
earnings trends and future  prospects,  (iii) the market condition of either the
investee's  geographic area or industry as a whole, and (iv) concerns  regarding
the investee's  ability to continue as a going concern (such as the inability to
obtain  additional  financing).  If the evidence supports that a decline in fair
value is  other-than-temporary,  then the investment is reduced to its estimated
fair value,  which becomes its new cost basis,  and a realized loss is reflected
in earnings.

     We determine that a fixed maturity security is impaired when it is probable
that we will  not be  able to  collect  amounts  due  (principal  and  interest)
according to the security's  contractual  terms. We make this  determination  by
considering  all  available  facts and  circumstances,  including our intent and
ability to continue to hold the investment to maturity.  The factors we consider
include:  (i) the length of time and extent to which the market values have been
below  amortized cost and the reasons for the decline,  (ii) the issuer's recent
financial performance and condition, earnings trends and future prospects in the
near to mid-term, (iii)changes

                                       17
<PAGE>


in the issuer's debt rating and/or  regulatory  actions or other events that may
effect the issuer's operations, (iv) the market condition of either the issuer's
geographic  area or industry as a whole,  and (v) factors that raise doubt about
the issuer's  ability to continue as a going concern.  If the evidence  supports
that a decline in fair value is  other-than-temporary,  then the fixed  maturity
security  is  written  down to its  quoted  market  value,  if  such a value  is
available.  If a readily  determinable fair value does not exist, then the fixed
maturity  security is written down to  management's  estimate of its fair value,
which is based on the valuation methodologies  described above.  Write-downs are
recorded as realized losses and included in earnings.

     The   evaluations   for   other-than-temporary   impairments   require  the
application of significant  judgment. It is possible that the impairment factors
evaluated  by  management  and fair values will  change in  subsequent  periods,
especially  with  respect to  privately  held equity  securities  in  technology
companies, resulting in material impairment charges in future periods.

Life Insurance Policy Liabilities

     We  account  for life  insurance  policy  liabilities  in  accordance  with
Statement of Financial Accounting Standards No. 97, "Accounting and Reporting by
Insurance Enterprises for Certain Long-Duration Contracts and for Realized Gains
and Losses from the Sale of  Investments."  We account for life insurance policy
liabilities for deferred annuities as investment-type  insurance products and we
record these liabilities at accumulated value (premiums  received,  plus accrued
interest to the balance sheet date, less withdrawals and assessed fees).


RECENTLY ISSUED ACCOUNTING PRONOUNCEMENTS

     See Note 1 to the Consolidated  Financial Statements in Item 8 of this Form
10-K for a summary of recently issued accounting pronouncements.


LIQUIDITY AND CAPITAL RESOURCES

     Our cash and cash  equivalents  decreased  during 2006 by $3.3 million from
$10.0  million as of December  31, 2005 to $6.7 million as of December 31, 2006.
This decrease in cash and cash equivalents primarily resulted from $11.6 million
and $1.4 million of cash used in financing activities and operating  activities,
respectively,  partially  offset by $9.2  million of cash  provided by investing
activities.  Cash used in financing activities related to insurance policyholder
benefits paid by LPAL. Cash used in operating activities primarily resulted from
the $2.7  million  operating  loss for 2006,  partially  offset by a decrease in
accrued investment income and the sale of trading  securities.  Cash provided by
investing  activities  primarily  related  to the  maturity  of  fixed  maturity
securities by the LPAL and the Group,  partially offset by the purchase of fixed
maturity  securities  held by LPAL and the Group.  As of December 31, 2006,  our
cash and cash equivalents,  excluding the amount held by LPAL, amounted to $2.35
million,  an increase of $1.8 million from December 31, 2005. We reinvested $3.0
million of the $7.0 million  proceeds from the  corporate  bonds that matured in
early 2006 and  received  $0.1  million  from the sale of our  remaining  listed
equities.  The $3.0 million in corporate bonds will mature on or before June 26,
2007.

     The $4.4 million of cash and cash  equivalents held by LPAL, as well as the
$9.8 million of investments  held by LPAL,  are not currently  available to fund
the operations or commitments of the Company or its other subsidiaries.

     Shareholders'  equity  decreased  during  2006 by $3.7  million  from $19.6
million at December 31, 2005 to $15.9 million as of December 31, 2006, primarily
due to the net loss for the period of $3.7 million.  As of December 31, 2006 and
2005,  $62.6  million of our  Ordinary  Shares,  at cost,  held by the  employee
benefit trusts have been netted against shareholders' equity.

     As discussed  above in "Results of  Operations  by Business  Segment - Life
Insurance and Annuities," LPAL  discontinued  issuing new policies in July 2002.
During 2006, LPAL continued to service its existing

                                       18
<PAGE>

policyholders.  During this period,  policy surrenders  totaled $0.2 million and
policy  maturities  totaled $11.4 million.  Policyholder  liabilities  were $3.6
million as of December  31, 2006,  compared to $13.6  million as of December 31,
2005. We do not expect significant  surrender activity during 2007; however, all
but  the  remaining   seven-year   policies,   approximately   $3.5  million  of
policyholder  liabilities,  are scheduled to mature during this period. LPAL has
sufficient liquid resources to fund these  maturities.  As of December 31, 2006,
LPAL had cash of $4.4 million,  accrued interest  receivable of $0.2 million and
corporate bonds of $9.0 million. In addition,  as discussed above in the Results
of Operations section for the life insurance and annuities  segment,  in January
2007, LPAL received a $1.2 million payment  representing a partial  distribution
resulting  from  the  settlements  achieved  in the  WorldCom,  Inc.  securities
litigation.  LPAL  expects  to  receive an  additional  $0.4  million as a final
distribution later in 2007.

     In prior  years,  LPAL held listed  equity  securities  at levels such that
fluctuations  in the market value of these listed equity  securities  could have
had a significant  impact on LPAL's statutory capital level.  Following the sale
of LPAL's remaining listed equity holdings in January 2005,  fluctuations in the
market  value of LPAL's  listed  equity  securities  no longer have an impact on
LPAL's required statutory capital level.

     As of December 31, 2006, we had no bank borrowings,  guarantee obligations,
material commitments  outstanding for capital expenditures or additional funding
for private equity portfolio companies.

     As of December 31, 2006, we had $2.35 million of cash and cash  equivalents
and $3.0 million in short-term bonds,  excluding cash and bonds held by our life
insurance  and  annuities  segment.  We believe  that this cash  balance and the
proceeds in 2007 from our bond  maturities are sufficient to fund our operations
(venture capital and consulting and corporate activities) over at least the next
12 months.

     In order to reduce  operating  costs and to conserve  cash, and in light of
the decrease in the size and complexity of our continuing operations, we reduced
our  staffing  levels in early 2005.  After the payment of all related  employee
severance  costs in 2005,  the impact of the staff cost  reductions is now being
fully realized.  We implemented  other cost reductions during 2005, and in 2006,
we implemented  the sublease of our Jersey office space for the remainder of our
lease term, effective from June 2006.


CONTRACTUAL OBLIGATIONS AND CONTINGENT LIABILITIES AND COMMITMENTS

     The following  table  aggregates our expected  contractual  obligations and
commitments subsequent to December 31, 2006.
<TABLE>
<CAPTION>

                                                                 2008 -        2010 -
Contractual obligations (1)                           2007       2009          2011        Total
-------------------------------------             ----------- -----------  -----------  -----------
                                                                     (In thousands)

<S>                                                    <C>          <C>       <C>          <C>
Deferred annuity policy maturities...........          $3,260       $ 149     $      -       $3,409
Capital lease commitments....................               -           -            -            -
Operating lease commitments (2)..............             285         390           66          741
                                                  ----------- -----------  -----------  -----------
Total contractual cash obligations...........          $3,545       $ 539       $   66       $4,150
                                                  ----------- -----------  -----------  -----------
                                                  ----------- -----------  -----------  -----------
<FN>
(1) Does not include other commitments for the purchase of goods and services which in the aggregate are immaterial.

(2) Includes commitments related to our Jersey office lease which expires in September 2010. We entered into a sublease
    of our Jersey office during 2006. Expected future sublease income from 2007 through 2010 is $296,000. A liability of
    $158,000 remains recorded on our consolidated balance sheet as of December 31, 2006, representing the loss on the
    sublease from 2007 through 2010.
</FN>
</TABLE>


                                       19
<PAGE>


Item 7A.     QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

     The nature of our businesses  exposes us to market risk. Market risk is the
risk of loss that may occur when  changes in  interest  rates and public  equity
prices adversely affect the value of invested assets.

Interest Rate Risk

     LPAL is subject to risk from interest rate  fluctuations  when payments due
to  policyholders  are not matched in respect of amount and duration with income
from investments.  LPAL attempts to minimize this risk by ensuring that payments
and income are matched as closely as possible while also  maximizing  investment
returns.  LPAL  has not used  derivative  financial  instruments  as part of its
investment strategy.

     For LPAL's business,  the amount of policyholder  liabilities is unaffected
by  changes in  interest  rates.  Given the  existing  policy and bond  maturity
profiles,  and that bonds will  generally  be held to maturity  and early policy
redemptions  are protected by a market value  adjustment and surrender  penalty,
the bonds and policies carry minimal interest rate risk.

     Interest  income earned on excess cash and cash  equivalents in LPAL and in
the remainder of the Group is expected to be  approximately  $0.6 million during
2007,  therefore  movements in market  interest rates should not have a material
impact on our consolidated results.

Equity Price Risk

     In prior years, we held levels of listed equity securities which exposed us
to  significant  equity  price risk and  resulting  volatility  in our  reported
earnings.  By the end of September  2006,  we had sold all of our listed  equity
holdings and thus we are no longer exposed to equity price risk on listed equity
securities.

     As of December 31, 2006, we held $0.8 million in private  corporate  equity
securities  of  technology  companies  for which  liquid  markets  do not exist.
Private equity prices do not fluctuate directly with public equity markets,  but
significant  market  movements  may  trigger a review  for  other-than-temporary
adjustment of the carrying  values of our private equity  securities.  The risks
inherent in these private equity  investments  relate primarily to the viability
of the  investee  companies.  We try to mitigate  these  risks in various  ways,
including performing extensive due diligence prior to making an investment,  and
regularly reviewing the progress of the investee companies.

     For additional information relating to our financial risk profile, see Note
12 to the Consolidated Financial Statements in Item 8 of this Form 10-K.


                                       20
<PAGE>



Item 8.    FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA


                   INDEX TO CONSOLIDATED FINANCIAL STATEMENTS
<TABLE>
<CAPTION>

                                                                                                             Page

<S>                                                                                                           <C>
Report of Independent Registered Public Accounting Firm.....................................................  22

Consolidated Balance Sheets as of December 31, 2006 and 2005................................................  23

Consolidated Statements of Operations for the Years Ended
  December 31, 2006, 2005 and 2004..........................................................................  24

Consolidated Statements of Cash Flows for the Years Ended
  December 31, 2006, 2005 and 2004..........................................................................  25

Consolidated Statements of Changes in Shareholders' Equity for the Years Ended
  December 31, 2006, 2005 and 2004..........................................................................  27

Consolidated Statements of Comprehensive Income for the Years Ended
  December 31, 2006, 2005 and 2004..........................................................................  28

Notes to Consolidated Financial Statements..................................................................  29

</TABLE>

                                       21
<PAGE>







             REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM



Board of Directors and Shareholders of
Berkeley Technology Limited
Jersey, Channel Islands


     We have audited the  accompanying  consolidated  balance sheets of Berkeley
Technology  Limited  (the  "Company")  as of December  31, 2006 and 2005 and the
related   consolidated   statements  of  operations,   cash  flows,  changes  in
shareholders' equity and comprehensive income for each of the three years in the
period ended  December 31, 2006.  We have also audited the schedules on pages 62
to 67 in Item 15 (the "Schedules"). These financial statements and the Schedules
are the  responsibility of the Company's  management.  Our  responsibility is to
express an opinion on these financial  statements and the Schedules based on our
audits.

     We  conducted  our audits in  accordance  with the  standards of the Public
Company Accounting Oversight Board (United States). Those standards require that
we plan and perform the audits to obtain reasonable  assurance about whether the
financial  statements  are free of  material  misstatement.  The  Company is not
required  to have,  nor were we engaged  to  perform,  an audit of its  internal
control over financial reporting.  Our audits included consideration of internal
control over financial  reporting as a basis for designing audit procedures that
are appropriate in the  circumstances,  but not for the purpose of expressing an
opinion on the  effectiveness  of the Company's  internal control over financial
reporting.  Accordingly,  we express  no such  opinion.  An audit also  includes
examining,  on a test basis,  evidence supporting the amounts and disclosures in
the  financial   statements,   assessing  the  accounting  principles  used  and
significant  estimates  made by  management,  as well as evaluating  the overall
financial  statement  presentation.   We  believe  that  our  audits  provide  a
reasonable basis for our opinion.

     In our opinion,  the consolidated  financial  statements  referred to above
present fairly,  in all material  respects,  the financial  position of Berkeley
Technology  Limited  at  December  31,  2006 and 2005,  and the  results  of its
operations  and its cash flows for each of the three  years in the period  ended
December 31, 2006, in conformity with accounting  principles  generally accepted
in the United States of America.

     As discussed in Note 1 to the consolidated financial statements,  effective
January 1, 2006,  the Company  adopted the  provisions of Statement of Financial
Accounting Standards No. 123 (revised 2004), "Share-Based Payment."


     Also,  in our  opinion,  the  Schedules  present  fairly  in  all  material
respects, the information set forth therein.



/s/  BDO Seidman, LLP
San Francisco, California
March 20, 2007












                                       22
<PAGE>



                  BERKELEY TECHNOLOGY LIMITED AND SUBSIDIARIES

                           CONSOLIDATED BALANCE SHEETS
                      (In thousands, except share amounts)
<TABLE>
<CAPTION>
                                                                                            December 31,
                                                                                       ------------------------
                                                                                          2006          2005
                                                                                       -----------  -----------
                                            ASSETS

Investments (principally of life insurance subsidiary):
   Fixed maturities:
     Available-for-sale, at fair value (amortized cost: $9,021 and $13,809
<S>                                                                                    <C>          <C>
       as of December 31, 2006 and 2005, respectively)............................     $     9,007  $    13,829
     Held-to-maturity, at amortized cost (fair value: $3,004 and $6,982 as of
       December 31, 2006 and 2005, respectively)..................................           3,009        7,011
   Equity securities:
     Trading, at fair value (cost: $0 and $102 as of December 31,
       2006 and 2005, respectively)...............................................               -           84
     Available-for-sale, at estimated fair value (cost: $844 and $850 as of
       December 31, 2006 and 2005, respectively)..................................             844          850
                                                                                       -----------  -----------
Total investments.................................................................          12,860(1)    21,774

Cash and cash equivalents.........................................................           6,707(1)    10,039
Cash held in escrow...............................................................               -        1,027
Accrued investment income.........................................................             304          609
Property and equipment, net.......................................................              17           43
Other assets......................................................................             349          311
                                                                                       -----------  -----------
Total assets......................................................................     $    20,237  $    33,803
                                                                                       -----------  -----------
                                                                                       -----------  -----------
                        LIABILITIES AND SHAREHOLDERS' EQUITY
Liabilities:
Life insurance policy liabilities.................................................     $     3,640  $    13,573
Accounts payable and accruals.....................................................             674          627
                                                                                       -----------  -----------
Total liabilities.................................................................           4,314       14,200
                                                                                       -----------  -----------
Commitments and contingencies (See Note 11)

Shareholders' equity:
Ordinary shares, $0.05 par value per share: 86,400,000 shares authorized;
   64,439,073 shares issued and outstanding as of December 31, 2006
   and 2005.......................................................................           3,222        3,222
Additional paid-in capital........................................................          67,718       67,660
Retained earnings.................................................................           7,999       11,682
Employee benefit trusts, at cost (13,522,381 shares as of
   December 31, 2006 and 2005)....................................................         (62,598)     (62,598)
Accumulated other comprehensive loss..............................................            (418)        (363)
                                                                                       -----------  -----------
Total shareholders' equity........................................................          15,923       19,603
                                                                                       -----------  -----------
Total liabilities and shareholders' equity........................................     $    20,237  $    33,803
                                                                                       -----------  -----------
                                                                                       -----------  -----------

<FN>
(1) Includes $9,851 of investments and $4,354 of cash and cash equivalents in the Company's insurance subsidiary
    (London Pacific Assurance Limited ("LPAL")) which are not currently available to fund the operations or
    commitments of the Company or its other subsidiaries.
</FN>
</TABLE>

           See accompanying Notes which are an integral part of these
                       Consolidated Financial Statements.

                                       23
<PAGE>


                  BERKELEY TECHNOLOGY LIMITED AND SUBSIDIARIES

                      CONSOLIDATED STATEMENTS OF OPERATIONS
                (In thousands, except per share and ADS amounts)
<TABLE>
<CAPTION>

                                                                                              Years Ended December 31,
                                                                                       -------------------------------------
                                                                                          2006         2005         2004
                                                                                       -----------  -----------  -----------
Continuing operations:

Revenues:
<S>                                                                                    <C>          <C>          <C>
Investment income............................................................          $     1,203  $     1,562  $     1,397
Insurance policy charges.....................................................                    2            4            4
Consulting and other fee income..............................................                  722          553          513
Net realized investment gains (losses).......................................                   (2)         (43)       4,700
Change in net unrealized investment gains and losses on trading
   securities................................................................                   18           17      (12,373)
                                                                                       -----------  -----------  -----------
                                                                                             1,943        2,093       (5,759)
Expenses:
Amounts credited on insurance policyholder accounts..........................                  468          980        1,358
Operating expenses...........................................................                4,152        4,344        4,629
Interest expense.............................................................                    1            4          105
                                                                                       -----------  -----------  -----------
                                                                                             4,621        5,328        6,092
                                                                                       -----------  -----------  -----------
Loss from continuing operations before income tax expense....................               (2,678)      (3,235)     (11,851)

Income tax expense ..........................................................                    5           12          290
                                                                                       -----------  -----------  -----------
Loss from continuing operations..............................................               (2,683)      (3,247)     (12,141)


Discontinued operations:
Loss on disposal of discontinued operations, net of income
   tax expense of $0.........................................................               (1,000)           -            -
                                                                                       -----------  -----------  -----------
Loss on discontinued operations..............................................               (1,000)           -            -
                                                                                       -----------  -----------  -----------
Net loss.....................................................................          $    (3,683) $    (3,247) $   (12,141)
                                                                                       -----------  -----------  -----------
                                                                                       -----------  -----------  -----------


Basic and diluted loss per share and ADS:

Basic and diluted loss per share:
Continuing operations........................................................          $     (0.05) $     (0.06) $     (0.24)
Discontinued operations......................................................                (0.02)           -            -
                                                                                       -----------  -----------  -----------
                                                                                       $     (0.07) $     (0.06) $     (0.24)
                                                                                       -----------  -----------  -----------
                                                                                       -----------  -----------  -----------
Basic and diluted loss per ADS:
Continuing operations........................................................          $     (0.53) $     (0.64) $     (2.39)
Discontinued operations......................................................                (0.20)           -            -
                                                                                       -----------  -----------  -----------
                                                                                       $     (0.73) $     (0.64) $     (2.39)
                                                                                       -----------  -----------  -----------
                                                                                       -----------  -----------  -----------
</TABLE>

           See accompanying Notes which are an integral part of these
                       Consolidated Financial Statements.



                                       24
<PAGE>



                  BERKELEY TECHNOLOGY LIMITED AND SUBSIDIARIES

                      CONSOLIDATED STATEMENTS OF CASH FLOWS
                                 (In thousands)
<TABLE>
<CAPTION>
                                                                                              Years Ended December 31,
                                                                                       -------------------------------------
                                                                                           2006        2005         2004
                                                                                       -----------  -----------  -----------
<S>                                                                                    <C>          <C>          <C>
Net loss.....................................................................          $    (3,683) $    (3,247) $   (12,141)

Adjustments to reconcile net loss to net
   cash provided by (used in) operating activities:
Depreciation and amortization................................................                   32           36           53
Amounts credited on insurance policyholder accounts..........................                  468          980        1,358
Net realized investment losses (gains).......................................                    2           43       (4,700)
Loss on forfeiture of escrow.................................................                1,000            -            -
Change in net unrealized investment gains and losses
   on trading securities.....................................................                  (18)         (17)      12,373
Net amortization of investment premiums and discounts........................                  185          656          572
Share based compensation.....................................................                   58            -            -

Net changes in operating assets and liabilities:
   Trading equity securities.................................................                  108          441       12,009
   Accrued investment income ................................................                  305          128          189
   Other assets..............................................................                  (37)         310         (112)
   Life insurance policy liabilities.........................................                   (2)          (4)          (4)
   Accounts payable, accruals and other liabilities..........................                  168          193          174
   Income taxes payable......................................................                    -            7           17

Other operating cash flows...................................................                   25          (22)          (6)
                                                                                       -----------  -----------  -----------
Net cash provided by (used in) operating activities..........................               (1,389)        (496)       9,782
                                                                                       -----------  -----------  -----------
Cash flows from investing activities:
Purchases of held-to-maturity fixed maturity securities......................               (3,036)      (8,510)           -
Purchases of available-for-sale fixed maturity securities....................               (9,082)      (5,121)           -
Purchases of available-for-sale equity securities............................                    -            -          (15)
Proceeds from maturity of held-to-maturity fixed maturity securities.........                7,000        1,350            -
Proceeds from sale and maturity of available-for-sale fixed
   maturity securities.......................................................               14,364       10,611        5,060
Proceeds from sale of available-for-sale equity securities...................                    -            -           75
Capital expenditures.........................................................                   (7)          (9)          (5)
                                                                                       -----------  -----------  -----------
Net cash provided by (used in) investing activities .........................                9,239       (1,679)       5,115
                                                                                       -----------  -----------  -----------
</TABLE>







           See accompanying Notes which are an integral part of these
                       Consolidated Financial Statements.



                                       25
<PAGE>



                  BERKELEY TECHNOLOGY LIMITED AND SUBSIDIARIES

                CONSOLIDATED STATEMENTS OF CASH FLOWS (Continued)
                                 (In thousands)
<TABLE>
<CAPTION>
                                                                                              Years Ended December 31,
                                                                                       -------------------------------------
                                                                                           2006        2005         2004
                                                                                       -----------  -----------  -----------

Cash flows from financing activities:
<S>                                                                                        <C>           <C>          <C>
Insurance policyholder benefits paid.........................................              (11,625)      (6,749)      (9,824)
Proceeds from disposal of shares by the employee benefit trusts..............                    -           18            -
                                                                                       -----------  -----------  -----------
Net cash used in financing activities........................................              (11,625)      (6,731)      (9,824)
                                                                                       -----------  -----------  -----------

Net increase (decrease) in cash and cash equivalents.........................               (3,775)      (8,906)       5,073
Cash and cash equivalents at beginning of year ..............................               10,039       19,495       14,408
Foreign currency translation adjustment......................................                  443         (550)          14
                                                                                       -----------  -----------  -----------
Cash and cash equivalents at end of year (1), (2)............................          $     6,707  $    10,039  $    19,495
                                                                                       -----------  -----------  -----------
                                                                                       -----------  -----------  -----------


Supplemental disclosure of cash flow information:

Cash paid during the year for:
Interest.....................................................................          $         -  $         4  $       105
Income taxes (net of amounts recovered)......................................          $         5  $         5  $       274

Supplemental disclosure of non-cash investing activities:
Exchange of available-for-sale equity securities for trading equity
   securities................................................................          $         -  $         -  $        98



<FN>
(1)   The amount for December 31, 2006 includes $4,354 in the Company's insurance subsidiary (LPAL) which is not currently
      available to fund the operations or commitments of the Company or its other subsidiaries.

(2)   Does not include $1,027 of cash held in escrow as of December 31, 2005.
</FN>
</TABLE>




           See accompanying Notes which are an integral part of these
                       Consolidated Financial Statements.



                                       26
<PAGE>



                  BERKELEY TECHNOLOGY LIMITED AND SUBSIDIARIES

           CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDERS' EQUITY
                (In thousands, except per share and ADS amounts)
<TABLE>
<CAPTION>

                                                                                             Accumulated
                                                                                                Other
                                    Ordinary Shares      Additional               Employee     Compre-       Total
                                 ----------------------   Paid-in     Retained    Benefit      hensive   Shareholders'
                                   Number      Amount     Capital     Earnings     Trusts       Loss        Equity
                               ---------------------------------------------------------------------------------------

<S>                              <C>         <C>         <C>         <C>         <C>         <C>          <C>
Balance as of January 1, 2004        64,439  $    3,222  $   68,615  $   27,070  $  (63,571) $      (439) $   34,897

Net loss........................          -           -           -     (12,141)          -            -     (12,141)
Change in net unrealized
   gains and losses on
   available-for-sale securities          -           -           -           -           -           46          46
Foreign currency translation
   adjustment...................          -           -           -           -           -           91          91
                                 ----------  ----------  ----------  ----------  ----------  -----------  ----------
Balance as of
   December 31, 2004............     64,439  $    3,222  $   68,615  $   14,929  $  (63,571) $      (302) $   22,893
                                 ----------  ----------  ----------  ----------  ----------  -----------  ----------
                                 ----------  ----------  ----------  ----------  ----------  -----------  ----------



Net loss........................          -  $        -  $        -  $   (3,247) $        -  $         -  $   (3,247)
Change in net unrealized
   gains and losses on
   available-for-sale securities          -           -           -           -           -          (16)        (16)
Foreign currency translation
   adjustment...................          -           -           -           -           -          (45)        (45)
Exercise of employee share
   options, including income
   tax effect...................          -           -        (955)          -         973            -          18
                                 ----------  ----------  ----------  ----------  ----------  -----------  ----------
Balance as of
   December 31, 2005............     64,439  $    3,222  $   67,660  $   11,682  $  (62,598) $      (363) $   19,603
                                 ----------  ----------  ----------  ----------  ----------  -----------  ----------
                                 ----------  ----------  ----------  ----------  ----------  -----------  ----------



Net loss........................          -  $        -  $        -  $   (3,683) $        -  $         -  $   (3,683)
Change in net unrealized
   gains and losses on
   available-for-sale securities          -           -           -           -           -          (34)        (34)
Foreign currency translation
   adjustment...................          -           -           -           -           -          (21)        (21)
Share based compensation........          -           -          58           -           -            -          58
                                 ----------  ----------  ----------  ----------  ----------  -----------  ----------
Balance as of
   December 31, 2006............     64,439  $    3,222  $   67,718  $    7,999  $  (62,598) $      (418) $   15,923
                                 ----------  ----------  ----------  ----------  ----------  -----------  ----------
                                 ----------  ----------  ----------  ----------  ----------  -----------  ----------
</TABLE>


           See accompanying Notes which are an integral part of these
                       Consolidated Financial Statements.





                                       27
<PAGE>



                  BERKELEY TECHNOLOGY LIMITED AND SUBSIDIARIES

                 CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME
                                 (In thousands)
<TABLE>
<CAPTION>
                                                                                            Years Ended December 31,
                                                                                       -------------------------------------
                                                                                          2006         2005         2004
                                                                                       -----------  -----------  -----------

<S>                                                                                    <C>          <C>          <C>
Net loss.....................................................................          $    (3,683) $    (3,247) $   (12,141)

Other comprehensive income (loss), net of deferred income taxes:

Foreign currency translation adjustments, net of income taxes of $0..........                  (21)         (45)          91

Change in net unrealized gains and losses:
   Unrealized holding gains and losses on available-for-sale securities......                  (14)         (44)          64
   Reclassification adjustment for gains and losses included in
     net loss................................................................                  (20)          28          (18)
   Deferred income taxes.....................................................                    -            -            -
                                                                                       -----------  -----------  -----------
Other comprehensive income (loss)............................................                  (55)         (61)         137
                                                                                       -----------  -----------  -----------
Comprehensive loss...........................................................          $    (3,738) $    (3,308) $   (12,004)
                                                                                       -----------  -----------  -----------
                                                                                       -----------  -----------  -----------
</TABLE>



           See accompanying Notes which are an integral part of these
                       Consolidated Financial Statements.

                                       28
<PAGE>


                  BERKELEY TECHNOLOGY LIMITED AND SUBSIDIARIES

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                DECEMBER 31, 2006

     As used herein,  the terms  "registrant"  and  "Company"  refer to Berkeley
Technology Limited.  Except as the context otherwise requires,  the term "Group"
refers collectively to the registrant and its subsidiaries.

Note 1.   Summary of Significant Accounting Policies

Basis of Presentation and Principles of Consolidation

     The accompanying  consolidated  financial  statements have been prepared by
the Company in  conformity  with United  States  generally  accepted  accounting
principles ("U.S.  GAAP").  These consolidated  financial statements include the
accounts of the  Company,  its  subsidiaries,  the  Employee  Share Option Trust
("ESOT")  and  the  Agent  Loyalty   Opportunity  Trust  ("ALOT").   Significant
subsidiaries included in the continuing operations of the Group and discussed in
this document  include London Pacific  Assurance  Limited  ("LPAL") and Berkeley
International  Capital Corporation ("BICC").  All intercompany  transactions and
balances have been eliminated in consolidation.

     The  consolidated  balance sheet is presented in an unclassified  format as
the majority of the Group's  assets  relate to its life  insurance and annuities
business. The Group's other business is venture capital and consulting.

     The Company is incorporated under the laws of Jersey,  Channel Islands. Its
Ordinary  Shares are traded on the London Stock  Exchange and in the U.S. on the
OTC Bulletin Board in the form of American Depositary Shares ("ADSs"), which are
evidenced by American  Depositary  Receipts  ("ADRs").  Each ADS  represents ten
Ordinary Shares. Pursuant to the regulations of the U.S. Securities and Exchange
Commission  ("SEC"),  the Company is considered a U.S.  domestic  registrant and
must file financial statements prepared under U.S. GAAP.

Cash and Cash Equivalents

     The Group considers all highly liquid investments with an original maturity
of three months or less to be cash equivalents.

Investments

     The Group's  investments  consist of fixed maturity and equity  securities.
Fixed  maturity  securities  are  classified  as  either  available-for-sale  or
held-to-maturity,  and equity  securities  are  classified as either  trading or
available-for-sale. The investments are accounted for as follows:

       i)   available-for-sale securities are recorded at fair value, with
            changes in unrealized gains and losses excluded from net income, but
            reported net of applicable income taxes as a separate component of
            accumulated other comprehensive income;

       ii)  held-to-maturity securities are recorded at amortized cost unless
            these securities become other-than-temporarily impaired; and

       iii) trading securities are recorded at fair value with changes in
            unrealized gains and losses included in net income.

     When a quoted market price is available for a security, the Group uses this
price to determine  fair value.  If a quoted market price is not available for a
security,  management  estimates the security's  fair value based on appropriate
valuation   methodologies.    Management's   valuation   methodologies   include
fundamental analysis

                                       29
<PAGE>

                  BERKELEY TECHNOLOGY LIMITED AND SUBSIDIARIES

             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

that evaluates the investee company's progress in developing products,  building
intellectual property portfolios and securing customer relationships, as well as
overall  industry  conditions,  conditions in and  prospects for the  investee's
geographic region, overall equity market conditions,  and the level of financing
already  secured and  available.  This is combined  with  analysis of comparable
acquisition  transactions and values to determine if the security's  liquidation
preferences  will ensure full  recovery  of the Group's  investment  in a likely
acquisition  outcome. In its valuation  analysis,  management also considers the
most recent transaction in a company's shares.

     Amortization  of premiums and  accretion  of  discounts  on fixed  maturity
securities  are  reflected  in  earnings  over  the  contractual  terms  of  the
investments in a manner that produces a constant effective yield. Realized gains
and  losses  on  securities  are  included  in net  income  using  the  specific
identification  method. Any  other-than-temporary  declines in the fair value of
available-for-sale or held-to-maturity  securities,  below the cost or amortized
cost basis, are recognized as realized losses in the consolidated  statements of
operations.  The cost  basis of such  securities  is  adjusted  to  reflect  the
write-down recorded.

Property, Equipment and Leasehold Improvements

     Property,  equipment  and  leasehold  improvements  are stated at cost less
accumulated depreciation. Depreciation is calculated on a straight-line basis at
rates  sufficient to write-off such assets over their estimated  useful lives on
the following basis:

       Furniture and equipment                          -  five years
       Computer equipment, including software           -  three to five years
       Leasehold improvements                           -  life of lease

     Assets held under  capital  leases are included in property,  equipment and
leasehold  improvements  and are depreciated  over their estimated useful lives.
The future  obligations  under these leases are included in accounts payable and
accruals.  Interest  paid on  capital  leases is  charged  to the  statement  of
operations over the periods of the leases.

Life Insurance Policy Liabilities, Revenues and Expenses

     Life insurance  policy  liabilities,  premium revenues and related expenses
are accounted for in accordance with Statement of Financial Accounting Standards
No.  97,  "Accounting  and  Reporting  by  Insurance   Enterprises  for  Certain
Long-Duration  Contracts  and for  Realized  Gains and  Losses  from the Sale of
Investments," as follows:

     i) Life insurance policy  liabilities for deferred  annuities are accounted
for as investment-type  insurance products and are recorded at accumulated value
(premiums  received,  plus  accrued  interest  to the balance  sheet date,  less
withdrawals and assessed fees).

     ii)  Revenues for  investment-type  insurance  products  consist of charges
assessed against policy account values for surrenders.

     iii) Benefits for investment-type insurance products are charged to expense
when  incurred  and  reflect the claim  amounts in excess of the policy  account
balance.  Expenses for investment-type products include the interest credited to
the policy account balance.

                                       30
<PAGE>


                  BERKELEY TECHNOLOGY LIMITED AND SUBSIDIARIES

             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

Revenue Recognition

     Interest  income  is  accounted  for on an  accrual  basis.  Dividends  are
accounted for when declared.

     Fees relating to venture  capital  activities are recognized in income when
the  investment  transaction  is  completed.  Fees for  consulting  services are
recognized  in  income  on an  accrual  basis,  based  upon  when  services  are
performed.

Share Based Compensation

Equity compensation plan

     The London Pacific Group 1990 Employee Share Option Trust  ("ESOT"),  which
was approved by shareholders in 1990, provides for the granting of share options
to employees and directors. Options are generally granted with an exercise price
equal to the fair market  value of the  underlying  shares at the date of grant.
Such  grants  to  employees  are  generally  exercisable  in four  equal  annual
installments  beginning  one year from the date of grant,  subject to employment
continuation,  and expire seven to ten years from the date of grant. Such grants
to directors are fully vested on the date of grant and expire seven or ten years
from the date of grant.

Share based compensation expense

     On January 1, 2006, the Company adopted  Statement of Financial  Accounting
Standards No. 123 (revised 2004) ("SFAS  123R"),  "Share-Based  Payment,"  which
establishes  standards  for the  accounting of  transactions  in which an entity
exchanges its equity  instruments for goods or services,  primarily  focusing on
accounting for transactions  where an entity obtains employee  services in share
based  payment  transactions.  SFAS 123R requires a public entity to measure the
cost  of  employee  services  received  in  exchange  for  an  award  of  equity
instruments,  including  share options,  based on the fair value of the award on
the grant date, and to recognize it as compensation  expense over the period the
employee is required to provide  service in exchange for the award,  usually the
vesting period.  SFAS 123R supersedes the Company's  previous  accounting  under
Accounting  Principles  Board Opinion No. 25 ("APB 25"),  "Accounting  for Stock
Issued to  Employees,"  and related  interpretations,  for periods  beginning in
fiscal 2006.  In March 2005,  the SEC issued Staff  Accounting  Bulletin No. 107
("SAB 107") relating to SFAS 123R. The Company has applied the provisions of SAB
107 in its adoption of SFAS 123R.

     The Company  adopted  SFAS 123R using the modified  prospective  transition
method,  which requires the application of the accounting standard as of January
1,  2006,  the  first day of the  Company's  fiscal  year  2006.  The  Company's
consolidated financial statements as of and for the year ended December 31, 2006
reflect the impact of SFAS 123R.  In  accordance  with the modified  prospective
transition method,  the Company's  consolidated  financial  statements for prior
periods have not been  restated to reflect,  and do not  include,  the impact of
SFAS 123R.

     In November 2005, the Financial  Accounting Standards Board ("FASB") issued
Staff Position No. FAS 123(R)-3 ("FSP 123R-3"),  "Transition Election Related to
Accounting for the Tax Effects of Share-Based Payments." The Company has elected
to  adopt  the  alternative   transition  method  provided  in  FSP  123R-3  for
calculating  the tax effects of share based  compensation  under SFAS 123R.  The
alternative  transition  method  includes  simplified  methods to establish  the
beginning  balance of the additional  paid-in capital pool ("APIC pool") related
to the  tax  effects  of  share  based  compensation,  and for  determining  the
subsequent impact on the APIC pool and consolidated  statements of cash flows of
the tax effects of share based  compensation  awards that are  outstanding  upon
adoption of SFAS 123R.



                                       31
<PAGE>


                  BERKELEY TECHNOLOGY LIMITED AND SUBSIDIARIES

             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)


     SFAS 123R  requires  companies  to  estimate  the fair value of share based
payment awards on the date of grant using an option pricing model.  The value of
the portion of the award that is  ultimately  expected to vest is  recognized as
expense  over  the  requisite  service  periods  in the  Company's  consolidated
statement  of  operations.  Prior to the  adoption  of SFAS  123R,  the  Company
accounted for share based awards to employees and directors  using the intrinsic
value method in accordance  with APB 25, as allowed under Statement of Financial
Accounting   Standards  No.  123  ("SFAS  123"),   "Accounting  for  Stock-Based
Compensation."  Under the intrinsic  value method,  no share based  compensation
expense  had  been  recognized  in  the  Company's   consolidated  statement  of
operations.

     Share based compensation  expense recognized in the Company's  consolidated
statement  of  operations   for  the  year  ended  December  31,  2006  includes
compensation  expense for share options  granted prior to, but not yet vested as
of December 31, 2005,  based on the fair value estimated as of the date of grant
in accordance with the provisions of SFAS 123R.  SFAS 123R requires  forfeitures
to be estimated at the time of grant and revised,  if  necessary,  in subsequent
periods  if  actual  forfeitures  differ  from  those  estimates.   Share  based
compensation  expense  calculated in accordance with SFAS 123R is to be based on
awards ultimately  expected to vest, and therefore the expense should be reduced
for estimated forfeitures.  The Company's estimated forfeiture rate for the year
ended  December  31,  2006 of zero  percent  is based  upon the short  remaining
vesting  periods of the option grants (only one option grant is not fully vested
at  the  end  of  2006)  and  because  all of the  unvested  options  relate  to
longstanding  employees.  In the Company's pro forma information  required to be
disclosed  under SFAS 123 for the periods prior to 2006,  the Company  accounted
for forfeitures as they occurred.

     SFAS 123R requires the cash flows resulting from the tax benefits resulting
from tax  deductions in excess of the  compensation  cost  recognized  for those
options to be classified  as financing  cash flows.  Due to the  Company's  loss
position,  and as the  Company  had no tax  deductions  related to share  option
exercises,  there were no such tax benefits  during the year ended  December 31,
2006.  Prior to the adoption of SFAS 123R,  those tax  benefits  would have been
reported as  operating  cash flows had the  Company  received  any tax  benefits
related to share option exercises.

     The fair value of share option grants to employees is calculated  using the
Black-Scholes  option  pricing  model,  even though this model was  developed to
estimate the fair value of freely tradable,  fully transferable  options without
vesting  restrictions,  which  differ  significantly  from the  Company's  share
options. The Black-Scholes model also requires subjective assumptions, including
future share price  volatility  and expected  time to  exercise,  which  greatly
affect the calculated  values.  The expected term of options  granted is derived
from  historical  data  on  employee   exercises  and  post-vesting   employment
termination behavior.  The risk-free rate is based on the U.S. Treasury rates in
effect  during the  corresponding  period of grant.  The expected  volatility is
based on the historical  volatility of the Company's share price.  These factors
could  change in the  future,  which would  affect the share based  compensation
expense in future  periods,  if the  Company,  through  the ESOT,  should  grant
additional share options.

Valuation and expense information under SFAS 123R

     The estimated fair value of share option  compensation awards to employees,
as calculated  using the  Black-Scholes  option  pricing model as of the date of
grant,  is amortized using the  straight-line  method over the vesting period of
the options. For the year ended December 31, 2006,  compensation expense related
to employee  share options under SFAS 123R totaled  $58,000,  and is included in
operating expenses in the accompanying statement of operations.

     The table below  reflects  the proforma net loss and basic and diluted loss
per share and ADS for the years ended December 31, 2005 and 2004:

                                       32
<PAGE>


                  BERKELEY TECHNOLOGY LIMITED AND SUBSIDIARIES

             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
<TABLE>
<CAPTION>
                                                                                       Pro Forma Results Under
                                                                                           SFAS 123 for the
                                                                                       Years Ended December 31,
                                                                                       ------------------------
                                                                                          2005         2004
                                                                                       -----------  -----------
                                                                                      (In thousands, except per
                                                                                        share and ADS amounts)

<S>                                                                                    <C>          <C>
Net loss as reported for the prior period (1)................................          $    (3,247) $   (12,141)
Share based compensation expense related to employee
   share options (2).........................................................                  (39)        (190)
                                                                                       -----------  -----------
Net loss, including the effect of share based compensation expense (3).......          $    (3,286) $   (12,331)
                                                                                       -----------  -----------
                                                                                       -----------  -----------


Basic and diluted loss per share, as reported for the prior period (1).......                (0.06)       (0.24)
Basic and diluted loss per share, including the effect of
  share based compensation...................................................                (0.06)       (0.24)
Basic and diluted loss per ADS, as reported for the prior period (1).........                (0.64)       (2.39)
Basic and diluted loss per ADS, including the effect of
  share based compensation...................................................                (0.65)       (2.43)
<FN>
(1) Net loss and loss per share and ADS prior to 2006 did not include share based compensation expense for employee share
    options under SFAS 123R because the Company did not adopt the recognition provisions of SFAS 123.

(2) Share based compensation expense prior to 2006 is calculated based on the pro forma application of SFAS 123.

(3) Net loss and net loss per share and ADS prior to 2006 represents pro forma information based on SFAS 123.
</FN>
</TABLE>



     During 2006, there were no option grants, exercises or forfeitures.  During
2006,  1,060,000  options expired and 653,750  options  vested.  At December 31,
2006, there were 5,225,000 options  outstanding with a weighted average exercise
price of $2.59.  Of these options,  4,475,000  were  exercisable at December 31,
2006, and these have a weighted  average  exercise price of $3.00. The remaining
750,000 options were unvested at December 31, 2006.  These unvested options have
a weighted  average  exercise  price of $0.15.  As of December 31,  2006,  total
unrecognized compensation expense related to unvested share options was $36,000,
which is expected to be recognized ratably over 2007, 2008 and the first half of
2009.

     During the three year period ended December 31, 2006, only one option grant
was made in the second  quarter of 2005.  The 1,000,000  options  granted in May
2005 were valued using the Black-Scholes option pricing model with the following
assumptions:  expected share price volatility of 34%, risk-free interest rate of
3.89%,  weighted average expected life of 6.25 years and expected dividend yield
of zero percent.  These  options were granted at an exercise  price equal to the
market price of the shares, or $61,500.

     For  additional  information  relating  to  the  Company's  employee  share
options, see Note 13 "Share Incentive Plans" below.


                                       33
<PAGE>




                  BERKELEY TECHNOLOGY LIMITED AND SUBSIDIARIES

             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

Income Taxes

     The Group  accounts  for  income  taxes in  accordance  with  Statement  of
Financial  Accounting  Standards  No. 109 ("SFAS 109"),  "Accounting  for Income
Taxes." Under SFAS 109, the Group recognizes taxes payable or refundable for the
current  year,  and  deferred  tax  assets  and  liabilities  due  to  temporary
differences in the basis of assets and liabilities  between amounts recorded for
financial statement and tax purposes.

     The Group provides a valuation  allowance for deferred income tax assets if
it is more likely than not that some  portion of the  deferred  income tax asset
will not be realized. The Group includes in income any increase or decrease in a
valuation  allowance that results from a change in  circumstances  that causes a
change in judgment  about the  realization  of the related  deferred  income tax
asset.

     The Group includes in additional  paid-in  capital the tax benefit on share
options  exercised during the period to the extent that such exercises result in
a permanent  difference  between financial  statement and tax basis compensation
expense.

Earnings Per Share and ADS

     The Company  calculates  earnings per share in accordance with Statement of
Financial Accounting Standards No. 128 ("SFAS 128"),  "Earnings per Share." This
statement  requires the  presentation  of basic and diluted  earnings per share.
Basic  earnings  per share is  calculated  by dividing net income or loss by the
weighted-average  number of Ordinary  Shares  outstanding  during the applicable
period,  excluding  shares  held by the ESOT and the ALOT which are  regarded as
treasury  stock for the  purposes  of this  calculation.  The Company has issued
employee share options,  which are considered  potential common stock under SFAS
128. The Company has also issued Ordinary Share warrants to the Bank of Scotland
in connection with the Company's bank facility (now terminated),  which are also
considered  potential common stock under SFAS 128. Diluted earnings per share is
calculated  by dividing  net income by the  weighted-average  number of Ordinary
Shares   outstanding   during  the  applicable  period  as  adjusted  for  these
potentially  dilutive  options and warrants  which are  determined  based on the
"Treasury Stock Method."

Foreign Currencies

     The Group uses the (pound) sterling as the functional currency for LPAL and
the U.S.  dollar  as the  functional  currency  for the  Company  and all  other
significant  subsidiaries.  Foreign exchange gains and losses resulting from the
remeasurement  of foreign  currency  assets  and  liabilities  into an  entity's
functional  currency are included in other operating expense in the consolidated
statements  of  operations.  For entities  using a (pound)  sterling  functional
currency,   assets  and  liabilities   denominated  in  foreign  currencies  are
translated  into U.S.  dollars at the  prevailing  exchange rates at the balance
sheet  date and income  and  expense  items are  translated  to U.S.  dollars at
average  exchange rates in effect during the period.  The resulting  translation
adjustment  is shown as a separate  component of other  comprehensive  income in
shareholders' equity. Foreign currency transaction gains and losses are recorded
in the results of operations, and were not material in all periods presented.

Comprehensive Income

     Comprehensive  income consists of net income;  changes in unrealized  gains
and losses on  available-for-sale  securities,  net of income taxes; and foreign
currency  translation  gains or losses arising on the translation of the Group's
non-U.S. dollar based subsidiaries.




                                       34
<PAGE>


                  BERKELEY TECHNOLOGY LIMITED AND SUBSIDIARIES

             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

Recently Issued Accounting Pronouncements

     Effective  January 1, 2006,  the Company  adopted  Statement  of  Financial
Accounting  Standards  No.  154  ("SFAS  154"),  "Accounting  Changes  and Error
Corrections,  a replacement of APB Opinion No. 20 and FASB Statement No. 3." The
statement  requires  retrospective   application  to  prior  periods'  financial
statements for a voluntary  change in accounting  principle  unless it is deemed
impracticable.  It also  requires  that a change in the method of  depreciation,
amortization, or depletion for long-lived, non-financial assets be accounted for
as a change in accounting estimate rather than a change in accounting principle.
The adoption of SFAS 154 did not have any impact on the  Company's  consolidated
financial statements.

     In September 2005, the American  Institute of Certified Public  Accountants
issued  Statement  of  Position  05-1 ("SOP  05-1"),  "Accounting  by  Insurance
Enterprises for Deferred  Acquisition Costs in Connection with  Modifications or
Exchanges of Insurance  Contracts." SOP 05-1 provides  guidance on accounting by
insurance enterprises for deferred acquisition costs on internal replacements of
insurance and investment  contracts other than those  specifically  described in
Statement of Financial Accounting Standards No. 97, "Accounting and Reporting by
Insurance Enterprises for Certain Long-Duration Contracts and for Realized Gains
and  Losses  from  the  Sale of  Investments."  SOP  05-1  defines  an  internal
replacement  as  a  modification  in  product  benefits,  features,  rights,  or
coverages  that occurs by the exchange of a contract for a new  contract,  or by
amendment,  endorsement, or rider to a contract, or by the election of a feature
or coverage within a contract.  Under SOP 05-1,  modifications  that result in a
substantially  unchanged contract will be accounted for as a continuation of the
replaced contract. A replacement contract that is substantially  changed will be
accounted  for as an  extinguishment  of the  replaced  contract  resulting in a
release of unamortized deferred acquisition costs, unearned revenue and deferred
sales  inducements  associated with the replaced  contract.  The guidance in SOP
05-1 will be applied  prospectively  and is effective for internal  replacements
occurring in fiscal years beginning after December 15, 2006. Because the Company
is not replacing  insurance policies,  the Company's  management does not expect
any impact on the Company's consolidated financial statements.

     In July  2006,  the FASB  issued  FASB  Interpretation  No. 48 ("FIN  48"),
"Accounting  for  Uncertainty  in  Income  Taxes  - an  Interpretation  of  FASB
Statement No. 109." FIN 48 clarifies the  accounting  for  uncertainty in income
taxes  recognized  in  a  company's  financial  statements  in  accordance  with
Statement of Financial  Accounting  Standards  No. 109,  "Accounting  for Income
Taxes." FIN 48 prescribes a recognition  threshold and measurement attribute for
the financial  statement  recognition and measurement of a tax position taken or
expected  to  be  taken  in  a  tax  return.   It  also  provides   guidance  on
derecognition,  classification,  interest and  penalties,  accounting in interim
periods,  disclosure  and  transition.  FIN 48 is  effective  for  fiscal  years
beginning after December 15, 2006. The Company's  management does not expect the
adoption  of FIN 48 to have a  material  effect  on its  consolidated  financial
statements.

     In  September  2006,  the FASB issued  Statement  of  Financial  Accounting
Standards No. 157 ("SFAS 157"),  "Fair Value  Measurements,"  which defines fair
value,  establishes  guidelines for measuring fair value and expands disclosures
regarding fair value measurements.  SFAS 157 does not require any new fair value
measurements but rather eliminates  inconsistencies in guidance found in various
prior  accounting  pronouncements.  SFAS  157  is  effective  for  fiscal  years
beginning after November 15, 2007.  Earlier adoption is permitted,  provided the
company has not yet issued financial statements,  including for interim periods,
for that fiscal year.  The  Company's  management  is currently  evaluating  the
impact of SFAS  157,  but does not  expect  the  adoption  of SFAS 157 to have a
material impact on its consolidated financial position, results of operations or
cash flows.

     In September 2006, the SEC issued Staff  Accounting  Bulletin No. 108 ("SAB
108"),  "Considering  the Effects of Prior Year  Misstatements  when Quantifying
Misstatements in Current Year Financial  Statements." SAB 108 provides  guidance
on  how  prior  year   misstatements   should  be  considered  when  quantifying
misstatements  in the  current  year  financial  statements.  SAB  108  requires
registrants to quantify

                                       35
<PAGE>

                  BERKELEY TECHNOLOGY LIMITED AND SUBSIDIARIES

             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

misstatements  using both a balance sheet and an income  statement  approach and
evaluate  whether either  approach  results in quantifying a misstatement  that,
when all  relevant  quantitative  and  qualitative  factors are  considered,  is
material.  SAB 108 does not change the guidance in SAB 99,  "Materiality,"  when
evaluating  the  materiality of  misstatements.  SAB 108 is effective for fiscal
years ending after November 15, 2006. Upon initial application,  SAB 108 permits
a one-time  cumulative effect  adjustment to beginning  retained  earnings.  The
adoption  of SAB 108 did not  have  any  impact  on the  Company's  consolidated
financial statements.

     In  February  2007,  the FASB  issued  Statement  of  Financial  Accounting
Standards No. 159 ("SFAS 159"),  "The Fair Value Option for Financial Assets and
Financial  Liabilities - Including an amendment of FASB  Statement No 115." SFAS
159 permits entities to choose to measure many financial instruments and certain
other items at fair value.  SFAS 159 is  effective  for fiscal  years  beginning
after November 15, 2007. Early adoption is permitted,  provided the company also
elects  to apply  the  provisions  of SFAS  157.  The  Company's  management  is
currently evaluating the impact of SFAS 159, but does not expect the adoption of
SFAS 159 to have a  material  impact  on its  consolidated  financial  position,
results of operations or cash flows.

Use of Estimates

     The  preparation  of financial  statements  in  conformity  with U.S.  GAAP
requires  management to make estimates and assumptions  that affect the reported
amounts  of assets and  liabilities  and  disclosure  of  contingent  assets and
liabilities as of the date of these consolidated financial statements as well as
the  reported  amount of revenues  and expenses  during this  reporting  period.
Actual results could differ from these estimates. Certain estimates such as fair
value  and  actuarial  assumptions  have a  significant  impact on the gains and
losses recorded on investments and balance of life insurance policy liabilities.


Note 2.   Discontinued Operations

     The $1.0 million loss on discontinued  operations recorded in 2006 resulted
from the  write-off of the $1.0 million of cash held in escrow which was part of
the proceeds from the sale of London Pacific  Advisors ("LPA") in June 2003 held
back to cover any of the Group's indemnity obligations. See Note 4 "Cash Held in
Escrow" below for further information.




                                       36
<PAGE>



                  BERKELEY TECHNOLOGY LIMITED AND SUBSIDIARIES

             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

Note 3.    Investments

Summary Cost and Fair Value Information

Fixed Maturity Securities

     An analysis of fixed maturity securities is as follows:

<TABLE>
<CAPTION>

                                                                           December 31,
                                 ----------------------------------------------------------------------------------------------
                                                      2006                                            2005
                                 ----------------------------------------------  ----------------------------------------------
                                               Gross       Gross     Estimated                  Gross       Gross    Estimated
                                 Amortized   Unrealized  Unrealized     Fair     Amortized   Unrealized  Unrealized     Fair
                                    Cost       Gains       Losses      Value        Cost       Gains       Losses      Value
                                 ----------  ----------  ----------  ----------  ----------  ----------  ----------  ----------
                                                                         (In thousands)
Available-for-Sale:
Non-U.S. corporate
<S>                              <C>         <C>         <C>         <C>         <C>         <C>          <C>         <C>
   debt securities.........      $    4,017  $        -  $       (6) $    4,011  $    8,500  $       38  $        -  $    8,538
Corporate debt securities..           5,004           -          (8)      4,996       5,309           -         (18)      5,291
                                 ----------  ----------  ----------  ----------  ----------  ----------  ----------  ----------
                                      9,021           -         (14)      9,007      13,809          38         (18)     13,829
                                 ----------  ----------  ----------  ----------  ----------  ----------  ----------  ----------
Held-to-Maturity:
Corporate debt securities..           3,009           -          (5)      3,004       7,011           -         (29)      6,982
                                 ----------  ----------  ----------  ----------  ----------  ----------  ----------  ----------
                                      3,009           -          (5)      3,004       7,011           -         (29)      6,982
                                 ----------  ----------  ----------  ----------  ----------  ----------  ----------  ----------
Total fixed maturity securities  $   12,030  $        -  $      (19) $   12,011  $   20,820  $       38  $      (47) $   20,811
                                 ----------  ----------  ----------  ----------  ----------  ----------  ----------  ----------
                                 ----------  ----------  ----------  ----------  ----------  ----------  ----------  ----------
</TABLE>

     As of December 31, 2006, there were no non-income  producing fixed maturity
securities for the twelve months preceding December 31, 2006.

Contractual Maturities

     The amortized cost and estimated fair value of fixed maturity securities as
of  December  31,  2005 by  contractual  maturity,  are  shown  below.  Expected
maturities may differ from  contractual  maturities as certain  issuers have the
right to call and certain borrowers have the right to prepay obligations without
penalty.
<TABLE>
<CAPTION>


                                                           Available-for-Sale       Held-to-Maturity
                                                         ----------------------  ----------------------
                                                                     Estimated               Estimated
                                                         Amortized      Fair     Amortized      Fair
                                                            Cost       Value        Cost        Value
                                                         ----------  ----------  ----------  ----------
                                                                        (In thousands)

<S>                                                      <C>         <C>         <C>         <C>
Due in one year or less.............................     $    9,021  $    9,007  $    3,009  $    3,004
Due after one year through five years...............              -           -           -           -
                                                         ----------  ----------  ----------  ----------
                                                         $    9,021  $    9,007  $    3,009  $    3,004
                                                         ----------  ----------  ----------  ----------
                                                         ----------  ----------  ----------  ----------
</TABLE>




                                       37
<PAGE>



                  BERKELEY TECHNOLOGY LIMITED AND SUBSIDIARIES

             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

Equity Securities

     Equity   securities  are  comprised  of   available-for-sale   and  trading
securities. An analysis of equity securities is as follows:
<TABLE>
<CAPTION>

                                                                           December 31,
                                 ----------------------------------------------------------------------------------------------
                                                      2006                                            2005
                                 ----------------------------------------------  ----------------------------------------------
                                               Gross       Gross     Estimated                  Gross       Gross    Estimated
                                             Unrealized  Unrealized     Fair                 Unrealized  Unrealized    Fair
                                    Cost       Gains       Losses      Value        Cost       Gains       Losses      Value
                                 ----------  ----------  ----------  ----------  ----------  ----------  ----------  ----------
                                                                         (In thousands)
Private corporate equity
<S>                              <C>         <C>         <C>         <C>         <C>         <C>         <C>         <C>
   securities..............      $      844  $        -  $        -  $      844  $      850  $        -  $        -  $      850
                                 ----------  ----------  ----------  ----------  ----------  ----------  ----------  ----------
Total available-for-sale
   equity securities.......             844           -           -         844         850           -           -         850

Trading securities.........               -           -           -           -         102           7         (25)         84
                                 ----------  ----------  ----------  ----------  ----------  ----------  ----------  ----------
Total equity securities....      $      844  $        -  $        -  $      844  $      952  $        7  $      (25) $      934
                                 ----------  ----------  ----------  ----------  ----------  ----------  ----------  ----------
                                 ----------  ----------  ----------  ----------  ----------  ----------  ----------  ----------
</TABLE>

     Trading securities are carried at fair value with changes in net unrealized
gains and losses of $18,000,  $17,000 and  $(12,373,000)  included in the income
and losses for the years ended December 31, 2006, 2005 and 2004, respectively.

Investment Concentration and Risk

     As of  December  31,  2006,  fixed  maturity  securities  held by the Group
included  investments  in British  Telecom  of  $3,017,000,  AOL Time  Warner of
$2,002,000,  General Mills of $2,000,000  and Cadbury  Schweppes of  $1,996,000.
These four corporate  issuers each  represented  more than 10% of  shareholders'
equity as of December  31,  2006.  However,  the General  Mills bond  matured on
February 15, 2007 and the Group received  repayment of principal in full and all
interest due on this bond. The remaining bonds will mature on or before July 16,
2007.

     As of  December  31,  2006,  the  Company's  Jersey  based  life  insurance
subsidiary,  LPAL,  owned 75% of the  Group's  $12.0  million in fixed  maturity
securities  and 100% of the Group's $0.8 million in  available-for-sale  private
equity securities.  LPAL is a regulated  insurance company,  and as such it must
meet  stringent   capital  adequacy   requirements  and  it  may  not  make  any
distributions  without the consent of LPAL's independent  actuary and the Jersey
Financial  Services  Commission  ("JFSC").  LPAL's investments are therefore not
currently  available to fund the operations or commitments of the Company or its
other subsidiaries.

     Fixed maturity securities  considered less than investment grade (excluding
split-rated  securities)  approximated  0.0% and 30.2% of total  fixed  maturity
securities as of December 31, 2006 and 2005, respectively.  The Group held $12.0
million in fixed maturity securities considered less than investment grade as of
December 31, 2005. These holdings were repaid in full at maturity in early 2006.

Net Unrealized Gains (Losses) on Available-for-Sale Securities

     Net unrealized  gains (losses) on fixed maturity  securities  classified as
available-for-sale  as of  December  31,  2006 and 2005  totaled  $(14,000)  and
$20,000, respectively. There were no related income taxes.

                                       38
<PAGE>


                  BERKELEY TECHNOLOGY LIMITED AND SUBSIDIARIES

             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

     There were no net  unrealized  losses on equity  securities  classified  as
available-for-sale as of December 31, 2006 or 2005.

     Changes in net unrealized gains and losses on available-for-sale securities
included in other  comprehensive  income for the years ended  December 31, 2004,
2005 and 2006 were as follows:
<TABLE>
<CAPTION>


                                                                                          Net Unrealized Gains (Losses)
                                                                                       -------------------------------------
                                                                                          Fixed
                                                                                        Maturity       Equity
                                                                                       Securities   Securities      Total
                                                                                       -----------  -----------  -----------
                                                                                                  (In thousands)

<S>                                                                                    <C>          <C>          <C>
Net unrealized losses on available-for-sale securities as of December 31, 2003         $       (10) $         -  $       (10)

Changes during the year ended December 31, 2004:
   Unrealized holding gains and losses on available-for-sale securities......                   64            -           64
   Reclassification adjustment for gains and losses included in net loss.....                  (18)           -          (18)
                                                                                       -----------  -----------  -----------
Net unrealized gains on available-for-sale securities as of December 31, 2004                   36            -           36

Changes during the year ended December 31, 2005:
   Unrealized holding gains and losses on available-for-sale securities......                  (44)           -          (44)
   Reclassification adjustment for gains and losses included in net loss.....                   28            -           28
                                                                                       -----------  -----------  -----------
Net unrealized gains on available-for-sale securities as of December 31, 2005          $        20  $         -  $        20

Changes during the year ended December 31, 2006:
   Unrealized holding gains and losses on available-for-sale securities......                  (14)           -          (14)
   Reclassification adjustment for gains and losses included in net loss.....                  (20)           -          (20)
                                                                                       -----------  -----------  -----------
Net unrealized losses on available-for-sale securities as of December 31, 2006         $       (14) $         -  $       (14)
                                                                                       -----------  -----------  -----------
                                                                                       -----------  -----------  -----------
</TABLE>

Net Investment Income

     The  details of  investment  income,  net of  investment  expenses,  are as
follows:
<TABLE>
<CAPTION>

                                                                                              Years Ended December 31,
                                                                                       -------------------------------------
                                                                                           2006        2005         2004
                                                                                       -----------  -----------  -----------
                                                                                                  (In thousands)

<S>                                                                                    <C>          <C>          <C>
Interest on fixed maturity securities........................................          $       881  $     1,217  $     1,131
Interest on cash and cash equivalents........................................                  324          347          268
                                                                                       -----------  -----------  -----------
Gross investment income......................................................                1,205        1,564        1,399
Investment expenses..........................................................                   (2)          (2)          (2)
                                                                                       -----------  -----------  -----------
                                                                                             1,203        1,562        1,397
Amounts credited on insurance policyholder accounts..........................                 (468)        (980)      (1,358)
                                                                                       -----------  -----------  -----------
Net investment income........................................................          $       735  $       582  $        39
                                                                                       -----------  -----------  -----------
                                                                                       -----------  -----------  -----------
</TABLE>

     Investment expenses included costs of investment administration,  primarily
custodial fees.

                                       39
<PAGE>

                  BERKELEY TECHNOLOGY LIMITED AND SUBSIDIARIES

             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

Realized Gains and Losses

     Information  about gross and net  realized  gains and losses on  securities
transactions is as follows:
<TABLE>
<CAPTION>

                                                                                               Years Ended December 31,
                                                                                       -------------------------------------
                                                                                           2006         2005        2004
                                                                                       -----------  -----------  -----------
                                                                                                  (In thousands)
Realized gains (losses) on securities transactions: Fixed maturities,
available-for-sale:
<S>                                                                                    <C>          <C>          <C>
   Gross gains...............................................................          $         -  $         -  $         -
   Gross losses .............................................................                   (2)           -            -
                                                                                       -----------  -----------  -----------
Net realized losses on fixed maturities, available-for-sale..................                   (2)           -            -
                                                                                       -----------  -----------  -----------
Equity securities, trading:
   Gross gains...............................................................                    6           22        8,219
   Gross losses..............................................................                    -          (65)        (265)
                                                                                       -----------  -----------  -----------
Net realized gains (losses) on equity securities, trading....................                    6          (43)       7,954
                                                                                       -----------  -----------  -----------
Equity securities, available-for-sale:
   Gross gains...............................................................                    -            -          121
   Gross losses..............................................................                   (6)           -       (3,375)
                                                                                       -----------  -----------  -----------
Net realized losses on equity securities, available-for-sale.................                   (6)           -       (3,254)
                                                                                       -----------  -----------  -----------
Net realized investment gains (losses) on securities transactions............          $        (2) $       (43) $     4,700
                                                                                       -----------  -----------  -----------
                                                                                       -----------  -----------  -----------
</TABLE>


     During 2004,  the Group's  management  determined  that one private  equity
investment  in a  technology  company was  other-than-temporarily  impaired  and
consequently  recorded  a  realized  loss of $3.4  million  in the  consolidated
statement  of  operations.  There were no such  impairments  recorded in 2005 or
2006.

     Subsequent  to  December  31,  2006,  the Company  received a $1.2  million
payment  representing  a partial  distribution  resulting  from the  settlements
achieved  in  the  WorldCom,  Inc.  securities  litigation.  LPAL  held  certain
WorldCom,  Inc.  publicly traded bonds which it sold at a loss in 2002. The $1.2
million payment will be recognized in the first quarter of 2007 in the Company's
consolidated  statement of operations as a realized gain, which reverses part of
the realized loss recorded in 2002. The Company expects to receive an additional
$0.4 million as a final distribution later in 2007. Since these payments are for
LPAL's account,  they are not available to fund the operations or commitments of
the Company or its other subsidiaries.


Note 4.    Cash Held in Escrow

     Cash held in escrow at December  31, 2005  consisted of $1.0 million of the
cash proceeds from the sale of LPA to SunGard Business Systems Inc.  ("SunGard")
on June 5, 2003  which  were held  back to cover  any of the  Group's  indemnity
obligations.  As disclosed in the Company's  2005 Annual Report on Form 10-K and
in its 2006 Quarterly  Reports on Form 10-Q, in February  2005,  SunGard filed a
lawsuit against the Company and certain of its subsidiaries alleging breaches of
representations  and  warranties  contained in the sale and purchase  agreement.
Subsequently,  in April 2005,  the Company filed a lawsuit  against  SunGard and
certain of its affiliates  accusing SunGard of wrongful conduct. In August 2006,
the Company and SunGard entered into a settlement  agreement  covering the above
actions.  All lawsuits  against each other were dismissed and the Company agreed
to forego the $1.0 million escrow  account,  including  accrued  interest on the
account.

                                       40
<PAGE>

                  BERKELEY TECHNOLOGY LIMITED AND SUBSIDIARIES

             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

Accordingly,  the $1.0  million of cash held in escrow (and  $56,000 of interest
earned on the escrow account) was written off as of June 30, 2006. The write-off
of the  $1.0  million  original  escrow  amount  has  been  shown  as a loss  on
discontinued operations, and the write-off of the $56,000 of interest earned has
been netted against investment income, in the Company's  consolidated  statement
of operations for 2006.


Note 5.    Property and Equipment

     Property and equipment are carried at cost and consisted of the following:
<TABLE>
<CAPTION>
                                                                                             December 31,
                                                                                       ------------------------
                                                                                          2006         2005
                                                                                       -----------  -----------
                                                                                             (In thousands)

<S>                                                                                    <C>          <C>
Property, equipment and leasehold improvements....................................     $       729  $       745
Accumulated depreciation..........................................................            (712)        (702)
                                                                                       -----------  -----------
Property and equipment, net.......................................................     $        17  $        43
                                                                                       -----------  -----------
                                                                                       -----------  -----------
</TABLE>


Note 6.    Other Assets

     An analysis of other assets is as follows:
<TABLE>
<CAPTION>
                                                                                             December 31,
                                                                                       ------------------------
                                                                                          2006         2005
                                                                                       -----------  -----------
                                                                                             (In thousands)

<S>                                                                                    <C>          <C>
Prepayments.......................................................................     $       195  $       202
Receivables:
   Due from broker................................................................               1            -
   Fee income receivable..........................................................             169           84
   Other receivables..............................................................              18           25
   Allowance for doubtful accounts................................................             (34)           -
                                                                                       -----------  -----------
Total other assets................................................................     $       349  $       311
                                                                                       -----------  -----------
                                                                                       -----------  -----------
</TABLE>


Note 7.    Life Insurance Policy Liabilities

     An analysis of life insurance policy liabilities is as follows:
<TABLE>
<CAPTION>
                                                                                             December 31,
                                                                                       ------------------------
                                                                                          2006         2005
                                                                                       -----------  -----------
                                                                                             (In thousands)

<S>                                                                                    <C>          <C>
Deferred annuities - policyholder contract deposits...............................     $     3,360  $    13,322
Other policy claims and benefits..................................................             280          251
                                                                                       -----------  -----------
                                                                                       $     3,640  $    13,573
                                                                                       -----------  -----------
                                                                                       -----------  -----------
</TABLE>

                                       41
<PAGE>


                  BERKELEY TECHNOLOGY LIMITED AND SUBSIDIARIES

             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

     The liability for future policy benefits and policyholder contract deposits
was determined based on the following assumptions:

Mortality Assumptions

     Assumed  mortality rates were based on standard tables commonly used in the
U.K. life insurance industry,  namely the AM80 table for male lives and the AF80
table for female lives.

Withdrawal Assumptions

     Withdrawal  charges on deferred  annuities  generally ranged from 1% to 7%,
grading to zero over a period of up to 7 years.


Note 8.   Statutory Financial Information and Restrictions

     LPAL is regulated by the JFSC and under Article 6 of the Insurance Business
(Jersey) Law 1996 is permitted to conduct long-term insurance business. The JFSC
requires LPAL to submit annual audited financial statements (prepared under U.S.
GAAP which is permitted),  and an audited annual filing in the format consistent
with that required by the Financial  Services  Authority in the United  Kingdom.
The  annual  filing  submitted  by LPAL to the  JFSC  must be  accompanied  by a
Certificate  from the  Appointed  Actuary  that  based on  sufficiently  prudent
assumptions,  assets are sufficient to cover all liabilities.  The annual filing
contains a report from the Appointed  Actuary on the matching of  investments to
liabilities.

     The JFSC sets out the conditions with which LPAL must comply and determines
the reporting  requirements  and the frequency of  reporting.  These  conditions
require that: (i) LPAL must hold, at all times,  approved  assets at least equal
to the long-term  insurance fund plus the required minimum solvency margin, (ii)
the margin of solvency must be the greater of (pound)50,000 or 2.5% of the value
of the long-term  business  fund, and (iii) assets equal to not less than 90% of
liabilities must be placed with approved independent custodians.  As of December
31, 2006, LPAL met all of these conditions.

     LPAL is also required under the insurance  laws to appoint an actuary.  The
actuary  must be  qualified  as  defined  under  Jersey law and is  required  to
supervise the long-term insurance fund. No transfers,  except in satisfaction of
long-term insurance business  liabilities,  including  dividends,  are permitted
from the long-term  insurance fund without  written consent from the actuary and
the JFSC.


Note 9.    Income Taxes

     The Group is subject to taxation on its income in all countries in which it
operates  based  upon the  taxable  income  arising  in each  country.  However,
realized  gains on certain  investments  are  exempt  from  Jersey and  Guernsey
taxation.  This and other tax benefits  which may not recur have reduced the tax
charge in 2006, 2005 and 2004.

     The  Group is  subject  to income  tax in  Jersey at a rate of 20%.  In the
United  States,  the Group is subject to both  federal and  California  taxes at
rates up to 34% and 8.84%, respectively.




                                       42
<PAGE>



                  BERKELEY TECHNOLOGY LIMITED AND SUBSIDIARIES

             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

     A  breakdown  of  the  Group's  book  loss  before   income  taxes  by  tax
jurisdiction follows:
<TABLE>
<CAPTION>

                                                                                               Years Ended December 31,
                                                                                       -------------------------------------
                                                                                           2006         2005        2004
                                                                                       -----------  -----------  -----------
                                                                                                    (In thousands)
Loss before income taxes:
<S>                                                                                    <C>          <C>          <C>
Jersey, Guernsey and United Kingdom..........................................          $    (1,410) $    (1,878) $   (11,049)
United States................................................................               (2,268)      (1,357)        (802)
                                                                                       -----------  -----------  -----------
Total loss before income taxes...............................................          $    (3,678) $    (3,235) $   (11,851)
                                                                                       -----------  -----------  -----------
                                                                                       -----------  -----------  -----------
</TABLE>

     The provision for income taxes differs from the amount computed by applying
the Jersey,  Channel Islands statutory income tax rate of 20% to the loss before
income taxes. The sources and tax effects of the difference are as follows:
<TABLE>
<CAPTION>

                                                                                               Years Ended December 31,
                                                                                       -------------------------------------
                                                                                           2006         2005        2004
                                                                                       -----------  -----------  -----------
                                                                                                    (In thousands)
Income tax benefit computed at Jersey statutory income tax
<S>                                                                                    <C>          <C>          <C>
   rate of 20%...............................................................          $      (736) $      (647) $    (2,370)
Realized and unrealized investment losses (gains) not subject to taxation
   in Jersey.................................................................                    -            5        1,412
Other losses not deductible in Jersey........................................                  268          359          619
Losses not deductible (income not taxable) in Guernsey.......................                  (20)         (22)         144
Tax benefit on losses at higher than 20% statutory Jersey rate:
   Losses in the U.S.........................................................                 (518)        (310)        (183)
Adjustment of prior years' provisions........................................                    -           11         (308)
Increase in valuation allowance..............................................                  972          582          941
Forfeiture of U.S. net operating loss carryforwards related to dissolved
   U.S. entities (1).........................................................                5,070            -            -
Decrease in valuation allowance related to dissolved U.S. entities (1).......               (5,070)           -            -
Other........................................................................                   39           34           35
                                                                                       -----------  -----------  -----------
Actual tax expense ..........................................................          $         5  $        12  $       290
                                                                                       -----------  -----------  -----------
                                                                                       -----------  -----------  -----------
<FN>
(1) Related to two of the Group's inactive U.S. subsidiaries which were dissolved in December 2006. These entities were owned
    by a non-U.S. subsidiary of the registrant and as a result of their dissolution, $4.4 million of federal net operating
    loss carryforward benefits and $0.7 million of state net operating loss carryforward benefits were forfeited.
</FN>
</TABLE>

     The components of the actual tax expense were as follows:
<TABLE>
<CAPTION>

                                                                                               Years Ended December 31,
                                                                                       -------------------------------------
                                                                                           2006         2005        2004
                                                                                       -----------  -----------  -----------
                                                                                                    (In thousands)

Jersey, Guernsey and United Kingdom:
<S>                                                                                    <C>          <C>          <C>
   Current tax expense.......................................................          $         -  $         -  $         -
   Deferred tax expense......................................................                    -            -            -

United States:
   Current tax expense ......................................................                    5           12          290
   Deferred tax expense......................................................                    -            -            -
                                                                                       -----------  -----------  -----------
Total actual tax expense ....................................................          $         5  $        12  $       290
                                                                                       -----------  -----------  -----------
                                                                                       -----------  -----------  -----------
</TABLE>


                                       43
<PAGE>

                  BERKELEY TECHNOLOGY LIMITED AND SUBSIDIARIES

             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

     The  Group   recognizes   assets  and  liabilities  for  the  deferred  tax
consequences  of  temporary  differences  between  the tax basis of  assets  and
liabilities  and their  reported  amounts  in the  financial  statements.  These
temporary  differences  will result in taxable or  deductible  amounts in future
years when the  reported  amounts of assets and  liabilities  are  recovered  or
settled.   The  deferred  income  tax  assets  are  reviewed   periodically  for
recoverability  and valuation  allowances  are provided as  necessary.  Deferred
income  tax  assets  and  liabilities  are  disclosed  net in  the  consolidated
financial  statements when they arise within the same tax  jurisdiction  and tax
return.

     The tax  effects of  temporary  differences  that give rise to  significant
portions of the deferred  income tax assets and deferred  income tax liabilities
are presented  below.  As of both December 31, 2006 and December 31, 2005,  full
valuation  allowances  were provided on the net deferred tax assets of both U.S.
tax groups due to the uncertainty of generating future taxable income or capital
gains to benefit from the deferred tax assets.
<TABLE>
<CAPTION>


                                                                                              December 31,
                                                                                       ------------------------
                                                                                          2006         2005
                                                                                       -----------  -----------
                                                                                            (In  thousands)
U.S. subsidiaries:

<S>                                                                                    <C>          <C>
Deferred income tax assets:
Net operating loss carryforwards..................................................     $     5,543  $     9,645
Capital loss carryforwards........................................................          67,245       67,283
Unrealized losses on investments..................................................               -            8
Deferred compensation.............................................................               4            4
Bad debts.........................................................................              14            -
Other assets......................................................................               2            2
Valuation allowance...............................................................         (72,807)     (76,905)
                                                                                       -----------  -----------
Deferred income tax assets, net of valuation allowance............................               1           37

Deferred income tax liabilities:
Deferred capital gains............................................................               -          (36)
Depreciation, amortization and other..............................................              (1)          (1)
                                                                                       -----------  -----------
                                                                                                (1)         (37)
                                                                                       -----------  -----------
Net deferred income tax assets - U.S. subsidiaries................................     $         -  $         -
                                                                                       -----------  -----------
                                                                                       -----------  -----------
</TABLE>


     As of December 31, 2006, the Group's U.S. subsidiaries have pre-tax federal
net operating loss  carryforwards  of  approximately  $13.4 million  expiring as
follows:  approximately  $1.3 million in 2011, and  approximately  $12.1 million
from  2020 to 2026.  These  subsidiaries  have  California  net  operating  loss
carryforwards  of  approximately  $10.9  million  expiring from 2012 to 2016. In
addition,  these  subsidiaries have federal capital loss carryforwards of $157.2
million ($155.9 million for California  purposes) that expire in 2007. The Group
has recorded a full valuation allowance for the deferred tax assets arising from
these  carryforward  amounts as of December 31, 2006, due to the  uncertainty of
generating  future  taxable income or capital gains to benefit from the deferred
tax assets.


Note 10.    Shareholders' Equity

     The Company has authorized  86,400,000  Ordinary Shares with a par value of
$0.05 per  share.  As of  December  31,  2006 and 2005,  there  were  64,439,073
Ordinary Shares issued and outstanding.

                                       44
<PAGE>



                  BERKELEY TECHNOLOGY LIMITED AND SUBSIDIARIES

             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

     No dividends were declared and paid in 2004, 2005 or 2006.

     Accumulated other  comprehensive  loss consists of two components,  foreign
currency  translation  adjustments  and  net  unrealized  gains  and  losses  on
available-for-sale   securities.   Accumulated   foreign  currency   translation
adjustments were $(404,000),  $(383,000) and $(338,000) as of December 31, 2006,
2005  and  2004,   respectively.   The  net   unrealized   gains   (losses)   on
available-for-sale  securities  after  deferred  income  taxes  were  $(14,000),
$20,000 and $36,000 as of December 31, 2006, 2005 and 2004, respectively.

     The Group  has two share  incentive  plans as  described  in Note 13 "Share
Incentive  Plans" below.  Under the terms of these plans,  shares of the Company
may be purchased in the open market and held in trust. These shares are owned by
the employee benefit trusts, which are subsidiaries of the Company for financial
reporting purposes.

     Changes  in the  number of shares  held by The  London  Pacific  Group 1990
Employee  Share Option Trust  ("ESOT") and the Agent Loyalty  Opportunity  Trust
("ALOT") were as follows:
<TABLE>
<CAPTION>

                                                                    Years Ended December 31,
                                             ----------------------------------------------------------------------
                                                      2006                    2005                    2004
                                             ----------------------  ----------------------  ----------------------
                                                ESOT        ALOT        ESOT        ALOT        ESOT        ALOT
                                             ----------  ----------  ----------  ----------  ----------  ----------
                                                                       (In thousands)

<S>                                           <C>         <C>         <C>         <C>         <C>         <C>
Shares held as of January 1...........           13,084         438      13,247         438      13,247         438
Purchased.............................                -           -           -           -           -           -
Exercised.............................                -           -        (163)          -           -           -
                                             ----------  ----------  ----------  ----------  ----------  ----------
Shares held as of December 31.........           13,084(1)      438      13,084(1)      438      13,247(1)      438
                                             ----------  ----------  ----------  ----------  ----------  ----------
                                             ----------  ----------  ----------  ----------  ----------  ----------
<FN>
(1) 834,000 shares are held in ADR form.
</FN>
</TABLE>

Warrants

     On November 11, 2002,  the Company  agreed to grant  1,933,172  warrants to
subscribe  for the Company's  Ordinary  Shares to Bank of Scotland in connection
with the extension of the Group's  credit  facility  (which was fully repaid and
terminated  in June 2003).  The  warrants  were granted on February 14, 2003 and
have an  exercise  price of  (pound)0.1143  (based on the average of the closing
prices of the  Ordinary  Shares  over the  trading  days from  November  1, 2002
through  November  11,  2002),  which  was  higher  than  the  market  price  of
(pound)0.09  on November 11, 2002.  These  warrants are  exercisable at any time
prior to February 14, 2010 and their fair value was  determined  to be $251,125,
based on a risk-free  rate of 2.80%,  volatility of 179% and a dividend yield of
zero. The Company  recognized  $30,625 of expense  relating to these warrants in
2002.  The balance of $220,500 was  recognized  as an expense in 2003,  with the
corresponding entries to additional paid-in capital.


Note 11.    Commitments and Contingencies

Lease Commitments

     The Group leases office space under  operating  leases.  Total rent expense
under these  operating  leases was $207,000 (net of sublease income of $46,000),
$230,000  and $288,000  for the years ended  December  31, 2006,  2005 and 2004,
respectively. The Group had no capital leases as of December 31, 2006.

                                       45
<PAGE>


                  BERKELEY TECHNOLOGY LIMITED AND SUBSIDIARIES

             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

     Future minimum lease  payments  required  under  non-cancellable  operating
leases with terms of one year or more, as of December 31, 2006, were as follows:
<TABLE>
<CAPTION>

                                                                                                          Operating
                                                                                                           Leases(1)
                                                                                                       ------------
                                                                                                      (In thousands)

<C>                                                                                                           <C>
2007...............................................................................................        $    285
2008...............................................................................................             259
2009...............................................................................................             131
2010...............................................................................................              66
                                                                                                       ------------
Total..............................................................................................        $    741
                                                                                                       ------------
                                                                                                       ------------
<FN>
(1) Includes commitments related to the Group's Jersey office lease which expires in September 2010. The Group entered
    into a sublease of its Jersey office during 2006. Expected future sublease income from 2007 through 2010 is $296,000.
    A liability of $158,000 remains recorded on the Company's consolidated balance sheet as of December 31, 2006,
    representing the loss on the sublease from 2007 through 2010.
</FN>
</TABLE>

     Approximately  64% of the Jersey office lease  commitments are covered by a
sublease to a third party.

Guarantees

     In November  2002, the FASB issued FASB  Interpretation  No. 45 ("FIN 45"),
"Guarantor's  Accounting and Disclosure  Requirements for Guarantees,  Including
Indirect  Guarantees  of  Indebtedness  of  Others - an  interpretation  of FASB
Statements No. 5, 57 and 107 and rescission of FASB  Interpretation No. 34." The
following  is a  summary  of the  Company's  agreements  that  the  Company  has
determined are within the scope of FIN 45.

     Under its Memorandum and Articles of Association, the Company has agreed to
indemnify its officers and directors for certain events or  occurrences  arising
as a result of the officer or  director  serving in such  capacity.  The maximum
potential  amount of future payments the Company could be required to make under
these  indemnification  agreements is unlimited.  However, the Company maintains
directors and officers  liability  insurance that limits the Company's  exposure
and enables it to recover a portion of any future  amounts  paid. As a result of
its insurance  coverage,  the Company believes the estimated fair value of these
indemnification  agreements is minimal and has no liabilities recorded for these
agreements as of December 31, 2006.

     The Company  enters into  indemnification  provisions  under its agreements
with other companies in its ordinary course of business, typically with business
partners,  clients and landlords.  Under these provisions, the Company generally
indemnifies  and holds  harmless the  indemnified  party for losses  suffered or
incurred by the indemnified party as a result of the Company's activities. These
indemnification   provisions  sometimes  include  indemnifications  relating  to
representations made by the Company with regard to intellectual property rights.
These indemnification provisions generally survive termination of the underlying
agreement.  The maximum potential amount of future payments the Company could be
required  to make under  these  indemnification  provisions  is  unlimited.  The
Company  believes  the  estimated  fair value of these  agreements  is  minimal.
Accordingly,  the Company has no liabilities recorded for these agreements as of
December 31, 2006.

                                       46
<PAGE>



                  BERKELEY TECHNOLOGY LIMITED AND SUBSIDIARIES

             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

Note 12.   Fair Value of Financial Instruments

     Substantially  all financial  instruments  used in the Group's  trading and
investing  activities are carried at fair value or amounts that approximate fair
value.  Fair value is based  generally on listed market prices or  broker-dealer
price quotations. To the extent that prices are not readily available, estimated
fair value is based on valuation  methodologies  performed by management,  which
evaluate company, industry,  geographical and overall equity market factors that
would influence the security's fair value.

     With  the  exception  of  the  fixed  maturity  securities   classified  as
held-to-maturity,  which are held at amortized  cost, the carrying values of the
Group's financial assets are equal to estimated fair value.

     Considerable  judgment  is  required  in  interpreting  market data used to
develop the estimates of fair value. Accordingly, the estimates presented herein
are not  necessarily  indicative  of the  amounts  that could be  realized  in a
current market exchange.  The use of different market  assumptions or estimation
methodologies may have a material effect on the estimated fair value amounts.

     The  carrying  values and  estimated  fair values of the Group's  financial
instruments were as follows:
<TABLE>
<CAPTION>

                                                                                December 31,
                                                             --------------------------------------------------
                                                                       2006                      2005
                                                             ------------------------  ------------------------
                                                              Carrying     Estimated    Carrying     Estimated
                                                                Value      Fair Value    Value       Fair Value
                                                             -----------  -----------  -----------  -----------
                                                                               (In thousands)
Financial assets:
<S>                                                          <C>          <C>          <C>          <C>
Cash and cash equivalents........................            $     6,707  $     6,707  $    10,039  $    10,039
Cash held in escrow..............................                      -            -        1,027        1,027
Investments:
   Fixed maturities:
       Available-for-sale........................                  9,007        9,007       13,829       13,829
       Held-to-maturity..........................                  3,009        3,004        7,011        6,982
   Equity securities:
       Trading...................................                      -            -           84           84
       Available-for-sale........................                    844          844          850          850

Financial liabilities:
Life insurance policy liabilities................                  3,640        3,603       13,573       13,432

</TABLE>

     The following  methods and assumptions were used by the Group in estimating
the fair value of the financial instruments presented:

Cash, Cash Equivalents and Cash Held in Escrow: The carrying amounts reported in
the consolidated balance sheet for these instruments approximated fair value.

Fixed  Maturity  Securities:  Fair values for  actively  traded  fixed  maturity
securities classified as available-for-sale  and held-to-maturity were generally
based upon  quoted  market  prices.  Fair  values  for  private  corporate  debt
securities  were based on the results of  valuation  methodologies  performed by
management.

Equity Securities:

a) Trading Securities:  Fair values for equity securities  classified as trading
were based on quoted market prices.

                                       47
<PAGE>


                  BERKELEY TECHNOLOGY LIMITED AND SUBSIDIARIES

             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

b) Available-for-Sale  Securities:  Fair values for equity securities classified
as  available-for-sale  were based upon the  results of  management's  valuation
methodologies, including analysis of company, industry, geographical and overall
equity market factors which influence fair value.

Life Insurance  Policy  Liabilities:  The balance sheet caption "life  insurance
policy liabilities" includes investment-type insurance contracts (i.e., deferred
annuities). The estimated fair values of deferred annuity policies were based on
their account values after deduction of surrender charges.


Note 13.    Share Incentive Plans

     The Group has two share incentive plans for employees, agents and directors
of  Berkeley  Technology  Limited  and its  subsidiaries  that  provide  for the
issuance of share options and stock appreciation rights.

Employee Share Option Trust

     The London Pacific Group 1990 Employee Share Option Trust  ("ESOT"),  which
was approved by shareholders in 1990, provides for the granting of share options
to employees and directors.  The  objectives of this plan include  retaining the
best personnel and providing for additional performance incentives.  Options are
generally  granted with an exercise  price equal to the fair market value of the
underlying  shares at the date of grant.  Such grants to employees are generally
exercisable in four equal annual  installments  beginning one year from the date
of grant, subject to employment continuation, and expire seven or ten years from
the date of grant.  Such  grants to  directors  are fully  vested on the date of
grant and expire seven or ten years from the date of the grant.

     The ESOT may purchase shares of the Company in the open market, funded each
year by a loan from the Company or its  subsidiaries.  While the loan is limited
up to an annual maximum of 5% of the  consolidated  net assets of the Group, the
ESOT is not limited as to the number of options that may be granted. The loan is
secured by the shares held in the trust,  is interest free, and is eliminated in
the consolidated  financial  statements.  The ESOT has waived its entitlement to
dividends on any shares held. See Note 10  "Shareholders'  Equity" for a summary
of the share activity within the ESOT.

     Share option  activity for the years ended December 31, 2006, 2005 and 2004
was as follows:
<TABLE>
<CAPTION>
                                                           2006                   2005                   2004
                                                   --------------------   --------------------   --------------------
                                                              Weighted-              Weighted-              Weighted-
                                                    Number     Average     Number     Average      Number    Average
                                                      of      Exercise       of      Exercise       of      Exercise
(Options in thousands)                              Options     Price      Options    Price       Options     Price
                                                   ---------  ---------   ---------  ---------   ---------  ---------

<S>                                                <C>        <C>         <C>        <C>         <C>        <C>
Outstanding as of January 1......................      6,285  $    2.77       6,940  $    3.00       8,945  $    3.10
Granted..........................................          -          -       1,000       0.15           -          -
Exercised........................................          -          -        (163)      0.11           -          -
Forfeited........................................          -          -        (808)      1.46      (2,005)      3.46
Expired..........................................     (1,060)      3.66        (684)      3.39           -          -
                                                   ---------  ---------   ---------  ---------   ---------  ---------
Outstanding as of December 31....................      5,225  $    2.59       6,285  $    2.77       6,940  $    3.00
                                                   ---------  ---------   ---------  ---------   ---------  ---------
                                                   ---------  ---------   ---------  ---------   ---------  ---------

</TABLE>

                                       48
<PAGE>



                  BERKELEY TECHNOLOGY LIMITED AND SUBSIDIARIES

             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

<TABLE>
<CAPTION>
                                                           2006                   2005                   2004
                                                   --------------------   --------------------   --------------------
                                                              Weighted-              Weighted-              Weighted-
                                                    Number     Average     Number     Average      Number    Average
                                                      of      Exercise       of      Exercise       of      Exercise
(Options in thousands)                              Options     Price      Options    Price       Options     Price
                                                   ---------  ---------   ---------  ---------   ---------  ---------

<S>                                                <C>        <C>         <C>        <C>         <C>        <C>
Options exercisable as of December 31............      4,475  $    3.00       4,881  $    3.52       5,685  $    3.57
                                                   ---------  ---------   ---------  ---------   ---------  ---------
                                                   ---------  ---------   ---------  ---------   ---------  ---------
</TABLE>

     See Note 1 "Summary of  Significant  Accounting  Policies" for  information
regarding the Group's accounting for share based compensation.

     Summary  information  about the Group's  share  options  outstanding  as of
December 31, 2006 is as follows:

<TABLE>
<CAPTION>

                                    Options Outstanding(1)                               Options Exercisable(1)
                      -------------------------------------------------            --------------------------------
                                            Weighted-
                                             Average         Weighted-                                   Weighted-
  Range of                                  Remaining         Average                                     Average
  Exercise                  Number         Contractual       Exercise                   Number           Exercise
   Prices                 Outstanding         Life             Price                  Exercisable         Price
------------          ---------------     -----------      ------------            ---------------     ------------
                        (In thousands)        (Years)                               (In thousands)

<S>                            <C>              <C>              <C>                        <C>              <C>
  $0.10 - $0.50                 2,915            6.52             $0.27                      2,165            $0.31
   0.51 -  5.00                   220            4.18              2.46                        220             2.46
   5.01 - 10.00                 2,030            4.38              5.41                      2,030             5.41
  10.01 - 21.00                    60            3.68             21.00                         60            21.00
---------------       ---------------     -----------      ------------            ---------------     ------------
  $0.10 -$21.00                 5,225            5.56             $2.59                      4,475            $3.00
---------------       ---------------     -----------      ------------            ---------------     ------------
---------------       ---------------     -----------      ------------            ---------------     ------------
<FN>
(1) The intrinsic value of all options  outstanding is zero as all options were granted with an exercise price equal to the fair
    market value of the underlying shares at the date of grant.
</FN>
</TABLE>

Agent Loyalty Opportunity Trust

     The Agent  Loyalty  Opportunity  Trust  ("ALOT")  was  established  in 1997
(without   shareholders'   approval)  to  provide  for  the  granting  of  stock
appreciation  rights ("SARs") on the Company's  Ordinary Shares to agents of the
Company's  former U.S. life insurance  subsidiary.  Each award unit entitled the
holder  to cash  compensation  equal to the  difference  between  the  Company's
prevailing  share price and the exercise price. The award units were exercisable
in four equal annual  installments  commencing on the first  anniversary  of the
date of grant  and were  forfeited  upon  termination  of the  agency  contract.
Vesting of the award in any given year was also  contingent on the holder of the
award surpassing a predetermined  benchmark tied to sales and  persistency.  The
SARs expired seven years from the date of grant.  The 79,000 awards  outstanding
at December 31, 2005 expired in April 2006.

     The ALOT may purchase Ordinary Shares in the open market,  funded by a loan
from a Group subsidiary. The loan is secured by the shares held in the trust and
bears  interest  based upon the  trust's  net income  before  interest  for each
financial period.  The trust receives dividends on all Ordinary Shares held. The
loan,  interest  income and dividend  income are eliminated in the  consolidated
financial  statements.  See Note 10 "Shareholders'  Equity" for a summary of the
share activity within the ALOT.



                                       49
<PAGE>



                  BERKELEY TECHNOLOGY LIMITED AND SUBSIDIARIES

             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

     SAR  activity for the years ended  December 31, 2006,  2005 and 2004 was as
follows:
<TABLE>
<CAPTION>

                                                           2006                   2005                   2004
                                                   --------------------   --------------------   --------------------
                                                              Weighted-              Weighted-              Weighted-
                                                    Number     Average     Number     Average     Number    Average
                                                   of Award   Exercise    of Award   Exercise    of Award   Exercise
(Award units in thousands)                           Units      Price       Units      Price       Units      Price
                                                   ---------  ---------   ---------  ---------   ---------  ---------

<S>                                                <C>        <C>         <C>        <C>         <C>        <C>
Outstanding as of January 1......................         79      $5.19         290      $3.85         388      $3.73
Granted..........................................          -          -           -          -           -          -
Exercised........................................          -          -           -          -           -          -
Forfeited........................................          -          -           -          -           -          -
Expired..........................................        (79)     $5.19        (211)      3.35         (98)      3.35
                                                   ---------  ---------   ---------  ---------   ---------  ---------
Outstanding as of December 31....................          -          -          79      $5.19         290      $3.85
                                                   ---------  ---------   ---------  ---------   ---------  ---------
                                                   ---------  ---------   ---------  ---------   ---------  ---------

Award units exercisable as of December 31........          -          -          42      $5.19         187      $3.76
                                                   ---------  ---------   ---------  ---------   ---------  ---------
                                                   ---------  ---------   ---------  ---------   ---------  ---------
</TABLE>


Note 14.     Pension Plans

Jersey Plan

     Until early 2004, the Group provided a defined benefit pension plan for its
Jersey, Channel Islands, employees. This plan was terminated and the plan assets
were  distributed to the  participants  of the plan on a pro rata basis to their
accrued  benefit  entitlements  under the plan.  The plan was dissolved in March
2005.  The Group does not have any  ongoing  liabilities  in respect of the plan
following its dissolution.

     The Group made  contributions  of $0, $0 and  $15,000 to the trust in 2006,
2005 and 2004, respectively.

U.K. Plan

     The Group  provides  a defined  contribution  plan for its U.K.  employees.
There is  currently  one  participant  in the plan.  The  Group  has no  ongoing
liabilities  associated with the plan.  Contributions of $161,000,  $154,000 and
$49,000 were made by the Group to the plan in 2006, 2005 and 2004, respectively.
Of the 2006 and 2005 contributions,  $111,000 and $105,000,  respectively,  were
offset by a salary waiver.


Note 15.    Earnings Per Share and ADS

     Earnings  (loss) per ADS are  equivalent to ten times  earnings  (loss) per
Ordinary Share, following the one-for-ten reverse split in June 2002.

     A  reconciliation  of the  numerators  and  denominators  for the basic and
diluted  earnings (loss) per share  calculations in accordance with Statement of
Financial Accounting Standard No. 128 ("SFAS 128"),  "Earnings per Share," is as
follows:


                                       50
<PAGE>



                  BERKELEY TECHNOLOGY LIMITED AND SUBSIDIARIES

             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
<TABLE>
<CAPTION>
                                                                                  Years Ended December 31,
                                                                          -------------------------------------
                                                                             2006         2005          2004
                                                                          -----------  -----------  -----------
                                                                         (In thousands, except share, per share
                                                                                      and ADS amounts)

<S>                                                                        <C>            <C>            <C>
Loss from continuing operations........................................   $    (2,683) $    (3,247) $   (12,141)
Loss on discontinued operations........................................        (1,000)           -            -
                                                                          -----------  -----------  -----------
Net loss...............................................................   $    (3,683) $    (3,247) $   (12,141)
                                                                          -----------  -----------  -----------
                                                                          -----------  -----------  -----------

Basic loss per share and ADS:
Weighted-average number of Ordinary Shares outstanding,
   excluding shares held by the employee benefit trusts................    50,916,692   50,916,692   50,754,192
                                                                          -----------  -----------  -----------

Basic loss per share:
Continuing operations..................................................   $     (0.05) $     (0.06) $     (0.24)
Discontinued operations................................................         (0.02)           -            -
                                                                          -----------  -----------  -----------
                                                                          $     (0.07) $     (0.06) $     (0.24)
                                                                          -----------  -----------  -----------
                                                                          -----------  -----------  -----------
Basic loss per ADS:
Continuing operations..................................................   $     (0.53) $     (0.64) $     (2.39)
Discontinued operations................................................   $     (0.20)           -            -
                                                                          -----------  -----------  -----------
                                                                          $     (0.73) $     (0.64) $     (2.39)
                                                                          -----------  -----------  -----------
                                                                          -----------  -----------  -----------

Diluted loss per share and ADS:
Weighted-average number of Ordinary Shares outstanding,
   excluding shares held by the employee benefit trusts................    50,916,692   50,916,692   50,754,192
Effect of dilutive securities (warrants and employee share options) ...             -            -            -
                                                                          -----------  -----------  -----------
Weighted-average number of Ordinary Shares used in diluted
   earnings per share calculations.....................................    50,916,692   50,916,692   50,754,192
                                                                          -----------  -----------  -----------
                                                                          -----------  -----------  -----------
Diluted loss per share:
Continuing operations..................................................   $     (0.05) $     (0.06) $     (0.24)
Discontinued operations................................................         (0.02)           -            -
                                                                          -----------  -----------  -----------
                                                                          $     (0.07) $     (0.06) $     (0.24)
                                                                          -----------  -----------  -----------
                                                                          -----------  -----------  -----------
Diluted loss per ADS:
Continuing operations..................................................   $     (0.53) $     (0.64) $     (2.39)
Discontinued operations................................................   $     (0.20)           -            -
                                                                          -----------  -----------  -----------
                                                                          $     (0.73) $     (0.64) $     (2.39)
                                                                          -----------  -----------  -----------
                                                                          -----------  -----------  -----------
</TABLE>

     As the Company  recorded a net loss for the years ended  December 31, 2006,
2005 and 2004, the calculations of diluted earnings per share for these years do
not include  potentially  dilutive employee share options and warrants issued to
the Bank of Scotland as they are  anti-dilutive  and,  if  included,  would have
resulted in a reduction  of the net loss per share.  If the Company had reported
net income for the years ended  December  31, 2006,  2005 and 2004,  there would
have been an additional 8,125, 66,397 and 650,913 shares, respectively, included
in the  calculations  of diluted  earnings per share for these  years.

                                       51
<PAGE>


                  BERKELEY TECHNOLOGY LIMITED AND SUBSIDIARIES

             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

Note 16.    Transactions with Related Parties

     The Group paid legal fees of  approximately  $1,000,  $60,000  and  $36,000
during  2006,  2005 and  2004,  respectively,  to a law firm of which one of its
directors, Victor A. Hebert, is a member.


Note 17.    Business Segment and Geographical Information

     The Company's reportable operating segments are classified according to its
remaining  businesses of life insurance and annuities,  and venture  capital and
consulting.

     Intercompany  transfers between reportable operating segments are accounted
for at prices  which are designed to be  representative  of  unaffiliated  third
party transactions.

     Summary  revenue and  investment  gain  (loss)  information  by  geographic
segment,  based on the domicile of the Group company  generating those revenues,
is as follows:
<TABLE>
<CAPTION>

                                                                                  Years Ended December 31,
                                                                          -------------------------------------
                                                                             2006         2005         2004
                                                                          -----------  -----------  -----------
                                                                                     (In  thousands)

<S>                                                                       <C>          <C>          <C>
Jersey.................................................................   $       968  $     1,215  $    (5,715)
Guernsey...............................................................           103          109         (720)
United States..........................................................           872          769          676
                                                                          -----------  -----------  -----------
Consolidated revenues and net investment gains (losses)
    for continuing operations..........................................   $     1,943  $     2,093  $    (5,759)
                                                                          -----------  -----------  -----------
                                                                          -----------  -----------  -----------
</TABLE>

     Total assets by geographic segment were as follows:
<TABLE>
<CAPTION>

                                                                                             December 31,
                                                                                       ------------------------
                                                                                          2006         2005
                                                                                       -----------  -----------
                                                                                            (In  thousands)

<S>                                                                                    <C>          <C>
Jersey.............................................................................    $    15,203  $    25,066
Guernsey...........................................................................          2,082        3,107
United States......................................................................          2,952        5,630
                                                                                       -----------  -----------
Consolidated total assets .........................................................    $    20,237  $    33,803
                                                                                       -----------  -----------
                                                                                       -----------  -----------
</TABLE>



                                       52
<PAGE>



                  BERKELEY TECHNOLOGY LIMITED AND SUBSIDIARIES

             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

     Revenues and income (loss) before income taxes for the Company's reportable
operating  segments  included in continuing  operations,  based on  management's
internal reporting structure, were as follows:
<TABLE>
<CAPTION>

                                                                                  Years Ended December 31,
                                                                          -------------------------------------
                                                                             2006         2005          2004
                                                                          -----------  -----------  -----------
                                                                                      (In thousands)
Revenues:
<S>                                                                       <C>          <C>          <C>
Venture capital and consulting.........................................   $       723  $       535  $      (125)
Life insurance and annuities ..........................................           937        1,192       (5,759)
                                                                          -----------  -----------  -----------
                                                                                1,660        1,727       (5,884)
Reconciliation of segment amounts to consolidated amounts:
Interest and other fee income..........................................           283          366          125
                                                                          -----------  -----------  -----------
Consolidated revenues and net investment gains and losses
    for continuing operations..........................................   $     1,943  $     2,093  $    (5,759)
                                                                          -----------  -----------  -----------
                                                                          -----------  -----------  -----------


Loss from continuing operations before income tax expense:
Venture capital and consulting.........................................   $      (403) $      (584) $    (1,365)
Life insurance and annuities...........................................          (221)        (701)      (8,091)
                                                                          -----------  -----------  -----------
                                                                                 (624)      (1,285)      (9,456)
Reconciliation of segment amounts to consolidated amounts:
Interest and other fee income..........................................           283          366          125
Corporate expenses.....................................................        (2,336)      (2,312)      (2,415)
Interest expense.......................................................            (1)          (4)        (105)
                                                                          -----------  -----------  -----------
Consolidated loss from continuing operations
    before income tax expense..........................................   $    (2,678) $    (3,235) $   (11,851)
                                                                          -----------  -----------  -----------
                                                                          -----------  -----------  -----------
</TABLE>


     Assets attributable to each of the Company's reportable operating segments,
based on management's reporting structure, were as follows:
<TABLE>
<CAPTION>

                                                                                             December 31,
                                                                                       ------------------------
                                                                                          2006         2005
                                                                                       -----------  -----------
                                                                                            (In  thousands)
Assets:
<S>                                                                                    <C>            <C>
Venture capital and consulting.....................................................    $         -  $        90
Life insurance and annuities.......................................................         14,518       24,720
Corporate and other................................................................          5,719        8,993
                                                                                       -----------  -----------
Consolidated total assets..........................................................    $    20,237  $    33,803
                                                                                       -----------  -----------
                                                                                       -----------  -----------
</TABLE>


                                       53
<PAGE>




                  BERKELEY TECHNOLOGY LIMITED AND SUBSIDIARIES

             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

Note 18.    Selected Quarterly Financial Information (Unaudited)

     Unaudited quarterly financial  information (in thousands,  except per share
and ADS amounts) is as follows:
<TABLE>
<CAPTION>
                                                                                          2006
                                                             ---------------------------------------------------------------
                                                                First       Second        Third       Fourth        Full
                                                               Quarter      Quarter      Quarter      Quarter       Year
                                                             -----------  -----------  -----------  -----------  -----------
Continuing operations:
<S>                                                          <C>          <C>          <C>          <C>          <C>
Revenues including net investment gains (losses)........     $       565  $       413  $       457  $       508  $     1,943
Loss before income tax expense..........................            (721)      (1,018)        (558)        (381)      (2,678)
Net loss................................................            (726)      (1,018)        (558)        (381)      (2,683)

Discontinued operations:
Loss, net of income tax expense of $0...................               -       (1,000)           -            -       (1,000)

Total continuing and discontinued operations:
Net loss................................................            (726)      (2,018)        (558)        (381)      (3,683)


Basic and diluted loss per share:
Continuing operations...................................     $     (0.01) $     (0.02) $     (0.01) $     (0.01) $     (0.05)
Discontinued operations.................................               -        (0.02)           -            -        (0.02)
                                                             -----------  -----------  -----------  -----------  -----------
                                                             $     (0.01) $     (0.04) $     (0.01) $     (0.01) $     (0.07)
                                                             -----------  -----------  -----------  -----------  -----------
                                                             -----------  -----------  -----------  -----------  -----------
Basic and diluted loss per ADS:
Continuing operations...................................     $     (0.14) $     (0.20) $     (0.11) $     (0.07) $     (0.53)
Discontinued operations.................................               -        (0.20)           -            -        (0.20)
                                                             -----------  -----------  -----------  -----------  -----------
                                                             $     (0.14) $     (0.40) $     (0.11) $     (0.07) $     (0.73)
                                                             -----------  -----------  -----------  -----------  -----------
                                                             -----------  -----------  -----------  -----------  -----------
</TABLE>

                                       54
<PAGE>



                  BERKELEY TECHNOLOGY LIMITED AND SUBSIDIARIES

             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
<TABLE>
<CAPTION>
                                                                                          2005
                                                             ---------------------------------------------------------------
                                                                First       Second        Third       Fourth        Full
                                                               Quarter      Quarter      Quarter      Quarter       Year
                                                             -----------  -----------  -----------  -----------  -----------
Continuing operations:
<S>                                                          <C>          <C>          <C>          <C>          <C>
Revenues including net investment gains (losses)........     $       475  $       601  $       505  $       512  $     2,093
Loss before income taxes................................          (1,154)        (677)        (698)        (706)      (3,235)
Net loss................................................          (1,159)        (677)        (698)        (713)      (3,247)

Basic and diluted loss per share:
Continuing operations...................................     $     (0.02) $     (0.01) $     (0.01) $     (0.01) $     (0.06)
Discontinued operations.................................               -            -            -            -            -
                                                             -----------  -----------  -----------  -----------  -----------
                                                             $     (0.02) $     (0.01) $     (0.01) $     (0.01) $     (0.06)
                                                             -----------  -----------  -----------  -----------  -----------
                                                             -----------  -----------  -----------  -----------  -----------
Basic and diluted loss per ADS:
Continuing operations...................................     $     (0.23) $     (0.13) $     (0.14) $     (0.14) $     (0.64)
Discontinued operations.................................               -            -            -            -            -
                                                             -----------  -----------  -----------  -----------  -----------
                                                             $     (0.23) $     (0.13) $     (0.14) $     (0.14) $     (0.64)
                                                             -----------  -----------  -----------  -----------  -----------
                                                             -----------  -----------  -----------  -----------  -----------
</TABLE>


     Due to the  method  required  by SFAS 128 to  calculate  per  share and ADS
amounts, the quarterly per share and ADS amounts do not necessarily total to the
full year per share and ADS amounts.


                                       55
<PAGE>


Item 9.    CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND
           FINANCIAL DISCLOSURE

     None.


Item 9A.     CONTROLS AND PROCEDURES

     We maintain  disclosure  controls  and  procedures  designed to ensure that
information  required  to be  disclosed  in our  filings  under  the  Securities
Exchange  Act of 1934,  as  amended,  is  recorded,  processed,  summarized  and
reported  within the periods  specified in the rules and forms of the SEC.  Such
information is accumulated and  communicated  to our  management,  including our
chief executive officer and chief financial  officer,  as appropriate,  to allow
timely decisions regarding required  disclosure.  Our management,  including the
chief executive officer and the chief financial officer, recognizes that any set
of controls  and  procedures,  no matter how well  designed  and  operated,  can
provide only reasonable assurance of achieving the desired control objectives.

     As of the end of the period  covered by this annual report on Form 10-K, we
carried out an evaluation,  under the supervision and with the  participation of
our  management,  including  our chief  executive  officer  and chief  financial
officer,  of the  effectiveness  of the design and  operation of our  disclosure
controls and procedures.  Based on this evaluation,  our chief executive officer
and  chief  financial  officer  concluded  that  our  disclosure   controls  and
procedures  were  effective  as of the end of the period  covered by this annual
report on Form 10-K.

     There were no changes in our internal  controls  over  financial  reporting
during the quarter ended  December 31, 2006 that  materially  affected,  or that
could reasonably likely materially  affect, our internal controls over financial
reporting.


                                    PART III

     Certain information required by Part III is omitted from this Form 10-K and
is  incorporated  by reference to our definitive  Proxy Statement for the Annual
Meeting  of   Shareholders  to  be  held  on  September  18,  2007  (the  "Proxy
Statement"),  which will be filed with the SEC not later than 120 days after the
end of the fiscal year covered by this Form 10-K.


Item 10.     DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT

     Our executive officers are as follows:

     Arthur I. Trueger,  Executive Chairman: Mr. Trueger, age 58, is the founder
and a principal shareholder of Berkeley Technology Limited. He has worked for us
for more than 30 years and holds A.B., M.A. and J.D. degrees from the University
of California.

     Ian K. Whitehead,  Chief Financial Officer: Mr. Whitehead, age 52, has held
the position of Chief Financial Officer of Berkeley  Technology Limited since he
joined us in 1990.  Mr.  Whitehead  is a member of the  Institute  of  Chartered
Accountants in England and Wales.

     Information  regarding  our directors is  incorporated  by reference to the
sections  entitled  "Proposal 2 - Election of Director"  and "Board of Directors
and Committees" in our Proxy Statement.

     Information  regarding  compliance  with  Section  16(a) of the  Securities
Exchange Act of 1934, as amended,  is  incorporated  by reference to the section
entitled "Other Information About Directors and Executive Officers" in our Proxy
Statement.

                                       56
<PAGE>

     Information regarding our Code of Ethics,  adopted on November 12, 2003, is
incorporated by reference to the section  entitled "Code of Ethics" in our Proxy
Statement.


Item 11.     EXECUTIVE COMPENSATION

     The  information  required by this Item is incorporated by reference to the
sections entitled "Executive Compensation" and "Directors'  Compensation" in our
Proxy Statement.


Item 12.     SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND
             RELATED STOCKHOLDER MATTERS

     The information  regarding  security ownership of certain beneficial owners
and management is incorporated by reference to the section entitled "Information
Regarding  Beneficial  Ownership  of  Principal   Shareholders,   Directors  and
Executive Officers" in our Proxy Statement.

     The  following  table is a summary of selected  information  for our equity
compensation plans as of December 31, 2006.
<TABLE>
<CAPTION>
                                                                                                   Number of Shares
                                            Number of Shares to        Weighted-Average     Remaining Available for
                                        be Issued Upon Exercise       Exercise Price of       Future Issuance Under
                                        of Outstanding Options,    Outstanding Options,         Equity Compensation
                                            Warrants and Rights     Warrants and Rights                       Plans
                                      -------------------------   ---------------------   -------------------------

Equity compensation plans
<S>                                                   <C>                       <C>                           <C>
   approved by shareholders.............              5,225,000 (1)               $2.59                         (1)

Equity compensation plans not
   approved by shareholders.............                     -                     -
                                                ---------------                --------
Total...................................              5,225,000                   $2.59
                                                ---------------                --------
                                                ---------------                --------
<FN>
(1) Our equity compensation plans do not contain a limit on the number of options that may be granted to employees.
    However, the plans do not allow for the issuance of previously authorized and unissued shares to meet the
    obligations of the plans upon an employee option exercise. When an option is granted, the trust that administers
    the plan borrows funds from the Company or one of its subsidiaries and uses those funds to purchase the number of
    shares underlying the option grant. The maximum loan allowed in any given year is equal to 5% of consolidated net
    assets as of the end of the previous fiscal year.
</FN>
</TABLE>

     Information  regarding  the  features of the equity  compensation  plan not
approved  by  shareholders  is  incorporated  by  reference  to  Note  13 to the
Consolidated Financial Statements in Item 8 of this Form 10-K.


Item 13.     CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS

     The  information  required by this Item is incorporated by reference to the
section entitled "Other  Information About Directors and Executive  Officers" in
our Proxy Statement.


Item 14.     PRINCIPAL ACCOUNTANT FEES AND SERVICES

     The  information  required by this Item is incorporated by reference to the
section  entitled  "Report of the Audit  Committee of the Board of Directors" in
our Proxy Statement.

                                       57
<PAGE>

                                     PART IV

Item 15.     EXHIBITS AND FINANCIAL STATEMENT SCHEDULES

(a)  The following documents are filed as a part of this Form 10-K:

<TABLE>
<CAPTION>
  1. Financial Statements:                                                                                   Page

     The following  consolidated  financial  statements  of Berkeley  Technology
     Limited and subsidiaries are included in Item 8:

<S>                                                                                                           <C>
               Report of Independent Registered Public Accounting Firm......................................  22

               Consolidated Balance Sheets as of December 31, 2006 and 2005.................................  23

               Consolidated Statements of Operations for the Years Ended
                   December 31, 2006, 2005 and 2004.........................................................  24

               Consolidated Statements of Cash Flows for the Years Ended
                   December 31, 2006, 2005 and 2004.........................................................  25

               Consolidated Statements of Changes in Shareholders' Equity for the Years Ended
                   December 31, 2006, 2005 and 2004.........................................................  27

               Consolidated Statements of Comprehensive Income for the Years Ended
                   December 31, 2006, 2005 and 2004.........................................................  28

               Notes to the Consolidated Financial Statements...............................................  29
</TABLE>

  2. Financial Statement Schedules:

     The following  financial statement schedules of Berkeley Technology Limited
     and subsidiaries are included in this Form 10-K immediately  following Item
     15 and  should  be read in  conjunction  with  the  consolidated  financial
     statements and notes thereto included in Item 8:
<TABLE>
<CAPTION>

               Schedule I - Summary of Investments - Other Than Investments in Related
<S>                                                                                                           <C>
                   Parties..................................................................................  62

               Schedule II - Condensed Financial Information of Registrant

                   Condensed Balance Sheets as of December 31, 2006 and 2005................................  63

                   Condensed Statements of Operations for the Years Ended
                      December 31, 2006, 2005 and 2004......................................................  64

                   Condensed Statements of Cash Flows for the Years Ended
                      December 31, 2006, 2005 and 2004......................................................  65

                   Note to Condensed Financial Statements...................................................  66

               Schedule III - Supplementary Insurance Information...........................................  67
</TABLE>

     All other  financial  statement  schedules  required by Regulation S-X have
     been omitted because they are not applicable or the required information is
     included  in the  applicable  consolidated  financial  statements  or notes
     thereto in Item 8 "Financial  Statements  and  Supplementary  Data" of this
     Form 10-K.

                                       58
<PAGE>

3. Exhibits:

     The following exhibits of Berkeley  Technology Limited and subsidiaries are
filed herewith or incorporated by reference as indicated below:


Exhibit
Number    Description
-------   -----------

3.(I).1   Memorandum and Articles of Association of Berkeley Technology Limited,
          as amended and restated on April 18, 2000 (filed previously as Exhibit
          3.(I) to our Form 10-Q for the quarter ended June 30, 2000).

3.(I).2   Certificate  of  Incorporation  on Change of Name dated June 12,  2003
          (filed  previously  as  Exhibit  3.(I).2 to our Form 10-K for the year
          ended December 31, 2003).

4.1       Specimen Ordinary Share  certificate  (filed previously as Exhibit 4.1
          to our Form 10-K for the year ended December 31, 2000).

4.2       Form of Deposit  Agreement  dated  September  25, 1992, as amended and
          restated as of November 24, 1993,  as further  amended and restated as
          of March 14, 2000,  among us, The Bank of New York as Depositary,  and
          all  Owners  and  Holders  from  time to time of  American  Depositary
          Receipts  issued  thereunder  (filed  previously  as  Exhibit A to our
          Registration  Statement on Form F-6 (Registration No. 333-11658) dated
          March 14, 2000).

4.3       Letter  Agreement  dated  August 25, 1992 between The Bank of New York
          and us  covering  the  Basic  Administration  Charge  relating  to the
          Deposit  Agreement  (shown above as Exhibit 4.2) (filed  previously as
          Exhibit 3.8 to our Post-Effective  Amendment No. 2 to our Registration
          Statement on Form 20-F/A dated August 31, 1993).

4.4       Form of Deposit Agreement as amended and restated as of June 24, 2002,
          among  us,  The Bank of New York as  Depositary,  and all  Owners  and
          Holders  from  time to time of  American  Depositary  Receipts  issued
          thereunder  (filed  previously as Exhibit 4.4 to our Form 10-Q for the
          quarter ended June 30, 2002).

4.5       Warrant  Agreement dated February 14, 2003 between us and the Governor
          and  Company  of the Bank of  Scotland  relating  to the Term Loan and
          Guarantee  Facility  dated  December  20,  2002 (filed  previously  as
          Exhibit 4.5 to our Form 10-Q for the quarter ended March 31, 2003).

4.6       Specimen  Ordinary  Share  certificate,  as amended  on June 12,  2003
          (filed  previously  as Exhibit 4.6 to our Form 10-K for the year ended
          December 31, 2003).

10.1.1    Settlement  dated  February  16,  1990 among (1) us,  (2) John  Gerald
          Patrick  Wheeler and (3) Ian Walter  Strang,  constituting  The London
          Pacific  Group 1990 Employee  Share Option Trust (filed  previously as
          Exhibit  3.2 to our  Post-Effective  Amendment  No. 2 to  Registration
          Statement on Form 20-F/A dated August 31, 1993).

10.1.2    Executed Instrument dated March 18, 1994 among (1) John Gerald Patrick
          Wheeler, (2) Ian Walter Strang and (3) Richard John Pirouet,  relating
          to The London  Pacific Group 1990  Employee  Share Option Trust (filed
          previously  as Exhibit  3.2.1 to our Annual  Report on Form 20-F dated
          June 10, 1994).

                                       59
<PAGE>



10.1.3    Executed  Instrument  dated  September  27,  1994 among (1) Ian Walter
          Strang, (2) Richard John Pirouet and (3) Clive Aubrey Charles Chaplin,
          relating to The London  Pacific Group 1990 Employee Share Option Trust
          (filed  previously  as Exhibit 3.2.2 to our Annual Report on Form 20-F
          dated June 29, 1995).

10.1.4    Executed  Instrument  dated March 3, 1995 among (1) Ian Walter Strang,
          (2)  Richard  John  Pirouet  and (3)  Clive  Aubrey  Charles  Chaplin,
          relating to The London  Pacific Group 1990 Employee Share Option Trust
          (filed  previously  as Exhibit 3.2.3 to our Annual Report on Form 20-F
          dated June 29, 1995).

10.1.5    Executed  Instrument  dated  August 22,  1996 among (1)  Richard  John
          Pirouet,  (2) Clive  Aubrey  Charles  Chaplin  and (3) Ronald  William
          Green, relating to The London Pacific Group 1990 Employee Share Option
          Trust (filed  previously as Exhibit 3.2.4 to our Annual Report on Form
          20-F dated June 30, 1997).

10.1.6    Executed  Instrument  dated  August 29,  1998 among (1)  Richard  John
          Pirouet,  (2) Clive Aubrey Charles  Chaplin,  (3) Ronald William Green
          and (4) Victor Aloysius  Hebert,  relating to The London Pacific Group
          1990 Employee Share Option Trust (filed previously as Exhibit 3.2.5 to
          our Annual Report on Form 20-F dated June 30, 1999).

10.1.7    Executed Instrument dated May 31, 2000 among (1) Richard John Pirouet,
          (2) Clive Aubrey  Charles  Chaplin,  (3) Ronald  William Green and (4)
          Victor  Aloysius  Hebert,  relating to The London  Pacific  Group 1990
          Employee Share Option Trust (filed previously as Exhibit 10.2.1 to our
          Form 10-Q for the quarter ended September 30, 2000).

10.1.8    Executed Instrument dated May 31, 2000 among (1) Richard John Pirouet,
          (2) Clive Aubrey Charles Chaplin, (3) Ronald William Green, (4) Victor
          Aloysius  Hebert and (5)  Christopher  Byrne,  relating  to The London
          Pacific  Group 1990 Employee  Share Option Trust (filed  previously as
          Exhibit  10.2.2 to our Form 10-Q for the quarter  ended  September 30,
          2000).

10.2.1(1) Agreement  dated  July 1, 1990 between  us and  Ian Kenneth  Whitehead
          (filed  previously  as  Exhibit  10.3.1  to our Form 10-K for the year
          ended December 31, 2000).

10.2.2(1) London Pacific  Advisers Limited  Retirement Scheme confirmation dated
          December 5, 2000  for  Ian  Kenneth  Whitehead  (filed  previously  as
          Exhibit 10.3.3 to our Form 10-K for the year ended December 31, 2001).

10.3.1    Settlement  dated May 23, 1997 among BG Services  Limited and A.L.O.T.
          Trustee Limited  establishing  Agent Loyalty  Opportunity Trust (filed
          previously  as  Exhibit  10.4.1  to our Form  10-K for the year  ended
          December 31, 2001).

10.3.2    Executed Deed dated July 16, 1997 by A.L.O.T. Trustee Limited relating
          to Agent Loyalty Opportunity Trust (filed previously as Exhibit 10.4.2
          to our Form 10-K for the year ended December 31, 2001).

10.3.3    Executed  Deed  dated  August 13,  1997 by  A.L.O.T.  Trustee  Limited
          relating to Agent  Loyalty  Opportunity  Trust  (filed  previously  as
          Exhibit 10.4.3 to our Form 10-K for the year ended December 31, 2001).

10.3.4    Executed  Deed  dated  August 20,  1998 by  A.L.O.T.  Trustee  Limited
          relating to Agent  Loyalty  Opportunity  Trust  (filed  previously  as
          Exhibit 10.4.4 to our Form 10-K for the year ended December 31, 2001).

                                       60
<PAGE>



10.3.5    Executed Deed of Amendment  and  Appointment  dated  December 11, 2001
          among  Berkeley  International  Capital  Limited and A.L.O.T.  Trustee
          Limited relating to Agent Loyalty  Opportunity Trust (filed previously
          as  Exhibit  10.4.5 to our Form 10-K for the year ended  December  31,
          2001).

10.4      Asset Purchase  Agreement dated March 7, 2003 between Berkeley Capital
          Management  ("BCM"),  Berkeley  (USA)  Holdings  Limited and  Berkeley
          Capital  Management LLC relating to the sale of  substantially  all of
          the assets and operations of BCM (filed  previously as Exhibit 10.5 to
          our Form 10-Q for the quarter ended March 31, 2003).

10.5      Purchase  Agreement,  dated May 9, 2003, for the acquisition of London
          Pacific Advisory Services, Inc. and London Pacific Securities, Inc. by
          SunGard Business Systems Inc. (filed previously as Exhibit 10.6 to our
          Form 10-Q for the quarter ended June 30, 2003).

14.1      Code of Ethics (filed  previously as Exhibit 14.1 to our Form 10-K for
          the year ended December 31, 2003).

21        Subsidiaries of the Company as of March 23, 2007.

31.1      Certification  by the  Company's  Executive  Chairman  pursuant  to 18
          U.S.C.  Section  1350,  as  adopted  pursuant  to  Section  302 of the
          Sarbanes-Oxley Act of 2002.

31.2      Certification by the Company's Chief Financial  Officer pursuant to 18
          U.S.C.  Section  1350,  as  adopted  pursuant  to  Section  302 of the
          Sarbanes-Oxley Act of 2002.

32.1      Certification  by the  Company's  Executive  Chairman  pursuant  to 18
          U.S.C.  Section  1350,  as  adopted  pursuant  to  Section  906 of the
          Sarbanes-Oxley Act of 2002.

32.2      Certification by the Company's Chief Financial  Officer pursuant to 18
          U.S.C.  Section  1350,  as  adopted  pursuant  to  Section  906 of the
          Sarbanes-Oxley Act of 2002.

----------

(1)    Management contract or compensatory arrangement filed in response to Item
       15(a)(3) of the instructions to Form 10-K.


(b) Our exhibits are listed in Item 15(a)(3) above.

(c) Our financial statement schedules follow on pages 62 through 67.


                                       61
<PAGE>




                      SCHEDULE I - SUMMARY OF INVESTMENTS -
                    OTHER THAN INVESTMENTS IN RELATED PARTIES

                  BERKELEY TECHNOLOGY LIMITED AND SUBSIDIARIES

                             As of December 31, 2006
<TABLE>
<CAPTION>


                            Column A                                   Column B          Column C       Column D

                                                                                                        Amount at
                                                                                                       Which Shown
                                                                                                     in Consolidated
                                                                                           Fair          Balance
                       Type of Investments                             Cost (1)            Value         Sheet (2)
----------------------------------------------------------------  --------------   --------------   ---------------
                                                                                      (In thousands)
Fixed maturity securities:
Bonds:
<S>                                                                <C>              <C>               <C>
   United States government and government
     agencies and authorities...................................   $           -    $           -     $           -
   States, municipalities and political subdivisions............               -                -                 -
   Foreign governments..........................................               -                -                 -
   Public utilities.............................................               -                -                 -
   Convertibles and bonds with warrants attached................               -                -                 -
   All other corporate bonds....................................          12,030           12,011            12,016
Redeemable preferred stock......................................               -                -                 -
                                                                  --------------   --------------   ---------------
Total fixed maturity securities.................................          12,030    $      12,011            12,016
                                                                  --------------   --------------   ---------------
                                                                                   --------------
Equity securities:
Non-redeemable preferred stocks.................................             844              844               844
                                                                  --------------   --------------   ---------------
Total equity securities.........................................             844    $         844               844
                                                                  --------------   --------------   ---------------
                                                                                   --------------
Total investments...............................................   $      12,874                      $      12,860
                                                                  --------------                    ---------------
                                                                  --------------                    ---------------
<FN>
(1) Cost of fixed maturity securities is original cost, reduced by other-than-temporary impairments, repayments and
    adjusted for amortization of premiums and accretion of discounts. Cost of equity securities is original cost,
    reduced by other-than-temporary impairments.

(2) Differences between amounts reflected in Column B or Column C and amounts at which shown in the consolidated
    balance sheet reflected in Column D result from the application of Statement of Financial Accounting Standards
    No. 115, "Accounting for Certain Investments in Debt and Equity Securities." Fixed maturity securities are
    classified as either available-for-sale or held-to-maturity. Available-for-sale securities are recorded at fair
    value, with changes in unrealized gains and losses excluded from net income, but reported net of applicable
    income taxes as a separate component of comprehensive income. Held-to-maturity securities are recorded at
    amortized cost.
</FN>
</TABLE>



                                       62
<PAGE>




           SCHEDULE II - CONDENSED FINANCIAL INFORMATION OF REGISTRANT

                           BERKELEY TECHNOLOGY LIMITED
                            CONDENSED BALANCE SHEETS
<TABLE>
<CAPTION>
                                                                                              December 31,
                                                                                     ------------------------------
                                                                                        2006               2005
                                                                                     ------------      ------------
                                                                                  (In thousands, except share amounts)
                                     ASSETS

<S>                                                                                  <C>               <C>
Cash and cash equivalents.........................................................   $        677      $        308
Investment in subsidiaries........................................................        (66,080)          (69,853)
Intercompany balances.............................................................         82,099            90,288
Other assets......................................................................              7                37
                                                                                     ------------      ------------
Total assets......................................................................   $     16,703      $     20,780
                                                                                     ------------      ------------
                                                                                     ------------      ------------


                      LIABILITIES AND SHAREHOLDERS' EQUITY

Liabilities:
Accounts payable and accruals.....................................................   $        498      $        330
Intercompany balances.............................................................            282               847
                                                                                     ------------      ------------
Total liabilities.................................................................            780             1,177
                                                                                     ------------      ------------
Commitments and contingencies

Shareholders' equity:
Ordinary shares, $0.05 par value per share: 86,400,000 shares authorized;
   64,439,073 shares issued and outstanding as of December 31, 2006
   and 2005.......................................................................          3,222             3,222
Additional paid-in capital........................................................         67,718            67,660
Retained earnings.................................................................          7,999            11,682
Employee benefit trusts, at cost (13,522,381 shares as of
   December 31, 2006 and 2005, respectively)......................................        (62,598)          (62,598)
Accumulated other comprehensive loss..............................................           (418)             (363)
                                                                                     ------------      ------------
Total shareholders' equity........................................................         15,923            19,603
                                                                                     ------------      ------------
Total liabilities and shareholders' equity........................................   $     16,703      $     20,780
                                                                                     ------------      ------------
                                                                                     ------------      ------------

</TABLE>





            See accompanying Note to Condensed Financial Statements.





                                       63
<PAGE>



     SCHEDULE II - CONDENSED FINANCIAL INFORMATION OF REGISTRANT (Continued)

                           BERKELEY TECHNOLOGY LIMITED
                       CONDENSED STATEMENTS OF OPERATIONS
<TABLE>
<CAPTION>


                                                                                          Years Ended December 31,
                                                                                     -----------------------------------
                                                                                        2006        2005         2004
                                                                                     ----------  -----------  ----------
                                                                                                (In thousands)
Revenues:
<S>                                                                                  <C>         <C>          <C>
Investment income............................................................        $       31  $        24  $       44
                                                                                     ----------  -----------  ----------
                                                                                             31           24          44
Expenses:
Staff costs..................................................................               407          471         626
Other operating expenses.....................................................               733          667       1,459
                                                                                     ----------  -----------  ----------
                                                                                          1,140        1,138       2,085
                                                                                     ----------  -----------  ----------
Loss before income tax benefit and equity in
   undistributed net loss of subsidiaries....................................            (1,109)      (1,114)     (2,041)

Income tax benefit...........................................................                 -            -           -
                                                                                     ----------  -----------  ----------
Loss before equity in undistributed net loss of
   subsidiaries..............................................................            (1,109)      (1,114)     (2,041)

Equity in undistributed net loss of subsidiaries (1).........................            (2,574)      (2,133)    (10,100)
                                                                                     ----------  -----------  ----------
Net loss.....................................................................        $   (3,683) $    (3,247) $  (12,141)
                                                                                     ----------  -----------  ----------
                                                                                     ----------  -----------  ----------

-----------------------
<FN>
(1) Eliminated on consolidation.
</FN>
</TABLE>



            See accompanying Note to Condensed Financial Statements.

                                      64
<PAGE>



     SCHEDULE II - CONDENSED FINANCIAL INFORMATION OF REGISTRANT (Continued)

                           BERKELEY TECHNOLOGY LIMITED
                       CONDENSED STATEMENTS OF CASH FLOWS

<TABLE>
<CAPTION>
                                                                                          Years Ended December 31,
                                                                                     -----------------------------------
                                                                                        2006        2005         2004
                                                                                     ----------  -----------  ----------
                                                                                               (In thousands)
Cash flows from operating activities:
<S>                                                                                  <C>         <C>          <C>
Net loss.....................................................................        $   (3,683) $    (3,247) $  (12,141)

Adjustments to reconcile net loss to net
   cash used in operating activities:
Equity in undistributed net loss of subsidiaries.............................             2,574        2,133      10,100
Other operating cash flows...................................................               256          101         140
                                                                                     ----------  -----------  ----------
Net cash used in operating activities .......................................              (853)      (1,013)     (1,901)
                                                                                     ----------  -----------  ----------
Cash flows from investing activities:
Advances to subsidiaries.....................................................              (181)      (3,149)       (195)
                                                                                     ----------  -----------  ----------
Net cash used in investing activities........................................              (181)      (3,149)       (195)
                                                                                     ----------  -----------  ----------
Cash flows from financing activities:
Repayments from subsidiaries.................................................             1,403          527       3,543
                                                                                     ----------  -----------  ----------
Net cash provided by financing activities ...................................             1,403          527       3,543
                                                                                     ----------  -----------  ----------

Net increase (decrease) in cash and cash equivalents.........................               369       (3,635)      1,447
Cash and cash equivalents at beginning of year...............................               308        3,943       2,496
                                                                                     ----------  -----------  ----------
Cash and cash equivalents at end of year.....................................        $      677  $       308  $    3,943
                                                                                     ----------  -----------  ----------
                                                                                     ----------  -----------  ----------
</TABLE>








            See accompanying Note to Condensed Financial Statements.


                                       65
<PAGE>



     SCHEDULE II - CONDENSED FINANCIAL INFORMATION OF REGISTRANT (Continued)

                           BERKELEY TECHNOLOGY LIMITED
                     NOTE TO CONDENSED FINANCIAL STATEMENTS


Note 1.    Basis of Presentation and Significant Accounting Policies

     The accompanying  financial statements comprise a condensed presentation of
financial position,  results of operations and cash flows of Berkeley Technology
Limited (the "Company") on a separate company basis.  These condensed  financial
statements  do not  include  the  accounts of the  Company's  subsidiaries,  but
instead  include  the  Company's  investment  in those  subsidiaries,  stated at
amounts which are equal to the Company's equity in the subsidiaries' net assets.
The  consolidated  financial  statements of the Company and its subsidiaries are
included in Item 8 of this Form 10-K for the year ended December 31, 2006.

     Additional information about the significant accounting policies applied by
the Company  and its  subsidiaries  is  included  in Note 1 to the  Consolidated
Financial Statements in Item 8 of this Form 10-K for the year ended December 31,
2006.



                                       66
<PAGE>



               SCHEDULE III - SUPPLEMENTARY INSURANCE INFORMATION

                  BERKELEY TECHNOLOGY LIMITED AND SUBSIDIARIES

                      Life Insurance and Annuities Segment
<TABLE>
<CAPTION>


                                                                                       Years Ended/As of December 31,
                                                                                     -----------------------------------
                                                                                        2006        2005         2004
                                                                                     ----------  -----------  ----------
                                                                                                (In thousands)


<S>                                                                                  <C>         <C>          <C>
Deferred policy acquisition costs..........................................          $        -  $         -  $        -


Future policy benefits, losses, claims and loss expenses (1)...............               3,640       13,573      21,229


Unearned premiums..........................................................                 N/A          N/A         N/A


Other policy claims and benefits payable (1)...............................                   -            -           -


Premium revenue (2)........................................................                   2            4           4


Net investment income (3)..................................................                 936        1,213       1,295


Benefits, claims, losses and settlement expenses...........................                 N/A          N/A         N/A


Amortization of deferred policy acquisition costs..........................                   -            -           -


Other operating expenses...................................................                 689          913         974


Premiums written...........................................................                 N/A          N/A         N/A


---------------
<FN>
(1) For additional disclosure regarding life insurance policy liabilities, see Note 7 to the Consolidated Financial
    Statements in Item 8 of this Form 10-K for the year ended December 31, 2006.

(2) Insurance policy charges.

(3) Expenses related to the management and administration of investments have been netted with investment income in
    the determination of net investment income.
</FN>
</TABLE>







                                       67
<PAGE>



                                   SIGNATURES


     Pursuant  to the  requirements  of  Section  13 or 15(d) of the  Securities
Exchange Act of 1934, the registrant has duly caused this report to be signed on
its behalf by the undersigned, thereunto duly authorized.


                                                 BERKELEY TECHNOLOGY LIMITED
                                                 (Registrant)

                                                 By     /s/  Arthur I. Trueger
Date:  March 23, 2007                                   Arthur I. Trueger
                                                        Executive Chairman


     Pursuant to the  requirements of the Securities  Exchange Act of 1934, this
report  has  been  signed  below  by the  following  persons  on  behalf  of the
registrant and in the capacities and on the dates indicated.


                                    /s/  Arthur I. Trueger
Date:  March 23, 2007               Arthur I. Trueger
                                    Executive Chairman
                                    (Principal Executive Officer)


                                    /s/  Ian K. Whitehead
Date:  March 23, 2007               Ian K. Whitehead
                                    Chief Financial Officer
                                    (Principal Financial and Accounting Officer)


                                    /s/  Victor A. Hebert
Date:  March 23, 2007               Victor A. Hebert
                                    Deputy Chairman and Non-Executive Director


                                    /s/  Harold E. Hughes, Jr.
Date:  March 23, 2007               Harold E. Hughes, Jr.
                                    Non-Executive Director


                                    /s/  Trenchard
Date:  March 23, 2007               The Viscount Trenchard
                                    Non-Executive Director




                                       68
<PAGE>





                  BERKELEY TECHNOLOGY LIMITED AND SUBSIDIARIES

                EXHIBIT INDEX FOR THE ANNUAL REPORT ON FORM 10-K
                      FOR THE YEAR ENDED DECEMBER 31, 2006

Exhibit
Number    Description
-------   -----------

3.(I).1   Memorandum and Articles of Association of Berkeley Technology Limited,
          as amended and restated on April 18, 2000 (filed previously as Exhibit
          3.(I) to our Form 10-Q for the quarter ended June 30, 2000).

3.(I).2   Certificate  of  Incorporation  on Change of Name dated June 12,  2003
          (filed  previously  as  Exhibit  3.(I).2 to our Form 10-K for the year
          ended December 31, 2003).

4.1       Specimen Ordinary Share  certificate  (filed previously as Exhibit 4.1
          to our Form 10-K for the year ended December 31, 2000).

4.2       Form of Deposit  Agreement  dated  September  25, 1992, as amended and
          restated as of November 24, 1993,  as further  amended and restated as
          of March 14, 2000,  among us, The Bank of New York as Depositary,  and
          all  Owners  and  Holders  from  time to time of  American  Depositary
          Receipts  issued  thereunder  (filed  previously  as  Exhibit A to our
          Registration  Statement on Form F-6 (Registration No. 333-11658) dated
          March 14, 2000).

4.3       Letter  Agreement  dated  August 25, 1992 between The Bank of New York
          and us  covering  the  Basic  Administration  Charge  relating  to the
          Deposit  Agreement  (shown above as Exhibit 4.2) (filed  previously as
          Exhibit 3.8 to our Post-Effective  Amendment No. 2 to our Registration
          Statement on Form 20-F/A dated August 31, 1993).

4.4       Form of Deposit Agreement as amended and restated as of June 24, 2002,
          among  us,  The Bank of New York as  Depositary,  and all  Owners  and
          Holders  from  time to time of  American  Depositary  Receipts  issued
          thereunder  (filed  previously as Exhibit 4.4 to our Form 10-Q for the
          quarter ended June 30, 2002).

4.5       Warrant  Agreement dated February 14, 2003 between us and the Governor
          and  Company  of the Bank of  Scotland  relating  to the Term Loan and
          Guarantee  Facility  dated  December  20,  2002 (filed  previously  as
          Exhibit 4.5 to our Form 10-Q for the quarter ended March 31, 2003).

4.6       Specimen  Ordinary  Share  certificate,  as amended  on June 12,  2003
          (filed  previously  as Exhibit 4.6 to our Form 10-K for the year ended
          December 31, 2003).

10.1.1    Settlement  dated  February  16,  1990 among (1) us,  (2) John  Gerald
          Patrick  Wheeler and (3) Ian Walter  Strang,  constituting  The London
          Pacific  Group 1990 Employee  Share Option Trust (filed  previously as
          Exhibit  3.2 to our  Post-Effective  Amendment  No. 2 to  Registration
          Statement on Form 20-F/A dated August 31, 1993).

10.1.2    Executed Instrument dated March 18, 1994 among (1) John Gerald Patrick
          Wheeler, (2) Ian Walter Strang and (3) Richard John Pirouet,  relating
          to The London  Pacific Group 1990  Employee  Share Option Trust (filed
          previously  as Exhibit  3.2.1 to our Annual  Report on Form 20-F dated
          June 10, 1994).

10.1.3    Executed  Instrument  dated  September  27,  1994 among (1) Ian Walter
          Strang, (2) Richard John Pirouet and (3) Clive Aubrey Charles Chaplin,
          relating to The London  Pacific Group 1990 Employee Share Option Trust
          (filed  previously  as Exhibit 3.2.2 to our Annual Report on Form 20-F
          dated June 29, 1995).

                                       69
<PAGE>

10.1.4    Executed  Instrument  dated March 3, 1995 among (1) Ian Walter Strang,
          (2)  Richard  John  Pirouet  and (3)  Clive  Aubrey  Charles  Chaplin,
          relating to The London  Pacific Group 1990 Employee Share Option Trust
          (filed  previously  as Exhibit 3.2.3 to our Annual Report on Form 20-F
          dated June 29, 1995).

10.1.5    Executed  Instrument  dated  August 22,  1996 among (1)  Richard  John
          Pirouet,  (2) Clive  Aubrey  Charles  Chaplin  and (3) Ronald  William
          Green, relating to The London Pacific Group 1990 Employee Share Option
          Trust (filed  previously as Exhibit 3.2.4 to our Annual Report on Form
          20-F dated June 30, 1997).

10.1.6    Executed  Instrument  dated  August 29,  1998 among (1)  Richard  John
          Pirouet,  (2) Clive Aubrey Charles  Chaplin,  (3) Ronald William Green
          and (4) Victor Aloysius  Hebert,  relating to The London Pacific Group
          1990 Employee Share Option Trust (filed previously as Exhibit 3.2.5 to
          our Annual Report on Form 20-F dated June 30, 1999).

10.1.7    Executed Instrument dated May 31, 2000 among (1) Richard John Pirouet,
          (2) Clive Aubrey  Charles  Chaplin,  (3) Ronald  William Green and (4)
          Victor  Aloysius  Hebert,  relating to The London  Pacific  Group 1990
          Employee Share Option Trust (filed previously as Exhibit 10.2.1 to our
          Form 10-Q for the quarter ended September 30, 2000).

10.1.8    Executed Instrument dated May 31, 2000 among (1) Richard John Pirouet,
          (2) Clive Aubrey Charles Chaplin, (3) Ronald William Green, (4) Victor
          Aloysius  Hebert and (5)  Christopher  Byrne,  relating  to The London
          Pacific  Group 1990 Employee  Share Option Trust (filed  previously as
          Exhibit  10.2.2 to our Form 10-Q for the quarter  ended  September 30,
          2000).

10.2.1(1) Agreement  dated  July 1, 1990 between  us  and Ian Kenneth  Whitehead
          (filed  previously  as  Exhibit  10.3.1  to our Form 10-K for the year
          ended December 31, 2000).

10.2.2(1) London Pacific Advisers Limited  Retirement Scheme  confirmation dated
          December  5, 2000  for  Ian  Kenneth   Whitehead (filed  previously as
          Exhibit 10.3.3 to our Form 10-K for the year ended December 31, 2001).

10.3.1    Settlement  dated May 23, 1997 among BG Services  Limited and A.L.O.T.
          Trustee Limited  establishing  Agent Loyalty  Opportunity Trust (filed
          previously  as  Exhibit  10.4.1  to our Form  10-K for the year  ended
          December 31, 2001).

10.3.2    Executed Deed dated July 16, 1997 by A.L.O.T. Trustee Limited relating
          to Agent Loyalty Opportunity Trust (filed previously as Exhibit 10.4.2
          to our Form 10-K for the year ended December 31, 2001).

10.3.3    Executed  Deed  dated  August 13,  1997 by  A.L.O.T.  Trustee  Limited
          relating to Agent  Loyalty  Opportunity  Trust  (filed  previously  as
          Exhibit 10.4.3 to our Form 10-K for the year ended December 31, 2001).

10.3.4    Executed  Deed  dated  August 20,  1998 by  A.L.O.T.  Trustee  Limited
          relating to Agent  Loyalty  Opportunity  Trust  (filed  previously  as
          Exhibit 10.4.4 to our Form 10-K for the year ended December 31, 2001).

10.3.5    Executed Deed of Amendment  and  Appointment  dated  December 11, 2001
          among  Berkeley  International  Capital  Limited and A.L.O.T.  Trustee
          Limited relating to Agent Loyalty  Opportunity Trust (filed previously
          as  Exhibit  10.4.5 to our Form 10-K for the year ended  December  31,
          2001).


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<PAGE>


10.4      Asset Purchase  Agreement dated March 7, 2003 between Berkeley Capital
          Management  ("BCM"),  Berkeley  (USA)  Holdings  Limited and  Berkeley
          Capital  Management LLC relating to the sale of  substantially  all of
          the assets and operations of BCM (filed  previously as Exhibit 10.5 to
          our Form 10-Q for the quarter ended March 31, 2003).

10.5      Purchase  Agreement,  dated May 9, 2003, for the acquisition of London
          Pacific Advisory Services, Inc. and London Pacific Securities, Inc. by
          SunGard Business Systems Inc. (filed previously as Exhibit 10.6 to our
          Form 10-Q for the quarter ended June 30, 2003).

14.1      Code of Ethics (filed  previously as Exhibit 14.1 to our Form 10-K for
          the year ended December 31, 2003).

21        Subsidiaries of the Company as of March 23, 2007.

31.1      Certification  by the  Company's  Executive  Chairman  pursuant  to 18
          U.S.C.  Section  1350,  as  adopted  pursuant  to  Section  302 of the
          Sarbanes-Oxley Act of 2002.

31.2      Certification by the Company's Chief Financial  Officer pursuant to 18
          U.S.C.  Section  1350,  as  adopted  pursuant  to  Section  302 of the
          Sarbanes-Oxley Act of 2002.

32.1      Certification  by the  Company's  Executive  Chairman  pursuant  to 18
          U.S.C.  Section  1350,  as  adopted  pursuant  to  Section  906 of the
          Sarbanes-Oxley Act of 2002.

32.2      Certification by the Company's Chief Financial  Officer pursuant to 18
          U.S.C.  Section  1350,  as  adopted  pursuant  to  Section  906 of the
          Sarbanes-Oxley Act of 2002.

------------

(1)   Management contract or compensatory arrangement filed in response to Item
      15(a)(3) of the instructions to Form 10-K.



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