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, 2005

                                       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, 2005 as reported on the London  Stock  Exchange  (using an exchange  rate of
(pound)1.00  = $1.79)  was  $4,675,526.  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 30, 2006, 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 August 31, 2006, is incorporated by reference in
Part III of this Form 10-K.

<PAGE>

                                TABLE OF CONTENTS
<TABLE>
<CAPTION>
                                                       PART I                                                Page

<S>        <C>                                                                                                <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..............................................    6


                                                       PART II

Item 5.    Market for Registrant's Common Equity, Related Stockholder Matters and Issuer Purchases
               of Equity Securities.........................................................................    6
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......................................................   22
Item 9.    Changes in and Disagreements with Accountants on Accounting and Financial Disclosure.............   60
Item 9A.   Controls and Procedures..........................................................................   60


                                                       PART III

Item 10.   Directors and Executive Officers of the Registrant...............................................   60
Item 11.   Executive Compensation...........................................................................   61
Item 12.   Security Ownership of Certain Beneficial Owners and Management and Related
               Stockholder Matters..........................................................................   61
Item 13.   Certain Relationships and Related Transactions...................................................   61
Item 14.   Principal Accountant Fees and Services...........................................................   61


                                                       PART IV

Item 15.   Exhibits and Financial Statement Schedules ......................................................   62


Signatures .................................................................................................   72
Exhibit Index...............................................................................................   73

</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
telecommunications  equipment companies in dealing with large incumbent European
and Japanese  telecommunications  companies.  Our objective is to use consulting
revenues  and  expense  reimbursements  to  finance  the  development  of  large
telecommunications company relationships,  which could eventually lead to equity
based transactions,  with fees or direct investment opportunities for the Group.
We are also considering the possibility of new venture funds in partnership with
international sources of capital.

     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.

     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                    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  in  locating
investment  capital.  In select situations,  we may also invest our own 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,  assist in locating  partners,  customers  and  investment
capital,  and  occasionally  will  take  principal  positions  where the case is
compelling and the timeframe for realization could be relatively short.

     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.

     BICC currently provides its services to four clients, and is in discussions
with  additional  prospects.  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 26 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,

                                       2
<PAGE>

Cirrus Logic, Cypress Semiconductor,  Flextronics,  IDT, Linear Technology,  LSI
Logic, Nellcor, Oracle, PMC Sierra and Packeteer, Inc.

     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,  takes
principal positions in connection with private equity  transactions  arranged by
its sister  company,  BICC.  These  private  equity  positions may become 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. The pool of capital seeking opportunities to invest
in later stage technology  companies has contracted over the last several years,
but we believe demand continues for high value technology companies.

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 347 at December 31, 2005;  however,  much of the decline
during 2003,  2004 and 2005 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,
2005,  policyholder  liabilities  totaled  $13.6 million and the market value of
LPAL's  corporate bonds,  cash and accrued  interest  totaled $23.7 million.  In
addition,  LPAL's portfolio  included private equities valued at $0.8 million at
December 31, 2005.

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

                                       3
<PAGE>


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 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, 2005, 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.

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,  2005,  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.  Our
objective is to use consulting  revenues and expense  reimbursements  to finance
the development of large  telecommunications  company  relationships  which will
eventually  lead to equity based  transactions,  with fees or direct  investment
opportunities for our Group.  There is also the possibility of new venture funds
raised  in  partnership  with  international   sources  of  capital  leading  to
management  fees  and  carried  interests.  However,  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.

                                       4
<PAGE>



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  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  3,000 and 3,800
square  feet,  respectively.  We lease  both  offices.  These  leases  expire in
September 2010 and October 2006, 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 is too large for our current  level of business and staffing,
and we are currently evaluating sublease options.

     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

     On February 17, 2005,  SunGard  Business Systems Inc.  ("SunGard")  filed a
lawsuit in the U.S.  District  Court in  Philadelphia  against  the  Company and
certain of its  subsidiaries.  SunGard's  complaint  alleged losses in an amount
equal  to  at  least  $7.2   million   resulting   from   alleged   breaches  of
representations and warranties contained in the May 2003 agreement governing the
sale to SunGard of London  Pacific  Advisors,  our financial  advisory  services
business.

     On April 27, 2005,  we filed a lawsuit  against  SunGard and certain of its
affiliates in California  Superior Court in San Francisco ("the Court") accusing
SunGard of wrongful  conduct and seeking  payment of $1.0 million of the initial
purchase  consideration which is currently held in an escrow account, up to $8.0
million in additional earnout payments,  and further damages for SunGard's prior
wrongful  actions.  We are also  asking  the  Court  to  award us  compensatory,
exemplary and punitive damages.

     We also filed a motion to dismiss, for lack of subject matter jurisdiction,
SunGard's lawsuit against us in Pennsylvania. SunGard then voluntarily dismissed
its federal  action  against us and filed a new complaint in the court of Common
Pleas, Chester County, Pennsylvania.  This new complaint alleges essentially the
same claims  against the same parties that were  contained in SunGard's  federal
action.  Based upon  substantial  document  discovery and  deposition  testimony
already completed,  and ongoing consultation with our legal advisors, we believe
that there is no merit to SunGard's  claims  against us, and we will continue to
vigorously defend ourselves.

                                       5
<PAGE>

     On June 3, 2005,  SunGard filed a motion to dismiss or stay our  California
Superior  Court  action  on  jurisdictional  grounds.  On  July  26,  2005,  the
California court denied SunGard's motion.  On August 25, 2005,  SunGard appealed
that  decision.  Its  appeal was  summarily  denied by the  California  court of
appeals on September 22, 2005. In response, on October 12, 2005, SunGard filed a
motion  seeking  to  dismiss  13 of the 14 claims  contained  in our  California
complaint.  On January 3, 2006, the Court heard this motion and dismissed  three
of our claims,  and allowed us to amend six of our remaining  claims. On January
6, 2006, we lodged an 11-count amended  complaint which amended and supplemented
our claims based upon the  substantial  document  discovery we have now received
from SunGard.  SunGard responded by filing another motion,  this time to dismiss
nine of our 11 claims.  SunGard also sought to seal our amended  complaint  from
public view. On March 1, 2006, the Court heard  SunGard's  motions and dismissed
four of our 11  claims.  The Court  then  ordered  SunGard  to answer  our seven
remaining  claims  within 20 days of its March 14,  2006  order.  The Court also
denied  SunGard's  motion  to seal our  amended  complaint.

     On June 10, 2005, we filed a petition to dismiss SunGard's complaint in the
Pennsylvania court. That motion has not yet been heard.

     Costs  relating to the above  matters are  recognized  in our  statement of
operations as they are incurred.


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

     No matters were  submitted  to our  shareholders  during the quarter  ended
December 31, 2005.


                                     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, 2005, there were
64,439,073  Ordinary  Shares  outstanding of which  13,107,960,  or 20.3%,  were
represented  by 1,310,796  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.
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.

                                       6
<PAGE>

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

2004:
<S>                                                                <C>          <C>              <C>           <C>
First quarter.................................................     0.15         0.14             2.60          2.00
Second quarter................................................     0.15         0.14             2.55          2.25
Third quarter.................................................     0.14         0.11             2.60          2.05
Fourth quarter................................................     0.13         0.10             2.10          1.70

2005:
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
</TABLE>

Holders

     As of February 28, 2006, we had approximately  1,425 Ordinary  shareholders
of record and 62 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 2004 or an interim dividend for 2005. Our Board of
Directors will not be recommending a final dividend for the year 2005.

     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.

     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.

                                       7
<PAGE>

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, 2006,
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%.

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

                                       8
<PAGE>

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.

                                       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. ADS amounts have been restated to reflect
the one-for-ten reverse split in June 2002.
<TABLE>
<CAPTION>
                                                                            Years Ended/As of December 31,
                                                             ----------------------------------------------------------
                                                                2005       2004         2003      2002 (2)    2001 (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  $    2,093  $   (5,759) $    9,198  $  (33,337) $ (194,376)
Income (loss) from continuing operations before income
   taxes................................................         (3,235)    (11,851)      1,047     (54,478)   (221,033)
Income tax expense (benefit) on continuing operations...             12         290         (42)      1,291       2,107
Income (loss) from discontinued operations..............              -           -       9,965    (154,678)   (180,194)
Income tax expense (benefit) on discontinued operations.              -           -          38      (4,943)    (58,550)
Net income (loss).......................................         (3,247)    (12,141)     11,016    (205,504)   (344,784)
Basic earnings (loss) per share:
   Continuing operations................................          (0.06)      (0.24)       0.02       (1.10)      (4.38)
   Discontinued operations..............................              -           -        0.20       (2.95)      (2.38)
                                                             ----------  ----------  ----------  ----------  ----------
Total basic earnings (loss) per share...................          (0.06)      (0.24)       0.22       (4.05)      (6.76)
Diluted earnings (loss) per share:
   Continuing operations................................          (0.06)      (0.24)       0.02       (1.10)      (4.38)
   Discontinued operations..............................              -           -        0.20       (2.95)      (2.38)
                                                             ----------  ----------  ----------  ----------  ----------
Total diluted earnings (loss) per share.................          (0.06)      (0.24)       0.22       (4.05)      (6.76)
Basic earnings (loss) per ADS:
   Continuing operations................................          (0.64)      (2.39)       0.21      (10.99)     (43.77)
   Discontinued operations..............................              -           -        1.96      (29.50)     (23.85)
                                                             ----------  ----------  ----------  ----------  ----------
Total basic earnings (loss) per ADS.....................          (0.64)      (2.39)       2.17      (40.49)     (67.62)
Diluted earnings (loss) per ADS:
   Continuing operations................................          (0.64)      (2.39)       0.21      (10.99)     (43.77)
   Discontinued operations..............................              -           -        1.94      (29.50)     (23.85)
                                                             ----------  ----------  ----------  ----------  ----------
Total diluted earnings (loss) per ADS...................          (0.64)      (2.39)       2.15      (40.49)     (67.62)

Financial Position
Cash and total investments (continuing operations)......         32,840      43,279      61,944      69,378     262,058
Total assets............................................         33,803      44,707      63,513      80,217   2,539,126
Bank debt...............................................              -           -           -       9,314      36,874
Guarantees under bank facility..........................              -           -           -      10,590          -
Shareholders' equity....................................         19,603      22,893      34,897      21,486     221,653
Book value per share (1)................................           0.39        0.45        0.69        0.42        4.37
Book value per ADS (1)..................................           3.85        4.51        6.88        4.23       43.68

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      50,754      50,754      50,753      50,984
   Diluted earnings per share calculation...............         50,917      50,754      51,188      50,753      50,984
Total dividends per share relating to the year (gross)..     $        -  $        -  $        -  $        -  $     0.16
Total dividends per ADS relating to the year............     $        -  $        -  $        -  $        -  $     1.28
Market price per share on December 31...................    (pound)0.06 (pound)0.11 (pound)0.14(pound)0.055 (pound)2.60
Market price per ADS on December 31.....................     $     0.70  $     1.70  $     2.51  $     0.50  $    39.60
Market capitalization as of December 31.................     $    6,706  $   13,115  $   16,148  $    5,706  $  244,611
<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,
                                                                                     ----------------------------------
                                                                                        2005        2004        2003
                                                                                     ----------  ----------  ----------
                                                                                               (In thousands)
Income (loss) from continuing operations before income taxes
  by operating segment:
<S>                                                                                  <C>         <C>         <C>
Venture capital and consulting ..............................................        $     (584) $   (1,365) $    3,571
Life insurance and annuities ................................................              (701)     (8,091)      1,577
                                                                                     ----------  ----------  ----------
                                                                                         (1,285)     (9,456)      5,148
Reconciliation of segment amounts to consolidated amounts:
Interest and other fee income................................................               366         125          53
Corporate expenses...........................................................            (2,312)     (2,415)     (3,478)
Interest expense.............................................................                (4)       (105)       (676)
                                                                                     ----------  ----------  ----------
Consolidated income (loss) from continuing operations before
  income taxes...............................................................        $   (3,235) $  (11,851) $    1,047
                                                                                     ----------  ----------  ----------
                                                                                     ----------  ----------  ----------
</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,
                                                                                     ----------------------------------
                                                                                        2005        2004        2003
                                                                                     ----------  ----------  ----------
                                                                                               (In thousands)
Revenues and net investment gains (losses):
<S>                                                                                  <C>         <C>         <C>
Consulting fees..............................................................        $      536  $      490  $        -
Net realized investment gains (losses).......................................                 -       2,010      (2,107)
Change in net unrealized investment gains and losses on
   trading securities........................................................                (1)     (2,625)      6,794
                                                                                     ----------  ----------  ----------
Total revenues and net investment gains (losses).............................               535        (125)      4,687

Operating expenses...........................................................             1,119       1,240       1,116
                                                                                     ----------  ----------  ----------
Income (loss) from continuing operations before income taxes.................        $     (584) $   (1,365) $    3,571
                                                                                     ----------  ----------  ----------
                                                                                     ----------  ----------  ----------
</TABLE>

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.

                                       12
<PAGE>

     Operating  expenses in 2005 were $1.1 million,  compared to $1.2 million in
2004.  The $0.1 million  decrease was  attributable  primarily to a reduction in
staff costs and facility expenses.  The decrease reflects our overall efforts to
reduce operating costs.

2004 compared to 2003

     In 2004,  the venture  capital and  consulting  segment  contributed a loss
before  income  taxes  of $1.4  million  to our  overall  loss  from  continuing
operations before income taxes,  compared to income before taxes of $3.6 million
in 2003.  The 2003  results  were  attributable  primarily  to net  realized and
unrealized investment gains and losses on listed equity securities. During 2004,
we began  earning  fee  income by  advising  a small  number  of North  American
technology  companies.  Consulting fees of $490,000 were earned;  however,  this
income did not cover all of the operating expenses of the segment.

     The change in net unrealized  gains and losses in the listed equity trading
portfolio during 2004 was a loss of $2.6 million,  which was partially offset by
net realized gains of $2.0 million.  The trading  portfolio  decreased from $3.4
million as of December 31, 2003 to $0.1 million as of December 31, 2004. We sold
most of our trading  positions during 2004, which resulted in net realized gains
of $1.9  million  based  on an  aggregate  original  cost of $0.8  million.  All
intersegmental   investment  gains  and  losses  have  been  eliminated  in  our
consolidated statements of operations.

     Operating  expenses in 2004 were $1.2 million,  compared to $1.1 million in
2003. The $0.1 million increase was  attributable  primarily to additional staff
costs,  reflecting  the additional  resources  required to redevelop our venture
capital and consulting business.

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,
                                                                                     ----------------------------------
                                                                                        2005        2004        2003
                                                                                     ----------  ----------  ----------
                                                                                               (In thousands)
Revenues and net investment gains (losses):
<S>                                                                                  <C>         <C>         <C>
Investment income............................................................        $    1,213  $    1,295  $    1,834
Insurance policy charges.....................................................                 4           4           6
Net realized investment gains (losses).......................................               (43)      1,273     (38,329)
Change in net unrealized investment gains and losses on
   trading securities........................................................                18      (8,331)     40,947
                                                                                     ----------  ----------  ----------
Total revenues and net investment gains (losses).............................             1,192      (5,759)      4,458

Expenses:
Amounts credited on insurance policyholder accounts..........................               980       1,358       1,922
General and administrative expenses..........................................               913         974         959
                                                                                     ----------  ----------  ----------
Total expenses...............................................................             1,893       2,332       2,881
                                                                                     ----------  ----------  ----------
Income (loss) from continuing operations before income taxes.................        $     (701) $   (8,091) $    1,577
                                                                                     ----------  ----------  ----------
                                                                                     ----------  ----------  ----------
</TABLE>

     As  previously  disclosed in our 2002  through 2004 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 90% of LPAL's $140.2
million in policyholder liabilities as of June 30, 2002 have been surrendered or
have matured as of December 31, 2005.  Policyholder  liabilities  as of December
31, 2005

                                       13
<PAGE>

were $13.6 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.

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
improved during 2005 compared to 2004, from negative $63,000 in 2004 to positive
$233,000 in 2005.  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 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  has  been  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.

     Policyholder  liabilities  as of December  31,  2005 were $13.6  million of
which $10.6  million is  scheduled to mature  during 2006.  LPAL expects to meet
these  maturities  primarily by using the proceeds from maturing bonds which are
estimated to be $13.7 million during 2006, and estimated  interest  income to be
received during 2006 of $1.1 million. In the absence of significant redemptions,
policyholder  liabilities are projected to be approximately  $3.0 million at the
end of 2006.

     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 is primarily due
to lower staff costs.

2004 compared to 2003

     In 2004, LPAL contributed a loss before income taxes of $8.1 million to our
overall loss from continuing  operations before income taxes, compared to income
before income taxes of $1.6 million in 2003.  Net realized  investment  gains in
2004 were $1.3  million  compared  to net  realized  investment  losses of $38.3
million in 2003. The loss from the change in net unrealized investment gains and
losses was $8.3 million in 2004, compared to a gain of $40.9 million in 2003. In
2004, the spread between investment income and amounts credited to policyholders
increased by $25,000,  and general and administrative  expenses remained flat at
$1.0 million, each as compared to 2003.

     LPAL did not generate any premiums during 2004 or 2003.  LPAL  discontinued
selling new policies on July 2, 2002 as mentioned above.

                                       14
<PAGE>

     Interest  and  dividend  income on  investments  was $1.3  million in 2004,
compared with $1.8 million in 2003. This $0.5 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, 2003.

     Net  investment  losses  totaled  $7.1  million  in 2004,  compared  to net
investment  gains of $2.6 million in 2003.  Net  investment  losses in 2004 were
comprised of net realized  investment  gains of $1.3 million and $8.3 million in
losses  from the change in net  realized  gains and losses on the listed  equity
securities held in the trading portfolio.  The trading portfolio  decreased from
$13.5  million as of December  31, 2003 to $0.5 million as of December 31, 2004.
LPAL sold its remaining  Packeteer,  Inc. holding during 2004, which resulted in
net realized  gains of $4.9 million based on an aggregate  original cost of $4.4
million.  These  realized gains were  partially  offset by  other-than-temporary
impairment  charges on one private equity security holding totaling $3.4 million
and one of LPAL's trading positions was acquired by a larger listed company,  in
exchange for $0.3 million of stock in the acquiring company, which resulted in a
realized loss of $0.3 million based on an original cost of $0.6 million.

     Total invested  assets  decreased to $33.1 million as of December 31, 2004,
compared to $47.9 million as of December 31, 2003, primarily due to policyholder
benefits paid of $9.8 million and net  investment  losses of $7.1 million during
2004.  On total  average  invested  assets  in 2004,  the  average  net  return,
including both realized and unrealized  investment gains and losses, was -15.3%,
compared with 8.9% in 2003.

     Amounts credited on policyholder accounts decreased by $0.5 million in 2004
to $1.4 million,  compared to $1.9 million in 2003.  This decrease was primarily
due to policy  maturities  since December 31, 2003. The average rate credited to
policyholders was 5.6% in 2004, compared with 5.9% in 2003.

Corporate and Other

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  described in Note 11 to the
Consolidated Financial Statements in Item 8 of this Form 10-K.

2004 compared to 2003

     Corporate  expenses  decreased by $1.1 million to $2.4 million in 2004,  as
compared to $3.5  million for 2003.  This  decrease was  primarily  due to lower
facilities costs, professional services fees and insurance costs.

     Since we fully repaid and terminated our bank facility during June 2003, we
did not incur any  borrowing  costs in 2004,  compared to $0.7  million in 2003.
However,  we did  pay  $0.1  million  in  interest  during  2004  related  to an
additional California tax liability for tax years 1998 and 1999.

Consolidated Income (Loss) from Continuing Operations Before Income Taxes

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 $26,000 in
2005, compared to net realized and unrealized  investment losses of $7.7 million
in 2004.

     Due to the sales of almost all of our listed equity securities during 2004,
our results are no longer significantly impacted by equity market volatility.

                                       15
<PAGE>

     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.

2004 compared to 2003

     Our consolidated  loss from continuing  operations  before income taxes was
$11.9  million in 2004,  compared to income from  continuing  operations  before
income  taxes of $1.0  million in 2003.  This  change was  primarily  due to net
realized and unrealized  investment losses of $7.7 million in 2004,  compared to
net realized and  unrealized  investment  gains of $7.3 million in 2003.  During
both years,  we held  significant  levels of listed  equity  securities  and our
results were significantly impacted by equity market volatility.

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.

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.

2004 compared to 2003 (continuing operations)

     The $0.3 million tax expense for 2004 is primarily an additional California
tax  liability  related to tax years 1998 and 1999 which we paid in 2004.  Other
than these taxes and $7,000 of other tax expense,  primarily minimum  California
taxes,  no other tax expense or benefits  are  applicable  to our Group for this
period. Losses were contributed by our Jersey and Guernsey operations, primarily
consisting  of net realized and  unrealized  investment  losses for which no tax
benefits will be realized.  Losses were also contributed by our U.S subsidiaries
during 2004; however, we did not recognize any U.S. tax benefits due to the 100%
valuation allowances that we have provided for all deferred tax assets.

2003 (disposal of discontinued operations)

     We  recorded  $36,000 of income tax  expense on book gains  totaling  $11.7
million  from the sales of Berkeley  Capital  Management  ("BCM") and LPA during
2003.  Income taxes based on statutory tax rates applied to the taxable gains on
these sales were  approximately  $4.9  million.  However,  due to net  operating
losses in the U.S. tax groups in the current and prior  years,  and capital loss
carryovers  from prior years, we were able to offset all of the taxes related to
the  gains on the sale of BCM and LPA,  except  for a small  amount  of  federal
alternative minimum tax.

Discontinued Operations

     There were no results to report  for  discontinued  operations  for 2004 or
2005, as we completed the sales of BCM and LPA in the second quarter of 2003.

     Our  consolidated  statement of operations for 2003 includes the results of
discontinued  operations  for the first four months of 2003, in the case of BCM,
and for the first five months of 2003,  in the case of LPA. It also includes the
gain on sale of both BCM and LPA totaling $11.7 million. For further information
see Note 2 to the Consolidated Financial Statements in Item 8 of this Form 10-K.

                                       16
<PAGE>


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  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  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.

                                       17
<PAGE>

     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 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).

Contingent Liabilities

     As discussed in Note 11 to the Consolidated  Financial Statements in Item 8
of this Form 10-K, we are involved in various matters that may or may not result
in a loss to the Group. We account for contingent liabilities in accordance with
Statement  of   Financial   Accounting   Standards   No.  5,   "Accounting   for
Contingencies."  As such, in situations where we believe that a loss is probable
and where we can  reasonably  estimate the amount of the loss, we will recognize
that estimated loss in our financial  statements.  Because of the  uncertainties
that exist, we cannot predict the outcome of the pending matters with certainty.
Actual results may differ from our estimates,  and the ultimate outcome of these
matters  could  have a  significant  impact on our  results  of  operations  and
financial position.

                                       18
<PAGE>

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 2005 by $9.5 million from
$19.5  million as of December 31, 2004 to $10.0 million as of December 31, 2005.
This decrease in cash and cash equivalents primarily resulted from $6.7 million,
$1.7 million and $0.5 million of cash used in  financing  activities,  investing
activities  and  operating  activities,  respectively.  Cash  used in  financing
activities related to insurance policyholder benefits paid by LPAL. Cash used in
investing  activities  primarily  related  to the  purchase  of  fixed  maturity
securities  by the Group and LPAL,  partially  offset by the  maturity  of fixed
maturity  securities  held  by LPAL  and  the  Group.  Cash  used  in  operating
activities  primarily  resulted from the $3.2 million  operating  loss for 2005,
partially offset by the sale of trading securities. As of December 31, 2005, our
cash and cash equivalents,  excluding the amount held by LPAL,  amounted to $0.5
million,  a decrease of $9.3 million from December 31, 2004.  We purchased  $8.5
million in corporate  bonds and U.S.  government  agency  securities  during the
first  quarter of 2005 in order to increase our yields on our liquid  resources.
Of these securities,  $1.4 million matured during 2005, and all of the remaining
securities matured on or before February 1, 2006.  Excluding LPAL's investments,
we also held $0.1 million of listed equity securities which could be sold within
a short period of time as of December  31, 2005,  compared to $0.1 million as of
December 31, 2004 and $3.4 million as of December 31, 2003.

     The $9.5 million of cash and cash  equivalents held by LPAL, as well as the
$14.7 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  2005 by $3.3  million  from $22.9
million at December 31, 2004 to $19.6 million as of December 31, 2005, primarily
due to the net loss for the period of $3.2 million.  As of December 31, 2005 and
2004, $62.6 million and $63.6 million,  respectively, 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 2005, LPAL continued to service its existing  policyholders.  During this
period,  policy surrenders  totaled $0.2 million and policy  maturities  totaled
$6.5  million.  Policyholder  liabilities  were $13.6 million as of December 31,
2005,  compared  to $21.2  million as of  December  31,  2004.  We do not expect
significant surrender activity during 2006; however, approximately $10.6 million
of policyholder liabilities are scheduled to mature during this period. LPAL has
sufficient liquid resources to fund these  maturities.  As of December 31, 2005,
LPAL had cash of $9.5 million,  accrued interest  receivable of $0.4 million and
corporate bonds of $13.8 million.

     In prior  periods,  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  Packeteer,  Inc. common stock holding during 2004, and the
sale of LPAL's remaining $0.5 million of listed equity holdings in January 2005,
fluctuations  in the market value of LPAL's  listed  equity  securities  will no
longer have an impact on LPAL's required statutory capital level.

     As of December 31, 2005, 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, 2005,  we had $0.5 million of cash and cash  equivalents
and $7.0 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 early  2006 from our bond  maturities  are  sufficient  to fund our
operations  (venture  capital and consulting and corporate  activities)  over at
least the next 12 months. As discussed in Note 11 to the Consolidated  Financial
Statements  in Item 8 of this  Form  10-K,  we are  involved  in  certain  legal

                                       19
<PAGE>


proceedings for which we have incurred and will incur  attorneys' fees and other
costs. The amount of such future fees and costs is currently unknown,  though we
believe that our cash and liquid  resources are sufficient to cover these costs,
in addition to our normal operating expenses, over at least the next 12 months.

     As of December 31, 2005, we had $1.0 million of cash held in escrow related
to our  sale  of LPA to  SunGard  as  discussed  in  Note 4 to the  Consolidated
Financial  Statements in Item 8 of this Form 10-K. Due to the legal  proceedings
described in Note 11 to the Consolidated  Financial Statements in Item 8 of this
Form 10-K, the release of the escrow amount is currently uncertain.  We have not
made any reserve against this $1.0 million held in escrow.

     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
staffing levels in early 2005. Due to employee  severance  costs,  the impact of
these staff cost  reductions will not be fully realized on an annual basis until
2006. In addition,  we have  implemented  or are in the process of  implementing
other cost reductions.


CONTRACTUAL OBLIGATIONS AND CONTINGENT LIABILITIES AND COMMITMENTS

     The following  table  aggregates our expected  contractual  obligations and
commitments subsequent to December 31, 2005.

<TABLE>
<CAPTION>
                                                                  2007 -        2009 -      Beyond
Contractual obligations (1)                           2006         2008          2010        2010           Total
-------------------------------------             ----------- -----------  -----------  -----------     -----------
                                                                            (In thousands)

<S>                                                   <C>         <C>          <C>         <C>              <C>
Deferred annuity policy maturities...........         $10,752     $ 2,922      $   128     $      -         $13,802
Capital lease commitments....................               -           -            -            -               -
Operating lease commitments (2)..............             221         230          173            -             624
                                                  ----------- -----------  -----------  -----------     -----------
Total contractual cash obligations...........         $10,973     $ 3,152      $   301     $      -         $14,426
                                                  ----------- -----------  -----------  -----------     -----------
                                                  ----------- -----------  -----------  -----------     -----------
<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 are currently evaluating
    sublease options for which no commitment has been entered into as of the date of filing of this Form 10-K.
</FN>
</TABLE>


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 in LPAL is expected to yield less than $0.2 million  during 2006,
therefore  movements in market  interest rates should not have a material impact
on our consolidated results.

                                       20
<PAGE>

Equity Price Risk

     We are  exposed  to equity  price  risk on our  holdings  of listed  equity
securities. Changes in the level or volatility of equity prices affect the value
of our listed  equity  securities.  These  changes in turn  directly  affect our
consolidated  net income  because our holdings of listed equity  securities  are
marked to market, with changes in their market value recognized in the statement
of  operations  for the period in which the changes  occur.  These listed equity
securities  represent  investments  that were  originally made as private equity
investments in high technology companies that subsequently  completed an initial
public offering. The performance of these listed equity securities can be highly
volatile; however, we monitor them and seek to sell them over a period of time.

     Prior to September  30, 2004,  we held levels of listed  equity  securities
which exposed us to  significant  equity price risk and resulting  volatility in
our  reported  earnings.  Subsequent  to the sale of our  remaining  holding  in
Packeteer,  Inc.  common  stock on September  30, 2004,  the market value of our
listed equity  trading  portfolio was only $0.6 million as of December 31, 2004.
During January 2005, we sold $0.5 million of the listed equity  securities  that
we held as of December 31, 2004.  As of December 31, 2005,  we held only $84,000
of listed equity  securities.  At this level,  there is a greatly reduced equity
price risk and  fluctuations in the market value of our remaining  listed equity
securities should not have a material impact on our earnings in future periods.

     As of December 31, 2005, 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.

                                       21
<PAGE>


Item 8.    FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA

<TABLE>
<CAPTION>

                                              INDEX TO CONSOLIDATED FINANCIAL STATEMENTS

                                                                                                             Page

<S>                                                                                                           <C>
Report of Independent Registered Public Accounting Firm.....................................................  23

Consolidated Balance Sheets as of December 31, 2005 and 2004................................................  24

Consolidated Statements of Operations for the Years Ended
December 31, 2005, 2004 and 2003............................................................................  25

Consolidated Statements of Cash Flows for the Years Ended
December 31, 2005, 2004 and 2003............................................................................  27

Consolidated Statements of Changes in Shareholders' Equity for the Years Ended
December 31, 2005, 2004 and 2003............................................................................  29

Consolidated Statements of Comprehensive Income for the Years Ended
December 31, 2005, 2004 and 2003............................................................................  30

Notes to Consolidated Financial Statements..................................................................  31


</TABLE>

                                       22
<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, 2005 and 2004 and the
related consolidated statements of operations,  changes in shareholders' equity,
cash flows, and  comprehensive  income for each of the three years in the period
ended December 31, 2005. We have also audited the schedules on pages 66 to 71 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,  2005 and 2004,  and the  results  of its
operations  and its cash flows for each of the three  years in the period  ended
December 31, 2005, in conformity with accounting  principles  generally accepted
in the United States of America.

     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 3, 2006



                                       23
<PAGE>

                  BERKELEY TECHNOLOGY LIMITED AND SUBSIDIARIES

                           CONSOLIDATED BALANCE SHEETS
                      (In thousands, except share amounts)
<TABLE>
<CAPTION>

                                                                                          December 31,
                                                                                     ----------------------
                                                                                        2005        2004
                                                                                     ----------  ----------
                                            ASSETS

Investments (principally of life insurance subsidiary):
   Fixed maturities:
<S>                                                                                  <C>         <C>
     Available-for-sale, at fair value (amortized cost: $13,809 and $21,341
       as of December 31, 2005 and 2004, respectively)............................   $   13,829  $   21,377
     Held-to-maturity, at amortized cost (fair value: $6,982 and $0 as of
       December 31, 2005 and 2004, respectively)..................................        7,011           -
   Equity securities:
     Trading, at fair value (cost: $102 and $586 as of December 31,
       2005 and 2004, respectively)...............................................           84         552
     Available-for-sale, at estimated fair value (cost: $850 as of
       December 31, 2005 and 2004)................................................          850         850
                                                                                     ----------  ----------
Total investments.................................................................       21,774(1)   22,779

Cash and cash equivalents.........................................................       10,039(1)   19,495
Cash held in escrow...............................................................        1,027       1,005
Accrued investment income.........................................................          609         737
Property and equipment, net.......................................................           43          70
Other assets......................................................................          311         621
                                                                                     ----------  ----------
Total assets......................................................................   $   33,803  $   44,707
                                                                                     ----------  ----------
                                                                                     ----------  ----------
                        LIABILITIES AND SHAREHOLDERS' EQUITY
Liabilities:
Life insurance policy liabilities.................................................   $   13,573  $   21,229
Accounts payable and accruals.....................................................          627         585
                                                                                     ----------  ----------
Total liabilities.................................................................       14,200      21,814
                                                                                     ----------  ----------
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, 2005
   and 2004.......................................................................        3,222       3,222
Additional paid-in capital........................................................       67,660      68,615
Retained earnings.................................................................       11,682      14,929
Employee benefit trusts, at cost (13,522,381 and 13,684,881 shares as of
   December 31, 2005 and 2004, respectively)......................................      (62,598)    (63,571)
Accumulated other comprehensive loss..............................................         (363)       (302)
                                                                                     ----------  ----------
Total shareholders' equity........................................................       19,603      22,893
                                                                                     ----------  ----------
Total liabilities and shareholders' equity........................................   $   33,803  $   44,707
                                                                                     ----------  ----------
                                                                                     ----------  ----------
<FN>
(1) Includes $14,673 of investments and $9,505 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.

                                       24
<PAGE>


                  BERKELEY TECHNOLOGY LIMITED AND SUBSIDIARIES

                      CONSOLIDATED STATEMENTS OF OPERATIONS
                (In thousands, except per share and ADS amounts)
<TABLE>
<CAPTION>
                                                                                          Years Ended December 31,
                                                                                     ----------------------------------
                                                                                        2005        2004        2003
                                                                                     ----------  ----------  ----------

Revenues:
<S>                                                                                  <C>         <C>         <C>
Investment income............................................................        $    1,562  $    1,397  $    1,887
Insurance policy charges.....................................................                 4           4           6
Consulting and other fee income..............................................               553         513           -
Net realized investment gains (losses).......................................               (43)      4,700     (15,312)
Change in net unrealized investment gains and losses on trading
   securities................................................................                17     (12,373)     22,617
                                                                                     ----------  ----------  ----------
                                                                                          2,093      (5,759)      9,198
Expenses:
Amounts credited on insurance policyholder accounts..........................               980       1,358       1,922
Operating expenses...........................................................             4,344       4,629       5,553
Interest expense.............................................................                 4         105         676
                                                                                     ----------  ----------  ----------
                                                                                          5,328       6,092       8,151
                                                                                     ----------  ----------  ----------
Income (loss) from continuing operations before income taxes.................            (3,235)    (11,851)      1,047

Income tax expense (benefit).................................................                12         290         (42)
                                                                                     ----------  ----------  ----------
Income (loss) from continuing operations.....................................            (3,247)    (12,141)      1,089


Discontinued operations:
Loss from discontinued operations, net of income
   tax expense of $0, $0 and $2, respectively................................                 -           -      (1,758)
Income on disposal of discontinued operations, net of income
   tax expense of $0, $0 and $36, respectively...............................                 -           -      11,685
                                                                                     ----------  ----------  ----------
Income on discontinued operations............................................                 -           -       9,927
                                                                                     ----------  ----------  ----------
Net income (loss)............................................................        $   (3,247) $  (12,141) $   11,016
                                                                                     ----------  ----------  ----------
                                                                                     ----------  ----------  ----------
</TABLE>

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

                                       25
<PAGE>

                  BERKELEY TECHNOLOGY LIMITED AND SUBSIDIARIES

                CONSOLIDATED STATEMENTS OF OPERATIONS (Continued)
                (In thousands, except per share and ADS amounts)
<TABLE>
<CAPTION>
                                                                                          Years Ended December 31,
                                                                                     ----------------------------------
                                                                                        2005        2004        2003
                                                                                     ----------  ----------  ----------
Basic earnings (loss) per share and ADS:

Basic earnings (loss) per share:
<S>                                                                                  <C>         <C>         <C>
Continuing operations........................................................        $    (0.06) $    (0.24) $     0.02
Discontinued operations......................................................                 -           -        0.20
                                                                                     ----------  ----------  ----------
                                                                                     $    (0.06) $    (0.24) $     0.22
                                                                                     ----------  ----------  ----------
                                                                                     ----------  ----------  ----------
Basic earnings (loss) per ADS:
Continuing operations........................................................        $    (0.64) $    (2.39) $     0.21
Discontinued operations......................................................                 -           -        1.96
                                                                                     ----------  ----------  ----------
                                                                                     $    (0.64) $    (2.39) $     2.17
                                                                                     ----------  ----------  ----------
                                                                                     ----------  ----------  ----------
Diluted earnings (loss) per share and ADS:

Diluted earnings (loss) per share:
Continuing operations........................................................        $    (0.06) $    (0.24) $     0.02
Discontinued operations......................................................                 -           -        0.20
                                                                                     ----------  ----------  ----------
                                                                                     $    (0.06) $    (0.24) $     0.22
                                                                                     ----------  ----------  ----------
                                                                                     ----------  ----------  ----------
Diluted earnings (loss) per ADS:
Continuing operations........................................................        $    (0.64) $    (2.39) $     0.21
Discontinued operations......................................................                 -           -        1.94
                                                                                     ----------  ----------  ----------
                                                                                     $    (0.64) $    (2.39) $     2.15
                                                                                     ----------  ----------  ----------
                                                                                     ----------  ----------  ----------
</TABLE>



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

                                       26
<PAGE>

                  BERKELEY TECHNOLOGY LIMITED AND SUBSIDIARIES

                      CONSOLIDATED STATEMENTS OF CASH FLOWS
                                 (In thousands)

<TABLE>
<CAPTION>
                                                                                          Years Ended December 31,
                                                                                     ----------------------------------
                                                                                        2005        2004        2003
                                                                                     ----------  ----------  ----------
Cash flows from continuing operating activities:
<S>                                                                                  <C>         <C>         <C>
Net income (loss)............................................................        $   (3,247) $  (12,141) $    1,089

Adjustments to reconcile net income (loss) to net
   cash provided by (used in) operating activities:
Depreciation and amortization................................................                36          53          79
Amounts credited on insurance policyholder accounts..........................               980       1,358       1,922
Net realized investment losses (gains).......................................                43      (4,700)     15,312
Change in net unrealized investment gains and losses
   on trading securities.....................................................               (17)     12,373     (22,617)
Net amortization of investment premiums and discounts........................               656         572         313

Net changes in operating assets and liabilities:
   Trading equity securities.................................................               441      12,009      11,879
   Accrued investment income ................................................               128         189         (26)
   Other assets..............................................................               310        (112)        733
   Life insurance policy liabilities.........................................                (4)         (4)         (6)
   Accounts payable, accruals and other liabilities..........................               193         174        (804)
   Income taxes payable......................................................                 7          17         (26)

Other operating cash flows...................................................               (22)         (6)        223
                                                                                     ----------  ----------  ----------
Net cash provided by (used in) continuing operations.........................              (496)      9,782       8,071
                                                                                     ----------  ----------  ----------
Capital paid in to discontinued operations...................................                 -           -        (523)
                                                                                     ----------  ----------  ----------
Net cash used in discontinued operations.....................................                 -           -        (523)
                                                                                     ----------  ----------  ----------
Net cash provided by (used in) operating activities..........................              (496)      9,782       7,548
                                                                                     ----------  ----------  ----------
Cash flows from investing activities:
Payment of guarantee obligations.............................................                 -           -     (10,836)
Purchases of held-to-maturity fixed maturity securities......................            (8,510)          -           -
Purchases of available-for-sale fixed maturity securities....................            (5,121)          -     (17,096)
Purchases of available-for-sale equity securities............................                 -         (15)          -
Proceeds from maturity of held-to-maturity fixed maturity securities.........             1,350           -           -
Proceeds from sale and maturity of available-for-sale fixed
   maturity securities.......................................................            10,611       5,060      24,595
Proceeds from sale of available-for-sale equity securities...................                 -          75           9
Proceeds from disposal of discontinued operations............................                 -           -      16,148
Capital expenditures.........................................................                (9)         (5)         (4)
                                                                                     ----------  ----------  ----------
Net cash provided by (used in) investing activities .........................            (1,679)      5,115      12,816
                                                                                     ----------  ----------  ----------


</TABLE>



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

                                       27
<PAGE>

                  BERKELEY TECHNOLOGY LIMITED AND SUBSIDIARIES

                CONSOLIDATED STATEMENTS OF CASH FLOWS (Continued)
                                 (In thousands)
<TABLE>
<CAPTION>
                                                                                          Years Ended December 31,
                                                                                     ----------------------------------
                                                                                        2005        2004        2003
                                                                                     ----------  ----------  ----------
Cash flows from financing activities:
<S>                                                                                  <C>         <C>        <C>
Insurance policyholder benefits paid.........................................            (6,749)     (9,824)    (12,330)
Proceeds from disposal of shares by the employee benefit trusts..............                18           -           -
Repayments of notes payable..................................................                 -           -      (9,314)
                                                                                     ----------  ----------  ----------
Net cash used in financing activities........................................            (6,731)     (9,824)    (21,644)
                                                                                     ----------  ----------  ----------

Net increase (decrease) in cash and cash equivalents.........................            (8,906)      5,073      (1,280)
Cash and cash equivalents at beginning of year (1)...........................            19,495      14,408      15,308
Foreign currency translation adjustment......................................              (550)         14         380
                                                                                     ----------  ----------  ----------
Cash and cash equivalents at end of year (1), (2)............................        $   10,039  $   19,495  $   14,408
                                                                                     ----------  ----------  ----------
                                                                                     ----------  ----------  ----------


Supplemental disclosure of cash flow information: (1)

Cash paid (received) during the year for:
Interest.....................................................................        $        4  $      105  $      501
Income taxes (net of amounts recovered)......................................        $        5  $      274  $      (51)

Supplemental disclosure of non-cash investing activities:
Exchange of available-for-sale equity securities for trading equity
   securities................................................................        $        -  $       98  $        3

<FN>
(1)   Amounts reflect continuing operations only.  Does not include $1,027 of cash held in escrow as of December 31, 2005.

(2)   The amount for December 31, 2005 includes $9,505 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.
</FN>
</TABLE>


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

                                       28
<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, 2003       64,439  $   3,222  $  68,394  $  16,054  $ (63,571) $  (2,613) $  21,486

Net income......................         -          -          -     11,016          -          -     11,016
Change in net unrealized
   gains and losses on
   available-for-sale securities         -          -          -          -          -      1,886      1,886
Foreign currency translation
   adjustment...................         -          -          -          -          -        288        288
Warrants issued to bank.........         -          -        221          -          -          -        221
                                 ---------  ---------  ---------  ---------  ---------  ---------  ---------
Balance as of
   December 31, 2003............    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
                                 ---------  ---------  ---------  ---------  ---------  ---------  ---------
                                 ---------  ---------  ---------  ---------  ---------  ---------  ---------

</TABLE>

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

                                       29
<PAGE>

                  BERKELEY TECHNOLOGY LIMITED AND SUBSIDIARIES

                 CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME
                                 (In thousands)

<TABLE>
<CAPTION>
                                                                                          Years Ended December 31,
                                                                                     ----------------------------------
                                                                                        2005        2004        2003
                                                                                     ----------  ----------  ----------
<S>                                                                                  <C>         <C>         <C>
Net income (loss)............................................................        $   (3,247) $  (12,141) $   11,016

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

Foreign currency translation adjustments, net of income taxes of $0..........               (45)         91         288

Change in net unrealized gains and losses related to continuing operations:
   Unrealized holding gains and losses on available-for-sale securities......               (44)         64          54
   Reclassification adjustment for gains and losses included in
     net income (loss).......................................................                28         (18)      1,832
   Deferred income taxes.....................................................                 -           -           -
                                                                                     ----------  ----------  ----------
Other comprehensive income (loss)............................................               (61)        137       2,174
                                                                                     ----------  ----------  ----------
Comprehensive income (loss)..................................................        $   (3,308) $  (12,004) $   13,190
                                                                                     ----------  ----------  ----------
                                                                                     ----------  ----------  ----------
</TABLE>
     See  accompanying  Notes which are an integral  part of these  Consolidated
Financial Statements.

                                       30
<PAGE>


                  BERKELEY TECHNOLOGY LIMITED AND SUBSIDIARIES

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                DECEMBER 31, 2005

     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

                                       31
<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.

                                       32
<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.

     Listed equity  securities  received as a result of an acquisition of one of
the Group's  investee  companies by a publicly  traded  company that are held in
escrow by an escrow agent,  are recognized in the financial  statements when the
transaction is completed.  Reductions are made to the number of shares of listed
equity securities held in escrow that are carried in the financial statements as
claims are made by the  acquiring  company  against the  escrow,  or if evidence
exists that a claim is probable.

     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.

Stock Based Compensation

     The Company  accounts for stock based  compensation  issued to employees in
accordance  with  Accounting   Principles  Board  Opinion  No.  25  ("APB  25"),
"Accounting  for Stock Issued to Employees," and related  interpretations  which
recognizes  compensation  expense  based upon the  intrinsic  value of the stock
options  as of the date of  grant.  The  Financial  Accounting  Standards  Board
("FASB")  issued  Statement of  Financial  Accounting  Standards  No. 123 ("SFAS
123"), "Accounting for Stock Based Compensation," which encourages, but does not
require, companies to recognize compensation expense for grants of stock options
based on their fair value. The Company has elected, as permitted by SFAS 123, to
adopt the  disclosure  requirement  of SFAS 123 and to  continue  to account for
stock based compensation under APB 25.

     Had  compensation  expense for the Company's ESOT activity been  determined
based upon the fair value  method in  accordance  with SFAS 123,  the  Company's
consolidated  net income (loss) and earnings (loss) per share and ADS would have
been decreased or increased to the pro forma amounts as reflected below:
<TABLE>
<CAPTION>

                                                                                          Years Ended December 31,
                                                                                     ----------------------------------
                                                                                        2005        2004        2003
                                                                                     ----------  ----------  ----------
                                                                                       (In thousands, except per share
                                                                                              and ADS amounts)

<S>                                                                                  <C>         <C>         <C>
Net income (loss) as reported................................................        $   (3,247) $  (12,141) $   11,016
Add: Stock based employee compensation expense included in
   reported income (loss), net of related tax effects........................                 -           -           -

Deduct: Total stock based employee compensation expense determined
   under fair value based methods for all awards, net of related tax effects.               (39)       (190)       (145)
                                                                                     ----------  ----------  ----------
Pro forma net income (loss)..................................................        $   (3,286) $  (12,331) $   10,871
                                                                                     ----------  ----------  ----------
                                                                                     ----------  ----------  ----------


Basic earnings (loss) per share:
As reported..................................................................             (0.06)      (0.24)       0.22
Pro forma....................................................................             (0.06)      (0.24)       0.21
Basic earnings (loss) per ADS:
As reported..................................................................             (0.64)      (2.39)       2.17
Pro forma....................................................................             (0.65)      (2.43)       2.14
</TABLE>


                                      33
<PAGE>

                  BERKELEY TECHNOLOGY LIMITED AND SUBSIDIARIES

             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
<TABLE>
<CAPTION>

                                                                                          Years Ended December 31,
                                                                                     ----------------------------------
                                                                                        2005        2004        2003
                                                                                     ----------  ----------  ----------
                                                                                       (In thousands, except per share
                                                                                              and ADS amounts)

<S>                                                                                  <C>         <C>         <C>
Diluted earnings (loss) per share:
As reported..................................................................             (0.06)      (0.24)       0.22
Pro forma....................................................................             (0.06)      (0.24)       0.21
Diluted earnings (loss) per ADS:
As reported..................................................................             (0.64)      (2.39)       2.15
Pro forma....................................................................             (0.65)      (2.43)       2.12
Weighted-average fair value of options granted
   at market price during year...............................................              0.06           -           -
Weighted-average fair value of options granted
   at less than market price during year.....................................                 -           -           -

     The pro forma  disclosures  shown  above were  calculated  for all  options
granted after December 31, 1994 using a Black-Scholes  option pricing model with
the following assumptions:

                                                                                        2005      2004 (1)    2003 (1)
                                                                                     ----------  ----------  ----------
Expected dividend yield (2)..................................................                 -           -           -
Expected stock price volatility..............................................               34%           -           -
Risk-free interest rate......................................................             3.89%           -           -
Weighted-average expected life (in years)....................................              6.25           -           -

<FN>
(1) No grants were made in 2003 and 2004.
(2) Future dividends were not assumed, as dividends have not been paid since 2001.
</FN>
</TABLE>

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

                                       34
<PAGE>

                  BERKELEY TECHNOLOGY LIMITED AND SUBSIDIARIES

             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

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.

Recently Issued Accounting Pronouncements

     In December 2004, the Financial  Accounting Standards Board ("FASB") issued
Statement  of  Financial  Accounting  Standards  No. 123  (revised  2004) ("SFAS
123R"),  "Share-Based  Payment."  SFAS  123R  is a  revision  of  SFAS  123  and
supersedes APB 25. Among other items, SFAS 123R eliminates the use of APB 25 and
the intrinsic  value method of accounting,  and requires  companies to recognize
the cost of  employee  services  received  in  exchange  for  awards  of  equity
instruments,  based  on the  grant  date  fair  value of  those  awards,  in the
financial  statements.  SFAS 123R permits  companies  to adopt its  requirements
using  either a "modified  prospective"  method,  or a "modified  retrospective"
method. Under the "modified prospective" method, compensation cost is recognized
in the financial  statements  beginning  with the effective  date,  based on the
requirements of SFAS 123R for all share-based  payments granted after that date,
and based on the  requirements of SFAS 123 for all unvested awards granted prior
to the effective date of SFAS 123R. Under the "modified  retrospective"  method,
the requirements are the same as under the "modified  prospective"  method,  but
also permits entities to restate financial  statements of previous periods based
on proforma disclosures made in accordance with SFAS 123. On April 14, 2005, the
SEC approved a new rule that delays the effective  date of SFAS 123R.  Under the
SEC's rule,  SFAS 123R is now  effective  for the Company  beginning  January 1,
2006. The Company will adopt the "modified  prospective" method and expects that
the impact on its operating results will not be material.

     In May 2005, the FASB issued  Statement of Financial  Accounting  Standards
No. 154 ("SFAS  154"),  "Accounting  Changes  and Error  Corrections."  This new
standard replaces APB Opinion No. 20,  "Accounting  Changes in Interim Financial
Statements," and Statement of Financial  Accounting  Standards No. 3, "Reporting
Accounting Changes in Interim Financial Statements," and represents another step
in the FASB's goal to


                                       35
<PAGE>


                  BERKELEY TECHNOLOGY LIMITED AND SUBSIDIARIES

             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

converge  its  standards  with  those  issued  by the  International  Accounting
Standards Board. Among other changes,  SFAS 154 requires that a voluntary change
in  accounting  principle  be  applied  retrospectively  with all  prior  period
financial  statements  presented on the new accounting  principle,  unless it is
impracticable  to do so. SFAS 154 also  provides  that (1) a change in method of
depreciating or amortizing a long-lived nonfinancial asset be accounted for as a
change in estimate  (prospectively)  that was effected by a change in accounting
principle,   and  (2)  correction  of  errors  in  previously  issued  financial
statements  should be termed a "restatement."  The new standard is effective for
accounting changes and correction of errors made in fiscal years beginning after
December 15, 2005. Management does not expect the adoption of SFAS 154 to have a
material effect on the  consolidated  financial  statements.  As of December 31,
2005, this pronouncement had no impact on the consolidated financial statements.

     Emerging  Issues Task Force Issue No. 03-1 ("EITF  03-1"),  "The Meaning of
Other-Than-Temporary Impairment and Its Application to Certain Investments," was
issued  and is  effective  March 31,  2004.  EITF  03-1  provides  guidance  for
determining the meaning of "other-than-temporarily impaired" and its application
to certain debt and equity securities within the scope of Statement of Financial
Accounting  Standards No. 115 ("SFAS 115"),  "Accounting for Certain Investments
in Debt and Equity  Securities,"  and  investments  accounted for under the cost
method.  The guidance requires that investments which have declined in value due
to credit  concerns or solely due to changes in interest  rates must be recorded
as other-than-temporarily impaired unless the Company can assert and demonstrate
its intention to hold the security for a period of time  sufficient to allow for
a recovery of fair value up to or beyond the cost of the investment  which might
mean maturity.  This issue also requires  disclosures  assessing the ability and
intent to hold investments in instances in which an investor  determines that an
investment  with a fair  value  less  than  cost  is not  other-than-temporarily
impaired.  On September 30, 2004,  the FASB decided to delay the effective  date
for the measurement and recognition  guidance contained in EITF 03-1. This delay
does not suspend the requirement to recognize  other-than-temporary  impairments
as required by existing  authoritative  literature.  The disclosure  guidance in
EITF 03-1 was not delayed. Management continues to closely monitor the effect of
implementing   EITF   03-1,   but   does  not   believe   the   Group   has  any
"other-than-temporarily  impaired"  securities  at December 31, 2005. As of that
date, 65% of the Group's $20.8 million in fixed maturity  securities will mature
by March 31,  2006 and it is  management's  intent to hold these  securities  to
maturity.

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

(a) Berkeley Capital Management

     The Group entered into a definitive  agreement to sell substantially all of
the  assets  and  operations  of its  subsidiary,  Berkeley  Capital  Management
("BCM"),  on March 7, 2003, and on May 7, 2003 completed the sale. In connection
therewith,  the results of  operations  of BCM for 2003 up to  completion of the
sale have been reported in discontinued operations.

                                       36
<PAGE>


                  BERKELEY TECHNOLOGY LIMITED AND SUBSIDIARIES

             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

     A summary of BCM's pre-tax  operating  results for the year ended  December
31, 2003 is shown below.
<TABLE>
<CAPTION>
                                                                                                             Year Ended
                                                                                                            December 31,
                                                                                                              2003 (1)
                                                                                                           ------------
                                                                                                          (In thousands)
Revenues:
<S>                                                                                                        <C>
Asset management fees..............................................................................        $      1,369
                                                                                                           ------------
Total revenues.....................................................................................               1,369

Operating expenses.................................................................................               1,403
                                                                                                           ------------
Loss before income taxes...........................................................................        $        (34)
                                                                                                           ------------
                                                                                                           ------------
<FN>
(1) Partial year up to sale completion.
</FN>
</TABLE>

     The $7,949,000 gain on sale of discontinued  operations,  net of tax of $0,
was recorded in the second quarter of 2003 and reported in the Group's Form 10-Q
for that quarter.

     Previously,  BCM was  included in the  Group's  asset  management  business
segment.

(b) London Pacific Advisors

     On May 9, 2003,  the Group entered into a definitive  agreement to sell all
of the outstanding stock of its subsidiaries,  London Pacific Advisory Services,
Inc., London Pacific Securities,  Inc. and LPA Insurance Agency,  Inc., together
with the associated  assets of the advisory  business held within London Pacific
Technologies, Inc. and LP Advisors, Inc. (collectively, "LPA"). On June 5, 2003,
the Group completed the sale. In connection therewith, the results of operations
of LPA for 2003 up to completion of the sale have been reported as  discontinued
operations.

     A summary of LPA's pre-tax  operating  results for the year ended  December
31, 2003 is shown below.
<TABLE>
<CAPTION>
                                                                                                             Year Ended
                                                                                                            December 31,
                                                                                                              2003 (1)
                                                                                                           ------------
                                                                                                          (In thousands)
Revenues:
<S>                                                                                                        <C>
Investment income..................................................................................        $          4
Gross financial advisory services fees.............................................................               5,820
Payments due to independent advisors...............................................................              (3,477)
                                                                                                           -------------
Total net revenues.................................................................................               2,347

Expenses...........................................................................................               4,069
                                                                                                           ------------
Loss before income taxes...........................................................................        $     (1,722)
                                                                                                           ------------
                                                                                                           ------------
<FN>
(1) Partial year up to sale completion.
</FN>
</TABLE>

                                       37
<PAGE>


                  BERKELEY TECHNOLOGY LIMITED AND SUBSIDIARIES

             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

     The $3,772,000 gain on sale of discontinued operations,  and tax expense on
the gain of $36,000, were recorded in the second quarter of 2003 and reported in
the Group's Form 10-Q for that quarter.

     Previously,  LPA was included in the Group's  financial  advisory  services
business segment.


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,
                                ------------------------------------------------------------------------------------
                                                 2005                                         2004
                                ----------------------------------------   -----------------------------------------
                                           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.........     $  8,500  $     38  $       -  $   8,538   $  19,117  $      65  $    (29) $ 19,153
Corporate debt securities..        5,309         -        (18)     5,291       2,224          1        (1)    2,224
                                --------  --------  ---------  ---------   ---------  ---------  --------  ---------
                                  13,809        38        (18)    13,829      21,341         66       (30)   21,377
                                --------  --------  ---------  ---------   ---------  ---------  --------  ---------
Held-to-Maturity:
Corporate debt securities..        7,011         -        (29)     6,982           -          -         -         -
                                --------  --------  ---------  ---------   ---------  ---------  --------  --------
                                   7,011         -        (29)     6,982           -          -         -         -
                                --------  --------  ---------  ---------   ---------  ---------  --------  --------
Total fixed maturity securities $ 20,820  $     38  $     (47) $  20,811   $  21,341  $      66  $    (30) $ 21,377
                                --------  --------  ---------  ---------   ---------  ---------  --------  --------
                                --------  --------  ---------  ---------   ---------  ---------  --------  --------
</TABLE>

     As of December 31, 2005, there were no non-income  producing fixed maturity
securities for the twelve months preceding December 31, 2005.

                                       38
<PAGE>


                  BERKELEY TECHNOLOGY LIMITED AND SUBSIDIARIES

             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

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...........................    $   13,809     $    13,829      $     7,011       $     6,982
Due after one year through five years.............             -               -                -                 -
                                                    ------------    ------------     ------------      ------------
                                                      $   13,809     $    13,829      $     7,011       $     6,982
                                                    ------------    ------------     ------------      ------------
                                                    ------------    ------------     ------------      ------------
</TABLE>

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,
                                ------------------------------------------------------------------------------------
                                                 2005                                         2004
                                ----------------------------------------   -----------------------------------------
                                           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..............     $    850  $      -  $       -  $     850   $     850  $       -  $      -  $    850
                                --------  --------  ---------  ---------   ---------  ---------  --------  --------
Total available-for-sale
   equity securities.......          850         -          -        850         850          -         -       850

Trading securities.........          102         7        (25)        84         586         20       (54)      552
                                --------  --------  ---------  ---------   ---------  ---------  --------  --------
Total equity securities....     $    952  $      7  $     (25) $     934   $   1,436  $      20  $    (54) $  1,402
                                --------  --------  ---------  ---------   ---------  ---------  --------  --------
                                --------  --------  ---------  ---------   ---------  ---------  --------  --------
</TABLE>

     Trading securities are carried at fair value with changes in net unrealized
gains and losses of  $17,000,  $(12,373,000)  and  $22,617,000  included  in the
income  and  losses  for the  years  ended  December  31,  2005,  2004 and 2003,
respectively.

Investment Concentration and Risk

     As of  December  31,  2005,  fixed  maturity  securities  held by the Group
included  investments  in Ford Motor Credit  ("FMC") of  $6,007,000  and General
Motors Acceptance Corp. ("GMAC") of $5,995,000. These two corporate issuers each
represented  more than 10% of  shareholders'  equity as of  December  31,  2005.
However,  the FMC and GMAC bonds  matured on  February  1, 2006 and  January 15,
2006,  respectively,  and the Group received  repayment of principal in full and
all interest due on these bonds.

                                       39
<PAGE>


                  BERKELEY TECHNOLOGY LIMITED AND SUBSIDIARIES

             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

     As of  December  31,  2005,  the  Company's  Jersey  based  life  insurance
subsidiary,  LPAL,  owned 66% of the  Group's  $20.8  million in fixed  maturity
securities, 99% of the Group's $0.9 million in available-for-sale private equity
securities,  and none of the Group's  $84,000 in trading  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. 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  30.2% and 1.4% of total  fixed  maturity
securities as of December 31, 2005 and 2004,  respectively.  On May 5, 2005, one
of the two major credit  rating  agencies in the U.S.  downgraded  the long-term
credit  ratings  of FMC and GMAC to less than  investment  grade.  On August 24,
2005, the other major credit rating agency in the U.S.  downgraded the long-term
credit rating of GMAC to less than  investment  grade. As discussed  above,  the
Group's  FMC  and  GMAC  holdings,  which  total  $12.0  million  in  aggregate,
representing 57.6% of the Group's total fixed maturity securities as of December
31,  2005,  have  matured in early 2006.  Both  holdings  were repaid in full at
maturity of these bonds.

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

     Net   unrealized   gains  on  fixed  maturity   securities   classified  as
available-for-sale as of December 31, 2005 and 2004 totaled $20,000 and $36,000,
respectively. There were no related income taxes.

     There were no net  unrealized  losses on equity  securities  classified  as
available-for-sale as of December 31, 2005 or 2004.

     Changes in net unrealized gains and losses on available-for-sale securities
included in other  comprehensive  income for the years ended  December 31, 2003,
2004 and 2005 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, 2002       $     (146) $   (1,750) $   (1,896)

Changes during the year ended December 31, 2003:
   Unrealized holding gains and losses on available-for-sale securities......                54           -          54
   Reclassification adjustment for gains and losses included in net income...                82       1,750       1,832
                                                                                     ----------  ----------  ----------
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
                                                                                     ----------  ----------  ----------
                                                                                     ----------  ----------  ----------
</TABLE>

                                       40
<PAGE>

                  BERKELEY TECHNOLOGY LIMITED AND SUBSIDIARIES

             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

Net Investment Income

     The  details of  investment  income,  net of  investment  expenses,  are as
follows:
<TABLE>
<CAPTION>
                                                                                          Years Ended December 31,
                                                                                     ----------------------------------
                                                                                        2005        2004        2003
                                                                                     ----------  ----------  ----------
                                                                                               (In thousands)

<S>                                                                                  <C>         <C>         <C>
Interest on fixed maturity securities........................................        $    1,217  $    1,131  $    1,611
Interest on cash and cash equivalents........................................               347         268         280
                                                                                     ----------  ----------  ----------
Gross investment income......................................................             1,564       1,399       1,891
Investment expenses..........................................................                (2)         (2)         (4)
                                                                                     ----------  ----------  ----------
                                                                                          1,562       1,397       1,887
Amounts credited on insurance policyholder accounts..........................              (980)     (1,358)     (1,922)
                                                                                     ----------  ----------  ----------
Net investment income (loss).................................................        $      582  $       39  $      (35)
                                                                                     ----------  ----------  ----------
                                                                                     ----------  ----------  ----------
</TABLE>

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

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,
                                                                                     ----------------------------------
                                                                                        2005        2004        2003
                                                                                     ----------  ----------  ----------
                                                                                               (In thousands)

<S>                                                                                  <C>         <C>         <C>
Realized gains (losses) on securities transactions:
Fixed maturities, available-for-sale:
   Gross gains...............................................................        $        -  $        -  $       43
   Gross losses .............................................................                 -           -        (286)
                                                                                     ----------  ----------  ----------
Net realized losses on fixed maturities, available-for-sale..................                 -           -        (243)
                                                                                     ----------  ----------  ----------
Equity securities, trading:
   Gross gains...............................................................                22       8,219       4,874
   Gross losses..............................................................               (65)       (265)    (15,237)
                                                                                     ----------  ----------  ----------
Net realized gains (losses) on equity securities, trading....................               (43)      7,954     (10,363)
                                                                                     ----------  ----------  ----------
Equity securities, available-for-sale:
   Gross gains...............................................................                 -         121           9
   Gross losses..............................................................                 -      (3,375)     (4,715)
                                                                                     ----------  ----------  ----------
Net realized losses on equity securities, available-for-sale.................                 -      (3,254)     (4,706)
                                                                                     ----------  ----------  ----------

Net realized investment gains (losses) on securities transactions............        $      (43) $    4,700  $  (15,312)
                                                                                     ----------  ----------  ----------
                                                                                     ----------  ----------  ----------
</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

                                       41
<PAGE>

                  BERKELEY TECHNOLOGY LIMITED AND SUBSIDIARIES

             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

consolidated  statement of operations.  During 2003, the Group recorded realized
losses  totaling  $4.7 million in the  consolidated  statement of  operations on
three  private  equity  investments  in  technology  companies  that the Group's
management  determined  were  other-than-temporarily  impaired.  There  were  no
impairments recorded in 2005.


Note 4.    Cash Held in Escrow

     Cash  held in  escrow  consists  of the  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  within the 18 month  period
following  the close of the  transaction.  Funds  were due to be  released  with
accrued  interest in December 2004, less any amounts related to  indemnification
matters as set out in the sale and  purchase  agreement.  The  Company  was made
aware on March 8, 2005 of SunGard's  complaint with respect to alleged losses in
an amount equal to at least $7.2 million  resulting  from,  among other  things,
alleged  breaches of  representations  and warranties  contained in the sale and
purchase agreement.  SunGard is also seeking  indemnification  from the Company.
After consultation with its legal advisors, the Group's management believes that
this claim is without merit,  and the Group is defending the matter  vigorously.
Due to this  indemnification  claim by SunGard, the $1.0 million in cash held in
escrow was not released to the Group in December 2004 as scheduled.  The Company
has not made any reserve against the $1.0 million in escrow.

     For further  information  regarding  these legal  proceedings,  see Note 11
"Commitments and Contingencies" below.


Note 5.    Property and Equipment

     Property and equipment are carried at cost and consisted of the following:
<TABLE>
<CAPTION>

                                                                                           December 31,
                                                                                     ----------------------
                                                                                        2005        2004
                                                                                     ----------  ----------
                                                                                         (In thousands)

<S>                                                                                  <C>         <C>
Property, equipment and leasehold improvements....................................   $      745  $      743
Accumulated depreciation..........................................................         (702)       (673)
                                                                                     ----------  ----------
Property and equipment, net.......................................................   $       43  $       70
                                                                                     ----------  ----------
                                                                                     ----------  ----------
</TABLE>


Note 6.    Other Assets

     An analysis of other assets is as follows:
<TABLE>
<CAPTION>

                                                                                           December 31,
                                                                                     ----------------------
                                                                                        2005        2004
                                                                                     ----------  ----------
                                                                                         (In thousands)

<S>                                                                                  <C>         <C>
Prepayments.......................................................................   $      202  $      422
Receivables:
   Fee income receivable..........................................................           84         175
   Other receivables..............................................................           25          24
                                                                                     ----------  ----------
Total other assets................................................................   $      311  $      621
                                                                                     ----------  ----------
                                                                                     ----------  ----------
</TABLE>

                                       42
<PAGE>

                  BERKELEY TECHNOLOGY LIMITED AND SUBSIDIARIES

             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

Note 7.    Life Insurance Policy Liabilities

       An analysis of life insurance policy liabilities is as follows:
<TABLE>
<CAPTION>

                                                                                           December 31,
                                                                                     ----------------------
                                                                                        2005        2004
                                                                                     ----------  ----------
                                                                                         (In thousands)

<S>                                                                                  <C>         <C>
Deferred annuities - policyholder contract deposits...............................   $   13,322  $   21,091
Other policy claims and benefits..................................................          251         138
                                                                                     ----------  ----------
                                                                                     $   13,573  $   21,229
                                                                                     ----------  ----------
                                                                                     ----------  ----------
</TABLE>

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

Interest Rate Assumptions

     Guaranteed  reset rates were 3.0% for seven year annuity products issued in
2002.  For  three  and five  year  annuity  products,  credited  interest  rates
generally  ranged from 4.20% to 7.40% in 2005,  3.75% to 7.40% in 2004, and from
3.30% to 7.40% in 2003.

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 Jersey Financial Services  Commission ("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, 2005, LPAL met all of these conditions.

                                       43
<PAGE>


                  BERKELEY TECHNOLOGY LIMITED AND SUBSIDIARIES

             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

     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.


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 2005, 2004 and 2003.

     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.

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

                                                                                          Years Ended December 31,
                                                                                     ----------------------------------
                                                                                        2005        2004        2003
                                                                                     ----------  ----------  ----------
                                                                                               (In thousands)
<S>                                                                                  <C>         <C>         <C>
Income (loss) from continuing operations before income taxes:
Jersey, Guernsey and United Kingdom..........................................        $   (1,878) $  (11,049) $    2,570
United States................................................................            (1,357)       (802)     (1,523)

                                                                                     ----------  ----------  ----------
Total income (loss) from continuing operations before income taxes...........        $   (3,235) $  (11,851) $    1,047
                                                                                     ----------  ----------  ----------
                                                                                     ----------  ----------  ----------
</TABLE>

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

                                                                                          Years Ended December 31,
                                                                                     ----------------------------------
                                                                                        2005        2004        2003
                                                                                     ----------  ----------  ----------
                                                                                               (In thousands)
<S>                                                                                  <C>         <C>         <C>
Income tax expense (benefit) computed at Jersey statutory income tax
   rate of 20%...............................................................        $     (647) $   (2,370) $      209
Realized and unrealized investment losses (gains) not subject to taxation
   in Jersey.................................................................                 5       1,412        (474)
Other losses not deductible in Jersey........................................               359         619         896
Losses not deductible (income not taxable) in Guernsey.......................               (22)        144        (962)
Tax benefit on losses at higher than 20% statutory Jersey rate:
   Net loss on continuing operations in the U.S..............................              (310)       (183)       (348)
Adjustment of prior years' provisions........................................                11        (308)        (33)
Increase in valuation allowance..............................................               582         941      47,962
Less: valuation allowance related to discontinued operations.................                 -           -     (52,238)
Utilization of U.S. capital loss carryforwards for which a full valuation
   allowance had been provided in prior years................................                 -           -       4,100
Other........................................................................                34          35         846

                                                                                     ----------  ----------  ----------
Actual tax expense (benefit) for continuing operations ......................        $       12  $      290  $      (42)
                                                                                     ----------  ----------  ----------
                                                                                     ----------  ----------  ----------
</TABLE>

                                       44
<PAGE>

                  BERKELEY TECHNOLOGY LIMITED AND SUBSIDIARIES

             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

     The  components  of  the  actual  tax  expense   (benefit)  for  continuing
operations are as follows:
<TABLE>
<CAPTION>

                                                                                          Years Ended December 31,
                                                                                     ----------------------------------
                                                                                        2005        2004        2003
                                                                                     ----------  ----------  ----------
                                                                                               (In thousands)
<S>                                                                                  <C>         <C>         <C>
Jersey, Guernsey and United Kingdom:
   Current tax benefit.......................................................        $        -  $        -  $      (33)
   Deferred tax expense......................................................                 -           -           -

United States:
   Current tax expense (benefit).............................................                12         290          (9)
   Deferred tax expense......................................................                 -           -           -

                                                                                     ----------  ----------  ----------
Total actual tax expense (benefit)...........................................        $       12  $      290  $      (42)
                                                                                     ----------  ----------  ----------
                                                                                     ----------  ----------  ----------
</TABLE>

     The components of the actual tax expense for discontinued operations are as
follows:
<TABLE>
<CAPTION>

                                                                                          Years Ended December 31,
                                                                                     ----------------------------------
                                                                                        2005        2004        2003
                                                                                     ----------  ----------  ----------
                                                                                               (In thousands)
<S>                                                                                  <C>         <C>         <C>
United States:
   Current tax expense.......................................................        $        -  $        -  $       38
   Deferred tax expense......................................................                 -           -           -
                                                                                     ----------  ----------  ----------
                                                                                     $        -  $        -  $       38
                                                                                     ----------  ----------  ----------
                                                                                     ----------  ----------  ----------
</TABLE>

     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.

                                       45
<PAGE>

                  BERKELEY TECHNOLOGY LIMITED AND SUBSIDIARIES

             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

     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, 2004 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,
                                                                                     ----------------------
                                                                                        2005        2004
                                                                                     ----------  ----------
                                                                                        (In  thousands)
U.S. subsidiaries:

Deferred income tax assets:
<S>                                                                                  <C>         <C>
Net operating loss carryforwards..................................................   $    9,645  $    9,061
Capital loss carryforwards........................................................       67,283      67,283
Unrealized losses on investments..................................................            8           7
Deferred compensation.............................................................            4           7
Other assets......................................................................            2           2
Valuation allowance...............................................................      (76,905)    (76,323)
                                                                                     ----------  ----------
Deferred income tax assets, net of valuation allowance............................           37          37

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


     As of December 31, 2005, the U.S. subsidiaries of continuing operations had
pre-tax federal net operating loss carryforwards of approximately  $24.1 million
expiring as follows: approximately $1.3 million in 2011, and approximately $22.8
million from 2020 to 2025. These subsidiaries have California net operating loss
carryforwards  of  approximately  $16.2  million  expiring from 2012 to 2015. In
addition,  these  subsidiaries have federal capital loss carryforwards of $157.3
million ($156.0 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, 2005, 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,  2005 and 2004,  there  were  64,439,073
Ordinary Shares issued and outstanding.

     No dividends were declared and paid in 2003, 2004 or 2005.

     Accumulated other  comprehensive  income (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 $(383,000),  $(338,000) and $(429,000) as of December 31, 2005,
2004  and  2003,   respectively.   The  net   unrealized   gains   (losses)   on
available-for-sale  securities after deferred income taxes were $20,000, $36,000
and  $(10,000)  as of December 31, 2005,  2004 and 2003,  respectively.  None of
these amounts related to discontinued  operations.

                                       46
<PAGE>

                  BERKELEY TECHNOLOGY LIMITED AND SUBSIDIARIES

             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

     The Group  has two share  incentive  plans as  described  in Note 13 "Share
Incentive  Plans." 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,
                                       ----------------------------------------------------------------------------
                                                  2005                      2004                       2003
                                       -----------------------   -----------------------   ------------------------
                                          ESOT         ALOT        ESOT         ALOT         ESOT         ALOT
                                       ----------   ----------   ----------   ----------   ----------    ----------
                                                                       (In thousands)

<S>                                    <C>             <C>       <C>             <C>       <C>              <C>
Shares held as of January 1...........     13,247          438       13,247          438       13,247           438
Purchased.............................          -            -            -            -            -             -
Exercised.............................       (163)           -            -            -            -             -
                                       ----------   ----------   ----------   ----------   ----------    ----------
Shares held as of December 31.........     13,084(1)       438       13,247(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 on
operating  leases  in the  continuing  operations  was  $230,000,  $288,000  and
$407,000 for the years ended December 31, 2005, 2004 and 2003, respectively. The
Group had no capital leases as of December 31, 2005.

                                       47
<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, 2005, were as follows:
<TABLE>
<CAPTION>

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

<C>                                                                                                           <C>
2006...............................................................................................           $ 221
2007...............................................................................................             115
2008...............................................................................................             115
2009...............................................................................................             115
2010...............................................................................................              58
2011 and thereafter ...............................................................................               -
                                                                                                       ------------
Total..............................................................................................           $ 624
                                                                                                       ------------
                                                                                                       ------------
<FN>
(1) Includes  commitments  related to the  Group's  Jersey  office  lease  which  expires in September 2010. The Group is currently
    evaluating sublease options for which no commitment has been entered into as of March 30, 2006.
</FN>
</TABLE>

     Commitments  eliminated  following the disposals of BCM and LPA during 2003
(as  described in Note 2  "Discontinued  Operations")  for operating and capital
lease   commitments   were   approximately   $1.9  million  and  $0.1   million,
respectively.

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, 2005.

     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, 2005.

                                       48
<PAGE>



                  BERKELEY TECHNOLOGY LIMITED AND SUBSIDIARIES

             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

Contingencies

     As previously  disclosed in the Company's 2002 to 2004 audited consolidated
financial statements, and notes thereto, included in the Company's Annual Report
on Form 10-K for each of those years, the Company's primary  insurance  company,
London Pacific Life & Annuity Company ("LPLA"),  in August 2002 was placed under
regulatory  control and  rehabilitation  based on LPLA's  statutory  capital and
surplus as of June 30, 2002. On July 9, 2004, a court order was issued approving
a plan of liquidation for LPLA and also approving exchange agreements which give
policyholders  the option of exchanging their existing policies for new policies
in another  insurance  company.  In the course of the  administration of LPLA in
rehabilitation,  the North Carolina  Department of Insurance ("NCDOI") requested
information  concerning  the  history  of a  limited  number of  investments  in
securities  of  portfolio   companies  during  November  2002.  These  portfolio
investments  have  been  associated  with LPLA for more than  seven  years,  and
involve intercompany transfers.  The history of their investment performance and
ownership is complex. The Company has complied with these requests.  The Company
is not able at this time to predict what  conclusions the NCDOI will reach after
evaluation of this information.

     On February 17, 2005, SunGard filed a lawsuit in the U.S. District Court in
Philadelphia  against the Company  and  certain of its  subsidiaries.  SunGard's
complaint  alleged losses in an amount equal to at least $7.2 million  resulting
from alleged  breaches of  representations  and warranties  contained in the May
2003  agreement  governing the sale to SunGard of London Pacific  Advisors,  the
Group's financial advisory services business.

     On April 27, 2005, the Group filed a lawsuit against SunGard and certain of
its  affiliates in  California  Superior  Court in San  Francisco  ("the Court")
accusing  SunGard of wrongful conduct and seeking payment of $1.0 million of the
initial purchase  consideration which is currently held in an escrow account, up
to $8.0  million  in  additional  earnout  payments,  and  further  damages  for
SunGard's  prior wrongful  actions.  The Group is also asking the Court to award
the Group compensatory, exemplary and punitive damages.

     The  Group  also  filed a motion to  dismiss,  for lack of  subject  matter
jurisdiction,  SunGard's lawsuit against the Group in Pennsylvania. SunGard then
voluntarily  dismissed  its  federal  action  against  the Group and filed a new
complaint in the court of Common Pleas, Chester County,  Pennsylvania.  This new
complaint alleges essentially the same claims against the same parties that were
contained in SunGard's federal action. Based upon substantial document discovery
and deposition  testimony already completed,  and ongoing  consultation with the
Group's legal  advisors,  the Group believes that there is no merit to SunGard's
claims  against  the Group,  and the Group will  continue to  vigorously  defend
itself. As such, the Group's  management does not believe that any provision for
this contingent liability in the Group's financial statements as of December 31,
2005 is warranted.

     On June 3, 2005,  SunGard  filed a motion to  dismiss  or stay the  Group's
California  Superior Court action on jurisdictional  grounds.  On July 26, 2005,
the  California  court denied  SunGard's  motion.  On August 25,  2005,  SunGard
appealed that decision.  Its appeal was summarily denied by the California court
of appeals on September  22, 2005.  In  response,  on October 12, 2005,  SunGard
filed a motion  seeking to dismiss 13 of the 14 claims  contained in the Group's
California  complaint.  On  January  3, 2006,  the Court  heard this  motion and
dismissed  three of the Group's claims and allowed the Group to amend six of its
remaining  claims.  On January 6, 2006,  the Group  lodged an  11-count  amended
complaint  which  amended and  supplemented  the Group's  claims  based upon the
substantial  document  discovery  it has  now  received  from  SunGard.  SunGard
responded by filing another motion,  this time to dismiss nine of the Group's 11
claims.  SunGard also sought to seal the Group's  amended  complaint from public
view. On March 1, 2006, the Court heard SunGard's  motions and dismissed four of
the  Group's 11 claims.  The Court then  ordered  SunGard to answer the  Group's
seven  remaining  claims  within 20 days of its March 14, 2006 order.  The Court
also denied  SunGard's  motion to seal the  Group's  amended  complaint.

                                       49
<PAGE>

                  BERKELEY TECHNOLOGY LIMITED AND SUBSIDIARIES

             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

     On June 10, 2005, the Group filed a petition to dismiss SunGard's complaint
in the Pennsylvania court. That motion has not yet been heard.

     Costs relating to the above matters are recognized in the Group's statement
of operations as they are incurred.


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.  (The Group did not
hold any fixed maturity securities classified as held-to-maturity as of December
31, 2004.)

     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,
                                                                         ----------------------------------------------
                                                                                  2005                    2004
                                                                         ----------------------  ----------------------
                                                                          Carrying   Estimated    Carrying   Estimated
                                                                            Value    Fair Value     Value    Fair Value
                                                                         ----------  ----------  ----------  ----------
                                                                                         (In thousands)
Financial assets:
<S>                                                                      <C>         <C>         <C>         <C>
Cash and cash equivalents........................                        $   10,039  $   10,039  $   19,495  $   19,495
Cash held in escrow..............................                             1,027       1,027       1,005       1,005
Investments:
   Fixed maturities:
       Available-for-sale........................                            13,829      13,829      21,377      21,377
       Held-to-maturity..........................                             7,011       6,982           -           -
   Equity securities:
       Trading...................................                                84          84         552         552
       Available-for-sale........................                               850         850         850         850

Financial liabilities:
Life insurance policy liabilities................                            13,573      13,432      21,229      20,982
</TABLE>

                                       50
<PAGE>


                  BERKELEY TECHNOLOGY LIMITED AND SUBSIDIARIES

             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

     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.

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, 2005, 2004 and 2003
was as follows:

                                       51
<PAGE>
                  BERKELEY TECHNOLOGY LIMITED AND SUBSIDIARIES

             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
<TABLE>
<CAPTION>

                                                            2005                   2004                 2003
                                                    --------------------   --------------------  ------------------
                                                               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......................       6,940  $    3.00       8,945  $    3.10    13,575  $   3.10
Granted..........................................       1,000       0.15           -          -         -         -
Exercised........................................        (163)      0.11           -          -         -         -
Forfeited........................................        (808)      1.46      (2,005)      3.46    (2,517)     3.12
Expired..........................................        (684)      3.39           -          -    (2,113)     3.09
                                                    ---------  ---------   ---------  ---------  --------  --------
Outstanding as of December 31....................       6,285  $    2.77       6,940  $    3.00     8,945  $   3.10
                                                    ---------  ---------   ---------  ---------  --------  --------
                                                    ---------  ---------   ---------  ---------  --------  --------

                                                            2005                   2004                 2003
                                                    --------------------   --------------------  ------------------
                                                               Weighted-              Weighted-            Weighted-
                                                     Number     Average     Number     Average    Number    Average
                                                       of      Exercise       of      Exercise      of     Exercise
(Options in thousands)                               Options     Price      Options     Price     Options     Price
                                                    ---------  ---------   ---------  ---------  --------  --------

Options exercisable as of December 31............       4,881  $    3.52       5,685  $    3.57     7,046  $   3.82
                                                    ---------  ---------   ---------  ---------  --------  --------
                                                    ---------  ---------   ---------  ---------  --------  --------
</TABLE>

     The Group accounts for stock based  compensation  using the intrinsic value
method  prescribed  by  Accounting  Principles  Board Opinion No. 25 ("APB 25"),
"Accounting for Stock Issued to Employees."

     See  Note  1  "Summary   of   Significant   Accounting   Policies"   for  a
reconciliation of net income (loss) as reported and as adjusted under SFAS 123.

     Summary  information  about the Group's  share  options  outstanding  as of
December 31, 2005 is as follows:
<TABLE>
<CAPTION>


                                        Options Outstanding                                 Options Exercisable
                        -----------------------------------------------            --------------------------------
                                             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            7.52             $0.27                      1,511         $   0.33
   0.51 -  5.00                 1,220            1.15              3.36                      1,220             3.36
   5.01 - 10.00                 2,090            5.24              5.40                      2,090             5.40
  10.01 - 21.00                    60            4.68             21.00                         60            21.00
---------------         -------------     -----------      ------------            ---------------     ------------
$ 0.10 - $21.00                 6,285            5.50             $2.77                      4,881            $3.52
---------------         -------------     -----------      ------------            ---------------     ------------
---------------         -------------     -----------      ------------            ---------------     ------------
</TABLE>

Agent Loyalty Opportunity Trust

     The Agent Loyalty  Opportunity  Trust ("ALOT") provides for the granting of
stock appreciation rights ("SARs") on the Company's Ordinary Shares to agents of
LPLA. The ALOT was  established  in 1997 without  shareholders'  approval.  Each
award unit  entitles  the holder to cash  compensation  equal to the  difference
between the Company's  prevailing  share price and the exercise price. The award
units are exercisable in four

                                       52
<PAGE>

                  BERKELEY TECHNOLOGY LIMITED AND SUBSIDIARIES

             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

equal annual  installments  commencing on the first  anniversary  of the date of
grant and are forfeited upon termination of the agency contract.  Vesting of the
award in any given year is also contingent on the holder of the award surpassing
a predetermined  benchmark tied to sales and persistency.  The SARs expire seven
years from the date of grant. The 79,000 awards outstanding at December 31, 2005
will  expire in April 2006.  Subsequent  to that date,  the  Group's  management
intends to recommend to the trustees  that the Ordinary  Shares held by the ALOT
be sold to the ESOT and that the ALOT be dissolved.

     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.

     SAR  activity for the years ended  December 31, 2005,  2004 and 2003 was as
follows:
<TABLE>
<CAPTION>
                                                            2005                   2004                 2003
                                                    ---------------------------------------------------------------
                                                               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......................         290  $    3.85         388  $    3.73       388  $   3.73
Granted..........................................           -          -           -          -         -         -
Exercised........................................           -          -           -          -         -         -
Forfeited........................................           -          -           -          -         -         -
Expired..........................................        (211)      3.35         (98)      3.35         -         -
                                                    ---------  ---------   ---------  ---------  --------  --------
Outstanding as of December 31....................          79  $    5.19         290  $    3.85       388  $   3.73
                                                    ---------  ---------   ---------  ---------  --------  --------
                                                    ---------  ---------   ---------  ---------  --------  --------

Award units exercisable as of December 31........          42  $    5.19         187  $    3.76       284  $   3.62
                                                    ---------  ---------   ---------  ---------  --------  --------
                                                    ---------  ---------   ---------  ---------  --------  --------
</TABLE>

     Summary  information  about the Group's SARs outstanding as of December 31,
2005 is as follows:
<TABLE>
<CAPTION>


                                      Award Units Outstanding                             Award Units Exercisable
                         ----------------------------------------------               -----------------------------
                                           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>           <C>
          $5.19                    79            0.28             $5.19                        42            $5.19
---------------         -------------      ----------     -------------             -------------      -----------
---------------         -------------      ----------     -------------             -------------      -----------
</TABLE>


     In  March  2000,   the   Financial   Accounting   Standards   Board  issued
Interpretation No. 44 ("FIN 44"), "Accounting for Certain Transactions Involving
Stock  Compensation,  an  Interpretation  of APB  Opinion  No.  25,"  which  was
effective for all awards granted after July 1, 2000.

     Compensation expense relating to award grants in the ALOT was accounted for
under APB 25, prior to the issuance of FIN 44. Thus,  no expense was  recognized
at the grant dates because all awards were made with an exercise  price equal to
the prevailing market value.  Instead,  compensation expense would be recognized
upon exercise of the awards;  however, no awards have been exercised since 2001.

                                       53
<PAGE>


                  BERKELEY TECHNOLOGY LIMITED AND SUBSIDIARIES

             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

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,  $15,000 and $148,000 to the trust in
2005, 2004 and 2003, 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 $154,000,  $49,000 and
$41,000 were made by the Group to the plan in 2005, 2004 and 2003, respectively.
Of the 2005 contribution, $105,000 was 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:
<TABLE>
<CAPTION>

                                                                                          Years Ended December 31,
                                                                                     ----------------------------------
                                                                                        2005        2004        2003
                                                                                     ----------  ----------  ----------
                                                                                   (In thousands, except share, per share
                                                                                              and ADS amounts)

<S>                                                                                  <C>         <C>         <C>
Income (loss) from continuing operations...............................              $   (3,247) $  (12,141) $    1,089
Income on discontinued operations......................................                       -           -       9,927
                                                                                     ----------  ----------  ----------
Net income (loss)......................................................              $   (3,247) $  (12,141) $   11,016
                                                                                     ----------  ----------  ----------
                                                                                     ----------  ----------  ----------
</TABLE>

                                       54
<PAGE>



                  BERKELEY TECHNOLOGY LIMITED AND SUBSIDIARIES

             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
<TABLE>
<CAPTION>

                                                                                          Years Ended December 31,
                                                                                     ----------------------------------
                                                                                        2005        2004        2003
                                                                                     ----------  ----------  ----------
                                                                                   (In thousands, except share, per share
                                                                                              and ADS amounts)

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

Basic earnings (loss) per share:
Continuing operations..................................................              $    (0.06) $    (0.24) $     0.02
Discontinued operations................................................                       -           -        0.20
                                                                                     ----------  ----------  ----------
                                                                                     $    (0.06) $    (0.24) $     0.22
                                                                                     ----------  ----------  ----------
                                                                                     ----------  ----------  ----------
Basic earnings (loss) per ADS:
Continuing operations..................................................              $    (0.64) $    (2.39) $     0.21
Discontinued operations................................................                       -           -        1.96
                                                                                     ----------  ----------  ----------
                                                                                     $    (0.64) $    (2.39) $     2.17
                                                                                     ----------  ----------  ----------
                                                                                     ----------  ----------  ----------

Diluted earnings (loss) per share and ADS:
Weighted-average number of Ordinary Shares outstanding,
   excluding shares held by the employee benefit trusts................              50,916,692  50,754,192  50,754,192
Effect of dilutive securities (warrants and employee share options) ...                       -           -     433,706
                                                                                     ----------  ----------  ----------
Weighted-average number of Ordinary Shares used in diluted
   earnings per share calculations.....................................              50,916,692  50,754,192  51,187,898
                                                                                     ----------  ----------  ----------
                                                                                     ----------  ----------  ----------
Diluted earnings (loss) per share:
Continuing operations..................................................              $    (0.06) $    (0.24) $     0.02
Discontinued operations................................................                       -           -        0.20
                                                                                     ----------  ----------  ----------
                                                                                     $    (0.06) $    (0.24) $     0.22
                                                                                     ----------  ----------  ----------
                                                                                     ----------  ----------  ----------
Diluted earnings (loss) per ADS:
Continuing operations..................................................              $    (0.64) $    (2.39) $     0.21
Discontinued operations................................................                       -           -        1.94
                                                                                     ----------  ----------  ----------
                                                                                     $    (0.64) $    (2.39) $     2.15
                                                                                     ----------  ----------  ----------
                                                                                     ----------  ----------  ----------
</TABLE>

     As the Company  recorded a net loss for the years ended  December  31, 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,  2005 and  2004,  there  would  have been an
additional 66,397 and 650,913 shares, respectively, included in the calculations
of diluted earnings per share for these years.


                                       55
<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  $60,000,  $36,000  and $76,000
during  2005,  2004 and  2003,  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.

     Due  to the  sales  of  BCM  and  LPA in  2003  (see  Note 2  "Discontinued
Operations"),  the results of operations of the Company's  asset  management and
financial advisory segments (up to their disposal dates) have been classified as
discontinued operations for the year ended December 31, 2003.

     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,
                                                                                     ----------------------------------
                                                                                        2005        2004        2003
                                                                                     ----------  ----------  ----------
                                                                                               (In thousands)

<S>                                                                                  <C>         <C>         <C>
Jersey.................................................................              $    1,215  $   (5,715) $    4,220
Guernsey...............................................................                     109        (720)      4,926
United States..........................................................                     769         676          52
                                                                                     ----------  ----------  ----------
Consolidated revenues and net investment gains (losses)
    for continuing operations..........................................              $    2,093  $   (5,759) $    9,198
                                                                                     ----------  ----------  ----------
                                                                                     ----------  ----------  ----------

</TABLE>

                                       56
<PAGE>



                  BERKELEY TECHNOLOGY LIMITED AND SUBSIDIARIES

             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

     Total assets by geographic segment were as follows:
<TABLE>
<CAPTION>
                                                                                           December 31,
                                                                                     ----------------------
                                                                                        2005        2004
                                                                                     ----------  ----------
                                                                                         (In  thousands)

<S>                                                                                  <C>         <C>
Jersey.............................................................................  $   25,066  $   37,273
Guernsey...........................................................................       3,107          14
United States......................................................................       5,630       7,420
                                                                                     ----------  ----------
Consolidated total assets .........................................................  $   33,803  $   44,707
                                                                                     ----------  ----------
                                                                                     ----------  ----------
</TABLE>

     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,
                                                                                     ----------------------------------
                                                                                        2005        2004        2003
                                                                                     ----------  ----------  ----------
                                                                                               (In thousands)

<S>                                                                                  <C>         <C>         <C>
Revenues:
Venture capital and consulting.........................................              $      535  $     (125)  $   4,687
Life insurance and annuities ..........................................                   1,192      (5,759)      4,458
                                                                                     ----------  ----------  ----------
                                                                                          1,727      (5,884)      9,145
Reconciliation of segment amounts to consolidated amounts:
Interest and other fee income..........................................                     366         125          53
                                                                                     ----------  ----------  ----------
Consolidated revenues and net investment gains and losses
    for continuing operations..........................................              $    2,093  $   (5,759) $    9,198
                                                                                     ----------  ----------  ----------
                                                                                     ----------  ----------  ----------


Income (loss) from continuing operations before income taxes:
Venture capital and consulting.........................................              $     (584) $   (1,365) $    3,571
Life insurance and annuities...........................................                    (701)     (8,091)      1,577
                                                                                     ----------  ----------  ----------
                                                                                         (1,285)     (9,456)      5,148
Reconciliation of segment amounts to consolidated amounts:
Interest and other fee income..........................................                     366         125          53
Corporate expenses.....................................................                  (2,312)     (2,415)     (3,478)
Interest expense.......................................................                      (4)       (105)       (676)
                                                                                     ----------  ----------  ----------
Consolidated income (loss) from continuing operations
    before income taxes................................................              $   (3,235) $  (11,851) $    1,047
                                                                                     ----------  ----------  ----------
                                                                                     ----------  ----------  ----------
</TABLE>


                                       57
<PAGE>





                  BERKELEY TECHNOLOGY LIMITED AND SUBSIDIARIES

             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

     Assets attributable to each of the Company's reportable operating segments,
based on management's reporting structure, were as follows:
<TABLE>
<CAPTION>
                                                                                           December 31,
                                                                                     ----------------------
                                                                                        2005        2004
                                                                                     ----------  ----------
                                                                                         (In  thousands)
Assets:
<S>                                                                                  <C>         <C>
Venture capital and consulting.....................................................  $       90  $       92
Life insurance and annuities.......................................................      24,720      33,142
Corporate and other................................................................       8,993      11,473
                                                                                     ----------  ----------
Consolidated total assets..........................................................  $   33,803  $   44,707
                                                                                     ----------  ----------
                                                                                     ----------  ----------
</TABLE>


Note 18.    Selected Quarterly Financial Information (Unaudited)

     Unaudited quarterly financial  information (in thousands,  except per share
and ADS amounts) is as follows:
<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 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 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)
                                                             ----------  ----------  ----------  ----------  ----------
                                                             ----------  ----------  ----------  ----------  ----------
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)
                                                             ----------  ----------  ----------  ----------  ----------
                                                             ----------  ----------  ----------  ----------  ----------
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>

                                       58
<PAGE>


                  BERKELEY TECHNOLOGY LIMITED AND SUBSIDIARIES

             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
<TABLE>
<CAPTION>

                                                                                        2004
                                                             ----------------------------------------------------------
                                                               First       Second      Third       Fourth       Full
                                                              Quarter      Quarter    Quarter     Quarter       Year
                                                             ----------  ----------  ----------  ----------  ----------
Continuing operations:
<S>                                                          <C>         <C>         <C>         <C>         <C>
Revenues including net investment gains (losses)........     $   (5,021) $    2,081  $   (2,498) $     (321) $   (5,759)
Income (loss) before income taxes.......................         (6,683)        478      (3,913)     (1,733)    (11,851)
Net income (loss).......................................         (6,690)        195      (3,913)     (1,733)    (12,141)

Basic earnings (loss) per share:
Continuing operations...................................     $    (0.13) $        -  $    (0.08) $    (0.03) $    (0.24)
Discontinued operations.................................              -           -           -           -           -
                                                             ----------  ----------  ----------  ----------  ----------
                                                             $    (0.13) $        -  $    (0.08) $    (0.03) $    (0.24)
                                                             ----------  ----------  ----------  ----------  ----------
                                                             ----------  ----------  ----------  ----------  ----------
Basic earnings (loss) per ADS:
Continuing operations...................................     $    (1.32) $     0.04  $    (0.77) $    (0.34) $    (2.39)
Discontinued operations.................................              -           -           -           -           -
                                                             ----------  ----------  ----------  ----------  ----------
                                                             $    (1.32) $     0.04  $    (0.77) $    (0.34) $    (2.39)
                                                             ----------  ----------  ----------  ----------  ----------
                                                             ----------  ----------  ----------  ----------  ----------
Diluted earnings (loss) per share:
Continuing operations...................................     $    (0.13) $        -  $    (0.08) $    (0.03) $    (0.24)
Discontinued operations.................................              -           -           -           -           -
                                                             ----------  ----------  ----------  ----------  ----------
                                                             $    (0.13) $        -  $    (0.08) $    (0.03) $    (0.24)
                                                             ----------  ----------  ----------  ----------  ----------
                                                             ----------  ----------  ----------  ----------  ----------
Diluted earnings (loss) per ADS:
Continuing operations...................................     $    (1.32) $     0.04  $    (0.77) $    (0.34) $    (2.39)
Discontinued operations.................................              -           -           -           -           -
                                                             ----------  ----------  ----------  ----------  ----------
                                                             $    (1.32) $     0.04  $    (0.77) $    (0.34) $    (2.39)
                                                             ----------  ----------  ----------  ----------  ----------
                                                             ----------  ----------  ----------  ----------  ----------
</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.

                                       59
<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, 2005 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 August 31, 2006 (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 57, is the founder
and a principal shareholder of Berkeley Technology Limited. He has worked for us
for more than 29 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 51, 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.

                                       60
<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, 2005.
<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
                                        -----------------------    --------------------     -----------------------

<S>                                             <C>                            <C>                           <C>
Equity compensation plans
   approved by shareholders.............              6,285,000 (1)               $2.77                         (1)

Equity compensation plans not
   approved by shareholders.............                 79,200 (1)                5.19                         (1)
                                                ---------------                --------
Total...................................              6,364,200                   $2.80
                                                ---------------                --------
                                                ---------------                --------
<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.

                                       61
<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......................................  23

               Consolidated Balance Sheets as of December 31, 2005 and 2004.................................  24

               Consolidated Statements of Operations for the Years Ended
                   December 31, 2005, 2004 and 2003.........................................................  25

               Consolidated Statements of Cash Flows for the Years Ended
                   December 31, 2005, 2004 and 2003.........................................................  27

               Consolidated Statements of Changes in Shareholders' Equity for the Years Ended
                   December 31, 2005, 2004 and 2003.........................................................  29

               Consolidated Statements of Comprehensive Income for the Years Ended
                   December 31, 2005, 2004 and 2003.........................................................  30

               Notes to the Consolidated Financial Statements...............................................  31
</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>
<S>                                                                                                          <C>
               Schedule I - Summary of Investments - Other Than Investments in Related
                   Parties..................................................................................  66

               Schedule II - Condensed Financial Information of Registrant

                   Condensed Balance Sheets as of December 31, 2005 and 2004................................  67

                   Condensed Statements of Operations for the Years Ended
                      December 31, 2005, 2004 and 2003......................................................  68

                   Condensed Statements of Cash Flows for the Years Ended
                      December 31, 2005, 2004 and 2003......................................................  69

                   Note to Condensed Financial Statements...................................................  70

               Schedule III - Supplementary Insurance Information...........................................  71

          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.

</TABLE>

                                       62
<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).


                                       63
<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).

                                       64
<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 30, 2006.

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 66 through 71.


                                       65
<PAGE>


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

                  BERKELEY TECHNOLOGY LIMITED AND SUBSIDIARIES

                             As of December 31, 2005
<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....................................             20,820      20,811      20,840
Redeemable preferred stock......................................                  -           -           -
                                                                         ----------  ----------  ----------
Total fixed maturity securities.................................             20,820  $   20,811      20,840
                                                                         ----------  ----------  ----------
                                                                                     ----------
Equity securities:
Common stocks:
   Industrial, miscellaneous and all other......................                108  $       90          90
Non-redeemable preferred stocks.................................                844         844         844
                                                                         ----------  ----------  ----------
Total equity securities.........................................                952  $      934         934
                                                                         ----------  ----------  ----------
                                                                                     ----------
Total investments...............................................         $   21,772              $   21,774
                                                                         ----------              ----------
                                                                         ----------              ----------
<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>

                                       66
<PAGE>

           SCHEDULE II - CONDENSED FINANCIAL INFORMATION OF REGISTRANT

                           BERKELEY TECHNOLOGY LIMITED
                            CONDENSED BALANCE SHEETS

<TABLE>
<CAPTION>
                                                                                          December 31,
                                                                                     ----------------------
                                                                                        2005        2004
                                                                                     ----------  ----------
                                                                                     (In thousands, except
                                                                                          share amounts)
                                                                ASSETS

<S>                                                                                  <C>         <C>
Cash and cash equivalents.........................................................   $      308  $    3,943
Investment in subsidiaries........................................................      (69,853)    (67,677)
Intercompany balances.............................................................       90,288      87,152
Other assets......................................................................           37         187
                                                                                     ----------  ----------
Total assets......................................................................   $   20,780  $   23,605
                                                                                     ----------  ----------
                                                                                     ----------  ----------


                                                 LIABILITIES AND SHAREHOLDERS' EQUITY

Liabilities:
Accounts payable and accruals.....................................................   $      330  $      379
Intercompany balances.............................................................          847         333
                                                                                     ----------  ----------
Total liabilities.................................................................        1,177         712
                                                                                     ----------  ----------
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, 2005
   and 2004.......................................................................        3,222       3,222
Additional paid-in capital........................................................       67,660      68,615
Retained earnings.................................................................       11,682      14,929
Employee benefit trusts, at cost (13,522,381 and 13,684,881 shares as of
   December 31, 2005 and 2004, respectively)......................................      (62,598)    (63,571)
Accumulated other comprehensive loss..............................................         (363)       (302)
                                                                                     ----------  ----------
Total shareholders' equity........................................................       19,603      22,893
                                                                                     ----------  ----------
Total liabilities and shareholders' equity........................................   $   20,780  $   23,605
                                                                                     ----------  ----------
                                                                                     ----------  ----------
</TABLE>


            See accompanying Note to Condensed Financial Statements.


                                       67
<PAGE>


     SCHEDULE II - CONDENSED FINANCIAL INFORMATION OF REGISTRANT (Continued)

                           BERKELEY TECHNOLOGY LIMITED
                       CONDENSED STATEMENTS OF OPERATIONS
<TABLE>
<CAPTION>
                                                                                          Years Ended December 31,
                                                                                     ----------------------------------
                                                                                        2005        2004        2003
                                                                                     ----------  ----------  ----------
                                                                                               (In thousands)
Revenues:
<S>                                                                                  <C>         <C>         <C>
Investment income............................................................        $       24  $       44  $        8
Net realized investment losses...............................................                 -           -        (246)
                                                                                     ----------  ----------  ----------
                                                                                             24          44        (238)
Expenses:
Staff costs..................................................................               471         626         833
Other operating expenses.....................................................               667       1,459       2,584
                                                                                     ----------  ----------  ----------
                                                                                          1,138       2,085       3,417
                                                                                     ----------  ----------  ----------
Loss before income tax benefit and equity in
   undistributed net income (loss) of subsidiaries...........................            (1,114)     (2,041)     (3,655)

Income tax benefit...........................................................                 -           -           -
                                                                                     ----------  ----------  ----------
Loss before equity in undistributed net income (loss) of
   subsidiaries..............................................................            (1,114)     (2,041)     (3,655)

Equity in undistributed net income (loss) of subsidiaries (1)................            (2,133)    (10,100)     14,671
                                                                                     ----------  ----------  ----------

Net income (loss)............................................................        $   (3,247) $  (12,141) $   11,016
                                                                                     ----------  ----------  ----------
                                                                                     ----------  ----------  ----------
-----------------------
<FN>
(1)   Eliminated on consolidation.
</FN>
</TABLE>

            See accompanying Note to Condensed Financial Statements.


                                       68
<PAGE>



     SCHEDULE II - CONDENSED FINANCIAL INFORMATION OF REGISTRANT (Continued)

                           BERKELEY TECHNOLOGY LIMITED
                       CONDENSED STATEMENTS OF CASH FLOWS

<TABLE>
<CAPTION>

                                                                                          Years Ended December 31,
                                                                                     ----------------------------------
                                                                                        2005        2004        2003
                                                                                     ----------  ----------  ----------
                                                                                               (In thousands)
Cash flows from continuing operating activities:
<S>                                                                                  <C>         <C>         <C>
Net income (loss)............................................................        $   (3,247) $  (12,141) $   11,016

Adjustments to reconcile net income (loss) to net
   cash used in operating activities:
Equity in undistributed net (income) loss of subsidiaries....................             2,133      10,100     (14,671)
Net realized investment losses...............................................                 -           -         246
Other operating cash flows...................................................               101         140         489
                                                                                     ----------  ----------  ----------
Net cash used in operating activities .......................................            (1,013)     (1,901)     (2,920)
                                                                                     ----------  ----------  ----------
Cash flows from investing activities:
Payment of guarantee obligations.............................................                 -           -     (10,836)
Advances to subsidiaries.....................................................            (3,149)       (195)       (144)
                                                                                     ----------  ----------  ----------
Net cash used in investing activities........................................            (3,149)       (195)    (10,980)
                                                                                     ----------  ----------  ----------
Cash flows from financing activities:
Repayments from subsidiaries.................................................               527       3,543      16,369
                                                                                     ----------  ----------  ----------
Net cash provided by financing activities ...................................               527       3,543      16,369
                                                                                     ----------  ----------  ----------

Net increase (decrease) in cash and cash equivalents.........................            (3,635)      1,447       2,469
Cash and cash equivalents at beginning of year...............................             3,943       2,496          27
                                                                                     ----------  ----------  ----------
Cash and cash equivalents at end of year.....................................        $      308  $    3,943  $    2,496
                                                                                     ----------  ----------  ----------
                                                                                     ----------  ----------  ----------
</TABLE>

            See accompanying Note to Condensed Financial Statements.

                                       69
<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, 2005.

     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,
2005.

                                       70
<PAGE>

               SCHEDULE III - SUPPLEMENTARY INSURANCE INFORMATION

                  BERKELEY TECHNOLOGY LIMITED AND SUBSIDIARIES

                      Life Insurance and Annuities Segment

<TABLE>
<CAPTION>
                                                                                     Years Ended/As of December 31,
                                                                                     ----------------------------------
                                                                                        2005        2004        2003
                                                                                     ----------  ----------  ----------
                                                                                               (In thousands)


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


Future policy benefits, losses, claims and loss expenses (1)...............              13,573      21,229      28,054


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


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


Premium revenue (2)........................................................                   4           4           6


Net investment income (3)..................................................               1,213       1,295       1,834


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


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


Other operating expenses...................................................                 913         974         959


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 ofthis Form 10-K for the year ended December 31, 2005.

(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>

                                       71
<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 30, 2006                                   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 30, 2006               Arthur I. Trueger
                                    Executive Chairman
                                    (Principal Executive Officer)


                                    /s/  Ian K. Whitehead
Date:  March 30, 2006               Ian K. Whitehead
                                    Chief Financial Officer
                                    (Principal Financial and Accounting Officer)


                                    /s/  Victor A. Hebert
Date:  March 30, 2006               Victor A. Hebert
                                    Deputy Chairman and Non-Executive Director


                                    /s/  Harold E. Hughes, Jr.
Date:  March 30, 2006               Harold E. Hughes, Jr.
                                    Non-Executive Director


                                    /s/  Trenchard
Date:  March 30, 2006               The Viscount Trenchard
                                    Non-Executive Director




                                       72
<PAGE>


                  BERKELEY TECHNOLOGY LIMITED AND SUBSIDIARIES

                EXHIBIT INDEX FOR THE ANNUAL REPORT ON FORM 10-K
                      FOR THE YEAR ENDED DECEMBER 31, 2005

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).

                                       73
<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).


                                       74
<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 30, 2006.

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.

                                       75