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, 2008

                                       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)

                                One Castle Street
                           St. Helier, Jersey JE2 3RT
                                 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]

     If this report is an annual report or transition report,  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, a non-accelerated  filer, or a smaller reporting company.
See the  definitions  of "large  accelerated  filer,"  "accelerated  filer"  and
"smaller  reporting  company" in Rule 12b-2 of the  Exchange  Act.  (Check one):
Large  accelerated  filer [ ] Accelerated  filer [ ]  Non-accelerated  filer [ ]
Smaller reporting company [X]                         (Do not check if a smaller
                                                       reporting company)

     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,
2008 as  reported  on the  London  Stock  Exchange  (using an  exchange  rate



<PAGE>

of  (pound)1.00 = $1.99) was  $3,145,255.  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 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 31, 2009,  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 July 31, 2009,  is incorporated  by reference in
Part III of this Form 10-K.



<PAGE>
<TABLE>
<CAPTION>
                                TABLE OF CONTENTS



                                     PART  I                                                                 Page

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


                                     PART II

Item 5.       Market for Registrant's Common Equity, Related Stockholder Matters and Issuer
                Purchases of Equity Securities..............................................................    4
Item 6.       Selected Financial Data.......................................................................    8
Item 7.       Management's Discussion and Analysis of Financial Condition and Results of Operations.........    8
Item 7A.      Quantitative and Qualitative Disclosures About Market Risk ...................................   15
Item 8.       Financial Statements and Supplementary Data...................................................   16
Item 9.       Changes in and Disagreements with Accountants on Accounting and Financial Disclosure..........   46
Item 9A.(T)   Controls and Procedures.......................................................................   46
Item 9B.      Other Information.............................................................................   46


                                    PART III

Item 10.      Directors and Executive Officers of the Registrant............................................   47
Item 11.      Executive Compensation........................................................................   47
Item 12.      Security Ownership of Certain Beneficial Owners and Management and Related
                Stockholder Matters.........................................................................   47
Item 13.      Certain Relationships and Related Transactions................................................   48
Item 14.      Principal Accountant Fees and Services........................................................   48


                                     PART IV

Item 15.      Exhibits and Financial Statement Schedules ...................................................   49


Signatures .................................................................................................   57
</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"  and  Item 7  "Management's  Discussion  and  Analysis  of  Financial
Condition and Results of Operations" 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 venture capital consulting  company  incorporated under the laws
of Jersey,  Channel  Islands,  with an office in San  Francisco,  California.  A
typical client is a Silicon Valley technology  company or a large  international
telecommunications company. Our objective has been to use consulting revenues to
finance the development of large  telecommunications  company  relationships  in
Europe and Asia,  which has led to several  equity  investments by a client with
additional fees for work performed by the Group.

       In  addition  to our  consulting  business,  we  continue  to service the
policyholders  of London  Pacific  Assurance  Limited  ("LPAL")  in Jersey.  New
policies are not being sold at this time to preserve  our capital.  Future gains
on LPAL's  investment  portfolio  would give us more  flexibility to rebuild our
insurance  operations  should we choose to do so,  although  we have no  current
plans to sell 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."

BUSINESS SEGMENTS

       We  currently  have two  business  segments  that we operate  through our
subsidiaries:  venture capital consulting, and life insurance and annuities. Our
principal  operating  subsidiaries,  by business  segment and location,  are set
forth below:
<TABLE>
<CAPTION>

<S>                                              <C>                                <C>
Principal Subsidiaries                           Business Segment                   Location
----------------------                           --------------------------         -------------------------
Berkeley International Capital Corporation       Venture capital consulting         San Francisco, California
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
14 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 Consulting

       Our  consulting  business  is managed by Berkeley  International  Capital
Corporation  ("BICC").  Over the  years,  our  venture  capital  and  consulting
business  has  focused  primarily  on  U.S.  high  technology  companies,   with
investments  as high as $25  million.  We  identify  opportunities  for  clients
seeking to invest in Silicon Valley. We also assist private technology companies
in growing their  businesses.  Though no new equity postions were established in
2008, in 2007 we established  several equity positions through direct investment
by LPAL and through equity rights received as part of our consulting activities.
We use our consulting  relationships in part to generate fees that help to cover
operating  expenses.  The level of  consulting  fees is  expected to be volatile
depending on the nature and extent of our work at any point in time.

       Typically,  BICC seeks a monthly  retainer  from its clients.  Additional
fees may be earned  depending on the intensity of the work such as due diligence
fees  on  transactions  and  success  fees.  The  consulting  work  may  involve
assistance  with the  identification  of customers  and/or  investor  prospects;
strategy  development;  introductory  meetings  with  prospective  customers  or
investors;  and  assistance  in the  implementation  of the chosen  strategy  or
transaction.

       As an  example  of its work in  consulting,  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.  An example of BICC's
venture   capital   services  has  been  an   engagement   advising  a  European
telecommunications company on making investments in U.S. technology companies.

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

       Of the private technology  investments arranged by BICC, two investments,
Alacritech, Inc. and Xtera Communications, Inc., are currently held by LPAL.

       During 2008,  71% of  consulting  fee revenues  were  generated  from one
client.  Our  consulting  arrangement  with this client  expired on December 31,
2008,  and a new  arrangement  has not yet been agreed.  The level of consulting
fees is expected to be volatile in future  periods  depending  on the nature and
extent of our work at any point in time and the global economy.  We are actively
seeking new clients and business opportunities.


                                       2
<PAGE>

Competition

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

Life Insurance and Annuities

       Formed in 1999, our Jersey,  Channel Islands insurance subsidiary,  LPAL,
has  principally  been engaged in marketing  and servicing  investment  oriented
insurance products.  LPAL sold Sterling,  U.S. dollar and Euro guaranteed return
bonds in its home market of Jersey,  Channel Islands, and in the U.K., Guernsey,
Isle of Man and other  permitted  jurisdictions.  The  products  guarantee  both
capital and yield for the duration of the investment period, which are typically
three or five years. In recent years,  LPAL has not sold any new policies due to
the high  capital  requirements.  Due to this  change in company  strategy,  the
number of policyholders  has declined  significantly to three at the end of 2008
(there was no change from the end of 2007). We have no current plans to sell new
policies, but we monitor the markets for opportunities.  LPAL's strategy for its
investment  portfolio  has  been to at least  match  the  level of  policyholder
liabilities  with  corporate  bonds and cash.  As of December 31,  2008,  LPAL's
policyholder  liabilities,   including  death  claims  pending  payout,  totaled
$106,000, and LPAL's cash totaled $11.8 million. LPAL held no corporate bonds at
the end of  2008.  LPAL's  investment  portfolio  included  two  private  equity
securities valued at $1.3 million as of December 31, 2008.

REGULATION

London Pacific Assurance Limited

       LPAL is regulated by the Jersey Financial Services  Commission  ("JFSC").
Under Article 6 of the Insurance  Business  (Jersey) Law 1996, LPAL is permitted
to conduct  long-term  insurance  business.  LPAL is required  to submit  annual
audited financial  statements  (prepared under United States generally  accepted
accounting principles as permitted by regulation),  and an audited annual filing
to the  JFSC in the  format  consistent  with  that  required  by the  Financial
Services  Authority in the United Kingdom.  The annual filing  submitted by LPAL
must be  accompanied by a Certificate  from the Appointed  Actuary that based on
sufficiently   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, 2008, LPAL met all of these conditions.

       LPAL is also required under the insurance laws to appoint an actuary. The
actuary  must be  qualified  as  defined  under  Jersey law and is  required  to
supervise the long-term insurance fund. No transfers,  except in satisfaction of
long-term  insurance business  liabilities,  are permitted from LPAL's long-term
insurance  fund without the consent of LPAL's  directors and actuary.  Dividends
require the approval of the JFSC. In April 2008, the Company  obtained  approval
from the JFSC for LPAL to make  dividend  payments up to a total of $5.0 million
to the Company in the future. As a condition of the JFSC's approval, the Company
has agreed to provide  financial  support to LPAL in the  unlikely  event LPAL's
funds are insufficient to pay off its policy liabilities totaling $106,000 as of
December 31, 2008, as well as the operational costs of LPAL.

Group

       Our  executive  management  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

                                       3
<PAGE>

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, 2008, we had 6 full-time employees.


Item 1A.     RISK FACTORS

       Not required.


Item 1B.     UNRESOLVED STAFF COMMENTS

       None.


Item 2.    PROPERTIES

       We currently operate from an office located in San Francisco, California,
consisting  of  approximately  3,800 square feet.  We occupy this office under a
lease which will expire at the end of October 2009.

       We are  obligated  under a lease until  September  2010 for office  space
consisting of approximately  3,000 square feet in Jersey,  Channel  Islands.  In
June 2006, we entered into a sublease  agreement  for the remaining  term of our
lease for the entire office space.

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


Item 3.    LEGAL PROCEEDINGS

       There are no legal proceedings pending against the Group.


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

       No matters were  submitted to our  shareholders  during the quarter ended
December 31, 2008.


                                     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  Mellon is the  Depositary.  Our ADSs have traded in the




                                       4
<PAGE>

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,
2008, there were 64,439,073 Ordinary Shares outstanding of which 11,871,930,  or
18.4%, were represented by 1,187,193 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.

       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 Sterling Per               U.S. Dollars
                                                                   Ordinary Share                     Per ADS
                                                                --------------------           --------------------
                                                                  High         Low              High          Low
                                                                -------       ------           ------        ------
<S>                                                             <C>           <C>              <C>           <C>
2008:
First quarter.................................................     0.07         0.03             0.90          0.50
Second quarter................................................     0.07         0.04             0.95          0.38
Third quarter.................................................     0.06         0.02             0.75          0.20
Fourth quarter................................................     0.05         0.02             0.22          0.09

2007:
First quarter.................................................     0.10         0.03             1.08          0.56
Second quarter................................................     0.07         0.05             1.05          0.80
Third quarter.................................................     0.07         0.04             0.99          0.65
Fourth quarter................................................     0.07         0.05             1.00          0.65
</TABLE>

Holders

       As of February 28, 2009, we had approximately 1,292 Ordinary shareholders
of record and 71 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.


                                       5
<PAGE>


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 2007 or an interim dividend for 2008. Our Board of
Directors will not be recommending a final dividend for the year 2008.

       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 7 to the  Consolidated  Financial  Statements in Item 8 of
this Form 10-K for details regarding regulatory restrictions on dividends.

TAXATION

       The  following  summary  of  certain  Jersey  and U.S.  tax  consequences
regarding share ownership is based on law and published practice as of March 23,
2009, 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.  Through 2008,  dividends
paid by the Company,  if any, were treated as having  suffered Jersey income tax
at the standard rate (20%) on the gross amount thereof.

       As part of its fundamental review of its tax system, the States of Jersey
in the  Channel  Islands  are  introducing  a tax rate of zero  percent for most
companies in 2009. The resultant reduction in the overall corporate tax revenues
in Jersey is being  filled  by an  increase  in  direct  personal  taxation  for
individals  and by the  introduction  in May 2008 of a goods and services tax of
3%. The Company  anticpates  it will have a zero  percent tax rate on its Jersey
profits,  and as such, no tax credit will be available  for Jersey  residents in
the event  dividends  are paid in the future by the  Company.  It is likely that
from the beginning of 2009, an individual  resident in Jersey who owns more than
2% of the Ordinary Share capital of the Company, equivalent to 1,288,781 shares,
may be  liable  for tax on their  proportionate  share of the  Company's  annual
profits that have not been distributed. Shareholders who are unsure of their tax
position should consult their tax advisor.

       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.

                                       6
<PAGE>

       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,
either alone or together  with one or more  associated  corporations,  controls,
directly or  indirectly,  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 realized gains on certain
investments. 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 U.S.  dollar amount realized and the
U.S. holder's tax basis determined in U.S. dollars 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 15% for taxable
years beginning before January 1, 2011.

Backup Withholding Tax

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

Estate and Gift Tax

       No death, estate, gift,  inheritance or capital transfer taxes are levied
in Jersey.  Probate duty is payable in Jersey if an  individual  dies holding an
interest  in the  shares  of a Jersey  company  where  the  total  assets of the
deceased  located  in  Jersey  for  legal  purposes  are  valued  at  more  than
(pound)10,000.  The amount of probate  duty payable  increases  depending on the
value of Jersey assets held at death but the maximum probate duty is 0.75%.

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 charge 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. If this charge is no more than (pound)5,  then the transfer
is  exempt.  Gifts and other  transfers  which are  neither  sales,  nor made in
contemplation of a sale, are not subject to this charge.

                                       7
<PAGE>

        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  (if the stamp duty charge is no more than  (pound)5,
then the transfer is exempt) 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
10 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.


Item 6.    SELECTED FINANCIAL DATA

       Not required.


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) variations in demand for our products and services, (ii)
the success of our new products and services,  (iii) significant  changes in net
cash flows in or out of our businesses,  (iv) fluctuations in the performance of
debt and equity markets worldwide,  (v) the enactment of adverse state,  federal
or foreign

                                       8
<PAGE>


regulation or changes in government policy or regulation  (including  accounting
standards) affecting our operations,  (vi) the effect of economic conditions and
interest  rates in the U.S., the U.K. or  internationally,  (vii) the ability of
our subsidiaries to compete in their respective  businesses,  (viii) our ability
to  attract  and  retain  key  personnel,   and  (ix)  actions  by  governmental
authorities that regulate our businesses, including insurance commissions.


Results of Operations by Business Segment

       Income  (loss)  before  income tax expense for our  reportable  operating
segments, based on management's internal reporting structure, is as follows:
<TABLE>
<CAPTION>

                                                                                           Year Ended December 31,
                                                                                        ---------------------------
                                                                                            2008            2007
                                                                                        -----------     -----------
                                                                                               (In thousands)
Income (loss) from before income tax expense
  by operating segment:
<S>                                                                                     <C>             <C>
Consulting in venture capital ......................................................... $      (738)    $       317
Life insurance and annuities...........................................................       1,027           1,228
                                                                                        -----------     -----------
                                                                                                289           1,545
Reconciliation of segment amounts to consolidated amounts:
Interest income........................................................................          77             226
Corporate expenses.....................................................................      (1,933)         (1,393)
                                                                                        -----------     -----------
Consolidated income (loss) before
  income tax expense................................................................... $    (1,567)    $       378
                                                                                        -----------     -----------
                                                                                        -----------     -----------
</TABLE>

       Business segment data contained in Note 14 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.


Consulting in Venture Capital

       Certain  information   regarding  our  consulting  segment's  results  of
operations is as follows:
<TABLE>
<CAPTION>

                                                                                           Year Ended December 31,
                                                                                        ---------------------------
                                                                                            2008            2007
                                                                                        -----------     -----------
                                                                                               (In thousands)
Revenues:
<S>                                                                                     <C>             <C>
Consulting fees........................................................................ $       564     $     1,718
                                                                                        -----------     -----------
Total revenues.........................................................................         564           1,718

Operating expenses.....................................................................       1,302           1,401
                                                                                        -----------     -----------
Income (loss) before income tax expense................................................ $      (738)    $       317
                                                                                        -----------     -----------
                                                                                        -----------     -----------
</TABLE>

2008 compared to 2007

       In 2008, our consulting segment contributed a loss before income taxes of
$0.7 million to our overall loss before income taxes,  compared to income before
income taxes of $0.3 million in 2007.  This  decrease in income before taxes for
this segment in 2008 was  attributable to a $1.1 million  decrease in consulting
fee revenues.

                                       9
<PAGE>

       Consulting  fee  revenues  decreased  from $1.7  million  in 2007 to $0.6
million  in 2008,  due to a decline  in the  number  of  consulting  clients.  A
contract was signed with a client in early 2007 that  generated  $0.9 million in
consulting fees during 2007; however,  that contract ran only through the end of
2007. A new contract was signed with this client in March 2008, though the scope
of our work under this contract was  significantly  reduced and thus  consulting
revenues  from this client for 2008 were  significantly  lower at $0.4  million.
This  second  contract  expired at the end of 2008,  and as of this date,  a new
contract for 2009 has not yet been agreed.

       Under  the  2007  contract  referenced  above,  we are  entitled  to earn
additional  compensation in the future depending upon the performance of certain
venture capital  investments made by the client during 2007 with our assistance.
Any such  compensation  would be paid to us as a proportion  of any capital gain
realized  by  the  client,   after  deducting  certain  costs,  upon  a  defined
realization of the investment by the client.  To date, no such  compensation has
been realized.

       Some  of our  former  consulting  agreements  provided  that  we  receive
promissory  notes that are  convertible  into preferred  stock,  or common stock
options,  as part of our compensation.  During 2007, we received preferred stock
in a consulting  client  valued at $140,000,  resulting  from the  conversion of
$140,000 in promissory  notes. We also hold common stock options in a technology
company that are now fully vested,  though we believe that currently  these have
no value.

        BICC's typical client is a Silicon Valley technology  company or a large
international   telecommunications  company.  Our  objective  has  been  to  use
consulting  revenues  to finance  the  development  of large  telecommunications
company  relationships  in Europe  and Asia,  which  has led to  several  equity
investments  by a client with  additional  fees for work  performed by BICC. The
level of consulting fees is expected to be volatile  depending on the nature and
extent of our work at any point in time and the global economy.  We are actively
seeking new clients and business opportunities.


Life Insurance and Annuities

       Certain information  regarding our life insurance and annuities segment's
results of operations is as follows:
<TABLE>
<CAPTION>

                                                                                           Year Ended December 31,
                                                                                        ---------------------------
                                                                                            2008            2007
                                                                                        -----------     -----------
                                                                                               (In thousands)
<S>                                                                                     <C>             <C>
Revenues and net investment gains and losses:
Investment income...................................................................... $       237     $       578
Insurance policy charges...............................................................           -               2
Net realized investment gains..........................................................       1,143           1,198
                                                                                        -----------     -----------
Total revenues and net investment gains and losses.....................................       1,380           1,778

Expenses:
Amounts credited on insurance policyholder accounts....................................           6              44
General and administrative expenses....................................................         347             506
                                                                                        -----------     -----------
Total expenses.........................................................................         353             550
                                                                                        -----------     -----------
Income before income tax expense....................................................... $     1,027     $     1,228
                                                                                        -----------     -----------
                                                                                        -----------     -----------
</TABLE>

       LPAL's  policyholder  liabilities  fell  during  2008  from  $141,000  to
$106,000  primarily due to exchange rate changes.  As of December 31, 2008, LPAL
has three policies  remaining which are scheduled to mature in the first half of
2009. There are currently no plans to write new policies.

                                       10
<PAGE>


2008 compared to 2007

       In 2008, LPAL  contributed  income before income taxes of $1.0 million to
our overall loss before income taxes,  compared to income before income taxes of
$1.2  million in 2007.  The $0.2 million  lower  income  before taxes in 2008 is
attributable  to a decrease of $0.3 million in interest income and a decrease of
$0.1 million in net realized investment gains, offset by a $0.2 million decrease
in expenses.

       Interest income on cash and corporate bond  investments  declined by $0.3
million in 2008 to $237,000,  due to the maturity of all corporate bond holdings
by July 2007  (which  was tied to the  maturity  of  policies),  as well as to a
decline in interest rates.  The level of LPAL's cash and cash equivalents at the
end of 2008 was $11.8  million,  compared with $10.3 million at the end of 2007,
with $1.4 million in cash coming in at the very end of 2008 related to the Enron
securities  litigation  settlement  payment  (see  below for more  information).
Interest credited on policyholder accounts decreased to $6,000 in 2008, compared
to $44,000 in 2007.  This decrease was due to policy  maturities of $3.6 million
during  2007.  The average  rate  credited to  policyholders  was 4.25% in 2008,
compared with 4.8% in 2007.

       LPAL's total assets  increased to $13.2  million as of December 31, 2008,
compared to $12.2 million as of December 31, 2007,  primarily due to the receipt
in February  2008 of the $0.3  million  final  payment from the  WorldCom,  Inc.
securities  litigation  settlement  and the receipt in December 2008 of the $1.4
million partial  payment from the Enron  securities  litigation  settlement (see
below  for  more   information),   which  was  offset  by   other-than-temporary
write-downs totaling $0.5 million on one of LPAL's private equity investments.

       Net realized  investment  gains for 2008 were $1.1  million,  compared to
$1.2 million for 2007. In January 2007, LPAL received $1.2 million  representing
a  partial  distribution  from the  WorldCom,  Inc.  securities  litigation.  In
February  2008,  LPAL received a final WorldCom  distribution  of $0.27 million.
LPAL held certain  WorldCom,  Inc. publicly traded bonds which it sold at a loss
in 2002.  These two payments  totaling  almost $1.5 million  recover part of the
realized  loss  recognized by LPAL in 2002.  In December  2008,  LPAL received a
partial  distribution  of $1.37  million from the Enron  Corporation  securities
litigation.  LPAL held certain Enron Corporation  publicly traded bonds which it
sold at a loss  in  2002.  This  payment  recovers  part  of the  realized  loss
recognized by LPAL in 2002. The timing and amount of future Enron  distributions
is currently uncertain. The two payments received in 2008 totaling $1.64 million
were offset by other-than-temporary impairment write-downs totaling $0.5 million
on one of LPAL's private equity investments.

       Policyholder liabilities as of December 31, 2008 were $106,000. There are
three policies  outstanding as of that date totaling $72,000 which are scheduled
to mature in the first half of 2009. The balance of $34,000 relates to two death
claims which are pending payment.

       Included in general and  administrative  expenses for 2007 are $44,000 of
employee severance costs.  Excluding these employee severance costs, general and
administrative  expenses for 2007 were $0.5 million,  compared with $0.3 million
for 2008.  This $0.2 million  decrease in expenses for 2008 was primarily due to
lower staff costs as well as to lower facilities costs subsequent to the closure
of our Jersey  office in  mid-2007.  We no longer  have staff or  operations  in
Jersey,  though  LPAL  maintains  a  registered  office in  Jersey  and is still
regulated by the JFSC.

Corporate and Other

2008 compared to 2007

       Corporate  expenses  increased  by $0.5  million to $1.9 million in 2008,
compared  to $1.4  million  in 2007.  This  increase  was due to a $0.1  million
increase  in  professional  services  costs,  a $0.1  million  write-off  in web
development costs paid to a third party vendor subsequent to our decision not to
go forward with a web based project, and a $0.3 million increase in compensation
paid to our Chief Financial  Officer,  Mr. Ian K. Whitehead,  under an agreement
dated  August 12,  2008.  Under that  agreement,  the Company gave notice to Mr.
Whitehead that his employment agreement would end on June 30, 2009. Reference is
made to Exhibit  10.3.1 to the Company's  Form 10-K for the year ended  December
31, 2000 for a copy of Mr. Whitehead's employment agreement and to the Company's
Proxy  Statement  dated April 29, 2008 for a description of his


                                       11
<PAGE>


salary  waiver of May 2003.  The Company's  operating  expenses for the 12-month
period ending on June 30, 2009 will increase by approximately  $0.7 million,  of
which approximately half has already been recognized in the second half of 2008.

       Interest income,  excluding interest income earned by LPAL,  decreased by
$149,000 to $77,000 for 2008 compared to $226,000 in 2007, due to declining cash
balances  (outside of LPAL),  as well as to lower interest rates. As of December
31,  2008,  our cash and cash  equivalents,  excluding  the amount held by LPAL,
amounted to $1.9  million,  a decrease of $2.4 million  from  December 31, 2007.
This decrease resulted from the use of cash in operating activities.

Consolidated Income (Loss) Before Income Tax Expense

2008 compared to 2007

       Our consolidated loss before income tax expense was $1.6 million in 2008,
compared  to income  before  income  taxes of $0.4  million  in 2007.  This $2.0
million  decline in income before taxes was due to a decrease in consulting  fee
revenues of $1.2 million, a decrease in interest income of $0.5 million,  and an
increase in operating expenses of $0.2 million, all as explained above.

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.
Through  2008,  we were  subject to income tax in Jersey at a rate of 20%.  (See
discussion of the new tax system in Jersey in Part II, Item 5,  "Taxation.")  In
the United States,  we are subject to both federal and California taxes at rates
up to 34% and 8.84%, respectively.

2008 compared to 2007

       The  $4,000  tax  expense  for 2008 is  comprised  of $2,000  in  minimum
California taxes and $2,000 in federal  alternative  minimum taxes caused by the
consolidation  of London Pacific Life & Annuity  Company in our U.S. tax group's
consolidated returns from 2005 onwards. For more information, see Note 6 "Income
Taxes" to our consolidated  financial statements included in Item 8 of this Form
10K. Other than these taxes, no other tax expense or benefits were applicable to
our Group for 2008. A loss before  income taxes of $0.5 million was  contributed
by our Jersey  operations  and a loss before  income  taxes of $1.1  million was
contributed  by our  U.S.  operations;  however,  we did not  recognize  any tax
benefits  due to the 100%  valuation  allowances  that we have  provided for all
deferred  tax  assets.  In 2007,  our only tax  expense  was  $2,000 of  minimum
California taxes.


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,   revenue  recognition,  and
assumptions  used to value share  options  granted.  These  critical  accounting
policies are described below.

Accounting for Investments

       From  January 1, 2008,  our  primary  business  for  financial  reporting
purposes is  considered to be  consulting  in venture  capital  rather than life
insurance and annuities. As such, our private equity investments are now carried
at cost less any other-than-temporary  impairments.  Previously,  we carried our
private  equity  investments  at fair  value in  accordance  with  Statement  of
Financial  Accounting  Standards No. 115, "Accounting for Certain Investments in
Debt and Equity  Securities"  ("SFAS 115").  Under paragraph 127(b) of

                                       12
<PAGE>


SFAS 115,  insurance  companies are required to report equity securities at fair
value even if they do not meet the scope  criteria  in  paragraph 3 of SFAS 115.
With respect to our private  equity  investments  held at December 31, 2007, our
best  estimate of their fair value was their cost basis.  Therefore,  the change
from an  insurance  company for  financial  reporting  purposes to a  consulting
company as of January 1, 2008 did not have an impact on the  carrying  values of
our private equity investments.

       For 2008, because all of our private equity investments are less than 20%
in the investee companies,  and we do not have any significant  influence on the
investee  companies,  all such  investments are accounted for in accordance with
the cost method.  In accordance  with FASB Staff Position Nos. FAS 115-1 and FAS
124-1 ("FSP 115-1 and 124-1"), "The Meaning of  Other-Than-Temporary  Impairment
and Its Application to Certain Investments," we evaluate our investments for any
events or  changes  in  circumstances  ("impairment  indicators")  that may have
significant adverse effects on our investments.  If impairment indicators exist,
then the carrying  amount of the  investment is compared to its  estimated  fair
value as  determined  in  accordance  with  Statement  of  Financial  Accounting
Standards No. 157 ("SFAS 157"), "Fair Value  Measurements." If any impairment is
determined to be other-than-temporary,  then a realized investment loss would be
recognized during the period in which we make such determination.

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 companies doing business in various  segments of
technology  industries.  These  investments  are  normally  held for a number of
years.  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.

       SFAS 157  defines  fair value as the price that would be received to sell
an asset or paid to  transfer  a  liability  in an orderly  transaction  between
market  participants at the measurement date (an exit price).  SFAS 157 has also
established  a fair value  hierarchy  that  prioritizes  the inputs to valuation
techniques  used to measure fair value into three broad  levels.  Level 3 inputs
apply to the  determination  of fair value for our private  equity  investments.
These  are  unobservable  inputs  where  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. From January 1, 2008, only other-than-temporary impairments will
be recognized and the carrying value of a private  equity  investment  cannot be
increased above its cost unless the investee company completes an initial public
offering or is acquired.

                                       13
<PAGE>

Other-than-temporary Impairments of Investments

       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.

       In relation to our private equity  securities  that do not have a readily
determinable fair value,  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.

       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).

Revenue Recognition

       The timing of revenue  recognition  for  consulting  services  requires a
degree of  judgment.  Under SEC Staff  Accounting  Bulletin No. 104 ("SAB 104"),
revenue is realized or  realizable  and earned  when  persuasive  evidence of an
arrangement  exists,  delivery has occurred or services have been rendered,  the
seller's  price to the buyer is fixed and  determinable  and  collectibility  is
reasonably  assured.  We recognize  consulting fee revenues in our  consolidated
statement of operations as the services are performed,  if all the conditions of
SAB  104  are  met.  We do not  recognize  performance  based  revenues  under a
consulting   arrangement   until  the  payments  are  earned,   the  client  has
acknowledged the liability in writing and collectibility is reasonably assured.

Valuation of Share Options Granted

       We calculate the fair value of share option grants to employees using the
Black-Scholes  option  pricing  model,  even though this model was  developed to
estimate the fair value of freely tradable,  fully transferable  options without
vesting  restrictions,  which  differ  significantly  from the  Company's  share
options. The Black-Scholes model also requires subjective assumptions, including
future share price  volatility  and expected  time to  exercise,  which  greatly
affect the calculated  values.  The expected term of options  granted is derived
from  historical  data  on  employee   exercises  and  post-vesting   employment
termination behavior.  The risk-free rate is based on the U.S. Treasury rates in
effect  during the  corresponding  period of grant.  The expected  volatility is
based on the historical  volatility of the Company's share price.  These factors
could  change in the  future,  which would  affect the share based  compensation
expense in future  periods,  if the  Company,  through  the ESOT,  should  grant
additional  share  options.  It should  be  noted,  however,  that  share  based
compensation expense in the Company's  consolidated  statement of operations has
no negative impact on total shareholders'  equity because there is an offsetting
entry to additional paid-in capital in the Company's consolidated balance sheet.

                                       14
<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 2008 by $0.9 million from
$14.6  million as of December 31, 2007 to $13.7 million as of December 31, 2008.
This  decrease in cash and cash  equivalents  resulted  from $2.5 milion of cash
used in operating activities, which was partially offset by $1.6 million of cash
provided by investing  activities.  Cash used in operating  activities primarily
resulted  from the $1.6  million  operating  loss for 2008,  as adjusted for net
realized  investment  gains of $1.1  million  which  includes  the $1.6  million
partial  proceeds  from the Enron  securities  litigation  settlement  (which is
included in cash flows provided by investing activities), net of $0.5 million in
other-than-temporary  write-downs on one private equity  investment taken during
2008.  As of December 31, 2008,  our cash and cash  equivalents,  excluding  the
amount held by LPAL,  amounted to $1.9 million,  a decrease of $2.4 million from
December  31, 2007.  This  decrease  resulted  from the use of cash in operating
activities.

       The $11.8 million of cash and cash  equivalents  held by LPAL, as well as
the $1.3 million of  investments  held by LPAL,  are not currently  available to
fund the  operations or  commitments  of the Company or its other  subsidiaries.
However,  a dividend could be paid from LPAL to the Company.  In April 2008, the
Company obtained approval from the JFSC for LPAL to make dividend payments up to
a total of $5.0  million to the  Company in the future.  As a  condition  of the
JFSC's approval,  the Company has agreed to provide financial support to LPAL in
the  unlikely  event  LPAL's  funds  are  insufficient  to pay  off  its  policy
liabilities  totaling  $106,000  as  of  December  31,  2008,  as  well  as  the
operational costs of LPAL.

       Shareholders'  equity  decreased  during 2008 by $1.5  million from $16.5
million at December 31, 2007 to $15.0 million as of December 31, 2008, primarily
due to the net loss for the period of $1.6 million.  As of December 31, 2008 and
2007,  $62.6  million of our  Ordinary  Shares,  at cost,  held by the  employee
benefit trusts have been netted against shareholders' equity.

       During 2008, LPAL continued to service its existing policyholders.  There
were no policy maturities or surrenders in 2008.  Policyholder  liabilities were
$106,000 as of December 31, 2008,  compared to $141,000 as of December 31, 2007.
The $35,000  decrease in policyholder  liabilities was primarily due to exchange
rate changes. The three policies remaining at December 31, 2008 are scheduled to
mature in the first half of 2009. LPAL has sufficient  liquid  resources to fund
these maturities. As of December 31, 2008, LPAL had cash of $11.8 million.

       As  of  December  31,  2008,  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,  2008,  we  had  $1.9  million  of  cash  and  cash
equivalents, excluding cash held by our life insurance and annuities segment. We
believe that this cash balance, along with dividends to the Company from LPAL up
to a total of $5.0  milion  (as  discussed  above),  is  sufficient  to fund our
operations  (consulting  in venture  capital and corporate  activities)  over at
least the next 12 months.


Item 7A.    QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

    Not required.


                                       15
<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.....................................................  17

Consolidated Balance Sheets as of December 31, 2008 and 2007................................................  18

Consolidated Statements of Operations for the Years Ended
December 31, 2008 and 2007..................................................................................  19

Consolidated Statements of Cash Flows for the Years Ended
December 31, 2008 and 2007..................................................................................  20

Consolidated Statements of Changes in Shareholders' Equity for the Years Ended
December 31, 2008 and 2007..................................................................................  21

Consolidated Statements of Comprehensive Income for the Years Ended
December 31, 2008 and 2007..................................................................................  22

Notes to Consolidated Financial Statements..................................................................  23

</TABLE>


                                       16
<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, 2008 and 2007 and the
related   consolidated   statements  of  operations,   cash  flows,  changes  in
shareholders'  equity and comprehensive  income (loss) for each of the two years
in the period  ended  December 31, 2008.  In  connection  with our audits of the
financial  statements,  we have also  audited  Schedule I - Condensed  Financial
Information  of  Registrant  as of and for each of the years ended  December 31,
2008 and 2007. These financial statements and schedule are the responsibility of
the Company's  management.  Our responsibility is to express an opinion on these
financial statements and schedule based on our audits.

       We conducted  our audits in  accordance  with the standards of the Public
Company Accounting Oversight Board (United States). Those standards require that
we plan and perform the 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,  2008 and 2007,  and the  results  of its
operations  and its cash  flows  for each of the two years in the  period  ended
December 31, 2008, in conformity with accounting  principles  generally accepted
in the United States of America.

       Also, in our opinion,  Schedule I - Condensed  Financial  Information  of
Registrant,  when  considered  in relation to the basic  consolidated  financial
statements  taken as a whole,  presents  fairly in all  material  respects,  the
information set forth therein.



/s/  BDO Seidman, LLP
San Francisco, California
March 31, 2009




                                       17
<PAGE>

                  BERKELEY TECHNOLOGY LIMITED AND SUBSIDIARIES

                           CONSOLIDATED BALANCE SHEETS
                      (In thousands, except share amounts)
<TABLE>
<CAPTION>
                                                                                             December 31,
                                                                                        ---------------------------
                                                                                           2008             2007
                                                                                        -----------     -----------
                                            ASSETS
Current assets:
<S>                                                                                     <C>             <C>
   Cash and cash equivalents......................................................      $    13,681(1)  $    14,568
   Accounts receivable, less allowances of $0 and $34 as of December 31,
       2008 and 2007, respectively................................................              222             423
   Interest receivable............................................................                1              14
   Prepaid expenses and deposits..................................................              147             164
                                                                                        -----------     -----------
Total current assets..............................................................           14,051          15,169

Private equity investments (at lower of cost or estimated fair value).............            1,484(1)        1,984
Property and equipment, net of accumulated depreciation of $177 and $175
   as of December 31, 2008 and 2007, respectively.................................                9              14
                                                                                        -----------     -----------
Total assets......................................................................      $    15,544     $    17,167

                                                                                        -----------     -----------
                                                                                        -----------     -----------
                        LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities:
   Accounts payable and accrued expenses..........................................      $       459     $       547
   Policyholder liabilities (due in less than one year)...........................              106              46
                                                                                        -----------     -----------
Total current liabilities.........................................................              565             593

Policyholder liabilities (due in more than one year)..............................                -              95
                                                                                        -----------     -----------
Total liabilities.................................................................              565             688
                                                                                        -----------     -----------
Commitments and contingencies (See Note 8)

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, 2008
   and 2007.......................................................................            3,222           3,222
Additional paid-in capital........................................................           67,860          67,789
Retained earnings.................................................................            6,894           8,465
Employee benefit trusts, at cost (13,522,381 shares as of
   December 31, 2008 and 2007)....................................................          (62,598)        (62,598)
Accumulated other comprehensive loss..............................................             (399)           (399)
                                                                                        -----------     -----------
Total shareholders' equity........................................................           14,979          16,479
                                                                                        -----------     -----------
Total liabilities and shareholders' equity........................................      $    15,544     $    17,167
                                                                                        -----------     -----------
                                                                                        -----------     -----------
<FN>
(1) The  Company's  insurance  subsidiary,   London  Pacific  Assurance  Limited ("LPAL"), holds $11,823 of the Group's
    $13,861 in cash and cash equivalents and $1,344 of the Group's  $1,484 in private  equity  investments  which are
    only available to fund the operations or commitments of LPAL, and not to the parent company or any of the other
    subsidiaries.
</FN>

</TABLE>


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


                                       18
<PAGE>



                  BERKELEY TECHNOLOGY LIMITED AND SUBSIDIARIES

                      CONSOLIDATED STATEMENTS OF OPERATIONS
                (In thousands, except per share and ADS amounts)

<TABLE>
<CAPTION>

                                                                                          Year Ended December 31,
                                                                                      -----------------------------
                                                                                          2008              2007
                                                                                      -----------       -----------
Revenues:
<S>                                                                                   <C>               <C>
Consulting fee income.............................................................    $       564       $     1,718
Investment income.................................................................            314               804
Insurance policy charges..........................................................              -                 2
Net realized investment gains.....................................................          1,143             1,198
                                                                                      -----------       -----------
                                                                                            2,021             3,722
Expenses:
Operating expenses................................................................          3,582             3,300
Amounts credited on insurance policyholder accounts...............................              6                44
                                                                                      -----------       -----------
                                                                                            3,588             3,344
                                                                                      -----------       -----------
Income (loss) before income tax expense...........................................         (1,567)              378

Income tax expense................................................................              4                 2
                                                                                      -----------       -----------
Net income (loss).................................................................    $    (1,571)      $       376
                                                                                      -----------       -----------
                                                                                      -----------       -----------




Basic and diluted earnings (loss) per share.......................................    $     (0.03)      $      0.01
                                                                                      -----------       -----------
                                                                                      -----------       -----------

Basic and diluted earnings (loss) per ADS.........................................    $     (0.31)      $      0.07
                                                                                      -----------       -----------
                                                                                      -----------       -----------

</TABLE>






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



                                       19
<PAGE>



                  BERKELEY TECHNOLOGY LIMITED AND SUBSIDIARIES

                      CONSOLIDATED STATEMENTS OF CASH FLOWS
                                 (In thousands)
<TABLE>
<CAPTION>
                                                                                          Year Ended December 31,
                                                                                       ----------------------------
                                                                                             2008           2007
                                                                                       ------------    ------------
<S>                                                                                    <C>             <C>
Net income (loss)....................................................................  $     (1,571)   $        376

Adjustments to reconcile net income (loss) to net
   cash used in operating activities:
Depreciation and amortization........................................................             6               5
Non-cash consulting fees.............................................................             -            (140)
Amounts credited on insurance policyholder accounts..................................             6              44
Net realized investment gains........................................................        (1,143)         (1,198)
Net amortization of investment premiums and discounts................................             -              30
Share based compensation.............................................................            71              71

Net changes in operating assets and liabilities:
   Accrued investment income ........................................................            13             289
   Other assets......................................................................           218            (237)
   Life insurance policy liabilities.................................................             -              (2)
   Accounts payable, accruals and other liabilities..................................           (74)            (27)

Other operating cash flows...........................................................             -               2
                                                                                       ------------    ------------
Net cash used in operating activities................................................        (2,474)           (787)
                                                                                       ------------    ------------
Cash flows from investing activities:
Purchases of available-for-sale equity securities....................................             -          (1,000)
Proceeds from maturity of held-to-maturity fixed maturity securities.................             -           3,000
Proceeds from sale and maturity of available-for-sale fixed
   maturity securities...............................................................             -           9,000
Proceeds from WorldCom, Inc. and Enron securities litigation settlements ............         1,643           1,198
Capital expenditures.................................................................            (2)             (4)
                                                                                       ------------    ------------
Net cash provided by investing activities ...........................................         1,641          12,194
                                                                                       ------------    ------------
Cash flows from financing activities:
Insurance policyholder benefits paid.................................................             -          (3,560)
                                                                                       ------------    ------------
Net cash used in financing activities................................................             -          (3,560)
                                                                                       ------------    ------------

Effect of exchange rate changes on cash..............................................           (54)             14
                                                                                       ------------    ------------

Net increase (decrease) in cash and cash equivalents.................................          (887)          7,861
Cash and cash equivalents at beginning of year.......................................        14,568           6,707
                                                                                       ------------    ------------
Cash and cash equivalents at end of year ............................................  $     13,681    $     14,568
                                                                                       ------------    ------------
                                                                                       ------------    ------------

Supplemental disclosure of cash flow information:

Cash paid during the year for:
Income taxes (net of amounts recovered)..............................................  $          2    $          2

</TABLE>

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

                                       20
<PAGE>


                  BERKELEY TECHNOLOGY LIMITED AND SUBSIDIARIES

           CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDERS' EQUITY
                                 (In thousands)
<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, 2007      64,439   $  3,222  $   67,718  $    7,999    $ (62,598)   $     (418)  $  15,923


Net income....................          -          -           -         376            -             -         376
Change in net unrealized
 gains and losses on
 available-for-sale securities          -          -           -           -            -            14          14
Foreign currency translation
 adjustment...................          -          -           -           -            -             5           5
Unclaimed dividends...........          -          -           -          90            -             -          90
Share based compensation,
 including income tax
 effect of $0 ................          -          -          71           -            -             -          71
                                 --------  ---------  ----------  ----------   ----------  ------------  ----------
Balance as of
 December 31, 2007............     64,439  $   3,222  $   67,789  $    8,465    $ (62,598)   $     (399)  $  16,479
                                 --------  ---------  ----------  ----------   ----------  ------------  ----------
                                 --------  ---------  ----------  ----------   ----------  ------------  ----------


Net loss......................          -  $       -  $        -  $  (1,571)    $       -    $        -   $  (1,571)
Share based compensation,
  including income tax
 effect of $0.................          -          -          71           -            -             -          71
                                 --------  ---------  ----------  ----------   ----------  ------------  ----------
Balance as of
 December 31, 2008............     64,439  $   3,222  $   67,860  $    6,894    $ (62,598)   $     (399)  $  14,979
                                 --------  ---------  ----------  ----------   ----------  ------------  ----------
                                 --------  ---------  ----------  ----------   ----------  ------------  ----------
</TABLE>



















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



                                       21
<PAGE>



                  BERKELEY TECHNOLOGY LIMITED AND SUBSIDIARIES

             CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS)
                                 (In thousands)
<TABLE>
<CAPTION>

                                                                                          Year Ended December 31,
                                                                                       ----------------------------
                                                                                             2008           2007
                                                                                       ------------    ------------


<S>                                                                                    <C>             <C>
Net income (loss)....................................................................  $     (1,571)   $        376

Other comprehensive income, net of deferred income taxes:

Foreign currency translation adjustments, net of income taxes of $0..................             -               5

Change in net unrealized gains and losses:
   Unrealized holding gains and losses on available-for-sale securities..............             -              14
                                                                                       ------------    ------------
Other comprehensive income ..........................................................             -              19
                                                                                       ------------    ------------
Comprehensive income (loss)..........................................................  $     (1,571)   $        395
                                                                                       ------------    ------------
                                                                                       ------------    ------------
</TABLE>

































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




                                       22
<PAGE>



                  BERKELEY TECHNOLOGY LIMITED AND SUBSIDIARIES

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                DECEMBER 31, 2008

       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  operations  of the Group and  discussed  in this
document include Berkeley  International Capital Corporation ("BICC") and London
Pacific Assurance Limited ("LPAL").  All intercompany  transactions and balances
have been eliminated in consolidation.

       From January 1, 2008, the consolidated  balance sheets are presented in a
classified  format as is appropriate for a consulting  company rather than in an
unclassified  format  as is  appropriate  for a  life  insurance  and  annuities
company.  The  majority  of the Group's  assets  continue to be held by its life
insurance and annuities business;  however, there are few policies remaining and
there were no new  policies  issued or  policies  that  matured in 2008.  Policy
maturities  and  surrenders  during 2007 were $3.6  million.  This change had no
impact on the  Company's  shareholders'  equity at January 1, 2008.  The Group's
primary business is now consulting in venture capital.  See Note 2 "Investments"
below for a discussion of the impact of this change on the Company's  accounting
policy for its private equity investments.

       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. As the Company is a
"Smaller  Reporting  Company" as defined by SEC rules that became  effective  on
February 4, 2008, only two years of financial statements are included herein.

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

       As discussed  above,  from January 1, 2008, the Group's primary  business
for financial  reporting  purposes is now considered to be consulting in venture
capital rather than life insurance and annuities.  As such, the Group's  private
equity  investments  are now  carried  at  cost  less  any  other-than-temporary
impairment, if any. Previously, the Group carried its private equity investments
at fair value in accordance with Statement of Financial Accounting Standards No.
115  ("SFAS  115"),  "Accounting  for  Certain  Investments  in Debt and  Equity
Securities."  Under  paragraph  127(b)  of SFAS  115,  insurance  companies  are
required to report equity  securities at fair value even if they do not meet the
scope  criteria in paragraph 3 of SFAS 115. With respect to the Group's  private
equity investments held at December 31, 2007, the Group's best estimate of their
fair value was their cost basis. Therefore, the change from an insurance company
for financial  reporting  purposes to a consulting company as of January 1, 2008
did not have an impact on the carrying


                                       23
<PAGE>

                  BERKELEY TECHNOLOGY LIMITED AND SUBSIDIARIES

             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

values of the Group's  private equity  investments.  Marketable  debt and equity
securities will be carried at fair value in accordance with SFAS 115, should the
Group make such investments in the future.

       As of December  31,  2008 and 2007,  the Group's  only  investments  were
private equity securities.

       For 2008,  because all of the Group's private equity investments are less
than 20% in the investee companies,  and the Group does not have any significant
influence on the investee  companies,  all such investments are accounted for in
accordance with the cost method. In accordance with FASB Staff Position Nos. FAS
115-1 and FAS 124-1,  "The Meaning of  Other-Than-Temporary  Impairment  and Its
Application  to Certain  Investments,"  the  Group's  management  evaluates  the
Group's  investments  for any events or changes  in  circumstances  ("impairment
indicators")   that  may  have  significant   adverse  effects  on  the  Group's
investments.  If impairment  indicators  exist,  then the carrying amount of the
investment is compared to its  estimated  fair value as determined in accordance
with  Statement of Financial  Accounting  Standards No. 157 ("SFAS 157"),  "Fair
Value Measurements." If any impairment is determined to be other-than-temporary,
then a realized  investment loss would be recognized  during the period in which
such determination is made by the Group's management.

       SFAS 157  defines  fair value as the price that would be received to sell
an asset or paid to  transfer  a  liability  in an orderly  transaction  between
market  participants at the measurement date (an exit price).  SFAS 157 has also
established  a fair value  hierarchy  that  prioritizes  the inputs to valuation
techniques used to measure fair value into three broad levels.  See Note 9 "Fair
Value  Measurements and Disclosures"  below for the three levels of the SFAS 157
hierarchy.  Level 3 inputs  apply to the  determination  of fair  value  for the
Group's  private equity  investments.  These are  unobservable  inputs where the
determination  of  fair  values  of  investments  requires  the  application  of
significant   judgment.   As  discussed  above,   from  January  1,  2008,  only
other-than-temporary  impairments will be recognized and the carrying value of a
private equity investment cannot be increased above its cost unless the investee
company  completes an initial public  offering or is acquired.  During 2008, the
Group  determined  that  impairment  indicators  existed  for one of its private
equity   investments,    and   then   determined   that   the   impairment   was
other-than-temporary.  The Group recognized  realized  investment  losses in its
consolidated statement of operations totaling $500,000 on this investment during
the third and fourth quarters of 2008. It is possible that the factors evaluated
by management  and fair values will change in subsequent  periods,  resulting in
material impairment charges in future periods.

       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 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.

       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 the Group's  investments,  below the cost or amortized cost basis,
are recognized as realized  investment losses in the consolidated  statements of
operations.  The cost  basis of such  securities  is  adjusted  to  reflect  the
write-down recorded.


                                       24
<PAGE>



                  BERKELEY TECHNOLOGY LIMITED AND SUBSIDIARIES

             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

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; and

       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.

Revenue Recognition

       Consulting fees are recognized in income on an accrual basis,  based upon
when services are performed and in accordance with SEC Staff Accounting Bulletin
No. 104 ("SAB 104"). Under SAB 104, revenue is realized or realizable and earned
when  persuasive  evidence of an  arrangement  exists,  delivery has occurred or
services  have  been  rendered,  the  seller's  price to the  buyer is fixed and
determinable  and  collectibility  is  reasonably  assured.   Performance  based
revenues under a consulting  arrangement are not recorded until the payments are
earned,  the client has acknowledged the liability in writing and collectibility
is reasonably assured.

       Investment  income  comprises interest  on fixed maturity  securities and
cash balances and is accounted for on an accrual basis.  Dividends are accounted
for when declared.



                                       25
<PAGE>

                  BERKELEY TECHNOLOGY LIMITED AND SUBSIDIARIES

             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

Share Based Compensation

Equity compensation plan

       The London Pacific Group 1990 Employee Share Option Trust ("ESOT"), which
was approved by shareholders in 1990, provides for the granting of share options
to employees and directors. Such grants to employees and directors are generally
exercisable in four equal annual  installments  beginning one year from the date
of grant, subject to employment continuation, and expire seven to ten years from
the date of grant.  Until August 2008,  options were  generally  granted with an
exercise  price equal to the fair market value of the  underlying  shares at the
date of grant.  On August 19,  2008,  the exercise  price of  4,450,000  options
granted on March 27, 2007 to employees  and directors was modified from $0.10 to
$0.31,  the net book value of the shares as of December 31, 2006.  Until further
notice,  new option  grants  will have an  exercise  price equal to the net book
value of the shares as of the end of the previous quarter.

Share based compensation expense

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

       The Company adopted SFAS 123R using the modified  prospective  transition
method as permitted under SFAS 123R. Accordingly,  prior period amounts were not
restated. Under this application, the Company is required to record compensation
expense for all awards  granted  after the date of adoption and for the unvested
portion of  previously  granted  awards that remain  outstanding  at the date of
adoption.  Prior to the adoption of SFAS 123R,  the Company  used the  intrinsic
value method as prescribed by APB 25 and thus recognized no compensation expense
for options  granted with exercise  prices equal to the fair market value of the
Company's ordinary shares on the date of grant.

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

       SFAS 123R  requires  companies  to estimate the fair value of share based
payment awards on the date of grant using an option pricing model.  The value of
the portion of the award that is  ultimately  expected to vest is  recognized as
expense  over  the  requisite  service  periods  in the  Company's  consolidated
statement of operations.

                                       26
<PAGE>


                  BERKELEY TECHNOLOGY LIMITED AND SUBSIDIARIES

             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

       Share based compensation expense recognized in the Company's consolidated
statement of operations  for the year ended  December 31, 2008 and 2007 includes
compensation  expense for share options  granted prior to, but not yet vested as
of December  31,  2005,  as well as  compensation  expense for  4,500,000  share
options  granted to employees  and  directors on March 27, 2007,  and  3,450,000
share  options  granted to employees  and directors on August 20, 2008. No share
options were granted during 2006. SFAS 123R requires forfeitures to be estimated
at the time of grant and revised, if necessary,  in subsequent periods if actual
forfeitures  differ  from those  estimates.  Share  based  compensation  expense
calculated  in  accordance  with SFAS  123R is to be based on awards  ultimately
expected to vest,  and  therefore  the expense  should be reduced for  estimated
forfeitures.  The Company's  estimated  forfeiture  rate of zero percent for the
first six months of 2008 and for the full year 2007 was based upon the fact that
all unvested options related to longstanding  employees and directors.  However,
in September 2008, an employee gave notice of his  resignation  effective at the
end of October  2008.  As such,  2,900,000  unvested  options were  forfeited on
October 31, 2008. As these  forfeitures  were expected as of September 30, 2008,
share based  compensation  expense  was reduced in the third  quarter of 2008 by
$18,000.  This  represents  the  reversal  of share based  compensation  expense
amortization through the third quarter of 2008 related to the 2,900,000 unvested
and  forfeited  options.  In August  2008,  the Company gave notice to its Chief
Financial  Officer that his current  employment  agreement would end on June 30,
2009.  As a result,  it is expected  that this  employee  will  forfeit  500,000
options that will be unvested as of June 30, 2009. The Company's net share based
compensation  expense for 2008 was not impacted by this  expected  forfeiture of
500,000 options;  however,  there will be no net compensation expense related to
these  options  from the  second  quarter  of 2009 (a  reduction  of  $4,056  of
compensation expense per quarter). Despite the departure of these two employees,
the Group's management  continues to believe that a zero percent forfeiture rate
for future periods is appropriate.

       SFAS  123R  requires  the cash  flows  resulting  from  the tax  benefits
resulting from tax deductions in excess of the compensation  cost recognized for
those options to be classified as financing  cash flows.  As there were no share
option  exercises  during 2008 or 2007,  the Company had no related tax benefits
during those years. Prior to the adoption of SFAS 123R, those tax benefits would
have been  reported as  operating  cash flows had the Company  received  any tax
benefits related to option exercises.

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

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


                                       27
<PAGE>


                  BERKELEY TECHNOLOGY LIMITED AND SUBSIDIARIES

             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

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.

       In  June  2006,  the  FASB  issued  Interpretation  No.  48  ("FIN  48"),
"Accounting  for  Uncertainty  in Income Taxes." FIN 48 clarifies the accounting
for  uncertainty  in  income  taxes  recognized  in  an  enterprise's  financial
statements in accordance  with Statement of Financial  Accounting  Standards No.
109, "Accounting for Income Taxes." This interpretation prescribes a recognition
threshold and measurement  attribute for the financial statement recognition and
measurement of a tax position taken or expected to be taken in a tax return. FIN
48 also provides guidance on  de-recognition of tax benefits,  classification on
the balance  sheet,  interest  and  penalties,  accounting  in interim  periods,
disclosure and  transition.  The Company  adopted FIN 48 on January 1, 2007. The
adoption  of the FIN 48 did not have any  impact on the  Company's  consolidated
financial statements.

Earnings Per Share and ADS

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

       Earnings  (loss) per ADS is equivalent to ten times  earnings  (loss) per
Ordinary Share.

Foreign Currencies

       Prior  to July 1,  2007,  the  Group  used  the  British  pound  sterling
("sterling")  as the  functional  currency  of LPAL and the U.S.  dollar  as the
functional currency of the Company and all other significant  subsidiaries.  Due
to  significant  changes in the operating  environment  of LPAL,  the functional
currency of LPAL was changed to the U.S.  dollar  effective July 1, 2007. By the
end of the second quarter of 2007,  almost all policies had been  redeemed,  and
LPAL's  sterling  assets were a small portion of its total assets.  In addition,
LPAL's sterling operating expenses have been  significantly  reduced.  With this
change  in  functional  currency,  LPAL's  foreign  exchange  gains  and  losses
resulting from the remeasurement of foreign currency assets and liabilities into
U.S.  dollars are  included in  operating  expenses in the Group's  consolidated
statement of operations,  rather than included in a separate  component of other
comprehensive  income in  shareholders'  equity,  effective  July 1, 2007.  This
change did not have a material impact on the Group's  consolidated  statement of
operations.  The  $(399,000)  balance as of June 30, 2007 in  accumulated  other
comprehensive  income  (loss) in the  Group's  consolidated  balance  sheet will
remain until such time LPAL is sold or liquidated.


                                       28
<PAGE>

                  BERKELEY TECHNOLOGY LIMITED AND SUBSIDIARIES

             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

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 September  2006,  the FASB issued  Statement  of Financial  Accounting
Standards No. 157 ("SFAS 157"),  "Fair Value  Measurements,"  which defines fair
value,  establishes  guidelines for measuring fair value and expands disclosures
regarding fair value measurements.  SFAS 157 does not require any new fair value
measurements but rather eliminates  inconsistencies in guidance found in various
prior accounting pronouncements.  SFAS 157 is effective for financial assets and
financial liabilities within its scope for fiscal years beginning after November
15, 2007 and for interim periods within those fiscal years.  The Company adopted
SFAS 157 for financial assets and financial  liabilities within its scope during
the  first  quarter  of 2008  and the  adoption  did not have an  impact  on its
financial statements.  In February 2008, the FASB issued FASB Staff Position No.
FAS 157-2 ("FSP FAS 157-2"),  "Effective  Date of FASB Statement No. 157," which
defers  the  effective  date  of  SFAS  157 for  all  non-financial  assets  and
non-financial liabilities for fiscal years beginning after November 15, 2008 and
interim  periods within those fiscal years for items within the scope of FSP FAS
157-2. The adoption of FSP FAS 157-2 effective January 1, 2009 for the Company's
non-financial  assets and  non-financial  liabilities is not expected to have an
impact on the Company's consolidated financial statements.

       In February  2007,  the FASB issued  Statement  of  Financial  Accounting
Standards No. 159 ("SFAS 159"),  "The Fair Value Option for Financial Assets and
Financial  Liabilities - Including an amendment of FASB  Statement No 115." SFAS
159 permits entities to choose to measure many financial instruments and certain
other items at fair value that currently are not required to be measured at fair
value. SFAS 159 is effective no later than fiscal years beginning after November
15,  2007.  While the Company had the option of adopting  this  standard for the
first quarter of 2008,  the Company did not apply the  provisions of SFAS 159 to
any existing financial instruments and therefore SFAS 159 did not have an impact
on its consolidated financial statements.

       In December  2007,  the FASB issued  Statement  of  Financial  Accounting
Standards  No. 160  ("SFAS  160"),  "Noncontrolling  Interests  in  Consolidated
Financial  Statements,  an  amendment  of ARB No. 51." SFAS 160 amends ARB 51 to
establish accounting and reporting standards for the noncontrolling  interest in
a subsidiary and for the  deconsolidation  of a subsidiary.  It clarifies that a
noncontrolling  interest in a  subsidiary,  which is sometimes  referred to as a
minority  interest,  is an ownership  interest in the  consolidated  entity that
should be  reported  in the equity  section of the  balance  sheet.  Among other
requirements,   the  statement   requires  that  the   consolidated  net  income
attributable to the parent and the noncontrolling interest be clearly identified
and  presented on the face of the  consolidated  income  statement.  SFAS 160 is
effective for fiscal years  beginning on or after  December 15, 2008 and earlier
adoption is not permitted.  The Company is currently  evaluating the effect that
the adoption of SFAS 160 will have on its consolidated financial statements.

       In May 2008, the FASB issued Statement of Financial  Accounting Standards
No.  162  ("SFAS  162"),  "The  Hierarchy  of  Generally   Accepted   Accounting
Principles." This statement identifies the sources of accounting  principles and
the  framework for selecting  the  principles to be used in the  preparation  of
financial  statements  of  non-governmental   entities  that  are  presented  in
conformity with generally  accepted  accounting  principles in the United States
("US  GAAP").  This  statement  will be effective  60 days  following  the SEC's
approval of the Public Company Accounting  Oversight Board ("PCAOB")  amendments
to AU Section 411, "The Meaning of Present  Fairly in Conformity  With Generally
Accepted Accounting  Principles." The Company is currently evaluating the effect
that  the  adoption  of  SFAS  162  will  have  on  its  consolidated  financial
statements.


                                       29
<PAGE>


                  BERKELEY TECHNOLOGY LIMITED AND SUBSIDIARIES

             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

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.  The
Group's management's  estimates are based on historical  experience,  input from
sources  outside of the Company,  and other  relevant  facts and  circumstances.
Actual results could differ materially from those estimates. Accounting policies
that  include  particularly  significant  estimates  include the  assessment  of
recoverability   and  measuring   impairment  of  private  equity   investments,
investment and impairment valuations, measurement of deferred tax assets and the
corresponding  valuation  allowances,  fair value  estimates  for the expense of
employee share options,  valuation of accounts receivable, and estimates related
to commitments and contingencies.


Note 2.    Investments

       See Note 1  "Summary  of  Significant  Accounting  Policies"  above for a
discussion of the Group's  accounting  policies with respect to its investments.
As of December  31, 2008 and 2007,  the Group's  only  investments  were private
corporate  equity  securities.  As of December 31, 2007,  the carrying  value of
these  investments  totaled  $1,984,000,  which represented their estimated fair
value and which was also their cost basis.  During  2008,  the Group  recognized
other-than-temporary  impairment  losses totaling $500,000 on one of its private
equity  investments,  leaving an aggregate  carrying value of its investments of
$1,484,000 as of December 31, 2008.

Investment Concentration and Risk

       As of December  31,  2008,  the Group's  investments  consisted  of three
private corporate equity securities with individual carrying values of less then
10% of the  Group's  shareholders'  equity.  One of  these  investments,  with a
carrying value of $500,000,  is in preferred stock of a technology  company that
is a consulting  client of BICC.  Another  investment,  with a carrying value of
$140,000,  is in  preferred  stock  of  another  technology  company  that was a
consulting  client of BICC in prior years.  The third  investment has a carrying
value of $844,000 and is in preferred stock of a technology company.

       As of December  31,  2008,  the  Company's  Jersey  based life  insurance
subsidiary,  LPAL,  owned 91% of the  Group's  $1.5  million in  private  equity
securities.  LPAL is a  regulated  insurance  company,  and as such it must meet
stringent capital adequacy requirements and no transfers, except in satisfaction
of long-term business  liabilities,  are permitted from its long-term  insurance
fund without the consent of LPAL's directors and actuary. LPAL's investments are
not currently  available to fund the operations or commitments of the Company or
its other  subsidiaries.  However,  in April 2008, the Company obtained approval
from the Jersey Financial Services Commission ("JFSC") for LPAL to make dividend
payments  up to a total of $5.0  million  to the  Company  in the  future.  As a
condition of the JFSC's  approval,  the Company has agreed to provide  financial
support to LPAL in the unlikely event LPAL's funds are  insufficient  to pay off
its policy liabilities totaling $106,000 as of December 31, 2008, as well as the
operational costs of LPAL.

       The Group held no fixed  maturity  securities as of December 31, 2008 and
2007.



                                       30
<PAGE>


                  BERKELEY TECHNOLOGY LIMITED AND SUBSIDIARIES

             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

Net Investment Income

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

                                                                                           Year Ended December 31,
                                                                                       ----------------------------
                                                                                            2008            2007
                                                                                       ------------    ------------
                                                                                               (In thousands)
<S>                                                                                    <C>             <C>
Interest on fixed maturity securities................................................. $          -    $        208
Interest on cash and cash equivalents.................................................          314             596
                                                                                       ------------    ------------
Gross investment income...............................................................          314             804

Amounts credited on insurance policyholder accounts                                              (6)            (44)
                                                                                       ------------    ------------
Net investment income................................................................. $        308    $        760
                                                                                       ------------    ------------
                                                                                       ------------    ------------
</TABLE>


Realized Gains and Losses

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

                                                                                           Year Ended December 31,
                                                                                        ---------------------------
                                                                                            2008            2007
                                                                                        -----------     -----------
                                                                                               (In thousands)

Realized  gains   (losses)  on  securities   transactions:   Fixed   maturities,
available-for-sale:
<S>                                                                                    <C>             <C>
   Gross gains........................................................................ $      1,643    $      1,198
                                                                                       ------------    ------------
Realized gains on fixed maturities, available-for-sale................................        1,643           1,198
                                                                                       ------------    ------------
Equity securities:
   Gross losses.......................................................................         (500)              -
                                                                                       ------------    ------------
Realized losses on equity securities..................................................         (500)              -
                                                                                       ------------    ------------

Net realized investment gains on securities transactions.............................. $      1,143    $      1,198
                                                                                       ------------    ------------
                                                                                       ------------    ------------
</TABLE>


       The net  realized  gain of $1.2  million  in 2007  represents  a  partial
distribution  received by LPAL from the WorldCom,  Inc.  securities  litigation.
LPAL held certain  WorldCom,  Inc. publicly traded bonds which it sold at a loss
in 2002.  In  February  2008,  LPAL  received  an  additional  $270,000  payment
representing  the  final  distribution  from  the  WorldCom,   Inc.   securities
litigation.  These two payments  totaling  almost $1.5  million  recover part of
LPAL's realized loss on the WorldCom bonds recognized in 2002.

       In December 2008, LPAL received a $1.37 million partial distribution from
the Enron Corporation securities litigation. LPAL held certain Enron Corporation
publicly  traded bonds which it sold at a loss in 2002.  This  payment  recovers
part of LPAL's realized loss on the Enron  Corporation bonds recognized in 2002.
The timing and amount of future Enron distributions is currently uncertain.


                                       31
<PAGE>



                  BERKELEY TECHNOLOGY LIMITED AND SUBSIDIARIES

             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

Note 3.    Property and Equipment

       Property  and  equipment  are  carried  at  cost  and  consisted  of  the
following:
<TABLE>
<CAPTION>
                                                                                               December 31,
                                                                                       ----------------------------
                                                                                           2008            2007
                                                                                       ------------    ------------
                                                                                              (In thousands)

<S>                                                                                    <C>             <C>
Property, equipment and leasehold improvements....................................     $        186    $        189
Accumulated depreciation..........................................................             (177)           (175)
                                                                                       ------------    ------------
Property and equipment, net.......................................................     $          9    $         14
                                                                                       ------------    ------------
                                                                                       ------------    ------------
</TABLE>


Note 4.    Life Insurance Policy Liabilities

       An analysis of life insurance policy liabilities is as follows:
<TABLE>
<CAPTION>
                                                                                               December 31,
                                                                                       ----------------------------
                                                                                           2008            2007
                                                                                       ------------    ------------
                                                                                             (In thousands)

<S>                                                                                    <C>             <C>
Deferred annuities - policyholder contract deposits...............................     $         72    $         95
Other policy claims and benefits..................................................               34              46
                                                                                       ------------    ------------
                                                                                       $        106    $        141
                                                                                       ------------    ------------
                                                                                       ------------    ------------
</TABLE>

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

Mortality Assumptions

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

Withdrawal Assumptions

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


Note 5.   Statutory Financial Information and Restrictions

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

                                       32
<PAGE>


                  BERKELEY TECHNOLOGY LIMITED AND SUBSIDIARIES

             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

       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, 2008, LPAL met all of these conditions.

       LPAL is also required under the insurance laws to appoint an actuary. The
actuary  must be  qualified  as  defined  under  Jersey law and is  required  to
supervise the long-term insurance fund. No transfers,  except in satisfaction of
long-term  insurance business  liabilities,  are permitted from LPAL's long-term
insurance  fund without the consent of LPAL's  directors and actuary.  Dividends
require the approval of the JFSC. In April 2008, the Company  obtained  approval
from the JFSC for LPAL to make  dividend  payments up to a total of $5.0 million
to the Company in the future. As a condition of the JFSC's approval, the Company
has agreed to provide  financial  support to LPAL in the  unlikely  event LPAL's
funds are insufficient to pay off its policy liabilities totaling $106,000 as of
December 31, 2008, as well as the operational costs of LPAL.


Note 6.    Income Taxes

       In  June  2006,  the  FASB  issued  Interpretation  No.  48  ("FIN  48"),
"Accounting  for  Uncertainty  in Income Taxes." FIN 48 clarifies the accounting
for  uncertainty  in  income  taxes  recognized  in  an  enterprise's  financial
statements in accordance  with Statement of Financial  Accounting  Standards No.
109, "Accounting for Income Taxes." This interpretation prescribes a recognition
threshold and measurement  attribute for the financial statement recognition and
measurement of a tax position taken or expected to be taken in a tax return. FIN
48 also provides guidance on  de-recognition of tax benefits,  classification on
the balance  sheet,  interest  and  penalties,  accounting  in interim  periods,
disclosure and  transition.  The Company  adopted FIN 48 effective on January 1,
2007.

       The Company's  management believes that its income tax positions would be
sustained  upon  examination  by  appropriate  taxing  authorities  based on the
technical  merits of such positions,  and therefore the Company has not provided
for any  unrecognized  tax benefits at the adoption  date, and there has been no
change to the $0 of  unrecognized  tax  benefits  from  January 1, 2007  through
December 31, 2008.  The Company's tax returns  remain  subject to examination by
taxing authorities for the tax years 2004 through 2007.

       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 tax  benefit  which may not recur has  reduced the tax charge in
2008 and 2007.

       The Group is  subject  to income  tax in Jersey at a rate of 20%  through
2008. In the United States,  the Group is subject to both federal and California
taxes at rates up to 34% and 8.84%, respectively.


                                       33
<PAGE>


                  BERKELEY TECHNOLOGY LIMITED AND SUBSIDIARIES

             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

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

                                                                                           Year Ended December 31,
                                                                                        ---------------------------
                                                                                            2008            2007
                                                                                        -----------     -----------
                                                                                               (In thousands)
<S>                                                                                    <C>             <C>
Income (loss) before income taxes:
Jersey, Guernsey and United Kingdom................................................... $       (476)   $        270
United States.........................................................................       (1,091)            108
                                                                                       ------------    ------------
Total income (loss) before income taxes............................................... $     (1,567)   $        378
                                                                                       ------------    ------------
                                                                                       ------------    ------------
</TABLE>


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

                                                                                           Year Ended December 31,
                                                                                        ---------------------------
                                                                                            2008            2007
                                                                                        -----------     -----------
                                                                                               (In thousands)
<S>                                                                                    <C>             <C>
Income tax expense (benefit) computed at Jersey statutory income tax
   rate of 20%........................................................................ $       (313)   $         76
Realized and unrealized investment gains not subject to taxation
   in Jersey..........................................................................         (229)           (240)
Other losses not deductible in Jersey.................................................          289             158
Income not taxable in Guernsey........................................................            -             (10)
Tax expense (benefit) on losses at higher than 20% statutory Jersey rate:
   Income (losses) in the U.S.........................................................         (249)             24

Increase (decrease) in valuation allowance............................................          359             (48)
Expiration of capital loss carryforwards of U.S. entities.............................            -          67,245
Decrease in valuation allowance related to expiration of capital loss
   carryforwards......................................................................            -         (67,245)
 Other................................................................................          147              42

                                                                                       ------------    ------------
Actual tax expense ................................................................... $          4    $          2
                                                                                       ------------    ------------
                                                                                       ------------    ------------
</TABLE>
       The components of the actual tax expense were as follows:
 <TABLE>
<CAPTION>

                                                                                           Year Ended December 31,
                                                                                        ---------------------------
                                                                                            2008            2007
                                                                                        -----------     -----------
                                                                                               (In thousands)
<S>                                                                                    <C>             <C>
Jersey, Guernsey and United Kingdom:
   Current tax expense................................................................ $          -    $          -
   Deferred tax expense...............................................................            -               -

United States:
   Current tax expense ...............................................................            4               2
   Deferred tax expense...............................................................            -               -

                                                                                       ------------    ------------
Total actual tax expense ............................................................. $          4    $          2
                                                                                       ------------    ------------
                                                                                       ------------    ------------
</TABLE>


                                       34
<PAGE>

                  BERKELEY TECHNOLOGY LIMITED AND SUBSIDIARIES

             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

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

       The tax effects of temporary  differences  that give rise to  significant
portions of the deferred  income tax assets and deferred  income tax liabilities
are presented  below.  As of both December 31, 2008 and December 31, 2007,  full
valuation  allowances  were  provided on the net deferred tax assets of the U.S.
tax group due to the uncertainty of generating  future taxable income or capital
gains to benefit from the deferred tax assets.
<TABLE>
<CAPTION>

                                                                                                December 31,
                                                                                       ----------------------------
                                                                                           2008            2007
                                                                                       ------------    ------------
                                                                                               (In thousands)
U.S. subsidiaries:

<S>                                                                                    <C>             <C>
Deferred income tax assets:
Net operating loss carryforwards..................................................      $     5,868    $      5,497
Deferred compensation.............................................................                3               3
Bad debts.........................................................................                -              14
Other assets......................................................................                2               1
Valuation allowance...............................................................           (5,873)         (5,514)
                                                                                       ------------    ------------
Deferred income tax assets, net of valuation allowance............................                -               1

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


       As of December  31,  2008,  the Group's  U.S.  subsidiaries  have pre-tax
federal net operating loss carryforwards of approximately $14.2 million expiring
as follows:  approximately $1.3 million in 2011, and approximately $12.9 million
from  2020 to 2028.  These  subsidiaries  have  California  net  operating  loss
carryforwards  of  approximately  $11.9 million  expiring from 2012 to 2028. The
Group has  recorded  a full  valuation  allowance  for the  deferred  tax assets
arising  from these  carryforward  amounts as of  December  31,  2008 due to the
uncertainty of generating future taxable income to benefit from the deferred tax
assets.

       The Company's  Jersey,  Channel Islands  subsidiaries  have net operating
loss  carryforwards  of  approximately  $19.5  million as of December  31, 2008;
however, no deferred tax assets, and no corresponding  valuation reserves,  have
been recorded for these net operating loss carryforwards due to the introduction
of a new tax  system in Jersey in 2009 when the  expected  tax rate for  certain
Jersey  corporations will be zero. The Company expects that its tax rate for its
Jersey entities will be zero.

       During the third quarter of 2008, the Internal  Revenue  Service issued a
private  letter ruling that the Group's U.S.  holding  company,  Berkeley  (USA)
Holdings Limited ("BUSA"),  should include London Pacific Life & Annuity Company
in  Liquidation  ("LCL") in its federal  consolidated  tax returns for tax years
commencing with


                                       35
<PAGE>

                  BERKELEY TECHNOLOGY LIMITED AND SUBSIDIARIES

             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

2005. LCL is not considered a variable  interest entity within the scope of FASB
Interpretation No. 46 (Revised),  "Consolidation of Variable Interest Entities,"
which interprets  Accounting Research Bulletin No. 51,  "Consolidated  Financial
Statements."  BUSA  holds  the  common  stock of LCL but BUSA  does not have any
voting or management control over LCL. The financial  statements of LCL have not
been included in the Company's  consolidated  financial statements and they will
not be  included  in the  future.  The  Group  will be  filing  amended  federal
consolidated  tax returns for 2005  through  2007 during  2009,  and the Group's
management  believes that the inclusion of LCL in the federal  consolidated  tax
returns  of BUSA  for  2005  through  2008  will  result  in  insignificant  tax
liabilities  for the Group.  As of the end of 2007,  LCL has  approximately  $59
million of net operating loss  carryforwards  and  approximately $74 milllion of
capital loss  carryforwards.  The Group's  management  believes  that these loss
carryforwards  should be sufficient  to offset any taxable  income of LCL in the
foreseeable  future and that any resulting tax  liabilities  (e.g.,  alternative
minimum tax) will not be material. In addition,  future taxable income generated
by LCL also could be offset with BUSA's  carryforward  net  operating or capital
losses, if any, and with BUSA's current net operating or capital losses, if any.
Alternatively,   BUSA's  future  taxable  income  could  be  offset  with  LCL's
carryforward  or current net operating or capital  losses,  if any. BUSA and LCL
have signed a tax allocation and sharing  agreement.  Under this agreement,  any
benefit to BUSA of  utilizing  the tax losses of LCL to offset  BUSA's  separate
taxable income in BUSA's federal  consolidated  tax returns should BUSA not have
any of its own carryforward  losses will be paid by BUSA to LCL, and any benefit
to LCL of  utilizing  the tax losses of BUSA to offset  LCL's  separate  taxable
income in BUSA's federal  consolidated tax returns should LCL not have any of it
own  carryforward  losses  will  be paid by LCL to  BUSA.  Any tax  liabilities,
including  alternative  minimum  taxes,  created by the  inclusion of LCL in the
federal  consolidated tax returns of BUSA will be paid by LCL either directly to
the U.S.  Internal  Revenue  Service  ("IRS")  or  reimbursed  to BUSA by LCL if
payment is made to the IRS by BUSA. For purposes of computing  allocable federal
income tax liability,  BUSA will allocate taxable income brackets and exemptions
on a pro-rated basis among members of the affiliated tax group.


Note 7.    Shareholders' Equity

       The Company has authorized 86,400,000 Ordinary Shares with a par value of
$0.05 per  share.  As of  December  31,  2008 and 2007,  there  were  64,439,073
Ordinary Shares issued and outstanding.

       No dividends were declared or paid in 2008 or 2007.

       Prior  to  December  31,  2007,  the  Company  had  a  liability  on  its
consolidated  balance  sheet of  $215,000,  representing  the amount of dividend
checks issued by the Company's share registrar to shareholders that had not been
cashed. As the Company had previously  remitted the full amount of the dividends
to its registrar,  after a period of time, the registrar  would return the funds
to the Company in the amount of the uncashed  dividend  checks.  Pursuant to the
Company's  Memorandum and Articles,  any unclaimed dividend after twelve or more
years after the date of its declaration shall be forfeited and shall revert back
to the Company.  As such, at the end of 2007, the Company  wrote-off  $90,000 of
unclaimed  dividends  that were more than 12 years old,  directly as a credit to
retained earnings in the Company's consolidated balance sheet.

       Accumulated other  comprehensive loss consists of one component,  foreign
currency  translation  adjustments.  Accumulated  foreign  currency  translation
adjustments  were  $(399,000) as of both December 31, 2008 and 2007. For further
information, see the discussion under "Foreign Currencies" in Note 1 "Summary of
Significant Accounting Policies" above.

       The Group has two share  incentive  plans as  described in Note 10 "Share
Incentive  Plans" below.  Under the terms of these plans,  shares of the Company
may be purchased in the open market and held in trust. These shares are owned by
the employee benefit trusts, which are subsidiaries of the Company for financial
reporting purposes.

                                       36
<PAGE>

                  BERKELEY TECHNOLOGY LIMITED AND SUBSIDIARIES

             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

       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>

                                                                               Year Ended December 31,
                                                                 -------------------------------------------------
                                                                           2008                      2007
                                                                 -----------------------   -----------------------
                                                                     ESOT         ALOT         ESOT         ALOT
                                                                 ----------    ---------   ----------    ---------
                                                                                   (In thousands)

<S>                                                                 <C>             <C>       <C>             <C>
Shares held as of January 1....................................      13,084          438       13,084          438
Purchased......................................................           -            -            -            -
Exercised......................................................           -            -            -            -
                                                                 ----------    ---------   ----------    ---------
Shares held as of December 31..................................      13,084(1)       438       13,084(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 8.    Commitments and Contingencies

Lease Commitments

       The Group leases office space under operating  leases.  Total rents under
these  operating  leases were $223,000  (net of sublease  income of $78,000) and
$201,000 (net of sublease  income of $86,000),  for the years ended December 31,
2008 and 2007, respectively.  The Group had no capital leases as of December 31,
2008 or 2007.



                                       37
<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, 2008, were as follows:
<TABLE>
<CAPTION>

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

<C>                                                                                                    <C>
2009...............................................................................................    $        272
2010...............................................................................................              48
                                                                                                       ------------
Total..............................................................................................    $        320
                                                                                                       ------------
                                                                                                       ------------
<FN>
(1) Includes  commitments  related to the  Group's  Jersey  office  lease  which expires in September  2010.
    The Group entered into a sublease of its Jersey office during 2006.  Expected  future sublease income
    from 2009 through 2010 is  $93,000.  A  liability  of $51,000  remains  recorded  on the  Company's
    consolidated balance sheet as of December 31, 2008, representing the loss on  the sublease from 2009
    through September 2010.
</FN>
</TABLE>

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

Guarantees

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

       Under its Memorandum and Articles of Association,  the Company has agreed
to indemnify  its  officers  and  directors  for certain  events or  occurrences
arising as a result of the officer or  director  serving in such  capacity.  The
maximum  potential  amount of future  payments the Company  could be required to
make under these indemnification  agreements is unlimited.  However, the Company
maintains  directors and officers' liability insurance that limits the Company's
exposure and enables it to recover a portion of any future  amounts  paid.  As a
result of its insurance coverage,  the Company believes the estimated fair value
of these  indemnification  agreements is minimal and has no liabilities recorded
for these agreements as of December 31, 2008.

       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, 2008.


                                       38
<PAGE>



                  BERKELEY TECHNOLOGY LIMITED AND SUBSIDIARIES

             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

Note 9.   Fair Value of Financial Instruments

       The Company  adopted SFAS 157 for financial  assets and liabilities as of
January 1, 2008. SFAS 157 defines fair value as the price that would be received
to sell an asset or paid to  transfer  a  liability  in an  orderly  transaction
between  market  participants  at the  measurement  date  (an exit  price).  The
standard also outlines a valuation  framework and creates a fair value hierarchy
in  order  to  increase  the  consistency  and   comparability   of  fair  value
measurements and the related  disclosures.  Under U.S. GAAP,  certain assets and
liabilities must be measured at fair value, and SFAS 157 details the disclosures
that are  required  for items  measured  at fair  value.  Financial  assets  and
liabilities  are  measured  using  inputs from the three  levels of the SFAS 157
hierarchy. The three levels are as follows:

       Level 1 - Inputs  are  unadjusted  quoted  prices in active  markets  for
identical assets or liabilities  that are accessible by the Company.  During the
twelve months ended  December 31, 2008,  the Company's  Level 1 assets  included
money market mutual funds which are included in cash and cash equivalents in the
condensed  consolidated balance sheets. As of December 31, 2008, the Company had
$328,000 in money market mutual funds, compared to $1,871,000 as of December 31,
2007.

       Level 2 - Inputs  include quoted prices in markets that are not active or
financial  instruments for which all significant  inputs are observable,  either
directly or  indirectly.  During the twelve months ended  December 31, 2008, the
Company held no Level 2 assets.

       Level 3 -  Unobservable  inputs  for the  asset  or  liability  including
significant  assumptions  of the Company and other  market  participants.  As of
December  31,  2008 and  December  31,  2007,  the  Group  held  $1,484,000  and
$1,984,000,  respectively,  of private equity  investments  which are carried at
cost, as adjusted for other-than-temporary impairments. In order to determine if
any  other-than-temporary  impairments exist, the Group must first determine the
fair values of its private equity investments using Level 3 unobservable inputs,
including the analysis of various  financial,  performance  and market  factors.
During  the  twelve  months  ended  December  31,  2008,  the  Group  recognized
other-than-temporary  impairment  losses totaling $500,000 on one of its private
equity  investments.  The Group's  management  considered the investee company's
declining  cash  position,   less  favorable  business  environment  and  likely
acquisition value in determining the fair value estimates of this investment.

       The change in carrying value of the Group's  private equity  investments,
all of which  have  Level 3 inputs  in the SFAS 157  hierarchy,  for the  twelve
months ended December 31, 2008 was as follows:
<TABLE>
<CAPTION>

                                                                                                      (In thousands)

<S>                                                                                                    <C>
Balance at December 31, 2007.......................................................................    $      1,984

Realized investment losses included in earnings in 2008 determined by considering
   fair value measurements using significant unobservable inputs (Level 3).........................            (500)
                                                                                                       ------------
Balance at December 31, 2008.......................................................................    $      1,484
                                                                                                       ------------
                                                                                                       ------------
</TABLE>


       Cash and cash  equivalents,  accounts  receivable,  interest  receivable,
prepaid  expenses  and  deposits,  accounts  payable and accrued  expenses,  and
insurance  policyholder  liabilities are reflected in the  consolidated  balance
sheets at carrying  values which  approximate  fair values due to the short-term
nature of these instruments.

                                       39
<PAGE>


                  BERKELEY TECHNOLOGY LIMITED AND SUBSIDIARIES

             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

       The  carrying   values  and  estimated   fair  values  of  the  financial
instruments held by the Group, excluding its private equity investments, were as
follows:
<TABLE>
<CAPTION>
                                                                              December 31,
                                                       ------------------------------------------------------------
                                                                  2008                             2007
                                                       --------------------------       ---------------------------
                                                       Carrying        Estimated        Carrying          Estimated
                                                         Value        Fair Value          Value          Fair Value
                                                       --------       -----------       ----------       ----------
                                                                             (In thousands)
Financial assets:
<S>                                                     <C>              <C>              <C>              <C>
Cash and cash equivalents........................       $ 13,681         $ 13,681         $ 14,568         $ 14,568

Financial liabilities:
Life insurance policy liabilities................            106              105              141              139

</TABLE>

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

Cash and Cash  Equivalents:  The carrying  amounts reported in  the consolidated
balance sheet for these  instruments  approximate 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 are based on
their account values after deduction of surrender charges.


Note 10.    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.  Such grants
to  employees  and  directors  are  generally  exercisable  in four equal annual
installments  beginning  one year from the date of grant,  subject to employment
continuation, and expire seven to ten years from the date of grant. Until August
2008,  options were  generally  granted with an exercise price equal to the fair
market value of the underlying  shares at the date of grant. On August 19, 2008,
the exercise price of 4,450,000  options  granted on March 27, 2007 to employees
and directors was modified from $0.10 to $0.31 cents,  the net book value of the
shares as of December 31, 2006.  Until  further  notice,  new option grants will
have an  exercise  price equal to the net book value of the shares as of the end
of the previous quarter.

         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,
as long as it holds the shares  underlying the total  outstanding  options.  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 7  "Shareholders'  Equity"
for a summary of the share activity within the ESOT.

                                       40
<PAGE>


                  BERKELEY TECHNOLOGY LIMITED AND SUBSIDIARIES

             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

       Share option  activity for the years ended December 31, 2008 and 2007 was
as follows:
<TABLE>
<CAPTION>
                                                                                 2008                  2007
                                                                        --------------------    -------------------
                                                                                    Weighted-              Weighted-
                                                                          Number     Average     Number     Average
                                                                            of      Exercise       of      Exercise
(Options in thousands)                                                   Options      Price      Options     Price
                                                                        ---------   --------    --------   --------

<S>                                                                        <C>        <C>         <C>        <C>
Outstanding as of January 1...........................................      9,625      $1.45       5,225      $2.59
Granted (1)...........................................................      3,450       0.30       4,500       0.10
Forfeited.............................................................     (3,400)      0.31        (100)      0.20
Exercised.............................................................          -          -           -          -
Expired...............................................................          -          -           -          -
                                                                        ---------   --------    --------   --------
Outstanding as of December 31.........................................      9,675      $1.54       9,625      $1.45
                                                                        ---------   --------    --------   --------
                                                                        ---------   --------    --------   --------

Options exercisable as of December 31.................................      5,538      $2.47       4,675      $2.88
                                                                        ---------   --------    --------   --------
                                                                        ---------   --------    --------   --------
<FN>
(1) The 4.5 million options granted in March 27, 2007 with an exercise price of $0.10 were repriced in August 2008
    to $0.31.  This is reflected in the weighted average exercise price of the options outstanding and options
    exercisable as of December 31, 2008.
</FN>
</TABLE>


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

       Summary  information  about the Group's share options  outstanding  as of
December 31, 2008 is as follows:
<TABLE>
<CAPTION>
                                     Options Outstanding (1)                             Options Exercisable (1)
                       ------------------------------------------------            --------------------------------
                                           Weighted-
                                            Average          Weighted-                                   Weighted-
  Range of                                 Remaining          Average                                     Average
  Exercise                   Number       Contractual        Exercise                    Number          Exercise
   Prices                 Outstanding         Life             Price                  Exercisable          Price
------------           --------------     -----------      ------------            ---------------     ------------
                        (In thousands)        (Years)                               (In thousands)

<S>                            <C>              <C>              <C>                        <C>              <C>
 $ 0.11 - $  0.50               7,365            7.18             $0.29                      3,228            $0.28
   0.51 -    5.00                 220            2.18              2.46                        220             2.46
   5.01 -   10.00               2,030            2.38              5.41                      2,030             5.41
  10.01 -   21.00                  60            1.68             21.00                         60            21.00
-----------------       -------------     -----------      ------------            ---------------     ------------
$  0.11 - $ 21.00               9,675            6.03             $1.54                      5,538            $2.47
-----------------       -------------     -----------      ------------            ---------------     ------------
-----------------       -------------     -----------      ------------            ---------------     ------------

<FN>
(1) The intrinsic  value of all options  outstanding as of December 31, 2008 was zero, as the market value of the
    underlying shares was $0.04 as of that date.
</FN>
</TABLE>


Valuation and expense information under SFAS 123R

       The estimated fair value of share option compensation awards to employees
and directors,  as calculated using the Black-Scholes option pricing model as of
the date of grant, is amortized using the straight-line  method over the vesting
period of the options.  For each of the years ended  December 31, 2008 and 2007,
compensation  expense  related to employee share options under SFAS 123R totaled
$71,000, and is included in operating expenses in the accompanying statements of
operations.

                                       41
<PAGE>



                  BERKELEY TECHNOLOGY LIMITED AND SUBSIDIARIES

             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

       On March  27 2007,  4,500,000  options  were  granted  to  employees  and
directors at an exercise  price equal to the fair market value of the underlying
shares on the grant date which was $0.10.  These  options  were valued using the
Black-Scholes  option  pricing model using the following  assumptions:  expected
share  price  volatility  of 66%,  risk-free  interest  rate of 4.52%,  weighted
average expected life of 6.25 years and expected dividend yield of zero percent.
The fair value of the  4,500,000  options was $292,000.  During 2007,  50,000 of
these  options were  forfeited.  As  discussed  above,  on August 19, 2008,  the
exercise  price of the  remaining  4,500,000  options was modified from $0.10 to
$0.31,  the net book value per share as of December 31, 2006.  The fair value of
the  modified  options  was  determined  to be  $160,000,  calculated  using the
Black-Scholes  option  pricing model using the following  assumptions:  expected
share  price  volatility  of 99%,  risk-free  interest  rate of 3.04%,  weighted
average expected life of 4.85 years and expected dividend yield of zero percent.
Using  these same  assumptions,  the fair  value of the  original  4.45  million
options  immediately prior to the exercise price  modification was calculated to
be  $216,000.  As the fair value of the  modified  options is less than the fair
value  of  the  original   options   immediately   before  the  exercise   price
modification,  under SFAS123R,  there is no incremental  cost resulting from the
modification  and therefore the original  grant date fair value will continue to
be amortized  over the remaining  vesting  schedule to March 27, 2011,  less the
value of any actual or expected forfeitures of unvested options.

       On August 20, 2008,  3,450,000  options  were  granted to  employees  and
directors with an exercise  price of $0.30,  the net book value of the shares as
of June 30,  2008.  These  options were valued  using the  Black-Scholes  option
pricing model using the following  assumptions:  expected share price volatility
of 99%, risk-free interest rate of 3.27%, weighted average expected life of 6.25
years  and  expected  dividend  yield of zero  percent.  The  fair  value of the
3,450,000 options was $151,000.

       During 2008,  1,362,500  options  became vested,  3,450,000  options were
granted, 3,400,000 were forfeited and no options were exercised. At December 31,
2008, there were 9,675,000 options  outstanding with a weighted average exercise
price of $1.54. There were no in-the-money  options outstanding at that date. Of
the outstanding  options,  5,538,000 were  exercisable at December 31, 2008, and
these have a weighted average  exercise price of $2.47. The remaining  4,137,000
options  were  unvested at December  31,  2008.  These  unvested  options have a
weighted  average  exercise  price of $0.30.  As of  December  31,  2008,  total
unrecognized   compensation  expense  related  to  unvested  share  options  was
$143,000,  which is  expected  to be  recognized  as  follows:  $55,000 in 2009,
$46,000 in 2010, $28,000 in 2011 and $14,000 in 2012.

Agent Loyalty Opportunity Trust

       The Agent Loyalty  Opportunity  Trust  ("ALOT") was  established  in 1997
(without   shareholders'   approval)  to  provide  for  the  granting  of  stock
appreciation  rights ("SARs") on the Company's  Ordinary Shares to agents of the
Company's  former U.S. life insurance  subsidiary.  Each award unit entitled the
holder  to cash  compensation  equal to the  difference  between  the  Company's
prevailing  share price and the exercise price. The award units were exercisable
in four equal annual  installments  commencing on the first  anniversary  of the
date of grant  and were  forfeited  upon  termination  of the  agency  contract.
Vesting of the award in any given year was also  contingent on the holder of the
award surpassing a predetermined  benchmark tied to sales and  persistency.  The
SARs expired seven years from the date of grant. No awards have been outstanding
under this plan since 2006.

       The ALOT may purchase  Ordinary  Shares in the open  market,  funded by a
loan from a Group  subsidiary.  The loan is secured  by the  shares  held in the
trust and bears interest  based upon the trust's net income before  interest for
each financial period. The trust receives dividends on all Ordinary Shares held.
The loan, interest income and dividend income are eliminated in the consolidated
financial  statements.  See Note 7  "Shareholders'  Equity" for a summary of the
share activity within the ALOT.


                                       42
<PAGE>


                  BERKELEY TECHNOLOGY LIMITED AND SUBSIDIARIES

             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

Note 11.     Pension 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 $303,000 and $175,000
were made by the Group to the plan in 2008 and 2007,  respectively.  Of the 2008
and 2007 contributions,  $245,000 and $121,000,  respectively,  were offset by a
salary waiver.


Note 12.    Earnings Per Share and ADS

       Earnings  (loss) per ADS are equivalent to ten times earnings  (loss) per
Ordinary Share.

       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>

                                                                                          Year Ended December 31,
                                                                                       ----------------------------
                                                                                           2008            2007
                                                                                       ------------    ------------
                                                                                         (In thousands, except per
                                                                                           share and ADS amounts)

<S>                                                                                    <C>             <C>
Net income (loss)....................................................................  $     (1,571)   $        376
                                                                                       ------------    ------------
                                                                                       ------------    ------------

Basic earnings (loss) per share and ADS:
Weighted-average number of Ordinary Shares outstanding,
   excluding shares held by the employee benefit trusts..............................        50,917          50,917
                                                                                       ------------    ------------
                                                                                       ------------    ------------


Basic earnings (loss) per share......................................................  $      (0.03)   $       0.01
                                                                                       ------------    ------------
                                                                                       ------------    ------------


Basic earnings (loss) per ADS........................................................  $      (0.31)   $       0.07
                                                                                       ------------    ------------
                                                                                       ------------    ------------


Diluted earnings (loss) per share and ADS:
Weighted-average number of Ordinary Shares outstanding,
   excluding shares held by the employee benefit trusts..............................        50,917          50,917
Effect of dilutive securities (warrants and employee share options) .................             -             304
                                                                                       ------------    ------------
Weighted-average number of Ordinary Shares used in diluted
   earnings (loss) per share calculations............................................        50,917          51,221
                                                                                       ------------    ------------
                                                                                       ------------    ------------

Diluted earnings (loss) per share....................................................  $      (0.03)   $       0.01
                                                                                       ------------    ------------
                                                                                       ------------    ------------


Diluted earnings (loss) per ADS......................................................  $      (0.31)   $       0.07
                                                                                       ------------    ------------
                                                                                       ------------    ------------
</TABLE>

       For the year  ended  December  31,  2008,  there  were no  "in-the-money"
options or warrants,  and therefore no  potentially  dilutive  securities.  As a
result,  if the Company had reported net income for the year ended  December 31,
2008, diluted earnings per share would be the same as basic earnings per share.


                                       43
<PAGE>

                  BERKELEY TECHNOLOGY LIMITED AND SUBSIDIARIES

             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

Note 13.    Transactions with Related Parties

       The Group paid legal fees of approximately $45,000 and $5,000 during 2008
and 2007, respectively,  to a law firm of which one of its directors,  Victor A.
Hebert, was a member until October 2008.


Note 14.    Business Segment and Geographical Information

       The Company's  reportable  operating segments are classified according to
its  businesses  of  consulting  in  venture  capital,  and life  insurance  and
annuities,  in accordance with Statement of Financial  Accounting  Standards No.
131, "Segment Reporting."

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

                                                                                           Year Ended December 31,
                                                                                       ----------------------------
                                                                                            2008            2007
                                                                                       ------------     -----------
                                                                                               (In thousands)
<S>                                                                                    <C>             <C>
Jersey...............................................................................  $      1,409    $      1,842
Guernsey.............................................................................             -              52
United States........................................................................           612           1,828
                                                                                       ------------    ------------
Consolidated revenues and net investment gains and losses............................  $      2,021    $      3,722
                                                                                       ------------    ------------
                                                                                       ------------    ------------
</TABLE>

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

                                                                                                December 31,
                                                                                       ----------------------------
                                                                                            2008            2007
                                                                                       ------------     -----------
                                                                                               (In thousands)

<S>                                                                                    <C>             <C>
Jersey.............................................................................    $     13,643    $     14,135
Guernsey...........................................................................               1               1
United States......................................................................           1,900           3,031
                                                                                       ------------    ------------
Consolidated total assets .........................................................    $     15,544    $     17,167
                                                                                       ------------    ------------
                                                                                       ------------    ------------
</TABLE>



                                       44
<PAGE>



                  BERKELEY TECHNOLOGY LIMITED AND SUBSIDIARIES

             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

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

                                                                                           Year Ended December 31,
                                                                                       ----------------------------
                                                                                            2008            2007
                                                                                       ------------    ------------
                                                                                               (In thousands)
Revenues and net investment gains and losses:
<S>                                                                                    <C>             <C>
Consulting in venture capital........................................................  $        564    $      1,718
Life insurance and annuities ........................................................         1,380           1,778
                                                                                       ------------    ------------
                                                                                              1,944           3,496
Reconciliation of segment amounts to consolidated amounts:
Interest income......................................................................            77             226
                                                                                       ------------    ------------
Consolidated revenues and net investment gains and losses............................  $      2,021    $      3,722
                                                                                       ------------    ------------
                                                                                       ------------    ------------


Income (loss) before income tax expense:
Consulting in venture capital........................................................  $       (738)   $        317
Life insurance and annuities.........................................................         1,027           1,228
                                                                                       ------------    ------------
                                                                                                289           1,545
Reconciliation of segment amounts to consolidated amounts:
Interest income......................................................................            77             226
Corporate expenses...................................................................        (1,933)         (1,393)
                                                                                       ------------    ------------
Consolidated income (loss) before income tax expense.................................  $     (1,567)   $        378
                                                                                       ------------    ------------
                                                                                       ------------    ------------
</TABLE>


       Assets  attributable  to  each  of  the  Company's  reportable  operating
segments, based on management's reporting structure, were as follows:
<TABLE>
<CAPTION>
                                                                                                 December 31,
                                                                                       ----------------------------
                                                                                           2008            2007
                                                                                       ------------    ------------
                                                                                              (In  thousands)
Assets:
<S>                                                                                    <C>             <C>
Consulting in venture capital......................................................    $          -    $          -
Life insurance and annuities.......................................................          13,226          12,238
Corporate and other................................................................           2,318           4,929
                                                                                       ------------    ------------
Consolidated total assets..........................................................    $     15,544    $     17,167
                                                                                       ------------    ------------
                                                                                       ------------    ------------
</TABLE>


 Note 15.    Client Concentration

       The Group's  revenues are from a limited number of clients.  During 2008,
the Group's  largest  consulting  client  accounted for 20% of its  consolidated
revenues. No other consulting client accounted for more than 10% of consolidated
revenues.



                                       45
<PAGE>



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

       None.


Item 9A.(T)    CONTROLS AND PROCEDURES

Evaluation of Disclosure Controls and Procedures

       Our company's  management,  with the participation of our Chief Executive
Officer  and  Chief  Financial  Officer,  evaluated  the  effectiveness  of  our
"disclosure controls and procedures" (as defined in the Securities Exchange Act)
Rules  13a-15(e)  and  15-d-15(e))  as of the end of the period  covered by this
Report (the "Evaluation Date"). Based upon that evaluation,  the Chief Executive
Officer and Chief  Financial  Officer have  concluded  that as of the Evaluation
Date,  our  disclosure  controls  and  procedures  are  effective to ensure that
information required to be disclosed by us in the reports that we file or submit
under the Exchange  Act (i) is recorded,  processed,  summarized  and  reported,
within  the time  periods  specified  in the  SEC's  rules and forms and (ii) 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 our Chief Executive Officer and Chief Financial
Officer,  does not expect that our  disclosure  controls and  procedures  or our
internal  controls will prevent all errors and all fraud. A control  system,  no
matter how well  conceived  and  operated,  can  provide  only  reasonable,  not
absolute,  assurance that the objectives of the control system are met. Further,
the design of a control  system must  reflect  the fact that there are  resource
constraints  and the benefits of controls must be  considered  relative to their
costs. Because of the inherent limitations in all control systems, no evaluation
of controls can provide absolute assurance that all control issues and instances
of fraud, if any, within the Company have been detected.

Management's Report on Internal Control Over Financial Reporting

       Our company's  management is responsible for establishing and maintaining
adequate internal control over financial reporting (as defined in Rule 13a-15(f)
under the  Exchange  Act).  Our  management  assessed the  effectiveness  of our
internal  control over  financial  reporting as of December 31, 2008.  In making
this assessment,  our management used the criteria set forth by the Committee of
Sponsoring    Organizations    of   the   Treadway    Commission   in   Internal
Control-Integrated  Framework. Our management has concluded that, as of December
31, 2008, our internal  control over financial  reporting is effective  based on
these criteria. This annual report does not include an attestation report of our
registered  public  accounting  firm regarding  internal  control over financial
reporting.  Management's report was not subject to attestation by our registered
public  accounting firm pursuant to temporary rules of the SEC that permit us to
provide only management's report in this annual report.

Changes in Internal Control Over Financial Reporting

       There were no changes in our internal  controls over financial  reporting
that occurred during the fourth quarter of 2008 that have  materially  affected,
or are  reasonably  likely to  materially  affect,  our  internal  control  over
financial reporting.


Item 9B.    OTHER INFORMATION

       None.


                                       46
<PAGE>


                                    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 July  31,  2009  (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 60, is the
founder  and a principal  shareholder  of Berkeley  Technology  Limited.  He has
worked for us for more than 30 years and holds A.B., M.A. and J.D.  degrees from
the University of California.

       Ian K. Whitehead,  Chief Financial  Officer:  Mr. Whitehead,  age 54, 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.

       Information  regarding  our Code of Ethics,  adopted on November 12, 2003
and amended and restated in December 2007, 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.




                                       47
<PAGE>


       The following  table is a summary of selected  information for our equity
compensation plans as of December 31, 2008.
<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.............              9,675,000 (1)               $1.54                         (1)

Equity compensation plans not
   approved by shareholders.............                     -                        -
                                                ---------------                --------
Total...................................              9,675,000                   $1.54
                                                ---------------                --------
                                                ---------------                --------
<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  10 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.




                                       48
<PAGE>



                                     PART IV

Item 15.     EXHIBITS AND FINANCIAL STATEMENT SCHEDULES

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

1. Financial Statements: Page

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

<TABLE>
<CAPTION>
<S>                                                                                                           <C>
               Report of Independent Registered Public Accounting Firm......................................  17

               Consolidated Balance Sheets as of December 31, 2008 and 2007.................................  18

               Consolidated Statements of Operations for the Years Ended
                   December 31, 2008 and 2007...............................................................  19

               Consolidated Statements of Cash Flows for the Years Ended
                   December 31, 2008 and 2007...............................................................  20

               Consolidated Statements of Changes in Shareholders' Equity for the Years Ended
                   December 31, 2008 and 2007...............................................................  21

               Consolidated Statements of Comprehensive Income for the Years Ended
                   December 31, 2008 and 2007...............................................................  22

               Notes to the Consolidated Financial Statements...............................................  23

2. Financial Statement Schedules:

         The  following  financial  statement  schedule of  Berkeley  Technology
         Limited and  subsidiaries  is  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:

               Schedule I - Condensed Financial Information of Registrant

                   Condensed Balance Sheets as of December 31, 2008 and 2007................................  53

                   Condensed Statements of Operations for the Years Ended
                      December 31, 2008 and 2007............................................................  54

                   Condensed Statements of Cash Flows for the Years Ended
                      December 31, 2008 and 2007............................................................  55

                   Note to Condensed Financial Statements...................................................  56

         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>


                                       49
<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).


                                       50
<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).

                                       51
<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 as amended and restated as of December 2007.

21                Subsidiaries of the Company as of March 31, 2009.

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 53 through 56.


                                       52
<PAGE>



           SCHEDULE I - CONDENSED FINANCIAL INFORMATION OF REGISTRANT

                           BERKELEY TECHNOLOGY LIMITED
                            CONDENSED BALANCE SHEETS
<TABLE>
<CAPTION>
                                                                                              December 31,
                                                                                   --------------------------------
                                                                                       2008               2007
                                                                                   --------------    --------------
                                                                                  (In thousands, except share amounts)
                                     ASSETS

<S>                                                                                <C>               <C>
Cash and cash equivalents......................................................... $        1,483    $        2,277
Investment in subsidiaries........................................................        (65,208)          (64,866)
Intercompany balances.............................................................         80,269            80,097
Other assets......................................................................              4                13
                                                                                   --------------    --------------
Total assets...................................................................... $       16,548    $       17,521
                                                                                   --------------    --------------
                                                                                   --------------    --------------


                      LIABILITIES AND SHAREHOLDERS' EQUITY

Liabilities:
Accounts payable and accruals..................................................... $          334    $          381
Intercompany balances.............................................................          1,235               661
                                                                                   --------------    --------------
Total liabilities.................................................................          1,569             1,042
                                                                                   --------------    --------------
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, 2008
   and 2007.......................................................................          3,222             3,222
Additional paid-in capital........................................................         67,860            67,789
Retained earnings.................................................................          6,894             8,465
Employee benefit trusts, at cost (13,522,381 shares as of
   December 31, 2008 and 2007)....................................................        (62,598)          (62,598)
Accumulated other comprehensive loss..............................................           (399)            (399)
                                                                                   --------------    --------------
Total shareholders' equity........................................................         14,979            16,479
                                                                                   --------------    --------------
Total liabilities and shareholders' equity........................................ $       16,548    $       17,521
                                                                                   --------------    --------------
                                                                                   --------------    --------------
</TABLE>






            See accompanying Note to Condensed Financial Statements.




                                       53
<PAGE>



     SCHEDULE I - CONDENSED FINANCIAL INFORMATION OF REGISTRANT (Continued)

                           BERKELEY TECHNOLOGY LIMITED
                       CONDENSED STATEMENTS OF OPERATIONS

<TABLE>
<CAPTION>

                                                                                          Year Ended December 31,
                                                                                       ----------------------------
                                                                                            2008           2007
                                                                                       ------------    ------------
                                                                                               (In thousands)
Revenues:
<S>                                                                                    <C>             <C>
Investment income..................................................................... $         44    $         72
                                                                                       ------------    ------------
                                                                                                 44              72
Expenses:
Staff costs...........................................................................          828             393
Other operating expenses..............................................................          548             497
                                                                                       ------------    ------------
                                                                                              1,376             890
                                                                                       ------------    ------------
Loss before income tax benefit and equity in
   undistributed net income (loss) of subsidiaries....................................       (1,332)          (818)

Income tax benefit....................................................................            -               -
                                                                                       ------------    ------------
Loss before equity in undistributed net income (loss) of
   subsidiaries.......................................................................       (1,332)          (818)

Equity in undistributed net income (loss) of subsidiaries (1).........................         (239)          1,194
                                                                                       ------------    ------------

Net income (loss)..................................................................... $     (1,571)   $        376
                                                                                       ------------    ------------
                                                                                       ------------    ------------

<FN>

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












            See accompanying Note to Condensed Financial Statements.





                                       54
<PAGE>

     SCHEDULE I - CONDENSED FINANCIAL INFORMATION OF REGISTRANT (Continued)

                           BERKELEY TECHNOLOGY LIMITED
                       CONDENSED STATEMENTS OF CASH FLOWS
<TABLE>
<CAPTION>

                                                                                         Year Ended December 31,
                                                                                       ----------------------------
                                                                                           2008            2007
                                                                                       ------------    ------------
                                                                                               (In thousands)
Cash flows from operating activities:
<S>                                                                                    <C>             <C>
Net income (loss)....................................................................  $     (1,571)   $        376

Adjustments to reconcile net income (loss) to net
   cash used in operating activities:
Equity in undistributed net loss (income) of subsidiaries............................           239          (1,194)
Other operating cash flows...........................................................            46              37
                                                                                       ------------    ------------
Net cash used in operating activities ...............................................        (1,286)           (781)
                                                                                       ------------    ------------

Cash flows from investing activities:
Net advances from subsidiaries.......................................................           504             255
                                                                                       ------------    ------------
Net cash provided by investing activities............................................           504             255
                                                                                       ------------    ------------

Cash flows from financing activities:
Repayments from subsidiaries.........................................................             -           2,126
                                                                                       ------------    ------------
Net cash provided by financing activities ...........................................             -           2,126
                                                                                       ------------    ------------

Effect of exchange rate changes on cash .............................................           (12)              -
                                                                                       ------------    ------------

Net increase in cash and cash equivalents............................................          (794)          1,600
Cash and cash equivalents at beginning of year.......................................         2,277             677
                                                                                       ------------    ------------
Cash and cash equivalents at end of year.............................................  $      1,483    $      2,277
                                                                                       ------------    ------------
                                                                                       ------------    ------------
</TABLE>



            See accompanying Note to Condensed Financial Statements.


                                       55
<PAGE>



     SCHEDULE I - 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, 2008.

       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,
2008.



                                       56
<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 31, 2009                                   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 31, 2009               Arthur I. Trueger
                                    Executive Chairman
                                    (Principal Executive Officer)


                                    /s/  Ian K. Whitehead
Date:  March 31, 2009               Ian K. Whitehead
                                    Chief Financial Officer
                                    (Principal Financial and Accounting Officer)


                                    /s/  Victor A. Hebert
Date:  March 31, 2009               Victor A. Hebert
                                    Deputy Chairman and Non-Executive Director


                                    /s/  Harold E. Hughes, Jr.
Date:  March 31, 2009               Harold E. Hughes, Jr.
                                    Non-Executive Director


                                    /s/  Trenchard
Date:  March 31, 2009               The Viscount Trenchard
                                    Non-Executive Director



                                       57