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, 2007

                                       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 of         (I.R.S. Employer Identification No.)
    incorporation or organization)

                            Wests Centre, Bath Street
                           St. Helier, Jersey JE2 4ST
                                 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 (Do not
check if a smaller reporting company) [ ] Smaller reporting company [X]

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

    The aggregate market value of the voting stock held by non-affiliates of the
registrant,  based on the closing sale price of the Ordinary  Shares on June 30,
2007 as  reported  on the  London  Stock  Exchange  (using an  exchange  rate
<PAGE>


of  (pound)1.00 = $2.01) was  $3,653,395.  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, 2008, 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, 2008, 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..........   48
Item 9A.(T)   Controls and Procedures.......................................................................   48
Item 9B.      Other Information.............................................................................   48


                                                       PART III

Item 10.      Directors and Executive Officers of the Registrant............................................   49
Item 11.      Executive Compensation........................................................................   49
Item 12.      Security Ownership of Certain Beneficial Owners and Management and Related
                Stockholder Matters.........................................................................   49
Item 13.      Certain Relationships and Related Transactions................................................   50
Item 14.      Principal Accountant Fees and Services........................................................   50


                                                       PART IV

Item 15.      Exhibits and Financial Statement Schedules ...................................................   51


Signatures .................................................................................................   61
Exhibit Index...............................................................................................   62
</TABLE>



<PAGE>


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

Forward-Looking Statements and Factors That May Affect Future Results

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

                                     PART I

Item 1.    BUSINESS

OVERVIEW

       We are a financial  services  company based in Jersey,  Channel  Islands,
with an office in San Francisco, specializing in venture capital and consulting.
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 venture capital and consulting  business,  we continue
to service the  policyholders  of London Pacific  Assurance  Limited ("LPAL") in
Jersey.  Policyholder liabilities continued to decline during 2007 due to policy
maturities.  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.  One new  investment was
made by LPAL in a private equity security during 2007.

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

BUSINESS SEGMENTS

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

  Principal Subsidiaries                         Business Segment                     Location
------------------------                         ----------------                     ---------
<S>                                             <C>                                 <C>
Berkeley International Capital Corporation       Venture capital and consulting     San Francisco, California
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
16 to the  Consolidated  Financial  Statements in Item 8 of this Form 10-K for a
summary of our  financial  information  by  business  segment  and  geographical
location.

Venture Capital and Consulting

       Our  venture  capital  and  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.  One new private equity  investment for
$1.0 million was made during 2007 by LPAL. Our current venture capital  strategy
is focused on identifying  opportunities  where we can assist private technology
companies  to grow their  business and to support  clients  seeking to invest in
Silicon  Valley.  We  back  entrepreneurs  directly  with  our own  capital,  by
coinvesting with clients,  or, in certain cases, we may benefit from investments
made by clients if their  investments  are  successful.  In 2007, we established
several new 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 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,  BICC  was  engaged  by a  North  American
telecommunications   equipment  company  to  develop  a  business  strategy  for
penetration  of the European  and Japanese  markets.  This  engagement  involved
detailed market and prospect  research and meetings with potential  clients that
may lead to  substantial  business for the client  company.  Another  example of
BICC's  consulting   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 27 years,  BICC arranged over $1.9 billion of placements in
the private capital markets.  Placements were typically  arranged in later stage
technology companies,  which were near alpha test of their product and needed to
scale up their  engineering,  marketing  and sales  infrastructure.  Within this
strategy,  BICC  has been  able to  identify  many  promising  young  technology
companies  that  have  grown  in  prominence  in  their  fields  and  gone on to
successful public offerings or acquisition  transactions.  Many of the companies
are  headquartered  in close proximity to BICC's offices which allows for easier
access to the  companies'  management.  Most of these  companies  specialize  in
telecommunications   (both   central   office  and  customer   premises),   data
communications,   software,   semiconductors  and  knowledge   learning.   These
placements  included  investments  in 3Com,  Acuson,  Adaptec,  Altera,  America
Online,  Atmel,  Cadence Design Systems,  Cirrus Logic,  Cypress  Semiconductor,
Flextronics,  IDT, Linear Technology, LSI Logic, Nellcor, Oracle, PMC Sierra and
Packeteer, Inc.

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

       During 2007,  51% of  consulting  fee revenues  were  generated  from one
client.  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. We
seek  returns   from   technology   companies  in  Silicon   Valley  by  backing
entrepreneurs directly with our


                                       2
<PAGE>

own capital,  by coinvesting with clients,  or, in certain cases, we may benefit
from investments made by clients if their investments are successful.

Competition

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

Life Insurance and Annuities

       Formed in 1999, our Jersey,  Channel Islands insurance subsidiary,  LPAL,
has  principally  been engaged in marketing  and servicing  investment  oriented
insurance products.  LPAL sold Sterling,  U.S. dollar and Euro guaranteed return
bonds in its home market of Jersey,  Channel Islands, and in the U.K., Guernsey,
Isle of Man and other  permitted  jurisdictions.  The  products  guarantee  both
capital and yield for the duration of the investment period, which are typically
three or five years. In recent years,  LPAL has not sold any new policies due to
the  high  capital  requirements.  The  number  of  policyholders  has  declined
significantly  to three at 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,  2007,  LPAL's
policyholder  liabilities,   including  death  claims  pending  payout,  totaled
$141,000, and LPAL's cash totaled $10.3 million. LPAL held no corporate bonds at
the end of  2007.  LPAL's  investment  portfolio  included  two  private  equity
securities valued at $1.8 million as of December 31, 2007.

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, 2007, LPAL met all of these conditions.

       LPAL is also required under the insurance laws to appoint an actuary. The
actuary must be qualified as defined under the laws and is required to supervise
the long-term insurance fund. No transfers,  except in satisfaction of long-term
insurance business  liabilities,  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.

Group

       Our Chief  Financial  Officer and in-house  attorney are  responsible for
managing our subsidiaries'  compliance with applicable regulatory  requirements.
Although  the  scope  of  regulation  and  form  of  supervision  to  which  our
subsidiaries  are subject,  as described  above,  may vary from  jurisdiction to
jurisdiction,  the  applicable  laws  and  regulations  often  are  complex  and
generally  grant  broad  discretion  to  supervisory


                                       3
<PAGE>

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, 2007, we had 7 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  2008.  We are  currently  in
negotiations to renew this lease.

       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 10 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, 2007.

                                     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,
2007, there were 64,439,073 Ordinary Shares outstanding of which 12,515,810,  or
19.4%, were represented by 1,251,581 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
                                                               ---------     ---------        ---------    ---------
2007:

<S>                                                                <C>          <C>              <C>           <C>
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

2006:

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

Holders

       As of February 29, 2008, we had approximately 1,323 Ordinary shareholders
of record and 70 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 2006 or an interim dividend for 2007. Our Board of
Directors will not be recommending a final dividend for the year 2007.

       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 13,
2008, and is subject to any changes in Jersey and U.S. law or published practice
or in the establishment of any double taxation convention between Jersey and the
U.S.  occurring  after that date.  The  summary  is not a complete  analysis  or
listing  of all the  possible  tax  consequences  and does not  address  the tax
implications for special classes of holders, such as banks,  insurance companies
and dealers in  securities.  The summary also does not address U.S. state income
tax  consequences.  Owners of Ordinary  Shares and ADSs should consult their own
tax advisors as to the tax consequences of such ownership.

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

Taxation of Dividends

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

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

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

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

                                       6
<PAGE>

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 amount realized and the holder's tax
basis in either the ADS  represented  by the ADR or the Ordinary  Share.  Such a
gain or loss will generally be a capital gain or loss if the ADR or the Ordinary
Share was a capital asset in the hands of the U.S.  holder and will generally be
a long-term  capital gain or loss if the ADR or Ordinary Share was held for more
than one year  (including,  in the case of an ADR,  the period  during which the
Ordinary Shares  surrendered in exchange  therefore were held). In general,  the
long-term  capital gain of a  non-corporate  U.S. holder is subject to a maximum
tax rate of 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.

       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
12 of this Form 10-K.

                                       7
<PAGE>

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  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.

                                       8
<PAGE>

Results of Operations by Business Segment

       Income before income taxes for our reportable  operating segments,  based
on management's internal reporting structure, is as follows:
<TABLE>
<CAPTION>
                                                                                         Years Ended December 31,
                                                                                        --------------------------
                                                                                            2007            2006
                                                                                        -----------    -----------
                                                                                               (In thousands)
Income (loss) from continuing  operations before income tax expense by operating
  segment:

<S>                                                                                     <C>            <C>
Venture capital and consulting ........................................................ $       317    $      (403)
Life insurance and annuities ..........................................................       1,228           (221)
                                                                                        -----------    -----------
                                                                                              1,545           (624)
Reconciliation of segment amounts to consolidated amounts:

Interest and other fee income..........................................................         226            283
Corporate expenses.....................................................................      (1,392)        (2,336)
Interest expense.......................................................................          (1)            (1)
                                                                                        -----------    -----------
Consolidated income (loss) from continuing operations before
  income tax expense................................................................... $       378    $    (2,678)
                                                                                        -----------    -----------
                                                                                        -----------    -----------
</TABLE>

       Business segment data contained in Note 16 to the Consolidated  Financial
Statements in Item 8 of this Form 10-K should be read in  conjunction  with this
discussion.  A detailed  discussion of the results for each  reportable  segment
follows.

Venture Capital and Consulting

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

                                                                                         Years Ended December 31,
                                                                                        --------------------------
                                                                                            2007            2006
                                                                                        -----------    -----------
                                                                                               (In thousands)
Revenues and net investment gains:
<S>                                                                                     <C>            <C>
Consulting fees........................................................................ $     1,718    $       705
Change in net unrealized investment gains and losses on
   trading securities..................................................................           -             18
                                                                                        -----------    -----------
Total revenues and net investment gains................................................       1,718            723

Operating expenses.....................................................................       1,401          1,126
                                                                                        -----------    -----------
Income (loss) from continuing operations before income tax expense..................... $       317    $      (403)
                                                                                        -----------    ------------
                                                                                        -----------    ------------

</TABLE>

2007 compared to 2006

       In 2007, our venture capital and consulting  segment  contributed  income
before  income  taxes of $0.3  million to our  overall  income  from  continuing
operations  before income taxes,  compared to a loss before income taxes of $0.4
million in 2006. The improved  results for this segment were  attributable  to a
$1.0 million increase in consulting fee revenues.

                                       9
<PAGE>

       Consulting  fee  revenues  increased  from $0.7  million  in 2006 to $1.7
million in 2007,  due to a contract  that was signed  with a new client in early
2007 that generated $0.9 million in consulting  fees.  That contract ran through
the end of 2007. A new  contract  has been signed with this client in 2008.  The
scope of our work under this new contract  has been  reduced  and,  accordingly,
consulting   revenues   from  this  client   during  2008  are  expected  to  be
significantly lower than in 2007.

       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 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.

       Some of the  consulting  agreements  that we have had,  provided  that we
receive  promissory  notes that were 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.  We also hold common  stock
options in two technology companies that are now fully vested, though we believe
that currently these have no value.

       Operating  expenses in this  segment  increased  by $0.3  million to $1.4
million in 2007  primarily due to higher staff costs  allocated to this segment.
During 2006,  some employees who are normally  dedicated to the venture  capital
and consulting  segment spent part of their time on certain  corporate  matters.
During 2007,  these  employees were able to focus more fully on venture  capital
and consulting activities.

Life Insurance and Annuities

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

                                                                                         Years Ended December 31,
                                                                                        --------------------------
                                                                                           2007            2006
                                                                                        -----------    -----------
                                                                                               (In thousands)
Revenues and net investment gains (losses):

<S>                                                                                     <C>            <C>
Investment income...................................................................... $       578    $       937
Insurance policy charges...............................................................           2              2
Net realized investment gains (losses).................................................       1,198             (2)
                                                                                        -----------    -----------
Total revenues and net investment gains (losses).......................................       1,778            937

Expenses:

Amounts credited on insurance policyholder accounts....................................          44            468
General and administrative expenses....................................................         506            690
                                                                                        -----------    -----------
Total expenses.........................................................................         550          1,158
                                                                                        -----------    -----------
Income (loss) from continuing operations before income tax expense..................... $     1,228    $      (221)
                                                                                        -----------    -----------
                                                                                        -----------    -----------
</TABLE>

       LPAL's policyholder  liabilities fell during 2007 by $3.5 million to $0.1
million  primarily  due to  maturing  policies.  LPAL  now  has  three  policies
remaining which are scheduled to mature in 2009. There are no plans currently to
write new policies.

2007 compared to 2006

       In 2007, LPAL  contributed  income before income taxes of $1.2 million to
our overall income from continuing operations before income taxes, compared to a
loss before income taxes of $0.2 million in 2006.  This improved  result in 2007
is attributable to the receipt of a $1.2 million partial  distribution  from the
WorldCom,  Inc.  securities  litigation and a $0.2 million decrease in operating
expenses.

                                       10
<PAGE>

       Interest income on cash and investments  declined by $0.3 million in 2007
to $0.6 million,  primarily due to the decline in the level of LPAL's  corporate
bond investments and cash, which was consistent with the decline in policyholder
liabilities during 2007. The level of LPAL's corporate bonds and cash at the end
of 2007 was $10.3  million,  compared  with  $13.4  million  at the end of 2006.
Interest credited on policyholder  accounts decreased by $0.4 million in 2007 to
$44,000,  compared to $0.5 million in 2006.  This  decrease was due primarily to
policy  maturities  since  December  31,  2006.  The  average  rate  credited to
policyholders was 4.8% in 2007, compared with 5.1% in 2006.

       Total assets decreased to $12.2 million as of December 31, 2007, compared
to $14.5 million as of December 31, 2006, primarily due to policyholder benefits
paid of $3.5 million during 2007.

       Realized  investment  gains for 2007 were $1.2  million.  This amount was
received  in  January  2007  and  represents  a  partial  distribution  from the
WorldCom, Inc. securities litigation.  LPAL held certain WorldCom, Inc. publicly
traded bonds which it sold at a loss in 2002. This $1.2 million payment reverses
part of the  realized  loss  recorded in 2002.  Since this payment is for LPAL's
account,  it is not  available  to fund the  operations  or  commitments  of the
Company or its other subsidiaries.

       Policyholder  liabilities  as of December 31, 2007 were  $141,000.  There
were three  policies  outstanding  as of that date  totaling  $95,000  which are
scheduled to mature in 2009. The balance of $46,000  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 $0.7 million
for 2006.  This $0.2 million  decrease was primarily due to lower staff costs as
well as to lower  facilities  costs  subsequent  to the  sublease  of our Jersey
office in mid-2006. We no longer have staff or operations in Jersey, though LPAL
maintains a registered office in Jersey and is still regulated by the JFSC.

Subsequent Events

       LPAL received a $0.3 million payment in February 2008,  representing  the
final distribution from the WorldCom, Inc. securities litigation,  which will be
recognized in the Group's statement of operations for the first quarter of 2008.
Since this  payment  is for  LPAL's  account,  it is not  available  to fund the
operations or commitments of the Company or its other subsidiaries.

       In February 2008,  LPAL submitted a claim in the Enron  Securities  class
action  settlement,  based on certain Enron bonds  previously held by LPAL which
LPAL  believes  constitute  "Category  1"  securities  eligible  for  the  Enron
settlement  proceeds.  We do not expect any payment  based on LPAL's claim until
2009 at the earliest.  The amount of the recovery of LPAL's realized  investment
losses recorded in 2002 is currently unknown.

Corporate and Other

2007 compared to 2006

       Corporate  expenses  decreased  by $0.9  million to $1.4 million in 2007,
compared to 2006.  This decrease was due to losses  associated with the sublease
of our Jersey  office of $0.2 million  recorded in 2006;  the  settlement of the
SunGard litigation matter during 2006 which resulted in lower legal fees of $0.4
million in 2007 and lower staff  allocations to the corporate segment in 2007 of
$0.2 million;  lower corporate insurance costs of $0.1 million;  and lower staff
costs of $0.1  million due to the  reduction  in staff  during the first half of
2007.  We  expect  corporate  expenses  to  decline  in 2008  compared  to 2007,
primarily  due to the  closure of our Jersey  office in  mid-2007.  The  Company
however continues to maintain a registered office in Jersey.

                                       11
<PAGE>

Consolidated Income (Loss) from Continuing Operations Before Income Tax Expense

2007 compared to 2006

       Our  consolidated  income from  continuing  operations  before income tax
expense was $0.4 million in 2007, compared to a loss before income taxes of $2.7
million in 2006.  This $3.1 million  improvement in results was due primarily to
an increase in consulting fee revenues of $1.0 million,  a decrease in operating
expenses of $0.9 million (as  explained  above),  and the $1.2 million  realized
investment  gain from the partial  settlement  proceeds from the WorldCom,  Inc.
securities litigation.

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

Income Taxes

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

2007 compared to 2006 (continuing operations)

       The $2,000 tax expense for 2007 is  comprised  of our minimum  California
taxes.  Other than these taxes, no other tax expense or benefits were applicable
to our Group for this  period.  Income  before  income taxes of $0.3 million was
contributed  by our Jersey and Guernsey  operations,  however this  includes the
$1.2 million of investment gain related to the partial WorldCom, Inc. litigation
settlement  which is treated as a capital gain for tax purposes.  Realized gains
on certain investments are not taxed in Jersey. Our U.S subsidiaries contributed
income  before  income taxes of $0.1 million  during 2007.  Due to net operating
loss  carryforwards  to 2007,  our U.S.  subsidiaries  have no tax liability for
2007. In 2006, our only tax expense was $5,000 of minimum California taxes.

Discontinued Operations

       The  $1.0  million  loss  on  discontinued  operations  recorded  in 2006
resulted from the write-off of the $1.0 million of cash held in escrow which was
part of the proceeds from the sale of London Pacific  Advisors in June 2003 held
back to cover any of the Group's indemnity obligations.  For further information
see Note 2 "Discontinued Operations" to the Consolidated Financial Statements in
Item 8 of this Form 10-K.

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

CRITICAL ACCOUNTING POLICIES

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

Accounting for Investments

       As the  majority  of the  Group's  assets are in its life  insurance  and
annuities  business,  the  Group  considers  itself  an  insurance  company  for
financial  reporting  purposes.  As  such,  we  comply  with the  provisions  of
Statement of Financial  Accounting  Standards No. 115 ("SFAS 115"),  "Accounting
for Certain

                                       12
<PAGE>


Investments  in Debt and  Equity  Securities,"  for all of our  debt and  equity
investments.  In  accordance  with  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.  Thus,  all of our
investments must be reported at fair value, and temporary  changes in fair value
are  recognized as unrealized  gains and losses and reported,  net of applicable
income taxes, in a separate component of shareholders' equity.

Determination of Fair Values of Investments

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

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

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

       The determination of fair values of investments  requires the application
of significant judgment. It is possible that the factors evaluated by management
and fair values will change in subsequent  periods,  especially  with respect to
our  privately  held equity  securities in  technology  companies,  resulting in
material  impairment  charges  in  future  periods.  Historistically,   we  have
determined  that  our best  estimate  of the fair  value of our  private  equity
investments  has equaled our cost basis,  unless  there has been a temporary  or
other-than-temporary impairment of the investment.

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.

                                       13
<PAGE>

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

       We  determine  that a fixed  maturity  security  is  impaired  when it is
probable  that  we will  not be  able to  collect  amounts  due  (principal  and
interest)   according  to  the  security's   contractual  terms.  We  make  this
determination  by considering all available facts and  circumstances,  including
our intent and ability to  continue  to hold the  investment  to  maturity.  The
factors  we  consider  include:  (i) the  length of time and extent to which the
market  values have been below  amortized  cost and the reasons for the decline,
(ii) the issuer's recent  financial  performance and condition,  earnings trends
and future prospects in the near to mid-term, (iii) changes in the issuer's debt
rating  and/or  regulatory  actions or other events that may effect the issuer's
operations,  (iv) the market condition of either the issuer's geographic area or
industry as a whole, and (v) factors that raise doubt about the issuer's ability
to continue as a going concern.  If the evidence supports that a decline in fair
value is other-than-temporary,  then the fixed maturity security is written down
to its  quoted  market  value,  if  such a  value  is  available.  If a  readily
determinable  fair value does not exist,  then the fixed  maturity  security  is
written down to management's  estimate of its fair value,  which is based on the
valuation  methodologies  described above.  Write-downs are recorded as realized
losses and included in earnings.

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

Life Insurance Policy Liabilities

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

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

                                       14
<PAGE>

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.

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  increased during 2007 by $7.9 million from
$6.7 million as of December  31, 2006 to $14.6  million as of December 31, 2007.
This increase in cash and cash equivalents primarily resulted from $12.2 million
of cash provided by investing  activities,  partially offset by $3.6 million and
$0.8  million of cash used in financing  activities  and  operating  activities,
respectively.  Cash provided by investing  activities  primarily  related to the
maturity of fixed maturity securities in LPAL and the Group, partially offset by
the purchase of an available-for-sale private equity security by LPAL. Cash used
in financing activities related to insurance policyholder benefits paid by LPAL.
Cash used in operating  activities  primarily  resulted from the $0.4 million in
operating  income for 2007,  less the $1.2  million  partial  proceeds  from the
WorldCom,  Inc. securities litigation settlement which is included in cash flows
from  investing  activities.  As  of  December  31,  2007,  our  cash  and  cash
equivalents,  excluding the amount held by LPAL,  amounted to $4.3  million,  an
increase of $1.9 million from  December  31, 2006.  We received  $3.0 million in
proceeds from the maturity of corporate bonds during 2007,  which were partially
offset by cash used in operating activities.

       The $10.3 million of cash and cash  equivalents  held by LPAL, as well as
the $1.8 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 upon  approval from
the JFSC,  although  currently the Company does not have plans to request such a
dividend.

       Shareholders'  equity  increased  during 2007 by $0.6  million from $15.9
million at December 31, 2006 to $16.5 million as of December 31, 2007, primarily
due to net income for the period of $0.4  million.  As of December  31, 2007 and
2006,  $62.6  million of our  Ordinary  Shares,  at cost,  held by the  employee
benefit trusts have been netted against shareholders' equity.

       During 2007, LPAL continued to service its existing policyholders. During
this period,  policy  surrenders  totaled $0.1 million and policy maturities and
death claims totaled $3.5 million. Policyholder liabilities were $0.1 million as
of December  31, 2007,  compared to $3.6 million as of December 31, 2006.  We do
not expect any  surrender  activity  during  2008.  The  policies  remaining  at
December 31, 2007 are scheduled to mature in 2009.  LPAL has  sufficient  liquid
resources to fund these  maturities.  As of December 31, 2007,  LPAL had cash of
$10.3 million.

       As  of  December  31,  2007,  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,  2007,  we  had  $4.3  million  of  cash  and  cash
equivalents, excluding cash held by our life insurance and annuities segment. We
believe that this cash balance is  sufficient  to fund our  operations  (venture
capital  and  consulting  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, 2007 and 2006................................................  18

Consolidated Statements of Operations for the Years Ended
    December 31, 2007 and 2006..............................................................................  19

Consolidated Statements of Cash Flows for the Years Ended
    December 31, 2007 and 2006..............................................................................  20

Consolidated Statements of Changes in Shareholders' Equity for the Years Ended
    December 31, 2007 and 2006..............................................................................  22

Consolidated Statements of Comprehensive Income for the Years Ended
    December 31, 2007 and 2006..............................................................................  23

Notes to Consolidated Financial Statements..................................................................  24
</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, 2007 and 2006 and the
related   consolidated   statements  of  operations,   cash  flows,  changes  in
shareholders'  equity and comprehensive  income for each of the two years in the
period ended  December 31, 2007. In connection  with our audits of the financial
statements,  we have also audited the  financial  schedules on pages 55 to 60 in
Item 15 (the "Schedules").  These financial statements and the Schedules are the
responsibility of the Company's management.  Our responsibility is to express an
opinion on these financial statements and the Schedules based on our audits.

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

       In our opinion,  the consolidated  financial statements referred to above
present fairly,  in all material  respects,  the financial  position of Berkeley
Technology  Limited  at  December  31,  2007 and 2006,  and the  results  of its
operations  and its cash  flows  for each of the two years in the  period  ended
December 31, 2007, in conformity with accounting  principles  generally accepted
in the United States of America.

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

       Also, in our opinion,  the Schedules,  when considered in relation to the
basic consolidated  financial statements taken as a whole, present fairly in all
material respects, the information set forth therein.

/s/  BDO Seidman, LLP
San Francisco, California
March 28, 2008

                                       17
<PAGE>

                  BERKELEY TECHNOLOGY LIMITED AND SUBSIDIARIES

                           CONSOLIDATED BALANCE SHEETS
                      (In thousands, except share amounts)

<TABLE>
<CAPTION>
                                                                                               December 31,
                                                                                        --------------------------
                                                                                           2007            2006
                                                                                        -----------    -----------
                                            ASSETS

Investments (principally of life insurance subsidiary):
   Fixed maturities:
<S>                                                                                     <C>            <C>
     Available-for-sale, at fair value (amortized cost: $0 and $9,021
       as of December 31, 2007 and 2006, respectively)............................      $         -    $     9,007
     Held-to-maturity, at amortized cost (fair value: $0 and $3,004 as of
       December 31, 2007 and 2006, respectively)..................................                -          3,009
   Equity securities:
       Available-for-sale, at estimated fair value................................            1,984            844
                                                                                        -----------    -----------
Total investments.................................................................            1,984(1)      12,860

Cash and cash equivalents.........................................................           14,568(1)       6,707
Accrued investment income.........................................................               15            304
Property and equipment, net.......................................................               14             17
Other assets......................................................................              586            349
                                                                                        -----------    -----------
Total assets......................................................................      $    17,167    $    20,237
                                                                                        -----------    -----------
                                                                                        -----------    -----------
                        LIABILITIES AND SHAREHOLDERS' EQUITY
Liabilities:

Life insurance policy liabilities.................................................      $       141    $     3,640
Accounts payable and accruals.....................................................              547            674
                                                                                        -----------    -----------
Total liabilities.................................................................              688          4,314
                                                                                        -----------    -----------
Commitments and contingencies (See Note 10)

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, 2007
   and 2006.......................................................................            3,222          3,222
Additional paid-in capital........................................................           67,789         67,718
Retained earnings.................................................................            8,465          7,999
Employee benefit trusts, at cost (13,522,381 shares as of
   December 31, 2007 and 2006)....................................................          (62,598)       (62,598)
Accumulated other comprehensive loss..............................................             (399)          (418)
                                                                                        -----------    -----------
Total shareholders' equity........................................................           16,479         15,923
                                                                                        -----------    -----------
Total liabilities and shareholders' equity........................................      $    17,167    $    20,237
                                                                                        -----------    -----------
                                                                                        -----------    -----------
<FN>

(1) Includes $1,844 of investments  and $10,315 of cash and cash  equivalents in  the  Company's  insurance   subsidiary
    (London  Pacific  Assurance  Limited ("LPAL"))  which  are not  currently  available  to fund the  operations  or
    commitments of the Company or its other subsidiaries.
</FN>
</TABLE>

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

                                       18
<PAGE>

                  BERKELEY TECHNOLOGY LIMITED AND SUBSIDIARIES

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

                                                                                         Years Ended December 31,
                                                                                       ----------------------------
                                                                                           2007            2006
                                                                                       ------------    ------------
Continuing operations:

Revenues:

<S>                                                                                    <C>            <C>
Investment income....................................................................  $        804    $      1,203
Insurance policy charges.............................................................             2               2
Consulting and other fee income......................................................         1,718             722
Net realized investment gains (losses)...............................................         1,198              (2)
Change in net unrealized investment gains and losses on trading
   securities........................................................................             -              18
                                                                                       ------------    ------------
                                                                                              3,722           1,943
Expenses:

Amounts credited on insurance policyholder accounts..................................            44             468
Operating expenses...................................................................         3,299           4,152
Interest expense.....................................................................             1               1
                                                                                       ------------    ------------
                                                                                              3,344           4,621
                                                                                       ------------    ------------
Income (loss) from continuing operations before income tax expense...................           378          (2,678)

Income tax expense ..................................................................             2               5
                                                                                       ------------    ------------
Income (loss) from continuing operations.............................................           376          (2,683)


Discontinued operations:

Loss on disposal of discontinued operations, net of income
   tax expense of $0.................................................................             -          (1,000)
                                                                                       ------------    ------------
Loss on discontinued operations......................................................             -          (1,000)
                                                                                       ------------    ------------
Net income (loss)....................................................................      $    376       $  (3,683)
                                                                                       ------------    ------------
                                                                                       ------------    ------------


Basic and diluted earnings (loss) per share and ADS:

Basic and diluted earnings (loss) per share:

Continuing operations................................................................      $   0.01       $   (0.05)
Discontinued operations..............................................................             -           (0.02)
                                                                                       ------------    ------------
                                                                                           $   0.01       $   (0.07)
                                                                                       ------------    ------------
                                                                                       ------------    ------------
Basic and diluted earnings (loss) per ADS:

Continuing operations................................................................      $   0.07       $   (0.53)
Discontinued operations..............................................................             -           (0.20)
                                                                                       ------------    ------------
                                                                                           $   0.07       $   (0.73)
                                                                                       ------------    ------------
                                                                                       ------------    ------------
</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>
                                                                                          Years Ended December 31,
                                                                                       ----------------------------
                                                                                           2007            2006
                                                                                       ------------    ------------

<S>                                                                                    <C>             <C>
Net income (loss)....................................................................  $        376    $     (3,683)

Adjustments  to  reconcile  net  income  (loss)  to net cash  used in  operating
   activities:

Depreciation and amortization........................................................             5              32
Non-cash consulting fees.............................................................          (140)              -
Amounts credited on insurance policyholder accounts..................................            44             468
Net realized investment losses (gains)...............................................        (1,198)              2
Loss on forfeiture of escrow.........................................................             -           1,000
Change in net unrealized investment gains and losses
   on trading securities.............................................................             -             (18)
Net amortization of investment premiums and discounts................................            30             185
Share based compensation.............................................................            71              58

Net changes in operating assets and liabilities:

   Trading equity securities.........................................................             -             108
   Accrued investment income ........................................................           289             305
   Other assets......................................................................          (237)            (37)
   Life insurance policy liabilities.................................................            (2)             (2)
   Accounts payable, accruals and other liabilities..................................           (27)            168

Other operating cash flows...........................................................             2              25
                                                                                       ------------    ------------
Net cash used in operating activities................................................          (787)         (1,389)
                                                                                       ------------    ------------
Cash flows from investing activities:

Purchases of held-to-maturity fixed maturity securities..............................             -          (3,036)
Purchases of available-for-sale fixed maturity securities............................             -          (9,082)
Purchases of available-for-sale equity securities....................................        (1,000)              -
Proceeds from maturity of held-to-maturity fixed maturity securities.................         3,000           7,000
Proceeds from sale and maturity of available-for-sale fixed
   maturity securities...............................................................         9,000          14,364
Partial proceeds from WorldCom, Inc. securities litigation settlement ...............         1,198               -
Capital expenditures.................................................................            (4)             (7)
                                                                                       ------------    ------------
Net cash provided by investing activities ...........................................        12,194           9,239
                                                                                       ------------    ------------


</TABLE>




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

                                       20
<PAGE>

                  BERKELEY TECHNOLOGY LIMITED AND SUBSIDIARIES

                CONSOLIDATED STATEMENTS OF CASH FLOWS (Continued)
                                 (In thousands)
<TABLE>
<CAPTION>
                                                                                          Years Ended December 31,
                                                                                       ----------------------------
                                                                                             2007           2006
                                                                                       ------------    ------------

Cash flows from financing activities:

<S>                                                                                    <C>            <C>
Insurance policyholder benefits paid.................................................        (3,560)        (11,625)
                                                                                       ------------    ------------
Net cash used in financing activities................................................        (3,560)        (11,625)
                                                                                       ------------    ------------

Effect of exchange rate changes on cash..............................................            14             443
                                                                                       ------------    ------------

Net increase (decrease) in cash and cash equivalents.................................         7,861          (3,332)
Cash and cash equivalents at beginning of year.......................................         6,707          10,039
                                                                                       ------------    ------------
Cash and cash equivalents at end of year (1).........................................  $     14,568    $      6,707
                                                                                       ------------    ------------
                                                                                       ------------    ------------



Supplemental disclosure of cash flow information:

Cash paid during the year for:

Income taxes (net of amounts recovered)..............................................  $          2    $          5


<FN>
(1)   The  amount for  December  31,  2007  includes  $10,315  in the  Company's insurance  subsidiary (LPAL) which is
      not currently  available to fund the operations or commitments of the Company or its other subsidiaries.
</FN>
</TABLE>

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

                                       21
<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, 2006        64,439  $   3,222  $   67,660  $   11,682  $ (62,598) $      (363)  $    19,603



Net loss........................          -          -           -      (3,683)         -            -        (3,683)
Change in net unrealized
   gains and losses on
   available-for-sale securities          -          -           -           -          -          (34)          (34)
Foreign currency translation
   adjustment...................          -          -           -           -          -          (21)          (21)
Share based compensation,
   including income tax
   effect of $0 ................          -          -          58           -          -            -            58
                                  ---------  ---------  ----------  ----------  ---------  -----------   -----------
Balance as of
   December 31, 2006............     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
                                  ---------  ---------  ----------  ----------  ---------  -----------   -----------
                                  ---------  ---------  ----------  ----------  ---------  -----------   -----------
</TABLE>



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

                                       22
<PAGE>

                  BERKELEY TECHNOLOGY LIMITED AND SUBSIDIARIES

                 CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME
                                 (In thousands)

<TABLE>
<CAPTION>
                                                                                         Years Ended December 31,
                                                                                       ----------------------------
                                                                                           2007            2006
                                                                                       ------------    ------------


<S>                                                                                    <C>             <C>
Net income (loss)....................................................................  $        376    $     (3,683)

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

Foreign currency translation adjustments, net of income taxes of $0..................             5             (21)

Change in net unrealized gains and losses:

   Unrealized holding gains and losses on available-for-sale securities..............            14             (14)
   Reclassification adjustment for gains and losses included in
     net income (loss)...............................................................             -             (20)
                                                                                       ------------    ------------
Other comprehensive income (loss)....................................................            19             (55)
                                                                                       ------------    ------------
Comprehensive income (loss)..........................................................  $        395    $     (3,738)
                                                                                       ------------    ------------
                                                                                       ------------    ------------


</TABLE>







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

                                       23
<PAGE>

                  BERKELEY TECHNOLOGY LIMITED AND SUBSIDIARIES

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                DECEMBER 31, 2007

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

Note 1.   Summary of Significant Accounting Policies

Basis of Presentation and Principles of Consolidation

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

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

       The Company is incorporated  under the laws of Jersey,  Channel  Islands.
Its Ordinary  Shares are traded on the London Stock  Exchange and in the U.S. on
the OTC Bulletin Board in the form of American Depositary Shares ("ADSs"), which
are evidenced by American Depositary Receipts ("ADRs").  Each ADS represents ten
Ordinary Shares. Pursuant to the regulations of the U.S. Securities and Exchange
Commission  ("SEC"),  the Company is considered a U.S.  domestic  registrant and
must file  financial  statements  prepared  under U.S. GAAP. 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 the  majority  of the  Group's  assets are in its life  insurance  and
annuities  business,  the  Group  considers  itself  an  insurance  company  for
financial reporting purposes. As such, the Group complies with the provisions of
Statement of Financial  Accounting  Standards No. 115 ("SFAS 115"),  "Accounting
for Certain  Investments in Debt and Equity Securities," for all of its debt and
equity  investments.  In accordance with 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. Thus, all of the Group's
investments are reported at fair value, and temporary  changes in fair value are
recognized as unrealized gains and losses and reported, net of applicable income
taxes, in a separate component of shareholders' equity.

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

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

                                       24
<PAGE>

                  BERKELEY TECHNOLOGY LIMITED AND SUBSIDIARIES

             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

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

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

       When a quoted  market price is available  for a security,  the Group uses
this price to determine  fair value.  If a quoted  market price is not available
for a  security,  management  estimates  the  security's  fair  value  based  on
appropriate  valuation   methodologies.   Management's  valuation  methodologies
include  fundamental  analysis that evaluates the investee company's progress in
developing  products,  building  intellectual  property  portfolios and securing
customer  relationships,  as well as overall industry conditions,  conditions in
and  prospects  for the  investee's  geographic  region,  overall  equity market
conditions,  and the level of financing  already secured and available.  This is
combined  with  analysis of comparable  acquisition  transactions  and values to
determine if the security's liquidation preferences will ensure full recovery of
the  Group's  investment  in a  likely  acquisition  outcome.  In its  valuation
analysis,  management also considers the most recent  transaction in a company's
shares.

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

Property, Equipment and Leasehold Improvements

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

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

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

Life Insurance Policy Liabilities, Revenues and Expenses

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

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

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

                                       25
<PAGE>

                  BERKELEY TECHNOLOGY LIMITED AND SUBSIDIARIES

             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

       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

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

       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.

Share Based Compensation

Equity compensation plan

       The London Pacific Group 1990 Employee Share Option Trust ("ESOT"), which
was approved by shareholders in 1990, provides for the granting of share options
to employees and directors. Options are generally granted with an exercise price
equal to the fair market  value of the  underlying  shares at the date of grant.
Such grants to employees 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.

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 has 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 have not
been  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.

                                       26
<PAGE>

                  BERKELEY TECHNOLOGY LIMITED AND SUBSIDIARIES

             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

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

       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.

       Share based compensation expense recognized in the Company's consolidated
statement  of  operations   for  the  year  ended  December  31,  2006  includes
compensation  expense for share options  granted prior to, but not yet vested as
of December 31, 2005,  based on the fair value estimated as of the date of grant
in  accordance  with the  provisions of SFAS 123R. No share options were granted
during 2006.  Share based  compensation  expense for 2007 includes  compensation
expense for share  options  granted  prior to, but not yet vested as of December
31, 2006, as well as compensation  expense for 4.5 million share options granted
to employees and directors on March 27, 2007. 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 years ended  December  31, 2007 and 2006 is based upon the fact
that all unvested  options relate to longstanding  employees and directors.  One
employee  who held share  options left the Company  during the third  quarter of
2007 and his 50,000  unvested share options were forfeited.  However,  this fact
does not change the Group's management  estimate of zero percent forfeitures for
future periods.

       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 2007 or 2006,  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 share option exercises.

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

                                       27
<PAGE>

                  BERKELEY TECHNOLOGY LIMITED AND SUBSIDIARIES

             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

Income Taxes

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

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

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

       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  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

                                       28
<PAGE>

                  BERKELEY TECHNOLOGY LIMITED AND SUBSIDIARIES

             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

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.

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 will
adopt SFAS 157 for financial assets and financial  liabilities  within its scope
during the first quarter of 2008 and does not  anticipate the adoption to have a
material 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 Company does not expect that the adoption
of this standard for  non-financial  assets and  non-financial  liabilities will
have a material impact on its 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.  The Company has the option of adopting  this  standard for the first
quarter of 2008.  The Company does not expect the adoption of SFAS 159 to have a
material impact on its financial  statements because the Company does not expect
to apply the provisions of SFAS 159 to any existing financial instruments.

       In December  2007,  the FASB issued  Statement  of  Financial  Accounting
Standards No. 141R ("SFAS 141R"),  "Business  Combinations."  SFAS 141R requires
the acquiring  entity in a business  combination  to recognize all of the assets
acquired  and  liabilities  assumed in the  transaction  at fair value as of the
acquisition date. SFAS 141R is effective for business combinations for which the
acquisition  date is on or after the  beginning  of the first  annual  reporting
period  beginning  on or after  December  15,  2008.  The  Company is  currently
evaluating  the  effect  that  the  adoption  of  SFAS  141R  will  have  on its
consolidated  financial  statements.  However,  the adoption of SFAS 141R is not
expected to have an impact on the Company's 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,

                                       29
<PAGE>

                  BERKELEY TECHNOLOGY LIMITED AND SUBSIDIARIES

             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

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.  However,  the  adoption of SFAS 160 is not
expected to have an impact on the Company's consolidated financial statements.

       In  March  2008,  the  FASB  issued  Statement  of  Financial  Accounting
Standards No. 161 ("SFAS 161"),  "Disclosures  about Derivative  Instruments and
Hedging  Activities,  and amendment of FASB  Statement No. 133." This  statement
requires enhanced disclosures about how derivative and hedging activities affect
an entity's financial position,  financial  performance and cash flows. SFAS 161
is effective for fiscal years and interim  periods  beginning after November 15,
2008,  with early  application  encouraged.  As the Company  currently  does not
engage in  derivative  and hedging  activities,  the adoption of SFAS 161 is not
expected to have an impact on the Company's consolidated financial statements.

Use of Estimates

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

Note 2.   Discontinued Operations

       The  $1.0  million  loss  on  discontinued  operations  recorded  in 2006
resulted from the write-off of the $1.0 million of cash held in escrow which was
part of the proceeds from the sale of London  Pacific  Advisors  ("LPA") in June
2003 held back to cover any of the Group's indemnity  obligations.  As disclosed
in the  Company's  2005  Annual  Report on Form  10-K and in its 2006  Quarterly
Reports on Form 10-Q,  in February  2005,  SunGard  filed a lawsuit  against the
Company and certain of its subsidiaries alleging breaches of representations and
warranties contained in the sale and purchase agreement.  Subsequently, in April
2005, the Company filed a lawsuit  against SunGard and certain of its affiliates
accusing  SunGard of wrongful  conduct.  In August 2006, the Company and SunGard
entered into a settlement  agreement  covering the above  actions.  All lawsuits
against  each other were  dismissed  and the  Company  agreed to forego the $1.0
million escrow account, including accrued interest on the account.  Accordingly,
the $1.0 million of cash held in escrow (and  $56,000 of interest  earned on the
escrow  account) was written off as of June 30, 2006.  The write-off of the $1.0
million  original  escrow  amount  has  been  shown  as a loss  on  discontinued
operations,  and the write-off of the $56,000 of interest earned has been netted
against investment income, in the Company's consolidated statement of operations
for 2006.

                                       30
<PAGE>

                  BERKELEY TECHNOLOGY LIMITED AND SUBSIDIARIES

             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

Note 3.    Investments

Summary Cost and Fair Value Information

Fixed Maturity Securities

       The  Group's  fixed  maturity  securities  as of  December  31, 2006 were
comprised of U.S. and non-U.S. corporate debt securities for which quoted market
prices were  available.  During  2007,  all of these fixed  maturity  securities
matured.

       An analysis of fixed maturity securities is as follows:

<TABLE>
<CAPTION>
                                                                          December 31,

                                  ----------------------------------------------------------------------------------------
                                                     2007                                          2006
                                  ------------------------------------------    ------------------------------------------
                                               Gross      Gross    Estimated                 Gross      Gross    Estimated
                                  Amortized Unrealized Unrealized    Fair       Amortized Unrealized Unrealized    Fair
                                    Cost       Gains     Losses      Value        Cost       Gains     Losses      Value
                                  ---------  ---------  ---------  ---------    ---------  ---------  ---------  ---------
                                                                       (In thousands)

<S>                               <C>        <C>        <C>        <C>          <C>        <C>        <C>        <C>
Available-for-Sale:
Non-U.S. corporate
   debt securities.........       $       -  $       -  $       -  $       -    $   4,017  $       -  $      (6) $   4,011
Corporate debt securities..               -          -          -          -        5,004          -         (8)     4,996
                                  ---------  ---------  ---------  ---------    ---------  ---------  ---------  ---------
                                          -          -          -          -        9,021          -        (14)     9,007
                                  ---------  ---------  ---------  ---------    ---------  ---------  ---------  ---------
Held-to-Maturity:

Corporate debt securities..               -          -          -          -        3,009          -         (5)     3,004
                                  ---------  ---------  ---------  ---------    ---------  ---------  ---------  ---------
                                          -          -          -          -        3,009          -         (5)     3,004
                                  ---------  ---------  ---------  ---------    ---------  ---------  ---------  ---------
Total fixed maturity securities   $       -  $       -  $       -  $       -    $  12,030  $       -  $     (19) $  12,011
                                  ---------  ---------  ---------  ---------    ---------  ---------  ---------  ---------
                                  ---------  ---------  ---------  ---------    ---------  ---------  ---------  ---------
</TABLE>

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

Equity Securities

       Equity  securities  are comprised of  available-for-sale  securities.  An
analysis of equity securities is as follows:

 <TABLE>
<CAPTION>
                                                                          December 31,

                                  ----------------------------------------------------------------------------------------
                                                     2007                                          2006
                                  ------------------------------------------    ------------------------------------------
                                               Gross      Gross    Estimated                 Gross      Gross    Estimated
                                            Unrealized Unrealized    Fair                 Unrealized Unrealized    Fair
                                    Cost       Gains     Losses      Value        Cost       Gains     Losses      Value
                                  ---------  ---------  ---------  ---------    ---------  ---------  ---------  ---------
                                                                       (In thousands)

<S>                               <C>        <C>        <C>        <C>          <C>        <C>        <C>        <C>
Private corporate equity

   securities..............       $   1,984  $       -  $       -  $   1,984    $     844  $       -  $       -  $     844
                                  ---------  ---------  ---------  ---------    ---------  ---------  ---------  ---------
Total available-for-sale
   equity securities.......       $   1,984  $       -  $       -  $   1,984    $     844  $       -  $       -  $     844
                                  ---------  ---------  ---------  ---------    ---------  ---------  ---------  ---------
                                  ---------  ---------  ---------  ---------    ---------  ---------  ---------  ---------
</TABLE>

                                       31
<PAGE>

                  BERKELEY TECHNOLOGY LIMITED AND SUBSIDIARIES

             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

Investment Concentration and Risk

       As of December  31,  2007,  the Group's  investments  consisted  of three
private corporate equity securities with individual book values of less then 10%
of the Group's shareholders' equity. One of these investments, with a book value
of $1.0  million,  is in  preferred  stock  of a  technology  company  that is a
consulting client of BICC. Another investment, with a book value of $140,000, is
in  preferred  stock of another  technology  company  that is also a  consulting
client of BICC.  The third  investment  has a book value of  $844,000  and is in
preferred stock of a technology company.

       As of December  31,  2007,  the  Company's  Jersey  based life  insurance
subsidiary,  LPAL,  owned 93% of the Group's $2.0 million in  available-for-sale
private equity securities. LPAL is a regulated insurance company, and as such it
must meet stringent  capital adequacy  requirements and 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.  Dividends
require  the  approval of the Jersey  Financial  Services  Commission  ("JFSC").
LPAL's investments are therefore not currently  available to fund the operations
or commitments of the Company or its other subsidiaries.

       The  Group  held  no  fixed  maturity  securities  considered  less  than
investment  grade as of  December  31,  2006.  The Group held no fixed  maturity
securities as of December 31, 2007.

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

       Net  unrealized  losses  on  fixed  maturity  securities   classified  as
available-for-sale  as of  December  31,  2006  totaled  $14,000.  There were no
related income taxes. The Group held no fixed maturity securities as of December
31, 2007.

       There were no net unrealized  losses on equity  securities  classified as
available-for-sale as of December 31, 2007 or 2006.

       Changes  in  net  unrealized  gains  and  losses  on   available-for-sale
securities included in other  comprehensive  income for the years ended December
31, 2007 and 2006 were as follows:
<TABLE>
<CAPTION>

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

<S>                                                                             <C>        <C>        <C>
Net unrealized gains on available-for-sale securities as of December 31, 2005   $      20  $       -  $      20

Changes during the year ended December 31, 2006:

   Unrealized holding gains and losses on available-for-sale securities.....          (14)         -        (14)
   Reclassification adjustment for gains and losses included in net loss....          (20)         -        (20)
                                                                                ---------  ---------  ---------
Net unrealized losses on available-for-sale securities as of December 31, 2006  $     (14) $       -  $     (14)
                                                                                ---------  ---------  ---------
                                                                                ---------  ---------  ---------
Changes during the year ended December 31, 2007:

   Unrealized holding gains and losses on available-for-sale securities......          14          -         14
   Reclassification adjustment for gains and losses included in net income...           -          -          -
                                                                                ---------  ---------  ---------
Net unrealized losses on available-for-sale securities as of December 31, 2007  $       -  $       -  $       -
                                                                                ---------  ---------  ---------
                                                                                ---------  ---------  ---------
</TABLE>


                                       32
<PAGE>


                  BERKELEY TECHNOLOGY LIMITED AND SUBSIDIARIES

             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

Net Investment Income

       The details of  investment  income,  net of investment  expenses,  are as
follows:
<TABLE>
<CAPTION>
                                                                                         Years Ended December 31,
                                                                                       ----------------------------
                                                                                           2007            2006
                                                                                       ------------    ------------
                                                                                               (In thousands)

<S>                                                                                    <C>             <C>
Interest on fixed maturity securities................................................  $        208    $        881
Interest on cash and cash equivalents................................................           596             324
                                                                                       ------------    ------------
Gross investment income..............................................................           804           1,205
Investment expenses..................................................................             -              (2)
                                                                                       ------------    ------------
                                                                                                804           1,203
Amounts credited on insurance policyholder accounts..................................           (44)           (468)
                                                                                       ------------    ------------
Net investment income................................................................  $        760    $        735
                                                                                       ------------    ------------
                                                                                       ------------    ------------
</TABLE>


Realized Gains and Losses

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

                                                                                         Years Ended December 31,
                                                                                       ----------------------------
                                                                                           2007            2006
                                                                                       ------------    ------------
                                                                                               (In thousands)
Realized  gains   (losses)  on  securities   transactions:
Fixed   maturities, available-for-sale:
<S>                                                                                    <C>             <C>
   Gross gains.......................................................................  $      1,198    $          -
   Gross losses .....................................................................             -              (2)
                                                                                       ------------    ------------
Net realized gains (losses) on fixed maturities, available-for-sale..................         1,198              (2)
                                                                                       ------------    ------------
Equity securities, trading:

   Gross gains.......................................................................             -               6
                                                                                       ------------    ------------
Net realized gains on equity securities, trading.....................................             -               6
                                                                                       ------------    ------------
Equity securities, available-for-sale:
   Gross losses......................................................................             -              (6)
                                                                                       ------------    ------------
Net realized losses on equity securities, available-for-sale.........................             -              (6)
                                                                                       ------------    ------------

Net realized investment gains (losses) on securities transactions....................  $      1,198    $         (2)
                                                                                       ------------    ------------
                                                                                       ------------    ------------
</TABLE>


       The net  realized  gain of $1.2  million  in 2007  represents  a  partial
distribution received from the WorldCom,  Inc. securities litigation.  LPAL held
certain  WorldCom,  Inc.  publicly traded bonds which it sold at a loss in 2002.
This $1.2 million  payment  reverses  part of LPAL's  realized  loss recorded in
2002. Since this payment is for LPAL's account,  it is not available to fund the
operations or commitments of the Company or its other subsidiaries.

                                       33
<PAGE>

                  BERKELEY TECHNOLOGY LIMITED AND SUBSIDIARIES

             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

Subsequent Events

       LPAL  received an  additional  $0.3  million  payment in  February  2008,
representing  the  final  distribution  from  the  WorldCom,   Inc.   securities
litigation,  which will be recognized in the Group's statement of operations for
the first quarter of 2008.  Since this payment is for LPAL's account,  it is not
available  to fund the  operations  or  commitments  of the Company or its other
subsidiaries.

       In February 2008,  LPAL submitted a claim in the Enron  Securities  class
action  settlement,  based on certain Enron bonds  previously held by LPAL which
LPAL  believes  constitute  "Category  1"  securities  eligible  for  the  Enron
settlement proceeds. The Group does not expect any payment based on LPAL's claim
until  2009 at the  earliest.  The  amount of the  recovery  of LPAL's  realized
investment losses recorded in 2002 is currently unknown.

Note 4.    Property and Equipment

       Property  and  equipment  are  carried  at  cost  and  consisted  of  the
following:
<TABLE>
<CAPTION>
                                                                                               December 31,
                                                                                       ----------------------------
                                                                                          2007              2006
                                                                                       ------------    ------------
                                                                                              (In thousands)

<S>                                                                                    <C>             <C>
Property, equipment and leasehold improvements....................................     $        189    $        729
Accumulated depreciation..........................................................             (175)           (712)
                                                                                       ------------    ------------
Property and equipment, net.......................................................     $         14    $         17
                                                                                       ------------    ------------
                                                                                       ------------    ------------
</TABLE>

Note 5.    Other Assets

       An analysis of other assets is as follows:

<TABLE>
<CAPTION>
                                                                                               December 31,
                                                                                       ----------------------------
                                                                                          2007              2006
                                                                                       ------------    ------------
                                                                                              (In thousands)

<S>                                                                                    <C>             <C>
Prepayments.......................................................................     $        164    $        195
Receivables:
   Due from broker................................................................                -               1
   Fee income receivable..........................................................              411             169
   Other receivables..............................................................               45              18
   Allowance for doubtful accounts................................................              (34)            (34)
                                                                                       ------------    ------------
Total other assets................................................................     $        586    $        349
                                                                                       ------------    ------------
                                                                                       ------------    ------------

</TABLE>

                                       34
<PAGE>














                  BERKELEY TECHNOLOGY LIMITED AND SUBSIDIARIES

             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

Note 6.    Life Insurance Policy Liabilities

       An analysis of life insurance policy liabilities is as follows:
<TABLE>
<CAPTION>
                                                                                              December 31,
                                                                                       ----------------------------
                                                                                          2007             2006
                                                                                       ------------    ------------
                                                                                              (In thousands)

<S>                                                                                    <C>             <C>
Deferred annuities - policyholder contract deposits...............................     $         95    $      3,360
Other policy claims and benefits..................................................               46             280
                                                                                       ------------    ------------
                                                                                       $        141    $      3,640
                                                                                       ------------    ------------
                                                                                       ------------    ------------
</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 7.   Statutory Financial Information and Restrictions

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

       The JFSC  sets  out the  conditions  with  which  LPAL  must  comply  and
determines  the reporting  requirements  and the  frequency of reporting.  These
conditions  require that: (i) LPAL must hold, at all times,  approved  assets at
least equal to the long-term  insurance fund plus the required  minimum solvency
margin, (ii) the margin of solvency must be the greater of (pound)50,000 or 2.5%
of the value of the long-term  business fund, and (iii) assets equal to not less
than 90% of liabilities must be placed with approved independent custodians.  As
of December 31, 2007, 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.

                                       35
<PAGE>

                  BERKELEY TECHNOLOGY LIMITED AND SUBSIDIARIES

             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

Note 8.    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.  In  general,  the
Company's tax returns remain subject to  examination by taxing  authorities  for
the tax years 2003 through 2006.

       The Group is subject to taxation on its income in all  countries in which
it operates  based upon the taxable  income  arising in each  country.  However,
realized  gains on certain  investments  are  exempt  from  Jersey and  Guernsey
taxation.  This and other tax benefits  which may not recur have reduced the tax
charge in 2007 and 2006.

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

       A breakdown of the Group's book income  (loss) before income taxes by tax
jurisdiction follows:
<TABLE>
<CAPTION>
                                                                                          Years Ended December 31,
                                                                                       ----------------------------
                                                                                           2007            2006
                                                                                       ------------    ------------
                                                                                              (In thousands)
Income (loss) before income taxes:

<S>                                                                                    <C>             <C>
Jersey, Guernsey and United Kingdom..................................................  $        270    $     (1,410)
United States..........................................................................         108          (2,268)
                                                                                       ------------    ------------
Total income (loss) before income taxes..............................................  $        378    $     (3,678)
                                                                                       ------------    ------------
                                                                                       ------------    ------------

</TABLE>







                                       36
<PAGE>









                  BERKELEY TECHNOLOGY LIMITED AND SUBSIDIARIES

             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

       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>

                                                                                         Years Ended December 31,
                                                                                       ----------------------------
                                                                                           2007            2006
                                                                                       ------------    ------------
                                                                                               (In thousands)
<S>                                                                                    <C>             <C>
Income tax expense (benefit) computed at Jersey statutory income tax
   rate of 20%.......................................................................  $         76    $       (736)
Realized and unrealized investment gains not subject to taxation
   in Jersey.........................................................................          (240)              -
Other losses not deductible in Jersey................................................           158             268
Income not taxable in Guernsey.......................................................           (10)            (20)
Tax expense (benefit) on losses at higher than 20% statutory Jersey rate:
   Income (losses) in the U.S........................................................            24            (518)

Increase (decrease) in valuation allowance...........................................           (48)            972
Expiration of capital loss carryforwards of U.S. entities............................        67,245               -
Decrease in valuation allowance related to expiration of capital loss
   carryforwards.....................................................................       (67,245)              -
Forfeiture of U.S. net operating loss carryforwards related to dissolved
   U.S. entities (1).................................................................             -           5,070
Decrease in valuation allowance related to dissolved U.S. entities (1)...............             -          (5,070)
Other................................................................................            42              39

                                                                                       ------------    ------------
Actual tax expense ..................................................................  $          2    $          5
                                                                                       ------------    ------------
                                                                                       ------------    ------------
<FN>
(1) Related  to  two  of the  Group's  inactive  U.S.  subsidiaries  which  were  dissolved  in  December  2006.
    These  entities  were  owned  by a  non-U.S. subsidiary  of the  registrant  and as a result of their  dissolution,
    $4.4 million of federal net operating loss carryforward benefits and $0.7 million of state net operating loss
    carryforward benefits were forfeited.
</FN>
</TABLE>

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

                                                                                          Years Ended December 31,
                                                                                       ----------------------------
                                                                                           2007            2006
                                                                                       ------------    ------------
                                                                                               (In thousands)
Jersey, Guernsey and United Kingdom:

<S>                                                                                    <C>             <C>
   Current tax expense...............................................................  $          -    $          -
   Deferred tax expense..............................................................             -               -

United States:

   Current tax expense ..............................................................             2               5
   Deferred tax expense..............................................................             -               -

                                                                                       ------------    ------------
Total actual tax expense ............................................................  $          2    $          5
                                                                                       ------------    ------------
                                                                                       ------------    ------------
</TABLE>

       The  Group  recognizes  assets  and  liabilities  for  the  deferred  tax
consequences  of  temporary  differences  between  the tax basis of  assets  and
liabilities  and their  reported  amounts  in the  financial  statements.  These
temporary  differences  will result in taxable or  deductible  amounts in future
years when the reported amounts of

                                       37
<PAGE>

                  BERKELEY TECHNOLOGY LIMITED AND SUBSIDIARIES

             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

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, 2007 and December 31, 2006,  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,
                                                                                       ----------------------------
                                                                                           2007            2006
                                                                                       ------------    ------------
                                                                                               (In thousands)
U.S. subsidiaries:

Deferred income tax assets:

<S>                                                                                    <C>               <C>
Net operating loss carryforwards..................................................     $      5,497    $      5,543
Capital loss carryforwards........................................................                -          67,245
Deferred compensation.............................................................                3               4
Bad debts.........................................................................               14              14
Other assets......................................................................                1               2
Valuation allowance...............................................................           (5,514)        (72,807)
                                                                                       ------------    ------------
Deferred income tax assets, net of valuation allowance............................                1               1

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


       As of December  31,  2007,  the Group's  U.S.  subsidiaries  have pre-tax
federal net operating loss carryforwards of approximately $13.3 million expiring
as follows:  approximately $1.3 million in 2011, and approximately $12.0 million
from  2020 to 2026.  These  subsidiaries  have  California  net  operating  loss
carryforwards  of  approximately  $10.8 million  expiring from 2012 to 2016. The
Group has  recorded  a full  valuation  allowance  for the  deferred  tax assets
arising  from these  carryforward  amounts as of  December  31,  2007 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  $12.7  million as of December  31, 2007;
however,  these loss carryforward positions will be lost 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.  As  such,  no  deferred  tax  assets,  and no
corresponding  valuation  reserves,  have been  recorded for these net operating
loss carryforwards.


                                       38
<PAGE>

                  BERKELEY TECHNOLOGY LIMITED AND SUBSIDIARIES

             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

Note 9.    Shareholders' Equity

       The Company has authorized 86,400,000 Ordinary Shares with a par value of
$0.05 per  share.  As of  December  31,  2007 and 2006,  there  were  64,439,073
Ordinary Shares issued and outstanding.

       No dividends were declared and paid in 2007 or 2006.

       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 two components,  foreign
currency  translation  adjustments  and  net  unrealized  gains  and  losses  on
available-for-sale   securities.   Accumulated   foreign  currency   translation
adjustments  were  $(399,000)  and  $(404,000) as of December 31, 2007 and 2006,
respectively. The net unrealized gains (losses) on available-for-sale securities
after  deferred  income taxes were $0 and  $(14,000) as of December 31, 2007 and
2006, respectively.

       The Group has two share  incentive  plans as  described in Note 12 "Share
Incentive  Plans" below.  Under the terms of these plans,  shares of the Company
may be purchased in the open market and held in trust. These shares are owned by
the employee benefit trusts, which are subsidiaries of the Company for financial
reporting purposes.

       Changes in the number of shares  held by The  London  Pacific  Group 1990
Employee  Share Option Trust  ("ESOT") and the Agent Loyalty  Opportunity  Trust
("ALOT") were as follows:
<TABLE>
<CAPTION>
                                                                               Years Ended December 31,
                                                                     ------------------------------------------
                                                                             2007                  2006
                                                                     --------------------  --------------------
                                                                       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

                                       39
<PAGE>

                  BERKELEY TECHNOLOGY LIMITED AND SUBSIDIARIES

             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

(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 10.    Commitments and Contingencies

Lease Commitments

       The Group leases office space under operating  leases.  Total rents under
these  operating  leases were $201,000  (net of sublease  income of $86,000) and
$207,000 (net of sublease  income of $46,000),  for the years ended December 31,
2007 and 2006, respectively.  The Group had no capital leases as of December 31,
2007.

       Future minimum lease payments  required under  non-cancellable  operating
leases with terms of one year or more, as of December 31, 2007, were as follows:
<TABLE>
<CAPTION>
                                                                                                          Operating
                                                                                                           Leases(1)
                                                                                                       ------------
                                                                                                     (In thousands)

<C>                                                                                                             <C>
2008...............................................................................................             273
2009...............................................................................................             133
2010...............................................................................................              67
                                                                                                       ------------
Total..............................................................................................           $ 473
                                                                                                       ------------
                                                                                                       ------------
<FN>
(1) Includes  commitments  related to the  Group's  Jersey  office  lease  which expires in September  2010.  The Group
    entered into a sublease of its Jersey office during 2006.  Expected  future sublease income from 2007 through 2010
    is  $215,000.  A liability  of $118,000  remains  recorded on the  Company's consolidated balance sheet as of December
    31, 2007, representing the loss on the sublease from 2008 through 2010.
</FN>
</TABLE>

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

Guarantees

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

       Under its Memorandum and Articles of Association,  the Company has agreed
to indemnify  its  officers  and  directors  for certain  events or  occurrences
arising as a result of the officer or  director  serving in such  capacity.  The
maximum  potential  amount of future  payments the Company  could be required to
make under these indemnification  agreements is unlimited.  However, the Company
maintains  directors and officers liability  insurance that limits the Company's
exposure and enables it to recover a portion of any future  amounts  paid.  As a
result of its insurance coverage,  the Company believes the estimated fair value
of these  indemnification  agreements is minimal and has no liabilities recorded
for these agreements as of December 31, 2007.

                                       40
<PAGE>

                  BERKELEY TECHNOLOGY LIMITED AND SUBSIDIARIES

             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

       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, 2007.

Note 11.   Fair Value of Financial Instruments

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

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

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

       The carrying  values and estimated  fair values of the Group's  financial
instruments were as follows:
<TABLE>
<CAPTION>
                                                                          December 31,
                                                      --------------------------------------------------
                                                                2007                      2006
                                                      ------------------------  ------------------------
                                                       Carrying     Estimated    Carrying     Estimated
                                                         Value      Fair Value     Value      Fair Value
                                                      -----------  -----------  -----------  -----------
                                                                             (In thousands)
Financial assets:

<S>                                                   <C>          <C>          <C>          <C>
Cash and cash equivalents........................     $    14,568  $    14,568  $     6,707  $     6,707
Investments:
   Fixed maturities:

       Available-for-sale........................               -            -        9,007        9,007
       Held-to-maturity..........................               -            -        3,009        3,004
   Equity securities:

       Available-for-sale........................           1,984        1,984          844          844

Financial liabilities:

Life insurance policy liabilities................             141          139        3,640        3,603

</TABLE>

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

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

                                       41
<PAGE>

                  BERKELEY TECHNOLOGY LIMITED AND SUBSIDIARIES

             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

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

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

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

Note 12.    Share Incentive Plans

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

Employee Share Option Trust

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

       The ESOT may purchase  shares of the Company in the open  market,  funded
each  year by a loan from the  Company  or its  subsidiaries.  While the loan is
limited  up to an annual  maximum  of 5% of the  consolidated  net assets of the
Group,  the ESOT is not limited as to the number of options that may be granted,
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 9  "Shareholders'  Equity"
for a summary of the share activity within the ESOT.

       Share option  activity for the years ended December 31, 2007 and 2006 was
as follows:
<TABLE>
<CAPTION>

                                                                2007                      2006
                                                      ------------------------  ------------------------
                                                       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......................           5,225  $      2.59        6,285  $      2.77
Granted..........................................           4,500         0.10            -            -
Forfeited........................................            (100)        0.20            -            -
Expired..........................................               -            -       (1,060)        3.66
                                                      -----------  -----------  -----------  -----------
Outstanding as of December 31....................           9,625  $      1.45        5,225  $      2.59
                                                      -----------  -----------  -----------  -----------
                                                      -----------  -----------  -----------  -----------

Options exercisable as of December 31............           4,675  $      2.88        4,475  $      3.00
                                                      -----------  -----------  -----------  -----------
                                                      -----------  -----------  -----------  -----------
</TABLE>


                                       42
<PAGE>

                  BERKELEY TECHNOLOGY LIMITED AND SUBSIDIARIES

             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

       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, 2007 is as follows:
<TABLE>
<CAPTION>

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

<S>                      <C>              <C>              <C>                        <C>              <C>
  $0.10   $0.50                 7,315            7.79             $0.17                      2,365            $0.29
   0.51 -  5.00                   220            3.18              2.46                        220             2.46
   5.01 - 10.00                 2,030            3.38              5.41                      2,030             5.41
  10.01 - 21.00                    60            2.68             21.00                         60            21.00
---------------         -------------     -----------      ------------            ---------------     ------------
$  0.10 -$21.00                 9,625            6.72             $1.45                      4,675            $2.88
---------------         -------------     -----------      ------------            ---------------     ------------
---------------         -------------     -----------      ------------            ---------------     ------------

<FN>
(1) The intrinsic  value of all options  outstanding as of December 31, 2007 was zero, as the market value of the
    underlying shares was $0.10 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 the  years  ended  December  31,  2007  and  2006,
compensation  expense  related to employee share options under SFAS 123R totaled
$71,000 and $58,000,  respectively, and is included in operating expenses in the
accompanying statements of operations.

       During  the first  quarter of 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,  250,000  options  became  vested,  100,000  options were forfeited and no
options  were  exercised.  At December 31, 2007,  there were  9,625,000  options
outstanding  with a weighted  average exercise price of $1.45. Of these options,
4,675,000  were  exercisable  at December  31,  2007,  and these have a weighted
average exercise price of $2.88. The remaining  4,950,000  options were unvested
at December 31, 2007.  These unvested  options have a weighted  average exercise
price of $0.11. As of December 31, 2007, total unrecognized compensation expense
related  to  unvested  share  options  was  $254,000,  which is  expected  to be
recognized  as follows:  $88,000 in 2008,  $77,000 in 2009,  $72,000 in 2010 and
$17,000 in 2011.

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

                                       43
<PAGE>

                  BERKELEY TECHNOLOGY LIMITED AND SUBSIDIARIES

             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

date of grant  and were  forfeited  upon  termination  of the  agency  contract.
Vesting of the award in any given year was also  contingent on the holder of the
award surpassing a predetermined  benchmark tied to sales and  persistency.  The
SARs expired seven years from the date of grant.  The 79,000 awards  outstanding
at December 31, 2005 expired in April 2006.

       The ALOT may purchase  Ordinary  Shares in the open  market,  funded by a
loan from a Group  subsidiary.  The loan is secured  by the  shares  held in the
trust and bears interest  based upon the trust's net income before  interest for
each financial period. The trust receives dividends on all Ordinary Shares held.
The loan, interest income and dividend income are eliminated in the consolidated
financial  statements.  See Note 9  "Shareholders'  Equity" for a summary of the
share activity within the ALOT.

       SAR  activity  for the  years  ended  December  31,  2007 and 2006 was as
follows:
<TABLE>
<CAPTION>
                                                                2007                      2006
                                                      ------------------------  ------------------------
                                                                    Weighted-                 Weighted-
                                                         Number      Average      Number       Average
                                                        of Award    Exercise     of Award     Exercise
(Award units in thousands)                               Units        Price       Units         Price
                                                      -----------  -----------  -----------  -----------

<S>                                                   <C>          <C>          <C>          <C>
Outstanding as of January 1......................               -            -           79  $      5.19
Granted..........................................               -            -            -            -
Exercised........................................               -            -            -            -
Forfeited........................................               -            -            -            -
Expired..........................................               -            -          (79)        5.19
                                                      -----------  -----------  -----------  -----------
Outstanding as of December 31....................               -            -            -            -
                                                      -----------  -----------  -----------  -----------
                                                      -----------  -----------  -----------  -----------

Award units exercisable as of December 31........               -            -            -            -
                                                      -----------  -----------  -----------  -----------
                                                      -----------  -----------  -----------  -----------

</TABLE>

Note 13.     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 $175,000 and $161,000
were made by the Group to the plan in 2007 and 2006,  respectively.  Of the 2007
and 2006 contributions,  $121,000 and $111,000,  respectively,  were offset by a
salary waiver.

Note 14.    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:

                                       44
<PAGE>

                  BERKELEY TECHNOLOGY LIMITED AND SUBSIDIARIES

             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

<TABLE>
<CAPTION>
                                                                                         Years Ended December 31,
                                                                                       ----------------------------
                                                                                           2007            2006
                                                                                       ------------    ------------
                                                                                       (In thousands, except share,
                                                                                        per share and ADS amounts)

<S>                                                                                    <C>             <C>
Income (loss) from continuing operations.............................................  $        376    $     (2,683)
Loss on discontinued operations......................................................             -          (1,000)
                                                                                       ------------    ------------
Net income (loss)....................................................................  $        376    $     (3,683)
                                                                                       ------------    ------------
                                                                                       ------------    ------------

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

Basic earnings (loss) per share:

Continuing operations................................................................  $       0.01    $      (0.05)
Discontinued operations..............................................................             -           (0.02)
                                                                                       ------------    ------------
                                                                                       $       0.01    $      (0.07)
                                                                                       ------------    ------------
                                                                                       ------------    ------------
Basic earnings (loss) per ADS:

Continuing operations................................................................  $       0.07    $      (0.53)
Discontinued operations..............................................................             -           (0.20)
                                                                                       ------------    ------------
                                                                                       $       0.07    $      (0.73)
                                                                                       ------------    ------------
                                                                                       ------------    ------------

Diluted earnings (loss) per share and ADS:
Weighted-average number of Ordinary Shares outstanding,
   excluding shares held by the employee benefit trusts..............................    50,916,692      50,916,692
Effect of dilutive securities (warrants and employee share options) .................       304,545               -
                                                                                       ------------    ------------
Weighted-average number of Ordinary Shares used in diluted
   earnings (loss) per share calculations............................................    51,221,237      50,916,692
                                                                                       ------------    ------------
                                                                                       ------------    ------------
Diluted earnings (loss) per share:

Continuing operations................................................................  $       0.01    $      (0.05)
Discontinued operations..............................................................             -           (0.02)
                                                                                       ------------    ------------
                                                                                       $       0.01    $      (0.07)
                                                                                       ------------    ------------
                                                                                       ------------    ------------
Diluted earnings (loss) per ADS:

Continuing operations................................................................  $       0.07    $      (0.53)
Discontinued operations..............................................................             -           (0.20)
                                                                                       ------------    ------------
                                                                                       $       0.07    $      (0.73)
                                                                                       ------------    ------------
                                                                                       ------------    ------------
</TABLE>

       As the Company  recorded a net loss for the year ended December 31, 2006,
the  calculation  of  diluted  loss per share  for that  year  does not  include
potentially  dilutive  employee share options and warrants issued to the Bank of
Scotland as they are  anti-dilutive  and, if included,  would have resulted in a
reduction of the net loss per share.  If the Company had reported net income for
the year ended  December 31,  2006,  there would have been an  additional  8,125
shares, respectively,  included in the calculation of diluted earnings per share
for that year.

                                       45
<PAGE>

                  BERKELEY TECHNOLOGY LIMITED AND SUBSIDIARIES

             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

Note 15.    Transactions with Related Parties

       The Group paid legal fees of approximately  $5,000 and $1,000 during 2007
and 2006, respectively,  to a law firm of which one of its directors,  Victor A.
Hebert, is a member.

Note 16.    Business Segment and Geographical Information

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

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

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

                                                                                         Years Ended December 31,
                                                                                       ----------------------------
                                                                                           2007            2006
                                                                                       ------------    ------------
                                                                                               (In thousands)

<S>                                                                                    <C>             <C>
Jersey...............................................................................  $      1,842    $        968
Guernsey.............................................................................            52             103
United States........................................................................         1,828             872
                                                                                       ------------    ------------
Consolidated revenues and net investment gains (losses)
   for continuing operations.........................................................  $      3,722    $      1,943
                                                                                       ------------    ------------
                                                                                       ------------    ------------
</TABLE>

       Total assets by geographic segment were as follows:
<TABLE>
<CAPTION>
                                                                                                December 31,
                                                                                       ----------------------------
                                                                                             2007          2006
                                                                                       ------------    ------------
                                                                                              (In  thousands)

<S>                                                                                    <C>             <C>
Jersey.............................................................................    $     14,135    $     15,203
Guernsey...........................................................................               1           2,082
United States......................................................................           3,031           2,952
                                                                                       ------------    ------------
Consolidated total assets .........................................................    $     17,167    $     20,237
                                                                                       ------------    ------------
                                                                                       ------------    ------------

</TABLE>
                                       46
<PAGE>


                  BERKELEY TECHNOLOGY LIMITED AND SUBSIDIARIES

             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

       Revenues  and  income  (loss)  before  income  taxes  for  the  Company's
reportable  operating  segments  included  in  continuing  operations,  based on
management's internal reporting structure, were as follows:
<TABLE>
<CAPTION>
                                                                                         Years Ended December 31,
                                                                                       ----------------------------
                                                                                           2007            2006
                                                                                       ------------    ------------
                                                                                              (In thousands)
Revenues:

<S>                                                                                       <C>           <C>
Venture capital and consulting.......................................................  $      1,718    $        723
Life insurance and annuities ........................................................         1,778             937
                                                                                       ------------    ------------
                                                                                              3,496           1,660
Reconciliation of segment amounts to consolidated amounts:

Interest and other fee income........................................................           226             283
                                                                                       ------------    ------------
Consolidated revenues and net investment gains and losses
   for continuing operations.........................................................  $      3,722    $      1,943
                                                                                       ------------    ------------
                                                                                       ------------    ------------


Income (loss) from continuing operations before income tax expense:

Venture capital and consulting.......................................................  $        317    $       (403)
Life insurance and annuities.........................................................         1,228            (221)
                                                                                       ------------    ------------
                                                                                              1,545            (624)
Reconciliation of segment amounts to consolidated amounts:

Interest and other fee income........................................................           226             283
Corporate expenses...................................................................        (1,392)         (2,336)
Interest expense.....................................................................            (1)             (1)
                                                                                       ------------    ------------
Consolidated income (loss) from continuing operations
   before income tax expense.........................................................  $        378    $     (2,678)
                                                                                       ------------    ------------
                                                                                       ------------    ------------
</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,
                                                                                       ----------------------------
                                                                                           2007            2006
                                                                                       ------------    ------------
                                                                                              (In  thousands)
Assets:

<S>                                                                                    <C>             <C>
Venture capital and consulting.....................................................    $          -    $          -
Life insurance and annuities.......................................................          12,238          14,518
Corporate and other................................................................           4,929           5,719
                                                                                       ------------    ------------
Consolidated total assets..........................................................    $     17,167    $     20,237
                                                                                       ------------    ------------
                                                                                       ------------    ------------
</TABLE>

 Note 17.    Client Concentration

       During 2007,  51% of  consulting  fee revenues  were  generated  from one
client.  The level of  consulting  fees is  expected  to be  volatile  in future
periods  depending  on the nature and extent of the Group's work at any point in
time.


                                       47
<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, 2007.  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, 2007, 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 quarter ended  December 31, 2007 that have  materially
affected,  or are reasonably likely to materially  affect,  our internal control
over financial reporting.

Item 9B.    OTHER INFORMATION

       None.

                                       48
<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,  2008  (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 59, 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 53, 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.

                                       49
<PAGE>

       The following  table is a summary of selected  information for our equity
compensation plans as of December 31, 2007.
<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.............              9,625,000 (1)               $1.45                         (1)

Equity compensation plans not
   approved by shareholders.............                     -                        -
                                                ---------------                --------
Total...................................              9,625,000                   $1.45
                                                ---------------                --------
                                                ---------------                --------
<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  12 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.

                                       50
<PAGE>

                                     PART IV

Item 15.     EXHIBITS AND FINANCIAL STATEMENT SCHEDULES

(a) The following documents are filed as a part of this Form 10-K:
<TABLE>
<CAPTION>
1. Financial Statements:
                                                                                              Page
         The following  consolidated financial statements of Berkeley Technology
Limited and subsidiaries are included in Item 8:

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

  Consolidated Balance Sheets as of December 31, 2007 and 2006.................................  18

  Consolidated Statements of Operations for the Years Ended
      December 31, 2007 and 2006...............................................................  19

  Consolidated Statements of Cash Flows for the Years Ended
      December 31, 2007 and 2006...............................................................  20

  Consolidated Statements of Changes in Shareholders' Equity for the Years Ended
      December 31, 2007 and 2006...............................................................  22

  Consolidated Statements of Comprehensive Income for the Years Ended
      December 31, 2007 and 2006...............................................................  23

  Notes to the Consolidated Financial Statements...............................................  24

2. Financial Statement Schedules:

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

  Schedule I - Summary of Investments - Other Than Investments in Related
      Parties..................................................................................  55

  Schedule II - Condensed Financial Information of Registrant

      Condensed Balance Sheets as of December 31, 2007 and 2006................................  56

      Condensed Statements of Operations for the Years Ended
          December 31, 2007 and 2006...........................................................  57

      Condensed Statements of Cash Flows for the Years Ended
          December 31, 2007 and 2006...........................................................  58

      Note to Condensed Financial Statements...................................................  59

  Schedule III - Supplementary Insurance Information...........................................  60
</TABLE>

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

                                       51
<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).

                                       52
<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).

                                       53
<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, 2008.

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 55 through 60.

                                       54
<PAGE>

                      SCHEDULE I - SUMMARY OF INVESTMENTS -

                    OTHER THAN INVESTMENTS IN RELATED PARTIES

                  BERKELEY TECHNOLOGY LIMITED AND SUBSIDIARIES

                             As of December 31, 2007
<TABLE>
<CAPTION>
                            Column A                                 Column B         Column C        Column D

                                                                                                       Amount at
                                                                                                      Which Shown
                                                                                                    in Consolidated
                                                                                        Fair            Balance
                       Type of Investments                             Cost (1)        Value           Sheet (2)
--------------------------------------------------------------    --------------   --------------   ---------------
                                                                                  (In thousands)
Fixed maturity securities:
Bonds:

<S>                                                               <C>              <C>              <C>
   United States government and government
     agencies and authorities...................................  $            -   $            -   $             -
   States, municipalities and political subdivisions............               -                -                 -
   Foreign governments..........................................               -                -                 -
   Public utilities.............................................               -                -                 -
   Convertibles and bonds with warrants attached................               -                -                 -
   All other corporate bonds....................................               -                -                 -
Redeemable preferred stock......................................               -                -                 -
                                                                  --------------   --------------   ---------------
Total fixed maturity securities.................................               -                -                 -
                                                                  --------------   --------------   ---------------
                                                                                   --------------
Equity securities:

Non-redeemable preferred stocks.................................           1,984            1,984             1,984
                                                                  --------------   --------------   ---------------
Total equity securities.........................................           1,984   $        1,984             1,984
                                                                  --------------   --------------   ---------------
                                                                                   --------------
Total investments...............................................  $        1,984                    $         1,984
                                                                  --------------                    ---------------
                                                                  --------------                    ---------------
<FN>
(1) Cost  of  fixed   maturity   securities   is  original   cost,   reduced  by other-than-temporary  impairments,
    repayments and adjusted for amortization of  premiums  and  accretion  of  discounts.  Cost of equity  securities
    is original cost, reduced by other-than-temporary impairments.

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


                                       55
<PAGE>

           SCHEDULE II - CONDENSED FINANCIAL INFORMATION OF REGISTRANT

                           BERKELEY TECHNOLOGY LIMITED

                            CONDENSED BALANCE SHEETS
<TABLE>
<CAPTION>
                                                                                             December 31,
                                                                                   --------------------------------
                                                                                        2007              2006
                                                                                   --------------   ---------------
                                                                                  (In thousands, except share amounts)
                                     ASSETS

<S>                                                                                <C>               <C>
Cash and cash equivalents......................................................... $        2,277    $          677
Investment in subsidiaries........................................................        (64,866)          (66,080)
Intercompany balances.............................................................         80,097            82,099
Other assets......................................................................             13                 7
                                                                                   --------------    --------------
Total assets...................................................................... $       17,521    $       16,703
                                                                                   --------------    --------------
                                                                                   --------------    --------------


                      LIABILITIES AND SHAREHOLDERS' EQUITY

Liabilities:

Accounts payable and accruals..................................................... $          381    $          498
Intercompany balances.............................................................            661               282
                                                                                   --------------    --------------
Total liabilities.................................................................          1,042               780
                                                                                   --------------    --------------
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, 2007
   and 2006.......................................................................          3,222             3,222
Additional paid-in capital........................................................         67,789            67,718
Retained earnings.................................................................          8,465             7,999
Employee benefit trusts, at cost (13,522,381 shares as of
   December 31, 2007 and 2006, respectively)......................................        (62,598)          (62,598)
Accumulated other comprehensive loss..............................................           (399)             (418)
                                                                                   --------------    --------------
Total shareholders' equity........................................................         16,479            15,923
                                                                                   --------------    --------------
Total liabilities and shareholders' equity........................................ $       17,521    $       16,703
                                                                                   --------------    --------------
                                                                                   --------------    --------------
</TABLE>






            See accompanying Note to Condensed Financial Statements.

                                       56
<PAGE>


     SCHEDULE II - CONDENSED FINANCIAL INFORMATION OF REGISTRANT (Continued)

                           BERKELEY TECHNOLOGY LIMITED

                       CONDENSED STATEMENTS OF OPERATIONS
<TABLE>
<CAPTION>
                                                                                       Years Ended December 31,
                                                                                   --------------------------------
                                                                                        2007              2006
                                                                                   --------------    --------------
                                                                                            (In thousands)
Revenues:

<S>                                                                                <C>               <C>
Investment income................................................................. $           72    $           31
                                                                                   --------------    --------------
                                                                                               72                31
Expenses:

Staff costs.......................................................................            393               407
Other operating expenses..........................................................            497               733
                                                                                   --------------    --------------
                                                                                              890             1,140
                                                                                   --------------    --------------
Loss before income tax benefit and equity in
   undistributed net income (loss) of subsidiaries................................           (818)           (1,109)

Income tax benefit................................................................              -                 -
                                                                                   --------------    --------------
Loss before equity in undistributed net income (loss) of
   subsidiaries...................................................................           (818)           (1,109)

Equity in undistributed net income (loss) of subsidiaries (1).....................          1,194            (2,574)
                                                                                   --------------    --------------

Net income (loss)................................................................. $          376    $       (3,683)
                                                                                   --------------    --------------
                                                                                   --------------    --------------

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

            See accompanying Note to Condensed Financial Statements.

                                       57
<PAGE>

     SCHEDULE II - CONDENSED FINANCIAL INFORMATION OF REGISTRANT (Continued)

                           BERKELEY TECHNOLOGY LIMITED

                       CONDENSED STATEMENTS OF CASH FLOWS
<TABLE>
<CAPTION>
                                                                                        Years Ended December 31,
                                                                                   --------------------------------
                                                                                        2007              2006
                                                                                   --------------    --------------
                                                                                            (In thousands)
Cash flows from operating activities:

<S>                                                                                <C>               <C>
Net income (loss)................................................................. $          376    $       (3,683)

Adjustments  to  reconcile  net  income  (loss)  to net cash  used in  operating
   activities:

Equity in undistributed net (income) loss of subsidiaries.........................         (1,194)            2,574
Other operating cash flows........................................................             37               256
                                                                                   --------------    --------------
Net cash used in operating activities ............................................           (781)             (853)
                                                                                   --------------    --------------
Cash flows from investing activities:

Net advances from (to) subsidiaries...............................................            255              (181)
                                                                                   --------------    --------------
Net cash provided by (used in) investing activities...............................            255              (181)
                                                                                   --------------    --------------
Cash flows from financing activities:

Repayments from subsidiaries......................................................          2,126             1,403
                                                                                   --------------    --------------
Net cash provided by financing activities ........................................          2,126             1,403
                                                                                   --------------    --------------

Net increase in cash and cash equivalents.........................................          1,600               369
Cash and cash equivalents at beginning of year....................................            677               308
                                                                                   --------------    --------------
Cash and cash equivalents at end of year.......................................... $        2,277    $          677
                                                                                   --------------    --------------
                                                                                   --------------    --------------
</TABLE>






            See accompanying Note to Condensed Financial Statements.

                                       58
<PAGE>

     SCHEDULE II - CONDENSED FINANCIAL INFORMATION OF REGISTRANT (Continued)

                           BERKELEY TECHNOLOGY LIMITED

                     NOTE TO CONDENSED FINANCIAL STATEMENTS

Note 1.    Basis of Presentation and Significant Accounting Policies

       The accompanying  financial statements comprise a condensed  presentation
of  financial  position,  results  of  operations  and cash  flows  of  Berkeley
Technology  Limited (the "Company") on a separate company basis. These condensed
financial statements do not include the accounts of the Company's  subsidiaries,
but instead include the Company's  investment in those  subsidiaries,  stated at
amounts which are equal to the Company's equity in the subsidiaries' net assets.
The  consolidated  financial  statements of the Company and its subsidiaries are
included in Item 8 of this Form 10-K for the year ended December 31, 2007.

       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,
2007.



                                       59
<PAGE>

               SCHEDULE III - SUPPLEMENTARY INSURANCE INFORMATION

                  BERKELEY TECHNOLOGY LIMITED AND SUBSIDIARIES

                      Life Insurance and Annuities Segment
<TABLE>
<CAPTION>

                                                                                     Years Ended/As of December 31,
                                                                                    --------------------------------
                                                                                        2007             2006
                                                                                    --------------    --------------
                                                                                             (In thousands)


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


Future policy benefits, losses, claims and loss expenses (1) ......................           141             3,640


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


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


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


Net investment income (3)..........................................................           578               936


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


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


Other operating expenses...........................................................           506               689


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




_______________
<FN>
(1) For additional  disclosure regarding life insurance policy liabilities,  see Note 6 to the Consolidated  Financial
    Statements in Item 8 of this Form 10-K for the year ended December 31, 2007.

(2) Insurance policy charges.

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

                                       60
<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, 2008                                   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, 2008               Arthur I. Trueger
                                    Executive Chairman
                                    (Principal Executive Officer)



                                    /s/  Ian K. Whitehead

Date:  March 31, 2008               Ian K. Whitehead
                                    Chief Financial Officer
                                    (Principal Financial and Accounting Officer)



                                    /s/  Victor A. Hebert

Date:  March 31, 2008               Victor A. Hebert
                                    Deputy Chairman and Non-Executive Director



                                    /s/  Harold E. Hughes, Jr.

Date:  March 31, 2008               Harold E. Hughes, Jr.
                                    Non-Executive Director



                                    /s/  Trenchard

Date:  March 31, 2008               The Viscount Trenchard
                                    Non-Executive Director



                                       61
<PAGE>

                  BERKELEY TECHNOLOGY LIMITED AND SUBSIDIARIES

                EXHIBIT INDEX FOR THE ANNUAL REPORT ON FORM 10-K

                      FOR THE YEAR ENDED DECEMBER 31, 2007

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

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

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

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

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

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

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

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

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

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

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

                                       62
<PAGE>

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

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

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

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

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

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

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

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

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

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

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

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

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<PAGE>

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

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

14.1              Code of Ethics as amended and restated as of December 2007.

21                Subsidiaries of the Company as of March 31, 2008.

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

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

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

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


____________

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

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