IFRS Restatements

Avon Rubber PLC
11 May 2006



                                                                     11 May 2006

                                Avon Rubber p.l.c.

                                IFRS Restatements

Avon Rubber p.l.c. will be reporting its financial results in accordance with
International Financial Reporting Standards (IFRS), as adopted by the European
Union, for accounting periods beginning on or after 1 October 2005.

This statement summarises and explains the unaudited, consolidated IFRS results
of Avon Rubber p.l.c. for the half year ended 31 March 2005 and full year ended
September 2005 as converted from UK Generally Accepted Accounting Principles
('UK GAAP'), published in May 2005 and December 2005 respectively. Full details
can be found on our website at http://www.avon-rubber.com/corporate/reports/
ifrs.pdf.

Avon Rubber p.l.c. will publish its 2006 Interim Report and Annual Report and
Accounts in accordance with IFRS.

Overview of impact

   • No impact on cashflow or revenue recognition.

   • Reported losses after tax and basic loss per share increased compared to
     UK GAAP for the year ended 30 September 2005.

   • Net assets reduced due to the impact of the revaluation of the Group's
     UK properties under IFRS 1.

   • Positive impact on net assets resulting from the capitalisation of
     development costs under IAS 38.


                                        Half year ended            Year ended
                                         31 March 2005         30 September 2005
                                       IFRS     UK GAAP        IFRS      UK GAAP
                                      £'000       £'000       £'000        £'000
________________________________________________________________________________
Total operating profit before
 Goodwill and exceptional items       2,333       3,050       6,183        7,524

Total operating profit/(loss)*          401         772      (1,975)      (1,325)

(Loss)/profit before tax               (160)        209      (3,364)      (2,825)

Loss per share                         (4.6)p      (1.5)p     (19.1)p      (14.1)p

Equity Shareholders funds            58,335      66,987      46,934       55,578


*UK GAAP numbers include a share of the operating profit of the joint venture.


                                                     Explanation  Half year Year
                                               Note     ended 31        ended 30
                                                           March       September
                                                            2005            2005
Reconciliation of total operating profit/(loss)            £'000           £'000
________________________________________________________________________________
As per UK GAAP                                               772          (1,325)
2005 development costs now capitalised           4           277             643
Amortisation and impairment of
 development costs and other intangibles         4          (323)         (1,244)
Goodwill amortisation                            1           348             802
Share options                                    2          (802)         (1,002)
Reduced depreciation on revalued assets          3           131             262
Share of profits of joint venture                             (2)           (111)
________________________________________________________________________________
As per IFRS                                                  401          (1,975)
________________________________________________________________________________

Reconciliation of equity shareholders funds
As per UK GAAP                                            66,987          55,578
Development costs and other intangibles          4         2,179           1,625
Goodwill amortisation                            1           348             802
2005 dividend proposed not yet paid              5         1,003           1,315
Revaluation of fixed assets                      3       (11,780)        (11,649)
Deferred tax adjustment                          9          (402)           (737)
________________________________________________________________________________
As per IFRS                                               58,335          46,934
________________________________________________________________________________


Basis of preparation

The unaudited financial information included in this statement has been prepared
on the basis of the recognition and measurement requirements of IFRS and IAS in
issue that either are adopted by the EU and will be effective (or available for
early adoption) at 30 September 2006 or are expected to be adopted and effective
(or available for early adoption) at 30 September 2006, the Group's first annual
reporting date at which it is required to use accounting standards adopted by
the EU. Based on these recognition and measurement requirements, management has
made assumptions about the accounting policies expected to be applied when the
first annual financial statements are prepared in accordance with accounting
standards adopted by the EU for the year ending 30 September 2006.

At this stage in the development of IFRS, matters such as the interpretation and
application surrounding it are continuing to evolve. In addition, IFRS currently
in issue and endorsed by the EU are subject to interpretation by IFRIC
(International Financial Reporting Interpretations Committee) and further
Standards may be issued by the IASB (International Accounting Standards Board)
that will be endorsed by September 2006.

Accordingly, the accounting policies for 2006 will only finally be determined
when the annual financial statements are prepared for the year ending 30
September 2006. These uncertainties could result in the need to change the basis
of accounting or presentation of certain financial information from that
presented in this document.

The financial information included within this document is unaudited and does
not comprise statutory accounts within the meaning of Section 240 of the
Companies Act 1985. The statutory accounts for the year ended 30 September 2005
have been filed with the Registrar of Companies. The format of the income
statement is for illustrative purposes only and is not the format that will be
used in the financial statements for the year ended 30 September 2006.

IFRS 1 exemptions

IFRS 1 First-time adoption of International Financial Reporting Standards sets
out the procedures the Group must follow when it adopts IFRS for the first time
as the basis for preparing the consolidated financial statements. The Group is
required to determine its IFRS accounting policies and apply these
retrospectively to determine its opening balance sheet under IFRS as at 1
October 2004. The standard allows a number of exceptions to this general
principle to assist groups in their transition to reporting under IFRS.

The Group will take the following exemptions:

Business combinations: business combinations prior to 1 October 2004 will not be
restated. This includes the exemption not to apply IAS 21 The Effects of Changes
in Foreign Exchange Rates to goodwill arising from these business combinations.
As a result goodwill arising from acquisitions that occurred prior to the
transition date will remain as stated under UK GAAP. IFRS 3 Business
Combinations will be applied prospectively from 1 October 2004.

Freehold property - Fair value as deemed cost: under the options available
within IFRS 1 the Group has chosen to measure certain of its freehold properties
on a fair value basis and adopt this valuation as deemed cost as at the date of
transition, 1 October 2004. The valuation was undertaken by DTZ Debenham Tie
Leung Limited, Chartered Surveyors.

Share-based payments: the Group has applied IFRS 2 Share-based Payment
retrospectively to equity-settled awards made after 7 November 2002 that had not
vested at 1 January 2005.

Financial instruments: the Group has chosen to take advantage of the one year
exemption of financial instruments standards - IAS 32 Financial Instruments:
Disclosure and Presentation and IAS 39 Financial Instruments: Recognition and
Measurement. As a result, the IFRS restated figures for the year to 30 September
2005 continue to account for financial instruments in accordance with UK GAAP.
The Group has adopted these standards prospectively from 30 September 2005.
There is not expected to be a significant impact as a result of adopting these
standards.

Cumulative translation differences: IAS 21 The Effects of Changes in Foreign
Exchange Rates requires annual translation differences arising on the opening
net assets and net profit or loss of each foreign subsidiary to be treated as a
separate component of shareholders' equity, and the cumulative net surplus /
deficit for each subsidiary carried forward and added to / subtracted from any
gains / losses on the future disposal of that subsidiary. The Group has taken
the option to set these cumulative gains / losses at zero as at the date of
transition to IFRS. Any gains and losses recognised in the income statement on
subsequent disposals of foreign operations will therefore include only those
translation differences arising after 1 October 2004, the IFRS transition date.


Explanation of key IFRS adjustments

1.  Under UK GAAP, goodwill on businesses acquired by the Group on or after 
    3 October 1998 is capitalised and amortised on a straight line basis over
    its useful economic life. Under IFRS, from 1 October 2004 onwards, goodwill
    will no longer be amortised, but will instead be subject to annual impairment
    reviews. All goodwill was tested for impairment at the transition date with no
    adjustment necessary on transition from UK GAAP to IFRS. Where goodwill is
    deductible for tax purposes in the relevant jurisdiction, a temporary difference
    arises and consequently a related deferred tax liability has been recognised
    under IFRS.

2.  Under UK GAAP, Avon Rubber p.l.c. recognises as an expense the intrinsic 
    value at the date of the award, of options granted under the Performance 
    Share Plan 2002 accrued over the vesting period to the extent that
    they are projected to vest. No expense is recognised for Sharesave option
    schemes for which UK GAAP recognises an exemption. Under IFRS the cost of all
    share-based payments, based on the fair values of the options or shares at the
    date of grant and calculated using an appropriate model, is recognised over the
    vesting period of the award. The Group has used the Black-Scholes model to value
    equity instruments. Under IFRS 2, a deferred tax asset is calculated in respect
    of future anticipated tax relief under Schedule 23 FA 2003. Due to the deferred
    tax position of the group, this deferred tax asset has not been recognised in
    the IFRS accounts.

3.  Under the options available under IFRS 1 the company has chosen to measure 
    its United Kingdom freehold properties on a fair value basis and adopt this 
    valuation as deemed cost as at the date of transition, 1 October 2004. 
    This valuation was undertaken by DTZ Debenham Tie Leung Limited. This has
    also resulted in a lower depreciation charge. The change in valuation has led to
    an increase in the deferred tax asset, both in 2004 and 2005. Due to the
    deferred tax position of the group, this increased asset has been recognised in
    part in 2004, but the entry reversed in the 2005 profit and loss account so that
    no further deferred tax asset is recognised in the 2005 balance sheet.

4.  Under IAS 38 'Intangible Assets', the company is required to capitalise the 
    cost of developments which meet certain recognition criteria, including the 
    technical feasibility of, and probable future economic benefit arising from,
    the project. This expenditure is then amortised over the anticipated future 
    life of the economic benefits arising and is subject to ongoing impairment 
    reviews. Whereas SSAP13 permits an entity either to recognise development 
    expenditure that meets the conditions for recognition as an asset or
    to write it off to the profit and loss account, IAS 38 does not permit a choice.
    If the development expenditure meets the recognition criteria it must be
    capitalised. As the development costs have historically been treated as a
    deductible, current year expense for tax purposes in the relevant jurisdictions,
    a temporary difference arises and a deferred tax liability is created under
    IFRS.

5.  Under UK GAAP dividends relating to an accounting period but declared after 
    the balance sheet date were recognised as a liability even if the
    approval of that dividend took place after the balance sheet date. Under IFRS,
    proposed dividends do not meet the definition of a liability until such time as
    they have been declared, and in the case of the final dividend, approved by
    shareholders at the Annual General Meeting.

6.  Under UK GAAP the company had already adopted FRS 17 'Retirement Benefits'.
    Under FRS 17, scheme assets are measured using market values while liabilities 
    are measured using the projected unit method. The operating and financing 
    costs of defined benefit pension schemes are recognised in the profit and 
    loss account as operating costs and finance costs respectively. Variations 
    from expected costs arising from the experience of the plans to changes in 
    actuarial assumptions are recognised immediately in the Statement of Total 
    Recognised Gains and Losses.

    The change to IAS 19 'Employee Benefits' does not give rise to any significant
    change in the basis of accounting for pensions, as Avon Rubber p.l.c. will adopt
    the option allowed under IAS 19 to take actuarial gains and losses immediately
    and directly to equity through the Statement of Recognised Income and Expense.
    Changes are largely confined to presentation, in that retirement benefit scheme
    surpluses and deficits must be aggregated separately on the face of the balance
    sheet and shown gross, rather than net, of deferred taxation.

7.  Under IFRS 3, the UK GAAP goodwill arising on the ISI acquisition has been 
    analysed into further intangible assets, namely patents and distribution 
    network. Under IAS 12, no initial recognition exemption is available in 
    respect of these intangible assets as they arise as a result of a business 
    combination. Deferred tax is therefore provided on these intangible
    assets. Goodwill is then adjusted by the amount of deferred tax so that the
    total acquisition cost remains unchanged, and there is therefore no impact on
    the 2005 profit and loss account.

8.  Under UK GAAP computer software costs were capitalised and included within 
    tangible assets. Under IAS 38 computer software costs are now classified as 
    intangible assets.

9.  Other than the adjustments to deferred taxation arising from the IFRS 
    adjustments described in paragraphs 1 - 7 above, there are no significant 
    adjustments to either current or deferred tax resulting from the change from 
    UK GAAP to IAS 12.

                                    < ends >

Contact Information:

Avon Rubber p.l.c.                                                  01225 896831
Terry Stead, Chief Executive                                         As from 1pm
Peter Slabbert, Finance Director

Weber Shandwick Square Mile
Richard Hews / Rachel Taylor / Stephanie Badjonat                  020 7067 0700


NOTES TO EDITORS: Avon Rubber p.l.c. is an international polymer engineering
group adding value through material, manufacturing and industry sector
expertise. The Group is currently capitalised at approximately £58 million.

Avon is a significant supplier to the world's automotive, engineering, dairy and
defence markets - manufacturing high performance elastomer products.




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