INTERNATIONAL FINANCIAL REPORTING STANDARDS (IFRS) RESTATEMENT INFORMATION

Transition to IFRS
Games Workshop Group PLC reported under UK GAAP in its previously published financial statements for the year ended 29 May 2005. The following reconciliations of net assets and profit show the differences between figures presented under UK GAAP and IFRS.

Transitional arrangements
Application of IFRS 1
The Group's financial statements for the year ending 28 May 2006 will be the Group's first annual financial statements reported under IFRS. These interim financial statements have been prepared as described in note 1. The Group has applied IFRS 1 in preparing these consolidated interim financial statements.

Games Workshop Group PLC's transition date is 31 May 2004. The Group prepared its opening IFRS balance sheet at that date. The Group's IFRS adoption date is 30 May 2005.

On transition to IFRS, an entity is generally required to apply IFRS retrospectively, except where an exemption is available under IFRS 1 'First-time Adoption of International Financial Reporting Standards'. The Group has applied the mandatory exemptions and certain of the optional exemptions from full retrospective application of IFRS.

The following is a summary of the key elections from IFRS 1 that were made by the Group:

Business combinations exemption
The Group has elected to adopt the IFRS exemption in relation to business combinations and will only apply IFRS 3 'Business Combinations' prospectively from 31 May 2004. As a result, the balance of the goodwill recognised under UK GAAP at 30 May 2004 will be deemed the cost at 31 May 2004.

Cumulative foreign currency translation differences exemption
The Group has elected to set the foreign currency translation differences reserve to nil at 31 May 2004.

Share-based payment transaction exemption
The Group has elected to apply the share-based payment exemption. IFRS 2 has been applied from 31 May 2004 to those options that were issued after 7 November 2002 and had not vested by 30 May 2005.

Application of IAS 39
Hedge accounting
The Group has adopted IAS 39 at its transition date and applied hedge accounting from 31 May 2004 for all transactions where the hedge relationship meets all the hedge accounting criteria under IAS 39. It has also adopted the amendment to IAS 39 ‘Cash Flow Hedge Accounting of Forecast Intra-Group Transactions’ from the transition date.

Summary reconciliation of net assets and operating profit under UK GAAP to IFRS
The following reconciliations provide a quantification of the effect of the transition to IFRS.

The first analysis shows a summary reconciliation of operating profit for the period to 28 November 2004 and 29 May 2005 as reported under UK GAAP to the revised operating profit reported under IFRS.

	Notes	Six months to 28 November 2004 £000	Year to 29 May 2005 £000
Operating profit reported under UK GAAP		7,864	13,893
Capitalisation of development expenditure	1.1	116	294
Recognition of employee benefit liabilities	1.2	(180)	(95)
Write back of goodwill amortisation	1.3	192	379
Share-based payment	1.4	(3)	(170)
Derivatives not qualifying for hedge accounting/hedge ineffectiveness	1.5	(97)	(68)
Other adjustments		(18)	35
Operating profit reported under IFRS		7,874	14,268

The analysis below shows a summary reconciliation of net assets reported under UK GAAP as at 30 May 2004, 28 November 2004 and 29 May 2005 to the revised net assets under IFRS.

	Notes	As at 30 May 2004 £000	As at 28 November 2004 £000	As at 29 May 2005 £000
Net assets reported under UK GAAP		34,104	38,675	38,073
Capitalisation of development expenditure	1.1	1,721	1,838	2,014
Recognition of employee benefit liabilities	1.2	(647)	(833)	(732)
Write back of goodwill amortisation	1.3	-	192	383
Derivatives not qualifying for hedge accounting/hedge ineffectiveness	1.5	112	15	44
Derivatives recognised and measured at fair value relating to future transactions	1.6	616	(272)	330
Deferred recognition of lease incentives/payments	1.7	(236)	(247)	(218)
Dividend recognition	1.8	4,290	1,523	4,357
Other adjustments		(205)	(217)	(201)
Tax effect of the above adjustments	1.9	(374)	137	(309)
Net assets reported under IFRS		39,381	40,811	43,741

Notes to the above reconciliations are shown below:

1.1 Capitalisation of development expenditure
The adoption of IAS 38 'Intangible Assets' resulted in the capitalisation of certain costs relating to the design and development of core tabletop wargaming product.

1.2 Employee benefit liabilities
IAS 19 'Employee Benefits' requires the recognition of liabilities relating to holiday pay and long service benefits (i.e. the 10 Year Veterans holiday scheme) not previously recognised, in line with common practice, under UK GAAP.

1.3 Goodwill
Under IFRS 3 'Business Combinations' goodwill is no longer amortised on a straight line basis but is instead subject to annual impairment reviews. The transition to IFRS therefore resulted in the write back of goodwill previously amortised since the transition date.

1.4 Share-based payment
Adoption of IFRS 2 'Share-based Payment' requires the assignment of fair values at the date of grant to the sharesave options granted to employees after 7 November 2002 which had not vested by 30 May 2005. The expense is spread over the vesting period of those options.

1.5 Derivatives not qualifying for hedge accounting/hedge ineffectiveness
IAS 39 'Financial Instruments: Recognition and Measurement' requires the recognition of the fair value of forward foreign currency contracts that are in place at the balance sheet date to hedge future transactions. Where the designated forecast transaction is expected to fall below the value of the hedging instrument, an element of hedge ineffectiveness arises. Where hedge ineffectiveness arises or where the forward contracts in place do not meet the requirements of IAS 39 for hedge accounting to be applied, the movement in the related fair values is taken to the income statement.

1.6 Fair value of derivatives that are in place to hedge future transactions
IAS 39 permits hedge accounting for forward foreign currency contracts designated as cash flow hedges of highly probable forecast transactions. The effective portion of the fair value of derivatives accumulate in equity (hedging reserve) until the hedged item affects the income statement in future periods.

1.7 Recognition of lease incentives/payments
The adoption of IAS 17 'Leases' requires any benefits received as an incentive to sign a lease to be charged on a straight line basis over the entire lease term rather than the period up to the first market rent review, as under UK GAAP. This resulted in the deferred element of lease incentives received being spread over a longer period.

1.8 Recognition of dividends
IAS 10 'Events after the Balance Sheet Date' requires that dividends should only be recognised when approved by shareholders. Hence, under IFRS, the final proposed dividend has been recognised in the following financial year. Under UK GAAP, dividends are recognised in the period to which they relate.

1.9 Deferred and current income taxes
The principles of IAS 12 'Income Taxes' have been applied to the adjustments made on the adoption of IFRS. Deferred tax is accounted for using the balance sheet liability method in respect of temporary differences between the carrying amount in the balance sheet and the corresponding tax basis used in the computation of taxable profit.

Detailed reconciliations between UK GAAP and IFRS
The following six reconciliations provide full details of the impact of the IFRS transition on:

- net income for the period to 28 November 2004 and for the year to 29 May 2005;
- equity at 30 May 2004, 28 November 2004 and 29 May 2005;
- reconciliation of the consolidated cash flow statement.

Reconciliation of net income for the period to 28 November 2004

	Notes	UK GAAP to 28 November 2004 £000	Effect of transition to IFRS £000	IFRS to 28 November 2004 £000
Revenue		70,972	-	70,972
Cost of sales	2.1	(20,871)	(47)	(20,918)
Gross profit		50,101	(47)	50,054
Net operating expenses	2.2	(42,237)	57	(42,180)
Operating profit		7,864	10	7,874
Finance income		71	-	71
Finance costs		(266)	-	(266)
Profit before taxation		7,669	10	7,679
Income tax expense	2.3	(2,837)	227	(2,610)
Profit for the period		4,832	237	5,069

Reconciliation of net income for the year to 29 May 2005

	Notes	UK GAAP to 29 May 2005 £000	Effect of transition to IFRS £000	IFRS to 29 May 2005 £000
Revenue		136,647	-	136,647
Cost of sales	2.1	(42,071)	(55)	(42,126)
Gross profit		94,576	(55)	94,521
Net operating expenses	2.2	(80,683)	430	(80,253)
Operating profit		13,893	375	14,268
Finance income		153	-	153
Finance costs		(538)	-	(538)
Profit before taxation		13,508	375	13,883
Income tax expense	2.3	(4,863)	(26)	(4,889)
Profit for the year		8,645	349	8,994

Notes to the above reconciliations of net income are shown below:

2.1 Cost of sales

	Six months to 28 November 2004 £000	Year to 29 May 2005 £000
IAS 39 'Financial Instruments: Recognition and Measurement' requires movements in the fair value of forward foreign currency contracts relating to forecast transactions that do not qualify for hedge accounting, or include an element of ineffectiveness, to be taken to the income statement.	(47)	(55)

2.2 Net operating expenses

	Six months to 28 November 2004 £000	Year to 29 May 2005 £000
IAS 38 'Intangible Assets' requires the capitalisation of development expenditure that meets certain criteria. These amounts were previously written off as incurred.	116	294
IAS 39 'Financial Instruments: Recognition and Measurement' requires movements in the fair value of forward foreign currency contracts that relate to a recognised asset to be taken to the income statement.	(50)	(13)
IAS 19 'Employee Benefits' requires an accrual to be made for the holiday pay and the expected cost of providing one off benefits to employees who reach 10 years service (10 Year Veterans).	(180)	(95)
IFRS 3 'Business Combinations' removes the requirement to amortise goodwill, and requires the write back of amortisation charged since the transition date.	192	379
IFRS 2 'Share-based Payment' requires the recognition of the fair value of share based payments to be reflected in the income statement over the period that the related services are received.	(3)	(170)
Other adjustments	(18)	35
	57	430

2.3 Income tax expense

	Six months to 28 November 2004 £000	Year to 29 May 2005 £000
IAS 12 'Income Taxes' requires deferred tax to be recognised on temporary differences between the tax computation and balance sheet. It was previously recognised on timing differences between taxable profits and results as stated in the financial statements.	189	19
The effect on taxation of the other IFRS adjustments to the income statement	38	(45)
	227	(26)

Reconciliation of equity at 30 May 2004

	Notes	UK GAAP as at 30 May 2004 £000	Effect of transition to IFRS £000	IFRS as at 30 May 2004 £000
Non-current assets
Goodwill	3.1	2,463	-	2,463
Other intangible assets	3.2	-	3,192	3,192
Property, plant and equipment	3.3	25,627	(1,616)	24,011
Other receivables		267	-	267
Deferred income tax assets	3.4	1,848	(374)	1,474
		30,205	1,202	31,407
Current assets
Inventories		12,102	-	12,102
Trade and other receivables	3.5	11,497	387	11,884
Derivative financial instruments	3.6	-	948	948
Cash and cash equivalents	3.7	8,570	(405)	8,165
		32,169	930	33,099
Total assets		62,374	2,132	64,506
Current liabilities
Financial liabilities	3.6	(161)	(2)	(163)
Trade and other payables	3.8	(23,736)	3,601	(20,135)
Current income tax liabilities		(2,661)	-	(2,661)
Provisions	3.9	-	(95)	(95)
		(26,558)	3,504	(23,054)
Net current assets		5,611	4,434	10,045
Non-current liabilities
Financial liabilities		(204)	-	(204)
Other non-current liabilities		(584)	-	(584)
Provisions	3.10	(924)	(359)	(1,283)
		(1,712)	(359)	(2,071)
Net assets		34,104	5,277	39,381
Capital and reserves
Called up share capital		1,542	-	1,542
Share premium		5,251	-	5,251
Other reserves	3.11	101	431	532
Retained earnings		27,210	4,846	32,056
Total equity		34,104	5,277	39,381

Reconciliation of equity at 28 November 2004

	Notes	UK GAAP as at 28 November 2004 £000	Effect of transition to IFRS £000	IFRS as at 28 November 2004 £000
Non-current assets
Goodwill	3.1	2,245	192	2,437
Other intangible assets	3.2	-	3,570	3,570
Property, plant and equipment	3.3	28,131	(1,899)	26,232
Other receivables		274	-	274
Deferred income tax assets	3.4	2,139	137	2,276
		32,789	2,000	34,789
Current assets
Inventories		14,965	-	14,965
Trade and other receivables	3.5	16,563	199	16,762
Derivative financial instruments	3.6	-	174	174
Cash and cash equivalents	3.7	8,799	12	8,811
		40,327	385	40,712
Total assets		73,116	2,385	75,501
Current liabilities
Financial liabilities	3.6	(120)	(439)	(559)
Trade and other payables	3.8	(21,587)	742	(20,845)
Current income tax liabilities		(2,744)	-	(2,744)
Provisions	3.9	-	(133)	(133)
		(24,451)	170	(24,281)
Net current assets		15,876	555	16,431
Non-current liabilities
Financial liabilities		(9,172)	-	(9,172)
Other non-current liabilities		(360)	-	(360)
Provisions	3.10	(458)	(419)	(877)
		(9,990)	(419)	(10,409)
Net assets		38,675	2,136	40,811
Capital and reserves
Called up share capital		1,550	-	1,550
Share premium		6,272	-	6,272
Other reserves	3.11	101	273	374
Retained earnings		30,752	1,863	32,615
Total equity		38,675	2,136	40,811

Reconciliation of equity at 29 May 2005

	Notes	UK GAAP as at 29 May 2005 £000	Effect of transition to IFRS £000	IFRS as at 29 May 2005 £000
Non-current assets
Goodwill	3.1	2,085	383	2,468
Other intangible assets	3.2	-	3,995	3,995
Property, plant and equipment	3.3	31,049	(2,076)	28,973
Other receivables		398	-	398
Deferred income tax assets	3.4	2,487	(309)	2,178
		36,019	1,993	38,012
Current assets
Inventories		12,838	-	12,838
Trade and other receivables	3.5	10,155	195	10,350
Derivative financial instruments	3.6	-	476	476
Cash and cash equivalents	3.7	8,610	12	8,622
		31,603	683	32,286
Total assets		67,622	2,676	70,298
Current liabilities
Financial liabilities	3.6	(143)	(109)	(252)
Trade and other payables	3.8	(21,692)	3,671	(18,021)
Current income tax liabilities		(1,698)	-	(1,698)
Provisions	3.9	-	(322)	(322)
		(23,533)	3,240	(20,293)
Net current assets		8,070	3,923	11,993
Non-current liabilities
Financial liabilities		(5,038)	-	(5,038)
Other non-current liabilities		(345)	-	(345)
Provisions	3.10	(633)	(248)	(881)
		(6,016)	(248)	(6,264)
Net assets		38,073	5,668	43,741
Capital and reserves
Called up share capital		1,553	-	1,553
Share premium		6,542	-	6,542
Other reserves	3.11	101	718	819
Retained earnings		29,877	4,950	34,827
Total equity		38,073	5,668	43,741

Notes to the above reconciliations of equity are shown below:

3.1 Goodwill

	As at 30 May 2004 £000	As at 28 November 2004 £000	As at 29 May 2005 £000
IFRS 3 'Business Combinations' removes the requirement to amortise goodwill and requires the write back of amortisation charged since the transition date.	-	192	383

3.2 Other intangible assets

	As at 30 May 2004 £000	As at 28 November 2004 £000	As at 29 May 2005 £000
IAS 38 'Intangible Assets' requires computer software to be classified as an intangible asset.	1,471	1,732	1,981
IAS 38 'Intangible Assets' requires the capitalisation of development expenditure that meets certain criteria. These amounts were previously written off as incurred.	1,721	1,838	2,014
	3,192	3,570	3,995

3.3 Property, plant and equipment

As at 30 May 2004 £000

As at 28 November 2004 £000

As at 29 May 2005