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Consolidated income statement

for the year ended 31 March 2008

All the above figures relate to continuing operations.

Consolidated balance sheet

At 31 March 2008

Consolidated cash flow statement

For the year ended 31 March 2008

Consolidated statement of recognised income and expense

For the year ended 31 March 2008

Notes for the year ended 31 March 2008

1 The financial information has been prepared using the accounting policies set out in the Interim Report.

2 This summary of results does not constitute the statutory financial statements for the year ended 31 March 2008. The financial statements have not yet been delivered to the Registrar of Companies, nor have the auditors yet reported on them. The statutory accounts for the year ended 31 March 2008 will be finalised on the basis of the financial information presented by the directors in this preliminary announcement and will be delivered to the Registrar of Companies. The financial information for the year ended 31 March 2007 has been extracted from the full report and statements which were prepared under UK GAAP and converted to International Financial Reporting Standards (IFRS) as adopted by the European Union. Those accounts were filed with the Registrar of Companies. The auditors reported on those accounts; their report was unqualified and did not contain a statement under s.237 (2) or (3) Companies Act 1985.

3 Transition to IFRS - the board have closely reviewed the financial statements and do not believe there to be any effect on the income statement or balance sheet items from the point of transition (1 April 2006) to the balance sheet date of the transition to IFRS. The board have identified two areas where the treatment under IFRS will be different to the policy previously employed:

- Freehold land and buildings were held at a 1997 valuation under the transitional provision of FRS 15 "Tangible fixed assets". This revalued amount has been deemed to be the cost under the transitional provisions of IFRS 1. As a result there has been no adjustment to the carrying value of the amount previously reported under FRS 15 "Tangible fixed assets". The revaluation reserve has been transferred into the profit and loss reserve.

- The Group uses foreign currency swaps to manage its foreign currency exposure. These instruments should be recognised at fair value under IAS 39. There were no instruments in effect at the transition date, or at 31 March 2007. At 31 March 2008 the fair value of these swaps was £13,000. This was considered immaterial by the directors and has not been reflected in the financial statements.

4 Total continuing turnover includes turnover generated in the United Kingdom of £49.3 million (2007:£44.7 million) and export sales of £0.6.million (2007: £0.6 million). All profit is generated from activities located in the United Kingdom.

5 The profit per ordinary share has been calculated on 23,889,000 ordinary shares (2007: 23,889,000) being the weighted average number of shares in issue during the period. The diluted earnings per share has been calculated on 25,425,000 ordinary shares (2007: 25,427,000) after adjusting the weighted average number of shares in issue during the period by the shares options in existence during the period.

Airsprung Furniture Group PLC

28 March 2008

The Directors are pleased to announce that the Company has resumed interest payments on its Preference Shares. The trading year ends on 31st March 2008 and current indications are that group sales and operating profits will be ahead of the previous year.

Airsprung Furniture Group PLC

13 January 2008

Airsprung Furniture Group PLC, the supplier of manufactured and imported furniture, announces that it was informed on 11 January 2008 that, as a result of recent acquisitions of shares by High Street Investors LP ("HSI"), an undertaking indirectly controlled by Kenneth M Karmin, Mr Karmin now holds an aggregate of 1,030,000 ordinary shares of 10p each in the company, representing approximately 4.31% of the company's issued share capital and approximately 4.2% of its total voting shares. The notification states that HSI is controlled by High Street Holdings Inc ("HSH") and that Mr Karmin controls HSH.

AIRSPRUNG FURNITURE GROUP PLC

Interim Report and Accounts September 2007

Chairman’s statement

I am pleased to report that the progress reported at the AGM in September has continued. Sales for the six months ended 30 September 2007 increased by 18% to £24.9 million (2006: £21.1 million). Profit on ordinary activities before taxation rose to £419,000 (2006: £347,000), an increase of 21%. Group cash balances at the half-year end were £2,662,000 (2006: £709,000).
All divisions contributed to this further improvement, with the exception of Cavendish, our upholstered furniture operation based in Chorley, which continues to be under pressure due to weakness in its sector. The Group intends to deliver increasing shareholder value from the Cavendish site by introducing selected bed manufacturing, foam conversion and distribution operations closer to our markets in the north of England.
The Group has received outline planning permission for Phase 1 of the proposed Brick Lane Business Park adjacent to our main manufacturing site in Trowbridge. The directors are now in a position to review in detail the costs and benefits of various options for developing the central area of this site.
A report has been received from the pension scheme actuary showing a further significant reduction in the scheme’s deficit from the £6.2 million reported last year end to £4.4 million at the end of the period. Whilst such valuations are always liable to fluctuate, steps are being taken to mitigate investment risk in the light of possible weaknesses in international equity markets.
Subject to trading results continuing to improve, the Group’s distributable reserves are expected to rise within the foreseeable future to a point where dividend payments can be resumed. As a first step, the board is planning to redeem the preference shares next year with their full entitlement to accrued interest.
The uncertainty in financial markets caused a temporary slowdown in sales in the early autumn, but the Group’s competitive position in its core activities is strong and there are signs that the normal seasonal trading pattern has been resumed. Although certain raw material prices are now rising, the Group continues to find efficiencies in both purchasing and manufacturing operations. Barring unforeseen circumstances, the directors expect the year end results will be satisfactory.

Stuart Lyons CBE
Chairman
6 December 2007

Consolidated income statement unaudited

All the above figures relate to continuing operations.

Consolidated balance sheet unaudited

Consolidated cash flow statement unaudited

Consolidated statement of recognised income and expense

Notes to the financial statements

1. Basis of preparation
1.1 The interim financial information has not been audited and does not constitute statutory accounts within the meaning of Section 240 of the Companies Act 1985. The Group’s statutory accounts for the year ended 31March 2007, prepared under United Kingdom Generally Accepted Accounting Principles (UK GAAP), have been delivered to the Registrar of Companies; the report of the Auditors on these accounts was unqualified and did not contain a statement under Section 237 (2) or (3) of the Companies Act 1985.

1.2 Prior to 31 March 2007 the Group prepared its audited financial statements under UK GAAP. For the year ending 31March 2008 the Group is required to prepare its annual consolidated financial statements in accordance with accounting standards adopted for use in the European Union (International Financial Reporting Standards (IFRS)).
These interim financial statements have been prepared in accordance with the accounting policies set out below, taking into account the requirements and options in IFRS 1 ‘First-time adoption of International Financial Reporting Standards’. The Group has not adopted the reporting requirements of International Accounting Standard (IAS) 34 ‘Interim Financial Reporting’. The transition date for the Group’s application of IFRS is 1 April 2006 and the comparative figures for 30 September 2006 and 31 March 2007 have been restated accordingly. Reconciliations of the income statement (previously the profit and loss account) and the balance sheet from previously reported UK GAAP to IFRS are shown in note 6.
The interim financial statements have been prepared on the historic cost basis, except that derivative financial instruments are stated at their fair value.
2. Accounting policies
The accounting policies which follow set out those policies which are expected to apply in preparing the financial statements for the year ending 31 March 2008. These policies have been followed in producing these interim statements.
2.1 Basis of consolidation
The consolidated financial statements incorporate the financial statements of Airsprung Furniture Group PLC and its subsidiaries.
The Group has elected not to apply IFRS 3 Business Combinations retrospectively to business combinations prior to the date of transition.
Accordingly the classification of the combination (acquisition, reverse acquisition or merger) remains unchanged from that used under UK GAAP. Assets and liabilities are recognised at date of transition as if they would be recognised under IFRS, and are measured using their UK GAAP carrying amount immediately post-acquisition as deemed cost under IFRS, unless IFRS requires fair value measurement.
2.2 Goodwill
Goodwill representing the excess of the cost of acquisition over the fair value of the Group’s share of the identifiable net assets acquired, is capitalised and reviewed annually for impairment. Goodwill is carried at cost less accumulated impairment losses. Negative goodwill is recognised immediately after acquisition in the income statement.
Goodwill written off to reserves prior to date of transition to IFRS remains in reserves. There is no reinstatement of goodwill that was amortised prior to transition to IFRS. Goodwill previously written off to reserves is not written back to profit or loss on subsequent disposal.
2.3 Provisions
Provisions are recognised when the Group has a present obligation as a result of a past event, and it is probable that the Group will be required to settle that obligation. Provisions are measured as the directors’ best estimate of the expenditure required to settle the obligation at the balance sheet date, and are discounted to present value where the effect is material.
2.4 Revenue recognition
Revenue is measured as the fair value of the consideration received or receivable and represents amounts receivable for goods and services provided in the normal course of business, net of discounts, allowances and value added tax.
Sales of goods are recognised on delivery when the risks and rewards of ownership pass to the customer.
2.5 Foreign currencies
In preparing the financial statements of the individual companies, transactions in currencies other than the entity’s functional currency (foreign currencies) are recorded at the rates of exchange prevailing on the dates of the transactions. At each balance sheet date, monetary assets and liabilities that are denominated in foreign currencies are retranslated at the rates prevailing on the balance sheet date.
Exchange differences arising on the settlement of monetary items, and on the retranslation of monetary items, are included in profit or loss for the period.
In order to hedge its exposure to certain foreign exchange risks, the Group enters into forward contracts (see below for details of the Group’s accounting policies in respect of such derivative financial instruments).
2.6 Pension costs
The defined benefit scheme previously operated by the Group closed to future accrual on 31 May 2006. For this scheme the amounts charged to operating profit are the current service costs and gains and losses on settlements and curtailments. They are included as part of staff costs. Past service costs are recognised immediately in the income statement if the benefits have vested. If the benefits have not vested immediately, the costs are recognised over the period until vesting occurs. The interest cost and the expected return on assets are shown as a net amount of other finance costs or credits.
Actuarial gains and losses are recognised immediately in the statement of recognised income and expense.
Defined benefit schemes are funded, with the assets of the scheme held separately from those of the Group, in separate trustee administered funds. Pension scheme assets are measured at fair value and liabilities are measured on an actuarial basis using the projected unit method and discounted at a rate equivalent to the current rate of return on a high quality corporate bond of equivalent currency and term to the scheme liabilities. The actuarial valuations are obtained at least triennially and are updated at each balance sheet date. The resulting defined benefit asset or liability is presented separately on the face of the balance sheet.
The Group operates a defined contribution pension scheme for employees. The assets of the scheme are held separately from those of the Group. The annual contributions payable are charged to the profit and loss account.
2.7 Taxation
Deferred corporation tax is provided, using the liability method, on all temporary differences at the balance sheet date between the tax bases of assets and liabilities and their carrying amounts for financial reporting purposes. Deferred tax liabilities are recognised in respect of all temporary differences except where the deferred tax liability arises from the initial recognition of goodwill in business combinations.
Deferred tax assets are recognised for all deductible temporary differences, carry forward of unused tax assets and tax losses, to the extent that they are regarded as recoverable. They are regarded as recoverable where, on the basis of available evidence, there will be suitable taxable profits against which the future reversal of the underlying temporary differences can be deducted. The carrying value of the amount of deferred tax assets is reviewed as at each balance sheet date and reduced to the extent that it is no longer probable that sufficient taxable profit will be available to allow all, or part, of the tax asset to be utilised.
Deferred corporation tax assets and liabilities are measured at the tax rates that are expected to apply to the year when the asset is realised or the liability is settled, based on the tax rates (and tax laws) that have been substantively enacted at the balance sheet date.
The effect of the proposals to phase out industrial buildings allowances from 1 April 2008 onwards would be to decrease the deferred tax asset and thus the profit and loss by £300,000
2.8 Property, plant and equipment
Property, plant and equipment are held at cost, net of depreciation less any provision for impairment. Depreciation is provided by the straight line method at rates calculated to write off the cost of the assets, other than freehold land, less their estimated residual value over their expected useful lives:
Freehold land Nil
Freehold buildings 21/2 % per annum
Plant and vehicles 10% to 20% per annum
Computer equipment 331/3 % per annum

2.9 Impairment of tangible and intangible assets excluding goodwill
At each balance sheet date, the Group reviews the carrying amounts of its tangible and intangible assets to determine whether there is any indication that those assets have suffered an impairment loss. If any such indication exists, the recoverable amount of the asset is estimated in order to determine the extent of the impairment loss.
The recoverable amount is the higher of fair value less costs to sell and value in use. In assessing value in use, the estimated future cash flows are discounted to their present value using a pre-tax discount rate that reflects current market assessments of the time value of money and the risk specific to the asset for which the estimates of future cash flows have not been adjusted.
If the recoverable amount of an asset (or cash-generating unit) is estimated to be less than its carrying amount, the carrying amount of the asset (cash-generating unit) is reduced to its recoverable amount. An impairment loss is recognised as an expense immediately.
Where an impairment loss subsequently reverses, the carrying amount of the asset (cash-generating unit) is increased to the revised estimate of its recoverable amount, but so that the increased carrying amount does not exceed the carrying amount that would have been determined had no impairment loss been recognised for the asset (cash-generating unit) in prior years. A reversal of an impairment loss is recognised as income immediately.
2.10 Inventories
Inventories are stated at the lower of cost and net realisable value. Cost on a first-in, first-out basis comprises direct materials and, where applicable, direct labour costs and those overheads that have been incurred in bringing the inventories to their present location and condition. Net realisable value represents the estimated selling price less all estimated costs of completion and costs to be incurred in marketing, selling and distribution.
2.11 Trade receivables
Trade receivables are measured subsequent to initial recognition at amortised cost using the effective interest method, less provision for impairment. Any change in their value through impairment or reversal of impairment is recognised in the income statement.
Provision against trade receivables is made when there is objective evidence that the Group will not be able to collect all amounts due to it in accordance with the original terms of those receivables. The amount of the write-down is determined as the difference between the asset’s carrying amount and the present value of estimated future cash flows.
2.12 Leased assets
In accordance with IAS 17, the economic ownership of a leased asset is transferred to the lessee if the lessee bears substantially all the risks and rewards related to the ownership of the leased asset. The related asset is recognised at the time of inception of the lease at the fair value of the leased asset or, if lower, the present value of the minimum lease payments plus incidental payments, if any, to be borne by the lessee. A corresponding amount is recognised as a finance leasing liability.
The interest element of leasing payments represents a constant proportion of the capital balance outstanding and is charged to the income statement over the period of the lease.
All other leases are regarded as operating leases and the payments made under them are charged to the income statement on a straight line basis over the lease term. Lease incentives are spread over the term of the lease.
2.13 Derivative financial instruments
The Group’s activities expose it primarily to the financial risks of changes in foreign currency exchange rates. The Group uses foreign exchange forward contracts to hedge this exposure. The Group does not use derivative financial instruments for speculative purposes.
Changes in the fair value of derivative financial instruments that are designated and effective as hedges of future cash flows are recognised directly in equity and the ineffective portion is recognised immediately in the income statement. Amounts deferred in equity are recognised in the income statement in the same period in which the hedged item affects net profit or loss.
Changes in the fair value of derivative financial instruments that do not qualify for hedge accounting are recognised in the income statement as they arise.
Hedge accounting is discontinued when the hedging instrument expires or is sold, terminated, or exercised, or no longer qualifies for hedge accounting. At that time, any cumulative gain or loss on the hedging instrument recognised in equity is retained in equity until the forecasted transaction occurs.
2.14 Share-based payments
The Group has applied the requirements of IFRS 2 ‘Share-based Payment’. In accordance with the transitional provisions, IFRS 2 has been applied to all grants of equity instruments that were unvested at 1 April 2006.
The Group issues equity-settled and cash-settled share-based payments to certain employees (including directors). Equity-settled share-based payments are measured at fair value (excluding the effect of non market-based vesting conditions) at the date of grant. The fair value determined at the grant date of the equity-settled share-based payments is expensed on a straight-line basis over the vesting period, based on the Group’s estimate of shares that will eventually vest.
Fair value is measured by use of the Black Scholes model. The expected life used in the model has been adjusted, based on management’s best estimate, for the effects of non-transferability, exercise restrictions, and behavioural considerations.
2.15 Segmental reporting
Activities are allocated to one business segment being furniture. A business segment is a group of assets and operations engaged in providing products or services that are subject to risks and returns that are different from those of other business segments. A geographical segment is engaged in providing products or services within a particular economic environment that is subject to risks and returns which are different from those segments operating in other economic environments.
3. Geographical segments
The following table provides an analysis of the Group’s revenue by geographical market, irrespective of the origin of the products:

4. Finance costs

5. Earnings per share
The earnings per share are calculated on profit after tax of £399,000 (2006: £347,000) and the weighted average number of ordinary shares of 23,888,698 (2006: 23,888,698) in issue during the period. The share options in existence during the six months ended 30 September 2007 have a dilutive effect. The diluted earnings per share are calculated on earnings of £399,000 (2006: £347,000) and the weighted average number of ordinary shares in issue adjusted to assume conversion of all dilutive potential ordinary shares which is 25,448,698 (2006: 25,418,698).
6. Explanation of transition to IFRS
As explained in note 1, these are the Group’s first interim financial statements prepared for part of the first year in which financial statements will be prepared in accordance with International Financial Reporting Standards (IFRS).

The accounting policies in note 2 have been applied in preparing these interim financial statements, and in preparing an opening IFRS balance sheet as at 1 April 2006 (the Group’s date of transition).

There are no changes to profit, total assets, total equity or total liabilities as the result of the transition from UK GAAP to IFRS.

Airsprung Furniture Group PLC

13 November 2007

Airsprung Furniture Group PLC, the supplier of manufactured and imported furniture, announces that it was informed yesterday that, as a result of an acquisition of shares on 6 November 2007 by High Street Investors LP (“HSI”), an undertaking indirectly controlled by Kenneth M. Karmin, Mr Karmin now holds an aggregate of 730,000 ordinary shares of 10p each in the Company, representing approximately 3.06 per cent. of the Company’s issued share capital and approximately 2.97 per cent. of its total voting shares. The notification states that HSI is controlled by High Street Holdings, Inc (“HSH”) and that Mr Karmin controls HSH.

Annual General Meeting

20 September 2007

The Chairman made the following trading statement at the Annual General Meeting held on Thursday 20 September 2007 at 12.30pm:

"I am pleased to announce that the Group is continuing to make encouraging progress. Sales and profits will be ahead of last year at the end of the first six months, and business indicators are positive for the second half year. The Group has received outline planning permission for the proposed Business Park adjacent to the main manufacturing site in Trowbridge, which will bring future benefits
to shareholders.

It is too early to forecast the effect which recent difficulties in the mortgage
lending market may have on housing starts and consumer spending, but Airsprung’s competitive position is strong, and unless there is a sharp deterioration in the trading environment, we are confident the Group will have another
satisfactory year."

Stuart Lyons CBE

Annual General Meeting

14 September 2006

At the Annual General Meeting of Airsprung Furniture Group held today, Stuart Lyons CBE, Chairman, made the following statement to shareholders:

"The board is pleased to report that the Group's recovery is continuing as planned. Sales are modestly ahead of last year and during the first quarter the Group achieved its initial objective of returning to profitable trading

"In the light of this progress, the directors have approved a contribution to the pension scheme above the basic level of the Contributions Schedule agreed with the Scheme Trustees. Subject to trading conditions allowing, the board intends to continue to bear down on the pension deficit, while rebuilding distributable reserves, and to resume dividend payments to shareholders at the earliest practicable date."

Stuart Lyons CBE

Change of advisor and broker

01 August 2006

Following the acquisition of Rowan Dartington & Co. Limited by Corporate Synergy Group plc, Airsprung Furniture Group plc is pleased to announce the appointment of Corporate Synergy Plc as its nominated adviser and broker with immediate effect.

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