Report & Accounts 2007
Report & Accounts 2007	 Homeserve plc
Homeserve	plc
Cable Drive, Walsall WS2 7BN
t. 01922 426 262
f. 01922 427 904
www.homeserve.com 1	 Highlights	 of	 the	 Year
4	 Chairman’s 	 Statement
10	 Chief 	 Executive’s	 Review
24	 Financial 	 Review
32	 Corporate 	 and	 Social	 Responsibility
38	 Directors’ 	 Biographical	 Details
40	 Directors 	 and	 Advisers
41	 Directors’ 	 Report
44	 Corporate 	 Governance
49	 Remuneration 	 Report
65	 Statement 	 of	 Directors’	 Responsibilities
66	 68	 Group 	 Income	 Statement
69	 Group 	 Statement	 of	 	 Recognised	 Income	 and	 Expense
70	 Group 	 Balance	 Sheet
71	 Group	 Cash	 Flow	 Statement
72	 Notes	 to	 the	 Accounts
103	 Independent	 Auditors’	 Report
104	 Company	 Statement	 of	 	 Recognised	 Income	 and	 Expense
105	 Company 	 Balance	 Sheet
106	 Company 	 Cash	 Flow	 Statement
107	 Notes 	 to	 the	 Accounts
115	 	 Five 	 Year	 Summary
116	 Shareholder 	 Analysis
116	 Shareholder 	 Information
Printed	 using	 vegetable	 oil	 based	 inks	 on	 Era	 Silk	 which	 is	 made	 from	 ECF	 (elemental	 chlorine	 free)	 fibre	 sourced	 from	 sustained	 forests	 (50%)	 and	 recycled	 waste	 (50%).	 The	paper	was	sourced	from	an	FSC	Approved	mill.
Independent	Auditors’	Report                                         Directors Brian Howard Whitty
  Richard David Harpin
  John Hunter Maxwell
  Ian Carlisle
  Ian Hugh Chippendale
  Jonathan Florsheim
  John Michael Barry Gibson
  Jonathan Simpson-Dent
 
 Secretary Caroline Emma Roberts Thomas
 
 Registered Oﬃce Cable Drive, Walsall, WS2 7BN
  Registered in England No 2648297
 
 Stockbrokers JP Morgan Cazenove Ltd
  20 Moorgate, London, EC2R 6DA
 
 Financial Advisers UBS Investment Bank
  1 Finsbury Avenue, London, EC2M 2PP
 
 Financial PR Advisers Tulchan Communications Group Ltd
  6th Floor, Kildare House, 3 Dorset Rise, London, EC4Y 8EN
 
 Auditors Deloitte & Touche LLP
  Four Brindleyplace, Birmingham B1 2HZ
 
 Legal Advisers Slaughter & May
  One Bunhill Row, London, EC1Y 8YY
 
 Bankers HSBC Bank plc
  130 New Street, Birmingham B2 4JU
 
  Royal Bank of Scotland plc
  2 St Philips Place, Birmingham B3 2RB
 
 Registrars Computershare Investor Services PLC
  PO Box 82, The Pavilions, Bridgwater Road, 
  Bristol BS99 7NH
 
Directors and Advisers 
Report & Accounts 2007
Homeserve plc 40 Homeserve plc 41
Directors’ Report
AR 2007 back half (20).indd   40 25/5/07   18:48:14 Results
Revenue from continuing operations increased 
by 66% to £367m (2006: £221m).  Proﬁt before 
tax
*
 increased by 28% to £53.6m (2006: £41.9m) 
and earnings per share
*
 increased by 25% to 59.2p 
(2006: 47.2p).  
Proﬁt before tax increased by 29% to £50.0m 
(2006: £38.8m) and total basic earnings per share 
increased to 55.1p (2006: 11.6p).
The Board is proposing a ﬁnal dividend of 13.9p 
per share to be paid on 7 August 2007, which 
brings the full year dividend to 20.0p per share, a 
year on year increase of 25%.
Net debt at 31 March 2007 was £16.3m (2006: 
net cash £11.2m).  Cash generated by operations 
amounted to £55.6m. 
This has principally been invested in acquisitions 
(£34.7m) and the purchase of shares by the 
Homeserve Employee Trust in respect of share 
incentive plans (£8.2m).
Our results continue to be analysed between 
Policy Membership and Emergency Repair, which 
is consistent with our internal reporting structure.
Policy Membership
The Policy Membership business increased 
revenue by 26% to £161m (2006: £128m), with 
operating proﬁt
*
 increasing by 9% to £41.3m 
(2006: £37.7m).  
Homeserve GB, the UK policy business, achieved 
an increase in policies and customers of 30% 
and 22% respectively, with the recent mailing 
campaigns performing particularly well.  
Homeserve GB delivered strong growth of 20% 
in operating proﬁts, in part oﬀset by increased 
investment in our international business 
development and a loss in our Retail Warranties 
business.
Investment in organic growth in our international 
operations increased by £1.5m to £2.6m during 
the year.  
Doméo, our French operation is performing 
well with our 49% share of the joint venture 
generating an operating proﬁt of £0.8m and 
with the number of policies increasing by 49% to 
0.42m.  
The US operation increased its policy base three 
fold to 0.13m and signiﬁcantly strengthened 
its management team.  We signed our ﬁfth 
marketing agreement in the US in May 2007 with 
CEMC, a major energy utility based in Georgia, 
providing access to 0.4m homes.  We also agreed 
with our existing partner, Aqua America, to 
extend into three more of their territories.  This 
brings the total number of US households to 
which we have access to 1.4m. In April 2007 we 
reached agreement with a major Spanish utility 
to commence a test of our electrics policy in 
September 2007.
Our Retail Warranties business has continued 
to experience diﬃcult trading conditions in the 
furniture retail market and made an operating 
loss of £1.5m (2006: £1.4m proﬁt).  We have 
reduced the operating cost base of this business, 
which combined with new retail clients, is 
now beginning to be reﬂected in improved 
performance.  Within Manufacturer Warranty, we 
have achieved strong policy growth.
Emergency Repair    
The Emergency Repair business has increased 
revenue to £218m (2006: £100m) with operating 
proﬁt
*
 increasing by 192% to £13.1m (2006: 
£4.5m).  
These results include revenue and operating proﬁt 
of £64m and £3.9m respectively, from acquisitions 
in the year, principally Chem-Dry, acquired in April 
2006, and Improveline, acquired in December 
2006.  The year on year growth in revenue and 
operating proﬁt
*
 was 54% and 106% respectively, 
including a full year contribution from Homeserve 
Property Repairs, acquired in December 2005.
Annual Report & Accounts 2007
99%
Tables to go here
Directors
The directors who held office during the year were: 
Brian Whitty
Richard Harpin
Andrew Belk (resigned 30 March 2007)
Ian Carlisle 
Jon Florsheim (appointed 5 March 2007)
Jonathan Simpson-Dent (appointed 30 March 2007)
Ian Chippendale (appointed 1 January 2007)
JM Barry Gibson
Justin Jewitt (resigned 1 January 2007)
John Maxwell
Having been appointed since the last Annual General Meeting, 
Jon Florsheim, Jonathan Simpson-Dent and Ian Chippendale, 
will retire from the Board in accordance with the Articles 
of Association and, being eligible, will offer themselves for 
election.  Ian Carlisle and John Maxwell retire by rotation 
and, being eligible, offer themselves for re-election.  Messrs 
Florsheim, Simpson-Dent and Carlisle serve under contracts 
of employment terminable on 12 months notice by either 
party. Messrs Chippendale and Maxwell serve under three year 
renewable letters of appointment which provide for liquidated 
damages limited to the payment of a maximum of one year’s 
fees in the event of termination by the Company.
The beneficial interests of the directors in the shares of the 
Company and the options held as at 31 March 2007 and 21 
May 2007 are set out in the Remuneration Report. None of the 
directors serving at the year end had a beneficial interest in the 
share capital of any subsidiary company.
Each of the directors confirms that as far as he is aware, there 
is no relevant audit information of which the Company’s 
auditors are unaware and that he has taken all reasonable 
steps to make himself aware of any relevant audit information 
and to establish that the Company’s auditors are aware of that 
information.
Directors and Advisers 
Homeserve plc 40 Homeserve plc 41
The directors have pleasure in presenting their Report and 
Accounts for the year ended 31 March 2007.
Principal activities
During the year the Group was engaged in the provision of 
insured repair solutions and emergency services to the home.  
Details of the Group activities and a review of the business 
are set out in the Chairman’s Statement and Chief Executive’s 
Review on pages 4 to 21.
Details of the financial position at the year end and the Key 
Performance Indicators used by the directors to assist in the 
management of the business and to provide evidence of the 
achievement of its strategies are included on pages 24 and 27 
in the Financial Review.
A description of the principal risks and uncertainties facing the 
Group is included on pages 28 and 29 in the Financial Review.
Information relating to the environment and employees is 
included in the Corporate Social Responsibility report on 
pages 32 to 37. 
Financial results and dividends
The Group’s results are shown in the Group income statement 
on page 68. The directors are recommending the payment on 
6 August 2007 of a final dividend of 17.5 pence per ordinary 
share to shareholders on the register at the close of business 
on 1 June 2007 which, together with the interim net dividend 
of 7.5 pence per ordinary share paid on 3 January 2007, results 
in a total net dividend for the year of 25.0 pence per share 
(2006: 20.0p).  For further details of the dividend see note 11 to 
the accounts.
Directors’ Report
Report & Accounts 2007
AR 2007 back half (20).indd   41 25/5/07   18:48:15 Annual General Meeting
The following special business will be transacted at the Annual 
General Meeting of the Company, to be held on 30 July 2007 
at 10.00am.
Allotment of shares and pre-emption rights
There will be proposed at the Annual General Meeting a 
renewal of the directors’ general authority to allot shares up 
to a maximum nominal amount (“the Section 80 Amount”) 
and the directors’ authority to issue shares for cash without 
applying the statutory pre-emption rights up to a maximum 
nominal amount (“the Section 89 Amount”).  The directors 
confirm that they presently have no intention to issue more 
than 7½% of the issued ordinary share capital shown in the 
latest published annual accounts by way of non pre-emptive 
issues for cash in any rolling three year period.
They also confirm that, in the event of an issue of shares other 
than on a pre-emptive basis, the amount of the discount, if any, 
at which equity is issued for cash other than to shareholders, 
will be limited to a maximum of 5% of the middle of the best 
bid and offer prices immediately prior to the announcement of 
an issue or proposed issue.
Authority to purchase own shares
Approval is being sought for the Company to renew the 
authority contained in the Articles of Association to purchase 
its own ordinary shares. The Board has no firm intention that 
the Company should make purchases of its own shares if 
the proposed authority becomes effective, but would like to 
be able to act quickly if circumstances arise in which such a 
purchase would be desirable. Purchases will only be made 
on the London Stock Exchange and only in circumstances 
where the Board believes that they are in the best interests of 
the shareholders generally and would result in an increase in 
earnings per share. Any shares purchased would be cancelled.
Further detail on the resolutions to be proposed at the Annual 
General Meeting can be found in the Notice of Meeting.
Auditors
A resolution proposing the reappointment of Deloitte & 
Touche LLP as auditors and authorising the Board to fix their 
remuneration will be put to the Annual General Meeting.
Fixed assets
Capital expenditure on tangible fixed assets amounted to 
£12.6m during the year.
Donations
Charitable donations of £34,000 (2006: £28,000) were made 
during the year. No political contributions were made in either 
year.
Payment of creditors
The Group’s policy is to pay suppliers in line with the terms 
of payment agreed with each of them when contracting for 
their products or services. Trade creditors at 31 March 2007 
represent 65 days of purchases during the year (2006: 64 days) 
for the Group and 45 for the Company (2006: 45 days).
Substantial shareholdings
As far as the directors are aware, no person had a beneficial 
interest in 3% or more of the voting share capital at 21 May 
2007, except for the following:
 Ordinary  
 Shares  %
Richard Harpin 10,987,609 16.9
AMVESCAP PLC 9,645,435 14.9
Schroders plc 4,040,299 6.2
Standard Life Investments Ltd 3,528,403 5.4
Jeremy Middleton 3,058,113 4.7
Legal & General Group plc 2,460,437 3.8
Taxation status
The Company is not a close company within the meaning of 
the Income and Corporation Taxes Act 1988.
Employment policies
It is the Group’s policy that all persons should be considered 
for employment, training, career development and promotion 
on the basis of their abilities and aptitudes, regardless of 
physical ability, age, gender, sexual orientation, religion or 
ethnic origin. 
Directors’ Report
Report & Accounts 2007
Homeserve plc 42 Homeserve plc 43
AR 2007 back half (20).indd   42 25/5/07   18:48:15 Homeserve applies employment policies that are fair and 
equitable for all employees and which ensure entry into 
and progression within the Company are determined 
solely by application of job criteria and personal ability and 
competency.
Full and fair consideration (having regard to the person’s 
particular aptitudes and abilities) is given to applications for 
employment and the career development of disabled persons. 
Homeserve’s training and development policies make it clear 
that it will take all steps practicable to ensure that employees 
who become disabled during the time they are employed by 
the Group are able to continue to perform their duties.
Employee involvement
Homeserve attaches considerable importance to ensuring 
that all its employees are provided with information 
concerning them as employees, particularly the economic 
and financial factors affecting its performance and the 
market in which it operates. Involvement of employees in the 
Group’s performance is also encouraged by the availability 
of performance-related bonuses as well as share option 
schemes, which are described in more detail elsewhere in 
this report. Internal circulars and newsletters are issued on a 
regular basis and consultation between management and 
staff is an ongoing process. Employees are consulted on issues 
directly affecting them wherever practicable. Further details 
of Homeserve’s policies and practices relating to employee 
involvement may be found on pages 32 of the Corporate & 
Social Responsibility Report.
Events after the balance sheet date
Other than in respect of the acquisition of 100% of the share 
capital of Multimaster Limited on 30 April 2007 as detailed in note 
32, there have been no events after the balance sheet date.
By Order of the Board
Emma Thomas
Company Secretary
21 May 2007
Directors’ Report
Homeserve plc 42 Homeserve plc 43
Report & Accounts 2007
AR 2007 back half (20).indd   43 25/5/07   18:48:16 Corporate Governance 
Report & Accounts 2007
Homeserve plc 44 Homeserve plc 45
Homeserve complied throughout the year with the provisions 
set out in the Combined Code published by the UK Financial 
Reporting Council in July 2003 (‘the Code’) except for the 
balance of the Board between executive and non-executive 
directors between 5 March 2007 and 31 March 2007. As we 
announced today, Andrew Sibbald will be joining the Board as 
an independent non-executive director on 1 June 2007.
The manner in which the Company applies the principles 
of good governance contained in the Code is described in 
the appropriate parts of this Report and Accounts.  Thus the 
application by the Company of the Code’s principles relating 
to remuneration matters at pages 49 to 64 should be read in 
conjunction with the statement below.  A review of the Group’s 
position and prospects is set out in the Chairman’s Statement, 
the Chief Executive’s Review and Financial Review on pages 4 
to 29.
The Board
The Board of directors leads and controls the Company by 
holding at least eight meetings a year at which its current and 
forecast performance is reviewed and monitored.  Regular 
reports on monthly performance and other matters of 
importance to the Group ensure that the Board is supplied 
in a timely manner with the information necessary to make 
informed judgments.  In addition, the Board holds regular 
meetings, also attended by senior operational management, 
to devise and discuss the Company’s medium and long term 
strategic focus and management development strategy.  
Regular formal and informal presentations are given and 
meetings held in order to apprise directors of issues of 
importance aﬀecting the Group. Occasionally, meetings of the 
Board are held at the Company’s operating sites other than 
Walsall, in order to aﬀord the Board, particularly the non-
executive directors, with the opportunity to meet with local 
management.
In accordance with the provisions of its Articles of Association 
and with the Code, each director is subject to election by 
the Company’s shareholders at the Annual General Meeting 
immediately following his appointment and is subject to re-
election at least every three years thereafter.
The Board has a Schedule of Matters speciﬁcally reserved to it 
for decision and has approved the written terms of reference of 
the various committees to which it has delegated its authority 
in certain matters.  Matters reserved to the Board include the 
recommendation or approval of dividends, the approval of ﬁnal 
and interim ﬁnancial statements, major ﬁnancial commitments, 
the acquisitions of signiﬁcant companies or businesses, 
appointments to the Board and its committees, the Company’s 
future strategy and its internal controls.  It also provides that 
the Board receive regular updates from the chairmen of its 
committees.
During the year the Board was led by Brian Whitty, the 
Executive Chairman, who also served as a member of the 
Board’s Nomination Committee.
The Chairman’s responsibilities are clearly deﬁned in a written 
speciﬁcation agreed by the Board and which makes clear the 
division of responsibilities between the Executive Chairman 
and the Chief Executive.  They include the smooth running of 
the Board, eﬀective communication between executive and 
non-executive directors and the general progress and long 
term development of the Group.  His executive responsibilities 
include major strategic acquisitions, relations with shareholders 
and those relating to property, legal and governance matters.
The Board has established a formal procedure for directors 
wishing to seek independent legal and other professional 
advice and all members of the Board have access to the advice 
and services of the Company Secretary.
The day-to-day running of Homeserve’s business is delegated 
to an Executive Board, also led by Brian Whitty, and which 
includes Richard Harpin, Chief Executive, Ian Carlisle, Chief 
Executive of the Emergency Services division, Jon Florsheim, 
Chief Executive of Homeserve GB (from his appointment on 
5 March 2007), Andrew Belk, Group Finance Director (until his 
resignation on 30 March 2007), and Jonathan Simpson-Dent, 
Chief Financial Oﬃcer (from his appointment on 30 March 
2007).  Other members of the Executive Board, together with 
autobiographical details, are listed on page 39.
AR 2007 back half (20).indd   44 25/5/07   18:48:16 Corporate Governance 
Homeserve plc 44 Homeserve plc 45
Report & Accounts 2007
Richard Harpin, the Chief Executive, is responsible for leading 
business development, operational issues and marketing.  He is 
also responsible for all operational public relations and tactical 
acquisitions.
During the year, three independent non-executive directors 
with extensive business, ﬁnance and marketing backgrounds, 
provided the Board with a breadth of experience and with 
independent judgement.  John Maxwell served as the 
Company’s independent senior non-executive director.  In 
anticipation of the appointment of Jon Florsheim to the 
Board in March 2007, the Board recognised that the number 
of executive directors would outnumber the number 
of independent non-executive directors. Accordingly, it 
commenced a search for an additional independent non-
executive director and on 21 May 2007 announced the 
forthcoming appointment of Andrew Sibbald to the Board 
from 1 June 2007. In addition, the Board is currently in the 
process of selecting a further independent non-executive 
director.
The Board actively encourages all directors to deepen their 
knowledge of their roles and responsibilities and to gain a clear 
understanding of the Group and the environment in which it 
operates; and has adopted a formal policy on the induction 
and training of directors.  Newly appointed Board members are 
required to undergo an induction programme, which includes 
obtaining a thorough understanding of the Group’s various 
operations, and have the opportunity to receive formal training.  
During the year, the non-executive directors have met with 
various members of the Group’s management teams and have 
visited several of the operating businesses.  Further training for 
directors is available, oﬀered and provided as appropriate.
The Board has adopted a formal process for reviewing its own 
eﬀectiveness and that of its individual members.  In addition, 
it continued to ensure that regular meetings of the non-
executive directors were held without the executive directors, 
and at least once a year, without the Chairman present, in order 
to evaluate his performance.  The evaluation process, which 
was facilitated by external advisers, was completed in April 
2006, comprising one-on-one meetings to discuss the existing 
and future needs of the Board, its composition and the skills of 
its members.  The results of the process were reviewed by the 
whole Board in June and October 2006 and a further review is 
planned to take place in September 2007.
Committees
The Board operates a number of committees to which it has 
delegated certain speciﬁc responsibilities and each of which 
has formally adopted terms of reference.  These comprise the 
Nomination, Audit and Remuneration Committees.  The terms 
of Reference of each of the Board’s committees can be viewed 
on the Company’s website.
Nomination Committee
The Nomination Committee, which makes recommendations 
to the Board on the appointment of directors, is chaired by 
Brian Whitty and Barry Gibson and John Maxwell, independent 
non-executive directors both served on the committee 
throughout the year.  Until his resignation from the Board on 
1 January 2007, Justin Jewitt also served as a member of the 
Nomination Committee and Ian Chippendale was appointed as 
a member on the same date. Other members of the Board may 
be invited, but are not entitled, to attend its meetings.   The 
Committee draws on the advice of such professional advisers 
as it considers necessary and, during the year, met informally 
on several occaisions to consider the possible appointment 
of further non-executive directors, including Ian Chippendale, 
and Andrew Sibbald, and of executive directors, including Jon 
Florsheim and Jonathan Simpson-Dent.
Its duties include the review of the size, structure and 
composition required of the Board, and succession planning 
for directors and other senior managers.  During the year, these 
duties were undertaken by the Board itself.
AR 2007 back half (20).indd   45 25/5/07   18:48:16 Corporate Governance 
Report & Accounts 2007
Homeserve plc 46 Homeserve plc 47
Audit Committee
The Audit Committee is chaired by John Maxwell, a chartered 
accountant and the senior independent non-executive director.  
It comprises only independent non-executive directors. 
Barry Gibson and Ian Chippendale are also members of the 
Committee, as was Justin Jewitt until 1 January 2007.
The Committee meets regularly to review the preliminary 
and interim results before they are presented to the Board, 
to receive reports from the Company’s internal and external 
auditors and to make recommendations to the Board 
on accounting policies.  Its primary duties include the 
monitoring, on behalf of the Board, of compliance with and the 
eﬀectiveness of the Company’s accounting and internal control 
systems.  The Committee’s duties also include agreeing audit 
strategy, monitoring the scope and results of the Company’s 
annual audit and the independence and objectivity of its 
auditors.  The external auditors and the Chief Financial Oﬃcer 
are invited but are not entitled to attend all meetings.
The Committee has implemented a policy relating to the use 
of the external auditors for non-audit services and monitors 
fees paid in respect of such services.  The external and internal 
auditors are provided with the opportunity to raise any 
matters or concerns that they may have, in the absence of the 
executive directors.
The Committee has also agreed and implemented a procedure 
for reviewing and assessing its own eﬀectiveness and that 
of the external audit process; the results of the review were 
considered by the Board as a whole in June 2006.  
Remuneration Committee
The Committee is chaired by Barry Gibson, who became 
Chairman on 1 January 2007. Justin Jewitt acted as Chairman 
during the year until his resignation on 1 January 2007.  It 
comprises only independent non-executive directors, Ian 
Chippendale and John Maxwell being its other members.
The Remuneration Committee’s responsibilities include 
determining the Group’s overall remuneration strategy and 
the remuneration packages of the executive directors and 
other members of the Executive Board, after having consulted 
with the Chairman and Chief Executive and having received 
professional advice from remuneration consultants.  The 
Committee is also responsible for approving the grant and 
exercise of executive long-term incentive arrangements.  In 
determining remuneration policy, the Committee is free to 
obtain such professional advice as it sees ﬁt, and regularly 
monitors both the policies of comparator companies and 
current market practice, in order to ensure that the packages 
provided are suﬃcient to attract and retain executive directors 
of the necessary quality.
The Committee has also agreed and implemented a procedure 
for reviewing and assessing its own eﬀectiveness; the results 
of the review were considered by the Board as a whole in June 
2006.  
The remuneration of non-executive directors is a matter for the 
Company’s Board.
Short biographies of each of the directors, including their 
membership of the Board’s committees outlined above, may be 
found on pages 38 and 39.
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Homeserve plc 46 Homeserve plc 47
Report & Accounts 2007
Relationships with shareholders
The Board, on the Company’s behalf, recognises the need 
to maintain an active dialogue with its shareholders.  The 
Chairman and Chief Financial Oﬃcer meet regularly with 
institutional investors and analysts to discuss the Company’s 
performance and all shareholders have access to the senior 
independent non-executive director, who is available to discuss 
any questions which investors may have in relation to the 
running of the Company.  The Board encourages shareholders 
to attend the Annual General Meeting and is always willing 
to answer questions, either in the meeting itself or, more 
informally, afterwards.  In addition, shareholders may contact 
Homeserve direct, either through its website or by telephoning 
its oﬃces.
The Board also recognises the need to ensure that all directors 
are fully aware of the views of major shareholders about 
the Group.  Copies of all analysts’ research relating to the 
Company are circulated to all directors upon publication, 
monthly analyses of the Company’s shareholder register 
are made available to the Board and written feedback from 
shareholders and analysts, prepared by the Group’s brokers and 
public relations advisers is provided to all directors after every 
signiﬁcant corporate event and at least twice a year.
Going concern
The directors conﬁrm that, after reviewing the Group’s budget 
for 2007/8, the three year operating plan and projected cash 
ﬂows, they have a reasonable expectation that the Group has 
adequate resources to continue in operational existence for the 
foreseeable future.  For this reason, they continue to adopt the 
going concern basis in preparing the accounts.
Internal controls
As required by the UK Listing Authority, the Company has 
complied throughout the year with the provisions of the 
Code relating to internal controls, having implemented the 
procedures necessary to comply with the guidance on internal 
control published in October 2005 (Turnbull Guidance) and to 
report in line with that guidance.
The Board is responsible for the Group’s system of internal 
control and for reviewing its eﬀectiveness.  Such a system is 
designed to manage rather than eliminate the risk of failure to 
achieve business objectives and can only provide reasonable 
and not absolute assurance against material misstatement or 
loss.
Attendance at meetings
The table below sets out the attendance at meetings of the Board and its Committees by each member during the year.
  Audit Remuneration Nomination 
 Board  Committee Committee Committee
No of meetings held 8 4 6 1
Meetings attended    
B H Whitty 8   1
R D Harpin 8   
A J Belk 8   
I Carlisle 8   
J Florsheim * 1  
J Simpson-Dent * 1   
J H Maxwell 8 4 6 1
J A S Jewitt * 6 3 3 1
J M B Gibson 8 4 6 1
I Chippendale * 2 1 3 
* Mr Chippendale was appointed on 1 January 2007 and Messrs Florsheim and Simpson-Dent were appointed on 5 and 30 March 2007 respectively.  Mr 
Jewitt resigned on 1 January 2007.
AR 2007 back half (20).indd   47 25/5/07   18:48:17 Corporate Governance 
Report & Accounts 2007
Homeserve plc 48 Homeserve plc 49
There is an established internal control framework in place, 
which is continually reviewed and updated taking into account 
the changing nature of the Group’s operations.  This process 
has been in place for the whole of the year and up to the date 
of approval of the Report and Accounts.  
The key elements of the system operated by the Group to 
identify, evaluate and manage signiﬁcant risks include the 
following:
• The Group’s management operates a formal process for 
identifying, managing and reporting on operational and 
ﬁnancial risks faced by each of the Group’s businesses, 
whereby each of the risks identiﬁed is reviewed in detail by 
the executive directors on a regular basis.  Executive Board 
meetings are held on a monthly basis at which the Group’s 
senior managers report on the progress of the companies 
or discipline for which they are responsible and share best 
practice.  
• A clearly deﬁned organisation structure is in place with clear 
lines of accountability and appropriate division of duties.  
The Group’s ﬁnancial regulations specify authorisation 
limits for individual managers and for local Boards of 
management, with all material transactions being approved 
by the Board.
• Three year business plans, annual budgets and investment 
proposals for each business are formally prepared, reviewed 
and approved by the Board.
• The Group has a dedicated Internal Audit function which 
reports directly to the Audit Committee and a formal audit 
plan is in place to address the key risks across the Group.
• Financial results and cash ﬂows, including a comparison 
with budgets and forecasts, are reported to the Board on 
a monthly basis, with variances being identiﬁed to initiate 
action to mitigate them.
• Appropriate treasury policies are in place.
• The Committee has adopted a formal “whistleblowing” 
policy for employees who wish to raise any issues 
of concern relating to the Company’s activities on a 
conﬁdential basis. This policy was reviewed and revised in 
accordance with best practice during the year.
• A mechanism exists to extend the Group’s formal risk 
management processes to any signiﬁcant new business 
acquired or begun by the Company immediately upon 
acquisition or start-up.  In this way, the Board is able to 
conﬁrm that the necessary process has been operated by 
the Group for the whole of the year.
• At least twice a year, the Audit Committee reviews a register 
summarising the signiﬁcant risks faced by the businesses or 
the Group as a whole, the likelihood of those risks occurring 
and the steps being taken to minimise or otherwise 
manage those risks.
As required by the Turnbull Guidance, the Board has carried 
out an annual assessment of the eﬀectiveness of the system of 
internal controls.  The processes applied by the Board include:
• At the end of the year, the executive directors compile a 
report identifying the key risks faced by the Group.   This 
report is considered by the Audit Committee and the Board 
before the Report and Accounts is approved.
• The Group has an independent Internal Audit function 
which reviews the overall eﬀectiveness of the risk 
management process for the key risks and reports 
independently to the Audit Committee.
• At each meeting the Audit Committee reviews reports 
of the executive directors and the internal and external 
auditors, on any issues identiﬁed as having a potentially 
substantial impact on the results of the Group, or areas of 
control weakness.
• The Audit Committee reviews the eﬀectiveness of the 
Group’s system of managing ﬁnancial risk and refers 
any risks it considers signiﬁcant to the Board for its 
consideration.
• At least twice a year, the Audit Committee reviews the 
work plans and results of each of the internal and external 
auditors.
• The Audit Committee Chairman reports the outcome of 
all Audit Committee meetings to the Board, which also 
receives minutes of all such meetings.
Remuneration Report  
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Homeserve plc 48 Homeserve plc 49
Report & Accounts 2007
This report has been prepared in accordance with Schedule 
7A to the Companies Act 1985 and has been approved by the 
Board and the Remuneration Committee.   The report also 
meets the relevant requirements of the Listing Rules of the 
Financial Services Authority and describes how the Board has 
applied the Principles of Good Governance relating to directors’ 
remuneration.   A resolution to approve the report will be 
proposed at the Annual General Meeting.
The Act requires the auditors to report on certain parts of the 
report and to state whether, in their opinion, those parts of the 
report have been properly prepared in accordance with the 
Companies Act 1985.   The report has therefore been divided 
into separate sections for audited and unaudited information.
Unaudited information
Remuneration Committee
Role
The Remuneration Committee is responsible for determining 
and agreeing with the Board the pay, beneﬁts and contractual 
arrangements for the executive directors of the Company 
(including the Executive Chairman) and other members of 
the Executive Board.   It aims to develop and recommend 
remuneration strategies that drive performance and reward 
it appropriately.  In determining its policy, the Committee 
has paid regard to the principles and provisions of good 
governance contained in the Combined Code published in 
July 2003 by the UK Financial Reporting Council as updated in 
June 2006 (“the Code”).  The Committee operates under the 
delegated authority of the Board and its Terms of Reference are 
available on the Company’s website. 
Membership
During the year, the Committee comprised each of the 
Board’s three independent non-executive directors. Until his 
resignation from the Board on 1 January 2007, it was chaired by 
Justin Jewitt. Since that date, it has been chaired by JM Barry 
Gibson. 
Meetings
Attendance at Committee meetings held during the year and 
the number of meetings held is set out on page 47.  
Advisers
During the year New Bridge Street Consultants LLP (NBSC), 
a ﬁrm of independent remuneration consultants, served as 
advisers to the Committee.  The Company also instructed 
NBSC to advise it on certain remuneration matters during the 
year. Other than in relation to advice on remuneration, NBSC 
has no other connections with the Company. The terms of 
engagement for NBSC are available on the Company’s website.
The Committee has also received assistance from Brian Whitty, 
the Group’s Executive Chairman, Richard Harpin, the Chief 
Executive, Emma Thomas, the Group Company Secretary and 
Claire Tiney, the Group HR Director, all of whom attended 
meetings of the Committee as required.  None took part in 
discussions in respect of matters relating directly to their own 
remuneration.  
Remuneration Report  
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Report & Accounts 2007
Homeserve plc 50 Homeserve plc 51
Remuneration policy
The Committee’s remuneration policy for the remuneration of 
executive directors and other senior executives is based on the 
following principles; 
•  to provide a remuneration package that is suﬃcient, but no 
more than necessary, to attract, retain and motivate high 
calibre executives;
•  to align rewards with the Group’s performance;
•  to reward good performance with remuneration that is in 
line with that payable by broadly comparable businesses 
i.e.  high-growth companies of similar size and those with 
similar operating characteristics;
•  to reward exceptional performance in such a way as to 
align the executives’ interests with those of the Company’s 
shareholders, delivering upper quartile rewards for upper 
quartile performance.
To that end, the Committee structures executive remuneration 
in two distinct parts: ﬁxed remuneration of basic salary, pension 
and beneﬁts and variable performance-related remuneration 
in the form of a cash bonus and long-term incentive 
arrangements.  Remuneration for executive directors is 
structured so that the variable pay element forms a signiﬁcant 
portion of each director’s package.  
The charts opposite demonstrate the balance between ﬁxed 
and variable pay at ‘on-target’ and maximum performance 
levels, in the case of the long term incentive arrangements 
assuming certain levels of share price growth.  Maximum 
performance assumes the achievement of maximum bonus 
and full vesting of shares under the Company’s long-term 
incentive arrangements.
They demonstrate the signiﬁcant weighting of the package 
towards variable (performance-related) pay.  In particular, 
the majority of executive directors’ total remuneration at the 
maximum performance level will derive from the Company’s 
long term incentive arrangements, which are strongly aligned 
to shareholder value creation.
On-target remuneration
Maximum remuneration
Fixed pay
Short term variable pay
Long term variable pay
27%
20%
53%
57%
24%
19%
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Homeserve plc 50 Homeserve plc 51
Report & Accounts 2007
Summary of components of executive directors’ remuneration
Type Objective Performance Period Policy
Basic Salary To reﬂect the particular skills  Annual (reviewed on 1 April) Individual pay is determined by 
 and experience of an   reference to the median pay for 
 individual and to provide a   FTSE-250 companies for roles of 
 competitive base salary   a similar type and for a comparator  
 compared with similar roles   group of companies of a similar 
 in similar companies  size and growth proﬁle
Performance-Related  To incentivise the delivery of  Annual (determined after the Bonuses are determined by 
Bonus Group and individual  year-end) reference to the median for FTSE- 
 performance-related objectives   250 companies, according to the 
   Group’s ﬁnancial (80%) and  
   individual (20%) performance
Pension To provide beneﬁts comparable N/A Pension beneﬁts are determined 
 with similar roles in similar    by reference to the median for 
 companies   FTSE-250 companies.  Only basic  
   salary is pensionable
Other Beneﬁts To provide beneﬁts comparable N/A Other beneﬁts comprise a fully  
 with similar roles in similar   expensed car (or cash alternative)  
 companies  private health and (for Messrs  
   Florsheim, Simpson-Dent and  
   Whitty) long-term sickness cover
Long Term Incentives To drive long-term delivery of the  3-5 years Awards under the ESOP deliver  
 Group’s objectives, to align   rewards for EPS growth, awards  
 directors’ interests with those of   under the KEIP deliver rewards for 
 the company’s shareholders and   share price growth and proﬁt 
 to encourage exceptional   performance, awards under the  
 performance with the opportunity   LTIP and DBP deliver rewards for 
 to receive upper quartile rewards  TSR growth (subject to satisfactory  
   underlying performance)
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Report & Accounts 2007
Homeserve plc 52 Homeserve plc 53
Remuneration for executive directors
The main components of the remuneration package for 
executive directors are:
Basic salary
Basic salary for each executive director is determined by the 
Remuneration Committee taking into account the roles, 
responsibilities, performance and experience of the individual.  
This is normally reviewed annually with any increase usually 
being eﬀective from 1 April (unless responsibilities change).  
Salary levels are determined taking into account market data 
on salary levels for similar positions at comparable companies.  
Following a comprehensive review undertaken by NBSC in 
February 2007, the Committee has determined that the most 
appropriate comparator group against which to benchmark 
executive directors’ basic salaries remains the FTSE-250 Index, 
and a comparator group of companies of a similar size and 
growth proﬁle, taking into account the roles, responsibilities 
and experience of each director.  However, taking into account 
the fact that executive directors’ basic salaries were increased 
by an average of 10.1% in 2006/7, the Committee has decided 
to limit base salary increases to 3% in 2007/8, in line with the 
average of increases awarded to senior managers across the 
Group. 
 
Annual bonus
The annual bonus is designed to drive and reward excellent 
short term operating performance of the Company and 
encourage real year-on-year growth in proﬁtability.  No annual 
bonus is paid unless a very high level of proﬁt performance 
is achieved.  The maximum annual bonus for 2007/8 will be 
maintained at 100% of basic salary (with the exception of Jon 
Florsheim (as noted below) whose maximum bonus potential 
is 150% of salary).  
During the year, executive directors were able to earn up 
to 80% of bonus potential for Group ﬁnancial performance, 
measured by proﬁt before tax, amortisation and exceptional 
items.  No bonus was payable unless the Company’s proﬁts 
achieved growth of at least 20% in comparison with the 
previous year; the remaining 20% of bonus potential was based 
on measurable personal targets, relating to the part of the 
business or function for which the director was responsible.
Following NBSC’s review of the remuneration payable to 
executive directors, the Committee has agreed to retain the 
maximum bonus potential in 2007/8 at 100% of basic salary.  
This has been agreed on the basis that very demanding 
performance conditions will continue to apply, which will 
ensure that signiﬁcant bonuses will only be payable where 
performance is well ahead of the budget as determined at the 
start of the year and that the comparable level of improvement 
in proﬁt growth required is signiﬁcantly ahead of bonus plans in 
the majority of FTSE-250 companies.  As demonstrated by the 
disclosure above relating to annual bonus payments for 2006/7, 
proﬁt-based targets have been set so as to require substantial 
improvements in proﬁtability and the targets for 2007/8 are 
similarly challenging.
Any bonus earned in excess of 75% of basic salary (or, for 
Jon Florsheim, 100% of basic salary) must be invested in the 
Company’s Deferred Bonus Plan.  This share-based deferral 
element is designed to align further the interests of the 
executive directors with shareholders and, as the deferred 
shares are at risk of forfeiture if the executive leaves, is highly 
retentive.
The weighting between business and personal objectives will 
remain 80% ﬁnancial: 20% personal.  Provided their personal 
objectives are met in full, the normal “on-target” bonus payable 
to executive directors in any year is expected to be in the 
region of 60% of their basic salary (90% for Jon Florsheim).
Long term incentives
For the 2007/8 ﬁnancial year, the Committee’s policy for the 
provision of long-term incentives to executive directors will be 
to grant share options under the Executive Share Option Plan 
(ESOP) and to provide them with the opportunity to voluntarily 
invest their bonus into the Deferred Bonus Plan (DBP).  The 
policy in respect of levels of grants under both schemes and 
the performance conditions pertaining to them has been 
reviewed by the Committee, which considers them to remain 
appropriate.
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Homeserve plc 52 Homeserve plc 53
Report & Accounts 2007
The ESOP was approved by shareholders in 2001 and is 
designed to encourage and reward continuing improvement 
in the Company’s performance over the longer term.  Its 
participants are the executive directors and other senior 
executives who are best placed to inﬂuence the Company’s 
performance.   Options are granted on an annual basis and 
become exercisable between three and ten years from the date 
of grant subject to the achievement of stretching performance 
criteria.   The option price is the market price on the last dealing 
day prior to the date of grant.   The maximum annual grant 
normally awarded to executive directors under the ESOP is 
150% of salary, save in exceptional cases, for example on the 
appointment of a new executive director from outside of the 
Group.
Options will become exercisable based on the following scale;
Average normalised
EPSˆ growth Vesting level as
3 ﬁnancial years 
RPI + 4% 25
RPI + 6% 50
RPI + 8% 75
RPI + 10% 100
ˆ EPS is deﬁned as the normalised earnings per share of the Company 
as deﬁned in FRS14.
In addition, options granted under the ESOP in 2006 will only 
become exercisable if the Company’s share price reaches or 
exceeds £20.84 by the end of the three year performance 
period. It is expected that a similarly challenging share price 
target will be attached to any awards made under the ESOP 
in 2007.  The Committee reviews the performance conditions 
applying to each new grant of awards and considers them to 
remain suitably challenging.
Details of awards granted under the ESOP in the year are 
shown on page 62.
In order to encourage executive directors to build up a personal 
shareholding in the Company, the DBP was introduced in 
2005.  Under the terms of the DBP , executive directors are able 
to invest some or all of their annual bonus into shares and to 
defer receipt for three years.  Matching shares can be earned 
if the Total Shareholder Return (TSR) of the Company over a 
three year period exceeds the median of the FTSE-350 index of 
companies (excluding investment trusts).   
 
The table below demonstrates the vesting of matching shares 
under the DBP according to TSR growth;
*
Matching ratio
Below median Nil
Median 0.5:1
Median – upper decile 0.5:1-3:
 on a straight line  
 basis
Upper decile 3:1
* TSR is averaged over the three months prior to the beginning and 
end of the performance period.
The Committee retains the discretion to decline to permit 
matching shares to vest if it is not satisﬁed that there has 
been a sustained improvement in the underlying ﬁnancial 
performance of the Company at the time of vesting.
Shares invested in the DBP by executive directors may 
be withdrawn at any time during their appointment but 
any entitlement to matching shares will be forfeit in such 
circumstances.  
Details of awards granted under the DBP in the year are shown 
on page 64. 
AR 2007 back half (20).indd   53 25/5/07   18:48:20
per annum over percentage of 
overall award (%)
TSR performance  Remuneration Report  
Report & Accounts 2007
Homeserve plc 54 Homeserve plc 55
The Committee considers that the mix of the diﬀerent types 
of target oﬀered under the ESOP and the DBP provide a good 
blend of incentives.   Share options require the share price to 
increase in order to provide any beneﬁt and the DBP requires 
investment by executives at the outset, providing strong 
alignment of interests between executives and shareholders.   
Similarly, the performance conditions (EPS growth for share 
options and relative TSR for the DBP) provide a good balance 
between long-term increases to proﬁtability and relative 
stock market out-performance.  The Committee has ensured 
that a consistent approach is taken to measuring EPS-based 
performance conditions through the transition from UK GAAP 
to international accounting standards.
The shares required for share options and awards under the 
DBP may be fulﬁlled by the purchase of shares in the market by 
the Company’s employee beneﬁt trust, or through newly issued 
shares, subject to the dilution limits within each scheme.
The LTIP was approved by shareholders in 2004.   One-oﬀ 
awards of 200% of salary were made in that year to executive 
directors under the LTIP to incentivise them towards speciﬁc 
goals reﬂecting the Company’s aim to deliver exceptional 
shareholder value over the ﬁve years from 2004.  A further 
award was made to Mr Carlisle in June 2006 to incentivise him 
to achieve similar targets over a three year period to May 2009. 
Awards were granted as nil cost share options.
The table below demonstrates the vesting of awards under the 
LTIP according to absolute TSR growth;
 Vesting  
TSR Performance of Award (%)
Below 130% Nil
130% 35
Between 130% and 180% 35 - 100
 on a straight line  
 basis
180% or more 100
Additionally the awards will not vest unless there has been 
EPS growth of at least 10% per annum above RPI over the 
performance period.
Details of awards under this plan are shown on page 63.
Executive directors may also participate in the Group’s Save As 
You Earn Scheme (where share options are exercisable after 
three or ﬁve years at a discount of up to 20% of the market 
value of the shares at the time of grant) and in the Share 
performance criteria are attached to these schemes.
In 2005, the Key Executive Incentive Plan (2005 KEIP) was 
introduced in order to incentivise Homeserve’s senior 
executives (other than executive directors) to deliver its 
stretching growth plans for the three-year period to March 
2008.  The 2005 KEIP is a share option plan, under which 
options are only exercisable in full in the event that stretching 
proﬁt targets (signiﬁcantly in excess of budget) are achieved 
in 2007/8 and the Company’s share price reaches an average 
of at least £17.50 for a three-month period during the 2008/9 
ﬁnancial year.  Once the performance targets have been 
met, executives may only exercise 50% of the total amount 
exercisable; the remaining 50% are not exercisable until two 
years later.
Most grants under the KEIP were made in June 2005, when 
the Company’s share price was £9.61. Grants under the KEIP 
have continued to be made to senior executives joining the 
Company during the year but it is not envisaged that further 
grants will be made under this scheme.
Executive directors were not eligible to participate in the 2005 
KEIP .
Beneﬁts
Non-pension beneﬁts comprise company car and fuel 
allowance and medical insurance.  The range of beneﬁts and 
their value are considered to be broadly in line with those 
provided to executive directors in similar companies in the 
FTSE-250.   
Shareholding guidelines
It is the Board’s policy that executive directors and certain 
members of the Company’s senior management build up 
and retain a minimum shareholding in the Company.  Each 
executive director is encouraged to hold shares of at least equal 
value to his annual basic salary.  
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Incentive Plan on the same basis as all other employees. No  Remuneration Report  
Homeserve plc 54 Homeserve plc 55
Report & Accounts 2007
Accordingly, if the holding guideline has not been fulfilled at 
the point of exercise of any option or the vesting of any other 
long term incentive award, the director must retain 50% of 
the net proceeds in the Company’s shares until the holding 
requirement is achieved.  
Service contracts
The Committee’s policy is to offer service contracts with 
notice periods of one year or less (other than, in exceptional 
circumstances, where longer initial notice periods may be 
offered on appointment, and then reduced to one year over 
time).
All executive directors’ contracts of service are terminable on 
twelve months’ notice by either party.  Further details of the 
executive directors’ contracts are summarised in the table 
below:
 
Name of director Date of contract
B H Whitty 28 March 1996
R D Harpin 18 January 2002
J Florsheim 5 March 2007
I Carlisle 1 April 2005
J Simpson-Dent 18 May 2007
Liquidated damages are limited to the payment of one year’s 
remuneration, including benefits. Notice periods and payments 
are not extendable in takeover situations.
Pensions
Executive directors currently participate in one of two pension 
schemes, the Water Companies Pension Scheme (WCPS) or the 
Homeserve Money Plan (HMP).   The normal date of retirement 
for executive directors is at age 60.   Both arrangements are 
non-contributory for executive directors.
The WCPS is a funded, Inland Revenue approved occupational 
defined benefit scheme.   Brian Whitty, Richard Harpin and 
Ian Carlisle are members of the WCPS.   In respect of these 
directors, its main features were:
•  pension at normal retirement age of one-half of final 
pensionable salary and a tax free lump sum of one and a 
half times final pensionable salary on completion of 40 years’ 
service at an accrual rate of 80ths plus 3/80ths cash;
• life assurance of five times pensionable salary for Brian Whitty 
or five times basic salary for Richard Harpin and Ian Carlisle;
• pension payable in the event of ill health; and
• spouse’s pension on death.  
Where the benefits provided to executive directors under 
the WCPS are restricted as a result of an ‘earnings cap’ based 
on the Inland Revenue cap, indexed in line with earnings 
which was implemented by the Board with effect from 6 April 
2006, further provision is made through unapproved money 
purchase arrangements (for Richard Harpin and Ian Carlisle) by 
making a cash payment of 20% of the amount by which the 
executive director’s basic salary exceeds the cap. 
With effect from 6 April 2006, all of Brian Whitty’s retirement 
benefits are provided through the WCPS, on the basis of a 
pension accrual rate of 45ths of actual basic salary for future 
service (without any additional lump sum).
The HMP is a funded, Inland Revenue approved occupational 
defined contribution pension scheme.  Jon Florsheim and 
Jonathan Simpson-Dent are members of the HMP , having 
joined since the year end.  In respect of Jonathan Simpson-
Dent, its main features are:
• employer contributions of 20%;
• life assurance of five times basic salary;
• permanent health insurance; and
• spouse’s pension on death
In respect of Jon Florsheim, its main features are;
• employer contributions of 8%;
• life assurance of five times basic salary;
• permanent health insurance; and
• spouse’s pension on death
Where the benefits provided to executive directors under the 
scheme are restricted as a result of the ‘earnings cap’ described 
above, further provision is made by making a payment of 20% 
in cash of the amount by which his basic salary exceeds the cap 
in respect of Jonathan Simpson-Dent, and 8% into the HMP in 
respect of Jon Florsheim. Remuneration Report  
Report & Accounts 2007
Homeserve plc 56 Homeserve plc 57
Jon Florsheim
In March 2007, Jon Florsheim joined the Group as Chief 
Executive of Homeserve GB, the Group’s largest business. 
He was previously Chief Marketing Oﬃcer of British Sky 
Broadcasting plc (BSkyB). The Committee recognised that, 
in order to attract a senior executive of his calibre and 
background, capable of continuing and extending Homeserve 
GB’s consistently exceptional growth, it would be necessary to 
oﬀer a remuneration package comparable with that previously 
payable to him at BSkyB. It also recognised that it was necessary 
to compensate him for awards granted to him under BSkyB’s 
long-term incentive schemes which remained unvested at the 
time of his joining the Group and would have almost certainly 
vested had he remained employed.
Accordingly, the Committee, with the support of the 
Company’s executive directors, agreed that it should depart 
from its existing remuneration policy in devising its strategy for 
determining the remuneration payable to Mr Florsheim.
His basic annual salary, at £450,000, and annual bonus of 
150% of salary, exceeds the upper quartile of those payable 
to directors with similar roles and responsibilities in the 
Committee’s chosen comparator group but is comparable with 
that payable to him at BSkyB. In respect of his bonus objectives, 
up to 100% of his salary will be payable upon the achievement 
of targets applicable to all other executive directors; the 
remaining maximum 50% will be entirely dependent upon of 
the achievement of stretching targets relating to Homeserve 
GB. 
Immediately following his appointment in March 2007, and 
pursuant to Listing Rule 9.4.2. (2) (LR 9.4.2), the Committee 
made a grant to Jon Florsheim under a Conditional Share 
Scheme (CSS) and a grant of shares under a key executive share 
option plan (the JF KEIP), in order partially to compensate him 
for the unvested awards under BSkyB’s long term incentive 
plans, which lapsed on his resignation from that company, and 
to incentivise his performance in alignment with other senior 
executives in the Company. The conditional shares will vest 
in tranches, on the ﬁrst (25%), second (25%) and third (50%) 
anniversary of grant.  The options granted under the JF KEIP are 
only exercisable in full if the Company’s growth plans, which 
signiﬁcantly exceed its budget, and a signiﬁcant increase in the 
Company’s share price are achieved. Once the performance 
target has been met, 50% of the exercisable option will vest 
after three years; the remaining 50% are exercisable two years 
later.  These awards were granted on a ‘one-oﬀ’ basis; future 
awards under the Company’s existing long term incentive 
schemes will be made to Jon Florsheim on the same basis as to 
other executive directors. Further details of the CSS and JF KEIP 
are provided opposite. 
As noted above, the Committee has determined that the 
remuneration package payable to Jon Florsheim represents 
a departure from its current remuneration strategy. It has not 
and will not be taken into account when determining the 
remuneration payable to other directors.
Jonathan Simpson-Dent
Immediately following his appointment as a director in March 
2007, awards were granted to Jonathan Simpson-Dent under a 
ket executive share option plan which was also implemented 
pursuant to LR 9.4.2 (the JSD KEIP). This scheme is identical to 
the JF KEIP and awards were granted on the same basis. Again, 
the Committee has no intention of making further awards 
under the JSD KEIP .
Further details of the JSD KEIP are provided opposite.
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Homeserve plc 56 Homeserve plc 57
Report & Accounts 2007
Awards under each of the above schemes will be forfeit if 
the participant ceases to be a director or employee of the 
Company unless his employment ceases by reason of death, 
retirement, injury or disability, or redundancy, the transfer by 
the Company of a company which at the time of the transfer is 
his employer, or any other reason determined at the discretion 
of the Committee. In these circumstances, the Committee may 
use its discretion to allow the award to vest in full or in part 
and subject to such conditions as it sees ﬁt, and in relation to 
the CSS, where the Committee determines that an award may 
vest, it will pro-rate the number of shares to vest in accordance 
with the participant’s length of service. If the participant is 
transferred overseas whilst in the Company’s employment 
and as a result of such transfer he will either suﬀer a tax 
disadvantage on the exercise of the option or vesting of the 
award, as the case may be, or become subject to restrictions 
on his ability to exercise the option or receive the award, 
due to the laws of the country to which he is transferred, the 
Committee may permit the early exercise of such options or 
vesting of such awards, as the case may be. 
In the event of a take-over (not being an internal 
reorganisation) or the voluntary winding-up of the Company, 
the rules of each of the above schemes provide that awards 
may vest early, subject to the application of pro-rated 
reductions to take into account the length of time elapsed 
since the grant of the award. In the event of an internal 
reorganisation, the Committee may determine that existing 
awards be replaced by equivalent new awards over shares in a 
new holding company.
The awards under each of the above schemes are over shares 
held by the Employee Beneﬁt Trust and do not confer any 
shareholder rights until shares thereunder are transferred.
Details of CSS, JF KEIP and JSD KEIP
 CSS JF KEIP JSD KEIP
Participant Jon Florsheim Jon Florsheim Jonathan Simpson-Dent
12 March 2007 30 March 2007 30 March 2007
49,207  100,278 66,852
Price of shares at award date (£) 18.29 17.95 17.95
Option exercise price (£) N/A 17.95 17.95
Pensionable? No No No
  
Performance Period 1 (25%), 2 (25%) and 3 (50%)  3 (50%) years from grant or  3 (50%) years from grant or  
 years from grant satisfaction of all performance  satisfaction of all performance  
  of all performance conditions,  of all performance conditions, 
   whichever is later; remaining whichever is later; remaining  
  50% vest 2 years later 50% vest 2 years later 
Minimum share price for options  
to be exercisable (£) 
N/A 32.50 (between 1 January  32.50 (between 1 January  
  and 31 December 2010) and 31 December 2010) 
Other performance targets Continued employment  Company proﬁt growth, Company proﬁt growth, 
 at vesting date continued employment  continued employment 
  at vesting date at vesting date
AR 2007 back half (20).indd   57 25/5/07   18:48:22
Date of grant 
Maximum award (shares) 
Performance conditions  Remuneration Report  
Report & Accounts 2007
Homeserve plc 58 Homeserve plc 59
The provisions in each of the above-mentioned schemes 
relating to the participants, the beneﬁts subject to the schemes, 
the maximum entitlement under the schemes and that basis 
for determining the beneﬁts to be provided thereunder in the 
event of any variation of the Company’s share capital may not 
be altered to the advantage of the participant without the 
prior approval of shareholders in general meeting. However, 
this prior approval will not be required for any minor alteration 
to each of the schemes to beneﬁt their administration, to take 
account of a change in legislation or to obtain or maintain 
favourable tax, exchange control or regulatory treatment for 
the participants or other employee or for any alteration to the 
performance conditions in the JF KEIP and JSD KEIP following 
an event which causes the Committee reasonably to consider 
that it would be appropriate to amend those performance 
conditions, which, once amended, will in the Committee’s 
reasonable opinion not be materially more or less diﬃcult to 
satisfy.
Non-executive directors
Non-executive directors serve under letters of appointment for 
periods of three years which include provisions in respect of 
liquidated damages limited to the payment of one year’s fee.   
Their fees are determined by the Board within the limits set by 
the Articles of Association and based on information on fees 
paid in similar companies.   Non-executive directors are not 
entitled to bonus payments or pension arrangements, nor do 
they participate in the Company’s long term incentive plans.  
During the year, following a review of market practice for 
similar roles in FTSE-250 companies, the fee structure for non-
executive directors was revised to reﬂect the time commitment 
and responsibility for carrying out non-executive duties.  The 
basic fee for serving as a non-executive director was set at 
£37,500 per annum, the fee for chairing a committee of the 
Board was set at £7,500 and the fee payable to members of 
each committee who are not the Chair agreed at £2,500.  An 
additional fee of £5,000 is payable to the senior independent 
non-executive director.
Details of their current three year appointments are as follows:
Name of director Date of contract
J M B Gibson 6 April 2004
J H Maxwell 6 April 2004
I Chippendale 1 January 2007
Executive Board
The following table sets out the base salaries of executive 
members of the Executive Board (other than executive 
directors) on a banded basis at 31 March 2007.
Base salary range Number of employees
£200,001 - £250,000 2
£150,001 - £200,000 3
Performance graph
The graph below shows the Company’s performance, 
measured by TSR, compared with the performance of the FTSE-
350 Index (also measured by TSR) for the ﬁve years ended 31 
March 2007.  This comparator has been chosen as it is used in 
respect of the Deferred Bonus Plan.
31 Mar 02 31 Mar 03 31 Mar 04 31 Mar 05 31 Mar 06 31 Mar 07
400
350
300
250
200 
150
100 
50 
0
Homeserve plc FTSE 350 index
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Homeserve plc 58 Homeserve plc 59
Report & Accounts 2007
Audited information
Directors’ Emoluments
      
    Compensation
 Basic    for loss of Total emoluments      
 salary Beneﬁts Bonus   oﬃce and compensation
     2007 2006  
 £’000 £’000 £’000 £’000 £’000 £’000
Executive      
B H Whitty  400 32 320 — 752 611
R D Harpin  360 29 288 — 677 579
A J Belk *  240 24 190 345 799 410
I Carlisle  300 25 246 — 571 479
J Florsheim *  96 1 — — 97 —
J Simpson-Dent *  25 1 — — 26 —
      
Non Executive      
J H Maxwell  53 — — — 53 48
J A S Jewitt*  36 — — — 36 43
J M B Gibson  44 — — — 44 35
I H Chippendale *  11 — — — 11 —
Total 2007  1,565 112 1,044 345 3,066 —
Total 2006  1,301 108 796 — — 2,205
* Andrew Belk resigned on 30 March 2007
 Jon Florsheim was appointed on 5 March 2007
 Jonathan Simpson-Dent was appointed on 30 March 2007
 Justin Jewitt resigned on 1 January 2007
 Ian Chippendale was appointed on 1 January 2007
The annual bonus payable to each director in respect of 2006/7 represents the achievement of the Company’s proﬁt growth target 
(64%) and the achievement by each director of his personal targets (from 15% to 16%).
The amounts paid to Andrew Belk as compensation for loss of oﬃce represent pay in lieu of his contractual salary and beneﬁts from 
the date of the termination of his employment on 30 April 2007 to the date on which his notice period would have expired had that 
notice period been served in full (23 January 2008).
31 Mar 02 31 Mar 03 31 Mar 04 31 Mar 05 31 Mar 06 31 Mar 07
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Report & Accounts 2007
Homeserve plc 60 Homeserve plc 61
Aggregate directors’ remuneration
The total amounts for directors’ remuneration were as follows:
     2007 2006  
     £’000 £’000
Emoluments     2,721 2,205
Compensation for loss of oﬃce     345 —
Gains on exercise of share options     1,244 1,300
Money purchase pension contributions     137 436
     4,447 3,941
Directors’ pensions
Three directors were members of the Company’s deﬁned beneﬁt pension scheme.  The following directors had accrued entitlements 
under the scheme as follows:
      Transfer 
    Increase  value of 
    in accrued  increase 
   Accrued  pension Accrued in the year 
   pension in the year pension less 
   31 March in excess of 31 March directors’ 
   2007  inﬂation 2006  contributions
   £’000 £’000 £’000 £’000
B H Whitty   23 9 14 145
R D Harpin   20 6 14 69
I Carlisle   5 1 4 18
The following table sets out the transfer value of the director’s accrued beneﬁts under the scheme calculated in a manner consistent 
with “Retirement Beneﬁt Scheme – Transfer Values (GN 11)” published by the Institute of Actuaries and the Faculty of Actuaries.
     Increase 
   Transfer  in transfer Transfer 
   value Contributions value in the value 
   31 March made by the year net of 31 March 
   2007  director  contributions  2006
   £’000 £’000 £’000 £’000
B H Whitty   419 — 169 250
R D Harpin   244 — 99 145
I Carlisle   67 — 25 42
The transfer values disclosed above do not represent a sum paid or payable to the individual director.  Instead they represent a 
potential liability of the pension scheme.
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Homeserve plc 60 Homeserve plc 61
Report & Accounts 2007
Three directors were members of money purchase schemes during the year.  Contributions paid by the Company in respect of such 
directors were as follows:
     2007 2006 
     £’000 £’000
B H Whitty     — 313
R D Harpin     50 44
A J Belk     48 46
I Carlisle     38 33
J Florsheim     — —
J Simpson-Dent     — —
Directors’ shareholdings
The beneﬁcial interests of directors who served at the end of the year, together with those of their families, in the shares of the 
Company are as follows:
       
     31 March 31 March
     2007  2006
B H Whitty     97,961 82,480
R D Harpin     10,987,609 10,852,459
A J Belk     20,945 15,576
I Carlisle     19,096 9,699
J Florsheim     —  —
J Simpson-Dent     —  —
J H Maxwell     25,390 20,000
I H Chippendale     —  —
J M B Gibson     6,675 6,675
There were no changes in the directors’ interests in shares between 31 March and 21 May 2007.
Directors’ options and long term incentives
Save as you earn (Sharesave) schemes
Details of the share options held by directors under SAYE Schemes are as follows:
       Date 
 31 March Granted Exercised 31 March Option Date exercisable  
 2007 during year during year 2006 price granted from
B H Whitty 3,524 — — 3,524 466.0p 10.12.02 1.2.08
R D Harpin 1,753 — — 1,753 918.0p 23.12.05 1.3.11
A J Belk 1,018 — — 1,018 918.0p 23.12.05 1.3.09
I Carlisle 1,744 — — 1,744 543.0p 30.12.04 1.3.08
SAYE options are exercisable for a six month period from the date shown.
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Report & Accounts 2007
Homeserve plc 62 Homeserve plc 63
Executive share option plan
Details of the share options held by directors under the Executive Share Option Plan are as follows:
 
  31 March Granted Exercised 31 March Option Date 
  2007 during year during year 2006 price granted
B H Whitty  72,500 — — 72,500 550.0p 17.7.01
  65,000 — — 65,000 589.0p 8.7.02
  80,000 — — 80,000 470.0p 1.7.03
  99,500 — — 99,500 661.0p 27.5.04
  55,000 — — 55,000 961.0p 28.6.05
  42,644 42,644 — — 1407.0p 23.5.06
R D Harpin  49,000 — — 49,000 550.0p 17.7.01
  44,000 — — 44,000 589.0p 8.7.02
  60,000 — — 60,000 470.0p 1.7.03
  83,000 — — 83,000 661.0p 27.5.04
  51,000 — — 51,000 961.0p 28.6.05
  38,380 38,380 — — 1407.0p 23.5.06
A J Belk  — — 12,500 12,500 550.0p 17.7.01
  — — 17,500 17,500 589.0p 8.7.02
  — — 36,000 36,000 466.0p 13.11.02
  — — 50,000 50,000 470.0p 1.7.03
  59,000 — — 59,000 661.0p 27.5.04
  36,000 — — 36,000 961.0p 28.6.05
  25,586 25,586 — — 1407.0p 23.5.06
I Carlisle  42,500 — — 42,500 470.0p 1.7.03
  65,000 — — 65,000 661.0p 27.5.04
  42,500 — — 42,500 961.0p 28.6.05
  31,983 31,983 — — 1407.0p 23.5.06
Executive Share Options are exercisable between three and ten years from the date of grant subject to the satisfaction of the 
performance targets disclosed in the unaudited section of this report.  For options granted after 2004 retesting is not permitted 
but for options granted before that date retesting of the performance criteria is permitted in years four and ﬁve with performance 
measured from a ﬁxed date.
The price of an ordinary share on 24 May 2006 when Andrew Belk exercised options over 66,000 shares was £14.96.  The price of an 
ordinary share on 29 September 2006 when he exercised options over 50,000 shares was £16.63. The aggregate gain on options 
exercised was £1.2m (2006: £1.3m).
From 2005, the normal maximum annual grant under the ESOP is 150% of salary, save in exceptional cases, for example on the 
appointment of a new executive director from outside of the Group.
Awards granted under the ESOP will lapse on the date that an executive leaves the Company’s employment, except in the case of 
retirement, illness, redundancy or death, where the Committee has a discretion to allow options to be retained by the executive 
subject to such performance conditions as it wishes to impose. 
There were no changes in the options held between 31 March and 21 May 2007.
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Homeserve plc 62 Homeserve plc 63
Report & Accounts 2007
EPS growth is calculated by the Company and independently veriﬁed by NBSC.  As at March 2007, the Company’s year on year 
EPS growth during the period since the date options were granted in 2003, 2004 and 2005 respectively is in each case in excess of 
10%.  If this level of performance were to continue until the date on which each grant becomes exercisable, all options would be 
exercisable in full.
Long term incentive plan
Details of the maximum number of shares receivable from conditional awards made under the Long Term Incentive Plan are as 
follows:
  31 March Awarded Lapsed Vested 31 March Date 
  2007 during year during year during year 2006 granted
B H Whitty  99,500 — — — 99,500 27.5.04
R D Harpin  83,000 — — — 83,000 27.5.04
A J Belk  59,000 — — — 59,000 27.5.04
I Carlisle  65,000 — — — 65,000 27.5.04
I Carlisle  29,940 29,940 — — — 8.6.06
Awards will only vest in full if the Company’s absolute TSR exceeds 180% by the ﬁfth anniversary of the date of grant and the annual 
average EPS growth in the ﬁve year period exceeds RPI by at least 10% pa.  No part of the award will vest if absolute TSR growth is 
less than 130% over the ﬁve year performance period.
TSR is independently calculated by NBSC and veriﬁed by the Committee.  At March 2007, NBSC has estimated that the Company’s 
absolute TSR growth in the period since the date of the award is 204%.  Accordingly, if no further increase in the Company’s TSR 
occurs in the remainder of the performance period, 100% of the maximum number of options would be exercisable.
Conditional share scheme awards
Details of the maximum number of shares receivable under the CSS are as follows:
  31 March Awarded Lapsed Vested 31 March Date 
  2007 during year during year during year 2006 granted
J Florsheim  49,207 49,207 — — — 12.3.07
25% of the award will vest on the ﬁrst anniversary of the grant, 25% of the award will vest on the second anniversary of the grant and 
the remaining 50% of the award will vest on the third anniversary of the grant, all providing Mr Florsheim remains in Homeserve’s 
employment at the date of vesting.
JF and JSD KEIP Awards
Details of the individual share option awards held by directors are as follows:
  31 March Granted Exercised 31 March Option Date 
  2007 during year during year 2006 price granted
J Florsheim  100,278 100,278 — — 1795.0p 30.3.07
J Simpson-Dent  66,852 66,852 — — 1795.0p 30.3.07
The awards will vest in two tranches, with 50% of the award vesting at the earliest on the third anniversary of the date of grant 
and 50% two years later.  The awards are subject to performance conditions in respect of PBT and Homeserve’s share price.  These 
conditions will be independently veriﬁed by NBSC.
AR 2007 back half (20).indd   63 25/5/07   18:48:23 Remuneration Report  
Report & Accounts 2007
Homeserve plc 64 Homeserve plc 65
Deferred Bonus Plan
Details of the maximum number of shares receivable from conditional awards made under the Deferred Bonus Plan are as follows:
  31 March Awarded Lapsed Vested 31 March Date 
  2007 during year during year during year 2006 granted
B H Whitty  70,626 — — — 70,626 2.8.05
  46,443 46,443 — — — 25.5.06
R D Harpin  58,854 — — — 58,854 2.8.05
  45,090 45,090 — — — 25.5.06
A J Belk  28,536 — — — 28,536 2.8.05
  16,107 16,107 — — — 25.5.06
I Carlisle  22,827 — — — 22,827 2.6.05
  28,191 28,191 — — — 25.5.06
The performance conditions attached to the conditional awards are the same as those set out in the unaudited section of the report 
on page 53.  The price of an ordinary share on 25 May 2006, when the awards were made during the year, was £15.88.
At March 2007, the Company’s TSR performance in the period from the date of grant of awards is below the upper decile in 
comparison with the comparator Group.  If this performance were unchanged at the end of the performance period, the number of 
matching shares available to each participant would be 2.65 for the 2005 awards and 1.24 for the 2006 awards.
The market price of the Company’s shares at 31 March 2007 was £17.83 (2006: £14.50).  During the year the price ranged from £13.37 
to £19.29.
Ordinary shares required to fulﬁl entitlements granted under the current schemes from 2004 onwards are provided by the Employee 
Beneﬁt Trust (EBT).  As beneﬁciaries under the EBT, the directors are deemed to be interested in the shares held by the EBT which at 
31 March 2007 amounted to 2,530,000 ordinary shares. 
J M Barry Gibson
Chairman of the Remuneration Committee
21 May 2007
Statement of Directors’ Responsibilities 
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By Order of the Board      Remuneration Report  
Homeserve plc 64 Homeserve plc 65
Report & Accounts 2007
The directors are responsible for preparing the Annual Report, 
Directors’ Remuneration Report and the ﬁnancial statements in 
accordance with applicable law and regulations.
Company law requires the directors to prepare ﬁnancial 
statements for each ﬁnancial year. The directors are required by 
the IAS Regulation to prepare the Group ﬁnancial statements 
under International Financial Reporting Standards (IFRSs) 
as adopted by the European Union and have also elected 
to prepare the parent company ﬁnancial statements in 
accordance with IFRSs as adopted by the European Union. The 
ﬁnancial statements are also required by law to be properly 
prepared in accordance with the Companies Act 1985 and 
Article 4 of the IAS Regulation.  
International Accounting Standard 1 requires that ﬁnancial 
statements present fairly for each ﬁnancial year the Company’s 
ﬁnancial position, ﬁnancial performance and cash ﬂows.  
This requires the faithful representation of the eﬀects of 
transactions, other events and conditions in accordance 
with the deﬁnitions and recognition criteria for assets, 
liabilities, income and expenses set out in the International 
Accounting Standards Board’s ‘Framework for the preparation 
and presentation of ﬁnancial statements’ .  In virtually all 
circumstances, a fair presentation will be achieved by 
compliance with all applicable IFRSs.  However, directors are 
also required to:
• properly select and apply accounting policies;
• present information, including accounting policies, in a 
manner that provides relevant, reliable, comparable and 
understandable information; and 
• provide additional disclosures when compliance with the 
speciﬁc requirements in IFRSs are insuﬃcient to enable 
users to understand the impact of particular transactions, 
other events and conditions on the entity’s ﬁnancial 
position and ﬁnancial performance.
Statement of Directors’ Responsibilities 
The directors are responsible for keeping proper accounting 
records that disclose with reasonable accuracy at any time the 
ﬁnancial position of the Company and enable them to ensure 
that the ﬁnancial statements comply with the Companies Act 
1985. They are also responsible for safeguarding the assets of 
the Company and hence for taking reasonable steps for the 
prevention and detection of fraud and other irregularities.
The directors are responsible for the maintenance and 
integrity of the corporate and ﬁnancial information included 
on the Company’s website. Legislation in the United Kingdom 
governing the preparation and dissemination of ﬁnancial 
statements may diﬀer from legislation in other jurisdictions.
AR 2007 back half (20).indd   65 25/5/07   18:48:24 Independent Auditors’ Report 
Report & Accounts 2007
Homeserve plc 66 Homeserve plc 67
Independent auditors’ report to the members of 
Homeserve plc
We have audited the group ﬁnancial statements of Homeserve 
plc for the year ended 31 March 2007 which comprise the Group 
Income Statement, the Group Balance Sheet, the Group Cash 
Flow Statement, the Group Statement of Recognised Income 
and Expense and the related notes 1 to 39. These Group ﬁnancial 
statements have been prepared under the accounting policies 
set out therein. We have also audited the information in the 
Directors’ Remuneration Report that is described as having been 
audited.
We have reported separately on the parent company ﬁnancial 
statements of Homeserve plc for the year ended 31 March 2007.
This report is made solely to the Company’s members, as a body, 
in accordance with section 235 of the Companies Act 1985.  Our 
audit work has been undertaken so that we might state to the 
Company’s members those matters we are required to state 
to them in an auditors’ report and for no other purpose.  To the 
fullest extent permitted by law, we do not accept or assume 
responsibility to anyone other than the Company and the 
Company’s members as a body, for our audit work, for this report, 
or for the opinions we have formed.
Respective responsibilities of directors and auditors 
The directors’ responsibilities for preparing the Annual Report, 
the Directors’ Remuneration Report and the Group ﬁnancial 
statements in accordance with applicable law and International 
Financial Reporting Standards (IFRSs) as adopted by the 
European Union are set out in the Statement of Directors’ 
Responsibilities.
Our responsibility is to audit the Group ﬁnancial statements in 
accordance with relevant legal and regulatory requirements and 
International Standards on Auditing (UK and Ireland).
We report to you our opinion as to whether the Group ﬁnancial 
statements give a true and fair view, whether the Group ﬁnancial 
statements have been properly prepared in accordance with 
the Companies Act 1985 and Article 4 of the IAS Regulation 
and whether the part of the directors’ remuneration report 
described as having been audited has been properly prepared in 
accordance with the Companies Act 1985. We also report to you 
whether in our opinion the information given in the Directors’ 
Report is consistent with the Group ﬁnancial statements. The 
information given in the Directors’ Report includes that speciﬁc 
information presented in the Chairman’s Statement, Chief 
Executive’s Review and Financial Review that is cross referred 
from the Business Review section of the Directors’ Report.
In addition we report to you if, in our opinion, we have not 
received all the information and explanations we require for 
our audit, or if information speciﬁed by law regarding director’s 
remuneration and other transactions is not disclosed.
We review whether the Corporate Governance Statement 
reﬂects the company’s compliance with the nine provisions of 
the 2003 Combined Code speciﬁed for our review by the Listing 
Rules of the Financial Services Authority, and we report if it 
does not. We are not required to consider whether the Board’s 
statements on internal control cover all risks and controls, or 
form an opinion on the eﬀectiveness of the Group’s corporate 
governance procedures or its risk and control procedures.
We read the other information contained in the Annual Report 
as described in the contents section and consider whether it 
is consistent with the audited Group ﬁnancial statements. We 
consider the implications for our report if we become aware of 
any apparent misstatements or material inconsistencies with the 
Group ﬁnancial statements. Our responsibilities do not extend to 
any further information outside the Annual Report.
Basis of audit opinion 
We conducted our audit in accordance with International 
Standards on Auditing (UK and Ireland) issued by the Auditing 
Practices Board. An audit includes examination, on a test basis, of 
evidence relevant to the amounts and disclosures in the Group 
ﬁnancial statements and the part of the Directors’ Remuneration 
Report to be audited. It also includes an assessment of the 
signiﬁcant estimates and judgments made by the directors 
in the preparation of the Group ﬁnancial statements, and of 
whether the accounting policies are appropriate to the Group’s 
circumstances, consistently applied and adequately disclosed.
We planned and performed our audit so as to obtain all the 
information and explanations which we considered necessary in 
order to provide us with suﬃcient evidence to give reasonable 
assurance that the Group ﬁnancial statements and the part 
of the Directors’ Remuneration Report to be audited are free 
from material misstatement, whether caused by fraud or other 
irregularity or error. In forming our opinion we also evaluated the 
overall adequacy of the presentation of information in the Group 
ﬁnancial statements and the part of the Directors’ Remuneration 
Report to be audited.
AR 2007 back half (20).indd   66 25/5/07   18:48:24 Independent Auditors’ Report 
Homeserve plc 66 Homeserve plc 67
Report & Accounts 2007
Opinion 
In our opinion:
• the Group ﬁnancial statements give a true and fair view, in 
accordance with IFRSs as adopted by the European Union, of 
the state of the group’s aﬀairs as at 31 March 2007 and of its 
proﬁt for the year then ended;
• the Group ﬁnancial statements have been properly prepared 
in accordance with the Companies Act 1985 and Article 4 of 
the IAS Regulation; 
• the part of the Directors’ Remuneration Report described 
as having been audited has been properly prepared in 
accordance with the Companies Act 1985; and
• the information given in the Directors’ Report is consistent 
with the Group ﬁnancial statements.
Deloitte & Touche LLP 
Chartered Accountants and Registered Auditors  
Birmingham 
21 May 2007
AR 2007 back half (20).indd   67 25/5/07   18:48:25 Group Income Statement 
year ended 31 March 2007
Report & Accounts 2007
Homeserve plc  68 Homeserve plc 69
Group Statement of Recognised Income and Expense 
year ended 31 March 2007
       2007   2006  
  Note    £’000  £’000
Revenue  4    477,362  367 ,001
Operating costs:     
Amortisation of acquisition intangibles  14    (6,451) (3,658) 
Other operating costs      (407,822) (312,919)
Operating costs  6    (414,273) (316,577)
Share of results of joint ventures  17    555  328 
    
Operating profit      63,644  50,752 
    
Investment income  8    1,030  702 
Finance costs  9    (3,596) (1,478)
    
Profit before tax, amortisation of acquisition intangibles 
and tax on joint ventures      67,683 53,634 
    
Tax on joint ventures      (154) — 
Amortisation of acquisition intangibles  14    (6,451) (3,658)
    
Profit before tax      61,078  49,976 
    
Tax  10    (19,118) (15,527)
   
Profit for the year being attributable to equity 
holders of the parent      41,960  34,449 
    
Earnings per share    
Basic  12    67.3p 55.1p
Diluted  12    64.8p 53.6p
AR 2007 back half (20).indd   68 25/5/07   18:48:25 Group Income Statement 
year ended 31 March 2007
Homeserve plc  68 Homeserve plc 69
Report & Accounts 2007
Group Statement of Recognised Income and Expense 
year ended 31 March 2007
      2007 2006 
   Note   £’000 £’000
Exchange differences on translation of foreign operations  30   (56) 120
Actuarial gains/(losses) on defined benefit pension scheme  36   654  (422)
Current tax on additional pension contribution      132  468
Deferred tax on items taken directly to equity   21   (32) (415)
   
Net income/(expense) recognised directly in equity     698  (249)
   
Profit for the year      41,960  34,449
Total recognised income and expense for the year attributable  
to equity holders of the parent      42,658  34,200
AR 2007 back half (20).indd   69 25/5/07   18:48:25 Group Balance Sheet 
31 March 2007
Report & Accounts 2007
Homeserve plc 70 Homeserve plc 71
Group Cash Flow Statement
year ended 31 March 2007
       2007 2006 
      £’000 £’000 
  Note     Restated  
       (see note 2)
Non-current assets    
Goodwill  13    191,722  185,437 
Other intangible assets  14    42,072  31,824 
Property, plant and equipment  15    38,020  30,727 
Interests in joint ventures  17    1,747  1,192 
Deferred tax assets  21    211  — 
       273,772  249,180 
    
Current assets    
Inventories  18    7,236  5,708 
Trade and other receivables  19    158,692  127,913 
Cash and cash equivalents  19    14,885  17,081 
       180,813  150,702 
Total assets      454,585  399,882 
    
Current liabilities    
Trade and other payables  22    (161,435) (133,339)
Current tax liabilities      (11,523) (9,994)
Bank overdrafts and loans  20    (42,026) (33,411)
       (214,984) (176,744)
Net current liabilities      (34,171) (26,042)
    
Non-current liabilities    
Other financial liabilities  23    (8,506) (18,785)
Retirement benefit obligation  36    (647) (1,156)
Deferred tax liabilities  21    —  (2,088)
       (9,153) (22,029)
Total liabilities      (224,137) (198,773)
Net assets      230,448  201,109 
    
Equity    
Share capital  24    8,119  8,075 
Share premium account  25    31,379  29,998 
Merger reserve  26    70,992  70,992 
Own shares reserve  27    (25,047) (16,668)
Share incentive reserve  28    4,727  1,626 
Capital redemption reserve  29    1,200  1,200 
Currency translation reserve  30    64  120 
Retained earnings  31    139,014  105,766 
Total equity      230,448  201,109 
The financial statements were approved by the Board of directors and authorised for issue on 21 May 2007.  There were signed on its behalf by:
Jonathan Simpson-Dent
Chief Financial Officer            
21 May 2007 
AR 2007 back half (20).indd   70 25/5/07   18:48:26 Group Balance Sheet 
31 March 2007
Homeserve plc 70 Homeserve plc 71
Report & Accounts 2007
Group Cash Flow Statement
year ended 31 March 2007
       2007   2006  
  Note    £’000  £’000
Net cash from operating activities  33    52,538 41,046 
    
Investing activities   
Interest received      1,030  702 
Disposal of subsidiary undertakings      —  (1,342)
Proceeds on disposal of property, plant and equipment     611  301 
Purchases of intangible assets  14    (4,519) (1,572)
Purchases of property, plant and equipment  15    (12,609) (14,468)
Net cash outflow on acquisitions  32    (30,171) (34,674)
Net cash flow from discontinued investing activities      —  669 
Net cash used in investing activities      (45,658) (50,384)
    
Financing activities    
Dividends paid  11    (13,367) (10,688)
Repayments of borrowings      —  (2)
Repayments of obligations under finance leases      — (30)
Purchase of own shares  27    (8,379) (8,221)
Proceeds on issue of share capital  24    1,425  3,510 
Increase in bank overdrafts  20    11,245  27 ,097 
Net cash (used in)/from financing activities      (9,076) 1 1,666 
Net (decrease)/increase in cash and cash equivalents     (2,196) 2,328 
Cash and cash equivalents at beginning of year      17,081  14,753 
Cash and cash equivalents at end of year      14,885  17 ,081
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Homeserve plc 72 Homeserve plc  73
1. General information
Homeserve plc is a company incorporated in the United Kingdom under the Companies Act 1985. The address of the registered oﬃce is given on page 
40.  The nature of the Group’s operations and its principal activities are set out in note 5 and in the Chief Executive’s Review on pages 10 to 21.
These ﬁnancial statements are presented in pounds sterling because that is the currency of the primary economic environment in which the Group 
operates.  Foreign operations are included in accordance with the policies set out in note 2.
2. Signiﬁcant accounting policies
Basis of accounting
The ﬁnancial statements have been prepared in accordance with IFRSs, adopted by the European Union and therefore comply with Article 4 of the EU 
IAS Regulation. At the date of authorisation of these ﬁnancial statements, the following Standards and Interpretations which have not been applied in 
these ﬁnancial statements were in issue but not yet eﬀective:
IAS 23  Borrowing Costs (March 2007)
IFRS 7   Financial instruments: Disclosures; and the related amendment to IAS 1 on capital disclosures
IFRS 8   Operating Segments
IFRIC 4  Determining whether an Arrangement contains a Lease
IFRIC 5  Right to Interests Arising from Decommissioning, Restoration and Environmental Rehabilitation Funds
IFRIC 7  Applying the Restatement Approach under IAS 29 Financial Reporting in Hyperinﬂationary Economies
IFRIC 8  Scope of IFRS 2
IFRIC 9  Reassessment of embedded derivatives
IFRIC 10 Interim reporting and impairments
IFRIC 12 Service Concession Arrangements
The directors anticipate that the adoption of these Standards and Interpretations in future periods will have no material impact on the ﬁnancial 
statements of the Group.
The ﬁnancial statements have been prepared on the historical cost basis. The principal accounting policies adopted are set out below.
Basis of consolidation
The consolidated ﬁnancial statements incorporate the ﬁnancial statements of the Company and entities controlled by the Company made up to 31 
March each year.  Control is achieved where the Company has the power to govern the ﬁnancial and operating policies of an investee entity so as to 
obtain beneﬁts from its activities.
On acquisition, the assets and liabilities and contingent liabilities of a subsidiary are measured at their fair values at the date of acquisition.  Any excess 
of the cost of acquisition over the fair values of the identiﬁable net assets acquired is recognised as goodwill. 
The results of subsidiaries acquired or disposed of during the year are included in the consolidated income statement from the eﬀective date of 
acquisition or up to the eﬀective date of disposal, as appropriate.
Where necessary, adjustments are made to the ﬁnancial statements of subsidiaries to bring the accounting policies used into line with those used by 
the Group.
All intra-Group transactions, balances, income and expenses are eliminated on consolidation.
Investments in joint ventures
The Group’s share of results of joint ventures is included in the consolidated income statement using the equity method of accounting. The Group’s 
share of their net assets is included in the consolidated balance sheet, including associated goodwill.
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Report & Accounts 2007
Goodwill
Goodwill arising on consolidation represents the excess of the cost of acquisition over the Group’s interest in the fair value of the identiﬁable assets and 
liabilities of a subsidiary or joint venture at the date of acquisition.
Goodwill is recognised as an asset and reviewed for impairment annually or more frequently if there is an indication that it may be impaired.  Any 
impairment is recognised immediately in the income statement and is not subsequently reversed.
For the purpose of impairment testing, goodwill is allocated to each of the Group’s cash generating units expected to beneﬁt from the synergies of the 
combination.  If the recoverable amount is less than the carrying amount, the impairment loss is allocated ﬁrst to reduce the carrying amount of any 
goodwill allocated to the cash generating unit and then to the other assets of the unit pro-rata on the basis of the carrying amount of each asset in the 
unit.  An impairment loss recognised for goodwill is not reversed in a subsequent period.
On disposal of a subsidiary or joint venture, the attributable amount of goodwill is included in the determination of the proﬁt or loss on disposal.
Goodwill arising on acquisitions before the date of transition to IFRSs has been retained at the previous UK GAAP amounts subject to being tested for 
impairment at that date.  Goodwill written oﬀ to reserves under UK GAAP prior to 1998 has not been reinstated and is not included in determining any 
subsequent proﬁt or loss on disposal.
Revenue recognition
Revenue is measured at 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, VAT and other sales related taxes.
Policy Membership businesses
Revenue in respect of the Policy Membership businesses include amounts receivable from the sale of policies, stated net of commissions payable and 
Insurance Premium Tax.
Revenue is recognised on the sale of a policy except where an obligation exists to provide future services where an appropriate proportion of monies 
received in advance are treated as deferred income and recognised over the relevant period. Revenue from contracts of reinsurance is recognised on 
a straight-line basis over the life of the policies.  All associated costs are charged to the income statement as incurred. If claims costs under reinsurance 
contracts are expected to exceed revenue, the shortfall would be charged to the income statement immediately.
Emergency Services businesses
Revenue in the Emergency Services businesses represents amounts receivable, excluding VAT, from the sale of goods and services and is recognised on 
completion of the obligations relating to the work.
Leasing
Leases are classiﬁed as ﬁnance leases whenever the terms of the lease transfer substantially all the risks and rewards of ownership to the lessee.  All 
other leases are classiﬁed as operating leases.
Assets held under ﬁnance leases are recognised as assets of the Group at their fair value or, if lower, at the present value of the minimum lease 
payments, each determined at the inception of the lease.  The corresponding liability to the lessor is included in the balance sheet as a ﬁnance lease 
obligation.  Lease payments are apportioned between ﬁnance charges and reduction of the lease obligation so as to achieve a constant rate of interest 
on the remaining balance of the liability.
Rentals payable under operating leases are charged to income on a straight-line basis over the term of the relevant lease.  Beneﬁts received and 
receivable as an incentive to enter into an operating lease are also spread on a straight-line basis over the lease term.
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Report & Accounts 2007
Homeserve plc 74 Homeserve plc 75
Foreign currencies
Transactions in currencies other than pounds sterling 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.  
Non-monetary items that are measured at historical cost in a foreign currency are not retranslated. 
On consolidation, the assets and liabilities of the Group’s overseas operations are translated at exchange rates prevailing on the balance sheet date.  
Income and expense items are translated at the average exchange rates for the period unless exchange rates ﬂuctuate signiﬁcantly.  Exchange 
diﬀerences arising, if any, are classiﬁed as equity and transferred to the Group’s translation reserve.  Such translation diﬀerences are recognised as 
income or as expenses in the period in which the operation is disposed of.
Goodwill and fair value adjustments arising on the acquisition of a foreign entity are treated as assets and liabilities of the foreign entity and translated 
at the closing rate.
Borrowing costs
Borrowing costs are recognised in the income statement in the period in which they are incurred.
Operating profit
Operating proﬁt is stated after charging all operating costs and after the share of results of joint ventures but before investment income and ﬁnance 
costs.
Retirement benefit costs
Payments to deﬁned contribution retirement beneﬁt schemes are charged as an expense as they fall due.
For deﬁned beneﬁt retirement beneﬁt schemes, the cost of providing beneﬁts is determined using the projected unit credit method, with actuarial 
valuations being carried out at each balance sheet date.  Actuarial gains and losses are recognised in full in the period in which they occur.  They are 
recognised outside the income statement and presented in the statement of recognised income and expense.
Past service cost is recognised immediately to the extent that the beneﬁts are already vested, and otherwise is amortised on a straight-line basis over 
the average period until the beneﬁts become vested.
The retirement beneﬁt obligation recognised in the balance sheet represents the present value of the deﬁned beneﬁt obligation as adjusted for 
unrecognised past service cost, and as reduced by the fair value of scheme assets.  Any asset resulting from this calculation is limited to past service 
cost, plus the present value of available refunds and reductions in future contributions to the plan.
Taxation
The tax expense represents the sum of the tax currently payable and deferred tax.
The tax currently payable is based on taxable proﬁt for the year.  The Group’s liability for current tax is calculated using tax rates that have been enacted 
or substantively enacted by the balance sheet date.
Deferred tax is the tax expected to be payable or recoverable on diﬀerences between the carrying amounts of assets and liabilities in the ﬁnancial 
statements and the corresponding tax bases used in the computation of taxable proﬁt, and is accounted for using the balance sheet liability method.  
Deferred tax liabilities are generally recognised for all taxable temporary diﬀerences and deferred tax assets are recognised to the extent that it is 
probable that taxable proﬁts will be available against which deductible temporary diﬀerences can be utilised.  
Deferred tax liabilities are recognised for taxable temporary diﬀerences arising on investments in subsidiaries and interests in joint ventures, except 
where the Group is able to control the reversal of the temporary diﬀerence and it is probable that the temporary diﬀerence will not reverse in the 
foreseeable future.
The carrying amount of deferred tax assets is reviewed at each balance sheet date and reduced to the extent that it is no longer probable that suﬃcient 
taxable proﬁts will be available to allow all or part of the asset to be recovered.
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Report & Accounts 2007
Deferred tax is calculated at the tax rates that are expected to apply in the period when the liability is settled or the asset is realised.  Deferred tax is 
charged or credited in the income statement, except when it relates to items charged or credited directly to equity, in which case the deferred tax is 
also dealt with in equity.
Deferred tax assets and liabilities are oﬀset when there is a legally enforceable right to set oﬀ current tax assets against current tax liabilities and when 
they relate to income taxes levied by the same taxation authority and the Group intends to settle its current tax assets and liabilities on a net basis.
Property, plant and equipment
Property, plant and equipment is stated at cost less accumulated depreciation.
Depreciation is charged so as to write oﬀ the cost of assets, other than land, over their estimated useful lives, using the straight-line method, on the 
following bases:
Buildings 25 - 50 years
Furniture, ﬁxtures and equipment 7 years
Computer equipment 3 - 7 years
Motor vehicles 3 years (with 25% residual value)
Assets held under ﬁnance leases are depreciated over their expected useful lives on the same basis as owned assets or, where shorter, over the term of 
the relevant lease.
Intangible assets
Intangible assets that are acquired on acquisition of a subsidiary undertaking or business are stated at their fair value and are amortised over their useful 
lives as follows:
Customer relationships/databases 3 – 7 years
Franchise assets 3 – 15 years
Computer software and the related licences are stated at cost and amortised over their useful lives of 3 – 7 years.
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, if any.  Where the asset does not generate cash ﬂows that are independent from other assets, the Group estimates 
the recoverable amount of the cash-generating unit to which the asset belongs.
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 risks 
speciﬁc to the assets 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 or 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 or 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 or cash generating unit in prior years.  A reversal of an impairment loss is recognised as income 
immediately.
Inventories
Inventories are stated at the lower of cost and net realisable value.  Cost 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.  Provision is made for obsolete, slow 
moving or defective items where appropriate.
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Report & Accounts 2007
Homeserve plc 76 Homeserve plc 77
Financial instruments
Financial assets and ﬁnancial liabilities are recognised on the Group’s balance sheet when the Group becomes a party to the contractual provisions of 
the instrument.
Trade receivables
Trade receivables do not carry any interest and are stated at their nominal value as reduced by appropriate allowances for estimated irrecoverable 
amounts.
Cash and cash equivalents
Cash and cash equivalents comprise cash in hand and demand deposits, and other short term highly liquid investments that are readily convertible to a 
known amount of cash and are subject to an insigniﬁcant risk of changes in value.
Financial liabilities and equity
Financial liabilities and equity instruments are classiﬁed according to the substance of the contractual arrangements entered into.  An equity instrument 
is any contract that evidences a residual interest in the assets of the Group after deducting all of its liabilities.
Borrowings
Interest-bearing loans and overdrafts are recorded at the proceeds received, net of direct issue costs.  Finance charges, including premiums payable 
on settlement or redemption and direct issue costs, are accounted for on an accruals basis using the eﬀective interest method and are added to the 
carrying amount of the instrument to the extent that they are not settled in the period in which they arise.
Trade payables
Trade payables are not interest bearing and are stated at their nominal value.
Equity instruments
Equity instruments issued by the Company are recorded at the proceeds received, net of direct issue costs.
 
Share-based payments
The Group has applied the requirements of IFRS 2 Share-Based Payments.  In accordance with the transitional provision, IFRS 2 has been applied to all 
grants of equity instruments after 7 November 2002 that were unvested as of 1 April 2005.
The Group issues equity-settled share-based payments to certain employees.  Equity-settled share-based payments are measured at fair value 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 or Monte Carlo Simulation models depending on the type of scheme.
The Group also provides employees with the ability to purchase the Group’s ordinary shares at a discount to the current market value through Save As 
You Earn schemes.  The Group records an expense, based on its estimate of the discount related to shares expected to vest on a straight-line basis over 
the vesting period.
Restatement of deferred tax
While not previously deﬁned as provisional, during the year the Directors have reassessed the recoverability of the unused tax losses of Recommend 
Limited, trading as Improveline, a company acquired by the Group in 2006. Tax losses with a fair value of £1,585,000 have now been recognised which 
has resulted in a reduction in goodwill of £1,585,000 at 31 March 2006 (note 13) with a corresponding increase in deferred tax assets (note 21). 
The previously reported acquired net assets of Improveline were £2,344,000 resulting in goodwill of £9,093,000 and identiﬁed intangibles of 
£10,459,000. Following the restatement, the reported net assets at acquisition would have been £3,929,000, resulting in goodwill of £7,508,000. All other 
acquired balances remain unchanged. This adjustment has no impact on the reported earnings or net assets previously reported in 2006.
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Report & Accounts 2007
3. Judgements and estimation uncertainty
Revenue recognition
Within the Policy Membership business, an appropriate proportion of revenue is deferred to future periods when the Group has obligations extending 
to future periods. As a result, judgement is required in assessing the extent and associated costs of fulﬁlling those future obligations.  The Group uses 
historical experience and forecast activity levels in determining the appropriate amount of revenue to recognise in the current period and how much to 
defer to future periods. 
 
Impairment of goodwill 
The annual impairment assessment in respect of goodwill requires estimates of the value in use of cash generating units to which goodwill has been 
allocated to be calculated.  As a result, estimates of future cash ﬂows are required, together with an appropriate discount factor for the purpose of 
determining the present value of those cash ﬂows.  The carrying value of goodwill is £191,722,000 (2006: £185,437,000).
4. Revenue
An analysis of the Group’s revenue is as follows:
        2007  2006  
       £’000 £’000 
Provision of services       477,362  367,001 
Investment income (see note 8)       1,030  702 
        478,392  367,703 
  
Revenue from discontinued operations relating to the provision of services amounts to £nil (2006: £2,188,000).
5. Business and geographical segments
Business segments
For management purposes, the Group is organised into two operating divisions, Policy Membership and Emergency Services.  These divisions are the basis 
on which the Group reports its primary segment information.
Principal activities are as follows:
Policy Membership  
Provision of underwritten cover for a range of domestic emergencies including plumbing and drains, electrical wiring, gas, central heating, electrical and 
other appliances and furniture.
Emergency Services 
 Provision of claims repairs on behalf of Household Insurers and our policy holders, from fire and flood restoration, glazing, locks, window and door frames, 
drainage repairs and permanent building repairs.
In addition, the Group was previously involved in Commercial Outsourcing which was discontinued in 2005. There were no activities or results from this 
segment during 2007.  Amounts recorded in respect of 2006 relate to the completion of activities under a single contract, which was terminated during 
2005  and contributed revenue of £2,188,000 and profit before tax of £nil in 2006.
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Report & Accounts 2007
Homeserve plc 78 Homeserve plc 79
5. Business and geographical segments (continued)
Segment information about these businesses is presented below. 
       Policy Emergency  
      Membership Services Consolidated 
      2007 2007 2007 
      £’000 £’000 £’000
Revenue    
Total revenue      192,007  298,903  490,910 
Intra-segment sales      —  (1,694) (1,694)
       192,007  297,209  489,216 
Inter-segment sales        (11,854)
External sales        477,362 
    
Intra-Group sales are charged at prevailing market prices.    
    
Result    
Segment result before joint ventures and amortisation of acquisition intangibles   53,563  15,977  69,540 
Share of pre tax results of joint ventures      709  —  709 
       54,272  15,977  70,249 
Tax on joint ventures      (154) — (154)
Amortisation of acquisition intangibles      (884) (5,567) (6,451)
Operating profit      53,234  10,410  63,644 
Investment income        1,030 
Finance costs        (3,596)
Profit before tax        61,078 
Tax        (19,118)
Profit for the year being attributable to equity holders of the parent      41,960 
    
       Policy Emergency  
      Membership Services Consolidated 
      2007 2007 2007 
      £’000 £’000 £’000
Other information    
Capital additions      8,122  9,006  17,128 
Depreciation and amortisation      3,676  9,682  13,358 
    
Balance sheet    
Assets    
Segment assets      314,288  138,550  452,838 
Interests in joint ventures      1,747  — 1,747 
Total assets      316,035  138,550  454,585 
    
Liabilities    
Segment liabilities      (150,642) (73,495) (224,137)
   
 
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Report & Accounts 2007
       Policy Emergency  
      Membership Services Consolidated 
      2006 2006 2006 
      £’000 £’000 £’000
Revenue   
Total revenue      161,394  218,106  379,500 
Intra-segment sales      —  (128) (128)
       161,394  217,978  379,372 
Inter-segment sales        (12,371)
External sales        367,001 
   
Intra-Group sales are charged at prevailing market prices.   
   
Result   
Segment result before joint ventures and amortisation of acquisition intangibles   41,005  13,077  54,082 
Share of pre tax results of joint ventures      328  —     328 
       41,333  13,077  54,410
Tax on joint ventures       — — —
Amortisation of acquisition intangibles      (422) (3,236) (3,658)
Operating profit      40,911  9,841  50,752 
Investment income        702 
Finance costs        (1,478)
Profit before tax        49,976 
Tax        (15,527)
Profit for the year being attributable to equity holders of the parent      34,449 
   
     
      Policy Emergency  
      Membership Services Consolidated 
      2006 2006 2006 
      £’000 £’000 £’000 
       Restated Restated 
Other information       (see note 2) (see note 2)
Capital additions      9,911  6,129  16,040 
Depreciation and amortisation      2,617  6,624  9,241 
   
Balance sheet   
Assets   
Segment assets      239,341  159,349  398,690 
Interests in joint ventures      1,192  —  1,192 
Total assets      240,533  159,349  399,882 
   
Liabilities   
Segment liabilities      (149,190) (49,583) (198,773)
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Report & Accounts 2007
Homeserve plc 80 Homeserve plc  81
5. Business and geographical segments (continued)
Geographical segments
The Group’s operations are principally located within the United Kingdom.
The following table provides an analysis of the Group’s sales by geographical destination:
        Sales revenue by  
       geographical   
       market
        2007 2006  
       £’000 £’000 
United Kingdom       473,521  365,144 
United States       3,841  1,857 
        477,362  367,001 
The following is an analysis of the carrying amount of segment assets and additions to property, plant and equipment and intangible assets, analysed by 
the geographical area in which the assets are located:
       Additions to property,  
     Carrying amount plant and equipment  
      of segment assets and intangible assets
      2007   2006  2007  2006  
     £’000 £’000 £’000 £’000  
      Restated 
      (see note 2)
United Kingdom     445,528  398,346  16,689  15,993 
United States     9,057  1,536  439  47 
      454,585  399,882  17,128  16,040 
6. Proﬁt for the year
Profit for the year from continuing operations has been arrived at after charging:  
        2007  2006  
       £’000  £’000 
Included in operating costs:    
Depreciation of property, plant and equipment       5,169  4,115 
Cost of inventories recognised as expense       27,561       19,696 
Amortisation of software licences       1,738  1,468 
Staff costs       129,637  102,877 
Auditors’ remuneration for audit services       243  220 
Amortisation of customer relationship intangibles       4,325  2,128 
Amortisation of customer database intangibles       884  422 
Amortisation of franchise asset intangibles       1,242  1,108 
Other operating costs       243,474      184,543 
        414,273 316,577 
    
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Report & Accounts 2007
The analysis of auditors’ remuneration is as follows:
        2007 2006 
       £’000 £’000
Fees payable to the Company’s auditors for the audit of the Company’s annual accounts   39 33
Fees payable to the Company’s auditors and their associates for other services to the Group
The audit of the Company’s subsidiaries pursuant to legislation     204 187
Total audit fees       243 220
Other services pursuant to legislation       103 70
Tax services       227 137
Other services       — 45
Total non-audit fees       330 252
Fees payable to Deloitte & Touche LLP and their associates for non-audit services to the Company are not required to be disclosed because the 
consolidated financial statements are required to disclose such fees on a consolidated basis.
  
A description of the work of the Audit Committee is set out in the Corporate Governance statement on page 46 and includes an explanation of how 
auditor objectivity and independence is safeguarded when non-audit services are provided by the auditors.
7. Staﬀ costs
The average monthly number of employees (including executive directors) was:
        2007  2006  
       Number Number 
Policy Membership       1,231      1,090 
Emergency Services       3,087       2,749 
        4,318        3,839 
 
   
        £’000 £’000
Their aggregate remuneration comprised:    
Wages and salaries       115,381 90,006 
Social security costs       12,329 11,142 
Other pension costs (see note 36)       1,927 1,729 
        129,637 102,877 
    
 
8. Investment income
        2007 2006 
       £’000 £’000
Interest on bank deposits       1,030  702 
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9. Finance costs
        2007 2006 
       £’000 £’000 
Interest on bank overdrafts and revolving credit facilities      3,211  1,411
Loan note interest       385 67
        3,596  1,478  
10. Tax
                2007 2006 
       £’000 £’000 
        Restated 
        (see note 2)
Current tax       20,282  16,382 
Deferred tax (note 21)       (1,164) (855)
        19,118  15,527 
   
UK corporation tax is calculated at 30% (2006: 30%) of the estimated assessable profit for the year. In March 2007 the UK government announced that they 
would introduce legislation that would reduce corporation tax rate to 28% with effect from 1 April 2008. This legislation is expected to be substantially 
enacted in July 2007. If the change is enacted the deferred tax assets and liabilities, currently stated at 30% of the temporary differences, will be restated at 
28% of those amounts. In addition the effective tax rate from the period to 31 March 2009 is expected to reduce accordingly.
Taxation for other jurisdictions is calculated at the rates prevailing in the respective jurisdictions.
The charge for the year can be reconciled to the profit per the income statement as follows:
        2007 2006 
       £’000 £’000
Profit before tax       61,078  49,976 
    
Tax at the UK corporation tax rate of 30% (2006: 30%)      18,323  14,993 
Tax effect of expenses that are not deductible in determining taxable profit    371  240 
Adjustments in respect of prior years – current tax       (522) (502)
Adjustments in respect of prior years – deferred tax       43  301 
Effect of overseas losses excluding joint ventures       1,070  593 
Tax effect of share of results of joint venture       (167) (98)
Tax expense for the year       19,118  15,527 
11. Dividends
        2007 2006 
       £’000 £’000
Amounts recognised as distributions to equity holders in the year:    
    
Final dividend for the year ended 31 March 2006 of 13.9p (2005: 10.9p) per share    8,668  6,830 
Interim dividend for the year ended 31 March 2007 of 7.5p (2006: 6.1p) per share    4,699  3,858 
        13,367  10,688 
Proposed final dividend for the year ended 31 March 2007 is 17.5p per share amounting to £10.9m (2006:13.9p per share amounting to £8.7m).
The proposed final dividend is subject to approval by shareholders at the Annual General Meeting and has not been included as a liability in these 
accounts.
AR 2007 back half (20).indd   82 25/5/07   18:48:30 Notes to the Accounts 
year ended 31 March 2007
Homeserve plc  82 Homeserve plc 83
Report & Accounts 2007
12. Earnings per share
The calculation of the basic and diluted earnings per share is based on the following data:
        2007 2006 
       £’000 £’000
Profit for the year       41,960  34,449 
Amortisation of acquisition intangibles       6,451  3,658 
Tax impact arising on amortisation of acquisition intangibles     (1,875) (1,097)
Adjusted profit for the year       46,536  37,010 
      
Weighted average number of shares (000s)      
Basic       62,303 62,474 
Dilutive impact of share options       2,412 1,741 
Diluted       64,715 64,215 
The adjusted earnings per share has been calculated by excluding the amortisation of acquisition intangibles. This is considered to be a better indicator 
of the performance of the Group. As profit for the year and adjusted profit for the year are stated after tax, it is not considered necessary to include in the 
above reconciliation the impact of the adjustment for the tax on joint ventures of £154,000 (2006: £nil).
        2007 2006
Adjusted Basic       74.7p  59.2p
Adjusted Diluted       71.9p  57.6p
 
   
13. Goodwill
         £’000  
        Restated 
        (see note 2)
Cost    
At 1 April 2005        159,262 
Recognised on acquisition of subsidiaries        18,220 
Recognition of deferred tax asset on acquired unutilised losses      (1,585)
Recognised on additional deferred consideration        9,540 
At 1 April 2006 restated        185,437 
Recognised on acquisition of subsidiaries (note 32)        7,739 
Reduction in consideration        (1,454)
At 31 March 2007        191,722 
    
Accumulated impairment losses    
At 1 April 2005, 1 April 2006 and 31 March 2007        — 
    
Carrying amount    
At 31 March 2007        191,722 
At 31 March 2006        185,437 
    
The reduction in goodwill during the year reflects the reduction in the total consideration payable in respect of the acquisitions of Chem-Dry and 
Recommend Limited which were completed in 2006.
AR 2007 back half (20).indd   83 25/5/07   18:48:30 13. Goodwill (continued)
Goodwill acquired in a business combination is allocated at acquisition to the cash generating units (CGUs) that are expected to benefit from that business 
combination.  The carrying amount of goodwill has been allocated as follows:
        2007 2006 
       £’000 £’000 
        Restated 
        (see note 2)
Warranties       43,432  43,432 
Other Policy Businesses (comprising several CGUs and including minority interest buyout)    75,737  75,737 
Total Policy Membership Business       119,169  119,169 
    
Glass, Locks, Plumbing and Drains       38,983  38,983 
Improveline       6,458  7,508 
Property Repairs       9,533  9,533 
Chem-Dry       6,767  7,027 
Contents Services       4,929  — 
Other Emergency Services Businesses (comprising several CGUs)     5,883  3,217 
Total Emergency Services Business       72,553  66,268
        191,722  185,437 
The Group tests goodwill annually for impairment, or more frequently if there are indications that goodwill might be impaired.
The recoverable amounts of the CGUs are determined from value in use calculations.  The key assumptions for the value in use calculations are those 
regarding the discount rates, growth rates and expected changes to selling prices and direct costs during the period.  Management estimates discount 
rates using pre-tax rates that reflect current market assessments of the time value of money and the risks specific to the CGUs.  The growth rates are based 
on detailed business plans.  Changes in selling prices and direct costs are based on expectations of future changes in the market.
The Group prepares cash flow forecasts derived from the most recent financial budgets approved by the directors for the next three years and extrapolates 
cash flows based on an estimated growth rate of 2.5% (2006: 2.5%). The pre tax rate used to discount the forecast cash flows for all CGUs is 11.3% (2006: 
11.3%). 
Notes to the Accounts 
year ended 31 March 2007
Report & Accounts 2007
Homeserve plc 84 Homeserve plc 85
AR 2007 back half (20).indd   84 25/5/07   18:48:31 14. Other intangible assets
     Acquisition intangibles    
      Total   
   Customer Customer Franchise acquisition Software 
   relationships databases assets intangibles licenses Total 
   £’000 £’000 £’000 £’000 £’000 £’000
Cost      
At 1 April 2005   3,329  746  —  4,075  7,152  11,227 
Additions   —  —  —  —  1,572  1,572 
Disposals   —  —  —  —  (7) (7)
Acquisitions   14,293  3,790  9,470  27,553  167  27,720 
At 1 April 2006   17,622  4,536  9,470  31,628  8,884  40,512 
      
Additions   —  —  —  —  4,519  4,519 
Disposals   —  —  —  —  (16) (16)
Acquisitions   8,740  4,304  874  13,918  —  13,918 
At 31 March 2007   26,362  8,840  10,344  45,546  13,387  58,933 
      
Accumulated amortisation      
At 1 April 2005   176  134  —  310  3,256  3,566 
Charge for the year   2,128  422  1,108  3,658  1,468  5,126 
Disposals   —  —  —  —  (4) (4)
At 1 April 2006   2,304  556  1,108  3,968  4,720  8,688 
      
Charge for the year   4,325  884  1,242  6,451  1,738   8,189 
Disposals   —  —  —  —  (16) (16)
At 31 March 2007   6,629 1,440  2,350  10,419  6,442  16,861 
      
Carrying amount      
At 31 March 2007   19,733  7,400  7,994  35,127  6,945  42,072 
At 31 March 2006   15,318  3,980  8,362  27,660  4,164  31,824 
      
Acquisition intangibles represent non-monetary assets separately identifiable from goodwill and include customer relationships, customer databases and 
franchise assets.  
Customer relationships and databases are amortised over their estimated useful lives, which are typically between 3 and 7 years. Franchise assets are 
amortised over their estimated useful lives of between 3 and 15 years.
Notes to the Accounts 
year ended 31 March 2007
Homeserve plc 84 Homeserve plc 85
Report & Accounts 2007
AR 2007 back half (20).indd   85 25/5/07   18:48:31 15. Property, plant and equipment
     Furniture 
    Land fixtures 
    and and Computer Motor 
    buildings equipment equipment vehicles Total 
    £’000 £’000 £’000 £’000 £’000
Cost        
At 1 April 2005    11,601  6,119  10,379  3,464  31,563 
Additions    8,568  1,044  3,350  1,506  14,468 
Acquisition of subsidiary    1,815  160  539  106  2,620 
Disposals    (90) (1,072) (702) (2,101) (3,965)
At 1 April 2006    21,894  6,251  13,566  2,975  44,686 
Additions    6,996  3,220  2,144  249  12,609 
Acquisition of subsidiary    —  84  19  53  156 
Disposals    (285) (753) (1,008) (410) (2,456)
At 31 March 2007    28,605  8,802  14,721  2,867  54,995 
        
Accumulated depreciation        
At 1 April 2005    1,356  3,173  6,530  1,787  12,846 
Charge for the year    776  899  1,898  683  4,256 
Disposals    (79) (950) (611) (1,503) (3,143)
At 1 April 2006     2,053  3,122  7,817  967  13,959 
Charge for the year    969  1,786  1,772  642  5,169 
Disposals    (96) (741) (1,006) (310) (2,153)
At 31 March 2007    2,926  4,167  8,583  1,299  16,975 
        
Carrying Amount        
At 31 March 2007    25,679  4,635  6,138  1,568  38,020 
At 31 March 2006     19,841  3,129  5,749  2,008  30,727 
        
The depreciation charge of £5,169,000 (2006: £4,256,000) includes £nil (2006: £141,000) relating to discontinued operations.  The net book value of 
discontinued operations at 31 March 2007 is £nil (2006: £nil).
The carrying amount of the Group’s fixtures and equipment includes an amount of £nil (2006: £nil) in respect of assets held under finance leases.
16. Subsidiaries
A list of the significant investments in subsidiaries, including the name, country of incorporation and proportion of ownership interest is given in note 43 to 
the Company’s separate financial statements.
 
Notes to the Accounts 
year ended 31 March 2007
Report & Accounts 2007
Homeserve plc 86 Homeserve plc 87
AR 2007 back half (20).indd   86 25/5/07   18:48:32 17. Interests in joint ventures
The following amounts relate to the results of the interests in joint ventures:
    2007   2006
    Doméo   Doméo  
   Doméo Assistance Total Doméo Assistance Total 
   £’000 £’000 £’000  £’000 £’000 £’000
Result      
Non-current assets   921  47  968  758  41  799 
Current assets   13,684  1,522  15,206  8,263  477  8,740 
Total assets   14,605  1,569  16,174  9,021  518  9,539 
Current liabilities   (12,803) (2,046) (14,849) (8,352) (617) (8,969)
Net assets   1,802  (477) 1,325    669  (99) 570 
      
Group share, 49%   883  (234) 649  328  (49) 279 
      
Amount recognisable   883  —  883  328  —  328 
Goodwill   864  —  864  864  —  864 
Carrying amount   1,747  —  1,747  1,192  —  1,192 
      
Revenues      
Total revenue   14,180  1,156  15,336  8,718  88  8,806 
Total profit/(loss) after tax   1,133  (378) 755  1,576  (122) 1,454 
Amount recognisable   555  —  555  328  —  328 
The Group’s share of the above results is £555,000 (2006: £328,000) reflecting the net liabilities of the Doméo Assistance joint venture in the current and 
prior year.
18. Inventories
       2007  2006  
       £’000 £’000
Raw materials       841  928 
Work-in-progress        4,704  3,260 
Finished goods       1,691  1,520 
       7,236  5,708 
Notes to the Accounts 
year ended 31 March 2007
Homeserve plc 86 Homeserve plc 87
Report & Accounts 2007
AR 2007 back half (20).indd   87 25/5/07   18:48:32 19. Other financial assets
Trade and other receivables
       2007  2006  
       £’000 £’000 
Amounts receivable for the provision of services       92,997  84,141
Other debtors       57,854  38,213
Loans to joint ventures       724  683
Prepayments and accrued income       7,117  4,876
       158,692  127,913
         
The average credit period taken on provision of services is up to 70 days (2006: 65 days) reflecting continuous payment methods within Policy Membership 
businesses. No interest is charged on the receivables.  An allowance has been made for estimated irrecoverable amounts from the sale of goods of £3.0 
million (2006: £0.7million).  This allowance has been determined by reference to past default experience.
The directors consider that the carrying amount of trade and other receivables approximates their fair value.
Cash balances and cash equivalents
Cash balances and cash equivalents of £14,885,000 (2006: £17,081,000) comprise cash held by the Group and short-term bank deposits with an original 
maturity of three months or less.  The carrying amount of these assets approximates their fair value.
Credit risk
The Group’s principal financial assets are bank balances and cash and trade and other receivables, which represent the Group’s maximum exposure to credit 
risk in relation to financial assets.
The Group’s credit risk is primarily attributable to its trade receivables. The amounts presented in the balance sheet are net of allowances for doubtful 
receivables, estimated by the Group’s management based on prior experience and their assessment of the current economic environment.
The Group has no significant concentration of credit risk, with exposure spread over a large number of counterparties and customers.
 
20. Bank overdrafts and loans
All of the Group’s borrowings are denominated in sterling.
       2007  2006  
       £’000 £’000 
Bank overdrafts and revolving credit facilities       41,539  30,294 
Loan notes       487  3,117 
       42,026  33,411 
The borrowings are repayable as follows:    
On demand or within one year       42,026  33,411 
    
       2007 2006  
       %  %
The weighted average interest rates were paid as follows:    
Bank overdrafts and revolving credit facilities       5.5  5.2 
Loan notes                    4.7      4.1 
 
Revolving credit facilities are arranged at floating rates, thus exposing the Group to cash flow interest rate risk.
Notes to the Accounts 
year ended 31 March 2007
Report & Accounts 2007
Homeserve plc 88 Homeserve plc  89
AR 2007 back half (20).indd   88 25/5/07   18:48:32 The directors estimate the fair value of the Group’s borrowings as follows:
       2007  2006  
       £’000 £’000 
Bank overdrafts and revolving credit facilities       41,539 30,294
Loan notes       487 3,117
       42,026 33,411
   
The other principal features of the Group’s borrowings are as follows:
i. Bank overdrafts are repayable on demand.
ii. The Group has revolving credit facilities with a number of banks totalling £100 million (2006: £100 million).  Of these facilities, £30 million expire within 
one year and £70 million expire in more than one year, but less than two years.
iii. Loan notes are repayable on demand, subject to a minimum initial maturity of 6 months.
iv. All of the Group’s borrowings are at floating rates at margins of between 0.1% and 1% above LIBOR.
At 31 March 2007, the Group had available £47.8 million (2006: £74.2 million) of undrawn committed borrowing facilities in respect of which all conditions 
precedent had been met.
 
21. Deferred tax
The following are the major deferred tax liabilities and assets recognised by the Group and movements thereon during the current and prior year.  
   
 Accelerated Retirement  Acquired 
 tax benefit Share intangible Unutilised Acquired 
 depreciation obligations schemes assets losses property Total  
 £’000 £’000 £’000 £’000 £’000 £’000 £’000 
At 1 April 2005  (638) 665  2,079  (908) — (585) 613 
(Charge)/credit to income  (235) —  299  961  (170) —  855 
Credit to equity  —  —  2,052  —  — —  2,052 
(Charge)/credit to equity  —  (427) —  —  — 12  (415) 
Acquisition of subsidiary  —  —  —  (6,778) 1,585 —  (5,193)
At 1 April 2006 restated (see note 2)  (873) 238  4,430  (6,725) 1,415 (573) (2,088)
      
(Charge)/credit to income  (245) —  1,011  1,387  (989) —  1,164 
Credit to equity  —  —  2,727  —  — —  2,727 
(Charge)/credit to equity  — (44) —  — — 12  (32) 
Acquisition of subsidiary  —  —  —  (1,560) — —  (1,560)
At 31 March 2007  (1,118) 194  8,168  (6,898) 426 (561) 211 
Notes to the Accounts 
year ended 31 March 2007
Homeserve plc 88 Homeserve plc  89
Report & Accounts 2007
AR 2007 back half (20).indd   89 25/5/07   18:48:33 21. Deferred tax (continued)
Certain deferred tax assets and liabilities have been offset. The following is the analysis of the deferred tax balances (after offset) for financial reporting 
purposes:
       2007  2006  
       £’000 £’000 
        Restated 
        (see note 2)
Deferred tax liabilities       (8,577) (8,171)
Deferred tax assets       8,788  6,083 
Net deferred tax asset/(liability)       211  (2,088)
   
At the balance sheet date, the Group has unused tax losses of £4.8 million (2006 restated: £4.2 million) available for offset against future profits and which 
can be carried forward indefinitely. Other than on the acquisition of Improveline, no defered tax asset has been recognised on these losses due to the 
uncertainty of their future recovery.
At the balance sheet date, the aggregate amount of temporary differences associated with undistributed earnings of subsidiaries for which deferred tax 
liabilities have not been recognised was £nil (2006: £nil). 
Temporary differences arising in connection with interests in joint ventures are insignificant.
22.  Current liabilities – Trade and other payables
       2007  2006  
       £’000 £’000
Trade creditors and accruals       68,570  58,147 
Deferred consideration       2,368  13,678   
Payments in advance       420  214 
Deferred income       12,895  — 
Taxes and social security, excluding current tax       5,156  3,358 
Other creditors       72,026  57,942 
       161,435  133,339 
   
Trade creditors and accruals principally comprise amounts outstanding for trade purchases and ongoing costs. The average credit period taken for trade 
purchases is 65 days (2006: 64 days).
The directors consider that the carrying amount of trade payables approximates their fair value.
23.  Non current liabilities – Other financial liabilities
 
      Deferred Deferred  
      income consideration  Total 
      £’000 £’000 £’000
At 1 April 2006      14,593  4,192  18,785 
Movement in year      (12,355) 2,076  (10,279)
At 31 March 2007      2,238 6,268   8,506 
Deferred consideration relates to future amounts payable on the acquisition of Homeserve Emergency Services Limited in 2002 and the 2006 acquisitions 
of FirstEnergy Policies and Digital Insurance Services Limited.  The movement in the year represents the reclassification of an element of the liability to less 
than one year and the acquisitions in the year.
Notes to the Accounts 
year ended 31 March 2007
Report & Accounts 2007
Homeserve plc  90 Homeserve plc 91
AR 2007 back half (20).indd   90 25/5/07   18:48:33 Deferred income represents Policy Membership turnover where an obligation exists to provide future services.  An appropriate proportion of monies 
received in advance are treated as deferred and recognised over the relevant period.
24. Share capital
       2007  2006  
       £’000 £’000
Authorised:    
70,400,000 ordinary shares of 12½p each       8,800  8,800 
    
Issued and fully paid:    
64,957,000 ordinary shares of 12½p each    
(2006: 64,603,000 ordinary shares of 12½p each)       8,119  8,075 
The Company has one class of ordinary shares which carry no right to fixed income.
Share capital represents consideration received for the nominal value of 12½p per share on all issued and fully paid shares.
During the year the Company issued 354,000 shares for total consideration of £1,425,000.
25. Share premium account
        
        Share   
        premium   
        account  
        £’000 
Balance at 1 April 2005        26,576 
Premium arising on issue of equity shares        3,422 
Balance at 1 April 2006        29,998 
Premium arising on issue of equity shares        1,381 
Balance at 31 March 2007        31,379 
The share premium account represents consideration received for authorised and issued shares in excess of the nominal value of 12½p per share.
 
26. Merger reserve
        Merger  
        reserve  
        £’000 
Balance at 1 April 2005, 1 April 2006 and 31 March 2007      70,992 
The merger reserve represents the issue on 6 April 2004 of 11,600,000 new shares relating to the acquisition of the minority interest held in the Group at 
that date.  The reserve reflects the difference between the nominal value of shares of 12½p and the share price immediately preceding the issue of £6.24½p 
per share.
Notes to the Accounts 
year ended 31 March 2007
Homeserve plc  90 Homeserve plc 91
Report & Accounts 2007
AR 2007 back half (20).indd   91 25/5/07   18:48:34 27. Own shares reserve
        Own  shares   
        reserve  
        £’000 
Balance at 1 April 2005        8,447
Acquired in the year        8,221
Balance at 1 April 2006        16,668
Acquired in the year        8,379
Balance at 31 March 2007        25,047
   
The own shares reserve represents the cost of shares in Homeserve plc purchased in the market and held by the Homeserve plc Employee Benefit Trust.  
The shares are held to satisfy certain of the options under the Group’s share option schemes and are recognised at cost.  The Employee Benefit Trust holds 
2,530,000 shares (2006: 1,994,544 shares).
28. Share incentive reserve
        Share  
        incentive   
        reserve  
        £’000 
Balance at 1 April 2005        1,200 
Share based payment charges in the year        2,058 
Share options exercised in the year        (1,632)
Balance at 1 April 2006        1,626 
Share based payment charges in the year        3,361 
Share options exercised in the year        (260)
Balance at 31 March 2007        4,727 
The share incentive reserve represents the cumulative charges to income under IFRS 2 ‘Share Based Payments’ on all share options and schemes granted 
after 7 November 2002 that had not vested as at 1 January 2005, net of share option exercises.
29. Capital redemption reserve
        Capital 
         redemption 
        reserve 
        £’000 
Balance at 1 April 2005, 1 April 2006 and 31 March 2007      1,200
 
 The capital redemption reserve arose on the redemption of 1,200,000 £1 redeemable preference shares on 1 July 2002.
Notes to the Accounts 
year ended 31 March 2007
Report & Accounts 2007
Homeserve plc 92 Homeserve plc  93
AR 2007 back half (20).indd   92 25/5/07   18:48:34 30. Currency translation reserve
        Currency 
        translation 
        reserve 
        £’000
Balance at 1 April 2005        — 
Movement in the year        120 
Balance at 1 April 2006        120 
Movement in the year        (56)
Balance at 31 March 2007        64 
The currency translation reserve represents the translation of the assets and liabilities of the Group’s overseas operations at year end exchange rates.
31. Retained earnings
 
        Retained  
        earnings 
        £’000
Balance at 1 April 2005        77,357 
Dividends        (10,688)
Total statement of recognised income and expense        34,200 
Share options exercised in the year        1,632 
Deferred tax asset on share option gains taken directly to equity      2,052 
Current tax on exercised share options taken directly to equity      1,333 
Exchange differences        (120)
Balance at 1 April 2006        105,766 
    
Dividends        (13,367)
Total statement of recognised income and expense        42,658 
Share options exercised in the year        260 
Deferred tax asset on share option gains taken directly to equity      2,727 
Current tax on exercised share options taken directly to equity      914 
Exchange differences        56 
Balance at 31 March 2007        139,014 
     
Notes to the Accounts 
year ended 31 March 2007
Homeserve plc 92 Homeserve plc  93
Report & Accounts 2007
AR 2007 back half (20).indd   93 25/5/07   18:48:34 32. Acquisitions
On 21 April 2006, the Group acquired certain of the trade and assets of Pilkington United Kingdom Limited relating to the glazing division of Pilkington 
Building Products.  The business undertakes glazing repairs on a nationwide basis.
 
On 17 August 2006, the Group acquired 20,000 Home Assistance policies from FirstEnergy and simultaneously signed a marketing agreement with 
FirstEnergy Corp providing access to up to 3.4m households.
On 26 October 2006, the Group acquired 100% of the share capital of Digital Insurance Services Limited, a provider of home insurance and contents claims 
validation and fulfilment services.
Subsequent to the year end on 30 April 2007, the Group acquired 100% of the share capital of Multimaster Ltd, a leading furniture warranty and service 
provider. 
All these transactions have been accounted for by the purchase method of accounting.  The provisional fair value of the identifiable assets and liabilities of 
the acquisitions were:
      Digital 
      Insurance 
     First- Services  Multimaster 
    Pilkington Energy Limited Total Limited 
    £’000  £’000  £’000  £’000  £’000 
Net assets acquired:     
Property, plant and equipment    130  —  26  156  1,327 
Inventories    66  —  99  165  319 
Trade and other receivables    1,849  —  477  2,326  2,109 
Cash and cash equivalents    —  —  1  1  2 
Trade and other payables    (2,007) —  (567) (2,574) (2,776)
Deferred tax liability    —  —  (1,432) (1,432) — 
    38  —  (1,396) (1,358) 981 
     
Intangible assets identified on acquisition    3,965  4,304  4,775  13,044  — 
Goodwill    2,666  —  4,929  7,595  4,318 
Total consideration    6,669  4,304  8,308  19,281  5,299 
     
Satisfied by:     
Cash    6,500  2,136  3,040  11,676  5,024 
Contingent consideration    —  1,541  5,000  6,541  — 
Directly attributable costs    169  627  268  1,064  275 
    6,669 4,304  8,308  19,281  5,299 
     
Net cash outflow arising on acquisition:     
Cash consideration and directly attributable costs    6,669 2,763  3,308  12,740  5,299 
Cash and cash equivalents acquired    — —  (1) (1) (2)
    6,669 2,763  3,307  12,739  5,297
      
Total fair value adjustments of £425,000 were made on the acquisition of Pilkington, reducing the net assets to align accounting policies and reflect the fair 
value of certain trade and other receivables. There were no fair value adjustments on the other acquisitions completed during the year.
In addition to the net cash outflow arising on acquisition above of £12,739,000, there were further cash outflows in respect of the acquisition of a number 
of individually immaterial acquisitions amounting to £1,124,000 resulting in £874,000 of intangible assets, £144,000 of goodwill and £106,000 of other net 
assets. Contingent consideration of £16,308,000 was also paid in the year following the 2002 acquisition of Highway Emergency Services Limited and the 
2005 purchase of National Property Solutions Limited.
Notes to the Accounts 
year ended 31 March 2007
Report & Accounts 2007
Homeserve plc 94 Homeserve plc 95
AR 2007 back half (20).indd   94 25/5/07   18:48:35 Intangible assets identified on the acquisition of Pilkington and Digital Insurance Services Limited represent the directors’ estimate of the fair value of 
the customer relationships at acquisition.  Intangible assets identified on FirstEnergy reflect the directors’ estimate of the value of the acquired customer 
database.
An exercise to determine the intangible assets currently subsumed within goodwill on Multimaster Limited is yet to be undertaken.  This exercise will be 
completed for the 2007/8 interim accounts. 
Goodwill represents future cross sell opportunities, efficiency savings, synergies and potential new client wins from these acquisitions.
If all the acquisitions had been completed on the first day of the financial year, Group revenues for the period and Group operating profit attributable to 
equity holders of the parent would have been £479,637,000 and £63,455,000 respectively.
The post acquisition operating profit or loss from these acquisitions in the year ended 31 March 2007 was as follows:
 
       Digital   
       Insurance 
       Services   
      Pilkington  Limited  Total 
      £’000 £’000  £’000 
Operating profit/(loss)      607  (262) 345 
The contribution from the acquisition of FirstEnergy policies is subsumed within the overall performance of the US business and it is not practicable to 
separately identify the operating profit attributable to this acquisition.
33. Notes to the cash flow statement
       2007  2006  
       £’000 £’000
Operating profit       63,644  50,752 
Adjustments for:    
Depreciation of property, plant and equipment       5,169  4,115 
Amortisation of intangible assets       8,189  5,126 
Share based payments expense       3,361  2,058 
Share of profits in joint ventures       (555) (328)
(Profit)/loss on disposal of property, plant and equipment and software licences    (308) 128 
Additional pension contributions       — (2,000)
Operating cash flows before movements in working capital     79,500  59,851 
Increase in inventories       (1,363) (513)
Increase in receivables       (28,453) (27,786)
Increase in payables       23,957  24,077  
Cash generated by operations       73,641  55,629 
    
Income taxes paid       (17,313) (13,871)
Interest paid       (3,790) (1,478)
Net cash from continuing operating activities       52,538  40,280 
    
Net cash inflow from discontinued operating activities      —  766 
       52,538  41,046 
  
Cash and cash equivalents (which are presented as a single class of assets on the face of the balance sheet) comprise cash at bank and other short-term 
highly liquid investments with a maturity of three months or less.
 
Notes to the Accounts 
year ended 31 March 2007
Homeserve plc 94 Homeserve plc 95
Report & Accounts 2007
AR 2007 back half (20).indd   95 25/5/07   18:48:35  
34. Operating lease arrangements
The Group as lessee
       2007  2006  
       £’000 £’000
Minimum lease payments under operating leases recognised in income for the year    6,817 6,384 
    
At the balance sheet date, the Group had outstanding commitments for future minimum lease payments under non-cancellable operating leases, which 
fall due as follows:
       2007  2006  
       £’000 £’000
Within one year       3,666 5,505 
In the second to fifth years inclusive       8,471 9,854 
After five years       8,001 6,998 
       20,138 22,357 
 Operating lease payments principally represent rentals payable by the Group for certain of its land and buildings and motor vehicles.
35. Share Based Payments
During the year ended 31 March 2007, the Group had 6 (2006: 5) share based payment arrangements, which are described below:
i) Executive Share Option Plan (“ESOP”)
 The ESOP provides for a grant price equal to the closing quoted market price of the Company’s shares on the day before the date of grant.  
The vesting period is three years and is dependent upon the real increase in Earnings Per Share over the vesting period.  If the options remain 
unexercised after a period of 10 years from the date of grant, the options expire.  
ii)     Key Executive Incentive Plan (“KEIP”)
 The KEIP provides for a grant price equal to the closing quoted market price of the Company’s shares on the day before the date of grant.  
The awards vest in two tranches, the first being between three and four years from the date of grant and the second being on the second 
anniversary of the vesting of the first tranche.  The number of awards vesting is dependent upon the Profit Before Tax of the Group for the 
year ending 31 March 2008 and is subject to a minimum share price criteria during the year ending 31 March 2009.  If the options remain 
unexercised after a period of 10 years from the date of grant, the options expire.
iii)  Long Term Incentive Plan (“LTIP”)
 The LTIP provides for the grant of nil cost options.  The vesting period is five years and is dependent upon the Total Shareholder Return 
performance of the Group over the five years ending 31 March 2009.  If the options remain unexercised after a period of 10 years from the date 
of grant, the options expire. 
iv)    Deferred Bonus Plan (“DBP”)
 The Deferred Bonus Plan enables the individual to defer receipt of their annual cash bonus (up to a maximum of 100%) and to invest an 
equivalent amount in the ordinary share capital of the Company.  The deferred bonus may be matched by the Company dependent upon 
the Company’s relative Total Shareholder Return over a three year period, up to a maximum of 300% of the deferred amount for upper decile 
performance. The shares cannot normally be exercised for three years and lapse if not exercised within 10 years from the date of grant.
v) Save As You Earn Scheme (“SAYE”)
 The SAYE is open to all UK employees and provides for an exercise price equal to the closing quoted market price on the day before the date of 
grant, less a discretionary discount.  The options can be exercised during a six month period following the completion of either a three or five 
year savings period.  
vi)    Conditional Share Schemes (“CSS”)
 Awards under the Conditional Share Scheme vest in three tranches on the first (25%), second (25%) and third (50%) anniversary of the grant.
Notes to the Accounts 
year ended 31 March 2007
Report & Accounts 2007
Homeserve plc 96 Homeserve plc 97
AR 2007 back half (20).indd   96 25/5/07   18:48:36 Amounts recognised in income in respect of these defined benefit schemes are as follows: 
       2007  2006  
       £’000 £’000
Current service cost       630  449 
Interest cost       665  549 
Expected return on scheme assets       (818) (579)
Past service cost       144  119 
       621  538 
Of the charge for the year, £621,000 (2006: £538,000) has been included in operating costs.  Actuarial gains and losses have been reported in the statement 
of recognised income and expense.
The actual return on scheme assets was £1,238,000 (2006: £2,207,000).
The amount included in the balance sheet arising from the Group’s obligations in respect of its defined benefit retirement benefit schemes is as follows:
       2007  2006  
       £’000 £’000
Present value of defined benefit obligations       (14,535) (13,200)
Fair value of scheme assets       13,888  12,044 
Deficit in scheme       (647) (1,156)
Past service cost not yet recognised in balance sheet      —  — 
Liability recognised in the balance sheet       (647) (1,156)
    
This amount is presented in the balance sheet as follows:    
    
Non-current liabilities       (647) (1,156)
       (647) (1,156)
 
Movements in the present value of defined benefit obligations in the current period were as follows: 
     
       2007  2006  
       £’000 £’000
At 1 April       13,200  9,854 
Employer’s part of the current service cost       630  449 
Interest cost       665  549 
Contributions from scheme members       98  106 
Actuarial gains and losses       (234) 2,050 
Benefits paid       32  73 
Past service cost       144  119 
At 31 March       14,535  13,200 
Notes to the Accounts 
year ended 31 March 2007
Homeserve plc 98 Homeserve plc 99
Report & Accounts 2007
AR 2007 back half (20).indd   99 25/5/07   18:48:37 36. Retirement benefit scheme (continued)
Movements in the fair value of scheme assets in the current period were as follows:
       2007  2006  
       £’000 £’000
At 1 April       12,044  7,276 
Expected return on scheme assets       818  579 
Actuarial gains and losses       420  1,628 
Contributions from the sponsoring companies       476  2,382 
Contributions from scheme members       98 106 
Benefits paid       32  73 
At 31 March       13,888  12,044 
Note – “benefits paid” represents an inflow into the Section as a result of transfer payments received.
The amount recognised outside profit or loss in the statement of recognised income and expense for 2007 is a gain of £654,000 (2006: loss of £422,000).  
The cumulative amount recognised outside profit and loss at 31 March 2007 is a loss of £140,000. 
The analysis of the scheme assets and the expected rate of return at the balance sheet date was as follows:
              Expected return         Fair value of assets
     2007  2006 2007  2006  
     % % £’000 £’000
Equity instruments     7.8 7.4  13,894  10,057 
Other assets     4.5 4.2  (6) 1,987 
       13,888  12,044 
  
The overall expected rate of return on assets for the financial year ending 31 March 2007 was 6.9% pa (2006: 7.7% pa).  This rate is derived by taking the 
weighted average of the long term expected rate of return on each of the asset classes that the Section was invested in at 31 March 2006. 
 The history of experience adjustments is as follows.
      2007  2006 2005 
      £’000 £’000 £’000
Present value of defined benefit obligations      (14,535) (13,200) (9,854)
Fair value of scheme assets      13,888  12,044  7,276 
Deficit in scheme      (647) (1,156) (2,578)
    
      2007  2006 2005
Experience adjustments on scheme liabilities    
Amount of loss/(gain) (£’000)      144  95  (107)
Percentage of scheme liabilities (%)      1  1  (1) 
    
Experience adjustments on scheme assets    
Amount of gain (£’000)      (420) (1,628) (206)
Percentage of scheme assets (%)      (3)  (14) (3) 
    
In subsequent accounting periods a history (building up to 5 years) of the Section’s experience will be illustrated.
The estimated amounts of contributions expected to be paid to the scheme during the current financial year is £0.5m plus any Pension Protection Fund 
levy payable.
Notes to the Accounts 
year ended 31 March 2007
Report & Accounts 2007
Homeserve plc  100 Homeserve plc  101
AR 2007 back half (20).indd   100 25/5/07   18:48:37 37. Events after the balance sheet date
Other than in respect of the acquisition of 100% of the share capital of Multimaster Limited on 30 April 2007 as detailed in note 32, there have been no 
events after the balance sheet date.
38. Related party transactions
Transactions between the Company and its subsidiaries, which are related parties, have been eliminated on consolidation and are not disclosed in this note.  
Transactions between the Company and its subsidiaries are disclosed in the Company’s separate financial statements (note 49).
Trading transactions
During the year, Group companies entered into the following transactions with related parties who are not members of the Group:
 Provision of goods Purchase of services Amounts owed by  Amount owed to   
    related parties related parties
 2007  2006 2007  2006 2007  2006 2007  2006 
 £’000 £’000 £’000 £’000 £’000 £’000 £’000 £’000
Harpin Ltd 2  —  174  151  —  —  —  — 
Pilot Services (GB) Ltd —  —  23  —  — —  — — 
Joint ventures 859 497  —  —  — —  —  — 
     
Harpin Limited and Pilot Services (GB) Limited are related parties of the Group because they are controlled by Richard Harpin.
Provision of services to and the purchase of services from related parties were made at arm’s length prices. The amounts outstanding are unsecured and 
will be settled in cash. No guarantees have been given or received. No provisions have been made for doubtful debts in respect of the amounts owed by 
related parties.
Remuneration of key management personnel
The remuneration of the directors, who are the key management personnel of the Group, is set out below in aggregate for each of the categories specified 
in IAS 24 Related Party Disclosures.  Further information about the remuneration of individual directors is provided in the audited part of the Directors’ 
Remuneration Report on pages 59 to 64. 
       2007  2006 
       £’000 £’000
Short-term employee benefits       3,066 2,205 
Post-employment benefits       303 506 
Share-based payment       1,276 778 
       4,645 3,489 
 
Directors’ transactions
During the year, the Group purchased transport services from Harpin Limited and Pilot Services (GB) Limited, companies controlled by Richard Harpin.  The 
total value of purchases amounted to £197,000  (2006: £151,000) and the balance due to Harpin Limited and Pilot Services (GB) Limited at the year end 
amounted to £nil (2006: £nil).
Except as noted above with Harpin Limited and Pilot Services (GB) Limited, there were no transactions with directors requiring disclosure.
Under the terms of an agreement entered into between Ian Carlisle and certain of the vendors of Highway Emergency Services Limited (‘the vendors’), Mr 
Carlisle received payment of £2.2m in February 2007.  This sum represents a proportion of the deferred consideration received by the vendors under the 
terms of the 2002 agreement relating to the acquisition of that company.
Notes to the Accounts 
year ended 31 March 2007
Homeserve plc  100 Homeserve plc  101
Report & Accounts 2007
AR 2007 back half (20).indd   101 25/5/07   18:48:38 The Group, through its subsidiary Affinity Partners Limited, enters into contracts of reinsurance with an independent insurance company that underwrites 
the policies marketed and administered by Homeserve GB Limited.  Under these arrangements, Affinity Partners Limited underwrites 50% of the risk and 
reward associated with these policies (the policies).
The policies are entered into between the customers of Homeserve GB Limited and an independent insurance company in the United Kingdom only.  The 
policies are principally in relation to underwritten cover for a broad range of domestic emergencies relating to Plumbing and Drains, Electrical Wiring, Water 
and Gas Supply Pipes and Gas Boilers.
Revenue from the reinsurance contracts is recognised on a straight-line basis over the life of the policies (typically 12 months), reflecting the period of 
benefit to the customer.  Where the reinsurance premium is received in advance an appropriate amount is included within deferred income.
The costs associated with the claims received under the contract of reinsurance are recognised as they are incurred.  An assessment is made of whether the 
expected cash inflows under the reinsurance contracts are sufficient to meet the expected future claims costs under the reinsurance contracts.  If a shortfall 
were to arise, this would be charged immediately to the income statement.
The amounts recognised by the Group in respect of reinsurance contracts are as follows:
       2007  2006 
       £’000 £’000
Revenue       43,054  34,916 
Claims costs       (42,666) (34,761)
Deferred income       11,212  9,225 
The principal impact on the amount of claims incurred under the reinsurance contracts relate to weather conditions, which can impact the frequency 
of claims and the nature of the emergency.  In order to assist in managing the risk arising from the policies, the claims costs are fixed for each type of 
emergency repair.
There is no concentration of insurance risk due to the immaterial size of each of the policies.  Neither the policies or the reinsurance contract are exposed to 
any significant liquidity risk, credit risk, market risk, nor are there any exposures relating to embedded derivatives.
As the policies relate to emergency repairs and generally cover a 12 month period, all cash outflows are expected to occur within 12 months from the date 
of commencement of the policies.
On a weighted average basis, across all policies, a 1 percentage point increase in claims frequencies would result in additional claims costs of £1.0m (2006: 
£0.9m).
 
 
 
 
Notes to the Accounts 
year ended 31 March 2007
Report & Accounts 2007
Homeserve plc 102 Homeserve plc 103
Independent Auditors Report 
AR 2007 back half (20).indd   102 25/5/07   18:48:38
39. Insurance contracts Independent auditors’ report to the members of Homeserve plc
We have audited the parent company financial statements of Homeserve plc for the year ended 31 March 2007 which comprise the Balance Sheet, the 
Cash Flow Statement, the Statement of Recognised Income and Expense and the related notes 40 to 54. These parent company financial statements 
have been prepared under the accounting policies set out therein.
We have reported separately on the Group financial statements of Homeserve plc for the year ended 31 March 2007 and on the information in the 
Directors’ Remuneration Report that is described as having been audited.
This report is made solely to the Company’s members, as a body, in accordance with section 235 of the Companies Act 1985.  Our audit work has been 
undertaken so that we might state to the Company’s members those matters we are required to state to them in an auditors’ report and for no other 
purpose.  To the fullest extent permitted by law, we do not accept or assume responsibility to anyone other than the Company and the Company’s 
members as a body, for our audit work, for this report, or for the opinions we have formed.
Respective responsibilities of directors and auditors
The directors’ responsibilities for preparing the Annual Report and the parent company financial statements in accordance with applicable law and 
International Financial Reporting Standards (IFRSs) as adopted by the European Union are set out in the Statement of Directors’ Responsibilities.
Our responsibility is to audit the parent company financial statements in accordance with relevant legal and regulatory requirements and International 
Standards on Auditing (UK and Ireland).
We report to you our opinion as to whether the parent company financial statements give a true and fair view and whether the parent company 
financial statements have been properly prepared in accordance with the Companies Act 1985. We also report to you whether in our opinion the 
information given in the Directors’ Report is consistent with the parent company financial statements.
In addition we report to you if, in our opinion, the Company has not kept proper accounting records, if we have not received all the information and 
explanations we require for our audit, or if information specified by law regarding directors’ remuneration and other transactions is not disclosed.
We read the other information contained in the Annual Report as described in the contents section and consider whether it is consistent with the 
audited parent company financial statements. We consider the implications for our report if we become aware of any apparent misstatements or 
material inconsistencies with the parent company financial statements. Our responsibilities do not extend to any further information outside the 
Annual Report.
Basis of audit opinion
We conducted our audit in accordance with International Standards on Auditing (UK and Ireland) issued by the Auditing Practices Board. An audit 
includes examination, on a test basis, of evidence relevant to the amounts and disclosures in the parent company financial statements. It also includes 
an assessment of the significant estimates and judgments made by the directors in the preparation of the parent company financial statements, and of 
whether the accounting policies are appropriate to the company’s circumstances, consistently applied and adequately disclosed.
We planned and performed our audit so as to obtain all the information and explanations which we considered necessary in order to provide us with 
sufficient evidence to give reasonable assurance that the parent company financial statements are free from material misstatement, whether caused 
by fraud or other irregularity or error. In forming our opinion we also evaluated the overall adequacy of the presentation of information in the parent 
company financial statements.
Opinion
In our opinion:
• the parent company financial statements give a true and fair view, in accordance with IFRSs as adopted by the European Union as applied in 
accordance with the provisions of the Companies Act 1985, of the state of the company’s affairs as at 31March 2007;
• the parent company financial statements have been properly prepared in accordance with the Companies Act 1985; and
• the information given in the Directors’ Report is consistent with the parent company financial statements.
Deloitte & Touche LLP
Chartered Accountants and Registered Auditors 
Birmingham
21 May 2007
Notes to the Accounts 
year ended 31 March 2007
Homeserve plc 102 Homeserve plc 103
Report & Accounts 2007
AR 2007 back half (20).indd   103 25/5/07   18:48:38
Independent Auditors’ Report         2007  2006 
    Note   £’000 £’000
Actuarial gains/(losses) on defined benefit pension schemes     654  (422)
Current tax credit on additional pension contribution      132  132 
Deferred tax on items taken directly to equity    47   (44) (427)
    
Net income/(expense) recognised directly in equity      742 (717)
Profit for the year       32,950  26,561 
Total recognised income and expense for the year attributable to equity holders of the Company   33,692 25,844 
Company Statement of Recognised Income and Expense
year ended 31 March 2007
Report & Accounts 2007
Homeserve plc 104 Homeserve plc 105
Company Balance Sheet 
31 March 2007
AR 2007 back half (20).indd   104 25/5/07   18:48:39        2007  2006 
   Note    £’000 £’000
Non-current assets    
Investment in subsidiaries   43    108,468  108,468 
  47    3,992  2,129 
       112,460  110,597 
   
Current assets    
Trade and other receivables   44    147,170  138,390 
Current tax asset       —  1,051 
       147,170  139,441 
Total assets       259,630  250,038 
    
Current liabilities  
Trade and other payables   45    (8,057) (5,821)
Current tax liabilities       (2,155) — 
Bank overdrafts and loans   46    (45,013) (64,193)
       (55,225) (70,014)
    
Net current assets       91,945  69,427 
    
Non-current liabilities    
Retirement benefit obligation   36    (647) (1,156)
       (647) (1,156)
    
Total liabilities       (55,872) (71,170)
Net assets       203,758  178,868 
    
Equity    
Share capital   24    8,119  8,075 
Share premium account   25    31,379  29,998 
Merger reserve   26    70,992  70,992 
Share incentive reserve   53    1,544  217 
Capital redemption reserve   29    1,200  1,200 
Retained earnings   54    90,524  68,386 
Total equity       203,758  178,868 
The financial statements were approved by the Board of directors and authorised for issue on 21 May 2007. They were signed on its behalf by:
Jonathan Simpson-Dent
Chief Financial Officer
21 May 2007
Company Statement of Recognised Income and Expense
year ended 31 March 2007
Homeserve plc 104 Homeserve plc 105
Report & Accounts 2007
Company Balance Sheet 
31 March 2007
AR 2007 back half (20).indd   105 25/5/07   18:48:39
Deferred tax assets         2007  2006 
   Note    £’000 £’000
Net cash outflow from operating activities   41    (2,626) (478)
    
Investing activities    
Interest received       2,127  3,294 
Dividends received from subsidiary undertakings       40,000  29,475 
Purchase of own shares       (8,379) (8,221)
Increased investment in subsidiary undertaking       —  (29,000)
Net cash from/(used in) investing activities       33,748  (4,452)
    
Financing activities    
Dividends paid       (13,367) (10,688)
Share capital issued       1,425  3,510 
(Decrease)/increase in bank overdraft       (19,180) 12,108 
Net cash (used in)/from financing activities       (31,122) 4,930 
Net movement in cash and cash equivalents       — — 
Cash and cash equivalents at beginning and end of year       — — 
Company Cash Flow Statement 
year ended 31 March 2007
Report & Accounts 2007
Homeserve plc 106 Homeserve plc 107
AR 2007 back half (20).indd   106 25/5/07   18:48:39 Company only
The following notes 40 to 54 relate to the Company only position for the year ended 31 March 2007.
40. Significant accounting policies
As provided by s230 of the Companies Act 1985, the Company has not presented its own income statement. The Company’s profit for the year was 
£32,950,000  (2006: £26,561,000).
The separate financial statements of the Company are presented as required by the Companies Act 1985.  As permitted by that Act, the separate financial 
statements have been prepared in accordance with International Financial Reporting Standards (IFRSs).
The financial statements have been prepared on the historical cost basis.  The principal accounting policies adopted are the same as those set out in note 2 
to the consolidated financial statements except that investments in subsidiaries are stated at cost.
41. Notes to the cash flow statement
       2007  2006 
       £’000 £’000
Operating loss       (8,477) (7,767)
Adjustments for:    
Share based payment expense       1,444  959 
Additional pension contributions        — (879)
Operating cash flows before movements in working capital     (7,033) (7,687)
(Increase)/decrease in receivables       (401) 6,261 
Increase/(decrease) in payables       1,737  (472)
Cash used in operations       (5,697) (1,898)
Income taxes received       3,071  1,420 
Net cash outflow from operating activities       (2,626) (478)
42. Other information
The average monthly number of employees (including executive directors) was:
 
       2007  2006 
       Number Number
       89 98 
    
       £’000  £’000
Their aggregate remuneration comprised:    
Wages and salaries       10,483  6,707 
Social security costs       1,241  2,163 
Other pension costs       449  300 
       12,173 9,170 
Company Cash Flow Statement 
year ended 31 March 2007
Homeserve plc 106 Homeserve plc 107
Report & Accounts 2007
Notes to the Accounts 
year ended 31 March 2007
AR 2007 back half (20).indd   107 25/5/07   18:48:40 42. Other information (continued)
        2007 2006 
       £’000 £’000
Fees payable to the Company’s auditors for the audit of the Company’s annual accounts    39 8
Total audit fees       39 8
Other services pursuant to legislation       103 70
Tax services       62 —
Total non-audit fees       165 70
 
43. Subsidiaries
Details of the Company’s subsidiaries at 31 March 2007 are as follows.  All companies are accounted for using the acquisition method. 
     
   Place of 
   incorporation ownership  Proportion of  Proportion of 
   (or registration) voting interest  power held 
Name of subsidiary   and operation % %
Intermediate Holding Companies   
Homeserve Assistance Limited   England 100 100
Homeserve Enterprises Limited   England 100 100
Homeserve Investments Limited   England 100 100
Homeserve Resources Limited   England 100 100
   
Policy Membership   
Homeserve Care Solutions Limited   England 100 100
Homeserve Retail Warranties Limited   England 100 100
Regency Finance & Insurance Services Limited   England 100 100
Regency Finance & Insurance Services (Administration) Limited England 100 100
Homeserve Warranties Limited   England 100 100
Homeserve GB Limited   England 100 100
Homeserve International Limited   England 100 100
Affinity Partners Limited   Guernsey 100 100
Home Service USA Corp   USA 100 100
Homeserve Ibérica S.L.   Spain 100 100
Home Service USA Repair Management Corp   USA 100 100
   
Emergency Services   
Homeserve At Home Limited   England 100 100
Homeserve Claims Management Limited   England 100 100
Homeserve Emergency Services Limited   England 100 100
Chem-Dry Franchising Limited   England 100 100
Chem-Dry UK Limited   England 100 100
Concept Document Recovery Limited   England 100 100
Homeserve Property Repairs Limited   England 100 100
Homeserve Servowarm Limited   England 100 100
Recommend Limited (trading as Improveline)   England 100 100
Homeserve Contents Services Limited   England 100 100
   
Notes to the Accounts 
year ended 31 March 2007
Report & Accounts 2007
Homeserve plc 108 Homeserve plc  109
AR 2007 back half (20).indd   108 25/5/07   18:48:40 The movement in investments is as follows:   
     Total 
     £’000
1 April 2005     79,468
Increased investment in existing subsidiary     29,000
1 April 2006 and 31 March 2007     108,468
44. Financial assets
Trade and other receivables
 
       2007  2006 
       £’000 £’000
Amounts receivable from Group companies       145,771  120,813 
Other debtors       1,148  17,315 
Prepayments and accrued income       251  262 
       147,170  138,390 
The directors consider that the carrying amount of trade and other receivables approximates their fair value.
     
Credit risk
The Company’s principal financial assets relate to amounts due from subsidiary undertakings which represent the Company’s maximum exposure to credit 
risk in relation to financial assets.
The Company’s credit risk is primarily attributable to its receivables from subsidiary undertakings. No allowances for doubtful debts are considered 
necessary based on prior experience and the directors’ assessment of the current economic environment.
The Company has no significant concentration of credit risk, with exposure spread over a large number of subsidiary undertakings.
45. Financial liabilities
Trade and other payables
 
       2007  2006 
       £’000 £’000
Trade creditors and accruals       1,283  1,161 
Amounts payable to Group companies       1,906  3,360 
Taxes and social security, excluding corporation tax       487  297 
Other creditors       4,381 1,003 
       8,057  5,821 
 
Trade creditors and accruals principally comprise amounts outstanding for trade purchases and ongoing costs.  The average credit period taken for trade 
purchases is 45 days (2006: 45 days).
The directors consider that the carrying amount of trade payables approximates to their fair value.
Notes to the Accounts 
year ended 31 March 2007
Homeserve plc 108 Homeserve plc  109
Report & Accounts 2007
AR 2007 back half (20).indd   109 25/5/07   18:48:40 46. Bank overdrafts and loans
       2007  2006 
       £’000 £’000
Bank overdrafts and revolving credit facilities       45,013  64,193 
 
Details of the borrowing facilities are given in note 20 to the accounts.
47. Deferred tax
The following are the major deferred tax assets recognised by the Company and movements thereon during the current and prior year.
      Retirement  
      benefit Share  
      obligations schemes  Total 
      £’000 £’000 £’000
At 1 April 2005      665  937  1,602 
Credit to income      —  299  299 
Credit to equity      —  655  655 
Charge to equity      (427) —  (427)
At 1 April 2006      238  1,891  2,129 
   
Credit to income      —  384  384 
Credit to equity      —  1,523  1,523 
Charge to equity      (44) —  (44)
At 31 March 2007      194  3,798  3,992 
48. Events after the balance sheet date
There were no post balance sheet events between the balance sheet date and the signing of the accounts.
49. Related parties
 Provision of goods Purchase of services Amounts owed by  Amount owed to   
    related parties related parties
 2007  2006 2007  2006 2007  2006 2007  2006 
 £’000 £’000 £’000 £’000 £’000 £’000 £’000 £’000 
Harpin Ltd 2 — 161 122 — — — —
Pilot Services (GB) Ltd —  — 23 — — — — —
Subsidiary companies 7,246 5,353 — — 145,771 120,813 1,906 3,360
Harpin Limited and Pilot Services (GB) Limited are related parties of the Company because they are controlled by Richard Harpin.
Provision of services to and the purchase of services from related parties were made at arm’s length prices. The amounts outstanding are unsecured and 
will be settled in cash. No guarantees have been given or received. No provisions have been made for doubtful debts in respect of the amounts owed by 
related parties.
50.  Share capital, share premium account, merger reserve and capital redemption reserve
The movements on these items are disclosed in notes 24, 25, 26 and 29 to the accounts.
Notes to the Accounts 
year ended 31 March 2007
Report & Accounts 2007
Homeserve plc 110 Homeserve plc  111
AR 2007 back half (20).indd   110 25/5/07   18:48:41 51. Share based payments
During the year ended 31 March 2007, the Company had 5 (2006: 5) share based payment arrangements, which are described below:
i) Executive Share Option Plan (“ESOP”)
 The ESOP provides for a grant price equal to the closing quoted market price of the Company’s shares on the day before the date of grant.  The 
vesting period is three years and is dependent upon the real increase in Earnings Per Share over the vesting period.  If the options remain unexercised 
after a period of 10 years from the date of grant, the options expire.  
ii)     Key Executive Incentive Plan (“KEIP”)
 The KEIP provides for a grant price equal to the closing quoted market price of the Company’s shares on the day before the date of grant.  The awards 
vest in two tranches, the first being between three and four years from the date of grant and the second being on the second anniversary of the 
vesting of the first tranche.  The number of awards vesting is dependent upon the Profit Before Tax of the Group for the year ending 31 March 2008 
and is subject to a minimum share price criteria during the year ending 31 March 2009.  If the options remain unexercised after a period of 10 years 
from the date of grant, the options expire.
iii)    Long Term Incentive Plan (“LTIP”)
 The LTIP provides for the grant of nil cost options.  The vesting period is five years and is dependent upon the Total Shareholder Return performance 
of the Group over the five years ending 31 March 2009.  If the options remain unexercised after a period of 10 years from the date of grant, the 
options expire. 
iv)    Deferred Bonus Plan (“DBP”)
 The Deferred Bonus Plan enables the individual to defer receipt of their annual cash bonus (up to a maximum of 100%) and to invest an equivalent 
amount in the ordinary share capital of the Company.  The deferred bonus may be matched by the Company dependent upon the Company’s 
relative Total Shareholder Return over a three year period, up to a maximum of 300% of the deferred amount for upper decile performance. The 
shares cannot normally be exercised for three years and lapse if not exercised within 10 years from the date of grant.
v)    Save As You Earn Scheme (“SAYE”)
 The SAYE is open to all UK employees and provides for an exercise price equal to the closing quoted market price on the day before the date of grant, 
less a discretionary discount.  The options can be exercised during a six month period following the completion of either a three or five year savings 
period.  
 
Notes to the Accounts 
year ended 31 March 2007
Homeserve plc 110 Homeserve plc  111
Report & Accounts 2007
AR 2007 back half (20).indd   111 25/5/07   18:48:41 51. Share based payments (continued)
    ESOP KEIP LTIP DBP(i) SAYE
2006     
Number     
Outstanding at 1 April 2005    1,237,000  —  241,500  —  219,172 
Granted    172,000  229,000  —  52,672  34,501 
Lapsed    (10,000) —  —  —  (51,735)
Exercised    (450,000) —  —  —  (72,113)
Outstanding at 31 March 2006    949,000  229,000  241,500  52,672  129,825 
Exercisable at 31 March 2006    296,500  —  —  —  568 
Weighted average exercise price (£)     
Outstanding at 1 April 2005    5.21  —  —  —  4.68 
Granted    9.61  10.86  —  —  9.18 
Lapsed    7.16  —  —  —  4.82 
Exercised    4.37  —  —  —  3.94 
Outstanding at 31 March 2006    4.70  10.86  —  —  6.24 
Exercisable at 31 March 2006    5.56  —  —  —  4.66 
Range of exercise prices for options outstanding at 31 March 2006  £3.67 - £6.61 £9.61 - £15.76 —  —  £4.66 - £9.18
Weighted average remaining contractual life    8  10  3  2  3 
Weighted average fair value of options awarded in 2006   £3.18  £1.13  —  £13.54  £2.87 
2007     
Number     
Outstanding at 1 April 2006    949,000  229,000  241,500  52,672  129,825 
Granted    181,575  105,352  —  71,760  14,992 
Lapsed    —  —  —  —  (62,181)
Exercised    (161,000) —  —  —  (2,458)
Outstanding at 31 March 2007    969,575  334,352  241,500  124,432  80,178 
Exercisable at 31 March 2007    370,500  —  —  —  — 
Weighted average exercise price (£)     
Outstanding at 1 April 2006    4.70  10.86  —  —  6.24 
Granted    14.07  17.98  —  —  14.48 
Lapsed    —  —  —  —  5.45 
Exercised    5.27  —  —  —  5.55 
Outstanding at 31 March 2007    8.01  13.10  —  —  8.41 
Exercisable at 31 March    5.31  —  —  —  — 
Range of exercise prices for options outstanding at 31 March 2007  £4.70 - £14.07  £9.61 - £18.04  —  —  £4.66 - £14.48 
Weighted average remaining contractual life    7  9  2  2  3 
Weighted average fair value of options awarded in 2007   £3.13  £2.52  —  £7.68  £6.14 
   
Note: i) The figures in the table relate to the number of deferred share options only.
Notes to the Accounts 
year ended 31 March 2007
Report & Accounts 2007
Homeserve plc 112 Homeserve plc  113
AR 2007 back half (20).indd   112 25/5/07   18:48:42 The estimated fair values are calculated by applying a Black Scholes option pricing model for the ESOP and Share Save schemes and Monte Carlo 
simulations for the KEIP , LTIP and Deferred Bonus Plan.  The assumptions used in the models are as follows:
Input  Assumption
Share price  Price at date of grant
Exercise price  Per scheme rules
Expected volatility  20% - 30%
Option life  Per scheme rules
Expected dividends  Based on historic dividend yield
Risk free interest rate  4.2% - 5.1%
Levels of early exercises and lapses are estimated using historical averages.
The Company recognised total expenses of £1,444,000 (2006: £959,000) related to equity-settled share-based payment transactions.
52. Retirement beneﬁt schemes
Details of the Company only defined contribution and defined benefit schemes are provided in note 36. 
 
53. Share incentive reserve 
        Share   
        incentive   
        reserve  
        £’000 
Balance at 1 April 2005        653 
Share based payment charges in the year        959 
Share options exercised in year        (1,395)
Balance at 1 April 2006        217 
Share based payment charges in the year        1,444 
Share options exercised in year        (117)
Balance at 31 March 2007        1,544 
Notes to the Accounts 
year ended 31 March 2007
Homeserve plc 112 Homeserve plc  113
Report & Accounts 2007
AR 2007 back half (20).indd   113 25/5/07   18:48:42 54. Retained earnings
 
        Retained   
        earnings  
        £’000 
Balance at 1 April 2005        49,456 
Dividends        (10,688)
Total statement of recognised income and expense        25,844 
Deferred tax on share option gains taken directly to equity       655 
Current tax on exercised share options taken directly to equity      1,202 
Share options exercised in the year        1,395 
Tax on items taken directly to equity        522 
Balance at 1 April 2006        68,386 
Dividends        (13,367)
Total statement of recognised income and expense        33,692 
Deferred tax on share option gains taken directly to equity       1,523 
Current tax on exercised share options taken directly to equity      173 
Share options exercised in the year         117 
Balance at 31 March 2007        90,524 
Notes to the Accounts 
year ended 31 March 2007
Report & Accounts 2007
Homeserve plc 114 Homeserve plc 115
Five Year Summary 
2003 - 2007
AR 2007 back half (20).indd   114 25/5/07   18:48:42  
   ESOP  KEIP LTIP DBP(i) SAYE CSS
2006       
Number       
Outstanding at 1 April 2005   2,341,600  —  381,500  —  530,959  — 
Granted   498,000  1,408,000  55,000  68,884  245,946  — 
Lapsed   (75,000) (96,500) —  —  (134,528) — 
Exercised   (635,000) —  —  —  (113,638) — 
Outstanding at 31 March 2006   2,129,600  1,311,500  436,500  68,884  528,739  — 
Exercisable at 31 March 2006   250,100  —  —  —  1,418  — 
Weighted average exercise price (£)       
Outstanding at 1 April 2005   5.47  —  —  —  5.01  — 
Granted   9.61  10.11  —  —  9.18  — 
Lapsed   6.12  9.61  —  —  5.08  — 
Exercised   4.75  —  —  —  4.23  — 
Outstanding at 31 March 2006   4.43  10.15  —  —  7.10  — 
Exercisable at 31 March 2006   5.14  —  —  —  4.66  — 
Range of exercise proceeds for options outstanding at  
31 March 2006   £3.67 - £6.61  £9.61 - £15.76  —  —  £4.66 - £9.18 — 
Weighted average remaining contractual life   8  10  3  2  4  — 
Weighted average fair value of options awarded in 2006  £3.18  £1.13  £7.17  £13.54  £2.87  — 
       
2007       
Number       
Outstanding at 1 April 2006   2,129,600  1,311,500  436,500  68,884  528,739  — 
Granted   642,602  284,630  29,940  101,304  201,727  49,207 
Lapsed   (51,069) (140,000) —  —  (63,783) — 
Exercised   (419,014) —  —  —  (17,601) — 
Outstanding at 31 March 2007   2,302,119  1,456,130  466,440  170,188  649,082  49,207 
Exercisable at 31 March 2007   573,544  —  —  —  —  — 
Weighted average exercise price (£)       
Outstanding at 1 April 2006   4.43  10.15  —  —  7.10  — 
Granted   14.07  17.99  —  —  14.48  £18.29 
Lapsed   13.20  10.00  —  —  8.24  — 
Exercised   5.20  —  —  —  5.17  — 
Outstanding at 31 March 2007   8.82  11.70  —  —  9.33  £18.29
Exercisable at 31 March 2007   5.19  —  —  —  —  — 
Range of exercise proceeds for options outstanding at  
31 March 2007   £3.78 - £14.07  £9.61 - £18.04  —  —  £4.66 - £14.48  £18.29 
Weighted average remaining contractual life   7  9  2  2  3  2
Weighted average fair value of options awarded in 2007  £3.13  £2.52  £6.24  £7.68  £6.04  £18.29
Notes: i) The figures in the table relate to the number of deferred share options only.
Notes to the Accounts 
year ended 31 March 2007
Homeserve plc 96 Homeserve plc 97
Report & Accounts 2007
AR 2007 back half (20).indd   97 25/5/07   18:48:36 The estimated fair values are calculated by applying a Black Scholes option pricing model for the ESOP and SAYE and Monte Carlo simulations for the KEIP , 
LTIP and Deferred Bonus Plan.  The assumptions used in the models are as follows:
Input  Assumption
Share price   Price at date of grant
Exercise price   Per scheme rules
Expected volatility  20% - 30%
Option life   Per scheme rules
Expected dividends   Based on historic dividend yield
Risk free interest rate  4.2% - 5.1%
Levels of early exercises and lapses are estimated using historical averages.
The Group recognised total expenses of £3,361,000 (2006: £2,058,000) related to equity-settled share-based payment transactions.
36. Retirement benefit scheme
Defined contribution schemes
The Group operates a defined contribution retirement benefit scheme for all qualifying employees.  The assets of the scheme are held separately from 
those of the Group in funds under the control of trustees. Where there are employees who leave the scheme prior to vesting fully in the contributions, the 
contributions paid by the Group are forfeited by the employee.
The total cost charged to income of £1,306,000 (2006: £1,191,000) represents contributions payable to these schemes by the Group at rates specified in the 
rules of the plans.  At 31 March 2007, contributions of £nil (2006: £nil) due in respect of the current reporting period had not been paid over to the schemes.
Defined benefit scheme
The Group participates in a defined benefit scheme, the Water Companies Pension Scheme, for qualifying employees.  This is a sectionalised final salary 
scheme and the Group participates in the Homeserve plc Section of the Scheme.  The Section funds are administered by the trustees and are independent 
of the Group’s finances.  Contributions are paid to the Section in accordance with the recommendations of an independent actuarial adviser.  The Section 
has a history of raising pensions in line with price inflation, and these increases are reflected in the measurement of the obligation.  
The results of the actuarial valuation as at 1st April 2005 were updated to the accounting date by an independent qualified actuary in accordance with 
IAS19.  As required by IAS19, the value of the defined benefit obligation, the past service cost and the current service cost have been measured using the 
projected unit credit method.
                Valuation at
       2007  2006  
       £’000 £’000
Key assumptions used:    
Discount rate at 31 March       5.2% 4.9%
Retail price inflation       3.2% 3.0%
Expected rate of salary increases       5.2% 5.0%
Future pension increases       3.2% 3.0%
Expected rate of return on scheme assets at 31 March      7.8% 6.9%
Life expectancy of male aged 60 at balance sheet date      25.7 years 25.6 years
    
Notes to the Accounts 
year ended 31 March 2007
Report & Accounts 2007
Homeserve plc 98 Homeserve plc 99
AR 2007 back half (20).indd   98 25/5/07   18:48:36   IFRS UK GAAP
    2007  2006 2005 2004 2003 
    £’000  £’000  £’000  £’000  £’000 
Revenue      
Policy Membership    192,007  161,394  128,197  100,337  81,434 
Emergency Services    298,903  218,106  100,243  73,079  43,450 
Intra-Group    (13,548) (12,499) (7,729) (4,180) (3,617)
External Sales    477,362  367,001  220,711  169,236  121,267 
      
Profit      
Policy Membership    54,118  41,333  37,766  29,701  22,283 
Emergency Services    15,977  13,077  4,473  2,683  1,714 
    70,095  54,410  42,239  32,384  23,997 
Amortisation of acquisition intangibles    (6,451) (3,658) (310) —  — 
Amortisation of goodwill    —  —  —  (5,574) (4,550)
Exceptional costs    —  —  (2,787) (6,616) — 
      
Operating profit    63,644  50,752  39,142  20,194  19,447 
Net interest    (2,566) (776) (320) 113  75 
Profit before tax    61,078  49,976  38,822  20,307  19,522 
The amounts disclosed for 2004 and earlier periods are stated on the basis of UK GAAP because it is not practicable to restate amounts for periods prior 
to the date of transition to IFRSs. 
Notes to the Accounts 
year ended 31 March 2007
Homeserve plc 114 Homeserve plc 115
Report & Accounts 2007
Five Year Summary 
2003 - 2007
AR 2007 back half (20).indd   115 25/5/07   18:48:42       Number of  % of total 
Number of shares      shareholders shareholders % of shares
1 – 1,000      1,413 60.6 0.7
1,001 – 10,000      638 27.4 3.2
10,001 – 50,000      147 6.3 5.0
50,001 – 100,000      45 1.9 4.8
100,001 – 250,000      44 1.9 11.3
250,001 – 500,000      22 0.9 11.9
500,001 – 1,000,000      11 0.5 11.9
Over 1,000,001      11 0.5 51.2
      2,331 100.0 100.0
   
Unit trusts        34
Private investors        28
Other        10
Pension funds        10
Unknown        10
Insurance companies        8
        100
Shareholder Analysis 
31 March 2007
Report & Accounts 2007
Homeserve plc  116
Financial calendar
2007 
30 July Annual General Meeting
6 August Final dividend for the year ended 31 March 2007 to be paid
November Interim results for the six months ending 30 September 2007 to be announced
 
2008 
January Interim dividend for the year ending 31 March 2008 to be paid
May Preliminary announcement of results for the year ending 31 March 2008
June 2008 Report and Accounts to be circulated
 
Shareholder helpline
Homeserve’s shareholder register is maintained by Computershare Investor Services PLC who are responsible for making dividend payments and 
updating the register, including details of changes to shareholders’ addresses. If you have a query about your shareholding in Homeserve, you should 
contact Computershare by telephone on 0870 702 0000 or in writing to PO Box 82, The Pavilions, Bridgwater Road, Bristol, BS99 7NH.
Website
The Homeserve website at www.homeserve.com provides news and details of the Group’s activities plus information for shareholders. The investor 
section of the website contains real time and historical share price data as well as the latest results and announcements.
Shareholder Information
AR 2007 back half (20).indd   116 25/5/07   18:48:43 1	 Highlights	 of	 the	 Year
4	 Chairman’s 	 Statement
10	 Chief 	 Executive’s	 Review
24	 Financial 	 Review
32	 Corporate 	 and	 Social	 Responsibility
38	 Directors’ 	 Biographical	 Details
40	 Directors 	 and	 Advisers
41	 Directors’ 	 Report
44	 Corporate 	 Governance
49	 Remuneration 	 Report
65	 Statement 	 of	 Directors’	 Responsibilities
66	 68	 Group 	 Income	 Statement
69	 Group 	 Statement	 of	 	 Recognised	 Income	 and	 Expense
70	 Group 	 Balance	 Sheet
71	 Group	 Cash	 Flow	 Statement
72	 Notes	 to	 the	 Accounts
103	 Independent	 Auditors’	 Report
104	 Company	 Statement	 of	 	 Recognised	 Income	 and	 Expense
105	 Company 	 Balance	 Sheet
106	 Company 	 Cash	 Flow	 Statement
107	 Notes 	 to	 the	 Accounts
115	 	 Five 	 Year	 Summary
116	 Shareholder 	 Analysis
116	 Shareholder 	 Information
Printed	 using	 vegetable	 oil	 based	 inks	 on	 Era	 Silk	 which	 is	 made	 from	 ECF	 (elemental	 chlorine	 free)	 fibre	 sourced	 from	 sustained	 forests	 (50%)	 and	 recycled	 waste	 (50%).	 The	paper	was	sourced	from	an	FSC	Approved	mill.
Independent	Auditors’	Report Report & Accounts 2007
Report & Accounts 2007	 Homeserve plc
Homeserve	plc
Cable Drive, Walsall WS2 7BN
t. 01922 426 262
f. 01922 427 904
www.homeserve.com