Directors’ 
report and 
consolidated 
report and 
consolidated 
report and 
fi nancial 
statements
30 April 2007 Contents 1	 About	Broker	Network
3	 Highlights	of	2006/2007
4	 Chairman’s	statement
6	 Chief	Executive’s	review
9	 Finance	Director’s	review
12	 Board	of	Directors	and	 Advisors
13	 Directors’ 	report
16	 Corporate	Governance
18	 Remuneration	Committee	report
23	 Statement	of	Directors’ 	Responsibilities	in 	 Respect	of	the	 Annual	Report	and	the 	 Financial	Statements
24	 Independent	 Auditors	Report	to	the	Members 	 of	Broker	Network	Holdings	plc
26	 Consolidated	profit	and	loss	account
27	 Consolidated	balance	sheet
28	 Company	balance	sheet
29	 Consolidated	cash	flow	statement
31	 Notes	to	the	Financial	Statements
49	 Notice	of	the	2007	 Annual	General	Meeting About Broker Network
Broker	Network	Holdings	Plc, 	trading	as	Broker	 Network	Group, 	is	the	parent	company	of	4	trading	 businesses:-
•	 Broker	Network	Limited
•	 Broker	Network	Insurance	Brokers
•	 Broker	Network	London	Markets
•	 TL	Risk	Solutions
Our	overriding	objective	is	to	use	our	strong	 commercial	awareness, 	significant	varied	experience	 and	innovative	thinking	to	deliver	valuable	brands, 	 products	and	services	that	make	the	life	of	the	 end	customer, 	insurance	broker	and	insurer	more	 productive	and	profitable.
We	work	in	partnership	with	many	of	the	UK’s	leading	 insurers	to	deliver	insurance	products	and	services	to	 UK	businesses.
Across	the	Group	we	employ	over	350	people, 	over	23	 locations.	 We	have	a	total	annual	premium	income	 of	approximately	£450	million, 	with	168	Members. 	 We	 have	 made	 20	 acquisitions	 since	 listing	 on	 AIM	 in	 May	 2004,	and	we	currently	have	a	market	capitalisation	 approaching	£60	million. 	 Our Businesses
Broker	Network	Limited	(BNL)
Broker	Network	is	the	trading	name	of	Broker	Network	 Limited.	It	is	the	UK’s	largest	network	of	independent	 commercial	insurance	brokers	with	a	Membership	of	 168	brokers. 	 Broker	Network	negotiates	centrally	with	insurers	or	 wholesale	intermediaries	using	the	full	combined	 weight	of	the	Members	and	Members	can	place	 business	via	these	facilities. 	 In	addition, 	Broker	Network	provides	Members	with	 an	extensive	range	of	business	support	services	 including	marketing, 	compliance, 	IT, 	training	and	 human	resource	management.
Broker Network Holdings plc, Directors’ report and 
consolidated financial statements, 30 April 2007
01 Broker Network Holdings plc, Directors’ report and 
consolidated financial statements, 30 April 2007
Broker	Network	Limited	(BNL)
BNIB	is	our	thriving	retail	arm	of	community	insurance	 brokers,	acquired	from	both	within	and	without	 Membership.
It	was	established	in	2004	to	support	Broker	Network’s	 proposition	for	Members	contemplating	retirement.
Members	who	have	sold	their	businesses	to	Broker	 Network	benefit	from	a	flexible	deal	structure	and	 retain	their	company	name, 	existing	employees	and	 often	premises. 	 TL	Risk	Solutions	Limited	(TLRS)
TL	Risk	Solutions	is	a	leading	provider	of	risk	 management,	healthcare	and	insurance	advice	to	 businesses	and	private	individuals	across	the	UK. 	 The	business	currently	has	some	4,000	corporate	 clients	and	over	18,000	private	clients	and	its	 principal	focus	is	on	mid-sized	corporate	businesses	 in	the	UK	and	mid	to	high	net	worth	private	 individuals.	 The	company	places	over	£50	million	GWP	 into	the	general	insurance	and	healthcare	markets. 	 Established	originally	as	the	insurance	broking	arm	of	 the	 Towry	Law	Group	in	1965, 	it	was	sold	to	the	Broker	 Network	Group	on	1	July	2006.
Broker	Network	London	Markets	Limited	(BNLM)
BNLM	is	the	trading	name	of	London	Broking	Services	 Limited	and	was	established	to	provide	Members	with	 access	to	Lloyd’s	and	London	markets	for	insuring	 clients	involved	in	specialist	or	high-risk	activities. 	 Through	BNLM, 	Broker	Network	was	the	first	network	to	 receive	full	accreditation	as	a	Lloyd’s	broker. 	 Financial	Performance
Year	on	year, 	Broker	Network	Group	has	increased	 turnover,	profit,	and	earnings	per	share, 	performing	 ahead	of	market	expectations.
Our Vision
•	 To	maintain	our	position	as	the	number	one	 Network	for	independent	insurance	brokers
•	 To	reach	a	Membership	of	500	brokers	by	2015
•	 To	be	a	top	ten	insurance	broker	in	the	UK
•	 To	have	a	total	annual	premium	income	of	£1.5	 billion	 The	sector	is	strong	and	we	are	working	to	make	it	 even	stronger.
It’s	about	the	future. 	It’s	about	growth	and	success	for	 you,	our	shareholders, 	and	therefore	for	us	–	because	 we	only	win	when	you	do.
02
0
5
10
15
20
25
Fully	Dilut ed	EPS
Pence
2004
2005
2006
2007
£-
£5,000,000
£10,000,000
£15,000,000
£20,000,000
£25,000,000
TURNOVER OPERATING	PROFIT
2004
2005
2006
2007 Broker Network Holdings plc, Directors’ report and 
consolidated financial statements, 30 April 2007
Highlights of 
2006/2007
Financial Highlights
•	Turnover	increased	by	86	%	to	£23.26	million	(2006: 	 £12.54	million)
•	Operating	profit	up	147%	at	£5.15	million	(2006: 	 £2.09	million)
•	Profit	before	tax	and	goodwill	amortisation	up	100%	 at	£6.53	million	(2006: 	£3.26	million)
•	Group	operating	margin	before	amortisation	29.5%	 (2006:	23.5%)
•	Fully	diluted	earnings	per	share	up	98%	at	20.33p	 (2006:	10.27p)
•	Dividend	payment	of	1.20p	per	share	(2006: 	1.00p)
Operational Highlights
•	Network	Membership	increased	by	over	10%	and	 average	size	of	new	Member	64%	higher
•	Members	performing	well, 	with	a	number	growing	 through	acquisition
•	Successfully	completed	integration	of	 TL	Risk	 Solutions	into	the	Group
•	Customer	retention	across	retail	division	is	 consistently	high
•	Group	wide	re-brand	successfully	launched	for	 each	operating	division
•	Reputation	as	experienced	acquirer	consolidated
•	Continued	pursuit	of	expansion	and	acquisition	 opportunities	building	a	strong	pipeline
03 Broker Network Holdings plc, Directors’ report and 
consolidated financial statements, 30 April 2007
Chairman’ s 
statement
I	am	pleased	to	report	another	excellent	year	for	 Broker	Network. 	 The	company	has	continued	to	 grow	strongly	both	by	acquisition	and	organically, 	 profitability	has	continued	to	improve, 	and	the	 reputation	of	the	company	within	the	insurance	 industry	has	been	significantly	enhanced.
The	results	for	the	financial	year	reflect	four	primary	 drivers.	First, 	there	are	full	year	contributions	from	 acquisitions	made	during	2005-06. 	Second, 	 acquisitions	made	during	2006-07	including	the	 major	step	of	acquiring	 TLRS	have	provided	a	 significant	contribution.		 Third,	the	company	has	 generated	growth	by	increasing	the	number	and	 size	of	network	Members. 	Finally, 	as	insurers	have	 recognised	the	increasing	size	and	quality	of	the	 company,	improved	insurer	terms	have	contributed	 significantly. 	 These	same	performance	drivers	will	 continue	to	influence	the	company	over	the	coming	 years,	although	with	the	company’s	greater	size, 	the	 rate	of	growth, 	which	has	been	dramatic	over	the	last	 couple	of	years, 	will	gradually	reduce.
The	rate	of	broker	acquisition	has	slowed	somewhat	 in	the	last	financial	year. 	 This	partly	reflects	the	 management	team’s	desire	to	 “draw	breath” 	following	 the	acquisition	of	 TLRS,	but	also	a	relative	absence	of	 attractive	opportunities. 	However, 	a	continuous	effort	 has	been	put	into	building	the	acquisitions	pipeline	 and	there	are	now	a	good	number	of	potential	 opportunities.	 We	remain	cognisant	of	the	need	not	 to	overpay	and	this	will	inevitably	influence	the	rate	at	 which	acquisitions	are	made.
TLRS	has	performed	in	line	with	our	expectations	 at	the	time	of	acquisition. 	 This	acquisition	was	a	 particularly	significant	step	because	of	its	size	and	it	is	 pleasing	that	the	integration	process	has	progressed	 smoothly.
The	core	network	business	has	performed	very	 strongly,	mainly	through	margin	enhancement. 	 We	 now	perceive	opportunities	for	further	organic	growth	 in	this	area	–	primarily	by	adding	new	members	 as	well	as	increasing	their	average	size	still	further. 		 Resources	have	been	added	to	the	new	member	 sales	team	to	enable	this	growth	to	follow.
04 Broker Network Holdings plc, Directors’ report and 
consolidated financial statements, 30 April 2007
As	the	company	has	grown	so	has	the	organisation	 and	we	now	employ	more	than	350	people	in	23	 locations	around	the	country. 	 These	results	have	only	 been	attained	through	their	hard	work, 	dedication	 and	energy. 		 The	management	team	has	developed	 along	with	the	size	of	the	organisation	and	it	is	 reassuring	that	there	is	now	strength	in	depth	which	 can	be	called	upon	as	the	company	grows	further. 	 My	thanks	are	extended	to	all	employees	for	the	effort	 that	has	gone	into	achieving	these	results.
We	are	pleased	to	announce	the	payment	of	a	 dividend	to	shareholders	for	the	year	ended	30	 April	 2007.	 This	will	be	payable	on	26	October	2007	to	all	 shareholders	on	the	register	at	28	September	2007. 	 This	is	subject	to	approval	at	the	annual	general	 meeting	of	the	Company	on	17	October	2007.
The	outlook	for	the	company	is	good. 	 We	can	see	the	 potential	to	further	consolidate	our	position	as	the	 leading	insurance	broking	network	in	the	country.
Faisal	Rahmatallah
Chairman
05 Broker Network Holdings plc, Directors’ report and 
consolidated financial statements, 30 April 2007
Chief Executive’ s 
review
I	am	delighted	to	be	reporting	another	year	of	 excellent	results	for	the	Broker	Network	Group. 	Despite	 extremely	tough	insurance	market	conditions, 	we	 continue	to	demonstrate	that	our	diverse	business	 model	allows	us	to	prosper	whatever	underlying	 market	conditions	prevail.
Broker Network Limited 
Our	Network	business	continues	to	thrive	with	turnover	 increasing	by	45%	from	£7.32	million	to	£10.65	million, 	 and	operating	profit	growing	from	£3.11	million	to	 £5.71	million	-	an	increase	of	84%. 		Economies	of	 scale	mean	we	have	been	able	to	increase	our	profit	 margin	in	this	business, 	and	there	remains	plenty	of	 headroom	to	grow	income	and	profitability	still	further.
Recruitment	of	new	Members	in	the	year	was	in	line	 with	our	forecast. 	 We	are	also	now	attracting	larger	 firms	alongside	our	traditional	broker	base, 	evidenced	 by	the	relative	size	of	new	recruits	which	were, 	on	 average,	64%	larger	than	our	existing	Members. 	Our	 service	infra-structure	and	proposition	is	sufficiently	 flexible	to	meet	all	our	wide	ranging	customer	 requirements	offering	real	benefit	to	brokerages	of	 most	sizes.
The	pipeline	of	prospective	new	Members	also	 remains	extremely	healthy.
Membership	numbers	have	fluctuated	throughout	 the	period	with	Members	merging	and	a	handful	 of	others	deciding	to	retire. 	 There	has	also	been	a	 small	number	leaving	at	our	behest	as	a	result	of	our	 performance	and	suitability	monitoring. 	 We	believe	 this	is	the	right	strategy	and	helps	to	reinforce	our	 commitment	to	quality	and	the	high	standards	we	 expect	in	return	for	Membership.
Our	ultimate	Membership	goal	is	to	have	a	Broker	 Network	Member	within	every	significant	community	 in	the	UK. 	Our	updated	target	is	250	firms	by	 2010	rising	to	500	by	2015. 		 To	put	this	ambition	 in	perspective, 	there	are	currently	around	4,500	 insurance	brokers	in	the	UK. 	 This	number	is	declining	 due	to	the	consolidation	that	is	taking	place, 	 although	some	of	the	decline	is	offset	by	new	start-up	 businesses.
06 Broker Network Holdings plc, Directors’ report and 
consolidated financial statements, 30 April 2007
The	insurance	market	accepts	that	membership	of	 a	network	is	a	growing	necessity	for	independent	 brokers	which	benefits	both	them	and	insurers. 		 As	market	leaders	we	profit	from	this	and	believe	 that	penetration	of	over	10%, 	whilst	a	challenge, 	is	 nevertheless	achievable.
As	part	of	a	Group	wide	re-brand	we	began	looking	 for	a	phrase	that	would	sum	up	the	essence	and	 values	of	our	network	business. 	 The	process	had	 us	consult	our	own	people, 	our	Members	and	 Partner	Insurers	and	eventually	led	us	to	the	phrase	 Enterprising Champion.	 We	have	also	taken	the	 opportunity	to	document	our	values	and	therefore	 what	behaviour	is	consistent	with	these. 	In	this	way	 we	should	be	able	to	ensure	that	as	the	business	 grows	we	do	not	lose	sight	of	what	has	made	us	so	 successful	to	date.
During	this	exercise	we	also	received	a	new	visual	 identity	and	have	re-written	our	service	proposition	to	 Members	to	ensure	it	is	consistent	with	the	new	brand.
The Retail Insurance Division (comprising TL Risk 
Solutions and Broker Network Insurance Brokers)
Our	retail	division	is	represented	across	the	country	 via	our	owned	brokers	–	those	Members	and	others	 acquired	since	the	formation	of	this	division	at	the	 beginning	of	2004. 	So	far	we	have	made	20	retail	 division	acquisitions, 	our	latest	one	being	completed	 on	31	 August	2007, 	and	we	now	trade	from	23	sites	 across	mainland	UK.
The	division	hit	sales	targets	for	2006/07	and	 customer	retention	remains	extremely	high. 	 This	 is	particularly	encouraging	in	the	 TLRS	business	 where	we	were	required	to	relocate	five	offices	into	 new	premises	during	the	period	with	the	inevitable	 disruption	that	this	entails. 	 Turnover	for	the	division	 grew	in	the	year	by	144%	to	£12.83	million, 	whilst	 operating	profit	before	amortisation	rose	385%	to	£	 2.13	million.
Whilst	only	completing	two	acquisitions	in	the	 current	period, 	we	continue	nonetheless	to	focus	 on	providing	an	exit	route	for	brokers	contemplating	 retirement	and	the	purchase	of	community	general	 insurance	brokers	remains	at	the	core	of	Group	 strategy.
However,	the	market	for	broker	purchases	is	fiercely	 competitive,	particularly	since	insurers	entered	 the	fray	last	year. 	 We	now	have	to	contend	with	 competitors	who	are	not	as	disciplined	as	we	are	 when	it	comes	to	the	financial	returns	they	expect	 from	their	acquisitions. 	Despite	this, 	we	still	firmly	 believe	that	there	are	those	who	find	our	proposition	 more	attractive	than	the	competition, 	borne	out	 by	the	fact	that	we	are	at	present	reviewing	a	 number	of	prospects	for	the	current	year. 	 We	remain	 confident	that	we	can	manage	expectations	and	 complete	several	transactions	which	will	all	be	value	 enhancing.
Other Developments
Broker	Network	London	Markets	(BNLM)	was	 established	to	provide	network	Members	with	access	 to	Lloyd’s	and	the	London	markets	for	insuring	 clients	involved	in	specialist	or	high-risk	activities. 	 The	 division	serves	us	well	as	an	investment	for	a	cyclical	 market	–	less	utilised	in	the	current	 ‘soft’	market	 where	premiums	are	low	and	traditional	insurers	 are	prepared	to	underwrite	to	a	wider	risk	profile, 	 but	indispensable	once	the	insurance	market	once	 again	hardens.
Despite	such	challenging	trading	conditions	turnover	 increased	by	2%	from	£0.27	million	to	£0.28	million	 although	the	business	continues	to	make	a	small	loss. 	 Insurance Market Conditions
It	has	been	a	tough	year	for	insurers	underwriting	 business	in	the	UK	following	the	storms	in	January	 2007	and	floods	in	June	and	July.
Only	days	after	we	announced	a	trading	update	 in	June	2007, 	where	we	commented	on	prevailing	 benign	weather	conditions, 	the	UK	experienced	 some	of	the	worst	flooding	in	its	history. 	Some	industry	 sources	are	even	suggesting	that	the	cost	to	insurers	 of	flood	damage	could	top	£5	billion.
07 Broker Network Holdings plc, Directors’ report and 
consolidated financial statements, 30 April 2007
The	impact	of	the	flooding	on	insurer	rating	is	unlikely	 to	filter	through	in	2007, 	although	clearly	it	will	be	 present	when	they	announce	their	results. 	 We	have	 already	seen	some	insurers	publicly	stating	their	 intention	to	increase	rates	to	recover	their	losses	 going	forwards. 		In	reality	the	floods	are	only	the	 catalyst	rather	than	the	root	cause	of	these	intentions. 	 	 Almost	all	major	insurers	were	reporting	deteriorating	 results	for	the	first	half	of	2007	before	the	impact	of	 the	floods	is	taken	into	account.
It	is	likely	therefore	that	the	current	action	being	 taken	by	insurers	will	stall	deflation	in	premiums	in	the	 remainder	of	2007	and	we	are	likely	to	see	rates	rise	 gradually	during	the	first	half	of	2008.
As	premiums	rise	our	earnings	across	the	Group	 will	increase	and	we	will	see	additional	organic	 growth	from	our	network	and	retail	divisions. 	 As	we	 mentioned	on	11	June	2007, 	we	have	worked	hard	 to	ensure	our	earnings	from	our	key	Partner	Insurers	 are	secure	for	the	longer	term, 	by	demonstrating	real	 value	in	the	service	we	provide	them. 	 As	the	market	 hardens,	with	inevitable	downward	pressure	on	broker	 margins,	we	will	begin	to	reap	the	benefits	of	these	 arrangements.
I	reiterate	that	the	diverse	nature	of	our	business	 means	the	Group	is	well	placed	to	trade	comfortably	 at	any	point	in	the	insurance	cycle. 	 We	remain	 confident	that	we	will	have	the	opportunity	to	 demonstrate	this	once	again	in	the	coming	year.
Outlook for 2007-08
I	am	delighted	to	have	maintained	our	market	 leading	position	and	intend	to	build	on	it.
There	are	still	abundant	opportunities	for	expansion	 within	this	fast	moving	industry	and	we	are	working	 hard	to	remain	at	the	forefront	in	our	areas	of	 expertise.	For	example	we	are	currently	evaluating	 the	opportunity	that	exists	to	expand	our	Healthcare	 business	following	the	successful	acquisition	and	 integration	of	 TLRS,	which	has	a	sizeable	Healthcare	 division	within	it. 	 We	remain	realistic	and	prudent	 in	our	acquisition	programme	and	we	continue	to	 evaluate	critically	our	offering	to	network	Members	 and	Partner	Insurers	to	ensure	we	retain	our	market	 leading	position	as	the	UK’s	number	one	network	for	 independent	insurance	brokers. 	 We	strongly	believe	that	the	Broker	Network	 business	model	remains	relevant	and	robust. 	 Whilst	 challenging	trading	conditions	lay	ahead	we	are	 looking	forward	with	confidence	to	another	year	 of	good	performance	and	enhanced	shareholder	 value.
Grant	Ellis
Chief	Executive	Officer
08 Broker Network Holdings plc, Directors’ report and 
consolidated financial statements, 30 April 2007
Finance Director’ s 
review
Turnover
Turnover	for	the	year	was	£23.3m, 	including	£6.7m	 from	acquisitions	made	during	the	year. 	 This	is	an	 overall	increase	of	86%	from	£12.5m	in	2006, 	32%	 excluding	 acquisitions	 in	 the	 year.	 Turnover	 in	 the	 retail	 division	grew	strongly	to	£12.8m, 	an	increase	of	144%. 	 This	is	due	to	the	acquisition	of	two	further	brokers	 in	the	year	and	the	full	year	impact	of	previous	 acquisitions.	 The	Network	also	grew	strongly	with	the	 addition	of	a	net	16	new	Members	and	a	turnover	 increase	of	45%	from	£7.3m	to	£10.6m. 	 Administrative Expenses
Administrative	expenses, 	excluding	goodwill	 amortisation,	were	£16.4m, 	an	increase	of	71%	on	 the	prior	year. 	 Whilst	we	continue	to	invest	in	both	our	 head	office	and	retail	infrastructure	the	impact	of	the	 TLRS	acquisition	accounted	for	44%	of	this	increase.
Intangible	assets	are	being	amortised	over	between 	 5	and	20	years	resulting	in	a	goodwill	amortisation	 charge	of	£1.7m	for	the	year.
	 	 2007 2006 % Change
  £000 £000 
Turnover	 	 23,260	 12,535	 86%
Administrative	expenses	 	 (18,110)	 (10,447)	 73%
Administrative	expenses	excluding 	 goodwill	amortisation	 	 (16,393)	 (9,592)	 71%
Operating	profit	 	 5,150	 2,088	 147%
Profit	before	tax	 	 4,814	 2,405	 100%
Tax	 	 (1,628)	 (800)	 104%
Profit	after	tax	 	 3,186	 1,605	 99%
Basic	EPS	 	 20.74p	 10.56p	 96%
Diluted	EPS	 	 20.33p	 10.27p	 98%
Capital	expenditure	 	 919	 241	 281%
Acquisition	spend	 	 13,644	 4,086	 234%
Cash	 	 2,801	 1,943	 44%
09 Broker Network Holdings plc, Directors’ report and 
consolidated financial statements, 30 April 2007
Profitability
Profit	before	tax	grew	strongly, 	from	£2.4m	to	£4.8m, 	an	increase	of	100%. 	 The	acquisition	of	a	further	2	brokers	 during	the	year, 	bringing	the	total	number	to	19, 	has	substantially	increased	the	headcount	of	the	group	 bringing	it	to	381	by	the	year	end. 	However, 	there	was	a	17%	increase	in	turnover	per	employee	and	a	55%	 increase	in	operating	profit	per	employee	as	shown	below:-
	 2007 2006	 %	change
Average	headcount	 364 229	 59%
	 2007 2006	 %	change 	 	 £ £
Turnover	per	employee	 63,901	 54,738	 17%
Operating	profit	per	employee	 14,148	 9,118	 55%
Services	to	our	network	Members	continue	to	be	 improved	and	the	infrastructure	to	support	a	larger	 retail	branch	structure	is	in	place	making	further	 acquisitions	a	priority	in	the	coming	year.
Taxation
The	group’s	tax	charge	for	the	year	is	£1.6m	which	 represents	an	effective	tax	rate	of	34%. 	 This	is	higher	 than	the	standard	rate	of	corporation	tax	of	30%	 due	to	expenses	not	deductible	for	tax	purposes	 which	is	predominantly	goodwill	amortisation	on	 consolidation.
Earnings per share
Basic	earnings	per	share	is	20.74p	compared	to	 10.56p	in	2006. 	 This	is	based	on	a	weighted	average	 15.36m	shares	in	2007	compared	to	15.06m	in	2006.
Capital expenditure
Capital	expenditure	for	the	group	continues	to	be	 predominantly	for	office	equipment, 	IT	hardware	 and	software. 	For	the	network	business	we	have	 invested	in	new	reconciliation	software	and	computer	 equipment	for	new	staff. 	In	both	the	Head	Office	 and	our	retail	branches	we	have	installed	a	new	 integrated	telephone	system	during	the	year	to	 ensure	that	we	can	benefit	from	economies	of	scale	 and	communication	between	sites. 	 We	also	relocated	 five	 TLRS	sites	following	the	acquisition
Total	capital	expenditure	was	£0.9m	compared	to	 £0.2m	in	2006.
Acquisitions
£12.5m	was	spent	on	the	initial	payments	and	 fees	for	the	acquisition	of	a	further	2	brokers	in	the	 year.		In	addition, 	£1.2m	was	paid	out	in	deferred	 consideration	payments	to	former	principals	for	 previous	acquisitions.
Intangibles	and	Goodwill	 Amortisation
Purchased	goodwill	(representing	the	excess	of	 the	fair	value	of	consideration	over	the	fair	value	 of	the	separable	net	assets	acquired)	in	respect	 of	acquisitions	is	capitalised	as	goodwill	which	is	 amortised	over	a	5	to	20	year	period	depending	on	 its	estimated	useful	life.
Cashflow 
Broker	Network	continues	to	be	strongly	cash	 generative	and	cash	inflow	from	operating	activities	 was	£4.7m	(2006: 	£3.0m). 		 10 Broker Network Holdings plc, Directors’ report and 
consolidated financial statements, 30 April 2007
Bank funding
During	the	year	the	£2.5m	facility	agreed	with	 Lloyds	 TSB	bank	(of	which	£1m	was	utilised	to	fund	 acquisitions	in	the	prior	year)	was	replaced	with	a	 £15.5m	facility, 	£13m	of	which	was	utilised	for	the	 purchase	of	 Towry	Law	Insurance	Brokers	Limited. 	 The	 remaining	funding	available	for	drawdown	therefore	 remains	at	£1.5m. 	 Risk Management
The	risk	management	process	established	in	2004/05, 	 through	which	the	major	risks	faced	by	the	group	 were	identified	and	evaluated, 	continues	to	operate. 	 Each	subsidiary	Board	of	Directors	reviews	the	risk	 register	formally	every	six	months	prior	to	review	by	the	 Group	Board. 	 This	is	then	followed	by	a	consideration	 at	the	next	 Audit	Committee	meeting. 	 Assurance	work	 on	the	retail	division	is	conducted	on	a	regular	basis.
Transition to International Accounting Standards
As	an	 AIM	listed	company	we	will	adopt	IAS	for	our	 financial	statements	for	the	year	ending	30	 April	2008.
Julie	Hale
Group	Finance	Director
11 Broker Network Holdings plc, Directors’ report and 
consolidated financial statements, 30 April 2007
Board of Directors 
and Advisors
Directors
P	Bates
MG	Collins
PG	Ellis
JK	Hale	 NF	Law
M	Pendle
F	Rahmatallah
MD	 Wood
Secretary
JK	Hale
Auditors
KPMG	 Audit	Plc
1	 The	Embankment
Neville	Street
Leeds
LS1	4DW
Principal bankers
Lloyds	 TSB	Bank	plc
1st	Floor
31-32	Park	Row
Leeds	LS1	5JD
Royal	Bank	of	Scotland	 plc
Regents	House
42	Islington	High	Street
London
N1	8XL
HSBC	Bank	plc
33	Park	Row
Leeds
LS1	1LD
Broker and Nominated 
Advisor
Cenkos	Securities	Limited
6,	7, 	8	 Tokenhouse	 Yard
London
EC2R	7AS
Financial PR Advisor
Buchanan	 Communications	Limited
45	Moorfields
London
EC2Y	9AE
Registrar
Computershare	Investor	 Services	plc
PO	Box	82
The	Pavilions
Bridgewater	Road
Bristol
BS99	7NH
Registered office
Mowbray	House
Mowbray	Square
Harrogate
North	 Yorkshire
HG1	5AU
12 Broker Network Holdings plc, Directors’ report and 
consolidated financial statements, 30 April 2007
Directors’ report
The	directors	present	their	report	and	the	audited	 accounts	of	the	group	for	the	year	ended	30	 April	 2007.
Principal activity and business review
The	principal	activity	of	the	group	is	the	provision	of	 access	to	UK	general	insurance	markets	on	behalf	 of	network	members, 	facilitating	the	conclusion	 of	insurance	transactions	between	these	parties	 and	the	acquisition	and	management	of	general	 insurance	intermediaries. 	 The	group	also	provides	 advisory,	compliance, 	training	and	other	services	to	 insurance	intermediaries.
Business review 
The	information	that	fulfils	the	Business	Review	 requirements	for	Directors’ 	Reports	can	be	found	in	 the	Chief	Executive’s	Review	and	Finance	Director’s	 Review.
More	specifically	information	in	relation	to	business	 KPIs	can	be	found	in	the	Finance	Director’s	review	on	 Page	9	and	risks	and	uncertainties	facing	the	group	 can	be	found	in	the	Chief	Executive’s	report	on 	 page	6.
Result and dividends
The	profit	on	ordinary	activities	before	tax	was	£4.8m	 (2006:	£2.4m).
The	profit	before	goodwill	amortisation	and	tax	for	the	 period	was	£6.5m	(2006: 	£3.3m).
A	dividend	of	1.2p	per	share	will	be	proposed	at	the	 forthcoming	 Annual	General	Meeting.
13 Broker Network Holdings plc, Directors’ report and 
consolidated financial statements, 30 April 2007
Directors and directors’ interests
The	Directors	who	held	office	during	the	year	were	as	 follows:
FJ	Rahmatallah	 Non-executive	Chairman	
PG	Ellis	 Chief	Executive
JK	Hale	 Group	Finance	Director	
MG	Collins	 Non-executive	Director	
P	Bates	 Non-executive	Director	
M	Pendle	 Non-executive	Director	
MD	 Wood	 Managing	Director, 	Broker		 	 Network	Limited		 NF	Law	 Managing	Director, 	 	 Broker	Network	Insurance		 	 Brokers	Limited		 Details	of	Directors’ 	service	contracts	and	the	interests	 of	the	Directors	in	the	shares	of	the	company	and	 in	options	over	such	shares	are	disclosed	in	the	 Remuneration	Committee	Report	on	pages	18	to	22. 	 The	 Articles	of	 Association	stipulate	that	one	third	of	 the	directors	will	retire	by	rotation	and, 	accordingly, 	 PG	Ellis, 	JK	Hale	and	M	Pendle	will	retire	and	offer	 themselves	for	re-election.
Equal Opportunities
The	group	is	an	equal	opportunities	employer	 and	is	committed	to	providing	equal	opportunities	 throughout	employment. 	 This	includes	the	recruitment	 process,	training	and	promotion	of	workers, 	and	to	 eliminating	discrimination	in	the	workplace	whether	 on	grounds	of	gender, 	marital	status, 	race, 	colour, 	 national	or	ethnic	origin, 	nationality, 	age	or	disability.
Political and charitable contributions
Donations	of	£1,877	were	made	to	charities	during	 the	year	(2006: 	£659). 	 The	group	made	no	political	 contributions	during	the	period. 		 Substantial shareholdings
The	company	has	been	informed	that	on	12	September	2007	the	following	shareholders	held	substantial	 holdings	of	the	issued	ordinary	shares	of	the	company.
	 Holding of ordinary shares Issued share capital 
 number %
PG	Ellis	 2,036,535	 13.22
JP	Morgan	 Asset	Management	 1,408,450	 9.14
P	Bates	 1,273,800	 8.27
D	Belgian	 1,250,000	 8.11
14 Broker Network Holdings plc, Directors’ report and 
consolidated financial statements, 30 April 2007
Going concern
The	Directors	confirm	that	they	are	satisfied	that	the	 company	and	the	group	have	adequate	resources	to	 continue	in	business	for	the	foreseeable	future. 	For	this	 reason,	they	have	adopted	the	going	concern	basis	 in	preparing	the	accounts.
Creditor payment policy
The	group’s	strategy	is	to	develop	mutually	beneficial	 relationships	with	key	suppliers. 	 The	group’s	policy	in	 relation	to	all	of	its	suppliers	is	to	settle	the	terms	of	 the	transaction	and	to	abide	by	those	terms, 	provided	 that	it	is	satisfied	that	the	supplier	has	provided	the	 goods	or	services	in	accordance	with	the	agreed	 terms	and	conditions.
The	average	number	of	days’ 	purchases	outstanding	 for	payment	by	the	group	was	21	days	(2006: 	20	 days).
Disclosure of information to auditors
The	directors	who	held	office	at	the	date	of	approval	 of	this	report	confirm	that, 	so	far	as	they	are	each	 aware,	there	is	no	relevant	audit	information	of	which	 the	Company’s	auditors	are	unaware, 	and	each	 director	has	taken	all	the	steps	that	they	ought	to	 have	taken	as	a	director	to	make	themselves	aware	 of	any	relevant	audit	information	and	to	establish	that	 the	company’s	auditors	are	aware	of	that	information.
Annual General Meeting
The	 Annual	General	Meeting	will	be	held	on 	 17	October	at	11.00am	at	Rudding	Park, 	Follifoot, 	 Harrogate,	North	 Yorkshire	HG3	1JH
Auditors
In	accordance	with	Section	384	of	the	Companies	 Act	1985, 	a	Resolution	for	the	re-appointment	of	 KPMG	 Audit	Plc	as	auditors	of	the	company	is	to	 be	proposed	at	the	forthcoming	 Annual	General	 Meeting.
This	report	was	approved	by	the	Board	on 	 12	September	2007	.
By	order	of	the	board
JK	Hale
Secretary
15 Broker Network Holdings plc, Directors’ report and 
consolidated financial statements, 30 April 2007
Corporate 
Governance
Compliance Statement
The	group	is	not	required	to	comply	with	the	 provisions	of	the	Combined	Code	on	Corporate	 Governance	appended	to	the	Listing	Rules	of	the	 Financial	Services	 Authority	(“the	Code”). 	 The	Board	 of	Directors	recognises	the	importance	of, 	and	is	 committed	to, 	ensuring	that	effective	corporate	 governance	procedures	relevant	to	smaller	listed	 groups	are	in	place. 	 The	Board	agrees	with	the	 principals	of	the	Code	and	continues	to	work	 towards	obtaining	substantial	compliance	with	the	 Code.		 The	commentary	below	outlines	the	group’s	 achievements	during	the	year	ended	30	 April	2007.
Internal control and risk management process
The	Board	acknowledges	that	it	is	responsible	for	the	 group’s	system	of	internal	control	and	for	reviewing	 its	effectiveness. 	Internal	controls	are	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. 	 The	process	of	identifying, 	evaluating	and	managing	 the	risks	faced	by	the	group	continues	through	the	 operation	of	a	group	risk	register	which	encompasses	 an	assessment	of	the	internal	controls	in	place	to	 mitigate	the	identified	risks	and	their	effectiveness. 		 This	analysis	is	reviewed	regularly	by	the	group’s	 senior	management	and	Board	of	Directors	and	 every	six	months	by	the	 Audit	Committee.
An	internal	audit	function	is	established	with	the	focus	 being	on	the	controls	and	procedures	within	the	retail	 broking	division. 	In	addition	monitoring	of	compliance	 with	FSA	requirements	for	both	owned	brokers	and	 independent	Members	is	given	a	high	priority.
16 Broker Network Holdings plc, Directors’ report and 
consolidated financial statements, 30 April 2007
The Board
There	were	no	changes	in	directors	in	the	year. 	 At	 30	 April	2007	the	Board	comprised	four	executive	 directors,	three	non-executive	directors	and	one	 non-executive	Chairman. 	 Two	of	the	non-executive	 members	of	the	Board	are	considered	by	the	 Board	to	be	independent	of	the	company	and	the	 group.		Each	non-executive	possesses	considerable	 outside	expertise	and	is	able	to	exercise	detached		 judgement	in	dealing	with	matters	before	the	Board. 		 The	Board	considers	that	the	current	composition	 provides	a	reasonable	level	of	independence.
The	Board, 	which	met	seven	times	during	the	year, 	 is	responsible	for	the	overall	strategy	and	financial	 performance	of	the	group	and	has	a	formal	schedule	 of	matters	required	for	approval. 	Each	Board	meeting	 is	preceded	by	a	clear	agenda	and	any	relevant	 information	is	provided	to	directors	in	advance	of	the	 meeting.
All	directors	are	required	to	submit	themselves	for	 re-election	at	an	 Annual	General	Meeting	if	they	 were	not	elected	or	re-elected	at	either	of	the	two	 preceding	 Annual	General	Meetings. 	 Therefore	 directors	appointed	during	the	period	are	required	to	 seek	re-election	at	the	first	 Annual	General	Meeting	 following	their	appointment.
Auditor independence 
In	order	to	safeguard	the	objectivity	and	 independence	of	the	company’s	external	auditors, 	 the	 Audit	Committee	keeps	under	review	the	nature	 and	 extent	 of	 any	 non-audit	 services	 supplied	 in	 order	 to	balance	the	maintenance	of	objectivity	and	value	 for	money.
Principal Board committees
The	Board	has	established	the	following	committees:
•	Remuneration	Committee. 	 The	Committee	currently	 comprises	P	Bates	and	M	Pendle	and	is	chaired	 by	F	Rahmatallah. 	 The	Remuneration	Committee	is	 responsible	for	reviewing	and	recommending	all	 the	elements	of	policy	on	the	Board’s	and	senior	 executives’	remuneration	and	for	approving	all	 matters	relating	to	the	remuneration	of	executive	 directors.	It	meets	formally	at	least	quarterly. 	 The	 Remuneration	Committee	report	on	pages	18	to	 22	contains	a	detailed	description	of	remuneration	 and	applicable	policies	 •	Audit	Committee. 	 The	committee	comprises	P	Bates	 and	M	Pendle	and	is	chaired	by	F	Rahmatallah. 		 The	 Audit	Committee	assists	the	Board	in	fulfilling	its	 oversight	responsibilities, 	primarily	in	reviewing	and	 reporting	financial	and	non-financial	information	 communicated	to	shareholders, 	systems	of	internal	 control	and	risk	management	and	the	audit	 process.	It	has	the	power	to	call	for	information	 from	management	and	to	consult	directly	with	 the	auditors	or	other	advisors	as	considered	 appropriate.	 The	Committee	operates	under	written	 terms	of	reference	and	is	scheduled	to	meet	at	 least	twice	a	year	with	the	group’s	auditors. 	 The	 committee	is	responsible	for	the	independent	 monitoring	of	the	effectiveness	of	the	systems	of	 internal	control, 	compliance, 	accounting	policies	 and	published	financial	statements	on	behalf	of	the	 Board.		 This	is	achieved	primarily	through	a	review	 of	the	annual	financial	statements	and	a	review	 of	the	nature	and	scope	of	the	external	audit. 	 Any	 significant	findings	or	identified	risks	are	examined	 so	that	appropriate	action	may	be	taken. 	 The	 Committee	is	also	responsible	for	keeping	under	 review	the	independence	and	objectivity	of	the	 external	auditors, 	including	a	review	of	non-audit	 services	provided	to	the	group, 	consideration	of	 any	relationships	with	the	group	that	could	affect	 independence	and	seeking	written	confirmation	 from	auditors	that, 	in	their	professional	judgement, 	 they	are	independent.
Relations with shareholders
The	group	encourages	the	participation	of	both	 institutional	and	private	investors. 	Communication	 with	private	individuals	is	maintained	through	the	 Annual	General	Meeting, 	annual	and	interim	reports, 	 investor	newsletters	and	press	releases. 		 17 Broker Network Holdings plc, Directors’ report and 
consolidated financial statements, 30 April 2007
Remuneration 
Committee Report
Introduction
The	following	report	provides	information	relating	 to	the	pay	and	benefits	policy	for	the	company’s	 directors.		 Members of the Remuneration Committee
Details	relating	to	the	remuneration	committee	can	 be	found	in	the	Corporate	Governance	section	of	the	 annual	report	on	pages	16	to	17. 	 The	committee	meets	during	the	year	to	determine	 all	aspects	of	the	remuneration	of	the	executive	 Directors.	 The	remuneration	of	the	non-executive	 Directors	is	determined	by	the	Board	as	a	whole.
Remuneration policy
The	committee	believes	remuneration	levels	should	 be	competitive	and	set	at	a	level	to	attract, 	retain	 and	motivate	executive	Directors. 	 The	group	makes	 contributions	to	Group	personal	pension	schemes	on	 behalf	of	executive	Directors.
Directors’ Interests
The	directors	who	held	office	at	the	end	of	the	 financial	year	had	the	following	interests	in	the	 ordinary	share	capital	of	group	companies	 according	to	the	register	of	directors’ 	interests.
18 Broker Network Holdings plc, Directors’ report and 
consolidated financial statements, 30 April 2007
EMI Share Options
On	18	December	2001	and	on	13	November	2003, 	 The	Broker	Network	Limited	granted	options	the	 majority	of	which	are	expected	to	qualify	for	relief	 under	the	Enterprise	Management	Incentive	Scheme	 under	the	Income	 Tax	(Earning	and	Pensions)	 Act	 2003,	to	JK	Hale	and	MG	Collins	respectively.
Approximately	1,000	of	MG	Collins’ 	options	were	 granted	under	an	unapproved	scheme	as	the	limits	 for	the	Enterprise	Management	Incentive	Scheme	 were	exceeded.
The	options	were	granted	under	individual	option	 agreements	and	the	option	agreements	were	in	 similar	form. 	 The	following	paragraphs	summarise	the	 key	provisions	of	the	original	option	agreements:
1.	 Option	price	and	amount
	 Each	option	is	in	respect	of	6,000	B	ordinary	shares	 of	£1	each	in	 The	Broker	Network	Limited	at	an		 option	price	of	£10	per	share	for	JK	Hale	and	£20	 per	share	for	MG	Collins, 	subject	to	adjustment	in	 the		event	of	any	subsequent	variation	of	share	 capital.
2.	 Exercise	of	Option	Period
	 Subject	to	the	terms	of	the	option	agreement, 	the	 options	may	be	exercised	on	the	occurrence	of	 an	event	as	outlined	in	section	3	within	a	period	 commencing	with	the	date	of	grant	and	ending	 on	the	10th	anniversary	of	the	date	of	grant.
3.	 Exercise	of	Options
	 The	option	may	be	exercised	on	a	sale	or	listing, 	or	 within	40	days	of	the	occurrence	of	a	disqualifying	 	 event,	or	on	a	change	of	control	of	grantor	 company,	or	within	three	months	of	ceasing	to	 hold	office	or	employment	with	a	Group	company	 where	termination	of	employment	occurs	as	a	 result	of	ill-health, 	injury, 	disability	or	redundancy	 within	the	meaning	of	the	Employment	Rights	 Act	1996, 	or	within	six	months	of	the	death	of	the	 option	holder.
4.	 Cessation	of	employment
	 If	 a	 participant	 ceases	 to	 be	 employed	 by	 a	 Group	 company,	the	options	will	lapse	unless	the	grantor	 company	in	its	absolute	discretion	determines	 otherwise.	If	the	cessation	occurs	as	a	result	of	 ill-health,	injury, 	disability	or	redundancy, 	the	option	 may	be	exercised	within	3	months	of	the	date	of	 cessation	and, 	if	not	so	exercised, 	these	will	lapse. 		 Where	cessation	of	employment	occurs	as	a	result	 of	the	death	of	the	option	holder, 	the	options	may	 be	exercised	within	6	months	of	the	date	of	death	 and,	if	not	so	exercised, 	will	lapse.
5.	 Change	of	control
	 In	the	event	of	a	change	in	control	of	 grantor	company	as	a	result	of	a	take-over	or	 reconstruction,	then	(as	an	alternative	to	the	 exercise	of	the	options)	participants	may, 	if	the	 acquiring	 company	 agrees,	 release	 their	 options	 in	 exchange	for	options	over	shares	in	the	acquiring	 company.
6.	 Variation	of	share	capital
	 In	the	event	of	a	variation	of	the	ordinary	share	 capital	of	 The	Broker	Network	Limited, 	the	option	 price	of	the	shares	under	option	and/or	the	 number	of	such	shares	may	be	adjusted	with	the	 confirmation	in	writing	of	the	auditors	(except	 in	the	case	of	a	capitalisation	issue)	that	such	 adjustment	is	fair	and	reasonable.
	 Company Class of share Interest at Interest at start of 
   year end year or date of 
    appointment
PG	Ellis	 Broker	Network	Holdings	plc	 Ordinary	 2,036,535	 2,036,535
P	Bates	 Broker	Network	Holdings	plc	 Ordinary	 1,273,800	 1,273,800
MG	Collins	 Broker	Network	Holdings	plc	 Ordinary	 500,000	 300,000
19 Broker Network Holdings plc, Directors’ report and 
consolidated financial statements, 30 April 2007
7.	 EMI	Relief
	 Provided	the	Enterprise	Management	Initiative	 Scheme	options	retain	their	qualifying	status, 	no	 income	tax	or	national	insurance	contributions	 will	arise	when	the	options	are	exercised. 	On	 the	exercise	of	the	unapproved	options	granted	 to	Michael	Collins, 	income	tax	and	national	 insurance	contributions	will	arise	upon	the	 difference	between	the	market	value	of	the	shares	 at	the	date	of	exercise	and	the	price	paid	for	 those	shares.
Adjustment	to	option	agreements
The	company	agreed	at	the	time	of	the	acquisition	of	 The	Broker	Network	Limited	to	exchange	the	options	 referred	to	above	for	options	over	ordinary	shares	 in	Broker	Network	Holdings	plc	on	similar	terms	and	 conditions.	 All	references	in	the	option	agreements	to	 “The	Broker	Network	Limited” 	now	include	references	 to	Broker	Network	Holdings	plc. 	 The	number	of	shares	 under	option	and	the	option	price	were	adjusted	to	 reflect	the	new	share	capital	following	the	company’s	 listing	on	 AIM.	Following	this	adjustment	JK	Hale	 and	MG	Collins	each	had	options	in	respect	of	 £300,000	Class	B	Ordinary	shares	at	option	prices	of	 20p	and	40p	respectively. 	 The	option	period	remains	 unchanged.
On	6	June	2006, 	the	company	received	notice	from	 MG	Collins	of	the	exercise	of	300,000	share	options	 at	the	exercise	price	of	40p	each. 	 As	part	of	the	 exercise	of	these	options, 	on	2	June	2006	MG	Collins	 sold	60,000	ordinary	shares	of	2p	each	at	150p	per	 ordinary	share.
Long Term Incentive Plan (LTIP)
Members	of	senior	management	are	entitled	to	 participate	each	year	in	a	LTIP	scheme	without	 payment.
The	benefits	consist	of	cash	incentive	rewards	in	 addition	to	the	right	to	buy	shares	in	Broker	Network	 Holdings	plc	at	nil	cost. 	 Vesting	is	subject	to	service	 conditions.	 The	year	ended	30	 April	2007	is	the	first	 year	in	which	share	options	have	been	granted	 under	the	LTIP . 	 Details	of	cash	incentive	rewards	as	part	of	the	LTIP	 are	provided	below. 	 Key	features	of	share	options	granted	in	the	year	are	 as	follows:
20 Broker Network Holdings plc, Directors’ report and 
consolidated financial statements, 30 April 2007
Grant date Expiring on Exercise price (£) Fair value at grant Number of options 
   (£) outstanding 2007
13.09.2006	 13.09.2009	 Nil	 1.82	 39,840
Details	of	share	options	granted	to	Directors	are	as	follows:
	 Options at start of year Options granted Options at end 
  in the period of year
Executive	Directors:
PG	Ellis	 -	 -	 -
JK	Hale	 -	 1,935	 1,935
MD	 Wood	 -	 13,825	 13,825
NF	Law	 -	 -	 -
Non-executive	directors:
P	Bates	 -	 -	 -
F	Rahmatallah	 -	 -	 -
MG	Collins	 -	 -	 -
M	Pendle	 -	 -	 -
Further	details	in	respect	of	the	share	options	are	provided	in	Note	15.
Total Directors’ pay and benefits in kind
Total	Directors’ 	pay	and	benefits	in	kind	in	the	period	(which	exclude	the	value	of	share	options	granted	in	the	 period).
	   Cash Gains on 
    Sub-total amounts exercise 
  Benefits in Directors received of share 2007 
 Salary/fees kind emoluments under LTIP options Total 
 £000 £000 £000 £000 £000 £000
Executive	Directors:
PG	Ellis	 130	 8	 138	 11	 -	 149
JK	Hale	 100	 10	 110	 1	 -	 111
MD	 Wood	 98	 -	 98	 9	 -	 107
NF	Law	 74	 -	 74	 -	 -	 74
Non-executive	directors:
P	Bates	 10	 -	 10	 -	 -	 10
F	Rahmatallah	 45	 -	 45	 -	 -	 45
MG	Collins	 30	 5	 35	 -	 330	 365
M	Pendle	 20	 -	 20	 -	 -	 20
21 Broker Network Holdings plc, Directors’ report and 
consolidated financial statements, 30 April 2007
Pensions
The	following	directors	have	received	contributions	to	Group	personal	pension	schemes	in	the	period:
	 Contibutions paid or Amount of company 
 payable in the period contribution accrued/ 
 by the company (prepaid) at year end 
 2007 2007 
 £000 £000
PG	Ellis	 6	 -
JK	Hale	 5	 -
MD	 Wood	 2	 -
Directors’ contracts
Details	of	service	agreements	in	place	for	the	current	directors	are	as	follows:
	 Date of contract Term Notice period
PG	Ellis	 1	March	2004	 Continuous	subject	to	the	notice	period	 12	months
JK	Hale	 1	March	2004	 Continuous	subject	to	the	notice	period	 6	months
MD	 Wood	 1	November	2004	 Continuous	subject	to	the	notice	period	 6	months
NF	Law	 3	October	2005	 Continuous	subject	to	the	notice	period	 6	months
P	Bates	 17	May	2006	 3	years	 -
F	Rahmatallah	 18	March	2007	 3	years	 -
M	Pendle	 18	March	2007	 3	years	 -
MG	Collins	 13	September	2006	 3	years	 -
22 Broker Network Holdings plc, Directors’ report and 
consolidated financial statements, 30 April 2007
Statement of directors’ 
responsibilities in 
respect of the annual 
report and the 
financial statements
The	directors	are	responsible	for	preparing	the	 Annual	 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. 	Under	 that	law	they	have	elected	to	prepare	the	group	and	 parent	company	financial	statements	in	accordance	 with	UK	 Accounting	Standards	and	applicable	law	 (UK	Generally	 Accepted	 Accounting	Practice).
The	group	and	parent	company	financial	statements	 are	required	by	law	to	give	a	true	and	fair	view	of	the	 state	of	affairs	of	the	group	and	the	parent	company	 and	of	the	profit	or	loss	for	that	period.
In	preparing	these	financial	statements, 	the	directors	 are	required	to:
•	 select	suitable	accounting	policies	and	then	 apply	them	consistently;
•	 make	judgments	and	estimates	that	are	 reasonable	and	prudent;
•	 state	whether	applicable	UK	accounting	 standards	have	been	followed, 	subject	to	any	 material	departures	disclosed	and	explained	in	 the	financial	statements; 	 •	 prepare	the	financial	statements	on	the	going	 concern	basis	unless	it	is	inappropriate	to	presume	 that	the	group	and	the	parent	company	will	 continue	in	business.
The	directors	are	responsible	for	keeping	proper	 accounting	records	that	disclose	with	reasonable	 accuracy	at	any	time	the	financial	position	of	the	 parent	company	and	enable	them	to	ensure	that	its	 financial	statements	comply	with	the	Companies	 Act	 1985.	 They	have	general	responsibility	for	taking	such	 steps	as	are	reasonably	open	to	them	to	safeguard	 the	assets	of	the	group	and	to	prevent	and	detect	 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	UK	governing	the	preparation	and	 dissemination	of	financial	statements	may	differ	from	 legislation	in	other	jurisdictions.
.
23 Broker Network Holdings plc, Directors’ report and 
consolidated financial statements, 30 April 2007
Independent auditors’ 
report to the members 
of Broker Network 
Holdings Plc 
We	have	audited	the	group	and	parent	company	 financial	statements	(the	 ‘’financial	statements’ ’)	 of	Broker	Network	Holdings	Plc	for	the	year	ended	 30	 April	2007	which	comprise	the	Consolidated	 Profit	and	Loss	 Account,	the	Consolidated	and	 Company	Balance	Sheets, 	the	Consolidated	 Cash	Flow	Statement	and	the	related	notes. 	 These	 financial	statements	have	been	prepared	under	the	 accounting	policies	set	out	therein.
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	auditor’s	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	financial	statements	in	accordance	 with	applicable	law	and	UK	 Accounting	Standards	 (UK	Generally	 Accepted	 Accounting	Practice)	are	set	 out	in	the	Statement	of	Directors’ 	Responsibilities	on	 page	23.
Our	responsibility	is	to	audit	the	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	 financial	statements	give	a	true	and	fair	view	and	 are	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	financial	statements. 	 The	 information	given	in	the	Directors’ 	Report	includes	that	 specific	information	presented	in	the	Chief	Executive’s	 Review	and	Finance	Director’s	Review	that	is	cross	 referenced	from	the	Business	Review	section	of	the	 Directors’	Report. 	 24 Broker Network Holdings plc, Directors’ report and 
consolidated financial statements, 30 April 2007
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	and	consider	whether	it	is	consistent	 with	 the	 audited	 financial	 statements.	 We	 consider	 the	 implications	for	our	report	if	we	become	aware	of	any	 apparent	misstatements	or	material	inconsistencies	 with	the	financial	statements. 	Our	responsibilities	do	 not	extend	to	any	other	information
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	 financial	statements.	It	also	includes	an	assessment	 of	the	significant	estimates	and	judgments	made	 by	the	directors	in	the	preparation	of	the	financial	 statements,	and	of	whether	the	accounting	policies	 are	appropriate	to	the	group’s	and	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	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	financial	statements.
Opinion
In	our	opinion:
•	 the	financial	statements	give	a	true	and	fair	 view,	in	accordance	with	UK	Generally	 Accepted	 Accounting	Practice, 	of	the	state	of	the	group’s	 and	the	parent	company’s	affairs	as	at	30	 April	 2007	and	of	the	group’s	profit	for	the	year	then	 ended;
•	 the	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	financial	statements
KPMG	 Audit	Plc	 12	September	2007 	 Chartered	 Accountants	 Registered	 Auditor.
25 Broker Network Holdings plc, Directors’ report and 
consolidated financial statements, 30 April 2007
Consolidated profit 
and loss account
for the year ended 30 April 2007 
	 	 	 Acquisitions Total	 Total	 	 Note 2007 2007 2007 2006	  £000 £000 £000 £000
Gross commission
receivable (unaudited)	 	 55,734 - 55,734	 45,185	 Turnover	 2	 16,544 6,716 23,260	 12,535
Administrative	expenses	 	 (12,586) (5,524)	 (18,110)	 (10,447)	 Operating profit	 2,3	 3,958 1,192 5,150	 2,088
Net	interest	(payable)	/	receivable	 4	 	 	 (336)	 317		 Profit on ordinary activities before taxation	 	 	 	 4,814	 2,405
Tax	on	profit	on	ordinary	activities	 7	 	 	 (1,628)	 (800)		 Profit after tax	 	 	 	 3,186	 1,605
Minority interests		 23	 	 	 -	 (13)			 Profit for the financial period	 16	 	 	 3,186	 1,592	 Earnings per share
- basic	 24	 	 	 20.74p	 10.56p
- diluted		 24	 	 	 20.33p	 10.27p	 All	of	the	activities	during	the	current	and	preceding	years	relate	to	continuing	operations	of	the	group.
The	group	has	no	recognised	gains	or	losses	other	than	the	results	above	and, 	therefore, 	no	separate	 statement	of	total	recognised	gains	and	losses	has	been	presented.
There	is	no	difference	between	the	profit	on	ordinary	activities	before	taxation	and	the	profit	retained	for	the	 financial	year	stated	above, 	and	their	historical	cost	equivalents.
26 Broker Network Holdings plc, Directors’ report and 
consolidated financial statements, 30 April 2007
Consolidated 
balance sheet
at 30 April 2007 
	 	 Note  2007 2006	    £000 £000
Fixed assets
Intangible	assets	 	 8	 	 18,840	 5,659
Tangible	assets	 	 9	 	 1,190	 558		 	 	 	 	 20,030	 6,217
Current assets
Debtors	 	 11	 	 22,926	 13,399
Insurance	broking	account	 	 	 	 12,078	 9,513
Cash	at	bank	and	in	hand	 	 	 	 2,801	 1,943		 	 	 	 	 37,805	 24,855
Creditors: amounts falling due within one year	 12	 	 (34,752)	 (22,848)
Net current assets	 	 	 	 3,053	 2,007	 Total assets less current liabilities	 	 	 	 23,083	 8,224
Creditors: amounts falling due after 
more than one year	 	 13	 	 (13,414)	 (1,809)
Provision for liabilities and charges	 	 14	 	 (88)	 (19)	 Net assets	 	 	 	 9,581	 6,396
Capital and reserves
Called	up	share	capital	 	 15	 	 308	 301
Share	premium	account	 	 16	 	 2,274	 2,095
Capital	reserve	 	 16	 	 454	 454
Profit	and	loss	account	 	 16	 	 6,545	 3,546		 Shareholders’	funds	 	 	 	 9,581	 6,396	 These	financial	statements	were	approved	by	the	board	of	directors	on	12	September	2007	and	were	signed	 on	its	behalf	by:
JK	Hale, 	Director.
27 Broker Network Holdings plc, Directors’ report and 
consolidated financial statements, 30 April 2007
Company 
balance sheet
at 30 April 2007
	 	 Note  2007 2006	    £000 £000
Fixed assets
Investments		 	 10	 	 4,257	 1,656	 	 	 	 	 4,257	 1,656		 Current assets
Debtors	 	 11	 	 12,295	 4,959
Cash	at	bank	and	in	hand	 	 	 	 91	 495	 	 	 	 	 12,386	 5,454
Creditors: amounts falling due within one year	 12	 	 (6,295)	 (2,759)
Net current assets	 	 	 	 6,091	 2,695	 Total assets less current liabilities	 	 	 	 10,348	 4,351
Creditors: amounts falling due after more 
than one year	 	 13	 	 (6,451)	 (1,054)		 Net assets	 	 	 	 3,897	 3,297
Capital and reserves
Called	up	share	capital	 	 15	 	 308	 301
Share	premium	account	 	 16	 	 2,274	 2,095
Profit	and	loss	account	 	 16	 	 1,315	 901	 Shareholders’ funds	 	 	 	 3,897	 3,297
These	financial	statements	were	approved	by	the	board	of	directors	on	12	September	2007	and	were	signed	 on	its	behalf	by:
JK	Hale, 	Director.
28 Broker Network Holdings plc, Directors’ report and 
consolidated financial statements, 30 April 2007
Consolidated cash 
flow statement
for the year ended 30 April 2007
	 	 Note  2007 2006	    £000 £000
Net cash inflow from operating activities	 	 20	 	 4,667	 3,000		 Returns on investment and servicing of finance
Interest	received	 	 	 	 789	 371
Interest	paid	 	 	 	 (1,125)	 (54)	 Net cash (outflow)/ inflow from returns on 
investment and servicing of finance	 	 	 	 (336)	 317
Capital expenditure and investment
Purchase	of	tangible	fixed	assets	 	 	 	 (904)	 (241)	 Net cash outflow from capital expenditure
and investment	 	 	 	 (904)	 (241)
Acquisitions and disposals
Purchase	of	subsidiary	undertakings	and
broker	businesses	 	 21	 	 (12,482)	 (2,590)
Deferred	consideration	paid	in	the	year		 	 	 	 (1,162)	 (1,496)		 Net cash outflow from acquisitions and disposals	 	 	 (13,644)	 (4,086)
Corporation tax paid	 	 	 	 (1,233)	 (409)
Financing
Increase	in	bank	loans	 	 	 	 13,026	 1,054
Bank	loan	repayments	 	 	 	 (750)	 -
Issue	of	ordinary	share	capital	 	 	 	 186	 -
Cash inflow from  financing	 	 	 	 12,462	 1,054
Dividend	paid	 	 	 	 (154)	 -	 Increase/(decrease) in net cash	 	 22	 	 858	 (365)
29 Broker Network Holdings plc, Directors’ report and 
consolidated financial statements, 30 April 2007
Reconciliation of 
net cash flow to 
movement in net 
(debt) / funds
for the year ended 30 April 2007
	 	 Note  2007 2006	    £000 £000
Increase/(decrease) in cash in the year    858	 (365)
Cash	inflow	from	increase	in	debt	 	 	 	 (12,276)	 (1,054)	 Movement in net funds in the year	 	 	 	 (11,418)	 (1,419)
Net	funds	at	start	of	period	 	 	 	 889	 2,308		 Net (debt) / funds at end of year	 	 22	 	 (10,529) 	 889		 30 Broker Network Holdings plc, Directors’ report and 
consolidated financial statements, 30 April 2007
Notes
(forming part of the financial statements)
1. Accounting policies
Basis	of	accounting
The	financial	statements	have	been	prepared	in	 accordance	with	the	historical	cost	convention	and	 in	 accordance	 with	 applicable	 accounting	 standards	 in	the	United	Kingdom. 		 The	following	accounting	policies	have	been	 applied	consistently	in	dealing	with	items	which	 are	considered	material	in	relation	to	the	financial	 statements,	except	as	noted	below.
In	these	financial	statements	the	following	new	 standards	have	been	adopted	for	the	first	time:
•	 FRS	20	 ‘Share	based	payments’
The	Company	has	adopted	FRS	20	 ‘Share	based	 payments’	with	effect	from	1	May	2006. 	Due	to	the	 timing	of	the	grant	of	share	options	the	adoption	of	 FRS	20	has	no	prior	year	adjustment.
Basis	of	consolidation
The	group	financial	statements	include	the	financial	 statements	of	the	company	and	its	subsidiary	 undertakings	made	up	to	30	 April	2007. 	 All	financial	 statements	are	prepared	on	a	uniform	basis	 throughout	the	group.
The	acquisition	method	of	accounting	has	been	 adopted,	unless	otherwise	stated. 	Merger	accounting	 has	been	adopted	in	relation	to	the	creation	of	a	 new	holding	company	in	2004. 	Under	the	acquisition	 method	of	accounting, 	the	results	of	subsidiary	 undertakings	acquired	and	disposed	of	in	the	year	 are	included	in	the	consolidated	profit	and	loss	 account	from	the	date	of	acquisition	or	up	to	the	 date	of	disposal.
Turnover
Turnover	represents	commissions	received	on	the	 arrangement	of	the	settlement	of	insurance	policies	 and	levies	made	on	satellite	operatives. 	 Turnover	is	 recognised	when	it	falls	due.
Interest	income	on	cash	flows	arising	from	insurance	 broking	debtors	and	creditors	is	recognised	as	 earned.
31 Broker Network Holdings plc, Directors’ report and 
consolidated financial statements, 30 April 2007
Insurance	transactions
Insurance	transactions	arise	from	the	settlement	of	 transactions	with	insurance	companies	on	behalf	of	 satellite	 insurance	 intermediaries	 who	 are	 members	 of	 the	network. 	 A	debtor	balance	representing	amounts	 owing	from	individual	customers	is	recognised	when	 the	member	arranges	a	policy, 	along	with	a	creditor	 balance	representing	amounts	due	to	the	ultimate	 insurance	provider	and	commissions	earned	by	the	 intermediary	and	the	Broker	Network. 		 Insurance	broking	debtors	and	creditors	are	reported	 in	accordance	with	the	requirements	of	Financial	 Reporting	Standard	5, 	 ‘Reporting	the	Substance	of	 Transactions’.	 The	standard	precludes	assets	and	 liabilities	being	offset	unless	net	settlement	is	legally	 enforceable	and	as	a	result	the	insurance	broking	 debtors	and	creditors	have	been	shown	as	the	 gross	amounts	due	in	respect	of	each	contract, 	 instead	of	the	net	amount	due	to	or	from	clients	and	 underwriters.
Interest	income
Interest	income	on	cash	flows	arising	from	insurance	 broking	debtors	and	creditors	is	recognised	as	 earned.
Goodwill	and	negative	goodwill
Purchased	goodwill	(representing	the	excess	of	 the	fair	value	of	the	consideration	given	over	the	 fair	value	of	the	separable	net	assets	acquired)	 arising	on	consolidation	and	business	combinations	 in	respect	of	acquisitions	since	1	January	1998	is	 capitalised.	Positive	goodwill	is	amortised	to	nil	by	 equal	annual	instalments	over	its	estimated	useful	life.
On	the	subsequent	disposal	or	termination	of	a	 business	acquired	since	January	1998, 	the	profit	or	 loss	on	disposal	or	termination	is	calculated	after	 charging	(crediting)	the	unamortised	amount	of	any	 related	goodwill	(negative	goodwill).
Fixed	asset	investments
Fixed	asset	investments	are	stated	at	cost	less	 provisions	for	impairment. 	 A	provision	for	impairment	 is	made	to	the	extent	that, 	in	the	directors’ 	view, 	the	 carrying	amount	exceeds	the	recoverable	amount	of	 the	fixed	asset	investment.
Fixed	assets
Tangible	fixed	assets	are	stated	at	cost.
Depreciation	is	provided	at	rates	calculated	to	write	 off	the	cost	less	estimated	residual	value	of	each	 asset	over	its	expected	useful	life, 	as	follows:
Office	equipment	 15%	-	20%	straight	line
Motor	vehicles	 	 25%	straight	line
Computer	equipment	 25%	straight	line
Taxation
The	charge	for	taxation	is	based	on	the	profit	for	the	 period	and	takes	into	account	taxation	deferred	 because	of	timing	differences	between	the	treatment	 of	certain	items	for	taxation	and	accounting	 purposes.		 Deferred	tax	is	recognised, 	without	discounting, 	 in	respect	of	all	timing	differences	between	 the	treatment	of	certain	items	for	taxation	and	 accounting	purposes	which	have	arisen	but	not	 reversed	by	the	balance	sheet	date, 	except	as	 otherwise	required	by	FRS	19.
Leasing
Assets	acquired	under	finance	leases	are	capitalised	 and	the	outstanding	future	lease	obligations	are	 shown	in	creditors. 	Operating	lease	rentals	are	 charged	to	the	profit	and	loss	account	on	a	straight	 line	basis	over	the	period	of	the	lease.
32 Broker Network Holdings plc, Directors’ report and 
consolidated financial statements, 30 April 2007
Pension	arrangements
The	company	operates	a	group	personal	pension	 plan,	a	defined	contribution	scheme. 		 The	pension	 cost	is	the	amount	of	contributions	payable	in	 respect	of	the	accounting	period. 		 The	company	 provides	no	further	post	retirement	benefits	to	its	 employees.
Cash	and	liquid	resources
Cash,	for	the	purpose	of	the	cash	flow	statement, 	 comprises	cash	in	hand	and	deposits	repayable	 on	demand, 	less	overdrafts	payable	on	demand. 		 Liquid	resources	are	current	asset	investments	which	 are	disposable	without	curtailing	or	disrupting	the	 business	and	are	either	readily	convertible	into	known	 amounts	of	cash	at	or	close	to	their	carrying	values	 or	traded	in	an	active	market.
Share	based	payments
Charges	for	employee	services	received	in	exchange	 for	share	based	payment	are	made	for	all	awards/
options	granted	after	7	November	2002	not	vested	 at	1	May	2006	to	spread	the	fair	value	of	the	grant	 over	the	vesting	period. 	 The	fair	value	of	options	has	 been	calculated	using	the	Black	Scholes	pricing	 methodology.	 33 Broker Network Holdings plc, Directors’ report and 
consolidated financial statements, 30 April 2007
2. Segmental information
All	of	the	group’s	operations	are	based	in	the	UK. 		 The	table	below	sets	out	information	for	each	of	the	group’s	 industry	segments. 			 	 2007 2006 2007 2006 2007 2006	 £000 £000 £000 £000 £000 £000
Turnover	 	 	 	 	 	 Total	sales	 10,926	 7,592	 12,826	 5,265	 23,752	 12,857
Inter-segment	sales	 (492)	 (322)	 -	 -	 (492)	 (322)	 Sales	to	third	parties	 10,434	 7,270	 12,826	 5,265	 23,260	 12,535
Operating profit before
goodwill amortisation  4,737	 2,495	 2,130	 448	 6,867	 2,943
Goodwill	amortisation		 -	 -	 (1,717)	 (855)	 (1,717)	 (855)	 Operating profit/(loss)	 4,737	 2,495	 413	 (407)	 5,150	 2,088
Net	interest	 (97)	 291	 (239)	 26	 (336)	 317			 Profit/(loss) before taxation	 4,640	 2,786	 174	 (381)	 4,814	 2,405
Segmental net assets	 11,555	 6,156	 (1,974)	 240	 9,581	 6,396			 Network Services and Retail Insurance Broking Total Total	 Wholesale Insurance 
 Broking
3. Operating	 profit
	 	  2007 2006	    £000 £000
Operating profit is stated after charging/(crediting):
Fees	payable	to	the	Company’s	 Auditors	for	the	 audit	of	the	Company’s	financial	statements		 	 	 13	 12
Fees	payable	to	the	Company’s	 Auditors	for	other	services:	 	 		-	the	audit	of	subsidiary	financial	statements	pursuant	to	legislation	 	 40	 27
		-	taxation	services	 	 	 	 5	 5
		-	other		services	 	 	 	 4	 30
Amortisation	of	goodwill	 	 	 	 1,717	 855
Depreciation	-	owned	fixed	assets	 	 	 	 336	 211
34 Broker Network Holdings plc, Directors’ report and 
consolidated financial statements, 30 April 2007
4. Net interest (payable) / receivable
	 	  2007 2006	    £000 £000
Interest	received	 	 	 	 789	 371
Bank	loan	interest	paid	 	 	 	 (1,125)	 (54)
	 	 	 	 (336)	 317
5. Employee information
	 	  2007 2006	    £000 £000
Wages	and	salaries	 	 	 	 8,944	 5,213
Social	security	costs	 	 	 	 898	 510
Pension	costs		 	 	 	 309	 120
	 	 	 	 10,151	 5,843
The	group	had	an	average	of	364	(2006: 	229)	employees	during	the	year	who	are	all	employed	within	the	following	 divisions:
	 	 	 																												 No of Employees
	 	 	 	 2007	 2006
Network	Services	 	 	 	 124	 99
Insurance	Broking	 	 	 	 240	 130
	 	 	 	 364	 229
35 Broker Network Holdings plc, Directors’ report and 
consolidated financial statements, 30 April 2007
6. Directors’ emoluments
	 	  2007 2006	    £000 £000
Aggregate	emoluments	 	 	 	 530	 412
Pension	contributions	 	 	 	 13	 11
	 	 	 	 543	 423
The	group	made	contributions	to	a	defined	contribution	pension	scheme	in	respect	of	three	(2006: 	two)	directors.
Aggregate	emoluments	and	benefits	include	amounts	paid	to	the	highest	paid	director, 	as	follows:
	 	 	 	 2007	 2006	 	 	 	 	 £000	 £000
Aggregate	emoluments	 	 	 	 138	 120
Pension	contributions	 	 	 	 6	 6
7. Tax on profit on ordinary activities
a.	 Analysis	of	charge	in	period
	 	  2007 2006	    £000 £000
Corporation	tax	–	current	year			 	 	 	 1,563	 798
Corporation	tax	–	prior	years	 	 	 	 3	 7
Deferred	tax			 	 	 	 62	 (5)	 	 	 	 	 1,628	 800
36 Broker Network Holdings plc, Directors’ report and 
consolidated financial statements, 30 April 2007
b.	 Factors	affecting	tax	charge	for	period
The	tax	assessed	for	the	year	is	higher	(2006: 	higher)	than	the	standard	rate	of	corporation	tax	in	the	UK	(30%; 	 2006:	30%). 		 The	differences	are	explained	below:
	 	  2007 2006	    £000 £000
Profit	on	ordinary	activities	before	tax	 	 	 	 4,814	 2,405
Profit	on	ordinary	activities	multiplied	by	standard	rate	of 	 corporation	tax	–	30%	(2006: 	30%)	 	 	 	 1,444	 722
Effects	of:	 	 Expenses	not	deductible	for	tax	purposes	 	 	 	 164	 71
Capital	allowances	for	the	year	(in	excess	of)/less	than	depreciation	 	 (45)	 5
Current	tax	charge	for	the	year	 	 	 	 1,563	 798
8. Intangible fixed assets
Group	 	   Goodwill 
     £000
Cost			 	 	 	 	 At	1	May	2006	 	 	 	 	 7,026
Acquisitions	 	 	 	 	 15,230
Adjustments	due	to	re-evaluation	of	deferred	consideration	 	 	 	 (332)		 At 30 April 2007	 	 	 	 	 21,924	 Amortisation	 	 	 	 	 	 At	1	May	2006	 	 	 	 	 1,367
Charged	in	the	year		 	 	 	 	 1,717		 At 30 April 2007	 	 	 	 	 3,084		 Net	book	value 	 	 	 	 	 At 30 April 2007	 	 	 	 	 18,840	 At	30	 April	2006	 	 	 	 	 5,659
37 Broker Network Holdings plc, Directors’ report and 
consolidated financial statements, 30 April 2007
9. Tangible fixed assets			 Group	 Office Computer Motor 
 equipment equipment vehicles Total 
 £000 £000 £000 £000
Cost		 	 	 	 	 At	1	May	2006	 277	 1,204	 49	 1,530
Additions	 421	 498	 -	 919
Acquisitions		 13	 41	 12	 66
Disposals	 (18)	 -	 (52)	 (70)
At 30 April 2007	 770	 1,778	 43	 2,591
Accumulated	depreciation
At	1	May	2006	 183	 759	 30	 972
Charge	for	year	 65	 258	 13	 336
Disposals	 (14)	 -	 (39)	 (53)
At 30 April 2007	 234	 1,017	 4	 1,255
Net	book	value
At 30 April 2007	 459	 726	 5	 1,190
At	30	 April	2006	 94	 445	 19	 558
38 Broker Network Holdings plc, Directors’ report and 
consolidated financial statements, 30 April 2007
10. Fixed asset investments
Group
The	undertakings	in	which	the	group’s	interest	at	the	year	end	is	more	than	20%	are	as	follows: 	 	 Country of Principal 
 incorporation activity 
   Group Company
Subsidiary	undertakings 	 	 	 	 Broker	Network	Limited	 United	Kingdom	 Insurance	 100	 100
Broker	Network	Insurance	Brokers	Limited		 United	Kingdom	 Insurance	broking	 100	 100
London	Broking	Services	Limited	 United	Kingdom	 Wholesale	Insurance	Broking	 100	 100
Donaldson	Meigh	Limited	 United	Kingdom	 Non	trading	 100	 -
Sharples	and	Co. 		Limited		 United	Kingdom		 Non	trading	 100	 -
Broker	Network	(Trustee)	Limited	 United	Kingdom	 Non	trading	 100	 100
Redbox	Systems	Limited	 United	Kingdom	 Non	trading	 100	 -
Townfrost	Limited	 United	Kingdom	 Holding	company	 75	 75
Fraser	 Tennant	Holdings	Limited	 United	Kingdom	 Holding	company	 100	 -
Fraser	 Tennant	Limited	 United	Kingdom	 Non	trading	 100	 -
Peacock	Robertson	Limited	 United	Kingdom	 Non	trading	 100	 -
Denny	Insurance	Services	Limited	 United	Kingdom	 Non	trading	 100	 -
TL	Risk	Solutions	Limited	 United	Kingdom	 Insurance	Broking	 75	 -
Adam	and	Gaskell	Limited	 United	Kingdom	 Non	trading	 100	 -
Company – investments in subsidiary undertakings	 	 	 	 2007 
	 	 	 	 £000
Cost	 	 At	1	May	2006	 	 	 	 1,656
Additions	 	 	 	 2,601
At 30 April 2007	 	 	 	 4,257
Percentage 
of shares held
11. Debtors
	 Group Group Company Company	 2007 2006 2007 2006	 £000 £000 £000 £000
Trade	debtors	 180	 145	 -	 -
Prepayments	and	accrued	income	 789	 464	 20	 66
Other	debtors	 6,285	 2,492	 2	 21
Amounts	owed	by	group	undertakings	 -	 -	 12,273	 4,872
In	relation	to	insurance	transactions	 15,672	 10,298	 -	 -		 	 22,926	 13,399	 12,295	 4,959
39 Broker Network Holdings plc, Directors’ report and 
consolidated financial statements, 30 April 2007
12. Creditors: amounts falling due within one year
	 Group Group Company Company	 2007 2006 2007 2006	 £000 £000 £000 £000
Trade	creditors	 967	 414	 15	 55
Taxation	and	social	security	 294	 196	 -	 -
Other	creditors	 948	 117	 -	 25
Accruals	 1,062	 426	 186	 94
Corporation	tax	 837	 490	 -	 18
In	relation	to	insurance	transactions	 27,750	 19,811	 -	 -
Deferred	consideration		 619	 1,394	 -	 -
Bank	loan	 2,275	 -	 1,225	 -
Amounts	owed	to	group	undertakings		 -	 -	 4,869	 2,567
	 34,752	 22,848	 6,295	 2,759
13. Creditors: amounts falling due after more than one year
	 Group Group Company Company	 2007 2006 2007 2006	 £000 £000 £000 £000
Deferred	consideration		 2,359	 755	 -	 -
Bank	loan	 11,055	 1,054	 6,451	 1,054	 	 13,414	 1,809	 6,451	 1,054
Bank	loans	due	after	more	than	one	year	are	repayable	in	between	two	and	five	years. 	 14. Provision for liabilities and charges
	  Group Company	   £000 £000
Deferred	tax	liability
	 	 At	1	May	2006	 	 	 19	 -
Charged	to	profit	and	loss	account	 	 	 69	 -	 At	30	 April	2007	 	 	 88	 -
40 Broker Network Holdings plc, Directors’ report and 
consolidated financial statements, 30 April 2007
15. Called up share capital
	 2007 2007 2006 2006	 Number £000 Number £000
Authorised
Ordinary	shares	of	2p	each	 22,650,000	 453	 22,650,000	 453
	 2007 2007	 2006	 2006
	 Number £000	 Number	 £000
Allotted,	called	up	and	fully	paid
Ordinary	shares	of	2p	each	 15,404,224	 308	 15,064,906	 301
Long	 Term	Incentive	Plan	(LTIP)
Members	of	senior	management	are	entitled	to	participate	each	year	in	an	LTIP	scheme	without	payment.
The	benefits	consist	of	cash	incentive	rewards	in	addition	to	the	right	to	buy	shares	in	Broker	Network	Holdings	 plc	at	nil	cost. 	 Vesting	is	subject	to	service	conditions. 		 The	year	ended	30	 April	2007	is	the	first	year	in	which	 share	options	have	been	granted	under	the	LTIP . 		 	  2007	   Number	of	options
Outstanding at 1 May 2006		 	 	 	 -
New	rights	granted	 	 	 	 39,840
Rights	exercised		 	 	 	 -
Right	forfeited		 	 	 	 -
Rights	expired		 	 										 	 	-		 Outstanding at 30 April 2007	 	 	 	 39,840
Of	which	vested	and	exercisable	at	30	 April	2007	 	 	 	 Nil
Additional	options	vesting	in	year	ended	30	 April	2008	 	 	 	 13,280
41 Broker Network Holdings plc, Directors’ report and 
consolidated financial statements, 30 April 2007
Grant date Expiring on Exercise price  Fair value at grant Number of options 
  £  £ outstanding 2007
14.09.2006	 14.09.2009	 Nil	 	 1.82	 39,840
Option	features:
The	options	have	been	valued	using	the	Black	Scholes	option	pricing	methodology. 	 As	a	result	of	the	options	 being	 exercisable	 at	 nil	 cost	 and	 the	 underlying	 level	 of	 dividend	 yield	 the	 fair	 value	 of	 these	 options	 under	 this	 methodology	corresponds	to	the	market	price	at	grant	date. 	 The	options	have	been	treated	as	equity	settled	 share	based	payments.
The	charge	to	the	profit	and	loss	account	for	share	based	payments	in	the	year	ended	30	 April	2007	was	 £45,000.
Other	share	options			 On	18	December	2001, 	JK	Hale	was	granted	an	option	to	subscribe	for	6,000	shares	at	£10	per	share. 	 The	 option	commenced	on	17	 April	2001. 	Following	a	share	split	in	 April	2004	the	options	were	amended	to	options	 to	subscribe	for	300,000	shares	at	20p. 	 The	options	are	exercisable	as	follows:
Period after commencement date No. of shares that may be exercised
Less	than	12	months	 Nil
More	than	12	months	but	less	than	24	months	 100,000
More	than	24	months	but	less	than	36	months	 200,000
No	options	were	exercised	during	the	period.
On	13	November	2003, 	MG	Collins	was	granted	an	option	to	subscribe	for	6,000	shares	at	£20	per	share. 	 The	 option	commenced	on	1	 August	2002. 	Following	a	share	split	in	 April	2004	the	options	were	amended	to	 options	to	subscribe	for	300,000	shares	at	40p. 	 The	options	were	exercisable	as	follows:
Period after commencement date No. of shares that may be exercised
Less	than	12	months	 Nil
More	than	12	months	but	less	than	24	months	 100,000
More	than	24	months	but	less	than	36	months	 200,000
On	6	June	2006, 	the	company	received	notice	from	MG	Collins	of	the	exercise	of	300,000	share	options	at	the	 exercise	price	of	40p	each. 		 The	options	issued	to	MG	Collins	and	JK	Hale	fall	outside	the	scope	of	the	measurement	and	recognition	 requirements	of	FRS	20	as	a	result	of	their	grant	date	and	vesting	period.
42 Broker Network Holdings plc, Directors’ report and 
consolidated financial statements, 30 April 2007
16. Reserves
	 Share  Profit Share Profit 
 premium Capital and loss premium and loss 
 account reserve account account account 
 £000 £000 £000 £000 £000
At	1	May	2006	 2,095	 454	 3,546	 2,095	 901
Dividends	received	 -	 -	 -	 -	 1,027
Dividends	paid	 -	 -	 (154)	 -	 (154)
Share	based	payment	credit	 -	 -	 45	 -	 45
Acquisition	of	own	shares	through 	 an	EBT	 -	 -	 (78)	 -	 -
Share	capital	issued	 179	 -	 -	 179	 -
Retained	profit	/(loss)	for	the 	 financial	year		 -	 -	 3,186	 -	 (504)
At	30	 April	2007	 2,274	 454	 6,545	 2,274	 1,315		 On	22	March	2004	Broker	Network	Holdings	plc	(“the	company”)	acquired	 The	Broker	Network	Limited	in	 a	share	for	share	exchange. 	 The	restructuring	was	accounted	for	as	a	capital	reorganisation	and	merger	 accounting	principles	applied	as	if	the	company	had	always	been	the	holding	company	of	the	group.
Under	merger	accounting	principles, 	the	share	capital	and	share	premium	of	 The	Broker	Network	Limited	have	 been	eliminated	on	consolidation. 	 The	difference	between	the	aggregate	nominal	value	of	the	new	ordinary	 shares	issued	by	the	company	and	the	called	up	share	capital	and	share	premium	of	 The	Broker	Network	 Limited	of	£454,322	was	transferred	to	a	capital	reserve
17. Reconciliation of movements in shareholders’ funds
	  Group Company 
   £000 £000
Opening	shareholders’ 	funds	 	 	 6,396	 3,297
Share	capital	issued	 	 	 7	 7
Premium	on	share	capital	issued	 	 	 179	 179
Dividends	received	 	 	 -	 1,027
Dividends	paid	 	 	 (154)	 (154)
Share	based	payment	credit	 	 	 45	 45
Acquisition	of	own	shares	through	an	EBT	 	 	 (78)	 -
Retained	profit/(loss)	for	the	financial	year	 	 	 3,186	 (504)		 Closing shareholders’ funds	 	 	 9,581	 3,897		 Group Company
43 Broker Network Holdings plc, Directors’ report and 
consolidated financial statements, 30 April 2007
18. Pensions
The	pension	charge	for	the	year	represents	contributions	payable	to	the	group	personal	pension	plan. 	 The	 pension	charge	for	the	year	ending	30	 April	2007	amounted	to	£308,962	(2006: 	£120,134). 	No	amounts	were	 owing	by	or	to	the	group	at	the	accounting	period	end, 	nor	at	the	end	of	the	previous	year.
19. Obligations under operating leases
	 2007 2007 2006 2006 
 Land and  Land and 
 buildings Other buildings Other 
 £000 £000 £000 £000
Within	one	year	 39	 45	 39	 27
Within	two	to	five	years	 528	 188	 165	 158
After	five	years	 51	 -	 130	 -
	 618	 233	 334	 185
20. Cash flow from operating activities
	  2007 2006	   £000 £000
Reconciliation	of	operating	profit	to	net	cash	inflow:	 	 Operating	profit	 	 	 5,150	 2,088
Amortisation		 	 	 1,717	 855
Depreciation	charge	 	 	 336	 211
Share	based	payment	charge	 	 	 45	 -
Increase	in	debtors	 	 	 (4,079)	 (567)
Increase	in	creditors	 	 	 1,498	 413
Net cash inflow from operating activities 	 	 	 4,667	 3,000
44
Group Group Broker Network Holdings plc, Directors’ report and 
consolidated financial statements, 30 April 2007
21. Purchase of subsidiary undertakings and broker businesses
	 	 Book Fair value Fair values 
  values Adjustments 
  £000 £000 £000
Net	assets	purchased
Fixed	assets		 	 66	 -	 66
Current	liabilities		 	 (57)	 (433)	 (490)
	 	 9	 (433)	 (424)
Goodwill	 	 	 	 15,230	 	 	 	 	 14,806	 Satisfied	by
Cash	(net	of	£1,195,000	cash	acquired)		 	 	 	 12,482
Deferred	consideration	 	 	 	 2,324	 	 	 	 	 14,806
Fair	value	adjustments	reflect	provisions	required	in	the	acquisition	balance	sheets	to	meet	additional	liabilities	 identified	on	that	date. 	 45 Broker Network Holdings plc, Directors’ report and 
consolidated financial statements, 30 April 2007
	  Pre-acquisition	   results Prior	period
	 	 	 (6 months to Year	ending 
   June 2006) 31	Dec	2005 	 	 	 	 £000	 £000
Turnover	 	 	 3,331
Operating	profit	 	 	 (650)
Loss	before	tax	 	 	 (799)
Taxation	 	 	 -
Loss	after	tax	 	 	 (799)
Prior	period	profit	after	tax	 	 	 	 301
The	group	acquired	the	following	entities	during	the	period:
Adam	&	Gaskell	Limited
TL	Risk	Solutions	Limited
The	acquisition	of	 TL	Risk	Solutions	Limited	constituted	a	substantial	acquisition	under	FRS	6	 Acquisitions	and	 Mergers.	 The	results	from	the	start	of	the	financial	year	of	 TL	Risk	Solutions	Limited	to	the	date	of	acquisition	and	 its		result	for	the	preceding	financial	year	are	detailed	below.
46 Broker Network Holdings plc, Directors’ report and 
consolidated financial statements, 30 April 2007
22. Analysis of net funds
	 	 1	May	 Cashflow 30 April 
  2006  2007 
  £000	 £000 £000
Cash	at	bank	and	in	hand	 	 1,943	 858	 2,801
Bank	loans	 	 (1,054)	 (12,276)	 (13,330)	 	 	 889	 (11,418)	 (10,529)
23. Minority interests
	  2007 2006	   £000 £000
At	beginning	of	year		 	 	 -	 16
Retained	profit	for	year	 	 	 -	 13
Disposed	due	to	acquisition	 	 	 -	 (29)
At	end	of	year		 	 	 -	 -
24. Earnings per share
	 	 Earnings Earnings Weighted 
  per share  average 
  pence £000 No. of shares
2007
Basic	earnings	per	share	 	 20.74	 3,186	 15,359,610
Diluted	earnings	per	share	 	 20.33	 3,186	 15,672,628	 2006
Basic	earnings	per	share	 	 10.56	 1,592	 15,064,906
Diluted	earnings	per	share	 	 10.27	 1,592	 15,499,768
25. Post balance sheet event
On	31	 August	2007	the	company	completed	the	acquisition	of	Sullivan	Garrett	Limited, 	a	member	of	Broker	 Network	Limited. 	 The	acquisition	was	funded	from	the	group’s	own	cash	resource.
47 Broker Network Holdings plc, Directors’ report and 
consolidated financial statements, 30 April 2007
26. Related party transactions
During	the	year	the	company	supplied	services	to	and	purchased	insurance	from	Ellis	Bates	&	Company	 Limited,	a	company	indirectly	controlled	by	Messrs	Ellis	and	Bates. 	 The	total	value	of	these	services	determined	 on	an	arms-lengths	basis	was	£1,697	(2006: 	£61,249)	and	a	balance	of	£nil	remained	unpaid	at	30	 April	2007	 (2006:	£49,847).
During	the	year	the	company	purchased	services	from	Ellis	Bates	Holdings	Limited, 	a	company	controlled	by	 Messrs	Ellis	and	Bates. 	 The	total	value	of	these	services	determined	on	an	arms-length	basis	was	£14,777	(2006: 	 £nil)	and	a	balance	of	£nil	remained	unpaid	at	30	 April	2007	(2006: 	£nil).
Mr	Ellis’ 	wife	worked	for	the	company	during	the	year. 		Her	emoluments	received	amounted	to	£13,798	(2006: 	 £12,291).
Ellis	Bates	&	Company	Limited	and	Northern	Counties	Guarantee	Corporation	Limited, 	a	company	controlled	 by	Mr	Belgian, 	were	trading	members	of	 The	Broker	Network	Limited	throughout	the	year. 	 The	company	 charged	Ellis	Bates	&	Company	Limited	£19,002	(2006: 	£16,936)	and	Northern	Counties	Guarantee	 Corporation	£11,014	(2006: 	£8,691)	during	the	year	for	support	services. 		 48 Broker Network Holdings plc, Directors’ report and 
consolidated financial statements, 30 April 2007
Notice of the 2007 
Annual General 
Meeting
Broker	Network	Holdings	plc
(Company	Number	05044510)
NOTICE	OF	 ANNUAL	GENERAL	MEETING
NOTICE	IS	HEREBY	GIVEN	that	the	 Annual	General	 Meeting	of	Broker	Network	Holdings	plc	(the	 “Company”)	will	be	held	at	Rudding	Park, 	Follifoot, 	 Harrogate,	HG3	1JH	on	17	October	2007	at	11.00am	 for	the	purposes	of	transacting	the	ordinary	business	 of	the	 Annual	General	Meeting	set	out	in	resolutions	 1	to	7	below	which	will	be	proposed	as	ordinary	 resolutions	and	the	special	business	of	the	 Annual	 General	Meeting	set	out	below	in	relation	to	which	 resolutions	8	and	9	will	be	proposed	as	ordinary	 resolutions	and	resolution	10	will	be	proposed	as	a	 special	resolution.
Ordinary Business
1.	 To	receive	and	adopt	the	Company’s	annual	 accounts	for	the	year	ended	30	 April	2007	 together	with	the	directors’ 	report	and	the	auditors’ 	 report	for	the	year	ended	30	 April	2007.
2.	 To	approve	the	report	to	the	shareholders	on	 directors’	remuneration	and	related	matters	 contained	in	the	report	and	accounts	for	the	year	 ended	30	 April	2007.
3.	 To	declare	a	final	dividend	of	£0.012	per	ordinary	 share	for	the	year	ended	30	 April	2007.
4.	 To	re-elect	as	a	director	M	J	Pendle	who	retires	 as	a	director	in	accordance	with	the	Company’s	 articles	of	association.
5.	 To	re-elect	as	a	director	P	G	Ellis	who	retires	as	 a	director	in	accordance	with	the	Company’s	 articles	of	association.
6.	 To	re-elect	as	a	director	J	K	Hale	who	retires	as	 a	director	in	accordance	with	the	Company’s	 articles	of	association.
7.	 To	reappoint	KPMG	 Audit	PLC	as	auditor	 and	authorise	the	directors	to	determine	its	 remuneration.
49 Broker Network Holdings plc, Directors’ report and 
consolidated financial statements, 30 April 2007
Special Business
8.	 THAT	the	Broker	Network	Holdings	plc	Savings	 Related	Share	Option	Scheme	(the	 “Scheme”),	 the	principal	features	of	which	are	summarised	 in	the	 Appendix,	a	copy	of	the	rules	of	which	is	 produced	in	draft	to	this	meeting	and	signed	by	 the	Chairman	for	the	purposes	of	identification, 	 be	approved	and	the	directors	be	authorised	to	 do	all	acts	and	things	as	they	consider	necessary	 or	expedient	for	the	purposes	of	implementing	 and	operating	the	Scheme, 	including	making	 such	modifications	as	the	directors	consider	 appropriate	to	obtain	approval	of	the	Scheme	by	 H	M	Revenue	&	Customs	and	to	put	the	Scheme	 into	effect.
9.	 THAT	the	directors	be	and	they	are	generally	and	 unconditionally	authorised	for	the	purposes	of	 and	pursuant	to	section	80(1)	of	the	Companies	 Act	1985	(the	 “Act”)	to	exercise	all	the	powers	 of	the	Company	to	allot	relevant	securities	(as	 defined	in	section	80(2)	of	the	 Act)	up	to	an	 aggregate	nominal	amount	of	£102,695, 	such	 authority	expiring	at	the	conclusion	of	the	next	 annual	general	meeting	of	the	Company	or, 	if	 earlier,	fifteen	months	following	the	passing	of	this	 resolution	unless	previously	revoked	or	varied	by	 the	Company	in	general	meeting, 	save	that	the	 directors	may, 	before	such	expiry, 	make	an	offer	or	 agreement	which	would	or	might	require	relevant	 securities	to	be	allotted	after	such	expiry	and	the	 directors	may	allot	relevant	securities	pursuant	 to	any	such	offer	or	agreement	as	if	the	authority	 hereby	conferred	had	not	expired.
10.	THAT	subject	to	and	conditional	on	the	passing	 of	Resolution	9	set	out	above, 	the	directors	be	 and	they	are	empowered	pursuant	to	section	95	 of	the	 Act	to	allot	equity	securities	(as	defined	in	 section	94	of	the	 Act)	wholly	for	cash	pursuant	 to	the	authority	conferred	by	Resolution	9	above	 (as	varied	from	time	to	time	by	the	Company	in	 general	meeting)	as	if	section	89(1)	of	the	 Act	did	 not	apply	to	any	such	allotment, 	provided	that	this	 power	shall	be	limited	to:
10.1	the	allotment	of	equity	securities	in	 connection	with	a	rights	issue	or	other	pro	 rata	offer	in	favour	of	holders	of	ordinary	 shares	in	the	capital	of	the	Company	where	 the	equity	securities	respectively	attributable	 to	the	interests	of	all	the	ordinary	shareholders	 are	proportionate	(as	nearly	as	may	be)	to	 the	respective	numbers	of	ordinary	shares	 held	by	them	subject	in	each	case	to	such	 exclusions	or	other	arrangements	as	the	 directors	may	deem	necessary	or	expedient	 in	relation	to	fractional	entitlements	or	any	 legal	or	practical	problems	under	the	laws	 of	any	territory, 	or	the	requirements	of	any	 regulatory	body	or	otherwise; 	and	 10.2	the	allotment	of	equity	securities	(otherwise	 than	pursuant	to	sub-paragraph	10.1	above)	 up	to	an	aggregate	nominal	amount	of	 £15,404.
	 and	shall	expire	on	the	expiry	of	the	authority	 contained	in	Resolution	9	set	out	above, 	 except	that	the	Company	may, 	before	such	 expiry	make	an	offer	or	agreement	which	 would	or	might	require	equity	securities	to	be	 allotted	after	such	expiry	and	the	directors	 may	allot	equity	securities	in	pursuance	of	 any	such	offer	or	agreement	as	if	the	power	 conferred	by	this	Resolution	had	not	expired.
Appendix	–	Summary	of	the	Broker	Network	Holdings	 plc	Savings	Related	Share	Option	Scheme	2007	(“the	 Scheme”)
The	Board	of	Directors	of	the	Company	 recommended	the	introduction	of	the	Scheme	on	21	 March	2007	and	approved	the	Rules	of	the	Scheme	 on	11	September	2007.
The	establishment	of	the	Scheme	is	subject	to	 approval	by	the	shareholders	of	the	Company	in	 general	meeting	(see	Notice	of	 AGM,	resolution	8)
The	Scheme	is	intended	to	enable	all	qualifying	 employees	of	companies	in	the	Broker	Network	Group	 to	acquire	ordinary	shares	in	Broker	Network	Holdings	 plc	through	regular	savings	from	their	net	pay. 	 The	 Board	believes	that	the	introduction	of	the	Scheme	 will	be	of	significant	benefit	to	the	Company	by	 linking	the	interests	of	the	employees	with	those	of	the	 shareholders.	 50 Broker Network Holdings plc, Directors’ report and 
consolidated financial statements, 30 April 2007
It	is	intended	that	the	Scheme	will	be	approved	by	H	 M	Revenue	&	Customs	(“HMRC”)	under	Schedule	3	 to	the	Income	 Tax	(Earning	and	Pensions)	 Act	2003	 (“the	 Act”).
The	Scheme	will	run	for	ten	years	and	the	principal	 features	of	the	Scheme	are	summarised	below.
Eligibility
Employees	of	companies	in	the	Broker	Network	 Group	(“the	Group”)	are	eligible	if	their	emoluments	 are	chargeable	to	UK	income	tax	under	sections	 15	or	21	of	the	 Act.	 The	directors	may	nominate	 other	employees	as	eligible. 	 The	directors	may	set	 a	minimum	service	requirement	not	exceeding	five	 years.	 Grant	of	options
Invitations	to	apply	for	options	may	be	issued	within	 42	days	after	the	announcement	by	the	Company	to	 the	market	of	its	results	for	any	period, 	and	at	other	 times	in	circumstances	considered	to	be	special	by	 the	directors. 	No	options	may	be	granted	more	than	 ten	years	after	the	approval	of	the	Scheme	by	the	 shareholders.	Options	granted	under	the	Scheme	 are	personal	to	the	option	holder	and, 	except	on	the	 death	of	an	option	holder, 	may	not	be	transferred. 		 No	consideration	is	payable	for	the	grant	of	an	option	 and	options	are	not	pensionable. 		 Savings	contracts
An	 eligible	 employee	 who	 applies	 for	 an	 option	 under	 the	Scheme	must	also	enter	into	a	related	HMRC-
approved	savings	contract	for	a	period	of	three	or	five	 years	(requiring	payments	of	currently	not	less	than	 £5	per	month	and	not	more	than	£250	per	month). 		 Ordinary	shares	may	only	be	acquired	under	the	 Scheme	using	these	savings. 	 Price
The	price	payable	for	each	ordinary	share	under	an	 option	shall	be	determined	by	the	directors, 	provided	 that	the	price	shall	not	be	less	than	80	per	cent	of	the	 middle	market	price	of	an	ordinary	share	averaged	 over	the	three	business	days	immediately	preceding	 that	on	which	an	invitation	to	apply	for	options	is	 made	or, 	in	the	case	of	an	option	to	subscribe	for	 ordinary	shares, 	the	nominal	value	of	such	ordinary	 shares,	if	greater. 	 Limits
No	option	shall	be	granted	under	the	Scheme, 	which	 would	cause	the	number	of	ordinary	shares	is	issued	 or	issuable	by	the	Company	under	the	Scheme	or	 any	other	share	scheme	adopted	by	the	Company	 to	exceed	ten	per	cent	of	the	Company’s	issued	 ordinary	share	capital	in	the	preceding	ten	years.
If	applications	are	received	for	options	in	excess	of	 these	limits	the	director	may	scale	the	applications	 down.	 Exercise
An	option	will	normally	be	exercisable	for	a	period	 of	six	months	after	the	third	or	fifth	anniversary	bonus	 (as	applicable)	is	paid	under	the	savings	contract, 	 provided	that	the	option	holder	has	remained	in	 employment	with	a	Group	company	throughout	that	 period.	 Options	normally	lapse	on	cessation	of	employment. 		 However,	exercise	is	permitted	if:
a)	the 	 option	 holder	 ceases	 to	 be	 employed	 (irrespective	 of	 the	 period	 for	 which	 the	 option	 has	 been	 held)	 by	 reason	 of	 death,	 injury,	 disability,	 redundancy,	 or	 retirement	 on	 reaching	 60	 or	 contractual	 retirement	 age;	 or	 where	 the	 company	 or	 business	 by	 which	 the	 option	 holder	 is	 employed	 ceases	 to	 be	 under	 the	 control	 of	 the	 Company	 or	 the	 business	 in	 which	 the	 option	 holder	 is	 employed	 is	 transferred	 out	 of	 the	 Group;	 or
b)	the	option	holder	ceases	to	be	employed	(where	 an	option	has	been	held	for	more	than	three	 years)	by	reason	of: 	(a)	taking	up	employment	 (with	the	approval	of	the	directors)	with	a	related	 undertaking;	or	(b)	not	taking	up	her	statutory	 contractual	right	to	return	to	work	where	she	has	 been	absent	from	work	because	of	pregnancy	or	 confinement;	or	(c)	the	option	holder	ceases	to	 be	employed	for	any	reason	other	than	summary	 dismissal.
If	an	option	holder	remains	employed	after	reaching	 60,	he	may	exercise	his	option	within	six	months	of	 that	date	or, 	if	not	so	exercised, 	during	the	normal	 exercise	period	set	out	above.
A	six	month	exercise	period	would	also	apply	in	the	 event	of	a	change	of	control	of	the	Company. 	.
51 Broker Network Holdings plc, Directors’ report and 
consolidated financial statements, 30 April 2007
Rights	attaching	to	shares
All	Ordinary	shares	allotted	or	transferred	under	the	 Scheme	will	rank	equally	with	all	other	Ordinary	 shares	of	the	Company	for	the	time	being	in	issue. 		 The	Company	will, 	at	its	expense, 	make	application	 to	the	London	Stock	Exchange	for	admission	to	the	 Offical	List	of	shares	allotted. 	 Adjustment	of	options
On	any	variation	of	the	Ordinary	share	capital	of	the	 Company,	the	directors, 	so	far	as	allowed	by	HMRC, 	 may	make	such	adjustments	as	they	consider	fair	 and	reasonable	to	the	number	of	Ordinary	shares	 comprised	in	each	option	and	the	price	payable	 on	exercise	of	each	option. 	No	adjustment	may	 be	made	which	would	result	in	the	increase	of	the	 aggregate	amount	payable	on	the	exercise	of	an	 option	or	any	reduction	in	the	exercise	price	for	an	 Ordinary	share	below	its	nominal	value. 	 Alterations	to	the	Scheme
The	directors	may	from	time	to	time	alter	the	Scheme	 provided	that	the	prior	approval	of	the	Company	 in	general	meeting	is	obtained	for	alterations	to	 the	advantage	of	option	holders. 	Such	approval	 is	not	required	if	the	alteration	is	necessary	or	 desirable	to	maintain	HMRC	approval, 	or	to	take	 advantage	of	provisions	of	any	existing	or	proposed	 legislation	relating	to	option	schemes, 	or	to	benefit	 the	administration	of	the	Scheme. 	No	amendment	 to	a	key	feature	of	the	Scheme	may	take	effect	until	 approved	by	HMRC. 	 Note
This	summary	sets	out	the	main	terms	of	the	Scheme. 		 However,	this	summary	does	not	form	part	of	the	 Scheme	and	shall	not	be	taken	as	affecting	the	 interpretation	of	its	detailed	rules. 	 The	directors	 reserve	the	right	up	to	the	time	of	the	 Annual	General	 Meeting	to	make	such	amendments	or	additions	 to	the	Scheme	as	they	may	consider	necessary	or	 appropriate	provided	that	such	amendments	or	 additions	do	not	conflict	in	any	material	respect	with	 this	summary	of	the	Scheme. 	 Documents	available	for	inspection
Copies	of	the	rules	of	 The	Broker	Network	Holdings	 plc	Savings	Related	Share	Option	Scheme	will	be	 available	for	inspection	at	the	Registered	Office	 of	the	Company, 	and	at	the	Company’s	Offices	at	 3rd	Floor, 	107	Fenchurch	Street, 	London, 	EC3M	5JF	 during	normal	business	hours	on	any	business	day	 (excluding	public	holidays)	from	this	date	of	this	 notice	until	the	close	of	the	 Annual	General	Meeting	 and	also	at	the	 Annual	General	Meeting	venue	for	at	 least	15	minutes	prior	to	and	during	the	meeting. 	 By	order	of	the	Board
Julie	Hale
Group	Finance	Director	and	Company	Secretary
12	September	2007
Mowbray	House
Mowbray	Square
Harrogate
HG1	5AU
52 Broker Network Holdings plc, Directors’ report and 
consolidated financial statements, 30 April 2007
Notes
1.	 A	member	entitled	to	attend	and	vote	at	the	 Annual	General	Meeting	(“Meeting”)	is	entitled	to	 appoint	a	proxy	or	proxies	to	attend	and, 	on	a	poll, 	 to	vote	instead	of	him/her. 	 A	proxy	need	not	be	a	 member	of	the	Company. 	Brief	personal	details	of	 the	Directors	proposed	for	re-election	are	noted	on	 page	14	of	the	annual	report	and	accounts.
2.	 A	form	of	proxy	is	provided	with	this	notice	and	 instructions	for	use	are	shown	on	the	form. 	 To	 be	valid, 	completed	forms	must	be	received	 at	the	office	of	the	Company’s	Registrars	at	 Computershare	Investor	Services	PLC, 	 The	Pavilion, 	 Bridgewater	Road, 	Bristol	BS13	8FB	not	less	than	 48	hours	before	the	time	fixed	for	the	Meeting. 	 Completion	and	return	of	the	form	of	proxy	will	not	 prevent	a	member	from	attending	and	voting	in	 person	at	the	Meeting.
3.	 The	Company	specifies, 	pursuant	to	Regulation	 34	of	the	Uncertificated	Securities	Regulations	 1995,	that	only	those	shareholders	registered	in	 the	Register	of	Members	of	the	Company	as	at	 11.00am	on	15	October	2007	shall	be	entitled	to	 attend	or	vote	at	the	Meeting	in	respect	of	the	 number	of	shares	registered	in	their	respective	 names	at	that	time. 	Changes	to	entries	on	 the	Register	of	Members	after	that	time	will	be	 disregarded	in	determining	the	rights	of	any	 person	to	attend	or	vote	at	the	Meeting.
4.	 The	following	documents	will	be	available	for	 inspection	at	the	registered	office	of	the	Company	 during	normal	business	hours	on	any	weekday	 (Saturdays	and	public	holidays	excepted)	until	the	 date	of	the	meeting	and	on	17	October	2007	at	 Rudding	Park, 	Follifoot, 	Harrogate, 	North	 Yorkshire,	 HG3	1JH:
(a)	 Copies	of	the	directors’ 	service	contracts; 	and
(b)	 The	register	of	the	directors’ 	interests	in	shares
	 	 in	the	capital	of	the	Company.
53 Tel 01423 877800 
Fax 01423 877811 
enquiries@brokernetworkholdings.co.uk 
www.brokernetworkholdings.co.uk
Mowbray House 
Mowbray Square 
Harrogate 
North Yorkshire 
HG1 5AU