Broker Network Holdings plc
Annual Report & Accounts
Year ended 30 April 2006
The Network of Choice About
Broker Network
Broker Network occupies a niche position in the insurance industry as the operator of the largest network of
general insurance brokers in the country, with a membership of 155 small community insurance brokers. Broker
Network negotiates agencies with insurers or wholesale intermediaries and Members are contractually obliged
to place all their general insurance business via these facilities. Broker Network also provides support services to
Members for marketing, training, regulatory compliance, IT and management of human resources. 
Broker Network and its Members handled insurance premiums approaching £290m over the last 12 months.
Insurers benefit from access to this business, together with  other services provided to them by Broker Network.
As a result the network has significant strength to negotiate levels of earnings and product availability which
individual network Members could not secure on their own.
The business model provides for the acquisition of insurance brokers, both Member and non-member firms. At
the year end Broker Network had acquired 17 insurance brokers including 2 non-member firms.
On 30 June 2006 the major acquisition of Towry Law Insurance Brokers Ltd (now trading as TL Risk Solutions) was
completed. Broker Network aims to significantly increase the number of owned brokers, both Member and non-
member, going forward.
CONTENTS
1 Highlights of 2005/2006
2 Chairman’s Statement
4 Chief Executive’s Review
7 Finance Director’s Review
10 Board of Directors and Advisors
11 Directors’ Report
13 Corporate Governance
15 Remuneration Committee Report
18 Statement of Directors’ Responsibilities In Respect of the Annual Report and the Financial Statements
19 Independent Auditors Report to the Members of Broker Network Holdings plc
20 Consolidated Profit and Loss Account
21 Consolidated Balance Sheet
22 Company Balance Sheet
23 Consolidated Cash Flow Statement
24 Notes to the Financial Statements
37 Notice of the 2006 Annual General Meeting
Broker Network Holdings plc, Directors’ Report & Consolidated Financial Statements, 30th April 2006 Broker Network Holdings plc, Directors’ Report & Consolidated Financial Statements, 30th April 2006
1
Highlights of
2005/6
FINANCIAL HIGHLIGHTS
• Turnover increased by 65% to £12,535,000 (2005: £7,590,000)
• Operating profit up 113% at £2,088,000 (2005: £979,000)
• Profit before tax and goodwill amortisation up 81% at £3,260,000 (2005: £1,800,000)
• Profit before tax increased by 83% to £2,405,000 (2005: 1,315,000)
• Group operating margin before amortisation 23.5% (2005: 19.3%)
• Fully diluted earnings per share up 52% at 10.27p (2005: 6.75p)
OPERATIONAL HIGHLIGHTS
• Improved earnings and profitability despite downturn in insurance premiums generally
• 12% increase in Member numbers
• 6 more acquisitions (4 Member firms, 2 non-member)
• Record high for Member satisfaction Chairman’s Statement
INTRODUCTION
I am pleased to report another excellent year for Broker Network. The
financial results speak for themselves and give evidence to the very good
work that has been carried out over the last 2-3 years by all concerned.
It is clear that the strategies of:
• Increasing the value added to our Members and our insurer partners
in the network business, and
• Increasing our participation in retail broking through acquisition
are bearing fruit as planned.
It is particularly reassuring that these strategies are only part executed and
the scope therefore for continued profitable growth at Broker Network is
substantial.
CORPORATE DEVELOPMENTS
A significant development of Broker Network’s strategy has been the
acquisition of businesses which only became Members of the network
upon acquisition. This has the double benefit of adding new premium
income to Broker Network as well as additional retail broking margin. Two
such businesses have been acquired in the year and we are pleased with
the way they have been integrated. Particularly significant has been the
acquisition of TL Risk Solutions Ltd (TLRS) after the end of the financial year
where a structure has been implemented which other consolidators in the
insurance broking market would find difficult to implement, but which
Broker Network has been able to effect because of its
membership/network structure.  
The acquisition of firms who are not currently Members but whose profile
fits our Membership criteria will continue to be a feature of Broker
Network’s strategy going forward. This enhances the development
potential of the business significantly.
Broker Network Holdings plc, Directors’ Report & Consolidated Financial Statements, 30th April 2006
2 TEAM
These results have only been attained through the
application, energy and creativity of the
management team and all the people at Broker
Network. The Board has recently been strengthened
with the addition of Nigel Law, the MD of our retail
broking business, Broker Network Insurance Brokers.
The Broker Network management will also benefit
from the experience that the senior team from TLRS
bring with them.  Overall, the group now employs
over 350 people whose effort day to day is extremely
important and underpins the performance of the
group.  
FINANCIAL RESOURCES
To continue to grow, Broker Network needs cash to
fund development and in particular further earnings
enhancing acquisitions. The group is cash generative
and is currently able to fund its growth from its own
resources and loan facilities made available by
Lloyds TSB. The funding requirement associated with
future acquisitions is continually assessed by the
Board against the cash that will be generated
internally and what is available prudently from our
banking facilities.
OUTLOOK
The insurance broking market for brokers focussed
on SME clients is in a period of consolidation.
Broker Network is one of the half a dozen principal
consolidators in this part of the general insurance
industry. However, Broker Network is also the leading
network organisation for general insurance brokers
in the U.K. and is unique in offering owner-managed
brokers the option of remaining independent and
coming under the umbrella of the network
organisation, or of being acquired by our retail
broking operation which fully understands and
values the importance of local market presence and
relationships. We believe it is a powerful proposition
which will underpin the continued growth of the
business for the foreseeable future.
Faisal Rahmatallah
Chairman
Broker Network Holdings plc, Directors’ Report & Consolidated Financial Statements, 30th April 2006
3 Chief Executive’s
Review
OPERATIONAL OVERVIEW
It is pleasing to report another year of excellent progress for the Broker
Network Group (BN). Fine tuning our strategy has meant that we continue
to be well placed to take advantage of the opportunities presented to us
by the consolidation in the market place.
BROKER NETWORK LTD
This has been another impressive year for Broker Network Ltd. Improved
revenue streams from all sources have enabled us to increase turnover by
35%, whilst costs have been contained, resulting in a 76% increase in
contribution from this business.
New Member recruitment, interrupted last year by the arrival of statutory
compulsory regulation, has now returned to the level we enjoyed in
previous years. Better still is that it is the larger firms, which until recently
would not have considered it necessary or appropriate to join a network,
that we are also persuading to join us. The pipeline of prospective new
Members is also very robust - this underlines the fact that the Broker
Network proposition for independent Members is now stronger than ever.
As far as our existing customers are concerned, our independently
conducted Member Satisfaction Survey shows that Members’ satisfaction
with our service achieved a new record high at the end of the first quarter
of this year. During the year we also acquired 4 more Member businesses
whose owners would otherwise have sold elsewhere.
This is the first time we have been able to report a full year’s contribution
from our refreshed proposition to insurers and the work we do for them.
Not only have we been able to sustain the previous year’s contribution but
we have also been able to improve it with increases from most of the main
insurer partners. Members too have benefited from these closer working
relationships with improvements in their margin across many classes of
business.
Broker Network Holdings plc, Directors’ Report & Consolidated Financial Statements, 30th April 2006
4 BROKER NETWORK INSURANCE BROKERS LTD
In addition to the four Member businesses we
acquired in 2005/6, we also, for the first time,
acquired two businesses from non members. This
development of our plan came about as a result of
the experience we had gained from Member
acquisitions which gave us the confidence to seek
out high quality non member businesses with the
requisite profile. The slightly higher risk of acquiring
businesses that are not known to us is offset by a
more intensive due diligence process and higher
initial rewards. It is also possible to actively pursue
non members for acquisition. Our stance with
Members, whilst making sure they know we are
acquisitive, is to let them make the first move.
We have learnt from the acquisition of retail broking
businesses made over the past two years. Expectations
about what we can achieve and how quickly are now
firmly based on experience and our strategy and
methodology has been fine tuned as a result.
OTHER DEVELOPMENTS
I am particularly pleased to be able to report on the
major acquisition of Towry Law Insurance Brokers Ltd
(renamed and now trading as TL Risk Solutions)
which completed on 30 June 2006. TL Risk Solutions
(TLRS) is a substantial retail general insurance broker
specialising in mid market commercial insurance
with additional expertise in Healthcare, personal
insurance for High Net Worth individuals,
professional indemnity and credit insurance.
Until it was acquired by us, TLRS had been a division
of the Towry Law Group, probably best known as an
independent financial advisor.
Working closely with the management team we were
able to construct a deal which was satisfactory to the
vendor but also gave management the opportunity,
with our help, to take a stake in and continue to run
the business.
There are significant benefits to TLRS in joining forces
with BN, both from a trading and operating cost
perspective. As far as BN is concerned, we have the
comfort that an established management team has
itself invested in the future prosperity of this business.
I welcome this team, and look forward to working
closely with it in the coming months and years.
Broker Network London Markets (BNLM), which
received its full Lloyd’s broker accreditation in
December 2005, experienced growth of revenue of
38% over the period but, notwithstanding, made a
small loss. At just three years old this is still an
embryonic business. As our reputation in the London
Market grows we can access an ever widening range
of specialist high risk markets and more Members
are now making use of the facility than ever before.
Unfortunately, the current very competitive nature of
the high risk insurance market means that Members
have less need to use a wholesale broker like BNLM
as they can place many of the more difficult risks with
mainstream insurers than was previously the case.
However, by controlling costs and continuing to win
friends this business should be well placed once the
market sees an upturn in rating. TLRS will also
provide an opportunity to share some of the
operating costs (for example both will co-habit in
new premises in the City later this year) and a chance
to pitch for their portfolio of London Market business.
Broker Network Underwriting (BNU), the division of
Broker Network Ltd that provides insurance products
branded exclusively for network Members, saw
increased revenues of 59% over the prior year whilst
its profit contribution grew by 130% as a result of
improved economies of scale.  The product suite was
also extended towards the end of the financial year,
so we should see further improvements in both
volume and productivity in the coming months.
Broker Network Holdings plc, Directors’ Report & Consolidated Financial Statements, 30th April 2006
5 CONSOLIDATION AND COMPETITION
Whilst the pace of broker consolidation continues to
escalate it seems that the appetite of the
consolidators remains healthy. Whilst there are plenty
of brokers willing to sell their businesses competition
amongst buyers is intense. This inevitably impacts on
the price consolidators are required to pay to secure
acquisitions, particularly of the larger more profitable
businesses. We also believe that the insurer
community is looking more keenly at owning its own
distribution channels which will increase competition
further.
We have seen little competition however when
making our smaller acquisitions and even with the
larger firms we believe our proposition can prove
more attractive than others. Our approach of
retaining the people, premises and more often than
not the trading name, have been significant factors in
winning acquisitions, most notably when we acquired
TL Risk Solutions. 
Surprisingly the competitive environment for networks
remains static. We believe that Broker Network could
be the beneficiary of any increased competition in
this area. As the undisputed number one network in
UK general insurance it is clear that we are still
winning more significant new accounts than our
competitors.
INSURANCE MARKET CONDITIONS
The cyclical nature of the insurance market is well
known. Following four years of organic growth in
premiums up to 2004, premiums started to fall in
2005, and this continues in 2006. This is therefore
the first year since we became a public company
where we have operated exclusively in an
environment of softening premiums.
In 2005 I suggested that the Broker Network
business model was able to sustain profitability at all
points of the insurance cycle - in softer market
conditions insurers have a greater appetite for
business and therefore, whilst headline volumes may
decline, margins can rise to compensate. However,
scale and a profitable book of business are needed
to maximise this opportunity.
I believe this year’s results speak for themselves.
Members too (both independent and owned) have
benefited - their like for like premium income fell by
3.8% this year, but in the same period their earnings
as a percentage of premium rose by 8.2%.
OUTLOOK FOR 2006/7
Our first two full years of being a public company
have been challenging but at the same time exciting
and I foresee this will continue in the year ahead.
Our reputation continues to grow amongst our core
target market and the acquisition of TL Risk Solutions
should ensure other such opportunities are presented
to us. I am therefore confident that the trading
outlook for the company will remain favourable in
2006/7.
Grant Ellis
Chief Executive Officer
Broker Network Holdings plc, Directors’ Report & Consolidated Financial Statements, 30th April 2006
6 Broker Network Holdings plc, Directors’ Report & Consolidated Financial Statements, 30th April 2006
7
Finance Director’s
Review
TURNOVER
Turnover for the year was £12.5m including £2.3m from acquisitions
made during the year. This is an overall increase of 65% from £7.6m in
2005, 34% excluding acquisitions in the year. Turnover in BNIB grew by
148% to £5.3m as a result of the full year impact of previous acquisitions
plus the addition of 6 new brokers in the year.  Broker Network also grew
strongly with the addition of a net 16 new Members and a turnover
increase of 35% from £5.4m to £7.3m.
ADMINISTRATIVE EXPENSES
Administrative expenses, excluding goodwill amortisation, were £9.6m, an
increase of 57% on the prior year.  We continue to invest in our head office
infrastructure to improve the services to our network Members and the
BNIB team has been further strengthened by the addition of a business
development manager and a UK sales manager.
Intangible assets are being amortised over between 5 and 20 years
resulting in a goodwill amortisation charge of £0.9m for the year.
2006 2005 % change 
£000 £000
Turnover 12,535 7,590 65%
Administrative expenses (10,447) (6,611) 58%
Administrative expenses (9,592) (6,126) 57%
excluding goodwill amortisation
Operating profit 2,088 979 113%
PBT 2,405 1,315 83%
Tax (800) (274) 192%
Profit after tax 1,605 1,041 54%
Basic EPS 10.56p 6.93p 52%
Diluted EPS 10.27p 6.75p 52%
Capital expenditure 241 380 -37%
Acquisition spend 4,086 691 491%
Cash 1,943 2,308 -16% PROFITABILITY
Profit before tax grew strongly, from £1.3m to £2.4m, an increase of 83%. The acquisition of a further 6 brokers
during the year, bringing the total number to 17, has substantially increased the headcount of the group bringing
it to 261 by the year end. However, there was a 5% increase in turnover per employee and a 35% increase in
operating profit per employee as shown below:
TAXATION
The group’s tax charge for the year is £0.8m which represents an effective tax rate of 33%. 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 10.56p compared to 6.93p in 2005. This is based on a weighted average 15.06m
shares in 2006 compared to 14.96m in 2005.
CAPITAL EXPENDITURE
Capital expenditure for the group continues to be predominantly for IT hardware and software. For the network
business we have invested in new HR and payroll software and computer equipment for new staff. In BNIB we
have continued to install the Acturis ASP back office system in the brokers acquired during the year to ensure that
we can benefit from economies of scale and consistency of reporting.
Total capital expenditure was £0.2m compared to £0.4m in 2005.
ACQUISITIONS
£2.6m was spent on the initial payments and fees for the acquisition of a further 6 brokers in the year. In addition,
£1.5m was paid out in deferred consideration payments to former principals for previous acquisitions.
Broker Network Holdings plc, Directors’ Report & Consolidated Financial Statements, 30th April 2006
8
2006 2005 % change
Average headcount 229 146 57%
2006 2005 % change
£ £
Turnover per employee 54,738 51,992 5%
Operating profit per employee 9,118 6,705 36% Broker Network Holdings plc, Directors’ Report & Consolidated Financial Statements, 30th April 2006
9
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 £3.0m (2005: £0.8m).  
BANK FUNDING
£1m of the £2.5m facility agreed with Lloyds TSB
bank was drawn down during the year to fund
acquisitions.  Since the year end this facility has been
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. The Executive Committee consisting of
Directors and senior management reviews the risk
register formally every six months. This is then
followed by a consideration at the next Audit
Committee meeting. Assurance work on the BNIB
branches is conducted on a regular basis, all current
branches having now had at least one visit.
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 Board of Directors
and Advisors
DIRECTORS
P Bates
MG Collins
PG Ellis
JK Hale
NF Law
M Pendle
FJ 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
Teather & Greenwood Limited
Beaufort House
15 St Botolph Street
London EC3A 7QR
FINANCIAL PR ADVISOR
Buchanan Communications
Limited
3 The Courtyard
Thorpe Lane
Guiseley
Leeds LS20 8LG
REGISTRAR
Computershare Investor Services plc
PO Box 82
The Pavilions
Bridgwater Road
Bristol BS99 7NH
REGISTERED OFFICE
Mowbray House
Mowbray Square
Harrogate
North Yorkshire
HG1 5AU
Broker Network Holdings plc, Directors’ Report & Consolidated Financial Statements, 30th April 2006
10 Broker Network Holdings plc, Directors’ Report & Consolidated Financial Statements, 30th April 2006
11
Directors’ Report
The directors present their report and the audited
accounts of the group for the year ended 30 April
2006.
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 on pages 4 to 6 and 7 to 9 respectively.
RESULT AND DIVIDENDS
The profit on ordinary activities before tax was £2.4m
(2005: £1.3m).
The profit before goodwill amortisation and tax for
the period was £3.2m (2005: £1.8m).
A dividend of 1p per share will be proposed at the
forthcoming Annual General Meeting.
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 Deputy Chief Executive
P Bates Non-executive Director
ML Japhet Non-executive Director (resigned 
12 January 2006)
M Pendle Non-executive Director
MD Wood Managing Director,
Broker Network Limited  
(appointed 12 July 2005)
NF Law Managing Director, Broker 
Network Insurance Brokers Limited
(appointed 11 April 2006)
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 15 to 17.
At the forthcoming Annual General Meeting MD
Wood and NF Law will automatically retire from the
Board in accordance with the Articles of Association
and offer themselves for re-election. The Articles of
Association stipulate that one third of the other
directors will retire by rotation and, accordingly, P
Bates and MG Collins will retire and offer themselves
for re-election.
POLITICAL AND CHARITABLE CONTRIBUTIONS
Donations of £659 were made to charities during the
year (2005: £2,450). The group made no political
contributions during the period.
SUBSTANTIAL SHAREHOLDINGS
The company has been informed that on 13
September 2006 the following shareholders held
substantial holdings of the issued ordinary shares of
the company. SUBSTANTIAL SHAREHOLDINGS
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 20 days (2005: 31 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 member 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 18 October 2006 at 2.00pm 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 13 September 2006.
By order of the board
JK Hale
Secretary
Broker Network Holdings plc, Directors’ Report & Consolidated Financial Statements, 30th April 2006
12
Holding of ordinary shares Issued share capital
number %
PG Ellis 2,036,535 13.25
JP Morgan Asset Management 1,408,450 9.17
Axa Framlington Investment Managers 1,315,000 8.56
P Bates 1,273,800 8.29
D Belgian 1,250,000 8.14 Broker Network Holdings plc, Directors’ Report & Consolidated Financial Statements, 30th April 2006
13
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 2006.
INTERNAL CONTROL AND
RISK MANAGEMENT PROCESS
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 every 6 months
by the Audit Committee.
An internal audit function has now been 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.
THE BOARD
Details of the changes in Directors in the year are
provided in the Directors' Report on pages 11-12. At
30 April 2006 the Board comprised 5 executive
Directors, 2 non-executive Directors and 1 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 6 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. Broker Network Holdings plc, Directors’ Report & Consolidated Financial Statements, 30th April 2006
14
BOARD PERFORMANCE
The Board conducted a formal review of its
performance in August 2005 and concluded that the
direction from the Board met the correct balance of
challenge and support.
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 15 to 17 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.   Broker Network Holdings plc, Directors’ Report & Consolidated Financial Statements, 30th April 2006
15
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 13 to 14.
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.
Company Class of Share Interest at year end Interest at start
of year or date
of appointment
PG Ellis Broker Network Holdings plc Ordinary 2,036,535 2,025,000
P Bates Broker Network Holdings plc Ordinary 1,273,800 1,930,000
MG Collins Broker Network Holdings plc Ordinary 300,000 300,000
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: Broker Network Holdings plc, Directors’ Report & Consolidated Financial Statements, 30th April 2006
16
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 options may be exercised within 3 months of the date of cessation and, if not so
exercised, 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 the 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.
7. EMI Relief
Provided the Enterprise Management Incentive 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 have options in respect of 300,000 ordinary shares at option prices of 20p and 40p respectively.  The
option period remains unchanged.
Total Directors’ pay and benefits in kind in the period: Broker Network Holdings plc, Directors’ Report & Consolidated Financial Statements, 30th April 2006
17
PENSIONS
The following Directors have received contributions to Group personal pension schemes in the period:
DIRECTORS' CONTRACTS
Details of service agreements in place for the current Directors are as follows:
Salary/fees Benefits in kind 2006
£000 £000 Total £000
Executive Directors
PG Ellis 112 8 120
JK Hale 94 9 103
MG Collins 61 11 72
MD Wood (appointed 12 July 2005) 69 - 69
NF Law (appointed 11 April 2006) 4 - 4
Non-executive Directors
P Bates 9 - 9
F Rahmatallah 21 - 21
M Japhet - - -
M Pendle 14 - 14
Contributions paid or payable in the Amount of company contribution
period by the company accrued/(prepaid) at year end
2006 2006
£000 £000
PG Ellis 6 -
JK Hale 5 -
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
MG Collins 1 March 2004 Continuous subject to the notice period 6 months
MD Wood 1 September 2006 Continuous subject to the notice period 6 months
NF Law 12 April 2006 Continuous subject to the notice period 6 months
P Bates 17 March 2004 3 years -
F Rahmatallah 17 March 2004 3 years -
M Pendle 17 March 2004 3 years - 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.
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 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.
Broker Network Holdings plc, Directors’ Report & Consolidated Financial Statements, 30th April 2006
18 Broker Network Holdings plc, Directors’ Report & Consolidated Financial Statements, 30th April 2006
19
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 2006 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 18.
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  Financial Director’s Review that is cross referenced from
the Business Review section of the Directors’ Report.
We also 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 2006 and of the group’s
profit for the year then ended;
• the financial statements have been properly in accordance
with the Companies Act 1985; and
• the information given in the Directors’ Report is consistent
with the financial statements.
KPMG Audit Plc 13 September 2006
Chartered Accountants
Registered Auditor Broker Network Holdings plc, Directors’ Report & Consolidated Financial Statements, 30th April 2006
20
Consolidated Profit
and Loss Account
for the year ended 30 April 2006
Acquisitions Total Total
Note 2006 2006 2006 2005
£000 £000 £000 £000
Gross commission receivable (unaudited) 45,185 - 45,185 40,968
Turnover 2 10,189 2,346 12,535 7,590
Administrative expenses (8,315) (2,132) (10,447) (6,611)
Operating profit 2,3 1,874 214 2,088 979
Net interest receivable 4 317 336
Profit on ordinary activities before taxation 2,405 1,315
Tax on profit on ordinary activities 7 (800) (274)
Profit after tax 1,605 1,041
Minority interests - equity 23 (13) (4)
Retained profit for the financial period 16 1,592 1,037
Earnings per share 
- basic 24 10.56p 6.93p
- diluted 24 10.27p 6.75p
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. Broker Network Holdings plc, Directors’ Report & Consolidated Financial Statements, 30th April 2006
21
Consolidated
Balance Sheet
These financial statements were approved by the Board of Directors on 13 September 2006 and were signed on its
behalf by:
JK Hale, Director
at 30 April 2006
Note 2006 2005
£000 £000
Fixed assets
Intangible assets 8 5,659 2,675
Tangible assets 9 558 491
6,217 3,166
Current assets
Debtors 11 13,399 10,657
Insurance broking account 9,513 8,640
Cash at bank and in hand 1,943 2,308
24,855 21,605
Creditors: amounts falling due within one year 12 (22,848) (18,821)
Net current assets 2,007 2,784
Total assets less current liabilities 8,224 5,950
Creditors: amounts falling due after more than one year 13 (1,809) (1,106)
Provision for liabilities and charges 14 (19) (24)
Net assets 6,396 4,820
Capital and reserves
Called up share capital 15 301 301
Share premium account 16 2,095 2,095
Capital reserve 16 454 454
Profit and loss account 16 3,546 1,954
Equity shareholders' funds 6,396 4,804
Minority interests 23 - 16
6,396 4,820 Broker Network Holdings plc, Directors’ Report & Consolidated Financial Statements, 30th April 2006
22
Company
Balance Sheet
Note 2006 2005
£000 £000
Fixed assets
Investments 10 1,656 956
1,656 956
Current assets
Debtors 11 4,959 1,254
Cash at bank and in hand 495 2,035
5,454 3,289
Creditors: amounts falling due within one year 12 (2,759) (1,879)
Net current assets 2,695 1,410
Total assets less current liabilities 4,351 2,366
Creditors: amounts falling due after more than
one year 13 (1,054) -
Net assets 3,297 2,366
Capital and reserves
Called up share capital 15 301 301
Share premium account 16 2,095 2,095
Profit and loss account 16 901 (30)
Equity shareholders' funds 3,297 2,366
These financial statements were approved by the Board of Directors on 13 September 2006 and were signed on its
behalf by:
JK Hale, Director
at 30 April 2006 Broker Network Holdings plc, Directors’ Report & Consolidated Financial Statements, 30th April 2006
23
Consolidated Cash
Flow Statement
for the year ended 30 April 2006
Note 2006 2005
£000 £000
Net cash inflow from operating activities 20 3,000 803
Returns on investment and servicing of finance
Interest received 371 336
Interest paid (54) -
Net cash inflow from returns on investment and servicing of finance 317 336
Capital expenditure and investment
Purchase of tangible fixed assets (241) (380)
Net cash outflow from capital expenditure and investment (241) (380)
Acquisitions and disposals
Purchase of subsidiary undertakings and broker businesses 21 (2,590) (585)
Deferred consideration paid in the year (1,496) (106)
Net cash outflow from acquisitions and disposals (4,086) (691)
Corporation tax paid (409) (297)
Financing
Increase in bank loans 1,054 -
Issue of ordinary share capital  - 2,170
Net cash inflow from financing 1,054 2,170
(Decrease)/increase in net cash 22 (365) 1,941
2006 2005
£000 £000
(Decrease)/increase in cash in the year (365) 1,941
Cash inflow from increase in debt (1,054) -
Movement in net funds in the period (1,419) 1,941
Net funds at start of period 2,308 367
Net funds at end of period 22 889 2,308
RECONCILIATION OF NET CASH FLOW TO MOVEMENT IN NET FUND Broker Network Holdings plc, Directors’ Report & Consolidated Financial Statements, 30th April 2006
24
Notes 
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. A summary of the more important accounting policies which the
Directors consider to be the most appropriate for the group and which have been applied consistently, is set out below.
Basis of consolidation
The group financial statements include the financial statements of the company and its subsidiary undertakings made
up to 30 April 2006. 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.
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).
(forming part of the financial statements) Broker Network Holdings plc, Directors’ Report & Consolidated Financial Statements, 30th April 2006
25
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% 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.
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. Broker Network Holdings plc, Directors’ Report & Consolidated Financial Statements, 30th April 2006
26
Network Services and Retail Insurance Broking Total
Wholesale Insurance Broking
2006 2005 2006 2005 2006 2005
£000 £000 £000 £000 £000 £000
Turnover
Total sales 7,592 5,634 5,265 2,119 12,857 7,753
Inter-segment sales (322) (163) - - (322) (163)
Sales to third parties 7,270 5,471 5,265 2,119 12,535 7,590
Operating profit/(loss) before
goodwill amortisation 2,495 1,295 448 169 2,943 1,464
Goodwill amortisation - - (855) (485) (855) (485)
Operating profit/(loss) 2,495 1,295 (407) (316) 2,088 979
Net interest 291 336 26 - 317 336
Profit/(loss) before taxation 2,786 1,631 (381) (316) 2,405 1,315
Segmental net assets 6,156 1,314 240 1,471 6,396 2,785
Unallocated net assets - 2,035
Total net assets 6,396 4,820
2006 2005
£000 £000
Operating profit is stated after charging:
Auditors' remuneration:
- for audit services - Group 36 30
- for audit services - Company 1 3
- for non audit services 35 7
Amortisation of goodwill 855 485
Depreciation - owned fixed assets 211 165
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.
Unallocated net assets in 2005 relate to cash balances held within the company’s balance sheet, which
predominantly relate to proceeds from the issue of shares at flotation. In 2006 all cash resources are utilised
within the business for working capital requirements
2 SEGMENTAL INFORMATION
3 OPERATING PROFIT Broker Network Holdings plc, Directors’ Report & Consolidated Financial Statements, 30th April 2006
27
The group had an average of 229 (2005: 146) employees during the year who are all employed within the
following divisions:
The group made contributions to a defined contribution pension scheme in respect of two (2005: two) Directors.
Aggregate emoluments and benefits include amounts paid to the highest paid Director as follows:
2006 2005
£000 £000
Interest received 371 336
Bank loan interest paid (54) -
317 336
4 NET INTEREST RECEIVABLE
2006 2005
£000 £000
Wages and salaries 5,213 3,120
Social security costs 510 327
Pension costs 120 37
5,843 3,484
5 EMPLOYEE INFORMATION
2006 2005
£000 £000
Aggregate emoluments 412 345
Pension contributions 11 10
423 355
2006 2005
£000 £000
Aggregate emoluments 120 118
Pension contributions 6 6
6 DIRECTORS’ EMOLUMENTS
No of Employees
2006 2005
Network Services 99 94
Insurance Broking 130 52
229 146 Broker Network Holdings plc, Directors’ Report & Consolidated Financial Statements, 30th April 2006
28
(b) Factors affecting tax charge for period
The tax assessed for the year is higher (2005: lower) than the standard rate of corporation tax in the UK (30%;
2005: 30%). The differences are explained below:
2006 2005
£000 £000
Corporation tax - current year 798 253
Corporation tax - prior years 7 -
Deferred tax  (5) 21
800 274
2006 2005
£000 £000
Profit on ordinary activities before tax 2,405 1,315
Profit on ordinary activities multiplied by standard rate of corporation tax (30%) 722 395
Effects of:
Expenses not deductible for tax purposes 71 73
Capital allowances for the period less than/(in excess of) depreciation 5 (21)
Realisation of deferred tax asset previously not brought to account - (194)
Current tax charge for the period 798 253
7 TAX ON PROFIT ON ORDINARY ACTIVITIES
8 INTANGIBLE FIXED ASSETS
(a) Analysis of charge in period
Group Goodwill
£000
Cost
At 1 May 2005 3,187
Acquisitions 4,068
Adjustments due to re-evaluation of deferred consideration (229)
At 30 April 2006 7,026
Amortisation 
At 1 May 2005 512
Charged in the year 855
At 30 April 2006 1,367
Net book value
At 30 April 2006 5,659
At 30 April 2005 2,675 Broker Network Holdings plc, Directors’ Report & Consolidated Financial Statements, 30th April 2006
29
9 TANGIBLE FIXED ASSETS
Group Office Computer Motor
equipment equipment vehicles Total
£000 £000 £000 £000
Cost  
At 1 May 2005 204 908 22 1,134
Additions 42 199 - 241
Acquisitions 319735163
Disposals - - (8) (8)
At 30 April 2006 277 1,204 49 1,530
Accumulated depreciation
At 1 May 2005 132 506 5 643
Acquisitions 19 87 15 121
Charge for year 32 166 13 211
Disposals - - (3) (3)
At 30 April 2006 183 759 30 972
Net book value
At 30 April 2006 94 445 19 558
At 30 April 2005 72 402 17 491 Broker Network Holdings plc, Directors’ Report & Consolidated Financial Statements, 30th April 2006
30
10 FIXED ASSET INVESTMENTS
Country of Principal Class and
incorporation activity percentage
of shares held
Group Company
Subsidiary undertakings
Broker Network Limited United Kingdom Insurance 100 100
Broker Network  United Kingdom Insurance Broking 100 100
Insurance Brokers Limited
London Broking Services United Kingdom Wholesale Insurance Broking 100 100
Donaldson Meigh Limited United Kingdom Non trading 100 -
Sharples and Co. (Insurance Brokers) Limited United Kingdom Insurance Broking 100 -
Broker Network (Trustee) Limited United Kingdom Non trading 100 -
Redbox Systems Limited United Kingdom Non trading 100 -
Townfrost Limited United Kingdom Non trading 100 -
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 -
Company - investments in subsidiary undertakings 2006 2005
£000 £000
Cost
At 1 May 2005 956 -
Additions 700 956
At 30 April 2006 1,656 956
Group
The undertakings in which the group's interest at the year end is more than 20% are as follows: Broker Network Holdings plc, Directors’ Report & Consolidated Financial Statements, 30th April 2006
31
11 DEBTORS
Group Group Company Company
2006 2005 2006 2005
£000 £000 £000 £000
Trade debtors 145 121 - -
Payments and accrued income 464 294 66 -
Other debtors 2,492 1,632 21 -
Amounts owed by group undertakings - - 4,872 1,254
In relation to insurance transactions 10,298 8,610 - -
13,399 10,657 4,959 1,254
12 CREDITORS: AMOUNTS FALLING DUE WITHIN ONE YEAR
Group Group Company Company
2006 2005 2006 2005
£000 £000 £000 £000
Trade creditors 414 225 55 -
Taxation and social security 196 120 - -
Other creditors 117 34 25 -
Accruals 426 348 94 -
Corporation tax 490 95 18 -
In relation to insurance transactions 19,811 17,251 - -
Deferred consideration 1,394 748 - -
Amounts owed to group undertakings - - 2,567 1,879
22,848 18,821 2,759 1,879
13 CREDITORS: AMOUNTS FALLING DUE AFTER MORE THAN ONE YEAR
Group Group Company Company
2006 2005 2006 2005
£000 £000 £000 £000
Deferred consideration 755 1,106 - -
Bank loan 1,054 - 1,054 -
1,809 1,106 1,054 -
14 PROVISION FOR LIABILITIES AND CHARGES
Group Company
£000 £000
Deferred tax liability
At 1 May 2005 24 -
Credited to profit and loss account (5) -
At 30 April 2006 19 - Broker Network Holdings plc, Directors’ Report & Consolidated Financial Statements, 30th April 2006
32
15 CALLED UP SHARE CAPITAL
2006 2006 2005 2005
Number £000 Number £000
Authorised
Ordinary shares of 2p each 22,650,000 453 22,650,000 453
2006 2006 2005 2005
Number £000 Number £000
Allotted, called up and fully paid
Ordinary shares of 2p each 15,064,906 301 15,064,906 301
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 year.
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 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 year.
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 Broker Network Holdings plc, Directors’ Report & Consolidated Financial Statements, 30th April 2006
33
16 RESERVES
Group Company
Share Profit Share Profit
premium Capital and loss premium and loss
account reserve account account account
£000 £000 £000 £000 £000
At 1 May 2005 2,095 454 1,954 2,095 (30)
Dividend received ---- 1,501
Retained profit/(loss) for the
financial year - - 1,592 - (570)
At 30 April 2006 2,095 454 3,546 2,095 901
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 for the years ended 30 April 2005 and 2006 merger accounting principles
have been 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 has been transferred to other reserves.
17 RECONCILIATION OF MOVEMENTS IN SHAREHOLDERS’ FUNDS
Group Company
£000 £000
Opening equity shareholders’ funds 4,804 2,366
Dividend received - 1,501
Retained profit/(loss) for the financial year 1,592 (570)
Closing equity shareholders' funds 6,396 3,297
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 2006 amounted to £41,584 (2005: £31,756). No amounts were
owing by or to the group at the accounting period end, nor at the end of the previous year. Broker Network Holdings plc, Directors’ Report & Consolidated Financial Statements, 30th April 2006
34
19 OBLIGATIONS UNDER OPERATING LEASES
The company has no operating lease commitments. 
Group Group
2006 2006 2005 2005
Land and buildings Other Land and buildings Other
£000 £000 £000 £000
Within one year 39 27 -5
Within two to five years 165 158 - 116
After five years 130 - 68 -
334 185 68 121
20 CASH FLOW FROM OPERATING ACTIVITIES
2006 2005
£000 £000
Reconciliation of operating profit to net cash inflow:
Operating profit 2,088 979
Amortisation 855 485
Depreciation charge 211 165
Increase in debtors (567) (1,016)
Increase in creditors 413 190
Net cash inflow from operating activities 3,000 803
21 PURCHASES OF SUBSIDIARY UNDERTAKINGS AND BROKER BUSINESSES
£000
Net assets purchased
Fixed assets (book value and fair value) 42
Current assets (book value and fair value) 499
541
Goodwill 4,068
4,609
Satisfied by
Cash 2,590
Deferred consideration 2,019
4,609 Broker Network Holdings plc, Directors’ Report & Consolidated Financial Statements, 30th April 2006
35
22 ANALYSIS OF NET FUNDS
1 May Cashflow 30 April
2005 2006
£000 £000 £000
Cash at bank and in hand 2,308 (365) 1,943
Bank loans - (1,054) (1,054)
2,308 (1,419) 889
23 MINORITY INTERESTS
2006 2005
£000 £000
At beginning of year 16 12
Retained profit for year 13 4
Disposed due to acquisition (29) -
At end of year - 16
24 EARNINGS PER SHARE
25 POST BALANCE SHEET EVENT
Earnings per share Earnings Weighted average
2006 pence £000 No. of shares
Basic earnings per share 10.56 1,592 15,064,906
Diluted earnings per share 10.27 1,592 15,499,768
2005
Basic earnings per share 6.93 1,037 14,962,339
Diluted earnings per share 6.75 1,037 15,366,899
On 30 June 2006 the company completed the acquisition of the general insurance business of the Towry Law
Group. The acquisition consideration was £12.5m, payable in full upon completion, with fees of approximately
£0.75m. The acquisition was funded by £13m 5 year term bank loans from Lloyds TSB. Broker Network Holdings plc, Directors’ Report & Consolidated Financial Statements, 30th April 2006
36
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-
length basis was £61,249 (2005: £47,887) and a balance of £49,847 remained unpaid at 30 April 2006 (2005:
£223).
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 £Nil (2005: £3,572) and
a balance of £Nil remained unpaid at 30 April 2006 (2005: £Nil).
Mr Ellis’ wife worked for the company during the year. Her emoluments received amounted to £12,291 (2005:
£12,816).
During the year, the company paid Andrew Hale Photography Limited, a company controlled by Mrs Hale’s
husband, £1,374 (2005: £1,297) for services provided as a photographer.
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 £16,936 (2005: £11,099) and Northern Counties Guarantee Corporation £8,691
(2005: £5,396) during the year for support services.   Notice of the 2006
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, North Yorkshire, HG3 1JH on 18 October 2006 at 2.00 p.m.
for the purposes of transacting the ordinary business of the Annual General Meeting set out in resolutions 1 to
8 below and the special business set out in resolution 9 below, which will be proposed as ordinary resolutions
and the special business set out in resolution 10 below, which will be proposed as a special resolution.
Ordinary Business
1. To receive the accounts for the year ended 30 April 2006 together with the directors’ report and the auditors’
report for the year ended 30 April 2006.
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 2006.
3. To declare a final dividend of £0.01 per ordinary share for the year ended 30 April 2006.
4. To re-elect as a director M D Wood who retires as a director in accordance with the Company’s articles of
association.
5. To re-elect as a director N F Law who retires as a director in accordance with the Company’s articles of
association.
6. To re-elect as a director P Bates who retires as a director in accordance with the Company’s articles of
association.
7. To re-elect as a director M G Collins who retires as a director in accordance with the Company’s articles of
association.
8. To re-appoint KPMG Audit PLC as auditors and to authorise the directors to fix their remuneration.
Broker Network Holdings plc, Directors’ Report & Consolidated Financial Statements, 30th April 2006
37 Broker Network Holdings plc, Directors’ Report & Consolidated Financial Statements, 30th April 2006
38
Special Business
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
the authorised but unissued share capital of the Company as at the conclusion of the meeting, 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 conferred hereby 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) 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 consider necessary or expedient to deal with fractional entitlements or
legal or practical difficulties under the laws of any territory or the requirements of any regulatory body or
otherwise; and
10.2 the allotment (otherwise pursuant to sub-paragraph 10.1 above) of equity securities up to an aggregate
nominal amount of £22,650 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 such offer or agreement as if the power conferred by this Resolution had not expired.
By order of the Board
Julie Hale
Group Finance Director and Company Secretary
[13] September 2006
Mowbray House
Mowbray Square
Harrogate
HG1 5AU 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 11 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, 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
5.00 p.m. on 16 October 2006 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 18 October 2006 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.
Broker Network Holdings plc, Directors’ Report & Consolidated Financial Statements, 30th April 2006
39 Mowbray House, Mowbray Square, Harrogate, North Yorkshire HG1 5AU
Tel: 01423 877800   Fax: 01423 877811
Email: enquiries@brokernetwork.co.uk  Website: www.brokernetwork.co.uk
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