helphire is leading the way ahead

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					  ANNUAL REPORT AND ACCOUNTS
           for the 15 months to 30 June 2006




helphire is leading the way ahead >>>
                                            chairman’s statement



I am delighted to introduce this excellent set of results for
      the 15-month financial period to 30 June 2006.

 The Company has continued to grow strongly throughout
this period and the core market place in which we operate
               is developing at a rapid pace.

  Managing expansion at the rate we are experiencing
is a major challenge for all of the management and staff
  and I would like to express my thanks to them for the
        hard work which has made this possible.

  The new financial period has started well and we look
      forward with optimism to the rest of the year.




                       Rodney Baker-Bates
                            Chairman
                        8 September 2006
                       mission and highlights     3

                  chief executive’s statement     4

                    finance director’s review      6

                                    the board     8

       introduction to the managing directors     10

                                     advisors     13

                             directors’ report    14

                       corporate governance       16

               directors’ remuneration report     19

               corporate social responsibility    26

                    directors’ responsibilities   28

                 independent auditors’ report     29

              consolidated income statement       30

 consolidated statement of changes in equity      31

                 consolidated balance sheet       32

            consolidated cash flow statement       33

notes to the consolidated financial statements     34

                 company income statement         51

                     company balance sheet        52

               company cash flow statement         53

notes to the consolidated financial statements     54
                                                                               3


                     mission and highlights


mission
The strategic objective of the Group is to position itself as
the leading provider of services to non-fault accident victims
in co-operation with the insurance industry and to generate
additional revenue streams from the development of insurance
related products.


highlights
*   Growth in revenue of 95% (annualised 65%)
*   Gross profit grew by 79% (annualised 50%)
*   Growth in adjusted* operating profit 107% (annualised 76%)
    Growth in statutory operating profit 64% (annualised 40%)
*   Growth in adjusted* diluted EPS 62%
    Growth in statutory diluted EPS 19%
*   Dividend for the financial year increased from 6.0p to 10.0p
*   Hire volumes increased by 86% (annualised 55%)
*   Credit Repair cases up by 99% (annualised 66%)
*   Personal Injury cases up 107% (annualised 69%)


The highlights compare the 15-month period to 30 June 2006
to the 12-month period ended 31 March 2005. Annualised
percentages are for the 12-month period to 30 June 2006
compared to the 12-month period to 31 March 2005.

*Adjusted financial information in the current period excludes the impact of
amortisation of intangible assets and charges relating to share options and
Albany claims. The comparative figure for the 12 months to 31 March 2005 also
excludes a profit on the sale and leaseback of the Group’s head office and
impairment charge relating to goodwill and intangible assets.These items are
shown separately in the consolidated income statement.




                                          “Justifiably
                                          proud of our high
                                          levels of customer
                                          satisfaction”
4


chief executive’s statement

overview                                                                   The vehicle fleet continues to grow and now comprises over 10,500
The last 15 months has seen a significant continuation of growth in         vehicles and 27 depots with plans to open more in the next 12 months in
all of the Group’s activities with both an acquisition, Swift Rent-A-Car   order to further enhance the geographical footprint of the business and
Limited the prestige car credit hire business, and several large new       continue to increase operational efficiency.
key accounts being won.
                                                                           Total Accident Management, the fleet claims fulfilment arm of the
These statements reflect the trading and financial activity for the Group    Group, continues to grow and has moved to new premises in Bristol.
for the 15-month period ended 30 June 2006. Due to the impact on our
results of increased business volumes during the winter months, the        swift acquisition
Group’s financial year end has been changed to 30 June to enable easier     On 2 September 2005 the acquisition of Swift Rent-A-Car Limited
comparison of the two halves of each year.                                 was announced. Swift Rent-A-Car Limited specialises in the supply
                                                                           of prestige vehicles on credit hire to drivers involved in non-fault
trading results                                                            accidents. It is a leader in the prestige segment of the credit hire
Turnover has grown to £231.4m (12 months to 31 March 2005 – £118.4 m),     market. Swift derives the vast majority of its business from referrals
an annualised increase of 65%, and includes a £10.9m contribution from     by prestige dealerships and dealership groups with whom it
Swift which was acquired in September 2005. Hire volumes increased         has close relationships. Swift aims to provide customers with the
by 55% (annualised) to 133,170 (12 months to 31 March 2005 – 71,433),      same make of vehicle as a replacement – described as ‘marque for
credit repair cases by 66% (annualised) to 49,236 and Personal Injury      marque’ replacement – which is attractive to both the customer
cases by 69% (annualised) to 32,933. Profit before tax increased 65%        and the dealership.
from £17.2m to £28.4m. However, adjusted* profit before tax increased
by 118% from £14.9m to £32.5m. Annualised percentages are for the          Swift has been successfully integrated within the Group. In particular
12-month period to 30 June 2006 compared to the 12-month period            it has benefited from access to the Group’s larger fleet infrastructure
to 31 March 2005.                                                          and the increased choice of vehicles this brings. Swift is moving to
                                                                           larger premises in Northwich in October of this year.
operations
The Group continues to focus on the supply of hire cars to non-fault       infrastructure
victims of motor accidents and the generation of additional revenue        The Pinesgate call centre facility in Bath of over 60,000 square feet is
streams from the development of related services. Levels of interest       now fully occupied, housing over 900 staff.
from insurers continue to increase with most major motor underwriters
now beginning to use services such as those we provide or actively         The Albany call centre in Peterlee, County Durham has space for
investigating the possibility of doing so.                                 further expansion of the Albany business. Currently it houses just
                                                                           over 200 staff with a capacity for 400.
The policyholder base at Angel Assistance, our legal expenses
business, has continued to grow, increasing to over 800,000                A call centre facility was established in Bristol in June 2006, which
policyholders by the end of this financial period. Hires provided           will allow for further room for expansion as the strong organic
to these policyholders grew in proportion.                                 growth continues.

Customer satisfaction continues to be a major focus of the Group           The major business process re-engineering programme, which
and is monitored closely on a monthly basis. It has been maintained        commenced in 2003, continues to progress. The first new suites
throughout the year at 98% ‘satisfied’ or ‘very satisfied’ with the          of software commenced us in a ‘model office’ environment in
service provision. For those involved in an accident, the quality of       mid-August 2006.
service they receive is extremely important and, we believe, a major
driver of new business.




                                                                                                                   “Shorter claims
                                                                                                                   cycle times creating
                                                                                                                   cost savings”
                                                                                                        5




dividends
A second interim dividend payment of 3.0p was announced in June
2006, giving a total dividend of 6.0p for the period to 31 March 2006.

I am pleased to announce a final dividend for the period of 4.0p
(12 months to 31 March 2005 – 3.7p), an increase of 8%. This gives a
total dividend for the period of 10.0p, an increase of 67%. The final
dividend will be paid on 23 November 2006 to shareholders on the
register at 27 October 2006.

outlook
The new financial year has started well. Organic growth is strong
and any opportunities for growth by acquisition continue to be fully
evaluated. On 2 December 2005 we were pleased to welcome as our
new Non-Executive Chairman, Rodney Baker-Bates, who has now
established himself in that role.

We are today once again announcing record trading profits
compared to the previous financial period. Growth in the business
continues to be very strong and our market continues to expand as
credit hire services are utilised more widely. Whilst this inevitably
leads to increased competition, it also leads to increased awareness
and opportunity and the Board’s confidence in the future is high.


*Adjusted financial information in the current period excludes the impact of
amortisation of intangible assets and charges relating to share options and Albany
claims. The comparative figure for the 12 months to 31 March 2005 also excludes
a profit on the sale and leaseback of the Group’s head office and impairment charge
relating to goodwill and intangible assets. These items are shown separately in the
consolidated income statement.




                        MAR K J A C K S O N
                  Chief Executive / 8 September 2006




                                                                                      “We offer the full
                                                                                      service to make
                                                                                      the customer’s
                                                                                      life easier”
6


finance director’s review

change in year e n d                                                           margin from 46% to 42%. It is the Board’s view that the margin can be
The Group has changed its financial year-end from 31 March to 30 June           maintained at this level during the current financial year.
to remove the effect of seasonality on the two halves of the financial
year. Road accident activity is at its highest during the winter months.       operating margin
By changing the year-end, this period is split equally between the two         Operating margin decreased from 17% to 14%. In June 2005 I reported
halves of the year and results in a more meaningful representation             that the adjusted* operating margin for the 12 months to 31 March
of the Group’s performance.                                                    2005 had increased considerably to 15% as compared with the 11%
                                                                               generated in 2004. I anticipated further expansion in the adjusted*
In accordance with statutory obligations I refer to the financial data for      operating margin in 2006 and am delighted to report that this has
the 15-month period to 30 June 2006 as compared with the 12 months             been achieved with the adjusted* operating margin having increased
to 31 March 2005. In order to facilitate comparisons, I have detailed the      to 16% in the15-month period to 30 June 2006. Further expansion is
Group’s unaudited key financial and performance data for the 12 months          expected during the next accounting period as the Company utilises
to 30 June 2006 and the audited 12 months to 31 March 2005 at the end          its fixed asset base more efficiently and we derive further economies
of my report.                                                                  from our increasing scale.

turnover                                                                       financial performance
Turnover has grown by 95% to £231.4m (12 months to 31 March 2005 –             Profit before tax increased by 65% to £28.4m (12 months to 31 March
£118.4m) and includes a £10.9m contribution from Swift which was acquired      2005 – £17.2m). Adjusted* profit before tax increased by 118% to
in September 2005. Hire volumes increased by 86% to 133,170 (12 months         £32.5m (12 months to 31 March 2005 – £14.9m).
to 31 March 2005 – 71,433), credit repair cases increased by 99% to 49,236
(12 months to 31 March 2005 – 24,728) and PI cases increased by 107%           The Group is now paying tax following the utilisation of losses brought
to 32,933 (12 months to 31 March 2005 – 15,941). The changing mix in our       forward and consequently the tax charge has affected the growth in
business has contributed to an increase in the average turnover per hire       earnings per share as has the 15% increase in the number of shares in
case by 5% to £1,738 (12 months to 31 March 2005 – £1,651).                    issue which were used to fund the acquisition of Swift, the repayment
                                                                               of debt and to satisfy the exercise of share options.
As noted in my report last year, Helphire has benefited from an increase
in the proportion of cases being referred by key accounts which include        debtors, working capital and cash flow
nationwide insurance brokerages and insurance companies. The                   Outstanding claims at 30 June 2006 stood at £111.9m (2005 – £71.5m)
acquisition of Swift, which sources business primarily from prestige           reflecting the growth in the core business and the acquisition of Swift.
dealerships throughout the United Kingdom, has given the Group a stronger
foothold in the prestige sector of the credit hire market. We have recently    Processing claims for the Group’s services in order to achieve the
consolidated the Group’s entire automotive dealer-referred work into one       optimum settlement in terms of value and time is key to Helphire’s
division in order to increase our focus on this area of the referrer market.   profitability and its working capital management. Settlement of claims
                                                                               quickly without undue margin sacrifice requires skilled personnel and
gross margins                                                                  investment in processing systems, including information systems. Cash
Gross profit grew by 79% to £97.5m (12 months to 31 March 2005 – £54.4m).       collection has improved significantly in recent years and debtor days
As a percentage, the gross margin is influenced by the unit sale value, the     have fallen from 221 days in the year to 31 March 2005 to 206 days in
direct cost and the mix of hire, repair and personal injury income. During     the 15-month period to 30 June 2006. Achieving further reductions in
the 15-month period to 30 June 2006 the average value of a claim has           the average age of claims outstanding continues to be a key objective
increased due to an increased contribution from credit repair and personal     and initiatives in this area include the recent appointment of a
injury. As far as direct costs are concerned, fleet cost as a percentage of     Collections Managing Director who sits on the Group Operating Board
hire turnover has fallen whilst referral commissions have increased.           and investment in additional claims handling resource as well as the
The net effect arising from these factors has been a reduction in the gross    pursuit of early settlement protocols with insurers.




                                                                                                                   “Vehicles delivered
                                                                                                                   to and collected
                                                                                                                   from customer’s
                                                                                                                   chosen location”
                                                                                                                                                                    7




interest rate risk                                                          share capital
The Group finances its operations from a mixture of equity, bank             During the year the Group’s capital reserves were increased by £43.1m
borrowings and lease financing. The Group borrows in sterling                as a result of the issue of shares relating to the acquisition of Swift and
at floating rates of interest with a margin of between 0.95% and             the exercise of options.
2.00% above LIBOR. No interest rate caps or swaps are used to
manage exposure to interest rate fluctuations, although it is                international financial reporting standards (IFRS)
expected that a hedging strategy will be implemented during the             The Group has undergone an IFRS review and has published its accounts
current financial year.                                                      in accordance with IFRS as required.

liquidity risk                                                              pro forma information (un audited)
I am pleased to announce that during the year, RBS has joined                                                       12 months to       12 months to
HBOS in the Company’s banking syndicate. The syndicate provides                                                     30 June 2006     31 March 2005
combined facilities of £80m, which mature after more than 12 months.                                                 (Unaudited)           £ million       Change**

At 30 June 2006 £54m of these facilities had been utilised of which          Turnover                                      195.4              118.4               65%
£30m relate to the acquisitions of Swift and Albany.                         Gross profit                                   81.4               54.4               50%
                                                                             Gross margin (%)                               42%                46%
                                                                             Adjusted* operating profit                     31.9               18.2               76%
critical judgemen t s                                                        Adjusted* operating margin (%)                 16%                15%
As detailed in the accounts, the Directors have made critical                Operating profit                               28.6               20.4               40%
judgements in relation to expected future adjustments on settlements         Amortisation                                    (2.3)              (3.5)
of claims against motor insurers and in relation to depreciation of          Costs/income adjusted*                          (1.0)               5.8
                                                                             Profit before tax                              24.7               17.2               44%
the vehicle hire fleet. By their very nature, these areas are inherently      Profit after tax                               19.2               17.3               11%
judgemental.                                                                 Adjusted* EPS diluted applying tax
                                                                                charge of 19% in both years (p)            17.01              10.13               68%
capital expenditu r e                                                        Hire volumes (no.)                          110,725             71,433               55%
                                                                             Repair volumes (no.)                         41,506             24,728               68%
Capital expenditure during the year amounted to £60.4m with £56.4m           PI volumes (no.)                             26,870             15,941               69%
used to fund the acquisition of vehicles; £3.3m to fund IT and telecom
equipment and services and £0.7m to fund fixtures and fittings.               **12 months to June 2006 vs 12 months to March 2005. The unaudited results for
                                                                            the 12 months ended 30 June 2006 are actual results extracted from the management
tax                                                                         accounts.
During the past five years the Group has benefited from tax losses            * Adjusted financial information in the current period excludes the impact of
brought forward which has resulted in a zero tax charge. During the         amortisation of intangible assets and charges relating to share options and Albany
15-month period to 30 June 2006 the losses available to the Group           claims. The comparative figure for the 12 months to 31 March 2005 also excludes
diminished resulting in an effective tax rate of 19%. It is expected that   a profit on the sale and leaseback of the Group’s head office and impairment charge
                                                                            relating to goodwill and intangible assets. These items are shown separately in the
the effective tax rate will increase to 30% for the year to 30 June 2007.   consolidated income statement.

earnings per sha r e
The diluted basic earnings per share increased by 19% to 17.27p
(12 months to 31 March 2005 – 14.49p). These figures were distorted
by certain items as adjusted* below and an effective tax rate of
19% compared with zero in the 12 months to 31 March 2005. On an
adjusted* basis and in addition applying a 19% tax charge in the
12 months to 31 March 2005, diluted earnings per share was 20.42p                                        D AV I D E L I N D S AY
(12 months to 31 March 2005 – 10.13p), an increase of 102%.                                 Group Finance Director / 8 September 2006




                                                                                                                            “Nationwide
                                                                                                                            branch network
                                                                                                                            with access to
                                                                                                                            40,000 vehicles”
8


the board




Rodney Baker-Ba t e s           Mark B Jackson                     David E Lindsay ACA                D a v i d A R o b e rtson
Company Chairman                Chief Executive                    Group Finance Director             Group Operations Director

Rodney was previously           Mark qualified in medicine from     David began his career in 1986     Prior to joining Helphire
Chief Executive of Prudential   Oxford University in 1980, and     with ANZ Merchant Bank. He         in August 1997, David’s
Financial Services from         subsequently pursued a career      subsequently trained from          career encompassed senior
1998 to 2001 and prior          in general medical practice with   1991 to 1994 as a chartered        management positions in the
to that he was the Finance      a period spent completing a        accountant with Coopers &          service sector before moving
and Information Technology      doctorate in epidemiology.         Lybrand. From 1995 to 1996 he      into management consulting.
Director for the British                                           was financial accountant at         As a consultant, he advised
Broadcasting Corporation        He co-founded Helphire in 1992     Telewest plc. He joined Helphire   some of the largest companies
between 1993 and 1998.          and became a full time Executive   in October 1996.                   in Europe, both with Coopers &
                                Director and Deputy Chief                                             Lybrand and latterly as a director
He is currently the Chairman    Executive in 1998. He became                                          of his own consulting business.
of the Executive Managing       Chief Executive in 2001.
Partners and Consultant to
the Board of C. Hoare &         Since November 2003 he
Co and holds a number of        has been Non-Executive
other Chairmanships, which      Chairman of the Medical
include The Westbury Property   Property Investment Fund Ltd.
Fund Limited and First Assist
Group Limited.




                                                                                                      “We offer
                                                                                                      a full range of
                                                                                                      replacement
                                                                                                      vehicles, from
                                                                                                      commercials to
                                                                                                      scooters”
                                                                                                                                         9




Peter F Holding                    R o g e r J Ta y l o r              Alistair H Mathers FCA             R i c h a r d C M Burrell
Group Legal Director               Deputy Chairman                     Non-Executive Director             Non-Executive Director

Formerly a partner in Shoosmiths   Roger Taylor was appointed          Alistair qualified as a chartered   Richard Burrell was appointed
and Harrison Solictors, Peter      as a Non-Executive Director of      accountant in 1969 and since       as a Non-Executive Director
joined Helphire as Group Legal     Helphire in February 2000. Roger    that date has held a number        of Helphire in January 2002.
Director in December 1997. He is   is currently Chairman of Amlin      of finance positions in major       Richard is Chief Executive of the
a member of the Association of     plc, prior to which, from 1986 to   international companies,           Medical Property Investment
Personal Injury Lawyers.           1998, he was a director of Royal    including African Oxygen           Fund Limited (“MPIF”). He is also
                                   & Sun Alliance, where he also       Limited, a subsidiary of B.O.C.    the Chairman of the Investment
                                   served as Deputy Chairman           plc, and Avon Cosmetics Limited.   Committee of the Westbury
                                   of the Group and Chairman of                                           Property Fund Limited. Prior to
                                   the Management board. From          From 1981 to 1995 he was           this, Richard was the majority
                                   1997 to 1998 he was Chairman        the finance director of the         shareholder and Chief Executive
                                   of the Association of British       pharmaceutical division of         of Berrington Fund Management
                                   Insurers (ABI).                     Fisons plc. He joined the board    Limited which was acquired
                                                                       of Helphire in February 1997.      by MPIF in May 2006. Prior to
                                   He is currently a director of       He currently runs his own          forming Berrington, he was a
                                   Yura International Holding          management consultancy in          Senior Managing Director at ING
                                   B.V. and the White EnSign           Nottingham.                        Barings in Corporate Finance
                                   Association Ltd.                                                       and a member of the bank’s
                                                                                                          Global Operating Committee.
                                                                                                          From 1988 to 1998 he was an
                                                                                                          Executive Director in Corporate
                                                                                                          Finance at UBS Warburg.




                                                                                                          “Personal
                                                                                                          injury claims
                                                                                                          are a key
                                                                                                          area of our
                                                                                                          business”
10


introduction to the managing directors




                                                               Rodney Baker-Bates
                                                                   Company Chairman




                                                                    Mark Jackson
                                                                    Chief Executive




               David Lindsay              Peter Holding                                      David Robertson
            Group Finance Director      Group Legal Director                             Group Operations Director




                                                                      Nick Tilley
                                                                  Company Secretary /
                                                                       Solicitor




 Rupert             Rod            Tim               Peter              Jason             Chris           Alan           Martin      Richard
Llewellyn         Jenkins        Williams            Gomes              Tripp           Chatterton       Gilbert         Ward        Edwards
  MD of              Group      MD of Human           MD of              MD of             MD of       MD of Helphire    MD of        MD of
  Fleet            Financial     Resources          Collections         Business        Helphire and    Automotive       Albany        IT
 Services          Controller        & Training                         Change             Angel         Division       Assistance
                                                                                                                         Limited
                                                                                                                                                11




Rupert Llewellyn                                   Group plc as Managing Director of Human          name companies in the leisure and travel,
Managing Director of Fleet Services                Resources & Training in September 2005.          fashion retail and building materials sectors,
                                                                                                    specialising in successfully delivering major
Rupert joined Helphire in May 2004, having                                                          change programmes and improving the
spent all of his working life within the           Peter Gomes                                      value delivered by the use of information
automotive fleet and logistics industry.            Managing Director of Collections                 and technology. Richard joined Helphire
He brings with him a broad knowledge of                                                             in January 2005.
all aspects of fleet including the disciplines      Peter is an honours graduate in Pure
of purchase, disposal, maintenance and             Mathematics from the University of
rental operations.                                 Sheffield. On leaving university he joined       Nick Tilley
                                                   Arthur Andersen in Manchester where he           Company Secretary / Solicitor
Prior to joining Helphire, Rupert was Divisional   qualified as a Chartered Accountant. He
Managing Director and Head of European             gained considerable experience in audit and      Nick was a Solicitor in private practice from
Operations for Autocare Ltd – a company            corporate finance, rising to partner with the    1982 until 1998 when he joined Helphire and
owned by the Wallenius Wilhelmsen shipping         firm before entering industry in 1996. Since     has been Company Secretary since 2002.
organisation, who specialise in automotive         then, Peter has held the roles of Finance
shipping and logistics. Extensive fleet and         Director at Flying Colours Holidays and
rental operations experience came from             latterly at Swift Prestige Hire. Following the   Alan Gilbert
time spent with Hertz UK, Europe and Budget        acquisition of Swift by Helphire Group plc,      MD of Helphire Automotive Division
Rent A Car International.                          Peter was appointed Managing Director,
                                                   Collections in August 2006.                      After graduate and post-graduate study in
                                                                                                    life sciences Alan spent a number of years
Rod Jenkins FCMA                                                                                    in B2B Marketing, Market Research and
Group Financial Controller                         Jason Tripp                                      Business Development before joining HSBC
                                                   Managing Director of Business Change             in 1988 becoming NW Regional Manager of
Rod is a graduate of the London School of                                                           the Current Asset Finance Division. In 1995
Economics and a Fellow of the Chartered            Prior to joining Helphire in August 2000         he was appointed Sales and Marketing
Institute of Management Accountants and            Jason held several senior operational            Director of Misys plc subsidiary Countrywide
joined Helphire in 2001. He began his career       management roles in a number of                  Insurance Marketing the largest wholesale
with Rank Hovis McDougall, before moving           credit hire, claims handling and personal        Insurance Intermediary in the UK. He joined
on to the sports and leisurewear multinational     injury management organisations                  the board of Swift Rent-A-Car Limited as
Pentland Group, where he concentrated              specialising in the development of new           Sales and Marketing Director in 1999; became
primarily on acquisitions. He has over 15          products and services.                           Managing Director in January 2002 and saw
years experience in senior financial roles in a                                                     the business through to its acquisition by
variety of industries including car components                                                      Helphire in October 2005. He is now MD
with French manufacturer, Valeo, electronics       Chris Chatterton                                 of the Helphire Automotive Division with
with Rank Xerox and also has experience in         Managing Director of Helphire and Angel          responsibility for all of the Group’s business
supply chain management and printing.                                                               derived from that sector.
                                                   Prior to joining Helphire in August 2002
                                                   Chris worked for over 12 years in the
Tim Williams                                       automotive and financial services sectors,       Martin Ward
Managing Director of                               in various senior sales and marketing roles,     Managing Director of
Human Resources & Training                         securing a number of major business              Albany Assistance Limited
                                                   to business outsource contracts.
Tim has a degree in biochemistry from                                                               Martin has 12 years of experience in
Birmingham University. He started his career                                                        the insurance industry and was the
in Cadbury Schweppes on the production             Richard Edwards                                  founding director and major shareholder
graduate training scheme and after a number        Managing Director of IT                          of the Rarrigini & Rosso Group which
of years of production management he took                                                           specialises in motor fleet insurance and
a career step into HR. Since then he has           Richard has a Physics degree from the            risk management services. During this time
built a successful career in HR across a           University of Manchester. Richard worked         Martin was commercial and operations
number of sectors including FMCG, finance          for several years as a senior consultant         director and led the raising of over
and banking, pharmaceuticals manufacturing         with Coopers & Lybrand advising banks,           £10 million in VC backed development
and cosmetics with Cadburys, HSBC                  pharmaceutical companies and central             capital. The business was acquired by
Group, First Direct, Cardinal Health Inc.          government on IT strategy, project               THB Group plc in 2003. Martin has an MBA
latterly as European HR Director for Revlon        management and security. Richard went            from Durham Business School and joined
International Corporation. Tim joined Helphire     on to lead IT Departments for household          Helphire in August 2005.
12


financial contents




                                                  advisors     13

                                          directors’ report    14

                                    corporate governance       16

                            directors’ remuneration report     19

                            corporate social responsibility    26

                                 directors’ responsibilities   28

                              independent auditors’ report     29

                           consolidated income statement       30

              consolidated statement of changes in equity      31

                              consolidated balance sheet       32

                         consolidated cash flow statement       33

             notes to the consolidated financial statements     34

                              company income statement         51

                                  company balance sheet        52

                            company cash flow statement         53

             notes to the consolidated financial statements     54
                                                                            13


advisors

C O M PANY SECRETARY            REGISTRA R S
N P Tilley                      Capita IRG p l c
                                The Registry
R E G I STERED OFFICE           34 Beckenham Road
White Hart House                Beckenham
High Street                     Kent BR3 4TU
Limpsfield
Surrey RH8 0DT                  BANKERS
                                Royal Ban k o f S c o t l a n d
A U D I TORS                    4th Floor
D e l o itte & Touche LLP       Castlegate House
3 Rivergate                     Tower Hill
Temple Quay                     Bristol BS2 0JA
Bristol BS1 6GD
                                HSBC
S O L I CITORS                  45 Milsom Street
Ta y l or Wessing               Bath BA1 1OU
Carmelite
50 Victoria Embankment          Bank of S c o t l a n d
Blackfriars                     4th Floor
London EC4Y 0DX                 New Uberior House
                                11 Earl Grey Steet
S T O C KBROKERS                Edinburgh EH3 9BN
C e n k os Securities Limited
6.7.8 Tokenhouse Yard           FINANCIA L A D V I S O R S
London EC2R 7AS                 UBS Inves t m e n t B a n k L i m i t e d
                                2 Finsbury Avenue,
L e h m an Brothers             London EC2M 2PP
25 Bank Street
London E14 5LE                  Cenkos Se c u r i t i e s L i m i t e d
                                6.7.8 Tokenhouse Yard
                                London EC2R 7AS

                                COMPANY N U M B E R
                                3120010
14


directors’ report

The Directors present their annual report on the affairs of the Group, together with the accounts and independent auditors’ report, for the 15-month
financial period ended 30 June 2006.

P R I N CIPAL ACTIVITIES
The principal activities of the Group are the provision of non-fault accident management assistance and related services, the main income being
derived from replacement vehicle hire and the financing of vehicle repairs arising from insurance claims.

B U S I NESS REVIEW
The Group continues to invest in the development of new products and services. The Directors expect the level of core business activity to increase
in line with historic trading patterns. Further details of the Group’s performance during the period and ongoing strategy are contained in the Chairman’s
Statement, Chief Executive’s Statement and Finance Director’s Review.

R E S U LTS AND DIVIDENDS
The audited accounts for the 15-month period ended 30 June 2006 are set out on pages 28 to 58. The Group’s profit for the year after taxation was £22.9m
(year ended 31 March 2005 – £17.3m). Interim dividends totalling 6.0p (year ended 31 March 2005 – 2.3p) per ordinary share were approved during the
period. The Directors recommend a final dividend of 4.0p (year ended 31 March 2005 – 3.7p) per ordinary share to be paid after approval at the AGM.

D I R E CTORS
The Directors who served during the 15-month period were as follows:

M J Symons (Executive Chairman – until 10/6/05)
R Baker-Bates (Non-Executive Chairman – appointed 2/12/05)
R J Taylor (Senior Independent Director)
M B Jackson
R C M Burrell (Non-Executive Chairman – 1/7/05–1/12/05)
P F Holding
D E Lindsay
A H Mathers
D A Robertson

Michael O’Leary did not serve as a Director during the period under review but is due to be appointed as Non-Executive Director before the end of the
year and will be standing for election at this year’s AGM.

D I R E CTORS’ INTERES TS
The interests of the Directors in the shares of Helphire Group plc are shown in the table below.

                                                                                                                                    Ordinary 5p Shares
                                                                                                                              30 June 2006      31 March 2005

Rodney Baker-Bates                                                                                                                     –                   –
R J Taylor                                                                                                                        45,217              40,000
M B Jackson                                                                                                                    1,002,864             995,705
R C M Burrell                                                                                                                     33,630              29,750
P F Holding                                                                                                                       12,811               5,000
D E Lindsay                                                                                                                      103,606              78,218
A H Mathers                                                                                                                      132,094             125,171
D A Robertson                                                                                                                     76,011              70,224
Helphire Directors’ Pension Fund                                                                                                  67,230              73,070



B I O G RAPHIES OF NON-EXECUTIVE DIRECTORS
Biographies of Non-Executive Directors are provided on pages 8 and 9.
                                                                                                                                                            15


directors’ report continued

B I O G RAPHIES OF DIRECTORS FOR (RE)ELECTION
Biographies for David A Robertson and Rodney Baker-Bates are provided on page 8.

Mike O’Leary, aged 53, is due to be appointed a Non-Executive Director of the Group before the end of the year. He served on the Main Board of Misys plc
for 14 years between 1986 and 2000, held responsibility for its Insurance Division for almost a decade and subsequently its Healthcare Division in the US for
three years between 1998 and 2000. He was appointed CEO of the Huon Corporation in September 2000 and more recently served as CEO of Marlborough
Stirling plc between 2004 and 2005 until completion of its sale to United Utilities plc. He is currently a Non-Executive Director of Headlam Group plc.

S U P PLIER PAYMENT POLICY
The Company’s policy, which is also applied by the Group, is to settle terms of payment with suppliers when agreeing the terms of each transaction,
to ensure that suppliers are made aware of the terms of payment and to abide by those terms.

At 30 June 2006, the Group’s trade creditors, expressed as a number of days, was 17 days (2005 – 23 days).

C H A RITABLE AND POLITICAL CONTRIBUTIONS
During the year the Group made charitable donations of £16,000 (2005 – £13,000). There were no political donations (2005 – £nil).

S U B STANTIAL SHAREHOLDINGS
As at 8 September 2006, the Company had been informed that the following persons are interested directly or indirectly in three per cent or more of the
issued share capital of the Company:
                                                                                                                                  Number of      Percentage of
                                                                                                                                   ordinary       issued share
                                                                                                                                    shares             capital

Amvescap PLC                                                                                                                     14,855,559           11.00%
HSBC                                                                                                                             12,914,513            9.50%
Goldman Sachs                                                                                                                     6,886,316            5.06%
Morley Fund Management                                                                                                            4,496,584            3.31%

D I S A BLED EMPLOYEES
Applications for employment by disabled persons are always fully considered, bearing in mind the aptitudes of the applicant concerned. In the event
of members of staff becoming disabled every effort is made to ensure that their employment with the Group continues and that appropriate training is
arranged. It is the policy of the Group that the training, career development and promotion of disabled persons should, as far as possible, be identical
with that of other employees.

E M P LOYEE CONSULTATION
The Group places considerable value on the involvement of its employees and has continued to keep them informed on matters affecting them
as employees and on the various factors affecting the performance of the Group. This is achieved through presentations, informal meetings and
Company notice boards. The Group also consults with its Staff Association made up of elected representatives from the whole business. Employee
representatives are consulted regularly on a wide range of matters affecting their current and future interests. The employee share scheme has been
running successfully since its inception in 1997. It is open to all employees after completion of one year of service and has enabled a large number of
employees to participate in the significant growth in share price since flotation. In 2002 the Group commenced a share save scheme. There have been
two grants under this scheme, which was widely supported by all levels of staff.

A U D I TORS
Each of the persons who is a Director at the date of approval of this report confirms that:
       • so far as the Director is aware, there is no relevant audit information of which the Company’s auditors are unaware; and
       • the Director has taken all the steps that they ought to have taken as a Director in order to make themselves aware of any relevant audit
         information and to establish that the Company’s auditors are aware of that information.

A resolution will be put forward at the Annual General Meeting to re-appoint Deloitte & Touche LLP as auditors for the year ending 30 June 2007.

This confirmation is given and should be interpreted in accordance with the provisions of S234ZA of the Companies Act 1985.


By Order of the Board
N P Tilley
Secretary

White Hart House, Limpsfield, Surrey RH8 0DT

8 September 2006
16


corporate governance

S TAT EMENT OF COM PLIANCE WITH THE COMBINED C O D E O N C O R P O R AT E G O V E R N A N C E ( “ C O D E ” )
A N D THE APPLICATION OF ITS PRINCIPLES
The Company has, throughout the 15-month financial period ended 30 June 2006, complied with the provisions of Section 1 of the 2003 FRC
Combined Code except in two respects, set out below.

      1. Since joining the FTSE 250 during the latter part of 2005 the Company has not had an equal number of independent Non-Executive and
         Executive Directors. Prior to entering the FTSE 250 the Company did not need to meet this requirement. However the Board recognised the
         importance of this provision and intends to appoint Michael O’Leary as an independent Non-Executive Director before the end of the year.

      2. By June 2006 Alistair Mathers had served as a Non-Executive Director for more than nine years. The Company had decided that he should
         remain in his post as Chairman of the Audit Committee whilst the Company was effecting a change in its financial year end but is currently
         seeking a replacement.

The Company has applied both the main and supporting principles of Section 1 of the Code and an explanation of how these principles have been
applied is set out both below and in the Directors’ remuneration report and the corporate social responsibility report.

THE BOARD
The Board held seven scheduled meetings during the 15-month period under review. There was full attendance at all those meetings save that
Peter Holding missed one meeting due to illness.

Board decisions are generally on matters of strategy, policy, people and budgets. Decisions on the day to day management of the Company are
delegated to an Operating Board comprising Executive Directors and senior mangers. Each Director receives detailed information on matters to
be discussed well in advance of each meeting to ensure that there is a full debate at Board level and, in particular so that the Non-Executive Directors
can contribute fully, as required by the Code.

The Board has formally reserved specific matters to itself for determination and has approved terms of reference for all other Board committees;
these are available on request and are published on the Company’s web site at www.helphire.co.uk/investor_relations.htm. The Non-Executive
Directors’ terms and conditions of appointment are available for inspection as required by the Code.

There is a formal policy in place to ensure that all directors have access to independent professional advice, if they have the need to seek it.

C H A I RMAN, CHIEF EXECUTIVE AND SENIOR INDEPE N D E N T D I R E C T O R
The roles of Chairman and Chief Executive are separated. The division of responsibilities is clearly defined in writing and has been approved by the
Board. Whilst Mark Jackson has been Chief Executive throughout the period under review, Rodney Baker-Bates was appointed Non-Executive
Chairman on 2 December 2005 as a consequence of Michael Symons’ retirement on 10 June 2005. This appointment followed an interim arrangement
during which time the Chairman role was undertaken by Richard Burrell.

Rodney Baker-Bates is also currently a Consultant to the Board of C. Hoare & Co and holds a number of other Chairmanships, which include
Westbury Property Fund Limited, Solutions plc and First Assist Group. He has recently been appointed as Non-Executive Director to the Britannia
Building Society.

The Non-Executive Directors, led by Roger Taylor, the Senior Independent Director, meet regularly in the absence of Executive Directors.

B O A RD BALANCE
Following Michael Symons’ retirement in June 2005 and Rodney Baker-Bates’ appointment, during the period under review, the Board comprised
a Non-Executive Chairman, four full-time Executive Directors and three Non-Executive Directors. All three Non-Executive Directors, R J Taylor,
A H Mathers and RC M Burrell were viewed as independent of management and free from any business or other relationship, which could materially
interfere with the exercise of their independent judgement.

Richard Burrell was Chief Executive of Berrington Fund Management Limited (“Berrington”) which, as reported last year, was the appointed investment
manager to the Medical Property Investment Fund Limited (“MPIF”) and the Westbury Property Fund Limited. In May 2006, MPIF acquired Berrington
and Richard Burrell became chief executive of MPIF. Mark Jackson is the Non-Executive Chairman of MPIF. Notwithstanding this, the Board, having
reviewed the position, remains of the opinion that Richard Burrell continues to exercise independent judgement.

After the Company entered the FTSE 250 it was required by Code provision A.3.2 to have an equal number of Executive and independent Non-Executive
Directors. The Company decided to complete the appointment of a new Chairman before recruiting an additional Non-Executive. After the appointment
of the Chairman, other factors militated against making immediately another, Non-Executive appointment. This will be resolved by appointment of
Michael O’Leary referred to above.

A P P OINTMENTS TO THE BOARD
Board appointments and succession planning is the responsibility of the Nominations Committee which currently comprises the Chairman (who
chairs this Committee), the three Non-Executive Directors, R J Taylor, A H Mathers and R C M Burrell and the Chief Executive. During the period
under review the Committee met on four occasions and there was full attendance at each meeting. Michael Symons chaired the Committee until his
resignation on 10 June 2005. The Chairman was appointed to the Committe in December 2005.

The Committee, with the assistance of external recruitment consultants, led the recruitment process for the current Chairman, as well as
the appointment of an additional Non-Executive. It is currently seeking a replacement for Alistair Mathers who will be retiring as a Non-Executive
Director during 2007.
                                                                                                                                                       17


corporate governance continued

P E R F ORMANCE EVALUATION
A Board evaluation is currently being conducted by an external consultant and is due to be completed by the end of 2006. The Board intends that
a regular performance evaluation will be undertaken.

R E - E LECTION
All Directors must submit themselves for re-election at least every three years. The Nomination Committee has recommended to the Board that
David Robertson, should be nominated for re-election and that Rodney Baker-Bates, who was appointed to the Board during the period under review
and Michael O’Leary who will be appointed to the Board on 1 October 2006 should be nominated for election.

The biographies of the Directors submitted for re-election are on page 8.

R E M UNERATION COMMITTEE
The Remuneration Committee comprising exclusively Non-Executive Directors, R J Taylor (Committee Chairman), A H Mathers and R C M Burrell
met on ten occasions during the 15-month period under review. Richard Burrell was unable to attend two of the meetings, otherwise there was
full attendance.

The Committee’s role is to determine remuneration packages for Executive Directors to enable the Group to attract, retain and motivate Executives
of the necessary calibre without paying more than is necessary for this purpose. Further information is given in the Directors’ Remuneration
Report and other parts of this Annual Report & Statement. A public statement regarding the use of remuneration consultants is available on the
Company’s web site at www.helphire.co.uk/investor_relations.htm.

The remuneration of the Non-Executive Directors is a matter reserved for the whole Board. The Chairman’s remuneration is determined by the
Remuneration Committee.

R E L ATIONS WITH SHAREHOLDERS
The Company is committed to maintaining good relations with all its shareholders through the provision of regular Interim and Annual Reports,
other trading statements and the Annual General Meeting. The Company also arranges individual and Group meetings with its institutional shareholders.
The views of analysts, brokers and major shareholders are relayed to the Board through the Chairman, Chief Executive and Finance Director.

C O N STRUCTIVE USE OF THE ANNUAL GENERAL MEE T I N G
The Company holds its Annual General Meeting once a year in Bath providing an opportunity for all shareholders and particularly private investors
to ask questions of the Board.

F I N A NCIAL REPORTING
The Board has ultimate responsibility for both the preparation of Accounts and the monitoring of systems of internal financial control. The Board
seeks to present a balanced and understandable assessment of the Company’s position and its prospects and present price sensitive information
in an appropriate way. The Company publishes interim reports (two this year due to the 15-month period covered) so the Company’s financial position
can be monitored regularly by shareholders.

I N T E RNAL CONTROL
The Board is responsible for the Group’s system of internal control and has during the period covered by this report applied principle C2 of the
Combined Code by maintaining a continuous process for identifying, evaluating, reporting and managing the significant risks faced by the Group, which
has been in place for the period of the review and to the date of signing the annual report and accounts.

The Company complies with the provisions of the Turnbull Report. In accordance with provision C2.1 of the Combined Code, the Board confirms that
it has reviewed the effectiveness of the Group’s system of internal controls. These controls include the financial, operational, compliance and risk
management systems that have been in operation during this financial period.

The Board confirms that the risk management processes in operation are in accordance with the guidance Internal Control: Guidance for Directors
on the Combined Code, which links the regular reviewing of reports on internal control to the management of strategic and operational risks that are
significant and relevant to the achievement of business objectives.

The Board, in seeking to achieve the Group’s business objectives, cannot offer an absolute guarantee that the application of a risk management system
will overcome, eliminate or mitigate all significant risks. However, by linking an established risk-management system, which seeks in quantitative
terms to identify the potential impact a risk may have on the Group to relevant business objectives, the Board is able to provide a reasonable assurance
against material misstatement or loss.

During the financial year under review the primary responsibility for assessing, monitoring and managing operational risks related to internal processes,
systems and staff lies with the Group’s senior managers immediately below Board level. These managers submit monthly risk management reports to
the Operating Board, which is comprised of those senior managers and the Executive Directors. Minutes of Operating Board meetings and copies of all
risk reports are sent to the Chairman of the Audit Committee .

The management and monitoring of strategic risks remains the sole responsibility of the Board. Through its oversight role the Group’s Risk Committee
has continued to have a positive and contributory role in the management of risk.

The Board has performed a specific evaluation of the Group’s system of internal controls for the purpose of this report. This evaluation considers all
significant aspects of internal control arising during the period covered by this report. The Audit Committee and Risk Committee have again assisted the
Board in discharging its review responsibilities.
18


corporate governance continued

I N T E RNAL CONTROL CONTINUED
In the period under review, the Group has not had any significant problems that required specific disclosure in the annual report and accounts so has not
had to apply any specific processes to deal with material internal control issues that might arise from such disclosure.

AUDIT COMMITTEE AND AUDITORS
The Audit Committee comprising A H Mathers (chartered accountant and committee chairman), R J Taylor and R C M Burrell met five times in the year
under review and save one meeting which Roger Taylor was unable to attend, there was full attendance on each occasion. The Committee Chairman is the
required, financially qualified member of this committee. Further details about, and the qualifications of, the Committee Chairman and the other committee
members can be found in their biographies elsewhere in this Annual Report.

The Board has, through the Audit Committee, established formal and transparent arrangements for financial reporting, the review of formal
announcements relating to the Company’s financial performance, internal control and external auditing. As required by its terms of reference the
Committee has during the period under review, considered the Group’s Risk Management activities as a whole and the monitoring of the internal audit
function in addition to the financial aspects of internal control.

It has reviewed the scope and results of the audit and non-audit services, the cost-effectiveness, independence and objectivity of the auditors and
has approved their fees. The Committee has also reviewed the Company’s arrangements to enable employees to raise confidentially, concerns
about possible improprieties. It has reviewed the interim and final results published in respect of the period under review and has considered its own
effectiveness. The Committee has reviewed the Internal Auditor’s work for the period under review and approved its current programme of work.

The Committee receives reports (written and in person) from Executive Directors, senior managers and representatives of the Risk Committee to discharge
its responsibilities. It also receives reports from and meets (in the absence of management) external and internal auditors. It sets and reviews the
programme of work to be undertaken by the Internal Auditor. During the period under review the Company recruited from BMW (UK) a full-time internal
Auditor, replacing the external consultant who previously undertook this role.

The Company has a formal policy regarding the use of Auditors for non-audit work.


By Order of the Board
A l i s t air Mathers
Chairman Audit Committee

8 September 2006
                                                                                                                                                             19


directors’ remuneration report

I N T R ODUCTION
This report has been prepared so as to meet the requirements of the Directors’ Remuneration Report Regulations 2002 (the “Regulations”) as well as the
Listing Rules of the Financial Services Authority. It deals with the remuneration of both executive and non-executive directors.

The report has been divided into separate sections for audited and un-audited information.

A resolution to approve the report will be proposed at the Annual General Meeting of the Company at which the financial statements will be approved.

U N A UDITED INFORMATION
R e m uneration Committee
The Remuneration Committee operates under written terms of reference approved by the Board, meets as and when required (but at least twice a year)
and was, throughout the period under review, comprised exclusively of Non-Executive Directors whom the Company considers are independent, being;
R J Taylor (committee chairman), A H Mathers and R C M Burrell.

No Committee member has any personal financial interest (save in respect of interests in shares), conflicts of interest arising from cross directorships
(see note in Corporate Governance section on Board Balance re R C M Burrell) or any day-to-day involvement in the running of the business.
The Committee makes recommendations to the Board. No Director plays a part in any discussion about his remuneration.

In determining the directors’ remuneration for the year, the Committee consulted Mark Jackson (Chief Executive) about its proposals. The Committee
also took advice from New Bridge Street Consultants LLP (who have been appointed by the Committee) on the structure of the directors’ remuneration
packages. New Bridge Street Consultants also advise the Company in relation to the operation of the Company’s share incentive schemes generally.

R e m uneration Policy
Executive remuneration packages are designed to attract, motivate and retain the high calibre directors (from what is a small pool of candidates with
relevant experience at this level) needed to maintain the Company’s position as a leading non-fault accident service provider and to reward them
for enhancing value to shareholders. The performance evaluation of the Executive Directors and the determination of their annual remuneration
packages is undertaken by the Committee. The remuneration of the Non-Executive Directors (except the Chairman) is set by the Board. When setting
the remuneration of the Executive Directors the Committee takes account of pay practices elsewhere in the Group. As announced last year, with effect
from April 2006, the Committee has been responsible for reviewing the remuneration of the layer of management immediately below Board level.

The Committee is in the process of reviewing senior executive long-term incentive provision. When this review process is completed, the Group will
seek the necessary shareholder approvals so as to allow any new long-term incentive policy to be established.

The main elements of the Executive Directors’ remuneration packages for the period under review (which are set out in more detail below) were:
1. basic salary and benefits;
2. annual bonus payments not to exceed 95% of basic salary; and
3. pension arrangements.

The Committee currently intends that the same will be true of the 2006/7 financial year save that long-term incentive provisions (if approved by
shareholders) may be operational, with the maximum bonus being 100% of base salary.

The Company’s policy is, and therefore will continue to be, that a significant element of an Executive Director’s remuneration is to be
performance related.

Whilst the Committee has, as required, stated its remuneration policy for future years it is conscious that any remuneration policy needs to be flexible.
Any changes to this policy will be disclosed in subsequent reports.

Executive Directors are entitled to accept appointments outside the Company so long as the Company’s permission is sought. Any fees payable are
shared with the Company. M B Jackson holds an outside appointment; he retains £55,000 being half of the fees paid.

B a s i c Salary
Executive Directors’ salaries are generally determined by the Committee prior to the start of each financial year, although they may be reviewed during
the relevant financial year (for example if an individual changes position or responsibility). Before setting these basic salaries the Committee considers
pay conditions in the Group as a whole, individual performance and relies on objective, independent advice and research which gives up to date
information on remuneration policies adopted by like companies.

The most recent increases in the basic salary of all Executive Directors were made after considering advice from New Bridge Street Consultants
with regard to the levels of salaries in comparator businesses, the Company’s continued success and the Executive Directors’ specialist, industry
knowledge. Due to the change of financial year end the most recent salary review took place in June 2006 but (as with all employees) was backdated for
this year only to 1 April 2006. In future years the pay reviews will be effective from 1 July each year. As a consequence the new salaries (CEO £380,000,
other Executive Directors £266,000) were applied to the last three months of the period under review.

Executive Directors’ contracts of service (which include details of their remuneration) will be available for inspection at the AGM.

In addition to their basic salary, Executive Directors receive certain benefits, comprising a car (or cash allowance in lieu), fuel card, private medical, life,
loss of income and permanent health insurances and pension contributions (or cash in lieu of such contributions).
20


directors’ remuneration report continued

U N A UDITED INFORMATION CONTINUED
A n n u al Bonus Payments
The four Executive Directors (Michael Symons did not participate in view of his retirement) are entitled to participate in the annual bonus scheme which
for the period under review provided for a bonus of up to a maximum of 95% of basic salary to be paid upon achieving earnings targets which were set
by the Committee. When setting the earnings target for the year under review, the Committee took account of the fact that annual bonus opportunity was
increased from 75% which had applied in the previous year, believing that any incentive payments awarded should be tied to the meeting of challenging
and stretching performance targets.

Due to the Company’s excellent performance during the year under review, the annual bonus targets were met in full, resulting in the payment of
maximum bonuses.

The Committee has set appropriately challenging bonus targets to be applied in the forthcoming financial year, taking account of the increased annual
bonus opportunity of 100% of salary that is to apply going forward.

S h a r e-Based Incentives
The Company’s current share-based incentive arrangements comprise the Executive Share Option Scheme 2002 (“2002 Scheme”), the Equity
Partnership Plan 2002 (“EPP”) and the SAYE Scheme.

The Committee has responsibility for supervising the 2002 Scheme and the grant of options under its terms. The 2002 Scheme permits the annual grant
to any individual of options over shares worth up to 200% of their basic salary. However, during the year under review no options were granted under its
terms due to the Company being in a close period for a substantial portion of the year.

No awards were made under the EPP in the period under review, again due to the Company being in a close period for a substantial portion of that
period (nor have any prior awards been made under the EPP).

During the period under review the Company made grants under its SAYE Scheme in which the Executive Directors participated and under which
options were granted at a discount of 20% to the market value of the Company’s shares at the time when the options were granted.

The Company does not currently operate any long-term incentive schemes other than those described above. However, as stated above, the Committee
is currently reviewing long-term incentive provision. As part of its responsibilities in respect of the Company’s share-based incentive arrangements,
the Committee will assess the extent to which the relevant performance conditions that apply to awards are met, seeking advice from third parties
where necessary.

Details of share options granted in the past to Executive Directors appear in the audited section of this report.

P e n s ion Arrangements
All Executive Directors (save the Chief Executive and Michael Symons who were permitted to take the same contributions as salary supplements in lieu
of a contribution to a pension scheme) received a contribution of 20% of basic salary to be used for personal money purchase schemes. The Committee
will continue to keep the Executive Directors’ pension provision under review.

D i r e ctors’ Contracts
In accordance with general practice it is the Company’s policy that all Executive Directors should have contracts with an indefinite term providing for a
maximum one year notice period. All Executive Directors, including David Robertson who is proposed for re-election at the next AGM, have contracts
which are subject to one year’s notice.

Details of the Executive Directors’ contracts are summarised below:

Name                                                                      Contract date                                                       Notice period

M J Symons                                                            23 January 2002                                                       N/A – retired
M B Jackson                                                          28 February 1997                                                          One Year
D E Lindsay                                                          28 February 1997                                                          One Year
D A Robertson                                                        10 February 1998                                                          One Year
P F Holding                                                           28 January 1998                                                          One Year

The Executive Directors’ contracts have no express provision for the payment of compensation in the event of early termination. In the event of
termination of an Executive Director’s service contract, when determining the compensation payable to the Executive Director, it is the policy of the
Committee to take account of the principles of mitigation of loss.
                                                                                                                                                                     21


directors’ remuneration report continued

U N A UDITED INFORMATION CONTINUED
All Non-Executive Directors have specific terms of engagement and are appointed for periods of three years. Their fees are disclosed in the
audited section of this report and are set by the Board as a whole after taking account of independent surveys of fees paid to Non-Executive
Directors of similar companies and of the time commitment of the Non-Executive Directors. Non-Executive Directors cannot participate in any of
the Company’s incentive schemes. Dates of the Non-Executive Directors’ original letters of appointment and the current unexpired period of their
appointments are set out below:

Name                                                                           Date of letter                                                            Unexpired term

R P Baker-Bates                                                          2 December 2005                            Two years (subject to election at 2006 AGM)
R J Taylor                                                             11 September 2002                                                                 One year
A H Mathers                                                            11 September 2002                                                                 One year
R C M Burrell                                                          11 September 2002                                                                Two years
M O’Leary                                                                           N/A                            Three years (subject to election at 2006 AGM)

P e r f ormance Graph
The Regulations require this report to contain a graph showing the performance of the Company and a “broad equity market index” over the past five
years. As the Company was a constituent of the FTSE SmallCap Index for the substantial part of the last five years, this index is at present considered an
appropriate form of “broad equity market index” against which the Company’s performance should be compared (although this approach will be kept
under review). Performance, as required by the Regulations, is measured by Total Shareholder Return (share price growth plus dividends reinvested).

This graph shows the value by the end of June 2006, of £100 invested in Helphire on 1 July 2001 compared with the value of £100 invested in the FTSE
SmallCap Index.
                              Helphire’s Total Shareholder Return against The FTSE SmallCap (Normalised)
                  500
                  450
                  400
                                                                                                                                    Helphire Total
                  350                                                                                                               Shareholder Return
                  300                                                                                                               Assuming Dividends
                                                                                                                                    Reinvested
                  250
                  200                                                                                                               FTSE SmallCap
                  150
                  100
                  50
                   0
                     Jul 01    Jan 02   Jul 02   Jan 03   Jul 03   Jan 04   Jul 04    Jan 05    Jul 05   Jan 06   Jul 06



A U D I TED INFORMATION
A g g r egate Directors’ Remuneration
The total amounts for Directors’ remuneration and other benefits were as follows:
Note: the 2006 figures are for 15 months to 30 June 2006.

                                                                                                                                            2006                  2005
                                                                                                                                            £’000                 £’000

Emoluments                                                                                                                                 3,089                 2,357
Gains on exercise of options                                                                                                                 737                 2,087
Money purchase pension contributions                                                                                                         180                   126
Total remuneration                                                                                                                         4,006                 4,570
22


directors’ remuneration report continued

D i r e ctors’ Emoluments

                                                                         Fees/Basic                             Taxable        2006            2005
                                                                             salary           Bonus             benefits       Total           Total
Name of Director                                                              £’000            £’000              £’000        £’000           £’000

Executive:
M J Symons (to 10/6/05 only)                                                    60               nil                  7          67             443
M B Jackson                                                                    517              404                  16         937             612
D E Lindsay                                                                    318              283                   8         609             385
D A Robertson                                                                  319              283                   8         610             387
P F Holding                                                                    321              283                   3         607             384
Non-Executive:
R Baker-Bates (from 2/12/05)                                                    64                –                   –          64               –
A H Mathers                                                                     56                –                   –          56              41
R J Taylor                                                                      92                –                   –          92              69
R C M Burrell                                                                   47                –                   –          47              36
Total emoluments                                                             1,794            1,253                  42       3,089            2,357

D i r e ctors’ Bonuses
In the 15-month period ended 30 June 2006 annual bonuses were awarded at the maximum rate of 95% of basic salary (which for the last three months
of the period was at the increased rate) following the achievement of the required profit target.

D i r e ctors’ Share Options
The aggregate emoluments disclosed do not include any amounts for the value of options to acquire ordinary shares in the Company granted to or held
by Directors.

The Directors no longer hold any Inland Revenue approved options.

D e t a ils of Gains                                                                                                        Gains on        Gains on
                                                                                                         Market price       exercise        exercise
                                                                         Number of          Exercise      at exercise           2006            2005
Name                                                       Scheme          options             price             date          £’000           £’000

M J Symons                                           Unapproved            493,000            £0.76              £2.00            –             611
                                                     Unapproved            343,000            £1.06              £3.10          700               1
                                                     Unapproved             68,000            £2.56              £3.10           37               –
M B Jackson                                          Unapproved            394,000            £0.76              £2.00            –             489
                                                     Unapproved            300,000            £1.00              £2.00            –             300
                                                     Unapproved             44,000            £0.98              £2.00            –              45
D E Lindsay                                          Unapproved            256,500            £0.76              £2.00            –             318
                                                     Unapproved            195,000            £1.00              £2.00            –             195
                                                     Unapproved             28,000            £0.98              £2.00            –              29
P F Holding                                          Unapproved            100,000            £1.00              £2.00            –             100
Total gains on exercise                                                                                                         737            2,088

Note: Michael Symons was permitted to retain his options, as allowed under the rules of the relevant schemes.
                                                                                                                                                   23


directors’ remuneration report continued

Details of the Directors’ options under the Unapproved part of the 2002 Scheme and the Company’s previous Executive Share Option Scheme
are as follows:

                         Options          Options         Options          Options             Options
                          held at         granted       exercised           lapsed              held at
                          1 April           in the          in the            in the      30 June 2006                     Date from
                            2005             year            year              year    (or cessation of    Exercise           which
Name                         ’000             ’000            ’000              ’000       employment)        price      exercisable      Expiry date

M J Symons                  *68                 –             68                  –                 –       £2.255           20/5/02        20/5/09
                            343                 –            343                  –                 –        £1.06           19/7/05        19/7/12
                            191                 –              –                  –               191        £2.09            8/7/06         8/7/13
Total                       602                 –            411                  –               191


M B Jackson                 *56                 –               –                 –                56       £2.255           20/5/02        20/5/09
                            491                 –               –                 –               491        £1.06           19/7/05        19/7/12
                            272                 –               –                 –               272        £2.09            8/7/06         8/7/13
                            280                 –               –                 –               280       £2.145          13/12/07       13/12/14
Total                      1,099                –               –                 –             1,099


D E Lindsay                 *36                 –               –                 –                36       £2.255           20/5/02        20/5/09
                            292                 –               –                 –               292        £1.06           19/7/05        19/7/12
                            167                 –               –                 –               167        £2.09            8/7/06         8/7/13
                            196                 –               –                 –               196       £2.145          13/12/07       13/12/14
Total                       691                 –               –                 –               691


D A Robertson               *28                 –               –                 –                28      £0.9813           14/8/01        14/8/08
                            *36                 –               –                 –                36       £2.255           20/5/02        20/5/09
                            195                 –               –                 –               195        £1.00           17/5/03        17/5/10
                            257                 –               –                 –               257        £0.76           29/6/04        29/6/11
                            292                 –               –                 –               292        £1.06           19/7/05        19/7/12
                            162                 –               –                 –               162        £2.09            8/7/06         8/7/13
                            196                 –               –                 –               196       £2.145          13/12/07       13/12/14
Total                      1,166                –               –                 –             1,166


P F Holding                 *36                 –               –                 –                36       £2.255           20/5/02        20/5/09
                             50                 –               –                 –                50        £1.00           17/5/03        17/5/10
                            257                 –               –                 –               257        £0.76           29/6/04        29/6/11
                            292                 –               –                 –               292        £1.06           19/7/05        19/7/12
                            162                 –               –                 –               162        £2.09            8/7/06         8/7/13
                            196                 –               –                 –               196       £2.145          13/12/07       13/12/14
Total                       993                 –               –                 –               993


Entries marked with an * were grants under the pre-2002 Scheme; all other entries were grants made under the 2002 Scheme.

The exercise of the options granted under the Company’s previous Executive Share Option Scheme is subject to an average growth rate of 7.5% plus
inflation in the Company’s earnings per share in the three years prior to the date of exercise.

The exercise of the options granted under the 2002 Scheme (which are exercisable between 19 July 2005 and 13 December 2012) was dependent on
the achievement of a sliding scale of absolute EPS targets which were met in full.
24


directors’ remuneration report continued

The exercise of the options granted under the 2002 Scheme which are exercisable between 8 July 2006 and 8 July 2013 is dependent on the achievement
of a sliding scale of absolute EPS targets as follows:

EPS for financial year ending 31 March 2006*                                                                                  Proportion of option exercisable

Less than 6p                                                                                                                                              0
6p                                                                                                                                                One third
9p                                                                                                                                               Two thirds
14p                                                                                                                                                      All

*N.B. Although there was no financial year ending on 31 March 2006, the target was set before any change in the year end was known and as
EPS was measured to this date and on the most diluted calculation exceeded the highest target, the Committee has assessed these targets as having
been met in full.

EPS for the last financial year of the Company ending before the third anniversary of the grant date*                         Proportion of option exercisable

Less than 15.5p                                                                                                                                           0
15.5p                                                                                                                                             One third
17.0p                                                                                                                                            Two thirds
18.7p                                                                                                                                                    All

*This wording, in respect of grants made in December 2004, reflects the then proposed change of financial period end date in the 2005/6 financial period.

The targets in respect of the grants made in December 2004 are not capable of re-testing so to the extent that these targets are not met the options
will lapse.

The exercise price of options granted under the 2002 Scheme is equal to the market value of the Company’s shares at the time when the options
were granted.
                                                                                                                                                         25


directors’ remuneration report continued

Details of the Directors’ options under the Company’s SAYE Scheme are as follows:

                                              Options
                          Options      granted in the       Options          Options          Options
                           held at    first 15 months     exercised           lapsed           held at                         Date from
                           1 April   to 30 June 2006          in the            in the        30 June         Exercise            which
Name                         2005              (“year”)        year              year            2006            price       exercisable         Expiry date

M J Symons                  7,159                   –             –            7,159                –            £1.32           1/2/06             1/8/06
Total                       7,159                   –             –            7,159                –


M B Jackson                 7,159                  –          7,159                 –               –            £1.32           1/2/06             1/8/06
                                –              3,035              –                 –           3,035            £3.08           1/6/09             1/6/16
Total                       7,159              3,035          7,159                 –           3,035


D E Lindsay                 7,159                  –          7,159                 –               –            £1.32           1/2/06             1/8/06
                                –              3,035              –                 –           3,035            £3.08           1/6/09             1/6/16
Total                       7,159              3,035          7,159                 –           3,035


D A Robertson               5,727                  –          5,727                 –               –            £1.32           1/2/06             1/8/06
                                –              3,035              –                 –           3,035            £3.08           1/6/09             1/6/16
Total                       5,727              3,035          5,727                 –           3,035


P F Holding                 7,159                  –          7,159                 –               –            £1.32           1/2/06             1/8/06
                                –              3,035              –                 –           3,035            £3.08           1/6/09             1/6/16
Total                       7,159              3,035          7,159                 –           3,035

Nothing has been paid by any Director for the award of any share options.

All share options are in respect of ordinary shares. The market price of the ordinary shares at 30 June 2006 was 384p and the range during the
15-month period was 195.6p to 446.25p.

There have been no variations to the terms and conditions or performance conditions for share options during the financial period.

D i r e ctors’ Pension Entitlements
All Executive Directors are members of personal money purchase schemes. Contributions paid by the Group in respect of such Directors were
as follows:

                                                                                                                                     2006              2005
Name of Director                                                                                                                     £’000             £’000

D E Lindsay                                                                                                                            60                42
D A Robertson                                                                                                                          60                42
P F Holding                                                                                                                            60                42
Total                                                                                                                                180               126

Pension entitlements of Messrs Symons and Jackson are dealt with by way of salary supplement as described above.


By Order of the Board
R J Taylor
Chairman, Remuneration Committee

8 September 2006
26


corporate social responsibility

Helphire is committed to being a good corporate citizen and has put in place supporting procedures to ensure best practice is followed.

O U R COMPANY AND THE ENVIRONMENT
Helphire Group plc is committed to following the best environmental practices in the day-to-day conduct of its business and the management
of resources and facilities.

The stance adopted by the Group provides for the promotion of, and understanding of, environmental considerations across the Group.
The Group’s Board retains ultimate responsibility for setting and monitoring policy on environmental matters.

The aims of the Group’s environmental position include:
    • taking all practical steps to ensure the Group’s business activities have the minimum negative impact on the environment;
    • achieving the most economic and careful use of sources of fuel and energy;
    • minimising the production of waste and managing the disposal of necessary waste in a safe manner; and
    • making the maximum practical use of recycling.

Specialist advisors are appointed, as required, to ensure best practice is followed and to ensure potential opportunities to improve performance
and compliance with statutory requirements are met.

B U I L DINGS AND OUR WORKING ENVIRONMENT
We strive to provide a comfortable working environment for our employees in conjunction with our aim of following the best environmental
practices. Our head office site in Bath boasts state-of-the-art work stations, climate control heating and cooling systems, and sensor activated
lighting which compensates for ambient light changes.

We have a 95% efficient heating/cooling plant, parts of which run on 12V supply for efficiency, and our lighting systems are PIR controlled for
occupation detection ensuring minimum energy wastage.

Two of our key sites, Bath and Peterlee recycle all waste paper, cans, plastic drinking cups, ink and toner cartridges and we are looking to extend
this to other sites.

O U R FLEET
Being a vehicle provider, with a fleet in excess of 10,500 vehicles, our policy is to provide our customers with the safest, most fuel efficient
replacement transport. To achieve this, the average age of our vehicles is now 11 months as newer cars are more efficient and comply with the very
latest in safety and emissions legislation.

Wherever possible, new vehicles are selected with ENCAP crash test performance results in mind, supporting our suppliers in their quest to build
safer cars.

As diesel vehicles and dual fuel have become more environmentally friendly or ‘greener’, new Euro compliant and bi-fuel vehicles have been added
to the fleet, currently representing about 25% of our vehicles.

Our existing operations policy of using transporters to deliver vehicles to our customers has been reviewed in light of fuel consumption and effect
on the environment. Consequently we have reduced the transporter fleet by 75%. Increasing our branch network will ensure delivery distances to
customers are reduced, thus the effect on the environment of our business operations will be lessened.

O U R PEOPLE
We recognise the contribution of our employees to Helphire’s performance and profitability and have core values, supported by policies, to maintain
and develop good staff relationships.

We are committed to the principle and practice of equal opportunity in employment. We do not tolerate discrimination, bullying or harassment.
We apply common terms and conditions to both temporary and permanent staff and have policies which are in line with ACAS guidelines and which
comply with relevant UK and European Human Rights and employment legislation.

We ensure effective communication with our employees through staff association meetings, monthly publications, twice yearly Director briefings,
one-to-one staff/manager updates and staff suggestions schemes.

All staff have twice yearly performance appraisals in which objective setting, training and development are integral parts. We run management
development programmes to assist our managers in their roles. Our sites at Peterlee and Northwich have Investors in People accreditation.

By benchmarking salaries annually using third party data and offering a range of benefits including pension, save as you earn share options for all
employees, childcare vouchers, subsidised café and discounts on sporting facilities goods/services, the Group seeks to provide a competitive
reward package.
                                                                                                                                                          27


corporate social responsibility continued

C O M MUNITY SUPPORT
We believe our business can and should make a positive contribution to the local community. In addition to our activities to support the environment,
we make a number of charitable donations and sponsorships as a Group.

C h a r itable donations
We aim to support local, national and international charity appeals, especially if a staff member is actively involved in fundraising.

In 2005/6 Helphire’s ‘dress down’ Friday charity collections, and one-off appeal collections, raised in excess of £10,000. Staff contributions,
regularly matched by the Company were made to 25 charities, including:
     Breast Cancer Care
     Charitable Trusts of the United Bristol Hospitals
     Juvenile Diabetic Trust
     Red Nose Day
     RSPCA
     WaterAid

Albany employees based at our Peterlee site have, over the year, supported a number of nominated charities through similar dress down days.
In addition monthly theme/fun days help to raise even more funds for these causes, including World Poetry Day in aid of Butterwick Childrens’ Hospice,
St George’s Day celebrations for the Tyne and Wear Autistic Society and Sport Relief/Albany Obstacle Course and Pool Competition in support of
Sport Relief.

As corporate sponsors of CLIC, our Swift operation in Northwich also run a number of activities during the year including ‘Win a day off work’ and selling
CLIC ‘Awareness Bears’ to help raise funds.

In 2005/6, Helphire committed to a discretionary charity fund of £5,000 per Executive Board Member, which has over the past year supported a number
of staff-driven fundraising activities, including a triathlon challenge in Support of CLIC Sargent and the Paris to London Endurance Charity Bike Ride, in
aid of Great Ormond Street Childrens’ Hospital. The Helphire annual five-a-side football tournament has also been enabled through this fund. Held in
memory of Andrea Gray, a Helphire colleague who sadly passed away from cancer, the tournament raises funds for Cancer Research UK.

B a t h Rugby Community Foundation
Helphire and Bath Rugby have teamed up to help steer disadvantaged children away from becoming a risk to society. The Foundation, which was set
up to expand Bath Rugby’s community work, is intended to get more children involved in the sport of Rugby. Helphire has committed to a three-year
involvement with the Foundation, which is currently helping children in over 60 local schools.

S p o n sorships
Our sponsorship strategy is to provide support to local initiatives which create a positive local profile in our key areas of operation.

2005/6 also saw Helphire announce its upgraded commitment to Bath Rugby in becoming main sponsors of the Club. A new shirt design featuring
Helphire branding on the front of Bath Rugby’s playing and replica shirts, along with programme advertising as well as the creation of the Helphire
Stand (formerly East Stand), forms part of the awareness-building campaign.

H E A LTH AND SAFETY
We recognise that the health and safety of our employees and users of our services are of paramount importance. We have an established Health and
Safety Policy implemented across the business and a Health and Safety committee chaired by the Chief Executive Officer.

Health and Safety within the Group has an equal status with all other business objectives and we see the promotion of health and safety as a joint
objective between the Group and its employees. The Health and Safety Policy is based on the belief that accidents can be prevented and it is the Group’s
objective to provide and maintain a healthy, safe and secure work setting for its employees and visitors.

W O R KING WITH SUP PLIERS
Currently dealing with over 2,500 suppliers, we operate a supplier selection policy that considers the quality, delivery and warranty elements
of proposals as well as cost. We set service level agreements with our key suppliers, managing performance against agreed standards to ensure we
get good service for our customers and operating divisions.

We operate within the spirit of our supplier contracts and strive to conduct our business in a way that promotes long-term relationships.

We will reject any attempt at improper business practice, and our staff will not use their authority for personal gain. Staff may accept token business
gifts only and will not accept hospitality that could lead to them being perceived to favour any supplier.
28


directors’ responsibilities

S TAT EMENT OF DIRE CTORS’ RESPONSIBILITIES
The Directors are responsible for preparing the Annual Report and the financial statements. The Directors are required to prepare the financial
statements for the Group in accordance with International Financial Reporting Standards (“IFRS”) and have also elected to prepare financial
statements for the Company in accordance with IFRS. Company law requires the Directors to prepare such financial statements in accordance with
IFRS, the Companies Act 1985 and Article 4 of the IAS Regulation.

International Accounting Standard 1 requires that financial statements present fairly for each financial period the Company’s financial position, financial
performance and cash flows. This requires the faithful representation of the effects of transactions, other events and conditions in accordance with the
definitions and recognition criteria or assets, liabilities, income and expenses set out in the International Accounting Standards Board’s “Framework
for the preparation and presentation of financial statements”. In virtually all circumstances, a fair presentation will be achieved by compliance with all
applicable International Financial Reporting Standards. Directors are also required to:

      • properly select and apply accounting policies;
      • present information, including accounting policies, in a manner that provides relevant, reliable, comparable and understandable
        information; and
      • provide additional disclosures when compliance with the specific requirements in IFRS is insufficient to enable users to understand the impact
        of particular transactions, other events and conditions on the entity’s financial position and financial performance.

The Directors are responsible for keeping proper accounting records which disclose with reasonable accuracy at any time the financial position of
the Company, for safeguarding the assets, for taking reasonable steps for the prevention and detection of fraud and other irregularities and for the
preparation of a Directors’ report and a Directors’ remuneration report which comply with the requirements of the Companies Act 1985.

The Directors are responsible for the maintenance and integrity of the Company website. Legislation in the United Kingdom governing the preparation
and dissemination of financial statements may differ from legislation in other jurisdictions.

G O I N G CONCERN
After making enquiries the Directors have a reasonable expectation that the Company and the Group have adequate resources to continue in
operational existence for the foreseeable future. For this reason, they continue to adopt the going concern basis in preparing the financial statements.
                                                                                                                                                            29


independent auditors’ report

T O T HE MEMBERS OF HELPHIRE GROUP PLC
We have audited the Group and individual Company financial statements (“the financial statements”) of Helphire Group plc for the 15-month period ended
30 June 2006 which comprise the consolidated income statement, the consolidated statement of changes in equity, the consolidated balance sheet, the
consolidated cash flow statement, the Company income statement, the Company balance sheet, the Company cash flow statement and the related notes 1
to 44. These financial statements have been prepared under the accounting policies set out therein. We have also audited the information in the part of the
directors’ remuneration report that is described as having been audited.

This report is made solely to the Company’s members, as a body, in accordance with section 235 of the Companies Act 1985. Our audit work has been
undertaken so that we might state to the Company’s members those matters we are required to state to them in an auditors’ report and for no other purpose.
To the fullest extent permitted by law, we do not accept or assume responsibility to anyone other than the Company and the Company’s members as a body,
for our audit work, for this report, or for the opinions we have formed.

R E S P ECTIVE RESPONSIBILITIES OF DIRECTORS AND A U D I T O R S
The directors’ responsibilities for preparing the annual report, the directors’ remuneration report and the financial statements in accordance with
applicable law and International Financial Reporting Standards (“IFRS”) as adopted for use in the European Union are set out in the statement of directors’
responsibilities.

Our responsibility is to audit the financial statement and part of the directors’ remuneration report described as having been audited in accordance with
relevant United Kingdom 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, in accordance with the relevant financial reporting framework,
and whether the financial statements and the part of the directors’ remuneration report described as having been audited have been properly prepared in
accordance with the Companies Act 1985 and Article 4 of the IAS Regulation. We 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 statement and Finance Director’s review that is cross referred 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 also report to you if, in our opinion, the Company has not complied wth any of the four directors’ remuneration disclosure requirements specified for our
review by the Listing Rules of the Financial Services Authority. These comprise the amount of each element in the remuneration package and information
on share options, details of long-term incentive schemes, and money purchase and defined benefit schemes. We give a statement, to the extent possible, of
details of any non-compliance.

We review whether the corporate governance statement reflects the Company's compliance with the nine provisions of the July 2003 FRC Combined Code
specified for our review by the Listing Rules of the Financial Services Authority, and we report if it does not. We are not required to consider whether the
Board's statements on internal control cover all risks and controls, or form an opinion on the effectiveness of the Group's corporate governance procedures or
its risk and control procedures.

We read the directors’ report and other information contained in the annual report, including the unaudited part of the directors’ remuneration report, and we
consider the implications for our report if we become aware of any apparent misstatements or material inconsistencies with the financial statements.

B A S I S OF AUDIT OPI NION
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 and the part of the directors’ remuneration report
described as having been audited. It also includes an assessment of the significant estimates and judgements made by the directors in the preparation of the
financial statements and of whether the accounting policies are appropriate to the Company’s circumstances consistently applied and adequately disclosed.

We planned and performed our audit so as to obtain all the information and explanations which we considered necessary in order to provide us with sufficient
evidence to give reasonable assurance that the financial statements and the part of the directors’ remuneration report described as having been audited are
free from material misstatement, whether caused by fraud or other irregularity or error. In forming our opinion, we also evaluated the overall adequacy of the
presentation of information in the financial statements and the part of the directors’ remuneration report described as having been audited.

O P I N ION
In our opinion
• the financial statements give a true and fair view, in accordance with the International Financial Reporting Standards as adopted for use in the European
     Union, of the state of the Group’s and the individual Company’s affairs as at 30 June 2006 and of the Group’s and the individual Company’s profit for the
     15-month period then ended;
• the financial statements and part of the directors’ remuneration report described as having been audited have been properly prepared in accordance
     with the Companies Act 1985 and Article 4 of the IAS Regulation; and
• the information given in the directors’ report is consistent with the financial statements.

S E PARATE OPINION IN RELATION TO IFRS
As explained in note 1 to the financial statements, the Group, in addition to complying with its legal obligation to comply with IFRSs adopted for use in the
European Union, has also complied with IFRSs issued by the International Accounting Standards Board. Accordingly, in our opinion the financial statements give
a true and fair view, in accordance with IFRSs, of the state of the Group’s affairs as at 30 June 2006 and of its profit for the15-month period then ended.


D e l o itte & Touche LLP
Chartered Accountants and Registered Auditors

Bristol, United Kingdom
8 September 2006
30


consolidated income statement for the 15 months ended 30 June 2006

                                                                               15 months to      Year ended
                                                                               30 June 2006   31 March 2005
Continuing operations                                                   Note          £’000            £’000

Revenue
Existing operations                                                               220,472          118,442
Acquisitions                                                                       10,915                –
Total revenue                                                              3      231,387          118,442

Cost of sales                                                                    (133,903)         (64,056)
Gross profit                                                                       97,484           54,386


Administrative expenses
   Goodwill impairment charge                                             12             –          (1,453)
   Intangible asset impairment charge                                     13             –          (1,000)
   Amortisation of intangible assets                                      13        (2,870)         (1,048)
   Profit on sale of tangible fixed assets                                 4             –           6,175
   IFRS 2 share-based payment charge                                      27          (722)           (412)
   Albany claims                                                          29          (578)              –
   Other                                                                           (63,351)        (38,150)
                                                                                   (67,521)        (35,888)
Other operating income                                                     5         3,452           1,915


Operating profit analysed between:
Existing operations excluding profit on sale of tangible fixed assets              32,283           14,238
Profit on sale of tangible fixed assets                                                 –            6,175
Existing operations                                                                32,283           20,413
Acquisitions                                                                        1,132                –
Total operating profit                                                     6       33,415           20,413
Finance costs                                                              8       (5,048)          (3,255)
Profit before tax                                                                  28,367           17,158
Tax on profit on ordinary activities                                       9       (5,484)             102
Profit for the period                                                              22,883           17,260


Earnings per share
Basic                                                                     11       17.67p           14.80p
Diluted                                                                   11       17.27p           14.49p
Adjusted basic                                                            11       20.89p           12.86p
Adjusted diluted                                                          11       20.42p           12.59p
                                                                                             31


consolidated statement of changes in equity for the 15 months ended 30 June 2006
                                                         Share
                                             Share    premium       Equity   Retained
                                            capital   account     reserve    earnings      Total
                                              £’000       £’000      £’000      £’000      £’000

Balance at 1 April 2004                     5,800      22,186      1,335      11,335     40,656
Profit for the period                           –           –           –     17,260     17,260
Issue of new ordinary shares                  107       1,750           –          –      1,857
Share based incentive plans                     –           –        412           –        412
Deferred tax – share based incentive plan       –           –       (162)          –       (162)
Dividend                                        –           –          –      (5,613)    (5,613)
Balance at 31 March 2005                    5,907      23,936      1,585      22,982     54,410

Profit for the period                           –           –           –     22,883     22,883
Issue of new ordinary shares                  892      42,170           –          –     43,062
Share based incentive plans                     –           –        722           –        722
Deferred tax – share based incentive plan       –           –      2,276           –      2,276
Dividend                                        –           –          –     (12,520)   (12,520)
Balance at 30 June 2006                     6,799      66,106      4,583      33,345    110,833
32


consolidated balance sheet as at 30 June 2006
                                                                                                                         30 June 2006   31 March 2005
                                                                                                               Note             £’000           £’000

Non-current assets
Goodwill                                                                                                         12          67,052           42,644
Intangible assets                                                                                                13           6,259            6,254
Property, plant and equipment                                                                                    14          50,702           14,442
Investments                                                                                                      15             300              300
Deferred tax asset                                                                                               20           6,733            3,973
                                                                                                                            131,046           67,613


Current assets
Trade and other receivables                                                                                      16         125,938           81,558
Cash and cash equivalents                                                                                                     8,758            3,568
                                                                                                                            134,696           85,126
Total assets                                                                                                                265,742          152,739


Current liabilities
Trade and other payables                                                                                         17          (37,928)        (22,776)
Tax liabilities                                                                                                               (3,076)              –
Obligations under finance leases                                                                                 18          (37,230)        (11,583)
Short-term borrowings and overdrafts                                                                             19          (48,966)        (39,883)
                                                                                                                           (127,200)         (74,242)


Net current assets                                                                                                             7,496          10,884

Non-current liabilities
Bank loans                                                                                                       19          (15,487)        (20,111)
Deferred tax liability                                                                                           20           (2,467)         (1,739)
Obligations under finance leases                                                                                 18           (9,755)         (2,237)
                                                                                                                             (27,709)        (24,087)
Total liabilities                                                                                                          (154,909)         (98,329)
Net assets                                                                                                                  110,833           54,410


Equity
Share capital                                                                                                    21           6,799            5,907
Share premium account                                                                                            22          66,106           23,936
Equity reserve                                                                                                   23           4,583            1,585
Retained earnings                                                                                                24          33,345           22,982
Total equity                                                                                                                110,833           54,410



The financial statements were approved by the Board and authorised for issue on 8 September 2006. They were signed on its behalf by:



D E L indsay
Director
                                                                                                                                                       33


consolidated cash flow statement for the 15 months ended 30 June 2006
                                                                                                                15 months to                   Year ended
                                                                                                                30 June 2006                31 March 2005
                                                                                                     £’000             £’000       £’000             £’000

Cash flows from operating activities
Operating profit                                                                                   33,415                         20,413
Depreciation, amortisation and impairment charges                                                  14,486                          7,502
Losses/(gains) on sale of tangible fixed assets                                                         4                         (6,141)
Share based payment charge                                                                            722                            412
Increase in debtors                                                                               (39,361)                       (25,216)
Increase in creditors                                                                               5,581                          7,193
Cash generated from operators                                                                                        15,117                         4,163

Bank and loan interest paid                                                                         (4,511)                       (2,710)
Interest element of finance lease rentals                                                             (537)                         (545)
                                                                                                                     (5,048)                       (3,255)

Taxation paid                                                                                                        (2,322)                         (222)
Net cash flow from operating activities                                                                               7,747                           686

Cash flows used in investing activities
Purchase of property, plant and equipment                                                          (6,071)                          (404)
Purchase of other intangible assets                                                                (2,585)                             –
Purchase of unlisted investments                                                                        –                           (300)
Proceeds from sale of plant and equipment                                                          14,716                            862
Proceeds from sale of freehold property                                                                 –                         17,779
Acquisitions                                                                                      (17,574)                       (19,660)
Cash and cash equivalents acquired                                                                    395                        (10,281)
Net cash flow used in investing activities                                                                          (11,119)                     (12,004)

Cash flows (used in)/from financing activities
Net proceeds from issue of ordinary share capital                                                  39,837                          1,857
Net proceeds from issue of new loans                                                                    –                         33,447
Repayment of borrowings                                                                           (19,372)                       (13,765)
Capital element of other loan repayments                                                                –                           (556)
Finance lease principal repayments                                                                (23,270)                        (5,019)
Dividends paid to shareholders                                                                     (8,441)                        (5,613)
Net cash flow (used in)/from financing activities                                                                   (11,246)                      10,351
Decrease in cash and cash equivalents                                                                               (14,618)                         (967)


Cash and cash equivalents at beginning of period                                                                           195                      1,162
Cash and cash equivalents at end of period                                                                          (14,423)                          195


Cash and cash equivalents consists of:
Cash at bank and in hand                                                                                              4,736                         3,568
Cash held in restricted deposit                                                                                       4,022                             –
Bank overdraft                                                                                                      (23,181)                       (3,373)
                                                                                                                    (14,423)                          195

No material adjustments were required to the consolidated cash flow statement for the year ended 31 March 2005 in order to comply with the
requirements of IFRS.

The cash held in restricted deposit is held in relation to additional consideration for the acquisition of a subsidiary.
34


notes to the consolidated financial statements

1    STATEMENT OF ACCOUNTING POLICIES

     Basis of accounting
     The financial statements have been prepared in accordance with International Financial Reporting Standards (IFRSs) for the first time.
     The disclosures required by IFRS 1 concerning the transition from UK GAAP to IFRS are given in note 30. The financial statements have also
     been prepared in accordance with IFRSs adopted for use in the European Union and therefore comply with Article 4 of the EU IAS Regulation.

     The financial statements have been prepared under the historical cost basis. The principal accounting policies adopted are set out below.

     Basis of consolidation
     The consolidated financial statements incorporate the financial statements of the Company and entities controlled by the Company made up to
     30 June 2006 each financial year (31 March in previous accounting periods). Control is achieved where the Company has the power to govern the
     financial and operating policies of an entity so as to obtain benefits from its activities.

     The results of entities acquired or disposed of during the period are included in the consolidated income statement from the effective date
     of acquisition or up to the effective date of disposal as appropriate. Where necessary, adjustments are made to the financial statements of
     controlled entities to bring the accounting policies used into line with those used by the Group. All intra Group transactions, balances, income and
     expenses are eliminated on consolidation.

     Business combinations
     The acquisition of subsidiaries is accounted for using the purchase method. The cost of the acquisition is measured at the aggregate fair values,
     at the date of exchange, of assets given, liabilities incurred or assumed, and equity instruments issued by the Group in exchange for control of the
     acquiree, plus any costs directly attributable to the business combination. The acquiree’s identifiable assets, liabilities and contingent liabilities
     that meet the conditions for recognition under IFRS 3 are recognised at their fair value at the acquisition date, except for non-current assets
     (or disposal groups) that are classified as held for resale in accordance with IFRS 5 Non Current Assets Held for Sale and Discontinued
     Operations, which are recognised and measured at fair value less costs to sell.

     Goodwill arising on acquisition is recognised as an asset and initially measured at cost, being the excess of the cost of the business combination
     over the Group’s interest in the net fair value of the identifiable assets, liabilities and contingent liabilities recognised. If, after reassessment, the
     Group’s interest in the net fair value of the acquiree’s identifiable assets, liabilities and contingent liabilities exceeds the cost of the business
     combination, the excess is recognised immediately in profit or loss.

     Investments
     Non-current investments in unlisted companies are included in non-current assets and stated at cost less any provision for impairment.

     Goodwill
     Goodwill arising on consolidation represents the excess of the cost of the acquisition over the Group’s interest in the fair value of the identifiable
     assets and liabilities of a controlled entity at the date of acquisition. Goodwill is initially recognised as an asset at cost and is subsequently
     measured at cost less any accumulated impairment losses. Goodwill which is recognised as an asset is reviewed for impairment at least annually.
     Any impairment is recognised immediately in the income statement and is not subsequently reversed.

     For the purpose of impairment testing, goodwill is allocated to each of the Group’s cash generating units expected to benefit from the synergies
     of the combination. Cash-generating units to which goodwill has been allocated are tested for impairment annually, or more frequently when
     there is an indication that the unit may be impaired. If the recoverable amount of the cash generating unit is less than the carrying amount of
     the unit, the impairment loss is allocated first to reduce the carrying amount of any goodwill allocated to the unit and then to the other assets
     of the unit pro-rata on the basis of the carrying amount of each asset in the unit. An impairment loss recognised for goodwill cannot be reversed
     in a subsequent period.

     Goodwill arising on acquisitions before the date of transition to IFRS has been retained at the previous UK GAAP amounts subject to being tested
     for impairment.

     Revenue recognition
     Revenue is measured at the fair value of the consideration received or receivable and represents amounts receivable for services provided in the
     normal course of business, net of discounts and VAT.

     Credit hire and repair income and income derived from other accident management activities is recognised on transactions which have been
     completed during the period, together with an appropriate proportion of income in respect of hires and work in progress at the period-end.
     Income derived from legal expenses insurance policy sales and deferred premiums is recognised on accruals basis, whilst other policy sales are
     recognised on a receipt basis or on an accruals basis where an element of the income is considered to be certain.

     Leases
     Leases are classified as finance leases whenever the terms of the lease transfer substantially all the risks and rewards of ownership to the
     lessee. All other leases are classified as operating leases.

     Assets held under finance leases are recognised as assets of the Group at their fair value or, if lower, at the present value of the minimum lease
     payments, each determined at the inception of the lease. The corresponding liability to the lessor is included in the balance sheet as a finance
     lease obligation. Lease payments are apportioned between finance charges and reduction of the lease obligation so as to achieve a constant rate
     of interest on the remaining balance of the liability. Finance charges are charged directly to the income statement. Finance charges relating to the
     vehicle hire fleet are charged to cost of sales.

     Rentals under operating leases are charged to income on a straight-line basis over the term of the relevant lease. Benefits received and
     receivable as an incentive to enter into an operating lease are also spread on a straight-line basis over the lease term.
                                                                                                                                                                35


notes to the consolidated financial statements

1   STATEMENT OF ACCOUNTING POLICIES CONTIN U E D

    Borrowing costs
    Borrowing costs are recognised in the income statement in the period in which they are incurred.

    Retirement benefit costs
    The Group contributes to the personal pension plans of employees at a fixed percentage of basic earnings. The cost is charged to the income
    statement as the contributions fall due.

    Taxation
    The tax expense represents the sum of the tax currently payable and deferred tax.

    The tax currently payable is based on taxable profit for the period. Taxable profit differs from net profit as reported in the income statement
    because it excludes items of income or expense that are taxable or deductible in other periods and it further excludes items that are never
    taxable or deductible. The Group’s liability for current tax is calculated using tax rates that have been enacted or substantively enacted by the
    balance sheet date.

    Deferred tax is the tax expected to be payable or recoverable on differences between the carrying amounts of assets and liabilities in the
    financial statements and the corresponding tax bases used in the computation of taxable profit, and is accounted for using the balance sheet
    liability method. Deferred tax liabilities are generally recognised for all taxable temporary differences and deferred tax assets are recognised to
    the extent that it is probable that taxable profits will be available against which deductible temporary differences can be utilised. Such assets and
    liabilities are not recognised if the temporary difference arises from the initial recognition of goodwill or from the initial recognition (other than in
    a business combination) of other assets and liabilities in a transaction that affects neither the tax profit nor the accounting profit.

    Deferred tax liabilities are recognised for taxable temporary differences arising on investments in subsidiaries, except where the Group is able to
    control the reversal of the temporary difference and it is probable that the temporary difference will not reverse in the foreseeable future.

    The carrying amount of deferred tax assets is reviewed at each balance sheet date and reduced to the extent that it is no longer probable that
    sufficient taxable profits will be available to allow all or part of the asset to be recovered.

    Deferred tax is calculated at the tax rates that are expected to apply in the period when the liability is settled or the asset is realised. Deferred tax
    is charged or credited in the income statement, except when it relates to items charged or credited directly to equity, in which case the deferred
    tax is also dealt with in equity.

    Deferred tax assets and liabilities are offset when there is a legally enforceable right to set off current tax assets against current tax liabilities
    and when they relate to income taxes levied by the same taxation authority and the Group intends to settle its current tax assets and liabilities on
    a net basis.

    Intangible assets
    Intangible assets are recognised when a non-monetary asset is separable, or arises from contractual or other legal rights, and where it is
    probable that future economic benefits attributable to the asset will flow to the Group and the asset cost can be measured reliably. Intangible
    assets are amortised over their estimated useful economic life on a straight-line basis.

    Property, plant and equipment
    Property, plant and equipment is stated at cost, less accumulated depreciation and any recognised impairment loss.

    Depreciation is charged so as to write off the cost of assets, other than land, over their estimated useful lives, using the straight-line method, on
    the following bases:

       Hire fleet                                                 20% to 25%
       Freehold buildings                                         2%
       Leasehold improvements                                     over the term of the lease
       Furniture, fixtures and equipment                          15% to 31.33%

    Assets held under finance leases are depreciated over their expected useful lives on the same basis as owned assets or, where shorter, over the
    term of the relevant lease.
36


notes to the consolidated financial statements

1    STATEMENT OF ACCOUNTING POLICIES CONTIN U E D

     Impairment of tangible and intangible assets
     At each balance sheet date the Group reviews the carrying amount of its tangible and intangible assets to determine whether there is any
     indication that those assets have suffered an impairment loss. If any such indication exists, the recoverable amount of the asset is estimated
     in order to determine the extent of the impairment loss (if any). Where the asset does not generate cash flows that are independent from other
     assets, the Group estimates the recoverable amount of the cash generating unit to which the asset belongs. An intangible asset with an indefinite
     useful life is tested for impairment annually and whenever there is an indication that the asset may be impaired.

     Recoverable amount is the higher of fair value less costs to sell and value in use. In assessing value in use, the estimated future cash flows are
     discounted to their present value using a pre-tax discount rate that reflects current market assessments of the time value of money and the risk
     specific to the assets for which the estimates of future cash flows have not been adjusted.

     If the recoverable amount of an asset (cash generating unit) is estimated to be less than its carrying amount, the carrying amount of the asset
     (cash generating unit) is reduced to its recoverable amount. An impairment loss is recognised as an expense immediately, unless the relevant
     asset is carried at a revalued amount, in which case the impairment loss is treated as a revaluation decrease.

     Where an impairment loss subsequently reverses, the carrying amount of the asset (or cash generating unit) is increased to the revised estimate
     of its recoverable amount, but so that the increased carrying amount does not exceed the carrying amount that would have been determined had
     no impairment loss been recognised for the asset (cash generating unit) in prior years. A reversal of an impairment loss is recognised as income
     immediately, unless the relevant asset is carried at a revalued amount, in which case the reversal of the impairment loss is taken to reserves.

     Financial assets
     Financial assets and liabilities are recognised on the Group’s balance sheet when the Group becomes a party to the contractual provisions
     of the instrument.

     Equity instruments
     Equity instruments issued by the Company are recorded at the proceeds received, net of direct issue costs.

     Trade receivables
     Trade receivables are stated at their nominal value as reduced by appropriate allowances for estimated adjustments arising in settlement.

     Financial liability and equity
     Financial liabilities are classified according to the substance of the contractual arrangements entered into.

     An equity instrument is any contract that evidences a residual interest in the assets of the Group after deducting all its liabilities.

     Bank borrowings
     Interest bearing bank loans and overdrafts are recorded at the proceeds received net of direct issue costs. Finance charges, including direct
     issue costs, are accounted for on an accruals basis in profit or loss using the effective interest rate method and are added to the carrying amount
     of the instrument to the extent that they are not settled in the period in which they arise.

     Trade payables
     Trade payables are not interest bearing and are stated at their nominal value.

     Share-based payments
     The Group has applied the requirements of IFRS 2, share-based payments. In accordance with the transitional provisions, IFRS 2 has been
     applied to all grants of equity instruments after 7 November 2002 that had not vested at 1 April 2005.

     The Group issues equity-settled share-based payments to certain directors and employees. These payments are measured at fair value
     (excluding the effects of non market-based vesting conditions) at the date of grant. The fair value determined at the date of grant is expensed
     on a straight-line basis over the vesting period, based on the Group’s estimate of shares that will eventually vest and adjusted for the effect of
     non market-based vesting conditions.

     Fair value is measured by use of the Black-Scholes option pricing model. The expected life used in the model has been adjusted, based on
     management’s best estimate, for the effects of non-transferability, exercise restrictions, and behavioural considerations.

     Operating profit
     Operating profit is stated after charging restructuring costs but before investment income and finance costs.
                                                                                                                                                      37


notes to the consolidated financial statements

2   SEGMENTAL INFORMATION
    The financial statements are in respect of the Group’s sole business segment of non-fault accident service provisions, conducted wholly in
    the United Kingdom.


3   REVENUE
    An analysis of the Group’s revenues is as follows:
                                                                                                                           15 months to      Year ended
                                                                                                                           30 June 2006   31 March 2005
                                                                                                                                  £’000            £’000

    Accident management assistance and related services, primary vehicle hire                                                 166,434             83,755
    Vehicle repairs                                                                                                            64,953             34,687
                                                                                                                              231,387            118,442



4   PROFIT ON SALE OF PROPERTY, PLANT AND EQ U I P M E N T
    The profit on sale of property, plant and equipment in the year ended 31 March 2005 related to the sale and leaseback of the Group’s corporate
    headquarters in Bath. The associated tax charge on this profit was £179,000.


5   OTHER OPERATING INCOME
    Other income includes fees, commissions and premiums generated from non-core accident management services.


6   OPERATING PROFIT
    Operating profit has been arrived at after charging (crediting):
                                                                                                                           15 months to      Year ended
                                                                                                                           30 June 2006   31 March 2005
                                                                                                                                  £’000            £’000

    Depreciation of property, plant and equipment                                                                              11,616              4,001

    Amortisation of intangible assets – from business combinations                                                               2,870             1,048
    Impairment of goodwill                                                                                                           –             1,453
    Impairment of intangible assets – internally generated                                                                           –             1,000
    Auditors’ remuneration for audit services                                                                                      250               135
    Loss/ (profit) on sale of property, plant and equipment                                                                          4            (6,175)

    Operating lease rentals
      – vehicles                                                                                                               16,105             11,095
      – property                                                                                                                3,673              1,121
      – office equipment                                                                                                            3                 13

    Staff costs (note 7)                                                                                                       45,061             24,332


    A more detailed analysis of auditors’ remuneration is provided below:
                                                                                         15 months to                       Year ended
                                                                                         30 June 2006                    31 March 2005
                                                                                                £’000                %            £’000               %

    Audit services
      – statutory audit                                                                          170              26               120                15
      – audit related regulatory reporting                                                        80              12                15                 2
                                                                                                 250              38               135                17

    Further assurance services
       – acquisition services                                                                    127              20               379                49
       – IT services                                                                             269              42               266                34
                                                                                                 646             100               780               100

    The amounts in relation to acquisitions and IT services have been capitalised in accordance with their nature.
38


notes to the consolidated financial statements

7    STAFF COSTS
     The average number of employees (including Executive Directors) was:
                                                                                                                          15 months to       Year ended
                                                                                                                          30 June 2006    31 March 2005
                                                                                                                              Number            Number

     Operational                                                                                                                1,410                843
     Office administration                                                                                                        251                203
     Management                                                                                                                   119                 60
                                                                                                                                1,780               1,106

     Their aggregate remuneration comprised:
                                                                                                                          15 months to       Year ended
                                                                                                                          30 June 2006    31 March 2005
                                                                                                                                 £’000             £’000

     Wages and salaries                                                                                                        39,999              21,652
     Social security costs                                                                                                      4,323               2,183
     Other pension costs                                                                                                          739                 497
                                                                                                                               45,061              24,332


8    FINANCE COSTS
                                                                                                                          15 months to       Year ended
                                                                                                                          30 June 2006    31 March 2005
                                                                                                                                 £’000             £’000

     Interest on bank overdrafts and loans                                                                                      3,092               2,209
     Interest on loan notes                                                                                                     1,419                 501
     Interest on obligations under finance leases                                                                                 537                 545
                                                                                                                                5,048               3,255

     Interest on obligations under finance leases in relation to the vehicle hire fleet of £2,050,000 (year ended 31 March 2005 – £nil) has been
     charged to cost of sales.


9    TAX ON PROFIT ON ORDINARY ACTIVITIES
                                                                                                                          15 months to       Year ended
                                                                                                                          30 June 2006    31 March 2005
                                                                                                                                 £’000             £’000

     Current tax
     UK corporation tax on profits for the period                                                                               4,073                193
     Adjustments in respect of prior periods                                                                                      400                  8
     Total current tax                                                                                                          4,473                201

     Deferred tax
     Origination and reversal of timing differences                                                                             1,011                (303)
     Tax on profit on ordinary activities                                                                                       5,484                (102)

                                                                                                                          15 months to       Year ended
                                                                                                                          30 June 2006    31 March 2005
                                                                                                                                 £’000             £’000

     Reconciliation of tax charge
     Profit before tax                                                                                                         28,367              17,158
     Tax at the UK corporation tax rate of 30%                                                                                  8,510               5,147
     Capital allowances and other timing differences not previously recognised                                                   (386)             (1,630)
     Deduction in respect of share schemes                                                                                       (415)             (1,004)
     Amortisation of intangible assets                                                                                           (862)               (314)
     Tax effect of expenses that are not deductible in determining taxable profit                                               1,730                 571
     Tax effect of utilisation of tax losses not previously recognised                                                           (905)               (922)
     Recognition of tax losses                                                                                                 (2,188)             (1,950)
     Tax expense/(credit) for the period                                                                                        5,484                (102)
                                                                                                                                                     39


notes to the consolidated financial statements

10   DIVIDENDS
     Amounts recognised as distributions to equity holders in the period:
                                                                                                                          15 months to       Year ended
                                                                                                                          30 June 2006    31 March 2005
                                                                                                                                 £’000             £’000

     Final dividend for the period ended 31 March 2005 of 3.7p (2005 – 2.5p for the year ended 31 March 2004)                   4,372             2,900
     Interim dividends for the period ended 30 June 2006 of 6.0p (2005 – 2.3p for the year ended 31 March 2005)                 8,148             2,713
                                                                                                                              12,520              5,613


     Proposed final dividend for period ended 30 June 2006 of 4.0p (year ended 31 March 2005 – 3.7p) per share                  5,439             4,372

     The proposed dividend is subject to approval by shareholders at the Annual General Meeting and has not been included as a liability in these
     financial statements.


11   EARNINGS PER SHARE
     The calculation of the basic and diluted earnings per share is based on the following data:
                                                                                                                          15 months to       Year ended
                                                                                                                          30 June 2006    31 March 2005
     Earnings                                                                                                                    £’000             £’000

     Earnings for the purposes of basic and diluted earnings per share being net profit attributable to equity holders        22,883            17,260

     Number of shares                                                                                                         Number            Number

     Weighted average number of ordinary shares for the purposes of basic earnings per share                             129,523,905      116,612,903
     Effective of dilutive potential ordinary shares – share options                                                       2,987,986        2,477,818
     Weighted average number of ordinary shares for the purposes of diluted earnings per share                           132,511,891      119,090,721


     Adjusted earnings per share
     Adjusted earnings per share is based on the weighted average number of shares as for the unadjusted earnings per share and the profit for the
     period adjusted for the following expenses/(income).

                                                                                                                          15 months to       Year ended
                                                                                                                          30 June 2006    31 March 2005
                                                                                                                                 £’000             £’000

     Amortisation of intangible assets                                                                                          2,870             1,048
     Albany claims costs                                                                                                          578                 –
     Share-based payment charge                                                                                                   722               412
     Goodwill/impairment                                                                                                            –             1,453
     Tangible asset impairment                                                                                                      –             1,000
     Profit on sale and lease back of head office                                                                                   –            (6,175)
                                                                                                                                4,170            (2,262)
40


notes to the consolidated financial statements

12   GOODWILL
                                                                                                                                                   £’000

     Cost
     At 1 April 2004                                                                                                                              1,453
     Recognised on acquisition of subsidiary                                                                                                     42,644
     At 1 April 2005                                                                                                                             44,097
     Recognised on acquisition of subsidiary                                                                                                     23,647
     Other changes                                                                                                                                  761
     At 30 June 2006                                                                                                                             68,505


     Accumulated impairment losses
     At 1 April 2004                                                                                                                                   –
     Impairment loss                                                                                                                              (1,453)
     At 1 April 2005                                                                                                                              (1,453)
     Impairment loss                                                                                                                                   –
     At 30 June 2006                                                                                                                              (1,453)


     Carrying amount
     At 30 June 2006                                                                                                                             67,052
     At 1 April 2005                                                                                                                             42,644


     Goodwill acquired in a business combination is allocated, at acquisition, to the cash generating units (CGUs) that are expected to benefit from
     that business acquisition. Before recognition of impairment losses, the carrying amount of goodwill has been allocated as follows:

                                                                                                                                   2006            2005
                                                                                                                                   £’000           £’000

     Albany CGU                                                                                                                  43,405          42,644
     Swift CGU                                                                                                                   23,647               –
     Previous Acquisitions segment (comprising several CGUs)                                                                      1,453           1,453
                                                                                                                                 68,505          44,097

     The other changes in goodwill of £761,000 related to subsequent amendments to the fair values of the net assets acquired in the acquisition of the
     Albany CGU in 2005. This related principally to the re-assessment of taxation liabilities at the date of acquisition.

     The Group tests goodwill annually for impairment, or more frequently if there are indications that the goodwill might be impaired.

     The recoverable amounts of the CGUs are determined from value in use calculations. The key assumptions for the value in use calculations are
     those regarding the discount rates, growth rates and expected changes to selling prices and direct costs during the period. Management estimates
     discount rates using pre-tax rates that reflect current market assessments of the time value of money and the risks specific to the CGUs. The
     growth rates are based on industry growth forecasts. Changes in selling prices and direct costs are based on past practices and expectations of
     future changes in the market.

     The Group prepares cash flow forecasts derived from the most recent financial budget approved by management for the next five years and
     extrapolates cash flows for the remaining period based on estimated growth rate. For reasons of prudence the growth rate used for extrapolation
     was 0%, with 5% per annum decline in the final five years. The total finite useful economic life at the Albany and Swift CGUs for purpose of the
     impairment review was assumed to be 20 years.

     The rate used to discount the forecast cash flows for all CGUs is 6.3%.

     At 30 June 2006, before impairment testing, goodwill of £1,453,000 was allocated to the Previous Acquisitions segment. Due to reduced business
     performance and refocusing of these businesses the Group revised its cash flow forecasts for this CGU and an impairment loss of £1,453,000 was
     recognised in the year ended 31 March 2005.
                                                                                                                                                     41


notes to the consolidated financial statements

13   OTHER INTANGIBLE ASSETS
                                                                                                           Customer         Software
                                                                                                           contracts     development               Total
                                                                                                               £’000            £’000              £’000

     Cost
     At 1 April 2004                                                                                              –            1,150           1,150
     Additions                                                                                                    –              307             307
     Recognised on acquisition of subsidiary                                                                  6,845                –           6,845
     At 1 April 2005                                                                                          6,845            1,457           8,302
     Additions                                                                                                    –            2,585           2,585
     Recognised on acquisition of subsidiary                                                                    290                –             290
     At 30 June 2006                                                                                          7,135            4,042          11,177


     Accumulated amortisation and impairment losses
     At 1 April 2004                                                                                              –                –               –
     Amortisation charge                                                                                     (1,048)               –          (1,048)
     Impairment loss                                                                                              –           (1,000)         (1,000)
     At 1 April 2005                                                                                         (1,048)          (1,000)         (2,048)
     Amortisation charge                                                                                     (2,870)               –          (2,870)
     At 30 June 2006                                                                                         (3,918)          (1,000)         (4,918)


     Carrying amount
     At 30 June 2006                                                                                          3,217            3,042           6,259
     At 1 April 2005                                                                                          5,797              457           6,254


     Customer contracts acquired as part of business acquisitions are amortised over the expected useful life of each contract, which range from
     23 to 48 months. Software development costs are not yet being amortised because their useful life has not yet commenced.
42


notes to the consolidated financial statements

14   PROPERTY, PLANT AND EQUIPMENT
     Group
                                                                         Freehold land      Leasehold           Vehicle        Fixtures &
                                                                           & buildings   improvements          hire fleet      equipment             Total
                                                                                 £’000           £’000             £’000            £’000            £’000

     Cost
     At 1 April 2004                                                           10,761           1,496             5,195           10,549           28,001
     Additions                                                                  2,429             463             8,634              990           12,516
     Acquisition of subsidiary undertaking                                          –               –                 –              157              157
     Transfer between category                                                 (1,115)              –                 –            1,115                –
     Disposals                                                                (12,075)           (928)           (1,385)          (2,974)         (17,362)
     At 1 April 2005                                                                –           1,031            12,444            9,837           23,312
     Additions                                                                      –             690            56,404            3,354           60,448
     Acquisition of subsidiary undertaking                                          –              42             2,062               45            2,149
     Disposals                                                                      –               –           (19,077)             (62)         (19,139)
     At 30 June 2006                                                                –           1,763            51,833           13,174           66,770


     Accumulated depreciation and impairment
     At 1 April 2004                                                             (231)          (1,250)          (2,641)          (5,609)           (9,731)
     Charge for the period                                                       (220)            (158)          (1,272)          (2,351)           (4,001)
     Disposals                                                                    451              928              519            2,964             4,862
     At 1 April 2005                                                                –            (480)           (3,394)          (4,996)          (8,870)
     Charge for the period                                                          –            (197)           (8,666)          (2,753)         (11,616)
     Disposals                                                                      –               –             4,358               60            4,418
     At 30 June 2006                                                                –            (677)           (7,702)          (7,689)         (16,068)


     Carrying amount
     At 30 June 2006                                                                –           1,086            44,131            5,485           50,702
     At 1 April 2005                                                                –             551             9,050            4,841           14,442


     Leased assets included above:
     Carrying amount
     At 30 June 2006                                                                –               –            35,014            1,587           36,601
     At 1 April 2005                                                                –              25             8,890            4,789           13,704

     In accordance with IFRS 1, “First time adoption of International Financial Reporting Standards” and IAS17 “Leases”, the Group has reviewed the
     classification of all leases at the opening balance sheet date of 1 April 2004. All leases of land and buildings are deemed to be operating leases.

     The depreciation charge on the vehicle hire fleet represents a critical judgement made by the Directors. The Group operates a large fleet of hire
     vehicles. Depreciation on these vehicles is intended to reduce the carrying value of the vehicles to their expected residual value on disposal.
     However, the residual value attributable is dependent on conditions present in the future and is subject to movements in the market for nearly-new
     vehicles. As such, this area is inherently judgemental and is a key source of estimation uncertainty.


15   INVESTMENTS
     The investment in the consolidated balance sheet represents an investment in an unlisted entity. A list of the significant investments in subsidiaries,
     including the name, country of incorporation and proportion of ownership interest is given in note 36 to the Company’s separate financial statements.
                                                                                                                                                           43


notes to the consolidated financial statements

16   TRADE AND OTHER RECEIVABLES
                                                                                                                              30 June 2006    31 March 2005
                                                                                                                                     £’000            £’000

     Trade receivables                                                                                                           127,302            83,178
     Expected adjustments arising on settlement                                                                                  (15,392)          (11,715)
     Trade receivables – net                                                                                                     111,910            71,463
     Other debtors                                                                                                                 9,675             6,504
     Prepayments and accrued income                                                                                                3,936             3,338
     VAT recoverable                                                                                                                 417               253
                                                                                                                                 125,938            81,558


     Trade receivables represents amounts receivable for the provision of services to customers. The expected adjustments arising on settlement
     is estimated by the Group’s management based on prior experience. Credit risk is spread across major motor insurers in proportion to their
     respective share of the market. The average credit period taken by customers is 206 days.

     The expected adjustments arising on settlement of receivables represents a critical judgement made by the Directors. By their very nature,
     claims against motor insurance policies can be subject to dispute with a consequent requirement to reach a settlement with the counterparty.
     The Directors have reduced trade receivables to reflect the expected future adjustments on settlement on the basis of the level of adjustments
     arising historically. However, this area is inherently judgemental and is a key source of estimation uncertainty.


17   TRADE AND OTHER PAYABLES
                                                                                                                              30 June 2006    31 March 2005
                                                                                                                                     £’000            £’000

     Trade payables                                                                                                                6,379             4,082
     Other taxation and social security                                                                                            1,920             5,685
     Accruals and deferred income                                                                                                 24,923            11,326
     Other creditors                                                                                                                 627             1,683
     Dividends payable                                                                                                             4,079                 –
                                                                                                                                  37,928            22,776


     Trade payables represent amounts payable for goods and services. The average credit period taken for trade purchases is 17 days.


18   OBLIGATIONS UNDER FINANCE LEASES
                                                                                                                              30 June 2006    31 March 2005
                                                                                                                                     £’000            £’000

     Amounts payable under finance leases within one year                                                                         37,230            11,583
     Amount due for settlement within 12 months                                                                                   37,230            11,583


     Amounts payable under finance leases in the second to fifth years inclusive                                                    9,755               2,237
     Amount due for settlement after 12 months                                                                                      9,755               2,237


     It is the Group’s policy to lease certain of its fixtures and equipment and motor vehicles under finance leases. The average lease term is 1.76 years.
     For the period ended 30 June 2006 the average effective borrowing rate was 6.89% (2005 – 8.23%). Interest rates are fixed at the contract date.
     All leases are on a fixed repayment basis and no arrangements have been entered into for contingent rental payments.

     All lease obligations are denominated in sterling. The fair value of the Group’s finance lease obligations approximates to their carrying value.
     The Group’s obligations under finance leases are secured by the lessors’ charges over the leased assets.
44


notes to the consolidated financial statements

19   BORROWINGS AND OVERDRAFTS
                                                                                                                               30 June 2006     31 March 2005
                                                                                                                                      £’000             £’000

     Bank overdrafts                                                                                                                23,181             3,373
     Bank loans                                                                                                                     20,080            39,451
     Loan notes                                                                                                                     21,192            17,170
                                                                                                                                    64,453            59,994


     The borrowings are repayable as follows:
     On demand or within one year
        – Bank overdrafts                                                                                                           23,181             3,373
        – Bank loans                                                                                                                 4,593            19,340
        – Loan notes                                                                                                                21,192            17,170
     Amount due for settlement within 12 months                                                                                     48,966            39,883


     In the second year
         – Bank loans                                                                                                                3,518             3,739
     In the third to fifth years inclusive
         – Bank loans                                                                                                                1,220             5,515
     After five years
         – Bank loans                                                                                                               10,749            10,857
     Amount due for settlement after 12 months                                                                                      15,487            20,111


     The weighted average interest rates paid were as follows:

                                                                                                                                         %                 %

     Bank loans and overdrafts                                                                                                        5.97              6.32


     Facilities of £23.5m in the form of a revolving facility and a term loan are provided by Bank of Scotland. These facilities expire after two years
     and attract an interest rate of 1.5% above LIBOR. Security is provided by a fixed and floating charge over the Group’s assets which encompasses
     cross guarantees between subsidiaries. A further facility of £34.5m in the form of two term loans, (a) and (b), and guaranteed loan notes were
     provided by Bank of Scotland in 2005. Term loan (a), amounting to £6.3m, is repayable from 30 September 2006 and must be repaid in full by October
     2011. Term loan (b), amounting to £11m, is repayable in full by October 2011.

     Term loan (a) attracts an interest rate of 1.5% above LIBOR. Term loan (b) attracts an interest rate of 2% above LIBOR.

     The loan notes were issued to fund the acquisition of Albany and are guaranteed by the Bank of Scotland, the Group’s bankers. The loan notes
     are redeemable in full upon receipt of 30 days written notice. Interest is charged using the base rate published by the Bank of Scotland. Upon
     redemption the loan notes are to be converted into term loan (a) and will be subject to the same repayment terms as above. Further loan notes
     totalling £4,022,000 were issued on the same terms during the period to fund the acquisition of Swift Rent-A-Car Limited.

     The directors consider that the fair values of the Group’s borrowings was equal to their book value.

     Subsequent to the period-end, on 25 July 2006, the Group secured a new three year revolving credit facility of £25m with Royal Bank of Scotland.
     The new facility is repayable in full on 25 July 2009 and is subject to interest at 0.95% above LIBOR, rising to 1.05% or 1.40% above LIBOR if the ratio
     of Net Debt to EBITDA exceeds certain levels. The new facility is secured by a fixed and floating charge over the assets of the Group.
                                                                                                                                                          45


notes to the consolidated financial statements

20   DEFERRED TAX
     Deferred tax is calculated in full on temporary differences under the liability method using a tax rate of 30% (2005 – 30%). The deferred tax
     liabilities and assets, and movements thereon, recognised by the Group are set out below:

                                                             (Liability)          (Liability)                                       Asset
                                                           Intangible      Accelerated tax      Liability           Asset     Share-based              Asset
                                                               assets        depreciation          total       tax losses       payments                total
                                                                 £’000                £’000        £’000             £’000           £’000             £’000

     At 1 April 2004                                               –                      –          –             3,061            1,085              4,146
     Acquisition of subsidiary                                (2,053)                     –     (2,053)                –                –                  –
     (Charge) credit to income                                   314                      –        314               (11)               –                (11)
     (Charge) credit to equity                                     –                      –          –                 –             (162)              (162)
     At 1 April 2005                                          (1,739)                     –     (1,739)            3,050              923              3,973


     Acquisition of subsidiary                                    (86)                (170)        (256)           1,024                –              1,024
     (Charge) credit to income                                    860               (1,332)        (472)            (486)             (54)              (540)
     (Charge) credit to equity                                      –                    –            –                –            2,276              2,276
     At 30 June 2006                                             (965)              (1,502)     (2,467)            3,588            3,145              6,733

     At the balance sheet date the Group has unused trading losses of £15m (2005 – £22.7m) available for offset against future trading profits.
     A deferred tax asset has been recognised in respect of £12m (2005 – £10.2m) of this amount. No deferred tax asset has been recognised in
     respect of the remaining £3m (2005 – £12.5m) due to the unpredictability of future profit streams.


21   SHARE CAPITAL
                                                                                                                              30 June 2006    31 March 2005
                                                                                                                                     £’000            £’000

     Authorised
     160,000,000 ordinary shares of 5p each                                                                                         8,000              8,000
     Issued and fully paid
     135,975,540 (2005 – 118,141,802) ordinary shares of 5p each                                                                    6,799              5,907

     The movement in issued share capital during the period was as follows:                                                                    Shares ’000s

     At start of period                                                                                                                              118,142
     Placing and open offer                                                                                                                           15,424
     Issued to vendors of acquisition                                                                                                                  1,240
     Exercise of share options                                                                                                                           885
     Sharesave scheme                                                                                                                                    284
     At end of period                                                                                                                                135,975

     The placing and open offer for cash on 17 September 2005 was to fund the acquisition of Swift Rent-A-Car Limited.


22   SHARE PREMIUM ACCOUNT
                                                                                                                                                        £’000

     At 1 April 2004                                                                                                                                  22,186
     Shares issued                                                                                                                                     1,750
     At 1 April 2005                                                                                                                                  23,936
     Shares issued                                                                                                                                    42,170
     At 30 June 2006                                                                                                                                  66,106


23   EQUITY RESERVE
                                                                                                                                                        £’000

     At 1 April 2004                                                                                                                                   1,335
     Share-based payment charged to income                                                                                                               412
     Deferred tax asset on share options                                                                                                                (162)
     At 1 April 2005                                                                                                                                   1,585
     Share-based payment charged to income                                                                                                               722
     Deferred tax asset on share options                                                                                                               2,276
     At 30 June 2006                                                                                                                                   4,583
46


notes to the consolidated financial statements

24   RETAINED EARNINGS
                                                                                                                                                    £’000

     At 1 April 2004                                                                                                                              11,355
     Profit for the period                                                                                                                        17,260
     Dividends                                                                                                                                    (5,613)
     At 1 April 2005                                                                                                                             22,982
     Profit for the period                                                                                                                       22,883
     Dividends                                                                                                                                  (12,520)
     At 30 June 2006                                                                                                                              33,345



25   ACQUISITION OF SUBSIDIARY
     On 2 September 2005 the Group acquired 100% of the issued share capital of Swift Rent-A-Car Limited for consideration of £26.9m. Swift Rent-A-Car
     Limited is involved in the provision of credit hire services. This transaction has been accounted for by the purchase method of accounting.
                                                                                                                 Book         Fair value            Fair
                                                                                                                 value      adjustments            value
                                                                                                                 £’000             £’000           £’000

     Net assets acquired
     Property, plant and equipment                                                                              2,149                 –            2,149
     Intangible asset – customer contract                                                                           –               290              290
     Trade and other receivables                                                                                5,019                 –            5,019
     Cash and cash equivalents                                                                                    395                 –              395
     Trade and other payables                                                                                  (1,223)           (1,521)          (2,744)
     Tax liability                                                                                               (820)              268             (552)
     Obligations under finance leases                                                                          (2,058)                –           (2,058)
     Deferred tax (liabilities)/asset                                                                            (169)              937              768
                                                                                                                3,293               (26)           3,267
     Goodwill                                                                                                                                     23,647
     Total consideration                                                                                                                          26,914


     Satisfied by:
     Cash                                                                                                                                         17,128
     Deferred consideration                                                                                                                        2,093
     Shares issued                                                                                                                                 3,225
     Directly attributable costs                                                                                                                     446
     Loan notes                                                                                                                                    4,022
                                                                                                                                                  26,914


     Net cash outflow arising on acquisition
     Cash consideration                                                                                                                           17,128
     Directly attributable costs paid                                                                                                                446
     Cash and cash equivalents acquired                                                                                                             (395)
                                                                                                                                                  17,179

     The fair value adjustments were to recognise an intangible asset in respect of a customer contract in accordance with IAS 38, to recognise
     current and deferred tax debtors and to accrue for outstanding liabilities.
                                                                                                                                                       47


notes to the consolidated financial statements

26   OPERATING LEASE ARRANGEMENTS
                                                                                                                                 30 June        31 March
                                                                                                                                    2006            2005
                                                                                                                                    £’000           £’000

     Minimum lease payments under operating leases recognised in income for the period                                           19,781           12,229


     At the balance sheet date the Group had outstanding commitments for future minimum lease payments under non-cancellable operating leases,
     which fall due as follows:
                                                                                                                                    2006             2005
                                                                                                                                    £’000            £’000

     Within one year                                                                                                               4,998            2,978
     In the second to fifth years inclusive                                                                                        1,898            1,175
     After five years                                                                                                              1,172            1,706
                                                                                                                                   8,066            5,859

     Operating lease payments represent rentals payable by the Group for certain of its motor vehicles, plant and equipment and properties.
     Leases are negotiated for an average term of 2.97 years and rentals are fixed for an average of 2.34 years.


27   SHARE-BASED PAYMENTS
     Equity settled share option plan
     The Group grants options to certain directors and employees. Options are exercisable at a price equal to the average quoted market price of the
     Company’s shares on the date of grant. The vesting period is generally three years. If the options remain unexercised after a period of seven years
     from the date of grant the options expire. Furthermore, options are forfeited if the employee leaves the Group before the options vest.

     Details of the options outstanding during the period are as follows:
                                                                                                           15 months to                        Year ended
                                                                                                              June 2006                     31 March 2005
                                                                                                              Weighted                          Weighted
                                                                                            Number of           average       Number of           average
                                                                                              options     exercise price        options     exercise price
                                                                                                 000s                  £          £’000                  £

     Outstanding at beginning of period                                                         6,303              1.50            7,231             1.20
     Granted during the period                                                                    103              2.97            1,272             2.14
     Exercised during the period                                                                 (885)             1.20           (2,131)            0.87
     Forfeited during the period                                                                  (55)             1.88              (69)            1.65
     Outstanding at end of period                                                               5,466              1.57            6,303             1.50


     Exercisable at the end of the period                                                       1,601              1.08            1,451             1.12


     The weighted average share price at the date of exercise for share options exercised during the period was 310.97p. The options outstanding
     at 30 June 2006 had a weighted average exercise price of £1.57 and a weighted average remaining contractual life of 6.5 years.

     In the year ended 31 March 2005, options were granted on 13 December 2004 and 29 March 2005. The aggregate of the estimated fair values
     of the options granted on those dates was £688,000.

     In the 15-month period ended 30 June 2006, options were granted on 2 September 2005 and 29 March 2006. The aggregate of the estimated
     fair values of the options granted on those dates was £80,000.

     The inputs to the Blacks-Scholes model are as follows:
                                                                                                                             15 months to      Year ended
                                                                                                                                June 2006   31 March 2005

     Weighted average share price                                                                                                  £2.98            £2.09
     Weighted average exercise price                                                                                               £2.97            £2.14
     Expected volatility                                                                                                         31.9%            32.9%
     Expected life                                                                                                              4 years          4 years
     Risk free rate                                                                                                              4.13%            4.45%
     Dividend yield                                                                                                              2.06%            2.30%

     Expected volatility was determined by calculating the historical volatility of the Group’s share price over the previous four years. The expected
     useful life in the model has been adjusted, based on management’s best estimate, for the effects of non-transferability, exercise restrictions and
     behavioural considerations.

     The Group recognised total expenses of £0.7m and £0.4m related to equity-settled share-based payment transactions in the 15-month period
     ended 30 June 2006 and the year ended 31 March 2005 respectively.
48


notes to the consolidated financial statements

28   RELATED PARTY TRANSACTIONS
     Transactions between the Company and its subsidaries, which are related parties, have been eliminated on consolidation and are not disclosed
     in this note. Transactions between the Company and its subsidiaries are disclosed in the Company’s separate financial statements.

     Remuneration of the directors, who are the key management personnel of the Group, is provided in the audited section of the Directors’
     Remuneration Report on pages 19 to 25.


29   CONTINGENT ASSETS AND LIABILITIES
     Subsequent to the acquisition of Albany in October 2004 and Swift in September 2005, certain liabilities have arisen in the acquired businesses
     relating to matters arising prior to acquisition by Helphire Group plc. These liabilities were not foreseen at the date of acquisition. The Directors
     have estimated the likely impact of these matters and recognised associated liabilities in the consolidated balance sheet.

     £1.6m of the liabilities were identified within one year of the relevant acquisition and have been recorded as adjustments to the fair values of the
     acquired liabilities. £0.6m arose after one year of the relevant acquisition and have therefore been treated as an expense in the current period.
     Whilst the nature of the items concerned is such that it is not possible at the current time to precisely determine the amount of the liability, the
     Directors consider that suitably reliable estimations can be made and have recorded liabilities on this basis.

     The Directors anticipate making warranty claims against the former owners of both Albany and Swift in respect of the above liabilities. However,
     such claims are at an early stage and it is not possible to assess their success, or otherwise, with sufficient certainty. As such, warranty claims
     are considered contingent and no asset has been recorded in the accounts.


30   EXPLANATION OF TRANSITION TO IFRS
     This is the first financial period that the Group has presented its financial statements under IFRS. The following disclosures are required in the
     year of transition. The last financial statements under UK GAAP were for the year ended 31 March 2005 and the date of transition to IFRS was
     therefore 1 April 2004.

     Reconciliation of equity at 1 April 2004 (date of transition to IFRS)
                                                             UK GAAP                                Effect of transition to IFRS
                                                                                    IAS10          IFRS 2                 IAS38            IAS27          IFRS
                                                                             Post Balance    Share-based              Intangible   Consolidated
                                                                             Sheet Events      Payments                  Assets    and separate
                                                                                Dividends                                               financial
                                                                                                                                     statements
                                                                                  (Note 1)         (Note 2)             (Note 3)          (Note 4)
                                                                 £’000              £’000            £’000                £’000             £’000       £’000

     Goodwill                                                   1,453                  –                –                    –                 –       1,453
     Intangible assets                                              –                  –                –                1,150                 –       1,150
     Property, plant and equipment                             19,420                  –                –               (1,150)                –      18,270
     Deferred tax asset                                         3,061                  –            1,085                    –                 –       4,146
     Total non-current assets                                  23,934                  –            1,085                     –                –      25,019

     Trade and other receivables                               49,482                  –                 –                    –             250       49,732
     Cash and cash equivalents                                  4,976                  –                 –                    –             264        5,240
     Total current assets                                      54,458                  –                 –                    –             514       54,972


     Total assets                                              78,392                  –            1,085                     –             514       79,991

     Trade and other payables                                 (11,331)             2,900                 –                    –            (641)      (9,072)
     Obligations under finance leases                          (6,420)                 –                 –                    –               –       (6,420)
     Borrowings and overdraft                                 (23,843)                 –                 –                    –               –      (23,843)
     Total creditors                                          (41,594)             2,900                 –                    –            (641)     (39,335)


     Net assets                                                36,798              2,900            1,085                     –            (127)      40,656

     Share capital                                              5,800                  –                –                     –               –        5,800
     Share premium account                                     22,186                  –                –                     –               –       22,186
     Equity reserve                                                 –                  –            1,335                     –               –        1,335
     Retained earnings                                          8,812              2,900             (250)                    –            (127)      11,335
                                                               36,798              2,900            1,085                     –            (127)      40,656
                                                                                                                                                        49


notes to the consolidated financial statements

30   EXPLANATION OF TRANSITION TO IFRS CONTIN U E D

     Reconciliation of equity at 31 March 2005 (date of last UK GAAP financial statements)
                                              UK GAAP                             Effect of transition to IFRS
                                                                  IAS10           IFRS 2                IAS38            IAS27           IFRS 3       IFRS
                                                           Post Balance     Share-based            Intangible    Consolidated         Business
                                                           Sheet Events       Payments                 Assets    and separate      combinations
                                                              Dividends                                               financial
                                                                                                                   statements
                                                                (Note 1)          (Note 2)            (Note 3)          (Note 4)        (Note 5)
                                                 £’000            £’000             £’000               £’000             £’000           £’000       £’000

     Goodwill                                  46,402                –                 –              (4,793)                –           1,035      42,644
     Intangible assets                              –                –                 –               6,254                 –               –       6,254
     Property, plant and equipment             14,894                –                 –                (456)                4               –      14,442
     Investment                                   300                –                 –                   –                 –               –         300
     Deferred tax asset                         3,050                –               923                   –                 –               –       3,973
     Total non-current assets                  64,646                –               923               1,005                 4           1,035      67,613

     Trade and other receivables               81,506                –                  –                   –              52                –      81,558
     Cash and cash equivalents                  3,353                –                  –                   –             215                –       3,568
     Total current assets                      84,859                –                  –                   –             267                –      85,126


     Total assets                             149,505                –               923               1,005              271            1,035     152,739

     Trade and other payables                  (26,880)          4,372                  –                  –             (268)               –     (22,776)
     Obligations under finance leases          (13,820)              –                  –                  –                –                –     (13,820)
     Borrowings and overdraft                  (59,994)              –                  –                  –                –                –     (59,994)
     Deferred tax liability                          –               –                  –             (1,739)               –                –      (1,739)
     Total creditors                         (100,694)           4,372                  –             (1,739)            (268)               –     (98,329)


     Net assets                                48,811            4,372               923                (734)                3           1,035      54,410

     Share capital                              5,907                –                 –                   –                 –               –       5,907
     Share premium account                     23,936                –                 –                   –                 –               –      23,936
     Equity reserve                                 –                –             1,585                   –                 –               –       1,585
     Retained earnings                         18,968            4,372              (662)               (734)                3           1,035      22,982
                                               48,811            4,372               923                (734)                3           1,035      54,410
50


notes to the consolidated financial statements

30   EXPLANATION OF TRANSITION TO IFRS CONTIN U E D

     Reconciliation of income for year ended 31 March 2005 (date of last UK GAAP financial statements)
                                                              UK GAAP                                  Effect of transition to IFRS
                                                                                   IFRS 2             IAS38                  IAS27           IFRS 3           IFRS
                                                                             Share-based          Intangible         Consolidated         Business
                                                                               Payments              Assets          and separate      Combinations
                                                                                                                          financial
                                                                                                                       statements
                                                                                  (Note 2)           (Note 3)               (Note 4)        (Note 5)
                                                                  £’000             £’000              £’000                  £’000           £’000          £’000

     Revenue                                                  118,010                  –                   –                  432                –        118,442
     Cost of sales                                            (64,056)                 –                   –                    –                –        (64,056)
     Gross profit                                               53,954                 –                   –                  432                –         54,386

     Administrative expenses
     Goodwill impairment charge                                 (1,453)                –                  –                     –                –         (1,453)
     Intangible asset impairment charge                         (1,000)                –                  –                     –                –         (1,000)
     Profit on sale of tangible fixed assets                     6,175                 –                  –                     –                –          6,175
     Other                                                     (39,022)             (412)            (1,048)                 (163)           1,035        (39,610)
                                                               (35,300)             (412)            (1,048)                 (163)           1,035        (35,888)
     Other operating income                                      1,915                 –                  –                     –                –          1,915
     Finance costs                                              (3,116)                –                  –                  (139)               –         (3,255)
     Profit before tax                                          17,453              (412)            (1,048)                  130            1,035         17,158


     Tax on profit on ordinary activities                         (212)                –                314                      –               –            102
     Net profit (loss)                                          17,241              (412)              (734)                  130            1,035         17,260

     Notes to reconciliations between UK GAAP and IFRS

     1    Post Balance Sheet Events
          Under UK GAAP dividends are provided for in the accounts when they are proposed. IAS10 requires dividends to be recognised as a liability
          only when they are approved. For a final dividend this is when they are approved by the shareholders in general meeting. For an interim
          dividend this is when they are approved by the Board.

     2    Share-based Payments
          Under UK GAAP no profit and loss account charge was required in respect of remuneration paid to directors and employees by means of
          granting share options. IFRS 2 requires that share-based payments are recognised as an expense in the income statement at fair value.
          The expense is based on the fair value of the share award at the date of grant. The fair value is calculated using the Blacks-Scholes model
          and is applied to options granted after 7 November 2002 and not vested at 1 April 2005.

     3    Intangible Assets
          IAS 38 requires the recognition of certain intangible assets acquired in business combinations, where this was not required under UK GAAP.
          This includes ongoing contractual rights to supply, where the fair value of the relationship can be measured. The directors have identified
          several customer contracts that on this basis should be treated as intangible assets. These are amortised over two to four years.

          The directors have also identified certain software licence and development expenditure classified as tangible fixed assets under UK GAAP
          which they believe more closely meet the definition of intangible assets under IAS38. Accordingly these costs, which did not arise from
          business combinations, have been reclassified as intangible assets under IFRS.

     4    Consolidated and Separate Financial Statements
          Fishers Solicitors Practice Limited (“Fishers”) is a member of Helphire’s panel of solicitors. The directors have considered the nature of the
          relationship with Fishers against the requirements of IAS 27 and have concluded that it satisfies the definition of a subsidiary, whereas this
          was not previously the case under UK GAAP. As such, the results of Fishers have been consolidated into these financial statements.

     5    Business Combinations
          In accordance with IFRS 3, goodwill is carried at cost subject to impairment review. The previous UK GAAP treatment was for goodwill to be
          amortised over its useful life. Under the transitional arrangements of IFRS 1 the Group exercised its option of applying IFRS 3 prospectively from
          the date of transition to IFRS. Accordingly, goodwill arising from acquisitions prior to 1 April 2004 is frozen at its written down value as at that date.

     6    Impairment of Assets
          Impairment tests are carried out whenever events or changes in circumstances indicate that the carrying value of assets may not be
          recoverable, and also annually in the case of goodwill, which has an indefinite useful life and is not subject to amortisation and intangible
          assets not yet available for use. An impairment loss is recognised in respect of the amount by which the asset’s carrying amount exceeds its
          recoverable amount, defined as the higher of the asset’s fair value and its value in use. For the purposes of the assessing impairment, assets
          are grouped at the lowest levels for which there are separately identifiable cash flows (cash generating units).
                                                                                                      51


company income statement for the 15 months ended 30 June 2006

                                                                            15 months to      Year ended
                                                                            30 June 2006   31 March 2005
Continuing operations                                                Note          £’000            £’000

Operating income
  Management charges                                                             22,811          15,010
  Other income                                                                       64             413
  Dividends from subsidiaries                                                    10,000           8,300
Administrative expenses                                                         (19,100)        (13,561)
Operating profit                                                       32       13,775          (10,162)


Finance costs                                                          33        (4,753)          (2,960)
Profit before tax                                                                 9,022            7,202

Tax on profit on ordinary activities                                   34          (392)               –
Profit for the period                                                             8,630            7,202


A Company only income statement has not previously been presented.
52


company balance sheet as at 30 June 2006
                                                                                                                          30 June 2006   31 March 2005
                                                                                                               Note              £’000           £’000

Non-current assets
Property, plant and equipment                                                                                     35             822              267
Investments in subsidiaries                                                                                       36          67,938           40,888
Other investments                                                                                                 36             300              300
Deferred tax asset                                                                                                40           2,611              767
                                                                                                                              71,671           42,222


Current assets
Trade and other receivables                                                                                       37          78,300           56,305
Cash and cash equivalents                                                                                                      4,022                –
                                                                                                                              82,322           56,305


Total assets                                                                                                                 153,993           98,527


Current liabilities
Trade and other payables                                                                                          38          (13,938)         (5,503)
Borrowings and overdrafts                                                                                         39          (46,770)        (36,905)
                                                                                                                              (60,708)        (42,408)


Non-current liabilities
Borrowings and overdrafts                                                                                         39          (15,487)        (20,111)
Deferred tax liabilities                                                                                          40               (7)              –
                                                                                                                              (15,494)        (20,111)


Total liabilities                                                                                                             (76,202)        (62,519)


Net assets                                                                                                                    77,791           36,008


Equity
Share capital                                                                                                     41           6,799            5,907
Share premium account                                                                                             41          66,086           23,916
Equity reserve                                                                                                    43           3,997            1,386
Retained earnings                                                                                                 42             909            4,799
                                                                                                                              77,791           36,008

The financial statements were approved by the Board of Directors and authorised for issue on 8 September 2006. They were signed on its behalf by:


D E L indsay
Director
                                                                                                              53


company cash flow statement for the 15 months ended 30 June 2006

                                                                          15 months to                Year ended
                                                                          30 June 2006             31 March 2005
                                                                 £’000           £’000    £’000             £’000

Cash flows (used in)/from operating activities
Operating profit                                                              13,775                     10,162
Depreciation charge                                                 27                        1
Investment impairment charge                                         –                    3,000
Increase in debtors                                            (22,335)                  (5,675)
Increase in creditors                                            2,264                      781
Share-based payment charge (net of recharge to subsidiaries)       586                      348
Cash (used in)/from operations                                                 (5,683)                     8,617

Bank and loan interest paid                                                    (4,753)                    (2,960)
Taxation paid                                                                       –                          –
Net cash flow (used in) from operating activities                             (10,436)                     5,657

Cash flows from investing activities
Purchase of unlisted investments                                                    –                      (300)
(Repayment)/issue of borrowings                                                  (582)                     (268)
Acquisitions                                                                  (17,574)                  (19,660)
Net cash used in investing activities                                         (18,156)                  (20,228)

Cash flows from financing activities
Net proceeds from issue of ordinary share capital                              39,837                     1,857
Net proceeds from (repayment) loans                                           (19,767)                   17,931
Dividends paid to shareholders                                                 (8,441)                   (5,613)
Net cash flow from financing activities                                       11,629                     14,175
Net decrease in cash and cash equivalents                                     (16,963)                      (396)

Cash and cash equivalents at beginning of period                                    –                        396
Cash and cash equivalents at end of period                                    (16,963)                         –

Cash and cash equivalents consists of:
Cash at bank and in hand                                                        4,022                          –
Cash held in restricted deposit                                                     –                          –
Bank overdraft                                                                (20,985)                         –
                                                                              (16,963)                         –
54


notes to the consolidated financial statements

31   SIGNIFICANT ACCOUNTING POLICIES
     The separate financial statements of the Company are presented as required by the Companies Act 1985. As permitted by that Act, the separate
     financial statements have been presented in accordance with International Financial Reporting Standards.

     The financial statements have been prepared on a historical cost basis. The principal accounting policies adopted are the same as those set out
     in note 1 to the consolidated financial statements except as noted below.

     Investments in subsidiaries are stated at cost less, where appropriate, provisions for impairment.


32   OPERATING PROFIT
     The auditors’ remuneration for audit services to the Company was £76,000 (2005 – £50,000).


33   FINANCE COSTS
                                                                                                                          15 months to      Year ended
                                                                                                                          30 June 2006   31 March 2005
                                                                                                                                 £’000            £’000

     Interest on bank overdrafts and loans                                                                                      1,662            2,960
     Interest on loan notes                                                                                                     3,091                –
                                                                                                                                4,753            2,960


34   TAX
                                                                                                                          15 months to      Year ended
                                                                                                                          30 June 2006   31 March 2005
                                                                                                                                 £’000            £’000

     Current tax
     UK corporation tax on profits for the period                                                                                  10                  –
     Adjustments in respect of prior periods                                                                                      330                  –
     Total current tax                                                                                                            340                  –

     Deferred tax
     Origination and reversal of timing differences                                                                                52                  –
     Tax on profit on ordinary activities                                                                                         392                  –

     Reconciliation of tax charge
     Profit before tax                                                                                                          9,022            7,202
     Tax at the UK corporation tax rate of 30%                                                                                  2,707            2,161
     Non taxable income                                                                                                        (3,000)          (2,490)
     Group relief surrendered                                                                                                     273                –
     Deductible costs not in income statement                                                                                    (310)            (673)
     Non deductible costs                                                                                                         722            1,003
     Tax expense for the period                                                                                                   392                  –
                                                           55


notes to the consolidated financial statements

35   PROPERTY, PLANT AND EQUIPMENT
                                                   Leasehold
                                                improvements
                                                        £’000

     Cost
     At 1 April 2004                                       –
     Additions                                           268
     At 1 April 2005                                     268
     Additions                                           582
     At 30 June 2006                                     850

     Accumulated depreciation and impairment
     At 1 April 2005                                       –
     Charge for the period                                (1)
     At 1 April 2005                                      (1)
     Charge for the period                               (27)
     At 30 June 2006                                     (28)

     Carrying amount
     At 30 June 2006                                     822
     At 1 April 2005                                     267
56


notes to the consolidated financial statements

36   INVESTMENTS
     Details of the Company and Group’s subsidiaries at 30 June 2006 are as follows:
                                                                                                  Shares held                    Place of      Ownership
                                                                                                  by Company                incorporation        interest
     Subsidiary undertaking                                                                          or Group               and operation              %

     Helphire (UK) Limited                                                                        Company           England and Wales                  100
     Helphire Finance Limited                                                                     Company           England and Wales                  100
     Angel Assistance Limited                                                                     Company           England and Wales                  100
     Fleet Services Limited                                                                       Company           England and Wales                  100
     Helphire Legal Services Limited                                                              Company           England and Wales                  100
     Countrywide Assistance Limited                                                               Company           England and Wales                  100
     1st Automotive Limited                                                                       Company           England and Wales                  100
     Rescue Car Rentals Limited                                                                     Group           England and Wales                  100
     Helphire EBT (Trustees) Limited                                                                Group           England and Wales                  100
     e Register Limited                                                                           Company           England and Wales                  100
     Jewellers On-line Limited                                                                      Group           England and Wales                  100
     Total Accident Management Limited                                                            Company           England and Wales                  100
     InsureAssist Limited                                                                         Company           England and Wales                  100
     Compensation Team Limited                                                                    Company           England and Wales                  100
     City and County Hire Limited                                                                   Group           England and Wales                  100
     Car and Commercial Assessors Limited                                                           Group           England and Wales                  100
     Specialist Witness Limited                                                                     Group           England and Wales                  100
     Theftsure Limited                                                                              Group           England and Wales                  100
     Helphire (Pinesgate) Limited                                                                 Company           England and Wales                  100
     Helphire (Pinesgate Reversion) Limited                                                       Company           England and Wales                  100
     Helphire (Pinesgate Nominee No 1) Limited                                                    Company           England and Wales                  100
     Helphire (Pinesgate Nominee No 2) Limited                                                    Company           England and Wales                  100
     Albany RTA Limited                                                                           Company           England and Wales                  100
     Albany Group Holdings Limited                                                                  Group           England and Wales                  100
     Marketstir Limited                                                                             Group           England and Wales                  100
     Albany Assistance Limited                                                                      Group           England and Wales                  100
     Albany Vehicle Rentals Limited                                                                 Group           England and Wales                  100
     Albany Medical Rentals Limited                                                                 Group           England and Wales                  100
     Swift Rent-A-Car Limited                                                                     Company           England and Wales                  100
     Swift Prestige Hire Limited                                                                    Group           England and Wales                  100
     Swift Finance (GB) Limited                                                                     Group           England and Wales                  100

     Whilst Helphire owns no shares in Fishers Solicitors Limited the directors consider it to be a subsidiary against the requirements of IAS 27
     because of its contractual arrangements with the Group.
     The movement in investments in subsidiaries during the period was as follows:

     Cost                                                                                                                                             £’000

     At 1 April 2004                                                                                                                                  5,473
     Additions                                                                                                                                       40,677
     At 31 March 2005                                                                                                                                46,150
     Additions                                                                                                                                       27,050
     At 30 June 2006                                                                                                                                 73,200

     Impairment
     At 1 April 2004                                                                                                                                 (2,262)
     Charge for the period                                                                                                                           (3,000)
     At 31 March 2005                                                                                                                                (5,262)
     Charge for the period                                                                                                                                –
     At 30 June 2006                                                                                                                                 (5,262)


     Carrying amount
     At 30 June 2006                                                                                                                                 67,938
     At 31 March 2005                                                                                                                                40,888


     The other investment of £300,000 (2005 – £300,000) in an investment in a corporate vehicle created for the sale and lease back of the Group’s
     headquarters in 2005.
                                                                                                                                                          57


notes to the consolidated financial statements

37   TRADE AND OTHER RECEIVABLES
                                                                                                                               30 June 2006    31 March 2005
                                                                                                                                      £’000            £’000

     Amounts owed by subsidiary undertakings                                                                                       72,197            53,077
     Other debtors                                                                                                                  3,373             1,628
     Prepayments and accrued income                                                                                                 2,395             1,385
     VAT                                                                                                                              335               215
                                                                                                                                   78,300            56,305

     Included within other debtors is an amount of £871,000 (2005 – £1,266,000) receivable after more than one year.

38   TRADE AND OTHER PAYABLES
                                                                                                                               30 June 2006    31 March 2005
                                                                                                                                      £’000            £’000

     Trade payables                                                                                                                  1,020              798
     Other taxation and social security                                                                                                211              158
     Accruals and deferred income                                                                                                    5,360            1,560
     Other creditors                                                                                                                     –                7
     Dividends payable                                                                                                               4,079                –
     Amounts owed to subsidiary undertakings                                                                                         3,268            2,980
                                                                                                                                   13,938             5,503

     Trade payables represent amounts payable for goods and services. The average credit period taken for trade purchases is 30 days.


39   BORROWINGS AND OVERDRAFTS
                                                                                                                               30 June 2006    31 March 2005
                                                                                                                                      £’000            £’000

     Bank overdrafts                                                                                                               20,985                 –
     Bank loans                                                                                                                    20,080            39,846
     Loan notes                                                                                                                    21,192            17,170
                                                                                                                                   62,257            57,016

     The borrowings are repayable as follows:

     On demand or within one year
        – Bank overdrafts                                                                                                          20,985                 –
        – Bank loans                                                                                                                4,593            19,735
        – Loan notes                                                                                                               21,192            17,170
     Amount due for settlement within 12 months                                                                                    46,770            36,905

     In the second year
         – Bank loans                                                                                                                3,518            3,739
     In the third to fifth years inclusive
         – Bank loans                                                                                                                1,220            5,515
     After five years
         – Bank loans                                                                                                              10,749            10,857
     Amount due for settlement after 12 months                                                                                     15,487            20,111

     Further details relating to borrowings and overdrafts and the applicable interest rates are given in note 19 to the consolidated financial statements.
     The Directors consider that the fair values of the Group’s borrowings was equal to their book value.
58


notes to the consolidated financial statements

40   DEFERRED TAX
                                                                                                                      (Liability)          Asset
                                                                                                               Accelerated tax       Share-based
                                                                                                                 depreciation          payments
                                                                                                                          £’000             £’000

     At 1 April 2004                                                                                                          –               901
     (Charge) credit to income                                                                                                –                 –
     (Charge) credit to equity                                                                                                –              (134)
     At 1 April 2005                                                                                                          –               767

     Charge to income                                                                                                        (7)              (45)
     Credit to equity                                                                                                         –             1,889
     At 30 June 2006                                                                                                         (7)            2,611


41   SHARE CAPITAL AND SHARE PREMIUM ACCOU N T
     The movements on these items are disclosed in notes 21 and 22 to the consolidated financial statements.


42   RETAINED EARN INGS
                                                                                                                                             £’000

     At 1 April 2004                                                                                                                        3,210
     Profit for the period                                                                                                                  7,202
     Dividends                                                                                                                             (5,613)
     At 1 April 2005                                                                                                                       4,799
     Profit for the period                                                                                                                 8,630
     Dividends                                                                                                                           (12,520)
     At 30 June 2006                                                                                                                          909


43   EQUITY RESERV E
                                                                                                                                             £’000

     At 1 April 2004                                                                                                                        1,108
     Share-based payment charge                                                                                                               412
     Deferred tax asset on share options                                                                                                     (134)
     At 1 April 2005                                                                                                                        1,386
     Share-based payment charge                                                                                                               722
     Deferred tax asset on share options                                                                                                    1,889
     At 30 June 2006                                                                                                                        3,997



44   STATEMENT OF CHANGES IN EQUITY
                                                                                                                  15 months to         Year ended
                                                                                                                  30 June 2006      31 March 2005
                                                                                                                         £’000               £’000

     Profit for the period                                                                                               8,630              7,202
     Share-based payment charge (before recharge to subsidiaries)                                                          722                412
     Deferred tax on share-based payment charge                                                                          1,889               (134)
     Net proceeds from issue of ordinary share capital                                                                  43,062              1,857
     Ordinary dividend paid on equity shares                                                                           (12,520)            (5,613)
                                                                                                                        41,783             3,724
     As at start of period                                                                                              36,008            32,284
     As at end of period                                                                                                77,791            36,008
notes
notes
                    Pinesgate, Lower Bristol Road, Bath BA2 3DP                 Te l : 0 1 2 2 5 3 2 1 0 0 0
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