2004 Annual review and financial statements

Share plc 2004 Annual review and financial statem

ents

Turnover rises by 7.5% to £8.9 million (2003: £8.3 million)

Profit before tax rises by 38% to £2.3 million (2003: £1.7million)

Earnings per share increases by38% to 1.1p (2003: 0.8p)

Dividend per share increased by 10% to 0.1452 p (2003: 0.132p)

Strong balance sheet with £8.9 million in cash (2003: £7.3 million)

highlights

contents Chairman's statement 4

Board of directors 6

Chief Executive operating review 8

Financial review 12

Directors report and financial

statements 15

Information for shareholders 40

Notification of AGM 41

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The Share Centre Limited

The main trading arm of Share plc providing stockbroking services for

private investors, together with a range of share-related services for

companies and their employees and shareholders throughout the UK.

The Company is a corporate member of, and shareholder in, the

London Stock Exchange.

The Share Centre (Administration Services) Limited

The services company through which systems and special projects are

operated.

The Shareholder Limited

Publisher of our regular magazine for customers, and the trading

vehicle for external products and services we may, from time to time,

offer to customers.

ShareMark Limited

ShareMark is our alternative share market on which Share plc shares,

amongst others, are dealt. Although ShareMark currently operates as a

trading division of The Share Centre Limited, this company is expected

to operate as a separately regulated entity in due course.

The Share Centre (Investment Management) Limited

The Authorised Corporate Director of The Share Centre Limited's

managed fund.

ShareSecure Limited

The trustee service provider for participants in Share Incentive Plans.

Share Nominees Limited and Stock Academy Nominees Limited

The non-trading "bare trustee" companies which act as nominee

custodians of all our customers' individual shareholdings, thereby "ring

fencing" them from our own assets.

Personal Retirement Account Limited

The company protects the name of our pension service, operated by

The Share Centre Limited in association with Sippdeal.

what we do

We aim to makebuying shares aseasy as going tothe supermarket

Customers wantstraight-forwardadvice, and our practical, plain-speaking experts are hereto provide it

We see The Share Centre as the place where

anybody can come to get the information, advice,

choice and fair value they need to share in the

wealth of the stock market

Understanding the basics ofinvesting anddoing their own research isimportant to ourcustomers; ourwebsite givesthem the toolsthey need

Investingshouldn't be achore, we're here to makesure it isn't

Different peoplehave differentneeds, our widerange of servicesmakes surethey've a choice

4 Chairman’s statement Annual report & accounts 2004

The year ended 31 December 2004

was a successful one for Share plc, with

pre-tax profits of £2.3 million (2003:

£1.7 million) and earnings per share of

1.1 pence (2003: 0.8 pence). We have

now been consistently profitable for the

past ten years and our balance sheet

reflects that strength.

During that time, The Share Centre has

built its substantial customer base

mainly by establishing links which have

given, in each case, access to many

individual investors. Examples are the

major privatisation issues, the de-

mutualisation of the building societies

in the late 1990s and employee-based

share ownership schemes more

recently. Pursuing the same strategy,

within the last six years The Share

Centre has acquired the businesses of

Bradford & Bingley Corporate PEPs and

Stock Academy, which introduced the

branded share services we now provide

for Virgin Money, This is Money,

Moneyextra and 0800shares. The

Group continues to make good progress

in building its business with companies

and affinity groups in this way, and

several new important relationships

have been established this year.

These 'gateways' have augmented our

large customer base of personal

investors, who can make their own

preferred share selections, with help

from our investment advice if they

wish. In most cases, their directly held

investments with The Share Centre will

be only a small part of the investor's

overall savings, with most of their

reserves held in the form of pensions,

insurance policies or unit trusts.

However, during the last few years,

problems in financial markets have

caused many individual investors to

lose confidence in these collective

investment vehicles. This is one of the

factors that has led to the decline in

saving by individuals. Those who

recognise the need for continuing

saving, including through direct

ownership of shares and other

investments, want to have full

knowledge of, and direct control over,

their investments at all times.

This environment provides an

opportunity for The Share Centre to

develop a new relationship with its

investor customers, with a new

marketing approach. Retaining the key

characteristics of investor control and

transparency, which have marked all

our operations hitherto, we see The

Share Centre taking a more central role

in the field of personal savings and

investment. We will provide a more

active role in relation to investor funds,

with information on how best to use

and assess them. We will increasingly

aim to substitute more active

opportunities for capital growth and

income, combined with charging rates

for our services which represent good

value for money, as an alternative to

the passive approach of large pension

and life insurance bodies.

The personal savings market remains in

dire need of such innovation. Over the

past eight years, the proportion of

household income set aside for future

needs has halved, and personal

indebtedness has risen sharply.

Moreover, in our view, taxation will rise

after the next General Election. Thus it

is important that the opportunity for

individuals to rebuild personal reserves

is not lost.

In this context, it is also undoubtedly

important to recognise the different

appetites for risk that exist among

individual investors. We will endeavour

to explain and advise between varying

types of risk and reward; by showing

how cash, investments with protected

Chairman’s statement

1991

Gavin Oldham forms The

Share Centre in Tring,

providing certificate sales

and a range of other share

services

1993

S G Warburg choose The

Share Centre to provide

share services for their

corporate clients’ employees

1999

The Share Centre acquires

the corporate PEP business

of Bradford & Bingley

Building Society

2000

Free shares in Share plc

are given to all account

customers; Share plc starts

trading on ShareMark

2002

The Share Centre takes

over the business of

StockAcademy, along

with 'white label'

corporate services

Annual report & accounts 2004 Chairman’s statement 5

capital values, gilts, bonds, index-

trackers and growth funds relate to one

another; and The Share Centre will, at

the same time, offer access to direct

equity investments, which are denied

by the Government's stakeholder

concept.

Thus, the next year will see a change in

our approach to the market, and we

signal this with a change to our

company profile. Considerable work

has been undertaken over the past 9

months to create a fresh marketing

approach, while retaining our core

values. This was first introduced with

our Child Trust Fund services in January

2005, and we are now extending our

new brand across all our services. We

intend to invest significantly in the new

marketing style over the year ahead.

We feel Share plc is well placed to

meet the needs of 2005's savers and

investors, since they will find here the

essentials they need to share in the

wealth of the stock market.

Finally, I would like to thank all our

staff, including our executive directors

and the Chief Executive, for their

contribution during the year.

Sir Martin Jacomb, Chairman

22 February 2005

We feel

Share plc is well

placed to meet the

needs of 2005's

savers and investors,

since they will find

here the essentials

they need to share

in the wealth of the

stock market.

2002

The Share Centre is

awarded Investor in People

accreditation

2003

Shares4Schools launched,

enabling Year 12 students

to learn about investing in

shares with real money

2004

West Midlands Regional

Development Board

chooses ShareMark as the

platform for its InvestBX

regional market

2004

ShareStream is launched to

provide New Issue

distribution for companies

and new investments for

private investors

Year to Jan 2005

The Share Centre is

approved as provider of

equity-based Child Trust

accounts

6 Board of directors Annual report & accounts 2004

Sir Martin Jacomb, 75

Chairman, non-executive director

Sir Martin is non-executive Chairman of

Canary Wharf plc, Chancellor of the

University of Buckingham and a director

of the Oxford Playhouse. He was

previously Chairman of Prudential,

Chairman of BZW, Deputy Chairman of

Barclays plc and has served on the

Boards of the Bank of England, Rio

Tinto plc, Marks and Spencer plc

amongst several other companies.

Sandra Kelly, 44

Finance Director

Sandra joined the Group on 1 March

2004 from AIM listed Raft International

plc where she was Chief Financial

Officer. She has also previously worked

as CFO setting up the European division

of a US online car retail organisation

and as Acting Finance Director and

Financial Controller for BMW (GB)

Limited. Sandra is a qualified Chartered

Accountant who started her career at

PriceWaterhouseCoopers and is

responsible for the financial and

administrative affairs of the Group.

At The Share Centre, we are here to helpinexperienced and modest investors by givingthem free advice, by sharing valuable insightsand by offering an ease of trading previouslyunheard of. Our aim is to make trading sharesas everday as going to the supermarket

Gavin Oldham, 55

Chief Executive

Gavin founded The Share Centre in

March 1990 having previously

established Barclayshare (now Barclays

Stockbrokers) for Barclays Bank in 1986

and was previously a partner of Wedd

Durlacher, the stock jobbing firm. He is

also an elected member of the General

Synod, a Church Commissioner, a

member of the Church's Ethical

Investment Advisory Group, and a

member of the Archbishops' Council's

Finance Committee, trustee of pfeg (the

Personal Finance Education Group) and

founder of The Share Foundation, a

charity registered in 2005. Gavin is

responsible for all aspects of control

and oversight, including the Group's

strategy for growth.

Board of directors

Annual report & accounts 2004 Board of Directors 7

Jeremy Helliwell, 49

Operations Director

Jeremy joined the Group in September

1998 from Barclays Bank plc where he

was a Project Director. He has worked

in a variety of project and systems

based roles at Barclays, and was part of

the core team which created

Barclayshare - now Barclays

Stockbrokers. Jeremy is responsible for

the day-to-day smooth operation of the

business including all front office

activities - Customer Services and

Dealing, as well as the firm's IT

systems and infrastructure.

Iain Wallace, 35

Compliance and Legal Services Director

After graduating in Law, Iain started his

career as a private client stockbroker at

Greig Middleton before moving to BWD

Rensburg, where he was an Associate

Director. He subsequently joined the

Securities and Futures Authority, which

then became the Financial Services

Authority, where he specialised in

regulating private client stockbroking

firms. While managing a Compliance

team at HSBC Investment Bank in 1999,

he was approached by The Share

Centre to join the Board.

Peter Forster, 56

Business Development Director

Peter joined Barclays Bank in 1965

where he held a number of

Management positions in Branch

Banking, Personnel and Management

Services. He became Head of

Operations at Barclayshare from 1986

to 1991 from where he joined The

Share Centre.

Richard Tolkien, 50

Non Executive Director

After starting his career in government

at the UK Treasury, Richard has practised

as a corporate finance adviser for over

20 years including 15 years at Morgan

Grenfell and then as Managing Director

and latterly Co-Head of HSBC's

Corporate Finance and Advisory Division

from 1997 to 2002. Since 2003 he has

been a Senior Adviser to Macquarie

Bank on the development of its

business in Europe. He is a member of

the National Development Board of RYA

Sailability.

8 Chief Executive operating review Annual report & accounts 2004

The Group's consistently strong balance

sheet and profitability during the past

four years of difficult market conditions

mean that we are now well placed to

take advantage of the upturn in activity

that started in June 2004 and has

continued into the first quarter of 2005.

Coupled with greater awareness by

individuals of the need to take more

responsibility for their financial future,

and the resultant focus on investment

rather than spending, the conditions are

right to push forward more strongly

with the growth of our business. We

have therefore placed a significant

focus over the past year on preparing

for a new stage of business

development, centred on further

developing our own-brand services for

private investors.

The planning for this retail sales

initiative has been considerably

assisted by the appointment of a

communications consultancy, who have

worked with us to establish a new

brand identity for The Share Centre.

This is based closely on the values

described in Sir Martin's statement.

During the autumn these concepts have

been built into a wholly new website

design, and a programme for retail

promotion of our services throughout

2005. Over this period we intend to

make a significant investment in

widening and deepening the awareness

of our services and in promoting the

benefits derived from using them.

Retail share services

Our account activity has risen

considerably in 2004 with the overall

number of deals undertaken increasing

by 28% to 255,000 (2003: 199,000), as

investors have recovered more

confidence about future market

prospects. I am pleased to report that

our share of the execution-only market

as reported by Compeer, the

stockbroking industry analyst, has

also increased.

At the same time, the quality of our

revenue remains high, and recurring

income (mainly fees and interest) forms

59% of income.

These positive operating statistics have

continued into 2005.

Our plans for 2005 place emphasis on

three new areas: the Child Trust Fund

(launched in January 2005 and effective

from April 2005), regular savings and

wider investor access to collective

investment funds.

Chief Executive operating review

We have

placed a significant

focus over the past

year on preparing

for a new stage

of business

development,

centred on further

developing our

own-brand

services for private

investors.

Annual report & accounts 2004 Chief Executive operating review 9

Meanwhile our emphasis on financial

education is significant and growing,

with our Shares4Schools programme

now in its second year (33 schools are

competing in the competition that ends

in June 2005: visit

www.shares4schools.org for details),

and with board participation on pfeg

(the Personal Finance Education Group).

Corporate services

2004 has featured a number of notable

highlights. Our small shareholder

programmes have been in action a

number of times, from services for

Centrica in the first quarter to those for

Rank in the last quarter. We have

provided assistance for Abbey

shareholders in the run-up to its

takeover by Santander.

ShareMark has seen listing of some

significant new companies including

Radio Taxis, our first 'internal market'

dedicated to a defined group of

taxi-drivers and employees, and Get

Mapping, a well-known UK

technology stock.

Planning by InvestBX, the proposed

West Midlands regional market, has

taken longer than expected but it is

now on track for starting operations in

2005 and will be running on the

ShareMark platform.

Meanwhile in May we introduced

ShareStream, our dedicated New Issue

and Receiving Agent service for smaller

companies: this assisted in a number of

corporate fund-raising programmes

during 2004, including Translution

Holdings plc, an early stage language

translation company, and Avisis, who

produce Interactive Video Weighing

Scales. ShareStream has also been used

to market a number of Venture Capital

Trusts and Enterprise Investment

Scheme Funds, and in conjunction with

our Fund Administration service allows

us to offer EIS funds a comprehensive

fund raising and administration package.

Board Changes

It is our intention that our executive

board will be strengthened over the

next few months as we seek to recruit

a Sales and Marketing Director in order

to accelerate our growth. This will

entail a re-organisation of

responsibilities with less differentiation

between the retail and corporate sides

of the company: this appropriately

recognises the fact that, even when our

business relationships begin with other

companies or business introducers, it is

still employees and personal investors

to whom we provide services.

Meanwhile, Sandra Kelly, our new

Group Finance Director, has brought a

renewed sense of purpose to our

planning and financial analysis

disciplines which will further improve

our organisation.

Our People

The executive directors join with

Sir Martin in his thanks to our team in

Aylesbury who have played a key role

in the development of the business and

will continue to do so.

A number of new appointments have

been made to strengthen

administrative and sales activities, and

Share of ‘execution-only’ market

1998 1999 2000 2001 2002 2003 2004

3.5%

3%

2.5%

2%

1.5%

1%

0.5%

0%

Execution-only trades TSC share

6

5

4

3

2

1

0Exec

utio

n-on

ly t

rade

s (m

illio

ns)

Mar

ket

shar

e

10 Chief Executive operating review Annual report & accounts 2004

our long-term management training

project underway throughout 2004 is

complementing the core specialist skills

upon which much of our past success

has been built.

Meanwhile the investment

management function has been out-

sourced to BFS since April 2004, and

additional IT investment will be made

in 2005 to streamline the operating

environment.

Outlook

As Sir Martin reports in his statement,

we will place a new emphasis on

promotion of our own-brand

investment services in 2005. The

www.share.com website is being

substantially re-written, with

considerable focus on investors' need

for information, advice and guidance.

Meanwhile, market research during

2004 has helped us position our

services more appropriately to enable

the business to benefit further from

rising investor interest.

An issue which has concerned us for

many years is that of shareholder rights

for nominee-based investors. Where

shares are registered in the name of a

nominee company, it is at present the

nominee and not the beneficial owner

who legally has the right to attend

meetings, to vote and to receive

company documents. We are delighted

that real progress is being made in this

area, with an industry working group

including DTI and HM Treasury observers

recommending a dual approach of

abolition of share certificates and

enfranchisement of nominee

shareholders. The necessary changes to

Company Law should be put in place

during 2005, effective for the 2007

company reporting season, after the

necessary operational and systems

developments have been made.

Further major changes are taking place

at the London Stock Exchange as a

result of takeover activity and with

market dealing arrangements in

anticipation of new European directives.

The approach by Deutsche Bourse led

to a strong rise in London Stock

Exchange plc's share price, and we have

taken some advantage of this with a

sale of 5% of our remaining

shareholding just before Christmas

2004. We have sold a further 239,995

shares since the year end. However full

realisation of our holding at present

prices, should your board decide to take

Chief Executive operating review continued

The year

ahead will present

both opportunities

for growth and

challenges to

ensure that the

environment for

personal savings

and investment is

kept open and

accessible.

Annual report & accounts 2004 Chief Executive operating review 11

these services as principal traders,

proposed European regulation may

require all instructions to be routed to

central order book services which are

not well-suited to retail size deals. This

would add unnecessary costs to

investors. We shall be vigilant during

2005 to guard against any further

potential additional costs to investors in

this respect.

The year ahead will present both

opportunities for growth and challenges

to ensure that the environment for

personal savings and investment is kept

open and accessible. Full-year results in

2005 are likely to be impacted by a

number of special factors, including

sales of London Stock Exchange shares

and additional investment for future

growth. However, your Board considers

that the Group is well-placed to take

advantage of these and other

opportunities, and looks forward to

bringing increasing benefits to both

shareholders and customers in the

period ahead.

Gavin Oldham, Chief Executive

22 February 2005

that course, would bring further

exceptional profit in 2005 (see note 13

for the year end position), and we

continue to monitor the position closely.

Shortly before this takeover approach

was announced the London Stock

Exchange sought to pre-empt the new

European Markets in Financial

Instruments Directive to some degree

by making significant changes to the

trading systems. It is becoming

increasingly clear that these and other

initiatives may put the system of 'Retail

Service Providers' (who operate retail

market trading services) under threat.

Whereas market-makers currently offer

12 Financial review Annual report & accounts 2004

Share plc's principal operating company

is The Share Centre Limited which is

authorised and regulated by the

Financial Services Authority.

The Share Centre is principally involved

in the provision of retail stockbroking

services to the private investor and this

activity represents approximately 90%

of the revenue of the Group. The

remainder of the revenue is derived

from investor services provided to the

corporate customer, fund management,

and employee share plan

administration.

Turnover

The Group's turnover increased by 7.5%

to £8.9 million (2003: £8.3 million)

principally due to the rise in dealing

commission flowing from an increase in

dealing activity. We have continued to

see this increase in activity sustained

since the year end.

The Group remains strongly focused on

the quality of its revenue and is keen to

encourage revenue of a recurring

nature that arises from fees and

interest earned. It was therefore

particularly encouraging that not only

did the overall revenue increase but the

amount of recurring revenue rose by

£0.4 million and now represents 59%

of total turnover (2003: 58%).

Net profit before tax

As stated in our half year

announcement, we have taken

advantage of the special dividend paid

on our holding of shares in the London

Stock Exchange to invest in the further

development of our business, preparing

the groundwork for brand development

and promotion which is taking place

during 2005.

By re-investing these proceeds into the

development of a new brand identity,

enhancing the functionality of our web

site and other strategic activities, the

cost of this activity has not had a

significantly adverse financial impact on

the overall profitability of the Group

during this year.

However, these costs are included within

the overall administrative expenses and

explain the decline in operating margin

from 16% to 13%.

Employee Benefit Reserve

We continue to recognise the

importance of developing a culture

where the employees' interests are

aligned with those of the Group's

shareholders. Through the use of profit

sharing, the Group's share options

scheme and the Share Incentive Plan

Financial review

2000 2001 2002 2003 2004

109876543210

£ m

illio

n

Total turnover

Annual report & accounts 2004 Financial review

we are able to encourage and develop

a wide understanding of our business

objectives, a strong sense of loyalty and

the active contribution of our

employees to growing our business in

pursuit of greater shareholder value.

The use of such share-based incentive

arrangements resulted in a profit and

loss impact across the Group in 2004 of

£0.2 million relating to

the charge for the cost of options

(difference between the value of

shares acquired and the value of the

options at the time of grant); and

the value of matching shares

contributed to individuals' Share

Incentive Plans.

Prior year adjustment

The salaries of the Group are paid in

the month following the month in

which the remuneration is earned. In

previous years no accrual had been

made for salaries earned but not yet

paid. The amount now charged to the

profit and loss account represents the

amounts earned by our employees

during the year irrespective of payment

date and this change in policy resulted

in a one-off charge of £0.1 million net

of tax against reserves.

Capital Structure, Treasury Policy and

Capital Requirement

For regulatory purposes, the Group is

required to maintain a net asset surplus

so that it can always meet its liabilities.

The capital requirement that the

Financial Services Authority looks to is

based on a quarter of the previous

year's expenditure plus an addition for

counterparty and other risks. We have

maintained a surplus of over 300% of

this capital requirement throughout the

majority of the year.

We are aware that, as part of the

implementation of Basel II and the

Capital Requirements Directive,

additional capital may need to be

allocated to cover any potential risks

this new legislation specifies. We are

following closely the progress of these

requirements and their potential impact

upon the stockbroking environment.

The Group's treasury policy remains

straightforward and its main objective is

The Group

remains strongly

focused on the

quality of its

revenue and is

keen to encourage

revenue of a

recurring nature

that arises from

fees and interest

earned.

2000 2001 2002 2003 2004

3.5

3.0

2.5

2.0

1.5

1.0

0.5

0

£ m

illio

n

Net profit before tax

13

14 Financial Review Annual report & accounts 2004

to protect post-tax cash flows of the

core business from the adverse effects

of financial risks. The main risk arising

from the Group's operations is that of

interest rate fluctuations, and protection

has been secured against such risk until

November 2007. The Group is risk

adverse and is therefore only

concerned with avoiding actual losses

or cost increases and not with the

opportunity costs of potential gains.

The use of derivatives is described in

more detail in note 22 to the accounts.

Dividends

We maintain a prudent basis for the

distribution of any dividend. This

ensures sufficient surpluses are retained

within the Group allowing us the

flexibility to take advantage of any

acquisition opportunities and to pursue

the Group's growth policy. The

dividend has been increased to 0.1452

pence per share.

Principal risks and uncertainties

The Group's principal operational risk

arises from the fact that our income is

closely linked to Stock Exchange

transaction volumes.

Operating risk is constantly monitored

by the Board and senior management

and is discussed in more detail in the

Corporate Governance Report on pages

18 and 19.

International accounting standards

The International Financial Reporting

Standards ("IFRS") are applicable to all

listed companies for accounting periods

commencing on or after 1 January

2005. A thorough review has been

undertaken to establish the effect on

the Group.

Whilst Share plc is not listed on a

recognised exchange we believe it

appropriate and in the best interests of

our shareholders to adopt best practice

applicable to companies at a

commensurate stage of development

since shares in your company are

traded on ShareMark. We shall follow

the approach recommended for AIM-

listed companies and therefore intend

to apply IFRS for our accounting year

ended 31 December 2006.

Sandra Kelly, Finance Director

22 February 2005

Financial review continued

Directors’ report and financial statements

Report of directors 16

Corporate governance 18

Directors’ remuneration report 20

Independent auditor’s report 24

Consolidated profit and loss account 25

Statement of recognised gaines

and losses 25

Consolidated balance sheets 26

Consolidated cash flow statement 27

Notes to the cash flow statement 28

Notes to the financial statements 29

Please click below on the page you would like to view

16 Report of directors Annual report & accounts 2004

Report of directorsThe directors submit their report and the audited accounts for the year ended 31 December 2004.

Principal activities

The business of the Group is made up of two principal fully integrated activities:

the provision of custodial administration whereby the Company acts as nominee on a number of different types of

accounts including Share Accounts, PEPs and ISAs; and

a low-cost dealing service to allow customers holding accounts to trade in their shares.

Review of the business

A review of the business during the year is given in the Chairman's statement, in the Chief Executive's Operating review and in

the Financial review. Included in these reviews are references to the Group's future prospects and these statements should be

read as part of this report.

Results for the year

The results for the year ended 31 December 2004 and the financial position at that date are set out in the financial statements.

The profit after taxation of the Group amounted to £1,710,000 (2003: £1,190,000)

Dividends and transfers to reserves

A final dividend of £222,000 is proposed (2003: £201,000). The retained profit after tax of £1,489,000 (2003: £989,000) has

been transferred to reserves.

Directors and their interests

The directors who were in office at the end of the year and their interests in the 0.5p ordinary shares of the Company were as

follows:

2004 20031

Sir Martin Jacomb (Chairman) 173,811 125,441

G D R Oldham 124,767,937 124,716,410

P M Forster 848,850 1,601,707

M J Helliwell 1,931,439 1,947,225

S C Kelly2 8,034 -

R I Tolkien - -

I P Wallace 106,242 77,028

1. Or date of appointment where later than 31 December 2003 2. Appointed 1 March 2004

In addition to the above R E Wilson resigned as director on 26 March 2004 and Dr N M Coutts resigned as director on 21 May 2004.

Details of the directors' share options are included in the directors' remuneration report and none of the directors had an

interest in any shares of any other Group company.

Share capital

As at 21 February 2005 the following persons or entities had notified the Company in accordance with Section 198 - 208 of the

Companies Act 1985 that they held an interest of three percent or more in the issued share capital of the Company:

Cuillin Investments Limited 4%

Statement of directors' responsibilities

UK company law requires the directors to prepare financial statements for each financial year that give a true and fair view of

the state of affairs of the Company and the Group for that period. In preparing those financial statements, the directors are

required to:

Annual report & accounts 2004 Report of directors

Select suitable accounting policies and then apply them consistently;

Make judgements and estimates that are reasonable and prudent;

Prepare the financial statements on a going concern basis unless it is inappropriate to presume that the Group will

continue in business; and

State whether applicable Accounting Standards have been followed, subject to any material departures disclosed and

explained in the financial statements

The directors are responsible for keeping proper accounting records which disclose with reasonable accuracy at any time the

financial position of the Company and the Group and to enable them to ensure that the financial statements comply with the

Companies Act 1985. They are also responsible for the system of internal control for safeguarding the assets of the Company

and the Group and hence for taking reasonable steps for the prevention and detection of fraud and other irregularities.

The maintenance and integrity of the Group's website is the responsibility of the directors; the work of the auditors does not

involve a consideration of these matters and accordingly, the auditors accept no responsibility for any changes that may have

occurred to the information contained in the financial statements as they are presented on the website.

Policy on payment to suppliers

The Group agrees terms and conditions for its business transactions with suppliers. Payment is then made on these terms,

subject to the terms and conditions being met by the supplier. At 31 December 2004 Group trade creditors represented

approximately 38 days (2003: 32 days).

Charitable and political donations

During the year the Group made charitable donations of £6,835 (2003: £3,597). The amount donated was to the Tsunami

appeal.

No political donations were made in the year (2003: £Nil).

Employment policies

The Group encourages employees to participate in its success through performance based bonus arrangements and through its

use of share based incentive arrangements among its senior employees. To further this overall equity participation the

Company offers a Share Incentive Plan, which allows every employee to purchase up to £1,500 worth of the Company's shares

per annum on a tax efficient basis. These are purchased on a monthly basis and held in trust and the shares acquired by the

employee are supplemented by the Company on the basis of two matching shares for each employee's share.

Employees are kept informed of the Group's progress by quarterly presentations.

It is the Group's policy that no employee, or applicant for employment, receives less favourable treatment (including training

and development, recruitment and promotion) by the Group or any other employee, on any grounds including disability, sex,

race or religion nor be disadvantaged by conditions, management attitudes, behaviour or requirements that cannot be justified.

Independent auditors

The auditors, Deloitte and Touche LLP, will be proposed for re-appointment in accordance with Section 385 of the Companies

Act 1985.

On behalf of the Board

Sir Martin Jacomb, Chairman

22 February 2005

17

18 Corporate governance Annual report & accounts 2004

Corporate governanceThe directors acknowledge the importance of the Combined Code and have complied with its requirements so far as is

appropriate to a Group the size and nature of Share plc. Although not required to do so, the directors have decided to provided

corporate governance disclosures comparable with those that would be voluntarily provided by an AIM-listed company.

Board

For the majority of the year the Board has consisted of five executive directors and two non-executive directors whose

biographies are set out on pages 6 to 7. These biographies demonstrate a range of experience and sufficient calibre to bring

independent judgment on issues of strategy and performance which is vital to the success of the Group. The Board is

responsible to shareholders for the proper management of the Group. A statement of directors' responsibilities in respect of

the financial statements is set out on page 16 and a statement of going concern is set out below.

The structure of the Board and its sub committees is regularly reviewed and these committees have been structured during

the year:

Meeting Attendees Chairman Frequency Purpose

Board Board directors Chairman Quarterly Group strategy

and regulatory

control

Executive Executive directors Chief Executive Fortnightly Operational

management of

the Group

Audit Non-executive Senior non- Triannially Review of

directors executive internal control,

compliance,

effectiveness and

costs of audit

Risk Compliance director Compliance Biannually Monitoring of

Finance director director Group risk

Operations director

Remuneration Non-executive directors Chairman Biannually Structure of Board

Chief executive remuneration

Risk management and internal control

The Board has overall responsibility for risk management and internal controls. The schedule of matters reserved for the Board

ensures that the directors maintain full and effective control over all significant strategic, financial, organisational and

compliance issues.

The directors have delegated to executive management the establishment and implementation of a system of internal controls

appropriate to the regulatory and business environment in which it operates. This system of controls have been developed and

refined over time to meet the Group's current and future needs and the risks and opportunities to which it is exposed. These

controls include but are not limited to:

Strategic planning and the related annual planning and quarterly re-forecasting process including the ongoing review by the

Board of the Group's strategies

19Annual report & accounts 2004 Corporate governance

The definition of the organisational structure and appropriate delegation of authorities to operational management

The internal financial reporting and review of financial results and other key performance criteria

Accounting and financial reporting policies to ensure the consistency, integrity and accuracy of the Group's financial records

Regulatory control and compliance and application of the FSA rulebook

Client asset control and reconciliation

Internal control and compliance reviews providing formal monitoring reporting of weaknesses in department processes

Going concern

The directors have satisfied themselves that at the date of approval of these financial statements the Group has adequate

resources to continue in operational existence for the foreseeable future, and for this reason the financial statements for the

year ended 31 December 2004 have been prepared on a going concern basis.

Relations with shareholders

The Board recognises the importance of communications with shareholders. The Chairman's statement, the Chief Executive's

operating review and the financial review in these financial statements include a detailed review of the business and future

developments.

The Board uses the Annual General Meeting to communicate with investors and welcomes their participation and all directors

are available at Annual General Meetings to answer questions. The proxy votes cast on each resolution proposed at general

meetings are disclosed at those meetings.

20 Director’s remuneration report Annual report & accounts 2004

Directors' remuneration reportAs stated in the Corporate Governance Statement on pages 18 to 19, the Company acknowledges the importance of the

Combined Code and has complied with its requirements so far as is appropriate to a Group of the size and nature of Share plc.

This directors' remuneration report is made voluntarily but complies with the Directors' Remuneration Report Regulations 2002

and describes how the Board has applied the principles of good governance relating to directors' remuneration.

The Regulations require auditors to report to the Company's members on the "auditable part" of the directors' remuneration

and to state whether in their opinion that part of the report has been properly prepared in accordance with the Companies Act

1985 (as amended by the Regulations). The report has therefore been divided into separate sections for audited and

unaudited information.

Unaudited Information

Remuneration committee

The Remuneration Committee has responsibility for making recommendations to the Board on the Group's general policy on

remuneration and for specific packages for individual executive directors.

The membership of the committee is:

Sir Martin Jacomb (Chairman)

G D R Oldham

R I Tolkien

No director plays any part in any discussions about their own remuneration. There have been no changes to the composition

of the Committee since 31 December 2003 other than the resignation of Dr N M Coutts.

Remuneration policy

The Company's policy is to provide remuneration packages to attract, motivate and retain directors of the right calibre who will

make a significant contribution to the performance of the Company. The Board's policy for executive remuneration is designed

to:

Ensure the directors' rewards are competitive when compared to similar companies in terms of size and/or industry

Give executive directors the opportunity to increase their earnings by achieving and exceeding key performance objectives

Base salary and benefits in kind

An executive director's basic salary is set by the committee to reflect the director's responsibility, experience and market

conditions. The basic salary is reviewed annually with effect from 9 April.

The benefits in kind provided include medical cover, life assurance and car allowance.

Sales commission

P M Forster's contract was changed during the year such that he now receives a basic salary plus a sales commission linked to

the value of business introduced and no longer benefits from any profit share distribution.

Profit share

The Company operates a profit sharing arrangement for its executive directors who do not receive sales commission thereby

ensuring that the interests of shareholders and executives in sustaining increased profits are closely aligned and risks and

rewards are shared.

Pensions

Executive directors are responsible for their own pension arrangements and are eligible to receive 8% of their annual salary

payable into their personal money purchase pension scheme.

21Annual report & accounts 2004 Director’s remuneration report

Share Options

Executive directors are eligible to participate in the Company's share option schemes. Details of the schemes are provided in

note 19 to the financial statements. The committee ensures that awards are made within the overall limits authorised by the

shareholders and at an appropriate level for an individual, taking into account their role, contribution to the business, previous

option grants and market practice.

Share incentive scheme

The Company operates a Share Incentive Plan which is open to all employees. The executive directors, with the exception of

G D R Oldham, are eligible to participate in the plan and their interests in the shares of the Company are as set out in the

Report of Directors on page 16.

G D R Oldham holds a controlling interest in the Company is not eligible to participate in the scheme and therefore receives an

additional remuneration payment equivalent to the value of the contribution that the Company would have made had he been

entitled to participate in the scheme.

Service contracts

The Company has entered into the following service contracts with its directors

Date of service agreement Notice period

(months)

Sir M Jacomb 25 February 2002 1

G D R Oldham 5 February 2000 12

P M Forster 15 September 2004 6

M J Helliwell 1 September 1998 6

S C Kelly 2 February 2004 6

R I Tolkien 25 January 2005 1

I P Wallace 11 December 1999 6

In the event of termination of employment of any of the directors, compensation amounting to that falling due under the

notice period would be payable.

Non-executive directors

The Board determines the level of non-executive remuneration after considering fee levels in comparable businesses. A basic

fee is set for normal duties and supplementary fees are paid for additional duties.

Whilst the Combined Code suggests that to retain their independence, non-executive directors should not be able to participate

in the Company's share options schemes, the Company believes that the size of the share options granted to its non-executive

directors does not affect their independence.

22 Director’s remuneration report Annual report & accounts 2004

Total shareholder return performance graph

This shows the growth of a hypothetical holding in Share plc ordinary shares relative to the FTSE All Share since Share plc

floated on ShareMark in June 2000 and assumes that dividends are reinvested on receipt. This index is considered to be the

most relevant index for total shareholder return comparatives since the majority of revenue is derived from transactions in

shares quoted on the FTSE All Share. The total shareholder return is the share price plus the cumulative dividends over the

period of the graph.

Audited Information

Directors' emoluments

Salary/ Benefits Sales One off Profit 2004 2004 2003 2003

fees Commission payment share Total Pension Total Pension

£ £ £ £ £ £ £ £ £

Sir Martin Jacomb 12,000 - - - - 12,000 - 12,000 -

G D R Oldham 95,540 5,259 - 14,5781 63,961 179,338 - 126,326 7,120

P M Forster 66,586 2,450 1,387 30,0002 34,187 134,610 3,346 102,862 5,737

M J Helliwell 85,139 4,200 - - 57,625 146,964 6,297 114,317 6,066

S C Kelly 65,976 3,262 - - 41,178 110,416 3,967 - -

R I Tolkien 15,000 - - - - 15,000 - 15,326 -

I P Wallace 83,667 5,259 - - 56,782 145,708 6,587 110,023 6,339

Directors leaving the Board in 2004

Dr N M Coutts 5,269 - - - - 5,269 - 9,912 -

R E Wilson 22,774 1,400 - - 4,804 28,978 6,701 109,771 6,071

451,951 21,830 1,387 44,578 258,537 778,283 26,898 600,537 31,333

Profit share has been included as provided in the financial statements.

1. This additional remuneration payment is equivalent to the value of the contribution that the Company would have made had G D R Oldhambeen entitled to participate in the Company's Share Incentive Plan.

2. This relates to compensation for change in the terms of P M Forster's service contract.

Jun 00 Dec 00 Jun 01 Dec 01 Jun 02 Dec 02 Jun 03 Dec 03 Jun 04 Dec 04

120

100

80

60

40

20

0

All Share The Share Centre

Annual report & accounts 2004 Director’s remuneration report

Directors' share options

Under the Company's executive share option scheme and Enterprise Management Incentive scheme, as at 31 December 2004

options were held by directors over Ordinary 0.5p shares as follows:

At 1 Jan Granted Redeemed At 31 Dec Date of Exercise Date first Expiry

2004 in year in year 2004 grant price exercisable

Sir Martin Jacomb (U) 165,000 - - 165,000 15/11/01 20p 21/06/04 15/11/11

S C Kelly (E) - 50,000 - 50,000 7/04/04 16p 7/04/07 7/04/14

S C Kelly (E) - 50,000 - 50,000 7/04/04 16p 7/10/08 7/04/14

S C Kelly (E) - 50,000 - 50,000 7/04/04 16p 7/04/10 7/04/14

R I Tolkien (U) 100,000 - - 100,000 21/3/03 12p 21/03/06 22/03/13

I P Wallace (A) 150,000 - (150,000) - 28/01/00 4p 28/01/03 28/01/10

I P Wallace (A) 61,111 - - 61,111 22/06/01 36p 21/06/04 20/06/11

I P Wallace (E) 138,889 - - 138,889 15/11/01 20p 21/06/04 15/11/11

I P Wallace (E) 200,000 - - 200,000 15/11/01 20p 21/12/05 15/11/11

I P Wallace (E) 11,111 - - 11,111 15/11/01 20p 21/06/07 22/03/13

I P Wallace (U) 207,778 - - 207,778 15/11/01 20p 21/06/07 14/11/11

I P Wallace (U) 200,000 - - 200,000 21/03/03 12p 21/03/06 22/03/13

I P Wallace (U) 200,000 - - 200,000 21/03/03 12p 21/03/07 22/03/13

I P Wallace (U) 200,000 - - 200,000 21/03/03 12p 21/03/08 22/03/13

TOTAL 1,633,889 150,000 (150,000) 1,633,889

(A) Share options granted under the Company's approved share option scheme(E) Share options granted under the Company's EMI share option scheme(U) Share options granted under the Company's unapproved share option scheme

The market price of the Company's shares when the options were exercised was:

Date of exercise Number of options exercised Market price

2 March 2004 50,000 16p20 August 2004 100,000 15p

The market price of the Company's ordinary shares at 31 December 2004 was 14 pence and their price had ranged from 14p

to 21p during the financial year.

There are no performance conditions that have to be fulfilled before share options can be exercised.

Resolution

A resolution to shareholders to adopt the directors' remuneration report will be put forward at the Annual General Meeting.

Approved by the Board and signed on its behalf

Sir Martin Jacomb,

Remuneration Committee Chairman

22 February 2005

23

24 Independent auditor’s report to the members of Share plc Annual report & accounts 2004

Independent auditor’s report to the members of Share plcWe have audited the financial statements of Share plc for the year ended 31 December 2004 which comprise the consolidated

profit and loss account, the balance sheets, the consolidated cash flow statement, the notes to the consolidated cash flow

statement, the statement of total recognised gains and losses and the related notes 1 to 25. 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.

Respective responsibilities of directors and auditors

As described in the statement of directors' responsibilities, the Company's directors are responsible for the preparation of the

financial statements in accordance with applicable United Kingdom law and accounting standards. They are also responsible for

the preparation of the other information contained in the annual report including the directors' remuneration report. Our

responsibility is to audit the financial statements and the part of the directors' remuneration report described as having been

audited in accordance with relevant United Kingdom legal and regulatory requirements and auditing standards.

We report to you our opinion as to whether the financial statements and the part of the directors' remuneration report

described as having been audited give a true and fair view and are properly prepared in accordance with the Companies Act

1985. We also report if, in our opinion, the directors' report is not consistent with the financial statements, if 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 transactions with the Company and other members

of the Group is not disclosed.

We read the directors' report and the other information contained in the annual report for the above year as described in the

contents section including the unaudited part of the directors' remuneration report and consider the implications for our report if

we become aware of any apparent misstatements or material inconsistencies with the financial statements.

Basis of audit opinion

We conducted our audit in accordance with United Kingdom auditing standards 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 circumstances of the Company and the Group, 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.

Opinion

In our opinion

the financial statements give a true and fair view of the state of affairs of the Company and the Group as at 31 December

2004 and of the profit of the Group for the year then ended; and

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.

Deloitte & Touche LLP, Chartered Accountants and Registered Auditors London

22 February 2005

Annual report & accounts 2004 Consolidated profit and loss account

For the year ended 31 December 2004

Note 2004 2003

(Restated)

£'000 £'000

Turnover 3 8,907 8,283

Administrative expenses (7,743) (6,969)

Operating profit 6 1,164 1,314

Profit on sale of fixed asset investments 187 -

Dividend receivable 523 44

Interest receivable 456 341

Interest payable 7 (5) (12)

Profit on ordinary activities before taxation 2,325 1,687

Taxation 8 (615) (497)

Profit on ordinary activities after taxation 1,710 1,190

Distribution to shareholders 9 (221) (201)

Retained profit for the period 1,489 989

Earnings per share 10 1.1p 0.8p

Diluted earnings per share 10 1.1p 0.7p

All results are in respect of continuing operations.

Statement of total recognised gains and losses

Profit for the year 1,489 989

Prior year adjustment 11 (114) -

Total recognised gains and losses since last annual accounts 1,375 989

The notes on pages 29 to 39 form part of these financial statements.

25

Consolidated profit and loss account

26 Consolidated balance sheets Annual report & accounts 2004

Group Company

Notes 2004 2003 2004 2003(restated) (restated)

£'000 £'000 £'000 £'000

Fixed assets

Tangible 12 136 342 - -

Investments 13 217 217 264 254

Intangible 14 116 132 - -

469 691 264 254

Current assets

Debtors 15 4,884 4,251 928 903

Cash at bank and in hand 16 8,931 7,281 25 100

13,815 11,532 953 1,003

Creditors: amounts falling due within one year 17 (6,156) (5,404) (312) (355)

Net current assets 7,659 6,128 641 648

Total assets less current liabilities 8,128 6,819 905 902

Capital and reserves

Called up share capital 18 798 798 798 798

Share premium account 20 29 29 29 29

Employee benefit reserve 20,21 (249) (183) - -

Profit and loss account 20 7,550 6,175 78 75

Equity shareholders' funds 8,128 6,819 905 902

These financial statements were approved by the Board on 22 February 2005.

Signed on behalf of the Board

Sir Martin Jacomb

22 February 2005

The notes on pages 29 to 39 form part of these financial statements.

Consolidated balance sheets

Annual report & accounts 2004 Consolidated cash flow statement

Notes 2004 2003(restated)

£'000 £'000

Net cash inflow from operating activities a 1,613 2,273

Interest received 456 341

Interest paid (5) (12)

Dividend received 523 44

Net cash inflow from returns on investments and servicing of finance 974 373

Taxation

Tax paid (585) (448)

Capital expenditure

Payments to acquire tangible fixed assets (67) (69)

Receipts from sale of fixed assets - 5

Receipts from sale of investments 187 3

Payments to acquire shares for employee benefit trust (313) (183)

Receipts from sale of shares from the employee benefit trust to

employees exercising share options 133 -

Net cash outflow from capital expenditure (60) (244)

Equity dividends paid (292) (155)

Net cash inflow before financing 1,650 1,799

Financing

Issue of ordinary share capital - 48

Repayment of subordinated loan - (100)

Net cash (outflow) from financing - (52)

Increase in cash 1,650 1,747

The notes on pages 29 to 39 form part of these financial statements.

27

Consolidated cash flow statement

28 Notes to the cash flow statement Annual report & accounts 2004

a Reconciliation of operating profit to net cash inflow from operating activities

2004 2003£'000 £'000

Operating profit 1,164 1,318

Depreciation and amortisation charges 280 292

Loss/(profit) on sale of fixed assets 9 (1)

(Increase) in debtors (633) (2,113)

Increase in creditors falling due within one year 793 2,777

Net cash inflow from operating activities 1,613 2,273

b Analysis of changes in net fundsAt 1 January At 31 December

2004 Cash flows 2004£'000 £'000 £'000

Cash at bank and in hand 7,281 1,650 8,931

Debt payable in less than one year (50) - (50)

Total 7,231 1,650 8,881

c Reconciliation of net cash flow to movement in net funds

£'000

Change in net funds 1,650

Net funds at 1 January 2004 7,231

Net funds at 31 December 2004 8,881

Notes to the cash flow statement

Annual report & accounts 2004 Notes to the financial statements

1 Accounting policies

The financial statements are prepared in accordance with UK law and applicable accounting standards. The particular

accounting policies adopted are described below.

Accounting convention

The financial statements are prepared under the historical cost convention.

Consolidation

The Group accounts consolidate the financial statements of the Company and its subsidiaries, which all make up their financial

statements to 31 December 2004.

Turnover

Turnover is recognised on an accruals basis and primarily comprises gross commission, turn on client money and fees earned in

the provision of broking and custodian services and is stated after deducting value added tax. The Group operates within one

main geographical market, being the United Kingdom.

Tangible fixed assets

Depreciation is provided on cost in equal annual instalments over the estimated useful lives of the assets. The rates of

depreciation are as follows:

Fixtures, fittings and equipment, computers and motor vehicles 25% per annum

Investments

Investments held as fixed assets are stated at cost less provision for any impairment.

Intangible assets

The Group's investment in the share.com domain name is stated at cost and is amortised over 10 years on a straight line basis

from the year of completion of the transaction purchase.

Operating leases

Operating lease rentals are charged to profit and loss in equal amounts over the lease term.

Interest rate derivatives

Derivative instruments are used solely by the Group to reduce or eliminate exposure to interest rate risks. Derivative

instruments used were confined solely to interest rate caps. Derivative instruments are considered to be hedges because they

are used to reduce the risk profile of an existing underlying exposure. Premiums arising on the purchase of derivative

instruments are amortised over the shorter of the life of the instrument or the life of the underlying exposure.

Pension scheme

If requested, the Group contributes 8% of the employee's gross salary to a defined contribution pension scheme of the

employee's choice. Contributions are charged to the profit and loss account as they become payable. The assets of these

schemes are held separately from those of the Group in independently administered funds.

Balances with clients and counterparties

In accordance with market practise, certain balances with clients, Stock Exchange member firms and settlement offices are

included in debtors and creditors gross for their unsettled bought and sold transactions respectively.

Deferred taxation

Deferred taxation is provided in full on timing differences that result in an obligation at the balance sheet date to pay more tax,

or a right to pay less tax, at a future date, at rates expected to apply when they crystallise based on current tax rates and law.

Timing differences arise from the inclusion of items of income and expenditure in taxation computations in periods different

from those in which they are included in financial statements.

Deferred tax assets are recognised to the extent that it is regarded as more likely than not that they will be recovered.

Deferred tax assets and liabilities are not discounted.

Notes to the financial statements

29

30 Notes to the financial statements Annual report & accounts 2004

Purchase of shares for Employee Benefit Trust

During the year, the Group acquired a number of shares in Share plc, which are held by ShareSecure Ltd, a trustee provider,

100% owned by Share plc. This purchase was made to meet potential obligations arising from the issue of share options

made to employees. The Group has adopted the Accounting Standards Board Urgent Issues Task Force abstract 38

'Accounting for ESOP Trusts', and these transactions have been accounted for under this abstract. As such, the original cost of

investment has been deducted in arriving at shareholders' funds (the amounts are shown in a separate reserve, called

"Employee Benefit Reserve").

2 Parent Company profit and loss account

The Company has taken advantage of section 230 of the Companies Act 1985 not to present its own profit and loss account.

Of the consolidated profit for the financial year, a profit of £3,000 (2003: £48,000) has been dealt with in the financial

statements of the Company.

3 Turnover

Turnover is derived from stockbroking operations in the United Kingdom.

4 Group Staff Costs

2004 2003Number Number

The average number of staff employed by the Group including

executive directors but excluding non-executive directors: 105 102

2004 2003£'000 £'000

Staff costs during the year (including executive directors)

Wages and salaries 2,563 2,194

Profit sharing bonus 455 263

Social security costs 332 259

Pension costs 195 167

3,545 2,883

5 Directors

Detailed information concerning directors' emoluments, share options is disclosed in the directors' remuneration report.

Annual report & accounts 2004 Notes to the financial statements

6 Operating profit2004 2003£'000 £'000

The operating profit is arrived at after charging

Depreciation of tangible fixed assets 264 274

Amortisation of goodwill and other intangibles 16 18

(Loss)/Profit on sale of fixed assets (9) 1

Auditors' remuneration - audit fees 44 38

Auditors' remuneration - taxation - 14

Auditors' remuneration - other services 3 3

Operating lease rentals - land and buildings 338 336

Operating lease rentals - other 63 93

7 Interest payable and similar charges

2004 2003£'000 £'000

Subordinated loan interest 5 4

Other loan interest - 3

Bank overdrafts and other borrowings repayable within five years - 5

5 12

8 Tax charge on profit on ordinary activities

2004 2003£'000 £'000

United Kingdom corporation tax (605) (506)

Foreign taxation (13) -

Adjustments in respect of prior years 3 9

(615) (497)

31

32 Notes to the financial statements Annual report & accounts 2004

8 Tax charge on profit on ordinary activities (continued)

The tax assessed for the current year is less than that resulting from applying the standard rate of corporation tax in the UK at

30% (2003: 30%) and the differences are explained below:

2004 2003£'000 £'000

Profit on ordinary activities before taxation 2,325 1,687

Tax at 30% thereon (698) (506)

Effects of

Items not deductible for tax purposes (4) (9)

Capital allowance in excess of depreciation (34) (25)

UK dividend income 144 13

Rate differences on current tax 1 21

Movement in short term timing differences (14) -

Foreign taxation (13) -

Adjustments in respect of prior years 3 9

(615) (497)

Deferred tax

A deferred tax asset has not been recognised in respect of timing differences relating to accelerated capital allowances as it is

uncertain that the asset will be recovered. The amount of the asset not recognised is £110,000 (2003: £68,000). The asset

would be recovered if suitable profits were to arise in future periods against which the asset would crystallise.

9 Distribution to shareholders

2004 2003£'000 £'000

Final dividend proposed:

0.1452p per ordinary 0.5p share (2003: 0.132p) 222 201

Less amount received on shares held via ESOP (1) -

221 201

Dividend payments to shareholders which total less than £3 are not paid away by the Company in accordance with the Articles

of Association.

10 Earnings per share

Basic earnings per share is calculated by dividing the earnings attributable to ordinary shareholders by the weighted average

number of ordinary shares during the year.

Diluted earnings per share is calculated by adjusting the weighted average number of ordinary shares in issue assuming

conversion of all potential dilutive ordinary shares. The potential ordinary shares consist of those share options and warrants

where the exercise price is less than the average price of the Company's ordinary shares during the year, and convertible loan

notes. The calculation results in a difference of only a small fraction of a penny, which is eliminated altogether in roundings.

Annual report & accounts 2004 Notes to the financial statements

10 Earnings per share (continued)

2004 2003£'000 £'000

Profit on ordinary activities after taxation 1,710 1,190

Loan interest on convertible loan stock (note 17) 4 4

Basic earnings attributable to ordinary shareholders 1,714 1,194

Diluted earnings attributable to ordinary shareholders 1,620 1,194

Number Number ('000) ('000)

Weighted average number of ordinary shares 161,430 160,223

Non vested shares held by employee share ownership trust (1,781) (1,270)

Basic earnings per share denominator 159,649 158,953

Effect of potential dilutive share options 384 343

Diluted earnings per share denominator 160,033 159,296

Basic earnings per share (pence) 1.1 0.8

Diluted earnings per share (pence) 1.1 0.7

11 Prior year adjustment

The salaries of the Group are paid in the month following the month that the remuneration is earned. In previous years no

accrual had been made for salaries earned but not yet paid. The amount now charged to the profit and loss account represents

the amounts earned by employees during the year irrespective of payment date.

As a result of these changes in accounting policy the comparatives have been restated as follows:

Creditors: Profit and loss Shareholders' Amounts falling loss account funds

due < 1 year reserve£'000 £'000 £'000

As previously reported at 31 December 2003 5,350 6,289 6,933

Reclassification (60) - -

Change in accounting policy

At 1 January 2003 110 (110) (110)

During year ended 31 December 2003 4 (4) (4)

31 December 2003 restated 5,404 6,175 6,819

The comparative balances for certain line items contained within 'creditors: amounts falling due within one year', 'debtors' and

'cash at bank and in hand' have been restated to reflect limited presentational adjustments in the current year.

33

34 Notes to the financial statements Annual report & accounts 2004

12 Tangible fixed assets

The GroupMotor Computer Computer Fixtures, Total

vehicles hardware software fittings andequipment

£'000 £'000 £'000 £'000 £'000

Cost

At 1 January 2004 12 708 897 355 1,972

Additions - 58 7 2 67

Disposals - (12) (904) (22) (938)

At 31 December 2004 12 754 - 335 1,101

Accumulated depreciation

At 1 January 2004 1 569 802 258 1,630

Charge for the year 3 85 102 74 264

Disposals - (9) (904) (16) (929)

At 31 December 2004 4 645 - 316 965

Net book value

At 31 December 2004 8 109 - 19 136

At 31 December 2003 11 139 95 97 342

13 Investments held as fixed assets

The Group

2004 2003£'000 £'000

Unlisted investment 217 217

Euroclear plc ("Euroclear")

The unlisted investment comprises 6,030 shares in Euroclear of one Euro each. These shares are stated at original cost

representing the investment made in Crestco Ltd which was acquired by Euroclear during 2002. In the directors' opinion, based

on the net asset value of Euroclear, the shares in Euroclear have a value greater than the underlying cost.

London Stock Exchange plc ("LSE")

The Group was also the beneficial owner of 651,429 (2003: 800,000) LSE ordinary shares of 5p each which have been included

at £nil cost (2003: £nil). The change in holding during the year reflects a share consolidation by LSE on 23 July 2004 on the

basis of six new shares for every seven existing shares held and a disposal of 34,285 new shares in December 2004.

At 31 December 2004 the Group's LSE shares had a market value of £3,778,000.

Annual report & accounts 2004 Notes to the financial statements

13 Investments held as fixed assets (continued)

The Company

2004 2003

£'000 £'000

Shares in subsidiaries 264 254

The Company has investments in the following subsidiary undertakings:

Subsidiary undertakings Principal activity Proportion of ordinary shares held by the Company

The Share Centre Limited Retail stockbroking 100%

The Share Centre (Administration Services) Limited Administration services 100%

The Shareholder Limited Publishing/mail order 100%

Share Nominees Limited Bare trustee nominee 100%*

Stock Academy Nominees Limited Bare trustee nominee 100%*

ShareSecure Limited Bare trustee 100%

Personal Retirement Account Limited Dormant 100%

ShareMark Limited Share trading market 100%

The Share Centre (Investment Management) Limited OEIC Authorised Corporate Director 100%

* Ordinary shares held by The Share Centre Limited

All the above companies are registered and incorporated in England and Wales.

35

36 Notes to the financial statements Annual report & accounts 2004

14 Intangible assets

The GroupGoodwill Share.com Total

domain name

Cost

At 1 January 2004 10 164 174

Disposals (10) - (10)

At 31 December 2004 - 164 164

Accumulated depreciation

At 1 January 2004 10 32 42

Additions - 16 16

Disposals (10) - (10)

At 31 December 2004 - 48 48

Net book value

At 31 December 2004 - 116 116

At 31 December 2003 - 132 132

15 Debtors

Group Company

2004 2003 2004 2003£'000 £'000 £'000 £'000

Trade debtors 3,762 3,144 - -

Amounts owed by Group undertakings:

By subsidiaries due in under one year - - 778 753

By subsidiaries due in over one year - - 150 150

Other debtors 21 22 - -

Prepayments and accrued income 1,101 1,085 - -

4,884 4,251 928 903

Annual report & accounts 2004 Notes to the financial statements

16 Cash at bank and in hand

Group Company

2004 2003 2004 2003£'000 £'000 £'000 £'000

Cash 7,634 5,919 25 100

Cash held on trust for clients (a) 1,297 1,362 - -

8,931 7,281 25 100

(a) This amount is held by The Share Centre Limited in trust on behalf of clients but may be used to complete settlement of

outstanding bargains and dividends due.

(b) At 31 December 2004 segregated deposit amounts held by the Group on behalf of clients in accordance with the client

money rules of the Financial Services Authority amounted to £56,604,000 (2003: £49,614,000). The Group has no

beneficial interest in these deposits and accordingly they are not included in the balance sheet.

17 Creditors: amounts falling due within one year

Group Company

2004 2003 2004 2003£'000 £'000 £'000 £'000

Trade creditors 4,146 3,706 - -

Corporation tax 334 304 - 12

Other taxation and social security 196 192 - -

Accruals and deferred income 1,030 711 40 -

Dividend proposed 222 293 222 293

Other creditors 178 148 -

Convertible loan stock 50 50 50 50

6,156 5,404 312 355

The convertible loan stock bears interest at 7.5% and is convertible to ordinary shares at the option of the holder at the rate of

£20 loan notes for 500 ordinary 0.5p shares after 25 December 1999 or on earlier flotation, or is redeemable at par between

22 December 2001 and 22 December 2005.

18 Called up share capital

Ordinary shares of 0.5p each

2004 2003

Number £'000 Number £'000

Authorised 300,000,000 1,500 300,000,000 1,500

Allotted, called up and fully paid 159,629,728 798 159,629,728 798

37

38 Notes to the financial statements Annual report & accounts 2004

19 Share options

At 31 December 2004 the following share options to subscribe for ordinary shares were outstanding:

Exercise period Exercise Unapproved Approved EMI scheme 2004 total 2003 totalprice share option share option

scheme schemeFirst date Last date Pence Number Number Number Number Number

29 Jul 1999 29 Jul 2006 1.1 - 125,000 - 125,000 350,000

6 Apr 2001 6 Apr 2008 1.1 - 250,000 - 250,000 693,750

18 Mar 2002 18 Mar 2009 1.1 - 175,000 - 175,000 512,500

28 Jan 2003 28 Jan 2010 4.0 - - - - 150,000

21 Jun 2004 21 Jun 2011 36.0 - 157,258 - 157,258 182,937

21 Jun 2004 15 Nov 2011 20.0 - - 138,889 138,889 138,889

15 Nov 2004 15 Nov 2011 20.0 372,778 - - 372,778 372,778

22 Dec 2004 22 Dec 2011 22.0 - - 173,245 173,245 215,266

22 Jun 2005 22 Jun 2012 16.0 - - 268,873 268,873 332,622

21 Dec 2005 15 Nov 2011 20.0 - - 200,000 200,000 200,000

22 Dec 2005 22 Dec 2012 10.0 - - 494,200 494,200 596,200

21 Mar 2006 21 Mar 2013 12.0 300,000 - - 300,000 300,000

22 Jun 2006 22 Jun 2013 14.0 - - 188,722 188,722 220,000

22 Dec 2006 22 Dec 2013 16.0 - - 189,458 189,458 220,000

21 Mar 2007 21 Mar 2013 12.0 200,000 - - 200,000 200,000

7 Apr 2007 7 Apr 2014 16.0 - - 50,000 50,000 -

21 Jun 2007 15 Nov 2011 20.0 - - 11,111 11,111 11,111

22 Jun 2007 22 Jun 2014 15.0 - - 182,514 182,514 -

22 Dec 2007 22 Dec 2017 14.0 - - 200,000 200,000 -

21 Mar 2008 21 Mar 2013 12.0 200,000 - - 200,000 200,000

7 Oct 2008 7 Apr 2014 16.0 - - 50,000 50,000 -

7 Apr 2010 7 Apr 2014 16.0 - - 50,000 50,000 -

1,072,778 707,258 2,197,012 3,977,048 4,896,053

20 Movement on consolidated shareholders' funds and statement of movements in reserves

The GroupTotal Issued Share Employee Profit

share premium benefit and loss capital account reserve account

£'000 £'000 £'000 £'000 £'000

At 1 January 2004 6,819 798 29 (183) 6,175

Purchase of ESOP shares (313) - - (313) -

Sale of ESOP shares 133 - - 133 -

Loss on sale of ESOP shares - - - 114 (114)

Retained profit for the period 1,711 - - - 1,489

At 31 December 2004 8,350 798 29 (249) 7,550

Annual report & accounts 2004 Notes to the financial statements

The CompanyProfit and loss account

£'000

At 1 January 2004 75

Retained profit for the financial year 3

At 31 December 2004 78

21 Employee benefit reserve

As explained in Note 1, the employee benefit reserve represents shares in Share plc purchased by ShareSecure Ltd, to meet

potential obligations arising from the issue of share options made to directors and employees.

2004 2003Number Average purchase Number Average purchase

price (pence) price (pence)

Ordinary shares of 0.5p each 1,781,366 14.0 1,182,082 15.5

22 Financial instruments and risk profile

An explanation of the role that financial instruments had during the year can be found in the Financial Review. Short term

debtors and creditors that meet the definitions of a financial asset or liability have not been disclosed as permitted under FRS

13 "Derivative and Other Financial Instruments".

The Group's financial assets and liabilities comprise of cash and liquid resources, and various other items such as trade debtors

and trade creditors that arise directly from its operations.

The Group has financed its operations through profits generated from the Group's activities. The Group's exposure arises from

falling interest rates. The Group has protected its rate of interest income using an interest rate swap for a three year period

commencing in November 2004.

Funds at the balance sheet date bear interest rates based on Base Rates.

23 Financial Commitments

2004 2003Land and Other Land and Otherbuildings buildings

£’000 £'000 £'000 £'000

Commitments due to be paid in the next 12 months

on operating leases which expire:

Within one year - 12 - 55

One - five years 336 17 336 -

24 Post balance sheet events

Since the year end, the Group has sold 239,995 shares in London Stock Exchange plc generating profits of £1.4 million.

25 Related party transactions

The Company has taken advantage of exemptions granted by FRS 8 not to disclose transactions with other Group companies.

There were no other related party transactions requiring disclosure.

No material transactions were undertaken between the Group companies and other related parties during the year.

39

40 Information for shareholders Annual report & accounts 2004

Information for shareholdersPress releases, half year results and other information relevant to shareholders are available on our website, www.share.com.

Shares issued or committed as at 31 December 2004Number of Number of %

shareholders shares

Oldham family and trusts 7 124,767,937 76.5

Other directors and staff 76 7,131,801 4.4

Customers 80,492 15,392,154 9.4

Other shareholders 274 14,583,518 8.9

Convertible loan stock 1 1,250,000 0.8

80850 163,125,410

Financial calendar 2005

27 April 2005 Ex dividend date for final dividend

20 May 2005 Annual General Meeting in Aylesbury

25 May 2005 Final dividend paid

July 2005 Results for the half year to 30 June 2005 announced

February 2006 Results for 2005 announced

Dealing in Share plc shares

Share plc shares are traded on ShareMark

(www.sharemark.co.uk) and customers of The Share

Centre can place orders via their personal portfolio

accessed at www.share.com, by telephone

(01296 41 42 43) or in writing, quoting their name, customer reference, portfolio number and the number of shares to buy/sell

together with the price limit. Investors who are not customers of The Share Centre may deal in Share plc shares via a

ShareMark authorised broker.

ShareMark dealings in Share plc shares are carried out weekly at 3pm each Friday, except Bank Holidays in which case deals are

usually struck on the working day immediately prior to the Bank Holiday. For full details visit www.sharemark.co.uk or call

01296 41 41 41.

Share price information

The latest indicative and auction prices for shares in Share plc are available on www.sharemark.co.uk, via the home page at

www.share.com or by calling 01296 439 175.

Shareholder benefits

Your holding in Share plc qualifies you to receive "dealing commission credit" rebated against commission charged on sales

and/or purchases of any investment made through your account with The Share Centre.

For every Share plc share you hold, you receive a quarterly dealing commission credit of 3p, up to a maximum allowance of

£300 per quarter, this shareholder benefit will be paid to you as a rebate against dealing commission on orders made in that

quarter through any of your accounts with The Share Centre. Rebates earned on dealing through a PEP or ISA will, because of

Inland Revenue regulations, be paid to your Share Account.

The rebate will be to a maximum of 30% of dealing commission on orders placed via the internet, or 15% on orders placed by

other means. Any credit not used in any one quarter will lapse.

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Price history and volume of shares dealt in Share plc 0.5 pence ordinary

Share price and volume traded

2004 week number

Volume price

Notification of the Annual General Meeting 2005NOTICE IS HEREBY GIVEN that the Annual General Meeting of Share plc (the "Company") will be held at 10.30am on 20 May

2005 at Oxford House, Oxford Road, Aylesbury, Bucks, HP21 8ZB for the purpose of considering and, if thought fit, passing the

following resolutions; resolutions 1 to 6 will be proposed as ordinary resolutions and resolutions 7 and 8 will be proposed as

special resolutions.

Resolutions

Ordinary business

1 To receive and adopt the Report of the directors and the Financial Statements for the year ended 31 December 2004.

2 To declare a final dividend of 0.1452 pence per ordinary share.

3 To re-elect Sir Martin Jacomb as director.

4 To re-elect P M Forster as director.

5 To re-appoint Deloitte and Touche LLP as the Company's auditors to hold office from the conclusion of this meeting until the

conclusion of the next general meeting at which the accounts are laid before the Company, and that their remuneration be

determined by the directors.

6 To receive and adopt the Directors' remuneration report.

Special business

7 That the directors be and they are hereby generally and unconditionally authorised for the purposes of Section 80 of the

Companies Act 1985 (the "Act") to exercise all the powers of the Company to allot relevant securities (within the meaning

of Section 80(2) of the Act) up to an aggregate nominal amount of £250,000, such authority to expire five years from the

date of the passing of this resolution (Expiry Date), save that the Company may before the Expiry Date make an offer or

agreement which would or might require relevant securities to be allotted after the Expiry Date and the directors may allot

relevant securities in pursuance of such offer or agreement as if the authority conferred hereby had not expired and this

authority shall be in substitution for and shall replace any existing authority pursuant to Section 80 of the Act to the extent

not utilised at the date this Resolution is passed.

8 That subject to the passing of the previous resolution, the Board be and is hereby empowered pursuant to Section 95 of the

Act allot equity securities (within the meaning of Section 94 of the Act) for cash pursuant to the authority conferred by the

previous resolution as if sub-section (1) of Section 89 of the Act did not apply to any such allotment provided that this

power shall be limited:

(i) To the allotment of equity securities in connection with a rights issued in favour of Ordinary shareholders where the

equity securities respectively attributable to the interests of all Ordinary shareholders are proportionate (as nearly as

may be) to the respective numbers of Ordinary shares held by them; and

(ii) To the allotment (otherwise than pursuant to sub-paragraph (i) above) of equity securities up to an aggregate nominal

value of £125,000 and shall expire on the date of the next Annual General Meeting of the Company after the passing of

this resolution save that the Company may before such expiry make an offer or agreement which would or might

require equity securities to be allotted after such expiry and the Board may allot equity securities in pursuance of such

an offer or agreement as if the power conferred hereby had not expired.

By order of the Board

Sir Martin Jacomb

10 April 2005

Registered office: Oxford House, Oxford Road, Aylesbury, Bucks HP21 8SZ

A form of proxy is enclosed with this report and instructions for use are shown on the form.

Group information Share plc

Oxford House, Oxford Road, Aylesbury, Bucks. HP21 8SZ

Phone 01296 41 41 41

Email info@share.co.uk

Visit www.share.com

Advisors:

Brokers

The Share Centre Limited

Oxford House Oxford Road Aylesbury Bucks HP21 8SZ

Independent auditors

Deloitte and Touche LLP

Stonecutter Court 1 Stonecutter Street London EC4A 4TR

Principal bankers

Bank of Scotland

New Uberior House 11 Earl Grey Street Edinburgh EH3 9BN

Registrars

Capita IRG plc

The Registry 34 Beckenham Road Beckenham Kent BR3 4TU

Solicitors

Travers Smith Braithwaite

10 Snow Hill London EC1A 2AL

Dechert LLP

2 Serjeants' Inn London EC4Y 1LT

Public relations

Lansons Communications

24a St John's Street London EC1M 4AY

This document constitutes a financial promotion under the Financial Services and Markets Act 2000 and has been approved by

The Share Centre, a member of the London Stock Exchange. The Share Centre is authorised and regulated by the Financial

Services Authority.

ShareMark is not a Recognised Investment Exchange and shares traded on ShareMark may be unlisted. It may be

difficult for investors to buy and sell those shares and obtain reliable information about their value or the extent of the risks to

which the share price is exposed. The share price of the shares traded on ShareMark may fluctuate and could fall against

investors’ interests. The share price may be subject to sudden and large falls in value given the restricted marketability of the

shares. Investors may get back less than their initial investment.

Share prices, values and income can go down as well as up and investors may get back less than their original

investment. The investments and services contained within this document may not be suitable for all investors.

If in doubt, independent advice should be sought.

p