Annual Report & Accounts 2007

William Hill PLC Greenside House 50 Station Road Wood Green London N22 7TP

Tel: 020 8918 3600 Fax: 020 8918 3775 Reg No: 4212563 England international presence through its online business and its joint ventures in Spain and Italy. is a market leader in all major betting channels in the UK with an established It greyhound stadia. licensed betting offices and operating online casino, poker and games sites as well as two well as offering amusement with prizes machines and fixed odds betting terminals in and other events, as bets on a wide range of sporting offeringservices, odds and taking Founded in 1934, William is one of the leading providers Hill of fixed odds bookmaking williamhillgames.com Interactive Channels : Interactive Telephone Channels : williamhillcasino.com williamhillbingo.com williamhillpoker.com Debit: 0800 44 40 40 Credit: 0800 289 892 Corporate Website: williamhillplc.co.uk Nearly 2,300 shops williamhillskill.com mobile.willhill.com williamhill.co.uk Retail Channel : Contents

Financial Highlights 2

Chairman’s Statement 3

Operating and Financial Review 4

Board of Directors 12

Directors’ Report 14

Directors’ Remuneration Report 16

Statement on Corporate Governance 24

Report of the Nomination Committee 28

Report of the Audit and Risk Management Committee 29

Corporate Responsibility Report 31

Statement of Directors’ Responsibilities 37

Group Independent Auditors’ Report 38

Group Financial Statements 40

Parent Company Independent Auditors’ Report 76

Parent Company Financial Statements 77

5 Year Summary 85

Glossary 86

Shareholder Information 87

Professional Advisers 87 2 William Hill PLC Annual Report & Accounts 2007 Financial Highlights • • • • • • • • includethefollowing:Highlights Financial Highlights a strong comparative period. thesevenIn weeks to 19February 2008,theGroup’s gross winhasincreased by 4%,against period The Group haspurchased 7.9mshares for £46.0mviaon-market share buybacks inthe June2008to shareholders ontheregister on2May 2008 payable on5 Proposed finaldividendup7%to 15.5pence pershare (2006:14.5pence pershare) charge of£20.9mandsaleleasebackprofits of£6.7m Total exceptional impairment pre-tax non-cash items of£14.2mcomprising NextGen (2006: 45.5pence) andbasicEPSpostexceptionals down 2%to 44.7pence Adjusted basic earningspershare (EPS)pre exceptionals up4%to 47.4pence (2006: £313.9m)whichrepresents 108%ofoperating profit Cash generated from operations before taxandinterest down 1%to £310.7m £286.7m (2006:£292.2m) beforeProfit activities finance onordinary charges andexceptional items down 2%to Gross winup6%to £983.7m(2006:£931.3m) Chairman’s Statement William Hill PLC Annual Report & Accounts 2007 3 appointed to the Board as Group Director, Group as the Board to appointed all of the for with responsibility Operations and supporting UK based operations Group’s moves These marketing and IT functions. and in size reflect the substantial increase Hill and the increasing William complexity of importance both in the of regulatory issues, UK, of the establishment of the as a result In and internationally. Gambling Commission, his intention announced Harding David June, and he as Chief Executive down step to subsequently left at the end of the Group in joined as Chief Executive David September. his thank him for like to 2000 and I would William in transforming contribution significant the well to ownership Hill private from On it is today. established public company 21 the announced the Board 2008, February as Chief Topping appointment of Ralph process search a thorough following Executive, of 35 years Ralph’s successor. David’s for industry and deep knowledge experience of build on the him to the business will allow the business and drive successes Group’s forward. final dividend of 15.5 a is proposing Board The with the which combined per share pence per share dividend of 7.75 pence interim of 23.25 year the dividends for in total results on the total a 7% increase per share, pence In period. dividends paid in the comparable has returned addition, during 2007, the Group of in the form shareholders £46.0m of value to buybacks. share 2008, the 19 February to weeks In the seven 4% against by win has increased gross Group’s as a the year For period. comparative a strong of further confident remain growth we whole, remains Group The in the Retail business. that like for and is confident on cost focused be contained to can continue growth like cost the range of 4-6%. However, within the historic costs absorb incremental business will need to TV contract and Turf with the new associated impactthe full year of extended winter opening hours. performance sportsbookThe interactive of the be impacted to until is expected continue to is fully up and running the new ORBIS platform the end of the year. towards of our International business development The scale reach Until these businesses continues. absorbing some anticipate would we expected which in 2008 are losses, operating £7-8 million. be approximately to about the confident remains the Board Overall, the business both in prospects for longer-term the UK and internationally. all our thank formally like to I would Finally, in 2007 and in work their hard for colleagues particular October their help between and for when I assumed the position of February Chairman and wish them temporary Executive 2008. every for success Charles Scott Chairman During 2007, we continued to make significant to continued we During 2007, our international in developing progress Italybusinesses in Spain and in conjunction In partner the with our joint venture Codere. expect in be trading we to Madrid region, of operations the first year 70 outlets in around there, a licence grant the authorities once include These which is expected imminently. party as outlets in third as well LBOs dedicated been have we In the Basque region, premises. in obtaining one of the three successful expect have we and to there granted licences that jurisdiction in 60 units trading in over 55 secured 2008. In have Italy we where for been busy searching have we concessions, and obtaining prime locations and fitting out all these units having outlets working towards September 2008. Our joint venture by trading Italian commenced licensed site internet approached have We in early February. trading a cautious manner and in these investments sufficient capital to allocated have while we the possibilities, fully explore we that ensure further of any pace expansion will the overall initial of our be dictated the results by of the overall monitoring and our investment market opportunity. 2007 has also been a busy period in the field 2005 GamblingThe Act finally of regulation. 2007 and in September became enforceable the establishment of a robust welcome we gambling in Great for regulatory regime engaged fully with the have We Britain. and during the year Gambling Commission a constructive continuing to look forward going forward. dialogue with the Commission been a number of also recently have There support to pay we in the price developments On 11 January industry. the UK horseracing a five-year contract into with entered 2008, we Turf Racing as Amalgamated (trading Limited TV), of all coverage of live the provision for takinghorse races at those horse-race place TV rights. has exclusive Turf which for courses 2008, the Government On 20 February that the 47th Levy its intention announced those similar to scheme be settled on terms were We scheme. included in the 46th Levy as we with this outcome disappointed that bookmakers a believed had presented terms a reduction in the current case for strong to monies flowing reflect the incremental to horseracing we TV. via Turf However, in the the comments welcomed that the Government statement accompanying be put forward could an argument accepted that bookmakers’Turf the new subscriptions to TV service a commercially-based constitute racing. of money to flow the been a number of changes to have There the Board in 2007. In composition May, Board’s Ian Spearing that it had appointed announced most of the Group’s two Topping, and Ralph as executive senior managers, experienced the to Ian Spearing was appointed directors. Strategy Corporate Director, as Group Board with particularand Business Development new international the Group’s for responsibility was Topping Ralph and Italy. in Spain ventures

The Retail business responded well to the to well Retail business responded The 9% gross and delivered challenges of the year the effects of the (7% excluding win growth product by was driven This week). 53rd particularlyinnovation, on our gaming of the effects offset which helped to machines, the smoking the opportunity ban and also by new gambling regulatory the by granted Betting Offices keep our Licensed to regime as six pm in the winter (LBOs) open beyond control cost Disciplined as the summer. well was this top-line that increase ensured the despite growth, profit into translated the imposition of from resulting cost increased AMLD and keeping the LBOs open longer. channel had a the Interactive In contrast this was Primarily disappointing trading period. performance of the uncompetitive as a result sportsbookof the internet product due to In light of the ongoing problems. technology the internet issues affecting technology sportsbook, an instigated the Board of our bespoke NextGenindependent review in programme technology replacement the this review 2007. Following November this programme terminate decided to Board implement an externallyand to developed partythird the solution for technology in an decision resulted This sportsbook. non-cash in impairment charge exceptional the NextGen to technology relation in of £20.9m, which is reflected programme restructuring charges Further the 2007 results. also expected be to £4m are of approximately in 2008. In the meantime a number of incurred improve to been implemented have initiatives the performance of this division and we about its longer-term confident remain prospects.

2007 has been a challenging year for year a challenging 2007 has been and the bookmakingthe Group industry start the At as a whole. of had that we estimated we the year, £16m profit make an incremental to profit 2006’s match just to performance year the full due to of the imposition of effects DutyAmusement Machine Licence a major of and the absence (AMLD) In tournament. event, the football an extra helped by the Group, to in 2007 compared trading week’s before a profit 2006, has produced and exceptional charges finance that was only £5.5m lower items and earnings per share than last year actually items exceptional excluding 4%, although this by increased one-off reflected largely tax is proposing Board The movements. the dividends for total increase to 7%, in line with the Group’s by year policy surplus capital via of returning buybacks. dividends and share Chairman’s Statement Chairman’s 4 William Hill PLC Annual Report & Accounts 2007 Operating and Financial Review To the shareholders of William Hill PLC Hill William of shareholders the To Operating andFinancial Review The statutory requirement to prepare an prepare to requirement statutory The Operating and Financial Review (OFR) has (OFR) Review Financial and Operating been removed by the Government. the by removed been However, it is included in this Annual this in included is it However, Report as the Board considers it contains it considers Board the as Report important information, which may assist may which information, important shareholders to assess the Company’s the assess to shareholders strategy and the potential for that for potential the and strategy strategy to succeed. to strategy The Directors are however required to required however are Directors The provide a Business Review, the contents the Review, Business a provide of which are set out in the Companies the in out set are which of Act. For convenience the Business Review Business the convenience For Act. on page 14 does not repeat information repeat not does 14 page on already provided within the OFR and OFR the within provided already appropriate cross references to references cross appropriate information in this document are document this in information provided. As such, some of the of some such, As provided. information within the OFR is required is OFR the within information and some is being provided on a on provided being is some and voluntary basis. voluntary The OFR includes statements that are, or are, that statements includes OFR The may be deemed to be, “forward-looking be, to deemed be may statements”. By their nature, forward- nature, their By statements”. looking statements involve risk and risk involve statements looking uncertainty because they relate to future to relate they because uncertainty events and circumstances. A number of number A circumstances. and events factors could cause actual results and results actual cause could factors developments to differ materially from materially differ to developments those expressed or implied by the by implied or expressed those forward-looking statements. As such, As statements. forward-looking information in this OFR cannot be relied be cannot OFR this in information upon as a guide to future performance. future to guide a as upon Forward-looking statements may and may statements Forward-looking often do differ materially from actual from materially differ do often results. Any forward-looking statements in statements forward-looking Any results. this OFR reflect the Company’s view with view Company’s the reflect OFR this respect to future events as at the date of date the at as events future to respect this document and are subject to risks to subject are and document this relating to future events and other risks, other and events future to relating uncertainties and assumptions relating to relating assumptions and uncertainties William Hill’s operations, results of results operations, Hill’s William operations, strategy and liquidity. Save as Save liquidity. and strategy operations, required by law or by the Listing Rules of Rules Listing the by or law by required the Financial Services Authority, the Authority, Services Financial the Company undertakes no obligation no undertakes Company publicly to release the results of any of results the release to publicly revisions to any forward-looking any to revisions statements in this OFR that may occur may that OFR this in statements due to any change in its expectations or expectations its in change any to due to reflect events or circumstances after circumstances or events reflect to • Interactive bettingincludingan Interactive • comprising Retail anetwork ofnearly • principal channels: toproducts customers through four The Group delivers itsbettingandgaming eastofEngland. north two greyhound stadiasituated inthe online.products The Group alsooperates a comprehensive suite ofgaming offering gamingmachinesinitsLBOsand andotherevents, aswellsporting as betsonawiderange of and taking offering services, odds odds bookmaking William isaleadingprovider Hill offixed Description ofbusiness Operations the date of this announcement. this of date the iaca eiwPage 11 Page 10 Page 10 Page 10 Financial review Resources andrelationships Page 4 anduncertainties Risks Page 5 Page 9 Future outlook Page 6 indicators Key performance Review of2007performance Long term strategy Operations The OFRdiscussesthefollowing areas: This OFR has been prepared for the Group the for prepared been has OFR This as a whole and therefore gives greater gives therefore and whole a as emphasis to those matters, which are which matters, those to emphasis (www.williamhill.com), arcade games online sportsbook to bespread across alarge estate; recognition andallows central costs advantage interms ofbrand asignificant competitiveHill scale ofthenetwork gives William the UK. The directors believe thatthe the two largest operators ofLBOsin Ireland making William oneof Hill 2,300 outletsthroughout theUKand significant to the Group taken as a whole. whole. a as taken Group the to significant is difficultto withany predict certainty in LBOsandonlinebettinggaming. It income generated from gamingmachines business hassignificantly increased its economic downturn, however, the consumer facingindustries. Since thelast thanmanyeconomic cycle other proven to belessexposedto the Historically, theGroup’s businesshas Operating andregulatory environment businesses, International which • Telephone betting, inwhichthe • in thoseterritories. interactive gamblingopportunities to exploitretail and in SpainandItaly comprise joint ventures established call centres inLeeds andSheffield; telephone betcapture positionsat operate approximately 637 to numbers), hasthecapacity market leader(interms ofcustomer directors believe that William isa Hill games; andbingo ofskill introduction made andin2007includedthe developmentproduct continue to be improvements and infunctionality in theinteractive offering through offered to customers. Enhancements andcasinoaccount was sportsbook launched andanintegrated Euro denominated casinowas second supplierofcasinosoftware, a ABwasintroducedBoss Media asa 2003.Alsoin2003, site inJanuary and thelaunchofadedicated poker ofarcadeintroduction gamesin2002 The offering wasenhanced by the attheendof1999. Inc Cryptologic with launched inconjunction internet in1998andthecasinowas Group accepted itsfirstbetviathe (www.williamhillskillgames.com). The games and onlineskills bingo (www.williamhillbingo.com) (www.williamhillpoker.com), online poker site (www.williamhillcasino.com), online online casino www.williamhillvegas.com), an (www.williamhillgames.com and Operating and Financial Review William Hill PLC Annual Report & Accounts 2007 5 earnings and maximise organic opportunities;growth technological fiscal and regulatory, and change in the UK and overseas; acquisitions. objectives strategic incorporating against that results and monitoring plan; competitors; opportunitiesdevelopment against and stringent financial criteria uses of capital; alternative which could and fiscal matters the business; and influence change which is technological expected benefit the business. to Long term strategy term Long pursue a strategy to continues Group The sustainable earnings aimed at delivering The shareholders. and value for growth to: are key elements of the strategy • traditional enhance to Continue • exploit new platforms; Profitably • on opportunities Capitalise from • Selectively pursue value-enhancing performance monitors against Board The by:the strategy • an annual plan Establishing • performance Monitoring against key • new business Evaluating • in regulatory an active role Playing • Identifying and implementing for the provision of live coverage of all coverage of live the provision for takinghorse races at those horse- place TV has Turf which for courses race discussed issues are These rights. exclusive further in the Review of 2007 of “Cost performance under the heading content”. Competition primarily competition faces Group The other bookmakers, online betting from operators other interactive exchanges, some extent, to the National Lottery. and, that the do not believe directors The significant faces currently Group other land-based from competition participants in the gaming industry, However, namely casinos and bingo halls. has and is in the online space competition as new intensify to expected continue to the market and existing enter operators and expand their improve operators product offerings. landscape remains competitive The subject change depending on to regulatory and technological developments. in the principal competitors Group’s The and Coral, Ladbrokes market are UK retail having Hill and Ladbrokes William with LBO estates. the largest the are Tote and the Coral Ladbrokes, in the UK chief competitors Group’s In betting market. telephone a addition, telephone number of international from with the Group compete operators outside the UK. in its competition faces Group The a large from operations interactive (including operators number of UK owned and various betting Coral Ladbrokes, based as operators as well exchanges), and continue entered, that have overseas market. Relatively the interactive enter, to a have competitors of these overseas few or long-established brand recognisable competes Group The name in the UK. with online and off-line overseas brand more have that may competitors Hill in certainWilliam than recognition markets. how these income streams will react streams these income how pressure. of economic under conditions business is defined and constrained The affecting legislation Recent legislation. by the comprises the UK operations Gambling Act 2005, which was fully 1st of September 2007 from implemented for and sets up a new regulatory regime a new Gambling by the industry enforced businesses are Group’s The Commission. accept in the UK to licensed properly sports and other bets and in Malta, and Netherland Antilles to Gibraltar gaming products including operate Our and bingo sites. poker casino, in in Spain and Italyoperations (or are are of being) appropriately the process under the regulatorylicensed regimes established in those jurisdictions. of online gambling around regulation The with changing is constantly the world being new rules and regulations in a number of and introduced considered In customers. have we where territories is that our approach this environment for must take responsibility each customer in respect of with local laws complying betting and gaming in the jurisdiction in where However, which he or she is based. obtain the directors necessary, considered the concerning independent legal advice in of betting and gaming laws state particularjurisdictions. the closely monitors Group The of tax policy to development relation in betting and gaming in all the jurisdictions It the lobby seeks to in which it operates. a fair ensure to governments respective the taxation of to and equitable approach of gambling and various forms different minimise the likelihood and to platforms, might be changed to that the tax regimes the detriment of the Group. in conjunction with other Group, The make a number bookmakers, to continues voluntary and commercial of statutory, various sporting to Inpayments bodies. makes commercial addition, the Group Bookmakers through Afternoon payments Services for Greyhound (BAGS) Limited pictures in LBOs from screen the right to racetracks various horse and greyhound TV Turf 12th of Januaryand from to 2008 Operating and Financial Review and Financial Operating

Review of 2007 performance The average number of machines in the estate increased to 8,382 (2006: 8,218) in Group summary the period. The average net contribution A summary of the key financial results is set out in the table below: per machine per week was £466 (2006: Key financials Gross win Operating profit £433). This is a strong performance from machines, which has absorbed the before exceptional items additional cost from the imposition of £m 2007 2006 2007 2006 AMLD in August 2006, that has adversely Retail 802.6 736.0 229.8 225.9 affected average weekly profitability of each terminal by £38. The improvement Interactive 119.8 130.5 50.9 61.5 was achieved despite the advent of the smoking ban from 1 July and was driven Telephone 53.0 57.5 16.1 16.7 by staff training, content improvements, Other 8.3 7.3 1.1 (0.6) tight management of machine downtime and the extended opening hours allowed International joint ventures – – (2.6) – from 1 September. In January 2008, we renegotiated our machines supply Associate – SIS – – 3.3 3.6 contracts on improved terms with our Central overheads – – (11.9) (14.9) existing supplier Inspired Gaming and also introduced a new supplier to the 983.7 931.3 286.7 292.2 estate, Global Draw. We expect that these flexible supply arrangements will drive The Retail channel, which constitutes 82% Retail channel product innovation and service of the Group’s gross win, continued to The Retail channel’s gross win grew by 9% performance, which should enable us to perform strongly driven by encouraging to £802.6m (7% excluding the effects of deliver continued growth in our machines gross win growth and good cost control. the 53rd week) and pre-exceptional profit income. This was achieved notwithstanding the increased by 2% to £229.8m. This Costs in the channel were up 11%, driven full year effects of the imposition of AMLD performance was achieved by the extended betting shop opening and the absence of a major football notwithstanding the adverse full year hours, the effects of the 53rd week, tournament. We estimate that these items impact in 2007 from the imposition of increases in the average number of LBOs in total had an impact on the Group of AMLD in August 2006, as well as the 2006 (mainly affecting staff and property costs) approximately £16m in comparison with comparatives including incremental gross and development activity within the 2006, although the effects of this were win associated with the football World existing estate (mainly affecting property partly offset by 2007 being a 53-week Cup. and depreciation costs). period. Interactive has had a difficult Gross win from over the counter (OTC) We completed 282 development and LBO period, impacted by technology issues increased by 3%, while machines gross refurbishment projects in 2007 including and a very competitive market, while win was up 15% (both excluding the 53rd 39 new licences, 65 extensions and resites Telephone produced a stable result, week). Growth was facilitated by a larger and 178 LBO refurbishments. Overall, we despite lower high-staking customer estate (reflecting estate development and spent £46.8m on estate development in volumes year-on-year. In addition, 2007 bolt-on acquisitions) and the extended 2007. has seen the start of our long-term opening hours allowed from 1 September 2007 has also seen the acquisition and investments in the Italian and Spanish by the Gambling Commission. We believe speedy integration of two small chains of markets via our international joint that further benefits from extended hours LBOs, TH Jennings (Harlow Pools) Limited ventures with Codere. will come through in the future as punters comprising 22 LBOs acquired for total become more familiar with the new Profit before finance charges and consideration of £21.5m and Eclipse trading hours available. exceptional items was £5.5m lower than Bookmakers Limited comprising 7 LBOs last year but earnings per share excluding The impact of sporting results on OTC acquired for a total consideration of exceptional items increased by 4%, gross win year-on-year was broadly £3.2m. Both chains have traded benefiting from one-off tax movements. neutral as the effects of favourable satisfactorily since their respective The Board is recommending a final football results in the earlier part of the acquisitions. year were largely offset by disappointing dividend of 15.5 pence per share, an At 1 January 2008, we had 2,234 LBOs in results in September and October. increase of 7% on last year consistent with the United Kingdom, 9 in the Channel Horseracing gross win was impacted by the Group’s policy of returning surplus Islands, 2 in the Isle of Man and 49 in the the poor summer weather and a capital via dividends and share buyback. Republic of Ireland; a total of 2,294. consequent high level of fixture cancellations (88 in 2007 compared to 46

William Hill PLC Annual Report 2007 & Accounts Hill PLC William in 2006).

6 Operating and Financial Review William Hill PLC Annual Report & Accounts 2007 7 This result was achieved notwithstanding achieved was result This benefiting the comparative Cup World the high-staking customer and lower figures Telephone the While activity in the period. believe we channel is our most mature, stable deliver to that it should continue a valuable earnings whilst providing attracted by who are facility customers to good quality service and a quick and get their bets to way convenient processed. with 146,000 active ended the year We 2006: (26 December customers telephone 2006 number of accounts The 160,000). activity recruitment by was boosted Cup. World with the associated the channel were by incurred Costs lower 12% principally due to by reduced World marketing spend in respect of the of staff costs. and rationalisation Cup activitiesInternational in 2007 has seen further progress in Spain and our operations developing Italy in conjunction with our joint venture Codere. partner, has launched In Spain, the joint venture Apuestas and Victoria – its Spanish brand needed the infrastructure has developed joint venture the manage and control to expecting be are to We operations. the for licence an operational awarded aim to We imminently. Madrid region outlets in this 34 owned up to secure together the end of the year by region partywith a similar number of third outlets subject obtaining local licensing to also have We and planning permissions. one of the three secured successfully of in the Basque region available licences open betting Spain, which entitles us to 8 have hope to We outlets in that region. betting shops and 55 other betting the end of the year. by outlets operational bidders have Some of the unsuccessful Basque The challenged this award. that it will has indicated government the end of this appeal by to respond that confident remain We 2008. February will be confirmed. our licence In 2006, as part December of of a process William betting within Italy, deregulating 20 jointly awarded were Hill and Codere horseracing- operate to concessions operate to 7 concessions betting shops, relative underperformance of the relative sportsbook.Interactive Management been made within the changes have and there team management Interactive in the investment has been an increased including the live on the site content horse racing such as of events streaming with the Open Tennis and the Australian the site. to traffic aim of driving increased our current improved In have we addition, expanded clients through to offer pricing market leading methods, payment easier bets, on selected football and improved of the website navigation optimisation engine search internet capabilities. stabilised in largely Gaming revenues poker business the loss of 2007 following that resulted half of 2006 in the second Arcade changes in US legislation. from new by games performed driven strongly launched 9 new We games and products. games during the period that arcade 26 to expanded our offering We games. based bingo and internet also introduced in skill in the period and bingo, games has been very and successful particular, initial expectations. Casino has exceeded in part than last year lower are revenues reflecting a cannibalisation of casino games and also a arcade by revenue had Poker yield per player. average lower but a difficult first 6 months of the year the introduction of a closed loop (which means that poker winnings should be clients within the amongst our recycled limit Cryptologic and lower poker room) tables has seen a stabilisation of revenue been the slower in what has traditionally half of the year. second 432,000 to increased active accounts Total as at 1 January 2006: 2008 (26 December 405,000). 6%, largely in the channel increased Costs associated higher depreciation due to in systems investment with increased partly the effects of lower by offset the football following marketing costs, in the previous investment Cup World year. channel Telephone to £4.5m by win fell gross Telephone by decreased profit £53.0m and operating £16.1m. £0.6m to Interactive channel Interactive with year had a disappointing Interactive £119.8m £10.7m to win falling by gross £10.6m to falling by profit and operating £50.9m. Interactive sportsbookThe has site be impacted the relative to by continued technology inflexibility of our current inflexibilityThis is most configuration. notable in respect of in-running betting the limitations of our technology where the matching us from prevented number of in-running betting increasing opportunities our from available had been Group The competitors. deficiency technology this addressing NextGen its replacement through In November programme. technology the notification of a delay 2007, following in the implementation of the NextGen a review instigated the Board programme, The externalof the project by consultants. that, while the NextGen concluded review the expected deliver would programme the benefits in due course, greater require implementation would and take longer than investment also review The envisaged. originally was technology identified that proven be implemented that could available comparative and at a lower rapidly more that this was concluded Board The cost. option and decided to the preferred This the NextGenterminate programme. non- in an exceptional decision resulted the to in relation cash impairment charge of NextGen programme technology with further£20.9m in the 2007 results of restructuring charges related £4m expected be to approximately in 2008. incurred In heads of January agreed 2008, we the ORBIS technology purchase to terms ORBIS is the industry-leadingplatform. will implemented, and once platform playing on a level compete us to allow especially in field with our competitors, the number and variety of aim We can offer. in-running markets we the end of implement ORBIS by to in 2008 and will invest November management skills ensure to programme meet this implementation target. that we a number of other took Board The the address in the period to initiatives 8 William Hill PLC Annual Report & Accounts 2007 Operating and Financial Review figures. Approximately £3.0mwas was includedinthe2006comparative World Cup marketingcampaign, which period mainlydueto theabsence ofthe were down 9%over thecomparable hours. andmarketingcosts Advertising opening theextended content to support size oftheestate andthecosts ofextra comparable perioddueto theincreased and datato our LBOswasup9%over the products. The cost ofproviding pictures and ITsystems, includinggaming increased investment intheLBOestate Depreciation costs increased 20%dueto also agreater numberofLBOs. by anincrease inaverage LBOsize and increases inrent andrates, driven inpart higherenergyperiod reflecting costs and costs, were up15%over thecomparable costs, whichrepresented 17%ofourtotal based pay award to staffof3%.Property trading intheperiod andaninflation- increase intheaverage numberofLBOs opening hoursfrom September, a3% the53rdreflecting extended week, over thecomparable period, mainly half ofourtotal costs) increased by 7% Staff costs (which represented roughly risen by 4%. September, costs are estimated to have openinghoursfromand theextended 1st Excluding theeffects ofthe53rd week Group were £480.2m,anincrease of8%. items (net of operating income) for the Full-year expensesbefore exceptional Operating expenses develop theseopportunities. thatitwilltakeaperiodoftimeto expect are newmarketsfor William and Hill The Board notes thatbothSpainandItaly February ofthisyear. sites have recently commenced trading in applied for andgranted andtheinternet bettingwerehorseracing also andsports footprint. Remote licences relating to to expandour inItaly opportunities investigating potential shopacquisition operational before then. We are also are toand themajority be expected commence trading by September 2008 concessions theyhave to beready to concessions andundertheterms ofthe acquiring locationsto exploitthese has beenmadein2007identifyingand bettingpoints.relating Progress to sports bettingshopsand28concessions sports bookmakers, is currently party to litigation iscurrentlybookmakers, party andother Greyhound Services Afternoon with theBookmakers five years.the next The Group, together for onthecost ofthatservice certainty fromIreland thatdate andhasobtained Channel IslandsandtheRepublicof theIsleofMan, the United Kingdom, ofUKracingpictures to ourcustomers in has ensured thatitisableto provide rights. Byagreeing theGroup thiscontract courses for which Turf hasexclusive TV place atthosehorse-race races taking provision oflive coverage ofallhorse Limited,Racing trading as Turf TV, for the five year withAmalgamated contract 2008,we entered intoOn 11January a Cost ofcontent regime. and theirresponsibilities underthenew our staffoftherequirements oftheAct programme duringtheyear to inform all asignificant training also undertaken Commission inyears to come. We have maintaining apositive dialoguewiththe September deadline. We lookforward to regulationsworkable intimefor the1st andestablish withittoworking try We have engagedwiththeCommission, harmed orexploited by gambling. and vulnerable peoplefrom being and openly, andby protecting children fairly ensuring thatgamblingisconducted by keepingcrimeoutofgambling, by regulate gamblinginthepublicinterest to itsobjective Commission andsupport establishment oftheGambling Great Britain. We welcome the guidance thatwillgovern gamblingin regulations, licence conditions, and implementing andpolicingthedetailed onitsroleCommission of taking on 1September 2007withtheGambling 2005 cameinto Act The force Gambling developmentRegulatory opening and Turf TV. the incremental ofevening effects in the4-6%historical cost range excluding confident thatcost increases willremain focus oncost disciplineandremain forward,Looking we willcontinue to non-recurring. Commission regime ofwhich£1.2mwas ofthenewGambling the introduction incurred intheperiodpreparation for the support ofhorseracing goingforward. the support developing acommercial arrangement for inthenearfuture on horseracing industry engaging withtheGovernment andthe andwe lookforward to levy statutory Government’s desire to move away from a money to horseracing. We share the constitute acommercially-based flow of subscriptions to thenew Turf service TV be putforward thatbookmakers’ Government accepted anargument could accompanying statement thatthe but welcomed thecomments inthe We were disappointed withthisoutcome those includedinthe46thLevy scheme. scheme besettledonterms similarto announced itsintention thatthe47thLevy On 20February 2008,theGovernment £1,043.4m) asaresult oftheabove. 2008(26December 2006– at 1January Net indebtedness increased to £1,083.9m its own shares. (net ofSAYE optionreceipts) purchasing £78.5m individendsandspent£43.5m capital expenditure andacquisitions, paid in corporation tax,invested £97.3min due to the53-week period),paid£71.8m separate interest payments were made costs (five £77.7m innetdebtservice comparable period. The Group paid and taxof£310.7m,£3.2mlower than the from before operating activities financing The Group generated netcashinflow Cashflow andnetindebtedness rate forstatutory 2007of30%. compared to 29.6%in2006andtheUK associate income) was25.3%,as tax (before exceptional items and Consequently, theGroup’s effective rate of the reduced corporation taxrate. restatement oftheseliabilitiesbasedon charge of£11.3m,resulting from the inthetax reduction has ledto aone-off acquired bettinglicences, therate change deferred taxliabilitiesassociated withits the Group hassignificant non-cash becomes effective from 1April2008.As headline rate ofcorporation tax,which fromwas thereduction 30%to 28%inthe The maintaxationchangeintheperiod Taxation law. allegations ofbreaches incompetition against Turf andvariousothersover TV Operating and Financial Review

Key performance indicators • Return on incremental capital invested (for example, in relation to A comparison of KPIs in the 2007 and 2006 financial years is shown below: investment in the Retail estate, the Group KPIs (1)2007 2006 Group seeks returns on capital actual actual invested of 20% on new licences, 15% on resites and extensions and (2) Growth in gross win 6% 6% 10% on refurbishments). Growth in gross profit 4% (2) 6% To assess the capital structure, the Board Growth in operating expenses 8% (2) 6% focuses on the ratio of net debt to earnings before interest, taxation, Net interest expense £63.3m £56.8m depreciation and amortisation (EBITDA), Interest cover (EBIT before exceptionals/net finance costs) 4.5 5.1 which is managed to ensure an efficient balance sheet and is a key driver of overall Effective tax rate (excluding exceptional items distribution policy. and associate income) 25.2% 29.6% In addition to these financial indicators a Gross win percentage by channel (3) number of non-financial indicators are OTC 17% 16% also used including numbers of betting slips processed and the number of active Interactive sportsbook 6% 7% customers in the remote channels. The Telephone 10% 9% Board also monitors a number of KPIs to ensure that the Group is meeting its Operating margin by channel corporate and social responsibilities. This Retail 29% 31% is further discussed in the Corporate Responsibility Report. Interactive 42% 47% Targets for certain KPIs are set on an Telephone 30% 29% annual basis as part of the Group’s Average profit per LBO £101,000 £103,000 operational objectives for the coming year having regard to historic levels, expected Average net contribution per machine £466 £433 new developments and the Group’s Average profit per active Interactive customer £118 £152 strategy. Average profit per active Telephone customer £110 £104 In 2007, adjusted EPS before exceptional items increased 4% to 47.4 pence. Growth (4) Net debt/EBITDA 3.4 3.3 in gross win was just below internal targets, reflecting Interactive’s (1) 2007 is a 53-week period. (2) Excludes Stanley Retail. disappointing results, while gross profit (3) Gross win percentage by product is monitored internally but not publicly disclosed. growth was also just below our internal (4) Net debt is before offset of finance fees, excludes client cash and includes third party bank guarantees. target. Both gross win and gross profit The Board sees earnings per share growth The Board also utilises a range of exceeded the levels achieved in the as the key indicator of the Group’s success measures designed to determine comparative period due to factors in delivering on its objectives of performance at a channel and product explained in the Review of 2007 William PLC Hill & Accounts 2007 Annual Report sustainable earnings growth and level, the more important of which are: performance. Growth in operating enhancing shareholder value. The key • Gross win percentage by channel; expenses was managed within our expectations. performance indicators (KPIs) used by the • Operating margin by channel and by Board in monitoring earnings per share product; Operating margins were at acceptable growth are as follows: • Average profit per LBO; levels for the Retail and Telephone • Gross win (represents total customer • Average profit per active businesses but fell below expectations for stakes less customer winnings); Telephone/Interactive customer the Interactive business. where profit is pre-exceptional • Gross profit (represents gross win With regard to financial structure the operating profit as shown in note 2 less cost of sales); Board believes that a target net debt to of the Group financial statements • Operating expenses; and an active customer is defined as EBITDA ratio of circa 3.5 times represents • Interest charges and cover; and one who has placed a bet with their an efficient balance sheet structure for the • Effective tax rate. own money in the last 12 months; Group with any excess capital, not and required for investment in the business,

9 10 William Hill PLC Annual Report & Accounts 2007 Operating and Financial Review Continue to invest intheLBOestate • Continue ourinvestment in • cost andcapitaldiscipline Maintain • revenues Maximise ineachchannel • thecoming yearIn to: we expect with EUlaw. explain how theirgamblinglaws comply variouscountries to inasking been active being reviewed. The EUCommission has regimeregulatory whenlocallaws are push for afairandproportionate states with EU treaty obligationsandto to press for compliance by EUmember The bodies Group works withitsindustry andSpain. some localliberalisation inItaly inGermany and particular Turkey, and increased protectionist activity, in by countries withinEurope withsome 2007 hasseendiffering approaches taken period. focus on return oncapitalandpayback are criteria that evaluated againststrict All investment andacquisition proposals ofexpectations. falls short to whichtradingthe extent exceeds or become available inthose marketsand that deregulation andtheopportunities dependant onthespeedandnature of this amountcould beexceeded term but intheshort in SpainandItaly invest circa £30mto pursueopportunities Retail aswell. The Group alsoplansto and willultimately benefit Telephone and Interactive channel the underperforming that willinitiallyhave on themostimpact systemsplatforms andcore bookmaking in 2008newandimproved technology has alsoearmarked£28mfor investment per annumintheRetailestate. The Group plansto continue toIt invest circa £38m underpin itsfuture growth prospects. developing eachofitsbusinessesto The Group continues to invest in Future outlook backs. combination ofdividendsandshare buy- being returned to shareholders through a programme; and through ourongoingdevelopment andSpain; operations inItaly to ensure efficient useofresources; through specificinitiatives; The potential threat represented by • The amountsrequired to be paid by • The relationship withkeysuppliers, • oftheGroup The ability to manage • ofchangesto The potential impact • oflegislative The potential impact • include: the risksto theoperation. Suchrisks and, atthesametime, carefully managing exploiting itsresources andrelationships increasingly profitable businessby The to directors buildan are seeking anduncertainties Risk both intheUKandinternationally. the longer-term for prospects thebusiness Overall, the Board remains confident about to beapproximatelyexpected £8million. some operating losses, whichin2008are reach scalewe would anticipate absorbing business continues. Untilthesebusinesses The development ofourInternational the year. fully upandrunningtowards theend of untilthenewORBISplatformimpacted is to continue isexpected to be sportsbook ofthe interactiveThe performance winter openinghours.extended Turf of andthefullyear contract impact TV incremental costs associated withthenew However, thebusinesswillneedto absorb within thehistorical range of4-6%. growth cancontinue to becontained cost andbelieves thatlikefor likecost business. The Group remains focused on growthconfident intheRetail offurther For theyear asawhole, we remain • Make significant progress Make onkey • overseas; competitors basedintheUKand bodies undervariousarrangements; levies andfees sporting to certain providers ofcontent andpictures; greyhound industriesandother most notablythehorseand risk; its bookmaking environments; the UKandoverseas fiscal gambling transactions; to acceptoperations andability the Group’s of scope andconduct regulators intheUKandoverseas on of changes andtheactivities technology programmes. • A strong A managementteam and • track record A ofinnovation and • Strong cashflow generation; • Afocus onsustainableandprofitable • An effective riskmanagement system • estate An extensive andhighquality • andwidely A long-established • A marketleadingpositioninallmajor • statements including: necessarily reflected initsfinancial assets andresources that are not The Group seeksto exploitanumberof Resources andrelationships above descriptionofriskfactors. issuesthatfallinto the expands oncertain further Review of2007performance potential adverse consequences. The taken to mitigate therisksortheir above risksandappropriate are actions The Board routinely monitors allthe The riskresulting from any inability • The riskthatintermediaries suchas • The riskofaprolonged economic • The lossofkeypersonnel; • ofweather The orother impact • The riskthatkeytechnology or • employees. workforce ofover 13,000 trained and technological change;and profitably exploitingregulatory, fiscal costs; growth andtightmanagementof experience; and significant bookmaking improvements; ongoing refurbishment and significant sustained investment and of bettingshopswhichbenefitfrom reputation for quality; recognised brand, withastrong established international presence; betting channelsintheUKwithan its debtobligations. of theGroup to refinance and service with gambling;and connected debit card transactions banks refuse to accept credit and of bettingactivity; events thatmay result inareduction recession orothergeo-political programme; onthesporting factors information systems could fail; Operating and Financial Review

The directors believe that such resources dividend of 15.5 pence per share (2006: these facilities are currently sufficient to help to secure the Group’s position at the 14.5 pence per share) on 5 June 2008 to meet the projected working capital and forefront of the betting and gaming shareholders on the register on 2 May investment needs of the Group. industry and ensure it is well placed to 2008. The 7% increase in the proposed The Company has hedged its exposure to compete and develop its business in the final dividend is in line with the Group’s interest rates on its forecast floating rate future. policy of returning surplus capital via debt by entering into a series of interest Our customers and employees are key to dividends and share buybacks. The rate swaps and collars. As at 1 January our success and our Corporate proposed level of total dividend 2008, approximately 40% of its forecast Responsibility (CR) Report on pages 31 corresponds to a dividend cover ratio of exposure is fixed via interest rate swaps to 36 provides further information on our 1.9 times (26 December 2006 – reducing to 10% by the end of 2012. A policies and practices in these areas, as 2.1 times). The Company normally aims to further 40% is subject to interest rate well as details of other key CR issues for pay interim and final dividends that collar arrangements as at 1 January 2008, the Group. represent approximately one third and also reducing to 10% by the end of 2012. two thirds, respectively, of total dividends. The Group also has a number of key The remaining exposure is at floating suppliers who provide products and The Company obtained a renewed rates. The Board will continue to review services to the Group. authority from shareholders at the Annual periodically the borrowing and hedging General Meeting held in May 2007 to In Retail, the most significant relationships arrangements to ensure that they remain buyback up to 10% of the issued share are with Leisure Link and Global Draw appropriate to the needs of the Group capital. In 2007, the Company bought who both supply gaming machines to our and take account of changes in market back 2% of its opening share capital, all of LBOs in Great Britain, and Alphameric, conditions and business plans. which was cancelled. The aggregate cost who supply and maintain the Group’s (after expenses and stamp duty) of the In September 2005, the Board announced EPOS systems. SIS, in which the Group has acquired 2% of issued share capital was it intended to maintain an efficient and a shareholding, and Turf TV are the main £46.0m. flexible capital structure and would providers of pictures and data into our achieve these objectives by targeting a LBOs. The Group also has arrangements From June 2002, the date of its initial ratio of net debt to earnings before with the various horse and greyhound public offering to the end of 2007, the exceptional items, interest, tax, tracks via BAGS and Turf TV for the right Company has bought back a total of 19% depreciation and amortisation (EBITDA) of to screen pictures. of its original issued share capital approximately 3.5 times to be achieved Our two online casino providers (inclusive of shares bought back into over the medium term. By the end of Cryptologic Inc and Boss Media AB are treasury) returning £448.6m to December 2007, the Group net debt to important suppliers to the Interactive shareholders and paid dividends totalling EBITDA ratio was 3.4 times. a further £326.5m (excluding the business. Our bankers are important As we are now close to our target providers of funding and interest rate risk proposed dividend of 15.5 pence per share to be paid in June 2008). leverage and as we have current management products as well as investment opportunities both providing daily banking facilities through Approximately 2% of the issued share internationally and in respect of our distribution channels. capital at the end of 2007 is held as investment in IT systems to support our William Hill operates in a regulated treasury shares to meet future awards Interactive channel, we currently estimate environment where the potential risks under the Group’s various incentive and that the pace of our rolling share buyback identified previously include adverse share remuneration schemes. programme in 2008 is likely to slow. We changes to the regulatory and tax Financial structure and liquidity remain committed to returning surplus regimes. The Group both on its own and Following the acquisition of Stanley Retail capital to shareholders and our buyback via trade associations maintains an in June 2005, the Board considered the programme will be kept under regular ongoing dialogue with the DCMS and HM optimal capital structure and financing review. Treasury as well as with the Gambling arrangements for William Hill as a public Reconciliation of gross win to revenue Commission. company. Accordingly, the Group secured Due to the requirements of accounting The Government and the Commission new facilities of £1.2bn with a consortium standards, the Group discloses a different have identified responsible gambling as a of banks. £600m of the new facilities has top line measure of activity (revenue) in its key area of focus and we have a regular been structured as a five-year revolving accounts from gross win. The difference dialogue with DCMS, the Commission, credit facility and £600m as a five-year between the two measures is the VAT William PLC Hill & Accounts 2007 Annual Report GamCare, the Responsibility in Gambling term loan. These facilities are repayable in payable on machine income and the Trust and trade associations in this area. March 2010. In June 2006, the Group following is a reconciliation for the periods We also, via relevant trade associations, arranged a further new five-year bank presented between gross win and have arrangements for alerting sports facility of £250m. This facility is repayable revenue as disclosed in the attached regulatory bodies to unusual betting in July 2011. The directors believe that financial statements: patterns. The Group is a major contributor to the 53 weeks 52 weeks horse and greyhound racing industries via to 1 Jan to 26 Dec the statutory levy and voluntary levy 2008 2006 respectively. £m £m Financial review Gross win 983.7 931.3 Returns to shareholders VAT on machine income (43.3) (37.1) The Company is proposing to pay a final Revenue 940.4 894.2

11 12 William Hill PLC Annual Report & Accounts 2007 Board of Directors Board ofDirectors Simon Lane Development Ian Spearing ToppingRalph Charles Scott Flybe Group Limited (Nonexecutive director) Emcore Corporation (Nonexecutive director) InTechnology PLC (Nonexecutive director) Current Directorships: Corporate Committee Responsibility Nomination Committee (Chairman) Board Committees: governance for corporateResponsibility bestpractice Chairman oftheBoard Responsibilities: Financial Controller, Confectionary Mars Director ofCorporate Finance, Safeway plc Group Finance Director, Fisher Albert Group plc Finance Director, Center Parcs Group plc (UK) Former roles: andinternal audit security Finance, strategic planning, investor relations, Responsibilities: Corporate Committee Responsibility Board Committees: policy International, industry, andpublic regulatory Responsibilities: (appointed May 2007) Corporate Committee Responsibility Board Committees: profitability oftheGroup’s operations managementand andtheday-to-day direction Responsible for theGroup’s overall strategic Responsibilities: Executive inFebruary 2008) (appointed adirector inMay 2007 andChief Group Finance Director Group Director, Corporate Strategy andBusiness Chairman Chief Executive Year ofappointment: Age: AccountantChartered Qualifications: Chief Financial Officer, IMSInternational Nonexecutive Independent Senior director, TBI PLC Non executive director, Adidas-Salomon AG Chairman, Robert Walters PLC Chairman, Cordiant Communications Group PLC Chairman, Saatchi &Saatchi PLC Former roles: Year ofappointment: Age: AccountantChartered Qualifications: Year ofappointment: Age: Ladbrokes PLC –UK, Line Management PLC Assistant ManagingDirector –Belgium, Ladbrokes Belgium, Ladbrokes PLC Managing Director –Germany, Netherlandsand Business Development Director – William PLC Hill Managing Director –UKRetail, William PLC Hill Former roles: Year ofappointment: Age: Various roles within William PLC Hill Former roles: 59 45 60 56 2002 2006 2007 2007 Board of Directors

David Allvey Independent non executive director Board Committees: Former roles: Audit and Risk Management Committee Group Finance Director, BAT Industries PLC (Chairman) Group Operation Officer, Zurich Financial Services PLC Nomination Committee Group Finance Director, Barclays Bank PLC Remuneration Committee Non executive director, McKechnie Group PLC Member of the UK Accounting Standards Board Current Directorships: Member of International Accounting Standards Resolution PLC (Non executive director) Insurance Group Costain Group PLC (Chairman) Chairman of the Fiscal Committee of the 100 Group Intertek Group PLC (Non executive director) of UK Finance Directors Thomas Cook PLC (Non executive director) Qualifications: Arena Coventry Ltd (Chairman) Chartered Accountant Age: 62 Year of appointment: 2002

David Edmonds: CBE. D.Litte. Independent non executive director Board Committees: Former roles: Corporate Responsibility Committee (Chairman) Director General of Telecommunications at Oftel Audit and Risk Management Committee Board Member, Office of Communications Nomination Committee Remuneration Committee Board Member, English Partnerships Managing Director, Group Central Services, National Current Directorships: Westminster Group PLC Hammerson plc (Non executive director) Wincanton plc (Deputy Chairman) Chief Executive of the Housing Corporation

Other Organisations: Qualifications: Chairman, NHS Shared Business Services BA (Hons), University of Keele Chairman, NHS Direct Health Trust Age: 63 Legal Services Commissioner Year of appointment: 2005 Trustee, Social Market Foundation Board Member, Keele University Science & Business Park Ltd

J M Barry Gibson Senior Independent Non Executive Director Responsibilities: Industry Bodies: Senior Independent Non Executive Director Chairman and Trustee Retail Trust (charity) undertaking duties as identified in the Former roles: Combined Code Group Chief Executive, Littlewoods Plc Board Committees: Group Retail Director, BAA Plc Remuneration Committee (Chairman) Non executive director, Limelight Plc Audit and Risk Management Committee Non executive director, Somerfield PLC Nomination Committee Age:56 Current Directorships: Year of appointment: 2002

National Express Group Plc (Senior Independent William PLC Hill & Accounts 2007 Annual Report Director) Homeserve PLC (Non executive director)

Thomas Murphy General Counsel & Company Secretary Responsibilities: Qualifications: Legal, secretariat and regulatory Solicitor Former roles: Age: 39 General Counsel & Company Secretary, RHM plc General Counsel, The Automobile Association

13 14 William Hill PLC Annual Report & Accounts 2007 Directors‘ Report Ralph Topping Chief Executive Chief Topping Ralph ChiefExecutive Chairman David Harding Charles Scott comprise: period andupto 27February 2008 duringthe The directors whoserved Directors 21.75 pence pershare). (52 weeks ended26December 2006– of 23.25pence pershare for theperiod paid on5December 2007,makesatotal interim dividendof7.75pence pershare which, ifapproved, together withthe Register on2May 2008 ofMembers shareholders2008 to onthe ordinary June 15.5 pence pershare to bepaidon5 directors recommend afinaldividendof 26 December 2006-£166.8m). The the periodwas£157.4m(52weeks ended taxationandexceptionalafter items for The Group’s activities profit onordinary Results anddividends The Chairman’s Statement, theOperating andFinancial Review(O Business review the profits ornetassetsoftheGroup are listed innote 14to thefinancialstatements. principallyaff telephone andinternet bettingandonlinecasinopokerservices. andassociated undertakings The subsidiary oftheGroupThe duringtheperiodcontinue principalactivities to betheoperation oflicensed bettingoffices andtheprovis Principal activities 2008. for the53weeks ended1January r oftheGroup, ontheactivities The directors present together theirAnnualReport withthefinancialstatements andauditors’ Report Directors’ a paigExecutive director Group Finance Ian Spearing Simon Lane practice. The areas covered withintheOFRare asfollows: whichfollowing theremo Statement: OperatingandFinancial Review’ The OFRonpages4to 11hasbeenprepared withreference Reporting to theguidance intheAccounting Standard’s Boards’ Group attheendofyear. review oftheGroup’s businessduringtheyear, itfaces, andthepositi adescriptionoftheprincipalrisksanduncertainties Principal activities, products and services, objectives andstrategy, objectives Principal andservices, products activities, competition and e efrac niaosOR9 10 OFR OFR 11 4 10 OFR OFR OFR Future ofthebusiness prospects Key Performance Indicators Financial 2008 position oftheGroup asat1January 2008 1 January ofthebusiness,Review ofthedevelopment andperformance for 53weeks ended facingtheGroupPrincipal risksanduncertainties the marketsinwhichGroup operates on 17May 2007) (appointed adirector 28 September 2007) (resigned on 17May 2007) (appointed adirector Director David Allvey Independent non Independent David Allvey insurance liability andofficers’ Directors’ Financial Statements. out innote 1to theParent Company interests are set Details ofthedirectors’ out onpage24. Details ofcommittee membershipisset Independent Senior Gibson Barry non Independent David Edmonds fies insurance cover againstcertain officers’ and purchased andmaintainsdirectors’ the Company. additiontheGroup has In breach oftrustinrelation to theaffairsof for negligence, default,breach or ofduty granted from to liability him by thecourt with any applicationinwhichrelief is in whichheisacquitted orinconnection which judgment isgiven inhisfavour or proceedings, whethercivilorcriminal, in Company, indefending againstliability indemnified outoftheassets officers oftheCompany shallbe of theCompanies thedirectors Act, and to theprovisionsAssociation andsubject of 214oftheArticles Pursuant to Article FR) and the Corporate Responsibility Report together provideFR) andtheCorporate af Report Responsibility executive director Director Non Executive executive director val of the statutory requirementval ofthestatutory for anOFRisconsidered bes invoiced by suppliers duringtheperiod. based ontheaverage dailyamount purchases), (26 December 2006–19days’ purchases were equivalentto 15days’ creditors 2008 ofthe Group at1January abide by theterms ofpayment. Trade made aware oftheterms ofpayment and ensureeach transaction, thatsuppliersare suppliers whenagreeing theterms of to settleterms ofpaymentpolicy with on payment butitistheGroup’s practice The Group doesnothave aformal code Supplier payments policy biographies ofthecurrent directors. Please refer to pages12and13for for re-election. AGM, andbeingeligible, offer themselves May 2007,willretire atthe fromeffect 17 appointed by theBoard asdirectors with Spearingand Messrs Topping, who were offer themselves for re-election. and AnnualGeneral Meeting at thenext andGibsonretire Scott Messrs by rotation re-election Directors proposed for in theexecution oftheirduties. incurred ofany oromission inrespect act legal liabilitiesandcosts for claims nulRpr Page Annual Report Location in F 6 OFR on ofthe ion of eports, ecting air t Directors Report William Hill PLC Annual Report & Accounts 2007 15 no relevant audit information of information audit no relevant are auditors which the Company’s and unaware; taken as a have that he ought to make himself to in order director audit relevant of any aware establish that the and to information of that aware are auditors Company’s information. out in note 34. Shares held by William Hill William held by Shares 34. out in note abstain from Trust Benefit Employee PLC voting. rights of special No person has any capital share the company’s over control fully paid. are and all issued shares the appointment and to regard With is the Company of directors, replacement its Articles by the governed of Association, Acts and the Companies Code, Combined ArticlesThe themselves legislation. related of special resolution be amended by may of directors powers The the shareholders. of Terms described in the Main Board are available of which are copies Reference, of and the Statement on request, on page 24. Governance Corporate Auditors and disclosure of and disclosure Auditors auditors to information at the date in office Each of the directors confirms when this report was approved that: • is there So is aware, far as the director • has taken all the steps director The in should be interpreted confirmation The with Section 234ZA of the accordance Act 1985. Companies re-appoint to & A resolution Deloitte will auditors Company’s LLP as the Touche at the forthcoming Annual be proposed Meeting. General of the Board By Order Murphy Thomas Secretary & Company Counsel General 2008 27 February Office Registered House Greenside 50 Station Road Green Wood London N22 7TP Annual General Meeting Annual General 15 May Thursday will be held on AGM The 22 Centre, Conference 2008 at Cavendish The W1G 9DT. London Duchess Mews, explanation of and an of the AGM notice set business are of non-routine the items out in the explanatory that circular this annual report.accompanies William Hill. The surveyThe out by was carried Hill. William partya third received and the responses A similar survey confidential. entirely were 2008. will be carried out during a major communications held Group The Hill Expo William 2008 – the in early event how employees – which explained to make a can everyone the Group within understanding to contribution significant business goals. the Group’s and delivering Share a SAYE operates Company The Option Scheme (Scheme) which is open based on a three, employees all eligible to monthly savings year or seven five Options under the Schemecontract. are 20% up to price with an exercise granted The price. share the prevailing below maximum permissible monthly savings under the Scheme is £250. Capital Structure Capital Details of the authorised and issued share with details of the together capital, issued share in the company’s movements in note shown are capital during the year has one class of ordinary company The 24. which carryshares fixed no right to carries the right to Each share income. meetings of the at general one vote company. no specific restrictions on the are There of of a holding nor on the transfer size the by both governed which are shares, of the Articles provisions general of The legislation. and prevailing Association agreements of any not aware are directors shares the company’s holders of between in restrictions on the result that may rights. securities or on voting of transfer set schemes are share Details of employee Authority to purchase own purchase to Authority shares stated with the Company’s In accordance policy of maintaining the optimum capital the Company’s and pursuant to structure, on-going to shareholders authority from shares, of its own make market purchases and purchased the Company ordinary 7,912,494 subsequently cancelled had shares These during the year. shares nominal value of an aggregate an for purchased £791,249.40 and were (including of £46.0m cost aggregate and stamp duty)commission at prices £6.50 and £4.82 per ordinarybetween share. shares own authority purchase This to valid until the forthcoming remains when it is Meeting, Annual General will be put that a resolution intended review. to shareholders to forward 3.95 Percentage Employee consultation Employee value on considerable places Group The and has of its employees the involvement on keep them informed to continued and affecting them as employees matters on the various factors the affecting is This performance of the Group. and informal formal through achieved magazine meetings and the Group are representatives Employee “Will2win”. of on a wide range regularly consulted and future affecting their current matters During the period a Group-wide interests. engagement survey was employee employees which provided implemented with an opportunity their views express to about working for they feel on how Disabled employees disabled by employment Applications for fully and fairly always persons are bearing in mind the aptitude considered, In and ability of the applicant concerned. of members of staff becoming the event disabled every effort ensure is made to within the Group that their employment is training and that appropriate continues Itpolicy be the to arranged. continues of career that the training, the Group of disabled and promotion development be persons should as far as is feasible that of other employees. identical to Legal & General Legal Barclays 3.74 Management Widows Scottish PartnershipInvestment 6.67 9.63 Management Capital and Research 10.84 Name of holder MFS Investment (%) shareholding Substantial shareholdings had Company 2008, the On 27 February with the in accordance been notified, the Rules of Transparency and Disclosure of the Services Authority, Financial in the ordinary share notifiable interests set out in the capital of the Company table below: During the period the Group made During the period the Group £581,000 (52 charitable donations of 2006 - ended 26 December weeks industry£423,000) principally to related charities serving in the communities operates. which the Group Charitable contributions Charitable 16 William Hill PLC Annual Report & Accounts 2007 Directors’ Remuneration Report management. The Committee also executive directors andsenior for remuneration the structuring packages Towers Perrin to provide advice on remuneration, theCommittee appointed determining thedirectors’In about hisown remuneration. inanyNo director plays discussion apart independent nonexecutive directors. members oftheCommittee are commenced are setoutabove. All the year inwhichmembership Remuneration Committee, together with Details ofthemembership any compensation payments. including basicsalary, otherbenefitsand directors andotherseniormanagement for eachoftheexecutivepackages determines thespecificremuneration executive directors andtheChairman, framework for theremuneration of Board theCompany’s and policy Code. determines andagrees It withthe the recommendations oftheCombined which isconstituted inaccordance with Remuneration Committee (Committee), The Company hasestablisheda Remuneration Committee Unaudited Information unaudited information. forseparate audited sections and hasthereforereport beendividedinto (as amendedby theRegulations). The accordance withtheCompanies 1985 Act hasbeenproperly preparedreport in ofthe whether intheiropinionthatpart andto state Remuneration Report oftheDirectors’ the “auditable part” to theCompany’sreport shareholders on The Regulationsrequire theauditors to oftheCompany.General Meeting proposed Annual attheforthcoming resolution to approve willbe thereport the ABI.As required by theRegulations, a National Association ofPension Funds and considered theguidance issuedby the has, also inpreparing thisreport, Committee remuneration. The directors’ Principles ofGoodGovernance relating to describes how theBoard hasappliedthe of theFinancial Authority and Services relevant requirements oftheListingRules (Regulations). alsomeetsthe The report Regulations Remuneration Report accordance withtheDirectors’ hasbeenpreparedThis report in Introduction Remuneration Report Directors’ In 2007, the Committee undertook a 2007,the CommitteeIn undertook remuneration related. beingperformance oftheir substantial proportion ensure theyremain competitive) witha the medianofrelevant market,(to salaries oftheseniormanagement around The Group’s isto positionthebasic policy Pension arrangements. • Long term incentives; and • payments; Bonus • andbenefits; Basicannualsalary • management: forremuneration senior package There are four main elementsofthe remuneration practice. Group’s businessenvironment andin take account offuture changesinthe needsto besufficientlyflexibleto policy considers thatasuccessful remuneration Remuneration Reports. The Committee described infuture Directors’ for yearspolicy 2008willbe after by theCommittee, andany changesin willcontinue unlesschanged This policy so faraspracticable, for subsequentyears. management remuneration for 2008and, the Company’s onsenior policy ofAssociation. Articles setsout This report by theBoard withinlimitssetoutinthe the nonexecutive directors isdetermined by theCommittee. The remuneration of areremuneration undertaken packages determination oftheirannual senior managementandthe measurement ofthekeymembers with bestpractice. The performance that oftheshareholders andbecompliant interests oftheseniormanagementwith managers ofahighcalibre, align the andretain to attract senior the ability designed to ensure thattheGroup has The hasbeen remuneration policy Remuneration policy the General Counsel advisers. orexternal advice wasalsotakenasappropriate from toany theGroup. otherservices Legal themselves. Towers Perrin didnotprovide relating to individualsotherthan Human Resources) aboutitsproposals Executive) Russell(Group andMr Director, consulted Harding (theformer Mr Chief ai lvy2003 2002 Year ofappointment David Allvey Gibson,Chairman Barry Director ai dod 2005 David Edmonds 5.3% to £300,000. Lanewillbeincreased by ofMr salary With effect from 1March 2008,thebasic salaries remained ineffect attheyear-end. the Group inSeptember 2007,these With theexception Harding wholeft ofMr increased to £475,000. Executive, was whereupon hissalary 2008, Mr Topping wasappointed Chief £315,000 respectively. On21February have beenincreased to £340,000and andexperience,knowledge theirsalaries promotion to theBoard, industry 17th May 2007andinrecognition oftheir Director, were appointed to theBoard on Corporate Strategy andDevelopment Director, Spearing, Operations andMr Topping, whowasthenGroup Mr increased by 3.6%to £285,000. Lanehadhissalary to £530,000andMr Harding’sMr wasincreased by 6% salary Lane were reviewed inMarch 2007. The Harding basicsalariesofMessrs and comparator group for thesepurposes. believes thatthisisthemostappropriate and scope to William Hill. The Group Perrin executive withasimilarsize survey based oncompanies withinthe Towers Benchmarks for comparison purposesare performance, experience andpotential. are determined by reference to pay levels, withinthecompetitive market, reviewed on1March eachyear. Individual The salariesofseniormanagementare andbenefits Basic annualsalary currently holdnosuchpositions. accept appointments. external They the Board’s priorwritten consent to Executive directors are required to obtain plan (thePerformance Share Plan). Plan) andtheexistinglongterm incentive bonus deferral plan(theDeferred Bonus (EBMS)–toScheme replace theexisting plan –theExecutive BonusMatching ofanewexecutiveintroduction share and attheAGM approved the consulted over theCommittee’s proposals long-term incentives. Shareholders were appropriate balance between annualand management, focusing onthe incentive arrangements for senior comprehensive review oftheCompany’s Directors ’ Remuneration Report William Hill PLC Annual Report & Accounts 2007 17 above inflation) earnings per share above (calculated (Real EPS) growth and items); exceptional excluding performance. awards of shares to the value of a to of shares awards Under the salary. of basic percentage performance two are PSP there conditions: • and over (i.e. real Group’s The • Return (TSR) Shareholder Total awarded In 2006 the Committee the to and Lane shares Messrs Harding value of 200% of salary and Messrs the to and Spearing shares Topping value of 100% of salary (the 2006 of one half of the vesting The Awards). will Tranche) (the EPS 2006 Awards in growth depend on the Company’s of the in terms Real EPS, measured in Real EPS annual growth compound financial years the three over achieved with Real comparison 2008 by 2006 to if Real will vest 2005. No shares EPS for 4% per annum, is below EPS growth 25% will 4% per annum growth for per 12% growth above and for vest, of the 2006 annum, the EPS tranche of vesting The in full. will vest Awards relative total shareholder return (the TSR (the return shareholder total relative Tranche). target Tranche, Under the EPS Index(CPI) Price performance is Consumer which, 50% of one plus 3% per annum, at For will vest. shares half of the matching plus 9% per maximum performance (CPI of the annum), 100% of one half under No shares will vest. shares matching is if EPS growth will vest the EPS tranche less than CPI plus 3%. that a shares number of matching The TSR under the participant will receive TSR depends on the Company’s Tranche, a comparator to performance relative retail the from of 29 companies group if will vest No shares sector. and leisure rankingTSR the 50th is below the of the 25% of one half percentile, at the 50th will vest award matching the 75th percentile, and at the percentile in full. will vest Tranche TSR on a will vest shares matching The and target basis between straight-line maximum performance. other four are the EBMS, there from Aside the for Except schemes in existence. share The in use. not currently plan, all are SAYE summarised below:details of these are (a) conditional for PSP provides The made in respect a transitional of 2007, and 2007 was required for arrangement for in shares the amount of bonus paid to was adjusted the 2006 financial year the introduction of the EBMS. facilitate but fixed, cash element remained The our remuneration by been advised having element was the share consultants, 64% of salary 45% to by increased reflecting expected the value of the PSP and also takingdiscontinued into element the new matching consideration under the shares the deferred attaching to shares and matching deferred The EBMS. Mr the EBMS under to Harding awarded all lapsed on his resignation. Topping Messrs Lane, for Bonus payments ended the 53 weeks and Spearing for 1 January 77% of basic salaries, 2008 were in cash with the 30% of which is payable in March in shares payable 70% remaining anniversary2011, the third of the cash described the terms on bonus payment, above. the 2008 for performanceThe measure The be PBIT. to bonus will continue this measure that believes Committee of short-term the best indicator remains bonus performanceoperating for purposes. incentives Long-term to provided are incentives Long-term and align aid retention performance, drive with those of of executives the interests In 2007 following shareholders. the with major shareholders, consultation at shareholders by EBMS was approved the AGM. and certain directors other executive For the EBMS will replace senior executives, from Bonus Plan the PSP and the Deferred the by 2008 and will be administered Under the EBMS, executive Committee. 70% of their annual will receive directors bonus (on a pre-tax basis) in the The terms. on deferred shares Company’s award a matching then grants Committee on a ratio of not directors executive the to If the executive one. than one for more years, in service three remains director for the in addition to he will be entitled, a number of the to shares, deferred reference by calculated shares matching performance two measured to conditions the three-year performance period. over will shares One half of the matching earnings per depend on the Company’s and Tranche) performance (the EPS share the Company’s to the other half will relate The basic salaries of other senior basic salaries The and reviewed management were 30% in 3% and between by increased end 2007. Increases at the higher March individuals who to of this range relate the period and during role changed have based on an external assessment of are salary In setting salaryappropriate levels. pay to sensitive is the Committee levels in the Group. elsewhere and conditions the vast for of increase level general The was 3%, with majority of other employees receiving number of employees a limited performance (where this level rises above it). merited senior In basic salary, addition to other competitive management receive such as a fully expensed car or benefits, and health cover private car allowance, It is intended permanent health insurance. benefits but these provide to continue to a cash the flexibility provide to retain all of these or any for alternative individual circumstances. to according Bonus payments participate to eligible in a are Executives senior management bonus scheme that is on an annual the Committee by reviewed the most appropriate determine basis to For year. that performance for measure financial the Group’s 2007, this comprised on profit by performance as measured ordinary exceptional activities before and taxation (PBIT) charges finance items, and with the introduction of the EBMS of 90% of payment a target for provided basic salary of and a maximum payment in 30% of which is payable 165% of salary, 70% paid in cash with the remaining EBMS The basis. on a deferred shares that was Bonus Plan a Deferred replaces in 2005 as a shareholders by approved element which the share through vehicle annual bonus scheme of the executive EBMS, which is The can be delivered. provides detail below, explained in more under the scheme are that awards individual after a the relevant to released further three-year period and provides a participant will lapse where that awards unless otherwise employment, leaves in the Bonus Scheme rules or stated otherwise the by determined Committee. Remuneration actual to under the EBMS relate awards As the bonus in respect of the prior years, bonus under the revised first payments EBMS awards 2007 will drive for regime were 2008. Because no PSP awards for 18 William Hill PLC Annual Report & Accounts 2007 Directors’ Remuneration Report b The Long Term Incentive Plan(LTIP) (b) Company’s overTSR performance a Release oftheshares dependsonthe any financialyear was100%ofsalary. value ofshares thatwere awarded in one andaccordingly themaximum was onaratioofnotmore thanoneto management. The matching award (the matching award) for senior 50% management andupto afurther award) for middleandsenior (thebasic of upto 50%ofsalary conditional awards ofshares to avalue PSP in2005. The LTIP provided for management andwasreplaced by the was inplace for middle andsenior the 2005and2006PSPlapsed. September 2007andhisawards under thebusinessin Harding left Mr EPS Tranchevested. result 35.2%oftheaward underthe period, however, was6.24%andasa over performance thethree-year TSR Tranche vested. The EPSgrowth percentile andnoshares underthe wasbelow the50th performance For the2005Awards, theGroup’s TSR above for the2006Awards. vests onthesamebasisasoutlined the 2005Awards (the TSR Tranche) The vesting oftheremaining halfof this halfofthe2005Awards vest in full. and for above 12%growth perannum, 4% perannumgrowth 10%willvest, growth isbelow 4%perannum,for for 2004. Noshares willvest ifRealEPS 2005 to 2007,by comparison withEPS achieved over thethree financialyears, compound annualgrowth inRealEPS vest dependingontheCompany’s the 2005Awards (theEPS Tranche) to thevalueof200%salary. Halfof Messrs Topping andSpearing, shares to thevalueof300%salary, and Harding receivedMr awards ofshares previous awards (theAwards) in2005, annum isnotachieved. For the will vest ifRealEPSofatleast3%per ofthe addition nopart TSR tranche the 2006Awards willvest infull. In above the90thpercentile, thishalfof vest atthe50thpercentile andator below the50thpercentile, 25%will shares willvest ifthe is TSR ranking 2006.No 100 indexon1January companies ranked 31-100intheFTSE Company’s TSR relative to the (the TSR Tranche) willdependonthe the remaining halfofthe2006Awards c The Executive Director Incentive Plan (c) and alloftheshares have vested. periods were completed by June2005 performance. The three performance would vest for below median on astraight-line basis. Noshares half andthefullamountwould vest, between median andupperquartiles, isbetween the and ifperformance achieved, half theshares would vest, median If was TSR performance the shares inthattranche would vest. wereTSR performance achieved, all tranche vesting date. top quartile If immediately preceding eachrelevant date ofadmission to thedate companies) over theperiodfrom the FTSE 250(excluding investment againstcompanies inthe performance to theCompany’s2002), subject TSR ofadmission(20June anniversary from thedate ofthefirst 40%), starting three annualtrenches (30%,30%and to anaward ofshares whichvested in Under thescheme, eachwasentitled shares to theLondon Stock Exchange. event ofadmissiontheCompany’s HardingMessrs andSingerinthe (EDIP) wasestablishedto reward vested in2007. the shares inthematching award have shares inthebasicaward and33%of percentile andasaresult 22%ofthe comparator group placed itinthe51st againstthe TSR performance For the2004award, theCompany’s Spearing allparticipated. Harding,which Messrs Topping and An award wasmadeinMarch 2004,in Harding didnot. butMr participated Messrs Topping andSpearing was granted inMarch 2003inwhich group. The firstaward undertheLTIP decile compared to thecomparator toTSR beinthetop performance andfullvestingperformance requires shares vest for median TSR isbelow median, 20%of performance shares vest iftheCompany’s No Company’sperformance. TSR Shares to vest the inproportion individual atthedate ofvesting. the continued employment ofthe companies) over thesameperiodand FTSE 250(excluding investment ofcompanies inthe the performance periodmeasuredthree-year against Mr LaneisamemberofthePensionsMr earnings limitasinthe “Retirement Plan”. executive to thesame directors subject for scheme are 20%ofpensionablesalary contributions underthemoneypurchase of executive directors. The employer joiners, includingany future appointments Savings Plan ofnew 2001,inrespect a moneypurchase scheme, thePensions to newentrants andhasbeenreplaced by schemeisclosed The current finalsalary non-pensionable payment. the remainder, £120,000beingpaidasa with contributions on£220,000ofhissalary the schemeandhereceives pension the EarningsCap dueto whenhejoined Mr Topping, however, isnotrestricted by Harding’sMr caseupto thedate ofleaving. loss ofbenefitintheperiod, in Spearing received for this 10%ofsalary of 10%total salary. Harding Messrs and compensated supplement for by asalary limit, andtheEarningsCap before it,is loss ofbenefitasaresult ofthisearnings benefits were restricted accordingly. The to theEarningsCap, andmembers’ earnings limitwasintroduced, equivalent From April2006aschemespecific payments are pensionable. the Lower EarningsLimitandnoother Pensionableservice. less pay isbasicsalary four timessalary, intheevent ofdeathin payment ofalumpsum,equivalentto pensionsandthe eligible for dependants’ pensionable service. Their dependantsare the EarningsCap, for eachyear of rate of1/30thpensionablesalary, upto Benefitsaccrue ata and lengthofservice. benefits basedonfinalpensionablepay of theGroup. This provides defined theemployment Harding untilheleft Mr of the William Pension Hill Scheme, aswas section members ofthe “Retirement Plan” Messrs Topping andSpearingare mechanism andto recognise longservice. are provided asaretention to act competitiveMarket retirement benefits Pension arrangements options. of any entitlementofadirector to share to bemadeto theterms andconditions No significant amendmentsare proposed The Company alsooperates SAYE (d) participate. participate. managementareSenior eligible to 20% below theprevailing share price. granted withanexercise price upto employees underwhichoptionsare Share for OptionSchemes eligible Directors ’ Remuneration Report William Hill PLC Annual Report & Accounts 2007 19 elect to terminate the contract by elect terminate to making in lieu of notice a payment the salaryequal to that Mr Lane would during the notice received have amount in respect rated a pro period, Mr Harding resigned in June 2007 and his Mr resigned Harding he left ended when employment the 2007. HisSeptember on 30 salaryGroup and he has received on that date ceased no further notice in lieu of his payments to continued however, He has, period. with occasional the Group provide consultancy services which he has for Itbeen paid £12,000 in total. was also a pro-rata receive that he would agreed under the 2007 Executive payment Bonus scheme that Operating Director a for allowed This the EBMS. preceded with of 75% of salary, maximum payment in cash and one third payable thirds two with arrangement The shares. in deferred the cash him to Mr restricted Harding a maximum of 50% and i.e. element only, performance in based on the Group’s 22% of his for 2007 he will be eligible salarypro-rated of leaving at the date of £87,450. a payment amounting to under a serviceMr Lane is employed dated contract with the Company Remuneration The 2006. 20 March the opportunity took Committee to the servicereview contract used for in the light of existing directors in best practice in this area developments institutional to and with regard contract Mr Lane’s guidance. shareholder ending term an indefinite is for (age date on his retirement automatically 12 months’ by be terminated 65), but may either party by given notice and contains provisions: the following • at its discretion may Company The FTSE mid 250 (excluding investment companies) FTSE mid 250 (excluding investment William Hill

Dec-02 Dec-03 Dec-04 Dec-05 Dec-06 Dec-07 Value of hypothetical £100 holding £100 hypothetical of Value Historical TSR performance FTSE mid 250 (excluding investment £100 holding over 5 years versus in the value of a hypothetical Growth companies) index. day average values. Comparison based on 30 trading constituent companies over the period. over companies constituent closing values at The 1 January the value of 2008 represent and each nominal holding at that date and price reflect the change in the share re-invested the value of dividend income the period. over directors’Executive contracts policy that executive It is the Company’s contracts with an should have directors a maximum for providing term indefinite no Consequently notice. of one year’s period has a contractual notice executive of 12 months. in excess the of early termination In the event directors’policy on executive contracts a up to compensation for provides maximum of 12 months’ basic salary, and other benefits, pension contributions, Committee The annual bonus. pro-rated reduce mitigation to will also consider a departing to compensation director do so. to appropriate where under a serviceMr was employed Harding 28 May dated contract with the Company 2002 and was entitled under the contract participation a basic annual salary, to in a company bonus scheme, the Company’s in lieu), permanent car (or cash allowance medical and private health insurance Mr was also Harding cover. insurance membership of the Company’s entitled to pension scheme (pensionable salary and received the Earnings Cap) to limited of 10% of basic salaryan annual payment the reflect restriction the imposed by to scheme specific earnings limit. an indefinite contract was for Mr Harding’s on his ending automatically term be (age 63), but could date retirement 12 months’ by terminated by given notice either party. Savings Plan and he receives a further and he receives Plan Savings £30,000 per annum of pension the loss for in compensation contribution the Earnings Cap. of benefit above is 63 (final age normal retirement The salary) and 65 (money purchase). view of the Age in However, in introduced Discrimination legislation October 2006, individuals can opt to workingcontinue until 65, the Group’s age. retirement normal recognised minimum regarding Policy shareholding executive policy require to It is the Board’s and certaindirectors members of senior hold a minimum management to equal to in the Company shareholding not Whilst basic salary. one year’s the Committee contractually enforceable so as not its discretion expects exercise to extendto participation in various bonus incentive schemes and long term individuals who fail to to arrangements meet the minimum shareholding All members of the senior requirement. whom this was for management team the end of 2007 met the applicable by as requirement, minimum shareholding and Simon the Committee by stipulated Lane is expected meet the minimum to the end of by requirement shareholding set in the were timeframes These 2009. expectation that all or part of the options under the various awarded and shares these dates by schemes will vest share with the executive providing thereby towards that can contribute shares meeting the minimum shareholding requirement. graph Performance the graph the Regulations, by required As performance, the Company’s shows above with that of compared TSR, by measured the performance 250 of the FTSE Index. companies) investment (excluding investment 250 (excluding FTSE The Indexcompanies) has been selected for because it is the index this comparison determine to the Company used by long of its current under most payments arrangements. incentive term of points representing consists graph The the change in the value of a nominal of £100 made on 31 investment and the 2002 in the Company December investment 250 (excluding FTSE The Index,companies) respectively. change in value of the index holding reflects changes in the value of the 20 William Hill PLC Annual Report & Accounts 2007 Directors’ Remuneration Report Nomination Committee. Following Mr the Company, including chairingthe rendered ofallservices to2007 inrespect to £262,500witheffect from 1March Scott’sMr basicannualfee wasincreased term endingon31December 2009. three-year 5 December 2006for afurther by aletterwas extended dated agreement by theBoard, histerm ofoffice NonExecutiveIndependent Director, and Committee, chaired by theSenior Following areview by theNomination office expired on31December 2006. 2003andhisinitialterm28 October of under anappointmentletter dated Executive 2004 Chairmanon 1 January director on15April2002andNon wasappointed Scott anonexecutiveMr contracts. do nothave service relevant role. The nonexecutive directors commitment andresponsibilities ofthe account ofthe Remuneration issettaking directors ofsimilarcompanies. offeessurveys paidto nonexecutive Association andbasedonindependent of within thelimitssetby theArticles remuneration isdetermined by theBoard letters ofengagement andtheir All nonexecutive directors have specific appointment letterof Non executive directors’ pension (seecomments onpage19). of Laneotherthaninrespect to Mr in thesameformat asthatwhichapplies fromeffect 17May 2007. Their is contract with contract employed underaservice Messrs Topping andSpearingare There obligationto isacontractual • At theCompany’s discretion, this • soon asreasonably practicable secure alternative employment as fee; and or 1/12th ofthebasicannualsalary then theyshallbereduced by 80%of monthly payments are beingmade arrangement whilethe consultancy pursuanttoor provides a services commences alternative employment Lane pay ininstalmentsandMr instalments. theCompany If to elects lump sumorin12equalmonthly payment may bemadeeitherasa his contract; benefits to whichheisentitledunder of providing pensionandallother and theannualcost to theCompany which theemployment terminates, oftheyearof bonusinrespect in scheme. eligible to jointheGroup’s pension Company’s incentive schemesandare not inany ofthe cannot participate appointment. Nonexecutive directors oftheterm of unexpired portion and nofee ispayable of the inrespect directors are notentitledto compensation termination or resignation nonexecutive year term to expire in2011.Upon three- 2008for afurther from 1January byoffice aletter wasextended witheffect dated 22 December 2004andhisterm of 2005by anappointmentletter in January as anindependentnonexecutive director respectively. Edmondswasappointed Mr 17 May 2008and22May 2008, term three-year to expirefor on afurther by lettersextended dated 12April2005 respectively andtheirterms ofoffice were letters were dated 17and22May 2002, Allvey’sMessrs andGibson’s appointment and agreement withtherelevant director. to rigorous review attherelevant time term three-year subject for afurther serve executive directors may berequested to for term. anadditionalthree-year Non at AGMs, theywould to serve beexpected andre-election performance satisfactory normal circumstances, to andsubject an initialterm ofthree years andin Non executive directors are appointed for fee of£2,000. Executive Director waspaidanadditional Non Independent 2007, theSenior to £10,000.Also, from witheffect 1March chairing aBoard committee wasincreased to £42,500andtheadditionalfee for to nonexecutive directors wasincreased March 2007,thebasicannualfeeIn paid executive role. Executive, Scottreverted to hisnon Mr appointment ofMr Topping asChief effect from 2007.Onthe 1October fees were increased to £350,000with responsibilities andtimecommitment, his recognition ofhisadditional the role ofExecutive Chairman,andin Harding’s Scottassumed Mr departure, Directors ’ Remuneration Report William Hill PLC Annual Report & Accounts 2007 21 or on urance. 070,839 ££ total total total total 2007 2006 2,869 46,833 1,3691,369 46,833 46,833 281,875 248,333 5,287,677 7,282,800 2,442,995 2,806,719 3 dividends 2 payable on the relevant shares between the date of the date between shares on the relevant payable in kind bonuses 1 ££££££ –––––1, 5––– 9–––5 9–––5 9–––5 Fees/ Benefits Annual In lieu of 2007 2006 basic salary vesting and the date of exercise. and the date vesting 30% of the annual bonus is payable in cash with the remaining 70% payable in shares in March 2011, the third anniversary the third 2011, in March of in shares 70% payable in cash with the remaining 30% of the annual bonus is payable the EBMS. described for on the terms the cash bonus payment, of these on exercise whereby under the rules of the EDIP scheme, amounts payable In represent lieu of dividend payments the dividends an amount equivalent to the holder is entitled to options, Included in fees/basic salary for Messrs Harding and Spearing was £39,250 and £15,311 respectively, paid as a salary salaryIncluded was £39,250 and £15,311 respectively, and Spearing Messrs in fees/basic Harding for the Earnings Cap. to supplement in lieu of pension benefit lost due Charles Scott 281,87 Barry Gibson 52,86 David HardingDavid Simon Lane 431,750 283,333 1,003 23,115 87,450 219,450 109,297 629,500 – 1,004,008 525,898 343,040 Ian SpearingRalph Topping AllveyDavid EdmondsDavid 168,419 156,499 8,742 12,105 51,36 51,36 242,550 261,800 – – 419,711 430,404 – – Tom Singer Tom payments in connection with the termination of qualifying services. The non-cash elements of the executive directors’ non-cashThe elements of the executive in connection qualifying services. of with the termination payments remunerati and permanent health ins card travel health cover, private car or car allowance, of a company packages of the provision consist Directors’ options and awards share over, or awards acquire, options to the value of share amounts for do not include any above emoluments disclosed Aggregate annual bonuses. to in relation as disclosed except the directors by or held to granted ordinary in the Company shares The executive directors are the highest paid employees within the Group. the highest paid employees are directors executive The loss of office for compensation for during the financial year the Company by directors executive made to no payments were There Directors’ emoluments: 3 2 Aggregate emolumentsAggregate 1 1,477,483 44,965 811,250 109,297 2,442,995 2,806,719 Name of Director directors Executive Emoluments options of share Gains on exercise 2,844,682 4,476,081 Aggregate directors’Aggregate remuneration: Audited information Audited Non executive directors Non executive 22 William Hill PLC Annual Report & Accounts 2007 Directors’ Remuneration Report ai lvyN/ N/ David Edmonds David Allvey ap opn TP20 ,9 737 i ac 07March 2014 March 2007 Nil – – (7,397) – 7,397 LTIP 2004 Ralph Topping a paigPP20 59,48 PSP2005 Ian Spearing ai adn DP4000–(0,0)––NlJn 05 June2008 June2005 Nil – – (400,000) – 86,95 PSP2006 400,000 EDIP N/ Simon Lane David Harding Charles Scott ap opn prtn ou ,1 ,1 June2008 June2008 3,312 3,550 June2008 10,037 – – – – – – 3,312 3,550 2006 10,037 Operating bonus Operating bonus Scheme Operating bonus 1 Ralph Topping Ian Spearing David Harding Name ofdirector N/ 2 1 Gibson Barry 2,851,781 £ 2,496,725 £6.485 2006 £ Nil Scheme exercise date 385,000 price Name ofdirector EDIP options Scheme David Harding Name ofdirector Details oftheoptionsexercised duringtheperiodare asfollows: 2 1,624,300 – – – 38,890 40,546 £6.03 £6.21 £1.80 £1.80 9,194 9,194 EDIP SAYE2002 SAYE 2002 Topping Ralph Ian Spearing Tom Singer Details ofoptionsfor during theperiodare asfollows: directors whoserved terms criteria andconditions for orperformance any share optionsduringthefinancialyear. Options granted undertheSAYE criteria. Share to are performance OptionSchemes notsubject There have beennovariationsto t addition,thefollowingIn detailsthemovements ondeferred bonusshares for duringtheperiod applicabledirectors whoserved Or in the case of Mr Harding,Or inthecaseofMr hisdate ofresignation asadirector Spearingand Or inthecaseofMessrs Topping, theirdate ofappointmentasdirectors Harding,Or inthecaseofMr hisdate ofresignation asadirector Spearingand Or inthecaseofMessrs Topping, theirdate ofappointmentasdirectors BS20 098––5,4 i ac 00March 2017 March 2010 Nil 50,948 – – 50,948 – EBMS 2007 BS20 098––5,4 i ac 00March 2017 March 2010 Nil 50,948 – – 50,948 – EBMS 2007 BS20 050––6,0 i ac 00March 2017 March 2010 Nil 60,500 – – 60,500 – EBMS 2007 AE20 ,9 914 8p–– – 180p – – (9,194) – 1,91 9,194 SAYE 2007 SAYE 2002 AE20 ,9 914 8p–– – 180p – – (9,194) – 1,91 9,194 SAYE 2007 SAYE 2002 TP20 158–(243 5,9)–NlMrh20 March 2014 March 2007 Nil – (59,095) (22,413) – 81,508 LTIP 2004 S 0627,82 PSP 2006 S 0553,90 PSP 2005 S 0629,56 PSP 2006 S 052533––(4,5)–NlJn 08June2015 March 2016 March 2009 June2008 Nil Nil – – (173,912) (245,353) – – – – 173,912 245,353 PSP 2006 PSP 2005 ––– –– A–––––– –– A–––––– ––– –– A–––––– ––– –– A–––––– 7Dcme uigtedrn h uigte1JnayEecs rmwihExpiry from which Exercise 1January duringthe duringthe duringthe 27 December ubro ofie/Numberof Forfeited/ Number of hrsa rne xrie asdsae tDate shares at lapsed Exercised Granted shares at 2––– 6––– 4––– 2––– 5––– 0––– 6––– 1 eidpro eid2008 period period period TP20 243Nl£.8 3,4 – 134,142 £5.985 Nil 22,413 LTIP 2004 TP20 ,9 i 60 464– 44,604 £6.03 Nil 7,397 LTIP 2004 27 December during the during the 1 January Maturity Maturity 1 January duringthe duringthe 27 December ubro Numberof Number of DP1,0 i 5958,7 – 89,775 £5.985 Nil 15,000 EDIP hrsa rne rnfre shares at Transferred Granted shares at 1 ubro xrievlea 072006 2007 valueat Exercise Number of eidpro 2008 period period 786NlMrh20 March 2016 March 2009 Nil 27,826 394NlJn 08June2015 June2008 Nil 53,904 955NlMrh20 March 2016 March 2009 Nil 29,565 940NlJn 08June2015 June2008 March 2016 March 2009 Nil Nil 59,480 86,956 ,1 9pAg21 Jan2011 Aug 2010 494p 1,912 ,1 9pAg21 Jan2011 Aug 2010 494p 1,912 2 aktexercise exercise Market rc xrial date exercisable price ,4,8 4,476,081 2,844,682 Gains on Gains on Gains on Gains 2 date : he Directors ’ Remuneration Report William Hill PLC Annual Report & Accounts 2007 23 2 2 ar. ring f Increase inIncrease Accrued pension Inflation period 2008 1 £££££ 2006 increase inincrease in transfer Value of realValue Increase contributions value contributions director 2008 26 December in accrued period in the 1 January Accrued pensionAccrued increase Real accrued pension 1 ££££££ 2006 26 December net of transfer to period net of the made by 1 January Transfer valueTransfer pension accrued Other changes the value in Contributions value Transfer Or in the case of Messrs Spearing and Topping, their date of appointment as directors their date Topping, Or in the case of Messrs Spearing and as a director of resignation his date Or in the case of Mr Harding, Or in the case of Messrs Spearing and Topping, their date of appointment as directors their date Topping, Or in the case of Messrs Spearing and as a director of resignation his date Or in the case of Mr Harding, 1 2 David HardingDavid Ian SpearingRalph Topping 262,170 1,474,367 733,229 23,605 18,486 17,774 – 87,019 129,018 41,379 105,505 129,018 4,265 3,517 6,719 307,814 842,251 1,610,104 Name of director 1 2 David HardingDavid Ian SpearingRalph Topping 22,927 113,755 48,267 2,349 1,324 – 667 1,089 3,016 – 2,413 25,943 50,680 – 113,755 Name of director The market price of the ordinary at 1 January price market 2006 to The 27 December shares period from during the and the range 2008 was £5.25 1 January £6.76. 2008 was £4.80 to Directors’ pension entitlements benefit pension scheme defined members of the Group’s who were the only directors were Topping Spearing and Harding, Messrs. during 2007. of the ye duration the members for were Topping Mr left Harding active service 2007, whilst Messrs on 30 September Spearing and the members’ table shows the following with the Regulations, In accordance entitlement du in accrued the increase contributions, of the period: entitlement at the end the period and the accrued The transfer values disclosed above do not represent a sum paid or payable to the individual director. Instead they represent a Instead they represent the individual director. to a sum paid or payable do not represent values disclosed above transfer The liabilitypotential of the pension scheme. voluntary additional nor the resulting pay neither the contributions the option to contributions; Members have of the scheme tables. included in the above benefits are 2006 and 1 January December 26 pension fund between defined contribution 2008. Mr £22,350 to Lane’s contributed company The Approval on its behalf by: 2008 and signed on 27 February of directors the Board by reportThis was approved Barry Gibson Committee Chairman of the Remuneration 2008 27 February The following table sets out the transfer value of the directors’ table sets out the transfer following The in a manner benefits under the same scheme calculated accrued 11)” (GN Values o Transfer the Institute of Actuaries and the Faculty published by Benefit Schemes – “Retirement with consistent Actuaries: 24 William Hill PLC Annual Report & Accounts 2007 Statement on Corporate Governance apitd1 a 07 / / N/A 9 N/A N/A N/A 8 8 N/A N/A N/A N/A N/A 4 2 N/A 4 4 N/A 2 2 9 N/A 4 N/A N/A N/A 4 4 N/A N/A 5 1 6 6 4 1 4 N/A 4 1 7 2 2 12 3 7 7 6 12 1 Notes: 12 12 12 (appointed 17May 2007) 4 ToppingRalph (appointed 17May 2007) Ian Spearing Simon Lane 12 David Harding Gibson Barry David Edmonds David Allvey Charles Scott attended Meetings Number ofmeetingsheld 2007 Board andCommittee meetings respect of legal action againstdirectors. oflegalaction respect Appropriate insurance cover isinplace in September 2007. Harding resignedand Mr on28 the Board witheffect from 17May 2007 Spearing and Topping were appointed to attendance are setoutbelow. Messrs 13. DetailsofBoard andcommittee 12and independent, are listed onpages considered by theBoard to be other directors, includingthose NonExecutiveIndependent Director and The Chairman,theChiefExecutive, Senior The Board Chief Executive on21February 2008. combined. Mr Topping wasappointed of ChairmanandChiefExecutive were Harding,Mr theChiefExecutive, theroles resignation 2007of inSeptember with theexception thatfollowing the complied withtheprovisions oftheCode, During theperiod, theCompany has provisions Compliance withtheCode’s during theperiod. compliance withtheCode’s provisions provides anexplanationfor any non- Governance (theCode) andidentifies, and Combined Code onCorporate 2006 Financial Council Reporting applied theprinciplessetoutinJune this statement setsouthow theBoard has standards ofcorporate governance and The directors are committed to high Statement onCorporate Governance both attendances inpersonand by telephone. appointed directors witheffectfrom 17May 2007,allotherdirectors attended allofthe12scheduledBoard meetings. The figu specific issuesduringtheyear. With theexception theCompany Harding wholeft ofMr Spearin on28September 2007andMessrs The Board held12scheduledmeetings(includinganoff-site Strategy Day, withseniormanagers)duringtheperiodand4ad hoc Scheduled Approving theappointmentand • thearrangements Reviewing inplace • Group Reviewing performance; • theoverall Setting long-term direction, • other matters: toreserved theBoard include, amongst approved by theBoard annually. Matters delegated authoritiesare reviewed and to theBoardMatters Reserved and management practices. The of Schedule corporate governance andrisk andtoobjectives develop robust set theGroup’s long-term strategic is to provide leadershipto theGroup, to roleThe Board considers thatitsprimary to bediscussed. to comment onthematters opportunity a fullcopy ofthepapersandhas attend, hecontinues to beprovided with meeting andwhere adirector isunableto circulated inadvance oftherelevant Board andcommittee meetingsare set outonpages12and13.Papers for membership oftheBoard Committees are senior management.Detailsofthe to thevariousBoard Committees and powersduring 2007.Other are delegated schedule wasreviewed andupdated schedule ofmattersto it. reserved This The Board operates withinaformal Company Secretary; Company Secretary; removal ofany Board memberandthe issues; relating andindustry to regulatory management to theChiefExecutive; and delegatingday-to-day andstrategyobjectives oftheGroup 1 or ui n ikCorporate Audit andRisk Board dhcCmiteCmiteCmiteCommittee Committee Committee Committee Ad hoc aaeetRsosblt oiainRemuneration Nomination Responsibility Management limits; payroll processing; property withinapproved activity budgets; treasury capital expenditure againstapproved includethereleasedelegated authority of business. Examplesofareas ofsuch to managethe sufficient flexibility operational controls whilstproviding of maintainingeffective financialand which seeksto achieve thedualobjectives framework to executive management, management provides apractical delegatedThe to authority senior Succession planningfor senior • reviews ofBoard, Undertaking • Approval oftheGroup’s charitable • Approval oftheGroup’s annualplan, • Approving changesto theGroup’s • andapproving Reviewing theterms of • Committee). recommendation oftheNomination management andtheBoard (onthe and atleastannually; performance committee andindividualdirector social responsibility policies; corporatedonations andGroup-wide Group’s dividendpolicy; Statement,Interim andsettingthe andAccounts and Annual Report contracts; investment andmaterial projects acquisitions anddisposals;capital anycapital structure; significant basis; from committee chairmenonaregular Committees andreceiving reports reference ofthevariousBoard res shown inthetableinclude meetings heldto consider g and Topping whowere Statement onof Corporate Corporate Governance Governance William Hill PLC Annual Report & Accounts 2007 25 conducting a review of their terms of of their terms conducting a review assess to and continued reference performance; committee the Chairman and each between assess individual director to director other any performance allow and to and be raised; issues to the with an assessment by concluded performance, of its own Board the from the Board to feedback and the chairman of each committee of action to and the approval Board, issues raised. address necessary and senior management the Board to make presentations regularly Regular of responsibility. on their areas legal, on relevant provided are updates and financial governance corporate reporting are and directors developments external attend seminars to encouraged The their role. to of relevance on areas and an information has approved Board policy development for professional directors. has been induction programme A formal Secretary and the Company by developed of the Chairman. A range by approved and company-specific both general and copy in hard is provided information series of a by this is supplemented meetings with external advisers and in Induction are programmes employees. the the Board, appointment to for place and Risk ManagementAudit Committee, and the Committee the Remuneration Responsibility Committee. Corporate and the advice to access have All directors The Secretary. services of the Company and appointment of the removal Secretary reserved is a matter Company also obtains Board The approval. Board for advisers as and professional from advice when required. Performance evaluation Performance of performance evaluation of A process is directors and its committees the Board, undertaken the on an annual basis and the undertaken 2007 involved process for following: • committees Board four The • One-to-one held meetings were • performance The evaluation process Senior IndependentThe Non Executive the evaluation for led the process Director involving performance, of the Chairman’s a discussions with each other director, meeting with the other independent non structure, size and composition of the and composition size structure, with an evaluation of the (together Board of skills, knowledge balance and Board’s of the the membership experience); and the Committees various Board expectedand policy time commitment for appointments for multiple board directors. and non executive executive directors’The that the ensure aim is to reflects the changing of the Board balance The business. needs of the Group’s and the Board Nomination Committee the Board monitor to will continue The and skillsbalance at least annually. that the appointments is confident Board maintains Topping of Messrs Spearing and the necessary knowledge and experience level. of the industry at board required comprised the Board During the period, non executive independent three during number of directors The directors. part for six directors the period comprised a further for eight directors of the period, part for directors of the period and seven and May between Except the remainder. satisfied the the Company September, that at least half the requirements Code the Chairman, should excluding Board, directors non executive comprise be to the Board by determined independent. the are the Board Appointments to on the of the full Board, responsibility the Nomination of recommendation non the Board, On joining Committee. a formal receive directors executive which identifies the appointment letter, expectedtime commitment of them. A to is required candidate director potential outside disclose all significant appointment and prior to commitments a policy requiring approved has the Board of the Board by approval and disclosure executive all additional appointments for and terms The directors. or non executive of appointment of non conditions and service contracts of executive to available are directors executive inspection for at the Group’s shareholders during normal business office registered Meetinghours and at the Annual General and the meeting prior to 15 minutes (for during the meeting). Information and professional Information development detailed reports from receives Board The management on the executive performance at monthly of the Group as meetings and other information Board During the period, the Nomination During the period, the reviewed and the Board Committee Board balance, independence balance, Board and appointments The Chief Executive, Mr Harding, resigned Mr Harding, Chief Executive, The on 28 September the company from was a clear there 2007. Up until that date the between division of responsibilities whereby Chairman and Chief Executive the for the Chairman was responsible and the Chief running of the Board, responsible was the executive Executive the running of the business. for 28 September 2007 and Subsequent to 2008 when a new Chief until 21 February the Chairman was appointed, Executive of Chief Executive. also assumed the role Senior IndependentThe Non Executive satisfy the is to main role Director’s function of being outlined in the Code are if there shareholders to available which normal contact has failed concerns for lead the process to resolve, to performance evaluating the Chairman’s chair the Nomination Committee and to the to succession when it is considering No one individual has of chairman. role of decision-making. powers unfettered Mr Scott independence satisfied the A.3.1 of the detailed in provision criteria on his appointment as Chairman Code and details of his other significant set out on page 12. are commitments Chairman and Chief Executive Chairman and Chief Executive transactions; LBO development activities;transactions; development LBO and limits the setting of bet acceptance transaction processing. routine individuals with comprises Board The gained in wide business experience various sectors of industry and in the all to access have They public sector. the the Group, to relating information and servicesadvice of the Company ensuring Secretary for (who is responsible and is followed are procedures that Board and, Counsel), General also the Company’s external at the advice as required, expense of the Group. the Chairman met with During the period, without the directors the non executive and as being present directors executive the part appraise to process of the the Senior performance, Chairman’s met Director Independent Non Executive with Mr and Mr the Allvey Edmonds, other independent non executive directors. 26 William Hill PLC Annual Report & Accounts 2007 Statement on Corporate Governance available to shareholders iftheyhave NonExecutiveIndependent Director, is Gibson,astheSenior shareholders andMr strategy andgovernance issueswith The Chairmanisavailable to discuss following themeeting. can beaccessed viatelephone for aperiod and arecording oftheresults presentations relations website, www.williamhillplc.co.uk, made available on theGroup’s investor Group’s andinterim results preliminary are analysts following thepublicationof provided to institutionalshareholders and UK ListingAuthority. Slidepresentations accordance withtherequirements ofthe same timeto allshareholders, in sensitive information isreleased atthe care isexercised to ensure thatany price- with institutionalshareholders, although There continues to bearegular dialogue institutional andprivate shareholders. maintaining goodrelationships withboth The Board remains committed to Relations withshareholders out onpage16to 23. isset Remuneration Report The Directors’ Remuneration Board. the size, andcomposition structure ofthe consistent withtheBoard’s evaluationof relevant role. isalso Their re-election and to demonstrate commitment to their continues toperformance beeffective and theBoard believes thattheir to formal evaluation subject performance held office duringtheperiodhave been referred to above, thosedirectors who AnnualGeneral Meeting.the next As intheNotice for ofMeeting or re-elected believes eachdirector shouldbeelected The Board explainsthereasons why it three atleastonce years. every re-election director standsforthis meansthatevery appointment, heshallretire. practice, In than three years since hislastre- beenadirectorGeneral for Meeting more oftheAnnual director hasatthestart should retire by rotation butthatifa that eachyear onethird ofdirectors Company’s ofAssociation state Articles their appointmentby theBoard. The first annualgeneralmeetingfollowing atthe toAll directors are election subject Re-election Chairman. executive directors andfeedback to the are available uponrequest orviathe delegated toauthority themby theBoard, andthe including theirobjectives The terms ofreference oftheCommittees, standing committees oftheBoard. Corporate Committee, Responsibility are Committee Management Risk andthe Nomination Committee, theAudit and The Remuneration Committee, the Board Committees prior to thedate ofthemeeting. Accounts days working atleasttwenty and shareholders withtheAnnualReport to2008 AnnualGeneral Meeting isplannedto posttheNotice ofthe It for 2008andfuture shareholder meetings. intended to continue withthesepractices on eachsubstantiallyseparate is issue. It notes. Aseparate resolution was proposed andexplanatory of theNotices ofMeeting meeting. The website alsocontains copies on theGroup’s website following the general meetingand were madeavailable 2007 were announced attherelevant of proxy votes for themeetingsheldin voting intentions, thedetails shareholders’ that shareholders are aware oftheother be available to answer questions. order In attend meetingandwill the forthcoming attended the 2007meetingandintend to and Corporate Committees, Responsibility Nomination, Audit Management andRisk the chairmenofRemuneration, shareholders. Board members, including communicate withall directly to opportunity asanimportant Meeting The Board regards theAnnualGeneral onanadhocbasis. reports also receives copies ofrelevant analysts’ institutional investor sentiment. The Board and price performance, trading activity brokers onissuesrelating to recent share Board receives from its amonthlyreport to theBoard. As amatter ofroutine, the issues andconcerns ofmajorshareholders Group Finance Director communicate the basis andtheChiefExecutive and/or institutional investors onanon-attributed broker, Citigroup, ontheviews of The Group obtainsfeedback from its responsibility issuesgenerally. to discussgovernance andcorporate shareholders have beenheldonrequest and/or theGroup Finance Director and between theChairman,ChiefExecutive Group Finance Director. Meetings addressed through theChairmanor concerns thathave not,orcannot,be Remuneration Committee 28. page Committee on issetoutinitsreport The role andoperation oftheNomination Nomination Committee onpages29to 30. its report Committee Management Risk issetoutin The role andoperationoftheAudit and Committee Audit Management andRisk Accounts. and approval oftheAnnualReport under review andupto thedate of 2005, andhasbeeninplace for theperiod Financial Council inOctober Reporting and therevised guidance issuedby the Turnbull Guidance onInternal Control, process isconsistent withboththe identified, evaluated andmanaged. This by whichcriticalrisksto thebusinessare The Board monitors theongoingprocess throughout theGroup. division anddepartment in every recording thesystem ofinternal controls maintainsadatabase Audit department review thatisdocumented. The Internal systems, to whichare periodic subject maintenance oftheinternal control responsible for theimplementationand directors andseniormanagementare monitoring theireffectiveness. Executive Group’s internal control systems andfor The Board hasoverall responsibility for the Internal control onpages31to 36. Report Responsibility Committee are set outintheCorporate key focus oftheCorporate Responsibility Details ofthemembershipandareas of Committee Corporate Responsibility 16 to 23. onpages Remuneration Report Directors’ Remuneration Committee issetoutinthe The role andoperationofthe terms. more thantwo additionalthree-year for by terms three-year extendable no Appointments to Board committees are have advice. access to independentexpert committee andtheBoard. Allcommittees reviewed atleastannuallyby therelevant (www.williamhillplc.co.uk) andare Group’s investor relations website Statement of Corporate Governance William Hill PLC Annual Report & Accounts 2007 27 Going concern the financial prepared have directors The basis on a going concern statements after formed with their view, consistent that the making enquiries, appropriate and financially is operationally Group robust. Internal Audit Internal department Audit Internal The reviews of internal the extent which systems to to adequate are effective; are control risks; significant manage the Group’s assets; and in the Group’s safeguard Secretaryconjunction with the Company General (who is also the Company’s with legal compliance ensure Counsel), It provides and regulatory requirements. on independent and objective assurance and senior the Board to risks and controls management. on areas is focused work Audit’s Internal as the Group, risk to of greatest a structured risk by determined executive involving assessment process The and senior management. directors is summarised in this process output from an annual audit plan, which is approved and Risk Management the Audit by Audit Head of Internal The Committee. Finance the Group reports to regularly and Risk Audit and the Director Management Committee. department Audit of the Internal role The to continue of its work and the scope of changes within take account to evolve best practice. the business and emerging Assessment of risk Assessment risk matrix has been A corporate and has been updated developed Internal by detailed review following and senior management during the Audit annually matrix is approved The period. and Risk Management the Audit by matrix The and the Board. Committee the key risks facing the business, records of the the assessment of the likelihood risks crystallising and their potential to response and the Group’s materiality, each risk. management Responsibility for typically senior of the risks is attributed to management. and risk uses the control Board The identify and to management processes risks arising from significant manage any and ethical issues. environmental social, corporate details of the Group’s Further described on practicesresponsibility are 36. pages 31 to those already described, which are in which are described, those already risks; manage perceived to place and Risk Managementthe Audit on the adequacy Committee and control internal of effectiveness issues; control and significant systems evaluating and identifying, formally for the risks to the significant managing objectives; of the Group’s achievement and on the Management Committee and audit reviews of internal results undertakenwork other by departments. Each year the Board assesses the the Board Each year of system of the Group’s effectiveness financial, (including controls internal and controls and compliance operational the basis of: on risk management systems) • including procedures, Established • Regular reports to management by • Group-wide process continuous The • Reports and Risk the Audit to are systems control internal Group’s The than rather manage, to designed the achieve to the risk of failure eliminate, and can only provide objectives, Group’s assurance and not absolute, reasonable, In or loss. misstatement against material reasonable assessing what constitutes the considers the Board assurance, materiality of financial and non-financial the between risks and the relationship control internal and benefit from, of, cost systems. the actual reviews regularly Board The performance of the business and forecast as annual plan, as well with the compared other key performance indicators. and delegated Lines of responsibility Group’s The clearly defined. authorities are regularly are policies and procedures the throughout and distributed updated and Risk Management Audit The Group. reports on a regular receives Committee with the Group’s basis on compliance policies and procedures. failings or weaknessesNo significant were of the of the review identified as a result of system of the Group’s effectiveness control. internal 28 William Hill PLC Annual Report & Accounts 2007 Report of the Nomination Committee Recommended to theBoard that • During 2007,theCommittee also: committee composition. its size, andBoard structure and recommendations to theBoard regarding During theperiod, theCommittee made during2007 activities Main outcome ofmeetings. Committee to theBoard reports onthe The ChairmanoftheNomination senior managersbelow Board level. succession planningfor directors and The NominationCommittee oversees appointments. propose to theBoard any new executive directors andsubsequentlyto 2007 processselection for executive andnon- 2002 outaformal isto carry principal function 2002 request to theCompany andits Secretary website www.williamhillplc.co.uk orby the Committee canbeobtainedvia the A fullcopy oftheterms ofreference for Committee 2002 Role oftheNomination Year ofappointment 2007. met formally onfour occasions during regularafter meetingsoftheBoard and least three timesayear usuallybefore or The butat Committee meetsasnecessary the Committee. tocommittee assecretary members, acts The Company Secretary, oroneofthe David Edmonds Gibson Barry David Allvey Charles Scott, Chairman Director Chairman. are independentnon-executive directors andtheCommittee ischaired by theBoard to theCommittee on20December 2007. ofmembersthecommitteeThe majority together withtheyear inwhichmembershipcommenced. Edmondswasappointed Mr outbelowSet isthecurrent membership oftheNominationCommittee (Committee) andmeetings Membership oftheNominationCommittee Report Company; appointed executive directors ofthe Spearingand Messrs Topping be outcome ofthereview. to theBoardChairman reported onthe during theperiodandCommittee andtermsown ofreference performance The areview Committee of its undertook Approved ofthe theReport • Approved thedirectors whowould • Reviewed therole descriptionsfor • Reviewed itsprevious • Reviewed the Terms ofReference of • Reviewed anddefinedthequalities • Recommended thatDavid Edmonds, • Accounts. and the 2006AnnualReport Nomination Committee contained in ofassociation;and articles the 2007AGM inaccordance withthe at offer themselves for re-election Director; NonExecutive Independent Senior the Chairman,ChiefExecutive and directors; executive andnonexecutive multiple board appointmentsfor executive on directors andthepolicy time commitment required ofnon recommendations regarding the the NominationCommittee; new ChiefExecutive; leading upto theappointmentofa that shouldbesoughtincandidates Committee asamember; formally includedintheNomination nomination committee meetings, be who hadpreviously attended Report of the Audit and Risk Management Committee of the Audit Management and Risk Report Committee Membership, meetings and remuneration Main activities during 2007 Set out below is the current membership of the Audit and Risk Management Committee The Committee has discharged its (Committee) together with the year in which membership commenced. During the responsibilities during the period by period, all the members of the Committee were independent non executive directors. performing the following activities. Director Year of appointment Financial statements David Allvey, Chairman 2002 During the period, the Committee reviewed and discussed the financial David Edmonds 2005 disclosures made in the preliminary Barry Gibson 2002 results announcement, Annual Report and Accounts and Interim Statement made by the Group together with any related The Company Secretary acts as secretary announcements relating to financial management letters, letters of to the Committee. Other individuals performance; representation and reports from the attend at the request of the Committee external auditors. Significant financial • Review the major risks affecting the Chairman and during the period the reporting issues and judgments were Group and assist the Board with considered together with any significant external auditors, Chief Executive, Group reviewing the effectiveness of the accounting policies and changes Finance Director, Head of Internal Audit controls operating over the Group’s proposed to them. and the Head of Financial Planning and financial and non-financial risks; Control would usually attend meetings to Internal control and risk management report to the Committee and provide • Review the nature and scope of the The Committee has reviewed the Group’s clarification and explanations where work to be performed by the internal control and risk management appropriate. The Corporate Finance external and internal auditors, the result of that work and systems and has received reports from a Manager, Head of Compliance and Head management’s response, and their number of departments, and, where of Security have attended meetings as effectiveness; appropriate, presentations from senior requested. The Committee also meets management, on the major risks faced by with the external auditors without • Oversee the relationship with the the Group and the procedures established executive management present on a external auditors including making to identify, assess, manage, monitor and regular basis. The Committee met on six recommendations to the Board report on these risks. The Committee has occasions during the period and details of regarding their appointment or reviewed and approved the statements attendance at Committee meetings is set removal and developing a policy on internal controls on pages 26 and 27. out on page 24. regarding the provision of non-audit services to the Group; External auditors Mr Allvey has recent and relevant financial experience. He is a chartered accountant, • Meet with the executive directors The Committee has responsibility for and management, as well as a former Group Finance Director of overseeing the relationship with the privately with both the external and Barclays PLC and BAT Industries PLC and a external auditors and approves the internal auditors; and former member of the UK Accounting external auditors’ engagement letter, audit Standards Board. Mr Edmonds and Mr • Report to shareholders annually on fee and audit and client services plan Gibson are both financially literate and its role and responsibilities. (including the planned levels of have significant general business materiality). The external auditors attend The Chairman of the Audit and Risk experience of executive roles in both each committee meeting and at least Management Committee reports to the private and public organisations and annually meet with the Committee Board on the outcome of meetings. details of each director’s significant without executive management. The current and prior appointments are set A formalised whistle-blowing policy and Chairman of the Committee also meets out on page 13. procedure for staff to raise issues privately with the external auditors. regarding possible improprieties in Letters of representation are reviewed

matters of financial reporting or other prior to signature by executive William PLC Hill & Accounts 2007 Annual Report Role of the Audit and Risk management. Management Committee matters has been established and was reviewed during the year. It is the During the period, the Committee A full copy of the terms of reference for responsibility of the Committee to received regular reports from the external the Committee can be obtained via the monitor its effectiveness and any auditors including a formal written report website www.williamhillplc.co.uk or by notifications made. dealing with the audit objectives; the request to the Company Secretary. The auditors’ qualifications, expertise and Committee’s principal responsibilities are The Committee has access to the services resources; effectiveness of the audit to: of the Internal Audit and Company Secretarial departments and is authorised process; procedures and policies for • Review and advise the Board on the to obtain independent professional advice maintaining independence; and Group’s interim and annual financial if it considers it necessary. compliance with the ethical standards statements, its accounting policies issued by the Auditing Practices Board. and to monitor the integrity of the The external auditors’ management letter financial statements and is reviewed, as is management’s response

29 30 William Hill PLC Annual Report & Accounts 2007 Report of the Audit and Risk Management Committee procedures to monitor andreview the Committee hasestablishedanumberof agreed terms of reference andthe under acts The Internal Audit department letter. management auditors’ and theexternal identifiedinthesereports against actions and theCommittee monitors progress the Committee eachaudit membersafter the period. are Audit circulated reports to monitors progress againsttheplanduring and the Internal Audit department plan andinternal auditmethodologyfor The Committee approves theannualaudit Internal Audit Meeting. AnnualGeneral at theforthcoming recommended thattheybere-appointed andindependence, andhas objectivity procedures inplace to maintaintheir during theyear, andthepolicies auditors oftheexternal performance The Committee issatisfiedwiththe andindependence. objectivity of safeguarding auditors’ theexternal withtheaim non-auditservices undertake auditors shouldbeengagedtoexternal followed whenconsidering whether alsosetsoutthecriteria to be policy day work accountancy for theGroup. The are excluded any from day-to- performing scheduled meeting. The auditors external are to theCommittee reported atitsnext provided byauditorsservices theexternal meeting.ratified atthenext Allnon-audit Committee Chairmanandsubsequently frame, approval issoughtfrom the scheduled withinanappropriate time £25,000. Where nocommittee meetingis auditors involving fees inexcess of by theexternal work to beundertaken The Committee approves any non-audit provided by auditors.services theexternal onnon-audit auditors andthepolicy of former employees oftheexternal regarding theemployment by theGroup reviewed theGroup’s written policy During theperiod, theCommittee Committee. and subsequentapproval by the Chairman andtheGroup Finance Director following withtheCommittee interviews wasappointed new auditpartner accordance withthelatest guidance. The wasrotated offtheauditin audit partner wasmadeduring2004whenthe partner andachangein audit audit partners the ethicalguidance regarding rotation of to issuesraised. The Committee monitors matters. related legalandcorporate governance andriskmanagement reporting Committee ondevelopments infinancial Regular updates are provided to the A fullreview oftheriskprofile and • theCompany’s Reviewing policies • Identifyingthatalltherelevant • The ofaccounting introduction and • were asfollows: addressed byactivities theCommittee During theperiodothersignificant activities Other executive management. with theCommittee Chairmanwithout Head ofInternal Audit meetsregularly is accountable to theCommittee. The the Board andCommittee Chairmenand Head ofInternal Audit access hasdirect to is theresponsibility oftheCommittee. The and removal oftheHeadInternal Audit itsfunctions. perform The appointment and employees asrequired to enableitto group documentation,premises, functions hasunrestricted access to all department annual basis. The Internal Audit onan the Internal Audit Department Committee reviews theeffectiveness of hasto complete itsremit.department The assesses annuallytheresources the Internal Auditing. The Committee also Standards for theProfessional Practice of review ofInternal Auditors’ oftheInstitute feedback from seniormanagementanda questionnaire prepared by Internal Audit, using guidance from aself-assessment Internal Audit department’s effectiveness approved. of thesewere updated and Company andboth wasundertaken risk managementprofile ofthe appointment ofkeysuppliers;and and procedures relating to the Act; Gambling with therulesandregulations ofthe the Company would becompliant systems were inplace to ensure that financial statements; changesaffecting the2007 reporting Corporate Responsibility Report William Hill PLC Annual Report & Accounts 2007 31 To ensure that gambling is conducted that gambling ensure To in a fair and open way; and vulnerable persons from being vulnerable persons from gambling. by harmed or exploited Reporting Officer takes (MLRO) suspicious activity for responsibility reports the Serious made to Crime Agency and its Organised jurisdictions in equivalent in offshore and respect of the prevention detection of money laundering and our obligations under the Proceeds December of Crime Act 2002. From 2007 the MLRO will also assume reports for made under responsibility the Money Laundering Regulations 2007; obligations in respect of money laundering reporting aware and are for in place of the procedures suspected incidents escalation of any the MLRO; to the for procedures to adhere handling of cash and cash equivalents; scheme in its own Crimestoppers both us to has allowed This right. more the scheme promote and use it in encouraging effectively in information provide the public to committed offences to relation against both staff and property. now leaflets are Crimestopper in everyavailable LBO; • • and other children protect To was heavily During 2007, the Group with the in consultation involved and the DCMS Gambling Commission associations both directly and via its trade the the ABB and the RGA. Additionally, and policies relevant all reviewed Group in the light of the new procedures in the trained All staff were regulations. of content the levels new requirements, their to and detail being tailored individual roles. Crime and disorder compliance to is committed Group The gambling from prevent to with regulation being of crime or disorder, being a source or being with crime or disorder, associated following The supportused to crime. been taken during 2007 to actions have support this commitment: • Money Laundering A designated • training on their staff receive All • to also train our employees We • a member of the is now Group The source of crime or disorder, being of crime or disorder, source or disorder with crime or associated supportbeing used to crime; procedures in preparation for the for in preparation procedures implementation of the Gambling Act 2005; in trained which 100% of staff were under their specific responsibilities the Act and Gambling Commission and conditions; codes staff offering Programme Assistance line telephone a 24 hour confidential legal and with help on personal, issues; related work survey providing was implemented an opportunity be to views for the on working for expressed Company; and up and agreed; drawn ban on smoking in all Government LBOs. Retail and Remote businesses. An action businesses. Retail and Remote 2004 carried out since plan detailing work on an ongoing and updated and revised each of the by basis has been considered with progress meetings in 2007 together Working The on outstanding actions. operational acts for Group as a forum issues and discuss CR management to working group by reportsprovided are their arising from members on CR issues particular of responsibility. areas Gambling Act 2005 on Gambling force The Act came into 1 September 2007 at the same time as assumed its the Gambling Commission regulatory body for as the central full role work to continues Group The gambling. in furtheringclosely with the Commission objectives under the licensing of the three Act, namely: • being a gambling from prevent To CR highlights 2007 CR highlights 2007 further the Group saw enhance year The including issues, on core its procedures gambling and staff training responsible the for in readiness and development of the Gambling Act commencement effect on 1 2005 which came into 2007. September include: 2007 highlights • policies and of all relevant A review • under A programme staff training • introductionEmployee of an The • wide employee group A confidential • policy ethical purchasing updated An • implementation of the successful The

regulations and codes of conduct and codes regulations gambling; responsible to relating underage gambling and protection of of the vulnerable; prevention to related crime and disorder gambling; and product integrity issues; to and motivation of employees the widest possible range of retain staff;talented with in accordance workplace and legislation; relevant service. of customer level The Board is committed to taking to to steps committed is Board The its practices continuously in the improve and to area Responsibility (CR) Corporate its corporate embedding CR issues into It framework. and operating governance on directing its focus aim by this achieves issues: material the following • with existing laws, Compliance • development ongoing training, The • and healthy of a safe Provision • beating a competition Providing Mr Edmonds, director, A non-executive and its Committee chairs the CR Board Messrs Spearing Scott, other members are & Counsel plus the General Topping and Committee This Secretary. Company of CR issues and there a range monitors meetings a year. at least four are the reports to regularly CR Committee The that ensure members and all Board Board and of presentation a process through been they have discussion with staff, gained an and have briefed properly understanding of the CR appropriate issues affecting the Group. the CR by is assisted Committee The which also met on four Group, Working Working CR The during 2007. occasions & Counsel the General by is chaired Group Secretary the and comprises Company strategy functional corporate heads for human resources, and development, security service, and customer property, the from with representatives together Board commitment Board

This is the Company’s fifth Corporate is the Company’s This Responsibility Report; the first was in Report for contained and Accounts takes its responsibilities Group The 2003. stakeholders seriously and implements to the that meet policies and procedures expectationslegitimate of shareholders, wider and the staff and customers community. Corporate Responsibility ReportCorporate 32 William Hill PLC Annual Report & Accounts 2007 Corporate Responsibility Report regulators to inGibraltar ensure andMalta Commission intheUKandouroffshore We are closelywiththeGambling working gambling. from beingharmedorexploited by protecting children andthevulnerable organisation. We are committed to andwithinourown and gamingindustry responsible attitudewithinthebetting The Group encourages asocially cease to befun. there canbeproblems andgamblingcan leisure activity, smallnumber for avery most customers, gamblingisanenjoyable the internet andby telephone. Whilst, for namely ourLBOs, onracetracks, through a range ofenvironments withtheGroup, thatcanbeexperienced in entertainment isanexcitingGambling form of Responsible andunderage gambling We provide theGambling • The Group’s Department Security • the Act. 6Part 3of named underSchedule authorities todirectly thosesporting on any suspicioustransactions issues andalsoprovides information operates withtheABBonintegrity order to void abet. The Group co- by theCommissionthe making ofan information may we leadto suspect and withanycodes ofpractice Commission’s licence conditions and 2005orabreach Act Gambling ofthe commission ofanoffence underthe may relatesuspect to the Commission withinformation we police crimeprevention officers; and licensing officerslocal authority and environmental healthdepartments, number oflocalauthority appropriate. We liaisecloselywitha where risk, minimise further andsteps takento Department are reassessed by theSecurity incident occurring, affected shops locks to staffareas. theevent ofan In andmagneticof electronic door systems andfitting television (CCTV) improved digital closedcircuit in vulnerableshops, installationof screensinclude thefittingofsecurity perceived Suchmeasures risk. measures are introduced to meetthe Appropriate crimeprevention violence incidents. intheworkplace to robberiesvulnerability and considering theirpotential assessment process for allourLBOs, anongoingrisk undertakes We provide for afacility individuals • We useclearnotices inourLBOsand • Information onthetools available to • We are amajorcontributor to the • thiscommitment: support haveactions beentakenduring2007to gambling isparamount. The following gambling andto encourage responsible organisation to dealwithproblem appropriate procedures withinour Our commitment to implementing problem. helpforpractical anyone withagambling centre for information, advice and dialogue withGamCare, thenational stakeholder groups andhave anactive listening to theviews ofrelevant gambling. We are alsocommitted to standards inresponsible industry that we continue to adhere to high and telephone andinternet accounts identified licensed bettingoffices to themselves self-exclude from age of18; that acustomer may beunderthe followed intheevent that we believe have establishedprocedures to be ofthebusiness under 18s. Allparts methods thatmay beavailable to telephone accounts usingdeposit customers openingnewinternet or to verify theagesof agency external available, overseas, we usean theUKand,In where publicly who appearsto themto beunder21. seek proof ofagefrom any customer approach whichrequires ourstaffto we have adopted a 21’ ‘Think ourLBOsandonracetracksis 18.In the minimumageto usethefacilities on gamblingwebsites statingthat for help; asking and friendswhomay approach us information to customers’relatives department. Weservices alsoprovide websites andviaourcustomer racetracks, viaouroperational leaflets ondisplay inourLBOsorat gambling isavailable through customers to monitor orcontrol their education; ways and ofproviding thatsupport researchand to conduct into thebest persons abouttheriskofgambling dependents, to educate vulnerable with theirgamblingand to personswhoexperience problems RIGTaimsto provide support (RIGT). inGambling Responsibility Trust • The Group takes particular care The not Group takesparticular • Although there isnoonesetof • We provide for afacility telephone • 2007thenumberof During • requirements; briefed onourresponsible gambling agencieswe useareadvertising fully website. aware’information The andtheRIGT’sadvertising ‘gamble promote socially responsible designed code to ofpractice industry codes. addition,we In adhere to an PracticeAdvertising andBroadcast andtheCommitteepractice of licence conditions andcodes of Commission’sof theGambling objectives, thespecificrequirements Commission’sGambling licensing carefully considered in lightofthe is the ageof18.Allouradvertising atpeopleunder to target advertising customer’s behalf; take thosedecisionsonthe their level ofgamblingbutdoesnot to makeinformed decisionsabout information required to enablethem provides customers withthe gambling behaviour. The Group tools available to control their and withdetailedinformation onthe detailsofagamblingcharity contact customer willbeprovided with doestakeplaceWhen the interaction witha customer.initiate interaction whether ornotitisappropriate to any concerns andto consider have procedures inplace to escalate may indicate problem gambling. We aware ofcustomers whosebehaviour to usetheirexperience andto be the Group encourages itsemployees customers withgamblingproblems, behaviours definitively identifying period; increased a24-hour after ‘cooling off’ set, adepositlimitcanonlybe with usinany 24-hourperiod. Once amounts theyare ableto deposit and internet customers to limitthe Remote was1,826(2006–1,010); was 1,563(2006–401)andin from theGroup‘s inRetail services customers whochoseto self-exclude resume useofourgamblingfacilities; before theywillbepermitted to 24-hour further ‘cooling off’period period are required to complete a the endoftheirchosenself-exclusion wish to resume businesswithusat and upto 5years. Customers who for aperiodofnolessthan6months Corporate Responsibility Report William Hill PLC Annual Report & Accounts 2007 33 area operations manager, meet six operations manager, area one and comprise times per year servicecleaner or one customer manager or assistant and one shop deputy manager per district; operations controller, the regional and per year times meet three service one customer comprise one shop assistant or cleaner and manager or deputy per manager and area; meets the Retail Operations Director, and includes times per year three serviceone customer assistant or cleaner and one shop manager or the deputy manager per region, the head of retail HR director, Group HR along with an operations operations area an controller, manager and a district operations manager. • the by chaired councils, staff Area • by chaired staff councils, Regional • by chaired A national staff council, receive representatives All staff council six allowed and are specialist training ‘consultation’ the talk to to a year days for prepare and to people they represent in a staff council is also There meetings. centre the major administrative for place and telebetting the internet, incorporating was This employers. administrative in 2007 as another outcome relaunched engagement survey the employee from and staff committee, the former replacing that which has to a similar format follows in Retail. successful proved Sharesave the Group’s On an annual basis since with flotation in 2002 employees been minimum service have of one year participateable to Sharesave in the Group 2007 scheme attracted1,376 The scheme. staff savers. Health and safety safety health and of the Group’s A copy policy at is available A Health and www.williamhillplc.co.uk. to meets regularly Committee Safety with applicable health compliance review to and regulation, legislation and safety with best practice and to date keep up to with and maintain compliance review The procedures. health and safety includes senior managers Committee human resources, the Group’s from property secretarial and company security, departments, with together individuals throughout their career to career their individuals throughout maintain and to enable employees deal of performance, standards improve the work changes to with any effectively abilities their develop to and environment Training their full potential. and realise implementation the to specifically related by of the Gambling Act was received 100% of staff during 2007. performanceThe of the management via the Group population is reviewed wide performance management process. specific individual identifies process This needs and provides development performance of exceptional evidence pay standard above when considering awards. seen as those who are In addition, for into succeed to the potential having senior management and leadership roles performance the in the future, the basis of forms management process If Board. Talent the the application to in their application these successful wide the Group into entered people are the talent pool provides The talent pool. succession the internal individuals for process. of service length the across average The (2006 – and 4 months is 5 years Group LBO managers average whilst 6 years) length of service and 1 month is 13 years and 9 months). (2006 – 12 years Communication value on considerable places Group The and is of its employees the involvement effective providing to committed which may on matters communication the on generally, and more staff, affect and performancedevelopment of the Group. participatedIn 2007, employees in a wide engagement surveyGroup in which their views express able to they were Based on Hill. William about working for put greater have we the feedback emphasis on our two-way communication clarity and greater and provided processes the business goal understanding around all employees. for has been Will2Win, magazine, Group The on a bi- all employees to circulated The the period. monthly basis throughout and is staff feedback magazine invites readership a broad appeal to to designed in operates system staff council The base. all to a voice give business to the retail as follows: the particular are features staff, contracts with any of employment of 18; and individual under the age them an overall training giving to of our commitment awareness and the detailed social responsibility knowledge appropriate procedural will We their specific business role. to best practice monitor in to continue gambling as of responsible the area our will review and it develops regular on a policies and procedures from basis in the light of guidance gambling charities and regulators, practicalour own experience. The Group’s success is dependent on its success Group’s The high to and it is committed employees The practice. of employment standards individuals fairly and is rewards Group equality of providing to committed and development training opportunity, workplace. and a safe set of human resources A comprehensive including documents in place policies are (including and safety health covering management specific policies on stress and smoking), equal opportunities and flexible working, disability, harassment, the acceptance and development, training and whistle of gifts and hospitality, to communicated are These blowing. as appropriate. employees Equal opportunities equal to is committed Group The opportunities of in terms in the workplace and selection, training promotion, Relevant policies are development. and employees Group to communicated clear lines of responsibility are there effectiveness, their monitoring regarding to implementation and communication staff. is 57% workforce current Group’s The (2006 – 59%) and 43% male (2006 female – 41%). development and Training in investing to is committed Group The of all its and development the training initial provides Group The employees. induction at the commencement training on (including training of employment gambling) and underage responsible specific by necessary, supported, where Further their job. skills to relevant training to is provided and development training Employees • into does not enter Group The • receive employees the Group All 34 William Hill PLC Annual Report & Accounts 2007 Corporate Responsibility Report environment, and are largely focussed on: withthe and itsmainrisksinteractions theGroup’sreflect businessoperations, work. The Group’s environmental practices resources usedby staffintheirday-to-day buildings theGroup operates andthe ontheenvironmentimpact isthrough the organisation, theGroup’sservice main www.williamhillplc.co.uk. As aretail and isavailable at policy A copy oftheGroup’s environmental Environment We are committed to diversity inthe • We are committed to safe and • We therightof willrespect • We willoffer wagesandbenefits • Working hourswillcomply with • We willnotuseforced orcompulsory • We willnotemploy individualswho • workforce: our approach asitrelates to our setsout andthispolicy of HumanRights) the principlesinUniversal Declaration (derivedin theUNGlobalCompact from We thebasicprinciplesdescribed support andrespect. individuals withdignity individual’s humanrightsandtreats its operations inaway, whichrespects The Group iscommitted to undertaking Policy Human Rights and Safety Committee. andtheHealth and Safety Co-ordinators through asystem ofsafety audits, Health and understandingofsafety instructions and theGroup monitors theapplication basis. assessmentsare Risk undertaken andonanongoing oftheirinduction part training onhealthandsafety issuesas Staff are provided withinformation and safety consultant advisestheCommittee. healthand management. Anexternal representatives ofoperational or victimisation intheworkplace. or victimisation tolerate harassment,discrimination environmentworking andwillnot employees; and healthy conditions working for our and collective bargaining; individuals to freedom ofassociation standards; laws andindustry which are consistent withrelevant relevant laws andregulations; labour; are under18years ofage; during theyear and the Group iskeento Possible solutionshave beenconsidered recycling from itsRetailestablishments. energy andcost efficientmethodof Group hasbeenunableto establishan office andregional office buildings. The are inplace attheGroup’scartridges head Facilities for recycling paperandtoner Water managementsystems for toilet • More energy efficient(inverter) air • fasciascontinue to Newstyle be • aircleanersare Electrostatic installed • andfascialighting Air-conditioning • The Group isfullycompliant withall • lightfittingsare frequency High • hasbeentaken: action Group’s LBOestate andthefollowing withinthe issues andopportunities responsibility for identifying primary The Group’s takes Department Property Series. Index oftheFTSE4 Good The Group ispart awareness Raising ofenvironmental • useofenergy Efficient andwater and • waste by Minimising thepromotion • Compliance withenvironmental laws • estate isfitted withwater meters. oftheLBO increasing proportion reduce water consumption andan facilities continue to be rolled outto replacements are required; and andwhen on newprojects conditioning unitsare beinginstalled consumption; which willreduce electricity rolled outasLBOsare upgraded in over 80%oftheGroup’s LBO’s; ensure efficientuseofenergy; are controlled by timeclocksto was introduced in2007; Directive which Equipment (WEEE) Waste, andElectronic Electrical waste and complies withthenew regarding thedisposalofhazardous current legislative guidelines requiring disposal; reducing thenumberoflamps refurbishment thereby projects specified inallnewdevelopment and issues withintheGroup. consumption inthisarea; and investigating ways ofreducing where thisispracticable; materials asopposedto disposal, of andre-use of recycling practices and regulations; Ensure thatallemployment laws • ina manner andact Support • companies andthoseoftheirsuppliers: specified standards, bothwithintheirown improvement towards thefollowing agree to commit to continuous suppliersareMajor andwill beaskedto supply chain. environmental standards withintheir ensures compliance withgoodlabourand arepractices inamannerthat conducted responsibility to ensure itspurchasing The Group recognises thatithasa Suppliers Act asaminimum. Act Discrimination status withtheDisability application reaches compliance ‘single A’ is beingtakento ensure thatthefinal new platform for Care itsonlineservices. The Group iscurrently implementinga Customer Helpline. can beobtainedfrom theGroup telephone. Detailsofalltheseservices accessed ontheinternet orviathe offeredservices intheLBOs canbe are fitted, where appropriate. addition, In loopsforinduction thehard ofhearing ramps, stairlifts,disabledtoilets and Group’s LBOs, andacombination of whenopeningandrefittingpractice the accordance withappropriate codes of issues are takeninto account in access to theGroup’s Accessibility services. Customers withdisabilitieshave arightof Access toservices LBO estate. a newgreen energy supplierfor theentire andhasnow takenout reusable electricity obtained quotationsfor green and future policy. During2007,theGroup the year. datawillinform Suchbase-line throughout theUKwascarriedoutduring sample ofrepresentative Group premises meter readings werequarterly takenata plus premises. Anexercise by which consumption datacovering allits2000 difficult to establishaccurate utility Historically, theGroup have found it and received itsrecommendations. Carbon Trust onanenvironmental review During 2007theGroup worked withthe progress inthisarea in2008. adhered to; ofoperation are within thecountry UN DeclarationofHumanRights; consistent withtheprinciplesin Corporate Responsibility Report William Hill PLC Annual Report & Accounts 2007 35 gambling; undertaking into research gambling; and providing problem and help to advice information, at risk or are those who are experiencing difficulties with their gambling; and individuals in horse and greyhound racing. by seekingby support to in the communities through operates which the Group other relevant charitable donations and payments. Levies supports Group The via the horse racing statutory via racing levy and greyhound the voluntary the British donation to sums The (BGRF). RacingGreyhound Fund £26,590,000 and 2007 were for payable funds are These £3,297,000 respectively. a wide bodies for the respective used by variety of purposes including animal issues. welfare A budget has been independently stadia to the greyhound established for welfare assist with greyhound be used to funds an establishment Group The issues. be dogs to 25 which will enable up to months with the three up to housed for of permanently re-homingintention the end of its opening at them. Since been have 2005, a number of greyhounds re-homed this facilitysuccessfully by and as pets greyhounds the benefits of retired at the Group’s actively promoted are stadia. of public the depth recognised Group The coverage press surrounding concern no of greyhounds the fate regarding Every trainer racing. for longer required is required track a the Group to affiliated listing dogs a weekly return complete to dogs and injured racing, for available left the trainer’s those dogs who have full details must provide Trainers kennels. of a dog whom care individual to of any has been passed. Charitable donations charitable donations are Group’s The involved on organisations mainly focussed the to relevance of greatest in areas has adopted Board The business. Group’s a charitable donations policythat stating efforts will of the Group’s the major focus in: be in supporting bodies involved • to approach a responsible Promoting • welfare; and racehorse Greyhound • Support disadvantaged to 1 September 2007. The Group endeavours Group The 2007. 1 September a fair, in all betting disputes resolve to and equitable manner. consistent be unable to these are if However, satisfaction the the customer’s to resolved to the matter refer is entitled to customer the Independent Betting Adjudication to has agreed Group The Service (IBAS). make. ruling they any abide by – 274) disputes During 2007, 274 (2006 IBAS. In to – 2%) 4% (2006 referred were of the in favour of cases IBAS found customer. 2007 gambling September From transactions became legally enforceable contracts and subject relevant to contract legislation. consumer that anticipates the Group Additionally, contact the may some customers in respect of Gambling Commission review During 2007 a thorough disputes. was and conditions terms of the Group’s undertaken. It is hoped that the majority be to will continue of disputes IBAS, the on by adjudicated acknowledged industry expert. integrity Product has a number of products Group The is of an event the outcome where number a random by determined administered (RNG). RNGs are generator parties externaleither by third the or by has rigorous Group The itself. Group party ensure to internal/third procedures RNGs is of its own that the randomness fair and are certified, game outcomes from free games are correct, payouts defects and function specifications and to and do not secure that the games are or the either the player compromise with work to continues Group The Group. suppliers with the objective of ensuring of fairness testing. they adopt a high level Privacy protect to in place has systems Group The by the privacy provided of information with the complies Group The customers. Act 1998 and the Data Data Protection set out in that Act in Principles Protection of personal the collection and processing privacy of the Group’s A copy information. policy at www.willhill.com. is available Supporting sports-related and other bodies being a to is committed Group The and citizen corporate responsible its wider social responsibility recognises supply chain that is below the local supply chain that is below legal minimum age; local industry benchmarks and national minimum requirements; equal opportunity in employment; and local health and safety in the procedures and regulations of operation; countries and regulations; laws environmental and friendly working environmentally practices. Customer service Customer of high standards to A commitment servicecustomer the fair and open to and conduct is key of its gambling operations continued Group’s The the Group. to depends on its customers. success service customer Dedicated departments the Retail and the both for in place are customer channels and regular Remote satisfaction surveys undertaken. are Service considered are complaints monitored seriously and consistent, the Group. across in place are procedures During 2007 the Retail business continued Beating Servicewith its Competition (CBS) a ensure which is to the aim of initiative, customers. for in-shop experience positive CBS has quickly been established as an essential element of the Retail business a that it will play believes and the Group vital part in the business’ success. future District managers review operations on a performance against CBS standards action plans to monthly basis and agree an external For tackle issues. any of customer viewpoint on the levels service the Group in LBOs, experienced shopper programme uses a mystery an international Retail Eyes, by provided service. specialising in customer company which betting rules, Our comprehensive under and conditions detail the terms which all transactions with the placed reviewed were accepted, are Group with they comply ensure during 2007 to Gambling contract law. consumer on contracts became legally enforceable Customers and communities Customers • within the employed are No children • wages and benefits meet Employee’s • policy of a comprehensive Operate • with all national compliance Ensure • with compliance Ensure • of the development Encourage 36 William Hill PLC Annual Report & Accounts 2007 Corporate Responsibility Report Working withtheGambling • Update corporate website ona • thecurrent Maintain positionoffleet • Circulating agreen initiative to all • Enhance recycling possibilities; • concentrate onthefollowing: ongoing andinaddition,theGroup will progress thoseinitiatives thatare already 2008,theGroup intendsIn to continue to for 2008 CR actions during theperiod. atacost of£15,000 the LabourParty achievement organised byBritish sporting Group attended adinnerto celebrate executivesdonations. Certain ofthe The Group’s isnotto makepolitical policy policy. donations againsttheBoard’s agreed basis, requestsa quarterly for charitable Donations Committee, whichreviews, on The Group hasestablishedaCharitable inGambling the Responsibility Trust. ofwhichwaspaidto largest proportion charitable donationsof£581,000the During theperiodGroup made referreddonations policy to above. cases donationsmay notfallwithinthe andinsuch in theirfundraising efforts organisations withwhomitdoesbusiness occasion, theGroup alsosupports running andparachute jumps. On staff endeavours includingmarathon £25,000 from thematching schemewith charities ofstaffmembersbenefited by projects. During2007thenominated raised by employees onlocalcharitable to match funds(upto aspecifiedlimit) of itsannualcharitabledonationsbudget efforts. The Group allocates aproportion employees through theirown fundraising wherever possible,support, to its The Group isalsocommitted to providing responsibility and integrity issues.responsibility andintegrity high standards onsocial to ensure we continue to operate to Commission andoverseas regulators regular basis;and cars withlow CO2 emissions; staff; Statement of Directors’ Responsibilities William Hill PLC Annual Report & Accounts 2007 37 AS l er, s ons, that provides relevant, reliable, comparable and comparable reliable, relevant, that provides d’s ‘Framework for the preparation and presentation of financial presentation and the preparation for ‘Framework d’s statements present fairly, for each financial year, the Group’ each financial year, for fairly, present statements Directors’Remuneration Report in statements and the financial

understandable information; and understandable information; financial position and financial understand the impact of particular on the entity’s and conditions transactions, other events performance. explained in the financial statements; and explained in the financial statements; in business. continue

The directors are responsible for preparing the Annual Report, preparing for responsible are directors The Reporting the by (IFRS) as adopted Standards Financial under International financial statements the Group prepare Regulation to with the in accordance prepared be properly to law by also required are financial statements Group The Union. European Act 1985 and ArticleCompanies Regulation. 4 of the IAS financial that IFRS 1 requires Standard International Accounting Statement of Directors’ of Statement Responsibilities Group the I by required are directors The year. each financial for financial statements prepare to the directors requires law Company accordance with applicable law and regulations. law with applicable accordance financial position, financial performance and cash flows. This requires the faithful representation of the effects of transacti of the effects the faithful representation requires This performancefinancial position, financial and cash flows. and income liabilities, assets, for criteria and recognition with the definitions in accordance and conditions other events Boar Standards International Accounting expenses set out in the statements’. In virtually all circumstances, a fair presentation will be achieved by compliance with all applicable IFRS. Howev compliance by will be achieved In a fair presentation virtually all circumstances, statements’. • enable users to insufficient to in IFRS are with the specific requirements when compliance additional disclosures Provide Company Kingdom with United Generally in accordance financial statements company the parent elected prepare to have directors The financial company parent The and applicable law). Standards Kingdom (United Accounting Practice Accounting Accepted In these financia preparing of affairs of the Company. a true and fair view of the state give to law by required are statements directors are also required to: also required are directors • select policies; and apply accounting Properly •manner in a policies, including accounting information, Present to: required are directors the statements, • Select policies and then apply them consistently; suitable accounting • and prudent; reasonable that are Make and estimates judgments • departures material subject disclosed and any to followed, been have Standards UK Accounting whether applicable State • will that the Company presume to basis unless it is inappropriate on the going concern financial statements the Prepare time the accuracy that disclose with reasonable at any records accounting keeping proper for responsible are directors The with the comply financial statements company that the parent ensure and enable them to financial position of the Company taking for reasonable and hence the Company the assets of safeguarding for also responsible are They Act 1985. Companies and detection of fraud and other irregularities. the prevention for steps 38 William Hill PLC Annual Report & Accounts 2007 Group Independent Auditors’ Report Directors’Remuneration Report to beaudited are free Report from Directors’Remuneration order to provide uswithsufficientevidence to give reasonable assurance oft thattheGroup financialstatements andthepart We ourauditso asto obtainalltheinformation plannedand performed andexplanationswhichwe in considered necessary the accounting policiesare appropriate to theGroup’s circumstances, consistently appliedandadequately disclosed. significant estimates andjudgments madeby thedirectors in oftheDirectors’Remuneration financial statements andthepart Practices Board. Anaudit includesexamination,onatest basis, ofevidence relevant to theamountsanddisclosures intheGro We ouraudit inaccordance conducted withInternational Standards onAuditing (UKandIreland) issuedby theAuditing Basis ofauditopinion isconsistent withtheGroup financialstatements.Report The accordance withtheCompanies 1985. Act We to you alsoreport whetherinouropiniontheinformation given intheDirectors’ describedashaving beenaudited hasbeenproperly prepared Report in oftheDirectors’Remuneration whether thepart statements have beenproperly prepared inaccordance 4oftheIASRegulationand withtheCompanies 1985andArticle Act We to you report ouropinionasto whethertheGroup financialstatements give atrueandfairview, whethertheGroup financia International Standards onAuditing (UKandIreland). Our responsibility isto audittheGroup financialstatements inaccordance withrelevant requirements legalandregulatory and European Unionare setoutintheStatement ofDirectors’Responsibilities. statements inaccordance withapplicablelaw andInternationalFinancial Standards (IFRS)asadopted by the Reporting andtheGroup financial Report theDirectors’Remuneration for preparing theAnnualReport, The directors’responsibilities responsibilitiesRespective ofdirectors andauditors for theopinionswe have formed. responsibility to anyone otherthantheCompany andtheCompany’s membersasabody, for or for ourauditwork, thisreport, andfor nootherpurpose. Tothem inanauditors’report permitted by thefullestextent law, we donotaccept orassume sothatwe mightstateaudit work to theCompany’s hasbeenundertaken membersthosematters we are required to state to ismadesolelyto theCompany’sThis report members, asabody, inaccordance 235oftheCompanies 1985.Our Act withsection 2008. We have separately reported on theparent company financialstatements of William PLC Hill for the53weeks ended1January thatisdescribedashaving beenaudited. Report the Directors’Remuneration financial statements have beenprepared undertheaccounting policiessetouttherein. We have alsoaudited theinformation in the consolidated cashflow statement, thestatement ofGroup consolidated income statement, theconsolida We have audited theGroup financialstatements of William PLC Hill 2008whichcomprise for the the53weeks ended1January To themembersof William PLC Hill Report Auditors’ Group Independent The Group financialstatements give atrueandfairview, inaccordance withIFRSasadopted by theEuropean Union,ofthe • ouropinion: In Opinion to beaudited. Report oftheDirectors’Remuneration statements andthepart or error. forming In our opinion we alsoevaluated theov informationany outsidetheAnnualReport. further apparent misstatements ormaterial inconsistencies withtheGr consistent withtheaudited Group financialstatements. We consider ifwe theimplicationsfor become ourreport aware ofany We read andconsider asdescribedinthecontents whetheritis theotherinformation section contained intheAnnualReport opinion ontheeffectiveness oftheGroup’s corporate governance procedures oritsriskandcontrol procedures. not. We are notrequired to consider whethertheBoard’s statements oninternal control cover allrisksandcontrols, orform a 2006 Combined Code specifiedfor ourreview by theListingRulesofFinancial Authority, Services ifitdoes andwe report We review whethertheStatement onCorporate Governance theCompany’s reflects compliance withthenineprovisions ofthe audit, orifinformation specifiedby law regarding director’s isnotdisclosed. remuneration andothertransactions to additionwe you report In if, inouropinion,we have notreceived alltheinformation andexplanationswe require for our Directors’Report. information presented intheOperating andFinancial Reviewthatiscross referred from ofthe thebusinessreview section state oftheGroup’s 2008and ofitsprofit for the53weeks affairsasat1January thenended; ted statement ofrecognised income andexpense, theconsolidated balance sheet, erall adequacy ofthepresentation ofinformationerall adequacy intheGroup financi material misstatement, whethercausedby fraudorotherirregularity information given in the Directors’Report includesthatspecific information given intheDirectors’Report the preparation oftheGroup financialstatements, andofwhether accounting policiesandtherelated notes 1to 36. These Group oup financialstatements. Ourresponsibilities to donotextend Report to alsoincludesanassessment ofthe beaudited. It Report n up he al l Group Independent Auditors’ Report William Hill PLC Annual Report & Accounts 2007 39 th ffairs IAS Regulation; Act 1985; and with the Companies As explained in the statement of accounting policies, the Group in addition to complying with its legal obligation to comply wi comply to with its legal obligation complying in addition to the Group policies, of accounting in the statement explained As Separate opinion in relation to IFRS to Separate opinion in relation •Act and Article 1985 with the Companies 4 of the in accordance prepared been properly have financial statements Group The • part The of the Directors’Remuneration in accordance Report prepared has been properly been audited described as having • in the Directors’Report given information The statements. financial Group with the is consistent Standards the International Accounting with the IFRS as issued by has also complied Union, the European by IFRS as adopted Board. a of the Group’s with IFRS, of the state accordance in a true and fair view, give financial statements In the Group our opinion then ended. as at 1 January the 53 weeks for 2008 and of its profit LLP Touche Deloitte & Auditors and Registered Chartered Accountants London KingdomUnited 2008 27 February 40 William Hill PLC Annual Report & Accounts 2007 Consolidated Income Statement for the 53 weeks ended 1 January 2008 for the53weeks ended1January andExpense Income Consolidated Statement ofRecognised 2008 for the53weeks ended1January Consolidated Statement Income Profit before tax oa eonsdicm n xes o h eid159.8 29 15 35 Total recognised income andexpense for theperiod Profit for theperiod Change inassociate netassetsdueto share repurchase gainondefinedbenefitpensionscheme Actuarial (Loss)/gain oncashflow hedges 3,9 8 Diluted 11 4 Profit for theperiod Tax Finance costs Operating profit ventures Gross profit Cost ofsales Revenue Amounts wagered Continuing Operations ai 11 Basic Earnings pershare (pence operating income Other a niestkndrcl oeut 23 Tax onitems to takendirectly equity e noercgie ietyi qiy10.0 29 Transferred to income statement oncashflow hedges Net income recognised inequity directly 7 Investment income Exceptional profit onsaleand xetoa prtn xes 3 Share ofresults ofassociates andjoint Exceptional operating expense operating expenses Other esbc fpoete 3 leaseback ofproperties ) Notes 2,5 1,2 30 2 2 2 xetoa xetoa tm 2008 Exceptional items exceptional 4723–14,792.3 – 14,792.3 142 (174.2) – (174.2) 406 (490.6) – (490.6) eoe1January Before 2. 1.)209.2 (14.2) 223.4 6. 97 157.4 (9.7) 167.1 766.2 – 766.2 8. 2.)265.8 (20.9) 940.4 286.7 – 940.4 tm nt )Total (note 3) items 5.)45(51.8) (87.6) 4.5 – (56.3) (87.6) 04–10.4 – 10.4 43–24.3 – 24.3 . 0.7 – 0.7 m£ £m £m £m . 6.7 6.7 – 2.)(20.9) (20.9) – Notes 53 weeks ended 53 weeks ended 1 January 157.4 2008 12.9 44.3 44.7 (1.6) (1.3) (7.6) £m – 52 weeks ended 52 weeks ended 26 December 26 December 13,235.9 (160.3) (451.6) 235.4 187.3 166.8 733.9 166.8 292.2 894.2 2006 (68.6) (69.8) 2006 14.3 16.7 44.9 19.8 45.5 13.0 (9.5) (1.7) £m £m 3.6 0.7 6.3 – – Consolidated Balance Sheet William Hill PLC Annual Report & Accounts 2007 41 9.4 6.0 5.3 8.5 0.5 £m (0.9) (5.6) 98.7 36.2 30.4 14.4 2006 (46.9) (26.1) (99.4) (66.3) (25.1) 311.3 190.5 190.5 207.0 144.0 (169.3) (108.6) (181.4) 1,342.7 1,707.5 1,563.5 (1,335.6) 26 December 26 December ) (1,517.0) ) (1,141.2) – £m 3.2 6.8 1.9 5.2 0.6 (1.2) (3.3) (4.7) 69.4 35.4 12.7 32.3 2008 (34.4) (26.1) (90.8) (51.8) 248.2 233.1 233.1 214.7 107.5 (165.7) (148.5) 1,365.9 1,702.7 1,595.2 (1,469.6 (1,152.1 (1,321.1) 1 January Notes

The financial statements were approved by the Board of directors and authorised for issue on 27 February 2008 and are issue on 27 February for and authorised of directors the Board by approved were financial statements The on its behalf by:signed Hedging and translation reserves and translation Hedging 29 Own held shares 28 Merger reserveMerger 27 Capital redemption reserve redemption Capital 26 Share premium account premium Share 25 Cash and cash equivalentsCash 17 Equity capital share Called-up 24 Interest in associates and joint ventures in associates Interest 15 Borrowings 19 Trade and other receivablesTrade 17 Retirement benefit obligationsRetirement 35 RJ ToppingDirector SP Lane Director Retained earnings equity Total 30 Total liabilities Total Net assets Deferred tax liabilitiesDeferred 23 Derivative financial instrumentsDerivative 22 Derivative financial instrumentsDerivative assets Total 22 Deferred tax asset Deferred 23 Non-current assets assetsIntangible 12 Property, plant and equipment plant Property, liabilities Current and other payablesTrade 13 18 Current tax liabilities Current Current assets Current Inventories 16 Non-current liabilities 19 Borrowings

as at 1 January 2008 Consolidated Balance Sheet Balance Consolidated 42 William Hill PLC Annual Report & Accounts 2007 Consolidated Cash Flow Statement for the 53 weeks ended 1 January 2008 for the53weeks ended1January Consolidated Cash Flow Statement New bankloansraised Repayments ofborrowings SAYE share option redemptions custo fsbiire 31 Acquisition ofsubsidiaries Interest received ahadcs qiaet tedo eid69.4 (112.5) 10 (66.4) Cash andcashequivalents at endofperiod ofperiod Cash andcashequivalentsatstart Net (decrease)/increase incashandequivalentstheperiod Net cashusedinfinancingactivities Collar premiums paid issuecosts New debtfacility Dividends paid Purchase ofown shares Financing activities Net cashusedininvesting activities Investment injointventures Dividend from associate Investing activities Net cashfrom operating activities Expenditure oncomputer software Purchases ofbettinglicences Proceeds ondisposalofproperty, plantandequipment New finance leases Purchases ofproperty, plantandequipment Proceeds onexceptional saleoffreehold properties Proceeds ondisposalofshare inassociate Notes 32 53 weeks ended 1 January 149.6 (25.2) (29.3) (78.5) (47.9) (15.8) (42.8) 2008 11.6 98.7 (0.2) (8.2) (5.3) 9.7 4.4 2.0 5.7 9.8 1.8 £m – – – 52 weeks ended 26 December (178.4) (125.0) (123.4) 250.0 204.6 (70.9) (10.8) (59.1) (55.2) 2006 98.7 22.1 76.6 (1.9) (2.2) £m 1.0 2.9 2.1 5.9 – – – – – – Statement of Group Accounting Policies William Hill PLC Annual Report & Accounts 2007 43 t roup are t on trol, s e of that is the currency primary of the environment economic terpretations in future periods will have no material impac no material periods will have in future terpretations the following Standards and Interpretations, which have not which have and Interpretations, Standards the following ements of subsidiaries to bring the accounting policies used into policies bring the accounting ements of subsidiaries to tions, balances, income and expenses are eliminated on consolidation. eliminated and expenses are income balances, tions,

An associate is an entity over which the Group is in a position to exercise significant influence, but not control or joint con or but not control influence, significant exercise is in a position to which the Group is an entityAn associate over participationthrough in the financial and operating policy of the investee. decisions the G by basis and which is jointly controlled on a long-term holds an interest is an entity in which the Group A joint venture under a contractual agreement. venturers and one or more Investment in associates and joint ventures and joint in associates Investment line with those used by the Group. All intra-Group transac the Group. line with those used by Basis of consolidation (its the Company by entities controlled and of the Company the financial statements incorporate financial statements Group The the financial and govern to has the power the Company where 1 January is achieved subsidiaries) made up to 2008. Control its activities. entity obtain benefits from so as to operating policies of an investee the from statement income in the consolidated included are or disposed of during the year of subsidiaries acquired results The as appropriate. of disposal, date the effective or up to of acquisition date effective the financial stat made to adjustments are necessary, Where The Group financial statements have been prepared in accordance with International Financial Reporting Standards (IFRS). The Reporting (IFRS). Standards with International Financial in accordance been prepared have financial statements Group The the therefore Union and the European by with IFRS adopted in accordance also been prepared have financial statements Group with Article comply financial statements Group 4 of the EU IAS Regulation. of certain the revaluation financial for except basis, cost on the historical been prepared have financial statements The set out below. are policies adopted principal accounting The instruments. Basis of accounting Business combination liabilities of a subsidiary liabilities and contingent at their fair values at the dat measured the assets, On acquisition, are a is recognised the fair values of the identifiable net assets acquired over of acquisition cost of the excess Any acquisition. discoun (i.e. net assets acquired the fair values of the identifiable deficiency below of acquisition Any of the cost goodwill. and loss in the period of acquisition. profit to is credited acquisition) been applied in these Group financial statements, were in issue but not yet effective: in issue but not yet were financial statements, been applied in these Group IFRS 7IFRS 8IFRIC 11 instruments: disclosures; Financial IFRIC 12 Operating segments; Transactions; Share Treasury and IFRS 2 – Group IFRIC 13 Service Arrangements; Concession IFRIC 14 and Programmes; Loyalty Customer and their Interaction. Requirements Minimum Limit on a Defined Benefit Asset, Funding The IAS 19 – and In that the adoption of these Standards anticipate Directors The Adoption of new and revised standards and revised of new Adoption Reporting new mandatory has not been subject (IFRS). any the Group Standards Financial International to year In the current the current for effective are Reporting Committee Interpretations Financial the International by issued Interpretations Four under IAS 29; IFRIC 8 Scope of of IFRS 2; IFRIC 9 Reassessment Approach the Restatement IFRIC 7 Applying are: These period. has not adoption of these Interpretations The Reporting and Impairment. Financial and IFRIC 10 Interim Embedded Derivatives; policies. accounting changes in the Group’s any led to statements, financial of authorisation of these Group the date At William Hill PLC is a company incorporated in the United Kingdom under the Companies Act 1985. The address of the registered address The Act 1985. Kingdom in the United under the Companies incorporated is a company Hill PLC William operations and its principal activities of the Group’s nature The N22 7TP. London, 50 Station Road, House, is Greenside office for the 53 weeks ended1 January the 53 weeks for 2008 information General 4 Review on pages and Financial set out in the Operating 11. to because in pounds sterling presented are financial statements These Statement of Group Accounting Policies Accounting Group of Statement in which the Group operates. Foreign operations are included in accordance with the policies set out below. with the policies included in accordance operations are Foreign operates. in which the Group on the financial statements of the Group except for additional disclosures on capital and financial instruments when IFRS 7 on additional disclosures for except of the Group on the financial statements on or after 1 January periods commencing for effect into 2007. comes 44 William Hill PLC Annual Report & Accounts 2007 Statement of Group Accounting Policies Benefits received andreceivable asanincentive to enter lease term. Rentals payable underoperating leasesare charged to income on againstincome,directly unlesstheyare attributableto directly qualifyingassets, inwhichcasetheyare capitalised. lease obligationsoasto achieve aconstant rate ofinterest on theremaining balance oftheliability. Finance charges are ch the balance sheetasafinance leaseobligation.Lease between finance payments charges ofthe are andreduction apportioned minimum leasepayments, eachdetermined attheinception ofthelease. The corresponding to thelessorisincludedin liability Assets held underfinance leasesare recognised asassetsoftheGroup attheirfairvalueor, iflower, atthepresent valueo ownership to thelessee. Allother leasesare classifiedasoperatingleases. Leases are classifiedasfinance leaseswhenever theterms oftheleasetransfer substantiallyalltherisksandrewards of Leasing Interest income isaccrued onatimebasis, by reference to theprincipaloutstandingandateffective interest rate applic period, includingsalesofrefreshments andtote income. thecaseofgreyhoundIn stadia,revenue represents income arisingfrom theoperation ofthegreyhound stadiainthe online casinosandnetincome earnedfrom poker gamescompleted by periodend. events for LBO, completed businesses, by periodendfor netwinningsongamingactivity telephone andinteractive sports Amounts wagered represents receivable thegross from takings customers ofindividualbetsplaced inrespect intheperiodon Revenue from thenetincome theonlinepokerbusinessreflects (‘rake’) earnedfrom pokergamescompleted by theperiodend. losses realised onpositionsthathave closed. are carriedatfairmarketvalueandgainslossesarisingonthisvaluationare recognised inrevenue, aswell asgainsand online arcade andothernumbersbets),revenue represents intheperiod. Openpositions gainsandlossesfrom bettingactivity thecaseofLBO,In businessesandonlinecasinooperations(includinggamesonthe telephone, interactive sportsbook set outbelow. receivable thattheGroup for isinbusinessto provide goodsandservices netofdiscounts, VAT andothersalesrelated taxes, Revenue ismeasured atthefairvalueofconsideration received orreceivable from customers andrepresents amounts Revenue recognition to beingtestedsubject for impairment. Goodwill arisingonacquisitions before thedate oftransitionto IFRShasbeen retained attheprevious UKGAAPamounts determination oftheprofit orlossondisposal. On disposalofasubsidiary, associate orjointlycontrolled entity, theattributableamountofgoodwillisincludedin recognised asanassetatcost andissubsequentlymeasured atcost lessany accumulated impairmentlosses. identifiable assetsandliabilitiesofasubsidiary, associate orjointlycontrolled atthedate ofacquisition. entity Goodwil Goodwill arisingonconsolidation represents theexcess ofthecost ofacquisition over theGroup’s interest inthefairvalue Goodwill case appropriate provision ismadefor impairment. of theGroup’s interest intherelevant entity. Losses may provide evidence ofanimpairmenttheassettransferred inwhich Where aGroup Company withanassociate orjointventure transacts oftheGroup, profits andlossesare eliminated to theexten period ofacquisition. atthedate ofacquisitionidentifiable netassetsoftheentity (i.e. discount onacquisition) iscredited inprofit andloss of acquisition isrecognised asgoodwill. ofthecost Any ofacquisition below deficiency theGroup’s share ofthefairvalues Any excess ofthecost ofacquisition over theGroup’s share at ofthefairvaluesidentifiablenetassetsentity recognised. individual investments. Losses oftheassociates andjointventures inexcess oftheGroup’s interest inthoseentitiesare not adjusted by post-acquisition changesintheGroup’s share ofthenetassetsentity, lessany impairmentinthevalueof methodofaccounting.the equity Investments inassociates andjointventures are carriedinthebalance sheetatcost as The results andassetsliabilitiesofassociates andjointventures are incorporated intheseGroup financialstatements us Investment inassociates andjoint ventures (continued) into anoperatingleaseare also a straight-line basisover the term oftherelevant lease. spread on astraight-line basis over in the l isinitially thedate f the of the of the arged able. the ing as t Statement of Group Accounting Policies William Hill PLC Annual Report & Accounts 2007 45 n of. ts ll s nce rary the to the to inst are a on income ion ed. The interest cost and the expected return on asse and the expected cost return interest The ed. tions are translated at exchange rates prevailing on prevailing rates at exchange translated tions are the average exchange rates for the period unless exchange rates unless exchange the period for rates exchange the average are treated as deferred income and released to profit and loss profit to and released income as deferred treated are prevailing at the date when the fair value was determined. Gains when the fair value was determined. at the date prevailing sheet represents the present value of the defined benefit obligatio the present sheet represents date. Non-monetarydate. at fair value that assets and liabilities carried exceptional operating items and after the share of results of associates and joint of associates of results and after the share operating items exceptional balance sheet date. Income and expense items are translated at translated are Income and expense items sheet date. balance is disposed or as expenses in the period in which the operation as income recognised are differences Such translation reserve. taxable or deductible and it further or expense that are in other years of income items excludes because it excludes statement been that have rates using tax tax is calculated current liability for Group’s The taxable or deductible. never that are items sheet date. enacted the balance enacted by or substantively the carrying between amounts of assets and differences on or recoverable tax is the tax expected be payable to Deferred and is of taxable profit, tax bases used in the computation and the corresponding liabilities in the financial statements all taxable tempo for generally recognised tax liabilities are Deferred sheet liability using the balance method. for accounted aga will be available that taxable profits the extent to that it is probable recognised tax assets are and deferred differences if the temporary differe not recognised Such assets and liabilities are which deductible can be utilised. temporary differences of other assets and liabilities in (other than in a business combination) the initial recognition goodwill or from arises from profit. transaction nor the accounting that affects neither the tax profit The tax expense represents the sum of the tax currently payable and deferred tax. and deferred payable the sum of the tax currently tax expense represents The as reported in the net profit from differs profit Taxable the period. for is based on taxable profit payable tax currently The Taxation fluctuate significantly. Exchange differences arising, if any, are classified as equity and transferred to the Group’s translat the Group’s to as equity classified and transferred are if any, arising, differences Exchange fluctuate significantly. Retirement benefit costs costs benefit Retirement as an expense as they fall due. charged benefit schemes are retirement defined contribution to Payments Unit Credit using the Projected benefits is determined of providing the cost benefit schemes, defined benefit retirement For in fu recognised Actuarial gains and losses are with actuarialMethod, sheet date. being carried out at each balance valuations denominated in foreign currencies are translated at the rates at the rates translated are currencies in foreign denominated arising differences exchange for except the period, loss for or net profit included in are and losses arising on retranslation directly in equity. non-monetary recognised in fair value are the changes assets and liabilities where currency makes every the Group its foreign effort match risks, to exchange certain to hedge its exposure foreign to In order assets and liabilities. opera overseas and liabilities of the Group’s the assets On consolidation, of the assets concerned. the expected useful lives over after charging is stated Operating profit costs. and finance income investment but before ventures of recognised in the statement or loss and presented outside profit recognised are They in the period in which they occur. and expense. income and otherwise is amortised vested, already the extent to that the benefits are immediately on a service is recognised cost Past vest period until the benefits become the average basis over straight-line Operating profit Operating Government grants Government plant and equipment property, to relating grants Government Finance costs Finance rate at a constant of those borrowings the term over and loss account in the profit recognised are of borrowings costs Finance on the carrying amount. Transactions in currencies other than pounds sterling are recorded at the rates of exchange prevailing on the dates of the on the dates prevailing of exchange at the rates recorded are than pounds sterling other currencies in Transactions are currencies monetary in foreign denominated sheet date, each balance that are assets and liabilities transactions. At sheet the balance on prevailing at the rates retranslated Foreign currencies currencies Foreign are included in finance costs and investment income as appropriate. income and investment costs included in finance are in the balance benefit obligation recognised retirement The thi from asset resulting Any the fair value of scheme assets. by past service and as reduced cost, unrecognised for as adjusted contributions and reductions in future refunds past service value of available to calculation is limited plus the present cost, plan. 46 William Hill PLC Annual Report & Accounts 2007 Statement of Group Accounting Policies money andtherisks specificto theassetfor whichtheestimates offuture cash flows have notbeenadjusted. discounted discount to ra theirpresent value usingapre-tax cash flows, whichare based onthebudgeted figures for thefollowing year andsubsequentlyan annualgrowth rate of2.4%, are Recoverable amount isthehigheroffairvaluelesscosts to sell and whenever there isanindicationthatthe asset may beimpaired. generating unitto whichtheassetbelongs. Anintangible assetwithanindefinite usefullife istested for impairmentannuall expense intheperiodwhichitisincurred. ten years. Where nointernally generated intangible assetcanberecognised, development expenditure isrecognised asan generate cashflows thatare independent from otherassets, amount oftheassetisestimated inorder to oftheimpairmentloss(ifany). determine theextent Where theassetdoesnot whether there isany indicationthatthoseassetshave suffered animpairmentloss. any If suchindicationexists, therecovera At eachbalance sheetdate, theGroup amounts ofitsgoodwill, reviews tangible andintangible assetsto thecarrying determine Impairment oftangibleandintangible assets licences. andtheGroup’s services; sustained demandfor bookmaking trackrecord ofsuccessfully renewing itsbettingpermitsand have anindefinite life thattheGroup dueto: isasignificant thefact operator inawell establishedmarket;theproven and are to butare accordingly annualimpairmentreviews. subject notamortised The directors consider thattheGroup’s licences Betting licences are recorded atcost orifarisinginanacquisition attheirfairvalue. They are judgedto have anindefinit Intangible assets–licences onastr generatedInternally intangible assetsare amortised The development cost oftheassetcanbemeasured reliably. • isprobable thattheassetcreated It willgenerate future economic benefits;and • An assetiscreated andnewprocesses); thatcanbeidentified(such assoftware • the following conditions are met: An internally generated intangible assetarisingfrom theGroup’s development ofcomputer systems isrecognised onlyifallof which itisincurred. Expenditure oninitialinvestigation anddesign ofcomputer andsystems software isrecognised asanexpenseintheperiod Internally generated intangible assets–computer andsystems software at theircost, lessany subsequentaccumulated depr Land andbuildingsheldfor orfor useinthesupplyofgoodsorservices, administrative purposes, are stated inthebalance s Property, plant andequipment to equity, inwhichcasethedeferred taxisalsodealtwithinequity. realised. Deferred taxischarged orcredited intheincome statement, except whenitrelates to items charged orcredited dire Deferred taxiscalculated atthetaxrates issettledortheasset thatare to applyintheperiodwhenliability expected probable thatsufficienttaxableprofits willbeavailable oftheassetto berecovered. to allow allorpart amountofdeferredThe taxassetsisreviewed carrying ateachbalance sheetdate andreduced thatitisnolonge to theextent difference willnotreverse intheforeseeable future. except where theGroup isableto control difference thereversal ofthetemporary anditisprobable thatthetemporary Deferred taxliabilitiesare recognised differences for taxabletemporary arisingoninvestments insubsidiariesandassociates Taxation (continued) reodbidns–50years over theunexpired periodofthelease – 50years – – Assets heldunderfinance leasesare depreciated over usefullives theirexpected onthesamebasisasowned assets. amountoftheassetandis recognised inincome.the carrying at variablerates between 3and10years The gainorlossarisingonthedisposalretirement ofanassetisdetermined asthedifference between thesalesproceeds a – Fixtures, fittingsandequipmentmotor vehicles leaseholdproperties Short Long leaseholdproperties Freehold buildings valuation, lessestimated residual value, ofeachassetonastraigh Depreciation isprovided onalltangible fixed assets, otherthanfreehold land, atrates calculated to write offthecost or Fixtures andequipmentare stated atcost lessaccumulated depreciation andany recognised impairmentloss. eciation andsubsequentaccumulated impairmentlosses. aight-line basisover theirusefullives, generallybetween three te current thatreflects marketassessments ofthetimevalue the Group estimates therecoverable amountofthecash- and valueinuse. assessingvalueinuse, In theestimated fu t-line basisover usefullife, itsexpected asfollows: e life and is ture and heet y ble , ctly nd r Statement of Group Accounting Policies William Hill PLC Annual Report & Accounts 2007 47 ed line ed its air value is expensed on a straight- the date of grant. F of grant. the date rable amount. An impairment loss is recognised as an expense loss is recognised rable amount. An impairment estimated to be less than its carrying to estimated the carrying amount, of non-transferability, exercise restrictions and behavioural exercise of non-transferability, eased carrying the carrying amount does not exceed amount that their fair value as reduced by appropriate allowances for estimat for allowances appropriate by their fair value as reduced also been adjusted to take into account any market conditions any account take into to also been adjusted Equity instruments net of direct issue costs. received, at the proceeds recorded are Equity the Company instruments issued by Trade payables Trade at their fair value. stated and are not interest-bearing are payables Trade Financial liability and equity Financial of the contractual entered substance the arrangements to according classified liabilities and equity instruments are Financial after deducting in the assets of the Group all of interest contract a residual An equity that evidences instrument is any into. Bank borrowings charges, Finance net of direct issue costs. received, at the proceeds recorded are bank loans and overdrafts Interest-bearing the basis to on an accrual for accounted are and direct issue costs, on settlement or redemption payable including premiums and deferred included in accruals are costs finance accrued Any method. interest using the effective and loss account profit within trade and other payables. income irrecoverable amounts. amounts. irrecoverable liabilities. Trade receivables Trade at stated and are do not carry interest receivables any Trade Financial assets and financial liabilities are recognised on the Group’s balance sheet when the Group becomes a party becomes sheet when the Group balance the to on the Group’s recognised assets and financial liabilities are Financial of the instrument. contractual provisions Cash and cash equivalents comprise cash and short-term bank deposits held by the Group with an original maturity with an original of three cash and short-term the Group and cash equivalents comprise held by bank deposits Cash months or less. instruments Financial Cash and cash equivalents Cash would have been determined had no impairment loss been recognised for the asset (cash-generating unit) in prior years. A the asset (cash-generating for unit) in prior years. loss been recognised had no impairment been determined have would immediately. income as of an impairment loss is recognised reversal as of 1 January 2005. As Save issues equity-settled an Inland share-based approved Group certain and operates The Revenue to payments employees cost The at a discount. of shares the purchase which allows employees all eligible scheme open to option share Earn (SAYE) You of share-based at at fair value the Group plans is measured to payment vest. that will eventually of shares estimate based on the Group’s period, the vesting basis over used in the model has been expected life The use of the Black-Scholes-Merton by value is measured pricing formula. Fair the effects for best estimates, on management’s based adjusted, Share-based payments ‘Share-based Payment’from of IFRS 2 with the has applied the requirements Group In 2003. The 31 December accordance unvest 2002 that were after 7 November all grants been applied to have included in IFRS 2, its provisions transition provisions amount of the asset (cash-generating unit) is reduced to its recove to amount of the asset (cash-generating unit) is reduced immediately. the carrying the to of the asset (cash-generating amount loss subsequently reverses, an impairment unit) is increased Where incr amount, but so that the of its recoverable estimate revised at the stated are They stadia. within the greyhound resale and goods for in stores of consumables stocks represent Inventories value. and net realisable of cost lower the value of the option has relevant, Where considerations. the option. applicable to 34. in note share-based given plans are payment descriptions of the Group’s Further Inventories If the recoverable amount of an asset (or cash-generating amount unit) is If the recoverable Impairment of tangible and intangible assets (continued) of tangible and intangible Impairment 48 William Hill PLC Annual Report & Accounts 2007 Statement of Group Accounting Policies liabilities undertheterm “Derivative financialinstruments”. included inrevenue. Assets orliabilitiesresulting from openpositionsare gross reported infinancialassetsand Bets are carriedatfairmarketvalueastheymeetthedefinitionofaderivative. The resulting gainsandlossesfrom betsare unrealised intheincome statement. gainsorlossesreported areand characteristics notcloselyrelated are andthehostcontracts to notcarriedatfairvaluewit thoseofhostcontracts Derivatives are embeddedinotherfinancialinstruments orotherhostcontracts treated asseparate derivatives whentheirrisk cumulative gainorlossrecognised is transferred inequity to netprofit orlossfor theperiod. retained untiltheforecasted to occur, isnolongerexpected inequity occurs. ahedgedtransaction transaction If thenet qualifies for hedgeaccounting. At thattime, any cumulative gainorlossonthehedging instrumentrecognised is inequity Hedge accounting isdiscontinued whenthehedging instrumentexpires orissold, terminated, orexercised, ornolonger income statement astheyarise. Changes inthefairvalueofderivative financialinstrumentsthatdonotqualifyfor hedgeaccounting are recognised inthe net profit orloss. liability, amountsdeferred are inequity recognised intheincome statement inthesameperiodwhichhedgeditem affect included intheinitialmeasurement oftheassetorliability. For hedgesthatdonotresult intherecognition ofanassetor isrecognised,asset orliability theassociated gainsorlossesonthederivative thathadpreviously beenrecognised inequit hedge ofafirmcommitment orforecasted results intherecognition transaction ofanassetoraliability, then,atthetimet isrecognisedrecognised andtheineffective immediately inequity portion directly intheincome thecashflow statement. If the cash-generating unitsto whichgoodwillorthoseintangible assetshas the cash-generating Determining whethergoodwillorintangible assetswithindefinite lives are impaired requires anestimationofthevalueinuse Impairment ofgoodwillandintangible assetswithindefinitelives financialyear,and liabilitieswithinthenext are discussedbelow. The estimates andassumptions, which have asignificant riskof periods iftherevision affects bothcurrent andfuture periods. in theperiodwhichestimate isrevised if therevision affects onlythatperiod, orintheperiodofrevision andf The estimates andunderlyingassumptionsare reviewed onanongoingbasis. Revisionsto accounting estimates are recognised thatareother factors considered to berelevant. results Actual may differ from theseestimates. are notreadily apparent from othersources. The estimates andassociated assumptionsare basedonhistorical experience and directors are required amountsofassetsandliabilitiesthat to makejudgements, estimates andassumptions aboutthecarrying theapplicationofGroup’sIn accounting policies, whichare describedinthisStatement ofGroup Accounting Policies, the Critical accounting judgements andkey sources ofestimation uncertainty Changes inthefairvalueofderivative financialinstrumentsthatare principles ontheuseoffinancialderivatives. The useoffinancialderivatives isgoverned by theGroup’s policiesapproved by theBoard ofdirectors, whichprovide written exchange rates. The Group doesnotusederivative financialinstrumentsfor speculative purposes. currencies matched againstitsforeign liabilities(clientdepositaccounts) currency to hedgeitsexposure to foreign currency The Group usesinterest rate to swapandcollar hedgeitsinterest contracts rate exposure andretains cashbalances inforeign The Group’s exposeitprimarilyto thefinancialrisksofchangesininterest activities rates andforeign exchange currency ra Derivative financialinstruments andhedgeaccounting Financial instruments (continued) the entity to estimatethe entity thefuture cashflows to expected subsequent periods. Note 35provides information ontheassumptions usedinthesefinancialstatements. return onschemeassets. Differences experiences arisingfrom orfuture actual changes in assumptionswillbereflected in assumptionswhichincludethediscount andexpected rate, growth, ofcertain inflationrate,on theselection mortality salary The determination ofthepensioncost anddefined benefitobligationoftheGroup’s definedbenefitpensionschemesdepends Retirement costs Benefit Assumptions are madebasedonquoted marketrates adjusted for specificfeatures oftheinstrument. bank borrowings. appr The directors usetheirjudgementinselecting As describedinnote 22theGroup usesinterest rate swapsandcollars Fair value ofderivatives outcomes could vary. to calculate present value. Note 12provides information ontheassumptions usedinthesefinancialstatements. Actual arise from the cash-generating unitandasuitable discountarise from rate inor thecash-generating causing a material adjustment to the carrying amountsofassets causing amaterial adjustmentto thecarrying designated andeffective ashedgesoffuture cashflows opriate valuation techniques for these financialderivative to manageitsexposure to interest rate movements onits been allocated. The valueinusecalculationrequire uture a h he tes. y are are der s of s s. s Notes to the Group Financial Statements William Hill PLC Annual Report & Accounts 2007 49 hese 6.3 2.9 £m 2006 903.4 894.2 483.9 26 December 52 weeks ended 52 weeks 12.7 12.7 24.3 24.3 £m 3.7 10.4 2008 954.5 940.4 1 January 53 weeks ended 53 weeks ––––(87.6)(87.6) –––– ––––0.70.7 ––––6.76.7 –––– 9–––– £m £m £m £m £m £m Retail Interactive Telephone Other Corporate Group

Goodwill 687.8 97.2 80.4 7.1 – 872.5 Other lives with indefinite intangibles 483. Balance sheet information Balance assetsTotal liabilitiesTotal and joint ventures in associates Investment 1,386.4 (53.5) 117.9 (25.3) 85.0 (5.7) 16.3 (0.5) (1,384.6) 97.1 (1,469.6) 1,702.7 Profit/(loss) before tax before Profit/(loss) 229.8 30.0 16.1 1.1 (67.8) 209.2 Finance costs Finance Share of result of associates and joint ventures and joint ventures of associates of result Share divisions are the basis on which the Group reportsthe basis on which the Group its primarydivisions are information. segment ended 1 January the 53 weeks for 2008: information Business segment of sales levies and other cost duty, GPT, profitGross Depreciation (137.6)Other expenses administrative expense operating Exceptional (23.2) profit/(loss)Operating on sale and leaseback profit Exceptional (12.3)of properties (365.8) income Investment (1.1) – (38.8) 621.7 (26.1) (20.9) (23.1) 229.8 – 96.6 (6.9) (5.8) 30.0 (174.2) – additionsCapital 40.7 assets: Total Included within (1.5) (10.8) 16.1 7.2 – (444.3) (0.3) 1.1 – – (1.1) (11.2) 766.2 (35.9) (20.9) 265.8 42.2 16.1 1.4 0.1 1.0 60.8 Amounts wageredPayoutRevenue 13,022.5 1,182.0 (12,263.2) 559.2 759.3 (1,062.2) 28.6 (506.2) 119.8 (20.3) 53.0 – 14,792.3 8.3 – (13,851.9) – 940.4 For management purposes, the Group is currently organised into three operating divisions – Retail, Interactive and Telephone. T Telephone. and Interactive divisions – Retail, operating three into organised is currently the Group management purposes, For Total revenue as defined in IAS 18 as defined revenue Total Interest on bank deposits on Interest Rendering of services and revenue as disclosed in the consolidated Rendering of services and revenue statement income An analysis of the Group’s revenue is as follows: is as revenue of the Group’s An analysis for the 53 weeks ended 1 January the 53 weeks for 2008 Other operating income Notes to the Group Financial Statements Financial Group the to Notes 2. Segment information 1. Revenue 50 William Hill PLC Annual Report & Accounts 2007 Notes to the Group Financial Statements .Exceptional items 3. information Segment (continued) 2. Included within Included Total assets: the Group’s netassetsislocated outsideoftheUnited Kingdom. necessitate disclosure) ofrevenue andprofits generated from Similarly, customers outsideofthisjurisdiction. onlyasmallp and profits ariseprimarilyfrom customers withsignificantly intheUnited lessthan10%(theminimumrequired Kingdom by IAS accordanceIn withIAS14 Reporting’,‘Segment segment information by geographical location isnotpresented astheGroup’s rev There are no inter-segmental saleswithintheGroup. basis. channelotherthanonanarbitrary cannot beallocated to aparticular Corporate netassetsincludecorporation anddeferred tax,netborrowings, aswell andpensionliability asany assetsandliab Net assets/(liabilities)have beenallocated channe by segment where assetsandliabilitiescanbeidentifiedwithaparticular course betting andgreyhound stadiaoperations. includeo activities inLBOsincludinggamingmachines. Other undertaken The Retaildistributionchannelcomprises allactivity Sale andleasebackofLBOproperties 71.7 ofassetsinrelation prgrammeImpairment to termination ofNextGen 1.0 Exceptional items are asfollows: 1,707.5 (1,517.0) – attention, inunderstandingtheGroup’s financialperformance. 104.8 (1,430.8) Exceptional ormaterial items innature are thatshouldbebrought thoseitems theGroup to thereader’ considers to beone-off (0.5) 9.1 18.9 235.4 (4.4) 95.8 9.1 (29.8) (68.1) 733.9 (26.6) 292.2 127.1 52.5 894.2 (0.6) (0.5) – (11.3) (54.7) 1,360.9 – 16.7 (0.2) (0.6) (415.5) (12,341.7) 6.4 – (14.4) 61.5 (0.7) 7.3 16.7 13,235.9 44.6 (160.3) (6.8) 225.9 – (4.9) (22.4) 61.5 57.5 Capital additions 104.5 – Investment inassociates (27.2) (602.4) (23.5) Total liabilities 225.9 130.5 29.7 Total assets 578.4 (38.1) (929.8) (0.9) Balance sheetinformation 698.9 659.9 (10,787.1) (329.0) Profit/(loss) before tax (12.9) Finance costs 1,060.3 Investment income (26.0) Operating profit/(loss) 11,486.0 Share ofresult ofassociate administrative expenses Other (120.5) Depreciation Gross profit GPT, duty, leviesandothercost ofsales Revenue Payout Amounts wagered Business segment information for the52weeks ended26December 2006: 2008 for the53weeks ended1January Notes to theGroup Financial Statements 2 1 te nagbe ihidfnt ie 454. intangibles withindefinite lives Other odil6109. 0471–865.7 – 7.1 80.4 97.2 681.0 Goodwill Income aroseIncome andisshown from netofcosts. thesale andleasebackof24LBOproperties hardware equipment. Further detailsare given intheOFRonpage7. This decisionresulted inanimpairmentcharge of£20.9m. The charge consists of£20.5minternally developed software, and£0.4 NovemberIn 2007theBoard ofdirectors instigated programme. areview oftheNextGen As aresult ofthereview theprogramme w 2 ealItrcieTlpoeOhrCroaeGroup Corporate Other Telephone Interactive Retail m£ m£ m£m £m £m £m £m £m 7–––– ––––5.35.3––––(69.8)(69.8)–––– ––––3.63.6 1 53 weeks ended 1 January (14.2) (20.9) 2008 6.7 £m 3013.0 13.0 52 weeks ended 26 December m computer as terminated. 454.7 ortion of ortion 2006 l. £m ilities that – – – n- s 14 to enue Notes to the Group Financial Statements William Hill PLC Annual Report & Accounts 2007 51 ow: – – – – – 0.1 0.2 0.7 3.6 2.7 3.6 0.4 £m £m £m £m (0.1) he 27.1 2006 2006 2006 2006 214.1 unerations) 26 December 26 December 26 December 26 December 26 December 26 December 52 weeks ended 52 weeks 52 weeks ended 52 weeks ended 52 weeks ended 52 weeks £m 0.1 0.2 0.9 0.6 2008 1 January 53 weeks ended 53 weeks 1 £m £m £m 3.3 0.7 5.9 8.1 4.5 0.7 (2.6) (1.4) 27.8 20.9 2008 2008 2008 231.8 Category 1 January 1 January 1 January 53 weeks ended 53 weeks 53 weeks ended 53 weeks ended 53 weeks Fees are broken down by category in accordance with Statutory Instrument 2005 No.2417, The Companies (Disclosure of Auditor Rem of Auditor (Disclosure Companies The with Statutory category by Instrument down in accordance 2005 No.2417, broken are Fees 2005 Schedule 2 Regulation 4(3) Costs. 2005 Schedule 2 Regulation 4(3) Costs. The audit of the Company’s subsidiaries, pursuant to legislation pursuant to subsidiaries, audit of the Company’s The 1 Tax servicesTax 3 Fees payable to the Company’s auditor and its associates for other services: for and its associates auditor the Company’s to payable Fees 1 Total fees payable to Deloitte & Touche LLP Touche & Deloitte to payable fees Total Fees payable to the Company’s auditor for the audit of the for auditor the Company’s to payable Fees annual accounts Company’s Staff costs (note 6) (note Staff costs Net foreign exchange losses/(gains) exchange Net foreign Operating profit has been arrived at after charging: has been arrived profit Operating Depreciation of property, plant and equipment plant and of property, Depreciation 3) Impairment assets (note of intangible bel shown are LLP and their associates Touche & Deloitte to payable with Statutory 2417, fees In Instrument accordance 2005 No. Share of profit after taxation in associated undertakings after taxation in associated of profit Share of loss after taxation in joint ventures Share Tax relief expected in respect relief of assets impaired Tax Deferred tax charge on held over capital gain on sale and capital gain on held over charge tax Deferred leaseback of LBO’s Exceptional tax (charges)/credit are as follows: are tax (charges)/credit Exceptional Depreciation of software Depreciation The above represents the Group’s share of the operating profit of Satellite Information Services Information of Satellite and t (SIS) (Holdings) Limited profit of the operating share the Group’s represents above The 15. in note further given in Italy details of which are and Spain with Codere, ventures joint Group’s 5. profit Operating 4. ventures and joint of associates of results Share 3. items (continued) Exceptional 52 William Hill PLC Annual Report & Accounts 2007 Notes to the Group Financial Statements .Finance costs 8. Investment income 7. Staff costs 6. Operating profit (continued) 5. Net interest payable Interest onpensionschemeliabilities (note 35) Interest payable andsimilarcharges: returnExpected onpensionschemeassets(note 35) Interest onbankdeposits pensionnetgains(note 35) Other costs security Social Wages andsalaries stadia. Their aggregate remuneration comprised: 2006 -13,952)allofwhomare engagedintheadministration andtheoperation andprovision of ofbettingandgamingservices The average monthlynumberofpersonsemployed, includingdirectors, duringtheperiodwas14,629(52weeks ended26December Touche LLPby theCompany anditssubsidiaries. fees inorder to ensure thatindependence ismaintained. The fees disclosedabove consolidate allpayments madeto Deloitte & forCommittee awarding setsthepolicy non-auditwork to theauditors andreviews thenature ofsuchwork andextent andrelate The auditfees payable to Deloitte & Touche LLPare reviewed by theAudit Committee to ensure suchfees are competitive. The Deloitte & Touche for LLPdoesnotprovide theGroup’s services pensionschemes. 2008 for the53weeks ended1January Notes to theGroup Financial Statements cash flow hedgesoffloatingrate debt Fair valuegainsoninterest rate swapstransferred from for equity been credited to theStatement ofRecognised andExpense. Income pensionnetgainsis£12.9mrelating gains(52weeks to ended26December actuarial inOther 2006-£16.7m),whichhavIncluded Amortisation offinance costs Amortisation Bank loansandoverdrafts 53 weeks ended 53 weeks ended 53 weeks ended 1 January 1 January 1 January 218.8 231.8 2008 2008 2008 75.9 87.6 11.7 74.4 24.3 12.7 18.9 (5.9) 1.5 4.0 7.6 £m £m £m 52 weeks ended 52 weeks ended 52 weeks ended 26 December 26 December 26 December 204.7 214.1 2006 2006 2006 59.1 69.8 10.7 57.8 13.0 10.1 17.4 (8.0) £m £m £m 1.3 2.9 – d e Notes to the Group Financial Statements William Hill PLC Annual Report & Accounts 2007 53 s – ms and 8.5 5.1 3.4 £m red tax red (6.4) 68.6 66.5 60.1 2006 ome is andard rate for rate andard 2006 26 December 26 December 52 weeks ended 52 weeks –– –– 52 weeks ended 52 weeks 2.1 0.9 £m % (3.6) (3.0) (1.3) 68.6 29.6 69.5 30.0 235.4 231.8 100.0 2008 1 January £m 1.4 4.8 (5.1) (4.7) 51.8 61.6 56.9 2008 (11.3) 53 weeks ended 53 weeks £m % 0.11.0 – 0.5 (0.6) (0.3) (0.7) 51.8 24.8 62.6 30.0 (11.3) (5.4) 209.2 208.5 100.0 1 January 53 weeks ended 53 weeks UK corporation tax at 30% UK corporation Origination and reversal of timing differences and reversal Origination Impact changes in statutory from tax rates Adjustment in respect of prior years Adjustment UK corporation tax – prior periods tax – prior UK corporation Permanent differences – non taxable income differences Permanent tax charge Total Less: share of results of associates and joint ventures of associates of results share Less: Profit before tax before Profit Total deferred tax (credit)/charge deferred Total on ordinary tax on profit activities Total Total current tax charge current Total Current tax: Current The tax charge comprises: tax charge The The effective tax rate in respect of ordinary activities before exceptional costs and excluding associate and joint venture inc and joint venture associate and excluding costs in respect of ordinary exceptional tax rate activities effective The before in respect of ordinary ite tax rate activities effective afterThe exceptional 2006 - 29.6%). ended 26 December 25.3% (52 weeks i charge period’s current The 2006 – 29.6%). ended 26 December was 24.8% (52 weeks income and joint venture associate excluding 1 April 28% from 30% to from tax rates corporation a reduction statutory than the in mainstream to of 30% mainly due lower rate sheet carrying the reduction in the balance arising from tax credit value of defer in a deferred change has resulted This 2008. expected reverse. to of tax at which those liabilities are rate reflect the anticipated net liabilities to of UK rate the standard applying by and the amount calculated above tax shown current the total between differences The tax is as follows: before the profit tax to corporation Deferred tax: Deferred Tax on Group profit at standard UK corporation tax rate of 30% tax rate corporation UK at standard profit on Group Tax The Group earns its profits primarily in the UK, therefore the tax rate used for tax on profit on ordinary tax on profit activities used for is the st the tax rate primarily in the UK, earns its profits therefore Group The 30%. tax, currently UK corporation Impact of changes in statutory tax rates in respect of prior periods Adjustment – non deductible expenditure differences Permanent 9. on ordinary on profit activities Tax 54 William Hill PLC Annual Report & Accounts 2007 Notes to the Group Financial Statements 1 Earningspershare 11. Dividendsproposed andpaid 10. in treasury. The Company estimates that347.2mshares willqualifyfor thefinaldividend. shares. addition,theCompany 2008,thetrustheld0.03mordinary In As doesnotpay at1January dividendsonthe6.5mshares Under anagreement signed inNovember 2002, The William Holdings2001Employee Hill Benefit Trust agreed to waive alldividends within theseresults. linewiththerequirementson 2May 2008.In ofIAS10– ‘Events theBalance after SheetDate’, thisdividendhasnotbeenreco The proposed to finaldividendof15.5pwill, shareholder subject approval, bepaidon5June2008to allshareholders onther The calculationofthebasicanddiluted earningspershare isbasedonthefollowing data: oftheGroup.underlying performance An adjusted earningspershare, basedonprofit for theperiodbefore exceptional items, hasbeenpresented inorder to highlig Basic Profit taxfor after thefinancialperiodbefore exceptional items Exceptional items –taxcredit (note 3) Exceptional items (note 3) Profit taxfor after thefinancialperiod Diluted Basic –adjusted The earningspershare figures for therespective periodsare asfollows: Proposed dividend – prioryear finaldividendpaid – current year interim dividendpaid shares:Equity 2008 for the53weeks ended1January Notes to theGroup Financial Statements 53 weeks ended 53 weeks ended 1 January 1 January 53 weeks Per share 22.25p 1 January 1 January ended 15.5p 14.5p 7.75p 2008 Pence 167.1 157.4 2008 2008 44.7 14.2 44.3 47.4 (4.5) £m 26 December 52 weeks Per share 19.45p ended 14.5p 12.2p 7.25p 2006 1 January 53 weeks ended 2008 78.5 53.8 51.2 27.3 £m 52 weeks ended 52 weeks ended 26 December 26 December 26 December 52 weeks ended Pence 166.8 166.8 2006 2006 2006 70.9 51.2 45.3 25.6 45.5 44.9 45.5 £m £m gnised egister – – ht the held . Notes to the Group Financial Statements William Hill PLC Annual Report & Accounts 2007 55 ing time ch are The of scount g is nts of the 4.7 f shares 2006 371.4 366.7 in a well Number (m) 26 December 26 December 52 weeks ended 52 weeks Licence Computer 3.4 2008 £m £m £m £m 355.6 352.2 1 January Goodwill value software Total Number (m) 53 weeks ended 53 weeks At 1 January 1 2008At 872.5 483.9 9.5 1,365.9 At 28 December 2005 28 December At 865.7 452.8 18.5 1,337.0 At 26 December 2006 26 December At 865.7 454.7 22.3 1,342.7 At 28 December 2005 28 December At the period for Charge 2006 27 December At the period for Charge impairment write-downExceptional 3) (note 1 JanuaryAt 2008 – – – – – – – (6.2) – – – 4.3 – (6.2) 2.7 7.0 4.3 8.1 – 2.7 7.0 8.1 8.9 8.9 Exceptional impairment write-downExceptional 3) (note 1 JanuaryAt 2008 – – (26.7) 872.5 (26.7) 483.9 18.4 1,374.8 Additions 2006 27 December At Additions of subsidiary on acquisition Acquired 6.8 865.7 23.9 454.7 – – 29.3 – 1.9 1,349.7 30.7 5.3 10.8 15.8 12.7 21.1 Employee share awards and options awards share Employee The basic weighted average number of shares excludes shares held by The William Hill Holdings 2001 Employee Benefit Trust and Trust Benefit Hill Employee Holdings 2001 William The held by shares excludes number of shares average basic weighted The number o the average reduce is to of this effect The dividends. held in treasury do not qualify for those shares as such shares ended 1 January 2006 – 10.4m). 7.9m in the 53 weeks ended 26 December by weeks 2008 (52 Cost: purposes of diluted earnings per share per share earnings purposes of diluted Weighted average number of ordinary shares for the number of ordinary for shares average Weighted per share purposes of basic earnings Effect of dilutive potential ordinary potential shares: Effect of dilutive The amortisation period for the Group’s computer software is between three and ten years. The use of a ten-year life in respect life use of a ten-year The years. and ten software three is between computer amortisationThe the Group’s period for Net book value: software supply contract. some of the software the relevant is supported into written warranties by not amortised subject annual impairment reviews. accordingly but are to and are life an indefinite have judged to are Licences operator the fact is a significant due to: that the Group life an indefinite have licences that the Group’s consider directors renew of successfully record track bookmaking and sustained demand for services;established market; the proven Group’s and the its betting permits and licences. goodwill and other performs for the Group an annual impairment review Policies, Accounting of Group in the Statement stated As Testin amount. the carrying comparing by amount of these assets with their recoverable lives, assets with indefinite intangible amou recoverable The units (CGU’s). of cash generating the carrying allocating carried out by group’s to value of these assets di those regarding the value in use calculations are key assumptions for The value in use calculations. by determined are CGU’s market assessments of the using pre-tax that reflect current rates rates Management discount estimates rates. and growth rates, budget, whi period’s using the future forecasts cash flow prepares Group The the CGUs. value of money and the risks specific to rate. a growth then extrapolated by the budget period are beyond is 10.8% (2006: 10.7%) and cash flows of a CGU cash flows the future to applied rate discount The (2006: 2.4%). rate extrapolated using a 2.4% growth Accumulated amortisation:Accumulated Weighted average number of ordinary shares for the number of ordinary for shares average Weighted 12. assets Intangible 11. (continued) share Earnings per 56 William Hill PLC Annual Report & Accounts 2007 Notes to the Group Financial Statements 3 Property, plant andequipment 13. The netbookvalueoflandandbuildingscomprises: Net bookvalue: Accumulated depreciation: Long leasehold Short leasehold Short Freehold Cost: 2008 for the53weeks ended1January Notes to theGroup Financial Statements amounting to £20.2m(26December 2006-£13.3m). 2008, theGroup hadenteredAt into 1January commitments contractual for theacquisition ofproperty, plantandequipment ofassetsheldunderfinancerespect leases. amountoftheGroup’sThe carrying fixtures, fittingsandequipmentincludesanamountof£1.8m(26December 2006-£2.1m)in representing freehold land(26December 2006-£7.8m). remainder represents licensed bettingoffices. The gross valueofassetsonwhichdepreciation isnotprovided amountsto £7.1m Out ofthetotal netbookvalueoflandandbuildings, £2.5m(26December 2006-£3.6m)relates to administration buildingsand ipsl 86 06 (9.2) 39.7 (0.6) (7.3) 0.9 – (1.1) 1.4 368.0 0.9 (8.6) 5.2 (1.1) – 37.9 (5.1) 130.3 0.8 232.5 0.6 Disposals undertaking Acquisition ofsubsidiary Additions At 27December 2006 Disposals t2 eebr20 5. 6027207.0 (4.9) 2.7 184.7 (0.6) 3.0 46.0 (6.0) 27.8 – 158.3 93.1 161.0 (1.0) 0.9 (0.1) 1.1 27.1 (4.3) 88.6 2.5 139.9 (0.6) – – 8.4 1.0 399.4 84.3 2.5 (4.4) (0.1) 0.5 18.3 5.5 10.3 74.2 74.6 – 0.4 15.8 131.5 (0.5) 62.8 262.4 – At 26December 2006 (0.5) 2008 At 1January Exceptional impairmentwrite down (note 3) – Disposals undertaking Acquisition ofsubsidiary Charge for theperiod At 27December 2006 Disposals Charge for theperiod At 28December 2005 2008 At 1January Exceptional impairmentwrite down (note 3) diin 722. . 60.9 1.9 314.4 21.8 4.4 37.2 109.6 200.4 Additions At 28December 2005 t1Jnay20 7. 8425214.7 2.5 38.4 173.8 At 2008 1January ulig qimn eilsTotal vehicles equipment buildings 1 January 1 January adFixtures, Land n itnsad Motor fittingsand and 118.2 173.8 m£ m£m £m £m £m 2008 47.6 8.0 £m 26 December 100.0 158.3 2006 50.3 £m 8.0 the Notes to the Group Financial Statements William Hill PLC Annual Report & Accounts 2007 57 heir trade of all Proportion share capital share classes of issued Country ofCountry the by owned incorporation incorporation Company of trade Nature The proportion rights held is the same as the proportionThe held. of voting of shares Directly owned: Hill Holdings LimitedWilliam companies: intermediate Held through Limited Hill Investments William Hill LimitedWill (Sporting LimitedWindsors Investments) LimitedCamec Hill Limited Organization William Limited Hill (Course) William Limited Hill Credit William Hill (NorthWilliam Limited Eastern) LimitedWestern) Hill (NorthWilliam Hill (Southern) LimitedWilliam Limited Hill (Football) William Limited Hill (Strathclyde) William Limited Hill (Caledonian) William Britain Great Limited Hill (Grampian) William Britain Great Britain Great Limited Hill (London) William Hill (Midlands)William Limited Hill Limited (Scotland) William Hill (Western)William Limited 100% Britain Great 100% Hill (Essex) LimitedWilliam Holding company company Holding 100% Limited (Provincial) Camec Holding company Britain Great Limited (Scotland) Camec Britain Great Britain Great Britain Great (Southern)Limited Camec Britain Great LimitedLaystall 100% Britain Great BookmakersBrooke Limited Britain Great Betting services LimitedJames Lane Group 100% Britain Great Britain Great 100% 100% RacingArena Limited 100% Holding company Britain Great Limited Betting services Transdawn Betting services 100% Betting services 100% Racing LimitedWillstan Britain Great Betting services Limited Pools) Jennings (Harlow 100%T.H. Betting services Britain Great Eclipse Bookmakers Limited 100% Britain Great 100% Betting services Racing Limited (Ireland) Willstan 100% Britain Great Betting services Betting services LimitedWillstan Britain Great Betting services 100% LimitedBJ O’Connor (IOM) LimitedWillstan Betting services 100% Britain Great 100% Regal Sunderland Stadium LimitedThe Britain Great Betting services Limited Park) (Brough Greyhounds Team 100% Betting services Britain Great Hill NV Casino William 100% Betting services Britain Great Hill Online NVWilliam Betting services Limited Hill (Gibraltar) William Britain Great 100% Hill (Malta) LimitedWilliam 100% Britain Great Betting services Britain Great 100% Betting services Britain Great 100% Republic of Ireland Betting services Britain Great 100% Betting services Britain Great Britain Great Britain Great 100% Betting services 100% Britain Great Betting services 100% Britain Great 100% Betting services 100% Betting services Betting services 100% Betting services Northern 100% Ireland 100% Betting services Betting services 100% Betting services Isle Of Man 100% Stadium operation Netherland Antilles Stadium operation Jersey Antilles Netherland 100% Gibraltar Betting services 100% 100% 100% Betting services 100% Malta On-line casino Betting services 100% On-line casino On-line casino 100% On-line casino The principal subsidiaries of the Company, their country of incorporation, ownership of their share capital and the nature of t and the nature capital their country share of their ownership of incorporation, principal subsidiaries of the Company, The are listed below: listed are 14. Subsidiaries 58 William Hill PLC Annual Report & Accounts 2007 Notes to the Group Financial Statements 5 Interests inassociates andjoint ventures 15. undertaking. stated atcost andhave notbeenaccounted for method, undertheequity whichwould normallybeappropriate for an associated of thedirectors, theresults ofthesecompanies are notmaterial to theresults oftheGroup. Consequently, theinvestments ha Limited. These companies were formed for numbersbettingformats. thepurposeofpromoting theopini andpublicisingcertain In William Organization 33% of theentire Limited Hill orindirectly alsoholdsdirectly share capitalofLucky Choice Limited and Total revenue Total liabilities iiedpi 19 (1.9) 12.7 (0.1) (1.5) 0.3 (1.9) 6.6 Total profit tax after (0.1) 5.3 (1.5) 0.3 (1.7) 0.1 – Total assets 6.1 1.9 – – 3.4 5.3 – (1.7) 5.2 0.1 value. carrying The following financialinformation relates to SIS: Goodwill relating to theacquisition ofshares inSISof£24mwasfullyprovided againstin1999to recognise animpairmentin 4.5 (1.7) consolidated figures above are basedonmanagementaccounts for thecalendaryear 2007. numbersdraws,racing andcertain viasatellite. financialstatements ofSISareThe prepared statutory to theyear 3.4 – ending31M – The SISgroup ofcompanies provides information andresults, real timepre-event aswell aslive coverage ofhorseracing, grey 5.2 – the Board ofdirectors. The changeinthe Group’s share ofitsnetassetsisshown above. (2.6) method asfollowing thedisposal, theGroup significant isstillableto influence exert over SIS,by way ofits19.5%holding (1.7) to thesaleofshares to athird party. The investment usingtheequi hasstillbeenaccounted for asanassociated undertaking – incorporated inGreat Britain. William Organization Limited’s Hill shareholding hasdecreased intheperiodfrom 20.95%to 19.5 share (Holdings)Limited (SIS),acompany(26 December capitalofSatellite 2006–20.95%)oftheordinary Information Services – 2008 At 1January William oftheCompany, Organization Limited, Hill aprincipalsubsidiary heldaninvestment of19.5% 8.7 – Associates At 2008 1January – Dividend paid Disposal ofshares Share oftaxation Share ofinterest Share of(loss)/profit before taxation Additions 8.7 At 27December 2006 Change innetassetsdueto share repurchase Share oftaxation Share ofinterest Share ofprofit before taxation At 28December 2005 movement intheGroup’s investment inassociates andjointventures. The Group methodofaccounting usestheequity for associates andjointventures. The following tableshows theaggregate 2008 for the53weeks ended1January Notes to theGroup Financial Statements 1 January 2008 1 January on etrsAscae Total Associate Joint ventures 146.8 (33.9) 16.6 67.7 £m m£ £m £m £m 26 December 2006 and seaton 144.9 (32.8) 16.3 58.5 of49’s £m ty ve been arch. The the hound % due on Notes to the Group Financial Statements William Hill PLC Annual Report & Accounts 2007 59 s ive relates and – – – – 0.5 3.5 0.5 £m £m £m -rating 30.4 26.4 2006 2006 2006 receivables. 26 December 26 December 26 December % Betting Services 3 / 1 Proportion of all classes of issued capital share – £m £m £m 0.6 5.4 0.4 (9.9) (5.2) 32.3 26.5 22.4 2008 2008 2008 1 January 1 January 1 January environment. The credit risk on liquid funds and derivat credit The environment. Country ofCountry the by owned of Nature incorporation Company trade he Group’s credit risk is primarily attributable to its trade risk is primarily attributable to credit he Group’s with Codere in Spain and Italy as above. The following information information following The Italy in Spain and as above. with Codere Total revenue Total to the joint ventures with Codere: joint ventures the to During the period the Group has entered into joint ventures joint ventures into has entered During the period the Group Joint Ventures Joint The directors consider that the carrying amount of trade and other receivables approximates their fair value. that the carrying approximates consider directors The and other receivables amount of trade The amounts presented in the balance sheet are net of allowances for doubtful receivables, estimated by the Group’s management the Group’s by estimated doubtful receivables, for net of allowances sheet are in the balance amounts presented The economic and their assessment of the current based on prior experience or less. The carrying amount of these assets approximates their fair value. carryingThe of these assets approximates amount or less. the Group’s which represent and other receivables, and cash and trade balances bank principal financial assets are Group’s The T financial assets. to risk in relation credit to maximum exposure Cash and cash equivalents comprise cash and short-term bank deposits held by the Group with an original maturity of three month maturity with an original of three cash and short-term the Group and cash equivalents comprise bank deposits held by Cash risk Credit Cash and cash equivalents Cash Prepayments Trade debtors Trade Trade and other receivables Trade comprise: and other receivables Trade Raw materials, consumables and bar stocks consumables Raw materials, Total liabilities Total Other debtors Total loss after tax Total Total assets Total Codere Apuestas SACodere SL Apuestas Espana Codere Italia Hill SRL Codere William Garaipen Victoria Apustuak SL Spain Italy Spain Spain 50% 50% 33 50% Betting Services Betting Services Betting Services financial instruments is limited because the counterparties are banks with high credit ratings assigned by international credit international by assigned ratings because the counterparties banks with high credit financial instruments is limited are number of counterparties a large over risk, spread of credit with exposure concentration no significant has Group The agencies. customers. 17. Other financial assets 16. Inventories 15. (continued) ventures and joint in associates Interests 60 William Hill PLC Annual Report & Accounts 2007 Notes to the Group Financial Statements 0 Obligations underfinance leases 20. Borrowings 19. Trade andotherpayables 18. cash equivalents. deposits received andcustomer winnings. This isoffset by anequivalentamountofclientfundsheld, whichisincludedincash intrade creditorsIncluded isanamountof£20.8m(26December ofamountsdueto 2006-£18.7m)inrespect clients, representi amountoftrade payablesThe approximates directors consider thatthecarrying to theirfairvalue. The average credit periodtakenfor trade purchases is15days (26December 2006–19days). creditors Other Less: future finance charges After five years Within oneyear Amounts payable underfinance leases: follows: Future minimumleasepayments underfinance leases, together withthepresent valueofthenetminimumleasepayments are as Total borrowings Bank loans(note 21) Obligations underfinance leases(note 20) Due inlessthanoneyear: Accruals anddeferred income Trade creditors Trade andotherpayables comprise: 2008 for the53weeks ended1January Notes to theGroup Financial Statements Amounts due after moreAmounts dueafter thanoneyear Less: amountsduewithinoneyear thesecond years toIn inclusive fifth Obligations underfinance leases(note 20) Due inmore thanoneyear: Present valueofleaseobligations 1 January iiu es amnsPresent value ofminimum leasepayments Minimum 2008 (1.2) (0.1) 0.6 1.9 0.7 1.2 1.8 £m es amnsleasepayments lease payments – 26 December 1 January 1 January 1,153.3 1,151.5 1,152.1 2008 2008 2006 90.8 43.5 41.6 (0.9) (0.1) 5.7 1.2 0.6 £m £m £m 1.2 2.2 1.3 0.9 2.1 – 1 January 2008 (1.2) 0.6 1.8 0.6 1.2 1.8 £m – – 26 December 26 December 26 December 1,142.1 1,140.0 1,141.2 108.6 2006 2006 2006 66.3 37.4 (0.9) £m £m £m 4.9 0.9 1.2 2.1 1.2 0.9 1.2 2.1 and – – ng Notes to the Group Financial Statements William Hill PLC Annual Report & Accounts 2007 61 acility into for into – – – % sheet 5.4 £m (5.0) 2006 2006 lity is for a lity is for ases is fixed ended 1,145.0 1,140.0 1,140.0 1,145.0 1,145.0 52 weeks 26 December 26 December – – – % £m 6.6 (3.5) 2008 2008 ended 1,155.0 1,151.5 1,151.5 1,155.0 1,155.0 53 weeks 1 January 1 January rate contracted approximates 4.6% (52 weeks ended 26 December 2006 – ended 26 December 4.6% (52 weeks approximates contracted rate Bank loans In the third to fifth inclusive to In years the third In year the second On demand or within one year The weighted average interest rates paid were as follows: paid were rates interest average weighted The (shown under current liabilities) under current (shown settlement after 12 months Amount due for Less: expenses relating to loan to expenses relating Less: Bank loans The Group has finance leases for various items of plant, equipment, fixtures and fittings. The interest rate inherent in the le inherent rate interest The of plant, equipment, fixtures and fittings. various items leases for finance has Group The at the contract date for all of the lease term. All leases are on a fixed repayment basis and no arrangements have been entered have basis and no arrangements repayment on a fixed All leases are all of the lease term. for at the contract date interest effective average The payments. rental contingent 4.6%) per annum. their carrying to value. obligations approximate lease fair value of the Group’s The At 1 January 2008, the Group had total bank facilities of £1,450m available to it under two facility agreements. The first faci The facility it under two to agreements. 1 January bank facilities of £1,450m available At had total 2008, the Group tranches: two and is split into of £1,200m, commitment total • 2010; and on 1 March loan of £600m repayable a term A comprising Tranche • 2010. until 1 March facility of £600m available a revolving B comprising Tranche on 30 July 2011. loan of £250m, which is repayable a term is for facility second agreement The to, but not limited sets of loan documentation, including, of both under the terms be made to required Mandatory are repayments the balance from on the basis of calendar years is analysed above maturityThe profile of certain the net proceeds asset sales. date. 0.4% and 0.75% of between at a variable margin bear interest under the £1,200m facility down agreement drawn borrowings The at 1 January applicable margin The 2008 was 0.525%. LIBOR, dependent on certainabove financial ratios. f revolving The facility. element of the revolving on the undrawn is payable of 37.5% of the applicable margin fee A commitment at 1 January down 2006 - £295m). drawn 2008 was £305m (26 December LIBOR. of 0.90% above margin at a fixed bear interest facility under the second agreement £250m borrowings The and certain of its subsidiaries. the Company by given guarantees by secured are facilityThe agreements The borrowings are repayable as follows: repayable are borrowings The settlement within 12 months amount due for Less: Bank loans 21. and loans overdrafts Bank 20. (continued) leases under finance Obligations 62 William Hill PLC Annual Report & Accounts 2007 Notes to the Group Financial Statements 2 Derivatives andotherfinancialinstruments 22. Bankoverdrafts andloans(continued) 21. the analysis ofthederivative offset) financialinstruments(after purposes: for financialreporting The above table, analysing thedifferent ofderivative types financialinstruments, hasoffset theassetsandliabilities. The Amortised cost ofswapsandcollars Amortised Currency risk £14.4m). Derivative pricingmodelshave beenusedto calculate thesefair The fairvalueofswapsandcollars 2008isestimated entered asanassetof£5.2m(26December 2006asset– into at1January 2008thenotionalprincipalamountunderGroup’s2012. At 1January interest rate collars was£460m. notional principalamounthedgedunderthesearrangements variesbetween £460mand£100mover theperiod to 31December 2012 underwhichthefloatingLIBORrate iscappedatrates between 4.75%and5.5%withfloorsofbetween 3.75%and4.50%. The additiontheGroupIn hasalsoentered into interest rate collars arrangements expiringbetween 31December 2009 and31Decembe £455m. The fixed interest rate underthe swapsvariesfrom 4.4%to 5.34%. £100m over 2008 thenotionalprincipalhedgedunderthesearrangements theperiodto was 31December 2012.At 1January interest payable isswappedfor fixed rate payments. The notionalprincipalhedgedundertheseswapsvariesbetween £455mand The Group hasentered into anumberofinterest ra The Group usesinterest rate swapsandcollars to manageitsexposure to interest rate movements onitsbankborrowings. Interest rate hedgingarrangements note for derivative financialinstruments. Antepost betsare arisingfrom aliability anopenpositionatthebalance sheetdate inaccordance withtheGroup’s accounting Antepost bets Derivative financialinstruments–liabilities Derivative financialinstruments–assets Unrecognised valueofswapsandcollars Antepost bets borrowings. oftheGroup,capability there isnosignificant difference between bookandfairvalueoftheGroup’s bankfacilitiesandothe opinionthatdueto theGroup’s borrowings to floatinginterest isthedirectors’ beingsubject ratesIt andtheproven cashgen Fair value ofloansandfacilities 2008was£nil(26December 2006–£nil). at1January balance onthisfacility 2008,theGroup hadanoverdraftAt withNational 1January facility Westminster Bankplcof£5.0m(26December 2006-£5.0m). Overdraft facility 2008 for the53weeks ended1January Notes to theGroup Financial Statements disclose separately. assetsandliabilitiesdenominated inothercurrencies. amountsaremonetary Noneofthese currency considered material enough oftheGroup currency issterling.The mainfunctional are Anumber oftransactions inothercurrencies conducted whichgive ri December 2006–(£0.7m))hasbeenreceived ofhedgedinterest inrespect payments received/(made) in theperiod. effective ascashflow hedgesandthefairvaluethereof hasbeendeferred inequity. Anamountof£7.6m(52weeks ended26 te swap arrangements as at 1 January 2008underwhichtheLIBORelement ofth te swaparrangements asat1January values. Alloftheseinterest rate swapsare designat 1 January 1 January 2008 2008 (4.7) (4.7) 0.5 0.5 1.0 5.2 4.2 £m £m 26 December 26 December following is 2006 2006 14.4 13.4 r (5.6) (5.6) ed and £m £m 8.8 8.8 1.0 eration policy se to The to e r Notes to the Group Financial Statements William Hill PLC Annual Report & Accounts 2007 63 ent 1.0 0.9 (1.2) (5.9) (6.0) (19.7) (163.8) (132.9) Amount credited/ Other Other (charged) to (charged) Net foreign currency liabilities Net foreign Net foreign currency assets/(liabilities) Net foreign 0.1 (2.3) (2.2) £m £m £m £m £m £m (0.1) (2.1) (2.2) Rate Amount of statement Sterling currencies Total Sterling currencies Total 0–––– At Acquired change credited/ recognised At £m £m £m £m £m £m 2006 period income to income to expenses 2008 (160.8) (6.8) 11.3 (6.2) (1.3) 27 December during credited (charged) and income 1 January Sterling – (2.1) (2.1) Sterling – (2.3) (2.3) Other currencies (0.1) – (0.1) Other currencies 0.1 – 0.1 Net foreign currency monetary 2006: Net foreign at 26 December liabilities Derivatives (4.0) – – – 2.8 Properties acquired via business combinations acquired Properties (16.8) – 1.6 (4.5) – Accelerated capital allowancesAccelerated (13.4) – 0.4 7.1 – The following are the major deferred tax (liabilities) and assets recognised by the Group and movements thereon during the curr thereon and movements the Group by tax (liabilities) and assets recognised the major deferred are following The and prior period: gainsHeld over benefit obligationsRetirement Licences remunerationShare 7.5 – – 1. (135.1) – – (6.8) (2.5) 0.3 9.0 (4.1) (6.3) – – – Functional currency:Functional Functional currency:Functional Net foreign currency monetaryNet foreign assets/(liabilities) at 1 January 2008: 23. tax Deferred 22. (continued) instruments other financial and Derivatives 64 William Hill PLC Annual Report & Accounts 2007 Notes to the Group Financial Statements 4 Called-up share capital 24. Deferred tax(continued) 23. The Company norightto shares, fixed hasoneclassof ordinary income. whichcarry The shares were oftheCompany’s cancelled duringtheperiodaspart share buybackprogramme. uhrsd-odnr hrso 0 ah80000080.0 – At endofperiod Shares cancelled – ofperiod At start 800,000,000 Called-up, shares of10peach: allottedandfullypaid–ordinary 1.0 Authorised shares of10peach -ordinary (0.6) – – (16.8) 7.5 (13.4) (0.6) – – (5.0) – – Deferred taxassets (2.3) 1.2 0.6 Deferred taxliabilities (6.2) – – – (135.1) – 1.6 – – – 14.8 (18.0) (7.2) Properties acquired viabusinesscombinations Tax losses DerivativesShare remuneration Licences Retirement benefitobligations Accelerated capitalallowances 2008 for the53weeks ended1January Notes to theGroup Financial Statements 0.5––– balances offset) (after purposes: for financialreporting deferredCertain taxassets and liabilitieshave beenoffset intheabove analysis. The following istheanalysis ofthedeferr to calculate theamount ofdeferred tax. The rate ofUKcorporation taxthatwillbeapplicableinApril2008of28%(52weeks ended26December 2006–30%)hasbeenus 8Dcme uigceie cagd noead26December income and (charged) credited during 28 December 128 85 95 (160.8) (9.5) (8.5) – – (142.8) 05pro oicm oicm xess2006 expenses to income to income period 2005 m£ m£ m£m £m £m £m £m £m 5,1,5 35.4 36.2 353,718,759 361,631,253 tAqie hneceie/rcgie At recognised credited/ change Acquired At 79244 (0.8) (7,912,494) Number of hrs£m shares 1 January 2008 1 January –––– 1 January aeAon statement of Amount Rate (163.8) (165.7) 2008 1.9 £m 6,3,5 36.2 39.1 361,631,253 390,738,991 0,0,0 80.0 800,000,000 2,0,3)(2.9) (29,107,738) Number of hrs£m shares charged to 26 December 2006 Amount 45 (4.0) (4.5) 26 December ed tax (135.1) (160.8) (169.3) 2006 £m 8.5 ed Notes to the Group Financial Statements William Hill PLC Annual Report & Accounts 2007 65 for e lue of shares to – 3.1 2.9 6.0 0.8 £m £m £m £m 6.8 12.5 10.6 (57.5) (46.9) 311.3 (34.4) (311.3) At 28 December 2005 and 27 December 2006 and 27 December 2005 28 December At Own held at 1 January – £0.6m) held in treasury (nominal value shares 6.5m shares purchased £34.4m comprise 2008 amounting to purchased Trust Benefit Hill Holdings 2001 Employee William The (nominal value – £0.003m) held in £34.4m and 0.003m shares for 1 January of £5.32. At price va market 2008 the total average at a weighted purchased held in treasury shares were The £0.004m. was £34.0m. Trust held in treasury shares and in the own Transfer of own shares to recipients to shares of own Transfer January 1 2008 At At 28 December 2005 28 December At recipients to shares of own Transfer The merger reserve arose following a group reorganisation in 2002 in preparation for the flotation of the Company. for in 2002 in preparation reorganisation a group following reserve arose merger The At 28 December 2005, 27 December 2006 and 1 January 2005, 27 December 2008 28 December At (26.1) At 27 December 2006 27 December At the nominal value of those and represents issued shares of previously on the cancellation reserve arose capital redemption The cancelled. 2006 27 December At At 1 January 2008 At Shares cancelled (note 24) (note cancelled Shares At 28 December 2005 28 December At 24) (note cancelled Shares At 1 January 2008 At Share premium cancelled cancelled premium Share The share premium reserve records the excess of the cash actually received on the issue of shares over the nominal amount of th the nominal amount over on the issue of shares the cash actually of received the excess reserve records premium share The its transfer allowing On 20 June 2007 the High premium, Court capital issued. the reduction in share confirmed share Justice of earnings. retained 28. Own shares 27. reserve Merger 26. reserve redemption Capital 25. premium Share 66 William Hill PLC Annual Report & Accounts 2007 Notes to the Group Financial Statements 0 Retainedearnings 30. Hedgingandtranslation reserves 29. xes eonsdi epc fsaermnrto 2.6 (8.1) 12.9 3.0 (9.7) 16.7 At 2008 1January Movements dueto onreserves transfer ofown shares to recipients 3.2 Cancellation ofshare premium (note 25) Expense recognised ofshare inrespect remuneration 2.8 Shares purchased andcancelled (7.6) Deferred taxarisingthereon gainrecognisedActuarial inthepensionscheme 0.2 9.4 Net profit for theperiod (4.5) 0.7 – Dividends paid(note 10) – At 27December 2006 (1.1) Movements dueto onreserves transfer ofown shares to recipients 3.0 – (1.6) SIS share buyback – – Expense recognised ofshare inrespect remuneration 0.2 2.8 (7.6) Shares purchased andcancelled Deferred taxarisingthereon – 14.3 gainrecognisedActuarial inthepensionscheme 9.4 – (4.5) Net profit for theperiod 0.7 0.2 Dividends paid(note 10) At 28December 2005 – (1.1) (1.6) – changes intheexchange rate. 14.3 qualified to bedeferred to equity. The records translation reserve themovement ofthefairvalueoverseas subsidiariesas The hedging records reserve themovements onderivative fair At 2008 1January Exchange differences ontranslation ofoverseas operations Deferred taxarising Transfer to income Change infairvalueofhedging derivatives At 27December 2006 Deferred taxarising Transfer to income Change infairvalueofhedging derivatives At 28December 2005 2008 for the53weeks ended1January Notes to theGroup Financial Statements values, where movements onthefairvalueof thosederivatives hav Hedging Translation eev eev Total reserve reserve m£ £m £m £m (178.4) 248.2 311.3 157.4 166.8 (46.0) (78.5) (99.4) (70.9) (20.2) a result of (4.0) (1.7) (5.0) £m e Notes to the Group Financial Statements William Hill PLC Annual Report & Accounts 2007 67 £6.3m values .3m 6.8 1.1 total cash total 24.7 23.6 24.7 (23.6) (25.2) Book values value Fair value Fair £m £m £m £m £m Jennings Eclipse Total adjustments Group to Intangible assets Intangible & equipment plant Property, tax assetsDeferred 0.5 0.3 0.1 0.2 – 0.6 – consideration Cash 0.3 (0.1) 0.2 23.6 0.5 – 23.9 0.2 Bank loans, cash at bank and in hand acquired cash at bank and in hand Bank loans, (1.6) Retention creditor Retention Deferred tax liabilities tax Deferred – – – (6.8) (6.8) Cash 0.1 – 0.1 – 0.1 Cash consideration Cash Trade and other receivablesTrade and other payablesTrade 2.8 0.1 (2.6) 2.9 (0.3) – (2.9) 2.9 – (2.9) Total consideration Total Goodwill arising consideration Total Total liabilitiesTotal Net assets acquired (2.6) 1.3 (0.3) (0.1) (2.9) 1.2 (6.8) 16.7 (9.7) 17.9 Non-current liabilities Current assets Current assetsTotal liabilities Current Satisfied by: 3.9 0.2 4.1 23.5 27.6 Non-current assets During the period the Group acquired 2 small chains of bookmakers, details of which are given below: given 2 small chains of bookmakers, details of which are acquired During the period the Group Limited Pools) Jennings (Harlow T.H for (‘Jennings’) Limited Pools) Jennings (Harlow T.H capital of all of the issued share On 10 January acquired 2007, the Group consideration of £21.5m including costs of £0.3m. The capitalised goodwill on this transaction was £5.8m. Jennings contributed this transaction capitalised goodwill on The Jennings contributed was £5.8m. of £0.3m. costs of £21.5m including consideration 11 January the period between taxation for 2007 and 1 January before profit 2008. the Group’s and £1.9m to revenue Eclipse BookmakersLimited cash total for capital of Eclipse Bookmakers all of the issued share On 25 January (‘Eclipse’) Limited acquired 2007, the Group £1 goodwill on this transaction capitalised The was £1.0m. Eclipse contributed of £0.1m. costs of £3.2m including consideration 26 January the period between taxation for 2007 and 1 January before profit 2008. the Group’s and £0.2m to revenue arising on these transactions goodwill The is method of accounting. the purchase by for been accounted Both transactions have table sets out the book following The ‘Impairment of assets’. with IAS 36 in accordance subject an annual impairment review to the Group: during the period and their fair value to of the identifiable assets and liabilities acquired Net cash outflows in respect of these acquisitions comprised: in respect acquisitions of these Net cash outflows 31. Acquisitions 68 William Hill PLC Annual Report & Accounts 2007 Notes to the Group Financial Statements 3 Operating leasearrangements 33. Notestothecashflow statement 32. Income taxesIncome paid Cash generated by operations Operating cashflows before movements capital: inworking recognised asanexpenseintheyear: leasepayments underoperatingMinimum leases highlyliquidinvestmentsother short-term ofthree withamaturity monthsorless. Cash andcashequivalents(whichare presented asasingleclassofassetsontheface ofthebalance sheet)comprise cashatb Net cashfrom operating activities Interest paid Adjustments for: Operating profit before exceptional items 2008 for the53weeks ended1January Notes to theGroup Financial Statements Movement onfinancialderivatives Decrease/(increase) inreceivables – other(includinglandandbuildings) Increase inpayables Increase ininventories Movement inprovisions Foreign exchange movement reserve Defined benefitpensioncost lesscashcontributions Cost charged ofshare inrespect remuneration ondisposalofSISsharesGain ondisposalofLBOsandadministration buildings Gain Loss/(gain) ondisposalofproperty, plantandequipment Depreciation ofcomputer software – plant&machinery Depreciation ofproperty, plantandequipment Share ofresult ofassociates andjointventures 53 weeks ended 53 weeks ended 1 January 1 January 310.7 309.5 149.6 286.7 (71.8) (89.3) 2008 2008 43.6 46.9 27.8 (0.9) (0.1) (7.9) (1.7) (5.1) (0.7) 0.2 1.1 0.2 2.6 0.4 8.1 3.3 £m £m – 52 weeks ended 52 weeks ended 26 December 26 December 313.9 301.3 204.6 292.2 (53.9) (11.0) (55.4) 2006 2006 37.5 23.7 41.1 27.1 (0.1) (7.5) (8.1) (4.0) (0.5) (3.6) £m £m 3.0 2.7 3.6 ank and – – – Notes to the Group Financial Statements William Hill PLC Annual Report & Accounts 2007 69 rds or the res s of fter £m 36.1 2006 2006 of grant, d during 334.6 175.3 123.2 Number 135,036 (752,720) 4,735,863 1,265,153 4,052,109 (1,196,187) 26 December 26 December 26 December £m 38.6 2008 2008 357.1 190.8 127.7 43,149 Number 516,084 (167,986) 1 January 1 January 4,052,109 3,087,927 (1,312,280) oup for certain of its LBO, office properties office f and amounts payable certainoup for its LBO, of awards made in the five years from 2003 to 2007; 2003 to from years made in the five awards 2007; 2003 to from years the five made in 2002. Operating lease payments represent rentals payable by the Gr by payable rentals represent lease payments Operating Exercisable at the end of the period Exercisable Exercised during the period Exercised Outstanding at the end of the period Outstanding at beginning of the period Outstanding at beginning The PSP and EBMS provides conditional awards of shares dependent on the Group’s earnings per share growth and Total Shareholder Total and growth earnings per share dependent on the Group’s of shares awards conditional PSP and EBMS provides The Return (TSR) (awa of vesting of the individual at the date employment as continued a three-year period as well performance over 7 November 2002 that were unvested as of 1 January 2005. In the context of the Group’s schemes, this includes items (a) and (b) this includes items schemes, as of 1 January 2005. In unvested the context of the Group’s 2002 that were 7 November employers’ (excluding expense recognised total The in respectabove. in the of these schemes was £2.6m costs) National Insurance ended 1 January 2006 – £3.0m). 53 weeks ended 26 December 2008 (52 weeks award conditional provides LTIP The vest). the awards before voluntarily the Group leaves if the employee usually forfeited are of the individual employment a three-year period and continued performanceTSR over on the Group’s dependent exclusively shares the date from years after a period of ten unexercised if the options remain In the case of both plans, of vesting. at the date the option lapses. during the period Granted during the period Forfeited the sha price, an exercise pay to do not have the recipients and therefore of shares awards conditional are the PSP and LTIP As exercise awards share for of exercise at the date price share average weighted The price. exercise cost in effect, a zero have, 2006 – £5.86). ended 26 December the period was £6.22 (52 weeks The Group had the following share-based payment schemes in operation during the period, all of which will be settled by equity: share-based be settled by all of which will during the period, schemes in operation payment had the following Group The (a) Scheme Bonus Matching (EBMS) encompassing and Executive (LTIP) Plan Incentive Term (PSP), Long Plan Share Performance (b) made in grants encompassing 2002 (SAYE) after 7 November options granted option scheme involving Earn share You As Save (c) Plan (EDIP); and Incentive Director Executive (d) a grant encompassing 2002 (2002 SAYE) 7 November before options granted option schemes involving Earn share You As Save 17 and 18 in the Directors’ on pages provided Details of these schemes are Report. Remuneration a an expense in respect of all grants has recognised in IFRS 2, the Group included provisions with the transition In accordance After five years five After Within one year Within At the balance sheet date, the Group had outstanding commitments for future minimum lease payments under non-cancellable minimum lease payments future for outstanding commitments had the Group sheet date, the balance At follows: which fall due as operating leases, In the second to fifth inclusive In to years the second use of certain equipment. and computer office (a) Scheme Bonus (EBMS) Matching and Executive Plan (LTIP) Incentive Term Plan (PSP), Long Share Performance 34. Share-based payments 33. (continued) arrangements lease Operating 70 William Hill PLC Annual Report & Accounts 2007 Notes to the Group Financial Statements 34. Share-based payments (continued) Share-based 34. b SAYE schemefor grants madeinthefive years from 2003to 2007 (b) Forfeited duringtheperiod Granted duringtheperiod Risk free interestRisk rate Outstanding attheendofperiod savings isentered contract into. The optionsremain valid monthly savings contract. Optionsundertheschemeare granted withanexercise price upto 20%below theshare price whenthe Options undertheSAYE Share OptionScheme, whichisopento alleligible employees, are basedonathree, five orseven year LTIP 2008was£1.4m(52weeks ended26December andEBMSschemesinthe53weeks 2006–£1.9m). ended1January insurance national costs) ofrelevant inrespect option (26December 2006–£2.29). The expenserecognised (excluding employers’ The weighted average fairvalueoftheawards granted underthePSP, LTIP andEBMSschemesatthedate ofgrant was£2.42per the optionvalue. This discount iscalculated basedonanestimate oftheprobability ofachievingtherelevant condition. been adjusted to take into account themarketconditions applicableto theoption(i.e. TSR requirements) by applyingadiscoun estimate, for ofnon-transferability, theeffects exercise andbehavioural restrictions considerations. The valueoftheoption immediately flotation. after The life expected oftheoptionusedinmodelhasbeenadjusted, basedonmanagement’s best on thedate of grant. This ensures thatthevolatility calculation been calculated from aperiodcommencing on20September2002,beingthree thelistingofCompany, monthsafter andending where possibleandwhere thattheCompany thisisnotpossible(dueto thefact wasonlylisted inJune2002),historical volat volatility wasdeterminedExpected by calculatingthehistorical volatility oftheGroup’s shares over aperiodmatching theop lifeExpected volatility Expected 2.2 years (26December 2006–2.6years). 26 December 2006–£6.00). 2008hadaremaining weightedThe optionsoutstandingat1January average life contractual of The weighted average share price atthedate ofexercise for share optionsexercised duringtheperiodwas£6.06(52weeks ende The exercise price for the2003,2004,2005, 2006and2007SAYE schemeswas£1.76, £3.93,£4.57,£4.60and£4.94respectively. Exercisable attheendof the period Exercised duringtheperiod Outstanding atbeginning oftheperiod dividendyield Expected Weighted average exercise price Weighted average share price atdate ofgrant pricingformulaThe oftheseawards inputsintoinrespect theBlack-Scholes-Merton were asfollows: years). The 2008hadaremaining awards weighted outstandingat1January average life contractual of6.9years (26December 2006–7.8 2008 for the53weeks ended1January Notes to theGroup Financial Statements ,2,7 4.94 1,025,674 ,2,3 4.15 2,928,433 3.84 2,527,698 for sixmonthsbeyond theendofrelevant savings contract. 3306 (4.51) (333,076) 2183 (3.89) (291,863) ubr£ Number is notundulyaffected by erratic price movements thatarose –– 1 January 2008 1 January 1 January Weighted 3.5 years exercise average £4.53 4.5% 3.3% 2008 price 27% Nil ,2,0 4.60 1,027,302 ,2,9 3.84 2,527,698 3.08 2,245,758 2136 (3.79) (291,356) 4406 (1.83) (454,006) ubr£ Number 26 December 2006 –– 26 December Weighted 3.5 years exercise average hasalso £4.55 4.4% 3.2% 2006 price 28% tion life Nil ility has ility t to d PSP, Notes to the Group Financial Statements William Hill PLC Annual Report & Accounts 2007 71 ing 006 t were ts ility has tion life 28% price 2006 3.1% 4.7% £4.40 £3.42 average exercise 4.6 years Weighted 26 December 26 December 2006 26 December Number £ 400,000 – (981,480) (0.18) (108,858) (1.80) 4,247,3993,157,061 1.26 1.57 26% price 2008 3.2% 4.7% £4.89 £3.84 average exercise 4.5 years Weighted 1 January grants at the date of grant was £1.44 per option of grant at the date grants 1 January 2008 –– on is not unduly affected by erratic price movements that arose that movements price erratic by on is not unduly affected (46,107) (1.80) Number £ 911,800 1.80 3,157,061 1.57 (2,199,154) (1.47) In accordance with the transition provisions included in IFRS 2, the Group has not recognised an expense in respect of all gran has not recognised in IFRS 2, the Group included provisions with the transition In accordance Expected volatility was determined by calculating the historical volatility of the Group’s shares over a period matching the op matching a period over shares of the Group’s volatility the historical calculating Expected by was determined volatility volat in June 2002), historical was only listed the fact this is not possible (due to that the Company possible and where where and ending months after the listing of the Company, being three on 20 September 2002, a period commencing from been calculated calculati that the volatility ensures This of grant. on the date best based on management’s the option used in the model has been adjusted, of expected life The after flotation. immediately considerations. restrictions and behavioural exercise the effects of non-transferability, for estimate, under these SAYE fair value of the options granted average weighted The ended 1 January in the 53 weeks grants 2008 was SAYE in respect of relevant expense recognised The 2006 – £1.41). (26 December 2006 – £0.8m). ended 26 December £1.2m (52 weeks this includes options schemes, as of 1 January 2005. In unvested the context of the Group’s 2002 that were 7 November before and Singer aris Messrs Harding for arrangement EDIP was an incentive The the 2002 SAYE. the EDIP and to outstanding in relation of the EDIP arrangemen 400,000 shares remaining The option. It cost was structured as a zero out of the flotation of the Group. ended 1 January in the 53 weeks 2008. exercised Outstanding at the end of the period at the end of the period Exercisable Outstanding at beginning of the period Outstanding at beginning during the period Exercised Expected life during the period Forfeited 2 during the period was £6.12 (26 December options exercised share for of exercise at the date price share average weighted The (26 December of 0.7 years contractual life average options outstanding at 1 JanuaryThe weighted 2008 had a remaining – £6.25). 2006 – 1.4 years). Expected dividend yield Weighted average share price at date of grant at date price share average Weighted The inputs into the Black-Scholes-Merton pricing formula in respect of these options were as follows: the Black-Scholes-Merton in respect inputs into of these options were The formula pricing Weighted average exercise price exercise average Weighted Expected volatility Risk free interest rate Risk interest free (c) 2002 schemes 7 November Pre 34. Share-based (continued) payments 72 William Hill PLC Annual Report & Accounts 2007 Notes to the Group Financial Statements 5 Retirement benefitschemes 35. Inflation rate Inflation of increaseRate ofsalaries For thepurposesofpreparing theinformation disclosedintheseacc accrued pensionsright. already inpayment to continue to bepaid, andto thecommitments reflect whichwillarisefrom members’ the purposesofthisfundingvaluationare thattheassumptionsused, takenasawhole, willbesufficiently prudentfor pensio the Trustees andtheCompany, willsetthescheme’s fundingobjective. statutory The general principlesadopted by the Trustees effective date 2007. of30September This valuationisthefirst undernewUKfundingregulations andfollowing discussionsbet 2004. valuation at30September This fundingplaniscurrently underr payment fundingplanagreed ofafive-year withthe Trustee to remove thefundingdeficitdisclosedatlastformal actuaria pensionablepay. addition,during2007theGroup In madeanadditional contribution of£9.4masthethird annu 19.2% ofmembers’ attainment ofaretirement ageof63. The schemeisafundedandtherate ofcompany contributions paidduring2007was employees are entitledto between 1.67%and3.33%offinalpensionablepay retirement for eachyear benefitsvarying ofservice The Group alsooperates adefinedbenefitschemefor eligible employees whichclosedto newmembersin2002.Underthescheme, Defined benefitscheme periodhadnotbeenpaidovercurrent reporting to thescheme. 2008,contributions of£nil(26Decemberspecified intherulesofscheme. oft 2006–£nil)dueinrespect As at1January The total cost charged to income oftheschemerepresents inrespect contributions payable to thisschemeby theGroup atrates employees. The onlyobligationoftheGroup to withrespect thisschemeisto makethespecifiedcontributions. The definedcontribution scheme, to whichboththeGroup andemployees contribute to fundthebenefits, isavailable for allel Defined contribution scheme income andexpense) Defined contribution scheme(charged to operating profit) under thecontrol oftrustees. The respective costs oftheseschemesare asfollows: Ireland. These schemesare operated underasingletrustandassetsoftheschemesheldseparately from thoseoftheGroup inf The Group operates anumberofdefinedcontribution andRepublicof anddefinedbenefitpensionschemesintheUnited Kingdom 2008 for the53weeks ended1January Notes to theGroup Financial Statements Defined benefitscheme(credited to statement ofrecognised investment income) Defined benefitscheme((credited)/charged to otherfinance costs/ Defined benefitscheme(charged to operating profit) expected rateexpected ofinflation. considered in setting thisassumption. growthThe rate expected andpensionincreases ofsalary are set withreference to the differences inthedemand for thisfigure. those bonds, whichcandistort The BankofEngland target inflationrate hasalsobe determined by thedifference between theyieldsonfixed andindex-linked government bondswithanadjustmentto allow for fixedsheet date onhighquality income investments ataterm consistent duration oftheliabilities. with theexpected Price i accordanceIn withtheaccounting standard, thediscount rate hasbeendetermined by reference to marketyieldsatthebalance ofincreaseRate ofpensionsinpayment The financial assumptions used by the actuary indetermining thepresent valueofthedefinedbenefitscheme’sThe financialassumptionsusedby theactuary liabilitieswere Disclosure ofprincipalassumptions cost were costobligation, therelated andthepastservice measured service usingtheprojected unitcredit method. 2008by aqualifiedindependentactuary. 2007andupdated30 September to 1January The present valueofthedefinedbenefit Discount rate ounts, a full actuarial valuationoftheschemewascarried ounts, afullactuarial eview as part oftheformal valuation,whichha actuarial eview aspart 53 weeks ended 1 January 1 January 3.25% 4.25% 3.25% 5.60% (12.9) 2008 2008 (5.9) (1.0) 1.7 6.3 £m 52 weeks ended 26 December 26 December 3.00% 4.00% 3.00% 5.10% (16.7) 2006 2006 nflation is (8.0) he £m en 1.3 0.6 6.8 ns outat s an l : ween igible for unds on al Notes to the Group Financial Statements William Hill PLC Annual Report & Accounts 2007 73 on e: and 0.6 1.8 6.1 0.7 6.8 £m £m £m mined by (4.8) 10.7 2006 2006 2006 2006 (13.7) (25.1) (10.1) (16.7) 206.7 (231.8) 19 years 22 years 26 December 26 December 26 December 26 December 52 weeks ended 52 weeks ended 52 weeks ended 52 weeks 26 December 2006 26 December %£m 6.405.104.40 165.6 15.8 25.3 return value Expected Fair £m £m £m 0.1 6.1 0.2 6.3 (4.9) (1.0) (8.1) (3.3) 11.7 2008 2008 2008 (12.7) (12.9) 229.2 (232.5) 22 years 23 years 1 January 1 January 1 January 1 January 53 weeks ended 53 weeks ended 53 weeks ended 53 weeks 1 January 2008 %£m 6.505.604.50 175.4 19.7 34.1 return value Expected Fair Analysis of the amount recognised in statement of recognised (income) and expenses: (income) of recognised in statement of the amount recognised Analysis the scheme liabilities gains arising on Experience Changes in assumptions underlying the present value of the scheme Changes in assumptions underlying the present Analysis of the amount charged to operating profit: operating to of the amount charged Analysis on pension scheme assets less expected return Actual return Net cost Expected return on pension scheme assets Expected return on pension scheme liabilities Interest Total operating charge Total Current service cost Current service cost Past Corporate bonds Corporate market value of assets Total Deficit in scheme costs: finance to / charged income investment to of the amount (credited) Analysis Present value of scheme liabilities Present Equities Gilts and cash Life ExpectancyLife age 63 at aged 63 Member currently 2008 Following recent studies, which show a faster rate of mortality improvement than had previously been expected, the mortality been expected, of mortality rate than had previously a faster which show studies, improvement recent Following ar liabilities of the accrued a male member underlying the value expectancies life for current The assumption has been updated. Member currently aged 45 Member currently is deter of return expected rate The out in the table below. set are of return assets in the scheme and their expected rate The expected return The sheet date. at the balance bonds and corporate on government available of return taking rates the long term premium”“risk returns historic to regard bonds having on government a suitable applying the return by to equities is calculated expectations. future long-term 35. (continued) benefit schemes Retirement 74 William Hill PLC Annual Report & Accounts 2007 Notes to the Group Financial Statements 5 Retirement benefitschemes(continued) 35. History ofexperience gainsandlosses: History At endofperiod Movement inperiod: At beginning ofperiod Movements inthepresent valueoffairschemeassetsinthecurrent periodwere asfollows: At endofperiod Movement inperiod: At beginning ofperiod Movements inthepresent valueofdefinedbenefitobligationsinthecurrent periodwere asfollows: 2008 for the53weeks ended1January Notes to theGroup Financial Statements Difference return onschemeassets: and actual between theexpected Experience gainsandlossesonschemeliabilities: scheme assets, whichmay ormay notoffset thechangeinassumptions. is notalways addition, changesintheassumptionsmay occur thecase).In atthesametimeaschangesinmarketvalueoft unchanged. practice, In changes inoneassumptionmay beaccompanied by offsetting changesinanotherassumption(althoughthis is illustrated inthetablethatfollows. The illustrationsconsider thesinglechangeshown, withtheotherassumptionsassume ofthepresentThe sensitivity valueofthescheme’s liabilitiesto changesintheprincipalassumptionsusedto measure these ofchangesin assumptions Impact Benefits paid Past cost service Contributions from schememembers Contributions from thesponsoringcompanies Benefits paid gains Actuarial Actuarial (losses)/gains Actuarial Contributions from schememembers Expected returnExpected onschemeassets Interest cost cost Service % ofschemeassets Amount (£m) % ofthepresent valueoftheschemeliabilities Amount (£m) 53 weeks ended 1 January 1 January 1 January 229.3 206.7 232.5 231.8 (13.0) 2008 2008 2008 14.3 12.7 11.7 (5.5) (5.5) (0.1) (0.1) 0% 2% 0.2 1.2 1.2 6.1 4.9 £m £m 2wesedd 52weeks ended 52 weeks ended 6Dcme 27December 26 December 062005 2006 3718.8 13.7 %11% 7% %1% 2% . 2.1 4.8 26 December 26 December 206.7 171.9 231.8 221.2 2006 2006 14.9 13.7 10.1 10.7 (5.1) (5.1) (3.0) d to be liabilities £m £m 0.7 1.2 1.2 6.1 he Notes to the Group Financial Statements William Hill PLC Annual Report & Accounts 2007 75 t of the and not . It is s and – ary ould be 2.8 0.1 0.5 3.4 £m hin the 2006 me to 26 December 52 weeks ended 52 weeks – £m 0.2 2.3 0.1 2.6 2008 1 January 53 weeks ended 53 weeks tion and life expectancytion and life affect these amount materially could Post-employment benefits (employer’s contribution) benefits (employer’s Post-employment Other benefits long-term categories specified in IAS 24 ‘Related Party Disclosures’. Party‘Related Disclosures’. 24 specified in IAS categories Share-based (IFRS 2 charges) payment Short-term employee benefits (including salaries) benefits Short-term employee Remuneration of key management personnel management of key Remuneration each of for in aggregate is set out below the key management personnel of the Group, who are of the directors, remuneration The Joint ventures Joint 2006 £nil), ended 26 December £1.4m (52 weeks certain expenses totalling administrative recharged During the period the Group them. back to on behalf of the joint ventures, incurred 2006 £nil). (26 December the joint ventures 1 January from At 2008 £1.4m was receivable £5.3m, in respec Bank of Scotland totalling the Royal with arrangement a guarantee into 1 JanuaryAt had entered 2008 the Group During the period the Group made purchases of £31.3m (52 weeks ended 26 December 2006 – £27.5m) from Satellite Information Satellite 2006 – £27.5m) from ended 26 December of £31.3m (52 weeks purchases made During the period the Group undertaking, associated 1 January SIS. At Satellite to 2008 the amount payable Services a subsidiary Limited, of the Group’s 2006 – £nil). Services was £nil (26 December Information the Group by Limited been have and will be settled in cash. No guarantees unsecured amounts outstanding are The made at market price. were Purchases or received. given disclosed in this note. Transactions between the Group and its associates are disclosed below. Transactions between the Company between Transactions disclosed below. are and its associates the Group between Transactions disclosed in this note. financial statements. separate in the Company’s disclosed are its subsidiaries and associates transactions Trading Associate 2006 £nil). (26 December the joint ventures to awarded and concessions in various licences contained conditions Transactions between the Company and its subsidiaries, which are related parties, have been eliminated on consolidation and are on consolidation been eliminated parties, have related which are and its subsidiaries, the Company between Transactions If the change in assumptions is in the opposite direction to that shown above, the impact on the defined benefits liabilities w above, If that shown direction to in assumptions is in the opposite the change Assumption rateDiscount in inflationRate increase of expectancyLife 0.1% p.a. by Increase Changes in assumption 0.1% p.a. by Increase longer 1 year Members live to assumed £6m (3%) by Increase £4m (2%) by Increase Impact on defined benefit liabilities £5m (2%) by Decrease of a similar magnitude, again in the opposite direction. the opposite again in of a similar magnitude, benefit scheme the defined held by financial instruments of the risks arising from and extent Nature as at 1 Janu sheet balance and liabilities (pre-tax) assets on the Group’s held are and £232.5m respectively of £229.3m Pension infla rates, interest long term in equity markets, 2008. Movements the Group. from or a reduction in contributions additional contributions, for a requirement rise to give could defined benefit scheme has a The with the Group. consultation following Trustees the is set by strategy investment scheme’s The “riskier” considered therefore are than bonds and variable returns more which produce holding of equitysignificant investments this additional risk. for compensate to a premium will contain that the yield on equity investments accepted generally will shortly the Group be carrying the defined benefit sche for out an asset-liability review Trustees, In conjunction with the based in the structure asset allocation of liabilities wit the optimal long-term determine to and the Group Trustees assist the scheme. 36. party Related transactions 35. (continued) benefit schemes Retirement 76 William Hill PLC Annual Report & Accounts 2007 Parent Company Independent Auditors’ Report responsibilities do not extend to any further informationresponsibilities to any donotextend outsidetheAnnualReport. further 27 February 2008 United Kingdom London AccountantsChartered andRegistered Auditors Deloitte & Touche LLP isconsistent withtheparent company financialstatements. The information given inthe Directors’Report • The parent company financialstatements have beenproperly prepared inaccordance withtheCompanies 1985;and Act • The parent company financialstatements give atrueandfairview, inaccordance Generally withUnited Accepted Kingdom • ouropinion: In Opinion in thepreparation oftheparent company financialstatements, company financialstatements. alsoincludesanassessmentofthe It Practices Board. Anauditincludesexamination,onatest basis, ofevidence relevant to theamountsanddisclosures inthepar We ourauditinaccordance conducted withInternational Standards onAuditing (UKandIreland) issuedby theAuditing Basis ofauditopinion aware ofany apparent misstatements ormaterial inc consistent withtheaudited parent company financialstatements. We read andconsider asdescribedinthecontents whetheritis theotherinformation section contained intheAnnualReport isnotdisclosed. and othertransactions the information andexplanationswe require for ouraudit,orif to additionwe youIn report if, inouropinion,theCompany hasnotkeptproper accounting records, ifwe have notreceived al isconsistent withtheparent company financialstatements. to you whetherinouropiniontheDirectors’Report parent company financialstatements have beenproperly prepared inaccordance withtheCompanies 1985. Act We alsoreport We to you report ouropinionasto whethertheparent company financialstatements give atrueandfairviewwhetherthe audited inaccordance withrelevant requirements legalandregulatory Standards andInternational onAuditing (UKandIreland). to be Report Our responsibility isto audittheparent company oftheDirectors’Remuneration financialstatements andthepart Accepted Accounting Practice) are setoutintheStatement ofDirectors’Responsibilities. financial statements inaccordance withapplicablelaw Accounting andUnited Kingdom Standards Generally (United Kingdom andtheparent company Report theDirectors’Remuneration for preparing theAnnualReport, The directors’responsibilities responsibilitiesRespective ofdirectors andauditors for theopinionswe have formed. responsibility to anyone otherthantheCompany andtheCompany’s membersasabody, for or for ourauditwork, thisreport, andfor nootherpurpose. Tothem inanauditors’report permitted by thefullestextent law, we donotaccept orassume sothatwe mightstateaudit work to theCompany’s hasbeenundertaken membersthosematters we are required to state to ismadesolelyto theCompany’sThis report members, asabody, inaccordance 235oftheCompanies 1985.Our Act withsection thatisdescribedashaving been audited. Report on theinformation intheDirectors’Remuneration We have separately reported ontheGroup financialstatements of William PLC Hill 2008and for the53weeks ended1January These parent company financialstatements have beenprepared undertheaccounting policiessetouttherein. comprise theparent company balance sheet,parent company sta We have audited theparent company financialstatements of William PLC Hill 2008which for the53weeks ended1January To themembersof William PLC Hill Report Parent Company Auditors’ Independent overall ofthepresentation ofinforma adequacy from material misstatement, whethercausedby fraudorotherirregular order to provide uswithsufficientevidence to give reasonable assurance thattheparent company financialstatements are free We ourauditsoasto obtain alltheinformation plannedandperformed andexplanationswhichwe in considered necessary Company’s circumstances, consistently appliedandadequately disclosed. Accounting Practice, ofthestate oftheCompany’s 2008; affairsasat1January tion intheparent company financialstatements. onsistencies withtheparent company financialstatements. Our information specifiedby law regarding directors’remuneration and ofwhethertheaccounting policiesare appropriate to the tement ofaccounting policiesandtherelated notes 1to 14. We consider ifwe theimplicationsfor become ourreport significant estimates andjudgments madeby thedirectors ity orerror.ity forming In ouropinionwe alsoevaluated th ent l e Parent Company Balance Sheet William Hill PLC Annual Report & Accounts 2007 77 – 9.4 6.0 £m (4.0) 36.2 38.2 38.2 2006 (46.4) 311.3 199.8 516.3 516.3 (172.8) 1,794.9 1,794.9 1,622.1 1,660.3 (1,140.0) 26 December – – £m 3.0 6.8 (1.2) 35.4 38.2 38.2 2008 (34.3) 408.8 419.7 419.7 (165.8) 1,700.0 1,700.0 1,534.2 (1,151.5) 1 January 12 Notes

amounts falling due within one year 6 amounts falling due after more than one yearamounts falling due after more 7

Hedging reserveHedging 11 Own held shares 11 Capital redemption reserve redemption Capital 11 Share premium account premium Share 11 Capital and reserves Capital capital share Called-up 10,11 Current assets Current amounts falling due within one yearDebtors: 5 The financial statements were approved by the Board of directors on 27 February 2008 and are signed on its behalf by: signed 2008 and are on 27 February of directors the Board by approved were financial statements The RJ ToppingDirector SP Lane Director Profit and loss accountProfit Equity shareholders’ funds 11 Provisions for liabilities and charges for Provisions Net assets 9 Creditors: assets Net current Investments at bank and in hand Cash 4 Fixed assets Fixed Total assets less current liabilities assets less current Total Creditors: 1,572.4

as at 1 January 2008 Parent Company Balance Sheet Balance Company Parent 78 William Hill PLC Annual Report & Accounts 2007 Parent Company Statement of Accounting Policies amount. Finance costs ofdebtare recognised intheprofit andlossaccount over theterm ofthatdebtataconstant rate onthecarryi Finance costs rates rulingatthatdate. Translation differences arisingare dealtwithintheprofit andloss account. an average assetsandliabilitiesdenominated inforeign rate. Monetary currencies atthebalance sheetdate are atth reported Transactions denominated inforeign currencies are translated into sterling attherate o ruling atthedate ofthetransaction Foreign exchange oreventswhere thatresult transactions inanobligationto pa Deferred taxisrecognised ofalltimingdifferences inrespect thathave originated butnotreversed atthe balance sheetdate tax rates and laws thathave orsubstantively by beenenacted thebalance enacted sheetdate. Current tax,includingUKcorporation taxandforeign tax,isprovided to bepaid (or recovered) atamountsexpected usingthe Tax consideration thatincludestheissueofshares qualifyingfor merger relief. Any premium isignored. Cost ismeasured by reference to thenominalvalueonlyofshares issuedfor investments insubsidiariesacquired for Fixed asset investments are shown atcost lessprovision, ifany, for impairment. Investments ofthe withentitiesthatare part transactions William PLCrelated Hill party Group. PLCHill Group financialstatements. The Company isalsoexempt disclosing undertheterms ofFRS8 ‘Related Parties’from cash flow statement undertheterms ofFRS1 ‘Cash flow statements’. The cashflows oftheCompany are includedinthe William a profit andlossaccount for theCompany alone. The Company hasalsotakenadvantageoftheexemption from preparing a The directors have takenadvantageoftheexemption 230 oftheCompanies available 1985andnotpresented Act undersection Exemptions accountingKingdom standards andcompany law. The financialstatements have beenprepared underthehistorical cost convention andinaccordance withapplicableUnited Basis ofaccounting throughout theperiodandpreceding periodissetoutbelow. GAAP accounting oftheCompany’s standards. Asummary principalaccounting policies, whichhave beenappliedconsistently The unconsolidated financialstatements for theCompany have beenprepared inaccordance withUKlaw andapplicableUK 2008 for the53weeks ended1January Policies Parent Company Statement ofAccounting payments madeintheperiod. Accrued finance costs are included withinaccruals anddeferred income. Debt isinitiallystated ofissuecosts. attheamountof netproceeds deduction after amountisreduced byThe carrying Debt Deferred taxismeasured basis. onanon-discounted to reverse,expected basedontaxrates andlaws thathave orsubstantively by been enacted thebalance enacted sheetdate. Deferred taxismeasured attheaverage taxrates thatare to applyintheperiodswhichtimingdifferences expected are being charged to taxonlyifandwhenthereplacement assetsare sold. Deferred taxisnotrecognised whenfixed assetsare soldanditismore likelythannotthat thetaxablegainwillberolled o underlying timingdifferences canbededucted. can beregarded asmore likelythannotthatthere willbesuitabletaxableprofits from whichthefuture reversal ofthe A netdeferred taxassetisregarded asrecoverable andtherefore recognised onlywhen,onthebasisofallavailable evidence, those inwhichtheyare recognised inthefinancialstatements. stated inthefinancialstatements thatarisefrom the occurred atthebalance sheetdate. Timing differences are differences between theCompany’s taxableprofits anditsresults as inclusion ofgainsandlossesintaxassessmentsperiodsdifferent fr y more taxinthefuture orarightto pay lesstaxinthefutur e have om ver, r at ng it e Parent Company Statement of Accounting Policies William Hill PLC Annual Report & Accounts 2007 79 d, of non-transferability, exercise restrictions and behavioural exercise of non-transferability, swaps and collars. The Company does not enter into speculative into does not enter Company The swaps and collars. also been adjusted to take into account any market conditions any account take into to also been adjusted Fair value is expensed on a straight-line basis over the vesting perio the vesting basis over expensed on a straight-line value is Fair tion payments are taken to the profit and loss account. the profit taken to are tion payments based on the Group’s estimate of shares that will eventually vest and is borne by the employing company within the Group. company the employing and is borne by vest that will eventually of shares estimate based on the Group’s used in the model has been expected life The use of the Black-Scholes-Merton by value is measured pricing formula. Fair the effects for best estimates, on management’s based adjusted, The Company issues equity-settled share-based payments to certain employees within the William Hill PLC Group and operates a and operates Group Hill PLC William issues equity-settled share-based certain within the to Company payments The employees within the employees all eligible option schemes open to share Earn (SAYE) You As Save approved number of Inland Revenue of both of these share-based the Group to cost The at a discount. of shares the purchase which allow Group, Hill PLC William of grant. at fair value at the date is measured payments Share-based payments the value of the option has relevant, Where considerations. the option. applicable to financial statements. 34 of the Group in note share-based given plans are payment descriptions of the Group’s Further Own held shares Own included within reserves. in treasury held trusts are benefit shares employment and held in Derivative instruments utilised by the Company are interest rate rate interest are the Company instruments utilised by Derivative Derivative financial instruments Derivative underlying of an existing the risk profile alter purposes to hedging used for such instruments are All contracts. derivative in or receivable Amounts payable risk management policies. in line with the Group’s Group Hill PLC William of the exposure of the contracts. the period expense over interest as adjustments to recognised are swaps rate respect of interest the underlying cases where in of the underlying exposure the life over spread are made or received payments Termination exist. In to other cases termina continues exposure 80 William Hill PLC Annual Report & Accounts 2007 Notes to the Parent Company Financial Statements .Dividendsproposed andpaid 3. Profit for theyear 2. remuneration andinterests Directors’ 1. Further detailsofdividendspaidandproposed are shown innote 10oftheGroup financialstatements. – prioryear finaldividendpaid – current year interim dividendpaid shares:Equity remuneration isdisclosedinnote 5to for theGroup auditandotherservices financialstatements. The auditors’ £137.3m). the year. William PLC Hill aprofit reported 2008of£29.9m(52weeks for ended 26 December the53weeks 2006 ended1January As 230oftheCompanies permitted by 1985theCompany Act section notto present haselected itsown profit andlossaccount fo Chairman schemes duringthecurrent orpriorperiod. Detailsofdirect The Company hadnoemployees otherthandirectors duringthecurrent orpriorperiod. The Company didnotoperate any pension 2008 for the53weeks ended1January Statements Notes to theParent Company Financial Proposed dividend PLC: The directors hadthefollowing interests, includingfamilyinterests (allofwhichwere shares of beneficial)intheordinary interestsDirectors are describedashaving beenaudited. onpages21to 23,w Remuneration Report ofthesefinancialstatements,which form are oftheDirectors’ part given intheparts having beenaudited. onpages21to 23,whichare describedas Remuneration Report share optionsare provided intheDirectors’ Details ofdirectors’ share options Directors’ No director hadany interest inshares inany otherGroup company. No changestook place 2008and27February intheinterests 2008. ofdirectors between 1January Non-executive directors: Executive directors: Barry Gibson Barry Charles Scott David Allvey Ralph ToppingRalph Ian Spearing Simon Lane David Harding David Edmonds : 1 January Per share 22.25p 14.5p 7.75p 15.5p r’remuneration, share interests, share optionsandotherentitle ors’ 2008 26 December Per share 1 January 19.45p Number 17,231 85,817 13,333 13,556 16,515 12.2p 7.25p 14.5p 2006 1,500 5,000 2008 N/A 1 January 2008 78.5 51.2 27.3 53.8 £m 26 December 26 December Number William Hill 15,556 50,000 85,817 13,333 1,500 5,000 2006 2006 70.9 45.3 25.6 51.2 N/A N/A ments, £m hich r Notes to the Parent Company Financial Statements William Hill PLC Annual Report & Accounts 2007 81 0.1 £m £m heir trade £m 14.4 17.2 2006 2006 172.8 155.6 ounts at 1,794.9 1,780.4 26 December 26 December – – £m £m 5.2 2008 2008 165.8 165.8 1,700.0 1,694.8 1 January 1 January At 27 December 2006 and 1 January 27 December 2008At 38.2 Amounts owed to Group undertakings Group to Amounts owed income and deferred Accruals Amounts owed by Group undertakings Group by Amounts owed Prepayments Amounts falling due within one year: Cost and net book value: Cost which they are stated in the parent company balance sheet. balance company in the parent stated which they are of t and the nature capital their country share of their ownership of incorporation, principal subsidiaries of the Company, The financial statements. the Group 14 to in note shown are It is the opinion of the directors that the total value of the Company’s investment in its subsidiaries is not less than the am in its subsidiaries investment It value of the Company’s that the total opinion of the directors is the Amounts falling due after more than one year included above are £nil (26 December 2006: £nil). £nil (26 December are included above than one year Amounts falling due after more Financial derivatives (note 8) (note derivatives Financial 6. falling due within one year amounts Creditors: 5. Debtors 4. Investments 82 William Hill PLC Annual Report & Accounts 2007 Notes to the Parent Company Financial Statements .Provisions for liabilitiesandcharges 9. Derivatives andotherfinancialinstruments 8. oneyear Creditors: amounts fallingdueafter 7. All deferred taxationarisesonfairvaluesascribed to derivatives. At 2008 1January Deferred taxonhedging movement At 27December 2006 Deferred tax: 2008was£nil(26December 2006£nil). The assetsat1January valueofnetforeign monetary currency Further detailsofderivatives are shown innote 22oftheGroup financialstatements. and similarcontracts, andthestrategies for thathave achievingthoseobjectives beenfollowed duringtheperiod. the Group faces initsactivities. The andpoliciesfor explanationsummarisestheobjectives holdingorissuingfinancialinst Review provides anexplanationoftherole thatfinancialinstrumentshave hadduringtheperiodincreating orchanging theri The Company holdsderivatives andotherfinancialinstrumentsonbehalfofthe William PLC Hill Group. The Operating andFinanc Amount duefor 12months settlementafter (shown undercurrent liabilities) Less: expensesrelating to loan Bank loans Bank overdrafts andloans 2008 for the53weeks ended1January Statements Notes to theParent Company Financial Further detailsofbankloansare shown innote 21oftheGroup financialstatements. Less: amountduefor settlementwithin12months The borrowings are repayable asfollows: In thesecond yearIn In thethird yearsIn to inclusive fifth On demandorwithinoneyear 1 January 1,155.0 1,155.0 1,151.5 1,155.0 1,151.5 2008 (3.5) £m – – – 26 December 1,145.0 1,145.0 1,140.0 1,145.0 1,140.0 ruments 2006 (1.2) (5.0) (4.0) £m £m 2.8 – – – sks that ial Notes to the Parent Company Financial Statements William Hill PLC Annual Report & Accounts 2007 83 26 December 2006 26 December shares £m Number of (29,107,738) (2.9) 800,000,000390,738,991 80.0 361,631,253 39.1 36.2 option share period Number of Price shares undershares per Exercise 1 January 2008 shares £m Number of (7,912,494) (0.8) 353,718,759 35.4 361,631,253 36.2 Note 34 to the Group financial statements has further financial statements on these schemes. the Group 34 to information Note SAYE 2007SAYE 974,991 £4.94 2010 and 2015 Between Long Term Incentive Plan (2003)Plan Incentive Term Long (2004)Plan Incentive Term Long Bonus 2004Operating (2005) Plan Share Performance (2006) Plan Share Performance Scheme Benefit Matching (2007)Executive 2002SAYE 2003SAYE 2004SAYE 2005SAYE 2006SAYE 20,849 22,300 505,981 1,692,220 – 846,577 29,255 – Between 2006 and 2013 – – Between 2007 and 2014 Between 2010 and 2017 – – Between 2008 and 2015 Between 2009 and 2016 Between 2008 and 2015 911,800 529,343 220,341 £1.80 421,517 £1.76 782,241 2005 and 2010 Between £3.93 2006 and 2011 Between £4.57 2007 and 2012 Between £4.60 2008 and 2013 Between 2009 and 2014 Between Shares repurchased and cancelled repurchased Shares end of period At Authorised – ordinary of 10p each shares Authorised 800,000,000 80.0 Called-up, allotted and fully paid – ordinary of 10p each shares Called-up, startAt of period buyback program. share during the period as part cancelled of the Company’s were shares The which carry income. has one class of ordinary fixed shares, no right to Company The Options Share shown schemes as option and award under various share ordinary of the Company subscribe for shares to been granted Options have below: 10. capital share Called-up 84 William Hill PLC Annual Report & Accounts 2007 Notes to the Parent Company Financial Statements 14. Related party transactions Related party 14. Financial commitments 13. funds Reconciliation ofmovements shareholders’ inequity 12. Reserves 11. Deferred taxonderivatives Transfer to income onderivatives transactions withcompanies withinthe transactions William PLC Hill Group, whichare related parties. The Company advantageoftheexemption notto disclose granted istaking by paragraph 3(c) ofFRS8 Disclosures’ ‘Related Party Details ofbankguarantees given to theGroup’s jointventures are shown innote 36oftheGroup financialstatements. The 2008(26December Company 2006–£nil). operating leasesat1January hadnocommitments under non-cancellable The Company 2008(26December 2006–£nil). hadnocapitalcommitments at1January 419.7 408.8 funds shareholders’ Closing equity 3.0 funds shareholders’ toNet reduction equity – Movement dueto onreserves transfer ofown shares to recipients (34.3) 4.4 Deferred taxonchangeinfairvalueofderivative 311.3 6.8 shares purchasedOwn duringperiod (7.7) (46.0) – Dividends paid – Profit for thefinancial period 516.3 – (46.0) fundsaspreviously reported shareholders’ Opening equity – 199.8 – 35.4 12.1 9.4 – – – (46.4) (311.3) ofJustice confirmed inshare thereduction Court premium,On 20June2007,theHigh allowing itstransfer to retained earnings 6.0 0.8 – – At 2008 1January 311.3 – Dividends paid – 36.2 (0.8) Change infairvalueofderivatives Transfer ofown shares to recipients Share premium reserve Shares repurchased andcancelled Retained profit for thefinancialperiod At 27December 2006 2008 for the53weeks ended1January Statements Notes to theParent Company Financial Change fairvalueofderivative aldu hr aia On Profit and Own Share Capital Called-up aia con eev edrsreacutTotal account reserve held reserve account capital hr rmu eepin hrsHdig loss Hedging shares share premium redemption m£ m£ m£ £m £m £m £m £m £m £m ––––2.8–2.8–––– –––––(78.5)(78.5)–––– ––––– 1 January 419.7 516.3 (96.6) (46.0) (78.5) 2008 29.9 (9.2) 4.4 2.8 £m 76 (7.6) – (7.6) 16 (1.6) – (1.6) 9929.9 29.9 26 December (100.1) (178.4) 516.3 137.3 616.4 (70.9) 2006 15.0 (4.5) £m 1.4 . 5 year summary William Hill PLC Annual Report & Accounts 2007 85 r to 1 (restated) UK GAAP 1 – (7.5) – – £m £m £m £m IFRS IFRS UK GAAP 2006 2005 2004 2003 £6.63 £6.24 £5.68 £4.30 235.4166.8 174.6 113.1 207.4144.0 149.8 169.5 97.4 124.3 82.1 68.7 £5.35 £4.85 £4.20 £1.93 894.2292.2 805.3 245.0 N/A 234.1 N/A 200.4 292.2 218.1 234.1 200.4 190.5 248.6190.5 250.4 248.6325.0 317.4 250.4 269.8 317.4 251.5 221.7 45.5p44.9p 29.0p 28.6p 36.5p 35.9p 29.7p 29.3p (181.4) (143.7) (203.6) (187.1) 19.45p 17.1p 14.5p 9.3p 1,563.5 1,528.1 858.1 834.1 (1,335.6) (1,225.7) (486.2) (398.3) 13,235.9 10,746.1 8,287.7 5,945.8 – £m IFRS £6.76 209.2 157.4 107.5 £4.80 940.4 286.7 265.8 325.2 233.1 233.1 44.3p 47.4p (148.5) 22.25p 1,595.2 (1,321.1) 14,792.3 2

Non current assets Non current assets Current liabilities Current Net assets Equity Long term provisions term Long Non-current liabilities Assets employed: Assets Profit from operations before exceptional items exceptional operations before from Profit Revenue (including associates) Amounts wagered Financed by: Financed Profit from operations after exceptional items items after operations exceptional from Profit (including associates) amortisation and excludes exceptional items and impairment of goodwill. items amortisation exceptional and excludes The amounts for 2003 to 2004 are stated on the basis of UK GAAP because it is not practical to restate amounts for periods prio amounts for basis of UK GAAP because it is not practical on the restate stated to 2004 are 2003 to amounts for The the date of transition to IFRS. The principal differences between UK GAAP and IFRS have been discussed in note 37 to the 2006 37 to been discussed in note UK GAAP and IFRS have between principal differences The IFRS. to of transition the date financial statements. Group Share price – high price Share Dividends per share have been presented on a paid basis in line with IFRS. on a paid basis in line been presented have Dividends per share Share price – low price Share Diluted earnings per share (post-exceptionals) earnings per share Diluted (paid) Dividends per share Basic earnings per share (pre-exceptionals)Basic earnings per share 2 1 Profit for the financial period for Profit Profit before tax before Profit sheets: Summarised balance Summarised results: Unaudited 2007 5 year summary 5 year + EBITDA represents profit on ordinary activities before finance charges, tax, depreciation, share remuneration charges and charges remuneration share tax, depreciation, charges, on ordinary finance profit activities before represents EBITDA + Key statistics: Key (£m) + EBITDA 86 William Hill PLC Annual Report & Accounts 2007 Glossary Sportsbook Bets accepted on sporting andotherevents Betsaccepted onsporting Satellite Information Services (Holdings) Limited oritssubsidiary Satellite Information Services The Company anditssubsidiaries, orany may ofthem,asthecontext require Association Remote Gambling Licensed bettingoffice William ortheGroup Hill Sportsbook SIS RGA Total customer stakeslesscustomer winnings attributableto betstakenonhorseracing andpayable A levy to theHorserace BettingLevy Board, LBO Horse racing levy charged by Aduty theUKGovernment of15%abookmaker’s gross win,introduced inOctober Gross win Gross profit taxorGPT ofCulture, Department andSport Media The Commission The legislation Gambling for whichreceived Great bodyfor Britain,theregulatory Royal casinos, Ascent bingoclubs, in2005regarding gaming themodernisationoflaws relating William PLC Hill Commission Gambling Limited, company Afternoon Greyhound anonprofit Services making setupby Bookmakers various Association ofBritishBookmakers Act Gambling DCMS Company BAGS ABB Glossary Limited, requires asthecontext racecourse amenities certain primarily for purposesofaugmenting theprize moneyavailable for winninghorsesandproviding 2001 National Lottery) machines, betting, remote gamblingandlarger lotteries (includingalllocallotteries butexcluding the to betting andgamingwithintheUK including bookmakers, William Hill Shareholder Information and Professional Advisers William Hill PLC Annual Report & Accounts 2007 87 ss D8 nder ta will also 02 - May – 2008 15 - May – 2008 30April - – 2008 Capita IRG Capita (Registrars) Northern House Park Woodsome Bridge Fenay Huddersfield Yorkshire West HD8 OLD Citigroup and Advisors (Financial Stockbrokers) Corporate Centre Citigroup Square 33 Canada E14 5LB London Brunswick Group Ltd Ltd Brunswick Group Relations) Public (Financial Inn Fields 16 Lincoln’s WC2A London 3ED

Deloitte & Touche LLP Touche Deloitte & (Auditors) Hill House 1 Little New Street EC4A 3TR London 0LA (www.capitaregistrars.com). Telephone 0870 162 3100. Telephone 0LA (www.capitaregistrars.com). Capi certificate. or loss of share of shares transfer address, change of name or any regarding advice contact for Please Capita dividends. details for hold and the payment you queries on the number of shares to respond be able to details of the dividend Full Hill Shares. William additional purchase used to be dividend to your instructions for give may You u (www.williamhillplc.co.uk) website Relations section plan (‘DRIP’) of our corporate in the Investor can be found reinvestment contact section. Capita Alternatively forms downloadable within the can be found of mandate and a form information shareholder Registrars. Advisers Professional Registrar H Yorkshire, West Huddersfield, Bridge, Fenay Park, Woodsome Northern Registrars, House, is Capita company of the registrar The Financial Calendar Financial announcementPreliminary ex-dividend date Final - 2008 27 - February

William Hill listed on the London Stock Exchange on 20 June 2002 and the share price on listing was 225p. Shareholders can acce Shareholders on listing was 225p. price and the share on 20 June 2002 Exchange Stock Hillon the London listed William at www.williamhillplc.co.uk price share the current at www.williamhillplc.co.uk shop locator our go to you to find the shop closest To final dividend for date Record AGM final dividend for date Payment 05 - June – 2008 Shareholder Information Shareholder international presence through its online business and its joint ventures in Spain and Italy. is a market leader in all major betting channels in the UK with an established It greyhound stadia. licensed betting offices and operating online casino, poker and games sites as well as two well as offering amusement with prizes machines and fixed odds betting terminals in and other events, as bets on a wide range of sporting offeringservices, odds and taking Founded in 1934, William is one of the leading providers Hill of fixed odds bookmaking williamhillgames.com Interactive Channels : Interactive Telephone Channels : williamhillcasino.com williamhillbingo.com williamhillpoker.com Debit: 0800 44 40 40 Credit: 0800 289 892 Corporate Website: williamhillplc.co.uk Nearly 2,300 shops williamhillskill.com mobile.willhill.com williamhill.co.uk Retail Channel : Annual Report & Accounts 2007

William Hill PLC Greenside House 50 Station Road Wood Green London N22 7TP

Tel: 020 8918 3600 Fax: 020 8918 3775 Reg No: 4212563 England