Savills plc Report and Accounts 2007

Leading International Property Advisers Financial Highlights

Revenue Underlying pre-tax profits† £650.5m +26%* £85.5m +14%* 03 £272.7m 03 £32.5m 04 £316.6m 04 £43.9m 05 £373.9m 05 £57.2m 06 £517.6m 06 £75.0m 07 £650.5m 07 £85.5m

Underlying basic earnings per share† Pre-tax profits 46.1p +13%* £85.9m +2%* 03 18.9p 03 £34.1m 04 27.5p 04 £50.2m 05 33.3p 05 £58.6m 06 40.8p 06 £84.4m 07 46.1p 07 £85.9m

Full year dividend Five year total shareholder return 18p +13%* 398% 03 6.8p 03 350% 04 9.25p 04 174% 05 12.0p 05 506% 06 16.0p 06 898% 07 18.0p 07 398%

Figures for 2003 were not prepared under IFRS. * Percentages are from 2006. † Underlying Group profit is calculated by adjusting reported profit before tax to deduct profit on disposals of £0.7m (2006: £5.1m), share-based payment adjustment of £4.8m (2006: £6.1m) and add back amortisation of intangibles and impairment of goodwill and available-for-sale investments of £5.1m (2006: £1.8m). 01 Savills plc Introduction Report and Accounts 2007 Delivering consistent results

Delivering record results

Savills is one of the world’s leading property advisers, made up of outstanding individuals with real expertise and passion for what they do. Our international perspective, strong track record with world-class clients, and dedication to excellent service ensure that we are a leading property services company, both on a global scale, and in our local markets. This powerful combination has also allowed us to deliver continued growth.

Leading World-class Outstanding Full service markets clients individuals provision globally +++

Page: 02 Page: 04 Page: 06 Page: 08 02 Savills plc Introduction Report and Accounts 2007 Leading markets globally Operating in leading global markets

Savills has kept pace with the rapid growth and globalisation of property investors, developers and occupiers and has established itself in many of the world’s leading real estate markets including: Australia, Belgium, China, France, Germany, Greece, Hong Kong, Hungary, Ireland, Italy, Japan, Korea, Macau, Netherlands, Poland, Singapore, Spain, Sweden, Taiwan, Thailand, UK and US.

With over 180 offices globally.

For a full list of offices please refer to pages 139 to 144.

US

Savills Granite is a property investment banking firm, offering services in investment sales, debt and equity placement and advisory work handling assignments throughout the United States, Canada and the Caribbean basin.

Revenue £3.7m* Offices 1 Number of staff 23

*For the five months from acquisition on 31 July 2007. 03 Savills plc ChapterIntroduction Report and Accounts 2007 SectionLeading markets globally UK Rest of Asia Europe Pacific

Established in 1855 by the land agent, surveyor and Savills has an established presence throughout Europe. Since the acquisition of First Pacific Davies in 2000, auctioneer Alfred Savill, Savills now offers a full range of Each office operates first and foremost within its local Savills has grown its presence in China and other key professional property and support services in the market, familiarising clients with all issues integral to Asian financial sectors, providing commercial and commercial and residential property, financial services property decisions. residential property services. We are one of the major and fund management sectors. property providers in this region.

Revenue £405.6m Revenue £74.2m Revenue £167.0m Offices 111 Offices 33 Offices 40 Number of staff 3,192 Number of staff 729 Number of staff 14,085 04 Savills plc Introduction Report and Accounts 2007 World-class clients

Working with world-class clients

Savills track record at the premium end of the property spectrum in both the commercial and residential markets has allowed us to build a strong reputation among our world-class clients. They expect local expertise, quality service and an international perspective. 05 Savills plc Introduction Report and Accounts 2007 World-class clients 06 Savills plc Our Focus Report and Accounts 2007 Outstanding individuals 07 Savills plc Our Focus Report and Accounts 2007 Outstanding individuals Delivered by great people

Savills people have a commitment to deliver results for their clients, a drive to succeed, a passion for Savills and property and invaluable experience in their areas of specialisation.

With over 18,000 employees worldwide. 08 Savills plc Introduction Report and Accounts 2007 Group Profile Providing a full range of advisory services

Business segments Services Financial performance

Commercial agency Farm and estate agency Transactional Advice and investment Retail and leisure Residential agency, Hotels and healthcare letting and investment Institutional Total revenue £304.1m Professional property services relating to the sale, purchase or letting of commercial Development Purchasing advice Revenue increase 23% and residential property. Auctions New homes

Consultancy Valuation Landlord and tenant Building consultancy Planning Housing consultancy Research Total revenue £141.5m Affordable housing and student Revenue increase 43% Provision of a wide range of professional property consultancy services. accommodation

Property Management Facilities management Commercial management Land and farm management Total revenue £159.7m Management of commercial, residential and agricultural property for owners. Provision of a comprehensive range of services to occupiers of property, ranging from strategic Revenue increase 16% advice through project management to all services relating to a building.

Residential mortgage Financial Services broking services Commercial debt broking services Total revenue £29.8m Insurance services Revenue increase 11% Mortgage broking, financial planning and corporate finance advice. Financial planning services

Property investment Fund Management products Discretionary and advisory portfolio management Total revenue £15.4m Investment management of commercial and residential property portfolios for Revenue increase 114% institutional or professional investors, on a pooled or segregated account basis.

Savills plc

Total revenue £650.5m Revenue increase 26% Employees 18,029 (weighted average) 09 Savills plc Introduction Report and Accounts 2007 Group Profile

Geographic breakdown

UK Rest of Europe Asia Pacific US £194.4m £45.4m £60.6m £3.7m 11% 39% 53% n/a £114.4m £10.7m £16.4m 40% 102% 43%

£51.6m £18.1m £90.0m 18% 77% 8%

£29.8m 11%

£15.4m 114%

£405.6m £74.2m £167.0m £3.7m 21% 54% 24% n/a 3,192 729 14,085 23 10 Savills plc OurChapter Business GroupSection Profile Savills pre-lets new HQ building at record rent for prestigious business park

UK Uxbridge Business Park, Thames Valley

Acting for Goodman, our team leased 84,000 sq ft at third pre-letting, following on deals which attracted Uxbridge Business Park to Cadbury Schweppes plc both Bristol Myers Squibb and Amgen to Uxbridge. for its new headquarters building, achieving a record Building 3 is one of a family of four buildings at the headline rent for the Park of over £31 per sq ft. Park. A contemporary building, it features a full height atrium and large floor plates (in excess We have enjoyed a long and successful involvement of 30,000 sq ft) perfectly suited to modern with Goodman (previously Arlington) and the Park, working practices. having advised on the purchase of the site from Sanderson, the fabric and wallpaper company, Uxbridge Business Park is a prestigious location set who had occupied it since the 1920s. We have since within 90 acres of parkland, uniquely within a town advised on the master-planning, marketing and centre. It is only a five minute walk from the retail leasing of more than 230,000 sq ft. This latest amenities and tube station of Uxbridge. success, which sees Cadbury Schweppes relocate from Central London to Building 3 at the Park, was the 11 Savills plc Our Business Report and Accounts 2007 Contents Our Business

Our Business

Chairman’s Statement 12 Review of Operations 16 Financial Review 50 Risks and Uncertainties Facing the Business 54 Our Responsibilities 58

Our Governance

Board of Directors 66 Directors’ Report 68 Corporate Governance Report 70 Remuneration Report 75 Directors’ Responsibilities 84 Independent Auditors’ Report 85 Our Results

Consolidated Income Statement 88 Balance Sheets 89 Statements of Cash Flows 90 Statements of Recognised Income and Expense 91 Notes to the Financial Statements 92 Savills’ UK and International Offices 139 12 Savills plc Our Business Report and Accounts 2007 Chairman’s Statement Chairman’s Statement

2008 will be a challenging year for the property industry worldwide. However, not all segments and geographies will be affected equally. With its broad range of services, its high quality staff and its geographic spread Savills is well placed to seize the opportunities.

Underlying results Reported results

Underlying Group profit before tax* Revenue £85.5m (2006: £75.0m) +14% £650.5m (2006: £517.6m) +26% Underlying basic earnings per share Group profit before tax 46.1p (2006: 40.8p) +13% £85.9m (2006: £84.4m) +2% *Underlying Group profit is calculated by adjusting reported profit before tax to deduct profit on disposals of £0.7m (2006: £5.1m), Basic earnings per share share-based payment adjustment of £4.8m (2006: £6.1m) and add back amortisation of intangibles and impairment of goodwill and available-for-sale investments of £5.1m (2006: £1.8m). 45.5p (2006: 46.3p) -2% Total dividend 18p per share (2006: 16p) +12.5% Shareholders’ funds £223.6m (2006: £212.8m) +5% 13 Savills plc Our Business Report and Accounts 2007 Chairman’s Statement

On 18 October 2007, we announced the retirement after 18 years of Aubrey Adams, Group Chief Executive, which will take effect from the AGM on 7 May 2008. Aubrey joined Savills in 1990 and was appointed Managing Director in 1991. Under Aubrey’s leadership Savills has become a leading global property advisory business with revenues growing from £24m in 1992 to over £650m in 2007. A loss of some £2.3m in 1992 has been transformed into a profit of £86m this year and the Company is now a constituent of the FTSE 250. I would like to thank Aubrey on behalf of all our staff, clients and shareholders for the significant role that he has played in expanding our business. We engaged outside advisers to assist us in the appointment of Aubrey’s successor and a number of candidates were interviewed. I was pleased to announce that Jeremy Helsby will succeed Aubrey as Group Chief Executive. Jeremy joined Savills in 1980 and has successfully developed the UK Commercial business from revenue Despite turmoil in the financial markets and the consequent effects on property of £47m in 2001 to over £142m in 2007. Jeremy has also led the growth of our investment markets, Savills had an excellent 2007, producing a record result. Continental European business, establishing 13 Savills offices and associations in This outstanding achievement reflects the significant efforts over the last few eight countries over the past seven years. I look forward to working with Jeremy in years to broaden our geographical spread and diversify our business lines. his new role. Results After Aubrey Adams’ retirement, the Board will comprise a Non-Executive Chairman, The Group’s underlying profit before tax was £85.5m, a 14% increase on 2006. four Independent Non-Executive Directors and five Executive Directors, which the Revenue increased by 26% to £650.5m. Reported profit before tax was £85.9m Board considers is an appropriate balance and meets the present needs of the (2006: £84.4m). Group. The Non-Executive Directors have a wide range of business experience and expertise and provide a strong independent element to the Board. However, the Dividends Board will keep under review the need for any changes in the structure of the Board. The Board has recommended an increase in the final dividend for 2007 of 9% to 12p per share to those shareholders on the register on 11 April 2008, payable on Our people 14 May 2008. This gives a total ordinary dividend for the year ended 31 December Savills’ continued growth is a result of the committed and dedicated efforts of our 2007 of 18p (2006: 16p). In the five years to 31 December 2007 underlying earnings people whose continued ability to provide a professional service to our clients is the have increased by an average of 24% per annum and dividends by an average of basis for the excellent results achieved; I thank them all for their dedication and hard 29% per annum. work. Our reward system, which is essentially based on team profit performance, is an important mechanism in providing a balance between the interests of staff Major acquisitions and shareholders and is more fully described in the Remuneration Report on In 2007, as part of our continuing strategy both to grow geographically and add pages 75 to 83. greater diversity to the Group, we acquired Granite Partners LLC in the US for an initial consideration of US$54m to form Savills Granite. This means that we can now Strategy offer clients commercial investment sales, debt and equity placement and advisory Our strategy remains unchanged and Jeremy Helsby outlines his priorities in his services in the US and gives us a platform from which to grow progressively the range Group Chief Executive (Designate’s) message. of services we can offer to both US clients and for those with an interest in the US. Outlook Our acquisition of Hepher Dixon Limited at the beginning of the year for 2008 will be a challenging year for the property industry worldwide. However, not £5.1m enabled our planning business to become a major force in London and all segments and geographies will be affected equally. With its broad range of across the regions. services, its high quality staff and its geographic spread Savills is well placed to seize the opportunities. We continued to build our UK residential network with a number of acquisitions including that of Christopher Rowland Limited. The outlook for our UK and US Commercial Capital Markets businesses and our UK Residential and Mortgage Broking businesses, continues to depend on how quickly Share buyback programme confidence returns to financial markets. Our Transactional businesses in Europe and At the last Annual General Meeting shareholders gave authority for a limited purchase Asia continue to be more resilient. Demand for our Consulting, Property Management of Savills shares for cancellation of up to 10% of the issued share capital. During the and Fund Management services remains strong in all our markets across the world. year ended 31 December 2007, 3.5m shares, representing 2.6% of issued share capital were repurchased for cancellation under this programme. The Company may make further purchases of shares under this authority up to the Annual General Meeting (AGM) to be held on 7 May 2008. As in previous years, shareholders will again be asked to consider a resolution to approve the repurchase of shares at this year’s AGM. Board and staff I am delighted to welcome Mark Dearsley, who was appointed as Group Finance Director with effect from 3 September 2007. Details of the Board, its Committees and their composition are outlined on pages 66 to 67 and in the Corporate Governance Peter Smith Report on pages 70 to 74. Chairman Savills Sweden advises on acquisition of major hotel and conference centre in Stockholm’s central business district

Sweden Stockholm Waterfront, Stockholm

Advised by Savills Sweden, the Norwegian Stockholm Waterfront comprises a large hotel and insurance company Vital has acquired the prestigious conference centre located in Stockholm’s CBD, close Stockholm Waterfront from a consortium of JARL to all facilities and immediately adjacent to the central Asset Management, NIAM and CarVal investors. railway station and the City Hall. When it is completed in the autumn of 2010, Stockholm Waterfront will A subsidiary of DnB NOR, Vital is seizing the offer first class conference facilities for 3,000 visitors opportunity to invest in a strong asset within together with a business hotel providing 418 high a robust business market. Stockholm’s CBD has quality rooms. Rezidor has signed a 20-year lease undergone significant development over recent for the entire hospitality complex. years and Scandinavia as a whole is experiencing good economic performance.

Review of Operations

Aubrey Adams, Group Chief Executive (left) Jeremy Helsby, Group Chief Executive (Designate) (right) 17 Savills plc Our Business Report and Accounts 2007 Review of Operations

Group Chief Executive (Designate’s) message In my first message to shareholders I would like to thank Aubrey for his huge contribution to the success of Savills over the last 18 years. I take over from Aubrey at a time when we announce another set of record results for Savills. However, looking forward we are experiencing unsettled and volatile market conditions in many of the markets in which we operate across the globe. Making accurate predictions for Savills’ future trading therefore is difficult. I hope that with the benefit of my 28 years at Savills and of my experience of working for different Savills subsidiaries in many different markets and countries, that I am well placed and have the experience to guide the Group successfully through these challenging times. I strongly believe that Savills’ unique culture will be its greatest asset in the times ahead. This culture is embodied in the Savills brand and sets us apart from our competitors. Our clients understand that the Savills brand represents the best people, a premium service that is creative and entrepreneurial, and one that is dynamic and distinctive. This culture combined with the very high quality of Savills staff across the My vision for Savills for 2008 and globe, our strong financial position and emphasis on cost control will ensure that we are well placed to take advantage of the opportunities that might arise in the months beyond is for the Savills brand to be ahead as a result of the volatile financial markets. The challenge will be to prioritise all these opportunities to maximise shareholder value the market leader. We have a brand in both the short and long term. Our strategy will be to continue to grow globally but that is the envy of our competitors also to build on the significant acquisitions and recruitment that we have made over the last two years. Our aim is to continue to diversify our income earnings globally and one I am determined to grow, to reduce our reliance on the UK market, which currently represents a significant percentage of our earnings. nurture and expand across the globe. My vision for Savills for 2008 and beyond is for the Savills brand to be the market leader. We have a brand that is the envy of our competitors and one I am determined to grow, nurture and expand across the globe. I have a passion for Savills, a passion that is shared by all who work for Savills, from our graduates, where for the second Group Chief Executive’s review year running we were voted the ‘Graduate Employer of Choice for Property 2007’ Underlying pre-tax profits increased from £75.0m to £85.5m and reported IFRS by The Times, right up to our Executive Board, whose loyalty and passion is pre-tax profits increased from £84.4m to £85.9m. In the UK, acquisition and evidenced by the Board’s extensive experience at Savills. organic expansion continued to bring new teams and new expertise into all parts Our clients deserve and expect the best from Savills. I am committed to ensuring that of the business. Commercial investment transactions slowed in the second half they will receive the high level of professionalism, drive, creativity, entrepreneurialism, following the effect of the credit squeeze and the anticipation of yields moving out. honesty and quality that is synonymous with the Savills brand. I am excited by the On the residential side, prime markets held up well, but showed some signs new challenges ahead of me and my aim is to ensure that Savills continues to build of slowing towards the end of the year. Our Consultancy teams produced a and grow its global business for the benefit of its clients, staff and shareholders. strong performance. In Europe, investment markets remained firm and we expanded our range of services. Asia Pacific saw strong growth in revenues, with a significant increase in profitability. This was largely attributable to organic growth in our businesses in Hong Kong, China, Australia and Singapore. I am delighted that Jeremy will be taking over from me and will continue to develop and grow the business in line with our stated strategy.

Aubrey Adams Jeremy Helsby Group Chief Executive Group Chief Executive (Designate) 18 Savills plc Our Business Report and Accounts 2007 Review of Operations

Savills Granite advises major investor and developer realise assets of US$540m

US Retail and office portfolio

In North Carolina, Savills Granite worked closely with In addition, CBL also acquired a 100% interest in private property investor and developer The Starmount eight community shopping centres in Greensboro and Company to sell a wide-ranging portfolio of high High Point, North Carolina, and 12 office buildings in quality retail and office properties for a total of over Greensboro and Raleigh, North Carolina and Newport US$540m (£262m). The properties were acquired by News, Virginia. CBL is one of the largest and most a joint venture partnership between CBL & Associates active developer of malls in the US and this move Properties Inc and Teachers’ Retirement System of expands the company’s local presence which The State of Illinois. already included several major shopping centres. The portfolio sold to the joint venture included Friendly Centre and The Shops at Friendly Centre in Greensboro, six office buildings located adjacent to Friendly Centre in Green Valley Office Park and Renaissance Center in Durham, NC. The Friendly Centre comprises 1.3m sq ft, with a major expansion project currently underway.

20 Savills plc Our Business Report and Accounts 2007 Review of Operations

We also believe that more global cross-border capital flows into property will continue Group Strategy – cross-border investors have represented the fastest growing segment of most markets over the past two years and, in Europe, now account for almost half of the total investment market. The domestic investment markets remain large however, particularly in North America and Asia, reinforcing the importance of strong local businesses. Savills will focus on expanding share in the largest markets in which it operates, prioritising growth efforts on the cities and countries that have substantial domestic markets as well as being both sources and destinations for international capital investment. For developers, the trend worldwide is for mixed-use projects, where offices, hotel, retail and residential are all important elements. Savills is uniquely qualified among the major global players in this market, with its depth and breadth of both residential and commercial businesses. This will be an area of focus for Savills over the next Introduction: Savills is entering a new phase in its evolution few years. Savills has established successful businesses in many of the major property Investors are looking to the emerging markets for greater returns. While these markets around the world, focusing its energy and resource on building strong local markets are currently small, their future potential and forecast growth rates are businesses with excellent local people. Each of the subsidiaries has had the freedom appealing. Savills will be taking a proactive approach to identifying the right to maximise its earnings relatively independently, and to grow rapidly with the markets opportunities to enter these markets. in which they are operating. As we enter 2008, the objective for the Group continues to be to grow earnings, but the strategy to achieve that growth will emphasise The competitive environment growing market share in the markets in which we are already established, making We have a strong and diverse client base that is the envy of many of our competitors. more of what we have already, for example through more effective cross-selling and In more challenging market conditions ahead we will have to compete effectively to client relationship management. retain existing and win new clients. In particular, we will be aiming to do more to retain our current clients and ensure they understand the range of our services and the Savills vision value we can bring to their business. The vision overall for Savills remains: ‘To be one of the leading providers of real estate services in the major markets of the world’. The employment market for top quality staff remains highly competitive in all countries. However, Savills has an excellent track record of hiring and retaining top There is clearly a separation between the truly global players and the rest of the people both at graduate and more experienced levels. We are continuing to make property services competitors. Savills is already a major global player and intends improvements to our working environment, career development prospects and to stay in the top league. However, while total global revenues are important, being remuneration structures to ensure we remain the employer of choice in the industry. perceived as a leader by clients and prospective employees is essential, and this requires a careful balance between being global – in range and capability – and local – having depth of expertise and breadth of service in key local markets. By getting the balance right, we believe we will deliver superior returns to shareholders, and we will be the employer of choice for outstanding individuals in our chosen markets. The market Clients – trends There is no doubt that property remains an important asset class and, as markets become more transparent and the corporate users of property continue to sell off their property assets, this trend will continue. We plan to continue to strengthen the services we can offer our clients, from transaction and corporate finance advice, through valuation, leasing, property management, and, in places, facilities management. 21 Savills plc Our Business Report and Accounts 2007 Review of Operations

Exploring new opportunities in the strongest emerging economies We will continue to pursue opportunities in selected emerging markets. Growth in fund management We continue to see fund management as an important part of our global business. Cordea Savills plans to continue expanding its product range in Europe and in Asia to build on its stratagic venture with Nichani Group in India. Exploit our strength in residential on a more global scale Savills has an enviable, nationwide prime Residential business in the UK, and New Homes businesses in a number of major cities around the world. In addition, we have an associate network of residential agents in popular, upmarket resort destinations around the world. This breadth and depth of customers and knowledge gives the business a real advantage over commercial competitors in advising our clients on mixed development opportunities worldwide. It also supports the Savills brand Savills strategy – focused expansion and making more of our existing assets positioning as ‘premium’ and ‘international’. Based on the assessment of the market dynamics and trends, our strategy for Exploiting our strengths 2008-2010 builds from our strengths and achievements in 2007. An important theme for Savills over the next few years will be making better use Building scale and brand recognition in the major cities and countries of the world of our strengths and assets. This relates to taking a longer term view of client In the UK, we will continue to strengthen and grow our share in existing segments relationships, as well as how we manage the business internally. More effort will through selected acquisitions and hiring. This includes areas where Savills is be directed to make clients aware of what we can do for them. For 2008 there are already a leader, for example in Planning and Housing Association work, and also already initiatives in place to further improve the co-operation between our UK in higher growth sectors and discipline areas that have a different revenue profile Mortgage Broking and Residential businesses, between the various Commercial from transactions. departments in the UK, and to grow international cross-referrals of clients between the US, UK, Europe, Asia and the Middle East. We have improved management We will also selectively expand into new areas of specialisation. We will continue to structures to strengthen intra-regional co-operation within both Asia and Europe. grow our UK Residential business, although expansion of the network will slow down Team structures and remuneration will be selectively adapted in order to support during the current period of economic uncertainty, and we will focus in 2008 on this initiative. Following a review of our HR policies and practices in 2007, we will improving productivity in existing offices and integrating the teams and businesses be working to improve our people policies and management practices. acquired and recruited in 2007. Building the brand In the US, the Savills Granite business is focusing on expanding its share in One of the most important assets of the Group is the Savills brand and our aim is New York City and adding capability in selected sector-focused teams. The priority to strengthen the Savills brand recognition across the globe. We have started to in the US is using New York City as a platform to build and expand our presence in review its identity, and to understand better the perception of clients, and both the US with the aim of building our share of international capital flows into and out current and prospective employees. This in turn will help us to improve our marketing of North America. and communications over the coming years and ensure that investments in Expansion in Europe will be focused on the countries which we believe will benefit marketing are most effective. The identity revolves around the people who work the most from increased cross-border investment activity. In these key markets at Savills – passionate, creative, hungry, fun, entrepreneurial – and our premium, we will be increasing our Capital Markets teams and expanding into new sectors global reputation in the market. We aim to maintain this focus on great people and and cities. We will also be expanding our Consultancy teams across Europe premium brand positioning. We have recently established a new Marketing and with particular focus on our existing Valuation and Property Management teams. Communications working group, reporting into the new Group Chief Executive. We will selectively establish in new locations and we have already opened a new office in Brussels. We have initiatives in place to improve our cross-selling from London to Europe and, having established our relationship with Asteco in the Middle East in 2007, we will now be working to grow referrals between them and the rest of Savills’ businesses. In Asia our strategy is to consolidate and extend the regional platform that has been built over the past few years. We will be creating an integrated regional service platform to better handle clients’ pan-regional requirements. In China we will grow revenue from existing offices, marketing our services to domestic investors, as well as extending into new cities when the time is right. Selected sector teams will be strengthened and Japan will be restructured to improve profitability. Continued pursuit of the cross-border investment market The aim is to establish a leadership position in this market through improved client relationship management and teamwork. Some of our leading investment specialists have been taken out of their previous roles to concentrate on developing this area of the business. 22 Savills plc Our Business Report and Accounts 2007 Review of Operations 23 Savills plc Our Business Report and Accounts 2007 Review of Operations

We acted for co-owners in a deal that saw a landmark tower in Sydney let in its entirety

Australia Darling Park, Sydney

Working on behalf of three co-owners, we Darling Park Towers 1 and 2, together with the Cockle successfully concluded negotiations that will result in Bay Wharf retail precinct, are owned 50% by GPT the Commonwealth Bank of Australia occupying the Wholesale Office Fund, 30% by Multiplex and 20% whole of Darling Park Tower 1, part of a three-tower by AMP Capital Investors. Darling Park Tower 3 is landmark office complex in Sussex Street, Sydney. owned 100% by GPT Wholesale Office Fund. Darling Park is now widely recognised as a powerful banking and finance complex, with other key tenants including PricewaterhouseCoopers, Marsh Mercer and RaboBank. Commonwealth Bank has committed to a 12-year lease for 51,000 sq m of premium space, commencing with 17,000 sq m in the high rise in July 2008. The remaining space in the tower will be occupied as it becomes available between 2008 and 2010. 24 Savills plc Our Business Report and Accounts 2007 Review of Operations

UK Savills Marketplace Commercial Retail and industrial/distribution tenant demand remained positive during 2007. Overview Steady demand in regional office markets continued throughout the year, particularly for Grade A space. In the Central London office market, while levels of leasing activity were well above average in the first three quarters of 2007, there was some caution in the final quarter of the year. While we have seen little evidence of requirements being eased as a result of the credit squeeze, it is clear that banking sector tenants are less certain about the future than they were a year ago. In the second half of the year, the investment markets in the UK were hit hard by the credit squeeze, with debt-backed purchasers significantly less active than they have been in recent years. Transactional activity was driven by equity investors, both domestic and international. The relatively low levels of transactional activity have made it hard for investors to ascertain the degree to which yields have corrected and some element of valuation lag is further complicating this. Once the credit squeeze has begun Barring any major external shock in 2008, we expect tenant demand outside the London office markets to remain stable and heavily biased towards Grade A buildings to ease, we expect a gradual pick and locations. Until the credit squeeze has eased demand for Central London offices up in the volume of capital market is likely to remain subdued. However, given the current low levels of vacancy in this market we do not believe there will be a significant downward correction in the rents transactions across the UK on Grade A buildings. Once the credit squeeze has begun to ease, we expect a gradual pick up in the commercial property market. volume of capital market transactions across the UK commercial property market, with investors continuing to focus on opportunities that offer the prospect of above average rental growth. Cross-border investors are expected to continue to view the UK as an attractive investment market due to its landlord favourable lease structure, high levels of liquidity and transparency. Residential The UK mainstream residential market started 2007 strongly. However, five successive interest rate rises had a progressive impact upon price growth and market activity over the course of the year. Annual UK house price growth, which peaked in the middle of 2007, fell by the year end, as tightened affordability was compounded by the fallout from the credit squeeze. Markets in the South East proved the most resilient to the slowdown, with no noticeable impact upon rates of price growth being evident in London until August, when buyer confidence was hit by poor economic news reports and accessibility to mortgage finance became more constrained. As confidence dipped, so did market activity. Turnover in the new homes market was noticeably down in the last quarter, as demand from buy to let purchasers and other investors tailed off. 25 Savills plc Our Business Report and Accounts 2007 Review of Operations

In 2007, Asia was largely unaffected by the credit squeeze with investor and occupier markets continuing to perform strongly.

In Spain, there appears to be concern that the residential markets have been overpriced but there is still a very active commercial market with investors believing that 2008 will provide some interesting buying opportunities. We believe that there will be increased interest in the Nordic region as some of the countries there begin to attract increased investor demand. The Netherlands market has remained resilient throughout 2007, and in 2008 to date, with many of the Dutch banks being largely unaffected by the credit squeeze. We see this market attracting significant investor interest in 2008 in both the retail Prime markets performed strongly in the first half of the year, with annual house price and office sectors. growth at the very top end of the Central London market reaching 29% in June, Asia fuelled by record City bonus payouts and strong overseas demand. Price growth In 2007, Asia was largely unaffected by the credit squeeze with investor and in the rest of prime Central London ended the year at slightly over 16%, even after occupier markets continuing to perform strongly. Upward economic momentum accounting for a 2% fall in prices in the last quarter, which occurred as a result of remained. Local and international investors were particularly active during uncertainty in the City and reduced earnings expectations amongst those employed 2007 and a considerable weight of institutional funds targeted the region. in the financial sector. Yield compression and a limited stock of available properties created a challenging The 2008 market is expected to be characterised by low turnover and flat house operating environment for investors and forced many to look further afield to second price growth. Further cuts in interest rates, a freeing up of capital markets and tier markets for opportunities. some reassurance that the taxation of non-domiciled residents is not going to In the prime office markets, corporate expansion at a time of generally limited supply be too onerous, will be critical to the performance of the sector in 2008. drove rents up. In the retail markets, growing visitor numbers and rising household Europe incomes generated strong consumer demand amidst constrained supply levels, Tenant demand for commercial property across Europe remained steady for most especially at the top end of the market. of 2007. Occupiers in all sectors were, however, more selective on location, with Residential markets performed well with some evidence of moderating price growth a heavy preference towards prime properties. While the credit squeeze raised after a year of rapid gains. In China, measures were being taken to cool the economy questions about the prospects for banking sector demand there has been little and curb inflation and may act to cool the market in the near term. evidence of tenant requirements being put on hold. Looking ahead we expect leasing activity to remain stable in 2008 unless there is a major external shock. US Occupiers in the retail and distribution markets will continue to focus on locations In the second half of 2007, with the advent of the subprime credit issues, buyers that deliver high profitability per square foot. Occupational demand for offices will and sellers became more cautious and the credit markets became significantly remain heavily skewed towards Grade A properties. more restrictive resulting in costlier debt and slowing sales volumes. The subprime credit squeeze and its ensuing effects on consumer confidence, construction In the investment markets, following a strong first half to 2007, volumes have starts, unemployment and GDP had a significant impact on commercial property. been restrained by the credit squeeze. Debt has become harder to obtain, and While the overwhelming majority of subprime loans are related to single family home debt-backed buyers have consequently been less active. Equity investors have mortgages, the fallout spread to the commercial lending sector. We expect this remained active across Europe, focusing on both trophy investments and rental sentiment to continue into 2008. growth opportunities. Investors in Europe in the second half of 2007 were focusing on Grade A properties in the office, retail and industrial sectors with secondary properties being increasingly difficult to sell. Investors’ main focus continued to be Germany where the potential for sustained rental growth continues to attract investors, both domestic and international. Looking forward to 2008, general activity in the European investment markets will be constrained until there is a greater availability of debt from the banks. We expect investors to continue to focus on France, and Paris in particular, where yields for prime office and retail have proven resilient and where there remains significant demand for good quality, well let office buildings.

Close working relationship continues to build on 20 years of effective office management

China Lippo Centre, Hong Kong

Since 1987, the Savills team in Hong Kong has been service through a combination of capable staff, providing services to the Lippo Centre, demonstrating excellent customer service and innovative that effective office management can deliver long-term management solutions. costs savings to the client. For the period 1989 to By building on the long-established relationship 2007, we have been able to achieve a total saving on with the Lippo Group, we aim to provide continuous electricity bills of around HK$39m (£2.5m), despite improvements to the physical environment, technical continuous increases in energy costs. facilities and customer services. Our objective is to With a gross floor area of around 1.3m sq ft, the Lippo enhance the property’s market position and image, Centre comprises two office towers above a podium which will in turn increase the asset value and achieve on Queensway, Admiralty. There is also basement substantial growth in rental. car parking for 35 vehicles. Our role is to manage the public area for all the owners together with tenancy management for the building’s largest single owner, the Lippo Group. As in each of the last 20 years, during 2007 we continued to deliver a quality 28 Savills plc Our Business Report and Accounts 2007 Review of Operations

Important heritage property is saved for the nation as sale attracts widespread interest

UK Dumfries House and Estate, Scotland

Our Edinburgh office was instrumental in the sale On the closing date, a bid of £45m was received from of Dumfries House and Estate in Ayrshire to a the consortium of charitable organisations brought consortium of charitable and heritage organisations. together by His Royal Highness The Prince of Wales. This prevented the house and contents being Built by John, Robert and James Adam, the split up and saved Dumfries House for the nation. house has one of the finest private collections Now the house and its contents will remain intact of Chippendale furniture and the contents are of as a unique example of Georgian craftsmanship international importance. Savills was instructed and will be enjoyed long into the future by a wider jointly with Christie’s who were to hold a public public. Dumfries House will open in 2008 following auction of the contents in London. News of the sale a programme of restoration work. attracted widespread public and press interest.

30 Savills plc Our Business Report and Accounts 2007 Review of Operations

Segmental Reviews Transactional Advice

Professional property services relating to the sale, purchase or letting of commercial and residential property. Overall transactional revenues increased Services by 23% to £304.1m which represents

Commercial agency Farm and estate agency 47% of total Group revenue. and investment Retail and leisure Residential agency, Hotels and healthcare letting and investment Institutional Development Purchasing advice Auctions New homes

Contribution to Group Revenue

Transactional Advice 1 Transactional Advice: 47% 1 Our Transactional Advice business comprises four major elements: – Capital Markets – we advise a wide range of investors including institutions, REITS, sovereign funds and private clients on buying or selling commercial property throughout Europe, Asia and, since July 2007, the US.

Performance – Occupational/Corporate Services – we provide letting advice to property owners and represent tenants and owner occupiers in negotiations on acquiring/disposing Revenue £m Profit £m of their accommodation including offices, retail and industrial. We continue to 06 07 +/- 06 07 +/- support the business needs of global corporate occupiers in providing them with UK 175.0 194.4 11% 37.1 35.0 (6%) a full range of strategic, advisory, professional, transactional and management Rest of Europe 32.6 45.4 39% 4.7 3.8 (19%) services across varied property portfolios and asset classes. Asia Pacific 39.6 60.6 53% 4.4 9.6 118% – Residential – we act for vendors of residential properties and also have a specialist America – 3.7 – – 0.2 – purchasing business in the UK. Total 247.2 304.1 23% 46.2 48.6 5% – Development – we advise on acquisitions and disposal of development land/sites. Revenue Performance in 2007 Overall we increased transactional revenues by 23% to £304.1m, which represents 03 £119.4m 47% of total Group revenue. Underlying profit before tax increased by 5% to £48.6m, 04 £146.3m representing 57% of total Group underlying profit before tax. Overall margins were down 3% reflecting the slowing investment market particularly in the UK. 05 £166.9m 06 £247.2m In the first half, investment markets across the UK and Europe were strong with all 07 £304.1m asset classes being in demand from both local and international investors, resulting in rising prices and falling yields. The second half was very different following the global Underlying profit before tax* credit squeeze, saw a decrease in investment activity, particularly in the UK and US. In continental Europe, investment markets remained firm and were less affected by the credit squeeze. Germany, in particular, was popular with investors seeing 03 £18.4m good rental growth opportunities in all sectors. 04 £27.4m 05 £33.3m In July 2007 we acquired a capital markets business, Granite Partners LLC, in the 06 £46.2m US (now Savills Granite), which traded in line with our expectations in the second half. 07 £48.6m This was a good performance in a market where the impact of the credit squeeze was most noticeable. *Underlying Group profit is calculated by adjusting reported profit before tax to deduct profit on disposals of share-based payment adjustment and add back amortisation of intangibles and impairment of goodwill and available-for-sale investments. 31 Savills plc Our Business Report and Accounts 2007 Review of Operations

In Asia, our Capital Markets team had a successful 2007, with major increases from our businesses in Hong Kong, Macau, Singapore and Australia. The addition of a new office in Taipei, together with new offices in Chengdu, Dalian and Tianjin in Greater China plus the opening of Savills offices in Hanoi and Ho Chi Minh City were additional factors contributing to the growth of transactional income. Our Occupational business is focused mainly on London and the other European capitals. Demand in the London City market was mixed with some large potential requirements for additional space from financial sector tenants being put on hold. In the West End, strong demand resulted in record rents being achieved throughout the year for Grade A accommodation in prime locations. In the rest of Europe, tenant demand remained firm, with many international occupiers expanding their operations Our Capital Markets teams across Asia Pacific had an outstanding year and our throughout Europe, leading to a number of pre-lets in many major cities where there Hong Kong and Macau based teams alone transacted more than HK$24bn of remains a severe shortage of good quality, well located buildings. property deals during 2007. In China, we completed the sale of two office towers in Suzhou’s ‘Times Square’ for US$ 90m to a Korean fund. The UK residential agency market experienced a confident start to the year; prime Central London saw price growth of 16% in 2007, with the super prime market In Australia, our Capital Markets team completed the sale of a A$300m residential reaching as high as 39%. However most of this growth occurred in the first half of land sale at Alkimos, the largest sale of a single residential land holding ever in the year. In the second half, market sentiment slowed and there was minimal price Western Australia. growth. The country market also showed strong demand during 2007, although this In the US, Savills Granite, advised private property investor and developer, tailed off in the Autumn. The Starmount Company, on the sale of its shopping centre, retail and office The UK residential development market experienced strong demand for land for portfolio comprising 46 properties for £262m. Savills Granite also expanded its more traditional housing as there is still a lack of supply in most parts of the UK. core competencies by adding several new employees with expertise in urban office However, the market for new build apartments, where government policy focused markets and senior housing. The firm continues to develop its specialty in the sale growth on high density apartment schemes, has led to over-supply in some regional of medical office properties. cities. Prime Central London developments continue to perform well. The UK Agency Offices team transacted 5.9m sq ft and the National Industrial team Key achievements of 2007 transacted 12.0m sq ft. The teams continue to operate a diversified business model We continued to expand our Capital Markets teams in all regions. In Madrid, where representing owners and occupiers alike and focused on the most prime and large- we recently recruited a new team, we advised on the largest transaction in Spanish scale developments across the UK. A key transaction for the Offices team involved history advising Pontegadea on the acquisition of an 11 building portfolio from pre letting 85% of the space at 40 Portman Square, London at rents in excess of Santander Bank, for a price of €500m. In December, the Madrid team also advised £115 per sq ft on behalf of Delancey and Standard Life. They also leased and Deka Immobilien on the acquisition of the PricewaterhouseCoopers headquarters concluded a sale and leaseback of an 850,000 sq ft distribution centre in Nottingham in Mexico City from BCBA for in excess of US$110m. to B&Q plc. The UK Capital Markets team transacted more than £57bn of property deals with A key achievement for the Retail Warehouse Agency team was being retained by a number of high profile transactions in the City, London. B&Q plc to market their surplus stores and we sold approximately 400,000 sq ft in 2007. Additionally, we now act on over 100 retail parks throughout the UK for leading landlords, such as British Land, Hammerson and Land Securities. Food stores remain a key area of growth and we now have a dedicated Food Store team. Our retail development work in the food store sector, primarily for Tesco, has included providing development consultancy advice on several major schemes, and acquisition advice on sites across the country from the north of Scotland to the Home Counties. We also provided brokerage advice on the acquisition of two portfolios of stores from Somerfield. In total, our work for Tesco resulted in them acquiring over 300,000 sq ft of retail space. 32 Savills plc Our Business Report and Accounts 2007 Review of Operations 33 Savills plc Our Business Report and Accounts 2007 Review of Operations

Our team instructed to value the site for one of the tallest buildings in the City of London

UK Heron Tower, London

Our Commercial Valuation department was instructed The Tower, designed by Kohn Pedersen Fox by Eurohypo AG London Branch to value the site for Associates, will provide office accommodation over a new landmark building for loan security purposes. 36 dedicated floors. Within these, the building will comprise independent office ‘villages’. The offices Planning permission for the redevelopment of the are to be fitted to a world class, Grade A specification site was secured in April 2006 encompassing the and the developer, Heron International, intends to demolition of the existing office buildings and the provide building services of a ‘six star’ standard. construction of a landmark, highly specified office tower to be arranged over 46 storeys. The scheme Foundation works for the Tower’s construction will also incorporate restaurant and retail facilities. have commenced and completion of the project When complete, Heron Tower will be one of the is anticipated in Q1 2011. tallest buildings in the City at 202 metres in height (242 metres including the mast). 34 Savills plc Our Business Report and Accounts 2007 Review of Operations

Segmental Reviews Transactional Advice continued

Our Leasing teams in Australia were particularly active and included leasing 51,000 sq m, the whole of Darling Park Tower 1, to the Commonwealth Bank Group, believed to be the largest leasing transaction of an existing building. During the year, our UK Residential business continued to expand, opening new offices in Barnet, Chester, Bournemouth, Cheltenham, Loughton and Stratford-upon- Avon, as well as strengthening many of our existing teams. We acquired Christopher Rowland, with offices in Northwood, Rickmansworth, Amersham and Chesham. Overall in London, transactions were up 12% over 2006 with an average sale price of almost £2m, compared with £1.45m in 2006. The London region set new benchmarks for prime houses in Belgravia at over £3,000 per sq ft in February with a sale price circa £30m. In the country, transactions were up by 30% over last year at an average sale price of £875,000. Achievements include the sale of ‘Polwartha’, Rock at a guide of £4.95m (the highest price per sq ft for a house in Cornwall). Savills marketed 26,000 acres of farmland representing over 14% of the land openly We have continued to grow significantly our Development Land team throughout marketed, once again proving to be the market leader in this sector. Out of 16 farms the main UK cities. Savills were instructed by Derwent London plc to dispose and estate sales over £10m in the UK, Savills sold 11. Those sold included The Park of Greenwich Reach, London, a mixed use development site of 7.8 acres. Place Estate, near Henley in Oxfordshire, an unmodernised house set in 499 acres Planning permission was granted for the redevelopment of the site to provide sold with a guide price of £45m. 980 residential units. The development was sold for £112m to Galliard Homes Ltd. Prime Purchase, our purchasing advisory business, which specialises in acting on From our 24 regional New Homes centres we are providing consultancy advice or behalf of retained buyers of residential property in both London and the country, had have concluded terms of business on residential developments with a combined an exceptional year. In 2007, the average search time in London was just 3.9 months. gross development value of £20bn. We continue to maintain a high market share In the country, over 56% of properties were secured for clients either privately or within prime Central London with strong off plan sales being achieved at premium before advertising. prices frequently to overseas buyers for internationally recognised developments such as One Hyde Park. Nationally, interest in investment properties has slowed with some localised markets becoming oversaturated; however, many creatively marketed well-priced city centre apartment schemes have still sold well. In Singapore, our Residential Sales team were very active and concluded more than S$1bn (£360m) of en bloc sales in the second half of 2007 alone, including the sale of Westwood Apartments to a Malaysian conglomerate for S$435m (£156m). Future plans We will continue to develop our Transactional businesses worldwide through a mixture of acquisitions and strategic recruitment. 35 Savills plc Our Business Report and Accounts 2007 Review of Operations

Segmental Reviews We increased the revenue of our Consultancy Consultancy business in 2007 to £141.5m, an increase of 43%.

Provision of a wide range of professional property consultancy services including: Consultancy Our Consultancy business covers a wide range of professional property services Services including: – Valuation – a professional service typically focusing on valuations for bank Valuation Landlord and tenant lending purposes. Building consultancy Planning – Building Consultancy – providing a wide range of advice on all aspects of building Housing consultancy Research including structural surveys and advice on fitting out. Affordable housing and student accommodation – Housing Consultancy – advising housing associations and institutions on all aspects of housing including affordable housing and student accommodation. Contribution to Group Revenue – Landlord and Tenant – advising on all issues stemming from rent review and lease renewals. 2 Consultancy: 22% – Town and Country Planning – comprehensive service advising on all aspects of planning including assisting with planning appeals. – Research – a highly regarded research department providing research capabilities 2 including reports on specific markets for clients. Performance in 2007 Performance We increased the revenue of our Consultancy business in 2007 to £141.5m, an Revenue £m Profit £m increase of 43% (2006: £98.8m). Underlying profit before tax increased by 39% to £22.3m (2006: £16.1m). The strong performance reflects the long-term investment 06 07 +/- 06 07 +/- UK 82.0 114.4 40% 14.6 18.7 28% in this business. Margins are slightly down reflecting both the investment being made Rest of Europe 5.3 10.7 102% 0.8 2.0 150% and salary pressure in this growing market. Asia Pacific 11.5 16.4 43% 0.7 1.6 129% Our UK Commercial Valuation team increased revenue by over 45% and we are Total 98.8 141.5 43% 16.1 22.3 39% now one of the leading valuation practices in London. In Europe, we valued assets in excess of a5.5bn and our clients included both UK based and international lenders, Revenue together with a number of European funds. In March 2007, we set up a new London- based European Valuation team, focusing on valuation instructions outside of the UK. This new team had an excellent first year working closely with all our Valuation teams 03 £49.1m across Europe. During 2007, we expanded our Valuation teams across the network. 04 £59.3m Working with our European Valuation team, our local European teams had a good 05 £71.8m year. The biggest growth was in Germany where our valuation revenue in 2007 06 £98.8m increased four-fold compared to 2006. We now have a team of 23 valuers in 07 £141.5m Germany based in Frankfurt and Berlin, servicing both domestic and international clients. Elsewhere we recruited into all our existing teams with a particular focus Underlying profit before tax* on Italy, the Netherlands and Sweden.

03 £7.7m 04 £11.0m 05 £12.9m 06 £16.1m 07 £22.3m

*Underlying Group profit is calculated by adjusting reported profit before tax to deduct profit on disposals, share-based payment adjustment and add back amortisation of intangibles and impairment of goodwill and available-for-sale investments. Flagship retail scheme relies on extensive Savills involvement, from site purchase through to management

UK Met Quarter shopping centre, Liverpool

From advising on the initial site purchase to working alongside the client through the opening process and acting as managing agent, we have been involved in many aspects of Met Quarter. This new 130,000 sq ft flagship scheme is situated close to prime retail pitches and the popular Cavern Quarter in Liverpool, the 2008 European Capital of Culture. A total of 43 units on two mall levels and three trading levels combine to deliver a shopping experience that is unique in the north-west of England. From a retailers’ perspective, a key feature of Met Quarter is the innovative approach to lease and rental terms. 37 Savills plc Our Business Report and Accounts 2007 Review of Operations

In Asia, the growth in the professional services markets remained strong throughout Segmental Reviews the year. We saw significant growth of our businesses in Hong Kong, Macau, China and Australia. We are the leading valuer for IPOs in Hong Kong. During the year our Consultancy continued expansion into mainland China and the addition of new offices in Vietnam enabled us to offer our services to a wider market. Key achievements High profile valuation instructions in Europe included a a1.7bn portfolio of German office buildings, a a200m portfolio of around 60 office buildings in France and a portfolio of retail schemes in Sweden and Finland. In the UK, the Retail Planning Consultancy team obtained planning permission for new floorspace at Cleveland Retail Park for Hammerson and promoted a retail park in Southend as part of the football club’s proposals.

2007 was another busy year for our UK Residential Valuation team. We have seen Our London Planning team continued to secure permissions to expand and add particular growth in loan security valuations and have provided valuation advice to value to the already large and award winning Arsenal Regeneration Area, around over 80 lending institutions. Due to Savills’ size and reputation we are benefiting from the new Emirates Stadium. This includes 2,600 new homes, together with business, a tightening of lenders’ approved valuers panels. retail and leisure space. Our UK Housing Consultancy team also had another strong year, specialising in Our Regional Planning teams are engaged in a number of high profile projects stock condition surveys and procurement advice to local authorities and housing including Wellington Place, a 2m sq ft mixed use development for MEPC in the associations. We are a leading provider of these specialist services and last year we new ‘west end’ of Leeds. The diversity of our planning work is exemplified by carried out a record number of surveys and substantially increased our market share winning consent for Bio Ethanol Ltd for a new production plant in Lincolnshire, in providing procurement and investment advice. and we continue to act for six water companies, three wind farm developers and several utilities. Our UK Landlord & Tenant team is one of the most experienced in the country. We were retained on over 100 retail and shopping parks including 25 of the top 100 UK schemes. Our high calibre staff in London, Birmingham and Manchester have continued to be involved with some of the highest value single let office and industrial/warehouse properties throughout the country. Our specialist UK Business Rates team had an exceptionally busy year making significant savings for clients in respect of their ongoing and future rates liabilities. The changes in the 2007 budget to reform the Empty Rates Relief System provided additional business as we advised clients on how to mitigate their rates liability in light of the new legislation. Following the acquisition and integration of Hepher Dixon at the start of 2007 we are now one of the largest and most diverse planning consultancy businesses in the UK, based in 13 locations throughout the country. We continue to build on the strength in our housing, commercial, retail and mixed use sectors and expanded into other important areas including public sector, environmental and urban design, the water industry, healthcare and airports. Our planning specialisation in renewable energy is contributing to the build up in value in Infinergy Limited, a company set up to acquire consents for wind farming in which Savills has a 50% stake. 38 Savills plc Our Business Report and Accounts 2007 Review of Operations

Building Consultancy’s Industrial team has targeted the large shed developers Segmental Reviews and are working successfully with Gazeley and Industrial Securities on new developments, both speculatively and occupier led. We are continuing to grow Consultancy continued our due diligence and project monitoring service with repeat instructions from MetLife Investments and CBRE Investors, as well as new work with Industrial Securities in Europe. We are also targeting end users directly and have provided project management support for Asda Walmart on a number of schemes. We have continued to develop our service into Europe, providing strategic project advice for some of our developer and fund clients. Europe continues to offer considerable potential for our business growth. Our Project Management team enjoyed a successful year and notable projects secured have included head office refurbishments for Benfield Group Ltd, Symbian Software Ltd and Zurich Insurance Company (UK) Ltd. Our Leisure team have been instrumental in advising on several significant merger and acquisition projects in the hotel, leisure and the childcare sector in the UK and continental Europe. Our UK Residential Valuation team has been involved in providing valuation advice to one of the four shortlisted parties for the acquisition of the £800m National Grid portfolio. The recruitment of a 35 person valuation team in China and Hong Kong in 2006 has proved to be successful and the teams were active in the numerous IPO listings that took place during the year. In Beijing, Savills were appointed as the consultant of Wanda Plaza a 680,000 sq m mixed use complex in the Chaoyang. In Australia, our Valuation team continued to provide valuation services on an annual basis to many of the Australian property listed trusts. Future plans Over the past few years we have broadened the range of consultancy services we offer and reinforced this with key acquisitions. We will continue to pursue this approach in 2008.

We are now one of the largest and most diverse planning consultancy businesses in the UK, based in 13 locations throughout the country. 39 Savills plc Our Business Report and Accounts 2007 Review of Operations

Segmental Reviews Property Management

Management of commercial, residential and agricultural property for owners. Provision of a comprehensive range of services to occupiers of property, ranging from strategic advice through project management to all services relating to a building. We increased revenue Services by 16% to £159.7m.

Facilities management Commercial management Land and farm management

Contribution to Group Revenue Property Management Our Property Management business consists of three main elements: 3 Property Management: 24% – Property Management – we manage commercial and residential property on behalf of owners. 3 – Facilities Management – we provide a comprehensive range of services to occupiers including all services relating to a building, project management and strategic advice. Performance – Land and Farm Management – in the UK we provide a specialist service to manage Revenue £m Profit £m agricultural land including managing farms.

06 07 +/- 06 07 +/- Performance in 2007 UK 43.6 51.6 18% 4.2 4.6 10% During 2007 we increased revenue by 16% to £159.7m although, profit decreased Rest of Europe 10.2 18.1 77% – 0.1 – by 5%. UK and Europe followed a slow first six months with a stronger second half Asia Pacific 83.4 90.0 8% 7.3 6.2 (15%) performance resulting in a slight increase on full year profits. In Asia, profits fell by 15% Total 137.2 159.7 16% 11.5 10.9 (5%) reflecting year on year currency movements and reduced income from our operations in Australia and Korea. Revenue Our Land and Farm Management business benefited from the marked increased in confidence following CAP reforms and a rise in commodity prices. 03 £85.4m However, the challenges in the UK investment market in the second half of 2007 meant it was harder to win new commercial instructions but there are signs of 04 £85.8m investors focusing on the need for more intensive asset management and this 05 £104.5m has benefited our business. 06 £137.2m 07 £159.7m We achieved a significant increase in revenue in Europe through a mixture of organic growth and newly recruited teams. The profit was held back however by investment Underlying profit before tax* in growing the infrastructure. In Asia, we continue to expand our business and now manage 437m sq ft (2006: 334m sq ft) in Greater China, where we are increasing our market share. Margins 03 £6.3m reflect increasing competition from local operators in China, Hong Kong and Korea. 04 £6.4m In addition, Savills has made further investment into winning new business and 05 £8.3m improving its infrastructure, the benefits of which will emerge in future periods. 06 £11.5m 07 £10.9m

*Underlying Group profit is calculated by adjusting reported profit before tax to deduct profit on disposals, share-based payment adjustment and add back amortisation of intangibles and impairment of goodwill and available-for-sale investments. Leading German fund draws on Savills expertise in Mexico’s highest value property deal

Mexico PricewaterhouseCoopers building, Polanco

Although it was only established in 2007, the new The property was purchased from BCBA for in Savills Mexican advisory service played a leading role excess of US $110m (£50.55m). The office building is in the year’s highest value property transaction in the let in its entirety to PwC on a lease expiring in January country’s office market. 2016. It comprises 241,926 sq ft with an additional parking area. The new team helped a major German investment fund take a firm foothold in the Mexican market. We advised Deka Immobilien GmbH in the transaction to acquire PricewaterhouseCoopers’ (PwC) prestigious headquarters building at 563 and 573 Mariano Escobedo, Col. Rincón del Bosque, Polanco 11580, Mexico D.F.

42 Savills plc Our Business Report and Accounts 2007 Review of Operations

The Hong Kong government is actively encouraging anti-pollution measures in a Segmental Reviews bid to improve air quality and reduce waste. Our Facility Management business in Hong Kong is responding by exploring a number of eco-friendly initiatives including Property Management continued eco-park management, reverse vending machines (RVM’s) and bio-engineering greening techniques for use on many of the buildings and property schemes under our management. The business has also been instructed to manage a number of elderly home operations, and currently we have 500 beds under management. The Rural Management business in the UK has had an excellent year as markets gradually emerged from a long recession in British agriculture. The exception was the livestock sector, which has continuing problems in disease control. Global and city interest in soft commodities remains strong and this has led to increased professional work with rent reviews and farm contracting arrangements. We also advised on specialist sectors such as organics and our research department carried Key achievements of 2007 out a considerable amount of work on the measurement of carbon emissions. We have continued to grow our UK Property Management business. We opened We won 18 new estate management instructions across the country, including the new departments in Leeds and Bristol and expanded our existing teams in London, appointment as Estate Consultants to Imperial College London. Birmingham, Manchester, Glasgow and Edinburgh. This has enabled us to secure new clients, including Delancey and WELPUT, whilst consolidating existing In November, we opened a specialist Country House consultancy business targeting relationships with other major clients including RREEF, British Land and GE Capital. advice to high net worth individuals in the delivery of services and management of We now have national property management mandates with GE Capital, ING Real their homes and estates. Estate Investment Management, Morley, Diageo and Resolution Asset Management. Future plans In Europe, there has been increasing demand from investors for quality property We will continue to focus on growing our Property Management operations in UK management services. In order to meet this demand, we have expanded our and Europe. In Asia, property and facilities management is a cornerstone of our operations, both through acquisition and recruitment. The focus of this expansion business and helps us secure additional advisory instructions. has been in the Netherlands, Spain and Germany, where we acquired Theodor Schone, a leading property management firm based in Hamburg. This was in addition to further expansion of our Property Management team in Berlin. We have also set up a new Property Management department in Warsaw, managing in excess of 47,000 sq m. Our Paris team won instructions to manage 171 high street retail units in Paris for Generali and 18,000 sq m of high technology warehouses in Caen for Societe da la Tour Eiffel. The team are also working on behalf of Henderson (for their Herald Fund) managing 8,300 sq m of retail warehouse in Franconville, north west of Paris. The Asia Property Management practice continues to grow as demand for better quality property and asset management services increased. China and Hong Kong remained particularly strong while demand from other markets gathered pace. In China our office in Guangzhou has been appointed as property manager to the largest international residential and commercial project in Dongguan CBD, which has a gross floor area of 980,000 sq m. In Chengdu, we were instructed to manage ‘Sun Dynasty’ a mixed use complex of over 650,000 sq m. In Japan, Savills secured a number of asset management instructions from international investors, including Deka and Credit Suisse. In Korea, Savills was appointed as the corporate facility manager for Standard Chartered First Bank Korea’s 414 premises located throughout the country. 43 Savills plc Our Business Report and Accounts 2007 Review of Operations Segmental Reviews Financial Services

Mortgage broking, financial planning and corporate finance advice. Services We increased revenue by 11% in 2007 benefiting from the strong Residential mortgage broking services Commercial debt broking services mortgage market. Insurance services Financial planning services

Contribution to Group Revenue Financial Services 4 Financial Services: 5% The Financial Services division – Savills Private Finance Limited – is an independent 4 adviser for residential and commercial mortgages. It is a market leader at the top end of the residential mortgage broking market sourcing loans from a wide range of banks for new purchases, remortgages and investment acquisitions. SPF also provides insurance broking services and financial planning advice to larger clients.

Performance Performance in 2007 We increased revenue by 11% in 2007 to £29.8m (2006: £26.9m) benefiting from Revenue £m Profit £m the strong mortgage market. Underlying profit before tax increased by 16% to £5.1m 06 07 +/- 06 07 +/- (2006: £4.4m), margins improved from 16% to 17%. This is a strong result given the UK 26.9 29.8 11% 4.4 5.1 16% tightening of liquidity in the UK market and the significant investment in improving Rest of Europe – – – – – – systems and additional regulatory costs. Currently, around two-thirds of our income Asia Pacific – – – – – – comes within the M25; however, we continue to expand the traditional residential Total 26.9 29.8 11% 4.4 5.1 16% mortgage broking business geographically and now operate from 24 locations including new offices in Cardiff, Jersey and Windsor. Revenue The Commercial and Agricultural Debt Broking business performed strongly in more difficult market conditions, where the need for independent advice has become more important. 03 £15.5m 04 £20.1m Key achievements of 2007 05 £25.8m During the year we re-launched the relationship with the Residential Agency business, 06 £26.9m setting benchmarks for all offices to drive a greater flow of mortgage referrals. 07 £29.8m Future plans The outstanding quality of our people and our continuing investment in developing Underlying profit before tax* our infrastructure will serve us well in a market where borrowers will increasingly need the advice from professional mortgage brokers. We are planning to open new offices in Newcastle, Liverpool and Exeter and are also putting extra effort into our customer 03 £3.5m contact programme to ensure we retain existing clients and continue to deliver the 04 £3.8m high level of service they expect. 05 £4.7m 06 £4.4m 07 £5.1m

*Underlying Group profit is calculated by adjusting reported profit before tax to deduct profit on disposals, share-based payment adjustment and add back amortisation of intangibles and impairment of goodwill and available-for-sale investments.

45 Savills plc Our Business Report and Accounts 2007 Review of Operations

We worked on the acquisition of the largest distribution and industrial facility of its kind in Warsaw

Poland City Point Park, Warsaw

Working closely with our client Teesland iOG, we Teesland iOG, which is now part of the Valad played an important role in their acquisition of City Property Group, will place the acquisition in its Point Park in Warsaw from Europa Capital for B71.6m, Central European Industrial Fund (CEIF), managed reflecting an initial yield of 6.46%. by Morley. City Point has terrific growth potential, plus the potential for asset management services. Only 6km from the centre of Warsaw, City Point totals Further development is also a possibility. 1,313,197 sq ft and is the largest multi-let distribution and industrial facility in Warsaw, making up more than 20% of the modern warehouse stock in the city. 95% of the City Point units are already let to over 100 tenants, including Colgate Palmolive, Saturn Planet, PZU and UPS. City Point is attractive to both SMEs and larger companies because of the wide range of unit sizes available. It also offers excellent modern office space. 46 Savills plc Our Business Report and Accounts 2007 Review of Operations Segmental Reviews Fund Management Revenue increased to £15.4m reflecting the growth of funds under management to £3.5bn.

Investment management of commercial and residential property portfolios for Fund management institutional or professional investors, on a pooled or segregated account basis. Cordea Savills manages a number of mainly closed ended funds in the UK and Europe on behalf of institutional investors. It focuses on creating market and sector Services specialist funds as well as core pan-European funds. Through a limited liability partnership, Savills owns 60% of this business; the remaining 40% being owned Property investment products by members of the Cordea Savills management team. Discretionary and advisory portfolio management Performance in 2007 Revenue increased to £15.4m (2006: £7.2m) reflecting the growth of funds under Contribution to Group Revenue management to £3.5bn (2006: £2.1bn) at the year end. Underlying profit before tax increased to £4.1m (2006: £0.7m) reflecting the investment we have made over the last few years which is now starting to generate substantial income. 5 Fund Management: 2% Cordea Savills has successfully met investor demand for alternative sectors in the 5 UK, such as student halls. In continental Europe, investors have been looking at more opportunistic-style ventures as well as more specialist funds to meet their performance objectives. Cordea Savills was well placed to service both of these requirements and six new funds were launched. Performance Total staff grew to over 80 people and we opened new offices in Stockholm, Revenue £m Profit £m Luxembourg and Dublin to complement the existing offices in London, Milan, Munich and Paris. We expanded our European institutional client base with 06 07 +/- 06 07 +/- UK 7.2 15.4 114% 0.7 4.1 486% new investors from the UK and the Netherlands, the Nordic countries and Italy. Rest of Europe – – – – – – Asia Pacific – – – – – – Total 7.2 15.4 114% 0.7 4.1 486%

Revenue

03 – 04 £3.6m 05 £4.7m 06 £7.2m 07 £15.4m

Underlying profit/(loss) before tax*

03 – 04 (£0.5m) 05 £0.7m 06 £0.7m 07 £4.1m

*Underlying Group profit is calculated by adjusting reported profit before tax to deduct profits on disposals, share-based payment adjustment and add back amortisation of intangibles and impairment of goodwill and available-for-sale investments. 47 Savills plc Our Business Report and Accounts 2007 Review of Operations

Selection of Cordea Savills funds:

Assets under management by type of investor

1 Institutional investors 62% 1 2 Professional investors 22% 3 3 Charities 16%

2

Key achievements of 2007 We have been building a reputation for creating innovative funds, especially market and sector specialist funds. Particular achievements in 2007 include the launch of the following funds: – German Retail Fund – Italian Opportunities No.2 – UK Property Ventures No.1 – Pan-European Property Fund – Cordea Nichani Indian Opportunities No.1 – Cordea Savills Nordic Retail Fund Investment performance was particularly pleasing. The UK-based segregated mandate team was recognised with awards from two leading trade journals for managing the best performing UK pension fund property portfolio over the previous three-year period to December 2006. The investment programme for Cordea Savills Italian Opportunities No.1 was completed in the first half of the year, and further equity raising and investment was completed for the Cordea Savills Student Hall Fund. This latter fund was also the top performer in the IPD UK Pooled Property Fund Indices for 2007 reflecting Cordea Savills’ strength in alternative sector investment. Future plans Cordea Savills continues to expand its European product range in new European markets and to build on its strategic venture with Nichani Group in India.

Previous successes lay foundations for £348m deal in Spain’s commercial property market

Spain Pontegadea property portfolio

We have worked with Pontegadea, the property Together with the Paseo de la Castellana 35 building company of Zara founder Amancio Ortega, for which was purchased two years ago, this latest move many years and have advised on several acquisitions means that Pontegadea is now a more balanced in Spain and London. Our Madrid office also property business, with an influence that extends manages and values Pontegadea’s entire Spanish beyond its traditional retail base. property portfolio. An agreement for the sale of the two remaining lots, During 2007 we advised the company on the which include the 16m sq ft Santander Group City purchase of 11 properties from Banco Santander business park on the outskirts of Madrid, is yet to for B500m (£348m), reflecting a net initial yield be reached. of just under 5%. The properties, which total 968,760 sq ft, are located in eight Spanish cities and include Santander’s Madrid headquarters. All are let to Santander on 40-year leases. 50 Savills plc Our Business Report and Accounts 2007 Financial Review

Taxation Financial Review The effective tax rate is 32.6% (2006: 30.3%). The principal reason for the increase in the tax charge is the impact of the fall in the share price below the fair value price at the date of grant of share based options. This has resulted in an additional charge to tax in the income statement of £2.1m (2006: nil). Earnings per share and dividend Basic earnings per share from continuing operations fell by 1% to 45.5p (2006: 46.0p). Adjusting for profit on disposals, share based payments, amortisation of intangibles and impairment of goodwill and available-for-sale investments, underlying basic earnings per share rose by 13% to 46.1p (2006: 40.8p). The Board is recommending a final dividend of 12p (net), making 18p for the full year, a 12.5% increase on last year. Key performance indicators The Group uses a number of key performance indicators to measure its performance and highlight the impact of management actions. At Group level, the most visible The Board is recommending a final indicators are revenue growth, underlying profit growth, operating margins, cash generation, earnings per share, growth in assets under management and total dividend of 12p (net), making 18p shareholder return. The Group continues to review the mix of key performance for the full year, a 12.5% increase indicators to measure our performance against strategic objectives, specialising in both financial and non-financial areas. on last year. Financial policies and risk management The Group has financial risk management policies which cover financial risks considered material to the Group’s operations and results. These policies are reviewed regularly and approved by the Board to ensure compliance and policies that reflect best practice. Financial highlights Treasury policies and objectives The key financial information for the year was as follows: The Group Treasury policy is designed to reduce the financial risks faced by the – Revenue up 26% to £650.5m (2006: £517.6m). Group, which primarily relate to funding and liquidity, interest rate exposure and currency rate exposures. The Group does not engage in trades of a speculative – Underlying profit before tax up 14% to £85.5m (2006: £75.0m). nature. The Group uses derivative financial instruments to hedge certain – Underlying earnings per share up 13% to 46.1p. risk exposures. – Dividend up 12.5% to 18p (2006: 16p). The Group’s financial instruments comprise borrowings, cash and liquid resources and various other items such as trade receivables and trade payables that arise – £41m spent on share buy-backs for cancellation and the Employee Benefit Trust directly from its operations. Further details of financial instruments are provided in (EBT) (2006: £5m). Note 25 of these Report and Accounts. – Continued significant investment in the business though acquisitions, investment Interest rate risk in recruiting new teams and opening new offices. The Group finances its operations through a mixture of retained profits and bank Acquisitions borrowings, at both fixed and floating interest rates. During the year we completed a number of acquisitions both in the UK (in aggregate £12m (2006: £21.1m)), and overseas (in aggregate £31.5m (2006: £50.9m)) including: – On 7 January 2007, the Group acquired the share capital of Hepher Dixon Limited, a leading planning consultancy, for consideration of £5.1m. Goodwill on acquisition of £4.3m has been capitalised. Cash consideration of £2.8m was paid with £2.3m deferred cash consideration due over the next five years. – On 3 May 2007, the Group acquired the share capital of Christopher Rowland Limited, a residential property agency, for consideration of £4.0m. Goodwill on acquisition of £3.9m has been capitalised. Cash consideration of £2.1m was paid with £1.9m deferred cash consideration due over the next five years. – On 31 July 2007, the Group acquired Granite Partners LLC, a New York based property investment banking firm, for an initial consideration of US$54.0m, of which 75% was payable upon completion. The remainder is subject to a five year earn-out, such that the total consideration is capped at US$84.6m, dependent on the achievement of certain EBITDA targets over a two year future period. As at the balance sheet date, this remaining 25% has been accounted for as deferred consideration at a discounted amount of £5.8m. Goodwill of £22m and intangible assets of £5.0m have been capitalised. 51 Savills plc Our Business Report and Accounts 2007 Financial Review

Overall, the Group is run with low financial gearing which the Board believes is appropriate given the transactional nature of many of its revenue streams and its tangible asset base. Future liquidity The Group’s existing net cash balances available bank facilities and expected cash flows for the year provide the Group with the resources to fund operating and investment activities. At the year end the Group also had undrawn overdraft facilities of £16.8m (2006: £8.9m). Since the year end, £10m of the overdraft facility has been replaced with a £60m, 18 month, revolving credit facility which has been put in place to provide additional flexibility. Net assets Net assets continue to grow with an increase of 5% from 31 December 2006 to £223.6m. Goodwill has increased from £99.9m to £138.7m largely due to the £22m Liquidity risk of goodwill capitalised through the acquisition of Granite in July. The Group prepares an annual funding plan approved by the Board which sets out the Group’s expected financing requirements for the next 12 months. Pension scheme These requirements will be met with our existing cash balances, loan facilities During the year the Company and Trustees undertook a review of the Pension Plan and expected cash flows for the year. of Savills to ensure that it complied with the Employment Equality (Age) (Amendment No.2) Regulations 2006. From 29 January 2007 the Plan has fulfilled the Pension Act Foreign currency risk 2004 requirement of having at least one-third Member Nominated Trustees. Our policy is for each business to borrow in local currencies where possible. In particular, we financed the acquisition of Granite Partners LLC in part through The triennial valuation of the Plan as at 5 April 2007 has been completed and the a five year US$40m loan. The Group does not actively seek to hedge risks arising necessary certificates were signed on 29 May 2008. Full details are provided in from foreign currency transactions due to their non-cash nature and the high costs Note 10. associated with such hedging. Forward-looking statement Net interest In preparing this Review of Operations and Financial Review, whilst we have provided Net finance income is £2.1m (2006: £3.7m). Share buy-backs, investments, a detailed management commentary on our markets, activities and prospects, all acquisitions and lower disposal proceeds led to lower cash balances than in 2006. forward-looking statements and forecasts involve risk and uncertainty because they relate to events and depend upon circumstances that will occur in the future. Capital and shareholders’ interests Minority interests Minority interests increased to £5.9m (2006: £4.3m) and reflects acquisitions and increased profits from Cordea Savills during the year. Share capital During the year ended 31 December 2007, 189,000 shares were issued to participants in the Savills Executive Share Option Scheme (2001 Scheme) and 66,041 shares to participants in the Savills Sharesave Scheme. No shares were issued to the QUEST. 3.5m shares were repurchased for cancellation during Mark Dearsley the year. The total number of ordinary shares in issue at 31 December 2007 was Group Finance Director 131.8m (2006: 135.1m). Cash flow and liquidity The Group generated cash from operating activities of £102.8m (2006: £76.1m). At the year end, the Group had cash and cash equivalents of £110.7m (2006: £124.1m). At the same time it had borrowings of £33.2m (2006: £19.3m). However, the Group’s cash flow profile is highly seasonal, with significant cash outflows in the second quarter of the year for dividends, taxation and staff bonuses. The Group retains cash balances throughout the year in a number of subsidiaries. This reflects factors including: fiscal – minimising withholding tax on remittance where future investment is anticipated; commercial – where cash is required to support commercial contracts; regulatory – where our regulated businesses have minimum capital requirements; and where there are minority shareholders. This position remains under review to ensure the Group has the optimal capital structure.

Savills advises on acquisitions for the first Sharia-compliant fund in Germany

Germany Lio shopping centre, Berlin

Our German office provided comprehensive advice Among the flagship properties acquired, the Berlin and acquisition expertise to enable Arabinvestments shopping centre ‘Lio’ is perhaps the best known. Ltd, a Sharia-compliant fund, to purchase 13 high Offering 12,255 sq m with 300 parking spaces, this quality properties for a total of B433 million. is a successful, multi-level development located at a main railway station. Headline tenants include C&A, The relationship with Arabinvestments was founded Kaisers, Aldi and Elexia. The final portfolio comprises on expert advice relating to an effective strategy for 58% retail, 18% office, 21% other commercial and the German market. The fund targeted a yield profile 3% residential. The average lease is 11 years. of 6.2% and we focused on a bias towards retail properties, within a broad-based portfolio. All properties will be completed in 2006 – 2008 and have been acquired off-market from well-known German developers such as Züblin, Bauwert and OFB. 54 Savills plc Our Business Report and Accounts 2007 Risks and Uncertainties Risks and Uncertainties Facing the Business

Identifying and evaluating the risks we face is fundamental to the achievement of our objectives and the creation of long-term shareholder value. Details on our approach Identifying and evaluating the to risk management and internal control can be found on pages 73 to 74. risks we face is fundamental Our consideration of the key risks and uncertainties relating to the Group’s operations, along with their potential impact and the mitigating factors in place, is set out below. to the achievement of our It is not possible to mitigate fully all of our risks and other risks and uncertainties besides those listed below may also adversely affect the Group: objectives and the creation of Achieving the right market positioning in response to the needs of our clients long-term shareholder value. The markets in which we operate are highly competitive and we need to ensure that we continue to reflect the changing, increasingly global, needs of our clients. This need drives our continued strategy to grow geographically and to add greater diversity to the services offered by the Group. For example, our acquisition of Granite Partners LLC means that we can now support our existing European and Asia Pacific clients wishing to invest in the US and attract US investors looking to diversify elsewhere. This ongoing development of our geographic capabilities is aligned with our focus on further developing the service capabilities in the major global markets in which we operate. An example is our acquisition of Hepher Dixon Limited which has significantly strengthened our residential planning service offering in the UK. We talk more about these developments in detail in the ‘Group Strategy’ section on pages 20 to 21. Responding to changes in the markets in which we operate As witnessed during the second half of 2007, the property markets in which the Group operates are cyclical and may change for a number of reasons; for example, economic cycles, interest rates, and supply and demand of property in the market at any one time. 55 Savills plc Our Business Report and Accounts 2007 Risks and Uncertainties

Such changes may impact on different areas of our business and we recognise the need to respond rapidly to these. Our continual monitoring of market conditions and review of market changes against our Group strategy, is supported by the quarterly reforecasting undertaken by all of our businesses. Our continuing geographic and product diversification is designed to reduce the impact on the business overall of a downturn in any one area of the property market. Promoting and protecting the Savills brand Savills is a global brand with an excellent reputation in the markets in which it operates. We recognise that our brand strength is vital to maintaining market share and expanding into new markets. To this end, we have a brand management programme in place to ensure the brand’s positioning, identity and personality is clearly and consistently promoted.

Recruitment and retention of high calibre staff Continuing to meet expected standards of professional, regulatory and We recognise that our ability to attract, develop, motivate and retain people with the statutory compliance right skills to deliver our strategy is fundamental to the future success of our business. The success of any business providing professional advice is dependent on the Whilst we pride ourselves in our reputation for excellence as an employer and having quality and integrity of its people. Professional opinions provided in good faith may an incentivisation structure that rewards out-performance, we recognise that this is be open to challenge resulting in claims against the Group. an area in which we must continually improve. We are also required to meet a broad range of regulatory compliance requirements Key developments during 2007 included the further strengthening of our in each of the markets in which we operate. For example, in the UK, the Financial graduate recruitment programme, the implementation of a talent management Services Authority (FSA) regulates the conduct of our Savills Private Finance and and development strategy across the Group and a renewed focus on improving Cordea Savills businesses and The Royal Institution of Chartered Surveyors (RICS) the work/life balance of all employees. We talk more about these developments regulates a number of the services we provide through our Commercial and in detail in the ‘People’ section in ‘Our Responsibilities’ on pages 58 to 59. Residential businesses. Finally, we have a number of key statutory obligations including the protection of the health, safety and welfare of our employees and others affected by our activities. Each of our businesses have regulatory and statutory compliance resources in place and they maintain the internal processes and controls required to fulfil our compliance obligations. Our compliance environment, at all levels, is subject to regular review by internal audit and other assurance providers. Responding to political risks in the countries in which we operate globally Our continued geographic expansion means that our success depends in part on understanding and responding to the changing political and legislative conditions in the many countries around the world in which we do business. Extensive market research and due diligence is conducted whenever we enter new markets and the requirements of the Group Risk Management Policy, specifically the need to regularly evaluate the key risks to our business objectives, extend to all of our businesses globally. Managing our financial risks For all areas of financial risk we have an established financial control environment with clear responsibilities for operational and finance teams at all levels of the Group. The key financial risks and uncertainties are covered in the Financial Review on pages 50 to 51. 56 Savills plc Our Business Report and Accounts 2007 Our Responsibilities 57 Savills plc Our Business Report and Accounts 2007 Our Responsibilities

We advised on the £417.5m sale of a listed property trust with 91 UK wide properties

UK 91 properties, including Market Street, Guildford

As part of a tactic to achieve a premium to net asset GE Real Estate was chosen as preferred bidder and value of its property portfolio, the UK Balanced the sale of the company incorporating the portfolio Property Trust (UKBPT), advised by Cordatus was finalised at £417.5m, in Scotland’s largest Partners, asked us to provide an indicative figure commercial property transaction of 2007. which could be achieved for the 91 properties within One of the investments which formed part of the sale the Trust Having co-ordinated a UK-wide response comprises 67/70 North Street and 14/18 Market from our regional offices and sector specialist Street, Guildford, a corner block of five retail units departments, the Savills Edinburgh investment team arranged over two floors. The property is let to tenants provided the valuation within 48 hours. Within the including East, French Connection, Starbucks, constraints of an extremely tight timescale, set in the The Carphone Warehouse and The Clinkard Group context of what amounted to a takeover bid for the on full repairing and insuring terms with an average listed trust, UKBT agreed to an early and swift, unexpired term in excess of 13 years. targeted sales process. 58 Savills plc Our Business Report and Accounts 2007 Our Responsibilities Our Responsibilities

Since we last reported, our approach to corporate responsibility has further evolved, reflecting a greater understanding of what it means to our business and how we can benefit from its integration into our operations. We have assessed in further detail how our success depends upon our reputation, brand and relationship with a variety of internal and external stakeholders. The benefit to us of improved corporate responsibility includes: – being better able to retain and recruit the best people by meeting the expectations and values of current and future staff; – being able to retain and attract clients by listening and responding to their changing needs by developing new and innovative services; and – by supporting and enhancing the Savills brand globally through promoting ethical We continue to be a member of FTSE4Good, which measures the performance of and responsible attitudes. companies that meet globally recognised corporate responsibility standards. Our inclusion highlights our continued commitment to long term corporate responsibility. We are a values driven business, and as such remain committed to conducting all aspects of our business according to ethical, professional and legal standards. People The Board is responsible for ensuring our policies and standards reflect our corporate Savills’ vision and strategy is based on the belief that market leadership and superior values. Whilst these are more fully developed in the UK, we have, wherever possible, financial results can only be achieved by Savills having strong teams of outstanding attempted to develop and apply them in our overseas businesses. individuals. Our reputation in the market comes from clients’ interactions with our people who are smart, innovative, professional, responsive to changes in the market, As part of our risk management and internal control activities, these policies and highly motivated and dedicated to excellent client service. Great people make Savills standards are regularly reviewed and updated to reflect changes in legislation, best different and on-going recruitment and retention of outstanding individuals remains practice and business needs (see pages 73 to 74 for more details on our risk a top priority for our business. It is thanks to them that Savills continues to be a great management and internal control activities). We include a consideration of corporate place to work. responsibility related risks in our Key Risk Registers, which ensures that we are aware of and are addressing the potential risks that face our business (see pages 54 to 55 During the year a review of our Human Resources Strategy was undertaken to for details of our key Risks and Uncertainties). ensure that Savills retains its competitive edge in a challenging recruitment and retention market. In order to examine and validate our current position an Employee As indicated in last year’s report, we have set up a Corporate Responsibility working Engagement Survey was carried out. group consisting of senior operation and function heads within the Group and chaired by the Group Chief Executive. The focus of this working group is to integrate Employee Engagement Survey corporate responsibility into our day-to-day business. To do this, four key themes The survey was conducted by the Great Place to Work Institute (GPTW), a specialist have been adopted to help communication: People, Clients, Environment and assessment and consulting practice, and involved our UK and Irish employees. Community. Operational forums, reporting to the working group, have been set The main objectives of the survey were: up to focus on these areas. – to engage staff in shaping the future for people in the business; – to help Savills continue to be a great place to work; and – as a strategic driver to improve the recruitment and retention of staff. The level of participation achieved was 86%, one of the highest results recorded by GPTW. The survey confirmed that Savills is a welcoming, friendly employer where people are given the autonomy and responsibility to do a good job. It also highlighted that our employees are committed and extremely proud to work for Savills. The survey also helped us to identify where additional progress could be made and we have developed a strategy to deliver identified improvements. We will focus our efforts on better internal communication, clearer career development and continued improvement of our people management. Additional information to show how we are addressing these and other objectives is shown opposite. 59 Savills plc Our Business Report and Accounts 2007 Our Responsibilities

Graduate recruitment programme Building on the recent accolade of ‘Graduate Employer of Choice for Property 2007’ by The Times, a new graduate recruitment campaign was launched in the UK . To help facilitate the initiative, a graduate recruitment manager was appointed. The improved programme has created greater consistency in our recruitment of graduates across the businesses. In Ireland our business, Savills Hamilton Osborne King has initiated The Graduate Excellence ProgrammeTM which is a two and a half year structured learning programme designed to promote technical excellence and develop future leaders. This programme is underpinned by four pillars: – Business: Graduates develop the technical and professional competencies necessary to operate successfully in the business and the market place at large.

–Team:Graduates develop skills that will ensure that they operate as effective team Work/life balance players and contribute fully to our team’s success. Employees value more than just financial remuneration, and that providing a balanced – Individual: Graduates develop a thorough understanding of themselves and as and flexible approach to professional life can help enhance employee performance the programme advances they recognise the change in their behaviour, growth and enjoyment of their career. In the UK we have introduced an Enhanced Family and learning. Pay policy and most recently launched Additional Holiday and Loyalty Holiday Reward Schemes designed to recognise and reward the loyalty of those who – Values and behaviour: Graduates behave in line with our ethical framework make a long-term commitment and contribution to Savills. and values and understand why these are important to the business’ culture. Internal communication Developing talent Internal communication is an increasingly important activity in the development Attracting the right talent is an important component of our skills strategy. We must of the Group and a priority in its strategy to invest in the organisation and the brand. also retain and motivate high performers in the Group and ensure active employee As Savills grows so does the importance of managing the multitude of messages management. A vital part of this is helping to identify talent and to develop new flowing through and across the organisation. It is important that we help employees to skills amongst existing employees. We are in the process of implementing a talent both understand and undertake what is needed to provide the best possible service management and development strategy across the organisation in order to help to customers and to contribute to the ongoing success and growth of the business. build Savills’ future leaders. An internal communications department has been established to facilitate Recognition and reward communication within the business using both online and offline media. The competitive remuneration of our employees is key to retaining them. We regularly This newly centralised team is continuing to improve the effectiveness of employee review the way we reward and incentivise employees. Additional benefits include: communications such as a weekly e-newsletter, organisational announcements, performance and profit related bonus schemes, share save and share option surveys and suggestion schemes to engage employees and to expand the use of schemes, pension schemes, health, long term disability and life insurance. our intranet, Connect. Our bonus schemes and share schemes give employees the ability to share in the financial success of the Group and recognises and incentivises their direct Health and safety contribution to that success. The promotion of a healthy and safe workplace is a fundamental responsibility of all employers. Policies and procedures are in place to reduce risks and incidents within the workplace. We have dedicated health and safety executives who manage, audit and review health and safety, as well as implementing improvements where required. All employees have access to the resources they need to enable them to achieve their personal and company health and safety objectives. We provide workspaces, equipment, materials and systems of work that contribute to a safe and healthy environment for our employees. We strive for health and safety excellence and are not driven by compliance alone. Clients Savills ability to anticipate and deliver against client needs is inherent in our culture, and essential to our tradition of high quality service. Environmental and social issues are increasingly on our clients’ agendas and should be reflected in what we do. Improving client service Many of our offices are moving towards accreditation under ISO9001:2000 (Quality Management). This will not only make our operations more efficient, but will also make us more competitive when submitting bids and proposals, especially with The survey confirmed that Savills is teams focusing on public sector clients. a welcoming, friendly employer where people are given the autonomy and responsibility to do a good job. 60 Savills plc Our Business Report and Accounts 2007 Our Responsibilities

Supplier selection Our Responsibilities Our choice of suppliers can have an impact on economic, social and environmental factors. Whilst we do not use many suppliers, there are some areas of our business such as property management, where suppliers play an important role. In these areas, we are starting to put in place common standards for supplier selection. Environment Savills’ impact on the environment arises both from our operations and from the advice we provide to clients. The impact of our operations on the environment is low compared to many other industries, and so the most significant contribution we can make is through the quality of advice to clients. By helping clients to understand the environmental implications of their property decisions, we can have a much broader impact. We therefore see our specialist services, research and training as an important part of our environmental responsibility. Customer satisfaction through feedback and recognition Client services Savills’ teams both apply and are nominated for awards, the results of which Many of our services include several business strands that have a strong provide invaluable feedback about our work. For example, in November 2007 the environmental component. These include, for example, town and country Commercial Retail and Leisure team was awarded the ‘Estates Gazette Property planning, building consultancy, facilities management and strategic projects. Adviser of the year for Retail and Leisure’ award. We can only provide the environmental services that the market demands. Part of our Savills continually responds to clients’ needs by enhancing existing and introducing role, therefore, is to increase awareness of the benefits of addressing environmental new services. For example, our biggest Property Management team in Asia has and other issues. Savills were an Official Sponsor of the Think 07 exhibition and introduced: conference held in London in May 2007. The event gathered together the UK’s – Savills client portal: this enables clients to remotely access real time financial leading opinion formers and thinkers to debate: information about their property. Clients can choose to print tailor-made financial – How the built environment meets today’s changing environmental, economic and reports. There is also a platform to store and share meeting minutes, floor plans, social needs. fit out guides etc. This is also environmentally friendly as it eliminates the need to circulate minutes and other documents by hard copy. – What needs to happen to make the built environment truly ‘fit for purpose’ in a carbon-constrained world. – Online customer satisfaction surveys: customers and clients are able to complete the online survey allowing us to receive direct feedback on our services. – What sustainability means for the private sector and government bodies involved in regeneration. Responding to changing markets We recognise that the expectations about the built environment are changing – The wider responsibilities of the property and construction industries as we deal across our global market and that they are being driven both by market demand with the issues of climate change, urban renewal and redevelopment. and regulatory change. Our strategy is to create strong and diverse teams which Examples of what we are doing include: our Hong Kong office has introduced a new offer services to address the increasing legislative framework. For example, following way to manage properties and buildings within its portfolio which benefits the regulatory change in the UK, Savills has seamlessly incorporated Home Information environment. Its ‘Invisible Hands’ Environmental Care Programme has already Packs (HIP) into its UK residential operations. resulted in several awards including for energy efficiency and recycling. In addition, because many of our consultants are leaders in their respective fields, we are able to provide insight into future trends, such as the changing urban landscape. Our involvement in and support for the ‘Global Cities Exhibition’ at Tate Modern in London, is an example of how our expertise helps to inform discussions on the future of the built environment. This exhibition was free to the public and examined the recent changes in ten global cities, in both developed and emerging markets: Cairo, Istanbul, Johannesburg, London, Los Angeles, Mexico City, Mumbai, Sao Paulo, Shanghai and Tokyo.

Global Cities Exhibition The Global Cities Exhibition at Tate Modern in London is an example of how our expertise helps to inform discussions on the future of the built environment. 61 Savills plc Our Business Report and Accounts 2007 Our Responsibilities

As part of our commitment to our staff, we commissioned a community survey throughout our network of offices in the UK. The results of the survey prompted the company to re-examine its approach to Charitable Giving in the UK, promote existing, and introduce a number of new, initiatives. These include: – Give As You Earn Scheme: Savills operate a give as you earn scheme, which enables employees to donate to charities of their choice in a convenient and tax efficient manner. – Bonus Waiver Scheme: Employees are given the opportunity to donate to charities of their choice by waiving part of their annual bonus entitlement. Savills enhances any such donation by up to 10%. – Matching Scheme: Where an employee or group of employees raises money for a particular registered charity, on request, Savills may make a matching donation. In Summer 2007, the Savills Research team published a report on the Market for The amount available for the matching scheme is determined by the board of each Sustainable Homes. This considered the impact of the introduction of Environmental operating subsidiary on an annual basis. Performance Certificates and the Code for Sustainable Homes on the housing – Giving of Time: Where employees use their holiday entitlement to undertake work market. While the UK Government has set a policy objective that all new housing for registered charities, Savills will give the employees one extra half day of holiday should be zero-carbon by 2016, implementation will require this kind of research and for every full day of holiday committed to working for a charity up to a maximum of expertise which Savills can provide. two extra half days each year. Our operations Globally the Group is very active and involved in wide ranging activities including: While our environmental footprint is relatively small, we appreciate the value in reducing the impact of our activities on the environment to as low a level as is – In China, our Shanghai office supported children from needy families suffering from reasonably practicable. This aim supports our business goals in a number of ways. leukaemia through the Chinese Red Cross Foundation and its ‘Little Angel Fund’. For example, by identifying operational efficiencies our actions are often not only good – In Hong Kong, we have been awarded ‘The Caring Company Award’ organised by for the environment, but can also save us money too. In addition, it assists us in being the Hong Kong Council of Social Services which applies to the staff working on their an employer of choice. managed portfolios. The Group adopted an updated environmental policy statement in November – Savills Sydney are supporting ‘Earth Hour’ which is aimed at inspiring 2007, which sets out its current approach to achieving its environmental objectives. people to take action on climate change by turning off lights for one hour In the UK, a cross-company ‘Green Group’ was formed in March 2007 to stimulate on a designated date. and co-ordinate environmental initiatives nationwide. Likewise in Hong Kong, Savills Property Management Ltd has established a centrally co-ordinated approach – In Ireland, the graduates at Savills Hamilton Osborne King are encouraged as part to sharing environmental best practice, training and business development. of their training to give up two weeks of their time to work on charitable activities and Similar initiatives are being pursued on a business by business basis elsewhere this is a scheme that is being considered for inclusion within our graduate scheme in around the globe. the UK. A number of offices operate an environmental management system that complies Future plans with BS EN ISO 14001:2004. This is designed to achieve and demonstrate sound While we are pleased with the steps we have taken to formalise our approach environmental performance by controlling the impact of our activities and services to Corporate Responsibility in 2007, we recognise that there is more work to do. on the environment. In 2007, eight UK locations and our Hong Kong office have In particular, we have an opportunity to spread these practices, approaches adopted this international standard, with others to follow during 2008. and services more widely throughout the Group. We are also in the process of establishing performance measurement indicators across the Group, so that Information Technology forms an important part of any business. A prime focus of we can better monitor, measure and improve our performance in the future. the Green Group is to find solutions through our use of modern technology to reduce our environmental impact. Initiatives that have emerged from their work include those aimed at reducing power consumption, reducing waste and reducing the need for travel. We are also using new technology to deliver research information, marketing materials, web-based collaborative forums and marketing brochures to reduce paper, transport costs and waste. Community As we reported last year the Board of Savills plc remain committed to enabling and, where appropriate, encouraging its employees to be actively involved in their local communities. Part of the Savills culture includes playing a positive role in the communities in which we operate, and our reputation relies on being a key member of the community. An intrinsic part of this role is supporting charities and community related activities on both a local and national level, which also has a positive impact on our company profile and raises awareness of our brand in these markets. 62 Savills plc Our Business Report and Accounts 2007 Our Responsibilities

Developer acquires Victoria Station retail complex, confirming that shopping centres remain attractive assets despite current trends

UK Victoria Place shopping centre, London

High quality shopping centres continue to represent In total, Victoria Place covers 83,000 sq ft and excellent investment opportunities, despite current comprises around 45 units arranged over three floors. market trends. October 2007 saw Belfast-based Its significant growth potential is complemented by property developer William Ewart, advised by Savills, a range of strong tenants. The centre is currently fully purchase the long leasehold in the Victoria Place let to blue-chip companies including Sainsbury’s, shopping centre. The centre, which is part of London’s Next and Border. The total annual rental income is Victoria Station complex, was acquired from the estimated to be £5.3m. Metro Fund for £92.5m, reflecting a net initial yield of approximately 5.1%. 63 Savills plc Our Business Report and Accounts 2007 Our Responsibilities 64 Savills plc Our Governance Report and Accounts 2007 Contents

Our Business

Chairman’s Statement 12 Review of Operations 16 Financial Review 50 Risks and Uncertainties Facing the Business 54 Our Responsibilities 58

Our Governance

Board of Directors 66 Directors’ Report 68 Corporate Governance Report 70 Remuneration Report 75 Directors’ Responsibilities 84 Independent Auditors’ Report 85

Our Results

Consolidated Income Statement 88 Balance Sheets 89 Statements of Cash Flows 90 Statements of Recognised Income and Expense 91 Notes to the Financial Statements 92 Savills’ UK and International Offices 139 Our Governance Premium price achieved for exceptional house in Belgravia

UK Belgrave Place, London

Belgrave Place is a rare property: a relatively This is the second time in six years that Savills low building that provides high quality family have been involved in the sale of Belgrave Place. accommodation over only four floors in the We advised an overseas family on the sale of Belgrave Belgravia area of London. The house features six Place having recently assisted a member of that bedroom suites, four reception rooms, a kitchen, family acquire their London Residence. For the 2001 gym and staff accommodation. sale, we openly marketed Belgrave Place with a full marketing campaign which resulted in its sale to At start of 2007, we were appointed to carry out a the English family who completely refurbished the quiet placing exercise to gauge market demand for property and resided there until 2007. this exceptional property. Without employing any formal marketing or brochures, our experienced team generated interest from several parties. Ultimately, this interest translated into an informal tender and a premium price being paid by an overseas purchaser. 66 Savills plc Our Governance Report and Accounts 2007 Board of Directors Board of Directors

◆ 1. Peter Smith, Chairman of Savills plc, and Chairman of the Nomination Committee ■●◆7. Timothy Ingram, Senior Independent Non-Executive Director Aged 61, was appointed to the Board as a Non-Executive Director on 24 May 2004 and was elected Chairman Aged 60, was appointed to the Board on 27 June 2002. He is Chief Executive of Caledonia Investments plc and with effect from 1 November 2004. His other non-executive appointments are: N M Rothschild & Sons Limited a Non-Executive Director of The Sage Group plc, ANZ Bank (Europe) Limited and Alok Industries Limited. He was and The Equitable Life Assurance Society. He became a Non-Executive Director of Associated British Foods plc formerly Chief Executive of First National Finance Corporation, a main Board Director of Abbey National plc and on 28 February 2007 and in December 2007 he became Chairman of Templeton Emerging Markets Investment a Non-Executive Director of Hogg Robinson plc. Trust PLC where he had previously been a Non-Executive Director. He is a Member of the Board of the CBI. ▲ Formerly Peter was Senior Partner of PricewaterhouseCoopers LLP (PwC) and served for two years as Chairman 8. Robert McKellar, Chief Executive – Asia Pacific of Coopers & Lybrand International and as a member of the global leadership team of PwC. He served as Chairman Aged 48, was appointed to the Board as Group Finance Director on 1 June 2000 having served as Finance of RAC Plc and was a Non-Executive Director of Safeway plc. Director of Savills Commercial Limited since December 1994. He was appointed Chief Executive – Asia Pacific on 31 March 2005. ▲ 2. Aubrey Adams, Group Chief Executive ●◆■ Aged 58, was appointed to the Board on 12 February 1990 and appointed as Managing Director on 19 December 9. Charles McVeigh, Independent Non-Executive Director and Chairman of the Remuneration Committee 1990 and Group Chief Executive on 1 June 2000. He holds Non-Executive Directorships with Pinnacle Regeneration Aged 65, was appointed to the Board as a Non-Executive Director on 1 August 2000. He is currently Chairman Group plc and Unitech Corporate Parks plc. He is also a Trustee of The Wigmore Hall. With effect from 1 April 2008, of Citigroup’s Corporate and Investment Banking – Global Wealth Management Partnership, having until recently he will also be Non-Executive Chairman of Air Partner PLC. been Co-Chairman of Citigroup’s European Investment Bank (formerly known as Schroder Salomon Smith Barney). He also serves on the Board of EFG-Hermes and is a member of both the Development Board and Advisory Council ▲ 3. Mark Dearsley, Group Finance Director of the Prince’s Trust. Formerly he has served on the Boards of Witan Investment Company plc, Clearstream, the Aged 46, was appointed to the Board on 3 September 2007 as Group Finance Director. He is also the Executive London Stock Exchange, LIFFE and British American Business Inc; he was also appointed by the Bank of England Director responsible for Cordea Savills. Prior to joining Savills he was Finance Director of Aviva Europe & International, to serve on the City Capital Markets Committee and the Legal Risk Review Committee. He was also a member of a division of Aviva plc. the Fulbright Commission. ■●◆4. Martin Angle, Independent Non-Executive Director ▲ 10. Rupert Sebag-Montefiore, Director Aged 57, was appointed to the Board on 2 January 2007. He is a Non-Executive Director of OAO Severstal, Dubai Aged 54, joined Savills in 1980 and was appointed to the Board on 31 May 1995. On 26 October 2004, he became International Capital LLC, Celerant Consulting (Chairman), and the National Exhibition Centre (Chairman). Formerly, he Chairman of Savills (L&P) Limited, having served as its Managing Director since May 2000. He is the Executive Director has served on the Board of TI Group plc, where he was Group Finance Director, and held various executive roles with responsible for the UK residential and general practice surveying business. In January 2001, he was appointed to the Terra Firma Capital Partners and its portfolio companies, including The Waste Recycling Group (Executive Chairman) Board of Fastcrop plc (the holding company of Primelocation.com), an internet property aggregator site and was and Le Meridien Hotel Group (Deputy Chairman). appointed Chairman of that company on 3 November 2004. He served as a Non-Executive Director of Adventis Group plc during its AIM flotation and is a Governor of Bournemouth University. ▲ 5. Jeremy Helsby, Director Aged 52, joined Savills in 1980 and was appointed to the Board in 1999. He is the Executive Director responsible for ■●◆11. Fields Wicker-Miurin OBE, Independent Non-Executive Director and Chairman of the Audit Committee the UK and European Commercial business. He became Chairman of Savills Commercial Limited on 1 January 2001, Aged 49, was appointed to the Board on 27 June 2002. She is co-founder and partner of Leaders’ Quest and chairs is Chairman of Savills Europe and a Director of Savills Asia Pacific Limited. On 18 October 2007, it was announced its Advisory Board. She is a Non-Executive Director of the CDC Group and on the Board of the UK’s Department for that he will be appointed as the new Group Chief Executive Officer of Savills plc when Aubrey Adams retires. Business Enterprise and Regulatory Reform. She is also a governor of King’s College London where she chairs the He is progressively taking over day-to-day responsibility for operations and will be formally appointed with effect audit committee. Previously she was Chief Financial Officer and Director of Strategy at the London Stock Exchange. from 7 May 2008. ▲ 6. Simon Hope, Director Aged 43, joined Savills in September 1986 and was appointed to the Board on 1 May 1999. He is the Executive Director responsible for our Capital Markets team. He is head of Savills Commercial Investment, a Director of Savills Finance Holdings plc and a member of the Charities Fund Property Board.

■ Audit Committee ◆ Nomination Committee ● Remuneration Committee ▲ Executive Sub Committee 67 Savills plc Our Governance Report and Accounts 2007 Board of Directors

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91011 68 Savills plc Our Governance Report and accounts 2006 Directors’ Report Directors’ Report

The Directors present their Report and the Audited Financial Statements for the year Share capital and major shareholdings ended 31 December 2007. The share capital of the Company is detailed on page 131. The Company has only one class of share capital formed of ordinary shares. Principal activity All shares forming part of the ordinary share capital have the same rights and Savills plc is a holding company. Its principal subsidiaries’ activities are transactional each carries one vote. There are no unusual restrictions on the transfer of ordinary advice, consultancy and management services in connection with commercial, shares.The Board may refuse to register the transfer of (i) a certificated share which is residential and agricultural property, and property related financial services and not fully paid provided the refusal does not prevent dealings on an open and proper fund management. basis and (ii) an uncertificated share in accordance with the regulations governing the operation of CREST. The Board may also close the register of shareholders for up to Dividends 30 days effectively suspending the registration of all transfers; however, in respect of The profit attributable to shareholders is £55.3m (2006: £57.7m). An interim uncertificated shares, consent from CREST would be required for such a closure. dividend of 6.0p (net) per share amounting to £7.3m (2006: £6.2m) was paid. It is recommended that a final dividend of 12.0p (net) per share, amounting to As at 11 March 2008, the Company had been notified of the following interests £14.5m (2006: £13.4m) be paid on 14 May 2008 to shareholders on the register in the Company’s ordinary share capital in accordance with Chapter 5 of the at 11 April 2008. UK Listing Authority’s Disclosure and Transparency Rules:

Principal developments Shareholders Number of shares % The development of the business is detailed in the sections entitled Review Standard Life Investments Limited 25,172,066 19.09 of Operations and Financial Review on pages 16 to 51. Lloyds TSB Group Plc 13,189,094* 10.00 The principal risks and uncertainties are detailed on pages 54 to 55. The Goldman Sachs Group Inc 5,222,106 3.96 Directors Legal & General Group Plc 5,156,454 3.92 Short biographical details of the current Directors are shown on pages 66 to 67. All served throughout the year except for Martin Angle and Mark Dearsley, who *Included 10,837,834 shares held on behalf of The Savills plc 1992 Employee Benefit Trust. were appointed as Directors on 2 January 2007 and 3 September 2007 respectively. As at 31 December 2007, The Savills plc 1992 Employee Benefit Trust (the EBT) and the Qualifying Employee Share Trust (QUEST) held 11,164,834 shares and In accordance with the Company’s Articles of Association, having been appointed 2,154 shares respectively. Any voting or other similar decisions relating to these since the last Annual General Meeting (AGM), Mark Dearsley will retire at this year’s shares are taken by the trustees, who may take account of any recommendation of AGM and, being eligible, offer himself for re-election. The Directors retiring by rotation the Company. The EBT waives all but 0.01p per share of its dividend entitlement and at this year’s AGM, having been in office for three years, are Jeremy Helsby, Simon the QUEST waives all of its dividend entitlement. For details of the EBT please refer Hope and Peter Smith, and being eligible, they will offer themselves for re-election. to Note 2 in the accounts. The Board is satisfied that each Director who is standing for re-election continues to show the necessary commitment and to be an effective member of the Board due Purchase of own shares to their skills, expertise and business acumen. In accordance with the Listing Rules at the AGM on 9 May 2007, the shareholders Interests in the issued share capital of the Company held at the beginning and end gave authority for a limited purchase of Savills shares for cancellation of up to 10% of the year under review by those who were Directors at 31 December 2007 or their of the issued share capital. During the year 3.5m shares (representing 2.6% of the families are set out on page 79 of the Remuneration Report. Details of Directors’ issued share capital) were purchased for cancellation under the programme for a share options are given in the Remuneration Report on pages 80 to 81. It is the total consideration of £21.8m. Remuneration Committee’s policy that each Executive Director should retain 105,000 The Board proposes to seek shareholder approval at the AGM on 7 May 2008 to shares in the Company except for the Group Chief Executive who should retain renew the Company’s authority to purchase its own ordinary shares of 2.5p each for 150,000 shares. cancellation or to be held in treasury. Details of the proposed resolution is outlined in the Notice of Annual General Meeting dispatched to shareholders with this Annual Report and Accounts (AGM Circular). 69 Savills plc Our Governance Report and Accounts 2007 Directors’ Report

Updating the Articles of Association Change of control The Board also proposes to seek shareholder approval at the AGM on 7 May 2008 There are no significant agreements which take effect, alter or terminate in the event to update the Articles of Association to take account of changes introduced and to of change of control of the Company except that under its banking arrangements, be introduced by the Companies Act 2006. Details of the proposed resolution and a change of control may trigger an early repayment requirement. changes are outlined in the AGM Circular. Employees Annual General Meeting The Directors recognise that the quality, commitment and motivation of Savills The Notice convening the Annual General Meeting, to be held at 20 Grosvenor Hill, staff is a key element in the success of the Group, see pages 58 to 59 for Berkeley Square, London W1K 3HQ at 12 noon on 7 May 2008, is contained in the more information. Employees are able to share in this success through bonus AGM Circular sent to shareholders with this Annual Report and Accounts. schemes and share plans, see pages 78 to 79 for more information. The Group encourages its employees to develop their skills through training and continued Creditors’ payment policy professional development. The Group does not follow any specified code or standard on payment practice. It is the policy of the Group to provide employment on an equal basis irrespective However, the Group aims to settle supplier accounts in accordance with the of gender, race, age, marital status, sexual orientation, religion or religious belief, individual terms of business agreed with each supplier. There were 37 days nationality, colour or disability. purchases outstanding at the end of the year for the Company (2006: 17 days). Auditors Charitable donations and political contributions In accordance with Section 385 of the Companies Act 1985, a resolution for the The amount paid to charitable organisations during the year was £68,878 (revised re-appointment of PricewaterhouseCoopers LLP as auditors of the Company is 2006: £72,285). In addition to the donations above, during the year under review, to be proposed at the forthcoming AGM. the Group operated a ‘Give As You Earn’ scheme whereby employees can donate a portion of their monthly salary to a registered charity. The Group also operated a By order of the Board bonus waiver whereby employees may elect to waive an element of annual bonus in favour of registered charities of their choice upon which the Group augments the donation to the chosen charity by 10%. These additional Group contributions totalled Mark Dearsley £43,265 (2006: £50,392) during the year. There were no political contributions Group Finance Director (2006: £nil). 11 March 2008 Corporate Governance Registered Office: The Corporate Governance Report, the Remuneration Report and the Directors 20 Grosvenor Hill Responsibilities are set out on pages 70 to 84 and form part of this report. Berkeley Square London W1K 3HQ 70 Savills plc Our Governance Report and Accounts 2007 Corporate Governance Report Corporate Governance Report

The Board is responsible to shareholders for the management and control of the Functioning of the Board Company’s activities and is committed to high standards of Corporate Governance. The Directors receive management information, including financial, operating and The principal governance rules applying to UK companies listed on the London Stock strategic reports, in advance of Board meetings. During the year the Board held Exchange are contained in the Combined Code on Corporate Governance adopted seven scheduled meetings and also spent a day and a half reviewing and agreeing by the Financial Reporting Council in June 2006 (The Code). This report explains how the future Group strategy. Attendance by Directors at scheduled meetings is the Company has complied with the provisions of the Code and explains where the outlined in the attendance of meeting table on page 72. During the year five other Company has departed from them. ad hoc Board meetings were also held to deal with specific matters. When unable to be present in person, Directors may attend by audio or video-conference. The Board considers that, throughout the period under review, with the exception When Directors are not able to attend Board or Committee meetings, their of one area detailed below (see Board composition and balance), the Company comments on the papers to be considered at that meeting are relayed in advance has complied with the provisions recommended in Section 1 of the Code which to the relevant Chairman. The Board has adopted a formal schedule of matters applies to the financial period that is the subject of this Annual Report and Accounts. specifically referred to it for decision. These matters reserved for the Board include: Board composition and balance – approval and management of Group strategy; The Board presently comprises a Non-Executive Chairman, four Independent – review of Group policies and codes of conduct; Non-Executive Directors and six Executive Directors. The biographies of the current Board members appear on pages 66 to 67. – approval of the annual operating and capital expenditure budgets and any material changes; The posts of Chairman and Group Chief Executive are separated. The Chairman is responsible for the workings and leadership of the Board and for the balance – review of performance, assessed against the Group’s strategy, objectives, of its membership. The Chief Executive is responsible for leading and managing business plans and budgets; the business within the authorities delegated by the Board. – approval of interim and preliminary announcements and the Annual Report Martin Angle (who was appointed to the Board on 2 January 2007 and subsequently and Accounts; appointed to the Audit, Nomination and Remuneration Committees on 30 January – approval of the dividend policy; 2007), Timothy Ingram, Fields Wicker-Miurin and Charles McVeigh are independent Non-Executive Directors. The Board considers that the Non-Executive Directors are – approval of any significant changes in accounting policies or practices; independent of management and have no business or other relationship which could – extension of the Group’s activities into new/other geographic areas; interfere materially with the exercise of their judgement. – approval of any significant acquisitions or investments; Mark Dearsley joined the Board as Group Finance Director on 3 September 2007. – any decision to divest any Group business; On 18 October 2007, it was announced that Aubrey Adams would retire from the Board at the Annual General Meeting on 7 May 2008 and he would be succeeded – delegation of the appropriate authorities and agreeing terms of reference for its as Group Chief Executive by Jeremy Helsby. various committees; The Board is not currently compliant with the provision of the Code which requires – delegation of the appropriate authorities to the Executive Sub Committee; and that at least half the Board, excluding the Chairman, be independent Non-Executive – the appointment of new Directors. Directors. Following the retirement of Aubrey Adams, the Board will revert to having a Non-Executive Chairman, four independent Non-Executive Directors and five The Non-Executive Directors meet separately at least twice each year without the Executive Directors. The Board considers that under Savills current operational presence of the Executive Directors and also meet without the Chairman, at which structure it is appropriate for the key members of the executive management team time the Chairman’s performance is appraised. to be members of the Savills plc Board and that there is an appropriate balance There is an approved procedure for Directors to take independent professional between Executive and Non-Executive Directors and that no individual or small group advice at the Group’s expense. In addition, all the Directors have access to the of individuals dominates the Board’s decision making. The Non-Executive Directors advice and services of the Company Secretary. have a wide range of business experience and expertise and provide a strong independent element to the Board. The Board will keep under review the need for any changes to the composition of the Board. Since 1 November 2004, Timothy Ingram has been the Senior Independent Director. He is available to shareholders if they have concerns which have not been addressed by contact with the Chairman, Group Chief Executive or Group Finance Director. 71 Savills plc Our Governance Report and Accounts 2007 Corporate Governance Report

Board committees The Committee is authorised to investigate any matter within its terms of reference The Board has delegated certain authorities to committees each with formal terms and, where necessary, to obtain external legal or other independent professional of reference. The terms of reference for the Audit, Nomination and Remuneration advice. The Committee’s activities during the year have included: Committees were reviewed and updated during the year and are available on – reviewing the half-year and annual financial statements with particular reference request or on the Company’s website (www.savills.com). The members of each to accounting policies, together with significant estimates and financial reporting committee are indicated on pages 66 to 67. The principal committees of the Board judgements and the disclosures made therein; are as follows: – reviewing the management representations made to the external auditors and Nomination Committee the Company’s procedures to ensure all relevant information has been disclosed; The Committee consists of the four independent Non-Executive Directors and the Chairman. The Committee is chaired by Peter Smith. The Committee meets at least – discussing any issues arising out of the interim review or the full year audit with once a year and otherwise as required to nominate candidates for the approval of the external auditors (in the absence of management where appropriate); the Board to fill vacancies or new positions on the Board of Directors and to make – monitoring and reviewing the effectiveness of the internal audit function and recommendations to the Board on certain matters including its composition and reviewing all reports prepared by the internal auditors and assessing the balance. The Committee met twice in 2007. management’s responsiveness to such reports; The Company’s Articles of Association provide that Directors must submit – making recommendations to the Board with regard to continuing the appointment themselves for re-election every three years and that newly appointed Directors and remuneration of the external auditor; overseeing the Company’s relations with must submit themselves for re-election at the first Annual General Meeting after their the external auditor and the effectiveness of the audit process; and appointment. In making recommendations to shareholders for the re-appointment of any Director, the Nomination Committee considers that Director’s performance – reviewing, and assessing the effectiveness of, the Group’s internal financial and ongoing contribution to the success of the Company and makes its relevant controls together with its internal control and risk management systems. recommendation to the Board. The Committee also considers on an ongoing basis the independence of the During the year the principal activities undertaken by the Committee were the external auditors and has established policies to consider the appropriateness identification of a successor to Aubrey Adams as Group Chief Executive following the or otherwise of appointing the external auditors to perform non-audit services. indication of his wish to retire in 2008 and the recommendation of the appointment As detailed on page 69 the external auditors are PricewaterhouseCoopers LLP, of Mark Dearsley as Group Finance Director. External consultants assisted in both who have provided certain non-audit services to the Company, principally advice matters: Hanson Green assisted in the development of a job specification for the on treasury, taxation and market analyses in particular in connection with the US new Group Chief Executive, consideration of potential external candidates and the market. The Audit Committee is satisfied that such work was best undertaken assessment of internal candidates and Spencer Stuart carried out the search for by PricewaterhouseCoopers LLP and their objectivity has not been impaired by the Group Finance Director. reason of this further work. Audit Committee The internal auditors are KPMG who serve the Group on a global basis. The UK and The Committee consists of the four independent Non-Executive Directors. most non-UK businesses have established whistleblowing procedures to enable The Committee is chaired by Fields Wicker-Miurin and met four times during the year. employees to raise concerns about possible improprieties in financial reporting and The Non-Executive Chairman, Group Chief Executive, Group Finance Director, other other matters on a confidential basis. The consistency of arrangements outside the Executive Directors, Group Financial Controller, the internal auditors, the external UK continue to be developed with the issue of a Group-wide whistleblowing policy auditors, Group Risk Director and other senior executives of the Group may be which sets out clear standards and procedures for all Group companies to follow. invited to attend meetings of the Committee, but are not members. The Board considers that the members of the Audit Committee collectively have sufficient recent and relevant financial experience to carry out the functions of the Committee. 72 Savills plc Our Governance Report and Accounts 2007 Corporate Governance Report

Remuneration Committee Attendance at meetings The Committee consists of the four independent Non-Executive Directors. Directors’ attendance at scheduled Board and Committee meetings convened in The Committee is chaired by Charles McVeigh and meets at least twice a year the year ended 31 December 2007 was as follows: to determine Company policy on senior executive remuneration and to agree the Audit Remuneration Nomination detailed remuneration packages of the Executive Directors. The Remuneration Board Committee Committee Committee Committee takes the advice of external consultants from time to time and did Number of meetings in year 7 4 6 2 so during the year from Towers Perrin. The Group Chief Executive is consulted on the remuneration packages of the other Directors and senior executives and Attended Attended Attended Attended attends remuneration discussions by invitation, except when his own position is Non-Executive Directors being discussed. Given the central part that remuneration plays in the success Peter Smith 7 2 of the Group, the Chairman is also invited to attend meetings of the Committee. The Committee does not deal with the fees paid to the Non-Executive Directors Martin Angle which are decided by the Executive Directors. The Report of the Remuneration (appointed 2 January 2007) 7 4 5 1*** Committee is set out on pages 75 to 83. Timothy Ingram 7 3 6 2 Executive Sub Committee Fields Wicker-Miurin 7 4 4 2 Until January 2008, Savills plc operated an Executive Sub Committee (ESC), which comprised the Group Chief Executive and the Executive Directors. Any senior Charles McVeigh 6 4 5 1 executive of the Group could be invited by the Committee from time to time to Executive Directors attend all or part of the Committee’s proceedings. Under the leadership of the Group Chief Executive, the ESC reviewed the day-to-day operations of the Group Aubrey Adams* 7 including risk management, authorised certain investments, monitored Group Mark Dearsley* performance and dealt with other specific matters delegated to it by the Board. (appointed 3 September 2007) 3** The Committee usually met at least once between Board meetings and the minutes of the ESC were circulated to all Board members in advance of full Board meetings. Jeremy Helsby* 7 With effect from February 2008, the ESC was superseded by a Group Executive Simon Hope* 7 Board (GEB) with revised and broader terms of reference to clarify its role as the Robert McKellar* 7 key executive committee in the Group. The GEB comprises the Group Chief Executive, the Group Finance Director, the managing directors of the main Rupert Sebag-Montefiore* 7 operating subsidiaries and the Company Secretary. * Members of the ESC. The ESC met 11 times during the year. Mark Dearsley was appointed to the Committee on 27 November 2007. ** Three Board meetings were held between 3 September 2007 and 31 December 2007. Board performance and evaluation *** Martin Angle was appointed to the Nomination Committee on 30 January 2007, one Nomination Committee was held between A formal review of Board performance was undertaken by an external consultant his appointment and 31 December 2007. who carried out an evaluation process which reported in March 2006. At its meeting on 6 March 2007 members of the Board reviewed progress and concluded that the Board and its main committees were working satisfactorily. A further internal exercise was carried out at the end of 2007 to identify areas where Board procedures might be further improved and the findings were reported at a meeting on 29 January 2008. The Board will continue to keep its performance under review and currently anticipates another review will be carried out in 2008 following the change in Group Chief Executive. 73 Savills plc Our Governance Report and Accounts 2007 Corporate Governance Report

Insurance cover Internal control and risk management The Company purchases insurance to cover its Directors and officers against their The Board recognises that it has overall responsibility for establishing and maintaining costs in defending themselves in civil legal proceedings taken against them in that the Group’s system of risk management and internal control to safeguard the capacity and in respect of damages resulting from the unsuccessful defence of any shareholders’ investment and the Group’s assets, and for reviewing its effectiveness. proceedings. The insurance does not provide cover where the Director has acted The system of risk management and internal control is designed to manage but not fraudulently or dishonestly. to eliminate the risk of failure of the Group to meet its business objectives and as such only provides reasonable but not absolute assurance against material loss. As permitted by company law at the date of this report it is proposed that indemnities will shortly be granted to each of the Directors in 2008. No such indemnities had The Board confirms that it has conducted a review of the effectiveness of the system been granted at 11 March 2008. of risk management and internal control and that the system has been in place throughout the year and up to the date of approval of the accounts and complies Directors’ remuneration with the 2005 Turnbull guidance. The Remuneration Report is set out on pages 75 to 83. The Remuneration Report Reflecting a commitment to the continued development of our system for risk will be put to shareholders at the Annual General Meeting in 2008. management and internal control, a Group Risk Management Function was established during 2007 to support the activities of the Board, Group Risk Committee Relations with shareholders and operating subsidiaries. The Board seeks to maintain an open relationship and the Group Chief Executive and Group Finance Director have a regular programme of meetings with analysts Key elements of the Group’s system of risk management and internal control during and maintains a dialogue with shareholders which ensures that the Board is aware 2007 were: of shareholder sentiment. Meetings are held with major institutional shareholders – A comprehensive system for planning and reporting the performance of each regularly and include presentations at the time of the Company’s preliminary operating subsidiary. The Board met regularly and reviewed the Group’s overall announcement of annual and interim results. The Senior Independent Director makes results against plan and the previous year. The Group regularly updated its himself available for the investor meetings held by the Group Chief Executive or forecast of results. Clear responsibilities were given to operational and financial Group Finance Director upon request. The Board also reviews a report at least once managers for the maintenance of effective financial controls and the production each year from its corporate broker on feedback from investors and the market’s of accurate and timely financial management information; view of the Company. – The regular review and assessment of the performance of the business The Annual Report and Accounts and Interim Statement are sent to all shareholders. including in relation to risk management and internal control by the Board The participation of private shareholders at the AGM is welcomed and all and its sub committees, including the Executive Sub Committee; shareholders are invited to attend the Company’s AGM, which is attended by the Board. In accordance with the Code, the Chairman declared the level and manner – Attendance at operating subsidiary and associate boards by Executive Directors. of voting of proxies lodged on each resolution at the AGM held during the year. These boards and their associated committees also meet regularly and have The Chairmen of the Board’s principal committees were present at the 2007 AGM formal reporting structures. Directors of operating subsidiaries were also closely to answer shareholders’ questions as required. The Directors aim to give as much involved in the day-to-day business of their respective operations identifying key notice of the AGM as possible which will be at least 21 days, as required by the risks and appropriate action to be taken; Company’s Articles of Association. In practice, this Report and Notice of AGM – A Group Risk Management Policy which sets out our process for identifying, are being sent to shareholders more than 20 working days before the AGM as evaluating, assessing, and managing the key risks to our business objectives, required under the Code. The Notice of Annual General Meeting of shareholders supported by an appropriate organisational structure and clearly defined and explanatory notes are sent to shareholders with this report. management responsibilities; Information about the Company is also available on the website at www.savills.com 74 Savills plc Our Governance Report and Accounts 2007 Corporate Governance Report

– A Group Risk Committee which reported to the Executive Sub Committee and The Audit Committee on behalf of the Board has reviewed the effectiveness of was tasked with the review, discussion and challenge of key risks reported, the system of risk management and internal control. In performing its review of the ongoing Group-wide development of internal control, and the monitoring of effectiveness, the Audit Committee considered the following reports and activities: internal audits and other sources of assurance on the effectiveness of internal – Internal audit reports on the review of priority controls across the Group and controls. The Committee consists of the Group Chief Executive, Group Finance the monitoring of management actions arising; Director, senior subsidiary business management and Group function heads including the Group Risk Director; – Management’s own assessment of the performance of the system of risk management and internal control during 2007; – A framework of delegated authorities and control procedures, as defined by Group and subsidiary business policies, processes and standards, which are – Reports from the Group Risk Committee including reporting on Group-wide subject to regular review by the Group Risk Committee in light of key risk reporting key risk assessment activity and annual control self assessment findings; and and our changing risk environment; and – Reports from the External Auditor on any issues identified during the course – A programme of assurance activities which assess the effectiveness of our internal of their work. controls in respect of our key risks which includes: The Audit Committee confirms that necessary actions have been or are being – A programme of internal audits undertaken in accordance with an annual taken to remedy any matters identified from their review. risk based plan approved by the Audit Committee. The plan is designed to ensure that internal audit reviews are focused on priority controls across Going concern the Group to provide both independent review and challenge on the After making enquiries, the Directors have reasonable expectation that the Group effectiveness of these controls; and the promotion of good practice and has adequate resources to continue in operational existence for the foreseeable consistency in their development; future. For this reason, they continue to adopt the going concern basis in preparing the Accounts. – Compliance programmes within our regulated businesses in support of the Group’s commitment to conduct its business responsibly and in accordance By order of the Board with all laws and regulations to which its business activities are subject;

– An annual self assessment and certification by management of the existence and effectiveness of the controls within each of our operating subsidiaries. Peter Smith The results were collated for review and challenge by the Group Risk Chairman Committee and onward reporting to the Executive Sub Committee and 11 March 2008 Audit Committee; and

– There were also procedures available to employees who are concerned about possible impropriety, financial or otherwise, and who may wish to ensure that action is taken without fear of victimisation or reprisal. 75 Savills plc Our Governance Report and Accounts 2007 Remuneration Report Remuneration Report

Remuneration Committee Senior executives and Executive Directors may participate in the Savills Deferred The Remuneration Committee keeps under review the remuneration of Executive Share Bonus Plan, the Savills Executive Share Option Scheme (2001), the Savills Directors and other senior executives with the aim of effectively supporting a Share Incentive Plan and the Savills Sharesave Scheme; details of which are given performance culture and continuing to motivate, attract and retain executives of the on pages 78 and 79. Senior executives and Executive Directors were also eligible highest calibre. The role and composition of the Committee is detailed on page 72. for participation in the Savills plc 1992 Executive Share Option Scheme (the ESOP), which has now expired for the purposes of new grants. Details of any awards made Remuneration policy to Executive Directors under these schemes are given on pages 80 to 81. It is essential for the Group to provide remuneration packages which attract, retain Senior employees, excluding the Executive Directors, may also participate in the and motivate Directors and employees of the highest quality. Benefit packages Savills Deferred Share Plan, details of which are given on page 78. awarded to Directors are structured to provide a competitive mix of performance and non-performance related remuneration. The arrangements are reviewed on Executive salary and bonus an regular basis. The salary and bonus arrangements of the Executive Directors are structured by reference to their primary role within the Group. The base salaries for all Executive Basic salary Directors are well below market averages except for the Group Finance Director. Savills’ business philosophy is founded on the premise that employees should The bonuses for Executive Directors are determined as follows: be motivated through highly incentive-based (and therefore variable) remuneration packages. Salaries for fee-earners, particularly more senior ones, are generally below Aubrey Adams (Group Chief Executive) – his bonus is determined by the market averages for similar businesses and a greater emphasis is placed on the Remuneration Committee having regard to the Group’s performance, his own performance related bonus in the total remuneration package. These lower salary contribution and remuneration of other Executive Directors. levels help to limit related costs (e.g., pension) and also have the effect of reducing Mark Dearsley (Group Finance Director) – he participates in a Discretionary the fixed element of the business cost base. For support staff, salaries are generally Bonus Scheme established by the Remuneration Committee which has an annual set closer to market levels. Salaries are reviewed annually (although not necessarily maximum value of 150% of his basic salary. As part of his joining arrangements in increased) by each operating subsidiary for all employees. August 2007, he was guaranteed a bonus of £250,000 for the year to 31 December 2007 and 75% of his maximum bonus entitlement for year to 31 December 2008. Performance related bonus Where the bonus is not guaranteed it is paid subject to its achieving personal and In general, each operating subsidiary has a fee-earner discretionary bonus scheme Company performance measures. Part of the bonus is paid in deferred shares. where the annual bonus pool available for distribution is directly related to the profit of that subsidiary after charging all costs (pre-bonus) including central overheads Jeremy Helsby (Chairman,ಝSavills Commercial Limited) – the Remuneration and finance charges. In the main, the bonus pool for each subsidiary company is Committee receives a recommendation from Savills Commercial Limited directly generated by a formula. In the UK and Europe, the amounts available for distribution related to the profitability of the UK and European commercial operations. The Group within these bonus pools were calculated in bands between 30% of the pre-tax Chief Executive may also make a recommendation for a bonus to be paid related to and pre-bonus profits through to 65% for excellent performance, based on the the overall growth and performance of the business. Part of the bonus is paid in achievement of predetermined thresholds. These bands are reviewed regularly. deferred shares. Awards to fee-earning employees are assessed by reference to fee earning Rupert Sebag-Montefiore (Chairman, Savills (L&P) Limited) – the Remuneration achievements, profitability of the individual’s area of responsibility, contribution ಝ Committee receives a recommendation from Savills (L&P) Limited which is directly to business development and managerial responsibilities. related to the profitability of that company. The Group Chief Executive may also Awards to support staff are assessed according to the performance appraisal make a recommendation for a bonus to be paid related to the overall growth and of the individual and generally related to both salary and market levels. performance of the business. Part of the bonus is paid in deferred shares. Similar arrangements are in place in the US and Asia Pacific, tailored to the particular Simon Hope (Head of Capital Markets) – the Remuneration Committee receives a requirements of each individual market. recommendation from Savills Commercial Limited directly related to his fee-earning activities and contribution to the profit of the Commercial business. The Group Chief A portion of the bonus of senior employees and Executive Directors may be Executive may also make a recommendation for a bonus to be paid related to the deferred for a period of not less than three years and awarded in shares under overall growth and performance of the business. Part of the bonus is paid in deferred the Savills Deferred Share Bonus Plan, details of which can be found on page 78. shares. In 2007, his discretionary bonus arose from his contribution to Cordea Savills and to the implementation of Group strategy. 76 Savills plc Our Governance Report and Accounts 2007 Remuneration Report

Robert McKellar (Chief Executive, Asia) – his bonus is determined by the The remuneration package for each of the Directors is shown on pages 75 and 76. Remuneration Committee on the basis of a recommendation from the Group The bonus entitlements shown were subject to the above performance criteria. Chief Executive and relates principally to the profitability of the Asia Pacific business. In addition to the arrangements set out above, the Group Finance Director is also Part of his bonus is paid in deferred Shares. His base salary is higher than those paid currently entitled to participate in a long-term share bonus plan. With the retirement to the UK Executive Directors, except for the Group Finance Director, to recognise of the Group Chief Executive, the Remuneration Committee commenced a review the higher costs arising from his secondment to the Asia Pacific business. of the structure of the Executive Directors’ remuneration. As a consequence it is The element of bonuses to be paid by the award of deferred shares under the anticipated that the remuneration packages of both the Group Chief Executive Savills Deferred Share Bonus Plan is determined by the Remuneration Committee Designate, Jeremy Helsby, and the Group Finance Director, Mark Dearsley will shortly in its discretion or in accordance with any contractual arrangements. be restructured so that they consist of a base salary (below market rate in the case of the Group Chief Executive (Designate)) and a bonus reflecting firstly, the Group’s The Remuneration Committee will consider each Executive Director’s overall financial performance and secondly, the individual’s performance – both measured remuneration package and make suggestions or recommendations to the Board. against performance criteria set by the Remuneration Committee and subject to a Their aim is to ensure arrangements that align Directors’ interests to the objectives financial cap. A proportion of any bonus will be paid in deferred shares. In addition, and strategy of the Group. the notice period of the Group Chief Executive (Designate) will be increased to The Board accepted the recommendations of the Remuneration Committee on 12 months from 6 months to reflect his new position. Executive Directors’ remuneration for the financial year ended 31 December 2007. .

Analysis of Directors’ remuneration (audited) Employer pension contribution (including final salary, Salary/fees Bonus Benefits GPP and bonus waived) Total Year to Year to Year to Year to Year to Year to 31 December 31 December 31 December 31 December Year to Year to Year to Year to Year to Year to 31 December 31 December 2007 2007 2006 2006 31 December 31 December 31 December 31 December 31 December 31 December 2007 2006 Cash Deferred* Cash Deferred* 2007 2006 2007 2006 2007 2006 Executive Directors £ £ £ £ £ £ £ £ £ £ £ £ Aubrey Adams 119,000 119,000 1,000,000 – 1,000,000 – 1,226 1,234 – – 1,120,226 1,120,234 Mark Dearsley (appointed 3 September 2007 139,538** – 150,000 100,000 –– 470 – – – 390,008 – Jeremy Helsby 112,750 107,667 1,130,000 200,000 1,200,000 175,000 1,226 1,234 12,969 12,250 1,456,945 1,496,151 Simon Hope 113,167 100,167 552,500 150,000 627,451 375,000 1,226 14,232 210,469*** 12,250 1,027,362 1,129,100 Robert McKellar 225,385 239,670 700,000 100,000 600,000 75,000 – – – – 1,025,385 914,670 Rupert Sebag-Montefiore 108,929 107,596 1,075,000 200,000 1,000,000 200,000 1,226 1,234 12,500 12,250 1,397,655 1,321,080

* For details of the Deferred Share Bonus Plan please refer to page 78. ** Mark Dearsley’s basic annual salary is £350,000. *** This includes £197,500 bonus waived which will be paid by the Company directly into a separate pension arrangement for his benefit. Included in the cash bonus figures for 2007 noted above for each of Aubrey Adams, Jeremy Helsby and Rupert Sebag-Montefiore are amounts of £260,000, £27,000 and £30,000 respectively which were waived in favour of contributions to registered charities by their employing companies (2006: Aubrey Adams, Jeremy Helsby, Simon Hope and Rupert Sebag-Montefiore waived £270,000, £48,836, £37,500 and £20,000 respectively).

Benefits Executive Directors and senior employees are provided with a company car (or salary allowance) and they and their immediate families are members of the Savills Group’s medical or hospital insurance schemes.

External advice During the year, the Committee appointed Towers Perrin to review the Executive Directors’ remuneration arrangements. To date Towers Perrin have advised the Committee on appropriate salary and incentive arrangements for Jeremy Helsby. No other services were received from Towers Perrin.

External directorships The Executive Directors are allowed to accept external non-executive directorships, subject to approval by the Chairman and any conditions he might impose. For non-executive directorships which are considered to arise by virtue of an Executive Director’s position within Savills, the fees are paid directly to Savills. During the year Aubrey Adams was paid (and retained) £35,000 for acting as a Non-Executive Director of Unitech Corporate Parks Plc and Rupert Sebag-Montefiore was paid (and retained) £25,000 for acting as Non-Executive Chairman of Fastcrop Plc. 77 Savills plc Our Governance Report and Accounts 2007 Remuneration Report

Non-executive remuneration The fees of the Non-Executive Directors and the Chairman’s remuneration are determined by the full Board within the limits set in the Company’s Articles of Association. The Non-Executive Directors do not receive any share options, bonuses or any other performance related payments nor do they receive any pension entitlement.

Analysis of Non-Executive Directors’ remuneration (audited) Salary/fees Bonus Benefits Total Year to Year to Year to Year to Year to Year to Year to Year to 31 December 31 December 31 December 31 December 31 December 31 December 31 December 31 December 2007 2006 2007 2006 2007 2006 2007 2006 Non-Executive Directors £ £ £ £ £ £ £ £ Martin Angle (appointed 2 January 2007) 32,382 – – – – – 32,382 – Timothy Ingram* 32,500 30,417 – – – – 32,500 30,417 Charles McVeigh (Chairman – Remuneration Committee)** 37,500 35,417 – – – – 37,500 35,417 Fields Wicker-Miurin (Chairman – Audit Committee)** 37,500 35,417 – – – – 37,500 35,417 Peter Smith 150,000 110,000 – – – – 150,000 110,000

* Payment made via Caledonia Investments plc where he is the Chief Executive. ** The Chairman of the Audit and Remuneration Committees each receive £5,000 for undertaking their roles. Following a review of current market practice and the role, the fees of the Non-Executive Chairman were increased from £110,000 per annum to £190,000 with effect from 1 July 2007. In addition, it has been agreed with effect from 1 July 2008 the fee paid to each Non-Executive Director will be increased to £40,000 per annum (previously £32,500 per annum) and the Chairman of the Audit and Remuneration Committees will receive an additional £7,500 per annum (previously £5,000 per annum).

Pension The HMRC approved Savills Life Assurance Scheme provides life assurance benefits to all relevant employees including the UK based Executive Directors. Three Executive Directors (Jeremy Helsby, Simon Hope and Rupert Sebag-Montefiore) participated in the Pension Plan of Savills (the Plan) for defined benefit pension benefits during the year. The Plan is a contributory defined benefit scheme which provides a pension based on final basic salary and length of service. In addition to the Company’s contribution, members contributed 7% of salary during the year ended 31 December 2007. Only basic salary is pensionable. The current normal retirement age under the Plan is 60 although as a result of Age Discrimination legislation the Company normal retirement age has increased to 65. The Plan closed to new entrants for pension benefits in 2000 but continues to operate for existing members. The Company also operated a defined contribution pension plan. The Company makes contributions for Robert McKellar to a Mandatory Provident Fund in Hong Kong and during the year contributed £7,110.

Pensions disclosure (audited) Increase in accrued pension Increase in transfer value during the year in excess Transfer value of the increase Accumulated total accrued Total increase in accrued Transfer value of total pension at over the year, less of inflation1 less Director’s contributions1 pension at the end of the year 2 pension during the year 2 start and end of the year 3 Director’s contributions4 31 December 31 December 31 December 31 December 31 December 31 December 31 December 31 December 31 December 31 December 31 December 31 December 2007 2006 2007 2006 2007 2006 2007 2006 2007 2006 2007 2006 Executive Directors £ £ £ £ £ £ £ £ £ £ £ £ Jeremy Helsby 2,195 3,804 25,267 44,772 44,188 40,417 3,771 4,767 646,382 587,642 51,478 93,098 Simon Hope 1,993 2,793 13,271 17,882 24,938 22,083 2,854 3,300 253,709 225,629 20,818 35,930 Rupert Sebag-Montefiore 58 3,850 (6,099) 48,767 42,917 41,250 1,667 4,833 657,043 627,642 22,401 95,545

Notes 1. The table shows the increase in accrued pension during the year, excluding any increase for inflation. The transfer value of this increase in pension is also shown, less the contributions made by the Director during the year. 2. The accumulated accrued pension entitlement shown is that which would be paid annually on retirement based on service to the year-end. The actual increase in pension over the year is also shown (with no allowance for the increase in inflation). 3. The transfer value of the total pension accrued at the year-end, determined at the year-end is set out along with the comparative amounts at the end of the previous year. 4. The increase in the amount of this transfer value, less the contributions made by the Director during the period, has also been determined. The transfer value represents the amount payable by the pension plan should the Director transfer his pension rights to another provider. All transfer values quoted are calculated on the basis of actuarial advice in accordance with Actuarial Guidance Note 11 (GN11). 78 Savills plc Our Governance Report and Accounts 2007 Remuneration Report

Share related incentives – The original deferred period (vesting date) of five years under the DSBP was Directors’ Deferred Share Bonuses and Option Schemes considered to be out of line with market practice where the large majority of The Association of British Insurers (ABI) emphasises in its guidelines the importance plans operate on the basis of a three year vesting date. In accordance with the of performance-based remuneration arrangements being clearly aligned to business amendment provisions, therefore, the DSBP was altered to provide for a vesting strategy and objectives. The ABI expects Remuneration Committees to carry date of not less than three years from the date of an award. For awards made out regular reviews of existing share incentive schemes in order to ensure their from 2006 onwards, the vesting date (to be determined prior to the date of continued effectiveness and compliance with best practice and contribution to any award) can be any period of not less than three years but could be longer shareholder value. (e.g. five years). The Remuneration Committee keeps Savills’ executive share incentive plans under – For awards made from 2006 onwards, the number of shares awarded will be review to ensure that the above principles are adhered to and, consistent with this, increased on the vesting date to reflect final and interim dividends paid to ordinary certain changes were introduced to the existing plans following consultations with the shareholders throughout the deferred period. ABI and the Research, Recommendations and Electronic Voting service (RREV now In summary, the combination of a highly performanced bonus award system known as Riskmetrics Group) in 2006–2007 (details of the changes are contained in together with a deferred element in the form of Savills’ shares provides an important the relevant sections below). element in Savills’ remuneration strategy both as an incentive and as a retention The Savills Deferred Share Bonus Plan (the DSBP) and tool. The Remuneration Committee are satisfied that the DSBP has been a key The Savills Deferred Share Plan (the DSP) component in motivating and retaining the calibre of executives’ necessary to achieve The DSBP was adopted by the Board on the recommendation of the Remuneration the growth of the Company into a successful FTSE 250 company and fully support Committee in 2001. It provides for the award of conditional rights to acquire Savills its continued use. shares based on performance achievements measured over the immediately The DSP provides for the grant of awards of deferred shares which would normally preceding financial year. The performance targets are specific to each individual vest not earlier than three years from the award date (the deferred period could be and either relate to Group thresholds, subsidiary company targets or a combination longer). The plan provides the scope for the Board to make such awards to key of both. In order to support retention of key fee-earners, a proportion of bonuses executives where the Board considers that there are particular business reasons, decided by the Remuneration Committee are required to be taken in the form of in the interests of the Company, for applying a retention element to remuneration deferred shares. The DSBP remains closely aligned to Savills’ successful executive (for example on the acquisition of a business). Awards under the DSP are forfeited remuneration strategy, which is to include a meaningful performance related pay if the executive leaves the employment of the Group before the end of the deferred element and to control the level of basic annual salaries at senior levels significantly period (other than in defined ‘good leaver’ situations e.g. redundancy, ill-health, etc.). below market comparables. The deferred element provides an added incentive in The shares required to satisfy awards are acquired through the EBT in the same way the form of potential share price growth over the deferred period together with an as for the DSBP (see paragraph two of the previous section) and there are no powers important retention aspect in that awards normally lapse in the event of executives to subscribe new shares or to reissue existing treasury shares under the DSP and leaving service before the vesting date. therefore no dilution of existing shareholdings. The Executive Directors are not eligible Awards of deferred shares normally vest after a deferred period of not less than three to receive awards under the DSP. years although a longer deferred period (up to five years) may apply. The shares are subject to forfeiture if the executive leaves service prior to the vesting date other than Group Executive Share Option Schemes, Sharesave Scheme and in defined ‘good leaver’ situations (e.g. redundancy, ill-health, etc.). The shares are Share Incentive Plan acquired by purchase in the market through an independent employee benefit trust The Savills Executive Share Option Scheme (2001 Scheme) (the EBT) with funds provided by the relevant employing company. There are no The 2001 Scheme was authorised by shareholders at the AGM in 2001 and powers to subscribe new shares (or to reissue existing treasury shares) under comprises a scheme approved by HM Revenue and Customs (HMRC) and an either the DSBP or the EBT and therefore no dilution of existing shareholdings. unapproved schedule. Options granted under the 2001 Scheme are normally The EBT can acquire up to 15% of the issued share capital in the market and this exercisable not earlier than three years following the date of grant and not later than limit was the subject of a full consultation with institutional shareholders in 2002–2003 ten years from the date of grant (with exceptions for ‘good leavers’). No grants were and an ordinary resolution of shareholders at the AGM in 2003. The Rules of the made during 2007. Grants are normally made annually on a phased basis and the DSBP can be amended by the Board and, on 31 January 2006 the Board, on the exercise of options is subject to the achievement of a performance target related to recommendation of the Remuneration Committee, considered and implemented the the increase in the Company’s earnings per share compared to a stated percentage following changes: above inflation over a fixed three year period. The ability to remeasure performance over a later period if not met within the initial three year period was removed in 2004 subject to one transitional grant whereby the performance could, if necessary, be remeasured over an extended period of four years. Options are currently satisfied by the issue of new shares within the ABI dilution limit. 79 Savills plc Our Governance Report and Accounts 2007 Remuneration Report

The performance target that applies to options granted between 2001 and 2005 The Savills Sharesave Scheme (the Sharesave Scheme) requires that the Company’s earnings per share must increase over the period of Executive Directors are eligible to participate in the Sharesave Scheme, which is three consecutive financial years by an average of at least 3% p.a. above inflation an HMRC approved scheme open to all employees of nominated participating (as measured by the Retail Prices Index (all items) (RPI)). Following consultation companies who had a minimum of three months’ service at the date of invitation. with the ABI and RREV, the Board, on the recommendation of the Remuneration The Sharesave Scheme was adopted by shareholders in 1998 and will shortly reach Committee, decided that grants of options from 2007 onwards will be subject to a the end of its ten year life. The Sharesave Scheme is linked to a monthly savings tiered approach whereby, in respect of any grant, the first one-third of the number contract and options are granted at a maximum 20% discount to market price. of shares under option will be subject to the above RPI + 3% p.a. target with an The most recent invitation was limited to three year savings contracts, although the escalating performance requirement in respect of the remaining two-thirds as follows: rules currently allow three or five year savings contracts to be offered. A replacement scheme is being proposed for adoption at the 2008 Annual General Meeting. Second one-third of the number of shares – RPI + 4% p.a. The Savills Share Incentive Plan (SIP) Final one-third of the number of shares – RPI + 5% p.a. At the Annual General Meeting on 7 May 2003, shareholders approved the Savills plc 1992 Executive Share Option Scheme (the ESOP) introduction of the SIP. This is a share purchase plan approved by the HMRC The ESOP expired on 23 May 2001 and no further grants will be made under this available to all employees including the Executive Directors. The scheme is aimed scheme but existing rights remain fully protected. Under the ESOP, senior executives at encouraging employee share ownership and an interest in the Company’s were granted options to purchase shares, exercisable in normal circumstances performance together with the retention of employees. Employees invest in Savills plc between five and seven years after grant. The ESOP is operated in conjunction with shares by making contributions from their gross salary subject to a current statutory the EBT. Grants were made by the Trustee of the EBT on the recommendation of the annual limit of £1,500 (£125 per month). If the shares are held in the Plan for five Board on a phased basis, having regard to individuals’ performances and anticipated years no income tax or NIC is payable. The scheme was launched in May 2004. contributions to the Group. Recommendations in respect of grants to Executive There are other elements of the SIP authorised by shareholders but it is not the Directors were made by the Remuneration Committee. present intention to offer these elements.

Ordinary shares (audited) Interests in the share capital of the Company beneficially held by members of the Board of Directors and their families are detailed below. There has been no change in the interests up to 11 March 2008: 31 December 31 December 2007 2006 Aubrey Adams 700,000 700,000 Martin Angle (appointed 2 January 2007) – – Mark Dearsley (appointed 3 September 2007) – – Jeremy Helsby 519,152 454,686 Simon Hope 149,402 119,879 Timothy Ingram 24,000 24,000 Robert McKellar 142,718 142,718 Charles McVeigh – – Rupert Sebag-Montefiore 236,075 235,777 Peter Smith 20,000 20,000 Fields Wicker-Miurin 1,360 1,360

It is the Remuneration Committee’s policy that each Executive Director should retain 105,000 shares in the Company (except for the Group Chief Executive who should retain 150,000 shares). Previously its policy was that shares up to the value of 2.5 times his basic salary should be retained. Above these limits the Remuneration Committee takes the view that the Directors may retain or sell shares as they see fit. 80 Savills plc Our Governance Report and Accounts 2007 Remuneration Report

Savills plc 1992 Executive Share Option Scheme (ESOP) (audited) Number of shares At Exercised At Exercise Market value Date 31 December during 31 December price at date of from which Directors 2006 year 2007 per share exercise exercisable Expiry date Jeremy Helsby 30,000 30,000 – Nil 568.5p 20.07.05 20.07.07 100,000 – 100,000 Nil – 06.04.06 06.04.08 Simon Hope 80,000 80,000 – Nil 353.25p 06.04.06 06.04.08

The Savills Sharesave Scheme (audited) Number of shares At At Market price Exercise Exercisable 31 December Granted Exercised Lapsed 31 December on date of price within six Directors 2006 during year during year during year 2007 exercise per share months from Jeremy Helsby 1,098 – – – 1,098 – 510.5p 01.07.09 Simon Hope 1,830 – – 1,830 – – 510.5p 01.07.09 – 3,018 – – 3,018 – 318.0p 01.12.10 Rupert Sebag-Montefiore 1,830 – – 1,830 – – 510.5p 01.07.09 – 3,018 – – 3,018 – 318.0p 01.12.10

The Savills Executive Share Option Scheme (2001) (audited) Number of shares At At Market price Exercise Date 31 December Granted Exercised 31 December on date of price normally first Directors 2006 during year Approved/Unapproved during year 2007 exercise per share exercisable Expiry date Aubrey Adams 54,000 – Unapproved 54,000 – 677.5p 217.75p 30.03.07 30.03.14 9,338 – Approved – 9,338 – 321.25p 14.03.08 14.03.15 26,662 – Unapproved – 26,662 – 321.25p 14.03.08 14.03.15 20,000 – Unapproved – 20,000 – 596.0p 13.03.09 13.03.16 Jeremy Helsby 46,000 – Unapproved 46,000 – 685.5p 217.75p 30.03.07 30.03.14 9,338 – Approved – 9,338 – 321.25p 14.03.08 14.03.15 23,662 – Unapproved – 23,662 – 321.25p 14.03.08 14.03.15 20,000 – Unapproved – 20,000 – 596.0p 13.03.09 13.03.16 Simon Hope 46,000 – Unapproved 46,000 – 353.25p 217.75p 30.03.07 30.03.14 9,338 – Approved – 9,338 – 321.25p 14.03.08 14.03.15 22,662 – Unapproved – 22,662 – 321.25p 14.03.08 14.03.15 20,000 – Unapproved – 20,000 – 596.0p 13.03.09 13.03.16 Robert McKellar 43,000 – Unapproved 43,000 – 672.0p 217.75p 30.03.07 30.03.14 9,338 – Approved – 9,338 – 321.25p 14.03.08 14.03.15 20,662 – Unapproved – 20,662 – 321.25p 14.03.08 14.03.15 20,000 – Unapproved – 20,000 – 596.0p 13.03.09 13.03.16 Rupert Sebag-Montefiore 46,000 – Unapproved – 46,000 – 217.75p 30.03.07 30.03.14 9,338 – Approved – 9,338 – 321.25p 14.03.08 14.03.15 23,662 – Unapproved – 23,662 – 321.25p 14.03.08 14.03.15 20,000 – Unapproved – 20,000 – 596.0p 13.03.09 13.03.16

81 Savills plc Our Governance Report and Accounts 2007 Remuneration Report

The Savills Deferred Share Bonus Plan (DSBP) (audited) Number of shares Closing mid- market price At At of a Savills plc Market value 31 December Awarded Vested 31 December share the day at date Directors 2006 during year during year 2007 before grant* of vesting Vesting date Aubrey Adams 16,778 – 16,778 596.0p – 13.03.09 Jeremy Helsby 79,466 – 79,466 – 187.5p 677.0p 22.03.07 45,454 – – 45,454 137.5p – 14.03.08 17,350 – – 17,350 426.5p – 15.03.09 11,284 – – 11,284 642.5p – 14.03.10 18,456 – – 18,456 596.0p – 13.03.09 – 26,676 – 26,676 656.0p – 19.03.10 Simon Hope 49,600 – 49,600 – 187.5p 677.0p 22.03.07 27,272 – – 27,272 137.5p – 14.03.08 38,804 – – 38,804 426.5p – 15.03.09 113,618 – – 113,618 642.5p – 14.03.10 35,234 – – 35,234 596.0p – 13.03.09 – 57,164 – 57,164 656.0p – 19.03.10 Robert McKellar 49,600 – 49,600 – 187.5p 677.0p 22.03.07 36,362 – – 36,362 137.5p – 14.03.08 11,722 – – 11,722 426.5p – 15.03.09 15,564 – – 15,564 642.5p – 14.03.10 8,388 – – 8,388 596.0p – 13.03.09 – 11,432 – 11,432 656.0p – 19.03.10 Rupert Sebag-Montefiore 79,466 – 79,466 – 187.5p 677.0p 22.03.07 45,454 – – 45,454 137.5p – 14.03.08 17,350 – – 17,350 426.5p – 15.03.09 25,166 – – 25,166 596.0p – 13.03.09 – 30,487 – 30,487 656.0p – 19.03.10

*Mid-market prices for awards prior to 2006 have not been adjusted to account for the 2:1 share subdivision on 11 May 2006. The ESOP expired on 23 May 2001 and no further grants were made under this scheme during the year. 189,000 Directors’ share options under the Executive Share Option Scheme (2001) were exercised during the year and 258,132 shares under the DSBP vested during the year. No Directors’ share options/awards under the ESOP, the Executive Share Option Scheme (2001) or DSBP lapsed. The mid-market price of the shares at 31 December 2007 was 280.0p and the range during the year was 277.5p to 701.5p. 82 Savills plc Our Governance Report and Accounts 2007 Remuneration Report

Directors’ service contracts The Executive Directors, except for the Group Finance Director, are appointed for an initial period of three years, after which their appointment may be renewed. Each has a service contract which is indefinite but terminable with a notice period of one year or less. The details of the service contracts of those who served as Directors during the year are: End date of current Date appointed to Board letter of appointment Notice period Aubrey Adams 12 February 1990 31 December 2009 12 months Martin Angle 2 January 2007 1 January 2010 Terminable at will Mark Dearsley 3 September 2007 Indefinite** Six months Jeremy Helsby 1 May 1999 4 May 2008* Six months* Simon Hope 1 May 1999 4 May 2008 Six months Timothy Ingram 27 June 2002 26 June 2008 Terminable at will Robert McKellar 1 June 2000 31 May 2009 Six months Charles McVeigh 1 August 2000 31 July 2009 Terminable at will Rupert Sebag-Montefiore 31 May 1995 25 October 2010 Six months Peter Smith 24 May 2004 23 May 2010 Six months Fields Wicker-Miurin 27 June 2002 26 June 2008 Terminable at will

* It is anticipated that the new contractual arrangements to be agreed shortly with the Chief Executive Designate, Jeremy Helsby, introducing his revised remuneration arrangements will put him on an indefinite contract subject to termination on 12 months notice. ** But subject to the Articles of Association. The Company may, if it chooses, terminate an Executive Director’s service contract by making a payment in lieu of notice to him. No Executive Director, except for the Group Finance Director, is entitled to receive any unpaid bonus on termination of employment unless he is employed by the Company on the first day of the month in which such bonus is payable and has not previously given notice. The Group Finance Director is entitled to receive a pro rata bonus on termination of employment in respect of the period up to the date of expiry of his contractual notice period provided he is a ‘good leaver’ (which expression does not include dismissal due to poor performance). 83 Savills plc Our Governance Report and Accounts 2007 Remuneration Report

Performance graph Over the last five years the Company has outperformed the FTSE 250 Index to give a Total Shareholder Return of 398% compared with a return of 182% provided by the FTSE 250 and 115% by the FTSE All Share Real Estate Index. Savills was ranked 31st by performance in the FTSE 250 over the five years to 31 December 2007. The Directors believe that the FTSE 250 is the most appropriate index against which to compare total shareholder return as it is an index of companies of similar size to Savills plc. Below is a graph showing Total Shareholder Return for Savills plc against the FTSE 250 Index and FTSE All Share Real Estate Index over the last five years:

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By order of the Board

Charles McVeigh Chairman of the Remuneration Committee 11 March 2008 Registered Office: 20 Grosvenor Hill Berkeley Square London W1K 3HQ 84 Savills plc Our Governance Report and Accounts 2007 Directors’ Responsibilities Directors’ Responsibilities

The Directors are responsible for preparing the Annual Report, the Directors’ Remuneration Report and the financial statements in accordance with applicable law and regulations. Company law requires the Directors to prepare financial statements for each financial year. Under that law, the Directors have prepared the Group and parent Company financial statements in accordance with International Financial Reporting Standards (IFRSs) as adopted by the European Union. The financial statements are required by law to give a true and fair view of the state of affairs of the Company and the Group and of the profit or loss of the Group for that year. In preparing those financial statements, the Directors are required to: – select suitable accounting policies and then apply them consistently; – make judgements and estimates that are reasonable and prudent; – state that the financial statements comply with IFRSs as adopted by the European Union; – prepare the financial statements on the going concern basis, unless it is inappropriate to presume that the Group will continue in business, in which case there should be supporting assumptions or qualifications as necessary. The Directors confirm that they have complied with the above requirements in preparing the financial statements. The Directors are responsible for keeping proper accounting records that disclose with reasonable accuracy at any time the financial position of the Company and the Group and to enable them to ensure that the financial statements and the Directors’ Remuneration Report comply with the Companies Act 1985 and, as regards the Group financial statements, Article 4 of the IAS Regulation. They are also responsible for safeguarding the assets of the Company and the Group and hence for taking reasonable steps for the prevention and detection of fraud and other irregularities. The Directors are responsible for the maintenance and integrity of the Company’s website and legislation in the United Kingdom governing the preparation and dissemination of financial statements may differ from legislation in other jurisdictions. Each person who is a Director at the date of approval of this report confirms that: – so far as the Director is aware, there is no relevant audit information of which the Company’s auditors are unaware; and – each Director has taken all the steps that he/she ought to have taken as a Director to make himself/herself aware of any relevant audit information and to establish that the Company’s auditors are aware of that information.

85 Savills plc Our Governance Report and accounts 2007 Independent Auditors’ Report to the Members of Savills plc Independent Auditors’ Report to the Members of Savills plc

We have audited the Group and parent Company financial statements (the financial Basis of audit opinion statements) of Savills plc for the year ended 31 December 2007 which comprise We conducted our audit in accordance with International Standards on Auditing (UK the Group income statement, the Group and parent Company balance sheets, and Ireland) issued by the Auditing Practices Board. An audit includes examination, the Group and parent Company statements of cash flows, the Group and parent on a test basis, of evidence relevant to the amounts and disclosures in the financial Company statements of recognised income and expense and the related notes. statements and the part of the Directors’ Remuneration Report to be audited. These financial statements have been prepared under the accounting policies set It also includes an assessment of the significant estimates and judgments made out therein. We have also audited the information in the Directors’ Remuneration by the Directors in the preparation of the financial statements, and of whether the Report that is described as having been audited. accounting policies are appropriate to the Group’s and Company’s circumstances, consistently applied and adequately disclosed. Respective responsibilities of Directors and auditors We planned and performed our audit so as to obtain all the information and The Directors’ responsibilities for preparing the Annual Report, the Directors’ explanations which we considered necessary in order to provide us with sufficient Remuneration Report and the financial statements in accordance with applicable evidence to give reasonable assurance that the financial statements and the law and International Financial Reporting Standards (IFRSs) as adopted by the part of the Directors’ Remuneration Report to be audited are free from material European Union are set out in the Statement of Directors’ Responsibilities. misstatement, whether caused by fraud or other irregularity or error. In forming our Our responsibility is to audit the financial statements and the part of the Directors’ opinion we also evaluated the overall adequacy of the presentation of information Remuneration Report to be audited in accordance with relevant legal and regulatory in the financial statements and the part of the Directors’ Remuneration Report to requirements and International Standards on Auditing (UK and Ireland). This report, be audited. including the opinion, has been prepared for and only for the Company’s members as a body in accordance with Section 235 of the Companies Act 1985 and for no Opinion other purpose. We do not, in giving this opinion, accept or assume responsibility for In our opinion: any other purpose or to any other person to whom this report is shown or into whose – the Group financial statements give a true and fair view, in accordance with hands it may come save where expressly agreed by our prior consent in writing. IFRSs as adopted by the European Union, of the state of the Group’s affairs as We report to you our opinion as to whether the financial statements give a true at 31 December 2007 and of its profit and cash flows for the year then ended; and fair view and whether the financial statements and the part of the Directors’ – the parent Company financial statements give a true and fair view, in accordance Remuneration Report to be audited have been properly prepared in accordance with IFRSs as adopted by the European Union as applied in accordance with the with the Companies Act 1985 and, as regards to the Group financial statements, provisions of the Companies Act 1985, of the state of the parent Company’s Article 4 of the IAS Regulation. We also report to you whether in our opinion the affairs as at 31 December 2007 and cash flows for the year then ended; information given in the Directors’ Report is consistent with the financial statements. The information given in the Directors’ Report includes that specific information – the financial statements and the part of the Directors’ Remuneration Report to presented in the Review of Operations and the Financial Review that is cross be audited have been properly prepared in accordance with the Companies referred from the Directors’ Report. Act 1985 and, as regards the Group financial statements, Article 4 of the IAS Regulation; and In addition we report to you if, in our opinion, the Company has not kept proper accounting records, if we have not received all the information and explanations – the information given in the Directors' Report is consistent with the we require for our audit, or if information specified by law regarding Directors’ financial statements. remuneration and other transactions is not disclosed. PricewaterhouseCoopers LLP We review whether the Corporate Governance Statement reflects the Company’s Chartered Accountants and Registered Auditors compliance with the nine provisions of the Combined Code 2006 specified for our 1 Embankment Place review by the Listing Rules of the Financial Services Authority, and we report if it London WC2N 6RH does not. We are not required to consider whether the Board’s statements on internal control cover all risks and controls, or form an opinion on the effectiveness 11 March 2008 of the Group’s corporate governance procedures or its risk and control procedures.

We read other information contained in the Annual Report and consider whether it is consistent with the audited financial statements. The other information comprises (a) The maintenance and integrity of the Savills plc website is the responsibility of the Directors; the only the Directors’ Report, the unaudited part of the Directors’ Remuneration Report, work carried out by the Auditors does not involve consideration of these matters and, accordingly, the the Chairman’s Statement, the Review of Operations and the Financial Review and Auditors accept no responsibility for any changes that may have occurred to the financial statements the Corporate Governance Statement. We consider the implications for our report if since they were initially presented on the website. we become aware of any apparent misstatements or material inconsistencies with (b) Legislation in the United Kingdom governing the preparation and dissemination of financial the financial statements. Our responsibilities do not extend to any other information. statements may differ from legislation in other jurisdictions. 86 Savillsplc Our results Reportand accounts 2006 Contents Our results

Our business

Chairman’s Statement 12 Review of Operations 16 FinancialReview 50 Risksand Uncertainties FacingtheBusiness 54 Our Responsibilities 58

Our governance

Board of Directors 66 Directors’Report 68 Corporate Governance Report 70 RemunerationReport 75 Directors’Responsibilities 84 Independent Auditors’Report 85

Our results

Consolidated Income Statement 88 Balance Sheets 89 Statements of Cash Flows 90 Statements of Recognised Income and Expense 91 Notes to the Financial Statements 92 Savills’ UK and International Offices 139 Savillsplc Our results Contents Savills beat competition to secure appointmentaslettingagent for prestigious London building

UK 40 Portman Square, London

In 2006, our Investment department secured funding In place offormalmarketing, our team set outto for the buildingof40 Portman Square, an exciting identify potential tenants. Although our expertise and office and apartment propertyinthe heartofLondon’s experience indicated that the building would havethe West End. Now that success was followedupbythe greatest appeal to businesses in the financial services Savills West End office agencydepartment winninga sector, wealso targeted companies fromrapidly competitive pitch against five majorLondonpractices. expanding economies overseas. Asaresultof this The teamwas appointedjoint letting agentatthe approach, 85% of the building has beenpre-let some beginningof 2007 to advise the freeholder(Portman eighttonine monthsahead of completion at rents Estate),the fund (Standard Life) and the developer up to £115 per sqft. Thetenants includean Indian (Delanceyplc). organisation that will be locating its new European headquarterson the 1st floor. On completion, 40 Portman Square will provide approximately 100,000 sqftofhighquality office accommodation plus20luxury apartments on oneofLondon’s most prominentsquares. 88 Savills plc Our Results Report and Accounts 2007 Consolidated Income Statement Consolidated Income Statement for the year ended 31 December 2007

Group Year ended Year ended 2007 2006 Notes £m £m Continuing operations

Revenue 5 650.5 517.6 Less: Employee benefits expense 9 (382.3) (306.1) Depreciation 6 (6.2) (5.6) Amortisation of intangibles and impairment of goodwill and available-for-sale investments 6 (5.7) (2.4) Other operating expenses (174.3) (129.2) Other income 6 0.7 0.8 Profit on disposal of subsidiary, associate, joint ventures and available-for-sale investments 6 0.7 5.1 Operating profit 5 & 6 83.4 80.2 Finance income 11 4.5 4.8 Finance costs 11 (2.4) (1.1) 2.1 3.7 Share of post tax profit from associates and joint ventures 18(a) 0.4 0.5 Profit before income tax 85.9 84.4 Income tax expense 12 (28.0) (25.6) Profit for the year from continuing operations 57.9 58.8

Discontinued operations Profit for the year from discontinued operations 8 – 0.3 Profit after income tax 57.9 59.1

Attributable to: Equity shareholders of the Company 55.3 57.7 Minority interest 2.6 1.4 57.9 59.1 Earnings per share From continuing and discontinued operations Basic earnings per share 14(a) 45.5p 46.3p Diluted earnings per share 14(a) 44.3p 44.2p From continuing operations Basic earnings per share 14(a) 45.5p 46.0p Diluted earnings per share 14(a) 44.3p 44.0p Underlying earnings per share From continuing and discontinued operations Basic earnings per share 14(b) 46.1p 41.1p Diluted earnings per share 14(b) 44.9p 39.2p From continuing operations Basic earnings per share 14(b) 46.1p 40.8p Diluted earnings per share 14(b) 44.9p 39.0p 89 Savills plc Our Results Report and Accounts 2007 Balance Sheets Balance Sheets at 31 December 2007

Group Company 31 December 31 December 31 December 31 December 2007 2006 2007 2006 Notes £m £m £m £m Assets: Non-current assets Property, plant and equipment 17 21.7 16.5 1.6 2.3 Goodwill 15 138.7 99.9 – – Intangible assets 16 21.8 19.1 0.4 0.2 Investments in subsidiaries 18(c) – – 129.4 95.0 Investments in associates and joint ventures 18(a) 8.9 5.6 – – Deferred income tax assets 19 12.9 20.6 1.4 1.2 Available-for-sale investments 18(b) 21.6 8.8 – – Financial assets at fair value through profit or loss 25 1.5 1.5 – – Derivative financial instruments 25 0.2 – 0.2 – 227.3 172.0 133.0 98.7 Assets: Current assets Work in progress 3.2 3.2 – – Trade and other receivables 20 196.1 163.9 11.1 17.9 Derivative financial instruments 25 0.3 – 0.3 – Cash and cash equivalents 21 110.7 124.1 26.8 58.9 310.3 291.2 38.2 76.8 Liabilities: Current liabilities Borrowings 24 10.7 7.3 16.3 4.1 Derivative financial instruments 25 – 0.2 – 0.2 Trade and other payables 22(a) 234.3 191.8 20.8 52.5 Current income tax liabilities 22(b) 11.6 10.3 – – Employee benefit obligations 26(b) 2.7 3.0 – – Provisions for other liabilities and charges 26(a) 2.2 1.5 1.6 1.2 261.5 214.1 38.7 58.0 Net current assets 48.8 77.1 (0.5) 18.8 Total assets less current liabilities 276.1 249.1 132.5 117.5 Liabilities: Non-current liabilities Borrowings 24 22.5 12.0 15.1 – Derivative financial instruments 25 0.2 0.3 0.2 0.3 Trade and other payables 23 12.0 2.0 4.5 – Retirement and employee benefit obligations 10 & 26(b) 13.8 19.0 0.5 0.8 Provisions for other liabilities and charges 26(a) 1.8 1.6 – – Deferred income tax liabilities 19 2.2 1.4 – – 52.5 36.3 20.3 1.1 Net assets 223.6 212.8 112.2 116.4 Equity: Capital and reserves attributable to equity holders of the Company Share capital 27 3.3 3.4 3.3 3.4 Share premium 29 83.0 82.4 83.0 82.4 Other reserves 29 3.9 (1.8) 3.3 3.2 Retained earnings 29 127.5 124.5 22.6 27.4 217.7 208.5 112.2 116.4 Minority interest 29 5.9 4.3 – – Total equity 29 223.6 212.8 112.2 116.4

Approved by the Board of Directors on 11 March 2008 and signed on its behalf by

A J Adams A M Dearsley 90 Savills plc Our Results Report and Accounts 2007 Statements of Cash Flows Statements of Cash Flows for the year ended 31 December 2007

Group Company Year ended Year ended Year ended Year ended 2007 2006 2007 2006 Notes £m £m £m £m Cash flows from operating activities Cash generated from continuing operations 33 124.3 87.4 16.8 47.4 Interest received 4.5 4.7 1.9 0.6 Interest paid (2.3) (0.9) (1.7) – Income tax (paid)/received (23.7) (15.1) 2.1 0.8 Net cash generated from operating activities 102.8 76.1 19.1 48.8 Cash flows from investing activities Outflow from sale of subsidiary, net of cash disposed – (0.2) – – Proceeds from sale of property, plant and equipment 0.1 0.2 – – Proceeds from sale of associates, joint ventures and available-for-sale investments 5.2 7.9 – – Dividends received 0.5 0.5 – – Net loans to associates, joint ventures and subsidiaries (1.4) (2.0) (34.4) (18.3) Acquisition of subsidiaries, net of cash acquired 18(e) (32.3) (37.8) – – Sale of assets held for sale – 16.3 – – Purchase of property, plant and equipment 17 (11.6) (7.3) (0.5) (1.4) Purchase of intangible assets (1.0) (1.1) (0.4) (0.2) Purchase of investment in associates, joint ventures and available-for-sale investments (26.8) (2.2) (1.0) – Purchase of financial assets at fair value through profit or loss – (1.5) – – Net cash used in investing activities (67.3) (27.2) (36.3) (19.9) Cash flows from financing activities Proceeds from issue of share capital 29 0.4 1.2 0.4 1.2 Proceeds from borrowings 20.3 0.2 19.0 – Repurchase of own shares 29 (21.8) – (21.8) – Purchase of own shares for Employee Benefit Trust 29 (18.9) (5.0) – – Repayments of borrowings (7.8) (1.1) – – Dividends paid 29 (22.1) (16.4) (20.7) (16.2) Net cash used in financing activities (49.9) (21.1) (23.1) (15.0) Net (decrease)/increase in cash, cash equivalents and bank overdrafts (14.4) 27.8 (40.3) 13.9 Cash, cash equivalents and bank overdrafts at beginning of the year 123.7 99.9 54.8 40.9 Effect of exchange rate fluctuations on cash held 1.1 (4.0) – – Cash, cash equivalents and bank overdrafts at end of the year 21 110.4 123.7 14.5 54.8 91 Savills plc Our Results Report and Accounts 2007 Statements of Recognised Income and Expense Statements of Recognised Income and Expense for the year ended 31 December 2007

Group Company Year ended Year ended Year ended Year ended 2007 2006 2007 2006 Notes £m £m £m £m Profit for the year 57.9 59.1 37.4 43.3

Revaluation of available-for-sale investments 18(b) 0.6 0.4 – – Actuarial gain on defined benefit pension scheme 10 5.8 2.5 0.4 – Tax on items directly taken to reserves 12 (5.0) 3.5 (0.2) (0.4) Foreign exchange translation differences 5.7 (4.3) – – Net income/(expense) recognised directly in equity 7.1 2.1 0.2 (0.4)

Total recognised income and expense for the year 65.0 61.2 37.6 42.9

Attributable to: Equity shareholders of the Company 62.4 59.6 37.6 42.9 Minority interest 2.6 1.6 – – 65.0 61.2 37.6 42.9 92 Savills plc Our Results Report and Accounts 2007 Notes to the Financial Statements Notes to the Financial Statements Year ended 31 December 2007

1. General information Interpretation early adopted by the Group Savills plc (‘the Company’) and its subsidiaries (together ‘the Group’) is a leading IFRIC 11, ‘IFRS 2 – Group and treasury share transactions’, was early adopted in international property advisory group. It has an extensive network of offices and 2007. IFRIC 11 provides guidance on whether share-based transactions involving associates throughout the UK, continental Europe, the Americas, Asia Pacific and treasury shares or involving group entities (for example, options over a parent’s Africa. Savills is listed on the London Stock Exchange and employs 18,029 staff shares) should be accounted for as equity-settled or cash-settled share-based worldwide in 185 offices. payment transactions in the stand-alone accounts of the parent and Group companies. This interpretation does not have an impact on the Group or The Company is a public limited company incorporated and domiciled in England Company’s financial statements as all share-based transactions are equity-settled. and Wales. The address of its registered office is 20 Grosvenor Hill, Berkeley Square, London W1K 3HQ. Standards, amendments and interpretations effective in 2007 but not relevant The following standards, amendments and interpretations to published standards These consolidated financial statements were approved for issue by the Board of are mandatory for accounting periods beginning on or after 1 January 2007, but are Directors on 11 March 2008. not relevant to the Group’s operations: 2. Accounting policies – IFRS 4, ‘Insurance contracts’; The principal accounting policies applied in the preparation of these consolidated – IFRIC 7, ‘Applying the restatement approach under IAS 29, Financial reporting financial statements are set out below. These policies have been consistently applied in hyperinflationary economies’; and to all the years presented, unless otherwise stated, and are also applicable to the parent Company. – IFRIC 9, ‘Re-assessment of embedded derivatives’. Basis of preparation Standards, amendments and interpretations to standards that are not yet effective These financial statements have been prepared in accordance with International and have not been early adopted by the Group Financial Reporting Standards (IFRS) and IFRS interpretations as adopted by the The following standards and amendments to published standards are mandatory European Union and with those parts of the Companies Act 1985 applicable to for accounting periods beginning on or after 1 January 2008, but have not been companies reporting under IFRS. early adopted: The financial statements have been prepared under the historical cost convention, – IFRS 8, ‘Operating segments’ (effective from 1 January 2009). IFRS 8 replaces as modified to include the revaluation of available-for-sale financial assets to equity IAS 14 and aligns segment reporting with the requirements of the US standard and financial liabilities (including derivative instruments) at fair value through the SFAS 131, ‘Disclosures about segments of an enterprise and related information’. income statement. The new standard requires a ‘management approach’, under which segment information is presented on the same basis as that used for internal reporting The preparation of financial statements in conformity with IFRS requires the use of purposes. The Group will apply IFRS 8 from 1 January 2009. The expected certain critical accounting estimates and for management to exercise judgement in impact is still being assessed in detail by management, but it appears likely the process of applying the Group’s accounting policies. The areas involving a higher that the impact will be minimal with some minor reclassifications. degree of judgement or complexity, or areas where assumptions and estimates are significant to the consolidated financial statements are disclosed in Note 4. – IFRIC 14, ‘IAS 19 – The limit on a defined benefit asset, minimum funding requirements and their interaction’ (effective from 1 January 2008). IFRIC 14 Standards, amendment and interpretations effective in 2007 provides guidance on assessing the limit in IAS 19 on the amount of the surplus The following amendments to published standards are mandatory for the Group’s that can be recognised as an asset. It also explains how the pension asset accounting periods beginning on or after 1 January 2007: or liability may be affected by a statutory or contractual minimum funding – IFRS 7, ‘Financial instruments: Disclosures’, and the complementary amendment requirement. The Group will apply IFRIC 14 from 1 January 2008, but it is to IAS 1, ‘Presentation of financial statements – Capital disclosures’, introduces not expected to have any impact on the Group’s accounts. new disclosures relating to financial instruments and does not have any impact Interpretations to existing standards that are not yet effective but are not relevant on the classification and valuation of the Group’s financial instruments. The following interpretations to existing standards have been published and are – IFRIC 8, ‘Scope of IFRS 2’, requires consideration of transactions involving the mandatory for accounting periods beginning on or after 1 January 2008 or later, issuance of equity instruments, where the identifiable consideration received but are not relevant to the Group’s operations: is less than the fair value of the equity instruments issued in order to establish – IAS 23 (Amendment), ‘Borrowing costs’ (effective from 1 January 2009). whether or not they fall within the scope of IFRS 2. This standard does not have The amendment to the standard is still subject to endorsement by the European any impact on the Group’s financial statements. Union. It requires an entity to capitalise borrowing costs directly attributable to – IFRIC 10, ‘Interim financial reporting and impairment’, prohibits the impairment the acquisition, construction or production of a qualifying asset (one that takes losses recognised in an interim period on goodwill and investments in equity a substantial period of time to get ready for use or sale) as part of the cost of instruments and in financial assets carried at cost to be reversed at a subsequent that asset. The option of immediately expensing those borrowing costs will be balance sheet date. This standard does not have any impact on the Group’s removed. IAS 23 is not relevant to the Group’s operations because there are financial statements. currently no qualifying assets.

93 Savills plc Our Results Report and Accounts 2007 Notes to the Financial Statements

2. Accounting policies continued The Group’s share of its associates’ post-acquisition profits or losses is recognised – IFRIC 12, ‘Service concession arrangements’ (effective from 1 January 2008). in the income statement and its share of post-acquisition movements in reserves is IFRIC 12 applies to contractual arrangements whereby a private sector operator recognised in reserves. The cumulative post-acquisition movements are adjusted participates in the development, financing, operation and maintenance of against the carrying amount of the investment. infrastructure for public sector services. IFRIC 12 is not relevant to the Group’s Accounting policies of associates have been aligned to ensure consistency with the operations because none of the Group’s companies provide for public policies adopted by the Group. Gains and losses on dilution of the Group’s share of sector services. equity in associates are recognised in the income statement. – IFRIC 13, ‘Customer loyalty programmes’ (effective from 1 July 2008). IFRIC 13 Joint ventures clarifies that where goods or services are sold together with a customer loyalty A joint venture is a contractual arrangement whereby two or more parties undertake incentive (for example, loyalty points or free products), the arrangement is a an economic activity that is subject to joint control, which exists only when the multiple-element arrangement and the consideration receivable from the customer strategic financial and operating decisions relating to the activity require the is allocated between the components of the arrangement in using fair values. unanimous consent of the venturers. The Group’s joint ventures are accounted IFRIC 13 is not relevant to the Group’s operations because none of the Group’s for using the equity method. companies operate any loyalty programmes. Segment reporting Consolidation A business segment is a group of assets and operations engaged in providing The consolidated accounts include the accounts of the Company and its subsidiary products or services that are subject to risks and returns that are different from undertakings, together with the Group’s share of results of its associates and those of other business segments. A geographical segment is engaged in providing joint ventures. products or services within a particular economic environment that is subject to Subsidiaries risks and returns that are different from those of segments operating in other A subsidiary is an entity controlled by the Group, where control is the power to economic environments. govern the financial and operating policies generally accompanying a shareholding Revenues and expenses are allocated to segments on the basis that they are of more than half of the voting rights. The existence and effect of potential voting directly attributable or the relevant portion can be allocated on a reasonable basis. rights that are currently exercisable and convertible are considered when assessing whether the Group controls another entity. Foreign currency translation – Functional and presentation currency The acquisition of subsidiaries is accounted for using the purchase method. The results of subsidiary undertakings acquired during the period are included from Items included in the financial statements of each of the Group’s entities are the date of acquisition of a controlling interest. For the purpose of consolidation, measured using the currency of the primary economic environment in which the purchase consideration is allocated between the underlying net assets acquired, the entity operates (‘the functional currency’). The consolidated financial including intangible assets other than goodwill, on the basis of their fair value. statements are presented in Sterling, which is also the Company’s functional Excess costs of acquisition over fair value of the Group’s share of identifiable and presentation currency. net assets acquired are recorded as goodwill. – Transactions and balances The results of the subsidiary undertakings that have been sold during the year Foreign currency transactions are translated into the functional currency using the are included up to date of disposal. The profit or loss is calculated by reference exchange rates prevailing at the dates of the transactions. Foreign exchange gains to the net asset value at the date of disposal, adjusted for purchased goodwill and losses resulting from the settlement of such transactions and from the translation previously included on the balance sheet and foreign exchange reserve balances at year-end exchange rates of monetary assets and liabilities denominated in foreign on retranslation. currencies are recognised in the income statement. Inter-company transactions, balances and unrealised gains arising between Group Translation differences on non-monetary financial assets and liabilities are reported companies are eliminated in preparing the consolidated financial statements. as part of the fair value gain or loss and are recognised in the income statement. Accounting policies of subsidiaries have been changed where necessary to Non-monetary items carried at historical cost are reported using the exchange rate ensure consistency with the policies adopted by the Group. at the date of the transaction. Transactions with minority interests The differences between retained profits of overseas subsidiaries and associated The Group applies a policy of treating transactions with minority interests as undertakings translated at average and closing rates of exchange are taken to transactions with parties external to the Group. Disposals to minority interests reserves, as are differences arising on the retranslation of overseas net assets to result in gains and losses for the Group that are recorded in the income statement. Sterling at the end of the year (using closing rates of exchange). Any differences that Purchases from minority interests may result in goodwill, being any difference have arisen since 1 January 2004 are presented as a separate component of equity. between consideration paid and the relevant share acquired of the carrying value As permitted under IFRS1, any differences prior to that date are not included in this of net assets of the subsidiary. separate component of equity. Associates Associates are all entities over which the Group has significant influence but not control, generally accompanying a shareholding of between 20% and 50% of the voting rights. Investments in associates are accounted for using the equity method of accounting and are initially recognised at cost. The Group’s investment in associates includes goodwill (net of any accumulated impairment loss) identified on acquisition (see Note 18(a)). 94 Savills plc Our Results Report and Accounts 2007 Notes to the Financial Statements

2. Accounting policies continued Intangible assets acquired as part of business combinations and incremental When a foreign operation is sold, exchange differences that were recorded in contract costs are valued at fair value on acquisition and amortised over the useful equity are recognised in the income statement as part of the gain or loss on sale. life. Fair value on acquisition is determined by third-party valuations where the Goodwill and fair value adjustments arising on the acquisition of a foreign entity are acquisition is significant. Measurement subsequent to initial recognition is at fair value treated as assets and liabilities of the foreign entity and translated at the closing rate. less accumulated amortisation. Fair value is determined by impairment testing where an impairment loss is recognised to the extent that the carrying value exceeds the Property, plant and equipment higher of the asset’s fair value less cost to sell and its value-in-use. Amortisation Property, plant and equipment is stated at historical cost less accumulated charges are spread on a straight-line basis over the period of the assets’ estimated depreciation. Historical cost includes expenditure directly attributable to acquisition. useful lives as follows: Subsequent costs are included in the assets carrying amount or recognised as a separate asset, as appropriate, only when it is probable that the future economic Computer software 3 years benefits associated with the item will flow to the Group and the cost of the item can Property management contracts typically 2 – 10 years be measured reliably. Incremental contract costs 10 years Business and customer relationships 6 – 10 years Provision for depreciation is made at rates calculated on a straight-line basis Brands 5 years to write-off the assets over their estimated useful lives as follows: Impairment of non-financial assets Freehold property 50 years Assets that have indefinite useful lives are not subject to amortisation and are Leasehold property over unexpired tested annually for impairment. Assets that are subject to amortisation are reviewed (less than 50 years) term of lease for impairment whenever an indicator of impairment exists. An impairment loss is Furniture and office equipment 3–6 years recognised to the extent that the carrying value exceeds the higher of the asset’s Motor vehicles 3–5 years fair value less cost to sell and its value-in-use. For the purposes of assessing Computer equipment 3 years impairment, assets are grouped at the lowest levels for which there are separately Useful lives are reviewed and adjusted if appropriate, at each balance sheet date. identifiable cash flows (cash-generating units). Where it is not possible to estimate the recoverable amount of an individual asset, the Group estimates the recoverable An asset’s carrying amount is written down immediately to its recoverable amount amount of the cash-generating unit to which the asset belongs. if the asset’s carrying amount is greater than its estimated recoverable amount. Where it is not possible to estimate the recoverable amount of an individual asset, Goodwill the Group estimates the recoverable amount of the cash-generating unit to which Goodwill represents the excess of the cost of acquisition of a subsidiary or associate the asset belongs. over the Group’s share of the fair value of identifiable net assets acquired. Value-in-use is determined using the discounted cash flow method, with an In respect of associates, goodwill is included in the carrying value of the investment appropriate discount rate to reflect market rates and specific risks associated with in the associated company. Goodwill arising on acquisition is capitalised and the asset. If the recoverable amount is estimated to be less than its carrying amount, subject to annual impairment reviews. Goodwill is stated at cost less accumulated an impairment loss is recognised immediately in the income statement. impairment losses. Financial instruments Separately recognised goodwill is tested annually for impairment and carried at cost Financial assets and liabilities are recognised on the Group’s balance sheet at fair less accumulated impairment losses. Impairment losses on goodwill are not reversed. value when the Group becomes party to the contractual provisions of the instrument. Gains and losses on the disposal of an entity include the carrying amount of goodwill Subsequent measurement depends on the classification and is discussed below: relating to the entity sold. Goodwill is allocated to cash-generating units for the purpose of impairment testing. The allocation is made to those cash-generating units Investments or groups of cash-generating units that are expected to benefit from the business Available-for-sale investments are stated at fair value, with changes in fair value combination in which the goodwill arose. The Group allocates goodwill to each being recognised directly in equity. When such investments are disposed or become business segment in the geographical region in which it operates (Note 15). impaired, the accumulated gains and losses, previously recognised in equity, are recognised in the income statement. Intangible assets other than goodwill Acquired computer software licences are capitalised on the basis of the costs The investment in subsidiaries held by the Company are held at cost, less any incurred to acquire and bring to use the specific software. Costs associated with provision for impairment. developing or maintaining computer software programmes are recognised as an expense as incurred. 95 Savills plc Our Results Report and Accounts 2007 Notes to the Financial Statements

2. Accounting policies continued Deferred income tax is provided in full using the liability method, on temporary Trade receivables differences between the carrying amount of assets and liabilities for financial reporting Trade receivables are recognised initially at fair value and subsequently measured purposes and the amount used for the tax base. Deferred income tax is provided on at amortised cost less provision for impairment. Receivables are discounted where temporary differences arising on investments in subsidiaries and associates, except the time value of money is material. where the timing of the reversal of the temporary difference is controlled by the Group and it is probable that it will not reverse in the foreseeable future. A deferred income A provision for impairment of trade receivables is established when there is objective tax asset is recognised only to the extent that it is probable that future taxable profits evidence that the Group will not be able to collect all amounts due according to will be available against which the asset can be utilised. Deferred income tax assets the original terms of the receivables. Significant financial difficulties of the debtor, and liabilities are not discounted. Deferred income tax is determined using the tax probability that the debtor will enter bankruptcy or financial reorganisation, and default rates that have been enacted or substantially enacted by the balance sheet date and or delinquency in payments (more than 90 days’ overdue) are considered indicators are expected to apply when the related deferred tax asset is realised or deferred tax that the trade receivable is impaired. The amount of the provision is the difference liability is settled. Income tax and deferred tax is recognised in the income statement between the asset’s carrying amount and the present value of estimated future cash except to the extent that it relates to items recognised directly in equity, in which case flows, discounted at the original effective interest rate. it is recognised in equity. Cash and cash equivalents Pension obligations Cash and cash equivalents include cash in hand and deposits held on call with The Group has both defined benefit and defined contribution plans. A defined banks, together with other short-term highly liquid investments with original maturities contribution plan is a pension plan under which the Group pays fixed contributions of three months or less and working capital overdrafts, which are subject to an into a separate entity. The Group has no legal or constructive obligations to pay insignificant risk of changes in value. further contributions if the fund does not hold sufficient assets to pay all employees Bank borrowings the benefits relating to employee service in the current and prior periods. A defined Interest-bearing bank loans and overdrafts are initially measured at fair value, net benefit plan is a pension plan that is not a defined contribution plan. A defined benefit of transaction costs incurred, and subsequently measured at amortised cost using plan is a pension plan that defines an amount of pension benefit that an employee will the effective interest rate method. receive on retirement, usually dependent on one or more factors, such as age, years of service and compensation. Trade payables Trade payables are initially measured at fair value and subsequently measured The liability recognised in the balance sheet in respect of defined benefit pension at amortised cost, using the effective interest rate method. plans is the present value of the defined benefit obligation at the balance sheet date less the fair value of plan assets. The defined benefit obligation is calculated annually Derivative financial instruments and hedging by independent actuaries using the projected unit credit method. The present value Derivatives are initially recognised at fair value on the date a derivative contract of the defined benefit obligation is determined by discounting the estimated future is entered into and are subsequently remeasured at fair value. The method of cash outflows. recognising the resulting gain or loss depends on whether the derivative is designated as a hedging instrument and if so, the nature of the item being hedged. The defined benefit scheme charge consists of current service costs, interest costs, expected return on plan assets, past service costs and the impact of any settlements Certain derivatives do not qualify for hedge accounting. In these cases, changes or curtailments and is charged as an expense as they fall due. All actuarial gains and in the fair value of all derivative instruments are recognised immediately in the losses are recognised immediately in the statement of recognised income and income statement. expense as they arise. Share capital The Group also operates a defined contribution group personal pension plan for new Ordinary shares are classified as equity. Incremental costs directly attributable to entrants and a number of defined contribution individual pension plans. Contributions the issue of new shares or options are shown in equity as a deduction, net of tax, in respect of defined contribution pension schemes are charged to the income from the proceeds. When share capital is repurchased, the amount of consideration statement when they are payable. The Group has no further payment obligations paid, including directly attributable costs, is recognised as a charge to equity. once the contributions have been paid. Prepaid contributions are recognised as an Repurchased shares which are not cancelled, or shares purchased for the asset to the extent that a cash refund or a reduction in the future payments is Employee Share Ownership Trusts, are classified as treasury shares and presented available. as a deduction from total equity. Share-based payments Taxation The Group operates equity-settled share-based compensation plans. The fair value Taxation is that chargeable on the profits for the period, together with deferred of the employee services received in exchange for the grant of the options is taxation. The current income tax charge is calculated on the basis of the tax laws recognised as an expense. enacted at the balance sheet date in the countries where the Group operate and generate taxable income. Where applicable tax regulations are subject to Equity-settled share-based payments granted after 7 November 2002 that had not interpretation, provisions are established where appropriate on the basis of amounts vested as of 1 January 2005 are measured at fair value at the date of grant. The fair expected to be paid. value determined at the grant date of the equity-settled share-based payments is expensed on a straight-line basis over the vesting period, based on the Group’s estimate of shares that will eventually vest. 96 Savills plc Our Results Report and Accounts 2007 Notes to the Financial Statements

2. Accounting policies continued – Financial services The fair value of equity-settled share based payments is measured by the use of Insurance commission revenue is recognised when the insurance policy sold is in Actuarial Binomial option pricing model. At each balance sheet date, the Group effect and the amount of commission earned is determinable. Indemnity commission revises its estimates of the number of options that are expected to become is recognised when the policy sold is in effect. Mortgage commission is recognised exercisable. It recognises the impact of the revision of original estimates, if any, on completion with the exception of residential properties where 50% is recognised in the income statement, and a corresponding adjustment to equity over the at exchange and the remaining 50% at completion. remaining vesting period. The proceeds received net of any directly attributable transaction costs are credited to share capital (nominal value) and share premium – Work in progress when the options are exercised. Work in progress generally relates to consultancy revenue and is stated at the lower Employee Benefit Trust of cost and net realisable value. Cost includes an appropriate proportion of The Company has established The Savills plc 1992 Employee Benefit Trust (the EBT), overheads. the purposes of which are to grant awards to employees, to acquire shares in the – Interest income Company pursuant to the Savills plc 1992 Executive Share Option Scheme, the Savills Deferred Share Bonus Plan and the Savills Deferred Share Plan and to hold Interest income is recognised on a time-proportion basis using the effective interest shares in the Company for subsequent transfer to employees on exercise or vesting method. of the options/awards granted under the schemes. The assets and liabilities of the – Dividend income EBT are included in the balance sheet of the Group. Investments in the Group’s own shares are shown as a deduction from shareholders’ funds. Dividend income is recognised when the right to receive payment is established. Provisions – Other income Provisions are recognised when the Group has a present legal or constructive Other income includes interest and dividend income on available-for-sale investments obligation as a result of a past event and it is probable that the Group will be required plus fair value gains and losses on assets at fair value through profit or loss. to settle that obligation and the amount has been reliably estimated. Provisions are measured at the Directors’ best estimate of the expenditure required to settle the Accounting for leases obligation at the balance sheet date and are discounted to present value where the Assets financed by leasing agreements which give rights approximating to ownership effect is material. (finance leases) are capitalised in property, plant and equipment. Finance lease assets are initially recognised at an amount equal to the lower of their fair value and Revenue the present value of the minimum lease payments at inception of the lease, then Revenue comprises the fair value of the consideration received or receivable for depreciated over the lower of the lease life or the estimated useful lives on the the provision of services in the ordinary course of the Group’s activities. Revenue same basis as owned assets. The capital elements of future obligations under is shown net of value-added tax and after elimination of revenue within the Group. finance leases are included as liabilities in the balance sheet. Leasing payments – Residential transactional fees comprise capital and finance elements and the finance element is charged to the income statement. Generally, where contracts are unconditional, revenue is recognised on exchange of contracts however, on more complex contracts, revenue will be recognised on the The annual payments under all other lease agreements (operating leases) are date of completion. On multi-unit developments, revenue is recognised on a staged charged to the income statement on a straight-line basis over the lease term. basis, commencing when the underlying contracts are exchanged. Benefits received and receivable as an incentive to enter into the operating lease are also spread on a straight-line basis over the lease term. – Commercial transactional fees Non-current assets held for sale and discontinued operations Generally, revenue is recognised on the date of completion or when unconditional Non-current assets are classified as assets held for sale and stated at the lower contracts have been exchanged. of carrying amount and fair value less costs to sell, if their carrying amount is – Property consultancy recovered principally through a sale transaction rather than through a continuing use. Discontinued operations is a component of an entity that either has been disposed Revenue in respect of property consultancy represents commissions and fees of, or is classified as held for sale, and represents a separate major line of business or recognised on a time basis, fixed fee or percentage of completion. geographical area of operations, is part of a single co-ordinated plan to dispose of a – Property and facilities management separate major line of business or geographical area of operations or is a subsidiary acquired exclusively with a view to resale. Revenue represents fees earned for managing properties and providing facilities and is generally recognised in the period the services are provided using a straight-line Dividends basis over the term of the contract. Final dividends are recognised as a liability in the Group’s financial statements in the period in which they are approved by the Company’s shareholders. Interim dividends – Fund management are recognised when paid. Revenue represents commissions and fees receivable, net of marketing costs in accordance with the relevant fee agreements. 97 Savills plc Our Results Report and Accounts 2007 Notes to the Financial Statements

3. Financial risk management Interest rate risk Financial risk factors The Group has both interest bearing assets and liabilities. The Group finances its The Group’s activities expose it to a variety of financial risks. The Group has in place operations through a mixture of retained profits and bank borrowings, at both fixed a risk management programme that seeks to limit the adverse effects on the financial and floating interest rates. Borrowings issued at variable rates expose the Group performance of the Group. Occasionally, the Group uses financial instruments to fix cash flow interest rate risk. Borrowings issued at fixed rates expose the Group to fair foreign currency and interest rate risk. value interest rate risk. Occasionally, the Group enters into floating-to-fixed interest rate swaps to hedge the cash flow interest rate risk on borrowings. The finance function is responsible for implementing risk management policies applied by the Group and has a policy and procedures manual that sets out specific For the year ended 31 December 2007, if the average interest rate for the year had guidelines on financial risks and the use of financial instruments to manage these. changed with all other variables held constant, the Group post tax profit for the year would have increased or decreased as shown below: Foreign exchange risk The Group operates internationally and is exposed to foreign exchange risks primarily Movement of interest rates with respect to the Euro, US dollar and Hong Kong dollar. Foreign exchange risk +/–0.25% +/–0.50% +/–0.75% +/–1.00% arises from future commercial transactions, recognised assets and liabilities and net For the year ended 31 December 2007 investments in foreign operations. The Group finances some overseas investments Estimated impact on post tax profit 0.1 0.1 0.2 0.3 through the use of foreign currency borrowings. The Group does not actively seek For the year ended 31 December 2006 to hedge risks arising from foreign currency transactions due to their non cash nature Estimated impact on post tax profit 0.1 0.3 0.4 0.5 and the high costs associated with such hedging; however when there is a material committed foreign currency exposure the foreign exchange risk will be hedged. Credit risk For the year ended 31 December 2007, if the average currency conversion rates for The Group has no significant concentrations of credit risk. Credit risk arises from the year had changed with all other variables held constant, the Group post tax profit cash and cash equivalents, derivative financial instruments and deposits with banks for the year would have increased or decreased as shown below: and financial institutions, as well as credit exposures to clients, including outstanding Movement of currency against Sterling receivables and committed transactions. The Group has policies that require –10% – 5% +5% +10% appropriate credit checks on potential customers before business commences. For the year ended 31 December 2007 A risk control framework is used to assess the credit quality of clients, taking into account financial position, past experience and other factors. There were Estimated impact on post tax profit no significant individual trade receivable or other counterparty balances at Euro (0.7) (0.3) 0.3 0.6 31 December 2007 and 31 December 2006. Hong Kong dollar (1.4) (0.7) 0.6 1.2 US dollar 0.7 0.3 (0.3) (0.6) Individual risk limits for banks and financial institutions are set based on external ratings and in accordance with limits set by the Board. The utilisation of credit limits Estimated impact on components is regularly monitored. No credit limits were exceeded during the reporting period, of equity and management does not expect any losses from non-performance by these Euro (1.9) (0.9) 0.8 1.5 counterparties. The table below shows bank counterparties at balance sheet date: Hong Kong dollar (6.2) (2.9) 2.7 5.1 2007 2006 US dollar 2.1 1.0 (0.9) (1.8) Balance Balance Counterparty rating (provided by S&P) £m £m For the year ended 31 December 2006 AA 60.4 84.1 Estimated impact on post tax profit AA– 3.8 2.9 Euro (0.6) (0.3) 0.3 0.5 A+ 31.7 21.0 Hong Kong dollar (0.9) (0.4) 0.4 0.7 A 8.1 12.4 Estimated impact on components A– 3.8 2.4 of equity BBB– 2.9 1.3 Euro (2.0) (0.9) 0.8 1.6 Hong Kong dollar (4.2) (2.0) 1.8 3.4 Total 110.7 124.1

Price risk The Group is not materially exposed to equity securities price risk because listed investments held on the balance sheet are not significant. The Group is not exposed to commodity price risk. 98 Savills plc Our Results Report and Accounts 2007 Notes to the Financial Statements

3. Financial risk management continued In order to maintain an optimal capital structure, the Group may adjust the amount of Liquidity risk dividends paid to shareholders, return capital to shareholder, issue new shares or sell The Group maintains appropriate committed facilities to ensure the Group has assets to reduce debt. sufficient funds available for operations and expansion. The Group prepares an The Group’s policy is to borrow centrally if required to meet anticipated funding annual funding plan approved by the Board which sets out the Group’s expected requirements. These borrowings, together with cash generated from operations, are financing requirements for the next 12 months. then on-lent or contributed as equity to certain subsidiaries. The Board of Directors Management monitors rolling forecasts of the Group’s liquidity reserve (comprising monitor a number of debt measures including gross cash by location; gross debt undrawn borrowing facilities (Note 24) and cash and cash equivalents (Note 21)) by location; cash subject to restrictions; total debt servicing cost to operating profit; on the basis of expected cash flow. This is carried out at local level in the operating gross borrowings as a percentage of EBITDA (earnings before interest, tax, companies of the Group in accordance with Group practice as well as on a Group depreciation and amortisation); and forecast headroom against available facilities. consolidated basis. These internal measures indicate the levels of debt that the Group has and are closely monitored to ensure compliance with banking covenants and that the The table below analyses the Group’s financial liabilities and net-settled derivative Group has sufficient unused facilities. financial liabilities into relevant maturity groupings based on the remaining period at the balance sheet to the contractual maturity date. The amounts disclosed in the 4. Critical accounting estimates and management judgements table are the contractual undiscounted cash flows. Balances due within 12 months Critical accounting estimates and assumptions equal their carrying balances, as the impact of discounting is not significant. The preparation of the consolidated financial statements in conformity with Between 1 and Between 2 and Less than 1 year 2 years 5 years International Financial Reporting Standards (IFRS) requires management to make estimates and assumptions that affect the application of policies and reported As at 31 December 2007 amounts. Estimates and judgements are continually evaluated and are based on Borrowings 4.6 4.0 11.1 historical experience and other factors including expectations of future events that Loan notes 6.1 7.0 0.6 are believed to be reasonable under the circumstances. Actual results may differ Derivative financial instruments ––0.2from these estimates. Changes in accounting estimates may be necessary if there Trade and other payables 234.3 7.1 6.8 are changes in circumstances on which the estimate was based, or as a result of 245.0 18.1 18.7 new information or more experience. The estimates and assumptions that have a significant risk of causing a material adjustment to the carrying amounts of assets As at 31 December 2006 and liabilities within the next financial year are discussed below. Borrowings 1.4 – – Pension benefits Loan notes 5.9 10.8 1.2 The present value of the pension obligations depends on a number of factors that are Derivative financial instruments 0.2 0.2 0.1 determined on an actuarial basis using a number of assumptions including discount Trade and other payables 191.8 0.3 1.7 rate. Any changes in these assumptions will impact the carrying amount of pension obligations. The Group determines the appropriate discount rate at the end of each 199.3 11.3 3.0 year. In determining the appropriate discount rate, the Group considers the interest Capital risk management rates of high-quality corporate bonds that are denominated in the currency in which The Group’s objectives when managing capital are: the benefits will be paid and that have terms to maturity approximating the terms of the related pension liability. Other key assumptions for pension obligations are based – to safeguard the Group’s ability to provide returns for shareholders and benefits in part on current market conditions. Additional information is disclosed in Note 10. for other stakeholders; and Income taxes – to maintain an optimal capital structure to reduce the cost of capital. The Group is subject to income taxes in numerous jurisdictions. Judgement is Savills plc is not subject to any externally imposed capital requirements, with the required in determining the provision for income taxes. There are transactions and exception of our FSA regulated entities, which complied with all capital requirements calculations for which the ultimate tax determination is uncertain. Where the final tax during the year ended 31 December 2007. outcome of these matters is different from the amounts that were initially recorded, such differences will impact the income tax and deferred tax provisions in the period in which such determination is made. 99 Savills plc Our Results Report and Accounts 2007 Notes to the Financial Statements

4. Critical accounting estimates and management judgements continued Fair value of options granted to employees The Group uses the Binomial Model in determining the fair value of options granted to employees under the Group’s various schemes as detailed in the Remuneration Report. Information on such assumptions is contained in Note 28. The alteration of these assumptions may impact charges to the income statement over the vesting period of the award. Estimated impairment of goodwill The Group tests annually whether goodwill has suffered any impairment. The recoverable amounts of cash-generating units have been determined based on value-in-use calculations. The use of this method requires the estimate of future cash flows expected to arise from the continuing operation of the cash-generating unit and the choice of a suitable discount rate in order to calculate the present value. Actual outcomes could vary significantly from these estimates. The estimates used in these financial statements are contained in Note 15. Fair value of derivatives and other financial instruments The fair value of financial instruments that are not traded in an active market (for example, over-the-counter derivatives) is determined by using valuation techniques. The Group uses its judgement to select a variety of methods and make assumptions that are mainly based on market conditions existing at each balance sheet date. Provisions The Group and its subsidiaries are party to various legal claims. Provisions made within these financial statements are contained in Note 26(a). Additional claims could be made which might not be covered by existing provisions or by insurance. Critical judgements in applying the entity’s accounting policies The application of the Group’s accounting policies may require management to make judgements, apart from those involving estimates, that can affect the amounts recognised in the consolidated financial statements. Such judgements include the following areas: Award of options and deferred shares to employees The Group applies judgement in deciding the proportion of the available bonus pool to be awarded to employees under its long-term share-based incentive scheme. The Group’s current policy is to deduct from the bonus pool an amount equal to the market value of the share price on the date of award. Under IFRS, the value of award is spread over the vesting period and charged to the income statement. The charge to the income statement is currently lower than the market value of shares to be awarded. Valuation of intangible assets and useful life The Group has made assumptions in relation to the potential future cash flows to be determined from separable intangible assets acquired as part of business combinations. This assessment involves assumptions relating to potential future revenues, appropriate discount rates and the useful life of such assets. These assumptions impact the income statement over the useful life of the intangible asset. 100 Savills plc Our Results Report and Accounts 2007 Notes to the Financial Statements

5. Segment analysis Property & Transactional Facilities Fund Financial Advice Consultancy Management Management Services Unallocated* Total Year ended 31 December 2007 £m £m £m £m £m £m £m Revenue United Kingdom – commercial 79.4 84.0 38.9 15.4 3.5 – 221.2 – residential 115.0 30.4 12.7 – 26.3 – 184.4 194.4 114.4 51.6 15.4 29.8 – 405.6 Rest of Europe 45.4 10.7 18.1 – – – 74.2 Asia Pacific 60.6 16.4 90.0 – – – 167.0 America 3.7 – – – – – 3.7 Total revenue 304.1 141.5 159.7 15.4 29.8 – 650.5 Operating profit United Kingdom – commercial 15.9 14.2 3.0 4.1 1.0 (3.0) 35.2 – residential 17.8 5.7 0.7 – 3.5 – 27.7 33.7 19.9 3.7 4.1 4.5 (3.0) 62.9 Rest of Europe 3.9 2.1 (0.3) – – – 5.7 Asia Pacific 8.9 1.6 4.1 – – – 14.6 America 0.2 – – – – – 0.2 Operating profit/(loss) 46.7 23.6 7.5 4.1 4.5 (3.0) 83.4 Finance income (Note 11) 2.1 Share of post tax profit/(loss) from associates and joint ventures 1.1 (1.4) 0.7 – – – 0.4 Profit before income tax 85.9 Income tax expense (28.0) Profit for the year from continuing operations 57.9

Year ended 31 December 2006 Revenue United Kingdom – commercial 83.5 59.6 34.8 7.2 3.7 0.3 189.1 – residential 91.5 22.4 8.8 – 23.2 – 145.9 175.0 82.0 43.6 7.2 26.9 0.3 335.0 Rest of Europe 32.6 5.3 10.2 – – – 48.1 Asia Pacific 39.6 11.5 83.4 – – – 134.5 Total revenue 247.2 98.8 137.2 7.2 26.9 0.3 517.6 Operating profit United Kingdom – commercial 19.7 11.0 3.1 0.8 1.0 0.5 36.1 – residential 20.4 4.0 1.0 – 3.0 – 28.4 40.1 15.0 4.1 0.8 4.0 0.5 64.5 Rest of Europe 4.3 0.7 (0.1) – – – 4.9 Asia Pacific 4.2 0.7 5.9 – – – 10.8 Operating profit 48.6 16.4 9.9 0.8 4.0 0.5 80.2 Finance income (Note 11) 3.7 Share of post tax profit/(loss) from associates and joint ventures 0.6 (0.7) 0.6 – – – 0.5 Profit before income tax 84.4 Income tax expense (25.6) Profit for the year from continuing operations 58.8

*For the purpose of the segmental information above, and to assist in the comparison of segmental information, the benefit arising from the amortisation of the share based payment charge (as discussed in more detail in Note 14(b)) is retained within the unallocated segment.

101 Savills plc Our Results Report and Accounts 2007 Notes to the Financial Statements

5. Segment analysis continued Other segmental items included in the income statement are as follows: Property & Transactional Facilities Fund Financial Advice Consultancy Management Management Services Unallocated* Total Year ended 31 December 2007 £m £m £m £m £m £m £m Depreciation (Note 17) United Kingdom – commercial 0.5 0.8 0.4 0.1 0.1 0.6 2.5 – residential 1.1 0.2 0.2 – – – 1.5 Rest of Europe 0.3 0.1 0.2 – – – 0.6 Asia Pacific 0.6 0.1 0.9 – – – 1.6 2.5 1.2 1.7 0.1 0.1 0.6 6.2 Amortisation of intangibles (Note 16) United Kingdom – commercial 0.6 – 0.1 0.1 – 0.2 1.0 – residential – – 0.1 – – – 0.1 Rest of Europe 1.0 0.1 0.4 – – – 1.5 Asia Pacific 0.1 0.1 0.8 – – – 1.0 America 0.5 – – – – – 0.5 2.2 0.2 1.4 0.1 – 0.2 4.1 Impairment of goodwill and available-for-sale investments (Notes 15 and 18(b)) United Kingdom – commercial 0.3 – – – – 1.0 1.3 Rest of Europe – – 0.3 – – – 0.3 0.3 – 0.3 – – 1.0 1.6 Other non-cash expenses United Kingdom – commercial 1.9 1.8 0.3 0.3 0.4 0.3 5.0 – residential 2.6 0.9 0.2 – – – 3.7 4.5 2.7 0.5 0.3 0.4 0.3 8.7

Year ended 31 December 2006 Depreciation (Note 17) United Kingdom – commercial 0.7 0.5 0.2 0.1 0.2 0.9 2.6 – residential 0.7 0.2 0.1 – – – 1.0 Rest of Europe 0.3 – 0.1 – – – 0.4 Asia Pacific 0.6 0.1 0.8 – – 0.1 1.6 2.3 0.8 1.2 0.1 0.2 1.0 5.6 Amortisation of intangibles (Note 16) United Kingdom – commercial 0.4 0.1 – 0.1 – 0.2 0.8 – residential – – 0.2 – – – 0.2 Rest of Europe 0.6 0.1 0.2 – – – 0.9 Asia Pacific – – 0.4 – – 0.1 0.5 1.0 0.2 0.8 0.1 – 0.3 2.4 Other non-cash expenses United Kingdom – commercial 1.7 0.7 0.1 – – 0.4 2.9 – residential 1.8 0.4 0.2 – – – 2.4 3.5 1.1 0.3 – – 0.4 5.3

102 Savills plc Our Results Report and Accounts 2007 Notes to the Financial Statements

5. Segment analysis continued Property & Transactional Facilities Fund Financial Advice Consultancy Management Management Services Unallocated Total Year ended 31 December 2007 £m £m £m £m £m £m £m Segment assets United Kingdom – commercial 50.4 36.3 6.7 14.9 20.5 30.6 159.4 – residential 79.3 26.7 9.7 – – – 115.7 Rest of Europe 65.1 17.1 13.2 – – – 95.4 Asia Pacific 49.1 11.2 63.2 – – 5.8 129.3 America 28.9 – – – – – 28.9 272.8 91.3 92.8 14.9 20.5 36.4 528.7 Investment in associates and joint ventures 5.3 0.1 3.5 – – – 8.9 Total assets 278.1 91.4 96.3 14.9 20.5 36.4 537.6 Segment liabilities United Kingdom – commercial 29.7 25.3 3.5 8.0 13.0 9.3 88.8 – residential 50.2 23.8 5.7 – – – 79.7 Rest of Europe 22.2 9.5 1.6 – – – 33.3 Asia Pacific 26.8 4.3 26.1 – – – 57.2 America 8.0 – – – – – 8.0 136.9 62.9 36.9 8.0 13.0 9.3 267.0 Unallocated liabilities – tax – – – – – 13.8 13.8 – borrowings – – – – – 33.2 33.2 Total liabilities 136.9 62.9 36.9 8.0 13.0 56.3 314.0 Segment net assets 141.2 28.5 59.4 6.9 7.5 (19.9) 223.6

Capital expenditure United Kingdom – commercial 0.5 0.6 0.2 0.1 0.2 1.2 2.8 – residential 3.8 1.7 0.9 – – – 6.4 Rest of Europe 0.8 0.2 1.2 – – – 2.2 Asia Pacific 0.7 0.3 1.1 – – – 2.1 America 5.0 – – – – – 5.0 10.8 2.8 3.4 0.1 0.2 1.2 18.5 103 Savills plc Our Results Report and Accounts 2007 Notes to the Financial Statements

5. Segment analysis continued Property & Transactional Facilities Fund Financial Advice Consultancy Management Management Services Unallocated Total Year ended 31 December 2006 (restated) £m £m £m £m £m £m £m Segment assets United Kingdom – commercial 53.0 39.0 9.4 8.7 18.1 41.1 169.3 – residential 68.5 24.1 10.2 – – – 102.8 Rest of Europe 64.6 13.2 6.4 – – – 84.2 Asia Pacific 29.4 6.8 59.3 – – 5.8 101.3 215.5 83.1 85.3 8.7 18.1 46.9 457.6 Investment in associates and joint ventures 3.1 0.1 2.4 – – – 5.6 Total assets 218.6 83.2 87.7 8.7 18.1 46.9 463.2 Segment liabilities United Kingdom – commercial 27.0 18.3 2.8 6.0 9.7 16.7 80.5 – residential 52.0 22.9 6.1 – – – 81.0 Rest of Europe 16.4 2.7 0.8 – – – 19.9 Asia Pacific 12.1 1.9 22.1 – – 2.5 38.6 107.5 45.8 31.8 6.0 9.7 19.2 220.0 Unallocated liabilities – tax – – – – – 11.0 11.0 – borrowings – – – – – 19.4 19.4 Total liabilities 107.5 45.8 31.8 6.0 9.7 49.6 250.4 Segment net assets 111.1 37.4 55.9 2.7 8.4 (2.7) 212.8

Capital expenditure United Kingdom – commercial 4.4 0.4 0.1 0.2 0.3 1.4 6.8 – residential 2.1 0.5 0.3 – – – 2.9 Rest of Europe 8.5 0.8 0.9 – – – 10.2 Asia Pacific 1.2 0.2 1.9 – – 3.3 6.6 16.2 1.9 3.2 0.2 0.3 4.7 26.5

The matrix approach of disclosing both the business and geographical segments as primary reporting formats provides the most useful information, as the Group is strongly affected by both differences in the types of services it provides and the geographical areas in which it operates. All operations are continuing. The unallocated segment includes holding company costs, group bonuses and other expenses not directly attributable to the operating activities of the Group’s business segments. Segment assets include property, plant and equipment, goodwill, receivables and operating cash and mainly exclude investments. Segment liabilities comprise operating liabilities and exclude taxation and corporate borrowings. Capital expenditure comprises additions to property, plant and equipment, including intangible additions resulting from acquisitions through business combinations and separately acquired. The Group manages its business segments on a global basis. Operations are based in four main geographical areas. The UK is the home of the parent Company with segment operations throughout England and Scotland. Asia Pacific segment operations are based in Hong Kong, Macau, China, Korea, Japan, Taiwan, Thailand, Singapore, Vietnam and Australia. Europe segment operations are based in Germany, France, Spain, Netherlands, Sweden, Italy, Ireland, Hungary and Poland. America segment operations are based in New York. The sales location of the client is not materially different from the location where fees are received and where the segment assets are located. 104 Savills plc Our Results Report and Accounts 2007 Notes to the Financial Statements

6(a). Operating profit Operating profit is stated after charging/(crediting): Group Year to Year to 31 December 31 December 2007 2006 £m £m Depreciation 6.2 5.6 Amortisation of intangibles and impairment of goodwill and available-for-sale investments 5.7 2.4 Loss on sale of property, plant and equipment 0.7 0.4 Operating lease rentals – Hire of plant and machinery 1.4 0.2 – Property 16.5 11.3 Rental income (0.8) (1.0) Other income – dividend and investment income (0.7) (0.8)

Profit on disposals is made up as follows: Profit on disposals – Available-for-sale investments* 0.4 4.5 – Associates 0.3 0.4 – Joint ventures – 0.5 – Subsidiary – (0.3) 0.7 5.1

*The Group disposed of its 13.72% interest in Fastcrop plc in January 2006, at a profit after costs of £4.5m.

6(b). Income Statement of the Company As permitted by Section 230 of the Companies Act 1985, the income statement of the Company is not presented as part of these accounts. The Company receives dividends from subsidiaries and charges subsidiaries for the provision of Group related services. The profit after income tax of the Company for the year was £37.4m (2006 – £43.3m).

6(c). Fees payable to Group auditors, PricewaterhouseCoopers LLP and its associates: Group Year to Year to 31 December 31 December 2007 2006 £m £m Audit services Fees payable to Company auditor for the audit of parent Company and consolidated accounts 0.2 0.2 Other services Fees payable to the Company’s auditors and its associates for other services: The audit of Company subsidiaries pursuant to legislation 0.6 0.4 Other services pursuant to legislation 0.3 0.1 Tax services 0.2 0.2 Services relating to corporate finance transactions proposed to be entered into by the Company 0.3 0.1 1.6 1.0

105 Savills plc Our Results Report and Accounts 2007 Notes to the Financial Statements

7. Underlying profit before tax 7(a). From continuing operations Year to Year to 31 December 31 December 2007 2006 £m £m Reported profit before income tax 85.9 84.4 Adjustments: Amortisation of intangibles (excluding software) and impairment of goodwill and available-for-sale investments 5.1 1.8 Share-based payment adjustment (4.8) (6.1) Profit on disposal of subsidiary, associate, joint ventures and available-for-sale investments (0.7) (5.1) Underlying profit before tax 85.5 75.0

The Directors regard the above adjustments necessary to give a fair picture of the underlying results of the Group for the period. The adjustment for share based payment relates to the impact of the accounting standard for share based compensation. The annual bonus is paid in a mixture of cash and deferred shares and the proportions can vary from one year to another. Under IFRS the deferred share element is amortised to the income statement over the vesting period whilst the cash element is expensed in the year. The adjustment above addresses this by deducting from profit the difference between the IFRS 2 charge and the value of the annual share award.

7(b). Underlying segmental analysis Property & Transactional Facilities Fund Financial Advice Consultancy Management Management Services Unallocated Total Year ended 31 December 2007 £m £m £m £m £m £m £m

United Kingdom – commercial 17.7 13.1 3.0 4.1 1.0 (5.5) 33.4 – residential 17.3 5.6 1.6 – 4.1 – 28.6 35.0 18.7 4.6 4.1 5.1 (5.5) 62.0 Rest of Europe 3.8 2.0 0.1 – – – 5.9 Asia Pacific 9.6 1.6 6.2 – – – 17.4 America 0.2 – – – – – 0.2 Total underlying profit/(loss) 48.6 22.3 10.9 4.1 5.1 (5.5) 85.5

Property & Transactional Facilities Fund Financial Advice Consultancy Management Management Services Unallocated Total Year ended 31 December 2006 £m £m £m £m £m £m £m

United Kingdom – commercial 20.5 10.6 2.8 0.7 1.0 (3.9) 31.7 – residential 16.6 4.0 1.4 – 3.4 – 25.4 37.1 14.6 4.2 0.7 4.4 (3.9) 57.1 Rest of Europe 4.7 0.8 – – – – 5.5 Asia Pacific 4.4 0.7 7.3 – – – 12.4 Total underlying profit/(loss) 46.2 16.1 11.5 0.7 4.4 (3.9) 75.0

106 Savills plc Our Results Report and Accounts 2007 Notes to the Financial Statements

8. Non-current assets held for sale and discontinued operations The 2006 results relate to the assets and liabilities of the Student Halls Long Lease 1 Unit Trust which were disposed during the year ended 31 December 2006. The analysis of the result of discontinued operations is as follows: Year to Year to 31 December 31 December 2007 2006 £m £m Revenue – 1.1 Expenses – (0.4) Profit before income tax – 0.7 Income tax expense – (0.4) Profit after income tax – 0.3

9(a). Employee benefits expense – Staff and Directors Group Company Year to Year to Year to Year to 31 December 31 December 31 December 31 December 2007 2006 2007 2006 £m £m £m £m Basic salaries and wages 184.5 147.2 4.8 3.3 Incentive bonuses and commissions 152.0 125.2 3.2 3.8 336.5 272.4 8.0 7.1 Social security costs 28.6 21.3 0.8 0.6 Other pension costs 9.1 7.1 0.2 0.3 Share-based payments 8.1 5.3 0.2 0.4 382.3 306.1 9.2 8.4

9(b). Staff numbers The average number of employees (including directors) during the year was: Group Year to Year to 31 December 31 December 2007 2006 Number Number UK 3,192 2,637 America 23 – Rest of Europe 729 449 Asia Pacific 14,085 12,758 18,029 15,844

The average number of UK employees (including directors) during the year included 74 employed under fixed term and temporary contracts (2006 – 109). The average number of employees of the Company was 127 (2006 – 94) which are all located in the UK. 107 Savills plc Our Results Report and Accounts 2007 Notes to the Financial Statements

9(c). Key management compensation Group Year to Year to 31 December 31 December 2007 2006 £m £m Key management – Remuneration excluding bonuses 0.8 0.8 – Bonuses 4.8 4.5 – National Insurance 0.4 1.1 Fees to Non-Executive Directors 0.3 0.3 Total short-term employee benefits 6.3 6.7 Share- based payments 0.7 0.6 7.0 7.3

Key management are those persons having authority and responsibility for planning, directing, and controlling the activities of the entity and include Executive and Non-Executive Directors. During the year five Executive Directors made gains totalling £2.9m on the exercise of options under the DSBP, ESOP, Sharesave and 2001 Option Schemes (2006 – £4.4m). The pension annuity for the highest paid Director was £44,188 with no lump sum accrued (2006 – £40,417 with no lump sum accrued). Retirement benefits under the defined benefit scheme are accruing for three Directors and benefits are accruing under the defined contribution scheme for one Executive Director.

10. Pension scheme Defined contribution plans The Group operates the Savills UK Group Personal Pension Plan, a defined contribution scheme, a number of defined contribution individual pension plans and a Mandatory Provident Fund Scheme in Hong Kong, to which it contributes. The total pension charges in respect of these plans were £6.6m (2006 – £4.4m). Defined benefit plan The Group operates a pension scheme providing benefits based on final pensionable salary. The assets of the scheme are held separately from those of the Group, being invested in managed funds units. The contributions are determined by an independent qualified actuary on the basis of triennial valuations. The most recent actuarial valuation completed, using the projected unit method, was as at 5 April 2007. The assumptions which have the most significant effect on the results of the valuation are those relating to the rate of return on investments pre retirement, the rates of increase in salaries and the post retirement investment return. The valuation showed that the market value of the scheme’s assets was £100.7m and that the actuarial value of those assets represented 98% of the benefits that had accrued to members, after allowing for expected future increases in earnings. The scheme has been closed to new joiners for pension benefits since 1 April 2000. Group Principal assumptions at 31 December 2007 2006 Expected return on plan assets – Equities 8.10% 7.85% – Bonds 5.00% 4.65% – Property 7.10% 6.85% – Other 5.35% 4.85% Expected rate of salary increases 5.00% 4.60% Rate of increase to pensions in payment – accrued before 6 April 1997 3.00% 3.00% – accrued after 5 April 1997 3.40% 3.10% – accrued after 5 April 2005 2.40% 2.40% Rate of increase to pensions in deferment – accrued before 6 April 2001 5.00% 5.00% – accrued after 5 April 2001 3.40% 3.10% Average life expectancy in years – male pensioner retiring at age 60 26.3 26.3 Average life expectancy in years – female pensioner retiring at age 60 28.8 28.8 Discount rate 5.80% 5.10% Inflation assumption 3.40% 3.10% 108 Savills plc Our Results Report and Accounts 2007 Notes to the Financial Statements

10. Pension scheme continued Using post-retirement mortality assumptions, the assured life expectations on retirement at age 60 are as follows: Group 2007 2006 Retiring today – Male 86.3 86.3 – Female 88.8 88.7 Retiring in 20 years – Male 87.6 87.6 – Female 89.9 89.8

Sensitivity analysis of the discount rate: Change in assumption Reduce by 0.1% p.a. Impact on liabilities Increase by 2.5% The amounts recognised in the balance sheet are as follows: Group Company 2007 2006 2007 2006 £m £m £m £m Fair value of plan assets 103.4 96.6 5.7 4.6 Present value of funded obligations (113.4) (112.1) (6.2) (5.4) Deficit (10.0) (15.5) (0.5) (0.8) Related deferred tax asset 3.5 4.7 0.2 0.2 Net liability (6.5) (10.8) (0.3) (0.6)

The amounts recognised in the income statement: Group 2007 2006 £m £m Current service cost 3.8 3.9 Interest cost 5.8 4.9 Expected return on plan assets (7.1) (6.1) Total included in staff costs (Note 9) 2.5 2.7

All net actuarial gains or losses for each year are recognised in full in the year in which they are incurred in the statement of recognised income and expense. Change in defined benefit obligation: Group 2007 2006 £m £m Present value of defined benefit obligation at start of year 112.1 102.8 Current service cost 3.8 3.9 Interest cost 5.8 4.9 Plan participants contributions 1.2 1.1 Actuarial gain (8.5) – Benefits paid (1.0) (0.6) Present value of defined benefit obligation at end of year 113.4 112.1

109 Savills plc Our Results Report and Accounts 2007 Notes to the Financial Statements

10. Pension scheme continued Change in plan assets: Group 2007 2006 £m £m Fair value of plan assets at start of year 96.6 85.4 Expected return on plan assets 7.1 6.1 Actuarial (loss)/gain (2.7) 2.5 Employer contributions 2.2 2.1 Plan participants contributions 1.2 1.1 Benefits paid (1.0) (0.6) Fair value of plan assets at end of year 103.4 96.6

The actual return on plan assets was £4.4m (2006 – £8.7m). The overall expected return on assets is determined as the weighted average of the expected returns on each separate asset class shown below. The expected return on plan assets is determined by the expected rate of return over the remaining life of the related liabilities held by the scheme. The expected rate of return on equities is based on market expectations of dividend yields and price earnings ratios. Expected returns on bonds are based on gross redemption yields as at the balance sheet date. The amounts recognised in the statement of recognised income and expense: Group 2007 2006 £m £m Actuarial losses brought forward (14.3) (16.8) Net actuarial gains for the year 5.8 2.5 Accumulated net actuarial losses (8.5) (14.3)

The major categories of assets as a percentage of total plan assets are as follows: 2007 2006 Equities 79% 79% Bonds 15% 14% Property 5% 6% Cash 1% 1% Total 100% 100%

No plan assets are the Group’s own financial instruments or property occupied or used by the Group. Amounts for the current and previous four years are as follows: 2007 2006 2005 2004 2003 £m £m £m £m £m Plan assets 103.4 96.6 85.4 60.8 37.8 Defined benefit obligation (113.4) (112.1) (102.8) (81.1) (63.3) Deficit (10.0) (15.5) (17.4) (20.3) (25.5) Experience losses on plan liabilities (5%) (3%) (14%) (14%) (6%) Experience (losses)/gains on plan assets (4%) 3% 8% 3% 9%

The Group expects to contribute £4.2m (2007 – £2.2m) (£0.1m – Company, 2007 – £0.1m) to its pension plan in 2008, being 23.8% of pensionable salaries (2007 – 12.5%). The increase reflects the recent triennial valuation and accelerating the reduction of the pension deficit. 110 Savills plc Our Results Report and Accounts 2007 Notes to the Financial Statements

11. Finance income and costs Group Year to Year to 31 December 31 December 2007 2006 £m £m Finance income – bank interest receivable 4.5 4.8

Bank interest payable (2.3) (0.9) Fair value loss – forward foreign currency contracts and interest rate swaps (0.1) (0.2) Finance costs (2.4) (1.1) Net finance income 2.1 3.7

12. Income tax on profit from continuing operations Group Year to Year to 31 December 31 December 2007 2006 Analysis of tax expense for the year £m £m Current tax United Kingdom: Corporation tax at 30% (2006 – 30%) 21.3 18.9 Adjustment in respect of previous years 0.1 (0.2) 21.4 18.7 Foreign tax: 7.2 4.9 Adjustment in respect of previous years (0.2) (0.2) Total current tax 28.4 23.4 Deferred tax Representing: United Kingdom 1.0 2.0 Foreign tax (0.9) (0.3) Adjustment in respect of previous years (0.5) 0.5 Total deferred tax (Note 19) (0.4) 2.2 Income tax expense on profit from continuing operations 28.0 25.6

Income tax expense on discontinued operations is included in Note 8. The tax charged to equity is as follows: Group Company 2007 2006 2007 2006 £m £m £m £m Current tax credit on employee benefits 3.8 5.4 0.3 0.5 Current tax charge on revaluations of available-for-sale investments – (1.4) – – Deferred tax on pension asset (2.0) (0.8) (0.1) – Deferred tax charge on employee benefits (6.5) (0.9) (0.4) (0.9) Deferred tax on revaluations of available-for-sale investments (0.1) 1.3 – – Deferred tax on exchange movements and exchange reserves (0.2) (0.1) – – Tax on items taken directly to reserves (5.0) 3.5 (0.2) (0.4)

111 Savills plc Our Results Report and Accounts 2007 Notes to the Financial Statements

12. Income tax on profit from continuing operations continued The tax on the Group’s profit before tax differs from the theoretical amount that would arise using the weighted average tax rate applicable to profits of the consolidated companies. The tax for the year is higher (2006 – higher) than the standard rate of corporation tax in the UK (30%). The total tax charge on profit from continuing operations can be reconciled to accounting profit as follows: Group Year to Year to 31 December 31 December 2007 2006 £m £m Profit on continuing operations before tax 85.9 84.4 Profit on ordinary activities multiplied by standard rate of corporation tax in the UK of 30% (2006 – 30%) 25.8 25.3 Effects of: Adjustments to tax in respect of previous years (0.6) 0.1 Adjustments in respect of foreign tax rates (2.1) (1.2) Impact of falling share price below fair value of share awards/options at date of grant 2.1 – Income not subject to tax (0.5) – Expenses and other charges not deductible for tax purposes 3.3 1.4 Income tax expense on profit from continuing operations 28.0 25.6

The effective tax rate on the continuing operations of the Group for the year ended 31 December 2007 is 32.6% (2006 – 30.3%).

13. Dividends Year to Year to 31 December 31 December 2007 2006 £m £m Amounts recognised as distribution to equity holders in the year: Ordinary final dividend of 11.0p per share (2006 – 8.0p) 13.4 10.0 Interim dividend of 6.0p per share (2006 – 5.0p) 7.3 6.2 20.7 16.2

Proposed final dividend for the year ended 31 December 2007 of 12.0p per share 14.5

The final dividend in respect of the year ended 31 December 2007 is to be proposed at the Annual General Meeting on 7 May 2008. These financial statements do not reflect this dividend payable. Under the terms of The Savills plc 1992 Employee Benefit Trust (the EBT), the Trustee has waived all but 0.01p of any dividend on each share held by the Trust. Savills QUEST Trustees Limited, the trustee of the Qualifying Employee Share Trust, has waived all dividends on the shares it holds. 112 Savills plc Our Results Report and Accounts 2007 Notes to the Financial Statements

14(a). Basic and diluted earnings per share Basic earnings per share are based on the profit for the year and the weighted average number of ordinary shares in issue during the year, excluding the shares held by the EBT, 11,164,834 shares (2006 – 9,361,954 shares) and QUEST, 2,154 shares (2006 – 2,154 shares). For diluted earnings per share, the weighted average number of ordinary shares in issue is adjusted to assume conversion of dilutive potential ordinary shares, being the share options granted to employees where the exercise price is less that the average market price of the Company’s ordinary shares during the year. The earnings and the shares used in the calculations are as follows: Year to Year to Year to Year to Year to Year to 31 December 31 December 31 December 31 December 31 December 31 December 2007 2007 2007 2006 2006 2006 Earnings Shares EPS Earnings Shares EPS From continuing and discontinued operations £m million pence £m million pence Basic earnings per share 55.3 121.6 45.5 57.7 124.7 46.3 Effect of additional shares issuable under option – 3.2 (1.2) –5.8 (2.1) Diluted earnings per share 55.3 124.8 44.3 57.7 130.5 44.2 From continuing operations Basic earnings per share 55.3 121.6 45.5 57.4 124.7 46.0 Effect of additional shares issuable under option – 3.2 (1.2) –5.8 (2.0) Diluted earnings per share 55.3 124.8 44.3 57.4 130.5 44.0 From discontinued operations Basic earnings per share – 121.6 – 0.3 124.7 0.3 Effect of additional shares issuable under option –3.2– –5.8 (0.1) Diluted earnings per share – 124.8 – 0.3 130.5 0.2

14(b). Underlying basic earnings per share Excludes impairment of goodwill and available-for-sale investments and amortisation of intangibles, share-based payment adjustment and disposals. Year to Year to Year to Year to Year to Year to 31 December 31 December 31 December 31 December 31 December 31 December 2007 2007 2007 2006 2006 2006 Earnings Shares EPS Earnings Shares EPS From continuing and discontinued operations £m million pence £m million pence Basic earnings from continuing operations 55.3 121.6 45.5 57.7 124.7 46.3 Amortisation of intangibles (excluding software) and impairment of goodwill and available-for-sale investments after tax 4.6 – 3.8 1.3 – 1.0 Share-based payment adjustment after tax (3.4) – (2.8) (4.3) – (3.4) Profit on disposal of subsidiary, associate, joint venture and available-for-sale investments after tax (0.5) –(0.4) (3.5) – (2.8) Underlying basic earnings per share 56.0 121.6 46.1 51.2 124.7 41.1 Effect of additional shares issuable under option – 3.2 (1.2) –5.8 (1.9) Underlying diluted earnings per share 56.0 124.8 44.9 51.2 130.5 39.2

113 Savills plc Our Results Report and Accounts 2007 Notes to the Financial Statements

14(b). Underlying basic earnings per share continued Year to Year to Year to Year to Year to Year to 31 December 31 December 31 December 31 December 31 December 31 December 2007 2007 2007 2006 2006 2006 Earnings Shares EPS Earnings Shares EPS From continuing operations £m million pence £m million pence Basic earnings from continuing operations 55.3 121.6 45.5 57.4 124.7 46.0 Amortisation of intangibles (excluding software) and impairment of goodwill and available-for-sale investments after tax 4.6 – 3.8 1.3 – 1.0 Share-based payment adjustment after tax (3.4) – (2.8) (4.3) – (3.4) Profit on disposal of subsidiary, associate, joint venture and available-for-sale investments after tax (0.5) –(0.4) (3.5) – (2.8) Underlying basic earnings per share 56.0 121.6 46.1 50.9 124.7 40.8 Effect of additional shares issuable under option – 3.2 (1.2) –5.8 (1.8) Underlying diluted earnings per share 56.0 124.8 44.9 50.9 130.5 39.0

The Directors regard the above adjustments necessary to give a fair picture of the underlying results of the Group for the period. The adjustment for share-based payment relates to the transitional impact of the accounting standard for share based compensation. The annual bonus is paid in a mixture of cash and deferred shares and the proportions can vary from one year to another. Under IFRS the deferred share element is amortised to the income statement over the vesting period whilst the cash element is expensed in the year. The adjustment above addresses this by deducting from profit the difference between the IFRS 2 charge and the value of the annual share award. The gross amounts of the above adjustments are profits on disposals £0.7m (2006 – £5.1m), share-based payment adjustment £4.8m (2006 – £6.1m) and add back of amortisation of intangibles (excluding software) and impairment of goodwill and available-for-sale investments of £5.1m (2006 – £1.8m).

15. Goodwill Group Company £m £m Cost At 1 January 2007 100.2 – Additions (Note 18(e)) 36.6 – Exchange movement 2.8 – At 31 December 2007 139.6 – Aggregate impairment At 1 January 2007 0.3 – Impairment for the year 0.6 – At 31 December 2007 0.9 – Net book value At 31 December 2007 138.7 – Net book value At 31 December 2006 99.9 –

During the year, goodwill was tested for impairment in accordance with IAS 36. Following the impairment testing, a £0.6m charge has been recognised through the income statement (2006 – nil) in relation to a UK business which has ceased trading and goodwill capitalised on a European acquisition which no longer employs any of the original staff. 114 Savills plc Our Results Report and Accounts 2007 Notes to the Financial Statements

15. Goodwill continued Group Company £m £m Cost At 1 January 2006 54.6 – Additions 46.0 – Exchange movement (0.4) – At 31 December 2006 100.2 – Aggregate impairment At 1 January 2006 0.3 – Impairment for the year – – At 31 December 2006 0.3 – Net book value At 31 December 2006 99.9 –

Goodwill is allocated to the Group’s cash-generating units (CGU’s) identified according to country of operation and business segment. A segment-level summary of the allocation is presented below: Property & Transactional Facilities Financial Advice Consultancy Management Services Total £m £m £m £m £m United Kingdom 25.1 10.7 4.7 0.4 40.9 Rest of Europe 32.0 1.9 9.8 – 43.7 Asia Pacific 7.6 1.2 23.3 – 32.1 America 22.0 – – – 22.0 86.7 13.8 37.8 0.4 138.7

The recoverable amount of a CGU is determined based on value-in-use calculations. These calculations use cash flow projections based on financial budgets approved by management covering a five-year period. Cash flows beyond the five-year period are extrapolated using the estimated growth rates stated below. The growth rate does not exceed the long-term average growth rate for the business in which the CGU operates. Key assumptions used for value-in-use calculations: Growth rate 0% – 15% Pre-tax discount rate 5% – 12% These assumptions have been used for the analysis of each CGU within the business segment. The weighted average growth rates used are consistent with the Directors’ expectations. The discount rates used are pre-tax and reflect specific risks relating to the relevant segments. 115 Savills plc Our Results Report and Accounts 2007 Notes to the Financial Statements

16. Intangible assets Group Company Customer/ Property business Investment Management Computer relationships Brands contracts contracts software Total Total Acquired intangible assets £m £m £m £m £m £m £m Cost At 1 January 2007 11.0 3.8 0.8 5.5 5.9 27.0 1.1 Acquisitions (Note 18(e)) 4.0 1.0 – 0.2 0.1 5.3 – Other additions – – – – 1.0 1.0 0.4 Disposals (0.1) – – – – (0.1) – Exchange movement 0.6 0.3 – – 0.1 1.0 – At 31 December 2007 15.5 5.1 0.8 5.7 7.1 34.2 1.5 Aggregate amortisation and impairment At 1 January 2007 1.8 0.4 0.2 0.7 4.8 7.9 0.9 Amortisation charge for the year 1.7 0.9 0.1 0.8 0.6 4.1 0.2 Exchange movement 0.1 – – 0.2 0.1 0.4 – At 31 December 2007 3.6 1.3 0.3 1.7 5.5 12.412 3 1.1 Net book value At 31 December 2007 11.9 3.8 0.5 4.0 1.6 21.8 0.4

All intangible amortisation charges in the year are disclosed on the face of the income statement.

Group Company Customer/ Property business Investment Management Computer relationships Brands contracts Contracts Software Total Total Acquired intangible assets £m £m £m £m £m £m £m Cost At 1 January 2006 3.0 – 0.8 1.6 5.1 10.5 0.9 Acquisitions (Note 18(e)) 8.0 3.8 – 4.2 0.1 16.1 – Other additions 0.1 – – – 1.0 1.1 0.2 Disposals (0.1) ––––(0.1) – Exchange movement – – – (0.3) (0.3) (0.6) – At 31 December 2006 11.0 3.8 0.8 5.5 5.9 27.0 1.1 Aggregate amortisation and impairment At 1 January 2006 1.0 – 0.1 0.2 4.5 5.8 0.8 Amortisation charge for the year 0.8 0.4 0.1 0.5 0.6 2.4 0.1 Exchange movement – – – – (0.3) (0.3) – At 31 December 2006 1.8 0.4 0.2 0.7 4.8 7.9 0.9 Net book value At 31 December 2006 9.2 3.4 0.6 4.8 1.1 19.1 0.2 116 Savills plc Our Results Report and Accounts 2007 Notes to the Financial Statements

17. Property, plant and equipment Equipment Equipment Short and motor and motor Freehold leasehold vehicles Vehicles property property Owned Leased Total Group £m £m £m £m £m Cost or valuation At 1 January 2007 0.4 13.1 31.9 0.2 45.6 Additions – 4.0 7.5 0.1 11.6 Subsidiaries acquired (Note 18(e)) – 0.2 0.5 – 0.7 Disposals – (0.8) (1.5) (0.1) (2.4) Exchange movement – – 0.4 – 0.4 At 31 December 2007 0.4 16.5 38.8 0.2 55.9 Accumulated depreciation At 1 January 2007 – 6.6 22.4 0.1 29.1 Charge for the year – 1.5 4.7 – 6.2 Disposals – (0.2) (1.4) – (1.6) Exchange movement – – 0.5 – 0.5 At 31 December 2007 – 7.9 26.2 0.1 34.2 Net book value At 31 December 2007 0.4 8.6 12.6 0.1 21.7

The Directors consider that the fair value of plant, property and equipment approximates to carrying value. Equipment Equipment Short and motor and motor Freehold leasehold vehicles vehicles property property Owned Leased Total Group £m £m £m £m £m Cost or valuation At 1 January 2006 0.4 10.5 31.6 0.2 42.7 Additions – 2.6 4.7 – 7.3 Subsidiaries acquired (Note 18(e)) – 0.2 0.8 – 1.0 Disposals – (0.2) (3.8) – (4.0) Exchange movement ––(1.4) – (1.4) At 31 December 2006 0.4 13.1 31.9 0.2 45.6 Accumulated depreciation At 1 January 2006 – 5.6 22.3 0.1 28.0 Charge for the year – 1.1 4.5 – 5.6 Disposals – (0.1) (3.3) – (3.4) Exchange movement ––(1.1) – (1.1) At 31 December 2006 – 6.6 22.4 0.1 29.1 Net book value At 31 December 2006 0.4 6.5 9.5 0.1 16.5

117 Savills plc Our Results Report and Accounts 2007 Notes to the Financial Statements

17. Property, plant and equipment continued Freehold Short Equipment property leasehold & motor owned property vehicles Total Company £m £m £m £m Cost or valuation At 1 January 2007 0.1 1.6 6.8 8.5 Additions – 0.1 0.4 0.5 Disposals – (0.6) (0.1) (0.7) At 31 December 2007 0.1 1.1 7.1 8.3 Accumulated depreciation At 1 January 2007 – 0.2 6.0 6.2 Charge for the year – 0.2 0.6 0.8 Disposals – (0.2) (0.1) (0.3) At 31 December 2007 – 0.2 6.5 6.7 Net book value At 31 December 2007 0.1 0.9 0.6 1.6

Freehold Short Equipment property leasehold & motor owned property vehicles Total Company £m £m £m £m Cost or valuation At 1 January 2006 0.1 0.6 7.1 7.8 Additions – 1.0 0.4 1.4 Disposals ––(0.7) (0.7) At 31 December 2006 0.1 1.6 6.8 8.5 Accumulated depreciation At 1 January 2006 – 0.1 5.5 5.6 Charge for the year – 0.1 0.7 0.8 Disposals ––(0.2) (0.2) At 31 December 2006 – 0.2 6.0 6.2 Net book value At 31 December 2006 0.1 1.4 0.8 2.3

118 Savills plc Our Results Report and Accounts 2007 Notes to the Financial Statements

18(a). Group – Investments in joint ventures and associated undertakings Joint ventures Associated undertakings Investment Loans Total Investment Goodwill Total £m £m £m £m £m £m Cost or valuation At 1 January 2007 0.7 2.7 3.4 1.6 0.2 1.8 Additions 1.3 – 1.3 0.3 – 0.3 Movement on loans – 1.4 1.4 – – – Exchange movement – 0.1 0.1 – – – Gain on dilution of shareholding – – – 0.3 – 0.3 At 31 December 2007 2.0 4.2 6.2 2.2 0.2 2.4 Share of profit/(loss) At 1 January 2007 (1.0) – (1.0) 1.4 – 1.4 Group’s share of retained (loss)/profit (0.8) – (0.8) 1.2 – 1.2 Dividends received (0.2) – (0.2) (0.3) – (0.3) At 31 December 2007 (2.0) – (2.0) 2.3 – 2.3 Net book value At 31 December 2007 – 4.2 4.2 4.5 0.2 4.7 Net book value At 31 December 2006 (0.3) 2.7 2.4 3.0 0.2 3.2

In relation to the Group’s interests in joint ventures, the assets, liabilities, income and expenses are shown below: 2007 2006 £m £m Current assets 3.4 2.2 Non-current assets 1.6 1.5 Current liabilities (5.2) (4.1) Minority interests’ share 0.2 0.1 Net assets/(liabilities) – (0.3) Revenue 4.3 2.7 Expenses (4.9) (2.8) Share of income tax (0.2) (0.1) Share of post tax loss from joint ventures (0.8) (0.2)

In relation to the Group’s associated undertakings, the assets, liabilities, income and expenses are shown below: 2007 2006 £m £m Current assets 6.8 4.8 Non-current assets 4.1 4.5 Current liabilities (5.2) (4.3) Non-current liabilities (1.2) (2.0) Net assets 4.5 3.0 Revenue 17.4 14.1 Expenses (15.7) (13.2) Share of income tax (0.5) (0.2) Share of post tax profit from associates 1.2 0.7

119 Savills plc Our Results Report and Accounts 2007 Notes to the Financial Statements

18(a). Group – Investments in joint ventures and associated undertakings continued The joint ventures and associates have no significant liabilities to which the Group is exposed to nor has the Group any significant contingent liabilities or capital commitments in relation to its interests in the joint ventures and associates. The market value of the Group’s holding in Adventis plc, an associate company, was £5.5m at 31 December 2007 (2006 – £5.2m).

18(b). Available-for-sale investments Group Group 2007 2006 £m £m At 1 January 8.8 10.5 Additions 21.8 5.5 Subsidiaries acquired (Note 18(e)) 0.1 – Revaluation surplus transferred to equity (Note 29) 0.6 0.4 Disposals (9.6) (7.6) Impairment (1.0) – Exchange movement 0.9 – At 31 December 2007 21.6 8.8 Available-for-sale investments comprise the following: Listed securities Asia Pacific – equity securities 1.3 0.2 Unlisted securities UK – equity securities 1.4 1.4 UK – limited partnership 0.7 1.8 UK – investment funds 2.6 1.0 European – investment funds 15.6 4.4 21.6 8.8

An impairment provision was made during the year for £1.0m in relation to an investment in VoxVue Corporation. The investment was made in February 2007 but subsequently impaired due to poor operating performance. £5.2m was outstanding at 31 December 2007 in relation to the disposal of available-for-sale investments. Available-for-sale investments are denominated in the following currencies: Group Group 2007 2006 £m £m Sterling 4.7 4.2 Euro 15.6 4.4 Other 1.3 0.2 21.6 8.8

At 31 December 2007, the Group held the following available-for-sale investments: Investment Holding Principal activity Savills Investor Syndicate No.1 (entity registered in England and Wales) 4.5% Retail investment property fund Pinnacle Regeneration Group plc (registered in England and Wales) 12.1% Social housing Cordea Savills Dawn Syndication (entity registered in England and Wales) 1.0% Investment property fund Cordea Savills Student Hall Fund (entity registered in Jersey) 1.3% Student Accommodation property fund Cordea Savills Italian Opportunities Fund 1 (entity registered in Luxembourg) 0.7% Investment property fund Cordea Savills Italian Opportunities Fund 2 (entity registered in Luxembourg) 0.4% Investment property fund Serviced Land No. 2 (entity registered in England and Wales) 2.0% UK land investment fund Cordea Savills German Retail Fund (entity registered in Luxembourg) 1.5% Retail investment property fund Cordea Savills Nordic Retail Fund (entity registered in Luxembourg) 8.0% Retail investment property fund

The Group does not exert a significant influence over these businesses, and therefore does not equity account for these investments. These shareholdings are treated as trade investments and accounted for at fair value through equity. There is no significant market risk for investment funds as they are dispersed across the UK and Europe. The fair value of unlisted securities is based on underlying asset values and price earnings models. The fair value of investment funds is determined by the Fund Managers annual audited financial statements. As at 31 December 2007 the Group held conditional commitments for investment funds as detailed in Note 30. 120 Savills plc Our Results Report and Accounts 2007 Notes to the Financial Statements

18 (c). Company – Investments in subsidiaries and associated undertakings Shares Loans to in Group Group undertakings undertakings Total £m £m £m Cost At 1 January 2007 17.4 77.6 95.0 Additions – 56.0 56.0 Repayments – (21.6) (21.6) At 31 December 2007 17.4 112.0 129.4

18(d). Investments in subsidiaries, joint ventures and associated undertakings The principal subsidiaries, joint ventures and associated undertakings of the Group which, in the Directors’ opinion principally affect the figures shown in the financial statements, are shown below together with details of their main activities. Except where otherwise noted, they are wholly owned, have share capital wholly comprised of ordinary shares, are registered in England and Wales, operate in the UK and are consolidated into the Group accounts. Holding interests are the same as voting interests. A full list of the Group’s subsidiaries, joint ventures and associated undertakings is available from the registered office of Savills plc. Subsidiary undertakings Holding Main activities Cordea Savills LLP*+^ 60.0% Provision of fund management Savills (Australia) Holdings Pty Limited* (registered in Australia) 94.3% Holding company for the Australian agency, property and facility management businesses Savills Commercial Limited 100.0% Commercial surveyors Savills (China) Limited* (registered in Hong Kong) 100.0% Holding company for the agency and property management businesses in China Savills Granite LLC* (registered in the US) 75.0% Property consultants Savills Guardian (Holdings) Limited* (registered in Hong Kong) 100.0% Holding company for the Asian property and facilities management group Savills Consultores Inmobiliarios SA* (registered in Spain) 100.0% Property consultants Savills Immobilien Beratungs GmbH* (registered in Germany) 100.0% Property consultants Savills (Hong Kong) Limited* (registered in Hong Kong) 100.0% Mixed practice agency, valuation and research Savills (L&P) Limited 100.0% General practice surveyors Savills Property Management Holdings Limited* (registered in Hong Kong) 100.0% Holding company for the Asian property and facilities management group Savills SA* (registered in France) 99.97% Property consultants Savills Italy SRL* (registered in Italy) 64.5% Property consultants Savills Spolka z Organiczona* (registered in Poland) 83.6% Property consultants Prime Purchase Limited* 100.0% Property buying company Savills (Singapore) Pte Limited* (registered in Singapore) 100.0% Property management and agency Cordea Savills Investment Management Limited* 60.0% Asset manager (regulated by FSA) Savills Private Finance Limited* 100.0% Provision of general insurance, mortgage broking and personal financial planning services (regulated by FSA) Savills Nederland BV* (registered in the Netherlands) 61.0% Property consultants Savills Sweden AB* (registered in Sweden) 51.0% Property consultants Savills Japan KK* (registered in Japan) 100.0% Property management and agency Savills Valuation and Professional Services Limited* (registered in Hong Kong) 100.0% Valuation and research

121 Savills plc Our Results Report and Accounts 2007 Notes to the Financial Statements

18(d). Investments in subsidiaries, joint ventures and associated undertakings continued Subsidiary undertakings Holding Main activities Korea Asset Advisors Co Limited* (registered in Korea) 55.0% Property management BHP Korea Limited* (registered in Korea) 55.0% Property consultants Savills Hamilton Osborne King Group* (the trading style of Hamilton Osborne King 100.0% Property consultants Limited, registered in Ireland) Joint ventures Savills Vietnam Limited* (registered in Vietnam) 32.2% Property management and agency Infinergy Limited* 50.0% Provision of renewable energy Associated undertakings Adventis Group plc* 34.0% Provision of marketing and media services

*Shares/interests held indirectly by the Company +Limited Liability Partnership ^From April 2009, the Cordea Savills LLP management members are able to sell their partnership interests and require Savills to sell theirs on the same terms. Alternatively, Savills may acquire the management interests on the same terms plus £1.

18(e). Acquisitions of subsidiaries Provisional fair value to Group Christopher Savills Granite Hepher Dixon Rowland LLC Limited Limited Other Total Subsidiaries acquired £m £m £m £m £m Property, plant and equipment – 0.5 0.1 0.1 0.7 Available-for-sale investments – 0.1 – – 0.1 Current assets: Trade and other receivables 0.3 2.2 – 1.3 3.8 Work in progress – 0.3 – – 0.3 Cash and cash equivalents – – – 0.8 0.8 Total assets 0.3 3.1 0.1 2.2 5.7 Current liabilities: Trade and other payables – (1.1) – (1.1) (2.2) Bank overdraft (0.3) (0.5) – – (0.8) Deferred tax liabilities – (0.1) – – (0.1) Current income tax liabilities – (0.6) – – (0.6) Net assets – 0.8 0.1 1.1 2.0 Minority share of net assets – – – (0.4) (0.4) Fair value of net assets acquired – 0.8 0.1 0.7 1.6 Goodwill (Note 15) 22.0 4.3 3.9 6.4 36.6 Other intangibles (Note 16) 5.0 – – 0.3 5.3 Purchase consideration and costs 27.0 5.1 4.0 7.4 43.5 Analysis of purchase consideration and costs: Purchase consideration 26.0 5.1 4.0 7.2 42.3 Acquisition costs 1.0 – – 0.2 1.2 27.0 5.1 4.0 7.4 43.5

Consideration and costs satisfied by: Cash 21.2 2.8 2.1 6.2 32.3 Deferred consideration owing at balance sheet date 5.8 2.3 1.9 0.6 10.6 Issue of loan notes – – – 0.6 0.6 27.0 5.1 4.0 7.4 43.5

122 Savills plc Our Results Report and Accounts 2007 Notes to the Financial Statements

18(e). Acquisitions of subsidiaries continued For all acquisitions, there was no difference between the fair value and carrying value of net assets acquired. Acquisitions have been accounted for using the purchase method. The Group acquires businesses intended for use on a continuing basis. Goodwill is attributable to anticipated future operating synergies from the combination with existing businesses and perceived future economic benefits that will be generated from the staff/client relationships acquired. There were no significant changes to the provisional goodwill that arose in the previous year on acquisitions. On 7 January 2007, the Group acquired the share capital of Hepher Dixon Limited for consideration of £5.1m. Goodwill on acquisition of £4.3m has been capitalised. Cash consideration of £2.8m was paid on 7 January 2007 with £2.3m deferred cash consideration due over the next five years. On 3 May 2007, the Group acquired the share capital of Christopher Rowland Limited for consideration of £4.0m. Goodwill on acquisition of £3.9m has been capitalised. Cash consideration of £2.1m was paid on 3 May 2007 with £1.9m deferred cash consideration due over the next five years. On 31 July 2007, the Group acquired Granite Partners LLC for an initial consideration of US$54.0m, of which 75% was payable upon completion. The remainder is subject to a five year earn-out, such that the total consideration is capped at US$84.6m, dependent on the achievement of certain EBITDA targets over a two year future period. As at the balance sheet date, this remaining 25% has been accounted for as deferred consideration at a discounted amount of £5.8m. Goodwill of £22.0m and intangible assets of £5.0m have been capitalised. During the year, a number of other small businesses were acquired for a cash consideration of £6.2m and deferred consideration of £0.6m payable over three years. Loan notes of £0.6m were also issued. Included in Group operating profit relating to acquisitions is revenue of £18.3m (2006 – £42.0m), staff costs of £9.3m (2006 – £18.0m), depreciation of £0.2m (2006 – £0.2m), amortisation of £0.5m (2006 – £nil) and other operating charges of £6.1m (2006 – £18.0m). If the date for all acquisitions made during the year had been at the beginning of the year, amounts relating to these acquisitions would have been revenue of £21.9m (2006 – £68.2m), staff costs of £11.6m (2006 – £32.0m), depreciation of £0.2m (2006 – £0.5m), amortisation of £1.2m (2006 – £nil) and other operating charges of £7.5m (2006 – £26.3m).

19. Deferred income tax Deferred income tax assets and liabilities are only offset where there are legally enforceable rights to offset current tax assets against current tax liabilities and when the deferred income tax relates to the same fiscal authority. The deferred tax assets and liabilities are offset when realised through current tax. The deferred income tax assets and liabilities during the year, without taking into consideration the offsetting balances within the same jurisdiction, are as follows: Group Company Year to Year to Year to Year to 31 December 31 December 31 December 31 December 2007 2006 2007 2006 £m £m £m £m Deferred tax assets – Deferred tax asset to be recovered after more than 12 months 9.4 11.9 0.8 0.7 – Deferred tax asset to be recovered within 12 months 3.5 8.7 0.6 0.5 12.9 20.6 1.4 1.2 Deferred tax liabilities – Deferred tax liability to be recovered after more than 12 months (1.6) (1.0) – – – Deferred tax liability to be recovered within 12 months (0.6) (0.4) – – (2.2) (1.4) – –

Deferred tax asset – net 10.7 19.2 1.4 1.2

123 Savills plc Our Results Report and Accounts 2007 Notes to the Financial Statements

19. Deferred income tax continued The movement on the deferred tax account is shown below: Group Company Year to Year to Year to Year to 31 December 31 December 31 December 31 December 2007 2006 2007 2006 £m £m £m £m At 1 January – asset 19.2 21.6 1.2 2.8 Amount credited to income statement (Note 12) 0.4 (2.2) 0.7 (0.7) Tax charged to equity (Note 29) – Pension asset (1.7) (0.8) (0.1) – – Employee benefits (6.4) (0.9) (0.3) (0.9) – Revaluations of available-for-sale investments (0.1) 1.3 – – – Exchange rate movements and foreign exchange reserves (0.2) (0.1) – – – Impact of change in UK tax rate on deferred tax (0.4) – (0.1) – Acquired with subsidiaries (Note 18(e)) (0.1) 0.3 – – As at 31 December – asset 10.7 19.2 1.4 1.2

Deferred income tax assets have been recognised in respect of all tax losses and other temporary differences to the extent that the realisation of the related tax benefit through the future taxable profits is probable. As at the balance sheet date, the Group has unused tax losses of £8.6m (2006 – £9.9m) available for offset against future profits. Deferred tax of £1.8m (2006 – £2.1m) has not been recognised on such losses due to the unpredictability of future income streams. Included within unrecognised losses are losses of £0.2m that expire within three years and the remaining £8.4m being available for offset indefinitely. Accelerated capital Other incl. Retirement Employee allowances provisions Tax losses benefits benefits Total Deferred tax assets – Group £m £m £m £m £m £m At 1 January 2006 0.6 3.6 0.2 9.7 9.8 23.9 Amount (charged)/credited to income statement (Note 12) (0.1) (1.9) – (1.7) 1.9 (1.8) Tax charged to equity (Note 29) –––(0.8) (0.9) (1.7) Exchange rate fluctuations – (0.1) ––– (0.1) Acquired with subsidiaries (Note 18(e)) – 0.1 0.1 0.1 – 0.3 At 1 January 2007 0.5 1.7 0.3 7.3 10.8 20.6 Amount credited/(charged) to income statement (Note 12) 0.2 1.6 0.7 (1.7) – 0.8 Tax charged to equity (Note 29) –––(2.0) (6.5) (8.5) As at 31 December 2007 0.7 3.3 1.0 3.6 4.3 12.9

124 Savills plc Our Results Report and Accounts 2007 Notes to the Financial Statements

19. Deferred income tax continued Accelerated Foreign capital Other incl. exchange allowances provisions Tax losses Revaluations reserves Total Deferred tax liabilities – Group £m £m £m £m £m £m At 1 January 2006 (0.3) (0.3) – (1.7) – (2.3) Amount credited/(charged) to income statement (Note 12) 0.1 (0.2) (0.2) (0.1) – (0.4) Tax charged to equity (Note 29) – – – 1.3 – 1.3 At 1 January 2007 (0.2) (0.5) (0.2) (0.5) – (1.4) Amount (charged)/credited to income statement (Note 12) (0.1) (0.4) 0.1 – – (0.4) Tax charged to equity (Note 29) – – – (0.1) (0.2) (0.3) Acquired with subsidiaries (Note 18(e)) (0.1) – – – – (0.1) As at 31 December 2007 (0.4) (0.9) (0.1) (0.6) (0.2) (2.2) Net deferred tax asset At 31 December 2007 10.7 At 31 December 2006 19.2

Accelerated capital Other incl. Retirement Employee allowances provisions benefits benefits Total Deferred tax assets – Company £m £m £m £m £m At 1 January 2006 0.3 0.5 0.5 1.5 2.8 Amount charged to income statement – (0.5) (0.2) – (0.7) Tax charged to equity (Note 29) –––(0.9) (0.9) At 1 January 2007 0.3 – 0.3 0.6 1.2 Amount credited to income statement 0.1 0.6 – – 0.7 Tax charged to equity (Note 29) – – (0.1) (0.4) (0.5) As at 31 December 2007 0.4 0.6 0.2 0.2 1.4 Net deferred tax asset At 31 December 2007 1.4 At 31 December 2006 1.2

125 Savills plc Our Results Report and Accounts 2007 Notes to the Financial Statements

20. Trade and other receivables Group Company Year to Year to Year to Year to 31 December 31 December 31 December 31 December 2007 2006 2007 2006 £m £m £m £m Trade receivables 146.5 129.4 – – Less: provision for impairment of receivables (8.1) (4.7) – – Trade receivables – net 138.4 124.7 – – Amounts owed by subsidiary undertakings – – 8.3 14.0 Other receivables 19.4 13.2 0.2 0.1 Income tax – – 1.7 2.5 Prepayments and accrued income 37.3 26.0 0.9 1.3 196.1 163.9 11.1 17.9

The carrying value of trade and other receivables approximate fair value. There is no concentration of credit risk with respect to trade and other receivables as the Group has a large number of clients internationally dispersed with no individual client having a significant amount owing. Other receivables include £5.2m sale proceeds outstanding at 31 December 2007 on disposal of available-for-sale investments. Amounts owed by subsidiary undertakings are generally charged interest at 1.5% above the base rate. Inter company trade receivables are cleared within the month. As at 31 December 2007, trade receivables of £8.1m (2006 – £4.7m) were impaired. The amount of the provision was £8.1m as at 31 December 2007 (2006 – £4.7m). The individually impaired receivables mainly relate to receivables from clients that have been affected by the uncertain economic conditions where funding and completion have been delayed and cashflow has become uncertain. The aging of these receivables is as follows: Group 2007 2006 £m £m Up to 3 months 1.2 0.3 3 to 6 months 2.6 2.3 Over 6 months 4.3 2.1 8.1 4.7

As at 31 December 2007, trade receivables of £31.9m (2006 – £25.7m) were past due but not impaired. These relate to trade receivables which are past due at the reporting date but are not considered impaired as there has not been a significant change in credit quality and the amounts are still considered recoverable. The aging of these receivables is as follows: Group 2007 2006 £m £m Up to 3 months 23.2 20.1 3 to 6 months 5.7 3.7 Over 6 months 3.0 1.9 31.9 25.7

126 Savills plc Our Results Report and Accounts 2007 Notes to the Financial Statements

20. Trade and other receivables continued The carrying amounts of the Group’s trade and other receivables are denominated in the following currencies: Group 2007 2006 £m £m Sterling 113.2 106.8 Euro 30.7 18.6 Hong Kong dollar 25.5 17.3 Australian dollar 11.8 8.3 Other 14.9 12.9 196.1 163.9

Movement on the provision for impairment of trade receivables is as follows: Group 2007 2006 £m £m At 1 January (4.7) (3.6) Provisions for receivables impairment (4.2) (1.7) Receivables written off during the year as uncollectible 0.8 0.6 At 31 December (8.1) (4.7)

The creation and release of the provision for impaired receivables have been included in revenue in the income statement. The other classes within trade and other receivables do not contain impaired assets. The Group does not hold any collateral as security.

21. Cash and cash equivalents Group Company Year to Year to Year to Year to 31 December 31 December 31 December 31 December 2007 2006 2007 2006 £m £m £m £m Cash at bank and in hand 63.6 101.9 6.6 48.9 Short-term bank deposits 47.1 22.2 20.2 10.0 110.7 124.1 26.8 58.9

The effective interest rate on short-term bank deposits was 4.7% (2006 – 4.5%); these deposits have an average maturity of 14 days (2006 – 18 days). Cash subject to restrictions in Asia Pacific amounts to £13.1m (2006 – £9.8m) which is cash pledged to banks in relation to property management contracts and cash remittance restrictions in certain countries. 127 Savills plc Our Results Report and Accounts 2007 Notes to the Financial Statements

21. Cash and cash equivalents continued Cash, cash equivalents and bank overdrafts include the following for the purposes of the cash flow statement: Group Company Year to Year to Year to Year to 31 December 31 December 31 December 31 December 2007 2006 2007 2006 £m £m £m £m Cash and cash equivalents 110.7 124.1 26.8 58.9 Bank overdrafts (Note 24) (0.3) (0.4) (12.3) (4.1) 110.4 123.7 14.5 54.8 Cash and cash equivalents are denominated in the following currencies: Sterling 51.8 81.2 26.8 58.4 Euro 14.2 15.0 – 0.5 Hong Kong dollar 25.3 19.0 – – Singapore dollar 1.7 0.4 – – Thailand baht 0.1 0.1 – – Australian dollar 5.0 2.1 – – Chinese renminbi 5.6 3.2 – – Japanese yen 0.7 0.1 – – South Korean wan 2.9 2.7 – – Polish zloty 1.0 – – – Swedish krona 0.3 0.3 – – US dollar 2.2 – – – 110.7 124.1 26.8 58.9

22(a). Trade and other payables – current Group Company Year to Year to Year to Year to 31 December 31 December 31 December 31 December 2007 2006 2007 2006 £m £m £m £m Deferred consideration 6.1 5.2 – – Trade payables 35.6 24.9 1.4 0.3 Amounts owed to subsidiary undertakings – – 13.5 37.6 Other taxation and social security 30.0 29.2 1.2 9.9 Other payables 1.7 3.5 – 0.4 Bonus accrual 122.9 105.1 2.9 3.1 Accruals and deferred income 38.0 23.9 1.8 1.2 234.3 191.8 20.8 52.5

22(b). Tax liabilities – current Group Company Year to Year to Year to Year to 31 December 31 December 31 December 31 December 2007 2006 2007 2006 £m £m £m £m Current income tax liabilities 11.6 10.3 – –

128 Savills plc Our Results Report and Accounts 2007 Notes to the Financial Statements

23. Trade and other payables – non-current Group Company Year to Year to Year to Year to 31 December 31 December 31 December 31 December 2007 2006 2007 2006 £m £m £m £m Deferred consideration 12.0 2.0 – – Amounts owed to subsidiary undertakings – – 4.5 – 12.0 2.0 4.5 –

24. Borrowings Group Company 2007 2006 2007 2006 £m £m £m £m Current Unsecured bank loans and overdrafts due within one year or on demand 4.6 1.4 16.3 4.1 Loan notes 6.1 5.9 – – 10.7 7.3 16.3 4.1 Non-current Unsecured bank loans 15.1 – 15.1 – Loan notes 7.4 12.0 – – 22.5 12.0 15.1 –

In May 2005, £0.9m the Variable Interest Rate Guaranteed Loan Notes 2005 were issued by a subsidiary undertaking as part consideration for the acquisition of the business and assets of Mansfield Elstob Main Limited. As at 31 December 2007, £0.3m were still in issue. These are repayable over two years and interest is payable half yearly. £0.1m is due within one year. In September 2005, £0.8m of the Variable Interest Rate Guaranteed Loan Notes 2005 were issued by a subsidiary undertaking as part consideration for the acquisition of the business and assets of Brown Harknett International Limited. As at 31 December 2007, £0.4m were still in issue. These are repayable over two years and interest is payable half yearly. £0.2m is due within one year. In October 2005, £0.3m of the Variable Interest Rate Guaranteed Loan Notes 2005 were issued by a subsidiary undertaking as part consideration for the acquisition of the business and assets of SY Moorhouse Wright Limited. As at 31 December 2007, £0.2m were still in issue. These are repayable over two years and interest is payable half yearly. £0.1m is due within one year. In May 2006, £4.3m of the Variable Interest Rate Guaranteed Loan Notes 2006 were issued by a subsidiary undertaking as part consideration for the acquisition of the business and assets of Blair Kirkman LLP. As at 31 December 2007, £3.1m were still in issue. These are repayable over three years and interest is payable half yearly. £1.2m is due within one year. In June 2006, £11.5m of the Variable Interest Rate Guaranteed Loan Notes 2006 were issued by a subsidiary undertaking as part consideration for the acquisition of the business and assets of Hamilton Osbourne King Limited. As at 31 December 2007, £8.5m were still in issue. These are repayable over two years and interest is payable half yearly. £4.2m is due within one year. In September 2006, £0.4m of the Variable Interest Rate Guaranteed Loan Notes 2006 were issued by a subsidiary undertaking as part consideration for the acquisition of the business and assets of PCA Management Consultants Limited. As at 31 December 2007, £0.4m were still in issue. These are repayable over four years and interest is payable half yearly. No amount is due within one year. 129 Savills plc Our Results Report and Accounts 2007 Notes to the Financial Statements

24. Borrowings continued In July 2007, £0.6m of the Variable Rate Interest Guaranteed Loan Notes 2007 were issued by a subsidiary undertaking as part consideration for the acquisition of 65% of the business and assets of Theodor Schone Immobilien. As at 31 December 2007, £0.6m were still in issue. These are repayable over two years and interest is payable on redemption. £0.3m is due within one year. Bank loans are denominated in a number of currencies and bear interest on LIBOR or foreign equivalents as appropriate to the country in which the borrowing is incurred. The exposure of the Group’s borrowings to interest rate changes and the contractual repricing dates at the balance sheet date are: Group Company 2007 2006 2007 2006 £m £m £m £m Less than 1 year 23.0 18.7 21.9 4.1 Between 1 and 2 years 0.1 0.1 – – Between 2 and 5 years 10.1 0.5 9.5 – 33.2 19.3 31.4 4.1

Group Company 2007 2006 2007 2006 The maturity of non-current borrowings is as follows: £m £m £m £m Between 1 and 2 years 10.4 11.5 4.0 – Between 2 and 5 years 12.1 0.5 11.1 – 22.5 12.0 15.1 –

The effective interest rates at the balance sheet dates were as follows: Group 2007 2006 £m £m Bank overdraft 4.14% 5.57% Bank loans 5.72% 6.74% Loan notes 6.25% 5.68%

The carrying amounts of borrowings approximate to fair value. The carrying amounts of the Group’s borrowings are denominated in the following currencies: Group Company 2007 2006 2007 2006 £m £m £m £m Sterling 4.5 6.4 12.3 4.1 US dollar 19.1 – 19.1 – Euro 9.0 11.5 – – Australian dollar 0.3 0.8 – – Hong Kong dollar – 0.3 – – Thailand baht 0.1 0.1 – – Japanese yen 0.2 0.2 – – 33.2 19.3 31.4 4.1

The Group has the following undrawn borrowing facilities: Floating rate – expiring within one year or on demand 16.8 8.9 10.0 5.0

130 Savills plc Our Results Report and Accounts 2007 Notes to the Financial Statements

25. Derivative financial instruments Group Company Assets Liabilities Assets Liabilities At 31 December 2007 £m £m £m £m Financial assets at fair value through profit or loss 1.5 – – – Interest rate swaps – fair value hedges – 0.2 – 0.2 Forward foreign exchange contracts – at fair value 0.5 – 0.5 – Total 2.0 0.2 0.5 0.2 Less non-current portion (1.7) (0.2) (0.2) (0.2) Current portion 0.3 – 0.3 – At 31 December 2006 1.5 0.5 – 0.5

Interest rate swaps The notional principal amounts of the outstanding interest rate swap contracts at 31 December 2007 were £9.5m (2006 – £nil). At 31 December 2007, the fixed interest rate was 5.22%. The main floating rate is USD LIBOR. Forward foreign exchange contracts The notional principal amounts of the outstanding forward foreign exchange contracts at 31 December 2007 were £17.3m (2006 – £11.5m). The non-current portion represents contracts that mature in over one year. Gains and losses on forward foreign exchange contracts are recognised in the income statement in the period during which the transaction affects the income statement. Financial assets at fair value through profit or loss The Group owns a call option to acquire an initial shareholding of 25% in a Russian residential transaction business, Intermark. The option is carried at cost of £1.5m (2006 – £1.5m) as there is no active market from which to obtain a fair value. Financial obligations – Savills has granted the minority shareholders in the Netherlands subsidiary a put option over the outstanding shares not already owned by Savills. This option is exercisable after 12 September 2008 at a market related price. This option has no fair value, reflecting the low probability of the put being exercised. – On the acquisition of Korean Asset Advisors and BHP Korean Limited, Savills agreed a put and call option with the vendor. The put and call option is exercisable between 19 December 2008 and 19 December 2010 at a market related price. This reflects a forward contract with the rights and obligations currently equal therefore no fair value has been recognised.

26(a). Provisions Group Company £m £m At 1 January 2007 3.1 1.2 Provided during the year 1.7 0.4 Utilised during the year (0.8) – Exchange movements – – 31 December 2007 4.0 1.6

Provisions have been analysed between current and non-current as follows: Group Company £m £m Current 2.2 1.6 Non-current 1.8 – 4.0 1.6

Provisions are held for property dilapidation provisions and for excess amounts on certain claims against the Group. 131 Savills plc Our Results Report and Accounts 2007 Notes to the Financial Statements

26(b). Employee benefit obligations In addition to the defined benefit obligation pension scheme disclosed in Note 10, the following are included in employee benefit obligations: Total Group £m At 1 January 2007 6.5 Provided during the year 1.3 Utilised during the year (1.7) Acquisitions 0.1 Exchange movements 0.4 31 December 2007 6.6

The above provisions relate to holiday and long service leave in companies in Hong Kong, Australia, Korea and Thailand and are expected to crystallise within five to seven years of the balance sheet date. The Company had no employee benefit obligations at 31 December 2007 and 31 December 2006. The above employee benefit obligations have been analysed between current and non-current as follows: Group 2007 2006 £m £m Current 2.7 3.0 Non-current 3.9 3.5 6.6 6.5

27. Share capital – Group and Company 31 December 31 December 31 December 31 December 2007 2006 2007 2006 Authorised and allotted Number of shares Number of shares £m £m Ordinary shares of 2.5p each: Authorised 202,000,000 202,000,000 5.1 5.1 Allotted, called up and fully paid 131,840,933 135,085,892 3.3 3.4

Movement in allotted, called up and fully paid share capital 2007 2006 Number of shares £m Number of shares £m At 1 January 135,085,892 3.4 132,999,104 3.3 Allotted to employees under The Savills Executive Share Option Scheme 189,000 – 570,000 – Allotted direct participants on exercise of options under the Savills Sharesave Scheme 66,041 – 1,516,788 0.1 Repurchased for cancellation (3,500,000) (0.1) –– At 31 December 131,840,933 3.3 135,085,892 3.4

At the Annual General Meeting held on 9 May 2007, the shareholders gave the Company authority, subject to stated conditions, to purchase for cancellation up to 13,162,999 of its own ordinary shares (AGM held on 10 May 2006 – 13,319,438). Such authority remains valid until the conclusion of the next Annual General Meeting or 9 August 2008 whichever is the earlier. 132 Savills plc Our Results Report and Accounts 2007 Notes to the Financial Statements

28. Share-based payment Details of the terms of the following schemes are contained in the Remuneration Report on pages 78 to 79.

28(a). The following share options, without exercise price, have been granted under the Savills plc 1992 Executive Share Option Scheme (the ESOP) and were outstanding at 31 December 2007: 31 December 31 December 2007 2006 Number of Number of shares shares Date of grant Exercise period ’000 ’000 20 July 2000 2 years from 20 July 2005 – 200 6 April 2001 2 years from 6 April 2006 210 650 210 850

A reconciliation of option movements over the year to 31 December 2007 is shown below: 2007 2006 Weighted Weighted average average Number of share price Number of share price shares at date shares at date ’000 of exercise ’000 of exercise Outstanding at 1 January 850 – 2,106 – Exercised (640) 531.0p (1,256) 598.5p Outstanding at 31 December 210 – 850 – Exercisable at 31 December 210 – 850 –

The weighted average exercise price for options granted under this scheme is £nil (2006 – £nil).

28(b). The following share options have been granted under the Savills Executive Share Option Scheme (2001) and were outstanding at 31 December 2007: 31 December 31 December 2007 2006 Number of Number of Exercise shares shares Date of grant Exercise period price ’000 ’000 30 March 2004 7 years from 30 March 2007 Unapproved 217.8p 46 235 14 March 2005 7 years from 14 March 2008 Approved 321.3p 47 47 14 March 2005 7 years from 14 March 2008 Unapproved 321.3p 117 117 13 March 2006 7 years from 13 March 2009 Unapproved 596.0p 100 100 310 499

A reconciliation of option movements over the year to 31 December 2007 is shown below: 2007 2006 Weighted Weighted Number of average Number of average shares exercise shares exercise ’000 price ’000 price Outstanding at 1 January 499 327.8p 969 148.2p Granted ––100 596.0p Exercised (189) 217.8p (570) 69.5p Outstanding at 31 December 310 394.5p 499 327.8p Exercisable at 31 December 46 217.8p – –

The weighted average share price on the date of exercise during the year was 599.3p (2006 – 626.0p) and total consideration of £0.4m (2006 – £0.4m) was received. 133 Savills plc Our Results Report and Accounts 2007 Notes to the Financial Statements

28. Share-based payment continued 28(c). During the year 66,041 shares (2006 – 1,516,788 shares) were allotted direct to participants and nil shares (2006 – nil shares) were transferred from the Qualifying Employee Share Trust on the exercise of options under the Savills Sharesave Scheme. The following table shows the options remaining outstanding as at 31 December 2007, 564,648 shares (2006 – 107,816 shares) having lapsed and 66,041 (2006 – 1,516,788 shares) having been exercised in accordance with the rules of the scheme for consideration of £42,404 (2006 – £838,609). 31 December 31 December 2007 2006 Number of Number of shares shares Date of grant Exercise price Exercise period ’000 ’000 11 August 2000 82.5p 01.10.03 – 01.04.08 – 13 20 May 2003 55.5p 01.07.06 – 01.01.07 – 64 5 May 2006 510.5p 01.07.09 – 01.01.10 353 897 31 October 2007 318.0p 01.12.10 – 01.06.11 1,650 – 2,003 974

A reconciliation of option movements over the year to 31 December 2007 is shown below: 2007 2006 Weighted Weighted Number of average Number of average shares exercise shares exercise ’000 price ’000 price Outstanding at 1 January 974 475.2p 1,646 55.9p Granted 1,660 318.0p 953 510.5p Forfeited/expired (565) 510.5p (108) 293.9p Exercised (66) 64.2p (1,517) 55.3p Outstanding at 31 December 2,003 352.0p 974 475.2p Exercisable at 31 December – – 64 55.5p

The weighted average share price on the date of exercise during the year was 589.6p (2006 – 568.6p).

28(d). During the year no shares (2006 – nil) were either allotted to Savills QUEST Trustees Limited, the trustee of the Qualifying Employee Share Trust, or transferred (2006 – nil) to participants on the exercise of options under the Savills Sharesave Scheme. At 31 December 2007 the Trust held 2,154 shares (2006 – 2,154 shares) of Savills plc.

28(e). The following awards of deferred shares, without exercise price, have been granted under the Savills Deferred Share Bonus Plan (the DSBP) and were outstanding at 31 December 2007: 31 December 31 December 2007 2006 Number of Number of shares shares Date of award Deferred period Vesting date ’000 ’000 22 March 2002 5 years 22 March 2007 – 1,393 14 March 2003 5 years 14 March 2008 1,094 1,112 15 March 2004 5 years 15 March 2009 955 971 14 March 2005 5 years 14 March 2010 1,103 1,139 13 March 2006 3 years 13 March 2009 688 708 13 March 2006 5 years 13 March 2011 34 34 19 March 2007 3 years 19 March 2010 847 – 19 March 2007 5 years 19 March 2012 671 – 5,392 5,357

134 Savills plc Our Results Report and Accounts 2007 Notes to the Financial Statements

28. Share-based payment continued As at 31 December 2007, 330 (2006 – 238) individuals held outstanding awards under the DSBP. Awards made under the DSBP from 2006 onwards are subject to rolled-up dividends whereby the number of shares awarded will be increased on the vesting date to reflect dividends paid to shareholders throughout the deferred period. A reconciliation of award movements over the year to 31 December 2007 is shown below: 2007 2006 Weighted Weighted average average Number of share price Number of share price shares at date shares at date ’000 of exercise ’000 of exercise Outstanding at 1 January 5,357 – 4,704 – Granted 1,565 – 764 – Forfeited/expired (137) – (92) – Exercised (1,393) 669.8p (19) 654.3p Outstanding at 31 December 5,392 – 5,357 –

The weighted average exercise price for awards granted under this scheme is £nil (2006 – £nil). No awards were exercisable under this scheme as at 31 December 2007 and 31 December 2006.

28(f). The following awards of deferred shares, without exercise price, have been granted under the Savills Deferred Share Plan (the DSP) and remained outstanding at 31 December 2007: 31 December 31 December 2007 2006 Number of Number of shares shares Date of grant Deferred period Vesting date ’000 ’000 10 October 2006 3 years 10 October 2009 84 84 10 October 2006 5 years 10 October 2011 554 581 19 March 2007 3 years 19 March 2010 406 – 19 March 2007 5 years 19 March 2012 37 – 17 September 2007 3 years 17 September 2010 189 – 17 September 2007 5 years 17 September 2012 12 – 1,282 665

As at 31 December 2007, 102 individuals (2006 – 52) held outstanding awards under the DSP. Awards made under the DSP are subject to rolled-up dividends whereby the number of shares awarded will be increased on the vesting date to reflect dividends paid to shareholders through the deferred period. A reconciliation of award movements over the year to 31 December 2007 is shown below: 2007 2006 Weighted Weighted average average Number of share price Number of share price shares at date shares at date ’000 of exercise ’000 of exercise Outstanding at 1 January 665 – – – Granted 652 – 686 – Forfeited/expired (35) – (21) – Outstanding at 31 December 1,282 – 665 –

The weighted average exercise price for awards granted under this scheme is £nil (2006 – £nil). No awards were exercisable under this scheme as at 31 December 2007 and 31 December 2006. 135 Savills plc Our Results Report and Accounts 2007 Notes to the Financial Statements

28. Share-based payment continued Fair value of options Options and awards for the DSBP, Sharesave Scheme and ESOS were valued at fair value using the Actuarial Binominal model of Lane Clark & Peacock actuaries. The key assumptions used in the calculation are as follows: Risk free rate 3.6% pa – 5.0% pa depending on grant date and expected life Volatility 28% pa – 37% pa depending on grant date Employee turnover 2.5% pa for DSBP and Sharesave and zero for ESOS Early exercise 50% of employees exercise early when options and awards are 20% in the money Performance criteria All vest after three years (only relevant for ESOS) The expected volatility is based on historical volatility over the last five years. The risk free rate is the yield on a zero coupon UK government bonds at each grant date, with term based on the expected life of the option or award. Fair value of options and awards at grant dates are: Fair value Grant Grant date pence DSBP 2003 14 March 2003 46.0 DSBP 2004 15 March 2004 186.5 DSBP 2005 15 March 2005 278.2 DSBP 2006 13 March 2006 596.0 DSBP 2007 19 March 2007 656.0 Sharesave 2003 20 May 2003 24.0 Sharesave 2006 5 May 2006 232.0 Sharesave 2007 31 October 2007 96.0 DSP 2006 10 October 2006 560.5 DSP 2007 19 March 2007 656.0 DSP 2007 17 September 2007 408.8 ESOS 2004 30 March 2004 73.5 ESOS 2005 30 March 2005 102.8 ESOS 2006 13 March 2006 189.0

The total charge for the year relating to employee share based payments plans was £8.1m (2006 – £5.3m), all of which related to equity-settled share-based payment transactions. After deferred tax, the charge was £7.9m (2006 – £3.8m).

29. Statement of changes in equity Attributable to equity holders of the Group Share-based Currency Capital Total Share Share payments translation Revaluation redemption Treasury Retained shareholders’ Minority Total capital premium reserve reserve reserve reserve shares earnings equity interest equity £m £m £m £m £m £m £m £m £m £m £m Balance at 1 January 2007 3.4 82.4 8.5 (3.1) 1.1 0.2 (15.7) 131.7 208.5 4.3 212.8 Total recognised income and expense for the period – – – 5.4 0.5 – – 56.5 62.4 2.6 65.0 Employee share option scheme: – Value of services provided – – 7.5 – – – – 0.6 8.1 – 8.1 – Exercise of options – 0.2 (0.2) – – – – – – – – Issue of share capital – 0.4 – – – – – – 0.4 – 0.4 Purchase of own shares (0.1) – – – – 0.1 – (21.8) (21.8) – (21.8) Purchase of treasury shares – – – – – – (18.9) – (18.9) – (18.9) Dividends – – – – – – – (20.7) (20.7) (1.4) (22.1) Disposals (net of tax) –––(0.1) (0.2) – – – (0.3) – (0.3) Acquisitions – – – – – – – – – 0.4 0.4 Balance at 31 December 2007 3.3 83.0 15.8 2.2 1.4 0.3 (34.6) 146.3 217.7 5.9 223.6

Included within retained earnings is tax on items taken directly to equity as shown in Note 12. 136 Savills plc Our Results Report and Accounts 2007 Notes to the Financial Statements

29. Statement of changes in equity continued Attributable to equity holders of the Group Share-based Currency Capital Total Share Share payments translation Revaluation redemption Treasury Retained shareholders’ Minority Total capital premium reserve reserve reserve reserve shares earnings equity interest equity £m £m £m £m £m £m £m £m £m £m £m Balance at 1 January 2006 3.3 80.9 3.7 1.4 4.9 0.2 (10.8) 84.1 167.7 0.6 168.3 Total recognised income and expense for the period –––(4.5) 0.3 – – 63.8 59.6 1.6 61.2 Employee share option scheme: – Value of services provided – – 5.3 – – – – – 5.3 – 5.3 – Exercise of options – 0.4 (0.5) – – – 0.1 – – – – Issue of share capital 0.1 1.1 – – – – – – 1.2 – 1.2 Purchase of treasury shares ––––– –(5.0) – (5.0) – (5.0) Dividends ––––– ––(16.2) (16.2) (0.2) (16.4) Disposals (net of tax) ––––(4.1) –––(4.1) – (4.1) Acquisitions – – – – – – – – – 2.3 2.3 Balance at 31 December 2006 3.4 82.4 8.5 (3.1) 1.1 0.2 (15.7) 131.7 208.5 4.3 212.8

Attributable to equity holders of the Company Share-based Capital Total Share Share payments redemption Other Retained shareholders’ capital premium reserve reserve reserves earnings equity £m £m £m £m £m £m £m Balance at 1 January 2007 3.4 82.4 0.6 0.2 3.0 26.8 116.4 Total recognised income and expense for the period – – – – – 37.6 37.6 Employee share option scheme: – Value of services provided – – 0.2 – – – 0.2 – Exercise of options – 0.2 – – – (0.1) 0.1 Issue of share capital – 0.4 – – – – 0.4 Purchase of own shares (0.1) – – 0.1 – (21.8) (21.8) Dividends – – – – – (20.7) (20.7) Balance at 31 December 2007 3.3 83.0 0.8 0.3 3.0 21.8 112.2 Balance at 1 January 2006 3.3 80.9 0.4 0.2 3.0 0.4 88.2 Total recognised income and expense for the period – – – – – 42.9 42.9 Employee share option scheme: – Value of services provided – – 0.3 – – – 0.3 – Exercise of options – 0.4 (0.1) – – (0.3) – Issue of share capital 0.1 1.1 – – – – 1.2 Dividends – ––––(16.2) (16.2) Balance at 31 December 2006 3.4 82.4 0.6 0.2 3.0 26.8 116.4

Included within retained earnings is tax on items taken directly to equity as shown in Note 12. 137 Savills plc Our Results Report and Accounts 2007 Notes to the Financial Statements

30. Capital commitments Group Company 2007 2006 2007 2006 £m m £m £m Contracts placed for future capital expenditure not provided in the financial statements 6.2 4.7 – –

At 31 December 2007 the Group held a conditional commitment to co-invest £4.0m in the Cordea Savills UK Ventures Fund in June 2008 and £2.2m in the Cordea Savills Italian Opportunities Fund No.2 during 2008.

31. Contingent liabilities The Company guarantees certain financial obligations of its subsidiaries. It is not anticipated that any material liabilities will arise from these contingent liabilities.

32. Operating lease commitments – minimum lease payments Property leases Other leases Total 2007 2006 2007 2006 2007 2006 Group £m £m £m £m £m £m Commitments under non-cancellable operating leases expiring: Within one year 13.9 13.4 1.4 1.4 15.3 14.8 In one to five years 46.7 48.3 1.9 1.7 48.6 50.0 After five years 28.1 26.7 0.1 0.7 28.2 27.4 88.7 88.4 3.4 3.8 92.1 92.2

Property leases Other leases Total 2007 2006 2007 2006 2007 2006 Company £m £m £m £m £m £m Commitments under non-cancellable operating leases expiring: Within one year 0.5 1.0 – – 0.5 1.0 In one to five years 2.0 3.7 – – 2.0 3.7 After five years 0.2 0.9 – – 0.2 0.9 2.7 5.6 – – 2.7 5.6

Significant operating leases relate to the various property leases for Savills offices in the United Kingdom, Europe and Asia. There are no significant non-cancellable subleases. 138 Savills plc Our Results Report and Accounts 2007 Notes to the Financial Statements

33. Cash generated from continuing operations Group Company Year ended Year ended Year ended Year ended 2007 2006 2007 2006 £m £m £m £m Profit for the year from continuing operations 57.9 58.8 37.4 43.3 Adjustments for: Income tax (Note 12) 28.0 25.6 0.1 (0.1) Depreciation (Note 17) 6.2 5.6 0.8 0.8 Amortisation of intangibles (Note 16) 4.1 2.4 0.2 0.1 Impairment of goodwill and available-for-sale investments (Note 15 and 18(b)) 1.6 – 1.0 – Net finance income (Note 11) (2.1) (3.7) (1.2) (0.6) Share of post tax profit from associates and joint ventures (Note 18(a)) (0.4) (0.5) – – Profit on disposal of subsidiary associate, joint ventures and available-for-sale investments (0.7) (5.1) – – Loss on sale of property, plant and equipment 0.7 0.4 0.4 – Profit on disposal of available-for-sale investments included within other income (0.7) – – – Increase in provisions 0.4 0.5 0.4 1.2 Increase/(decrease) in employee and retirement obligations 0.2 (2.2) – (1.2) Charge for share based compensation 8.1 5.3 0.3 0.3 Operating cash flows before movements in working capital 103.3 87.1 39.4 43.8 Decrease in work in progress 0.4 0.4 – – (Increase)/decrease in debtors (20.4) (37.2) 4.7 (8.6) Increase/(decrease) in creditors 41.0 37.1 (27.3) 12.2 Cash generated from operations 124.3 87.4 16.8 47.4

34. Related party transactions The Group is controlled by Savills plc, a company registered in England and Wales. Marketing services were provided by Adventis plc, an associate company, to Savills (L&P) Limited at an arm’s length value of £8.9m (2006 – £8.0m). The Company provided corporate function services to its subsidiaries at an arms length value of £13.3m (2006 – £10.3m). Dividends received from subsidiaries were £44.5m (2006 – £48.2m). Amounts outstanding as at 31 December 2007 are disclosed in Notes 20 and 22. Loans to related parties Loans to associates and joint ventures are disclosed in Note 18(a). All loans to associates and joint ventures are interest free.

35. Major non-cash transactions Loan notes to the value of £0.6m (2006 – £16.6m) were issued during the year for part consideration of acquisitions as disclosed in Note 18(e).

139 Savills plc Our Results Report and Accounts 2007 Savills’ UK and International Offices Savills’ UK and International Offices

Key64B Brechin R, Ru Edinburgh C, F, R, Ru C Commercial 12 Clerk Street, Brechin, Angus DD9 6AE Wemyss House, 8 Wemyss Place, E Estate Office Tel: 01356 628600 Fax: 01356 628601 Edinburgh EH3 6DH F Financial Services Offices Tel: 0131 247 3700/3800 Fax: 0131 247 3724/3838

Brighton76B F R Residential

Third Floor, 132 Queens Road, Brighton BN1 3WB Esher90B R

Ru65B Rural Tel: 01273 200000 Fax: 01273 200001 55 High Street, Esher, Surrey KT10 9SH Tel: 01372 461900 Fax: 01372 461901

UK0B OFFICES (including the CI hannel slands) Bristol7B C, F, R

Embassy House, Queen’s Avenue, Bristol BS8 1SB Exeter91B C, R, Ru

Amersham1B R Tel: 0117 910 2200 Fax: 0117 910 2211 The Forum, Barnfield Road, Exeter EX1 1QR 55 Hill Avenue, Amersham, Buckinghamshire HP6 5BX Tel: 01392 455700 Fax: 01392 455701

Bury78B St Edmunds R Tel: 01494 725636 Fax: 01494 433605

Kings Road Mews, Bury St Edmunds IP33 3DE Farnham92B R

Ayr6B R, Ru Tel: 01284 731100 Fax: 01284 731199 39 Downing Street, Farnham, Surrey GU9 7PH Hannah Business Park, Ayr KA6 5HL Tel: 01252 729000 Fax: 01252 729001

Cambridge79B C, F, R, Ru Tel: 01292 442999 Fax: 01292 441337

Unex House, 132–134 Hills Road, Glasgow93B C, F, R

Banbury67B R, Ru Cambridge CB2 8PA 163 West George Street, Glasgow G2 2JJ 36 South Bar, Banbury, Oxfordshire OX16 9AE Tel: 01223 347000 Fax: 01223 347111 Tel: 0141 2487342 Fax: 0141 2487343 Tel: 01295 228000 Fax: 01295 228001

Canford80B Cliffs R Guernsey94B F

Barnet68B R 34 Haven Road, Canford Cliffs, Poole, The Financial Suite, The Maze, Berthelot Street, 143 High Street, Barnet, Herts EN5 5UZ Dorset BH13 7LP St Peter Port, Guernsey GY1 1JT Tel: 0208 4474400 Fax: 0208 4474499 Tel: 01202 708888 Fax: 01202 492501 Tel: 01481 715234 Fax: 01481 715235

Bath69B R Cardiff81B C, F, R Guildford95B R Edgar House, 17 George Street, Bath, 12 Windsor Place, Cardiff CF10 3BY First House, Park Street, Guildford GU1 4XB Somerset BA1 2EN Tel: 02920 368900 Fax: 02920 368999 Tel: 01483 796800 Fax: 01483 796801 Tel: 01225 474550 Fax: 01225 474540

Chelmsford82B C, F, R, Ru Guildford96B F

Beaconsfield70B R 136 New London Road, Chelmsford, Essex CM2 0RG Norfolk House, 187 High Street, Guildford GU1 3AW 10–12 The Broadway, Wycombe End, Tel: 01245 269311 Fax: 01245 293201 Tel: 01483 796850 Fax: 1483 796856 Beaconsfield Old Town,

Cheltenham83B R, Ru Harpenden97B R Buckinghamshire HP9 1ND The Quadrangle, Imperial Square, 2 Station Road, Harpenden, Hertfordshire AL5 4SD Tel: 01494 731950 Fax: 01494 731951 Cheltenham GL50 1PZ Tel: 01582 465000 Fax: 01582 465030

Belfast71B C Tel: 01242 548000 Fax: 01242 548099

Haywards98B Heath R, Ru Savills Hamilton Osborne King, First Floor,

Chesham84B R 37–39 Perrymount Road, Haywards Heath RH16 3BN Lesley Studios, 32–36 May Street, Belfast BT1 4NZ 3 Market Square, Chesham, Tel: 01444 446000 Fax: 01444 446044 Tel: 028 90267820 Fax: 028 90267829 Buckinghamshire HP5 1HG

Henley9B R Birmingham C, F, R Tel: 01494 775650 Fax: 01494 791533 58–60 Bell Street, Henley-on-Thames RG9 2BN Innovation Court, 121 Edmund Street,

Chester85B R Tel: 01491 843000 Fax: 01491 843008 Birmingham B3 2HJ 22 Lower Bridge Street, Chester CH1 1RS

Tel: 0121 6333733 Fax: 0121 6333666 Horsham10B R Tel: 01244 323232 Fax: 01244 323131 19/20 City Business Centre, 6 Brighton Road,

Bishop’s72B Stortford R, Ru

Cirencester86B R Horsham, West Sussex RH13 5BB Chequers, 19 North Street, Bishop’s Stortford, 1 Castle Street, Market Place, Cirencester, Tel: 01403 214800 Fax: 01403 214801 Hertfordshire CM23 2LD Gloucestershire GL7 1QD

Tel: 01279 756800 Fax: 01279 756811 Huntingdon10B C Tel: 01285 627550 Fax: 01285 627551 Osprey House, 1 Percy Road, Huntingdon,

Bodmin73B Ru

Clifton87B R Cambridgeshire PE29 6SZ Dreason, Lanhydrock, Bodmin, Cornwall PL30 4BG 20 The Mall, Clifton, Bristol BS8 4DR Tel: 01480 846200 Fax: 01480 846222 Tel: 01208 264400 Fax: 01208 264499 Tel: 0117 933 5800 Fax: 0117 933 5801

Ipswich102B C, R, Ru

Bournemouth74B R

Cranbrook8B R 30 Princes Street, Ipswich, Suffolk IP1 1RJ 122 Old Christchurch Road, Bournemouth, 53–55 High Street, Cranbrook, Kent TN17 3EE Tel: 01473 234800 Fax: 01473 230886 Dorset BH1 1LU Tel: 01580 720161 Fax: 01580 720157 Tel: 01202 255552 Fax: 01202 255551

89B

75B 140 Savills plc Our Results Report and Accounts 2007 Savills’ UK and International Offices

Jersey103B R Hampstead R Micheldever13B R 19 Halkett Place, St Helier, Jersey, JE2 4WG 7 Perrin’s Court, Hampstead, London NW3 1QS The Coach House, Roundwood, Micheldever, Tel: 01534 722227 Fax: 01534 870019 Tel: 020 7472 5000 Fax: 020 7472 5001 Winchester, Hampshire SO21 3BA Tel: 01962 774940 Fax: 01962 774941

Jersey104B F Islington17B R

22–24 Seale Street, St Helier, Jersey, JE2 3QG 94 Upper Street, London N1 0NP Milton132B Keynes R Tel: 01534 709400 Fax: 01534 709401 Tel: 020 7226 1313 Fax: 020 7354 6703 23 Furzton Lake, Shirwell Crescent, Furzton, Milton Keynes MK4 1GA

Leeds105B C, F, R Kensington18B R Tel: 01908 508200 Fax: 01908 520358 City Point, 29 King Street, Leeds, LS1 2HL 145 Kensington Church Street, London W8 7LP

Tel: 0113 244 0100 Fax: 0113 244 0104 Tel: 020 7535 3300 Fax: 020 7221 5256 Newbury13B R 1 and 3 Broadway, Berkshire RG14 1AS

Lincoln106B C, R, Ru Knightsbridge19B R Tel: 01635 277700 Fax: 01635 277777 Olympic House, Doddington Road, Lincoln LN6 3SE 188 Brompton Road, London SW3 1HQ

Tel: 01522 508900 Fax: 01522 508901 Tel: 020 7581 5234 Fax: 020 7581 8364 Newcastle134B F Rotterdam House, 116 Quayside, Newcastle NE1 3DY

Liverpool107B C, F, R Prime120B Purchase R Tel: 0191 2064607 Fax: 0191 2064162 7 Water Street, Liverpool, L2 0RD 56 Sloane Square, London SW1W 8AX

Tel: 0151 2291854 Fax: 0151 2291855 Tel: 020 7881 2388 Fax: 020 7881 2399 Northwood135B R 1 Rowland Place, Green Lane, Northwood,

Locksbottom108B R Putney12B R Middlesex HA6 1AA 425 Crofton Road, Locksbottom, Orpington, 198 Upper Richmond Road, London SW15 2SH Tel: 01923 824225 Fax: 01923 827705 Kent BR6 8NL Tel: 020 8780 9900 Fax: 020 8780 0649

Tel: 01689 860999 Fax: 01689 860123 Norwich136B C, R, Ru

Richmond12B R 8–10 Upper King Street, Norwich, Norfolk NR3 1HB 40–42 Hill Rise, Richmond, Surrey TW10 6UA Tel: 01603 229229 Fax: 01603 229200

London2B Tel: 020 8614 9100 Fax: 020 8614 9101

Nottingham137B C, F, R

Sloane123B Street R Barnes3B R 9 Fletcher Gate, Nottingham NG1 1QQ 139 Sloane Street, London SW1X 9AY 52 Barnes High Street, London SW13 9LN Tel: 0115 934 8000 Fax: 0115 934 8001/002 Tel: 020 7730 0822 Fax: 020 7730 0644 Tel: 020 8939 6900 Fax: 020 8939 6901

Oundle138B R

Stoke124B Newington R

Berkeley109B Tower F The Old Town Hall, Market Place, Oundle PE8 4BQ 51 Stoke Newington Church Street, London N16 0AR 50 Westferry Circus, Canary Wharf, London E14 8RR Tel: 01832 272707 Fax: 01832 272744 Tel: 020 7923 8650 Fax: 020 7923 8651 Tel: 020 7715 4150 Fax: 020 7715 4199

Oxford139B C, F, R, Ru

Wandsworth125B R

Canary10B Wharf R Wytham Court, 11 West Way, Oxford OX2 0QL 12 Huguenot Place, London SW18 2EW 4 Westferry Circus, Canary Wharf, London E14 4HD Tel: 01865 269000 Fax: 01865 269001 Tel: 020 8877 1222 Fax: 020 8877 0765 Tel: 020 7531 2500 Fax: 020 7531 2599

Summertown140B R

West126B End C

Clapham1B R 2 Mayfield House, 256 Banbury Road, Summertown, 20 Grosvenor Hill, Berkeley Square, 57 Nightingale Lane, London SW12 8ST Oxford OX2 7DE London W1K 3HQ Tel: 020 8673 4111 Fax: 020 8673 9278 Tel: 01865 339700 Fax: 01865 339701 Tel: 020 7499 8644 Fax: 020 7495 3773

Chiswick12B R Perth14B R, Ru

West127B End C, F, R, Ru 263 Chiswick High Road, London W4 4PU 55 York Place, Perth PH2 8EH Lansdowne House, 57 Berkeley Square, Tel: 020 8987 5550 Fax: 020 8987 5551 Tel: 01738 445588 Fax: 01738 445599 London W1J 6ER

City13B C, F Tel: 020 3107 1040 Fax: 020 7016 3749 Peterborough142B C 25 Finsbury Circus, London EC2M 7EE Trinity Court, Trinity Street, Peterborough PE1 1DA

Wimbledon128B R Tel: 020 7499 8644 Fax: 020 7588 7323 Tel: 01733 344414 Fax: 01733 343874 1 High Street, Wimbledon, London SW19 5DX

Docklands14B R Tel: 020 8971 8111 Fax: 020 8971 8112 Peterborough143B R Execution Dock, 80 Wapping High Street, Saxon House, Cross Street, Peterborough PE1 1XA

Loughton129B R London E1W 2NE Tel: 01733 344464 Fax: 01733 311932 The Triangle, 1A Smarts Lane, Loughton, Tel: 020 7456 6800 Fax: 020 7456 6822

Essex IG10 4BU Prime14B Purchase (Blandford Forum) R

Fulham15B R Tel: 020 84986600 Fax: 020 84986666 Unit 1, Barnes Croft, Coles Lane, Milborne, St Andrew, 191 New Kings Road, London SW6 4SW Dorset DT11 OLG

Manchester130B C, F, R Tel: 020 7731 9400 Fax: 020 7731 9401 Tel: 01258 839216 Fax: 01258 839240 Fountain Court, 68 Fountain Street,

16B Manchester M2 2FE Tel: 0161 236 8644 Fax: 0161 228 0544 141 Savills plc Our Results Report and Accounts 2007 Savills’ UK and International Offices

Prime145B Purchase (Bury St Edmunds) R Stratford upon Avon R Davis Bowring E, R (Associate) The Manor House, Great Barton, Bury St Edmunds, 5 Union Street, Stratford upon Avon, 6–8 Main Street, Kirby Lonsdale, Carnforth, Suffolk IP31 2QR Warwickshire CV37 6QT Lancashire LA6 2AE Tel: 01284 788306 Fax: 01284 788306 Tel: 01789 413400 Fax: 01789 413444 Tel: 015242 71711 Fax: 015242 72212

Prime146B Purchase (Charlbury) R Sunningdale159B R Ray173B Gasson & Associates E (Associate) Unit 7, The Stable Block, Cornbury Park, Charlbury, Mount Lodge, London Road, Sunningdale, Redlands Farm, Hook Norton, Banbury, Oxfordshire OX7 3EH Berkshire SL5 0EP Oxfordshire OX15 5ND Tel: 01608 810662 Fax: 01608 810633 Tel: 01344 626162 Fax: 01344 295395 Tel: 01608 737888 Fax: 01608 737778

Prime147B Purchase (Roundwood) R Telford160B R, Ru

The Barn, Roundwood, Micheldever, Winchester, Hall Court, Telford, Shropshire TF3 4NF INTERNATIONAL4B OFFICES Hampshire SO21 3BA Tel: 01952 239500 Fax: 01952 239501

Tel: 01962 795035 Fax: 01962 774703 AUSTRALIA5B

Truro16B R

Reigate148B R 73 Lemon Street, Truro, Cornwall TR1 2PN

Adelaide6B C Hartland House, 45 Church Street, Reigate, Tel: 01872 243200 Fax: 01872 243299 Savills, Level 2, 50 Hindmarsh Square, Surrey RH2 OAD

Tunbridge162B Wells R Adelaide SA 5000 Tel: 01737 230200 Fax: 01737 230222 53 High Street, Tunbridge Wells TN1 1XU Tel: +61 8 8237 5000 Fax: +61 8 8237 5099

Rickmansworth149B R Tel: 01892 507000 Fax: 01892 507007

Brisbane174B C 11 Church Street, Rickmansworth,

Westerham163B F Savills, Level 15, 120 Edward Street, Hertfordshire WD3 1DA The Old Granary, Squerryes, Goodley Stock Road, Brisbane QLD 4000 Tel: 01923 725500 Fax: 01923 725555 Westerham, Kent TN16 1SL Tel: +61 7 3221 8355 Fax: +61 7 3221 0870

Salisbury150B R, Ru Tel: 01959 547700 Fax: 01959 565080

Cairns175B C Rolfes House, 60 Milford Street, Salisbury,

Weybridge164B R Savills, The Conservatory, 12–14 Lake Street, Wiltshire SP1 2BP 107 Queens Road, Weybridge, Surrey KT13 9UJ Cairns QLD 4870 Tel: 01722 426800 Fax: 01722 412489 Tel: 01932 838000 Fax: 01932 838001 Tel: +61 7 4044 1111 Fax: +61 7 4044 1122

Sevenoaks15B F, R, Ru

Wilmslow165B R Canberra176B C 74 High Street, Sevenoaks, Kent TN13 1JR 6 Water Lane, Wilmslow, Cheshire SK9 5AA Savills, Level 1, Manuka Court, 11 Bougainville Street, Tel: 01732 789700 Fax: 01732 789789 Tel: 01625 417450 Fax: 01625 417451 Manuka ACT 2603

Solihull152B R Tel: +61 2 6260 6970 Fax: +61 2 6260 6483

Wimborne16B C, F, R, Ru 163 High Street, Solihull B91 3ST

Wessex House, Wimborne, Dorset BH21 1PB Gold17B Coast C Tel: 01217 134000 Fax: 01217 134001 Tel: 01202 856800 Fax: 01202 856801 Savills, Level 1, 32 Davenport Street,

Southampton153B C, R Southport QLD 4215

Winchester167B R, Ru Brunswick House, Brunswick Place, Tel: +61 7 5509 1700 Fax: +61 7 5509 1799 Jewry Chambers, 44 Jewry Street, Winchester, Southampton SO15 2AP

Hampshire SO23 8RW Liverpool178B C Tel: 02380 713900 Fax: 02380 713901 Tel: (01962) 841842 Fax: 01962 840081 Savills, Suite 5, 54 Bathurst Street,

Southampton154B F, R Liverpool NSW 2170

Windsor168B R 38 London Road, Southampton SO15 2AG Tel: +61 2 9601 3100 Fax: +61 2 9601 3122 The Gallery, 3 High Street, Windsor, Tel: 02380 713990 Fax: 02380 713091

Berkshire SL4 1LD Melbourne179B C

Southill15B E Tel: 01753 834600 Fax: (01753) 834601 Savills, Level 25, 140 William Street, Southill Park, Biggleswade, Bedfordshire SG18 9LJ Melbourne VIC 3000

Windsor169B R Tel: 01462 813209 Fax: 01462 812235 Tel: +61 3 8686 8000 Fax: +61 3 8686 8088 4A High Street, Windsor, Berkshire SL4 1LD

St156B Albans R Tel: 01753 834610 Fax: 01753 834620 Parramatta180B C Lemsford House, 14 Parkway, Porters Wood, Savills, Suite 503, Level 5, 20 Smith Street,

Windsor170B F St Albans, Hertfordshire AL3 6PA Parramatta NSW 2150 Second Floor, 11 High Street, Windsor, Tel: 01727 810192 Fax: 01727 810193 Tel: +61 2 9761 1333 Fax: +61 2 9761 1331 Berkshire SL4 1LD

Stamford157B R Tel: 01753 754120 Fax: 01753 754121 Perth18B C 2 St Mary’s Street, Stamford, Lincolnshire PE9 2DE Savills, Level 1, Wesfarmers House,

York17B C, R, Ru Tel: 01780 750200 Fax: 01780 750222 40 The Esplanade, Perth WA 6000 13–15 Micklegate, York, Yorkshire YO1 6JH Tel: +61 8 9488 4111 Fax: +61 8 9488 4112

158B Tel: 01904 617800 Fax: 01904 617801

172B 142 Savills plc Our Results Report and Accounts 2007 Savills’ UK and International Offices

Sunshine182B Coast C Shenzhen189B C, R HONG196B KONG SAR Savills, Level 4, 26 Duporth Avenue, Savills, Unit A, 5/F., Anlian Plaza, No. 4018 Jintian

Maroochydore QLD 4558 Road, Futian District, Shenzhen 518026 Hong21B Kong Island C, R Tel: +61 7 5443 5088 Fax: +61 7 5313 7537 Tel: +86 755 8828 5707 Fax: +86 755 8828 5676 Savills, 23/F, Two Exchange Square, Central, Hong Kong

Sydney183B C Tianjin190B C, R Tel: +852 2842 4400 Fax: +852 2868 4386 Savills, Level 7, AMP Centre, 50 Bridge Street, Savills, Unit 2601-02, Office Tower, Centre Plaza,

Sydney NSW 2000 188 Jiefang Road, Heping District, Tianjin 300042 Hong197B Kong Island C Tel: +61 2 8215 8888 Fax: +61 2 8215 8899 Tel: +86 22 5829 3388 Fax: +86 22 5829 3355 Savills, 805–13, 8/F Cityplaza One, 1111 King’s Road, Taikoo Shing, Hong Kong Tel: +852 2534 1688 Fax: +852 2851 1249 AUSTRIA7B FRANCE13B

Hong198B Kong Island C, R

Vienna8B C (Associate) Paris14B C Savills, 7/F Cityplaza One, 1111 King’s Road, CPB, Immobilientreuhand Gmbh, Vienna Twin Tower, Savills, 14 Rue Auber, 75009, Paris Taikoo Shing, Hong Kong A-1100 Vienna, Wienerbergsta Be 11 Tel: +33 1 44 51 7300 Fax: +33 1 44 51 7301 Tel: +852 2512 1838 Fax: +852 2887 3698 Tel: +43 1512 7690 Fax: +43 1512 7690-20

Hong19B Kong Island C

GERMANY15B Savills, 7/F Tung Sun Commercial Centre,

BELGIUM9B 194–200 Lockhart Road, Wanchai, Hong Kong

Berlin16B C Tel: +852 2598 6028 Fax: +852 2598 4009

Brussels10B C Savills, Leipziger Platz 1, 10117 Berlin

Kowloon20B C Savills, Avenue Louise 81, 1050 Brussels Tel: +49 30 726 165 165 Fax: +49 30 726 165 166 Savills, Suite 2114, 21/F, Tower 6, The Gateway, Tel: +322 542 4050 Fax: +322 542 4051

Berlin19B C No. 9 Canton Road, Tsimshatsui, Kowloon Savills, Savignyplatz 9/10, 10623, Berlin Tel: +852 2378 8688 Fax: +852 2376 3809

CHINA1B T: +49 30 315 130 F: +49 30 315 315

Kowloon201B R

Frankfurt192B C Savills, Unit 1313, 13/F, Tower 2, Grand Century Place,

Beijing12B C, R Savills, Taunusanlage 19, 60325 Frankfurt am Main 193 Prince Edward Road West, Kowloon Savills, 2101, East Tower, Twin Towers, Tel: +49 69 273 0000 Fax: +49 69 252 538 Tel: +852 2622 9222 Fax: +852 3007 8576 B-12 Jianguomenwai Avenue, Chaoyang District,

Beijing 100022 Hamburg193B C New20B Territories R Tel: +86 10 5925 2288 Fax: +86 10 5925 2299 Savills, Fuhlentwiete 10/ Axel-Springer-Platz Savills, Room 605, 6/F, Block A, 20355 Hamburg DB Plaza, Discovery Bay, Lantau Island

Chengdu184B C, R Tel: +49 403 099 77 – 0 Fax: +49 403 099 77 – 100 Tel: +852 2987 1919 Fax: +852 2987 1993 Savills, Room 1806, Block A, Times Plaza,

No. 2 Zongfu Road, Chengdu 610016 Hamburg194B C

Tel: +86 28 8672 1810 Fax: +86 28 8672 1250 Savills, Wendenstrasse 29, 20097 Hamburg IRELAND2B Tel: +49 402 361 040 Fax: +49 402 328 17

Dalian185B C, R

Blackrock23B R

Savills, 1703, Xiwang Tower, 136 Zhongshan Road, Munich195B C Savills Hamilton Osborne King, 4 Main Street, Blackrock Zhongshan District, Dalian 116001 Savills, Rosental 4, 80331, Munich Tel: +353 1 288 5011 Fax: +353 1 288 0838 Tel: +86 411 3966 8988 Fax: +86 411 3966 8955 Tel: +49 89 427 2920 Fax: +49 89 427 292 111

Clontarf203B R

Guangzhou186B C, R Savills Hamilton Osborne King, 192 Clontarf Road,

Savills, Room 906, R & F Centre, No. 10 Hua Xia Road, HUNGARY17B Dublin 3 Zhu Jiang New Town, Guangzhou 510623 Tel: +353 1 853 0630 Fax: +353 1 853 0633

Tel: +86 20 3892 7168 Fax: +86 20 3892 7030 Budapest18B C

Savills, Seventh Floor East West Business Center Cork204B C, R

Hangzhou187B C, R Rákóczi út 1–3. Budapest 1088 Savills Hamilton Osborne King, 12 South Mall, Cork Savills, Zhejiang Representative Office Tel: +36 1 235 7720 Fax: +36 1 235 7723 Tel: +353 021 427 1371 Fax: +353 021 427 2348 701 Jiahua International Business Center,

15 Hangda Road, Hangzhou 310007 Dublin205B C

Tel: +86 571 5676 0088 Fax: +86 571 5683 2023 GREECE19B Savills Hamilton Osborne King, 32 Molesworth Street, Dublin 2

Shanghai18B C, R

Athens20B C, R (Associate) Tel: +353 1 618 1300 Fax: +353 1 676 7066 Savills, 20th Floor, 20/F Shanghai Central Plaza, Savills Hellas Ltd, Apollon Tower, 381 Huaihai Middle Road, Luwan District, 64 Louisis Riankour Street, 115 23, Athens Shanghai 200020 Tel: +30 210 699 6311 Fax: +30 210 699 6312 Tel: +86 21 6391 6688 Fax: +86 21 6391 6699 143 Savills plc Our Results Report and Accounts 2007 Savills’ UK and International Offices

Dublin206B R Tokyo R PORTUGAL Savills Hamilton Osborne King, 20 Dawson Street, Savills, 2-11-10 Jiyugaoka Meguro-ku,

Dublin 2 Tokyo 152-0035 Lisbon42B C, R (Associate) Tel: +353 1 663 4300 Fax: +353 1 663 4399 Tel: +81 5129 6850 Fax: +81 3 5729 0223 Abacus Property Ltd, Atrium Saldanha, Praça Duque de Saldanha, 1–8 C, 1050–094, Lisbon

Dun207B Laoghaire R Tel: +351 21 317 0577 Fax: +351 21 353 0554

Savills Hamilton Osborne King, KOREA30B 44 Upper Georges Street, Dun Laoghaire, Dublin

Tel: +353 1 205 4996 Fax: +353 1 230 3553 Seoul31B C RUSSIA43B Savills, 11/F Seoul Finance Centre,

Limerick208B C (Associate) 84 Taepyungro-1-ga, Chung-gu, Seoul, Moscow4B R (Associate) O’Connor Murphy Gubbins, 5 Shannon Street, Limerick Korea 100-768 Intermark Residential Real Estate, Kropotkinsky per.7, Tel: +353 61 314 151 Fax: +353 61 414 725 Tel: +82 2 2124 4114 Fax: +82 2 2124 4166/4199 bld.1 (metro. Park Kultury/radial), Moscow

Phibsborough209B R Tel: +7 495 502 9553 Fax: +7 495 502 9554 Savills Hamilton Osborne King,

MACAU32B 64/65 Phibsborough Road, Dublin 7

SINGAPORE45B Tel: +353 1 830 2960 Fax: +353 1 830 2959 Macau3B C

Ranelagh210B R Savills, Suite 1310, 13/F Macau Landmark, Singapore46B C Savills Hamilton Osborne King, 4 Fields Terrace, 555 Avenida da Amizade, Macau Savills, No. 2 Shenton Way, #17–01 SGX Centre 1, Ranelagh, Dublin 6 Tel: +853 2878 0623 Fax: +853 2878 1805 Singapore 068804 Tel: +353 1 496 7017 Fax: +353 1 496 7502 Tel: +65 6536 5022 Fax: +65 6538 5540

MALAYSIA34B Singapore215B R

INDONESIA24B Savills, 350 Orchard Road, #12–01/03 Shaw House,

Kuala35B Lumpur C (Associate) Singapore 238868

Jakarta25B C, R (Associate) Savills Rahim & Co, Level 17, Menara Uni Asia Tel: +65 6836 6688 Fax: +65 6836 2668 PT. Procon Indah, 19/F Indonesia Stock Exchange 1008 Jalan Sultan Ismail, 50250, Kuala Lumpur Building, Tower 2, JI Jenderal Sudirman Kav 52-53, Tel: +60 3 2691 9922 Fax: +60 3 2691 0096

SOUTH47B AFRICA Jakarta 12190 Indonesia Tel: +62 21 515 3777 Fax: +62 21 515 3232

NETHERLANDS36B Capetown48B R (Associate) Pam Golding Properties (Pty) Ltd, Concorde House,

ITALY26B Amsterdam37B C Main Road, Kenilworth 7745 Savills, Claude Debussylaan 48, 1082 MD, Amsterdam Tel: +270 21 797 5300 Fax: +270 21 797 5310

Milan27B C, R Tel: +31 20 301 2000 Fax: +31 20 672 1400 Savills, Via Manzoni 41, 20121, Milan

SPAIN49B Tel: +39 02 365 69300 Fax: +39 02 365 69328

NORWAY38B

Rome21B C Barcelona50B C

Savills, Via Barberini 67, 00187, Rome Oslo39B C (Associate) Savills, Rambla de Catalunya, 6–4ª planta, Tel: +39 06 420 196 Fax: +39 06 4201 9628 Heilo Eiendom AS, Tordenskioldsgate 6 N-0160, Oslo 08007 Barcelona Tel: +47 23 00 3960 Fax: +47 23 00 3961 Tel: +34 93 272 4100 Fax: +34 93 272 4101

JAPAN28B Madrid216B C

POLAND40B Savills, Edificio Cuzco IV, Paseo de la Castellana,

Osaka29B C 141–6 Planta, 28046 Madrid

Savills, Osaka Kokusai Building, Azuchimachi, Warsaw41B C Tel: +34 91 310 1016 Fax: +34 91 310 1024 Chuoku, Osaka 541–0052 Savills, Saski Point, ul. Marszalkowska 111, Tel: +81 6 4964 2661 Fax: +81 6 4964 2663 00–102, Warsaw

SWEDEN51B Tel: +48 22 330 0630 Fax: +48 22 330 0631

Tokyo21B C

Savills, Aoba Roppongi Building 3F, 214B Stockholm52B C 3-16-33 Roppongi, Minato-ku, Tokyo 106-0032 Savills, Sergels Torg 12, SE–111 57, Stockholm Tel: +81 3 5562 1700 Fax: +81 3 5562 1705 Tel: +46 8 5458 5890 Fax: +46 8 5458 5891

213B 144 Savills plc Our Results Report and Accounts 2007 Savills’ UK and International Offices

TAIWAN217B

Taipei53B C Savills, 12/F-3 Exchange Square, No.89 Sung-Ren Road, Xin-Yi District, Taipei, Taiwan Tel: +886 2 8789 5828 Fax: +886 2 8789 5929

THAILAND54B

Bangkok5B C Savills, 28/F, Abdulrahim Place, 990 Rama IV Road, Bangkok, 10500, Thailand Tel: +662 636 0300 Fax: +662 636 0339 Bangkok C Savills, 31/F CTI Tower, 191/4 Rachadapisek Road, Klongtoey, Bangkok, 10110, Thailand Tel: +662 259 5353 Fax: +662 259 6355

TURKEY56B

Istanbul57B C (Associate) Kuzey Bati, Buyukdere Caddesi Harman Sokak, Duran Is Merkezi No:4 Kat:1, 34430 Levent, Istanbul Tel: +90 212 325 2800 Fax: +90 212 268 0261

UNITED58B ARAB EMIRATES

Dubai59B C, R (Associate) Asteco Property Services LLC, PO Box 1714, Level 6, Capricorn Tower, Sheikh Zayed Road, Dubai Tel: +97 144 037 700 Fax: +97 144 037 778

UNITED60B STATES OF AMERICA

New61B York C Savills Granite LLC, 600 Madison Avenue, 11th Floor, New York, NY 10022 Tel: +1 1 212 328 2800 Fax: +1 1 212 328 2828

VIETNAM62B

Hanoi63B C Savills, 13th Floor, Pacific Place, 83b Ly Thuong Kiet, Hoan Kiem District, Hanoi, Vietnam Tel: +844 946 1300 Fax: +844 946 1302

Ho218B Chi Minh City C Savills, 3rd Floor, Opera View Building, 161 Dog Khoi Street, District 1, Ho Chi Minh City, Vietnam Tel: +84 8 823 9205 Fax: +84 8 823 4571 TT–COC–2238

Design and production RadleyYeldar Print Granite think4 bright is producedwith100% ECF(Elemental Chlorine Free)pulpthat issourcedfrom carefully managed and renewed commercialforests, certifiedinaccordance with the FSC (Forest Stewardship Council). The range is fully recyclableand manufacturedwithin a mill whichis registeredunder theBritishquality standard of BS ENISO 9001–2000 and theenvironmental standard ofISO 14001. Solicitors Auditors ashurst PricewaterhouseCoopers LLP Broadwalk House 1 Embankment Place 5 Appold Street London WC2N 6RH London EC2A 2HA Stockbrokers Registrars Hoare Govett Limited Equiniti 250 Bishopsgate Aspect House London EC2M4AA SpencerRoad Principal Bankers Lancing BarclaysBank Plc West Sussex 1 Churchill Place BN99 6DA London E14 5HP

Savills plc 20 Grosvenor Hill Berkeley Square London W1K 3HQ Tel: +44 (0)20 7499 8644 Fax: +44 (0)20 7495 3773 www.savills.com

RegisteredinEngland No. 2122174