Savills plc Annual Report and Accounts 2009 - Investor relations

Savills plcReport and Accounts 2009 05Our businessOverseas fund sets Sydney recordas Savills closes two deals in AustraliaSavills completes three sales in oneof London’s most prestigious addressesAustraliaSavills has advised Sydney-basedCharter Hall Group’s (CHG) CorePlus Office Fund (CPOF) on the saleof Atrium, an A-grade commercialoffice building, for AUS$137m(£76m) to the Swiss-based AFIAAFoundation for International RealEstate Investments. The salerepresents one of the largestcommercial property transactionsin Sydney for the last 18 months.UKEaton Square has long beenrecognised as one of London’smost prestigious addresses.In 2009 Savills was responsible forthe sale of three of just 12 privatehouses in the square, including thisfabulous property, meticulouslyrestored by developer Earlcrown,and sold to a Hong Kong Chinesebuyer. The guide price for thishouse was £40m.

06Sustaining our momentumcontinuedSavills plcReport and Accounts 2009...and we work with someof the world’s biggest names.Arab Investmentsacquire Berlin propertyGermanySavills acted as advisors to ArabInvestments Ltd in the acquisition ofthe district centre called ‘ZehlendorferWelle’ (‘Zehlendorf Wave’) atClayallee 330, Berlin from OFBProjektentwicklung GmbH for itsfirst German fund. The purchaseprice was €70m.Savills Mexico completessale of Sony HQSavills is the sole agent on Taiwan’sbiggest investment deal this yearMexicoSavills Mexico, on behalf of aprivate domestic buyer and seller,completed an off-market transactionfor Sony Corporation’s MexicoHeadquarters in the Santa Fesubmarket of Mexico City for anundisclosed price. The transactionwas Mexico’s only large (overUS$10m) transaction for an incomeproducing office building in 2009.TaiwanSavills acted as advisors to CMPGroup, in the sale of AsiaworldBuilding to Fubon Life Assurance Co.Ltd for NT$10bn (US$304m).

Group Chief Executive’s reviewReview of operationsSavills plcReport and Accounts 2009 07Our business2009 operating highlightsp Strong second half performance from Asia Pacific Transactional business.p Strong performance from UK Residential business.p UK Commercial business strengthened in fourth quarter.p Cost savings of £62m achieved in the year.We remain well positioned with astrong balance sheet to continueour strategy of building thebusiness and pursuing selectedinvestment opportunities shouldthey arise.Jeremy HelsbyGroup Chief Executive2009 was a year of two very different halves. In the first six months, we faced very difficultmarkets realising a small underlying profit before tax (PBT) of £2.5m. This was no smallachievement in the context of the most difficult market conditions experienced for decades.By contrast we benefited significantly from the second half market rally, particularly in the UKresidential and Asia Pacific markets, which are two of Savills great areas of strength, to postan underlying PBT of £25.2m for the full year (2008: £33.2m). The 24% decline in annual profitsmasks the relative strength of Savills second half performance, which saw a 62% growth inprofit over the comparable period of 2008.Savills geographic and business diversity helped deliver this resilient performance and it isinteresting to reflect that we derived nearly 38% of our revenue from the exciting markets ofthe Asia Pacific region whilst UK residential agency, despite a very strong performance thisyear, represented 13% of the Group’s revenue. Indeed worldwide, property management,much of it in Asia Pacific, now represents 38% of our revenue.I am delighted with these results which were achieved not just through rallies in certain marketsbut also through the hard work of all our staff, and significantly the effectiveness of the costsaving efforts of our teams around the world. Collectively they realised approximately £62min gross savings during the period. The overall result was also underpinned by the continuedstrong performance of our less cyclical businesses.This is the effect of our strategy in action. In our chosen businesses and locations we constantlyseek to serve our clients better than our competitors. We also benefit from the geographicspread of businesses and the stability of our business model where property management,fund management and consultancy services provide us with more predictable and secureearnings. These allow us to support our more cyclical transaction advisory teams during leantimes in order to secure our operational capacity to perform well as markets recover.This level of performance has not been easy to achieve and it is a testament to the robustnessand flexibility of the Savills business model, the quality and loyalty of our clients and theunstinting professionalism, hard work and focus of our people in serving them.PeopleDuring these difficult market conditions, we have continued to focus on retaining andincentivising our people. We have also selectively built our business by recruiting high qualityindividuals and teams who have been attracted by our entrepreneurial culture and financialstrength. We have successfully recruited across the business to meet our requirements in arange of locations and services, from real estate investment services in New York and Tokyo,to housing consultancy in the UK and property management in China.AwardsI am delighted that the quality of our work and the strength of the Savills brand have beenrecognised with a number of awards. In the 2009 Business Superbrand table Savills wasagain ranked the number one Superbrand in the UK Real Estate Sector. For the fourth yearin a row we were awarded the ‘Graduate Employer of Choice’ by The Times. In Hong KongLeaders Choice Brand awards, 2010, Savills earned the name ‘Excellent Brand of GlobalProperty Agent’. In Continental Europe, our Spanish business received the award of ‘BestReal Estate Consultancy Service Provider’.

Savills plcReport and Accounts 2009 09Our businessStrong positions in both commercial and residential marketsWe believe that it is important to be a significant force in both commercial and residentialproperty in our chosen markets. Experience across the range of services we provide in boththese disciplines adds to the quality and depth of our service to clients and differentiates usfrom many of our competitors. By being strong in both markets, we can best serve the needsof developers, owners, occupiers and investors in the increasing global trend toward mixeduse projects.Geographical diversificationOur objective is to mitigate the risk of exposure to any one economy or market by beingmarket leaders both in our domestic UK markets and also in our selected overseas markets.In 2009 we saw the benefit of this as the UK prime residential market strengthened togetherwith a strong performance in the Asia Pacific region in the second half. Later in the year westarted to see sentiment begin to turn positive in Continental Europe. Approximately 48.6%of Group revenue now comes from outside the UK, led by Asia Pacific which accounted for38% of global revenue.Maintaining financial strengthWe seek to maintain our financial strength in order to withstand volatile market conditionsand to take advantage of opportunities as they arise. In a people business we do not believeit is appropriate to take on material amounts of debt over the long term. Rather we maintainadequate banking facilities to meet short and medium term requirements.Commitment to our clientsThroughout the cycle, we seek to serve our clients in the principal locations in which theyoperate by providing them with the services that they require. This means that we continueto support and build our transaction advisory businesses in Continental Europe and theUS despite the challenging conditions in those markets.In a similar vein, we have continued to support and build our UK transaction teams particularlyresidential despite the reduced volume of business in that market. Although this has a negativeeffect on our short term profitability, it is only by continuing this support that we can maintainthe ability to serve our clients effectively throughout the cycle.Non-financial KPIsGeographical spread % non-UKAssets under management £bn31.935.337.644.748.61.72.13.53.02.52005The measure: Geographical diversity is measured by thesplit of revenues by region.2006 2007 2008 2009 2005Target: To selectively expand outside the UK in our chosengeographic markets.2006 2007 2008 2009The measure: Growth in the increase of assets undermanagement for our fund management business CordeaSavills LLP.Target: To increase the value of investment portfoliosthrough portfolio management and the launch ofnew funds.Breadth of service offering% non-transactional incomeProperty under management million sq ft53.4 52.2 53.363.3 64.8551.6606.1708.4944.3896.22005 2006 2007 2008 2009The measure: Revenue by type of business segment.Target: Selectively expand in non-transactional servicesin key markets.2005 2006 2007 2008 2009The measure: Total sq ft property under management.Target: Over the cycle, to grow the area undermanagement.

10Savills plcReport and Accounts 2009Group Chief Executive’s reviewSegmental reviewsThe Savills Group is principally involved with advising on mattersaffecting commercial, rural, residential and leisure property.It also provides corporate finance advice, fund managementand a range of property related financial services. Operations areconducted internationally through the following business streams.TransactionalAdviceConsultancyServicesp Commercial agencyand investmentp Residential agency,letting and investmentp Developmentp Auctionsp Farm and estate agencyp Retail and leisurep Hotels and healthcarep Institutionalp Purchasing advicep New homesp Officesp Industrialp Valuationp Building consultancyp Housing consultancyp Capital allowances and ratingp Affordable housing andstudent accommodationp Landlord and tenantp Planningp Researchp Environmental consultancyp Strategic projectsContribution to Group revenue %35.2% 21.3%Transactional AdviceRest of GroupConsultancyRest of GroupRevenue £m£197.5m£119.4m166.9247.2304.1208.4 197.571.898.8141.5131.8119.420052006 2007 2008 200920052006200720082009Underlying profit /(loss) before tax £m* Underlying profit is calculated by adjusting reported pre-tax profit byexceptional items, profit on disposals, share-based payment adjustmentand impairment and amortisation of goodwill and intangibles (excludingsoftware).£6.3m46.248.633.32005 2006 20073.26.32008 2009£10.9m16.112.92005 200622.3200716.3200810.92009

Savills plcReport and Accounts 200911Our businessPropertyManagementFinancialServicesFundManagementp Asset managementp Facilities managementp Commercial managementp Land and farm managementp Residential mortgage broking servicesp Commercial debt broking servicesp Insurance servicesp Financial planning servicesp Equity raisingp Debt shorteningp Corporate finance/M&Ap Property investment productsp Discretionary portfolio management38.4% 2.0% 3.1%Property ManagementRest of GroupFinancial ServicesRest of GroupFund ManagementRest of Group£215.2m £11.2m £17.4m104.5137.2159.7191.4215.225.8 26.929.817.411.24.7 7.215.419.517.4200520062007200820092005200620072008200920052006200720082009£12.6m (£2.9m) £2.9m8.3200511.5200610.9200714.2200812.620094.720054.420065.1 7.72007(1.0)2008(2.9)20090.720050.720064.120073.620082.92009

12Savills plcReport and Accounts 2009Group Chief Executive’s reviewSegmental reviewsTransactional AdviceRevenue £m 197.5Underlying profitbefore tax £m 6.3In many markets Savills Transaction Advisory businesses continued to experience thechallenges of recession and lack of credit availability during the year. On the positive side theGroup was well placed to benefit from the progressive return of predominantly cash buyersinto both the UK residential and commercial markets and parts of Asia Pacific. This trend andSavills financial strength allowed the Group to maintain the capacity of our transaction teamsin regions and markets which have not yet seen significant evidence of recovery.UK ResidentialThe prime residential market, where Savills is a market leader, performed strongly from thesecond quarter onwards. The Residential Transaction business increased revenue by 11.1%to £71.3m (2008: £64.2m) primarily as a result of a strong performance from the London andHome Counties markets. We remained market leader in prime central London transactionsvalued at over £5m and our universe of buyers changed little over the period, albeit with moreinterest from the Asia Pacific region. In the broader prime market the availability of mortgagefinance was, and remains, a significant obstacle for buyers to overcome and transactionvolumes reflect this as well as reduced stock availability for much of the year. The latter helpedto push values in the most desirable locations back towards the 2007 peak. It remains to beseen how the market will perform in 2010 with significant personal tax rises and a generalelection in prospect during the spring selling season.Our New Homes Transaction business had a weak start to the year but rallied well in thesecond half to finish with revenues slightly down on 2008 but ahead of our expectations.Our Development Transaction business suffered in comparison to 2008, but it too enjoyeda brighter second half performance.The Residential Transaction business benefited from the substantial cost reduction initiativestaken since the beginning of 2008 to record an increase in underlying profit of over 320% to£11.8m (2008: £2.8m).UK CommercialOur revenue from UK Commercial transactions declined by approximately 31% to £35.7m(2008: £51.9m). Trading conditions were tough throughout the first half of the year but improvedmeasurably through the third and fourth quarters. For the majority of the year investmentdemand, which was primarily equity backed, focused on prime quality assets with long leasesand good covenants.There was significant demand for the scarce supply of such ‘bond’ like products with the resultthat yields compressed sharply during the year. The lack of debt availability and the banks’strategy of rolling over non-performing loans rather than foreclosing resulted in a scarcity ofboth demand for, and supply of, grade B property for much of the year. However, there wasevidence of a relaxing of investor attitude to risk through the fourth quarter. This, togetherwith significant inflows into UK property funds, were perhaps the best signs yet that the UKinvestment market is continuing its pattern of recovery. There is residual caution, however,over levels of stock availability in the UK together with uncertainty over the impact of thegeneral election in the coming period.The regional Occupational business in the UK declined slightly over the year as a whole,primarily as a result of the effect of the recession on retailers. Other leasing markets,particularly City and West End of London offices, improved over the second half, havingpreviously reacted sharply to the downturn. The significant disconnect between propertyyields and underlying occupier sentiment throughout the UK continues to represent acautionary note for 2010.The transactional element of the Commercial Development business continued to slow asclients suffered from the lack of available development finance.Overall, our strategic decision to retain teams, despite difficult market conditions, to safeguardour ability to service our clients as markets recover, reduced underlying profit to £1.2m(2008: £7.8m). This reflected the relative lack of business activity in the first half followed byprogressive recovery in the third and fourth quarters.

Savills plcReport and Accounts 2009 13Our businessAsia PacificThe Asia Pacific Transaction business, which is predominantly Commercial, increased revenueby 6.6% to £59.9m (2008: £56.2m). On a constant currency basis this represented a decline of10.7%, which reflected the reduced transaction activity in Hong Kong and across the majorityof the region in the first few months of the year. By contrast the market which representedmainly corporate and high net worth investors, improved substantially during the mid yearand our revenue for the second half increased by 40.4% in constant currency year on year.China and Vietnam performed well showing significant revenue and profit growth. Revenuefrom the Hong Kong market declined compared to 2008, but picked up markedly in thesecond half and other countries, notably Australia and Korea also benefited from improvingconditions later in the year. Towards the end of the year commentators began to raise thequestion of the sustainability of property markets in the region in the light of the degree ofeconomic stimulus emanating from China. Overall, the Asia Pacific Transaction businessrecorded a 58% improvement in underlying profit to £6.8m (2008: £4.3m). The increase inunderlying profits in constant currency was 32.5%.European CommercialRevenue in the Continental European business declined by approximately 17% to £28.3m(2008: £34.2m). In constant currency the underlying decline was 26.5% reflecting thecontinued weakness in the markets in which we operate. There was, however, someimprovement in market sentiment during the second half with more transactions completingas investor appetite focused on prime assets in the key locations. In addition, prime yieldcompression in the UK turned investor attention to similar value propositions in the majorContinental European cities. Our revenue for the second half of 2009 was 8.7% behind thesame period the previous year (16.8% on a constant currency basis).The Savills European business is heavily weighted towards investment transaction advisorywork and therefore its revenues and profits fluctuate in line with investment activity in themarkets in which it operates. Without the support of strong maintainable earnings fromless volatile businesses such as property management, cost management has remainedthe principal variable on which management could focus. During the period our Europeanbusiness as a whole underwent significant restructuring achieving gross annualised savingsof £13.7m, approximately 20% of the annual cost base, at a cost of approximately £2m.This activity together with the reduction in revenue resulted in an underlying loss for the yearof £9.6m (2008: loss £7.8m).US CommercialThe revenue of our New York based Investment Advisory business increased by 21% to£2.3m (2008: £1.9m). On a constant currency basis this increase was 1.9%. US transactionalmarkets were exceptionally weak throughout the year and continue to be into 2010.Notwithstanding the state of the market, we were pleased to be one of the top five advisersfor retail real estate transactions in the US in 2009. The continued lack of debt financerepresented a significant issue, which remains the case in early 2010.However the principal uncertainty is still the effect of the increasing requirement to refinancethe array of outstanding commercial mortgage backed security (‘CMBS’) instruments throughwhich a significant number of historical transactions were financed. It is anticipated thatprogressively from the third quarter 2010 these instruments will begin to reach the end of theirextension periods which should lead to more investment opportunities becoming available.Savills New York has focused on building its relationships with the CMBS Servicers and hasrecruited in the distress and advisory arena. This together with increased cross border interestin the US from both Asia Pacific and Europe, should position us well for the market opportunitywhen it arises. The underlying loss for 2009 was £3.9m (2008: loss £3.9m).

14Savills plcReport and Accounts 2009Group Chief Executive’s reviewSegmental reviews continuedConsultancyRevenue £m 119.4Underlying profitbefore tax £m 10.9Property ManagementRevenue £m 215.2Underlying profitbefore tax £m 12.6Our Consultancy businesses withstood many of the challenges caused by market declineand pressure on fees. The breadth of our services in many markets ensured that overall ourconsultancy revenue declined by only 9.4% to £119.4m (2008: £131.8m).UKTotal revenue from UK consultancy services declined by 12.7% to £88.1m (2008: £100.9m).Our Valuations team benefited from significant volumes of business as lenders assessedthe security value of their loan books. However, competition resulted in material fee decreasesduring the period. Revenue from UK valuations decreased by approximately 30% over theperiod and average fee rates by somewhat more. Our Housing Consultancy teams hada strong year advising local authorities and housing associations resulting in 26% growthin revenue year on year. Our Planning Consultancy team rallied well towards the year endto finish approximately 14% down in revenue on the previous year but saw signs of animprovement in sentiment among developers. Underlying profit in 2009 was £9.2m(2008: £13.5m).Asia PacificIn common with the transaction markets, Asia Pacific Valuation businesses improved overthe course of the year. In China our Valuation business grew revenue by 17% in local currency.Our development and other professional services improved revenues similarly and theConsultancy business as a whole grew revenue by 16.0% to £22.5m (2008: £19.4m) andposted underlying profit of £2.0m (2008: £2.0m).EuropeanOur Continental European Consultancy business principally comprises valuation services,and accordingly faced the same challenges as in the UK. Revenue declined 23% to £8.8m(2008: £11.5m) and resulted in an underlying loss of £0.3m (2008: profit £0.8m).Our Property Management businesses continued to perform strongly, overall growing revenueby 12.4% to £215.2m (2008: £191.4m) in an increasingly competitive market. This businessrepresented 38.4% of our worldwide revenue (2008: 33.7%) and provided us with a strongfoundation to withstand volatility in our Transaction businesses.UKOverall our UK Property Management teams, including Residential and Rural, grew revenueby 7.3% to £64.6m (2008: £60.2m). The growth rate of our core Commercial PropertyManagement business was approximately 10% as we continued to win new mandates ina very competitive environment. By focusing on the quality of our service the Commercialteam continued to build a sound and profitable position in the UK and grew area undermanagement by 7% to approximately 74m sq ft (2008: 69m sq ft). Our Residential and RuralEstate Management business held revenue steady year on year. Overall the UK business heldunderlying profit steady at £7.1m (2008: £7.0m) and retained a healthy margin above 10%.Asia PacificOverall the business grew revenue by 16.7% to £127.6m (2008: £109.3m) which representeda 2.2% decrease on a constant currency basis. Our Asia Pacific Property and FacilitiesManagement represents a significant strength for Savills, particularly in Hong Kong and China.The total square footage under management in the region is approximately 775m sq ft (2008:823m sq ft); the decline reflected the completion of a number of development contracts whichreverted in the normal course of events to owner management in the first half of the year. In thesecond half, the area under management in China increased by approximately 1% as a resultof contract wins in Tianjin and Dalian. Our Property Management operations in Hong Kong,Singapore, Japan and Vietnam all grew their businesses during the year. Underlying profit in2009 was £8.2m (2008: £8.4m)EuropeanContinental Europe revenue grew by 5% to £23.0m (2008: £21.9m) which represented a6.7% decrease in constant currency. During the year we commenced the restructuring ofour businesses in Germany, France and the Netherlands with a view to creating a scalableplatform for future growth. As part of this process we closed our Residential Managementoperation in Berlin. The costs of these actions led to an increased underlying loss for the yearof £2.7m (2008: loss £1.2m) and total area under management was reduced to 47m sq ft(2008: 52m sq ft).

Savills plcReport and Accounts 200915Our businessFinancial ServicesRevenue £m 11.2Underlying lossbefore tax £m (2.9)Fund ManagementRevenue £m 17.4Underlying profitbefore tax £m 2.9Our Financial Services business comprises two regulated entities: Savills Private Finance(SPF), one of the UK’s largest independent mortgage intermediaries and Savills CapitalAdvisors (SCA), a relatively new team focused on raising capital (equity and debt) on behalfof funds and other investor clients. Overall revenue from the Financial Services businessesdeclined by 35.6% to £11.2m (2008: £17.4m). An increase in SCA revenue was offset bythe increased costs of an expanded team and a significant reduction in SPF fee incomesas the UK mortgage market remained stagnant. There are some signs of improving marketconditions in 2010 with more lenders marketing product, although currently the process tocompletion of mortgages is slow and subject to significant hurdles along the way.In response to sustained poor market conditions, SPF undertook a significant restructuringexercise reducing offices and staff numbers. Partly as a result, the Financial Services businessrecorded an underlying loss of £2.9m (2008: loss £1.0m).Cordea Savills revenue declined by 10.8% to £17.4m (2008: £19.5m) primarily as a result ofreduced fee income from transactions in the year. Along with much of the industry, CordeaSavills spent the majority of the year consolidating its fund positions and working throughthe negative impact of the property market decline on asset values. It has successfullyrestructured its flagship closed-end Italian Opportunities Funds (1 and 2) and some of theNorthern European closed-end funds. Alongside these activities the team prepared andsuccessfully launched a new open-ended fund, the UK Income and Growth Fund, one ofthe few new UK focused fund launches that were successful in raising institutional money inthe year. This together with strong inflows into the UK Charities Property Fund and the EuroCommercial Fund represented successful fundraising activity in a difficult year for the industry.Funds under management declined to £2.5bn from £3.0bn over the year largely as a resultof a decline in asset values. Underlying profit decreased by 19.4% to £2.9m (2008: £3.6m).SummaryDuring 2009, property markets reacted to the major financial issues facing them. On the positiveside, the liquidity provided by Governments around the world in response to the banking crisisand global recession together with the consequent low opportunity cost of cash, helped driveinvestment activity in prime market segments, most notably in the UK and Asia.In contrast, the large volume of property assets in potential default which remained within thebanks’ and CMBS debt servicers’ portfolios, the effect of recession on occupiers’ expansionplans and the relative lack of debt for new investment limited the volume of transaction activity.Broadly, those markets are more exposed to the positive forces of liquidity, notably London,began to recover in the second half, in some cases very strongly.For 2010 the key uncertainty is whether we will continue to see broader recovery in marketvalues and activity during the year, or whether the specific market rallies which commencedin the second half of 2009 will prove to be short-lived. 2010 has started better than last year,however, we are cautious about the second half of the year for both UK residential and AsiaPacific markets, which contributed the most to our performance in 2009. This caution reflectsthe potential for market inertia around the UK General Election and uncertainty over whetherthe strong Chinese influenced markets in Asia can continue at 2009 levels. In contrast, weanticipate a better performance in UK Commercial and Fund Management, reduced lossesin Continental Europe, and a broadly similar performance in the US.Against this backdrop and today’s market conditions, we anticipate that our overall performancein 2010 will be similar to that of 2009 but with the relative contributions from our individualbusinesses likely to be somewhat different. We remain, however, well positioned to continueour strategy of growing the business and pursuing selected investment opportunities asthey arise.Jeremy HelsbyGroup Chief Executive

16Savills plcReport and Accounts 2009Financial reviewGroup Chief Financial Officer’s reportFinancial highlightsRevenue of £560.7m(2008: £568.5m)Underlying profit before tax£25.2m (2008: £33.2m)Underlying basic earnings pershare 14.5p (2008: 18.1p)Year end net cash: £66.3m(2008: £45.7m)Simon ShawGroup Chief Financial OfficerDespite continuing adverse market conditions the business benefited from a second half rallyparticularly in the UK Residential and Asia Pacific markets. Revenue for the year declined byapproximately 1.4% to £560.7m (2008: £568.5m) which represented a year on year decline of7.6% in constant currency. Underlying profit declined by 24% to £25.2m (2008: £33.2m), witha negligible net effect from foreign exchange movement.Underlying profit marginUnderlying profit margin declined to 4.5% (2008: 5.8%) reflecting the effect of increased lossesin our Continental European business; fee pressure particularly for valuation work within theConsultancy business; and our strategic decision to maintain and selectively build teams thatcontinued to be adversely affected by challenging market conditions in the UK and the US.Net interestNet finance income in the year was £nil (2008: £2.5m). During a period of historically lowinterest rates and expanded credit spreads this primarily reflects the significant differentialbetween interest received on surplus cash deposits and interest paid on borrowings, includingthe US acquisition loan and the revolving credit facility utilisation during the period.TaxationThe tax charge for the year declined to £4.3m (2008: £4.6m). The effective tax rate was 31.9%(2008: (59.7)%). This is greater than the standard UK rate of corporation tax primarily as a result ofthe effect of non-deductible expenses, impairment charges and provisions against internationaltax losses net of tax credits. The underlying effective tax rate was 28.6% (2008: 36.1%).Earnings per share and dividendBasic earnings per share were 7.3p (2008: loss of 9.3p). Adjusting on a consistent basis forexceptional items, profit on disposals, share-based payments and amortisation of intangibleassets, underlying basic earnings per share fell 20% to 14.5p (2008: 18.1p).Fully diluted earnings per share were 6.9p (2008: loss of 9.3p). The underlying fully dilutedearnings per share declined 21% to 13.8p (2008: 17.5p).An interim dividend of 3.0p per share was paid during the year. Post year end a secondinterim dividend of 6.0p was declared, in lieu of a final dividend, making an unchanged 9.0pdistribution for the full year (2008: 9.0p). The second interim dividend is to be paid on 1 April2010 to shareholders on the register at the close of business on 12 March 2010. Thesefinancial statements do not reflect this dividend payable.Cash resources, borrowings and liquidityYear end gross cash and cash equivalents increased 8% to £81.6m (2008: £75.3m) reflectingcontinued tight control of expenditure and the reduction in dividends paid during the year.There was a significant reduction in gross borrowings at year end which represented £15.3m(2008: £29.6m). These comprised £13.6m in respect of the US Dollar term loan, taken out tofinance the acquisition of Savills US in 2007, £0.7m in overdrafts and £1.0m in loan notes inrespect of previous acquisitions.Cash is typically retained in a number of subsidiaries in order to meet the requirements ofcommercial contracts or capital adequacy. In addition cash in certain territories is retained tomeet future investment requirements where to remit it, would necessitate the Group sufferingwithholding taxes.The Group’s cash flow profile is biased towards the second half of the year. This is as a resultof the timing of trading flows and the major cash outflows associated with dividends, bonusprofit share payments and related payroll taxes in the first half. The Group cash inflow for theyear from operating activities was £39.7m (2008: cash outflow £5.5m), primarily as a result ofthe reversal of the prior year’s working capital outflow.As much of the Group’s revenue is transactional in nature and it is a people business, theBoard’s strategy is to maintain low levels of gearing. To that end, during the year we voluntarilycancelled £20m of the Group’s £80m revolving credit facility as it was deemed unlikely to beutilised. The remaining £60m facility runs to October 2011. At the year end the Group hadundrawn facilities, including overdrafts of £80.2m (2008: £102.2m).Savills pension schemeIn common with the vast majority of defined benefit schemes operated by UK companies,the funding level of the Savills pension scheme deteriorated during the year as asset valuesand interest rates fell. The Plan deficit at year end amounted to £37.7m (2008: £24.6m). InMarch 2010 we reached agreement with the Trustee for the Plan to be closed to future serviceaccrual with effect from 1 April 2010. Plan members will instead participate in the Group’sdefined contribution pension plan.

Savills plcReport and Accounts 2009 17Our businessNet assetsNet assets as at 31 December 2009 were £197.7m (2008: £211.0m). Goodwill and intangibleassets remained in line with the previous year save for an additional £4.3m provision forimpairment of the value of goodwill relating to the US business. The reduction in the year alsorepresents the effect of an increased actuarial loss on the defined benefit pension schemeand currency differences on translation.Capital and shareholders’ interestsMinority interestsMinority interests decreased to £0.6m (2008: £2.4m) reflecting further losses in Europe andthe US offset by profits attributable to B members of Cordea Savills.Share capitalDuring the year ended 31 December 2009, no new shares were issued and no shareswere repurchased for cancellation (2008: nil). The total number of ordinary shares in issueat 31 December 2009 was 131.8m (2008: 131.8m).Business developmentDuring the year the Group increased its shareholding in a number of existing subsidiariessuch as our businesses in Korea and Vietnam and also completed a small acquisition in theUK. The Group paid total consideration of £7.3m (2008: £15.9m) in the year. In March 2010,we announced the proposed acquisition of the 40% voting interests in Cordea Savills that wedo not already own. This transaction, which requires shareholder approval as a related partytransaction, would result in the payment of consideration of between £9.1m and £15.4m,depending upon the financial performance of Cordea Savills over the next two years.Key performance indicatorsThe Group uses a number of key performance indicators (KPIs) to measure its performanceand review the impact of management strategies. These KPIs are detailed under the Strategyand Key Performance Indicators section of the Operating Review on pages 08 and 09. TheGroup continues to review the mix of KPIs to ensure that these best measure our performanceagainst our strategic objectives, in both financial and non-financial areas.Financial policies and risk managementThe Group has financial risk management policies which cover financial risks consideredmaterial to the Group’s operations and results. These policies are subject to continuous reviewin light of developing regulation, accounting standards and practice. Compliance with thesepolicies is mandatory for all Group companies and is reviewed regularly by the Board.Treasury policies and objectivesThe Group Treasury policy is designed to reduce the financial risks faced by the Group, whichprimarily relate to funding and liquidity, interest rate exposure and currency rate exposures.The Group does not engage in trades of a speculative nature. The Group uses derivativefinancial instruments to hedge certain risk exposures.The Group’s financial instruments comprise borrowings, cash and liquid resources and variousother items such as trade receivables and trade payables that arise directly from its operations.Interest rate riskThe Group finances its operations through a mixture of retained profits and bank borrowings,at both fixed and floating interest rates. Borrowings issued at variable rates expose the Groupcash flow to interest rate risk, which is partially offset by cash held at variable rates. Borrowingsissued at fixed rates expose the Group to fair value interest rate risk. Group policy is tomaintain 70% of its borrowings in fixed rate instruments.Liquidity riskThe Group prepares an annual funding plan approved by the Board which sets out the Group’sexpected financing requirements for the next 12 months. These requirements are expected tobe met through existing cash balances, loan facilities and expected cash flows for the year.Foreign currency riskThe Group operates internationally and is exposed to foreign exchange risks. As both revenueand costs in each location are generally denominated in the same currency, transaction relatedrisks are relatively low and generally associated with intra group activities. Consequently, theoverriding foreign currency risk relates to the translation of overseas profits and losses intosterling on consolidation. The Group does not actively seek to hedge risks arising from foreigncurrency translations due to their non-cash nature and the high costs associated with suchhedging. The net impact of foreign exchange rate movements in 2009 was a £35.6m increasein revenue and a £0.6m increase in underlying profit before taxation.

Savills plcReport and Accounts 2009 19Our businessPeopleOur vision to be the real estate advisor of choice in our selected markets and deliver superiorfinancial performance can only be achieved through the dedication, commitment andexcellence of our people.Our people strategy remains focused on supporting delivery of the highest standards of clientservice through motivated and engaged people. We believe that a positive culture is essentialto high quality client service. This positive culture is encapsulated in our values, which arereflected in all our practices and procedures. Our reputation has been built on our people andwe believe that employees whose behaviours reflect our values deliver the excellent clientservice that we strive to provide. The four values are:Pride in everything we doWe:p take great pride in delivering services of the highest quality;p always go ‘the extra mile’ to meet our clients’ objectives; andp seek to employ only the best people.Always act with integrityWe:p behave responsibly;p act with honesty and respect for other people; andp adhere to the highest standards of professional ethics.Take an entrepreneurial approach to businessWe:p seek out new markets and opportunities for clients, and take a creative and entrepreneurialapproach to delivering value;p are forward thinking, and always aim to build long-term client relationships;p aim to be a leader in every market we enter, and commit ourselves with passion, energyand expertise; andp approach problems with a proactive, practical attitude, delivering robust solutions.Help our people fulfil their true potentialWe:p encourage an open and supportive company culture in which every individual is respected;p help our people to excel through appropriate training and development;p share success, and reward achievement; andp recognise that our people’s diverse strengths combined with good teamwork produces thebest results.We continue to work to be an employer of choice and to provide an environment in whichour people can flourish and succeed. We support the International Labour OrganisationsCore Principles. We engage with our people to communicate our vision and strategy throughwell established internal channels. Most of our businesses have an intranet through whichkey issues are communicated, while all major corporate announcements are communicatedacross the Group as they are released externally, along with a senior management briefing toallow full details to be cascaded though the businesses. All employees receive a six monthlyGroup Chief Executive’s newsletter that covers the latest financial information, news andevents from around the Group in depth, including safety, health and environment topicsand matters of general employee interest. Individual businesses use a variety of methods tocommunicate, including regular face to face briefings led by senior management, which alsoprovide us with a mechanism for receiving employee feedback.To enhance operational efficiency and allow us to deliver a high quality service to our employees,we progressed the implementation of a new HR and Payroll System. This is now live in ourUK business and we aim to progressively implement the HR system across our Europeanbusinesses from 2010.

20Corporate responsibilitiescontinuedSavills plcReport and Accounts 2009Globally we continue to invest in training and during the year piloted the new Savills leadershipprogramme. This is fundamental to our talent management and development strategy, andsupports the development of high potential individuals so that they are equipped to become thenext generation of leaders in the Group. Its core elements include strategic leadership training,provided by external as well as internal mentors, and exposure to business and sector leaders.We also continue to focus on attracting and recruiting the best graduates. We are delightedthat the Savills graduate programme continues to be recognised for its unique blend ofworking, training and building skills, having been named ‘Graduate Employer of Choice’at The Times Graduate Recruitment Awards for the fourth year running and receiving the‘Target jobs Award’ for graduate recruiter of the year in property during 2009.Health and safetyWe actively promote a safety culture and are strongly committed to key improvements inhealth and safety. To this end we refreshed our safety strategy and plan in 2008, focusingon priorities such as reducing significant occupational exposure to workplace hazards andmaintaining regulatory compliance of health and safety.During 2009 we continued to focus on hazard awareness and the identification of keyrisk areas. Through the appointment of health and safety ‘champions’ within each of ourbusinesses we identified specific key risks, which has allowed us to better target our riskmanagement initiatives. We also redefined the UK standard for health and safety. This nowspecifies minimum requirements designed to prevent harm to the health of employees,contractors and the public. We now have in place systems, processes and metrics forreporting personal and process safety performance that support internal performancemanagement, promote learning and enable public reporting.Our health and safety framework meets the requirements of HSG65 and we haveimplemented more rigorous standards during 2009. During the year we also commenceda new training programme, first at leadership level then cascading throughout the businessaddressing the fundamentals of hazard awareness including asbestos, driving safely andworking at height.To further enhance the management of health and safety risks across the Group, we beganthe systematic reporting of recordable occupational accidents to executive-level management.Having redefined our UK standard for health and safety in 2009, we aim to progressively rollout the key principles of these new standards across our businesses from 2010.ClientsWe aim to be the advisor of choice in all our global markets and take pride in the qualityof service that we provide to our clients. To achieve this, our people have to deliver thehighest standards of client care. Supporting this commitment and to provide independentendorsement of the efficiency of the service we deliver for our clients, we continue to worktowards accreditation under ISO 9001:2000 (Quality Management) across our office network.This accreditation also makes us more competitive when tendering for work, particularlywhen bidding for public sector contracts. At the end of 2009, 49 UK locations were ISO 9001:2000 accredited, up from 10 at the end of 2007 when our drive to extend our accreditationcommenced (2008: 43 locations).We measure the standards we achieve by seeking regular feedback from our clients. This isaugmented by independent market research, such as the Acritas 2009 review of propertyadvisors, which along with other measures, provides a rating combining brand recognition andclient service levels. In this survey, which was based on research in November and December2009, Savills was the most highly rated agent overall. Whilst this was an encouraging result,we recognise the need to maintain our focus on improving our client service, particularly giventhat property advisors were significantly less well rated than professional services firms in othersectors, such as accountancy and law.The global economic conditions in 2009 became more challenging for all involved in theproperty markets resulting in clients being more demanding in the selection of their advisors.The challenges to deliver positive property returns and liquidity have been exacerbated overthe same period by uncertainty in many markets and legislative changes affecting taxationand design/construction in the built environment. Our reputation for providing innovativesolutions maintains our competitive advantage in these challenging markets.Governments and public opinion are also generating momentum for the green agenda,increasingly influencing how we design, construct and use buildings. To stay informed andinfluence this debate, Savills will become a full participating member of the UK Green BuildingCouncil, which is a member of the World Green Building Federation. The UK Green Building

Savills plcReport and Accounts 200921Our businessCouncil brings together architects, engineers, investors, product manufacturers, developers,contractors, occupiers and surveyors – indeed anyone involved in designing, constructing,maintaining and operating buildings – allowing them to pool their expertise and to contributeto and promote new initiatives which improve the efficiency and sustainability in the builtenvironment. Our businesses in Australia and Hong Kong are already members of equivalentorganisations which operate under the World Green Building Federation grouping. We believethat it is important to contribute to the sustainability debate at a policy level, and we canalso provide client specific advice in this area through the energy and environment businessteam, which provides a range of specialist sustainability consultancy services to clients in thischallenging and evolving area.EnvironmentThe direct impact of our operations on the environment is low compared to many otherindustries. The most significant contribution we can make is through providing quality adviceto our clients, incorporating the principles of sustainability wherever appropriate. However, wealso recognise the value of reducing the direct impact of our activities on the environment toas low a level as is reasonably practicable. By seeking to reduce our environmental impactwe are able to achieve increased operational efficiencies and savings. It also improves ourattractiveness as an employer of choice.Our Group Environmental Policy is based on these principles which are implemented viaour operating companies through both their services and day to day actions. As an exampleof our focus on minimising our direct impact, we have adopted an ongoing programmeof office-based environmental initiatives which include reduced printed paper wastage,sourcing recycled or sustainable paper products, powering down idle desktop equipmentand encouraging recycling initiatives. We are also increasingly using the internet for thedissemination of marketing materials and brochures to reduce paper usage and encouragingthe use of online and telephone conferencing to reduce travel.Our cross-company UK ‘Green Group’ co-ordinates our internal actions and communicatesthe results and good practice to our staff. Building on the progress made during 2008,more than 75% of our UK locations now have their energy needs satisfied by one supplier.A key selection criterion is the use of renewable energy resources to reduce further ourenvironmental impact.As part of our drive to control our environmental impact and to act as a hallmark of qualityfor our clients we have continued to encourage our offices to adopt BS EN ISO 14001:2004(Environmental Management). This is designed to achieve sound environmental performanceby using a proactive range of practical office management measures acknowledging ouraim of carbon reduction. For the second year we have also carried out a greenhouse gasemissions assessment of our three main London offices. Linked to this was our participationin the 2009 Carbon Disclosure Project.In Asia Pacific, 34 properties managed by Savills Guardian were awarded a total of 38 awards,including 4 Gold Awards, by the Environmental Protection Department for Savills performancein protecting the environment via promotion of waste separation facilities for residents.The Savills Guardian team also encourages sites it manages to apply for the Energy EfficiencyProjects Programme; since the programme was launched in April 2009, 60 Savills-managedsites have applied and been accredited under the carbon emission reduction subsidisationscheme. During 2009, the Hong Kong based Property Management team also encouragedresidents to recycle more than 130 tonnes of measurable materials through the effectiveimplementation of waste management in housing management and many of its managedproperties continue to participate in the Hong Kong Government’s Building Energy EfficiencyFunding Schemes. The Property Management team in Hong Kong also received a numberof awards and certifications, including ISO 14001 (energy efficiency, waste reduction, indoorair quality and water quality), during 2009 in recognition of its commitment to improvingenvironmental performance.UK Environmental Reporting 2008/09: GHG Emissions 12008 2009Unit t/CO 2e Unit t/CO 2e Change (%)Business mileage 7.161 2,334.6 6.177 2,013.8 –13.7Electricity usage 2,163.2 1,177.2 1,908.4 1,038.5 –11.81Calculated using DEFRA/DECC 2009 Guidelines for Company Reporting.

Savills plcReport and Accounts 2009 23Our businessCase study: Retrofit of chilled water plant of Ming An PlazaPhase I and Phase II of Ming An Plaza was completed in 1991 and 1997 respectively.Having managed this property for some years, Savills Property Management Hong Kongwas looking to continue to upgrade the property values of the building and provide the bestservices to their valuable clients.The HKSAR Government launched an Energy Efficiency Projects Programme (EEP) in 2009which encourages existing building owners to carry out improvement works to upgrade theenergy efficiency performance of building services installations for communal use. To showour support towards Government policy and our commitment to a sustainable improvementin environmental conservation, we have carried out a retrofit project for the Chilled WaterPlant for both Ming An Plaza Phase I and II.The Project commenced in July 2009 and will be completed in August 2010. The existing aircooledsystem will be replaced by a new water-cooled system. The merits of the new systemas compared with the air-cooled system are:Plant capacityp The capacity will be increased from 996 Tonnage Refrigeration capacity of the chiller (TR)plus a standby of 105 TR to 1,012 TR.Energy efficiencyp Higher than 50% compared with the air-cooled system.Expenditure in electricity chargesp Can achieve a saving of 40% in power consumption which saves HK$950,000 per year.Expenditure in water chargesp Around HK$70,000 per year will be incurred such amount will be offset by the savings fromelectricity charges. Around 13% of water consumed will be reused for flushing purposes.Maintenance costp The condenser of the air-cooled system needs to be replaced every 10 years and additionalmaintenance at HK$80,000 per year will be incurred.Life cyclep The water-cooled system can last for 30–40 years compared with only 15–20 years for theair-cooled system.

24Savills plcReport and Accounts 2009Risks and uncertainties facing the businessGiven the scale and diversity of our businesses, the Board of Directors recognises that the nature, scope and potential impact of ourkey business and strategic risks are subject to constant change. The Board has implemented an appropriate framework to ensurethat it has sufficient visibility of the Group’s key risks and the opportunity regularly to review the adequacy and effectiveness of thecontrols and strategies for managing and mitigating these risks.The Corporate governance report on pages 30 to 35 describes the systems and processes through which the Board managesand mitigates risks.Our consideration of the key risks and uncertainties relating to the Group’s operations, along with their potential impact andthe mitigating factors in place, is set out below. It is not possible to mitigate fully all of our risks and there may be other risksand uncertainties besides those listed below which may also adversely affect the Group.Key risk Description Mitigating factorsChanges in themarkets in whichwe operatep Market conditions globally remain challenging. Therestrictions on credit availability are ongoing andthese, along with a shortage of quality assets for sale,continue to constrain many of the key global realestate markets, and particularly reduce the volume ofcommercial real estate transactions with the resultantadverse impact on our capital markets businessesand overall Group earnings. If these conditionscontinue for an extended period, or deteriorate again,Group earnings and/or our financial condition couldbe adversely affected.p Our strategy of diversity of product and geographicspread continues to reduce the impact on the businessof continued weak market conditions experiencedsince 2008, these factors cannot mitigate theoverall risk to earnings. To offset these risks, wehave implemented appropriate actions to improveoperational efficiencies and reduce costs, whilstbalancing the requirements for cost reduction againstthe need to retain core team strength in order tomaintain client services and capitalise when conditionsimprove. We have also continued to invest selectivelyin our business where new opportunities presentthemselves such as property management and fundmanagement which provide more stable earnings.p Our continual monitoring of market conditions andreview of market changes against our Group strategy,supported by the quarterly reforecasting undertakenby all of our businesses, remain key to our abilityto respond rapidly to further changes in ouroperating environment.Achieving the rightmarket positioningin response to theneeds of our clientsReputational andbrand riskp The markets in which we operate remain highlycompetitive and we need to ensure that we continueto reflect the changing needs of our clients.p Savills is a brand with an excellent reputation in theprincipal markets in which we operate.p We recognise the need to maintain our reputation asa quality brand and ensure the quality of the servicewe provide.p To remain competitive in all markets it is imperative thatwe continue to provide the quality of client care andservice that our clients expect from us. This needdrives our strategy to continue to strengthen theservices offered by the Group, which has servedus well in our currently unsettled markets, and investin the development of client relationships.p The maintenance of our geographic capabilitiesduring this period of weakened market conditionsis aligned with our focus on further developing ourservice capabilities in the major global markets inwhich we operate.p We recognise that our brand strength is vitalto maintaining market share and expandinginto new markets. To this end, we have a brandmanagement programme in place to ensure thebrand’s positioning, identity and personality isclearly and consistently promoted.p We recognise that the quality of the service we offeris vital to maintaining the brand and to this end wehave in place controls and processes to ensurequality assurance.

Savills plcReport and Accounts 200925Our businessKey risk Description Mitigating factorsRecruitment andretention of highcalibre staffp We recognise that our ability to deliver our strategy isdependent on us attracting, developing, motivatingand retaining people of the highest quality. This isfundamental to the future success of our business.Whilst we pride ourselves on our reputation forexcellence as an employer and our profit-sharingapproach to remuneration, which incentivises andrewards out-performance, we recognise that thismodel can come under pressure in periods of lowerGroup earnings.p During 2009 we continued our investment in talentmanagement and development programmes acrossa number of our businesses and the global roll-out ofthe Savills Values.p To augment our profit-sharing approach toremuneration, we make selective use of share basedand other longer term incentives to ensure that ourpeople are incentivised to continue to perform at theestablished high levels during periods when marketconditions hold back our performance.Maintaining standardsof professional,regulatory andstatutory complianceLegal riskResponding topolitical risks in thecountries in whichwe operate globallyManaging ourfinancial risksp We are required to meet a broad range of regulatorycompliance requirements in each of the marketsin which we operate. For example, in the UK, theFinancial Services Authority (FSA) regulates theconduct of Savills Private Finance, Savills CapitalAdvisors and Cordea Savills, and the insurancemediation businesses in our Commercial businesses.In addition, the UK Office of Fair Trading regulates ourResidential business in the UK. A number of the serviceswe provide through our Commercial and Residentialbusinesses are also regulated by The Royal Institutionof Chartered Surveyors (RICS). Also, a number of ouremployees are qualified members of RICS. Failure tosatisfy regulatory compliance requirements mayresult in fines being imposed, adverse publicity andbrand reputational damage and ultimately thewithdrawal of regulatory approvals.p We also have a number of key statutory obligationsincluding the protection of the health, safety and welfareof our employees and others affected by our activities.p In accepting client engagements, group companiesmay be subject to standard of care obligations.Failure to fulfil these obligations could result in claimsbeing made against the relevant group companyand/or its employees.p In our Property Management business, we may assumeresponsibility for appointing and/or supervising thirdparty contractors that provide construction andengineering services for our managed properties.Again failure to discharge these responsibilities inaccordance with our obligations could result in claimsbeing made against the group companies.p Our continued geographic expansion means that oursuccess depends in part on understanding andresponding to the changing political and legislativeconditions in the many countries around the world inwhich we do business.p For all areas of financial risk we have an establishedfinancial control framework with clear responsibilitiesfor operational and finance teams at all levels ofthe Group.p All areas relating to professional, regulatory andstatutory compliance have benefitted by the continuingupdate of our Group Policy Framework which definesthe compliance standards we expect from ourbusinesses. In support of this Framework each of ourbusinesses have their own regulatory and statutorycompliance resources in place and they maintain theinternal processes and controls required to fulfil ourcompliance obligations. Our compliance environment,at all levels, is subject to regular review by internal auditand other assurance providers.p The Group legal policy is designed to ensure thatlegal risk of such claims being made in the markets inwhich we operate, is minimised particularly in relationto consultancy services such as valuations. Whilst theGroup maintains professional indemnity insurance torespond to such claims, the funding of, for example,the self insured amount of any claim ie, the policydeductible or the adverse outcome of claims in excessof the policy indemnity levels could negatively impactour financial condition or results.p Extensive market research and due diligenceis conducted before we enter new markets.Developments in all our markets are kept underongoing review and the requirements of the GroupRisk Management Policy, specifically the need toregularly evaluate the key risks in each market thatwe operate in, extend to all of our businesses globally.p The key financial risks and uncertainties are coveredin the Financial Review on pages 16 and 17.

26Board of DirectorsSavills plcReport and Accounts 2009Top (left to right)Charles McVeighPeter SmithFields Wicker-MiurinMiddle (left to right)Jeremy HelsbyMartin AngleBottom (left to right)Timothy IngramSimon ShawPeter SmithChairman of Savills plc and Chairmanof the Nomination Committee †#Aged 63, was appointed to the Board asa Non-Executive Director on 24 May 2004and was elected Chairman with effect from1 November 2004. His other non-executiveappointments are: N M Rothschild & SonsLimited, Rothschild Bank AG, The EquitableLife Assurance Society, Associated BritishFoods plc and Chairman of TempletonEmerging Markets Investment Trust plc.Formerly, Peter was Senior Partner ofPricewaterhouseCoopers LLP (PwC) andserved for two years as Chairman of Coopers& Lybrand International and as a member ofthe global leadership team of PwC. He servedas Chairman of RAC plc and was a Non-Executive Director of Safeway plc.Jeremy HelsbyGroup Chief Executive #•Aged 54, joined Savills in 1980 and wasappointed to the Board in 1999. He wasChairman and Chief Executive Officer ofSavills Commercial and Savills Europe forseven years until he was appointed as GroupChief Executive on 7 May 2008. He remainsa Director of Savills Asia Pacific.Simon ShawGroup Chief Financial Officer •Aged 45, joined Savills as Group ChiefFinancial Officer on 16 March 2009. Simonis a Chartered Accountant. He is one of thetwo Authorised Representatives of Savills onthe Members’ Committee of Cordea Savills.He is Non-Executive Chairman of Synairgenplc and was Chief Financial Officer ofGyrus Group PLC from 2003 until its saleto Olympus Corporation in 2008, havingpreviously been Chief Operating Officer ofProfile Therapeutics plc between 1998 and2003. Between 1991 and 1997 he was acorporate financier, latterly at HambrosBank Limited.Martin AngleIndependent Non-Executive Director *†#Aged 59, was appointed to the Board on2 January 2007. He is a Non-ExecutiveDirector of JSC Severstal, Pennon Groupplc, The National Exhibition Centre(Chairman) and resigned as Non-ExecutiveDirector of Dubai International Capital LLCin November 2009. Formerly, he served asChairman of Celerant Consulting, as GroupFinance Director of TI Group plc and heldvarious executive roles with Terra FirmaCapital Partners and its portfolio companies,including The Waste Recycling Group(Executive Chairman) and Le Meridien HotelGroup (Deputy Chairman). He is also amember of the Advisory Board of WarwickBusiness School.Timothy IngramSenior IndependentNon-Executive Director *†#Aged 62, was appointed to the Boardon 27 June 2002. He is Chief Executiveof Caledonia Investments plc and a Non-Executive Director of The Sage Group plc,ANZ Bank (Europe) Limited and AlokIndustries Limited. He was formerlyChief Executive of First National FinanceCorporation, a main Board Director of AbbeyNational plc and a Non-Executive Directorof Hogg Robinson plc.Charles McVeighIndependent Non-Executive Directorand Chairman of the RemunerationCommittee *†#Aged 67, was appointed to the Board as aNon-Executive Director on 1 August 2000.He is currently Chairman of Citigroup’sCorporate and Investment Banking –Global Wealth Management Partnership.He serves on the Board of EFG-Hermes andPetropavlosk plc (formerly Peter HambroMining plc). Formerly he was Co-Chairmanof Citigroup’s European Investment Bank andserved on the Boards of Witan InvestmentCompany plc, Clearstream, the LondonStock Exchange, LIFFE, British AmericanBusiness Inc and was a member of both theDevelopment Board and Advisory Councilof the Prince’s Trust. He was also appointedby the Bank of England to serve on the CityCapital Markets Committee and the LegalRisk Review Committee and was a memberof the Fulbright Commission.Fields Wicker-Miurin OBEIndependent Non-Executive Directorand Chairman of the Audit Committee *†#Aged 51, was appointed to the Board on27 June 2002. She is co-founder and partnerof Leaders’ Quest and chairs its AdvisoryBoard. She is a Non-Executive Director of theCDC Group and was on the Board of theUK’s Department for Business for six years,chairing its Investment Committee until 2008.She is also a governor of King’s College Londonwhere she chairs the audit committee.Previously she was Chief Financial Officerand Director of Strategy at the London StockExchange.

Group Executive BoardSavills plcReport and Accounts 200927Top to bottomChris LeeRupert Sebag-MontefioreMark RidleyRobert McKellarSimon HopeJohn LyonsJeremy HelsbyGroup Chief Executive #•For photography and full biography seeopposite page.Simon ShawGroup Chief Financial Officer •For photography and full biography seeopposite page.Chris LeeGroup Company Secretary •Aged 44, joined Savills in June 2008 and wasappointed to the Group Executive Board inAugust 2008. He has responsibility for legaland compliance issues globally. He is one ofthe two Authorised Representatives of Savillson the Members’ Committee of CordeaSavills. He held equivalent roles with AlfredMcAlpine plc, Courts plc and Scholl plcbetween 1997 and 2008, prior to which hewas Deputy Group Secretary of Delta plcfrom 1990 to 1997.Rupert Sebag-MontefioreChairman – L&P •Aged 56, joined Savills in 1980 and wasappointed to the Group Executive Boardwhen it was formed in February 2008.On 26 October 2004, he became Chairmanof Savills (L&P) Limited, having served as itsManaging Director since May 2000. He isresponsible for the UK Residential andgeneral practice surveying business. He wasrecently appointed to the Winchester CollegeInvestment Committee and Regent’s ParkOpen Air Theatre Development Council.Mark RidleyChairman and Chief Executive –Commercial •Aged 48, joined Savills in July 1996 andwas appointed to the Group ExecutiveBoard when it was formed in February 2008.He was appointed Chairman and ChiefExecutive of Savills Commercial Limited inJanuary 2008 and prior to this appointmentwas head of the Manchester office, which heset up in 1996.Robert McKellarChief Executive – Asia Pacific •Aged 50, was appointed to the GroupExecutive Board when it was formed inFebruary 2008. He was appointed ChiefExecutive of Asia Pacific on 31 March 2005having served as the Group Finance Directorsince June 2000 and prior to this sinceDecember 1994 acted as Finance Directorof Savills Commercial Limited.Simon HopeChairman – Europe •Aged 45, joined Savills in September 1986and was appointed to the Group ExecutiveBoard when it was formed in February 2008.He is responsible for our Capital Marketsteam and Head of Savills CommercialInvestment. From 1 January 2009 heassumed responsibility for our Americanbusiness. He is also Chairman of theManagement Board of our Europeanbusinesses and a member of the CharitiesFund Property Board.John LyonsChief Executive – America •Aged 52, was appointed to the GroupExecutive Board in January 2009. He isPresident and Chief Executive of SavillsLLC, which encompasses the New Yorkand Mexico City offices. Formerly, he was aPrincipal and Managing Director of EastdilRealty from 1985 and in 1996 founded andbecame Chief Executive of Granite PartnersLLC, until it was acquired by Savills in 2007.He is an active member of the Wharton-Zell Lurie Real Estate Institute, UrbanLand Institute and the Mortgage BankersAssociation.*Audit Committee†Remuneration Committee#Nomination Committee• Group Executive BoardOur governance

28Directors’ reportSavills plcReport and Accounts 2009The Directors present their Report and theaudited financial statements for the yearended 31 December 2009.Principal activitySavills plc is a holding company.The activities of its principal subsidiariesare to provide transactional advice,consultancy and management services inconnection with commercial, residential andagricultural property, and property relatedfinancial services and fund management.OperationsThe Group operates through a network ofoffices and associates in the UK, Europe,Asia Pacific and the USA.DividendThe profit attributable to shareholders is£8.9m (2008 loss: £11.3m). An interimdividend of 3.0p (net) per share amountingto £3.7m (2008: £7.3m) was paid on28 October 2009 and a second interimdividend of 6.0p (net) per share amountingto £7.4m will be paid on 1 April 2010 toshareholders on the register at 12 March2010. No final dividend is recommended.Principal developmentsThe development of the business isdetailed in the sections entitled Review ofoperations and Financial review on pages07 to 17.The principal risks and uncertainties aredetailed on pages 24 and 25.DirectorsShort biographical details of the currentDirectors are shown on pages 26 and 27.On 13 February 2009, Mark Dearsleyresigned as Group Finance Director andon 16 March 2009, Simon Shaw wasappointed to the Board as Group ChiefFinancial Officer. Since the year end, theBoard has been restructured to streamlinethe management of the Group andprovide an improved focus for decisionmaking. As a result of this restructuring,three Executive Directors, RupertSebag-Montefiore, Simon Hope andRobert McKellar stood down from theBoard on 18 January 2010. All three remainmembers of the Group Executive Board.Following this restructuring, the Boardcomprises the Non-Executive Chairman,two Executive Directors and fourIndependent Non-Executive Directors (fulldetails are provided on page 26). At theconclusion of the forthcoming AnnualGeneral Meeting, Fields Wicker-Miurin,who joined the Board in 2002, will retirefrom the Board.Martin Angle, who retires by rotation inaccordance with the Company’s Articles ofAssociation at this year’s Annual GeneralMeeting, having been in office for threeyears since he was last elected, will offerhimself for re-election. In accordance withthe Combined Code, Charles McVeigh,who has been in office for more than nineyears, also stands for re-election, and goingforward will stand for re-election annually.The Board is satisfied that each Directorwho is standing for re-election continues toshow the necessary commitment and to bean effective member of the Board due totheir skills, expertise and business acumen.Notwithstanding his long service, the Boardconsiders that Charles McVeigh continuesto be regarded as entirely independent incharacter and judgement.Interests in the issued share capital of theCompany held at the beginning and end ofthe year under review by those who wereDirectors at 31 December 2009 or theirfamilies are set out on page 42 of theRemuneration report. Details of shareoptions held by the Directors pursuant tothe Company’s share option schemes aregiven in the Remuneration report on pages42 to 44. It is the Board’s policy that theExecutive Directors should retain at least105,000 shares in the Company and theGroup Chief Executive retain at least150,000 shares.In accordance with DTR4, the Directors’responsibilities statement is set out on page46 of this Annual Report.Enhanced Business ReviewIn accordance with Section 417Companies Act 2006, the Company isrequired to set out in this report a fair reviewof the business of the Group during theyear ended 31 December 2009 and of theposition of the Group at the end of thatfinancial year, together with a description ofthe principal risks and uncertainties facingthe Group. The information can be found inthe following sections of this Annual Report:Review of operations page 07Group strategy page 08Key performance indicators page 08Financial review page 16Corporate responsibilities page 18Risks and uncertainties page 24Statement of Disclosure to AuditorsIn accordance with Section 418,Companies Act 2006 each Director at thedate of approval of this report confirms that:− so far as the Director is aware, there is noinformation, which would be needed bythe Company’s Auditors in connectionwith preparing their audit report, of whichthe auditors are not aware; and− each Director has taken all the steps thathe ought to have taken as a Director tomake himself aware of any suchinformation and to establish that theauditors are aware of it.Takeover DirectivePursuant to regulations made under theCompanies Act 2006 the Company isrequired to disclose certain additionalinformation. Those disclosures not coveredelsewhere within this Annual Report are asfollows:Share capital and major shareholdingsThe share capital of the Company isdetailed on page 92.The Company has only one class of sharecapital formed of ordinary shares. All sharesforming part of the ordinary share capitalhave the same rights and each carries onevote. There are no unusual restrictionson the transfer of ordinary shares.The Directors may also refuse to registera transfer of a certificated share unless theinstrument of transfer is: (i) lodged at theregistered office of the Company or anyother place as the Board may decideaccompanied by the certificate for theshares to be transferred and such otherevidence as the Directors may reasonablyrequire to show the right of the transferor tomake the transfer; or (ii) in respect of onlyone class of shares.The Directors may also refuse to register atransfer of a share (whether certificated oruncertificated), whether fully paid or not, infavour of not more than four persons jointly.The Board may also close the register ofshareholders for up to 30 days effectivelysuspending the registration of all transfers;however, in respect of uncertificatedshares, consent from CREST would berequired for such a closure.As at 17 March 2010, the latest practicabledate before the publication of this AnnualReport, the Company had been notified ofthe following interests in the Company’sordinary share capital in accordance withChapter 5 of the UK Listing Authority’sDisclosure and Transparency Rules:

Savills plcReport and Accounts 2009 29ShareholdersNumberof shares %Lloyds TSB Group Plc(including 9,303,391 sharesheld on behalf of The Savills plc1992 Employee Benefit Trust) 13,503,271 10.24BlackRock, Inc 7,220,131 5.48Majedie AssetManagement Limited 6,821,482 5.17Artisan PartnersLimited Partnership 6,613,236 5.02FIL Limited 6,549,524 4.97Artemis InvestmentManagement Limited 6,472,808 4.91Ignis InvestmentServices Limited 5,365,211 4.07Legal & GeneralGroup Plc 5,230,378 3.97As at 31 December 2009, the Savills plc1992 Employee Benefit Trust (the ‘EBT’)held 9,314,386 shares. Any voting or othersimilar decisions relating to these shares aretaken by the trustees of the EBT, who maytake account of any recommendation ofthe Company. The EBT waives all but0.01p per share of its dividend entitlement.For further details of the EBT please refer toNote 2 to the financial statements.Purchase of own sharesIn accordance with the Listing Rules at theAGM on 6 May 2009, shareholders gaveauthority for a limited purchase of Savillsshares for cancellation of up to 10% of theissued share capital. During the year, noshares were purchased for cancellationunder the programme.The Board proposes to seek shareholderapproval at the AGM on 5 May 2010to renew the Company’s authority topurchase its own ordinary shares of 2.5peach for cancellation or to be held intreasury. Details of the proposed resolutionare outlined in the Notice of Annual GeneralMeeting circulated to shareholders withthis Annual Report and Accounts (AGMCircular).Change of controlThere are no significant agreements whichtake effect, alter or terminate in the event ofchange of control of the Company exceptthat under its banking arrangements, achange of control may trigger an earlyrepayment requirement and that in relationto the Italian Opportunities Funds No.1 and2 managed by Cordea Savills LLP, certaininvestors in these funds may stop furthercommitments to the funds, in which caseany undrawn elements of commitments willbe cancelled.Articles of AssociationThe Company’s Articles are governed byrelevant statutes and may be amended byspecial resolution of the shareholders in ageneral meeting.The Company’s rules about theappointment and replacement of Directorsare contained in the Articles. The powers ofthe Directors are determined by UKlegislation, and the Memorandum andArticles of Association of the Company inforce from time to time.Annual General MeetingThe Notice convening the Annual GeneralMeeting (AGM), to be held at 20 GrosvenorHill, Berkeley Square, London W1K 3HQ at12 noon on 5 May 2010, is contained in theAGM Circular circulated to shareholderswith this Annual Report and Accounts.In addition to the normal business to beconsidered at the AGM, a resolution willbe proposed to renew the Company’sauthority to call general meetings (otherthan the AGM) on 14 days’ notice.Creditors’ payment policyThe Group does not follow any specifiedcode or standard on payment practice.However, the Group aims to settle supplieraccounts in accordance with the individualterms of business agreed with eachsupplier. There were 32 days’ purchasesoutstanding at the end of the year for theCompany (2008: 26 days).Charitable donations andpolitical contributionsThe amount paid to charitableorganisations during the year was£195,042 (revised 2008: £292,902).In addition to the donations above, theGroup also operates a ‘Give As You Earn’scheme which allows employees todonate a portion of their monthly salaryto a registered charity. The Group alsooperates a bonus waiver scheme wherebyemployees can elect to waive an element ofany annual bonus in favour of registeredcharities of their choice upon which theGroup augments the donation to thechosen charity by 10%. These additionalGroup contributions totalled £5,081(2008: £28,281) during the year. Therewere no political contributions (2008: £nil).Corporate governanceThe Corporate governance report, theremuneration report and the Directorsresponsibilities are set out on pages 30 to35 and form part of this report.EmployeesThe Directors recognise that the quality,commitment and motivation of Savillsstaff is a key element in the success ofthe Group, see pages 18 to 23 formore information.Employees are able to share in this successthrough bonus schemes and share plans,see pages 40 and 41 for more information.The Group encourages its employees todevelop their skills through training andcontinued professional development.It is the policy of the Group to provideemployment on an equal basis irrespectiveof gender, race, age, marital status, sexualorientation, religion or religious belief,nationality, colour or disability.Insurance coverThe Company purchases insurance tocover its Directors and Officers against theircosts in defending themselves in civil legalproceedings taken against them in thatcapacity and in respect of damagesresulting from the unsuccessful defence ofany proceedings. The insurance does notprovide cover where the Director has actedfraudulently or dishonestly.As permitted by company law, qualifyingthird party indemnity provisions (as definedby Section 234 of the Companies Act2006) are in force for the benefit of theDirectors (and for former Directors who heldoffice during the 2009 financial year).Post balance sheet eventsOn 5 March 2010, Savills InvestmentsLimited (SIL), which holds 60% of the votingrights in Cordea Savills LLP, entered intoa conditional agreement to acquire the BMember Interests, which represent 40% ofthe voting rights in Cordea Savills. The totalconsideration payable by SIL is up to£15.4m, of which £4.6m will be paid ontransaction close with another £4.5mpayable in equal instalments on the firstand second anniversaries of close, and upto a further £6.3m payable on the secondanniversary, subject to Cordea Savillsearnings performance over the period fromclose. The transaction is conditional onshareholder approval, which will be soughtat the General Meeting to be held on24 March 2010.AuditorsIn accordance with Section 489 of theCompanies Act 2006, a resolution for there-appointment of PricewaterhouseCoopersLLP as auditors of the Company will beproposed at the forthcoming AGM.By order of the BoardChris LeeGroup Company Secretary17 March 2010Registered Office:20 Grosvenor HillBerkeley SquareLondon W1K 3HQOur governance

Savills plc30Report and Accounts 2009Corporate governance reportThe Board is responsible to shareholdersfor the management and control of theCompany’s activities and is committedto the highest standards of CorporateGovernance. The principal governancerules applying to UK companies listed onthe London Stock Exchange are containedin the Combined Code on CorporateGovernance adopted by the FinancialReporting Council in June 2008 (the Code).This report explains how the Company hascomplied with the provisions of the Codeand explains where the Company hasdeparted from them. The Board considersthat, throughout the period under review,with the exception of one area detailedbelow (see Board composition andbalance), the Company has complied withthe provisions recommended in Section 1of the Code which applies to the financialperiod that is the subject of this AnnualReport and Accounts.Board composition and balanceDuring the year the Board comprised aNon-Executive Chairman, four IndependentNon-Executive Directors and six ExecutiveDirectors.The posts of Chairman and Group ChiefExecutive are separated. The Chairman isresponsible for the workings and leadershipof the Board and for the balance of itsmembership. The Group Chief Executive isresponsible for leading and managing thebusiness within the authorities delegated bythe Board.Martin Angle, Timothy Ingram, CharlesMcVeigh and Fields Wicker-Miurin areIndependent Non-Executive Directors.The Board considers that the Non-Executive Directors are independent ofmanagement and have no business orother relationship which could interferematerially with the exercise of theirjudgement.On 13 February 2009, Mark Dearsleyresigned as Group Finance Director andon 16 March 2009 Simon Shaw joined theBoard as Group Chief Financial Officer.During 2009, and as in previous years, theBoard was not compliant with the provisionof the Code which requires that at least halfthe Board, excluding the Chairman, areIndependent Non-Executive Directors.Following the establishment of the GroupExecutive Board in February 2008, whichassumed responsibility for overseeingthe development and implementation ofstrategy and the operational performanceof the Group, the Board reconsidered itsown structure during 2009 in the light ofthe role and performance of the GroupExecutive Board. Following this review,the Company announced the restructuringof its Board effective 18 January 2010 tostreamline management of the Group andprovide an improved focus on decisionmaking. As a result of this restructuring,Rupert Sebag-Montefiore, Simon Hopeand Robert McKellar stood down from theBoard with effect from 18 January 2010,although all three continue to be membersof the Group Executive Board withunchanged responsibilities. Followingthis restructuring the Company is in fullcompliance with the Code. It was alsoannounced that at the conclusion of theforthcoming AGM, Fields Wicker-Miurin,who was appointed to the Board in 2002,would retire from the Board as a Non-Executive Director and that Martin Anglewould replace her as Chairman of theAudit Committee.Since 1 November 2004, Timothy Ingramhas been the Senior Independent Director.He is available to shareholders if they haveconcerns which have not been addressedby contact with the Chairman or GroupChief Executive.The biographies of the current Boardmembers appear on pages 26 and 27.Functioning of the BoardThe Directors receive managementinformation, including financial, operatingand strategic reports, in advance of Boardmeetings. From time to time the Boardreceives presentations from non-Boardmembers on matters of significance.The Non-Executive Directors periodicallyvisit different Group companies to gaingreater insight into the business. The GroupCompany Secretary provides the Boardwith ongoing reports that cover legal andregulatory changes and developments.The Board has adopted a formal scheduleof matters specifically reserved to it fordecision which is under continuous review.These matters reserved for the Boardinclude:− approval of Group strategy;− approval of the annual operating andcapital expenditure budgets and anymaterial changes;− review of performance, assessed againstthe Group’s strategy, objectives,business plans and budgets;− approval of interim and preliminaryannouncements and the Annual Reportand Accounts;− approval of the dividend policy;− approval of any significant changes inaccounting policies or practices;− extension of the Group’s activities andinto new geographic areas;− approval of any significant acquisitionsor investments;− any decision to divest or close any Groupbusiness;− delegation of the appropriate authorities,in particular to the Group ExecutiveBoard, and agreeing terms of referencefor its various committees; and− the appointment of new Directors.

Savills plcReport and Accounts 2009 31Board meetingsDuring the year the Board held eight scheduled meetings and a separate strategic review to confirm Group strategy. Directors’attendance at scheduled Board and Committee meetings convened in the year ended 31 December 2009 was as follows:BoardAuditCommitteeRemunerationCommittee Nomination CommitteeNumber of meetings in year 8 5 5 2Our governanceNon-Executive DirectorsAttended Attended Attended AttendedPeter Smith 8 **3 2Martin Angle 8 4 5 2Timothy Ingram 8 5 5 2Charles McVeigh 8 5 4 2Fields Wicker-Miurin 8 5 5 2Executive DirectorsJeremy Helsby* 8 2Simon Shaw* (appointed 16 March 2009) 6Simon Hope* (resigned 18 January 2010) 8Robert McKellar* (resigned 18 January 2010) 8Rupert Sebag-Montefiore* (resigned 18 January 2010) 8Mark Dearsley* (resigned 13 February 2009) 1* Members of the GEB** Peter Smith became a member of the Remuneration Committee on 1 April 2009All Directors receive detailed papers in advance of Board meetings. When unable to be present in person, Directors may attend byaudio or video-conference. When Directors are not able to attend Board or Committee meetings, their comments on the papers to beconsidered at that meeting are relayed in advance to the Chairman of that meeting.The Non-Executive Directors meet separately at least twice each year without the presence of the Executive Directors and also meetwithout the Chairman, at which time the Chairman’s performance is appraised.There is an approved procedure for Directors to take independent professional advice in the performance of their duties at the Group’sexpense. During 2009, no Director obtained any such independent advice.The Group Company Secretary is responsible for ensuring that Board procedures are followed and for advising the Board ongovernance matters. In addition, all the Directors have access to the advice and services of the Group Company Secretary.

32Corporate governance reportcontinuedSavills plcReport and Accounts 2009Board committeesThe Board has delegated certain authoritiesto committees each with formal termsof reference, which are available onrequest or on the Company’s website(www.savills.com). The membership ofeach committee is detailed on page 26.The principal committees of the Board areas follows:Nomination CommitteeThe Committee consists of the fourIndependent Non-Executive Directors,the Chairman and Group Chief Executive.The Committee is chaired by the GroupChairman, Peter Smith. The Committeemeets at least once a year and met twiceduring 2009.The Committee provides a forum toconsider Board succession planning,whether to recommend the re-election of aDirector and to make recommendations tothe Board on certain matters including itscomposition, structure, size and balance.The Company’s Articles of Associationprovide that Directors must submitthemselves for re-election every three yearsand that newly appointed Directors mustsubmit themselves for re-election at the firstAGM after their appointment. In makingrecommendations to shareholders forthe re-appointment of any Director, theNomination Committee considers thatDirector’s performance and ongoingcontribution to the success of theCompany and makes its relevantrecommendation to the Board.During the year the Committee completedthe process to identify a successor toMark Dearsley as Group Finance Directorfollowing his decision to resign from theBoard with effect from 13 February 2009.Specialist external search consultantswere retained to carry out the search for asuitable candidate. Following this search,Simon Shaw joined the Board as GroupChief Financial Officer on 16 March 2009.Audit CommitteeThe Committee consists of the fourIndependent Non-Executive Directors.The Committee is chaired by Fields Wicker-Miurin and met five times during the year.The meetings are also attended by theNon-Executive Chairman, Group ChiefExecutive, Group Chief Financial Officer,Group Financial Controller, the internalauditors, the external auditors, Group RiskDirector, Group Company Secretary andother senior executives of the Groupby invitation. The Board considers thatthe members of the Audit Committeecollectively have sufficient recent andrelevant financial experience to carry outthe functions of the Committee.The Committee is authorised to investigateany matter within its terms of reference and,where necessary, to obtain external legalor other independent professional advice.The Committee’s activities during the yearhave included:− reviewing the half-year and annualfinancial statements with particularreference to accounting policies, togetherwith significant estimates and financialreporting judgements and thedisclosures made therein;− monitoring the financial reportingprocess;− reviewing management representationsmade to the external auditors;− reviewing the Group’s procedures toensure that all relevant information isdisclosed;− discussing any issues arising out of thehalf year review or the full year audit withthe external auditors (in the absence ofmanagement where appropriate);− making recommendations to theBoard with regard to continuing theappointment and remuneration of theexternal auditor; overseeing the Group’srelations with the external auditor and theeffectiveness of the audit process;− reviewing and assessing theeffectiveness of the Group’s internalfinancial controls;− monitoring and reviewing theeffectiveness of the internal audit functionand reviewing all reports preparedby the internal auditors and assessingmanagement’s responsiveness to suchreports; and− reviewing and assessing theeffectiveness of the Group’s internalcontrol and risk management systems(see pages 24 and 25).Over the last 12 months the Committeehas considered in particular the impairmentof assets (including subsidiaries) in the lightof the recessionary environment, theTreating Customers Fairly policies of ourmortgage broking subsidiary and thearrangements for the quality assurance ofprofessional work.The Committee also considers on anongoing basis the independence of theexternal auditors and has establishedpolicies to consider the appropriateness orotherwise of appointing the externalauditors to perform non-audit services.As detailed on page 29 the externalauditors are PricewaterhouseCoopers LLP.The external auditors are responsible for theannual audit and have also provided certainnon-audit services to the Company,principally advice on taxation matters.The Audit Committee considers that therelationship with the auditors is workingwell and remains satisfied with theireffectiveness. The Audit Committee issatisfied that such work was bestundertaken by PricewaterhouseCoopersLLP and the objectivity of the externalauditors has not been impaired by reasonof this further work. Accordingly, it has notconsidered it necessary to date to requirethe firm to tender for the audit work.The audit was last tendered in 2000.The external auditors are required torotate the audit partners responsible forthe Group audit every 5 years. There areno contractual obligations restricting theCompany’s choice of external auditor.

Savills plcReport and Accounts 2009 33The provision of internal audit services wasreviewed during the year. Following thisreview, internal audit is now jointly deliveredby the Group’s newly established internalaudit team and KPMG (KPMG havingpreviously provided internal audit serviceson an outsourced basis).Globally, all of our businesses haveestablished whistleblowing procedures toenable employees to raise concerns aboutpossible improprieties in financial reportingand other matters on a confidential basis.Remuneration CommitteeThe Committee consists of the fourIndependent Non-Executive Directorsand the Chairman. It is chaired by CharlesMcVeigh and meets at least three times ayear (five times in 2009). With effect from1 April 2009 the Committee tookadvantage of the amendment to theCombined Code and the Chairmanbecame a member of the RemunerationCommittee. The Group CompanySecretary is secretary to the Committeeand also provides advice to it.The Committee’s principal responsibilitiesare to determine Company policy on seniorexecutive remuneration and to agree theremuneration packages of the ExecutiveDirectors. The Committee (excluding theChairman) also determines the level of feespayable to the Chairman.Given the central part that remunerationplays in the success of the Group, in termsof recruitment, motivation and retention ofhigh quality employees the Group ChiefExecutive is consulted on the remunerationpackages of the other Executive Directorsand attends Committee meetings byinvitation.The Committee takes the advice of externalconsultants from time to time and did soduring the year from Towers Watson.Towers Watson provides no other servicesto the Group.The Committee does not deal with the feespaid to the Non-Executive Directors, whichare decided by the Executive Directors andthe Chairman (except when his own fee isbeing discussed).The report of the RemunerationCommittee is set out on pages 36 to 45.The Remuneration report will be put toshareholders at the AGM in 2010.Group Executive Board (GEB)The GEB comprises the Group ChiefExecutive, the Group Chief FinancialOfficer, the managing directors of the mainoperating subsidiaries and the GroupCompany Secretary. Under the leadershipof the Group Chief Executive, the GEB isresponsible for overseeing the developmentand implementation of strategy, theoperational performance of the Group andother specific matters delegated to it by theBoard. The GEB meets monthly.Board performance and evaluationIn accordance with established practice,a formal self evaluation of its ownperformance was undertaken duringthe year to identify areas where Boardperformance and procedures might befurther improved. The same process wasused to evaluate the performance of theBoard Committees. Based on an approachestablished in previous years by anindependent consultant, the review thisyear was led by the Group CompanySecretary. The findings were reported at ameeting on 15 December 2009. The Boardwill continue to keep its performanceunder review and currently anticipates thatanother review will be carried out in 2010.Directors’ conflicts of interestFrom 1 October 2008, Directors have hada statutory duty to avoid situations in whichthey have, or could have, an interest thatconflicts or possibly may conflict with theinterests of the Company. A Director willnot be in breach of that duty if the relevantmatter has been authorised in accordancewith the Articles of Association by theother Directors. The Articles of Associationwere amended to include the relevantauthorisation for Directors to approve suchconflicts by a resolution of shareholders atthe AGM held on 7 May 2008. The Boardhas adopted a set of guiding principles onmanaging conflicts and approved aprocess for identifying current and futureactual and potential conflicts of interest.It was also agreed that the NominationsCommittee would review authorisedconflicts annually or if and when a newpotential conflict situation was identified ora potential conflict situation materialised.During 2009, actual and potential conflictsof interest that were identified by eachDirector were subsequently authorisedby the Board, subject to appropriateconditions in accordance with theguiding principles.Our governance

34Corporate governance reportcontinuedSavills plcReport and Accounts 2009Relations with shareholdersThe Group recognises the importance ofmaintaining regular dialogue with itsshareholders. The Group Chief Executiveand Group Chief Financial Officer have aregular programme of meetings andpresentations with analysts and investors,including presentations at the time of theCompany’s preliminary announcementof annual and half year results.This programme facilitates an ongoingtwo-way dialogue between the Companyand shareholders, and helps to ensure thatthe Board is aware of shareholders’ viewson a timely basis. The Board also reviewsa report at least twice each year from itscorporate broker on feedback frominvestors and the market’s view ofthe Company.The AGM provides the Board with avaluable opportunity to communicatewith private shareholders and is generallyattended by all the Directors. Shareholdersare given the opportunity to ask questionsduring the meeting and to meet Directorsfollowing the conclusion of the formal partof the meeting. In accordance with theCode the level and manner of voting ofproxies lodged on each resolution at theAGM is declared at the meeting andpublished on the Company website.The Directors aim to give as much noticeof the AGM as possible which will be atleast 21 clear days, as required bythe Company’s Articles of Association.In accordance with the Articles ofAssociation, electronic and paper proxyappointments and voting instructions mustbe received not later than 48 hours beforea general meeting.The Company has taken advantage ofthe provisions within the Companies Act2006 which allow communications withshareholders to be made electronicallywhere shareholders have not requestedhard copy documentation. Details of theinformation available for shareholders canbe found on page 99. Information about theCompany is also available on the website atwww.savills.comInternal control and risk managementThe Board has overall responsibility forestablishing and maintaining the Group’ssystem of risk management and internalcontrol to safeguard shareholders’investments and the Group’s assets,and for reviewing the effectiveness of thissystem. However, such a system isdesigned to manage rather than eliminatethe risk of failure to achieve businessobjectives and can provide only reasonableand not absolute assurance againstmaterial misstatement or loss.Key elements of the Group’s system of riskmanagement and internal control are:− a comprehensive system for planningand reporting the performance of eachoperating subsidiary. The GEB andBoard meet regularly and review theGroup’s results against plan and theprevious year. The Group regularlyreviews performance forecasts. Clearresponsibilities are given to operationaland financial managers for themaintenance of effective financial controlsand the production of accurate andtimely financial management information;− the regular review and assessment of theperformance of the business including inrelation to risk management and internalcontrol by the Board and its subcommittees, including the GEB;− attendance at operating subsidiary andassociate boards by Executive Directors.These boards and their associatedcommittees also meet regularly and haveformal reporting structures. Directors ofoperating subsidiaries are also closelyinvolved in the day-to-day business oftheir respective operations, and aretasked with identifying key risks andensuring that appropriate action is takento manage these;− a Group Risk Management Policy whichsets out the process for identifying,evaluating, assessing and managing thekey risks to the Group’s businessobjectives, supported by an appropriateorganisational structure and clearlydefined management responsibilities;− a Group Risk Committee which reportsto the GEB and is tasked with the review,discussion and challenge of key risksreported, the ongoing Group-widedevelopment of internal control andthe monitoring of internal audits andother sources of assurance on theeffectiveness of internal controls.The Committee consists of the GroupChief Financial Officer, senior subsidiarybusiness management and Groupfunction heads including the Group RiskDirector, Group Company Secretary andGroup IT Director;− procedures available to employeeswho are concerned about possibleimpropriety, financial or otherwise, andwho may wish to ensure that actionis taken without fear of victimisationor reprisal;− a programme of assurance activitieswhich assess the effectiveness of ourinternal controls in respect of our keyrisks which includes:− a programme of internal auditsundertaken in accordance with anannual risk based plan approved bythe Audit Committee. The plan isdesigned to ensure that internal auditreviews are focused on priority controlsacross the Group to provide bothindependent review and challenge onthe effectiveness of these controls, andthe promotion of good practice andconsistency in their development;− compliance programmes within ourregulated businesses in supportof the Group’s commitment toconduct its business responsiblyand in accordance with all lawsand regulations to which its businessactivities are subject; and− an annual self assessment andcertification by management of theexistence and effectiveness of thecontrols within each of our operatingsubsidiaries. The results are collatedfor review and challenge by the GroupRisk Committee and onward reportingto the GEB and Audit Committee.

Savills plcReport and Accounts 2009 35The Audit Committee, on behalf of theBoard, has reviewed the effectiveness ofthe system of risk management and internalcontrol. In performing its review ofeffectiveness, the Audit Committeeconsidered the following reports andactivities:− internal audit reports on the review ofpriority controls across the Group andthe monitoring of management actionsarising;− management’s own assessment ofthe performance of the system of riskmanagement and internal controlduring 2009;− invitation of key financial and operationalmanagers to present on the operationof the system of risk management andinternal control within their businesses;− reports from the Group Risk Committeeincluding reporting on Group-wide keyrisk assessment activity and annual selfassessment findings; and− reports from the external auditors on anyissues identified during the course oftheir work.The Board, in reviewing the effectiveness ofthe system of internal control, can confirmthat necessary actions have been, or arebeing, taken to remedy any significantfailings or weaknesses identified fromthat review.Going concernThe Group’s business activities, togetherwith the factors likely to affect its futuredevelopment, performance and positionare set out in the business review on pages07 to 25. The financial position of the Group,its cash flows, liquidity position andborrowing facilities are described in theFinancial review on pages 16 and 17.In addition, Note 3 to the financialstatements includes the Group’s objectives,policies and processes for managing itscapital; its financial risk managementobjectives; details of its financial instrumentsand hedging activities; and its exposures tocredit risk and liquidity risk.The Group has considerable financialresources, including a bank facility thatmatures in October 2011, together witha broad spread of businesses acrossdifferent geographic areas and sectorssome of which enjoy stable revenue undercontract with a number of customers.As a consequence, the Directors believethat the Group is well placed to manageits business risks successfully despite thecurrent uncertain economic outlook.After making enquiries, the Directors have areasonable expectation that the Companyand the Group have adequate resourcesto continue in operational existence forthe foreseeable future. Accordingly, theycontinue to adopt the going concern basisin preparing the Annual Report andAccounts.By order of the BoardPeter SmithChairman17 March 2010Our governance

36Remuneration reportSavills plcReport and Accounts 2009Remuneration CommitteeThe Remuneration Committee isresponsible for the broad policy governingsenior employees’ pay and remuneration.It sets the actual levels of all elements ofthe remuneration of all Executive Directorsof the Company. The Committee alsooversees the administration of Savillsemployee share schemes and determinesthe level of fees for the Chairman of theBoard. The Committee’s terms of referenceare available at www.savills.comThe Committee aims to ensure that senioremployees (including Executive Directorsof the Company) are rewarded for theircontribution to Savills and are motivatedto enhance returns to shareholders.It advises the Board on the remunerationframework and policy for such seniorexecutives and, once formally endorsed bythe full Board, it applies the policy.The composition of the Committee isdetailed on page 26.Remuneration policyIt is essential that the Group providesremuneration packages which attract,retain and motivate Executive Directors andemployees of the highest quality. Benefitpackages awarded to Executive Directorsare structured to provide a competitivemix of performance and non-performancerelated remuneration. The arrangementsare reviewed on a regular basis. In settingthe remuneration of the Executive Directorsthe Committee is able to considercorporate performance on environmental,social and governance issues.The Board accepted all of therecommendations relating to the ExecutiveDirectors’ remuneration made by theRemuneration Committee during thefinancial year ended 31 December 2009.The remuneration for each of the Directorsis shown on page 38. Bonus earnedreflects performance against the criteriaset out.Base salarySavills business philosophy is founded onthe premise that employees should bemotivated through highly incentive-based(and therefore variable) remunerationpackages. Salaries for fee-earners,particularly more senior ones, are generallybelow market averages for similarbusinesses and a greater emphasis isplaced on the performance related bonusof either profit share or commission in thetotal remuneration package. These lowersalary levels help to limit related costs(e.g. pension) and also have the effect ofreducing the fixed element of the businesscost base. For support staff, salaries aregenerally set closer to market levels.Salaries are reviewed annually (although notnecessarily increased) by each operatingsubsidiary for all employees. The salaries ofthe Executive Directors were not increasedwith effect from 1 January 2009 or1 January 2010, with the base salary ofRobert McKellar being reduced for 2009 by12.5%, consistent with the cost reductioninitiatives implemented across the Group’sAsia Pacific business in the year (basesalaries have, effective 1 January 2010,reverted to 2008 levels). Long termincentives are provided through the grant ofoptions under the Savills Executive ShareOption Scheme (2001).Performance related bonusIn general, each operating subsidiary hasa fee-earner discretionary bonus schemewhere the annual bonus pool availablefor distribution is directly related to the profitof that subsidiary after charging all costs(pre-bonus) including central overheadsand finance charges. The bonus pool foreach subsidiary company is generatedby a formula. In the UK and Europe, theamounts available for distribution withinthese bonus pools are calculated in bandsbetween 30% of the pre-tax and pre-bonusprofits through to 65% for excellentperformance, based on the achievement ofpredetermined thresholds. These bandsare reviewed regularly.The Remuneration Committee expects,over the cycle, profit share bonuses andcommissions, in aggregate, to be in theorder of 55% to 65% of pre-tax profitsexcluding charges for such payments.Awards to fee-earning employees areassessed by reference to fee earningachievements, the profitability of theindividual’s area of responsibility,contribution to business developmentand managerial responsibilities.Similar arrangements are in place in the USand Asia Pacific, tailored to the particularrequirements of each individual market.A portion of the bonus of senior employeesand Executive Directors may be deferredfor a period of not less than three yearsand awarded in shares under the SavillsDeferred Share Bonus Plan, details ofwhich can be found on page 40 .Senior employees and Executive Directorsmay participate in the Savills DeferredShare Bonus Plan, the Savills ExecutiveShare Option Scheme (2001), the SavillsShare Incentive Plan and the SavillsSharesave Scheme; details of which aregiven on pages 40 and 41. Details of anyawards made to Executive Directorsunder these schemes are given onpages 42 to 44.Senior employees, excluding the ExecutiveDirectors, may also participate in the SavillsDeferred Share Plan, details of which aregiven on page 40.

Savills plcReport and Accounts 2009 37Executive salary and bonusThe salary and bonus arrangements ofthe Executive Directors are structured byreference to their primary role within theGroup. The base salaries for all ExecutiveDirectors are set at levels which aresignificantly below market averages.The bonuses for Executive Directors inrespect of the 2009 financial year weredetermined as follows:Jeremy Helsby – bonus reflects, firstly,the Group’s financial performance andsecondly an objectives-based elementreflecting his performance/contributionduring the course of the relevant yearmeasured against criteria pre-set by theCommittee. His maximum bonus potentialis £2m in any year. Part of the bonus isdelivered in the form of deferred shares withthe proportion that is delivered in the formof deferred shares increasing as bonusincreases. For the 2009 financial year, nobonus was paid to Jeremy Helsby inrespect of Group financial performance asthis was below the threshold determined bythe Committee (2008 : £nil). The objectivesbasedbonus awarded to him reflects hisdelivery against his objectives, andparticularly his ongoing action to re-shapethe Group and reduce its cost basesignificantly to a level which is appropriatefor the challenging markets in which we arenow operating.Simon Hope, Robert McKellar and RupertSebag-Montefiore – bonus is now earnedin a manner consistent with the principles ofthe arrangements implemented for JeremyHelsby in 2008.For Robert McKellar and Rupert Sebag-Montefiore – bonus reflects, firstly, thefinancial performance of the business forwhich they have responsibility; secondly,their performances/contributions during therelevant year measured against objectivespre-set by the Committee; and, thirdly,overall Group performance. Under theserevised arrangements at least 75% ofbonus potential is linked to the financialperformance of a business stream and/orthe Group.For Simon Hope – bonus reflects, firstly,his fee-earning activities and contributionto the profit of the UK Commercial businessand the financial performance of theEuropean and US businesses, secondly,his performance/contribution during therelevant year measured against objectivespre-set by the Committee; and, thirdly,overall Group performance.Maximum bonus potential for all three iscapped in respect of any financial yearand, with the exception of Robert McKellar(the delivery of reward in the form ofdeferred shares is not tax efficient for theemploying company nor the individual)at the higher levels of bonus up to 30%of any award is paid in deferred shares.Maximum bonus will only accrue forexceptional performance.The above arrangements remain in placefor Simon Hope, Robert McKellar andRupert Sebag-Montefiore notwithstandingthat they stood down from the Boardeffective 18 January 2010.Simon Shaw (Group Chief Financial Officerappointed 16 March 2009) – bonusreflects, consistent with Jeremy Helsby’sarrangements, firstly, the financialperformance of the Group; and, secondlyhis performance measured againstobjectives pre-set by the Committee.Part of the bonus is delivered in the formof deferred shares with the proportion thatis delivered in the form of shares increasingas bonus increases. Simon Shaw’smaximum potential bonus is capped at£1.5m in any year.The above arrangements also apply for the2010 and 2011 financial years.PensionFollowing the year end it was agreed thatthe Pension Plan of Savills (the Plan), whichprovided final salary pension benefits tosome employees (including three ExecutiveDirectors) would close with regard to futurebenefit accrual with effect from 31 March2010 (full details of the pension benefitsprovided by the Plan for Executive Directorsare on page 39). Pension benefits forformer members of the Plan (includingExecutive Directors) will from 1 April 2010instead be provided through the Group’sdefined contribution Personal Pension Plan.Employer contributions in relation to allformer Final Salary Scheme members,including Executive Directors, are set at20% of pensionable salary for the perioduntil March 2015; thereafter employercontributions for former Final SalaryScheme members, including ExecutiveDirectors are set at 14% ofpensionable salary.Our governance

38Remuneration reportcontinuedSavills plcReport and Accounts 2009Analysis of Directors’ remuneration (audited)Executive DirectorsSalary/fees Bonus BenefitsYear to31 December2009£Year to31 December2009Cash£Year to31 December2009Deferred*£Year to31 December2009£Employer pensioncontribution(includingfinal salary,GPP and bonuswaived)Year to31 December2009£Year to31 December2009£TotalYear to31 December2008£Jeremy Helsby 195,000 422,500 117,500 10,460 25,823 771,283 780,690Simon Shaw(appointed 16 March 2009) 140,417 280,000 145,000 7,160 8,352 580,929 n/aFormer Executive DirectorsSimon Hope(resigned 18 January 2010) 105,000 340,000 110,000 10,460 24,990 590,450 600,233Robert McKellar****(resigned 18 January 2010) 151,986 496,000 – 98,484 7,562 754,032 711,447Rupert Sebag-Montefiore(resigned 18 January 2010) 100,000 416,000 156,000 10,389 23,800 706,189 464,072Mark Dearsley(resigned 13 February 2009)65,842 – – 2,381 – 68,223 359,866Non-Executive DirectorsMartin Angle 40,000 – – – – 40,000 36,250Timothy Ingram** 40,000 – – – – 40,000 36,250Charles McVeigh (Chairman –Remuneration Committee)*** 47,500 – – – – 47,500 42,500Peter Smith 150,000 – – – – 150,000 190,000Fields Wicker-Miurin (Chairman –Audit Committee)*** 47,500 – – – – 47,500 42,500* For details of the Deferred Share Bonus Plan please refer to page 40.** Payment made to Caledonia Investments plc where he is Chief Executive.*** The Chairmen of the Audit and Remuneration Committees each receive £7,500 for undertaking these additional responsibilities.**** Robert McKellar’s base salary was reduced in Hong Kong dollar terms (the currency in which it is paid) by 12.5% effective 1 January 2009 consistent with the cost savingsinitiatives implemented across the Group’s Asia Pacific business (although this reduction in base salary is not apparent due to the increase in the value of the Hong Kong $relative to sterling during 2009). His base salary has returned to 2008 levels effective 1 January 2010.Excluded from the cash bonus figures for 2009 for Jeremy Helsby and Rupert Sebag-Montefiore are amounts of £10,000 and £15,000which were waived in favour of contributions to registered charities by their employing companies (2008: Jeremy Helsby waived£10,000).Fees payable to the Non-Executive Directors were not increased during 2009. As disclosed in the 2008 Report and Accounts the feespaid to the Non-Executive Directors were increased in 2007 from £32,500 p.a. to £40,000 p.a. with effect from 1 July 2008 (the firstincrease in fees payable since 2006).

Savills plcReport and Accounts 2009 39BenefitsExecutive Directors and senior employeesare provided with a company car (or carallowance) and they and their immediatefamilies are members of the Savills Group’sprivate medical or hospital insuranceschemes.AdviceDuring the year Towers Watson advisedthe Committee on appropriate salary andincentive arrangements for the ExecutiveDirectors. The Group received noother services from Towers Watson.The Committee was also advised andsupported by the Group CompanySecretary.External directorshipsThe Executive Directors are allowedto accept external non-executivedirectorships, subject to approval by theBoard and any conditions that it mightimpose. For non-executive directorshipswhich are considered to arise by virtueof an Executive Director’s position withinSavills, the fees are paid directly to Savills.During 2009 Rupert Sebag-Montefiore waspaid £25,000 for acting as non-executivechairman of the non-statutory board ofThe Digital Property Group. Unrelated to hisemployment with the Group, Simon Shawreceives a fee of £25,000 p.a. in relationto his appointment as Non-ExecutiveChairman of Synairgen plc.Non-Executive Directors’ remunerationThe fees for the Chairman are determinedby the Remuneration Committee.The fees for the other Non-ExecutiveDirectors are set by the Board, excludingthese Non-Executive Directors, withinthe limits set in the Company’s Articles ofAssociation. The Non-Executive Directorsdo not receive any share options, bonusesor any other performance related paymentsnor do they receive any pensionentitlement. The fees payable to the Non-Executive Directors were not increasedduring 2009.Consistent with the cost savings initiativesprogressed across the Group, PeterSmith’s annual fee as Chairman wasagreed at a reduced rate of £150,000 p.a.(2008: £190,000) effective 1 January 2009.PensionThree Executive Directors (Jeremy Helsby,Simon Hope and Rupert Sebag-Montefiore)participated in the Pension Plan of Savills(the Plan) for final salary pension benefitsduring the year. The Plan is a contributorydefined benefit scheme which providesa pension based on final base salaryand length of service. In addition tothe Company’s contribution, memberscontributed 7% of salary during the yearended 31 December 2009. This Plan will beclosed to future benefit accrual with effectfrom 31 March 2010. Pension benefitsfor former members of the Plan (includingExecutive Directors) will instead, from1 April 2010, be provided through theGroup’s defined contribution PersonalPension Plan (GPP).Under the Plan and the GPP only basesalary is pensionable (in the case of JeremyHelsby currently capped at £107,000 p.a.).The current normal retirement age underthe Plan is 60 although as a result of AgeDiscrimination legislation the Company’snormal retirement age has increased to 65.The current normal retirement age underthe GPP is age 65.The Company makes contributions forRobert McKellar to a Mandatory ProvidentFund in Hong Kong and during the yearcontributed £7,562.Our governancePensions disclosure (audited)ExecutiveDirectorsIncrease in accruedpension during the yearin excess of inflation 131December2009£31December2008£Transfer value of theincrease less Director’scontributions 131December2009£31December2008£Accumulated totalaccrued pension at theend of the year 231December2009£31December2008£Total increase in accruedpension during the year 231December2009£31December2008£Transfer value of totalpension at start and endof the year 331December2009£31December2008£Increase in transfervalue over the year, lessDirector’s contributions 431December2009£Jeremy Helsby 2,692 416 40,910 (6,049) 49,504 46,813 2,692 2,625 983,494 810,492 165,407 156,655Simon Hope 1,750 503 13,291 (6,472) 28,438 26,688 1,750 1,750 436,093 324,986 103,757 63,927Rupert Sebag-Montefiore 1,667 (479) 23,169 (20,573) 46,250 44,583 1,667 1,667 946,144 800,874 138,270 136,831Notes1. 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 thecontributions 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 overthe 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).31December2008£

40Remuneration reportcontinuedSavills plcReport and Accounts 2009Share related incentivesDirectors’ Deferred Share Bonusesand Option SchemesThe Group operates five employee shareschemes, details of which are below.The Committee keeps these schemesunder review to ensure their continuedeffectiveness and compliance with bestpractice and contribution to shareholdervalue.The Savills Deferred Share Bonus Plan(the DSBP) and The Savills DeferredShare Plan (the DSP)The DSBP was adopted by the Board onthe recommendation of the RemunerationCommittee in 2001. It provides for theaward of conditional rights to acquireSavills shares based on performanceachievements measured over theimmediately preceding financial year.The performance targets are specific toeach individual and either relate to Groupthresholds, subsidiary company targets ora combination of both. In order to supportretention of key fee-earners, a proportionof bonuses decided by the RemunerationCommittee are required to be takenin the form of deferred shares.The DSBP remains closely aligned toSavills successful executive remunerationstrategy, which is to include a meaningfulperformance related pay element and tocontrol the level of base annual salaries atsenior levels significantly below marketcomparables. The deferred elementprovides an added incentive in the formof potential share price growth over thedeferred period together with an importantretention aspect in that awards normallylapse in the event of executives leavingservice before the vesting date.Awards of deferred shares normally vestafter a deferred period of not less thanthree years although a longer deferredperiod may apply. The shares are subjectto forfeiture if the executive leaves serviceprior to the vesting date other than indefined ‘good leaver’ situations (e.g.redundancy, ill-health, etc.). The shares areacquired by purchase in the marketthrough an independent employee benefittrust (the EBT) with funds provided by therelevant employing company. For awardsmade from 2006 onwards, the number ofshares awarded is increased on the vestingdate to reflect final and interim dividendspaid to ordinary shareholders throughoutthe deferred period. There are no powersto issue new shares (or to reissue existingtreasury shares) under either the DSBP orthe EBT and therefore there is no dilution ofexisting shareholdings. The EBT can holdup to 15% of the Company’s issued sharecapital. This limit was agreed after fullconsultation with institutional shareholdersin 2002–2003 and approved by ordinaryresolution of shareholders at the AGMin 2003.In summary, the combination of a bonusaward system which is highly geared toreward performance together with adeferred element in the form of Savillsshares provides a key element in Savillsremuneration strategy both as an incentiveand as a retention tool.The DSP provides for the grant of awardsof deferred shares which normally vest notearlier than three years from the awarddate (the deferred period may be longer).The DSP provides the scope for the Boardto make such awards to key executiveswhere the Board considers that there areparticular business reasons, in the interestsof the Company, for applying a retentionelement to remuneration (for example onthe acquisition of a business). Awardsunder the DSP are forfeited if the executiveleaves the employment of the Group beforethe end of the deferred period (other thanin defined ‘good leaver’ situations such asredundancy or ill-health). The sharesrequired to satisfy DSP awards are fundedthrough the EBT in the same manner asDSBP awards are funded (see paragraphtwo of the previous section) and thereare no powers to issue new shares or toreissue existing treasury shares under theDSP and therefore there is no dilution ofexisting shareholdings. The ExecutiveDirectors are not eligible to receive awardsunder the DSP.

Savills plcReport and Accounts 2009 41The Savills Executive Share OptionScheme (2001) (the 2001 Scheme)The 2001 Scheme was authorised byshareholders at the AGM in 2001 andcomprises a scheme approved byHM Revenue and Customs (HMRC) and aschedule under which options which do notfall within the HMRC approval limits may begranted. Options granted under the 2001Scheme are normally exercisable not earlierthan three years following the date of grantand not later than ten years from the dateof grant (with exceptions for ‘good leavers’).Grants are normally made annually ona phased basis and the exercise ofoptions is subject to the achievement of aperformance target related to the increasein the Company’s earnings per sharecompared to a stated percentage aboveinflation over a fixed three year period.The ability to re-measure performance overa later period if not met within the initialthree year period was removed in 2004subject to one transitional grant wherebythe performance could, if necessary, bere-measured over an extended period offour years. Options are currently satisfiedby the issue of new shares within the ABI’sdilution limits.The performance target that applies tooptions granted between 2001 and 2005requires that the Company’s earnings pershare must increase over the period ofthree consecutive financial years by anaverage of at least 3% p.a. above inflation(as measured by the Retail Prices Index(all items) (RPI)). Options granted from 2006onwards are subject to a tiered approachwhereby, in respect of any grant, the firstone-third of the number of shares underoption is subject to the above RPI + 3%p.a. target with an escalating performancerequirement in respect of the remainingtwo-thirds as follows:Second one-third of the number of shares– RPI + 4% p.a.Final one-third of the number of shares –RPI + 5% p.a.The Savills Sharesave Scheme(the Sharesave Scheme)Executive Directors are eligible toparticipate in the Sharesave Scheme,which is an HMRC approved scheme opento all employees of nominated participatingcompanies who have a minimum of threemonths’ service at the date of invitation.The Sharesave Scheme was adopted byshareholders in 1998 with a ten-year lifeand, following shareholder approval,replaced in 2008 with an updated scheme.The Sharesave Scheme is linked to amonthly savings contract and options aregranted at a maximum 20% discount tomarket price. The most recent invitationwas limited to three year savings contracts,although the rules currently allow three orfive year savings contracts to be offered.The Savills Share Incentive Plan (SIP)At the AGM on 7 May 2003, shareholdersapproved the introduction of the SIP. This isa share purchase plan approved by HMRCavailable to all employees including theExecutive Directors. The scheme is aimedat encouraging employee share ownershipand an interest in the Company’sperformance. Employees invest in Savillsplc shares by making contributions fromtheir gross salary subject to a currentstatutory annual limit of £1,500 (£125 permonth). If the shares are held in the SIPfor five years no income tax or NICs arepayable. The scheme was launched inMay 2004. There are other elements ofthe SIP authorised by shareholders but itis not the present intention to offerthese elements.Our governance

42Remuneration reportcontinuedSavills plcReport and Accounts 2009Ordinary shares (audited)Interests in the share capital of the Company beneficially held by the Directors as at 31 December 2009 are detailed below:31 December 2009 31 December 2008Martin Angle – –Jeremy Helsby 604,849 604,849Simon Hope 105,516 87,702Timothy Ingram 24,000 24,000Robert McKellar 132,048 132,048Charles McVeigh – –Rupert Sebag-Montefiore 263,955 263,439Simon Shaw 192 n/aPeter Smith 20,000 20,000Fields Wicker-Miurin 1,360 1,360No Directors have bought or sold shares since 31 December 2009, with the exception of Simon Hope, Rupert Sebag-Montefiore andSimon Shaw who are members or the Savills Incentive Plan (SIP) and as such have acquired 115, 115 and 114 respectively throughthe SIP.It is the Board’s policy that each Executive Director should aim to hold at least 105,000 shares in the Company (except for the GroupChief Executive who should own at least 150,000 shares). Above these limits the Board takes the view that the Directors may retain orsell shares as they see fit.The Savills Sharesave Scheme (audited)At31 December2008Grantedduring yearExercisedduring yearLapsedduring yearNumber of sharesAt31 December2009Market priceon date ofexerciseDirectorsRestatedJeremy Helsby 1,098 – – – 1,098 – 510.5p 01.07.09Simon Hope 3,018 – – – 3,018 – 318p 01.12.10Exercisepriceper shareExercisablewithin sixmonths fromRupert Sebag-Montefiore* – 3,398 – – 3,398 – 267p 01.12.12Simon Shaw – 3,398 – – 3,398 – 267p 01.12.12* Rupert Sebag-Montefiore’s holding as at 31 December 2008 was stated in the Report and Accounts 2008 as 3,018. This option lapsed on 22 December 2008.

Savills plcReport and Accounts 2009 43The Savills Executive Share Option Scheme (2001) (audited)DirectorsAt31 December2008Grantedduring yearHMRC Approved/UnapprovedExercisedduring yearLapsedduring yearNumber of sharesAt31 December2009Market priceon date ofexerciseExercisepriceper shareDatenormally firstexercisableJeremy Helsby 9,338 – Approved – – 9,338 – 321.25p 14.03.08 14.03.15Expiry date23,662 – Unapproved – – 23,662 – 321.25p 14.03.08 14.03.1520,000 – Unapproved – 20,000 – – 596p 13.03.09 13.03.1650,000 – Unapproved – – 50,000 – 300.125p 16.04.11 16.04.18– 135,064 Unapproved – – 135,064 – 288.75p 17.04.12 17.04.19Simon Hope 9,338 – Approved – – 9,338 – 321.25p 14.03.08 14.03.1522,662 – Unapproved – – 22,662 – 321.25p 14.03.08 14.03.1520,000 – Unapproved – 20,000 – – 596p 13.03.09 13.03.1636,666 – Unapproved – – 36,666 – 300.125p 16.04.11 16.04.18– 72,727 Unapproved – – 72,727 – 288.75p 17.04.12 17.04.19Robert McKellar 9,338 – Approved – – 9,338 – 321.25p 14.03.08 14.03.1520,662 – Unapproved – – 20,662 – 321.25p 14.03.08 14.03.1520,000 – Unapproved – 20,000 – – 596p 13.03.09 13.03.1636,666 – Unapproved – – 36,666 – 300.125p 16.04.11 16.04.18– 72,727 Unapproved – – 72,727 – 288.75p 17.04.12 17.04.19Our governanceRupert Sebag-Montefiore 46,000 – Unapproved – – 46,000 – 217.75p 30.03.07 30.03.149,338 – Approved – – 9,338 – 321.25p 14.03.08 14.03.1523,662 – Unapproved – – 23,662 – 321.25p 14.03.08 14.03.1520,000 – Unapproved – 20,000 – – 596p 13.03.09 13.03.1636,666 – Unapproved – – 36,366 – 300.125p 16.04.11 16.04.18– 72,727 Unapproved – – 72,727 – 288.75p 17.04.12 17.04.19Simon Shaw – 10,389 Approved – – 10,389 – 288.75p 17.04.12 17.04.19– 114,286 Unapproved – – 114,286 – 288.75p 17.04.12 17.04.19

44Remuneration reportcontinuedSavills plcReport and Accounts 2009The Savills Deferred Share Bonus Plan (DSBP) (audited)At31 December2008Awardedduring yearVestedduring yearNumber of sharesAt31 December2009Closing midmarketpriceof a Savills plcshare the daybefore grant*Market valueat dateof vestingDirectorsNormal vesting dateJeremy Helsby 17,350 – 17,350 – 426.5p 260p 15.03.0911,284 – – 11,284 642.5p – 14.03.1018,456 – 18,456 – 596p 260p 13.03.0926,676 – – 26,676 656p – 19.03.1060,929 – – 60,929 328.25p – 17.03.11– 72,727 – 72,727 288.75p – 17.04.12Simon Hope 38,804 – 38,804 – 426.5p 260p 15.03.09113,618 – – 113,618 642.5p – 14.03.1035,234 – 35,234 – 596p 260p 13.03.0957,164 – – 57,164 656p – 19.03.1045,696 – – 45,696 328.25p – 17.03.11– 51,948 – 51,948 288.75p – 17.04.12Robert McKellar 11,722 – 11,722 – 426.5p 294.5p 15.03.0915,564 – – 15,564 642.5p – 14.03.108,388 – 8,388 – 596p 294.5p 13.03.0911,432 – – 11,432 656p – 19.03.1030,464 – – 30,464 328.25p – 17.03.11– 25,974 – 25,974 288.75p – 17.04.12Rupert Sebag-Montefiore 17,350 – 17,350 – 426.5p 260p 15.03.0925,166 – 25,166 – 596p 260p 13.03.0930,487 – – 30,487 656p – 19.03.1060,929 – – 60,929 328.25p – 17.03.11– 10,389 – 10,389 288.75p – 17.04.12* Mid-market prices for awards prior to 11 May 2006 have not been adjusted to account for the 2:1 share subdivision on that date.No options granted under the Executive Share Option Scheme (2001) were exercised by Directors during the year. Under the DSBP172,470 shares vested during the year; no DSBP awards lapsed. Under the Executive Share Option Scheme (2001) options over80,000 ordinary shares lapsed during the year. The mid-market price of the shares at 31 December 2009 was 320p and the rangeduring the year was 223.5p to 377.5p.Directors’ service contractsThe Group Chief Executive and Group Chief Financial Officer both have service agreements with Savills plc. These agreements can beterminated by the Company on provision of 12 months’ notice. The Chairman’s letter of engagement allows for six months’ notice.Other Non-Executive Directors are appointed for an initial period of three years. These appointments may also be renewed forsubsequent terms. Details are as follows:Date appointed to BoardDate resigned from the BoardEnd date of currentletter of appointmentNotice periodMartin Angle 2 January 2007 1 January 2013 Terminable at willJeremy Helsby 1 May 1999 n/a* 12 monthsTimothy Ingram 27 June 2002 26 June 2011 Terminable at willCharles McVeigh 1 August 2000 31 July 2012 Terminable at willSimon Shaw 16 March 2009 n/a* 12 monthsPeter Smith 24 May 2004 23 May 2010 6 monthsFields Wicker-Miurin 27 June 2002 26 June 2011 Terminable at will* But subject to the Articles of Association.

Savills plcReport and Accounts 2009 45The 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 Chief Executive, is entitled to receive any unpaid bonus on termination of employmentunless he is employed by the Company on the first day of the month in which such bonus is payable and has not previously givennotice. The Group Chief Executive is entitled to receive a pro rata bonus on termination of employment in respect of the period up tothe date of expiry of his contractual notice period provided he is a ‘good leaver’ (which expression does not include dismissal due topoor performance).Performance graphThe total shareholder return delivered by the Company over the last five years is shown in the chart below. Over this period the Companyhas delivered total shareholder return of 49% (FTSE 250: 54%). Savills was ranked 96th by performance in the FTSE 250 over the fiveyears to 31 December 2009.The Directors believe that the FTSE 250 is the most appropriate index against which to compare total shareholder return as it is an indexof companies of similar size to Savills plc.Below is a graph showing total shareholder return for Savills plc against the FTSE 250 Index over the last five years:Our governance300250200150100500By order of the BoardCharles McVeighChairman of the Remuneration Committee17 March 2010Registered Office: 20 Grosvenor Hill, Berkeley Square, London W1K 3HQ

Savills plc46Report and Accounts 2009Directors’ responsibilitiesThe Directors are responsible for preparingthe Annual Report, the Directors’Remuneration report and the financialstatements in accordance with applicablelaw and regulations.Company law requires the Directors toprepare financial statements for eachfinancial year. Under that law, the Directorshave prepared the Group and Companyfinancial statements in accordance withInternational Financial Reporting Standards(IFRSs) as adopted by the European Union.The financial statements are required bylaw to give a true and fair view of the stateof affairs of the Company and the Groupand of the profit or loss of the Group forthat year.In preparing those financial statements,the Directors are required to:− select suitable accounting policies andthen apply them consistently;− make judgements and estimates thatare reasonable and prudent;− state that the financial statements complywith IFRSs as adopted by the EuropeanUnion;− prepare the financial statements onthe going concern basis, unless it isinappropriate to presume that the Groupwill continue in business, in which casethere should be supporting assumptionsor qualifications as necessary.The Directors confirm that they havecomplied with the above requirements inpreparing the financial statements.The Directors are responsible for keepingproper accounting records that disclosewith reasonable accuracy at any time thefinancial position of the Company and theGroup and to enable them to ensure thatthe financial statements and the Directors’Remuneration report comply with theCompanies Act 2006 and, as regards theGroup financial statements, Article 4 of theIAS Regulation. They are also responsiblefor safeguarding the assets of theCompany and the Group and hence fortaking reasonable steps for the preventionand detection of fraud and otherirregularities.The Directors are responsible for themaintenance and integrity of theCompany’s website and legislation in theUnited Kingdom governing the preparationand dissemination of financial statementsmay differ from legislation in otherjurisdictions.Each person who is a Director at the dateof approval of this report confirms that:− so far as the Director is aware, there is norelevant audit information of which theCompany’s auditors are unaware; and− each Director has taken all the steps thathe/she ought to have taken as a Directorto make himself/herself aware of anyrelevant audit information and to establishthat the Company’s auditors are awareof that information.Directors’ responsibility statementThe Directors confirm that pursuant toDTR4, to the best of each person’sknowledge:− the financial statements, prepared inaccordance with the applicable set ofaccounting standards, give a true and fairview of the assets, liabilities, financialposition and the profit or loss of theCompany and the undertakings includedin the consolidation taken as a whole;and− the Directors’ report includes a review ofthe development and performance of thebusiness and the position of the issuerand the undertakings included in theconsolidation taken as a whole, togetherwith a description of the principal risksand uncertainties that they face.By order of the BoardJeremy HelsbyGroup Chief ExecutiveChris LeeGroup Company Secretary17 March 2010

Savills plcReport and Accounts 2009Independent auditors’ reportto the members of Savills plc47We have audited the financial statementsof Savills plc for the year ended31 December 2009 which comprise theConsolidated income statement, theConsolidated statement of comprehensiveincome, the Consolidated and Companystatements of financial position, theConsolidated statement of changes inequity and Company statement of changesin equity, the Consolidated and Companystatements of cash flows and the relatednotes. The financial reporting frameworkthat has been applied in their preparation isapplicable law and International FinancialReporting Standards (IFRSs) as adopted bythe European Union and, as regards theCompany financial statements, as appliedin accordance with the provisions of theCompanies Act 2006.Respective responsibilities of Directorsand auditorsAs explained more fully in the Directors’responsibilities statement set out on page46 the Directors are responsible for thepreparation of the financial statements andfor being satisfied that they give a true andfair view. Our responsibility is to auditthe financial statements in accordancewith applicable law and InternationalStandards on Auditing (UK and Ireland).Those standards require us to comply withthe Auditing Practices Board’s EthicalStandards for Auditors.This report, including the opinions, hasbeen prepared for and only for theCompany’s members as a body inaccordance with Chapter 3 of Part 16 ofthe Companies Act 2006 and for no otherpurpose. We do not, in giving theseopinions, accept or assume responsibilityfor any other purpose or to any otherperson to whom this report is shown orinto whose hands it may come savewhere expressly agreed by our priorconsent in writing.Scope of the audit of the financialstatementsAn audit involves obtaining evidence aboutthe amounts and disclosures in the financialstatements sufficient to give reasonableassurance that the financial statements arefree from material misstatement, whethercaused by fraud or error.This includes an assessment of: whetherthe accounting policies are appropriateto the Group’s and the Company’scircumstances and have been consistentlyapplied and adequately disclosed; thereasonableness of significant accountingestimates made by the Directors; and theoverall presentation of the financialstatements.Opinion on financial statementsIn our opinion:− the financial statements give a true andfair view of the state of the Group’sand of the Company’s affairs as at31 December 2009 and of the Group’sprofit and Group’s and Company’s cashflows for the year then ended;− the Group financial statements havebeen properly prepared in accordancewith IFRSs as adopted by the EuropeanUnion;− the Company financial statements havebeen properly prepared in accordancewith IFRSs as adopted by the EuropeanUnion and as applied in accordance withthe provisions of the Companies Act2006; and− the financial statements have beenprepared in accordance with therequirements of the Companies Act2006 and, as regards the Group financialstatements, Article 4 of the lASRegulation.Opinion on other matters prescribedby the Companies Act 2006In our opinion:− the part of the Directors’ Remunerationreport to be audited has been properlyprepared in accordance with theCompanies Act 2006;− the information given in the Directors’report for the financial year for which thefinancial statements are prepared isconsistent with the financial statements;and− the information given in the Corporategovernance statement set out on pages30 to 35 with respect to internal controland risk management systems andabout share capital structures isconsistent with the financial statements.Matters on which we are required toreport by exceptionWe have nothing to report in respect of thefollowing:Under the Companies Act 2006 we arerequired to report to you if, in our opinion:− adequate accounting records have notbeen kept by the Company, or returnsadequate for our audit have not beenreceived from branches not visited by us;or− the Company financial statements andthe part of the Directors’ Remunerationreport to be audited are not in agreementwith the accounting records and returns;or− certain disclosures of directors’remuneration specified by law are notmade; or− we have not received all the informationand explanations we require for our audit.Under the Listing Rules we are required toreview:− the Directors’ statement, set out on page35, in relation to going concern; and− the parts of the Corporate governancestatement relating to the Company’scompliance with the nine provisions ofthe June 2008 Combined Codespecified for our review.John WatersSenior Statutory Auditorfor and on behalf ofPricewaterhouseCoopers LLPChartered Accountants and StatutoryAuditorsLondon17 March 2010(a) The maintenance and integrity of the Savills plcwebsite is the responsibility of the Directors; the workcarried out by the Auditors does not involve considerationof these matters and, accordingly, the Auditors accept noresponsibility for any changes that may have occurred tothe financial statemetns since they were initially presentedon the website.(b) Legislation in the United Kingdom governing thepreparation and dissemination of financial statementsmay differ from legislation in other jurisdictions.Our governance

Savills plc48Report and Accounts 2009Consolidated income statementfor the year ended 31 December 2009NotesYear ended2009£mYear ended2008£mRevenue 5 560.7 568.5Less:Employee benefits expense 9(a) (357.2) (358.0)Depreciation 16 (7.0) (7.2)Amortisation and impairment of intangible assets 15 (7.9) (42.0)Other operating expenses (177.9) (189.6)Other operating income 6 0.2 0.2Profit on disposal of associate, joint ventures andavailable-for-sale investments 6 – 17.4Operating profit/(loss) 6 & 8 10.9 (10.7)Finance income 11 2.3 7.0Finance costs 11 (2.3) (4.5)– 2.5Share of post-tax profit from associates and joint ventures 17(a) 2.6 0.5Profit/(loss) before income tax 13.5 (7.7)Income tax expense 12 (4.3) (4.6)Profit/(loss) for the year 9.2 (12.3)Attributable to:Equity shareholders of the Company 8.9 (11.3)Minority interest 0.3 (1.0)9.2 (12.3)Earnings per shareBasic earnings per share 14(a) 7.3p (9.3p)Diluted earnings per share 14(a) 6.9p (9.3p)Underlying earnings per shareBasic earnings per share 14(b) 14.5p 18.1pDiluted earnings per share 14(b) 13.8p 17.5pExceptional items of £33.9m in 2008 are shown in Note 8.

Savills plcReport and Accounts 2009Consolidated statement of comprehensive incomefor the year ended 31 December 200949NotesYear ended2009£mProfit/(loss) for the year 9.2 (12.3)Year ended2008£mOther comprehensive incomeFair value loss on available-for-sale investments 17(b) (0.8) (0.5)Actuarial loss on defined benefit pension scheme 10 (12.8) (16.3)Tax on items directly taken to reserves 12 5.2 4.3Currency translation differences (9.8) 27.0Other comprehensive (loss)/income for the year, net of tax (18.2) 14.5Our resultsTotal comprehensive (loss)/income for the year (9.0) 2.2Total comprehensive (loss)/income attributable to:Owners of the Company (9.1) 2.8Minority interest 0.1 (0.6)(9.0) 2.2

Savills plc50Report and Accounts 2009Consolidated and Company statements of financial positionat 31 December 2009Notes31 December2009£mGroup31 December2008£m31 December2009£mCompany31 December2008£mAssets: Non-current assetsProperty, plant and equipment 16 18.3 23.7 0.9 0.9Goodwill 15 128.3 133.5 – –Intangible assets 15 20.6 21.7 1.1 0.7Investments in subsidiaries 17(c) – – 133.9 139.4Investments in associates and joint ventures 17(a) 12.6 10.9 – –Deferred income tax assets 18 27.4 22.4 1.7 1.6Available-for-sale investments 17(b) 14.0 16.2 0.2 –221.2 228.4 137.8 142.6Assets: Current assetsWork in progress 2.9 2.8 – –Trade and other receivables 19 145.4 164.5 13.1 12.6Derivative financial instruments 24 0.1 2.6 – 1.5Cash and cash equivalents 20 81.6 75.3 19.2 17.1230.0 245.2 32.3 31.2Liabilities: Current liabilitiesBorrowings 23 6.3 13.2 – –Trade and other payables 21(a) 165.0 167.2 14.7 6.7Current income tax liabilities 21(b) 2.5 2.4 – –Employee benefit obligations 25(b) 3.1 3.5 – –Provisions for other liabilities and charges 25(a) 5.2 7.3 0.3 1.8182.1 193.6 15.0 8.5Net current assets 47.9 51.6 17.3 22.7Total assets less current liabilities 269.1 280.0 155.1 165.3Liabilities: Non-current liabilitiesBorrowings 23 9.0 16.4 – –Derivative financial instruments 24 0.7 1.2 – –Trade and other payables 22 11.1 14.9 13.7 15.0Retirement and employee benefit obligations 10 & 25(b) 42.6 29.8 2.1 1.4Provisions for other liabilities and charges 25(a) 4.4 1.2 1.2 –Deferred income tax liabilities 18 3.6 5.5 – –71.4 69.0 17.0 16.4Net assets 197.7 211.0 138.1 148.9Equity: Capital and reserves attributable to equity holders of the CompanyShare capital 26 3.3 3.3 3.3 3.3Share premium 83.0 83.0 83.0 83.0Other reserves 28 19.6 29.5 3.3 5.9Retained earnings 28 91.2 92.8 48.5 56.7197.1 208.6 138.1 148.9Minority interest 0.6 2.4 – –Total equity 197.7 211.0 138.1 148.9Approved by the Board of Directors on 17 March 2010 and signed on its behalf byJ C Helsby S J B Shaw

Savills plcReport and Accounts 2009Consolidated statement of changes in equityfor the year ended 31 December 200951Sharecapital£mSharepremium£mAttributable to owners of the GroupBalance at 1 January 2009 3.3 83.0 29.5 92.8 2.4 211.0Profit for the year – – – 8.9 0.3 9.2Other comprehensive income/(loss):Fair value loss on available-for-sale investments – – (0.8) – – (0.8)Actuarial loss on defined benefit pension scheme – – – (12.8) – (12.8)Tax on items directly taken to reserves – – 0.5 4.7 – 5.2Currency translation differences – – (9.6) – (0.2) (9.8)Total comprehensive income/(loss) for the year – – (9.9) 0.8 0.1 (9.0)Transactions with owners:Employee share option scheme:– Value of services provided – – – 9.8 – 9.8Purchase of treasury shares – – – (4.7) – (4.7)Disposals (net of tax) – – – (0.1) – (0.1)Dividends – – – (7.4) (1.1) (8.5)Acquisitions – – – – (0.8) (0.8)Balance at 31 December 2009 3.3 83.0 19.6 91.2 0.6 197.7Otherreserves£mRetainedearnings£mMinorityinterest£mTotalequity£mOur resultsSharecapital£mSharepremium£mAttributable to owners of the GroupBalance at 1 January 2008 3.3 83.0 3.9 127.5 5.9 223.6Loss for the year – – – (11.3) (1.0) (12.3)Other comprehensive income/(loss):Fair value loss on available-for-sale investments – – (0.5) – – (0.5)Actuarial loss on defined benefit pension scheme – – – (16.3) – (16.3)Tax on items directly taken to reserves – – (0.6) 4.9 – 4.3Currency translation differences – – 26.6 – 0.4 27.0Total comprehensive income/(loss) for the year – – 25.5 (22.7) (0.6) 2.2Transactions with owners:Employee share option scheme:– Value of services provided – – – 10.0 – 10.0Dividends – – – (22.0) (3.1) (25.1)Disposals (net of tax) – – 0.1 – – 0.1Acquisitions – – – – 0.2 0.2Balance at 31 December 2008 3.3 83.0 29.5 92.8 2.4 211.0Otherreserves£mRetainedearnings£mMinorityinterest£mTotalequity£m

Savills plc52Report and Accounts 2009Company statement of changes in equityfor the year ended 31 December 2009Sharecapital£mSharepremium£mShare-basedpaymentsreserve*£mCurrencytranslationreserve£mCapitalredemptionreserve£mAttributable to equity holders of the CompanyOtherreserves£mRetainedearnings*£mTotalshareholders’equity£mBalance at 1 January 2009 3.3 83.0 1.1 2.6 0.3 3.0 55.6 148.9Profit for the year – – – – – – 3.1 3.1Other comprehensive income:Actuarial loss on defined benefit pension scheme – – – – – – (0.7) (0.7)Tax on items directly taken to reserves – – – – – – 0.2 0.2Total comprehensive income for the year – – – – – – 2.6 2.6Employee share option scheme:– Value of services provided – – 0.3 – – – – 0.3– Exercise of options – – (0.5) – – – (5.8) (6.3)Transfer between equity accounts – – – (2.6) – – 2.6 –Dividends – – – – – – (7.4) (7.4)Balance at 31 December 2009 3.3 83.0 0.9 – 0.3 3.0 47.6 138.1Sharecapital£mSharepremium£mShare-basedpaymentsreserve*£mCurrencytranslationreserve£mCapitalredemptionreserve£mAttributable to equity holders of the CompanyOtherreserves£mRetainedearnings*£mTotalshareholders’equity£mBalance at 1 January 2008 3.3 83.0 0.8 – 0.3 3.0 21.8 112.2Profit for the year – – – – – – 61.0 61.0Other comprehensive income:Actuarial loss on defined benefit pension scheme – – – – – – (0.9) (0.9)Tax on items directly taken to reserves – – – – – – 0.3 0.3Currency translation differences – – – 2.6 – – – 2.6Total comprehensive income for the year – – – 2.6 – – 60.4 63.0Employee share option scheme:– Value of services provided – – 0.4 – – – – 0.4– Exercise of options – – (0.1) – – – (3.8) (3.9)– Lapse of options – – – – – – 0.1 0.1Distribution for Employee Benefit Trust – – – – – – (0.9) (0.9)Dividends – – – – – – (22.0) (22.0)Balance at 31 December 2008 3.3 83.0 1.1 2.6 0.3 3.0 55.6 148.9* Included within retained earnings on the face of the Statement of Financial Position is tax on items taken directly to equity (Note 12), share-based payments reserve and retainedearnings as disclosed above.

Savills plcReport and Accounts 2009Consolidated and Company statements of cash flowsfor the year ended 31 December 200953NotesYear ended2009£mGroupYear ended2008£mYear ended2009£mCash flows from operating activitiesCash generated from operations 32 46.2 14.1 1.5 2.7Interest received 2.5 4.8 2.2 3.7Interest paid (2.2) (3.4) (0.1) (0.1)Income tax (paid)/received (6.8) (21.0) 3.8 1.1Net cash generated from/(used in) operating activities 39.7 (5.5) 7.4 7.4Cash flows from investing activitiesCash disposed on sale of subsidiary, net of sale proceeds – (0.4) – –Proceeds from sale of property, plant and equipment 0.5 0.2 – –Proceeds from sale of associates, joint ventures andavailable-for-sale investments 9.2 11.7 – –Dividends received 1.2 0.8 – –Net loans to associates, joint ventures and subsidiaries 0.1 2.0 3.3 (3.9)Acquisition of subsidiaries, net of cash acquired 17(e) (7.2) (10.1) – –Deferred consideration paid in relation to prior year acquisitions (0.8) – – –Purchase of property, plant and equipment 16 (3.2) (8.5) (0.3) (0.5)Purchase of intangible assets 15 (1.4) (1.3) (0.7) (0.5)Purchase of investment in associates, joint ventures andavailable-for-sale investments (1.0) (3.5) (0.2) –Net cash (used in)/generated from investing activities (2.6) (9.1) 2.1 (4.9)Cash flows from financing activitiesProceeds from borrowings 20.0 25.0 – 25.0Purchase of own shares for Employee Benefit Trust 28 (4.7) – – –Contribution to Employee Benefit Trust – – – (0.9)Repayments of borrowings (31.4) (35.9) – (2.0)Dividends paid 28 (8.5) (25.1) (7.4) (22.0)Net cash (used in)/generated from financing activities (24.6) (36.0) (7.4) 0.1Net increase/(decrease) in cash, cash equivalents andbank overdrafts 12.5 (50.6) 2.1 2.6Cash, cash equivalents and bank overdrafts at beginningof the year 75.3 110.4 17.1 14.5Effect of exchange rate fluctuations on cash held (6.9) 15.5 – –Cash, cash equivalents and bank overdrafts at endof the year 20 80.9 75.3 19.2 17.1CompanyYear ended2008£mOur results

54Notes to the financial statementsYear ended 31 December 2009Savills plcReport and Accounts 20091. General informationSavills plc (the ‘Company’) and itssubsidiaries (together the ‘Group’) is aleading international property advisorygroup. The Group operates through anetwork of offices in the UK, Europe, AsiaPacific and the US. Savills is listed on theLondon Stock Exchange and employs19,948 staff worldwide.The Company is a public limited companyincorporated and domiciled in England andWales. The address of its registered office is20 Grosvenor Hill, Berkeley Square,London W1K 3HQ.These consolidated financial statementswere approved for issue by the Board ofDirectors on 17 March 2010.2. Accounting policiesThe principal accounting policies appliedin the preparation of these consolidatedfinancial statements are set out below.These policies have been consistentlyapplied to all the years presented, unlessotherwise stated, and are also applicableto the parent Company.Basis of preparationThese financial statements have beenprepared in accordance with InternationalFinancial Reporting Standards (IFRS) andIFRS interpretations as adopted by theEuropean Union and with those parts ofthe Companies Act 2006 applicable tocompanies reporting under IFRS.The financial statements have beenprepared under the historical costconvention, as modified to include therevaluation of available-for-sale financialassets to equity and financial liabilities(including derivative instruments) at fairvalue through the income statement.The preparation of financial statements inconformity with IFRS requires the use ofcertain critical accounting estimates andfor management to exercise judgementin the process of applying the Group’saccounting policies. The areas involving ahigher degree of judgement or complexity,or areas where assumptions and estimatesare significant to the consolidated financialstatements are disclosed in Note 4.ConsolidationThe consolidated accounts include theaccounts of the Company and itssubsidiary undertakings, together with theGroup’s share of results of its associatesand joint ventures.SubsidiariesA subsidiary is an entity controlled by theGroup, where control is the power togovern the financial and operating policiesgenerally accompanying a shareholdingof more than half of the voting rights.The existence and effect of potential votingrights that are currently exercisable andconvertible are considered when assessingwhether the Group controls another entity.The acquisition of subsidiaries is accountedfor using the purchase method. The resultsof subsidiary undertakings acquired duringthe period are included from the dateof acquisition. For the purpose ofconsolidation, the purchase considerationis allocated between the underlying netassets acquired, including contingentliabilities and intangible assets other thangoodwill, on the basis of their fair value.Excess costs of acquisition over fair valueof the Group’s share of identifiable netassets acquired are recorded as goodwill.The results of subsidiary undertakings thathave been sold during the year are includedup to date of disposal. The profit or loss iscalculated by reference to the net assetvalue at the date of disposal, adjusted forpurchased goodwill previously included onthe balance sheet and foreign exchangereserve balances on retranslation.Inter-company transactions, balances andunrealised gains arising between Groupcompanies are eliminated in preparingthe consolidated financial statements.Accounting policies of subsidiaries havebeen changed where necessary to ensureconsistency with the policies adopted bythe Group.Transactions with minority interestsThe Group applies a policy of treatingtransactions with minority interests astransactions with parties external to theGroup. Disposals to minority interests resultin gains and losses for the Group thatare recorded in the income statement.Purchases from minority interests mayresult in goodwill, being any differencebetween consideration paid and therelevant share acquired of the carryingvalue of net assets of the subsidiary.AssociatesAssociates are all entities over whichthe Group has significant influence butnot control, generally accompanying ashareholding of between 20% and 50% ofthe voting rights. Investments in associatesare accounted for using the equity methodand are initially recognised at cost.The Group’s investment in associatesincludes goodwill (net of any accumulatedimpairment loss) identified on acquisition(see Note 17(a)).The Group’s share of its associates’ postacquisitionprofits or losses is recognised inthe income statement and its share of postacquisitionmovements in reserves isrecognised in reserves. The cumulativepost-acquisition movements are adjustedagainst the carrying amount of theinvestment.Accounting policies of associates havebeen aligned to ensure consistency withthe policies adopted by the Group. Gainsand losses on dilution of the Group’s shareof equity in associates are recognised in theincome statement.Joint venturesA joint venture is a contractual arrangementwhereby two or more parties undertakean economic activity that is subject tojoint control, which exists only when thestrategic financial and operating decisionsrelating to the activity require theunanimous consent of the venturers.The Group’s joint ventures are accountedfor using the equity method.Segment reportingOperating segments are reported ina manner consistent with the internalreporting provided to the chief operatingdecision maker. The chief operatingdecision maker, who is responsible forallocating resources and assessingperformance of the operating segments,has been identified as the Group ExecutiveBoard.A business segment is a group of assetsand operations engaged in providingproducts or services that are subject torisks and returns that are different fromthose of other business segments.A geographical segment is engagedin providing products or services withina particular economic environment that issubject to risks and returns that are differentfrom those of segments operating in othereconomic environments.As the Group is strongly affected by bothdifferences in the types of services itprovides and the geographical areas inwhich it operates, the matrix approachof disclosing both the business andgeographical segments formats is used.Revenues and expenses are allocated tosegments on the basis that they are directlyattributable or the relevant portion can beallocated on a reasonable basis.

Savills plcReport and Accounts 2009 552. Accounting policies continuedExceptional itemsExceptional items are disclosed anddescribed separately in the financialstatements where it is necessary to do soto provide further understanding of thefinancial performance of the Group.They are material items of income orexpense that have been shown separatelyin the notes to the accounts due to thesignificance of their nature or amount.Foreign currency translation− Functional and presentation currencyItems included in the financial statements ofeach of the Group’s entities are measuredusing the currency of the primary economicenvironment in which the entity operates(‘the functional currency’). The consolidatedfinancial statements are presented inSterling, which is also the Company’sfunctional and presentation currency.− Transactions and balancesForeign currency transactions aretranslated into the functional currency usingthe exchange rates prevailing at the datesof the transactions. Foreign exchange gainsand losses resulting from the settlement ofsuch transactions and from the translationat year-end exchange rates of monetaryassets and liabilities denominated in foreigncurrencies are recognised in the incomestatement.Translation differences on non-monetaryfinancial assets and liabilities are reportedas part of the fair value gain or loss andare recognised in the income statement.Non-monetary items carried at historicalcost are reported using the exchange rateat the date of the transaction.The differences between retained profitsof foreign subsidiaries and associatedundertakings translated at average andclosing rates of exchange are taken toreserves, as are differences arising on theretranslation of foreign net assets to Sterlingat the end of the year (using closing ratesof exchange). Any differences that havearisen since 1 January 2004 are presentedas a separate component of equity.As permitted under IFRS1, any differencesprior to that date are not included in thisseparate component of equity.When a foreign operation is sold, exchangedifferences that were recorded in equity arerecognised in the income statement as partof the gain or loss on sale. Goodwill and fairvalue adjustments arising on the acquisitionof a foreign entity are treated as assets andliabilities of the foreign entity and translatedat the closing rate.Property, plant and equipmentProperty, plant and equipment is statedat historical cost less accumulateddepreciation and impairment. Historicalcost includes expenditure directlyattributable to acquisition. Subsequentcosts are included in the assets carryingamount or recognised as a separate asset,as appropriate, only when it is probable thatthe future economic benefits associatedwith the item will flow to the Group and thecost of the item can be measured reliably.Provision for depreciation is made at ratescalculated on a straight-line basis to writeoffthe assets over their estimated usefullives as follows:Freehold propertyLeasehold property(less than 50 years)Furniture and officeequipmentMotor vehiclesComputer equipment50 yearsoverunexpiredterm of lease3 – 6 years3 – 5 years3 yearsUseful lives are reviewed and adjusted ifappropriate, at each balance sheet date.An asset’s carrying amount is written downimmediately to its recoverable amount if theasset’s carrying amount is greater than itsestimated recoverable amount.GoodwillGoodwill represents the excess of the costof acquisition of a subsidiary or associateover the Group’s share of the fair value ofidentifiable net assets acquired.In respect of associates, goodwill isincluded in the carrying value of theinvestment. Goodwill arising on acquisitionis capitalised and subject to annualimpairment reviews. Goodwill is stated atcost less accumulated impairment losses.Separately recognised goodwill is testedannually for impairment and carried at costless accumulated impairment losses.Impairment losses on goodwill are notreversed. Gains and losses on the disposalof an entity include the carrying amount ofgoodwill relating to the entity sold.Goodwill is allocated to cash-generatingunits for the purpose of impairment testing.The allocation is made to those cashgeneratingunits or groups of cashgeneratingunits that are expected tobenefit from the business combinationin which the goodwill arose. The Groupallocates goodwill to each businesssegment in the geographical region inwhich it operates (Note 15).Intangible assets other than goodwillIntangible assets acquired as part ofbusiness combinations and incrementalcontract costs are valued at fair value onacquisition and amortised over the usefullife. Fair value on acquisition is determinedby third-party valuations where theacquisition is significant.Acquired computer software licencesare capitalised on the basis of the costsincurred to acquire and bring to use thespecific software. Costs associated withdeveloping or maintaining computersoftware programmes are recognised asan expense as incurred.Measurement subsequent to initialrecognition is at fair value less accumulatedamortisation and impairment.Fair value is determined by impairmenttesting where an impairment loss isrecognised to the extent that the carryingvalue exceeds the higher of the asset’s fairvalue less cost to sell and its value-in-use.Amortisation charges are spread on astraight-line basis over the period of theassets’ estimated useful lives as follows:Computer software 3 yearsProperty managementcontracts2 – 10 yearsIncremental contract costs 10 yearsBusiness and customerrelationships6 – 10 yearsBrands5 yearsOur results

56Notes to the financial statementscontinuedSavills plcReport and Accounts 20092. Accounting policies continuedImpairment of non-financial assetsAssets that have indefinite useful lives arenot subject to amortisation and are testedannually for impairment. Assets that aresubject to amortisation are reviewed forimpairment whenever an indicator ofimpairment exists. An impairment loss isrecognised to the extent that the carryingvalue exceeds the higher of the asset’s fairvalue less cost to sell and its value-in-use.For the purposes of assessing impairment,assets are grouped at the lowest levels forwhich there are separately identifiable cashflows (cash-generating units). Where it isnot possible to estimate the recoverableamount of an individual asset, the Groupestimates the recoverable amount of thecash-generating unit to which the assetbelongs.Value-in-use is determined using thediscounted cash flow method, with anappropriate discount rate to reflect marketrates and specific risks associated withthe asset. If the recoverable amount isestimated to be less than its carryingamount, an impairment loss is recognisedimmediately in the income statement.Financial instrumentsFinancial assets and liabilities arerecognised on the Group’s balance sheetat fair value when the Group becomesparty to the contractual provisions of theinstrument. Subsequent measurementdepends on the classification and isdiscussed below:InvestmentsAvailable-for-sale investments are stated atfair value, with changes in fair value beingrecognised directly in equity. When suchinvestments are disposed or becomeimpaired, the accumulated gains andlosses, previously recognised in equity,are recognised in the income statement.Investments in subsidiaries held by theCompany are held at cost, less anyprovision for impairment.Trade receivablesTrade receivables are recognised initiallyat fair value and subsequently measuredat amortised cost less provision forimpairment. Receivables are discountedwhere the time value of money is material.A provision for impairment of tradereceivables is established when there isobjective evidence that the Group will notbe able to collect all amounts dueaccording to the original terms of thereceivables. Significant financial difficulties ofthe debtor, probability that the debtor willenter bankruptcy or financial reorganisation,and default or delinquency in payments areconsidered indicators that the tradereceivable is impaired. The amount of theprovision is the difference between theasset’s carrying amount and the presentvalue of estimated future cash flows,discounted at the original effectiveinterest rate.Cash and cash equivalentsCash and cash equivalents include cashin hand and deposits held on call withbanks, together with other short-term highlyliquid investments with original maturitiesof three months or less and workingcapital overdrafts, which are subject to aninsignificant risk of changes in value.Bank borrowingsInterest-bearing bank loans and overdraftsare initially measured at fair value, netof transaction costs incurred, andsubsequently measured at amortised costusing the effective interest rate method.Trade payablesTrade payables are initially measured atfair value and subsequently measured atamortised cost, using the effective interestrate method.Derivative financial instruments andhedgingDerivatives are initially recognised at fairvalue on the date a derivative contractis entered into and are subsequentlyremeasured at fair value. The methodof recognising the resulting gain or lossdepends on whether the derivative isdesignated as a hedging instrument and ifso, the nature of the item being hedged.Certain derivatives do not qualify for hedgeaccounting. In these cases, changes in thefair value of all derivative instruments arerecognised immediately in the incomestatement.Gains and losses relating to the effectiveportion of hedges of net investments inforeign operations are recognised in equity.Gains or losses relating to the ineffectiveportion are recognised immediately in theincome statement. Gains and lossesaccumulated in equity are included in theincome statement when the foreignoperation is partially disposed or sold.Share capitalOrdinary shares are classified as equity.Incremental costs directly attributable to theissue of new shares or options are shownin equity as a deduction, net of tax, fromthe proceeds. When share capital isrepurchased, the amount of considerationpaid, including directly attributable costs,is recognised as a charge to equity.Repurchased shares which are notcancelled, or shares purchased for theEmployee Share Ownership Trusts, areclassified as treasury shares and presentedas a deduction from total equity.TaxationTaxation is that chargeable on the profits forthe period, together with deferred taxation.The current income tax charge is calculatedon the basis of the tax laws enacted at thebalance sheet date in the countries wherethe Group operate and generate taxableincome. Where applicable tax regulationsare subject to interpretation, provisions areestablished where appropriate on the basisof amounts expected to be paid.Deferred income tax is provided in fullusing the liability method, on temporarydifferences between the carrying amount ofassets and liabilities for financial reportingpurposes and the amount used for the taxbase. Deferred income tax is providedon temporary differences arising oninvestments in subsidiaries and associates,except where the timing of the reversal ofthe temporary difference is controlled bythe Group and it is probable that it will notreverse in the foreseeable future.A deferred income tax asset is recognisedonly to the extent that it is probable thatfuture taxable profits will be availableagainst which the asset can be utilised.Deferred income tax assets and liabilitiesare not discounted. Deferred income tax isdetermined using the tax rates that havebeen enacted or substantially enacted bythe balance sheet date and are expected toapply when the related deferred tax asset isrealised or deferred tax liability is settled.Income tax and deferred tax is recognisedin the income statement except to theextent that it relates to items recogniseddirectly in equity, in which case it isrecognised in equity.

Savills plcReport and Accounts 2009 572. Accounting policies continuedPension obligationsThe Group has both defined benefit anddefined contribution plans. A definedcontribution plan is a pension plan underwhich the Group pays fixed contributionsinto a separate entity. The Group has nolegal or constructive obligations to payfurther contributions if the fund does nothold sufficient assets to pay all employeesthe benefits relating to employee service inthe current and prior periods. A definedbenefit plan is a pension plan that definesan amount of pension benefit that anemployee will receive on retirement, usuallydependent on one or more factors, such asage, years of service and compensation.The liability recognised in the balance sheetin respect of defined benefit pension plansis the present value of the defined benefitobligation at the balance sheet date lessthe fair value of plan assets. The definedbenefit obligation is calculated annually byindependent actuaries using the projectedunit credit method. The present value of thedefined benefit obligation is determinedby discounting the estimated future cashoutflows.The defined benefit scheme chargeconsists of current service costs, interestcosts, expected return on plan assets,past service costs and the impact of anysettlements or curtailments and is chargedas an expense as they fall due.All actuarial gains and losses arerecognised immediately in the statementof comprehensive income as they arise.The Group also operates a definedcontribution group personal pension planfor new entrants and a number of definedcontribution individual pension plans.Contributions in respect of definedcontribution pension schemes are chargedto the income statement when theyare payable. The Group has no furtherpayment obligations once the contributionshave been paid. Prepaid contributions arerecognised as an asset to the extent thata cash refund or a reduction in the futurepayments is available.The net defined benefit cost is allocatedamongst participating Group subsidiarieson the basis of pensionable salaries.Share-based paymentsThe Group operates equity-settled sharebasedcompensation plans. The fairvalue of the employee services receivedin exchange for the grant of the options isrecognised as an expense.Equity-settled share-based paymentsgranted after 7 November 2002 thathad not vested as of 1 January 2005 aremeasured at fair value at the date of grant.The fair value determined at the grant dateof the equity-settled share-based paymentsis expensed on a straight-line basis overthe vesting period, based on the Group’sestimate of shares that will eventually vest.The fair value of equity-settled share-basedpayments is measured by the use ofActuarial Binomial option pricing model.At each balance sheet date, the Grouprevises its estimates of the number ofoptions that are expected to becomeexercisable. It recognises the impact of therevision of original estimates, if any, in theincome statement, and a correspondingadjustment to equity over the remainingvesting period. The proceeds received netof any directly attributable transaction costsare credited to share capital (nominal value)and share premium when the options areexercised.Employee Benefit TrustThe Company has established The Savillsplc 1992 Employee Benefit Trust (the EBT),the purposes of which are to grant awardsto employees, to acquire shares in theCompany pursuant to the Savills DeferredShare Bonus Plan and the Savills DeferredShare Plan and to hold shares in theCompany for subsequent transfer toemployees on the vesting of the awardsgranted under the schemes. The assetsand liabilities of the EBT are included inthe Group statement of financial position.Investments in the Group’s own shares areshown as a deduction from equity.ProvisionsProvisions are recognised when the Grouphas a present legal or constructiveobligation as a result of a past event and itis probable that the Group will be requiredto settle that obligation and the amounthas been reliably estimated. Provisions aremeasured at the Directors’ best estimateof the expenditure required to settle theobligation at the balance sheet date andare discounted to present value where theeffect is material.RevenueRevenue comprises the fair value of theconsideration received or receivable for theprovision of services in the ordinary courseof the Group’s activities. Revenue is shownnet of value-added tax and amounts due tothird parties and after elimination of revenuewithin the Group.− Residential transactional feesGenerally, where contracts areunconditional, revenue is recognised onexchange of contracts however, onmore complex contracts, revenue willbe recognised on the date of completion.On multi-unit developments, revenue isrecognised on a staged basis,commencing when the underlyingcontracts are exchanged.− Commercial transactional feesGenerally, revenue is recognised on thedate of completion or when unconditionalcontracts have been exchanged.− Property consultancyRevenue in respect of property consultancyrepresents commissions and feesrecognised on a time basis, fixed fee orpercentage of completion.− Property and facilities managementRevenue represents fees earned formanaging properties and providing facilitiesand is generally recognised in the periodthe services are provided using a straightlinebasis over the term of the contract.− Fund managementRevenue represents commissions andfees receivable, net of marketing costs inaccordance with the relevant feeagreements.Annual management fees are recognised,gross of costs, in the period to which theservice has been provided, in accordancewith the contracted fee agreements.Transaction fees are recognised on thedate of completion of a purchase or saletransaction. Distribution fees are recognisedon the completion of a signed subscriptionagreement and performance fees arerecognised when approved by the fund.− Financial servicesInsurance commission revenue isrecognised when the insurance policy soldis in effect and the amount of commissionearned is determinable. Indemnitycommission is recognised when the policysold is in effect. Mortgage commission isrecognised on completion.Our results

58Notes to the financial statementscontinuedSavills plcReport and Accounts 20092. Accounting policies continuedRevenue continued− Work in progressWork in progress generally relates toconsultancy revenue and is stated at thelower of cost and net realisable value. Costincludes an appropriate proportion ofoverheads.− Interest incomeInterest income is recognised on a timeproportionbasis using the effective interestmethod.− Dividend incomeDividend income is recognised when theright to receive payment is established.− Other incomeOther income includes interest anddividend income on available-for-saleinvestments plus fair value gains and losseson assets at fair value through profit or loss.Accounting for leasesAssets financed by leasing agreementswhich give rights approximating toownership (finance leases) are capitalisedin property, plant and equipment.Finance lease assets are initially recognisedat an amount equal to the lower of their fairvalue and the present value of the minimumlease payments at inception of the lease,then depreciated over the lower of the leaselife or the estimated useful lives on thesame basis as owned assets. The capitalelements of future obligations under financeleases are included as liabilities in thebalance sheet. Leasing payments comprisecapital and finance elements and thefinance element is charged to theincome statement.The annual payments under all other leaseagreements (operating leases) are chargedto the income statement on a straight-linebasis over the lease term. Benefits receivedand receivable as an incentive to enter intothe operating lease are also spread on astraight-line basis over the lease term.A lease is classified as onerous wherethe unavoidable costs of meeting theobligations under the contract exceed theeconomic benefits expected to be receivedunder it.DividendsFinal dividends are recognised as a liabilityin the Group’s financial statements in theperiod in which they are approved by theCompany’s shareholders. Interim dividendsare recognised when paid.Standards and amendments effectivein 2009The Group adopted the following new andamended standards as of 1 January 2009:− IFRS 8, ‘Operating segments’. IFRS 8replaces IAS 14 'Segment reporting'.The new standard requires a‘management approach’, under whichsegment information is presented onthe same basis as that used for internalreporting purposes. This has resulted inusing the profit measure of underlyingprofit before tax instead of reported profitbefore tax as presented in managementreporting.− IFRS 7 ‘Financial instruments –Disclosures’ (amendment).The amendment requires enhanceddisclosures about fair valuemeasurement and liquidity risk.In particular, the amendment requiresdisclosure of fair value measurementsby level of a fair value measurementhierarchy.− IAS 1 (revised). ‘Presentation of financialstatements’. The revised standardprohibits the presentation of items ofincome and expenses (that is, ‘nonownerchanges in equity’) in thestatement of changes in equity, requiring‘non-owner changes in equity’ to bepresented separately from ownerchanges in equity in a statement ofcomprehensive income. As a result theGroup presents in the consolidatedstatement of changes in equity all ownerchanges in equity, whereas all nonownerchanges in equity are presentedin the consolidated statement ofcomprehensive income. Comparativeinformation has been re-presented sothat it also is in conformity with therevised standard.- IFRS 2 (amendment), ‘Share-basedpayment’ clarifies that vesting conditionsare service conditions and performanceconditions only. Other features of ashare-based payment are not vestingconditions. These features would need tobe included in the grant date fair value fortransactions with employees and othersproviding similar services; they would notimpact the number of awards expectedto vest or valuation there of subsequentto grant date. All cancellations, whetherby the entity or by other parties, shouldreceive the same accounting treatment.The Group has changed the accountingfor Sharesave Schemes with regardsto cancellations and withdrawals.The amendment does not have amaterial impact on the Group’s financialstatements.New amended standards not relevantto the GroupIAS 23 (Amendment), ‘Borrowing costs’ –this amendment is not relevant to theGroup as it has no qualifying assets anddoes not capitalise any borrowing costs.Other standards, amendments andinterpretations effective in 2009 and notdiscussed above are not relevant tothe Group.Standards, amendments andinterpretations to standards that are notyet effective and have not been earlyadopted by the GroupThe following standards and amendmentsto published standards are mandatory foraccounting periods beginning on or after1 January 2010, and have not been earlyadopted:− IFRIC 17, ‘Distribution of non-cashassets to owners’ (effective on or after1 July 2009). This interpretationprovides guidance on accounting forarrangements whereby an entitydistributes non-cash assets toshareholders either as a distribution ofreserves or as dividends. IFRS 5 has alsobeen amended to require that assetsare classified as held for distribution onlywhen they are available for distributionin their present condition and thedistribution is highly probable. The Groupwill apply IFRIC 17 from 1 January 2010.It is not expected to have a materialimpact on the Group’s financialstatements.− IAS 27 (revised), ‘Consolidated andseparate financial statements’, (effectivefrom 1 July 2009). The revised standardrequires the effects of all transactionswith non-controlling interests to berecorded in equity if there is no changein control and these transactions will nolonger result in goodwill or gains andlosses. The standard also specifiesthe accounting when control is lost.Any remaining interest in the entity isremeasured to fair value, and a gainor loss is recognised in profit or loss.The Group will apply IAS 27 (revised)prospectively to transactions with noncontrollinginterests from 1 January 2010.− IFRS 3 (revised), ‘Business combinations’(effective from 1 July 2009).The revised standard continues to applythe acquisition method to businesscombinations, with some significantchanges. For example, all payments topurchase a business are to be recordedat fair value at acquisition date, withcontingent payments classified as debtand subsequently re-measured throughthe income statement.

Savills plcReport and Accounts 2009 592. Accounting policies continuedStandards, amendments andinterpretations to standards that are notyet effective and have not been earlyadopted by the Group continuedThere is a choice on an acquisition-byacquisitionbasis to measure the noncontrollinginterest in the acquiree at fairvale or at the non-controlling interest’sproportionate share of the acquiree’snet assets. All acquisition-related costsshould be expensed. The Group willapply IFRS 3 (revised) prospectively toall business combinations from1 January 2010.− IAS 38 (amendment), ‘Intangible Assets’.The Group will apply IAS 38(amendment) from the date IFRS 3(revised) is adopted. The amendmentclarifies guidance in measuring the fairvalue of an intangible asset acquired in abusiness combination and permits thegrouping of intangible assets as a singleasset if each asset has similar usefuleconomic lives. The amendment will notresult in a material impact on the Group’sfinancial statements.− IFRS 5 (amendment), ‘Measurementof non-current assets (or disposalgroups) classified as held-for-sale’.The amendment provides clarificationthat IFRS 5 specifies the disclosuresrequired in respect of non-current assets(or disposal groups) classified as heldfor sale or discontinued operations.The Group will apply IFRS 5(amendment) from 1 January 2010. It isnot expected to have a material impacton the Group’s financial statements.− IAS 1 (amendment), ‘Presentation offinancial statements’. The amendmentprovides clarification that the potentialsettlement of a liability by the issue ofequity is not relevant to its classificationas current or non current. By amendingthe definition of current liability, theamendment permits a liability to beclassified as non-current (provided thatthe entity has an unconditional right todefer settlement by transfer of cash orother assets for at least 12 months afterthe accounting period) notwithstandingthe fact that the entity could be requiredby the counterparty to settle in shares atany time. The Group will apply IAS 1(amendment) from 1 January 2010. It isnot expected to have a material impacton the Group’s financial statements.− IFRS 2 (amendments), ‘Group cashsettledand share-based paymenttransactions’. In addition to incorporatingIFRIC 8, ‘Scope of IFRS 2’, and IFRIC11, ‘IFRS 2 – Group and treasury sharetransactions’, the amendments expandon the guidance in IFRIC 11 to addressthe classification of group arrangementsthat were not covered by thatinterpretation. The new guidance is notexpected to have a material impact onthe Group’s financial statements.Other standards, amendments andinterpretations not yet effective and notdiscussed above are not relevant tothe Group.3. Financial risk managementFinancial risk factorsThe Group’s activities expose it to a varietyof financial risks. The Group has in place arisk management programme that seeksto limit the adverse effects on the financialperformance of the Group. Occasionally,the Group uses financial instruments tomanage foreign currency and interestrate risk.The treasury function is responsible forimplementing risk management policiesapplied by the Group and has a policy andprocedures manual that sets out specificguidelines on financial risks and the use offinancial instruments to manage these.Foreign exchange riskThe Group operates internationally and isexposed to foreign exchange risks primarilywith respect to the Euro, US dollar andHong Kong dollar. Foreign exchange riskarises from future commercial transactions,recognised assets and liabilities andnet investments in foreign operations.The Group finances some overseasinvestments through the use of foreigncurrency borrowings. The Group does notactively seek to hedge risks arising fromforeign currency translations due to theirnon-cash nature and the high costsassociated with such hedging; howeverwhen there is a material committed foreigncurrency exposure the foreign exchangerisk will be hedged.For the year ended 31 December 2009,if the average currency conversion ratesfor the year had changed with all othervariables held constant, the Group post taxprofit for the year would have increased ordecreased as shown below:Movement of currency against Sterling£m –20% – 10% +10% +20%For the year ended 31 December 2009Estimated impact on post tax profitEuro 1.2 0.5 (0.4) (0.8)Hong Kongdollar (3.7) (1.6) 1.3 2.5US dollar 2.5 1.1 (0.9) (1.7)Estimated impact on components of equityEuro 5.9 2.6 (2.2) (3.9)Hong Kongdollar (19.6) (8.7) 7.1 13.1US dollar 5.6 2.5 (2.0) (3.7)For the year ended 31 December 2008Estimated impact on post tax lossEuro 0.6 0.3 (0.2) (0.4)Hong Kongdollar (2.1) (0.9) 0.8 1.4US dollar 1.7 0.7 (0.6) (1.1)Estimated impact on components of equityEuro (0.1) (0.1) 0.1 0.1Hong Kongdollar (23.3) (10.4) 8.5 15.6US dollar 1.7 0.7 (0.6) (1.1)Price riskThe Group is not materially exposed toequity securities price risk because listedinvestments held on the balance sheet arenot significant. The Group is not exposed tocommodity price risk.Interest rate riskThe Group has both interest-bearingassets and liabilities. The Group finances itsoperations through a mixture of retainedprofits and bank borrowings, at both fixedand floating interest rates. Borrowingsissued at variable rates expose the Groupcash flow to interest rate risk, which ispartially offset by cash held at variable rates.Borrowings issued at fixed rates expose theGroup to fair value interest rate risk. Grouppolicy is to maintain 70% of its borrowingsin fixed rate instruments.Our results

60Notes to the financial statementscontinuedSavills plcReport and Accounts 20093. Financial risk managementcontinuedInterest rate risk continuedFor the year ended 31 December 2009,if the average interest rate for the yearhad changed with all other variables heldconstant, the Group post tax profit for theyear would have increased or decreasedas shown below:£m+/–0.50%Movement of interest rates+/–1.00%+/–1.50%+/–2.00%For the year ended 31 December 2009Estimated impacton post tax profit 0.0 0.0 0.0 0.1For the year ended 31 December 2008Estimated impacton post tax loss 0.1 0.3 0.4 0.6Credit riskCredit risk arises from cash and cashequivalents, derivative financial instrumentsand deposits with banks and financialinstitutions, as well as credit exposures toclients, including outstanding receivablesand committed transactions. The Grouphas policies that require appropriate creditchecks on potential customers beforebusiness commences. A risk controlframework is used to assess the creditquality of clients, taking into accountfinancial position, past experience andother factors.Individual risk limits for banks and financialinstitutions are set based on external ratingsand in accordance with limits set by theBoard. The utilisation of credit limits isregularly monitored.As at the balance sheet date, no significantcredit risk existed in relation to bankingcounterparties. No credit limits wereexceeded during the reporting period,and management does not expect anylosses from non-performance by thesecounterparties. There were no othersignificant receivables or individualtrade receivable balances as at31 December 2009.The table below shows Group cashbalances split by counterparty ratings at thebalance sheet date:Counterparty rating (provided by S&P)2009Balance£m2008Balance£mAAA 5.1 5.8AA 11.8 1.5AA– 23.1 19.4A+ 23.5 10.8A 5.4 27.6A– 5.6 6.4BBB+ or below 7.1 3.8Total 81.6 75.3Liquidity riskThe Group maintains appropriatecommitted facilities to ensure the Grouphas sufficient funds available for operationsand expansion. The Group prepares anannual funding plan approved by the Boardwhich sets out the Group’s expectedfinancing requirements for the next12 months.Management monitors rolling forecasts ofthe Group’s liquidity reserve (comprisingundrawn borrowing facilities (Note 23) andcash and cash equivalents (Note 20)) onthe basis of expected cash flow. This iscarried out at local level in the operatingcompanies of the Group in accordancewith Group practice as well as on a Groupconsolidated basis.The table below analyses the Group’sfinancial liabilities and net-settled derivativefinancial liabilities into relevant maturitygroupings based on the remaining periodfrom the balance sheet date to thecontractual maturity date. The amountsdisclosed in the table are the contractualundiscounted cash flows. Balances duewithin 12 months equal their carryingbalances, as the impact of discounting isnot significant.£mLess than 1yearBetween 1and 2 yearsBetween 2and 5 yearsAs at 31 December 2009Borrowings 5.6 4.9 3.8Loan notes 0.7 0.3 –Derivativefinancialinstruments – – 0.7Trade and otherpayables 141.6 10.8 1.1147.9 16.0 5.6£mLess than1 yearBetween1 and2 yearsBetween2 and5 yearsAs at 31 December 2008Borrowings 5.6 5.7 9.7Loan notes 7.6 1.1 –Derivativefinancialinstruments – – 1.2Trade and otherpayables 145.2 7.4 9.4158.4 14.2 20.3Capital risk managementThe Group’s objectives when managingcapital are:− to safeguard the Group’s ability toprovide returns for shareholders andbenefits for other stakeholders; and− to maintain an optimal capital structure toreduce the cost of capital.Savills plc is not subject to any externallyimposed capital requirements, withthe exception of our FSA regulatedentities, which complied with all capitalrequirements during the year ended31 December 2009.In order to maintain an optimal capitalstructure, the Group may adjust theamount of dividends paid to shareholders,return capital to shareholders, issue newshares or sell assets to reduce debt.The Group’s policy is to borrow centrallyif required to meet anticipated fundingrequirements. These borrowings, togetherwith cash generated from operations, arethen on-lent or contributed as equity tocertain subsidiaries. The Board of Directorsmonitor a number of debt measuresincluding gross cash by location; grossdebt by location; cash subject torestrictions; total debt servicing cost tooperating profit; gross borrowings as apercentage of EBITDA (earnings beforeinterest, tax, depreciation and amortisation);and forecast headroom against availablefacilities. These internal measures indicatethe levels of debt that the Group has andare closely monitored to ensure compliancewith banking covenants and that the Grouphas sufficient unused facilities.

Savills plcReport and Accounts 2009 613. Financial risk managementcontinuedFair value estimationThe following table presents the Group’sassets and liabilities that are measured atfair value at 31 December 2009:£m Level 1 Level 2 Level 3 TotalAssetsAvailable-for-saleinvestments– Listed 0.2 – – 0.2– Unlisted – 13.8 – 13.8Derivativefinancialinstruments – 0.1 – 0.1Total assets 0.2 13.9 – 14.1LiabilitiesDerivativefinancialinstruments – 0.7 – 0.7Total liabilities – 0.7 – 0.7The fair value of listed available-for-saleinvestments is based on quoted marketprices at the balance sheet date.The quoted market price is the currentbid price. These instruments are includedin level 1.The fair value of unlisted available-for-saleinvestments is determined using valuationtechniques using observable market datawhere available and rely as little as possibleon entity estimates. The fair value ofinvestment funds is based on underlyingasset values determined by the FundManagers audited annual financialstatements. Fair value of other unlistedinvestments is based on price earningsmodels. These instruments are includedin level 2.If one or more of the significant inputs isnot based on observable market data,the instrument is included in level 3.4. Critical accounting estimates andmanagement judgementsCritical accounting estimates andassumptionsEstimates and judgements are continuallyevaluated and are based on historicalexperience, current market conditionsand other factors including expectationsof future events that are believed to bereasonable under the circumstances.Actual results may differ from theseestimates. Changes in accountingestimates may be necessary if there arechanges in circumstances on which theestimate was based, or as a result ofnew information or more experience.The estimates and assumptions that havea significant risk of causing a materialadjustment to the carrying amounts ofassets and liabilities within the next financialyear are discussed below.Pension benefitsThe present value of the defined benefitpension obligations depends on anumber of factors that are determined onan actuarial basis using a number ofassumptions including discount rate.Any changes in these assumptions willimpact the carrying amount of pensionobligations. The Group determines theappropriate discount rate at the end ofeach year. In determining the appropriatediscount rate, the Group considers theinterest rates of high-quality corporatebonds that are denominated in thecurrency in which the benefits will bepaid and that have terms to maturityapproximating the terms of the relatedpension liability. Other key assumptions forpension obligations are based in part oncurrent market conditions. Additionalinformation is disclosed in Note 10.Income taxesThe Group is subject to income taxes innumerous jurisdictions. Judgement isrequired in determining the provision forincome taxes. There are transactions andcalculations for which the ultimate taxdetermination is uncertain. Where the finaltax outcome of these matters is differentfrom the amounts that were initiallyrecorded, such differences will impact theincome tax and deferred tax provisions inthe period in which such determinationis made.Fair value of options granted toemployeesThe Group uses the Binomial Model indetermining the fair value of options grantedto employees under the Group’s variousschemes as detailed in the RemunerationReport. Information on such assumptionsis contained in Note 27. The alteration ofthese assumptions may impact chargesto the income statement over the vestingperiod of the award.Estimated impairment of assetsThe Group tests annually whether goodwillhas suffered any impairment. All otherassets are tested for impairment wherethere are indicators of impairment.The recoverable amounts of cashgeneratingunits have been determinedbased on value-in-use calculations.The use of this method requires theestimate of future cash flows expected toarise from the continuing operation of thecash-generating unit and the choice of asuitable discount rate in order to calculatethe present value. Actual outcomes couldvary significantly from these estimates.The estimates used in these financialstatements are contained in Note 15.Valuation of intangible assets anduseful lifeThe Group has made assumptions inrelation to the potential future cash flows tobe determined from separable intangibleassets acquired as part of businesscombinations. This assessment involvesassumptions relating to potential futurerevenues, appropriate discount ratesand the useful life of such assets.These assumptions impact the incomestatement over the useful life of theintangible asset.ProvisionsThe Group and its subsidiaries are party tovarious legal claims. Provisions made withinthese financial statements are containedin Note 25(a). Additional claims could bemade which might not be covered byexisting provisions or by insurance asdetailed in Note 30.Critical judgements in applying theentity’s accounting policiesThe application of the Group’s accountingpolicies may require management to makejudgements, apart from those involvingestimates, that can affect the amountsrecognised in the consolidated financialstatements. Such judgements include thefollowing areas:Award of options and deferred sharesto employeesThe Group applies judgement in decidingthe proportion of the available bonus poolto be awarded to employees under its longtermshare-based incentive scheme.The Group’s current policy is to deductfrom the bonus pool an amount equal tothe market value of the share price on thedate of award. Under IFRS, the value ofaward is spread over the vesting periodand charged to the income statement.The charge to the income statement iscurrently lower than the market value ofshares to be awarded.Our results

62Notes to the financial statementscontinuedSavills plcReport and Accounts 20095. Segment analysisOperating segments reflect internal management reporting to the Group's chief operating decision maker, defined as the GroupExecutive Board (GEB). The operating segments are determined based on differences in the nature of their services and geographicallocation as the Group is strongly affected by both factors. The reportable operating segments derive their revenue primarily from propertyrelated services. Refer to the Group overview on pages 02 and 03 and the Segmental reviews on pages 10 to 15 for further informationon revenue sources.Operations are based in four main geographical areas. The UK is the home of the parent Company with segment operations throughoutthe region. 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, Belgium, Sweden, Italy, Irelandand Poland. America segment operations are based in New York. The sales location of the client is not materially different from thelocation where fees are received and where the segment assets are located.Within the UK, commercial and residential activities are managed separately. Other geographical areas, although largely commercialbased, also provide residential services, in particular Hong Kong, China and Singapore.All operations are continuing. The unallocated segment includes holding company costs and other expenses not directly attributable tothe operating activities of the Group’s business segments.The GEB assesses the performance of operating segments based on a measure of underlying profit before tax which adjusts reportedpre-tax profit by exceptional items, profit on disposals, share-based payments adjustment and impairment and amortisation of goodwilland intangibles (excluding software). Segmental assets and liabilities are not measured or reported to the GEB.The segment information provided to the GEB for revenue and profits for the year ended 31 December 2009 is as follows:Year ended 31 December 2009TransactionalAdvice£mConsultancy£mProperty &FacilitiesManagement£mFundManagement£mFinancialServices£mUnallocated£mRevenueUnited Kingdom – commercial 35.7 65.3 50.1 17.4 1.7 – 170.2– residential 71.3 22.8 14.5 – 9.5 – 118.1107.0 88.1 64.6 17.4 11.2 – 288.3Rest of Europe 28.3 8.8 23.0 – – – 60.1Asia Pacific 59.9 22.5 127.6 – – – 210.0America 2.3 – – – – – 2.3Total revenue 197.5 119.4 215.2 17.4 11.2 – 560.7Underlying profit/(loss) before taxUnited Kingdom – commercial 1.2 6.9 5.1 2.9 (0.9) (4.6) 10.6– residential 11.8 2.3 2.0 – (2.0) – 14.113.0 9.2 7.1 2.9 (2.9) (4.6) 24.7Rest of Europe (9.6) (0.3) (2.7) – – – (12.6)Asia Pacific 6.8 2.0 8.2 – – – 17.0America (3.9) – – – – – (3.9)Underlying profit/(loss) before tax 6.3 10.9 12.6 2.9 (2.9) (4.6) 25.2A reconciliation of underlying profit before tax to profit before tax is provided in Note 7.Inter segmental revenue is not material.Total£m

Savills plcReport and Accounts 2009 635. Segment analysis continuedYear ended 31 December 2008TransactionalAdvice£mConsultancy£mProperty &FacilitiesManagement£mFundManagement£mFinancialServices£mUnallocated£mRevenueUnited Kingdom – commercial 51.9 76.9 45.5 19.5 1.6 – 195.4– residential 64.2 24.0 14.7 – 15.8 – 118.7116.1 100.9 60.2 19.5 17.4 – 314.1Rest of Europe 34.2 11.5 21.9 – – – 67.6Asia Pacific 56.2 19.4 109.3 – – – 184.9America 1.9 – – – – – 1.9Total revenue 208.4 131.8 191.4 19.5 17.4 – 568.5Underlying profit/(loss) before taxUnited Kingdom – commercial 7.8 10.3 4.6 3.6 (0.1) (3.1) 23.1– residential 2.8 3.2 2.4 – (0.9) – 7.510.6 13.5 7.0 3.6 (1.0) (3.1) 30.6Rest of Europe (7.8) 0.8 (1.2) – – – (8.2)Asia Pacific 4.3 2.0 8.4 – – – 14.7America (3.9) – – – – – (3.9)Underlying profit/(loss) before tax 3.2 16.3 14.2 3.6 (1.0) (3.1) 33.2Total£mOur resultsSegmental assets comprise the following:Year ended 31 December 2009TransactionalAdvice£mConsultancy£mProperty &FacilitiesManagement£mFundManagement£mFinancialServices£mUnallocated£mSegmental assetsUnited Kingdom – commercial 31.5 30.5 14.0 12.1 2.2 4.0 94.3– residential 51.3 28.4 18.9 – 4.5 9.0 112.182.8 58.9 32.9 12.1 6.7 13.0 206.4Rest of Europe 41.2 3.2 12.8 – – 2.2 59.4Asia Pacific 46.2 14.8 80.2 – – 11.3 152.5America 18.7 – – – – 1.6 20.3188.9 76.9 125.9 12.1 6.7 28.1 438.6Investment in associates and jointventures 6.3 – 6.3 – – – 12.6Total assets 195.2 76.9 132.2 12.1 6.7 28.1 451.2Segmental assets include goodwill and intangible assets, plant, property and equipment, investments in joint ventures and associatesand available-for-sale investments. Derivative financial instruments and deferred tax assets are included in unallocated assets.Goodwill and intangible assets are itemised by segment in Note 15. Total non current assets located in the United Kingdom is £73.6m(2008 – £76.5m), and the total of non-current assets located in other geographical areas is £120.2m (2008 – £129.5m).Total£m

64Notes to the financial statementscontinuedSavills plcReport and Accounts 20095. Segment analysis continuedYear ended 31 December 2008TransactionalAdvice£mConsultancy£mProperty &FacilitiesManagement£mFundManagement£mSegmental assetsUnited Kingdom – commercial 34.6 27.9 9.0 16.5 2.8 5.5 96.3– residential 41.8 24.7 15.1 – 7.4 8.9 97.976.4 52.6 24.1 16.5 10.2 14.4 194.2Rest of Europe 34.4 10.1 14.3 – – 12.1 70.9Asia Pacific 54.5 15.1 85.3 – – 12.8 167.7America 27.0 – – – – 2.9 29.9192.3 77.8 123.7 16.5 10.2 42.2 462.7Investment in associates and jointventures 5.4 0.2 5.4 (0.1) – – 10.9Total assets 197.7 78.0 129.1 16.4 10.2 42.2 473.6FinancialServices£mUnallocated£mTotal£m

Savills plcReport and Accounts 2009 656(a). Operating profitOperating profit, including exceptional items, is stated after charging/(crediting):Other operating expenses include:Year to31 December2009£mGroupYear to31 December2008£m– Impairment of available-for-sale investments and financial assets at fair value through profit or loss – 8.4– Net foreign exchange gains (1.0) (0.6)– Loss on sale of property, plant and equipment 0.2 0.3– Operating lease rentals – Hire of plant and machinery 1.5 2.2– Property 21.0 20.5Other income – dividend and investment income (0.2) (0.2)Our resultsProfit/(loss) on disposals is made up as follows:Profit/(loss) on disposals – Available-for-sale investments 0.2 0.5– Joint ventures – 16.9– Associates (0.2) –Exceptional items are shown in Note 8.– 17.46(b). Income Statement of the CompanyAs permitted by Section 408 of the Companies Act 2006, the income statement of the Company is not presented as part of theseaccounts. 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 £3.1m (2008 – £61.0m).6(c). Fees payable to the Company’s auditor, PricewaterhouseCoopers LLP, and its associates:Year to31 December2009£mGroupYear to31 December2008£mAudit servicesFees payable to Company auditor for the audit of parent Company and consolidated accounts 0.2 0.2Other servicesFees payable to the Company’s auditor and its associates for other services:The audit of the Company’s subsidiaries pursuant to legislation 0.8 0.8Tax services 0.6 0.4Services relating to corporate finance transactions proposed to be entered into by the Company – 0.11.6 1.5

66Notes to the financial statementscontinuedSavills plcReport and Accounts 20097. Underlying profit before taxYear to31 December2009£mYear to31 December2008£mReported profit/(loss) before tax 13.5 (7.7)Adjustments:Exceptional items (Note 8) – 33.9Amortisation of intangibles (excluding software) (Note 15) 2.7 4.2Impairment of goodwill* (Note 15) 4.3 –Share-based payment adjustment 4.7 3.3Profit on disposal of associate, joint ventures and available-for-sale investments – (0.5)Underlying profit before tax 25.2 33.2* Impairment of goodwill and intangible assets in 2008 of £37.0m is included in Exceptional items in Note 8.The Directors regard the above adjustments necessary to give a fair picture of the underlying results of the Group for the year.The adjustment for share-based payment relates to the impact of the accounting standard for share-based compensation. The annualbonus is paid in a mixture of cash and deferred shares and the proportions can vary from one year to another. Under IFRS thedeferred 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 adding to or deducting from profit the difference between the IFRS 2 charge and theeffective value of the annual share award in order to closely match the underlying staff costs in the year with the revenue recognised inthe same period.8. Exceptional itemsExceptional items comprise the following:Year to31 December2009£mYear to31 December2008£mRedundancy costs – 0.6Impairment of goodwill and intangible assets (Note 15) – 37.0Available-for-sale investment impairment (Note 17(b))* – 6.9Diminution in value of financial asset at fair value through profit and loss* – 1.5Plant, property and equipment impairment (Note 16)* – 1.0Onerous leases (Note 25(a))* – 3.3Other* – 0.5Profit on disposal of joint venture – (16.9)Total exceptional items – 33.9* Recognised in other operating expenses on the face of the income statement.9(a). Employee benefits expense – Staff and DirectorsYear to31 December2009£mGroupYear to31 December2008£mYear to31 December2009£mCompanyYear to31 December2008£mBasic salaries and wages 227.2 231.7 5.1 5.8Incentive bonuses and commissions 81.1 79.9 1.7 2.4308.3 311.6 6.8 8.2Social security costs 26.5 25.7 0.9 0.9Other pension costs 12.6 10.7 0.3 0.3Share-based payments 9.8 10.0 0.3 0.4357.2 358.0 8.3 9.8

Savills plcReport and Accounts 2009 679(b). Staff numbersThe average number of employees (including directors) during the year was:Year to31 December2009GroupYear to31 December2008UK 3,079 3,374America 34 33Rest of Europe 731 837Asia Pacific 16,104 15,59019,948 19,834Our resultsThe average number of UK employees (including directors) during the year included 60 employed under fixed term and temporarycontracts (2008 – 35). The average number of employees of the Company was 102 (2008 – 122) who are all located in the UK.9(c). Key management compensationYear to31 December2009£mGroupYear to31 December2008£mKey management– Remuneration excluding bonuses 1.1 1.1– Bonuses 2.1 1.5– National Insurance 0.5 0.3Fees to Non-Executive Directors 0.3 0.3Total short-term employee benefits 4.0 3.2Share-based payments 0.4 0.84.4 4.0The key management of the Group for the year ended 31 December 2009 comprised Savills plc Board Directors during the year and theChairman and Chief Executive of Savills Commercial Limited. The key management of the Group for the year ended 31 December 2008comprised only Savills plc Board Directors during the year. Details of Directors’ remuneration is contained in the Remuneration report onpages 36 to 45.During the year five Executive Directors made gains totalling £0.5m on the exercise of options under the DSBP, ESOP, Sharesave and2001 Option Schemes (2008 – £0.9m).The pension annuity for the highest paid Director was £49,504 with no lump sum accrued (2008 – £46,813 with no lump sum accrued).Retirement benefits under the defined benefit scheme are accruing for three Directors and benefits are accruing under a definedcontribution scheme in Hong Kong for one Executive Director.

68Notes to the financial statementscontinuedSavills plcReport and Accounts 200910. Pension schemeDefined contribution plansThe Group operates the Savills UK Group Personal Pension Plan, a defined contribution scheme, a number of defined contributionindividual pension plans and a Mandatory Provident Fund Scheme in Hong Kong, to which it contributes. The total pension charges inrespect of these plans were £8.5m (2008 – £8.4m).Defined benefit planThe Group operates a pension scheme providing benefits based on final pensionable salary. The assets of the scheme are heldseparately from those of the Group, and invested in managed funds units. The contributions are determined by an independent qualifiedactuary 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 havethe most significant effect on the results of the valuation are those relating to the rate of return on investments pre-retirement, the rates ofincrease 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 forexpected future increases in earnings. The scheme has been closed to new joiners for pension benefits since 1 April 2000.GroupPrincipal assumptions at 31 December 2009 2008Expected return on plan assets– Equities 8.30% 7.65%– Bonds 5.30% 5.35%– Property 7.30% 6.65%– Diversified growth funds 8.00% n/a– Other 0.30% 1.85%Expected rate of salary increases 5.00% 4.80%Rate of increase to pensions in payment– accrued before 6 April 1997 3.00% 3.00%– accrued after 5 April 1997 3.60% 3.30%– 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 3.70% 3.30%Discount rate 5.60% 6.30%Inflation assumption 3.70% 3.30%

Savills plcReport and Accounts 2009 6910. Pension scheme continuedUsing post-retirement mortality assumptions, the assured life expectations on retirement at age 60 are as follows:Group2009 2008Retiring today – Male 87.1 87.1– Female 89.7 89.7Retiring in 20 years – Male 89.3 89.2– Female 91.7 91.7Sensitivity analysis of the discount rate:Change in assumptionDecrease by 0.5% p.a. (2008 – decrease by 0.5% p.a.)Impact on liabilities Increase by 12% (2008 – increase by 12%)The amounts recognised in the balance sheet are as follows:Fair value of plan assets 103.5 85.9 5.7 4.9Present value of funded obligations (141.2) (110.5) (7.8) (6.3)Deficit (37.7) (24.6) (2.1) (1.4)Related deferred tax asset 10.7 7.0 0.6 0.4Net liability (27.0) (17.6) (1.5) (1.0)2009£mGroup2008£m2009£mCompany2008£mOur resultsThe amounts recognised in the income statement:Current service cost 3.2 3.6Interest cost 7.0 6.7Expected return on plan assets (6.1) (8.0)Total included in staff costs 4.1 2.3All net actuarial gains or losses for each year are recognised in full in the year in which they are incurred in the statement ofcomprehensive income.Change in defined benefit obligation:Present value of defined benefit obligation at start of year 110.5 113.4Current service cost 3.2 3.6Interest cost 7.0 6.7Plan participants contributions 1.1 1.2Actuarial loss/(gain) 20.7 (13.6)Benefits paid (1.3) (0.8)Present value of defined benefit obligation at end of year 141.2 110.52009£m2009£mGroup2008£mGroup2008£m

70Notes to the financial statementscontinuedSavills plcReport and Accounts 200910. Pension scheme continuedChange in plan assets:Fair value of plan assets at start of year 85.9 103.4Expected return on plan assets 6.1 8.0Actuarial gain/(loss) 7.9 (29.9)Employer contributions 3.8 4.0Plan participants contributions 1.1 1.2Benefits paid (1.3) (0.8)Fair value of plan assets at end of year 103.5 85.9The actual return on plan assets was £14.0m (2008 – (£21.9m)). The overall expected return on assets is determined as the weightedaverage of the expected returns on each separate asset class shown below. The expected return on plan assets is determined by theexpected rate of return over the remaining life of the related liabilities held by the scheme. The expected rate of return on equities isbased on market expectations of dividend yields and price earnings ratios. Expected returns on bonds are based on gross redemptionyields as at the balance sheet date.The amounts recognised in the consolidated statement of comprehensive income:Actuarial losses brought forward (24.8) (8.5)Net actuarial loss for the year (12.8) (16.3)Accumulated net actuarial losses (37.6) (24.8)The major categories of assets as a percentage of total plan assets are as follows:2009£m2009£mGroup2008£mGroup2008£m2009 2008Equities 53% 73%Bonds 23% 18%Property 3% 4%Diversified Growth Funds 20% –Cash 1% 5%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:Plan assets 103.5 85.9 103.4 96.6 85.4Defined benefit obligation (141.2) (110.5) (113.4) (112.1) (102.8)Deficit (37.7) (24.6) (10.0) (15.5) (17.4)Experience gain/(loss) on plan liabilities 2% 1% (5%) (3%) (14%)Experience gain/(loss) on plan assets 8% (35%) (4%) 3% 8%Following the year end it was agreed that the Pension Plan of Savills (the Plan), which provided final salary pension benefits to someemployees, would close with regard to future benefit accrual with effect from 31 March 2010. From 1 April 2010, pension benefits forformer members of the Plan will instead be provided through the Group’s defined contribution Personal Pension Plan.The Group expects to contribute £0.7m to its pension plan in the period to 31 March 2010 (2008 full year – £3.9m) (£0.1m – Company,2008 full year – £0.2m).2009£m2008£m2007£m2006£m2005£m

Savills plcReport and Accounts 2009 7111. Finance income and costsYear to31 December2009£mGroupYear to31 December2008£mBank interest receivable 1.9 5.2Fair value gain – forward foreign currency contracts and interest rate swaps 0.4 1.8Finance income 2.3 7.0Bank interest payable (2.3) (3.9)Fair value loss – forward foreign currency contracts and interest rate swaps – (0.6)Finance costs (2.3) (4.5)Net finance income – 2.5Our results12. Income tax expenseAnalysis of tax expense for the yearYear to31 December2009£mGroupYear to31 December2008£mCurrent taxUnited Kingdom:Corporation tax at 28.0% (2008 – 28.5%) 7.6 9.6Adjustment in respect of previous years (2.9) (0.9)4.7 8.7Foreign tax 3.5 3.3Adjustment in respect of previous years – (0.6)Total current tax 8.2 11.4Deferred taxRepresenting:United Kingdom (4.4) (3.6)Foreign tax (0.8) (3.6)Adjustment in respect of previous years 1.3 0.4Total deferred tax (Note 18) (3.9) (6.8)Income tax expense 4.3 4.6The tax charged to equity is as follows:Current tax credit on employee benefits 1.4 1.2 – 0.1Current tax credit on foreign exchange reserves 0.8 – – –Deferred tax on pension actuarial losses 3.6 4.6 0.2 0.3Deferred tax charge on employee benefits (1.1) (1.1) – (0.1)Deferred tax on revaluations of available-for-sale investments 0.2 0.2 – –Deferred tax on foreign exchange reserves 0.3 (0.6) – –Tax on items taken directly to reserves 5.2 4.3 0.2 0.32009£mGroup2008£m2009£mCompany2008£m

72Notes to the financial statementscontinuedSavills plcReport and Accounts 200912. Income tax expense continuedThe tax on the Group’s profit/(loss) before tax differs from the theoretical amount that would arise using the weighted average tax rateapplicable to Group profits. The tax for the year is higher (2008 – higher) than the standard rate of corporation tax in the UK (28.0%).The total tax charge on profit/(loss) can be reconciled to the accounting profit/(loss) as follows:GroupYear to31 December2009£mYear to31 December2008£mProfit/(loss) before tax 13.5 (7.7)Profit/(loss) on ordinary activities multiplied by standard rate of corporation tax in the UK of 28.0%(2008 – 28.5%) 3.8 (2.2)Effects of:Adjustments to tax in respect of previous years (1.6) (1.1)Adjustments in respect of foreign tax rates (1.1) (2.7)Impact of (rising)/falling share price compared to the fair value of share awards/options at date of grant (0.7) 1.8Income not subject to tax (0.2) (4.0)Non-deductible tax losses 2.3 (0.4)Expenses and other charges not deductible for tax purposes 1.8 13.2Income tax expense on profit/(loss) 4.3 4.6The effective tax rate of the Group for the year ended 31 December 2009 is 31.9% (2008 – (59.7%)).13. Dividends – Group and CompanyYear to31 December2009£mYear to31 December2008£mAmounts recognised as distribution to equity holders in the year:Ordinary final dividend for 2008 of 3.0p per share (2007 – 12.0p) 3.7 14.7Interim dividend of 3.0p per share (2008 – 6.0p) 3.7 7.37.4 22.0A second interim dividend in respect of the year ended 31 December 2009 of 6.0p per share is to be paid on 1 April 2010 toshareholders on the record at the close of business of 12 March 2010. These financial statements do not reflect this dividend payable.No final dividend has been proposed for the year ended 31 December 2009 (2008 – 3.0p).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 eachshare held by the Trust. Savills QUEST Trustees Limited, the trustee of the Qualifying Employee Share Trust, waived all dividends on theshares it held.

Savills plcReport and Accounts 2009 7314(a). Basic and diluted earnings per shareBasic earnings per share are based on the profit for the year and the weighted average number of ordinary shares in issue during theyear, excluding the shares held by the EBT, 9,314,386 shares (2008 – 9,742,738 shares).For diluted earnings per share, the weighted average number of ordinary shares in issue is adjusted to assume conversion of dilutivepotential ordinary shares, being the share options granted to employees where the exercise price is less than the average market priceof the Company’s ordinary shares during the year and where performance conditions have been met.The earnings and the shares used in the calculations are as follows:Year to31 December2009Earnings£mYear to31 December2009SharesmillionYear to31 December2009EPSpenceYear to31 December2008Earnings£mYear to31 December2008SharesmillionYear to31 December2008EPSpenceBasic earnings per share 8.9 122.7 7.3 (11.3) 121.7 (9.3)Effect of additional shares issuable under option – 5.8 (0.4) – 3.7 –Diluted earnings per share 8.9 128.5 6.9 (11.3) 125.4 (9.3)Our results14(b). Underlying basic and diluted earnings per shareExcludes exceptional items, profit on disposals, share-based payments adjustment and impairment and amortisation of goodwill andintangibles (excluding software).Year to31 December2009Earnings£mYear to31 December2009SharesmillionYear to31 December2009EPSpenceYear to31 December2008Earnings£mYear to31 December2008SharesmillionYear to31 December2008EPSpenceBasic earnings per share 8.9 122.7 7.3 (11.3) 121.7 (9.3)Exceptional items after tax 29.5 – 24.3Amortisation of intangibles (excluding software)after tax 2.2 – 1.8 3.0 – 2.5Impairment of goodwill after tax 4.3 – 3.5 – – –Share-based payment adjustment after tax 3.4 – 2.8 2.4 – 2.0Profit on disposal of associate, joint venture andavailable-for-sale investments after tax (1.1) – (0.9) (1.6) – (1.4)Underlying basic earnings per share 17.7 122.7 14.5 22.0 121.7 18.1Effect of additional shares issuable under option – 5.8 (0.7) – 3.7 (0.6)Underlying diluted earnings per share 17.7 128.5 13.8 22.0 125.4 17.5The Directors regard the above adjustments necessary to give a fair picture of the underlying results of the Group for the year.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 IFRSthe 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 adding to or deducting from profit the difference between the IFRS 2 charge and the effectivevalue of the annual share award in order to closely match the underlying staff costs in the year with the revenue recognised in thesame period.The gross amounts of the above adjustments are profits on disposals £nil (2008 – £0.5m), share-based payment adjustment £4.7m(2008 – £3.3m) and add back of amortisation of intangibles (excluding software) and impairment of goodwill and available-for-saleinvestments of £7.0m (2008 – £4.2m).

74Notes to the financial statementscontinuedSavills plcReport and Accounts 200915. Goodwill and intangible assetsAcquired goodwill and intangibleassetsGoodwill£mCustomer/businessrelationships£mBrands£mInvestment andPropertyManagementcontracts£mCostAt 1 January 2009 173.4 22.6 6.8 8.7 9.4 220.9 2.0Acquisitions (Note 17(e)) 4.4 – – 1.9 – 6.3 –Other additions – 0.2 – – 1.2 1.4 0.7Disposals – – – – (0.2) (0.2) –Exchange movement (8.4) (1.8) (0.6) (0.1) (0.3) (11.2) –At 31 December 2009 169.4 21.0 6.2 10.5 10.1 217.2 2.7Accumulated amortisation andimpairmentAt 1 January 2009 39.9 7.0 6.8 4.5 7.5 65.7 1.3Amortisation charge for the year – 2.2 – 0.5 0.9 3.6 0.3Impairment 4.3 – – – – 4.3 –Disposals – – – – (0.1) (0.1) –Exchange movement (3.1) (1.2) (0.6) – (0.3) (5.2) –At 31 December 2009 41.1 8.0 6.2 5.0 8.0 68.3 1.6Net book valueAt 31 December 2009 128.3 13.0 – 5.5 2.1 148.9 1.1All intangible amortisation charges in the year are disclosed on the face of the income statement. The Company’s intangible assetsconsist of computer software.Acquired goodwill and intangibleassetsGoodwill£mCustomer/businessrelationships£mBrands£mInvestment and PropertyManagementcontracts£mCostAt 1 January 2008 139.6 15.5 5.1 6.5 7.1 173.8 1.5Acquisitions 11.6 2.4 – – – 14.0 –Other additions – – – – 1.3 1.3 0.5Initial recognition of deferred tax onintangibles (Note 18) 1.3 1.8 – 1.5 – 4.6 –Exchange movement 20.9 2.9 1.7 0.7 1.0 27.2 –At 31 December 2008 173.4 22.6 6.8 8.7 9.4 220.9 2.0Accumulated amortisation andimpairmentAt 1 January 2008 0.9 3.6 1.3 2.0 5.5 13.3 1.1Amortisation charge for the year – 2.2 1.3 0.7 0.8 5.0 0.2Impairment 32.5 0.5 2.8 1.2 – 37.0 –Exchange movement 6.5 0.7 1.4 0.6 1.2 10.4 –At 31 December 2008 39.9 7.0 6.8 4.5 7.5 65.7 1.3Net book valueAt 31 December 2008 133.5 15.6 – 4.2 1.9 155.2 0.7Computersoftware£mComputersoftware£mGroupTotal£mGroupTotal£mCompanyTotal£mCompanyTotal£m

Savills plcReport and Accounts 2009 7515. Goodwill and intangible assets continuedDuring the year, goodwill and intangibles were tested for impairment in accordance with IAS 36. Goodwill and intangibles are allocated tothe Group’s cash-generating units (CGUs) identified according to country of operation and business segment. In most cases, the CGU isan individual subsidiary or operation and these have been separately assessed and tested. A segment-level summary of the allocation ispresented below:TransactionalAdvice£mConsultancy£mProperty &FacilitiesManagement£mFundManagement£mUnited Kingdom 25.1 9.2 5.4 2.3 42.0Rest of Europe 34.7 1.5 13.2 – 49.4Asia Pacific 10.6 3.3 24.3 – 38.2America 17.2 – – – 17.2Total goodwill and intangibles (excluding software) 87.6 14.0 42.9 2.3 146.8Total£mOur resultsMethod of impairment testingAll recoverable amounts were determined based on value-in-use calculations. These calculations use discounted cash flow projectionsbased on financial budgets approved by management covering a five-year period. Cash flows beyond the five-year period areextrapolated using a terminal value.Key assumptionsMarket recoveryThe models used assume that the property markets in which the Group operates begin to recover during 2011.Discount rateThe discount rate applied to cash flows of each CGU is based on the Group’s Weighted Average Cost of Capital (WACC). WACC is theaverage costs of sources of financing (debt and equity), each of which is weighted by its respective use.Key inputs to the WACC calculation are the risk free rate, the equity market risk premium (the return that Savills shares provide over therisk free rate), beta (reflecting the risk of the Group relative to the market as a whole) and the Group’s borrowing rates.Group WACC was adjusted for risk relative to the country in which the assets were located. The risk adjusted pre-tax discount range ofrates used in each region for impairment testing are as follows:2009Pre-tax discount rate range2008Pre-tax discount rate rangeUnited Kingdom 11.6% 11.6%Rest of Europe 11.6 – 12.1% 11.6% – 12.5%Asia Pacific 12.0 – 19.0% 11.6% – 13.4%America 12.5% 12.5%Long-term growth rateTo forecast beyond the five years covered by detailed forecasts, a terminal value was calculated, using an average long-term growth ratedetermined at 1.5%. This reflects management’s expectations based on historical growth and current market conditions and does notexceed the long-term growth rate in any country in which the Group operates.Impairment chargeFollowing impairment testing, a £4.3m charge has been recognised through the income statement (2008 – £37.0m) relating to goodwilland intangibles on historical acquisitions where carrying values are no longer supported by the discounted cash flow analysis.Due to the continued poor US market conditions, an impairment has been recognised of £4.3m in Savills America (2008 £7.7m). While itis assumed that the US market will slowly begin to recover, transaction activity may not pick up as soon as anticipated; therefore a morecautious approach to revenue and profit margins has been taken. Key assumptions include a pre-tax discount rate of 12.5%.Sensitivity to changes in assumptionsThere are no CGU’s where management believe a reasonable possible change in assumptions may give rise to an impairment chargewith the exception of Savills Ireland. Under the impairment testing model, the recoverable amount of Savills Ireland exceeded the carryingvalue by £0.2m. The key assumption in the model relates to revenue where management applied a conservative outlook forecasting asteady return to the revenues generated in 2008. Accordingly, a small reduction in the forecast revenues would result in the carryingvalue exceeding the recoverable amount and give rise to an impairment charge.

76Notes to the financial statementscontinuedSavills plcReport and Accounts 200915. Goodwill and intangible assets continuedThe level of impairment is a reflection of best estimates in arriving at value in use, future growth rates and the discount rate appliedto cash flow projections. Future impairments may be impacted by the following factors:Market conditions – the timing and growth expectations for market recovery are key assumptions in the determination of the cash flowprojections. Management expect the market to begin to recover during 2011. If a marked downturn continues beyond this period,further impairments may occur.Cost base – the cost base assumptions reflects management’s cost savings measurements undertaken during 2008 and 2009 andassumes limited growth in the fixed cost base going forward. Commissions and bonuses are correlated to the Group’s revenue andprofits and the percentage payout. These are assumed to be consistent with existing rates.16. Property, plant and equipmentGroupFreeholdproperty£mShortleaseholdproperty£mEquipmentand motorvehiclesOwned£mEquipmentand motorvehiclesLeased£mCost or valuationAt 1 January 2009 0.4 20.7 48.2 – 69.3Additions – 0.8 2.4 – 3.2Disposals – (1.6) (1.0) – (2.6)Exchange movement – (0.2) (2.2) – (2.4)At 31 December 2009 0.4 19.7 47.4 – 67.5Accumulated depreciation and impairmentAt 1 January 2009 – 10.9 34.7 – 45.6Charge for the year – 1.9 5.1 – 7.0Disposals – (1.2) (0.7) – (1.9)Exchange movement – 0.1 (1.6) – (1.5)At 31 December 2009 – 11.7 37.5 – 49.2Net book valueAt 31 December 2009 0.4 8.0 9.9 – 18.3The Directors consider that the fair value of plant, property and equipment approximates to carrying value.GroupCost or valuationAt 1 January 2008 0.4 16.5 38.8 0.2 55.9Additions – 3.2 5.3 – 8.5Acquisitions – 1.0 0.1 – 1.1Disposals – (0.2) (1.8) (0.1) (2.1)Exchange movement – 0.2 5.8 (0.1) 5.9At 31 December 2008 0.4 20.7 48.2 – 69.3Accumulated depreciation and impairmentAt 1 January 2008 – 7.9 26.2 0.1 34.2Charge for the year – 2.0 5.2 – 7.2Impairment – 1.0 – – 1.0Disposals – (0.1) (1.4) (0.1) (1.6)Exchange movement – 0.1 4.7 – 4.8At 31 December 2008 – 10.9 34.7 – 45.6Net book valueAt 31 December 2008 0.4 9.8 13.5 – 23.7The impairment charge in 2008 of £1.0m arose on the write-off of office fit out costs where the properties were no longer in use and theleases were classed as onerous.Freeholdproperty£mShortleaseholdproperty£mEquipmentand motorvehiclesOwned£mEquipmentand motorvehiclesLeased£mTotal£mTotal£m

Savills plcReport and Accounts 2009 7716. Property, plant and equipment continuedCompanyFreeholdpropertyowned£mShortleaseholdproperty£mEquipmentand motorvehicles£mCost or valuationAt 1 January 2009 0.1 1.1 7.6 8.8Additions – – 0.3 0.3Disposals – (0.3) – (0.3)At 31 December 2009 0.1 0.8 7.9 8.8Accumulated depreciation and impairmentAt 1 January 2009 – 1.0 6.9 7.9Charge for the year – 0.1 0.3 0.4Disposals – (0.3) (0.1) (0.4)At 31 December 2009 – 0.8 7.1 7.9Net book valueAt 31 December 2009 0.1 – 0.8 0.9Total£mOur resultsCompanyCost or valuationAt 1 January 2008 0.1 1.1 7.1 8.3Additions – – 0.5 0.5At 31 December 2008 0.1 1.1 7.6 8.8Accumulated depreciation and impairmentAt 1 January 2008 – 0.2 6.5 6.7Charge for the year – 0.2 0.4 0.6Impairment – 0.6 – 0.6At 31 December 2008 – 1.0 6.9 7.9Net book valueAt 31 December 2008 0.1 0.1 0.7 0.9Freeholdpropertyowned£mImpairment in 2008 relates to fit out of an office where the properties lease was been classed as onerous.Shortleaseholdproperty£mEquipmentand motorvehicles£mTotal£m

78Notes to the financial statementscontinuedSavills plcReport and Accounts 200917(a). Group – Investments in joint ventures and associated undertakingsInvestment£mLoans£mJoint venturesTotal£mInvestment£mGoodwill£mAssociated undertakingsCost or valuationAt 1 January 2009 1.1 2.5 3.6 2.3 0.2 2.5Additions 0.1 – 0.1 0.6 – 0.6Transfer from available-for-sale investments(Note 17(b)) – – – 0.6 – 0.6Movement on loans – (0.1) (0.1) – – –Exchange movement (0.1) (0.2) (0.3) (0.1) – (0.1)At 31 December 2009 1.1 2.2 3.3 3.4 0.2 3.6Share of profitAt 1 January 2009 1.4 – 1.4 3.4 – 3.4Group’s share of retained profit 1.0 – 1.0 1.6 – 1.6Disposal – – – (0.2) – (0.2)Dividends received (0.5) – (0.5) (0.7) – (0.7)Exchange movement (0.2) – (0.2) (0.1) – (0.1)At 31 December 2009 1.7 – 1.7 4.0 – 4.0TotalAt 31 December 2009 2.8 2.2 5.0 7.4 0.2 7.6TotalAt 31 December 2008 2.5 2.5 5.0 5.7 0.2 5.9In relation to the Group’s interests in joint ventures, the assets, liabilities, income and expenses are shown below:Current assets 5.4 2.5Non-current assets 3.9 2.3Current liabilities (5.9) (2.3)Non-current liabilities (0.6) –Net assets 2.8 2.5Revenue 10.3 6.4Expenses (8.8) (6.8)Share of income tax (0.5) (0.2)Share of post-tax profit/(loss) from joint ventures 1.0 (0.6)In relation to the Group’s associated undertakings, the assets, liabilities, income and expenses are shown below:Current assets 9.0 9.6Non-current assets 5.9 4.5Current liabilities (6.7) (7.1)Non-current liabilities (0.8) (1.3)Net assets 7.4 5.7Revenue 14.3 22.0Expenses (12.0) (20.5)Share of income tax (0.7) (0.4)Share of post-tax profit from associates 1.6 1.12009£m2009£mTotal£m2008£m2008£m

Savills plcReport and Accounts 2009 7917(a). Group – Investments in joint ventures and associated undertakings continuedThe joint ventures and associates have no significant liabilities to which the Group is exposed to, nor has the Group any significantcontingent liabilities or capital commitments in relation to its interests in the joint ventures and associates. The market value of theGroup’s holding in Adventis plc, an associate company, was £2.8m at 31 December 2009 (2008 – £2.0m).On 12 June 2008, the Group disposed of its 50% stake in Infinergy Limited to its joint venture partner. £10.0m was due and received inDecember 2009 for the last deferred payment in relation to this disposal.17(b). Available-for-sale investmentsAt 1 January 16.2 21.6Additions 0.3 3.1Transfer to investment in associate (Note 17(a)) (0.6) –Revaluation deficit transferred to equity (0.8) (0.5)Disposals (0.2) (3.6)Impairment – (6.9)Exchange movement (0.9) 2.5At 31 December 14.0 16.2Available-for-sale investments comprise the following:Listed securities Asia Pacific – equity securities 0.2 0.9Unlisted securities UK – equity securities 1.5 1.4UK – limited partnership 0.1 –UK – investment funds 2.5 3.2European – investment funds 9.7 10.7Group2009£mGroup2008£m14.0 16.2Our resultsIn 2008, an impairment charge of £6.9m was recognised in relation to Cordea Savills investment funds, due to the deterioration ofunderlying property asset values. The most significant impairments related to the Cordea Savills Italian Opportunities Fund 1 (£2.0m) andCordea Savills Italian Opportunities Fund 2 (£1.6m).Available-for-sale investments are denominated in the following currencies:Sterling 4.1 4.7Euro 9.7 10.5Other 0.2 1.0Group2009£mGroup2008£m14.0 16.2

80Notes to the financial statementscontinuedSavills plcReport and Accounts 200917(b). Available-for-sale investments continuedAt 31 December 2009, the Group held the following available-for-sale investments:Investment Holding Principal activityPinnacle Regeneration Group plc (registered in England and Wales) 12.1% Social housingCordea Savills Dawn Syndication (entity registered in England and Wales) 3.5% Investment property fundCordea Savills Student Hall Fund (entity registered in Jersey) 2.0% Student accommodation property fundCordea Savills Italian Opportunities Fund 1 (entity registered in Luxembourg) 8.0% Investment property fundCordea Savills Italian Opportunities Fund 2 (entity registered in Luxembourg) 1.3% Investment property fundServiced Land No. 2 (entity registered in England and Wales) 1.9% UK land investment fundCordea Savills German Retail Fund (entity registered in Luxembourg) 1.9% Retail investment property fundCordea Savills Nordic Retail Fund (entity registered in Luxembourg) 11.3% Retail investment property fundCordea Savills UK Property Ventures No. 1 (registered in England and Wales) 4.1% UK land investment fundThe Group does not exert significant influence over these businesses, and therefore does not equity account for these investments.These shareholdings are treated as trade investments and held at fair value.The fair value of unlisted securities is based on underlying asset values and price earnings models. The fair value of investment fundsis determined by the Fund Managers annual audited financial statements. As at 31 December 2009 the Group held conditionalcommitments for investment funds as detailed in Note 29.The Company made an available-for-sale investment during the year of £0.2m in unlisted UK equity securities.17(c). Company – Investments in subsidiariesSharesin Groupundertakings£mLoans toGroupundertakings£mCostAt 1 January 2008 17.4 112.0 129.4Additions 5.0 7.6 12.6Repayments – (8.7) (8.7)Exchange movement – 6.1 6.1At 31 December 2008 22.4 117.0 139.4Additions – 2.1 2.1Repayments – (5.4) (5.4)Exchange movement – (2.2) (2.2)At 31 December 2009 22.4 111.5 133.9Total£m

Savills plcReport and Accounts 2009 8117(d). Investments in subsidiaries, joint ventures and associated undertakingsThe principal subsidiaries, joint ventures and associated undertakings of the Group which, in the Directors’ opinion principally affect thefigures 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 UKand 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 activitiesCordea Savills LLP* + 60% Provision of fund managementSavills Commercial Limited* 100% Commercial surveyorsSavills (L&P) Limited* 100% General practice surveyorsPrime Purchase Limited* 100% Property buying companyCordea Savills Investment Management Limited* 60% Asset manager (regulated by FSA)Savills Private Finance Limited* 100%Provision of general insurance, mortgage broking andpersonal financial planning services (regulated by FSA)Savills LLC* ++ (registered in the US) 75% Property consultantsSavills Commercial (Ireland) Limited* (registered in Ireland) 100% Property consultantsSavills Residential (Ireland) Limited* (registered in Ireland) 100% Property consultantsSavills Consultores Inmobiliarios SA* (registered in Spain) 100% Property consultantsSavills Immobilien Beratungs GmbH* (registered in Germany) 100% Property consultantsSavills SA* (registered in France) 99.97% Property consultantsSavills Italy SRL* (registered in Italy) 90.45% Property consultantsSavills Nederland Holding BV* (registered in the Netherlands) 87% Property consultantsSavills Sweden AB* (registered in Sweden) 51% Property consultantsSavills Spolka z Organiczona* (registered in Poland)100% Property consultantsSavills (Hong Kong) Limited* (registered in Hong Kong) 100% Mixed practice agency, valuation and researchSavills Valuation and Professional Services Limited*(registered in Hong Kong) 100% Valuation and researchSavills Property Management Limited*(registered in Hong Kong) 100% Property managementGuardian Property Management Limited*(registered in Hong Kong) 100% Property managementSavills (Singapore) Pte Limited* (registered in Singapore) 100% Property management and agencySavills Japan KK* (registered in Japan) 100% Property management and agencySavills Property Services (Shanghai) Co Limited*(registered in China) 100% Property managementSavills Property Services (Beijing) Co Limited*(registered in China) 100% Property managementSavills Korea Asset Management Limited*(registered in Korea) 100% Property managementSavills Korea Co. Limited* (registered in Korea) 100% Property agency and consultantsSavills (Vietnam) Limited* (registered in BVI) 69.10% Property management and agencySavills (Thailand) Limited* (registered in Thailand) 100% Property agency, consultants and managementSavills (Taiwan) Limited* (registered in Taiwan) 100% Property agency and consultantsSavills (Aust) Pty Limited* (registered in Australia) 100% Property agency, consultants and managementJoint venturesGES Holdings Limited* (Macau) 50% Property managementAssociated undertakingsHutton Asia Pte Ltd* (Singapore) 48% Property agencyAdventis Group plc* 30.04% Provision of marketing and media servicesOur results* Shares/interests held indirectly by the Company.+ Limited Liability Partnership.++ Limited Liability Company.

82Notes to the financial statementscontinuedSavills plcReport and Accounts 200917(e). Acquisitions of subsidiariesDuring the year, the Group made a number of small acquisitions:Subsidiaries acquiredProvisional fairvalue to GroupTotal£mCurrent assets: Trade and other receivables 0.3Current liabilities: Trade and other payables (0.1)Net assets 0.2Minority share of net assets 0.8Other intangibles (Note 15) 1.9Fair value of net assets acquired 2.9Goodwill (Note 15) 4.4Purchase consideration and costs 7.3Analysis of purchase consideration and costs:Purchase consideration 7.3Acquisition costs –7.3Consideration and costs satisfied by:Cash 7.2Deferred consideration owing at balance sheet date 0.1For all acquisitions, there was no difference between the fair value and carrying value of net assets acquired, except for intangible assets.Acquisitions have been accounted for using the purchase method. The Group acquires businesses intended for use on a continuingbasis. Goodwill is attributable to anticipated future operating synergies from the combination with existing businesses and perceivedfuture economic benefits that will be generated from the staff/client relationships acquired. There were no significant changes to theprovisional goodwill that arose in the previous year on acquisitions.During the year, the Group exercised the call option agreed on acquisition of Savills Korea Asset Management and acquired theremaining 45% shareholding in this company. Cash consideration of £3.9m was paid and goodwill on acquisition of £2.6m has beenprovisionally determined.During the year, the Group increased its shareholding in a number of existing subsidiaries and also acquired Mayflower ManagementCompany Limited, a charities property fund manager. Cash consideration for these transactions amounted to £3.3m with deferredconsideration of £0.1m. Goodwill on acquisition of £1.8m has been provisionally determined, and is attributable to key staff and theirindustry reputation. Other intangible assets of £1.9m have been identified and relate to a fund management contract.Included in Group operating profit relating to acquisitions is revenue of £0.6m (2008 – £3.9m), staff costs of £0.6m (2008 – £2.8m),depreciation of £nil (2008 – £nil), amortisation of £nil (2008 – £0.2m) and other operating charges of £0.3m (2008 – £1.5m). If the datefor all acquisitions made during the year had been at the beginning of the year, amounts relating to these acquisitions would have beenrevenue of £1.0m (2008 – £6.0m), staff costs of £0.9m (2008 – £4.0m), depreciation of £nil (2008 – £0.1m), amortisation of £nil(2008 – £0.2m) and other operating charges of £0.5m (2008 – £2.2m).7.3

Savills plcReport and Accounts 2009 8318. Deferred income taxDeferred income tax assets and liabilities are only offset where there are legally enforceable rights to offset current tax assets againstcurrent tax liabilities and when the deferred income tax relates to the same fiscal authority. The deferred tax assets and liabilities are offsetwhen realised through current tax. The deferred income tax assets and liabilities at 31 December, without taking into consideration theoffsetting balances within the same jurisdiction, are as follows:Year to31 December2009£mGroupYear to31 December2008£mYear to31 December2009£mCompanyYear to31 December2008£mDeferred tax assets– Deferred tax asset to be recovered after more than 12 months 25.0 19.4 1.2 1.1– Deferred tax asset to be recovered within 12 months 2.4 3.0 0.5 0.527.4 22.4 1.7 1.6Deferred tax liabilities– Deferred tax liability to be recovered after more than 12 months (3.0) (4.7) – –– Deferred tax liability to be recovered within 12 months (0.6) (0.8) – –(3.6) (5.5) – –Our resultsDeferred tax asset – net 23.8 16.9 1.7 1.6The movement on the deferred tax account is shown below:Year to31 December2009£mGroupYear to31 December2008£mYear to31 December2009£mCompanyYear to31 December2008£mAt 1 January – asset 16.9 10.7 1.6 1.4Amount credited/(charged) to income statement (Note 12) 3.9 6.8 (0.1) –Tax charged to equity– Pension asset 3.6 4.6 0.2 0.3– Employee benefits (1.1) (1.1) – (0.1)– Revaluations of available-for-sale investments 0.2 0.2 – –– Movement on foreign exchange reserves 0.3 (0.6) – –Exchange movement – 0.9 – –Initial recognition of deferred tax on previously acquired intangible assets(Note15) – (4.6) – –As at 31 December – asset 23.8 16.9 1.7 1.6Deferred income tax assets have been recognised in respect of all tax losses and other temporary differences to the extent that therealisation 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 £14.8m (2008 – £10.0m) available for offset against future profits.Deferred tax of £4.1m (2008 – £2.2m) 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, £1.0m that expire within three to five years,£0.6m that expire in within six to seven years and the remaining £13.0m being available for offset indefinitely.

84Notes to the financial statementscontinuedSavills plcReport and Accounts 200918. Deferred income tax continuedDeferred tax assets – GroupAcceleratedcapitalallowances£mAt 1 January 2008 0.7 3.3 1.0 3.6 4.3 12.9Amount credited/(charged) to income statement(Note 12) 0.2 2.1 2.8 (1.2) 0.9 4.8Tax credited/(charged) to equity (Note 12) – – – 4.6 (1.1) 3.5Exchange movement – 0.3 0.8 – – 1.1Acquired with subsidiaries – – 0.1 – – 0.1As at 31 December 2008 0.9 5.7 4.7 7.0 4.1 22.4Amount (charged)/credited to income statement(Note 12) – (0.7) (0.2) 0.1 3.4 2.6Tax credited/(charged) to equity (Note 12) – – – 3.6 (1.1) 2.5Exchange movement – 0.1 (0.2) – – (0.1)As at 31 December 2009 0.9 5.1 4.3 10.7 6.4 27.4Otherincludingprovisions£mTax losses£mRetirementbenefits£mEmployeebenefits£mTotal£mDeferred tax liabilities – GroupAcceleratedcapitalallowances£mOtherincludingprovisions and foreignexchange reserves£mUnremitted profits£mRevaluations£mIntangible assets£mAt 1 January 2008 (0.4) (1.1) (0.1) (0.6) – (2.2)Amount credited/(charged) to income statement(Note 12) 0.1 0.6 (0.3) – 1.6 2.0Tax (charged)/credited to equity (Note 12) – (0.6) – 0.2 – (0.4)Exchange movement – – – – (0.3) (0.3)Initial recognition of intangible assets (Note 15) – – – – (4.6) (4.6)As at 31 December 2008 (0.3) (1.1) (0.4) (0.4) (3.3) (5.5)Amount credited to income statement (Note 12) 0.3 0.1 0.4 – 0.5 1.3Tax credited to equity (Note 12) – 0.3 – 0.2 – 0.5Exchange movement – – – – 0.1 0.1As at 31 December 2009 – (0.7) – (0.2) (2.7) (3.6)Net deferred tax assetAt 31 December 2009 23.8At 31 December 2008 16.9Total£mDeferred tax assets – CompanyAcceleratedcapitalallowances£mAt 1 January 2008 0.4 0.6 0.2 0.2 1.4Amount credited/(charged) to income statement (Note 12) 0.1 – (0.1) – –Tax charged to equity (Note 12) – – 0.3 (0.1) 0.2As at 31 December 2008 0.5 0.6 0.4 0.1 1.6Amount (charged)/credited to income statement (Note 12) (0.1) (0.1) – 0.1 (0.1)Tax credited to equity (Note 12) – – 0.2 – 0.2As at 31 December 2009 0.4 0.5 0.6 0.2 1.7Net deferred tax assetAt 31 December 2009 1.7At 31 December 2008 1.6Otherincludingprovisions£mRetirementbenefits£mEmployeebenefits£mTotal£m

Savills plcReport and Accounts 2009 8519. Trade and other receivablesYear to31 December2009£mGroupYear to31 December2008£mYear to31 December2009£mCompanyYear to31 December2008£mTrade receivables 116.5 122.7 – –Less: provision for impairment of receivables (9.4) (10.0) – –Trade receivables – net 107.1 112.7 – –Amounts owed by subsidiary undertakings – – 10.5 7.8Other receivables 11.7 26.5 – 0.4Income tax 1.9 – 1.8 3.5Prepayments and accrued income 24.7 25.3 0.8 0.9145.4 164.5 13.1 12.6Our resultsThe carrying value of trade and other receivables is approximate to fair value.Included in other receivables for the year ended 31 December 2008 was £10.0m due and received in December 2009 for the lastdeferred payment in relation to the disposal of Infinergy Limited.There is no other concentration of credit risk with respect to trade and other receivables as the Group has a large number of clientsinternationally dispersed with no individual client owing a significant amount.Amounts owed by subsidiary undertakings to the Company are generally charged interest at 1.5% above the base rate. Inter-companytrade receivables are generally cleared within the month.As at 31 December 2009, trade receivables of £9.4m (2008 – £10.0m) were impaired and provided for. The individually impairedreceivables mainly relate to receivables from clients that have been affected by the uncertain economic conditions where funding andcompletion have been delayed and cash flow has become uncertain.The ageing of these receivables is as follows:Up to 3 months 1.1 1.63 to 6 months 1.6 2.3Over 6 months 6.7 6.12009£mGroup2008£m9.4 10.0As at 31 December 2009, trade receivables of £38.6m (2008 – £35.1m) were past due but not impaired. These relate to tradereceivables which are past due at the reporting date but are not considered impaired as there has not been a significant change in creditquality and the amounts are still considered recoverable.The ageing of these receivables is as follows:Up to 3 months 35.1 24.43 to 6 months 1.3 5.5Over 6 months 2.2 5.22009£mGroup2008£m38.6 35.1

86Notes to the financial statementscontinuedSavills plcReport and Accounts 200919. Trade and other receivables continuedThe carrying amounts of the Group’s trade and other receivables are denominated in the following currencies:Sterling 67.5 95.1Euro 22.9 22.4Hong Kong dollar 21.1 21.4Australian dollar 11.4 10.8Other 22.5 14.8Movement on the provision for impairment of trade receivables is as follows:2009£mGroup2008£m145.4 164.5At 1 January (10.0) (8.1)Provisions for receivables impairment (2.8) (3.1)Receivables written off during the year as uncollectible 2.9 3.0Exchange movements 0.5 (1.8)At 31 December (9.4) (10.0)The creation and release of the provision for impaired receivables have been included in operating costs 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.20. Cash and cash equivalentsYear to31 December2009£mGroupYear to31 December2008£m2009£mYear to31 December2009£mGroup2008£mCompanyYear to31 December2008£mCash at bank and in hand 50.8 36.2 19.2 17.1Short-term bank deposits 30.8 39.1 – –81.6 75.3 19.2 17.1The effective interest rate on short-term bank deposits as at 31 December 2009 was 0.62% (2008 – 1.6%); these deposits have anaverage maturity of 5 days (2008 – 13 days).Cash subject to restrictions in Asia Pacific amounts to £16.7m (2008 – £11.3m) which is cash pledged to banks in relation to propertymanagement contracts and cash remittance restrictions in certain countries. These amounts are consolidated.

Savills plcReport and Accounts 2009 8720. Cash and cash equivalents continuedCash, cash equivalents and bank overdrafts include the following for the purposes of the cash flow statement:GroupYear to31 December2009£mYear to31 December2008£mYear to31 December2009£mCompanyYear to31 December2008£mCash and cash equivalents 81.6 75.3 19.2 17.1Bank overdrafts (Note 23) (0.7) – – –80.9 75.3 19.2 17.1Cash and cash equivalents are denominated in the following currencies:Sterling 29.8 24.8 21.0 17.1Euro 6.4 6.3 (1.8)* –Hong Kong dollar 22.9 26.8 – –Singapore dollar 4.8 4.6 – –Thailand baht 0.2 0.2 – –Australian dollar 3.6 1.5 – –Chinese renminbi 9.1 7.4 – –Japanese yen 0.7 0.2 – –South Korean wan 1.9 2.1 – –Polish zloty – 0.1 – –Swedish krona 0.4 0.3 – –US dollar 0.5 0.4 – –Vietnam dong 1.3 0.6 – –81.6 75.3 19.2 17.1Our results* The Company Euro account is managed within a Group pooling banking arrangement. As at 31 December 2009, no net overdraft existed within the Euro pool.21(a). Trade and other payables – currentYear to31 December2009£mGroupYear to31 December2008£mYear to31 December2009£mCompanyYear to31 December2008£mDeferred consideration 4.2 1.4 – –Trade payables 32.4 30.1 3.2 2.4Amounts owed to subsidiary undertakings – – 3.4 0.7Other taxation and social security 22.6 22.0 4.3 0.5Other payables 3.0 3.6 – –Accruals and deferred income 102.8 110.1 3.8 3.1165.0 167.2 14.7 6.721(b). Tax liabilities – currentYear to31 December2009£mGroupYear to31 December2008£mYear to31 December2009£mCompanyYear to31 December2008£mCurrent income tax liabilities 2.5 2.4 – –

88Notes to the financial statementscontinuedSavills plcReport and Accounts 200922. Trade and other payables – non-currentYear to31 December2009£mGroupYear to31 December2008£mYear to31 December2009£mCompanyYear to31 December2008£mDeferred consideration 11.0 14.6 – –Other payables 0.1 0.3 – –Amounts owed to subsidiary undertakings – – 13.7 15.011.1 14.9 13.7 15.023. BorrowingsCurrentUnsecured bank loans and overdrafts due within one year or on demand 5.6 5.6 – –Loan notes 0.7 7.6 – –2009£mGroup2008£m2009£mCompany2008£m6.3 13.2 – –Non-currentUnsecured bank loans 8.7 15.3 – –Loan notes 0.3 1.1 – –9.0 16.4 – –In 2007, the Group borrowed £19.8m for the acquisition of Granite Partners LLC in the US (now Savills LLC). The borrowings aredenominated in US dollars. Interest is fixed at 5.315% via an interest rate swap until maturity date. At 31 December 2009, at the yearend exchange rate, £13.6m was outstanding (2008 – £20.9m). USD8m is due within one year.In 2006, £4.3m of the Variable Interest Rate Guaranteed Loan Notes 2006 were issued as part consideration for the acquisition of thebusiness and assets of Blair Kirkman LLP. As at 31 December 2009, £0.5m were still in issue and due within one year. Interest ispayable half-yearly.Also in 2006, £0.6m of the Variable Interest Rate Guaranteed Loan Notes 2006 were issued as part consideration for the acquisitionof the business and assets of PCA Management Consultants Limited. As at 31 December 2009, £0.5m were still in issue. These arerepayable over two years and interest is payable half-yearly. £0.2m is due within one year.

Savills plcReport and Accounts 2009 8923. Borrowings continuedBank loans are denominated in a number of currencies and bear interest at LIBOR or foreign equivalents as appropriate to the country inwhich 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:GroupCompanyLess than 1 year 1.4 8.2 – –Between 1 and 2 years 0.3 0.5 – –Between 2 and 5 years 13.6 20.9 – –2009£m2008£m2009£m2008£m15.3 29.6 – –Our resultsThe maturity of non-current borrowings is as follows:Between 1 and 2 years 5.3 6.7 – –Between 2 and 5 years 3.7 9.7 – –The effective interest rates at the balance sheet date were as follows:2009£mGroup2008£m2009£mCompany2008£m9.0 16.4 – –Bank overdraft 3.96% 7.72%Bank loans 5.32% 5.32%Loan notes 3.51% 4.89%The carrying amounts of borrowings approximate to fair value.The carrying amounts of the Group’s borrowings are denominated in the following currencies:Sterling 1.0 2.7 – –US dollar 13.6 20.9 – –Euro 0.6 6.0 – –Thailand baht 0.1 – – –2009£mGroup2008£m2009£m2009£mGroup2008£mCompany2008£m15.3 29.6 – –The Group has the following undrawn borrowing facilities:Floating rate – expiring within one year or on demand 20.2 22.2 – –Floating rate – expiring between 1 and 5 years 60.0 80.0 – –In November 2009 the £80m multi-currency revolving credit facility was reduced to £60m, by means of a voluntary partial cancellation bySavills as it was surplus to forecast requirements. As at 31 December 2009 this facility was undrawn.

90Notes to the financial statementscontinuedSavills plcReport and Accounts 200924. Derivative financial instrumentsAt 31 December 2009Assets£mGroupLiabilities£mInterest rate swaps – at fair value – 0.7 – –Forward foreign exchange contracts – at fair value 0.1 – – –Total 0.1 0.7 – –Less non-current portion – (0.7) – –Current portion 0.1 – – –Assets£mCompanyLiabilities£mAt 31 December 2008 2.6 1.2 1.5 –Interest rate swapsThe notional principal amounts of the outstanding interest rate swap contracts in relation to the US borrowing at 31 December 2009were £13.6m (2008 – £20.9m). At 31 December 2009, the fixed interest rate was 5.315%. The floating rate is USD LIBOR.Gains and losses on interest rate swaps are recognised in the income statement.Forward foreign exchange contractsThe notional principal amounts of the outstanding forward foreign exchange contracts at 31 December 2009 were £14.2m (2008 –£10.3m). 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.Hedge of net investments in foreign operationsA portion of the Group’s US borrowing amounting to USD22.0m (2008 – USD30.0m) is designated as a hedge on the net investment inthe Group’s US subsidiary. The fair value of the total borrowing at 31 December 2009 was £13.6m (2008 – £20.9m). The foreignexchange gain of £2.1m (2008 - £5.7m) on translation of the borrowing to currency at the balance sheet date is recognised in foreignexchange reserves in equity. The maximum exposure to credit risk at the reporting date is the fair value of the derivative assets on thebalance sheet.

Savills plcReport and Accounts 2009 9125(a). ProvisionsProfessionalindemnityclaims£mDilapidationprovisions£mAt 1 January 2009 4.2 1.0 3.3 8.5 1.8Released during the year (1.0) – – (1.0) –Provided during the year 5.7 0.2 – 5.9 –Utilised during the year (1.7) – (2.1) (3.8) (0.3)31 December 2009 7.2 1.2 1.2 9.6 1.5Provisions have been analysed between current and non-current as follows:Current 5.2 0.3Non-current 4.4 1.2Onerousleases£mGroupTotal£mGroup£mCompany£mCompany£m9.6 1.5Our results£4.5m of professional indemnity claims and dilapidation provisions is expected to be paid within one year.Onerous lease costs of £nil (2008 – £3.3m) have been provided for leases where the expected economic outflow exceeds the futurebenefits. £0.7m is expected to be paid within one year.25(b). Employee benefit obligationsIn addition to the defined benefit obligation pension scheme disclosed in Note 10, the following are included in employee benefitobligations:GroupAt 1 January 2009 8.7Provided during the year 3.8Utilised during the year (4.6)Exchange movements 0.131 December 2009 8.0The above provisions relate to holiday pay and long service leave in Asia Pacific and are expected to crystallise within five to seven yearsof the balance sheet date.The Company had no employee benefit obligations at 31 December 2009 or 31 December 2008.The above employee benefit obligations have been analysed between current and non-current as follows:Current 3.1 3.5Non-current 4.9 5.22009£mTotal£mGroup2008£m8.0 8.7

92Notes to the financial statementscontinuedSavills plcReport and Accounts 200926. Share capital – Group and CompanyAuthorised and allotted31 December2009Number of shares31 December2008Number of shares31 December2009£m31 December2008£mOrdinary shares of 2.5p each:Authorised 202,000,000 202,000,000 5.1 5.1Allotted, called up and fully paid 131,841,846 131,840,933 3.3 3.3Movement in allotted, called up and fully paid share capital2009 2008Number of shares £m Number of shares £mAt 1 January 131,840,933 3.3 131,840,933 3.3Allotted to direct participants on exerciseof options under the Savills SharesaveScheme 913 – – –At 31 December 131,841,846 3.3 131,840,933 3.3At the Annual General Meeting held on 6 May 2009, the shareholders gave the Company authority, subject to stated conditions, topurchase for cancellation up to 13,184,093 of its own ordinary shares (AGM held on 7 May 2008 – 13,184,093). Such authority remainsvalid until the conclusion of the next Annual General Meeting or 1 July 2010 whichever is the earlier.27. Share-based paymentDetails of the terms of the following schemes are contained in the Remuneration report on pages 36 to 45.27(a).The following share options have been granted under the Savills Executive Share Option Scheme (2001) and were outstandingat 31 December 2009:Date of grant Exercise period Exercise price31 December 2009Number ofshares’00031 December 2008Number ofshares’00030 March 2004 7 years from 30 March 2007 Unapproved 217.8p 46 4614 March 2005 7 years from 14 March 2008 Approved 321.3p 37 3714 March 2005 7 years from 14 March 2008 Unapproved 321.3p 91 9113 March 2006 7 years from 13 March 2009 Unapproved 596.0p – 10016 April 2008 7 years from 16 April 2011 Approved 300.1p – 1016 April 2008 7 years from 16 April 2011 Unapproved 300.1p 160 18717 April 2009 7 years from 17 April 2012 Approved 288.8p 21 –17 April 2009 7 years from 17 April 2012 Unapproved 288.8p 530 –885 471A reconciliation of option movements over the year to 31 December 2009 is shown below:Number of shares’000Weighted averageexerciseprice2009 2008Outstanding at 1 January 471 360.7p 310 394.5pGranted 551 288.8p 197 300.1pForfeited (137) 516.6p (36) 321.3pOutstanding at 31 December 885 291.8p 471 360.7pExercisable at 31 December 174 293.9p 174 293.9pThe weighted average share price on the date of exercise during the year was £nil (2008 – nil) and total consideration of £nil (2008 – £nil)was received.Number ofshares’000Weightedaverageexerciseprice

Savills plcReport and Accounts 2009 9327. Share-based payment27(b).During the year 913 shares (2008 – nil shares) were allotted direct to participants on the exercise of options under the Savills SharesaveScheme. The following table shows the options remaining outstanding as at 31 December 2009, 244,237 shares (2008 – 750,486shares) having lapsed and 913 (2008 – nil) shares having been exercised in accordance with the rules of the scheme for consideration of£2,903.Date of grant Exercise price Exercise period31 December 2009Number ofshares’00031 December 2008Number ofshares’0005 May 2006 510.5p 01.07.09 – 01.01.10 194 22731 October 2007 318.0p 01.12.10 – 01.06.11 814 1,02629 October 2009 267.0p 01.12.12 – 01.06.13 1,210 –2,218 1,253Our resultsA reconciliation of option movements over the year to 31 December 2009 is shown below:Number of shares’000Weighted averageexerciseprice2009 2008Outstanding at 1 January 1,253 352.9p 2,003 352.0pGranted 1,210 267.0p – –Forfeited/expired (244) 343.8p – –Exercised (1) 318.0p – –Outstanding at 31 December 2,218 307.0p 1,253 352.9pExercisable at 31 December 194 510.5p – –The weighted average share price on the date of exercise during the year was 334.8p (2008 – nil).27(c).During the year no shares (2008 – nil) were either allotted to Savills QUEST Trustees Limited, the trustee of the Qualifying EmployeeShare Trust, or transferred (2008 – nil) to participants on the exercise of options under the Savills Sharesave Scheme. On 17 November2009 2,154 shares held by the QUEST (the Trust) were sold at 326.92p per share further to Savills plc and the Trust agreeing to wind-upthe Trust and distribute its remaining assets to charities nominated by Savills plc employees.27(d).The following awards of deferred shares, without exercise price, have been granted under the Savills Deferred Share Bonus Plan (theDSBP) and were outstanding at 31 December 2009:Date of award Deferred period Vesting dateNumber ofshares’00031 December 2009Number ofshares’000Weightedaverageexerciseprice31 December 2008Number ofshares’00015 March 2004 5 years 15 March 2009 – 90314 March 2005 5 years 14 March 2010 1,028 1,06513 March 2006 3 years 13 March 2009 – 62113 March 2006 5 years 13 March 2011 34 3419 March 2007 3 years 19 March 2010 775 80219 March 2007 5 years 19 March 2012 592 63517 March 2008 3 years 17 March 2011 2,289 2,44717 March 2008 5 years 17 March 2013 1,305 1,38617 April 2009 3 years 17 April 2012 886 –17 April 2009 5 years 17 April 2014 563 –7,472 7,893As at 31 December 2009, 439 (2008 – 459) individuals held outstanding awards under the DSBP. Awards made under the DSBP from2006 onwards are subject to rolled-up dividends whereby the number of shares awarded will be increased on the vesting date to reflectdividends paid to shareholders throughout the deferred period.

94Notes to the financial statementscontinuedSavills plcReport and Accounts 200927. Share-based payment continuedA reconciliation of award movements over the year to 31 December 2009 is shown below:Number ofshares’000Weighted averageshare priceat dateof exercise2009 2008Number ofshares’000Weightedaverageshare priceat dateof exerciseOutstanding at 1 January 7,893 – 5,392 –Granted 1,498 – 3,976 –Forfeited/expired (303) – (321) –Exercised (1,616) 288.6p (1,154) 311.7pOutstanding at 31 December 7,472 – 7,893 –Exercisable at 31 December 8 – 5 –The weighted average exercise price for awards granted under this scheme is £nil (2008 – £nil). Awards over 8,465 shares wereexercisable under this scheme as at 31 December 2009 (31 December 2008 – 5,390).27(e).The following awards of deferred shares, without exercise price, have been granted under the Savills Deferred Share Plan (the DSP) andremained outstanding at 31 December 2009:Date of grant Deferred period Vesting date31 December 2009Number ofshares’00031 December 2008Number ofshares’00010 October 2006 3 years 10 October 2009 – 7810 October 2006 5 years 10 October 2011 366 50419 March 2007 3 years 19 March 2010 383 38819 March 2007 5 years 19 March 2012 37 3717 September 2007 3 years 17 September 2010 170 17017 September 2007 5 years 17 September 2012 12 1217 March 2008 3 years 17 March 2011 693 69317 March 2008 5 years 17 March 2013 37 3723 September 2008 3 years 23 September 2011 138 1387 October 2008 3 years 7 October 2011 42 4217 April 2009 3 years 10 April 2012 615 –10 September 2009 3 years 10 September 2012 17 –10 September 2009 5 years 10 September 2014 23 –2,533 2,099As at 31 December 2009, 102 individuals (2008 – 109) held outstanding awards under the DSP. Awards made under the DSP aresubject to rolled-up dividends whereby the number of shares awarded will be increased on the vesting date to reflect dividends paid toshareholders during the deferred period.A reconciliation of award movements over the year to 31 December 2009 is shown below:Numberof shares’000Weighted averageshare priceat dateof exercise2009 2008Number ofshares’000Weightedaverageshare priceat dateof exerciseOutstanding at 1 January 2,099 – 1,282 –Granted 655 – 967 –Forfeited/expired (2) – (96) –Exercised (219) 351.7p (54) 270pOutstanding at 31 December 2,533 – 2,099 –Exercisable at 31 December – – 17 –The weighted average exercise price for awards granted under this scheme is £nil (2008 – £nil).

Savills plcReport and Accounts 2009 9527. Share-based payment continuedFair value of optionsOptions and awards for the DSBP, Sharesave Scheme and ESOS were valued at fair value using the Actuarial Binominal modelof Lane Clark & Peacock actuaries.The key assumptions used in the calculation are as follows:Risk free rate2.1% p.a. – 5.0% p.a. depending on grant date and expected lifeVolatility28% p.a. – 51% p.a. depending on grant dateEmployee turnover2.5% p.a. for DSBP and Sharesave and zero for ESOSEarly exercise50% of employees exercise early when options and awards are 20% in the moneyPerformance criteriaAll vest after three years (only relevant for ESOS)The expected volatility is measured over the three or five years prior to the date of grant to match the vesting period of the award.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 theoption or award.Fair value of options and awards at grant dates are:GrantDSBP 2004 15 March 2004 186.5DSBP 2005 15 March 2005 278.2DSBP 2006 13 March 2006 596.0DSBP 2007 19 March 2007 656.0DSBP 2008 17 March 2008 328.3DSBP 2009 17 April 2009 288.9Sharesave 2006 5 May 2006 232.0Sharesave 2007 31 October 2007 96.0Sharesave 2009 29 October 2009 129.9DSP 2006 10 October 2006 560.5DSP 2007 19 March 2007 656.0DSP 2007 17 September 2007 408.8DSP 2008 17 March 2008 328.3DSP 2008 23 September 2008 282.8DSP 2008 7 October 2008 239.0DSP April 2009 17 April 2009 288.9DSP September 2009 10 September 2009 351.9ESOS 2004 30 March 2004 73.5ESOS 2005 30 March 2005 102.8ESOS 2006 13 March 2006 189.0ESOS 2008 16 April 2008 78.7ESOS 2009 17 April 2009 136.8The total charge for the year relating to employee share-based payments plans was £9.8m (2008 – £10.0m), all of which related toequity-settled share-based payment transactions. After deferred tax, the charge was £7.0m (2008 – £9.2m).Grant dateFair valuepenceOur results

96Notes to the financial statementscontinuedSavills plcReport and Accounts 200928. Retained earnings and other reservesShare-basedpaymentsreserve£mGroupBalance at 1 January 2009 24.3 (30.8) 99.3 92.8 0.3 28.3 0.9 29.5Treasuryshares£mProfit and lossaccount*£mTotal retainedearnings*£mCapitalredemptionreserve£mForeignexchangereserves£mRevaluationreserves£mProfit for the year – – 8.9 8.9 – – – –Other comprehensive income – – (8.1) (8.1) – (9.4) (0.5) (9.9)Employee share option scheme:– Value of services provided 9.8 – – 9.8 – – – –– Exercise of options (7.7) 6.3 1.4 – – – – –Purchase of treasury shares – (4.7) – (4.7) – – – –Disposals (net of tax) – – (0.1) (0.1) – – – –Dividends – – (7.4) (7.4) – – – –Balance at 31 December 2009 26.4 (29.2) 94.0 91.2 0.3 18.9 0.4 19.6Total otherreserves£mBalance at 1 January 2008 15.8 (34.6) 146.3 127.5 0.3 2.2 1.4 3.9Loss for the year – – (11.3) (11.3) – – – –Other comprehensive income – – (11.4) (11.4) – 25.9 (0.4) 25.5Employee share option scheme:– Value of services provided 10.0 – – 10.0 – – – –– Exercise/withdrawal of options (1.5) 3.8 (2.3) – – – – –Disposals (net of tax) – – – – – 0.2 (0.1) 0.1Dividends – – (22.0) (22.0) – – – –Balance at 31 December 2008 24.3 (30.8) 99.3 92.8 0.3 28.3 0.9 29.5* Included within retained earnings on the face of the Statement of Financial Position is tax on items taken directly to equity (Note 12), share-based payments reserve and retainedearnings as disclosed above.29. Capital commitmentsContracts placed for future capital expenditure not provided in the financialstatements 2.1 1.8 – –2009£mGroup2008£m2009£mCompany2008£mAt 31 December 2009 the Group held a conditional commitment to co-invest £0.8m in the Cordea Savills UK Ventures Fund and £1.3min the Cordea Savills Italian Opportunities Fund 2.30. Contingent liabilitiesIn common with comparable professional services businesses, the Group is involved in a number of disputes in the ordinary course ofbusiness. Provision is made in the financial statements for all claims where costs are likely to be incurred and represents the cost ofdefending and concluding claims. The Group carries professional indemnity insurance and no separate disclosure is made of the costof claims covered by insurance as to do so could seriously prejudice the position of the Group.

Savills plcReport and Accounts 2009 9731. Operating lease commitments – minimum lease paymentsGroup2009£mProperty leases Other leases TotalCommitments under non-cancellable operatingleases expiring:Within one year 18.4 17.3 2.0 2.2 20.4 19.5In one to five years 50.3 55.2 2.1 2.9 52.4 58.1After five years 24.0 36.3 – 0.6 24.0 36.992.7 108.8 4.1 5.7 96.8 114.52008£m2009£m2008£m2009£m2008£mOur resultsCompany2009£mProperty leases Other leases TotalCommitments under non-cancellable operatingleases expiring:Within one year – 0.7 – – – 0.7In one to five years – 2.4 – – – 2.4– 3.1 – – – 3.1Significant operating leases relate to the various property leases for Savills offices in the United Kingdom, Europe and Asia Pacific.There are no significant non-cancellable subleases.32. Cash generated from operations2008£m2009£mYear ended2009£m2008£mGroupYear ended2008£m2009£mYear ended2009£m2008£mCompanyYear ended2008£mProfit/(loss) for the year 9.2 (12.3) 3.1 61.0Adjustments for:Income tax (Note 12) 4.3 4.6 (2.0) (0.9)Depreciation (Note 16) 7.0 7.2 0.4 0.6Amortisation of intangibles (Note 15) 3.6 5.0 0.3 0.2Loss on sale of property, plant and equipment 0.2 0.3 – –Impairment of assets (Note 15, 17(b) and 24) 4.3 37.0 – –Profit on disposal of associate, joint ventures and available-for-sale investments – (17.4) – –Other exceptional items – 13.8 – 0.6Net finance income (Note 11) – (2.5) (2.0) (3.6)Share of post-tax profit from associates and joint ventures (Note 17(a)) (2.6) (0.5) – –Dividend in specie from subsidiary – – – (42.1)Exchange movement on operating activities 2.7 0.6 3.8 –Increase/(decrease) in provisions 1.2 0.9 (0.3) 0.2Decrease in employee and retirement obligations (0.5) (1.5) – –Charge for share-based compensation 9.8 10.0 0.3 0.3Exercise of share options – – (6.3) (3.8)Operating cash flows before movements in working capital 39.2 45.2 (2.7) 12.5(Increase)/decrease in work in progress (0.1) 0.3 – –Decrease/(increase) in current trade and other receivables 1.0 71.6 (2.6) (1.6)Increase/(decrease) in current trade and other payables 6.1 (103.0) 6.8 (8.2)Cash generated from operations 46.2 14.1 1.5 2.7

98Notes to the financial statementscontinuedSavills plcReport and Accounts 200933. Reconciliation of opening to closing cash net of debtFor the year ended 31 December 2009At 1 January£mNon-cash flowmovements£mCash flows£mExchangemovement£mAt 31 December£mCash and cash equivalents 75.3 – 13.2 (6.9) 81.6Bank overdrafts – – (0.7) – (0.7)75.3 – 12.5 (6.9) 80.9Bank loans (20.9) – 4.5 2.8 (13.6)Loan notes (8.7) – 6.9 0.8 (1.0)Cash and cash equivalents net of debt 45.7 – 23.9 (3.3) 66.3For the year ended 31 December 2008At 1 January£mNon-cash flowmovements£mCash flows£mExchangemovement£mAt 31 December£mCash and cash equivalents 110.7 – (50.9) 15.5 75.3Bank overdrafts (0.3) – 0.3 – –110.4 – (50.6) 15.5 75.3Bank loans (19.4) – 6.9 (8.4) (20.9)Loan notes (13.5) – 4.0 0.8 (8.7)Cash and cash equivalents net of debt 77.5 – (39.7) 7.9 45.734. Related party transactionsThe 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 £2.6m(2008 – £5.6m).Loans to related partiesLoans to associates and joint ventures are disclosed in Note 17(a). All loans to associates and joint ventures are non-interest bearing.Company transactionsThe Company provided corporate function services to its subsidiaries at an arm’s-length value of £9.5m (2008 – £11.2m).Dividends received from subsidiaries were £nil (2008 – £37.5m). Amounts outstanding from subsidiaries as at 31 December 2009 aredisclosed in Notes 19 and 21.35. Events after the balance sheet dateSavills Sweden ABOn 11 January 2010, the Group acquired 47.4% shares in Savills Sweden AB. This takes the Group’s shareholding to 98.4%.Cash consideration was paid of £0.9m and goodwill on acquisition of £1.0m has been provisionally determined.Cordea Savills LLPSavills Investments Limited, which holds 60% of the voting rights in Cordea Savills LLP, the Group's fund management business, hasentered into a conditional agreement with the other members who hold voting rights in Cordea Savills to acquire their B MemberInterests, which represent 40% of the voting rights in Cordea Savills.Total consideration of up to £15.4m of which £4.6m will be paid on transaction close with another £4.5m payable in equal instalmentson the first and second anniversaries, and up to a further £6.3m on the second anniversary subject to Cordea Savills earningsperformance over the period. All consideration payments will be settled in cash out of existing resources, including debt facilities.The transaction is conditional on shareholder approval, which will be sought at the General Meeting to be held on 24 March 2010.

Shareholder informationSavills plcReport and Accounts 200999Key dates for 2010Annual General MeetingFinancial half year endAnnouncement of half year resultsDate5 May30 June26 AugustWebsiteVisit our investor relations websitewww.savills.com for full up to date investorrelations information, including the latestshare price, recent annual and half yearreports, results presentations andfinancial news.Shareholder enquiriesFor shareholder enquiries please contactour Registrars, Equiniti. For generalenquiries contact 0871 384 2018 between08.30 and 17.30 on each business day.For further administrative queries inrespect of your shareholding pleaseaccess our Registrars’ website atwww.shareview.co.ukElectronic communicationsIf you would prefer to receive shareholdercommunications electronically in future,including your annual and half-yearlyreports and notices of meetings,please visit our Registrars’ website,www.shareview.co.uk and follow the link to‘Sign up for paper-free communications’.Professional advisers andservice providersSolicitorsCMS Cameron McKennaMitre House160 Aldersgate StreetLondonEC1A 4DDRegistrarsEquinitiAspect HouseSpencer RoadLancingWest SussexBN99 6DAAuditorsPricewaterhouseCoopers LLP1 Embankment PlaceLondon WC2N 6RHJoint StockbrokersUBS Investment Bank1 Finsbury AvenueLondon EC2M 2PPNumis Securities LtdThe London StockExchange Building10 Paternoster SquareLondon EC4M 7LTPrincipal BankersBarclays Bank Plc1 Churchill PlaceLondon E14 5HPCautionary note regarding forwardlookingstatementsCertain statements included in this AnnualReport are forward-looking and aretherefore subject to risks, assumptions anduncertainties that could cause actual resultsto differ materially from those expressed orimplied because they relate to futureevents. These forward-looking statementsinclude, but are not limited to, statementsrelating to the Company’s expectations.Forward-looking statements can beidentified by the use of relevant terminologyincluding the words: ‘believes’, ‘estimates’,‘anticipates’, ‘expects’, ‘intends’, ‘plans’,‘goal’, ‘target’, ‘aim’, ‘may’, ‘will’, ‘would’,‘could’ or ‘should’ or, in each case, theirnegative or other variations or comparableterminology and include all matters that arenot historical facts. They appear in anumber of places throughout this AnnualReport and include statements regardingour intentions, beliefs or currentexpectations and those of our officers,directors and employees concerning,amongst other things, our results ofoperations, financial condition, liquidity,prospects, growth, strategies and thebusinesses we operate. Other factors thatcould cause actual results to differ materiallyfrom those estimated by the forwardlookingstatements include, but are notlimited to:− global economic business conditions− monetary and interest rate policies− foreign currency exchange rates− equity and property prices− the impact of competition, inflationand deflation− changes to regulations, taxesand legislation− changes to consumer saving andspending habits; and− our success in managing the abovefactors.Consequently, our actual future financialcondition, performance and results coulddiffer materially from the plans, goals andexpectations set out in our forward-lookingstatements. The Company undertakes noobligation to publicly update any forwardlookingstatement, whether as a result ofnew information, future events or otherwise.

100Savills plcReport and Accounts 2009TT–COC–002238Design and production: Radley Yeldar ry.comPrint: Granitethink 4 bright is produced with 100% ECF (Elemental Chlorine Free)pulp that is sourced from carefully managed and renewedcommercial forests, certified in accordance with the FSC (ForestStewardship Council). The range is fully recyclable andmanufactured within a mill which is registered under the Britishquality standard of BS EN ISO 9001–2000 and the environmentalstandard of ISO 14001.

Savills plc20 Grosvenor HillBerkeley SquareLondon W1K 3HQT: +44 (0)20 7499 8644F: +44 (0)20 7495 3773www.savills.comRegistered in EnglandNo. 2122174