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Notes to the EEV Basis ResultsI. Basis of PreparationThe interim supplementary information on pages 31 to 40 shows the Group’s results for the six months ended30 June 2011 as measured on a European Embedded Value (‘EEV’) basis. For interim reporting purposes thedisclosure has been reduced from that which would be required under the EEV Principles. The results of thelife, pension and investment business, including unit trust business, undertaken by the Group are measured ona basis determined in accordance with the EEV Principles issued in May 2004 by the Chief Financial OfficersForum, a group of chief financial officers from 19 major European insurers, as supplemented by the AdditionalGuidance on EEV disclosures in October 2005 (together ‘the EEV Principles’), with the exception of:–– Corporation Tax ChangesFurther to the plans announced last year to reduce the rate of corporation tax over four years, the Budget on23 March 2011 accelerated this, setting out plans to reduce the rate of corporation tax from 26% to 25% forthe 2012/2013 tax year with further 1% reductions planned in each of the following two years. Thisvaluation has been prepared on the basis of the continuation of rates of taxation in place at 30 June 2011.–– New BusinessConsistent with prior reporting periods, the value of contractual incremental premiums to existing businessis treated as new business in the year of the increment, rather than at the outset of the policy. This approachbetter reflects the way the Group manages its business.The treatment of all other transactions and balances is unchanged from the primary financial statements on anIFRS basis.Under the EEV Methodology, profit is recognised as it is earned over the life of the products within thecovered business. The embedded value of the covered business is the sum of the shareholders’ net worth inrespect of the covered business and the present value of the projected profit stream.II. METHODOLOGY AND ASSUMPTIONSThe methodology used to derive the European Embedded Values at June 2011 is unchanged from that used atthe end of 2010 (and also from that used at June 2010) and is set out in detail on pages 126 and 127 of the 2010Report and Accounts.Apart from the assumptions set out below, there have been no changes to assumptions from those used at theend of 2010 and set out in detail on pages 127 and 128 of the 2010 Report and Accounts.34St. James’s Place plc Registered No. 3183415