Annual Report 2007


Argentina               
                Austria                 
                Azerbaijan              
                Bahrain                 
                Bangladesh              
 G4S plc ANNUAL REPORT AND              
 BarbadosGBelgiumACCOUNTS 2007          
                Bhutan                  
                Bolivial                
                                        
                Botswana                
                Brunein                 
                B ulgaria               
                                        
                Cambodia                
                                        
                Cameroon                
                                        
                Canada                  
                Chiler                  
                Chinaa                  
                Colombiad               
                C osta Rica             
                Cote d'Ivoirec          
                Cyprusu                 
                Czech Republict         
                                        
                Democratic Republic of  
                Congo                   
                                        
                Denmark                 
                                        
                Dominican Republic      
                                        
                Ecuador                 
                Egyptd                  
                El Salvador1Estonia     
                Finland                 
                                        
                G ambia                 
                                        
                Ghana                   
                Greece                  
                                        
                Guam                    
   A World of   Guatemala0              
                Guinea                  
                Honduras                
                Hong Kong               
                Hungary                 
                India                   
 Security                               
 SolutionsIndonesiaIrelandIsrael        
                Jamaica                 
                Jordan                  
                Kazakhstan              
                Kenya                   
                Kuwait                  
                Latvia                  
                Lebanon                 
                Lesotho                 
                Lithuania               
                Luxembourg              
                Macau                   
                Madagascar              
                Malawi                  
                Malaysia                
                Mali                    
                Malta                   
                Mauritania              
                Mauritius               
                Mexico                  
                Morocco                 
                Mozambique              
                Namibia                 
                Nepal                   
                Netherlands             
                Nicaragua               
                Nigeria                 
                Northern                
                Mariana Islands         
                Norway                  
                Oman                    
                Pakistan                
                Papua New Guinea        
                Paraguay                
                Peru                    
                Philippines             
                Poland                  
                Puerto Rico             
                Qatar                   
                Romania                 
                Russia                  
                Saudi Arabia            
                Serbia                  
                Sierra Leone            
                Singapore               
                                        
                Slo vakia               
                Slovenia                
                South Africa            
                South Korea             
                Sri Lanka               
                Sweden                  
                SyriaTaiwan             

Crawley, West Sussex          Tanzania            
RH10 9UN, UK                                      
                              Thailand            
Telephone:+44 (0)1293 554 400 Trinidad & Tobago   
                              Turkey              
Registered no. 4992207        Turkmenistan        
                              Uganda              
www.g4s.com                   Ukraine             
                              United Arab Emirates
                              United Kingdom      
                              United States       
                              Uruguay             
                              Uzbekistan          
                              Yemen               
                              Zambia              

SECURE SOLUTIONS 
A trusted partner

•  UK cash management centre network - processing 
  £59bn per year on behalf of commercial banks    
• Nine juvenile and adult custody facilities in UK
  and USA                                         
• Eight immigration facilities in the Netherlands 
• Operation of police custody suites in the UK    
• Design, construction, management and finance    
  of government facilities (PFI)                  
• Risk management and consultancy services        
• Event security                                  
  • Wimbledon Tennis Championships                
  • Alpine World Ski Championships                
  • Political party conferences and events        
• Aviation Security                               
  • Schiphol International Airport, Netherlands   
  • London Heathrow Airport                       
  • OR Tambo International Airport, Johannesburg  
  • OSL Airport, Oslo                             
• Fire Protection & Emergency Response            
  • NASA Ames Research Center,California          
  • Kennedy Space Center                          

  SECURE LOGISTICS  
Unrivalled expertise

• Cash services operations in 64 countries with
  45,000 employees                             
• Over 500 cash management locations operating 
  9,000 vehicles                               
• Transporting 90% of UK bank note volumes -   
  £300 billion annually                        
• Management of 30,000 ATMs across Europe      
  and North America                            
• Secure international transportation of cash  
  & valuables between 58 countries             
• Secure repatriation of immigration detainees 
• Secure prisoner escorting                    
• Document and data storage and distribution   

     PEOPLE MANAGEMENT      
Over 530,000 staff worldwide

• Recruitment and selection                   
• Staff vetting                               
• Training and development                    
• Deployment and scheduling                   
• Working in partnership with governments to  
  introduce security officer licensing        
• Creating security experts                   
• Award winning Executive Leadership Programme

TECHNOLOGY                               
Integrated approach to security solutions

• CCTV                              
• Intruder alarms                   
• Physical security                 
• Access control                    
• X-Ray                             
• Explosives detection equipment    
• Alarm monitoring and response     
• Vehicle tracking                  
• ATM engineering                   
• Electronic monitoring of offenders
• Retail cash management solutions  

     GOVERNMENT EXPERTISE      
A major provider of services to
governments                    

USA                                           
• Protection of US defence facilities         
• Support to the US military                  
• US embassy security in 39 countries         
•  Fire fighting for US armed forces in Iraq  
UK                                            
• Home Office - eight justice sector contracts
• Bank of England cash management             
• Armed forces pre-deployment training        
Europe                                        
• Protection of German army facilities        
• European parliament buildings               
• NATO buildings                              
• Kazakhstan pipeline protection              

G4S IS THE WORLD'S LEADING INTERNATIONAL 
SECURITY SOLUTIONS GROUP,WHICH           
SPECIALISES IN ASSESSING CURRENT AND     
FUTURE RISKS AND DEVELOPING SECURE       
SOLUTIONS TO MINIMISE THEIR IMPACT ACROSS
A WIDE RANGE OF GEOGRAPHIC MARKETS       
AND BUSINESS SECTORS.                    

G4S is a major provider of risk management and protection to    
governments and major corporate customers around the world and  
is an expert in all aspects of local and international secure   
logistics.                                                      

G4S is the largest employer quoted on the London Stock
Exchange and has a secondary stock exchange listing in
Copenhagen. G4S has operations in over 110 countries  
and has over 530,000 employees.                       

 2 Financial Performance  31 Report of the Directors 
   for 2007 
 4 Chairman's Statement   34 Corporate Governance Statement 
 6 Chief Executive's      37 Directors' Remuneration Report 
   Review 
10 Security Services      45 Statement of directors' responsibilities in
respect of the 
                             annual report 
14 Cash Services             and the financial statements 
16 Financial Review       46    Independent auditor's report    to the members 
22 Our People             48 Consolidated income statement 
24 Corporate Citizenship  49 Consolidated balance sheet 
28 Board of  Directors    50       Consolidated cash flow      statement 
30 Executive Management   51 Consolidated statement of recognised income and
expense 
                          52 Notes to the consolidated financial statements 
                          97 Parent company balance sheet 
                          98 Notes to the parent company financial statements 
                         106 Group financial record 
                         107 Notice of Annual General Meeting 
                         110 Recommendation and explanatory notes relating to
business 
                             to be conducted 
                             at the Annual General Meeting on 29 May 2008 113
Financial 
                             calendar and corporate addresses 

THE GRGLOBAL LEADER IN PROUP VISION IS TO BE RECOGNISED AS THE IN 2007 WE UNDER 
                                OVIDING SECURITY SOLUTIONS.DEVELOP TOOK A
STRATEGIC 
                                REVIEW TO FOCUSED ON DELIVERING THE NEXT PHASE
OF A 
                                        THE GROUP STRATEGYAND DEVELOPMENT FOR 
                                                        THE FUTURE.CCELERATED
GROWTH 

a160 On the following pages we provide a brief overview
of the group strategy,which was launched to the capital
markets in November 2007.                              

MERGER & INTEGRAPHASE ITION DELIVERY

                        1                                       
                        completed merSuccessfully&integrationger
  Delivered strong7gro                                          
perfwth and EBITormanceA  Delivered syner 2                     
                                                  benefits  gy  

  Created6one br     Spread Cash3                    
one visionand and Serto kvices experey businessestise

                                                                     4          
mConf                                                                           
                                                        5                       
ulti-serirmedstrategyvicein devgeogrCreated uniqueeloping maraphic footprkintets

From 2004 to 2007 the group strorganisations,achieving the benefategy fits of   
the merocused on integrger that wating two international stakeholders and       
continuing to deliver strong business perfe promised to ourormance.             

ACCELERATED GROPHASE IIWTH & DEVELOPMENT

                                         1 
                                       in core basic serUnderlying trendis for 
                                       continvices 
                                        margin pressureuedWill require phased7 
                        organisational         Strategic ev 2 
                                                of our serolution 
        will takdevelopment - whiche            pro 
              beneftime to shoitsw            oppor vides further 
                                              longer tertunity fmor ourplans 
     Our gro6requires the addition ofwth           Demonstr3 
     story 
fur                                           capabilities outside of ating our 
capabilities in order tother               enhance reputation andcore basic
services 
‘intelligence'to ourcreate markets         willperception 
              Extending from cur5rent           4 
            logical,core competencies isbelievable andlong-ter 
                                             Repositioning around 
                                           the potential tom growth has 
       haachievabve strong refle and wealreadyerencesmarimproket rve our ating 

accelerOur strategy review in 2007 supported the view that in order to drivefrom
our core capabilities to devated growth and development,elop total rwe would    
need fisk management andocus on developing outsourcing solutions across our     
service range and geographies.                                                  

DEVELOPING FROM OUR CORE CAPABILITIES

Strategic Goals

       Deliver fully outsourced solutions:                      
MANAGE a160 a160 Output based contrAbility to share in gainsacts























Deliver across all services according to market need, in a phased and           
evolutionary implementation                                                     

management of rAt the heart of our strisk - and therefategy is the need to      
takore delive greater responsibility for the identification andof customer      
segments.ering fully outsourced secure solutions to a wide range                

HIGH SECURITY FEXAMPLE:ACILITY OUTSOURCING

MANAGE High Security Facility Outsourcing

       Risk Management & ConsultancySolutions DesignANALYSISSector
ExperSecurity 
       Facilities Management AND 
DESIGN Health & SafSafety Consultancyety   Infrastructure Managem tise & 
       Training                            Understanding 
          Health & Safety Certificationent      Health & Safety
Certificationent 
         SubcontrSupervision / Integration 

Measurement & Reporactor Managementting Systems 






        
        
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CASH OUTSOURCINGEXAMPLE:

Cash Centre Outsourcing Retail Solution - Outsourcing Cash Management

MANAGE    E2E ATM Estate Management      Secure                   Secure Back
Office 
                                         Back                     Outsourcing 
                                         Office 
                                         Outsour- 
                                         ing 
         Bank Note IntegrQuality Certificationity /Bank Note Cycle
ConsultancyReconciliation 
         and Cash Retailer Cash Cycle Consultancy 
                                                                               
   Procedure 
                                                                               
   Training 
ANALYSIS   Secure Processing Site 
AND      Security                        Bank &                   Bank &   Bank
& Retailer 
         Certification                   Retailer                 Retailer Cash
SerStaff 
                                         Cash                     Cash    
Security 
                                         SerStaff                 SerStaff
Trainingvices 
                                         Security                 Security 
                                         Trainin-                        
Trainin- 
                                         vices                    vices 
DESIGN   Procedures ComplianceReconciliation and CashManagement / EffCash 
         Pipe-lineiciencySecurity Procedures Audit e rs 
                                   Central Bank             Central Bank 
                                   Note Integrity           Note Integrity 
               A 
             Machine MonitorTM / Retailing Central Bank Reporting              
   Production 
                                                                               
   PlanningC- 
                                                                               
   sh Centre 
         Cash Forecasting              Note / Coin Issuage / Destruction       
   Reconcili- 
                                                                               
   tion 
                                                                               
   Reporting 
        Storage &        In-TransitBulk  On-Site                  On-Site      
   ATM / 
        Retrieval                  Proce-      Processi-                       
 Processing       Retail 
                                   sing  g                                     
   Machine 
OPERATE 























































































CRIMINAL JUSTICE SYSTEMEXAMPLE:

Criminal Justice System Outsourcing

MANAGE   Pol-      Court               Prison                     Probation    
                  Immigration 
         ce 
         Out-     Outsourcing        Outsourcing                 Outsourcing   
                  Outsourcing 
         our- 
         ing 
                Offender Management Progr 
ANALYSIS            Facility Design - Prisons, policeammes eg EM,courts 
AND 
DESIGN        CrSentencing /   CrSentencing / 
              Piminal Justice  Piminal Justice 
              olicy            olicy 
                          Government Sector ExperTrainingtise 
                        Measurement & Reporting Systems 
                                      SubcontrSupervision / Integractor
Managementation 




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FRTO OM THE GLOBTHE WORLD'S LARGEST SECURITY COMPAL LEADER IN SECURITY          
SOLUTIONSANY                                                                    

Repositioningthe groupSustainab(abovle growthgroe marketImprovedwth             
rates)quality ofearnings                                                        

 Increasing                                                         
relationshipcustomer diffCompetitive                                
                                     Aligned with                   
                       erentiation   outsourcingworld classproviders

“critical”Seen asservice marApproprket ratingiateshareholderIncreasedreturn

The new strby the group and will also benefategy will deliver the accelerit the 
entire rated growth and devange of G4S stakelopment requiredeholders.           

THE GROUP VALUES ARE A WAY OF DESCRIBING WHAT THE ORGANISATION  
STANDS FOR. They are communicated throughout the organisation to
ensure that everyone understands their role in delivering the   
strategy. They also form a means by which the strategy can be   
implemented across the group.                                   

Each value has a senior executive “owner” within the organisation,
responsible for driving through its implementation.               

a160 INTEGRITY           a160 CUSTOMER FOCUS              
We can always be trusted We have close, open relationships
to do the right thing    with our customers that generate 
                         trust and we work in partner ship
                         for the mutual benefit of our    
                         organisations                    

a160 BEST PEOPLE                    a160 PERFORMANCE                  
We always take care to employ       We challenge ourselves to improve 
the best people, develop their      performance year-on-year to create
competence, provide opportunity     long-term sustainability          
and inspire them to live our values                                   

a160 TEAM WORK &               a160 EXPERTISE                   
COLLABORATION                     We develop and demonstrate our
We collaborate for the benefit    expertise through our innovative
of G4S as a whole                 and leading edge approach to  
                               creating and delivering the right
                                  solution                      

2

CONTINUING TURNOVER BY SERVICE CONTINUING PBITA BY SERVICE*

Cash         Cash        
Services 22% Services 31%

Security     2007             
                  Security    
Services 78%      Services 69%

Cash         Cash        
Services 21% Services 30%

Security     2006** Security    
Services 79%        Services 70%

CONTINUING TURNOVER BY GEOGRAPHY CONTINUING PBITA BY GEOGRAPHY*

New                       
Markets 22% NewMarkets 27%

Europe 53% 2007           
                Europe 55%

North                  
America 25% North      
            America 18%

New         New        
Markets 18%            
            Markets 21%

            Europe 55% 2006**             Europe 58%
North                         North                 
America 27%                   America 21%           

Financi- 
l 
Perform-         *  PBITA= Profit before interest,taxation and amor tisation of 
nce         acquisition-related intangible assets. 2005 & 2006 at 2007 exchange 
            rates. 
for 2007 ** 

G4S plc | Annual Report & Accounts 2007 3

Group Total**

TURNOVER     PBITA    MARGIN
   £m         £m        %   
5,000       - 350      7.00  
            -                
            -                
            -                
            -                
            -                
            4               
                     -       
                     -       
                     -       
                     -       
                     1      
            - 3004,000       
            -                
            -                
            -                
            -                
            -                
            2               
     3,633.9         -       
                     -       
                     -       
                     -       
                     1      
             250     -       
                     -       
                     -       
                     -       
                     9      
                      6.75  
3,000        200            
                      6.50  
2,000        150            
             100      6.25  
1,000                       
               50           
    0           0     6.00  
     2005            -       
                     -       
                     -       
                     5      

Security Services

TURNOVER PBITA MARGIN
     £m       -      %
              m      
  4,000       -       
              -       
              0      
                 7.00
        -             
        -             
        -             
        -             
        -             
        -             
        8            
  3,500 -      -       
        -      -       
        -      -       
        -      -       
        -      7      
        -             
        1            
              -       
              -       
              0      
  3,000 -         6.75
        -             
        -             
        -             
        -             
        -             
        9            
  2,500       -       
              -       
              0      
  2,000          6.50

1,500 100

1,000    6.25
      50     
  500        
    0  0 6.00
     -   -     
     -   -     
     -   -     
     5  5    

Cash Services

TURNOVER PBITA MARGIN
     £m       -      %
              m      
  1,000 -      -   11.0
        -      -       
        -      0      
        -             
        6            
        -             
        -             
        -             
        -             
        1            
    800 -      -       
        -      -       
        -      0      
        -             
        0            
              -       
              -       
              -       
              4      
              -   10.5
              0      

600 10.2

    60 10.0
400        
    40     
        9.5
200 20     
  0  0  9.0
   -   -     
   -   -     
   -   -     
   5  5    

4

IT GIVES ME PLEASURE TO REPORT THESE STRONG RESULTS WHICH 
NOT ONLY CONTINUE TO DEMONSTRATE THE WORTH OF THE MERGER  
WHICH RESULTED IN THE FORMATION OF THE COMPANY IN 2004,   
BUT ALSO REFLECT THE TREMENDOUS PROGRESS THAT HAS TAKEN   
PLACE THROUGHOUT THE GROUP SINCE THEN.                    

Alf Duch-Pedersen
Chairman         

Performance 2007 has seen the group deliver a solid performance, maintaining    
good margins and growth, particularly in new mar kets. Profit before interest,  
taxation and amortisation increased by 16.8%* to £312.1m and turnover grew      
14.5%* to £4,490.4m. Our margin has increased to 7.0%; organic growth was strong
and improved to 9.1% and adjusted earnings per share increased by 10.7% to      
13.4p.                                                                          

* To show a fair comparison,constant (2007) exchange rates are used.

Dividend The directors recommend a final dividend of 2.85p or DKK 0.279 per     
share, payable on 6 June 2008, which, with the interim dividend of 2.11p or DKK 
0.232 per share paid on 16 November 2007, makes a total dividend of 4.96p or DKK
0.511 per share for the year ended 31 December 2007. This represents an increase
of 17.8% over the total dividend for 2006 and reflects a continuation of the    
board's stated aim to reduce the company's target dividend cover to two and a   
half times over the medium term.                                                

Chairman's
Statement 

G4S plc | Annual Report & Accounts 2007 5

AS WE MOVE TOWARDS THE NEXT STAGE OF a160 JANUARY 
OUR DEVELOPMENT,INVOLVING GREATER 
EMPHASIS ON LONGER-TERM 
RELATIONSHIPS WITH CUSTOMERS 
                                          G4S divests its German cash 
REQUIRING EVER GREATER EXPERTISE,I        ser vices business. 
AM VERY OPTIMISTIC ABOUT THE 
OPPORTUNITIES TO CONTINUE THIS       a160 FEBRUARY 
PROCESS AND TO GROW OUR BUSINESS 
EVEN FURTHER. 
                                          G4S announces the acquisitionof
Fidelity Cash 
                                          Management Services 

                                                            (Pty) Ltd, the
market leader 
                                                            in cash 
                                                             services in South
Africa. 
                                                            a160 MARCH 
                                                            G4S reports 2006
operating 
                                                            profits 
                                                            up by 10% and
turnover growth 
                                                            of 
                                                               8.4%. 
The Board This is my second chairman's statement and the 
first covering a period when I have been chairman of the 
board throughout the year.I am ver y pleased to be able to 
report that the board continues to work 
                                                            a160 APRILDungavel
House 
                                                            Immigration 

well; combining a broad spectrum of experience with great   Removal Central,
operated by 
enthusiasm for the task of growing and developing the       G4S 
business. 
                                                            Justice Services
(UK) is 
                                                            declared as 
                                                            being “… the
best-run IRC we 
                                                            have 
As mentioned elsewhere in this report, Sir Malcolm          inspected” by Her
Majesty's 
Williamson has decided to retire from the board this year   Chief 
and so will not be seeking re-election at the Annual 
General Meeting in May.Malcolm's contribution to the 
                                                            Inspector of
Prisons. 

board since the company was formed in 2004 has been extremely         a160 MAY 
valuable and his experience has contributed much to ensure the board 
has functioned efficiently.I would like to record my personal thanks 
to Malcolm for 
                                                                           The
U.S. Department of Energy 
                                                                           and
National Nuclear Security 
all that he has done for the group. Lord Condon has kindly agreed to      
Administration select Wackenhut 
take over from Malcolm as senior independent director. 
                                                                          
Services, Inc for the Oak Ridge 
                                                                          
Complex Protective Services 
Our Staff The board takes every opportunity it can to meet the            
contracts. 
group's employees who work so hard in what are often difficult and 
occasionally dangerous circumstances to perform the services the 
group provides for its 
                                                                      a160 JUNE 
customers                in so many parts of the world. We never fail      G4S
launches its innovative global 
                         to be impressed by the enthusiasm and 
                         dedication sports development programme to 
which we find amongst management and staff at all 
levels. support the next generation of sports 
We have seen that this spirit manifests itself not only during            
stars, the G4S 4teen, and Group 4 
working hours and in the performance of the Securicor plc becomes G4S 
plc. services under taken for customers, but also in the dedication 
which managers show to their staff and which 
both management and staff show towards the communities in which they  a160 JULY 
live. Some of the ways in which individuals within the G4S family 
seek to improve the lives of those around them are described 
elsewhere in 
                                                                           G4S
acquires Omada Fire & 
                                                                          
SecurityGroup,the Irish manned 
                                                                          
security 
this report in greater detail. I am very proud of these examples and       and
fire suppression business. 
of all the many other similar projects undertaken by G4S companies 
and employees around the world. 
                                                                      a160
AUGUST 
The Future As I have mentioned already,the group does   As we have         G4S
is awarded Norway's largest 
not intend to stand still. security contract at OSL,    indicated, we 
Oslo intend to implement a strategy which will bring us 
closer to our customers and which will involve the 
provision 
                                                                          
airport and reports 11.8% turnover 
of more complex solutions to a wider spectrum of customers under          
growth and 15.9% growth in group 
longer term agreements. I believe our company is in excellent shape 
to execute this strategy and to reap the benefits it will bring. 
                                                                          
operating profits for the six months 
                                                                           to
30 June 2007. 
                                                                      a160
SEPTEMBER 
Alf Duch-Pedersen                                                          G4S
wins a ne w contract to provide 
                                                                          
electronic monitoring equipment 
Chairman                                                                   and
services to the Department of 
                                                                          
Corrections in New Zealand. 
                                                                      a160
OCTOBER 
                                                                           G4S
Cash Services (UK) partners 
                                                                           with
SmartWater Technology Ltd, 
                                                                          
specialists in forensic security, 
                                                                           to
protect its valuable cargoes. 
                                                                      a160
NOVEMBER 
                                                                           G4S
launches next phase of strategy, 
                                                                           to
drive accelerated growth and 
                                                                          
development, to the capital markets. 
                                                                      a160
DECEMBER 
                                                                           G4S
announces agreement to 
                                                                          
acquire Global Solutions Limited 
                                                                          
(GSL) and enters the FTSE 100. 

6

WE ARE EXTREMELY PLEASED WITH THE PERFORMANCE OF THE
BUSINESS IN 2007 AND ARE CONFIDENT ABOUT THE FURTHER
DEVELOPMENT OF THE GROUP THIS YEAR.                 

Nick Buckles   
Chief Executive

CHIEF EXECUTIVE'S REVIEW                                                        
2007 Performance In 2006, we raised the group targets in a number of areas      
following a strong business performance in that year and to demonstrate our     
confidence about the future. We set a target for organic growth of 7%, a PBITA  
margin target of 7% within two years and a cash generation target of 85% of     
PBITA.                                                                          

In 2007, we have demonstrated our ability to deliver on our promises, with      
organic growth of 9.1% (more than 2% ahead of target), PBITA margins at 7% (18  
months ahead of schedule) and cash generation ahead of target at 89%.           

         2007 Performance Highlights When we presented our full year results
for 
         2007, we were pleased to report that: > 
           We had very strong organic turnover growth* of 9.1% (2006: 7.1%) > 
           Group turnover* was up 14.5% to £4,490.4 million (2006: £3,923.2m) > 
           PBITA* was up 16.8% to £312.1 million (2006:£267.1 m) > 
           The group PBITA margin* had improved to 7.0% (2006:6.8%) Operating > 
           We had achieved cash flow generation of £276.4 million, representing 
           89% of PBITA (2006:86%) > 
           Adjusted earnings per share had increased by 10.7% to 13.4p (2006: 
           12.1p) & Financial 
         > We would recommend a final dividend of 2.85 pence per share (DKK 
           0.279),up 13.1% on the 
           prior year (2006: 2.52p/DKK 0.277), giving a recommended total
dividend 
           of 4.96 pence per share (DKK 0.511) (2006: 4.21p/DKK 0.463) 
Review 
         * at constant (2007) exchange rates 

G4S plc | Annual Report & Accounts 2007 7

OVERALL,THE OUTLOOK FOR THE BUSINESS IS GOOD AND WE ARE NOT      
EXPECTING THE RECENT ECONOMIC UNCERTAINTIES TO IMPACT OUR ABILITY
TO DELIVER STRONG RESULTS IN THE FUTURE.                         

In developed markets we have achieved a solid result with        a160 WE
ACHIEVED 
organic growth of around 7% and margins in line with the         ORGANIC 
previous year.The increased or ganic growth of 17% and improved 
margins in new markets have 
                                                                    GROWTH OF
9.1% 
driven an overall margin improvement of 0.2% across the group.    - 2% ahead of
target. 

We have introduced the investment community to the next      a160 PBITA MARGINS
REACHED 
phase of our strategy which we believe will drive                 7% 
accelerated growth and development for the group and we have 
already announced a number of acquisitions 
                                                                  - 18 months
ahead 
which will help us steer the strategy forward.                    of schedule. 

I would like to take this opportunity to thank everyone across 
the organisation for contributing to this strong performance. It 
is their commitment and enthusiasm which drives the success of 
the business and I am proud 
                                                                 a160 CASH FLOW 
                                                                 GENERATION 

to be a part of that winning team. WAS 89% OF PBITAagainst a target of 85%.

Strategic Development 
2007 Review - In 2007, we set about reviewing the group         a160 WE HAVE
INTRODUCED 
strategy with a focus on driving accelerated growth and 
development for the future. 
                                                                   A NEW
STRATEGY 
                                                                to drive
accelerated 
                                                                growth 
Our review confirmed a growing trend of pricing pressure in       and
development. 
core basic services and a demand from customers for G4S to take 
a broader role in managing their risks. 

Strategic Goals

       Deliver fully outsourced solutions:
MANAGE a160 a160 Output based contr acts  
         Ability to share in gains        



















                                                                
                                                                
                                                                
 OPERATE Enhancement of core services with supervision & IT:a160
         of core services                                       
                   Delivery                                     
                                                                
                                                                

Deliver across all services according to market need, in a phased and           
evolutionary implementation                                                     

The basic elements of the strategy which resulted from this review include a    
need to add value to the core services that we already provide by taking a      
greater role not just in specialist security areas, but in total outsourcing of 
the management of environments where security and safety is key.                

By doing this G4S becomes a partner with its customers and takes greater        
responsibility for managing entire aspects of their business which are not core 
to them, and where G4S can add value through its security and segment expertise.

For example: 
> High security facility outsourcing in key      > Cash cycle management 
  sectors 
>      ATM network management and servicing      > Risk management and 
                                                   consultancy 
> Prison design and management                   > Offender management
programmes 

Business of this type is usually based on long term contracts with recurring    
revenues, which require commitment from both sides to deliver on promises set   
out at the negotiation stage.                                                   

8

CHIEF EXECUTIVE'S REVIEW (continued)

Strategy Implementation Principles - Security remains at the core of our offer -
it is an area in which we have an extensive amount of expertise across the group
and is fundamental to our service proposition. However,in order to drive growth 
forward at an accelerated level, we will build on the solid foundation that we  
have created in this area.                                                      

Strategy Implementation Principles

Gain a larger share of customer spend and focus:                        
a160a160Build relationships via increased and more senior contact points
Demonstrate awareness of customer needs                                 

 Develop customer driven propositions: 
 a160 Create tailored solutions for specific industry sectors Pa r 
 Add Intelligence: 
 a160 
 a160 
 a160 
                Enable identification of value added solutions to customer
issues as in 
 Develop solid foundation: 
 a160a160Develop appropriate organisational str ucture 
         Further develop market segment understanding 

We will add “intelligence” to our businesses in key areas such as risk          
assessment and consulting and we will add bid capability and project management 
skills to our core competencies.                                                

We will focus on creating customer propositions tailored for specific industry  
sectors which demonstrate G4S expertise in these areas.                         

At the same time, we will build relationships at a senior level within our      
customer organisations and ultimately gain a larger share of customer commitment
and spend on secure outsourcing solutions.                                      

Current Capability - A number of our businesses already provide complete        
outsourced security solutions to our customers where they take total            
responsibility for managing risk and increasing efficiency - it is important to 
spread this experience more widely across the group. We estimate that this type 
of contract represents around 30% of group revenues and we will seek to extend  
this over time.                                                                 

In cases where we do not have the appropriate expertise within the group, we    
will seek to obtain it either by acquiring businesses or by attracting key      
experts to the group.                                                           

Whilst we will seek to develop all businesses in line with the strategy,we will 
focus initially on a few key markets - US, UK, Benelux, South Africa and India. 

Operating  
& Financial
Review     
(continued)

G4S plc | Annual Report & Accounts 2007 9

IN DEVELOPED MARKETS WE HAVE ACHIEVED A SOLID RESULT WITH ORGANIC  
GROWTH OF 7.3% AND MARGINS IN LINE WITH THE PREVIOUS YEAR AT 7.1% -
DEMONSTRATING THAT EVEN IN TOUGHER ECONOMIC ENVIRONMENTS,THE       
UNDERLYING PERFORMANCE ACROSS OUR DEVELOPED MARKETS BUSINESSES IS  
ROBUST AND RELIABLE.                                               

Summary & Outlook We are extremely pleased with the performance of the business 
in 2007 and feel confident about the further development of the group this year.

In developed markets we have achieved a solid result with organic growth of 7.3%
and margins in line with the previous year at 7.1% - demonstrating that even in 
tougher economic environments, the underlying performance across our developed  
markets businesses is robust and reliable.                                      

The increased organic growth of 17% and improved margins in 
new markets have driven an overall margin improvement of 0.2% 
across the group. New markets continue to grow at significant 
rates and with our unique position and experience of operating 
in these markets we are well-placed to continue to drive 
forward the 
                                                               a160 INCREASED
ORGANIC 
performance of our businesses in these countries.                 GROWTH OF 17% 
We have introduced the investment community to the next phase  and improved
margins in 
of our strategy which we believe will drive accelerated growth new 
and development for the group. The strategy focuses on taking 
greater responsibility for 
                                                               markets have
driven an 
                                                               overall 

managing risk on behalf of our customers - extending from our   margin
improvement of 
core capabilities to develop total risk                         0.2% 

management and secure outsourcing solutions across our service     across the 
range and geographies.                                             group. 

In order to achieve this, we need to invest in building our own   a160 OUR
BUSINESS MODEL IS 
capabilities and expertise by continuing to share best practice, 
by developing our senior management population and by acquiring 
businesses and individuals who 
                                                                       ROBUST
AND DEFENDABLE 
bring expertise to   We have already announced a number of             and our
future 
the organisation.    acquisitions which help us drive build upon       strategy
will 
                     our key strengths 
the strategy forward, the most significant being Global Solutions 
Ltd (GSL). to deliver enhanced Overall, the outlook for the 
business is good and we are not expecting the recent economic 
uncertainties to 
                                                                      
performance. 
impact our ability to continue to deliver strong results in the 
future. Our business model is robust and defendable and our 
future strategy will build upon our key strengths to deliver 
enhanced performance. 

10

G4S IS A TRUSTED PARTNER OF COMMERCIAL
 ORGANISATIONS AND GOVERNMENTS AROUND 
THE WORLD AND WE ARE EXPERTS IN       
UNDERSTANDING RISKS AND DEVELOPING    
SECURITY SOLUTIONS TO MANAGE THEM.    

SECURITY SERVICES

* At constant               Turnover      PBITA    Margins Organic
  exchange rates               £m          £m               Growth
                            2007 2006    20072006  2007   -    2007
                                                          -        
                                                          -        
                                                          6       
Europe*                  1,671.31,534.1 109.9101.2 6.6%   -    6.3%
                                                          -        
                                                          -        
                                                          %       
North America*           1,043.8970.8    61.558.2  5.9%   -    7.3%
                                                          -        
                                                          -        
                                                          %       
New Markets*               788.7589.2    63.445.3  8.0%   -   17.0%
                                                          -        
                                                          -        
                                                          %       
Total Security Services* 3,503.83,094.1 234.8204.7 6.7%   -    8.7%
                                                          -        
                                                          -        
                                                          %       
Exchange differences           -106.7       - 6.8                 
At actual exchange rates 3,503.83,200.8 234.8211.5                

The security services businesses continued to perform well in 2007 with good    
organic growth of 8.7% and margins improving to 6.7%.                           

Europe

* At constant          Turnover      PBITA    Margins Organic
 exchange rates           £m          £m               Growth
                       2007 2006    20072006  2007   -    2007
                                                     -        
                                                     -        
                                                     6       
UK & Ireland*         593.0539.7    48.444.1  8.2%   -    6.0%
                                                     -        
                                                     -        
                                                     %       
Continental Europe* 1,078.3994.4    61.557.1  5.7%   -    6.5%
                                                     -        
                                                     -        
                                                     %       
Total Europe*       1,671.31,534.1 109.9101.2 6.6%   -    6.3%
                                                     -        
                                                     -        
                                                     %       

Organic growth in Europe was 6.3% compared to 5.0% in the same period last year.
Margins were maintained at 6.6%.                                                

There was good organic growth of 6.0% in the UK & Ireland and margins remained  
strong at 8.2%. Customer retention rates in the security business were high at  
around 95% and there were a number of significant contract wins in the year.A   
new contr act to assist passengers with restricted mobility at London Gatwick   
Airport will commence in April 2008. Good growth continues in the electronic    
monitoring contract and Parc prison at Bridgend continues to expand.            

Operating  
& Financial
Review     
(continued)

G4S plc | Annual Report & Accounts 2007 11

A number of acquisitions were made in the region aimed at    a160 THERE WAS
GOOD 
increasing the expertise of the group in key sectors in line      ORGANIC 
with the group strategy. The acquisition of GSL was 
announced 
                                                                  GROWTH OF
6.0% 
in December 2007 and this should complete within the first        in the UK &
Ireland 
half of 2008. margins remained strong The Netherlands had a       and 
strong year,increasing revenue and achieving ver y strong 
margins. 
                                                                  at 8.2%. 
The company successfully retained the Schiphol airport 
contract for a fur ther 5 years. Capability-building 
acquisitions were made in the fire and safety training 
sector consolidating 
                                                             a160 IN THE
BALTICS,GROWTH 
its market leading position as a safety and security              WAS OVER 20% 
solutions provider in the country. 

In the Baltics, growth was over 20% and margins improved         and margins 
significantly on the prior year                                  improved 

due to strong price increase programmes across all         significantly on the
prior 
services and the completion of lar ge                      year. 

systems installation projects at Tallinn airport, Riga port a160 IN ROMANIA THE 
and for the Lithuanian customs service.                          BUSINESS 
                                                                 ACHIEVED
EXCELLENT 
There was good growth and strong margins in Denmark despite      GROWTH, 
the business incurring 

significant re-branding costs. Growth in Belgium was slow, but  largely as a
result 
there was a significant improvement in margins from the systems of 
business and through performance management 
                                                                outsourcing by
the 

improvements across the business. Romanian post office.

In Sweden, margins were impacted negatively by           a160 IN MARCH 2008 
restructuring and the loss of the Arlanda airport 
contract in Febr uary although there were some good 
contract wins in the second 
                                                              we announced a
process 
half of the year.2007 was a consolidation year focusing       had commenced for
the 
upon strengthening the management team, right-sizing the 
company and developing a solid platform to execute the 
new strategy. 
                                                              divestment of our 
                                                              security 
                                                              services
businesses in 
                                                              France 
In Romania, the business achieved excellent growth,           and Germany. 
largely as a result of the outsourcing of a wide range 
of security-related services by the Romanian post 
office. 

In Greece, business performance improved compared to the prior year as a result 
of improved control of labour costs. The difficult labour environment in the    
country has now stabilised. New contract wins in the security systems business  
in Israel early in 2008 will add to the good organic growth achieved in 2007.   

In March 2008 we announced a process had commenced for the divestment of our    
security services businesses in France and Germany. These businesses are        
considered to be sub- scale and with our focus on delivering the new group      
strategy in 2008, the funds released will be used to bring additional           
capabilities into the group.                                                    

12

SECURITY SERVICES (continued)

North America

* At constant    Turnover   PBITA Margins Organic
exchange rates      £m        £m           Growth
                  20072006  2007 - 2007   -    2007
                                 -        -        
                                 -        -        
                                 6       6       
North America* 1,043.8970.8 61.5 - 5.9%   -    7.3%
                                 -        -        
                                 -        -        
                                 2       %       

Organic growth in North America was strong at 7.3% overall and margins were     
5.9%.                                                                           

In the United States overall organic growth was solid at around 6%, with around 
9% growth in the commercial sector,lar gely due to the start up and expansion of
the Mexican border control contract which is performing well.                   

There were significant contract bidding and start up costs in the government    
sector in the last quarter of 2007, which meant that margins were held at prior 
year levels. The government business won significant contracts towards the end  
of the year which will flow through in 2008.                                    

In Canada organic growth was strong and margins were maintained at prior year   
levels despite a difficult pricing environment and tight labour markets.        

New Markets

* At constant               Turnover  PBITA Margins Organic
  exchange rates              £m        £m           Growth
                            20072006  2007 - 2007   -    2007
                                           -        -        
                                           -        -        
                                           6       6       
Asia*                      268.9221.9 22.9 - 8.5%   -   17.0%
                                           -        -        
                                           -        -        
                                           6       %       
Middle East*               177.9115.9 14.2 - 8.0%   -   19.7%
                                           -        -        
                                           -        -        
                                           1       %       
Africa*                    183.9139.7 16.0 - 8.7%   -   15.2%
                                           -        -        
                                           -        -        
                                           3       %       
Latin America & Caribbean* 158.0111.7 10.3 - 6.5%   -   16.6%
                                           -        -        
                                           3       -        
                                                   %       
Total New Markets*         788.7589.2 63.4 - 8.0%   -   17.0%
                                           -        -        
                                           -        -        
                                           3       %       

In New Markets, organic growth was strong at 17.0% and margins increased by 0.3%
to 8.0%.                                                                        

Organic growth in Asia was 17.0% and margins improved to 8.5%. In Hong Kong the 
business performed strongly as a result of focusing on key market segments and  
improved opportunities from combined security systems and manned security contr 
acts.                                                                           

Macau continued to grow very strongly along with the region's increasing        
reputation as a venue for conferences, events and exhibitions, resulting in     
increased security spend for both permanent contracts and event security        
services.                                                                       

India continued to perform well with excellent growth of around 28% and strong  
margins. G4S is the second largest private employer in India and we have        
recently won contracts for security at four airports in Delhi, Mumbai, Hyderabad
and Cochin.                                                                     

Operating  
& Financial
Review     
(continued)

G4S plc | Annual Report & Accounts 2007 13

In the Middle East, organic growth was very strong at     a160 ORGANIC GROWTH 
19.7% and margins were at 8.0%, driven by the continuing 
economic boom in the region coupled with a surge in 
tourism. 
                                                               IN ASIA WAS
17.0% 
                                                               and margins
improved to 
                                                               8.5%. 
In Saudi Arabia the acquisition and integration of al 
Majal earlier in the year means that G4S is now the 
market leading security company in the Kingdom. 
                                                          a160 IN THE MIDDLE
EAST, 

In Africa, organic growth was 15.2% and margins improved strongly to ORGANIC 
8.7%. In South Africa                                                GROWTH 

the business is improving, largely as a result of increasing    WAS VERY STRONG 
efficiency in the operations. at 19.7% and margins were 
The business in Kenya performed very well this year with        at 8.0%. 
good growth and a strong profit performance. Despite the 
recent political turmoil in Kenya, the security services 
business has won significant new contracts in the first 
months of 2008. 
                                                             a160 IN AFRICA
ORGANIC 
                                                                   GROWTH WAS
15.2% 
Elsewhere in Africa, Botswana, DRC, Malawi, Mozambique and   and margins
improved 
Namibia all performed well as a result of strong organic     strongly 
growth. 
                                                                to 8.7%. 

In the Latin America & Caribbean region, growth was strong at a160 IN THE LATIN 
16.6% and margins improved to 6.5%.                                AMERICA 
                                                                   & CARIBBEAN 
                                                                   REGION, 
Argentina improved significantly from 2006 through a targeted      GROWTH WAS
STRONG 
effort to increase cost recovery from customers and from an 
expansion into the security of gas and oil facilities in 
                                                                   at 16.6% and 
                                                                   margins 
the southernmost part of the countr y.                             improved to
6.5%. 

In Chile we reported our first full year of results from the acquisition made in
late 2006 where the acquired company performed well. Guatemala continues to post
strong margins despite increased competition and the continued shortage of      
labour.                                                                         

The various businesses within Colombia performed extremely well in comparison to
2006. The improved security situation and increased market share within our     
various markets contributed to a strong result.                                 

We entered seven new countries in new markets in 2007 - Mauritius, Mauritania,  
Guinea, Cambodia, Madagascar,Mali and Sri Lanka.                                

14

G4S HAS UNRIVALLED EXPERTISE IN THE CASH
MANAGEMENT SECTOR AND CONTINUES TO      
LEAD THE MARKET IN DEVELOPING CASH      
SOLUTIONS FOR A RANGE OF CUSTOMERS      
AROUND THE WORLD.                       

CASH SERVICES

The cash services businesses performed very strongly in 2007, with excellent    
organic growth of 10.6% and margins of almost 11%.                              

* At constant             Turnover  PBITA  Margins   Organic
  exchange rates            £m        £m             Growth 
                          20072006   2007-  20072006     2007
                                         -                   
                                         -                   
                                         6                  
Europe*                  706.3629.7  77.4- 11.0%10.9%   11.6%
                                         -                   
                                         -                   
                                         4                  
North America*            78.083.0    0.6-  0.8%2.3%   (6.0)%
                                         -                   
                                         9                  
New Markets*             202.3116.4  29.7- 14.7%13.8%   17.0%
                                         -                   
                                         -                   
                                         1                  
Total Cash Services*     986.6829.1 107.7- 10.9%10.4%   10.6%
                                         -                   
                                         -                   
                                         4                  
Exchange differences         - 6.9      --                   
                                         -                   
                                         6                  
At actual exchange rates 986.6836.0 107.7-                   
                                         -                   
                                         -                   
                                         0                  

Europe

Organic growth in Europe was excellent at 11.6% with strong margins of 11.0%.

In the UK & Ireland region there was solid revenue growth and positive margin   
enhancement as a result of strong performances in the ATM and cash management   
businesses. In the last quarter of 2007, the UK business won a substantial      
contract with HBOS for out of hours bank branch servicing and it continues to   
win business from competitors as they cope with operational issues. In Ireland  
there was good growth and margins should improve in 2008 due to the             
implementation of a post office outsourcing contract.                           

There was slow growth but strong margins in the Netherlands as a result of      
strong operational controls. The implementation of the Swedbank ATM management  
contract contributed to substantial revenue growth and strong margins in Sweden.

In Belgium there was good growth in ATMs and cash management,lar gely from      
expanding existing customer contracts. In the Czech Republic and Hungary there  
was solid revenue growth and improving margins.                                 

          The implementation of the post office outsourcing contract in Romania 
          has driven extremely strong growth and margin improvements. Further 
          phases of this project will be 
Operating 
          implemented in 2008. The successful introduction of the euro in
Cyprus 
          and Malta contributed to strong growth and margin development. 
& 
Financial 
Review 
(continu- 
d) 

G4S plc | Annual Report & Accounts 2007 15

North America                                            a160 THE CASH SERVICES 
                                                              BUSINESS 
                                                              PERFORMED VERY
STRONGLY 
There was negative organic growth in Canada and margin        in 2007, with
organic 
performance was affected by the loss of two significant       growth 
contracts. A new CEO joined the business in 2007 and is 
already 
                                                              of 10.6% and
margins of 
beginning to have a positive impact.                          almost 11%. 
New Markets                                              a160 ORGANIC GROWTH IN 

Organic growth in New Markets was very strong at 17.0% with  EUROPE WAS
EXCELLENT 
margins improving to at 11.6% with strong margins 14.7%. 
There were excellent results across the regions in Asia, 
Middle East, Africa and 
                                                             of 11.0%. 
Latin America. 

Cash outsourcing opportunities are beginning to develop in a160 THERE WAS
NEGATIVE 
Malaysia and Indonesia as financial institutions and       ORGANIC 
central banks are focusing on their core services and 
driving 
                                                              GROWTH IN CANADA 

efficiencies in the cash                                             and margin
performance 
cycle.                                                               was 
                                                                     affected
by the loss 
                                                                     of two 
In Hong Kong pricing pressure remains in the market, but there      
significant contracts. 
are opportunities for growth from the deployment of self 
service terminals in the banking sector. 
                                                                a160 ORGANIC
GROWTH IN NEW 
In the UAE, the business has extended its cash management offer      MARKETS
WAS VERY 
into credit card management and distribution services and            STRONG 
                              India has been awarded the             at 17.0%
with margins 
                              contract for 
distribution of the new national ID cards. In Thailand, a new        improving
to 14.7%. 
state-of-the-art cash centre has allowed the business to expand 
rapidly. 

G4S entered the cash services market in South Africa in the first quarter of    
2007 through the acquisition of Fidelity Cash Management. The business is       
performing well with good growth, particularly in the ATM sector,and strong     
margins.                                                                        

There was very strong organic growth in Kenya as a result of further outsourcing
in the financial services sector. The introduction of new technology has        
provided the business with a unique competitive advantage in the market.        

The continued improvement of the internal security situation within Colombia has
resulted in increased economic activity and movement of funds within the        
country. Accordingly,the cash services business has benefited greatly from the  
increased activity during the whole of 2007.                                    

16

PROFIT FOR THE YEAR WAS £160.6M, COMPARED TO £109.9M IN 2006.
THE PRINCIPAL REASONS FOR THE INCREASE IN PROFIT WERE THE    
£37.7M INCREASE IN PBITA LESS THE £14.8M INCREASE IN NET     
INTEREST COST,PLUS THE £33.0M DECREASE IN LOSS FROM          
DISCONTINUED OPERATIONS.                                     

Trevor Dighton         
Chief Financial Officer

FINANCIAL REVIEW                                                                
Basis of accounting The financial statements are presented in accordance with   
applicable law and International Financial Reporting Standards, as adopted by   
the European Union (“adopted IFRSs”). The group's significant accounting        
policies are detailed in note 3 on pages 52 to 59 and those that are most       
critical and/or require the greatest level of judgement are discussed in note 4 
on pages 59 and 60.                                                             

Operating results The overall results are commented upon by the chairman in his 
statement and operational trading is discussed in the operating review on pages 
6 to 15. Profit from operations before amortisation of acquisition-related      
intangible assets (PBITA) amounted to £312.1m, an increase of 13.7% on the      
£274.4m in 2006 and an increase of 16.8% at constant exchange rates.            

          Associates Included within PBITA is £3.0m (2006: £2.8m) in respect of 
          the group's share Operating of prof it from associates, principally
from 
          the business of Space Gateway in the US which 
          provides safety services to NASA. Cash flow from associates was
£1.0m, 
          compared to & Financial 
          £2.7m in 2006. 

  Review   
(continued)

G4S plc | Annual Report & Accounts 2007 17

INVESTMENT IN ACQUISITIONS IN THE YEAR AMOUNTED TO £217.6M,
OF WHICH £151.6M WAS A CASH OUTFLOW.                       

Acquisitions and             Also included within financing are   a160 NET
INTEREST PAYABLE 
acquisition-related          other net interest costs of £1.3m 
intangible assets            (2006: net income of £2.2m), 
Investment in acquisitions                                             on net
debt was £57.4m. 
in the year amounted to 
£217.6m, of which £151.6m 
was a cash outflow, 
                             including the unwinding of the            This is
an increase of 
                             discount on put £1.0m is deferred         36% 
                             consideration and £65.0m the 
                             options over minority interests, and      over
2006. 
                             a net income of recognition of put 
                             options over their interests held 
                             £5.0m (2006: £1.0m) in respect of 
                             movements in the by minorities. This 
                             investment generated goodwill of 
                             group's net retirement benefit       a160 THE
TAXATION CHARGE 
                             obligations. 
£179.2m and other                                                      of
£71.1m provided upon 
acquisition-related 
intangible 
assets (customer-related) of Taxation The taxation charge of           PBITA
less interest 
£37.2m. Larger               £71.1m provided                          
represents 
acquisitions included the    upon profit from operations before        a tax
rate of 27.5% 
purchase of controlling      amortisation of                           compared 
interests in Fidelity Cash   acquisition-related intangible            to 28.6%
in 2006. 
Management in South Africa   assets less net interest 

and the business of al Majal Facilities represents a tax rate of 27.5%,
compared to 
Management                              28.6% in 

in Saudi Arabia, the purchase of     2006. The group believes that an effective
tax 
RIG, a police                        rate of 

recruitment business in the UK, and the around this level is sustainable going 
recognition                             forward. The 

of put options that increased to 100%  amortisation of acquisition-related
intangible 
the group's                            assets 

interest in the multi-service businesses gives rise to the release of the
related 
in the Baltic                            proportion of 

states. The contribution made by        the deferred tax liability established
when 
acquisitions to the                     the assets 

results of the group during the year is   were acquired, amounting to £14.9m, 
shown in note                             including the 

17 on page 70.                          adjustment of the deferred tax
liability for 
                                        the 
                                        forthcoming reduction in the UK
corporation tax 
The charge for the year for the         rate from 30% to 28%. In addition, a
tax credit 
amortisation of acquisition-related     of £0.3m has been included within the
results 
intangible assets other than goodwill   from discontinued operations. Potential
tax 
amounted to £41.6m. Goodwill is not     assets in Acquisition-related
intangible assets 
amortised. 
                                        respect of losses amounting to £107.2m
have not 
                                        included in the balance sheet at 31
December 
                                        2007 
                                        been recognised as their utilisation is 
                                        uncertain. 
amounted to £1,332.4m goodwill and 
£219.9m other. 
                                        Disposals and discontinued operations
On 2 July 
                                        2007 On 18 December 2007 the group
announced 
                                        the 
                                        the group disposed of its French cash
services 
                                        business acquisition of Global
Solutions, a 
                                        provider of a range 
                                        and during the year disposed of a
number of 
                                        small of support ser vices to
governments, 
                                        public 
                                        businesses, mainly in Latin America. At
31 
                                        December authorities and the private
sector, 
                                        for a total 
                                        2007 the group was in substantive
negotiations 
                                        for the consideration of £355m. This 
                                        acquisition is subject to 
                                        disposal of its security services
businesses in 
                                        France and approval from the European 
                                        Commission and is 
                                        Germany,pr incipally comprising Group 4 
                                        Securicor 
expected to complete following receipt  SAS, G4S Sicherheitsdienste GmbH and
G4S 
of such 
approval during 2008.                   Sicherheitssysteme GmbH. It is
anticipated that 
                                        these 
                                        disposals will be concluded during
2008. The 
                                        assets and On 20 March 2008 the group
announced 
                                        a cash 
                                        liabilities of these businesses have
therefore 
                                        been 
offer of approximately £43.6m for the   classified as held for sale and their
results 
shares of ArmorGroup International plc, have been included within discontinued 
a leading provider of defensive,        operations. The result from
discontinued 
protective security services.           operations comprises a loss of £12.0m
in 
                                        respect of post-tax trading losses of 
Financing items Finance income was 
£92.6m and 
finance costs £146.3m, giving a net     discontinued businesses, a profit of
£9.1m in 
finance cost of £53.7m. Net interest    respect of disposals made in the
current year 
payable on net debt was £57.4m. This is and a profit of £2.9m in respect of
adjustments 
an increase of 36% over the 2006 cost   to prior year disposals. 
of £42.1m due principally to the rising 
costs of borrowing and the increase in 
the group's average 
                                        Businesses disposed of in 2006 included
G4S 
                                        Geld- gross debt. The group's average
cost of 
                                        gross 
                                        und Wertdienste GmbH, the cash services 
                                        business 
borrowings in 2007 was 5.7% compared to in Germany, and the US transportation
business, 
4.6% in 2006. The cost based on 
prevailing interest rates at 
                                        being the remaining business of Cognisa 
                                        Security, Inc. 31 December 2007 was
5.7% 
                                        compared to 5.2% at 
31 December 2006. 

18

           FINANCIAL REVIEW (continued) 
a160 BASIC The loss from           Cash flow The primary cash generation focus
of group management 
EARNINGS   discontinued operations is on the percentage of operating 
PER SHARE  in 2006 
was 11.5p  comprises £19.0m in 
compared   respect of trading 
to 7.6p    losses of 
for 2006. 
           both the 2006 and the   profit converted into cash. For 2007, the
group's in respect of 
           2007 disposals and      disposal losses, offset by a £5.2m 
           £19.2m a160 
                                   target conversion rate was raised from 80%
to 85%. OVERALL 
                                   OPERATING 
           adjustment in respect   Operating cash flow, as defined for
management 
           of prior periods. 
CASH                               purposes, was as follows: 
GENERATION 
for the    The net cash proceeds                                               
  2007        2006 
year was   from business disposals 
good. 
Operating  received in 2007 were                                               
     £m       £m 
cash flow  £7.9m, comprising 
as a       payment of £12.4m in 
           respect of the cash 
           services business in 
percentage                         PBITA                                       
 312.1     274.4 
of group 
PBITA 
was 89%.   Germany, and receipt of Less share of profit from associates        
   (3.0)       (2.8) 
           £20.3m in respect of 
           the PBITA before share 
           of profit from 
           cash services business 
           in France. 
                                       associates (Group PBITA)                
 309.1     271.6 
           The contribution to the Depreciation and amortisation 
           turnover and operating 
           profit of the group 
           from discontinued 
           operations is shown 
                                       of intangible assets other than 
           in note 6 on pages 61      acquisition-related                      
   99.6     92.7 
           to 64 and their 
           contribution 
           to net profit and cash  Profit on disposal of property, plant 
           flows is detailed in 
           note 7 on and equipment 
                                                                               
  (14.4)       (1.6) 
           pages 64 and 65. 
                                   Increase in working capital and 
           Profit for the year           provisions before exceptional items   
   (8.9)      (45.8) 
           Profit for the year was 
           £160.6m, 
           compared to £109.9m in  Net cash flow from capital expenditure      
(109.0)       (82.5) 
           2006. The principal 
           reasons 
           for the increase in     Operating cash flow                         
 276.4     234.4 
           profit were the £37.7m 
           increase in PBITA less 
           the £14.8m increase in 
           net interest cost, 
                                   Operating cash flow as a percentage 
           plus the £33.0m            of group PBITA                           
   89%       86% 
           decrease in loss from 
           discontinued 
           operations. 
                                   Working capital increased in both 2007 and
2006 Minority 
                                   interests Profit attributable to minority 
                                   due principally to the growth in
turnover,but this interests was 
                                   £13.4m in 2007, the same as in 2006, 
                                   increase was restricted in 2007 as a result
of the reflecting 
                                   minority partner shares in the group's
organic 
                                   commencement of a programme of billing
process 
           and acquisitive growth, improvements that is being rolled out across
the group. Capital 
           less a reduction in     expenditure relative to the depreciation
charge can vary 
           minority share 
           consequent upon the 
           recognition as 
           liabilities of the 
           group of certain put 
           options held by 
           minorities. 
                                                                           
from year to year due 
                                   to the timing of asset replacements. It was
109% of Earnings per 
                                   share Basic earnings per share from 
                                   depreciation in 2007, compared to 91% in
2006. continuing and 
                                   discontinued operations was 11.5p 
                                   Overall operating cash generation for the
year was compared to 
                                   7.6p for 2006. These earnings are 
                                   good, as a result of the maintenance of
financial unchanged when 
                                   calculated on a fully diluted basis, 
                                   discipline across the organisation. 
           which allows for the 
           potential impact of 
           outstanding share 
           options. 
                                   The management operating cash flow
calculation is 
                                   reconciled to the net cash from operating
activities Adjusted 
                                   earnings, as analysed in note 16 on pages 
                                   as disclosed in accordance with IAS7 Cash
Flow 68 and 
                                   69, excludes amortisation of acquisition- 
                                   Statements as follows: 
           related intangible                                                  
  2007        2006 
           assets and retirement 
           benefit 
           obligations financing                                               
     £m       £m 
           items, both net of tax, 
           and better 
           allows the assessment   Cash flow from operating activities 
           of operational 
           performance, 
           the analysis of trends     (IAS7 definition)                        
 291.3     197.1 
           over time, the 
           comparison of 
           different businesses    Net cash flow from capital expenditure      
(109.0)       (82.5) 
           and the projection of 
           future 

performance. Adjusted earnings   Add-back cash flow from exceptionalitems and 
per share was 13.4p,             discontinued operations1.825.3 

an increase of 10.7% over 12.1p   Add-back additional retirement 
for 2006. Dividends The directors benefit 
recommend a final dividend 
                                    contributions                  26.1      
24.2 
of 2.85p (DKK 0.2786) per share.  Add-back tax paid                66.2      
70.3 
This represents an 
increase of 13.1% upon the final  Operating cash flow (G4S         276.4       
234.4 
dividend for the year             definition) 
to 31 December 2006 of 2.52p (DKK The group's free cash flow, as defined by
management, 
0.2766) per share. The interim    is analysed as follows: 2007 
dividend was 2.11p (DKK 0.2319) 
per share and the total dividend, 
if approved, will be 
                                                                               
 2006 
4.96p (DKK 0.5105) per share ,                                       £m        
£m 
representing an Operating cash 
flow 
increase of 17.8% over the 4.21p                                   276.4       
234.4 
(DKK 0.4629) per share total 
dividend for 2006. 
                                  Net interest paid               (55.0)       
   (47.8) 
                                  T ax paid                       (66.2)       
   (70.3) 
The proposed dividend cover is    New finance leases              (10.3)       
   (19.6) 
2.7 times (2006: 
2.9 times) on adjusted earnings.  Free cash flow                   144.9     
96.7 
This is in accordance Review with 
the group' s reaffirmed intention 
to increase 
dividends so as to reduce 
dividend cover to around 
(continued) 
2.5 times b y 2008. 

G4S plc | Annual Report & Accounts 2007 19

Free cash flow is reconciled to the total        The proceeds of the issue were
used to 
movement in net debt as follows: 2007            reduce drawings against the
revolving 
                                                 credit facility. At the 2006 
                                                 time of receipt the group had,
in 
                                                 accordance with £m 
                                 £m         £m 
                                                 treasury policy, converted 55%
of its US 
                                                 dollar Free cash flow 
                         144.9            96.7   interest exposure from
floating rates 
                                                 into fixed rates 
Cash flow from 
exceptional items and 
discontinued              (1.8)           (25.3) through interest rate swaps.
Therefore, 
operations                                       the fixed 
Additional                                       interest rates payable on the
notes were 
retirement                                       swapped (26.1) 
benefit 
contributi-                             (24.2)       (24.2) into floating rates
for the term of the 
ns                                               notes, at an (95.7) 
Net cash outflow on    (162.9)                   average margin of 0.60% over
Libor,so 
acquisitions                                     that the 9.9 
Net cash inflow           7.9                    proportion of group debt held
under 
from disposals                                   fixed interest 2.7 
Net cash flow             1.0                    rates remained at 55%. 
from associates 
Dividends paid to         (3.8)            (3.0) On 7 March 2008 the group
signed 
minority interests                               committed bank facilities
amounting to 
                                                 £350m. These facilities expire 
Loan to minority         (13.3)              - 
interests 
Share issues              (2.2)            6.0 
less share 
purchase 
                                                 on 31 December 2008, although
the group 
                                                 can Dividends paid to equity
holders of 
 the parent              (59.3)           (49.8) exercise an option to extend
the 
                                                 facilities to 30 June 
Net cash flow from                               2009. The margin is 0.35% over
Libor.The 
hedging financial                                pur pose (4.3) 
instruments                    11.8       11.8   of these facilities is to
provide the 
                                                 group with (70.9) 
Movement in net debt in(119.9)                   headroom whilst assessing
options in the 
the year                                         capital 
Foreign exchange                                 markets. The group does not
expect to 
translation                                      draw down (12.2) 
adjustments to                 55.4       55.4   on these facilities. 
net debt 
Net debt at            (672.8)          (657.3) 
1 January 
                                                 The group has other short-term
committed 
                                                 facilities 
Net debt at 31                 (804.9) (672.8)   of £30m and uncommitted
facilities of 
December                                         £411m. 
Net debt represents the group's total borrowings The group's net debt at 31
December 2007 
less cash, cash equivalents and liquid           of £804.9m represented a
gearing of 72%. 
investments. The                                 The group has 
components of net debt are detailed in note 39   sufficient capacity to finance
current 
on page 93.                                      investment plans. 
                                                 Interest rates The group's
investments 
                                                 and 
Financing and treasury activities                borrowings at 31 December 2007
were, 
The group's                                      after taking into account the
swap in 
                                                 respect of the loan notes 
treasury function is responsible for ensuring 
the 
availability of cost-effective finance and for   issued in March, at variable
rates of 
managing                                         interest linked to Libor and
Euribor, 
                                                 with the group's exposure
being 
the group's financial risk arising from currency 
and interest rate volatility and counterparty 
credit. 
                                                 predominantly to interest rate
risk in 
                                                 US dollar and Treasury is not
a profit 
                                                 centre and is not permitted 
                                                 euro. The group's interest
risk policy 
                                                 requires treasury to speculate
in 
                                                 financial instruments. The
treasury 
                                                 to fix a proportion of net
debt on a 
                                                 sliding scale, with
department's 
                                                 policies are set by the board.
Treasury 
                                                 a maximum of 80% short term
debt held at 
                                                 fixed is subject to the
controls 
                                                 appropriate to the risks it 
                                                 rates, reducing to a maximum
of 20% of 
                                                 medium manages. These risks
are 
                                                 discussed in note 33 on 
                                                 term debt held at fixed rates,
utilising 
                                                 interest rate pages 82 to 84. 
                                                 swaps. The maturity of these
interest 
                                                 rate swaps at Financing The
group's 
                                                 primary source of finance 
                                                 31 December 2007 was limited
to five 
                                                 years. The is a £1,000m
multicurrency 
                                                 revolving credit facility 
                                                 market value of the loan note
related 
                                                 pay-variable provided by a
consortium of 
                                                 lending banks at a 
                                                 receive-fixed swaps
outstanding at 31 
                                                 December 
margin of 0.225% over Libor.Dur ing 2007, the    2007, accounted for as fair
value 
lending banks exercised their options to extend  hedges, was a gain of £14.3m.
The market 
the term of this facility to 28 June 2012. An    value of the pay-fixed
receive- variable 
additional £87m facility with another bank on    swaps outstanding at 31
December 2007, 
the same terms was added on 1 February 2007.     accounted for as cash flow
hedges, was a 
                                                 loss of £5.1m. 
On 1 March 2007, to further diversify its        Foreign currency The group has
many 
sources of funding and lengthen the maturity of  overseas 
its debt, the 
                                                 subsidiaries and associates
whose 
                                                 results and net 
group completed a $550m private placement of     assets are denominated in
various 
                                                 different 
unsecured senior loan notes, with maturity and   currencies. Treasury policy is
to manage 
                                                 significant 
interest as                                      translation risks in respect
of net 
follows:                                         operating assets and income
denominated 
                                                 in foreign currencies by using 
                Intere- 
                t 
           Value rate                 Maturity 
            $m     %           date       date   borrowings denominated in
foreign 
                                                 currency 
                                                 supplemented by forward
foreign exchange 
                                                 contracts. 
Series “A” 100  5.77              March 2014 
Series “B” 200  5.86              March 2017 
Series “C” 145  5.96              March 2019 
Series “D” 105  6.06              March 2022 

20

FINANCIAL REVIEW (continued)

The most significant currency movements  The valuation of gross liabilities was 
during                                   broadly 
both 2007 and 2006 were the in the US    unchanged from 2006, with the charge
of the 
dollar. The average rate for the dollar  year's finance cost being offset by an 
during 2007 was $2.00=£1 compared to     increase in the appropriate AA
corporate bond 
$1.85=£1 for 2006. However, the rate at  rate from 5.2% to 5.8%. The value of
the 
31 December 2007 of $1.99=£1 was closer  assets held in the funds increased by
£77m 
to the rate of $1.96=£1 at 31 December   during 2007, assisted by additional
company 
2006. This variance has impacted the     contributions of £26m. 
group's dollar- denominated assets and 
assets denominated in New Market 
currencies that follow the dollar. In 
contrast, 
                                         The group believes that the short-term 
                                         volatility in 

the average rate for the euro       reported retirement benefit obligations, in 
during 2007 of                      response to 

€1.46=£1 was very close to the        movements in asset prices and financial 
average for 2006                      circumstances, 

of €1.47=£1. But the rate for       is of limited relevance in the context of 
December 2007 of                    liabilities which 

€1.36=£1 was significantly below the are exceptionally long-term in nature and 
rate of                              furthermore 

€1.48=£1 at 31 December 2006. This     that, over the long term, investment
returns 
variance has                           on the 

impacted the group's euro-denominated retirement benefit scheme assets will be 
assets and                            sufficient to 

assets denominated in European          fund retirement benefit obligations. 
currencies that                         However,in 

follow the euro. Exchange            recognition of the regulatory obligation
upon 
differences on the                   pension 

translation of foreign operations    fund trustees to address reported deficits
if 
included in the                      they arise , 

statement of recognised income and the group anticipates that additional cash 
expense                            contributions 

amount to gain of £18.4m (2006: loss  will continue to be made at a similar
level to 
of £31.0m).                           that in 

               These differences include  2007. This level of contributions
will be reviewed 
               a £12.2m loss (2006: 
a160 
               £55.4m gain) on the        annually and formally reassessed at
the next 
               retranslation of net debt, actuarial valuation dates, which are
5 April 2009 
               a THE GROUP OPERATES       in respect ofaglobal cash management 
               £4.3m cash outflow (2006: 
               £11.8m inflow) from 

forward exchange contracts and a    the Securicor scheme and 31 March 2010 in 
£19.0m loss                         respectsystem. 

             (2006: £11.6m gain) on the       of the Group 4 
             market valuation of THE GROUP'S  scheme.a160 
             RETIREMENT 
             outstanding forward contracts.   Corporate governance The group's
policies 
                                              regarding 
BENEFIT      The market value of forward      risk management and corporate
governance are set 
OBLIGATIONS  contracts outstanding at 
FUNDING 
SHORTFALL 
             31 December 2007 was a loss of   out in the Corporate Governance
Statement onwas 
             £13.6m. pages 34 to 36.          £136m before tax Cash management
To assist the 
                                              efficient management 
or £98m 
after tax. 
             of the group's interest costs    Going concern The        are
confident that, 
             and its short term               directors                after 

deposits, overdrafts and revolving     making enquiries and on the basis of
current 
credit facility                        financial 

drawings, the group operates a       projections and available facilities, they 
global cash                          have a 

management system. At 31 December    reasonable expectation that the group has 
2007, 83                             adequate 

group companies participated in the     resources to continue in operational 
pool, with the                          existence for 

number continuing to grow.Debit     the foreseeable future. For this reason
they 
balances of                         continue 

£82.9m and credit balances of £84.5m   to adopt the going concern basis in 
were held                              preparing the 

within the cash pool. IFRS does not permit the financial statements.

netting off of these balances, which    Risks All businesses are subject to
risk and 
are therefore disclosed gross within    many individual risks are
macro-economic or 
current assets and current liabilities. social and common across many
businesses. 
                                        Many risks are to a 

Retirement benefit obligations The      greater or lesser extent controllable,
but 
group's primary                         some are 

defined benefit retirement benefit      not controllable. Through its internal
risk 
schemes are those                       management 

operated in the UK, but it also        process, the group identifies
business-specific 
operates such schemes                  risks. It 

in a number of countries, particularly classifies the key risks as those which
could 
in Europe and                          materially 

North America. The latest full actuarial damage the group's                
business, 
assessments of                           strategy,reputation, 

the UK schemes were carried out at   profitability or assets and these risks
are 
31 March 2007                        listed below. 

in respect of the Group 4 scheme        This list is in no particular order and
is 
(approximately                          not an 

8,000     in total) and at 5 April   exhaustive list of all potential risks.
Some 
members   2006 in                    risks may be 

respect of the Securicor scheme        unknown and it may transpire that others 
(approximately                         currently 

        20,000      in total). These          considered immaterial become
material. 
        members     assessments and 
Operat-        those of the group' s other schemes    1.   Price competition 
ng      have been The security industry 
        comprises a number of ver y 
        updated to 31 December 2007, 
        including the review of longevity 
        assumptions. The group's funding 
                                              competitive markets. In
particular, manned 
                                              security 
& 
Financ- 
al 
        shor tfall on the valuation basis     markets can be fragmented with
relatively 
        specified in IAS19 Employee Benefits  low 
        was £136m before tax or £98m 
                                              economic barriers to entr y and
the group 
                                              competes after tax (2006: £226m
and £158m 
                                              respectively). 
Review                                        with a wide var iety of operators
of 
                                              varying sizes. 
                                              Actions taken by the group's
competitors 
                                              may place pressure upon its
pricing, 
                                              margins and profitability. 
(conti- 
ued) 

G4S plc | Annual Report & Accounts 2007 21

2. Major changes in market dynamics   for which the group is contracted to
provide 
                                      security, 
Such changes in dynamics could        they could result in brand and
reputational 
include new                           damage and so affect earnings and 
                                      profitability. 
technologies, government legislation 
or customer 
consolidation and could, particularly 
if rapid or 
unpredictable, impact the group's     10. Regulatory requirements 
revenues and 

profitability.                         Security can be a high-profile industry.
There 
                                       is a wide 
                                       and ever-changing variety of regulations 
                                       applicable to 
3. In-sourcing by customers            the group's businesses across the world. 
                                       Failure to comply with such regulations
may 
                                       adversely affect the 
Outsourcing activities carried out by 
the group 
include cash processing and cash       group's revenues and profitability. 
management 
functions on behalf of financial 
institutions, manned 
security on behalf of a range of       The group has a robust risk assessment
and 
different customers                    control 

and justice services on behalf of       process in place to identify and
mitigate 
government                              the 

institutions. If the trend towards such   controllable risks faced by the  a160
THE GROUP HAS A ROBUST 
outsourcing                               organisation. Mitigation 
were for any reason to be reversed, the   measures include:                    
RISK ASSESSMENT AND 
group's CONTROL PROCESS IN PLACE 
revenue and profitability may be adversely1. The group's diversity             
to identify and 
affected.                                                                      
mitigate the 
4.                                        The group operates around 150        
controllable risks 
                                          businesses across                    
faced by the 
Were the group to make acquisitions or    over 110 countries and across a      
organisation. 
capital                                   range of product 

expenditures that were inappropriate to  areas. Most of the risks detailed
above are 
its strategy                             market- 

or over-priced,or to take on onerous contr   specific and, therefore, any     
a160 THE GROUP IS 
actual                                       particular issue is likely to     
    COMMITTED 
obligations, the group's profitability and   impact only part of the group's   
    to a policy of 
returns on                                   operations.                       
    proactive 
                                                                               
    engagement with 
                                                                               
    customers, 
capital may be adversely affected.           2. Management structure           
    industry 
                                                                               
    associations, 
5.                                           The group operates a management   
    government 
                                             structure that is                 
    regulators and 
The group is responsible for the cash held onappropriate to the scale and      
    employee 
behalf                                       breadth of its activities.        
    representatives. 

of its customers. Increases in the value  Business performance and strategies
are 
of cash lost                              reviewed 

through criminal attack may increase the   continuously by regional, divisional
and 
costs of the                               group 

group's insurance. Were there to be      management. Potential issues requiring 
failures in the                          management 

control and reconciliation processes   attention are therefore identified and
there 
in respect to                          is a wide 

customer cash these could also adversely    range of expertise available
throughout 
affect the                                  the 

group's profitability.                organisation, which is utilised as
necessary to 
                                      address 
                                      these issues. 
6. IT systems 
The group makes widespread use of IT  3. Authorisation procedures 
systems both 

for operational management, including  The group has clear authorisation limits
and 
tasks such as                          procedures 

scheduling and route-planning, and for which are cascaded throughout the 
financial                              organisation. For 

management, including calculating      example, all acquisition proposals have
to be 
employee wages and                     submitted 

billing customers. Failure in these        for approval to the group capex
committee, 
systems, including the                     assessed 

failure of business continuity           against the group's return
requirements, 
procedures in the event                  evaluated for 

of physical damage to or inaccessibility of risk and subject to appropriate due 
day-to-day                                  diligence. 

operating systems,    4.                                 Group standards 
could result in 
reputational damage 
and the loss of                 Each of the group's businesses applies systems
and 
revenue and 
profitability. 
7.Deterioration in    procedures appropriate to its size and complexity. 
  labour relations 

The group's most significant asset is its However,the group requires that these 
large and                                 conform to 

committed work force. Were the good       group standards in respect of matters 
relationships                             such as 

between the group and its employees operational and financial controls,
financial 
to become                           reporting, 

strained, the group's operational       business continuity planning and
project 
performance and                         management 

reputation may be adversely         techniques. Further standards, particularly
in 
affected.                           respect of 
                                    IT systems, are applied on a divisional or 
                                    regional basis. 8. Defined benefit pension 
                                    schemes A prolonged period of poor asset
returns 
                                    and/or 
                                    5. Internal audit 

unexpected increases in longevity      The Internal Audit department operates
under 
could require                          a wide 

increases in the current levels of       remit, which includes ensuring
adherence to 
additional cash                          group 

contributions to defined benefit pension authorisation procedures and control 
schemes,                                 standards. 

which may      6.                                  Market engagement 
constrain the 
group's 
ability to 
take advantage 
of growth 
opportunities. 
                         Most of the risks to which the group is exposed are 
9.Terrorist    market risks. So as to better understand and 
  attacks 

The group operates in an industry    influence the market, the group is
committed 
which is                             to a 

sometimes involved in seeking to     policy of proactive engagement across its 
protect its                          geographic 

customers against acts of terrorism. Were  range, with customers, industry 
terrorist                                  associations, 

incidents in the future to involve       government regulators and employee 
premises or events                       representatives. 

22

OUR EMPLOYEES ARE THE PUBLIC
FACE OF G4S AND WE RECOGNISE
AND RESPECT THE VALUE THEY  
ADD TO THE BUSINESS BY      
DELIVERING EXCELLENT SERVICE
DAY AFTER DAY.              

                                       OUR PEOPLE 
a160 WE           Investing in the workforce - we Programmes such as these
ensure that we grow our 
ARE               place great focus on attracting talent from within local
communities alongside an 
INVESTING         and retaining the right talent 
                  at all levels, to 
in regional and 
country 
level employee 
development 
                  ensure the continued success of internationally mobile team
of top managers, 
                  the organisation.               helping 
programmes                                        us to develop markets, create
new businesses and 
around                                            Our international spread
requires great strength 
                                                  and 
the world.                                        operate consistently in often
challenging 
                                                  circumstances. 
                  depth in management to allow us 
                  to continue a160 
                                                  Succession planning at the
most senior lev els 
                                                  also WE CONTINUE TO INVEST 
                  operating and growing           ensures that our group can
continue to lead the 
                  throughout diverse markets.     In addition to our
award-winning international 
in                                                       industry         on a
global scale, and 
practical                                                                 helps
build our 
training                                                                 
reputation as the 
                                                                         
employer of choice in our 
                                                                         
industry. 
programmes to     leadership development 
help refine       programme, we are investing 
the skills and    in regional  level employee 
capability of     and country  development 
our        staff. programmes around the world,    At front line level too, we
continue to invest in 
service           such as: 
delivery 
a160                                              pr actical training
programmes to help refine the 
                                                  skills > 
AS ONE OF THE       Asia Pacific - tailor-made    and capability of our   
Through 
WORLD'S             programmes                    service delivery staff. 
largest private     supporting competency         the commitment of our
international training 
sector              development and 
employers, we       reinforcing the G4S values    community,we share best
practice , training 
place great         have been introduced          materials 
value on creating   in China, Hong Kong,Taiwan    and approaches around the
world, ensuring that 
sustainable         and across the region. >      our Sub Saharan Africa - the
region is launching 
                                                  an 
employment in                                     employees benefit from the
most appropriate 
diverse                                           training 
 markets.           advancement programme for     to enable them to deliver a
great service to our 
                    talented African 
                    managers in association with  customers. 
                    a premier South 
                    African business school. 
                  > UK - the cash services        Raising standards - as one of
the world's largest 
                    business is using an on- 
                    private sector employers, we 
                    place great value on 
                    line learning portal to 
                    suppor t continual personal 
                    development and assist 
                    managers at various 
                                                  creating sustainable
employment in diverse 
                                                  markets, 
                    levels to achieve recognised  thereby contributing to the
communities in which 
                    management 
                    qualifica-                              our employees live. 
                    ions. 
                  > Global Learning Portal - this 
                    portal facilitates 
                    the sharing of learning and   Our success has brought with
it the 
                    expertise between             responsibility 

businesses on a global basis. The group to lead employment practices wherever
we 
has many                                operate, 

centres of excellence for operational,   setting the standards to which other 
supervisor y                             employers in 

and management learning within G4S and these our industry aspire.

        centres have provided materials for  We are committed to continually
raising 
        the portal.                          these 
        For example, Wackenhut in the US is  already high standards and
ensuring that 
                                             the way we 
Operat- 
ng 
        ackno wledged for the quality of     operate delivers both commercial
returns 
        training it provides for employees   and a 
        and our business in India 
                                             positive result for our employees
and their 
                                             families. & Financial 
        is ab le to share many of its 
        specialist programmes. 

  Review   
(continued)

G4S plc | Annual Report & Accounts 2007 23

This commitment to being a good employer means we also    a160 RIGOROUS PRE-
AND POST- 
insist that new recruits have the necessary qualities to 
be trustwor thy and reliable, helping safeguard the 
safety of their 
                                                               EMPLOYMENT
SCREENING 
colleagues as well as our customers.                           practices are
embedded. 
Rigorous pre- and post-employment screening practices are a160 A NUMBER OF KEY 
therefore embedded throughout our businesses, and we           INITIATIVES 
continue to work with governments and industry bodies 
                                                               were launched at
our 
to drive up standards in many countries around the world.      European Works
Council 

Employee representation - our drive to improve performance      to ensure that
we 
across the industry is aided                                    work 

by our positive relationships with trade unions and other    cooperatively on
the 
employee representatives. that can affect our staff most     matters 
We are proud that we are able to work hand in hand with         of all. 
these bodies to positively influence the whole sector,as 
well as working together on employee relations programmes 
within G4S. 
                                                             a160 ACROSS THE
GROUP 
                                                                WE ENGAGE 
For example, in 2007 a number of key initiatives were        in genuine and
active 
launched at our European Works Council to ensure that we     social 
work collaboratively on the matters that can affect our 
staff most 
                                                             dialogue with a
wide range 
of all, such as training, health & safety and employee         of social
partners. 
engagement. 

Our commitment to building constructive relationships with union and other      
employee representatives is further demonstrated by our public commitment to the
ILO Declaration on Fundamental Principles and Rights at Work. Thus, in          
accordance with local legislation and practice, we respect freedom of           
association and the right to collective bargaining, employment is freely chosen,
with no use of forced or child labour,and we do not discriminate on the basis of
gender,colour, ethnicity,culture , religion, sexual orientation or disability.  

Across the group we engage in genuine and active social dialogue with a wide    
range of social partners, and have over 70 formal relationships currently in    
place with trade unions around the world. We are proud of our position as the   
most unionised private sector business in the UK and regularly negotiate new    
trade union agreements which are in the interest of our employees, our customers
and our organisation.                                                           

In a people intensive business such as ours, having a motivated, capable        
workforce who are proud to work for G4S will continue to be one of our group's  
aims. We have made great strides forward in these areas over recent years and   
will continue to build on the excellent people management practices which are in
place across the group.                                                         

24

G4S RECOGNISES ITS ETHICAL  
RESPONSIBILITIES TOWARDS    
EMPLOYEES, CUSTOMERS,       
INVESTORS, LOCAL COMMUNITIES
AND OTHER STAKEHOLDERS.     

CORPORATE  
CITIZENSHIP

Background As a major global            This policy is communicated to managers 
organisation, G4S                       throughout 
plays a significant role in the lives   the group and, on an annual basis, they
are 
of hundreds of thousands of people -    required to declare individually their 
both directly through employment and    personal commitment by endorsing the
policy 
indirectly through its approach to the  and confirming compliance within their
own 
communities in which it operates.       area of responsibility. 

We take that role very seriously and    Strict adherence to the principles of
the 
encourage all of our businesses to      business ethics policy is required of
all 
actively raise standards and invest in  group employees. Compliance with the
policy is 
the communities in which they operate.  monitored through our internal and
external 
At a group level, we also invest in     audit functions and through the group's 
programmes which contribute positively  whistle-blowing facilities. 
to the community and environment and we 
set international standards and 
policies to which our businesses must 
operate. 
                                        We take our responsibilities in this
area very 
                                        seriously and take swift and robust
action 
                                        against any Business Ethics G4S is
committed 
                                        to operating to 
                                        non-compliance. 
the highest levels of business ethics 
throughout its operations. We have an 
extensive business ethics policy which 
describes the company's minimum 
expected standards in a wide range of 
areas such as: 

          > Human rights                                 
          > The environment                              
          > Community involvement                        
          > Bribery and corr uption                      
          > Compliance with the law                      
          > Accounting standards                         
          > National regulations and guidelines          
          > ILO Declaration on Fundamental Principles and
            Rights at Work                               
          > Equal opportunities                          
          > Health & safety                              
Operating                                                
          > Whistle-blowing and complaints               

& Financial
Review     
(continued)

G4S plc | Annual Report & Accounts 2007 25

Environment Whilst the service industr Employee Welfare & Support The group has
established 
y is not a sector which has a major    an employee trust fund which offers
monetary suppor 
impact on the environment, we do       t, at the discretion of the fund's
trustees, to 
realise that G4S has a responsibility  those employees and former employees in
need of 
to ensure that we play our part in     urgent financial assistance. 
protecting and preserving the 
environment for future generations. 

We already comply with the relevant      During 2007, the fund was utilised in
a number of 
standards on vehicle emissions and, to   ways to provide emergency assistance
to employees 
date, fuel conservation has been         across the group in areas such as: 
achieved through enhanced vehicle design 
and regular maintenance. We also make 
use of environmentally- friendly 
products and services wherever possible. 
We are committed to 
                                         > Victims of political turbulence and
violence in 
                                           Kenya 
recycling of materials where possible    > Employees affected by severe
flooding in the UK 
and where the means to recycle 
materials exist. This includes the       > Staff who have suffered injury or
attack whilst 
recycling of cash bags, uniforms, toner    on duty 
cartridges, paper and paper-based        > Colleagues diagnosed with
life-threatening or 
products.                                  debilitating diseases 
                                         > Families of employees who have died
whilst 
                                           carrying our their duties > 
We have recently established a working     Relief from the effects of natural
disasters in 
group which is responsible for             Peru and Jamaica Investing in the
Community - 
delivering a number of projects related    Local Initiatives G4S encourages its 
to the group's “integrity” value. One 
such project is to create a G4S 
international environmental strategy 

during 2008.                            colleagues around the world to invest
time and 
                                        energy in local projects in 
                                        the communities in which they live and
work. We are 
                                        very proud of the We have started this
process by 
                                        researching what we believe to be the 
                                        work they do in areas such as: 
area where the group generates the 
majority of its carbon emissions, 
largely due to its relatively large 
heavier vehicle fleets compared to the 
                                        In Guam & Saipan, G4S employees have
been involved 
                                        in a number of 

rest of the group - our cash services    education initiatives; adopting a
public school 
businesses. This part of the             and carrying out 

organisation represents 43,000          renovations and cleaning; and providing
much 
employees, 9,000 vehicles and 22% of    needed equipment such as 

group revenues.                     desks and cabinets for a high school that
sustained 
                                    significant fire and 
                                    smoke damage. 
We have estimated that, in 2007, 
the carbon emissions of the group's 
cash services businesses amounted 
to some 153t CO 
                                    G4S Uganda took part in the Habitat for
Humanity Uganda 
                                    initiative and2emissions per £1m of 

revenue.                                  helped to build homes for orphans and
widows who had 
                                          been caught up Uganda. So relentless
were the efforts 
                                          in the rebel activities 
                                          in Northern 
In 2008 we will select a partner          of the G4S team, they made one
family's dream come 
organisation, with strong environmental   true by building them a home in just
four months. 
credentials to assist us in accurately 
establishing the carbon footprint of the 
group and developing plans and processes 
for reducing carbon emissions across the 
organisation. 
                                          During 2007 the employees of G4S
Canada have 
                                          contributed over CAN$110,000 to a
number of child 
                                          centred charities across the country,
We will aim to 
                                          set targets and milestones for the
group as a whole 
                                          and 
                                          giving up their free time to take
part in fundraising 
                                          events and improving will report
regularly on our 
                                          progress against those targets. 
                                 We       the lives of thousands of sick or
disadvantaged 
                                 expect   children. 
our strategy to cover key areas 
such as: 
                                          In India, G4S supports a wide range
of community 
                                          projects. One of > 
  Fuel consumption                        these, Future Hope, is a centre which
provides a 
                                          home, education, Energy consumption 
>                                         medical aid and opportunities for
street children in 
                                          Kolkata. Water usage 
> 
> Recycling 
> Use of 
  environmentally-friendly 
  products 
> Use of modern communications to reduce 
  the need for air travel 

26

CORPORATE CITIZENSHIP (continued)

During August 2007, the employees of    Training will continue with further
family 
G4S Greece provided vital assistance to members 
the community of 
                                        recruited from the villagers - the
overall aim 
                                        is that Peloponnesus when ferocious
forest 
                                        fires took hold 
                                        those trained will pass on their
learning to 
                                        others of great areas of the country.
G4S 
                                        organised a 
                                        year on year allowing this project to
last a 
                                        lifetime. support mission, providing
clothing, 
                                        first aid, food supplies and toys for 
                                        children. During one 
                                        Jamaica - G4S Gifts for Schools Project
- G4S 
                                        Gifts 

14-day period over €14,000 was raised  for Schools aims to make life a little
easier 
and 80 boxes                           for young 

of supplies gathered through the generosity people living in some of the most 
of G4S                                      deprived 

employees.                                communities in Jamaica by providing
them 
                                          with 
                                          equipment and toys, and ensuring that 
                                          repairs to In the USA, amongst a
whole 
                                          range of charitable 
                                          their accommodation take place. 
activities, G4S Wackenhut employees take 
an active 
role in mentoring disadvantaged high      G4S Jamaica has provided support to a
range 
school students                           of 

through a community programme “Take  institutions for young people during 2007,
such 
Stock in                             as a 

Children”. The employees meet with the boys' home in a remote area of the
country, a 
students                               hostel 

weekly to review their academic progress  for young mothers suffering from HIV, 
and                                       and 

encourage them to study and continue   community housing for both able-bodied
and 
to college. disabled children. 
Investing in the Community - Major 
Initiatives 
In 2006 G4S plc commenced five major   One such facility,the Little Angels
Basic 
community                              School, has 

projects in key markets. Managers and     seen some substantial improvements
through 
staff in our                              its 

developing markets selected projects     involvement with G4S. G4S Gifts for 
which they                               Schools is 

believed would benefit greatly from G4S  renovating two school buildings used
to 
central                                  teach 

        funding and local G4S business       physically and mentally
handicapped children. 
        support.                             New 
                                             classrooms have been built,
undertaken to the 
                                             repairs 
        The main aim of these projects was   roof, electrical repairs  have
been made and 
        to engage our workforce in their                               existing 
        local community,give something 
                                             classrooms and walls are receiving
a much 
                                             needed back to the communities in
which we 
                                             operate and 
                                             coat of paint. This project has
involved G4S 
                                             employees provide a long-term
stable commitment 
                                             to key issues. 
                                             along with local           and the
staff who 
                                             contractors                run 
                                             the facility. The whole community
is joining 
                                             together We are very proud of our
community 
                                             projects and 
                                             to make a difference to the lives
of young 
                                             people. the time and commitment
invested in the 
                                             projects by 
        our colleagues in the different      India - G4S School for Under
Privileged 
        countries.                           Children - 
                                             The aim of the G4S School for
Under Privileged 
                                             Malawi - G4S Community Trees in
Malawi - Malawi 
                                             Children is to provide free
education, food and 
                                             has low levels of energy available
to the rural 
                                             and 
                                             uniforms to children of working
parents 
                                             allowing 
        urban population, and as a result    them to continue to work whilst
their children 
        timber is the main source of energy  are in a place of safety. 
        for heating and cooking. In Malawi 
        over 1.5 million trees are cut down 
        each year and over a million trees 
        are used to convert into 
                                             In 2007, G4S India engaged with a
national NGO, 
                                             approximately 150,000 tonnes of
charcoal. 
                                             The Hope Foundation, a charitable
organisation 
                                             involved in providing sustainable
education for 
        G4S Community Trees in Malawi was    children. The school will be
located in the 
        developed to provide a sustainable   Papankala area of New Delhi. This
area has 
        forestry farming project which       about 1,500 homes populated by
about 15,000 
        provides for own-grown fuels to      people, with a child population
above 3,000. 
        Malawians living in a rural areas in Many of these children are not
currently at 
        the Karonga region of Nor thern      school and the G4S School for 
        Malawi. 
        50,000 acacia saplings were placed 
        in the plantation area in 2007. With 
        the saplings safely in place, the 
                                             Under Privileged Children will
provide their 
                                             best 
        project's employees were given         hope of an education. 
        training in planting 
        trees, transplanting trees, how to   A building has been located and is
being 
        irrigate the soil, how to tend to    redesigned and refurbished to
transform it into 
        the trees that were not faring so    a school. G4S India will provide
books and 
        well and finally how to use crop     other school equipment, along with
teachers to 
        rotation in order to grow staple     provide a structured curriculum of
education 
        foods, such as maize, at the same    for the children. The
schoolOperating 
        time as the trees. 
        The villagers involved in the 
        project are earning a recurring 
        living wage from the G4S Community 
        Trees 
                                             will provide education facilities
for up to 300 
                                             students. project and their
training in the 
                                             maintenance and 
                                             The school's seven classrooms will
each 
                                             accommodate 
&       care of the tress is ongoing, making 30-35 pupils. Additional
facilities will 
Financ-        a real difference staff room, an     incorporate a 
al      administration block, a principal's 
        office, 
        to the lives of the villagers 
        involved in the project. a media 
        room and a computer lab for 
        students. The 
Review  Plans are already underwa y to plant aim is to open the school in the
second half of 
        a new crop of                        2008. 
        trees in 2008 to ensure the 
        plantation grows further. 

(continued)

G4S plc | Annual Report & Accounts 2007 27

China - G4S China Jifu Action Project - The G4S 4teen programme was developed
to provide 
G4S Jifu Action is an educational       support to aspiring young athletes from
developing 
project in Shanghai, which aims to      markets, with a view to them achieving
their 
provide a purposeful learning           sporting dream of competing in a future
Olympic 
environment for the children of the     Games. 
Nanhui Taoyuan Orphans' Foster Home 
Center and improved educational 
facilities for local orphans in Nanhui. 
                                        We worked closely with the National
Olympic 
                                        Committees from 13 countries
(Bangladesh, Botswana, 
                                        Chinese Taipei,Colombia, Estonia, The
G4S Jifu 
                                        Action Project was launched at the end
of 2007. In 
                                        its first 
                                        Guatemala, India, Kazakhstan, Kenya,
Macau, Nigeria, 
                                        South Africa,Thailand) term of
education the project 
                                        enrolled 12 disabled children. Two
teachers 
                                        to select 14 young people who would
benefit from the 
                                        programme. employed by the project
provide the 
                                        children with eight courses including
Chinese, 
                                        mathematics, physical education and
handicrafts. The 
                                        number of 
                                        As well as providing financial and
other support to 
                                        the 14 selected 

children who are offered this           athletes, G4S is proud to have
attracted a global 
structured education will increase over sporting icon to act as 
the 

life of the project with over 80 children   a project ambassador and a mentor
to the G4S 
benefiting from the G4S Jifu                4teen members. 

Action Project education    Haile Gebrselassie is a double gold medal winning 
programme.                  Olympian and the 

Russia - G4S for Children Project - The current world record holder for the
Marathon 
G4S for Children Project has            following his win at the 

found a positive way of helping support the work of   Berlin Marathon in
October 
two children's                                        2007. 

homes, which are known as “Internats”,   Haile has provided inspiration and
practical 
in the Moscow region, both of which care support to the athletes, offering his
advice to 
for children with disabilities; the two  some of the 4teen to help them
overcome the 
beneficiaries are the Municipal          barriers they have faced during their
training. He 
Institution, Special Secondary School -  is a national hero for Ethiopia and in
the world of 
Internat for Children with Sight         sport and has become an inspirational
member of the 
Disabilities, and the Specialised School G4S global family. 
- Internat for Orphans with Health or 
Physical Development Disabilities. 

The aim of the G4S for Children Project Future Development - launched to the
world in June 
is to improve the lives of the children 2007, the G4S 4teen programme continues
to grow 
living in the Internats through the     from strength to strength. Many of the
4teen have 
provision of specialist education,      achieved great success at major
sporting 
general equipment and sporting          competitions around the world, some
have won 
equipment for the children at the       national sporting awards, and we 
specialised school. 

G4S for Children has provided for      expect at least four of the 4teen to
represent 
three classrooms in the special        their countries in the 

secondary school and equipment such as interactive   Olympic Games in Beijing
in 
white boards,                                        2008. 

projectors and computers - all of which   In addition to financial support,
some of the 
           were installed in time for the athletes have received very 
           practical support from their 
           local G4S businesses, such as 
           computer skills 
school's 70th anniversary celebrations in 
March 2008. 

G4S Russia hopes its community project   training, English language lessons,
mentoring and 
will throw a lifeline to many            media training - 

children, giving them the opportunity to  all of which have helped them prepare
themselves 
pursue lives as adults that are           to compete on the 

promising and rewarding. international stage.

Developing Young People - G4S 4teen -    G4S has played a significant role in
helping 
Engaging a large international           these young people to 

workforce in a major global brand is a    become the best they can be in their
chosen 
challenging target. In 2007, we           sport during 2007 and 

launched an international sporting aimed is fully committed to continuing to
provide 
programme for young people,              practical and financial help 

at inspiring G4S employees throughout   to our very special 14 talented
sportsmen and 
the world and making them               women for the next 

proud to be a part of G4S - in a way which is not limited to a par    five
years. 
ticular 

language, race or religion.

28

Alf Duch-Pedersen (61) Nick Buckles (47)

CHAIRMAN CHIEF EXECUTIVE

Alf was appointed to the board in May     Nick was appointed to the board in
May 
2004 and became chairman of the board in  2004 and was the company's deputy
chief 
June 2006. He is also chairman of the     executive and chief operating
officer. 
Nomination Committee.                     Alf's career has involved 
                                          He became chief executive in July
2005. 
managing multi-national companies         Nick joined Securicor in 1985 as a 
covering                                  projects accountant. In 1996 he was 
                                          appointed 
a range of industries from manufacturing 
and 
financial services to food and food       managing director of Securicor Cash 
products. 
He was president and chief executive of   Services and became chief executive
of 
                                          the 
Tryg-Baltica A/S from 1991 to 1997 and    security division of Securicor in
1999. 
                                          He 
fulfilled the same roles at Danisco A/S   was appointed to the board of
Securicor 
from 1997 to 2006. He is now chairman of  plc in 2000 and became its chief 
the board of Danske Bank A/S, a member of executive in January 2002. Nick is a 
the board of the Technical University of  non-executive director of Arriva plc. 
Denmark, chairman of the British Chamber 
of Commerce in Denmark and chairman of 
the Danish government's committee to 
modernise Danish corporate legislation. 

Trevor Dighton (58) Grahame Gibson (55)

CHIEF FINANCIAL OFFICER CHIEF OPERATING OFFICER

          Trevor was appointed to the   Grahame was appointed to the board in 
          board in May 2004. An 
          accountant, he joined 
          Securicor in 
                                        April 2005. He joined Group 4 in 1983,
1995 after 
                                        a previous career which included 
                                        starting as finance director (UK) and
then 
          posts in both the accountancy deputy managing director (UK), followed
by 
          profession 
          and in industry, including    a number of senior group roles,
including 
          five years in Papua New 
          Guinea, three years in Zambia 
          and 
                                        vice president (corporate strategy),
vice 
          seven years with BET plc. He         president        (finance and 
          joined                                               
administration), vice 
          Securicor's vehicle services  president operations     & South 
          division in 1995,             (UK, Central 
          was appointed finance           Eastern Europe) and, in 2000, chief
operating 
          director of its security 
          division in 1997 and became   officer of Group 4 Falck. In July 2004,
he became 
          its deputy                    the company's divisional president 
          group finance director in 
          2001. He was 
          appointed to the board of     for Americas & New Markets. Grahame 
          Securicor plc as group 
          finance director in June 
          2002. Trevor 
                                        became the company's chief operating 
Board of  became the compan y's chief   officer in July 2005. 
          financial officer 
          in July 2004. 
Directors 

G4S plc | Annual Report & Accounts 2007 29

Thorleif Krarup (55)       Sir Malcolm Williamson (69)       Mark Elliott (58) 
NON-EXECUTIVE DIRECTOR     SENIOR INDEPENDENT DIRECTOR       NON-EXECUTIVE
DIRECTOR 
Thorleif was appointed to  Malcolm was appointed to the boardMark was appointed
to the board 
the board in May 2004 and  in May 2004 and is the senior     in 
is chairman of the Audit   independent director 
                                                             September 2006 and
is a member 
                                                             of the Committee.
A former 
                                                             chairman of TDC 
                           and a member of the Audit and     Remuneration
Committee. Until he 
                           Nomination (Tele Danmark          retired 
                           Corporation) and former 
                           Committees. After a 28-year careerin April 2008,
Mark was General 
                           with                              Manager, 
group chief executive of   Barclays Bank plc, he became      Global Solution
Sales, for IBM. 
Nykredit A/S,              managing                          Based in the USA,
he joined IBM 
                                                             in 1970 and
occupied a 
Unibank A/S and Nordea     director of Girobank plc and a 
AB,Thor leif is            member of the UK Post Office board 
                           in 1985. In 1989 
currently chairman of                                        number of senior
management 
Exiqon A/S and Sport                                         positions in 
One Danmark A/S. He is alsohe joined Standard Chartered plc, that company
including General 
deputy                     being                             Manager, 
chairman of H. Lundbeck    group chief executive from 1993 toIBM Europe, Middle
East and 
A/S, ALK-Abello            1998.                             Africa where 
A/S and LFI A/S and a      Between 1998 and 2004 he was      he was responsible
for that 
director of Bang & Olufsen president                         company's 
A/S, Brightpoint Inc. and 
the 
                           and CEO of Visa International,    operations in over
120 
                           Inc. He is Lundbeck Foundation.   countries. Mark 
                            chairman of      Group plc, CDC  non-executive
director of Reed 
                                             Group           Elsevier PLC 
                           plc, National     Europe          and Reed Elsevier
NV and serves 
                           Australia Group                   on the 
                           and Clydesdale Bank plc, deputy   Dean's Advisory
Council and the 
                           chairman of                       Technology 
                           Resolution plc and a non-executiveAdvisory Council
at Indiana 
                           director                          University. 
                           of National Australia Bank Ltd and 
                           JP 
                           Morgan Cazenove 
                           Holdings. 

Lord Condon (61)               Bo Lerenius (61)         Mark Seligman (52) 
DEPUTY CHAIRMAN                NON-EXECUTIVE DIRECTOR   NON-EXECUTIVE DIRECTOR 
Lord Condon was appointed to   Bo was appointed to the  Mark was appointed to
the board in 
the board in May 2004. He      board in May 2004 and is January 2006 and is a
member of the 
became deputy chairman of the  a member of the Audit andAudit and Remuneration
Committees. 
board in September 2006 and is Remuneration Committees. Having qualified as a
chartered 
chairman of the Remuneration   After a diverse early    accountant with Price
Waterhouse, 
Committee and a member of the  business career, he      Mark 
Nomination Committee. Paul     served as chief executive 
                               of Ernstromgruppen, a 
                               Swedish 
                                                                       spent 12
years with 
joined the Metropolitan Police building materials       SG Warburg before
joining BZW in 
in 1967 and,                   business, between 1985   1995 
after holding various senior   and 1992 when he joined  and then, following the
takeover of 
appointments in                Stena Line where he was  BZW, 
                               chief executive and vice 
                               chairman. 
the police force, including a                           becoming head of UK
Investment 
period as Chief Constable of                            Banking at 
Kent, served as Commissioner of 
                               In 1999 he became group  CSFB and subsequently
deputy 
                               chief executive of the   chairman of 
                               Metropolitan Police 
                               between 1993 and 
                               Associated British Ports CSFB Europe. In 2003 he
became 
                               Holdings                 chairman 
2000. He was created a life    non-executive director ofof UK Investment
Banking for CSFB 
peer in 2001 and is President  Land Securities          and in 2005 became a
senior adviser 
of the British Security                                 to Credit 
Industry 
                               Group plc and Thomas Cook 
                               Group plc, 
Association, an advisor to     chairman of the Swedish  Suisse Europe. He is an
alternate 
international sports           Chamber of               member 
governing bodies, a director ofCommerce for the United  of the Panel on
Takeovers and 
Tenix                          Kingdom and an           Mergers and is a
director of the 
                                                        Industrial Development 
(Holdings) UK Limited and a    advisor to the 
member of the advisory board ofinfrastructure fund of 
Vidient Systems Inc.           Swedish 
                               venture capital group,   Advisory Board. 
                               EQT. 

30

Nick Buckles        Grahame                  Søren Lundsberg-Nielsen 
                    Gibson 
CHIEF EXECUTIVE     COO & DIVISIONAL         GROUP GENERAL COUNSEL 
                    PRESIDENT - 
Nick has worked in  SECURITY                 Søren began his career as a lawyer
in Denmark and since 1984 
the security        SERVICES                 he has had a wide range of legal 
industry for 23 
years, focusing 
throughout this time 
on the 
                    Grahame has been involved 
                    in the security 
commercial and      industry for 25 years,   experience as general counsel for
international 
strategic aspects ofhaving joined Group 4's 
all areas of        UK operating company in 
security services.  1983 as finance director. 
                                             groups in Denmark, Belgium and the
US before joining Group 4 
                                             Falck in 2001 as general counsel.
After a variety of 
                                             commercial roles throughout 
                    Since that time, Grahame 
                    has held a number of 
                    Søren has been involved 
                    in a wide range of the 
                    group, he was responsible 
                    for driving 
                    operational, management 
                    and board positions in 
significant profit  the UK, Denmark, the     successful mergers and
acquisitions during his 
improvements in manyNetherlands and Austria. 
Securicor 
businesses          His broad experience of  career,including the acquisition
of 
throughout the 1990sthe security industry and 
as a business 
unit managing       management of businesses       the merger of Group 4 Falck
and Securicor. Søren 
director and        across a diverse range 
divisional chief 
executive of the    of cultures has been     now has overall responsibility for
all internal and 
security division.  invaluable to the group 
He was also 
instrumental in the throughout its           external legal services for G4S as
well as the 
development of      development. Grahame 
Securicor's         joined the 
security sector     board of Group 4         group's insurance programme. 
focus and in        Securicor in April 2005. 
bringing together 
Group 4 Falck and   Grahame is a board memberSøren is a member of the Danish
Bar and Law Society,a board 
Securicor to create of the Ligue             member of the Danish Blood 
the new combined    Internationale des 
group. Nick became  Societes de Surveillance. 
chief executive of  Donation Society and 
G4S in July 2005.   author of the book 
“Executive 
Management 
Contracts”, 
published Nick is 
chairman of the 
Ligue Internationale 
des 
                                             in Denmark. 
Societes de 
Surveillance, the 
international 
association of 
leading security 
companies. 
Trevor Dighton      Ken Niven                Irene Cowden 
CHIEF FINANCIAL     DIVISIONAL PRESIDENT -   GROUP HR DIRECTOR 
OFFICER             CASH SERVICES 
Trevor has worked inKen has 12 years'        Irene has spent her career in HR
management, specialising in 
the security        experience in the        employee relations, organisational
development, talent 
industry for 22     security industry, havingmanagement and compensation
issues. She has been involved in 
years. After severaljoined Securicor in 1996 major change projects including
the cultural and integration 
years in both the   as operations director ofaspects of mergers and
acquisitions as 
accountancy         the UK cash services 
profession and      business where he was 
commerce working in later promoted to 
the finance functionmanaging director and was 
and general         instrumental in the 
management, he      development of new 
joined BET in 1986  product areas, including 
as finance director cash well as large scale 
of their Security   organisational change 
and Communications  involving independent ATM 
Division. centre    network. 
outsourcing and 
establishing 
Securicor's Trevor 
joined Securicor in 
1995 and,following a 
                                             workforce restructuring, working
in partner ship 
number of years as                           with major trade unions. 
finance director of 
the security 
division, he was 
appointed to the 
board 
                    Ken was appointed to his 
                    current role in July of 
                    Securicor plc in June 
                    2002 as group finance 
                    2004 and is responsible  Irene has worked in the security
industry for services 
                    for the group's cash     division, which includes all of
the major 
                    director.He became chief 
                    financial officer of G4S 
                                             30 years and has held director
level positions at in July 
                                             2004. 
                    cash services business   business unit, divisional and
corporate level. She 
                    units, and for sharing 
                    cash services best 
                    practice throughout the 
                    entire 
                                             was appointed to the Board of
Securicor plc in Trevor is a 
                                             member of the Chartered Institute 
                    organisation. Ken joined 2002 as Group HR Director. 
                    the security industry 
of Management       following a successful 
Accountants.        career within the 
                    logistics 
                    managementwhere he held  Irene is a member of the Chartered
Institute of 
                    industry  senior roles 

at Express Foods, Excel Logistics and Coca     Personnel and Development
(MCIPD). 
Cola. 

           Ken is president of ESTA,the European cash     
           services association and is a member of the    
           Chartered Institute of Logistics and Transport.
Executive                                                 
Management                                                

Report of the Directors                                                        
                 3 1 
For the year ended 31 December 2007 
The directorstatements of that compans have pleasure in presenting their y and
its subsidiaries,Annassociated underual Report 
together with the audited ftakings and joint ventures (“the group”) financial
statements of G4S plc and the consolidated for 
the year ended 31 December 2007.inancial G4S plc has its primary listing on the
London Stock Exchange and a secondar y listing 
on the Copenhagen Stock Exchange. 1 
                   G4S plc is a parent companPrincipal activities of the gry
with subsidiaroupies,associated undertakings and 
                   joint ventures. The prsystems) and the management and
trincipal activities of the group compransporise the 
                   protation of cash and valuabvision of security serles.vices
(including manned security services,justice 
                   services and security 
        2          The consolidated result fGroup resultsor the year 
                   is shown in the consolidated income statement on 
                   page 48. 
                   Details of major binformation which fulfusiness activities
during the year,future developments,principal 
                   risks and uncertainties and prospects of the group and
incorporated in this reporills the requirements of 
                   the Business Review are contained in the Opert by
reference.The group'ating and Financial Review on pages 6 
                   to 27 and areand its exposure to price,s financial risk
management objectives and policies in relation to 
                   its use of financial instruments, on pages 82 to 84. 
                       credit, liquidity and cash-flow risk, to the extent
material, are set out in note 33 to the 
                       consolidated financial statements 
        3          The directorDividendss propose the following net 
                   dividend for the year: 
                   >>InterFinal dividend of 2.85p (DKK 0.2786) per share paim
dividend of 2.11p (DKK 0.2319) per share paid on 
                   16 Noyable on 6 June 2008.vember 2007.
Shareholdercertificated fs on the Danish s by no later than 30 orm 
                   will receiv VP register will receive their dividends in
Danish Kroner.Shareholder s who hold their shares 
                   through CREST or in Registrar 
                       e their dividends in sterApril 2008.ling unless they
prefer to receive Danish Kroner,in which case they 
                       should apply in writing to the 
        4          In  business 
                   Jan- 
                   ign- 
                   fic- 
                   nt 
                   In  2007, 50% of Security and Management Services 
                   Feb-    (PVT) Limited in Pakistan was acquired. 
                   uary 
                   In March 2007, 49% of al Majal Servicemaster was 
                   acquired in Saudi Arabia. In March 2007, 50.1% of 
                   Fidelity Cash Management Services (Pty) Limited in 
                   South Africa was acquired. In March 2007, 50% of 
                   Alfa-Segurança in Mozambique was acquired, 
                   bringing G4S's holding in this company to 100%. In 
                   April 2007, the manned guarding business and 
                   related assets of Protección Patrimonial in Mexico 
                   were acquired. In April 2007, Meldetechnik 
                   Vagyonvédelmi és Villamossági Kft was acquired in 
                   Hungary. In May 2007, SSI, a group providing 
                   security services in Malawi, Mozambique, 
                   Madagascar,Zambia, Mali, Guinea and Ghana, was 
                   acquired. In May 2007, Creco N.V.was acquired in 
                   Belgium. In May 2007, 19.05% of Hashmira Company 
                   Limited, the Israeli security services company, 
                   was acquired, bringing G4S's holding in this 
                   company to 90.05%. In July 2007, G4S Cash Services 
                   (France) SAS was disposed of. In July 2007, 
                   General Private Services was acquired in Morocco. 
                   In July 2007, 84.3% of Bell Communications Limited 
                   was acquired in Ireland, bringing G4S's holding in 
                   this company to 100%. In JulSecury 2007,ity 
                   GroupA.1 Omada Limited,,were acquired in 
                   Ireland.together with the manned security and fire 
                   suppression business and related assets of the 
                   Omada Fire and 
                   In August 2007, Ridderikhoff Group B.V. was 
                   acquired in the Netherlands. In October 2007, 
                   RIG-PR Limited was acquired in the UK. In October 
                   2007, Colsecurity S.A. was acquired in Colombia. 
                   In December 2007, Prosec Security and 
                   Communications Limited was acquired in Papua New 
                   Guinea. In December 2007,Completion remains 
                   subject to regulatoran agreement to acquire De 
                   Facto 1119 Limited,y approvals.the holding company 
                   of the Global Solutions group,was entered into. 
                   In January 2008, Travel Logistics Limited was 
                   acquired in the UK. 

32       Report of the Directors       (continued)
   For the year ended 31 December 2007            

4 In March 2008,Significant business acquisitions,the Rock Steady group of      
  companies was acquired in the UK.disposals and developments (continued)       
  In March 2008, G4S announced an offer for the shares of ArmorGroup            
  International plc. In March 2008,G4S's holding in this compan25% of           
  Aktsiaselts G4S Baltics,y to 90%.the holding company of the G4S subsidiaries  
  in Estonia,Latvia and Lithuania,was acquired,bringing                         
  In March 2008, MJM Investigations, Inc. was acquired in the US. In April 2008,
  RONCO Consulting Corporation was acquired in the US.                          

5 The authorCapital There were 1,281,190,738 shares in issue as at 7 ised and
issued 
  share capital of G4S plc at 31 December 2007 is set out on page 91 (note 37
to the 
  consolidated fApril 2008.inancial statements). 
  Information concerning the company's shares held under option is set out on
pages 91 
  and 92 (note 37 to the consolidated financial statements). Resolutions
grproposed at 
  the compananting the directory's power,subject to certain conditions,to allot
and 
  make market purchases of the company's shares will be 
  provided on s annual general meeting. The resolutions are set out in the
Notice of 
  page 110.   Meeting on page 107 and further explanation is y does not hold
any 
              treasury shares as such. However the 5,209,320 shares held within
the 
              Group 4 Securicor Employee Benefit Trust 
  The 
  compan(“T- 
  e Tr 
  waived its rust”) and refight to receiverred to on page 92 (note 37 to the 
  consolidated fe dividends in respect of the company's shares which it held 
  durinancial statement) are accounted fing the period under reviewor as
treasur.y 
  shares.The Trust has 

6 Research in connection with the devResearch and development e carried out     
  continuously. Research and development of new ser                             
               xpenditure                                                       
  elopment written off to profvices and products and the improit and loss during
  the yvemeear amounted to £2.1m (2006:nt of those currently provided b£1.4m).y 
  the group is                                                                  

7 It is the companPayment of suppliers normally made toy' sthand the group'ose  
  suppliers msepolicy to paeting their oybsupplierligations.sThe companin       
  accordance with the pay and the group do not fyment terolloms negotiated with 
  them.w any formal code or standard on paThus,prompt payment pryment isactice. 
  At 31 December 2007 the trade creditors of the company represented 23 days    
  (2006: 13 days) of annual purchases. At 31 December 2007 the consolidated     
  trade creditors of the group represented 50 days (2006: 40 days) of annual    
  purchases.                                                                    

8 InEmplo supporvolving the group'                                              
    yees                                                                        
  ts ongoing consultation and comms employees in the success and future plans of
  the bunication with employees by helping spread best prusiness is a key strand
  of its approach to retaining the best peopleactice among local management     
  teams,.G4Sdirect comm the most effectivunications with ke processes and tools 
  to estabey internal stakeholderlish prs and ensuractical and effing its       
  oective emploverall policies and stryee invategies support this commitment.   
  Business units use managing direct employee communication approaches alongside
  consultation with trade union and other emploolvement within the local context
  and adopt a ryee representatives as appropriateange of. Attrmeet its          
  customeracting and retaining talented individuals continues to be essential to
  the success of G4S,and the diversity of the group's workforce helps it        
  devthe group also aims to retain existing emploelops employees in accordance  
  with their talents and aptitudes,s'expectations.The overall approach of the   
  group to diversity and inclusion therefore ensures that G4S appoints,promotes 
  andyees who become disabregardless of anled wherever possiby disabilityle.,and
  to encourage loyalty and retain employees'skills                              

9                                                                               
  the yThe group remains committed to the suppor Political and charitable       
  contributions                                                                 
  ear amounted to £311,000 (2006: £94,000).tof charities,the community,job      
  creation and training.Charitable contributions by the group during There were 
  no political contributions requiring disclosure under the Companies Acts.     

33

10 The directorSubstantial holdingss have been 
notified of the following substantial shareholdings 
at 7 April 2008 in the ordinary capital of G4S plc: 
INVESCO LimitedSkagen Stichting                     171,939,961 (13.42%)Legal
and General Group 
Administratiekantoor                                Plc63,004,626
(4.92%)51,880,641 (4.05%) 

11 AAuditor directorresolution to re-appoint KPMG s will be submitted to the    
   Audit PlcAnnual Gener,charal Meeting.tered accountants,as auditor to the     
   company and for their remuneration to be fixed by the                        

12 DirThe directorectorss,biographical details of whom are contained on pages
28 and 29,held office 
   throughout the year. s operations, that they continueMalcolm 
   The directorthemselves for re-election.s retiring by rotation are 
   GrThe board believahame Gibson,es that they possess experBo 
   Lerenius and Sir Malcolm ience and experWilliamson.tise relevant 
   to the companMessrs Gibson and Lerenius,y'being eligible,offer to 
   be effective, Williamson has decided not to seek re-election and 
   will therefthat they are committed to the success of the company 
   and that they should be re-elected at the ore retire on 29 May 
   2008 at the end of the AnnAnnual Generual General Meeting.al 
   Meeting.Sir Of those directortermsince it is not fs proposed for a 
   fixed teror re-election,m.Mr Lerenius does not have a contract of 
   service and Mr Gibson's contract of service has no unexpired The 
   contracts of service of the executive directors are terminable at 
   12 months' notice. None of the non-executive directors has a 
   contract of service. The compancapacity as directory has executed 
   deeds of indemnity for the benefit of each of the directors in 
   respect of liabilities which may attach to them in their and have 
   been in effs of the companect since 3 Novyember 2006..These deeds 
   are qualifying third party indemnity provisions as defined by 
   S.309 B of the Companies Act 1985maintained a directors'and 
   officers'liability insurance policy throughout the yA copy of the 
   form of indemnity is aear under reviewvailable on the compan.y's 
   website.The company has 

Details of directorpages 37 to 44.s'interests (including their                  
families'interests) in the share capital of G4S plc and of the                  
directors'remuneration are set out on The directorinformation of which the      
compans who held office at the date of approy's auditor is unaval of this       
directors'report confirm that,so far as they are each aware,there is no relevant
audit himself aware of any relevant audit information and to estabware and each 
director has taklish that the company'en all the steps that he ought to has     
auditor is aware of that information.ve taken as a director to make None of the 
directors had a material interest in any contract significant to the business of
the group during the financial year.                                            

By order of the board                                
PSecretareter David                                  
7 April 2008y                                        
                             The ManorManor Ro       
                      Cr yalWest Sussex RH10 9UNawley

34 Corporate Governance Statement                                               
   The board'in June 2006 (“the Combined Code”).s statement on the company's    
   corporate governance performance is based on the Combined Code on Corporate  
   Governance published The Combined Code requires companies to disclose        
   hoor,where they do not comply,to provide an explanation.w they apply the     
   code's principles,and to confirm that they comply with the code's provisions 

(a) The board comprApplication of Combined Code principles directors, the chief 
exises the non-executive (Nick Buckles),ecutive chairthe chief fman (Alf        
Duch-Pinancial offedericer (Tsen),reva non-exor Dighton) and the chief          
operecutive deputy chairman (Lord Condon),ating officer (Grahame Gibson).five   
other non-exTheecutiveboard considers all the non-executive directors to be     
independent.The senior independent director is Sir Malcolm Williamson. All      
continthemselves fuing directoror re-election at least evs are subject to       
election bery three yeary shareholders.s at the next Annual General Meeting     
following their appointment and will submit Membership of the three board       
committees is as follows: Audit CommitteeThor Bo Lereniusleif Krarup            
(chairman)Mar Sir Malcolm k SeligmanWilliamson RemLord Condon (chairuneration   
Committee Mark Elliott (joined March 2007)man)Bo Lerenius Mark Seligman         
Nomination Committee Lord CondonAlf Duch-Pedersen (chairman)Sir Malcolm         
Williamson                                                                      
Mr Elliott joined the Remfinancial experience.The terunerms of refation         
Committee in March 2007.erence of each of the abovMr Seligman is the member of  
the e committees are available on the companAudit Committee with recent and     
relevanty's website. It is intended that the chairopportunity for communication 
betwmen of the three committees will be aeen the board and                      
shareholdervailabs,parle to answer questions at the Annual General Meeting which
is an important General Meeting, the meeting is informed of the numbers of proxy
votes cast and the same infticularly private shareholderors.Following each      
resolution at the Annualcompany's website.mation is subsequently published on   
the                                                                             

There wsession,ere ten board meetings during the year ended 31 December 2007.One
of the meetings was an extended,two-day,board and strategy bthe UK,usiness plan 
and its commercial and HR strat which presentations on some of the group'the    
other in South Africa, to facilitate greater interategies were discussed.skey   
businesses w-action betwTween the board and the group'o of the board meetings   
were made to the board by senior exere held at subsiecutives and at which the   
group'ss businesses.Thordiary companies'leif Krarup was absent fromoffices,one  
in one board meeting and Sir Malcolm Williamson and Mark Seligman were each     
absent from two meetings.                                                       
At each meeting,includes summaries of devthe board receivelopments on HR        
matteres reports from the chief exs and an inecutivvestor relations repore,the  
chief financial officer and the company secretary,an HR report which from major 
shareholderto the board on the matters since the previous board meeting.s       
considered by each committeeAfter meetings of the board committees,t which      
includes anal.In addition,the board receives monthly management accounts.the    
respectivysts reviews and ane committee chairy comments receivmen reporedt      
There are nine board meetings scheduled for the current year,including a one-day
strategy session.                                                               

35

(a) There is a detailed schedule of matterApplication of 
Combined Code principles (contin (2) Operations; (3) Finance; 
(4) Business control;s reserved to the board which are set out 
under f ued) and (5) Secretarial. By way of example ive separate 
categories: (1) Board and management;investments and capital 
projects exceeding £4m;(b) any changes to the group',board 
approval is required for (a) acquisitions,disposals, 
          and cash flow budgets.    s business strategy; and (c) the annual
trading, capital expenditure 
In the yAll memberear under review,the Audit Committee met three times, the
Remuneration Committee five times and the 
Nomination Committee once. Mark Seligman who was absent from one meeting of the
Rems attended each of the meetings 
except for Sir Malcolm uneration CommitteeWilliamson who was absent from one
meeting of the . 
                                                                    Audit
Committee and 
The perfperformance of the board as a whole was conducted and the formance of
the board and its committees has been 
evaluated in a nindings havumber of ways.A questionnaire-based self-assessment
of the steps are to be taken to review 
the manner in which the board communicates with its stake been considered
dureholdering the ys and the near under 
review.Based on this feedback,and the wa ormance of each of the directory in
which reports are givs and his fen to the 
board has been review umber of board meetings to be held 
          perf                   indings have been discussed bed.In addition,y
the board.the chairman has conducted 
                                 individual evaluations of the 
The chairby the non-exman held meetings with the non-executive
directors,without the chairecutivman present,e 
directors without the exwas led by the senior independent directorecutives
present and a review of the perf.ormance of 
the chairman Both the of the Audit CommitteeAudit and Rem,uneration Committees
have evaluated their performance by 
questionnaire-based self-assessment,completed,in the case reviewed by the
committees concerby both the committee'ned 
and some areas fs members and by the regular attendees of its meetings.The
results of the assessments weremore 
systematic exteror improvement were identified.As a result,some committee
members will undertake 
presentations will be made to the nal training, an additional audit committee
meeting will be held at a time not 
related to a board meeting and moreAudit Committee by regional finance managers
and others. The chief exfinancial 
perforecutivmane and the chief fce,although price sensitivinancial offe inficer
hold regular meetings with individual 
institutional shareholderormation is never divulged at these meetings.s to
discuss the group's strategy and company's 
Annual General Meeting and will be available to answer questions from
shareholderIt is intended that all the 
directors.s will attend the The Nomination Committee is responsibexperience on
the board and its committees.le for 
making recommendations on board appointments and on maintaining a balance of
skills and 

companAudit Committee meetings are attended by secretaryyrepresentatives of the 
group auditor,the chief financial officer,the head of internal audit and        
thef.The committee considers the group's annual and interim financial statements
and any questions raised by the auditor on the interinancial statements and fnal
controls.inancial systems.It also reviews,amongst other matters,whistle blowing 
arrangements,risk management procedures and The of the audit is not             
compromised.Audit Committee has established a policy on the provision by the    
external auditor of non-audit services,                                         
repor  gers and acquisitions, Besides the faudits of emploormal audit function, 

Committeeting standards and coramajor transf.The value of non-audit serporate   
tax serormation deal.The auditor has wrvices provices.The auditor is prohibited 
from proitten to the vided by the auditor mAudit Committee confust not exceed   
the fviding other serirming that,ees charvices without specifin its opinion,ged 
for the statutoric permission from the Auditit is independent.y audit,save in   
the event of                                                                    

The work of the Remuneration Committee is more fully described in the Directors'
Remuneration Report which appears on pages 37 to 44.                            

(b) The companCompliance with pry complied throughout the yovisions of Combined 
Codeear under review with the provisions set out in Section 1 of the Combined   
Code.                                                                           

36 Corporate Governance Statement                                              
     (co- 
                                                                               
     tin- 
                                                                               
     ed) 
   (c) The directorRisk                                mana 
                                                       to 
                                                       man- 
                                                       ge 
                                                       rat- 
                                                       er 
                                                       than 
                                                       eli- 
                                                       ina- 
                                                       e 
                                                       the 
                                                       rs 
                                                       ack- 
                                                       o 
                gement and internal contrwledge their responsibility f 
                                                       isk of failure to
achievor 
                                                       the group' 
                                                        ol 
                                                       e bs system of
interusiness objectivnal control and for 
                                                       reviewing its
effectiveness.The system is designedagainst 
                                                       material misstatement or
loss.es and can only provide 
                                                       reasonable and not
absolute assurance The rgroupisks associated 
                                                       with the group's
activities are review be considered b.Policies 
                                                       and procedures,y the
board to present signifwhich are 
                                                       reviewicant exposureed
and monitored b ed regularly b 
                                                        .  y the head of inter
y the board, which considernal 
                                                           audit,are in place
to deal with ans major risks and 
                                                           evaluates their
impact on they matters which may 
   The key features of the group's risk management process 
   are: 
   > A common robjectives.isk management framework* is used to provide a
profile of those risks which may have an 
   impact on the achievement of business > Each signifensure that intericant
risk is documented,nal audit reviews of 
   the adequacyshowing an over,application and effview of the risk,how the risk
is managed,and any improvement 
   actions.The risk profiles key risks. 
                                                       ectiveness of risk
management and internal controls are 
                                                       targeted on the > 
   Risk management committees hathe divisional and group committees meet quarve
been established at regional, profiles 
   are reviewed and updated at each meeting.terly.A standard agenda co
divisional and group levvering risk and control 
   issues is considered at each meeting and rel.The regional committees meet at
least annually andisk 
    > Risk and control self-evaluation exprof 
   risk evaluations are assessed biles are prepared.Similar 
   ex ercises are undertaken for each operating company, 
   for most companies at least twice a year,and updated 
   risk 
                                                       y the regional and
divisional rercises are undertaken as parisk 
                                                       management committees*.t
of the integration process for all 
                                                       major acquisitions.The
results of the company The process,is 
                                                       carried out under the
owhich is review ecutivver ed regularall 
                                                       superly by the board in
accordance with the internal control 
                                                       guidance for directors
in the Combined Code, 
                             includes both the chief exe and the chief fvision
of the group rinancial offisk 
                                                       management
committeeicer..This committee,which reports to the 
                                                       Audit Committee, ts and
regular reports on risks. 
   The and the group rAudit Committee underisk             They monitor the
actions      They monitor the actions 
   management committee receivtakes a high level review    taken to            
         taken to 
   of re internal audit reporisk management and 
   internal control.Both the divisional risk management 
   committees manage risks. The interrepor assurance 
   from other sources including securting system, nal 
   control system includes clearand written policies 
   and procedures.ly defined reporting lines and 
   authorisation procedures,a comprehensive budgeting 
   and monthly 
                                                       ity inspections,In
addition to a wide rthird party reviews,ange 
                                                       of intercompany fnal
audit reporinancial control 
                                                       reviews,ts,senior
management also receivexternal audit 
                                                       reports,esummaries of
whistle blowing activity,and risk and 
                                                       control
self-evaluations. The board has reviewthe Audit 
                                                       Committee and has taked
the group'en account of evs risk 
                                                       management and interents
since 31 December 2007.nal control 
                                                       system for the year to
31 December 2007 by considering reports 
                                                       from 

PSecretareter David
7 April 2008y      

* Because subject to the same rWackenhut Services,Inc.(“WSI”) is governed       
through a proxy agreement under which the group is excluded from access to      
operational information,it is not processes adopted by isk management process as
is applied to other group companies.WSI.The board has however satisfied itself  
as to the adequacy of the internal control                                      

Directors' Remuneration Report                          3 7 
At 31 December 2007 
This reporcompan 
to the company's rem 
   t, prepared on behalf of and appro 
y'uners Annation policies fual General 
Meeting for the curor approrent f ved 
binancial yy the board, 
             val by the shareholderear and, 
prosubject to ongoing reviewvides details of 
the remuner s. 
                                             , for subsequent f ation of each
of the directorinancial years.s 
                                             and sets out theThe report will be
put 
The Remindependent,unerare Lord Condon (chairation Committee met fivman),e
times durMark Elliott,ing the perBo 
Lerenius and Mariod under reviewk Seligman..The members of the committee,all of
whom are considered to be 
committee is responsible for setting all aspects of the remuneration of the
chairman, the exMarecutivk Elliott 
joined the committee on 1 March 2007.e directors,the three other
memberTheexecutive committee and the company 
secretary.It is also responsible for the operation of the company's share
plans.Its terms of refs of the group 
available on the company's website. 
                                                erence are 
Tremowunerers,Pation advice to the companerrin,Forster & Crosby,Incy.*
(“T.Their terowerms of appointment are 
as Perrin”) has been appointed bvailaby the committee to provide executive and
senior management been appointed 
by the committee to verify the calculation of certain elements of pale on the
companyments due under the 
company's website.In addition y's perfAlithos Limited (“Alithos”) hasTowers
Perrin nor Alithos has provided any 
other services to the company during the period under review. 
                                             ormance share plan. Neither 
Nick Buckles,was received from the group'chief executive,s HR directorprovided
guidance to the committee on 
rem,Irene Cowden.Neither Mr Buckles nor Mruneration packages fs Cowden paror
senior executives within the 
group.Further guidance remuneration. 
                                              ticipated in discussions
regarding their own 

RemThe policy funeration policyor the remuneration of the executive 
directors and the executive management team aims to achieve: 
>>the ability to attra strong link betwact,een exretain and motivate high 
calibre executive reward and the group's perfecutives; >>proalignment of 
the interests of the exvision of incentive arrangements which fecutives 
and the shareholderormance;ocus on both annual and longers;and-term 
performance. 
AThe perfsignificant propor 
performanceormance-related element amounts to around 43% of the total 
package f tion of total remuneration is related to performance, through 
par 
. The committee believes that the current balance is appropriate, 
although it is kor tar ticipation in both shorget perf 
ept under reviewormance and around 63% of the total package f t-term and
long-term 
incentive schemes. 
                                                                        . or
stretch 

irThe committee is satisfresponsible behaviour.ied that the incentive structure 
for the board does not raise environmental,social or governance risks by        
inadvertently motivating Bonus payments do not form part of salary for pension  
purposes.                                                                       

Elements of remuneration

(a) The salarBase salar significant changes in responsibilityies of the ex y and
benefitsecutive directors are reviewed with effect from 1 January each          
year.Interim salary reviews may be carried out following                        

bof their by Towers Pusiness oerrin.The overseas and also reflect
responsibility . The 
salaries take account of a benchmarking exercise based on similarly sized
companies 
with a significant part 
verall objective is, individual performance, internal relativities and salary
and 
to achiev          other market information supplied 
and the proabovemarket norvision of a companms,on the delivycar (or a cash
alloery of 
superior perf e salar 
                       wance in lieu of a car),ormance 
                   y levels which pro,through the companvide a mar health
insury'ance 
                   and lifs incentiv ket competitive schemes.e base salary,with
the 
                   opportunity to earn e assuranceBenef.its include pension 
                   arrangements 

* Trespectivowers Pe names in the ferrin and Alithos haorm and content in which 
they appearve each given,and not withdrawn,their wr.Copies of the consent       
letteritten consent to the issue of this document with the inclusion of the refs
are available for inspection at the company's registered ofference to theirice. 

38 Dire-      (continued)
   tors'            
   Remu-                 
   erat-                 
   on               
   Repo-                 
   t                
   At 31            
   Dece-                 
   ber              
   2007             
   (b)              
   For              
   the              
   yPer-                 
   orma-                 
   ce-r             
   depe-                 
   dent             
   on               
   the              
   atta-                 
   nment            
   of               
   defe-                 
   r                
   under            
   revi-                 
   w                
   elat-                 
   d                
   bon,-                 
   he               
   exec-                 
   tivus            
   sche-                 
   e                
   ined             
   PBTe             
   dire-                 
   torA             
   (pro-                 
   s                
   parit            
   beft-                 
   cipa-                 
   ed in            
   an               
   annu-                 
   l                
   perf-                 
   rman-                 
   e-re-                 
   ated             
   bonus            
   sche-                 
   e,pa-                 
   ments            
   under            
   which            
   were-                 
   tems             
   and              
   disc-                 
   ntin-                 
   ed               
   oper-                 
   tions            
   and              
   using            
   cons-                 
   ant              
   exch-                 
   nge              
   rore             
   tax              
   and              
   amor-                 
   tes.-                 
   he               
   comm-                 
   ttee             
   beli-                 
   vtis-                 
   tion)            
   targ-                 
   ts of            
   the              
   grou-                 
   es               
   that             
   PBT,-                 
   djus-                 
   ed               
   for              
   the              
   effe-                 
   t of             
   any              
   exce-                 
   tion-                 
   l                
   business success 
   within the group.
   For achievement  
   of a threshold   
   level of profits 
   which is slightl 
   increases on a   
   straight line    
   basis up to 80%  
   of base salary   
   for achievement  
   of a stretch     
   profable on      
   achievement of   
   the bit          
   target.udgeted   
   target and the   
   amount of bonusof
   pre-defined key  
   business         
   objectives       
   approved by the  
   RemA further 20% 
   was payable on   
   achievement      
   responsibilities 
   and support      
   longer-term      
   business         
   development.uner-                 
   tion             
   Committee.These  
   objectives vary  
   for each         
   individual       
   according to     
   theirpayable in  
   cash with any    
   excess balance   
   being awarded in 
   the forAny such  
   bonus up to the  
   value of 50% of  
   the executive    
   director's salary
   was ex           

The PBTconstant exchange rA budgeted tarates).gets used for the above scheme
are the same 
as the company's budgeted PBTA for the corresponding period (assuming The
companRemy 
performed well in 2007,with PBTA exceeding target but below maximum full
stretch tar 
addition the committee agreed that the element of bonuneration Committee agreed
that the 
resulting payment for this component of the bonus should be at the 75.2% of
base salar get 
performance. As a result they level.In 
between 16% and 20% of  us dependent on achievement of pre-defined key business
objectives 
base salary.            should be paid at 

(c) Perf 
conditional 
allocations of 
the companThe P 
ormance Sharerformance Share Plan was introduced in Jule Plan (Long-term
incentiv y's 
shares which are released to them only 2004.Under the plan, e plan) 
                 the ex y on the achievecutive directorement of demanding perfs
and certain 
                 other senior exormance tarecutives receivgets.e Follothe plan
has 
                 increased to twwing approval of revisions to the plan at the
company's 
                 2007 Annual General Meeting, the maximum annual award of
shares payable 
                 under half times base salar 
          o and a half times base salary. The annual award approved by the
committee for 
          the year under review is one and ashares under the plan vy for the ex
o 
          est is deter ecutivmined,e directoras to tws and one times
salarothirds of the 
          award,y for senior exby the companecutivy's nores belomalised earw
board levnings 
          per share groel.The extent to which allocations ofwth relative to the
RPI being 
          share prver a single three-yice groear perwth plus dividends paid)
using a 
          bespokiod and,as to the remaining third of the ae global group of 16 
          supporward,by the compant sery's rvices compananking by reference to
ies as a 
          comparTSR (total shareholder returator group,again ovn;asingle
three-year 
          period.er 
In relation to arespects:half of anwards made in previous yyaward is determined
bearys,the 
companthe conditions subject to which allocations of shares vy's normalised
earnings per 
share growth relativest under this plan diffe to the RPI oer in a number of and
the other 
half of the award by the company's ranking by reference to TSR using the
FTSE-100 
constituent companies as at the date of thever a single three year periodaward
as a 
comparator group,again over a single three year period.There is no provision
for retesting. 
The fon 31 December 2009:ollowing targets apply to two-thirds of awards granted
in the year 
under review,with the three-year EPS (earnings per share) period ending 

Average annual growth in EPS                     Proportion of allocation
vesting 
RPI + 6% per annLess than RPI + 6% per annum    NilRPI + 6 - 11% per annum (18%
over 
RPI + 11% per annum (33% oumver three years)    three years)25% Pro rata
between 25% and 
                                                100%100% 
The same targets apply to the first half of 
awards granted in previous years. 

39

(c) The fPerfolloormance Sharwing targets apple Plan (Long-term incentivy to
the remaining 
one third of each ae plan) (continward granted in the yued)ear under review: 
Ranking of the company against 
the bespoke 
comparator group by reference to                             Proportion of
allocation vesting 
TSR 
   Below median                               Nil 
BetwMedianeen median and upper      Pro r     25%Upper quartileata between 25%
and 100%100% 
quartile 

The same tarFTSE-100 constituent companies as at the date of the agets apply to
the second 
half of each award grward.anted in previous years,but the ranking applied is
that of the 
company against the In addition,respect of PSP aparticipants in the PSP will
receivwards 
vesting at the end of the perfe a further share aormance perward with a value
equivalent to 
the dividends which wiod.ould have been paid in In relation to aexceeded the
growards made 
befwth in RPI by 10% oore 2007,ver a perfthere will onlormance pery be a triod
of three 
fansfer of shares under the second half if the groinancial years.wth in EPS of
the company 
has FurRemtherunermoreation Committee is satisf,there will only be a tried that
the 
companansfer of shares under the fy's TSR perfinal third (or second half in
respect of 
aormance is reflective of the company'wards made befs underlying perfore 2007)
if 
theormance. The Remappropr both in teriate perf uneration Committee
believormance measure 
for the perfes that a combination of earormance share plan,nings per share
groas it 
provides a transparent method of assessing the companwth and total shareholder
return 
targets is the mosty's performance, 
been achievms of undered by reference to the companlying financial          
y's earnings 
performance and retury's audited accounts which prons to shareholdervide an 
per 
accessibs.The companle and objectivy calculates whether the EPS perfe 
measure of the companormance targets haveshare,whilst TSR ranking will be 
determined by Towers Perrin whose findings are verified by Alithos. 

disabilityAwards will not nor,redundancymall,retirement or fyvest where an 
emploollowing a change of control of,yee ceases to be emploor sale outside the
group 
of,yed within the group unless cessation of emplohis or her employing
companyment is 
due to death,yinjury,vesting will occur in the normal course and the perf.In
these 
situations, Onl 
       ormance targets will need to be satisfied pro rata to the time the
allocation 
       has been held.employayee was emploproportion of the ayed,will
vward,based on 
       the time which has elapsed from the award date to the end of the last
complete 
       month in which the a greater award to vest if it considerest in these 
       circumstances in most cases.s it to be appropriate in exceptional 
       circumstances.The Remuneration Committee does however retain the ability
to 
       allow for The company's current policy is to use market purchased shares
to 
       satisfy performance share plan awards. The
Remshareholderuners'interests.ation 
       Committee believAccordingles that continued shareholding by executive 
       directors will strengthen the alignment of their interests with made on
the 
       vesting of performance share plan ay,executive directorwards until they
has of 
       the companve by will be expected to retain shares to the value of 30% of
the 
       afteruilt up a shareholding equivalent to one times base salary.-tax
gains 
       Chief ex oAver the past freview of the compan ecutive's rem 
  ew years has been somewhat behind competitivy' 
   uneration rs executive remevieunerwation conducted f 
       e maror the committee bket norms.Folloy wing a consultation with major 
       shareholderTowers Perrin identified that the chief executivs and 
       shareholdere's total pay representativ executive's reme bodies,uneration
with 
       effthe Remunerect from 1 Janation Committee has therefuary 2008
wherebore 
       approy he will receivved a change to the Pe annual awards up to a face
value 
       of 200% of base salarerformance Share Plan element of the chiefy
a(maintaining 
       the same 2/3 and 1/3 split on EPS and level which is closer to, but
still some 
       way behind,TSR respectivmarket norms.ely).The RemThis change results in
the 
       chief exuneration Committee will kecutiveep this position under
reviewe's 
       total direct compensation being at. 

40 Directors' Remuneration Report 
   At 31 December 2007 
   FThe chairees,ser 
   £51,030, with a furman' 
   vice contracts and letters of as 
   ann 
   ther        ther £42,000 fual fee 
   £42,000     is £250,000.or the 
   fual fee is role of deputy 
   £250,000.or chairThe annual f 
   the role of ppointmentee for the 
   deputy      non-ex 
   chairThe 
   annual f 
   ppointment- 
   e for the 
   non-ex 
                              man,  ecutive directors, which is set by the
chairman and the executive 
                                    directors, isand £15,750 f or the role of
senior independent 
                                    director.No other f £15,750 fees are paid
for the chairor 
                                    membermanship of each of the ship of the
board committees.Audit 
                                    and RemThese funeration Committeesees are
subject to 
   per 
   executiviodic review which take directors.es into account comparative fee
levels in other groups of 
   a similar size and the anticipated time commitment for the non- The service
contracts of those who 
   ser ved as executive directors during the period are dated as follows: Nick
BucklesT 
                             2 June 
                             2004 
   Grrevahame Gibsonor       2 June 
   Dighton                   20046 
                             December 
                             2006 
   The contrexecutive directoracts of Messrs on 12 months's Buckles,Dighton and
Gibson are 
   ternotice.There are no liquidated damages prominable by the companvisions fy
on 12 months'or 
   compensation panotice.The contracts are terminable by the company reserves
the right to pay salar 
                                     yable upon early termination, but
thedirectors on no more than 12 
                                     months'notice and that pay in lieu of
notice.yments fIt is the 
                                     company's policy that it should be able to
terminate service 
                                     contracts of executive entitlements for
the notice period. The 
                                     Remuneration Committee is satisfor
termination of contried that 
                                     the current aract are restrricted to the
value of salary and 
                                     other contractualpractice.angements are
appropriate and in line 
                                     with best The chairInthe case of Mr
Seligman,man and the other 
                                     non-exthis term began on 1 Janecutive
directors do not hauary 
                                     2006,vand in the case of Mr Elliott,e
service contracts but 
                                     letterit began on 1 September 2006.s of
appointment which provide 
                                     fThe other non-exor three-year terms.
directors have been granted 
                                     three y 
                                     ecutiverequired to stand for re-election
by the shareholderear 
                                     extensions to their initial letters at
least once evers of 
                                     appointment beginning on 19 May three
years.y 2007.All continuing 
                                     directors are 
   It is the companfees.Mr Buckles is a non-exy's policy that executivecutive
director of e 
   directorArs mariva plc fy each hold not more than one exteror which he
received fees of £35,500 in 
   the ynal non-executive appointment and may retain any associated other
executive directors 
   currently holds an external non-executive appointment. 
                                     ear ended 31 December 2007. Neither of the
PThe perferformance 
                                     gra 2007, based on a hormance
grypothetical shareholding waph 
                                     belo ph 
                            w shows the total cum orth £100,ulative shareholder
return of the company 
                            from its first day of listing,20 July 2004,until 31
Decemberpercompared 
                            with the return achieved by the FTSE-100
constituent companies over the 
                            same geogriod.aphic coThe directorvs believe this
to be an appropriate 
                            form of broad equity market index against which to
base a comparison given 
                            the size andcompares the companerage of the
company's perfory and the fact 
                            that,since December 2007,the company has itself
become a FTSE 100 
                            company.The graph also shareholder return purposes
in the companmance over 
                            the same pery's perfiod with the bespoke group of
companies which is used 
                            now for comparative totalThe values attributable to
the bespoke comparator 
                            group companies haormance share plan.(Until 2007,ve
been wthe FTSE-100 
                            constituent companies were used for this purpose).
companies and spot 
                            exchange rates were used at each of the relevant
dates to obtain constant 
                            cureighted in accordance with the mrency.arket
capitalisation of the 

230 G4S plc                 
    FTSE 100 Index          
210 Bespoke comparator group

190

     
 170 
     
     
 15 0

13 0

110

90                                
20 Jul 31 Dec 31 Dec 31 Dec 31 Dec
  2004  2004   2005   2006   2007 

This graph shows the value at 31 December 2007 of £100 invested in G4S plc on 20
July 2004 compared with the value of £100 invested at the same time in both the 
FTSE 100 Index and the bespoke comparator group used in the company's PSP       
scheme. The other points plotted show the value at the intervening financial    
year ends.                                                                      

41

THE 
FOL- 
OWI- 
G 
INF- 
RMA- 
ION 
HAS 
BEEN 
AUD- 
TED 
Base 
sal- 
ries 
and 
bon- 
ses 
            Bene- 
            its 
            (exc-      Perfor- 
            uding ance 
     Salary pens-      related     2007 2006             2006              2006
             2006 
            on 
     and    cont-        bonus    Total Total            Total            
Total             Total 
     fees   ibut- 
            on) 
         £                            ££££              ££££                   
            ££££ 
Cha- 
rma- 
( 
Alf  237,5-          -       -   237,500161,250            161,250        
161,250          161,250 
Duc-     0 
-Pn- 
n-e- 
ecu- 
ivJ- 
red- 
re)- 
en 
(re-         -     -       -         - 
ired 
30 
June 
200- 
)gen 
Phi- 
ip-- 
øre- 
sen 
(see 705,0-       30,1-      671,1601,406,2711,182,9-                 1,182,990
        1,182,9-                 1,182,990 
note 0      1                     0                                  0 
1 
bel- 
Tre- 
or 
Dig- 
ton- 
) 
(see 436,0-       18,0-      397,632  851,715724,763            724,763        
724,763          724,763 
note 0      3 
1 
bel- 
Gra- 
ame 
Gib- 
onw) 
(see 482,0-       29,5-      448,721  960,258 
not-     6      1 
s 1 
& 2 
bel- 
w) 
Mark 106,19-          --      -- 106,19049,815            67,633T-             
    67,633T-                 67,633Thor 
Ell-     49,815                                        or                or 
ott 
Bo   65,190    -       -    65,19016,2006-                 16,2006-            
     16,2006-                 16,20060,550 
Ler-                                  ,550             ,550              ,550 
niu- 
lief 
Kra- 
up 
Wal-     49,815    -       -    49,81546,800(-                 46,800(-        
         46,800(-                 46,800(retir- 
emar                              etired           etired            etired    
      d 30 June 
Sch-                                  30 June          30 June           30
June          2006) 
idt                               2006)            2006)             2006) 
Mark 49,815-   --      -         -22,500           22,500            22,500    
       22,500 
Sel- 
gman 
Sir  65,190    -       -- 49,81565,190             46,8006-                 
46,8006-                 46,80061,800 
Mal-                                                   ,800              ,800 
olm 
Wil- 
iam- 
on 
Tot-    2,246,-        77,7-      1,517,-       3,841,7593,310,2-              
  3,310,280         3,310,2-                 3,310,280 
l   31      5     13              0                                  0 
Not- 
s: 
 1  the aThe perfward of deformance-related bonerred G4S shares,uses derbased
on a share prived 
    from the companice of 222.67py's bonus scheme w,being the aere paid as 50%
of basic salarverage 
    middle market closing pry in cash and the remainder ice of the company's
ord through 
    shares over the three days immediately following the date of the company's
preliminary results 
    announcement, 11 March 2008. The deferinaryawards were:red share 

TNick Bucklesrevor Dighton 143,110 sharesGrahame Gibson80,673 shares90,826      
                           shares                                               

2 income tax.Grahame Gibson was reimbThe company also paid air fares amounting
to 
  £29,013 fursed £64,761 for expenses associated with his relocation from the
West 
  Midlands to Surrey.This sum is subject to UK or flights between the UK and
the USA 
  for Mr Gibson's wife and children. This 
  sum is taxable in 
  the USA. 
  The annual base salaries of the executive directors and the annual fees of
the 
  non-executive directors at 31 December 2007 were: 
  Executive                                                           £ 
  directors 
  Nick                                                705,000 
  BucklesTrevor 
  Dighton 
  Grahame Gibson                                      436,000490,875 
  Non-executive                                                       £ 
  directors 
  Alf Duch-PLord                                      250,000 
  Condonedersen 
  (chairman) 
  Mark                                                108,780Thorleif
KrElliottar51,030 
  Bo Lerenius up                                               66,780Mar51,030 
  Sir Malcolm k                                                 51,03066,780 
  SeligmanWilliams- 
  n 

42                Directors' Remuneration Report                      
(continued) 
   At 31 December 2007 
   Directors' share options 
                                                                            
Option 
   Nick Buckles                                                                
 AB 
                                                                               
 DC 
                                                                               
E 
                                                                               
 CB 
                                                                               
E 
   Option Option BA= 1996 Securicor Executive Share Option Scheme, exercisable
until 
   June 2008 Option C = Secur= Securicor Exicor Executivecutive Share Option
Schemee 
   Share Option Scheme,exercisable until December 2009Option D= Securicor
Executive 
   Share Option Scheme,,exexercisabercisable until June 2010 Option E =
Securicor 
   Executive Share Option Scheme, exercisable until December 2010le until
December 2011 
   The abounder these schemes will be madeve options,which had been gr.anted
over 
   Securicor plc shares,were rolled over into options over G4S plc shares.No
further 
   grants of options 
   Neither of the above directors exercised options under any of the above
schemes 
   during the year. Asreferared to aboresult of implementation of the Scheme of
ve 
   ceased to apply.This would not occur under the curArrangement of Securicor
plc in 
   Julrent Performance Share Plan.y 2004,the performance conditions for the
executive 
   share options 
   The market price of an ordinary share at 31 December 2006 was 188p. At 31
December 
   2007 it was 244.75p. The highest and lowest market prices of an ordinary
share during 
   the year to 31 December 2007 were 244.75p and 181.75p respectively. 

43

Directors' interests in Performance Share Plan

                               Shares 
                              awarded 
                         conditional-                          Market price at 
                         y 
                At        during year Date of        date of award Vesting date
  2004 awards  At 31.12.07 
                31.12.06              award 
Nick BucklesT   1,062,0-              483,250     06.06.07         212.50p    
06.06.10        368,830   1,176,495 
                5 
Grevrahame     
746,500735,110298,860336,48006.06.0706.06.07212.50p212.50p06.06.1006.06.10276,13
0252,460769,- 
Gibsonor Dighton30819,130 
The conditions subject to which allocations of shares vest under this plan are
described under (c) 
Performance Share Plan on pages 38 and 39. During the year under review the
following performance share plan 
awards from 2004 vested: Nick BucklesT 
                232,362 shares gross (368,830 maximum award; 63% vested;
136,902 shares 
                released after tax, NIC etc) Grrevahame Gibsonor Dighton
173,961 shares gross 
                (276,130 maxim159,049 shares gross (252,460 maximum aum
award;ward;63% v63% 
                vested;ested;114,575 shares released after tax,102,493 shares
released after 
                tax,NIC etc)NIC etc) The market price at date of award (21 July
2004) was 
                £1.23 per share. The market price at the vesting date (30
August 2007) was 
                £1.985 per share. 

Dir(including aectors' inter                                                    
as shown abowards of def                                                        
                                                                    ests in shar
ve) erred shares b es of G4S plc (unaudited)ut excluding shares under option and
    shares awarded conditionally under the performance share plan,both          

                                                                   At 31.12.07 
 -   At 31.12.06 
                                                                               
 t 
                                                                               
 - 
                                                                               
 - 
                                                                               
 - 
                                                                               
 - 
                                                                               
 - 
                                                                               
 - 
                                                                               
 - 
                                                                               
 6 
Nick BucklesLord Condon                                              1,079,849 
 -    975,043 
                                                                               
 - 
                                                                               
 - 
                                                                               
 - 
                                                                               
 - 
                                                                               
 - 
                                                                               
 3 
Trevor Dighton                                   729,4272,000                  
 -    650,9642,000Alf Duch-P 
                                                                               
 - 
                                                                               
 - 
                                                                               
 - 
                                                                               
 - 
                                                                               
 - 
                                                                               
 - 
                                                                               
 - 
                                                                               
 - 
                                                                               
 - 
                                                                               
 - 
                                                                               
 - 
                                                                               
 - 
                                                                               
 - 
                                                                               
 f 
                                                                               
 - 
                                                                               
 - 
                                                                               
 - 
                                                                               
 - 
                                                                               
 - 
                                                                               
 P 
Mark Elliottedersen                        128,560                             
 -    128,560Grahame 
                                                                               
 -    Gibson-- 
                                                                               
 - 
                                                                               
 - 
                                                                               
 - 
                                                                               
 - 
                                                                               
 - 
                                                                               
 - 
                                                                               
 - 
                                                                               
 - 
                                                                               
 - 
                                                                               
 - 
                                                                               
 - 
                                                                               
 e 
                                                                               
 - 
                                                                               
 - 
                                                                               
 - 
                                                                               
 - 
                                                                               
 - 
                                                                               
 - 
                                                                               
 - 
                                                                               
 - 
Thorleif Kr                                512,409                             
 -    397,834Bo 
                                                                               
 -    Lereniusarup3,2063,206 
                                                                               
 - 
                                                                               
 - 
                                                                               
 - 
                                                                               
 - 
                                                                               
 - 
                                                                               
 - 
                                                                               
 o 
                                                                               
 - 
                                                                               
 - 
                                                                               
 - 
                                                                               
 - 
                                                                               
 - 
                                                                               
 - 
                                                                               
 - 
                                                                               
 - 
                                                                               
 - 
                                                                               
 - 
                                                                               
 - 
                                                                               
 - 
                                                                               
 - 
                                                                               
 - 
                                                                               
 - 
                                                                               
 - 
                                                                               
 - 
                                                                               
 - 
                                                                               
 - 
                                                                               
 - 
                                                                               
 - 
                                                                               
 6 
Mar                                            16,000                          
     50,0002,000 
All interests shown above are 
beneficial. 
the aChanges in the exward of deferecutivred shares relating to the 2007
annedirectors'holdings have taken 
place since 31 December 2007 relating to the vual bonus scheme as a result of
which their interests as at 7 
esting of the 2005 PApril 2008 are:erformance Share Plan and Nick BucklesT 
                                      1,202,544 
Grrevahame Gibsonor Dighton                                       
821,284641,878 
As at 31 December 2007,in the Group 4 Securicor Emploeach of Nick Buckles,yee
Benefit Trust.Trevor Dighton 
and Grahame Gibson also had a deemed interest in 5,209,320 ordinary shares held 

44      Directors' Remuneration Report      (continued) 
   At 31 December 2007 
   DirFor the perectors' pension 
   entitlements 
   scheme with a noriod under reviewmal retirement age of 60.,both Nick Buckles
and Trevor Dighton 
   participated in non-contributory categories of a group defined benefit
pension1/52ths of their final 
   pensionable salaries.An actuarTrevor Dighton accrial reduction is applied to
pensions paued pension at 
   a rate of 1/30ths and Nick Buckles accryable befued pension at a rate of
where retirement is deferred 
   beyond normal retirement age. 
                                            ore normal retirement age and an
increase is applied For death 
                                            befprospective pension at the age
of 60 plus a returore 
                                            retirement a capital sum equal to
fn of anour times pensionaby 
                                            contributions paid prle salarior to
the admission to the 
                                            non-contry is payable,together with
a spouse's pension of 50% 
                                            of the member'ibutory category.s
For death in retirement, a 
                                            spouse's pension of 50% of the
member's pre-commutation 
                                            pension is payable. Post retirement
pensions increase in line 
                                            with the increase in the Retail
Prices Index subject to a 
                                            maximum of 5% per annum. Grahame
Gibson opted for enhanced 
                                            protection and receives a salary
supplement in lieu of pension 
                                            of 40% of his basic salary. Pension
entitlements and 
                                            corresponding transfer values
increased as follows during the 
                                            12 months ended 31 December 2007
(all figures are in £'000s): 

                     Increase      Total      Value of                Total  
Transfer value   Transfer value 
           Gross    in accrued     accrued net increase       change in        
   of accrued        of accrued 
       increase in pension net     pension  in accrual   transfer value        
      pension            pension 
      accrued      of          at 31/12/07  over period  during period         
  at 31/12/07       at 31/12/06 
      pension      inflation 
             (1)           (2)         (3)         (4)             (5)         
          (6)                 (7) 
Nick          31           21 
Buck- 
esTr- 
v 
ahame 
Gibs- 
nor 
Digh- 
on 
                                     294           248             606      
3,735                             3,129 
Gr            1711         153       21762         27348              362607
1,1282,975 
Notes 
(i)  of Mr Gibson whose accrPension accruals shown are the amounts which wual
ended on 5 April 2006.ould be paid 
     annually on retirement based on service to the end of the year with the
exception Transfer values have been 
     calculated in accordance with version 8.1 of guidance note GN11 issued by
the actuarial profession. 
(ii) 
(ii-     serThe value of net increase (4) represents the incremental value to
the director of his ser on 5 vice terApril 
)    2006.minated at the year-end.It is based on the increase in accrued
pension (2) with the exception of Mr Gibson 
     whose accr vice during the year, calculated on the assumption thatual
ended 

(iv) directorThe change in trs,such as stock maransfer value (5) includes the   
     effket movements.ect of fluctuations in such value due to factors beyond   
     the control of the company and the Mr Gibson receives a salary supplement  
     in lieu of pension of 40% of his basic salary.                             
(v)                                                                             

LorChaird Condon                             
7 Aprman of the Remil 2008uneration Committee

Statement of directorannual report and the financial                            
statementss'responsibilities in respect of the45 The directorlaw and            
regulations.s are responsible for preparing the Annual Report and the group and 
parent company financial statements, in accordance with applicable Companto     
prepare the group fy law requires the directorinancial statements in accordance 
with IFRSs as adopted bs to prepare group and parent company financial          
statements for each financial year.Under that law they are required company     
financial statements in accordance with UK Accounting Standards and applicaby   
the EU and applicable law (UK Generle laallw and hay Accepted ve elected to     
prepare the parentAccounting Practice). The group fgroup;the Companies inancial 
statements are required bAct 1985 provides in relation to such fy law and IFRSs 
as adopted binancial statements that refy the EU to present fairerences in the  
relevant parly the financial position and the perft of that Act to financial    
statementsormance of the giving a true and fair view are references to their    
achieving a fair presentation.                                                  
The parent company financial statements are required by law to give a true and  
fair view of the state of affairs of the parent company. In preparing each of   
the group and parent company financial statements, the directors are required   
to: >>select suitable accounting policies and then apply them consistently; >   
makfor the group fe judgments and estimates that are reasonabinancial           
statements,state whether they hale and prve been prepared in accordance with    
IFRSs as adopted budent;>for the parent company financial statements,state      
whether applicable UK Accounting Standards have been followed,y the EU;subject  
to any material > prepare the fdepartures disclosed and explained in the parent 
company financial statements;andcontinue in binancial statements on the going   
concerusiness.n basis unless it is inappropriate to presume that the group and  
the parent company will                                                         
The directorparent compans are responsiby and enable them to ensure that its fle
for keeping proper accounting records that disclose with reasonabinancial       
statements comply with the Companies le accurAct 1985.acy at anThey hay time the
financial position of the taking such steps as are reasonably open to them to   
safeguard the assets of the group and to prevent and detect fraud and other irve
general responsibility fregularities.or Under applicabCorporate Govle laernance 
Statement which complw and regulations,the directory with that las are also     
responsibw and those regulations.le for preparing a Report of the               
Directors,Directors'Remuneration Report and                                     

46 Independent auditor's report to the members of G4S plc 
   Wwhich compre have audited the group and parent companise the Consolidated
Income Statement,y financial statements (‘the fthe 
   Consolidated and Pinancial statements') of G4S plc for the year ended 31
December 2007 the Consolidated Statement of Recognised 
   Income and Expense and the related notes.arent CompanThese fy Balance
Sheets,the Consolidated Cash Flow Statement,accounting 
   policies set out therein.We have also audited the information in the
Directors'Remunerinancial statements haation Report that is 
   descrve been prepared under theibed as having been audited. 
   This reporundertaken so that wt is made solele might state to the company to
the company's membery's members,as a body,in 
   accordance with section 235 of the Companies Act 1985. Our audit work has
been purpose. To the fullest extent permitted b 
   s those matters we are        s those matters we are required to state to
them in an auditor's report and for no othermembers as 
   required to state to them in  a body,for our audit work,for this repory
law,we do not accept or assume responsibility to ant,or 
   an auditor's report and for   for the opinions we have formed.yone other
than the company and the company's 
   no othermembers as a body,for 
   our audit work,for this 
   repory law,we do not accept 
   or assume responsibility to 
   ant,or for the opinions we 
   have formed.yone other than 
   the company and the company's 
   RespectivThe directors'e rresponsibilities fesponsibilities of diror 
   preparing the ectors and auditors International Financial Reporting 
   Standards (IFRSs) as adopted bAnnual Report and the Consolidated Financial 
   Statements in accordance with applicaby the EU and for preparing the 
   Parent Companle law andRemuneration Report in accordance with applicable 
   law and UK Accounting Standards (UK Generally 
                                                                              y
financial statements and the Directors' 
   Statement of Directors' Responsibilities on page 45.                     
Accepted Accounting Practice) are set out in the 
   Our responsibility is to audit the flegal and regulatory requirements and
Interinancial statements and the parnational Standards 
   on t of the DirectorAuditing (UK and Ireland).s'Remuneration Report to be
audited in accordance with relevant WDirectore 
   repors't to yRemunerou our opinion as to whether the fation Report to be
audited havinancial statements give a true and fair 
   view and whether the financial statements and the part of the financial
statements, Article 4 of the IAS Regulation.e been 
   properWe also reporly prepared in accordance with the Companies t to y 
                                                                            
Act 1985 and, as regards the groupstatements.This 
                                                                            
information given in the Reporou if,in our opinion,the 
                                                                            
Directors'Report is not consistent with the financial 
                                                                            
that is cross referred from the group results section 
                                                                             of
the Report of the Directors includes that specift 
                                                                             of
the Directors.In addition wic information presented 
                                                                             in
the Operating and Financial Reviewkept proper 
                                                                            
accounting records,if we have not receive report to 
                                                                            
you if,in our opinion,the company has not regarding 
                                                                            
directors' remuneration and other transactions is not 
                                                                            
disclosed.ed all the information and explanations we 
                                                                            
require for our audit,or if information specified by 
                                                                            
law Wfor our review be review whether the Cory the 
                                                                            
Listing Rules of the Financial Serporate Governance 
                                                                            
Statement reflects the companvices Authority, and w 
                                                                            
y's compliance with the nine provisions of the 
                                                                            
Combined Code specified board's statements on internal 
                                                                            
control cover all risks and controls, or for 
                                                                             e
report if it does not. We are not required to 
                                                                            
consider whether theprocedures or its risk and control 
                                                                            
procedures.m an opinion on the effectiveness of the 
                                                                            
group's corporate governance 

Wimplications feread other infor our reporormation contained in the Annual
Report and consider whether it is 
consistent with the audited financial statements. We consider the
responsibilities do not extend to ant if we 
become ay other infware of anormation.y apparent misstatements or material
inconsistencies with the financial 
statements.Our Basis of audit opinionW includes examination,e conducted our
audit in accordance with Interon 
a test basis,of evidence relevant to the amounts anational Standards on
Auditing (UK and Ireland) issued bnd 
disclosures in the fy the Auditing Practices Board. An auditRemuneration
Reportto be audited.It also includes 
an assessment of the significant estimates and judgements made binancial
statements and the pary the 
directort of the Directors' of the financial statements,y disclosed.and of
whether the accounting policies 
are appropriate to the group' 
                                              s in the preparationadequatels
and company's 
                                              circumstances,consistently
applied and 

Wsuffe planned and perficient evidence to givormed our audit so as to obtain all
the information and explanations which we considered necessary in order to      
provide us with from material misstatement,e reasonable assurance that the      
financial statements and the part of the Directors'Remuneration Report to be    
audited are freethe presentation of information in the fwhether caused binancial
statements and the pary fraud or other irregulart of the Directority or error.In
fors'ming our opinion wRemuneration Repore also evaluated the ot to be          
audited.verall adequacy of                                                      

47

OpinionIn our opinion: 
> the group financial statements give a true and fair view, in accordance with
IFRSs as adopted 
by the EU, of the state of the group's affairs > the group fat 31 December 2007
and of its 
profit for the year then ended;>the parent companinancial statements ha of the
parent company 
financial statements giv ve been proper 
y's affairs at 31 December 2007;e a 
tr ly prepared in accordance with the 
Companies ue and fair view, in 
accordance with UK GenerallAct 1985 
and y Accepted Accounting PrArticle 4 
of the IAS Regulation;actice,of the 
state 
> the parent companin accordance with the Companies y financial statements and
the parAct 
1985;andt of the Directors'Remuneration Report to be audited have been properly
prepared > the 
information given in the Report of the Directors is consistent with the
financial statements. 
KPMG Audit Chartered AccountantsPlc 
                                     8 Salisbury Square 
   7Registered AuditorApril 2008                    EC4Y 8BBLondon 

48    Consolidated income statement   
   For the year ended 31 December 2007

                              2007                      2006 
                       Notes    £m                        £m 
Continuing 
operations 
Revenue                  5,64,490.4-       -           4,036.8 
                                   -       - 
                                   -       - 
                                   -       - 
                                   -       - 
                                   -       - 
                                   8      8 
Profit from 
operations before 
amortisation of 
acquisition-rela- 
ed intangib Share 
of profofprofit 
from associates 
le assets and 
share 
it from                      309.1        -             271.6 
associates                                - 
                                          - 
                                          - 
                                          6 
                               3.0                   2.8 PrAmorofit frtisation
of 
                                                     acquisition-related
intangibom operations 
                                                     before amortisation of
acquisition-rle 
                                                     assetselated intangible
assets 
                                                     (PBITA)6312.1274.4 (36.0)
PrFinance 
                                                     incomeofit from operations
before interest 
                                                     and taxation (PBIT) 
                             (41.6)       -             238.4 
                                          - 
                                          - 
                                          - 
                                          4 
Finance costs 
                          12  92.6                      79.5 
                          13(146.3)       -             199.5 
                                          - 
                                          - 
                                          - 
                                          5 
--BefOn amorore              (71.1)                             (67.4) 
amortisation of 
acquisition-related 
intangibtisation of 
acquisition-related 
intangible assetsle 
assets 14.9 
                                                        10.8 
                          14 (56.2)                             (56.6) 
Profit after                 160.6        -             142.9 
taxation                                  - 
                                          - 
                                          - 
                                          9 
Loss from                  7     -                              (33.0) 
discontinued 
operations 
Profit for the               160.6        -             109.9 
year                                      - 
                                          - 
                                          - 
                                          9 
Attributable to: 
MinorEquity                  147.2                      96.5 
holderity 
interestss of the 
parent 
                              13.4                      13.4 
Profit for the               160.6        -             109.9 
year                                      - 
                                          - 
                                          - 
                                          9 
Earnings per              16 
share 
attributable to 
equity 
shareholders of 
the parent For 
profBasicit from 
continuing 
operations: 
Diluted 
                             11.5p        -             10.2p 
                                          - 
                                          - 
                                          - 
                                          p 
                             11.5p        -             10.2p 
                                          - 
                                          - 
                                          - 
                                          p 
BasicFor profit              11.5p                      7.6p 
from continuing 
and discontinued 
operations:Dilut- 
d 
                             11.5p                      7.6p 

Consolidated balance sheet 4 9
At 31 December 2007           

                                                                       2007    
 2006 
                                                             Notes       £m    
   £m 
ASSETS Non-curGoodwillrent assets 
Other acquisition-related intangib 
                                                               1 9  1,332.4  
1,175.6 
Other    le assets           le assets          le assets      1 9    219.9    
220.6 
intangib- 
e assets 
Property 
                                                               1 9     31.3    
 22.2 
In       , plant    , plant and                                2 0    400.9    
354.9 
         and        equipment 
         equipment 
Trvestme- 
t in 
associat- 
s 
                                                               2 2     10.2    
  7.3 
Defade and other receivaberred tax assetsles 
                                                                25     69.4    
 49.9 
                                                                36     84.2    
115.7 
                                                                    2,148.3  
1,946.2 
CurInrent 
assets 
Invvento- 
ies 
                                                                23     57.1    
 49.5 
Trade and other receivabestmentsles 
                                                                24     73.2    
 73.7 
Cash and cash equivalents 
                                                                25    885.0    
798.3 
Assets classified as held for sale 
                                                                28    381.3    
307.5 
                                                                27    130.9    
    - 
                                                                    1,527.5  
1,229.0 
Total                                                            6  3,675.8  
3,175.2 
assets 
LIABILIT- 
ES 
CurBank 
orent 
liabilit- 
es 
Bank 
loansver- 
rafts 
                                                           2 8, 29  (109.9)    
(97.5) 
ObTligations under finance leases 
                                                                29  (80.6)     
(70.1) 
                                                                30  (16.2)     
(13.6) 
Currade and other payables 
                                                                31  (845.7) 
Retirement benefrent tax liabilities 
                                                                              
(710.2) 
 it obligations      it obligations                                 (18.0)     
(26.3) 
ProLiabilities associated with assets classifvisions 
                                                                34  (47.3)     
(42.2) 
         ied as              ied as             ied as held 
         held for            held for           for sale 
         sale                sale 
                                                                35  (23.6)     
(41.3) 
                                                                27  (78.3)     
    - 
                                                                   (1,219.6)
(1,001.2) 
Non-curBank loansrent liabilities 
Loan 
notes 
                                                                29  (729.1)   
(830.3) 
ObTligations under finance leases 
                                                                29  (290.4)    
    - 
                                                                30  (46.0)     
(42.5) 
Retirement benefrade and other pait obyabligationsles 
                                                                31  (38.7)     
 (1.0) 
Provisio- 
s 
                                                                34  (120.1)   
(208.3) 
Deferred 
tax 
liabilit- 
es 
                                                                35  (33.9)     
(38.7) 
                                                                36  (75.0)     
(81.7) 
                                                                   (1,333.2)
(1,202.5) 
Total                                                            6 (2,552.8)
(2,203.7) 
liabilit- 
es 
Net                                                                 1,123.0    
971.5 
assets 
EQUITYSh- 
re 
capital 
Share 
premium 
and reser 
                                                                37    320.2    
320.0 
Equity   ves                 ves                                38    766.9    
615.2 
attribut- 
b 
Minority interestsle to equity holders of the parent 35.9           1,087.1    
935.2 
                                                                               
 36.3 
Total                                                               1,123.0    
971.5 
equity 
The consolidated financial statements were approved by the board of 
directors and authorised for issue on 7 April 2008. They were 
signed on its behalf by: Nick BucklesDirector 
         DirectorT-                    DirectorT-                   DirectorTr- 
         evor                evor               vor Dighton 
         Dighton             Dighton 

50  Consolidated cash flow statement  
   For the year ended 31 December 2007

                                                                               
                     2007   2006 
                                                                               
             Notes     £m    £m 
PrLoss befofit before taxation from discontinore taxationued operations (0.3)  
                    216.8  199.5 
                                                                               
                            (31.6) 
Adjustments fFinance incomeor: 
Finance costs                                                                  
                   ( 92.6)  (79.5) 
Finance costs attr                                                             
                    146.3  118.4 
Depreciation of propeributabtyle to discontinued operations                    
                      3.3   3.0 
AmorAmortisation of acquisition-related intangib,plant and equipmenttisation of
other                91.1   82.8 
intangible assetsle assets 41.6 
                                                                               
                            36.0 
Impairment of other intangible assets                                          
                      8.5   7.4 
Profit on disposal of property, plant and equipment and intangible assets other
than                    -   2.5 
acquisition-related (ProfShare of profit)/loss on disposal of discontinued
operations 
                                                                               
                   ( 14.4)   (1.6) 
                                                                               
                    (12.0) 
Equity-settled trit from associates 
                                                                               
                            14.0 
   ansactions             ansactions                                           
                    ( 3.0)   (2.8) 
                                                                               
                      4.1   5.0 
Operating cash flow before movements in working capital Increase in inIncrease
in                   389.4  353.1 
receivabventories 
                                                                               
                     (9.6) 
Increase/(decrease) in pales 
                                                                               
                             (6.9) 
      yables                  yables                                           
                    (69.7)  (17.7) 
Decrease in provisions                                                         
                     84.1   (13.5) 
                                                                               
                    (36.7)  (47.6) 
Cash generated by operations                                                   
                    357.5  267.4 
Tax paid                                                                       
                    (66.2)  (70.3) 
Net cash flow from operating activities                                        
                    291.3  197.1 
InInterest receivvesting activities 
Cash flow                  ed                                                  
                     24.9   11.5 
Purchases of properfrom associatesty                                           
                      1.0   2.7 
Proceeds on disposal of proper,plant and equipment and intangibty,le assets
other than             (134.5)  (93.2) 
acquisition-related Acquisition of subsidiar 
plant and equipment  plant and equipment and      plant and equipment and
intangible assets          25.5   10.7 
and intangible       intangible assets other than other than
acquisition-related Net cash 
assets other than    acquisition-related Net cash balances acquiredies 
acquisition-related  balances acquiredies 
Net cash balances 
acquiredies 
                                                                               
                   (151.6)  (96.7) 
Disposal of subsidiaries                                                       
                     11.6   3.5 
Purchase of inv                                                                
                      7.9   9.9 
Own shares purchasedestments                                                   
                     (0.3)  (21.8) 
                                                                               
                     (3.1)   (3.1) 
Net cash used in investing activities                                          
                   (218.6) (176.5) 
Financing activitiesShare issues 
Dividends paid to minority interests                                           
                      0.9   9.1 
Loan to minority interests                                                     
                     (3.8)   (3.0) 
Dividends paid to equity shareholderProceeds on issue of loan notess of the
parent RepaOther        (13.3) (49.8)-- 
net moyment of revvement in borolving credit facilities with proceeds from
issue of loan                   59.3) 
notes 
                                                                               
                    280.6     - 
                                                                               
                   (280.6)    - 
Interest paid                          rowings                                 
                    140.4   95.1 
Net cash floRepayment of obw from hedging fligations under financial
instrinance                    (79.9)  (59.3) 
leasesuments (4.3) 
                                                                               
                            11.8 
                                                                               
                     (4.6)   (8.4) 
Net cash flow from financing activities                                        
                    (23.9)   (4.5) 
Net increase in cash, cash equivalents and bank overdrafts Cash,Effect of fcash
equivalents   39     48.8   16.1 
and bank ooreign exchange rate fluctuations on cash heldverdrafts at the
beginning of the 
year 
                                                                               
                    210.0  205.1 
                                                                               
                     11.9   (11.2) 
Cash, cash equivalents and bank overdrafts at the end of the year              
              28    270.7  210.0 

Consolidated statement of recognised income and expense 5 1
For the year ended 31 December 2007                        

                                                                      2007-   
2- 
                                                                          -   
06 
                                                                          - 
                                                                          6     
                                                                        £m    £m
Exchange diffChange in fair value of net inerences on translation of  37.4-   
(- 
foreign operations Change in fair value of cash flovestment hedging       -   
2- 
fw hedging financial instrinancial instruments                            -   
6) 
                                                                          - 
                                                                          - 
                                                                          )     
                                                                     (19.0)  
1- 
                                                                              .6
ActuarTax on items takial gains/(losses) on defen directly to        ( 7.0)     
equityined retirement benefit schemesuments (14.0)                              
                                                                      62.1-   
(- 
                                                                          -   
4- 
                                                                          -   
7) 
                                                                          - 
                                                                          - 
                                                                          )     
                                                                          -  - 
1- 
                                                                          -  - 
9- 
                                                                          -  - 
9 
                                                                          -  - 
                                                                          9 9   
Net recognised income                                                222.7-   
4- 
                                                                          -   
.2 
                                                                          - 
                                                                          2     
AttrEquity holdeributable to:                                                   
Minority interestss of the parent                                    209.3-   
3- 
                                                                          -   
.8 
                                                                          - 
                                                                          8     
                                                                      13.4-   
1- 
                                                                          -   
.4 
                                                                          - 
                                                                          4     
Net recognised income                                                222.7-   
4- 
                                                                          -   
.2 
                                                                          - 
                                                                          2     

52 Notes to the consolidated financial statements

1 AGeneral                    inf to G4S plcresolution was passed at 
                              the 2007 
     ormation                       ormation 
     .                        Annual General Meeting, held on 31 May 2007, to
change the company's name from Group 4 Securicor 
                              plcincorporate the fG4S plc is a company
incorporated in the United Kingdom under the Companies Act 
                              1985. The consolidated financial statements 
  and the group's interest in associates and jointlinancial statements of the
company and entities (its subsidiaries) controlled by 
  the company (collectively comprising the group)its principal activities are
set out in note 6 and in the Opery controlled entities 
  made up to 31 December each yating and Financial Review on pages 6 to
27.ear.The nature of the group's operations and and in a wide 
  range of functional currencies, the most significant being the euro, 
                                                                        The
group operates throughout the worldpresented in 
                                                                       
sterling,as the group's primarthe US dollar and sterling.The 
                                                                        group's
financial statements are The address of the 
                                                                       
registered office is given on page 113.y listing is in the 
                                                                       
UK.Foreign operations are included in accordance with the 
                                                                       
policies set out in note 3. 
2 The consolidated fStatement of compliance use in the European Union   y
financial statements in accordance with UK 
  (adopted IFRSs).inancial statements of the group haThe companve been 
  prepared in accordance with Intery has elected to prepare its parent 
  compannational Financial Reporting Standards adopted forGenerally 
  Accepted Accounting Practice (UK GAAP). These are presented on pages 
  97 to 105. 

3 Significant accounting policies

(a)    of preparation except fJudgements made bor the revaluation of
cerinancial 
The       statements of the group hatain non-current assets and fve been
prepared 
conso-          under the going concerinancial instruments.The principal
accounting 
idated    policies adopted are set out belon basis and using the historical
cost 
fBasis    basis,w. 
estimates with a signify the directoricant risk of maters in the application of 
these accounting polices which haial adjustment,are discussed in note 4.ve a 
significant effect on the financial statements,and durThe comparing the
curativrent 
yeincome statement fear.Revor the year ended 31 December 2006 has been
re-presented 
for operations qualifying as discontinuedto the figures published previouslenue
from 
continyuing operations has been reduced by £316.8m and PBT has been reduced by
£0.5m 
compared sheet as at 31 December 2006 has been restated to reflect the
completion 
dur.Further details of discontinued operations are presented within note 7.In 
addition,the comparative balancemade during 2006.Adjustments made to the proing
2007 
of the initial accounting in respect of acquisitions equivalent increase in the 
reported value of goodwill.visional calculation of the fair values of assets
and 
liabilities acquired amount to £4.7m,The impact of these adjustments on the net 
assets acquired is presented in note 17.with an (b) Basis of consolidation 
SubsidiariesSubsidiar policies of an inies are entities controlled bvestee
entity so 
as to obtain benefy the group.Control is achievits from its activities,ed where
the 
group has the power to govern the financial and operatingterms of any
shareholder 
agreement.determined either by the group's ownership percentage,or by the 

acquisition.On acquisition,Any excess of the cost of acquisition othe assets and
liabilities and contingent liabilities of the acquired bvusiness are measured at
their fair values at the date ofdeficiency in the cost of acquisition below the 
fair values of the identifer the fair values of the identifiable net assets     
acquired (i.eiable net assets acquired is recognised as goodwill.Any income     
statement in the year of acquisition. The cost of acquisition includes the      
present value of consider.discount on acquisition) is credited to theoptions    
held bation payable in respect of put the assets and liabilities recognised.y   
minority shareholderinterest are allocated against the interest of the          
parent,Subsequentls.The interest of minory,any losses applicabity               
shareholderexcept to the extent that the minorle to the minors is stated at the 
minority interest in excess of the carity's proportion of the fair values of ity
has both a binding obrying value of the minorligation and the ability toity make
an additional investment to cover the losses.                                   
The results of subsidiarof control or up to the effies acquired or disposed of  
durectivedate of disposal,as appropring the yiateear are included in the        
consolidated income statement from the eff.ective date JAoint v in that strjoint
v enturenture is a contres                                                      
ategic financial and operactual arrating decisions require the unanimous consent
of the parangement whereby two or more parties undertake an economic activity   
that is subject to joint control,ties. The group'and assets and liabilities of a
jointls interest in joint ventures is accounted fy-controlled entity is combined
line bor using the proporytionate consolidation method,line with similar items  
in the group'wherebs consolidatey the group'd fs share of the resultsinancial   
statements.                                                                     

53

3 Significant accounting policies (continued)

(b) Basis of 
consolidation 
(continued) 
AssociatesAn 
associate is an 
entity o 
participation in the financial and operver which the group is in a ating policy
decisions of the inposition to exvercise 
signifestee.icant influence,but not control or joint control,through The
results and assets and liabilities of associates are 
incorofaccounting.Invporated in the group's consolidated financial statements
using the equity method the net assets of the 
associates,estments in associates are carried in the balance sheet at cost as
adjusted by post-acquisition changes in the 
group's share ofinterest in those associates are not recognised.less any
impairment in the value of individual 
investments.Losses of the associates in excess of the group's 
TAll intrransactions eliminated on consolidation 
venture or associate of the groupa-group transactions,balances,,profincome and
expenses are eliminated on consolidation.its 
and losses are eliminated to the extent of the group'Where a group compans
interest in the relevant joint vy transacts with a 
jointenture or associate. (c) The fForeign cur in curinancial statements of
each of the group' rencies 
                    s businesses are prepared in the functional currency
applicable to that business. Transactions balance 
                    sheet daterencies other than the functional
cur,monetarrency are translated at the rates of exchange 
                    prevailing on the dates of the transactions.At
eachdate.Non-monetary assets and liabilities cary assets 
                    and liabilities which are denominated in other curried at
fair value which are denominated in other 
                    currencies are retrrencies are translated at the rates
prevailing on that at the date when the fair value 
                    was deterGains and losses arising on retrmined.anslation
are included in the income statement 
                    fNon-monetaranslated at the rates prevailing retranslated. 
                    y items measured at historical cost denominated in other
curor the period.rencies are not On 
                    consolidation,acquisition,are translated into sterthe
assets and liabilities of the group'ling at 
                    exchange rates prevailing on the balance sheet dates
overseas operations,including goodwill and fair 
                    value adjustments ar.Income and expenses are trising on
their at the average exchange rates for the 
                    period (unless this is not a reasonable approximation of
the cum 
                    anslated into sterlingthe transaction  anslated into
sterlingthe transaction dates,in which case income 
                    dates,in which case income and         and expenses are
translated at the dates of the 
                    expenses are translated at the dates  
transactions).ulativExchange diffe effect of the rate prevailing 
                    of the transactions).ulativExchange    on recognised in
equityin foreign operations and on bor,together 
                    diffe effect of the rate prevailing on with exchange
diffrowings and other curerences arrency instrising 
                    recognised in equityin foreign         on monetaruments
designated as hedges of such iny items that are 
                    operations and on bor,together with    in substance a
parvestments where and to the extentt of the 
                    exchange diffrowings and other         group'erences ars
net inising arevestment that the hedges are 
                    curerences arrency instrising on       deemed to be
effoperation is disposed of.ective.All such 
                    monetaruments designated as hedges of  translation
differences are recognised in the income statement in 
                    such iny items that are in substance a the period in which
the In order to hedge its trassets are 
                    parvestments where and to the extentt 
denominated,anslation exposure to certhe group utilises 
                    of the group'erences ars net inising   derivativtain fe
foreign currencies in which more than 1% of the 
                    arevestment that the hedges are deemed group's consolidated
net operating of such instruments). 
                    to be effoperation is disposed 
                    of.ective.All such translation 
                    differences are recognised in the 
                    income statement in the period in 
                    which the In order to hedge its 
                    trassets are denominated,anslation 
                    exposure to certhe group utilises 
                    derivativtain fe foreign currencies in 
                    which more than 1% of the group's 
                    consolidated net operating of such 
                    instruments). 
                    inancial instruments (see note 3(d) for details of the
group's accounting policies in respect 
(d) DerivativIn accordance with its treasurefinancial 
instruments and hedge financial risk, not for trading pury 
policyposes.,the group onlSuch financial ry holds or 
issues der accounting 
                    isk includes the interest rivative financial instruments to
manage the group's exposure tothe 
                    group'sfixed-rate borrowings,and foreign exchange risk on
transactions,on the trisk on the group's 
                    variable-rate borrowings,the fair value risk on the group's
net assets measured in foreign currencies, to 
                    the extent that these are not matched banslation of the
group'y foreign curs results and on the 
                    translation ofmanages these risks through a range of
derivative financial instruments,rency 
                    borrowings.The group exchange contracts and currency swaps. 
                    including interest rate swaps, fixed rate agreements,
forward foreign Dermeasurement to fair value is 
                    recognised immediatelivative financial instruments are
recognised in the balance sheet as fy in the 
                    income statement,inancial assets or liabilities at fair
value.The gain or loss on re- qualify for hedge 
                    accounting, the treatment of any resultant gain or loss
depends on the nature of the item being hedged as 
                    descrunless they qualify for hedge accounting.Where deribed
beloivatives dow. FThe change in the fair 
                    value of both the hedging instrair value hedge income
statement. 
                    ument and the related portion of the hedged item is
recognised immediately in the Cash floThe change in 
                    the fair value of the porwhedge subsequently 
                   tion of the hedging instrument that is determined to be an
effective hedge is recognised in equity 
                   andvalue of the hedging instrrecycled to the income
statement when the hedged cash floument is recognised 
                   immediatelyin the income statement.wimpacts the income
statement.The ineffective portion of the fair 

54 Notes to the consolidated financial statements (continued)

3 Significant accounting policies (continued)

(d) Derivative financial instruments and hedge accounting (continued) Net inThe 
change in the fair value of the porvestment hedge subsequentl 
    tion of the hedging instrfair value of the hedging instry recycled to the 
    income statement when the hedged net inument that is deterument is
recognised 
    immediately in the income statement.vestment impacts the income 
    statement.mined to be an effective hedge is recognised in equity andThe 
    ineffective portion of the 

(e) 
Intangible 
assets 
GoodwillAll b 
excess of the cost of acquisition ousiness combinations are accounted fver the
group'or by 
the application of the purchase method.s interest in the fair value of the 
identifiabGoodwill arising on consolidation represents thesubsidiary,associate
or jointlle 
assets and liabilities and contingent liabilities of a minority in a subsidiary
represents 
the excess of the cost of the additional iny-controlled entity at the date of 
acquisition.Goodwill arising on the acquisition of an additional interest from
athe date 
of exchange.Goodwill is stated at cost,less anvestment over the carrying amount
of the net 
assets acquired at frequently if there are indications that amounts may be
impaired.y 
accumulated impairment losses,and is tested annually for impairment or morethe
net 
investment in associates.On disposal of a subsidiary,In respect of
associates,the carrying 
amount of goodwill is included within included in the determination of the
profit or loss 
on disposal.associate or jointly controlled entity the attributable amount of
goodwill is 
Goodwill arbeing tested fising on acquisitions befor impairment at that dateore 
tr.ansition to IFRS on 1 JanGoodwill written off to reseruary 2004 has been
retained at 
the previous UK GAAP amounts,subject to included in determining any subsequent
profit or 
loss on disposal. 
                  ves under UK GAAP prior to 1998 has not been reinstated and
is not 
                  Acquisition-rIntangibelated intangible assets acquisition.le
assets on 
                  acquisitions that are either separSuch acquisition-related
intangible 
                  assets include trable or arising from contractual rights are
recognised 
                  at fair value at the date ofvalue of acquisition-related
intangible 
                  assets is determined bademarks,technology,customer contracts
and 
                  customer relationships.The fair or by the use of appropriate
valuation 
                  techniques, including the roy reference to maryalty relief
method and 
                  the ket prices of similar asexcess earsets,nings method.where
such 
                  information is available, Acquisition-related 
                  intangibacquisition-related intangible assets on an ongoing
basis and,le 
                  assets are amortised by equal annwhere approprual instalments 
                  oiate,vproer their expected economic lifvide for any
impairment in 
                  valuee.The director.s review 
The estimated 
useful lives are 
as follows: 
TCustomer contrrademarksacts and customer relationshipsup to a maximup to a
maximum of fum 
of ten yive yearears Technology 
                   up to a maximum of five yearss 
Other 
intangibDev 
recognised as an intangibelopment expenditure represents expenditure incur le
assets - 
development expenditur 
              le asset only if the following can be demonstrred in estab e 
                  lishing new ser ated: the expenditure creates an identifvices
and 
                  products of the groupiable asset,.Such expenditure ismeasured 
                  reliably,it is probable that it will generate future economic 
                  benefits,it is technically and commerciallits cost can be
sufficient 
                  resources to complete development. In all other instances,
the cost of 
                  such expenditure is taken directly feasiby to the income
statement.le 
                  and the group has Capitalised devmaximelopment expenditure is
amortised 
                  over the period during which the expenditure is expected to
be 
                  revenue-producing,up to a any impairum of ten yment in
valueears.The 
                  director.s review the capitalised development expenditure on
an ongoing 
                  basis and,where appropriate,provide for Research expenditure
is written 
                  off in the year in which it is incurred. Other
intangibComputer software 
                  is capitalised as an intangible assets - software identif 
              le asset if such expenditure (both internally generated and
externally 
              purchased) creates ansoftware is stated at cost,iable asset,if
its cost can 
              be measured reliabnet of depreciation and anly and if it is
probable that it 
              will generate future economic benefits.Capitalised computer cost
of the 
              assets to their estimated residual values byprovision for
impairment. 
              Amortisation is charged on software so as to write off the of
five years. 
              y equal annual instalments over their expected useful economic
lives up to a 
              maximum 

55

3 Significant accounting policies (continued)

(f) ProperProper all property, 
    typlant and equipment is stated at cost,,plant and equipment ty,plant and
equipment other than 
    freehold land.net of accumulated depreciation and any provision for
impairment.Depreciation is 
    provided onestimated residual values by equal annual instalments over their
expected useful 
    economic livDepreciation is calculated so as to wres as fite off the cost
of the assets to 
    theirollows: 
    Freehold and long leasehold 
    bShor 
    Equipment and motor vt leasehold buildings (under 50 y uildings 
                            ehicles ears) 
                                    10% - 33.3%over the life of the lease
Assets held under 
                                    fshorter,over the terinance leases are
depreciated om of the 
                                    relevant lease.ver their expected useful
economic lives on the 
                                    same basis as owned assets or,where 
    Where signifreview the caricant,rying value of properthe residual values
and the useful economic 
    livty,plant and equipment on an ongoing basis and,es of property,plant and
equipment are 
    re-assessed annwhere appropriate,provide for any impairually.The
directorment in values. 

(g) Financial assets and fFinancial instrumentsinancial liabilities are
recognised 
when the group becomes a party to the contractual provisions of the
instruments. 
TTrrade rade receivabeceivables do not carles the use of an allo 
      ry interest and are stated initially at their fair value. The carrying
amount 
      of trade receivables is reduced throughconditions and past default
experwance 
      account.The group proience.vides for bad debts based upon an analysis of
those 
      that are past due in accordance with local 

PFI assetsUnder the ter                                                         
with the purchaser of the associated serms of a Private Finance Initiativade and
other receivables.vices,e (PFI) or similar project,where the risks and rewards  
of ownership of an asset remain largelyvalue within trthe group's interest in   
the asset is classified as a financial asset and included at its discounted     
CurCur including trrent asset in rent asset in                                  
  ansaction costs,vestments compr                                               
     vestments                                                                  
and subsequentlise investments in secury measured at fair valueities,which are  
classif.ied as held-for-trading.They are initially recognised at cost,income    
statement.Gains and losses arising from changes in fair value are recognised in 
the                                                                             

Cash and cash equivalents Cash and cash equivalents compr of the group's cash   
management are included as a component of cash and cash equivalents fise cash   
balances and call deposits.Bank overdrafts that are repaor the puryable on      
demand and fpose of the cash floorw statement.m an integral part                
InterInterest-bearest-bearing borrowings char                                   
     ing bank overdrafts, loans and loan notes are recognised at the value of   
     proceeds received, net of direct issue costs. Financebasis using the       
     effges,including premiums paective interest method.yable on settlement or  
     redemption and direct issue costs,are recognised in the income statement on
     an accrual                                                                 

TTrrade paade payabyles are not interest-bearablesing and are stated initially  
at fair value. Equity instrumentsEquity instruments issued by the group are     
recorded at the value of proceeds received,net of direct issue costs.           

(h) InIn in brv 
               ventorentories 
inging inies are valued at the loventories to their present          Cost is
calculated using either 
condition and location and includes approprwer of cost and net       the
weighted 
realisable value.Cost represents expenditure incuriate overheads.red 
in the ordinary course of business average or the first-in-first-out 
method. completion and disposal. Provision is made fNet realisabor 
obsoletele value is based on estimated selling pr,slow-moving or 
defective items where approprice,less further costs expected to be 
incuriate.red to 

56 Notes to the consolidated financial statements (continued)

3 Significant accounting policies (continued)

(i) The carImpairment of impairrying value of the group's assets,apart from
inventories and 
    deferred tax assets,is reviewed on an ongoing basis for any indication
statement 
    whenevment,and if aner the cary such indication exists,rying value of an
asset or its 
    cash-generthe assets'recoverabating unit exceeds its recole amount is
estimated.An 
    impairverable amount.ment loss is recognised in the income 
    The recofuture cash floverabws derle amount of an asset is the greater of
its net selling 
    priving from the asset discounted to their present value using a pre-tax
discount rice and 
    its value in use,where value in use is assessed as the estimated
assessments of the time 
    value of money and the risks specific to the asset. 
                          ate which reflects current marketthe recoverable
amount is determined 
                          for the cash-generating unit to which the asset
attaches.For an asset 
                          that does not generate largely independent cash
flows, 

The recoattaches.vAn impairerable amount of goodwill is tested annment loss     
recognised in respect of a cash-generually through assessing the carrying values
of the cash generating units to which the goodwill allocated to the             
cash-generating unit, and then to reduce the carrying value of the other assets 
in the unit on a pro-rating unit is allocated first so as to reduce the carrata 
basis.ying value of any goodwill An impairchange in the estimates used to       
determent loss in respect of goodwill is not revmine its recoverersed.In respect
of any other asset,an impairment loss is reversed if there has been a does not  
exceed that which would have been determined (after depreciation and amorable   
amount.The amount of the revtisation) if no impairersal is limited such that the
asset'ment loss had been recognised.s carrying amount (j) When share capital    
recognised as equity is repurchased,Repurchase of share capital tax effects, is 
recognised as a deduction from equity.Where repurchased shares are held bthe    
amount of the consideration paid,y an emploincluding directlyee benefy attrit   
trust,ibutabthey are classifle costs net of anytreasury shares and presented as 
a deduction from equity.ied as                                                  

(k) Employee benefits 
RetirPayments to defement 
benefit costs 
schemes are dealt with as pained contribution schemes are charyments to defined
contrged as an 
expense as they fall dueibution schemes where the group'.Payments made to
state-managed 
retirement benefitarising in a defined contribution retirement benefits
scheme.s obligations 
under the schemes are equivalent to those For defcarried out at each balance
sheet dateined 
benefit schemes,the cost of pro.The discount rviding benefate used is the yield
at the balance 
sheet date on its is determined using the projected unit credit method,AA
credit rwith 
actuarated corporial valuations being have maturity dates approximating to the
terms of th 
                                ate bonds thatare recognised in the income
statement as 
                                components of fe groupinance income and f's
obligations. The 
                                expected finance income on assets and the
finance cost on 
                                liabilities in full in the period in which they
occur and 
                                presented outside the income statement in the
statement of 
                                recognised income and expenseinance cost
respectively.Actuarial 
                                gains and losses are recognised. Poast server
the avice cost is 
                                recognised immediatelverage period until the
benefits vy to the 
                                extent that the benefest.its are already
vested.Otherwise it is 
                                amortised on a straight-line basis The
retirement 
                                benefunrecognised past serit obvice
cost,ligation recognised in 
                                the balance sheet represents the present value
of the 
                                defreduced by the fair value of scheme
assets.Any asset 
                                resulting from this calculation is limited to
unrecognisedined 
                                benefit obligation as adjusted for past service
cost plus the 
                                present value of available refunds and
reductions in future 
                                contributions to the scheme. Long-term serThe
group' benef 
          s net ob vice 
          benefitsligation in 
          respect of long-term 
          ser settled directlit 
          that employ.yees have 
          earned at the balance 
          sheet date vice 
          benef,less the fair 
          value of scheme 
          assets out of which 
          the obits other than 
          retirement benefits 
          represents the 
          present value of the 
          futureligations are 
          to be 

SharThe group issues equity-settled share-based pae-based paymentsyments to     
certain employees.The fair value of share-based payments is determined at the   
date of the shares that will evof grant and expensed,with a corresponding       
increase in equity on a straight-line basis over the vesting period,based on the
group's estimateshares that will eventually ventuallest,y vsavest.e for changes 
resulting from anThe amount expensed is adjusted oy market-related perfver the  
vesting perormance conditions.iod for changes in the estimate of the number of  
The fair value of share-based paadjusted for future dividend receipts and       
fyments granted in the for any market-related performofoptions is measured      
bormance conditions.ythe use of the Black-Scholes valuation technique,          

57

3 Significant accounting policies (continued)

(l) PrProo 
    amount of the obvisions are recognised when a present legal or constr
visions 
    ligati-        uctive obligation exists for a future liability in respect
of a past 
    n can   event and where theof meeting lease requirements on unoccupied 
    be      properly.Items within proties and restructurvisions include claims 
    estima-        against the group'ing provisions for the costs of a business
reors 
    ed      captive insurganisation wherance businesses,e thecosts 
    reliab 
    plans are sufficiently detailed and where the appropriate communication to
those 
    affected has been undertaken at the balance sheet date. Where the time
value of 
    money is materdiscount rate.ial,provisions are stated at the present value
of the 
    expected expenditure using an appropriate 

(m)Revenue recognition                                                          
ReRevv                                                                          
 the consideren                                                                 
  enue represents amounts receivabue                                            
     ation received or receivable fle,or goods and sernet of discounts,Vvices   
     provided in the normal course of business and is measured at the fair value
     ofproducts and fAT and other sales related taxes.Revenue for manned        
     security and cash services secur                                           
      or recurring services in secur ity systems products is recognised over the
      period in which the service is provided. Revenue onmethod in respect of   
      constrity systems installations is recognised either on completion in     
      respect of product sales,uction contracts.or in accordance with the stage 
      of completion                                                             

Construction contractsWhere signif 
Where the outcome of a constricant,security system installations with a
contruction 
contract can be estimated reliabact duration in excess of one month are
accounted 
fly,revenue and costs are recognised bor as construction contracts.completion
of the 
contract activity at the balance sheet date.This is normally measured by the
proportion 
that contry reference to the stage of work to date bear to the estimated total
contract 
costs, except where this would not be representative of the stage of
completion.act costs 
incurred forin contract work,claims and incentive payments are included to the
extent 
that it is likely that they will be agreed with the customerV.ariations 
Where the outcome of a constrincurred that are deemed likely to be          
ely that 
recouction contrveract cannot be estimated reliabable.Contract costs are    
total 
recognised as expenses as they are incurly,contract revenue is recognised to 
the extent of red. Where it is likcontract costs contract costs will exceed 
total contract revenue, the expected loss is recognised immediately as an 
expense. Constrprogress billings.uction contrBalances are not offset.acts 
are recognised on the balance sheet at cost plus profit recognised to 
date,less provision for foreseeable losses and less GoGovvernment grants 
Goverernment grnment grants in respect of items expensed in the income 
statement are recognised as deductions from the associated expenditureants 
in respect of property.the lives of the related assets.,plant and equipment 
are treated as deferred income and released to the income statement over 
InterInterest income is accrest that exactly discounts estimated future cash 
receipts through the expected lifued on a time basis by reference to the 
principal outstanding and at the effe of the financial asset to that 
asset'ective interest rs net carate applicabrying amount.le.This is the rate 
DividendsDividend income from investments is recognised when the 
shareholders'rights to receive payment have been established. 

(n) All borBorrorowing costswing costs are recognised in the income statement.  
(o) PrProfofit frit from operom operations of particular signifations is stated 
after the share of results of associates bicance,including restructuring        
costs,are included within profut befit from operore finance income and fations  
but are disclosed separinance costs.Exceptional items ately.                    

58 Notes to the consolidated financial statements (continued)

3 Significant accounting policies (continued)

(p) TIncome          tax in equityax is 
                     recognised in the income 
                     statement except to the 
                     extent that it relates to 
                     items recognised in equity 
              es                      es 
. The tax expense represents the sum of             , in which case it is
recognised 
current tax and deferred tax. Curexcludes 
items of income or expense that are taxabrent 
tax is based on taxable profit for the 
year.Taxable or deductible profit diffle in 
other yers from net profears and it furit as 
reported in the income statement because it 
deductible. The group's liability for current 
tax is calculated using tax r 
                                               ther excludes items that are
never taxable orsheet date.ates that 
                                               have been enacted or
substantively enacted by the balance 
Defconsolidated ferred tax is the tax expected to be payable or recoverable on
differences between the carrying 
amounts of assets and liabilities in the balance sheet liability
method.inancial statements and the 
corDeferresponding tax bases used in the computation of taxable profit,and is
accounted for using therecognised to 
the extent that it is probabred tax liabilities are generle that taxable
profits will be aally recognised fvailable 
against which deductibor all taxable temporary diffle temporerences.ary
diffDefererences can be utilised.red tax 
assets are Such assets and liabilities are not recognised if the temporor from
the initial recognition (other than 
in a business combination) of other assets and liabilities in a trary
difference arises from the initial recognition 
of goodwill in a bansaction that affects neither the taxusiness combination
profit nor the accounting profit. 
Defexcept where the group is aberred tax liabilities are recognised for taxable
temporary differences ar le futurele 
to control the rev.ersal of the tempor ising on investments in subsidiaries and
interests in joint ventures, 
                      reverse in the foreseeabary difference and it is probable
that the temporary difference will 
                                              not 
The carthat suffricient taxabying amount of defle profits will be aerred tax
assets is reviewvailable to allow all 
or pared at each balance sheet date and reduced to the extent that it is no
longer probabt of the asset to be 
recovered.le Deferred tax is calculated at the tax rates that are expected to
apply in the period when the liability 
is settled or the asset is realised. (q) Leases are classifLeasing All other
leases are classified as finance 
leasied as operes when the terating leases.ms of the lease transfer
substantially all of the risks and rewards of 
ownership to the lessee. 
Assets held under flease payments.The corinance                                
                                  um 
leases are recognised at the inception of the 
lease at their fair value orresponding 
liability to the lessor is included in the 
balance sheet as a finance lease ob,if lower,at 
the present value of the minimligation.Amounts 
due f lessees 
                                               romreceived are apporunder
finance leases are recorded as 
                                               receivabtioned betwles at the
amount of the group's net investment in 
                                               the leases.Lease payments made
or of interest on the outstanding 
                                               balance of the liability or
asset.een finance charges or income and 
                                               the reduction of the lease
liability or asset so as to produce a 
                                               constant rate Rentals
paincentives to enter into operyable or 
                                               receivable under operating
leases.ating leases are charged or 
                                               credited to income on a
straight-line basis over the lease term,as 
                                               are 

(r) ASegment rsegment is a signifeporting the nature of the sericant component
of the 
group which is subject to rvices provided (business segment) or by the economic
enisks 
and rewards distinguishabvironment in which it trle from those of other
segments either 
bansacts business (geographical segment).y (s) Non-curNon-curr to sell. 
           rent assets (and disposal groups) classif ent assets held for sale
and 
           discontinied as held for sale are measured at the loued
operationswer of 
           carrying amount and fair value less costs 

Non-currrent assets and disposal groups are classified as held for sale if
their carrying amount 
will be recovered through a sale transaction is aather than through continuing
use.This condition 
is regarded as met onlywhen the sale is highlyprobable and the asset (or
disposal group) 
recognition as a completed sale within one yvailable for immediate sale in its
present 
condition.ear from the date of classifThe group must be committed to the sale
which should be 
expected to qualify fication.or 
Aoperdiscontinations or is a subsidiarued operation is a component of the
group'y acquired 
exclusivs business that represents a separate major line of business or
geographical area of 
criteria to be classified as held for sale. 
                          ely with a view to resale, that has been disposed of,
has been abandoned 
                          or that meets the 

59

3 Significant accounting policies (continued)

(t) Dividends are recognised as distrDividends not recognised but are disclosed
in the notes to the consolidated fibutions to equity holders in 
    the perinancial statements.iod in which they are declared.Dividends
proposed but not declared are of 
(u) In the yAdoption  neear ended 31 December        and                       
               accounting 
                      2007,w 
    Financial         Financial Instruments:   Financial Instruments:
Disclosures and the related amendment to IAS 1 aPresentation of Financial 
    Instruments:      Disclosures and the      Statementsmendment to IAS 1 
    Disclosures and   related amendment to IAS 
    the related       1 aPresentation of 
    amendment to IAS 1Financial 
    aPresentation of  Statementsmendment to 
    Financial         IAS 1 
    Statementsmendment 
    to IAS 1 
    , both of which   , both of which were effective from 1 January 2007. The
effect of the adoption of IFRS 7 and themanagement of capital. 
    were effective    has been to expand the disclosures provided in these
financial statements regarding the group's financial instruments and 
    from 1 January    Four interThese were:pretations issued by the
International Financial Reporting Interpretations Committee (IFRIC) were 
    2007. The effect  effective for the current year. > IFRIC 7 Applying the
Restatement Approach under IAS 29, Financial Reporting in 
    of the adoption ofHyperinflationary Economies; > IFRIC 8 Scope of IFRS 2; >
IFRIC 9 Reassessment of Embedded Derivatives; and > IFRIC 10 
    IFRS 7 and        Interim Financial Reporting and Impairment. 
    themanagement of 
    capital. has been 
    to expand the 
    disclosures 
    provided in these 
    financial 
    statements 
    regarding the 
    group's financial 
    instruments and 
    Four interThese 
    were:pretations 
    issued by the 
    International 
    Financial 
    Reporting 
    Interpretations 
    Committee (IFRIC) 
    were effective for 
    the current year. 
    > IFRIC 7 Applying 
    the Restatement 
    Approach under IAS 
    29, Financial 
    Reporting in 
    Hyperinflationary 
    Economies; > IFRIC 
    8 Scope of IFRS 2; 
    > IFRIC 9 
    Reassessment of 
    Embedded 
    Derivatives; and > 
    IFRIC 10 Interim 
    Financial 
    Reporting and 
    Impairment. 
    amounts reporThe adoption of these interted for the curpretations has not
resulted in changes to the group'rent or prior years.s accounting 
    policies and has not had a material impact on At the year end, the
following were in issue, endorsed but not yet effective: > IAS 14 IFRS 8 
    Operating Segments which was issued in November 2006 and will apply to the
group from 1 January 2009. This standard supersedes 
    operating segments;Segment Reporand ting and will require the group to
adopt the “management approach” to reporting on the financial 
    performance of its > or after 1 March 2007.IFRIC 11 IFRS 2 - Group and This
interTreasurpretation requires a share-based pay Share 
    Transactions which was issued in Noyment arvember 2006 and is effective for
annual periods beginning on 
    consideration for its own equity-instruments to be accounted for as an
equity-settled share-based parangement in which the group 
    receivyment transaction.es goods or services as At the year end, the
following were in issue, but were not yet endorsed or effective: > IAS 
    1 (Revised) Presentation of Financial Statements; > IAS 23 (Revised)
Borrowing Costs; > IFRIC 12 Service Concession Arrangements; > IFRIC 
    13 Customer Loyalty Programmes; and > IFRIC 14 IAS 19 - The Limit on a
Defined Benefit Asset, Minimum Funding Requirements and their 
    Interaction. 
    IFRIC 14,of the other standards and interif endorsed,may impact on the
group'pretations in future pers valuation of defiods will hained 
    retirement benefve no material financial impact on the fit obligations.The
directorinancial statements of the groups anticipate that the 
    adoption. 
The preparAccounting estimates the application of the group'ation of financial
statements in confs accounting policies,ormity with IFRS 
requires management to make judgements,estimates and assumptions that
affectdate of the fwhich are described in note 3,with respect to the 
carrying amounts of assets and liabilities at the inancial statements, the
disclosure of contingent assets and liabilities at the date of the 
financial statements and the reported amountsand varincome and expenses durious
other factoring the reporting period.These judgements,estimates 
and associated assumptions are based on historical experience 
of 
some cases, actuarial techniques.s that are believAlthough these judgements,ed
to be reasonable under the circumstances,including current and 
expected economic conditions,and incurrent events and circumstances,the actual
results may differestimates and associated assumptions are based 
on management'.s best knowledge of 

the estimate is revised and in anEstimates and underlying assumptions are       
reviewyfuture periods affed on an ongoing basis.ected.Revisions to accounting   
estimates are recognised in the period in which                                 

60 Notes to the consolidated financial statements          (continued) 
   4The    e-  (continestimates and assumptions which are of most
signifued)icance to the group are detailed below: 
    judgem-       t- 
    nts,Ac-       m- 
    ountingt- 
           s 
    VThe 
    initial 
    accounti- 
    g 
    faluation 
    of acquir 
    continge- 
    t 
    liabilit- 
    es as wor 
    an 
    acquisit- 
    on in 
    ed 
    business- 
    s 
    ell as the acquisition cost.volves identifying and deterIn some
instances,mining the fair values to be 
    assigned to identifthis initial accounting can only be deteriable
assets,liabilities andperiod in which the 
    acquisition is effected because the fair values and/or the cost is not
knomined provisionally by the end of 
    the accounting can be completed using provisional values with an 
             wn with full certainty. In such an event, the initialacquisition
date.Additionally,in detery 
             adjustments to those provisional values being completed within 12
months of the valuation techniques 
             are applied. 
           mining the fair value of acquisition-related intangible assets, in
the absence of market prices for 
           similar assets,discounted using the weighted avThese techniques use
a vareriety of estimates including 
           projected future results and expected future cash flows note 17. 
           age cost of capital. Full details of the fair values of assets and
liabilities of acquired businesses 
           are presented in Assessment of the rThe group tests tangible and
intangibecoverable assets,le amounts 
           in rincluding goodwill,espect of assets tested ffor impairment
amounts may be impaired. The impairment 
           anal 
             or impairment on an annual basis or more frequently if there are
indications thatand ev the 
             approprentual disposal of the assets.iate discount rates.The full
methodology and results of the 
             group'Such an anal ysis fysis includes an estimation of the future
anticipated results and cash floor 
             such assets is principally based upon discounted estimated future
cash flo 
              s impairment testing is presented in note 19.ws,annual gro ws
from the usewth rates and 

VThe 
valuation 
of 
defaluati- 
n of retir 
credit method for deterined retirement benef 
             ement benefit ob 
           mining the group's obit schemes is ar 
          ligationsr ived at using the advice of qualified independent
actuaries who 
          use the projected unit appropriate discount rate, 
          ligations. This methodology requires the use of a variety of
assumptions and 
          estimates, including theinflation.Full details of the group'the
expected 
          returs retirement benefn on scheme assets,it obligations,including an 
          analmortality assumptions,future service and earnings increases of
employees 
          and are presented in note 34. 
                     ysis of the sensitivity of the calculations to the key
assumptions 

5 An analRevenysis of the group'ues revenue is as follows: 
                                                                           
2007    2006 
                                                               Notes         
£m      £m 
  ContinSale of goodsuing 
  operations 
  Rendering of ser                                                        
105.3    93.7 
  Rev              vices                                                
4,288.7 3,886.9 
  Revenenue from construe from continuing operuction contrations as        
96.4    56.2 
  presented in the consolidated income statementacts 6 
                                                                        
4,490.4 4,036.8 
  DiscontinSale of goodsued 
  operations 
     RenderRev 
  Revenenue from constr 
        ing of services                                                     
9.3     7.1 
    ue from discontinuction contrued operationsacts 
                                                                          
259.2   373.6 
                                                                           
16.4    12.5 
                                                                6, 7      
284.9   393.2 
  Other operating 
  incomeInterest income 
  Net gain in fair value of                                                
15.1    12.3 
  loan note derivativ Expected 
  return on defined retirement 
  benefe financial instruments 
  and hedged items 
                                                                            
0.2       - 
  Total other operating       it scheme assets                             
77.3    67.2 
  income 
                                                                           
92.6    79.5 

61

6 The group operBusiness and g substantial proporates in tw 
                          eogra 
                            tion of its revo core product areas: 
                                          phical segments 
  enue and PBIT from each of the fsecurity services and cash     ising the
Middle East and Gulf States, 
  serollovices.The group operates on a worldwide basis and       Latin America
and the Caribbean, 
  derives aIreland,and Continental Europe),North America, and 
  New Markets (comprwing geographical regions:Europe (comprising 
  the United Kingdom and Africa, and Asia Pacific). The 
  curreport brent management stry product area.The group'ucture 
  of the group is a combination of product area and geogrs 
  primary segmentation is therefore by business segment and its 
  secondaraphy,within which the lary segmentation is bger 
  businesses genery geographally.y Segment information is 
  presented below: Segment revenue 

Revenue by        Con-     Disc-               Cont-     Discontinu- 
business segment  inu-     ntin-               nuingd 
                  ng   ed 
                  ope-     oper-         Total oper-      operations           
                     Total 
                  ati-     tions          tions 
                  ns 
                  2007  2007    2007   2006    2006                            
          2006 
                    £m    £m      £m             £m£m£m                        
         £m£m£m 
SecurUK and 
Irelandity 
Services 
EuropeContinental 
Europe 
                  593-         -   593.0  539.7  270.5- 
                  0 
NorMiddle East    1,6-     258.6 1,929.9  1,52-        270.5                   
                1,795.6 
and Gulf Statesth 1.3                 .1 
America 
                  1,0-         - 1,043.8  1,04-         13.2                   
                1,063.1 
                  3.8                 .9 
 Latin            177-         -   177.9  125.5       -                        
             125.5 
                  9 
AfricaAmerica and 158-       1.7   159.7  117.7     6.8                        
             124.5 
the Caribbean     0 
 Asia Pacific     183-         -   183.9  152.6       -                        
             152.6 
                  9 
                  268-       3.3   272.2  230.0 
                  9 
Total SecurNew 
Marity Serkets 
                                                6.0                            
         236.0 
     vices        788-       5.0   793.7  625.8    12.8                        
             638.6 
                  7 
                  3,5-     263.6 3,767.4  3,20-        296.5                   
                3,497.3 
                  3.8                 .8 
Cash 
SerEuropevices 
North America     706-      17.2   723.5  628.8    92.6                        
             721.4 
                  3 
                  78.0     -    78.0   85.3       - 
Total Cash SerNew 
Markets 
                                                                               
          85.3 
    vices         202-       4.1   206.4  121.9     4.1                        
             126.0 
                  3 
Total revenue     986-      21.3 1,007.9  836.0    96.7                        
             932.7 
                  6 
                  4,4-     284.9 4,775.3  4,03-        393.2                   
                4,430.0 
                  0.4                 .8 
Revenue by                                    Total                            
       Total 
geographical 
market 
                                               2007                            
          2006 
                                                 £m                            
            £m 
UK and Ireland                                 1,007.5                         
         928.9 
EuropeContinental                              1,645.9                         
       1,588.1 
Europe 
NorMiddle East                                 2,653.4                         
       2,517.0 
and Gulf Statesth 
America 
                                               1,121.8                         
       1,148.4 
Latin America and                               202.5                          
         147.1 
the Car 
 Africa                                         203.3                          
         162.9 
New MarAsia 
Pacific 
                                                257.2                          
         168.1 
                                                337.1                          
         286.5 
Total revenketsue                              1,000.1                         
         764.6 
                                               4,775.3                         
       4,430.0 
Revenue from      TotalInter-         Total   Inter- 
internal and      gross               gross 
external customers 
by business       seg-     segm-      External segm-         segment           
                     External 
segment           ent  nt             nt 
                  reve-     reven-       revenue reve-         revenue         
                       revenue 
                  ue   e              ue 
                  2007  2007    2007   2006    2006                            
          2006 
                    £m    £m      £m     £m      £m                            
            £m 
SecurCash Serity  3,7-      (6.3)3,767.4  3,50- 
Services          3.7                 .1 
Total revenvices 
                                              (3.8)                            
       3,497.3 
    ue            1,0-      (0.6)1,007.9  933.5   (0.8)                        
             932.7 
                  8.5 
                  4,7-      (6.9)4,775.3  4,43-        (4.6)                   
                4,430.0 
                  2.2                 .6 
Inter-segment sales 
are charged at 
prevailing market 
prices. 

62 Notes to the consolidated financial statements (continued)

6 Business and geographical segments (continued)

Segment result

PBITA by business segment                            Contin-        Disconti-  
               Contin-        Disconti- 
                                                     ing     ued              
ing     ued 
                                                     operat-        operatio-  
         Total operat-        operatio-          Total 
                                                     ons     s                
ons     s 
                                                        2007     2007   2007   
  2006     2006   2006 
                                                         £m        £m     £m   
                  £m£m£m 
SecurUK and Irelandity Services 
  EuropeContinental Europe 
                                                        48.4        -   48.4   
  44.1        -   44.1 
                                                        61.5     (4.3)  57.2   
  56.5     (0.8)  55.7 
  North America                                        109.9     (4.3) 105.6   
 100.6     (0.8)  99.8 
    Middle East and Gulf States                         61.5        -   61.5   
  62.7      0.7   63.4 
     Latin                                              14.2        -   14.2   
  10.9        - 
  Afr                   America and the Caribbean                              
                  10.9 
                                                        10.3     (0.5)   9.8   
   6.3      0.2 
     Asia Pica 
                                                                               
                   6.5 
    acif                    acif                        16.0        -   16.0   
  12.5        -   12.5 
  New Marketsic                                         22.9     (1.4)  21.5   
  18.5        -   18.5 
Total Security Services                                 63.4     (1.9)  61.5   
  48.2      0.2   48.4 
                                                       234.8     (6.2) 228.6   
 211.5      0.1  211.6 
Cash SerEuropevices 
 Nor                                                    77.4     (2.2)  75.2   
  67.8 
   New Marth America 
                                                                               
          (14.7)  53.1 
                                                        0.6         -    0.6   
   1.8        -    1.8 
Total Cash Serketsvices                                 29.7     (0.6)  29.1   
  17.4        -   17.4 
THead offotal PBITA before head office costs           107.7     (2.8) 104.9   
  87.0    (14.7)  72.3 
                                                       342.5 
Total PBITice costs 
                                                                 (9.0) 333.5   
 298.5    (14.6) 283.9 
    A                       A                         (30.4)        -   (30.4) 
(24.1)        -  (24.1) 
                                                       312.1     (9.0) 303.1   
 274.4    (14.6) 259.8 
PBITEuropeA by geographical market 
Nor                                                    187.3     (6.5) 180.8   
 168.4    (15.5) 
New Marth America                                                              
                 152.9 
                                                        62.1        -   62.1   
  64.5      0.7   65.2 
Total PBITkAetsbefore head office costs                 93.1     (2.5)  90.6   
  65.6      0.2   65.8 
                                                       342.5     (9.0) 333.5   
 298.5    (14.6) 283.9 
Head offTotal PBITice costsA                          (30.4)        -   (30.4) 
(24.1)        -  (24.1) 
                                                       312.1     (9.0) 303.1   
 274.4    (14.6) 259.8 
Result by business segment                           Contin-        Disconti-  
               Contin-        Disconti- 
                                                     ing     ued              
ing     ued 
                                                     operat-        operatio-  
         Total operat-        operatio-          Total 
                                                     ons     s                
ons     s 
                                                        2007     2007   2007   
  2006     2006   2006 
                                                         £m        £m     £m   
   £m        £m     £m 
TAmorotal PBITA                                        312.1     (9.0) 303.1   
 274.4    (14.6) 259.8 
Total PBITtisation of acquisition-related intangible  (41.6)        -   (41.6) 
(36.0)        -  (36.0) 
assets 
                                                       270.5     (9.0) 261.5   
 238.4    (14.6) 223.8 
SecurCash Serity Services                              215.4     (6.2) 209.2   
 195.4 
Head office costsvices 
                                                                               
            0.1  195.5 
                                                        85.5     (2.8)  82.7   
  67.1    (14.7)  52.4 
Total PBIT                                            (30.4)        -   (30.4) 
(24.1)        -  (24.1) 
                                                       270.5     (9.0) 261.5   
 238.4    (14.6) 223.8 
Continuing PBIT as stated above is equal to PBIT as disclosed in the income
statement. Discontinued PBIT 
as stated above is analysed in note 7. 

63

6 Business and geographical segments (continued)

       The fSegment        assets               and            
liabilitiesollowing information is analysed by business segment and by 
                                                                the
geographical area in which the assets are located: 
Total assets                                                                   
                  2007          2006 
                                                                               
                    £m           £m 
BySecurbusiness segment 
Cash Serity Services                                                           
           2,135.3             1,805.7 
Head off vices                                                                 
               954.8            843.0 
InterTotal segment oper-segment triceading balances                            
               103.5            81.4 
                            ating assets                                       
            (64.1)                (51.8) 
                                                                               
           3,129.5             2,678.3 
By geograUK and Irelandphical segment 
  Continental Europe                                                           
               938.1            869.5 
Europe                                                                         
               923.9            773.6 
Nor                                                                            
           1,862.0             1,643.1 
       Middle East and Gulf Statesth America                                   
               615.5            586.7 
    Latin                                                                      
               102.5            62.5 
   Afr                   America and the Caribbean                             
               104.7            82.4 
New MarAsia P 
   icaacific   icaacific                                                       
               190.3            76.6 
                                                                               
               206.8            178.3 
Head offIntericekets                                                           
               604.3            399.8 
                                                                               
               103.4            81.4 
Total segment oper-segment trading balancesating assets                        
            (55.7)                (32.7) 
Non-operating assets                                                           
           3,129.5             2,678.3 
Total assets                                                                   
               546.3            496.9 
                                                                               
           3,675.8             3,175.2 
Total liabilities                                                              
                  2007          2006 
                                                                               
                    £m           £m 
BySecurbusiness segment 
Cash Serity SerHead offvicesvices                                              
           (719.5)               (602.5) 
                                                                               
           (233.6) 
Inter-segment trice 
                                                                               
                                 (195.1) 
                          ading balances                                       
           (119.2)                (45.4) 
Total segment oper                                                             
                 64.1           51.8 
Non-oper                     ating liabilities                                 
                    (1,008.2)    (791.2) 
Total liabilitiesating liabilities                                             
                    (1,544.6)   (1,412.5) 
                                                                               
                    (2,552.8)   (2,203.7) 
Non-operating assets and liabilities comprise financial assets and liabilities,
taxation assets and liabilities 
and retirement benefit obligations. Included within operfor saleating and
non-operating assets are £123.3m 
(2006:£nil) and £7.6m (2006:£nil) respectively relating to assets classified as
held associated with assets 
classif.Included within operied as held fating and non-operor sale.Disposal
groups are analating liabilities 
are £66.3m (2006:ysed in note 27.£nil) and £12.0m (2006:£nil) respectively
relating to liabilities Other 
information by geographical location 

By business       Impairment                      Impairment 
segment 
                      losses Depreciat-                         losses
Depreciati- 
                             on                              n 
                  recognised        and   Capital recognised         and  
Capital 
                   in income amortisat-           additions  in income
amortisati-            additions 
                             on                              n 
                        2007       2007      2007       2006        2006     
2006 
                          £m         £m        £m         £m          £m       
£m 
SecurCash Serity 
Ser 
Head off vices             -       72.5     201.3        2.5        58.2    
139.7 
vices 
                           -       68.1     192.1          -        67.7 
  Total    ice                                                               
73.9 
                           -        0.6       2.9          -         0.3      
0.6 
                           -      141.2     396.3        2.5       126.2    
214.2 

64 Notes to the consolidated financial statements (continued)

6 Business and geographical segments (continued)

Other information by geographical location (continued)

By geographical segment                                                        
                                                     Capital Capit-           
Capit- 
                                                                               
                                                             l           l 
                                                                               
                                                    additionsaddit-           
addit- 
                                                                               
                                                             ons         ons 
                                                                               
                                                        2007 2006        2006 
                                                                               
                                                          £m £m          £m 
   UK and Ireland                                                              
                                                        83.3 
EuropeContinental Europe 
                                                                               
                                                             46.2        46.2 
                                                                               
                                                       124.7 64.5        64.5 
Nor                                                                            
                                                       208.0 110.7       110.7 
   Middle East and Gulf Statesth America                                       
                                                        13.2 15.2        15.2 
   Latin America and the Car                                                   
                                                        27.4 31.0        31.0 
 Afr                                             ibbean                        
        ibbean                                          13.6 20.3        20.3 
 Asia Picaacif                                                                 
                                                       106.1 17.0        17.0 
New Mark                                     ic                                
                                                        25.1 19.4        19.4 
Head off                                     ets                               
                                                       172.2 87.7        87.7 
Total                  ice                                                     
                                                         2.9 0.6         0.6 
                                                                               
                                                       396.3 214.2       214.2 
OperDiscontin security serations qualifying as discontin 
ued operations      ued operations                 ued operations 
vices businesses   vices businesses in    vices businesses in Franceued in the
cur,which principallrent year pry include Group 4     many,which 
in Franceued in    Franceued in the       Securimarily comprise:G4S Cash
Sericor SAS;and the securvices (France) SAS,ity services 
the cur,which      cur,which              bdisposed of on 2 Julusinesses in
Gery 2007;theprincipally include G4S Sicherheitsdienste 
principallrent     principallrent year pryGmbH and G4S Sicherheitssysteme
GmbH,Berlin.The disposal of the security s France and 
year pry include   include Group 4        Germany is still in progress. 
Group 4            Securimarily 
Securimarily       comprise:G4S Cash 
comprise:G4S Cash  Sericor SAS;and the 
Sericor SAS;and    securvices (France) 
the securvices     SAS,ity services 
(France) SAS,ity   bdisposed of on 2 
services bdisposed Julusinesses in Gery 
of on 2            2007;theprincipally 
Julusinesses in    include G4S 
Gery               Sicherheitsdienste GmbH 
2007;theprincipal-                   and G4S 
y include G4S      Sicherheitssysteme 
Sicherheitsdienste GmbH,Berlin.The 
GmbH and G4S       disposal of the 
Sicherheitssysteme security s France and 
GmbH,Berlin.The    Germany is still in 
disposal of the    progress. 
security s France 
and Germany is 
still in progress. 
                                                                               
                                                      ervicesbusinesses in both 
AdditionallWy,operations qualifying as discontinued in the prior year pr
disposed of on 28 December 2006.ertdienste GmbH,where 
terms were agreed for divestment on 22 December 2006, imarily comprise the
Gerand the bman cash serusiness and assets of Cognisa 
vices business of G4S Geld-undTransportation,Inc, 
The results of the discontinued operations which have been included in the
consolidated income statement are presented below. 2007 
                                                                               
                                                             2006        2006 
                                                                               
                                                          £m £m          £m 
RevExpensesenue                                                                
                                                       284.9 393.2       393.2 
OperNet fating loss before interest and taxation (PBIT) (9.0)                  
                                                      (293.9)(407.-           
(407.- 
                                                                               
                                                             )           ) 
                                                                               
                                                             (14.6)      (14.6) 
AttrTotal operibinance costsutable tax credit/(expense)                        
                                                        (3.3)(3.0)       (3.0) 
ating loss for the          ating loss for the year                            
                                                         0.3 (1.4)       (1.4) 
year 
                                                                               
                                                       (12.0)(19.0)      (19.0) 
ProfAdjustment in respect of disposals in the prit/(loss) on disposal of
discontinued operior yations (note 18)ear 2.9                   9.1 (19.2)     
(19.2) 
                                                                               
                                                             5.2         5.2 
Net loss attributable to discontinued operations                               
                                                           - (33.0)      (33.0) 
The 2007 adjustment in respect of disposals in the prG4S Geld-und Wertdienste
GmbH, and £2.5m relating to the fior year comprinalisation of the disposal of 
Cognisa ises £0.4m relating to the disposal of the GerTransportation,man cash
serInc.vices business of The 2006 adjustment in respect of disposals in the 
pr£2.0m relating to the finalisation of the disposal of Falck Securior year
comprity Nederises £3.2m relating to the fland.inalisation of the disposal of 
Cognisa Security and The effect of discontinued operations on segment results
is disclosed in note 6. 

65

7 Cash floDiscontinws from discontinued operations (continued operations
included in the consolidated 
  cash floued)w statement are as follows: 
                                                                               
         2007       2006 
                                                                               
           £m      £m 
  Net cash floNet cash flows from operws from inating activities Net cash flows
from     12.5    (10.8) 
  financing activitiesvesting activities 
                                                                               
          (1.4)   6.4 
                                                                               
          2.7    (3.7) 
                                                                               
         13.8    (8.1) 
8 The income statement can be analProfit from                                  
        - (PBIT- 
                                                                               
        - ws: 
                                                                               
        - 
                                                                               
        - 
                                                                               
        - 
                                                                               
        - 
                                                                               
        - 
                                                                               
        - 
                                                                               
        - 
                                                                               
        s 
  Continui-                                                                    
                  2007       2006 
  g 
  operatio- 
  s 
                                                                               
           £m      £m 
  RevCost                                                                      
        4,490.4 4,036.8 
  of 
  salesenue 
  Gross                                                                        
        (3,485-       (3,158.0) 
  prof                                                                         
        4) 
  AdministrShare of profation expensesit                                       
        1,005.0  878.8 
  it from                                                                      
        (737.5) (643.2) 
  associat- 
  s 
  PBIT                                                                         
          3.0     2.8 
                                                                               
          270.5  238.4 
  Included within administration expenses is £41.6m (2006: £36.0m) of
amortisation of 
  acquisition-related intangible assets. Revenue and expenses relating to
discontinued 
  operations are disclosed in note 7. 
9 ProfProfit frit from continom operationsuing and discontinued operations has
been 
  arrived at after charging/(crediting): 
                                                                               
         2007       2006 
                                                                               
           £m      £m 
  Cost of 
  salesCost 
  of in 
  Write-down of inventories recognised as an expense                           
         92.4     68.0 
  Reversal of inventorventories previouslies to net realisabywritten dole
valuewn to net        0.5-(0.- 
  realisable value because subsequently sold0.6 Administration expensesAmor
Amortisation of     ) 
  acquisition-related intangibtisation of other intangible assets 
                                                                               
         41.6     36.0 
  Depreciation of property, plant and equipmentle assets                       
          8.5     7.4 
  Impairment of property, plant and equipment and intangib Profit on disposal
of         91.1     82.8 
  property, 
           le assets other than                le assets other than
acquisition-related     -     2.5 
           acquisition-related 
  Impairme-         plant and equipment and intangible assets other than
acquisition-related les  (14.4)  (1.6) 
  t of 
  trade 
  receivab 
  Litigati-                                                                    
                   5.4     4.6 
  n 
  settleme- 
  ts 
  Research                                                                     
          0.7     0.1 
  and dev 
  Operating lease rentals paelopment expenditureyab                            
          2.1     1.4 
  OperCost of equity-settled trating sub-lease rentals receivableansactionsle  
         96.7     85.0 
                                                                               
          (3.0)  (1.9) 
  Gov                                                                          
          4.1     5.0 
  Net feroreign trnment granslation adjustmentsants received as a contribution
towards    (2.2)  (2.3) 
  wage costs (0.2) 
                                                                               
                  1.0 

66 Notes to the consolidated financial                                         
              (continued) 
   statements 
   10Auditors' remuneration 
     Fees payable to the company's auditor 
     for the audit of the company's annual 
     report and accounts Fees paThe audit 
     of the companyable to the company's 
     subsidiary's auditor and its 
     associates for other services: Other 
     services pursuant to legislationies 
     pursuant to legislation 
     Taxation ser 
     Corporate finance servicesvices 
     Fees payable to other auditors for 
     the audit of the company's 
     subsidiaries pursuant to legislation 
     The Corcompromised through the 
     proporate Governance Statement on 
     pages 34 to 36 outlines the 
     companvision by the company's auditor 
     of other services.y's established 
     policy for ensuring that audit 
     independence is not 

11 The aStaff costs and emploverage monthly number of employeesyees,in
continuing and discontinued 
operations,including executive directors was: 
                                                                     2007   
2006 
                                                                   Number 
Number 
   BySecurbusiness segment 
  Cash Serity Servicesvices                                       466,035
403,079 
Not allocated,Total average nincluding shared                      41,255 
36,866 
administrumber of employeesation and head office 
190 
                                                                             
183 
                                                                  507,480
440,128 
   By geograEuropephical segment 
             North Amer                                           115,951
114,216 
                New Mar ica                                        53,414 
51,919 
Not allocated,ketsincluding shared administrumber                 337,925
273,810 
of employeesation and head off Total average n 
                                    ice                               190    
183 
                                                                  507,480
440,128 
Their aggregate remuneration, in continuing and 
discontinued operations, comprised: 
                                                                     2007   
2006 
                                                                       £m     
£m 
WSocial securages and salarity                                    2,772.2
2,654.3 
costsies 
                Employ                                              410.2  
387.8 
  Total staff costsee benefits                                       75.3   
66.2 
                                                                  3,257.7
3,108.3 
InfDirectorormation on directors'Remuneration Repors'remunertonation,pages 37
to 44.share 
options,long-term incentive plans,and pension contributions and entitlements is
set out in the 

67

12 Finance income 
                                                                        2007   
   2006 
                                                                          £m   
     £m 
  Interest income on cash,Other interest incomecash equivalents and     12.4   
    9.9 
  investments Expected return on defined retirement benef 
                                                                         2.7   
    2.4 
  Gain arising from change in fair value of derivativit scheme assetse  77.3   
   67.2 
  financial instr Loss ar 
                                       uments hedging loan notes        14.3   
      - 
  Total finance incomeising from fair value adjustment to the hedged      
(14.1)     - 
  loan note items 92.6 
                                                                               
   79.5 
13Finance costs 
                                                                        2007   
   2006 
                                                                          £m   
     £m 
  Interest on bank oInterest on loan notesverdrafts and loans Interest  53.0   
   49.6 
  on ob 
                                                                        13.5   
      - 
  Other interest charligations under fTgesinance leases                  3.3   
    2.4 
                                                                         4.2   
    0.2 
  Finance costs on defotal group borrowing costsined retirement benef   74.0   
   52.2 
  Total finance costs 
                                              it obligations            72.3   
   66.2 
                                                                           
146.3  118.4 
  equity durIncluded within interest on bank oing the year.verdrafts and loans
is a credit 
  of £2.1m (2006:£2.5m) relating to cash flowhedges that were transferred from 

14 Taxation

                                Continui-          Discontinu-                 
    Continu-         Discontinu- 
                                g         d                     ng       d 
                                operatio-           operations     Total
operati-          operations Total 
                                s                               ns 
                                    2007        2007  2007        2006         
2006 2006 
                                      £m     £m         £m          £m         
  £m   £m 
CurUK corrent taxation 
   Ov     poration tax               2.6   - 
Adjustments in respect of 
prerseas tax 
                                                       2.6        10.1         
   - 10.1 
                      -              64.5        (0.3) 64.2        49.7        
  1.4 51.1 
                      - 
                      r 
                      - 
                      - 
                      - 
                      r 
UK corOv 
Total curerseas tax 
          poration tax s: 
                                    (7.1)  -              (7.1)    0.7         
   -  0.7 
          rent taxation                                        -- -(3.5)       
   - (3.5) 
          expense/(credit) 
                                    60.0        (0.3) 59.7        57.0         
 1.4 58.4 
DefCurerrent yred taxation (see 
note 36) 
Adjustments in respect of           (7.4)  -              (7.4)      -      -- 
prearTior years 
                                     3.6   -           3.6        (0.4)        
   - (0.4) 
Total defotal income tax expense/(credit)  -              (3.8)   (0.4)        
   - (0.4) 
ferred taxation creditor the year(3.8) 
56.2 
                                                (0.3) 55.9        56.6         
 1.4 58.0 
UK coryear includes a £1.7m credit resulting from the defporation tax is
calculated at 30.0% 
(2006:30.0%) of the estimated assessable profits for the period.The total
income tax expense 
for the 28.0%. Taxation for other jurisdictions is calculated at the corerred
tax moporvation 
tax rement arising from the reduction in the UK corates prevailing in the
relevant 
jurisdictions.poration tax rate from 30.0% to 

68 Notes to the consolidated financial statements     (cont-                
(continued) 
                                                      nued) 
   14                                          (continge for the yued)ear can
be 
                                               reconciled to the profit per the 
                                               income statement as follows: 
   PrContinofit/(loss) befuing operore taxation 
   DiscontinTotal profued operationsit before 
   taxationations 
   TExpenses that are not deductibax at UK 
   corporation tax rate of 30.0% (2006:30.0%) T 
               le in determining taxable profit 
   Diffax losses not recognised in the curerent 
   tax rates of subsidiarrent year Adjustments 
   for previous yearies operating in non-UK 
   jurisdictions 
     Total income tax charge 
     Effective tax rate                                25.8%                 
25.8% 
   In addition to the income tax expense charged to the income statement, a tax 
   charge of £14.0m (2006: £1.4m) has been recognised in equity. 
   15 Dividends 
                                               per    per                   
per 
                                               shareP-       share-            
          share- 
                                               nce    KK                     KK 
   Amounts rFinal dividend fecognised as distributions to equity holders of the 
   paror the year ended 31 December 2005ent in the year Interim dividend for
the 
   six months ended 30 June 2006 
                                               2.241.-       0.2435            
    0.2435 
                                               9 
   Final dividend for the year ended 31         2.52  0.1863                
0.1863 
   December 2006 Interim dividend for the six 
   months ended 30 June 2007 
                                                2.11  0.276-                   
   0.276- 
                                                      0.2319                
0.2319 
   Proposed final dividend for the year ended   2.85p 0.2786                
0.2786 
   31 December 2007 

to shareholderThe proposed fs who are on the register on 2 Mainal dividend is   
subject to approval by 2008.yshareholderThe exchange rs at the ate used to      
trAnnual Generanslate it into Danish kroner is that at 10 March 2008.al         
Meeting.If so approved,it will be paid on 6 June 2008                           

16 Earnings/(loss) per share attributable to equity shareholders                
of the parent 2007                                                              
                                                                            2006
                                                                      £m      £m
  From continuing and discontinued operations                                   
   EarningsProf                                                                 
Eff it fProfect of dilutivor the year attrit for the               147.2    96.5
purepotential ordinaributable to equity holderposes of diluted                  
earyshares (net of tax) s of the parent nings per share                         
                                                                     0.2     0.3
                                                                   147.4    96.8
   Number of sharW                                                              
  Effeighted average n                                                          
          es (m)umber of ordinary shares                                        
Wect of dilutiveighted average ne potential ordinarumber of                     
ordinary shares 1,275.2                                                         
                                                                         1,268.3
y shares for the purposes of diluted earnings/(loss) per share       1.5     5.4
1,276.7                                                                         
                                                                         1,273.7
Earnings per sharBasicefrom continuing and discontinued                         
operations (pence) Diluted                                                      
                                                                   11.5p    7.6p
                                                                   11.5p    7.6p

69

16 Earnings/(loss) per share attributable to equity shareholders of the parent
(continued) 2007 
                                                                               
                                2006 
                                                                               
                     £m           £m 
   From continuing operations 
 EarningsProf 
Adjustment to exclude loss fit for the year attributable to equity holders of
the parent Profit   147.2         96.5 
from contin 
or the year from discontinued       or the year from discontinued operations
(net of tax) (note       -         33.0 
operations (net of tax) (note 7)    7) Effect of dilutive potential ordinaruing
operations 
Effect of dilutive potential 
ordinaruing operations 
                                                                               
                 1 47.2        129.5 
Profit from continuing operations fy shares (net of tax) or the purpose of
diluted earnings per    0 .2          0.3 
share 147.4 
                                                                               
                               129.8 
   EBasicarnings per share from continuing operations (pence) 
  Diluted                                                                      
                  11.5p        10.2p 
                                                                               
                  11.5p        10.2p 
   From discontinued operations 
   Loss per sharBasice from discontinued operations (pence) 
  Diluted                                                                      
                      -      (2.6)p 
                                                                               
                      -      (2.6)p 
   From adjusted earnings 
 EarningsProf 
Adjustment to exclude net retirement benefit from continuing operations
Adjustment to exclude     147.2        129.5 
amorAdjusted profit for the year attrtisation of acquisition-related intangibit
finance income 
(net of tax)ibutable to equity holders of the parentle assets (net of
tax)(3.6)25.2(0.7)26.7 
                                                                               
                  170.3        154.0 
WAdjusted eareighted avernings per share (pence)age number of ordinary shares
(m) 13.4p                                                               1,275.2
  1,268.3 
                                                                               
                               12.1p 
In the opinion of the directorassessment of operational perfsorthe
earmancenings per share f,the analysis of trends oigure 
of most use to shareholderver time,the comparison of diffs is that which is
adjusted.erent businesses and the projection 
of future earThis figure better allows thenings. The denominators used in all
earnings/(loss) per share calculations are 
those disclosed in respect of continuing and discontinued operations. 

17 Acquisitions

The group underCurrent year acquisitionsinclude the purchase of controlling
interests 
in:took a number of acquisitions in the year,none of which were individually 
material.Principal acquisitions in subsidiary undertakings management business
in Saudi 
Arabia; and in RIG - PR Ltd,Fidelity Cash Management Sera specialist police
recrvices (Pty) 
Ltd,uitment agency in the United Kingdom.in South Africa; al Majal Service
Master LLC, a 
facilitiesincreased its interests in Israel and Mozambique,and recognised put
options that 
increased the group's interest in the Baltic states.In addition,A summarthe
group the 
provisional fair value of net assets acquired by geographical location is
presented below: 
                                                                             y
of 

                                   Europe AmerN-       MarNewk 
                                          ricath 
                                                           T otal 
                                       £m   £m     £mets 
                                                           gr oup 
                                                            £m 
ProAcquisition of minorvisional       7.8  0.3     9.4     17.5 
fair value of net assets acquired 
of subsidiaryundertakings Total 
pro 
              ity interests          19.2  0.3     1.4    20.9Goodwillvisional
fair value of net 
                                                          assets
acquired27.092.50.61.610.838.4 
Total purchase consideration        119.5  2.2   95.985.1 179.2217.6 

70 Notes to the consolidated financial statements (continued)

17 Acquisitions (continued)

The fCurrolloent   ywing tabear acquisiti-           (continle sets out the
book values of the 
                                ns         identifued)of all acquisitions made
in the 
                                           year:iable assets and liabilities
acquired and 
                                           their provisional fair value to the
group in 
                                           respect 
                                           Book    Fair
value£m£adjustmentsmFair value 
                                           value 
                                                          £m 
Acquisition-related intangibOther                -  34.1  34.1 
intangible assets 
Proper le assets                                1.0(0.7) 0.3Inventorty,plant
and 
                                                         equipment24.5(1.9)22.6 
Trade and other receivabiesles              50.24.0(0.4) 3.6Deferred tax
assets(3.6)46.6 
Cash and cash equivalents                   11.60.1    - 0.1Trade and other 
                                                         payables(46.7)-11.6 
Current tax liabilities                            (2.4)
(49.1)Pro(1.6)(1.1)(2.7) 
Borvisionsrowings                          (22.9)(-        (3.1)-(10.8)Deferred
tax liabilities-(22.9) 
                                           .7) 
Minority interests                           (10.7)(9.7) (9.7)Net assets
acquired of 
                                                         subsidiary
under4.5(6.2) 
Acquisition of minor             takings        1.8 15.7 17.5Goodwillity
interests17.83.120.9 
Total purchase consideration                             179.2217.6 
SatisfCashied by: 
Transaction costs                                        147.7Contingent
consider 
 otal purchase consideration 
                                                          3.9 
T            ation     ation                              66.0217.6 

intangibAdjustments made to identifle assets amounting to £34.1m attriable
assets and 
liabilities on acquisition are to reflect their fair valueibutabl.These include
the 
recognition of customer-relatedminority interests.The fair values of net assets
acquired 
are proe to the acquisition of subsidiary undertakings and £3.1m attributable
to the 
acquisition of estimates may be adjusted to reflect an 
            visional and represent estimates following a preliminary valuation
exercise. 
            Thesethe comparativeto the 2008 consolidated fy devinancial 
            statements.elopment in the issues to which they relate.Final fair
value 
            adjustments will,if required,be reflected in 

The goodwill arand develop the bising on acquisitions can be
ascrusiness.Neither of these meet the 
cribed to the existence of a skilled,iteria for recognition as intangibactive
workforce and the 
opportunities to obtain new contracts acquisition includes £47.5m arising on
the acquisition of 
minority interests. 
                                                     le assets separable from
goodwill. Goodwill 
                                                     arising on From the date
of acquisition,the part 
                                                     year they were under the
group'in aggregate,s othe 
                                                     acquired bwnership.If all
acquisitions had 
                                                     occurusinesses contributed
£171.2m to revred on 1 
                                                     Januarenues,y 2007,£10.0m
to PBITgroup revenA and 
                                                     £(0.3)m to profue would
hait for £4,572.2m, PBITA 
                                                     would have been £321.0m
and profit for the year 
                                                     would have been £162.4m. 
                                                      ve been 
Prior yThe group underear acquisitions 
included the purchase of controlling interests in the Chilean compantook a
number of acquisitions in 
2006,none of which wy,Serere individuallvicios Generales,y
materLimitada,ial.Principal acquisitions in 
subsidiara manned security services proy undertakingsal Majal Security
Services,asecurity servider,and 
in Arab Emirates. 
                                                    vices and cash services
business in Saudi Arabia. 
                                                    In addition, the group
increased its interests in 
                                                    United 

71

17 Acquisitions (continued)

At 31 December 2006,Prior year acquisitions (continmade during 2006 has since   
been fthe fair value adjustments made against net assets acquired               
wued)inalised.The net assets acquired and goodwill arising in respect of all    
acquisitions made in the yere provisional.The initial accounting in respect of  
acquisitionsear are as follows:                                                 

                                           Book value        Fair
value£m£adjustmentsmFair value 
                                                                  £m 
Acquisition-related 
intangibProper 
Def  ty,plant and      le assets other          7.0-  17.6(0.5)                
            17.6 
     equipment and     than 
     intangib le assetsacquisition-related 
                                                                 6.5 
CurerCurrent assetsred                        22.00.2   (2.1)-   0.219.9 
tax assets 
Non-current                                   (10.6)    (4.7)   (15.3)Minority
interestsrent 
liabilities                                                    
liabilities(6.6)(6.4)(13.0) 
Net assets acquired of                         (1.8)     0.6   
(1.2)Acquisition of 
subsidiary                                                     
minorundertakings10.24.514.7 
Good-      ity interests                               6.4    4.6    11.0Total
purchase 
ill                                                            
consideration72.7 
                                                                               
            98.4 
Satis- 
Cashi- 
d by: 
Tr                                                              96.0Contingent
consideransaction 
                                                                costs 
otal purchase 
consideration 
                                                                 0.7 
T         ation                                                  1.798.4 

Included within current assets acquired is £3.5m of cash and cash 
equivalents. intangibAdjustments made to identifiable assets and 
liabilities on acquisition are to reflect their fair value.These include 
the recognition of customer-relatedminority interests.le assets amounting 
to £17.6m attributable to the acquisition of subsidiary undertakings and 
£4.6m attributable to the acquisition of an equivalent increase in the 
reporOn completion of the fair value exted value of goodwill.ercise durThe 
comparing 2007,ative balance sheet at 31 December adjustments made to the 
provisional calculation amounted to £4.7m,2006 has been restated 
accordingly. with The goodwill arand devising on acquisitions can be 
ascribed to the existence of a skilled,active workforce and the 
opportunities to obtain new contracts acquisition includes £10.1m arelop 
the business.Neither of these meet the crising on the acquisition of 
minoriteria for recognition as intangibity interests.le assets separable 
from goodwill.Goodwill arising on In the yyear they wear of 
acquisition,ere under the group'in aggregates owner,the acquired bship.If 
all acquisitions had occurusinesses contributed £57.1m to revred on 1 
January 2006,enues,group rev£7.8m to PBITenue wA and £1.8m to profould 
have been £4,092.2m,it for the part would have been £279.5m and profit for 
the year would have been £110.0m. 
                                                                          
PBITA 
PAost balance sheet acquisitions 
were individuallnumber of acquisitions wymaterial.In aggregateere effected
after the balance 
sheet date,the acquisitions,primarily within Europe,but before the f,North
inancial statements 
wAmerica and ere authorised for issue, none of which£66m.In addition,there was
a cash outflow 
of £41m in respect of contingent consideration accrued at 31 December
2007.Africa,were 
satisfied by total consideration of 

It is considered imprpreliminaryassessment of the fair value of assets and
liabilities 
acquired is in progress.actical to disclose anyfurther information in relation
to 
acquisitions effected after the balance sheet date because the Acquisition of
the Global 
Solutions grIn December 2007,the group announced the acquisition of the entire
share 
capital of De Facto 1119 Limited,oup (GSL) total consideration of £355m payable
in cash on 
completion. GSL is an international leader in the provision of supporthe
holding compant 
services for goy of GSL,vernments,for acompanies and pub following the receipt
of such 
approlic authorities.The acquisition is subject to approval in 2008.val from
the European 
Commission.The acquisition is expected to complete OffIn March 2008,er for
ArmorGr is a 
leading provider of defthe group announced that it was making a recommended
cash off oup 
International plc 
ensive, protective er for the shares of ArmorGroup International plc.
ArmorGroupsecurity 
security services  agencies operating in hazardous
environments.vernments,multinational 
to national go     corporations and international peace and 

72            Notes to the consolidated financial statements           
(continue- 
                                                                        ) 
   18                  On 2 JulDisposal                      of     a 
subsidiary 
                                                                       2007,the 
                                                                       group 
                                                                       disposed
of 
                                                                       G4S Cash 
                                                                      
Seryvices 
                                                                       (France) 
                                                                       SAS. 
     In 2006,on 22 December 2006,the group disposed of the Gerand the business
and 
     assets of Cognisa man cash services business of G4S Geld-und
Transportation, 
     Inc, disposed of on 28 December 2006.Wertdienste GmbH,where terms were
agreed 
     for divestment The net assets of operations disposed of were as follows:
2007 
     GoodwillProper 
     CurLiabilitiesrent assetsty,plant and equipment and intangible 
     assets other than acquisition-related Net assets of operations 
     disposed 
     Financial liabilities arProfising on disposal 
     Total considerit/(loss) on disposalation 
     SatisfCashied by: 
     amounts wIn the current yere fulleary pro,£12.4m was paid relating to the 
     disposal of the Gervided for within the loss on disposal recognised in 
     2006.man cash services business G4S Geld-und Wertdienste GmbH. These In
the 
     prior year,a further £3.2m was received relating to the finalisation of 
     proceeds from the sale of Cognisa Security in 2005. The impact of the 
     disposals,prior year is disclosed in note 7.combined with other operations 
     qualifying as discontinued,on the group's results and cash flows in the 
     current and 

19 Intangible assets

2007         Goodwill    Acquisition-related          Other         Total 
                         intangible assets            intangible 
                                                      assets 
                                  Customer          Deve- 
                                                    opme- 
                                                    t 
                        Trademarks relatedTechnology exp-    Software 
                                                     ndi- 
                                                     ure 
                  £m         £m         £m    £m       £m  £m          £m 
CostAt 
Acquisition  1,218.0       16.4      274.8   10.9     4.8 47.1   
1,572.0Additionsusiness- 
of                                                               
s179.2--37.2-0.20.1216.7 
b1January2007 
Disposals          -         --        --      -      2.3 15.1    17.4Disposal
of 
                                                                 
businesses-----(0.1)-(0- 
                                                                  3)(0.4) 
Reclassified  (85.1)       (0.7)         -     -     (0.-     (1.3)  
(1.3)Translation 
as held for                                          )           
adjustments46.00.55.9(0- 
sale                                                             
2)0.1(3.2)(89.3) 
At 31        1,358.1       16.2      317.9   10.7     7.0 60.53.0 1,770.455.3 
December 2007 
Amortisation 
and 
accumulated 
Atimpairment                       (68.4)    (5.2)   (0.-     (29.4)  (153.6) 
lossesAmor1Jantisation charuary                      ) 
2007ge(42.4)-(3.3)(7.9) 
Disposals          -          -    (36.2)-   (2.1)-  (0.-     (7.8)  
(50.1)Disposal of 
                                                     )           
businesses----0.1-0.20.3 
Reclassified    27.8           0.4       -     -      0.2 1.02.6 
1.0Translation 
as held for                                                      
adjustments(11.1)(0.2)(- 
sale                                                             
.1)0.1(0.1)(2.0)31.0 
At 31         (25.7)      (11.0)   (106.7)   (7.2)   (0.-     (35.4) 
(186.8)(15.4) 
December 2007                                        ) 
CarAt1rying  1,175.6           8.5   206.4    5.7     4.5 17.7    1,418.4 
amountJanuary 
2007 
At 31        1,332.4        5.2      211.2    3.5     6.2 25.1    1,583.6 
December 2007 

73

19 Intangible assets (continued)

2006      Good-            Acquisition-related          Other intangible   
Total 
          ill         intangible assets            assets 
                              Customer            Developme- 
                                                  t 
                  Trademarks   related  Technology expendit-         Software 
                                                   re 
           £m           £m          £m      £m          £m    £m        £m 
CostAt 
Acquisiti-          1,229.072.7 16.9-   259.722.2    12.3-      2.8    47.2    
1,567.9Additions 
n of 
b1January 
2006usine- 
ses 
Disposals   -            -           -       -        2.2 -  4.90.1    95.07.1 
Disposal     (7.7)-      -           -       -           -   (0.7)   
(0.7)Translation 
of                                                                   
adjustments(76.0)(0.5- 
businesses                                                           
----(2.3)(10.0) 
At 31     1,21-            16.4    274.8(7.1) 10.9(1.4)  (0.2)4.847.1(2.1)
1,572.0(87.3) 
December  .0 
2006 
Amortisat- 
on and 
accumulat- 
d 
Atimpairment                    (39.3)     (3.5)      (0.1)  (22.6)   (122.9) 
lossesAmor1Jantisation 
charuary 2006ge(52.7)- (4.7) 
Impairment  -         (3.3)     (30.5)     (2.2)      (0.3)  (7.1)   
(43.4)Disposals------- 
losses for                                                           
-(2.5)(2.5) 
the year 
Disposal    -             -          -       -           --  0.21.8  
0.2Translation 
of                                                                   
adjustments10.30.11.4- 
businesses                                                           
.50.10.813.21.8 
At 31       (42.4)     (7.9)    (68.4)     (5.2)      (0.3)  (29.4)   (153.6) 
December 
2006 
CarAtrying 
amount 
At 31     1,176.31,17-            12.28.5 220.4206.4   8.85.7     2.74.5
24.617.7 1,445.01,418.4 
December  .6 
20061Janu- 
ry 2006 

Included within software is inter£2.2m (2006:£1.4m),nallygeneratedsoftware with 
a gross carrying value of £4.7m (2006:£3.5m),and accumulated amortisation of    
amortisation charge associated to these assets was £0.8m (2006:giving a net book
value of £2.5m (2006:£2.1m).£1.3m).During the year,additions amounted to £1.2m  
(2006:£2.4m) and the Customeridentification as intangib-related intangible      
assets in accordance with IFRS.les comprise the contractual relationship with   
customers and the customer relationships which meet the criteria for            
Customer contrcarracts and relationships recognised upon the acquisition of     
Securicor plc on 19 July 2004 are considered significant to the group.The a half
yying amount at 31 December 2007 was £152.3m (2006:ears.£172.6m),and the        
amortisation period remaining in respect of these assets is six and Goodwill    
acquired in a bcombination.The following CGUs hausiness combination is allocated
to the cash generve significant carrying amounts of goodwill:ating units (CGUs) 
which are expected to benefit from that business                                

                                                                        2007   
2006 
                                                                          £m   
  £m 
US securUK cash serity services                                        246.6  
250.4 
(manned security) 
UK                              vices                                  226.1  
226.1 
secur 
Nether ity services (justice ser                                       105.8   
94.0 
       vices) 
UKOther (all allocated)securlands                                      103.8   
95.4 
security services (manned security 
services ity) 65.7 
                                                                               
63.4 
Total goodwill                                                         584.4  
446.3 
                                                                     1,332.4
1,175.6 
The group tests tangibamounts may be impaired.le and intangibThe annual
impairle assets,ment test is perfincluding 
goodwill,for impairment on an annual basis or more frequently if there are
indications that impairment test compares the 
carr 
                                      ormed just prior to the year end when the
budgeting process is finalised. The 
                                      group'sto have occurred where the
recoverying value of each CGU to its recoable 
                                      amount of a CGU is less than its
carverable amount.rying valueUnder IAS 36 . 
                                           Impairment of Assets, an impairment
is deemed 

74 Notes to the  (continued) 
   consolidated 
   financial 
   statements 
   19The 
     recoIntang- 
     b include 
     forecast 
     cash flover 
                 , all of whichat the lower of the planned growth rive year
forecast 
                 period are projected into perpetuity operin the projections
fates.Where 
                 the planned groor years four and fwth rate in yivate in year
three and 
                 the feear three exceeds the forecast underorecast underlying
economic 
                 grolying economic growth rate fwth ror the economies in which
the 
                 CGUate,the excess is progressively reduced pre-tax, w 
                . Growth rates across the group's CGUs range from 0% to 18%.
Future cash 
                flows are discounted at a financial risks in each countreighted
average 
                cost of capital which fy in which the CGUs operor the group is
11.3% 
                (2006:ate.10.8%).This rate is adjusted where appropriate to
reflect the 
                different In appl2007 or fying the group'or the year ended 31
December 
                2006.s model,no impairment has been identified and recognised
in any of 
                the group's CGUs for the year ended 31 December 
     The kvariabey assumptions used in the discounted cash flow calculations
relate to 
     the discount rate and underlying economic growth rate.With all other with
an 
     equivalent increase in the discount rles being equal,an impairment of
approate 
     fximatelor all country £5m wies,ould aror the underise if either the group
discount 
     rlying growth rate in all countrate were to be increased by 1.5% to
12.8%,appro 
     iations in the assumptions wximations indicate the sensitivity of the
impairould 
     impact on all CGUs at the same timement test to changes in the under.lying 
     assumptions.Ho ies were to be reduced by 1.6%. These 
     var          wever,it is highly unlikely that any 

20 Property,plant and equipment

                                 Land and Equipment 
                                 buildin-         and         Total 
                                 s        vehicles 
2007                                   £m     £m        £m 
CostAt 
Acquisition of b1January 2007       137.8  540.4    
678.2Additionsusinesses3.119.522.6 
Disposals                            34.5  105.1     139.6Disposal of 
                                                    
businesses(12.4)(35.9)(48.3) 
Reclassified as held f            (12.4)    (11.9)    (24.3)T 
At 31 December 2007ranslation 
adjustments 
          or sale                (0.6) 
                                 157.67.6 
                                            (21.6) 
                                           629.133.5 
                                                      (22.2) 
                                                      786.741.1 
DeprAt1Janeciation and 
accumulated impairment losses 
Depreciation charuary            (30.5)(1-          (292.8)(7-         
(323.3)(91.1) 
2007Disposalsge                  .1)       .0) 
Disposal of b                         6.9   19.1     
26.0Reclassifusinesses3.58.211.7 
Translation adjustmentsied as    (3.7)0.3  (22.5)16-          17.1At 31
December 
held for sale                              8        
2007(35.6)(350.2)(385.8)(26.2) 
CarAt1rying amountJanuary 2007      107.3  247.6     354.9 
At 31 December 2007                 122.0  278.9     400.9 

75

20 Property,plant and equipment (continued)

                                       Land and            Equip- 
                                                           ent 
                                       buildings    and vehicles   Total 
2006                                         £m              £m     £m 
CostAt 
Acquisition of b1January 2006             142.4            489.9 
632.3Additionsusinesses12.30.75.76.4 
Disposals                                (8.2)             (12.4-      
105.7(20.6) 
                                                           93.4 
TDisposal of brusinesses                 (4.9)             (12.8) (17.7)At 31
December 2006anslation 
                                                                 
adjustments137.8(4.5)540.4(23.4)678.2(27.9) 
DeprAt1eciation and accumulated 
impairment losses 
Depreciation charJanuary 2006           (28.2)             (249.-      
(277.7)Disposalsge(8.5)3.6(74.3)(82.8) 
                                                           ) 
Disposal of businesses                      1.4            8.49.9  12.0T 
At 31 December 2006ranslation                 (30.5)1.2    (292.- 
adjustments                                                )12.7 
                                                                   11.3 
                                                                   (323.3)13.9 
CarAt 
At 31 December 20061 
 rying amountJanuary 2006 
                                                 107.3114.2247.62-      
354.9354.6 
                                                           0.4 
The carrying amount of equipment and vehicles 
includes the following in respect of assets held 
under finance leases: 
                                                            2007   2006 
                                                             £m     £m 
Net book valueAccum                                        50.8    52.3 
Depreciation charulated depreciationge                     47.9    34.2 
for the year 
                                                           14.0    11.2 
The rights over leased assets are effectively security for lease 
liabilities. These rights revert to the lessor in the event of 
default. The carleases:rying amount of equipment and vehicles 
includes the following in respect of assets leased by the group 
to third parties under operating 
                                                            2007   2006 
                                                             £m     £m 
Net book valueAccum 
Depreciation charulated depreciation 
                                                           32.5    29.3 
     ge for the year                                       49.0    40.2 
                                                            7.5     5.6 
The net book value of land and 
buildings comprises: 
                                                            2007   2006 
                                                             £m     £m 
FreeholdsLong leaseholds (50 year                          51.3    42.9 
Short leaseholds (under 50 ys and                          17.0    14.1 
oears)ver) 
                                                           53.7    50.3 
Atto £2.1m (2006:31 December 2007 the group had entered into contr£4.3m).actual
commitments for the 
acquisition of property,plant and equipment amounting 

76 Notes to the consolidated financial statements                   (continued) 
   21T-   in   joint   vollowing signifenturicant interests in joint
vesentures: 
     e 
     g- 
     o- 
     p 
     h- 
     s 
     t- 
     e 
     f- 
     n- 
     e- 
     t- 
     e- 
     t 
     (-  goThe group owns 100% of the equity of Wackenhut Services, Inc.
(“WSI”) under US Foreign Ownership Controlling 
     ) Interest provisions, 
       to be strverned through a proategically sensitivxy agreement.WSI
provides security services to US Government 
       agencies including security services on sites deemedrepresented by
directors on the e. In accordance with the proWSI 
       board who are independent of the group bxy agreement the group is
excluded from access to operut under fiduciary and 
       contractual obational infligation to act in the ormation and is best
interest of the shareholderdecisions.As da.The 
       group,through the proxy agreement,retains the power to veto certain
material operational and strategic that the 
       group propory to day management of the business remains with an
independent board,WSI is accounted for as a joint 
       venture.This meanscase if WSI were accounted ftionatelor as a subsidiary
consolidates the results of y. 
                     WSI at 100%, giving rise to an accounting result identical
to that which would be the (b) 
       both cases,At the year end the group othe group jointly shares operwned
59% of the equity of Brational and fidgend 
       Custodial Services Ltd and 50% of the equity in STC (Milton Keynes)
Ltd.In the results of each, which are 
       consolidated on the basis of the equity shares held.inancial control
over the operations and is therefore entitled 
       to a proportionate share ofshareholding in Safeguards Securicor Sdn
Bhd,in MalaIn addition,at 31 December 2006,the 
       group's 49% equity operation which is now accounted for as a
subsidiary.ysia, was accounted for as a joint venture. 
       During 2007, the group obtained control of this The results of each of
the jointlconsolidated into the group's 
       financial statements are as fy controlled operations are prepared in
accordance with group accounting 
       policies.ollows:Amounts proportionately 

Resu-                          2007                                            
                          2007  2006 
ts 
                            £m                                                 
                       £m   £m 
Inco-                         320.6                                            
                         320.6  344.4 
eExp- 
nses 
Prof-                       (307.1)                                            
                        (307.1) (326- 
t                                                                              
                           4) 
after 
tax 
                          13.5                                                 
                     13.5  18.0 
Bala-                          2007                                            
                          2007  2006 
ce 
sheet 
                            £m                                                 
                       £m   £m 
Asse- 
sNon- 
cur 
Curr-                          54.5                                            
                          54.5  49.7 
nt 
asse- 
srent 
asse- 
s 
                          92.6                                                 
                     92.6  75.8 
                         147.1                                                 
                    147.1 
Non-current liabilitiesrent liabilities                                        
                           (41.- 
                                                                               
                           ) 
                        (52.5)                                                 
                    (52.5) (43.- 
                                                                               
                           ) 
Net                    (108.8)                                                 
                   (108.8) (84.- 
asse-                                                                          
                                ) 
s 
                          38.3                                                 
                     38.3  40.7 
The  inassociatess share of associates'profit and net assets and the
reconciliation to the net investment 
grou-       are as follows: 
'Inv- 
stme- 
t 
                          2007                                                 
                     2007  2006 
                            £m                                                 
                       £m   £m 
TTot- 
l 
asse- 
s 
Net 
inot- 
l 
liab- 
liti- 
s 
                          14.2                                                 
                     14.2  13.1 
vestme-                         (4.0)                                          
                            (4.0) (5.8) 
t in 
associ- 
tes 
                          10.2                                                 
                     10.2  7.3 
Reve-                          75.8                                            
                          75.8  83.6 
ue 
Prof-                           3.0                                            
                           3.0  2.8 
t for 
the 
year 
The net inof 46%.vestment and results presented above largely relate to Space
Gateway Support LLC,in the USA,in 
which the group holds an investment 

77

23 
Inventories 
                         2007                   2006                           
2006 
                           £m                     £m                           
  £m 
  RaWorw materials       12.5                    9.0                           
 9.0 
  Finished goods          7.4                    9.5                           
 9.5 
  including consumabk 
  in progressles 
  Total                  37.2                   31.0                           
31.0 
  inventories 
                         57.1                   49.5                           
49.5 
24InIn at their fair 
  values based on 
  quoted marv 
  vestments 
  comprestmentsise 
  primarily listed secur 
                         estments is restricted to the settlement of claims
against the group's captive 
25Trade and other 
  receivables 
                         2007                   2006                           
2006 
                           £m                     £m                           
  £m 
  Within 
  curT 
  Allorade 
  debtor 
      rent assets 
  wance for doubtful   - 788.5                  709.7 
  debtss               - 
                       - 
                       - 
                       5 
  Amounts owed b       -                  (36.4)(25.7) 
                       - 
                       - 
                       - 
                       - 
                       ) 
  Other      y            3.3                    1.2                           
 1.2 
  debtor     associated 
             undertaki- 
             gs 
  Prepa   s              64.4                   58.2                           
58.2 
  Amounts due from 
  constryments and 
  accrued incomeDer 
  Total trivativade and 
  other 
  receivabefinancial 
  instruments at fair 
  value (see note 32) 
  uction contract 
  customers (see note 
  26) 
                         51.6                   40.7                           
40.7 
                         11.3                    7.0                           
 7.0 
             les          2.3                    7.2                           
 7.2 
             included 
             within 
             current 
             assets 
                       - 885.0                  798.3 
                       - 
                       - 
                       - 
                       0 
  Within 
  non-curDerivative 
  frent assets 
  Other debtorinancial   15.1                    1.4                           
 1.4 
  instruments at fair 
  value (see note 32) 
  Amounts receivabsTotal 
  trade and other 
  receivable under PFI 
  contrles included 
  within non-curacts 
                         13.9                    7.3                           
 7.3 
                       -  40.4                   41.2                          
 41.2 
                       - 
                       - 
                       t 
                       - 
                       - 
                       - 
                       - 
                       - 
                       s 
                         69.4                   49.9                           
49.9 
  CrThere is limited 
  concentredit risk on 
  trade r geographically 
  in over 100 
  countration of credit 
  r eceivables ies. 
                       isk with respect to trade receivables, as the group's
customers are both large in number and dispersed 
                       Credit terThere is no group-wide rms vary across the
group and can rate of provision,and proange from 
                       0 to 90 davision is made for debts that are past due
according to local conditions and past default 
                       experys to reflect the different risks within each
country in which the group operienceates.. The 
                       movement in the allowance for doubtful debts is as
follows: 2007 
                                                2006                           
2006 
                           £m                     £m                           
  £m 
  AtAmounts            -                  (25.7)(24.9) 
  wr1Januaryitten off  - 
  during the y         - 
                       - 
                       - 
                       ) 
  Increase in       ear   5.4                    4.6                           
 4.6 
  allo 
  At 31 Decemberwance  -                  (16.1)(5.4)                          
 (5.4) 
                       - 
                       - 
                       - 
                       - 
                       ) 
                       -                  (36.4)(25.7) 
                       - 
                       - 
                       - 
                       - 
                       ) 
  Included within trwhich no provision has been made as there has not been a
signifade receivables are trade debtors with a 
  carrying amount of £290m (2006:£351m) which are past due at the reporting
date for recoverable. The group does not hold an 
                       icant change in credit quality and the group believes
that the amounts are stilloverdue for payment 
                       was 39% (2006:32%).ycollaterThe group-wide aal over
these balances.verage age of all trThe proporade 
                       debtortion of trs at yade debtorear end was 58 das at 31
December 2007 that wys (2006:56 days).ere 

The directors believe the fair value of trade and other receivables, being the  
present value of future cash flows, approximates to their book value.           

78 Notes to the consolidated financial statements (continued)

25 Trade and other receivables (continued)

Amounts              -    under   PFI contractsy the group's joint vacts
comprentures.ise the group's 
receivabAmounts      -                proportion of amounts receivable in
respect of the Private Finance 
                     -                Initiative (PFI) 
                     - 
                     - 
                     - 
                     - 
                     - 
                     - 
                     - 
                     - 
                     - 
                     - 
                     - 
                     - 
                     s 
                     - 
                     - 
                     - 
                     - 
                     - 
                     - 
                     - 
                     - 
                     - 
                     n 
                     - 
                     - 
                     e 
                     - 
                     - 
                     - 
                     - 
                     r 
                     - 
                     - 
                     I 
                     - 
                     - 
                     - 
                     - 
                     - 
                     - 
                     e 
59%. There were no    During the year the group increased its ownership
interest in Bridgend Custodial 
further changes in    Services Ltd toHMPrison and 
these ar Young 
Offenders Institution 
Parc in Brrangements 
duridgend,ing the 
year.The projects are 
the 
design,construction,- 
inancing and 
management of people 
in Milton Keynes for 
the Youth Justices 
Board.The Bridgend 
contrSouth Wales,act 
commenced in Janfor 
the Home 
Office;uarand the 
Oakhill Secure y 1996 
and expires in 
December 
2022.TheTraining 
Centre for 
youngMilton Keynes 
contr 
of a severe failure to complact commenced in June 2003 and expires in June
2028.y with the contrBoth 
contracts can be terminated by the customer either in the eventassets remain
the property of the 
customeract or voluntarily with six months notice and the payment of
appropriate compensation.The 
specified of the contracts. There is currently no obligation to acquire or
bs.The group's joint vuild 
furentures hather assets and anve the right to proy such obvide services using
the specified assets 
during the lifevariations to the contracts.The pricing basis is
inflation-indexed.ligation would be 
agreed with the customers as 
Amounts receivable under PFI 
contracts are pledged as security 
against borrowings of the group. 
26 ContrConstruction 
contractsacts in place at the 
balance sheet date are as 
follows: 
                                                20072006 
                                                  £m£m Amounts due from
contrAmounts due to contract 
                                                    customeract customers
included in trs included in 
                                                    trade and other paade and
other 
                                                    receivabyablesles11.37.0
(1.7) 
Net balances relating                                (1.5) 
to construction 
contracts 
                                                 9.6 5.5 
ContrLess:Progress billingsact costs            32.222.6 
incurred plus recognised profits 
less recognised losses to date Net 
balances relating to construction 
contracts 
                                              (22.6)(17.1) 
                                                 9.6 5.5 
At 31 December 2007,customers for contract wadvances receivork at either
balance sheet dateed from 
customer.s fAll tror contract work amounted to £2.8m (2006:£3.6m).There were no
retentions held by 
settlement within one year. 
                      ade and other receivables 
                      arising from construction 
                      contracts are due for The 
                      directortheir book 
                      valuesbeliev.e the fair value 
                      of amounts due from and to 
                      contract customers,being the 
                      present value of future cash 
                      flows,approximates to 

27 Disposal groups           imarily comprise the assets and liabilities
associated with the 
classifDisposal groups       security servicesG4S Sicherheitsdienste GmbH and
G4S Sicherheitssysteme 
classified as held fied as   GmbH,incipally include Group 4 Securicor
SAS,Berand the securlin.ity 
held for sale as at 31       services businesses in Germany,which principally
include 
December 2007 pror sale 
businesses in France, which 
pr 

The major classes of assets and liabilities 
comprising the operations classified as held for 
sale are as follows: 
                                                    2007 
                                                      £m 
ASSETSGoodwill and acquisition-related intangib 
Proper                         le assets           57.6Inty,plant and equipment
and intangible 
                                                   assets other than
acquisition-related5.8 
Tventories                                         3.3Cash and cash
equivalentsrade and other 
                                                   receivables56.6 
                                                     7.6 
Total assets classified as                         130.9 
held for sale 
LIABILITIESBank o 
Bank                                                (8.3)Trade and other
pa(0.6) 
loansverdrafts 
Cur               yables                           (62.3)Retirement benefrent
tax liabilitiesit 
                                                   obligations(2.0) 
   Provisions                                       (1.1)(4.0) 

Total liabilities associated with assets classified as held for sale (78.3)

Net assets of disposal group 52.6

79

28 ACash,cash equivalents and bank overdrafts is presented beloreconciliation
of cash and 
cash equivalents reporw:ted within the consolidated cash flow statement to
amounts 
reported within the balance sheet 2007 
                                                                               
  2006 
                                                                           £m  
    £m 
  Cash and cash equivalentsBank o                                       381.3  
 307.5 
 Cash, cash equivalents and bank overdraftsverdr                      (109.9) 
(97.5) 
Total cash,cash equivalents and bank ovafts included within disposal    (0.7)  
     - 
groups classiferdraftsied as held for sale 270.7 
                                                                               
 210.0 
Cash and cash equivalents pr2007 bore interest at a                           
parties 
weighted aincipallvery comprage rate of 3.3% (2006:ise 
short-term money mar3.2%).The credit rket deposits,isk 
on cash and cash equivcurrent account balances and cash 
held in alents is limited because the counterATM 
machines and in are banks with high credit ratings 
assigned by international credit-rating agencies. The 
group operIt balances and the equivalent amount of the 
ois anticipated that the n ates a multi-curumber of 
parrency notional pooling cash management system which 
included in excess of 80 group companies at 31 December 
2007.ticipants in the group will contin 
                              verdraft balances were effectivue to groely
offset fw.At 31 
                              December 2007 £82.9m (2006:or interest purposes
within the 
                              cash pool.£75.2m) of the cash Cash and cash
equivalents of 
                              £28.1m (2006:the settlement of claims against the 
                              group'scaptiv£17.7m) are held be insurance
subsidiary the 
                              group'ies.s wholly-owned captive insurance 
                              subsidiaries.Their use is restricted to 
29 Bank overdrafts,bank loans and loan notes 
                                                                         2007  
  2006 
                                                                           £m  
    £m 
     Bank oBank loansverdrafts                                          109.9  
  97.5 
     Loan notes                                                         809.7  
 900.4 
 Total bank overdrafts,bank loans and loan notes                        290.4  
     - 
                                                                       1,210.0 
 997.9 
The borOn demand or within one yrowings are repayab In 
the second y 
                              ear le as follows: 
                                                                        190.5  
 167.6 
 In the third to fearifth years inclusive                                10.7  
   6.5 
     After fTive years                                                  702.1  
 805.5 
                                                                        306.7  
  18.3 
 Less:otal bank overdrafts,bank loans and loan notes                   1,210.0 
 997.9 
- Bank oAmount due fverdraftsor settlement within 12 months (shown    (109.9) 
(97.5) 
under current liabilities):-Bank loans (80.6) 
                                                                              
(70.1) 
 Amount due for settlement after 12 months                            (190.5) 
(167.6) 
                                                                       1,019.5 
 830.3 
Analysis of bank overdrafts, bank loans and loans notes 
by currency: 
                                               Sterling  Euros       -  Others 
Total 
                                                                     S 
                                                                     - 
                                                                     - 
                                                                     - 
                                                                     - 
                                                                     - 
                                                                     - 
                                                                     s 
                                                    £m     £m        -      £m 
     £m 
                                                                     m 
     Bank oBank loansverdrafts                 184.964.4 329.212.4   - 30.5    
  109.9 
                                                                     - 
                                                                     - 
                                                                     - 
                                                                     - 
                                                                     - 
                                                                     - 
                                                                     6 
     Loan notes                                      -      -        -  53.4-  
809.7290.4 
                                                                     - 
                                                                     - 
                                                                     - 
                                                                     4 
     At 31 December 2007                         249.3  341.6        -    83.9
1,210.0 
                                                                     - 
                                                                     - 
                                                                     - 
                                                                     2 
     Bank oBank loansverdrafts                 126.161.4 293.612.1   - 22.9    
   97.5 
                                                                     - 
                                                                     - 
                                                                     - 
                                                                     - 
                                                                     - 
                                                                     - 
                                                                     1 
     At 31 December 2006                       187.5    305.7        - 
32.955.8900.4997.9 
                                                                     - 
                                                                     - 
                                                                     - 
                                                                     9 

Of the borrowings in currency other than sterling, £821m (2006: £763m) are      
designated as net investment hedging instruments.                               

80 Notes to the consolidated financial statements                           
(contin- 
                                                                            
ed) 
   29                          oeighted        lo-     and     loan   no-  
(continates on bank overdrafts,bank loans and 
                               averdrafts,vera-                ns              
   es loan notes wued)ere as follows: 
                               e interest rbank 
                                                                               
       2007                    2007 
                                                                               
          %                       % 
     Bank oBank loansverdrafts                                                 
        6.0                     6.0 
               Loan notes                                                      
        5.7                     5.7 
                                                                               
        5.9                     5.9 
   The group'arevolving credit facility of £30m maturs committed bank
borrowings compring June 2008 with a one yise 
   two multicurrency revolving credit facilities totalling £1,087m with a
maturity date of June 2012 and 31 December 
   2007, undrawn committed availab 
                                               ear term out option, and
uncommitted facilities of £410.9m (2006: 
                                               £353.3m). At is at prevailing
Libor or Euribor rates, dependent upon 
                                               the perle facilities amounted to
£427.9m (2006:iod of drawdown,plus an 
                                               agreed mar£227.7m).Interest on
all committed bank borgin,and repriced 
                                               within one year or less.rowing
facilities Borrowing at floating rates 
                                               exposes the group to cash flow
interest rate risk. The management of 
                                               this risk is discussed in note
33. The group issued fMarch 2014 
                                               ($100m),ixed rMarch 2017
($200m),ate loan notes in the US PrMarch 2019 
                                               ($145m) and March 2022
($105m).ivate Placement market totalling 
                                               US$550m (£276.3m) on 1st March
2007.The notes mature in 
   The committed bank facilities and the loan notes are subject to one
facceleration of maturity.The group was fully 
   in compliance with the financial covenant and any non-compliance with the
covenant may lead to an applicable, the 
   year to 31 December 2006. The group has not defaulted on,inancial coor
breached the tervenant throughout the yms 
   of,anear to 31 December 2007 and,y material loans during the yearwhere. 
   curBank orent at the balance sheet dateverdrafts and bank loans are stated
at amortised cost.Loan notes are stated 
   at amortised cost recalculated at an effective interest ratemarket
prices,approximates to their book value.The 
   directors believ.e the fair value of the group's bank overdrafts,bank loans
and loan notes,calculated from 
   30 Obligations under finance leases 
                                                                               
     Present                 Present 
                                                                               
     value of                value of 
                                                                      Minimum
Minimumminimum                 minimum 
                                                                       lease  
lease   lease                   lease 
                                                                      paymen-  
    paymentspayments                payments 
                                                                      s 
                                                                        2007   
2006   2007                    2007 
                                                                          £m   
  £m     £m                      £m 
     Amounts paWithin one yy 
     In the second to fear 
           able under finance leases: 
               After five yearsifth years                               18.7   
15.6   16.2                    16.2 
                               inclusive 
                                                                        40.3   
40.8   35.6                    35.6 
                                                                        11.2   
 8.4   10.4                    10.4 
   Less: Future finance charges on finance                              70.2   
64.8   62.2                    62.2 
   leases 
    Present value of lease obligations                                  (8.0)  
(8.7) 
                                                                        62.2   
56.1 
   Less:Amount due fAmount due for settlement after 12 monthsor settlement
within 12 months (shown under current 
   liabilities)(16.2) 46.0 
   It is the group'year ended 31 December 2007,spolicy to lease certhe wtain of
its feighted aixtures and equipment 
   under fverage effective borinance leases.The weighted average lease term is
eight years.For the All leases are on 
   a fixed repayment basis and no arrangements have been entered into frowing
rate was 5.4% (2006:or contingent 
   rental pa5.5%).Interest ryments.ates are fixed at the contract date. The
directorbook value.s believe the fair 
   value of the group's finance lease obligations,being the present value of
future cash flows,approximates to their 
   The group's obligations under finance leases are secured by the lessors' 
   charges over the leased assets. 

81

31 Trade and other payables 
                                                                               
 2007       2006 
                                                                               
   £m         £m 
  Within curTrent li 
  Amounts due to constrrade creditors 
            abilities: 
                                                                               
137.1             116.6 
Amounts owed to associated underuction contract                                
  1.7        1.5 
customertakingss (see note 26) Other taxation and social 
security costs 
                                                                               
  0.3        0.7 
  Other creditorAccruals and defs                                              
129.1             140.3 
            erred income                                                       
409.4             311.2 
   Derivativ                                                                  
1 53.0             138.5 
Total trade and other pae financial instruments at fair value (see note        
1 5.1        1.4 
32)yables included within current liabilities 845.7 
                                                                               
                  710.2 
 Within non-curDerivativrent liabilities: 
Other creditore financial instrTotal trade and other                           
  6.7        0.3 
pasuments at fair value (see note 32) yables included 
within non-current liabilities 
                                                                               
 32.0        0.7 
                                                                               
 38.7        1.0 
Ttrrade and other payables principally comprise amounts outstanding for trade
purchases and ongoing 
costs.The average credit period taken for floade purchases is 46
daws,approximates to their book valueys 
(2006:42 da.ys).The directors believe the fair value of trade and other
payables,being the present value 
of future cash 
32 The carDerivativrying values of dere financial instrumentsivative financial
instruments 
at the balance sheet date are presented below: 
                                                        Assets   Assets  
Liabilities      Liabilities 
                                                          2007    2006         
 2007       2006 
                                                            £m    £m           
   £m         £m 
 Forward fInterest roreign exchange contracts                -    6.3          
 13.6        0.9 
Interest rCommodity swapsate swaps designated as fair value hedgesate          
  8.2        0.4 
swaps designated as cash flow hedges3.12.3 14.3 
                                                                   -           
    -          - 
                                                             -     -           
    -        0.4 
  Less:Current porNon-curtionrent portion                 17.4    8.6          
 21.8        1.7 
                                                        (15.1)    (1.4)      
(6.7)         (0.3) 
                                                           2.3    7.2          
 15.1        1.4 
DerThe source of the marivative financial instrkuments are stated at fair
valueet prices is Bloomberg and 
in addition the third par,based upon market prty relationship counterices where
available or otherwise on 
discounted cash floparty banks.The relevant curw valuations. used to forecast
the floating rate cash flows 
anticipated under the instrument which are discounted back to the balance sheet
daterency yield cur.This 
value isve iscompared to the original transaction value giving a fair value of
the instrument at the 
balance sheet date. 
The mark to market valuation of the derivatives has 
fallen by £11.3m during the year. The interest rate and 
commodity swaps which qualify as cash flow hedges have 
the following maturities: Assets 
                                                                 Assets  
Liabilities      Liabilities 
                                                          2007    2006         
 2007       2006 
                                                            £m    £m           
   £m         £m 
  Within one yIn the second yearear                        0.1    0.5          
  0.1        0.4 
  In the third y                                           1.0    0.3          
  0.9          - 
  In the fIn the fourth yearear                            0.6    1.1          
  1.1          - 
                                                           0.7 
Total carifth yrying value of cash floear or greater 0.2 
                                                                               
  2.2          - 
                     w hedges                              0.7    0.2          
  3.9        0.4 
                                                           3.1    2.3          
  8.2        0.8 

82                     Notes to the consolidated financial statements     
(continued) 
   32Projected settlement of cash  financialinstrume-         (continws
(including accrued 
     floDerivative                          ts       interest) associated with 
                                                     derued)ivatives that are
cash 
                                                     flow hedges: 
                                                               Assets        
Assets 
                                                                 2007          
2006 
                                                                  £m           
  £m 
     Within one yIn the second year                               1.7 
         In the third y     ear                                                
 1.4 
                                                                  0.6          
 0.5 
     In the fourth year 
                                                                  0.4          
 0.4 
     In the fifth year or                                         0.2          
 0.1 
     greaterear 
     Total cash flows                                             0.2          
   - 
                                                                  3.1          
 2.4 

33 Financial risk

The     manas objectivgementto stakeholders are maximised.e in managing its
capital 
group'-        is to ensure that the bThe group believusinesses within it can
continue and 
apital  develop as going concerns whilst returns 
is minimised and that this is the case when the group broadles that these
retury has 
the charns are maximised when the group'acteristics of a BBB rated entitys
W.eighted 
The group therefAverage Cost of Capital (Wore aims generallACC)maintain its net
debt 
expressed as a multiple of cash generated from operations within a range 
corresponding to those of BBB rated entities.y to 

acquisitions mThe group has a range of returnon capital targets in respect of
potential 
acquisitions,depending upon their size.Most proposals for “bolt-on”return a
minimust demonstrum of 
10% within this timefrate a post-tax returame and relativn of at least 12% on
the capital inely 
rare,large,vestment within 3 years.Medium-sized acquisitions are required to
calculation of its 
post-tax WACC at 31 December 2007 was 8.2%. 
                                 strategic acquisitions a minimum equal to the
group's WACC. The 
                                 group's The group monitorthe group monitor
performance and therefs s 
                                 the fthe Returinancial perf 
ore calculates it as EBITn on 
Net 
            orAssets (Rmance of 
            acquired b 
               A divided bONA) of all its b 
                   usinesses dur 
            y net assets excluding goodwill,usinesses on a monthl ing the years
fy basis.ollowing 
            acquisition against the retur 
                                 tax,The group regards Rdividends payable and
retirement benefONA as 
                                 a measure of oper n targets. In addition, 
                                            it obligations.ational 
The group has no curmarket on a regular basis so as to prorent intention to
commence a share bvide a 
pool of shares from which to satisfy share auy-back plan.The group operwards to
emploates a programme 
to purchase its oyees as the awards vest.wn shares on the The group is not
subject to exterduring the 
year.nally-imposed capital requirements and there were no changes in the
group's approach to capital 
management Liquidity riskThe group mitigates liquidity r of such facilities to
remain unutilised and 
in prisk by ensuring there are suffactice the group ricient undruns comfawn
committed facilities 
aortably above this level.vailable to it.Policy demands a minimum of 20% The
percentage of available, 
but undrawn committed facilities during the course of the year was as follows:
31 December 200631 
March 200747%22% 30 June 200730 September 200741% 31 December 2007 
            38%39% 
Tof fo reduce re-finance terminating on a single dateinancing risk,Group
Treasur.y obtains finance 
with a range of maturities and hence minimises the impact of a single material
source The group's 
committed facilities have the following maturity dates: June 2008June 2012 
            £30m 
March 2014  £50m£1,087m 
March       £73m£100mMarch 
2019March   2022£53m 
2017 

83

33 Financial risk (continued)

Re-fLiquidity risk (continits terinancing rmination dateisk is fur.ther reduced 
bued)y Group Treasury opening negotiations to either replace or extend any major
facility at least 18 months before Folloits sources of fwing the example of the 
inaugurinance and reduce further the proporal US Private Placement of loan notes
issued in March 2007,tion of bank supplied finance.the group will continue to   
seek to diversify                                                               

Market risk 
CThe group conducts burrency risk and f 
financing activities in local 
curusiness in man 
               orward f        orward f 
          rency.Hoy cur   rency.Hoy cur 
                                       orei- 
                                       n e 
                                       w rencies. xchangTransaction re
contractsisk is limited 
                                       since,wherever possible,each business
operates and conducts its 
                                       to fof its exposure to fluctuations in
the troreign exchange 
                                       risk due to the translation of the
results and net assets of 
                                       its fever,the group presents its
consolidated financial 
                                       statements in steranslation into
sterling of its overseas net 
                                       assets boreign subsidiary holding loans
in fies.The group 
                                       hedges a substantial proporling and it
is in consequence 
                                       subject oreign currencies. 
                                                                               
          tion 
Tcurranslation adjustments arrency equity investments as they qualify as net
inising on the 
translation of fvoreign curestment hedges.rency loans are recognised in equity
to match translation 
adjustments on foreign The group enterThe group hedges those fs into forward
foreign exchange contr is 
a suff 
oreign currencies in    oreign currencies in which more than 1% of the group'
acts so as to hedge a 
which more than 1% of   high propors consolidated net opertion of the
translation rating assets are 
the group' acts so as   denominated,isk not hedged by way of loans.provided
there be considered where 
to hedge a high propors the cost of hedging is acceptabiciently liquid and
large enough foreign 
consolidated net        exchange marleket in which to hedge the currency.Other
currencies below the 1% 
opertion of the         threshold will alsonotional value of outstanding
forward foreign exchange 
translation rating      contr.Gains and losses on such facts at 31 December
2007 was £373.2m 
assets are              (2006:orward foreign exchange contr£342.4m).acts are
recognised in equityAll 
denominated,isk not     these contracts had.The matured binstruments are
designated and fully 29 
hedged by way of        February 2008,at which point they wy effective as net
inere replaced with new 
loans.provided there be fvestment hedges and moorward fvements in their fair
value haoreign exchange 
considered where the    contrvacts.e been defAll the feroreign exchange
hedgingred in equity. 
cost of hedging is 
acceptabiciently liquid 
and large enough 
foreign exchange 
marleket in which to 
hedge the 
currency.Other 
currencies below the 1% 
threshold will 
alsonotional value of 
outstanding forward 
foreign exchange 
contr.Gains and losses 
on such facts at 31 
December 2007 was 
£373.2m (2006:orward 
foreign exchange 
contr£342.4m).acts are 
recognised in equityAll 
these contracts had.The 
matured binstruments 
are designated and 
fully 29 February 
2008,at which point 
they wy effective as 
net inere replaced with 
new fvestment hedges 
and moorward fvements 
in their fair value 
haoreign exchange 
contrvacts.e been 
defAll the feroreign 
exchange hedgingred in 
equity. 
At 31 December 2007,respectively hedged by fthe group'oreign curs US
dollarrency loans and 
f,euro,oreign exchange fCanadian dollar and Danish krone net assets worward
contracts (2006:US dollar 
90.6% and euro 94.7%).ere approximately 98%,90%,93% and 83% The fdepreciation
of GBP against each of 
the hedged curinancial instruments used to hedge the foreign currency
translation exposure had a fair 
value loss of £13.6m at 31 December 2007.Assuming a 1% value loss would be
posted to equity. A 
simultaneous depreciation of GBP against all currencies,the fair value loss on
these instrrencies is 
unlikuments would increase bely based on past mary a further £3.9m.ket
movements.This additional fair 
InterBorrowing at floating rest rate risk and interest rate swaps approved by
the directorates as 
descrs.Interest ribed in note 29 exposes the group to cash floate swaps and,w
interest rate risk, 
which the group manages within policy limitsof borrowings on a reducing scale
over forward perto a 
limited extent,iods up to a maximforward rate agreements are utilised to fix
the interest rate on a 
proportion contrrate was 4.9% (US dollar) (2006:acts was £213.5m (in respect of
US dollar) (2006:4.9%) 
and 3.8% (euro) (2006:£196.7m) and £183.6m (in respect of euro) (2006:um period
of five years.At 31 
December 2007 the nominal value of such3.4%),and their weighted average period
to matur£141.5m),ity 
was three ytheir weighted average interest rate hedging instruments are
designated and fully effective 
as cash flow hedges and movements in their fair value have been deferearred in
equitys.All the 
interest. The US PrAt the time of issue in March 2007,ivate Placement market is
predominantlthe group 
was comfy a fixed rorate market,with investors looking for a fixed rate return
over the life of the 
loan notes. and therefore rather than take on a higher proportion of fixtabed
rle with the proportion 
of floating rate exposure not hedged by interest rate swapson the Prate debt
arranged fixed to 
floating swaps effectively converting the fixed coupon swaps havivate Placement
to a floating rebeen 
documented as fair value hedges of the US Prate.Following the swaps the
resulting average coupon on 
the US Private Placement is Libor + 60bps.Theseposted to profit and loss at the
same time as the 
movement in the fair value of the hedged item.ivate Placement fixed interest
loan notes,with the 
movements in their fair value 
The core group borwhich fix a portion of the exposurerowings are held in
USD,some interest r,euro and 
GBP.Although the impact of rising interest rates is partly shielded by interest
rate swaps these cur 
                                       ate risk remains. Assuming a 1% increase
in interest rates 
                                       across the yield curve in each
ofexpected in the 2008 frencies 
                                       and keeping the 31 December 2007 debt
position constant 
                                       throughout 2008,inancial year.an
additional interest charge of 
                                       £5.6m would be 
  Commodity risk and commodity sThe group' 
swaps are sometimes used to fs principal commodity rix syntheticallisk relates
to the 
fluctuating lev waps 
                                            el of diesel prices, particularly
affecting its cash ser 
                                            vices businesses. Commodity in
place at 31 December 2007. 
                                       y part of the exposure and reduce the
associated cost 
                                       volatility. There were no commodity
swaps 

84 Notes to the consolidated financial statements (continued)

33 Financial risk (continued)

The -  riskisk management is to set minimum credit ratings for counterparties
and monitor these on a regular basis. 
gr-    - 
up-    - 
Co-    r 
nt-    - 
rp-    - 
rs  - 
st-    - 
at-    - 
gy  t 
fty - 
    - 
    - 
    - 
    t 
For treasurapplying a wy-related treighting to the notional value of each
transactions,the policy limits the aggregate credit risk assigned 
to a counterparty rating agency. For long-teransactions (under one ym
transactions,the fear),inancial counterthe financial counter ansaction 
outstanding with each counter 
      . The utilisation  . The utilisation of a   . The utilisation of a credit
limit is calculated byFor short-term tr party mparust haty 
      of a credit limit  credit limit is          must be inve a minimvestment
gr par 
      is calculated byForcalculated byFor 
      short-term tr partyshort-term tr party 
      mparust haty must  mparust haty must be 
      be inve a          inve a minimvestment gr 
      minimvestment gr   par 
      par 
      um rating of ade r ty based on the type and dur A+/A1 from Standard &
Pated by 
      either the Standard & P ation of the tr 
      oor's or           oor's or Moody'oor's or                 oor's or
Moody'oor's or Moody' 
      Moody'oor's or     Moody' 
      Moody' 
         ansaction.          ansaction.                                 
ansaction. 
           s.                  s.                          s.                  
                      s 
Ttwreasuro countery transactions are dealt with the group'party exposures
related to Treasurs relationship banks all of which hay 
transactions were £5.3m and £4.4m and held with institutions with long terve a
strong investment grade rating.At 31 December 2007 the larm 
Standard & Poor'gest ratings of AA and AA- respectively.These exposures
represent 30% and 25% of the car rying values of derivative 
financial instruments with a fair values creditgain at the balance sheet date.
The group opercredit balances of £84.5m wates a 
multi-currency notional pooling cash management system with a wholly owned
subsidiary of an AA rated bank. At year end pooling agreement. 
  ere pooled with debit balances of £82.9m, resulting in a net pool balance of
£1.6m. There is legal right of set off under the At an 
  opercounterparating levties with noel the minim,or a non-inum in int and
exposure to mvestment gr vestment grade rating criteria applies. 
  Exceptionally,where required by local countr y circumstances, 
g-     adeultiple industr,rating can be approies,there is minimal concentrved
as counterparties fation ror a perisk.iod of up to 12 months.Due 
o-     to the group's 
al 
g- 
o- 
r- 
p- 
i- 
al 
f- 
o- 
pr 
T-  be-   ob within the 
e ef-   countrates a wide 
g-  t  ries concerned.ange 
o-     of retirement benef 
p 
o- 
e- 
R- 
t- 
r- 
m- 
nt 
  li- 
  at- 
  ons 
  These include funded defit arined contrrangements which are estabibution and
funded and unfunded deflished in accordance with local 
  conditions and prined benefit schemes.actices Defined contribution arThe
majorrang contribution and resulting income statement charity of 
  the retirement benefit ar ementsrangements oper 
     ge is fixed at a set levated bythe group are of a defel or is a set
percentage of emploined contribution stryees'ucturepay.,where the 
     employercontribution schemes and charged to the income statement totalled
£57.9m (2006:£49.8m).Contributions made to defined In the 
     UK,contribution schemefollowing the closure of the def.ined benefit
schemes to new entrants,the main scheme for new employees is a 
     contracted-in defined Wdeposits to the varackenhut Services,ious defInc
(“WSI”) is the administrined benefit schemes as deterator of 
     sevmined beral defined benefit schemes.WSI is responsible for making
periodic cost-reimbursable ackno 
      y independent actuaries. In each instance, the US Department of Energy
(“DOE”)these schemes are accounted fwledged within the contror 
      as defact entered betwined contreen the DOE and ibution schemes.WSI its
responsibility for all unfunded pension and benefit 
      liabilities. Therefore, In the Netherpossible to identify separlands,most
emploatelythe group'yees are members of industry-wide 
      defined benefit schemes which are not valued on an IAS 19 basis as it is
not contribution schemes. Contributions made to the schemes 
      and charsshare of the schemes'assets and liabilities.ged to the income
statement in 2007 totalled £4.7m (20As a result the schemes are 
      accounted 06:fo£4.2m).r as defiTnehdamounts of contributions expected to
be paid to the schemes dure estimated accrual of benefits is 
      approximately £4.9m. 
      ing the financial year commencing 1 January 2008 in respect of the
ongoing 
      Defined benefit arThe group operrangements pensionable pay.ates a
nLiabilities 
      under these arumber of defined benefrangements are stated at the
discounted 
      value of benefit retirement arrangements where the benefits are based on 
      emploits accrued to datey,ees'based upon actuarlength of service and fial 
      adviceinal. Under unfunded arin respect of these arrangements,the group
does 
      not hold the related assets separ held in separ 
  rangements in 2007 totalled £1.8m (2006: £1.6m). Under funded ar ate from the
grouprangements,.The amount charthe assets of defined 
  benefged to the income statementit schemes are unit credit method.ate
trustee-administered funds.The group operates severThe pension costs 
  are assessed on the advice of qualifal funded defined retirement benefit
schemes.Whilst the group'ied independent actuars pries using the 
  projectedit also oper Netherlands and one in Isrates other materael) haial
schemes in the Netherve been reclassified,flands,or disclosure 
  purIreland,Canada and Isrposes,into the materael.During 2007,ial funded
deftwo defined retirement benefined benef imary schemes are in the 
  UK,it schemes (one in the 
      it schemes          it schemes category.                       it schemes
category. 
      category. 

85

34 The carRetirement benefit obrying values of retirement benefligations
(continit obligations at the 
balance sheet date are presented beloued)w: 
                           2007   2006 
                             £m     £m 
 UKRest ofWor             121.6  210.7 
Net liability on materldUnfunded  15.7ligations135.5226.4 
and other funded defial funded 
defined retirement benefined 
retirement benefit obit 
schemes13.9 
                           31.9   24.1 
 Less:                    1 67.4 250.5 
Included within         (47.3)   (42.2) 
non-curAmounts 
included within 
current 
liabilitiesrent 
liabilities 120.1 
                                 208.3 
The defThey comprined benefise two arit schemes in the UK account
frangements:the pension scheme 
demeror 90% of the net balance sheet liability on materged from the forial
funded defined retirement 
benefit schemes. and the Securicor scheme, 
                     mer Group 4 Falck A/S with total membership of
approximately 8,000of 
                     approximatelresponsibility for which the group assumed on
20 July 2004 with the 
                     acquisition of Securicor plc,with total membership scheme
and at 5 y 
                     20,000.Aprhavil 2006 in respect of the SecurRegular
actuarial assessments of the 
                     schemes are carried out,the latest being at 31 March 2007
in respect of the Group 
                     4earnings increases,e been updated to 31 December 2007 and
use the valuation 
                     methodologies specificor scheme.Pension obligations stated
in the balance sheet 
                     takied in IAS 19 e account of future service and Employee
Benefits. The weighted 
                     average principal assumptions used for the purposes of the
actuarial valuations 
                     were as follows: UK 
                                 Rest of World 
KDiscount rey 
assumptions used 2007 
Expected                5.8%6.7% 5.5%5.8% 
returateExpected rnon 
scheme assets 
Future pension          5.2%3.4% 2.1%3.3%Inflation3.4%2.2% 
increasesate of salary 
increases 
KDiscount rey 
assumptions used 2006 
Expected returate          5.2%  4.8%Expected r 
Future pension 
increasesate of salar 
n on scheme assetsy     6.5%4.9% 5.8%3.7% 
increases 
 Inflation              3.1%3.1% 2.3%2.3% 
the schemes in the UK are as fIn addition to the above,the group uses
approprollows:iate mortality 
assumptions when calculating the schemes obligations.The mortality tables used
for >>CurCurrent and 
future pensionerrent and future pensionerss125% of PMA92 (Y115% of PFA92 (YOB)
ShorOB) Shortt 
CohorCohorttFemaleMale The amounts recognised in the income statement in
respect of these defined 
benefit schemes are as follows: UK 
                     Rest of      Total 
                     World 
                     -        £m     £m 
                     m 
 Amounts rCur 
Finance cost on 
defrent ser 
ecognised in income      (4.1)   (15.6) 
2007vice cost 
Expected return          (3.9)   (72.3)Total amounts recognised in incomeon
defined retirement benefit 
                                 scheme assets73.9(6.0)(4.6)3.4(10.6)77.3 
 Amounts rCur 
Past serrent ser 
ecognised in income 
2006 
vice costvice cost       (3.5)   (13.7)Finance cost on defined retirement
benef(0.4)(0.7)(1.1) 
Expected return on       (2.9)   (66.2)Total amounts recognised in incomeit
scheme 
defined retirement               assets64.8(9.1)(4.7)2.4(13.8)67.2 
benefit obligations 

86 Notes to the consolidated financial statements                              
       (continu- 
                                                                               
       d) 
   34The amounts recognised in income are included within the      benefit
obligations (continu- 
     fRetirement 2006                                                          
       d)ollowi- 
                                                                               
       g 
                                                                               
       categori- 
                                                                               
       s in the 
                                                                               
       income 
                                                                               
       statemen- 
                                                                               
       : 
     Cost of salesAdministr 
     Finance incomeation expenses 
     Finance costs 
     Total 
     Actuarial gains and losses recognised cumulatively in the statement of
recognised income 
     and expense are as follows: 
     AtRecognised in the y1January 
     At 31 December 
     The amounts included in the balance sheet arising from the group's
obligations in respect 
     of its defined benefit schemes are as follows: 
                                                                               
             UK 
                                                                               
             £m 
     2007Present value of def 
     Fair value of scheme assetsined benefit obligations                       
        1,291.3 
     2006Present value of def 
     Fair value of scheme assetsined benefit obligations                       
       (1,118.1- 
                                                                               
       1,328.8 
                                                                               
       (45.4)61- 
                                                                               
       1 
                                                                               
       (1,163.5- 
                                                                               
       1,389.9D- 
                                                                               
       ficit in 
                                                                               
       scheme 
                                                                               
       recognis- 
                                                                               
       d in the 
                                                                               
       balance 
                                                                               
       sheet210- 
                                                                               
       715.7226- 
                                                                               
       4 
     2005Present value of def 
     Fair value of scheme assetsined benefit obligations                       
        1,199.3 
     2004Present value of def 
     Fair value of scheme assetsined benefit obligations                       
        1,038.6 

87

34 MoRetir follovws:ements in the present value of def ement benefit obligations
(continined benefit obued)ligations in the current year and the fair value of   
scheme assets during the year were as                                           

                                UK     Rest of World    Total 
2007                            £m               £m        £m 
ObligationsAt 
Ser1vice costJanuary 2007          1,328.811.5 61.1   1,389.9Interest
cost68.44.115.6 
Contributions from scheme                       3.9   72.3Actuarial 
member                                               
gainss(77.5)3.3(8.4)1.9(85.9)5.2 
BenefOtherits paid                  (44.5)1.3  15.9(-        (45.8) 
                                               .3) 
Translation adjustments          -              7.4     17.27.4 
At 31 December 2007          1,291.3            84.6  1,375.9 
AssetsAt 
Expected retur1January     1,118.1             45.4   1,163.5Actuarial
losses73.93.477.3 
2007n on scheme assets 
Actual retur                     (16.6)        (4.6)  (21.2)Contrn on scheme 
                                                      assets57.3(1.2)56.1 
Contribibutions from scheme   34.2              3.8   38.0Benefits 
memberutions from the                                
paids(44.5)3.3(1.3)1.9(45.8)5.2 
sponsoring companies 
OtherTranslation 
adjustments 
                                    1.3-       15.76-         17.06.4 
                                               4 
At 31 December 2007          1,169.7            70.7  1,240.4 
                                UK     Rest of World    Total 
2006                            £m               £m        £m 
ObligationsAt 
Ser1vice costJanuary 2006          1,199.310.2 61.1   1,260.4Past ser3.513.7 
Interest costvice cost         0.4              0.7   1.1Contributions from
scheme 
                                                      members63.33.52.91.066.2 
Actuarial losses/(gains)      85.4                     4.5Benefits
paid(36.7)(4.0)81.4 
Acquisitions/divestments                       (1.2)   (37.9)Other0.43.00.50.9 
Tr                                                -   3.0At 31 December
2006anslation 
                                                     
adjustments1,328.8-61.1(3.4)1,389.9(3.4) 
AssetsAt 
Expected retur1January     1,004.5             39.3   1,043.8Actuarn on scheme 
2006                                                  assets64.82.467.2 
Actual returial gains n on           110.245.4 2.65.0  115.248.0Contr 
scheme assets 
Contribibutions from the      33.2              3.2   36.4Benefits paidutions
from scheme 
sponsoring companies                                 
members(36.7)3.5(1.2)1.04.5 
Acquisitions/divestments       0.4                     (37.9)Other3.00.5-0.9 
Translation adjustments                               3.0At 31 December 
                                                     
20061,118.1-45.4(2.4)1,163.5(2.4) 

The contrschemes.The other moibution from sponsorvements in the rest of the wing
companies in 2007 included £26.1m (2006:orld in 2007 represent the              
reclassif£24.2m) of additional contrication as material of twibutions in respect
of the defo funded plans.icit in the                                            

88 Notes to the consolidated financial statements                              
    (continued) 
   34The composition of the scheme assets at the balance   benefitobligations 
     sheet date is as fRetirement UK 
     Analysis of scheme assets                                    Rest of      
     Rest of World 
                                                                  World 
     2007Equity instr 
     Debt instrumentsuments                                           68%30%   
            68%30% 
     Other assets                                                 -4%-100%2-   
       -4%-100%2%100%25%100- 
                                                                  100%25%10-   
       3% 
                                                                  %3% 
     2006Equity instr 
     Debt instrumentsuments                                            70%     
           70% 
     Other assets                                                 3%-63%%3%-   
       3%-63%%3%-100%100%10- 
                                                                  100%100%1-   
       % 
                                                                  0% 
     None of the pension scheme assets are held in the entity's own financial
instruments or in 
     any assets held or used by the entity. The expected weighted average rates
of return on 
     scheme assets for the following year at the balance sheet date are as
follows: UK 
                                                                  Rest of      
     Rest of World 
                                                                  World 
     2007 (retur2006 (return expected in 2008)                         6.9%    
          6.9% 
     2005 (returnn expected in 2006)expected in 2007)               6.7%6.5%   
          6.7%6.5% 
     The expected rwith respect to other assets bates of return on individual
categories of scheme 
     assets are determined with respect to bonds by reference to relevant
indices,and respect of 
     assets of a similar natureyreference to relevant indices of the histor.The
overall expected 
     rate of return is the wical retureighted an and economic fverage of the
rorecasts of future 
     returates on the individual asset categorns relative to inflation inies.
The history of 
     experience adjustments is as follows: 2007 
                                                                        UK     
            UK 
     Experience adjustments on scheme liabilitiesAmount 
     (£m) 
     Percentage of scheme liabilities (%)                              5.5-    
           5.5- 
     Experience adjustments on scheme assetsAmount (£m) 
     Percentage of scheme assets (%)                               (16.6)(1)   
         (16.6)(1) 
     2006 Experience adjustments on scheme 
     liabilitiesAmount (£m) 
     Percentage of scheme liabilities (%)                         29.02-20.-   
              29.02-20.129.1 
                                                                  29.1 
     Experience adjustments on scheme assetsAmount (£m) 
     Percentage of scheme assets (%)                                  45.44    
          45.44 
     2005 Experience adjustments on scheme 
     liabilitiesAmount (£m) 
     Percentage of scheme liabilities (%)                          (17.5)(1)   
         (17.5)(1) 
     Experience adjustments on scheme assetsAmount (£m) 
     Percentage of scheme assets (%)                                  99.010   
           99.010 

89

34 Retirement benefit obligations (continued)

2004                                                                           
      UK Rest of World 
Percentage of scheme liabilities (%)                                           
 (2.7)(1) -- 
Experience adjustments on scheme assetsAmount (£m) 
Percentage of scheme assets (%)                                                
             30.24643.733.9 
The estimated amounts of contrthe ongoing accrual of benefits is approibutions
expected to be paid to the 
schemes durximately £18m anding the financial year commencing 1 January 2008 in
respect of changes in financial 
conditions. Additional contributions of around £26m will also be made in 2008
in respect of the def it is 
anticipated that these will remain at a similar level in the medium tericit in
the schemes.m subject to IAS 19 
specifto apply the aies that pension liabilities should be discounted at
approprviate high quality corporate 
bond rates.The directors consider that it is appropriate and hamovement in the
discount rve thereferore used 
such a rage of the yields on those ate applicabate,being 5.8%,AA corle in the
UK is to alter reporin respect of 
the UK schemes at 31 December 2007 (5.2% at 31 December 2006).porate bonds
which most closely approximate to 
the timescale of the liability profile of the schemested liabilities (before
associated deferred tax) by 
approximately £26m.The effect of a 0.1% 
Liability calculations are also heaexpectancy of a male member of the UK
schemes curvily impacted by the morrentltality 
projections included in the actuary aged 65 has been assumed as 19.6 yial
assumptions.ears.The weighted aThe wveighted aerage 
life expectancy verage life atto the prof65of a male curile of the memberrently
aged 52 has been assumed as 20.4 yship of the 
schemes.The effect of a one years.The directorear change in this UK lifs
consider,on actuare expectancy assumption is to alter 
reporial advice,these assumptions to be approprtediate liabilities (before
associated deferred tax) by approximately £49m. 
Pgenerension obally moligations in respect of defve in line with
inflation.erInflation is therefred members increase in line 
with inflation.ore an important assumption in the calculation of defIncreases
in salaries and increases in pensions-in-payment 
effect of a 0.1% movement in the rate of inflation assumption applicable in the
UK is to alter reported liabilities (befined 
retirement benefore associated defit liabilities.Theby approximately £14m.erred
tax) 

35 Provisions 
      Employee               Employee         Claims Onerous 
                                  ben-    Rest-      reserves contracts Other 
Total 
                                  fitsuctu- 
                                      ing 
                                    £m  £m        £m        £m    £m   £m 
AtAdditional                      11.-     1.9     37.9       10.1  18.6  80.0 
pro1January                       3.6 
2007vision in 
the year 
On acquisition                       -5.20-         12.2-      8.2-   2.4-
21.0Utilisation of 
of subsidiary                         2                              
provision(2.3)(1.2)(10.9)10.8 
Unused amounts                                           (3.6) (18.6)
(36.6)Reversals on disposal of a 
rever                                                                
subsidiarsedy(0.6)-(2.4)(9.0)-(- 
                                                                      .5)(14.5) 
Reclassified                      (2.-       --       --         -  (0.6)
(0.6)Translation 
as held for                       )                                  
adjustments0.20.2-(2.0)0.30.7-(- 
sale                                                                  .0)1.4 
At 31 December                    10.4 3.9      30.2      13.0     -  57.5 
2007 
Included in curIncluded in                                            23.633.9 
non-current liabilitiesrent 
liabilities 

57.5

EmploThe pro                                                                    
items such as long servision f                                                  
  yee benefitsor emplo                                                          
vice ayee benefwards and terits is in respect of anmination indemnity schemes.y 
employee benefits which accrue over the working lives of the employees,typically
including RestructuringRestr operations.ucturing proSettlement of restrvisions  
include amounts fucturing proor redundancy pavisions is highly                  
probabyments,le.and the costs of closuThe timing is uncertain bre of activities 
in acquired but is generally likely to be shorusinesses and discontint term.ued 

90 Notes to the consolidated financial statements (continued)

35 Provisions (continued)

The     reserof the group's cash servves are held besvices,genery the
wholly-owned 
claims  captive insurance subsidiaries in Guernsey,Luxembourg and the US which 
reserC-        underwrite part al liability,wor kers' compensation and auto
liability 
aims    policies. The provisions are subject to regular actuarial 
        reviewuncertain,iate.Settlement of these provisions is highly probable
but 
        both the value of the final settlements and their timing is 
and are 
adjusted 
as 
appropr 
possible claims.dependent upon the outcome of ongoing processes to determine
both 
liability and quantum in respect of a wide range of claims or OThe onerous
contrnerous 
contracts leased properWhilst the likties.act provision mainly comprises the
provision 
against future liabilities for all properties sub-let at a shortfall and for
long-term 
idle,properties.The proelihood of settlement of these obvision is based on the
value 
of future net cash outfloligations is considered probabws relating to
rent,le,there is 
uncerrates,sertainty ovice charver their value and durges and costs of
maration.keting 
the 

Other 
prOth- 
r pro 
various of its subsidiarvisions include amounts ar 
ovisi- 
ns 
ies    ising in respect of disposals where their final calculation is dependent
on 
are    future events. The company andis made f,from time to time,parties to
legal 
       proceedings and claims which arise in the ordinary course of 
       business.Provision 
do not anticipateor the estimated value of settlements likely to be made,but
both 
this value and the timing of any payments are uncertain.The directorsamaterial 
adverse eff,taking account of legal and other profect on the group's financial 
position or on the results of its operessional advice as
appropriateations.,that the 
outcome of these proceedings and claims will have 

36 The fDeferred tax reporolloting perwing are the major defiods:erred tax
liabilities and assets recognised by the 
group and movements thereon during the current and prior Retirement 
                                                  Other 
                   bene-      Intan-           temporary 
                   it    ible 
                   obli-      assets Tax differences                      
Total 
                   atio-             lo- 
                   s            ses 
                     £m    £m    £m                    £m                £m 
At(Char1Jange)/cre-                    (10.-     (70.9) 8.2                
16.7               28.1 
it to the income    )74.1 
statementuary 2006 
Acquisition of            10.8  (1-                      1.6            
0.4Credit/(char-(3.9)--(3.9) 
subsidiaries                    4) 
Translation         9.7-  2.8-   --                          (2.1)    7.6At 31
December 
adjustmentsge) to                                                    
200673.2(61.2)6.815.2(1.0)34.01.8 
equity 
At(Char1Jange)/cre-                    (14.-     (61.2)-       (1.-            
       15.2               34.0 
it to the income    )73.24.9    )6.8 
statementuary 2007 
Acquisition of       -   (9.7)                        5.2            
3.8(Charge)/credit to equity(22.2)-0.1(9.6) 
subsidiaries 
Translation         0.7  (3.7)-  --            (0.7)6.9              
(15.3)(3.7) 
adjustments 
At 31 December 2007 37.1 (59.7) 5.1                 26.7                9.2 
Cerfor ftain definancial reporerred tax assets and liabilities hating
purposes:ve been offset where permitted.The 
following is the analysis of the deferred tax balances (after offset) 
                                                    2007               2006 
                                                       £m                £m 
DefDefererred tax                                  (75.0)              (81.7) 
liabilities 
Total defred tax                                    84.2               115.7 
assetserred tax 
position 
                                                      9.2              34.0 
At the balance sheet datefuture profits.A defer,the group has unutilised tax
losses of approximately £126.5m 
(2006:£118.4m) potentially available for offset against losses. 
                   red tax asset of £5.1m (2006: £6.8m) has been recognised in
respect of approximately £19.3m (2006: 
                   £32.1m) of grossof future profNo defit streams in the
relevant jurerred tax asset has been 
                   recognised in respect of the remaining £107.2m (2006:£86.3m)
of gross losses due to the 
                   unpredictability author2011 and 2012 respectivities.Included
in unrecognised tax losses are gross 
                   losses of £0.8m,isdictions and the fact that a
signifely.Other losses may be carried forward 
                   indefinitel£3.0m,icant propory.£1.7m,tion of such losses
remains unaudited b£1.4m and £0.4m which 
                   will expire in 2008,y the relevant tax2009,2010, 

91

36 At the balance sheet  , the aggregate       ary differences associated with
undistributed earnings of 
dateDeferred tax (contin amount of tempor ued) non-UK subsidiaries for which 
defer on the basis that 
the group is in a 
position to control the 
timing of the revred tax 
liabilities have not 
been recognised is 
£2,504m 
(2006:£1,056m).No 
liability has been 
recognised in respect of 
these gross 
differencesdifferences 
will not reverse in the 
foreseeable future.ersal 
of the temporary 
differences and it is 
probable that such 
Temporary differences 
arising in connection 
with interests in 
associates and joint 
ventures are 
insignificant. At the 
balance sheet datetax 
issues in var,the group 
has total unprovided 
contingent tax 
liabilities of 
approximately £39.0m 
(2006:£31.8m) relating 
to unresolved 
liabilities 
crystallising is 
improbabious 
jurisdictions.leNo 
pro.It is not 
possibvision has been 
made fle to estimate the 
timing or outcome of 
these issues.or these 
amounts on the basis 
that the group considers 
that the likelihood of 
the 

37 Share capital

                   At 31 December 2007                       At 31 December
2006 
                   Issued and  Issued and                       Issued and 
                   Authorised  fully paid           Authorised  fully paid 
G4S plc             £                £                       £           £ 
Ordinary    500,000,000       320,177,685          500,000,000 319,954,230 
shares 
of 25p 
each 
(2006: 
25p 
each) 
                                                                   Nominal 
                       Number      Number               Number    value £m 
OrAtdin- 
r 
Shares 
issued 
on 
ex1Janu- 
r 
y shary 
2006es 
in issue 
ercise             1,268,715-                              1,268,715,480      
317.2Ex 
of                 480 
options: 
Sharesa-                   3,556,271-           3,556,2717-                    
          3,556,2717,545,167 
cutivve            ,545,167   545,167 
Schemee- 
cheme 
Shares             1,279,816-                              1,279,816,918      
320.0Ex 
issued on          918 
exuary 
2007erci- 
e of 
options: 
Sharesa-                   667,50022-           667,500226-                    
           667,500226,320 
cutivvee           ,320       320 
SchemeS- 
heme 
At 31              1,280,710-                              1,280,710,738      
320.2 
December           738 
2007 
The holderof the compans of ordinary.y shares are entitled to receive dividends
as declared from time to time and are 
entitled to one vote per share at meetings Options owere as follover G4S plc
shares outstanding at 31 December 
2007,ws:rolled over at 19 July 2004 from options previously held over Securicor
plc shares, 
(a) 
Executi- 
e share 
option 
scheme 
Number  Number of  Exercise price per share (pence) 
of      ordinary 
options shares 
outstan-        under 
ing1    option 
       9    72,901   107.98p                   107.98p          Exercise
date2008 
       9300,000450-           133.75p16-                            133.75p164p
     2008 - 200910230,0002008 - 2010 
        000        p 
       5 1,655,000      153p                      153p          2008 -
20102108p2008 - 2011 
       1   150,000      130p                      130p         2008 -
2012125,00025,00079.75p85p2008 - 20132008 - 2013 
       1    50,000       91p                       91p          2008 - 2013 
The proceeds from shares allotted under this scheme during the 
year amounted to £783,769 (2006: £4,266,774). 

92 Notes to the consolidated financial statements (continued)

37 Share capital (continued)

(b) All remaining    scheme scheme during the year amounted to £144,845
(2006:ve been 
shares under this    exercised or ha£4,860,469).ve lapsed during the year.The
proceeds from 
scheme haSharesave   shares allotted under this 
All of the above 
options are 
inclusive of those 
held by directors as 
set out in the 
Directors' 
Remuneration Report 
on page 42. 
5,209,320 shares are 
held by an employee 
benefit trust as 
detailed in note 38. 

38 Share premium and reserves

                         Share   Retained Hedging   Translation     Merger    
Reserve for    Total 
                       premium   earnings reserve       reserve    reserve     
own shares       reserves 
                           £m          £m      £m            £m         £m     
  £m                                                        625.0 
  attr 
Shares issuedof the 
parent 
ibutable to equity 
shareholders 
                          6.3-    73.8-       10.6-        (52.6)-         --  
      --      31.8Dividends declared-(49.8)--6.3 
Own shares purchased        -           -                                  -   
     -       (49.8)Equity-settled tr 
At 31 December           10.3-   186.05.0      4.8- 
2006ansactions 
                                                 -            - 
                                                              (2.8)--- 
                                                                           -   
     (3.1)    (3.1) 
                                                                     426.3     
     (9.4)                                                  615.25.0 
AtNet recognised                    186.0      4.8         (2.8)     426.3     
     (9.4)                                                  615.2 
income/(expense)1January 
200710.3 
  attr 
Shares issuedof the 
parent 
ibutable to equity          -       189.7   (19.2)         38.8            -   
     - 
shareholders 
Dividends declared        0.7-        (59.3)------ 
                                                                               
                                                            209.30.7 
Own shares                  -           -        -             --          --  
     (3.1)-  (59.3)(3.1) 
purchasedOwn shares a 
Equity-settled              --   (3.5)4.1        --            --          --  
   3.5-        4.1- 
trwardedansactions 
At 31 December 2007      11.0       317.0   (14.4)         36.0      426.3   
(9.0)         766.9 
Hedging rThe hedging 
resereser 
transactions that hav 
                vee 
ve not ycompret occurises the effred (net of tax).ective portion of the
cumulative net change in the fair value of cash flow instruments related to 
the hedged TThe trranslation r as well as from the translation reser eserv 
anslation of liabilities that hedge the 
compane compr ve 
                      ises all foreign exchange differences ar y's net inising
from the trvestment in fanslation of the foreign operations (net of 
                      tax).inancial statements of foreign operations, MergThe
merer rger resereservve compre in 2000 and the acquisition of 
                      Securises resericor plc bves arising upon the merythe
group in 2004.ger between the former Group 4 Falck A/S and the former 
                      Group 4 Securitas BV ReserAn emplove fyor own shares
performance share plan and perfee benefit trust established by the group 
                      holds 5,209,320 shares (2006:6,022,967 shares),to satisfy
the vesting of awards under the2,264,973 shares wormance-related and 
                      synergy bonus schemes.During the year 1,451,326 shares
were purchased by the trust,whilst £8,953,071 (2006: £9,435,828),ere 
                      used to satisfy the vwhilst the maresting of aket value
of these shares was £12,749,808 (2006:wards under the schemes.At 31 
                      December 2007,the cost of shares held by the trust wasas
treasuryshares,are deducted from equity,do not bear dividends and are 
                      excluded from the calculations of ear£11,323,178).Shares
held bnings per sharey the tr.ust are treated 

93

39 AAnalreconciliation of 
net debt to amounts in the 
consolidated balance sheet 
is presented beloysis of net 
debtw: 
                2007                   2007                             2006 
                 £m                     £m                                £m 
  Cash          381.3                 381.3                             307.5 
  and 
  cash 
  equiva- 
  entsIn- 
  estmen- 
  s 
  Net           73.2                   73.2                             73.7 
  debt 
  includ- 
  d 
  within 
  dispos- 
  l 
  groups 
  classi- 
  Bank 
  oied as 
  held 
  for 
  sale 
  (1.5) 
                     -                       -                             - 
  Ba-             (109.9)               (109.9)                          
(97.5) 
  k 
  lo- 
  ns- 
  er- 
  ra- 
  ts 
  Lo-             (809.7)               (809.7)                         
(900.4) 
  n 
  no- 
  es 
  Fair         (290.4)               (290.4)                               - 
  value 
  of loan 
  note 
  deriva- 
  ive f 
  Ob-    in-          1 4.3                 1 4.3                              
 - 
  ig-    nc- 
  ti-    al 
  ns  in- 
  un-    tr- 
  er  me- 
  fi-    ts 
  an- 
  e 
  le- 
  ses 
  To-             (62.2)                 (62.2)                          
(56.1) 
  al 
  net 
  de- 
  t 
               (804.9)               (804.9)                          (672.8) 
  An 
  analys- 
  s of 
  moveme- 
  ts in 
  net 
  debt in 
  the 
  year is 
  presen- 
  ed 
  below: 
                2007                   2007                             2006 
                 £m                     £m                                £m 
  Increase in cash,Purchase 
  of incash equivalents and 
  bank overdrafts per 
  consolidated cash flo 
  Increase in debt and lease 
  fvestments w statement 
                48.8                   48.8                             16.1 
                 0.3                   0.3 
  Change 
  in net 
  debt 
  result- 
  ng from 
  cash 
  floina- 
  cing 
  21.8 
  Bor  ws      (135.8)               (135.8)                           (86.7) 
               (86.7)                 (86.7) 
  Net 
  additi- 
  ns to 
  frowin- 
  s 
  acquir- 
  d with 
  subsid- 
  aries 
                  (48.8)                 (48.8)                        (48.8) 
               (22.9)                 (22.9)                            (2.5) 
  Moveme-             (10.3)                 (10.3)                          
(19.6) 
  t in 
  net 
  debt in 
  the 
  yinance 
  leases- 
  ar Tr 
               (119.9)               (119.9)                           (70.9) 
  Net          (12.2)                 (12.2)                            55.4 
  debt at 
  the 
  beginn- 
  ng of 
  the 
  yansla- 
  ion 
  adjust- 
  ents 
  Net 
  debt at 
  the end 
  of the 
  year 
  ear ear      (672.8)               (672.8)                          (657.3) 
               (804.9)               (804.9)                          (672.8) 
40Contin-       liabilitiesmal course of business,none of which are
individually or 
  ent    collectively significant. 
  liabil- 
  ties 
  exist 
  in 
  respect 
  of 
  agreem- 
  nts 
  entered 
  into in 
  the 
  norCon- 
  ingent 
  Details 
  of 
  unprov- 
  ded 
  contin- 
  ent tax 
  liabil- 
  ties 
  are 
  presen- 
  ed in 
  note 
  36. 

41 Operating lease arrangements

At the balance sheet dateThe group as lessee,the group had outstanding
commitments under non-cancellable operating 
leases,which fall due as follows: 
                                                                               
      2007  2006 
                                                                               
        £m    £m 
Within one yIn the second to fearifth y After five y                           
      95.6  72.4 
                           ears inclusive                                      
     185.8 140.2 
               Total operating lease commitmentsears                           
     148.2 130.4 
                                                                               
     429.6 343.0 
The group leases a nnegotiated over an avumber of its offerage termof eight and
a half yice properties,vehicles and 
other operears,at rates reflectivating equipment under operating leases.Leased
properties are in line with 
prevailing marvehicles and other operating equipment are negotiated oket
conditions.Some but not all lease 
agreements hae of marver an average lease terve an option to renew the lease at
the end of the lease terket 
rentals.Periodic rent reviews take place to bring lease rentalsm of three and a
half years.m.Leased 
CerThe total future minimtain leased properties haum sub-lease pave been
sub-let byments expected to be receivy the 
group.Sub-leases are negotiated on tered by the group from sub-let properms
consistent with those of the associated 
properties amount to £16.4m (2006: £18.3m).ty. 

94 Notes to the consolidated financial          (cont- 
   statements                                   nued) 
   42The group has  pa Securicor plc 
     twShare-based  shares and rolled 
                    oo types of 
                    equity-settled, 
             yments 
           ver to                               y 2004, and (2)                
          y 2004, and (2) 
           G4S plc                              conditional                    
          conditional 
           shares                               allocations                    
          allocations 
           with the 
           acquisit- 
           on of 
           that 
           bshare-b- 
           sed 
           payment 
           scheme in 
           place:(1) 
           share 
           options 
           previous- 
           usiness 
           on 19 
           July held 
           by 
           employees 
           over of 
           G4S plc 
           shares. 
           SharShare 
           options 
           rolled oe 
           options 
           under the 
           ESOS were 
           grver 
           from 
           Securant- 
           d at 
           maricor 
           plc fall 
           under 
           either 
           the Exket 
           value,ve- 
           t three 
           or four 
           yearecut- 
           vs fe 
           Share 
           Option 
           Scheme 
           (ESOS) or 
           the 
           Sharesave 
           Scheme.O- 
           tionscon- 
           itions 
           are met 
           and that 
           the 
           recipien- 
           s 
           continue 
           to be 
           employed 
           bollowing 
           the date 
           of grant 
           (provided 
           that 
           certain 
           non-mark- 
           t 
           performa- 
           ce 
           following 
           the date 
           of grant. 
           Options 
           under the 
           Inland 
           Rev 
                           y the group during the vesting period) and are
exercisable up to ten yearsvest 
                           after three years following the date of grant and
remain exenue-approercisabved 
                           Sharesale for a perviod of six months fe scheme were
granted at a discount of 20% 
                           to marollowing vesting.ket value, 
     Details of the share options 
     outstanding during the year are 
     as follows: 
                                                Weigh-            Weighted     
                            Weighted 
                                                ed 
                                          Numberavera-      Numberaverage      
                            average 
                                          of    e     of 
                                          sharesexerc-      sharesexercise     
                            exercise 
                                          under se    under 
                                          optionprice optionprice              
                      price 
                                                (penc-            (pence)      
                            (pence) 
                                                ) 
                                            2007  2007  20062006               
                      2006 
     Outstanding at 1 JanForfeited        3,912-      117.7315,37-      91.23  
                                  91.23 
     duruary                              990         ,443 
     Exercised                                  -- (249,061)70.50              
                      70.50 
     during the year 
     Expired durOutstanding at 31         (893,-      103.89(11,1-      82.22  
                                  82.22 
     Decembering the ying the yearear     20)         1,438) 
     (61,269) 
                                                 64.00(113,-      104.00       
                            104.00 
                                                      54) 
                                          2,957-      123.023,912-      117.73 
                                  117.73 
                                          901         990 
     Exercisable at                       2,957-      123.023,912-      117.73 
                                  117.73 
     31 December                          901         990 
     outstanding at 31 December 2007 wThe weighted average share price at the
date of exere vested.ercise for 
     share options exercised during the year was 197.85p (2006:174.56p).All
options No share option expense 
     has been recognised in the income statement during the year (2006: £1.4m)
as all share options had 
     previously vested. SharShares allocated conditionalles allocated
conditionallyy allocated conditionally 
     under the perffall under either the group'ors performance-related bonus
scheme or the group's Performance 
     Share Plan (PSP).Sharesperfmance-related bonus scheme vest three years
following the date of grant 
     provided certain non-market conditions are met as to twormance conditions
are met.Those allocated under 
     the PSP vest after three years,to the extent that (a) certain non-market
performancemet as to the 
     remaining third of the allocation (half fo thirds of the allocation (one
half for awards made pror awards 
     made prior to 2007).ior to 2007) and (b) certain market performance
conditions are 
     The number of shares allocated 
     conditionally is as follows: 
                        Performance-            Perfo- 
                                                mance- 
                              related           relat- 
                                                d 
                               bonus             bonus 
                              scheme   PSP Totalscheme   PSPTotal              
                      Total 
                                2007  2007  2007  2006  20062006               
                      2006 
                              Number Numb-     NumberNumberNumberNumber        
                           Number 
                                     r 
     Outstanding at 
     1 JanAllocated 
     dur 
       T   ing the y       1,915,270 11,1-     13,06-           -7,763-     
7,763,4-                                          7,763,4- 
           uareary                   4,403,673        419   9                  
                      9 
                              377,7254,35-     4,737- 
                                     ,350 075 
     Forfransferred 
     during the year 
                                                1,915-      3,716-     
5,632,0-                                          5,632,0- 
                                                270   815   5                  
                      5 
                           (311,218) (1,9-     (2,26- 
                                     3,75-     ,973) 
                                     ) 
     Expired dureited during the ying 
     the year 
                                                 ---                           
           --- 
                                    -(952-     (952,-           -(325,-     
(325,83-                                          (325,83- 
                                     469) 69)         31)   )                  
                      ) 
     Outstanding at                 -(1,1-     (1,14-           - --           
                            -- 
     31 Decemberear                  7,46-     ,460) 
                                     ) 
                           1,981,777 11,4-     13,44-      1,915-      11,15-  
   13,069,-                                          13,069,- 
                                     0,069,846  270   ,403  73                 
                      73 
     The wThe weighted aeighted avvererage remaining contrage share price at
the date of allocation of shares 
     allocated conditionallactual life of conditional share allocations
outstanding at 31 December 2007 was 16 
     months (2006:17 months). contractual life of all conditional allocations
was three years. 
                                          y during the year was                
    y during the year was 
                                          216.83p (2006: 185.14p) and          
    216.83p (2006: 185.14p) 
                                          the Under the                        
    and the Under the 
                                          PSPShareholder Retur,the             
    PSPShareholder Retur,the 
                                          vn(a maresting of twket              
    vn(a maresting of twket 
                                          perfo thirds of the shares           
    perfo thirds of the shares 
                                          allocated conditionallory            
    allocated conditionallory 
                                          (one half for awards made            
    (one half for awards made 
                                          prior to 2007) depends upon          
    prior to 2007) depends 
                                          Total upon the group's T             
    upon Total upon the 
                                                                               
    group's T 
                    mance condition) over the vesting year measured against a
comparator group. 25% of the 
                    allocation vestssubject to this marotal Shareholder
Returket performance condition has 
                    therefn equalling median perfore been reduced bormance
amongst the compary 75%.ator 
                    group.The fair value of the shares allocated 

95

42 Share-based payments (continued)

TSharotal expenses of £4.1m wes allocated conditionally (continued)calculation  
of which included an estimate of the nere recognised in the income statement in 
the year (2006:£3.6m) in respect of conditional share allocations,the based upon
the probable achievement against the perfumber of those shares allocated subject
to non-marormance conditions.ket performance conditions that would vest 43      
Related party transactions                                                      

TTrransactions and balances with joint vansactions between the company and its 
subsidiarenturies haves and associated undere been eliminated on consolidation
and are not 
disclosed in this notetakingstransactions between the group and other related
parties are 
disclosed below.All tr.Details of course of business. 
                    ansactions with related parties are entered into in the
normal 

                                                                              
Joint ventures Joint ventures                   Associat-         Associat- 
                                                                               
                                               s        s 
                                                                               
         2007          2006                         2007     2006 
                                                                               
           £m            £m                           £m       £m 
TRevransactionsenue 
                                                                               
         13.8          14.5                            - 
Amounts due from related parCreditors 
   ties                     ties 
   ties                       ties                                             
            -              -                         1.5      5.4 
 DebtorLoanss 
                                                                               
          0.7            1.4                           -        - 
                                                                               
          2.3            3.5                           -        - 
RevSTC (Milton Keynes) Ltd.enue relates to fees of £10.4m (2006:Amounts
ow£9.6m) charged to Bridgend Custodial Services Ltd and fees of £3.4m 
(2006:£4.9m) charged to are unsecured and will be settled in cash.ed bNo
expense has been recognised in the yy the group are to its associated 
undertaking Space Gateway Support LLC.The amounts outstandingrelated
parties.Details of principal joint ventures and associated undertakings are 
shoear fwn in notes 21 and 22 respectivor bad and doubtful debts in respect of
amounts oely.wed by 
TIn 2006,ransactions with Mr Jørgthe group purchased air tren Philip-Søransport
services of £19,300 and leased 
offensen,whilst a director (rice facilities fetiror £34,707 from Mr Jøred 30
June 2006)gen Philip-Sørensen at cost price. 
TDetails of trransactions with post-emplo amounted to £1.4m at 31 December 2007
(2006:ansactions with the group's yment 
benefit schemespost-emplo 
                          £1.5m).yment benefit schemes are provided in note
34.Unpaid contributions owed to schemes RemThe group'uneration of k 
                          whose remsunerkey management per ey mana 
ation is ation is determined bsonnel are deemed to be the non-ex 
determi-         gement personnel 
ed 
bsonnel 
are 
deemed 
to be 
the 
non-ex 
gement 
personn- 
l 
y the    y the            y the Remuneration Committee. Their remecutive
directoruneration is set out belos and those individuals,w.Furincluding 
Remuner-         Remuneration     the executive directors,remuneration of
individual director pages 41 to 44. 
tion     Committee. Their 
Committ-         remecutive 
e. Their directorunerati- 
remecut-         n is set out 
ve       belos and those 
directo-         individuals,w.F- 
unerati-         rincluding the 
n is set executive 
out      directors,remun- 
belos    ration of 
and      individual 
those    director pages 
individ-         41 to 44. 
als,w.F- 
rinclud- 
ng the 
executi- 
e 
directo- 
s,remun- 
ration 
of 
individ- 
al 
director 
pages 41 
to 44. 
s        s included       s included within key management                     
                ther information about the 
included within key       personnel is pro Report 
within   management 
key      personnel is pro 
managem-         Report 
nt 
personn- 
l is pro 
Report 
 on         on                                                    vided in the
audited part of the Directors'                   Remuneration 
                                                                               
                                                    2007     2006 
                                                                               
                                              £        £        £ 
ShorP 
Other long-terost-emplo 
t-term employment benefyee benefitsits                                         
                                                                            
4,869,3654,337,944 
                                                                               
                                                 343,443  826,777 
Share-based pam benefTotalymentits                                             
                                                  28,896   22,138 
                                                                               
                                               2,344,4122,022,518 
                                                                               
                                               7,586,1167,209,377 

44 AEv are pron                                                                 
   ents after the balance sheet dateumber of acquisitions w vided within note   
   17.ere effected after the balance sheet date,but before the financial        
   statements were authorised for issue,details of which On 7 March 2008 the    
   group signed committed bank facilities amounting to £350m.group can exercise 
   an option to extend the facilities to 30 June 2009.These facilities expire on
   31 December 2008,although the                                                

96 Notes to the consolidated financial statements                       (co-    
                                                                        tin-    
                                                                        ed) 
   45The companies listed     investments affected the group's results and  
     beloSignificant          net assets durw are those which wing the yere 
                              pareart of the group at 31 December 2007 and  
                              which,in the opinion of the                   
                              directors,significantlygroup as a whole..The  
                              directors consider that those companies not   
                              listed are not significant in relation to the 
     The principal activities of the companies listed below                 
     are indicated according to the following key:                          
     SecurCash serity                                                       
     servicesvices CS                                                       
     These businesses operate principally in the country in                 
     which they are incorpor ated. Product                                  
                                                                            
                                                    segment             seg-    
                                                                        ent 
     Subsidiar                                                              
     G4S SecurGroup 4 Secur                                                 
         y underity                                       S               S 
         Sertakingsvices AG                                                 
     G4S Cash Serity Services                             S               S 
     SA/NV                                                                  
     G4S Security Services                                C               C 
     (Canada) Limited                                                       
     G4S Security A/S                                                       
     Services                                                               
         A                                                S               S 
     G4S Cash Centres (UK) Limitedviation Security (UK)                   S 
     Limited G4S International UK Limited                                   
                                                          C               C 
     G4S Security Services                                S               S 
     (UK) Limited                                                           
     Group 4 Group 4                                      S               S 
     Technology Limited                                                     
     G4S SecurAS                                        S+C             S+C 
     G4S Sicherheitsdienste                              SS               SS
     GmbHicor SAS                                                           
     G4S Security Services                                                  
     (India) Pvt.                                                           
     G4S Security Services (Ireland) Limitedvices (Ireland)               C 
     Limited                                                                
     G4S                                                S S              S S
     SecurHashmiraCompanyLimi- 
     ed                                                                     
     G4S Security Serity Services (Kenya) Limited                       S+C 
     Group 4 Securicor Cash                               C               C 
     Services BV                                                            
     G4S Security AS                                                        
     Services                                                               
     al Majal Service Master                             SS               SS
     AS4                                                                    
     G4S Security Services (SA) (Pty) Limited                             S 
     G4S Security  ige) AB                                C               C 
     Ser                                                                    
         Youth Services LLCvices (Sverige) AB                             SS
     The Wackenhut Corporation                            S               S 
     J                                                                      
     STC (Milton Keynes)                                                    
     LimitedBr                                                              
     oint vidgend Custodial                             S S              S S
     Serentures (see note                                                   
     21)vices Limited 3                                                     
     Associated underSpace                                                  
     Gateway Supportakings                                                  
     (see note 22)t LLC                                                     
                                                          S               S 
      12 G4S Security Services (India) Pvt. Limited has a                   
         year end of 31 March. Safeguards Securicor Sdn Bhd                 
         has a year end of 30 June.4Bridgend Custodial                      
         Services Limited has a year end of 30 September.                   
     3                                                                      

of G4S SecurBy virtue of shareholder agreements,ity Serthe group has the power  
to govern the financial and operating policies the benefits from their          
activities.vices (India) Pvt.These are therefLimited,Safeguards Securore        
consolidated as full subsidiaricor Sdn Bhd and al Majal Series.vice Master,so as
to obtain                                                                       

Parent company balance sheet 9 7
At 31 December 2007             

                                                                           
2007     2006 
                                                                  Notes      
£m       £m 
FixTed assets 
Inangibvestmentsle assets 
                                                                  ( b)      
4.3      3.9 
                                                                   (c)  
2,214.9    587.5 
                                                                        
2,219.2    591.4 
CurDebtorrent assets 
Cash at bank and in hands 
                                                                  ( d)  
1,418.1  1,176.3 
                                                                            
9.7      7.7 
                                                                        
1,427.8  1,184.0 
CBank oreditors - amounts falling due within one yverdraft 
(unsecured)ear Borrowings (unsecured) 
                                                                          
(63.6)  (61.1) 
Other 
                                                                  ( e)    
(15.0)  (25.0) 
                                                                   (f) 
(2,141.2) (504.5) 
                                                                       
(2,219.8) (590.6) 
Net current (liabilities)/assets                                         
(792.0)   593.4 
Total assets less current liabilities                                   
1,427.2  1,184.8 
CrBoreditors - amounts falling due after mor 
Otherrowings (unsecured) 
                                    e than one year 
                                                                   (e)   
(962.4) (786.2) 
                                                                   (f)     
(4.8)   (0.3) 
                                                                         
(967.2) (786.5) 
Provisions for liabilities and                                     (i)     
(2.7)   (3.8) 
charges 
Net assets                                                                
457.3    394.5 
CaCalled up share capitalpital and 
reserves 
Share premium and reserves 
                                                                   37     
320.2    320.0 
                                                                   (j)    
137.1     74.5 
Equity shareholders' funds                                         (k)    
457.3    394.5 
The parent company financial statements were approved by the board of 
directors and authorised for issue on 7 April 2008. They were signed on 
its behalf by: Nick BucklesDirector 
                                     DirectorTrevor Dighton 

98 Notes to the parent company financial statements

(a) Significant accounting policies

The separBasis of prhistorical cost conate feparationinancial statements of the 
company are presented as required by the Companies Act 1985. They have been     
prepared under the Standards (UK GAAP).vention except for the revaluation of    
certain financial instruments and in accordance with applicable United Kingdom  
Accounting ExAs peremptionsmitted by section 230(3) of the Companies Act 1985,  
the company has not presented its own profit and loss account.                  
The companThe cash flows of the company has taken advantage of the exy are      
included within its consolidated femption from preparing a cash floinancial     
statements.w statement under the terms of FRS 1 Cash Flow Statements.           

of the groupThe compan.y is also exempt under the terms of FRS 8 Related P arty
Disclosures from 
disclosing related party transactions with other member s The consolidated
fConsequently the 
companinancial statements of the group contain fy has taken advantage of
certain exinancial 
instremptions in FRS 29 from the requirement to present separument disclosures
and comply with FRS 29 
Financial Instrate fuments:Disclosures. disclosures for the company. 
                                                            inancial instrument 
TT 
strangib 
 angib 
  aight-line basis ole f 
le fixixed assets are stated at cost net of accumed assets 
ver their expected economic life.ulated depreciation and 
anShory provision for impairment.Tangible fixed assets are 
depreciated on aand vehicles are depreciated over periods 
up to a maximum of ten yt leasehold properears.ty (under 50 
years) is depreciated over the life of the lease.Equipment 
FixFix 
indicatored asset in 
   ed asset in 
       s that the carvestments, 
                vestments 
rying value mawhich compry not be recoise investments in subsidiarverable.y
undertakings,are stated at 
cost and reviewed for impairment if there are Financial instrumentsFinancial
assets and financial 
liabilities are recognised when the group becomes a party to the contractual
provisions of the 
instruments. 

> External debtorsDebtors do not carry interest and are stated initially at     
  their fair value.                                                             

> Cash and cash equivalents      and     cash equivalentsise cash balances and
call deposits. 
  comprCash 
> InterInterest-bearest-bearing 
  bor 
  charges, including premiums paing bank 
  overdr 
                        roafts,wings 
  yabloans and loan notes are recognised at the value of proceeds receivle on
settlement or 
  redemption and direct issue costs,ed,net of direct issue costs.Financeaccrual
basis using the 
  effective interest method.are recognised in the profit and loss account on an 

> External crCreditorsare not interest-beareditorsing and are stated initiallyat
  their fair value.                                                             

> Amounts   owed to/from     to/from  subsidiary undertakings bear        
undertakingsket 
  oAmounts  subsidiarwed              interest at prevailing mary         
rates. 
> Equity instrumentsEquity instruments issued by the group are recorded at the
value of 
  proceeds received,net of direct issue costs. 
PrProo 
amount can be madevisions are 
recognised when the compan visions 
        .   y has a present legal or constructive obligation as a result of
past events and 
            a reliable estimate of the 

99

(a) Significant accounting policies (continued)

In accordance with its treasurDerivative financial instruments and hedgry
policy,the company only holds or 
issues dere accountingivative financial instruments to manage the group's
exposure to financial fixisk,not 
for trading purposes.Such financial risk includes the interest risk on the
group's variable-rate borrowings, 
the fair value risk on the group'sassets measured in fed-rate borrowings,oreign
curand foreign exchange 
rrencies,to the extent that these are not matched bisk on transactions,on the
translation of the group'y 
foreign currency bors results and on the translation of the group's net through
a range of derivative 
financial instruments, including interest rate swaps, fixed rate agreements,
forward frowings.oreign 
exchange contrThe company manages these racts andiskscurrency swaps. 
Derto fair value is recognised immediatelivative financial instruments are
recognised in the balance sheet 
as financial assets or liabilities at fair value.The gain or loss on
remeasurement hedge accounting, the 
treatment of any in the profy resultant gain or loss depends on the nature of
the item being hedged as 
descrit and loss account,unless they qualify for hedge accounting.Where deribed
beloivatives do qualify 
fw:or > 
     FThe change in the fair value of both the hedging instrair value hedge and
loss account. 
                                         ument and the related portion of the
hedged item is recognised 
                                         immediately in the profit 
 >   The change in the fair value of the porCash 

LeasesAssets held 
under f 
their useful economic lifinance leases are included as tangibe.The capital
element of future 
rentals is included within creditorle fixed assets at their capital value and
depreciated over 
the shorter of the lease term andover the period of the lease.s and finance
charges are allocated 
to accounting periods Annual rentals payable or receivable under operating
leases are charged or 
credited to the profit and loss account as incurred. FThe foreign cur
translated at the rinancial 
statements of the compan rencies 
ates of exchange prevailing on the dates of the try are presented in
sterling,its functional 
curansactions.At each balance sheet daterency.Transactions in currencies other
than sterling are 
denominated in other cur are denominated in other currencies are retrrencies
are translated at 
the ranslated at the rates prevailing on that dateates prevailing at the date
when the fair value 
was deter.Non-monetary assets and liabilities car , monetary assets and
liabilities which areried 
at fair value which measured at historical cost denominated in other cur 
                       mined. Non-monetary itemsand loss account.rencies are
not 
                       retranslated.Gains and losses arising on retranslation
are included in the 
                       profit 

TCuraxation 
by the balance sheet daterent tax is provided at amounts expected to be paid
(or 
reco.vered) using tax rates and laws that have been enacted or substantively
enacted 
Deftax is measured on a non-discounted basis at tax rerred tax is recognised in
respect 
of all material timing differences that have originated,but not reversed,by the
balance 
sheet date.Deferred on tax rates and laws enacted or substantiv 
                ates that are expected to apply in the periods in which the
timing 
                differences reverse based considered more lik be deducted. 
               ely than not in that there will be suitab ely enacted at the
balance sheet 
               datele taxable profits from which the future rev.Deferred tax
assets are 
               recognised where their recoersal of underlying timing
differences can very 
               is 

PThe companensions 
unable to identify its share of the schemes'y participates in multi-employer
pension 
schemes in the UK,which provide benefits based on final pensionable pay.The
company is 
schemethe compan.Details of the schemes are included in note 34 to the
consolidated 
fytreats the schemes as if they w assets and liabilities on a consistent and
reasonabere 
defined contribution schemes and recognises charle basis.In accordance with FRS
17 
Retirement Benefits, inancial statements. 
                          ges as and when contributions are due to the 

100 Notes to the parent company financial statements (continued)

(a) Significant accounting policies (continued)

The companShare-based paymentsof grant and expensed,y issues equity-settled 
share-based pawith a corresponding increase in equity on a stryments to certain 
emploaight-line basis oyees.The fair value of share-based paver the vyments is 
determined at the date the shares that will eventually vest. The amount
expensed is 
adjusted over the vesting period for changes in the estimate of the nesting 
period,based on the company's estimate ofthat will eventually vest,save for
changes 
resulting from any market-related performance conditions.umber of shares 
The fair value of share-based pafor future dividend receipts and fyments gror
any 
maranted in the fket-related perform of options is measured bormance
conditions.y 
the use of the Black-Scholes valuation technique,adjusted The companservices in 
exchange fy grants share options oor these options.ver its own shares to the 
employees of subsidiary companies.The company does not receive goods or
accounting 
entry upon gr 
      These are accounted for as a written call option on the entity's own
shares 
      and do not result in anpremium for new shares issued or to record a
reduction 
      in the treasurant.When the share options are subsequently exy shares
oercised 
      the resulting entrwned by the emploies are either to increase share
capital 
      and shareyee benefit trust. 

DividendsDividends are recognised as distr                                      
recognised but are disclosed in the notes to the consolidated fibutions to      
equity holders in the perinancial statements.iod in which they are              
declared.Dividends proposed but not declared are not Financial guaranteesThe    
compan such contracts as a contingent liability unless and until such time as it
becomes probaby enters into financial guarantee contracts to guarantee the      
indebtedness of other companies within the group.The company treatsunder the    
guarantee.le that the company will be required to make a payment                
Own sharTransactions of the companes held by employee benefit trust purchases of
shares in the company-sponsored employ are debited directlyee benefy to equityit
trust are included in the parent compan.y financial statements.In particular,the
trust's                                                                         

(b) Tangible fixed assets 
                               Land and  Equipme- 
                                         t 
                               buildings and      Total 
                                         vehicles 
                                     £m      £m    £m 
  CostAt 
Additions at cost1January 2007     3.0-    1.52.4  1.55.4Disposals 
  At 31 December 2007              3.0-  (0.6)3.3 (0.6)6.3 
   DeprAt 
  Char1ge fJan 
     eciationuar 
     or the yy 2007ear            (0.8)  (0.7)    (1.5)At 31 December 
                                                 
2007(0.2)(1.0)(1.0)(0.3)(2.0)(0.5) 
Net book value At 31 December     2.02.2   2.31.7  4.33.9 
2007At 31 December 2006 

The net book value of land and buildings comprises short leasehold buildings    
(under 50 years).                                                               

101

(c) The fFixed asset inollowing are included in the net book 
value of fvestmentsixed asset investments: 
  Subsidiary undertakings                                      Total 
                                                                £m 
  SharAt1es at cost: 
  AdditionsJanuary 2007                                      
587.5Disposals(1,566.0)3,- 
                                                              93.4 

                   At 31 December 2007                     2,214.9 
The increase in the carof the company's subsidiarrying value of subsidiaries in
which transfy 
undertakings in the year is mainly due to a reorganisation of the legal
structure in respect of 
some and the group are detailed in note 45 to the consolidated fers were
reflected at 
marinancial statements.ket values.Full details of significant investments held
by the parent 
company 

(d) Debtors 
                                                                               
   -            2006 
                                                                               
   - 
                                                                               
   - 
                                                                               
   7 
                                                                               
   -              £m 
                                                                               
   m 
   Amounts oOther debtorwed by group undertakings 
    Prepa                                  s                                   
   -         1,150.7 
                                                                               
   - 
                                                                               
   - 
                                                                               
   - 
                                                                               
   - 
                                                                               
   - 
                                                                               
   2 
                                                                               
   -            16.1 
                                                                               
   - 
                                                                               
   - 
                                                                               
   0 
   Derivativyments and accrued income                                          
   -             0.9 
                                                                               
   - 
                                                                               
   8 
   Total debtore financial instrsuments at fair value                          
   -             8.6 
                                                                               
   - 
                                                                               
   - 
                                                                               
   1 
                                                                               
   -         1,176.3 
                                                                               
   - 
                                                                               
   - 
                                                                               
   - 
                                                                               
   - 
                                                                               
   - 
                                                                               
   1 
Included within derivative financial instruments at fair value is £14.8m due
after more than one year 
(2006: £1.4m). See note (g) for further details. Included in other debtors is
£8.3m (2006: £6.5m) 
with regard to deferred tax comprised as follows: 2007 
                                                                               
   -            2006 
                                                                               
   - 
                                                                               
   - 
                                                                               
   6 
                                                                               
   -              £m 
                                                                               
   m 
   AccelerEmploated capital allowances                                         
   -             (0.3) 
                                                                               
   - 
                                                                               
   - 
                                                                               
   - 
                                                                               
   ) 
Changes in fair value of hedging deryee benefits,including equity-settled      
                9.0 
trivativesansactions and special pension contributions Total deferred tax 
                                                                               
   -             (2.2) 
                                                                               
   - 
                                                                               
   7 
                                                                               
   -             6.5 
                                                                               
   - 
                                                                               
   3 
  The reconciliation of deferred tax balances is as follows: 
                                                                               
   -            Total 
                                                                               
   - 
                                                                               
   - 
                                                                               
   - 
                                                                               
   l 
                                                                               
                 £m 
   AtCredited to prof1January 2007it and loss                                  
                6.9 
         At 31 December 2007 
          (e) The unsecured borBorrowings           (unsecurrowings are in the 
                                                    fed)ollowing currencies: 
                                                                               
   -            2006 
                                                                               
   - 
                                                                               
   - 
                                                                               
   7 
                                                                               
   -              £m 
                                                                               
   m 
       SterEuroling                                                            
   -            89.9 
                                                                               
   - 
                                                                               
   - 
                                                                               
   - 
                                                                               
   0 
      US dollar                                                                
   -           291.3 
                                                                               
   - 
                                                                               
   - 
                                                                               
   - 
                                                                               
   4 
           Total unsecured borrowings                                          
   -           430.0 
                                                                               
   - 
                                                                               
   - 
                                                                               
   - 
                                                                               
   0 
                                                                               
   -           811.2 
                                                                               
   - 
                                                                               
   - 
                                                                               
   - 
                                                                               
   4 

102 Notes to the parent company financial statements (continued)

(e) The paBorroyment (unsecurile of the unsecured      (continued)rowings is as
follows: 
profwings            bored) 
                                                                               
               2007  2006 
                                                                               
                 £m    £m 
RepaRepayyabable within one yle within two to feariv                           
               15.0  25.0 
Repayab 
                    e                                                          
              672.0 786.2 
                    - 
                    - 
                    - 
                    - 
                    s 
 Total unsecured borle after five yroearwingss                                 
              290.4     - 
                                                                               
              977.4 811.2 
 Undrawn committed facilities mature as follows: 
                                                                               
               2007  2006 
                                                                               
                 £m    £m 
  Within one yWithin two to fearive years                                      
               15.0   5.0 
  Total undrawn committed facilities                                           
              412.9 212.5 
                                                                               
              427.9 217.5 
Borat amorrowings consist of £687.0m of floating rate bank loans (2006:£811.2m)
and £290.4m of fixed rate 
loan notes (2006:£nil).Bank loans are stated believe the fair value of the
group'tised cost.Loan notes are 
stated at amors bank loans and loan notes,tised cost recalculated at an
effcalculated from marectivket pre 
interest rices,approate curximates to their book valuerent at the balance sheet
date..The directors 
Borrowing at floating rates exposes the company to cash flow interest rate
risk. The management of this risk 
is detailed in note (h). There were no financial liabilities upon which no
interest is paid. 

(f) Creditors 
                                                                               
              2007            2006 
                                                                               
                £m              £m 
                       Amounts falling due within one yTear: 
            Amounts orade creditorwed to group unders                          
               1.8             0.5 
                  Other taxation and social secur takings                      
           2,101.8            493.6 
Other creditors             ity costs                ity costs                 
               1.1             1.2 
Accruals and def                                                               
               9.6             4.2 
  Der                 erred income                                             
              12.1             4.0 
Total creditorivativefinancial instrs - amounts falling due within one yuments
at fair        14.8             1.0 
valueear 2,141.2 
                                                                               
                              504.5 
Amounts falling due after morDerivative financial instruments at fair valuee
than one 
year: 
                                                                               
               4.8             0.3 
           (g) The carDerivativrying values of dere           financ-      
instrumentsivative financial instruments 
                                                              al     at the
balance sheet date are presented 
                                                                     below: 
                                                                              
Assets      Liabilities           Liabilities 
                                                                               
 2007         2007            2006 
                                                                               
  £m            £m              £m 
          Forward fInterest roreign exchange contracts                         
   - 
Interest rate swaps designated as fair value hedgesate swaps designated as cash
flow hedges 
13.6 
                                                                               
                               0.9 
                                                                               
 2.8           6.0             0.4 
                                                                               
14.3             -               - 
Amounts falling due after more than one y Amounts falling due within           
17.1          19.6 
one year 
                                                               ear             
          -                     1.3 
                                                                               
          - 
                                                                               
          - 
                                                                               
          - 
                                                                               
          ) 
                                                                              
(14.8)          (4.8)          (0.3) 
                                                                               
 2.3          14.8             1.0 
DerThe marivativk to mare financial instrket valuation of the deruments are
stated at fair valueivatives has fallen 
b,based upon mary £9.8m durking the yet prices where aear.vailable or otherwise
on discounted cash flow valuations. 

103

(g) The interest rDerivative financial instruments 
(continate swaps which qualify as cash flow hedges 
haued)ve the following maturities: 
                                                           Assets Assets
Liabilit-          Liabilit- 
                                                                         es    
   es 
                                                             2007   2006     
2007      2006 
                                                               £m     £m       
£m        £m 
  Within one yIn the second year 
In the third y                                         ear    0.1 0.5         
0.1         - 
                                                              1.0 0.3         
0.9 
In the fIn the 
f 
otal carifth y 
                ourth year 
                                                                               
           - 
              ear                                             0.6 1.10.2      
1.1         - 
                                                              0.7             
2.2         - 
            T rying value of cash floearw hedges              0.4 0.2         
1.7       0.4 
                                                              2.8 2.3         
6.0       0.4 
Projected settlement of cash flows (including accrued interest) 
associated with derivatives that are cash flow hedges: 
                                                           Assets Assets
Liabilit-          Liabilit- 
                                                                         es    
   es 
                                                             2007   2006     
2007      2006 
                                                               £m     £m       
£m        £m 
  Within one yIn the second year                              1.7 1.3         
1.3         - 
  In the third yIn the fearear                                0.6 0.5         
2.8       0.1 
                                                              0.3 0.4         
1.4       0.2 
 In the fTotal cash floifth yourth yearear                    0.2 0.1         
0.5       0.1 
                ws                                              -      -       
 -       0.1 
                                                              2.8 2.3         
6.0       0.5 

(h) Financial risk

The group conducts bCurrency risk and fusiness in manorward fyoreign exchange   
contractssubject to foreign exchange risk due to the trcurrencies.anslation of  
the results and net assets of its fThe group presents its consolidated financial
statements in steroreign subsidiaries.The companling and it is in consequence   
substantial portion of the group's exposure to fluctuations in the translation  
into sterling of its overseas net assets by holding loans in fy therefore hedges
acurrencies.Translation adjustments arising on the translation of foreign       
currency loans are recognised in the profit and loss account.oreign             
The companon such fy enters into forward foreign exchange contracts so as to    
hedge group translation risk not hedged by way of loans.Gains and losses        
exchange controrward facts at 31 December 2007 was £373.2m (2006:oreign exchange
contracts are recognised in the prof£342.4m).it and loss account.All these      
contrThe notional value of outstanding forward foreignthey were replaced with   
new forward foreign exchange contracts.acts had matured by 29 February 2008,at  
which point                                                                     

InterBor 
limits approrowing at floating r 
  est rate risk and inter 
ved by the directorates as descrs.Interest 
ribed in note (e) exposes the compan est rate 
swaps 
ate swaps and, to a limited extent,y to cash floforward rw interest rate
risk,which the company manages 
within policyproportion of borrowings on a reducing scale over forward periods
up to a maximum perate 
agreements are utilised to fix the interest rate on a value of such
contraverage interest rate was 4.9% 
(US dollar) (2006:acts was £213.5m (in respect of US dollar) (2006:4.9%) and
3.8% (euro) (2006:£196.7m) 
and £183.6m (in respect of euro) (2006:iod of five years.At 31 December 2007
the nominal3.4%),and their 
weighted average per£141.5m),their weighted years. All the interest rate
hedging instruments are 
designated and fully effective as cash flow hedges and mo 
                                              iod to maturity was threedeferred
in equity.vements in 
                                              their fair value have been 

At the time of issue in March 2007,The US Private Placement market is           
predominantlthe company was comfy a fixed rorate martable with the              
proporket,with investors looking for a fixed rate return over the life of the   
loan notes.and therefore rather than take on a higher proportion of fixed rate  
debt arranged fixtion of floating red to floating swaps effate exposure not     
hedged bectively converting the fy interest rixed couponate swaps on the Prswaps
haivate Placement to a floating rate.Following the swaps the resulting average  
coupon on the US Private Placement is Libor + 60bps.These posted to profve been 
documented as fair value hedges of the US Prit and loss at the same time as the 
movement in the fair value of the hedged item.ivate Placement fixed interest    
loan notes,with the movements in their fair value                               

104 Notes to the parent company financial statements (continued)

(h) Financial risk (continued)

The companCounterpary's strty crategy fedit riskor credit risk management is to
set 
minimum credit ratings for counterparties and monitor these on a regular basis.
For 
treasurcalculated by-related tr of the transaction.y applying a w ansactions, 
        - 
        - 
        r 
        - 
        - 
        - 
        - 
        - 
        - 
        - 
        - 
        - 
        - 
        - 
        g 
        - 
        o 
        - 
        - 
        e 
        - 
        - 
        - 
        - 
        - 
        - 
        - 
        l 
        - 
        - 
        - 
        - 
        e 
        - 
        f 
        - 
        - 
        - 
        h 
        - 
        r 
        - 
        - 
        e 
        - 
        - 
        - 
        - 
        - 
        y 
        - 
        - 
        - 
        - 
        - 
        s 
        - 
        - 
        e 
        - 
        - 
        - 
        - 
        - 
        - 
        - 
        - 
        e 
        - 
        - 
        - 
        - 
        - 
        t 
        r 
        t-term transactions (under one year), the fansaction outstanding with
each 
        counter isk assigned to a counterparty. The utilisation of a credit
limit is 
        party based on the type and duration 
Standard inancial counterparty must be investment grade rated by either the 
& P 
Standard & Poor'oor's or Moody's or Moody's rs.ating agency.For long-term 
transactions,the financial counterparty must have a minimum rating of A+/A1
from 
Tlarreasurgest twy tro counteransactions are dealt with the companparty
exposures 
related to y's relationship banks all of which have a strong investment grade 
rating. At 31 December 2007 the credit ratings of AA and AA- respectively.These 
exposures represent 30% and 25% of the carTreasury transactions were £5.3m and
£4.4m 
and held with institutions with long terrying values of derivative fm Standard
& 
Poor'sbalance sheet date.inancial instruments at the 
The companbank.There is legal ry participates in the group'ight of set off
under the 
pooling agreement.s multi-currency notional pooling cash management system with
a 
wholly owned subsidiary of an AA rated 

           (i) Provisions for liabilities and charges 
                                                                  Onerous 
                                                                  contracts 
                                                                         £m 
         AtUtilisation of pro1January 2007visions                  (1.1)3.8 
       At 31 December 2007                                              2.7 
The onerous contrThe provision is based on the value of future net cash
outfloacts provision 
comprises a provision against future liabilities fws relating to rent,or all
properrates,service 
charties sub-let at a shorges and costs of martfall and for long-terketing the
properm idle 
properties.ties. 

(j) Share premium and 
reserves 
                                Share Profit and  Own 
                              premium loss       shares  Total 
                                      account 
                                  £m      £m       £m      £m 
AtRetained prof1January         10.3-    73.6    (9.4)   74.5 
2007it 
Changes in fair value of                137.4       -   137.4Shares issuedes 
hedging derivativ 
  Dividends declared            0.7 -   (24.1)-     --   (24.1)0.7 
  Own shares purchased        -Own shares        (3.1)- (59.3)(3.1) 
                              a-(59.3)- 
Equity-settled                     --  (3.5)4.1    3.5  -Tax on equity 
trwardedansactions                                      movements-6.9--4.16.9 
  At 31 December 2007           11.0    135.1    (9.0)     137.1 

(k) Reconciliation of movements in equity shareholders' funds for the year ended
31 December 2007                                                                

                                                                  2007   2006 
                                                                    £m     £m 
Retained profChanges in fair value of hedging derit/(loss) for   137.4       
(6.4) 
the yearivatives Shares issued 
                                                                 (24.1)  13.1 
Dividends declared                                                 0.9    9.1 
Own shares purchased                                             (59.3)     
(49.8) 
Equity-settled trTansactions                                      (3.1)      
(3.1) 
                                                                   4.1    5.0 
Net increase/(decrease) in shareholderax on equity                 6.9       
(2.2) 
movementsOpening equity shareholders'funds 62.8 Closing equity 
shareholders's'fundsfunds 
                                                                        428.8 
                                                                        (34.3) 
                                                                 394.5 
                                                                 457.3  394.5 

105

(l) At the balance sheet dateOperating lease commitments,the company had annual 
commitments under non-cancellable operating leases,which expire as follows:     
                                                                 2007 2006      
                                                                   £m  £m       
   Within one yIn the second to fear                              0.2 0.1       
After more than fTotal operating lease commitmentsivifth ye       0.5 00.8.7    
yearearss inclusive 0.8 1.5                                                     
                                                                      1.6       

(m) Auditor'Fees paid to KPMG s remuneration                                    
    company's consolidated fAudit Plc and its associates financial statements   
    are required to disclose such for non-audit services to the companees on a  
    consolidated basis.y itself are not disclosed in its individual accounts    
    because the                                                                 

(n) Staff costs and                                 
employees                                           
       2007     20-    20-    20-                  2006      
                7   7   7                           
      Number    Nu-    Nu-    Nu-          (Restated)Number  
                ber ber ber                         
The average monthly     178                171      
number of employees of                              
the company during the                              
year was:                                           
Total staff         em-                                
costs,including     lu-                                
directors'          en-                                
                    s,                              
                    we-                                
                    e                               
                    as                              
                    fo-                                
                    lo-                                
                    s:                              
       2007     20-    20-    20-                  2006      
                7   7   7                           
        £m       £m  £m  £m                 £m      
WSocial securages                                   
and salar                                           
P               ity 23-    23-                  22.0      
                co-    1   1                           
                ts                                  
                ies                                 
        2.0     2.0 2.0 2.0                1.9      
Total staff         1.1 1.1                1.3      
costsension costs                                   
       26.2     26-    26-    26-                  25.2      
                2   2   2                           
(o) The group has  o types of equity-settled,       
twShare-based      share-based payment scheme in    
                   place: (1) share options         
                   previously held by employees over
of G4S plc                                          
shares.ricor plc                                    
shares and rolled o                                 
of share-based                                      
payment charThe                                     
majorges                                            
applicabity of the                                  
shares under option                                 
are attr ver to G4S                                 
plc shares with the                                 
acquisition of that                                 
b                                                   
le to           le  le to                           
subsidiary      to  subsid-                                
under           su-    ary                             
takings.ibutab-                si-    under                           
herefle to      ia-    taking-                                
emplo           y   .ibuta-                                
                un-    Theref-                                
                er  e to                            
                ta-    emplo                           
                in-                                    
                s.-                                    
                bu-                                    
                ab-                                    
                he-                                    
                ef-                                    
                e                                   
                to                                  
                em-                                    
                lo                                  
usiness on 19   us-    usiness                         
Jul             ne-    on 19                           
                s   Jul                             
                on                                  
                19                                  
                Jul                                 
ore all         ore ore all disclosures relevant to 
disclosures     all the companyees of the compan y  
relevant to the di-    2004,y,hoand (2) conditional    
companyees of   cl-    allocations wever the compan y  
the compan y    su-    are presented within notey bears
2004,y,hoand    es  the full cost42 to the          
(2) conditional re-    consolidated financial          
allocations     ev-    statements.                     
wever the       nt                                  
compan y are    to                                  
presented       the                                 
within notey    co-                                    
bears the full  pa-                                    
cost42 to the   ye-                                    
consolidated    s                                   
financial       of                                  
statements.     the                                 
                co-                                    
                pan                                 
                y                                   
                20-                                    
                4,-                                    
                ,h-                                    
                and                                 
                (2)                                 
                co-                                    
                di-                                    
                io-                                    
                al                                  
                al-                                    
                oc-                                    
                ti-                                    
                ns                                  
                we-                                    
                er                                  
                the                                 
                co-                                    
                pan                                 
                y                                   
                are                                 
                pr-                                    
                se-                                    
                ted                                 
                wi-                                    
                hin                                 
                no-                                    
                ey                                  
                be-                                    
                rs                                  
                the                                 
                fu-                                    
                l                                   
                co-                                    
                t42                                 
                to                                  
                the                                 
                co-                                    
                so-                                    
                id-                                    
                ted                                 
                fi-                                    
                an-                                    
                ial                                 
                st-                                    
                te-                                    
                en-                                    
                s.                                  

(p) TConting At 31 December 2007 guaro help secure cost eff ent                 
liabilitiesective f antees totalling £377.4m (2006:inance facilities for its    
subsidiaries,£315.4m) wthe companere in place in suppory issues guarantees to   
some of its ft of such facilities.inance providers.                             
The companunpaid debts in this connection.y is included in a group registrThe   
liability of the UK group registration for UK VAT purposes and is therefation at
31 December 2007 totalled £18.2m (2006:ore jointly and severally liable for all 
other UK group companies'£18.8m).                                               

106 Group financial record

                     Presented
                       under  
                     the then  
Presented under IFRS UK GAAP  

£m                             2007    2006          2005           2004       
        2003 
RevPro-                            4,490.4   4,036.8        4,045.7          
3,093.6       2,569.5 
enue 
     intangibit before interest,le assets and exceptional
itemstaxation,amortisation of 
     acquisition-relatedProfit/(loss) after taxation312.1274.4255.0165.5118.4
Profit/(loss) attr 
                              160.6   109.9          90.7             (65.4)   
      (3.2) 
Non-curNet assetsrent         147.2   1,946.296.5    1,966.780.8      
1,876.0(72.3) 693.6(9.7)2,148.3 
assetsibutable to 
shareholders 
Net                         1,123.0   971.5         969.9          909.9       
       323.6 
debt 
Net                          8 04.9   672.8         657.3          586.4       
       382.4 
debt/e- 
uity 
(%) 
Return on net assets (%)         72      69            68             64       
         118 
(profit/(loss) after 
taxation/net assets) 
Adjusted earnings per 
ordinar 
                                 14      11             9                 (7)  
       (1) 
Divid-       y share (pence)        13.4p   12.1p         11.2p           9.5p 
              8.0p 
nds f 
Average headcount (nor the    4.96p   4.21p         3.54p          1.85p       
       0.46p 
year per ordinarumber)y 
share (pence) 507,480 
                                    440,128       395,771        306,313       
     230,472 
on 19 JulThe fiveyy 2004.ear record comprAfter that dateises onl,the record
reflects the results of the combined 
bythe results of the security businesses of the forusinesses.mer Group 4 Falck
A/S up to the acquisition of 
Securicor plc The fthe 2007 figures presented financial statements which haor
2003 are in accordance with the then 
UK GAAPvebeen prepared under IFRS relate to:.The main adjustments that would be
required to make them consistent 
with 
(a)(b)the non-amortisation 
of goodwill 
(c) the recognition of separthe recognition of the funding balances fable or
contractual intangible assets on a 
business combination(d)the recognition of a charor each retirement benefit
scheme (e)(f)the accounting treatment 
of joint vge to income in respect of share options grentures under the
proportionate consolidation method 
rantedather than the gross equity method of accounting (g) the recognition of
all derivative financial instruments 
at fair value(h)the recognition of all taxable temporary timing differences
between the accounting base and tax 
base of assets and liabilities (i) 
      dividends being prothe reclassifvided for in the year in which they are
declared(j)the reclassification of 
      cerication of securtain contrities held bacts as fy the group'inance
leases rs captivather than opere 
      insurance companies as a component of net debtating leases 

Notice of Annual General Meeting 1 07

Notice is hereb29 May 2008 at 2.00 pm.y given that the Annual General Meeting
of G4S plc will be held at Ironmongers' 
Hall, Barbican, London EC2Y 8AA on Thursday, Resolutions 1 to 7 will be
proposed as ordinary resolutions. Resolutions 8 
to 10 will be proposed as special resolutions. 1 
  To receive the financial statements of the Company for the year ended 31
December 2007 and the reports of the directors 
  and auditor thereon. 2 
  To receive and approve the Directors'Remuneration Repor t contained in the
financial statements for the year ended 31 
  December 2007. 3 
  To confirm and declare 
  dividends. 
4 To re-elect Grahame Gibson,a 
  director who is retiring by 
  rotation. To re-elect Bo 
  Lerenius,a director (and member 
  of the Audit and Remuneration 
  Committees) who is retiring by 
  rotation. 
5 
6 at which accounts are laid befTo re-appoint KPMG Audit Plc as auditor of the
Companore the shareholders,and to authory 
  from the conclusion of this meeting until the conclusion of the next generise
the directors to fix their 
  remuneration.al meeting (“the 1985 That the directorAct”) to exs be and are
herebercise all the poy generwers of the 
  Companally and unconditionally to allot relevant secury authorised in
accordance with section 80 of the Companies Act 
  1985 
7 
  aggregate nominal amount of £106,500,000 proMeeting in 2009,savethat the
Companyshall be entitled to makvided that the 
  authoreoffity herebers or agreements befy given shall expire on the date of
the Companities (as defined in section 
  80(2) of the 1985 y's AnnAct) up to anual General or agreement as if this
authorrequire relevant securities to be 
  allotted after such expirrevoked.ity had not expired;and all unexpired
authoryand the directorities grs shall be 
  entitled to allot relevant secur ore the expiry of such author 
             anted previousl      ities pur ity which wsuant to     ities pur
ity which wsuant to anould or mighty such 
                                  anould or mighty such offer y to  offer y to
the directors 
                                  the directors 
  and are to allot relevant        to allot relevant securities be            
to allot relevant securities be 
  hereby  securities be 
8 of the 1985 That the directorAct) fs be and are herebor cash as if section
89(1) of the 1985 y granted, pursuant to 
  section 95 of the 1985 Act did not apply to such allotment,Act,power to allot
equity securprovided that this poities 
  (as defwer shall be limited to:ined in section 94(2) the allotment of equity
securshares on the register of memberities 
  in connection with a r 
  (i) 
        to the interests of the 
        ordinary shareholders at 
        such record dates as the 
        director ights issue, open 
        off 
          s are proportionate (as 
          nears ma 
             er or other off 
            ly as may detery be) to the respectivmine where the equity secur er
of securities in favour of the holder 
          e numbers of               e numbers of ordinarities respectivy
shares held orely attr s of ordinaributable y 
          ordinarities respectivy 
          shares held orely attr s 
          of ordinaributable y 
        or expedient to deal with treasurdeemed to be held bythem on anysuch
record date,subject to such exclusions or 
        other arrangements as the directors may deem necessaryor the
requirements of an ; and 
          y regulator y shares,y body or stock exchange or bfractional
entitlements or legal or practical problems 
          arising under the laws of any overseas territory matter whatever 
                      y virtue of shares being represented by depositary
receipts or any other (ii) 
        the allotment (otherwise than purvalue of £16,000,000;suant to
sub-paragraph (i) above) to any person or persons 
        of equity securities up to an aggregate nominal 

agreements befand shall expire on the date of the Company's Annual General      
Meeting in 2009 save that the Company shall be entitled to make offbe           
authorentitled to allot equity secur ore the expiry of such po                  
ities granted previously to the directorities pursuant to an wer which w        
s under section 95 of the 1985 y such off ould or might require equity securer  
or agreement as if the poities to be allotted after such expir Act be and are   
herebwer confery revred hereboked.yhad not expired; y and the directorers orand 
all unexpireds shall                                                            

9 of the 1985 That the CompanAct) of ordinary be and is herebyshares of 25p
each in the capital of 
  the Company generally and unconditionally authorised to makyprovided that:e
market purchases 
  (within the meaning of Section 163(3) the maximum number of shares which may
be purchased is 
  128,000,000; 
  (i) 
  (ii)    the minimum price which may 
          be paid for each share is 
          25p; the maximordinary share 
          in the Companum price which 
          mayy as derbepaid fived from 
          or each share is an amount 
          equal to 105% of the aThe 
          London Stock Exchange Daily 
          Offverage of the middle 
          market quotations for an 
  (iii) 
          the day on which such share   icial List for the five business days
immediately preceding 
          is contracted to be           purchase of shares the contrthis
authority shall expire at 
          purchased; and (iv)           the conclusion of the after such
expiry). 
                                       act for which was entered into bef
Annual Generore the 
                                       expiral Meeting of the Company of this
authory to be held in 
                                       2009 (except in relation to theity and
which might be 
                                       executed wholly or partly 

108 Notice of Annual General Meeting 
    10                                           entitled That the
Compan“Amendments 
                                                 to y's articles of association
be 
                                                 amended with effArticles”(a
copect 
                                                 from 1 October 2008 in
accordance 
                                                 with the contents of the
document y 
                                                 of which has been produced to
the 
                                                 meeting and initialled by the 
                                                 chairman for the purposes of 
                      identification). 
      By order of the board PSecretareter David 
    7 April 2008y 
                                                 The ManorManor Ro The
ManorManor Ro 
                                                 CrayalWest Sussex    yalWest
Sussex 
                                                    RH10 9UNwley      RH10
9UNwley 

Notes                                                                           
(a) The Company's issued share capital as at the date of this notice is         
1,281,190,738 ordinary shares with voting rights. (b) A member entitled to      
attend, speak and vote at this meeting may appoint one or more persons (who need
not be members of the Company) to exercise all or any of his rights to          
attend,speak and vote at the meeting. A member can appoint more than one proxy  
in relation to the meeting, provided that each proxy is appointed to exercise   
the rights attaching to different shares held by him.Completion and submission  
of the proxy form will not preclude the member from attending and voting at the 
meeting or any adjournment thereof.If a member attends the meeting in person,   
the authority of the proxies will be terminated automatically.In order to be    
valid, forms appointing proxies must be deposited at the office of the Company's
registrar by 2.00 p.m. on 27 May 2008.                                          
(c) haTo have his name entered on the register of ordinarve the right to attend 
and vote at the meeting (and also fy shares by no later than 5.30 pm on 27 Maor 
the purposes of calculating how many votes a person may cast),a person must time
shall be disregarded in determining the rights of any person to attend or vote  
at the meeting.y 2008.Changes to entries on the register after this (d) section 
146 of the Companies A copy of this notice has been sent fAct 2006 (“Nominated  
Por information only to perersons”).sons who haThe right to appoint a prove been
nominated bxy cannot be exy a member to enjoercised by a Nominated Py           
information rights under onlhe was nominated to be appointed as a proy be       
exercised by the member.However,a Nominated Person may have a right under an    
agreement between him and the member berson;y whomit can a r                    
      xy for the meeting or to have someone else so appointed. If a Nominated   
      Person does not have suchvoting right or does not wish to                 
      exights.Nominated Persons should contact the registered member bercise    
      it,he may have a right under such an agreement to givy whom they were     
      nominated in respect of these are instructions to the member as to the    
      exrangementercise ofs.                                                    

(e) In order to facilitate vshareholder has appointed the chairoting
bycorporate representatives at the 
    meeting,arrangements will be put in place at the meeting so that (i) if a
corporate 
    directions of all of the other corporate representativman of the meeting as
its cores for that 
    shareholder at the meeting,porate representative with instructions to vote
on a poll in accordance 
    with thevoting directions to the chairman and the chairman will vote (or
withhold a vote) as corthen 
    on a poll those corporate representatives will give and (ii) if more than
one cornot appointed the 
    chairman of the meeting as its corporate representative for the same
corporate representativporate 
    shareholder attends the meeting bporate representative in accordance with
those directions;e,a 
    designated corporate representativut the core will be nominated,porate
shareholder has corporate 
    representatives who attend, who will vote on a poll and the other corporate
representatives will give 
    v 
                                            from thosecorporate
representative.Corporate shareholders are 
                                            referoting directions to that
designated on prorepresentation 
                                            letter if the chairxies and
corporate representativman is 
                                            being appointed as descres -
www.icsa.org.uk - fred to the 
                                            guidance issued bor fury the
Institute of Chartered 
                                            Secretaries and Administratorsibed
in (i) abother details of 
                                            this procedureve..The guidance
includes a sample form of 

(f) By attending the meeting, a member expressly agrees that he is requesting   
    and willing to receive any communications made at the meeting. the sale or  
    trIf the addressee of this notice has sold or transfer was effected so that 
    it can be passed on to the purchaser or transferred all of his shares in the
    Companansfy,ereethis notice should be passed to the per.son through whom    
(g)                                                                             

109

Notes (continued) 
(h) managerIf you are in an,solicitory doubt about the contents of this
document,,accountant or other 
independent professional adviser authoror the action you should takised
pursuant to the Financial Sere,you 
should immediatelvices and Mary consult your stockbrokkets Act 2000.er,bank (i) 
    the procedures descrCREST members who            sonal Members or other
CREST sponsored members, and those 
    wish to appoint a proibed in the CREST           CREST members constitutes
theas to be receiv 
    Manxy or proual.CREST Pxies bery 
    utilising the CREST electronic proxy 
    appointment service may do so by 
    utilising who hav appropr e appointed 
    a voting service provider(s), should 
    refer to their CREST sponsor or voting 
    service provider(s), who will be able 
    to take the (a “CREST Proiate action 
    on their behalf.xy Instruction”) must 
    be properIn order for a prolxy 
    appointment made by means of CREST to 
    be valid,the appropriate CREST message 
    the information required for such 
    instructions, as descry authenticated 
    in accordance with Euroclear UK & 
    Ireland Limited'ibed in the CREST 
    Manual.The message regardless of 
    whether its specifications and must 
    contain appointment of a proxy or an 
    amendment to the instruction given to 
    a previously appointed pro 
    meeting. For this pured by the Compan 
                                                     xy must, in order to be
valid, be transmitted so pose, 
                                           y's agent (ID number - RA10) by the
latest time for receipt of proxy 
                                           appointments specified in this
notice ofApplications Host) from 
                                           which the Companthe time of receipt
will be taky's agent is aben to 
                                           be the time (as deterle to retrieve
the message bmined by enquiry 
                                           the timestamp applied to the message
by to CREST in the manner 
                                           prescry the CREST Company may treat
as invalid a CREST Proxy 
                                           Instruction in the circumstances set
out in Regulation 35(5)(a) of 
                                           the Uncertificated Securibed by
CRESTities.TheRegulations 2001. (j) 
    ArCopies of the ar be 
    aticles”vailabrefle fer 
    ticles of association of the Company marked up to show the proposed changes
and the document entitled 
    “Amendments to or inspection at the place of the red to in Resolution 10
are availabAnnle on the Companual 
    General Meeting fy's wor at least 15 mineb site (www.g4s.com),utes befat
the Companore and during the 
    meeting.y's registered office and will also (k) shareholderIt should be
noted that the Company's w in 
    relation to the meeting or otherwises.Neither the web site nor an eb site
address is given in this notice 
    solely for the purpose of providing access to information for 
                                                   . y e-mail address referred
to on it may be used by 
                                                     shareholders or others to
give notice to the Company 

110 Recommendation and explanator conducted at the Annual General Meeting on 29
May notes relating to 
    by 2008usiness to be 
    The board of G4S plc considerand are in the best interests of its 
    shareholders the resolutions set out in the Notice of s as a whole. 
    The directors unanimouslAnnual Genery recommend that memberal 
    Meeting are likely to promote the success of the Compans vote in 
    favour of the resolutions asy they intend to do in respect of their 
    own beneficial holdings. Explanatory notes in relation to cer tain 
    of the business to be conducted at the meeting are set out below: 1 
         AtAuthority to 1985 the last Act”) to allot ordinarAGM of the 
         Compan Allot Shares (Resolution 7)y,held on 31 May 2007,the 
         directors were given authority under section 80 of the 
         Companies Act 1985 (“the 
         33% of the Company's then issued ordinary shares in the capital of the
Company share 
         capital.This authory up to a maximity was granted fum nominal amount
of £105,500,000 
         representing approor a period ending on 1 May 2012.ximately The 1985
such authorAct provides 
         for such authority to be granted either by a company in general
meeting or by the articles of 
         association,and in both cases authority be renewity must be renewed
annualled at least every 
         five years.Notwithstanding the statutory provisions,institutional best
practice indicates that 
         thisissued share capital.y and that the authority be limited to the
lesser of the authorised 
         but unissued share capital and one third of the 
         Accordinglup to a maximy,the board considerum nominal amount of
£106,500,000,s it appropriate 
         that a furrepresenting a little less than one-third of the Companther
similar authority be 
         granted to allot ordinary shares in the capital of the Company 7 April
2008, during the period 
         up to the conclusion of the next AGM in 2009. 
                                                                         y's
issued ordinary share 
                                                                        
capital as at 
         The intention of the directorthe Company's shares.The directors is to
allot shares upon the 
         exs do not have any other present intention of exercise of options
granted oercising this 
         authorver Securicor plc shares and rolled oity.ver into options over
The Companpage 92 (note 
         37 to the consolidated fy does not hold any treasurinancial
statements) are accounted fy 
         shares as such.However,the 5,209,320 shares held within the emploor as
treasury shares.yee 
         benefit trust and referred to on 

2 Resolution 8 will empoDisapplication of Pr connection with a rights or similar
  issue and (b) (otherwise than in connection with a rwer the director          
  e-emption Rights (Resolution 8)s to allot ordinary shares in the capital of   
  the Compan ights issue) up to a maximy for cash on a non pre-emptivum nominal 
  value of £16,000,000,e basis (a) inrepresenting appro that this authority     
  should be renewximately 5% of the issued ordinared annually.y share capital of
  the Company as at 7 April 2008. Again, institutional best practice suggests   

3 Resolution 9 givPurchase of Own Shar nshare capital as at 7 umber of shares   
  which could be purchased to a maximes the Compan                              
  es (Resolution 9)y authority to buy back its o April 2008) and sets minimum   
  and maximum of 128,000,000 (representing a little wn ordinary shares in the   
  market as per um prices. This authority will expire at the conclusion of the  
  less than 10% of the Compan mitted by the 1985 Act. The author AGM in 2009.y's
  issued o ity limits therdinary                                                

The directorresources of the Compans 
have no present intention of ex that 
to do so w 
                y,the Company's share pr ercising this authorice and future
funding 
                oppority,but will keep the matter under review,taking into
account the 
                financial pursuant to the equivalent authorould result in an
increase in earity 
                granted to the directornings per share and ws at the Companould
be in the 
                interests of shareholder tunities. The authority will be ex 
                       y's last AGM. s gener ercised onlally.No shares wy if
the directere 
                                     purchasedors believe 

111

4 The CompanAmendment of 
  or will come,y proposes 
  to amend its ar 
      Articles 
      (Resolution 10) 
      into effect in 2007 and 2008.ticles of association to reflect the proAs
the 2006 Act will 
      not be fully in fvisions of the Companies orce until October 2009,Act
2006 (the and it is 
      not y“2006 et possibAct”) which camele fully to reflect,the 2006 The pr 
      Act changes, it is anticipated that shareholders will be asked to approve
further changes 
      to the ar ticles of association at the 2009 AGM.transferincipal changes
to the ars of 
      shares and directors'ticles of association proposed to be made fconflicts
of 
      interest.ollowing the 2008 AGM relate to shareholder meetings and
resolutions, The 
      proprovisions of the 1985 visions of the 2006 Act. The new arAct
regarding shareholder 
      meetings and resolutions came into fticles incorporate amendments in
relation to meetings 
      and resolutions to ensure consistency with orce in October 2007,
replacing the 
      corresponding the 2006 Act. From 1 October 2008,interest which
conflicts,under the 2006 or 
      possibly may conflict,Act a director has a statutorwith the company's
interests.y duty to 
      aThe 2006 void a situation where he has,Act allows directoror can have,a
direct or 
      indirect conflicts or potential conflicts where the articles of
association contain a 
      provision.vision allo 
                          s of public companies to authorisenew articles of
association should 
                          include such a prowing this authorisation.It is
proposed that the 
                          Company's 

The principal changes to the articles of association can be summarised as
follows: 
(a) Under the 2006 Transfer of shar 
 transfer. Any registrAct, 
              es (ar 
         ation of a tra compan 
                 ticle 40)y m 
ansfust either register a trer or notice of refusal mansfer or give the
transferee notice of,and 
reasons for,its refusal to register thefrom the date that the transfer is
lodged with the company.ust 
be made or givReasons fen as soon as practicable and in any event within two
months transferee. The 
revised article will reflect these requirements. 
                                       or refusal must also be provided if a
reasonable request is 
                                       made by the 

(b) The proDisclosurvisions relating 
to the disclosure of interests in 
shares contained in the 1985 e of 
interests (article 48) pow 
                                       Act, including section 212 on company
investigationcompaners, 
of section 212 of the 1985 y in were 
repealed in Janvestigation poweruar 
Act with section 793 of the 2006 s 
previousl y 2007.y contained in 
section 212,Section 793 and related 
sections in P Act. were brought into f 
art 22 of the 2006 orce 
simultaneouslAct,which contain the 
cory.Article 38 reflects the 
replacementresponding 

(c) The proNotice of gvisions in the revised areneral meetings (article 57)     
meetings are in line with the relevant proticles dealing with the convisions of 
the 2006 vening of generAct.In particularal meetings and the length of notice   
required to convene generalto consider a special resolution can be convened on  
14 days'notice whereas previousl,a general meeting (other than the anny 21      
days'notice was required.ual general meeting)                                   

(d) The arQuorum (ar porticle 
has been amended to mak ticle 
70) cor 
      ate can constitute a   e it clear that two persons who are proxies for
the same 
      quorum.                member or representatives of the same body 

(e) The (ar conferred on a proticle has been amended to a 
arPolls 
         ticle 78) 
        xy to demand a poll in varvoid any potential conflict with the proious 
        circumstances.visions of section 329 of the 2006 Act which details the 
        rights 

(f) Under the 2006 Votes of members,Act,proxies are entitled to vproxies and
corporate rote on a shoeprw 
of hands as wesentatives (articles 90 and 99) anthe ry of their rights attached
to a diffights to 
attend,erent share or shares.speak and vote at meetings.The amendments reflect
these new proMultiple 
proxies maell as on a poll,y be appointed proand members may appoint a proxy to
exercise all orxy rights 
(arvided that each proticle 90).The 2006 xy is appointed to exercise multiple
corporate representatives to 
be appointed and the articles therefore refer to the right to appoint m 
                                                  Act also provides for(article
99).ultiple corporate 
                                                  representatives 

(g) The arReceipt            of                      aticle pro s, or such 
                                                     shorvides that pro 
        ppointments of pr 
                 ter time  ter time as the           ter time as the
directorxies f 
                 as the    directorxies f 
                 director- 
                 ies f 
                 oxy and   oxy and termination of                         oxy
and 
                 terminat-          proxy authority (article                   
   terminat- 
                 on of     93) 24 hour                                    on of 
                 proxy                                                    proxy 
                 authority                                               
authority 
                 (article                                                
(article 
                 93) 24                                                   93)
24 
                 hour                                                     hour 
                 or a poll or a poll to be taks may                       or a
poll 
                 to be     deteren after the date of                      to be 
                 taks may  a meeting or                                   taks
may 
                 deteren   adjourmine,before the                         
deteren 
                 after the time of the poll.ned                           after
the 
                 date of a meeting must be received                       date
of a 
                 meeting   not less than                                 
meeting 
                 or                                                       or 
                 adjourmi-                                                     
   adjourmi- 
                 e,before                                                
e,before 
                 the time                                                 the
time 
                 of the                                                   of
the 
                 poll.ned                                                
poll.ned 
                 meeting                                                 
meeting 
                 must be                                                  must
be 
                 received                                                
received 
                 not less                                                 not
less 
                 than                                                     than 
               (h) The arAvailability                of 
to circumstances beyticle provides that proceedings at shareholder's meetings
will 
not be invalidated as a result of an y's expensey,accidental omission or the 
failure duefacilities for appointing proxies.The 
appoint proxies.           ond the Company's control ond the Company's control
to 
                           to send or make available send or make available to 
                           to shareholders           shareholders appointments
of 
                           appointments of proxy or  proxy or invitations to 
                           invitations to 

112 Recommendation and explanator conducted at the Annual General Meeting on 29 
    May notes relating to by 2008 usiness to be(continued)                      

4 Amendment of Articles (Resolution 10) (continued)

(i) The 2006 Directors' aAct sets out directorppointments,s'generinteral duties
which larests and conflicts of 
    intergely codify the existing laest (articles 127,127A and 132) 
    1 October 2008 a director has a statutory duty to avoid a situation where
he has,w but with some 
    changes.Under the 2006 Act, from or possibly may conflict, with the
company' 
                                              or can have, a direct or indirect
interest which conflicts, 
                                              director of another compan 
                                            s interests. The requirement is
very broad and could apply, for 
                                            example, if a director becomes aand
potential conflicts where 
                                            appropry or a trustee of another
organisation.The 2006 Act allows 
                                            directors of public companies to
authorise conflicts to contain 
                                            other provisions for dealing with
directoriate,if the articles of 
                                            association contain a
pros'conflicts of interest to avoid a breach 
                                            of dutyvision to this eff.ect.The
2006 Act also allows the articles 
                                            Aran offticle 127,icer of or
emplowhich is the proyvision for 
                                            dealing with conflicts in the
current articles,allowing directors 
                                            to be interested in transactions
and to be such interests, offices 
                                            or emploed by or interested in a
body coryment will not infringe 
                                            the conflicts duty as codifporate
in which the Companied in the 
                                            2006 y is interested,Act.has been
amended so that it confirms that 
                                            New arincludes other proticle 127A
givvisions to alloes the 
                                            directorw conflicts of interest to
be dealt with in a similar was 
                                            authority to approve conflict
situations including other directory 
                                            to the current position.ships held
by the Company's directors and 
    There are safwho haeguards which will apply when directors decide whether
or not to authorise a conflict or 
    potential conflict.First,only directors directorvs me no interest in the
matter being considered will be 
    able to take the relevant decision and,secondly,in taking the decision
theimpose limits or conditions when 
    giving authorust act in a way they consider,in good faith,isation if they
think this is approprwill be most 
    likely to promote the Companiate.y's success.The directors will be able to 
    The proposed new arboard papers to protect a director from being in breach
of duty if a conflict of 
    interest or potential conflict of interest article 127A also contains
provisions relating to confidential 
    information,attendance at board meetings and availability of will only
apply where the position giving rise 
    to the potential conflict has previously been authorised by the directors. 
                                                                               
         ises. These provisions 
    The proposed amendment to quorum will be       This will mean that 
    determined separArticle 132,ately in 
    relation to each matter or resolution 
    considered or vwhich deals with the 
    quorum requirement for board 
    meetings,oted on at the meeting.clarifies 
    that the presence of a if a director 
    cannot count in the quorum for a 
    particular resolution (because f he may 
    still count in the quorum for the other 
    resolutions to be voted on at the 
    meeting.or example he is interested in 
    the outcome of the resolution) (j) 
    PArermitted interticle 137 identifies 
    cerests and vtain matteroting (article 
    137) 2006 Act contains a much wider defs 
    in relation to which directorinition of 
    “connected per 
                                             s are permitted to vote
notwithstanding an interest in those 
                                             matters. Thedeclaration by
directors of relevant interests very 
                                             diffson”of a director than had
applied under the 1985 Act which 
                                             would make definition of connected
person which applied under the 
                                             1985 icult in prAct.actice.It is
therefore proposed to retain the 
                                             status quo by preserving the The
previous exception relating to 
                                             retirement schemes was
confcombined with a broader exception which 
                                             relates to all ar y awarded to the
emplorangements including 
                                             retirement benef ined only to
schemes approved b 
                                             yees to whom the arrangements
relateit schemes in respect of which 
                                             director y the Inland Revenue.
This has now been 
    no special privilege or advantage not       .      s have 
    generall 

aThe other change in this arcompany to which the resolution relates.ticle       
relates to the question of whether or not a director is interested in a         
resolution bThe proposed amendment excludes shares which are held as            
treasuryvirtue of holding shares indirectors'interests.y shares when calculating
such                                                                            

(k) The arMiscellaneousticles 
have also been amended to: 
(1) approprdelete             Act and replace them with references to
corresponding 
refiate;erences to sections   sections of the 2006 Act, where
resolutions).account for 
of the 1985 and (2)           the fact that certain concepts under the 1985 Act
have 
                              been done away with (for example, the concept of 
                                                    “extraordinary” 

Financial calendar and corporate addresses 1 13

Results     Auditor 
announceme- 
tsInter 
Final       KPMG Audit Char                         PlcRegistered Auditortered
Accountants 
results - 
Marchim 
results - 
August 
Dividend    8 
paInteryme- 
t 
Final paim  London EC4Y 8BB Salisbury Square 
paid - 16 
Noyable - 6 
June 
2008vember 
2007 
            Deutsche Bank ok ers 
            Winchester HouseAG LondonGreat Winchester 
RegisterThe London EC2N 2DBStreet 
Manored 
office 
Manor       Financial advisors 
RoCrayal 
West Sussex  Greenhill & CoTelephone +44 (0) 1293 554 400Lansdowne
House.International LLP57 Ber 
RH10 
9UNwley 
            London W1J keley Square6ER 
Register49-            Great Winchester 
2207ed 
number 
The         London EC2N 2DB Street 
Registry 
34          G4S w 
BeckBecken- 
amenham 
Road 
Kent BR3    www.g4s.com ebsite 
4TU 

Tplus netwelephone:orwithin the UK 0871 664 0300 (calls cost 10p per mink       
extras);from outside the UK +44 208 639 3399ute Fax:Email:+44 (0) 20 8658       
3430ssd@capitaregistrars.com                                                    
Please note that benefnominated bicial owner                                    
  inf    y the registered holder of those s of shares who ha shares to receivve 
         beene                                                                  
required to direct all commormation rights under S.146 of the Companies         
unications to the registered holder of theirAct 2006 areshares rather than to   
the company or the company's registrar.                                         

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                Bhutan                  
                Bolivial                
                                        
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                El Salvador1Estonia     
                Finland                 
                                        
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   A World of   Guatemala0              
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                Hungary                 
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 SolutionsIndonesiaIrelandIsrael        
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                Luxembourg              
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                Madagascar              
                Malawi                  
                Malaysia                
                Mali                    
                Malta                   
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                Mozambique              
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                Netherlands             
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                Nigeria                 
                Northern                
                Mariana Islands         
                Norway                  
                Oman                    
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                Papua New Guinea        
                Paraguay                
                Peru                    
                Philippines             
                Poland                  
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                Serbia                  
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                Slovenia                
                South Africa            
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                Sri Lanka               
                Sweden                  
                SyriaTaiwan             

Crawley, West Sussex          Tanzania            
RH10 9UN, UK                                      
                              Thailand            
Telephone:+44 (0)1293 554 400 Trinidad & Tobago   
                              Turkey              
Registered no. 4992207        Turkmenistan        
                              Uganda              
www.g4s.com                   Ukraine             
                              United Arab Emirates
                              United Kingdom      
                              United States       
                              Uruguay             
                              Uzbekistan          
                              Yemen               
                              Zambia

Attachments

g4s_entire.pdf