1. Lab case study summary: William Hill - accounting policies February 2015

2. Building on the Lab’s report Accounting policies and integration of related financial information (July 2014), this case study considers the views of eight of William Hill’s institutional investors and analysts and three of its retail shareholders on its experimentation with disclosures, including: Identification of its significant accounting policies; and Placement of its non-significant accounting policies. Key findings Investors desire: Clear disclosure and prominence of a company’s significant accounting policies; and Easy access to a fuller list when needed. Participants in this case study indicate the fuller list is most accessible in an appendix to the annual report. Investors encourage more companies to be courageous in improving their accounting policy disclosures. Case study overview William Hill - accounting policies 2

3. Project observations – company process The process of change was initiated and driven by the company’s finance team. The Company’s Audit Committee considered and approved the criteria below, together with the resultant disclosure, and the external auditors were informed and consulted early in the exercise. In applying IAS 1, each policy was considered against the following factors in the context of the business, to determine whether it was significant: Materiality of the item(s) the policy relates to; An internal assessment of financial reporting risk areas as reported to the Audit Committee by management; Amount of internal discussion required to value, classify or otherwise assess each item covered by the accounting policy; Extent of discussion with external auditors on the assessment of the item; and Extent of questions received from shareholders in relation to the policy and item(s) to which each policy relates. “We wanted to remove clutter from our annual report and provide our investors clarity in relation to our key accounting policies.” William Hill William Hill - accounting policies 3

4. Project observations – significant policies The Company’s process resulted in retention of the following policies identified as significant in its 2011 financial statements: Revenue recognition; Intangible assets – licences 1 ; Going Concern; and Exceptional items. The predominant investor view is that William Hill appropriately selected its significant accounting policies. Two investors, however, indicate the following additional policies could be considered significant for the Company: Pensions; Property; Goodwill; and Taxation. All investors in the study indicate that the financial statements read as a whole (without reference to non-significant policies disclosed outside the financial statements) provide sufficient information to enable them to understand the business and its performance. 1 In the 2013 financial statements this policy is only included in the intangible assets note to remove duplication. William Hill - accounting policies 4

5. Project observations – placement of policies William Hill experimented with accounting policy placement as follows: William Hill - accounting policies 5

6. Project observations – placement of policies Investors predominantly prefer the 2013 placement, as they want prominence given to significant policies, but easy access to the fuller list, with an appendix preferred. However, over one third of investors would like to see each significant policy presented within the related note, as policies provide context to the numbers. William Hill - accounting policies “If I’m reading an electronic version, it doesn’t matter to me if all policies are included as I use the search function. But if I’m reading hard copy I want it shorter for ease of reference – only significant policies.” Sell-side analyst “Having key policies in the financial statements and other policies in an appendix is transparent and easy to navigate.” Credit rating agency 6

7. Read the full report The full Lab case study report provides further details on investors’ observations and includes excerpts from the Company’s annual reports. Copies of this and other Lab reports can be downloaded freely from: https://frc.org.uk/Lab/Reports.https://frc.org.uk/Lab/Reports This report supports the FRC’s initiative on Clear & Concise reporting. For more information see: https://www.frc.org.uk/Our-Work/Headline-projects/Clear-Concise.aspxhttps://www.frc.org.uk/Our-Work/Headline-projects/Clear-Concise.aspx What is the Financial Reporting Lab? The Financial Reporting Lab has been set up by the Financial Reporting Council to improve the effectiveness of corporate reporting in the UK. The Lab provides a safe environment for listed companies and investors to explore innovative reporting solutions that better meet their needs. Lab project reports do not form new reporting requirements. Instead, they summarise observations on what investors find useful. It is the responsibility of each reporting company to ensure compliance with relevant reporting requirements. William Hill - accounting policies You can also follow us on Twitter @FRCnews or on LinkedIn