Annual Report & Financial Statements 2009
who we are
Business Profile
Our Business
Informa at a Glance
Academic Information
Professional & Commercial
Information
Events & Training
02
03
04
06
08
10
B
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Global Business Information Specialist
Informa plc is a leading international provider of
specialist information and services for the academic
and scientific, professional and commercial business
communities. Informa has some 150 offices in over
40 countries and employs approximately 8,000 staff
around the world. Informa is the largest publicly-owned
organiser of conferences and courses in the world with
an output of around 8,000 events annually. Informa
publishes over 2,100 subscription-based information
services including academic journals, real-time news
and structured databases of commercial intelligence.
Informa’s book business has more than 55,000 academic
and business titles.
The Year in review
Financial Highlights
Chairman’s Statement
Chief Executive’s Review
Financial Review
Board of Directors
Advisers
Directors’ Report
Corporate Governance Statement
Directors’ Remuneration Report
Corporate Responsibility
12
13
14
16
19
24
26
27
38
45
55
Gubelstrasse 11
CH-6300 Zug
Switzerland
Telephone: 00 41 41 444 1344
Fax: 00 41 41 444 1355
www.informa.com
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”It was an extremely demanding year,
but one which brought to the fore some
of the key characteristics of Informa.”
Derek Mapp, Chairman
See page 14
”During a period of sustained economic
decline across the world, our Publishing
assets have performed exceptionally well.”
Peter Rigby, Chief Executive
See page 16
”These financial results demonstrate the strength
of a balanced portfolio and an ability to manage
costs proactively when demand is reduced.“
Adam Walker, Finance Director
See page 19
61
Financial Statements
58
Independent Auditors’ Report – Group 59
Consolidated Income Statement
60
Consolidated Statement of
Comprehensive Income
Consolidated Statement of
Changes in Equity
Consolidated Statement of
Financial Position
Consolidated Cash Flow Statement
Notes to the Consolidated Financial
Statements
66
Independent Auditors’ Report – Company 124
Company Balance Sheet
125
Notes to the Company
Financial Statements
Five Year Summary
126
131
64
65
62
Company Information
Legal Notices
Shareholder Information
Principal Group Offices
A Selection of Informa
Group Websites
132
133
134
136
137
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Annual Report & Financial Statements 2009
who we are
Business Profile
Our Business
Informa at a Glance
Academic Information
Professional & Commercial
Information
Events & Training
02
03
04
06
08
10
B
u
s
i
n
e
s
s
P
r
o
f
i
l
e
Global Business Information Specialist
Informa plc is a leading international provider of
specialist information and services for the academic
and scientific, professional and commercial business
communities. Informa has some 150 offices in over
40 countries and employs approximately 8,000 staff
around the world. Informa is the largest publicly-owned
organiser of conferences and courses in the world with
an output of around 8,000 events annually. Informa
publishes over 2,100 subscription-based information
services including academic journals, real-time news
and structured databases of commercial intelligence.
Informa’s book business has more than 55,000 academic
and business titles.
The Year in review
Financial Highlights
Chairman’s Statement
Chief Executive’s Review
Financial Review
Board of Directors
Advisers
Directors’ Report
Corporate Governance Statement
Directors’ Remuneration Report
Corporate Responsibility
12
13
14
16
19
24
26
27
38
45
55
Gubelstrasse 11
CH-6300 Zug
Switzerland
Telephone: 00 41 41 444 1344
Fax: 00 41 41 444 1355
www.informa.com
A
n
n
u
a
l
R
e
p
o
r
t
&
F
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”It was an extremely demanding year,
but one which brought to the fore some
of the key characteristics of Informa.”
Derek Mapp, Chairman
See page 14
”During a period of sustained economic
decline across the world, our Publishing
assets have performed exceptionally well.”
Peter Rigby, Chief Executive
See page 16
”These financial results demonstrate the strength
of a balanced portfolio and an ability to manage
costs proactively when demand is reduced.“
Adam Walker, Finance Director
See page 19
61
Financial Statements
58
Independent Auditors’ Report – Group 59
Consolidated Income Statement
60
Consolidated Statement of
Comprehensive Income
Consolidated Statement of
Changes in Equity
Consolidated Statement of
Financial Position
Consolidated Cash Flow Statement
Notes to the Consolidated Financial
Statements
66
Independent Auditors’ Report – Company 124
Company Balance Sheet
125
Notes to the Company
Financial Statements
Five Year Summary
126
131
64
65
62
Company Information
Legal Notices
Shareholder Information
Principal Group Offices
A Selection of Informa
Group Websites
132
133
134
136
137
T
h
e
Y
e
a
r
i
n
r
e
v
i
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w
F
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HigHligHts, summary & OutlOOk
£1,221.7m
Revenue
2008: £1,278.0m
£309.5m
Adjusted operating profit
2008: £305.8m
£261.3m
Adjusted profit before tax
2008: £233.4m
11.45p
Total dividend
2008: 8.41p
Financial Results
Adjusted operating profit growth of 1.2% despite revenue decline of 4.4%
Increase in adjusted operating margin to 25.3% (2008: 23.9%)
Organic revenue decline of 14%; organic adjusted operating profit decline of 12%
Statutory profit before tax of £96.5m (2008: £109.0m)
Adjusted diluted earnings per share up to 34.3p (2008: 33.9p restated)
Statutory diluted earnings per share up to 18.8p (2008: 16.8p restated)
Free cash flow of £223.8m up 6.6% - adjusted cash conversion of 105%
Second interim dividend of 7.85p, total 2009 dividend of 11.45p (2008: 8.41p)
Net debt/EBITDA ratio of 2.7 times
Operational Results
Publishing performed exceptionally well – now 72% of Group adjusted operating profits
72% of publishing revenues delivered in digital format and 64% from subscriptions
Top 200 events, generating around 55% of events and training profits, displayed
greater resilience in unprecedented times
Annualised cost savings of £40m, with a restructuring cost of £27.7m
Outlook
Booked and deferred income represents approximately 32% of full year revenues
(2008: 29%)
The majority of subscriptions are renewing in line with previous high rates
Forward bookings for exhibitions and large scale events slightly ahead of 2009
Cost base reduced – well placed for recovery
for futher information, see Financial Highlights, page 13, and FInancial Review, page 19
® Informa at a glance
OuR VAlues
INNOvATIvE
NON-BuREAuCRATIC
FOR PROFIT
OPEN
REWARDING
MARkET-FOCuSED
ABOuT QuALITY
a selection of our key brands
Lloyd’s is the registered trademark of the Society incorporated by the Lloyd’s Act 1871 by the name of Lloyd’s.
how we oPeraTe
a SeleCTIon oF InForma GrouP weBSITeS
+40
countries where
we operate
+2,100
subscription-based
information services
+55,000
book titles published
+8,000
events
+8,000
staff
The nature of our business
We link leading titles and events in many sectors so
that our content is the prime information source.
We have built the business as a 3-dimensional matrix
with vertical (niche) markets on one axis, geographies on
the second and media distribution formats on the third.
our business operates in three segments:
•
•
•
Academic Information
Professional & Commercial Information
Events & Training
target specific markets
expand geographically
extend media distribution
revenue by type
revenue by business segment
revenue by geography
7. 8.
1.
6.
5.
4.
3.
3.
1.
1.
4.
1.
2.
2.
2.
3.
Informa has been recognised for the second year
running as one of Britain’s Top 100 Employers,
according to research conducted by CRF in
conjunction with Guardian Books. Organisations
all over Britain were judged by a panel of experts
for their performance in career development,
training development, pay and benefits, working
conditions and company culture – Informa
received 5 out of 5 stars overall.
1. Delgates
2. Copy sales
3. Subscriptions
4. Exhibition
5. Sponsorship
6. Consulting
7. Advertising
8. Other
25%
16%
35%
7%
4%
6%
3%
4%
1. Academic Information
2. Professional &
Commercial Information
3. Events & Training
£294.4m
£368.3m
£559.0m
£168.1m
1. united kingdom
2. North America
£480.8m
3. Continental Europe £314.2m
£258.6m
4. Rest of World
www.iir.es
www.iir.nl
www.iir.pl/iir
www.iir-hungary.hu
www.iir-italy.it
www.iirmd.com
www.iirme.com
www.iir-training.co.za
www.iirusa.com
www.informa.com.au
www.informatm.com
www.informaglobalevents.com
www.konference.cz
www.monacoyachtshow.com
www.thesuperyachtcup.com
www.informa.com
www.crcpress.com
www.psypress.com
www.tandf.co.uk/journals
www.taylorandfrancis.com
www.taylorandfrancisgroup.com
www.informaworld.com
www.achieveglobal.com
www.agra-net.com
www.ceasc.com
www.datamonitor.com
www.ebenchmarkers.com
www.esi-intl.com
www.esi-se.com
www.forum.com
www.globalbusinessinsights.com
www.huthwaite.com
www.ibclifesciences.com
www.iff-training.com
www.iirusa.com
www.informaecon.com
www.informahealthcare.com
www.informais.com
www.informars.com
www.insuranceday.com
www.lifescienceanalytics.com
www.lloydslist.com
www.marketlineinfo.com
www.omega-performance.com
www.orbys.com
www.ovumkc.com
www.r4l.info
www.robbinsgioia.com
www.scrip100.com
www.scripnews.com
www.theblackbookofoutsourcing.com
www.verdict.co.uk
www.abudhabiyachtshow.com
www.adamsmithconferences.com
www.arabhealthonline.com
www.cityscapeglobal.com
www.euroforum.de
www.futd.nl
www.ibceuroforum.dk
www.icbi-events.com/gaim
www.icbi-events.com/superreturn
www.icbi-uk.com
www.iir.at
www.iir.com.au
www.iir.com.br
®® HigHligHts, summary & OutlOOk
£1,221.7m
Revenue
2008: £1,278.0m
£309.5m
Adjusted operating profit
2008: £305.8m
£261.3m
Adjusted profit before tax
2008: £233.4m
11.45p
Total dividend
2008: 8.41p
Financial Results
Adjusted operating profit growth of 1.2% despite revenue decline of 4.4%
Increase in adjusted operating margin to 25.3% (2008: 23.9%)
Organic revenue decline of 14%; organic adjusted operating profit decline of 12%
Statutory profit before tax of £96.5m (2008: £109.0m)
Adjusted diluted earnings per share up to 34.3p (2008: 33.9p restated)
Statutory diluted earnings per share up to 18.8p (2008: 16.8p restated)
Free cash flow of £223.8m up 6.6% - adjusted cash conversion of 105%
Second interim dividend of 7.85p, total 2009 dividend of 11.45p (2008: 8.41p)
Net debt/EBITDA ratio of 2.7 times
Operational Results
Publishing performed exceptionally well – now 72% of Group adjusted operating profits
72% of publishing revenues delivered in digital format and 64% from subscriptions
Top 200 events, generating around 55% of events and training profits, displayed
greater resilience in unprecedented times
Annualised cost savings of £40m, with a restructuring cost of £27.7m
Outlook
Booked and deferred income represents approximately 32% of full year revenues
(2008: 29%)
The majority of subscriptions are renewing in line with previous high rates
Forward bookings for exhibitions and large scale events slightly ahead of 2009
Cost base reduced – well placed for recovery
for futher information, see Financial Highlights, page 13, and FInancial Review, page 19
® Business Profile
”Informa delivered a good performance against the
backdrop of a very challenging trading environment.
The balance sheet was strengthened, operating margins
were enhanced through proactive cost management and
earnings increased.”
– Derek Mapp, Chairman
in tHis sectiOn:
Our Business
Informa at a Glance
Academic Information
Professional & Commercial
Information
Events & Training
03
04
06
08
10
2
informa plc Annual Report & Financial Statements for the year ended 31 December 2009
Our Business
target specific markets
expand geographically
extend media distribution
market leaders:
As many of our markets are niche
and specialist and accordingly quite
small, our leading titles are either
the market leaders or number two
in a particular sector.
Edward Lloyd’s City of London coffee shop.
Informa has been built around the provision of high quality,
proprietary business to business information which includes
some of the longest-standing brands in the world of
publishing, conferences, exhibition and training.
Informa was created from the merger of IBC Group plc and
LLP (Lloyd’s of London Press) Group plc in December 1998.
Although Informa only came into being as recently as 1998,
it has a bloodline running back to 1734 when the first issue
of the maritime publication Lloyd’s List was pinned to the
wall of Edward Lloyd’s City of London coffee shop.
Taylor & Francis and Informa merged in May 2004. Taylor
& Francis has over two centuries of experience and its
portfolio includes the leading physics and science journal,
the Philosophical Magazine, which was launched in 1798.
It has grown very rapidly over the last two decades to
become a leading international academic publisher,
especially in the areas of Humanities and Social Sciences.
Since the merger with Taylor & Francis, Informa has
expanded through a combination of organic and
acquisition (both strategic and bolt on) led growth.
In July 2005, Informa acquired IIR Holdings, which was
founded in 1973. Not only did this allow Informa to
bring together the two largest events businesses in the
world to create an undisputed powerhouse, it also meant
that Informa acquired several market-leading Performance
Improvement businesses.
In July 2007, Informa acquired Datamonitor, a
world-leading provider of premium global business
information. Datamonitor delivers independent data,
analysis and opinion across the Automotive, Consumer
Markets, Energy & Sustainability, Financial Services,
Logistics & Express, Pharmaceuticals & Healthcare, Retail,
Sourcing, Technology and Telecoms industries.
The Group’s corporate structure was changed in
June 2009 by putting in place a new parent company,
registered in Jersey and with its domicile in Switzerland.
Informa’s website www.informa.com provides more
information on the history of the Group and each of
its divisions.
informa plc Annual Report & Financial Statements for the year ended 31 December 2009
3
Business Profile
infOrma at a glance
expand geographically
Informa achieved many accomplishments during
2009, a few of which are shown on this map. Further
information on Informa’s achievements during 2009
follows on pages 6 to 18.
Our business operates in three segments:
•
•
•
Academic Information:
pages 6 and 7
Professional & Commercial Information:
pages 8 and 9
Events & Training:
pages 10 and 11
Informa has some 150 offices in over 40
countries and employs approximately
8,000 staff around the world.
USa
Huthwaite were included in the
TrainingIndustry.com’s second
annual list of “Top Sales Training
Companies” 2009
Uk
On 13th March 2009 Taylor
& Francis was adjudged
Publisher of the Year by
the Academic, Professional
& Specialist Booksellers
Group of The Booksellers
Association in the UK.
BRazIl
In 2009 Informa Brazil launched
its exhibition division with the
acquisition of its first event:
CARDS Expo.
4
informa plc Annual Report & Financial Statements for the year ended 31 December 2009
Uk
uk
Taylor & Francis published
the 90th edition of the
leading reference book:
Handbook of Chemistry
and Physics
Informa Healthcare hosted the
2009 Scrip Awards which were
attended by a high number
of senior executives in the
pharmaceutical industry. The
2009 awards were the most
successful in the Awards’ history.
SaUDI aRaBIa
Cityscape Jeddah
was launched in 2009.
This is the first large
scale event Informa
has organised in
Saudi Arabia.
ChIna
IIR Singapore staged the largest
ever PALM EXPO Event in 2009,
in Beijing, despite the economic
slowdown. Held annually, it is
the world’s 2nd largest industry
exhibition of its kind covering
professional audio, light, audio
visual, music and technology.
aUSTRalIa
Informa Australia ran the most
profitable AusRAIL ever in 2009.
This exhibition and multi-stream
conference is the largest rail
gathering in the region and is run
on behalf of the peak body, the
Australasian Railway Association,
and other industry organisations.
aSIa PaCIFIC
Datamonitor’s Asia Pacific offices grew sales
which were facilitated by being part of the
Informa Group. This allows Datamonitor to
leverage Informa’s office facilities and expertise,
saving costs. These offices are located in Sydney,
Melbourne, Canberra, Seoul, Taiwan, Tokyo,
Beijing, Hong Kong and Hyderabad.
for a list of our principal group offices, see page 136
informa plc Annual Report & Financial Statements for the year ended 31 December 2009
5
Business Profile
academic infOrmatiOn
6
informa plc Annual Report & Financial Statements for the year ended 31 December 2009
22,000
titles available
digitally
Building on two centuries’ experience, Taylor & Francis
has grown rapidly over the last two decades to become
a leading international academic publisher. The Taylor
& Francis Group operates from a network of global
offices, including New York, Philadelphia, Florida,
Oxford, Melbourne, Stockholm, Beijing, New Delhi,
Johannesburg, Singapore and Tokyo, plus a larger
network of sales offices and distributors.
In 2009 Taylor & Francis secured a large number of new
society contracts for 2010. The titles range in subject
from Journal of the Musical Arts in Africa to the Journal
of Systematic Palaeontology. Of particular note is a
co-publishing partnership with the Royal Society of
New Zealand for its journals including an archive of
over three hundred years of important science content
covering New Zealand research specialities such as the
geosciences, botany, agriculture, marine science and
zoology and the publication of the journal Housing Policy
Debate which is one of the world’s most respected and
highly ranked housing journals.
2009 has been an excellent year with continued growth
in revenues, profits and product volumes. Electronic
delivery is going from strength to strength with growth
in electronic book revenues of 33%. There are now
22,000 titles available digitally either as e-books or
on databases. This is allowing the business to deliver
products to the customer rapidly, in their choice of
format and with great cost efficiency.
Sold over a million copies in its first four editions
number 1 journal in the Urban Studies category
For nearly a quarter of a century Molecular
Biology of the Cell has been the leading
cell biology textbook, and has sold over a
million copies in its first four editions. The
fifth edition is now on sale. Dr. Bruce Alberts,
one of the authors of the Molecular Biology
of the Cell and Essential Cell Biology, was
recently named one of the first three Science
and Technology Envoys for the US.
Journal of the American Planning Association
(JAPA) has been one of Routledge’s most
successful recent acquisitions. Ranked the
Number 1 journal in the Urban Studies category
in the Thomson Reuters Journal Citation
Reports® for the past two years, the journal’s
impact factor has increased by approximately
46%, in that time to 2.250. Journal Citation
Reports® (JCR®) offer a systematic, objective
means to critically evaluate the world’s
leading journals, with quantifiable, statistical
information based on citation data. To celebrate
the Association’s hundredth birthday in 2009
Routledge digitized JAPA’s entire archive and
published a well-received, widely read and cited
special centennial issue.
informa plc Annual Report & Financial Statements for the year ended 31 December 2009
7
Business Profile
PrOfessiOnal & cOmmercial infOrmatiOn
8
informa plc Annual Report & Financial Statements for the year ended 31 December 2009
83%
of Lloyd’s List customers
now use its online offering
The Professional & Commercial Information (PCI) division
incorporates a number of products oriented towards
the corporate market, including the vertical sectors
of telecoms & media, life sciences & pharmaceutical,
financial markets, maritime & insurance and commodities.
The product format within PCI varies from the Lloyd’s
List daily newspaper and Scrip News to deep knowledge
databases such as Datamonitor with its ten Knowledge
Centers, Citeline for the clinical trials customer and EMC
for telecoms trends and forecasting. Informa Global
Markets provides real time news, data and analysis
electronically across a number of markets 24 hours a day.
Digital delivery remains at the forefront of the PCI
division’s strategy in 2009. The year saw a number of
key new launches and many upgrades and relaunches
of our online news and data services.
Initiatives such as the new Lloyd’s List Intelligence and
the newly amalgamated InformaHealthcare.com have
resulted in significantly improved customer usage, higher
customer value and increased subscription yields.
The PCI division’s revenues include group advertising
sales which remain low in relation to the overall
group position. The excellent quality of need to
have information which the division provides has
enabled the business to maintain high subscription
renewal rates core to the division’s strategy.
new online database
Celebrating 25 years
Based on the world’s definitive online database of shipping
movements and company financial performance data, Lloyd’s
List Intelligence has been under construction throughout 2009.
Its predecessor, Lloyd’s MIU, performed strongly last year as
executives turned to trusted data on which to base difficult
business decisions.
The Datamonitor Group’s retail arm, Verdict Research,
celebrated its 25th anniversary in 2009. The UK’s leading
authority on the retail industry, Verdict continues to
publish unrivalled independent analysis and has come
a long way since publishing its first report in 1984 on
grocers and supermarkets.
TWENTY FIVE YEARS OF
RETAIL RESEARCH
informa plc Annual Report & Financial Statements for the year ended 31 December 2009
9
Business Profile
events & training
10
informa plc Annual Report & Financial Statements for the year ended 31 December 2009
main events:
The largest events in 2009 include
Arab Health, Monaco Yacht Show,
The SuperReturn Series, the Com Series
(Telecoms) and German Energy.
Events and training remains the most cyclical division
of the Informa portfolio. The top 200 events contributed
28% of the overall events and training revenues in 2009.
Our largest events including Arab Health, the Monaco
Yacht Show, The SuperReturn series, the Com series
(Telecoms) and German Energy, all performed well and
are expected to do so again in 2010.
Exhibitions and large conferences remain one of the
best ways of marketing products, garnering intelligence,
debating industry issues and networking. The geo-
cloning of events continues with the successful launch
of Cityscape Saudi Arabia and a number of other events
in the pipeline.
The smaller events businesses, based around regional
hubs are found throughout Europe, US, the BRIC countries,
South Africa and Australia and are well placed to take
advantage of their high operational gearing when the
economy recovers in their various locations.
high profile event
SuperReturn brand growth
The Abu Dhabi Yacht Show was probably the
most high profile event that IIR Middle East
has launched with Royal families and VIPs in
attendance. For 2010 the event was moved
to the Yas Island, the same location as the
Abu Dhabi Grand Prix.
In 2009, we added
SuperReturn Emerging
Markets to our highly
successful private
equity series under the
SuperReturn brand.
informa plc Annual Report & Financial Statements for the year ended 31 December 2009
11
The Year in Review
”During a period of sustained economic decline across the
world, our Publishing assets have performed exceptionally
well. Our focus on digitally delivered, subscription-led, must
have proprietary content has enabled us to avoid significant
reductions in demand albeit with some vertical markets
performing better than others.”
– Peter Rigby, Chief Executive
In thIs sectIon:
Financial Highlights
Chairman’s Statement
Chief Executive’s Review
Financial Review
Board of Directors
Advisers
Directors’ Report
Corporate Governance Statement
Directors’ Remuneration Report
Corporate Responsibility
13
14
16
19
24
26
27
38
45
55
1212
Informa plc Annual Report & Financial Statements for the year ended 31 December 2009
Informa plc Annual Report & Financial Statements for the year ended 31 December 2009
FInancIal hIghlIghts
Revenue £m
adjusted operating profit £m
0
.
8
7
2
,
1
7
.
1
2
2
,
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.
9
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1
05
06
07
08 09
05
06
07
08 09
2009
£m
2008
£m
actual
%
organic
%
(14)
(12)
Revenue
Operating profit
Adjusted operating profit1
Operating cash flow2
Adjusted cash conversion (%)3
Profit before tax
Adjusted profit before tax4
Profit for year
Adjusted profit for year5
Basic earnings per share (p)
Diluted earnings per share (p)
Adjusted diluted earnings
per share (p)
Dividend per share (p)
Free cash flow7
Net debt8
1,221.7
1,278.0
145.7
309.5
323.8
105
96.5
261.3
106.5
193.1
18.84
18.83
34.27
11.45
223.8
872.6
164.6
305.8
336.2
110
109.0
233.4
86.0
172.5
16.806
16.796
33.926
8.416
210.0
1,341.8
(4)
(11)
1
(4)
(11)
12
24
12
12
12
1
36
7
(35)
Notes:
In this document ‘organic’ refers to numbers adjusted for material acquisitions and disposals and the effects of changes in foreign
currency exchange rates.
1 Excludes restructuring and reorganisation costs of £34.1m (2008: £17.3m) and intangible asset amortisation of £129.7m (2008: £123.9m).
2 Operating cash flow as calculated in the Financial Review.
3 Operating cash flow divided by adjusted operating profit.
4 Excludes restructuring and reorganisation costs of £34.1m (2008: £17.3m), intangible asset amortisation
of £129.7m (2008: £123.9m) and loss on disposal of businesses £1.0m (2008: profit £16.8m).
5 Excludes restructuring and reorganisation costs of £34.1m (2008: £17.3m), intangible asset amortisation of £129.7m (2008: £123.9m),
loss on disposal of businesses £1.0m (2008: profit £16.8m) and related tax credit of £78.2m (2008: £37.9m).
6 Restated to reflect the bonus element of the May 2009 rights issue.
7 Free cash flow is operating cash flow before restructuring and reorganisation cash flow, net interest and taxation.
8 Net debt as calculated in Note 33.
Informa plc Annual Report & Financial Statements for the year ended 31 December 2009
13
the Year in Review
chaIRman’s statement
STRENgTh:
Informa is in a stronger position
than it was this time last year to deal
with challenges and also benefit
from the multiple opportunities
available to the Group.
– Derek Mapp, Chairman
Despite 2009 being an extremely tough year for
the world economy, I am pleased to report a good
performance from Informa over the last 12 months.
It was an extremely demanding year, but one which
brought to the fore some of the key characteristics
of Informa. Three features stand out:
•
•
•
the resilience of our portfolio of assets diversified
across vertical markets and geographies;
the operational flexibility of our business, which
allowed us to continue to protect margins through
prompt cutting of costs; and
the entrepreneurial spirit of our people who pursued
new opportunities even as market conditions
remained uncertain.
Revenue for the year ended 31 December 2009 was
£1.22bn down only 4% on 2008. Adjusted operating
profits were £309.5m, up 1% on 2008. The adjusted
operating margin improved accordingly from 23.9% to
25.3% and adjusted cash conversion was 105%. Our free
cash flow during 2009 was £223.8m – up 6.6% on 2008.
On an organic basis, revenues declined by 14% with
publishing up 2% and events and training down 27%,
partly driven by our pro-active reduction of the number
of events we run. Organic adjusted operating profits
declined by 12%, with an increase in publishing of 8%
offset by a 41% decline across events and training.
Profit before taxation decreased to £96.5m (2008:
£109.0m) as a result of the cost of restructuring during the
year whilst basic earnings per share increased by 12% to
18.8p (2008: 16.8p restated). Adjusted diluted earnings
per share increased to 34.3p (2008: 33.9p restated).
In order to strengthen our balance sheet and remove any
market concerns about our ability to finance our business
within current banking covenants we launched a rights
issue in May, raising a net £242m. We ended the year
with net debt of £872.6m (2008: £1,341.8m) and a net
debt to EBITDA multiple of 2.7 times against a covenant
of 3.5 times. It is our intention to trade between 2.0 and
2.5 times going forward, a level which is in line with
investment grade parameters for credit managers.
By the start of 2009 it was apparent that economic conditions
were challenging and would continue to negatively impact
trading. As such we managed the business to protect
profitability, optimise cash generation and take swift action
14
Informa plc Annual Report & Accounts for the year ended 31 December 2009
on head count and other variable costs. During the year
we reduced staff numbers by a further 8%, which drove
an annualised cost saving of £40m. We reacted quickly
to falling demand in the events business and reduced
events output by a quarter which in itself was responsible
for half of the drop in events revenue. Where appropriate,
we have also restructured our publishing businesses,
consolidating operations and reducing the cost base.
We looked at all cost lines but were careful to leave
the core of our business intact and we have continued
to invest both vertically and geographically where
trading conditions warranted it. We were able
to react very quickly to the downturn given our
variable cost base and we are in a strong position
to take advantage of an upturn when it comes.
We continue to look closely at our business portfolio
to find opportunities to bolster certain areas through
investment. Informa has a strong track record of
generating value through the effective integration of
acquisitions of all sizes. Looking forward into 2010 and
beyond we will continue to make small bolt on acquisitions
which fulfil our strict investment criteria. We also seek to
divest of businesses that do not fit our long-term strategy.
We have continued to respond to client demands
for information delivered digitally. Of our publishing
revenues in 2009, 72% came from digital sources across
all of our major verticals. 64% of publishing revenues are
subscription led and we have largely moved from a legacy
single subscriber business to corporate site licences, which
now form the majority of our subscription business. In
2009, publishing contributed 72% of total profits, while
less than 3% of our total revenues come from advertising.
Our strategy is to continue to develop a strong, high
margin information business which is resilient in
the downturn but will have appropriate operational
gearing in the up cycle. We have high internal
standards for cash control, strong corporate
governance, strict management controls, allied with
the necessity to be innovative and entrepreneurial.
During 2009 we launched the Abu Dhabi Yacht
Show, established a new business venture in Saudi
Arabia, opened an exhibition business alongside our
conference operations in Brazil, invested in our Academic
content platform, grew our telecommunications Com
series of events worldwide (especially in emerging
markets) and continued to develop our various Clinical
Research publishing and events businesses. Similar
initiatives and new activity continue into 2010.
We are recommending a second interim dividend of 7.85p
per share. This will be paid on 19 May 2010 to shareholders
on the register on 16 April 2010. It will make a total
dividend for 2009 of 11.45p per share as against 8.41p per
share (restated) in 2008, an increase of 36%.
For almost all businesses, 2009 has been one of the
toughest years they have ever experienced. Informa is
no exception, but we have performed well due to the
actions taken within the business and the nature of our
activities with their variety of vertical markets, multi-
geographies, media formats, allied with strong cash
generation, good cost control and high margins. However,
our resilience and strength could not have been achieved
without the support of our people in every part of the
business. Despite cost cuts and, in certain instances,
lower incomes, every person in Informa has given their all.
I would like to thank and congratulate every one of them
on behalf of the Board and the shareholders.
Future Prospects
The economic background remains uncertain and
markets are unpredictable. We remain cautious and are
running our businesses accordingly. However, Informa
is in a stronger position than it was this time last year to
deal with challenges and also benefit from the multiple
opportunities available to the Group.
Academic journal and other subscription renewals are in
line with our expectations. Our UAE-based exhibitions in
the first few months of 2010 have grown over last year and
on the conference side, our larger events such as the major
German Energy Event and SuperReturn International
have performed well. The short-term outlook for our more
cyclical smaller conferences remains flat but the business
is well positioned for the economic upswing.
With considerable cost removed from the business we
are well placed to maximise the opportunities to grow
as and when they arise. Our portfolio of assets is well
balanced across vertical markets and geographies. We
are pushing ahead with innovative ways to enhance
our customer offering and further develop an already
strong digital capability.
Derek mapp
Chairman
Informa plc Annual Report & Financial Statements for the year ended 31 December 2009
15
the Year in Review
chIeF executIve’s RevIew
ExCEPTiONAl PREFORmANCE:
Publishing
72% of publishing revenues are delivered
in digital format which represents 39% of
Group revenues.
– Peter Rigby, Chief Executive
During a period of sustained economic decline
across the world, our Publishing assets have
performed exceptionally well. Our focus on
digitally delivered, subscription-led, must have
proprietary content has enabled us to avoid
significant reductions in demand albeit with some
vertical markets performing better than others.
Revenues grew by 8.6% (1.7% on an organic basis)
and overall publishing now accounts for 54% of Group
revenues and 72% of Group adjusted operating profits.
academic Information (aI)
Our AI division delivered organic revenue growth of
6.5% and organic adjusted operating profit growth of
7.8%, testament to the resilience of its products. We
are particularly pleased with the performance of our
books business. Our portfolio of products – textbooks,
monographs and reference works – delivered its best ever
performance as we saw our global sales and marketing
network sell over 5.6m books in 2009. We saw excellent
growth especially in the faster developing Asia regions.
During the year we established a print on demand (POD)
partner in our own Kentucky distribution facility to improve
our control over the print supply chain. Over 25,000 titles
are now available as POD with overall stock levels being
reduced as a consequence of our continuing emphasis on
printing shorter run quantities. We have significantly grown
our electronic book business revenues by 33% with 22,000
titles available digitally either as e-books or on databases.
We watch with interest the introduction of new electronic
readers and are well placed to take further advantage of this
new format if it develops in the academic sector.
We launched 26 new journals and continue to have a
real strength in the growing areas of research which
include humanities, social sciences, environment and
agriculture. “Must have” content in academic journals is
tracked by citations and we continue to see more and
more of our titles gaining recognition, testament to our
partnership with editors, societies and academics.
16
Informa plc Annual Report & Accounts for the year ended 31 December 2009
We have worked hard to enhance the value of our offering
to our customers and have tempered our pricing policy to
reflect what is happening in academic budgets worldwide.
We started the journal renewal process for 2010 earlier in
the final quarter of 2009 than last year, which along with
considerable systems development and working closely
with our customers has resulted in our processed orders
being higher this year than they were a year ago. Despite
the challenging academic market conditions we anticipate
that renewal rates will not be materially affected in 2010.
Professional & commercial Information (PcI)
PCI which comprises publishing across healthcare,
maritime, pharmaceutical, commodities, professional
and financial sectors, as well as Datamonitor, delivered
revenues which were down 2% on an organic basis
but by working extremely hard on costs delivered
organic adjusted operating profit growth of 8.6%.
This part of our business generates 72% of its revenue
from subscriptions, 84% of its revenue digitally
and has some of the highest margins in the Group.
Being diversified not just geographically but across
sectors, we witnessed a strong performance across
pharma and life sciences, whilst financial services
was a much tougher area as banks consolidated,
disappeared or simply reduced their headcount.
Renewal rates were robust across PCI including
Datamonitor, where the number of high value
subscribers was maintained.
It was difficult to grow revenues during 2009 but by
anticipating this and taking cost out of the business, we
increased adjusted operating margins by 4.2 percentage
points to 32.2%. Our portfolio of products covers many
niche areas across numerous different vertical markets.
We focus on key accounts and delivering content with
deep intelligence direct to the customers’ workplace.
Informa Business Information, part of PCI, will push
ahead in 2010 developing essential, high-value online
information and intelligence services in its markets. In
maritime, the Lloyd’s List Group, comprising not only
the newspaper but the online offering (used by 83%
of its customers), databases, maritime law reports,
finance and insurance services, has been transformed
over the past two years by focusing on customer
needs and utilising technology to improve delivery.
Within our financial data businesses (IFI) we have
inevitably lost customers over the past eighteen months
as the financial markets collapsed. Yet all four businesses
increased adjusted operating profits and we secured
some important customers wins. We anticipate another
tough year but IFI is protected because it comprises
electronically delivered data, is subscription led and
enjoys very high margins.
Datamonitor has continued to expand its presence
around the world. New customers and renewals have
taken longer to secure but we have been able to
supplement revenue with one off reports as well as one
or two large consulting projects. The investment in our
Knowledge Centers has improved the offering and we
have restructured our suite of IT products which was the
most challenging sector in 2009. We have targeted those
sectors where we believe there are significant growth
opportunities such as energy and healthcare.
A lot of cost has been taken out of the business but we
have also reinvested in global sales teams as we look to
expand our reach. Datamonitor’s integration into Informa
and our office network and databases has enhanced its
access to new geographical territories. Whilst markets
remain difficult, we are encouraged by how well
Datamonitor has performed this year.
Our portfolio of market leading brands, including Scrip,
Lloyd’s List, TrialTrove, Insurance Day, IGM, Food News,
SeaSearcher and Datamonitor gives us confidence that
we can continue to deliver deep, content led intelligence,
increasingly in an online format focusing on end-users in
high value markets.
events & training
When we reflect on the past eighteen months and the
nature of our Events and Training business which accounts
for 46% of Group revenues and 28% of Group adjusted
operating profits, it has delivered an extraordinary result.
We have lost revenues of £108.8m, around half due to us
pro-actively taking product out of the market, and yet
protected the bottom line to the extent that adjusted
operating profits only fell by £40.4m. We still achieved an
adjusted operating profit margin of 15.5%.
Informa plc Annual Report & Financial Statements for the year ended 31 December 2009
17
The top 200 events contribute 28% of overall Events
and Training revenues and around 55% of adjusted
operating profit.
Participating in a market leading exhibition or
large conference remains one of the best ways for a
company to market their product, garner intelligence,
debate industry issues and network. This is evidenced
by Arab Health which ran in January 2010 with revenue
20% up year on year or SuperReturn International which
ran last month with over 1,000 delegates. Our forward
bookings for the rest of our shows in 2010 are slightly
ahead of last year.
The final quarter of 2009 showed a degree of stability
amongst our Event and Training operations. This has
continued in 2010 and we are working hard to ensure our
portfolio meets the needs of our customers and markets.
We are looking to build on our existing exhibition
portfolio through supersizing and geo-cloning existing
events, new launches and small bolt-on acquisitions.
Peter Rigby
Chief Executive
the Year in Review
chIeF executIve’s RevIew continued
Our exhibitions and large conferences were resilient.
Our largest events including Arab Health, the Monaco
Yacht Show, SuperReturn, the Com series (Telecoms), all
performed well and we expect them to do so again in 2010.
The most challenging areas were local language
conferences and training courses, as corporate budgets
were cut. We reacted quickly to reduce volume and costs.
The cost base is very flexible and we are confident we can
accommodate increased demand before we need to put
cost back into the business.
Geographically, the picture was similar everywhere for
conferences. Europe, and in particular our large German
operations, were hit hard but it was a similar trend in
the US, Middle East and Australia. We would expect each
region to bounce back in line with the recovery in their
respective economies. In anticipation of this, we are
working hard on new products and topic development
and making our training materials easier to access and
more flexible for the corporate landscape.
Our corporate training portfolio had a stronger end
to the year but has suffered significantly over the past
eighteen months. It was one of the first businesses to
be impacted by the recession and may take a while to
recover. However, with significant cost taken out of the
business, any pick-up in demand, particularly in the US,
will result in a materially improved performance.
There were still some notable successes despite the
difficult environment which indicates the quality of
our businesses:
•
•
•
•
•
•
Dubai exhibitions excluding Cityscape increased
revenues by 18%;
Telecoms, where the revenues from our Com World
Series of events were up 12%;
Vitafoods increased revenues by 32%;
Monaco Yacht Show increased revenues by 3%;
AusRail, where revenues were up by 14%; and
Our Life Sciences events business delivered profits
in line with 2008.
18
Informa plc Annual Report & Financial Statements for the year ended 31 December 2009
FInancIal RevIew
CONTiNuED PROFiT:
As well as the increase in adjusted
operating profit, we are pleased by the
way the Group has continued to convert
profit into cash. Free cash flow generated
by the Group was £223.8m up 7%.
– Adam Walker, Finance Director
2009 will be remembered as one of the most difficult
years from a global trading perspective. All of our
businesses were impacted to a lesser or greater extent,
so we are pleased with these financial results which
demonstrate the strength of a balanced portfolio and
an ability to manage costs proactively when demand
is reduced.
Adjusted operating profit increased to £309.5m
(2008: £305.8m) driven by an increase in the adjusted
operating margin from 23.9% to 25.3%. The increase in
adjusted operating profit and margin demonstrates the
benefits of our early actions to adapt our cost base to
the very challenging trading conditions. These actions
offset a 4% reduction in 2009 revenues to £1,222m
(2008: £1,278m).
As well as the increase in adjusted operating profit,
we are pleased by the way the Group has continued
to convert profit into cash. Free cash flow generated
by the Group was £223.8m up 7%.
adjusted and statutory Results
In this Financial Review we refer to adjusted and
statutory results. Adjusted results are prepared to provide
a more comparable indication of the Group’s underlying
business performance.
translation Impact
The Group generates the majority of its revenue
overseas, and with most currencies strengthening
against sterling over the year, there was a benefit to the
2009 revenue and adjusted operating profits over 2008
of approximately £120m and £40m respectively.
The largest exposure is to US dollars with approximately
45% of Group revenue generated in USD and currencies
pegged to the USD. Each 1 cent movement in the USD to
GBP exchange rate has a circa £3.5m impact on revenue
and a circa £1.1m impact on operating profits. Offsetting
any negative impact on operating profits are decreases
to interest payable and tax payable.
For bank debt covenant testing purposes, profit and
debt translation is calculated at the average rate of
exchange throughout the relevant period.
Informa plc Annual Report & Financial Statements for the year ended 31 December 2009
19
the Year in Review
FInancIal RevIew continued
Business segments
Revenue and adjusted operating profit by division are set out below together with the respective actual and organic
growth rates. As highlighted last year we have simplified the financial reporting of divisions in 2009 to represent better
the way the Group is managed, namely around its publishing and events and training revenue streams.
Academic information
Revenue
Adjusted Operating Profit
Adjusted Operating Margin
Professional & Commercial information`
Revenue
Adjusted Operating Profit
Adjusted Operating Margin
Events & Training
Revenue
Europe
US
Rest of World
Adjusted Operating Profit
Europe
US
Rest of World
Adjusted Operating Margin
Revenue
2009
£m
294.4
104.3
35%
2009
£m
368.3
118.7
32%
2009
£m
242.4
201.1
115.5
559.0
40.1
27.6
18.8
86.5
15%
2008
£m
243.5
76.4
31%
2008
£m
366.7
102.5
28%
2008
£m
314.0
232.8
121.0
667.8
56.0
44.9
26.0
126.9
19%
Actual
%
21
37
Actual
%
–
16
Organic
%
6
8
Organic
%
(2)
9
Actual
%
Organic
%
(23)
(14)
(5)
(16)
(28)
(39)
(28)
(32)
(30)
(27)
(20)
(27)
(35)
(47)
(44)
(41)
Revenue declined by 4%, despite the translation benefit of both US dollar and Euro to sterling currency movements
increasing revenue by approximately £120m over 2008. There were no material acquisitions made during
2009. Organic revenue declined by 14% reflecting a strong performance in our publishing businesses, up 2%, but
emphasising the tough trading environment for Events and Training businesses, where revenues declined by 27%.
We proactively removed around a quarter of events, principally training courses and similar local language
conferences, from our portfolio due to reduced levels of demand. Large scale events held up well.
20
Informa plc Annual Report & Financial Statements for the year ended 31 December 2009
operating Profit
Adjusted operating profit increased marginally to £309.5m (2008: £305.8m).
Organic adjusted operating profit declined by 12%, with an increase of 8% by the publishing businesses offset by a 41% fall
at events and training. The events and training businesses have a significant element of variable cost, including profit share,
which for some people is the largest part of their remuneration. This has ensured that business unit heads are focused on
cost containment at all times, ensuring a swift response to the dramatic fall in business demand. Consequently, although
their revenue declined by £108.8m, by reducing the cost base the fall in profits was restricted to £40.4m. This shows the
operational gearing within events and training where we anticipate an opposite effect when economic conditions improve.
Statutory operating profit declined by 11% to £145.7m (2008: £164.6m), resulting principally from the decline in
revenue and the £16.8m increase in restructuring and reorganisation costs.
Restructuring and Reorganisation costs
Restructuring and reorganisation costs for the year of £34.1m (2008: £17.3m) largely reflect the cost to the businesses
of responding to changing market conditions and of the corporate redomicile. These include redundancy costs of
£18.0m (2008: £9.9m), vacant property provisions of £4.7m (2008: £3.6m), reorganisation costs of £5.0m (2008: £1.4m),
and aborted acquisition costs of £2.1m (2008: £0.6m). In addition, we incurred £4.3m (2008: £nil) of professional fees
in connection with the redomicile of the ultimate parent company.
The £27.7m of restructuring costs are expected to deliver annualised savings of approximately £40m.
net Finance costs
Finance costs net of interest receivable, decreased by £24.2m to £48.2m mainly as a result of the decline in market interest
rates and the reduction in debt resulting from the net proceeds of the rights issue (£242m) received in May 2009.
Around 75% of our borrowings are hedged through fixed interest rate swaps. At 31 December 2009 the weighted
average life of the swaps was 1.5 years with a weighted average interest rate of 4.93%.
Profit Before tax
Adjusted profit before tax increased by 12% to £261.3m (2008: £233.4m) and adjusted profit for the year also increased
by 12% to £193.1m (2008: £172.5m).
taxation
Across the Group, tax has been provided on adjusted profits at an adjusted tax rate of 26.1% (2008: 26.1%). This adjusted
tax rate benefits from profits generated in low tax jurisdictions.
The Group tax credit on statutory profit before tax was 10.4% (2008: charge 21.1%). The restructuring of the group has resulted
in the release of a £34.3m deferred tax liability for the difference between the accounting and tax value of certain group assets.
earnings and Dividend
Statutory diluted EPS of 18.83p (2008: 16.79p restated) is 12% ahead of 2008 and adjusted diluted EPS of 34.27p
(2008: 33.92p restated) is 1% ahead of 2008.
The Board has proposed a second interim dividend of 7.85p per share (2008: 3.28p per share restated), in line with the
Group’s existing dividend policy. This dividend will be paid on 19 May 2010 to ordinary shareholders registered as of
the close of business on 16 April 2010. This will result in a total dividend for the year of 11.45p per share (2008: 8.41p
per share restated). Dividend cover will be 3 times on an adjusted earnings basis.
The 2008 comparative per share earnings and dividend numbers have been restated to reflect the bonus element
of the rights issue.
Informa plc Annual Report & Financial Statements for the year ended 31 December 2009
21
the Year in Review
FInancIal RevIew continued
Return on capital employed
The Group has undertaken three significant transactions in recent years – the merger with Taylor and Francis and the
acquisitions of IIR and Datamonitor. In addition, a number of smaller bolt on acquisitions have also been completed.
Adjusted operating profits, on a proforma basis, have grown on a compound basis by 14% per annum over the past ten
years of which around half is organic growth with the balance driven by acquisitions.
The return on capital employed over this period is 8.9%, ahead of the Group’s current weighted average cost of capital.
cash Flow
The Group continues to generate strong cash flows and this is reflected in a cash conversion rate, expressed as a ratio of
operating cash flow (as calculated below) to adjusted operating profit, of 105% (2008: 110%).
Adjusted operating profit
Depreciation of PP&E
Software amortisation
Impairment of available-for-sale investments
Share-based payments
EBITDA
Net capital expenditure
Working capital movement
(net of restructuring and reorganisation accruals)
Operating cash flow
Restructuring and reorganisation cash flow
Net interest
Taxation
Free cash flow
Acquisitions less disposals
Dividends
Net issue of shares
Net funds flow
Opening net debt
Non-cash items
Foreign exchange
Closing net debt
2009
£m
309.5
9.2
13.5
–
0.6
332.8
(22.0)
13.0
323.8
(26.3)
(46.4)
(27.3)
223.8
(38.5)
(38.2)
252.3
399.4
2008
£m
305.8
10.8
5.2
0.2
0.5
322.5
(34.9)
48.6
336.2
(19.2)
(67.8)
(39.2)
210.0
13.6
(73.9)
(0.7)
149.0
(1,341.8)
(2.0)
71.8
(872.6)
(1,244.9)
(1.5)
(244.4)
(1,341.8)
In the year ended 31 December 2009, before taking into account financing activities, spend on acquisitions or proceeds
from the sale of assets, the Group generated free cash flow of £223.8m (2008: £210.0m). This demonstrates the ability
of the Group to deleverage quickly.
22
Informa plc Annual Report & Financial Statements for the year ended 31 December 2009
The change to net debt arising from acquisitions (net of disposals) was a £38.5m outflow (2008: £13.6m inflow) which
comprises current year acquisitions of £13.2m (2008: £5.7m) and consideration in respect of acquisitions completed
in prior years of £25.3m (2008: £10.6m). There were no material disposals during the year (2008: £29.9m). In the prior
year the Group disposed of its interest in Map of Medicine for net cash consideration of £33.6m generating a gain on
disposal of £17.8m profit on disposal. We have robust criteria for assessing acquisitions and we target acquisitions and
alliances that accelerate our strategic development and meet our financial criteria.
Net debt decreased by £469.2m from £1,341.8m to £872.6m reflecting cash flow of £399.4m, including the rights issue
net proceeds of £242m, and favourable exchange movements of £71.8m. During the year the Group paid £38.2m in
relation to the 2008 final and the 2009 first interim dividends.
Financing and Bank covenants
The Group has in place a single credit agreement which comprises an amortising term loan facility, fully drawn in three
currency tranches, and a non-amortising £500m multicurrency revolving credit facility. The rights issue proceeds were
used to prepay the scheduled 2009 and 2010 term loan repayments, leaving term loan balances at 31 December 2009
of £828m drawn in US dollar 630m, Euro 135m, and Sterling 316m. The term loan and revolving credit facilities mature
in May 2012 and we expect there to be comfortable headroom on our facilities through to that date.
The principal financial covenant ratios under these facilities are maximum net debt to EBITDA of 3.5 times and
minimum EBITDA interest cover of 4.0 times, tested semi-annually. At 31 December 2009 both financial covenants
were comfortably achieved, with the ratio of net debt (using average exchange rates) to EBITDA reduced from 3.8
times at 31 December 2008 to 2.7 times at 31 December 2009.
During May 2009 the Group successfully undertook a 2 for 5 rights issue offering 170m new ordinary shares at 150p
per share. The rights issue raised £242m, net of expenses of £13m.
Balance sheet
Deferred income, which represents income received in advance, was down 2% on a constant currency basis at
31 December 2009 compared to the same date in 2008. Deferred income arises primarily from advance subscriptions
or forward bookings for trade shows, exhibitions or conferences. Subscriptions generated by our academic journal
business renew annually a year in advance and many trade shows and exhibitions, because of their market leading
status, receive commitments up to a year in advance.
Pensions
The Group’s financial obligations to its pension schemes remain relatively small compared to the size of the Group, with
net pension liabilities at 31 December 2009 of £11.3m (2008: £10.3m).
Following the completion of the triennial valuation of the main defined benefit scheme, the Informa Final Salary
Scheme, a revised deficit funding plan has been agreed with the trustees to eliminate the deficit. The revised funding
schedule extends over the next nine years, requiring the Group to pay into the pension fund an additional £1m in 2010,
rising annually by £1m to an additional £4m per annum in 2013 through to 2018.
Revised deficit funding plans have also been agreed for the two smaller defined benefit schemes. The Group will
pay additional pension contributions of £0.4m in 2010 rising to £0.9m per annum in 2013 through to 2018.
adam walker
Finance Director
Informa plc Annual Report & Financial Statements for the year ended 31 December 2009
23
the Year in Review
BoaRD oF DIRectoRs
1.
2.
3.
4.
1.
Derek mapp
non-executive chairman1 (59)
3.
adam walker
Finance Director (42)
Derek Mapp joined the board of Taylor & Francis Group
plc as a Non-Executive Director in 1998. He is currently
Non-Executive Chairman of Salmon Developments plc
and Executive Chairman of Imagesound plc. He is also
Chairman of the British Amateur Boxing Association.
Following the merger of Informa and Taylor & Francis in
May 2004, he was appointed as Non-Executive Director
and was designated the Senior Independent Director
on 10 March 2005. On 17 March 2008 he was appointed
as Non-Executive Chairman. He is also Chairman of the
Nomination Committee.
2.
Peter Rigby
chief executive1 (54)
After qualifying as an accountant, Peter Rigby joined
Metal Box. In 1981 he moved into the media industry
joining Book Club Associates, a joint venture between
WH Smith and Doubleday. In 1983 he joined Stonehart
Publications which was acquired by International
Business Communications (later renamed IBC) in 1986.
After two years as Finance Director of IBC, Peter Rigby
was appointed Deputy Chief Executive and in 1989
became its Chief Executive, leading IBC’s substantial
geographic expansion. Since the 1998 merger between
IBC and LLP, by which Informa was created, he has been
Executive Chairman or Chief Executive. He is a member
of the Nomination Committee. He is also Non-Executive
Chairman of Electric Word plc.
Adam Walker joined Touche Ross in 1989. Following his
qualification as a Chartered Accountant he specialised
in corporate finance work. In 1994 he joined NatWest
Markets as an Associate Director. In 1998 his team
joined Arthur Andersen where he became a Director of
Corporate Finance. In 2001, he joined National Express
Group Plc as Head of Corporate Development, and was
appointed to the Board as Finance Director in 2003.
He took up his appointment as Finance Director of the
Company on 28 March 2008.
4.
Dr Pamela Kirby
non-executive Director 2 3 (56)
Dr Kirby is currently Chairman of Scynexis Inc., a privately
held chemistry-focused drug discovery and development
company based in the US. She is also a Non-Executive
Director of Smith & Nephew plc and Novo Nordisk A/S.
She was previously the Non-Executive Chairman of
Oxford ImmuNotec Limited and was the CEO of US-based
Quintiles Transnational Corporation. Prior to joining
Quintiles, Dr Kirby held various senior positions in the
pharmaceutical industry at Astra AB (now AstraZenca plc),
British Biotech plc (now Vernalis plc) and F. Hoffman-La
Roche Limited. She has a PhD in Clinical Pharmacology
from the University of London. Dr Kirby was appointed as
a Non-Executive Director of Informa in September 2004.
She chairs the Remuneration Committee and is a member
of the Audit Committee. She was also appointed as Senior
Independent Non-Executive Director on 17 March 2008.
24
Informa plc Annual Report & Financial Statements for the year ended 31 December 2009
5.
6.
7.
5.
John Davis
non-executive Director1 2 3 (48)
7.
John Burton
company secretary (45)
John Burton is a solicitor and was formerly a partner
at CMS Cameron McKenna for eight years. In that role,
he advised the Group in relation to the LLP and IBC
merger in 1998, the acquisition of PJB Publications
in 2003, the Taylor & Francis merger in 2004 and the
IIR acquisition and rights issue in 2005. John Burton
was appointed as Group General Counsel and Company
Secretary in June 2006.
John Davis has been Chief Financial Officer of Yell Group
plc since 2000. He qualified as a Chartered Accountant
with Price Waterhouse and has a Masters in Management
from the Stanford Graduate School of Business. John Davis
has previously held positions with Pearson plc, where he
was latterly Finance Director of the FT Group, and Emap
plc, which he joined in 1989, where he was Director of
Corporate Finance and Treasury between 1995 and 1997.
John Davis was appointed as a Non-Executive Director
with effect from 1 October 2005. He is a member of the
Nomination, Remuneration and Audit Committees.
6.
Dr Brendan o’neill
non-executive Director2 3 (61)
Dr O’Neill is currently a Non-Executive Director of Tyco
International Inc, Towers Watson Inc and Endurance
Speciality Holdings Limited. From 1999 to 2003 he was
Chief Executive of ICI plc. Prior to joining ICI in 1998
he was an Executive Director of Guinness plc with
responsibility for the Guinness Group’s worldwide
brewing interests. He was also Non-Executive Director of
Emap plc from 1995 to 2002. Dr O’Neill was appointed as
a Non-Executive Director with effect from 1 January 2008.
He chairs the Audit Committee and is a member of the
Remuneration Committee.
¹ Member of Nomination Committee
² Member of Remuneration Committee
³ Member of Audit Committee
Informa plc Annual Report & Financial Statements for the year ended 31 December 2009
25
the Year in Review
aDvIseRs
auditors
Deloitte LLP
2 New Street Square
London EC4A 3BZ
Financial advisers
Greenhill & Co. International LLP
Lansdowne House
57 Berkeley Square
London W1J 6ER
stockbrokers
Merrill Lynch International
Merrill Lynch Financial Centre
2 King Edward Street
London EC1A 1HQ
RBS Hoare Govett Limited
250 Bishopsgate
London EC2M 4AA
Public Relations
Maitland
Orion House
5 Upper St Martin’s Lane
London WC2H 9EA
Principal solicitors
CMS Cameron McKenna LLP
Mitre House
160 Aldersgate Street
London EC1A 4DD
Ashurst LLP
Broadwalk House
5 Appold Street
London EC2A 2HA
Mourant du Feu & Jeune
22 Grenville Street
St Helier
Jersey JE4 8PX
Registrars
Equiniti (Jersey) Limited
PO Box 63
11-12 Esplanade
St Helier
Jersey JE4 8PH
26
Informa plc Annual Report & Financial Statements for the year ended 31 December 2009
DIRectoRs’ RePoRt
The Directors present their Annual Report on the affairs of
Informa plc (the Company) and its subsidiaries (the Group),
together with the financial statements and auditors’
report, for the year ended 31 December 2009. The details
of the business, the development of the Group and its
subsidiaries and likely future developments are set out
in pages 2 to 18 of this document. The notice concerning
forward looking statements is set out on page 133.
Principal activities
Informa is a leading international provider of specialist
information and services for the academic and scientific,
professional and commercial business communities. The
subsidiary and associated undertakings principally affecting
the profits or net assets of the Group in the year are listed in
Note 18 to the Consolidated Financial Statements.
new holding company
Business Review
On 30 June 2009, pursuant to a Scheme of Arrangement
(the Scheme) under Part 26 of the Companies Act 2006,
Informa plc (Informa), a public company limited by
shares, incorporated in Jersey with number 102786
and domiciled in Switzerland, became the new parent
holding company of the Informa group. The Scheme was
approved by the High Court of Justice of England and
Wales and by shareholders at a general meeting of the
Company held on 2 June 2009.
Informa was incorporated as Informa Limited under the
Companies (Jersey) Law 1991 on 11 March 2009 and
changed its name to Informa plc on 29 April 2009.
Pursuant to the Scheme, ordinary shares in Informa were
admitted to the UK Listing Authority’s Official List on
30 June 2009 and trading on the London Stock Exchange’s
market for listed securities commenced on 30 June 2009.
The listing of the English registered Informa plc’s (Old
Informa) ordinary shares on the UK Listing Authority’s
Official List was cancelled on 30 June 2009. Under the
terms of the Scheme, shareholders in Old Informa received
one share in Informa for every share held in Old Informa.
Upon the Scheme becoming effective, Old Informa
changed its name to Informa Group plc and became a
wholly-owned subsidiary of Informa.
Further information on the terms of the Scheme is set out
in the Prospectus relating to the Scheme published by
the Company on 1 May 2009, which can be viewed on the
Company’s website at www.informa.com. Information on
the Company’s share capital and the rights issue of Old
Informa which was completed on 27 May 2009 can be found
on page 28 and in Note 25 to the Consolidated Financial
Statements.
In order to give a view across the year, references
in this section and in the Corporate Governance and
Remuneration reports on pages 38 to 54, to Directors
and the Board refer to those of Old Informa up to
29 June 2009 and to those of Informa from 30 June 2009.
The Business Review is a review of the development
and the operational and financial performance of the
business during the year ended 31 December 2009
and contains a description of the principal risks and
uncertainties facing the business. Information that forms
part of the Business Review is found in the following
sections of the Annual Report:
•
•
•
•
•
information about the development and performance
of the business, and key performance indicators, of
the Company during the financial year and future
prospects are set out in the Chairman’s Statement
and the Chief Executive’s Review on pages 14 to 18;
principal risks and uncertainties are described on
pages 31 to 36;
information about the Company’s Corporate
Responsibility policies, including environmental,
employee, and social and community issues are
set out in the Corporate Governance Statement
on pages 43 to 44;
details of the principal subsidiaries are set out in
Note 18; and
the results for the year are explained in detail in
the Financial Review and are summarised in the
Consolidated Income Statement on page 60 and the
related Notes.
In relation to the use of financial instruments by the
Group, a review is included within Note 24 to the
Consolidated Financial Statements. There are no
significant differences between the market value of
any interests in land of the Group and the amount at
which those interests are included in the Consolidated
Statement of Financial Position.
As a whole the Annual Report provides information about
the Group’s businesses, its financial performance during
the year and likely future developments.
Informa plc Annual Report & Financial Statements for the year ended 31 December 2009
27
the Year in Review
DIRectoRs’ RePoRt continued
Other than as described in this report, there have not been
any significant changes to the Group’s principal activities
during the year under review and the Directors are not
aware, at the date of this report, of any likely major changes
in the Group’s activities in the new financial year. There have
been no significant events since the reporting date.
Dividends
The Directors have declared that a second interim
dividend for the year of 7.85p per ordinary share to be
paid on 19 May 2010 to ordinary shareholders registered
as at the close of business on 16 April 2010. Together
with the first interim dividend of 3.6p per ordinary share
paid on 18 September 2009, this makes a total for the
year of 11.45p per ordinary share (2008: 10p). (The Group
is paying a second interim dividend rather than a final
dividend due to the operation of the Dividend Access
Plan described below.)
The Company operates a Dividend Access Plan for all
its shareholders. Those shareholders who hold fewer
than 100,000 shares are deemed to consent to receive
their dividends from Informa DAP Limited, a UK Informa
company. Those shareholders holding over 100,000 shares
may elect to join the Dividend Access Plan by completing
an Election Form. This form is available from the
Company’s Registrars whose contact details can be found
on page 134. If shareholders holding over 100,000 shares
do not elect to join the Dividend Access Plan, dividends
will be received from the Company which is domiciled
in Switzerland. Shareholders may elect to receive shares
instead of cash from their dividend allocation through the
Dividend Reinvestment Plan (DRIP).
Directors and Directors’ Interests
The names of Directors of the Company are set out on
pages 24 to 25, which includes brief biographical details.
The Non-Executive Directors of Old Informa, being
Derek Mapp, Dr Pamela Kirby, John Davis and Dr Brendan
O’Neill, ceased to be Directors on 30 June 2009 when
the Scheme became effective. Sean Watson resigned at
the Annual General Meeting (AGM) of Old Informa on
8 May 2009. There were no other changes to the Board
of Old Informa prior to 30 June 2009.
Derek Mapp became a Director of Informa on
12 March 2009 following the incorporation of the
Company. Peter Rigby, Adam Walker, Dr Pamela Kirby,
John Davis and Dr Brendan O’Neill became Directors
of the Company on 27 April 2009.
The remuneration and interests in the share capital
of the Company of the Directors who held office as
at 31 December 2009 are set out in the Directors’
Remuneration Report on pages 45 to 54. All the Directors
offer themselves for re-election by the shareholders at
the next AGM. Details of the contracts of the Executive
and Non-Executive Directors with the Company can
be found on page 50. There are no agreements in
place between the Company and its Directors and
employees providing for compensation for loss of office
of employment (whether through resignation, purported
redundancy or otherwise) that occurs because of a
takeover bid. No Director was materially interested in
any contract of significance.
Directors’ Indemnities
Indemnities are in force under which the Company
has agreed to indemnify the Directors, to the extent
permitted by Jersey law and the Company’s Articles of
Association, in respect of any liability arising out of, or in
connection with, the execution of their powers, duties
and responsibilities, as Directors of the Company, any of
its subsidiaries or as a trustee of an occupational pension
scheme for employees of the Company. The Company
has purchased and maintains Directors’ and Officers’
insurance cover against certain legal liabilities and costs
for claims in connection with any act or omission by its
Directors and officers in the execution of their duties.
Rights Issue and changes in share capital
Old Informa raised £242m (net of expenses) by way of a
2 for 5 fully underwritten rights issue at 150 pence per
share on 27 May 2009. Immediately prior to the Scheme
becoming effective on 30 June 2009, Old Informa had
599,339,255 ordinary shares of 0.1 pence in issue. On the
Scheme becoming effective, the issued share capital of
Informa was 599,339,255 ordinary shares of 27 pence.
Informa also carried out a reduction of its share capital
by reducing the nominal value of each issued and
authorised but unissued ordinary share in the capital
of the Company from 27 pence to 0.1 pence, and the
cancellation of the Company’s share premium account.
The reductions in share capital and share premium
account were approved by shareholders at a general
meeting of the Company held on 2 June 2009. Both
the reduction of share capital and cancellation of share
premium account were confirmed by the Royal Court
of Jersey on 20 July 2009 and registered with the Jersey
Registrar of Companies on 22 July 2009.
28
Informa plc Annual Report & Financial Statements for the year ended 31 December 2009
Registration and Domicile
The Company’s registered office is at 22 Grenville Street,
St Helier, Jersey, JE4 8PX. The Company is registered in
Jersey under number 102786. The Company is domiciled
in Switzerland with its principal office at Gubelstrasse 11,
CH-6300, Zug.
annual general meeting
The AGM will be held on 27 April 2010. The notice
is being despatched as a separate document.
charitable and Political contributions
The Group made charitable donations during the year of
£0.2m (2008: £0.2m), principally to local charities serving
some of the communities in which the Group operates.
No political donations were made.
supplier Payment Policy
The Company’s policy, which is also applied by the
Group, is to settle terms of payment with suppliers when
agreeing the terms of each transaction, to ensure that
suppliers are aware of the terms of payment and to
abide by the agreed terms, provided that the supplier
has provided the goods or services in accordance with
the relevant terms and conditions. Trade payables of the
Group at 31 December 2009 were equivalent to 52 days’
purchases (2008: 46 days), based on the average daily
amount invoiced by suppliers during the year.
substantial shareholdings
As at 2 March 2010, the Company had been notified
in accordance with Chapter 5 of the Disclosure and
Transparency Rules (DTRs) of the FSA of the following
substantial interests in the issued ordinary share capital
of the Company:
FMR LLC (Fidelity)
Prudential plc
Number
of shares
55,380,804
50,975,689
Legal & General Group plc
35,939,012
Standard Life Investments
Limited
20,561,397
% held
9.24
8.50
5.99
3.43
As at 2 March 2010, the Company’s issued share capital
comprised 599,250,457 ordinary shares with a nominal
value of 0.1p each. Details of the authorised and issued
share capital, together with movements in the issued
share capital during the year, are shown in Note 25 of the
Consolidated Financial Statements.
The rights attaching to the Company’s ordinary shares,
being the only share class of the Company, are set out in
the Company’s Articles of Association (Articles), which
can be found at www.informa.com. Subject to Jersey law,
any share may be issued with or have attached to it such
preferred, deferred or other special rights and restrictions
as the Company may by special resolution decide or, if
no such resolution is in effect or so far as the resolution
does not make specific provision, as the Board may
decide. No such resolution is currently in effect. Subject
to the recommendation of the Board, holders of ordinary
shares may receive a dividend. On liquidation, holders of
ordinary shares may share in the assets of the Company.
Holders of ordinary shares are also entitled to receive the
Company’s Annual Report and Accounts and, subject to
certain thresholds being met, may requisition the Board
to convene a general meeting (GM) or the proposal of
resolutions at AGMs. None of the ordinary shares carry
any special rights with regard to control of the Company.
Holders of ordinary shares are entitled to attend and
speak at GMs of the Company and to appoint one or
more proxies or, if the holder of shares is a corporation,
a corporate representative. On a show of hands, each
holder of ordinary shares who (being an individual) is
present in person or (being a corporation) is present by
a duly appointed corporate representative, not being
himself a member, shall have one vote and on a poll,
every holder of ordinary shares present in person or by
proxy shall have one vote for every share of which he is
the holder. Electronic and paper proxy appointments
and voting instructions must be received not later than
48 hours before a GM. A holder of ordinary shares can
lose the entitlement to vote at GMs where that holder
has been served with a disclosure notice and has failed
to provide the Company with information concerning
interests held in those shares. Except as (1) set out above
and (2) permitted under applicable statutes, there are
no limitations on voting rights of holders of a given
percentage, number of votes or deadlines for exercising
voting rights.
The Directors may refuse to register a transfer of a
certificated share which is not fully paid, provided that
the refusal does not prevent dealings in shares in the
Company from taking place on an open and proper
basis or where the Company has a lien over that share.
Informa plc Annual Report & Financial Statements for the year ended 31 December 2009
29
the Year in Review
DIRectoRs’ RePoRt continued
The Directors may also refuse to register a transfer of a
certificated share unless the instrument of transfer is: (i)
lodged, duly stamped (if necessary), at the registered
office of the Company or any other place as the Board
may decide accompanied by the certificate for the
share(s) to be transferred and/or such other evidence as
the Directors may reasonably require to show the right
of the transferor to make the transfer; or (ii) in respect of
only one class of shares.
Transfers of uncertificated shares must be carried out
using CREST and the Directors can refuse to register a
transfer of an uncertificated share in accordance with the
regulations governing the operation of CREST.
The Directors may decide to suspend the registration
of transfers, for up to 30 days a year, by closing the
register of shareholders. The Directors cannot suspend
the registration of transfers of any uncertificated shares
without obtaining consent from CREST.
There are no other restrictions on the transfer of ordinary
shares in the Company except: (1) certain restrictions may
from time to time be imposed by laws and regulations
(for example insider trading laws); (2) pursuant to the
Company’s share dealing code whereby the Directors and
certain employees of the Company require approval to
deal in the Company’s shares; and (3) where a shareholder
with at least a 0.25% interest in the Company’s certificated
shares has been served with a disclosure notice and
has failed to provide the Company with information
concerning interests in those shares. There are no
agreements between holders of ordinary shares that are
known to the Company which may result in restrictions on
the transfer of securities or on voting rights.
Shares are from time to time held by a trustee in order
to satisfy entitlements of employees to shares under the
Group’s share schemes. Usually the shares held on trust
are no more than sufficient to satisfy the requirements
of the Group’s share schemes for one year. The shares
held by these trusts do not have any special rights with
regard to control of the Company. While these shares
are held on trust their rights are not exercisable directly
by the relevant employees. The current arrangements
concerning these trusts and their shareholdings are set
out on page 52.
There are no significant agreements to which the
Company is a party that take effect, alter or terminate
upon a change of control following a takeover bid (nor
any agreements between the Company and its Directors
or employees providing for compensation for loss of
office or employment that occurs because of a takeover
bid) except for the Group’s banking facilities described in
Note 24 of the Consolidated Financial Statements.
The rules for appointment and replacement of the Directors
are set out in the Articles. Directors can be appointed by the
Company by ordinary resolution at a GM or by the Board
upon the recommendation of the Nomination Committee.
The Company can remove a director from office, including
by passing an ordinary resolution or by notice being given
by all the other Directors.
The powers of the Directors are set out in the Articles and
provide that the Board may exercise all the powers of the
Company including to borrow money up to an aggregate
of three times a formula based on adjusted capital and
reserves. The Company may by ordinary resolution
authorise the Board to issue shares, and increase,
consolidate, sub-divide and cancel shares in accordance
with its Articles and Jersey law.
The Company may amend its Articles by special
resolution approved at a GM.
Purchase of own shares
At the end of the year, the Directors had authority,
under a shareholders’ resolution passed on 27 April 2009
conditionally upon the Scheme becoming effective, to
purchase through the market up to 10% of the Company’s
issued ordinary shares as at 30 June 2009. This authority
expires at the conclusion of the AGM of the Company to be
held in 2010.
employee consultation
The Group places considerable value on the involvement
of its employees and continues to keep them informed
on matters affecting them and on the various factors
affecting the performance of the Group. This is achieved
principally through formal and informal meetings, email
updates and via the Company’s global intranet site,
which enables staff to put anonymous questions to the
Executive management. Employee representatives are
consulted regularly on a wide range of matters affecting
their current and future interests.
In 2009 the Group decided to develop a more thorough
and focused staff survey, moving away from the 2008
survey which had a broader focus on the brand. A
pilot staff survey was carried out by Taylor and Francis,
globally. It aimed to identify the major drivers of
30
Informa plc Annual Report & Financial Statements for the year ended 31 December 2009
employee engagement, and improve understanding of
the reasons behind voluntary turnover of staff.
All employees worldwide are also invited periodically to
attend webinars, take part in live on-line polls, and ask
the Executive Directors questions about the business
and its future. The webinars, including the results of the
polls, are posted on the Company’s intranet so that those
employees who are unable to attend can view them.
At a general meeting of the Company held on 2 June 2009, a
new Share Incentive Plan (SIP) was approved by shareholders
for its adoption pursuant to the Scheme becoming effective
on 30 June 2009. It is substantially in the same form as the
one in place for Old Informa. All UK employees are eligible
to participate in the SIP, an Inland Revenue Approved All
Employee Share Incentive Plan offering UK employees the
opportunity to purchase annually up to £1,500 of shares in
the Company out of pre-tax salary. In addition, from 2008, all
US employees are eligible to participate in the Company’s US
Employee Stock Purchase Plan which offers US employees the
opportunity to purchase annually up to $2,940 of shares in the
Company at a 15% discount to the prevailing market price.
equal opportunities
Informa believes in equality of opportunity for all
employees based on merit and that no employee or job
applicant should receive less favourable treatment on
the grounds of age, gender, sexual orientation, disability,
colour, race, religion, nationality or ethnicity. Informa’s
divisions are all disabled friendly business operations.
The Company’s equal opportunity policy not only covers
fair recruitment, but also the opportunities given to staff on
training and development, and the Group’s views on equal
opportunities form a part of the employee induction training.
The Group’s objective is to provide continued suitable
employment to staff whose circumstances change, with
appropriate training if necessary. Informa’s offices are
required to enable access for all abilities and comply with
all applicable local laws.
A review of the existing equal opportunities policy
is being carried out during 2010 to produce a
comprehensive diversity policy.
Risks and uncertainties
A number of factors (risk factors) affect the Group’s
operating results and financial condition. In common
with other information providers, the Group’s profitability
depends in part on the prevailing economic environment
and the strength of the academic, professional and
business communities to which it sells. In addition,
the Group’s profitability is dependent on maintaining
a strong and highly motivated management team,
maintaining brand reputation, quality of information and
its ability to use and protect the security of its marketing
databases. This section describes some of the principal
risk factors that the Directors believe could materially
affect the Group. The Group adopts a risk management
process that is monitored by the Board and which is
intended to ensure a consistent and coherent approach
to the risk factors that are described in this section and
to those other risk factors that may arise or which may
become material in the future.
1. The Group’s businesses are affected by the
conditions of the sectors and regions in which
they and their customers operate
The performance of the Group depends on the
financial health and strength of its customers, which
in turn is dependent on the economic conditions in
the industries and geographic regions in which they
operate. Traditionally, spending on parts of the Group’s
goods and services (products) has been cyclical due
to companies spending significantly less in times
of economic slowdown (such as those prevailing
at present), downward pressure on budgets and
corporate consolidation in certain sectors (e.g. financial
services). The current global economic conditions also
mean that certain customers might become insolvent
which may in turn lead them to default on payment for
products already purchased. Unforeseen disruptions,
whether caused by natural causes or otherwise,
can also be detrimental to the Group’s businesses,
particularly events and training.
2.
The markets in which the Group operates are highly
competitive and subject to rapid change
The markets for the Group’s products are highly
competitive and in a state of ongoing and
uncertain change. Some of the Group’s principal
competitors have substantial financial resources,
recognised brands, technological expertise and
market experience that may better position them to
anticipate and respond to these changes. If the Group
is unable to successfully enhance and/or develop
its products in a timely fashion, the Group’s revenue
could be affected. There are also low barriers to entry
in relation to certain parts of the Group’s businesses.
Informa plc Annual Report & Financial Statements for the year ended 31 December 2009
31
the Year in Review
DIRectoRs’ RePoRt continued
3.
The Group’s intellectual property (IP) rights may not
be adequately protected and may be challenged by
third parties
The Group relies on agreements with its customers
and trademark, copyright and other IP laws to
establish and protect the IP rights subsisting in its
journals, books and training materials. However,
these rights may be challenged, limited, invalidated
or circumvented by third parties seeking to infringe
or otherwise profit from the Group’s proprietary
rights without its authorisation. In addition,
although there is now a small amount of copyright
legislation relating to digital content, these laws
remain under legal review and there remains
significant uncertainty as to the form copyright law
may ultimately take. Additionally, enforcement of
IP rights is limited in certain jurisdictions, and the
global nature of the internet makes it impossible
to control the ultimate destination of websites.
The Group may also be the subject of claims of
infringement of the rights of others or party to
claims to determine the scope and validity of the IP
rights of others. Litigation based on these claims is
common amongst companies that utilise digital IP.
4.
The Group’s Academic division’s publications and
events are likely to be adversely affected by changes
in the purchasing behaviour of academic institutions
Academic institutions fund purchases of Group
products from limited budgets that may be sensitive
to changes in private (including endowments) and
governmental sources of funding particularly in the
current global economic conditions. Accordingly,
any such decreases are likely to affect adversely the
Group’s results within its Academic division.
5. Currency fluctuations may have a significant impact
on the reported revenue and profit of the Group
The financial statements of the Group are expressed
in pounds sterling but its business operations
receive revenue and incur expense in other
currencies in particular, US Dollars and Euros. The
relative movements between the exchange rates
in the currencies in which costs are incurred and
the currencies in which revenue is earned can
significantly affect the results of those businesses.
6.
The Group has exposure to various risks from its use
of financial instruments
These risks include capital risk, market risk, credit risk
and liquidity risk. These risks are described in detail in
Note 24 to the Consolidated Financial Statements.
7.
The Group may be adversely affected by its borrowings
and debt service obligations in the longer-term
The Group has in place a single credit agreement
which comprises an amortising term loan facility,
fully drawn in three currency tranches, and a non-
amortising £500m multicurrency revolving credit
facility. The 2009 rights issue proceeds were used
to prepay the scheduled 2009 and 2010 term loan
repayments, leaving term loan balances at
31 December 2009 of £828m drawn in US dollar
630m, Euro 135m and Sterling 316m.
The Group’s debt service obligations under its credit
facilities could have negative consequences for the
Group, including the following: restricting the Group’s
ability to pay dividends; limiting the Group’s ability
to obtain additional financing in the longer-term;
increasing the Group’s vulnerability to increases in
interest rates; requiring a substantial portion of the
Group’s cash flow for the payment of interest on its
debt and reducing the Group’s ability to use its cash
flow to fund working capital, capital expenditures
and general corporate requirements; hindering the
Group’s ability to adjust rapidly, and increasing the
Group’s vulnerability to general adverse economic
and industry conditions; limiting the Group’s
flexibility in planning for, or responding to, changes in
its business; and placing the Group at a competitive
disadvantage to other, less leveraged competitors.
There can be no assurance that in the event of
unforeseen changes over the longer-term, the Group’s
cash flow will be sufficient for repayment of the Group’s
indebtedness nor that the current difficult conditions
in the credit markets will not exist if the Group seeks
to refinance its credit facilities in the longer-term,
either prior to or at maturity in May 2012.
8.
If the financial performance of the Group declines
it may in the longer-term not be able to maintain
compliance with the covenants in its credit facilities
The Group’s credit facilities contain covenants and
undertakings with which the Group must comply,
including a maximum net debt to Earnings Before
32
Informa plc Annual Report & Financial Statements for the year ended 31 December 2009
Interest, Taxes, Depreciation and Amortisation
(EBITDA) covenant and minimum EBITDA
interest cover covenant, each of which is tested
semi-annually. If the Group were to fail to comply
with any of the financial covenants in its credit
facilities (e.g. due to a reduction in its revenue
arising from continued deterioration of economic
conditions or other factors outside the Group’s
control), it could result in acceleration of the
Group’s obligations to repay those borrowings or
cancellation of those facilities. In the event that
the Group anticipates such a breach or otherwise
believes it had insufficient headroom for its
operations, the Group may be required to sell assets
at depressed prices.
9.
The Group’s continued growth depends, in part,
on its successful ability to identify and complete
acquisitions and the Group may have difficulty in the
longer-term in procuring additional debt financing
for such acquisitions
Although the Group has historically been able to
obtain debt financing for its acquisitions on terms it
considers acceptable, it is highly unlikely, particularly
in the near-term, that future debt financing will be
available on such terms due to significant market
deterioration in the credit markets and a tightening of
lender standards and terms. Additionally, covenants in
the Group’s existing and future financing facilities may
restrict the Group’s ability to undertake acquisitions.
Furthermore, attractive acquisitions are difficult
to identify and complete for a number of reasons,
including competition among prospective buyers.
In addition, any acquisition the Group may complete
may be made at a substantial premium, and there
can be no assurances that the Group will achieve the
expected return on its investment, particularly as the
success of any acquisition also depends in part on the
Group’s ability to integrate the acquired business or
assets. This process may involve unforeseen difficulties
and integration could take longer than anticipated
as well as requiring a disproportionate amount of
management’s attention and financial resources.
Further, the Group may not be able to maintain
or improve the historical financial performance of
acquired businesses or otherwise derive all of the
anticipated benefits from its acquisitions, such as
reduced operating costs due to centralised services.
10. The Group relies on the experience and talent of its
senior management and on its ability to recruit and
retain key employees for the success of its business
The successful management and operations of the
Group are reliant upon the contributions of its senior
management and other key personnel. In addition,
the Group’s future success depends in part on its
ability to continue to recruit, motivate and retain
highly experienced and qualified employees in the
face of intense competition from other companies.
Additionally, many of the Group’s key employees
are employed by the Group under profit-sharing
arrangements with respect to the businesses they
operate, and in times of declining profit there can be
no assurances that the Group will be able to retain
such senior management or other key personnel (or
indeed that the Group will be able to attract new
personnel to support the growth of its business).
11 The Group may be subject to impairment losses that
would reduce its reported assets and profit
Goodwill and intangible assets comprise a substantial
portion of the total assets of the Group and economic,
legal, regulatory, competitive, contractual and other
factors may impair the value of these assets. In such a
situation, accounting rules would require that the Group
reduce their carrying value and recognise an impairment
charge, which would reduce the Group’s reported assets
and earnings in the year as the impairment charge is
recognised. The assumptions used in the estimation of
value in use are, by their very nature, highly judgmental
and the Group could be required to recognise significant
impairment charges in the future.
12 Changes in tax laws or their application or
interpretation may adversely impact the Group
The Group operates in a large number of countries
and thus its earnings are subject to tax in many
jurisdictions. Relevant authorities may amend the
substance or interpretation of tax laws that apply to
the Group’s businesses, in a manner that is adverse
to the Group. There can therefore be no assurance
that the various levels of taxation to which the
Group is subject will not be increased or changed. In
addition, if any Group company is found to be, or to
have been, tax resident in any jurisdiction other than
those in which the Group is currently deemed to be
tax resident or to have a permanent establishment in
any such jurisdiction this may have a material adverse
effect on the amount of tax payable by the Group.
Informa plc Annual Report & Financial Statements for the year ended 31 December 2009
33
the Year in Review
DIRectoRs’ RePoRt continued
Given that the Company has moved its domicile to
Switzerland, the risk may be more pronounced.
16. The Group is dependent on the internet and
its electronic delivery platforms, networks and
distribution systems
13. Risks associated with doing business internationally
and the expansion into new geographic regions
presents new risk factors specific to these regions
The Group’s businesses could be adversely affected
by a variety of other international factors, including
changes in a specific country’s or regions political
and cultural climate or economic condition and
changes to, or variances among, foreign laws
(including laws relating to Intellectual Property
rights and contract enforcement) and regulatory
requirements. The Group’s expansion into various
geographic regions, also presents logistical and
management challenges related to business
cultures, language compliance and restrictions on
repatriation of earnings. The Group may face risks
in penetrating new geographic markets due to
established and entrenched competitors, difficulties
in developing products that are tailored to the
needs of local customers, lack of local acceptance
or knowledge of the Group’s products, lack of
recognition of its brands, and the unavailability of
local companies for acquisition.
14 The Group’s businesses and strategy are dependent
on the strength of the Group’s brands
The Group’s businesses are dependent on the
success of their brands. The Group’s success and
ability to compete is dependent, in part, upon
the Group’s ability to maintain and protect the
proprietary nature of these brands and thus to
prevent the Group’s competitors and others from
producing branded publications, events and training
courses based on the Group’s brands.
15.
Increased accessibility to free or relatively
inexpensive information sources may reduce
demand for the Group’s products
In recent years, more public sources of free or
relatively inexpensive information have become
available, particularly through the internet, and
this trend is expected to continue. For example,
some governmental and regulatory agencies have
increased the amount of information they make
publicly available at no cost. Such sources may
reduce demand for the Group’s products.
The Group’s businesses are increasingly dependent
on electronic platforms and distribution systems,
primarily the internet, for delivery of their products.
Any significant failure or interruption of these
systems, including sabotage, break-ins, terrorist
activities, natural disaster, service outages and
computer viruses could cause the Group’s systems to
operate slowly and thus offset the Group’s ability to
provide services to customers.
17. Breaches of the Group’s data security systems or other
unauthorised access to its databases could adversely
affect the Group’s businesses and operations
The Group has valuable databases and as part of its
businesses provides its customers with access to
database information. There are persons who may
try to breach the Group’s data security systems or
gain other unauthorised access to its databases
in order to misappropriate such information for
potentially fraudulent purposes. Because the
techniques used by such persons change frequently,
the Group may be unable to anticipate or protect
against the threat of breaches of data security or
other unauthorised access. This could damage the
Group’s reputation and expose it to a risk of loss or
litigation and possible liability, as well as increase
the likelihood of more extensive governmental
regulation of these activities in a way that could
adversely affect this aspect of the Group’s business.
18.
The Group is subject to regulation regarding the use
of personal customer data
The Group is increasingly required to comply
with strict data protection and privacy legislation
which restrict the Group’s ability to collect and use
personal information. The need to comply with
data protection legislation can affect the Group in
a number of material ways including, e.g. making
it more difficult to grow and maintain marketing
data and also through potential litigation relating
to the alleged misuse of personal data. In some
cases, the Group may rely on third party contractors
and employees to maintain its databases and seeks
to ensure that procedures are in place to comply
with the relevant data protection regulations. The
Group is exposed to the risk that its data could
34
Informa plc Annual Report & Financial Statements for the year ended 31 December 2009
be wrongfully appropriated, lost or disclosed, or
processed in breach of data protection regulation,
by or on behalf of the Group in which case, the
Group could face liability under data protection
laws and/or suffer reputational damage from the
resulting loss of the goodwill.
19. The Group’s training business derives revenue from
government spending
of its publishing subscription revenue. Changes in
government health policies and regulatory pressures
may affect pharmaceutical companies’ ability or desire
to continue to provide the same levels of spending
with the Group as they do currently.
21. The Group may operate in an increasingly
litigious environment, which may adversely affect
its financial results
A large proportion of the revenue from the Group’s
training businesses is derived from US federal and
state government agencies. Government spending,
both in the United States and elsewhere, may be
influenced by, among other things, the state of the
economy, competing priorities for appropriation,
political factors, changes in administration or control
of local governments and the timing and amount
of tax receipts and the overall level of government
expenditures. There can be no assurances that
United States federal and state departments will
continue to purchase the products of the Group’s
training business to the extent they have done
so historically or at all or the implementation of
contracts with government agencies may be
delayed or cancelled.
20. The Group may be adversely affected by enforcement
of and changes in legislation and regulation affecting
its businesses and that of its customers
Compliance with various laws and regulations may
impose significant compliance costs and restrictions
on the Group or alternatively fines for non-compliance.
In addition, such regulations often provide broad
discretion to the administering authorities and
changes in existing laws or regulations, or in their
interpretation or enforcement, could require the Group
to incur additional costs in complying with those
laws, or require changes to its strategy, operations
or accounting and reporting systems. In particular,
laws and regulations relating to communications,
data protection, e-commerce, direct marketing and
digital advertising have become more prevalent
in recent years. Existing and proposed legislation
and regulations may impose limits on the Group’s
collection and use of certain kinds of information
and its ability to communicate such information
effectively to its customers. Similarly, the Group’s
customers are required to comply with various laws,
regulations, administrative actions and policies that
are subject to change. For example, the Group relies
on the pharmaceutical industry for a proportion
The Group may become involved in legal actions and
claims arising in the ordinary course of business. Due
to the inherent uncertainty in the litigation process,
the resolution of any particular legal proceeding could
have a material adverse effect on the financial position
and results of operations of the Group. The Group is
significantly dependent on technology and the rights
related to it, including rights in respect of business
methods. This, combined with the recent proliferation of
“business-method patents” issued by the United States
Patent Office, and the increasingly litigious environment
that surrounds patents in general, increases the possibility
that the Group could be sued for patent infringement. If
such an infringement suit were successful, it is possible
that the infringing product would be enjoined by court
order and removed from the market and the Group
could be required to compensate the party bringing
the suit either by a damages claim or through ongoing
licence fees or other fees, and such compensation could
be significant, in addition to the legal fees that would be
incurred defending such a claim.
22. The Group’s UK defined benefit pension schemes are
currently in deficit and the cost of providing pension
benefits to existing and former employees is subject to
changes in pension fund values and changing mortality
The Group operates a number of defined benefit and
defined contribution pension schemes in the UK and
overseas. Although it currently is the Group’s policy to
offer defined contribution pension schemes to its new
employees, the Group has historically maintained
defined benefit schemes in the UK pursuant to
which the Group may be required to increase its
contributions to cover an increase in the cost of
funding future pension benefits or to cover funding
shortfalls under the Group’s pension schemes. The
funding position of the Group’s defined benefit
schemes has fluctuated and is likely to fluctuate
as a result of changes in economic conditions,
demographic experience, movements in interest
rates, the investment performance of the schemes’
assets and the longevity of the schemes’ members.
Informa plc Annual Report & Financial Statements for the year ended 31 December 2009
35
the Year in Review
DIRectoRs’ RePoRt continued
23. The structure of the Group following the
auditors
implementation of its Scheme of arrangement in
2009 may not yield the anticipated benefits
The Scheme was implemented to establish a corporate
structure which the Board considers would best
support the long-term growth of the Group; however
there can be no guarantee that the implementation
of the Scheme will yield all or any of the anticipated
benefits. In particular, the selection of Jersey as the
jurisdiction of incorporation, and Switzerland as the
jurisdiction of tax residence, of the company may
not ultimately facilitate the centralisation of certain
Group activities or the optimisation of the Group’s legal
and taxation structure, as these jurisdictions may not
offer the stable political and economic environment
or the less complex taxation system which are
currently anticipated. Additionally, Swiss or Jersey tax
authorities may amend, interpret or apply tax laws in
a manner that is adverse to the Group.
The Group effected an intra-group reorganisation in
connection with the scheme. There can be no guarantee
that a tax authority would not form a different opinion
or judgement on the tax treatment of the reorganisation
that differs from the position of the Group. In the event
that a differing view of a tax authority is subsequently
determined to be correct, this could have a detrimental
impact on the Group’s tax position and such detrimental
impact could be material.
24. Dividends paid under the Dividend Access Plan may
become subject to Swiss withholding tax at 35 per cent
Under current Swiss law withholding tax is payable
upon the Company’s payment of dividends (including
dividends paid under the Dividend Access Plan) in the
event that, and to the extent that, the total value of
dividends and other distributions paid by New Informa
exceeds the value of the Company immediately prior to
the scheme becoming effective. A potential charge
to withholding tax at 35 per cent. on dividends and
other distributions may arise upon such payments.
Further details in relation to certain of these risk factors,
and other risks relating to (1) the scheme of arrangement,
(2) the holding of Company’s ordinary shares and (3)
relating to US shareholders are set out on pages 11 to 22
of the prospectus issued by the Company on 1 May 2009.
Subject to stated restrictions, the document is available
for viewing at:
http://www.informa.com/investors/redomicile
Each of the persons who is a director at the date of
approval of this annual report confirms that:
•
•
so far as the Director is aware, there is no relevant
audit information of which the Company’s auditors
are unaware; and
the Director has taken all the steps that he/she
ought to have taken as a director in order to
make himself/herself aware of any relevant audit
information and to establish that the Company’s
auditors are aware of that information.
Deloitte LLP have expressed their willingness to continue
in office as auditors and a resolution to reappoint them will
be proposed at the forthcoming Annual General Meeting.
statement of Directors’ Responsibilities
The Directors are responsible for preparing the
financial statements in accordance with applicable
law and regulations.
Company law requires the Directors to prepare financial
statements for each financial year.
Under that law the Directors have elected to prepare the
financial statements in accordance with International
Financial Reporting Standards (IFRSs) as adopted by the
European Union. The financial statements are required
by law to be properly prepared in accordance with the
Companies (Jersey) Law 1991.
International Accounting Standard 1 requires that financial
statements present fairly for each financial year the
Company’s financial position, financial performance and
cash flows. This requires the faithful representation of the
effects of transactions, other events and conditions in
accordance with the definitions and recognition criteria
for assets, liabilities, income and expenses set out in the
International Accounting Standards Board’s ‘Framework for
the preparation and presentation of financial statements’.
In virtually all circumstances, a fair presentation will
be achieved by compliance with all applicable IFRSs.
However, the Directors are also required to:
•
•
properly select and apply accounting policies;
present information, including accounting policies,
in a manner that provides relevant, reliable,
comparable and understandable information;
36
Informa plc Annual Report & Financial Statements for the year ended 31 December 2009
•
•
provide additional disclosures when compliance
with the specific requirements in IFRSs are
insufficient to enable users to understand the
impact of particular transactions, other events and
conditions on the entity’s financial position and
financial performance; and
make an assessment of the Company’s ability to
continue as a going concern.
The Directors are responsible for keeping proper
accounting records that disclose with reasonable accuracy
at any time the financial position of the company and
enable them to ensure that the financial statements
comply with the Companies (Jersey) Law 1991. They
are also responsible for safeguarding the assets of the
company and hence for taking reasonable steps for the
prevention and detection of fraud and other irregularities.
The Directors are responsible for the maintenance and
integrity of the corporate and financial information included
on the Company’s website. Legislation in the UK governing
the preparation and dissemination of financial statements
may differ from legislation in other jurisdictions.
In accordance with DTR 4.1.12, the Directors confirm that,
to the best of their knowledge:
•
•
the financial statements have been prepared in
accordance with the applicable set of accounting
standards and give a true and fair view of the assets,
liabilities, financial position and profit or loss of the
Company and the undertakings included in the
consolidation taken as a whole; and
the year end review includes a fair review of the
development and performance of the business and
the position of the Company and the undertakings
included in the consolidation taken as a whole,
together with a description of the principal risks and
uncertainties that they face.
Approved by the Board and signed on its behalf by
John Burton
Company Secretary
2 March 2010
Informa plc Annual Report & Financial Statements for the year ended 31 December 2009
37
the Year in Review
coRPoRate goveRnance statement
The Company is committed to the principles of corporate
governance contained in the Combined Code on
Corporate Governance (the Code) that was issued in 2008
by the Financial Reporting Council for which the Board is
accountable to shareholders. Throughout the year ended
31 December 2009 the Company was in compliance with
all the Code provisions set out in Section 1 of the Code.
Together this report and the Directors’ Remuneration
Report explain how the Company has applied the
principles and supporting principles of Good Governance
set out in Section 1 of the Code.
On 30 June 2009, Informa plc (Informa), a public
company limited by shares, incorporated in Jersey with
number 102786 and domiciled in Switzerland became
the new parent company for the Informa Group of
companies, pursuant to a scheme of arrangement under
Part 26 of the Companies Act 2006. As a company listed
on the London Stock Exchange, Informa is subject to
the Listing Rules of the Financial Services Authority and
voluntarily complies with the provisions of the Combined
Code and relevant institutional shareholder guidelines.
Although Informa is not subject to the UK Companies
Act, the Board considers it appropriate to provide
shareholder safeguards which are similar to those that
apply to a UK registered company and are consistent with
the relevant provisions of the UK Companies Act.
The Board members of Informa are noted in the Directors’
Report on page 28.
the Board
The Informa Group of companies (the Group) is
controlled through its Board of Directors. The Board’s
main roles are to create value for shareholders, to provide
leadership of the Group, to approve the Group’s strategic
objectives and to ensure that the necessary financial
and other resources are made available to enable those
objectives to be met.
An updated schedule which sets out the matters reserved
for the Board’s approval, which is reviewed and updated
annually, was adopted by the Board on 24 June 2009 prior
to the Scheme becoming effective on 30 June 2009. The
specific responsibilities reserved for the Board include:
•
approving the Group’s long-term objectives and
commercial strategy;
•
•
•
•
•
•
•
•
approving the Group’s annual operating and capital
expenditure budgets;
reviewing operational and financial performance;
approving major acquisitions, disposals and capital
projects;
reviewing the Group’s systems of internal control
and risk management;
reviewing the environmental, health and safety
policies of the Group;
approving appointments to, and removals from, the
Board and of the Company Secretary;
approving policies relating to Directors’
remuneration; and
reviewing the dividend policy and determining the
amounts of dividends.
The Board has delegated the following activities to the
Executive Directors:
•
•
•
•
•
•
the development and recommendation of strategic
plans for consideration by the Board that reflect the
longer-term objectives and priorities established by
the Board;
implementation of the strategies and policies of the
Group as determined by the Board;
monitoring of the operating and financial results
against plans and budgets;
monitoring the performance of acquisitions and
investments against plans and objectives;
prioritising the allocation of capital, technical and
human resources; and
developing and implementing risk management
systems.
the Roles of the chairman, chief executive
and senior Independent Director
The division of responsibilities between the Chairman
of the Board, the Chief Executive and the Senior
Independent Director comply with the guidance from the
UK Institute of Chartered Secretaries and Administrators
(ICSA) and as such are clearly defined.
38
Informa plc Annual Report & Financial Statements for the year ended 31 December 2009
Derek Mapp was appointed as Non-Executive Chairman
on 17 March 2008. As Chairman, he leads the Board
and is responsible for setting its agenda and ensuring
its effectiveness. He is also responsible for ensuring
that Directors receive accurate, timely and clear
information and for effective communication with
shareholders. He facilitates the effective contribution
of Non-Executive Directors and constructive relations
between the Executive and Non-Executive Directors.
He also acts on the results of the Board performance
evaluation by recognising the strengths and addressing
the weaknesses of the Board, and, where appropriate,
proposes new members be appointed to the Board or
seeking the resignation of Directors.
Peter Rigby was re-appointed as Chief Executive on
17 March 2008 and has the responsibility of running
the Company. As Chief Executive, he has direct charge
of the Group on a day-to-day basis and is accountable to
the Board for its operational and financial performance.
He is also primarily responsible for implementation
of the Company’s strategy including ensuring the
achievement of the Group’s budgets and optimising the
Group’s resources. He also has primary responsibility
for managing the Group’s risk profile, identifying
and executing new business opportunities and for
management development and remuneration.
Dr Pamela Kirby was appointed as Senior Independent
Director on 17 March 2008 and is available to meet
shareholders on request and to ensure that the Board is
aware of any shareholder concerns not resolved through
existing mechanisms for investor communication.
Directors and Directors’ Independence
As at 31 December 2009 the Board comprised four
independent Non-Executive Directors, one of whom is
the Chairman, and two Executive Directors all of whom
have served throughout the 2009 financial year. In
addition, from 1 January to 8 May 2009 it included
Sean Watson as a fifth Non-Executive Director.
The Board includes independent Non-Executive
Directors who constructively challenge and help develop
proposals on strategy and bring strong, independent
judgement, knowledge and experience to the Board’s
deliberations. The independent Directors are of sufficient
calibre and number that their views carry significant
weight in the Board’s decision-making process. The
Board considers all of its Non-Executive Directors to be
independent in character and judgement.
There is an agreed procedure in place for the Directors to
obtain independent professional advice, at the Group’s
expense, should they consider it necessary to do so in
order to carry out their responsibilities. The Directors’
contracts are available for inspection at the registered
office during normal business hours and will be available
for inspection at the AGM.
Professional Development
On appointment the Directors receive relevant
information about the Group, the role of the Board and the
matters reserved for its decision, the terms of reference
and membership of the principal Board Committees and
the powers delegated to those Committees, the Group’s
corporate governance policies and procedures and
the latest financial information about the Group. This is
supplemented by visits to key locations and meetings with
key senior executives. On appointment the Directors are
also advised of their legal and other duties and obligations
as a Director of a listed company.
Throughout their period in office, the Directors are
continually updated on the Group’s business and the
environment in which it operates, by written briefings and
by meetings with senior executives, who are invited to
attend and present at Board meetings from time to time.
They are also updated on any changes to the legal and
governance requirements of the Group and those which
affect themselves as Directors and are able to obtain training,
at the Group’s expense, to ensure they are kept up-to-date
on relevant new legislation and changing commercial risks.
Performance evaluation
The Board utilises a formal and rigorous process, led by the
Chairman, for the annual evaluation of the performance
of the Board, its principal committees and individual
Directors. On appointment the Directors are made aware
that their performance will be subject to evaluation.
For 2009 the evaluation was performed by the Chairman
who conducted a series of focused interviews with each
member of the Board in his or her capacity as a Director and,
where applicable, as a member or Chairman of a principal
committee. The findings and recommendations of the
review were presented to the Board as a whole, with a view
to implementing any recommendations made to improve
the overall effectiveness of the Board during 2010. The
Non-Executive Directors, led by the Senior Independent
Director, also met without the Chairman present to conduct
an evaluation of the Chairman’s performance.
Informa plc Annual Report & Financial Statements for the year ended 31 December 2009
39
the Year in Review
coRPoRate goveRnance statement continued
Re-election
All of the Company’s Directors are subject to annual re-
election at the 2010 AGM. The Board is satisfied, following
formal evaluation, that each Director continues to be
effective and to demonstrate commitment to his/her role.
the company secretary
The Company Secretary is responsible for advising the
Board through the Chairman on all governance matters
and all Directors have access to the advice and services of
the Company Secretary.
Information
Regular reports and papers are circulated to the Directors
in a timely manner in preparation for Board and Committee
meetings. These papers are supplemented by any
information specifically requested by the Directors from
time to time. The Non-Executive Directors receive monthly
management reports from the Chief Executive and the
Finance Director which enable them to scrutinise the Group’s
and management’s performance against agreed objectives.
Relations with shareholders
The Company is committed to maintaining good
communications with investors. Each of Derek Mapp as
Chairman and Dr Pamela Kirby as Senior Independent
Director provides the Board with feedback on any issues
raised with them by shareholders.
The Executive Directors have frequent discussions with
institutional shareholders on a range of issues affecting
the Group’s performance. These include meetings with
the Group’s largest institutional shareholders on an
individual basis following the announcement of the
Group’s interim and annual results. In addition, the Group
responds to individual ad hoc requests for discussions
from institutional shareholders. Following meetings held
with shareholders after the interim and annual results
announcements, the Board is provided with feedback
from the Executive Directors, the Group’s brokers and
its public relations advisers on investor perceptions.
The Company’s brokers’ reports on the Group are also
circulated to all Directors, as are monthly reports of
significant changes in the holdings of larger investors.
The AGM, for which at least 20 working days’ notice
is given and where shareholders are invited to ask
questions during the meeting and are able to meet with
the Directors after the meeting, is normally attended by
all the Directors. The number of proxy votes for, against or
withheld in respect of each resolution is disclosed at the
AGM and a separate resolution is proposed for each item.
The Group’s corporate website at www.informa.com
contains a wide range of information of interest to
both institutional and private investors, including any
announcements made by the Company to the FSA
as well as video recordings of the interim and annual
presentations made to analysts.
going concern Basis
The Group’s business activities, together with the factors
likely to affect its future development, performance and
position are set out in the Chairman’s Statement and
Chief Executive’s Review on pages 14 to 18.
As set out on pages 31 to 36 a number of risk factors
and uncertainties affect the Group’s results and financial
position. In particular the current economic climate
creates uncertainties over the level of demand for the
Group’s products and services. The Group adopts an
extensive budgeting process in forecasting its trading
results and cash flows and updates these forecasts to
reflect current trading on a regular basis.
The Group’s net debt and banking covenants are
discussed in the Financial Review on pages 19 to 23 and
the exposure to liquidity risk is discussed in Note 24 to
the consolidated financial statements.
The Group sensitises its projections to reflect reasonably
possible changes in trading performance and cash
conversions, taking into account its substantial deferred
revenues (£292m at 31 December 2009). These forecasts and
projections for the period up to 30 June 2011, show that the
Group is expected to be able to operate within the level of its
current facility and meet its covenant requirements.
After making enquiries, the Directors have a reasonable
expectation that the Company and the Group have
adequate resources to continue in operational existence
for the foreseeable future. Accordingly, they continue to
adopt the going concern basis in preparing the annual
report and financial statements.
Procedures to Deal with Directors’
conflicts of Interest
The Company’s Articles, which were adopted by
shareholders on 2 June 2009, include provisions
covering Directors’ conflicts of interest.
40
Informa plc Annual Report & Financial Statements for the year ended 31 December 2009
The Articles allow the Board to authorise any matter that
would otherwise involve a Director breaching his duty to
avoid conflicts of interest. The Company has procedures in
place to deal with a situation where a Director has a conflict of
interest. As part of this process, the Board will endeavour to:
•
•
•
consider each conflict situation separately on its
particular facts;
consider the conflict situation in conjunction with
the Company’s Articles;
keep records and Board minutes as to authorisations
granted by Directors and the scope of any approvals
given; and
•
regularly review conflict authorisations.
Internal control and Risk management
The Board is responsible for the Group’s system of
internal control and for reviewing its effectiveness. Such
a system is designed to manage rather than eliminate the
risk of failure to achieve business objectives and can only
provide reasonable, and not absolute, assurance against
material misstatement or loss. The concept of reasonable
assurance recognises that the cost of control procedures
should not exceed the expected benefits.
The Board has an ongoing process for identifying,
evaluating and managing the significant risks faced by
the Group. This process was in place throughout the
year under review and up to the date of approval of
the Annual Report and Financial Statements, and is in
accordance with the Turnbull Guidance “Internal Control:
Revised Guidance for Directors on the Combined Code.”
The Board regularly reviews the effectiveness of the
Group’s system of financial and non-financial internal
controls, including operational and compliance controls,
risk management and the Group’s high-level internal
control arrangements.
The Board’s monitoring is based principally on reviewing
reports from management to consider whether
significant risks have been identified, evaluated,
managed and controlled and whether any significant
weaknesses are promptly remedied and indicate a need
for more extensive monitoring.
In addition, the Board performs a formal risk
assessment, which is embedded through the annual
planning cycle into the operations of the Group. Each
operating unit prepares a business plan, which sets out
detailed objectives, which are submitted to Executive
management and the Board for approval. As an integral
part of the plan, each operating unit considers the
significant risks to its business and to the achievement
of the proposed plan. In doing so, each unit measures its
progress and completion against a series of mitigating
control actions designed to address these risks.
In consolidating unique risk events group-wide, this risk
model not only assists in the allocation of Internal Audit
resource to provide assurance on significant risks in its
annual plan, but also enables both Executive Directors and
the Audit Committee, which assists the Board in discharging
its review responsibilities, to monitor operating units’
progress in implementing programmes aimed at mitigating
risk. These review responsibilities are assisted by the
operation of a risk committee. This committee comprises
the Chief Executive, a cross section of senior officers and
managers of the Group and is chaired by the Finance
Director. The operation of the risk committee is subject to
the oversight of the Audit Committee.
Board meetings and committees
As a result of the high level of corporate activity during the
year, 13 Board meetings, both scheduled and unscheduled
were held. Not all Directors could be present at all
unscheduled Board meetings. The number of scheduled
Board meetings and Committee meetings attended as a
member by each Director during the year are below.
D Mapp
P Rigby
A Walker
S Watson¹
P Kirby²
J Davis³
B O’Neill
¹ Sean Watson ceased to be a director of Old Informa on 8 May 2009.
² Pamela Kirby joined the Audit Committee on 27 April 2009.
³ John Davis joined the Remuneration Committee on 27 April 2009.
Scheduled
Board
meetings (of 7)
7
7
7
1
7
6
7
Remuneration
Committee
meetings (of 5)
–
–
–
2
5
2
5
Audit
Committee
meetings (of 4)
–
–
–
1
3
3
4
Informa plc Annual Report & Financial Statements for the year ended 31 December 2009
41
the Year in Review
coRPoRate goveRnance statement continued
nomination committee
The Company has established a Nomination Committee
whose terms of reference were updated and adopted
on 24 June 2009, and are available on the Company’s
website. The Nomination Committee is chaired by the
Chairman, Derek Mapp, and also comprises John Davis
and the Chief Executive, Peter Rigby. The Nomination
Committee considers the mix of skills and experience
that the Board requires and seeks the appointment of
Directors who meet those requirements to ensure that
the Board is effective in discharging its responsibilities.
The Nomination Committee did not meet during 2009.
The constitution of the Board’s committees for the
Company to be effective following the Scheme becoming
effective was determined by the Board as a whole.
Remuneration committee
The membership of the Remuneration Committee is set
out on page 45 in the Directors’ Remuneration Report.
The Committee’s terms of reference were updated
and adopted on 24 June 2009, and are available on
the Company’s website. The Committee’s principal
responsibilities are to:
•
•
•
set, review and recommend to the Board for
approval the remuneration policy and strategy with
respect to the Executive Directors;
set, review and approve the individual remuneration
packages of the Executive Directors including terms
and conditions of employment and any changes to
the packages; and
approve the introduction and rules of any Group
share-based incentive schemes.
audit committee
The membership of the Audit Committee comprises
Dr Brendan O’Neill, as Chairman of the Committee, and
John Davis, and from 27 April 2009, Dr Pamela Kirby.
Sean Watson was a member until he ceased to be
a Director on 8 May 2009. The Committee’s terms
of reference were updated and adopted on
24 June 2009, and are available on the Company’s
website. The terms of reference are considered annually
by the Audit Committee and are then referred to the
Board for approval. It met four times during 2009.
The Audit Committee has at least one member possessing
recent and relevant experience, as described in the Smith
Report appended to the Code. Its Chairman, Dr Brendan
O’Neill, has extensive experience of audit committee
procedures, and John Davis is a qualified chartered
accountant and the Chief Financial Officer of Yell Group
plc, a listed company.
The Audit Committee monitors the integrity of
the Group’s financial statements and any formal
announcements relating to the Group’s performance.
The Committee is responsible for monitoring the
effectiveness of the external audit process and making
recommendations to the Board in relation to the
appointment, re-appointment and remuneration of the
external auditors. It is responsible for ensuring that an
appropriate relationship between the Group and the
external auditors is maintained, including reviewing
non-audit services and fees. The Committee also reviews
annually the Group’s system of internal controls and
the process for monitoring and evaluating the risks
faced by the Group. It reviews the effectiveness of the
Group Internal Audit function (which includes business
risk management) and is responsible for approving,
upon the recommendation of the Chief Executive,
the appointment and termination of the head of that
function. These responsibilities are principally carried
out through the Risk Committee whose activities are
overseen by the Chairman of the Audit Committee.
The Committee meets as appropriate with the Executive
Directors and management, as well as privately with both
the external and internal auditors.
In 2009 the Committee discharged its responsibilities
primarily by:
•
•
•
•
reviewing the Group’s draft preliminary and interim
results statements prior to Board approval and
reviewing the external auditors’ detailed reports
thereon;
reviewing the Group’s interim management
statements and pre-close period updates prior
to their release;
reviewing the appropriateness of the Group’s
accounting policies;
reviewing regularly the impact on the Group’s
financial statements of matters such as the adoption
of International Financial Reporting Standards;
42
Informa plc Annual Report & Financial Statements for the year ended 31 December 2009
•
•
•
•
•
•
•
recommending to the full Board, which adopted the
recommendation, the reappointment of Deloitte LLP
as the Group’s external auditors;
reviewing and approving the audit fee and
reviewing non-audit fees payable to the Group’s
external auditors;
reviewing the external auditors’ plan for the audit
of the Group’s financial statements, which included
key areas of scope of work; key risks on the financial
statements; confirmations of auditor independence
and the proposed audit fee and approving the terms
of engagement for the audit;
reviewing the Group’s system of controls and its
effectiveness;
reviewing the Group’s systems to identify and
manage risks (including regular consultation with
the Head of Internal Audit);
reviewing the ongoing reports from Business Risk
Management; and
reviewing post-acquisition reports on integration
and performance of significant recent acquisitions
compared to plans.
The Audit Committee also monitors the Group’s
whistleblowing procedures to ensure that appropriate
arrangements are in place for employees to be able to
raise matters of possible impropriety in confidence, with
suitable subsequent follow-up action.
The Audit Committee also undertakes a thorough
performance evaluation which is led by the Chairman of
the Committee.
external auditors
The Audit Committee is also responsible for the
development, implementation and monitoring
of the Group’s policy on external audit. The policy
assigns oversight responsibility for monitoring the
independence, objectivity and compliance with ethical
and regulatory requirements to the Audit Committee,
and day to day responsibility to the Group Finance
Director. It states that the external auditors are jointly
responsible to the Board and the Audit Committee and
that the Audit Committee is the primary contact. The
policy also sets out the categories of non-audit services
which the external auditors will and will not be allowed
to provide to the group, subject to de minimis levels.
To fulfil its responsibility regarding the independence of
the external auditors, the Audit Committee reviewed:
•
•
•
•
the external auditors’ plan for the current year, noting
the role of the senior statutory audit partner, who
signs the audit report and who, in accordance with
professional rules, has not held office for more than
five years, and any changes in the key audit staff;
the arrangements for day-to-day management of
the audit relationship;
a report from the external auditors describing their
arrangements to identify, report and manage any
conflicts of interest; and
the overall extent of non-audit services provided by
the external auditors, in addition to its case-by-case
approval of the provision of non-audit services by
the external auditors.
To assess the effectiveness of the external auditors, the
Audit Committee reviewed:
•
•
•
•
the arrangements for ensuring the external auditors’
independence and objectivity;
the external auditors’ fulfilment of the agreed audit
plan and any variations from the plan;
the robustness and perceptiveness of the auditors
in their handling of the key accounting and audit
judgements; and
the content of the external auditor’s reporting on
internal control.
Following the above, the Audit Committee has
recommended to the Board that Deloitte LLP is re-appointed.
corporate Responsibility (cR)
Keith Brownlie is the senior executive with day-to-day
responsibility for Corporate Responsibility direction and
development. He served in this capacity throughout
2009. The Group’s CR priorities and strategy are
formulated and led by a CR committee which is chaired
by the Chief Executive, Peter Rigby. Meetings are minuted
and communicated to other senior level committees
when appropriate.
Informa plc Annual Report & Financial Statements for the year ended 31 December 2009
43
the Year in Review
coRPoRate goveRnance statement continued
CR priorities have been decided upon using a diverse
range of stakeholder insights including:
•
•
•
•
•
•
•
•
in-house expertise from colleagues;
regular presentations from external parties at Group
CR Committee meetings;
institutional investor feedback and insights;
staff communications;
feedback and questions from the Group’s customers;
dialogue with Trade Unions and Non-governmental
Organisations (NGOs);
the Group’s membership of networks such as the
MediaCSRForum; and
advice from our retained CR advisers.
The Group CR Strategy has five key pillars:
1. providing a rewarding, fair and inspiring
workplace for staff;
2.
ensuring product integrity and quality;
3. managing environmental impacts;
4. maintaining and improving customer service
levels; and
5. giving back to the communities in which it operates.
Further information can be found on each of the above in
the Corporate Responsibility report on pages 55 to 57.
Approved by the Board and signed on its behalf by
John Burton
Company Secretary
2 March 2010
44
Informa plc Annual Report & Financial Statements for the year ended 31 December 2009
DIRectoRs’ RemuneRatIon RePoRt
This report has been prepared in accordance with the relevant requirements of the Listing Rules of the Financial
Services Authority. Although it is not a requirement of Jersey company law to have the Directors’ Remuneration
Report approved by shareholders, the Board believes that as a Company whose shares are listed on the London Stock
Exchange that it is important in terms of its corporate governance for it to do so. Accordingly a resolution to approve
this Report will be proposed at the forthcoming AGM.
This report has been divided into separate sections for:
1
2
Information which is unaudited; and
Information on which the Company’s auditors have reported as having been properly prepared.
unaudited Information
Remuneration Committee
The Committee is responsible to the Board for formulating and recommending to the Board remuneration policy and
strategy for the Executive Directors. The Committee also reviews individual remuneration packages of the Executive
Directors, including terms and conditions of employment and any changes.
The Committee also reviews the general remuneration framework for the senior management of the Group and
approves the operation of any Group share-based incentive schemes, including any Long-term Incentive Plans
(LTIPs). The Committee’s terms of reference are available on the Group website. The membership of the Remuneration
Committee during 2009 was as follows:
P Kirby (Chairman of Committee)
S Watson
B O’Neill
J Davis
Period of membership 2009
1 Jan – 31 Dec
1 Jan – 8 May
1 Jan – 31 Dec
27 Apr – 31 Dec
The Chairman, Derek Mapp, usually attends the meetings by invitation but is not present when matters relating to his
own remuneration are discussed. The number of meetings of the Committee during 2009 and individual attendance
by its members are shown on page 41. None of the members who served on the Committee during the year had any
personal financial interest (other than as a shareholder of the Company), conflicts of interests arising from cross-
directorships or day-to-day involvement in running the business.
The Committee makes recommendations to the Board. The principal activities carried out by the Committee during 2009 were:
•
•
•
•
•
•
•
•
determination of Non-Executive Chairman’s and Executive Directors’ remuneration;
determination of the Executive Directors’ bonuses and bonus targets for 2009 and 2010;
LTIP awards: determination of performance conditions, vesting of the 2006 grant to Executive Directors and new
awards for both Executive Directors and senior management;
consideration and approval of the Remuneration Report for the 2008 Annual Report;
monitoring of senior management remuneration;
approving Rights Issue adjustments for share awards;
consideration of the Group Defined Benefit Pension Scheme; and
consideration of the effect of the scheme of arrangement (the Scheme) on employee share plans and approval of
successor plans in the Company from those operating within Old Informa.
Informa plc Annual Report & Financial Statements for the year ended 31 December 2009
45
the Year in Review
DIRectoRs’ RemuneRatIon RePoRt continued
In determining the Executive Directors’ remuneration the Committee consulted the Chairman about its proposals;
no Executive Director played a part in any decision about his or her own remuneration. The Committee also engaged
independent remuneration consultants Hewitt New Bridge Street (Hewitt) to provide advice on the structure and
operation of Directors’ remuneration packages and the Company’s share incentive arrangements. Hewitt were
appointed by the Committee and do not provide any other material services to the Group. The Company Secretary,
John Burton, also provided assistance to the Committee during the year.
Remuneration Policy
The remuneration of the Executive Directors is designed to provide for a competitive compensation package which
reflects the Group’s performance against financial objectives and personal performance criteria. It rewards above-average
performance and is designed to attract, motivate and retain high-calibre executives. The performance measurement of
the Executive Directors and the determination of their annual remuneration packages are undertaken by the Committee.
There are five elements of the remuneration package for Executive Directors as follows:
•
•
•
•
•
basic annual salary;
benefits;
annual bonus;
share incentives; and
retirement and life assurance benefits.
The Company’s policy is that a clear majority of the maximum potential remuneration of the Executive Directors should
be performance-related. As described further below, Executive Directors may earn an annual bonus and benefit from
participation in a performance-based LTIP. For 2009, 80% of the maximum bonus payable to the Executive Directors
was based on EPS performance and for 2010 is entirely based on EPS performance. Vesting of LTIP awards granted prior
to 2009 have been conditional upon EPS growth and subject to a total shareholder return (TSR) underpin. LTIP awards
granted after 2008 are subject solely to TSR performance as noted below.
The Remuneration Committee is able to consider corporate performance on environmental, social and governance
issues when setting the remuneration of the Executive Directors. In its judgment the remuneration policies for both
Executive Directors and senior management do not raise environmental, social or governance/operational risks by
inadvertently motivating irresponsible behaviour.
Executive Directors are entitled to accept appointments outside of the Company provided that the Chairman
determines that it is appropriate. During 2009 Peter Rigby served as Non-Executive Chairman of Electric Word plc, for
which he received and retained fees of £12,000.
Basic Salary
The basic salaries of the Executive Directors are reviewed by the Remuneration Committee prior to the beginning of
each year and upon a change of position or responsibility. In deciding appropriate levels, the Committee considers
pay practices in the Group as a whole and makes reference to objective research which gives current information on
appropriate comparator groups of companies.
A review of the salaries of the Executive Directors was undertaken at the end of 2009 with the assistance of Hewitt.
It included a comparison of benchmark data from two comparator groups of companies, one drawn from the FTSE
All Share Media Index, of which the Company is a constituent member, and the other drawn from the FTSE All Share
Index which comprised companies of a broadly similar size to Informa in terms of market capitalisation, turnover and
overseas operations. Following its review, the Remuneration Committee concluded that it was appropriate reflecting
widespread salary freezes across the Group to maintain the annual basic salaries of the Executive Directors for the 2010
financial year at the same rates that were set in the Spring of 2008:
46
Informa plc Annual Report & Financial Statements for the year ended 31 December 2009
P Rigby
A Walker
£700,000
£425,000
Benefits
Each of the Executive Directors receives a benefit allowance of £25,000 per annum together with private medical
insurance cover and permanent health insurance cover.
Annual Bonus
The Remuneration Committee (the Committee) continues to consider adjusted diluted EPS to be the most suitable
financial measurement to determine performance and align the interests of the Executive Directors with those of
the Company’s shareholders for the purpose of determination of bonuses as this measurement of performance can
be directly influenced by the performance of the Executive Directors and is a key driver in generating returns to
shareholders. The Committee retains a discretion to look at other appropriate benchmarks. Accordingly, for 2009 it set
an award of up to 20% of basic salary for the achievement of personal goals relating to the effective management of
the Group’s financial position which were set with the aim of protecting and enhancing shareholder value. In addition,
a bonus of up to 80% of basic salary was dependent upon achievement of a sliding scale of challenging diluted
adjusted EPS targets which were set at levels to encourage and reward the delivery of excellent levels of performance.
For 2009, the Committee determined that the personal goals had been met in full and accordingly an award of 20%
of basic salary is payable to the Executive Directors. Applying the sliding scale formula, a bonus of 83.6% of basic
salary was awarded to each of Mr Rigby and Mr Walker for the 2009 financial year, reflecting a year of resilient financial
performance.
For 2010, the Committee has resolved to revert to a structure of the bonus opportunity being solely based on EPS
targets. In addition, for 2010 it has extended the maximum award available from 100% of basic salary in 2009 to 125%
of basic salary in 2010. However, in relation to this additional potential 25% bonus:
1 more stretching targets have been applied for its achievement; and
2
this additional award may only take the form of a conditional award of shares in the Company which will vest
only if the Director remains in employment throughout the deferral period, subject to good leaver provisions.
The number of shares awarded will be determined by reference to the market value of the shares at the date
concurrent awards under the LTIP are made. Shares utilised for this purpose will be acquired by market purchase;
newly issued shares will not be used.
long-Term incentive Plan
From 2006 Executive Directors have been invited to participate in the Company’s LTIP, which had been introduced and
approved by shareholders in 2005.
The first grant of awards to Executive Directors under the LTIP was made in March 2006 and they were given the
alternative of:
•
•
a maximum award of 100% of basic salary in the Company’s shares, provided they are prepared to sacrifice 5% of
that year’s basic salary; or
a maximum award of 50% of basic salary in the Company’s shares, with no salary sacrifice required.
Mr Rigby, being the only Executive Director at that time who remains in office, opted for the maximum award with a 5%
sacrifice in basic salary. Two further grants of awards were made in April 2007 and April 2008 on the same basis and Mr Rigby
again opted for the maximum award with a 5% sacrifice in basic salary (as did Mr Walker in April 2008, his first year in office).
Informa plc Annual Report & Financial Statements for the year ended 31 December 2009
47
the Year in Review
DIRectoRs’ RemuneRatIon RePoRt continued
The 2006 award made to Mr Rigby vested in full on 1 May 2009; further details can be found on page 53. The awards
made to Mr Rigby in 2007 and to the Executive Directors in 2008 under the LTIP vest subject to continued employment
over a three year performance period, including the year of award, and the satisfaction of performance conditions
which require both that:
•
•
the Company’s TSR is at least at the median compared to the companies constituting, at grant, the FTSE All Share
Media Index; and
the Company’s average adjusted diluted EPS grows by at least RPI plus 5% per annum (for 20% of the award
to vest) increasing to RPI plus 12% per annum (for 100% of the award to vest), thereby encouraging Executive
Directors to deliver above market returns to shareholders while also delivering strong financial performance.
The following revised arrangements for the LTIP were approved by shareholders at the AGM on 8 May 2009:
1.
the above performance conditions will no longer apply and instead the following TSR performance conditions
will be used:
•
•
one half of the shares under an award will vest based on the Company’s TSR performance ranked against
the TSR performance of the constituents of the FTSE 350 index (excluding investment trusts). This half of an
award shall vest at 20% at median ranking and 100% at upper quintile ranking. Any ranking below median
results in none of the award vesting; and
one half of the shares under an award will vest based on the Company’s TSR performance ranked against the TSR
performance of the constituents of the FTSE All Share Media Index. This half of an award will vest 20% at median
ranking and 100% at upper quintile ranking. Any ranking below median results in none of the award vesting;
2
3
the maximum award has been increased to 200% of basic salary; and
no salary sacrifice element will apply.
Awards were made to the Executive Directors in 2009 of 150% of basic salary and it is intended that the same size of
award be made to the Executive Directors in 2010.
The shares awarded to participants of the LTIP grants are satisfied through the Informa Group Employee Share Trust
(the EST), currently administered by Nautilus Trust Company Limited in Jersey. The current intention is to use existing
issued shares held in the EST for the vesting of the 2007 LTIP grant to Mr Rigby.
All-Employee Share Plans
From January 2006 the Executive Directors, along with all other UK employees, were eligible to participate in the
Company’s Share Incentive Plan (SIP), introduced and approved by shareholders in 2005. The SIP is an Inland Revenue
Approved All-Employee Share Incentive Plan which offers UK employees the opportunity to purchase up to £1,500 of
shares in the Company per year out of pre-tax salary.
All members of the SIP were invited to participate in the Rights Issue on 27 May 2009 and documentation was sent
to participants on 8 May 2009. SIP participants who participated in the Rights Issue received shares separate to their
holding in the SIP, equal to the value of their rights at the price of 150 pence per share. The rights of those participants
who chose not to take part in the Rights Issue were sold and sale proceeds were distributed amongst the participants.
At a meeting of the Company held on 2 June 2009, a new Share Incentive Plan (new SIP) was approved by shareholders
for its adoption pursuant to the Scheme becoming effective on 30 June 2009. The terms of the new SIP are the same
in all material respects as the pre-existing SIP in Old Informa. The new SIP was approved by the Inland Revenue on
6 July 2009. Eligible employees were invited to join the new SIP and can also join on an ongoing basis provided they
have completed six months’ service with the Company.
The Company introduced a US Stock Purchase Plan (SPP) in 2008 which was approved by shareholders at the AGM in
May 2008. Eligible employees are invited to join the SPP on an ongoing basis once they have completed six months’
48
Informa plc Annual Report & Financial Statements for the year ended 31 December 2009
service with the Company. The SPP provides a means by which the Group’s US employees may purchase the Company’s
shares at a 15% discount to the market price. No tax benefit is available under the SPP. Eligible US employees can
purchase up to $2,940 of shares per year out of post-tax salary.
As US shareholders were not entitled to participate in the Rights Issue, the trustee of the SPP arranged for the automatic sale of
the rights of participants in the SPP at the end of the Rights Issue period in the same way as US shareholders, and, accordingly
the proceeds of the sale were paid to participants. Shares in Old Informa held in the SPP at the time of the Scheme becoming
effective were exchanged for shares in the Company; accordingly no new SPP was introduced at this date.
Share Options
Prior to their merger in May 2004, both Informa and Taylor & Francis operated discretionary share option schemes for the
benefit of the Executive Directors. In the light of changes to the accounting treatment for share options and changing market
practice, the Remuneration Committee decided in 2005 no longer to grant options to Executive Directors. Details of subsisting
options granted to the Executive Directors in 2004 and earlier are shown on page 52. Existing grants were amended for the
Rights Issue on 27 May 2009 and rolled over from Old Informa to the Company pursuant to the Scheme becoming effective.
Share Ownership guidelines
During early 2006 the Remuneration Committee introduced formal share ownership guidelines requiring the Executive
Directors to build up, over a three year period and with pre-existing shareholdings taken into account, a holding in the
Company’s shares equal to at least one and a half times annual basic salary.
Retirement and life Assurance Benefits
The Executive Directors are entitled to receive a contribution of 25% of basic salary toward their retirement
arrangements. The Company also provides life assurance cover providing for the payment of a lump sum in the event
of the insured’s death in service.
Since Peter Rigby is neither an active member of any Group pension scheme nor is eligible to make further tax efficient
pension contributions, instead the Company pays to him a monthly payment in lieu of pension contributions equal to
25% of basic salary (after deducting the incremental National Insurance costs to the Company).
Further details of these entitlements are shown on page 53 to 54.
Performance graph
The graph below shows the Company’s performance, measured by TSR, compared with the performance of the FTSE All
Share Media Index, also measured by TSR, in the five-year period ended 31 December 2009. The FTSE All Share Media
Index has been selected for this comparison because the Company is a constituent company of that index.
informa plc Total Shareholder Return vs FTSE All Share media index 2005-2009
250
200
150
100
50
0
31 Dec 04
31 Dec 05
31 Dec 06
31 Dec 07
31 Dec 08
31 Dec 09
Informa plc
FTSE Media All Share Media Index
Informa plc Annual Report & Financial Statements for the year ended 31 December 2009
49
the Year in Review
DIRectoRs’ RemuneRatIon RePoRt continued
Directors’ Contracts
At 31 December 2009 and in accordance with the Company’s policy, each of the Executive Directors had service
contracts with an indefinite term under which 12 months’ notice must be given by the Company or by the Director.
On 24 June 2009 the Executive Directors entered into new agreements with Informa, the new holding company, in
respect of their duties and responsibilities as Directors of that company. The existing service contracts of the Executive
Directors were amended on 24 June 2009 to reflect this additional appointment but otherwise the terms of their original
agreements were unaffected. In the event of early termination, their contracts provide for compensation equal to basic
salary, benefits allowance and retirement benefit and (in the case of Peter Rigby only, bonus) for the notice period.
Pursuant to the terms on which he joined the Group, Adam Walker was awarded a restricted award of 93,269 shares on
7 April 2008. This award was increased to 117,422 shares following the taking up in full by Mr Walker of his rights in the
Rights Issue on 27 May 2009 and will vest in full on 7 April 2010.
Other than in respect of Mr Walker’s share award described above, there are no specific terms in relation to the
service contracts concerning termination following a change of control or any special rules concerning equity awards
following termination; the Executive Directors are subject to the same rules and awards under share schemes following
a termination of employment as for all other participants of the relevant schemes.
Each of the Non-Executive Directors has specific terms of appointment, terminable by three months’ notice. The dates
of the Directors’ original contracts are shown in the table below, although the contracts have been amended from
time to time by letter agreement as required to reflect changes to, for example, salary or fee levels. The contracts of the
Non-Executive Directors were novated on 24 June 2009 so as to be with Informa as the new holding company of the
Group. However the terms of the contracts remain the same. The contracts, which include details of remuneration, are
available for inspection at the registered office and will be available for inspection at the AGM.
Executive Directors
P Rigby
A Walker
Non-Executive Directors
D Mapp
P Kirby
J Davis
B O’Neill
Date of original contract
25 September 1996
12 March 2008
10 May 2004
3 August 2004
19 September 2005
26 November 2007
Non-Executive Directors
The remuneration of the Non-Executive Directors is determined by the Board within the limits set by the Articles of
Association. As stated above, no Director plays a part in any discussion about his or her remuneration. Fees are reviewed
annually, taking account of the responsibility and time commitment of the Non-Executive Directors and including a
comparison with the level of fees paid by other companies of similar size and complexity.
During the whole of 2009, the following annual fees were paid to the Non-Executive Directors (which fee levels have
been in place since 1 April 2008):
•
•
•
•
Non-Executive Chairman – £165,000
Chairman of Audit Committee – £60,000
Senior Independent Director and Chair of Remuneration Committee – £58,000
Other Non-Executive Directors – £50,000
50
Informa plc Annual Report & Financial Statements for the year ended 31 December 2009
Having consulted Hewitt and reflecting the additional time commitment required as a result of the Company being
domiciled in Switzerland, the Board resolved that the following fees be payable from 1 January 2010:
•
•
•
•
Non-Executive Chairman – £210,000
Chairman of Audit Committee – £68,000
Senior Independent Director and Chair of Remuneration Committee – £65,000
Other Non-Executive Directors – £56,000
Non-Executive Directors are not eligible to participate in any of the Company’s share incentive schemes or join any
Company pension scheme.
audited Information
Aggregate Directors’ Remuneration
The total amounts for Directors’ remuneration were as follows:
Emoluments
Share incentive gains and payments
Retirement contributions (or cash payments in lieu)
Directors’ Emoluments
Executive Directors
P Rigby¹
D Gilbertson²
A Walker3
Non-Executive Directors
D Mapp
S Watson4
P Kirby
J Davis
B O’Neill
Basic salary/
fees
£‘000
Bonus
Accrued
£‘000
Benefits
in kind/
allowance
£‘000
700
–
425
1,125
165
18
58
50
60
351
–
–
355
355
–
–
–
–
–
–
27
–
28
55
–
–
–
–
–
–
Total
2009
£‘000
727
–
808
1,535
165
18
58
50
60
351
2009
£‘000
1,886
163
846
2,895
2008
£‘000
2,582
591
262
3,435
Compensation
for loss of
office
£‘000
Total
2008
£‘000
1,349
143
730
2,222
151
50
55
49
55
360
–
–
–
–
–
–
–
–
–
–
Aggregate emoluments
–
¹ In addition for 2009 the Group is making a contribution of £585,200 to a retirement plan in respect of Mr Rigby as noted below under Directors’ Pension Entitlements.
² David Gilbertson left the Group on 20 March 2008. No compensation for loss of office was paid to him except for the retention of Share Matching Awards under the
1,476
2,582
1,886
355
55
terms of his severance agreement.
³ Adam Walker joined the Group on 28 March 2008.
4 Sean Watson ceased to be a Director on 8 May 2009. The fees shown above for the services of Sean Watson were paid to CMS Cameron McKenna.
Informa plc Annual Report & Financial Statements for the year ended 31 December 2009
51
the Year in Review
DIRectoRs’ RemuneRatIon RePoRt continued
Aggregate emoluments disclosed above do not include any amounts concerning (1) payments in respect of pension
arrangements (which are disclosed elsewhere in this report) or (2) the value of share options granted to or held by
Directors, of matching awards made under the Company’s Share Matching Plan or of awards under the Company’s LTIP.
Details of these share-based incentives are given below.
Directors’ Share interests
The Directors who held office at 31 December 2009 had the following beneficial interests in the issued share capital of
the Company:
D Mapp
P Rigby
A Walker
P Kirby
J Davis
B O’Neill
Ordinary Shares
At
31 December
2009
At
31 December
2008
90,495
908,064
149,879¹
14,000
14,000
4,200
60,496
709,679
116,019¹
10,000
10,000
3,000
¹ This includes shares conditionally awarded to Mr Walker described under Directors’ Contracts on page 50.
In relation to the Rights Issue, each of the Directors took up their rights in full or otherwise as a minimum sold sufficient
rights in order to take up the balance of their rights. None of the Directors had any beneficial interests in the shares of
other Group companies. In addition to the beneficial interests in the shares of the Company shown above, during 2009
Peter Rigby and Adam Walker were, for the purposes of the Act, regarded as interested in the ordinary shares held
by Nautilus Trust Company Limited, as trustee of the Informa Group Employee Share Trust. This trust held 71,628 shares
at 31 December 2009. Employees of the Group (including Peter Rigby and Adam Walker) are potential beneficiaries
under this trust.
Other than the purchase of 154 Share Incentive Plan shares by Peter Rigby and Adam Walker, there have been no
changes in Directors’ share interests from 31 December 2009 to the date of this Report.
Directors’ Share Options
Set out below are the details of options to acquire shares in Informa plc held by the Directors who served during the
year. All of the conditions to exercise these options have been satisfied. No share options were granted during 2009.
All outstanding share options were amended to take into account the Rights Issue.
At 31
December
2008 Exercised
lapsed
Rights
issue
Adjustment
Exercise
price
(p)
Post
Rights
issue
Exercise
price
(p)
market
price
At date of
exercise
(p)
At 31
December
2008
P Rigby
58,544
91,445
149,989
–
–
–
–
11,046 736.6071
619.6853
17,254 518.7500
436.4807
28,300
–
–
69,590
108,699
178,289
Exercise
period
20.03.03 to
19.03.10
07.03.04 to
06.03.11
The market price of the Company’s ordinary shares at 31 December 2009 was 320.00p and the range during the year
was between 335.10p to 169.13p. The daily average market price during the year was 255.05p.
52
Informa plc Annual Report & Financial Statements for the year ended 31 December 2009
Directors’ Participation in long-Term incentive Scheme
The Executive Directors have been granted conditional awards over shares in the Company under the LTIP since 2006.
All LTIP awards, with the exception of the 2009 award granted on 4 August 2009, were amended for the Rights Issue.
All LTIP awards are as follows:
P Rigby
A Walker
At
31 December
2008
117,082
102,301
183,273
–
402,656
123,637
–
123,637
Vested
117,082
–
–
–
117,082
–
–
–
lapsed
granted¹
Rights
issue
Adjustment
At
31 December
2009
–
–
–
–
–
–
–
–
–
–
–
411,764
411,764
–
250,000
250,000
–
19,302
34,580
–
53,882
23,328
–
23,328
–
121,603
217,853
411,764
751,220
146,965
250,000
396,965
¹ The market price of the Company’s shares on the grant date were 255.00 pence.
Award
date
29.03.06
25.04.07
09.04.08
04.08.09
End of
performance
period
31.12.08
31.12.09
31.12.10
31.12.11
09.04.08
04.08.09
31.12.10
31.12.11
The grants were made on the terms described on page 47 to 48. Subject to achievement of the relevant performance
conditions and continued employment, these awards will vest proportionately, over a three year performance
period, commencing on 1 January of the year of grant. The Remuneration Committee was satisfied that the
performance conditions covering Mr Rigby’s award made in 2006 had been met in full and accordingly all his award vested
on 1 May 2009. The share price and value of the share award on the date of vesting was 339.75p and £397,786 respectively.
Of the 117,082 shares vesting under the award, Mr Rigby received 69,082 and sold 48,000. The Remuneration Committee was
satisfied under the performance conditions covering Mr Rigby’s award made in 2007 that 40.2% of his award should vest in
March 2010.
Directors’ Pension Entitlements
The following information is given to comply with the requirements of the Listing Rules of the FSA, which differ in some
respects from the equivalent statutory requirements:
There were no increases during the year of accrued pension (excluding inflation). Any transfer values disclosed
under the Listing Rules requirements do not represent a sum paid or payable to the individual Director; instead they
represent a potential liability of the pension scheme.
Informa plc Annual Report & Financial Statements for the year ended 31 December 2009
53
the Year in Review
DIRectoRs’ RemuneRatIon RePoRt continued
Contributions paid by the Group directly to Directors or their nominated retirement investment vehicles in respect of
their retirement benefit entitlements were as follows:
D Gilbertson¹
P Rigby2
2009
£’000
–
740
2008
£’000
30
151
81
A Walker
¹ David Gilbertson left the Group on 20 March 2008.
2 The Committee has resolved not to make a bonus payment to Mr Rigby for 2009. Instead, the Committee has decided to make a contribution of £585,200 (the
106
Contribution Amount) to the Informa Group 2010 Employer-Financed Retirement Benefits Scheme (EFRBS), where it will be invested to provide retirement and/or
death benefits to Mr Rigby. As this contribution will not be immediately and fully deductible for corporation tax purposes, the Committee has decided to make the
contribution in two stages in order to have a neutral effect on the Group’s cashflow, when compared with the payment of a bonus. The first payment of £475,276
(representing 81.216% of the Contribution Amount) was paid to the EFRBS in March 2010 and the balance of the Contribution Amount will be paid to the EFRBS in
the year in which Mr Rigby draws down his benefits under the EFRBS. This remuneration report records both payments being made to Mr Rigby in respect of the 2009
financial year, irrespective of the timing of these payments.
approval
This Report was approved by the Board of Directors and signed on its behalf by:
Dr Pamela Kirby
Chairman of the Remuneration Committee
2 March 2010
54
Informa plc Annual Report & Financial Statements for the year ended 31 December 2009
coRPoRate ResPonsIBIlItY
Corporate Responsibility (CR) is key to the Informa
business and its people. Its importance within Informa
increases year on year even in a difficult business
environment. Informa’s CR activities are carried out
globally across the business and incorporate many
different areas such as employees, communities,
customers and the environment.
As mentioned in the Corporate Governance report on
page 43 to 44, Informa’s CR strategy is formulated and
led by a CR Committee which is chaired by the Chief
Executive, Peter Rigby. The CR strategy has five key pillars:
Providing a Rewarding, Fair and
Inspiring workplace for staff
The quality of Informa’s people is the Company’s single
biggest advantage. The Group is rich in intellectual
capital. It has a responsibility to provide a transparent
and unbiased meritocracy as well as invest in the HR tools
to support this.
In 2009, internal staff training (known as the Informa
Academy) was further developed. It is delivered by the
Informa Group and is free to attend for employees from
all of the Group’s businesses. Attendance at these courses
rose from 853 to 1,253 staff in 2009. Individual businesses
are being encouraged to establish their own training
academies; in 2009 Informa Business Information did so,
delivering specialist training directly to its staff.
Informa continues to offer a flexible and attractive
benefits package to staff on top of the competitive salary
and bonus structures in place within each business unit.
managing Editorial integrity at Taylor & Francis
The Group’s UK benefits package was given the highest
rating in the Britain’s Top Employer awards for 2009.
In 2009, Informa launched an innovative new facility for
previous members of staff throughout the world. Over
time, INFORMA-IN-TOUCH.ORG, will help the Group build
a strong, global alumnus of talented former-employees,
with whom the Group will remain in contact.
INFORMA-IN-TOUCH.ORG offers a supportive peer
group for former staff enabling them to hear about new
opportunities, business and social events as well as gain tips
and advice in finding a new job, managing their career, and,
if they choose it, self-employment. A Network Coach, with
many years experience in executive coaching and personal
development, is also on hand. His job is to welcome new
members and support their career development and
networking. It is one of few, such proactive, corporate
alumni networks in the world. In time offline networking
amongst this group will be developed.
To offer users privacy, it is not open to current employees,
but it does give Informa the opportunity to get back
in touch with people who have moved when new
opportunities arise within the Group.
ensuring Product Integrity and Quality
Informa provides specialist information and services for
the academic, scientific, professional, and commercial
business communities. Our readers and the people
attending our conferences expect expertly researched,
balanced, truthful and reliable content.
Taylor & Francis (T&F) maintains the editorial integrity of their
academic publications in three ways that are all closely related
to each other.
Firstly, there is a rigorous peer review process made up of
subject experts, mainly academic professors, to validate the
content of T&F’s books and journals. On the journal side,
each title has an editorial panel, whilst books are reviewed
by three or more experts. Sometimes this can lead to content
changes and, on the rare occasion, to an article or book being
abandoned altogether.
Finally, as a global publisher, T&F prides itself on its
commitment to reflecting regional perspectives. This also
contributes to the desire to lead the debate in core subject
areas through thought-provoking content.
T&F have commissioning staff located in the UK, USA, India
and Singapore. Sales outside of the UK and USA account
for approximately 40% of T&F’s total sales and this figure is
growing each year. T&F believes that in every respect the
developing regions of the world are going to be increasingly
important to its business.
Secondly, T&F recognises that, as a humanities and social sciences
publisher, it needs to be at the forefront of stimulating debate. The
peer review process plays an important part in this by ensuring
that all content is challenged and debated before publication.
Informa plc Annual Report & Financial Statements for the year ended 31 December 2009
55
the Year in Review
coRPoRate ResPonsIBIlItY continued
In 2009, a review of the Editorial and Content Code for
publishing was conducted, and development of specific
training sessions commenced to raise awareness of the
code among Informa Business Information’ publications.
Although the publishing code is relevant for the Group’s
academic books and journals, the integrity of those
publications is ensured through the Group’s peer review
process before publication.
An Editorial and Content code was drafted specifically for
the conference businesses in 2009, and will be finalised
and launched during 2010.
T&F have commissioning staff located in the UK, USA,
India and Singapore. Sales outside of the UK and USA
account for approximately 40% of T&F’s total sales and
this figure is growing each year. T&F believes that in every
respect the developing regions of the world are going to
be increasingly important to its business.
managing environmental Impacts
Informa continues to measure and manage the
environmental impacts of its direct operations.
Previously the Group has focused on UK operations but
this year it will report on a broader geographical scope
of its operations including North America, East Asia,
Australasia, and South Asia. The Group continues to
report to investors via the Carbon Disclosure Project, and
saw its score in the index increase slightly this year.
The Group’s reporting in 2009 has been focused on
energy usage within its offices, and in 2010 reporting
will include the impacts associated with business travel.
maintaining and Improving
customer service levels
It is the Group’s responsibility to anticipate, meet
and exceed its institutional and individual customer
expectations. The Group continues to develop its Shared
Service Centres offering back office customer service
functions to group companies. The Shared Service
Centres are expected to lead to cost savings as well as
improvements to customer service levels.
For example, the UK Shared Services’ main role is to
support Informa’s businesses, so that they can focus
on improving products and services, ensure customer
retention and grow their businesses. The Shared Services
centre does this by not only providing accounting
and customer operations support services to these
businesses, but also by processing first line external
customer queries.
giving Back to the communities
in which it operates
Informa has long encouraged its staff to be involved
in local community initiatives, as well as taking part in
Group community activities such as fund raising for the
World Cancer Research Fund (WCRF). A survey carried
out in 2009 showed how important these activities are to
Informa’s staff, as well as having a positive effect on the
green Week
Informa launched its first Green week in 2009 to build on 2008’s
Green day. The aim of the week was to set aside time in the
corporate calendar to bring green issues to the fore and inspire
employees across the globe to make positive green changes in
their day-to-day working lives as well as to share ideas on how
Informa could reduce its corporate carbon footprint.
The Group received a high amount of input from employees
to central competitions, for example sending in ideas for
“Greening Informa’s Products” and photos on “Going Green
at Informa”. There was also support from Peter Rigby, Chief
Executive, and his direct reports who competed in their own
“Green Games”, a set of daily challenges on the five themes
of mind, travel, waste, water, and energy.
Competition between the competitive senior team was fierce
with the ups and downs all captured in a daily blog. Employees
also organised activities in their local offices from carpooling
to volunteering with environmental charities as well as
getting rid of personal bins in offices and creating one-
sided notebooks from scrap printer paper.
Finally, Facilities’ Managers were put to the test challenging
them to see who could reduce office energy use the most over
the week. Eighteen offices across eight countries took up the
gauntlet with Taylor & Francis in Singapore eventually winning
with a 42% saving achieved through simple measures such as
reducing the air-conditioning by a few degrees, turning off all
lighting and electronic devices when not in use, and keeping
window blinds down to avoid heat gain from direct sunlight.
Informa Australia also deserve a mention for making the
greatest absolute saving before normalisation.
56
Informa plc Annual Report & Financial Statements for the year ended 31 December 2009
communities with whom the Group works.
Informa also recognises that these community activities
are another way to help staff develop new skills. In 2009,
the Group developed a new community strategy which
includes offering all staff one day off per year to volunteer
for a local charity. Informa hopes to see a significant
portion of staff taking up this new opportunity.
looking Forward to 2010
an additional £20,000 from corporate funds in honour of the
response from staff, taking the total up to over £46,000.
Banana Run – Run for the children
Staff across Informa continue to promote the Run for the
Children and continue to raise funds for Cancer Relief.
Peter Rigby puts his own stamp on this community event
by dressing up as a banana and having staff chase him
around Regents Park in London.
The CR Committee has several key aims for 2010. These
include the following:
Informa academy
staff engagement
Engaging with staff remains an important part of the CR
strategy. The decentralisation of CR to the businesses
globally and setting each business one key CR target are
underway.
The CR Committee is working to improve the Profile of the
Informa Academy, to offer more internal programmes for staff
by using distance learning and Video Conferencing Technology
to deliver these programmes. Virtual conferencing, developed
in the ESI business in 2009, will be developed further in
2010 thereby reducing the Group’s Carbon Footprint by
minimising on business travel wherever possible.
community
cR Database/KPIs
Staff are encouraged to spend one day for community
activities. This has been branded ‘Be Involved’ with the
aim of encouraging team activities globally.
haiti appeal
Since the Haiti earthquake struck, Informa staff around the
world have engaged minds and hearts and dug deep into
their pockets to raise over £26,000 for the disaster relief in Haiti.
Peter Rigby has announced that Informa will be contributing
Mindful of the need to provide the market with accurate
data, particularly energy consumption, the CR Committee
is looking to improve both the Group’s CR database and
KPIs in line with the Carbon Disclosure project.
The full CR report for 2009 is available on www.informa.com.
Community Strategy Survey
A Community Strategy survey was undertaken in 2009 which
gave the following results:
After analysing the results of the survey, and talking to
MDs across the business, the CR Committee decided to:
•
•
•
99% of those that replied to the survey knew about
Informa’s annual, and global, Go Banana event to raise
money for WCRF;
86% of respondents said they would be interested in getting
involved with a local charity to their own office; and,
58% said they’d give time to both volunteering and
fundraising activities.
•
•
•
•
retain its global relationship with WCRF through the
Go Banana event;
encourage all offices to develop long-term relationships
with organisations that are either local to the office, or
have a strategic link to the business;
introduce a global Informa Volunteering Policy; and,
launch a new Community Month during which local
charity partnerships will be highlighted across the
business, and offer support and advice to staff interested
in setting up partnerships in their region, or getting
involved in volunteering.
Informa plc Annual Report & Financial Statements for the year ended 31 December 2009
57
Financial Statements
”2009 will be remembered as one of the most difficult years
from a global trading perspective. All of our businesses were
impacted to a lesser or greater extent, so we are pleased
with these financial results which demonstrate the strength
of a balanced portfolio and an ability to manage costs
proactively when demand is reduced.”
– Adam Walker, Finance Director
In thIs sectIon:
Independent Auditors’ Report – Group
Consolidated Income Statement
Consolidated Statement of Comprehensive Income
Consolidated Statement of Changes in Equity
Consolidated Statement of Financial Position
Consolidated Cash Flow Statement
Notes to the Consolidated Financial Statements
Independent Auditors’ Report – Company
Company Balance Sheet
Notes to the Company Financial Statements
Five Year Summary
59
60
61
62
64
65
66
124
125
126
131
58
Informa plc Annual Report & Financial Statements for the year ended 31 December 2009
Independent AudItors’ report
to the Members of Informa plc
We have audited the Group financial statements (the
financial statements) of Informa plc for the year ended
31 December 2009 which comprise the Consolidated Income
Statement, the Consolidated Statement of Comprehensive
Income, the Consolidated Statement of Changes in Equity,
the Consolidated Statement of Financial Position and the
Consolidated Cash Flow Statement and the related Notes 1
to 38. These financial statements have been prepared under
the accounting policies set out therein. We have also audited
the information in the Directors’ Remuneration Report that is
described as having been audited.
We have reported separately on the parent company financial
statements of Informa plc for the period from 11 March 2009
to 31 December 2009.
This report is made solely to the Company’s members, as a
body, in accordance with Article 110 of the Companies (Jersey)
Law 1991. Our audit work has been undertaken so that we
might state to the Company’s members those matters we
are required to state to them in an auditors’ report and for no
other purpose. To the fullest extent permitted by law, we do
not accept or assume responsibility to anyone other than the
Company and the Company’s members as a body, for our audit
work, for this report, or for the opinions we have formed.
respective responsibilities of directors and auditors
The Directors' responsibilities for preparing the Annual
Report and the Group financial statements in accordance with
applicable law and International Financial Reporting Standards
(IFRSs) as adopted by the European Union, and for preparing
the Directors’ Remuneration Report are set out in the Statement
of Directors’ Responsibilities.
Our responsibility is to audit the financial statements in
accordance with relevant legal and regulatory requirements
and International Standards on Auditing (UK and Ireland).
We report to you our opinion as to whether the financial
statements give a true and fair view and are properly prepared
in accordance with the Companies (Jersey) Law 1991. We also
report to you if, in our opinion, the Directors' Report is not
consistent with the financial statements, if the Company has
not kept proper accounting records or if we have not received
all the information and explanations we require for our audit.
Although not required to do so, the directors have voluntarily
chosen to make a Corporate Governance Statement detailing
the extent of their compliance with the 2008 Combined Code.
We review whether the Corporate Governance Statement
reflects the Company’s compliance with the nine provisions of
the 2008 Combined Code specified for our review by the Listing
Rules of the Financial Services Authority, and we report if it
does not. We are not required to consider whether the Board’s
statements on internal control cover all risks and controls, or
form an opinion on the effectiveness of the Group’s corporate
governance procedures or its risk and control procedures.
We read the other information contained in the Annual Report
as described in the contents section and consider whether it is
consistent with the audited financial statements. We consider
the implications for our report if we become aware of any
apparent misstatements or material inconsistencies with the
financial statements.
Basis of audit opinion
We conducted our audit in accordance with International
Standards on Auditing (UK and Ireland) issued by the Auditing
Practices Board. An audit includes examination, on a test basis,
of evidence relevant to the amounts and disclosures in the
financial statements and the part of the Directors Remuneration
report to be audited. It also includes an assessment of the
significant estimates and judgments made by the Directors
in the preparation of the financial statements, and of whether
the accounting policies are appropriate to the Group's
circumstances, consistently applied and adequately disclosed.
We planned and performed our audit so as to obtain all
the information and explanations which we considered
necessary in order to provide us with sufficient evidence to
give reasonable assurance that the financial statements are free
from material misstatement, whether caused by fraud or other
irregularity or error. In forming our opinion we also evaluated
the overall adequacy of the presentation of information
in the financial statements and the part of the Directors’
Remuneration Report to be audited.
opinion
In our opinion:
•
•
the Group financial statements give a true and fair view, in
accordance with IFRSs as adopted by the European Union,
of the state of the Group’s affairs as at 31 December 2009
and of the Group’s profit for the year then ended; and
the Group financial statements have been properly prepared
in accordance with the Companies (Jersey) Law 1991.
deloitte LLp
Chartered Accountants and Statutory Auditors
London, United Kingdom
2 March 2010
Informa plc Annual Report & Financial Statements for the year ended 31 December 2009
59
Financial statements
consoLIdAted Income stAtement
For the year ended 31 December 2009
Revenue from continuing operations
Net operating expenses
Operating profit
(Loss)/profit on disposal of businesses
Finance costs
Investment income
Profit before tax
Tax (charge)/credit
Profit for the year
Attributable to:
– Equity holders of the parent
– Minority interest
Earnings per share from continuing
operations
– Basic (p)
– Diluted (p)
Adjusted earnings per share from
continuing operations
– Basic (p)
– Diluted (p)
Notes
5
7
31
10
11
12
27
14
14
14
14
Adjusted
results
2009
£m
1,221.7
(912.2)
309.5
–
(51.7)
3.5
261.3
(68.2)
193.1
Adjusting
items
2009
£m
–
(163.8)
(163.8)
(1.0)
–
–
(164.8)
78.2
(86.6)
Statutory
results
2009
£m
1,221.7
(1,076.0)
145.7
(1.0)
(51.7)
3.5
96.5
10.0
106.5
105.6
0.9
18.84
18.83
Adjusted
results
2008
£m
1,278.0
Adjusting
items
2008
£m
Statutory
results
2008
£m
–
1,278.0
(972.2)
305.8
–
(77.4)
5.0
233.4
(60.9)
172.5
(141.2)
(141.2)
16.8
–
–
(124.4)
37.9
(86.5)
(1,113.4)
164.6
16.8
(77.4)
5.0
109.0
(23.0)
86.0
84.9
1.1
16.801
16.791
34.27
34.27
33.941
33.921
1 Restated to reflect the bonus element of the rights issue. Details of the rights issue are provided in Note 25.
60
Informa plc Annual Report & Financial Statements for the year ended 31 December 2009
consoLIdAted stAtement oF comprehensIve Income
For the year ended 31 December 2009
Profit for the year
Gain/(loss) on cash flow hedges
(Loss)/gain on translation of foreign operations
Actuarial loss on defined benefit pension schemes
Tax on income and expenses taken directly to equity
Transferred to profit or loss on cash flow hedges
Other comprehensive (expense)/income for the year
Total comprehensive income for the year
Attributable to:
– Equity holders of the parent
– Minority interest
Notes
36
21
27
2009
£m
106.5
13.6
(72.0)
(1.5)
(3.5)
0.3
(63.1)
43.4
42.5
0.9
2008
£m
86.0
(34.1)
161.9
(3.6)
10.5
0.7
135.4
221.4
220.3
1.1
Informa plc Annual Report & Financial Statements for the year ended 31 December 2009
61
Financial statements
consoLIdAted stAtement oF chAnges In equIty
For the year ended 31 December 2009
At 1 January 2008
Inversion accounting1
Restated at 1 January 20081
Profit for the year
Loss on cash flow hedges
Gain on translation of foreign operations
Actuarial loss on defined benefit pension schemes (Note 36)
Tax on income and expenses taken directly to equity (Note 21)
Transferred to profit or loss on cash flow hedges
Total comprehensive income for the year
Dividends to shareholders (Note 13)
Share award expense
Purchase of own shares
Share options exercised
Shares issued on options exercised (restated at 27p per share)
Awards vesting under Long–Term Incentive Plans
Capital reduction
Restated at 1 January 20091
Profit for the year
Gain on cash flow hedges
Loss on translation of foreign operations
Actuarial loss on defined benefit pension schemes (Note 36)
Tax on income and expenses taken directly to equity (Note 21)
Transferred to profit or loss on cash flow hedges
Total comprehensive income for the year
Dividends to shareholders (Note 13)
Share award expense
Own shares sold
Share options exercised
Rights issue
Inversion accounting
Capital reduction
Amount recycled on disposal of subsidiary
Loss on disposal of foreign currency loans
At 31 December 2009
1 Restated to reflect the inversion accounting adopted in the year – refer to Note 25.
Share capital
(Note 25)
£m
0.4
114.2
114.6
–
–
–
–
–
–
–
–
–
–
–
0.2
–
–
114.8
–
–
–
–
–
–
–
–
–
–
–
45.9
–
(160.1)
–
–
0.6
62
Informa plc Annual Report & Financial Statements for the year ended 31 December 2009
Share
premium
account
(Note 26)
£m
Reserve for
shares to
be issued
(Note 26)
£m
Merger
reserve
(Note 26)
£m
496.4
–
496.4
–
–
–
–
–
–
–
–
–
–
–
–
–
–
496.4
(76.8)
(0.4)
54.5
1,071.8
1,073.0
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
Other
reserve
(Note 26)
£m
37.4
(114.2)
(76.8)
Hedging and
ESOP Trust
translation
shares
(Note 26)
£m
(2.0)
(2.0)
reserve
(Note 26)
£m
(83.6)
Capital
reserve
(Note 26)
£m
547.1
(83.6)
547.1
Retained
earnings
Minority
interest
(Note 27)
(3.0)
4.6
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
(34.1)
161.9
–
9.6
0.7
138.1
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
13.6
(72.0)
(3.9)
0.3
(62.0)
(0.4)
1.3
(6.6)
£m
(73.3)
(73.3)
84.9
(3.6)
0.9
–
82.2
(73.9)
(4.6)
1.1
547.1
478.6
105.6
(1.5)
0.4
–
104.5
(38.2)
9.6
–
–
–
–
–
–
–
–
–
–
–
–
–
1,999.4
(1.3)
(547.1)
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
Total
£m
927.8
–
927.8
84.9
(34.1)
161.9
(3.6)
10.5
0.7
220.3
(73.9)
0.5
(3.0)
–
1.3
(1.2)
–
105.6
13.6
(72.0)
(1.5)
(3.5)
0.3
42.5
(38.2)
0.6
9.6
0.2
242.5
–
–
–
(0.4)
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
(1,641.8)
Total
equity
£m
928.4
–
928.4
86.0
(34.1)
161.9
(3.6)
10.5
0.7
221.4
(74.4)
0.5
(3.0)
–
1.3
(1.2)
–
106.5
13.6
(72.0)
(1.5)
(3.5)
0.3
43.4
(39.4)
0.6
9.6
0.2
242.5
–
–
–
(0.4)
£m
0.6
–
0.6
1.1
1.1
(0.5)
1.2
0.9
0.9
(1.2)
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
4.2
496.4
(1,718.6)
(0.4)
2,552.6
1,328.6
0.9
1,329.5
5.4
–
5.4
–
–
–
–
–
–
–
–
0.5
–
–
–
(2.3)
–
3.6
–
–
–
–
–
–
–
–
0.6
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
1.1
–
–
1.1
–
–
–
–
–
–
–
–
–
–
0.2
196.6
1,641.8
(1,839.3)
–
–
0.4
ESOP Trust
shares
(Note 26)
£m
Hedging and
translation
reserve
(Note 26)
£m
Other
reserve
(Note 26)
£m
37.4
(114.2)
(76.8)
–
–
–
–
–
–
–
–
–
–
–
–
–
–
(2.0)
–
(2.0)
–
–
–
–
–
–
–
–
–
(3.0)
4.6
–
–
–
Shares issued on options exercised (restated at 27p per share)
0.2
Awards vesting under Long–Term Incentive Plans
At 1 January 2008
Inversion accounting1
Restated at 1 January 20081
Profit for the year
Loss on cash flow hedges
Gain on translation of foreign operations
Actuarial loss on defined benefit pension schemes (Note 36)
Tax on income and expenses taken directly to equity (Note 21)
Transferred to profit or loss on cash flow hedges
Total comprehensive income for the year
Dividends to shareholders (Note 13)
Share award expense
Purchase of own shares
Share options exercised
Capital reduction
Restated at 1 January 20091
Profit for the year
Gain on cash flow hedges
Share award expense
Own shares sold
Share options exercised
Rights issue
Inversion accounting
Capital reduction
Loss on translation of foreign operations
Actuarial loss on defined benefit pension schemes (Note 36)
Tax on income and expenses taken directly to equity (Note 21)
Transferred to profit or loss on cash flow hedges
Total comprehensive income for the year
Dividends to shareholders (Note 13)
Amount recycled on disposal of subsidiary
Loss on disposal of foreign currency loans
At 31 December 2009
1 Restated to reflect the inversion accounting adopted in the year – refer to Note 25.
Share capital
(Note 25)
£m
0.4
114.2
114.6
Share
Reserve for
premium
account
(Note 26)
£m
shares to
be issued
Merger
reserve
(Note 26)
(Note 26)
£m
5.4
5.4
£m
496.4
496.4
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
1.1
1.1
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
0.5
(2.3)
0.6
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
45.9
(160.1)
0.2
196.6
1,641.8
(1,839.3)
–
–
0.4
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
114.8
3.6
496.4
(76.8)
(0.4)
–
–
–
–
–
–
–
–
–
–
–
–
(1,641.8)
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
0.6
4.2
496.4
(1,718.6)
(0.4)
(83.6)
–
(83.6)
–
(34.1)
161.9
–
9.6
0.7
138.1
–
–
–
–
–
–
–
54.5
–
13.6
(72.0)
–
(3.9)
0.3
(62.0)
–
–
–
–
–
–
–
(0.4)
1.3
(6.6)
Capital
reserve
(Note 26)
£m
547.1
–
547.1
–
–
–
–
–
–
–
–
–
–
–
–
–
(547.1)
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
Retained
earnings
£m
(73.3)
–
(73.3)
84.9
–
–
(3.6)
0.9
–
82.2
(73.9)
–
–
(4.6)
–
1.1
547.1
478.6
105.6
–
–
(1.5)
0.4
–
104.5
(38.2)
–
9.6
–
–
–
1,999.4
–
(1.3)
Minority
interest
(Note 27)
£m
0.6
–
0.6
1.1
–
–
–
–
–
1.1
(0.5)
–
–
–
–
–
–
1.2
0.9
–
–
–
–
–
0.9
(1.2)
–
–
–
–
–
–
–
–
Total
£m
927.8
–
927.8
84.9
(34.1)
161.9
(3.6)
10.5
0.7
220.3
(73.9)
0.5
(3.0)
–
1.3
(1.2)
–
1,071.8
105.6
13.6
(72.0)
(1.5)
(3.5)
0.3
42.5
(38.2)
0.6
9.6
0.2
242.5
–
–
(0.4)
–
Total
equity
£m
928.4
–
928.4
86.0
(34.1)
161.9
(3.6)
10.5
0.7
221.4
(74.4)
0.5
(3.0)
–
1.3
(1.2)
–
1,073.0
106.5
13.6
(72.0)
(1.5)
(3.5)
0.3
43.4
(39.4)
0.6
9.6
0.2
242.5
–
–
(0.4)
–
2,552.6
1,328.6
0.9
1,329.5
Informa plc Annual Report & Financial Statements for the year ended 31 December 2009
63
Financial statements
consoLIdAted stAtement oF FInAncIAL posItIon
As at 31 December 2009
ASSETS
Non-current assets
Goodwill
Other intangible assets
Property and equipment
Deferred tax assets
Current assets
Inventory
Trade and other receivables
Current tax asset
Cash and cash equivalents
Total assets
EQUITY AND LIABILITIES
Capital and reserves
Called up share capital
Share premium account
Reserve for shares to be issued
Merger reserve
Other reserve
ESOP Trust shares
Hedging and translation reserve
Retained earnings
Equity attributable to equity holders of the parent
Minority interest
Total equity
Non-current liabilities
Long-term borrowings
Deferred tax liabilities
Retirement benefit obligation
Provisions
Trade and other payables
Derivative financial instruments
Current liabilities
Short-term borrowings
Current tax liabilities
Provisions
Trade and other payables
Deferred income
Derivative financial instruments
Total liabilities
Total equity and liabilities
Notes
15
16
17
21
22
19
20
25
27
23
21
36
28
29
24 (b), 24 (d)
23
28
29
30
24 (b), 24 (d)
2009
£m
1,727.3
1,077.6
21.4
32.8
2,859.1
39.1
220.3
3.7
16.5
279.6
3,138.7
0.6
0.4
4.2
496.4
(1,718.6)
(0.4)
(6.6)
2,552.6
1,328.6
0.9
1,329.5
889.1
228.0
11.3
7.8
3.2
13.2
1,152.6
–
122.3
14.4
201.5
292.0
26.4
656.6
1,809.2
3,138.7
2008
£m
1,810.5
1,246.5
27.1
39.4
3,123.5
39.9
287.5
–
10.3
337.7
3,461.2
114.81
1.11
3.6
496.4
(76.8)1
(0.4)
54.5
478.6
1,071.8
1.2
1,073.0
1,234.6
306.5
10.3
12.9
3.4
25.2
1,592.9
117.5
99.5
10.0
238.1
309.3
20.9
795.3
2,388.2
3,461.2
1 Restated to reflect the new capital structure of the new parent company of the Group – refer to Note 1.
These financial statements were approved by the Board of Directors on 2 March 2010 and were signed on its behalf by:
peter rigby
Chief Executive
Adam Walker
Finance Director
64
Informa plc Annual Report & Financial Statements for the year ended 31 December 2009
consoLIdAted cAsh FLoW stAtement
For the year ended 31 December 2009
Operating activities
Cash generated by operations
Income taxes paid
Interest paid
Net cash inflow from operating activities
Investing activities
Investment income
Proceeds on disposal of property, equipment and
non-current assets classified as held for sale
Purchases of intangible software assets
Purchases of property and equipment
Acquisition of subsidiaries and businesses
Product development costs
Disposal of businesses
Net cash outflow from investing activities
Financing activities
Dividends paid
Repayments of borrowings
Loans drawn down/new bank loans raised
Proceeds from the issue of share capital
Investment in own shares
Net cash outflow from financing activities
Net increase/(decrease) in cash and cash equivalents
Effect of foreign exchange rate changes
Cash and cash equivalents at beginning of the year
Cash and cash equivalents at end of the year
Notes
33
16
17
32
16
13
33
33
20
2009
£m
319.5
(27.3)
(47.4)
244.8
1.0
4.1
(11.3)
(8.8)
(38.5)
(6.0)
–
(59.5)
(38.2)
(617.7)
224.1
252.3
–
(179.5)
5.8
0.4
10.3
16.5
2008
£m
351.8
(39.2)
(73.3)
239.3
5.5
6.2
(25.3)
(13.9)
(16.3)
(1.9)
29.9
(15.8)
(73.9)
(409.8)
254.3
1.2
(1.9)
(230.1)
(6.6)
–
16.9
10.3
Informa plc Annual Report & Financial Statements for the year ended 31 December 2009
65
Financial statements
notes to the consoLIdAted FInAncIAL stAtements
For the year ended 31 December 2009
1 general information
On 30 June 2009, pursuant to a Scheme of Arrangement under Part 26 of the UK Companies Act 2006, a new parent company was
introduced which is now called Informa plc (the Company). The previous parent company has been renamed as Informa Group plc
(Old Informa).
The introduction of a new parent company constitutes a Group reconstruction and has been accounted for as a reverse acquisition
in accordance with IFRS 3 Business Combinations (2004). The comparative equity structure has been restated to reflect the new equity
structure of the Company. Therefore, although the Group reconstruction did not become effective until 30 June 2009, the consolidated
financial statements of the Company are presented as if the Company had always been part of the Group. Accordingly, the results of
the Group for the year ended 31 December 2009 are shown in the Consolidated Income Statement and the comparative figures for the
year ended 31 December 2008 are also presented on this basis. Earnings per share are unaffected by the reorganisation. The Company
is incorporated in Jersey under the Companies (Jersey) Law 1991 and headquartered in Switzerland. The address of the registered office
is given on page 29. The consolidated financial statements as at 31 December 2009 and for year then ended comprise those of the
Company and its subsidiaries and its interests in associates and jointly controlled entities (together referred to as the Group).
The nature of the Group’s operations and its principal activities are set out in the Principal Activities and Business Review sections of
the Directors’ Report on page 27.
The consolidated financial statements have been prepared on a going concern basis, for further analysis refer to Corporate
Governance Statement on page 38.
These financial statements are presented in pounds sterling (GBP) because that is the currency of the primary economic environment
in which the Group operates. Foreign operations are included in accordance with the policies set out in Note 3.
These financial statements have been presented to the nearest £million, instead of £’000 as previously reported. The comparative
figures have been adjusted accordingly.
Adoption of new and revised International Financial Reporting Standards (IFRSs)
Standards and interpretations adopted in the current period
The following new standards, amendments and interpretations have been adopted in the current year:
IAS 1 (revised 2007) Presentation of Financial Statements
IAS 23 (revised 2007) Borrowing Costs
IAS 32 (amended) / IAS 1 (amended) Puttable Financial Instruments and Obligations Arising on Liquidation
IAS 39 (amended) / IFRIC 9 (amended) Embedded derivatives
IFRS 1 (amended) / IAS 27 (amended) Cost of an Investment in a Subsidiary, Jointly Controlled Entity or Associate
IFRS 2 (amended) Share-based Payment – Vesting Conditions and Cancellations
IFRS 7 (amended) Financial Instruments: disclosures
IFRS 8 Operating Segments
IFRIC 12 Service Concession Arrangements
IFRIC 13 Customer Loyalty Programmes
IFRIC 15 Agreements for the Construction of Real Estate
IFRIC 16 Hedges of a Net Investment in a Foreign Operation
Improvements to IFRSs (2008)
The adoption of these Standards and Interpretations has not led to any changes in the Group’s accounting policies except for
adopting IFRS 7, IFRS 8 and IAS 1, which have only effected the presentation and disclosure in these financial statements.
IFRS 7 (amended) expands the disclosures required in respect of fair value measurements and liquidity risk. The Group has elected
not to provide comparative information for these expanded disclosures in the current year in accordance with the transitional reliefs
offered in this amendment.
66
Informa plc Annual Report & Financial Statements for the year ended 31 December 2009
IFRS 8 requires operating segments to be identified on the basis of internal reports about components of the Group that are
regularly reviewed by the Board of Directors to allocate resources and to assess performance. In contrast, the predecessor Standard
(IAS 14 Segment Reporting) required the Group to identify two sets of segments (business and geographical), using a risks and
rewards approach, with the Group’s system of internal financial reporting to key management personnel serving only as the starting
point for the identification of such segments. As a result, following the adoption of IFRS 8, the identification of the Group’s reportable
segments has changed.
IAS 1 (revised 2007) requires the presentation of a statement of changes in equity as a primary statement, separate from the income
statement and statement of comprehensive income. As a result, a Consolidated Statement of Changes in Equity has been included
in the primary statements, showing changes in each component of equity for each period presented. Further, IAS 1 requires a third
comparative to be included within the Statement of Financial Position (along with supplementary notes) in the instance that any
previously reported financial information is restated or represented. In the current year, the Group restructuring and adoption of IFRS
8 triggers this requirement. However, the Board of Directors have concluded that the addition of the 2007 comparative information
would not provide the user of the consolidated financial statements with any additional helpful information or enhance the overall
clarity of the consolidated financial statements, given a full explanation of the impact of both IFRS 8 and the Group restructuring are
provided in the Notes 6 and 25 respectively.
Standards and interpretations in issue, not yet adopted
At the date of authorisation of these financial statements, the following Standards and Interpretations which have not been applied
in these financial statements were in issue but have not yet come into effect:
IAS 24 (revised 2009) Related Party Disclosures
IAS 27 (amended 2008) Consolidated and Separate Financial Statements
IAS 28 (revised 2008) Investments in Associates
IAS 32 (amended 2009) Classification of Rights Issues
IAS 39 (amended 2009) Recognition and Measurement: Eligible Hedged Items
IFRS 2 (amended 2009) Group Cash-settled Share-based Payment Transactions
IFRS 3 (revised 2008) Business Combinations
IFRS 9 Financial Instruments
IFRIC 14 (amended 2009) Prepayments of a Minimum Funding Requirement
IFRIC 17 Distributions of Non-cash Assets to Owners
IFRIC 18 Transfers of Assets from Customers
IFRIC 19 Extinguishing financial liabilities with equity instruments
Improvements to IFRSs (2009)
– not endorsed by the EU
– endorsed by the EU
– endorsed by the EU
– endorsed by the EU
– endorsed by the EU
– not endorsed by the EU
– endorsed by the EU
– not endorsed by the EU
– not endorsed by the EU
– endorsed by the EU
– endorsed by the EU
– not endorsed by the EU
– not endorsed by the EU
The Directors anticipate that the adoption of these Standards and Interpretations in future periods will have no material impact on
the financial statements of the Group, except for:
•
•
Treatment of acquisition of subsidiaries when IFRS 3 (revised 2008) comes into effect for business combinations for which the
acquisition date is on or after the beginning of the first annual period beginning on or after 1 July 2009.
IFRS 9 is a new standard which enhances the ability of investors and other users of financial information to understand the
accounting of financial assets and reduces complexity. IFRS 9 uses a single approach to determine whether a financial asset is
measured at amortised cost or fair value, replacing the many different rules in IAS 39. This standard is effective for accounting
periods commencing on or after 1 January 2013 and therefore the Group has not commenced its evaluation of the impact on
the Group’s reported profit or net assets.
Informa plc Annual Report & Financial Statements for the year ended 31 December 2009
67
Financial statements
notes to the consoLIdAted FInAncIAL stAtements
For the year ended 31 December 2009 continued
2 Basis of preparation
The financial statements have been prepared in accordance with IFRS adopted by the European Union and therefore comply with
Article 4 of the EU IAS Regulations.
Adjusted results
Management believe that adjusted results and adjusted earnings per share (Note 14) provide additional useful information
on underlying trends to shareholders. These measures are used for internal performance analysis and incentive compensation
arrangements for employees. The term ‘adjusted’ is not a defined term under IFRS and may not therefore be comparable with
similarly titled profit measurements reported by other companies. It is not intended to be a substitute for, or superior to IFRS
measurements of profit. The principal adjustments made are in respect of:
•
•
restructuring and reorganisation costs – the costs incurred by the Group in reorganising and integrating acquired businesses,
non-recurring business restructuring, closure or disposal of businesses and costs associated with Board level changes; and
amortisation and impairment of other intangible assets – the Group continues to amortise other intangible assets and
test for impairment of these assets. The amortisation charge in respect of intangible software assets is included in the adjusted
results. The amortisation charge in respect of all remaining other intangible assets is excluded from the adjusted results as
management does not see these charges as integral to underlying trading.
The Group’s operations are split into three broad market sectors of Academic Information, Professional & Commercial Information
and Events & Training. These divisions are further analysed into more specific segments which bring together products in comparable
market areas under common business heads. This is how the Group’s operational management is structured and its results are
reviewed and thus form the reporting segments (Note 6).
Significant exchange rates
The following significant exchange rates versus GBP were applied during the year:
USD
EUR
Average rate
Closing rate
2009
1.5566
1.1196
2008
1.8637
1.2627
2009
1.6114
1.1180
2008
1.4602
1.0465
68
Informa plc Annual Report & Financial Statements for the year ended 31 December 2009
3 Accounting policies
Basis of accounting
The financial statements have been prepared on the historical cost basis, except for the revaluation of certain assets and financial
instruments. The principal accounting policies adopted, all of which have been consistently applied, are set out below.
Basis of consolidation
The consolidated financial statements incorporate the accounts of the Company and all of its subsidiaries. The consolidated financial
statements are prepared on a going concern basis. Control is achieved where the Company has the power to govern the financial
and operating policies of an investee entity so as to obtain benefits from its activities. The results of subsidiaries acquired or sold
are included in the consolidated financial statements from the effective date of acquisition or up to the effective date of disposal, as
appropriate. Where necessary, adjustments are made to the results of acquired subsidiaries to bring their accounting policies into
line with those used by other members of the Group.
All intra-group transactions, balances, income and expense are eliminated on consolidation.
Minority interest in the net assets of consolidated subsidiaries are identified separately from the Group’s equity and consist of the
amount of those interests at the date of the original business combination plus their share of changes in equity since that date.
Revenue
Revenue is measured at the fair value of consideration received or receivable and represents amounts receivable for goods and
services provided in the normal course of business, net of discounts, VAT and other sales related taxes, and provisions for returns
and cancellations.
Subscription income is deferred and recognised over the term of the subscription.
Exhibition income is deferred and recognised when the exhibition is held.
Delegates’ income represents fees earned and is recognised when the event is held.
Copy sales revenue is recognised on the sale of the directory or publication.
Advertising revenue is recognised on issue of the publication.
Consulting and training revenues are recognised as services are delivered. Where consultancy services are provided over a period
of time, revenue is recognised using the stage of completion method when the outcome of the contract can be measured reliably.
The stage of completion is determined with regard to key milestones in the contract being attained and the percentage of services
performed under the contract as a percentage of the total services to be performed.
Interest income
Interest income is accrued on a time basis, by reference to the principal outstanding and at the effective interest rate applicable,
which is the rate that exactly discounts estimated future cash receipts through the expected life of the financial asset to that asset’s
net carrying amount.
Dividend income
Dividend income from investments is recognised when the shareholders’ rights to receive payment have been established.
Business combinations
The acquisition of subsidiaries is accounted for using the purchase method. The cost of an acquisition is measured at the aggregate
of fair values, at the date of exchange, of assets given, liabilities incurred or assumed, and equity instruments issued by the Group in
exchange for control of the acquiree, plus any costs directly attributable to the business combination. The acquiree’s identifiable assets,
liabilities and contingent liabilities that meet the conditions for recognition under IFRS 3 (2004) are recognised at their fair value at the
acquisition date, except for non-current assets (or disposal groups) that are classified as held for sale in accordance with IFRS 5 Non-
Current Assets Held for Sale and Discontinued Operations, which are recognised and measured at fair value less costs to sell.
Informa plc Annual Report & Financial Statements for the year ended 31 December 2009
69
Financial statements
notes to the consoLIdAted FInAncIAL stAtements
For the year ended 31 December 2009 continued
3 Accounting policies continued
Goodwill
Goodwill arising on the acquisition of subsidiary companies and businesses is calculated as the excess of purchase consideration
over the fair value of net identifiable assets and liabilities at the date of acquisition. It is recognised as an asset at cost, assessed for
impairment at least annually and subsequently measured at cost less accumulated impairment losses. Any impairment is recognised
immediately in the Income Statement and is not subsequently reversed.
For the purpose of impairment testing, goodwill is allocated to each of the Group’s cash generating units, as defined by the Board
for internal management purposes, expected to benefit from the combination. Goodwill is tested for impairment annually or
more frequently when there is an indication that it may be impaired. Where an impairment test is performed a discounted cash
flow analysis is carried out based on the cash flows of the cash generating unit compared with the carrying value of that goodwill.
Management estimate the discount rates as the risk affected cost of capital for the particular cash generating units. If the recoverable
amount of the cash generating unit is less than the carrying amount of the unit, the impairment loss is allocated first to reduce the
carrying amount of any goodwill allocated to the unit and then to the other assets of the unit pro-rata on the basis of the carrying
amount of each asset in the unit.
Upon disposal, the attributable carrying value of goodwill is included in the calculation of the profit or loss on disposal.
Intangible assets
Intangible assets are initially measured at cost. For business combinations, cost is calculated based on the Group’s valuation
methodologies (Note 4). These assets are amortised over their estimated useful lives on a straight line basis, which are as follows:
Book lists
Journal titles
Database content and intellectual property
Large scale events and exhibitions
20 years
20 - 40 years
4 - 10 years
8 - 10 years
Software, which is not integral to a related item of hardware, is included in intangible assets. Capitalised internal-use software costs
include external direct costs of materials and services consumed in developing or obtaining the software, and payroll and payroll
related costs for employees who are directly associated with, and who devote substantial time to, the project. Capitalisation of these
costs ceases no later than the point at which the project is substantially complete and ready for its internal purpose. These costs are
amortised on a straight line basis over their expected useful lives which are deemed to be 3-10 years.
The expected useful lives of intangible assets are reviewed annually.
The Group does not have any intangible assets with indefinite lives.
Property and equipment
Property and equipment is recorded at cost less accumulated depreciation and provision for impairment. Depreciation is provided to
write off the cost less the estimated residual value of property and equipment on a straight line basis over the estimated useful lives
of the assets. The rates of depreciation are as follows:
Freehold buildings
Leasehold land and buildings
Equipment, fixtures and fittings
Freehold land is not depreciated.
50 years
Over life of the lease
3 - 15 years
The gain or loss arising on the disposal or retirement of an asset is determined as the difference between the net sale proceeds and
the carrying amount of the asset and is recognised in the Income Statement.
70
Informa plc Annual Report & Financial Statements for the year ended 31 December 2009
Impairment of tangible and intangible assets excluding goodwill
At each reporting date, the Group reviews the carrying amounts of its tangible and intangible assets to determine whether there is
any indication that those assets have suffered an impairment loss. If any such indication exists, the recoverable amount of the asset
is estimated in order to determine the extent of the impairment loss (if any). Where the asset does not generate cash flows that are
independent from other assets, the Group estimates the recoverable amount of the cash generating unit to which the asset belongs.
Recoverable amount is the higher of fair value less costs to sell and value in use. In assessing value in use, the estimated future cash
flows are discounted to their present value using a pre-tax discount rate that reflects current market assessments of the time value of
money and the risks specific to the asset for which the estimates of future cash flows have not been adjusted.
If the recoverable amount of an asset (or cash generating unit) is estimated to be less than its carrying amount, the carrying amount of
the asset (or cash generating unit) is reduced to its recoverable amount. An impairment loss is recognised as an expense immediately,
unless the relevant asset is carried at a revalued amount, in which case the impairment loss is treated as a revaluation decrease.
Non-current assets classified as held for sale
Non-current assets (and disposal groups) classified as held for sale are measured at the lower of carrying value and fair value less costs to sell.
Non-current assets and disposal groups are classified as held for sale if their carrying amount will be recovered through a sale
transaction rather than through continuing use. This condition is regarded as met only when the sale is highly probable and the asset
(or disposal group) is available for immediate sale in its present condition. Management must be committed to the sale which should
be expected to qualify for recognition as a completed sale within one year from the date of classification.
Inventory
Inventories are stated at the lower of cost and net realisable value. Cost comprises direct materials and expenses incurred in bringing
the inventory to its present location and condition. Net realisable value represents the estimated selling price less marketing and
distribution costs expected to be incurred.
Foreign currencies
Transactions in currencies other than the entity’s functional currency are recorded at the rates of exchange prevailing on the dates of
the transactions. Monetary assets and liabilities denominated in foreign currencies at the reporting date are retranslated at the rates
ruling at that date. These translation differences are disclosed in the Income Statement.
Non-monetary items carried at fair value that are denominated in foreign currencies are translated at the rates prevailing at the date when
the fair value was determined. Non-monetary items that are measured in terms of historical cost in a foreign currency are not retranslated.
Exchange differences arising on the retranslation of non-monetary items carried at fair value are included in the Income Statement for the
period except for differences arising on the retranslation of non-monetary items in respect of which gains and losses are recognised directly
in equity. For such non-monetary items, any exchange component of that gain or loss is also recognised directly in equity.
The statements of financial position of foreign subsidiaries are translated into pounds sterling at the closing rates of exchange. The results are
translated at an average rate, recalculated for each month between that month’s closing rate and the equivalent for the preceding month.
Foreign exchange differences arising from the translation of opening net investments in foreign subsidiaries at the closing rate are
taken directly to the hedging and translation reserve. In addition, foreign exchange differences arising from retranslation of the
foreign subsidiaries’ results from monthly average rate to closing rate are also taken directly to the Group’s hedging and translation
reserve. Such translation differences are recognised in the Income Statement in the financial year in which the operations are
disposed of. The translation movement on matched long-term foreign currency borrowings, qualifying as hedging instruments under
IAS 39, are also taken directly to the hedging and translation reserve.
Goodwill and fair value adjustments arising on the acquisition of a foreign entity are treated as assets and liabilities of the foreign
entity and translated at the closing rate.
Informa plc Annual Report & Financial Statements for the year ended 31 December 2009
71
Financial statements
notes to the consoLIdAted FInAncIAL stAtements
For the year ended 31 December 2009 continued
3 Accounting policies continued
Leasing
Leases are classified as finance leases whenever the terms of the lease transfer substantially all the risks and rewards of ownership to
the lessee. All other leases are classified as operating leases.
Assets held under finance leases and hire purchase contracts are capitalised at their fair value on the inception of the lease and
depreciated over the shorter of the period of the lease and the estimated useful economic lives of the assets. The corresponding
liability to the lessor is included in the Statement of Financial Position as a finance lease obligation. Finance charges are allocated
over the period of the lease in proportion to the capital amount outstanding and are charged to the Income Statement.
Operating lease rentals are charged to the Income Statement in equal annual amounts over the lease term.
Rental income from sub leasing property space is recognised on a straight line basis over the term of the relevant lease and is
matched with the corresponding payments made under the head lease.
Taxation
The tax expense represents the sum of the current tax payable and deferred tax.
Current tax is based on taxable profit for the year. Taxable profit differs from net profit as reported in the Income Statement because it
excludes items of income or expense that are taxable or deductible in other years and it further excludes items that are never taxable
or deductible. The Group’s liability for current tax is calculated using tax rates that have been enacted or substantively enacted by the
reporting date.
Deferred tax is the tax expected to be payable or recoverable on differences between the carrying amounts of assets and liabilities in
the financial statements and the corresponding tax bases used in the computation of taxable profit, and is accounted for using the
balance sheet liability method. Deferred tax liabilities are generally recognised for all taxable temporary differences and deferred
tax assets are recognised to the extent that it is probable that taxable profits will be available against which deductible temporary
differences can be utilised. Such assets and liabilities are not recognised if the temporary difference arises from goodwill or from the
initial recognition (other than in a business combination) of other assets and liabilities in a transaction that affects neither the tax nor
accounting profit.
Deferred tax is calculated for all business combinations in respect of intangible assets and properties. A deferred tax liability is
recognised to the extent that the fair value of the assets for accounting purposes exceeds the value of those assets for tax purposes
and will form part of the associated goodwill on acquisition.
Deferred tax liabilities are recognised for taxable temporary differences arising on investments in subsidiaries and associates except
where the Group is able to control the reversal of the temporary difference and it is probable that the temporary difference will not
reverse in the foreseeable future.
The carrying amount of deferred tax assets is reviewed at each reporting date and reduced to the extent that it is no longer probable
that sufficient taxable profits will be available to allow all or part of the asset to be recovered.
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.
Deferred tax is charged or credited in the Income Statement, except when it relates to items charged or credited directly to equity, in
which case the deferred tax is also dealt with in equity.
Deferred tax assets and liabilities are offset when there is a legally enforceable right to set off current tax assets against current tax
liabilities and when they relate to income taxes levied by the same taxation authority and the Group intends to settle its current tax
assets and liabilities on a net basis.
72
Informa plc Annual Report & Financial Statements for the year ended 31 December 2009
Pension costs
Certain Group companies operate defined contribution pension schemes for employees. The assets of the schemes are held
separately from the individual companies. The pension cost charge associated with these schemes represents contributions payable
and is charged as an expense when they fall due.
The Group also operates funded defined benefit schemes for employees. The cost of providing these benefits is determined using
the Projected Unit Credit Method, with actuarial valuations being carried out at each reporting date. Past service cost is recognised
immediately to the extent the benefits are vested, and otherwise are amortised on a straight line basis over the average period
until the benefits become vested. The current service cost and the recognised element of any past service cost are presented within
operating profit. The interest cost arising on the pension liability less the interest return on the scheme assets is presented within
finance costs. Actuarial gains and losses are recognised in full in the period in which they occur, outside of the Income Statement and
in the Statement of Comprehensive Income. The expected return on scheme assets reflects the estimate made by management of
the long-term yields that will arise from the specific assets held within the pension scheme.
The retirement benefit obligation recognised in the Statement of Financial Position represents the present value of the defined
benefit obligation as adjusted for unrecognised past service cost and the fair value of any relevant scheme assets.
Payments to defined contribution retirement benefit schemes are charged as an expense as they fall due.
Share-based payments
The Group issues equity-settled share-based payments to certain employees. A fair value for the equity-settled share awards is
measured at the date of grant. The fair value of the Share Options and Long-Term Incentive Plan is measured using the Binomial or
Monte Carlo model of valuation, which are considered to be the most appropriate valuation techniques. The valuation takes into
account factors such as non-transferability, exercise restrictions and behavioural considerations. To assign a fair value to share awards
granted under the Share Matching Plan where the proportion of the award released is dependent on the level of total shareholder
return, the Monte Carlo Simulation methodology is considered the most appropriate.
An expense is recognised to spread the fair value of each award over the vesting period on a straight line basis, after allowing for an
estimate of the share awards that will actually vest. The estimate of vesting is reviewed annually, with any impact on the cumulative
charge being recognised immediately.
Financial assets
Financial assets are recognised in the Group’s Statement of Financial Position when the Group becomes a party to the contractual provisions of
the instrument.
Financial assets are classified into the following categories: loans and receivables, cash and cash equivalents, and available-for-sale
investments. The classification is determined by Management upon initial recognition, and it is based on the purpose for which the
financial assets were acquired.
Effective interest method
The effective interest method is a method of calculating the amortised cost of a financial asset and of allocating interest income over the
relevant period. The effective interest rate is the rate that exactly discounts estimated future cash receipts (including all fees on points paid or
received that form an integral part of the effective interest rate, transaction costs and other premiums or discounts) through the expected life
of the financial asset, or, where appropriate, a shorter period.
Income is recognised on an effective interest basis for all debt instruments within the Group.
Loans and receivables
Trade receivables, loans and other receivables are measured on initial recognition at fair value, and are subsequently measured at amortised
cost using the effective interest rate method, less any impairment.
Cash and cash equivalents
Cash and cash equivalents comprise cash on hand and demand deposits, and other short-term highly liquid investments that are
readily convertible (with a maturity of three months or less) to a known amount of cash and are subject to an insignificant risk of
changes in value. Bank overdrafts that are repayable on demand and form an integral part of the Group’s cash management are
included as a component of cash and cash equivalents for the purpose of the Cash Flow Statement.
Informa plc Annual Report & Financial Statements for the year ended 31 December 2009
73
Financial statements
notes to the consoLIdAted FInAncIAL stAtements
For the year ended 31 December 2009 continued
3 Accounting policies continued
Available-for-sale investments
Listed and unlisted shares held by the Group that are traded in an active market are classified as being available-for-sale and are
stated at fair value. Fair value of listed securities are based on quoted market prices and the unlisted securities are based on cost.
Gains or losses arising from changes in fair value are recognised directly in equity, until the security is disposed of or is determined
to be impaired, at which time the cumulative gain or loss previously recognised in equity is included in the Income Statement for the
period. Where the investment is disposed of or is determined to be impaired, the cumulative gain or loss previously recognised in the
investments revaluation reserve is included in profit or loss for the period.
Impairment of financial assets
Financial assets are assessed for indicators of impairment at each reporting date. Financial assets are impaired where there is
objective evidence that, as a result of one or more events that occurred after the initial recognition of the financial asset, the
estimated future cash flows of the investment have been negatively impacted.
For unlisted shares classified as available-for-sale, a significant or prolonged decline in the fair value of the security below its cost is
considered to be objective evidence of impairment.
For all other financial assets objective evidence of impairment could include:
•
•
•
significant financial difficulty of the issuer or counterparty; or
default or delinquency in interest or principal payments; or
it is becoming probable that the borrower will enter bankruptcy or financial re-organisation.
For certain categories of financial assets, such as trade receivables, assets that are assessed not to be impaired individually are
subsequently assessed for impairment on a collective basis. Objective evidence of impairment for a portfolio of receivables could
include the Group’s past experience of collecting payments, an increase in the number of delayed payments in the portfolio past the
average credit period of 39 days (2008: 38 days), as well as observable changes in national or local economic conditions that correlate
with default on receivables. A specific provision will also be raised for trade receivables when there is objective evidence that the
Group will not be able to collect all amounts due according to the original terms of the receivables. Significant financial difficulties
of the debtor, probability that the debtor will enter bankruptcy or financial reorganisation, and default or delinquency in payments
(more than 90 days overdue) are considered indicators that the trade receivable is impaired.
For financial assets carried at amortised cost, the amount of the impairment is the difference between the asset’s carrying amount
and the present value of estimated future cash flows, discounted at the financial asset’s original effective interest rate.
The carrying amount of the financial asset is reduced by the impairment loss directly for all financial assets with the exception of trade
receivables, where the carrying amount is reduced through the use of a provision account. When a trade receivable is considered
uncollectible, it is written off against the provision account. Subsequent recoveries of amounts previously written off are credited
against the provision account. Changes in the carrying amount of the provision account are recognised in the Income Statement.
Derecognition of financial assets
The Group derecognises a financial asset only when the contractual rights to the cash flows from the assets have expired or have
been transferred and the Group has transferred substantially all the risks and rewards of ownership. If the Group neither transfers nor
retains substantially all the risks and rewards of ownership and continues to control the transferred asset, the Group recognises its
retained interest in the asset and an associated liability for amounts it may have to pay. If the Group retains substantially all the risks
and rewards of ownership of a transferred financial asset, the Group continues to recognise the financial asset and also recognises a
collateralised borrowing for the proceeds received.
74
Informa plc Annual Report & Financial Statements for the year ended 31 December 2009
Financial liabilities and equity instruments issued by the Group
Financial liabilities and equity instruments are classified according to the substance of the contractual arrangements entered into.
An equity instrument is any contract that evidences a residual interest in the assets of the Group after deducting all of its liabilities.
Classification as debt or equity
Debt and equity instruments are classified as either financial liabilities or as equity in accordance with the substance of the
contractual arrangement.
Equity instruments
An equity instrument is any contract that evidences a residual interest in the assets of an entity after deducting all of its liabilities.
Equity instruments issued by the Group are recorded at the proceeds received, net of direct issue costs.
Financial guarantee contract liabilities
Financial guarantee contract liabilities are measured at the amount of the obligation under the contract, as determined in
accordance with IAS 37 Provisions, Contingent Liabilities and Contingent Assets.
Bank borrowings
Interest-bearing bank loans and overdrafts are recorded at the proceeds received, net of direct issue costs. Finance charges,
including premiums payable on settlement or redemption and direct issue costs, are accounted for on an accrual basis in the Income
Statement using the effective interest rate method and are added to the carrying amount of the instrument to the extent that they
are not settled in the period in which they arise.
Finance costs
Finance costs of debts are capitalised against the debt value on first drawdown of the debt and are recognised in the Income
Statement using the effective interest rate method.
Trade payables
Trade payables are initially measured at fair value, and are subsequently measured at amortised cost, using the effective interest rate method.
Other financial liabilities
Other financial liabilities are initially measured at fair value, net of transaction costs. Other financial liabilities are subsequently
measured at amortised cost using the effective interest method, with interest expense recognised on an effective yield basis.
The effective interest method is a method of calculating the amortised cost of a financial liability and of allocating interest expense
over the relevant period. The effective interest rate is the rate that exactly discounts estimated future cash payments through the
expected life of the financial liability, or, where appropriate, a shorter period.
Derecognition of financial liabilities
The Group derecognises financial liabilities when, and only when, the Group’s obligations are discharged, cancelled or they expire.
Derivative financial instruments and hedge accounting
The Group’s activities expose it primarily to the financial risks of changes in foreign currency exchange rates and interest rates.
The derivative instruments utilised by the Group to hedge these exposures are primarily interest rate swaps. The Group does not use
derivative contracts for speculative purposes.
Derivatives are initially recognised at fair value at the date a derivative contract is entered into and are subsequently remeasured to their
fair value at each reporting date. The method of recognising the resulting gain or loss depends on whether the derivative is designated
as a hedging instrument, and if so, the nature of the item being hedged. The Group designates certain derivatives as either:
•
•
hedges of a particular risk associated with a recognised asset or liability or a highly probable forecast transaction (cash flow hedge); or
hedges of a net investment in a foreign operation (net investment hedge).
Informa plc Annual Report & Financial Statements for the year ended 31 December 2009
75
Financial statements
notes to the consoLIdAted FInAncIAL stAtements
For the year ended 31 December 2009 continued
3 Accounting policies continued
The Group documents at the inception of the transaction the relationship between hedging instruments and hedged items, as well as its
risk management objectives and strategy for undertaking various hedging transactions. Furthermore, at the inception of the hedge and
on an ongoing basis, the Group documents whether the hedging instrument that is used in a hedging relationship is highly effective in
offsetting changes in fair values or cash flows of the hedged item.
Changes in the fair value of derivative financial instruments that are designated and effective as hedges of future cash flows are recognised
directly in equity and the ineffective portion is recognised immediately in the Income Statement. If the cash flow hedge of a firm
commitment or forecast transaction results in the recognition of an asset or a liability, then, at the time the asset or liability is recognised,
the associated gains or losses on the derivative that had previously been recognised in equity are included in the initial measurement of the
asset or liability. For hedges that do not result in the recognition of an asset or a liability, amounts deferred in equity are recognised in the
Income Statement in the same period in which the hedged item affects net profit or loss.
Changes in the fair value of derivative financial instruments that do not qualify for hedge accounting are recognised in the Income
Statement as they arise.
Amounts payable or receivable in respect of interest rate swaps are recognised as adjustments to interest expense over the period
of the contracts.
Hedge accounting is discontinued when the hedge instrument expires or is sold, terminated, or exercised, or no longer qualifies for
hedge accounting. At that time, any cumulative gain or loss on the hedging instrument recognised in equity is retained in equity until
the forecast transaction occurs. If a hedged transaction is no longer expected to occur, the net cumulative gain or loss recognised in
equity is transferred to the Income Statement for the period.
A derivative is presented as a non-current asset or a non-current liability if the remaining maturity of the instrument is more than 12 months
and it is not expected to be realised or settled within 12 months. Other derivatives are presented as current assets or current liabilities.
Further details of derivative financial instruments are disclosed in Note 24.
ESOP Trust shares
Own shares deducted in arriving at shareholders’ funds represent the cost of the Company’s ordinary shares acquired by the
Employee Share Option Plan (ESOP) trusts in connection with certain of the Group’s employee share schemes.
Provisions
Provisions are recognised when the Group has a present obligation as a result of a past event, and it is probable that the Group will
be required to settle that obligation. Provisions are measured at the Directors’ best estimate of the expenditure required to settle the
obligation at the reporting date, and are discounted to present value where the effect is material.
Restructuring provisions are recognised when the Group has a detailed formal plan for the restructuring that has been
communicated to the affected parties.
4 critical accounting judgments and key sources of estimation uncertainty
In the application of the Group’s accounting policies, which are described in Note 3, the Directors are required to make judgments,
estimates and assumptions about the carrying amounts of assets and liabilities that are not readily apparent from other sources. The
estimates and associated assumptions are based on historical experience and other factors that are considered to be relevant. Actual
results may differ from these estimates.
The estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are recognised in
the period in which the estimate is revised if the revision affects only that period, or in the period of the revision and future periods if
the revision affects both current and future periods.
In addition to the judgment taken by management in selecting and applying the accounting policies set out above, the Directors
have made the following judgments concerning the amounts recognised in the consolidated financial statements.
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Informa plc Annual Report & Financial Statements for the year ended 31 December 2009
Valuation and asset lives of separately identifiable intangible assets
In order to determine the value of the separately identifiable intangible assets on the acquisition of a business combination,
management are required to make estimates when utilising the Group’s valuation methodologies. These methodologies include
the use of discounted cash flows, revenue and gross profit multiples. Asset lives are estimated based on the nature of the intangible
asset acquired and range between 3 and 40 years.
Valuation of share-based payments
In order to determine the value of share-based payments, management are required to make an estimation of the effects of
non-transferability, exercise restrictions, and behavioural considerations. The expected volatility is determined by calculating the
historical volatility of the Company’s share price calculated over one, two and three years back from the date of grant. The list of
inputs used in the Binomial and Monte Carlo Simulation models to calculate the fair values are provided in Note 37.
Valuation of financial instruments at fair value
Management have made a number of assumptions with regards to the models used to value financial instruments at their fair value
at year end. Valuation techniques commonly used by market practitioners are applied. Note 24 details the methods used to value the
primary financial instruments held or issued to finance the Group’s borrowing requirements and the derivative financial instruments
held to manage the interest rate profile.
For derivative financial instruments, assumptions are made based on quoted market rates adjusted for specific features of the
instrument. Other financial instruments are valued using a discounted cash flow analysis based on assumptions supported, where
possible, by observable market prices or rates.
Impairment of goodwill and other intangible assets
There are a number of assumptions management have considered in performing impairment reviews of goodwill and intangible
assets, as determining whether goodwill or intangible assets are impaired requires an estimation of the value in use of the cash
generating units to which goodwill has been allocated. The value in use calculation requires the directors to estimate the future cash
flows expected to arise from the cash generating unit and a suitable discount rate in order to calculate present value. Note 15 details
the assumptions that have been applied.
Pension assumptions
There are a number of assumptions management have considered on the advice of actuaries which have an impact on the results of
the valuation of the pension scheme liabilities at year end. The most significant assumptions are those relating to the discount rate of
return on investments and the rates of increase in salaries and pensions. Note 36 details the assumptions which have been adopted.
Deferred tax
Deferred tax assets and liabilities require management judgment in determining the amounts to be recognised. In particular,
judgment is used when assessing the extent to which deferred tax assets should be recognised with consideration given to the
timing and level of future taxable income.
Provisions
Provisions have been made for onerous leases, dilapidations and restructuring. These provisions are estimates and the actual costs
and timing of future cash flows are dependent on future events. Any difference between expectations and the actual future liability
will be accounted for in the period when such determination is made. Details of the Group’s provisions are set out in Note 28.
Contingent consideration
Contingent consideration relating to acquisitions has been included based on management estimates of the most likely
outcome (Note 28).
Informa plc Annual Report & Financial Statements for the year ended 31 December 2009
77
Financial statements
notes to the consoLIdAted FInAncIAL stAtements
For the year ended 31 December 2009 continued
5 revenue
An analysis of the Group’s revenue is as follows:
Subscriptions
Delegates
Copy sales
Exhibition
Sponsorship
Consulting
Advertising
Other
Total revenue
6 Business segments
2009
£m
425.7
304.7
202.4
89.3
50.5
79.0
31.6
38.5
1,221.7
2008
£m
363.6
408.9
188.9
88.2
52.6
79.1
38.6
58.1
1,278.0
Business segments
Management has identified reportable segments based on financial information used by the Board of Directors in allocating
resources and making strategic decisions.
In prior years, externally reported segment information was based on the markets being served rather than the services
being provided.
Information currently reported to the Board for the purposes of managing performance is now focused on the different services the
Group offers, namely publishing, and training and events.
The Group’s five newly identified reportable segments under IFRS 8 are therefore as follows:
Academic Information (AI)
This division, which includes the Taylor & Francis publishing business, provides a portfolio of online and print publications, primarily
for academic users across the spectrum of Science, Technology, Humanities and Social Sciences.
Professional and Commercial Information (PCI)
This division, which includes Datamonitor, Informa Business Information and Informa Financial Information provides information,
across a range of formats and on a global basis, to a variety of sectors including Medical, Pharmaceutical, Financial, Law, Commerce,
Commodities, Maritime and Telecoms.
Events and Training – Europe, US and ROW
These three divisions provide events and training to Europe, US and Rest of the World (ROW).
Information regarding the Group’s reportable segments is reported below and has been prepared consistently with the Group’s
accounting policies. Amounts reported for the prior year have been restated in accordance with the requirements of IFRS 8.
78
Informa plc Annual Report & Financial Statements for the year ended 31 December 2009
Segment revenue and results
31 December 2009
Revenue (Note 5)
Adjusted operating profit
Restructuring and
reorganisation costs (Note 8)
Intangible asset
amortisation1 (Note 16)
Operating profit
Loss on disposal of businesses
(Note 31)
Finance costs (Note 10)
Investment income (Note 11)
Profit before tax
1 Excludes software amortisation.
31 December 2008
Revenue (Note 5)
Adjusted operating profit
Restructuring and
reorganisation costs (Note 8)
Intangible asset
amortisation1 (Note 16)
Operating profit
Profit on disposal of businesses
(Note 31)
Finance costs (Note 10)
Investment income (Note 11)
Profit before tax
1 Excludes software amortisation.
AI
£m
294.4
104.3
PCI
£m
368.3
118.7
Events
Europe
£m
242.4
40.1
Events
US
£m
201.1
27.6
Events
ROW
£m
115.5
18.8
(0.7)
(13.3)
(9.3)
(3.4)
(1.0)
(21.7)
81.9
(45.1)
60.3
(23.5)
7.3
(27.7)
(3.5)
(11.7)
6.1
Unallocated
£m
–
–
(6.4)
–
(6.4)
AI
£m
243.5
76.4
PCI
£m
366.7
102.5
Events
Europe
£m
314.0
56.0
Events
US
£m
232.8
44.9
Events
ROW
£m
121.0
26.0
(1.2)
(4.3)
(4.8)
(5.9)
(0.5)
(19.6)
55.6
(42.4)
55.8
(26.6)
24.6
(24.8)
14.2
(10.5)
15.0
Unallocated
£m
–
–
(0.6)
–
(0.6)
Total
£m
1,221.7
309.5
(34.1)
(129.7)
145.7
(1.0)
(51.7)
3.5
96.5
Total
£m
1,278.0
305.8
(17.3)
(123.9)
164.6
16.8
(77.4)
5.0
109.0
The accounting policies of the reportable segments are the same as the Group’s accounting policies described in Note 3. Adjusted
operating result by segment is the measure reported to the Group’s Chief Executive for the purpose of resource allocation and
assessment of segment performance. Unallocated costs of £6.4m (2008: £0.6m) relate to the aborted transaction costs and change of
domicile – refer to Note 8. Finance costs and investment income are not allocated to segments, as this type of activity is driven by the
central treasury function, which manages the cash positions of the Group.
Informa plc Annual Report & Financial Statements for the year ended 31 December 2009
79
Financial statements
notes to the consoLIdAted FInAncIAL stAtements
For the year ended 31 December 2009 continued
6 Business segments continued
Segment assets
AI
PCI
Events Europe
Events US
Events ROW
Total segment assets
Unallocated assets
Total assets
2009
£m
930.1
2008
£m
935.0
1,070.6
1,136.5
500.3
408.0
155.5
3,064.5
74.2
3,138.7
557.7
458.2
216.8
3,304.2
157.0
3,461.2
For the purpose of monitoring segment performance and allocating resources between segments, management monitors the
tangible, intangible and financial assets attributable to each segment. All assets are allocated to reportable segments except for
corporate balances, including taxation (current and deferred). Assets used jointly by reportable segments are allocated on the basis
of the revenues earned by individual reportable segment.
80
Informa plc Annual Report & Financial Statements for the year ended 31 December 2009
The Group’s revenues from its major products and services were as follows:
AI
Subscriptions
Copy sales
Other
Total AI
PCI
Subscriptions
Copy sales
Advertising
Other
Total PCI
Events
Delegates
Exhibition
Sponsorship
Consulting
Advertising
Other
Total events
Total revenue
2009
£m
161.4
131.9
1.1
294.4
264.3
70.5
22.4
11.1
368.3
304.7
89.3
50.5
79.0
9.2
26.3
559.0
1,221.7
2008
£m
124.1
118.5
0.9
243.5
239.5
70.4
26.6
30.2
366.7
408.9
88.2
52.6
79.1
12.0
27.0
667.8
1,278.0
Information about major customers
No individual customer amounts to more than 10% of the Group’s revenue.
The Group’s revenue by location of customer and information about its segment assets by geographical location are detailed below:
Geographical information
United Kingdom
North America
Continental Europe
Rest of World
Revenue
Segment assets
2009
£m
168.1
480.8
314.2
258.6
2008
£m
164.0
467.9
380.1
266.0
1,221.7
1,278.0
2009
£m
1,412.0
1,108.6
377.7
240.4
3,138.7
2008
£m
1,475.5
1,432.9
289.3
263.5
3,461.2
Informa plc Annual Report & Financial Statements for the year ended 31 December 2009
81
Financial statements
notes to the consoLIdAted FInAncIAL stAtements
For the year ended 31 December 2009 continued
7 net operating expenses
Operating profit has been arrived at after (crediting)/charging:
Adjusted
results
2009
£m
Adjusting
items
2009
£m
Statutory
results
2009
£m
Adjusted
results
2008
£m
Adjusting
items
2008
£m
Statutory
results
2008
£m
Notes
Cost of sales
Staff costs (excluding redundancy costs)
Amortisation of other intangible assets
Depreciation
Impairment of available-for-sale
investments
Net foreign exchange gains/(losses)
Auditors’ remuneration for
audit services (see below)
Operating lease expenses
– Land and buildings
– Other
Restructuring and reorganisation costs
Other expenses
Total net operating expenses
9
16
17
34
34
8
445.0
330.3
13.5
9.2
–
1.4
1.1
26.5
0.9
–
84.3
912.2
–
–
129.7
–
–
–
–
–
–
34.1
–
163.8
445.0
330.3
143.2
9.2
–
1.4
1.1
26.5
0.9
34.1
84.3
1,076.0
490.3
344.5
5.2
10.8
0.2
(0.2)
1.2
21.8
1.2
–
97.2
972.2
–
–
123.9
–
–
–
–
–
–
17.3
–
141.2
490.3
344.5
129.1
10.8
0.2
(0.2)
1.2
21.8
1.2
17.3
97.2
1,113.4
Amounts payable to the auditors, Deloitte LLP and their associates by the Company and its subsidiary undertakings is provided below:
Fee payable to the Company’s auditors for the audit of the Company’s annual financial statements
Fee payable to the Company’s auditors and their associates for other services to the Group:
Audit of the Company’s subsidiaries pursuant to legislation
Total audit fees
Fee payable to the Company’s auditors for non-audit services comprises:
Corporate finance services
Other services pursuant to legislation
Other services
Total non-audit fees
2009
£m
0.7
2008
£m
0.9
0.4
1.1
1.0
0.1
0.1
1.2
0.3
1.2
0.2
0.1
0.1
0.4
A description of the work of the Audit Committee is set out in the Corporate Governance Statement on page 38 and includes an
explanation of how auditor objectivity and independence is safeguarded when non-audit services are provided by the auditors.
82
Informa plc Annual Report & Financial Statements for the year ended 31 December 2009
8 restructuring and reorganisation costs
Business restructuring
Integration costs
Aborted transaction costs
Change of domicile
2009
£m
27.7
–
2.1
4.3
34.1
2008
£m
14.9
1.8
0.6
–
17.3
In the year ended 31 December 2009, business restructuring costs comprise reorganisation costs of £5.0m (2008: £1.4m), redundancy
costs of £18.0m (2008: £9.9m) and vacant property provisions of £4.7m (2008: £3.6m).
9 staff numbers and costs
The monthly average number of persons employed by the Group (including Directors) during the year, analysed by category,
was as follows:
AI
PCI
Events
Number of employees
2009
1,457
3,149
3,985
8,591
2008
1,477
3,218
4,643
9,338
Since the adoption of IFRS 8 Operating segments there has been a change to our reportable segments (Note 6), which has determined
the split of our staff numbers. The comparative information has been restated to reflect this change.
Their aggregate remuneration comprised:
Wages and salaries
Social security costs
Pension costs charged to operating profit (Note 36)
Share-based payment (Note 37)
Staff costs (excluding redundancy costs)
Redundancy costs (Note 8)
2009
£m
293.5
27.3
8.9
0.6
330.3
18.0
348.3
2008
£m
306.5
29.0
8.5
0.5
344.5
9.9
354.4
Informa plc Annual Report & Financial Statements for the year ended 31 December 2009
83
Financial statements
notes to the consoLIdAted FInAncIAL stAtements
For the year ended 31 December 2009 continued
9 staff numbers and costs continued
The remuneration of Directors, who are the key management personnel of the Group, is set out below in aggregate for each of
the categories specified in IAS 24 Related Party Disclosures. Further information about the remuneration of individual Directors is
provided in the audited part of the Directors’ Remuneration Report on pages 45 to 54.
Short-term employee benefits
Post-employment benefits
Share-based payments
10 Finance costs
Interest expense on financial liabilities measured at amortised cost
Interest cost on pension scheme liabilities
Total interest expense
Hedge ineffectiveness on cash flow hedges
11 Investment income
Loans and receivables:
Interest income on bank deposits
Expected return on pension scheme assets
Note
36
Note
36
2009
£m
1.9
0.8
0.1
2.8
2009
£m
47.7
3.7
51.4
0.3
51.7
2009
£m
1.0
2.5
3.5
2008
£m
2.6
0.3
0.1
3.0
2008
£m
73.4
3.9
77.3
0.1
77.4
2008
£m
0.8
4.2
5.0
84
Informa plc Annual Report & Financial Statements for the year ended 31 December 2009
12 taxation
The tax (credit)/charge comprises:
Current tax:
UK corporation tax
Foreign tax
Deferred tax:
Current year
Deferred tax arising on Group restructuring
Total tax (credit)/charge on profit on ordinary activities
Note
21
21
The tax related to adjusting items within the Consolidated Income Statement relates to the following:
Amortisation of other intangible assets (Note 16)
Restructuring and reorganisation costs (Note 8)
(Loss)/profit on disposal of businesses (Note 31)
Deferred tax arising on Group restructuring
Gross
2009
£m
(129.7)
(34.1)
(1.0)
–
(164.8)
Tax
2009
£m
37.3
6.4
0.2
34.3
78.2
2009
£m
14.7
38.4
53.1
(28.8)
(34.3)
(10.0)
Gross
2008
£m
(123.9)
(17.3)
16.8
–
(124.4)
2008
£m
24.8
22.8
47.6
(24.6)
–
23.0
Tax
2008
£m
37.2
5.4
(4.7)
–
37.9
The current and deferred tax is calculated on the estimated assessable profit for the year. Taxation is calculated on each jurisdiction
based on the prevailing rates of that jurisdiction.
The total tax (credit)/charge for the year can be reconciled to the accounting profit as follows:
Profit before tax
Tax charge at weighted average rate
Permanent differences
Losses in certain jurisdictions that
have not been recognised
Deferred tax arising on Group restructuring
Tax (credit)/charge and effective rate for the year
2009
2008
£m
96.5
22.2
1.3
0.8
(34.3)
(10.0)
%
23.0
1.3
0.9
(35.6)
(10.4)
£m
109.0
21.8
1.2
–
–
23.0
%
20.0
1.1
–
–
21.1
In addition to the income tax (credit)/charge to the Consolidated Income Statement, a tax charge of £3.5m (2008: credit of £10.5m)
all of which relates to deferred tax (Note 21) has been recognised directly in equity during the year.
The tax charge arising on the disposal of the relevant subsidiary was £0.2m (2008: £4.6m).
Informa plc Annual Report & Financial Statements for the year ended 31 December 2009
85
Financial statements
notes to the consoLIdAted FInAncIAL stAtements
For the year ended 31 December 2009 continued
13 dividends
Amounts recognised as distributions to equity holders in the year:
Final dividend for the year ended 31 December 2007 of 9.51p per share1
Interim dividend for the year ended 31 December 2008 of 5.13p per share1
Final dividend for the year ended 31 December 2008 of 3.28p per share1
First interim dividend for the year ended 31 December 2009 of 3.60p per share
Proposed second interim dividend for the year ended 31 December 2009
of 7.85p per share (2008: 3.28p per share)
1 Dividend per share has been restated to reflect the bonus element of the rights issue. Details of the rights issue are provided in Note 25.
2009
£m
–
–
16.6
21.6
38.2
47.0
2008
£m
48.0
25.9
–
–
73.9
16.6
The final dividend for the year ended 31 December 2007 of 11.30 pence per ordinary share, the interim dividend for the year ended
31 December 2008 of 6.10 pence per ordinary share and the final dividend for the year ended 31 December 2008 of 3.90 pence per
ordinary share have been adjusted to reflect the bonus element of the rights issue.
Holders of 71,628 (2008: Nil) ordinary shares of 0.1 pence each have waived their rights to receive dividends.
Pursuant to the Dividend Access Plan (DAP) arrangements put in place as part of the Scheme of Arrangement, shareholders in the
Company are able to elect to receive their dividends from a UK source (a DAP election). Shareholders who (i) held 100,000 or fewer
shares on the date of admission of the Company’s shares to the London Stock Exchange and (ii) in the case of shareholders who did
not own the shares at that time, on the first dividend record date after they become shareholders in the Company, unless they elect
otherwise, are deemed to have elected to receive their dividends under the DAP arrangements. Shareholders who hold more than
100,000 shares and who wish to receive their dividends from a UK source must make a DAP election. All elections remain in force
indefinitely unless revoked. Unless shareholders have made a DAP election, or are deemed to have made a DAP election, dividends
will be received directly from the Company, domiciled in Switzerland, and will be taxed accordingly.
86
Informa plc Annual Report & Financial Statements for the year ended 31 December 2009
14 earnings per share
Basic
The basic earnings per share calculation is based on a profit attributable to equity shareholders of the parent of £105.6m
(2008: £84.9m). This profit on ordinary activities after taxation is divided by the weighted average number of shares in issue
(less those non-vested shares held by employee share ownership trusts) which is 560,764,541 (2008: 505,049,586 restated).
Diluted
The diluted earnings per share calculation is based on the basic earnings per share calculation above except that the weighted
average number of shares includes all potentially dilutive options granted by the reporting date as if those options had been
exercised on the first day of the accounting period or the date of the grant, if later, giving a weighted average of 560,843,788
(2008: 505,358,233 restated).
The table below sets out the adjustment in respect of diluted potential ordinary shares:
Weighted average number of shares used in basic earnings per share calculation
560,764,541
505,049,586
Effect of dilutive share options
79,247
308,647
Weighted average number of shares used in diluted earnings per share calculation
560,843,788
505,358,233
1 Restated to reflect the bonus element of the rights issue. Details of the rights issue are provided in Note 25.
2009
20081
Adjusted earnings per share
The basic and diluted adjusted earnings per share calculations have been made to allow shareholders to gain a further
understanding of the trading performance of the Group. They are based on the basic and diluted earnings per share
calculations above except that profits are based on continuing operations attributable to equity shareholders and are
adjusted for items that are not perceived by management to be part of the underlying trends in the business, and the tax
effect of those adjusting items, as follows:
Profit for the year
Minority interest
Adjusting operating profit items net of attributable taxation
Adjusted profit for the year attributable to equity shareholders
Earnings per share:
– Adjusted basic (p)
– Adjusted diluted (p)
1 Restated to reflect the bonus element of the rights issue. Details of the rights issue are provided in Note 25.
2009
£m
106.5
(0.9)
86.6
192.2
34.27
34.27
2008
£m
86.0
(1.1)
86.5
171.4
33.941
33.921
Informa plc Annual Report & Financial Statements for the year ended 31 December 2009
87
Financial statements
notes to the consoLIdAted FInAncIAL stAtements
For the year ended 31 December 2009 continued
15 goodwill
Cost
At 1 January 2008
Additions in the year (Note 32)
Derecognised on disposals of subsidiaries in the year (Note 31)
Exchange differences
At 1 January 2009
Additions in the year (Note 32)
Derecognised on disposals of subsidiaries in the year (Note 31)
Exchange differences
At 31 December 2009
Accumulated impairment losses
At 1 January 2008
Exchange differences
At 1 January 2009
Exchange differences
At 31 December 2009
Carrying amount
At 31 December 2009
At 31 December 2008
£m
1,569.8
2.1
(0.1)
258.3
1,830.1
0.4
(1.4)
(83.3)
1,745.8
(15.5)
(4.1)
(19.6)
1.1
(18.5)
1,727.3
1,810.5
Goodwill acquired in a business combination is allocated, at acquisition, to the cash generating units (CGUs) that are expected to
benefit from that business combination.
The carrying amount of goodwill recorded in the major groups of cash generating units is set out below:
AI
PCI
Events Europe
Events US
Events ROW
2009
£m
406.9
692.5
344.8
225.4
57.7
2008
£m
425.9
717.0
363.1
248.0
56.5
1,727.3
1,810.5
The Group tests goodwill annually for impairment or more frequently if there are indications that goodwill might be impaired.
The recoverable amounts of the CGUs are determined from value in use calculations. The key assumptions for the value in use
calculations are those regarding the discount rates and growth rates for the period. Management estimates discount rates
using pre-tax rates that reflect current market assessments of the time value of money and the risks specific to the CGUs. The
growth rates are based on industry growth forecasts and long-term growth in gross domestic product. The Group has changed
its method of calculating the value in use from estimating cash flows over 25 years to a terminal value calculation.
88
Informa plc Annual Report & Financial Statements for the year ended 31 December 2009
The Group prepares cash flow forecasts derived from the most recent financial budgets approved by the Board of Directors for the
next year and extrapolates cash flows for the following four years based on an estimated growth rates. The estimates of future cash
flows are consistent with past experience adjusted for management’s estimates of future performance. The cash flows thereafter are
based upon the long-term historic growth rates of the underlying territories in which the CGU operates.
The pre-tax discount rates applied are 9.5% for AI and PCI and 10.5% for the Events businesses. These rates have increased this year
reflecting the risk premium associated with each CGU. A growth rate of 3% has been applied for years 2-5 in AI and PCI and a range
between 2% and 15% for the Events businesses. The rates do not exceed the average long-term growth rate for the relevant markets.
The terminal growth rate of 2% has been used for AI and PCI, and 3% for the Events businesses. The only change from last year is the
increase by 1% point for the Events businesses. This is consistent with appropriate external sources for the relevant markets.
The most recent financial budgets approved by the Board of Directors have been prepared after considering the most recent
economic environment which has resulted in more conservative estimates about the future.
At 31 December 2009 and 31 December 2008, the carrying amounts of goodwill for CGUs were tested for impairment and deemed
not to be impaired. The carrying amounts were calculated based on future projected cash flows discounted at rates as disclosed
above, which represented the Group’s weighted average cost of capital plus a premium for risk.
Management has undertaken sensitivity analysis taking into consideration the impact on key impairment test assumptions arising
from a range of possible future trading and economic scenarios. The scenarios have been performed separately for each CGU with
the sensitivities summarised as follows:
•
•
An increase in the pre-tax discount rate by 1%.
A decrease of between 1% and 5.5% (depending on the CGU) on forecast operating profits over the next 5 years, and a decrease
in the terminal growth rate by 1% for all CGUs in the Events businesses.
The sensitivity analysis shows that no impairment would result from an increase in the pre-tax discount rate. An impairment of
between £0.5 million and £7.3 million would result from sensitivities applied to the growth rates.
Those CGUs which had the lowest level of headroom or potential impairment in this analysis related to the Events businesses,
which predominantly concentrate on the Financial Services sector. If the economic environment surrounding this sector continues
to decline throughout 2010, the effect of which would erode the customer base further, there may be the possibility of a future
impairment. Management will conduct regular reviews to monitor this.
Informa plc Annual Report & Financial Statements for the year ended 31 December 2009
89
Financial statements
notes to the consoLIdAted FInAncIAL stAtements
For the year ended 31 December 2009 continued
16 other intangible assets
Cost
At 1 January 2008
Arising on acquisitions in the year
Additions1,2
Disposals
Exchange differences
At 1 January 2009
Arising on acquisitions in the year
Additions1,2
Reclassification3
Disposals
Exchange differences
At 31 December 2009
Amortisation
At 1 January 2008
Charge for the year
Disposals
Exchange differences
At 1 January 2009
Charge for the year
Reclassification3
Disposals
Exchange differences
At 31 December 2009
Carrying amount
At 31 December 2009
At 31 December 2008
Book lists
and journal
titles
£m
Database
content and
intellectual
property
£m
Large scale
events and
exhibitions
£m
Intangible
software
assets
£m
Sub total
£m
550.3
631.5
5.9
–
(1.5)
83.1
637.8
12.1
–
–
(1.5)
(28.3)
620.1
(63.3)
(23.4)
1.5
(11.6)
(96.8)
(25.5)
–
1.5
4.7
–
1.9
(10.5)
148.8
771.7
3.8
6.0
–
(3.3)
(49.9)
728.3
(125.3)
(83.8)
2.9
(49.1)
(255.3)
(85.5)
–
3.3
19.2
(116.1)
(318.3)
144.2
2.9
–
–
33.8
180.9
4.6
–
–
–
(11.0)
174.5
(36.4)
(16.7)
–
(10.2)
(63.3)
(18.7)
–
–
4.0
(78.0)
Total
£m
1,394.2
8.8
29.3
(20.0)
267.6
1,679.9
20.5
17.3
21.4
(12.7)
(91.8)
1,326.0
8.8
1.9
(12.0)
265.7
1,590.4
20.5
6.0
–
(4.8)
(89.2)
68.2
–
27.4
(8.0)
1.9
89.5
–
11.3
21.4
(7.9)
(2.6)
1,522.9
111.7
1,634.6
(225.0)
(123.9)
4.4
(70.9)
(415.4)
(129.7)
–
4.8
27.9
(14.7)
(5.2)
2.4
(0.5)
(18.0)
(13.5)
(21.4)
7.5
0.8
(239.7)
(129.1)
6.8
(71.4)
(433.4)
(143.2)
(21.4)
12.3
28.7
(512.4)
(44.6)
(557.0)
504.0
541.0
410.0
516.4
96.5
117.6
1,010.5
1,175.0
67.1
71.5
1,077.6
1,246.5
1 Of the £6.0m (2008: £1.9m) additions to Database content and intellectual property, £6.0m (2008: £1.9m) is represented by cash paid.
2 Of the £11.3m (2008: £27.4m) additions to intangible software assets, £11.3m (2008: £25.3m) is represented by cash paid.
3 The reclassification of £21.4m relates to Intangible software assets within Property and equipment (Note 17) which have now been correctly presented within Intangible software assets.
Intangible software assets include a gross carrying amount of £59.0m (2008: £55.6m) and accumulated amortisation of
£7.2m (2008: £1.2m) which relates to software that has been internally generated.
The Group does not have any of its other intangible assets pledged as security over bank loans.
90
Informa plc Annual Report & Financial Statements for the year ended 31 December 2009
17 property and equipment
Cost
At 1 January 2008
Additions1
Acquisition of subsidiaries
Disposals
Exchange differences
At 1 January 2009
Additions1
Reclassification2
Disposals
Exchange differences
At 31 December 2009
Depreciation
At 1 January 2008
Disposals
Charge for the year
Exchange differences
At 1 January 2009
Disposals
Charge for the year
Reclassification2
Exchange differences
At 31 December 2009
Carrying amount
At 31 December 2009
At 31 December 2008
Freehold
land and
buildings
£m
Leasehold
land and
buildings
£m
Equipment
fixtures
and fittings
£m
0.6
–
–
–
–
0.6
1.1
–
–
–
1.7
(0.3)
–
–
–
(0.3)
–
(0.1)
–
–
(0.4)
1.3
0.3
9.0
1.7
–
(0.5)
0.3
10.5
3.8
–
(1.9)
(0.5)
11.9
(5.8)
0.4
(1.2)
(0.3)
(6.9)
1.7
(1.1)
–
0.3
(6.0)
5.9
3.6
92.1
12.2
1.1
(12.8)
5.3
97.9
3.9
(21.4)
(5.2)
(4.5)
70.7
(71.0)
9.2
(9.6)
(3.3)
(74.7)
1.3
(8.0)
21.4
3.5
(56.5)
14.2
23.2
Total
£m
101.7
13.9
1.1
(13.3)
5.6
109.0
8.8
(21.4)
(7.1)
(5.0)
84.3
(77.1)
9.6
(10.8)
(3.6)
(81.9)
3.0
(9.2)
21.4
3.8
(62.9)
21.4
27.1
1 All the £8.8m (2008: £13.9m) additions to tangible fixed assets was paid in cash during the year.
2 The reclassification of £21.4m relates to Intangible software assets within Property and equipment which have now been correctly presented within Intangible software assets (Note 16).
The Group does not have any of its property and equipment pledged as security over bank loans.
Informa plc Annual Report & Financial Statements for the year ended 31 December 2009
91
Financial statements
notes to the consoLIdAted FInAncIAL stAtements
For the year ended 31 December 2009 continued
18 subsidiaries
The listing below shows the principal subsidiary undertakings as at 31 December 2009 which principally affected the profits or net
assets of the Group. To avoid a statement of excessive length, details of investments which are not significant have been omitted.
Company
Country of registration
and incorporation
Taylor & Francis Group LLC
USA
Principal activity
Publishing
Taylor and Francis Group Limited
England and Wales
Holding company
Informa Healthcare AS
Informa Healthcare AB
Agra Informa Limited
Euroforum BV
Norway
Sweden
Publishing
Publishing
England and Wales
Conference organisation and publishing
Netherlands
Conference organisation and publishing
Euroforum Deutschland (Holding) GmbH
Germany
Conference organisation and publishing
IBC Asia (S) Pts Limited
Informa USA Inc
Informa UK Limited
Informa Holdings Limited
MMS Group Holdings Limited
PJB Publications Limited
I.I.R. Holdings Limited
Robbins-Gioia LLC1
AchieveGlobal Inc
ESI International Inc
I.I.R. Limited
Singapore
USA
Conference organisation and publishing
Conference organisation and publishing
England and Wales
Conference organisation and publishing
England and Wales
England and Wales
England and Wales
Bermuda
Holding company
Holding company
Holding company
Holding company
USA
USA
USA
Performance improvement
Performance improvement
Performance improvement
England and Wales
Conference organisation
Institute for International Research Inc
The Forum Corporation of North America
Huthwaite Inc
IIR Deutschland GmbH
USA
USA
USA
Germany
Institute for International Research (IIR) BV Netherlands
Conference organisation
Performance improvement
Performance improvement
Conference organisation
Conference organisation
Datamonitor Limited
Informa IP GmbH
Informa Finance GmbH
England and Wales
Business information
Switzerland
Switzerland
Royalties and licences
Finance
Informa Group Holdings Limited
England and Wales
Holding company
Informa Group plc
Informa IP LLC
England and Wales
USA
Holding company
Holding company
Ordinary
shares held
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
1 The holding in Robbins-Gioia is structured by proxy agreement with certain powers retained by the proxy holders to among others, protect the national security interests of the
government of the United States of America.
Of the above only Informa IP GmbH, Informa IP LLC, Informa Finance GmbH and Informa Group Holdings Limited are directly owned
by Informa plc. The proportion of voting power held is the same as the proportion of ownership interest. The consolidated financial
statements incorporate the financial statements of all entities controlled by the Company as at 31 December each year. Refer to
Note 3 for further description of the method used to account for investments in subsidiaries.
92
Informa plc Annual Report & Financial Statements for the year ended 31 December 2009
19 trade and other receivables
Current
Trade receivables
Less: provision
Trade receivable net
Other receivables
Prepayments and accrued income
Conference costs in advance
2009
£m
195.3
(25.2)
170.1
11.9
31.8
6.5
220.3
2008
£m
236.9
(22.1)
214.8
20.1
42.1
10.5
287.5
The average credit period taken on sales of goods is 39 days (2008: 38 days). The Group has provision policies for its various divisions
which have been determined by references to past default experience.
The Group’s exposures to credit risk and impairment losses related to trade and other receivables are disclosed in Note 24 (f ).
Under the normal course of business, the Group does not charge interest on its overdue receivables.
The Directors consider that the carrying amount of trade and other receivables approximates to their fair value.
20 cash and cash equivalents
Cash and cash equivalents
Bank overdrafts
Cash and cash equivalents in the Consolidated Cash Flow Statement
2009
£m
17.5
(1.0)
16.5
2008
£m
13.7
(3.4)
10.3
Bank overdrafts are included in cash and cash equivalents as they form an integral part of the Group’s cash management.
The Group’s exposure to interest rate risks and a sensitivity analysis for financial assets and liabilities is disclosed in Note 24 (d).
Informa plc Annual Report & Financial Statements for the year ended 31 December 2009
93
Financial statements
notes to the consoLIdAted FInAncIAL stAtements
For the year ended 31 December 2009 continued
21 deferred tax
At 1 January 2008
Credit to equity for the year
Acquisition of subsidiaries
Charge/(credit) to profit
or loss for the year
Foreign exchange movements
At 1 January 2009
(Credit)/debit to equity
for the year
Acquisition of subsidiaries
Charge/(credit) to profit
or loss for the year
Adjustment due to
group restructuring
Foreign exchange movements
At 31 December 2009
Accelerated
tax
depreciation
£m
Intangibles
£m
Pensions
(Note 36)
£m
Other
£m
(21.6)
Losses
£m
(3.2)
–
–
2.5
–
–
–
–
–
Cash flow
hedges
£m
(4.6)
(9.6)
–
–
–
(19.1)
(3.2)
(14.2)
–
–
1.2
–
1.7
–
–
–
–
–
3.9
–
–
–
–
(2.4)
(0.9)
–
0.5
–
(2.8)
(0.4)
–
0.1
–
–
(3.1)
(16.2)
(3.2)
(10.3)
Total
£m
261.3
(10.5)
2.6
(24.6)
38.3
267.1
3.5
0.4
(28.8)
(34.3)
(12.7)
195.2
2.0
–
–
0.6
–
2.6
–
–
1.6
–
–
4.2
291.1
–
2.6
(28.2)
38.3
303.8
–
0.4
(31.7)
(34.3)
(14.4)
223.8
Certain deferred tax assets and liabilities have been offset in accordance with the Group’s accounting policy. The following is the
analysis of deferred tax balances for Consolidated Statement of Financial Position purposes:
Deferred tax liability
Deferred tax asset
2009
£m
228.0
(32.8)
195.2
2008
£m
306.5
(39.4)
267.1
At 31 December 2009, the Group has unused tax losses of £11.5m (2008: £11.5m) available for offset against future profits. A deferred
tax asset of £3.2m (2008: £3.2m), has been recognised in respect of these losses.
At the reporting date, the aggregate amount of post acquisition undistributed earnings for which deferred tax liabilities have not
been recognised was £3.1m (2008: £512.2m). The deferred tax liability has significantly reduced, principally because of changes to
the legislation concerning the tax treatment of overseas dividends in the United Kingdom. The majority of the deferred tax liability
represents withholding tax payable on dividends. No liability has been recognised because the Group, being in a position to control
the timing of the distribution of intra group dividends, has no intention to distribute intra group dividends in the foreseeable future
that would trigger withholding tax.
94
Informa plc Annual Report & Financial Statements for the year ended 31 December 2009
22 Inventory
Raw materials
Work in progress
Finished goods and goods for resale
Write down of inventory during the year amounted to £1.6m (2008: £2.8m).
23 Borrowings
Non-current
Bank borrowings1
Total non-current borrowings
Current
Bank borrowings1
Loan notes due in less than one year
Total current borrowings
Total borrowings
2009
£m
0.8
3.6
34.7
39.1
2009
£m
889.1
889.1
–
–
–
889.1
2008
£m
1.0
2.8
36.1
39.9
2008
£m
1,234.6
1,234.6
116.3
1.2
117.5
1,352.1
1 The current weighted average effective interest rate (taking into account all bank loans and interest derivatives) is 4.7% (2008: 5.5%).
There have been no breaches of bank covenants during the year. The bank borrowings are guaranteed by material subsidiaries of the
Group. The Group does not have any of its property and equipment and other intangible assets pledged as security over bank loans.
The Group maintains the following significant lines of credit:
•
•
Syndicated bank loan facilities comprised of an amortising term loan facility that has been fully drawn in three currency
tranches of GBP 316.2m (2008: GBP 400.5m), USD 630.0m (2008: USD 798.0m) and EUR 135.0m (2008: EUR 171.0m) and a
£500.0m (2008: £500.0m) revolving credit facility. Interest is payable at the rate of LIBOR plus 0.6% (2008: LIBOR plus 1%).
£52.2m (2008: £62.0m) comprised of a number of bilateral bank facilities that can be drawn down to meet short-term financing
needs. These facilities consist of GBP 21.0m (2008: GBP 21.0m), USD 15.0m (2008: USD 16.0m), EUR 22.0m (2008: EUR 22.0m),
AUD 3.0m (2008: AUD 3.0m) and CAD 1.0m (2008: CAD 1.0m). Interest is payable at the local base rate plus margins that vary
between 0% and 6%.
The Group had the following committed undrawn borrowing facilities at 31 December:
Expiry date
In more than two years
The Group’s exposure to liquidity risk is disclosed in Note 24 (g).
2009
£m
433.7
2008
£m
252.5
Informa plc Annual Report & Financial Statements for the year ended 31 December 2009
95
Financial statements
notes to the consoLIdAted FInAncIAL stAtements
For the year ended 31 December 2009 continued
24 Financial instruments
(a) Financial risk management
The Group has exposure to the following risks from its use of financial instruments:
•
•
•
•
Capital risk management
Market risk
Credit risk
Liquidity risk
This note presents information about the Group’s exposure to each of the above risks, the Group’s management of capital, and the
Group’s objectives, policies and procedures for measuring and managing risk.
The Board of Directors has overall responsibility for the establishment and oversight of the Group’s risk management framework.
The Board has established a Treasury Committee which is responsible for developing and monitoring the Group’s risk management
policies. The committee meets and reports regularly to the Board of Directors and the Risk Committee (a sub-Committee of the Audit
Committee) on its activities.
The Group treasury function provides services to the Group’s businesses, co-ordinates access to domestic and international financial
markets and monitors and manages the financial risks relating to the operations of the Group through internal risk reports which
analyse exposures by degree and magnitude of risks. These risks include market risk (including currency risk, fair value interest rate
risk and price risk), credit risk, liquidity risk and cash flow interest rate risk.
The Treasury Committee has put in place policies that have been established to identify and analyse risks faced by the Group, to set
appropriate risk limits and controls and to monitor risks and adherence to limits. These policies provide written principles on funding
and investment policies, credit risk, foreign exchange risk and interest rate risk. Compliance with policies and exposure limits is
reviewed by the Treasury Committee. This committee is assisted in its oversight role by Internal Audit, who undertakes both regular
and ad hoc reviews of risk management controls and procedures, the results of which are reported to the Audit Committee.
Capital risk management
The Group manages its capital to ensure that entities in the Group will be able to continue as a going concern while maximising
the return to stakeholders as well as sustaining the future development of the business. In order to maintain or adjust the capital
structure, the Group may adjust the amount of dividends paid to shareholders, return capital to shareholders, issue new shares or sell
assets to reduce debt. The Group’s overall strategy remains unchanged from 2008.
The capital structure of the Group consists of debt, which includes the borrowings (Note 23), cash and cash equivalents (Note 20) and
equity attributable to equity holders of the parent, comprising issued capital (Note 25), reserves and retained earnings.
Gearing ratio
The Group’s Treasury Committee reviews the capital structure on a quarterly basis and as part of this review, the committee considers
the cost of capital and the risks associated with each class of capital.
Consistent with others in the industry, the Group monitors capital on the basis of the gearing ratio. This ratio is calculated as the net
debt divided by total capital. Net debt is calculated as total borrowings (including current and non-current borrowings) less cash and
cash equivalents. Total capital is calculated as equity (including capital, reserves and retained earnings).
96
Informa plc Annual Report & Financial Statements for the year ended 31 December 2009
(b) Categories of Financial instruments
Details of the significant accounting policies and methods adopted, including the criteria for recognition, the basis of measurement
and the basis on which income and expenses are recognised in respect of each class of financial asset, financial liability and equity
instrument are disclosed in Note 3 to the financial statements.
Financial assets
Loans and receivables
Trade receivables
Other receivables
Cash and cash equivalents
Total financial assets
Financial liabilities
Amortised cost
Bank borrowings
Loan notes
Trade payables
Accruals
Other payables
Deferred consideration
Derivative financial instruments in designated hedge accounting relationships1
Notes
19
19
20
23
23
29
29
29
29
2009
£m
170.1
11.9
16.5
198.5
889.1
–
28.5
134.4
39.5
2.3
39.6
2008
£m
214.8
20.1
10.3
245.2
1,350.9
1.2
30.8
167.5
27.7
15.5
46.1
Total financial liabilities
1,133.4
1,639.7
1 Derivative financial instruments in designated hedge accounting relationships are presented £26.4m (2008: £20.9m) within current liabilities and £13.2m (2008: £25.2m) within
non-current liabilities.
Informa plc Annual Report & Financial Statements for the year ended 31 December 2009
97
Financial statements
notes to the consoLIdAted FInAncIAL stAtements
For the year ended 31 December 2009 continued
24 Financial instruments continued
(c) Market risk
Market risk is the risk that changes in the market prices, such as foreign exchange rates and interest rates, will affect the Group’s
income or the value of its holdings of financial instruments. The objective of market risk management is to manage and control
market risk exposures within acceptable parameters, while optimising the return on risk.
The Group’s activities expose it mainly to the financial risks of changes in foreign currency exchange rates and changes in interest
rates. The Group enters into interest rate swaps to mitigate the risk of rising interest rates and by managing the risk of currencies of
its borrowings, the Group is able to achieve a level of natural hedge of both the Statement of Financial Position net currency assets
and also the currency earnings due to the currency interest payable. Refer to both interest rate risk and foreign currency risk in Note
24 (d) and (e) respectively.
The Group does not use derivative contracts for speculative purposes.
The Group’s overall risk management programme focuses on the unpredictability of financial markets and seeks to minimise
potential adverse effects on the Group’s financial performance. Risk management is carried out by a central treasury department
(Group treasury) under policies approved by the Board of Directors. The Board sets the Group’s treasury policy to ensure that it has
adequate financial resources to develop the Group’s businesses and to manage the currency and interest risks to which the Group is
exposed. Group treasury monitors the distribution of its cash assets, borrowings and facilities so as to control exposure to the relative
performance of any particular territory, currency or institution.
The Board and the Treasury Committee provides written principles for overall risk management, as well as policies covering specific
areas, such as funding, foreign exchange risk, interest rate risk, credit risk and investments of excess liquidity.
Risk is measured in terms of impact, inherent risk and residual risk, and takes account of management’s control actions in mitigating
against both external and internal risk events.
The risk model consolidates unique risk events and aggregated risk categories at both a business unit level and Group-wide, and
the results are presented to the Risk Committee and the Audit Committee for discussion and review, and may drive the allocation of
Internal Audit (previously known as Group Internal Control) resources to provide assurance on significant risks in its annual plan.
(d) Interest rate risk
The Group has no significant interest-bearing assets and is exposed to interest rate risk as entities in the Group borrow funds at both
fixed and floating interest rates. Borrowings issued at variable rates expose the Group to cash flow interest rate risk. Borrowings
issued at fixed rates expose the Group to fair value interest rate risk.
The risk is managed by the Group by maintaining an appropriate mix between fixed and floating rate borrowings by the use of
interest rate swap contracts. Hedging activities are evaluated regularly to align with interest rate views and defined risk appetite,
ensuring optimal hedging strategies are applied, by either protecting the Statement of Financial Position or protecting interest
expense through different interest rate cycles.
The Group policy is to minimise its exposure to fluctuations in interest rates by using interest rate swaps as cash flow hedges to
hedge up to 90% of forecast interest payments over a period of up to five years, based on forecast net debt levels by currency during
that period. This policy provides a level of certainty of future interest costs by swapping floating to fixed interest payments which in
turn assists the predictability of achieving interest-based loan covenants.
The Group’s exposures to interest rates on financial assets and financial liabilities are detailed in the liquidity risk section of this note.
Interest rate swap contracts
The Group draws down on its borrowing facilities at floating rates of interest. A portion of those are then swapped to fixed rates in
line with the Group treasury policy in order to manage its cash flow interest rate risk. Such contracts enable the Group to convert
borrowings from floating rates and swap them into fixed rates. Under interest rate swaps, the Group agrees with other parties to
exchange, at specified intervals (primarily quarterly), the difference between fixed contract rates and floating-rate interest amounts
calculated by reference to the agreed notional amounts.
98
Informa plc Annual Report & Financial Statements for the year ended 31 December 2009
The fair value of interest rate swaps at the reporting date is determined by discounting the future cash flows using the future interest
rate curves at the reporting date and the credit risk inherent in the contract, and is disclosed below. The average interest rate is based
on the outstanding balance at the end of the financial year.
The following table details the notional principal amounts and remaining terms of interest rate swap contracts outstanding as at the
reporting date:
Cash flow hedges
Outstanding receive floating,
pay fixed contracts
Within one year
Within one to two years
Within two to five years
Average contracted
fixed interest rate
Notional
principal amount
Fair value
2009
%
4.45
4.59
5.66
2008
%
4.97
4.73
4.64
2009
£m
144.4
397.2
112.0
653.6
2008
%
313.2
202.4
495.8
1,011.4
2009
£m
(26.4)
(10.4)
(2.8)
(39.6)
2008
%
(20.9)
(14.3)
(10.9)
(46.1)
At 31 December 2009, the fixed interest rates vary from 3.13% to 6.15% (2008: 4.01% to 6.23%), and the main floating rates are EURIBOR
and LIBOR. Gains and losses recognised in the hedging reserve in equity on interest rate swap contracts as of 31 December 2009 will be
released to the Consolidated Income Statement when the related bank borrowings are repaid (Note 23).
The following table details financial liabilities by interest category:
Fixed
rate
£m
653.6
Floating
rate
£m
235.5
–
–
–
–
–
39.6
–
–
–
–
–
–
Non-
interest
bearing
£m
–
–
28.5
134.4
39.5
2.3
Total
2009
£m
889.1
–
28.5
134.4
39.5
2.3
Fixed
rate
£m
1,011.5
–
–
–
–
–
–
39.6
46.1
Floating
rate
£m
339.4
1.2
–
–
–
–
–
Non-
interest
bearing
£m
–
–
30.8
167.5
27.7
15.5
–
Bank borrowings
Loan notes
Trade payables
Accruals
Other payables
Deferred consideration
Derivative financial instruments
in designated hedge
accounting relationships1
241.5
1 Derivative financial instruments in designated hedge accounting relationships are presented £26.4m (2008: £20.9m) within current liabilities and £13.2m (2008: £25.2m)
1,057.6
1,133.4
693.2
235.5
204.7
340.6
Total
2008
£m
1,350.9
1.2
30.8
167.5
27.7
15.5
46.1
1,639.7
within non-current liabilities.
Interest rate sensitivity analysis
A high percentage of loans are designated in hedging relationships, and hence the Group’s interest rate sensitivity would only be
effected by the exposure to variable rate debt.
If interest rates had been 100 basis points higher or lower and all other variables were held constant, the Group’s profit for the year
would decrease or increase by £2.4m (2008: £3.4m).
Informa plc Annual Report & Financial Statements for the year ended 31 December 2009
99
Financial statements
notes to the consoLIdAted FInAncIAL stAtements
For the year ended 31 December 2009 continued
24 Financial instruments continued
(e) Foreign currency risk
The Group is a business with significant net US Dollar (USD) and net Euro (EUR) transactions; hence exposures to exchange rate
fluctuations arise. Without action in conversion of USD and other trading currencies, such as the EUR, cash positions in these
currencies would develop imbalances by growing GBP debt.
Allied to the Group’s policy on the hedging of surplus foreign currency cash inflows, the Group will usually seek to finance its net
investment in its principal overseas subsidiaries by borrowing in those subsidiaries’ functional currencies, primarily EUR and USD. This
policy has the effect of protecting the Group’s consolidated Statement of Financial Position from movements in those currencies to
the extent that the associated net assets are hedged by the net foreign currency borrowings.
After taking into account foreign currency borrowings of £526.0m (2008: £730.4m) used to hedge against net investments in
foreign subsidiaries, the remaining monetary assets and liabilities are in the same currency as the functional currency of the
operations involved.
The following significant exchange rates versus GBP applied during the year:
USD
EUR
Average rate
Closing rate
2009
1.5566
1.1196
2008
1.8637
1.2627
2009
1.6114
1.1180
2008
1.4602
1.0465
Foreign currency sensitivity analysis
The Group receives approximately 45% of its revenues and incurs approximately 41% of its costs in USD or currencies pegged to USD.
The Group is therefore sensitive to movements in the USD against the GBP. Each 1 cent movement in the USD to GBP exchange rate
has a circa £3.5m impact on revenue and a circa £1.1m impact on operating profits. Offsetting this will be reductions to USD interest
and US tax liabilities. This analysis assumes all other variables, including interest rates, remain constant.
The Group receives approximately 9% of its revenues and incurs approximately 10% of its costs in Euros. The Group is therefore
sensitive to movements in the Euro against the GBP. Each 1 cent movement in the Euro to GBP exchange rate has a circa £1.0m
impact on revenue and a circa £0.2m impact on operating profits. Offsetting this will be reductions to Euro interest and Euro tax
liabilities. This analysis assumes all other variables, including interest rates, remain constant.
100
Informa plc Annual Report & Financial Statements for the year ended 31 December 2009
(f ) Credit risk
The Group’s principal financial assets are loans and receivables, cash and cash equivalents and trade and other receivables, which
represent the Group’s maximum exposure to credit risk in relation to financial assets.
The Group’s credit risk is primarily attributable to its trade and other receivables. The amounts presented in the Statement of
Financial Position are net of allowances for doubtful receivables, estimated by the Group’s management based on prior experience
and their assessment of the current economic environment.
Credit risk refers to the risk that a counterparty will default on its contractual obligations resulting in financial loss to the Group.
The Group has adopted a policy of only dealing with creditworthy counterparties as a means of mitigating the risk of financial loss
from defaults.
The credit risk on liquid funds and derivative financial instruments is limited because the counterparties are banks with high credit-
ratings assigned by international credit-rating agencies such as Standard and Poor’s, Moody’s and Fitch. No new credit exposure on
derivative financial instruments is permitted to a financial institution with a rating lower then A+ or equivalent. The Group’s exposure
and the credit ratings of its counterparties are continuously monitored and the aggregate value of transactions concluded is spread
amongst approved financial institutions. Credit exposure is controlled by counterparty limits that are reviewed and approved by the
Treasury Committee at least annually.
The carrying amount of financial assets recorded in the financial statements, which is net of impairment losses, represents the
Group’s maximum exposure to credit risk.
Trade receivables
Trade receivables consist of a large number of customers, spread across diverse industries and geographical areas and the Group’s
exposure to credit risk is influenced mainly by the individual characteristics of each customer. The demographics of the Group’s
customer base, including default risk of the industry and country in which the customers operate, has less of an influence on
credit risk.
The Group does not have any significant credit risk exposure to any single counterparty or any group of counterparties having similar
characteristics. The Group defines counterparties as having similar characteristics if they are related entities. Concentration of credit
risk did not exceed 5% of gross monetary assets at any time during the year.
The Group establishes a provision that represents its estimate of incurred losses in respect of trade and other receivables and investments
when there is objective evidence that the asset is impaired. The main components of this provision are a specific loss component that relates to
individually significant exposures, and a collective loss component established for groups of similar assets in respect of losses that have been
incurred but not yet identified. The collective loss provision is determined by references to past default experience.
Before accepting any new customer, the Group uses an external credit rating system to assess the potential customer’s credit quality.
All customers have credit limits set by credit managers and are subject to standard terms of payment for each division. As the events division
works on a prepaid basis they are not subject to the same credit controls and they have a very low bad debt history. The Group is exposed to
normal credit risk and potential losses are mitigated as the Group does not have significant exposure to any single customer.
The Directors consider that the carrying amount of trade and other receivables, which are non-interest bearing, approximates their fair value.
Informa plc Annual Report & Financial Statements for the year ended 31 December 2009
101
Financial statements
notes to the consoLIdAted FInAncIAL stAtements
For the year ended 31 December 2009 continued
24 Financial instruments continued
(f ) Credit risk continued
Ageing of trade receivables:
Not past due
Past due 0 – 30 days
Past due 31 – 60 days
Past due 61 – 90 days
Past due 91 – 120 days
Past due greater than 120 days
Gross 2009
£m
Provision 2009
£m
Gross 2008
£m
Provision 2008
£m
98.5
50.8
16.7
6.8
4.9
17.6
195.3
(0.9)
(0.7)
(0.4)
(0.4)
(0.4)
(22.4)
(25.2)
141.6
43.5
17.0
13.0
8.2
13.6
236.9
(0.2)
(0.1)
(0.1)
(0.1)
(0.5)
(21.1)
(22.1)
Trade receivables that are less than three months past due for payment are generally not considered impaired. Included in the
past due greater than 120 days, is a provision relating to returns on books of £9.3m (2008: £9.5m). This provision is based on
Management’s best estimate of previous seasonal sales and returns trends, and is included as part of the overall impairment
balance. Included in the Group’s trade receivables, are debtors with a carrying amount of £9.0m (2008: £9.7m), which are past due
at the reporting date for which the Group has not provided, as there has not been a significant change in the credit quality and the
amounts are considered recoverable. The Group does not hold any collateral over these balances.
Movement in the provision:
Balance at beginning of the year
Provision recognised
Receivables written off as uncollectible
Amounts recovered during the year
2009
£m
22.1
5.3
(1.3)
(0.9)
25.2
2008
£m
13.8
10.9
(1.9)
(0.7)
22.1
In determining the recoverability of a trade receivable, the Group considers any change in the credit quality of the trade receivable from
the date credit was initially granted up to the reporting date. The concentration of credit risk is limited due to the customer base being
large and unrelated. Accordingly, the directors believe that there is no further credit provision required in excess of the above amount.
There are no customers who represent more than 10% of the total balance of trade receivables in both 2009 and 2008.
102
Informa plc Annual Report & Financial Statements for the year ended 31 December 2009
(g) Liquidity risk
Liquidity risk is the risk that the Group will not be able to meet its financial obligations as they fall due. Ultimate responsibility for
liquidity risk management rests with the Board of Directors, though operationally it is managed by Group Treasury. They have built
an appropriate liquidity risk management framework for the management of the Group’s short, medium and long-term funding
and liquidity management requirements. The Group manages liquidity risk by maintaining adequate reserves, banking facilities
and reserve borrowing facilities, by continuously monitoring forecast and actual cash flows and matching the maturity profiles of
financial assets and liabilities. Included in Note 23 is a summary of additional undrawn facilities that the Group has at its disposal to
further reduce liquidity risk.
Historically and for the foreseeable future the Group has been and is expected to continue to be in a net borrowing position. The
Group’s policy is to fulfil its borrowing requirements by borrowing in the currencies in which it operates, principally GBP, USD and
EUR; thereby providing a natural hedge against projected future surplus USD and EUR cash inflows as well as spreading the Group’s
interest rate profile across a number of currencies.
Liquidity and interest risk tables
The following tables detail the Group’s remaining contractual maturity for its financial assets and liabilities.
The table below has been drawn up based on the contractual maturities of the financial assets including interest that will be earned
on those assets except where the Group anticipates that the cash flow will occur in a different period.
31 December 2009
Non-derivative financial assets
Non-interest bearing
31 December 2008
Non-derivative financial assets
Non-interest bearing
Carrying
amount
£m
Contractual
cash flows1
£m
Less than
1 year
£m
1-2 years
£m
2-5 years
£m
198.5
198.5
198.5
198.5
198.5
198.5
245.2
245.2
245.2
245.2
245.2
245.2
–
–
–
–
–
–
–
–
1 Under IFRS 7 contractual cash flows are undiscounted and therefore may not agree with the carrying amounts in the Statement of Financial Position.
The following tables have been drawn up based on the earliest date on which the Group can settle the debt. The table includes both
interest and principal cash flows.
31 December 2009
Non-derivative financial liabilities
Variable interest rate instruments
Trade and other payables
Deferred consideration
Derivative financial liability
Derivative financial instruments in designated hedge
accounting relationships
Carrying
amount
£m
Contractual
cash flows1
£m
Less than
1 year
£m
1-2 years
£m
2-5 years
£m
889.1
202.4
2.3
896.1
202.4
2.3
1,093.8
1,100.8
39.6
40.4
1,133.4
1,141.2
–
202.4
2.3
204.7
29.3
234.0
–
–
–
–
9.1
9.1
896.1
–
–
896.1
2.0
898.1
1 Under IFRS 7 contractual cash flows are undiscounted and therefore may not agree with the carrying amounts in the Consolidated Statement of Financial Position.
Informa plc Annual Report & Financial Statements for the year ended 31 December 2009
103
Financial statements
notes to the consoLIdAted FInAncIAL stAtements
For the year ended 31 December 2009 continued
24 Financial instruments continued
(g) Liquidity risk continued
31 December 2008
Non-derivative financial liabilities
Variable interest rate instruments
Loan borrowings
Trade and other payables
Deferred consideration
Derivative financial liability
Derivative financial instruments in designated hedge
accounting relationships
Carrying
amount
£m
Contractual
cash flows1
£m
Less than
1 year
£m
1-2 years
£m
2-5 years
£m
1,350.9
1,369.1
1.2
226.0
15.5
1.2
226.0
15.5
1,593.6
1,611.8
46.1
51.5
1,639.7
1,663.3
128.0
1.2
222.6
15.5
367.3
20.0
387.3
116.9
1,124.2
–
–
–
–
3.4
–
116.9
1,127.6
18.9
135.8
12.6
1,140.2
1 Under IFRS 7 contractual cash flows are undiscounted and therefore may not agree with the carrying amounts in the Statement of Financial Position.
The Group draws down on its borrowing facilities at floating rates of interest. A portion of those are then swapped to fixed rates in
line with the Group Treasury policy. The first portion of these swaps that matures within twelve months is £144.4m (2008: £313.2m),
the second portion that matures in a period greater than one year but less than two years is £397.2m (2008: £202.4m) and the final
portion that matures between two and five years is £112.0m (2008: £495.8m).
(h) Fair value of financial instruments
The fair value is defined as the amount at which a financial instrument could be exchanged in an arm’s length transaction between
informed and willing parties and is calculated by reference to market rates discounted to current value.
The fair values of financial assets and financial liabilities are determined as follows:
•
•
•
•
the fair value of financial assets and financial liabilities with standard terms and conditions and traded on active liquid markets is
determined with reference to quoted market prices;
the fair value of other financial assets and financial liabilities (excluding derivative instruments) is determined in accordance
with generally accepted pricing models based on discounted cash flow analysis using prices from observable current market
transactions and dealer quotes for similar instruments;
the fair value of derivative instruments is calculated using quoted prices. Where such prices are not available, use is made of
discounted cash flow analysis using the applicable yield curve for the duration of the instruments for non-optional derivatives,
and option pricing models for optional derivatives; and
the fair value of financial guarantee contracts is determined using option pricing models where the main assumptions are the
probability of default by the specified counterparty extrapolated from market-based credit information and the amount of loss,
given the default.
104
Informa plc Annual Report & Financial Statements for the year ended 31 December 2009
The Directors consider that the carrying amounts of financial assets and financial liabilities recorded at amortised cost in the financial
statements approximate to their fair values due to the short maturity of the instruments or because they bear interest at rates
approximate to the market.
Financial assets
Loans and receivables
Trade receivables
Other receivables
Cash and cash equivalents
Financial liabilities
Amortised Cost
Bank borrowings
Loan notes
Trade payables
Accruals
Other payables
Deferred consideration
Carrying
amount
2009
£m
Estimated
fair value
2009
£m
Notes
19
19
20
23
23
29
29
29
29
170.1
11.9
16.5
889.1
–
28.5
134.4
39.5
2.3
170.1
11.9
16.5
889.1
–
28.5
134.4
39.5
2.3
Carrying
amount
2008
£m
214.8
20.1
10.3
Estimated
fair value
2008
£m
214.8
20.1
10.3
1,350.9
1,350.9
1.2
30.8
167.5
27.7
15.5
1.2
30.8
167.5
27.7
15.5
(i) Fair value measurements recognised in the Consolidated Statement of Financial Position
The following table provides an analysis of financial instruments that are measured subsequent to initial recognition at fair value,
grouped into Levels 1 to 3 based on the degree to which the fair value is observable.
•
•
•
Level 1 fair value measurements are those derived from quoted prices (unadjusted) in active markets for identical assets or
liabilities.
Level 2 fair value measurements are those derived from inputs other than quoted prices included within Level 1 that are
observable for the asset or liability, either directly (i.e. as prices) or indirectly (i.e. derived from prices).
Level 3 fair value measurements are those derived from valuation techniques that include inputs for the asset or liability that are
not based on observable market data (unobservable inputs).
Financial liabilities
Derivative financial instruments in designated
hedge accounting relationships
Level 1
2009
£m
Level 2
2009
£m
Level 3
2009
£m
Total
2009
£m
–
39.6
–
39.6
Informa plc Annual Report & Financial Statements for the year ended 31 December 2009
105
Financial statements
notes to the consoLIdAted FInAncIAL stAtements
For the year ended 31 December 2009 continued
25 share capital
The Company was incorporated under the Companies (Jersey) Law 1991 on 11 March 2009, as a public company limited by shares
with the name Informa Limited and changed its name on 29 April 2009 to Informa plc. The Company became the parent company of
the Informa Group and the existing parent company, then also named Informa plc, was renamed Informa Group plc.
The Company was incorporated on 11 March 2009 with an authorised share capital of £1,000,000 divided into 1,000,000,000 ordinary
shares of 0.1 pence each. Of such shares, twenty ordinary shares were taken by the subscribers to the memorandum of association
and were paid up in full in cash.
On 21 April 2009 the authorised share capital was increased to 150,000,012,000 unissued ordinary shares of 0.1 pence each and
consolidated into 555,555,600 ordinary shares of 27 pence each.
On 27 April 2009 the total authorised share capital was then increased to £202,500,000 divided into 750,000,000 shares of 27 pence each.
On 27 May 2009 the Group undertook a 2 for 5 rights issue, offering 170,096,930 new ordinary shares at 150 pence per share,
representing a bonus to existing shareholders of 0.1887 ordinary shares per ordinary share held. The rights issue raised £242.5m,
net of expenses of £12.5m. The issue price of 150 pence per new ordinary share represented a 48.9 per cent discount to the closing
middle market price of 297.25 pence per ordinary share on 30 April 2009 (being the last business day before the announcement of
the rights issue), adjusted for the final dividend for 2008 which was not paid on the new ordinary shares, and a 40.6 per cent discount
to the theoretical ex-rights price based on that closing price, also adjusted for that dividend.
On 30 June 2009 under a Scheme of Arrangement between Old Informa, the former holding company of the Group, and its
shareholders under Part 26 of the UK Companies Act 2006, and as sanctioned by the High Court, all the issued shares in that
Company were cancelled and the same number of new shares were issued to the Company in consideration for the allotment to
shareholders of one ordinary share in the Old Informa for each ordinary share in the Company held on the record date, 30 June 2009.
On 20 July 2009, the Jersey Court approved the reduction of capital of Informa plc, whereby the nominal value of each ordinary share
was reduced from 27 pence to 0.1 pence and the balance of the share premium account was transferred to retained earnings. The effect
of the reduction of capital was to reduce share capital by £160.1m, reduce share premium by £1,839.3m and increase retained earnings
by £1,999.4m. This also resulted in an authorised share capital of £202,500,000 divided into 202,500,000,000 shares of 0.1 pence.
Share capital as at 31 December 2009 amounted to £0.6m. During the period, Informa plc issued, in addition to the rights issue,
223,568 ordinary shares of 0.1 pence for consideration of £0.2m as a result of the exercise of options and the vesting of LTIPs
(2008: 494,738 ordinary shares of 0.1 pence for a consideration of £1.2m were issued as a result of the exercise of share options).
Authorised
202,500,000,000 ordinary shares of 0.1p each (2008: 600,000,000 of 0.1p each)
Issued and fully paid
599,239,331 ordinary shares of 0.1p each (2008: 425,118,833 of 27p each)
1 Restated to reflect the new capital structure of the new parent company of the Group – refer to Note 1.
2009
£m
202.5
2009
£m
0.6
2008
£m
0.6
20081
£m
114.8
106
Informa plc Annual Report & Financial Statements for the year ended 31 December 2009
At 1 January
Rights issue
Shares issued on options exercised
Capital reduction
At 31 December
1 Restated to reflect the new capital structure of the new parent company of the Group – refer to Note 1.
Share options
As at 31 December 2009, outstanding options to subscribe for ordinary shares of 0.1p were as follows:
2009
£m
114.8
45.9
–
(160.1)
0.6
2008
£m
114.6
–
0.2
–
114.8
Number
69,590
907,152
73,858
124,674
169,766
103,600
77,047
1,000
162,942
245,802
1,935,431
Exercise price
per share
(pence)
Exercise period
619.68
20.03.03 to 19.03.10
475.09
25.04.03 to 24.04.10
565.82
02.11.03 to 01.11.10
436.40
07.03.04 to 06.03.11
212.32
15.03.05 to 14.03.12
252.38
15.03.05 to 14.03.12
191.09
30.04.06 to 29.04.10
227.15
30.04.06 to 29.04.10
304.61
22.03.07 to 21.03.11
256.26
22.03.07 to 21.03.11
It is intended that the above options will be satisfied by the issue of new shares in the Company except for the 71,628 shares already
in issue. Share options held by Directors as at 31 December 2009 are disclosed in the Directors’ Remuneration Report on page 52.
Informa plc Annual Report & Financial Statements for the year ended 31 December 2009
107
Financial statements
notes to the consoLIdAted FInAncIAL stAtements
For the year ended 31 December 2009 continued
26 capital and reserves
This note provides further explanation for the reserves listed in the Consolidated Statement of Changes in Equity.
Share capital and share premium
The share capital and share premium reflect the new equity structure of the Company – refer to Note 1.
Reserve for shares to be issued
This reserve relates to share options granted to employees under the employee share option plan. Further information about share-
based payments to employees is set out in Note 37.
Merger reserve
The merger reserve has not changed since 2004, when it was created from the business combination with Taylor & Francis Group plc.
Other reserve
Other reserve includes the redemption reserve, which is the reserve fund into which profits are allocated for the purpose of
redeeming or buying back shares in the Company.
Since the creation of the new equity structure the inversion accounting has been recorded in this reserve – refer to Note 1.
ESOP Trust shares
As at 31 December 2009 the Informa Employee Share Trust held 189,050 (2008: 93,269) ordinary shares in the Company at a cost of
£0.4m (2008: £0.4m) and a market value of £0.6m (2008: £0.2m). 71,628 shares (2008: Nil) held by the Employee Share Trust have not
been allocated to individuals and accordingly, dividends on these shares are waived. The remaining 117,422 shares (2008: 93,269)
held by the Employee Share Trust have been allocated to an individual and accordingly, dividends on these shares are payable.
At 31 December 2009 the Group held 0.0% (2008: 0.0%) of its own called up share capital.
Hedging and translation reserve
This reserve has two elements (i) the hedging reserve which comprises the effective portion of the cumulative net change in the fair
value of cash flow hedging instruments related to hedged transactions that have not yet occurred; and (ii) the translation reserve
which comprises all foreign currency differences arising from the translation of the financial statements of foreign operations, as well
as from the translation of liabilities that hedge the Company’s net investment in a foreign subsidiary.
Capital reserve
The capital reserve was created on 19 December 2007 as a result of the reduction of the Company’s issued share capital and
cancellation of the Company’s share premium account. On 31 March 2008, the entire capital reserve was released to retained
earnings in accordance with the terms of an undertaking given to the court in connection with the reduction and cancellation.
108
Informa plc Annual Report & Financial Statements for the year ended 31 December 2009
27 minority interest
The Group’s non-controlling interest in 2009 was composed entirely of equity interests and represents the minority shares of Nicholas
Publishing International (25.0%), S.C.S. Laidlaw et Cie (trading as IIR Monaco) (20.0%), and Agra CEAS (18.2%) (in 2008: Nicholas
Publishing International (25.0%), S.C.S. Laidlaw et Cie (trading as IIR Monaco) (20.0%), Euroforum Handelszeitung Konferenz AG (40%)
and Agra CEAS (18.2%)).
28 provisions
Contingent
consideration
£m
Property
leases
£m
Restructuring
provision
£m
Total
2009
£m
Contingent
consideration
£m
Property
leases
£m
1 January
Increase in year
Reclassification to
deferred consideration
Utilisation
Release
At 31 December
Included in current liabilities
Included in non-
current liabilities
15.4
3.0
–
(9.7)
(1.7)
7.0
4.3
2.7
7.5
4.7
–
(2.9)
(1.7)
7.6
2.5
5.1
–
29.5
–
(21.9)
–
7.6
7.6
–
22.9
37.2
–
(34.5)
(3.4)
22.2
14.4
7.8
31.9
1.0
(10.0)
(7.5)
–
15.4
7.2
8.2
4.7
3.0
–
(0.2)
–
7.5
2.8
4.7
Total
2008
£m
36.6
4.0
(10.0)
(7.7)
–
22.9
10.0
12.9
The contingent consideration relates primarily to the Datamonitor Limited and Black Book acquisitions. The contingent
consideration for Datamonitor is expected to be paid by 31 December 2010 and for Black Book by 31 December 2011.
As discussed in Note 8, during 2009 the Group implemented a number of restructuring and reorganisation projects. With the
exception of amounts relating to vacant properties (see below), the provision is expected to be substantially utilised by
31 December 2010.
The property lease provision represents the estimated excess of rent payable on surplus property leases, plus dilapidation
provisions, less rent receivable via sub leases. The property lease provisions will be fully utilised between one and five years.
Informa plc Annual Report & Financial Statements for the year ended 31 December 2009
109
Financial statements
notes to the consoLIdAted FInAncIAL stAtements
For the year ended 31 December 2009 continued
29 trade and other payables
Current
Deferred consideration
Trade payables
Accruals
Other payables
Total current
Non-current
Other payables
Total non-current
2009
£m
2.3
28.5
134.4
36.3
201.5
3.2
3.2
204.7
2008
£m
15.5
30.8
167.5
24.3
238.1
3.4
3.4
241.5
An analysis of the maturity of debt is given in Note 24 (g).
The Directors consider that the carrying amount of trade payables approximates to their fair value.
Trade payables and accruals principally comprise amounts outstanding for trade purchases and ongoing costs. The average credit
period taken for trade purchases is 52 days (2008: 46 days).
There are no suppliers who represent more than 10% of the total balance of trade payables in either 2009 or 2008.
The Group has financial risk management policies in place to ensure that all payables are paid within the credit time frame. Therefore,
under the normal course of business, the Group is not charged interest on overdue payables.
30 deferred income
Subscriptions and event fees received in advance
2009
£m
292.0
2008
£m
309.3
110
Informa plc Annual Report & Financial Statements for the year ended 31 December 2009
31 disposal of subsidiary
Disposals made in 2009
On 6 July 2009 the Group disposed of its interest in Mark Two Communications B.V. with a loss of £1.0m. The net assets of Mark Two
Communications B.V. at the date of disposal were as follows:
Trade and other receivables
Trade and other payables
Deferred income
Attributable goodwill
Amount recycled from the translation reserve
Net assets
Loss on disposal
Total consideration
£m
0.2
(0.1)
(0.1)
1.4
(0.4)
1.0
(1.0)
–
Disposals made in 2008
On 1 April 2008 the Group disposed of its interest in Map of Medicine with a profit of £17.8m arising and other smaller interests
during the year with a net loss of £1.0m. The net assets of Map of Medicine at the date of disposal were as follows:
Property and equipment
Trade and other receivables
Trade and other payables
Other intangible assets
Attributable goodwill
Net assets
Profit on disposal
Total consideration
Satisfied by:
Cash
Deferred consideration
Directly attributable costs
£m
8.1
1.7
(0.8)
7.6
0.1
16.7
17.8
34.5
35.0
0.9
(1.4)
34.5
Informa plc Annual Report & Financial Statements for the year ended 31 December 2009
111
Financial statements
notes to the consoLIdAted FInAncIAL stAtements
For the year ended 31 December 2009 continued
32 Business combinations
Business combinations made in 2009
Heldref Journals
On 8 July 2009, the Group acquired the trade and specific assets of The Helen Dwight Reid Educational Foundation, a publisher
of journals and magazines devoted to a variety of fields, for cash consideration of £8.5m. Including deferred consideration, total
consideration is not expected to exceed £9.2m.
Net assets acquired
Other intangible assets
Trade and other payables
Deferred income
Net assets
Total consideration
Satisfied by:
Cash
Deferred consideration
Net cash outflow arising on acquisition:
Cash consideration
Book
value
£m
–
–
(1.5)
(1.5)
Fair value
adjustments
£m
11.2
(0.5)
–
10.7
Fair
value
£m
11.2
(0.5)
(1.5)
9.2
9.2
8.5
0.7
9.2
8.5
8.5
If the acquisitions had taken place on the first day of the financial year (1 January 2009), they would have contributed £0.6m to profit
after tax attributable to equity shareholders and £3.7m to the revenue of the Group.
112
Informa plc Annual Report & Financial Statements for the year ended 31 December 2009
Other business combinations made in 2009
During 2009, the Group acquired the intellectual property of The Black Book of Outsourcing (Black Book), Cards Event, Broadband
Worldwide Forum Event and various other publishing titles. Total cash consideration of £4.7m was paid. Including deferred and
contingent consideration, total consideration is not expected to exceed £9.2m.
Net assets acquired
Other intangible assets
Deferred income
Deferred tax liabilities
Net assets
Goodwill
Total consideration
Satisfied by:
Cash
Deferred consideration
Contingent consideration
Directly attributable costs
Net cash outflow arising on acquisition:
Cash consideration
Book
value
£m
–
(0.1)
–
(0.1)
Fair value
adjustments
£m
9.3
–
(0.4)
8.9
Fair
value
£m
9.3
(0.1)
(0.4)
8.8
0.4
9.2
4.7
1.4
3.0
0.1
9.2
4.7
4.7
Goodwill of £0.4m represents the excess of the purchase price over the fair value of the intangible assets acquired. The goodwill
arising on the acquisition is largely attributable to the anticipated incremental sales synergies associated with being part of the
Group. The values are a best estimate of fair value but these will be reviewed and adjusted in the next year should this be necessary.
If the acquisitions had taken place on the first day of the financial year (1 January 2009), they would have contributed £0.7m to profit
after tax attributable to equity shareholders and £3.2m to the revenue of the Group.
Informa plc Annual Report & Financial Statements for the year ended 31 December 2009
113
Financial statements
notes to the consoLIdAted FInAncIAL stAtements
For the year ended 31 December 2009 continued
32 Business combinations continued
Cash paid on acquisition net of cash acquired
Current year acquisitions1
Prior year acquisitions
2008 acquisitions
2007 acquisitions
Infoline Conferences Limited
Forum Pacific Rim Franchises
HQ Link Pte Limited
Datamonitor plc
Productivity Press
The Superyacht Cup SA
Informanews Iberia, SA
Other
2006 acquisitions:
Citeline, Inc
Junction Limited
2005 acquisitions:
Mark Two Communications B.V.
2009
£m
13.2
0.8
–
–
–
9.6
–
0.5
0.7
0.1
13.7
(0.1)
–
38.5
2008
£m
–
5.7
0.6
(0.2)
0.4
7.9
0.3
0.2
0.7
0.4
–
0.2
0.1
16.3
1 These acquisitions are covered by the ‘Current year’s business combinations’ table on page 112. Where goodwill is provisional, a best estimate of fair value has been made but these will be
reviewed and adjusted in the next year should it be necessary.
The combined benefit to the Group’s profit after tax from the newly acquired businesses amounted to £0.6m on revenues
of £2.0m (2008: £3.3m on revenues of £1.3m). The total net assets of newly acquired businesses amounted to £19.9m as at
31 December 2009 (2008: £9.6m).
All acquisitions were paid for in cash (including deferred and contingent consideration) and in all acquisitions full control over
the business has been acquired, either by acquiring 100% of the ordinary issued share capital or by means of an asset purchase
transaction. All transactions have been accounted for by the purchase method of accounting.
114
Informa plc Annual Report & Financial Statements for the year ended 31 December 2009
Business combinations made in 2008
In 2008, the Group acquired the trading assets or 100% of the issued share capital of Multilingual Matters Limited, Keegan Paul
Limited, INMEX, Binet Exhibitions Pte Limited and various other publishing titles. Total cash consideration of £6.4m was paid.
Including deferred consideration, total consideration will not exceed £9.6m.
Net assets acquired
Other intangible assets
Property and equipment
Cash and cash equivalents
Deferred income
Deferred tax liabilities
Net assets
Goodwill
Total consideration
Satisfied by:
Cash
Deferred consideration
Net cash outflow arising on acquisition:
Cash consideration
Cash and cash equivalents acquired
Book
value
£m
–
1.1
0.7
(0.5)
–
1.3
Fair value
adjustments
£m
Fair
value
£m
8.8
–
–
–
(2.6)
6.2
8.8
1.1
0.7
(0.5)
(2.6)
7.5
2.1
9.6
6.4
3.2
9.6
6.4
(0.7)
5.7
The majority of the deferred consideration was paid during 2009. £0.2m is payable in 2010.
Informa plc Annual Report & Financial Statements for the year ended 31 December 2009
115
Financial statements
notes to the consoLIdAted FInAncIAL stAtements
For the year ended 31 December 2009 continued
33 notes to the cash flow statement
Profit before tax
Adjustments for:
Depreciation of property and equipment
Amortisation of other intangible assets
Share-based payment
Loss/(profit) on disposal of businesses
Finance costs
Investment income
Impairment of available-for-sale investments
Profit on disposal of property and equipment
Decrease/(increase) in inventories
Decrease/(increase) in receivables
(Decrease)/increase in payables
Cash generated by operations
Analysis of net debt
Cash and cash equivalents
Bank loans due in less than one year
Loan notes due in less than one year
Bank loans due in more than one year
Notes
17
16
37
31
10
11
2009
£m
96.5
9.2
143.2
0.6
1.0
51.7
(3.5)
–
–
0.9
55.8
(35.9)
319.5
2008
£m
109.0
10.8
129.1
0.5
(16.8)
77.4
(5.0)
0.2
(0.1)
(8.4)
(36.0)
91.1
351.8
At
1 January
2009
£m
10.3
(116.3)
(1.2)
(1,234.6)
(1,341.8)
Non-cash
items
£m
–
109.8
–
(111.8)
(2.0)
Cash
flow
£m
Exchange
movement
£m
At
31 December
2009
£m
5.8
–
1.2
392.4
399.4
0.4
6.5
–
64.9
71.8
16.5
–
–
(889.1)
(872.6)
Included within the cash flow movement of £399.4m is £617.7m (2008: £409.8m) of repayment of borrowings and £224.1m (2008: £254.3m)
of loans drawn down.
The net movement caused by non-cash items arises from arrangement fee amortisation of £2.0m (2008: £1.5m).
116
Informa plc Annual Report & Financial Statements for the year ended 31 December 2009
34 operating lease arrangements
Minimum lease payments under operating leases recognised
in Consolidated Income Statement for the year
2009
£m
27.4
At the reporting date, the Group had outstanding commitments for future minimum lease payments under non-cancellable
operating leases, which fall due as follows:
Operating leases which expire:
Within one year
Within two to five years
After five years
2009
Land and
buildings
£m
27.3
69.8
25.4
122.5
Other
£m
0.8
1.0
–
1.8
2008
Land and
buildings
£m
25.9
68.1
28.0
122.0
2008
£m
23.0
Other
£m
1.2
1.5
–
2.7
Operating lease payments on land and buildings represent rentals payable by the Group for certain of its properties. Leases are
negotiated for an average term of four years and rentals are fixed for an average of three years.
35 commitments
Commitments for the acquisition of other intangible assets
36 retirement benefit schemes
2009
£m
–
2008
£m
0.4
The Group operates three defined benefit pension schemes, the Informa Final Salary Scheme, the Taylor & Francis Group Pension and
Life Assurance Scheme and the Achieve Learning (UK) Pension and Benefits Plan (the Group Schemes) for all qualifying UK employees
providing benefits based on final pensionable pay. The assets of the Group Schemes are held in separate trustee administered funds.
Contributions to the Group Schemes are charged to the Income Statement so as to spread the cost of contributions over employees’
working lives with the Group. Contributions are determined by a qualified actuary on the basis of triennial valuations using the
projected unit method.
Charge to operating profit
The charge to operating profit for the year in respect of pensions was £8.9m (2008: £8.5m). The net pension charge for the defined
benefit schemes in the Consolidated Income Statement for the year was £2.2m (2008: £1.0m), of which £1.0m (2008: £1.3m) was
charged to operating profit. The Group also operates defined contribution schemes, and contributions charged to the Consolidated
Income Statement during the year were £7.9m (2008: £7.2m).
Informa plc Annual Report & Financial Statements for the year ended 31 December 2009
117
Financial statements
notes to the consoLIdAted FInAncIAL stAtements
For the year ended 31 December 2009 continued
36 retirement benefit schemes continued
Defined benefit schemes
The latest full actuarial valuation of the Informa Final Salary Scheme was carried out at 31 March 2008. A full actuarial valuation was
carried out for IAS 19 purposes as at 31 December 2009 by a qualified independent actuary. Employees who are members contribute
10% of pensionable pay; the Group’s contribution was 16.5% of pensionable pay for the first nine months of the year, and 27.3% of
pensionable pay for the rest of the year, plus an additional annual contribution of £0.6m. The market value of the scheme’s assets as
at 31 December 2009 was £44.2m which represented 83% of the benefits (valued on an IAS 19 basis) that had accrued to members,
after allowing for expected future increases in earnings. The Scheme was closed to new entrants on 1 April 2000.
The assumptions which have the most significant effect on the results of the valuation are those relating to the discount rate, rate of
return on investments and the rates of increase in salaries, price inflation and pensions. The assumptions adopted are:
Discount rate
Rate of return on investments
Rate of price inflation pre-retirement
Rate of increase in pensions in payment – non pensioners
Rate of increase in pensions in payment – pensioners
Rate of increase in salaries
2009
5.8% p.a.
5.5% p.a.
3.4% p.a.
3.7% p.a.
3.4% p.a.
4.9% p.a.
2008
6.0% p.a.
4.1% p.a.
3.1% p.a.
3.0% p.a.
3.0% p.a.
4.6% p.a.
The latest full actuarial valuation of the Taylor & Francis Group Pension and Life Assurance Scheme was carried out at 30 September 2008.
A full actuarial valuation was carried out for IAS 19 purposes as at 31 December 2009 by a qualified independent actuary. Employees who
are members contribute 3% of pensionable pay; the Group’s contribution over the year was 21.3% of pensionable pay plus an additional
annual contribution of £1.0m. The market value of the scheme’s assets as at 31 December 2009 was £14.2m which represented 88% of the
benefits (valued on an IAS 19 basis) that had accrued to members, after allowing for expected future increases in earnings. The Scheme
closed to new entrants on 8 March 2002.
The assumptions which have the most significant effect on the results of the valuation are those relating to the discount rate, rate of
return on investments and the rates of increase in salaries, price inflation and pensions. The assumptions adopted are:
Discount rate
Rate of return on investments
Rate of price inflation pre-retirement
Rate of increase in pensions in payment – non pensioners
Rate of increase in pensions in payment – pensioners
Rate of increase in salaries
2009
5.8% p.a.
6.1% p.a.
3.4% p.a.
3.7% p.a.
3.4% p.a.
4.9% p.a.
2008
6.0% p.a.
5.8% p.a.
3.1% p.a.
3.0% p.a.
3.0% p.a.
4.6% p.a.
The latest full actuarial valuation of the Achieve Learning (UK) Pension & Benefits Scheme was carried out at 31 December 2006.
A further valuation was carried out at 31 December 2008 for IAS 19 purposes and was updated to 31 December 2009 by a qualified
independent actuary. The scheme was closed to future accrual of pensions at the time of the acquisition of IIR Holdings Limited in 2005. The
Group’s contribution over the year was £60,000. The market value of the scheme’s assets as at 31 December 2009 was £5.0m which represented
91% of the benefits (valued on an IAS 19 basis) that had accrued to members, after allowing for expected future increases in inflation.
118
Informa plc Annual Report & Financial Statements for the year ended 31 December 2009
The assumptions which have the most significant effect on the results of the valuation are those relating to the discount rate, rate
of return on investments and the rates of increase in price inflation and pensions. The assumptions adopted are:
Discount rate
Rate of return on investments
Rate of price inflation pre-retirement
Rate of increase in pensions in payment – non pensioners
Rate of increase in pensions in payment – pensioners
Rate of increase in salaries
Amounts recognised in respect of these defined benefit schemes are as follows:
Analysis of the amount charged to operating profit
Current service cost
Total operating charge
Analysis of finance (cost)/income
Expected return on pension scheme assets
Interest cost on pension scheme liabilities
Net finance (cost)/income
Amounts recognised in respect of these defined benefit schemes are as follows:
Analysis of amount recognised in the
Consolidated Statement of Comprehensive Income
Actual return less expected return on scheme assets
Experience gain/(loss)
Change in actuarial assumptions
Limit on recognition of assets in accordance with IAS 19
Actuarial loss
Movement in deficit during the year
Deficit in Scheme at beginning of the year
Current service cost
Contributions
Other net finance income
Actuarial loss
Deficit in Scheme at end of the year
2009
5.8% p.a.
6.7% p.a.
3.4% p.a.
3.7% p.a.
3.4% p.a.
n/a
2008
6.0% p.a.
6.4% p.a.
3.1% p.a.
3.0% p.a.
3.0% p.a.
n/a
2009
£m
(1.0)
(1.0)
2.5
(3.7)
(1.2)
2009
£m
6.8
0.5
(8.8)
–
(1.5)
(10.3)
(1.0)
2.7
(1.2)
(1.5)
(11.3)
2008
£m
(1.3)
(1.3)
4.2
(3.9)
0.3
2008
£m
(11.2)
(0.1)
7.6
0.1
(3.6)
(8.4)
(1.3)
2.7
0.3
(3.6)
(10.3)
Informa plc Annual Report & Financial Statements for the year ended 31 December 2009
119
Financial statements
notes to the consoLIdAted FInAncIAL stAtements
For the year ended 31 December 2009 continued
36 retirement benefit schemes continued
The amounts recognised in the Consolidated Statement of Financial Position in respect of the Group Schemes are as follows:
Present value of defined benefit obligations
Fair value of Scheme assets
Deficit in Scheme and liability recognised in the Consolidated Statement of Financial Position
Changes in the present value of defined benefit obligations are as follows:
Opening defined benefit obligation
Service cost
Interest cost
Contributions from Scheme members net of benefits paid
Actuarial gains and losses
Closing defined benefit obligation
Changes in the fair value of Scheme assets are as follows:
Opening fair value of Scheme assets
Expected return on Scheme assets
Actuarial gains and losses
Contributions from the sponsoring companies
Contributions from Scheme members net of benefits paid
Closing fair value of Scheme assets
2009
£m
(74.7)
63.4
(11.3)
2009
£m
(63.0)
(1.0)
(3.7)
1.3
(8.3)
(74.7)
2009
£m
52.7
2.5
6.8
2.7
(1.3)
63.4
2008
£m
(63.0)
52.7
(10.3)
2008
£m
(66.1)
(1.3)
(3.9)
0.8
7.5
(63.0)
2008
£m
57.7
4.2
(11.2)
2.8
(0.8)
52.7
120
Informa plc Annual Report & Financial Statements for the year ended 31 December 2009
The assets of the Taylor & Francis Group Pension and Life Assurance Scheme are held in managed funds and cash funds operated by
Zurich Assurance Ltd and Legal & General. The assets of the Informa Final Salary Scheme are held in managed funds and cash funds
operated by Skandia Investment Management. The assets of the Achieve Learning (UK) Pension and Benefits Plan are managed by
Schroder Investment Management Ltd. The fair value of the assets held and the expected rates of return assumed are as follows:
Expected rate
of return year
commencing
31 December 2009
%
Fair value at
31 December 2009
£m
Expected rate
of return year
commencing
31 December 2008
%
Fair value at
31 December 2008
£m
Equities
Achieve Learning
Taylor & Francis
Informa
Bonds
Achieve Learning
Taylor & Francis
Informa
Cash
Achieve Learning
Taylor & Francis
Informa
Property
Achieve Learning
Taylor & Francis
Informa
7.75
7.75
7.75
5.7
5.3
4.8
0.5
0.5
0.5
7.75
7.75
7.75
3.7
7.4
26.6
0.7
4.1
5.2
0.6
1.8
11.7
–
0.9
0.7
63.4
7.0
7.0
7.0
5.4
5.6
3.8
2.0
2.0
2.0
7.0
7.0
7.0
3.1
5.6
15.4
0.8
3.6
1.2
0.3
1.6
20.3
–
0.8
–
52.7
The expected return on assets assumptions are derived by considering the expected long-term rates of return on plan investments.
The overall rate of return is a weighted average rate of return of each asset class. The long-term rates of return on equities and property
are derived from considering current long-term fixed interest government bond rates with the addition of an appropriate future risk
premium. The long-term rates of return on bonds and cash investments are set in line with market yields currently available.
The Schemes’ assets do not include any of the Group’s own financial instruments, nor any property occupied by, or other assets used
by, the Group.
Informa plc Annual Report & Financial Statements for the year ended 31 December 2009
121
Financial statements
notes to the consoLIdAted FInAncIAL stAtements
For the year ended 31 December 2009 continued
36 retirement benefit schemes continued
The history of the Group Schemes for the current and prior years is as follows:
Present value of defined benefit obligations
Fair value of Scheme assets
Deficit in the Scheme and liability recognised in
Consolidated Statement of Financial Position
Related deferred tax assets
Deficit net of deferred tax assets
Experience adjustments on Scheme liabilities:
Amount (£m)
Percentage of Scheme liabilities (%)
Experience adjustments on Scheme assets:
Amount (£m)
Percentage of Scheme assets (%)
2009
£m
(74.7)
63.4
(11.3)
3.1
(8.2)
0.5
0.7
6.8
10.7
2008
£m
(63.0)
52.7
(10.3)
2.8
(7.5)
(0.1)
(0.2)
(11.2)
(21.2)
2007
£m
(66.1)
57.7
(8.4)
2.4
(6.0)
0.5
0.7
(1.9)
(3.0)
2006
£m
(65.6)
54.4
(11.2)
3.4
(7.8)
0.6
1.0
1.7
3.0
2005
£m
(66.7)
49.0
(17.7)
5.3
(12.4)
0.3
0.4
6.5
13.3
Following the completion of the triennial valuations of the main defined benefit schemes, a revised deficit funding plan has been
agreed with the trustees to eliminate the deficits in the three schemes. The contributions for the ongoing service cost is estimated to
increase from £1.0m in 2009 to £1.4m in 2010. In addition, the contributions paid towards reducing the scheme deficits will increase
from £1.7m in 2009 to £2.4m in 2010 and £3.5m in 2011 when the next triennial valuation will be available.
37 share-based payments
The Group share options and Long-Term Incentive Plans (LTIPs) provide for a grant price equal to the average quoted market price of the
Groups shares on the date of grant. The vesting period is generally 3 years. The options expire if they remain unexercised after the exercise
period has lapsed. Furthermore, options are forfeited if the employee leaves the Group before the options vest. The options are equity-settled.
The Group recognised total expenses of £0.6m (2008: £0.5m) related to equity-settled share-based payment transactions in the year
ended 31 December 2009.
Share options
The number and weighted average exercise prices of share options are as follows:
Outstanding at the beginning of the year
Adjustment for rights issue
Forfeited/lapsed during the year
Exercised during the year
Outstanding at the end of the year
Exercisable at the end of the year
2009
2008
Weighted
average
exercise
price (p)
452.81
311.31
422.36
209.75
392.71
Weighted
average
exercise
price (p)
390.61
–
512.17
155.86
452.81
Options
3,377,811
–
(361,699)
(770,962)
2,245,150
2,245,150
Options
2,245,150
251,555
(454,788)
(106,486)
1,935,431
1,935,431
The weighted average share price at the date of exercise for share options exercised during the year was 209.75p (2008: 155.86p).
The options outstanding at 31 December 2009 had a weighted average remaining contractual life of 0.88 years (2008: 1.74 years)
and exercise prices ranging from 191.09p to 619.68p (Note 25).
122
Informa plc Annual Report & Financial Statements for the year ended 31 December 2009
Opening balance
LTIPs vested in the year
LTIPs lapsed in the year
LTIPs granted in the year
Adjustment for rights issue
Closing balance
Long-Term Incentive Plan
Date of grant
29 March 20061
25 April 20071
25 April 20071
9 April 20081
4 September 20081
4 August 20091
Inputs used to calculate those fair values and the method of calculation are set out in the following tables:
Expected
volatility
Expected
life (years)
Risk
free rate
Dividend
yield
Date of grant
4 March 20041
22 March 2004/10 May 2004
(Executive)1
Estimated
fair value
£1.18
£1.08
Share
price
£3.76
£3.49
Exercise
price
£3.73
£3.41
(adjusted)*
32.33%
32.77%
22 March 2004/10 May 2004
(Employee)1
15 September 20041
1 Valued using the Binomial model of valuation.
* Adjusted for the business combination in 2004 of Taylor & Francis Group plc and Informa Group plc, and in 2005 for a rights issue.
£3.41
(adjusted)*
30.59%
32.77%
£0.93
£1.16
£3.71
£3.70
£3.49
Long-Term Incentive Plan
The movement during the year is as follows:
5.00
4.87
3.50
5.00
4.76%
4.62%
2.00%
2.00%
4.21%
2.00%
4.95%
2.00%
2009
Shares
2008
Shares
2,280,038
2,047,774
(117,082)
(923,144)
(110,848)
(315,523)
1,965,434
1,470,931
387,192
–
4,404,734
2,280,038
Estimated
fair value
£3.32
£3.41
£3.37
£1.56
£3.09
£1.713
£1.793
Share
price
£4.70
£5.85
£5.85
£3.42
£4.15
£2.60
Exercise
price
Expected
volatility
Expected
life2 (years)
Risk
free rate
Dividend
yield
n/a
n/a
£0.10
n/a
n/a
n/a
25.00%
21.20%
21.20%
28.20%
33.50%
54.10%
3.00
3.00
3.00
3.00
3.00
3.00
n/a
n/a
5.47%
4.03%
4.38%
2.48%
1.85%
2.09%
2.09%
4.94%
4.20%
2.81%
1 Valued using the Monte Carlo Simulation method of valuation.
2 From 1 January of year in which grant made.
3 50% split of total awards granted.
In order to satisfy the share awards granted under Long-Term Incentive Plans, the share capital would be increased by up to 4,215,684
shares. The company is planning to issue additional share capital to satisfy the awards although if circumstances change it may
instead buy the shares as needed on the open market.
Expected volatility was determined by calculating the historical volatility of the Group’s share price over one, two and three years
back from the date of grant. The expected life used in the model has been adjusted, based on management’s best estimate, for the
effects of non-transferability, exercise restrictions, and behavioural considerations.
On 4 August 2009 the number of shares granted for the Long-Term Incentive Plan scheme was 1,965,440 with no exercise cost.
During the year, the 2006 LTIPs vested.
A complete listing of all options outstanding as at 31 December 2009 is included in Note 25.
38 events after the reporting date
There have been no significant events since the reporting date.
Informa plc Annual Report & Financial Statements for the year ended 31 December 2009
123
Financial statements
Independent AudItors’ report
to the Members of Informa plc
We have audited the parent company financial statements
(the financial statements) of Informa plc for the period from
11 March 2009 to 31 December 2009 which comprise the
company balance sheet and the related Notes 1 to 9. These
financial statements have been prepared under the accounting
policies set out therein.
We have reported separately on the Group financial statements
of Informa plc for the year ended 31 December 2009.
This report is made solely to the Company’s members, as a body,
in accordance with Article 110 of the Companies (Jersey) Law
1991. Our audit work has been undertaken so that we might
state to the Company’s members those matters we are required
to state to them in an auditors’ report and for no other purpose.
To the fullest extent permitted by law, we do not accept or
assume responsibility to anyone other than the Company and
the Company’s members as a body, for our audit work, for this
report, or for the opinions we have formed.
respective responsibilities of directors and auditors
The Directors' responsibilities for preparing the parent company
financial statements in accordance with applicable law and
United Kingdom Accounting Standards (United Kingdom
Generally Accepted Accounting Practice) are set out in the
Statement of Directors' Responsibilities.
Our responsibility is to audit the financial statements in
accordance with relevant legal and regulatory requirements and
International Standards on Auditing (UK and Ireland).
We report to you our opinion as to whether the financial
statements give a true and fair view and are properly prepared
in accordance with the Companies (Jersey) Law 1991. We also
report to you if, in our opinion, the Directors' Report is not
consistent with the financial statements, if the Company has not
kept proper accounting records or if we have not received all the
information and explanations we require for our audit.
We read the other information contained in the Annual Report
as described in the contents section and consider whether
it is consistent with the audited parent company financial
statements. We consider the implications for our report if we
become aware of any apparent misstatements or material
inconsistencies with the parent company financial statements.
Our responsibilities do not extend to any further information
outside the Annual Report.
124
Informa plc Annual Report & Financial Statements for the year ended 31 December 2009
Basis of audit opinion
We conducted our audit in accordance with International
Standards on Auditing (UK and Ireland) issued by the Auditing
Practices Board. An audit includes examination, on a test
basis, of evidence relevant to the amounts and disclosures in
the parent company financial statements. It also includes an
assessment of the significant estimates and judgments made
by the directors in the preparation of the parent company
financial statements, and of whether the accounting policies
are appropriate to the company's circumstances, consistently
applied and adequately disclosed.
We planned and performed our audit so as to obtain all the
information and explanations which we considered necessary
in order to provide us with sufficient evidence to give
reasonable assurance that the financial statements are free
from material misstatement, whether caused by fraud or other
irregularity or error. In forming our opinion we also evaluated
the overall adequacy of the presentation of information in the
financial statements.
opinion
In our opinion:
•
•
the parent company financial statements give a true
and fair view, in accordance with United Kingdom
Generally Accepted Accounting Practice, of the state
of the company’s affairs as at 31 December 2009; and
the parent company financial statements
have been properly prepared in accordance
with the Companies (Jersey) Law 1991.
deloitte LLp
Chartered Accountants and Statutory Auditors
London, United Kingdom
2 March 2010
compAny BALAnce sheet
As at 31 December 2009
Fixed assets
Investment in subsidiary undertakings
Current assets
Debtors due within one year
Cash at bank and in hand
Creditors: amounts falling due within one year
Net current liabilities
Net assets
Capital and reserves
Called up share capital
Share premium account
Reserve for shares to be issued
ESOP Trust shares
Profit and loss account
Equity shareholders’ funds
Notes
3
4
5
6
7
7
7
7
7
2009
£m
2,000.5
9.2
0.4
9.6
(9.6)
–
2,000.5
0.6
0.2
0.5
(0.4)
1,999.6
2,000.5
These financial statements were approved by the Board of Directors on 2 March 2010 and were signed on its behalf by:
peter rigby
Chief Executive
Adam Walker
Finance Director
Informa plc Annual Report & Financial Statements for the year ended 31 December 2009
125
Financial statements
notes to the compAny FInAncIAL stAtements
For the year ended 31 December 2009
1 corporate information
Informa plc (the Company) was incorporated under Jersey Company Law on 11 March 2009, as a public company limited by shares
with the name Informa Limited and changed its name on 29 April 2009 to Informa plc. The principal legislation under which the
Company operates is the Companies (Jersey) Law 1991 and regulations made thereunder, although the Company is domiciled in
Switzerland and therefore operates under Swiss tax laws.
Principal activity and business review
Informa Plc is the parent company of the Informa Group (the Group) and its principal activity is to act as the ultimate holding
company of the Informa Group.
On 30 June 2009 under a Scheme of Arrangement between the former holding company of the Group (Old Informa), and its
shareholders under Part 26 of the Companies Act 2006, and as sanctioned by the High Court, Informa plc became the holding
company of Old Informa. All the issued shares in Old Informa were cancelled and the same number of new shares of 595,339,255,
each with a nominal value of 27p, were issued by Informa plc. On 21 July 2009, the Jersey Court approved the reduction of capital –
refer to Note 6.
The shares of the Company are listed on the London Stock Exchange and trading in these shares commenced on 30 June 2009.
2 Accounting policies
Basis of accounting
The Company’s financial statements have been prepared on a going concern basis (for further analysis – refer to Corporate
Governance Statement on page 38) and under the historical cost convention and in accordance with the Companies (Jersey) Law
1991 and United Kingdom Generally Accepted Accounting Practice (UK GAAP).
The Company’s financial statements cover the period from incorporation on 11 March 2009 to 31 December 2009 and hence, no
comparative information is presented. They are presented in pounds sterling being the Company’s functional currency.
The Directors’ Report, Corporate Governance Statement and Directors’ Remuneration Report disclosures have been made in the
Group Annual Report of Informa plc.
Profit and loss account
Pursuant to Article 104 of the Companies (Jersey) Law 1991, the Company’s revenue for the period is £nil, loss before tax for the
period is £6.6m and loss after tax and retained loss for the period is £6.6m.
Cash flow statement
The Company’s results for the period ended 31 December 2009 are included in the consolidated financial statements of
Informa plc, which are publicly available. Consequently, the Company has taken advantage of the exemption from preparing a
cash flow statement under the terms of FRS 1 (Revised 1996) Cash Flow Statements.
Related party transactions
The Company has taken advantage of the exemption in FRS 8 Related Party Disclosures, that transactions with wholly owned
subsidiaries, do not need to be disclosed.
Financial instruments
The Informa plc consolidated financial statements contain financial instrument disclosures required by IFRS 7 Financial Instruments:
Disclosures and these would also comply with the disclosures required by FRS 29 Financial Instruments: Disclosures. Accordingly, the
Company has taken advantage of the exemptions provided in paragraph 2D of FRS 29 not to present separate financial instrument
disclosures for the Company.
126
Informa plc Annual Report & Financial Statements for the year ended 31 December 2009
Investments in subsidiaries
Investments held as fixed assets are stated at cost less any provision for impairment. Where the recoverable amount of the
investment is less than the carrying amount, an impairment is recognised.
ESOP Trust shares
Own shares deducted in arriving at shareholders’ funds represent the cost of the Company’s ordinary shares acquired by the
Employee Share Option Plan (ESOP) trusts in connection within certain of the Company’s employee share schemes.
Cash and cash equivalents
Cash and cash equivalents comprise cash on hand and demand deposits, and other short-term highly liquid investments that are
readily convertible (with a maturity of three months or less) to a known amount of cash and are subject to an insignificant risk of
changes in value.
Share-based payments
The Company issues equity settled share-based payments to certain employees. A fair value for the equity settled share awards is
measured at the date of grant. The fair value is measured using the Binomial or Monte Carlo model of valuation, which are considered
to be the most appropriate valuation techniques. The valuation takes into account factors such as non-transferability, exercise
restrictions and behavioural considerations. To assign a fair value to share awards granted under the Share Matching Plan where the
proportion of the award released is dependent on the level of total shareholder return, the Monte Carlo Simulation methodology is
considered the most appropriate.
In terms of FRS 20 Share-based payment, where a parent grants rights to its equity instruments of a subsidiary, and such share-based
compensation is accounted for as equity-settled in the consolidated financial statements of the parent, the subsidiary is required
to record an expense for such compensation, with a corresponding increase recognised in equity as a contribution from the parent.
Consequently, in accordance with UITF 44 FRS 20 (IFRS 2) – Group and Treasury Transactions the Company has recognised an addition
to fixed asset investments of the aggregate amount of these contributions that have accrued in the period after the Company
became the ultimate holding company of the Group of £0.5m with a corresponding credit to equity shareholders’ funds.
Foreign currencies
Foreign currency transactions arising from operating activities are translated from local currency into pounds sterling at the
exchange rates prevailing at the date of the transaction. Monetary assets and liabilities denominated in foreign currencies at the
year-end are translated at the period end exchange rate. Foreign currency gains or losses are credited or charged to the Profit and
Loss account as they arise.
Interest income
Interest income is accrued on a time basis, by reference to the principal outstanding and at the effective interest rate applicable,
which is the rate that exactly discounts estimated future cash receipts through the expected life of the financial asset to that asset’s
net carrying amount.
Interest expense
Finance costs of debts are capitalised against the debt value on first drawdown of the debt and are recognised in the Profit and Loss
account at a constant rate over the life of the debt.
Informa plc Annual Report & Financial Statements for the year ended 31 December 2009
127
Financial statements
notes to the compAny FInAncIAL stAtements
For the year ended 31 December 2009 continued
3 Investment in subsidiary undertakings
On incorporation
Scheme of Arrangement
Additions
Disposals
At 31 December 2009
2009
£m
–
2,000.0
2,000.4
(1,999.9)
2,000.5
Following the Scheme of Arrangement on 30 June 2009, Informa plc became the holding company of Old Informa (now named
Informa Group plc). Informa plc recorded the cost of the investment in Old Informa at its fair value at this date of £2,000.0m.
Other transactions since the date of incorporation include:
On 3 July 2009, Informa plc acquired 55.2% of IIH Limited at a market value of £438.1m, and re-assigned Old Informa to Informa
Group Holdings Limited for an issue of share capital of £50,000 and a loan receivable of £1,999,950,000.
On 30 July 2009, Informa plc subscribed for £15.3m members interests in Informa IP LLC; subscribed for 12,250 shares in IIR Hungary
Limited for a total consideration of £117.5m; and acquired Informa Finance GmbH for £827.6m.
On 31 July 2009, Informa plc subscribed for a further £81.8m members interests in Informa IP LLC and £519.6m of the loan receivable
was capitalised with a further issue of share capital by Informa Group Holdings Limited.
The remaining addition of £0.5m comprises the fair value of the share incentives issued to employees of subsidiary undertakings
during the period, in accordance with UITF 44 FRS 20 (IFRS 2) – Group and Treasury Transactions.
The listing below shows the subsidiary undertakings as at 31 December 2009 which affected the profits or net assets of the Company:
Company
Country of registration and operation
Principal activity
Ordinary
shares held
Informa Group Holdings Limited
England and Wales
Informa International Holdings Limited
IIR Hungary Limited
Informa IP LLC
Informa Finance GmbH
Informa IP GmbH
Bermuda
Bermuda
USA
Switzerland
Switzerland
Holding company
Holding company
Trading
Royalty and licences
Finance
Royalty and licences
The proportion of voting power held is the same as the proportion of ownership interest.
4 debtors due within one year
Amounts owed from group undertakings
Other debtors
100%
55%
55%
100%
100%
100%
2009
£m
9.0
0.2
9.2
128
Informa plc Annual Report & Financial Statements for the year ended 31 December 2009
5 creditors: amounts falling due within one year
Amounts owed to group undertakings
Amounts owed to group undertakings falling due within one year are unsecured, interest free and repayable on demand.
6 share capital
Authorised
202,500,000,000 ordinary shares of 0.1p each
Issued and fully paid
599,239,331 ordinary shares of 0.1p each
Initial issue at 21 April 2009 – 2 shares at 27p each
Scheme of Arrangement
Repurchase of initial subscriber shares
Issued in respect of share option schemes and other entitlements
Capital reduction from 27p to 0.1p
Options exercised
At 31 December
Number of
shares
2
595,339,255
(2)
3,800,000
–
100,076
599,239,331
2009
£m
9.6
2009
£m
202.5
2009
£m
0.6
2009
£m
–
160.7
–
–
(160.1)
–
0.6
Significant movements in called up share capital
Scheme of Arrangement
On 30 June 2009 under a Scheme of Arrangement between Old Informa, the former holding company of the Group, and its
shareholders under Part 26 of the Companies Act 2006, and as sanctioned by the High Court, Informa plc became the holding
company of Old Informa. All the issued shares in Old Informa were cancelled and the same number of new shares of 595,339,255,
each with a nominal value of 27p, were issued by Informa plc.
Capital reduction
On 21 July 2009, the Jersey Court approved the reduction of capital of Informa plc, whereby the nominal value of each ordinary share
was reduced from 27p to 0.1p and the balance of the share premium account was transferred to the profit and loss account. The
effect of the reduction of capital was to reduce share capital by £160.1m, reduce share premium by £1,839.3m and increase the profit
and loss account by £1,999.4m.
Informa plc Annual Report & Financial Statements for the year ended 31 December 2009
129
Financial statements
notes to the compAny FInAncIAL stAtements
For the year ended 31 December 2009 continued
7 capital and reserves
Issue of shares under Scheme of Arrangement
Capital reduction (Note 6)
Options exercised
Acquisition of ESOP Trust1
Share-based payment charge
Own shares sold
Loss for the period
Dividend paid
At 31 December 2009
1 On 30 June 2009 the ESOP Trust was acquired from Old Informa.
Share
capital
£m
160.7
(160.1)
–
–
–
–
–
–
1,839.3
(1,839.3)
0.2
–
–
–
–
–
0.6
0.2
Share
premium
account
£m
Reserve for
shares to
be issued
£m
ESOP
Trust
shares
£m
Profit
and loss
account
£m
Total
£m
–
–
–
–
0.5
–
–
–
0.5
–
–
–
(0.4)
–
–
–
–
–
2,000.0
1,999.4
–
–
–
9.6
(6.6)
(2.8)
–
0.2
(0.4)
0.5
9.6
(6.6)
(2.8)
(0.4)
1,999.6
2,000.5
As at 31 December 2009 the Informa Employee Share Trust held 189,050 (2008: 93,269) ordinary shares in the Company at a cost of
£0.4m (2008: £0.4m) and a market value of £0.6m (2008: £0.2m). 71,628 shares (2008: Nil) held by the Employee Share Trust have not
been allocated to individuals and accordingly, dividends on these shares are waived. The remaining 117,422 shares (2008: 93,269)
held by the Employee Share Trust have been allocated to an individual and accordingly, dividends on these shares are payable.
During the period from incorporation, 11 March 2009 to 31 December 2009, equity dividends of £2.8m were paid by the Company to
those shareholders who did not elect to receive dividends under the Dividend Access Plan (DAP) arrangements. In total, dividends of
£21.6m were paid in the period of which £18.8m were paid by Informa DAP Limited under the DAP arrangements. Further details of
the DAP arrangements are given in Note 13 to the Group financial statements.
8 share-based payments
Details of the share-based payments are disclosed in the Group financial statements (Note 37).
9 post balance sheet events
There have been no significant events since the reporting date.
130
Informa plc Annual Report & Financial Statements for the year ended 31 December 2009
FIve yeAr summAry
Five year summary
Results
Revenue
Adjusted operating profit
Statutory operating profit
Statutory profit before tax
Profit attributable to equity holders of Informa plc
Assets employed
Non-current assets
Current assets
Non-current assets classified as held for sale
Current liabilities
Non-current liabilities
Net assets
Financed by
Equity
Minority interest
Key statistics (in pence)
Earnings per share
Diluted earnings per share
Adjusted earnings per share
Adjusted diluted earnings per share
2009
£m
2008
£m
2007
£m
2006
£m
1,221.7
1,278.0
1,129.1
1,039.1
309.5
145.7
96.5
105.6
305.8
164.6
109.0
84.9
261.0
154.0
124.4
99.2
219.1
128.3
86.5
67.4
2005
£m
729.3
147.3
91.4
61.0
8.8
2,767.6
2,096.2
2,105.4
2,859.1
279.6
–
3,123.5
337.7
–
303.9
2.2
(656.6)
(795.3)
(591.3)
(1,152.6)
(1,592.9)
(1,553.9)
1,329.5
1,073.0
928.5
1,328.6
1,071.8
0.9
1.2
1,329.5
1,073.0
18.84
18.83
34.27
34.27
16.801
16.791
33.941
33.921
927.9
0.6
928.5
19.691
19.621
29.961
29.851
286.4
2.2
(527.3)
(925.5)
932.0
931.4
0.6
932.0
13.441
13.381
26.271
26.161
239.5
4.6
(466.1)
(957.4)
926.0
925.9
0.1
926.0
1.911
1.911
18.741
18.641
1 Restated to reflect the bonus element of the rights issue. Details of the rights issue are provided in Note 1 of the Group financial statements.
Informa plc Annual Report & Financial Statements for the year ended 31 December 2009
131
Company Information
In thIs sectIon:
Legal Notices
Shareholder Information
Principal Group Offices
A Selection of Informa Group Websites
133
134
136
137
132
Informa plc Annual Report & Financial Statements for the year ended 31 December 2009
Informa plc Annual Report & Financial Statements for the year ended 31 December 2009
LegAL notIces
notice concerning Forward-Looking statements
This Annual Report contains forward-looking statements. These statements are subject to a number of risk and uncertainties
and actual results and events could differ materially from those currently being anticipated as reflected in such forward-
looking statements. The terms ‘expect’, ‘should be’, ‘will be’ and similar expressions identify forward-looking statements.
Factors which may cause future outcomes to differ from those foreseen in forward-looking statements include, but are not
limited to: general economic conditions and business conditions in Informa’s markets; exchange rate fluctuations, customers’
acceptance of its products and services; the actions of competitors; legislative, fiscal and regulatory developments; changes
in law and legal interpretation affecting Informa’s intellectual property rights and internet communications; and the impact
of technological change. These forward-looking statements speak only as of the date of publication of this Annual Report.
Except as required by any applicable law or regulation, the Group expressly disclaims any obligation or undertaking to release
publicly any updates or revisions to any forward-looking statements contained in this document to reflect any change in the
Group’s expectations or any change in events, conditions or circumstances on which any such statement is based.
The Group warns investors that a number of important factors, including those in this Annual Report, could cause actual
results to differ materially from those contained in any forward-looking statements. Such factors include, but are not limited
to, those discussed under ‘Risk and Uncertainties’ on pages 31 to 36 of this Annual Report.
Website
Informa’s website www.informa.com gives additional information on the Group. Information made available
on the website does not constitute part of this Annual Report.
Informa plc Annual Report & Financial Statements for the year ended 31 December 2009
133
company Information
shArehoLder InFormAtIon
registrars
Informa’s Registrar is Equiniti. The Shareholder Helpline
run by Equiniti is available between Monday and Friday,
8.30 am to 5.00 pm. The UK number to call is 0870 384
2381, if you are calling from outside the UK please call:
+44 121 415 7047. This helpline deals with various
share related queries.
They also offer a free online service which enables you to:
•
•
•
•
view and manage all of your shareholdings;
register for electronic communications;
buy and sell shares instantly online
with the dealing service; and
other shareholder services such as change of
address, transfer shares or replace a lost certificate.
Visit www.shareview.co.uk/myportfolio for further
information. You will need your shareholder reference
number as shown on your share certificate.
If you currently hold a Shareview Portfolio account which
was registered prior to the Register moving to Jersey in
June 2009 you will need to re-register under the new
web-address. You can register quickly and easily by going
to www.shareview.co.uk/myportfolio and clicking on the
‘Open a FREE portfolio’ button in the middle of the home
page. You’ll be asked for the following information:
•
•
•
•
•
•
the company in which you hold shares
or loan notes managed by Equiniti;
your last name as it appears on a recent
share certificate or tax voucher;
shareholder reference;
your postcode;
your current email address; and
you will also be asked for your preferred method
of communication (i.e. electronic or hard
copy) – please choose the hard copy option.
You will then be asked to create a password. This needs
to be a mixture of 4-8 alphanumeric characters that you
alone will be able to remember (e.g. pa55w0rd).
Once you have read the terms and conditions click
the ‘Go’ button to send the Access Number to your
registered address.
Your new Access Number will arrive by post a few
days later. You will then have all you need to log into
your new Portfolio.
global payments service
This service provided by Informa’s Registrar enables
shareholders to have dividend payments paid directly
into their bank account in their chosen local currency.
To view terms and register for this service, please visit
www.shareview.co.uk/myportfolio.
dividend
Informa pays a dividend to all shareholders twice each
year. Informa operates a Dividend Access Plan for all
its shareholders. Those shareholders who hold fewer
than 100,000 shares are deemed to consent to receive
their dividends from a UK Informa company. However
those shareholders holding over 100,000 shares need
to elect to join the Dividend Access Plan by completing
an Election Form. This form is available from Informa’s
Registrars by calling 0871 384 2381. If you are calling
from outside the UK please call: +44 121 415 7047. If you
hold over 100,000 shares and do not elect to join the
Dividend Access Plan, you will receive your dividends
from Informa’s Swiss holding company.
Alternatively, shareholders can elect to receive shares
instead of cash from their dividend allocation through
the Dividend Reinvestment Plan (DRIP)
Shareholders can also arrange for dividends to be paid
by mandate directly to a UK bank or building society
account through the BACSTEL-IP (Bankers’ Automated
Clearing Services) system. For the benefit of shareholders
resident in any of the eurozone countries, the Company
offers the option to receive dividends in Euros.
share dealing
If shareholders wish to buy or sell any Informa shares,
they can do so by calling the Company’s Brokers, Natwest
Stockbrokers, on 0808 208 4433. Instructions on how
to deal will be provided over the phone. The helpline
is open 8.00 am to 4.30 pm UK time, Monday to Friday,
except Bank Holidays.
134
Informa plc Annual Report & Financial Statements for the year ended 31 December 2009
crest electronic proxy voting
If you receive any unsolicited investment advice:
•
•
•
•
make sure you get the correct name
of the person and organisation;
check that they are properly authorised
by the FSA before getting involved. You
can check at www.fsa.gov.uk/register;
report the matter to the FSA either
by calling 0845 606 1234; and
inform our Registrar’s on 0871 384 2381
tips on protecting your shareholding
•
•
•
•
•
Ensure all your certificates are kept
in a safe place or hold your shares
electronically in CREST via a nominee.
Keep all correspondence from the Registrars in a safe
place, or destroy correspondence by shredding it.
If you change address inform the Registrars.
If you receive a letter from the Registrars
regarding a change of address and you have not
recently moved, contact them immediately.
Know when the dividends are paid and consider
having your dividend paid directly into your
bank (contact the Registrars). If you change
your bank account, inform the Registrars of the
details of your new account. Respond to any
letters the Registrars send to you about this.
If you are buying or selling shares, only
deal with brokers registered in the UK
or in your country of residence.
The Company will be accepting proxy votes through the
CREST Electronic Proxy Voting system.
sharegift
ShareGift (Registered Charity no. 1052686) is an
independent charity which specialises in accepting
donations of small numbers of shares which are
uneconomic to sell on their own. ShareGift is particularly
designed to accept unwanted shares and uses the
ultimate proceeds to support a wide range of UK
charities. Over £11m has been given by ShareGift so far
to over 1,400 different UK charities. Further information
about ShareGift can be found on their website,
www.ShareGift.org or by contacting 020 7930 3737.
electronic shareholder communication
As part of Informa’s Corporate Social Responsibility
programme and in particular our ongoing commitment
to reduce our environmental impact, we offer all
shareholders the opportunity to elect to register for
electronic communications. For further information
please visit www.informa.com
protecting your Investment from
share register Fraud
Informa plc is legally obliged to make its share register
available to the general public. Consequently some
shareholders may receive unsolicited mail, including
correspondence from unauthorised investment companies.
Over the last year a number of companies have become
aware that their shareholders have received unsolicited
phone calls or correspondence concerning investment
matters. These are typically from overseas based brokers
who target UK shareholders offering to sell what often
turn out to be worthless or high risk shares in US or UK
investments. They can be extremely persuasive and very
persistent. Shareholders are advised to be very wary of
any unsolicited advice, offers to buy shares at a discount
or offers of free company reports.
Informa plc Annual Report & Financial Statements for the year ended 31 December 2009
135
company Information
prIncIpAL group oFFIces
Argentina
Australia
Austria
Bahrain
Belgium
Brazil
Canada
Chile
China
Czech Republic
Denmark
Finland
Germany
Greece
Hong Kong
Hungary
India
Indonesia
Ireland
Italy
Japan
Korea
Kuwait
Malaysia
Mexico
Monaco
New Zealand
Nigeria
Norway
Philippines
Portugal
Russia
Saudi Arabia
Singapore
South Africa
Spain
Sweden
Switzerland
Taiwan
Thailand
The Netherlands
United Arab Emirates
United Kingdom
United States of America
Vietnam
136
Informa plc Annual Report & Financial Statements for the year ended 31 December 2009
Informa at a glance
OuR VAlues
INNOvATIvE
NON-BuREAuCRATIC
FOR PROFIT
OPEN
REWARDING
MARkET-FOCuSED
ABOuT QuALITY
a selection of our key brands
Lloyd’s is the registered trademark of the Society incorporated by the Lloyd’s Act 1871 by the name of Lloyd’s.
how we oPeraTe
a SeleCTIon oF InForma GrouP weBSITeS
+40
countries where
we operate
+2,100
subscription-based
information services
+55,000
book titles published
+8,000
events
+8,000
staff
The nature of our business
We link leading titles and events in many sectors so
that our content is the prime information source.
We have built the business as a 3-dimensional matrix
with vertical (niche) markets on one axis, geographies on
the second and media distribution formats on the third.
our business operates in three segments:
•
•
•
Academic Information
Professional & Commercial Information
Events & Training
target specific markets
expand geographically
extend media distribution
revenue by type
revenue by business segment
revenue by geography
7. 8.
1.
6.
5.
4.
3.
3.
1.
1.
4.
1.
2.
2.
2.
3.
Informa has been recognised for the second year
running as one of Britain’s Top 100 Employers,
according to research conducted by CRF in
conjunction with Guardian Books. Organisations
all over Britain were judged by a panel of experts
for their performance in career development,
training development, pay and benefits, working
conditions and company culture – Informa
received 5 out of 5 stars overall.
1. Delgates
2. Copy sales
3. Subscriptions
4. Exhibition
5. Sponsorship
6. Consulting
7. Advertising
8. Other
25%
16%
35%
7%
4%
6%
3%
4%
1. Academic Information
2. Professional &
Commercial Information
3. Events & Training
£294.4m
£368.3m
£559.0m
£168.1m
1. united kingdom
2. North America
£480.8m
3. Continental Europe £314.2m
£258.6m
4. Rest of World
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www.thesuperyachtcup.com
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www.tandf.co.uk/journals
www.taylorandfrancis.com
www.taylorandfrancisgroup.com
www.informaworld.com
www.achieveglobal.com
www.agra-net.com
www.ceasc.com
www.datamonitor.com
www.ebenchmarkers.com
www.esi-intl.com
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www.forum.com
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www.huthwaite.com
www.ibclifesciences.com
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www.iirusa.com
www.informaecon.com
www.informahealthcare.com
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www.insuranceday.com
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www.lloydslist.com
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www.omega-performance.com
www.orbys.com
www.ovumkc.com
www.r4l.info
www.robbinsgioia.com
www.scrip100.com
www.scripnews.com
www.theblackbookofoutsourcing.com
www.verdict.co.uk
www.abudhabiyachtshow.com
www.adamsmithconferences.com
www.arabhealthonline.com
www.cityscapeglobal.com
www.euroforum.de
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®® Annual Report & Financial Statements 2009
who we are
Business Profile
Our Business
Informa at a Glance
Academic Information
Professional & Commercial
Information
Events & Training
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B
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Global Business Information Specialist
Informa plc is a leading international provider of
specialist information and services for the academic
and scientific, professional and commercial business
communities. Informa has some 150 offices in over
40 countries and employs approximately 8,000 staff
around the world. Informa is the largest publicly-owned
organiser of conferences and courses in the world with
an output of around 8,000 events annually. Informa
publishes over 2,100 subscription-based information
services including academic journals, real-time news
and structured databases of commercial intelligence.
Informa’s book business has more than 55,000 academic
and business titles.
The Year in review
Financial Highlights
Chairman’s Statement
Chief Executive’s Review
Financial Review
Board of Directors
Advisers
Directors’ Report
Corporate Governance Statement
Directors’ Remuneration Report
Corporate Responsibility
12
13
14
16
19
24
26
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38
45
55
Gubelstrasse 11
CH-6300 Zug
Switzerland
Telephone: 00 41 41 444 1344
Fax: 00 41 41 444 1355
www.informa.com
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”It was an extremely demanding year,
but one which brought to the fore some
of the key characteristics of Informa.”
Derek Mapp, Chairman
See page 14
”During a period of sustained economic
decline across the world, our Publishing
assets have performed exceptionally well.”
Peter Rigby, Chief Executive
See page 16
”These financial results demonstrate the strength
of a balanced portfolio and an ability to manage
costs proactively when demand is reduced.“
Adam Walker, Finance Director
See page 19
61
Financial Statements
58
Independent Auditors’ Report – Group 59
Consolidated Income Statement
60
Consolidated Statement of
Comprehensive Income
Consolidated Statement of
Changes in Equity
Consolidated Statement of
Financial Position
Consolidated Cash Flow Statement
Notes to the Consolidated Financial
Statements
66
Independent Auditors’ Report – Company 124
Company Balance Sheet
125
Notes to the Company
Financial Statements
Five Year Summary
126
131
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65
62
Company Information
Legal Notices
Shareholder Information
Principal Group Offices
A Selection of Informa
Group Websites
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133
134
136
137
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