PageGroup Annual Report 2010

FY2010 Annual Report · PageGroup

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ANNUAL REPORT AND
ACCOUNTS 2010

In just thirty ﬁ ve years, Michael Page
International has grown to become one
of the world’s best-known and most
respected recruitment consultancies.
Today, we are proud to set the standard
within our profession for specialist
service, with a personal touch.

CONTENTS

1 Highlights
2 Overview
12 Business Review
13 Group strategy
14 Review of 2010
16 Regional review of 2010
27 Balance sheet
27 Cashﬂ ow
28 Key performance indicators

(“KPIs”)

28 Going concern
29 Foreign exchange
29 Treasury management and

currency risk
30 Principal risks and
uncertainties

31 Summary and outlook

Michael Page International

32 Board of Directors
34 Directors’ Report
42 Corporate Governance
48 Remuneration Report
57 Auditor’s Report
58 Financial Statements

59 Consolidated Income

Statement

59 Consolidated Statement of
Comprehensive Income

60 Consolidated and Parent
Company Balance Sheets

61 Consolidated Statement of

Changes in Equity

62 Statement of Changes in
Equity – Parent Company

63 Consolidated and Parent
Company Cash Flow
Statements

64 Notes to the Financial

Statements

89 Five Year Summary
90

Shareholder Information and
Advisers

98 Annual General Meeting
105 Cautionary Statement and
Statement of Directors’
responsibilities

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Michael Page International

32*

COUNTRIES

DISCIPLINES

148*

OFFICES

4,498

EMPLOYEES

Accounting, Actuarial, Tax & Treasury

Financial Services & Banking

Oil & Gas

Agency

Buying & Merchandising

Construction

Consultancy, Strategy & Change

Design

Education

Engineering & Manufacturing

Executive Search

Facilities Management

Health & Social Care

Hospitality & Leisure

Human Resources

Insurance

Legal

Life Sciences

Logistics

Marketing

Mining & Resources

Policy

Procurement & Supply Chain

Property

Public Sector

Retail Operations & Retail Banking

Sales

Secretarial

Technology

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HIGHLIGHTS
Strong results beneﬁ ting from
geographic and discipline
diversiﬁ cation

Revenue (£m)

Gross Proﬁ t (£m)

832.3

2010

716.7

2009

972.8

2008

831.6

2007

649.1

2006

442.2

2010

351.7

2009

552.7

2008

478.1

2007

348.8

2006

Proﬁ t Before Tax (£m)

Basic Earnings Per Share (pence)

100.7*

2010

21.1

2009

140.1

2008

147.4

97.0

2007

2006

21.6*

2010

3.9

30.3

31.1

19.6

2009

2008

2007

2006

Dividend Per Share (pence)

Headcount At Year End

9.0

8.0

6.0

2010

2009

2008

2007

2006

*Includes non-recurring items.

4,498

2010

3,549

2009

4,943

2008

5,052

3,758

2007

2006

Improved productivity

and utilisation of spare
capacity driving proﬁ t
growth

All regions growing

sequentially in 2010

72% of gross proﬁ ts
generated from outside
the UK

53% of gross proﬁ t

generated from non
Finance and Accounting
disciplines

Gross proﬁ t from
permanent placements
growing at 38%

Share repurchases of

£76.8m during 2010

Strong balance sheet
with net cash of £80.5m

Total dividend
increased by 12.5%
to 9.0p

Michael Page International

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+24%

GROWTH IN GROSS
PROFIT AND RAPID PROFIT
RECOVERY

+12.5%

INCREASE IN FULL YEAR
2010 DIVIDEND

+254%

GROWTH IN OPERATING
PROFIT BEFORE NRI*

+27%

GROWTH IN
HEADCOUNT

£100m

OF CASH PAID IN
DIVIDENDS AND SHARE
REPURCHASES

£80m

OF NET CASH
AT END OF 2010

*Non-recurring items

Michael Page International

BUSINESS PERFORMANCE IN 2010:
Recovery in our proﬁ ts, strong
cash position and continued
conﬁ dence in the future

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2010 was a year of recovery after the downturn that ﬁ rst hit in the second half of 2008 and negatively impacted Group gross proﬁ t

throughout 2009. The ﬁ rst increase in Group gross proﬁ t was seen in Q4 2009 and this trend continued throughout 2010, delivering

revenue up 15% in constant currency to £832m and gross proﬁ ts up 24% to £442m.

The recovery has been largely in permanent placements, where we have grown gross proﬁ t 35% in constant currency in the year. As a

result, the proportion of gross proﬁ t from permanent and temporary placements has increased from 71:29 in 2009 to 78:22 in 2010.

As we are a highly operationally geared business and maintained spare capacity following the downturn, the recovery in gross proﬁ ts

has dropped rapidly through to operating proﬁ ts, which increased 3.5 times to £71.5m.

With the beneﬁ t of the VAT refund of £17.1m and related interest of £11.3m, the proﬁ t before tax for the year was £100m. Excluding the

beneﬁ t of the VAT refund, earnings per share increased from 3.9p to 15.1p.

In terms of the cash we generate, the ﬁ rst use of our cash is always to support and grow the business. Our next priority is the dividend

to shareholders, where we aim to either grow or at least maintain the level of dividend payment. Given the recovery in our proﬁ ts, our

strong cash position and our conﬁ dence in the future, the Board are recommending an increase in the full year dividend for 2010 of

12.5% to 9.0p.

After dividends and while maintaining a strong balance sheet, we use surplus cash to repurchase shares. Repurchases made via the

employee beneﬁ t trust are either to cover share plan commitments or to reduce the dilution of share option awards. Alternatively, repurchases

are made by the company, following which the shares are cancelled.

During 2010, we spent £100m in dividends and share repurchases and still ended the year with a very strong balance sheet with net

cash in excess of £80m.

Michael Page International

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PROFILE OF OUR BUSINESS:
Geographical and discipline
diversiﬁ cation, the foundation
of our continued growth

GEOGRAPHIC DEVELOPMENT

With recruitment being driven by the economic cycle and overall business conﬁ dence, our strategy of diversiﬁ cation, both by geography

and discipline, aims to diversify the Group’s exposure away from any one geographic area or business sector.

During 2010, we achieved growth across all our geographic regions, with both the Americas and Asia Paciﬁ c having exceeded their

previous peaks. Within each region, different countries reacted in different degrees and timings as their economies and conﬁ dence

levels recovered. Being in 29 countries at the end of 2010 and now 32 with businesses opening in India, Malaysia and Chile, we now

have the beneﬁ t of being in many faster growing economies where outsourced recruitment is relatively new and still developing, it is also

where competition is limited. Today, the UK, which only 10 years ago was more than 50% of the Group is now 26%. Ten years ago the

Americas and Asia Paciﬁ c had barely registered; they are now 30% of the Group and growing fast.

Geographic diversiﬁ cation achieved by organic growth

Reduced dependence on individual geographic markets

*As at February 2011.

Michael Page International

COUNTRIES

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148*

OFFICES

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DISCIPLINE DEVELOPMENT

As we have beneﬁ ted from our geographical diversiﬁ cation we have also beneﬁ ted from our discipline diversiﬁ cation, as different disciplines

reacted in the recovery at different times and to different degrees. Finance and accounting remains our largest discipline, as it is the

heritage of the business and also the discipline we tend to start with when we enter new countries and cities. As we have diversiﬁ ed into

an increasing number of professional disciplines today, these now account for over half the Group’s gross proﬁ ts. As well as rolling out

our Michael Page disciplines, we continue to invest in Page Personnel, our business focussed on the more junior professional recruitment

markets. Page Personnel is now a global brand, across 19 countries with over a quarter of our fee earners.

At the end of February 2011, the Group had a total of 239 country discipline businesses, up 23 from the start of 2010. Even within

these many disciplines our teams are further specialised, with, for example, businesses such as Michael Page Oil & Gas launched within

Engineering and Michael Page Logistics within Supply Chain & Procurement.

Beneﬁ ting from discipline diversiﬁ cation

Discipline roll-out continues with increasing specialisation

PAGE PERSONNEL,
A GLOBAL BRAND,
NOW IN 19
COUNTRIES

Michael Page International

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A BUSINESS STRUCTURE FOR GROWTH:
Focus on expanding in faster
growing and less-developed
markets with limited competition

ORGANIC DEVELOPMENT OF THE BUSINESS

In order to grow rapidly you have to have the platform or foundations to support it. We believe we have that, with over 2,100 years of

Michael Page Director experience spread over 32 countries. This ensures we meet the needs of global or international clients and candidates

who have increased geographic mobility, with a consistent quality, culture and values worldwide. With a meritocratically, home-grown,

management team it creates a high level of trust, retains our entrepreneurs, as we are constantly launching new businesses, and makes

lines of communication clear and simple.

As we go through cycles, we protect the platforms and in downturns invest modestly, increasing the rate of upturns. Last year our

headcount grew by nearly 1000, as we grew existing ofﬁ ces and countries and launched one new one, Chile. In the ﬁ rst two months of

2011, headcount is up by a further 258 and we have opened in three new countries, Qatar, Malaysia and India.

Organic development of the business

Geographic and discipline diversiﬁ cation

Protecting and expanding the platform through economic cycles

Michael Page International

MORE THAN 40% OF FEE EARNERS
OPERATE IN LESS DEVELOPED,
HIGH GROWTH RECRUITMENT MARKETS

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POSITIONED FOR GROWTH

Our growth is organic, but strategically as well as growing existing business, our objective is to expand into less developed recruitment

markets where, as a result, competition is far more limited. Many of these markets are emerging economies and are growing far faster than

established ones, such as the UK. Only 10 years ago, 58% of our gross proﬁ t came from the most developed and competitive Australian

and UK markets, whereas only 9% was from the least developed and least competitive markets. Our ability to grow fastest is naturally

where markets have the potential to develop and where competition is weakest.

At the end of February 2011, we have 41%, or to be precise 1,345, of our fee earners in these “higher potential” markets and that ﬁ gure

is growing fast. Our track record of growth in this underdeveloped category is over 40% compound annual growth rate of gross proﬁ t.

In 2010, it was 46%.

Focus on expanding in faster growing and less-developed recruitment markets with limited competition

More than 40% of fee earners now in these markets

Michael Page International

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DEVELOPING LATIN AMERICA:
Market leading business
representing nearly 10% of
Group gross proﬁ t

In 10 years, we have organically grown a market leading business

All of this has, and continues to be, achievable because of the strength

across four countries, 14 ofﬁ ces, with a headcount of 448 that

and depth of our Michael Page management experience in the region.

represents nearly 10% of the Group’s gross proﬁ t. Last year, our

We have 150 years of Director experience, all of whom are home

headcount grew by 80% and in the ﬁ rst two months of 2011, typically

grown in our culture, methods and values and beneath them, an

a quiet time of the year with the carnival in Brazil, by 11%.

even larger and expanding management team.

Brazil, now our fourth largest country, has opened ﬁ ve new ofﬁ ces

This allows us to exploit these exciting opportunities in new countries

in the last six months and in the region we opened in a new country,

such as Chile and in opening ofﬁ ces like Recife, Barra, Porto Alegre

Chile in Santiago.

and São José Dos Campos in Brazil.

Brazil fourth largest business

in the Group

Building headcount on top
of a total of 150 Directors’ years
of Michael Page Latin America
experience

Platform providing numerous
opportunities for further growth in
the region

Michael Page International

DEVELOPING ASIA:
Strength of management to
succeed in high potential,
challenging markets

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In Asia we are now in ﬁ ve countries, 13 ofﬁ ces and 359 people,

potential, but challenging in many other ways, we have to have the

having grown in headcount by 100% last year and 17% in the ﬁ rst

strength and depth of management to succeed. This is why we are

two months of 2011.

Numerous opportunities exist to increase headcount, new cities,

disciplines and countries. We have only just opened for business in

India with two ofﬁ ces in Mumbai and New Delhi and in Malaysia with

an ofﬁ ce in Kuala Lumpur.

so conﬁ dent. We have 126 years of Michael Page Director experience

where these individuals have proved their ability at all levels in different

geographies. Beneath them, they have an even larger management

team who have also proved themselves at consultant level before.

It is on this structure we can, assuming economies remain favourable,

continue to build rapidly our headcount, ofﬁ ce network, revenues

In order to capitalise in these markets that are exciting with high

and proﬁ ts.

China largest and fastest

growing part of the region

Total of 126 Directors’ years
of Michael Page Asia experience

Singapore more than
doubled headcount in 2010

Opened India with over 30
years of Michael Page experience

Michael Page International

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EXPANDING OUR REACH:
Organic career moves enable
consistent model to be deployed
globally

We’ve always believed that the only way
to grow is organically and this airline style
map shows how our organic development
has moved Directors around the world,
the most recent highlighted.
with
In addition, many more managers and
consultants are transferred around in
a similar way, helping with their career
development and retention.

This movement of talent has continued
so that we could exploit new markets,
such as India, and where we needed to
strengthen management teams, such
as Holland. We believe this strength
and depth of Michael Page management
experience in each of the regions in
which we operate is the key factor that
has enabled us to achieve what we have
and it gives us the conﬁ dence that we
can achieve a lot more.

Michael Page International

CHILE

Michael Page launched its new
business in Santiago, Chile with
the Finance, Financial Services,
Marketing and Sales disciplines in January 2011 and is
the ﬁ rst specialised recruitment ﬁ rm in the market.

Chile is ranked as one of the safest offshore locations
in the world, with a world-class telecommunications
infrastructure and high uptake of higher-level education.
Having gauged and fulﬁ lled client requirements through
a team based elsewhere in the region, in late 2010
demand reached appropriate levels for Michael Page to
deploy a local presence to further service the growing
need for professional specialist recruitment.

Michael Page management

Roberto Machado joined Michael Page as a member
of the ﬁ rst team of ﬁ ve people who launched Michael
Page Brazil 11 years ago and while in Brazil launched
our ﬁ rst Michael Page Oil & Gas business. In 2007,
Roberto was promoted to Managing Director and moved
to Buenos Aires to launch Michael Page Argentina.
In December 2010, he moved to Santiago and launched
Michael Page Chile, and now runs both our Argentinean
and Chilean businesses. Roberto speaks Portuguese,
French, Spanish and English!

INDIA

Michael Page India was launched initially with the Finance
and Financial Services disciplines in January 2011 in both
Gurgaon in the capital, New Delhi, and also the commercial
capital and ﬁ nancial heart of the country, Mumbai.

Widely acknowledged as a strong, vibrant, fast-growing free market economy, India
will be a dominant player in the global market. Add to this the development of a
highly skilled workforce and it is ideal for Michael Page’s market proposition. However
only in 2010 did conditions align for Michael Page to launch our business in India –
a burgeoning local base of clients whose business we already successfully service
globally and the availability of the right management team.

Michael Page management

Tulika Tripathi joined Michael Page Switzerland as a consultant in 2004 and was
promoted to Director to run the Geneva ofﬁ ce. In 2008, Tulika moved to Singapore
as Managing Director of Michael Page Singapore and in January 2011 moved to
India to launch Michael Page India as Managing Director.

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MALAYSIA

Launched initially with the Finance
and Financial Services disciplines,
Michael Page Malaysia opened in
Kuala Lumpur in January 2011.

Malaysia boasts one of south-east Asia’s most vibrant
economies, the fruit of decades of industrial growth and
political stability. Previously managed by teams based in
Singapore, the growing number of global clients positioning
back ofﬁ ce functions into Malaysia, coupled with capable
Michael Page management being ready to deploy made it
the right time to launch.

Michael Page management

Paul Cooper joined Michael Page as a consultant in
Manchester 12 years ago, before moving to London as
a manager. Paul was promoted to Director to head the
Public Sector business in London and, in January 2011,
he moved to Kuala Lumpur to launch our Malaysian business
as Managing Director of Michael Page Malaysia.

QATAR

Michael Page Qatar opened in Doha with the Finance discipline in December 2010
and was our third ofﬁ ce in the region, after Dubai and Abu Dhabi.

Despite the global ﬁ nancial crisis, Qatar has prospered in the last several years -
in 2010 Qatar had the world’s highest growth rate, with oil and gas accounting for more than 50% of GDP.
Oil and gas have made Qatar the second highest per-capita income country. The close proximity of two other
Michael Page ofﬁ ces enabled market demand to be met initially but our deep understanding of the signiﬁ cance
of a local presence to meet local cultural demands drove our launch in Doha. Exciting times lie ahead with
Qatar’s successful 2022 World Cup bid likely to accelerate large-scale infrastructure projects such as Qatar’s
metro system and the Qatar-Bahrain causeway.

Michael Page management

Jason Grundy joined Michael Page Financial Services as a consultant in London in 2000 and was promoted
within this business before moving to Abu Dhabi as a regional director in 2010 to both run our ofﬁ ce there and
to reinforce the management in the region, allowing us to launch a new Michael Page business in Qatar.

Michael Page International

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BUSINESS
REVIEW

To the members of Michael Page International plc

The Business Review discusses the following areas:

Under Section 417 of the Companies Act 2006, all companies,

(cid:129) Group Strategy .................................................................13

except companies that ﬁ le small company accounts, are required

(cid:129) Review of 2010 .................................................................14

to prepare a Business Review.

A Business Review is a fair review of the company’s business

within the reporting period. The Business Review of a quoted

company must include a balanced and comprehensive analysis

of the development and performance of the company, with

(cid:129) Regional Review of 2010 ..................................................16

(cid:129) Balance Sheet ..................................................................27

(cid:129) Cashﬂ ow ...........................................................................27

(cid:129) Key performance indicators (“KPIs”) ................................28

(cid:129) Going concern ..................................................................28

a description of the principal risks. The content within the

(cid:129) Foreign exchange .............................................................29

Business Review should be to the extent necessary for an

(cid:129) Treasury management and currency risk .........................29

understanding of the development, performance or position

(cid:129) Principal risks and uncertainties ......................................30

of the company’s business.

(cid:129) Summary and outlook ......................................................31

12
12

Michael Page International
Michael Page International

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GROUP STRATEGY

tighten, these teams then reduce in size largely through natural

attrition. Consequently, our cost base will be reduced in a

The Group’s strategy is to expand and diversify the business by

slowdown, but having invested years in training and developing

industry sectors, by professional disciplines, by geography and

our highly capable management resources, our objective is to

by level of focus, be it Page Personnel, Michael Page or Michael

retain this expertise within the Group. By following this course

Page Executive Search, with the objective of being the leading

of action, we typically gain market share during downturns

specialist recruitment consultancy in each of our chosen markets.

and position our businesses for leading rates of growth when

As recruitment activity is dependent upon economic cycles,

economic conditions improve.

by being more diverse, the dependency on individual businesses

or markets is reduced, making the overall Group more resilient.

This strategy is pursued entirely through the organic growth of

existing and new teams, ofﬁ ces, disciplines and countries with

a consistent team and meritocratic culture.

Pursuing this approach does mean that in an economic

downturn our proﬁ tability declines as, in addition to the lower

productivity levels that come with a slowdown, we also carry

spare capacity. However, when market conditions improve,

the Group’s proﬁ tability recovers quickly as spare capacity is

Our organic growth is achieved by drawing upon the skills and

utilised. Adopting this strategy in times of economic slowdown

experiences of proven Michael Page management, ensuring we

also drives our ﬁ nancing strategy and balance sheet position. In

have the best and most experienced, home-grown talent in each

slowdowns, the business continues to produce strong cash ﬂ ows,

key role. When we invest in a new business, we do so only with a

as working capital requirements reduce. With uncertainty around

long-term objective and in the knowledge that at some point there

the length and depth of economic slowdowns, a strong balance

will be periods when economic activity slows. Whilst it is difﬁ cult

sheet is essential to support the businesses through tougher

to predict accurately when these slowdowns will occur and how

periods and, when conditions improve and the businesses start

severe they will be, it has been our practice in the past and our

growing, to fund increased working capital requirements.

intention in the future to maintain our presence in our chosen

markets, while keeping close control over our cost base.

Our team-based structure and proﬁ t share business model is

scalable. The small team size also means that we can increase

our headcount rapidly to achieve growth. When market conditions

29 Countries

114 Ofﬁ ces
2,389 Fee Earners

19 Countries
64 Ofﬁ ces
884 Fee Earners

To increase the diversiﬁ cation of Michael Page International

by organically growing existing and new teams, ofﬁ ces, disciplines
and countries with a consistent team and meritocratic culture and
consistent client and candidate delivery.

Michael Page International

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REVIEW OF 2010

temporary placements. Gross proﬁ ts from permanent placements

grew by 37.9% (35.2%*) to £343.8m (2009: £249.4m),

The economic recovery from the global ﬁ nancial crisis, which

representing 77.7% (2009: 70.9%) of Group gross proﬁ t.

started in the second half of 2009, continued throughout 2010.

The gross margin from permanent placements increased

The pace of recovery has been strongest in some of the lesser-

to 96.6% (2009: 95.9%), reﬂ ecting higher growth in higher

developed recruitment markets where over the past decade

margin online advertised positions compared to ofﬂ ine.

we have established, organically, a market-leading position.

Gross proﬁ t from temporary placements reduced by 3.8% to

During the course of 2010, we continued our investment in

£98.4m (2009: £102.3m), representing 22.3% (2009: 29.1%)

developing and diversifying our business, with a new country

of Group gross proﬁ t. The gross margin achieved on temporary

opening in Chile and the launch of Page Personnel in Hong Kong,

placements was 20.7% (2009: 22.4%), reﬂ ecting pricing pressure

Mexico, Russia, Singapore and the USA. The rollout of disciplines

experienced during the downturn, however, as the recovery

under the Michael Page and Page Personnel brands continued

strengthened, the gross margin on temporary placements levelled

and we opened a number of new ofﬁ ces. At the start of 2011,

off during 2010.

we also launched new businesses in Qatar, India and Malaysia.

Revenue

Operating proﬁ t and conversion rates

As a result of the Group’s organic long-term growth strategy, tight

Reported revenue for the year was 16.1% (14.8%*) higher at

control on costs and proﬁ t-based bonuses, we have a business

£832.3m (2009: £716.7m). Revenue from permanent placements

model that is highly operationally geared. The majority of our

in 2010 grew by 36.8% (34.3%*) to £356.0m (2009: £260.2m),

cost base, around 75%, relates to our staff, with the other main

representing 42.8% (2009: 36.3%) of Group revenue. Revenue

components being property and information technology costs.

from temporary placements for the year grew by 4.3% to £476.3m

With a strategy of organic growth, the Group incurs start-up

(2009: £456.6m), having recovered later than permanent,

costs and operating losses as investments are made to grow

declining in Q1, stabilising in Q2 and growing in Q3 and Q4.

existing and new businesses, open new ofﬁ ces and launch in new

It is typical during a period of economic recovery that permanent

countries. Furthermore, in periods when headcount increases

placements grow at a faster rate than temporary placements.

signiﬁ cantly, it takes time to train staff before they become fully

This trend has been accentuated due to our faster growing regions

productive. These characteristics of our growth strategy and the

of Asia and Latin America being predominantly permanent rather

levels of investment impact on the conversion rates† in any one

than temporary placement markets.

reporting period.

Gross proﬁ t

Generally, in years when economic conditions are benign, revenue and

gross proﬁ ts grow, with operating proﬁ ts growing at a faster rate due

Gross proﬁ t for the year grew by 25.7% (23.8%*) to £442.2m

to a combination of higher productivity, stronger pricing and greater

(2009: £351.7m). The Group’s gross margin increased to 53.1%

utilisation of infrastructure. In order to continue to grow, we need

(2009: 49.1%), largely as a result of the shift in the mix of business

to increase our headcount and ensure that we have infrastructure

due to the stronger rate of growth of permanent compared to

to house and support them. When economic conditions weaken

LONG-TERM ON INVESTMENT

1996
Singapore

1976
United Kingdom

1985
Australia

1993
Germany

1998
USA

2001
Switzerland
Japan

2002
Belgium
Sweden

2006
South Africa
Russia
Ireland
UAE
Mexico

2008
Austria
Turkey
New Zealand

2010
Chile

1987
Netherlands

1986
France

1997
Spain
Italy

2000
Por tugal
Brazil

2005
Poland
Canada

2007
Luxembourg
Argentina

1995
Hong Kong

2003
China

2011
India
Malaysia
Qatar

Through economic cycles:

• Maintain infrastructure and market presence

• Strategic and measured investments for the longer-term

Michael Page International

†Operating proﬁ t as a percentage of gross proﬁ t

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and recruitment activity slows, these factors work in reverse and

2010, an additional 311 staff were added and, as the recovery

are compounded by a shortening of earnings visibility.

strengthened, so did our pace of investment, with a further 638

In a recovery, activity levels improve, as fewer jobs are cancelled,

companies withdraw hiring freezes and candidates become

added in the second half. Headcount at 31 December 2010 was

4,498, an increase of 949 (26.7%) during the year.

more conﬁ dent about moving jobs. The business will react to

The Group’s strategy of growing organically using home-grown

this activity by increasing headcount. The costs associated with

talent, maintaining market presence and maintaining spare

increasing and decreasing the headcount capacity in the business

capacity, means that the Group is highly operationally geared

are considered to be part of normal trading expenses and are

to an increase in gross proﬁ t as economies recover, tempered

therefore not separately disclosed as restructuring charges.

The majority of our permanent placement activity is undertaken

on a contingent basis, which means on those assignments we

only generate revenue when a candidate is successfully placed

in a role. Our short-term visibility on these earnings is provided

by the number of assignments we are working on, the number

of candidates we have at interview and the stage they are at in

the interview process. The average time to complete a placement

from taking on an assignment to successfully placing a candidate

tends to shorten in a recovery, increasing productivity, and the risk

of the candidate being rejected or the assignment being cancelled

decreases, thereby further increasing our earnings visibility.

In 2010, as market conditions in each of the geographic regions

in which we operate ﬁ rst stabilised and then started to improve,

the increased activity levels were ﬁ rst serviced by utilising the

spare capacity created by maintaining our market presence

only by the rate of investment for future growth. This is reﬂ ected

in the 254% increase in operating proﬁ t, before non-recurring

items, from £20.2m in 2009 to £71.5m in 2010 and the Group’s

conversion rate of operating proﬁ t from gross proﬁ t increasing

to 16.2% (2009: 5.7%). The levels and the increases in the

conversion rates of our regions reﬂ ects their different timings

and degrees of stabilisation and growth.

Administrative expenses in the year increased by 11.8% to

£370.7m (2009: £331.5m), largely as a result of the increase in

headcount, higher proﬁ t-related bonus payments and investments

in new ofﬁ ce and country start-ups. Administrative expenses

included £12.4m of share-based payment charges (2009:

£10.6m) in respect of the Group’s deferred annual bonus scheme,

long-term incentive plans and executive share option schemes.

The increase in these share-based payment charges was due to a

combination of new awards and higher employers’ social charges,

as a consequence of the increase in the share price from 378.9p

during the downturn. As the demand for recruitment services

at the end of 2009, to 555p at the end of 2010.

increases, the number of positions to be ﬁ lled rises, candidate

shortages begin to emerge, the time-to-hire period starts to

reduce and there is less pressure on pricing. All of these factors

trended positively in 2010, creating an environment for increased

productivity and the generation of more gross proﬁ t per fee

earner. As the spare capacity, which is not easily moved between

disciplines or locations, is used up, additional headcount is added

and new investments made for future growth. In the ﬁ rst half of

THE GROUP’S STRATEGY OF GROWING ORGANICALLY USING HOME-
GROWN TALENT, MAINTAINING MARKET PRESENCE AND MAINTAINING
SPARE CAPACITY, MEANS THAT THE GROUP IS HIGHLY OPERATIONALLY
GEARED TO AN INCREASE IN GROSS PROFIT AS ECONOMIES RECOVER.

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REGIONAL REVIEW OF 2010

Continental Europe, Middle East and Africa (EMEA)

EMEA, the Group’s largest region, contributing 43% of the Group’s gross proﬁ t for the year, grew revenue by 6.8% (10.1%*) to £332.2m

(2009: £311.1m) and gross proﬁ t by 15.3% to £188.7m (2009: £163.7m).

In all countries in the region, market conditions gradually improved as the year progressed. While headcount was reduced across the

region in 2009, we ensured we maintained the platform of businesses, holding spare capacity in the larger more established countries and,

as activity levels increased during 2010, some of this spare capacity was utilised. In the newer and smaller countries, we have continued

to invest for growth. Headcount in the region was 1,572 at the start of the year and increased to 1,831 by the end of December, with the

majority of the hiring taking place in the second half of the year. Headcount levels are still well below the 2,155 at the start of 2009 and,

with the beneﬁ t of a lower cost base and the increased level of gross proﬁ t, the region recorded a strong recovery in operating proﬁ ts

to £22.3m (2009: £1.0m), a conversion rate of 11.8% (2009: 0.6%).

While the general pattern of stabilisation followed by growth is apparent in virtually all countries across the region, the extent and timing

of that pattern varied. The Netherlands was our most challenging market, with year-on-year gross proﬁ t comparisons only beginning

to stabilise in the fourth quarter. In all other countries in the region, we achieved strong gross proﬁ t growth: in France (38% of EMEA

up 21%*); Germany (13% of EMEA up 17%*); Spain (8% of EMEA up 20%*); and Italy (9% of EMEA up 29%*). The other 13 countries,

representing 32% of the EMEA region, achieved gross proﬁ t growth of 13%*, with particularly strong performances in Switzerland and

the UAE. During the year we opened ofﬁ ces in Bilbao, Padova, and at the beginning of 2011, we opened our third ofﬁ ce in the Middle

East in Doha, Qatar.

43%

OF GROUP

Gross proﬁ t
Operating proﬁ t
Headcount

COUNTRIES

2010
£188.7m
£22.3m
1,831

+15%
>100%
+16%

2009
£163.7m
£1.1m
1,572

OFFICES

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2010 HIGHLIGHTS

Market conditions improving

France, Spain and Italy beneﬁ t from strong market-leading positions

Strong ﬁ nish to 2010 in Germany, +38%* YOY growth in Q4

Holland, slowest to recover, but now stabilised and conﬁ dent of

recovery

Rest of EMEA (10% of Group) 12 countries, limited competition,

growth +41%*

New ofﬁ ces in Bilbao, Spain, Padova, Italy and Doha, Qatar

GROWTH IN GROSS PROFIT

+15%
£22m

OPERATING PROFIT,
UP FROM £1M IN 2009

1,831

HEADCOUNT (+16%)

GROSS PROFIT BY REGION

GROSS PROFIT BY DISCIPLINE

TEMPORARY : PERMANENT

KEY:

France

Holland

Germany

Italy

Spain

+21%*

-23%*

+17%*

+29%*

+20%*

Rest of EMEA**

+41%*

KEY:

Finance & Accounting

KEY:

Permanent

Marketing, Sales & Retail

Engineering, Property &
Construction, Procurement
& Supply Chain

Legal, Technology, HR,
Secretarial, Healthcare

Temporary

*Growth rates in local currency. **Rest of EMEA: Austria, Belgium, Ireland, Luxembourg, Poland, Portugal, Russia, South Africa, Sweden, Switzerland, Turkey and UAE.

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REGIONAL REVIEW OF 2010

United Kingdom

The UK contributed 28% (2009: 32%) of the Group’s gross proﬁ ts in 2010. Revenue grew by 10.2% to £302.6m (2009: £274.6m) and

gross proﬁ t grew by 12.7% to £124.9m (2009: £110.8m). The gross margin in the UK has remained ﬂ at at 41%, with the positive mix

effect of a greater proportion of faster-growing permanent gross proﬁ t, being negated by slower-growing temporary gross proﬁ t, at lower

margins due to pricing pressure.

The UK business, which stabilised in the fourth quarter of 2009, achieved year-on-year growth in every quarter of 2010. While conﬁ dence

levels have improved, market conditions remain tough, with clients and candidates remaining cautious over the impact of the government’s

austerity measures. The UK business is well diversiﬁ ed in terms of geography, disciplines and the mix of permanent and temporary revenues

and has limited exposure to the public sector and construction industry.

Headcount was 1,179 at the start of the year and increased to 1,324 by the end of December, with the majority of the investment in new

headcount being added in the second half of 2010, with the objective of continuing the growth and gaining market share in 2011. Beneﬁ ting

from the reductions in the cost base achieved during 2009 and the increase in productivity, operating proﬁ ts for the year increased to £19.6m

(2009: £11.3m), representing a conversion rate of 15.7% (2009: 10.2%).

28%

OF GROUP

Gross proﬁ t
Operating proﬁ t
Headcount

OFFICES

2010
£124.9m
£19.6m
1,324

DISCIPLINES

+13%
+74%
+12%

2009
£110.8m
£11.3m
1,179

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2010 HIGHLIGHTS

Market conditions improving

Market conditions tough, but KPIs steadily improving, driven by

private sector

Financial Services, Sales, Legal and Technology recovering fastest

Public sector (approx. 10% of UK), showing sequential slowdown

throughout 2010

Strength of brand in this very competitive market helping win war for

clients and candidates

GROSS PROFIT BY DISCIPLINE

TEMPORARY : PERMANENT

GROWTH IN GROSS PROFIT

+13%
+74%

GROWTH IN OPERATING
PROFIT, TO £20M

1,324

HEADCOUNT (+12%)

KEY:

Finance & Accounting

KEY:

Permanent

Marketing, Sales & Retail

Engineering, Property &
Construction, Procurement
& Supply Chain

Legal, Technology, HR,
Secretarial, Healthcare

Temporary

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REGIONAL REVIEW OF 2010

Asia Paciﬁ c

The Asia Paciﬁ c region contributed 16% of the Group’s gross proﬁ t in 2010. Revenue was 51.5% (33.9%*) higher at £120.3m (2009:

£79.4m) and gross proﬁ t was 71.1% (53.9%*) higher at £72.2m (2009: £42.2m). Operating proﬁ t increased to £22.3m (2009: £8.1m),

representing a conversion rate of 30.9% (2009: 19.2%). The gross margin in the region increased from 53% to 60%, reﬂ ecting both the

faster growth in permanent gross proﬁ ts and strong growth in Asia, where we have a predominantly permanent placement businesses.

Headcount across the Asia Paciﬁ c region increased from 403 at the start of the year, to 691 at the end of the year, an increase of 71%,

reﬂ ecting both increased activity levels and our intentions for building a substantial business in Asia.

In Australia and New Zealand, gross proﬁ ts grew 35%*, with strong growth throughout the year. In Asia, conﬁ dence levels recovered

quickly from the global ﬁ nancial crisis and we grew our gross proﬁ t by 79%*. We more than doubled our headcount in Asia during the

year, opened our seventh ofﬁ ce in China, in Guangzhou and our second ofﬁ ce in Singapore, in Jurong. At the start of 2011, we opened

ofﬁ ces in Kuala Lumpur, Malaysia and two ofﬁ ces in India, in Gurgaon, New Delhi and Mumbai.

16%

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Gross proﬁ t
Operating proﬁ t
Headcount

COUNTRIES

2010
£72.2m
£22.3m
691

+71%
>100%
+71%

2009
£42.2m
£8.1m
403

OFFICES

COUNTRY
DISCIPLINE
COMBINATIONS

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2010 HIGHLIGHTS

Strong recovery, back to record levels of headcount

Australia/New Zealand up 34%* YOY

Page Personnel launched in Hong Kong and Singapore

Asia, 50% of region, up +79%* YOY

Asia more than doubled headcount to 305

Opened 3 ofﬁ ces in 2010 and 3 in ﬁ rst two months of 2011

GROWTH IN GROSS PROFIT

+71%
£22m

OPERATING PROFIT,
UP FROM £8M IN 2009

691

HEADCOUNT (+71%)

GROSS PROFIT BY REGION

GROSS PROFIT BY DISCIPLINE

TEMPORARY : PERMANENT

KEY:

Australia and
New Zealand
Asia

+34%*

+79%*

*Growth rates in local currency

KEY:

Finance & Accounting

KEY:

Permanent

Marketing, Sales & Retail

Engineering, Property &
Construction, Procurement
& Supply Chain

Legal, Technology, HR,
Secretarial, Healthcare

Temporary

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REGIONAL REVIEW OF 2010

The Americas

Revenue for the region grew by 49.5% (38.9%*) to £77.2m (2009: £51.6m) and gross proﬁ t grew by 61.4% (48.1%*) to £56.4m (2009:

£35.0m). With strong growth in revenue and gross proﬁ t, the region produced operating proﬁ t of £7.3m (2009: loss £0.2), representing a

conversion† rate of 13%. Headcount in the region increased from 395 at the start, to 652 at the end of the year, with a greater proportion

being added in the second half.

Approximately two thirds of the Americas region is in Latin America, of which our largest business is in Brazil. During the course of 2010,

we invested to continue our growth and maintain our market-leading position. In Brazil, we opened ofﬁ ces in Alphaville (São Paulo), Barra

da Tijuca (Rio de Janeiro), São José dos Campos and Recife. Our businesses in Mexico and Argentina continue to develop well and in

the second half of 2010 we opened an ofﬁ ce in our fourth Latin American country, in Santiago, Chile. In North America, market conditions

have been slower to recover from the downturn, but we are now beneﬁ ting from maintaining our platform, recording 42% year-on-year

growth in gross proﬁ t in the fourth quarter of 2010.

13%

OF GROUP

Gross proﬁ t
Operating proﬁ t
Headcount

COUNTRIES

2010
£56.4m
£7.3m
652

+61%
>100%
+65%

2009
£35.0m
£(0.2)m
395

OFFICES

COUNTRY
DISCIPLINE
COMBINATIONS

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2010 HIGHLIGHTS

Market conditions improving

21 ofﬁ ces at record level of headcount

North America: +36%* YOY in spite of challenging conditions

Latin America – two thirds of the region, limited competition

Brazil, fourth largest country in the Group, opened 5 more ofﬁ ces,

now 11

Mexico and Argentina performing well

Opened in Santiago, Chile

GROWTH IN GROSS PROFIT

+61%
£7m

OPERATING PROFIT, UP FROM
BREAK EVEN IN 2009

652

HEADCOUNT (+65%)

GROSS PROFIT BY REGION

GROSS PROFIT BY DISCIPLINE

TEMPORARY : PERMANENT

KEY:

North America

+36%*

KEY:

Finance & Accounting

KEY:

Permanent

Latin America

+56%*

Marketing, Sales & Retail

Engineering, Property &
Construction, Procurement
& Supply Chain

Legal, Technology, HR,
Secretarial, Healthcare

Temporary

*Growth rates in local currency

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REGIONAL REVIEW OF 2010

Discipline development

Our strategy of diversifying the Group by professional disciplines has continued, by investing in the roll-out of existing and new disciplines

throughout our country and ofﬁ ce network. The heritage of the business is in placing people in Finance and Accounting roles, the large majority

of which are professionally qualiﬁ ed accountants into industry and commerce. While this remains our largest area of business, it was less

than half, at 47%, of the Group’s 2010 gross proﬁ t. Revenue from Finance and Accounting placements grew by 10.2% (8.9%*) to £450.6m

(2009: £409.0m) and gross proﬁ t grew by 19.0% (16.7%*) to £209.2m (2009: £175.7m).

Placements of Marketing, Sales and Retail professionals generated around 19% of the Group’s gross proﬁ t. Revenue from these disciplines

grew by 21.6% (19.7%*) to £111.7m (2009: £91.8m) and gross proﬁ t grew by 34.9% (32.8%*) to £82.8m (2009: £61.4m).

Legal, Technology, Human Resources, Secretarial and Other disciplines generated around 18% of Group gross proﬁ t. Revenue from these

disciplines grew by 25.4% (23.9%*) to £157.0m (2009: £125.2m) and gross proﬁ t grew by 33.3% (31.5%*) to £81.6m (2009: £61.2m).

Engineering, Property & Construction and Procurement & Supply Chain accounted for around 16% of Group gross proﬁ t. Revenue from these

disciplines grew by 24.6% (24.1%*) to £113.1m (2009: £90.8m) and gross proﬁ t grew by 28.6% (27.7%*) to £68.6m (2009: £53.3m).

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FINANCIAL REVIEW OF 2010

Non-recurring items (NRI) - VAT

position, together with the remaining uncertainty pending formal

contractual agreement, the Group reversed out the amounts

originally recognised in the 2009 half year results and as such

did not recognise any amount in the Income Statement in the

In 2003, the Group submitted an initial claim to Her Majesty’s

2009 full year.

Revenue and Customs (HMRC) for overpaid VAT which was

rejected. The Group appealed and subsequently ﬁ led amended

claims for £26.5m, net of fees, covering the period from 1980

to 2004. In March 2009, the Group ﬁ led amended claims for a

further refund of an additional £80m, net of fees, of overpaid VAT

covering the same period.

In June 2009, the Group received a payment from HMRC of

£26.5m, net of fees, as part settlement of these claims and in

July 2009 received £10.5m, net of fees, of statutory interest. As a

result, the principal and interest amounts were recognised in the

half year to June 2009 results, with the interest receivable being

recorded within working capital in the cash ﬂ ow statement.

On 25 September 2009, the Group received a letter from HMRC,

which stated that, ‘HMRC have reviewed the recent payment and

are now of the view that the claim in whole or in part should not

have been paid’.

On 30 April 2010, a formal agreement was signed with HMRC.

As a result, of the £50m originally received from HMRC, the Group

retained £38.1m and returned £11.9m in May 2010. Accordingly,

after fees, the Group has recognised £28.4m as non-recurring

income in its 2010 Income Statement, of which £17.1m is in respect

of refunded VAT and is included in operating proﬁ t and £11.3m is

in respect of interest and is included in ﬁ nancial income.

In respect of the amended claims for a further refund of an

additional £80m, net of fees, of overpaid VAT, the Group is

continuing to pursue the claim.

Financial Income

The Group had ﬁ nancial income for the year of £1.1m (2009:

£2.0m). As trading conditions and the economic outlook improved

during 2010, we were able to return surplus cash to shareholders

by way of share repurchases. As a result, the Group held less

A number of discussions and meetings with HMRC followed and

net cash and in consequence received less ﬁ nancial income.

on 5 March 2010, the Group announced that an agreement had

Thus, the lower level of ﬁ nancial income compared to 2009 reﬂ ected

been reached in principle, subject to legal contract, for the Group

the strengthening of the Group’s trading conditions. In addition,

to retain £28.4m (net of fees). However, given the background to

the Group received ﬁ nancial income from non-recurring activities

the initial receipt, the subsequent review and reversal of HMRC’s

of £11.3m that related to the VAT refund.

EFFECTIVE USE OF CASH

The chart above shows how the Group managed its cash resources in the years

the Group stopped its share repurchase programme and the cash generated

since ﬂ otation. The cash paid in dividends has increased or been maintained,

was retained on the balance sheet. This can be seen in the sharp increase in

while maintaining a net cash position within a relatively small range. During

net cash during 2008 and 2009. As trading conditions improved during 2010,

2001 to 2007, surplus cash was used to repurchase and cancel shares.

the Group resumed its share repurchases both into the employee beneﬁ t trust

As the downturn impacted the Group’s trading during the second half of 2008,

to satisfy current and future share plan obligations and for cancellation, and

consequently the net cash reduced.

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Taxation

Tax on proﬁ ts was £33.2m (2009: £8.6m), representing an

effective tax rate of 33.0% (2009: 41.0%). The rate is higher than

the effective UK Corporation Tax rate for the year of 28%, due

to disallowable items of expenditure and proﬁ ts being generated

in countries where the corporate tax rates are higher than in the

UK. The effective rate was lower than in 2009, due to a large VAT

reclaim taxed at 28% in the UK and higher overall proﬁ ts diluting

the effect of the share plan non-deductible charges, partially offset

by an increase in European proﬁ ts at generally higher rates than

the Group average.

Share repurchases and share options

It is the Group’s intention to continue to use share repurchases to

return surplus cash to shareholders and to satisfy awards under

the Group’s incentive share plan, deferred annual bonus plan

and share option scheme. During the year, 18.7m shares were

At the beginning of 2010, the Group had 16.6m share options

outstanding, of which 4.2m had vested. In March 2011, 11.5m

share options were granted under the Group’s Executive Share

Option Scheme. This award was larger than previous grants of

share options, as no awards were made under the Incentive

Share Plan. During the course of the year, options were exercised

over 1.9m shares, generating £4.0m in cash and 3.1m share

options lapsed. At the end of 2010, 23.4m share options

remained outstanding, of which 2.1m had vested but had not

been exercised. It is anticipated that 3.1m of these unvested

options will lapse in March 2011.

Earnings per share and dividends

In 2010, basic earnings per share were 21.6p (2009: 3.9p)

and diluted earnings per share were 21.1p (2009: 3.8p).

The weighted average number of shares for the year was 311.8m

(2009: 321.6m).

repurchased at a cost of £76.8m. 3.7m of these shares were

A ﬁ nal dividend of 6.12p, up 19.5%, (2009: 5.12p) per ordinary

cancelled, with the remaining shares purchased by the Company’s

share is proposed which, together with the interim dividend of

employee beneﬁ t trust to satisfy future share plan awards.

2.88p (2009: 2.88p) per ordinary share, makes a 12.5% increase

in the total dividend for the year to 9.0p per ordinary share.

The proposed ﬁ nal dividend, which amounts to £18.8m, will be

paid on 6 June 2011 to those shareholders on the register as

at 6 May 2011.

CASH RETURNED TO SHAREHOLDERS

The chart above, on the right-hand axis, shows the annual and cumulative cash

The left-hand axis shows the number of shares in issue at each year end.

returns made to shareholders in the 10 years since the Group’s ﬂ otation. In

At ﬂ otation there were 375.0m shares in issue, with an additional 33.8m

total, over £425m of cash has been returned, with £179m in dividends and

under option. However, share repurchases and subsequent cancellations have

£246m in share repurchases. In addition, net cash retained on the Group’s

reduced the shares in issue to 321.6m at the end of 2010, at which point a

balance sheet over the same period increased by £65m.

further 23.1m shares were under option.

Michael Page International

BALANCE SHEET

The Group had net assets of £177.4m at 31 December 2010

(2009: £197.0m). The decrease in net assets comprises proﬁ t

for the year of £67.5m, currency movements of £0.3m, credits

relating to share schemes of £10.3m and cash received from the

exercise of share options of £4.0m, offset by share repurchases for

cancellation of £15.1m, shares bought and held in the employee

beneﬁ t trust of £61.8m and dividends paid of £24.9m.

Our capital expenditure is driven primarily by two main factors

being headcount, in terms of ofﬁ ce accommodation and

infrastructure, and the development and maintenance of our IT

systems. The project to replace our current IT recruitment system

with the next generation continues to progress and we anticipate

that the ﬁ rst full implementations will take place later this year,

with the roll-out continuing throughout 2012 in order to mitigate

the implementation risks. Capital expenditure, net of disposal

proceeds, increased to £14.8m (2009: £11.3m), reﬂ ecting the

investment in new systems and expenditure, where there is no

longer spare capacity, due to headcount increasing in the year.

The most signiﬁ cant item in the balance sheet is trade receivables,

which were £134.7m at 31 December 2010 (2009: £100.2m). The

increase in trade receivables reﬂ ects both the increased activity

and a small increase in debtor days to 47 (2009: 45 days). The

movement in debtor days is due largely to the increased proportion

of revenue being derived from permanent placements where our

debtor days are higher than from temporary revenues.

CASH FLOW

The Group started the year with net cash of £137.2m. In 2010,

we generated £69.1m from operations after NRI, after an increase

in working capital of £10.6m, reﬂ ecting increased activity and

cash outﬂ ows relating to the VAT claim of £12.6m. Tax paid

was £12.4m and net capital expenditure was £14.8m, with net

interest received of £0.7m. During the year, £61.8m was spent

repurchasing shares into the employee beneﬁ t trust to satisfy

employee share schemes, £15.1m was spent on the repurchase

and cancellation of shares, £4.0m was received from the exercise

of share options and dividends of £24.9m were paid. The Group

had net cash of £80.5m at 31 December 2010.

Net cash and Group borrowing facilities

At 31 December 2010, the Group had net cash of £80.5m (2009:

£137.2m). The net cash position comprised gross cash deposits

of £80.5m with 19 separate banks.

The Group has a three year £50m multi-currency committed

borrowing facility, which is currently undrawn, that expires in

July 2012.

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THE GROUP RECOGNISED
£28.5M AS NON-
RECURRING INCOME,
OF WHICH £17.1M IS IN
RESPECT OF REFUNDED
VAT AND £11.4M IS
INTEREST

OVER £100M OF CASH
PAID IN DIVIDENDS AND
SHARE REPURCHASES.

STRONG BALANCE SHEET
WITH OVER £80M IN CASH
AT END OF 2010.

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KEY PERFORMANCE INDICATORS (“KPIS”)

Financial and non-ﬁ nancial key performance indicators (KPIs) used by the Board to monitor progress are listed in the table below.

The source of data and calculation methods year-on-year are on a consistent basis.

KPI

2010

2009

Deﬁ nition, method of calculation and analysis

Gross margin

53.1%

49.1% Gross proﬁ t as a percentage of revenue. Gross margin increased from last year

largely as a result of the higher gross margin permanent placements growing at a

faster rate than temporary placements. Source: Consolidated income statement in

the ﬁ nancial statements.

Conversion

16.2%

5.7% Operating proﬁ t as a percentage of gross proﬁ t showing the Group’s effectiveness at

controlling the costs and expenses associated with its normal business operations

and the level of investment for the future. Conversion increased compared to last

year, reﬂ ecting the improvement in economic conditions on demand for the Group’s

services, higher productivity and lower levels of spare capacity in the business.

Source: Consolidated income statement in the ﬁ nancial statements.

Productivity

£155.3k

£124.0k Represents how productive fee earners are in the business and is calculated by

(gross proﬁ t per fee

earner)

dividing the gross proﬁ t for the year by the average number of fee earners and

directors. The higher the number, the higher their productivity. Productivity is a

function of the rate of investment in new fee earners, the impact of pricing and the

general conditions of the recruitment market. The increase in productivity this year

is as a result of the general improvement in market conditions, but would be higher

without the investment in an additional 949 headcount.

Fee earner: support

73:27

71:29

Represents the balance between operational and non-operational staff. The ratio of

staff ratio

fee earners to support staff at the end of 2010 has increased from the level at the

end of 2009. This ratio improves when the Group grows and headcount increases,

but tends to decline when Group headcount reduces as the infrastructure staff to

support a higher number of teams, ofﬁ ces and countries cannot be ﬂ exed as quickly

as fee generating staff. Source: Internal data.

Debtor days

Represents the length of time taken for the Group to receive payments from its

debtors. Calculated by comparing how many days’ billings it takes to cover the debtor

balance. The increase compared to last year relates to the shift towards permanent

recruitment activity from temporary in a recovery. Permanent recruitment activity

tends to have higher debtor days. Source: Internal data.

The movements in KPIs are consistent with the business performance as discussed in the Business Review.

GOING CONCERN

The Board has undertaken a recent and thorough review of the Group’s budget, forecasts and associated risks and sensitivities and has

concluded, given the level of cash in the business, the level of borrowing facilities available, the geographical and discipline diversiﬁ cation,

limited concentration risk, as well as the ability to manage the cost base, that the Group has adequate resources to continue in operational

existence for the foreseeable future, being a period of at least twelve months from the date of approval of these accounts. As a result,

the going concern basis continues to be appropriate in preparing the ﬁ nancial statements.

Michael Page International

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FOREIGN EXCHANGE

The Group now operates in 32 countries around the world and carries out transactions that are recorded in twenty-two local currencies.

The Group reports its Income Statement and Cash Flow Statement results in Pounds Sterling, using the average exchange rate for each

month to translate the local currency amounts into Sterling. The Balance Sheet is translated using the exchange rates at the Balance

Sheet date.

As a service company, most of the Group’s transactions are within the territory in which the local business operates and consequently

there are few cross-border transactions between Group companies. However, royalties are charged for the use of the Group’s trademarks

and management fees are charged for Group and regional functions that provide services to other Group subsidiary companies. Foreign

exchange gains and losses are recognised in accordance with IFRS on the settlement of these transactions where the cash received,

when converted into Sterling, differs from the amounts previously recorded in the Income Statement. These exchange gains and losses

are included within operating proﬁ t.

The table below shows the relative movements of the Group’s main trading currencies against Pounds Sterling during 2010, when

compared to those prevalent during 2009. Negative percentages indicate that Sterling has weakened against the foreign currency during

the period. With the exception of the Euro, Sterling has weakened against these main trading currencies.

Currency

Euro

Swiss Franc

Brazilian Real

US Dollar

Australian Dollar

Hong Kong Dollar

Singapore Dollar

Japanese Yen

Movement in the average exchange

Movement in the year end exchange

rate used for Income Statement

rate used for Balance Sheet translation

translation between 2009 and 2010

between 2009 and 2010

-5%

-13%

-1%

-15%

-1%

-7%

-13%

-8%

-3%

-15%

-3%

-12%

-16%

TREASURY MANAGEMENT AND CURRENCY RISK

It is the Directors’ intention to continue to ﬁ nance the activities and development of the Group from retained earnings and to operate

the Group’s business while maintaining a strong balance sheet position. In a generally benign economic environment, this equates to

maintaining the Group’s net cash/debt position within a relatively narrow band, with cash generated in excess of these requirements

being used to buy back the Group’s shares. In a period of economic uncertainty, a more cautious funding position is adopted, with the

Group being managed in a net cash position.

Cash surpluses are invested in short-term deposits, with any working capital requirements being provided from Group cash resources,

Group facilities, or by local overdraft facilities. The Group has a multi-currency notional cash pool between the Euro zone subsidiaries

and the UK-based Group Treasury subsidiary. The structure facilitates interest and balance compensation of cash and bank overdrafts.

It is the intention to extend the scope of the participation to other Group companies.

The main functional currencies of the Group are Sterling, Euro and Australian Dollar. The Group does not have material transactional

currency exposures, nor is there a material exposure to foreign denominated monetary assets and liabilities. The Group is exposed to

foreign currency translation differences in accounting for its overseas operations. Our policy is not to hedge this exposure.

In certain cases, where the Group gives or receives short-term loans to and from other Group companies with different reporting

currencies, it may use foreign exchange swap derivative ﬁ nancial instruments to manage the currency and interest rate exposure that

arises on these loans. It is the Group’s policy not to seek to designate these derivatives as hedges.

Michael Page International

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PRINCIPAL RISKS AND UNCERTAINTIES

The management of the business and the execution of the Group’s strategy are subject to a number of risks. The following section

comprises a summary of the main risks Michael Page International plc believes could potentially impact the Group’s operating and

ﬁ nancial performance.

People

The resignation of key individuals and the inability to recruit talented people with the right skill-sets could adversely affect the Group’s

results. This is further compounded by the Group’s organic growth strategy and its policy of not externally hiring senior operational

positions. Mitigation of this risk is achieved by succession planning, training of staff, competitive pay structures and share plans linked

to the Group’s results and career progression.

Macro economic environment

Recruitment activity is largely driven by economic cycles and the levels of business conﬁ dence. The Board look to reduce the Group’s

cyclical risk by expanding geographically, increasing the number of disciplines, building part qualiﬁ ed and clerical businesses and

continuing to build the temporary business. A substantial portion of the Group’s gross proﬁ t arises from fees that are contingent upon

the successful placement of a candidate in a position. If a client cancels the assignment at any stage in the process, the Group receives

no remuneration. As a consequence, the Group’s visibility of gross proﬁ ts is generally quite short and reduces further during periods of

economic downturn.

Competition

The degree of competition varies in each of the Group’s main regions. In the UK, Australia and North America, the recruitment market

is well developed, highly competitive and fragmented. The characteristics of a developed market are greater competition for clients and

candidates, as well as pricing pressure. In EMEA, Latin America and Asia, the recruitment market is generally less developed, with a

large proportion of all recruitment being carried out by companies’ internal resources, rather than through recruitment specialists. This

is changing due to changes in legislation, increasing job mobility and the difﬁ culty internal resources face in sourcing suitably qualiﬁ ed

candidates and managing compliance. If the Group does not continue to compete in its markets effectively, by hiring new staff, opening

and expanding ofﬁ ces and continuing the discipline roll-outs, there is a risk that competitors may beat us to key strategic opportunities,

which may result in lost business and a reduction in market share. This risk is mitigated by meetings of the Board, Executive Board and

Regional and Country Management Boards where Group strategy is continually reviewed and decisions made over the allocation of

the Group’s resources, principally people.

Technology

The Group is reliant on a number of technology systems to provide services to clients and candidates. These systems are dependent

on a number of important suppliers that provide the technology infrastructure and disaster recovery solutions. The performance of these

suppliers are continually monitored to ensure business critical services are available and maintained as far as practically possible. Due

to the rapid advancement of technology, there is a risk that systems could become outdated with the potential to affect efﬁ ciency and

have an impact on revenue and client service. This risk is mitigated by regular reviews of the Group’s technology strategy to ensure that

it supports the overall Group strategy.

Legal

The Group operates in a large number of jurisdictions that have varying legal and compliance regulations. The Group takes its responsibilities

seriously and ensures that its policies, systems and procedures are continually updated to reﬂ ect best practice and to comply with the

legal requirements in all the markets in which it operates. In order to reduce the legal and compliance risks, fee earners and support

staff receive regular training and updates of changes in legal and compliance requirements.

Update on VAT reclaims

We have had correspondence and discussions with HMRC concerning the amended claims for a further refund of VAT and related

interest, but the eventual outcome and timing of any decision remains uncertain.

Michael Page International

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SUMMARY AND OUTLOOK

Having maintained our business platform during the economic downturn and retained our experienced and talented people, the Group was

well positioned to beneﬁ t from the economic recovery during 2010. The diversiﬁ cation of the Group, both geographically and by discipline,

has proved advantageous as the recovery has developed. Through the utilisation of spare capacity, the Group’s proﬁ tability has improved

signiﬁ cantly. We have maintained a strong balance sheet and, while increasing the returns to shareholders, we have also continued to

take a long-term approach by making signiﬁ cant investments in the future of the business, both during 2010 and at the start of 2011.

Following the launch of new businesses in Chile, Qatar, Malaysia and India, we now operate in 32 countries. With the increase in

headcount of 949 during 2010 and a further 258 in the ﬁ rst two months of 2011, achievable because of the strength and depth of our

management, we are well positioned to continue our growth.

Since the start of 2011 we have seen strong growth in our EMEA region, Australia and North America and steady growth in our UK

business where market conditions remain tough but stable. We continue to achieve our highest rates of growth in our Asian and Latin

American regions where we have market leading positions.

We will next update the market on our ﬁ rst quarter trading in an announcement on 11 April 2011.

Steve Ingham

Chief Executive

4 March 2011

Stephen Puckett

Group Finance Director

4 March 2011

Michael Page International

BOARD OF DIRECTORS

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SIR ADRIAN MONTAGUE CBE
Chairman (63)

Sir Adrian is Chairman of Anglian Water Group Limited and of

CHARLES-HENRI DUMON
Managing Director – Continental Europe and
The Americas (52)

CellMark AB, the international forest products marketing group

Charles-Henri joined Michael Page in 1985 and was appointed a

based in Gothenburg and in July 2010, he was appointed

Director in 1987. Since then he has had full responsibility for the

Chairman of the private equity ﬁ rm 3i. From 1997 to 2001,

Group’s operations in France and has managed the Group’s entry

he held senior posts concerned with the implementation of the

into Southern Europe and South America. He was appointed

Government’s policies for the involvement of the private sector

Managing Director for all Michael Page’s European and South

in the delivery of public services, ﬁ rst as Chief Executive of the

American businesses in January 2001. His responsibilities were

Treasury Taskforce and then as Deputy Chairman of Partnerships

increased to include North America in January 2006.

UK plc. He was Deputy Chairman of Network Rail from 2001 to

2004, Chairman of Cross London Rail Links Limited from 2004

to 2005, Chairman of British Energy from 2002 to 2009 and

Chairman of Friends Provident plc from 2005 to 2009. He spent

his early career as a solicitor with Linklaters & Paines before

RUBY MCGREGOR-SMITH
Independent Non-Executive Director (48)

joining Kleinwort Benson in1994. Sir Adrian is also Chairman of

Ruby qualiﬁ ed as a Chartered Accountant with BDO Stoy

London First, a Director of Skanska AB, the Swedish international

Hayward and was appointed to the Board of Michael Page

construction group, and a Trustee of The Historic Royal Palaces.

International plc on 23 May 2007. She is Chief Executive of MITIE

He is also a member of the Housing Finance Group of the Housing

Group PLC, a position she has held since March 2007. Previously

and Communities Agency and Chairman of the Advisory Board

to being appointed Chief Executive, she held the positions of

of Reform. He was awarded a CBE in 2001 and a knighthood in

Group Finance Director and then Chief Operating Ofﬁ cer. Prior

2006. He is also Chairman of the Nomination Committee.

STEVE INGHAM
Chief Executive (48)

to joining MITIE Group PLC, she held a range of senior roles

within the support services sector, primarily at Serco Group plc.

She is Chairman of the Audit Committee and a member of the

Nomination and Remuneration Committees.

Steve joined Michael Page in 1987 as a consultant with

Michael Page Marketing and Sales. He was responsible

for setting up the London marketing and sales businesses

DR TIM MILLER
Independent Non-Executive Director (53)

and was promoted to Operating Director in 1990. He was

Tim was appointed a Director of Standard Chartered Bank

appointed Managing Director of Michael Page Marketing and

in December 2004. Tim is responsible for the Corporate

Sales in 1994. Subsequently he took additional responsibility

Real Estate, Corporate Secretariat, Legal, Compliance &

for Michael Page’s Retail, Technology, Human Resources

Assurance, Internal Audit and Global Research functions.

and Engineering businesses. He was promoted to the Board

Tim is also Chairman of Standard Chartered Korea and Chairman

as Executive Director of UK Operations in January 2001,

of the Bank’s Environment Committee. Outside the Bank,

and subsequently to Managing Director of UK Operations in May

Tim is Chairman of the Governing Body, School of Oriental &

2005. He was appointed Chief Executive on 6 April 2006. Steve is

African Studies (“SOAS”) and a Member of the School Advisory

also a member of the Great Ormond Street Hospital’s Corporate

Board, and a Special Professor of Strategy, at Nottingham

Partnership Board.

Michael Page International

University Business School, where, in 2007, he completed a

Doctorate in Business Administration. Tim was appointed

to the Board of Michael Page International plc on 15 August

2005 and was Chairman of the Remuneration Committee until

21 January 2011. He is now a member of the Audit, Nomination

and Remuneration Committees.

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STEPHEN PUCKETT
Group Finance Director (49)

Stephen qualiﬁ ed as a Chartered Accountant with BDO Binder

Hamlyn. He joined Wace Group plc in 1988 as Director of

Corporate Finance, subsequently being promoted to Group

Finance Director in 1991. He was Group Finance Director of Stat

Plus Group plc in 2000, and appointed Group Finance Director of

Michael Page International plc in January 2001. He was a Non-

Executive Director of SHL Group Plc from 2004 to 2006.

HUBERT REID
Independent Non-Executive Director
Senior Independent Director (70)

Hubert is Chairman of Enterprise Inns plc and of the Midas Income

and Growth Trust PLC and Deputy Chairman of Majedie Investments

PLC. He was previously Managing Director and then Chairman of

the Boddington Group plc, and a Non-Executive Director and then

Chairman of Ibstock Plc, Bryant Group plc and the Royal London

Group. He was appointed a Non-Executive Director of Michael

Page International plc on 25 February 2003. He is a member of

the Audit, Nomination and Remuneration Committees.

REG SINDALL
Independent Non-Executive Director (56)

Reg is Executive Vice President of Corporate Resources for

the Burberry Group PLC, which is headquartered in London.

Reg has held this position for three years. Prior to this he was

an Executive of GUS Plc, a FTSE 30 company which owned

Burberry for ﬁ fty years. He was part of the team that led the IPO of

Burberry in 2002. Before joining GUS in 2000, Reg held a variety

of positions within the Bass Group, including Group HR Director,

SVP of Customer Service, Reservations and HR. A psychologist

by academic training, he is a Fellow of the Chartered Institute of

Personnel Development and a Fellow of the Royal Society of Arts.

He is Chairman of the Remuneration Committee and a member

of the Audit and Nomination Committees.

EXECUTIVE BOARD

In addition to the Executive Directors, the Executive Board

comprises:

ALEXIS DE BRETTEVILLE
Regional Managing Director – The Americas (48)

Sweden. In 2004, he moved to Belgium where his responsibilities

also included Holland and the launch of Poland in 2005. In 2006,

he became Regional Managing Director for the Americas, based in

New York, having responsibility for Michael Page in USA, Canada,

Brazil, Mexico and most recently Argentina.

GARY JAMES
Regional Managing Director – Asia Paciﬁ c (49)

Gary joined Michael Page Finance in London in 1984. He was

appointed Director of Michael Page Sales & Marketing in 1994,

Managing Director of Michael Page Marketing in 1997 and

transferred to America in 2002 as Managing Director of North

America. He moved to Australia and was appointed Managing

Director of the Asia Paciﬁ c region in August 2006.

OLIVIER LEMAITRE
Regional Managing Director – Continental
Europe (38)

Olivier joined Michael Page Finance in Paris in 1997, having

worked previously as a Controller for Renault in Poland. In 1999,

he moved to São Paulo to launch Michael Page Brazil, before

returning to Europe in November 2002 to lead our Michael Page

Frankfurt ofﬁ ce. Appointed Managing Director of Michael Page

Germany in 2004, he also took responsibility for Michael Page

Switzerland in 2006 and the launch of Michael Page Austria in

2008. In 2007, he was appointed Regional Managing Director

and is now in charge of Austria, Belgium, Germany, Holland,

Luxembourg and Switzerland.

OLIVER WATSON
Regional Managing Director – UK (41)

Oliver joined Michael Page in 1995 as a consultant in London.

He was appointed Director of Michael Page UK Sales in 1997

and then Managing Director in 2002. In 2006, he was appointed

Regional Managing Director for Michael Page UK Sales, Marketing

and Retail. In 2007, he launched Michael Page Middle East and

has since developed our ofﬁ ce network across the region. In

2009, he became Regional Managing Director for Michael Page

UK Finance, Marketing and Sales, and Michael Page Middle

East, Scotland and Ireland.

ANDREW WAYLAND
Chief Information Ofﬁ cer (44)

Andrew was the UK IT Business Management Director of

PricewaterhouseCoopers where he worked for over 10 years in the

Alexis joined Michael Page in 1993 as a Consultant in Paris, France.

internal IT functions. He brings extensive experience in establishing

In 1997 he was appointed Managing Director of Michael Page

IT strategy and innovation to support the wider business strategy,

Spain, launching Spain, Portugal and later, Brazil. In 2002, he

and integrating technology teams. He was appointed Chief

moved to Germany, taking responsibility for Germany, Belgium and

Information Ofﬁ cer of Michael Page in December 2005.

Michael Page International

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T DIRECTORS’
REPORT

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The Directors present their annual report on the affairs of the

Principal activity

Group, together with the Financial Statements and Auditor’s

Report for the year ended 31 December 2010.

The Group is one of the world’s leading specialist recruitment

consultancies. The Group’s trading results are set out in the

ﬁ nancial statements on pages 58 to 88.

Business Review

The Company is required by the Companies Act to include a

business review in their report. The information that fulﬁ ls the

requirements of the business review can be found on pages 12

to 31 which are incorporated in this report by reference.

Michael Page International

CORPORATE GOVERNANCE

The beneﬁ cial interests of Directors in ofﬁ ce at 31 December

2010 in the shares of the Company at 31 December 2010 and

The Company and the Group are committed to high standards

at 4 March 2011 are set out in the Remuneration Report on

of corporate governance, details of which are provided in

pages 48 to 55.

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the Corporate Governance Report on pages 42 to 47 and

Remuneration Report on pages 48 to 55.

SIGNIFICANT AGREEMENTS

There are certain agreements to which the Company is party

that take effect, alter or terminate upon a change of control of

the Company following a takeover bid.

Details of the signiﬁ cant agreements of this kind are as follows:

•

a £50m revolving credit facility that terminates on a change

of control, with outstanding amounts becoming payable

with interest; and

•

provisions of the Company’s share schemes and plans may

cause options and awards granted to employees under such

schemes and plans to vest on a takeover.

DIRECTORS AND INTERESTS

The following were Directors during the year and held ofﬁ ce

throughout the year other than as shown below.

• Sir Adrian Montague CBE‡ (Chairman)

• Steve Ingham (Chief Executive)

• Charles-Henri Dumon

• Ruby McGregor-Smith‡

• Dr Tim Miller‡

• Stephen Puckett

• Hubert Reid‡*

• Reg Sindall‡ (appointed 14 December 2010)

‡ Non-Executive Directors

* Senior Independent Director

On 14 December 2010, Reg Sindall was appointed to the Board

as an Independent Non-Executive Director. Reg is Executive Vice

President, Corporate Resources, at Burberry Group PLC, the

international fashion and retail group. Reg has held this position

for three years. Prior to this he was an Executive of GUS Plc,

a FTSE 30 company which owned Burberry for ﬁ fty years. He was

part of the team which led the IPO of Burberry in 2002. Before

that, his career encompassed Human Resources and Customer

All of the Executive Directors are deemed to have an interest in

the ordinary shares held in the Employee Beneﬁ t Trust.

The Company has maintained throughout the year directors’

and ofﬁ cers’ liability insurance in respect of itself and its

directors. The directors also have the beneﬁ t of the indemnity

provision contained in the Company’s Articles of Association.

These provisions, which are qualifying third party indemnity

provisions as deﬁ ned by Section 234 of the Companies Act 2006,

were in force throughout the year and are currently in force.

RESULTS AND DIVIDENDS

The proﬁ t for the year after taxation amounted to £67.5m (2009:

£12.4m).

A ﬁ nal dividend for 2009 of 5.12 pence per ordinary share was

paid on 7 June 2010. An interim dividend for 2010 of 2.88 pence

per ordinary share was paid on 8 October 2010. The Directors

recommend the payment of a ﬁ nal dividend for the year ended

31 December 2010 of 6.12 pence per ordinary share on 6 June

2011 to shareholders on the register on 6 May 2011 which,

if approved at the Annual General Meeting, will result in a

total dividend for the year of 9.0 pence per ordinary share

(2009: 8.0 pence).

CREDITOR DAYS

The Company acts as a holding Company for the Group. Creditor

days for the Company were nil (2009: nil) as the Company does

not undertake any transactions with suppliers. The Group’s

creditor days at the year end were 39 (2009: 29 days).

SUBSTANTIAL SHAREHOLDINGS

As at 4 March 2011, the Company had been notiﬁ ed in accordance

with Chapter 5 of the Disclosure and Transparency Rules of the

following voting rights by shareholders of the Company as shown

below.

Capital International Limited

31,307,869

Number of
ordinary shares

% of issued
share capital

17,021,321

15,886,847

15,351,191

13,357,067

12,367,334

9.73%

5.29%

4.94%

4.77%

4.15%

3.85%

Service positions at Bass, Grand Metropolitan and Whitbread. His

Holder

experience at Burberry, a high-performing, people business with

a broad international reach, has much in common with Michael

Page, and he will be a most valuable addition to the Board.

In accordance with the new UK Corporate Governance

Code, all the Directors will retire by rotation at the Annual

Sleep, Zakaria & Co

Fidelity

Lloyds Banking Group

General Meeting and, being eligible, offer themselves for

Standard Life Investments

re-election. As Reg Sindall was appointed during the year, he will

offer himself for election.

Legal & General

Biographical details for all the current Directors are shown on

pages 32 and 33.

Michael Page International

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SHARE CAPITAL

CORPORATE MEMBERSHIPS

The authorised and issued share capital of the Company are

We are members of the below organisations with the pure

shown in Note 18 to the ﬁ nancial statements.

intention to work with and advise our clients and candidates

At the Annual General Meeting held on 21 May 2010, the

Company renewed its authority to make market purchases of

its own ordinary shares up to an increased maximum of 10% of

the issued share capital.

During the year, the Company purchased 3.7m shares which

were cancelled. A further 15m shares were also purchased by the

employee beneﬁ t trust and held to fund share scheme awards.

The total nominal value of all shares repurchased was £0.2m and

represented 5.8% of the issued share capital. The shares were

on diversity. Our senior staff are actively involved with these

bodies through work-streams and joint initiatives, ensuring we

are constantly learning from their experience and indeed using

our own resources to share best practice and ideas.

•

Race for Opportunity – an organisation committed to improving

employment opportunities for ethnic minorities across the UK.

•

Opportunity Now – a membership organisation for employers

who are committed to creating an inclusive workplace for

women.

purchased for a consideration of £76.8m including expenses.

•

Employers Forum for Disability – the world’s leading employers’

1.9m shares were also issued to satisfy share options exercised

organisation focused on disability as it affects business.

during the year.

CORPORATE RESPONSIBILITY (CR)

• Employers Forum on Age – an independent network of

leading employers, who recognise the need to attract and

retain valuable employees, whatever their age.

2010 saw Michael Page International continue to engage,

encourage and equip our people to make a positive impact

OUR PEOPLE

on the customers and communities we work with. It’s all part

of our commitment to causes and practices that we ﬁ rmly

Employee engagement

believe in, spanning diversity, training, charity, community and

With our business poised for international growth, our vision

environment. Our approach to CR touches all those we engage

of Maximising Potential exists for employees to articulate

with; shareholders, clients, investors, employees and members

opportunity, development and the ambition of each individual.

of the wider community. Good CR is rewarding, as it doesn’t

At the heart of our company is the camaraderie of team work,

just make us feel good about ourselves, it makes good business

so much so that it is also one of our company values. We are

sense too.

DIVERSITY

a very sociable company with regular team activities in and out

of the ofﬁ ce including quarterly events and high proﬁ le exclusive

trips for our ‘High Flyers’, the latter a reward for those who have

performed exceptionally well.

Building on the positive steps we took in 2009, our diversity

strategy describes our approach to monitoring (our own staff

Hiring the best

and candidate population), creating a diverse and inclusive

Sourcing and retaining the highest calibre employees from a wide

workforce ourselves, and assisting clients in fulﬁ lling their own

range of backgrounds is key to our success.

diversity agenda by introducing candidates from the widest

possible talent pool.

The service we provide to all our customers is only as good as the

people who represent our brand. Our strategy, to grow organically

We know it; our diversity proposition forms part of our long-

by promoting from within, presents enormous opportunities to

term global plans for growth. It is an integral part of our desire to

employees who range from graduates to people changing careers –

consistently offer quality services to our stakeholders.

often from the disciplines we recruit for. It’s also extremely important

We embrace it; our activities involve every single person working

within the Michael Page world. It is part of our everyday life, in

every ofﬁ ce, every country and in everything we do.

We encourage it; we not only practice what we preach, but

continually encourage our staff to offer ideas on how we could

operate more responsibly or implement our current policies more

effectively.

Our Diversity Steering Committee meets quarterly to review and

discuss new developments to engender an increasingly diverse

workforce both for us and our clients. These meetings are chaired

by our dedicated Head of Talent and attended by regional managing

directors and our Director of Legal and Human Resources.

to us to recognise that when we recruit, we are hiring our managers,

directors and indeed managing directors of the future.

Learning and Development - our future

One of the strengths of our organically grown company is that

our approach to the development of employees has mirrored our

expansion and thus become something we pride ourselves on.

We have a dedicated Learning & Development team networked

across our international operations; comprising specialists with

a total of over 100 years combined experience, many of whom

started initially in operational roles. The team work alongside

directors and managing directors who also act as trainers in all

our internal interventions.

Michael Page International

OUR CORE VALUES

Our ﬁ ve values are key to our success. They are the roots of Michael Page and the foundation of our methods, approach to business

and motivating our staff. More than mere words, we believe our values are the essence of our brand and instrumental to the way we

work and operate, day in, day out.

Take pride
This means taking pride in everything
we do, who we are and what we stand
for. We want every person who works
for us to be proud, not just of their
personal achievements, but of those
of the company too.

Be passionate
Without passion, how could we be so
successful? It’s a key value that we see
every day in our ofﬁ ces; from senior
managers to new recruits. It’s the ingredient
that ensures the very best service for our
clients and candidates. Ultimately, it’s
raw passion that has made us the strong,
dynamic company we are today.

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Make it fun
Of course we’re serious
about business, but we
recognise that having fun
is an important factor within
any ofﬁ ce environment.
We encourage it and have
learnt that the happier
our people are, the more
successful we’ll be.

Never give up
A value few possess, but is essential
in business, particularly ours. It means
never allowing yourself to be knocked
back by disappointment, refusing to
give up and showing real resilience.
‘When the going gets tough, the
tough get going’, is an apt phrase for
Michael Page.

Work as a team
Teamwork is essential in any
company and ours in no
exception. We embrace it
wholeheartedly and every
employee is committed to
working as part of a team.
Teamwork makes us stronger,
more efﬁ cient and the
success that follows is so
much more rewarding.

DIVERSITY AT MICHAEL PAGE
Our approach to diversity varies from country to country. In the UK, we have a dedicated UK Diversity Board. Consisting of senior

directors, the board regularly reviews, initiates and drives our policies forward. The group takes its responsibilities very seriously

and is totally committed to the cause. Determined to establish Michael Page as the leading authority on diversity within the

recruitment industry, they also work closely with our clients advising on how to implement their own diversity policies.

Know it
Our diversity proposition forms
part of our long-term global
plans for growth. It is an integral
part of our desire to consistently
offer quality services to our
stakeholders.

Embrace it
Our activities involve every
single person working within the
Michael Page world. It is part of
our everyday life, in every ofﬁ ce,
every country and in everything
we do.

Encourage it
We not only practice what
we preach, but continually
encourage our staff to offer ideas
on how we could operate more
responsibly or implement our
current policies more effectively.

employers’

forum on

disability

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On behalf of the children of Hong Kong and the world, thank
you for the invaluable support Michael Page International
has been giving to the St. Baldrick’s Day Events and its
beneﬁ ciary, the Children’s Cancer Foundation in Hong Kong.
The handsome donations raised in 2010 are presently funding
three Childhood Cancer Research Projects being conducted
in Hong Kong. With your continued participation in the
St. Baldrick’s Day Events, we will conquer kid’s cancer.

CHAIRMAN,
ST. BALDRICKS FOUNDATION

Operation Smile - China Medical Mission is grateful for the
generous contributions and support that the caring employees
at Michael Page International have shown over the years.
This commitment allows us to continue expanding our medical
activities throughout China, bringing new smiles to children
and families in need, and changing their lives forever.

MANAGING DIRECTOR,
OPERATION SMILE – CHINA MEDIAL MISSION

The Work & Learn scheme, unlike most student jobs, lets me
get really involved in an interesting business and it’s ﬂ exible
enough to ﬁ t around my study. It gives me the chance to
independently fund myself through university. Thanks to this
scheme, I’ve got more than just a degree on my CV; I’ve got
practical experience and commercial awareness. Not only is
this useful in the short-term, it’s also a great base on which to
build my skills for the future.

VICTORIA WOOLLEY,
MICHAEL PAGE WORK & LEARN UK

Pink Ribbon Day raises funds and awareness for breast cancer.
Our vital support services and research programs could not
be run without the generous support from organisations such
as Michael Page.

CORPORATE RELATIONSHIPS MANAGER,
CANCER COUNCIL NSW, AUSTRALIA

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Our L&D activities include:

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Induction training; diversity, customer service, behaviour,

culture, legal & policy for example

by Michael Page International plc or its employees that falls short

of these business principles. The aim of this policy is to ensure

that as far as possible, our employees are able to tell us about

any wrongdoing at work which they believe has occurred, or is

•

Business technology skills; preliminary and advanced

•

Maximising Sales; core skills in three day module sessions

likely to occur.

•

Workshops; Self management, advanced interviewing,

Bribery and Anti-Corruption

presentation skills for example

Bribery and corruption is, unfortunately, a feature of corporate

•

Virtual ofﬁ ce; Advanced skills training

and public life in many countries across the world. Governments,

•

Management development for both fee earning and

support staff; Operational management, ﬁ nancial/business

management, succession planning, coaching and

development, motivation,

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One to one coaching and mentoring

•

Leadership programme for directors incorporating external

360 degree feedback

•

Global director academy; Sharing global knowledge

•

Talent management workshops for global managing

director population

businesses and non-governmental organisations such as

Transparency International are working together to tackle the

issue, but despite our collective efforts, eradicating all forms of

bribery and corruption will take time. Michael Page International

plc therefore has a clear policy and we support our employees

to make decisions in line with our stated position.

Our corporate conduct is based on our commitment to acting

professionally, fairly and with integrity. Michael Page International

plc has adequate anti-corruption procedures in place and

maintains a zero-tolerance approach against corruption.

Facilitation payments are also not permitted within the Group’s

A fact we often use is that over 95% of our directors started as

operations.

trainees within the company and have been promoted internally.

This is testament to our commitment to individual development

and organic growth.

Retaining the most talented people

With a solid strategy of organic growth, and using this expertise

as a platform for growing into new markets, we have a strong

commitment to internal promotion and employee empowerment

which has continually helped us retain our very best people. At

the highest level, we want people who are immersed thoroughly

in our company culture and understand the intricacies of our

business. Retaining our best people is fundamental to our long-

term success and continuity.

Keeping in touch

•

Regular ‘state of the nation’ broadcasts to our staff from

our CEO

•

‘More’ – our internal intranet site offers discounts on a wide

range of brands

• Monthly newsletters and global updates

• Quarterly team building events

•

High Flyers events – premium international trips for high

performing consultants and managers

Whistleblowing

CHARITY AND COMMUNITY

The Group made charitable donations of £181k during the year

(2009: £190k).

Giving something back

We continue to offer all our employees the opportunity to be

involved in activities with a charity, community or environmental

cause. In some of our regions we call this a ‘More Giving Day’.

With the permission from their director, employees are free to

take a working day out of the ofﬁ ce in order to give something

back. Since we launched the scheme, we have committed more

than 600 days to a worthy cause. We have helped at hospices,

decorated schools, cleaned conservation areas, helped the

elderly with their gardening, provided man power at large charity

functions and even used our people skills to run workshops on

behalf of others. It’s another opportunity for us to show our values

but also to help the community.

Helping young people prepare for employment

For the last ﬁ ve years, we have been proactively involved with

several projects with youth employment schemes. We partnered

with The Brokerage, a charity which works with businesses in

the City of London and Docklands to provide work placement

opportunities for under-graduates from inner city schools. We

The Company is committed to maintaining the highest ethical

have provided internships for a number of these students during

standards and the personal and professional integrity of its

their summer holidays over the years, which have been a great

employees, suppliers, contractors and consultants.

success. In conjunction with Business In The Community, we

Michael Page International plc at all times conducts its business

with the highest standards of integrity and honesty. It expects all

employees to maintain the same standards in everything they do.

Employees are therefore encouraged to report any wrongdoing

have participated in The Prince’s Seeing is Believing project,

which is a high proﬁ le programme lead by The Prince Of Wales.

A recent event involved a number of business leaders visiting a

local college to interact with students with personal difﬁ culties.

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Another project saw us advise on life and employability skills for

In November a number of our men across Australia and New

the homeless.

We not only work with external associations that help young

people. We also launched our very own Work and Learn scheme

Zealand sported moustaches in support of ‘Movember’, an

initiative of the Cancer Council designed to raise funds and

awareness for men’s health.

in 2010. Unique not only for our industry, but also for many other

38 Michael Page employees from Spain completed a gruelling

FTSE listed businesses, Work and Learn offers university students

cycling challenge across Madrid in a bid to raise plenty of money

paid work within a Michael Page ofﬁ ce local to wherever they

for Children in Need.

are studying. In four hour blocks adapted around their timetable,

working for Michael Page will empower them with real commercial

Spotlight on the UK

exposure and experience in a professional services business.

As well as running a ‘Give As You Earn’ scheme, matching any

Charity partnerships around the world

We are proud of our commitment to different charities around

the world. Examples include:

In Hong Kong and Southern China, Michael Page volunteers

shaved their heads in aid of St. Baldrick’s, the world’s largest

volunteer-driven fundraising initiative for childhood cancer

research. This is now an annual event in our corporate giving

programme.

charitable donation made by an employee, our UK operations

also has an ofﬁ cial charity partner. In 2009, we set out to raise

£120,000 for Great Ormond Street Hospital Children’s Charity.

Employees undertook several activities, either on their own, as a

team or even department wide. Quiz nights, tuck shops, dress-

down days ensured a solid foundation of fundraising, however

large company organised events such as running the Yorkshire

Three Peaks Challenge for 100 plus staff helped the balance for

Great Ormond Street Hospital Children’s Charity. Now at the

end of our two year partnership, we have raised in excess of

Employees from Madrid sponsored a runner in Madrid’s marathon

who was promoting the Fundación Caico. The money collected

£220,000.

was given to the Children’s Hospital of Madrid, which battles

Seeing our efforts come to life

diseases with therapies and music.

Through our efforts for Great Ormond Street Hospital Children’s

Consultants from Asia completed the Great Wall Marathon in

Charity, we have fully funded a new adolescent recreation and

Beijing in support of Operation Smile, a charity that contributes

dining room in the Neurosciences Ward and an isolation bedroom

to surgery for children with facial deformities in China.

in the Cardiac Critical Care Unit, with both due for completion

Six employees from Central Europe and Benelux took part in the
Brussels 20km race “Run 4 Joyce” raising €2,800 in sponsorship
money. The money will go toward helping Joyce who was born

in Congo with a serious heart and lung disease. With the help

of Chain of Hope, the money will help fund Joyce’s treatment

in Brussels.

109 people from Michael Page in the UK took part in the Yorkshire

Three Peaks challenge, taking on three peaks in under 12 hours.

Some ran, some walked and some struggled, but £46,000 was

raised for Great Ormond Street Hospital Children’s Charity.

In addition, UK employees were fortunate enough to go along

to Silverstone to fundraise for Great Ormond Street Hospital

Children’s Charity, the ofﬁ cial charity of the F1 event. Michael

Page raised £7,500 through bucket collections.

Our Hong Kong and Southern China teams were again involved in

the annual sedan chair race, the main fundraising event for Hong

Kong’s Matilda International Hospital. Teams must carry a sedan

chair around the peak following one of two different routes.

In Japan, Michael Page consultants, friends and family annually

attend the ‘Run for the Cure for Breast Cancer’ around the

Tokyo Imperial Palace. We are also proud sponsors of the event.

The team also participated in the Financial Industry Tokyo annual

charity fundraising run in 2010, with the main benefactors being

Tokyo homeless charities.

in 2012.

ENVIRONMENT

Taking responsibility for our environment

Michael Page is a typical ofﬁ ce-based business. As such, our

main environmental impacts come from the running of our

businesses around the world, generating carbon emissions

though the consumption of gas and electricity, transport activities

and commuting, as well as ofﬁ ce-based waste such as paper

and toners.

As a company, we are acutely aware of our responsibility and work

hard to minimise our impact on the environment. In a number

of areas, we strive to make a difference and act responsibly in

terms of recycling, conservation and usage.

Along with a number of policies on how to use our resources

responsibly around the ofﬁ ces, we also have our own in-house

“MoreGreen” scheme, which offers staff the opportunity to

purchase ‘green’ products at reduced prices.

Reducing our carbon footprint

Michael Page International does not cause signiﬁ cant pollution,

however we fully recognise our responsibilities. The Board is

committed to improving the way in which our activities affect

the environment by:

Michael Page International

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Minimising the extent of the environmental impacts of

• Corporate Governance Statement (Directors);

operations within the Company’s sphere of inﬂ uence;

•

Striving to minimise any emissions of efﬂ uents in our

properties that may cause environmental damage;

• Remuneration Report (annual bonus plan);

•

Remuneration Report (Directors’ interests and share

ownership requirements);

•

Conserving energy through minimising consumption and

•

Notes to the Accounts (Note 18: Called-up share capital);

maximising efﬁ ciency;

and

•

Promoting efﬁ cient purchasing, which will both minimise

waste and allow materials to be recycled where

•

Shareholder Information and Advisers (Articles of

Association).

appropriate;

• Employing sound waste management practices;

•

Putting in place procedures and supporting information that

Each of the above sections is incorporated by reference into,

and forms part of, this Directors’ Report.

enables compliance with the law, regulation and code of

Information to Auditors

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practice relating to environmental issues; and

•

Monitoring environmental performance and making

improvements where possible.

HEALTH & SAFETY
We recognise that Health and Safety is an integral part of our

workforce. The day-to-day services we provide do not pose

great risk to either our employees or our clients. However, we

endeavour to maintain a safe and active environment. Each ofﬁ ce

is responsible for its own ﬁ re risk assessment and emergency

procedures and has an allocated Facilities and Health and Safety

Representative.

Each of the Directors at the date of approval of this report

conﬁ rms that:

1. so far as the Director is aware, there is no relevant audit

information of which the company’s auditor is unaware; and

2. the Director has taken all the steps that he/she ought to have

taken as a Director to make himself/herself aware of any

relevant audit information and to establish that the Company’s

auditor is aware of that information.

This conﬁ rmation is given and should be interpreted in accordance

with the provisions of s418 of the Companies Act 2006.

AUDITORS

The above is only a summary of the many CR activities in which we

are involved and the impact the Group has on its environment.

Deloitte LLP are willing to continue in ofﬁ ce and accordingly

resolutions to re-appoint them as auditor and authorising the

Further details of our CR activities and impacts are shown in

Directors to set their remuneration will be proposed at the

our main CR report, a copy of which can be downloaded from

forthcoming Annual General Meeting.

our website at:

http://investors.michaelpage.co.uk/corporate_governance

ANNUAL GENERAL MEETING

Supplier payment policy

It is the policy of the Group to agree appropriate terms and

conditions for transactions with suppliers (by means ranging from

standard written terms to individually negotiated contracts) and

The resolutions to be proposed at the Annual General Meeting

to be held on 20 May 2011, together with explanatory notes,

appear in the Notice of Meeting set out on pages 98 to 104 and is

available on our website at http://investors.michaelpage.co.uk.

that payment should be made in accordance with those terms

There are no resolutions that have been classed as special

and conditions, provided that the supplier has also complied

business.

with them.

By order of the Board

SHARE CAPITAL, RESTRICTIONS ON
TRANSFER OF SHARES AND OTHER
ADDITIONAL INFORMATION

To the extent not discussed in this Directors’ Report, information

relating to the Company’s share capital structure, restrictions on

the holding or transfer of its shares or on the exercise of voting

rights attached to such securities required by Section 992 of

the Companies Act 2006 is set out in the following sections of

the Annual Report:

Kelvin Stagg

Company Secretary
4 March 2011

Michael Page International

E CORPORATE
GOVERNANCE

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At the date of this report, the principal governance rules applying

principles of corporate governance as recommended in Section

to UK companies listed on the London Stock Exchange are

1 of the Code for the year ended 31 December 2010.

contained in the Combined Code on Corporate Governance

(the “Code”), as adopted by the Financial Reporting Council

(the “FRC”) in June 2008. In May 2010, the FRC published a new

code, the UK Corporate Governance Code (the “Governance

Code”), which will replace the Code for ﬁ nancial years beginning

on or after 29 June 2010. The FRC has stated that changes have

been made to help company boards to become more effective

and more accountable to shareholders.

The Board of Directors has a strong commitment to high standards

of corporate governance and has applied the main and supporting

Where applicable, the Company has already adopted principles

from the Governance Code. The Directors also seek to comply with

guidelines issued by institutional investors and their representative

bodies where it is practical to do so.

Compliance with the Code

The Directors consider that the Company has complied with all

the Code provisions set out in Section 1 of the Code throughout

the year ended 31 December 2010.

Michael Page International

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DIRECTORS

The Board and its operation

In July 2010, Sir Adrian Montague was appointed Chairman of

listed private equity ﬁ rm 3i.

Senior Independent Director

The Board of Michael Page International plc is the body responsible

for corporate governance, establishing policies and objectives, and

the management of the Group’s resources.

The Senior Independent Director is available to shareholders

when they may have issues or concerns where contact through

the normal channels of Chairman, Chief Executive or Finance

The Board comprises currently the Chairman, who is deemed

Director has either failed to resolve concerns, or contact is

to be independent and has no operational responsibilities,

deemed inappropriate.

three Executive Directors and four independent Non-Executive

Directors. Collectively, they have a broad balance of skills and

experience. The composition of the Board complies with Code

Provision A.3.2. The Board annually reviews the composition of

the Board and considers that there is an appropriate balance of

Executive and Non-Executive Directors on the Board.

The Board meets regularly throughout the year. It has a formal

schedule of matters reserved to it and delegates speciﬁ c

responsibilities to Committees. During the meetings, the Board

formally considers how and to whom matters covered at each

meeting should be communicated and actioned beyond the

Board. Decisions concerning matters of a more routine nature

are dealt with by management below Board level. The structure

of the Group facilitates the day-to-day running of the business

and enables efﬁ cient and effective communication of issues to

the Board when required. The Chairman and Non-Executive

Directors also met during the year without the Executive Directors

being present.

Each of the Committees has formal written terms of reference,

which were reviewed in 2010.

The Senior Independent Director is Hubert Reid.

Re-election of Directors

It has been Board policy that all Directors are subject to retirement

by rotation and re-election by the shareholders in accordance

with the Articles of Association, whereby one third of the Directors

retire by rotation each year. Subject to the Board being satisﬁ ed

with the effectiveness, independence and commitment of a

Non-Executive Director, there is no deﬁ ned limit regarding the

number of terms a Director may serve. All Directors are subject to

election by the shareholders at the ﬁ rst Annual General Meeting

following their appointment.

However, in accordance with the new Governance Code, the

Directors have resolved that they will all submit themselves for

annual re-election at each AGM. Accordingly, at the forthcoming

AGM to be held on 20 May 2011, Reg Sindall will offer himself

for election, with the remaining Directors offering themselves for

re-election. As a result of their annual performance evaluation,

the Board considers that their individual performances continue

to be effective, with each Director demonstrating commitment

The terms of reference for the Audit, Remuneration and

to their role. The Board is therefore pleased to support their

Nomination Committees are available on request and can be

re-election at the forthcoming Annual General Meeting.

found on the Group’s website. Their composition and the manner

in which they discharge their responsibilities are described in

this report.

The Executive Board, a Committee of the Board, meets formally

at least four times a year, and is responsible for assisting the

Chief Executive in the performance of his duties, including

development and implementation of strategy, operational plans,

policies, procedures and budgets.

These activities are performed at a regional level by four Regional

Boards, Committees of the Board, for the UK, EMEA, Asia Paciﬁ c

and the Americas. Each Regional Board meets at least four times

a year.

Chairman

The Chairman, Sir Adrian Montague, is responsible for the

leadership and efﬁ cient operation of the Board, setting its agenda

and ensuring all Directors provide an effective contribution. The

Chairman is also responsible for ensuring the provision of accurate

and timely information to the Board and effective communications

with shareholders.

It is the Group’s policy that the roles of Chairman and Chief

Executive are separate.

It is also the Board’s view that the comparatively long tenure

of some of the Directors has been key to the Board’s in-depth

understanding of the Group and its operation. Sir Adrian

Montague has served on the Board for more than nine years.

The Board does not believe that he has served for a period that

could materially interfere with his ability to act in the best interests

of the Group. The Board also believes that he has retained

independence of character and judgement and has not formed

associations with management (or others) that might compromise

his ability to exercise independent judgement or act in the best

interests of the Group.

Company Secretary

All Directors have access to the advice and services of the

Company Secretary, who is responsible for ensuring that Board

procedures and applicable rules and regulations are observed.

There is an agreed procedure for Directors to obtain independent

professional advice, if necessary, at the Company’s expense.

Board appointments

The Board follows formal and transparent procedures when

appointing directors. All candidates are interviewed by the

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Chairman and the Chief Executive, and, all candidates in the

Induction and training programme

ﬁ nal shortlist are interviewed by the Nomination Committee.

Evaluations of all candidates are discussed with all members

of the Nomination Committee and recommendations are

subsequently made to the Board.

Nomination Committee

On appointment to the Board, each Director discusses with the

Company Secretary the extent of training required and a tailored

induction programme to cover their individual requirements is then

compiled. Elements of the programme typically consist of meeting

senior management, site visits and attending internal conferences.

In addition, information is provided on the Company’s services,

The Nomination Committee comprises the Non-Executive

Group structure, Board arrangements, ﬁ nancial information, major

Directors and is chaired by Sir Adrian Montague. It is responsible

competitors and major risks. After an initial induction phase,

for making recommendations to the Board on new appointments,

updates are provided on a periodic basis.

as well as making recommendations as to the composition of

the Board generally, the balance between Executive and Non-

Performance evaluation

Executive Directors appointed to the Board and reviewing any

conﬂ icts of interest. The terms of reference of the Nomination

Committee can be found on our website.

The Board, as part of its commitment to ensuring effectiveness

and evaluating its performance, together with that of its Directors

and Committees, conducted an internal review comprising

During the year, the Committee recommended the appointment

a questionnaire concerning all aspects of procedure and

of a Non-Executive Director. An external search ﬁ rm was engaged

effectiveness.

and a detailed role proﬁ le was agreed by the Committee before

a shortlist of suitable candidates was prepared to go forward to

an interview process. This resulted in the recommendation of

the appointment of Reg Sindall. Terms and conditions for Reg

Sindall and the other Non-Executive Directors are available for

inspection at the Company’s registered ofﬁ ce.

Following completion of the questionnaires, the Chairman met

with the individual Directors to discuss their views and to give

feedback on their performance. The results of the evaluation were

reported to the Board and where areas of improvement have

been identiﬁ ed, actions have been agreed upon and training will

be provided where required.

Fig. 1. Attendance at Board Meetings (Committee attendance shown for Committee members only)

Total meetings

Meetings attended

Executive

Steve Ingham

Charles-Henri Dumon

Stephen Puckett

Total meetings

Meetings attended

Non-Executive

Sir Adrian Montague CBE

Ruby McGregor-Smith

Dr Tim Miller

Hubert Reid

Reg Sindall (appointed 14 December 2010)

Michael Page International

Board

Audit
Committee

Remuneration
Committee

Nomination
Committee

Hubert Reid, as the Senior Independent Director, led a meeting of

Sindall, who took over the Chairmanship from Dr Tim Miller.

the Non-Executive Directors to appraise the performance of the

Chairman. The meeting took into account any comments made by

the Executive Directors. This evaluation is carried out annually.

The Committee reviews the Group’s policy on the Chairman’s,

Executive Directors’ and senior executives’ remuneration and

terms of employment, makes recommendations upon this,

Following the release of the Governance Code, an external Board

along with the speciﬁ c level of remuneration to the Board,

evaluation will now be carried out every three years.

and also approves the provision of policies for the incentivisation

Succession planning

of senior employees, including share schemes.

The Committee meets at least twice a year and is also attended by

One of the basic premises behind the strategic development

the Chief Executive, except when his own remuneration is under

of the Michael Page business, is that growth is organic rather

consideration. The Remuneration Report includes information on

than through acquisitions of companies or hiring senior people

the Directors’ service contracts. The terms of reference of the

in non-support roles. In order to achieve this organic growth,

Remuneration Committee can be found on our website.

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we require good people. It is therefore one of the fundamental

principles and a major part of the philosophy of the Company

that we train and develop our own people. This approach creates

opportunities for career progression and helps us attract and

retain high calibre individuals.

Due to this philosophy of nurturing our own talent, succession

planning is inherently a key part of the business process.

We do not make promotions or move people within the business

unless there is a clear successor for the vacant position. It is,

therefore, one of the key responsibilities of all levels of management,

and not just the Board, to have a clear plan of development for

their direct reports.

Conﬂ icts of interest

The Report of the Remuneration Committee can be found on

pages 48 to 55 of the Annual Report.

ACCOUNTABILITY AND AUDIT

Audit Committee

The Audit Committee comprises the independent Non-Executive

Directors and is chaired by Ruby McGregor-Smith. The Committee

members have broad experience and knowledge of ﬁ nancial

reporting. Their relevant qualiﬁ cations and experience are shown

in their biographies on the Board of Directors pages 32 and 33.

The Board believes that Ruby McGregor-Smith and Hubert Reid

have recent and relevant ﬁ nancial experience. The other members

The Company has implemented robust procedures, in line with

of the Audit Committee, Dr Tim Miller and Reg Sindall both have

the Companies Act 2006, requiring Directors to seek appropriate

wide experience in regulatory and risk issues.

authorisation prior to entering into any outside business interests.

The Committee met nine times in 2010 to fulﬁ l its duties and

In all cases where a potential conﬂ ict is identiﬁ ed, it is Board policy

included attendance by the external auditor where required. The

that the Director in question is not involved in any discussion of

Committee also met with the external auditors during the year

the area or issue giving rise to the conﬂ ict.

without the presence of management.

During the course of the year, the Board reviewed and authorised,

In 2010, the Audit Committee discharged its responsibilities as

in accordance with the Company’s Articles of Association, a small

set out in the terms of reference, which can be found on our

number of external directorships and other business interests held

website, www.investors.michaelpage.co.uk. Its principal tasks

by individual directors. However, none were regarded as being of

are to ensure the integrity of the Company’s Financial Reporting

such signiﬁ cance as to give rise to a conﬂ ict of interest.

process, review the effectiveness of the Group’s internal controls,

All Directors are aware of their continuing obligation to report

any new interests or changes in existing interests that might

amount to a possible conﬂ ict of interest in order that these may be

considered by the Board and appropriate authorisations given.

Attendance at meetings

internal audit and risk management function, review the scope of

the external audit, consider issues raised by the external auditor,

and review the half-yearly and annual accounts before they are

presented to the Board, focusing in particular on accounting

policies and compliance, and areas of management judgement

and estimates, as well as ensuring the independence of the

external auditor and the provision of additional services to the

The number of meetings of the Board and Committees and

Company.

individual attendance by the members of the Committees only

are shown in Fig. 1 left.

Objectivity and independence of external auditor

REMUNERATION

Remuneration Committee

The Remuneration Committee comprises the independent Non-

Executive Directors and, since 21 January 2011, is chaired by Reg

Deloitte is employed to perform work in addition to their statutory

duties where it is felt that they are best placed to carry out the

engagement as a result of their being the Group’s auditor. All other

work is awarded on the basis of competitive tender.

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The objectivity and independence of the external auditor is

It is also the Committee’s policy to consider whether there should

safeguarded by:

a. obtaining assurances from the external auditor that adequate

policies and procedures exist within its ﬁ rm to ensure the ﬁ rm

and its staff are independent of the Group by reason of family,

be an audit tender process and whether using auditors from one

audit network continues to enhance the quality of the audit. The

Committee reviews the past service of the auditors who were

ﬁ rst appointed in 1997.

ﬁ nance, employment, investment and business relationships

The Committee has also considered the likelihood of a

(other than in the normal course of business);

withdrawal of the auditor from the market and noted that there

b. enforcing a policy concerning the provision of non-audit

services by the auditor which governs the types of work:

from which the external auditor is excluded;

ii. for which the external auditor can be engaged without

referral to the Audit Committee; and

iii. for which a case-by-case decision is required, which

includes all engagements over certain fee limits.

The following areas are considered to be unacceptable for

the external auditor to undertake:

•

selection, design or implementation of key ﬁ nancial

systems;

•

maintaining or preparing the accounting books and

records or the preparation of ﬁ nancial accounts or other

key ﬁ nancial data;

are no contractual obligations to restrict the choice of 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’ fulﬁ lment 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.

• provision of outsourced ﬁ nancial systems;

Internal control

•

provision of outsource operational management

functions;

The responsibilities of the Directors in respect of internal control

are deﬁ ned by the Financial Services Authority’s Listing Rules

• recruitment of senior ﬁ nance or other executives;

that incorporate a Code of Practice known as the Combined

• secondment of senior ﬁ nance or other executives;

• provision of internal audit services;

• valuation services or fairness opinions; and

•

any services speciﬁ cally prohibited to be provided by a

Code, which requires that Directors review, at least annually,

the effectiveness of the Group’s system of internal controls.

This requirement stipulates that the review shall cover all material

controls including operational, compliance and risk management,

as well as ﬁ nancial. Internal Control Guidance for Directors on

listed company’s external auditors under UK regulations.

the Combined Code (“the Turnbull Report”) was published in

The following criteria also need to be met before the external

auditors are contracted to provide such services:

•

the ﬁ rm has the necessary skills and experience to

undertake the work;

•

there are no potential conﬂ icts that may arise as a result

of carrying out this activity;

•

the external audit ﬁ rm is subject to the company’s

normal tendering processes; and

•

in addition to the normal authorisation procedures and

prior to inclusion in a tender, approval has to be given

by the Group Finance Director and, if the fee exceeds a

certain level, the Audit Committee.

September 1999, updated October 2005 and sets out best

practice on internal audit for UK listed companies and assists

them in applying Section C.2 of the Combined Code.

The Board has assessed existing risk management and internal

control processes during the year ended 31 December 2010 in

accordance with the Turnbull guidance. The Board believes it has

the procedures in place such that the Group has fully complied

for the ﬁ nancial year ended 31 December 2010 and at the date

of this report.

The Directors are responsible for the Group’s system of internal

ﬁ nancial and operational controls, which are designed to meet

the Group’s particular needs and aim to safeguard Group assets,

ensure proper accounting records are maintained and that the

c. enforcing a policy of reviewing all cases where it is proposed

ﬁ nancial information used within the business and for publication

that a former employee of the external auditor be employed

is reliable.

by the Group in a senior management position; and

Any system of internal control can only provide reasonable, but

d. monitoring the external auditors’ compliance with applicable

not absolute, assurance against material misstatement and loss.

UK ethical guidance on the rotation of audit partners.

Key elements of the system of internal control are as follows:

Michael Page International

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• Group organisation.

•

internal audit activities.

The Board of Directors meets at least ten times a year,

The internal audit function is an independent, dedicated

focusing mainly on strategic issues, operational and ﬁ nancial

Internal Audit team, comprising the Head of Internal Audit

performance. There is also a deﬁ ned policy on matters

and an Internal Auditor. Businesses are visited on a risk- based

reserved strictly for the Board. The Managing Director of

and rotational basis to assess the effectiveness of controls

each operating division is accountable for establishing and

in mitigating speciﬁ c risks. In addition, risks are regularly

monitoring internal controls within that division;

reviewed and changes are made to the risk proﬁ le where

• annual business plan.

necessary. All internal audit activities are reported to the

Audit Committee. During the year, the Board monitored and

The Group has a comprehensive budgeting system with an

reviewed the effectiveness of the internal audit activities.

annual budget approved by the Board;

• quarterly reforecasting.

The Group prepares a full-year reforecast on a quarterly basis

showing, by individual businesses/disciplines, the results to

date and a reforecast against budget for the remaining period

up to the end of the year;

• ﬁ nancial reporting.

Detailed monthly reports are produced showing comparisons

of results against budget, forecast and the prior year, with

performance monitoring and explanations provided for

The Board has applied principle C.2 of the Combined Code

and conﬁ rms that there is an ongoing process for identifying,

evaluating and managing the signiﬁ cant risks faced by the

Group and that the processes have been in place for the year

under review and up to the date of approval of the annual

report and accounts.

RELATIONS WITH SHAREHOLDERS

Board contact with shareholders

signiﬁ cant variances. The Group reports to shareholders on

Communications with shareholders are given a high priority. The

a quarterly basis;

• Audit Committee.

main contact between the Board and shareholders is through the

Chief Executive and the Group Finance Director. They undertake

two major investor “roadshows” each year in February/March and

There is an established Audit Committee whose activities are

August/September, in which numerous one-to-one meetings with

previously described;

• ﬁ nancial and operational controls.

Individual operations complete an annual controls self

assessment and certiﬁ cation statement. Each operational

shareholders take place. The outcome of these meetings and the

views of shareholders are relayed back to the Board by the corporate

brokers, at the end of each roadshow. The Group’s corporate

brokers also report monthly to the Board on broking activity

during the month and any issues that may have been raised

manager, in addition to the ﬁ nance function for that operation,

with them.

conﬁ rms the adequacy of their systems of internal control and

compliance with Group policies. The statement also requires

the reporting of any signiﬁ cant control issues, including

suspected or reported fraud, that have emerged so that

Shareholders are invited to attend the Annual General Meeting

where they are able to discuss any concerns with the Non-

Executive Directors.

areas of Group concern can be identiﬁ ed and investigated

When requested by shareholders, individual matters can

as required;

• risk management.

Identiﬁ cation of major business risks is carried out at Group

level in conjunction with operational management and

be discussed with the Chairman or Senior Independent

Director. The Group also has a website with an investor section

(http://investors.michaelpage.co.uk) that contains Company

announcements and other shareholder information.

appropriate steps taken to monitor and mitigate risk;

Annual Report

• public interest disclosure policy (whistleblowing).

The Annual Report is designed to present a balanced and

The audit committee has reviewed arrangements by which

staff of the company may, in conﬁ dence, raise concerns about

possible improprieties in matters of ﬁ nancial reporting or other

matters. Arrangements are in place for the proportionate and

understandable view of the Group’s activities and prospects.

The Business Review provides an assessment of the Group’s

affairs and position. The Annual Report and Interim Report are

sent to all shareholders on the Register.

independent investigation of such matters and for appropriate

The Directors acknowledge their responsibility for the preparation

follow-up action; and

of the Annual Report. The Statement of Directors’ Responsibilities

is shown on page 105. A statement by the auditors about their

reporting responsibilities is shown in the Independent Auditors’

Report on page 57.

Michael Page International

T REMUNERATION

REPORT

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Michael Page International

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DEAR SHAREHOLDER

As the new Chairman of Michael Page’s Remuneration Committee I am pleased to present the Committee’s Remuneration Report for

2010 for which we will be seeking approval from shareholders at our AGM in May.

Following my appointment, the Remuneration Committee has started to undertake a review of the Company’s current remuneration

arrangements to ensure that they remain appropriate in the current environment and are well aligned with the business strategy and

creation of shareholder value. It is intended that a revised remuneration structure will be developed during 2011, to be implemented in

2012. In doing so, the Remuneration Committee has established a number of key principles which it intends will form the basis of the

revised remuneration structure. These key principles have been outlined below.

Business context

Following a very challenging year in 2009, with signiﬁ cant fall in demand in our key markets, the Company took a number of actions

to reduce its cost base, whilst retaining the existing platform of business disciplines in established countries and cities, and cautiously

invested for the future.

Economic recovery remained uncertain during 2010, and as such we have continued to operate in a difﬁ cult environment. However, as

a result of the actions taken over the last two years the Company has continued to perform strongly, delivering an operating proﬁ t of

£71.5m (more than three times reported proﬁ t for 2009) and delivering signiﬁ cant value to shareholders with a 50% increase in share

price during 2010.

The Committee’s intention is that the future remuneration structure will support the Company’s continued growth over both the medium

and longer term whilst becoming further aligned with the interests of shareholders.

Principles of the review

The current remuneration structure was established when Michael Page was appreciably smaller. It has served the business well in some

respects, being strongly aligned to proﬁ t and based on a simple and transparent structure.

However, shareholder representative bodies have expressed concerns about the structure of the arrangements and that some of the

share elements of the package are not based on longer term performance. As economic volatility continues, the Board is also concerned

that the current highly geared package is signiﬁ cantly more volatile than the underlying business, which may reduce the ability to retain

the strong management team. This management continuity is critical for a business which has built its success on organic growth and

promotion from within.

The principles we intend to apply to our review of remuneration are:

• Moderate the volatility in remuneration arrangements so they are more in line with business performance;

• Encourage active investment in Company shares linked to performance;

• Establish longer term incentives less dependent on short-term performance.

The intention is that the revised structure will take due account of the relevant guidelines regarding remuneration policy published by the

ABI and other representatives of institutional shareholders.

Reg Sindall

Remuneration Committee Chairman
7 April 2011

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This report has been prepared in accordance with Schedule 8

Additional details of service contracts are shown on page 55.

to The Accounting Regulations under the Companies Act 2006.

The report also meets the relevant requirements of the Listing Rules

of the Financial Services Authority and describes how the Board

has applied the principles relating to Directors’ remuneration in the

Combined Code. As required by the Act, a resolution to approve

the report will be proposed at the Annual General Meeting of the

Company at which the ﬁ nancial statements will be approved.

The remuneration agreed by the Committee for the Executive

Directors contains the following elements: a base salary and

beneﬁ ts, an annual bonus, share plan awards and pension

beneﬁ ts. The remuneration of the Non-Executive Directors is

determined by the Board. The Non-Executive Directors do not

receive any other beneﬁ ts, other than out-of pocket expenses,

from the Group, nor do they participate in any of the bonus or

Scope and membership of Remuneration Committee

share schemes.

The Remuneration Committee, which meets not less than three

times a year, comprises the independent Non-Executive Directors.

The Chief Executive attends the meetings as required, except when

his own remuneration is under consideration. The purpose of the

Remuneration Committee is to review, on behalf of the Board,

the remuneration policy for the Chairman, Executive Directors and

other senior executives and to determine the level of remuneration,

incentives and other beneﬁ ts, compensation payments and the

terms of employment of the Executive Directors and other senior

executives. It seeks to provide a remuneration package that

aligns strongly the interests of Executive Directors with those of

the shareholders. Reg Sindall, who joined the Main Board and its

Committees on 14 December 2010, was appointed as Chairman

of the Remuneration Committee on 21 January 2011, replacing

Dr Tim Miller. The Board would like to thank Dr Tim Miller for his

valuable contribution in this role for the past ﬁ ve years.

The Committee has continued to review the remuneration of

the Executive Directors with regard to the need to maintain

a balance between the constituent elements of salary,

annual bonus and long-term incentives and other beneﬁ ts.

The following sections provide details of the Company’s

remuneration policy during 2010. It is the intention that the

Remuneration Committee will review the remuneration structure

during 2011.

BASE SALARY AND BENEFITS

The Committee establishes salaries and beneﬁ ts by reference to

those prevailing in the employment market generally for Executive

Directors of companies of comparable status and market value,

taking into account the range of incentives described elsewhere in

this report, including a performance bonus. Reviews of such base

salary and beneﬁ ts are conducted annually by the Committee.

The Group operates a policy of providing below median salaries,

with the balance of the package provided through incentives

aligned with Group performance and shareholder value to ensure

a total remuneration package geared to performance.

As the Remuneration Committee is currently reviewing the

structure of the Executive Directors’ remuneration packages,

no changes have been made to their current base salaries or

It receives advice from independent remuneration consultants,

beneﬁ ts.

Deloitte, and makes comparisons with similar organisations.

Deloitte are also the Group’s auditors and have provided

remuneration services in compliance with the Ethical Standards

ANNUAL BONUS PLAN

of the Auditing Practices Board. Both Deloitte and the Group

Annual bonuses for the Executive Directors are based on the

are comfortable that appropriate measures and controls are

division of a pool of proﬁ ts earned during the ﬁ nancial year.

in place to ensure that there is no conﬂ ict arising by providing

In 2010, the bonus pool for Executive Directors was equal to

both these services. No Directors, other than the members of

3.85% of proﬁ ts earned above a threshold equal to half of targeted

the Remuneration Committee, provided material advice to the

proﬁ ts for the year. If proﬁ ts exceed 1.1 times the targeted level,

Committee on Directors’ remuneration.

REMUNERATION POLICY

The objective of the Group’s remuneration policy is to attract

and retain management with the appropriate professional,

managerial and operational expertise necessary to realise the

Group’s strategic objectives, as well as to establish a framework

for remunerating all employees.

It is the Company’s policy that all Executive Directors’ service

contracts contain a 12 month notice period.

The Non-Executive Directors do not have service contracts with

the Company. They are appointed for an initial three year term

and thereafter may be reappointed for a further two terms of

three years, subject to re-election at Annual General Meetings.

then an additional 1.3% of proﬁ ts earned above the targeted level

is added to the bonus pool. The Remuneration Committee retains

the discretion to review this arrangement and set different rates

and thresholds as it deems appropriate for the business.

Proﬁ ts are deﬁ ned as Group proﬁ t before taxation, exceptional

items and before the Executive Directors’ annual bonus charges

and charges or credits resulting from the Incentive Share Plan

described below or other share option grants.

The bonus pool calculation is not entirely formulaic as the

Committee has the ability to vary the pool both up and down,

by up to 10%, to reﬂ ect its view of the performance of the

Company relative to its directly comparable peers. Reﬂ ecting the

strong recovery of the business and its performance compared

to the peer group in the year, the Committee increased the 2010

bonus pool by 10%.

Michael Page International

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The targeted level of proﬁ ts for 2010 was £46.8m and was set at

Two thirds of these shares (“Deferred Share Awards”) are

the end of 2009 by reference to market expectations and internal

subject to a three-year deferral period, during which they will be

forecasts at that time. The Committee retains the discretion to

forfeited if the relevant director or senior employee leaves, other

review this arrangement and to set different rates and thresholds

than in “compassionate circumstances”. The remaining third

as it deems appropriate for the business.

(“Performance Share Awards”) are also deferred for three years,

Unlike all other employees who receive their annual bonuses

in cash, the Executive Directors’ cash element of their annual

but are subject to earnings per share (“EPS”) growth targets over

the three year period.

bonus is restricted to a multiple of salary. In the event that the

Performance share awards of up to 50% of a Director’s or senior

Executive Director’s annual bonus entitlement is greater than

employee’s salary only vest if EPS grows by an average of 5%

150% of salary, only an amount equal to 150% of the executive’s

over the growth in UK RPI per annum over the three year period.

salary is paid in cash. To reward service over a longer period,

Any excess between 50% and 75% of salary only vests to the

any amount of the bonus pool above 150% of the individual’s

extent that EPS grows by 7.5% over the growth in UK RPI per

salary level is deferred, paid into an employee beneﬁ t trust and

annum over the three year period. Finally, to the extent that the

invested in the Company’s shares with no matching investment

performance share award is greater than 75% of an executive’s

by the Company. Such shares are reserved for the executive

salary, the hurdle is 10% over the growth in UK RPI per annum

and vest in equal annual tranches over two years, normally

over the three year period. If awards do not vest after three years,

so long as the executive is still in employment at that time.

they automatically lapse.

The Income Statement for the year carries a charge for the

Directors’ annual bonus paid in cash while the deferred amount

is charged in subsequent years until the shares vest. Based on

the 2010 results, the aggregate amount deferred for the three

Executive Directors is £1.8m (2009: £nil).

There was no award in 2010. Based on the 2010 results, for

awards to be made in 2011, the total award available was

£5,011,080. Of this, £1,503,324 (30%) was allocated to the

Executive Directors. Awards totalling £3,375,000 will be made

to senior employees. Details of the awards made to the Executive

The intention is that the Annual Bonus Plan will operate as normal

Directors are disclosed on page 53.

in 2011. The target will be set for 2011 by reference to market

expectations and internal forecasts and will be disclosed in next

year’s Remuneration Report.

LONG-TERM INCENTIVES

The performance criteria on the Performance shares and

Performance share options awarded under the Incentive Share

Plan in 2008 were tested at the end of 2010 and did not meet the

EPS growth criteria. As no retesting after the initial vesting period

is permitted, these awards have now lapsed in full.

The Company currently operates two forms of long-term incentive

Executive Share Option Scheme (ESOS)

for Executive Directors and senior management:

Incentive Share Plan (ISP)

The ISP, which was approved by shareholders in 2003, is funded

with a percentage, currently 6%, of Group proﬁ ts. Not more

than 30% of this amount is available for awards to the Executive

Directors, the balance being available for awards to senior

employees. Awards vest after a three year period, with vesting

of one-third of the award subject to achievement of additional

performance conditions. Group proﬁ ts are deﬁ ned as Group proﬁ t

before taxation, before exceptional items and charges or credits

resulting from the plan or other share option grants. Awards under

the ISP are satisﬁ ed in shares of the Company, which are market

purchased and held by the employee beneﬁ t trust.

The Committee retains the discretion to review the proportion of

proﬁ ts dedicated to the ISP in the light of the growth in the size

of the Company, its proﬁ tability and the number of Executive

Directors.

This was established on ﬂ otation in 2001. Vesting of share option

awards made under the scheme is subject to performance

conditions. For awards made between 2002 and 2008,

a growth in earnings per share of at least 3% per annum above

the growth in the UK Retail Price Index (RPI), over the three year

performance period is required for vesting. There were no awards

under the plan in 2009. In 2010, Executive Directors’ awards

had a performance condition based on 2012 PBT, where the

vesting percentage is on a straight-line basis from 0% at £48m

to 100% at £66m. The Executive Directors and senior employees

are eligible to participate in the ESOS. No payment is required

on the grant of an option and no share options are granted at a

discount. Beneﬁ ts received under the ESOS are not pensionable.

Retesting after the initial vesting period is not permitted for

any grants awarded in 2004 and subsequent years. As, this

year, the Executive Directors will receive awards under the ISP,

no awards will be made to the Executive Directors under the

ESOS (2009: 400,000 options).

The performance criteria on the options awarded under the

Executive Share Option Scheme in 2008 was tested at the end

of 2010 and did not meet the EPS growth criteria. As no retesting

after the initial vesting period is permitted, these awards have

now lapsed in full.

Michael Page International

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EMOLUMENTS

The aggregate emoluments, excluding pensions, of the Directors of the Company who served during the year were as follows:

2010

Executive

Steve Ingham (Note 1)

Charles-Henri Dumon (Note 2)

Stephen Puckett

Non-Executive

Sir Adrian Montague CBE

Reg Sindall

Ruby McGregor-Smith

Dr Tim Miller

Hubert Reid

Total

2009

Executive

Steve Ingham (Note 1)

Charles-Henri Dumon (Note 2)

Stephen Puckett

Non-Executive

Sir Adrian Montague CBE

Stephen Box

Ruby McGregor-Smith

Dr Tim Miller

Hubert Reid

Total

Salary
and fees
£’000

Beneﬁ ts
(Note 3)
£’000

Annual
Bonus
£’000

Deferred
Annual Bonus
£’000

Incentive
Share Plan
(note 4)
£’000

380

395

290

130

–

570

435

–

689

549

–

334

–

Total
£’000

2,007

1,785

1,636

130

1,335

134

1,440

1,787

1,002

5,698

Salary
and fees
£’000

Beneﬁ ts
(Note 3)
£’000

Annual
Bonus
£’000

Deferred
Annual Bonus
£’000

Incentive
Share Plan
£’000

371

357

283

110

–

413

315

–

1,272

116

1,043

–

Total
£’000

811

739

620

110

2,431

Notes to the emoluments:

1. Steve Ingham is the highest paid director.

2. Charles-Henri Dumon’s salary and beneﬁ ts are paid in Swiss Francs. In line with the other Executive Directors, he received a 2.5% increase in

salary in 2010 and therefore the additional change in reported salary is due to movements in foreign exchange.

3. Beneﬁ ts include, inter alia, items such as company car or cash alternative, fuel and medical insurance.

4. Represents the non-performance proportion of the Incentive Share plan to be awarded in March 2011.

PENSION BENEFITS

Executive Directors are eligible to participate in the Group pension plan which is a deﬁ ned contribution scheme. In 2010, each Executive

Director received a pension contribution equal to 25% (2009: 20%) of their base salary or a cash alternative.

Pension contributions

Steve Ingham

Charles-Henri Dumon

Stephen Puckett

2010
£’000

2009
£’000

Michael Page International

DIRECTORS’ INTERESTS AND SHARE OWNERSHIP REQUIREMENTS

It is Michael Page policy that Executive Directors are required to build and hold, as a minimum, a direct beneﬁ cial interest in the Company’s

ordinary shares equal to their base salary. As at 31 December 2010, all Executive Directors complied with this requirement.

The beneﬁ cial interests of the Directors who served during the year and their families in the ordinary shares of the Company of 1p each

are shown below. For the Directors in ofﬁ ce at the balance sheet date there has been no change in these interests from 31 December

2010 to 4 March 2011.

Ordinary
shares of 1p

At 1 January
2010

Steve Ingham

Direct Holding

Charles-Henri Dumon

Direct Holding

Stephen Puckett

Direct Holding

1,555,439

1,230,107

720,016

Transferred in year

ISP

52,684

89,702

52,683

ABP

204,864

275,945

161,996

Total
transferred in
year

257,548

365,647

214,679

Disposal in
year

(600,000)

(967,754)

(500,000)

At 31
December
2010

1,212,987

628,000

434,695

1. Steve Ingham transferred 52,684 shares from the Incentive Share Plan and 204,864 from the Deferred Annual Bonus Plan into his

direct holding and also disposed of 600,000 out of his direct holding in the year.

2. Charles-Henri Dumon transferred 89,702 shares from the Incentive Share Plan and 275,945 from the Deferred Annual Bonus Plan

into his direct holding and also disposed of 967,754 out of his direct holding in the year.

3. Stephen Puckett transferred 52,683 shares from the Incentive Share Plan and 161,996 from the Deferred Annual Bonus Plan into

his direct holding and also disposed of 500,000 out of his direct holding in the year.

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No other Director has a holding in the Company.

INCENTIVE SHARE PLAN

Details of awards made under the Incentive Share Plan that remain outstanding at 31 December 2010 are as follows:

Total award at 1 January 2010

Performance
shares

Non-
performance

shares Total shares

Vested
in year

Lapsed in
year

Total award at 31 December 2010

Performance
shares

Non-
performance

shares Total shares

Lapsing in
March 2011

Performance
shares

Steve Ingham

Charles-Henri Dumon

Stephen Puckett

306,198

612,393

918,591

(89,702)

(44,851)

918,591

(89,702)

(44,851)

918,591

(89,702)

(44,851)

261,347

522,691

784,038

(107,562)

784,038

(107,562)

784,038

(107,562)

1. There were no awards made under the Incentive Share Plan in 2010. The market value of the shares vested in the year at the date

of award was 285p.

2. The total value of awards at 31 December 2010 for each individual Director in ofﬁ ce at the balance sheet date is £4,351,411 and is

calculated using the closing market price of the Company’s ordinary shares at 31 December 2010 of 555p.

3. Both the Performance shares and the Performance options awarded under the Michael Page Incentive Share Plan in 2008 did not

meet their vesting criteria and have lapsed as at the end of 2010.

DEFERRED ANNUAL BONUS

As described on pages 50 and 51, in the event that the Executive Directors’ bonus entitlement is greater than 150% of salary,

the excess above the individual’s salary is deferred, invested in the Company’s shares and delivered to the individual in two equal tranches

on the ﬁ rst two anniversaries of the grant. In respect of 2010, a total of £1.8m will be awarded to the Executive Directors in March

2011, representing this excess, and has been included in the emoluments table for the year as shown on page 52. There has been no

charge made to the income statement in the year for the deferred element of the 2010 annual bonus. The charge for the year will be

spread over future periods as described in the accounting policies in Note 1 on page 69. For full descriptions of the vesting conditions,

see “Annual Bonus Plan” on pages 50 and 51.

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Details of awards made under the deferred Annual Bonus Plan that remain outstanding at 31 December 2010 are as follows:

Steve Ingham

Charles-Henri Dumon

Stephen Puckett

Total award at 1 January 2010
(shares)

Vested in year
(shares)

Total award at 31 December 2010
(shares)

492,078

389,709

(348,963)

(275,945)

143,115

113,764

The average market value of the shares vested in the year at the date of award was 244.9p.

BENEFICIAL INTERESTS

The beneﬁ cial interests of the Executive Directors who served during the year and their families in share options of the Michael Page

International plc Executive Share Option Scheme at 31 December 2010 were as follows:

Steve Ingham

Charles-Henri Dumon

Stephen Puckett

Date of Grant

At
1 January 2010
(shares)

At
31 December 2010
(shares)

Granted in year

Exercise price
(pence)

Period of exercise

2001

2005

2010

2001

2005

2010

2001

2005

2010

93,471

50,000

–

140,209

50,000

–

400,000

–

400,000

93,471

50,000

–

400,000

93,471

50,000

400,000

140,209

50,000

400,000

93,471

50,000

400,000

175

190.75

381.5

175

190.75

381.5

175

190.75

381.5

2004-2011

2008-2015

2013-2020

2004-2011

2008-2015

2013-2020

2004-2011

2008-2015

2013-2020

The market price of the shares at 31 December 2010 was 555p with a range during the year of 346.4p to 565.5p.

TOTAL SHAREHOLDER RETURN (TSR)

The graph below shows Total Shareholder Return (TSR) relative to a base index of 100 for the Group and the FTSE Support Services

index which, as it is the sector in which the Company operates, is considered the most appropriate comparator index in the absence

of a more directly representative recognised index. A comparison with the FTSE 250 index is also given.

Versus FTSE 250 and FTSE Support Services

31 Dec 2006

31 Dec 2007

31 Dec 2008

31 Dec 2009

31 Dec 2010

250

200

150

100

227.31

150.75

132.92

169.89

130.21

123.95

127.01

111.70
109.57

83.97
81.43
78.55

152.24

118.33

107.90

FTSE250

FTSE Support Services

Michael Page International

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OUTSIDE APPOINTMENTS

The Remuneration Committee recognises that Non-Executive Directorships have signiﬁ cant beneﬁ t in broadening executives’ experience.

Subject to review in each case, the Remuneration Committee’s general policy is that Executive Directors may accept Non-Executive

Directorships with other companies, so long as there is no conﬂ ict of interest and their effectiveness is not impaired. The executives are

permitted to retain any fees for their service.

SERVICE CONTRACTS

A general review of all the Executive Directors’ contracts was carried out during 2010 to ensure they remain legally current and a number

of minor amendments were made. All Executive Directors’ service contracts contain a twelve month notice period. The service contracts

also contain restrictive covenants preventing the Directors from competing with the Group for six months following the termination of

employment and preventing the Directors from soliciting key employees, clients and candidates of the employing company and Group

companies for twelve months following termination of employment. On termination, any compensation payments due to a Director are

calculated in accordance with normal legal principles, including mitigation, as appropriate.

Contract
date

Unexpired term at
31 December 2010

Notice period

Provision for
compensation
on early termination

Other termination
provisions

Executive

Steve Ingham

31/12/10

no speciﬁ c term

12 months

Charles-Henri Dumon

13/06/03

no speciﬁ c term

12 months

Stephen Puckett

Non-Executive

31/12/10

no speciﬁ c term

12 months

Sir Adrian Montague CBE (Note 1)

27/02/10

26 months

Ruby McGregor-Smith (Note 2)

Dr Tim Miller (Note 4)

Hubert Reid

Reg Sindall (Notes 3 & 4)

23/05/10

15/08/08

25/02/09

14/12/10

29 months

8 months

14 months

36 months

None

12 months salary plus other
contractual beneﬁ ts
12 months salary plus other
contractual beneﬁ ts
12 months salary plus other
contractual beneﬁ ts

None

1. Sir Adrian Montague’s contract was renewed for a further three year term on 27 February 2010.

2. Ruby McGregor-Smith’s contract was renewed for a further three year term on 23 May 2010.

3. Reg Sindall was appointed to the Main Board and the Audit, Remuneration and Nomination Committees for an initial three year term

on 14 December 2010.

4. Dr Tim Miller stood down and Reg Sindall was appointed as Chairman of the Remuneration Committee on 21 January 2011.

ANNUAL RESOLUTION

Shareholders will be given the opportunity to approve the Remuneration Report at the Annual General Meeting (resolution 11) on

20 May 2011.

AUDIT REQUIREMENT

Within the Remuneration Report, the sections on Emoluments, and Directors’ interests and share ownership requirements, on pages

52 to 54 inclusive, are audited. All other sections of the Remuneration Report are unaudited.

Reg Sindall

Chairman – Remuneration Committee
4 March 2011

Michael Page International

T AUDITOR’S
REPORT

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INDEPENDENT AUDITOR’S REPORT
TO THE MEMBERS OF MICHAEL
PAGE INTERNATIONAL PLC

We have audited the ﬁ nancial statements of Michael Page

International plc for the year ended 31 December 2010 which

comprise the Consolidated Income Statement, the Consolidated

Statement of Comprehensive Income, the Group and Parent

31 December 2010 and of the group’s proﬁ t for the year

then ended;

•

the group ﬁ nancial statements have been properly prepared in

accordance with IFRSs as adopted by the European Union;

•

the parent company ﬁ nancial statements have been properly

prepared in accordance with IFRSs as adopted by the

European Union and as applied in accordance with the

provisions of the Companies Act 2006; and

Company Balance Sheets, the Consolidated and Parent

•

the ﬁ nancial statements have been prepared in accordance

Company Statements of Changes in Equity, the Group and

Parent Company Cash Flow Statements and the related notes

with the requirements of the Companies Act 2006 and, as

regards the group ﬁ nancial statements, Article 4 of the IAS

1 to 26. The ﬁ nancial reporting framework that has been applied

Regulation.

in their preparation is applicable law and International Financial

Reporting Standards (IFRSs) as adopted by the European

Union and as regards the parent company ﬁ nancial statements,

as applied in accordance with the provisions of the Companies

Act 2006.

This report is made solely to the company’s members, as a body,

in accordance with Chapter 3 of Part 16 of the Companies Act

2006. 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 Auditor’s 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.

Opinion on other matters prescribed by the Companies

Act 2006

In our opinion:

•

the part of the Directors’ Remuneration Report to be audited

has been properly prepared in accordance with the Companies

Act 2006; and

•

the information given in the Directors’ Report for the ﬁ nancial

year for which the ﬁ nancial statements are prepared is

consistent with the ﬁ nancial statements.

Matters on which we are required to report by exception

We have nothing to report in respect of the following:

Under the Companies Act 2006 we are required to report to you

Respective responsibilities of directors and auditor

if, in our opinion:

As explained more fully in the Directors’ Responsibilities

Statement, the directors are responsible for the preparation of

the ﬁ nancial statements and for being satisﬁ ed that they give a

true and fair view. Our responsibility is to audit and express an

opinion on the ﬁ nancial statements in accordance with applicable

law and International Standards on Auditing (UK and Ireland).

Those standards require us to comply with the Auditing Practices

Board’s Ethical Standards for Auditors.

• adequate accounting records have not been kept by the

parent company, or returns adequate for our audit have not

been received from branches not visited by us; or

• the parent company ﬁ nancial statements and the part of

the Directors’ Remuneration Report to be audited are not in

agreement with the accounting records and returns; or

•

certain disclosures of directors’ remuneration speciﬁ ed by law

are not made; or

Scope of the audit of the ﬁ nancial statements

•

we have not received all the information and explanations we

An audit involves obtaining evidence about the amounts and

disclosures in the ﬁ nancial statements sufﬁ cient to give reasonable

require for our audit.

Under the Listing Rules we are required to review:

assurance that the ﬁ nancial statements are free from material

•

the directors’ statement contained within the Business Review

misstatement, whether caused by fraud or error. This includes an

in relation to going concern;

assessment of: whether the accounting policies are appropriate

to the group’s and the parent company’s circumstances and

have been consistently applied and adequately disclosed;

the reasonableness of signiﬁ cant accounting estimates made

by the directors; and the overall presentation of the ﬁ nancial

statements.

•

the part of the Corporate Governance Statement relating to

the company’s compliance with the nine provisions of the

June 2008 Combined Code speciﬁ ed for our review; and

•

certain elements of the report to shareholders by the Board

on Directors’ remuneration.

Opinion on ﬁ nancial statements

In our opinion:

•

the ﬁ nancial statements give a true and fair view of the state

of the group’s and of the parent company’s affairs as at

Peter O’Donoghue

for and on behalf of Deloitte LLP
Chartered Accountants and Statutory Auditor
London, United Kingdom
4 March 2011

Michael Page International

S FINANCIAL

STATEMENTS

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Consolidated Income Statement ..........................................59

10. Earnings per ordinary share ....................................75

Consolidated Statement of Comprehensive Income ...........59

11. Property, plant and equipment ...............................76

Consolidated and Parent Company Balance Sheets ...........60

12.

Intangible assets ....................................................76

Consolidated Statement of Changes in Equity ....................61

13.

Investments............................................................77

Statement of Changes in Equity – Parent Company ...........62

14. Trade and other receivables ...................................78

Consolidated and Parent Company

15. Trade and other payables .......................................78

Cash Flow Statements ..........................................................63

16. Bank overdrafts ......................................................79

Notes to the Financial Statements .......................................64

17. Deferred tax ...........................................................79

Signiﬁ cant accounting policies................................64

18. Called-up share capital ...........................................80

Segment reporting .................................................70

19. Reserves ................................................................82

Proﬁ t for the year ....................................................72

20. Cash ﬂ ows from operating activities .......................83

Employee information .............................................72

21. Cash and cash equivalents ....................................83

Non-recurring items (NRI) .......................................73

22. Financial risk management .....................................83

Financial income/(expenses) ...................................74

23. Commitments ........................................................87

Taxation on proﬁ ts on ordinary activities .................74

24. Contingent liabilities ................................................88

Current tax assets and liabilities .............................74

25. Events after the balance sheet date .......................88

Dividends ...............................................................75

26. Related party transactions ......................................88

Michael Page International

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CONSOLIDATED INCOME STATEMENT

For the year ended 31 December 2010

Revenue

Cost of sales

Gross proﬁ t

Administrative expenses

Operating proﬁ t before non-recurring items

Other income - non-recurring items

Operating proﬁ t

Financial income

Financial income - non-recurring items

Financial expenses

Proﬁ t before tax

Income tax expense

Income tax expense - non-recurring items

Proﬁ t for the year

Attributable to:

Owners of the parent

Earnings per share

Basic earnings per share (pence)

Diluted earnings per share (pence)

The above results relate to continuing operations.

Note

5, 7

CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME

For the year ended 31 December 2010

Proﬁ t for the year

Other comprehensive income for the year

Currency translation differences

Total comprehensive income for the year

Attributed to:

Owners of the parent

2010
£’000

832,296

(390,089)

442,207

(370,680)

71,527

17,125

88,652

1,107

11,335

(438)

100,656

(25,203)

(7,969)

67,484

2009
£’000

716,722

(365,028)

351,694

(331,491)

20,203

–

20,203

2,027

–

(1,162)

21,068

(8,638)

–

12,430

67,484

12,430

21.6

21.1

3.9

3.8

2010
£’000

67,484

290

67,774

2009
£’000

12,430

(11,978)

452

Michael Page International

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CONSOLIDATED AND PARENT COMPANY BALANCE SHEETS

As at 31 December 2010

Non-current assets

Property, plant and equipment

Intangible assets

Investments

Deferred tax assets

Other receivables

Current assets

Trade and other receivables

Current tax receivable

Cash and cash equivalents

Total assets

Current liabilities
Trade and other payables
Bank overdrafts
Current tax payable

Net current assets

Non-current liabilities

Other payables

Deferred tax liabilities

Total liabilities

Net assets

Capital and reserves

Called-up share capital

Share premium

Capital redemption reserve

Reserve for shares held in the employee beneﬁ t trust

Currency translation reserve

Retained earnings

Total equity

Note

2, 11

2, 12

15
16
8

Group

Company

2010
£’000

28,526

27,574

–

12,441

1,145

69,686

168,305

2,810

80,531

251,646

2009
£’000

31,432

20,051

2010
£’000

2009
£’000

–

421,545

422,577

10,179

2,021

63,683

133,402

14,174

137,228

284,804

–

421,545

422,577

552,108

1,305

–

481,679

1,305

–

553,413

482,984

321,332

348,487

974,958

905,561

(122,795)
–
(16,583)
(139,378)

(142,750)
(43)
(5,470)
(148,263)

(510,830)
–
–
(510,830)

(450,492)
(43)
–
(450,535)

112,268

136,541

42,583

32,449

(4,156)

(364)

(4,520)

(2,881)

(327)

(3,208)

–

(143,898)

(151,471)

(510,830)

(450,535)

177,434

197,016

464,128

455,026

3,216

55,607

875

(75,361)

33,691

159,406

177,434

3,234

51,589

838

(19,409)

33,401

127,363

197,016

3,216

55,607

875

–

404,430

464,128

3,234

51,589

838

–

399,365

455,026

These ﬁ nancial statements of Michael Page International plc, Company Number 3310225, were approved by the Board of Directors

and authorised for issue on 4 March 2011. On behalf of the Board of Directors.

S Ingham

Chief Executive

S R Puckett

Group Finance Director

Michael Page International

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CONSOLIDATED STATEMENT OF CHANGES IN EQUITY

For the year ended 31 December 2010

Group

Note

Called-
up share
capital
£’000

Share
premium
£’000

Capital
redemption
reserve
£’000

Reserve
for shares
held in the
employee
beneﬁ t
trust
£’000

Currency
translation
reserve
£’000

Retained
earnings
£’000

Total
equity
£’000

Balance at 1 January 2009

3,220

48,856

838

(21,078)

45,379

133,449

210,664

Currency translation differences

Net expense recognised directly in equity

Proﬁ t for the year

Total comprehensive (loss)/income for the
year
Purchase of shares held in the employee beneﬁ t
trust

Issue of share capital

Transfer to reserve for shares held in the
employee beneﬁ t trust

Credit in respect of share schemes

Credit in respect of tax on share schemes

Dividends

Balance at 31 December 2009 and 1 January
2010

Currency translation differences

Net expense recognised directly in equity

Proﬁ t for the year

Total comprehensive income for the year

Purchase of own shares for cancellation

Purchase of shares held in the employee beneﬁ t
trust

Issue of share capital

Transfer to reserve for shares held in the
employee beneﬁ t trust

Credit in respect of share schemes

Credit in respect of tax on share schemes

Dividends

Balance at 31 December 2010

–

2,733

–

2,733

–

(11,978)

–

(11,978)

–

12,430

(11,978)

12,430

452

(1,903)

–

3,572

–

1,669

–

(3,572)

8,491

2,418

(1,903)

2,747

–

8,491

2,418

(25,853)

(18,516)

(14,100)

3,234

51,589

838

(19,409)

33,401

127,363

197,016

–

(37)

–

4,018

–

(18)

3,216

4,018

55,607

875

–

(61,757)

–

5,805

–

(55,952)

290

–

290

–

67,484

290

67,484

67,774

(15,086)

–

(5,805)

(61,757)

4,037

–

10,049

280

(24,879)

(35,441)

(87,356)

(75,361)

33,691

159,406

177,434

Michael Page International

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STATEMENT OF CHANGES IN EQUITY – PARENT COMPANY

For the year ended 31 December 2010

Company

Balance at 1 January 2009

Proﬁ t for the year

Total comprehensive income for the year

Issue of share capital

Dividends

Balance at 31 December 2009 and 1 January 2010

Proﬁ t for the year

Total comprehensive income for the year

Purchase of own shares for cancellation

Issue of share capital

Dividends

Balance at 31 December 2010

Note

Called-up
share capital
£’000

3,220

Share
premium
£’000

48,856

Capital
redemption
reserve
£’000

838

–

3,234

–

(37)

–

(18)

3,216

–

2,733

–

2,733

51,589

–

4,018

–

4,018

55,607

–

838

–

875

Retained
earnings
£’000

351,651

73,567

–

(25,853)

399,365

45,030

Total
equity
£’000

404,565

73,567

2,747

(25,853)

(23,106)

455,026

45,030

(15,086)

–

(24,879)

(39,965)

404,430

4,037

(24,879)

(35,928)

464,128

Michael Page International

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CONSOLIDATED AND PARENT COMPANY CASH FLOW STATEMENTS

For the year ended 31 December 2010

Note

Cash generated from underlying operations

Net cash (paid)/received in respect of non-recurring items (NRI)

Cash generated from operations

Income tax paid

Net cash from operating activities

Cash ﬂ ows from investing activities

Purchases of property, plant and equipment

Purchases of computer software

Proceeds from the sale of property, plant and equipment, and computer
software

Interest received

Net cash (used in)/received from investing activities

Cash ﬂ ows from ﬁ nancing activities

Dividends paid

Interest paid

Issue of own shares for the exercise of options

Purchase of own shares for cancellation

Purchase of shares held in the employee beneﬁ t trust

Net cash used in ﬁ nancing activities

Net (decrease)/increase in cash and cash equivalents

Cash and cash equivalents at the beginning of the year

Exchange loss on cash and cash equivalents

Cash and cash equivalents at the end of the year

Group
2010
£’000

81,650

(12,558)

69,092

(12,408)

56,684

(7,371)

(8,774)

1,392

1,107

(13,646)

2009
£’000

73,759

41,018

114,777

(28,196)

86,581

(5,757)

(7,645)

2,061

2,027

(9,314)

Company

2010
£’000

48,598

(12,558)

36,040

–

2009
£’000

45,074

41,018

86,092

–

36,040

86,092

–

448

(24,879)

(25,853)

(24,879)

(25,853)

(1,160)

2,747

(141)

4,037

–

(15,086)

–

(780)

2,747

–

(439)

4,037

(15,086)

(61,757)

(98,124)

(55,086)

137,185

(1,568)

80,531

(1,903)

(26,169)

51,098

94,283

(8,196)

137,185

(36,069)

(23,886)

(43)

–

62,654

(62,697)

–

(43)

Michael Page International

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NOTES TO THE FINANCIAL STATEMENTS

For the year ended 31 December 2010

1. SIGNIFICANT ACCOUNTING POLICIES

Statement of compliance

Michael Page International plc is a company incorporated in the United Kingdom under the Companies Act. The ﬁ nancial statements
have been prepared under the historical cost convention and in accordance with current International Financial Reporting Standards
(IFRS). The ﬁ nancial statements have been prepared in accordance with IFRS adopted for use in the European Union and therefore
comply with Article 4 of the EU IAS Regulation.

Basis of preparation

The ﬁ nancial statements of Michael Page International plc consolidate the results of the Company and all its subsidiary undertakings.
As permitted by Section 408 of the Companies Act 2006, the proﬁ t and loss account of the Company has not been included as part
of these ﬁ nancial statements. The Company’s proﬁ t for the ﬁ nancial year amounted to £45.0m (2009: £73.6m). The decrease in the
Company’s proﬁ t this year is as a result of decreased dividend income. The ﬁ nancial statements have been prepared on a going concern
basis. Refer to page 28 for further details.

Basis of consolidation

(i)

Subsidiaries

Subsidiaries are entities controlled by the Company. Control exists when the Company has the power, directly or indirectly,
to govern the ﬁ nancial and operating policies of an entity so as to obtain beneﬁ ts from its activities. In assessing control, potential
voting rights that presently are exercisable or convertible are taken into account. The ﬁ nancial statements of subsidiaries are included
in the consolidated ﬁ nancial statements from the date that control commences until the date that control ceases.

(ii) Transactions eliminated on consolidation

Intragroup balances and any unrealised gains and losses or income and expenses arising from intragroup transactions,
are eliminated in preparing the consolidated ﬁ nancial statements. Unrealised losses are eliminated in the same way as unrealised
gains, but only to the extent that there is no evidence of impairment.

(iii) Employee Beneﬁ t Trust

Shares in Michael Page International plc held by the trust are shown as a reduction in shareholders’ funds. Other assets and liabilities
held by the trust are consolidated with the assets of the Group.

The policies, set out below, have been consistently applied to all the periods presented.

New standards and interpretations

The accounting policies applied by the Group in these Consolidated Financial Statements are the same as those applied by the Group
in its consolidated ﬁ nancial statements as at and for the year ended 31 December 2009 except as described below.

(a) New and amended standards adopted by the group

The following new standards and amendments to standards are mandatory for the ﬁ rst time for the ﬁ nancial year beginning 1 January
2010. None of these new standards or amendments to standards have had a signiﬁ cant impact on the Group.

IAS 27 (revised) requires the effects of all transactions with non-controlling interests to be recorded in equity if there is no change
in control and these transactions will no longer result in goodwill or gains and losses. The standard also speciﬁ es the accounting
when control is lost. Any remaining interest in the entity is re-measured to fair value, and a gain or loss is recognised in proﬁ t or loss.
IAS 27 (revised) has had no impact on the current period, as all subsidiaries in the Group are 100% owned; there have been no
transactions whereby an interest in an entity is retained after the loss of control of that entity, and there have been no transactions
with non-controlling interests.

IFRS 2 (amendments), ‘Group cash-settled share-based payment transactions’, effective form 1 January 2010. In addition to
incorporating IFRIC 8, ‘Scope of IFRS 2’, and IFRIC 11, ‘IFRS 2 – Group and treasury share transactions’, the amendments expand
on the guidance in IFRIC 11 to address the classiﬁ cation of group arrangements that were not covered by that interpretation.

(b) New and amended standards, and interpretations mandatory for the ﬁ rst time for the ﬁ nancial year beginning 1 January 2010 but

not currently relevant to the group (although they may affect the accounting for future transactions and events).

The following standards and amendments to existing standards have been published and are mandatory for the group’s accounting
periods beginning on or after 1 January 2010 or later periods, but the group has not early adopted them.

Michael Page International

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1. SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)

New standards and interpretations (continued)

IAS 1 (amendment 2009), ‘Presentation of ﬁ nancial statements’. The amendment clariﬁ es that the potential settlement of a liability
by the issue of equity is not relevant to its classiﬁ cation as current or non current. By amending the deﬁ nition of current liability,
the amendment permits a liability to be classiﬁ ed as non-current (provided that the entity has an unconditional right to defer settlement
by transfer of cash or other assets for at least 12 months after the accounting period) notwithstanding the fact that the entity could
be required by the counterparty to settle in shares at any time.

IAS 36 (amendment), ‘Impairment of assets’, effective 1 January 2010. The amendment clariﬁ es that the largest cash-generating unit
(or group of units) to which goodwill should be allocated for the purposes of impairment testing is an operating segment, as deﬁ ned by
paragraph 5 of IFRS 8, ‘ Operating segments’ (that is, before the aggregation of segments with similar economic characteristics).

IFRS 3 (revised), ‘Business combinations’, and consequential amendments to IAS 27, ‘Consolidated and separate ﬁ nancial statements’,
IAS 28, ‘Investments in associates’, and IAS 31, ‘Interests in joint ventures’, are effective prospectively to business combinations for
which the acquisition date is on or after the beginning of the ﬁ rst annual reporting period beginning on or after 1 July 2009.

The revised standard continues to apply the acquisition method to business combinations but with some signiﬁ cant changes compared
with IFRS 3. For example, all payments to purchase a business are recorded at fair value at the acquisition date, with contingent
payments classiﬁ ed as debt subsequently remeasured through the statement of comprehensive income. There is a choice on an
acquisition-by-acquisition basis to measure the non-controlling interest in the acquiree either at fair value or at the non-controlling
interest’s proportionate share of the acquiree’s net assets. All acquisition-related costs are expensed.

IFRS 3 (revised) has had no impact on the Group, as the Group is organically grown and does not follow a strategy of
acquisitions.

IFRS 5 (amendment), ‘Non-current assets held for sale and discontinued operations’. The amendment clariﬁ caties that IFRS 5
speciﬁ es the disclosures required in respect of non-current assets (or disposal groups) classiﬁ ed as held for sale or discontinued
operations. It also clariﬁ es that the general requirements of IAS 1 still apply, in particular paragraph 15 (to achieve a fair presentation)
and paragraph 125 (sources of estimation uncertainty) of IAS 1.

IFRIC 17, ‘Distribution of non-cash assets to owners’ (effective on or after 1 July 2009). The interpretation was published in
November 2008. This interpretation provides guidance on accounting for arrangements whereby an entity distributes non-cash
assets to shareholders either as a distribution of reserves or as dividends. IFRS 5 has also been amended to require that assets are
classiﬁ ed as held for distribution only when they are available for distribution in their present condition and the distribution is highly
probable.

(c)

New standards, amendments and interpretations issued but not effective for the ﬁ nancial year beginning 1 January 2010 and not
early adopted. The group’s and parent entity’s assessment of the impact of these new standards and interpretations is set out
below.

IAS 24 (revised), ‘Related party disclosures’, issued in November 2009. It supersedes IAS 24, ‘Related party disclosures’, issued
in 2003. IAS 24 (revised) is mandatory for periods beginning on or after 1 January 2011. Earlier application, in whole or in part,
is permitted. However, the standard has not yet been endorsed by the EU.

The revised standard clariﬁ es and simpliﬁ es the deﬁ nition of a related party and removes the requirement for government-related
entities to disclose details of all transactions with the government and other government-related entities. The group will apply the
revised standard from 1 January 2011. When the revised standard is applied, the group and the parent will need to disclose any
transactions between its subsidiaries and its associates. The group is currently putting systems in place to capture the necessary
information. It is, therefore, not possible at this stage to disclose the impact, if any, of the revised standard on the related party
disclosures.

‘Classiﬁ cation of rights issues’ (amendment to IAS 32), issued in October 2009. The amendment applies to annual periods beginning
on or after 1 February 2010. Earlier application is permitted. The amendment addresses the accounting for rights issues that are
denominated in a currency other than the functional currency of the issuer. Provided certain conditions are met, such rights issues
are now classiﬁ ed as equity regardless of the currency in which the exercise price is denominated. Previously, these issues had to
be accounted for as derivative liabilities. The amendment applies retrospectively in accordance with IAS 8 ‘Accounting policies,
changes in accounting estimates and errors’. The group will apply the amended standard from 1 January 2011.

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1. SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)

New standards and interpretations (continued)

IFRS 9, ‘Financial instruments’, issued in November 2009. This standard is the ﬁ rst step in the process to replace IAS 39, ‘Financial
instruments: recognition and measurement’. IFRS 9 introduces new requirements for classifying and measuring ﬁ nancial assets.
While the Group is yet to assess IFRS 9’s full impact, it is unlikely to signiﬁ cantly affect the Group’s accounting for ﬁ nancial assets.
The standard is not applicable until 1 January 2013, but is available for early adoption. However, the standard has not yet been
endorsed by the EU.

‘Prepayments of a minimum funding requirement’ (amendments to IFRIC 14). The amendments correct an unintended consequence of
IFRIC 14, ‘IAS 19 – The limit on a deﬁ ned beneﬁ t asset, minimum funding requirements and their interaction’. Without the amendments,
entities are not permitted to recognise as an asset some voluntary prepayments for minimum funding contributions. This was not
intended when IFRIC 14 was issued, and the amendments correct this. The amendments are effective for annual periods beginning
1 January 2011. Earlier application is permitted. The amendments should be applied retrospectively to the earliest comparative period
presented. The group will apply these amendments for the ﬁ nancial reporting period commencing on 1 January 2011.

IFRIC 19, ‘Extinguishing ﬁ nancial liabilities with equity instruments’, effective 1 July 2010. The interpretation clariﬁ es the accounting
by an entity when the terms of a ﬁ nancial liability are renegotiated and result in the entity issuing equity instruments to a creditor of
the entity to extinguish all or part of the ﬁ nancial liability (debt for equity swap). It requires a gain or loss to be recognised in proﬁ t
or loss, which is measured as the difference between the carrying amount of the ﬁ nancial liability and the fair value of the equity
instruments issued. If the fair value of the equity instruments issued cannot be reliably measured, the equity instruments should be
measured to reﬂ ect the fair value of the ﬁ nancial liability extinguished. The group will apply the interpretation from 1 January 2011,
subject to endorsement by the EU. It is not expected to have any impact on the group or the parent entity’s ﬁ nancial statements.

The Directors anticipate that the adoption of the above Standards and Interpretations in future periods will have little or no impact on the
ﬁ nancial statements of the Group when the relevant Standards come into effect for periods commencing on or after 1 January 2011.

Going concern

The directors have, at the time of approving the ﬁ nancial statements, a reasonable expectation that the Company and the Group have
adequate resources to continue in operational existence for the foreseeable future. Thus, they continue to adopt the going concern basis
of accounting in preparing the ﬁ nancial statements. Further detail is contained in the Business Review on page 28.

a) Revenue and income recognition

Revenue, which excludes value added tax (“VAT”), constitutes the value of services undertaken by the Group from its principal activities,
which are recruitment consultancy and other ancillary services. These consist of:

•

revenue from temporary placements, which represents amounts billed for the services of temporary staff, including the salary cost
of these staff. This is recognised when the service has been provided;

revenue from permanent placements is typically based on a percentage of the candidate’s remuneration package and is
derived from both retained assignments (income recognised on completion of deﬁ ned stages of work) and non-retained assignments
(income recognised at the date an offer is accepted by a candidate and where a start date has been determined). The latter includes
revenue anticipated, but not invoiced, at the balance sheet date, which is correspondingly accrued on the balance sheet within
prepayments and accrued income. A provision is made against accrued income for possible cancellations of placements prior to,
or shortly after, the commencement of employment; and

•

revenue from amounts billed to clients for expenses incurred on their behalf (principally advertisements) is recognised when the
expense is incurred.

Interest income is accrued on a time basis, by reference to the principal outstanding and at the effective interest rate applicable.

b) Cost of sales

Cost of sales consists of the salary cost of temporary staff and costs incurred on behalf of clients, principally advertising costs.

c) Gross proﬁ t

Gross proﬁ t represents revenue less cost of sales and consists of the total placement fees of permanent candidates, the margin earned
on the placement of temporary candidates and the margin on advertising income.

d) Foreign currency translation

(i) Functional and presentation currency

Items included in the ﬁ nancial statements of each of the Group’s entities are measured using the currency of the primary economic
environment in which the entity operates (“the functional currency”). The consolidated ﬁ nancial statements are presented in Sterling,
which is the Company’s functional and presentation currency.

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1. SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)

New standards and interpretations (continued)

(ii) Transactions and balances

Foreign currency transactions are translated into the respective functional currency using the exchange rates prevailing at the dates of the
transactions. Foreign exchange gains and losses resulting from the settlement of such transactions and from the translation at year end
exchange rates of monetary assets and liabilities denominated in foreign currencies are recognised in the income statement.

(iii) Group companies

The results and ﬁ nancial position of all the Group entities (none of which has the currency of a hyperinﬂ ationary economy) that have a
functional currency different from the presentation currency are translated into the presentation currency as follows:

• assets and liabilities for each balance sheet presented are translated at the closing rate at the date of that balance sheet;

• income and expenses for each income statement are translated at average exchange rates; and

• all resulting exchange differences are recognised as a separate component of equity.

Intangible assets

(i) Goodwill

Goodwill represents the excess of the cost of an acquisition over the fair value of the Group’s share of the net identiﬁ able assets of the
acquired subsidiary at the date of acquisition. Goodwill on the acquisition of subsidiaries is included in intangible assets.

Goodwill is stated at cost less any accumulated impairment losses. Goodwill is allocated to cash-generating units and is not amortised,
but is tested at least annually for impairment (see accounting policy h). Gains and losses on the disposal of an entity include the carrying
amount of goodwill relating to the entity sold.

(ii) Computer software

Computer software acquired by the Group is stated at cost less accumulated amortisation (see below). Included with computer software,
are assets under construction which are amortised from the point they go live.

(iii) Amortisation

Amortisation is charged to the income statement on a straight-line basis over the estimated useful lives of intangible assets unless such
lives are indeﬁ nite. Goodwill has an indeﬁ nite useful life. Computer software is amortised at 20% per annum. The cumulative amount of
goodwill written off directly to retained earnings in respect of acquisitions prior to 31 December 1997 is £311.7m (2009: £311.7m).

f) Property, plant and equipment

Property, plant and equipment are stated at original cost less accumulated depreciation. Depreciation is calculated to write off the cost
less estimated residual value of each asset evenly over its expected useful life at the following rates:

• Leasehold improvements

10% per annum or period of lease if shorter

• Furniture, ﬁ xtures and equipment 10-20% per annum

• Motor vehicles

25% per annum

Investments

Fixed asset investments are stated at cost less provision for impairment.

Impairment of assets

Assets that have an indeﬁ nite useful life are not subject to amortisation and are tested annually for impairment. An impairment loss is
recognised for the amount by which the asset’s carrying amount exceeds its recoverable amount. The recoverable amount is the higher
of an asset’s fair value less costs to sell and value in use. For the purposes of assessing impairment, assets are grouped at the lowest
levels for which there are separately identiﬁ able cash ﬂ ows (cash-generating units).

A ﬁ nancial asset is assessed at each reporting date to determine whether there is any objective evidence that it is impaired.
A ﬁ nancial asset is considered to be impaired if objective evidence indicates that one or more events has had a negative effect on the
estimated future cash ﬂ ows of that asset. For certain categories of ﬁ nancial asset, 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, as well as observable changes in national or local economic conditions that correlate with default on receivables.

The carrying amount of the ﬁ nancial asset is reduced by the impairment loss directly for all ﬁ nancial assets with the exception of trade
receivables, where the carrying amount is reduced through the use of an allowance account. When a trade receivable is considered
uncollectible, it is written off against the allowance account. Subsequent recoveries of amounts previously written off are credited against
the allowance account. Changes in the carrying amount of the allowance account are recognised in the income statement.

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1. SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)

i) Taxation

Income tax expense represents the sum of the tax currently payable and deferred tax.

The tax currently payable is based on taxable proﬁ t for the year. Taxable proﬁ t differs from proﬁ t 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 balance sheet date.

Deferred tax is recognised on differences between the carrying amounts of assets and liabilities in the ﬁ nancial statements and the
corresponding tax bases used in the computation of taxable proﬁ t, 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 proﬁ ts 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 taxable proﬁ t nor the accounting proﬁ t.

Deferred tax liabilities are recognised for taxable temporary differences arising on investments in subsidiaries, 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 balance sheet date and reduced to the extent that it is no longer probable
that sufﬁ cient taxable proﬁ ts 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 realised.
Deferred tax is charged or credited to 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.

j) Pension costs

The Group operates deﬁ ned contribution pension schemes. The assets of the schemes are held separately from those of the Group
in independently administered funds. The pension costs charged to the income statement represent the contributions payable by the
Group to the funds during each period.

k) Leased assets

Leases are classiﬁ ed as ﬁ nance leases whenever the terms of the lease transfer substantially all the risks and rewards of ownership to
the lessee. All other leases are classiﬁ ed as operating leases.

Assets held under ﬁ nance leases are recognised as assets of the Group at their fair value at the inception of the lease or, if lower, at the
present value of the minimum lease payments. The corresponding liability to the lessor is included in the balance sheet as a ﬁ nance lease
obligation. Lease payments are apportioned between ﬁ nance charges and reduction of the lease obligation so as to achieve a constant
rate of interest on the remaining balance of the liability. Finance charges are charged to the income statement.

Rentals under operating leases are charged to the income statement on a straight-line basis over the term of the lease. Beneﬁ ts received
and receivable as an incentive to enter into an operating lease are also spread on a straight-line basis over the lease term.

l) Segment reporting

IFRS 8 requires operating segments to be identiﬁ ed on the basis of internal reports about components of the Group that are regularly
reviewed by the Chief Executive to allocate resources to the segments and to assess their performance. Information provided to the
Chief Executive is focused on regions and as a result, reportable segments are on a regional basis.

m) Dividend distribution

Dividend distribution to the Company’s shareholders is recognised as a liability in the Group’s ﬁ nancial statements in the period in which
the dividends are approved by the Company’s shareholders.

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1. SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)

n) Share-based compensation

The Group operates a number of equity-settled, share-based compensation plans. Their accounting treatments are described below:

(i) Share option schemes

The fair value of the employee services received in exchange for the grant of the options is recognised as an expense. The total amount
to be expensed over the vesting period is determined by reference to the fair value of the options granted, excluding the impact of any
non-market vesting conditions (for example, earnings per share). Non-market vesting conditions are included in assumptions about the
number of options that are expected to become exercisable. At each balance sheet date, the estimate of the number of options that are
expected to become exercisable is revised. The Group recognises the impact of the revision of original estimates, if any, in the income
statement, and the corresponding adjustment to equity over the remaining vesting period.

(ii) Deferred Annual Bonus and Long Term Incentive Plans

Where deferred awards are made to Directors and senior executives under either the Incentive Share Plan or the Annual Bonus Scheme,
to reﬂ ect that the awards are for services over a longer period, the value of the expected award is charged to the income statement on
a straight-line basis over the vesting period to which the award relates.

o) Repurchase of share capital

When share capital recognised as equity is repurchased, the amount of the consideration paid, including any directly attributable costs,
is recognised as a change in equity.

p) Provisions

A provision is recognised in the balance sheet when the Group has a present legal or constructive obligation as a result of a past event,
and it is probable that an outﬂ ow of economic beneﬁ ts will be required to settle the obligation. Provisions are measured at the Directors’
best estimate of the expenditure required to settle the obligation at the balance sheet date, and are discounted to present value where
the effect is material.

q) Borrowing costs

All borrowing costs are accrued in the income statement on a time basis.

r) Financial assets and liabilities

Financial assets and liabilities are recognised in the Group’s balance sheet when the Group becomes a party to the contractual provisions
of the instrument. Non-derivative ﬁ nancial instruments comprise trade and other receivables, cash and cash equivalents, loans and
borrowings and trade and other payables.

Trade receivables, loans, and other receivables that have ﬁ xed or determinable payments that are not quoted in an active market are
classiﬁ ed as loans and receivables. Loans and receivables are measured at amortised cost using the effective interest method, less any
impairment. Interest income is recognised by applying the effective interest rate, except for short-term receivables when the recognition
of interest would be immaterial.

Cash and cash equivalents includes cash-in-hand, deposits held at call with banks, and other short-term highly liquid investments with
original maturities of three months or less. 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 statement of cash ﬂ ows.

Trade and other payables are stated at cost. Other ﬁ nancial liabilities, including borrowings, are initially measured at fair value,
net of transaction costs.

The Group has derivative contracts at the balance sheet date that have been valued at fair value through the income statement.

s) Critical accounting estimates and judgements

The preparation of ﬁ nancial statements in conformity with IFRS requires the use of certain critical accounting estimates and judgements.
It also requires management to exercise judgement in the process of applying the Company’s accounting policies.

Estimates and judgements are continually evaluated and are based on historical experience and other factors, including expectations of
future events that are believed to be reasonable under the circumstances. Management anticipate that any estimates and judgements
made do not have a material effect on the results.

In particular, information about signiﬁ cant areas of estimation uncertainty and critical judgements in applying accounting policies that
have the most signiﬁ cant effect on the amount recognised in the ﬁ nancial statements are described in the following notes:

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1. SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)

s) Critical accounting estimates and judgements (continued)

(cid:129) Note 1 – revenue recognition

In making its judgement, management considered the detailed criteria for the recognition of revenue from permanent placements where
a position has been accepted by a candidate, a start date agreed, but employment has not yet commenced. A provision is made by
management, based on past historical experience, for the proportion of those placements where the candidate is expected to reverse
their acceptance prior to the start date.

(cid:129) Note 14 – trade and other receivables

There is uncertainty regarding customers who may not be able to pay as their invoices fall due. In reviewing the appropriateness of
the provisions in respect of recoverability of trade receivables, consideration has been given to the economic climate in the respective
markets, the ageing of the debt and the potential likelihood of default.

(cid:129) Note 17 – deferred tax

Management has estimated the likely value of deferred tax assets in respect of trading losses carried forward.

(cid:129) Note 18 – share-based payments

The Group’s policy for share-based payments is stated in note 1 (n). The fair value of equity settled share-based payments is partly
derived from estimates of factors such as lapse rates and achievement of performance criteria. It is also derived from assumptions such
as the future volatility of the Company’s share price, expected dividend yields and risk-free interest rates.

t) Non-recurring items

Non-recurring items are those items the Group considers to be one-off or material in nature that should be brought to the reader’s
attention in understanding the Group’s ﬁ nancial performance.

2. SEGMENT REPORTING

All revenues disclosed are derived from external customers.

The accounting policies of the reportable segments are the same as the Group’s accounting policies described in note 1. Segment operating
proﬁ t represents the proﬁ t earned by each segment without allocation of central administration costs and certain recharges. This is the
measure reported to the Group’s Chief Executive for the purpose of resource allocation and assessment of segment performance.

(a) Revenue, gross proﬁ t and operating proﬁ t by reportable segment

EMEA

United Kingdom

Asia Paciﬁ c

Australia and New Zealand

Asia

Total

Americas

Non-recurring items (NRI)

Interest income

Proﬁ t before tax

Gross Proﬁ t

Operating Proﬁ t

Revenue
2010
£’000

332,202

302,567

81,676

38,630

120,306

77,221

832,296

–

2009
£’000

311,070

274,599

59,108

20,301

79,409

51,644

716,722

–

2010
£’000

188,706

124,858

37,645

34,569

72,214

56,429

442,207

–

2009
£’000

163,729

110,784

23,881

18,329

42,210

34,971

351,694

–

832,296

716,722

442,207

351,694

–

2010
£’000

22,272

19,630

9,754

12,562

22,316

7,309

71,527

17,125

88,652

12,004

100,656

2009
£’000

1,055

11,275

4,287

3,798

8,085

(212)

20,203

–

20,203

865

21,068

The above analysis by destination is not materially different to the analysis by origin.

Non-recurring items (NRI) relate wholly to the United Kingdom.

The analysis below is of the carrying amount of reportable segment assets, liabilities and non-current assets. Segment assets
and liabilities include items directly attributable to a segment as well as those that can be allocated on a reasonable basis.
The individual reportable segments exclude income tax assets and liabilities. Non-current assets include property, plant and equipment,
computer software and goodwill.

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2. SEGMENT REPORTING (CONTINUED)

(b) Segment assets, liabilities and non-current assets by reportable segment

EMEA

United Kingdom

Asia Paciﬁ c

Australia and New Zealand

Asia

Total

Americas

Segment assets/liabilities

Income tax

EMEA

United Kingdom

Asia Paciﬁ c

Australia and New Zealand

Asia

Total

Americas

Total Assets

Total Liabilities

2010
£’000

136,159

96,563

28,292

24,471

52,763

33,037

318,522

2,810

321,332

2009
£’000

117,863

161,653

18,025

13,025

31,050

23,747

334,313

14,174

348,487

2010
£’000

60,744

41,359

10,410

5,352

15,762

9,450

127,315

16,583

143,898

2009
£’000

49,504

83,341

6,622

2,322

8,944

4,212

146,001

5,470

151,471

Property, Plant and Equipment
2009
£’000

2010
£’000

10,104

9,090

2,104

996

3,100

6,232

28,526

13,016

9,985

2,411

708

3,119

5,312

31,432

Intangible Assets

2010
£’000

776

25,810

148

369

517

471

2009
£’000

1,166

17,933

258

310

568

384

27,574

20,051

The analyses below in notes (c) revenue and gross proﬁ t by discipline (being the professions of candidates placed) and (d) revenue and
gross proﬁ t generated from permanent and temporary placements have been included as additional disclosure over and above the
requirements of IFRS 8 “Operating Segments”.

Finance and Accounting

Marketing, Sales and Retail

Legal, Technology, HR, Secretarial and Other

Engineering, Property & Construction, Procurement & Supply Chain

Revenue
2010
£’000

450,573

111,661

156,993

113,069

832,296

2009
£’000

408,951

91,811

125,199

90,761

716,722

Gross Proﬁ t

2010
£’000

2009
£’000

209,176

175,743

82,834

81,597

68,600

61,404

61,217

53,330

442,207

351,694

(d) Revenue and gross proﬁ t generated from permanent and temporary placements

Permanent

Temporary

Revenue

Gross Proﬁ t

2010
£’000

355,979

476,317

832,296

2009
£’000

260,161

456,561

716,722

2010
£’000

343,787

98,420

442,207

2009
£’000

249,387

102,307

351,694

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3. PROFIT FOR THE YEAR

Proﬁ t for the year is stated after charging/(crediting):

Employment costs (Note 4)

Net exchange losses

Depreciation of property, plant and equipment - owned

Amortisation of computer software

Impairment of trade receivables

Loss on sale of property, plant and equipment and computer software

Fees payable to the company’s auditor for the audit of the company’s annual accounts

Fees payable to the company’s auditor and their associates for other services to the group:

- The audit of the company’s subsidiaries pursuant to legislation

Total audit fees

- Other services pursuant to legislation

- Tax services

- Other services

Total non-audit fees

Total fees

Operating lease rentals - land and buildings

- plant and machinery

4. EMPLOYEE INFORMATION

2010
£’000

2009
£’000

255,435

226,692

307

9,310

1,269

6,370

151

463

530

195

284

814

144

9,926

1,342

8,665

383

466

531

114

214

745

25,226

4,832

25,794

5,785

The average number of employees (including Executive Directors) during the year and total number of employees (including Executive
Directors) at 31 December 2010 were as follows:

Management

Client services

Administration

Employment costs (including Directors’ emoluments) comprised:

2010
Average No.

2009
Average No.

175

2,652

1,108

3,935

172

2,664

1,099

3,935

Wages and salaries

Social security costs

Pension costs - deﬁ ned contribution plans

Share-based payments

2010
No.

184

3,089

1,225

4,498

2010
£’000

203,653

29,858

9,496

12,428

2009
No.

165

2,351

1,033

3,549

2009
£’000

182,656

27,007

8,538

8,491

255,435

226,692

Details of Directors’ remuneration for the year are provided in the Directors’ Remuneration Report on pages 48 to 55.

No staff are employed by the parent company (2009: none) hence no remuneration has been disclosed.

Michael Page International

F
N
A
N
C
A
L
S
T
A
T
E
M
E
N
T
S

5. NON-RECURRING ITEMS (NRI) – VAT

In 2003, the Group submitted an initial claim to Her Majesty’s Revenue and Customs (HMRC) for overpaid VAT which was rejected.
The Group appealed and subsequently ﬁ led amended claims for £26.5m, net of fees, covering the period from 1980 to 2004. In March 2009,
the Group ﬁ led amended claims for a further refund of an additional £80m, net of fees, of overpaid VAT covering the same period.

In June 2009 the Group received a payment from HMRC of £26.5m, net of fees, as part settlement of these claims and in July 2009
received £10.5m, net of fees, of statutory interest. As a result, the principal and interest amounts were recognised in the half year to
June 2009 results, with the interest receivable being recorded within working capital in the cash ﬂ ow statement.

On 25 September 2009, the Group received a letter from HMRC which stated that, ‘HMRC have reviewed the recent payment and are
now of the view that the claim in whole or in part should not have been paid’.

A number of discussions and meetings with HMRC followed and on 5 March 2010, the Group announced that an agreement had been
reached in principle, subject to legal contract, for the Group to retain £28.4m (net of fees). However, given the background to the initial
receipt, the subsequent review and reversal of HMRC’s position, together with the remaining uncertainty pending formal contractual
agreement, the Group reversed out the amounts originally recognised in the 2009 half year results and as such did not recognise any
amount in the Income Statement in the 2009 full year.

On 30 April 2010, a formal agreement was signed with HMRC. As a result, of the £50m originally received from HMRC, the Group retained
£38.1m and returned £11.9m in May 2010. Accordingly, after fees, the Group has recognised £28.4m as non-recurring income in its
2010 Income Statement, of which £17.1m is in respect of refunded VAT and is included in operating proﬁ t and £11.3m is in respect of
interest and is included in ﬁ nancial income.

In respect of the amended claims for a further refund of an additional £80m, net of fees, of overpaid VAT, the Group is continuing to
pursue the claim.

Taxation of £8.0m on non-recurring items, net of expenses, has been provided representing an effective tax rate of 28.0%.

A summary of the effects of the non-recurring item (NRI) is shown in the tables below:

Effect on proﬁ t after tax

Operating proﬁ t

Net interest

Proﬁ t before tax

Taxation

Proﬁ t after tax

There is no effect on proﬁ t after tax in the prior year.

Effect on balance sheet

Other debtors - balance due from advisor

Other tax and social security - balance due back to HMRC

Effect on cash ﬂ ows

Decrease/(increase) in VAT related receivables

(Decrease)/increase in VAT related payables

Non-recurring income recognised in the proﬁ t and loss account

Net affect on cash ﬂ ows

Underlying
2010
£’000

71,527

669

72,196

(25,203)

46,993

NRI
2010
£’000

17,125

11,335

28,460

(7,969)

20,491

Total
2010
£’000

–

Total
2010
£’000

8,972

(49,990)

28,460

(12,558)

Total
2010
£’000

88,652

12,004

100,656

(33,172)

67,484

Total
2009
£’000

8,972

(49,990)

(41,018)

Total
2009
£’000

(8,972)

49,990

–

41,018

Michael Page International

S
T
N
E
M
E
T
A
T
S
L
A
C
N
A
N
F

6. FINANCIAL INCOME/(EXPENSES)

Financial income

Bank interest receivable

Interest on non-recurring items (note 5)

Financial expenses

Bank interest payable

7. TAXATION ON PROFITS ON ORDINARY ACTIVITIES

The charge for taxation is based on the annual tax rate of 33.0% on proﬁ t before tax (2009: 41.0%).

Analysis of charge in the year

UK income tax at 28% (2009: 28%) for year

Adjustments in respect of prior year

Overseas income tax

Deferred tax expense

Origination and reversal of temporary differences

Charge/(beneﬁ t) of tax losses recognised

Deferred tax expense/(beneﬁ t)

Total income tax expense in the income statement

Reconciliation of effective tax rate

Proﬁ t before taxation

Proﬁ t on ordinary activities before tax multiplied by the standard rate of corporation tax in the UK

Effects of:

Disallowable items and other permanent timing differences

Unrelieved overseas losses

Utilisation of losses not previously recognised

Derecognition of overseas losses

Movement on deferred tax not recognised

Higher tax rates on overseas earnings

Adjustment to tax charge in respect of prior periods

Tax expense and effective rate for the year

Tax recognised directly in equity

Relating to equity settled transactions

2010
£’000

100,656

28,184

1,292

1,304

(4)

–

(1,385)

2,655

1,126

33,172

28.0

1.3

–

(1.4)

2.7

1.1

33.0

2010
£’000

1,107

11,335

12,442

2009
£’000

2,027

–

2,027

(438)

(1,162)

2010
£’000

17,379

1,126

13,790

32,295

(1,184)

2,061

877

33,172

2009
£’000

21,068

5,899

894

2,051

–

2,256

–

(2,536)

8,638

2010
£’000

280

2009
£’000

8,556

(2,536)

4,589

10,609

(1,639)

(332)

(1,971)

8,638

28.0

4.2

9.7

–

10.7

–

0.4

(12.0)

41.0

2009
£’000

2,418

8. CURRENT TAX ASSETS AND LIABILITIES

The current tax asset of £2.8m (2009: £14.2m), and current tax liability of £16.6m (2009: £5.5m) for the Group, and current tax asset
of £1.3m (2009: £1.3m) for the parent company, represent the amount of income taxes recoverable and payable in respect of current
and prior periods.

Michael Page International

F
N
A
N
C
A
L
S
T
A
T
E
M
E
N
T
S

9. DIVIDENDS

Amounts recognised as distributions to equity holders in the year:

Final dividend for the year ended 31 December 2009 of 5.12p per ordinary share (2008: 5.12p)

Interim dividend for the year ended 31 December 2010 of 2.88p per ordinary share (2009: 2.88p)

2010
£’000

16,066

8,813

24,879

2009
£’000

16,487

9,366

25,853

Amounts proposed as distributions to equity holders:

Proposed ﬁ nal dividend for the year ended 31 December 2010 of 6.12p per ordinary share (2009: 5.12p)

18,755

16,535

The proposed ﬁ nal dividend had not been approved by shareholders at 31 December 2010 and therefore has not been included as a
liability. The comparative ﬁ nal dividend at 31 December 2009 was also not recognised as a liability in the prior year.

The proposed ﬁ nal dividend of 6.12p (2009: 5.12p) per ordinary share will be paid on 6 June 2011 to shareholders on the register at the
close of business on 6 May 2011, subject to approval by shareholders.

When the Company pays a dividend to shareholders, there may be income tax consequences. The impact will depend upon the individual
circumstances of the shareholder.

10. EARNINGS PER ORDINARY SHARE

The calculation of the basic and diluted earnings per share is based on the following data:

Earnings

Earnings for basic and diluted earnings per share (£‘000)

Non-recurring items (NRI) (£’000) (note 5)

Earnings for basic and diluted earnings per share before NRI (£’000)

Number of shares

Weighted average number of shares used for basic earnings per share (‘000)

Dilution effect of share plans (‘000)

Diluted weighted average number of shares used for diluted earnings per share (‘000)

Basic earnings per share (pence)

Diluted earnings per share (pence)

Basic earnings per share before NRI (pence)

Diluted earnings per share before NRI (pence)

The above results relate to continuing operations.

Basic

2010

67,484

(20,491)

46,993

2009

12,430

–

12,430

311,821

321,643

7,653

7,412

319,474

329,055

21.6

21.1

15.1

14.7

3.9

3.8

3.9

3.8

Basic earnings per share is calculated by dividing the proﬁ t attributable to equity holders of the Company by the weighted average number
of ordinary shares in issue during the year, excluding ordinary shares purchased by the Employee Beneﬁ t Trust and held in the reserve.

Diluted

Diluted earnings per share is calculated by adjusting the weighted average number of ordinary shares outstanding to assume conversion
of all dilutive potential ordinary shares. This calculation determines the number of shares that could have been acquired at fair value
(determined as the average market price of the Company’s shares) based on the monetary value of the subscription rights attached to
the outstanding share options. The number of shares calculated in the basic earnings per share is then adjusted to reﬂ ect the number
of shares deemed to be issued for nil consideration as a result of the potential exercise of existing share options.

The remaining share options that are currently not dilutive and hence excluded from the dilutive earnings per share calculation remain
potentially dilutive until they are either exercised or they lapse.

Potential future ordinary share transactions

It remains the Company’s intention to use surplus cash to repurchase and cancel its shares.

Michael Page International

S
T
N
E
M
E
T
A
T
S
L
A
C
N
A
N
F

11. PROPERTY, PLANT AND EQUIPMENT

2010

Leasehold
improvements
£’000

Furniture,
ﬁ xtures and
equipment
£’000

Motor
vehicles
£’000

Leasehold
improvements
£’000

Total
£’000

2009
Furniture,
ﬁ xtures and
equipment
£’000

Motor
vehicles
£’000

27,775

2,684

(974)

309

29,794

14,878

3,609

(675)

(15)

17,797

44,286

3,933

(3,893)

809

45,135

27,050

5,167

(2,932)

492

29,777

2,332

754

(953)

2,162

1,033

534

(700)

124

991

74,393

7,371

(5,820)

1,147

77,091

42,961

9,310

(4,307)

601

48,565

29,184

1,346

(1,765)

(990)

27,775

13,099

3,781

(1,182)

(820)

14,878

45,895

3,859

(3,846)

(1,622)

44,286

24,823

5,496

(2,587)

(682)

27,050

3,108

552

(1,319)

(9)

2,332

1,168

649

(780)

(4)

1,033

Total
£’000

78,187

5,757

(6,930)

(2,621)

74,393

39,090

9,926

(4,549)

(1,506)

42,961

11,997

15,358

1,171

28,526

12,897

17,236

1,299

31,432

2010

Computer
software,
assets under
construction
£’000

Computer
software
£’000

2009

Computer
software,
assets under
construction
£’000

Computer
software
£’000

Total
£’000

Goodwill
£’000

Total
£’000

Goodwill
£’000

1,539

–

15,867

8,107

–

27,383

8,774

(1,036)

170

23,986

1,539

35,291

–

7,332

1,269

(1,005)

121

7,717

9,977

667

(1,036)

158

9,766

7,332

1,269

(1,005)

121

7,717

9,518

902

(253)

(190)

9,977

6,333

1,342

(190)

(153)

7,332

9,131

6,743

–

(7)

1,539

20,188

–

7,645

(253)

(197)

15,867

1,539

27,383

–

6,333

1,342

(190)

(153)

7,332

2,049

23,986

1,539

27,574

2,645

15,867

1,539

20,051

Group

Cost

At 1 January

Additions

Disposals

Effect of movements in foreign exchange

At 31 December

Depreciation

At 1 January

Charge for the year

Disposals

Effect of movements in foreign exchange

At 31 December

Net book value

At 31 December

12. INTANGIBLE ASSETS

Group

Cost

At 1 January

Additions

Disposals

Effect of movements in foreign exchange

At 31 December

Amortisation

At 1 January

Charge for the year

Disposals

Effect of movements in foreign exchange

At 31 December

Net book value

At 31 December

Impairment tests for goodwill

Goodwill is allocated to the Group’s cash-generating units (CGUs) identiﬁ ed according to the country of operation. A summary of the
goodwill allocation is presented below.

USA

Singapore

Michael Page International

2010
£’000

1,274

214

1,539

2009
£’000

1,274

214

1,539

F
N
A
N
C
A
L
S
T
A
T
E
M
E
N
T
S

12. INTANGIBLE ASSETS (CONTINUED)

In assessing value in use, the estimated future cash ﬂ ows are calculated by preparing cash ﬂ ow forecasts derived from the most recent
ﬁ nancial budget, management projections for ﬁ ve years, followed by an assumed growth rate of 3%, which does not exceed the
long-term average growth rate of the relevant markets and reﬂ ects long-term wage inﬂ ation fee growth. Management applied a discount
rate of 10% to the estimated future cash ﬂ ows to calculate the terminal value of those cash ﬂ ows. If the recoverable amount of an asset
is estimated to be less than its carrying amount, the carrying amount of the asset is reduced to its recoverable amount. An impairment
loss is recognised as an expense.

The Group tests goodwill annually for impairment, or more frequently if there are indications that goodwill might be impaired.
It is the opinion of the Directors that at 31 December 2010 there was no impairment of intangible assets.

13. INVESTMENTS

Company

Cost

At 1 January 2010

Derecognised on vesting of LTIPs and deferred bonus shares

At 31 December 2010

Subsidiary undertakings
£’000

422,577

(1,032)

421,545

The derecognition of assets represents a decrease in the parent company’s holding of its own shares where share plan liabilities have
vested and shares have been transferred to the beneﬁ cial holders.

The Company’s principal subsidiary undertakings at 31 December 2010, their principal activities and countries of incorporation are set
out below:

Name of undertaking
Michael Page Recruitment Group Limited
Michael Page Holdings Limited
Michael Page International Holdings Limited
Michael Page International Recruitment Limited*
Michael Page International Southern Europe Limited*
Michael Page UK Limited
Michael Page Limited
Page Personnel (UK) Limited
Michael Page International Austria GmbH
Michael Page International (Belgium) NV/SA
Page Interim (Belgium) NV/SA
Michael Page International (France) SAS
Michael Page Financial Services SAS
Page Personnel SAS
Michael Page International (Deutschland) GmbH
Page Personnel (Deutschland) GmbH
Michael Page International (Ireland) Limited
Michael Page International Italia Srl
Page Personnel Italia SpA
Michael Page International (Nederland) BV
Page Interim BV
Michael Page International (Poland) Sp.z.o.o
Michael Page International Empressa de Trabalho Temporário e Serviços de Consultadoria Lda
Michael Page International RU LLC
Michael Page International (SA) (Pty) Limited
Michael Page International (Espana) SA
Michael Page Holding (Espana) SL
Page Personnel Seleccion España SA
Michael Page International (Sweden) AB
Michael Page International (Switzerland) SA
Michael Page International NEM Istihdam Danismanligi Limited Sirketi
Michael Page International (UAE) Limited
Michael Page International (Australia) Pty Limited
Michael Page International (Hong Kong) Limited
Michael Page (Beijing) Recruitment Co. Ltd

Country of incorporation
United Kingdom
United Kingdom
United Kingdom
United Kingdom
United Kingdom
United Kingdom
United Kingdom
United Kingdom
Austria
Belgium
Belgium
France
France
France
Germany
Germany
Ireland
Italy
Italy
Netherlands
Netherlands
Poland
Portugal
Russia
South Africa
Spain
Spain
Spain
Sweden
Switzerland
Turkey
United Arab Emirates
Australia
Hong Kong
China

Principal activity
Holding company
Support services
Holding company
Recruitment consultancy
Holding company
Recruitment consultancy
Recruitment consultancy
Recruitment consultancy
Recruitment consultancy
Recruitment consultancy
Recruitment consultancy
Recruitment consultancy
Support services
Recruitment consultancy
Recruitment consultancy
Recruitment consultancy
Recruitment consultancy
Recruitment consultancy
Recruitment consultancy
Recruitment consultancy
Recruitment consultancy
Recruitment consultancy
Recruitment consultancy
Recruitment consultancy
Recruitment consultancy
Recruitment consultancy
Holding company
Recruitment consultancy
Recruitment consultancy
Recruitment consultancy
Recruitment consultancy
Recruitment consultancy
Recruitment consultancy
Recruitment consultancy
Recruitment consultancy

Michael Page International

S
T
N
E
M
E
T
A
T
S
L
A
C
N
A
N
F

13. INVESTMENTS (CONTINUED)

Name of undertaking
Michael Page (Shanghai) Recruitment Co. Ltd
Michael Page International (Shanghai) Consulting Ltd
Michael Page International (Japan) K.K.
Michael Page International (NZ) Limited.
Michael Page International Pte Limited*
Michael Page International Argentina SA
Michael Page Do International (Brasil) Recrutamento Especializado Ltda
Page Personnel Do Recruit. Especializ. E Servs. Corpor. Ltda
Michael Page International Canada Limited
Michael Page International Chile Ltda
Michael Page International Mexico Reclutamiento Especializado, S.A. de C.V.
Michael Page International Inc*

Country of incorporation
China
China
Japan
New Zealand
Singapore
Argentina
Brazil
Brazil
Canada
Chile
Mexico
United States

Principal activity
Recruitment consultancy
Recruitment consultancy
Recruitment consultancy
Recruitment consultancy
Recruitment consultancy
Recruitment consultancy
Recruitment consultancy
Recruitment consultancy
Recruitment consultancy
Recruitment consultancy
Recruitment consultancy
Recruitment consultancy

*The equity of these subsidiary undertakings is held directly by Michael Page International plc. All companies have been included in the
consolidation and operate principally in their country of incorporation.

The percentage of the issued share capital held is equivalent to the percentage of voting rights held. The Group holds 100% of all classes
of issued share capital. The share capital of all the subsidiary undertakings comprise ordinary shares, with the exception of Michael Page
International Recruitment Limited which comprises 1 ordinary share and 421,544,426 preference shares.

14. TRADE AND OTHER RECEIVABLES

Current

Trade receivables

Less provision for impairment of receivables

Net trade receivables

Amounts due from Group companies

Other receivables

Prepayments and accrued income

Non-current

Prepayments and accrued income

Group
2010
£’000

141,120

(6,397)

134,723

–

5,035

28,547

168,305

2009
£’000

107,156

(6,959)

100,197

Company

2010
£’000

–

2009
£’000

–

552,102

472,676

13,102

20,103

133,402

–

8,972

552,108

481,679

1,145

2,021

–

Within other receivables in the 2009 comparative is a balance of £9.0m for fees paid in respect of the VAT refund by HMRC (note 5).

All non-current receivables are due within ﬁ ve years from the balance sheet date.

The Group’s exposure to credit and currency risks and impairment losses related to trade and other receivables is disclosed in Note 22.

15. TRADE AND OTHER PAYABLES

Current

Trade payables

Amounts owed to Group companies

Other tax and social security

Other payables

Accruals

Deferred income

Non-current

Deferred income

Other tax and social security

Michael Page International

Group

Company

2010
£’000

9,091

–

33,900

20,340

58,248

1,216

2009
£’000

7,304

–

75,262

18,583

40,223

1,378

2010
£’000

–

510,819

–

2009
£’000

–

400,476

49,990

–

122,795

142,750

510,830

450,492

1,830

2,326

4,156

2,334

547

2,881

–

F
N
A
N
C
A
L
S
T
A
T
E
M
E
N
T
S

15. TRADE AND OTHER PAYABLES (CONTINUED)

Within other tax and social security in the 2009 comparative is a balance of £50.0m relating to VAT repaid by HMRC (note 5).

The fair values of trade and other payables are not materially different to those disclosed above. There is no material effect on pre-tax
proﬁ t if the instruments are accounted for at fair value or amortised cost.

The total liability relating to other tax and social security includes a balance of £3.9m (2009: £2.5m) relating to social charges on share
based payments.

The Group’s exposure to currency and liquidity risk related to trade and other payables is disclosed in Note 22.

16. BANK OVERDRAFTS

Bank overdrafts

The carrying amounts of the Group’s borrowings are all denominated in sterling.

Bank overdrafts are repayable on demand.

Group
2010
£’000

–

2009
£’000

Company

2010
£’000

–

2009
£’000

At 31 December 2010, the Group had available £50.0m (2009: £50.0m) of undrawn committed borrowing facilities in respect of which
all conditions precedent had been met.

The Group’s exposure to interest rate, foreign currency and liquidity risk for ﬁ nancial assets and liabilities is disclosed in Note 22.

17. DEFERRED TAX

The following are the major deferred tax assets and liabilities recognised by the Group, and the movements thereon, during the current
and prior reporting periods.

At 1 January 2009

Recognised in equity for the year

Recognised in proﬁ t or loss for the year

Exchange differences

At 1 January 2010

Recognised in equity for the year

Recognised in proﬁ t or loss for the year

Exchange differences

At 31 December 2010

Share-based
payments
£’000

(1,415)

(2,283)

(740)

–

(4,438)

(3,698)

1,184

–

(6,952)

Tax losses
£’000

(2,646)

–

(331)

–

Other
£’000

(1,538)

–

(899)

–

(2,977)

(2,437)

–

2,060

–

(917)

–

(2,367)

596

(4,208)

Total
£’000

(5,599)

(2,283)

(1,970)

–

(9,852)

(3,698)

877

596

(12,077)

Certain deferred tax assets and liabilities have been offset in accordance with the Group’s accounting policy. The following is the analysis
of the deferred tax balances (after offset) for balance sheet purposes:

Deferred tax assets

Deferred tax liabilities

2010
£’000

2009
£’000

(12,441)

(10,179)

364

(12,077)

327

(9,852)

At 31 December 2010, unremitted earnings of overseas Group companies amounted to £60.9m (2009: £52.2m). Unremitted earnings
may be liable to some overseas tax, but should not be liable to UK tax if they were to be distributed as dividends.

Certain of the Group’s overseas operations have current and prior year tax losses, the future utilisation of which is uncertain. Accordingly
the Group has not recognised a deferred tax asset of £8.2m (2009: £5.5m) in respect of tax losses of overseas companies. These tax
losses are available to offset future taxable proﬁ ts in the respective jurisdictions.

All of the deferred tax asset for losses of £0.9m is dependent on generating future taxable proﬁ ts. Of the recognised deferred tax asset,
£0.3m is recognised within territories that were loss making in the current year.

Michael Page International

S
T
N
E
M
E
T
A
T
S
L
A
C
N
A
N
F

18. CALLED-UP SHARE CAPITAL

Authorised

Ordinary shares of 1p each

Allotted, called-up and fully paid

At 1 January

Shares issued

Cancellation of own shares

At 31 December

Share Option Plans

2010

2009

£’000

Number of
shares

£’000

Number of
shares

5,713

571,250,000

5,713

571,250,000

3,234

323,424,875

3,220

321,990,067

(37)

1,874,930

(3,709,658)

–

1,434,808

–

3,216

321,590,147

3,234

323,424,875

The Group currently has share option awards outstanding under an Executive share option scheme (ESOS) and a share option scheme
(SOS). These plans are described below.

At 31 December 2010 the following options had been granted and remained outstanding in respect of the Company’s ordinary shares
of 1p under both the Michael Page Executive Share Option Scheme and the Share Option Scheme. All options granted are settled by
the physical delivery of shares. The Group has no legal or constructive obligation to repurchase or settle the options in cash.

Balance at
1 January
2010

1,670,017

115,000

107,500

235,000

439,000

1,080,000

1,256,312

2,181,889

2,622,500

6,910,000

Granted
in year

Exercised
in year

Lapsed
in year

No. of options
outstanding at
31 December
2010

Base
EPS

Exercise price
per share

Exercise period

–

(532,149)

(65,946)

1,071,922

n/a

175p March 2004 - March 2011

(48,700)

(39,500)

(99,700)

(156,000)

(425,381)

–

66,300

10.6

186p March 2005 - March 2012

68,000

135,300

283,000

5.8

4.1

186p March 2006 - March 2012

81.5p-86.1p

April 2006 - April 2013

171p-190.3p March 2007 - March 2014

654,619

7.5 190.75p-191.5p March 2008 - March 2015

(573,500)

(51,312)

631,500

–

(2,181,889)

–

(241,919)

2,380,581

(459,089)

6,450,911

(112,917)

11,354,583

15.5

21.3

30.4

n/a

309.9p March 2009 - March 2016

464.5p-494.1p March 2010 - March 2017

255.94-285p March 2011 - March 2018

187.5-211.84p March 2012 - March 2019

381.5-383.0p March 2013 - March 2020

–

11,467,500

16,617,218

11,467,500

(1,874,930)

(3,113,072)

23,096,716

2.46

2.15

3.82

3.91

2.98

Year of grant

2001 (Note 1)

2002 (Note 2)*

2003 (Note 2)*

2004 (Note 2)*

2005 (Note 2)*

2006 (Note 2)*

2007 (Note 2)

2008 (Note 2)

2009 (Note 3)

2010 (Note 2)

Total 2010

Weighted average exercise
price 2010 (£)

Total 2009

12,200,942

7,205,000

(1,434,808)

(1,353,916)

16,617,218

Weighted average exercise
price 2009 (£)

2.79

1.91

3.04

2.46

*These options have fully vested

2,161,716 options were exercisable at the end of 2010 at a weighted average exercise price of £2.14 (2009: £2.14). The weighted
average share price at the date of exercise was £4.55.

Executive Share Option Scheme (ESOS)

Using the ESOS, awards of share options can be made to key management personnel and senior employees to receive shares in the
entity. Share options are exercisable at the market price of the shares at the date of the grant.

Two grants under the ESOS were made before 7 November 2002. The recognition and measurement principles in IFRS 2 have
been applied to all grants after 7 November 2002. They have not been applied to the two grants made prior to 7 November 2002 in
accordance with the transitional provisions in IFRS 1 “First-time Adoption of International Financial Reporting Standards” and IFRS 2
“Share-based Payment”.

No awards were made under the ESOS scheme in 2009.

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18. CALLED-UP SHARE CAPITAL (CONTINUED)

ESOS plan details

Note 1 Pre ﬂ otation options

On ﬂ otation, options over 33,750,000 (9%) ordinary shares were granted to the Executive Directors and 427 employees.

An individual’s option entitlement will normally only be exercisable to the extent that share price growth targets have been satisﬁ ed over
a period of at least 3 years. None of these options will vest unless the Company’s share price has achieved 50% growth after 3 years
and not later than 5 years. At that point one third of this portion of the options vest.

Vesting then increases progressively for further share price growth until full vesting occurs where there is 200% growth after
3 years and not later than 5 years. These hurdles rise from the ﬁ fth anniversary of the date of grant at compound rates of growth of 8.45%
and 24.57% respectively. At 31 December 2010, the performance conditions were met for 81.8% (2009: 81.8%) of the outstanding
share price dependent options.

At 31 December 2010, 18.2% of the options remained unvested (2009: 18.2%). In order for these remaining options to have vested by
31 December 2010 a share price of £12.57 (2009: £10.96) would have been required.

At this stage it is not expected that the remaining 18.2% of options will vest prior to the awards lapsing on 31 March 2011.

Note 2 Grants post ﬂ otation

For grants since 2004, the performance condition is tested on the third anniversary and no retesting will occur thereafter. These options
were granted subject to a performance condition requiring that an option may only be exercised, in normal circumstances, if there has
been an increase in base earnings per share of at least 3% per annum above the growth in the UK Retail Price Index. The respective
base earnings per share for each grant are shown in the table on page 80.

For the 2010 share option grant for Executive Directors only, the vesting of awards will be subject to proﬁ t before tax performance conditions
measured over a three year period. Vesting will occur on a phased basis, with 30% of the award vesting for threshold performance,
increasing on a straight line basis to 100% of the award for maximum performance.

Share Option Scheme (SOS)

Note 3

Executive Directors of the Company are not eligible to participate in this scheme. Any exercises of awards made under this plan must
be settled by market purchased shares.

This new scheme was created in 2009 to provide an effective plan under which to grant awards in 2009. It was the Board’s view that
grants made under the existing ESOS plan, which would have required an increase over the 2008 base earnings per share of at least
3% per annum above the growth in the UK Retail Price Index by 2011, would be achievable due to the impact of the global downturn
on the Group’s EPS and thus would not provide the required retention incentive.

The 2009 grant made under the SOS plan is subject to a performance condition that will be tested, initially, three years after the date of
grant and then annually until either the entire grant has vested, or ten years from the date of the award have elapsed, in which case any
awards outstanding under the grant will lapse. The performance condition is directly linked to the Group’s Operating Proﬁ t. If Operating
Proﬁ t is £30m then 30% of the award would vest. For every £1m of Operating Proﬁ t over £30m, a further 1% would vest. 100% of the
award would vest if Operating Proﬁ t was £100m.

Share Option valuation and measurement

In 2010, options were granted on 9 March with the estimated fair values of the options granted on that day of £1.17. In 2009, options
were granted on 9 March. The estimated fair values of the options granted on that date was £0.76.

Share options are granted under service and non-market performance conditions. These conditions are not taken into account in the
fair value measurement at grant date. There are no market conditions associated with the share option grants other than those on the
initial grant in 2001.

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18. CALLED-UP SHARE CAPITAL

Share Option valuation and measurement

The options outstanding at 31 December 2010 have an exercise price in the range of 81.5 pence to 494.1 pence and a weighted average
contractual life of 7.8 years. The fair values of options granted during the year were calculated using the Black-Scholes option pricing
model. The inputs into the model were as follows:

Share price (£)

Average exercise price (£)

Weighted average fair value (£)

Expected volatility

Expected life

Risk free rate

Expected dividend yield

Share Option Plans

Incentive Share Scheme

Deferred Bonus Shares

2010

3.82

1.17

38%

5 years

2.99%

2.10%

2009

1.88

1.91

0.76

63%

5 years

2.19%

4.27%

2010

–

2009

1.88

Nil

1.88

63%

3 years

2.04%

Nil

2010

–

2009

1.88

Nil

1.88

63%

2 years

1.46%

Nil

Expected volatility was determined by reference to historical volatility of the Company’s share price since ﬂ otation. 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. Expectations of early exercise are incorporated into the Black-Scholes option pricing model.

The Group recognised total expenses of £10.0m (2009: £8.5m) related to equity-settled share-based payment transactions during
the year.

Other share-based payment plans

The Company also operates an Incentive Share Plan for the Executive Directors and senior employees and an Annual Bonus Plan for
the Executive Directors. Details of these schemes are disclosed on pages 50 and 51, and are settled by the physical delivery of shares,
currently satisﬁ ed by shares held in the Employee Beneﬁ t Trust, to the extent that service and performance conditions are met.

19. RESERVES

Share premium

The share premium account has been established to represent the excess of the exercise share price over the nominal value of the
shares on the exercise of share options.

Capital redemption reserve

The movement in the capital redemption reserve relates to the cancellation of the Company’s own shares.

Reserve for shares held in the employee beneﬁ t trust

At 31 December 2010, the reserve for shares held in the employee beneﬁ t trust consisted of 18,955,701 ordinary shares
(2009: 5,925,597 ordinary shares) held for the purpose of satisfying awards made under the Incentive Share Plan, the Annual
Bonus Plan and the Share Option Scheme (SOS), representing 5.9% of the called-up share capital with a market value of £105.2m
(2009: £22.5m).

A total of 6,941,429 shares have been allocated to satisfy share awards made under the Incentive Share Plan, 370,643 deferred shares
have been allocated to the Annual Bonus Plan and 6,307,500 shares have been allocated to satisfy share options. Dividends are paid
on 4,778,489 of these shares and they are included in the EPS calculation.

Following the allocation of awards made under the above mentioned plans, to date 5,336,129 ordinary shares remain unallocated in the
reserve and there are 14,177,212 shares that are treated as non-dilutive and on which dividends are waived.

Currency translation reserve

The translation reserve comprises all foreign exchange differences arising from the translation of the ﬁ nancial statements of foreign
operations that are integral to the operations of the Company.

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20. CASH FLOWS FROM OPERATING ACTIVITIES

Group

Company

Proﬁ t before tax

Non-recurring income

Proﬁ t before tax and non-recurring income

Depreciation and amortisation charges

Loss on sale of property, plant and equipment, and computer software

Share scheme charges

Net ﬁ nance (income)/expense - including NRI

Operating cash ﬂ ow before changes in working capital and NRI

(Increase)/decrease in receivables

Increase/(decrease) in payables

Cash generated from underlying operations

Decrease/(increase) in VAT claim related receivables

(Decrease)/increase in VAT claim related payables

Non-recurring income

Cash generated from operations

21. CASH AND CASH EQUIVALENTS

Cash at bank and in hand

Short-term deposits

Cash and cash equivalents

Bank overdrafts

Cash and cash equivalents in the statement of cash ﬂ ows

Net funds/(debt)

2010
£’000

100,656

(17,125)

83,531

10,579

151

10,049

(12,004)

92,306

(41,107)

30,451

81,650

8,972

(49,990)

28,460

69,092

Group
2010
£’000

73,178

7,353

80,531

–

80,531

2009
£’000

21,068

–

21,068

11,268

383

8,491

(865)

40,345

70,911

(37,497)

73,759

(8,972)

49,990

–

114,777

2009
£’000

127,293

9,935

137,228

(43)

137,185

2010
£’000

45,030

(17,125)

27,905

–

(11,264)

16,641

(79,404)

111,361

48,598

8,972

(49,990)

28,460

36,040

2009
£’000

73,567

–

73,567

–

332

73,899

(90,895)

62,070

45,074

(8,972)

49,990

–

86,092

Company

2010
£’000

–

2009
£’000

–

(43)

The Group operates a multi-currency notional cash pool. Currently the main Eurozone subsidiaries and the UK-based Group Treasury
subsidiary participate in this cash pool, although it is the Group’s intention to extend the scope of the participation to other Group
companies going forward. The structure facilitates interest and balance compensation of cash and bank overdrafts.

22. FINANCIAL RISK MANAGEMENT

The Group has exposure to the following risks from its use of ﬁ nancial instruments:

(i) credit risk

(ii)

liquidity risk

(iii) market risk

This note presents information about the Group’s exposure to each of the above risks, the Group’s objectives, policies and processes
for measuring and managing risk, and the Group’s management of capital. Further quantitative disclosures are included throughout
these consolidated ﬁ nancial statements.

The Board of Directors has overall responsibility for the establishment and oversight of the Group’s risk management framework.
The Group’s risk management policies are established to identify and analyse the risks faced by the Group, to set appropriate risk limits
and controls, and to monitor risks and adherence to limits. Risk management policies and systems are reviewed regularly to reﬂ ect
changes in market conditions and the Group’s activities. The Group, through its training and management standards and procedures,
aims to develop a disciplined and constructive control environment in which all employees understand their roles and obligations.

The Group Audit Committee oversees how management monitors compliance with the Group’s risk management policies and procedures
and reviews the adequacy of the risk management framework in relation to the risks faced by the Group. The Group Audit Committee
is assisted in its oversight role by Internal Audit. Internal Audit undertakes both regular and ad hoc reviews of risk management controls
and procedures, the results of which are reported to the Audit Committee.

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22. FINANCIAL RISK MANAGEMENT (CONTINUED)

(i) Credit risk

Credit risk is the risk of ﬁ nancial loss to the Group if a client or counterparty to a ﬁ nancial instrument fails to meet its contractual obligations,
and arises principally from the Group’s receivables from clients and investment securities. Management has a credit policy in place and
the exposure to credit risk is monitored on an ongoing basis.

At the balance sheet date there were no signiﬁ cant concentrations of credit risk. The maximum exposure to credit risk is represented
by the carrying amount of each ﬁ nancial asset in the balance sheet.

Trade and other receivables

Total trade receivables (net of allowances) held by the Group at 31 December 2010 amounted to £134.7m (2009: £100.2m).

An initial credit period is made available on invoices. No interest is charged on trade receivables from the date of the invoice during this
credit period. Thereafter, interest is charged on the outstanding balance. The Group has provided fully for all receivables over 150 days
because historical experience is such that receivables past due beyond 150 days are generally not recoverable. Trade receivables below
150 days are provided for based on estimated irrecoverable amounts from the provision of our services, determined by reference to
past default experience.

Included in the Group’s trade receivables balance are debtors with a carrying amount of £54.0m (2009: £37.4m) that are past due at
the reporting date for which the Group has not provided as the amounts are still considered recoverable. The Group does not hold any
collateral over these balances. The average age of these receivables is 41 days in excess of the initial credit period (2009: 40 days).

The ageing of trade receivables at the reporting date was:

Not past due

Past due 0-30 days

Past due 31-150 days

More than 150 days

Gross trade
receivables
2010
£’000

Provision
2010
£’000

Gross trade
receivables
2009
£’000

81,685

38,755

16,145

4,535

141,120

982

162

718

4,535

6,397

62,942

27,880

11,466

4,868

107,156

Provision
2009
£’000

167

1,839

4,868

6,959

The Group’s exposure to credit risk is inﬂ uenced mainly by the individual characteristics of each client. The demographics of the Group’s
client base, including the country in which clients operate, also has an inﬂ uence on credit risk. Less than 3% of the Group’s revenue is
attributable to sales transactions with a single client. The geographic diversiﬁ cation of the Group’s revenue also reduces the concentration
of credit risk.

The majority of the Group’s clients have been transacting with the Group for several years, with losses rarely occurring. In monitoring
client credit risk, clients are grouped according to their credit characteristics, including geographic location, industry, ageing proﬁ le,
maturity and existence of previous ﬁ nancial difﬁ culties.

Movement in the allowance for doubtful debts

Balance at beginning of the year

Impairment losses recognised on receivables

Amounts written off as uncollectable

Amounts recovered during the year

Impairment losses reversed

Balance at end of the year

2010
£’000

6,959

6,370

(1,279)

(3,062)

(2,591)

6,397

2009
£’000

7,708

8,665

(1,932)

(4,131)

(3,351)

6,959

The majority of the allowance for doubtful debts are individually impaired trade receivables with a balance of £3.2m (2009: £3.4m) which
have been placed in litigation, as well as a further provision for debts of 150 days and over.

The impairment recognised represents the difference between the carrying amount of these trade receivables and the present value of
the expected liquidation proceeds. The Group does not hold any collateral over these balances.

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22. FINANCIAL RISK MANAGEMENT (CONTINUED)

(i) Credit risk (continued)

Exposure to credit risk

The maximum exposure to credit risk for trade receivables at the reporting date by geographic region was:

EMEA

United Kingdom

Asia Paciﬁ c

Americas

The maximum exposure to credit risk for accrued income at the reporting date by geographic region was:

EMEA

United Kingdom

Asia Paciﬁ c

Americas

Carrying amount

2010
£’000

68,043

40,142

15,098

11,440

2009
£’000

55,783

28,705

9,384

6,325

134,723

100,197

Carrying amount

2010
£’000

1,079

8,713

5,983

3,026

2009
£’000

586

5,830

3,577

1,183

18,801

11,176

The entire accrued income balance is not past due. The fair values of trade and other receivables are not materially different to those
disclosed above and in note 14. There is no material effect on pre-tax proﬁ t if the instruments are accounted for at fair value or amortised
cost.

(ii) Liquidity risk management

Ultimate responsibility for liquidity risk management rests with the Board, which has built an appropriate liquidity risk management
framework that aims to ensure that the Group has sufﬁ cient cash or credit facilities at all times to meet all current and forecast liabilities
as they fall due. It is the Directors’ intention to continue to ﬁ nance the activities and development of the Group from retained earnings.

Cash surpluses are invested in short-term deposits, with any working capital requirements being provided from Group cash resources,
Group facilities, or by local overdraft facilities. Cash generated in excess of these requirements will be used to buy back the Company’s
shares. The Group also operates a multi-currency notional cash pool to facilitate interest and balance compensation of cash and
bank overdrafts.

The following are the contractual maturities of ﬁ nancial liabilities.

2010

Trade payables

Accruals and other payables

Bank overdraft

2009

Trade payables

Accruals and other payables

Bank overdraft

Less than
1 month
£’000

5,625

37,597

–

Less than
1 month
£’000

5,360

26,849

Carrying amount

1-3 months
£’000

3-12 months
£’000

3,010

24,885

–

456

25,386

–

Carrying amount

1-3 months
£’000

3-12 months
£’000

1,728

71,327

–

216

13,425

–

More than
12 months
£’000

–

4,156

–

More than
12 months
£’000

2,881

–

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22. FINANCIAL RISK MANAGEMENT (CONTINUED)

(iii) Market risk and sensitivity analysis

The Group’s activities expose it primarily to the ﬁ nancial risks of changes in foreign currency exchange rates and interest rates, but these
risks are not deemed to be material. However, a sensitivity analysis showing hypothetical ﬂ uctuations in Pounds Sterling against the
Group’s main exposure currencies is shown on page 87. There has been no material change in the Group’s exposure to market risks
or the manner in which it manages and measures the risk.

For additional information on market risk, refer to ‘Treasury management and currency risk’ in the Business Review.

Interest rate risk management

Borrowings are arranged at ﬂ oating rates, thus exposing the Group to cash ﬂ ow interest rate risk. The Group does not consider this risk
as signiﬁ cant. The benchmark rates for determining ﬂ oating rate liabilities are based on relevant national LIBOR equivalents.

The average interest rate paid on bank overdrafts was 1.82% (2009: 2.4%).

Currency rate risk

We publish our results in Pounds Sterling and conduct our business in many foreign currencies. As a result, we are subject to foreign
currency exchange risk due to exchange rate movements. We are exposed to foreign currency exchange risk as a result of transactions
in currencies other than the functional currencies of some of our subsidiaries and the translation of the results and underlying net assets
of our foreign subsidiaries.

The main functional currencies of the Group are Sterling, Euro and Australian Dollar. The Group does not have material transactional
currency exposures, nor is there a material exposure to foreign denominated monetary assets and liabilities. The Group is exposed to
foreign currency translation differences in accounting for its overseas operations although our policy is not to hedge this exposure.

In certain cases, where the Group gives or receives short-term loans to and from other Group companies with different reporting
currencies, it may use foreign exchange swap derivative ﬁ nancial instruments to manage the currency and interest rate exposure that
arises on these loans. It is the Group’s policy not to seek to designate these derivatives as hedges.

All derivative ﬁ nancial instruments not in a hedge relationship are classiﬁ ed as derivatives at fair value through the income statement.
The group does not use derivatives for speculative purposes. All transactions in derivative ﬁ nancial instruments are undertaken to manage
the risks arising from underlying business activities.

Information on the fair value of derivative ﬁ nancial instruments held at the balance sheet date is shown in the table below.

Derivatives Financial Instruments

Derivative Assets

Derivative Liabilities

Sensitivity analysis - currency risk

Contract amounts

2010
£m

30.8

2009
£m

10.0

(10.0)

Derivatives at fair value
2009
£m

2010
£m

31.1

30.9

10.0

(10.1)

A 10 percent strengthening of Sterling against the following currencies at 31 December would have increased/(decreased) equity and
proﬁ t or loss by the amounts shown on page 87. This analysis is applied currency by currency in isolation, i.e. ignoring the impact of
currency correlation, and assumes that all other variables, in particular interest rates, remain constant. The analysis is performed on the
same basis for 2009.

The amounts generated from the sensitivity analysis are forward-looking estimates of market risk assuming certain adverse market
conditions occur. Actual results in the future may differ materially from those projected, due to developments in the global ﬁ nancial
markets which may cause ﬂ uctuations in interest and exchange rates to vary from the hypothetical amounts disclosed in the table below,
which therefore should not be considered a projection of likely future events and losses.

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22. FINANCIAL RISK MANAGEMENT (CONTINUED)

Sensitivity analysis - currency risk (continued)

Euro

Australian Dollar

Swiss Franc

Hong Kong Dollar

Brazilian Real

United States Dollar

Other

Euro

Australian Dollar

Hong Kong Dollar

Swiss Franc

Brazilian Real

United States Dollar

Other

2010 Equity
£’000

(2,816)

(1,799)

(1,879)

(642)

(1,333)

356

(1,609)

2009 Equity
£’000

(3,915)

(1,342)

(706)

(492)

(1,035)

169

(783)

PBT
£’000

287

(819)

(751)

(369)

(743)

618

(656)

PBT
£’000

5,167

1,317

486

711

641

950

A 10 percent weakening of sterling against the above currencies at 31 December would have had the equal but opposite effect on the
above currencies to the amounts shown above, on the basis that all other variables remain constant.

23. COMMITMENTS

Operating lease commitments

At 31 December 2010 the Group was committed to make the following payments in respect of non-cancellable operating leases:

Leases which expire:

Within one year

Within two to ﬁ ve years

After ﬁ ve years

Land and buildings

2010
£’000

2,758

32,566

54,174

89,498

2009
£’000

1,677

38,034

55,386

95,097

Other
2010
£’000

1,150

3,942

–

5,092

2009
£’000

316

4,901

–

5,217

The Group leases various ofﬁ ces under non-cancellable operating lease agreements. The leases have varying terms, escalation clauses
and renewal rights.

The Group also leases various plant and machinery under operating lease agreements. The Group is required to give a varying notice
for the termination of these agreements.

Capital commitments

The Group had contractual capital commitments of £1.2m as at 31 December 2010 (2009: £0.1m) relating to property, plant and equipment.
The Group had contractual capital commitments of £2.0m as at 31 December 2010 (2009: £1.6m) relating to computer software.

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24. CONTINGENT LIABILITIES

The Company has provided guarantees to other Group undertakings amounting to £80k (2009: £2.3m) in the ordinary course of business.
It is not anticipated that any material liabilities will arise from the contingent liabilities.

VAT group registration

As a result of group registration for VAT purposes, the Company is contingently liable for VAT liabilities arising in other companies within
the VAT group which at 31 December 2010 amounted to £4.6m (2009: £2.6m).

25. EVENTS AFTER THE BALANCE SHEET DATE

Between 31 December 2010 and 4 March 2011, 114,007 options were exercised, leading to an increase in share capital of £1,140 and
an increase in share premium of £234,422.

26. RELATED PARTY TRANSACTIONS

Identity of related parties

The Group has a related party relationship with its Directors and members of the Executive Board, and subsidiaries (Note 13).

Transactions with key management personnel

Key management personnel are deemed to be the Directors and members of the Executive Board. The remuneration of Directors and
members of the Executive Board is determined by the Remuneration Committee having regard to the performance of individuals and
market trends. For transactions with Directors see the Remuneration Report on pages 48 to 55. Over and above these transactions,
equity settled transactions for the year were £1.6m (2009: £1.1m). Transactions with the remaining members of the Executive Board
are disclosed below:

Short-term employee beneﬁ ts

Pension costs - deﬁ ned contribution plans

2010
£’000

1,853

2009
£’000

1,822

112

The decrease in emoluments in the current year represents a decrease in the bonus award.

In addition to their salaries, the Group also provides non-cash beneﬁ ts to members of the Executive Board, and contributes to a post-
employment deﬁ ned contribution pension plan on their behalf, details of which are given in Note 1.

Transactions between the Group and its subsidiaries, which are related parties of the Company, have been eliminated on consolidation.
Details of transactions between the parent company and subsidiary undertakings are shown below.

Dividends received

2010
£’000

17,671

2009
£’000

75,965

Amounts owed by
related parties

Amounts owed to
related parties

2010
£’000

2009
£’000

2010
£’000

2009
£’000

552,102

472,676

510,819

400,476

Michael Page International

5-YEAR
SUMMARY

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Revenue

Gross proﬁ t

Operating proﬁ t

Proﬁ t before tax

Proﬁ t attributable to equity holders

Conversion

2006
£’000

649,060

348,817

97,367

96,959

65,447

27.9%

2007
£’000

831,640

478,094

149,432

147,441

101,734

31.3%

2008
£’000

972,782

552,702

140,501

140,056

97,339

25.4%

2009
£’000

716,722

351,694

20,203

21,068

12,430

5.7%

2010
£’000

832,296

442,207

88,652*

100,656*

67,484*

20.0%*

Basic earnings per share (pence)

19.6

31.1

30.3

3.9

21.6*

*Includes non-recurring items (Note 5).

Michael Page International

S SHAREHOLDER
INFORMATION
AND ADVISERS

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Michael Page International

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ANNUAL GENERAL MEETING
To be held on 20 May 2011 at 12.00 noon at Page House, The Bourne Business Park, 1 Dashwood Lang Road, Addlestone, Weybridge,
Surrey, KT15 2QW. Every shareholder is entitled to attend and vote at the meeting.

FINAL DIVIDEND FOR THE YEAR ENDED 31 DECEMBER 2010
To be paid (if approved) on 6 June 2011 to shareholders on the register on 6 May 2011.

COMPANY SECRETARY
Kelvin Stagg

COMPANY NUMBER
3310225

REGISTERED OFFICE, DOMICILE AND LEGAL FORM
The Company is a limited liability company incorporated and domiciled within the United Kingdom.
The address of its registered ofﬁ ce is:

Page House, The Bourne Business Park, 1 Dashwood Lang Road, Addlestone, Weybridge, Surrey KT15 2QW.

Tel: 01932 264144
Fax: 01932 264297

Auditor

Solicitors

Registrars

Deloitte LLP
Chartered Accountants
2 New Street Square
London EC4A 3BZ

Herbert Smith LLP
Exchange House
Primrose Street
London EC2A 2HS

Joint Corporate Brokers

Citigroup
33 Canada Square
Canary Wharf
London E14 5LB

Deutsche Bank
Winchester House
1 Great Winchester Street
London EC2N 2DB

Capita Registrars Ltd
The Registry
34 Beckenham Road
Beckenham
Kent BR3 4TU

Bankers

HSBC Bank plc
West End Business
Banking Centre
70 Pall Mall
London SW1Y 5GZ

KEY DATES
Ex-Dividend date
Record date
Annual General Meeting
Payment of proposed ﬁ nal ordinary dividend
Interim results announcement

ABN AMRO Bank N.V.
Corporate Clients
De Entree 99
1101 HE Amsterdam
The Netherlands

4 May 2011
6 May 2011
20 May 2011
6 June 2011
15 August 2011

Michael Page International

N ARTICLES OF
ASSOCIATION

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Michael Page International

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The following summarises certain provisions of the Company’s Articles of Association (as adopted on 21 May 2010) and applicable
English Law. The summary is qualiﬁ ed in its entirety by reference to the Companies Act 2006 of Great Britain (the “Act”), as amended,
and the Company’s Articles of Association.

Under the Act, the Memorandum of Association of the Company has now become a document of record, and no longer contains any
operative provisions.

INCORPORATION

The Company is incorporated under the name Michael Page International plc and is registered in England and Wales with registered
number 3310225.

SHARE CAPITAL

The Act abolished the concept of, and requirement for a company to have, an authorised share capital. As such, the Company no longer
has an authorised share capital.

ALTERATION OF CAPITAL

The Company may from time to time by ordinary resolution:

(a) consolidate and divide all or any of its share capital into shares of larger amount than its existing shares;

(b) sub-divide its shares, or any of them, into shares of a smaller amount than its existing shares; and

(c)

determine that, as between the shares resulting from such a sub-division, any of them may have any preference or advantage as
compared with the others.

Subject to the provisions of the Act, the Company may by special resolution reduce its share capital, any capital redemption reserve
and any share premium account, in any way.

PURCHASE OF OWN SHARES

Subject to the provisions of the Act, the Company may purchase its own shares, including redeemable shares. The Company proposes
to renew its authority to purchase its own shares for another year in item 17 of the Annual General Meeting notice.

GENERAL MEETINGS AND VOTING RIGHTS

The Directors may call general meetings whenever and at whatever time and location they so determine. Subject to the provisions of
the Act, an annual general meeting and all general meetings (which shall be called extraordinary general meetings) shall be called by
at least 21 clear days’ notice. Subject to the provisions of the Act, the Company may resolve to reduce the notice period for general
meetings (other than annual general meetings) to 14 days on an annual basis. The Company proposes to renew its authority to hold
general meetings on 14 days’ notice for another year in item 18 of the Annual General Meeting notice. Two persons entitled to vote upon
the business to be transacted shall be a quorum.

The Articles of Association provide that subject to any rights or restrictions attached to any shares, on a show of hands every member
and every duly appointed proxy present shall have one vote. Every corporate representative present who has been duly authorised by
a corporation has the same voting rights as the corporation would be entitled to. On a poll every member present in person or by a
duly appointed proxy or corporate representative shall have one vote for every share of which he is a holder or in respect of which his
appointment as proxy or corporate representative has been made. No member shall be entitled to vote in respect of any share held by
him if any call or other sum payable by him to the Company remains unpaid.

If a member or any person appearing to be interested in shares held by a member has been duly served with a notice under the Act
and is in default for the prescribed period in supplying to the Company information thereby required, unless the Directors otherwise
determine, the member shall not be entitled in respect of the default shares to be present or to vote (either in person or by representative
or proxy) at any general or class meeting of the Company or on any poll or to exercise any other right conferred by membership in
relation to such meeting or poll. In certain circumstances, any dividend due in respect of the default shares shall be withheld and certain
certiﬁ cated transfers may be refused.

A member entitled to more than one vote need not, if he votes, use all his votes or cast all the votes he uses in the same way. A member
is entitled to appoint another person as his proxy to exercise all or any of his rights to attend and speak and vote at a meeting of the
Company. A proxy need not be a member. A member may appoint more than one proxy to attend on the same occasion. This does
not preclude the member from attending and voting at the meeting or at any adjournment of it.

Michael Page International

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LIMITATIONS AND NON-RESIDENT OR FOREIGN SHAREHOLDERS

English law treats those persons who hold the shares and are neither UK residents nor nationals in the same way as UK residents or
nationals. They are free to own, vote on and transfer any shares they hold.

VARIATION OF RIGHTS

If at any time the capital of the Company is divided into different classes of shares, the rights attached to any class of may be varied either:

(a)

in such manner (if any) as may be provided by those rights; or

(b) in the absence of any such provision, with the consent in writing of the holders of three-quarters in nominal value of the issued
shares of the class (excluding any shares of that class held as treasury shares) or with the sanction of a special resolution passed
at a separate general meeting of the holders of the shares of the class,

but not otherwise, and may be so varied either whilst the Company is a going concern or during, or in contemplation of, a winding-up.
At every such separate general meeting the necessary quorum shall be at least two persons together holding or representing by proxy
at least one-third in nominal value of the issued shares of the class (excluding any shares of that class held as treasury shares), save
that at any adjourned meeting any holder of shares of the class (other than treasury shares) present or by proxy shall be a quorum.
Unless otherwise expressly provided by the rights attached to any class of shares, those rights shall be deemed not to be varied by the
purchase by the Company of any of its own shares or the holding of such shares as treasury shares.

DIVIDEND RIGHTS

Holders of the Company’s ordinary shares may by ordinary resolution declare dividends but no such dividend shall exceed the amount
recommended by the Directors. If, in the opinion of the Directors, the proﬁ ts of the Company available for distribution justify such
payments, the Directors may, from time to time, pay interim dividends on the shares of such amounts and on such dates and in respect
of such periods as they think ﬁ t. The proﬁ ts of the Company available for distribution and resolved to be distributed shall be apportioned
and paid proportionately to the amounts paid up on the shares during any portion of the period in respect of which the dividend is paid.
The members may, at a general meeting declaring a dividend upon the recommendation of the Directors, direct that it shall be satisﬁ ed
wholly or partly by the distribution of speciﬁ c assets.

No dividend shall be paid otherwise than out of proﬁ ts available for distribution as speciﬁ ed under the provisions of the Act.

Any dividend unclaimed after a period of twelve years from the date of declaration of such dividend shall, if the Directors so resolve,
be forfeited and shall revert to the Company.

CALLS ON SHARES

Subject to the terms of allotment, the Directors may make calls upon members in respect of any amounts unpaid on their shares
(whether in respect of nominal value or premium) and each member shall pay to the Company as required by the notice the amount
called on his shares.

TRANSFER OF SHARES

Any member may transfer all or any of his shares in certiﬁ cated form by instrument of transfer in the usual common form or in any other
form which the Directors may approve. The transfer instrument shall be signed by or on behalf of the transferor and, except in the case
of fully-paid shares, by or on behalf of the transferee.

Where any class of shares is for the time being a participating security, title to shares of that class which are recorded as being held in
uncertiﬁ cated form, may be transferred (to not more than four transferees) by the relevant system concerned.

The Directors may in their absolute discretion refuse to register any transfer of shares (being shares which are not fully paid or on which
the Company has a lien), provided that if the share is listed on the Ofﬁ cial List of the UK Listing Authority such refusal does not prevent
dealings in the shares from taking place on an open and proper basis.

The Directors may also refuse to register a transfer of shares (whether fully paid or not) unless the transfer instrument:

(a)

is lodged at the registered ofﬁ ce, or such other place as the Directors may appoint, accompanied by the relevant share certiﬁ cate(s);

(b) is in respect of only one class of share; and

(c)

is in favour of not more than four transferees.

The Directors of the Company may refuse to register the transfer of a share in uncertiﬁ cated form to a person who is to hold it thereafter
in certiﬁ cated form in any case where the Company is entitled to refuse (or is excepted from the requirements) under the Uncertiﬁ cated
Securities Regulations 2001 to register the transfer.

Michael Page International

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DIRECTORS

The Company’s Articles of Association provide for a Board of Directors, consisting of (unless otherwise determined by the Company
by ordinary resolution) not fewer than two Directors, who shall manage the business of the Company. The Directors may exercise all
the powers of the Company, subject to the provisions of the Articles of Association and any directions given by special resolution.
If the quorum is not ﬁ xed by the Directors, the quorum shall be two.

Subject to the provisions of the Company’s Articles of Association, the Directors may delegate any of their powers:

(a) to such person or committee;

(b) by such means (including power of attorney);

(d) in relation to such matters or territories; and

(e) on such terms and conditions

as in each case they think ﬁ t, and such delegation may include authority to sub-delegate all or any of the powers delegated, may be
subject to conditions and may be revoked or varied.

The Directors may also, by power of attorney or otherwise, appoint any person, whether nominated directly or indirectly by the Directors,
to be the agent of the Company for such purposes and subject to such conditions as they think ﬁ t, and may delegate any of their powers
to such an agent.

The Articles of Association place a general prohibition on a Director voting on any resolution concerning a matter in which he has,
directly or indirectly, a material interest (other than an interest in shares, debentures or other securities of, or otherwise in or through the
Company), unless his interest arises only because the case falls within one or more of the following:

(a)

the giving to him of a guarantee, security, or indemnity in respect of money lent to, or an obligation incurred by him for the beneﬁ t
of, the Company or any of its subsidiary undertakings;

(b) the giving to a third party of a guarantee, security, or indemnity in respect of an obligation of the Company or any of its subsidiary
undertakings for which the Director has assumed responsibility in whole or in part and whether alone or jointly with others under a
guarantee or indemnity or by the giving of security;

(c)

the giving to him of any other indemnity which is on substantially the same terms as indemnities given or to be given to all of the
other directors and/or the funding by the Company of this expenditure on defending proceedings or the doing by the Company of
anything to enable him to avoid incurring such expenditure where all other directors have been given or are to be given substantially
the same arrangements;

(d) the purchase or maintenance for any director or directors of insurance against liability;

(e)

his interest arises by virtue of his being, or intending to become a participant in the underwriting or sub-underwriting of an offer of
any shares in or debentures or other securities of the Company for subscription, purchase or exchange;

(f)

any arrangement for the beneﬁ t of the employees and directors and/or former employees and former directors of the Company or
any of its subsidiaries and/or the members of their families or any person who is or was dependent on such persons, including but
without being limited to a retirement beneﬁ ts scheme and an employees’ share scheme, which does not accord to him any privilege
or advantage not generally accorded to employees and/or former employees to whom the arrangement relates; and

(g) any transaction or arrangement with any other company in which he is interested, directly or indirectly (whether as a director or
shareholder or otherwise), provided that he is not the holder of or beneﬁ cially interested in at least one per cent of any class of shares
of that company (or of any other company through which his interest is derived), and is not entitled to exercise at least one per cent
of the voting rights available to members of the relevant company.

If a question arises at a Directors’ meeting as to the right of a Director to vote, the question may be referred to the Chairman of the
meeting (or if the Director concerned is the Chairman, to the other Directors at the meeting), and his ruling in relation to any Director
(or, as the case may be, the ruling of the majority of the other Directors in relation to the Chairman) shall be ﬁ nal and conclusive.

The Act requires a Director of a company who is in any way interested in a proposed transaction or arrangement with the company
to declare the nature of his interest at a meeting of the Directors of the company (save that a director need not declare an interest if
it cannot reasonably be regarded as giving rise to a conﬂ ict of interest). The deﬁ nition of “interest” includes the interests of spouses,
civil partners, children, companies and trusts.

Michael Page International

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BORROWING POWERS OF THE DIRECTORS

The Directors shall restrict the borrowings of the Company and exercise all powers of control exercisable by the Company in relation
to its subsidiary undertakings so as to secure (as regards subsidiary undertakings so far as by such exercise they can secure) that
the aggregate principal amount (including any premium payable on ﬁ nal repayment) outstanding of all money borrowed by the Group
(excluding amounts borrowed by any member of the Group from any other member of the Group), shall not at any time, save with the
previous sanction of an ordinary resolution of the Company, exceed an amount equal to three times the aggregate of:

(a) the amount paid up on the share capital of the Company; and

(b) the total of the capital and revenue reserves of the Group, including any share premium account, capital redemption reserve, capital
contribution reserve and credit balance on the proﬁ t and loss account, but excluding sums set aside for taxation and amounts
attributable to outside shareholders in subsidiary undertakings of the Company and deducting any debit balance on the proﬁ t and
loss account, all as shown in the latest audited consolidated balance sheet and proﬁ t and loss account of the Group, but adjusted as
may be necessary in respect of any variation in the paid up share capital or share premium account of the Company since the date
of that balance sheet and further adjusted as may be necessary to reﬂ ect any change since that date in the companies comprising
the Group.

DIRECTOR’S APPOINTMENT, RETIREMENT AND REMOVAL

At each annual general meeting, there shall retire from ofﬁ ce by rotation:

(a)

all Directors of the Company who held ofﬁ ce at the time of the two preceding annual general meetings and who did not retire by
rotation at either of them; and

(b) such additional number of Directors as shall, when aggregated with the number of Directors retiring under paragraph (a) above,
equal either one third of the number of Directors, in circumstances where the number of Directors is three or a multiple of three,
or in all other circumstances, the whole number which is nearest to but does not exceed one-third of the number of Directors
(the “Relevant Proportion”) provided that:

(i)

the provisions of this paragraph (b) shall only apply if the number of Directors retiring under paragraph (a) above is less than the
Relevant Proportion; and

(ii) subject to the provisions of the Act and to the relevant provisions of these Articles of Association, the Directors to retire under
this paragraph (b) shall be those who have been longest in ofﬁ ce since their last appointment or reappointment, but as between
persons who became or were last reappointed Directors on the same day those to retire shall (unless they otherwise agree
among themselves) be determined by lot.

If the Company, at the meeting at which a director retires by rotation, does not ﬁ ll the vacancy the retiring Director shall, if willing to act,
be deemed to have been reappointed unless a resolution not to ﬁ ll the vacancy or not to reappoint that Director is passed.

In addition to any power of removal under the Act, the Company may, by special resolution, remove a director before the expiration of his
period of ofﬁ ce (without prejudice to any claim for damages for breach of any contract of service between the director and the Company)
and, subject to the Articles of Association, may by ordinary resolution, appoint another person who is willing to act as a director, and is
permitted by law to do so, to be a director instead of him. The newly appointed person shall be treated, for the purposes of determining
the time at which he or any other director is to retire as if he had become a director on the day on which the director in whose place he
is appointed was last appointed or reappointed as a Director.

A Director shall be disqualiﬁ ed from holding ofﬁ ce as soon as:

(a) that person ceases to be a director under the provisions of the Act or is prohibited by law from being a Director;

(b) a bankruptcy order is made against that person;

(d) by reason of that person’s mental health, a court makes an order which wholly or partly prevents that person from personally

exercising any powers or rights which that person would otherwise have;

(e)

(f)

notiﬁ cation is received by the Company from that person that he is resigning or retiring from his ofﬁ ce as director, and such resignation
or retirement has taken effect in accordance with its terms;

in the case of an Executive Director, his appointment as such is terminated or expires and the Directors resolve that he should cease
to be a Director;

(g) that person is absent from Directors’ meetings for more than six consecutive months (without permission of the other Directors) and

the Directors resolve that he should cease to be a Director; or

(h) a notice in writing is served on him signed by all the Directors stating that that person shall cease to be a Director with immediate

effect.

There is no requirement of share ownership for a Director’s qualiﬁ cation.

Michael Page International

AMENDMENTS TO THE ARTICLES OF ASSOCIATION

Subject to the Act, the Articles of Association of the Company can be altered by special resolution of the members.

WINDING-UP

If the Company is wound up, the liquidator may, with the sanction of a special resolution of the Company and any other sanction required
by law:

(a)

divide among the members in kind the whole or any part of the assets of the Company and, for that purpose, set such values as
he deems fair upon any property to be divided and determine how the division shall be carried out between the members; and

(b) vest the whole or any part of the assets in trustees upon such trusts for the beneﬁ t of members as the liquidator shall think ﬁ t,

but no member shall be compelled to accept any assets upon which there is a liability.

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Michael Page International

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NOTICE OF MEETING

Notice is hereby given that the Annual General Meeting of the Company will be held at Page House, The Bourne Business Park,

1 Dashwood Lang Road, Addlestone, Weybridge, Surrey, KT15 2QW on 20 May 2011 at 12.00 noon for the following purposes:

1. To receive the accounts and the reports of the directors and the auditors for the year ended 31 December 2010.

To declare a ﬁ nal dividend on the ordinary share capital of the Company for the year ended 31 December 2010 of 6.12p per share.

3. To re-elect Sir Adrian Montague as a director of the Company (Note 8).

4. To re-elect Steve Ingham as a director of the Company (Note 8).

5. To re-elect Charles-Henri Dumon as a director of the Company (Note 8).

6. To re-elect Ruby McGregor-Smith as a director of the Company (Note 8).

7. To re-elect Dr. Tim Miller as a director of the Company (Note 8).

8. To re-elect Stephen Puckett as a director of the Company (Note 8).

9. To re-elect Hubert Reid as a director of the Company (Note 8).

10. To elect Reg Sindall as a director of the Company (Note 8).

11. To propose the following ordinary resolution:

That the Directors’ Remuneration Report for the year ended 31 December 2010 be received and approved.

12. To re-appoint Deloitte LLP as auditors of the Company to hold ofﬁ ce until the conclusion of the next Annual General Meeting of the

Company.

13. To authorise the directors to determine the remuneration of the auditors.

14. To propose the following ordinary resolution (Note 9):

That in accordance with section 366 and 367 of the Companies Act 2006 (the ‘2006 Act’) the Company, and all companies that are

subsidiaries of the Company at the date on which this Resolution 14 is passed or during the period when this Resolution 14 has effect,

be generally and unconditionally authorised to:

(a) make political donations to political parties (or independent election candidates), as deﬁ ned in the 2006 Act, not exceeding £25,000

in total;

(b) make political donations to political organisations other than political parties, as deﬁ ned in the 2006 Act, not exceeding £25,000 in

total; and

during the period commencing on the date of passing this resolution and ending on the date of the next Annual General Meeting of the

Company provided that the authorised sum referred to in paragraphs (a), (b) and (c) above, may be comprised of one or more amounts

in different currencies which, for the purposes of calculating the said sum, shall be converted into pounds sterling at the exchange rate

published in the London edition of the Financial Times on the date on which the relevant donation is made or expenditure incurred

(or the ﬁ rst business day thereafter) or, if earlier, on the day in which the Company enters into any contract or undertaking in relation

to the same provided that, in any event, the aggregate amount of political donations and political expenditure made or incurred by the

Company and its subsidiaries pursuant to this Resolution shall not exceed £75,000.

15. To propose the following ordinary resolution (Note 10):

That the directors be and they are hereby generally and unconditionally authorised in accordance with section 551 of the Companies

Act 2006 to exercise all the powers of the Company to allot shares in the Company and to grant rights to subscribe for, or to convert

any security into, shares in the Company (‘Rights’) up to an aggregate nominal amount of £1,062,543, provided that this authority, shall

expire at the conclusion of the next Annual General Meeting of the Company or, if earlier, on 20 August 2012, save that the Company

shall be entitled to make offers or agreements before the expiry of such authority which would or might require shares to be allotted

or Rights to be granted after such expiry and the directors shall be entitled to allot shares and grant Rights pursuant to any such offer

or agreement as if this authority had not expired; and all unexercised authorities previously granted to the directors to allot shares and

grant Rights be and are hereby revoked.

16. To propose the following special resolution (Note 11):

That the directors be and they are hereby empowered pursuant to section 570 and section 573 of the Companies Act 2006 to allot

equity securities (within the meaning of section 560 of that Act) for cash either pursuant to the authority conferred by Resolution 15

above or by way of a sale of treasury shares as if section 561(1) of that Act did not apply to any such allotment provided that this power

shall be limited to:

Michael Page International

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(a) the allotment of equity securities in connection with an offer of securities in favour of the holders of ordinary shares on the register

of members at such record date as the directors may determine where the equity securities respectively attributable to the interests

of the ordinary shareholders are proportionate (as nearly as may be practicable) to the respective numbers of ordinary shares held

or deemed to be held by them on any such record date, subject to such exclusions or other arrangements as the directors may

deem necessary or expedient to deal with treasury shares, fractional entitlements or legal or practical problems arising under the

laws of any overseas territory or the requirements of any regulatory body or stock exchange or by virtue of shares being represented

by depositary receipts or any other matter; and

(b) the allotment (otherwise than pursuant to sub-paragraph (a) of this Resolution 16) to any person or persons of equity securities up

to an aggregate nominal amount of £160,991, and shall expire upon the expiry of the general authority conferred by Resolution

15 above, save that the Company shall be entitled to make offers or agreements before the expiry of such power which would or

might require equity securities to be allotted after such expiry and the directors shall be entitled to allot equity securities pursuant

to any such offer or agreement as if the power conferred hereby had not expired.

17. To propose the following special resolution (Note 12):

That the Company be generally and unconditionally authorised to make market purchases (within the meaning of section 693(4) of the

Companies Act 2006) of ordinary shares of 1p each of the Company on such terms and in such manner as the directors may from

time to time determine, provided that:

(a) the maximum number of ordinary shares hereby authorised to be acquired is 32,198,282 representing approximately 10% of the

issued ordinary share capital of the Company as at 15 April 2011;

(b) the minimum price which may be paid for each ordinary share is 1p;

(i)

where the Company makes market purchases (either directly or through a broker), 105% of the average of the middle market

quotations for an ordinary share in the Company as derived from The London Stock Exchange Daily Ofﬁ cial List for the ﬁ ve

business days immediately preceding the day on which such share is contracted to be purchased; or

(ii)

£8.00, in circumstances where the Company makes market purchases of ordinary shares as part of a share purchase programme

entered into with a third party executing dealer where that executing dealer acquires ordinary shares as principal for delivery

to the Company.

(d) the authority hereby conferred shall expire at the conclusion of the next Annual General Meeting or 20 August 2012 whichever is

earlier unless previously renewed, varied or revoked by the Company in general meeting; and

(e) the Company may make a contract to purchase its ordinary shares under the authority hereby conferred prior to the expiry of such

authority, which contract will or may be executed wholly or partly after the expiry of such authority, and may purchase its ordinary

shares in pursuance of any such contract.

18. To propose the following special resolution (Note 13):

That a General Meeting other than an Annual General Meeting, may be called on not less than 14 clear days’ notice.

The Board consider that all the proposals to be considered at the Annual General Meeting are likely to promote the success of the

Company and are in the best interests of the Company and its shareholders as a whole. The directors unanimously recommend that

you vote in favour of the resolutions as they intend to do in respect of their own beneﬁ cial holdings which amount to 2,275,682 shares

representing 0.7% of the existing issued share capital of the Company (excluding treasury shares).

By order of the Board

Kelvin Stagg

Company Secretary

Michael Page International plc
Page House, 1 Dashwood Lang Road
Addlestone, Weybridge, Surrey, KT15 2QW
Registered in England No. 3310225

15 April 2011

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Michael Page International

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NOTES

A member entitled to attend and vote at the meeting (the ‘Meeting’) may appoint another person(s) (who need not be a member of the

Company) to exercise all or any of his rights to attend, speak and vote at the Meeting. A member can appoint more than one proxy

in relation to the Meeting, provided that each proxy is appointed to exercise the rights attaching to different shares held by him.

A proxy does not need to be a member of the Company, but must attend the Meeting to represent you. Your proxy will vote as you

instruct and must attend the Meeting for your vote to be counted. Details of how to appoint the Chairman or another person as your

proxy using the proxy form are set out in the notes to the proxy form. Appointing a proxy does not preclude you from attending the

Meeting and voting in person. If you attend the Meeting in person, your proxy appointment will automatically be terminated.

A proxy form which may be used to make this appointment and give proxy instructions accompanies this notice. If you do not have

a proxy form and believe that you should have one, please contact Capita Registrars on, 0871 664 0300 (calls cost 10p per minute

plus network extras) lines are open Monday to Friday, 8.30am to 5.30pm. If you require additional copies you may photocopy the

proxy.

In order to be valid an appointment of proxy must be returned (together with any authority under which it is executed or a copy of

the authority certiﬁ ed (or in some other way approved by the directors)) by one of the following methods:

•

in hard copy form by post, by courier or by hand to the Company’s Registrar, at, PXS, 34 Beckenham Road, Beckenham BR3

4TU;

•

in the case of CREST members, by utilising the CREST electronic proxy appointment service in accordance with the procedures

set out in Note 6 below; or

and in each case must be received by the Company not less than 48 hours before the time of the Meeting.

A copy of this notice has been sent for information only to persons who have been nominated by a member to enjoy information

rights under section 146 of the Companies Act 2006 (a ‘Nominated Person’). The rights to appoint a proxy can not be exercised by a

Nominated Person: they can only be exercised by the member. However, a Nominated Person may have a right under an agreement

between him and the member by whom he was nominated to be appointed as a proxy for the Meeting or to have someone else

so appointed. If a Nominated Person does not have such a right or does not wish to exercise it, he may have a right under such an

agreement to give instructions to the member as to the exercise of voting rights.

CREST members who wish to appoint a proxy or proxies by utilising the CREST electronic proxy appointment service may do so by

utilising the procedures described in the CREST Manual on the Euroclear website (www.euroclear.com/CREST). CREST Personal

Members or other CREST sponsored members, and those CREST members who have appointed a voting service provider(s),

should refer to their CREST sponsor or voting service provider(s), who will be able to take the appropriate action on their behalf.

In order for a proxy appointment made by means of CREST to be valid, the appropriate CREST message (a ‘CREST Proxy Instruction’)

must be properly authenticated in accordance with Euroclear UK & Ireland Limited’s (“EUI”) speciﬁ cations and must contain the

information required for such instructions, as described in the CREST Manual. The message regardless of whether it constitutes

the appointment of a proxy or an amendment to the instruction given to a previously appointed proxy must, in order to be valid, be

transmitted so as to be received by the issuer’s agent (ID number – RA10) by the latest time(s) for receipt of proxy appointments

speciﬁ ed in the notice of meeting. For this purpose, the time of receipt will be taken to be the time (as determined by the timestamp

applied to the message by the CREST Applications Host) from which the issuer’s agent is able to retrieve the message by enquiry

to CREST in the manner prescribed by CREST. The Company may treat as invalid a CREST Proxy Instruction in the circumstances

set out in regulation 35(5)(a) of the Uncertiﬁ cated Securities Regulations 2001.

CREST members and, where applicable, their CREST sponsors or voting service providers should note that EUI does not make

available special procedures in CREST for any particular messages. Normal system timings and limitations will therefore apply in

relation to the input of CREST Proxy Instructions. It is the responsibility of the CREST member concerned to take (or, if the CREST

member is a CREST personal member or sponsored member or has appointed a voting service provider(s), to procure that his CREST

sponsor or voting service provider(s) take(s)) such action as shall be necessary to ensure that a message is transmitted by means

of the CREST system by any particular time. In this connection, CREST members and, where applicable, their CREST sponsors

or voting service providers are referred, in particular, to those sections of the CREST Manual concerning practical limitations of the

CREST system and timings.

Michael Page International

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8. Resolutions 3 to 10 – election/re-election of directors

Resolutions 3 to 10 deal with the election/re-election of the directors in accordance with the UK Corporate Governance Code

(which has replaced the Combined Code on Corporate Governance). The Governance Code provides for all directors of FTSE 350

companies to be subject to election/re-election by their shareholders every year. The Governance Code applies on a “comply or

explain” basis and applies to ﬁ nancial years beginning on or after 29 June 2010. Accordingly, in keeping with the Board’s aim of

following best corporate practice, each member of the board is standing for re-election, and in the case of Reg Sindall for election,

by the shareholders for the ﬁ rst time at this year’s Annual General Meeting. Biographical information on each of the directors is

contained on pages 32 and 33 of the Annual Report and Accounts. The Chairman conﬁ rms that, following formal performance

evaluation, all directors standing for election/re-election continue to perform effectively and demonstrate commitment to the role.

9. Resolution 14 - political donations:

For the purpose of this resolution, ‘political donations’, ‘political organisations’ and ‘political expenditure’ have the meanings given

to them in Section 363-365 of the 2006 Act.

In accordance with its Business Principles, it is the Company’s policy not to make contributions to political parties. There is no intention

to change it. However, what constitutes a ‘political party’, a ‘political organisation’, ‘political donations’ or ‘political expenditure’

under the Companies Act 2006 is not easy to decide as the legislation is capable of wide interpretation. Sponsorship, subscriptions,

payment of expenses, paid leave for employees fulﬁ lling public duties, and support for bodies representing the business community

in policy review or reform, among other things, may fall within this. Therefore, notwithstanding that the Company has not made a

political donation in the past, and has no intention of, either now or in the future, making any political donation or incurring any political

expenditure in respect of any political party, political organisation or independent election candidate, the Board has decided to put

forward Resolution 14 to renew the authority granted by shareholders at the last Annual General Meeting of the Company. This will

allow the Company to continue to support the community and put forward its views to wider business and Government interests

without running the risk of being in breach of the law. As permitted under the 2006 Act, Resolution 14 has also been extended to

cover any of these activities by the Company’s subsidiaries.

10. Resolution 15 - directors’ authority to allot shares:

If passed, Resolution 15 will give the directors authority to allot ordinary shares in the capital of the Company up to a maximum

nominal amount of £1,062,543 representing approximately 33% of the Company’s issued ordinary share capital (excluding treasury

shares) as at 15 April 2011 (the latest practicable date before publication of this notice). This power will last until the conclusion of

the next Annual General Meeting in 2012.

The directors have no present intention of exercising this authority.

As at the date of this letter the Company does not hold any ordinary shares in the capital of the Company in treasury.

11. Resolution 16 – disapplication of pre-emption rights:

Resolution 16 will give the directors authority to allot shares in the capital of the Company pursuant to the authority granted

under Resolution 15 for cash without complying with the pre-emption rights in the Companies Act 2006 in certain circumstances.

This authority will permit the directors to allot:

(a) shares up to a nominal amount of £1,062,543 , (representing one-third of the Company’s issued share capital) on an offer to

existing shareholders on a pre-emptive basis (in each case subject to adjustments for fractional entitlements and overseas

shareholders as the directors’ see ﬁ t); and

(b) shares up to a maximum nominal value of £160,991, representing approximately 5% of the issued ordinary share capital of the

Company as at 15 April 2011 (the latest practicable date prior to publication of this notice) otherwise than in connection with an

offer to existing shareholders.

The directors have no present intention of exercising this authority.

The directors conﬁ rm their intention to follow the provisions of the Pre-emption Group’s Statement of Principles regarding cumulative

usage of authorities within a rolling three-year period. The Principles provide that companies should not issue for cash shares

representing in excess of 7.5% of the Company’s issued share capital in any rolling three-year period, other than to existing

shareholders, without prior consultation with shareholders.

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12. Resolution 17 – buyback authority:

Resolution 17 gives the Company authority to buy back its own ordinary shares in the market as permitted by the Companies Act

2006. The authority limits the number of shares that could be purchased to a maximum of 32,198,282 (representing approximately

10% of the Company’s issued ordinary share capital (excluding treasury shares) as at 15 April 2011 (the latest practicable date

prior to publication of this notice)) and sets minimum and maximum prices. This authority will expire at the conclusion of the Annual

General Meeting of the Company in 2012.

The Company may implement a purchase of ordinary shares pursuant to an arrangement entered into with a third party executing

dealer where that executing dealer acquires ordinary shares as principal for delivery to the Company. Resolution 17 stipulates that,

in the case, the maximum price which may be paid by the Company for the shares is £8.00. This maximum amount has been set

to give the Company ﬂ exibility to make market purchases using this arrangement and the actual price paid by the Company may be

less than this. If shares were purchased in this way, the arrangement with the executing dealer would provide that the actual price

per ordinary share paid by the Company would not be more than the average of the volume weighted average price at which the

Company’s ordinary shares trade over a speciﬁ c period to be agreed by the Company and the executing dealer being the period

during which the executing dealer may make purchases of ordinary shares for delivery to the Company. This would be subject to

a maximum price of £8.00 or such lesser amount as the Company and the executing dealer may agree. The actual price paid by

the Company may also be subject to a minimum price as the Company and the executing dealer may agreed. The price paid by

the executing dealer for the ordinary shares acquired by it for delivery to the Company would not be more than (a) 105 per cent of

the average of the middle market quotations for the Company’s ordinary shares as derived from the London Stock Exchange Daily

Ofﬁ cial List for the ﬁ ve business days before the purchase is made by the executing dealer and (b) the higher of the price of the last

independent trade and the highest current independent bid on the market where the purchase is carried out.

The directors have no present intention of exercising the authority to purchase the Company’s ordinary shares but will keep the

matter under review, taking into account the ﬁ nancial resources of the Company, the Company’s share price and future funding

opportunities. The authority will be exercised only if the directors believe that to do so would result in an increase in earnings per

share and would be in the interests of shareholders generally. Any purchases of ordinary shares would be by means of market

purchases through the London Stock Exchange.

Listed companies purchasing their own shares are allowed to hold them in treasury as an alternative to cancelling them. No dividends

are paid on shares whilst held in treasury and no voting rights attach to treasury shares.

If Resolution 17 is passed at the Meeting, it is the Company’s current intention to cancel all of the shares it may purchase pursuant

to the authority granted to it. However, in order to respond properly to the Company’s capital requirements and prevailing market

conditions, the directors will need to reassess at the time of any and each actual purchase whether to hold the shares in treasury

or cancel them, provided it is permitted to do so.

As at 15 April 2011 (the latest practicable date prior to the publication of this notice), there were warrants and options over 26,271,063

ordinary shares in the capital of the Company representing 8.2% of the Company’s issued ordinary share capital (excluding treasury

shares). If the authority to purchase the Company’s ordinary shares was exercised in full, these options would represent 9.1% of

the Company’s issued ordinary share capital (excluding treasury shares).

13. Resolution 18 – length of notice for general meetings:

This is a resolution to allow the Company to hold general meetings (other than Annual General Meetings) on 14 days notice.

Before the introduction of the Companies (Shareholders’ Rights) Regulations 2009 on 3 August 2009, the minimum notice period

permitted by the 2006 Act for general meetings (other than annual general meetings) was 14 days. One of the amendments made

to the 2006 Act by the Shareholders’ Rights Regulations was to increase the minimum notice period for general meetings of listed

companies to 21 days, but with an ability for companies to reduce this period back to 14 days (other than for annual general

meetings) provided that two conditions are met. The ﬁ rst condition is that the Company offers a facility for shareholders to vote by

electronic means. This condition is met if the Company offers a facility, accessible to all shareholders, to appoint a proxy by means

of a website. The second condition is that there is an annual resolution of shareholders approving the reduction of the minimum

notice period from 21 days to 14 days.

The Board is therefore proposing Resolution 18 as a special resolution to approve 14 days as the minimum period of notice for all

general meetings of the Company other than annual general meetings. The approval will be effective until the Company’s next annual

general meeting, when it is intended that the approval be renewed. The Board will consider on a case by case basis whether the

use of the ﬂ exibility offered by the shorter notice period is merited, taking into account the circumstances, including whether the

business of the meeting is time sensitive.

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14. To have the right to attend and vote (whether in person or by proxy) at the Meeting or adjourned meeting (and also for the purpose

of calculating how many votes a person may cast), a person must have his/her name entered on the register of members by no

later than 6.00pm on 18 May 2011 (or if the Meeting is adjourned, at 6.00pm on the date which is two days prior to the adjourned

meeting). Changes to entries on the register after this time shall be disregarded in determining the rights of any person to attend or

vote (and the number of votes they may cast) at the Meeting or adjourned meeting.

15. A member of the Company which is a corporation may authorise a person or persons to act as its representative(s) at the Meeting.

In accordance with the provisions of the Companies Act 2006, each such representative may exercise (on behalf of the corporation)

the same powers as the corporation could exercise if it were an individual member of the Company, provided that they do not do

so in relation to the same shares. It is no longer necessary to nominate a designated corporate representative.

16. As at 15 April 2011 (being the latest business day prior to the publication of this notice), the Company’s issued share capital consists

of 321,982,816 ordinary shares. The Employee Beneﬁ t Trust holds 14,407,545 ordinary shares of the Company carrying no voting

rights. No shares are held in treasury. Therefore the total voting rights in the Company are 307,575,271.

17. The contents of this notice of Meeting, details of the total number of shares in respect of which members are entitled to exercise

voting rights at the Meeting, details of the totals of the voting rights that members are entitled to exercise at the Meeting and,

if applicable, any members’ statements, members’ resolutions or members’ matters of business received by the Company after the

date of this notice will be available on the Company’s website: http://investors.michaelpage.com.

18. Members satisfying the thresholds in section 527 of the Companies Act 2006 can require the Company to publish a statement on its

website setting out any matter relating to (a) the audit of the Company’s accounts (including the auditor’s report and the conduct of

the audit) that is to be laid before the Meeting; or (b) any circumstances connected with an auditor of the Company ceasing to hold

ofﬁ ce since the last Annual General Meeting, that the members propose to raise at the Meeting. The Company cannot require the

members requesting the publication to pay its expenses. Any statement placed on the website must also be sent to the Company’s

auditors no later than the time it makes its statement available on the website. The business which may be dealt with at the Meeting

includes any statement that the Company has been required to publish on its website.

19. The Company must cause to be answered at the Meeting any question relating to the business being dealt with at the Meeting

that is put by a member attending the Meeting, except in certain circumstances, including if it is undesirable in the interests of the

Company or the good order of the Meeting that the question be answered or if to do so would involve the disclosure of conﬁ dential

information.

20. Copies of the directors’ service contracts with the Company, and the terms and conditions of the non-executive directors, are

available for inspection at the registered ofﬁ ce of the Company during usual business hours (Saturdays, Sundays and public holidays

excepted) and will be available at the place of the Meeting from 8.00 am until its conclusion.

21. You may not use any electronic address in this notice of meeting to communicate with the Company for any purpose other than

those expressly stated.

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Cautionary statement

The Business Review has been prepared solely to provide additional information to shareholders to assess the company’s strategies

and the potential for those strategies to succeed.

The Business Review contains certain forward-looking statements. These statements are made by the Directors in good faith based on

the information available to them up to the time of their approval of this report and such statements should be treated with caution due

to the inherent uncertainties, including both economic and business risk factors underlying any such forward-looking information.

Directors’ responsibilities

The directors are responsible for preparing the Annual Report and the ﬁ nancial statements in accordance with applicable laws and

regulations. Company law requires the directors to prepare such ﬁ nancial statements for each ﬁ nancial year. Under that law the directors

are required to prepare group ﬁ nancial statements in accordance with International Financial Reporting Standards (IFRSs) as adopted

by the European Union and Article 4 of the lAS Regulation and have also chosen to prepare the parent company ﬁ nancial statements

under IFRSs as adopted by the European Union. Under company law the directors must not approve the accounts unless they are

satisﬁ ed that they give a true and fair view of the state of affairs of the company and of the proﬁ t or loss of the company for that period.

In preparing these ﬁ nancial statements, the directors are required to:

• properly select and apply accounting policies;

• present information, including accounting policies, in a manner that provides relevant, reliable, comparable and understandable

information;

•

provide additional disclosures when compliance with the speciﬁ c requirements in lFRSs are insufﬁ cient to enable users to understand

the impact of particular transactions, other events and conditions on the entity’s ﬁ nancial position and ﬁ nancial 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 are sufﬁ cient to show and explain the company’s transactions

and disclose with reasonable accuracy at any time the ﬁ nancial position of the company and enable them to ensure that the ﬁ nancial

statements comply with the Companies Act 2006. 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 ﬁ nancial information included on the company’s website. Legislation in the United Kingdom governing

the preparation and dissemination of ﬁ nancial statements may differ from legislation in other jurisdictions.

Directors’ responsibility statement

We conﬁ rm to the best of our knowledge:

1. the ﬁ nancial statements, prepared in accordance with International Financial Reporting Standards as adopted by the EU, give a

true and fair view of the assets, liabilities, ﬁ nancial position and proﬁ t or loss of the company and the undertakings included in the

consolidation taken as a whole; and

2. the Business Review, which is incorporated into the directors’ report, 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.

On behalf of the Board

S Ingham

Chief Executive

4 March 2011

S Puckett

Group Finance Director

4 March 2011

Michael Page International

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Specialists in Global Recruitment
www.michaelpageinternational.co.uk