DMGT Annual Report 2008

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Notes to the Financial Statements

NOTES TO THE CONSOLIDATED INCOME STATEMENT

3 SEGMENT ANALYSIS

By activity

The Group’s business activities are currently split into six operating divisions – business information, Euromoney Institutional Investor (Euromoney), exhibitions, national media (previously known as national newspapers and related activities), local media and radio. These divisions are the basis on which the Group reports its primary segment information.

Revenue comprises Group sales excluding value added tax, less discounts and commission where applicable and is analysed by segment as follows:

	2008 Total £m	2008 Inter- segment £m	2008 Continuing £m	2007 Total £m	2007 Discontinued operations £m	2007 Inter- segment £m	2007 Continuing £m
Business information	315.7	(0.4)	315.3	293.3	–	(0.6)	292.7
Euromoney	332.0	–	332.0	310.2	(5.0)	–	305.2
Exhibitions	201.6	–	201.6	164.1	–	–	164.1
National media	1,064.7	(77.0)	987.7	1,060.5	–	(74.3)	986.2
Local media	427.0	(6.6)	420.4	450.7	–	(3.6)	447.1
Radio	54.7	–	54.7	39.8	–	–	39.8
	2,395.7	(84.0)	2,311.7	2,318.6	(5.0)	(78.5)	2,235.1

Inter-segment sales are charged at prevailing market prices other than the sale of newsprint from the national media to the local media division which is at cost. The amount of newsprint sold during the year amounted to £35.1 million (2007 £36.6 million).

The Group’s revenue is further analysed as follows:

	2008 Total £m	2008 Inter- segment £m	2008 Continuing £m	2007 Total £m	2007 Discontinued operations £m	2007 Inter- segment £m	2007 Continuing £m
Sale of goods	670.4	–	670.4	658.6	–	–	658.6
Rendering of services	1,725.3	(84.0)	1,641.3	1,660.0	(5.0)	(78.5)	1,576.5
	2,395.7	(84.0)	2,311.7	2,318.6	(5.0)	(78.5)	2,235.1

The Group includes circulation and subscriptions revenue within sales of goods. Revenue from investment revenue is shown in note 7.

Operating profit/(loss) from continuing operations before share of joint ventures and associates result is analysed by segment as follows:

	2008 Before exceptional operating costs and amortisation and impairment of goodwill and intangible assets £m	2008 Exceptional operating costs £m	2008 Impairment of goodwill and intangible assets £m	2008 Amortisation of intangible assets £m	2008 Operating profit from continuing operations before share of joint ventures and associates result £m
Operating profit/(loss)
Business information	74.9	–	–	(10.4)	64.5
Euromoney	76.3	–	(5.7)	(14.8)	55.8
Exhibitions	38.3	(4.5)	(81.3)	(13.7)	(61.2)
National media	72.6	(18.7)	(9.0)	(28.2)	16.7
Local media	68.4	(8.6)	(71.8)	(13.1)	(25.1)
Radio	2.0	–	–	(10.1)	(8.1)
Unallocated central costs	(15.6)	–	–	–	(15.6)
	316.9	(31.8)	(167.8)	(90.3)	27.0

Operating profit before exceptional operating costs and amortisation and impairment of goodwill and intangible assets within the national media division comprised £88.6 million from newspapers, £6.0 million from digital offset by a loss of £3.0 million from television and unallocated divisional central costs of £19.0 million.

Included within unallocated central costs is a credit of £15.2 million which adjusts the pensions charge recorded in each operating segment from a cash rate to actuarial accrual rate in accordance with IAS 19, Employee benefits.

The Group’s exceptional operating costs comprised exhibitions restructuring costs totalling £4.5 million, together with reorganisation costs of £18.7 million within national media and £8.6 million within local media.

If all acquisitions had been completed on the first day of the financial year, contribution to Group revenues would have been £2.7 million and contribution to Group profit attributable to equity holders of the parent would have been £0.3 million. This information includes a charge for amortisation of acquired intangible assets for a full year, together with related income tax effects but excludes any pre-acquisition finance costs and should not be viewed as indicative of the results of operations that would have occurred if the acquisitions had actually been completed on the first day of the financial year.

Operating profit/(loss) from continuing operations before share of joint ventures and associates result is analysed by segment as follows:

	2007 Before exceptional operating costs and amortisation and impairment of goodwill and intangible assets £m	2007 Exceptional operating costs £m	2007 Impairment of goodwill and intangible assets £m	2007 Amortisation of intangible assets £m	2007 Operating profit from continuing operations before share of joint ventures and associates result £m
Operating profit/(loss)
Business information	70.6	–	(3.6)	(8.0)	59.0
Euromoney	68.4	(5.9)	–	(17.8)	44.7
Exhibitions	27.0	(2.9)	(19.8)	(7.5)	(3.2)
National media	83.3	(13.3)	(24.1)	(28.8)	17.1
Local media	92.5	(6.0)	(5.2)	(11.0)	70.3
Radio	(3.7)	–	–	(9.1)	(12.8)
Unallocated central costs	(15.7)	–	–	–	(15.7)
	322.4	(28.1)	(52.7)	(82.2)	159.4

Operating profit before exceptional operating costs and amortisation and impairment of goodwill and intangible assets within the national media division comprised £92.1 million from newspapers, £11.2 million from digital offset by a loss of £4.0 million from television and unallocated divisional central costs of £16.0 million.

Included within unallocated central costs is a credit of £1.9 million which adjusts the pensions charge recorded in each operating segment from a cash rate to actuarial accrual rate in accordance with IAS 19, Employee Benefits.

The Group’s exceptional operating costs comprised local media restructuring costs totalling £6.0 million, together with reorganisation costs of £13.3 million within national media, £5.9 million within Euromoney and £2.9 million within exhibitions.

Operating profit before share of results of joint ventures and associates is analysed by segment as follows :

	2008 Total and continuing £m	2007 Total £m	2007 Discontinued operations £m	2007 Continuing £m
Business information	64.5	59.0	–	59.0
Euromoney	55.8	45.5	(0.8)	44.7
Exhibitions	(61.2)	(3.2)	–	(3.2)
National media	16.7	17.1	–	17.1
Local media	(25.1)	70.3	–	70.3
Radio	(8.1)	(12.8)	–	(12.8)
Unallocated central costs	(15.6)	(15.7)	–	(15.7)
	27.0	160.2	(0.8)	159.4

Amortisation and impairment of goodwill and intangible assets are analysed by segment as follows :

	2008 Total and continuing £m	2007 Total and continuing £m
Business information	(10.4)	(11.6)
Euromoney	(20.5)	(17.8)
Exhibitions	(95.0)	(27.3)
National media	(37.2)	(52.9)
Local media	(84.9)	(16.2)
Radio	(10.1)	(9.1)
	(258.1)	(134.9)

Included in the impairment charge is a reduction of £2.8 million (2007 £nil) in Euromoney, £nil (2007 £3.6 million) in the business information division and £nil (2007 £0.8 million) in the national media division in the carrying value of goodwill on recognition of deferred tax assets for pre acquisition losses (note 17).

Group’s share of results of joint ventures is analysed by segment as follows:

	2008 Total and continuing £m	2007 Total and continuing £m
Exhibitions	–	0.4
National media	(2.1)	–
Local media	0.5	0.3
Radio	0.7	0.5
	(0.9)	1.2

Group’s share of results of associates is analysed by segment as follows:

	2008 Total and continuing £m	2007 Total and continuing £m
Business information	0.3	2.1
Euromoney	0.3	0.2
Exhibitions	–	0.3
National media	3.8	(2.0)
	4.4	0.6

Other gains and losses are analysed by segment as follows:

	2008 Total and continuing £m	2007 Total and continuing £m
Business information	10.6	0.8
Euromoney	3.0	6.7
Exhibitions	9.4	1.7
National media	5.4	4.5
Local media	1.9	2.1
Radio	–	0.6
Group operations	(2.6)	19.3
	27.7	35.7

Investment income is analysed by segment as follows:

	2008 Total and continuing £m	2007 Total and continuing £m
Business information	0.4	0.3
Euromoney	0.6	2.9
Exhibitions	0.5	0.5
National media	0.2	0.9
Local media	–	0.6
Radio	0.2	0.4
Group operations	1.1	1.4
	3.0	7.0

Finance costs are analysed by segment as follows:

	2008 Total and continuing £m	2007 Total and continuing £m
Business information	(1.2)	(0.6)
Euromoney	(11.9)	(1.3)
Exhibitions	(0.1)	–
National media	(1.9)	(0.8)
Unallocated central costs	(114.2)	(59.1)
	(129.3)	(61.8)

(Loss)/profit before tax is analysed by segment as follows:

	2008 Total and continuing £m	2007 Total £m	2007 Discontinued operations £m	2007 Continuing £m
Business information	74.6	61.6	–	61.6
Euromoney	47.8	54.0	(0.8)	53.2
Exhibitions	(51.4)	(0.3)	–	(0.3)
National media	22.1	19.6	–	19.6
Local media	(22.7)	73.3	–	73.3
Radio	(7.2)	(11.3)	–	(11.3)
Unallocated central costs	(131.3)	(54.0)	–	(54.0)
	(68.1)	142.9	(0.8)	142.1

The group’s net assets are analysed by segment as follows:

	Total assets 2008 £m	Total liabilities 2008 £m	Total net assets/(liabilities) 2008 £m
Business information	490.1	(179.7)	310.4
Euromoney	524.0	(247.8)	276.2
Exhibitions	292.5	(94.1)	198.4
National media	695.8	(323.7)	372.1
Local media	352.4	(80.1)	272.3
Radio	188.7	(7.3)	181.4
Unallocated pension assets/(liabilities)	2.5	(43.7)	(41.2)
Group operations	89.5	(1,110.5)	(1,021.0)
	2,635.5	(2,086.9)	548.6

	Total assets 2007 £m	Total liabilities 2007 £m	Total net assets/(liabilities) 2007 £m
Business information	471.1	(154.0)	317.1
Euromoney	511.3	(237.4)	273.9
Exhibitions	274.3	(105.9)	168.4
National media	724.2	(321.2)	403.0
Local media	450.5	(122.7)	327.8
Radio	201.5	(7.3)	194.2
Unallocated pension assets/(liabilities)	82.0	(1.4)	80.6
Group operations	72.8	(1,117.3)	(1,044.5)
	2,787.7	(2,067.2)	720.5

Impairment charge, additions and closing net book value of goodwill are analysed by segment as follows:

	Impairment 2008 £m	Impairment 2007 £m	Additions 2008 £m	Additions 2007 £m	Closing net book value 2008 £m	Closing net book value 2007 £m
Business information	–	3.6	14.8	39.7	273.8	268.6
Euromoney	5.7	–	21.4	200.7	293.0	253.1
Exhibitions	67.7	19.6	43.8	0.4	94.7	97.6
National media	7.9	12.1	4.5	2.7	125.9	129.8
Local media	52.0	5.2	0.2	33.8	86.1	138.3
	133.3	40.5	84.7	277.3	873.5	887.4

Amortisation, impairment charge, additions and closing net book value of intangible assets are analysed by segment as follows:

	Amortisation 2008 £m	Amortisation 2007 £m	Impairment 2008 £m	Impairment 2007 £m	Additions 2008 £m	Additions 2007 £m	Closing net book value 2008 £m	Closing net book value 2007 £m
Business information	10.4	8.0	–	–	11.5	31.2	76.9	71.2
Euromoney	14.8	17.8	–	–	1.6	145.1	138.7	139.6
Exhibitions	13.7	7.5	13.7	0.2	100.8	–	136.9	57.7
National media	28.2	28.8	1.1	12.0	14.4	15.3	74.7	86.6
Local media	13.1	11.0	19.7	–	–	45.5	56.3	86.8
Radio	10.1	9.1	–	–	–	–	146.5	150.8
	90.3	82.2	34.5	12.2	128.3	237.1	630.0	592.7

Impairment, depreciation charge, additions and closing net book value of property, plant and equipment are analysed by segment as follows:

	Impairment 2008 £m	Impairment 2007 £m	Depreciation 2008 £m	Depreciation 2007 £m	Additions 2008 £m	Additions 2007 £m	Closing net book value 2008 £m	Closing net book value 2007 £m
Business information	–	–	8.6	7.0	11.3	10.4	25.2	22.9
Euromoney	–	–	2.8	2.9	4.2	7.9	21.7	20.9
Exhibitions	–	–	2.2	1.7	1.7	1.7	4.9	5.2
National media	5.5	6.0	32.9	30.2	17.3	41.5	312.3	338.3
Local media	1.9	–	12.5	13.8	22.1	12.1	100.9	92.6
Radio	–	–	2.4	2.2	0.5	0.6	14.0	15.3
Group operations	–	–	1.7	1.2	–	–	22.9	25.5
	7.4	6.0	63.1	59.0	57.1	74.2	501.9	520.7

By geographic area

The majority of the Group’s operations are located in the United Kingdom, the rest of Europe, North America and Australia.

The geographic analysis below is based on the location of companies in these regions. Export sales and related profits are included in the areas from which those sales are made. Revenue in each geographic market in which customers are located is not disclosed as there is no material difference between the two.

Revenue is analysed by geographic area as follows:

	2008 Total and continuing £m	2007 Total £m	2007 Discontinued operations £m	2007 Continuing £m
UK	1,614.1	1,660.9	(5.0)	1,655.9
Rest of Europe	71.3	58.9	–	58.9
North America	486.5	404.5	–	404.5
Australia	70.8	52.1	–	52.1
Rest of the World	69.0	63.7	–	63.7
	2,311.7	2,240.1	(5.0)	2,235.1

Operating profit/(loss) before share of results of joint ventures and associates is analysed by geographic area as follows:

	2008 Total and continuing £m	2007 Total £m	2007 Discontinued operations £m	2007 Continuing £m
UK	20.2	86.5	(0.8)	85.7
Rest of Europe	9.8	6.8	–	6.8
North America	(12.8)	73.7	–	73.7
Australia	(6.6)	(20.3)	–	(20.3)
Rest of the World	16.4	13.5	–	13.5
	27.0	160.2	(0.8)	159.4

Group’s share of results of joint ventures is analysed by geographic area as follows:

	2008 Total and continuing £m	2007 Total and continuing £m
UK	(2.1)	–
Rest of Europe	0.5	0.3
North America	–	0.4
Australia	0.7	0.5
	(0.9)	1.2

Group’s share of results of associates is analysed by geographic area as follows:

	2008 Total and continuing £m	2007 Total and continuing £m
UK	4.4	(1.6)
North America	–	1.8
Rest of the World	–	0.4
	4.4	0.6

Group’s net assets are analysed by geographic area as follows:

	Total assets 2008 £m	Total liabilities 2008 £m	Total assets/ (liabilities) 2008 £m
UK	1,327.2	(1,608.7)	(281.5)
Rest of Europe	70.4	(15.9)	54.5
North America	932.5	(386.8)	545.7
Australia	197.9	(11.6)	186.3
Rest of the World	107.5	(63.9)	43.6
	2,635.5	(2,086.9)	548.6

	Total assets 2007 £m	Total liabilities 2007 £m	Total assets/ (liabilities) 2007 £m
UK	1,544.6	(1,554.1)	(9.5)
Rest of Europe	90.1	(33.1)	57.0
North America	845.0	(409.1)	435.9
Australia	211.6	(12.5)	199.1
Rest of the World	96.4	(58.4)	38.0
	2,787.7	(2,067.2)	720.5

Impairment charge, additions and closing net book value of goodwill are analysed by geographic area as follows:

	Impairment 2008 £m	Impairment 2007 £m	Additions 2008 £m	Additions 2007 £m	Closing net book value 2008 £m	Closing net book value 2007 £m
UK	66.5	18.6	30.6	120.5	342.4	376.8
Rest of Europe	–	–	–	5.6	10.4	33.1
North America	66.2	13.6	53.4	141.1	479.1	434.9
Australia	0.6	8.3	–	–	1.9	2.5
Rest of the World	–	–	0.7	10.1	39.7	40.1
	133.3	40.5	84.7	277.3	873.5	887.4

Included within the goodwill impairment charge of £133.3 million is a reduction in goodwill of £2.8 million relating to the recognition of a deferred tax asset for pre-acquisition losses acquired with Metal Bulletin. In accordance with IAS 12, Income taxes the Group is required to reduce its previously capitalised goodwill to offset the recognition of this deferred tax asset.

Included within the goodwill impairment charge in 2007 of £40.5 million is a reduction in goodwill of £4.4 million relating to the recognition of a deferred tax asset for pre-acquisition losses of Genscape of £3.6 million and Primelocation of £0.8 million.

Amortisation, impairment charge, additions and closing net book value of intangible assets are analysed by geographic area as follows:

	Amortisation 2008 £m	Amortisation 2007 £m	Impairment 2008 £m	Impairment 2007 £m	Additions 2008 £m	Additions 2007 £m	Closing net book value 2008 £m	Closing net book value 2007 £m
UK	48.3	48.1	21.6	12.0	19.8	122.5	176.1	223.4
Rest of Europe	2.5	1.8	–	–	0.1	6.1	17.8	17.4
North America	26.6	21.0	12.9	0.2	108.2	102.1	277.5	187.9
Australia	10.4	9.3	–	–	0.2	0.2	146.8	151.1
Rest of the World	2.5	2.0	–	–	–	6.2	11.8	12.9
	90.3	82.2	34.5	12.2	128.3	237.1	630.0	592.7

Impairment, depreciation charge, additions and closing net book value of property, plant and equipment are analysed by geographic area as follows:

	Impairment 2008 £m	Impairment 2007 £m	Depreciation 2008 £m	Depreciation 2007 £m	Additions 2008 £m	Additions 2007 £m	Closing net book value 2008 £m	Closing net book value 2007 £m
UK	7.4	6.0	48.8	47.5	36.4	59.7	440.2	470.0
Rest of Europe	–	–	2.5	2.0	9.1	1.9	17.8	9.0
North America	–	–	8.0	6.2	9.2	10.1	24.7	21.3
Australia	–	–	2.7	2.5	0.7	0.8	14.4	15.9
Rest of the World	–	–	1.1	0.8	1.7	1.7	4.8	4.5
	7.4	6.0	63.1	59.0	57.1	74.2	501.9	520.7

Operating profit before the share of results of joint ventures and associates is further analysed as follows:

	Note	2008 Total and continuing £m	2007 Total £m	2007 Discontinued operations £m	2007 Continuing £m
Revenue		2,311.7	2,240.1	(5.0)	2,235.1
Decrease in stocks of finished goods and work in progress		(1.8)	(2.1)	–	(2.1)
Raw materials and consumables		(345.0)	(283.7)	–	(283.7)
Inventories recognised as an expense in the period		(346.8)	(285.8)	–	(285.8)
Staff costs	4	(734.6)	(683.1)	1.8	(681.3)
Impairment of goodwill and intangible assets	17, 18	(167.8)	(52.7)	–	(52.7)
Amortisation of intangible assets	18	(90.3)	(82.2)	–	(82.2)
Promotion and marketing costs		(159.6)	(173.1)	–	(173.1)
Venue and delegate costs		(117.6)	(87.2)	–	(87.2)
Editorial and production costs		(104.2)	(85.5)	0.8	(84.7)
Distribution and transportation costs		(91.3)	(90.2)	–	(90.2)
Royalties and similar charges		(56.9)	(59.2)	1.2	(58.0)
Depreciation of property, plant and equipment	19	(63.1)	(59.0)	–	(59.0)
Impairment of property, plant and equipment	19	(7.4)	(6.0)	–	(6.0)
Rental of property		(20.9)	(19.5)	–	(19.5)
Other property costs		(37.4)	(44.2)	0.2	(44.0)
Rental of plant and equipment		(5.9)	(6.9)	–	(6.9)
Foreign exchange translation differences		2.9	1.6	–	1.6
Other expenses		(283.8)	(346.9)	0.2	(346.7)
		27.0	160.2	(0.8)	159.4

In the prior year £32.1 million of venue and delegate costs and £14.5 million of editorial and production costs were included within the heading other expenses. These have been reanalysed to ensure consistency with the current year’s analysis.

The total remuneration of the Group’s auditors, Deloitte & Touche LLP, and its associates is analysed as follows:

	2008 £m	2007 £m
Fees payable to the company’s auditors for the audit of the company’s annual accounts	0.3	0.3
The audit of the company’s subsidiaries pursuant to legislation	2.5	2.4
Total audit fees	2.8	2.7
Other services pursuant to legislation	0.1	0.1
Corporate finance services	0.7
Transaction support services	–	0.4
Tax services	0.6	0.6
Other services	0.4	2.2
Total non-audit fees	1.8	3.3
	4.6	6.0

Fees payable to the Company’s auditors and their associates for non-audit services to the Company are not required to be disclosed because the Consolidated Financial Statements are required to disclose such fees on a consolidated basis.

4 EMPLOYEES

The average number of persons employed by the Group including Directors is analysed as follows:

	2008 Number	2007 Number
Business information	3,815	2,995
Euromoney	2,362	2,332
Exhibitions	820	851
National media	4,752	4,651
Local media	5,579	5,618
Radio	503	507
Group operations	94	89
	17,925	17,043

Total staff costs comprised:

	Note	2008 £m	2007 £m
Wages and salaries		641.5	581.3
Share-based payments	38	17.0	18.1
Social security costs		55.6	50.8
Pension costs	31	20.5	31.1
		734.6	681.3

5 SHARE OF RESULTS OF JOINT VENTURES AND ASSOCIATES

	Note	2008 £m	2007 £m
Share of profits from operations of joint ventures		0.5	2.4
Share of (losses)/profits from operations of associates		(0.3)	3.6
Share of associates’ other gains and losses	(i)	9.8	0.6
Before amortisation, impairment of goodwill, interest and tax		10.0	6.6
Share of amortisation of intangibles of joint ventures		(0.6)	(0.7)
Share of amortisation of intangibles of associates		–	(3.2)
Share of associates’ interest receivable		0.2	0.1
Share of joint ventures’ tax		(0.8)	(0.5)
Share of associates’ tax		(0.5)	(0.5)
Impairment of carrying value of associate	(ii)	(4.8)	–
		3.5	1.8

Share of results from operations of joint ventures		(0.9)	1.2
Share of results from operations of associates		9.2	0.6
Impairment of carrying value of associate		(4.8)	–
		3.5	1.8

(i): Represents the Group’s share of Centurion Holiday Group Limited’s (formerly Indigo Holidays Limited) profit on disposal of Hotels4u.com.
(ii): Centurion Holiday Group Limited was liquidated during the year. The carrying value was written down to the proceeds received on liquidation.

6 OTHER GAINS AND LOSSES

	Note	2008 £m	2007 £m
Profit on sale of available-for-sale investments		7.6	0.7
Impairment of available-for-sale assets	21	(10.1)	–
Profit on sale of property, plant and equipment		6.8	1.2
Profit on sale of businesses	16	23.4	15.2
Recycled impairment loss of GCap Media plc	35	–	(24.4)
Profit on deemed part disposal of Euromoney Institutional Investor plc		–	42.4
Profit on sale and deemed disposal of joint ventures and associates		–	0.6
		27.7	35.7

The profit on sale of businesses mainly comprises the sale of Consumer North American Home Shows in the exhibitions division, Dolphin and the European business of Hobsons within business information and British Pathe within national media. No tax charge is due on the sale of Hobsons and British Pathe due to the availability of a statutory exemption. A tax charge of £1.9 million arose on the sale of Consumer North American Home Shows and a tax charge of £2.4 million arose on the sale of Dolphin.

In the prior year the profit on deemed disposal of Euromoney arose following Euromoney’s issue of £65.0 million new share capital to the shareholders of Metal Bulletin plc thereby reducing the Group’s interest in Euromoney.

7 INVESTMENT REVENUE

	2008 £m	2007 £m
Dividend Income
The Press Association Limited	–	0.2
AMI	–	0.3
GCap Media plc	0.3	1.0
Interest receivable
Short-term deposits	2.7	5.5
	3.0	7.0

8 FINANCE COSTS

	Note	2008 £m	2007 £m
Interest, arrangement and commitment fees payable on bonds, bank loans and loan notes		(78.3)	(72.0)
(Loss)/gain on derivatives, or portions thereof, not designated for hedge accounting		(45.6)	16.5
Finance charge on discounting of deferred consideration	32	(2.4)	(2.8)
Other		(3.0)	(3.5)
		(129.3)	(61.8)

Analysed as follows:
Interest, arrangement and commitment fees payable on bonds, bank loans and loan notes		(78.3)	(72.0)
Finance charge on discounting of deferred consideration	32	(2.4)	(2.8)
Change in fair value of non designated portion of derivatives designated as net Investment hedges		2.6	–
Change in fair value of interest rate caps not designated for hedge accounting		(0.2)	(0.3)
Change in fair value of derivative hedge of bond		1.1	(3.0)
Change in fair value of hedged portion of bond		(1.1)	3.0
		(78.3)	(75.1)
Tax equalisation swap income		14.5	30.5
Non foreign exchange gain/(loss) on tax equalisation options		5.3	(3.4)
		19.8	27.1
Foreign exchange loss on tax equalisation arrangements		(67.8)	(10.3)
Foreign exchange loss on intra-group financing		–	(4.7)
Change in fair value of acquisition put options		(3.0)	3.8
Premium on repurchase of bonds		–	(2.6)
		(70.8)	(13.8)
		(129.3)	(61.8)

The comparative figures in the above table have been re-analysed in order to assist the reader’s understanding of the Group’s finance costs.

Tax equalisation swap income and the gain/(loss) from tax equalisation options totalling £19.8 million (2007 £27.1 million) arises from the economic hedging of tax on foreign exchange movements. The foreign exchange loss on tax equalisation arrangements of £67.8 million (2007 £10.3 million) is excluded from adjusted profit since it is equal to a reduced tax charge (see note 9). In addition, the foreign exchange loss on intra group financing, premium on repurchase of bonds and the change in fair value of acquisition put options are also excluded from adjusted profits.

The finance charge on the discounting of deferred consideration arises from the requirement under IFRS 3, Business Combinations to discount deferred consideration back to current values.

9 TAX

	2008 £m	2007 £m
The credit/(charge) on the profit for the year consists of:
UK tax
Corporation tax at 29% (2007 30%)	18.0	(41.9)
Adjustments in respect of prior years	28.2	29.4
	46.2	(12.5)
Overseas tax
Corporation tax	(18.4)	(18.8)
Adjustments in respect of prior years	(0.8)	0.2
Total current tax	27.0	(31.1)
Deferred tax
Origination and reversals of timing differences	60.6	13.7
Adjustments in respect of prior years	(2.9)	(2.9)
Total deferred tax	57.7	10.8
	84.7	(20.3)

Being a multinational Group with tax affairs in many geographic locations inherently leads to a highly complex tax structure which makes the degree of estimation and judgement more challenging. Since the Group manages its tax affairs on a Group wide basis it does not report a segmental analysis of the tax charge in the income statement.

A current tax credit of £1.0 million (2007 £0.3 million) and a deferred tax credit of £40.0 million (2007 charge £59.7 million) was credited directly to equity (note 35).

The tax charge for the year is lower than the standard rate of corporation tax in the UK of 29% (2007 30%) representing the weighted average annual corporate tax rate for the full financial year. The differences are explained below:

	2008 £m	2007 £m
(Loss)/profit on ordinary activities before tax – continuing	(68.1)	142.1
Profit before tax – discontinued	0.2	0.5
Tax on (loss)/profit on ordinary activities at the standard rate	19.7	(42.6)
Effect of:
Amortisation and Impairment of goodwill and intangible assets	(21.3)	(18.2)
Other expenses not deductible for tax purposes	(15.6)	(6.6)
Additional items deductible for tax purposes	70.1	14.7
Recognition of previously unrecognised deferred tax assets	7.1	2.9
Effect of overseas tax rates	0.1	(2.5)
Effect of associates tax	2.4	0.5
Tax losses unrelieved	(9.0)	(6.1)
Write off/disposal of subsidiaries	7.7	11.2
Adjustment in respect of prior years	24.5	26.7
Other	(1.0)	(0.3)
Total tax credit/(charge) on the profit for the year	84.7	(20.3)

The net prior year credit of £24.5 million (2007 £26.7 million) arose largely from the agreement of certain prior year open issues with tax authorities and a reassessment of the level of tax provisions required.

Adjusted tax on profits before amortisation and impairment of intangible assets, restructuring costs and non-recurring items (adjusted tax charge) amounted to £62.8 million (2007 £75.9 million) and the resulting rate is 24.0% (2007 26.3%). The differences between the tax credit and the adjusted tax charge are shown in the reconciliation below:

	2008 £m	2007 £m
Total tax credit/(charge) on the profit for the year	84.7	(20.3)
Deferred tax on intangible assets and goodwill	(37.2)	(14.0)
Current tax on foreign exchange on tax equalisation contracts	(67.8)	(10.3)
Agreement of open issues with tax authorities	(23.8)	(27.4)
Tax on other exceptional items	(18.7)	(3.9)
Adjusted tax charge on the profit for the period	(62.8)	(75.9)

In calculating the adjusted tax rate, the Group excludes the potential future deferred tax effects of intangible assets and goodwill as it prefers to give the readers of its accounts a view of the tax charge based on the current status of such items.

A credit of £67.8 million relating to tax on foreign exchange losses (2007 £10.3 million) has been treated as exceptional as it matches foreign exchange losses of £67.8 million (2007 £10.3 million) on tax equalisation swaps included within finance costs (see note 8).

10 DIVIDENDS PAID

	2008 Pence per share	2008 £m	2007 Pence per share	2007 £m
Amounts recognisable as distributions to equity holders in the period
Ordinary shares – final dividend for the year ended 30th September, 2007	9.90	2.0	–	–
‘A’ Ordinary Non-Voting shares – final dividend for the year ended 30th September, 2007	9.90	36.4	–	–
Ordinary shares – final dividend for the year ended 1st October, 2006	–	–	9.00	1.8
‘A’ Ordinary Non-Voting shares – final dividend for the year ended 1st October, 2006	–	–	9.00	33.2
		38.4		35.0
Ordinary shares – interim dividend for the year ended 28th September, 2008	4.80	1.0	–	–
‘A’ Ordinary Non-Voting shares – interim dividend for the year ended 28th September, 2008	4.80	16.9	–	–
Ordinary shares – interim dividend for the year ended 30th September, 2007	–	–	4.45	0.9
‘A’ Ordinary Non-Voting shares – interim dividend for the year ended 30th September, 2007	–	–	4.45	16.7
		17.9		17.6
	14.70	56.3	13.45	52.6

The Board has declared a final dividend of 9.90p per Ordinary/‘A’ Ordinary Non-Voting share (2007 9.90p) which will absorb an estimated £37.1 million of shareholders’ funds for which no liability has been recognised in these financial statements. Subject to shareholder approval it will be paid on 13th February, 2009 to shareholders on the register at the close of business on 28th november, 2008.

11 ADJUSTED PROFIT (BEFORE EXCEPTIONAL OPERATING COSTS AND AMORTISATION AND IMPAIRMENT OF GOODWILL AND INTANGIBLE ASSETS, OTHER GAINS AND LOSSES AND EXCEPTIONAL FINANCING COSTS, AFTER TAXATION AND MINORITY INTERESTS)

	Note	2008 £m	2007 £m
(Loss)/profit before tax – continuing		(68.1)	142.1
Profit before tax – discontinued	24	0.2	0.8
Add back:
Amortisation of intangible assets in Group profit from operations and in joint ventures and associates	3, 5	90.9	86.0
Impairment of goodwill and intangible assets	3	167.8	52.7
Exceptional operating costs	3	31.8	28.1
Share of associates’ other gains	5	(9.8)	(0.6)
Impairment of carrying value of associate	5	4.8	–
Other gains and losses:
Profit on sale of available-for-sale investments	6	(7.6)	(0.7)
Profit on sale of property, plant and equipment	6	(6.8)	(1.2)
Profit on sale of businesses	6	(23.4)	(15.2)
Impairment of available-for-sale assets	6	10.1	–
Recycled impairment loss of GCap Media plc	6	–	24.4
Profit on deemed part disposal of Euromoney Institutional Investor plc	6	–	(42.4)
Profit on sale and deemed disposal of joint ventures and associates	6	–	(0.6)
Profit on sale of discontinued operations	24	(0.2)	–
Finance costs:
Foreign exchange loss on tax equalisation arrangements	8	67.8	10.3
Foreign exchange loss on intra-group financing	8	–	4.7
Change in fair value of acquisition put options	8	3.0	(3.8)
Premium on repurchase of bonds	8	–	2.6
Tax:
Share of tax in joint ventures and associates	5	1.3	1.0
Profit before exceptional operating costs, amortisation and impairment of goodwill and intangible assets, other gains and losses and exceptional financing costs, taxation and minority interest		261.8	288.2
Total tax credit/(charge) on the profit for the period	9	84.7	(20.3)
Adjust for:
Deferred tax on intangible assets and goodwill	9	(37.2)	(14.0)
Current tax on foreign exchange on tax equalisation arrangements	9	(67.8)	(10.3)
Agreed open issues with tax authorities	9	(23.8)	(27.4)
Tax on other exceptional items	9	(18.7)	(3.9)
Interest of minority shareholders		(18.1)	(19.8)
Adjusted profit before exceptional operating costs, amortisation and impairment of goodwill and intangible assets, other gains and losses and exceptional financing costs, taxation and minority interests		180.9	192.5

The adjusted minority share of profits for the year of £18.1 million (2007 £19.8 million) is stated after eliminating a credit of £1.2 million (2007 £4.5 million), being the minority share of exceptional items.

12 EARNINGS/(LOSS) PER SHARE

Basic earnings per share of 0.0 p (2007 27.3 p) and diluted loss per share of 0.2 p (2007 earnings 27.1 p) are calculated, in accordance with IAS 33, Earnings per share, on Group profit for the financial year of £nil (2007 £107.0 million) and on the weighted average number of Ordinary shares in issue during the year, as set out below.

As in previous years, adjusted earnings per share have also been disclosed since the Directors consider that this alternative measure gives a more comparable indication of the Group’s underlying trading performance. Adjusted earnings per share of 47.9 p (2007 49.3 p) are calculated on profit before exceptional operating costs, amortisation and impairment of goodwill and intangible assets, after charging the taxation and minority interests associated with those profits, of £180.9 million (2007 £192.5 million), as set out in Note 11 above, and on the basic weighted average number of Ordinary shares in issue during the year.

	2008 Diluted pence per share	2007 Diluted pence per share	2008 Basic pence per share	2007 Basic pence per share
Earnings per share from continuing operations	(0.2)	27.1	–	27.3
Adjustment to exclude earnings of discontinued operations	0.1	0.1	0.1	0.1
Basic earnings per share from continuing and discontinued operations	(0.1)	27.2	0.1	27.4
Add back:
Amortisation of intangible assets in Group profit from operations and in joint ventures and associates	24.1	22.0	24.1	22.0
Impairment of goodwill and intangible assets	44.4	13.5	44.4	13.5
Exceptional operating costs	8.4	7.2	8.4	7.2
Share of associates’ other gains	(2.6)	(0.2)	(2.6)	(0.2)
Impairment of carrying value of associate	1.3	–	1.3	–
Other gains and losses:
Profit on sale of available-for-sale investments	(2.0)	(0.2)	(2.0)	(0.2)
Profit on sale of property, plant and equipment	(1.8)	(0.3)	(1.8)	(0.3)
Profit on sale of businesses	(6.2)	(3.9)	(6.2)	(3.9)
Impairment of available-for-sale assets	2.7	–	2.7	–
Recycled impairment loss of GCap Media plc	–	6.2	–	6.3
Profit on deemed part disposal of Euromoney Institutional Investor plc	–	(10.8)	–	(10.9)
Profit on sale and deemed disposal of joint ventures and associates	–	(0.2)	–	(0.2)
Profit on sale of discontinued operations	(0.1)	–	(0.1)	–
Finance costs:
Foreign exchange loss on tax equalisation arrangements	18.0	2.7	18.0	2.7
Foreign exchange loss on intra-group financing	–	1.2	–	1.2
Change in fair value of acquisition put options	0.8	(1.0)	0.8	(1.0)
Premium on repurchase of bonds	–	0.7	–	0.7
Tax:
Share of tax in joint ventures and associates	0.3	0.3	0.3	0.3
Profit before exceptional operating costs, amortisation and impairment of goodwill and intangible assets, other gains and losses and exceptional financing costs, taxation and minority interests	87.2	64.4	87.4	64.6
Adjust for:
Deferred tax on intangible assets and goodwill	(9.9)	(3.6)	(9.9)	(3.6)
Current tax on foreign exchange on tax qualisation arrangements	(18.0)	(2.6)	(18.0)	(2.6)
Agreed open issues with tax authorities	(6.3)	(7.0)	(6.3)	(7.0)
Tax on other exceptional items	(5.0)	(1.0)	(5.0)	(1.0)
Interest of minority shareholders	(0.3)	(1.0)	(0.3)	(1.1)
Adjusted earnings per share (before exceptional operating costs, amortisation and impairment of goodwill and intangible assets, other gains and losses and exceptional financing costs after taxation and minority interests)	47.7	49.2	47.9	49.3

The weighted average number of Ordinary shares in issue during the year for the purpose of these calculations is as follows:

	2008 Number m	2007 Number m
Number of Ordinary shares in issue	395.3	402.0
Shares held in Treasury	(17.7)	(11.7)
Basic earnings per share denominator	377.6	390.3
Effect of dilutive share options	–	0.7
Dilutive earnings per share denominator	377.6	391.0

NOTES TO THE CONSOLIDATED CASH FLOW STATEMENT

13 ANALYSIS OF NET DEBT

	Note	At beginning of year £m	Cash flow £m	Fair value hedging adjustments £m	Foreign exchange movements £m	Other non-cash movements £m	At end of year £m
Cash and cash equivalents	25	70.4	(30.7)	–	5.6	–	45.3
Bank overdrafts	29	(6.4)	5.8	–	(0.4)	–	(1.0)
Net cash and cash equivalents		64.0	(24.9)	–	5.2	–	44.3
Debt due within one year	29	(36.8)	13.4	–	12.2	(13.8)	(25.0)
Debt due after one year
Bonds	29	(838.5)	–	(1.1)	–	0.7	(838.9)
Bank loans	29	(144.2)	1.9	–	(12.6)	(10.4)	(165.3)
Net debt before effect of derivatives		(955.5)	(9.6)	(1.1)	4.8	(23.5)	(984.9)
Effect of derivatives on bank debt		5.1	(35.9)	1.1	–	–	(29.7)
Net debt		(950.4)	(45.5)	–	4.8	(23.5)	(1,014.6)

The net cash outflow of £24.9 million includes a cash outflow of £23.3 million in respect of operating exceptional items.

During the year the Group renegotiated its committed bank facilities which were due to expire in October 2009. The Group’s new committed facilities amount to £420.0 million, have maturities of 3 and 5 years and are unsecured.

Other non-cash movements in respect of debt due within one year arose following the vendors’ decision to take a loan note alternative to satisfy the deferred consideration balance on certain prior year acquisitions (note 32) amounting to £13.1 million together with accrued interest on loan notes of £0.7 million.

Other non-cash movements in respect of bonds comprises the unwinding of premium of £1.0 million (2007 £1.1 million) offset by the amortisation of issue costs of £0.3 million (2007 £0.3 million).

Other non-cash movements in respect of bank loans comprises accrued interest of £10.4 million (2007 £9.9 million).

14 ANALYSIS OF MOVEMENTS IN CASH IN RESPECT OF ACQUISITIONS AND DISPOSALS

		Note	2008 £m	2007 £m
Acquisitions
Cash consideration including acquisition expenses of £0.2 million	GLM	15	78.8	–
Cash consideration including acquisition expenses of £0.5 million (2007 £2.4 million)	Others	15	14.8	288.7
Cash paid to settle deferred consideration in respect of acquisitions		32	14.2	29.6
Cash and cash equivalents acquired with subsidiaries		15	(3.5)	(13.1)
			104.3	305.2

Cash paid in respect of deferred consideration in respect of prior year acquisitions was mainly in respect of the national media division.

The businesses acquired during the year contributed £1.2 million to the Group’s net operating cash flows with no amounts attributable to investing or financing activities.

	Note	2008 £m	2007 £m
Disposals
Cash consideration net of disposal costs	16	63.6	41.8
Cash and cash equivalents disposed with subsidiaries	16	(5.1)	(4.8)
		58.5	37.0

The businesses disposed of during the year contributed £8.0 million to the Group’s net operating cashflows with no amounts attributable to investing or financing activities.

15 SUMMARY OF THE EFFECTS OF ACQUISITIONS

On 1st October 2007, the Group acquired the remaining 51% of the membership interests of George Little Management LLC (GLM) for cash consideration of £78.6 million (US$155.0 million). Costs incurred were £0.2 million.

GLM owns and manages tradeshows for consumer goods in the US, serving industries as diverse as giftware, social stationery, home textiles, tabletop, gourmet house wares, contemporary furniture and wellness. GLM is involved in the production of nearly 40 tradeshows in 15 cities across the US and Canada.

Fair value of net assets acquired:

	Note	GLM at book value £m	Accounting policy alignments £m	Fair value adjustments £m	GLM at fair value £m
Goodwill	17	0.7	–	69.8	70.5
Intangible assets	18	–	–	100.1	100.1
Property, plant and equipment	19	0.8	–	–	0.8
Interests in associates		0.2	–	–	0.2
Prepaid show expenses		0.6	1.3	–	1.9
Trade and other receivables		1.8	–	–	1.8
Cash and cash equivalents		1.3	–	–	1.3
Trade and other payables		(5.3)	(0.1)	–	(5.4)
Deferred taxation	33	–	–	(9.5)	(9.5)

Net assets acquired		0.1	1.2	160.4	161.7

Cost of acquisition:

	Note	Non-cash £m	Cash paid in current period £m	Total £m
Reclassification of investment in associate	20	55.9	–	55.9
Cash		–	78.6	78.6
Consideration at fair value		55.9	78.6	134.5
Directly attributable costs		–	0.2	0.2
Revaluation of previously held interest in associate on acquisition of control	(i)	27.0	–	27.0
Total cost of acquisition		82.9	78.8	161.7

The principal fair value adjustments relate to intangible assets recognised relating to the exhibition brands, the related deferred tax liability and £69.8 million attributable to goodwill which represents future synergies. The fair values above have been adjusted from those disclosed at the year end following due diligence work to identify and value the intangible assets acquired.

Since the acquisition took place on the first day of the financial period, Group revenues and profit attributable to equity holders of the parent already include the full effect of the acquisition.

(i): The fair value adjustments include a credit to retained earnings of £27.0 million (note 35). This represents a revaluation of the Group’s previously held interest in GLM on acquisition of control.

Other notable acquisitions completed during the period, the percentage of voting rights acquired, the dates of acquisition and the goodwill arising was as follows:

Name of acquisition	% voting rights acquired	Date of acquisition	Business description £m	Consideration paid £m	Intangible fixed assets acquired £m	Goodwill arising
Oil Careers	100%	December 2007	Online recruitment	6.8	1.5	4.2
Enva Power	82%	December 2007	Power trading data provider	8.5	3.3	6.7
Inframation	100%	December 2007	Land, property and mapping data provider	5.4	1.3	5.4

Provisional fair value of net assets acquired with all other acquisitions:

	Note	Book value £m	Provisional fair value adjustments £m	Provisional fair value £m
Goodwill	17	0.2	16.7	16.9
Intangible assets	18	–	9.5	9.5
Property, plant and equipment	19	0.1	–	0.1
Current assets		1.4	–	1.4
Cash and cash equivalents		2.2	–	2.2
Trade creditors and other payables		(4.1)	–	(4.1)
Tax		(0.7)	–	(0.7)
Deferred tax	33	(0.2)	(2.8)	(3.0)
Net assets/(liabilities) acquired		(1.1)	23.4	22.3
Minority share of net liabilities acquired		(0.2)	–	(0.2)
Group share of net assets/(liabilities) acquired		(1.3)	23.4	22.1

Cost of acquisitions:

	Note	Non-cash £m	Cash paid in current period £m	Total £m
Deferred consideration	32	7.5	–	7.5
Cash		–	14.3	14.3
Consideration at fair value		7.5	14.3	21.8
Directly attributable costs		–	0.5	0.5
Total cost of acquisition		7.5	14.8	22.3

If all acquisitions had been completed on the first day of the financial year, Group revenues for the year would have been £2,314.4 million and Group profit attributable to equity holders of the parent would have been £0.3 million. This information takes into account the amortisation of acquired intangible assets for a full year, together with related income tax effects but excludes any pre-acquisition finance costs and should not be viewed as indicative of the results of operations that would have occurred if the acquisitions had actually been completed on the first day of the financial year.

Total profit attributable to equity holders of the parent since the date of acquisition for companies acquired during the period amounted to £0.3 million.

The aggregate consideration for these and other businesses was £157.0 million, of which £93.6 million was paid in cash during the year, £55.9 million transferred from investments in associates and an estimated amount of £7.5 million payable in the form of deferred consideration, depending upon trading results. This deferred consideration has been discounted back to current values in accordance with IFRS 3, Business Combinations. In each case, the Group has used acquisition accounting to account for the purchase.

Goodwill arising on the acquisitions is principally attributable to the anticipated profitability relating to the distribution of the Group’s products in new and existing markets and anticipated operating synergies from the business combinations.

Purchase of additional shares in controlled entities

	2008 £m	2007 £m
Cash consideration including acquisition expenses of £0.1 million (2007 £nil)	36.3	7.1

During the period the Group acquired additional shares in controlled entities amounting to £36.3 million (2007 £7.1 million). This includes £26.7 million acquiring a further 5.4% of the issued Ordinary share capital of Euromoney. Under the Group’s accounting policy for the purchase of shares in controlled entities, no adjustment has been recorded to the fair value of assets and liabilities already held on the Balance Sheet. The difference between the cost of the additional shares, goodwill arising and the carrying value of the minority share of net assets is adjusted directly in equity. The adjustment to equity in the period was a charge of £6.4 million (2007 £nil).

16 SUMMARY OF THE EFFECTS OF DISPOSALS

The principal disposals completed during the year, the proceeds received and dates of disposal were as follows:

	Date	£m
Dolphin	March 2008	10.3
British Pathe	May 2008	6.3
Hobsons Europe	July 2008	31.1
North American Consumer Home Shows	July 2008	24.5

The impact of disposals on net assets was:

	Note	£m
Goodwill	17	29.6
Intangible assets	18	4.5
Property, plant and equipment	19	0.4
Trade and other receivables		5.1
Cash at bank and in hand	14	5.1
Trade creditors and other payables		(4.6)
Deferred tax		0.1
Net assets disposed		40.2
Profit on disposal of businesses	6	23.4
Satisfied by:
Cash received	14	63.6

NOTES TO THE CONSOLIDATED BALANCE SHEET

17 GOODWILL

	Note	Goodwill £m
Cost
At 1st October, 2006		710.3
Additions		277.3
Reduction on recognition of deferred tax asset for pre-acquisition losses		(4.4)
Adjustment to previous year estimate of deferred consideration		(9.4)
Disposals		(8.1)
Exchange adjustment		(3.5)
At 30th September, 2007		962.2
Additions	15	60.4
Additions in relation to purchase of additional interests in controlled entities	15	24.3
Revaluation of previously held interest in associate on acquisition of control	15, 35	27.0
Reduction on recognition of deferred tax asset for pre-acquisition losses	3	(2.8)
Adjustment to previous year estimate of deferred consideration	32	(2.9)
Disposals	16	(44.5)
Adjustment in respect of prior period acquisition		2.1
Exchange adjustment		40.8
At 28th September, 2008		1,066.6

	Note	Goodwill £m
Accumulated impairment losses
At 1st October, 2006		34.8
Impairment	3	36.1
Exchange adjustment		3.9
At 30th September, 2007		74.8
Impairment	3	130.5
Disposals	16	(14.9)
Exchange adjustment		2.7
At 28th September, 2008		193.1
Net book value – 2007		887.4
Net book value – 2008		873.5

The only large single item of goodwill included in the net book value above relates to BCA, a business within Metal Bulletin, which has a carrying value of £129.7 million (2007 £113.5 million.)

The Group tests goodwill annually for impairment, or more frequently if there are indicators that goodwill might be impaired. Intangible assets are tested separately from goodwill only where impairment indicators exist. The Group has no intangible assets with indefinite lives. Goodwill impairment losses recognised in the year were £130.5 million.

When testing for impairment, the recoverable amounts for all the Group’s cash-generating units (CGUs) are measured at their value in use by discounting future expected cash flows, typically over periods of 20 years or less. These calculations use cash flow projections based on management approved budgets and projections which reflect management’s current experience and future expectations of the markets in which the CGU operates. Risk adjusted discount rates used by the Group in its impairment tests range from 8.7% to 13.5%, the choice of rates depending on the market and maturity of the CGU; the growth rates used in the projections range between 0% and 5.0% and vary with management’s view of the CGU’s market position, maturity of the relevant market and do not exceed the long-term average growth rate for the market in which it operates.

Further disclosures in accordance with paragraph 134 of IAS 36, Impairment of assets, are not provided as the Group does not hold any individual goodwill item relating to a CGU that is significant, which the Group considers to be 15% of the total, in comparison with the Group’s total carrying value of goodwill.

The impairment charge is analysed by major CGU as follows:

CGU	Note	Division	Goodwill impairment £m	Intangible asset impairment £m	Discount rate used	Reason for impairment
East Surrey and Sussex News		Local media	12.3	4.7	10.0%	Declining profitability
Blackmore Vale		Local media	11.1	0.4	9.5%	Declining profitability
Kent Regional News		Local media	5.0	6.6	10.5%	Declining profitability
Leek Post and Times		Local media	2.4		10.0%	Declining profitability
Central Independent News		Local media	21.2	–	10.5%	Declining profitability
Wessex News		Local media	–	7.3	10.0%	Declining profitability
California Gift Show		Exhibitions	18.1	–	9.5%	Declining profitability
GLM	(i)	Exhibitions	41.4	–	9.5%	Declining profitability and double count of goodwill from transition to IFRS
Western Exhibitors		Exhibitions	–	9.0	9.5%	Declining profitability
Allegran		National media	7.9	–	13.5%	Declining profitability
Other		Exhibitions	8.2	4.7		Declining profitability
		National media	–	1.1		Declining profitability
		Local media	–	0.7		Declining profitability
	(ii)	Euromoney	5.7	–		Declining profitability
			133.3	34.5

(i): Included within the exhibitions sector charge is an amount of £41.4 million relating to George Little Management LLC (GLM) (note 15). GLM was an associate on October 3rd, 2004, the Group’s transition date to IFRS. On transition to IFRS, the Group elected not to apply IFRS 3, Business Combinations, retrospectively to past business combinations and the carrying value of goodwill, intangible assets and other assets and liabilities associated with the Group’s stakes in its subsidiaries, associates and joint ventures. As a result of the application of IFRS 3 on acquiring control of GLM a double count of goodwill in respect of the Group’s acquisition of its initial 25% stake has occurred as under UK GAAP the majority of this stake was attributed to goodwill and no separately identifiable assets were recorded. As a result of this double count, the Group has been required to record an impairment charge of £14.4 million immediately following acquisition of control and this is included in the charge for the year.
(ii): Following a re-assessment of the recoverability of tax losses acquired with Metal Bulletin a reduction in the carrying value of goodwill of £2.8 million (2007 £nil) within Euromoney, £nil (2007 £3.6 million) in the business information division and £nil (2007 £0.8 million) in the national media division on recognition of deferred tax assets for pre-acquisition losses (note 17) has been recorded. In accordance with IAS 12, Income taxes, the Group is required to reduce its previously capitalised goodwill to offset the recognition of this deferred tax asset.

The goodwill and intangibles impairment charge recognised in the prior year was £48.3 million. Of this charge, £10.2 million relates to the national media division for Loot following continued decreases in advertising and circulation revenues and £13.0 million for Simply Switch due to poor trading, £4.4 million to the local media division in relation to a classified paid-for newspaper and £19.8 million relating to the exhibition division in relation to consumer shows in the USA.

In addition to the prior year impairment charge of £36.1 million, a reduction in cost of £4.4 million was recorded upon recognition of deferred tax assets relating to pre-acquisition losses.

18 OTHER INTANGIBLE ASSETS

	Note	Publishing rights and titles £m	Radio licences £m	Brands £m	Customer related databases £m	Computer software £m	Other £m	Total £m
Cost
At 1st October, 2006		297.6	197.3	177.3	49.1	50.8	1.9	774.0
Analysis reclassifications		1.0	4.0	(5.0)	–	(0.1)	0.1	–
Additions		143.5	–	8.0	62.3	6.7	2.6	223.1
Internally generated		–	–	–	–	13.8	0.2	14.0
Disposals		–	–	(2.3)	–	(3.6)	–	(5.9)
Exchange adjustment		(0.3)	17.6	(6.3)	(3.4)	0.5	(0.2)	7.9
At 30th September, 2007		441.8	218.9	171.7	108.0	68.1	4.6	1,013.1
Analysis reclassifications		–	–	–	–	(0.5)	0.5	–
Additions	15	2.8	–	97.2	3.6	0.1	5.9	109.6
Internally generated		–	–	–	–	18.7	–	18.7
Disposals	16	(8.2)	–	(2.0)	(0.2)	(3.0)	–	(13.4)
Transfer from/(to) property, plant and equipment	19	(0.7)	–	(0.1)	(0.2)	3.8	–	2.8
Exchange adjustment		14.5	7.9	16.1	6.3	1.8	0.5	47.1
At 28th September, 2008		450.2	226.8	282.9	117.5	89.0	11.5	1,177.9

	Note	Publishing rights and titles £m	Radio licences £m	Brands £m	Customer related databases £m	Computer software £m	Other £m	Total £m
Accumulated amortisation
At 1st October, 2006		218.9	48.8	20.8	6.5	29.4	0.2	324.6
Analysis reclassifications		(5.7)	5.5	(0.1)	0.6	(1.6)	1.3	–
Charge for the year		27.1	9.1	22.5	13.7	9.0	0.8	82.2
Impairment	3	0.2	–	8.9	0.4	2.7	–	12.2
Disposals		–	–	(0.7)	–	(1.3)	–	(2.0)
Exchange adjustment		–	4.9	(0.7)	(0.5)	(0.4)	0.1	3.4
At 30th September, 2007		240.5	68.3	50.7	20.7	37.8	2.4	420.4
Analysis reclassifications		–	–	–	2.5	(2.5)	–	–
Charge for the year		26.7	10.1	27.4	13.6	11.0	1.5	90.3
Impairment	3, 17	19.7	–	12.2	0.1	2.5	–	34.5
Disposals	16	(4.8)	–	(1.6)	(0.2)	(2.3)	–	(8.9)
Transfer from/(to) property, plant and equipment	19	(0.3)	–	–	–	0.8	–	0.5
Exchange adjustment		2.3	2.1	3.2	1.7	1.8	–	11.1
At 28th September, 2008		284.1	80.5	91.9	38.4	49.1	3.9	547.9
Net book value – 2007		201.3	150.6	121.0	87.3	30.3	2.2	592.7
Net book value – 2008		166.1	146.3	191.0	79.1	39.9	7.6	630.0

The methodologies applied to the Group’s cash-generating units (CGUs) when testing for impairment and details of the above impairment charge, are as set out in note 17.

The carrying values of the Group’s larger intangible assets are further analysed as follows:

	2008 Carrying value £m	2007 Carrying value £m	2008 Remaining amoritisation period Years	2007 Remaining amoritisation period Years
GLM – New York International Gift Fair brand	83.1	–	19.0	–
Metal Bulletin mastheads	82.4	90.6	27.8	28.8
Nova 96.9 radio licence	43.6	45.4	12.5	13.5
Nova 106.9 radio licence	29.8	30.4	16.5	17.5
Trinity Mirror Southern Titles	22.9	36.4	18.8	19.8
Vega 95.3 radio licence	22.6	22.9	16.8	17.8
Metal Bulletin customer relationships	21.7	22.4	13.4	14.4
Associated Mediabase software	21.7	18.7	1.9	1.7
Nova 100 radio licence	20.7	21.5	13.2	14.2
Vega 91.5 radio licence	16.3	16.6	17.0	18.0
Genscape intellectual property	14.6	14.0	17.5	18.5
Evanta brand	12.6	12.2	12.8	13.8
Perex title	10.2	12.1	3.8	4.8
Allegran brand	8.4	11.9	2.4	3.4
Institutional Investor title	8.3	9.2	9.0	10.0
Primelocation brand	5.4	7.8	2.3	3.3

19 PROPERTY, PLANT AND EQUIPMENT

	Note	Freehold properties £m	Long leasehold properties £m	Short leasehold properties £m	Plant and equipment £m	Total £m
Cost
At 1st October, 2006		138.8	76.3	50.5	701.0	966.6
Owned by subsidiaries acquired		1.8	0.6	0.2	1.6	4.2
Additions		10.9	1.5	3.4	58.4	74.2
Disposals		(1.6)	(0.1)	(1.0)	(37.0)	(39.7)
Owned by subsidiaries disposed		–	–	(0.2)	(6.6)	(6.8)
Reclassifications		(10.1)	10.1	4.6	(4.6)	–
Exchange adjustment		0.4	0.1	0.2	(1.1)	(0.4)
At 30th September, 2007		140.2	88.5	57.7	711.7	998.1
Owned by subsidiaries acquired	15	–	–	0.3	0.6	0.9
Additions		3.0	0.8	1.3	52.0	57.1
Disposals		(2.5)	–	(1.5)	(38.9)	(42.9)
Owned by subsidiaries disposed	16	–	–	–	(2.6)	(2.6)
Transfers to intangible fixed assets	18	–	–	–	(2.8)	(2.8)
Reclassifications		10.5	(10.1)	–	(0.4)	–
Exchange adjustment		0.6	(0.2)	0.5	9.3	10.2
At 28th September, 2008		151.8	79.0	58.3	728.9	1,018.0

	Note	Freehold properties £m	Long leasehold properties £m	Short leasehold properties £m	Plant and equipment £m	Total £m
Accumulated depreciation and impairment
At 1st October, 2006		21.9	32.2	30.3	368.5	452.9
Charge for the year		2.4	1.9	3.2	51.5	59.0
Impairment		–	–	–	6.0	6.0
Disposals		(0.2)	(0.1)	(0.6)	(34.0)	(34.9)
Owned by subsidiaries disposed		–	–	(0.1)	(3.9)	(4.0)
Reclassifications		(0.3)	0.3	–	–	–
Exchange adjustment		0.1	–	–	(1.7)	(1.6)
At 30th September, 2007		23.9	34.3	32.8	386.4	477.4
Charge for the year	3	3.4	2.3	3.6	53.8	63.1
Impairment	(i)	–	–	–	7.4	7.4
Disposals		(0.4)	–	(1.3)	(32.6)	(34.3)
Owned by subsidiaries disposed	16	–	–	–	(2.2)	(2.2)
Transfers to intangible fixed assets	18	–	–	–	(0.5)	(0.5)
Reclassifications		0.3	(0.3)	–	–	–
Exchange adjustment		0.2	–	0.2	4.8	5.2
At 28th September, 2008		27.4	36.3	35.3	417.1	516.1
Net book value – 2007		116.3	54.2	24.9	325.3	520.7
Net book value – 2008		124.4	42.7	23.0	311.8	501.9

(i): included within exceptional operating costs is an impairment charge of £7.4 million (2007 £6.0 million) relating to printing equipment within the national media division. These assets are now considered obsolete due to excess capacity within the Group.

The following table analyses assets in the course of construction included in property, plant and equipment above.

	Note	Freehold properties £m	Long leasehold properties £m	Short leasehold properties £m	Plant and equipment £m	Total £m
Assets in the course of construction
Cost and net book value
At 1st October, 2006		29.3	0.4	–	42.7	72.4
Projects completed		(29.3)	(0.1)	–	(24.7)	(54.1)
Additions		–	–	0.5	19.1	19.6
At 30th September, 2007		–	0.3	0.5	37.1	37.9
Projects completed	(i)	–	(0.2)	(0.5)	(26.7)	(27.4)
Additions		–	0.5	0.1	6.2	6.8
At 28th September, 2008		–	0.6	0.1	16.6	17.3

(i): the projects completed during the year mainly relate to the Group’s new colour printing facility which became available for use and has been transferred out of assets under construction.

20 INVESTMENTS IN JOINT VENTURES AND ASSOCIATES

	Cost of shares £m	Loans £m	Share of post- aquisition retained reserves £m	Total £m
Joint Ventures
At 1st October, 2006	31.0	4.3	(16.4)	18.9
Correct misallocation in prior years	(7.8)	–	7.8	–
Additions	–	1.1	–	1.1
Loan repayment	–	(0.3)	–	(0.3)
Share of retained reserves	–	–	(0.4)	(0.4)
Exchange adjustment	(4.5)	2.1	2.3	(0.1)
At 30th September, 2007	18.7	7.2	(6.7)	19.2
Additions	6.3	–	–	6.3
Loan repayment	–	(1.1)	–	(1.1)
Share of retained reserves	–	–	(2.6)	(2.6)
Exchange adjustment	0.6	0.1	(0.5)	0.2
At 28th September, 2008	25.6	6.2	(9.8)	22.0

Summary aggregated financial information for the Group’s joint ventures, extracted on a 100% basis from the joint ventures’ own financial information as at 28th September, 2008 is set out below:

	2008 Revenue £m	2008 Operating profit/(loss) £m	2008 Total expenses £m	2008 Profit/(loss) for the period £m
Business information	0.8	–	(0.8)	–
Exhibitions	1.4	0.4	(1.0)	0.4
National media	0.8	(8.3)	(9.1)	(8.3)
Local media	1.8	1.1	(1.0)	0.8
Radio	15.7	4.3	(12.9)	2.8
	20.5	(2.5)	(24.8)	(4.3)

	2008 Non-current assets £m	2008 Current assets £m	2008 Current liabilities £m	2008 Non-current liabilities £m	2008 Net assets/ (liabilities) £m
Business information	–	0.4	(0.3)	(1.3)	(1.2)
Exhibitions	–	1.4	(0.9)	–	0.5
National media	3.9	1.7	(2.4)	–	3.2
Local media	0.2	1.0	(0.1)	–	1.1
Radio	29.9	4.9	(2.2)	(13.3)	19.3
	34.0	9.4	(5.9)	(14.6)	22.9

	2007 Revenue £m	2007 Operating profit £m	2007 Total expenses £m	2007 Profit for the period £m
Business information	0.8	–	(0.8)	–
Euromoney	0.9	0.2	(0.7)	0.2
Exhibitions	3.3	1.1	(2.1)	1.2
Local media	0.9	0.6	(0.3)	0.6
Radio	12.4	3.9	(11.6)	0.8
	18.3	5.8	(15.5)	2.8

	2007 Non-current assets £m	2007 Current assets £m	2007 Current liabilities £m	2007 Non-current liabilities £m	2007 Net assets/ (liabilities) £m
Business information	–	0.3	(0.2)	(1.4)	(1.3)
Exhibitions	–	1.3	(0.1)	–	1.2
Local media	–	0.5	(0.1)	–	0.4
Radio	31.3	4.1	(1.4)	(14.5)	19.5
	31.3	6.2	(1.8)	(15.9)	19.8

At 28th September, 2008 there were no material contingent liabilities or capital commitments in respect of the Group’s joint ventures (2007 None).

Information on principal joint ventures from the latest available accounts (all incorporated in Great Britain and registered and operating in England and Wales unless otherwise stated).

	Principal activity	Year ended	Description of holding	Group interest %
Unlisted
Mail Today Newspapers Pvt. Limited (incorporated and operating in India)	Publisher of classified publications	30th September, 2008	Ordinary	26.0%
Brisbane FM Radio Pty Limited (incorporated and operating in Australia)	Independent radio operator	31st December, 2007	Ordinary	50.0%
DMG Radio (Perth) Pty Limited (incorporated and operating in Australia)	Independent radio operator	30th September, 2008	Ordinary	50.0%

	Note	Cost of shares £m	Loans £m	Share of post acquisition retained reserves £m	Total £m
Associates
At 1st October, 2006		107.8	12.4	(52.1)	68.1
Additions		11.3	2.1	–	13.4
Loan repayment		–	(4.7)	–	(4.7)
Share of retained reserves		–	–	(4.4)	(4.4)
Transfer to investment in subsidiaries		(20.4)	–	15.1	(5.3)
Exchange adjustment		0.5	(3.5)	0.6	(2.4)
At 30th September, 2007		99.2	6.3	(40.8)	64.7
Correct misallocation in prior years		(9.8)	(0.1)	9.9	–
Additions		6.3	0.9	–	7.2
Loan repayment		–	(3.7)	–	(3.7)
Share of retained reserves		–	–	7.8	7.8
Provided during the year		(4.8)	–	–	(4.8)
Transfer to investment in subsidiaries	15	(55.8)	–	(0.1)	(55.9)
Disposals		(9.5)	(0.1)	2.3	(7.3)
Exchange adjustment		2.3	0.4	(0.1)	2.6
At 28th September, 2008		27.9	3.7	(21.0)	10.6

(i): The reallocation above corrects previous misallocation between cost of shares and share of post acquisition retained reserves.

Summary aggregated financial information for the Group’s associates, extracted on a 100% basis from the associates’ own financial information as at 28th September, 2008 is set out below:

	2008 Revenue £m	2007 Revenue £m	2008 Operaiting profit/(loss) £m	2007 Operating profit £m	2008 Profit/(loss) for the period £m	2007 Profit for the period £m
Business information	5.2	5.8	(0.6)	1.4	(0.4)	–
Euromoney	2.2	2.3	0.8	1.6	0.6	1.6
Exhibitions	–	33.9	–	14.1	–	9.6
National media	101.9	195.1	(4.0)	1.8	21.3	–
Local media	4.8	1.7	0.1	0.1	0.1	–
	114.1	238.8	(3.7)	19.0	21.6	11.2

Summary aggregated financial information for the Group’s associates, extracted on a 100% basis from the associates’ own financial accounts as at 28th September, 2008 is set out below:

	2008 Non-current assets £m	2008 Current assets £m	2008 Total assets £m	2008 Current liabilities £m	2008 Non-current liabilities £m	2008 Total liabilities £m	2008 Net assets/ (liabilities) £m
Business information	0.9	4.1	5.0	(3.3)	–	(3.3)	1.7
Euromoney	–	0.6	0.6	(0.2)	–	(0.2)	0.4
National media	20.7	36.0	56.7	(56.8)	(8.3)	(65.1)	(8.4)
Local media	1.0	2.1	3.1	(0.9)	–	(0.9)	2.2
	22.6	42.8	65.4	(61.2)	(8.3)	(69.5)	(4.1)

	2007 Non-current assets £m	2007 Current assets £m	2007 Total assets £m	2007 Current liabilities £m	2007 Non-current liabilities £m	2007 Total liabilities £m	2007 Net assets/ (liabilities) £m
Business information	0.8	5.0	5.8	(3.1)	–	(3.1)	2.7
Euromoney	–	0.6	0.6	(0.3)	–	(0.3)	0.3
Exhibitions	4.6	9.1	13.7	(4.5)	(0.1)	(4.6)	9.1
National media	21.0	54.2	75.2	(55.8)	(30.5)	(86.3)	(11.1)
Local media	0.4	0.8	1.2	(0.1)	–	(0.1)	1.1
	26.8	69.7	96.5	(63.8)	(30.6)	(94.4)	2.1

Information on principal associates from the latest available accounts (all incorporated and operating in Great Britain unless otherwise stated).

	Principal activity	Year ended	Description of holding	Group interest %
Unlisted
Independent Television News Limited	Independent TV news provider	31st December, 2007	Ordinary	20.0%
A-Z Agentia de Publicitate S.A. (incorporated and operating in Romania)	Publisher of classified publications	31st December, 2007	Ordinary	50.0%

Joint ventures and associates have been accounted for under the equity method using unaudited accounts to 28th September, 2008.

21 NON-CURRENT ASSETS – AVAILABLE-FOR-SALE INVESTMENTS

	Note	Listed £m	Unlisted £m	Total £m
At 1st October, 2006		68.4	4.8	73.2
Additions		1.4	0.6	2.0
Disposals		–	(1.8)	(1.8)
Transfer to subsidiaries in relation to Metal Bulletin		(21.6)	–	(21.6)
Fair value movement in the year	35	0.2	–	0.2
Exchange adjustment		0.5	(0.2)	0.3
At 30th September, 2007		48.9	3.4	52.3
Additions		–	15.9	15.9
Disposals		(47.4)	(0.1)	(47.5)
Impairment charge	6	(1.5)	(8.6)	(10.1)
Fair value movement in the year		–	(0.1)	(0.1)
Exchange adjustment		–	0.8	0.8
At 28th September, 2008		–	11.3	11.3

The investments above represent listed equity securities and unlisted securities, which are recorded as non-current assets unless they are expected to be sold within one year, in which case they are recorded as current assets. The investments in listed securities have no fixed maturity or coupon rate and the fair value of these investments is based on quoted market prices. Since there is no active market upon which they are traded, other unlisted equity securities are recorded at cost less provision for impairment, as their fair values cannot be reliably measured.

Available-for-sale investments are analysed as follows:

	Note	2008 £m	2007 £m
Listed
GCap Media plc	(i)	–	48.9
		–	48.9
Unlisted
Spot Runner Inc.		7.5	–
Other		3.8	3.4
		11.3	3.4
		11.3	52.3

Information on principal investments, taken from the latest published accounts (incorporated in Great Britain unless stated otherwise) is as follows:

	Note	Class of holding	Group interest %
GCap Media plc		Ordinary	14.3%
The Press Association Limited		Ordinary	15.6%
Spot Runner Inc. (incorporated and operating in the USA)	(ii)	Common stock	5.0%

(i): The Group disposed of its investment in GCap Media plc (GCap) following GCap’s take over by Global Radio in June 2008.
(ii): During the period the Group acquired a 5.0% holding in Spot Runner Inc, an advertising services company, for consideration of $30.5m (£15.4m). This investment has subsequently been impaired by $16.6m (£8.4m) in light of its current trading performance.

Currency analysis of available-for-sale investments

	2008 £m	2007 £m
Sterling	1.5	50.3
US dollar	9.2	1.7
Australian dollar	0.4	0.1
Other	0.2	0.2
	11.3	52.3

Interest analysis of available-for-sale investments

	2008 £m	2007 £m
Non-interest bearing	11.3	52.3

22 INVENTORIES

	2008 £m	2007 £m
Raw materials and consumables	15.2	13.3
Work in progress	12.1	12.0
Finished goods	0.3	0.2
	27.6	25.5

23 TRADE AND OTHER RECEIVABLES

	2008 £m	2007 £m
Current assets
Trade receivables	368.7	345.4
Allowance for doubtful debts	(17.7)	(14.4)
	351.0	331.0
Prepayments and accrued income	79.8	68.6
Other debtors	26.1	29.9
	456.9	429.5
Non-current assets
Trade receivables	0.2	0.1
Prepayments and accrued income	0.6	0.8
Other debtors	7.5	3.9
	8.3	4.8
	465.2	434.3

Movement in the allowance for doubtful debts

	2008 £m	2007 £m
At 30th September, 2007	(14.4)	(13.1)
Impairment losses recognised	(8.2)	(6.4)
Amounts written off as uncollectible	4.3	3.1
Amounts recovered during the year	1.3	2.0
Owned by subsidiaries disposed	0.1	–
Exchange adjustment	(0.8)	–
At 28th September, 2008	(17.7)	(14.4)

Ageing of impaired trade receivables

	2008 £m	2007 £m
31 – 60 days	1.5	1.7
61 – 90 days	0.6	0.3
91 – 120 days	0.7	0.6
121 + days	12.1	9.3
Total	14.9	11.9

Included in the Group’s trade receivables are debtors with a carrying value of £183.5 million (2007 £143.7 million) which are past due as at 28th September, 2008 for which no allowance has been made. The Group is not aware of any deterioration in the credit quality of these customers and considers that the amounts are still recoverable.

Ageing of past due but not impaired receivables

	2008 £m	2007 £m
1 – 30 days overdue	119.8	94.2
31 – 60 days overdue	38.6	19.2
61 – 90 days overdue	11.0	12.3
91 + days overdue	14.1	18.0
Total	183.5	143.7

The directors consider that the carrying amount of trade and other receivables approximates their fair value.

24 DISCONTINUED OPERATIONS

The following businesses were acquired with a view to resale.

In December 2007, the Group received a final payment of £0.2 million from the sale of Energy Information Centre Limited, following agreement of their completion accounts. There is no related tax charge. Energy Information Centre Limited was sold in April 2007 and was treated as a discontinued operation up to that date.

In May 2008, the Group received a final payment of £25,000 from the sale of the business and assets of Systematics International Limited, following agreement of their completion accounts. There is no related tax charge. The business and net assets of Systematics International Limited was sold in May 2007 and was treated as a discontinued operation up to that date.

The Group’s income statement includes the following results from discontinued operations:

	2008 £m	2007 £m
Revenue	–	5.0
Expenses	–	(4.2)
Operating profit	–	0.8
Profit on sale of businesses	0.2	–
Profit before tax	0.2	0.8
Attributable tax expense	–	(0.3)
Net profit attributable to discontinued operations	0.2	0.5

25 CASH AND CASH EQUIVALENTS

	Note	2008 £m	2007 £m
Cash and cash equivalents		45.3	70.4
Unsecured bank overdrafts	29	(1.0)	(6.4)
Cash and cash equivalents in the cash flow statement	13	44.3	64.0

Analysis of cash and cash equivalents by currency
Sterling		7.7	19.2
US dollar		13.0	24.6
Australian dollar		–	2.4
Canadian dollar		1.7	0.8
Euro		4.2	8.2
Other		18.7	15.2
		45.3	70.4

Analysis of cash and cash equivalents by interest type
Floating rate interest		45.3	70.4

The fair values of cash and cash equivalents equate to their book values.

26 TRADE AND OTHER PAYABLES

	2008 £m	2007 £m
Current liabilities
Trade payables	100.8	83.4
Interest payable	32.7	33.5
Other taxation and social security	34.6	40.6
Other creditors	36.2	33.8
Accruals	219.5	243.2
Deferred income	226.4	186.5
	650.2	621.0
Non-current liabilities
Other creditors	1.1	0.7
	651.3	621.7

The directors consider that the carrying amount of trade and other payables approximates their fair value.

27 CURRENT TAX PAYABLE

	2008 £m	2007 £m
Corporation tax payable	119.2	157.4

28 ACQUISITION PUT OPTION COMMITMENTS

	2008 £m	2007 £m
Current	29.5	21.8
Non-current	7.6	18.8
	37.1	40.6

29 BORROWINGS

The Group’s borrowings are unsecured and are analysed as follows:

	Overdrafts £m	Bank loans £m	Bonds £m	Loan notes £m	Total £m
2008
Within one year	1.0	–	–	25.0	26.0
Between one and two years	–	43.2	–	–	43.2
Between two and five years	–	40.8	–	–	40.8
Over five years	–	81.3	838.9	–	920.2
	–	165.3	838.9	–	1,004.2
	1.0	165.3	838.9	25.0	1,030.2

2007
Within one year	6.4	–	–	36.8	43.2
Between two and five years	–	144.2	–	–	144.2
Over five years	–	–	838.5	–	838.5
	–	144.2	838.5	–	982.7
	6.4	144.2	838.5	36.8	1,025.9

The Group’s borrowings are analysed by currency and interest rate type as follows:

	Sterling £m	US dollar £m	Euro £m	Other £m	Total £m
2008
Fixed rate interest	838.9	–	–	–	838.9
Floating rate interest	57.9	133.4	–	–	191.3
	896.8	133.4	–	–	1,030.2

2007
Fixed rate interest	838.5	–	–	–	838.5
Floating rate interest	113.3	71.8	2.1	0.2	187.4
	951.8	71.8	2.1	0.2	1,025.9

The Group’s borrowings, analysed by currency and interest rate type after taking account of all derivative instruments are as follows:

	Sterling £m	US dollar £m	Australian dollar £m	Euro £m	Other £m	Total £m
2008
Fixed rate interest	488.9	310.0	19.0	–	–	817.9
Floating rate interest	64.4	147.9	–	–	–	212.3
	553.3	457.9	19.0	–	–	1,030.2

2007
Fixed rate interest	489.8	319.0	18.7	–	–	827.5
Floating rate interest	68.1	127.6	0.4	2.1	0.2	198.4
	557.9	446.6	19.1	2.1	0.2	1,025.9

Committed Borrowing Facilities

During the year the Group renegotiated its committed bank facilities which were due to expire in october 2009. The new committed bank facilities amount to £420.0 million, have maturities of 3 and 5 years and are unsecured.

The Group’s bank loans bear interest charged at LIBOR plus a margin based on the Group’s ratio of net debt to EBITDA. Additionally each facility contains a covenant based on a minimum interest cover ratio. EBITDA for these purposes is defined as the aggregate of the Group’s consolidated operating profit before share of results of joint ventures and associates before deducting depreciation, amortisation and impairment of goodwill, intangible and tangible assets, before exceptional items and before interest and finance charges.

There have been no breaches to these covenants during the period.

The following undrawn committed borrowing facilities were available to the Group in respect of which all conditions precedent had been met:

	2008 £m	2007 £m
Expiring in one year or less	–	120.0
Expiring in more than one year but not more than two years	5.7	–
Expiring in more than two years but not more than three years	84.5	119.5
Expiring in more than four years but not more than five years	157.3	–
	247.5	239.5

Bonds

The nominal, carrying and fair values of the Group’s bonds and the coupons payable are as follows:

	Coupon %	2008 Fair value £m	2007 Fair value £m	2008 Carrying value £m	2007 Carrying value £m	2008 Nominal value £m	2007 Nominal value £m
2013 Bond	7.5	276.8	315.9	299.9	299.0	300.0	300.0
2018 Bond	5.75	129.9	165.3	172.8	173.1	175.0	175.0
2021 Bond	10.0	157.9	204.5	168.4	168.6	156.4	156.4
2027 Bond	6.375	138.4	198.7	197.8	197.8	200.0	200.0
		703.0	884.4	838.9	838.5	831.4	831.4

The Group’s bonds have been adjusted from their nominal values to take account of the premia, direct issue costs, discounts and movements in hedged risks. The issue costs, premia and discounts are being amortised over the expected lives of the bonds using the effective interest method. The unamortised issue costs amount to £3.4 million (2007 £3.7 million), the unamortised premia £15.2 million (2007 £16.2 million).

The fair values of the Group’s bonds has been calculated on the basis of quoted market rates.

Loan notes

The Group has issued loan notes which attract interest at rates of approximately LIBID to LIBID minus 1%. The loan notes are repayable at the option of the loan note holders with a six month notice period and are treated as current liabilities.

30 DERIVATIVE FINANCIAL INSTRUMENTS AND RISK MANAGEMENT

The Group is exposed to credit, interest rate and currency risks arising in the normal course of business. Derivative financial instruments are used to manage exposures to fluctuations in foreign currency exchange rates and interest rates but are not employed for speculative purposes. Full details of the Group’s treasury policies are set out in the Financial and Treasury Review.

Capital risk management

The Group manages its capital, defined as equity shareholders’ funds and net borrowings, to ensure that entities in the Group are able to continue as going concerns for the foreseeable future.

Debt management

The Group borrows on an unsecured basis and arranges its debt to ensure an appropriate maturity profile. The Group’s principal sources of funding are the long term sterling bond market and committed bank facilities. The Group is mindful of the need to maintain its credit rating, currently BBB and ensures it has sufficient committed bank facilities in order to meet short term business requirements, after taking into account the Group’s holding of cash and cash equivalents together with any distribution restrictions which exist. The Group aims to maximise the term and flexibility of indebtedness and retain headroom in the form of undrawn committed bank facilities of approximately £100.0 million. Additionally, the Group arranges its currency borrowings in order that they are in proportion to the ratio of earnings in that particular currency to total Group earnings.

The directors consider that the Group’s bond issuances together with its bank facilities will be sufficient to cover the likely medium-term cash requirements of the Group.

Associates, joint ventures and other investments in general arrange and maintain their own financing and funding requirements. In all cases such financing is non-recourse to the company.

The Group’s internal target of Net Debt to EBITDA cover is 2.5 times.

Cash and liquidity risk management

The Group monitors cash balances and ensures that sufficient resources are available to meet entities operational requirements. Short-term money market deposits are used to manage liquidity whilst maximising the rate of return on cash resources, giving due consideration to credit risk.

Market risk management

The Group’s primary market risks are interest rate fluctuations and exchange rate movements.

Interest rate risk management

The Group has an internal target of at least six times EBITDA to net interest.

The Group’s interest rate exposure management policy is aimed at reducing the exposure of the consolidated businesses to changes in interest rates. Group policy is to have 70% to 80% of interest exposures fixed with the balance floating. This is achieved by issuing fixed rate sterling bond debt and entering into derivative contracts that economically swap fixed rate interest into floating rate. Derivatives are used to hedge or reduce the risks of interest rate and exchange rate movements and are not entered into unless such risks exist. The derivatives in place to meet Group policy are as follows:

(i): Fixed to floating swaps hedging a portion of the Group’s bonds; changes in the fair value of the swaps are recognised in the income statement and at the same time the carrying value of the hedged bonds is adjusted for movements in the hedged risk to the extent effective and those adjustments are also recognised in the income statement. These interest rate swaps amount to £75.0 million (2007 £75.0 million) with the Group paying floating rates of between 5.38% and 5.85% (2007 4.71% and 4.76%).
(ii): Cross currency fixed to fixed interest rate swaps. These amounted to £255.5 million / US$485.0 million (2007 £255.5 million / US$485.0 million) resulting in the Group paying fixed US dollar interest at rates of between 4.40% and 6.07% (2007 4.40% and 6.07%), £18.8 million / AUS$45.0 million (2007 £18.8 million / AUS$45.0 million) with the Group paying fixed Australian dollar interest at rates of between 6.15% and 6.22% (2007 6.15% and 6.22%).
(iii): The Group also had a number of outstanding interest rate caps. These amounted to US$100.0 million notional (2007 US$130.0 million) at a rate of 6.00% (2007 4.00% and 6.00%).

The fair values of interest rate swaps, interest rate caps and forward foreign exchange contracts represent the replacement costs calculated using market rates of interest and exchange at 28th September, 2008. The fair value of long-term borrowings has been calculated by discounting expected future cash flows at market rates.

Foreign exchange rate risk management

Translation exposures arise on the earnings and net assets of business operations in entities with functional currencies other than that of the parent company. The net asset exposures are economically hedged, to a significant extent, by a policy of denominating borrowings in currencies where significant translation exposures exist, most notably US dollars.

The Group also designates currency swaps and forward contracts as net investment hedges, hedging the Group’s overseas investments.

Credit risk management

The Group’s principal credit risk relates to its trade and other receivables and non-performance by counterparties to financial instrument contracts.

Trade and other receivables

The group’s customer base is diversified geographically and by division with customers generally of a good financial standing. Before accepting any new customers, the Group assesses the potential customers’ credit quality and sets credit limits by customer. The average credit period is 65 days (2007 63 days). The Group considers the credit risk of trade receivables to be low, although the Group remains vigilant in the current economic climate. The Group reserves the right to charge interest on overdue receivables, although the Group does not hold collateral over any trade receivable balances. The Group makes an allowance for bad and doubtful debts specific to individual debts. This provision is reviewed regularly in conjunction with a detailed analysis of historic payment profiles and past default experience.

The Group’s receivables are stated net of allowances for doubtful debts and allowances for impairment are made where appropriate.

Institutional counterparty risk

The Group seeks to limit interest rate and foreign exchange risks, described above, by the use of financial instruments. As a result, credit risk arises from the potential non-performance by the counterparties to those financial instruments, which are unsecured. The amount of this credit risk is normally restricted to the amounts of any hedge gain and not the principal amount being hedged. The Group also has a credit exposure to counterparties for the full principal amount of cash and cash equivalents. Group policy is to have no more than £20.0 million deposited (or at risk) with any “AA” counterparty, £10.0 million for “A” rated counterparties.

Credit risk is controlled by monitoring the credit quality of these counterparties, principally licensed commercial banks and investment banks with strong long-term credit ratings, and of the amounts outstanding with each of them. The Group has no significant concentration of risk with exposure spread over a large number of counterparties and customers.

The credit risk on short term deposits and derivative financial instruments is considered low since the counterparties are banks with high credit ratings. Group policy is to have no more than £20.0 million deposited (or at risk) with any “AA” counterparty, £10.0 million for “A” rated counterparties. The Group has no significant concentration of risk with exposure spread over a large number of counterparties and customers.

At the Balance Sheet date the Group considers its maximum exposure to credit risk to be as follows:

	2008 £m	2007 £m
Expiring in one year or less
Trade and other receivables	377.1	360.9
Bank deposits	45.3	70.4
Derivative financial instruments	14.5	30.5
Expiring in more than one year
Trade and other receivables	7.7	4.0
	444.6	465.8

Fair value hedges

The Group’s policy is to use interest rate swaps to convert a proportion of its fixed rate debt to floating rates in order to hedge the interest rate risk with changes in fair value of the hedging instrument recognised in the income statement for the period together with the changes in the fair value of the hedged item due to the hedged risk, to the extent the hedge is effective.

Gains and losses on the borrowings and related derivatives designated as fair value hedges included in the income statement for the year ended 28th September, 2008 were:

	At 30th September, 2007 £m	Fair value movement gain/(loss) £m	At 28th September, 2008 £m
Sterling interest rate swaps	(5.3)	1.1	(4.2)
Sterling debt	5.3	(1.1)	4.2
Total	–	–	–

Cash flow hedges

The Group enters into cash flow hedges using two types of derivatives: fixed to fixed cross currency interest rate swaps and forward exchange derivatives which fix the exchange rate on a portion of future currency expenditure. All cash flow hedges were effective throughout the year ended 28th September, 2008.

Net investment hedges

The Group enters into forward currency sales and cross currency swaps to hedge the Group’s investment in foreign operations. All net investment hedges were effective throughout the year ended 28th September, 2008.

Derivatives not qualifying for hedge accounting

Derivatives not qualifying for hedge accounting represent forward contracts which provide a gain or loss equivalent to income tax payable or receivable on foreign exchange gains or losses incurred when intra group balances are translated to the closing rate at the year end. These contracts (“Tax Equalisation Swaps”) are marked to market with the movement in fair value taken to income. Tax Equalisation Swaps are not capable of being designated as hedging instruments under IAS 39.

The Group’s derivative financial instruments, other than acquisition option commitments, and their maturity profiles are summarised as follows:

Derivative financial assets:

	Fair value hedges £m	Cash flow hedges £m	Net investment hedges £m	Derivatives not qualifying for hedge accounting £m	Derivative financial assets £m
2008
Within one year	0.1	–	5.1	8.4	13.6
Between one and two years	–	–	0.3	–	0.3
Over five years	–	–	–	0.6	0.6
	–	–	0.3	0.6	0.9
	0.1	–	5.4	9.0	14.5

2007
Within one year	–	0.3	10.0	5.8	16.1
Between one and two years	–	–	–	1.5	1.5
Over five years	–	–	12.2	0.7	12.9
	–	–	12.2	2.2	14.4
	–	0.3	22.2	8.0	30.5

Derivative financial liabilities:

	Fair value hedges £m	Cash flow hedges £m	Net investment hedges £m	Derivatives not qualifying for hedge accounting £m	Derivative financial assets £m
2008
Within one year	–	(4.6)	(3.2)	(26.0)	(33.8)
Between one and two years	–	(3.6)	–	–	(3.6)
Between two and five years	(1.4)	(3.8)	(9.9)	–	(15.1)
Over five years	(3.3)	–	(16.6)	–	(19.9)
	(4.7)	(7.4)	(26.5)	–	(38.6)
	(4.7)	(12.0)	(29.7)	(26.0)	(72.4)

2007
Within one year	–	(0.6)	(1.3)	(2.9)	(4.8)
Between two and five years	–	–	(0.9)	–	(0.9)
Over five years	(5.8)	–	(1.4)	–	(7.2)
	(5.8)	–	(2.3)	–	(8.1)
	(5.8)	(0.6)	(3.6)	(2.9)	(12.9)

Sensitivity analysis

In managing the Group’s interest rate and currency risks, the Group aims to reduce the impact of short term fluctuations. However, changes in foreign exchange rates and interest rates may have an impact on the Group’s results.

At 28th September, 2008, it is estimated that an increase of 1.0% in interest rates would have increased the Group’s finance costs by £3.3 million (2007 £6.4 million). There would have been no effect on amounts recognised directly in equity. This sensitivity has been calculated by applying the interest rate change to the Group’s variable rate borrowings, net of any interest rate swaps, at the year end date.

At 28th September, 2008, it is estimated that a decrease of 1.0% in interest rates would have decreased the Group’s finance costs by £3.3 million (2007 £6.6 million). There would have been no effect on amounts recognised directly in equity. This sensitivity has been calculated by applying the interest rate change to the Group’s variable rate borrowings, net of any interest rate swaps, as at the year end date.

At 28th September, 2008, it is estimated that a 10.0% strengthening of sterling against the US dollar would have reduced the net loss taken to equity by £32.5 million (2007 £31.8 million) and increased the net loss taken to income by £2.3 million (2007 £nil). A 10.0% weakening of sterling against the US dollar would have increased the net loss taken to equity by £41.8 million (2007 £42.8 million) and decreased the net loss taken to income by £2.8 million (2007 £nil). This sensitivity has been calculated by applying the foreign exchange change to the Group’s financial instruments which are affected by changes in foreign exchange rates.

At 28th September, 2008 it is estimated that a 15.0% strengthening of sterling against the Japanese Yen would have reduced the net loss taken to equity by £nil (2007 £nil) and reduced the net loss taken to income by £17.7 million (2007 £94.3 million). A 15.0% weakening of sterling against the Japanses Yen would have increased the net loss taken to equity by £nil (2007 £nil) and increased the net loss taken to income by £24.0 million (2007 £129.4 million). This sensitivity has been calculated by applying the foreign exchange change to the Group’s financial instruments which are affected by changes in foreign exchange rates.

The carrying amounts and gains and losses on financial instruments is as follows:

	2008 Carrying amount £m	2008 Gain/(loss) to income £m	2008 Gain/(loss) to equity £m	2007 Carrying amount £m	2007 Gain/(loss) to income £m	2007 Gain/(loss) to equity £m
Investments	11.3	(10.1)	0.7	52.3	(24.4)	24.5
Available-for-sale	11.3	(10.1)	0.7	52.3	(24.4)	24.5

Trade receivables	351.2	(3.3)	12.7	331.1	(1.3)	(4.2)
Cash and deposits	45.3	2.7	5.6	70.4	5.5	(1.3)
Loans and receivables	396.5	(0.6)	18.3	401.5	4.2	(5.5)

Interest rate swaps	0.3	0.1	–	–	(0.3)	–
Fixed to fixed cross currency swaps	–	–	(25.9)	12.2	1.4	8.7
Forward foreign currency contracts	5.3	2.6	69.2	10.3	–	11.3
Derivative assets in effective hedging relationships	5.6	2.7	43.3	22.5	1.1	20.0

Forward foreign currency contracts	0.3	14.8	–	7.4	14.2	–
Forward foreign currency options	8.0	11.3	–	–	–	–
Interest rate caps	0.6	(0.1)	–	0.6	(0.1)	–
Derivative assets not designated as hedging instruments	8.9	26.0	–	8.0	14.1	–

Trade payables	(100.8)	–	(1.5)	(83.4)	–	1.3
Bank overdrafts	(1.0)	(0.1)	(0.4)	(6.4)	(0.5)	0.4
Bonds	(838.9)	(61.0)	–	(838.5)	(50.8)	–
Bank loans	(165.3)	(15.0)	(12.6)	(144.2)	(12.8)	3.4
Loan notes	(25.0)	(1.7)	12.2	(36.8)	(1.3)	(0.1)
Liabilities at amortised cost	(1,131.0)	(77.8)	(2.3)	(1,109.3)	(65.4)	5.0

Interest rate swaps	(4.6)	–	–	(5.3)	(4.5)	–
Fixed to fixed cross currency swaps	(26.6)	(0.5)	(10.9)	(1.9)	–	(1.5)
Forward foreign currency contracts	(15.2)	–	(97.9)	(2.8)	–	(1.4)
Derivative liabilities in effective hedging relationships	(46.4)	(0.5)	(108.8)	(10.0)	(4.5)	(2.9)

Acquisition put option commitments	(37.1)	(3.0)	–	(40.6)	3.8	–
Forward foreign currency contracts	(26.0)	(74.3)	–	(2.9)	–	–
Forward foreign currency options	–	–	–	–	(3.4)
Derivative liabilities not designated as hedging instruments	(63.1)	(77.3)	–	(43.5)	0.4	–

Total for financial instruments	(818.2)	(137.6)	(48.8)	(678.5)	(74.5)	41.1

Reconciliation of net gain or loss taken to equity:

	Note	2008 £m	2007 £m
Revaluation reserves recycled to income statement on impairment of GCap Media plc	35	–	24.4
Change in fair value of hedging derivatives	35	(62.8)	19.8
Fair value movement in available-for-sale assets	35	–	0.2
Translation of financial instruments of overseas operations		16.9	(0.6)
Transfer of gain on cash flow hedges from fair value reserves to income statement	35	(2.9)	(2.7)
Total loss on financial instruments to equity		(48.8)	41.1

Reconciliation of net gain or loss taken through income to net finance costs

	Note	2008 £m	2007 £m
Total loss on financial instruments to income		(137.6)	(74.5)
Add back:
Trade receivables loss		3.3	1.3
Investment impairment		10.1	24.4
Bank interest receivable		(2.7)	(5.5)
Finance charge on discounting of deferred consideration		(2.4)	(2.8)
Foreign exchange loss on intra-group financing		–	(4.7)
Net finance costs	8	(129.3)	(61.8)

The remaining undiscounted contractual liabilities and their maturities are as follows:

	Trade payables	Interest rate swaps	Currency swaps	Forward contracts	Bonds	Bank loans and overdrafts	Loan notes	Total
2008
Within one year	(100.8)	–	(15.3)	(599.5)	(61.0)	(1.0)	(25.8)	(803.4)
Between one and two years	–	–	(15.3)	–	(61.0)	(44.8)	–	(121.1)
Between two and five years	–	(2.5)	(217.3)	–	(471.5)	(46.5)	–	(737.8)
Between five and ten years	–	–	(32.0)	–	(192.3)	(101.4)	–	(325.7)
Between ten and fifteen years	–	(6.0)	(32.0)	–	(436.5)	–	–	(474.5)
Between fifteen and twenty years	–	–	(129.8)	–	(247.4)	–	–	(377.2)
	–	(8.5)	(426.4)	–	(1,408.7)	(192.7)	–	(2,036.3)
	(100.8)	(8.5)	(441.7)	(599.5)	(1,469.7)	(193.7)	(25.8)	(2,839.7)

2007
Within one year	(83.4)	–	(15.3)	(1,172.3)	(61.0)	(6.8)	(37.9)	(1,376.7)
Between one and two years	–	–	(15.3)	(119.2)	(61.0)	(163.5)	–	(359.0)
Between two and five years	–	–	(55.8)	–	(182.8)	–	–	(238.6)
Between five and ten years	–	(3.0)	(202.4)	–	(503.4)	–	–	(708.8)
Between ten and fifteen years	–	(5.5)	(32.0)	–	(462.1)	–	–	(499.6)
Between fifteen and twenty years	–	–	(136.2)	–	(260.2)	–	–	(396.4)
	–	(8.5)	(441.7)	(119.2)	(1,469.5)	(163.5)	–	(2,202.4)
	(83.4)	(8.5)	(457.0)	(1,291.5)	(1,530.5)	(170.3)	(37.9)	(3,579.1)

Reconciliation of undiscounted liabilities to Balance Sheet amounts:

	Undiscounted value of financial liabilities	Interest	Unamortised issue costs	Discount/ Premium on issue	Mark to market adjustments	Effect of discounting	Undiscounted value of financial asset	Total
2008
Within one year	(803.4)	61.9	0.3	(1.1)	4.4	(0.3)	579.4	(158.8)
Between one and two years	(121.1)	62.4	0.3	(1.3)	–	1.3	14.0	(44.4)
Between two and five years	(737.8)	177.1	0.7	(2.7)	–	(18.4)	226.0	(355.1)
Between five and ten years	(325.7)	212.4	1.1	(5.7)	–	5.9	27.2	(84.8)
Between ten and fifteen years	(474.5)	105.1	0.7	(5.1)	–	7.7	27.2	(338.9)
Between fifteen and twenty years	(377.2)	47.6	0.3	0.7	–	(6.1)	119.2	(215.5)
	(2,036.3)	604.6	3.1	(14.1)	–	(9.6)	413.6	(1,038.7)
	(2,839.7)	666.5	3.4	(15.2)	4.4	(9.9)	993.0	(1,197.5)

Analysed as follows:
Trade payables	(100.8)	–	–	–	–	–	–	(100.8)
Bank overdrafts	(1.1)	0.1	–	–	–	–	–	(1.0)
Loan notes	(25.8)	0.8	–	–	–	–	–	(25.0)
Bank loans	(192.6)	27.3	–	–	–	–	–	(165.3)
Bonds	(1,469.8)	638.3	3.4	(15.2)	4.4	–	–	(838.9)
Interest rate swaps	(8.5)	–	–	–	–	4.2	–	(4.3)
Fixed to fixed cross currency swaps	(441.6)	–	–	–	–	(12.6)	427.6	(26.6)
Forward foreign currency contracts	(599.5)	–	–	–	–	(1.5)	565.4	(35.6)
	(2,839.7)	666.5	3.4	(15.2)	4.4	(9.9)	993.0	(1,197.5)

2007
Within one year	(1,376.7)	62.4	0.3	(1.1)	5.4	98.3	1,101.8	(109.6)
Between one and two years	(359.0)	80.3	0.3	(1.1)	–	16.4	118.2	(144.9)
Between two and five years	(238.6)	182.9	1.0	(3.9)	–	3.9	51.3	(3.4)
Between five and ten years	(708.8)	203.4	1.1	(5.7)	–	18.2	196.4	(295.4)
Between ten and fifteen years	(499.6)	130.8	0.6	(5.1)	–	6.9	27.2	(339.2)
Between fifteen and twenty years	(396.4)	60.2	0.3	0.7	–	10.7	124.7	(199.8)
	(2,202.4)	657.6	3.3	(15.1)	–	56.1	517.8	(982.7)
	(3,579.1)	720.0	3.6	(16.2)	5.4	154.4	1,619.6	(1,092.3)

Analysed as follows:
Trade payables	(83.4)	–	–	–	–	–	–	(83.4)
Bank overdrafts	(6.8)	0.4	–	–	–	–	–	(6.4)
Loan notes	(37.9)	1.1	–	–	–	–	–	(36.8)
Bank loans	(163.5)	19.3	–	–	–	–	–	(144.2)
Bonds	(1,530.5)	699.2	3.6	(16.2)	5.4	–	–	(838.5)
Interest rate swaps	(8.5)	–	–	–	–	3.2	–	(5.3)
Fixed to fixed cross currency swaps	(456.8)	–	–	–	–	39.5	427.6	10.3
Forward foreign currency contracts	(1,291.7)	–	–	–	–	111.7	1,192.0	12.0
	(3,579.1)	720.0	3.6	(16.2)	5.4	154.4	1,619.6	(1,092.3)

31 RETIREMENT BENEFITS

The national and local media divisions of the Group operate a number of pension schemes covering most major UK Group companies under which contributions are paid by the employer and employees. The schemes for most employees are funded defined benefit pension arrangements providing service-related benefits based on final pensionable salary and are administered by trustee companies.

During the year trust-based defined contribution pension plans were progressively being replaced by Group personal pension plans, a process that was substantially complete at the year end. The trust-based plans will be wound up during 2009.

The assets of all the pension schemes and plans are held independently from the Group’s finances.

The total net pension costs of the Group for the year ended 28th September, 2008 were £20.5 million (2007 £31.1 million).

Defined Benefit Schemes

On 30th November, 2007 the members, assets and liabilities of the Mail Newspapers Pension Scheme were merged into the Harmsworth Pension Scheme which is now the principal scheme for the Group. As a condition of the merger the company has provided letters of credit for £40.0 million to cover the period to 1st December, 2011. The Trustee would have a call on this contingent asset in the event that the newly combined scheme begins to be wound up before 1st December, 2011 and the assets of the scheme are insufficient to provide benefits in full for all members.

During the year, the trustee companies amended their procedure for appointing Company-appointed and Member-nominated Directors in compliance with revised trust documentation and new legislation. This has resulted, in the case of the trustee company of the principal scheme, in a trustee board comprising four Member-nominated Directors, four Company-appointed directors who are employees of the Group, and an independent chairman appointed by the Company. The new arrangements have been communicated to scheme members.

Full actuarial valuations are carried out triennially by the actuary using the projected unit credit method. The figures in this note are based on calculations performed as part of the work carried out for the actuarial valuations of the main schemes as at 31st March, 2007, and adjusted to 28th September, 2008 by the actuary. This was the first valuation undertaken in accordance with the scheme specific funding provisions under the Pensions Act 2004. Under this legislation, the trustees of the Group’s defined benefit pension schemes are required to agree with the sponsor a suitable, prudent, ongoing funding basis for the scheme. In addition, where a deficit exists on that basis, there is a requirement to agree an appropriate recovery plan for removing it.

The funding strategy agreed with the Trustee of the principal scheme made allowance for assumed future investment returns on the scheme’s assets of 3.3% p.a. above price inflation, compared with the real return of some 2.6% p.a. implicit within the calculation of the Technical Provisions (i.e. the value of the scheme’s benefit liabilities). The Company agreed with the Trustee that this margin would be covered by a contingent asset and the Company has put in place a letter of credit (to be updated annually) of an amount sufficient to cover any potential shortfall in this additional investment return arising prior to the next triennial valuation. As at 28th September, 2008, the letter of credit had a value of £21.8 million (2007 £nil). In addition, the Company is paying annual cash contributions of 18.0% of members’ scheme salaries (2007 18.0%).

The valuation of the principal scheme showed that the combined accumulated assets of the scheme as at 31st March 2007 represented 99% of the scheme’s Technical Provisions in respect of past service benefits.

At 28th September, 2008, the defined benefit obligation to the Group relating to the DMGT AVC Plan, as measured for the purposes of this disclosure under the requirements of IAS19, was £53.0 million (2007 £56.6 million). The assets of the Plan were £55.9 million (2007 £66.8 million), producing a surplus of £2.9 million (2007 £10.2 million). However, as indicated in the disclosures below, an adjustment has been made to cap the value of assets in the Plan since the surplus is not recoverable by the Group. Thus, the net value of the Plan in the Group Balance Sheet is £nil (2007 £nil). The Plan is closed to further member contributions. The Plan has had no impact on the pension cost reported in these financial statements.

Members of the defined benefit schemes are able to make additional voluntary contributions (AVCs) into unit-linked funds held within each scheme. No benefit obligation arises to the Group from these AVCs and the related unit-linked AVC assets have been excluded from the scheme assets reported below.

A reconciliation of the net pension obligation reported in the Balance Sheet is shown in the following table:

	2008 Schemes in surplus £m	2008 Schemes in defecit £m	2008 Total £m	2007 Schemes in surplus £m	2007 Schemes in defecit £m	2007 Total £m
Present value of defined benefit obligation	(70.0)	(1,551.0)	(1,621.0)	(1,556.0)	(221.1)	(1,777.1)
Assets at fair value	75.4	1,507.3	1,582.7	1,648.2	219.7	1,867.9
Impact of asset ceiling on AVC Plan	(2.9)	–	(2.9)	(10.2)	–	(10.2)
Surplus/(Deficit) reported in the Balance Sheet	2.5	(43.7)	(41.2)	82.0	(1.4)	80.6

The International Financial Reporting Interpretations Committee, in its document IFRIC 14, has interpreted the extent to which a company can recognise a pension surplus on its Balance Sheet. Having taken account of the rules of the schemes, the fact that the schemes remain open to new accrual, and the current and anticipated levels of service cost and cash contributions, the Company considers that recognition of surpluses in the schemes on its Balance Sheet is in accordance with the interpretations of IFRIC 14. In 2008, the two main schemes were in deficit, the Metal Bulletin scheme was in surplus and the DMGT AVC Plan had its assets capped to the value of the liabilities.

The surplus for the year, set out above, excludes a related deferred tax asset of £11.5 million (2007 liability £22.5 million).

A reconciliation of the present value of the defined benefit obligation is shown in the following table:

	2008 £m	2007 £m
Defined benefit obligation at start of year	(1,777.1)	(1,830.1)
Service cost	(39.2)	(44.8)
Interest cost	(104.1)	(92.1)
Past service cost	(0.6)	(1.3)
Member contributions	(8.8)	(9.1)
Benefit payments	75.6	72.3
Bulk transfer to Aberdeen Journals	–	20.4
Acquisition of Metal Bulletin	–	(21.7)
Actuarial movement	233.2	129.3
Defined benefit obligation at the end of year	(1,621.0)	(1,777.1)

A reconciliation of the fair value of assets is shown in the following table:

	2008 £m	2007 £m
Fair value of assets at start of year	1,867.9	1,682.4
Expected return on assets	131.1	113.8
Company contributions	1.5	53.2
Member contributions	8.8	9.1
Bulk transfer to Aberdeen Journals	–	(20.4)
Benefit payments	(75.6)	(72.3)
Acquisition of Metal Bulletin	–	17.7
Actuarial movement	(351.0)	84.4
Fair value of assets at end of year	1,582.7	1,867.9

In 2008 the Company did not make an advance payment of contributions but will revert to monthly contribution payments from October 2008.

The fair value of the assets held by the pension schemes and the long-term expected rate of return on each class of assets are shown in the following table:

	Equities	Bonds	Property	Other assets	Total
2008
Value at 28th September, 2008 (£ million)*	989.9	399.5	129.9	63.4	1,582.7
% of assets held	62.6	25.2	8.2	4.0	100.0
Long-term rate of return expected at 30th September, 2007 (%)	8.7	5.0	7.0	5.0	7.5

2007
Value at 30th September, 2007 (£ million)	1,356.6	254.0	156.0	101.3	1,867.9
% of assets held	72.6	13.6	8.4	5.4	100.0
Long-term rate of return expected at 1st October, 2006 (%)	7.8	4.9	6.5	5.5	7.1

2006
Value at 1st October, 2006 (£ million)	1,240.2	175.8	136.0	130.4	1,682.4
% of assets held	73.7	10.4	8.1	7.8	100.0
Long-term rate of return expected at 2nd October, 2005 (%)	7.6	4.4	6.5	4.4	6.9

*: In 2008, equities include hedge funds and infrastructure funds that have the same long-term expected rate of return.

The trust deed of each of the schemes explicitly prohibits investment of the scheme assets in employer-related investments, apart from those required in order that a passively managed UK equity portfolio can be utilised by the trustees. The value of DMGT ‘A’ Ordinary Non-Voting shares held by the UK equity passive manager on behalf of the schemes at 28th September, 2008 was £0.2 million (2007 £0.7 million).

The assumption for the expected overall rate of return on assets is a weighted average of the expected returns for each asset class based on the proportion of assets held in each class at the beginning of the year. The expected return on bonds has been selected having regard to gross redemption yields at the start of the year. The expected returns on equities and property are based on a combination of estimated risk premiums over Government bond yields, the gross redemption yields on bonds, and consensus economic forecasts for future returns.

The actual return on Plan assets was a loss of £219.9 million (2007 gain of £198.2 million) representing the expected return plus the associated actuarial gain or loss during the year.

The main financial assumptions are shown in the following table:

	2008 %	2007 %
Price inflation	3.7	3.3
Salary increases	4.2	4.6
Pension increases	3.7	3.3
Discount rate for scheme liabilities	7.0	5.9
Expected overall rate of return on assets	7.5	7.1

The discount rate for scheme liabilities reflects yields at the Balance Sheet date on high quality corporate bonds. In the light of scheme experience and ongoing cost constraints on businesses participating in the principal scheme the Company has adopted a lower assumed salary growth compared with inflation. All assumptions were selected after taking actuarial advice.

Taking account of the work undertaken in connection with the actuarial valuations as at 31st March, 2007, the Company revised the mortality assumptions in 2007 to take account of scheme experience, and also to allow for further improvements in life expectancy based on ‘medium cohort’ projections but with a minimum rate of reduction in mortality rates in future of 1% per annum. At the same time, the Company decided to make an allowance for the extent to which employees have chosen to commute part of their pension for cash at retirement.

In the light of scheme experience, a further review of demographic assumptions following the formal valuation has led the Company to assume a lower proportion of members with dependants at retirement eligible for a pension than had previously been used.

The table below illustrates examples of the assumed average life expectancies from age 60 for the principal schemes:

	2008 Future life expectancy from age 60 (years)	2007 Future life expectancy from age 60 (years)
For a current 60-year old male member of the scheme	25.5	25.4
For a current 60-year old female member of the scheme	28.0	27.9
For a current 50-year old male member of the scheme	26.6	26.5
For a current 50-year old female member of the scheme	29.1	29.0

The amounts charged to the income statement based on the above assumptions are shown in the following table:

	2008 £m	2007 £m
Service cost	39.2	44.8
Interest cost	104.1	92.1
Expected return on assets	(131.1)	(113.8)
Past service cost	0.6	1.3
Net charge to income statement	12.8	24.4

Pension costs and the size of any pension surplus or deficit are sensitive to the assumptions adopted. The table below indicates the effect from changes in the principle assumptions used above:

		2008 £m
Mortality
Change in pension obligation at 28th September, 2008 from a 1 year change in life expectancy	+/–	48.6
Change in 2008 pension cost from a 1 year change	+/–	4.2
Salary Increases
Change in pension obligation at 28th September, 2008 from a 0.25% change	+/–	11.9
Change in 2008 pension cost from a 0.25% change	+/–	2.0
Discount Rate
Change in pension obligation at 28th September, 2008 from a 0.10% change	+/–	26.1
Change in 2008 pension cost from a 0.10% change	+/–	1.2

Amounts recognised in the Consolidated Statement of Recognised Income and Expense (SORIE) are shown in the following table:

	2008 £m	2007 £m
Actuarial (loss)/gain recognised in SORIE	(117.8)	213.7
Impact of asset ceiling on AVC Plan	7.3	(6.6)
Total (loss)/gains recognised in SORIE	(110.5)	207.1
Cumulative actuarial gain recognised in SORIE at beginning of year	256.9	49.8
Cumulative actuarial gain recognised in SORIE at end of year	146.4	256.9

A history of experience gains and losses is shown in the following table:

	2008 £m	2007 £m	2006 £m	2005 £m	2004 £m
Present value of defined benefit obligation	(1,621.0)	(1,777.1)	(1,830.1)	(1,654.1)	(1,423.1)
Fair value of scheme assets	1,582.7	1,867.9	1,682.4	1,443.2	1,197.3
Impact of asset ceiling in AVC Plan (from 2006)	(2.9)	(10.2)	(3.6)	–	–
Combined (deficit)/surplus in schemes	(41.2)	80.6	(151.3)	(210.9)	(225.8)
Experience adjustments on defined benefit obligation	233.2	129.3	(43.0)	(12.9)	20.2
Experience adjustments on fair value of scheme assets	(351.0)	84.4	77.6	156.2	40.8

The Group expects to contribute approximately £32.8 million to the schemes during the 2009 financial year.

Included in scheme assets in 2007 is an advance payment into the Group’s pension schemes amounting to £25.1 million. In accordance with the provisions of the contribution schedules for the schemes, the Company has not made an advance payment in 2008 but will be making regular monthly contribution payments from October 2008.

UK defined contribution plans

During the year trust-based defined contribution pension plans were progressively being replaced by group personal pension plans, a process that was substantially complete at the year end. The trust-based plans will be wound up during 2009. The new plans have created a consistent pensions savings vehicle across all Group divisions, providing important strategic benefits going forward.

The aggregate value of the trust-based and group personal pension defined contribution pension plans was £24.5 million (2007 £27.0 million) at the year end. The pension cost attributable to these plans during the year amounted to £4.4 million (2007 £3.6 million).

Overseas pension plans

Overseas subsidiaries of certain Group divisions operate defined contribution retirement benefit plans, primarily in North America and Australia. The pension cost attributable to these plans during the year amounts to £3.3 million (2007 £4.6 million).

Pension arrangements for executives

The Group operates a two-tier, contributory defined benefit pension scheme for senior executives (including executive Directors), details of which are incorporated in the above disclosures. It is the Group’s policy that annual bonuses, payments under the Executive Bonus Scheme and benefits in kind are not pensionable.

Included in UK defined contribution plans above are investments in a funded unapproved retirement benefit scheme for certain executives of the Group. The assets of this scheme are held under individual trusts independently from the Group’s finances. There was no additional investment in these individual trusts during the year (2007 £nil) and, following approval from HM Revenue & Customs and the trustees, all but one of the executives chose to disinvest their funds before 5th April, 2008. At the year end no executive Directors had funds invested in the scheme.

Stakeholder pension

DMGT provides access to a stakeholder pension plan for relevant employees who are not eligible for the other pension schemes operated by the Group.

32 PROVISIONS

	Note	Coupon discount £m	Lease £m	Deferred consideration £m	Legal £m	Other (ii) £m	Total £m
Current liabilities
At 30th September, 2007		1.2	0.9	11.3	4.7	4.6	22.7
Additions	15	–	–	2.5	–	–	2.5
Charged during year		1.0	–	–	10.0	5.1	16.1
Utilised during year		(1.7)	(1.1)	–	(8.8)	(3.9)	(15.5)
Transfer	(i)	–	1.2	–	–	–	1.2
Transfer from non-current liabilities		–	0.8	19.0	–	1.3	21.1
Transfer to loan notes	13	–	–	(13.1)	–	–	(13.1)
Deferred consideration paid	14	–	–	(7.3)	–	–	(7.3)
Notional interest on deferred consideration	8	–	–	1.1	–	–	1.1
Adjustment to goodwill / deferred consideration	17	–	–	(1.6)	–	–	(1.6)
Exchange adjustment		–	–	0.2	0.1	(0.1)	0.2
At 28th September, 2008		0.5	1.8	12.1	6.0	7.0	27.4

Non-current liabilities
At 30th September, 2007		–	1.8	44.6	1.5	1.1	49.0
Additions	15	–	–	5.0	–	–	5.0
Charged during year		–	1.7	–	0.1	0.2	2.0
Utilised during year		–	(2.7)	–	(0.1)	1.5	(1.3)
Transfer	(i)	–	1.3	–	–	1.6	2.9
Transfer to current liabilities		–	0.3	(19.0)	–	(2.4)	(21.1)
Deferred consideration paid	14	–	–	(6.9)	–	–	(6.9)
Notional interest on deferred consideration	8	–	–	1.3	–	–	1.3
Adjustment to goodwill / deferred consideration	17	–	–	(1.3)	–	–	(1.3)
Exchange adjustment		–	–	1.8	0.1	0.1	2.0
At 28th September, 2008		–	2.4	25.5	1.6	2.1	31.6

(i): The Group has reclassified certain provisions totalling £4.1 million previously included within trade and other payables to provisions to better reflect the classification of the creditor. The provision consists of social security arising on share option liabilities and dilapidations on leasehold properties.
(ii): Other current provisions principally comprise annual leave provisions of £2.2 million (2007 £2.0 million), dilapidation provisions of £0.1 million (2007 £0.1 million), contract discount provisions of £2.2 million (2007 £2.2 million) and agency rebates of £1.3 million (2007 £nil).

Other non-current provisions principally comprise annual leave provisions of £0.4 million (2007 £1.1 million) and dilapidation provisions of £1.7 million (2007 £1.6 million).

The Group’s coupon discount and redundancy and reorganisation provisions are all expected to be utilised within the next 12 months. The lease provisions are dependent on the terms of the lease whilst the timing of cash flows for legal disputes have been split using Directors’ best estimates.

The uncertainties surrounding and the nature of the Group’s deferred consideration provisions are disclosed in critical accounting judgements and key sources of estimation uncertainty. The maturity profile of the Group’s deferred consideration provision is as follows:

	2008 £m	2007 £m
Expiring in one year or less	12.1	11.3
Expiring between one and two years	11.8	22.9
Expiring between two and five years	13.7	21.7
	37.6	55.9

33 DEFERRED TAXATION

	Note	Accelerated capital allowances £m	Goodwill and intangibles £m	Revaluation and roll over gains £m	UK capital losses £m	Trading losses and tax credits £m	Pension scheme deficit £m	Other £m	Total £m
Disclosed within non-current liabilities		40.2	67.1	6.2	(6.2)	(13.8)	(37.6)	(13.6)	42.3
Disclosed within non-current assets		–	(3.0)	–	–	(15.7)	–	3.0	(15.7)
At 1st October, 2006		40.2	64.1	6.2	(6.2)	(29.5)	(37.6)	(10.6)	26.6
(Credit)/charge to income		(2.7)	(15.6)	2.5	(2.5)	7.7	(0.4)	4.8	(6.2)
(Credit)/charge to equity		–	2.8	–	–	–	58.0	(4.0)	56.8
Owned by subsidiaries acquired		–	55.2	–	–	–	–	(1.0)	54.2
Owned by subsidiaries sold		–	(0.2)	–	–	–	–	–	(0.2)
Exchange adjustment		–	(4.4)	–	–	–	–	2.5	(1.9)
Effect of change in tax rate:
Income statement		(2.7)	(1.5)	(0.4)	0.4	–	(0.4)	–	(4.6)
Equity		–	–	–	–	–	2.9	–	2.9
At 30th September, 2007		34.8	100.4	8.3	(8.3)	(21.8)	22.5	(8.3)	127.6
Disclosed within non-current liabilities		34.8	101.0	8.3	(8.3)	(20.5)	22.5	(2.2)	135.6
Disclosed within non-current assets		–	(0.6)	–	–	(1.3)	–	(6.1)	(8.0)
(Credit)/charge to income	9	12.1	(37.2)	(2.7)	3.4	(20.8)	(3.1)	(9.4)	(57.7)
Credit to equity	35	–	–	–	–	–	(30.9)	(9.1)	(40.0)
Owned by subsidiaries acquired	15	–	12.5	–	–	–	–	–	12.5
Owned by subsidiaries sold	16	–	0.1	–	–	–	–	–	0.1
Exchange adjustment		–	5.8	–	–	(2.3)	–	(3.1)	0.4
At 28th September, 2008		46.9	81.6	5.6	(4.9)	(44.9)	(11.5)	(29.9)	42.9
Disclosed within non-current liabilities		49.7	54.5	5.6	(4.9)	(1.5)	(11.5)	(17.9)	74.0
Disclosed within non-current assets		(2.8)	27.1	–	–	(43.4)	–	(12.0)	(31.1)
At 28th September, 2008		46.9	81.6	5.6	(4.9)	(44.9)	(11.5)	(29.9)	42.9

(i): The deferred tax assets disclosed in the Balance Sheet in respect of overseas tax losses, relate primarily to trading losses incurred in the US and have been recognised on the basis that the Directors are of the opinion based on recent and forecast trading, that sufficient suitable taxable profits will be generated in the relevant territories in future accounting periods, such that it is considered probable that these assets will be recovered. Of these assets, £24.9 million will expire between 2017 and 2028. The remaining assets have no expiry date.
(ii): There is an unrecognised deferred tax asset of £24.0 million (2007 £25.3 million) which relates primarily to overseas tax losses where there is insufficient certainty that these losses will be utilised in the foreseeable future. There is an additional unprovided deferred tax asset relating to capital losses carried forward of £29.4 million (2007 £20.7 million).
(iii): There is a potential taxable temporary difference in respect of the Group’s investments in subsidiaries, branches, associates and joint ventures, principally in relation to as yet unremitted earnings from overseas subsidiaries. The Group has estimated the potential taxable temporary difference to be approximately £680.7 million (2007 £801.5 million).

34 CALLED UP SHARE CAPITAL

	Authorised 2008 £m	Authorised 2007 £m	Alloted, issued and fully paid 2008 £m	Allotted, issued and fully paid 2007 £m
Ordinary shares of 12.5 pence each	2.5	2.5	2.5	2.5
‘A’ Ordinary Non-Voting shares of 12.5 pence each	48.5	48.5	46.6	46.9
	51.0	51.0	49.1	49.4

	2008 Number of shares	2007 Number of shares	Alloted, issued and fully paid 2008 Number of shares	Alloted, issued and fully paid 2007 Number of shares
Ordinary shares	20,000,000	20,000,000	19,886,472	19,886,472
‘A’ Ordinary Non-Voting shares	388,000,000	388,000,000	372,696,648	375,423,794
	408,000,000	408,000,000	392,583,120	395,310,266

The two classes of shares are equal in all respects, except that the ‘A’ Ordinary Non-Voting shares do not have voting rights and hence their holders are not entitled to vote at general meetings of the Company.

During the year, 18,389,672 ‘A’ Ordinary Non-Voting shares were purchased having a nominal value of £2,298,709 as part of a review of opportunities to buy back shares and to match obligations under an incentive plan. The consideration paid for these shares was £88.3 million. Shares repurchased during the period represented 4.93% of the called up ‘A’ Ordinary Non-Voting share capital at 28th September, 2008.

The Company disposed of 3,801,025 of these shares, representing 1.02% of the called up ‘A’ Ordinary Non-Voting share capital, in order to satisfy incentive schemes. The Company also cancelled 2,727,146 ‘A’ Ordinary Non-Voting shares, representing 0.73% of its called up ‘A’ Ordinary non-voting share capital at the date of cancellation.

At 28th September, 2008, options were outstanding under the terms of the Company’s 1997 and 2006 Executive Share Option Schemes over a total of 6,978,245 (2007 6,423,854) ‘A’ Ordinary Non-Voting shares.

35 RESERVES

	Note	2008 £m	2007 £m
Share premium account
At beginning of year		12.4	9.7
Issue of shares		–	2.7
At end of year		12.4	12.4
Capital redemption reserve
At beginning of year		0.8	–
On cancellation of ‘A’ Ordinary shares		0.3	0.8
At end of year		1.1	0.8
Revaluation reserve
At beginning of year		46.0	46.5
Revaluation reserves recycled to income statement on impairment of GCap Media plc		–	24.4
Transfer to retained earnings realised gain on GCap Media plc shares		(6.5)	(24.4)
Transfer to retained earnings following disposal of properties previously revalued		–	(0.7)
Fair value movement in available-for-sale assets	21	–	0.2
At end of year		39.5	46.0

The revaluation reserve arises following revaluation of the Group’s available-for-sale investments and their historic amounts relating to previous GAAP which were not transferred to retained earnings on transition to IFRS. Additionally, at the start of the year, £6.5 million relating to an unrealised gain on disposal of businesses to GWR Group plc (now Global Radio) in 2005 was included within revaluation reserves.

	2008 £m	2007 £m
Shares held in treasury
At beginning of year	(44.4)	(63.1)
Purchase of own shares	(88.3)	(32.8)
Own shares released on vesting of share options	21.0	4.9
Own shares cancelled	18.2	46.6
At end of year	(93.5)	(44.4)

The Group’s investment in its own shares is classified within shareholders’ funds as shares held in treasury. At 28th September, 2008 this investment comprised the cost of 18,215,407 ‘A’ Ordinary Non-Voting shares (2007 6,353,906 shares). The market value of these shares at 28th September, 2008 was £59.1 million (2007 £40.0 million).

	2008 £m	2007 £m
Translation reserve
At beginning of year	27.0	8.2
Exchange differences on translation of overseas operations	58.8	1.8
Translation reserves recycled to income statement on disposals	(0.1)	(0.1)
Transfer of gain on cash flow hedges to income statement	(2.9)	(2.7)
(Losses)/gains on cash flow hedges	(17.5)	6.4
Change in value of net investment hedges	(45.3)	13.4
Transfer minority share of items reported directly in equity	2.2	–
At end of year	22.2	27.0

The translation reserve arises on the translation into Sterling of the net assets of the Group’s foreign operations, offset by changes in fair value of financial instruments used to hedge this exposure.

	Note	2008 £m	2007 £m
Retained earnings
At beginning of year		601.7	423.8
Net profit for the year		–	107.0
Dividends paid	10	(56.3)	(53.2)
Actuarial (loss)/gain on defined benefit pension schemes	31	(110.4)	207.1
Credit to equity for share-based payments	38	16.6	18.1
Settlement of exercised share options of subsidiary		(20.2)	(13.2)
Initial reordering of put options granted to minority interests in subsidiaries	(i)	(0.5)	(18.5)
Transfer from revaluation reserves realised gain on GCap Media plc		6.5	24.4
Exercise of acquisition option commitments		7.0	7.2
Cancellation of shares held in treasury		(18.2)	(46.6)
Transfer from revaluation reserves following disposal of properties previously revalued	19	–	0.7
Movement in losses attributable to minorities which are borne by Group	36	–	5.4
Transfer minority share of items reported directly in equity	36	(8.7)	(1.1)
Revaluation of previously held interest in associate on acquisition of control	15	27.0	–
Adjustment to equity following increased stake in controlled entity		(6.4)	–
Current tax on items recognised in equity		1.0	0.3
Deferred tax on actuarial movement	33	30.9	(60.9)
Deferred tax on other items recognised directly in equity	33	9.1	1.2
At end of year		479.1	601.7
At end of year – Total Reserves		460.8	643.5

(i): £0.5 million (2007 £18.5 million) representing the fair value of written put options granted to minority shareholders in the year has been recorded as a reduction in equity on initial recording, as the arrangement represents a transaction with equity holders. Changes in fair value after initial recognition are recorded in the income statement.

36 MINORITY INTERESTS

	2008 £m	2007 £m
At beginning of year	27.6	–
Share of profit	16.8	15.3
Dividends paid	(10.3)	(8.9)
Shares issued	0.2	0.5
Minority interests arising from business combinations	0.2	2.3
Share of items reported directly in equity	6.6	1.1
Other transactions with minorities	(2.6)	0.2
Movement in losses attributable to minorities which are borne by the Group	–	(5.4)
Minority share of new equity in Euromoney	–	22.7
Exchange adjustment	0.2	(0.2)
At end of year	38.7	27.6

When losses attributable to minorities exceed the minorities’ interests in the subsidiaries’ equity, the minorities share of losses is carried forward in Group retained earnings.

37 COMMITMENTS AND CONTINGENT LIABILITIES

Commitments

	2008 £m	2007 £m
Property, plant and equipment
Contracted but not provided in the financial statements	0.7	3.3

At 28th September, 2008 the Group had outstanding commitments for future minimum lease payments under non-cancellable operating leases, which fall due as follows:

	2008 Properties £m	2008 Plant and equipment £m	2007 Properties £m	2007 Plant and equipment £m
Within one year	31.2	2.9	25.6	2.1
Between one and two years	25.2	3.4	21.0	2.2
Between two and five years	62.3	3.3	52.0	4.1
After five years	82.6	–	71.6	–
	201.3	9.6	170.2	8.4

The Group’s most significant leasing arrangements relate to rented properties. The Group negotiates lease contracts according to the Group’s needs with a view to balancing stability and security of tenure and lease terms with the risk of entering into excessively long or onerous arrangements. Of the Group’s rented properties, the most significant commitment relates to the head office premises at 2 Derry Street, London W8 5TT. This lease expires on 25th December, 2022.

The Group entered into arrangements with its ink suppliers to obtain ink for the period to september 2015 at competitive prices and to secure supply. At the year end, the commitment to purchase ink over the period was £148.6 million (2007 £65.4 million).

The Group has entered into agreements with certain printers for periods up to 2022 at competitive prices and to secure supply. At the year end, the commitment to purchase printing capacity over the period was £65.1 million (2007 £33.4 million).

Contingent liabilities

As set out in note 31 the Group has issued stand by letters of credit in favour of the Trustees of the Group’s defined benefit pension fund amounting to £64.3 million (2007 £nil).

The Group is exposed to libel claims in the ordinary course of business and vigorously defends against claims received, the Group makes provision for the estimated costs to defend such claims when incurred and provides for any settlement costs when such an outcome is judged probable.

Four writs claiming damages for libel have been issued in Malaysia against Euromoney Institutional Investor and three of its employees in respect of an article published in one of Euromoney’s magazines, International Commercial Litigation, in November 1995. The writs were served on Euromoney on 22nd October, 1996. Two of these writs have been discontinued. The total outstanding amount claimed on the two remaining writs is 82 million Malaysian ringgits, £13.5 million. No provision has been made in these accounts since the Directors do not believe that Euromoney has any material liability in respect of these writs.

38 SHARE-BASED PAYMENTS

The Group offers a number of share-based remuneration schemes to Directors and certain employees. The principal schemes comprise share options under the DMGT, Euromoney and within DMG information, Risk Management Solutions (RMS), Genscape and Trepp Executive Share Option Schemes (ESOS), the Euromoney Capital Appreciation Plan and the Company’s LTIP. Share options are exercisable after three years, subject in some cases to the satisfaction of performance conditions, and up to ten years from the date of grant at a price equivalent to the market value of the respective shares at the date of grant at a price equivalent to the market value of the respective shares at the date of grant. Details of the performance conditions relating to the DMGT schemes are explained in the Remuneration Report.

For equity-settled share-based payment transactions, IFRS 2, Share-based payments applies to grants of shares, share options or other equity instruments made after 7th November, 2002 that had not vested by 1st January, 2005.

The charge to the income statement arising from the most significant schemes is analysed as follows:

Division	Scheme	2008 £m	2007 £m
DMGT	Executive Share Option Scheme	5.1	1.5
	Long Term Incentive Plan	1.2	0.6
Business information	RMS	4.7	4.5
	Genscape	0.3	0.7
	Trepp	0.3	0.5
Euromoney	Capital Appreciation Plan	4.7	9.8
	Save As You Earn scheme	0.3	0.2
	ISI (cash settled)	0.4	0.3
		17.0	18.1

The fair value of share options for each of these schemes was determined using a Black-Scholes model. Full details of inputs to the models, particular to each scheme, are set out below. With respect to all schemes, the share price volatility has been estimated, based upon relevant historic data in respect of the DMGT ‘A’ Ordinary share prices.

Expected volatility has been estimated, based upon relevant historic data in respect of the DMGT ‘A’ Ordinary share price. The expected life used in the model has been adjusted, based on management’s best estimate, for the effects of non-transferability.

The Group did not re-price any of its outstanding options during the year.

Further details of the Group’s schemes are set out below:

DMGT 1997 Executive Share Option Scheme

	2008 Number of share options	2008 Weighted average excercise price £	2007 Number of share options*	2007 Weighted average excercise price* £
Outstanding at 30 September, 2007	2,490,354	6.44	2,708,056	6.94
Exercised during the year	–	–	(37,146)	6.45
Forfeited during the year	(124,854)	6.87	(180,556)	6.15
Expired during the year	(49,255)	6.09	–	–
Outstanding at 28th September, 2008	2,316,245	6.43	2,490,354	6.44
Exercisable at 28th September, 2008	–	–	–	–
Exercisable at 1st October, 2007	–	–	–	–

*: The above summary has been re-analysed to exclude 1,708,500 (2007 1,757,000) share options that were granted before 7th November, 2002. In accordance with IFRS 2, no cost has been recognised in respect of these options.

No share options were granted during the year.

The options outstanding at 28th September, 2008 had a weighted average remaining contractual life of 6.3 years (2007 5.8 years).

Options under the DMGT 1997 Executive Share Option Scheme

The inputs into the Black-Scholes model for options, granted since 7th November 2002, are as follows:

	16th December, 2002	2nd January, 2003	8th December, 2003	16th June, 2004	6th December, 2004
Market value of shares at date of grant (p)	573.0	581.5	607.5	684.0	723.5
Option price (p)	573.0	581.5	607.5	684.0	723.5
Number of share options outstanding	625,795	62,000	721,742	5,000	901,708
Term of option (years)	10.00	10.00	10.00	10.00	10.00
Assumed period of exercise after vesting (years)	6.50	6.50	6.50	6.50	6.50
Exercise price (p)	573.0	581.5	607.5	684.0	723.5
Risk-free rate (%)	5.00	5.00	4.80	4.60	4.50
Expected dividend yield (%)	1.61	1.58	1.65	1.51	1.52
Volatility (%)	20.00	20.00	20.00	20.00	20.00
Fair value per option (p)	134.7	136.7	142.8	160.7	170.0

DMGT 2006 Executive Share Option Scheme

	2008 Number of share options	2008 Weighted average excercise price £	2007 Number of share options	2007 Weighted average excercise price £
Outstanding at 30th September, 2007	2,176,500	6.89	1,132,000	6.90
Granted during the year	824,000	4.85	1,070,500	6.88
Forfeited during the year	(47,000)	6.67	–	–
Expired during the year	–	–	(26,000)	6.93
Outstanding at 28th September, 2008	2,953,500	6.33	2,176,500	6.89
Exercisable at 28th September, 2008	–	–	–	–
Exercisable at 1st October, 2007	–	–	–	–

No share options were exercised or expired during the year. Options were forfeited by leavers. Options that expired in the year were renounced by current executives before the end of their 10 year term.

The options outstanding at 28th September, 2008 had a weighted average remaining contractual life of 8.2 years (2007 8.8 years).

DMGT 2006 Executive Share Option Scheme – Options granted during the year were as follows:

	2008 Number of share options	2007 Number of share options
9th June, 2008	100,000	–
27th May, 2008	35,000	–
17th December, 2007	689,000	–
27th November, 2006	–	1,070,500
	824,000	1,070,500

The aggregate of the estimated fair values of the options granted on the above dates is £0.8 million (2007 £1.6 million).

DMGT 2006 Executive Share Option Scheme

The inputs into the Black-Scholes model are as follows:

Date of grant	31st March, 2006	5th July, 2006	27th November, 2006
Market value of shares at date of grant (p)	698.0	610.5	688.0
Option price (p)	698.0	610.5	688.0
Number of share options outstanding	1,009,000	93,000	1,031,500
Term of option (years)	10.00	10.00	10.00
Assumed period of exercise after vesting (years)	7.00	7.00	7.00
Exercise price (p)	698.0	610.5	688.0
Risk-free rate (%)	4.50	4.80	4.30
Expected dividend yield (%)	1.72	2.01	1.90
Volatility (%)	20.00	20.00	20.00
Fair value per option (p)	153.0	143.5	150.8

Date of grant	17th December, 2007	27th May, 2008	9th June, 2008
Market value of shares at date of grant (p)	504.5	402.0	381.5
Option price (p)	504.5	402.0	381.5
Number of share options outstanding	685,000	35,000	100,000
Term of option (years)	10.00	10.00	10.00
Assumed period of exercise after vesting (years)	7.00	7.00	7.00
Exercise price (p)	504.50	402.00	381.50
Risk-free rate (%)	4.30	4.30	4.30
Expected dividend yield (%)	2.84	3.66	3.85
Volatility (%)	20.00	20.00	30.00
Fair value per option (p)	117.8	92.0	85.3

DMGT Long Term Incentive Plan

	2008 Number of awards	2008 Weighted everage exercise price £	2007 Number of awards*	2007 Weighted average exercise price* £
Outstanding at 30th September, 2007	695,626	7.09	540,211	7.07
Awarded during the year	565,425	4.27	155,415	7.17
Expired during the year	(764)	7.17	–	–
Outstanding at 28th September, 2008	1,260,287	5.82	695,626	7.09
Exercisable at 28th September, 2008	–	–	–	–
Exercisable at 1st October, 2007	–	–	–	–

*: the above summary has been reanalysed to exclude 322,499 (2007 322,499) of awards that were granted before 7th November, 2002. In accordance with IFRS 2, no cost has been recognised in respect of these awards.

No share options were exercised or forfeited during the year.

The awards outstanding at 28th September, 2008 had a weighted average remaining contractual life of 2.2 years (2007 1.4 years).

Awards made during the year were as follows:

	2008 Number of awards	2007 Number of awards
19th March, 2008	565,425	–
1st January, 2007	–	155,415
	565,425	155,415

The aggregate of the estimated fair values of the awards made on the above dates is £2.3 million (2007 £0.8 million).

Options under the DMGT Long Term Incentive Scheme

The inputs into the Black-Scholes model are as follows:

Date of grant	1st January, 2003	1st January, 2004	1st January, 2005	1st January, 2006	1st January, 2007
Market value of shares at date of grant (p)	593.8	703.5	753.0	788.0	717.0
Option price (p)	593.8	703.5	753.0	788.0	717.0
Number of awards outstanding	111,557	221,743	95,650	111,261	154,651
Term of awards (years)	5.00	5.00	5.00	5.00	5.00
Assumed period of exercise after vesting (years)	–	–	–	–	–
Exercise price (p)	Nil	Nil	Nil	Nil	Nil
Risk-free rate (%)	5.00	4.80	4.50	4.50	4.30
Expected dividend yield (%)	1.55	1.42	1.46	1.52	1.82
Volatility (%)	20.00	20.00	20.00	20.00	20.00
Fair value per option (p)	451.3	534.7	572.3	598.9	544.9

Date of grant	19th March, 2008	19th March, 2008	19th March, 2008	19th March, 2008	19th March, 2008
Market value of shares at date of grant (p)	426.5	426.5	426.5	426.5	426.5
Option price (p)	426.5	426.5	426.5	426.5	426.5
Number of awards outstanding	129,265	64,632	64,632	64,632	64,632
Term of awards (years)	2.70	3.00	4.00	5.00	6.00
Assumed period of exercise after vesting (years)	–	–	–	–	–
Exercise price (p)	Nil	Nil	Nil	Nil	Nil
Risk-free rate (%)	4.30	4.30	4.30	4.30	4.30
Expected dividend yield (%)	3.36	3.36	3.36	3.36	3.36
Volatility (%)	20.00	20.00	20.00	20.00	20.00
Fair value per option (p)	394.5	394.5	394.5	394.5	394.5

Date of grant	19th March, 2008
Market value of shares at date of grant (p)	426.5
Option price (p)	426.5
Number of awards outstanding	177,632
Term of awards (years)	6.00
Assumed period of exercise after vesting (years)	–
Exercise price (p)	Nil
Risk-free rate (%)	4.30
Expected dividend yield (%)	3.36
Volatility (%)	20.00
Fair value per option (p)	394.5

In March, an award was made to a senior executive as part of his recruitment.

Executive Plan

	2008 Number of awards	2008 Weighted average exercise price	2007 Number of awards	2007 Weighted average exercise price
Outstanding at 30th September, 2007	–	–	–	–
Awarded during the year	320,000	4.30	–	–
Outstanding at 28th September, 2008	320,000	4.30	–	–
Exercisable at 28th September, 2008	–	–	–	–
Exercisable at 1st October, 2007	–	–	–	–

No awards were exercised or expired or forfeited during the year.

The awards outstanding at 28th September, 2008 had a weighted average remaining contractual life of 3.4 years.

Executive Plan

Awards made during the year were as follows:

	2008 Number of awards	2007 Number of awards
25th March, 2008	320,000	–
	320,000	–

The aggregate of the estimated fair values of the awards made on the above dates is £1.4 million.

Executive Plan

The inputs into the Black-Scholes model are as follows:

Date of grant	25th March, 2008
Market value of shares at date of grant (p)	429.5
Option price (p)	429.5
Number of awards outstanding	320,000
Term of awards (years)	3.90
Assumed period of exercise after vesting (years)	–
Exercise price (p)	Nil
Risk-free rate (%)	4.30
Expected dividend yield (%)	3.34
Volatility (%)	20.00
Fair value per option (p)	429.5

Divisional management incentive schemes

The Group operated a long term incentive scheme for senior employees of the Group’s national media division based on cumulative profit targets for the three years to 30th September, 2007. At the end of each of the three years, participants in the scheme were invited to pledge their annual bonus either as cash or by taking DMGT ‘A’ Ordinary shares, both of which must be committed to the scheme until the end of its three year life. The initial scheme vested at 30th September, 2007 and so a matching award was made to each participant.

Matching awards of 56,368 shares were made on 27th November, 2007 when the share price was £5.43.

No shares were forfeited or lapsed during the year.

The Group operates a long term incentive plan for senior employees of the Group’s local media division based on profit and revenue targets. Participants in the scheme have the choice of being rewarded with a cash bonus or by taking DMGT ‘A’ Ordinary shares. Where a participant chooses to take shares it is a condition of the scheme that the shares must be held for a minimum of two years. No shares were awarded, forfeited or lapsed during the year.

The Euromoney Capital Appreciation Plan (CAP)

The CAP executive share option scheme was approved by shareholders on 1st February, 2005. Each of the CAP awards comprises an option to subscribe for Ordinary shares of 0.25p each in the Company for an exercise price of 0.25p per Ordinary share. The awards become exercisable on satisfaction of certain performance conditions and lapse to the extent unexercised on 30th September, 2014. The initial performance condition (increased during 2007 to reflect the acquisition of Metal Bulletin) was achieved in the financial year 2007 and the option pool (a maximum of 7.5 million shares) was allocated between the holders of outstanding awards. One third of the awards vested on 14th February, 2008. The primary performance target was achieved again in 2008 and the second tranche of options will vest in February 2009 subject to the businesses also achieving the secondary performance criteria. The final tranche will vest in 2010, but only if the primary and secondary performance conditions are again met, otherwise vesting is deferred until both the profit target of £57.0 million achieved in 2007 is achieved again, and the profits of the individual participants businesses are at least 75% of that achieved in 2007 but no later than by reference to the year ending 30th September, 2012.

Euromoney Share Option Schemes

The company has 12 share option schemes for which an IFRS2 charge has been recognised. The fair value per option granted and the assumptions used in the calculation are shown in the table below. The executive and Save as You Earn Options were valued using the Black-Scholes option-pricing model. Expected volatility was determined by calculating the historical volatility of the group’s share price over a period of 13 years. The executive options’ fair values have been discounted at a rate of 10% to reflect their performance conditions. The expected term of the option used in the model has been adjusted, based on management’s best estimate, for the effects of non-transferability, exercise restrictions and behavioural considerations.

	2008 Number of share options	2008 Weighted average exercise price £	2007 Number of share options	2007 Weighted average exercise price £
Outstanding at 30th September, 2007	4,753,726	1.92	2,477,965	4.04
Awarded during the year	2,619,410	0.15	2,640,578	0.23
Exercised during the year	(2,328,418)	0.03	(107,049)	4.01
Expired during the year	(178,850)	3.85	(227,768)	4.09
Outstanding at 28th September, 2008	4,865,868	1.80	4,783,726	1.92
Exercisable at 28th September, 2008	4,865,868	1.80	4,783,726	1.92
Exercisable at 1st October, 2007	4,753,726	1.92	2,477,965	4.04

The weighted average share price at the date of exercise for share options exercised during the year was £3.85 (2007 £5.91).

The options outstanding at 28th September, 2008 had a weighted average exercise price of £1.80 (2007 £1.92) and a weighted average remaining contractual life of 4.37 years (2007 5.25 years). Options granted during the year were as follows:

	2008 Number of share options	2007 Number of share options
CAP
30th September, 2007	–	2,500,000
30th September, 2008	2,500,000	–
SAYE
5th January, 2007	–	140,578
17th December, 2007	119,410	–
	2,619,410	2,640,578

The aggregate of the estimated fair values of the options granted on the above dates is £0.4 million (2007 £0.6 million).

The Euromoney Capital Appreciation Plan

The inputs into the Black-Scholes model are as follows:

Scheme type	Tranche 1	CAP Tranche 2	Tranche 3
Date of grant	20th June, 2005	20th June, 2005	20th June, 2005
Market value of shares at date of grant (p)	401.0	401.0	401.0
Option price (p)	0.25	0.25	0.25
Number of share options outstanding	190,780	2,500,000	2,500,000
Term of option (years)	10.00	10.00	10.00
Assumed period of exercise after vesting (years)	3.28	4.53	5.53
Exercise price (p)	0.25	0.25	0.25
Risk-free rate (%)	5.00	5.00	5.00
Dividend growth (%)	8.44	8.44	8.44
Fair value per option (p)	3.28	3.02	2.82

Euromoney Share Option Schemes

The inputs into the Black-Scholes model are as follows:

Date of grant	4th December, 2004	28th January, 2004
Market value of shares at date of grant (p)	259.0	419.0
Option price (p)	259.00	419.00
Number of share options outstanding	356,000	319,000
Term of option (years)	10.00	10.00
Assumed period of exercise after vesting (years)	5.50	5.50
Exercise price (p)	259.00	419.00
Risk-free rate (%)	4.10	4.10
Expected dividend yield (%)	3.93	3.93
Volatility (%)	30.00	30.00
Fair value per option (p)	52.0	72.0

SAYE Scheme

The inputs into the Black-Scholes model are as follows:

	4th January, 2005	1st February, 2006	5th January, 2007	17th December, 2007
Market value of shares at date of grant (p)	423.0	461.0	524.0	397.0
Option price (p)	338.0	369.0	419.0	318.0
Number of share options outstanding	1,121	70,869	70,138	92,312
Term of option (years)	3.5	3.5	3.5	3.5
Assumed period of exercise after vesting (years)	3.0	3.0	3.0	3.0
Exercise price (p)	338.0	369.0	419.0	318.0
Risk-free rate (%)	4.80	4.80	4.75	4.25
Expected dividend yield (%)	3.35	3.35	3.35	3.35
Volatility (%)	30.00	30.00	30.00	30.00
Fair value per option (£)	1.2	1.2	1.5	1.1

Internet Securities, Inc. cash settled options

The inputs into the Black-Scholes model are as follows:

Date of grant	2nd February, 2004	11th May, 2005	28th February, 2006
Market value of shares at date of grant (p)	n/a	n/a	n/a
Option price (p)	n/a	n/a	n/a
Number of share options outstanding	47,539	1,845	38,501
Term of option (years)	10.0	10.0	10.0
Expected term of option (grant to exercise (years))	6.5	5.5	4.5
Exercise price (p)	n/a	n/a	n/a
Risk-free rate (%)	n/a	n/a	n/a
Expected dividend yield (%)	n/a	n/a	n/a
Dividend growth (%)	n/a	n/a	n/a
Fair value per option (US$)	18.57	18.57	52.70

CAP options were valued using a fair value model that adjusted the share price at the date of grant for the net present value of expected future dividend streams up to the date of expected exercise. Under IFRS 2, Internet Securities, Inc. options are classified as cash settled options. As such their related fair value equates to the fair value at the Balance Sheet date. For both these option schemes, the expected term of the option used in the models has been adjusted, based on management’s best estimate, for the effects of non-transferability, exercise restrictions and behavioural considerations.

RMS options plan

RMS Options were granted at market value. The options become exercisable after a four year vesting period and lapse after 10 years from grant date. Previously, the stock issued under the plan was subject to a nine month holding period, which has been subsequently removed during 2007. The stock issued under the plan is subject to put or call options where DMGT has the right to settle in DMGT ‘A’ Ordinary shares or cash. The options plan classification changed from cash settled plan in June 2005 to equity settled plan following this change of settlement feature of stock issued under the plan.

RMS Option Scheme

	2008 Number of share options	2008 Weighted average exercise price $	2007 Number of share options	2007 Weighted average exercise price $
Outstanding at 30th September, 2007	2,176,759	29.99	1,537,033	24.48
Granted during the year	1,123,515	45.65	949,525	36.39
Forfeited during the year	(95,994)	39.15	(199,907)	28.09
Exercised during the year	(407,750)	25.72	(109,892)	11.74
Outstanding at 28th September, 2008	2,796,530	36.64	2,176,759	29.99
Exercisable at 28th September, 2008	1,224,342	32.11	609,803	23.06
Exercisable at 1st October, 2007	609,803	23.06	172,515	8.93

The weighted average share price at the date of exercise for share options exercised during the year was $45.43 (2007 $36.39).

The options outstanding at 28th September, 2008 had a weighted average exercise price of $36.64 (2007 $29.99) and a weighted average remaining contractual life of 8.01 years (2007 8.11 years).

Options granted during the year were as follows:

	2008 Number of share options	2007 Number of share options
1st October	965,591	794,875
2nd October	–	4,000
9th October	–	1,200
15th October	1,250	–
23rd October	–	3,200
5th November	2,500	–
7th November	–	4,000
12th November	1,250	–
13th November	–	2,500
26th November	3,000	–
30th November	–	10,000
1st December	–	1,000
4th December	–	2,500
1st January	2,000	500
7th January	1,000	–
14th January	1,000	–
25th February	10,424	–
26th February	–	1,000
1st March	–	19,500
31st March	31,500	–
1st April	35,000	6,250
28th April	2,500	–
1st May	15,000	81,000
14th May	–	6,500
15th May	–	1,000
19th May	4,000	–
29th May	–	1,000
1st June	5,000	500
11th June	–	1,000
18th June	–	3,000
23rd June	2,500	–
1st July	10,000	–
15th July	–	2,000
23rd July	–	1,000
6th August	–	2,000
11th August	1,500	–
12th August	1,500	–
2nd September	1,500	–
15th September	21,500	–
22nd September	4,000	–
	1,123,515	949,525

The aggregate of the estimated fair values of the options granted on the above dates is $11.8 million (2007 $9.8 million).

RMS Option scheme

The inputs into the Black-Scholes model are as follows:

Date of grant	During 2001	During 2002	During 2003	During 2004	During 2005
Market value of shares at date of grant (US cents)	526.0	481.0	556.0	913.0	1,661.0
Option price (US cents)	526.0	481.0	556.0	913.0	1,661.0
Number of share options outstanding	7,646	3,283	37,894	46,822	87,783
Term of option (years)	–	0.67	1.67	2.67	3.67
Assumed period of exercise after vesting (years)	6-9	6-9	6-9	6-9	6-9
Exercise price (US cents)	526.0	481.0	556.0	913.0	1,661.0
Risk-free rate (%)	4.00	4.00	4.00	4.00	4.00
Expected dividend yield (%)	2.00	2.00	2.00	2.00	2.00
Volatility (%)	35.00	35.00	35.00	35.00	35.00
Fair value per option (US cents)	2,222.0	2,243.0	2,138.0	1,791.0	1,253.0

Date of grant	During 2006	During 2007	During 2008	During 2008
Market value of shares at date of grant (US cents)	2,978.0	3,639.0	4,543.0	4,781.0
Option price (US cents)	2,978.0	3,639.0	4,543.0	4,781.0
Number of share options outstanding	728,958	800,629	979,515	104,000
Term of option (years)	4.27	3.80	3.80	3.80
Assumed period of exercise after vesting (years)	6-9	6-9	6-9	6-9
Exercise price (US cents)	2,978.0	3,639.0	4,543.0	4,781.0
Risk-free rate (%)	4.00	4.70	4.10	2.20
Expected dividend yield (%)	2.00	2.00	2.00	2.00
Volatility (%)	35.00	35.00	29.00	32.00
Fair value per option (US cents)	857.0	1,029.0	1,069.0	1,045.0

Expected volatility was determined by calculating the historical volatility of comparable companies.

Genscape options scheme

Genscape Options were granted at market value. The options become exercisable after a three year vesting period and lapse after 10 years from the grant date. The stock issued under the plan is subject to put or call options where DMGT has the right to settle in DMGT ‘A’ Ordinary shares or cash.

Genscape Option Scheme

	2008 Number of share options	2008 Weighted average exercise price $	2007 Number of share options	2007 Weighted average exercise price $
Outstanding at 30th September, 2007	4,499,632	2.78	4,549,632	2.78
Granted during the year	290,500	2.78	–	–
Forfeited during the year	(63,556)	2.78	(50,000)	2.78
Exercised during the year	(36,944)	2.78	–	–
Outstanding at 28th September, 2008	4,689,632	2.78	4,499,632	2.78
Exercisable at 28th September, 2008	3,431,380	2.78	1,924,281	2.78
Exercisable at 1st October, 2007	1,924,281	2.78	–	–

There were no share option exercises during the year. The weighted average share price at the date of exercise for share options cancelled for consideration during the year was $3.08

The options outstanding at 28th September, 2008 had a weighted average remaining contractual life of 7.7 years (2007 8.7 years).

Options granted during the year were as follows:

	2008 Number of share options	2007 Number of share options
24th January, 2008	290,500	–
	290,500	–

The aggregate of the estimated fair values of the options granted on the above dates is $0.2 million (2007 Nil).

Genscape Option Scheme

The inputs into the Black-Scholes model are as follows:

Date of grant	During 2006	During 2008
Market value of shares at date of grant (US cents)	277.8	278.0
Option price (US cents)	277.8	278.0
Number of share options outstanding	4,499,632	260,000
Term of option (years)	5.00	3.40
Assumed period of exercise after vesting (years)	7-9	7-9
Exercise price (US cents)	277.8	278.0
Risk-free rate (%)	4.00	2.20
Expected dividend yield (%)	3.50	3.30
Volatility (%)	35.00	38.00
Fair value per option (US cents)	73.0	65.0

Expected volatility was determined by calculating the historical volatility of comparable companies.

Trepp Option Scheme

	2008 Number of share options	2008 Weighted average exercise price £	2007 Number of share options	2007 Weighted average exercise price £
Outstanding at 30th September, 2007	511,570	11.90	–	–
Granted during the year	170,510	12.95	511,570	11.90
Outstanding at 28th September, 2008	682,080	12.16	511,570	11.90
Exercisable at 28th September, 2008	341,035	12.03	127,893	11.90
Exercisable at 1st October, 2007	127,893	11.90	–	–

No options were exercised during the year (2007 None).

The options outstanding at 28th September, 2008 had a weighted average remaining contractual life of 3.3 years (2007 4 years).

Options granted during the year were as follows:

	2008 Number of share options	2007 Number of share options
1st October	170,510	511,570
	170,510	511,570

The aggregate of the estimated fair values of the options granted on the above dates is $0.4 million (2007 $1.3 million).

Trepp Option Scheme

The inputs into the Black-Scholes model are as follows:

Date of grant	During 2007	During 2008
Market value of shares at date of grant (US cents)	1,190.0	1,295.0
Option price (US cents)	1,190.0	1,295.0
Number of share options outstanding	511,570	170,510
Term of option (years)	3.00	3.00
Assumed period of exercise after vesting (years)	2-5	2-5
Exercise price (US cents)	1,190.0	1,295.0
Risk-free rate (%)	4.67	4.10
Expected dividend yield (%)	4.30	4.00
Volatility (%)	35.00	30.00
Fair value per option (US cents)	254.0	236.0

Trepp Options were granted at market value. The options become exercisable after a three year vesting period and lapse after five years from the grant date. The stock issued under the plan is subject to put or call options where DMGT has the right to settle in DMGT ‘A’ Ordinary shares.

Expected volatility was determined by calculating the historical volatility of comparable companies.

39 ULTIMATE HOLDING COMPANY

The Company’s ultimate holding company and immediate parent company is Rothermere Continuation Limited, a company incorporated in Bermuda.

40 RELATED PARTY TRANSACTIONS

Transactions between the Company and its subsidiaries, which are related parties, have been eliminated on consolidation and are not disclosed in this note. The transactions between the Group and its joint ventures and associates are disclosed below.

Ultimate Controlling Party

The Company’s ultimate controlling party is the Viscount Rothermere, the Company’s Chairman. Transactions relating to the remuneration and shareholdings of the Viscount Rothermere are given in the Remuneration Report.

Transactions with Directors

There were no material transactions with Directors of the Company, except for those relating to remuneration and shareholdings, disclosed in the Remuneration Report.

For the purposes of IAS 24, Related Party Disclosures, Executives below the level of the Company’s Board are not regarded as related parties.

The remuneration of the Directors at the year end, who are the key management personnel of the Group, is set out below in aggregate for each of the categories specified in IAS 24. Further information about the individual Directors’ remuneration is provided in the audited part of the Directors’ Remuneration Report.

	2008 £m	2007 £m
Short-term employee benefits	6.1	5.9
Other long-term benefits	5.1	4.8
Share-based payments	1.8	1.2
	13.0	11.9

There were no retirement benefits or termination charges in 2008 or 2007.

Transactions with joint ventures and associates

Details of the Group’s principal joint ventures and associates are set out in note 20.

The Company sold its 41.75% share in Centurion Holidays Limited during the year. During the year the Company has funded the ongoing costs of Centurion by way of loans during the year which were repaid fully before disposal. Interest was charged on these loans during the year at the base rate +1% and amounted to £0.1 million (2007 £0.6 million). The total amount due from Centurion on 28th September, 2008 was £nil (2007 £3.7 million).

Associated Newspapers Limited has a 45% shareholding in Fortune Green Limited. During the year the Group received revenue for newsprint, computer and office services of £0.9 million (2007 £0.6 million). Amounts due from Fortune Green Limited at 28th September, 2008 were £0.3 million (2007 £nil).

Associated Newspapers Limited has a 20% share in the Newspapers Licensing Agency (NLA) from which royalty revenue of £3.0 million was received (2007 £2.0 million). Commissions paid on this revenue total £0.5 million (2007 £0.4 million). The amount due to the NLA on 28th September, 2008 was £0.2 million (2007 £nil).

Daily Mail and General Holdings Limited has a 15.8% share holding in The Press Association. During the year the Group received services amounting to £1.8 million (2007 £2.2 million) and the net amount due from the Press Association as at 28 September, 2008 was £0.1 million (2007 £0.2 million).

During the year, Landmark charged management fees of £0.3 million (2007 £0.3 million) to Point X Ltd, and recharged costs of £0.1 million (2007 £0.1 million). Point X received royalty income from Landmark of £43,000 (2007 £53,000) and owed £0.1 million to Landmark (2007 £48,000) at the year end.

During the year, Hobsons received dividend income of £0.6 million (2007 £0.2 million) from ECCTIS Ltd.

During the year, DMG Radio Australia Pty Ltd invoiced DMG Radio Perth Pty Ltd AU$2.8 million (2007 AUS$0.9 million) and Red Gherkin Pty Ltd AUS$8,000 (2007 AUS$nil).

Other related party disclosures

As at 28th September, 2008 there was a loan to an officer of the Company of £33,258 (2007 £33,258) which bears interest at 5% per annum. The maximum principal amount outstanding during the year was £33,258 (2007 £33,258). At 28th September, 2008 there was a further loan outstanding to the officer of £3,733 which loan bears interest at 6.25% per annum. The maximum principal amount outstanding during the year was £3,733 (2007 £3,773).

At 28th September, 2008, the Group owed £1.5 million (2007 £1.2 million) to the pension schemes which it operates. This amount comprised employees’ and employer’s contributions in respect of September 2008 payrolls which were paid to the pension schemes in October 2008.

The Group recharges its principal pension schemes with costs of investment management fees. The total amount recharged during the year was £0.7 million (2007 £0.7 million).

41 POST BALANCE SHEET EVENTS

Details of material post Balance Sheet events are given in the Directors’ Report.

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Notes for this page

Notes to the Financial Statements

NOTES TO THE CONSOLIDATED INCOME STATEMENT

3 SEGMENT ANALYSIS

By activity

By geographic area

4 EMPLOYEES

5 SHARE OF RESULTS OF JOINT VENTURES AND ASSOCIATES

6 OTHER GAINS AND LOSSES

7 INVESTMENT REVENUE

8 FINANCE COSTS

9 TAX

10 DIVIDENDS PAID

11 ADJUSTED PROFIT (BEFORE EXCEPTIONAL OPERATING COSTS AND AMORTISATION AND IMPAIRMENT OF GOODWILL AND INTANGIBLE ASSETS, OTHER GAINS AND LOSSES AND EXCEPTIONAL FINANCING COSTS, AFTER TAXATION AND MINORITY INTERESTS)

12 EARNINGS/(LOSS) PER SHARE

NOTES TO THE CONSOLIDATED CASH FLOW STATEMENT

13 ANALYSIS OF NET DEBT

14 ANALYSIS OF MOVEMENTS IN CASH IN RESPECT OF ACQUISITIONS AND DISPOSALS

15 SUMMARY OF THE EFFECTS OF ACQUISITIONS

Fair value of net assets acquired:

Cost of acquisition:

Provisional fair value of net assets acquired with all other acquisitions:

Cost of acquisitions:

Purchase of additional shares in controlled entities

16 SUMMARY OF THE EFFECTS OF DISPOSALS

NOTES TO THE CONSOLIDATED BALANCE SHEET

17 GOODWILL

The impairment charge is analysed by major CGU as follows:

18 OTHER INTANGIBLE ASSETS

19 PROPERTY, PLANT AND EQUIPMENT

20 INVESTMENTS IN JOINT VENTURES AND ASSOCIATES

21 NON-CURRENT ASSETS – AVAILABLE-FOR-SALE INVESTMENTS

22 INVENTORIES

23 TRADE AND OTHER RECEIVABLES

Movement in the allowance for doubtful debts

Ageing of impaired trade receivables

Ageing of past due but not impaired receivables

24 DISCONTINUED OPERATIONS

25 CASH AND CASH EQUIVALENTS

26 TRADE AND OTHER PAYABLES

27 CURRENT TAX PAYABLE

28 ACQUISITION PUT OPTION COMMITMENTS

29 BORROWINGS

Committed Borrowing Facilities

Bonds

Loan notes

30 DERIVATIVE FINANCIAL INSTRUMENTS AND RISK MANAGEMENT

Capital risk management

Debt management

Cash and liquidity risk management

Market risk management

Interest rate risk management

Foreign exchange rate risk management

Credit risk management

Trade and other receivables

Institutional counterparty risk

Fair value hedges

Cash flow hedges

Net investment hedges

Derivatives not qualifying for hedge accounting

The Group’s derivative financial instruments, other than acquisition option commitments, and their maturity profiles are summarised as follows:

Derivative financial assets:

Derivative financial liabilities:

Sensitivity analysis

31 RETIREMENT BENEFITS

Defined Benefit Schemes

UK defined contribution plans

Overseas pension plans

Pension arrangements for executives

Stakeholder pension

32 PROVISIONS

33 DEFERRED TAXATION

34 CALLED UP SHARE CAPITAL

35 RESERVES

36 MINORITY INTERESTS

37 COMMITMENTS AND CONTINGENT LIABILITIES

Commitments

Contingent liabilities

38 SHARE-BASED PAYMENTS