Final Results

INDEPENDENT NEWS & MEDIA PLC

PROFIT BEFORE TAX GROWTH OF 29.4% TO €37.4M, GROUP REVENUE GROWTH OF 0.8%

Dublin and London 4 March 2016: Independent News & Media PLC (INM ID, INM LN) today announces its full year results for the 12 months ended 31 December 2015.

KEY HIGHLIGHTS1

· Strong profit before tax growth of 29.4% to €37.4m

Driven by strong digital advertising revenue growth of 41.7%, a significant reduction in interest costs and the continued focus on prudent cost management resulting in an improved operating margin.

· Total revenue increase of 1.2% excluding GrabOne

Total revenue of €321.2m was up 0.8% on the prior year (+1.2% excluding GrabOne). This was driven by a growth in total advertising revenue of €2.8m (+3.4%) and increased revenue from distribution (+5.0%), offsetting a decline in circulation revenue.

· Strengthened balance sheet, Group debt cleared

Strengthened balance sheet driven by divesting APN stake for €119.3m with proceeds used to clear Group debt reducing the interest charge2 from €6.1m to €1.9m. In addition to this the Group addressed longer term issues in the industry with the closure of the printing operation in Belfast, while also improving future performance by winding down GrabOne. INM net assets were €44.5m at year end 2015 compared with net liabilities of €43.9m at year end 2014.

· Largest weekly audience connection on the island of Ireland

In the Republic of Ireland, INM accounts for over 50%3 of the quality daily market, over 65%3 of the quality Sunday market, while the Belfast Telegraph continues to hold a strong No.1 position within the local daily newspaper market place in Northern Ireland and the Sunday Life has increased circulation market share, performing ahead of local competitors.

· Continued multi-platform growth in traffic and reader engagement enabling digital advertising growth

Significant investment in platforms, audience development and commercial opportunities has contributed to the digital business profitability. Strong advertising growth included revenues from a new "native" (sponsored content) product offering, while costs were re-aligned to the business scale. Audience numbers as defined by unique visitors/month to independent.ie grew to an average of 8.9m4, an increase of 9.7% on 2014, peaking at 10.7m in December 2015, while the app's user base grew to over 208,000 highly engaged readers.

· Total advertising revenue growth of 3.4% to €82.9m

Year on year growth in total advertising revenue was achieved, with digital advertising revenue growing by a significant 41.7% to €12.5m. Growth in digital offset a decline in publishing advertising revenue in the year of 1.3%.

1 Excludes the results of APN - sold in H1 2015 and the Education businesses - sold in June 2014.

2 Pre-exceptionals.

3 ABC July to Dec 2015.

4 Per Google Analytics.

Commenting on the results, Robert Pitt, Group Chief Executive Officer, said: "The Group delivered a strong performance in 2015 considering the strong headwinds the sector is experiencing. The strengthening of the recovery in Ireland's economy created a positive environment for improved business and consumer sentiment which buoyed advertising particularly. Driven by digital, increases were recorded in overall Group revenues and the company ended the year with a strong balance sheet, significantly improved profit before tax and strong cash flow. The print publishing industry continues to face challenging conditions as it faces rapid structural change, the need to invest in and improve the quality of the offer is paramount and INM is creating the conditions to do that. This strategy will support both INM and its business partners; INM's market outperformance is keeping the newspaper category alive for both publishers and retail channels. These results have been achieved through the hard work and commitment of our employees, for which we are very grateful. The indications for 2016 suggest that the existing challenging market conditions will continue in the coming year."

FINANCIAL HIGHLIGHTS1

· Profit before tax increased by 29.4% to €37.4m, driven by continued strong digital advertising revenue growth offsetting the decline in publishing advertising revenue, significantly reduced interest costs and prudent management of the cost base.

· Total revenue of €321.2m, up 0.8% on the prior year (+1.2% excluding GrabOne).

· Total advertising revenue was up 3.4% on the prior year to €82.9m.

· Digital advertising revenue growth of 41.7% to €12.5m more than offset a decline in publishing advertising revenue.

· Circulation revenue declined by 4.1%, however INM strongly outperformed the industry average. This was driven by investment into the quality of INM's titles.

· The Group ended the year with an increased cash balance of €59.7m. This result was generated primarily from a strong EBITDA performance, good working capital management, the sale of APN and reduced interest charges following the repayment of Group debt.

· Net Assets currently stand at €44.5m, versus net liabilities of (€43.9m) in the prior year.

· Group debt cleared, with interest charge2 for 2015 reduced from €6.1m to €1.9m. No interest charge is expected in 2016 in light of the repayment of Group debt.

· The Group continued its focus on cost management, with operating costs1 reducing by 0.5% year on year (pre-distribution down 3.0%). The Group's integration of its print and digital news operations has contributed positively to cost management.

· The Group recorded a total net exceptional gain of €40.7m in 2015, which included:

§ A €47.4m gain on sale of APN shareholding;

§ A €4.6m impairment charge; and

§ €2.1m other, including charges relating to the restructuring of the Group.

· The net retirement benefit obligation has decreased from €106.1m at 31 December 2014 to €86.1m at 31 December 2015 with the decrease driven primarily by an increase in the discount rate applicable to the various schemes and by a deficit repair contribution of €8.1m in 2015.

· The Directors are not proposing a dividend for 2015.

1 Excludes the results of APN - sold in H1 2015 and the Education businesses - sold in June 2014.

2 Pre-exceptionals.

OPERATIONAL HIGHLIGHTS

Publishing performance

· The Irish Independent continues to dominate the quality daily market with an ABC3 of 108,460, maintaining its No.1 position in the daily quality market. It sells more copies per day than The Irish Times and Irish Examiner combined and has over 50% of the daily quality market in the Republic of Ireland. The outperformance is driven by improvements in the offer with a widened Farming offer in the Irish Independent Tuesday edition and 1916 supplements.

· The Sunday Independent, which recorded an ABC3 of 211,856, increased its market share (now at 65.4% of the Sunday quality market) and remains by far the biggest selling quality Sunday newspaper, while also providing the largest regular audience on the island of Ireland across any advertising platform. Improvements and investment into the paper have driven its performance and it has become stand-out in its value for money rating.

· The Sunday World increased its share of the Sunday tabloid market to over 47% with an ABC3 of 175,060. The paper's redesign with pull-out sports supplement and extended magazine have cemented its position as Ireland's most popular Sunday tabloid.

· In Northern Ireland, the Belfast Telegraph which recorded an ABC3 of 42,808, continues to hold a strong No.1 position within the local daily newspaper market place, while the Sunday Life recorded an ABC3 of 40,057, performing ahead of local competitors.

· The strong revenue performance of Newspread, the Group's wholesale distribution business, continued in H2 with its appointment as the wholesaler of The Irish Times.

· The Group announced the closure of its printing operation in Belfast reflecting the industry wide trend of reducing print volumes as consumption of news via digital channels increases, together with the ending of a key contract with a UK publisher.

Digital performance

· independent.ie strengthened its position as Ireland's No.1 online news publisher across desktop and mobile (comScore, Media Metrix Newspaper category report), having delivered 978m page impressions in 2015. sundayworld.com has also performed strongly in growing its audience and engagement.

· Monthly usage as defined by number of active users/month of the independent.ie App has grown by 29.1% from January to December.

· New developments have included the launch of independentarchives.com to enable the sale of images from an archive dating back to 1914, and Fit Magazine, a portal for mass participation sporting events.

· belfasttelegraph.co.uk, Northern Ireland's leading commercial news website, further strengthened its position in the market by increasing its audience by 28.1%, while the Group's classifieds sites, including nijobfinder.co.uk and propertynews.com maintained market leading positions.

· The wind down of GrabOne for commercial reasons was announced on 9 November 2015 and the business ceased trading at year end.

Outlook

In 2016, INM anticipates a full year performance in line with expectations.

 - Ends -

3ABC July to Dec 2015.

For further information, contact:

INDEPENDENT NEWS & MEDIA PLC

GROUP INCOME STATEMENT

* Note 5

GROUP STATEMENT OF COMPREHENSIVE INCOME

GROUP BALANCE SHEET

GROUP STATEMENT OF CHANGES IN EQUITY (2015 Unaudited; 2014 Audited)

* 2015: A net €nil movement relates to a movement on available-for-sale financial assets reserve of €0.7m and the Group's share of the movement on APN's fair value reserve of (€0.7m). (2014: A negative movement of €0.3m relates to cash flow hedging reserve (€0.4m), available-for-sale financial assets reserve (€0.5m) and the Group's share of the movement on APN's fair value reserve of €0.6m).

GROUP CASH FLOW STATEMENT

* Retirement benefit obligations cash outflow for defined benefit pension schemes of €8.1m offset by a Group Income Statement charge (before exceptional items) for defined benefit pension schemes of €3.0m (2014: Retirement benefits obligation cash outflow for defined benefit pension schemes of €8.3m offset by a Group Income Statement charge (before exceptional items) for defined benefit pension schemes of €2.8m).

** Repayment of borrowings is comprised of release of escrow cash €10.0m and €115.5m repayment of debt, primarily from proceeds of disposal of APN shareholding.

NOTES TO THE FINANCIAL INFORMATION 

1. Basis of Preparation of Financial Information under IFRS

Reporting Entity and Basis of Accounting

Independent News & Media PLC ("the Company") is a company domiciled in Ireland. These condensed preliminary Group financial statements as at and for the twelve months ended 31 December 2015 comprise the financial statements of the Company and its subsidiaries (together referred to as "the Group") and the Group's interest in associates and joint ventures.

This financial information has been prepared on the going concern basis, which assumes that the Group will continue to be able to meet its liabilities as they fall due during the 12 months from the date of approval of the 2015 Annual Report, the time period that the Directors have considered in evaluating the appropriateness of the going concern basis.

Financial Information

The financial information in this announcement does not constitute the statutory financial statements of the Company and the Group, a copy of which is required to be annexed to the Company's annual return to the Companies Registration Office in Ireland. A copy of the statutory financial statements in respect of the year ended 31 December 2015 will be annexed to the Company's annual return for 2015. The annual report and financial statements will be approved by the Board of Directors by 1 May 2016. Accordingly, this financial information is unaudited. A copy of the statutory financial statements required to be annexed to the Company's annual return in respect of the year ended 31 December 2014 has been annexed to the Company's annual return for 2014 to the Companies Registration Office. The audit opinion on these financial statements was unqualified.

The 2015 statutory financial statements of the Company will be available on the Company's website inmplc.com as of 1 May 2016. Consistent with prior years, the full financial statements for the year ended 31 December 2015 and the audit report thereon will be completed and available to all shareholders at least 20 working days before the AGM.

General Information

The Group is required to present its annual consolidated financial statements for the year ended 31 December 2015 in accordance with EU adopted International Financial Reporting Standards ("IFRS") and with those parts of the Companies Acts 2014, applicable to companies reporting under IFRS. This financial information comprises the Group Balance Sheets as at 31 December 2015 and 31 December 2014 and related Group Income Statements, Cash Flow Statements, Statements of Comprehensive Income, Statements of Changes in Equity and selected notes for the years then ended of Independent News & Media PLC. This financial information for the years ended 31 December 2015 and 31 December 2014 has been prepared in accordance with the Listing Rules of the Irish Stock Exchange.

The consolidated financial statements are prepared on the historical cost basis except for the measurement of certain financial instruments at fair value and the measurement of the net defined benefit pension liability at the fair value of the plan assets less the present value of the defined benefit obligation. Except as described below, the accounting policies and methods of computation and presentation adopted in the preparation of this financial information are consistent with those applied in the Annual Report for the year ended 31 December 2014 and are described in those financial statements on pages 65 to 79.

Except for the changes below, the Group has consistently applied the accounting policies set out below to all years presented in these consolidated financial statements.

The following new and amended standards and interpretations are effective for the Group for the first time for the financial year beginning 1 January 2015. 

· Annual Improvements to IFRSs 2011-2013 Cycle

· Defined Benefit Plans: Employee Contributions (Amendments to IAS 19)

The aforementioned did not have a material impact on the Group.

NOTES TO THE FINANCIAL INFORMATION (continued)

1. Basis of Preparation of Financial Information under IFRS (continued)

Comparative Information

The comparative information to the financial statements has been restated as follows:

· INM's entire shareholding in APN was disposed of in 2015. Consequently, as APN is a separate major line of business, it is treated as a discontinued operation in 2015 and the Income Statement and OCI comparatives for 2014 have been reclassified accordingly (note 17).

Risks and Uncertainties

The principal risks and uncertainties facing the Group in the short to medium term, together with the principal mitigation measures, are outlined below.

(i) Print Circulation Decline

The continued industry decline in newspaper circulation, including INM titles has a material impact on the profitability of the business. Also, due to INM's vertical integration, such a decline also impacts print and distribution operations.

Circulation volumes and revenue are closely monitored against budgets and industry trends by senior management. The Group operates a continuous programme of product development and refinement, and periodic readership reviews that are carried out by third party specialists which produce a series of actions or identify potential initiatives. Marketing budgets are then aligned to target these initiatives. Daily internal reviews and weekly circulation analyses are completed to track progress and success of these initiatives. Also, the Group continues to adapt its Digital Strategy to complement its print products and has successfully transitioned its trusted brands to online platforms, such as independent.ie and belfasttelegraph.co.uk.

(ii) Print Advertising Decline

A significant proportion of the Group's revenue is derived from advertising which has historically been cyclical, with less being spent on advertising in times of economic slowdown. To the extent that economic conditions in the Group's markets (Republic of Ireland/Northern Ireland) negatively impact advertising volumes and/or yields, the Group's business, operating results, financial condition or prospects may be adversely affected.

INM has undertaken several initiatives to drive more effective relationship management between advertising sales representatives, agents and key customers, including targeted product and sales training, introduction of campaign sales teams focused on delivering value to advertising customers and investment in a cross platform advertising booking and CRM system. Advertising performance is monitored closely by senior management through continuous updates from the Advertising Director and performance reviews during the weekly management meeting.

(iii) Cost Reduction and Containment

Inability to achieve cost reduction targets to offset industry circulation revenue decline would negatively impact profits.

Cost containment across all areas of the business to protect and grow margin remains a key priority of the Group and is monitored closely by senior management and finance. Successful cost savings initiatives were implemented and targets achieved in 2015 with further reviews to the cost base being planned for completion in 2016.

NOTES TO THE FINANCIAL INFORMATION (continued)

1. Basis of Preparation of Financial Information under IFRS (continued)

Risks and Uncertainties (continued)

(iv) Cyber and Information Security

Maintaining adequate IT systems and infrastructure to support growth and development may be affected by:

• accidental exposure or deliberate theft of sensitive information;

• loss of service or system availability;

• significant system changes or upgrades; and

• cybercrime.

Dedicated IT personnel with the appropriate technical expertise are in place in the INM Group to oversee IT security. IT standards and policies are subject to internal audit and external audit reviews annually to ensure they are in line with appropriate best practices. Cyber security reviews, including penetration testing and vulnerability assessments are performed throughout the year by specialist third party technical experts to provide independent assurance.

(v) Talent Management

A failure to attract, retain or develop high quality staff and management throughout the Group could impact on the attainment of strategic objectives.

The Group maintains a constant focus on this area with structured succession planning, management development and remuneration programmes in place. In 2015 several talent initiatives were implemented, including a graduate recruitment programme, increased focus on and budget for targeted staff training, and the introduction of an INM Business Manager Programme in association with National College of Ireland to further develop management capability across the Group. These programmes are reviewed regularly by Group Human Resources, the Group Chief Executive Officer and the Board.

(vi) IT Disaster Recovery and Business Continuity

A significant loss of production capability during a disaster scenario could severely impact revenue and lead to increased costs.

Business continuity plans ("BCP") and IT disaster recovery plans ("DRP") are in place and tested throughout the year. These plans are subject to review by internal and external auditors on an annual basis. Also, individual plans are in place for individual businesses and locations where appropriate. These individual plans and testing feed into the overall Group plan.

(vii) Acquisitions and Change Management

A failure to identify, execute or properly integrate acquisitions, change management programmes or other growth opportunities could impact on profit targets and impede the strategic development of the Group.

Dedicated resources are focused on continuous and active review of potential acquisitions. They are supported by an M&A Board sub-committee made up of Board members, Executive management and external specialists. All potential acquisitions are subject to an assessment of their ability to generate a return on capital employed well in excess of the cost of capital, and for their strategic fit within the Group.

The Group conducts a stringent internal evaluation process and external due diligence prior to completing any acquisition. Projects and change management programmes are resourced by dedicated and appropriately qualified internal personnel, supported by external expertise.

NOTES TO THE FINANCIAL INFORMATION (continued)

1. Basis of Preparation of Financial Information under IFRS (continued)

Risks and Uncertainties (continued)

(viii) Digital Revenue Growth

A failure to achieve anticipated growth in digital and e-commerce revenues, and failure to adequately monitor the return on investment of the current and future digital investment could significantly impact revenue and profit targets and impede the strategic development of the Group.

INM senior management closely monitors performance of digital and e-commerce through a series of digital specific key performance indicators, such as revenue per thousand impressions, weekly online advertising spend reporting, number of unique visitors, page impressions and average time on site. In addition, weekly and monthly cost reporting is submitted to Group Finance to support monitoring of investment performance. A Digital Board sub-committee is established and operational, which monitors progress of the digital strategy. Also, a new e-commerce manager and team is in place from 2015 and developing a pipeline for e-commerce initiatives.

(ix) Litigation

Libel action or other types of litigation taken against the INM Group or its titles could result in financial loss or reputational damage.

Libel action claims are actively managed by Editorial senior management in conjunction with legal support. Rigorous investigations and disciplinary processes are carried out following any proven errors (e.g. factual errors, photo errors). In addition, several actions were taken and initiatives implemented in 2015 to mitigate the risk of libel actions occurring.

These include for example:

• A detailed Editorial Code of Practice was published and issued to all staff with specific reference to libel and factual accuracy;

• Introduction of libel training and exam requirements for all graduates. As well as training rolled-out to all existing journalists and contributors; and

• Introduction of in-house legal support with service level targets specifically related to libel actions.

(x) Data Protection Legislation

A breach in data protection legislation, which is evolving in 2016-2018, could lead to reputational and operational damage to INM.

INM's data protection readiness and processes were subjected to detailed review in 2014 and 2015 by third party subject matter specialists. Several actions and initiatives were undertaken in 2015 following on from this review, including the designation of a Group Data Protection Officer, designation and training of a data protection champion's network consisting of individuals from each function and business unit, and the development and implementation of an updated suite of INM Group data protection policies and procedures.

2. Financial Restructuring

As part of the disposal of South African operations in August 2013, the Group gave standard warranties with a total potential exposure of R200m (€14.3m as at 31 December 2014). €10.0m of the proceeds were retained in an Escrow account (with this amount classified as restricted cash in the Group Balance Sheet) pending any potential warranty claims for a period of 12 to 24 months post completion (24 months if certain pre-existing industry wide competition commission enquiries were still open after 12 months). In early 2015, the Group signed a Settlement Agreement with the purchasers of the South African business to pay the euro equivalent of R85m (€6.6m) in full and final settlement of all warranties and industry wide competition commission enquiries. The residual balance of €3.4m in the Escrow account was paid to the banking syndicate with a consequential reduction of €10.0m in Escrow debt in line with the Escrow Agreement.

NOTES TO THE FINANCIAL INFORMATION (continued)

2. Financial Restructuring (continued)

On 19 March 2015, the Group announced that it had entered into an agreement with Credit Suisse (Australia) Limited ("Credit Suisse") in respect of the sale, by way of an underwritten block trade, of 191,541,073 ordinary shares in APN, being the entire holding of the Group in APN (representing 18.61% of the issued share capital of APN).

Under the terms of the agreement giving effect to the sale (the "Sale Agreement"), Credit Suisse agreed to acquire, or procure the acquisition by third party purchasers of, all of the Group shareholding in APN at a fixed price per APN ordinary share ("APN Share") of AUD$0.88. All of the net proceeds of the transaction were applied to repay INM Group indebtedness (being €125.5m total borrowings (Net Debt: €89.3m) as at 31 December 2014) in full.

3. Revenue

An analysis of the Group's revenue from continuing operations for the year is as follows:

4. Segmental Reporting

Segment information is presented on the same basis as that used for internal reporting purposes. Operating segments are reported in a manner consistent with the internal reporting provided to the Chief Operating Decision Maker ("CODM"). The CODM has been identified as the Board of Directors. The key performance measure that is reviewed for these segments is operating profit/(loss) before exceptional items. Exceptional items are reviewed at a level higher than these operating segments and appear as a reconciling item from the key performance measure reviewed by the CODM to the IFRS result. Finance income and expense, share of results of associates and joint ventures and taxation are reviewed and considered by the CODM at a Group level only.

INM's entire shareholding in APN was disposed of in 2015. Consequently, as APN is a major line of business, it is treated as a discontinued operation in 2015 and the 2014 comparatives have been reclassified accordingly. The Group disposed of its Education Businesses in June 2014, and accordingly the Island of Ireland Non-Publishing segment is included under discontinued operations.

NOTES TO THE FINANCIAL INFORMATION (continued)

4. Segmental Reporting (continued)

NOTES TO THE FINANCIAL INFORMATION (continued)

5. Exceptional Items

Exceptional items are those items of income and expense that the Group considers are material and/or of such a nature that their separate disclosure is relevant to a better understanding of the Group's financial performance.

* Of the exceptional gain of €40.7m in 2015, €0.8m is shown as an exceptional expenditure outflow in the Group Cash Flow Statement. The €0.8m primarily relates to miscellaneous restructuring costs partially offset by a termination payment received from the cessation of a printing contract. Of the exceptional charge of €29.7m in 2014, €4.3m is shown as an exceptional expenditure outflow in the Group Cash Flow Statement. The €4.3m primarily relates to miscellaneous restructuring costs (primarily redundancy costs of €3.6m) in the Island of Ireland.

(i) 2015

Primarily relates to the following:

(a) A charge of €0.9m related to miscellaneous restructuring costs, primarily redundancy costs in the Island of Ireland; and

(b) A retirement benefits accounting adjustment of €0.3m due to the transfer of certain members from the defined benefit plan to the Company's defined contribution plan (note 12). This comprises a €0.5m exceptional settlement gain on the transfers out by members, somewhat offset by an exceptional charge of €0.2m on the booking of a liability for payments to the defined contribution pension scheme in respect of those members.

2014

Primarily relates to the following:

(a) A charge of €9.3m related to miscellaneous restructuring costs, primarily redundancy costs in the Island of

Ireland;

(b) A retirement benefits accounting adjustment of €3.5m due to the transfer of certain members from the defined benefit pension plan to the Company's defined contribution pension plan (note 12). This comprises a €9.3m exceptional gain on the transfers out by members, somewhat offset by an exceptional charge of €5.8m on the booking of a liability for payments to the defined contribution pension scheme in respect of those members; and

(c) A net charge of €0.6m relating to the liquidation of a Group entity, Independent Aviation Services Limited. This includes a €2.1m charge recycled from foreign currency translation reserves to the Group Income Statement as an exceptional charge as the company involved was a USD denominated entity and a €1.5m gain on the early settlement of an onerous contract booked in this entity.

(ii) 2015

Relates to a charge of €0.9m due to the reclassification to the Group Income Statement of a negative fair value reserve on an available-for-sale financial asset. This comprises a reclassification relating to a €0.7m opening balance in fair value reserve and a €0.2m movement during the year.

NOTES TO THE FINANCIAL INFORMATION (continued)

5. Exceptional Items (continued)

2014

Relates to a €1.0m gain on the write-off of Anti-dilution bank debt, which did not fall due in accordance with the terms of the 2013 Restructuring. In connection with the 2013 debt restructuring, €1.0m remained outstanding subject to the satisfaction of certain criteria by the Group. These criteria were met in 2014, resulting in the write-off of €1.0m in debt.

(iii) 2015

The share of associates' and joint ventures' exceptional items (net of tax and non-controlling interests) charge of €0.1m relates to redundancies in Independent Star Limited.

2014

The share of associates' and joint ventures' exceptional items (net of tax and non-controlling interests) credit of €0.2m can be broken down as follows:

(a) Independent Star Limited - redundancies of €0.4m; and

(b) A net credit of €0.6m.

(iv) 2015

Primarily relates to the following:

(a) A charge of €1.7m relating to miscellaneous impairments and write-offs of property, plant and equipment and intangible assets in the Republic of Ireland;

(b) A charge of €1.7m relating to the write-down of property, plant and equipment in the Belfast operations; and

(c) A charge of €1.2m relating to the impairment of the Belfast Telegraph masthead.

(v) 2015

Relates to a net charge of €0.5m classified as exceptional tax. The exceptional tax charge in 2015 primarily relates to a tax charge of €0.4m arising on the release of a deferred tax asset on foreign losses and a tax charge of €0.1m arising on exceptional expenses in the Republic of Ireland.

2014

Relates primarily to a tax credit of €1.1m arising on exceptional restructuring charges in the Republic of Ireland of €9.3m and a tax charge of €0.4m arising on an exceptional pension restructuring accounting adjustment of €3.5m in the Republic of Ireland.

(vi) 2014

Relates to the loss on disposal of the Educational Businesses (see note 17).

(vii) 2014

Relates to the non-cash exceptional accounting adjustment relating to the deemed partial disposal loss arising from INM's non-participation in APN's equity issue in 2014 (note 10).

(viii) 2015

Relates to the gain on disposal of the Group's entire shareholding in APN (see note 17).

(ix) 2014

Relates to APN €8.0m exceptional charge, which mainly relates to an impairment of intangible assets (€6.3m).

6. Fair Value

The fair values of quoted available-for-sale financial assets and derivative financial instruments are measured using market values. Unquoted available-for-sale financial assets and derivatives are measured using valuation techniques. The carrying amount of non interest bearing financial assets and financial liabilities and cash and cash equivalents approximates their fair values. The Group has not disclosed the fair value of certain financial instruments such as other payables, short-term receivables and short term payables because their carrying amounts are a reasonable approximation of fair value.

Of the available-for-sale financial assets of €2.0m (2014: €2.3m), €0.9m (2014: €1.2m) are measured at Level 1 of the fair value hierarchy and €1.1m (2014: €1.1m) are measured at Level 3 of the fair value hierarchy.

The derivative financial instruments - cash flow hedges of €nil (2014: €nil) are measured at Level 2 of the fair value hierarchy.

NOTES TO THE FINANCIAL INFORMATION (continued)

7. Net Finance Costs

During 2015, an exceptional finance charge of €0.9m was booked relating to the reclassification to the Group Income Statement of a negative fair value reserve on an available-for-sale financial asset. This was due to a sustained period of negative movements in the market value of the financial asset.

During 2014, the Group credited to exceptional finance income in the Group Income Statement the €1.0m of Anti-dilution debt as this amount did not fall due in accordance with the terms of the 2013 debt restructuring. In connection with the 2013 debt restructuring, €1.0m remained outstanding subject to the satisfaction of certain criteria by the Group. These criteria were met in 2014, resulting in the write-off of €1.0m in debt.

NOTES TO THE FINANCIAL INFORMATION (continued)

8. Taxation

(a) Amounts recognised in profit or loss

(b) Amounts recognised in OCI

(c) Reconciliation of effective tax rate

The total tax charge for the year is different from the standard rate of Corporation Tax in Ireland of 12.5% (2014: 12.5%). The differences are explained below:

For further information on movement in deferred tax assets in 2015, see note 16.

Within the total tax charge of €5.7m (2014: charge of €2.5m), a net charge of €0.5m (2014: net credit of €0.7m) is classified as exceptional tax. The exceptional tax charge in 2015 primarily relates to a tax charge of €0.4m arising on the release of a deferred tax asset on foreign losses and a tax charge of €0.1m arising on exceptional expenses in the Republic of Ireland. The exceptional tax credit in 2014 primarily relates to a tax credit of €1.1m arising on exceptional restructuring charges in the Republic of Ireland of €9.3m and a tax charge of €0.4m arising on an exceptional pension restructuring accounting adjustment of €3.5m in the Republic of Ireland.

NOTES TO THE FINANCIAL INFORMATION (continued)

9. Earnings/(Loss) Per Share

Basic earnings per share is calculated by dividing the profit attributable to ordinary shareholders by the weighted average number of ordinary shares outstanding during the year.

Diluted earnings per share is calculated by adjusting the weighted average number of ordinary shares outstanding to assume conversion of all dilutive potential ordinary shares. Share options are the Company's only category of dilutive potential ordinary shares.

Employee share options are contingently issuable shares because of the requirement to satisfy specific performance and service conditions. These contingently issuable shares are included in the computation of diluted earnings per ordinary share to the extent that the conditions were satisfied as at the end of the reporting period.

At 31 December 2015, 581,220 options (2014: 668,201) were excluded from the diluted weighted average number of ordinary shares calculation because their effect is anti-dilutive.

Basic and diluted earnings per share before exceptional items are presented in order to give a better understanding of the Group's underlying financial performance.

NOTES TO THE FINANCIAL INFORMATION (continued)

10. Investments in Associates and Joint Ventures

* Relates to the Group's share of the premium paid by APN on its acquisition of non-controlling interests.

** Relates to the deemed partial disposal of APN. A further €1.8m was reclassified from foreign currency translation reserves giving a loss on deemed disposal of associates in the Group Income Statement of €16.7m.

*** The closing balance in 2014 primarily related to the Group's 18.61% investment in APN.

(i) Carrying Amount

The reporting year end dates of the Group's associates and joint ventures are the same as the Group's reporting year end date.

**** Of the €0.6m in 2015, €nil relates to APN and €0.6m to Click & Go. Of the €69.1m in 2014, €68.7m relates to APN and €0.4m to Click & Go.

NOTES TO THE FINANCIAL INFORMATION (continued)

10. Investments in Associates and Joint Ventures (continued)

(ii) Associates

The summarised financial information in the table below relates solely to APN. The closing balance for year end 31 December 2015 for associates of €0.6m relates to Click & Go.

In 2014, the Group held an 18.61% shareholding in APN, an ASX listed publishing and radio network operating entity that operates mainly in Australia and New Zealand. The investment was accounted for using the equity method.

Even though the Group held less than 20% of the voting rights of APN, it was judged that the Group had significant influence over APN, as Paul Connolly was a director of both INM and APN, and Vincent Crowley (former Group Chief Executive Officer of INM) was a director of APN.

The market value of the Group's interests in associates, which were stock exchange quoted as at 31 December 2014, was €107.9m, all of which related to APN.

NOTES TO THE FINANCIAL INFORMATION (continued)

10. Investments in Associates and Joint Ventures (continued)

(iii) Joint Ventures

Summarised financial information in respect of the Group's share of its joint ventures is set out below:

11. Share Capital and Share Premium