18th May 2006 07:02
Euromoney Institutional InvestorPLC18 May 2006 Euromoney Institutional Investor PLCInterim Report 2006 Euromoney Institutional Investor PLC Chairman's statement RECORD OPERATING PROFITS Highlights 2006 2005^ changeRevenue £103.1 m £87.5 m +18%Operating profit+ £17.6 m £15.0 m +17%Profit before tax £13.5 m £12.9 m +5%Diluted earnings a share 10.8 p 10.5 p +3%Dividend 5.4 p 5.2 p +4% ^ Restated on an IFRS basis • Operating profit+ up 17% to record £17.6m • Performance driven by robust organic growth across all business divisions • Revenue exceeds £100m for first time • Further evidence of Capital Appreciation Plan benefits • Impact of IFRS and CAP expense as expected HIGHLIGHTS Euromoney Institutional Investor PLC, the international publishing, events andelectronic information group, reports an increase in operating profit+ to £17.6million for the six months to March 31 2006, a record, against £15.0 million forthe previous year. Diluted earnings a share were 10.8p, against 10.5p in 2005,and the board has approved an interim dividend of 5.4p, against 5.2p, to be paidto shareholders on June 23 2006. Revenue in the first half exceeded £100m for the first time and strong organicgrowth helped drive record first half results. Encouragingly, all divisionsincreased operating profits+, and subscription revenues from the group's printand electronic products increased at their highest rate for some time. The adoption this year of International Financial Reporting Standards (IFRS),together with a first time non-cash expense of £2.3 million for the group'sCapital Appreciation Plan (CAP), restricted the increase in profit before tax to5% to £13.5 million. These items were in line with management expectations, andconsistent with the comments and guidance that the company has provided toshareholders. Commenting on the results, Padraic Fallon, Chairman, said: "Although the first half is usually less significant than the second for theyear's results, we're pleased with a record performance in both revenue andoperating profit+. This reflects further progress towards the target of growingprofit* to £50m by 2008, against £21m reported in 2003. We hope to drivecontinued growth through new and existing products; diversify our revenue basewhile improving the operating margin+; and invest in acquisitions to strengthenthe Company's market position." TRADING BACKGROUND First half revenue increased by 18% to £103m against a background of strongfinancial markets, positive economic indicators and further periods of recordprofitability for global financial institutions. All of the group's divisionsincreased revenues and operating profits+. Trading has followed a similarpattern to 2005, with revenue growth coming predominantly from the eventbusinesses, and only limited growth in advertising. The most encouraging aspectis the 11% increase in subscription revenues from print and electronic products,the highest growth rate for several years. Consistent with management's strategy, most of the 17% growth in operatingprofit+ has been generated organically. On the events side, the growth has comefrom both volume and margin improvements with a number of successful new eventslaunched, particularly in the hedge fund, real estate and legal sectors.Publishing profits+ also improved significantly due to a combination of theprofit flow through on additional advertising and the reward from pastinvestment in subscription marketing. The operating margin+ was unchanged at 17% reflecting the increased investmentin new products, particularly in the conference and training businesses. BUSINESS REVIEW Profits+ from Financial Publishing increased by 36% to £4.5 million. After aslow first quarter, advertising revenues picked up in the second with titlessuch as Euromoney and Euroweek performing well. While advertising marketsremain tough despite the favourable trading conditions, the outlook forsubscription products has improved and the group continues to invest heavily insubscription marketing. As a result, total revenues from Financial Publishingincreased by 9%. Business Publishing achieved similar increases in advertising and subscriptionrevenues, with legal and energy the strongest sectors. Profits+ improved by 38%to £2 million, again benefiting from the operational leverage on the additionalrevenues. Profits+ from Conferences and Seminars increased by 33% to £10.2 million withimprovements across all the event businesses. Euromoney Conferences, EuromoneySeminars and Institutional Investor Conferences all achieved significant revenuegrowth through the launch of new events, while the strategy of investing inbuilding existing events continued to help drive margin improvements. Membernumbers and renewal rates hit record levels at Institutional InvestorMemberships, helped by the recent launch of new institutes for hedge fundexecutives and European institutional marketing directors. The Training businesses achieved strong revenue growth (+22%), largely as aresult of an increase in the number of courses offered. However, new coursesare invariably less profitable and this, combined with an increase in the costbase at the beginning of the year following the significant revenue growth in2005, reduced the operating margin+, and first half operating profits+ increasedby 6% to £2.8 million. Profits+ from Databases and Information Services improved by 26% to £2.2million, driven by the continued strong performance of ISI, the emerging marketsinformation provider. The number of ISI customers, information sources and dataproviders all increased during the period and subscription revenues continue togrow at a rate of just under 20%. CEIC, a joint venture acquired in March 2005which provides valuable time series economic data for the Asia region, has beenintegrated with ISI and CEIC revenue and profits+ continue to grow at a fasterrate than the forecasts made at the time of acquisition. CASH FLOW AND NET DEBT The level of debt traditionally increases in the first half, following paymentof the final dividend (£9.8 million) and year end profit shares (£6.9 million)in January. In addition, during the first half the company invested £3 millionin the acquisition of a 47.5% interest in Asia Business Forum, and made furtherpayments of £9.3 million under earn-out agreements for the acquisitions of IMNand ISI. Positive operating cash flows helped significantly to offset theimpact of these payments and net debt at March 31 2006 was £75.5 million, anincrease of only £9.1 million since year end. MANAGEMENT INCENTIVE These results reflect further evidence of the benefits of the CapitalAppreciation Plan, the incentive plan introduced to drive profit* to a target of£50m by 2008 against a base of £21m in 2003. Approximately 150 managersparticipate in this highly geared equity incentive scheme which directly rewardseach participant for the profit+ growth achieved by their business. As disclosed previously, the non-cash cost of the CAP is being expensed over thelife of the plan. This expense was first recorded in the second half of 2005.The charge in the first half of 2006 of £2.3m therefore affects reported profitbefore tax at the interim stage for the first time. IFRS This is the first time the Company has reported its results under IFRS. Asdisclosed in its IFRS announcement in March, the adoption of IFRS represents anaccounting change only, and does not affect the underlying trading or cash flowsof the group. The most significant impact of IFRS on these results is therequirement to charge imputed interest on future acquisition payments underoption agreements (IAS 39). This additional finance cost reduced first halfprofit before tax by £0.5m, with no equivalent cost in 2005. OUTLOOK The positive trends of the first half have continued into the third quarter andforward bookings for advertising, sponsorship and delegates are all ahead of thesame time last year. In the second half, events with operating profits ofapproximately £2.5m have been moved to the first quarter of financial year 2007.This reverses, a year earlier than expected, timing differences first recordedin financial year 2005. The company believes that these trading results underpin its strategy offocusing on organic growth, improving the operating margin, and selectiveacquisitions. Padraic Fallon Chairman May 17 2006 END NOTE TO EDITORS About Euromoney Institutional Investor PLC Euromoney Institutional Investor PLC is listed on the London Stock Exchange anda member of the FTSE-250 share index. It is a leading internationalbusiness-to-business media group focused primarily on the international financesector. It publishes more than 100 magazines, newsletters and journals,including the leading financial market titles Euromoney and InstitutionalInvestor. It also runs an extensive portfolio of conferences, seminars andtraining courses and is a leading provider of electronic information and datacovering international finance and emerging markets. Its main offices are inLondon, New York and Hong Kong and nearly half its revenues and profits aremanaged from the United States. For further information please contact: Padraic Fallon Chairman 020 7779 8556 [email protected] Ensor Managing Director 020 7779 8845 [email protected] Jones Finance Director 020 7779 8556 [email protected] LuxtalAlex Money or Tom Allison 020 7936 9790 [email protected] Or visit our website at www.euromoneyplc.com---------------------------------------------- + Before goodwill impairment, share option expense and joint venture profit asset out in the group income statement. * Operating profit less net finance costs (excluding CAP expense and imputedinterest on acquisition option commitments). Euromoney Institutional Investor PLC Group Income Statementfor the six months ended March 31 2006 Unaudited Unaudited Audited six six year months months ended ended ended September March 31 March 31 30 2006 2005 2005 (restated (restated see note 1) see note 1) Note £000's £000's £000's Continuing operations 2 104,973 88,235 195,549Less: share of revenue of joint (1,848) (717) (718)ventures ------------------------ --------- --------- --------Total revenue 103,125 87,518 194,831------------------------ --------- --------- --------Operating profit before goodwill 2 17,559 14,972 39,348impairment, share option expense andloss on disposalGoodwill impairment - (390) -Share option expense (2,542) (76) (1,380)Loss on disposal of business - - (315) --------- --------- --------Operating profit before associates 15,017 14,506 37,653and joint ventures ------------------------ --------- --------- --------Share of results in associates and 733 227 624joint ventures --------- --------- --------Operating profit 2 15,750 14,733 38,277Finance income 444 124 340------------------------ --------- --------- --------Imputed interest on acquisition (448) - -option commitmentsOther finance costs (2,263) (1,913) (4,183)------------------------ --------- --------- --------Finance costs (2,711) (1,913) (4,183) --------- --------- --------Net finance costs (2,267) (1,789) (3,843) --------- --------- --------Profit before tax 13,483 12,944 34,434Tax on profit 3 (3,257) (2,714) (2,417) --------- --------- --------Profit after tax 10,226 10,230 32,017 ========= ========= ======== Attributable to:Equity holders of the parent 9,620 9,244 30,181Equity minority interests 606 986 1,836 --------- --------- -------- 10,226 10,230 32,017 ========= ========= ========Basic earnings per share 6 10.83p 10.50p 34.19pDiluted earnings per share 6 10.81p 10.46p 34.10pDividend per share (including 5 5.40p 5.20p 16.20pproposed dividends) Euromoney Institutional Investor PLC Group Balance Sheet as at March 31 2006 Unaudited Unaudited Audited as at as at as at March 31 March 31 September 30 2006 2005 2005 (restated see (restated see note 1) note 1) £000's £000's £000'sNon-current assetsIntangible assetsGoodwill 68,536 59,015 66,029Licenses & software 486 247 479Property, plant and 12,697 6,764 10,747equipmentInvestments 10,511 4,419 7,080Deferred tax asset 7,391 3,252 7,507 --------- --------- -------- 99,621 73,697 91,842 --------- --------- --------Current assetsDebtors 51,158 37,020 54,927Deferred tax asset 3,639 1,258 2,313Cash at bank and in hand 18,083 14,792 25,071 --------- --------- -------- 72,880 53,070 82,311Current liabilitiesAccruals (18,100) (15,418) (23,225)Deferred income (46,678) (37,960) (37,491)Other creditors (72,341) (61,145) (76,074) --------- --------- -------- (137,119) (114,523) (136,790) --------- --------- --------Net current liabilities (64,239) (61,453) (54,479) --------- --------- --------Total assets less current 35,382 12,244 37,363liabilitiesNon-current liabilitiesAcquisition option (20,537) - -commitmentsDeferred consideration - (5,838) (8,689)Five year committed facility (67,927) (58,530) (62,518)Deferred tax liabilities (1,802) (531) (981)Provisions (1,552) (571) (1,125) --------- --------- -------- (91,818) (65,470) (73,313) --------- --------- --------Net liabilities (56,436) (53,226) (35,950) ========= ========= ========Shareholders' equityCalled up share capital 223 221 222Share premium account 38,028 35,298 37,351Capital redemption reserve 8 8 8Own shares (74) (74) (74)Liability for share based 3,592 175 1,479paymentsRetained earnings (98,756) (89,530) (76,545) --------- --------- --------Equity shareholders' deficit (56,979) (53,902) (37,559)Equity minority interests 543 676 1,609 --------- --------- --------Total equity (56,436) (53,226) (35,950) ========= ========= ======== Euromoney Institutional Investor PLC Group Cash Flow Statement for the six months ended March 31 2006 Unaudited Unaudited Audited six six months year months ended ended ended March 31 March 31 September 30 2006 2005 2005 (restated see (restated see note 1) note 1) £000's £000's £000'sCash flow from operating activitiesOperating profit 15,750 14,733 38,277Share of operating profit in (733) (227) (624)associates and joint venturesLoss on disposal of business - - 315Goodwill impairment - 390 -Share option expense 2,542 76 1,380Depreciation of property, plant and 1,336 872 1,745equipmentUtilisation of property rental (170) - (148)provision(Gain)/loss on disposal of property, - (3) 87plant and equipment --------- --------- ---------Operating cash flows before movements 18,725 15,841 41,032in working capital(Increase)/decrease in receivables (133) 445 (4,395)Increase/(decrease) in payables 6,387 (2,338) 6,181 --------- --------- ---------Cash generated by operations 24,979 13,948 42,818Income taxes paid (3,629) (3,639) (6,797)Interest received 442 126 345Interest paid (1,698) (1,689) (3,756) --------- --------- ---------Net cash from operating activities 20,094 8,746 32,610 --------- --------- ---------Dividends received from associate 354 - -Investing activitiesDividends paid to minorities (1,724) (943) (943)Purchases of property, plant and (3,253) (526) (5,387)equipmentProceeds on disposal of property, - 23 20plant and equipmentAcquisition of subsidiary (9,263) (12,249) (12,231)Acquisition of joint venture (3,048) (3,769) (6,097)Disposal of subsidiary - - 500 --------- --------- ---------Net cash used in investing (17,288) (17,464) (24,138)activities --------- --------- ---------Financing activitiesDividends paid (9,760) (8,792) (13,376)Issue of new share capital 677 906 2,960Increase in borrowings 2,727 13,403 42,932Repayment of borrowings - (6,491) (39,540)Loan repaid to DMGT group company (21,472) (12,846) (15,384)Loan received from DMGT group 17,393 14,620 15,622company --------- --------- ---------Net cash used in financing (10,435) 800 (6,786)activities --------- --------- ---------Net (decrease)/increase in cash and (7,275) (7,918) 1,686cash equivalentsCash and cash equivalents at 24,932 23,099 23,099beginning of periodEffect of foreign exchange rate 241 (539) 147movements --------- --------- ---------Cash and cash equivalents at end of 17,898 14,642 24,932period --------- --------- --------- Euromoney Institutional Investor PLCGroup Statement of Changes in Equityfor the six months ended March 31 2006 Unaudited Unaudited Audited six six year months months ended ended ended March 31 March 31 September 30 2006 2005 2005 Note £000's £000's £000'sProfit for the period 9,620 9,244 30,181Dividends paid 5 (9,760) (8,792) (13,376) --------- --------- -------- (140) 452 16,805Proceeds from issue of shares for 677 906 2,960cashCredit to equity for share based 2,112 76 1,380paymentsIAS 39 movements 1,718 - -Exchange differences on translation of (1,860) 1,804 (1,564)foreign operations --------- --------- --------Net decrease in equity shareholders' 2,507 3,238 19,581deficitImpact of adoption of IAS 39 on 7 (21,927) - -October 1 2005Opening equity shareholders' deficit as (37,559) (57,140) (57,140)restated/previously stated --------- --------- --------Closing equity shareholders' deficit (56,979) (53,902) (37,559) --------- --------- -------- Euromoney Institutional Investor PLCNotes to the Unaudited Interim Report 1. Basis of preparation This interim report was approved by the board of directors on May 17 2006. Thegroup has previously prepared its financial statements under UK GenerallyAccepted Accounting Principles ("UK GAAP"). From October 1 2005 the group isrequired to prepare its annual consolidated financial statements in accordancewith International Financial Reporting Standards ("IFRS") as adopted by theEuropean Union and implemented in the UK. This interim report has been preparedusing IFRS accounting policies consistent with those that the group expects touse in the preparation of its first annual report and financial statements underIFRS for the year ending September 30 2006. These accounting policies wereincluded in the group's "Adoption of International Financial Reporting Standards- Preliminary restatement of 2005 financial information" document which waspublished on March 22 2006, and is available on the group's website atwww.euromoneyplc.com/reports/IFRS_Restatement_2005.pdf. The reconciliations ofprofit and shareholders' equity from UK GAAP to IFRS required by IFRS 1 "Firsttime adoption of IFRS" are also included within this document. As permitted by IFRS 1 the group elected to defer implementation of IAS 32"Financial Instruments: Presentation and Disclosure" and IAS 39 "FinancialInstruments: Recognition and Measurement" until the year ending September 302006. The adjustments required for the adoption of IAS 32 and IAS 39 as atOctober 1 2005 are detailed in note 7 of this report. The financial information contained in this interim report does not constitutestatutory accounts as defined in section 240 of the Companies Act 1985 andshould be read in conjunction with the 2005 annual report and the IFRSrestatement document. The comparative financial information is based on theinterim results for the six months ended March 31 2005 as amended in the IFRSrestatement document. The figures for the year to September 30 2005 are an abridged statement from thegroup's accounts, which have been delivered to the Registrar of Companies, andamended by the IFRS restatement document. The auditors' report on thoseaccounts was unqualified and did not contain a statement under section 237(2) or237(3) of the Companies Act 1985. 2. Segmental analysis Unaudited six months ended March 31 United North Rest of Total Kingdom America World 2006 2005 2006 2005 2006 2005 2006 2005 £000's £000's £000's £000's £000's £000's £000's £000'sRevenueBydestination: Other 17,596 14,601 47,507 36,798 37,802 34,091 102,905 85,490continuingbusinessesSold/closed 68 451 5 332 147 1,245 220 2,028businesses -------- ------- -------- ------- ------- ------- -------- -------Group 17,664 15,052 47,512 37,130 37,949 35,336 103,125 87,518revenueJoint 59 28 152 135 1,637 554 1,848 717ventures -------- ------- -------- ------- ------- ------- -------- ------- 17,723 15,080 47,664 37,265 39,586 35,890 104,973 88,235 ======== ======= ======== ======= ======= ======= ======== ======= United North Rest of Total Kingdom America World 2006 2005 2006 2005 2006 2005 2006 2005 £000's £000's £000's £000's £000's £000's £000's £000'sBy activity andsource:Financial 13,799 12,718 15,133 13,638 477 714 29,409 27,070publishingBusiness 7,361 6,866 3,727 3,240 634 523 11,722 10,629publishingTraining 9,018 7,205 3,278 2,691 1,188 1,140 13,484 11,036Conferences 13,999 10,252 17,877 15,908 6,783 2,718 38,659 28,878andseminarsDatabases 2,577 2,372 1,816 2,040 5,238 3,465 9,631 7,877andinformationservicesSold/closed 74 794 - 304 146 930 220 2,028businesses -------- -------- -------- -------- -------- -------- -------- --------Group 46,828 40,207 41,831 37,821 14,466 9,490 103,125 87,518revenueJoint 963 717 - - 885 - 1,848 717ventures -------- -------- -------- -------- -------- -------- -------- -------- 47,791 40,924 41,831 37,821 15,351 9,490 104,973 88,235 ======== ======== ======== ======== ======== ======== ======== ======== 2006 2005 £000's £000'sBy type:Advertising 25,203 23,082Sponsorship 17,888 14,633Subscriptions 26,836 23,096Delegates 28,481 20,427Other 4,497 4,252Closed Businesses 220 2,028 ------- ------- 103,125 87,518 ======= ======= Euromoney Institutional Investor PLCNotes to the Unaudited Interim Report continued 2. Segmental analysis continued United North Rest of Total Kingdom America World 2006 2005 2006 2005 2006 2005 2006 2005 £000's £000's £000's £000's £000's £000's £000's £000'sOperatingprofitBy activityand source: Financial 3,034 2,248 1,624 1,110 (169) (48) 4,489 3,310publishingBusiness 1,648 1,193 413 330 (69) (79) 1,992 1,444publishingTraining 1,974 1,626 557 604 281 418 2,812 2,648Conferences 4,102 2,397 4,545 5,459 1,584 (173) 10,231 7,683andseminarsDatabases 1,412 1,398 1,024 678 (271) (357) 2,165 1,719andinformationservicesSold/closed 47 (171) - (221) 37 (48) 84 (440)businessesUnallocated (3,838) (1,118) (376) (274) - - (4,214) (1,392)corporate -------- ------- -------- ------- ------- ------- ------- -------costsOperating 8,379 7,573 7,787 7,686 1,393 (287) 17,559 14,972profitbeforegoodwillimpairmentand shareoptionexpenseGoodwill - (390) - - - - - (390)impairmentShare option (1,519) (76) (898) - (125) - (2,542) (76)expense -------- ------- -------- ------- ------- ------- ------- -------Operating 6,860 7,107 6,889 7,686 1,268 (287) 15,017 14,506profit aftergoodwillimpairmentand shareoptionexpenseAssociates 453 227 - - 280 - 733 227and joint -------- ------- -------- ------- ------- ------- ------- -------venturesOperating 7,313 7,334 6,889 7,686 1,548 (287) 15,750 14,733profit ======== ======= ======== ======= ======= ======= ======= ======= 3.Tax on profit on ordinary activities Unaudited Unaudited Audited six months six months year ended ended ended March 31 March 31 Sept 30 2006 2005 2005 £000's £000's £000'sCurrent tax expenseUK corporation tax 2,715 1,811 5,194Foreign tax 673 576 1,531Over provided in prior years - 66 544 --------- --------- -------- 3,388 2,453 7,269Deferred tax expenseCurrent year (131) 261 (4,701)Over provided in prior years - - (151) --------- --------- --------Total tax expense in income statement 3,257 2,714 2,417 ========= ========= ======== Corporation tax for the interim period is charged at 24% (2005: 21%),representing the weighted average annual corporation tax rate currently expectedfor the full financial year. Euromoney Institutional Investor PLCNotes to the Unaudited Interim Report continued 4. Net debt Unaudited Unaudited Audited six six year months months ended ended ended March 31 March 31 September 30 2006 2005 2005 £000's £000's £000's Net debt at beginning of period (66,430) (62,389) (62,389)Increase/(decrease) in cash and cash (7,275) (7,918) 1,686equivalentsIncrease/(decrease) in loans 8,346 (13,100) (18,907)Decrease/(increase) in amounts owed to DMGT (6,994) 4,414 15,384group companyOther non cash changes (1,729) - (106)Effect of foreign exchange rate movements (1,430) 3,067 (2,098) --------- --------- --------Net debt at end of period (75,512) (75,926) (66,430) ========= ========= ======== Net debt comprises cash at bank and in hand, bank overdrafts, banks loans andother borrowings. 5. Dividends Unaudited Unaudited Audited six six year months months ended ended ended March 31 March 31 September 30 2006 2005 2005 £000's £000's £000'sAmounts recognisable as distributable toequity holders in periodFinal dividend for the year ended September 30 9,767 8,798 8,7982005 of 11.0p (2004: 10.0p)Interim dividend for year ended September 30 - - 4,5872005 of 5.2p --------- --------- -------- 9,767 8,798 13,385Employees' Share Ownership Trust dividend (7) (6) (9) --------- --------- -------- 9,760 8,792 13,376 ========= ========= ========Proposed interim dividend for the period ended 4,806 4,587March 31 2006 5.4p (2005: 5.2p)Employees' Share Ownership Trust dividend (3) (3) --------- --------- 4,803 4,584 ========= ========= The proposed final dividend was approved by shareholders at the Annual GeneralMeeting held on January 25 2006 and paid on January 27 2006. The interim dividend of 5.4p (2005: 5.2p) is anticipated, subject to approval,to be paid on June 23 2006 to shareholders on the register on May 26 2006. It isexpected that the shares will be marked ex-dividend on May 24 2006. Holders ofInternational Depositary Receipts ("IDR") can receive their dividend on June 232006 by presentation of coupon number 38 to Dexia Banque Internationale aLuxembourg or to one of their agents. The interim dividend has not been includedas a liability in these financial statements in accordance with IAS 10 "Eventsafter the balance sheet date". Euromoney Institutional Investor PLCNotes to the Unaudited Interim Report continued 6. Earnings per share Unaudited Unaudited Audited six months six months year ended ended ended 2006 2005 2005 £000's £000's £000'sBasic earnings 9,620 9,244 30,181 ========= ========= ======== Number Number Number 000's 000's 000'sWeighted average number of shares 88,862 88,095 88,336Shares held by the Employees' Share (59) (59) (59)Ownership Trust --------- --------- -------- 88,803 88,036 88,277Effect of dilutive share options 197 335 231 --------- --------- --------Diluted weighted average number of 89,000 88,371 88,508shares ========= ========= ======== Pence per Pence per Pence per share share shareBasic earnings per share 10.83 10.50 34.19Effect of dilutive share options (0.02) (0.04) (0.09) --------- --------- --------Diluted earnings per share 10.81 10.46 34.10 ========= ========= ======== The 2006 basic earnings of £9,620,000 includes £448,000 of imputed interest onacquisition option commitments. 7. First time adoption of IAS 39 "Financial Instruments: Recognition andMeasurement" As permitted by IFRS 1 "First time Adoption of International Financial ReportingStandards", the group has elected to defer the implementation of IAS 39 untilthe year ending September 30 2006. The effect of the adoption of IAS 39 atOctober 1 2005 is to reduce net assets by £21.9 million, due to the followingadjustments: Forward exchange contracts and interest rate swaps IAS 39 requires that derivative financial instruments are recognised on thebalance sheet at their fair value. At October 1 2005 the effect on the groupbalance sheet was to reduce net assets by £0.6 million. Derecognition of liabilities IAS 39 sets out specific criteria in relation to when a financial liabilityshould be derecognised. Application of this resulted in an increased liabilityof £1.6 million which was recognised on the balance sheet from October 1 2005. Acquisition option commitments The group is party to a number of put and call options over the remainingminority interests in its subsidiaries. IAS 39 requires the recognition of aliability in respect of these acquisition option commitments. As at October 12005, the discounted present value of these options is £20.1 million. FromOctober 1 2005 these discounts are unwound as a notional interest charge to theincome statement. Deferred tax A deferred tax asset of £0.4million has been recognized on the aboveadjustments. Euromoney Institutional Investor PLC Independent Review Report to Euromoney Institutional Investor PLC Introduction We have been instructed by the company to review the financial information forthe six months ended March 31 2006 which comprises the group income statement,the group balance sheet, the group cash flow statement, the group statement ofchanges in equity and related notes 1 to 7. We have read the other informationcontained in the interim report and considered whether it contains any apparentmisstatements or material inconsistencies with the financial information. This report is made solely to the company in accordance with Bulletin 1999/4issued by the Auditing Practices Board. Our work has been undertaken so that wemight state to the company those matters we are required to state to them in anindependent review report and for no other purpose. To the fullest extentpermitted by law, we do not accept or assume responsibility to anyone other thanthe company, for our review work, for this report, or for the conclusions wehave formed. Directors' responsibilities The interim report, including the financial information contained therein, isthe responsibility of, and has been approved by, the directors. The directorsare responsible for preparing the interim report in accordance with the ListingRules of the Financial Services Authority which require that the accountingpolicies and presentation applied to the interim figures are consistent withthose applied in preparing the preceding annual accounts except where anychanges, and the reasons for them, are disclosed. International Financial Reporting Standards As disclosed in note 1, the next annual financial statements of the group willbe prepared in accordance with International Financial Reporting Standards asadopted for use in the EU. Accordingly, the interim report has been prepared inaccordance with the recognition and measurement criteria of IFRS and thedisclosure requirements of the Listing Rules. Review work performed We conducted our review in accordance with the guidance contained in Bulletin1999/4 issued by the Auditing Practices Board for use in the United Kingdom. Areview consists principally of making enquiries of group management and applyinganalytical procedures to the financial information and underlying financial dataand, based thereon, assessing whether the accounting policies and presentationhave been consistently applied unless otherwise disclosed. A review excludesaudit procedures such as tests of controls and verification of assets,liabilities and transactions. It is substantially less in scope than an auditperformed in accordance with International Standards on Auditing (UK andIreland) and therefore provides a lower level of assurance than an audit.Accordingly, we do not express an audit opinion on the financial information. Review conclusion On the basis of our review we are not aware of any material modifications thatshould be made to the financial information as presented for the six monthsended March 31 2006. Deloitte & Touche LLPChartered AccountantsLondon May 17 2006 Euromoney Institutional Investor PLCDirectors and Advisors Chairman PM Fallon ++ Managing Director PR Ensor ++ Finance Director CR Jones Directors The Viscount Rothermere *+Sir Patrick Sergeant *++(S)CJF Sinclair *+++NF OsbornDC CohenCR BrownJP Williams*(S)JC Botts*+++(S)SM BradyRT LamontD AlfanoG MuellerMJ CarrollJ Gonzalez* * non-executive director+ member of the remuneration committee++ member of the nominations committee(S)member of the audit committee President Sir Patrick Sergeant Company Secretary CR Jones Registered Office Nestor House, Playhouse Yard, London EC4V 5EX Registered Number 954730 Auditors Deloitte & Touche LLP, London Solicitors Nabarro Nathanson, Lacon House, Theobald's Road, London WC1X 8RW Stockbrokers UBS, 1 Finsbury Avenue, London EC2M 2PP Depositary Dexia Banque Internationale a Luxembourg SA, 69 route d'Esch, 2953Luxembourg Agents of the DepositaryCiticorp Investment Bank (Switzerland), Bahnhofstrasse 63, PO Box 224, CH 8021 ZurichCitibank NA, Citibank House, 336 Strand, London WC2R 1HB Registrars Capita IRG plc, The Registry, 34 Beckenham Road, Beckenham, Kent BR34TU Internet SitesEuromoney InstitutionalInvestorInternet Sites (all www.)abf-asia.com iinews.comabf.com.sg iiresearchgroup.comabsolutereturn.net iisearches.comadhes.com imn.orgairfinancejournal.com institutionalinvestor.comairtrafficmanagement.net internationaltaxreview.comasialaw.com isfmagazine.comasiamoney.com latinfinance.comceicdata.com legalmediagroup.comchinalawandpractice.com managingip.comcoaltrans.com medadnews.comdcgtraining.com misti.comdealogic.com mistieurope.comemergingmarkets.org opi.neteuromoney.com petroleum-economist.comeuromoneybooks.com pharmalive.comeuromoneyconferences.com projectfinancemagazine.comeuromoneyleasetraining.com ravenfox.comeuromoneyplc.com reactionsnet.comeuromoneyseminars.com securities.comeuromoneytraining.com sfinews.neteuromoney-yearbooks.com telcap.co.ukeuroweek.com tradefinancemagazine.comexpertguides.com worldoil.comfinancialdirectories.comglobalinvestormagazine.comglobaltelecomsbusiness.comgulfpub.comhedgefundintelligence.com For further information on all Euromoneyhydrocarbonprocessing.com Institutional Investor products, call the Hotlineiflr.com on:iflr1000.com (UK) +44 (0) 207 779 8999iiconferences.com (US) +1 800 437 9997 or +1 212 224 3570iievents.comiijournals.com or e-mail to:iimemberships.com [email protected] -------------------------- This information is provided by RNS The company news service from the London Stock ExchangeRelated Shares:
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