5th Apr 2011 16:43
United Business Media Limited ANNUAL REPORT & NOTICE OF 2011 ANNUAL GENERAL MEETING
United Business Media Limited ("the Company") announces that its Annual General Meeting will be held on 10 May 2011 at 4.30pm at Westbury Hotel, Grafton Street, Dublin 2, Ireland. In connection with this, the following documents have been posted or made available to shareholders today:
Annual Report & Accounts for the year ended 31 December 2010
Notice of 2011 Annual General Meeting
Form of Proxy for the 2011 AGM
In accordance with Listing Rule 9.6.1, copies of these documents have also been submitted to the UK Listing Authority via the National Storage Mechanism and will be available for viewing shortly at www.hemscott.com/nsm.do
The 2010 Annual Report & Accounts and Notice of the 2011 Annual General Meeting are also now available on the Company's website at www.ubm.com.
Pursuant to DTR 6.1.2R, the Company confirms that at the 2011 Annual General Meeting it is proposed that the Company adopts new articles of association with effect from the conclusion of the meeting. In accordance with LR 13.8.10R, the Company confirms that copies of the new articles of association and blacklined articles of association showing the changes from the current articles of association are available at the offices of Norton Rose LLP, 3 More London, Riverside, London SE1 2AQ until the close of the Annual General Meeting. In addition, a copy of the new proposed articles of association has also been forwarded to the UK Listing Authority via the National Storage Mechanism and will be available for viewing shortly at www.hemscott.com/nsm.do
The appendices to this announcement contain additional information which has been extracted from the Annual Report & Accounts for the year ended 31 December 2010 ("the Annual Report") for the purposes of compliance with the Disclosure and Transparency Rules ("DTR") and should be read together with the Final Results Announcement, which can be downloaded from the Company's website www.ubm.com. This announcement should be read in conjunction with, and is not a substitute for, reading the full Annual Report. Together these constitute the information required by DTR 6.3.5 which is required to be communicated to the media in full unedited text through a Regulatory Information Service.
Anne SiddellCompany Secretary APPENDICES
Appendix A: Directors' responsibility statement
The following responsibility statement is repeated here solely for the purpose of complying with DTR 6.3.5. This statement relates to, and is extracted from pages 70-71 of the Annual Report. Responsibility is for the full Annual Report not the extracted information presented in this announcement or the Final Results Announcement.
The directors are responsible for preparing the Annual Report and the financial statements in accordance with applicable law and regulations.
The Companies (Jersey) Law 1991 requires the directors to prepare financial statements for each financial period in accordance with generally accepted accounting principles prescribed for the purposes of the Law for market traded companies, and to specify the generally accepted accounting principles that have been adopted in their preparation. The financial statements of the Company are required by law to give a true and fair view of, or be presented fairly in all material respects so as to show, the state of affairs of the Company at the end of the period covered by the accounts and of the profit or loss of the Company for that period. In preparing these financial statements, the directors should:
-Select suitable accounting policies and then apply them consistently;
-Make judgements and estimates that are reasonable and prudent;
-State whether applicable accounting principles have been followed in their preparation, subject to any material departures disclosed and explained in the financial statements; and
-Prepare the financial statements on the going concern basis unless it is inappropriate to presume that the Company will continue in business.
The directors are responsible for keeping accounting records which are sufficient to show and explain the Company's transactions and are such as to disclose with reasonable accuracy at any time the financial position of the Company and enable them to ensure that the financial statements prepared by the Company comply with the requirements of the Companies (Jersey) Law 1991. They are also responsible for safeguarding the assets of the Company and hence for taking reasonable steps for the prevention and detection of fraud and other irregularities.
The directors are responsible for the maintenance and integrity of the corporate and financial information included on the Company's website.
Legislation in Jersey governing the preparation and dissemination of financial statements may differ from legislation in other jurisdictions.
Each of the directors, whose names and functions are listed on pages 52 to 53 of the Annual Report, confirm that, to the best of their knowledge:
- the Group financial statements in this report, which have been prepared in accordance with International Financial Reporting Standards (IFRS) as issued by the International Accounting Standards Board (IASB) and IFRIC interpretations, and the Company financial statements in this report, which have been prepared in accordance with United Kingdom generally accepted accounting principles, give a true and fair view of the assets, liabilities, financial position and result of the Company and the undertakings included in the consolidation taken as a whole; and
- the management report contained in this report includes a fair review of the development and performance of the business and the position of the Company and the undertakings included in the consolidation taken as a whole, together with a description of the principal risks and uncertainties that they face.
Appendix B: Principal Risks
A description of the principal risks that the Company faces is extracted from pages 40 to 43 of the Annual Report.
Sound risk management is an essential discipline for running the business efficiently and
pursuing our strategy successfully. Our internal audit function manages a UBM-wide annual risk mapping exercise - reviewing with each division the risks they have identified and agreeing measures and controls to mitigate their risks wherever possible. This process is reviewed by the Audit Committee and then by the Board, to ensure a consistent and coherent approach to the principal risk factors and to those other risk factors that may arise or which may become material in the future.
The risks listed do not necessarily comprise all those associated with UBM.
Marketplace
Economic trends: Advertising and other discretionary marketing spend tends to be cyclical. In times of economic slowdown or recession, some companies spend less, particularly on advertising. An economic downturn may also result in an increase in slow payments or bad debts. UBM's strategy is to have a diversified set of products in its portfolio - some of which exhibit lower levels of cyclicality than others. Market trends are closely monitored at a divisional level and regularly reported upon. Each division closely manages credit risk monitoring collections performance and reviewing credit policies.
Sector trends: Our businesses operate in highly competitive markets that continue to change in response to technological innovation and other factors. We cannot predict with certainty changes which may affect the competitiveness of the business, or whether technological innovation will render some of our existing products and services partially or wholly obsolete.
UBM's strategy of creating a balanced portfolio of products improves our ability to meet the changing needs of our customers. We have responded to the continuing digital revolution by acquiring and developing innovative digital products, while at the same time actively managing the contraction of our print magazine portfolio. The divisions closely monitor trends within their sectors and regularly discuss with senior management.
Competitive environment: An increase in competitive pressure may result in loss of market share and consequently revenue. Competitive trends are monitored through market focus
groups, client satisfaction surveys and pricing reviews.
Force majeure: A disaster or natural catastrophe, terrorism, political instability or disease could affect our ability to continue to do business if it renders offices unavailable. In addition any incident that curtails travel will have an impact on the running of an event. In 2008, the CPhI India and P-MEC India shows in Mumbai scheduled for November 2008, coincided with the terrorist attacks in the city, leading to the shows being postponed. We have developed business continuity arrangements, including IT disaster recovery plans and back-up delivery systems, to minimise any business disruption in the event of a major disaster. Insurance coverage may reduce losses in certain circumstances. We also strengthen terms and conditions of contracts to minimise liabilities, plan for alternatives and diversify to reduce dependence on particular products or countries.
Mergers and acquisitions
Acquisition identification and deal execution: Part of our strategy is acquiring companies which are accretive to UBMs performance. The availability of suitable acquisition candidates,
obtaining regulatory approval for any acquisition and changes in the availability or cost of financing may affect our ability to execute on this strategy. We mitigate these risks by applying strict financial criteria to any potential acquisition including the costs associated
with financing the transaction, and subjecting the process to close monitoring and review by internal audit and the Board. The liquidity profile of UBM is closely managed by Treasury.
Integration: Delays in integration or unexpected costs or liabilities, as well as the risk of failing to realise operating benefits or synergies from completed transactions may mean that the financial impact is less beneficial than expected. Senior management and directors are involved in acquisitions on a regular basis and we apply strict processes to integration including a rigorous review process for major acquisitions which is designed to identify and rectify integration issues at an early stage. We also provide in-house integration training as part of career development for certain management positions.
People
Attracting and retaining key management personnel: We operate in a number of industry segments in which there is intense competition for experienced and highly qualified individuals. The ability of the Company to attract talent and retain highly skilled, experienced,
and motivated personnel plays an important part in the continued successful execution of the strategy. We place significant emphasis on succession planning and developing and retaining management talent. We do this through a variety of means - including incentive schemes, by developing a more agile, entrepreneurial and innovative company culture and by running a number of talent management programmes to develop high calibre business leaders.
Operational
Geographic exposure: As a result of acquisitions and organic growth, we have operations in many new geographic regions. Operations in these new territories may present logistical and management challenges due to different business cultures, laws and languages. Expansion in geographical locations remote from the centres of management may affect control. We are addressing each of the control, operational and reputation risks by sending experienced employees into new regions to form part of local management teams and through review by internal audit, and close board monitoring.
Corporate and product brand management: A diminished corporate reputation or in UBM's
products brands may make UBM, its businesses and products less competitive. We identify and monitor potential risks to corporate or product brands and take appropriate steps to mitigate those risks. For example we actively manage our portfolio of trademarks and copyright intellectual property.
Major project execution: Our businesses are, on occasion, engaged in significant projects - these may be required to secure future revenue streams and may involve significant capital
investment (specifically IT and system development). The failure to manage and execute these projects successfully could lead to increased costs, delays in completion or erosion of UBM's competitive position. We seek to mitigate project-related risks through robust project management discipline, monitoring by internal audit and assigning responsibility for projects at an executive management level within UBM.
Key suppliers: Failure of a key supplier at a critical time in the production process or conflict with a major supplier could result in loss of revenue or incremental costs. Where possible UBM seeks to have a diversified supplier base. Contingency planning also forms part of the business processes and for certain important suppliers we evaluate their disaster recovery plans.
IT system failure/weaknesses: There are negative implications if IT system failure impacts our ability to do business. Other specific risks include the attempted theft of data within our data-based businesses, access to confidential information and the reliance on third parties' data
security controls under 'cloud computing' or other IT outsourcing arrangements. We have well-defined IT security standards within UBM, and reviews (including penetration tests) are undertaken by internal audit and third party specialist firms. Such reviews also cover key third party suppliers. We have ongoing maintenance programmes, back-up and contingency plans (which are subject to periodic testing).
Regulatory/Legal
Legislation changes: The global nature of UBM means we are subject to laws in the various jurisdictions in which we operate. We are therefore exposed to the risk of unfavourable changes in applicable law and its interpretation. These risks include, among others, disputes over trade terms with customers and/or suppliers, customer losses resulting from our IT system delay or failure and violations of data protection and privacy laws. The initiation of a claim, proceedings or investigation could have a material effect on our reputation, business
or financial position. New legislation changes may inhibit our ability to grow (e.g. requirements to maintain marketing data under data protection issues) or have an adverse effect on revenues (e.g. changes in government health policies on the use generic drugs may adversely affect the pharmaceutical companies' advertising spend). We address these risks through legal reviews, operational reviews and staff training to raise awareness of the need
for compliance in certain areas. The divisions seek to monitor legislative changes and regularly discuss with senior management.
Financial
Liquidity: UBM's strategy of acquiring, coupled with the global nature of its business, means that liquidity management is recognised as an important area of focus. UBM liquidity issues may curtail the ability to make certain acquisitions, while local liquidity issues could have a negative reputational impact, particularly with suppliers. UBM's central treasury is principally concerned with managing internal and external funding requirements and monitoring our working capital. The Head of Treasury is accountable to the Chief Financial Officer and the Board. We maintain a balance between continuity of funding and flexibility through the use of capital markets, bank loans and overdrafts. We maintain a range of borrowing facilities to fund requirements at short notice and at competitive rates. To facilitate access to these sources of
funds we seek to maintain a long term investment grade credit rating with both Moody's (current rating: Baa3 - stable outlook) and Standard and Poor's (current rating: BBB - stable outlook).
Exchange rate fluctuations: UBM generates a substantial proportion of its revenue in foreign currencies particularly the US dollar, and foreign exchange rate fluctuations could adversely affect our earnings and the strength of our balance sheet. Translation exposures arise on the net assets of overseas business operations. These exposures are hedged under a policy of denominating borrowings in currencies where significant transaction exposure exists. Derivatives, in the form of cross currency contracts, can be used to maximise the hedging by increasing debt in these currencies. Details of all hedging contracts are provided in Note 21 to the financial statements.
Interest rate fluctuations: UBM's exposure to interest rate risk is shown (by way of sensitivity to changes in interest rates) in the interest rate risk table in Note 21 to the financial statements. Our policy is to manage our cost of borrowing using a mix of fixed and variable rate debt. We enter into interest rate swaps agreed with other parties to generate the desired interest profile.
Credit: We seek to limit interest rate and foreign exchange risk by the use of financial instruments. As a result we have an unsecured credit risk from the potential non-performance by counterparties to these financial instruments. The credit risk is normally limited to the amount of any mark to market gain on the instrument and not the notional amount being hedged. We also have credit exposure for the amount of cash and cash equivalents on the balance sheet. Credit risk is controlled by Treasury policy which restricts the counterparties with whom funds can be invested and derivative contracts can be entered into, principally
licensed commercial and investment banks with strong, long term credit ratings. The policy does not allow significant exposures with counterparties that are rated less than A by Standard and Poor's, Moody's or Fitch and we monitor the concentration of risk constantly.
Given our large and diverse customer base, there are no significant concentrations of credit risk with respect to trade receivables. No single customer accounts for more than 1% of UBM's revenues.
Tax: The management of tax liabilities are a matter of regulatory compliance and legal structure. Failure to comply with the necessary legislation could expose UBM to penalties or challenges to legal structures such that future tax payments may exceed recorded liabilities.
Similarly changes to taxation legislation may result in higher levels of taxation than previously guided to. We manage our tax affairs actively including monitoring tax developments, liaising with external advisors and regularly reviewing the tax planning schemes.
Pension: The cost of providing pension benefits to existing and former employees is subject to changes in pension fund values and changing mortality. There is an exposure in the event that asset returns are insufficient to cover changes in the schemes' liabilities over time. This has been mitigated by active management of the investment portfolio and additional contributions have been made to the UK schemes. UBM has acted to close its defined benefit schemes to new members and neither the CEO nor the CFO belongs to such a scheme.
Appendix C: Related party transactions (extracted from pages 137-138, Note 32, Annual Report)
The Group entered into the following transactions with related parties duringthe year: Balances Balances (owed (owed by)/ by)/ due to due to the the Group at Value of Group at Value of 31 31 December transactions December transactionsTransactions with Nature of Nature of 2010 2010 2009 2009 related parties relationship transactions £m £m £m £m Joint Licensing CMPWekaVerlag GmbH1 Venture revenue - 0.2 0.2 0.2 PR Newswire do Newswire Brasil2 Associate service - - (0.2) (0.3) Commission and Guangzhou Beauty Joint management Fair Venture fees 0.1 0.1 - 0.1 GML (Exhibitions) Joint Thailand Co Limited Venture Advances 0.3 - - - ShanghaiTekviewIC AnalysisTechnologyCo
Limited Investment IT services 0.1 -* - -
1 The CMP Weka Verlag GmbH joint venture was sold on 29 November 2010. The related party transactions between the Group and CMP Weka Verlag GmbH disclosed above represent transactions until this date.
2 The remaining 62.03% of PR Newswire do Brasil was acquired by the Group on 26 April 2010. After this date, as the Group owned 100% of the company it is not required to disclose related party transactions. The disclosures given above represent related party transactions with PR Newswire do Brasil until 26 April 2010.
* Transactions and balances (owed by)/due to the Group less than £0.1m.
John Botts, Chairman of the Group, was a director of Convera Inc., an IT consultancy specialising in search technologies, until 8 February 2010. Convera Inc. is party to a five year contract with the Group under which it is entitled to receive a share of revenues from certain related products. Payments under this contract in the year until 8 February 2010 were nil (full year 2009: £39,204). The Group also provided services to Convera Inc. during this period for fees of £1,680 (full year 2009: £2,094).
The Group has provided services to Euromoney Institutional Investor Plc, an international publishing, events and electronic information group, during the year for fees of £3,916 (2009: £3,569). John Botts is a director of Euromoney Institutional Investor Plc.
Allen & Company, a US investment bank, provided services to the Group during the year for fees of £2.0m (2009: nil). John Botts is a senior advisor of Allen & Company.
John Botts was a director of SpinVox Limited until 31 December 2009. The Group provided services to SpinVox Limited, a voice-to-text conversion application company, during 2009 for fees of £124. Additionally, Spinvox Limited provided services to the Group during 2009 at a cost of £300.
David Levin, Chief Executive Officer of the Group, was a member of Oxford University Press Finance Committee until 30 September 2009. The Group has provided services to Oxford University Press, a university publisher, during 2009 of £3,058.
Leaders Quest, a non-profit organisation, organised various management conferences for the Group during the year for fees of £15,000 (2009: £7,000). Lindsay Levin, wife of David Levin, is a partner of Leaders Quest.
IQ Resource, a strategic outsourcing company specialising in business media and information services, provides services to the Group for which the Group paid fees of nil (2009: £137,788). At 31 December 2010, the Group had a trade payable with IQ Resource of nil (2009: £2,356). Jonathan Newcomb, a non-executive director of the Group, holds an option over equity shares in IQ Resource.
Microland, an IT infrastructure management outsourcing services provider, has provided services to the Group for fees of £64,170 (2009: £162,048) during the year. During 2010, the Group provided advertising services and event sponsorship to Microland for £3,226 (2009: £14,936). At 31 December 2010, the Group had a trade payable with Microland of nil (2009: £39,339). Pradeep Kar, a non-executive director of the Group, is founder, chairman and managing director of Microland.
The Group has provided services to the Bank of Ireland, a financial services provider, during the year for fees of nil (2009: £12,000). Terry Neill, a non-executive director of the Group, was a non-executive director of the Bank of Ireland until 19 May 2010.
Computacenter plc, a provider of IT infrastructure services, provided services to the Group during the year for fees of £146,000 (2009: nil). Greg Lock, a non-executive director of the Group, is the chairman of Computacenter plc.
During the year, the Group has provided services to Target Group, a provider of software and servicing solutions, for fees of £16,568 (2009: nil). At 31 December 2010, the Group had a trade receivable with Target Group of £8,687 (2009: nil). Greg Lock is a non-executive director of Target Group.
Nigel Wilson was Chief Financial Officer of the Group until 7 May 2009. He was the Senior Independent Director of Halfords Group Plc, a leading retailer. The Group provided services to Halfords Group Plc, during 2009 for fees of £8,000. Also, during 2009, the Group participated in the Cycle to Work scheme operated by Halfords Group Plc, with total transactions of £33,243. Transactions are made on behalf of employees and are recharged in full to employees through monthly payroll.
Transactions with related parties are made at arm's length. Outstanding balances at year-end are unsecured and settlement occurs in cash. There are no bad debt provisions for related party balances as at 31 December 2010, and no related party transactions have been written off during the year. Unless otherwise stated above there are no amounts owed by or due to related parties by the Group as at 31 December 2010 and 2009.
Compensation of key management personnel of the Group
Key management personnel are the Group's Executive directors and the following is the aggregate compensation of these directors:
2010 2009 £m £m Short-term employee benefits 2.6 2.0 Post employment benefits 0.1 0.2 Share-based payments 1.3 2.4 4.0 4.6
vendorRelated Shares:
UBM