Annual Report & Accounts 2007 - Euromoney Institutional Investor ...

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Notes to the Accounts continued 7 Finance income and expense 2007 2006 £000’s £000’s Finance income Interest receivable from short-term investments 653 623 Dividends receivable from assets held for sale – 110 Ineffectiveness of interest rate swaps – 39 Net movements in acquisition option commitment values 3,885 – Expected return on pension scheme assets 958 – 5,496 772 Finance expense Committed borrowings (14,915) (4,020) Imputed interest on acquisition option commitments (1,603) (916) Net tax equalisation swap expense (190) – Notional interest on deferred consideration – (334) Ineffectiveness of interest rate swaps (27) – Interest payable on loan stock (578) – Interest on pension scheme liabilities (1,114) – (18,427) (5,270) Net finance costs (12,931) (4,498) The tax equalisation swap expense relates to tax hedges on intra-group financing, of which £1.8 million is in relation to foreign exchange losses. This foreign exchange element is equal to tax credit on the losses on this intra-group financing (note 8). 8 Tax on profit on ordinary activities 2007 2006 £000’s £000’s Current tax expense UK corporation tax 4,946 6,119 Foreign tax 6,343 1,533 Adjustments in respect of prior years 494 107 11,783 7,759 Deferred tax (credit)/expense Current year (4,031) (11,361) Adjustments in respect of prior years 471 90 (3,560) (11,271) Total tax charge/(credit) in income statement 8,223 (3,512) 60 Euromoney Institutional Investor PLC
8 Tax on profit on ordinary activities continued The effective rate of tax for the year is 20% (2006: credit (10%)). The underlying tax rate for 2007 is 25% based on adjusted profit before tax (see glossary page 5), prior year items and foreign exchange on the tax equitisation swap (note 7) but increases to 34% after stripping out the effect of other non-recurring items. The actual total tax charge for the year is different from 30% of profit before tax for the reasons set out in the following reconciliation: 2007 2006 £000’s £000’s Profit before tax 41,128 35,234 Tax at 30% 12,338 10,570 Factors affecting tax charge: Rates of tax on overseas profits 463 (338) Joint venture and associate income reported net of tax (147) (362) US State taxes 615 756 US goodwill (1,201) (13,120) UK goodwill – 161 Disallowable expenditure 689 136 Tax effects of intra-group transactions eliminated on consolidation (3,901) – Recognition of previously unrecognised tax losses (1,890) (1,957) Non deductible loss on sale of business – 445 Deferred tax charge arising from changes in tax laws 292 – Prior year adjustments 965 197 Total tax charge/(credit) for the year 8,223 (3,512) No tax charge arose on the sale of Atalink and EIC. The tax charge on the disposal of Raven Fox was £223,000. Following the sale of Med Ad Inc in the year, the US group's tax losses (excluding Metal Bulletin US), have been fully utilised. The tax charge on the disposal was £1,908,000. A tax credit of £1,354,000 arises in relation to the exceptional costs on the acquisition of Metal Bulletin. Following a reassessment of the recoverability of the potential US deferred tax asset, an additional asset of £3,178,000 (2006: £13,649,000) was recognised during the year. The actual tax credited directly to equity was £2,082,000 (2006: charge of £265,000). A credit of £1,826,000 (2006: £nil) relating to tax on foreign exchange losses has been treated as exceptional as it is hedged by foreign exchange losses of £1,826,000 (2006: £nil) on tax equalisation swaps within finance costs (see note 7). 9 Dividends 2007 2006 £000’s £000’s Amounts recognisable as distributable to equity holders in period Final dividend for the year ended September 30 2006 of 11.6p (2005: 11.0p) 11,943 9,767 Interim dividend for year ended September 30 2007 of 6.0p (2006: 5.4p) 6,177 4,806 18,120 14,573 Employees’ Share Ownership Trust dividend (10) (10) 18,110 14,563 Proposed final dividend for the period ended September 30 13,386 11,943 Employees’ Share Ownership Trust dividend (8) (7) 13,378 11,936 The proposed final dividend of 13.0p (2006: 11.6p) is subject to approval at the Annual General Meeting on January 30 2008 and has not been included as a liability in these financial statements in accordance with IAS 10 'Events after the balance sheet date'. Annual Report and Financial Statements 2007 61
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Annual Report & Accounts 2007 Eurom
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Activities Financial Publishing Fin
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The problems in global credit marke
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The increase in the share of subscr
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3.2 Key performance indicators The
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Page 39 and 40: Basis of audit opinion We conducted
Page 41 and 42: Group Balance Sheet as at September
Page 43 and 44: Note to the Group Cash Flow Stateme
Page 45 and 46: Notes to the Accounts 1 Accounting
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Page 51 and 52: 2 Key judgemental areas adopted in
Page 53 and 54: 3 Segmental analysis continued 2007
Page 55 and 56: 3 Segmental analysis continued Non-
Page 57 and 58: 6 Staff costs continued (ii) Number
Page 59 and 60: 6 Staff costs continued The company
Page 61: 6 Staff costs continued The actual
Page 65 and 66: 11 Goodwill and other intangibles I
Page 67 and 68: 13 Investments Investments in Inves
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Page 73 and 74: 17 Trade and other payables 2007 20
Page 75 and 76: 19 Bank overdrafts and loans 2007 2
Page 77 and 78: 23 Share-based payments Equity sett
Page 79 and 80: 24 Statement of movement on reserve
Page 81 and 82: 28 Related party transactions conti
Page 83 and 84: Company Balance Sheet as at Septemb
Page 85 and 86: Derivatives and other financial ins
Page 87 and 88: 6 Intangible fixed assets Goodwill
Page 89 and 90: 12 Profit and loss account 2007 200
Page 91 and 92: Five Year Record Group income state
Page 93 and 94: Financial Calendar and Shareholder
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