Annual Report & Accounts 2012 - Euromoney Institutional Investor ...

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Euromoney Institutional Investor PLC Annual Report and Accounts 2012 www.euromoneyplc.com Notes to the Consolidated Financial Statements continued 25 Acquisition option commitments The group is party to put options over the remaining non-controlling interest in subsidiaries. IAS 39 ‘Financial Instruments’ requires the group to recognise the discounted present value of the remaining put option commitment. This discount is unwound as a notional interest charge to the Income Statement. The group regularly performs a review of the underlying businesses with put option commitments to assess the impact on the fair value of the respective put option commitment. Any resultant change in these fair values is reported as a finance income or expense in the Income Statement. 2012 £000 2011 £000 Acquisition option commitments at October 1 11,001 1,061 Additions from acquisitions during the year – 9,451 Net movements during the year following review of underlying business (note 8) (2,940) 358 Imputed interest (note 8) 977 181 Exercise of option commitments (831) (50) Exchange differences (339) – Acquisition option commitments at September 30 7,868 11,001 A net income of £1,963,000 (2011: expense of £539,000) was recorded in finance income and finance expense (note 8). Maturity profile of acquisition option commitments: 2012 £000 2011 £000 Within one year 4,273 852 In more than one year 3,595 10,149 7,868 11,001 There is a deferred tax asset of £nil (2011: £3,800,000) related to the put option commitment as at September 30 2012. As explained in note 2, key judgemental areas in preparing the financial statements, the value of the put option commitments is subject to a number of assumptions. The directors estimate that a possible range of outcomes for the fair value of the NDR put option commitments, based on possible changes in the assumptions, is as follows: 2012 £000 2011 £000 Estimated minimum – – Estimated capped maximum 37,552 39,183 The put option agreement over the sale of Internet Securities, Inc. (ISI) shares between the company and the non-controlling shareholders of ISI is based on the valuation of ISI as determined under a methodology provided by an independent financial adviser. Under the terms of the put option agreement consideration caps have been put in place that require the maximum consideration payable to option holders to be capped at an amount such that the results of any relevant class tests would, at the relevant time, fall below the requirement for shareholder approval. Following a sensitivity analysis of the fair value of the acquisition option commitments applying reasonable possible assumptions, a 10% change in expected profit, the liabilities at September 30 2012 range from £6,229,000 to £9,519,000 with the corresponding change to the value at September 30 2012 charged or credited to the Income Statement in future periods. 110
Euromoney Institutional Investor PLC Annual Report and Accounts 2012 www.euromoneyplc.com Our Performance 26 Operating lease commitments At September 30 the group had committed to make the following payments in respect of operating leases on land and buildings: 2012 £000 2011 £000 Within one year 6,728 7,317 Between two and five years 16,451 19,899 After five years 2,812 4,887 25,991 32,103 The group’s operating leases do not include any significant leasing terms or conditions. At September 30 the group had contracted with tenants to receive the following payments in respect of operating leases on land and buildings: Within one year 1,320 903 Between two and five years 3,492 1,819 After five years 445 868 5,257 3,590 27 Retirement benefit schemes Defined contribution schemes The group operates the following defined contribution schemes: Euromoney PensionSaver, Euromoney Pension Plan, the Metal Bulletin Group Personal Pension Plan in the UK and the 401(k) savings and investment plan in the US. It also participates in the Harmsworth Pension Scheme, a defined benefit scheme which is operated by Daily Mail and General Trust plc (DMGT) but is accounted for in Euromoney Institutional Investor PLC as a defined contribution scheme. In compliance with recent legislation the group is making arrangements for relevant employees to be automatically enrolled into defined contribution pension plans. The staging date for the group for automatic enrolment is expected to be November 2013. The pension charge in respect of defined contribution schemes for the year ended September 30 comprised: Euromoney Pension Plan/PensionSaver 1,094 965 Metal Bulletin Group Personal Pension Plan 24 28 Private schemes 1,077 1,035 Harmsworth Pension Scheme 112 148 2,307 2,176 2012 £000 2012 £000 2011 £000 2011 £000 Notes to the Consolidated Financial Statements Company Accounts Group Accounts Our Governance 111
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