Euromoney Institutional Investor PLC EuromonEy InstItutIonaL - - PDF document

Annual Report & Accounts 2015

Euromoney Institutional Investor PLC

Euromoney Institutional Investor PLC is listed on the London Stock Exchange and is a member of the FTSE 250 share index. It is a leading international business-to-business media group focused primarily on the international fjnance, metals and commodities sectors. It owns more than 70 brands including Euromoney, Institutional Investor and Metal Bulletin, and is a leading provider of electronic and investment research and data under brands including BCA Research, Ned Davis Research and the emerging markets information providers, EMIS and CEIC. It also runs an extensive portfolio of conferences, seminars and training courses for fjnancial and commodities markets. The group’s main offjces are in London, New York, Sofja, Montreal and Hong Kong and more than a third of its revenues are derived from emerging markets.

Euromoney Institutional Investor PLC

Year in Brief

04

£403.4m

£104.2m

• PEratIng ProfIt

£123.1m

£107.8m

£123.3m

70.1p

83.4p

23.4p

£17.7m

Contents Highlights

• vErvIEw

• thEr

01

Our Divisions

Research and data Financial publishing

REvENUE £125.8m REvENUE £74.3m

The group provides a number

• f subscription-based

research and data services for fjnancial markets.

• f global macro-economic research. In

Financial publishing includes an extensive portfolio of titles covering the international capital markets and asset management as well as a number of specialist fjnancial titles. Products include magazines, newsletters, journals, surveys and research, directories and books.

Ned Davis

Research

02

Business publishing Conferences, seminars and training

REvENUE £70.0m REvENUE £131.1m

The business publishing division produces print and

• nline information for the

metals, minerals and mining, legal, telecoms and energy sectors.

The group runs a large number of sponsored conferences and seminars for the international fjnancial and commodities markets, mostly under the Euromoney, Institutional Investor, Metal Bulletin, Coaltrans and IMN brands. Euromoney Learning Solutions, the group’s training division, runs a comprehensive range of banking, fjnance, energy and legal courses, both public and in-house.

• pportunities. Such events include: Euromoney’s Covered Bond Congress; the Saudi

Financial publishing 19% Business publishing 17% Conferences, seminars and training 33% Research and data 31% DIVISIONAL SPLIT

03

It’s a privilege to join Euromoney with its unique portfolio of businesses and outstanding

• people. Richard Ensor will be a tough act to follow. I know our shareholders will join me in

thanking him for his decades of service to our company. The results in this report refmect the strong headwinds, both cyclical and structural, facing many of our customers and our businesses. But they also show areas of real strength, for example in our asset-management-related businesses. They demonstrate, too, how cash generative the business is. These strengths create great opportunity. We are reviewing our strategy and we shall present to investors in early 2016.

• Our adjusted profjt before tax was £107.8m.

• f 16.40p (2014: 16.00p), giving a total

• Total revenue of £403.4m fell 1%

• f the timing of events, decreased by 2%.

• Adjusted operating profjt fell by £15.6m to

• f the Dealogic transaction. The other half

• The 7% fall in adjusted profjt before tax

• perating profjt because of a £2.5m credit

• Adjusted diluted earnings a share fell
• nly 1% because of a lower tax rate and

• The statutory profjt before tax of £123.3m

• The group continued to invest in its digital

• The group ended the year with net cash

• f £17.7m at September 30 compared

• ffset by net M&A of £15.6m, including

Chief Executive’s Statement

04

• company. I look forward to working with them

05

Appendix to Chief Executive’s Statement

06

Managing Director’s Review

• nline research service – have begun to attract

• Network. These capital introduction networks

• n capital placed.

• individuals. By being more representative of

• earnings. Estimize is working with BCA Research

• f buy-side clients now has access to data and

• f Institutional Investor’s Investor Intelligence

Despite challenging market conditions this year, Euromoney’s market-leading businesses are well placed to benefjt from long-term global trends in the fjnance, metals and commodities sectors.

Investor Intelligence Network

The group’s largest current investment is the Investor Intelligence Network (IIN). The IIN is a digital disruptive technology that brings together institutional investors and investment managers in two separate but linked online communities.

07

Business Model

D a t a A n a l y s i s N e w s M a r k e t i n g s e r v i c e s E x p e r t v i e w s E d u c a t i

• n

E v e n t s N e t w

• r

k i n g R e s e a r c h W

• r

k i n g w i t h

• v

e r

3

b u s i n e s s c

• m

m u n i t i e s

180

countries

7 million contacts

B U S I N E S S P U B L I S H I N G F I N A N C I A L P U B L I S H I N G C O N F E R E N C E S , S E M I N A R S A N D T R A I N I N G R E S E A R C H A N D D A T A

S p

• n

s

• r

s h i p D e l e g a t e s S u b s c r i p t i

• n

s A d v e r t i s i n g

• f sponsorship can entitle the sponsor to

• r more of the group’s publications, either in

• utsourcing the printing of publications, hiring

• products. Other than its main offjces, the group

• f the markets in which it operates; this allows

08

• markets. Its customer base predominantly

• activities. The group’s EDEN marketing

• f which more than 600,000 have bought

• years. However, more important than

• f the group’s clients, their expectations of

Marketplace

Sponsorship 15% Advertising 12% Other 3% Subscriptions 52% Delegates 18% GROUP REVENUE SPLIT Western Europe 15% UK 15% Asia 12% US 42% Other 16% REVENUE BY CUSTOMER LOCATION Other 7% Commodities 19% Asset management 33% Investment banking 41% REVENUE BY MARKET SECTOR

Business publishing Research and data Conferences, seminars and training Financial publishing

09

• Downturn in

• Underlying

• Subscription share
• f total revenues
• Subscription

• f the group’s

• nto the Delphi authoring system and continues to develop new

• Data integrity,

• Failure of key

• Failure of

• Investment in

• Online user

• Subscription

• f the highest quality

• Failure of

• Underlying revenue

• Percentage of

• nline

• Downturn in

• Travel risk
• Repeat revenue

• Sponsorship and

• Audience quality

• r too high a

• Downturn in

• Revenue by type
• Adjusted operating

• Adjusted profjt

Strategic Priorities

10

• n margin control. The group benefjts from having a fmexible

• products. Other than its main offjces, the group avoids the fjxed

• Downturn in

• Adjusted operating

• Adjusted profjt

• Securing and

• Long-term incentives

• variable pay as a

• Acquisition and

• Treasury
• perations
• Cash consideration
• n acquisitions
• Net cash/debt to

• Cash conversion

11

• disposals. Underlying subscription revenues have been increasing at a

• f premium-prices, high renewal rates and high margins. The group has

Key Performance Indicators

12

• perating profjt. The operating cash conversion rate was 105% (2014:

• f the rent-free period on the new London offjces. The rate was less than

• utfmows of approximately £9m for which the expense was accrued in

13

• r internal factors, and whether each risk is established and understood or is an emerging risk and therefore less understood. The risk radar below maps

Principal Risks

• 10. Failure of product strategy
• 11. Treasury operations
• 12. Unforeseen tax liabilities

14

• business. If this occurs income is likely to be

• perates in many geographical locations.

• r region. Management has the ability to

• ver SARS and swine fmu, and natural disasters such

• restrictions. Events can be postponed or

15

• f 2008 have implications for

• f Institutional Investor’s Investor

• f additional costs, management time and

• f conduct, procedural guidance and staff
• training. Ethics audits have been conducted

• ut worldwide in 2015. The group has

Principal Risks

continued

16

• f data including customer,

• f cyber-attacks affecting
• rganisations globally, the

• f cyber-attack has become more signifjcant. A

• trails. Restrictions are in place to prevent

• ffjces could disrupt the ordinary operations of the

• ffsite data backups, failover technology

• perations in its Bangkok offjce during the

17

Principal Risks

continued

• nline or in its magazines and
• journals. As a result, there is an

• r poor quality research. The

• reputation. The rise in use of social media, and in

• risk. Damage to the reputation of the group arising

• f royalties, loss of intellectual property and

• risk. Editorial controls are also in place for

• nline publishing. Tight controls have been

• documented. All employees involved with

• f its businesses. Many products

• r technical expertise.

• pportunities.

18

• reporting. The platform supports

• nline requirements including

• n effective digital rights management technology

• n central content management technology to

19

Principal Risks

continued

• exist. The management team

• purchase. The group also disposes
• f businesses that no longer fjt

• f its investments during the

• grow. Additionally, there is a risk that a newly

• ther mobile devices and the

• Internet. Print circulation is declining and a failure to

• f customers.

• nline revenues are important, the group’s

• income. For example, the group generates a

20

• f the group in an effjcient manner; however,

• n the fjnancial results.

• f a new acquisition.

21

• resilient. Emerging markets, which account for

• ffset the declines experienced in advertising

• perating

• perating

Operating Review

22

• high. However, the group’s emerging market

• fmat. The adjusted operating margin fell two

• f Mining Indaba in July 2014, which achieved

• f both its revenues, including approximately a

• verseas profjts. While it endeavours to match

• verseas profjts.

• f

• ut in notes 13 and 14 to the group fjnancial

23

• f £0.3m from its 48.4% associate interest in

• ffset the group’s share of profjts from the

• n time and budget during the summer.

• capability. The group has an active graduate

Operating Review

continued

24

• n telecoms companies, M&A activity and

• ffering best practice tools and techniques to

• purposes. Headcount has fallen by 23 since

BCA Research

BCA Research has continued to innovate its product offerings both in terms of content and digital solutions and launched during the year:

• workfmows. It is an investment

25

• perating profjt. This partly refmects a £2.5m

• back. The adjusted effective tax rate for the

• acquisitions. The tax rate in each year depends

Financial Review

• f £29m.

• goodwill and other intangibles assets – there were no acquisitions in the year adding to goodwill and acquired intangible assets. The movement

• Property, plant and equipment – certain freehold and leasehold properties were sold as part of the relocation of the group’s London offjces

• Investments – includes three minority investments in fjnancial technology companies and disposals of Capital DATA and Capital NET (see pages

• acquisition commitments and deferred consideration – the decrease is due to the deferred consideration payment of £11.6m for Insider

• deferred income – the underlying movement excluding exchange differences fell by £2.6m mainly due to the disposal of the Institutional Investor

• ther non-current assets and liabilities – includes the decrease of £2.9m in the pension defjcit.
• ther current assets and liabilities – includes a debtor of $21.2m (£14m) for preference shares held as part of the disposal of Capital DATA
• ffset by accruals for the rent free periods on the new leases in the London offjce and movements on the marked to market valuation of short-term

26

• f £10.6m following the group’s London offjce
• move. This was offset by net acquisition and

• f options under CAP 2010 triggered cash
• utfmows of approximately £9m for which the

• f its adjusted after-tax earnings by way of
• dividends. In line with its policy, the board

• ut in note 18 to the group fjnancial statements.

• f

27

• rganic growth. People are empowered not only

• f

• background. Diversity will continue to be a

• f gender is good within the group, with 47%
• f employees being female (2014: 47%), there

• r

• results. Training and development are the

• f which is to build internal networks and

• initiatives. Examples of these are:
• Management Development Programme

• Hackathon: the group ran its second hack

• judges. The group sees this kind of event as

Corporate and Social Responsibility

14

161

2,168

28

• Graduate Programme: graduate trainee

• n-the-job training with classroom-based

• DMGT’s

• ut in the Directors’ Remuneration Report.

• pollution. It does not print products in-house or

• monitored. For instance, the group’s two biggest

• wn charitable budget, individual employee

29

• standards. Companies in the FTSE4Good Index

• f risks and uncertainties that could cause actual

• therwise required by applicable law, regulation
• r accounting standards, the directors do not

• r otherwise. Nothing in this document shall be

• whole. It has been prepared solely to provide

Corporate and Social Responsibility

continued

Euromoney climbs Kilimanjaro for Haller

• ne of the company’s supported charities.

• ffjce breakfast deliveries, garden fete, a quiz night, an online auction and golf day.

30

Board of Directors

• f Reuters, the news division of Thomson

• 2012. He was previously the director responsible

• 1984. She is managing director of Institutional

• Inc. in October 2006.

• f the remuneration and nominations

• 2015. He is senior adviser of Allen & Company

• companies. He was formerly non-executive

• f Daily Mail and General Trust plc in 2008. He

• f

• ver 20 years of experience as an advisor,

• f it in Asia. He has been a member of the

• f the company at the AGM on January 28 2016.

31

Directors’ Report

• f this report (together with the sections of the

• f the matters required by legislation have been

• year. Pursuant to this policy, the directors

• rdinary share (2014: 16.00p), payable on

• rdinary shares of 0.25p each. At September

• ne share of the company’s dividends. There

• r control rights between existing shareholders

• f securities (shares or loan notes) or on voting

• bid. None of these agreements is deemed to

• n the business of the group as a whole. The

• f the company than created by the initial

• f the directors’ entitlement to compensation

• f

• f shares

32

• regulations. External health and safety advisors

• pportunities for the career development,

• ther matters discussed in connection with

• f accounting in preparing this Annual Report.

• Financial instruments (note 18)
• Related party transactions (note 28)

• perations and the following emission sources: Scope 1 and 2 (as defined by the GHG Protocol), business travel and outsourced delivery activities.

33

Directors’ Report

continued

• 31. On April 9 2015, the group announced

• rdinary shares of the company and of options

• rdinary resolution, the board may also remove

• n November 19 2015, CHC Fordham,

• ffer themselves for re-election. In addition,

• company. Under the provisions of QTPI the

34

• f the company for that period. In preparing

• select suitable accounting policies and

• make

• state whether applicable IFRSs as adopted

• all

• prepare

• n

• ther irregularities.

• website. Legislation in the United Kingdom

• the fjnancial statements, are prepared

• the Strategic Report and the Directors’

35

Corporate Governance

• n November 19 2015 (see page 37), CHC

• f Daily Mail and General Trust plc (DMGT),

36

• meetings. Board meetings take place in

• n the company’s website. The discussions of

• n September 30 2015 and A Rashbass was

• the chairman of the board be changed to

• A Rashbass’s role as executive chairman be

• ffjcer;
• A Rashbass to step down as chairman
• f the nominations committee and JC

• f the nominations committee until an

• CHC Fordham to step down from the

• the number of executive directors on the

• f the new independent non-executive

• ut in the Strategic Report on page 28.

• verall level of remuneration and remuneration

• n directors’ service contracts are set out in the

37

Corporate Governance

continued

• n the group. The committee reports on its
• perations to the board to enable the directors

• systems. During the year the risk committee

• meetings. The group’s treasury policies are

• ut in the Strategic Report on page 27.

• ther occasions as necessary.

• f nine years under the Code and the board

• n decisions taken by the board, nor does it

• More training on regulatory and compliance

• Completion of embedding the strategy into

• f the board and executive committee to

38

• Communication between the nominations

• improved. During 2015 all the non-

• While many directors felt that risks were

• versight of the company would be better

• shareholders. Meetings with shareholders are

• f the board develop an understanding of the

• versight of risk, the group’s system of internal

• perational and compliance controls. The

• ffjces. As a result, local controls are weaker,

• verstatement in profjt, the following steps were

• matter. As a result the board was satisfjed with

• pportunities for improvement has been, and

• n pages 15 to 21.

39

Corporate Governance

continued

• the board normally meets six times a year to

• issues. The board met seven times in 2015;
• the board has overall responsibility for the

• each executive director has been given

• the board reviews and assesses the group’s

• utlined on pages 14 to 21;
• the board seeks assurance that effective

• the board approves the annual forecast

• factors. Performance is monitored regularly

• quarter. The board considers longer-term

• duties. The group’s tax, fjnancing and foreign

• ver the security of data and disaster recovery

• business. Businesses and central departments

• f external audit work, the departments and

• ne another, as appropriate, with members

• board. This ensures that matters of mutual

• monitoring the integrity of the interim

• ther related formal statements, reviewing

• reviewing the content of the Annual Report

• n whether, taken as a whole, it is fair,

• considering the effectiveness of the group’s

40

• considering

• r

• monitoring and reviewing the external

• monitoring and reviewing the resources

• reviewing the internal audit programme

• reviewing the whistle-blowing arrangements

• reviewing the group’s policy on the

• reviewing the group’s policy on non-audit

• f a group’s fjnancial statements is for the

• understandable. The co-ordination and review
• f the group-wide input to the Annual Report

• early preparation by management and

• f the annual report, particularly those

• comprehensive

• knowledge sharing by management of

• a twice yearly review by the audit committee
• f key assumptions and judgements

• recognition of a goodwill impairment charge of £2.9m on the basis of

• the group, in its preparation of these fjnancial statements at September

41

Corporate Governance

continued

• that the disposal and subsequent acquisition had commercial substance,

• this investment has been equity accounted as an associate under IAS 28

• the calculation of the £48.4m profjt on disposal of Capital NET and

• locations. This inherently leads to higher complexity to the group’s tax structure

• calculated. The chairman of the audit committee also attends

• ption pricing model at the grant date is expensed on a straight-line basis
• ver the expected vesting period, based on the estimate of the number of

• levels. They also discussed matters not provided against to establish

42

• AGM. To ensure a smooth handover process

• f the 2014 year end process, giving them a

• f their in-scope businesses and mobilisation
• f their global audit teams. The company and

• pen communication on current matters as and

• f the external audit. The assessment of the

• ut the key areas of the audit process for the

• process. As this is PwC’s fjrst year, the committee

• audited. The peer reviews audit the operation
• f key internal controls which have been

43

Corporate Governance

continued

• continuity. Internal audit are also subject to

• f which are fed back to the committee.

• the risks which the committee believes

• n the group;
• the impact of those risks and proposed

• the group risk register and risk registers

• reports on any material risk incidents and

• the

• verall

• the

• ther

44

• f the Code as set out below. Following the changes to the board announced on November 19 2015 it is the Company’s intention that the board

• criteria. The company is undertaking a search for an independent non-executive chairman and

• f responsibility within the board such that no one individual has unfettered powers of decision.

• f independent directors.

• Code. As explained on page 44 the role and responsibilities of the risk committee, including

• directors. The committee comprises three non-executive directors, only one of whom is considered

45

Directors’ Remuneration Report

Report from the chairman of the remuneration committee

• the report from the chairman of the

• the policy report which outlines the

• the annual report on remuneration which

• A base salary of £750,000 per annum,

• ur employees.
• A pension allowance of 10% of salary

• An annual bonus with a maximum value of

• Committee. The performance measures will

• priorities. For fjnancial year 2016, these

• An annual award of shares under the

• f the company’s 2015 fjnancial results.

• n the achievement of an adjusted EPS

• employment. This was considered to be no

• f the incentives foregone by Mr Rashbass

• n October 1 2015. Subject to continued

• provides

• f shareholders through the signifjcant

• refmects best practice in a number of key

• was appropriate to secure the appointment
• f an executive as experienced and skilled

46

• f

• f the committee are non-executive directors
• f the company. MWH Morgan is the chief

• matter. Guidance was sought from Deloitte on

• btaining advice on a suitable, competitive

• considering the impact of the assumption

• f senior executives;
• confjrming that salaries of the executive

• approving the average annual pay increase

• f 2%; and
• approving the annual profjt shares for the

• f the group for fjnancial year 2015.

• n page 49 the group’s remuneration policies

• f the Strategic Report similarly contribute

• perational objectives.

47

• n June 1 2015 and can be found on the

• f base salary was introduced for the CEO

• f management with those of shareholders.

• bjectives and with the creation of sustainable

• remuneration. In formulating its directors’

• Part of an overall market competitive pay package with salary generally not the most signifjcant part of a director’s
• verall package.
• Refmect the individual’s experience, role and performance within the company.
• peration
• Paid monthly in cash.
• Normally reviewed by the remuneration committee in April each year.

• The Remuneration Committee examines salary levels at FTSE 250 companies and other listed peer group companies to

• There is no prescribed maximum employee salary level. The approach to setting base salary increases across the group

Directors’ Remuneration Report

Remuneration policy report

48

• Basic benefjts are provided as part of a market competitive pay package.
• peration

• Private healthcare;
• Life insurance; and
• Overseas relocation and housing costs.

• Benefjts are available to all directors and employees subject to a minimum length of service or passing a probationary

• All executive directors participate in the healthcare scheme offered in the country where they reside. There is no

• Retirement benefjts are provided as part of a market competitive pay package.
• peration
• Directors may participate in the pension arrangements applicable to the country where they work.
• A director who elects to cease contributing to a company pension scheme due to changes in tax or pension legislation

• All directors and employees are entitled to participate in the same pension scheme arrangements applicable to the

• Profjt share links the pay of those executive directors to whom it relates directly to the growth in profjts of their
• businesses. It encourages each director to grow their profjts, to invest in new products, to search for acquisitions, and

• Profjt shares are designed to maximise sustainable profjts with no guaranteed fmoor and no ceiling.
• Profjt shares are expected to make up much of a director’s total pay and encourage long-term retention.
• peration
• Profjt shares are paid in full in the fjnancial year following the year in which they are earned. In exceptional circumstances

• There is no deferral of profjt share.
• There is no guaranteed fmoor or ceiling on profjt shares earned.
• Profjt shares are calculated after charging the cost of funding acquisitions at the group’s actual cost of funds.
• Each director’s profjt share is subject to audit and to Remuneration Committee approval, and can be revised at any time

• Gains or losses on the disposal of capital assets, including subsidiaries and investments, are not included in profjt shares;
• In the event of material misstatement relating to any information used in determining the amount of profjt share, or

• The profjt shares of each executive director for fjnancial year 2015 are reported in detail in the remuneration

• Incentives, including profjt shares, are an important part of the group culture. The directors believe they directly reward

49

Directors’ Remuneration Report

Remuneration policy report continued

• The Annual Bonus Plan links reward to key business targets and an individual’s contribution.
• The Annual Bonus Plan provides alignment with shareholders’ interests through the operation of bonus deferral.
• peration
• Any executive director may participate in the Annual Bonus Plan.
• The maximum award that can be made under the Annual Bonus Plan is 150% of salary. Each year the Remuneration

• Annual bonus payments will be paid in cash following the release of audited results and/or as a deferred award over

• Deferred awards are usually granted in the form of conditional share awards or nil-cost options (and may also be

• Deferred awards usually vest two years after award although may vest early on leaving employment or on a change
• f control (see later sections).
• An additional payment (in the form of cash or shares) may be made in respect of shares which vest under deferred

• The annual bonus payable is based on performance assessed over one year using appropriate fjnancial, strategic and

• Any annual bonus payout is ultimately at the discretion of the Remuneration Committee.
• The cash bonus will be subject to recovery, and / or deferred awards will be withheld, at the Remuneration Committee’s

• The Annual Bonus Plan will fjrst be operated in fjnancial year 2016 when the only director who will participate is the

• Incentive schemes, like the Annual Bonus Plan, are an important part of the group culture. The directors believe they

50

• Share schemes are an important part of overall compensation and align the interests of directors and managers with
• shareholders. They encourage directors to deliver long-term, sustainable profjt and share price growth.
• peration

• At the company’s AGM in January 2014, the directors received approval for a new long-term incentive scheme

• payment. No individual may receive an award over more than 5% of the award pool. In accordance with the terms of

• The primary performance test under CAP 2014 requires the company to achieve an adjusted profjt before tax (before

• period. Awards are granted under CAP 2014 to senior employees of acquired entities who have direct and signifjcant

• In the event of material misstatement relating to any information used in determining the vesting of CAP 2014 awards,
• r gross misconduct by an executive director, the board may claw back long-term incentives previously paid for a

• At the company’s 2014 AGM, the directors also received approval for a new CSOP

• ption is in the money at that time.

51

Directors’ Remuneration Report

Remuneration policy report continued

• At the company’s General Meeting in June 2015 shareholder approval was sought for the PSP

• The maximum annual award permitted under the PSP is shares with a market value of 200% of annualised basic
• salary. These awards will normally be subject to a performance period of fjve years. If the Remuneration Committee

• f control (see later sections). vesting of these awards will be based on fjnancial performance measures and/or strategic

• n the grant of each award. For achieving a threshold level of performance against a performance measure, no more

• All PSP awards may be granted as conditional awards of shares or nil-cost options (or, if appropriate, as cash-settled

• PSP awards will be subject to recovery and/or withholding at the Remuneration Committee’s discretion in exceptional

• Both the CAP and the PSP reward the creation of long-term shareholder value and are potentially available to all senior

• All-employee share schemes align staff with the group’s fjnancial performance and promote a sense of ownership.
• peration

• The group operates an all-employee save as you earn scheme in which those directors employed in the UK are eligible

• employees. Participants save a fjxed monthly amount of up to £500 (or such other limit as may be approved from time

• Daily Mail and General Trust plc, the group’s parent company, operates a share incentive plan in which all UK-based

• All employees based in the UK are entitled to participate in the Euromoney SAYE and DMGT SIP schemes.

52

• The Remuneration Committee may vary any

• Performance measures – The performance

• f key fjnancial targets for the relevant

• The Remuneration Committee intends to

• The Remuneration Committee reserves

• f the payment were consistent with the

• pinion of the Remuneration Committee,

• company. For these purposes “payments”

• The

• r administrative purposes or to take

• btaining shareholder approval for that

• The Remuneration Committee will operate

• f control/takeover or if the company

• n changes of control/takeovers does

• r where the acquiring company either

• therwise than on a change of control,

• r

• company. In the case of PSP awards,

• therwise, on a time pro-rated basis

• f that award.

• pinion

53

Directors’ Remuneration Report

Remuneration policy report continued

• f their overall remuneration package. The

• r more of the incentive plans outlined in the

• f executive directors” earlier in this Policy

• company. When structuring a buy-out award the

• r business, legacy terms and conditions would

• f the elements listed above for executive

• n

54

• f the non-executive directors has a service

• participant. In all other circumstances, awards

• f the performance period that has elapsed.

• f the individual’s employing business or

• utside the Group or any other reason at the

• cessation. However, if a participant is summarily

55

Directors’ Remuneration Report

Remuneration policy report continued

• Consists of total fjxed pay, including base salary, benefjts and pension.
• Base salary – salary effective as at October 1 2015.
• Benefjts – estimated value of £2,000.
• Pension allowance – amount expected to be received in FY2016 (10% of salary).

• No pay-out under the annual bonus.
• No vesting under the PSP

• 2/3rd of the maximum pay-out under the annual bonus.
• 50% vesting under the PSP

• 100% of the maximum pay-out under the annual bonus.
• 100% vesting under the PSP

56

57

Directors’ Remuneration Report

Annual report on remuneration

Directors’ Remuneration Report

Annual report on remuneration continued

• Salaries and fees include basic salaries and any non-executive directors’ fees. Salaries are reviewed in April each year. None of the executive directors

• utside the UK.
• Benefjts include private healthcare and costs in relation to private pension schemes.
• Pension amounts are those contributed by the company to pension schemes or cash amounts paid in lieu of pension contributions.
• Profjt shares are calculated as follows:

• f 2.97% (2014: 2.97%) to the adjusted pre-tax profjts. In addition, PR Ensor is entitled to 1.11% (2014: 1.11%) of adjusted pre-tax profjt in excess of a threshold of

58

59

Directors’ Remuneration Report

Annual report on remuneration continued

60

• a. Adjusted pre-tax profjts1 for that fjnancial

• i. if the primary performance condition

• f the initial vesting year to the start of

• ii. if the primary performance condition is

• b. the

• f

• f that made in the initial vesting year.

• f Mining Indaba in 2014, this profjt target was

• condition. If the secondary performance

• f cash will be equal to one-third of that which

• n June 20 2014 to approximately 150 UK

• f the group who have direct and signifjcant

• f £11.16 per share, the market value at the

• f £11.16, which will be satisfjed by a funding

• ut in note 23.

61

Directors’ Remuneration Report

Annual report on remuneration continued

• ption to subscribe for ordinary shares of 0.25p

• f grant using an option pricing valuation

• tranches. The fjrst tranche became exercisable

• exercisable. The options lapse to the extent

• ut in note 23.

• ut in note 23.

• participate. Employees can contribute up to

• 1. Adjusted pre-tax profjts are presented before the

• 2. The net gain on the CSOP options is the market

• 3. The Canadian version of the CSOP 2010 had a

62

• f year

• f year

• respectively. There were 1,104 options granted during the year (2014: 105,925).

63

Directors’ Remuneration Report

Annual report on remuneration continued

• f year

• ptions

• n date of

64

• rdinary shares of

• rdinary shares of

65

Directors’ Remuneration Report

Annual report on remuneration continued

• f pension

66

67

Directors’ Remuneration Report

Annual report on remuneration continued

• f total

• pportunity

• ptions)

• pportunity

• pportunity

68

• arrangements. The committee consults with key investors prior to any major changes in its remuneration arrangements.

• Directors’ salaries from October 1 2015 are as set out on page 57. These salaries will be reviewed in April 2016.
• Benefjts will also be reviewed during the year although it is not anticipated that any signifjcant changes will be made.
• The profjt share arrangement for each director will be as described on page 58. Profjt share thresholds are subject to review during the year.

• Directors will continue to be able to participate in the pension schemes operated in the country in which they reside.

69

Independent Auditor’s Report

to the members of Euromoney Institutional Investor PLC

• Euromoney Institutional Investor PLC’s group financial statements

• the group financial statements have been properly prepared in

• the company financial statements have been properly prepared in

• the financial statements have been prepared in accordance with the

• the Consolidated Statement of Financial Position as at September 30

• the Company Balance Sheet as at September 30 2015;
• the Consolidated Income Statement and Consolidated Statement of

• the Consolidated Statement of Cash Flows for the year then ended;
• the Consolidated Statement of Changes in Equity for the year then

• the notes to the financial statements, which include a summary of

• f the group financial statements is applicable law and IFRSs as adopted

• Accounting for acquisitions and disposals
• Carrying value of goodwill and acquired intangibles
• Uncertain tax positions
• Share-based payments

• f material misstatement in the group and company financial statements.

• pening balance sheet at October 1 2014.

• ur audit to address these specific areas in order to provide an opinion on

70

• f cash, £13.5m of redeemable preference shares and a 15.5% minority

• That the disposal and subsequent acquisition had commercial

• That the investment in Dealogic should be accounted for as an

• The calculation of the £48.4m profit on disposal of Capital NET and

• stake. We considered the requirements of IAS 28 in circumstances

• f the transaction to the shareholders’ agreement and articles of

• To impair the group’s acquired goodwill by £2.9m, leaving a remaining

• To reverse the £3.5m acquisition commitment held at October 1 2014

• f the shares remain legally held by the NCI investors.

71

Independent Auditor’s Report

to the members of Euromoney Institutional Investor PLC continued

• f significant judgements and estimates including profit growth, cash

• ur own risk assessment by considering historical performance,

• ther CGUs. We considered the need for additional sensitivity disclosures

72

• Canada. In addition, from time to time the group enters into transactions

73

Independent Auditor’s Report

to the members of Euromoney Institutional Investor PLC continued

• ver significant balances and transactions were performed at a further

• coverage. None of the reporting units not included in our group audit

• f their complete financial information due to their size. In light of the

• ver cash, Tipall Limited over fixed assets and Euromoney Institutional

• ver goodwill and intangible assets, acquisitions and disposals, treasury,

• f the group’s profit before tax, adding back certain non-recurring items.

74

• verall group materiality

• statements. The going concern basis presumes that the group has

75

Independent Auditor’s Report

to the members of Euromoney Institutional Investor PLC continued

• Information in the Annual Report is:

• the directors’ confirmation in the Annual Report, in accordance with provision C.2.1 of the Code, that

• the disclosures in the Annual Report that describe those risks and explain how they are being managed
• r mitigated.

• the directors’ explanation in the Annual Report, in accordance with provision C.2.2 of the Code, as

76

• ur opinion:
• we have not received all the information and explanations we require

• adequate accounting records have not been kept by the company, or

• the company financial statements and the part of the Directors’

• pinion

• ur opinion, certain disclosures of directors’ remuneration specified by

• n page 35, the directors are responsible for the preparation of the financial

• whether the accounting policies are appropriate to the group’s and

• the reasonableness of significant accounting estimates made by the

• the overall presentation of the financial statements.

77

Consolidated Income Statement

for the year ended September 30 2015

• perating profit before acquired intangible amortisation, long-term

• perating profit

78

Consolidated Statement of Comprehensive Income

for the year ended September 30 2015

• ther comprehensive income/(expense) for the year

79

Consolidated Statement of Financial Position

as at September 30 2015

80

Consolidated Statement of Changes in Equity

for the year ended September 30 2015

• ther

• wn

81

Consolidated Statement of Cash Flows

for the year ended September 30 2015

• perating cash flows before movements in working capital

82

Note to the Consolidated Statement of Cash Flows

as at September 30 2015

83

Notes to the Consolidated Financial Statements

• IFRS 10 ‘Consolidated Financial Statements’. This standard builds
• n existing principles by identifying the concept of control as the

• IFRS 11 ‘Joint Arrangements’ provides for a more realistic refmection
• f joint arrangements by focusing on the rights and obligations of

• IFRS 12 ‘Disclosure of Interests in Other Entities’ includes the

• IAS 27 (revised) ‘Separate Financial Statements (2011)’ now contains

• IAS 28 (revised) ‘Investments in Associates and Joint ventures (2011)’

• Amendments to IAS 32 ‘Offsetting Financial Assets and Financial

• Amendments to IFRS 10, 11, and 12 on transition guidance clarify the

• Amendments to IFRS 10, IFRS 12 and IAS 27 on ‘Consolidation for

• entities. The amendments do not have an effect on these consolidated

• Amendments to IAS 36 on ‘Recoverable Amount Disclosures for

• Amendments to IAS 39 on ‘Novation of Derivatives and Continuation
• f Hedge Accounting’ provide relief from discontinuing hedge

• IFRS 9 ‘Financial Instruments’ – not yet adopted by the EU
• IFRS 15 ‘Revenue from Contracts with Customers’ – not yet adopted

• Amendments to IAS 38 on Intangible Assets
• Annual Improvements 2010-2012 Cycle
• Annual Improvements 2011-2013 Cycle
• Annual Improvements 2012-2014 Cycle

84

• f one year.

85

Notes to the Consolidated Financial Statements

continued

• f the joint venture or associate.

• f the joint venture or associate recognised at the date of acquisition

• verseas undertakings, are taken to equity together with the exchange

• ver term of lease

• ver term of lease

• ver the net fair value of identifiable assets and liabilities acquired.

• f the cash generating unit is less than its carrying amount, then the

• n a pro rata basis. Any impairment is recognised immediately in the

• An asset is created that can be identifjed (such as software or a

• It is probable that the asset created will generate future economic

• The development cost of the asset can be measured reliably.

86

• f their fair value at acquisition. An intangible asset will be recognised

• r straight-line basis as appropriate over their expected useful lives at the

• terms. More information on impairment is included in the impairment of

• n which the group commits to purchase or sell the asset. All financial

• ther income when the group’s right to receive payments is established.

87

Notes to the Consolidated Financial Statements

continued

• signifjcant fjnancial diffjculty of the issuer or obligor;
• a breach of contract, such as a default or delinquency in interest or

• the group, for economic or legal reasons relating to the borrower’s

• it becomes probable that the borrower will enter bankruptcy or other

• the disappearance of an active market for that fjnancial asset because
• f fjnancial diffjculties; or
• bservable data indicating that there is a measurable decrease in the

• i. adverse changes in the payment status of borrowers in the

• ii. national or local economic conditions that correlate with defaults
• n the assets in the portfolio.

• r

88

• f the hedge fixed rate borrowings attributable to interest rate risk are

• f the cost of the asset. The deferred amounts are ultimately recognised

• Statement. When a forecast transaction is no longer expected to occur,

• value. These discounts are unwound and charged to the Income

89

Notes to the Consolidated Financial Statements

continued

• f Comprehensive Income and equity.

• n a net basis.

• plc. As there is no contractual agreement or stated policy for charging the

• scheme. The liability recognised in the Statement of Financial Position in

• btained at least triennially and are updated at each balance sheet date.

• f Comprehensive Income in the period in which they occur.

90

• Advertising revenues are recognised in the Income Statement on the

• Subscription revenues are recognised in the Income Statement on a

• Sponsorship and delegate revenues are recognised in the Income

• rdinary shares held by the Euromoney Employees’ Share Ownership Trust

• rder to provide an indication of the underlying trading performance of

• CIE. The acquisition goodwill has been subject to an impairment charge
• f £2.9m (note 5). The group, in preparation of these financial statements

91

Notes to the Consolidated Financial Statements

continued

• That the disposal and subsequent acquisition had commercial

• This investment has been equity accounted as an associate under IAS

• The calculation of the £48.4m profjt on disposal of Capital NET and

• f deferred consideration that is likely to be paid, particularly in relation

• f Financial Position with a corresponding decrease in reserves. Each

• r expense in the Income Statement. The discounts are unwound as a

• f grant, calculated using an appropriate option pricing model. This

92

• f certain items whose tax treatment cannot be finally determined

• f these items may give rise to material profit and loss and/or cash flow

• locations. This inherently leads to a higher than usual complexity to the

• f the group and it is often dependent on the efficiency of the legislative

• f tax liabilities for an accounting period include payments on account

• structure. The group is organised into four business divisions: Research

• f the training division as compared to other divisions. As a result the

93

Notes to the Consolidated Financial Statements

continued

94

• perating profit1

• perating profit before acquired intangible

• perating profit

• ther segmental information

95

Notes to the Consolidated Financial Statements

continued

• perating profit

96

• perating profit is stated after charging/(crediting):

• f Deloitte Touche Tohmatsu Limited.

97

Notes to the Consolidated Financial Statements

continued

• f the group’s London headquarters, and professional fees resulting from the CIE dispute.

• n disposal of MIS Training offset by exceptional acquisition costs, restructuring and property costs, and impairment of carrying value of associate. The

98

99

Notes to the Consolidated Financial Statements

continued

100

• ther comprehensive income

101

Notes to the Consolidated Financial Statements

continued

102

103

Notes to the Consolidated Financial Statements

continued

• budgets by business based on pre-tax cash fmows with a CAGR of 3% to 25% for the next four years derived from approved 2015 budgets.

• subsequent cash fmows for one additional year increased in line with growth expectations of the applicable businesses;
• pre-tax discount rates between 12.3% and 13.8%, derived from the company’s benchmarked weighted average cost of capital (WACC) of 10.7%

• long-term nominal growth rate of between 2% and 3%.

104

• f goodwill included in the net book value above relate to BCA.

• the fjve year pre-tax cash fmows decreased by 12%;
• the discount rate increased by 2%;
• the long-term growth rate reduced by 4%.

• ffice

105

Notes to the Consolidated Financial Statements

continued

106

• f results in associates and joint ventures

• f holding

• 1. In December 2014 the group acquired 15.5% of the equity share capital with 20% voting rights in Dealogic, a company incorporated by the Carlyle
• Group. Dealogic provides data and analytics, market intelligence and capital markets software solutions to investment banks to help them manage

• 2. In April 2015 the group acquired 40% of the equity share capital of WBWE for a consideration of €1.3m (£0.9m). WBWE is the biggest event in the

• 3. In November 2014 the group set up a new joint venture with Zanbato Inc. with each owning 50% equity share capital in II Zanbato.
• 4. In December 2014 the group acquired 50% of the equity share capital of Sanostro for a cash consideration of £34,000. Sanostro provides hedge

• 5. In July 2015 the group acquired 10% of the equity share capital of Estimize for a cash consideration of $3.6m (£2.3m). Estimize provides a fjnancial

• 6. In September 2015 the group acquired 9.9% of the equity share capital of Zanbato for a cash consideration of $5.4m (£3.5m). Zanbato is an

107

Notes to the Consolidated Financial Statements

continued

108

• n the price paid by other third party investors in Dealogic. IAS 28 requires that where a non-monetary asset is contributed to an associate for an equity

109

Notes to the Consolidated Financial Statements

continued

• f the underlying service.

• f £11.2m. This reclassification has no impact on net assets.

110

• recoverable. These relate to a number of independent customers for whom there is no recent history of default. The average age of these receivables

111

Notes to the Consolidated Financial Statements

continued

112

113

Notes to the Consolidated Financial Statements

continued

• ffsetting criteria of IAS 32, but which the group has the right to setoff same currency cash flows settled on the same date. Consequently, the gross

• ffsetting criteria of IAS 32 are setoff, resulting in the presentation of a net derivative asset of £8.1m (2014: £8.6m) in the group’s Statement of Financial

• movements. Derivatives are used to hedge or reduce the risks of interest rate and exchange rate movements and are not entered into unless such risks
• exist. Derivatives used by the group for hedging a particular risk are not specialised and are generally available from numerous sources. The fair values
• f interest rate swaps and forward exchange contracts are set out in this note and represent the value for which an asset could be sold or liability settled

114

• months. The timing and value of these forward contracts is based on management’s estimate of its future US dollar and euro revenues over an 18 month

• f a reasonably possible change in foreign exchange rates at the reporting date.

• f these results. Consequently, fluctuations in the value of sterling versus other currencies could materially affect the translation of these results in the

• peration’s net assets from their translation into sterling.

115

Notes to the Consolidated Financial Statements

continued

116

• arise. Allowance is made for bad and doubtful debts based on management’s assessment of the risk of non-payment taking into account the ageing

• f credit risk did not exceed 5% of gross monetary assets at any time during the year.

• f foreign exchange. Exceeding the covenant would result in the group being in breach of the facility potentially resulting in the facility being withdrawn
• r impediment of management decision making by the lender. Management regularly monitors the covenants and prepares detailed cash flow forecasts

• perations covers operating profit before acquired intangible amortisation, long-term incentive expense and exceptional items) of 100% or more due

• flows. To the extent that the interest rates are floating, the undiscounted amount is derived from interest rate curves at September 30 2015. The

117

Notes to the Consolidated Financial Statements

continued

118

• The fair value of fjnancial assets and fjnancial liabilities with standard terms and conditions and traded on active liquid markets is determined with

• The fair value of other fjnancial assets and fjnancial liabilities (excluding derivative instruments) is determined in accordance with generally accepted

• Foreign currency forward contracts are measured using quoted forward exchange rates and yield curves derived from quoted interest rates matching

• Interest rate swaps are measured at the present value of future cash fmows estimated and discounted based on the applicable yield curves derived

• If one or more signifjcant inputs are not based on observable market date, the instrument is included in level 3.

119

Notes to the Consolidated Financial Statements

continued

• perations covers operating profit before acquired intangible amortisation, long-term incentive expense and exceptional items) of 100% or more due

120

• nerous

• ther

• ther

121

Notes to the Consolidated Financial Statements

continued

• ther

• ther short-term temporary differences:

• arose. The US losses have expiry dates between 2015 and 2030.

• future. The temporary differences at September 30 2015 represent only the unremitted earnings of those overseas subsidiaries where remittance to

122

123

• ption

Notes to the Consolidated Financial Statements

continued

124

• estimate. The CAP award is reduced by the number of options vesting under the respective CSOP schemes (see the Directors’ Remuneration Report

• f the group’s share price over a period of three years. The expected term of the option used in the model has been adjusted, based on management’s

125

Notes to the Consolidated Financial Statements

continued

• rdinary share, and a right to receive a cash payment.

• f vesting. Because of the above and the other direct links between the CSOP 2014 and the CAP 2014, including the identical performance criteria,

• Statement. The group regularly performs a review of the underlying businesses to assess the impact on the fair value of the contingent consideration.

126

127

Notes to the Consolidated Financial Statements

continued

• arrangements. DMGT PensionSaver is a group personal pension plan and is the principal pension arrangement offered to employees of the group.

• f 10% of salary. Assets are invested in funds selected by members and held independently from the company’s finances. The investment and

128

• employees. The scheme is closed to new members.

• provider. Employees are able to contribute up to 50% of salary (maximum of US$52,000 a year) with the company matching up to 50% of the

• f shares bought back. Contributions of £14.4m relating to this agreement were made in the year to September 30 2015.

129

Notes to the Consolidated Financial Statements

continued

• bligation

130

• bligation

131

Notes to the Consolidated Financial Statements

continued

132

• ver

• f the company’s magazines, International Commercial Litigation, in November 1995. The writs were served on the company on October 22 1996.

• f these writs.

133

Notes to the Consolidated Financial Statements

continued

• vii. NF Osborn serves as an advisor to the boards of both DMG Events and dmgi, fellow group companies, for which he received a combined fee of

• viii. During the year the group received dividends from its associate undertakings:

134

• the chairman of the board be changed to a non-executive role and that JC Botts be appointed as the non-executive chairman in an interim capacity

• A Rashbass’s role as executive chairman be changed to the new role of chief executive offjcer;
• A Rashbass to step down as chairman of the nominations committee and JC Botts to replace A Rashbass as chairman of the nominations committee

• CHC Fordham to step down from the nominations committee; and
• the number of executive directors on the board to reduce and accordingly CHC Fordham, NF Osborn, JL Wilkinson, DE Alfano and B AL-Rehany not

135

Notes to the Consolidated Financial Statements

continued

136

137

Notes to the Consolidated Financial Statements

continued

138

Company Balance Sheet

As at September 30 2015

139

Notes to the Company Accounts

• ver term of lease.

• bligation at the balance sheet date to pay more tax, or a right to pay

• value. Recognition of gains or losses on derivative instruments depends
• n whether the instrument is designated as a hedge and the type of

140

• model. The fair value determined at the grant date is expensed on a

• f these options updated. In accordance with the transitional provisions,

• f application of FRS 20.

141

Notes to the Company Accounts

continued

• f Deloitte Touche Tohmatsu Limited.

142

143

Notes to the Company Accounts

continued

• nerous

• n leasehold

• n leasehold

144

• Deferred tax credit in the profit and loss account

• f shares under option, the fair value per option granted and the assumptions used to determine their values are given in note 23 to the group accounts.

• f expected future dividend streams up to the date of expected exercise. The expected term of the option used in the models has been adjusted, based
• n management’s best estimate, for the effects of non-transferability, exercise restrictions and behavioural considerations. The share-based expense

• ptions are set out in note 23 to the group accounts (excludes cash-settled options).

• f expected future dividend streams up to the date of expected exercise. The expected term of the option used in the models has been adjusted, based
• n management’s best estimate, for the effects of non-transferability, exercise restrictions and behavioural considerations. The share-based expense

145

Notes to the Company Accounts

continued

• perating leases which expire:

• ther

• wn

146

147

Notes to the Company Accounts

continued

• the chairman of the board be changed to a non-executive role and that JC Botts be appointed as the non-executive chairman in an interim capacity

• A Rashbass’s role as executive chairman be changed to the new role of chief executive offjcer;
• A Rashbass to step down as chairman of the nominations committee and JC Botts to replace A Rashbass as chairman of the nominations committee

• CHC Fordham to step down from the nominations committee; and
• the number of executive directors on the board to reduce and accordingly CHC Fordham, NF Osborn, JL Wilkinson, DE Alfano and B AL-Rehany not

148

149

Five Year Record

• perating profit before acquired intangible amortisation,

• perating profit

150

Shareholder Information

151

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