21 Jun 2011 17:57
Yell Group plc ("Yell")
2011 Annual Report, Notice of Annual General Meeting and Proxy Card
The above documents were posted to shareholders on 21 June 2011.
In compliance with LR 9.6.1, all the above documents have been submitted to the UK Listing Authority via the National Storage Mechanism and will shortly be available to the public for inspection at www.hemscott.com/nsm.do.
These documents (with the exception of the Proxy Card) are also available to view on Yell's website at:
http://www.yellgroup.com/annualreport
The unaudited condensed set of financial statements for the year ended 31 March 2011, were published on 17 May 2011. These were prepared in accordance with International Financial Reporting Standards as adopted by the European Union ("IFRSs") and in accordance with the Listing Rules of the Financial Services Authority.
Set out below in this announcement is additional information reproduced for the purposes of compliance with the Disclosure and Transparency Rules, including principal risk and uncertainties, related party transactions, and a responsibility statement. This information is extracted from the audited Annual Report and financial statements for the year ended 31 March 2011, and therefore, page and note references relate to that document. This announcement should not be regarded as a substitute for reading the full Annual Report and financial statements.
ADDITIONAL INFORMATION
PRINCIPAL RISKS
In this section Yell sets out how it manages potential risks and uncertainties that could have a material effect on the Group's long term performance and could cause actual results to differ materially from historical results.
Risk management
Yell undertakes various activities within a risk management framework to ensure that risk and uncertainty are properly managed and that appropriate internal controls are in place.
• The directors have overall responsibility for establishing and maintaining the systems of internal control and risk management, and for reviewing their effectiveness. These systems are designed to manage, rather than eliminate, the risk of failure to achieve business objectives. The systems also provide reasonable, but not absolute, assurance against material misstatement or loss.
• Yell carries out an annual detailed risk assessment to formally identify and document the nature and extent of key operational and financial risks facing the Group. Yell considers the likelihood of these risks materialising and develops mitigation plans where it believes they are appropriate. This process has been in place for the reporting periods covered by this report and up to the date of approval of this Annual Report.
• Yell has developed a risk-based internal audit plan to evaluate the overall provision of assurance provided by the processes managing each key risk.
• The Audit Committee and senior management regularly review the risk assessment and internal audit plan.
• Yell has designed and implemented financial reporting controls in line with what it believes are best practices. The financial framework comprises processes that represent a set of coordinated tasks and activities, conducted by both people and IT systems, where significant classes of transactions are initiated, recorded, processed and reported. Yell has fully documented the systems, processes and key controls that produce financial reporting. Key controls are those controls that have a significant effect on reducing the risk of misstatement and will affect one or more financial statement assertions and reduce the risk of financial misstatement in relation to those assertions, to a relatively low level. Yell updates its documentation and tests the identified key controls annually. This testing is in addition to, and runs parallel with, the internal audit plan and risk assessment programme. Results of internal audit plan testing and testing of the key controls are provided to the Audit Committee for review.
• The Board, with advice from the Audit Committee, has completed its annual review of the effectiveness of the system of internal controls. In the Board's view, the information it received was sufficient to enable it to review the effectiveness of the Group's system of internal controls in accordance with the Internal Control Revised Guidance for Directors in the Combined Code (Turnbull) and the Board is satisfied that the system complies with that guidance.
Yell has outlined in the tables below the risks and uncertainties that it believes are principal. The tables are arranged to separate risks between those that are strategic in nature from those related to debt and financing. It is not possible to identify every risk that could affect Yell's business, and the actions taken to mitigate identified risks cannot provide absolute assurance that a risk will not adversely affect Yell's business or financial performance.
1. Strategic risk factors
Yell aims to deliver quality business leads to its advertisers, regardless of media channel, by continuing to meet the changing demands of advertisers and consumers, and by taking advantage of new technologies and communication methods. A significant part of Yell's revenue comes from selling advertising to small and medium-sized enterprises in markets where there is significant economic uncertainty.
2. Debt and financing risk factors
Net debt at 31 March 2011 was 5.5 times annualised pro forma adjusted EBITDA at consistent exchange rates compared with 4.9 times on the same basis at 31 March 2010. About £144m of Yell's long-term bank debt will contractually fall due on or prior to 31 March 2012. Details of the Group's borrowings are disclosed in note 18.
1. Strategic risk and potential effect | Mitigation |
Risk from: Changing technology and customer needs
At present the majority of Yell's revenue comes from printed classified directories, which is declining in importance. Increasingly, consumers are using a wider variety of channels to find local businesses, most notably the internet and mobile devices. Yell's future revenues will depend on its success in enhancing and expanding product offerings to meet changing demands.
Potential effect: Lost revenue and profits, asset impairments and funding issues
| Yell constantly monitors changes in technology and user preferences to ensure its channels remain the best place to search for local businesses. Accordingly, Yell continues to innovate and invest in line with these changing trends so as to improve all channels and products. Millions of users find Yell's advertisers each day through Yell's digital media, accounting for 24.3% of the Group's revenue. Looking forward, Yell expects usage behaviour to continue to change. Yell has seen mobile becoming increasingly popular and consequently, Yell has been actively improving its mobile offerings. Yell has begun selling its products in packages, which will broaden customers' product holdings and allow Yell to benefit from growth in usage whatever the channel.
Yell is currently undertaking a full strategic review to identify the market opportunities available in, and actions required to address, this changing environment.
|
Risk from: Increasing competition
Yell operates in competitive markets, competing for usage and advertiser spend against traditional print media, a host of internet search companies and many other businesses such as internet search optimisation and marketing agencies.
In the US, Yell faces particular competition from incumbent and independent directory publishers, who are increasingly competing on price.
Potential effect: Lost revenue and profits, asset impairments and funding issues
| Yell meets these challenges by maintaining close relationships with its customers through highly trained sales forces and by proving the excellent value of its products to its customers. Yell addresses competitive forces when they arise in all markets through product design, technological innovations, promotional techniques, pricing propositions and approach to sales; Yell intends, in particular, to manage and grow its digital media usage and revenue share. In all Yell markets the Group focuses on the value offered to advertisers relative to that offered by competitors.
Yell is currently undertaking a full strategic review to identify the market opportunities available in, and actions required to address, this changing environment.
|
Risk from: Economic uncertainty
In times of economic uncertainty and tight credit markets, many small and medium-sized businesses may spend less money on advertising than they have in the past.
Yell also operates in economies where it expects to grow market penetration. Economic uncertainty in those markets may affect this growth strategy.
Potential effect: Lost revenue and profits, asset impairments and funding issues
| The Group mitigates the effect of economic uncertainty by providing evidence of the value that the customer receives from advertising with Yell. Yell is also offering an increasing value in packaged products to strengthen its base and to increase retention rates.
Yell is currently undertaking a full strategic review to identify the market opportunities available in, and actions required to address, this changing environment.
|
2. Debt and financing risk and potential effect | Mitigation |
Risk from: Financial covenants
Yell has contractual debt obligations and covenants that reflect its level of borrowing. The financial covenants are described in the section 'Other risks' on pages 20 and 21. The debt cover covenant requires that the ratio of net debt at the testing date to adjusted EBITDA for the previous twelve month period should not exceed specific threshold ratios at specific test dates. These covenants tighten over time with a significant change taking place at 30 September 2011. There is a risk that in the future, the Group would need to reset its financial covenants with, or obtain a waiver from its lenders, either of which would require a two-thirds majority vote. If the Group were required but not able to reset its financial covenants with, or obtain a waiver from, its lenders such that undertakings to the Group's lenders were breached, the lenders' facility agent may, and must if directed by two-thirds of lenders (by reference to debt held) demand immediate repayment of all amounts due to them. Whilst this eventuality would, if it arose, cast doubt on the future capital funding of the Group, the Group's cash flow forecasts show that in the year ending 31 March 2012 interest payments will be fully met, with further cash generated to meet debt repayment obligations.
Potential effect: Debts falling due earlier than planned
| Yell is currently in full compliance with the financial covenants contained in its borrowing agreements. Yell actively monitors progress against the covenants and when required can take corrective action by cutting discretionary costs to reduce the risk of a breach occurring. The Group is cash generative and profitable.
Yell is currently undertaking a full strategic review to identify the market opportunities available in, and actions required to address, this changing environment.
|
Risk from: Refinancing debt
Yell has funded the business largely from cash flows generated from operations and bank debt in the form of term loans. Yell will require access to funding before 30 April 2014 in order to refinance its term loans, the vast majority of which mature at that time. Whilst Yell enjoys sound relationships with its lenders and is currently able to service its level of debt, there is a risk, given current global economic conditions, that the debt markets will remain fragile and sometimes illiquid, such that the cost of diversifying debt is relatively high and access is either restricted or not possible at all.
Potential effect: Payment default and insufficient cash to fund the working capital and investment needs of the business
| Yell recognises refinancing risk and continually monitors the financial markets for opportunities to diversify its debt portfolio.
Yell is currently undertaking a full strategic review to identify the market opportunities available in, and actions required to address, this changing environment.
|
OTHER RISKS
Treasury
Operations
The financial risks faced by the Group include liquidity, credit risk and the effects of changes in foreign currency exchange and interest rates. The primary role of Yell's treasury functions is to ensure that adequate liquidity is available to meet the Group's funding requirements as they arise and that financial risk arising from Yell's underlying operations is effectively identified and managed.
The treasury function also monitors the key objective of remaining within ratios covenanted with the lenders of its bank debt.
The treasury function is not a profit centre and its objective is to manage risk at optimum cost. Yell's treasury function conducts its operations in accordance with policies and procedures approved by the Board. Derivative financial instruments are executed only for hedging purposes, and transactions that would be speculative in nature are expressly forbidden.
There has been no change in the role that financial instruments have in creating or changing the Group's risk between 31 March 2011 and the date of these financial statements.
Capital management
Yell manages the capital requirements of the Group by maintaining leverage within the terms of its debt facilities agreement. Yell manages capital in order to safeguard the entity's ability to continue as a going concern, so that it can continue to provide returns for shareholders and benefits for other stakeholders, and to provide an adequate return to shareholders.
The Group sets the amount of capital in proportion to risk. The Group manages the capital structure and makes adjustments to it in the light of changes in economic conditions and the risk characteristics of the underlying assets. In order to maintain or adjust the capital structure, the Group may adjust the amount of dividends paid to shareholders, return capital to shareholders, issue new shares, or sell assets to reduce debt.
Consistently with others in the industry, the Group monitors capital on the basis of a debt-to-profit ratio. This ratio is calculated as net debt divided by adjusted profit. Net debt is calculated as total debt (as shown in the balance sheet) less cash and cash equivalents. Adjusted profit is twelve months' EBITDA adjusted for certain items defined by the lending institutions in Yell's Facilities Agreement.
The ratio has increased from 4.9 : 1.0 for the year ended 31 March 2010 to 5.5 : 1.0 for the year ended 31 March 2011.
Liquidity and funding
Yell maintains sufficient facilities to meet its normal funding requirements over the medium term. At 31 March 2011 Yell had access to an undrawn, committed revolving credit facility (subject to covenant adherence) of £193.2m until 30 June 2011, £173.9m until 30 June 2012, £165.2m until 30 June 2013 and £156.9m until 30 April 2014 that Yell could use to mitigate the potential operational risks. Yell also had cash of £200.5m at 31 March 2011. Yell believes that the Group has sufficient access to working capital to meet its operating and capital expenditure requirements in the 2012 financial year.
Yell has contractual debt obligations and related covenants that reflect its level of borrowing. The covenants could restrict Yell's flexibility in using its financial resources. These covenants include requirements for net cash interest cover and debt cover. The net cash interest cover covenant requires that the ratio of EBITDA (adjusted for exceptional items) for the latest twelve month period to net cash interest payable for the latest twelve month period does not fall below specific threshold ratios at specific test dates. The debt cover covenant requires that the ratio of net debt (excluding deferred financing fees and restated at the calculated average exchange rate for the relevant EBITDA, at the testing date) to EBITDA for the latest twelve month period should not exceed specific threshold ratios at specific test dates. The threshold ratios at 31 March 2011 for each test date until 30 June 2014 are as follows:
Test date | Cash interest cover ratio | Debt cover ratio |
31 March 2011 30 June 2011 30 September 2011 31 December 2011 31 March 2012 30 June 2012 30 September 2012 31 December 2012 31 March 2013 30 June 2013 30 September 2013 31 December 2013 31 March 2014 30 June 2014 | 1.66 : 1 1.69 : 1 2.06 : 1 2.14 : 1 2.25 : 1 2.27 : 1 2.32 : 1 2.40 : 1 2.49 : 1 2.55 : 1 2.63 : 1 2.73 : 1 2.84 : 1 2.91 : 1 | 7.50 : 1 7.62 : 1 6.23 : 1 5.99 : 1 5.72 : 1 5.37 : 1 5.08 : 1 4.85 : 1 4.60 : 1 4.32 : 1 4.10 : 1 3.98 : 1 3.77 : 1 3.66 : 1 |
Yell operated within its debt covenants for all periods presented in this financial information with headroom for the twelve month period ended 31 March 2011 of 26% on the cash interest cover ratio and 26% on the debt cover ratio. A discussion of the risks associated with the future tightening of debt covenants is presented on page 19.
Interest rates
Yell's policy is to minimise the exposure to fluctuating interest rates by ensuring an appropriate balance of floating and fixed interest rates. The Group's primary funding is through its senior credit facilities, on which interest is payable at floating rate based on LIBOR or EURIBOR plus a margin.
In order to manage the associated interest rate risk, Yell fixes a portion of its interest rates through hedging arrangements:
• At the end of each quarter Yell reviews its future interest payment obligations in assessing the appropriate amount of hedging for at least the next 27 months.
• Yell has fixed or capped interest rates on around 70% of its indebtedness under the term bank facilities until December 2011 and around 50% fixed or capped thereafter until December 2012.
• At 31 March 2011, Yell had £13.5m net mark-to-market liabilities primarily on interest rate swaps that will be recognised as an increase in interest expense when settled in the future if market interest rates remain unchanged.
Foreign currency exchange rates
The Group is exposed to currency fluctuations on the translation of its overseas operations into sterling. Yell mitigates this exposure by borrowing in the same currencies as its income generating assets. Group borrowings are drawn down in the principal currencies of its operations, namely US dollar, euro and sterling.
The Group does not currently intend to use derivative instruments to hedge any foreign exchange translation rate risk relating to foreign currency-denominated financial liabilities, although Yell will continue to review this practice.
Yell has operations in countries where the functional currency is not pounds sterling. Significant cash inflows and outflows associated with the Group's operations within a country are generally denominated in local currency to limit the risks of foreign exchange movements on the local results. However, in certain situations, some contracts have to be denominated in currencies other than the local functional currency. Yell uses derivative financial instruments to hedge transactional foreign exchange rate risk on significant transactions that are not denominated in local currency.
Counterparties
Cash deposits and the use of derivative financial instruments, including interest rate swaps, interest rate caps and forward foreign exchange contracts, for hedging purposes give rise to credit risk on amounts due from counterparties. Yell manages this risk by limiting the aggregate amounts and their duration, depending on the external credit ratings of the relevant counterparty.
Business operations
Insurance
Yell operates a policy of buying cover against material risks the business faces where it is possible to purchase such cover on reasonable terms. Where this is not possible, or where the risks would not have a material effect on the Group as a whole, Yell does not purchase third party insurance.
Key suppliers
Yell relies on suppliers who work in partnership with it to deliver its products. Yell has longstanding relationships with most of its key suppliers, the most important of which are its printing and paper suppliers UPM-Kymmene Corporation, Catalyst Paper, Inc., RR Donnelley, World Color Press, Inc. and Einsa Print International. Yell limits its exposure to market fluctuations through contracts and pricing arrangements with its paper and printing suppliers.
Sales force
Yell also relies on its sales force to drive revenue growth in its competitive markets. Yell uses profiling based on its most successful sales people to ensure it recruits those most likely to be successful. Yell aims to retain high-quality people through remuneration, training and development programmes. Yell is also investing in technologies to aid the sales force and to make it easier for customers to place advertisements with Yell.
Environmental regulation
Local governments in some of the Group's markets are considering initiatives that could limit or restrict Yell's ability to distribute printed directories or require Yell to bear the costs of and responsibilities for disposal of discarded directories. Yell is working with local governments, recycling networks, non-governmental organisations and charities both to educate them on the benefits and relevance of printed directories and to actively promote directory recycling.
UK regulation
In the 2011 financial year, 17% of the Group's revenue (Yellow Pages revenue in the UK) was subject to regulation, compared with 20% during the 2010 financial year. This regulation reduced Yell's ability to respond to competitive pressures by restricting its pricing flexibility. The price cap limited price increases to the prevailing rate of the UK retail price index (RPI). A review of the undertakings given by the Group to the UK's Competition Commission could take place in the coming year. Yell will continue to present its case that regulation is not justified in the prevailing competitive environment.
Financial reporting
Yell has quantified the risks arising from market fluctuations and its use of estimates under the heading 'Sensitivity analyses' at the end of this section.
Yell recognises revenue and costs directly related to sales, production, printing and distribution from advertisement sales for a printed directory edition when Yell has completed delivery of that directory edition. Because the number of editions and type of directories are not evenly distributed during the year or published in the same quarter every year, its revenue and profits do not arise evenly over the year:
• During Yell's 2011 financial year the four financial quarters accounted for, respectively, 24%, 24%, 24% and 28% of Group revenue.
• Different directories may grow at different rates, such that growth may not be evenly distributed between quarters.
• Yell sometimes needs to rephase its timing of distributions into a later period for operational reasons, such as when the Group re-scopes directories or integrates acquisitions.
The Group also make subjective and complex judgements, giving due consideration to materiality, when estimating inherently uncertain amounts included in the financial statements. Yell mitigates the risk of results being materially different by regularly reviewing its estimates and updating them when appropriate. A description of what Yell considers to be the most significant estimates are provided below. Actual results could be different, but Yell does not believe materially different unless otherwise indicated.
Bad debts
Yell reduces receivables by an allowance for amounts that may not be collectible in the future. Yell determines the allowance by estimating the future cash flows from the receivables based on historical loss experience. A receivable is written off against the provision when it is believed to be entirely uncollectible. Any monies recovered subsequent to write off are recorded as adjustments to the bad debt provision and considered in the historical loss experience.
Carrying value of goodwill
Yell reviews goodwill annually for impairment or whenever events or changes in circumstances indicate that the carrying amounts may not be recoverable, and at the end of the first full year following acquisition. Yell compares the carrying value of its operations to their estimated recoverable values to determine whether goodwill is impaired. Yell estimates the recoverable value using a discounted cash flow model that relies on significant key assumptions, including after-tax cash flows forecasted over an extended period of years, terminal growth rates and discount rates.
Yell is currently undertaking a full strategic review, and over the medium term Group EBITDA and cashflows are expected to return to growth as a result of substantial changes in the business. These changes include the development of material new income streams from consumer and SME products with margins that are expected to be lower than those historically earned in print. Therefore, the Group will require significantly higher revenues than have been historically achieved. If the expected benefits in the strategic plan either run later or in the aggregate deliver less than currently expected, then the Group may need to consider an impairment charge in the future.
Carrying value of long-lived tangible and intangible assets
Other non-current intangible assets and plant and equipment are long-lived assets that Yell amortises or depreciates over their useful lives. Useful lives are based on management's estimates of the period over which the assets will generate benefits. Yell reviews the values of property, plant, equipment and assets with indefinite lives annually for impairment. Yell reviews other non-current intangible assets for impairment whenever events or changes in circumstances indicate that their carrying amount may not be recoverable, and at the end of the first full year following acquisition. Historically, Yell has not reduced the value of these assets as a result of the impairment analyses, nor has Yell realised large gains or losses on disposals of property, plant and equipment.
Yell is currently undertaking a full strategic review, and over the medium term Group EBITDA and cashflows are expected to return to growth as a result of substantial changes in the business. These changes include the development of material new income streams from consumer and SME products with margins that are expected to be lower than those historically earned in print. Therefore, the Group will require significantly higher revenues than have been historically achieved. If the expected benefits in the strategic plan either run later or in the aggregate deliver less than currently expected, then the Group may need to consider an impairment charge in the future.
Pension liabilities
Yell closed its defined benefit scheme in the UK to future accrual on 31 March 2011, thus reducing Yell's exposure to future changes in salaries and employee service years. The determination of Yell's obligation, expense and contribution rate for pensions is dependent on the selection of assumptions that its actuaries use in calculating such amounts. Those assumptions include, amongst others, expected mortality rates of scheme members, the rate at which future pension payments are discounted to the balance sheet date, and inflation expectations. Differences in Yell's actual experience or changes in its assumptions can materially affect the amount of reported future pension obligations and future valuation adjustments in the statement of comprehensive income. Yell seeks expert actuarial advice in setting its assumptions.
Yell's defined contribution schemes are managed separately from the assets and liabilities of the Group and therefore do not expose the Group to any risk.
Pension assets
Yell values the portfolio of assets held by the UK defined benefit pension scheme at market value when calculating the net pension asset or deficit. Values will increase and decrease as markets rise and fall. The trustees and management have an agreed strategy to mitigate the risk of having insufficient funds, if markets fall. The trustees annually match the low-risk asset portfolio against the cash outflows for the following 12 years. Against longer-term cash payouts they match a combination of investments in index-linked gilts to mitigate inflation risk, and higher risk assets to get higher rates of growth. The trustees also work with management to ensure sufficient assets will be available to settle obligations extending beyond 12 years.
Taxation
The determination of Yell's obligation and expense for taxes requires an interpretation of tax law.
Yell recognises deferred tax assets and liabilities arising from temporary differences where Yell has a taxable benefit or obligation in the future as a result of past events. Yell records deferred tax assets to the extent that Yell believes they are more likely than not to be realised. Should Yell determine in the future that it would be able to realise deferred tax assets in excess of the recorded amount or that the liabilities are different to the amounts recorded, then Yell would increase or decrease income as appropriate in the period such determination was made.
Yell seeks appropriate, competent and professional tax advice before making any judgements on tax matters. Whilst Yell believes that its judgements are prudent and appropriate, significant differences in actual experience may materially affect future tax charges.
Sensitivity analyses
The following analyses illustrate the effect that specific changes to management's estimates could have had on Yell's results in the 2011 financial year. The analyses do not consider secondary effects or steps that could be taken to mitigate the primary effects and are only valid when all other factors are held constant. The estimated amounts generated from the sensitivity analyses involves risks and uncertainties. Caution should be exercised in relying on these analyses.
EBITDA would have been £18.8m higher or lower if the bad debt charge as a percentage of revenue had been 1% lower or higher, respectively. Operating profit would have been £16.0m higher or £23.0m lower if the useful economic lives of all intangible assets had been one year shorter or longer, respectively. Operating profit would have been £8.5m higher or £17.4m lower if the useful economic lives of all plant and equipment had been one year shorter or longer, respectively. Operating profit would have been £82.4m lower if the assumed discount rates in analysing goodwill impairment had been 1% higher. Operating profit would have been £18.9m lower if the terminal growth rates in analysing goodwill impairment had been 1% lower. Operating profit would have been unchanged if the assumed discount rates in analysing goodwill impairment had been 1% lower or if the terminal growth rates in analysing goodwill impairment had been 1% higher.
The actuarial gain of £55.3m in the statement of comprehensive income would have been £8.9m higher or lower if the real interest rates used in calculating the pension liabilities had been 0.1% higher or lower, respectively. Furthermore, an increase of one year in the life expectancies used to calculate the pension liability would have decreased the actuarial gain by £8.2m.
IFRS 7 disclosures
The only commodity exposing Yell to market risk is paper, which would have increased or decreased EBITDA by £9.3m if paper prices had been 10% lower or higher, respectively.
Financial instruments affected by market risk include borrowings, deposits, and derivative financial instruments. The following table, required by IFRS 7, is intended to illustrate the sensitivity to changes in market variables, being interest rates and the US dollar and Euro to sterling exchange rate on Yell's financial instruments. The analyses are only valid when all other factors are held constant.
IFRS 7 analyses
| 2011 Income shareholders' | 2010 Income shareholders' | ||
£m (loss) gain at 31 March | Statement | Equity | Statement | equity |
Variable interest rates 1% higher, taking into account hedging arrangements | (5.6) | 13.9 | (6.5) | 55.7 |
Variable interest rates 1% lower, taking into account hedging arrangements | 5.9 | (11.0) | 4.4 | (55.3) |
Variable interest rates 1% higher, without taking into account hedging arrangements | (30.2) | - | (30.6) | - |
Variable interest rates 1% lower, without taking into account hedging arrangements | 30.5 | - | 17.6 | - |
US dollar to pounds sterling exchange rate 10% higher | 9.8 | 0.7 | 11.1 | 4.5 |
US dollar to pounds sterling exchange rate 10% lower | (11.9) | (0.9) | (13.5) | (5.6) |
Euro to pounds sterling exchange rate 10% higher | 4.7 | - | 5.4 | 1.9 |
Euro to pounds sterling exchange rate 10% lower | (5.8) | - | (6.6) | (2.1) |
RELATED PARTY TRANSACTIONS
Company
There were no transactions with Group companies in the years ended 31 March 2011 and 2010 other than the following transactions with Yell Finance B.V. and ESOP trust:
Year ended 31 March
£ m | 2011 | 2010 |
Finance income from Yell Finance B.V. | 35.3 | 27.0 |
Net finance income | 35.3 | 27.0 |
Year ended 31 March
£ m | 2011 | 2010 |
Amounts charged by the Company to subsidiaries for employee share plans | 20.1 | 15.2 |
At 31 March
£ m | 2011 | 2010 |
Non-current assets | ||
Amounts owed by Yell Finance B.V. | 1,024.2 | 978.1 |
Amounts owed by ESOP trust, net of £22.2m provisions (2010 - £22.2m) | 21.9 | 27.4 |
Amounts owed by SIP trust | - | 0.1 |
Total amounts owed by Group companies | 1,046.1 | 1,005.5 |
Subsidiary undertakings
Brief details of principal subsidiary undertakings at 31 March 2011 and 2010, all of which are unlisted, are disclosed in note 12.
Key management compensation was as follows:
Year ended 31 March
£m | 2011 | 2010 |
Salaries and other short-term employee benefits | 3.1 | 1.5 |
Post-employment benefits | 0.4 | 0.5 |
Share-based payments | 0.4 | 1.4 |
Termination benefits | 0.9 | - |
Total key management compensation | 4.8 | 3.4 |
RESPONSIBILITY STATEMENT
The Annual Report and Accounts for the year ended 31 March 2011 contain, on page 61, a responsibility statement signed on behalf of the Board and stating as follows:
Each of the current directors, whose names and functions are set out on page 57 confirm that, to the best of each person's knowledge and belief:
• The financial statements, prepared in accordance with IFRSs as adopted by the EU, give a true and fair view of the assets, liabilities, financial position and profit of the Group and Company.
• The directors' report contained in the Annual Report includes a fair review of the development and performance of the business and the position of the Company and Group, together with a description of the principal risks and uncertainties that they face.
The directors are responsible for the maintenance and integrity of the Group website, www.yellgroup.com. Legislation in the UK governing the preparation and dissemination of financial statements may differ from legislation in other jurisdictions.
Enquiries:
Christian Wells
Company Secretary
T: +44 (0) 118 358 2307