Independent News & Media Regulatory News (INM)

INDEPENDENT NEWS & MEDIA PLC

NET PROFIT DOUBLES TO €14 MILLION

Ticker: (Bloomberg) INM.ID/INM.LN and (Reuters) INME.I/INME.L

Dublin/London 28 August 2014: Independent News & Media PLC ('INM' or the 'Group') today announced the Group's results for the six months ended 30 June 2014.

2014 | KEY HIGHLIGHTS (Continuing Group**)

§ Net Profit* has doubled from €6.9 million to €14.0 million;

§ 2013 Financial Restructuring results in Net Debt to EBITDA of 2.4 times (Net Debt: €94.7 million) and a net interest charge of €3.0 million, which is a reduction of €15.7 million; and

§ Digital advertising revenue growth of 30%, with significant ongoing digital investment.

2014 | FINANCIAL/OPERATING HIGHLIGHTS

§ Operating Profit, pre-exceptionals, of €15.9 million, in line with 2013;

§ Total Revenue of €157.8 million, marginally down on the prior year:

§ Digital advertising revenue growth of 30% to €3.9 million;

§ Year-on-year newspaper advertising trend continues to improve, with strong revenues from

(ROI), Property and Inserts;

§ Notwithstanding the planned investment in Digital, Operating Costs, pre-exceptionals, reduced by €3.3 million (down 2.3%);

§ Substantial digital audience and revenue growth:

§ independent.ie is the No.1 news website in Ireland (source: June 2014 comScore);

§ Significant increase in independent.ie traffic - unique visits have doubled year-on-year to 9.2 million in

while page impressions in July were up 23% year-on-year to 70 million;

§ Traffic on sundayworld.com has more than quadrupled since last year, with over 1 million unique visits

over 5 million page impressions in July;

§ BelfastTelegraph.co.uk, Northern Ireland's leading commercial news website increased its unique

year-on-year by 45% to 3.4 million in July; and

§ The purchase of RecruitNI strengthens the Group's position as the No.1 jobs portal in Northern Ireland.

§ Profit enhancement initiatives:

§ Continued strong delivery on cost reduction programme;

§ Editorial work-flow and "write to fit" initiative nearing completion; and

§ Integration of Sunday World and The Herald editorial operation has commenced.

§ Successful disposal of the Education businesses, allowing the Group to focus on its core business.

*pre-exceptionals

**Note: The 'Continuing Group' excludes the results of the Education businesses, which were sold in June 2014 and the South African business, which was sold in August 2013

Commenting on the results, Leslie Buckley, Group Chairman, said:

"Following on from our very successful Financial Restructuring in 2013, the first half of 2014 produced a satisfactory set of results. I was delighted to recently announce the appointment of Robert Pitt as Group CEO. Robert's business background in retail and his change management experience make him an ideal person to lead INM into the next phase of its development.

We continue to invest in our Digital business as we successfully roll out our strategy. This strategy revolves around our strong portfolio of market-leading national and regional brands, most notably, independent.ie, where our online audience doubled to 9.2 million unique visits in July 2014. In Northern Ireland, the BelfastTelegraph.co.uk website attracted 3.4 million unique visits in July, a 45% year-on-year increase. We also purchased RecruitNI, strengthening our position in the important Northern Ireland online recruitment market. Digital presents a substantial opportunity for INM and is key to the future of the business.

The first half of 2014 showed some further positive signs in our print publishing business, as we experienced strong growth in recruitment (ROI) and property advertising. Our market-leading titles are well positioned to benefit from the expected return to growth in the Irish domestic economy.

In the first half of 2014, we continued our focus on reducing costs. Following on from the successful implementation of Phase one of our restructuring programmes, which improved annual profitability by €26 million, a further significant cost restructuring programme is now being implemented across the Group, in order to maintain Group profitability."

OPERATIONS

The Key Operating Highlights in the first half of 2014 were as follows:

· independent.ie continues to be the No.1 news website (comScore) in the Republic of Ireland, with 9.2 million unique visits in July (up 103% on July 2013) and generating 70 million page impressions (up 23%);

· In July, the Group's publishing websites of independent.ie, sundayworld.com and BelfastTelegraph.co.uk in total attracted 13.6 million unique visits (a 91% year-on-year increase) and generated 94.4 million page impressions (a 26% year-on-year increase);

· Irish Independent continues to dominate the quality daily market with an ABC of 112,383 - maintaining its No.1 position in the daily quality market;

· Sunday Independent, which recorded an ABC1 of 220,565, increased its market share and remains by far the biggest selling quality Sunday newspaper, while also providing the largest regular audience on the island of Ireland across any advertising platform;

· The Herald recorded an ABC1 of 51,600 in the popular daily market and remains Dublin's most-read newspaper;

· Sunday World,which recorded an ABC1 of 198,260, increased its market share in the popular Sunday market and continues to be the largest selling tabloid on the island of Ireland; and

· In Northern Ireland, the Belfast Telegraph recorded an ABC1 of 48,014, increasing market share in the Northern Ireland daily market, while the Sunday Life recorded an ABC1 of 44,155 - both newspapers recently won "Newspaper of the Year" awards in their respective markets.

2014 Trading Performance

During the first six months of 2014, Operating Profit, pre-exceptionals for the Continuing Group was maintained at €15.9 million, with total revenue declining by only 2.0% or €3.3 million to €157.8 million.

Total digital advertising revenue (excluding GrabOne) increased by 30.0% to €3.9 million in the first six months of the year as the integrated advertising sales team successfully developed and sold innovative solutions for the Group's customers and we started to see the benefits of the Group's digital investment.

Total print advertising revenue in the year decreased by a modest 2.7% or €1.0 million to €35.9 million, with strong growth in Property, Recruitment (ROI) and Inserts. The year-on-year decline continues to reduce, with the Group experiencing its smallest year-on-year half-year decline since 2007.

Operating Costs, pre-exceptionals, reduced by €3.3 million (down 2.3%) fully offsetting the modest revenue decline, and providing for the substantial planned digital investment.

GrabOne, the Group's daily deals website recorded marginal year-on-year growth, with revenues of €1.3 million, following a strategic re-focussing on higher value deals.

While circulation revenue declined by 2.4%, a number of the Group's leading titles increased market share, further underpinning the Group's dominant market share positions.

Digital

The growth in unique visits and page views has accelerated across browser, mobile and apps, in particular for independent.ie. This has driven strong growth in digital display advertising in the first half of the year, with advertising revenues up 30% to €3.9 million. 500 million page impressions have been read on independent.ie to date in 2014.

The Group continues to invest in digital in order to deliver market-leading online products that increase user engagement and provide the platform to continue to drive revenues through a range of advertising formats.

The independent.ie platform has been enhanced, with a redesign that includes new sections dedicated to News, Business, Sport, Entertainment, Life and Style, a streamlined and easy to use experience and more rich media, including video and photo galleries, social integration and ability to comment.

Mobile is a key area of focus with independent.ie content being accessed from an increasing number of mobile devices. The Group launched its new mobile adaptive product in May 2014, with 45% of its audience now accessing its content via mobile - a significant year on year growth of 200%. In Belfast, the Group has successfully launched a best in class iPad app for Belfast Telegraph, as well as upgrades to its classified iPhone apps and platforms. The Group also purchased RecruitNI, strengthening our position in the important Northern Ireland online recruitment market.

In July, sundayworld.com had over 1 million unique visits and over 5 million page impressions - quadrupling its traffic in one year. During this period, the Group successfully launched "Sunday World Exclusive", a subscription service on sundayworld.com offering access to digital archives, exclusive content and your weekly newspaper delivered to your mobile or tablet every Sunday morning through a new hybrid native app.

______________

[1] ABC Jan to June 2014

The editorial structure has moved to a fully integrated Digital First content hub. All content operations have been rolled into a centralised content hub to serve all audiences across the day and across the Group's multiple platforms (print, browser and mobile).

Profit Enhancement Initiatives

During the first six months of 2014, we continued the focus on cost restructuring, thereby reducing the impact of the year-on-year revenue declines. These efforts will continue into H2 and beyond.

Discontinued Operations

The Group successfully disposed of its Education businesses in June 2014, accordingly, the results of the Education businesses are reported in "Discontinued Operations" in both 2014 and 2013. The South African business results (disposed of in August 2013) are reported in "Discontinued Operations" in 2013 only.

EXCEPTIONALS

The Group recorded a Net Exceptional Charge of €16.1 million in the first six months of 2014. This charge mainly consists of a €16.7 million non-cash accounting adjustment relating to the deemed partial disposal loss arising from the Group's non-participation in APN's equity issue in 2014. The Group's stake in APN is valued at €103 million (as of 27 August 2014), with a carrying value of €75 million. This non-participation in APN's equity issue resulted in the Group's stake in APN being reduced to approximately 18.6%.

SHARE OF RESULTS OF ASSOCIATES AND JOINT ARRANGEMENTS

The Group's Associates and Joint Arrangements mainly comprise its approximate 18.6% shareholding in APN, its 50% shareholding in the Irish Daily Star, its 50% shareholding in CarsIreland.ie and its 33.3% shareholding in metro herald.

APN's revenues from continuing operations, for the six months ended 30 June 2014 were A$405.9 million, up 3% on the same period last year (down 4% on a constant currency basis), while EBITDA from continuing operations and before exceptionals was at A$70.7 million, up 1% (down 6% on a constant currency basis). APN did not declare an interim dividend.

DIVIDENDS

The Directors are not proposing an interim dividend for 2014. There was no dividend paid or declared in respect of 2013.

- ENDS -

For further information, contact:

INDEPENDENT NEWS & MEDIA PLC - CONDENSED INTERIM GROUP FINANCIAL STATEMENTS - CONDENSED GROUP INCOME STATEMENT (unaudited)

* See Note 5 for further information. The notes to the condensed interim Group financial statements on pages 11 to 26 form an integral part of this financial information.

CONDENSED GROUP STATEMENT OF COMPREHENSIVE INCOME (unaudited)

The notes to the condensed interim Group financial statements on pages 11 to 26 form an integral part of this financial information.

CONDENSED GROUP BALANCE SHEET

The notes to the condensed interim Group financial statements on pages 11 to 26 form an integral part of this financial information.

CONDENSED GROUP STATEMENT OF CHANGES IN EQUITY (unaudited)

* Other at 30 June 2014 related to cash flow hedging reserve €0.4m and available-for-sale financial assets reserve (€0.1m).

The notes to the condensed interim Group financial statements on pages 11 to 26 form an integral part of this financial information

CONDENSED GROUP CASH FLOW STATEMENT (unaudited)

The notes to the condensed interim Group financial statements on pages 11 to 26 form an integral part of this financial information.

*Cash and cash equivalents per the Group Balance Sheet of €24.1m, plus cash held for sale - South Africa of €8.1m, less bank overdrafts of €5.8m, equals the Cash and cash equivalents and bank overdrafts per the Cash Flow Statement of €26.4m.

NOTES TO THE INTERIM STATEMENT (unaudited)

1. Basis of Preparation of Financial Information under IFRS

Basis of Preparation and Going Concern

Independent News & Media PLC ("the Company") is a company domiciled in Ireland. These condensed interim Group financial statements as at and for the six months ended 30 June 2014 comprise the Company and its subsidiaries (together referred to as "the Group") and the Group's interest in associates and joint arrangements.

This financial information has been prepared on the going concern basis, which assumes that the Group will continue to be able to meet its liabilities as they fall due for the foreseeable future.

The condensed interim Group financial statements for the six months ended 30 June 2014 and the comparative amounts have not been audited or reviewed by the auditors. The condensed interim Group financial statements are not the statutory accounts of the Company. A copy of the statutory accounts is required to be annexed to the Company's annual return to the Companies Registration Office in Ireland in respect of the year ended 31 December 2013. The auditor's report on those financial statements was unqualified.

These condensed interim Group financial statements are presented in Euro, which is the functional currency of the Company and presentation currency of the Group.

The condensed interim Group financial statements were approved by the Directors on 27 August 2014.

The condensed interim Group financial statements for the six months ended 30 June 2014, which should be read in conjunction with the 2013 Annual Report, have been prepared in accordance with the Transparency (Directive 2004/109/EC) Regulations 2007, the related Transparency Rules of the Central Bank of Ireland and in accordance with International Accounting Standard 34, Interim Financial Reporting (IAS 34) as adopted by the European Union.

Accounting Policies

The accounting policies and methods of computation and presentation adopted in the preparation of the condensed interim Group financial statements are consistent with those applied in the Annual Report for the year ended 31 December 2013 and are described in those financial statements on pages 65 to 78, except for the impact of the standards described below.

The following new and amended standards and interpretations are effective for the Group for the first time for the financial year beginning 1 January 2014. None of these had a material impact on the Group:

· IFRS 10 Consolidated Financial Statements: IFRS 10 establishes a new control-based model for consolidation that replaces the existing requirements of both IAS 27 Separate Financial Statements and SIC-12 Consolidation - Special Purpose Entities. Under the new requirements an investor controls an investee when (i) it has exposure to variable returns from that investee; (ii) it has the power over relevant activities of the investee that affect those returns; and (iii) there is a link between that power and those variable returns.

· IFRS 11 Joint Arrangements: IFRS 11 replaces IAS 31 Interests in joint ventures and SIC-13 Jointly-controlled entities - non-monetary contributions by venturers. IFRS 11 classifies joint arrangements as either 'joint operations' or 'joint ventures' and focuses on the nature of the rights and obligations of the arrangement. All investee entities determined under the new criteria to be 'joint ventures' will be equity accounted for, with the option for the investor to proportionately consolidate being removed from the new standard.

· IFRS 12 Disclosure of Interests in Other Entities: IFRS 12 sets out more comprehensive disclosures relating to the nature, risks and financial effects of interests in subsidiaries, associates, joint arrangements and unconsolidated structured entities. Interests are widely defined as contractual and non-contractual involvement that exposes an entity to variability of returns from the performance of the other entity or operation.

NOTES TO THE INTERIM STATEMENT (unaudited) (continued)

1. Basis of Preparation of Financial Information under IFRS (continued)

Accounting Policies (continued)

· IAS 27 Separate Financial Statements (2011): IAS 27 carries forward the existing accounting requirements for separate financial statements; the requirements of IAS 28 and IAS 31 for separate financial statements have been incorporated into IAS 27.

· IAS 28 Investments in Associates and Joint Ventures (2011): IAS 28 previously discussed how to apply equity accounting to associates in consolidated financial statements. The revised IAS 28 continues to include that guidance but it is now extended to also apply that accounting to entities that qualify as joint ventures under IFRS 11.

· Offsetting Financial Assets and Financial Liabilities (Amendments to IAS 32): These amendments clarify the meaning of 'currently has a legally enforceable right of set-off' and that some gross settlement systems may be considered equivalent to net settlement.

There are a number of other amendments to existing standards that are effective for the Group for the first time from 1 January 2014. None of these had a material impact on the Group.

Comparative Information

In certain instances, the comparative information to the financial statements has been restated as follows:

(i) On 11 December 2013, APN advised that their company's 2012 financial statements contained a non-cash error arising from the impairment modelling of the intangible assets of its wholly owned subsidiary, Australian Regional Media ('ARM'). The ARM intangible assets were overstated at 31 December 2012 by A$51.5m (€40.5m). INM's share of this error is reflected in the 2012 restated comparatives. The impact on the 2012 comparatives was to increase INM's share of APN's impairments by €12.2m, and to reduce INM's investment in associates and net assets by €11.9m, with the balance of €0.3m impacting on foreign currency translation reserves. The impact on 2012 was to increase the loss per share (basic and diluted) by €0.022. The impact of this restatement has also been reflected in the comparative balance sheet at 30 June 2013.

(ii) INM's Educational businesses were disposed of in June 2014, consequently the Educational businesses are treated as a discontinued operation in 2014 and the Income Statement comparatives for 2013 have been reclassified accordingly (note 11).

2. Risks and Uncertainties

The principal risks and uncertainties facing the Group were detailed in the Directors' Report and in Note 32 of the 2013 Annual Report and these continue to be considered the principal risks and uncertainties for the remaining six months of the year most likely to influence the performance of the Group.

The preparation of interim Group financial statements requires management to make judgements, estimates and assumptions that affect the application of policies and reported amounts of assets, liabilities, income and expenses. Actual results could differ materially from these estimates. The significant judgements made by management in applying the Group's accounting policies and the key sources of estimation uncertainty were the same as those that applied to the consolidated financial statements as at and for the year ended 31 December 2013.

NOTES TO THE INTERIM STATEMENT (unaudited) (continued)

3. Segmental Reporting

Segment information is presented on the same basis as that used for internal reporting purposes. Operating segments are reported in a manner consistent with the internal reporting provided to the Chief Operating Decision Maker ('CODM'). The CODM has been identified as the Board of Directors. The reportable segments based on the internal reporting information provided are listed in the table on the following page. The key performance measure that is reviewed for these segments is operating profit/(loss) before exceptional items. Exceptional items are reviewed at a level higher than these operating segments and appear as a reconciling item from the key performance measure reviewed by the CODM to the IFRS result. Finance income and expense, share of results of associates and joint ventures (with the exception of significant associates which are separately considered) and taxation are reviewed and considered by the CODM at a Group level only.

The Group's subsidiaries previously operated in two geographical areas: Island of Ireland and South Africa. The components of the Group, whose operating results are regularly reviewed by the CDOM to make decisions about the allocation of resources, and in performance assessment, are contained in the table on the following page.

In 2013, the Group disposed of its South African segment and accordingly this segment is included under discontinued operations. In 2014, the Group disposed of its Island of Ireland Non-publishing segment and accordingly this segment is included under discontinued operations.

NOTES TO THE INTERIM STATEMENT (unaudited) (continued)

3. Segmental Reporting (continued)

*€7.1m plus discontinued operations share of associates and joint ventures of €0.2m, plus discontinued net finance income of €0.1m, less discontinued operations taxation charge of €1.3m equals €6.1m of discontinued operating profit (before exceptional items) per the Income Statement.

NOTES TO THE INTERIM STATEMENT (unaudited) (continued)

3. Segmental Reporting (continued)

APN's revenues for the six months ended 30 June 2014 were €270.7m (A$405.9m) (2013: €329.3m; A$426.5m) and APN's net profit after tax before exceptional items for the six months ended 30 June 2014 was €18.2m (A$27.3m) (2013: €12.5m; A$16.2m).

For continuing operations, the taxation charge for the period comprises a charge of €0.5m (2013: €nil) in respect of Irish taxation and a charge of €0.2m (2013: charge of €0.6m) in respect of overseas taxation.

NOTES TO THE INTERIM STATEMENT (unaudited) (continued)

4. Net Finance Income/(Expenses)

5. Exceptional Items

Exceptional items are those items of income and expense that the Group considers are material and/or of such a nature that their separate disclosure is relevant to a better understanding of the Group's financial performance.

NOTES TO THE INTERIM STATEMENT (unaudited) (continued)

5. Exceptional Items (continued)

(i) 2014

Relates to restructuring charges arising in the Island of Ireland, somewhat offset by the release of provisions.

2013

Relates to restructuring charges arising in the Island of Ireland (€6.0m) and Central Costs (€0.1m).

(ii) 2014

Relates to a €1.0m gain on the write-off of Anti-dilution bank debt, which was provided for as part of the 2013 Restructuring.

2013

Relates to costs incurred during the period in relation to the Group's renegotiation of its financing arrangements. These costs primarily comprise (i) professional fees incurred in respect of professional advice received by the Group during the renegotiation process and (ii) professional fees paid by the Group on behalf of and under the instruction of the Group's banks (as the Group is obligated by the banks to cover costs incurred by their legal and financial advisers for the duration of the refinancing negotiations).

(iii) 2014

Relates to net exceptional items in APN and Independent Star Limited.

2013

Relates primarily to restructuring charges recognised in APN and Independent Star Limited.

(iv) 2014

Relates to the non-cash exceptional accounting adjustment relating to the deemed partial disposal loss arising from INM's non-participation in APN's equity issue in 2014 (see note 9).

(v) 2014

Relates to the loss on disposal of the Educational Businesses (see note 11).

2013

The charge relates to professional fees of €1.0m incurred in connection with the South African disposal process.

(vi) 2013

Relates to INM's South African business which is classified as held for sale and presented as a discontinued operation. These costs relate primarily to foreign exchange losses of €7.2m booked on an intergroup loan, the settlement of which has occurred arising from the South African disposal proceeds. In the past, foreign currency gains and losses on this loan were recognised in other comprehensive income in the consolidated financial statements and presented in the currency translation reserve within equity.

NOTES TO THE INTERIM STATEMENT (unaudited) (continued)

6. Earnings Per Share

Basic earnings per share is calculated by dividing the earnings attributable to ordinary shareholders by the weighted average number of ordinary shares outstanding during the period.

For diluted earnings per share, the weighted average number of ordinary shares outstanding is adjusted to assume conversion of all potential dilutive options over ordinary shares once the adjustment does not increase earnings per share or reduce a loss per share.

Basic and diluted earnings per share before exceptional items are presented in order to give a better understanding of the Group's underlying financial performance.

NOTES TO THE INTERIM STATEMENT (unaudited) (continued)

7. Other Items

a. Retirement Benefits

The retirement benefit obligation as at 30 June 2014 in the Balance Sheet has increased by €17.4m to €78.0m compared to €60.6m at 31 December 2013. This increase in the retirement benefit obligation is primarily driven by a decrease in the discount rate used in valuing the pension obligations. The discount rate used in the Republic of Ireland at 30 June 2014 was 3.1% versus the discount rate of 4.0% used at 31 December 2013.

b. Statement of Comprehensive Income

A positive currency translation adjustment of €8.2m (€0.5m relating to subsidiaries, €5.9m relating to associates and a €1.8m reclassification relating to a deemed partial disposal of APN) has been booked in the Group Statement of Comprehensive Income for the half year to 30 June 2014 (2013: loss of €5.1m relating to subsidiaries and a loss of €13.2m relating to associates). The positive currency translation adjustments of €0.5m and €5.9m have arisen due to the strengthening of the Sterling Pound and Australian Dollar exchange rates at 30 June 2014 compared to the rates at 31 December 2013 used in the translation of the Group's investments in subsidiaries and associates with a functional currency different to that of the Parent Company.

c. Dividends

The Directors are not proposing an interim dividend for 2014. There was no dividend paid or declared in respect of 2013.

d. Tax Effect on Items in Statement of Comprehensive Income

NOTES TO THE INTERIM STATEMENT (unaudited) (continued)

8. Borrowings

* 2014 mainly relates to a scheduled principal repayment of €2.5m (2013: mainly €10.0m of escrow debt and €1.0m of Anti-dilution debt).

** Excludes restricted cash of €10.0m held in escrow in respect of warranties following the sale of the South Africa businesses (€10.0m as shown as restricted cash above).

The following is included in Loans & Overdrafts:

€128.0m (2013: €129.0m) drawn under the 2013 Bank Facilities*** repayable up to April 2018.

*** Certain material subsidiaries in the Group, as defined in the Bank Facilities, have granted fixed and floating charges over certain Group assets in connection with the 2013 Bank Facilities. An Intercreditor Agreement also exists in relation to these facilities. This agreement provides that, in a liquidation situation, all intergroup debt within those companies which have signed up to the agreement is subordinated to the Bank Facilities until such time as this debt has been discharged in full. All subsidiaries with material intergroup debt within the Group have signed up to this Intercreditor Agreement.

9. Intangible Assets/Investment in Associates and Joint Arrangements/Property, Plant & Equipment

Intangible Assets

The carrying amount of the Group's intangible assets increased by €0.5m from €44.4m at 31 December 2013 to €44.9m at 30 June 2014. This increase is driven primarily by favourable foreign exchange rate movements in the period and software additions, somewhat offset by software amortisation.

Impairment Reviews

The Group's indefinite life intangible assets (including goodwill) are tested annually for impairment or whenever there is an indication of impairment. There were no impairments recognised at 30 June 2014. When testing for impairment, the recoverable amounts for the Group's cash-generating units (CGUs) are measured at their value in use by discounting future expected cash flows. These calculations use cash flow projections based on management approved projections, which reflect management's current experience and future expectations of the markets in which the CGU operates. The detailed methodology (updated for changes in any of the key assumptions to reflect past experience and also consistent with external sources of information) as used by the Group for impairment testing is as outlined in the 2013 annual report.

NOTES TO THE INTERIM STATEMENT (unaudited) (continued)

9. Intangible Assets/Investment in Associates and Joint Arrangements/Property, Plant & Equipment (continued)

Impairment Reviews (continued)

The Balance Sheet reports the carrying value of newspaper mastheads at their acquired cost. Where these assets have been acquired through a business combination, cost will be the fair value recognised in acquisition accounting. The value of internally generated newspaper mastheads or post-acquisition revaluations are not permitted to be recognised in the Balance Sheet in accordance with IFRS and as a result no value for certain of the Group's internally generated newspaper mastheads (e.g. the three main Irish titles, the Irish Independent, the Herald and the Sunday Independent) is reflected in the Balance Sheet.

The Directors are of the view that the Group has many other intangible assets which have substantial value that is not reflected on the Group's Balance Sheet. This is because these intangible assets are carried in the Group's Balance Sheet at a nil value or at a value which is much less than their recoverable amount. The Directors are of the view that if these intangible assets were allowed to be carried on the Group's Balance Sheet at full value then the Group's intangible assets would be greater than currently reported.

Investments in Associates and Joint Arrangements

The carrying amount of investments in associates and joint arrangements decreased by €11.4m from €87.2m as at 31 December 2013 to €75.8m as at 30 June 2014. This was partly due to a deemed partial disposal loss of €16.7m (of which €14.9m impacted the carrying amount of investments in associates and joint arrangements with the balance of €1.8m impacting capital reserves) during the first six months of 2014 in relation to INM's non-participation in APN's equity issue. This resulted in INM's stake in APN being reduced to approximately 18.6%. The Group continues to have significant influence in APN and continues to treat it as an associate. The deemed partial disposal loss was calculated as follows:

In addition, there was a €5.5m reduction in the carrying amount of APN recognised directly in equity arising from an APN non-controlling interest reserve movement. The negative movements were somewhat offset by a favourable exchange movement in the Australian Dollar and its consequential impact on the carrying value of INM's investment in APN of €5.8m, by the share of results (post exceptional items) of associates and joint arrangements of €2.7m and miscellaneous movements of €0.5m (including increased investments).

Property, Plant & Equipment

The carrying amount of the Group's property, plant & equipment decreased by €0.1m from €52.6m at 31 December 2013 to €52.5m at 30 June 2014. This decrease is driven primarily by a €2.5m depreciation charge, somewhat offset by capital additions of €2.1m and a positive foreign exchange movement of €0.3m.

Provisions

The carrying amount of provisions decreased by €8.3m from €25.5m at 31 December 2013 to €17.2m at 30 June 2014. This decrease is primarily driven by payments on a number of property leases and other onerous trading contractual arrangements from which the unavoidable costs to the Group exceed the economic benefits.

10. Related Party Information

During the first six months of the current financial year there have been no material related party transactions that have taken place requiring disclosure and there have been no changes in the related party transactions described in the last Annual Report that could have a material effect on the financial position or performance of the enterprise.

NOTES TO THE INTERIM STATEMENT (unaudited) (continued)

11. Discontinued Operations

(a) South African Business

During the first six months of 2013, the Board committed to a plan to sell the Group's South African business. Accordingly, the South African balance sheet was presented as a business held for sale as at 30 June 2013 and the South African results were presented as a discontinued operation.

As at 30 June 2013, the business comprised assets of €115.5m and liabilities of €47.4m, as detailed below:

(b) Education Businesses

In June 2014, the Group's Education Businesses were sold. Accordingly, the Education Businesses results are presented as a discontinued operation. The comparative Group Income Statement and OCI have been restated to show the discontinued operation separately from continuing operations.

Effects of the disposal of the Education Businesses on the Group:

*No tax charge arose on the disposal.

NOTES TO THE INTERIM STATEMENT (unaudited) (continued)

11. Discontinued Operations (continued)

(c) Results of discontinued operations

Of the loss from discontinued operations of €1.1m (2013: loss of €2.1m), €1.1m (2013: loss of €2.1m) is attributable to the owners of the Company. Of the loss from continuing operations of €1.0m (2013: loss of €9.5m), €0.8m (2013: loss of €9.5m) is attributable to the owners of the Company.

 (d) Cash flows (used in)/ generated from discontinued operations

NOTES TO THE INTERIM STATEMENT (unaudited) (continued)

12. Fair Value

The fair values of quoted available-for-sale financial assets and derivative financial instruments are measured using market values. Unquoted available-for-sale financial assets and derivatives are measured using valuation techniques. The carrying amount of non-interest bearing financial assets and financial liabilities and cash and cash equivalents approximates their fair values. The following is a comparison by category of carrying amounts and fair values of the Group's and Company's financial assets and financial liabilities:

Financial assets whose fair value could not be reliably measured amounted to €nil (2013: €nil).

NOTES TO THE INTERIM STATEMENT (unaudited) (continued)

12. Fair Value (continued)

The Group has not disclosed the fair value of certain financial instruments such as short-term receivables and payables because their carrying amounts are a reasonable approximation of fair value.

The Group has adopted the following fair value measurement hierarchy in relation to its financial assets and financial liabilities that are carried in the Balance Sheet at fair value:

- Level 1: quoted prices (unadjusted) in active markets for identical assets or liabilities;