Annual Financial Report

Annual Financial Report

Informa plc

Annual Report and Financial Statements 2012 and Notice of AGM 2013

Informa plc today posted or otherwise made available to shareholders, the below listed documents. In accordance with Listing Rule 9.6.1R, the documents have also been submitted to the UK Listing Authority via the National Storage Mechanism and will be available for viewing shortly at www.hemscott.com/nsm.do.

• Annual Report and Financial for the year ended 31 December 2012
• Notice of 2013 AGM
• Form of Proxy for 2013 AGM

In accordance with DTR 6.3.5R(3), the Annual Report and Financial Statements 2012 and Notice of AGM 2013 will shortly be available to view on the Company's website at www.informa.com/Investor-relations.

The information below, which is extracted from the Annual Report and Financial Statements 2012 is included solely for the purposes of complying with DTR 6.3.5R. It should be read in conjunction with the Company's preliminary announcement issued on 21 February 2013. Together these constitute the material required by DTR 6.3.5R to be communicated to the media in unedited full text. This material is not a substitute for reading the full Annual Report and Financial Statements 2012. Page numbers and cross references in the extracted information refer to page numbers and cross references in the Annual Report and Financial Statements 2012.

Risks and Uncertainties

A number of factors could potentially affect the Group's operating results and financial condition ("risk factors"). The Group adopts a risk management process that is monitored by the Board and which is intended to ensure a consistent and coherent approach to managing the risk factors that are described in this section and to those other risk factors that may arise or which may become material in the future (as outlined in the Corporate Governance section on page 46). Each of these risk factors are tabled at frequent Risk Committee Meetings (a sub-committee of the Audit Committee) throughout the year. The members of the Risk Committee include the Executive Directors, the Group HR Director, the Deputy Group Finance Director, the Company Secretary, the Head of IT, senior divisional Managing Directors, and a representative from Internal Audit. This section describes the principal risk factors that the Directors believe could materially affect the Group, but this is not an exhaustive list as other risks may arise or existing risks may materially increase in the future. These are listed in no order of priority, and alongside each risk is a note of the main mitigating factors or actions which the Group takes.

Risk	Mitigation
1. The Group's businesses are affected by the economic conditions of the sectors and regions in which they and their customers operate and the markets in which the Group operates are highly competitive and subject to rapid change The performance of the Group depends on the financial health and strength of its customers, which in turn is dependent on the economic conditions of the industries and geographic regions in which they operate. Traditionally, spending on parts of the Group's products has been cyclical due to companies spending significantly less in times of economic uncertainty. The markets for the Group's products are highly competitive and in a state of ongoing and uncertain change. If the Group is unable to successfully enhance and/or develop its products in a timely fashion, the Group's revenue could be affected. There are also low barriers to entry in relation to certain parts of the Group's businesses.	Mitigation is achieved, where possible, through the Group's diversification of its operations across vertical markets and geographies, which provides a broad customer base. The Group maintains a competitive advantage through ongoing investment in its products, reinforcing its market leading position in many markets. Furthermore, during the recent difficult economic conditions the Group has enhanced its credit control function with a view to maintaining tighter control over upfront payments for events and subscriptions and also continuous monitoring of trade receivables to mitigate further default risk.
2. The Group's Academic Information ("AI") division's revenue can be adversely affected by changes in the purchasing behaviour of academic institutions Academic institutions fund purchases of Group products from budgets that may be sensitive to changes in private (including endowments) and governmental sources of funding particularly in times of economic uncertainty and austerity. Accordingly, any such decreases are likely to affect adversely the Group's results within its AI division.	The Group is constantly developing its product types and content range to minimise this effect so that academic institutions consider that the Group's online and print based content is an important purchase even in times of economic uncertainty and austerity. Additionally, the Group has developed its reach, and continues to expand its sales activities outside of the more established western territories to the faster developing markets, like Asia, where economic growth is currently stronger and new universities are being built.
3. The Group's continued growth depends, in part, on its successful ability to identify and complete acquisitions and its ability to expand the business into new geographic regions With new acquisitions there can be no assurances that the Group will achieve the expected return on its investment, particularly as the success of any acquisition also depends in part on the Group's ability to integrate the acquired business or assets. Attractive acquisitions may be difficult to identify and complete for a number of reasons, including competition among prospective buyers and economic uncertainty. These issues particularly relate to large acquisitions.	The Group has formal investment decision criteria to identify suitable, earnings enhancing, acquisition targets and employs experienced professionals to drive the acquisition process. Post acquisition integration plans are prepared to ensure businesses are effectively integrated into the Group and that planned synergies are realised. In expanding its business geographically, both organically and by acquisition, the Group reviews risks relevant to particular geographies and formulates appropriate mitigation strategies.
4. Reliance on or loss of key customers may reduce demand for the Group's products In recent years, more public sources of free or relatively inexpensive information have become available, particularly through the internet, and this trend is expected to continue. For example, some governmental and regulatory agencies have increased the amount of information they make publicly available at no cost. Such sources may reduce demand for the Group's Publishing products. In the Events and Training division there are a number of exhibitions that individually contribute significantly to the profitability of their respective business units, because of the size of the events and the relatively high gross profit margins earned by them.	To mitigate this risk, the Group continuously monitors changes in its markets places and regularly seeks feedback from customers, adjusting its product offering in response where appropriate. The Group also invests in its products and delivery platforms.
5. A major accident at an exhibition or event The Group's Events and Training division organises events that can be attended by up to 50,000 individuals on a given day, which results in health and safety risks including fire safety, structural collapse, food hygiene, crowd control, security and evacuation routes in an emergency. Furthermore, the delegates are often not familiar with the venue which increases the risk of trip and fall type accidents. At its most severe, there have been incidents in the last 10 years, albeit not involving the Group, resulting in loss of life through accidents at an exhibition or event. Additionally, the Events and Training division does not normally own the venues it operates from, instead hiring floor space from a number of sources including exhibition centres, conference halls, hotels and training centres. As the Group does not own the venues directly, it is dependent on the operators of the venues to have adequate safety policies in place, which comply with all regulations in the local jurisdiction.	The risks are mitigated by the Group's Health and Safety ("H&S") policies and H&S training courses. The venues used for our Events are assessed against a minimum company criteria based on the risk it poses. The Group HR Director reports on Health and Safety issues to the Risk Committee. The implementation of the policies is the responsibility of local management teams, with the Group Health & Safety Manager (Events) available to assist with the implementation. A programme of annual internal audits has been established; these were conducted at Informa events businesses in different geographical regions and focused on the health and safety management of high risk events.
6. Significant operational disruption caused by a major disaster Major disasters, arising from either natural causes or man-made, have the potential to significantly disrupt the operation of the business. In particular, the success of the Group's Events and Training division is dependent on bringing potentially large numbers of individuals to events, either as paying delegates or non-paying visitors to exhibitions. Events that have the capacity to result in significant operational disruption to global travel include natural disasters, military conflict, political unrest, terrorist activity and industrial action. Additionally, disasters can disrupt the Group's electronic platforms and distribution systems as outlined in point 8.	Business continuity plans have been implemented across the Group, including disaster recovery programmes, and plans to minimise business disruption. Risk assessments are also carried out for all higher risk locations used by the Group, and these are reviewed on a regular basis. The Group also has relevant insurance cover for certain occurences.
7. Inadequate crisis management The impact of any given event on the Group can potentially increase if the emerging situation is not managed appropriately or effectively. In addition to the principal risk factors documented in this section, other risk factors have the ability to cause significant damage to the Group's brand and reputation if effective management is not implemented to mitigate their impact. Additionally, the speed and global coverage of media can result in a perceived crisis being communicated rapidly, thus further damaging the Group's brand and reputation.	To mitigate this risk, senior management communicate effectively within the organisation, constantly reviewing the Group's responses to emerging issues. However, by their nature, it is impossible to have a detailed crisis management plan in place for all potential situations that could arise, and therefore the ultimate mitigation is dependent on management's judgement, speed of reaction and quality of communication in a crisis situation.
8. The Group is dependent on the internet and its electronic delivery platforms, networks and distribution systems The Group's businesses are increasingly dependent on electronic platforms and distribution systems, which primarily deliver the Group's products through the internet. Any significant failure or interruption of these systems, or the Group's wider IT infrastructure could thereby restrict the Group's ability to provide services to customers. The Group may also be disadvantaged if it does not keep abreast of all relevant new technological advances or if such changes are expensive to implement.	The Group regularly invests in its internet and electronic delivery platforms, networks and distribution systems, and provides user support and services to customers having problems accessing data.
9. Breaches of the Group's data security systems or other unauthorised access to its databases could adversely affect the Group's businesses and operations The Group has valuable databases and as part of its business provides its customers with access to database information. There are persons who may try to breach the Group's data security systems or gain other unauthorised access to its databases in order to misappropriate such information for potentially fraudulent purposes or to approach the Group's customers for commercial purposes. This could damage the Group's reputation and expose it to risks of loss, litigation and/or regulatory action, as well as increase the likelihood of more extensive governmental supervision of these activities in a way that could adversely affect this aspect of the Group's business.	The Group regularly invests in improving data security, digital rights encryption and contracted obligations of distributors. These efforts are led by a designated data security officer. In the event of unauthorised access, the Group would protect its intellectual property ("IP") as outlined in point 12.
10. The Group relies on the experience and talent of its senior management and on its ability to recruit and retain key employees for the success of its business The successful management and operations of the Group are reliant upon the contributions of its senior management and other key personnel. In addition, the Group's future success depends in part on its ability to continue to recruit, motivate and retain highly experienced and qualified employees in the face of often intense competition from other companies.	The Group offers compensation packages which are competitive based on current market information and thereby give it the best opportunity to recruit and retain people of sufficient calibre. The Group believes that its people are challenged in their day to day work and obtain appropriate and relevant experience to develop further and prepare for progression within the organisation.
11. Changes in tax laws or their application or interpretation may adversely impact the Group The Group operates in a large number of countries. Accordingly, its earnings are subject to tax in many jurisdictions. Relevant authorities may amend the substance or interpretation of tax laws that apply to the Group's businesses, in a manner that is adverse to the Group. The Group is growing its business in emerging markets where tax frameworks are not as well developed which increases this risk. There can therefore be no assurance that the various levels of taxation to which the Group is subject will not be increased or changed. In addition, if any Group company is found to be, or to have been, tax resident in any jurisdiction other than those in which the Group is currently deemed to be tax resident or to have a permanent establishment in any such jurisdiction, this may have a material adverse effect on the amount of tax payable by the Group. Finally, regardless of whether the Group has paid the correct amount of tax, there may be a public perception that the Group has not paid sufficient tax and this may be more pronounced, given that the Company has its domicile in Zug, Switzerland.	The Group employs an experienced Head of Group Tax who keeps abreast of potential changes in tax legislation across a range of jurisdictions, enabling the Group to react quickly to changes in the tax position of any of its companies or businesses. In emerging markets, the Group works with established and reputable tax advisers in order to ensure it pays the correct amount of tax. The Group is also careful to ensure that profits arising in low tax jurisdictions are no more than commensurate with the substance of the operation in those territories.
12. The Group's IP rights may not be adequately protected and may be challenged by third parties The Group relies on agreements with its customers as well as trademark, copyright and other IP laws to establish and protect the IP rights subsisting in its journals, books and training materials. However, these rights may be challenged, limited, invalidated or circumvented by third parties seeking to infringe or otherwise profit from the Group's proprietary rights without its authorisation. In addition, there is now a growing amount of copyright legislation relating to digital content. These laws remain under legislative review and there remains significant uncertainty as to the form copyright law may ultimately take. Additionally, enforcement of IP rights is restricted in certain jurisdictions, and the global nature of the internet makes it impossible to control the ultimate destination of content produced by the Group. The Group may also be the subject of claims for infringement of third party rights or party to claims to determine the scope and validity of the IP rights of others. Litigation based on these claims is common amongst companies that utilise digital IP.	The Group protects its rights by consolidating its portfolio of trademark registrations, implementing its brand protection strategy, and increasing its digital rights protection. The Group supports these activities through membership of organisations that defend IP rights globally.
13. The Group is subject to regulation regarding the use of personal customer data The Group is required to comply with strict data protection and privacy legislation which restrict the Group's ability to collect and use personal information. The Group is exposed to the risk that its data could be wrongfully appropriated, lost or disclosed, or processed in breach of data protection regulation, by or on behalf of the Group, in which case the Group could face liability under data protection laws and/or suffer reputational damage from the resulting lost customer goodwill.	The Group seeks to monitor ongoing changes to data protection laws and best practices across its main trading areas in order to ensure that appropriate protections and procedures are in place in relation to the data held by or on behalf of the Group. This work is overseen by the Group General Counsel and a Data Protection Steering Committee, a sub-committee of the Risk Committee.
14. The Group may be adversely affected by enforcement of and changes in legislation and regulation affecting its businesses and that of its customers Compliance with various laws and regulations does impose significant compliance costs and restrictions on the Group, with the risk of fines and/or other sanctions for non-compliance. In addition, such regulations often provide broad discretion to the administering authorities and changes in existing laws or regulations, or in their interpretation or enforcement, could require the Group to incur additional costs in complying with those laws, or require changes to its strategy, operations or accounting and reporting systems. In particular, laws and regulations relating to communications, data protection, e-commerce, direct marketing and digital advertising have become more prevalent and complex in recent years.	The Group monitors legislative and regulatory changes and alters its business practices where appropriate.
15. The Group's credit risk in respect of long term receivables The Group has a small number of external loans which are repayable over the next two to ten years. The recoverability of the capital and interest payments is dependent on the financial success of those external parties over the coming years. Since the majority of the repayment terms are over a long period of time, the risk of unforeseen issues that could impact future repayments may increase.	Mitigation is achieved through structured communication with the external parties, close monitoring of financial and budgetary performance, and delivery against project milestones. In some instances capital and interest payments occur during the loan term and so any failure to pay can be addressed at the time and remedial actions can be actioned. The Risk Committee will conduct credit risk assessments on a half-yearly basis to ensure the external receivables are correctly recorded in the Group's accounts.

Statement of Directors' Responsibilities

The following statement is extracted from page 43 of the Annual Report and Financial Statements 2012 and is repeated here for the purposes of compliance with DTR 6.3.5R.

The Directors confirm that, to the best of their knowledge:

• the financial statements have been prepared in accordance with the applicable set of accounting standards and give a true and fair view of the assets, liabilities, financial position and profit or loss of the Company and the undertakings included in the consolidation taken as a whole; and
• the management report, which is incorporated into the Directors' Report, includes a fair review of the development and performance of the business and the position of the Company and the undertakings included in the consolidation taken as a whole, together with a description of the principal risks and uncertainties that they face.
  

Enquiries:

Julie Woollard, Deputy Company Secretary

Tel: [phone]

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