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Trinity Mirror plc Registered office: 2009 & Accounts Report Annual plc Mirror Trinity , E14 5AP Trinity Mirror plc Annual Report & Accounts T: 020 7293 3000 F: 020 7293 3405 www.trinitymirror.com

09 2009 in context Investor relations In a tough year for the media industry, and against the challenging backdrop of a slowdown in the UK economy, Trinity Mirror management took decisive action, focusing on leading We communicate with the financial community on a regular and Trinity Mirror share price and traded volumes 2009 ongoing basis to support our stakeholders in their investment the business through recession, while decision process. While the investor relations programme is (p) (m) continuing to develop the business driven by statutory reporting requirements, it also contains a 200 20 strong element of additional communication in the form of 180 18 for longer term growth. meetings and presentations. 160 16 In response to declining revenues and 140 14 inflationary cost pressures, a comprehensive Key activities 120 12 package of self-help measures was put In addition to standard regulatory reporting, key themes in our 100 10 communications with the financial market in 2009 were the 80 8 in place to substantially reduce our fixed implications of the extreme credit conditions on our industry, 60 6 the resulting volatile financial markets, the downturn in advertising, cost base. 40 4 the strength of our balance sheet, our financing facilities and our stable pension position. 20 2 At the same time, the Group continued to 0 0Jan Feb Mar AprMay JunJul AugSep OctNov Dec0 In 2009, the Company made the following announcements: invest in our multi-media future, modernising Average weekly price Weekly volume our operations and launching 26 Feb 2009 Preliminary Results Announcement 13 May 2009 Annual General Meeting new digital products and services. The Trinity Mirror vs FTSE 350 Media Index 2009 13 May 2009 Interim Management Statement implementation of the new operating model 400 across the business has resulted in a step 30 Jul 2009 Interim Results Announcement 350 change in the way we publish across print 12 Nov 2009 Interim Management Statement and digital achieving efficiencies and a 300 In 2009, the focus of our investor relations efforts continued to be 250 significantly lower cost base but without on institutional investors and analysts. This year we maintained a detriment to quality. proactive targeting programme, reaching out to new investors in the 200 UK, Continental Europe and the US. In addition to these marketing Our strategy of diversifying revenue streams efforts, we continued to respond to ad hoc queries and meeting 150 requests from analysts and investors. We held meetings with over 100 coupled with the impact of the downturn on 60 institutional investors during the year, nearly half of whom were advertising revenues has resulted in a more non-holders. The largest concentration of meetings was among 50 UK investors, followed by the US and Continental Europe. resilient mix of revenues. 0 JanFeb Mar AprMay JunJul AugSep OctNov Dec Trinity Mirror FTSE 350 Media At of 2009, Trinity Mirror is a leaner Key dates in 2010 and fitter business which is well positioned 4 Mar 2010 Preliminary Results Announcement Dividend policy to take full advantage of any upturn in 13 May 2010 Annual General Meeting Our dividend policy is to increase dividend progressively while market conditions. maintaining a dividend cover (adjusted earnings per share/dividend 13 May 2010 Interim Management Statement per share) of at least 2x if earnings are increasing. However, in light 29 Jul 2010 Interim Results Announcement of the challenging trading environment faced by the Group, the Board concluded at the 2008 preliminary results that it was prudent to retain 11 Nov 2010 Interim Management Statement maximum flexibility for the Group. Therefore, alongside actions being taken on costs and in other areas of the business, the Board did not pay a final dividend for 2008 or any dividend for 2009. Key contacts Sly Bailey, Chief Executive Vijay Vaghela, Group Finance Director Online share dealing Paul Vickers, Secretary and Group Legal Director Trinity Mirror provides an -based service called Shareview Nick Fullagar, Director of Corporate Communications through Equiniti Limited. The service allows current shareholders Claire Harrison, Investor Relations Equity Analyst to sign up for e-communication and receive shareholder mailings electronically, buy and sell shares online using Shareview Dealing and send their voting instruction electronically if they have already registered for Shareview or have received a voting form with an electronic reference. For more information on the service, please see www.trinitymirror.com/ir/services/dealing/.

Design and production: Radley Yeldar www.ry.com Trinity Mirror plc Annual Report & Accounts 2009 1

Who we are 1 Our strategic goal Our strategic goal 1 Our performance 2 Group at a glance 4 Regionals 10 Nationals Our strategic goal is to build 14 Investment for the future 16 Chairman and a growing multi-platform media Chief Executive statement business, by developing and sustaining strong positions across print and digital, with products and services which meet the needs of our customers, Who we are Business review both readers and advertisers. 20 Group activities 20 Group strategy 20 Our marketplace 21 Group performance 23 Regionals division 25 Nationals division 27 Central 27 Balance sheet 29 Cash flow 29 Risks and uncertainties 30 Employees 30 Environmental and social Our performance 30 Key operating trends and outlook Business review Business Revenue Governance 31 Corporate responsibility report £763.3m 08: £871.7m 38 Board and management team 40 Corporate governance 46 Remuneration at a glance 47 Remuneration report Operating profit* 53 Directors’ report

£105.4m 08: £145.2m

Operating margin* Governance 13.8% 08: 16.7% Financials 56 G r o u p consolidated accounts 57 Consolidated income statement Profit before tax* 57 Consolidated statement of recognised income and expense 58 Consolidated balance sheet £72.7m 08: £124.2m 59 Consolidated cash flow statement 60 Notes to the consolidated financial statements 99 P a r e n t company accounts Earnings per share* 1 0 8 G r o u p five year summary

20.0p 08: 33.4p Financials

* The adjusted results on pages 1 to 19 exclude the impact of non-recurring items, the amortisation of intangible assets, the retranslation of foreign currency borrowings, the impact of fair value changes on derivative financial instruments and the impact of tax legislation changes. A reconciliation between the adjusted results and the statutory results is provided in note 39 on page 98. Trinity Mirror plc 2 Annual Report & Accounts 2009 Group at a glance Regionals

Trinity Mirror is one of the UK’s Revenue largest publishers. Our award winning portfolio includes £302.9m 1. Advertising £198.9m five national : the Daily 3. 2. Circulation £72.5m Mirror, the , The People, 3. Other £31.5m the and the . 2. We publish over 120 regional newspapers including household 1. names such as the Echo, the Mail, the and the Newcastle Chronicle. Our fast growing digital portfolio Nationals has doubled in size since 2008 and we publish over 400 digital Revenue products. These include newspaper companion websites and mobile sites £460.4m to complement our key newspaper 1. Advertising £132.9m 3. 2. Circulation £266.8m 3. Other £60.7m brands, hyperlocal sites which provide 1. news and community information on specific postcode areas and national platforms for recruitment and property advertising. 2. The Group employs over 6,500 people in more than 68 locations across the UK, including eight print sites. The Group has two trading divisions: Group Regionals and Nationals. Revenue £763.3m

1. Advertising £331.8m 3. 2. Circulation £339.3m 3. Other £92.2m

1.

2. Trinity Mirror plc Annual Report & Accounts 2009 3

Our Regionals division publishes a vibrant and diverse portfolio of market leading brands in print and digital media across the UK with more than 120 regional daily and weekly newspapers and over 400 digital products. See page 4. Who we are

Our Nationals division publishes five national newspaper titles which are among the UK’s leading media brands review Business complemented by a strong, multi-platform portfolio of digital businesses, events and exhibitions. See page 10. Governance

We have invested in our IT systems to enable us to re-engineer how we publish across print and digital, achieving efficiencies and a significantly lower cost base. Our programme of investment in our printing presses has not only improved the quality of our own titles but has also helped us to become the largest contract printer of newspapers in the UK. See page 14. Financials Trinity Mirror plc 4 Annual Report & Accounts 2009 Regionals Our Regionals division publishes a Revenue vibrant and diverse portfolio of market £302.9m 08: £396.0m leading brands in print and digital media across the UK with more than 120 regional daily and weekly newspapers Operating profit* and over 400 digital products. £35.9m 08: £68.2m

Operating margin*

11.9% 08: 17.2%

Websites 400+

Users 7m 20+ 0 12 Newspapers Annual Report & Accounts 2009 &Accounts Report Annual Trinity Mirror plc

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Financials Governance Business review Who we are Trinity Mirror plc 6 Annual Report & Accounts 2009

North West

Our North West region is segmented into four marketplace businesses: Merseyside, Cheshire, North Wales and Huddersfield. The portfolio 61% Reach in our markets includes the region’s award winning newspapers, the , Wales, , Huddersfield Daily Examiner and a variety of weekly titles including the . 40 Newspapers The business publishes digital products including newspaper companion sites, community platforms and mobile sites including 94 Websites the liverpoolecho.co.uk and examiner.co.uk.

North East

Our North East region comprises two businesses NCJ Media and Gazette Media which together publish the , 69% Reach in our markets , Evening Gazette and the . It also includes a broad range of free weekly newspapers, delivered direct to homes across Tyneside, Tees Valley and South Durham. 12 Newspapers The business publishes a range of websites including the popular companion websites chroniclelive.co.uk, journallive.co.uk, 88 Websites gazettelive.co.uk and sundaysun.co.uk, as well as prime business resource nebusiness.co.uk and local entertainment guide whatsonne.co.uk. specific websites dedicated to homes, jobs and motors in motors Wales. and jobs homes, to dedicated websites specific and extra Echo by walesonline.co.uk, supported is portfolio The titles. newspaper Weekly Celtic newspaper, Wales on Sunday, the Sunday South only Wales’ Mail, Western the of Wales, Walesnewspaper Echo and nine national the publishes Wales’ ‘Media region Wales South Our homes-midlands.com and motors-midlands.com. jobs-midlands, websites specific category alongside listings packed with up to the minute news, sport, blogsThe region and what’shas fully on interactive companion sites to our Post. newspapers, Stafford and Echo Loughborough the as such papers Birmingham business title and otherBirmingham weekly Mail and the Telegraph, theOur weeklyMidlands portfolio includes the leading daily titles, the SouthWales Midlands

60 60 15 70% 9 10 65% Websites Newspapers Newspapers Websites Reach in our markets our in Reach Reach in our markets our in Reach Annual Report & Accounts 2009 &Accounts Report Annual Trinity Mirror plc

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Financials Governance Business review Who we are Trinity Mirror plc 8 Annual Report & Accounts 2009

Scotland

In our business ‘Scottish & Universal Newspapers’ is Scotland’s biggest local publishing group across West, Central and 64% Reach in our markets East Scotland. The portfolio includes the Paisley , one of the most successful local daily newspapers in the UK and well established and popular weekly newspapers such as the Dumfries 23 Newspapers & Galloway Standard and Stirling Observer. The print titles are complemented by newspaper companion websites, 46 Websites as well as a number of community and recruitment websites.

South

Our Southern region publishes a portfolio of paid and free newspaper titles with a market reach across North Surrey, West London and 47% Reach in our markets Bucks that takes in the powerhouse London economy and major airports. The portfolio includes the Surrey Herald, the Staines News Series including Staines News, Egham News and Ashford News, 28 Newspapers the Buckinghamshire Advertiser, the Uxbridge Gazette, the Ealing Gazette and the . 136 Websites The portfolio is supported by newspaper companion websites, community sites providing the latest local news, sport and events and comments and information from the local community. facility in our paid for regional titles. regional for paid our in facility distribution network, a ‘print leaflet on a countrywide provides demand’ also Direct Amra customers. service party third and an inserting of behalf on and Trinity Mirror for both acts it press regional the For display, classified, recruitment and digital advertisingLondon, sales. and Scotland and is a leadingAmra force has beenin establishednational for over 25 years and has offices in research. market in-depth new online opportunities, supported by creative acrossconcepts the and UK. Its offering combines traditionalfor media regional with excitingpress, representing companies regional sales advertising national newspapers leading of the one is Amra and websites –  –  property. and of recruitment categories key revenue the in sites digital by national strengthened further is portfolio digital Our – – – – comprise: These markets. local our across reach our extends which Our print titles are complemented by a fast growing digital portfolio National advertising sales portfolio Digital new homes and targeted property brands such as email4property. as such brands property targeted and homes new for site UK’s the leading Smartnewhomes, We publish Property: fish4Jobs. sites, recruitment national leading UK’s of the one publishes which fish4, in a50% stake we own planetrecruit, secsinthecity and the careerengineer.leading Additionally, brands such as gaapweb, totallylegal, including sites, job of specialist anetwork We publish Recruitment: totallyfinancial, information. personalised and Mobile sites: Providing users with regularly updated local and deaths; and news motors plus important local services such as births,Classified marriages sites: Key categories of recruitment, advertisers; to local targeting property geographic precision and provide designed to be an indispensable guide are which content to user-generated and their editorial local relevant, highly communities and Hyperlocal sites: Serving specific postcodes and communities reach; local with advertisers with provide and which complement our key newspaper brands in localNewspaper markets companion websites: Unique editorial propositions

Annual Report & Accounts 2009 &Accounts Report Annual Trinity Mirror plc

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Financials Governance Business review Who we are Trinity Mirror plc 10 Annual Report & Accounts 2009 Nationals Our five national newspapers, which Revenue are among the UK’s leading media £460.4m 08: £475.7m brands, include two daily titles and three Sunday titles. Our newspaper titles are complemented by a strong Operating profit* portfolio of digital businesses, events £83.6m 08: £88.9m and exhibitions. Operating margin*

18.2% 08: 18.7%

National newspapers 5 Digital users 9m Mobile page impressions 2m 2m 5 8m Total Nationals readership Annual Report & Accounts 2009 &Accounts Report Annual Trinity Mirror plc

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Financials Governance Business review Who we are Trinity Mirror plc 12 Annual Report & Accounts 2009

Nationals

The division has two businesses, UK Nationals which publishes the , the Sunday Mirror and The People, and Scottish Nationals which publishes the two best read national newspapers in Scotland, the Daily Record and the Sunday Mail. There remains a strong demand for our journalism, for news and analysis readers can trust, delivered in a package that is easy to consume and popular with advertisers. From news and sport to politics and showbiz, every day of the week our newspapers provide our readers with campaigning journalism and compelling content at value-for-money cover prices. Our newspaper titles are complemented by a strong multi-platform portfolio of digital businesses, events and exhibitions. At the mirrorfootball.co.uk archive photo of our business lies our journalistic heritage and it is this which is providing the cornerstone for our multi-platform development as we take our brands and content across exciting new media platforms. Our stories have never been read by more people as we grow our business across print, online and mobile. Our digital portfolio comprises both newspaper companion websites and mobile sites. Our fast growing newspaper companion websites are viewed by an increasing number of unique users every month. Interactive services such as bingo and cashback add to the rich consumer experience. The digital portfolio also includes the recently launched mirrorfootball.co.uk and 3am.co.uk. mirrorfootball.co.uk combines the latest club-by-club breaking news, with the sharpest views in the sport, along with breathtaking images from our archives of the most famous moments in football. 3am.co.uk takes the world famous 3am recipe of gossip, exclusives, and attitude-laden fun-poking at the world of celebs and delivers it to a whole new audience online. Importantly, our sites have over 50% of users from the UK, the highest percentage among national newspaper websites, providing advertisers with a highly relevant audience of real scale. Our mobile sites further enhance our digital offering with unique personalisation tools and rich news content. We own and manage over 15 annual events which extend the reach and influence of our brands into a range of commercial markets. Events include the Daily Mirror , Great Scot Awards and the Scottish PLC Awards. Daily Mirror Pride of Britain Awards Britain of Pride Mirror Daily Annual Report & Accounts 2009 &Accounts Report Annual Trinity Mirror plc

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Financials Governance Business review Who we are Trinity Mirror plc 14 Annual Report & Accounts 2009 Group Investment for the future

Despite the tough trading environment Information Technology Trinity Mirror’s strategic goal is to build a growing multi-platform we have continued to invest in our IT media business with strong brands across print, digital and other and manufacturing capability. complementary media channels. To support the delivery of this strategic goal it is essential that our IT infrastructure and publishing Our programme of investment to modernise our publishing systems supports multiple media channels. operations and the implementation of our new operating model We continue to transform our IT infrastructure and systems, to across the business has resulted in a step change in the way we enable a fundamental shift in the way we publish. In particular we publish across print and digital. New state-of-the-art IT systems are now able to capture content efficiently from numerous sources have enabled us to re-engineer how we publish across editorial, and share that content across our businesses through a variety of advertising and pre-press. different media channels. Importantly we have not tried to do the same things with fewer Our advertisers are now able to self-serve through web-based people. Instead, using new technology, we have made fundamental access to our business which allows them to create and book changes to the entire publishing process, achieving efficiencies their advertising online. and a significantly lower cost base across all functions but without detriment to quality. Other benefits to the business include the ability to cost efficiently capture user-generated content and to deliver personalised services Over the past five years our investment in our printing presses has to individual customers and targeted communities. For our employees not only enabled us to improve the quality of our own titles, but also it means we can offer many of them flexible working, with the ability to become the largest contract printer of newspapers in the UK. to access our systems from anywhere and at anytime via the internet. Contract print revenues are stable and resilient to the business cycle, with contracts typically running over several years. Continuing to Along with the development of new IT infrastructure and publishing grow revenues in this area is a key management objective. systems, the functionality of our current systems has been significantly enhanced. The number of systems has been reduced, allowing better use of resources and an increased level of service across the business. IT has moved from being a location based function to a much more effective and efficient virtual service resulting in a significant reduction in IT costs. Newspapers Kent Messenger Group, and Tindleregional newspaper Independent, newspaper national major We print contracts. long-term secure, more with base revenue our to diversify helping is which objective akey strategic revenues, print expenditure. This has enabled us to develop valuablenational new contract to The creation of a unified print network has enabled the revenues. and Group opportunities commercial new generating thereby titles Trinity Mirror and our customers the ability Comprehensiveto add value inserting, to their stitching and trimming capabilities give those array the as Group the for revenues significant generates TMP addition, In of flexibility degrees high with cost operating low at products colour full quality high to is achieve goal Our sites. print eight magazines with together Trinity Mirror for capability finishing and printing afull provides (TMP) Printing Trinity Mirror Manufacturing

efficiently invest in full colour and finishing capability for its UK, the in printer contract newspaper largest

by inserting pre-printed sections, posters and readers’ offers of customers from national and regional newspapers, to

publishing special products and supplements. and products special publishing

and regional titles whilst minimising capital and operational

Ltd Group. the Racingthe Post and have contracts for numerous , , Newsquest, Press, Johnston as such groups , supplements and other products across products other and supplements ’ s national and regional newspapers newspapers regional and s national s such as the , the serving a wide .

Trinity Mirror print site print Mirror Trinity Annual Report & Accounts 2009 &Accounts Report Annual Trinity Mirror plc

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Financials Governance Business review Who we are Trinity Mirror plc 16 Annual Report & Accounts 2009 Chairman and Chief Executive statement

As expected, 2009 proved to be another We continued to actively manage our portfolio of media brands, to ensure we are publishing the best mix of media across print and challenging year for the media industry as digital to serve the needs of readers and advertisers in each of our markets. Effective portfolio management ensured we maintained it dealt with the ongoing adverse effects of strong market positions while supporting profitability. Against these the material slowdown in the UK economy. objectives, we announced a number of publishing changes to the format and frequency of our regional newspaper titles, also closing Against a difficult economic and trading background management or selling 30 regional newspaper titles during the year. have taken decisive action, focusing on leading the business through We also continued with our programme of investment to modernise the recession, while continuing to develop the business for longer our publishing operations. The implementation of our new operating term growth. model across the business has resulted in a step change in the way In common with other consumer-facing media businesses we we publish across print and digital. New state-of-the-art IT systems saw all categories of advertising revenues suffer significant declines. have enabled us to re-engineer how we publish across editorial, Circulation revenues were also impacted as consumers sought to advertising and pre-press. Importantly we have not tried to do the reduce discretionary spend, but pleasingly, demonstrated same things with fewer people, instead, using new technology, we substantially more resilience than advertising. have made fundamental changes to the entire publishing process, achieving efficiencies and a significantly lower cost base across all In response to declining revenues and inflationary cost pressures, functions but without detriment to quality. As a result the business particularly steep newsprint price increases, we put in place a is leaner, fitter and well positioned to take full advantage of any comprehensive package of self-help measures with the objective upturn in market conditions. of reducing our cost base. Initiatives included a reduction in headcount of some 1,700, around 20% of the total, a Group-wide Despite the difficult market conditions, we continued to invest in pay freeze, the closure of 15 offices and one print plant and tight developing the portfolio with the launch of a number of new online management of all discretionary spend. These measures enabled brands such as mirrorfootball.co.uk, 3am.co.uk and localmole.co.uk. the Group’s cost base to fall significantly during the year. Each of these new sites has been well received by the market and they are growing steadily, gaining a loyal and engaged user base. Our continued investment in our digital businesses ensured that we increased our audience reach with average monthly unique users across the Group’s portfolio of digital brands increasing by 41% year on year and by 15% from the first half of 2009 to reach 17 million in the second half. of scale. towards our strategic goal of creatingextends a our local reach acrossmulti-media print and onlinebusiness and is a further stepheritage, together with the weekly titles and theassociated websites perfect strategic fit for our Group. This acquisition,due to complete which includes on 28 March 2010. GMG ofRegional Media is a contracts to acquire GMG Regional Media for aThe cash Group consideration announced on 9 February 2010 that it had exchanged Media Regional GMG media becomes regulator, the that , proposed and businesses media regional and by local faced challenges the acknowledged OFT the multi-platform media world. In its finaltoday’s to reflect regime merger of the report updating an for case the published in June, and sector our in groups of other anumber with We joined media. local facing regime merger of the areview conducted During the first half of the year, the Office of Fair frameworkRegulatory for newspapers Trading (OFT) trading by week additional the and increases cost inflationary after base, cost the in resulted has which action management to £105.4by £39.8million reflecting fell only million profit operating by £108.4 fell to £763.3 revenues million million, Group Whilst The investment in our presses. our in investment objective. At this stage we do not envisagecontinuing any further tomaterial grow revenues in this area iscycle, a key managementwith contracts to business the typically resilient and stable more are runningrevenues print overContract several years and UK. the in of newspapers printer contract largest the now we are and years has enabled us to win print five past the contracts over presses printing our in investment titles, from own our other publishers revenue, up from 50% in 2008. As well as advertisingimproving revenuesthe quality nowof accounting non-classified with resilient more becoming are for revenues 58%advertising of total advertising for account now revenues Non-advertising of revenues. mix resilient amore in results revenues advertising our on downturn of the impact Our strategy of diversifying our revenue streams coupled with the display. including of 22.7% revenues, digital other in growth significant to see we continued property, and recruitment However, downturn. of the excluding severity by the hit being market £3 by 18.3% year the to during declined revenues digital Group target. of our ahead £5 million savings, cost of structural £40 million

£7.4 million, from plc, with the transaction

5.6 £6

57% of total revenues, up from 51% in 2008. In addition, our with its proud and rich journalistic

reduction formed the Local Media Alliance, through which we pressed 7.9

million advice, a development which we welcomed. which adevelopment advice,

in 2009, the cost base fell by £7 fell base cost the 2009, in million. Excluding the impact of the additional week additional of the impact the Excluding million.

involved in future merger cases to provide expert expert to provide cases merger future in involved , with digital recruitment and property across the in costs is ahead of our £65 million target and includes includes and target million £65 of our ahead is costs in 3.6 million year on year. ’ s trading, falling falling s trading, and regional ’ s

growth once trading conditions improve. conditions trading once growth profit and revenue future see to which from position strong a profit, revenue represented 10.2% of revenues andgrowing 18.4% by 11% of operating year on users year unique monthly average to to with grow continued 7 audience millionOur per month. In 2009, digital year. on by 38.3% grown year has revenue digital property, and 18.9% recruitment year. on year Excluding by fell revenue digital market, property afragile and unemployment property being hit by the cyclical downturnDespite and this, the impactsdue to ofour rising major revenue categories of recruitment tools. media social and sites mobile and existing portfolio with the addition of new businessnumber directories,of new digital products and of a launch the through markets local into our reach our extending businesses, digital of our growth the in to invest We continued have savings. cost structural significant in resulting headcount in reduction a and efficiencies in change astep delivering digital, and print across we publish how to us modernise allowed has model across editorial, advertising and Wepre-press. also made Thegood new progress model in implementing our new operatingcosts. reduced further which structure management simpler, flatter we introducedportfolio restructured a with Along unprofitable. a of of anumber frequency and to format the changes We made costs. by reducing headcount, closingefficiencies premisesincreased achieved andhave We profitability. reducing to support place infrastructure was in put of measures package acomprehensive and downturn Our focus in 2009 has been on managing the business through by 47.4%falling the to £35.9 million. million £68.2 from profit operating and to £302.9by 23.5% million million £396.0 from The challenging market conditions contributed to revenues falling of than circulation revenues and, secondly,revenues advertising of proportion higher toon a firstly, reliance to fact that the majority Regional businesses are hit particularly hard by the recession due, extent. lesser has also impacted circulation and othera fragile revenues, housing although market to and a fallingunemployment, rising reflecting motors and car property sales. recruitment, on The slowing economypressure particular with revenues advertising in falls significant driven has economy the in downturn continued The industry. newspaper regional the for year challenging to another be proven has 2009 Regionals

titles, closing or selling 30 newspaper titles which had become become had which titles newspaper 30 selling or closing titles, is classified. advertising its d ivision Annual Report & Accounts 2009 &Accounts Report Annual Trinity Mirror plc

improving and expanding our

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Financials Governance Business review Who we are Trinity Mirror plc 18 Annual Report & Accounts 2009

Chairman and Chief Executive statement

Nationals division Total digital revenues across our Nationals portfolio of online brands fell by 14.3% year on year with bingo revenues declining Our national titles performed strongly throughout 2009, showing the due to increased competition and the impact of the recession. business to be highly resilient through the downturn with revenues down by 3.2% from £475.7 million to £460.4 million and operating Average monthly unique users grew year on year by 78% to 9 million profit down by only 6.0% from £88.9 million to £83.6 million, reflecting per month. With over 50% of website users from the UK, the highest the greater proportion of circulation revenue. proportion within the peer group, this is a characteristic highly prized by advertisers. The Daily Mirror and the Daily Record achieved a joint circulation in excess of 1.6 million copies per day on average during 2009 with readership per issue of nearly 4.5 million. Our national Sunday titles Capital expenditure – the Sunday Mirror, The People and the Sunday Mail – achieved We continued to tightly manage our capital expenditure spending a joint circulation in excess of 2.2 million copies per week on £14.8 million during the year. The capital expenditure included average in 2009 with readership per issue in excess of nearly £6.3 million spent on presses and £7.6 million on IT systems. 5.9 million. During the year, we introduced a completely new look The gross capital expenditure of £14.8 million was offset by the for The People – modern, vibrant and energetic – which better receipt of £8.9 million from property and other asset disposals. reflects the new personality of the paper and has improved the We envisage gross capital expenditure will be some £15 million circulation volume trend. in 2010. The Sunday Mail continues to be the biggest selling newspaper Net debt in Scotland, with a circulation which is nearly 100,000 copies larger than the next best-selling title. Both Scottish newspapers are clear The Group continued to generate strong cash flows during the year market leaders in readership terms with the Daily Record reaching even though revenues and operating profit were adversely impacted 6% more readers than the number two title in the market and the by the economic downturn. The strong cash generation enabled net Sunday Mail having 68% more readers than the next best-read debt on a contracted basis to fall by £60.2 million to £324.0 million Sunday title. during the year. On a statutory basis, net debt fell by £48.9 million to £299.8 million. Across popular newspaper market, circulations continued to decline year on year. The circulation performance of Our strong cash flows and prudent management of our financing our five national titles reflects our policy of not chasing short-term facilities ensured that the Group maintained significant financing circulation volume through cover price discounting and levels of flexibility with no drawings on the Group’s £178.5 million bank marketing spend which do not provide a return on investment. facility which is committed until June 2013. Our titles have a higher proportion of full rate sales within their The next repayment of our private placement debt facility is £145 million audited ABC circulations than any of their national competitors. in October 2011. We expect this to be repaid through a combination Whilst circulation volumes have been under pressure, our of surplus cash balances, cash flows generated by the business and circulation revenue performance was supported by price increases drawings on the Group’s £178.5 million bank facility which is currently during the year. In January 2009, we increased the Monday to undrawn and fully committed to June 2013. Friday cover price of the Daily Mirror from 40p to 45p, with the Saturday price unchanged, and the Daily Record cover price from Pension schemes 35p to 40p on Monday to Friday and from 60p to 65p on Saturday. During 2009, our IAS 19 pension scheme deficit increased by Also in January 2009 the Sunday Mirror cover price was increased £89.7 million to £296.6 million. Whilst asset values improved by from 95p to £1.00, the Sunday Mail rose from £1.20 to £1.30 and in £164.5 million, liabilities increased by £304.3 million reflecting August 2009 the price of The People increased from 90p to 95p. the impact of a fall in the real discount rate from 3.75% to 2.20%. The advertising market for national newspapers remained difficult The increase in the IAS 19 pension scheme deficit was partially throughout 2009. Pleasingly, despite the impact of the challenging offset by a fall in the asset ceiling adjustment of £50.1 million. market conditions, all five of our national titles increased their Following an extensive consultation process, the Group announced advertising volume market share which is testament to their the closure of all defined benefit pension schemes to future accrual strength and appeal to both readers and advertisers. from 31 March 2010. All active members of the defined benefit pension schemes will now have the option to join the Trinity Mirror Pension Plan, a defined contribution pension scheme, from 1 April 2010. the by mid single digits. single by mid to decline expected are revenues Circulation prevail. visibility limited and volatility month on month although year the through we progress as to improve revenues advertising in rate of decline the we expect 2010, for 6%. stage, At this by around fell February and January both for revenues Circulation in February. on year year flat almost were and January, 8% in February and for 3% in fell the Regionals the for revenues Nationals Advertising Regionals. the for grew by 2% in January is performance revenue advertising January The 5%and February. in 3% and 6% respectively. Advertising Inrevenues January andfell February by 1%2010 in JanuaryGroup revenues fell by a muchhalf. of 28% first the in reduceddeclines revenues with declines of 17% advertising been has inimprovement thesignificant most secondThe half. first the half compared to of 17% in to adecline year on year by compared 10% year on year week’s trading) additional of the impact the (excluding half second progressed through the year with the Group revenuesThe Group’s revenue performance continued to improve outlook and trends asKey operating we – –  –  are: environment trading the dividends. The key factors that to reinstate look the will Board the improves Board environment trading the willWhen consider in assessing Dividend work. hard and commitment their for them we thank Board, of the behalf On tenacity. and enthusiasm determination, with markets our in challenges extraordinary the faced Throughout 2009, our staff across all areas of the business,Employees have 

continued improvement in the cash flows generated by the business. by the generated flows cash the in improvement continued and recession; of out come firmly has economy the that evidence clear revenues; advertising particular in revenues, in visibility improved and stability year on year distorted by the additional week’s trading in 2009 which covers

period around New Year’s Day which is the weakest trading period

falling in the Executive Chief Bailey Sly performance for 2010. cautious about the economic outlook, it anticipatesvalue awhen satisfactory market conditions improve. maximise to positioned is well Group Whilst the that confidence Board thethe Board remains management of the cost base and falling tight on focus ongoing the revenues, newsprint advertising in trends prices gives generated by the Group, secure longerOur term improved financing, financial improving position due to the strong cash flows 2010in £15 to around be million. which will assist in protecting reductions, profits.price newsprint of benefit the excluding and Weincreases expect restructuring costs cost inflationary 2010, in absorbing million £20 after of least at base cost the in reduction afurther We targeting are target. of our ahead £67.9 was limited to £39.8 million due to profits by in £108.4 fell fall the revenues the million, Whilst 2009. during benefit of costs falling by rewards reaped has recession post growth for Group the developing Our strategy of protecting profits during the downturn whilst

million, including structural cost savings of £40 million, £5 million Annual Report & Accounts 2009 &Accounts Report Annual Trinity Mirror plc Chairman Gibson Ian Sir

CBE 19

Financials Governance Business review Who we are Trinity Mirror plc 20 Annual Report & Accounts 2009 Business review

The Business review has been prepared for the 53 weeks ended The complementary mix of advertising revenues and the more 3 January 2010 and the comparative period has been prepared for resilient circulation revenues and other revenues continued to ensure the 52 weeks ended 28 December 2008. Unless otherwise stated, that total revenues declined at a lower rate than the reduction in numbers are presented on an adjusted basis to provide a more advertising revenues. The Group revenues for the period and year meaningful comparison of the Group business performance between on year change, by category and division, are as follows: 2008 and 2009. Adjusted results exclude the impact of non-recurring

items, the amortisation of intangible assets, the retranslation of foreign Regionals Nationals Total currency borrowings, the impact of fair value changes on derivative Regionals variance Nationals variance Total variance financial instruments and the impact of tax legislation changes. £m % £m % £m % A reconciliation between the adjusted results and the statutory Advertising 198.9 (29.5) 132.9 ( 7.8) 331.8 (22.2) results is provided in note 39 on page 98. Circulation 72.5 (6.0) 266.8 (0.5) 339.3 (1.7) Group activities Other 31.5 (13.9) 60.7 (4.1) 92.2 ( 7.7 ) Trinity Mirror is one of the UK’s largest newspaper publishers with Total an award winning portfolio including five national newspapers, over revenue 302.9 (23.5) 460.4 (3.2) 763.3 (12.4) 120 regional newspapers and more than 400 digital sites. The Group employs over 6,500 people in more than 68 locations across the UK, including eight print sites. The Group has two trading divisions: While advertising revenues have fallen to unprecedented levels due Regionals and Nationals. to the downturn, we have seen an improvement in the rate of decline as we progressed through the period. Our advertising performance for the Regionals is in line with the market and for the Nationals we Group strategy have been able to grow the advertising volume market share. Although Our strategic goal is to build a growing multi-platform media business, more resilient, circulation revenues have also been impacted with by developing and sustaining strong positions across print and digital, consumers cutting discretionary spend. As a result, circulation volume with products and services which meet the needs of our customers, declines have not been fully mitigated by cover price increases. Other both readers and advertisers. revenues, which include contract printing, waste sales, events, reader offers and leaflets also declined. Against a difficult economic and trading background management have taken decisive action, focusing on leading the business through Group digital revenue declined due to cyclical factors but the Group the recession, while continuing to develop the business for longer continues to increase its audience reach. The Group continued to term growth. develop and build its portfolio of digital brands and these will ensure that the Group is well positioned to take advantage of growth Our marketplace opportunities when market conditions improve. The UK economy was in severe recession in 2009 with GDP The mass circulation of our titles combined with our digital offering forecast to decline by 4.5%. Consumer facing businesses have continues to generate significant reach and readership and provides been particularly impacted with businesses and consumers a large and appealing audience for advertisers. reducing spend. Rising unemployment, falling car sales, a weak The latest GDP estimate for the last quarter of 2009, at 0.3% growth, property market and a challenging retail environment resulted in officially brings to an end the recession, though the Group continues significant advertising revenue declines across all categories with to experience advertising and circulation revenue declines. Whilst circulation and other revenues also impacted. we cannot control the macro-economic environment we have been, and are still, taking significant management action to protect profitability and cash flows in order to maintain a healthy financing position. The benefits arising from the new operating model and other management action have enabled the Group to substantially reduce its fixed cost base. Earnings per share per Earnings a loss of £88.4 million to a profit toof £87.0 aprofit of £88.4 million a loss million. by £ improved profit operating to and £763.3 million On a statutory basis revenues fell by £108.4 million from £871.72.9% to million13.8%. £145.2 million to £105.4 million. revenuesOperating onmargins operating decreased profit by which fell by Asubstantial £39.8 fall. this million (27.4%) from £763.3 million with advertising revenues by £108.4 (12.4%)contributing fallen have million Revenues £871.7 from £94.7 to million million of Profit before tax (charge)/ Investment revenues, pension finance profit Operating Adjusted results Share of results of associates of results Share Earnings/(loss) per share tax before Profit/(loss) (charge)/ Investment revenues, pensions finance Operating profit/(loss) of associates) items non-recurring Non-recurring items (including share of of intangibles Amortisation Operating costs Operating Revenue costs Operating costs Other Depreciation Newsprint Labour Revenue Statutory results G non-recurring items) of of results Share roup credit and finance costs finance and credit credit and finance costs finance and credit

performance associates (before reduction in costs limited the impact of falling of falling impact the limited costs in reduction 53 weeks 53 weeks 53 (658.4) (658.4) (255.6) (251.5) (114.5) 20.0p 763.3 763.3 105.4 11.5 (36.8) (32.7) (45.0) ( 42.0 72.7 11.3) 87.0 2009 2009 (7.1) 0.5 0.5 £m £m p

175.4 million from 52 weeks 52 weeks (293.5) (22.6)p (226.3) (726.3) (726.3) (279.4) 33.4p (115.4) 145.2 124.2 871.7 871.7 (38.0) (73.5) (88.4) (21.0) 2008 2008 14.9 (0.2) (0.2) 7.3) ( £m £m

Variance Variance (402.0) 350.0 350.0 198.4 150.9 157.1 (55.7) (12.4) (12.4) (41.5) (27.4) (40.1) 9 10.0 12.9 3.2 0.8 9.3 9.3 5.0 2.7 % %

the new operating model for the Group. the for model operating new the in delivery of the cost reduction measures of £17.9 costs and implementationRestructuring £25.1 (2008: million incurred were million) of units). cash-generating South the and Midlands the in titles and rights to publishing £190.0 (2008: relating assets Group’s million intangible in required was impairment no of the carrying values of that the concluded assets of intangible value carrying of the review The nature. in off one are they as Group of the performance have been separately disclosed to provide items year. the Non-recurring during clarity incurred were million) £226.3 in relation to the Non-recurring charges before tax of £ tax before charges Non-recurring restructuring costs of around costs restructuring were incurred in delivering cost savings. We expectNon-recurring non-recurring restructuring costs of £17.9 million period. the during (2008: headcount in reduction of the aresult part in £25.1 million) of £14.6 £24.1 (2008: service is million current reduction The million). for charge pension benefit 19 IAS the defined include costs Operating target. of our ahead £5 million savings, cost of structural £40 million includes and target million £65 of our ahead by £7 fell base cost Non-recurring items Non-recurring £nil). (2008: associates £0.5 million). During the period no dividends (2008: of £0.6 million charge £1.8 (2008: £nil ataxation and were million) received from of items £1.1non-recurring less profit) £0.3 (2008: million million Group’s share of profit before non-recurring the reflects loss).This £2.0 (2008: million £0.5of million aprofit was items and taxation of PA the Limited, Group associates, from Group’s of results The share week additional of the impact the Excluding particula pressures, inflationary significant despite costs reduce to taken action the reflecting £726.3 to £658.4 million million Total operating costs decreased by £67.9 million (9.3%)(13.6%) (30.3%).by fell £44.0frommillion profit operating and of the additional week’s trading impact in the Excluding 2009, of profit £4.2million. operating and £9.9revenues million fell by £118.3 million The additional week’s trading in 2009 contributed revenue of Non-recurring items of associates items of non-recurring Share Impairment of fixed assets of fixed Impairment liabilities scheme benefit Defined Impairment of receivable Impairment businesses of disposal on (Loss)/profit buildings and land of disposal on Profit costs Restructuring assets of intangible Impairment 3.6 million year on year. The reduction in costs is is costs in year. on reduction year The million £ 15 million in 2010. in million Annual Report & Accounts 2009 &Accounts Report Annual Trinity Mirror plc 11.3 million (2008:

’ s trading in 2009, the

53 weeks 53 ( (17.9) 11.3) 2009 rl (2.4) (6.0)

9.9 5.1 y newsprint. £m – – – 21

52 weeks (226.3) (190.0)

(14.3) (25.1) 2008

(1.8) 0.3 4.6 £m – –

Financials Governance Business review Who we are Trinity Mirror plc 22 Annual Report & Accounts 2009

Business review

We disposed of surplus land and buildings realising a profit on The IAS 19 pension finance charge which represents an assumed disposal of £5.1 million (2008: £4.6 million). This reflects the benefit return on assets and the unwinding of the discount on liabilities within of our ongoing plan to rationalise the property portfolio and reduce the Group’s defined benefit pension schemes was £10.5 million property costs. (2008: £11.4 million credit). The IAS 19 pension finance charge is calculated on the basis of the opening IAS 19 pension deficit. The Group disposed of Globespan Media Limited incurring a loss on disposal of £2.4 million (2008: £0.3 million profit on disposal The interest expense, which includes interest on bank overdrafts and of certain newspaper titles within the Midlands). Globespan Media borrowings and interest on obligations under finance leases, decreased Limited contributed £0.5 million to revenue and incurred an operating by £14.0 million from £36.4 million to £22.4 million, reflecting lower loss of £0.5 million in the first half of 2009 (2008: revenues of interest rates and reduced debt levels, in particular the payment in £2.8 million and an operating loss of £0.4 million). October 2008 of £61.4 million under the private placement. Non-recurring items also include a £6.0 million write-off of circulation The impact of fair value changes in derivative financial instruments receivables. The write-off relates to the amount due from Dawson and the retranslation of foreign denominated borrowings resulted which went into administration during the year. Since Dawson went in a net charge of £12.3 million (2008: £35.9 million credit). into administration, £1.0 million has been received and this reflects Net interest costs, being interest expense less investment revenues, the reduction in the bad debt provision from the £7.0 million provided were covered 4.7 times (2008: 4.5 times) by operating profit. in the first half. Profit before tax fell by £51.5 million from £124.2 million to £72.7 million Defined benefit scheme liabilities have been reduced by £9.9 million reflecting the fall in operating profits and the pension finance charge in respect of the curtailment gain relating to a reduction in staff of £10.5 million for the period compared to a £11.4 million pension numbers and the Group indicating that it will no longer exercise finance credit in the prior period, a year on year adverse movement discretion in providing enhancements to past service benefits on of £21.9 million, partially offset by lower net interest costs. redundancy. In 2008, a review of our printing fixed assets concluded that the 2009 2008 carrying value was impaired by £14.3 million as a result of our decision 53 weeks 52 weeks Variance to close the Liverpool print plant and move the printing to Oldham. £m £m £m Operating profit 105.4 145.2 (39.8) In 2008, the Group’s share of non-recurring items of associates was £1.8 million. Pension finance (charge)/credit (10.5) 11.4 (21.9) Net interest costs (22.2) (32.4) 10.2 Finance items Statutory Adjusted Profit before tax 72.7 124.2 (51.5) 2009 2008 2009 2008 53 weeks 52 weeks 53 weeks 52 weeks On a statutory basis, profit before tax improved by £115.5 million from £m £m £m £m a loss before tax of £73.5 million to a profit before tax of £42.0 million. Investment revenues 0.2 4.0 0.2 4.0 The improvement in profit before tax is driven by a material reduction in non-recurring items which fell from £226.3 million to £11.3 million. Pension finance (charge)/credit (10.5) 11.4 (10.5) 11.4 This has been partially offset by a reduction in operating profit and a Interest expense (22.4) (36.4) (22.4) (36.4) charge for finance items of £45.0 million (2008: £14.9 million credit). Fair value (loss)/gain on The adjusted tax charge of £21.6 million (2008: £36.9 million) for the derivative financial instruments (45.6) 140.1 – – period represents 29.7% (2008: 29.7%) of profit before tax. The statutory Foreign exchange gain/(loss) tax charge for the period was £12.7 million (2008: £14.4 million credit) on retranslation of borrowings 33.3 (104.2) – – reflecting a current year charge of £12.0 million (2008: £19.3 million credit) and a prior year charge of £0.7 million (2008: £4.9 million Total finance items charge including impact of tax legislation changes) together (charge)/credit (45.0) 14.9 (32.7) (21.0) representing 30.2% (2008: 19.6%) of the statutory profit before tax. Profit after tax fell by £36.2 million from £87.3 million to £51.1 million Investment revenues decreased to £0.2 million (2008: £4.0 million) with earnings per share falling by 13.4 pence from 33.4 pence to due to lower average cash balances and reduced interest rates. 20.0 pence, a decrease of 40.1%. On a statutory basis profit after Cash balances were high at the start of 2008 following the disposals tax improved by £88.4 million from £59.1 million loss after tax to a in 2007 and were utilised in the payment, at the start of 2008, of the £29.3 million profit after tax. On a statutory basis, earnings per share balance of the special contribution to the trustees of the defined improved by 34.1 pence from a 22.6 pence loss per share to a benefit pension schemes and in the purchase of shares under the 11.5 pence profit per share. share buy-back programme. When the trading environment improves the Board will look to reinstate dividends. In 2008, the directors declared and paid an interim dividend of 3.2 pence per share and no final dividend was paid. Revenue by division, on a statutory and adjusted basis, is set out below: out set is basis, adjusted and astatutory on by division, Revenue Total r Other Circulation Regionals Advertising below: out set is basis, adjusted and astatutory on by type, Revenue analysis revenue Group end of 2010.end focused on achieving our target of remain and 24 launches new in invest million to appropriately continued have unique users by the half. We remain committed to growing our digitalby 15% business fromand the first half of 2009 to averagereach monthly17 million unique in users the increasingsecond by 41%strong andyear the on Groupyear andcontinues to increase itsdisplay, audience reachmotors with and other in growth categories. seeing still we are property and of recruitment Audienceverticals growth remains key digital our to impact continues downturn of the severity the While 2008. 50% in from up revenue, advertising revenues now accounting non with resilient for more becoming are 58% revenues ofadvertising total advertising for 57% of total revenues, account now up revenues from Non-advertising 51% of revenues. mix resilient in 2008. In addition, our amore in results revenues advertising our on downturn of the impact Our strategy of diversifying our revenue streams coupled with the £460.4 million. by 23.5% to £302.9 million and for thea Nationals fell by 3.2% to of 22.2%,revenues advertising £871.7in decrease a to reflecting £763.3 million million by £108.4 (12.4%) fallen have million revenues Group from Total revenue Nationals

decrease in other revenues of 7.7%. Revenue for the Regionals fell evenue a decrease in circulation revenues of 1.7% and 53 weeks 53 53 weeks 53 302.9 339.3 460.4 763.3 763.3 331.8 92.2 2009 2009 £m £m

52 weeks 52 weeks 396.0 345.3 426.5 475.7 871.7 871.7 99.9 99.9 2008 2008 £m £m

- classified

Variance Variance

(23.5) (22.2) (12.4) (12.4)

(3.2) (1.7) . ) 7.7 (

% %

Impairment profit operating Adjusted Associates Central Nationals Amortisation items non-recurring Other below: out set is basis, adjusted and statutory on a profit/(loss), Operating analysis profit operating Group in Relevant key performance indicators for each division are included competitors. of our that and strategy publishing our of account taking comparators or of competitors ahead or with line in performance to target seeks Group the 2009, in experienced have we as market, adeclining In reach. and users unique volumes, circulation These include revenue, operating financial. profit primarily are Group the for indicators and operating key performance The margin, Key indicators performance by £1 increased profit operating Group basis astatutory On £83.6 million. £35.9 million and the Nationals operating profitto £105.4 fell by £5.3 million. million Regionals to operating profitGroup operatingfell by profit£32.3 fell million by £39.8to million (27.4%) from £145.2 million operating Statutory profit/(loss) Regionals Regional Press Awards. Press Regional awards at the Newspaper Society Awards and theby Pressnumerous Gazette industry awards during recognised been the has workforce period, professional motivated highly and including several 47 and Wales South in 61 East, North the in 64 basis aweekly on reaching geographies, their in population adult the amongst reach asignificant have brands our of 8.7 readership of 5.1 and copies million circulation aweekly have newspapers for paid and free regional Our websites 40 on 28 March 2010 will add a further 30 newspaperand property. titles Theand completionover of recruitment the in sites national and GMG motors and Regional property recruitment, Media acquisition postcodes and communities and local specific sites serving sites hyperlocal in titles, keythe to newspaper our websites key verticals of population on a weekly basis. Ourgeographical digital portfolio includes of our companion majority the In titles. newspaper 120over free and for paid across print and digital media in the UK.The RegionalsThe print division portfolio publishes includes an extensive portfolio of brandsRegionals division

the respective sections of the Business r Business of the sections respective the 75.4 million from a loss of £88.4 million to a profit toof £87.0 aprofit of £88.4 million aloss 75.4 from million. million . regions, our regions, % in the North West, 70 North the % in % in the South. The strength of our brands reach over 60% over reach titles of print the adult Annual Report & Accounts 2009 &Accounts Report Annual Trinity Mirror plc million. million. 53 weeks 53 eview. % in the Midlands, 65 Midlands, the % in 105.4 (14.6) ( 35.9 83.6 11.3) 87.0 2009 (7.1)

0.5 £m % in Scotland, 69 Scotland, % in – n our key markets key markets n our

52 weeks (190.0) (190.0) 145.2 (36.3) (88.4) 68.2 88.9 88.9 (11.7) 2008 (0.2) (7.3) 23 £m

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(24.8) (27.4) 68.9 (47.4) (6.0)

% 2.7

%

%

Financials Governance Business review Who we are Trinity Mirror plc 24 Annual Report & Accounts 2009

Business review

2009 has proven to be a challenging year for the regional Financial performance newspaper industry. The continued downturn in the economy has The adjusted revenue and operating profit for our Regionals division driven significant falls in advertising revenues with particular pressure are as follows: on recruitment, property and motors reflecting rising unemployment, a depressed housing market and reduced car sales. The slowing Revenue and operating profit economy has also impacted circulation and other revenues, although 2009 2008 to lesser extent. 53 weeks 52 weeks Variance Regional businesses are hit particularly hard by the recession due, £m £m % firstly, to the reliance on a higher proportion of advertising revenues Revenue than circulation revenues and, secondly, to the fact that the majority Print and other related activities 272.1 358.0 (24.0) of its advertising is classified. Digital activities 30.8 38.0 (18.9) Given the deteriorating economy and consequential impact on revenues, management focus in 2009 has been on navigating Total revenue 302.9 396.0 (23.5) the business through the downturn through delivering significant Operating profit structural cost savings thereby reducing infrastructure costs and in driving efficiencies with the implementation of the technology Print and other related activities 29.3 56.3 (48.0) led operating model which modernises how we publish across Digital activities 6.6 11.9 (44.5) print and digital. Total operating profit 35.9 68.2 (47.4) A comprehensive package of measures was put in place to protect profitability. A strong focus on portfolio management, ensuring we Operating margin 11.9% 17.2% (5.3) publish the right mix and frequency of titles to best drive revenue and profit, saw changes made to the format and frequency of a number of Revenue fell by £93.1 million (23.5%) from £396.0 million to titles and we closed or sold 30 newspaper titles which had become £302.9 million. Costs fell by £60.8 million (18.5%) from £327.8 million unprofitable. We introduced a simpler, flatter management structure to £267.0 million despite inflationary cost pressures. The tight and took other action including reducing headcount by over 25%, management of costs contained the fall in operating profit to vacating 15 offices and minimising discretionary spend. £32.3 million (47.4%) from £68.2 million to £35.9 million. Despite cost During the year management made good progress in implementing savings, the reduction in revenues resulted in the operating margin the new operating model. Actions included: falling from 17.2% to 11.9%. – the integration of the Advertising Production and Advertising The additional week’s trading in 2009 contributed revenue of Planning activities of the South and North East regions into the £2.4 million and operating profit of £0.6 million. Excluding the impact Midlands pre-press operation; of the additional week’s trading in 2009, revenues fell by £95.5 million (24.1%), costs fell by £62.6 million (19.1%) and operating profit fell by – best practice structures in Editorial and Advertising were rolled £32.9 million (48.2%). out across the whole portfolio; and Print and other related activities revenues fell by £85.9 million and – transport, distribution and wholesale management structures operating profit fell by £27.0 million driven by a significant reduction in were consolidated. advertising revenues. Digital revenues decreased by £7.2 million and During the fourth quarter of 2009, the Liverpool print plant was operating profit fell by £5.3 million. The advertising revenue falls for our closed, with titles transferred to the Group’s Oldham print plant. regional business are in line with market performance. We have continued to invest in digital growth, extending our reach Digital represents 10.2% of revenues and 18.4% of operating profit. into our local markets through the launch of a number of new digital Our focus on diversifying our digital revenues continued with products and improving and expanding our existing portfolio with the recruitment now representing 45.8% of digital revenues, property addition of new business directories, mobile sites and social media being 17.9% and other categories being 36.3%. Revenues include tools and developing new products such as Workthing+ for our our organic activities, our acquired businesses and revenues from national recruitment proposition. Whilst revenues are under pressure upselling to fish4. due to the cyclical pressures of the recession, monthly unique users Revenue for our Regionals division by type is set out below: across our websites continue to grow, demonstrating clear growth in audience reach, with average monthly unique users growing by 11% 2009 2008 year on year to 7 million per month. 53 weeks 52 weeks Variance £m £m % Advertising 198.9 282.3 (29.5) Circulation 72.5 77.1 (6.0) Other 31.5 36.6 (13.9) Total revenue 302.9 396.0 (23.5) Recruitment categories Advertising below: out set is category by key advertising division Regionals our for Revenues comparatives by weaker offset partially UK the in conditions economic challenging of the impact the reflects revenues 18.5%. advertising in trend The revenue quarter 16.5% and fourth the in quarter 28.2% quarter, third the in second the through the year with declines of 35.1% in the first quarter, 33.9% in Display (29.5%) Regionals a Other classified Motors Property By category the performance for the year the for performance the category By levels. reduced at falling performed relatively better with public sector anddespite retail the spending car scrappage scheme. sales car Display secondhand and new in slowdown asevere and otherexperienced classified finance. Motors advertising fellmortgage of by of availability lack 30.8% the and buyers fewer with assignificantly the motors market declined sales home by 45.4% fell second and new both revenues as unemployment and the growing claimant in rise by the count. evidenced was market jobs slowing The base. Propertycost advertising recruitment freezes and redundancy programmes place in putting by 48.4% fell employers with revenues toRecruitment reduce their reduced. much now is business overall the on impact their term short the in challenging remain categories these Whilst 13.9%) revenues. 6.3% and 6.4%) (2008: of advertising respectively 19.8% represent now 27.0%), (2008: advertising motors 10.8% (2008: declines material most the experiencing reflecting the impact of consumers curtailing discretionary spend. discretionary curtailing consumers of impact the reflecting 11.7% and 10.2% Sundays for dailies, paid for for weeklies, for paid for of 10.3% paid declines for volume we experienced period the During week additional the policy. Excluding price cover often’ and ‘little our with line in continue which increases price by cover offset partially declines (6.0%) from £77.1 million to Regionals c £72.5 million with accelerated volume increased revenues total digital property, and recruitment by 37.6% declined 25. and property and fall in these revenue categories. have The revenues digital and digital categories revenuesproperty in recruitment 35.7% 25.1% represent and revenues and Digital recruitment of the down 17.3%.classified 44.7 down 48.4%, property week with saw of advertising categories All Advertising revenue recruitment, property and motors and property recruitment, ’ ’ s trading in 2009, circulation revenues were down by 7. down were revenues circulation 2009, in s trading s trading in 2009, was display down 15.5%, recruitment down . Excluding the additional the . Excluding .

fell quarter by fourth 29.9% the fell in by and period the s for The rate of decline in revenues improved as we progressed we progressed as improved revenues in rate of decline The dvertising revenues during the period fell by £83.4 million by £83.4 million fell period the during revenues dvertising irculation revenues for the year the for revenues irculation for the second half of the year. of the half second the

%, motors down 31.7% down %, motors other and significant declines in the period period in the declines significant week , our most cyclical categories, ’ s trading in 2009, advertising . Recruitment, property and 4 , excluding the additional the , excluding % respectively. Excluding have fallen by £4.6 million 53 weeks 53 198.9 been impacted by the impacted been 44.0 39.3 12.6 21.4 81.6 2009 £m 52 weeks 282.3 96.0 39.2 39.2 52.8 18.2 18.2 2008 76.1 by 3 £m

4 %. 8.3 Variance (30.8) (29.5) (48.4) (45.4) (15.0) (16.7) %.

%

Western Mail leaflets. in the first half of 2008 and ended declines 2007 in which disposed toin businesses contracts events, service from reader offers and inrevenue areduction by £1.6 growing reflected This digital and million. £31.5 million with print and other activitiesOther revenuedecreasing fell by by£6.7 £5.1 million million (13.9%) from £36.6 million to b a (Wales) Post Daily Morning their competitors. their of full rate sales within their audited proportion ahigher have titles Our ABC investment. on areturn provide circulations than any of price discounting and levels of marketing through volume circulation short-term spend chasing of not policy our which do not reflects titles national five of our performance volume circulation The spending. discretionary reduced and confidence consumer impacted continued to decline year on year as the recessionAcross negatively the national popular newspaper market, circulations discounting and high levels of marketing expenditure.marketplace which continues to be competitive characterised ahighly in operate titles national Our revenues. other by cover price to the acute downturn in the immune economy not was it and volumes circulation impacting of reducing challenge advertising and 2009 saw the national newspaper industry continue to face the Scotland. in titles of business aportfolio and division marketing event an include which growing portfolio of digital brands plus other commercialSunday Mail. activities All our newspapers the are and Record Daily complemented the titles, national read best two the publish by a fast Daily Mirror, the Sunday Mirror the and we publish UK the In The brands. media UK’sPeople the leading among are while in Scotland we The Nationals division publishes five national newspaper titles Nationals division which Echo Liverpool Evening The Journal (Newcastle) Largest regional titles regional Largest Sunday Sun (Newcastle) Sun Sunday (Birmingham) Mercury Sunday Sunday Evening Chronicle (Newcastle)   to December2008. Estimated average ABC July to December 2009 and actual average ABC July UICREG JanuarytoJune2009and2008. Digital other revenue grew through the launch of new products. of new launch the through grew revenue other Digital

circulation

32,864 58,882 60,554 49,535 52,752 88,519 30,133 30,147 Annual Report & Accounts 2009 &Accounts Report Annual Trinity Mirror plc Daily 2009 a

102,862 290,321 238,792 120,353 135,653 144,901 200,711 119,913 Average readers 2009

b circulation 33,634 54,295 66,861 34,622 61,634 61,270 32,811 77 0 97,78 2008 Daily 25 a 135,296 154,843 321,255 169,703

268,715 221,819 2, 5 8 127,0

1 Average readers 11,122

2008

b

Financials Governance Business review Who we are Trinity Mirror plc 26 Annual Report & Accounts 2009

Business review

Our national titles performed strongly throughout 2009, showing the Financial performance business to be highly resilient through the downturn. The Daily Mirror The adjusted revenue and operating profit of our Nationals division and the Daily Record achieved a joint circulation in excess of 1.6 million are as follows: copies per day on average during 2009 with readership per issue nearly 4.5 million. Our daily newspapers are read by 9.1% of the Revenue and operating profit adult population on a daily basis. Our national Sunday titles – the 2009 2008 Sunday Mirror, The People and the Sunday Mail – achieved a joint 53 weeks 52 weeks Variance circulation in excess of 2.2 million copies per week on average in £m £m % 2009 with readership per issue in excess of nearly 5.9 million. Whilst Revenue 460.4 475.7 (3.2) the Sunday national newspaper market remains challenging due to changing lifestyles, we reach 11.9% of the adult population every Operating profit 83.6 88.9 (6.0) Sunday. Against a fragmenting media landscape our national titles Operating margin 18.2% 18.7% (0.5) continue to provide advertisers with fast and efficient coverage of a mass audience. Revenue fell by £15.3 million (3.2%) from £475.7 million to Whilst circulation volumes have been under pressure, our circulation £460.4 million. Costs were reduced by £10.0 million (2.6%) from revenue performance was supported by price increases during the £386.8 million to £376.8 million despite inflationary pressures. year. In January 2009, we increased the Monday to Friday cover The benefits of tight cost management limited the fall in operating price of the Daily Mirror from 40p to 45p, with the Saturday price profit to only £5.3 million (6.0%) from £88.9 million to £83.6 million. unchanged, and the Daily Record cover price from 35p to 40p on The tight management of costs and a more resilient revenue Monday to Friday and from 60p to 65p on Saturday. Also in January performance ensured that operating margin fell marginally from 2009 the Sunday Mirror cover price was increased from 95p to 18.7% to 18.2%. £1.00, the Sunday Mail rose from £1.20 to £1.30 and in August 2009 the price of The People increased from 90p to 95p. The additional week’s trading in 2009 contributed revenue of £7.5 million and operating profit of £3.6 million. Excluding the impact We continue to develop the Daily Mirror and the Sunday Mirror of the additional week’s trading in 2009, revenues fell by £22.8 million brands and content across traditional publishing and multiple digital (4.8%), costs fell by £13.9 million (3.6%) and operating profit by platforms with products in print, online, on mobile and also through £8.9 million (10.0%). the eponymous ‘Pride of Britain’ awards show which was the best watched television programme of its kind in Britain in 2009. The People Digital revenues have declined by £0.8 million from £5.6 million underwent an editorial rejuvenation programme in 2009 with the to £4.8 million with bingo revenue impacted by the entry of new launch of a new look newspaper and magazine design together with competitors combined with the impact of the recession. Audience the launch of the UK’s first standalone puzzle magazine in a national reach continues to grow, with average monthly unique users growing newspaper. These product development initiatives and publishing by 78% year on year to 9 million per month. We continue to focus innovation have resulted in an improved circulation trend, compared on building a quality audience which is relevant to our UK advertisers to recent years, and also a much improved display advertising and have the largest proportion of UK unique users, at over 50%, in performance during the year for the title. the market. Both Scottish newspapers are clear market leaders in readership Revenue of our Nationals division by type is set out below: terms with the Daily Record reaching 6% more readers than the number two title in the market and the Sunday Mail having 68% more 2009 2008 readers than the next best-read Sunday title. In the Daily Record we 53 weeks 52 weeks Variance launched a new Men’s section, ‘The Brief’, to cater for the growing £m £m % interest in men’s health and lifestyle related content. In the Sunday Circulation 266.8 268.2 (0.5) Mail we further expanded our entertainments coverage with the Advertising 132.9 144.2 ( 7.8) launch of our ‘Seven Nights’ supplement which consolidated the title’s position as the ‘bible’ for entertainment related advertising in Other 60.7 63.3 (4.1) the Scottish market. Both titles were once again successful at the Total revenue 460.4 475.7 (3.2) Scottish Press Awards winning four awards including ‘Reporter of the Year’, ‘Multi-Media Journalist of the Year’ and the highly coveted ‘Journalist team of the year’. Nationals circulation revenues for the year have fallen by £1.4 million (0.5%) from £268.2 million to £266.8 million. Excluding the additional Whilst market conditions remained challenging we continued to week’s trading in 2009, circulation revenues fell by 2.2%. The decrease invest in the business with the launch of new websites including in circulation revenues reflects volume declines partially offset by the mirrorfootball.co.uk and 3am.co.uk. We have a fully integrated benefit of cover price increases. digital business structured to manage our portfolio of companion newspaper websites and growing number of vertical classified sites in addition to seeking out new opportunities to fulfil our key strategic objective to create a growing multi-platform business. During the year we embarked on a period of significant investment in new editorial production systems for our national newspapers. Contentwatch, the new technology platform, allows us to produce content and publish it simultaneously across multiple media channels. In advance of the implementation of the system in our Scottish Nationals business we reorganised the editorial department into the UK’s first seven day, fully integrated operation, under a single Editor-in-Chief for both the Daily Record and the Sunday Mail. Following the successful implementation of the contentwatch system in Scotland, we are currently implementing the system in our UK Nationals business. Sunday Mail Sunday Daily Record Daily People The £11.7 to £14.6 million million. During Central includes costs not allocated to the operational divisions.Central £144.2 to £132.9 million million a Nationals d c b a Sunday Mirror Mirror Daily share market and readership Volume, follows: as were titles national our for share market The six monthly change in circulation volumes and the six monthly 2.3%. 2.3%. revenue additional the Excluding quarter of 3.8% fourth the in 7.3% growth and quarter third the in of 19.1% declines with quarter, quarter,second 8.9% in the first the in 2009 through we progressed as to improve continued revenues bingo revenues. bingo by 17.9% decreased revenues other to lower due digital to £2.3 million revenues, other Within income. rental lower and prices paper waste reduced by driven sales paper waste reduced reflecting £60.7 million Other revenues decreased by £2.6 million (4.1%) from by 10.7%. decreased £63.3revenues million to during the year. Within advertising share market advertising their revenues, increased titles national of our Each digital advertising revenues. advertising classified cyclical more of the proportion ahigher have which Nationals Scottish by the performance a weaker strong

Share oftabloidmarketsixmonthstoDecember2009excludingsampling. Average circulation forthesixmonthstoDecember2009 andDecember2008. Within Scottishmarketonly.Within NRS 12monthstoSeptember2009.

The the year central costs increased by £2.9 million from performance from the UK Nationals titles, partially offset by fell quarter by 9.4% fell year fourth the the s for in by and

advertising performance across the year reflected a dvertising revenues decreased by £11.3 decreased revenues (7.8%) million dvertising from d d week Volume 1,295 1,202 actual 2009 309 380 563 000 ’ s trading in 2009, advertising .

a The year on year trend in advertising advertising in trend year on year The Volume 1,282 1,417 actual 2008 343 620 425 000

a Change (10. (6.2) (8.6) (9. (9.1) % 7 7

) ) Average readers 3,840 1,201 1,050 3,477 1,413 2009 000 b

Market

share 33.9 32.0 16.4 15.6 2009 . 7.3 %

c

Provisions liabilities tax Deferred obligation benefit Retirement Medium-term debt Short-term debt equivalents cash and Cash Non-current assets assets non-current Other instruments financial Derivative assets tax Deferred B Non-current assets Non-current liabilities current net and liabilities Non-current Total equity liabilities other current Net Intangible assets Intangible Investments in associates in Investments construction under Assets equipment and Plant andLand buildings equipment: and plant Property, Derivative financial instruments Deferred tax asset Goodwill names domain and relations Customer titles and rights Publishing Intangible assets: is relate which of £41.7asset instruments financial million derivative The obligation. benefit retirement the in to increase the due £58.1 primarily to £83.4 million million The deferred tax asset has increased by £25.3 million from Limited. Media Globespan of the £1.7 disposal the from million the of respect in consideration of £1.9 of deferred release million reflecting amortisation of £7.1 millionIntangible charged assetsin the and period, goodwill the have decreased by £10.7 million Non-current assets directly to equity. oftax after £0.5 profit the million offset by losses of £1.7 by £1.2 milliondecreased takenmillion from £7.5 million 21.54% of our value PA the in share carrying toThe £6.3 million reflecting of £14.0additions £54.1 (2008: million million) less £38.0 (2008: million) of million £36.8 charge depreciation to due decreased has equipment and plant Property,

of £2.9 million and is included in medium-term debt medium-term in included is and of £2.9 million aliability now alance sheet alance

acquisition of Rippleffect Studio Limited and a reduction of d to the fair value on derivative financial instruments and instruments financial derivative on value to fair the Annual Report & Accounts 2009 &Accounts Report Annual Trinity Mirror plc .

has Limited Group 1, 1,458.8 1,4 458.8 489.2 202.0 9 296.6 the 429.5 318.8 857.8 357.9 211.3 (61.2) 58.8 45.9 83.4 83.4 13.6 7 2009 2009 17.3 37.1 4.5 6.3 9.9 in 2008 3.1 27 £m £m – –

1,512.6 1,512.6 1,512.6

456.2 206.9 395.9 956.6 238.0 534.7 325.4 57.8 8 197.0 (20.6) 29.8 25.4 2008 2008 58.1 58.1 21.8 13.7 77.0 15.1 41.7 41.7

7.5 £m £m .

Financials Governance Business review Who we are Trinity Mirror plc 28 Annual Report & Accounts 2009

Business review

Net debt Net debt, on a contracted basis, assuming that the private Net debt, on a statutory basis, decreased by £48.9 million from placement loan notes and the cross-currency interest rate swaps £348.7 million to £299.8 million. are not terminated prior to maturity, decreased by £60.2 million from £384.2 million to £324.0 million during the period. The net debt, on a statutory basis, is as follows: The net debt repayment profile is as follows: 2009 2008 £m £m Contracted net debt repayment profile US$ denominated loan notes 329.0 362.3 2009 2008 Sterling denominated loan notes 26.0 26.0 £m £m Repayment within one year 3.1 15.1 Cross-currency interest rate swaps to hedge US$ principal and interest payments on US$ loan notes 2.9 (41.7) Between two and five years 269.6 277. 2 Interest rate swaps 3.1 2.1 After five years 112.5 112.5 Bank facility – 10.0 Cash and cash equivalents (61.2) (20.6) Finance leases – 10.6 Net debt 324.0 384.2 Cash and cash equivalents (61.2) (20.6) The above analysis reflects the actual cash payments on the Group’s Net debt 299.8 348.7 debt. This is different to the statutory net debt of £299.8 million which included the US$ denominated loan notes at the year end exchange The decrease in net debt has been driven by the increase in cash rate and the related cross-currency interest rate swaps at fair value. balances and by the repayment of the bank facility in January 2009 and finance leases in July 2009. At the year end, committed facilities of £563.7 million (2008: £573.3 million) were available to the Group and the Group had During the period, as sterling strengthened against the US$ the undrawn facilities of £178.5 million (2008: £163.5 million), as set sterling value of the US$ denominated loan notes has decreased out below: by £33.3 million. This has been more than offset with the related cross-currency interest rate swaps moving from an asset of Committed financial facilities £41.7 million to a liability of £2.9 million. 2009 2008 £m £m The US$ and sterling denominated loan notes are part of two US private placements issued during 2001 and 2002 totalling Bank facility 178.5 178.5 US$602 million and £32 million. In October 2008, US$80 million US private placements 382.1 382.1 and £6 million of these loan notes were repaid on their maturity date. The total sterling repayment was £60.4 million. The capital Finance leases – 10.6 and interest repayments on the US$ loan notes are hedged to Interest rate swap 3.1 2.1 maturity through cross-currency interest rate swaps with the same maturity profile as the loan notes with fixed US$ interest payments Committed financial facilities 563.7 573.3 swapped into sterling variable interest rates payments linked to six month sterling Libor plus a margin. The US private placements are repayable over the next eight years with the next repayment Drawn facilities 385.2 409.8 of £145.4 million due in October 2011. The key financial covenants Undrawn facilities 178.5 163.5 for the US private placements are a minimum interest cover of 2 times and maximum debt to EBITDA ratio of 4 times throughout Committed financial facilities 563.7 573.3 the term of the loan notes. In October 2008, an interest rate swap was entered into which Retirement benefit obligation converted the floating rate interest payments on £180.0 million The IAS 19 defined benefit operating profit charge for current service of principal into fixed for a period of 12 months to October 2009. cost was £14.6 million (2008: £24.1 million) and the pension finance In April 2009, £135.0 million of the interest rate swap was extended charge in the period was £10.5 million (2008: £11.4 million finance until October 2010. In October 2009, the swap in respect of credit). The impact of the changes in the pensions operating profit £45.0 million principal was settled on the due date. charge and finance amount is to reduce profit before tax for the period by £12.4 million. The impact of these changes reduces 2009 At 3 January 2010, the Group had no drawings on its £178.5 million reported earnings per share by 3.5 pence per share. committed bank facility which expires in June 2013. For 2009 and 2010 the financial covenants attached to this facility are a minimum The IAS 19 pension deficit has increased by £89.7 million from interest cover of 2.5 times and a maximum debt to EBITDA ratio of £206.9 million to £296.6 million during the year reflecting the impact 3.75 times. of an increase in liabilities of £304.3 million, partially offset by an increase in assets of £164.5 million and a reduction in the asset ceiling of £50.1 million. The increase in liabilities has been driven by a fall in the corporate bond rate and an increase in inflation which have contributed to the real discount rate falling by 1.55% from 3.75% to 2.20% marginally offset by the non-recurring gain of £9.9 million recognised in the consolidated income statement. The increase in assets reflects the cash funding during the year and an increase in asset values in part reduced by the payment of pensions. profit for the period. the offsetting than more schemes pension benefit defined on losses The total recognised expense for the period is due to the actuarial schemes, significant the of all 2008 In basis. atriennial on undertaken are Valuations trustees. scheme pension the with agreed schedules funding with accordance in deficits scheme pension to fund continues Group The 2008 At 28 December £3.0 million credit to equity for equity for to equity credit £3.0 million £48.5 £45.5 of adecrease £489.2 was million, end year the at Total equity Total equity liabilities. tax and cash equivalents less trade and other payablesNet currentand current other liabilities includes current assets excluding cash charges partially property vacant for offset provisions property by additional £17.3 million due to the utilisation by £8.1 to £25.4 from million decreased have million Provisions of restructuring provisions and differences. acce assets, £325.4 Deferred tax liabilities have decreased by £6.6Other million non-current from liabilities and net current liabilities to 88 92. pages on future of details 68). Further page note in 8on explained £9.9 million £16.6 (2009: million £30 around be will charge, statement income the pension schemes and for 2010, the cash funding inbenefit excessdefined in the of deficits the to fund continue will Group The £5.5 million. 2010 for be to charge is expected finance 19 IAS The pension to 2009. level asimilar at 2010 in to remain provision expected is pension for charge profit operating the 2010. change, this Following April 1 from scheme, pension contribution adefined (TMPP), Plan Pension Trinity Mirror the to join option the have now will schemes from 31 March 2010. All active members ofthe theclosure defined of pensionall defined benefit announced Group the pension process consultation schemes extensive an Following to future accrual 2010in completed be will and 2009 June dateof 30 avaluation has valuation Scheme, is predominantly driven by the fall in operating profit. operating in fall by the driven predominantly is £102.3 flows from cash to £97.6 million operating in fall This million. by £4.7 decreased has million, operations from generated Cash flow Cash 10 20 3January At 2010 in 55 and below: 65 shown are aged members for 65 age from expectancy life assumed The assumptions. mortality the in accrued been has improvement a1% as time over future marginally increases expectancy consistent with those adopted at 28 December are 2008. liabilities The calculating in life applied assumptions mortality The

funding commitments and the TMPP are shown in note 35 million excluding the impact of a non-recurring credit of million total recognised expense for the period reduced by a by a reduced period the for expense total recognised million million from £534.7 million. The decrease reflects the

. million to £318.8 million due to the amortisation on intangible during the year. the during

were completed. The Trinity Retirement Benefit Scheme Scheme Benefit Trinity Retirement The completed. were lerated capital allowances and other short- other and allowances capital lerated except expectancy (years) currently aged 65 aged currently 21. 21.4 Male -

for a pensioner apensioner for the T the settled share-based payments. share-based settled 6 Future life rinity Retirement Benefit Female 2 23.8 4.0

, expectancy (years)

23. term timing timing term currently aged 55 aged currently the valuations 23.2 Male non-pensioner at age 65 for a a for 65 age at 4 Future life

Female

25.

25.6

7

of funding past service deficits. This, togetherterms with of the future slowdown service in and additionalin both sharply risen has provision cashpension salary required of final cost The to meet the cost interest rates, inflation rates, mortality andare regulatory a number change. of factors which there are trustees, with reviews outside regular are there and monitored ourcarefully control, including costs consume a disproportionate level of profit.Pension Although deficits this may is grow at such a rate soPensions that the annual funding locations. or sources specific on dependency in disruption. We use a spread and result could tomix Group the obligations of their to meet unable suppliers were they to reduce if which newsprint) particular (in of key suppliers We anumber have Key suppliers marketing. and content editorial in to invest continue and network the our titles. We have invested in colour pressesfocus giving on sustainable full colour returns across and appropriate fragmentation of media levels impact the of investment in of property, plant and equipment. and plant of property, disposal on proceeds £4.0 (2008: from to £8.9 million) million related in 2009 inflow cash principal the activities, operating from than Other of of £14.8 £5 (2008: expenditure million capital million), £36.3 (2008: leases finance and borrowings on paid £2 to related in 2009 outflows cash principal The or brands to maximise profitability. of print This portfolio its reviewing has Group the in resulted led has downturn to the launch of new provide a stronger platform for long-term growth.New operating The economic models are being rolledbrands. print core our of out profitability and value the across maximise We will the Group to of talent. availability and culture structure, Group appropriate the on relies plans The ability to execute and implement our strategic and businessand people Organisation below. described are these and continuity business and pensions key suppliers, circulation, advertising, people, and to relate organisation operations from arising key risks The Operational 44 page on report governance Corporate of the section control internal the in described management of the significant risks faced byand theevaluation Group. identification, the for process This ongoing an is There is R We may experience loss of readership due to competit due of readership loss We experience may Circulation brands. digital of new launch continuing the and We have strengthened our online presence through state using acquisitions fragmentation media from arising revenues key classified on impact long-term potential UK by the and by experienced being the downturn by the impacted not overly reliant on any single are We revenue. our of customerproportion asignificant is which or advertising, sector but have been affect adversely may asector in reduction or clients of major loss The Advertising of scale. business print acontract growing We also are sites. mobile and by the launch and development of online brandsenvironment including websiteswe continue to strive economic current of the for challenges the growth Despite newspapers. in our digital audiences

isks and uncertainties and isks £10.0 million and finance leases of £9.8 of million. leases of £10.0 finance and facility million bank the enhanced publications and the closure or disposal of unprofitable of unprofitable disposal or closure the and publications enhanced - of - the - . art technology to improve customer service. . We are investing in our advertising functions functions advertising our in . We investing are Annual Report & Accounts 2009 &Accounts Report Annual Trinity Mirror plc . Our approach is to continue to 4 .1 million) and the repayment .1 repayment the and million)

3.5 million interest interest million or activity 29

and

Financials Governance Business review Who we are Trinity Mirror plc 30 Annual Report & Accounts 2009

Business review

the global economy and its impact on our business and investment Employees returns, has material implications for future pension scheme funding The commitment, innovation and drive of our staff are central to and could adversely impact the Group and its ability to fund past the ongoing development and success of our business. service provision. To reduce the volatility of pension scheme liabilities and achieve more certainty in the cost of future pension provision, During the year, with the economy in the grip of recession, the the Group announced the closure of the defined benefit pension voluntary rate of employee turnover was significantly reduced year schemes to future accrual from 31 March 2010. on year at 6.8% (2008: 12.2%). During the same period the retention rate, defined as employees in the Group’s employment for the full Business continuity 12 months, rose to 89% from 73% in the previous year. We are dependent on our technology, networks and manufacturing During the year the Group’s absenteeism rate, which follows the capability and we have invested in our network resilience and common definition used by the Advisory, Conciliation and Arbitration manufacturing infrastructure and flexibility. Business continuity plans Service (ACAS), was an average of 2.1% (2008: 2.2%). This compares are regularly and they are updated to reflect changes in favourably with the national average level of employee absence operations and systems. We have insurance to cover property of 3.5% and that for the media and publishing sector of 3.6% damage and business interruption. (Source: CIPD Absence Management Survey July 2008). Environmental The Group is committed to equality of opportunity in all its employment Key risks are described in the Corporate responsibility report on practices to ensure we attract and retain the best people. In 2009, pages 31 to 37. women made up 38% of staff (2008: 41%) and the number of women occupying senior managerial roles was 22% (2008: 25%). Treasury In response to trading conditions, the Group took the decision to The key risks arising from our activities and our financing facilities are freeze salaries for 2009. In addition to base salary, however, our liquidity, financing and interest rates, foreign currency and covenants. employees have the opportunity to participate in performance related Further details are provided in note 36 to the consolidated financial incentive schemes. For many staff this is through inclusion in the statements. The treasury policies for managing these risks were Group’s Employee Bonus scheme which is linked to performance approved by the Board in March 2001 and are summarised below: against the Group’s profit target, which also formed the basis of senior executives’ incentive schemes in 2009. Liquidity risk Our policy is to ensure continuity of funding and flexibility. We also provide a competitive range of benefits to employees, Debt maturities are spread over a wide range of dates, thereby including the opportunity to join a Group-wide defined contribution ensuring that we are not exposed to excessive refinancing risk in pension scheme. In 2009, we also introduced a holiday purchase any one year. The maturity profile of debt outstanding at the year scheme to allow staff greater flexibility in their work-life choices. end is summarised on page 28. Our liquidity risk arises from timing differences between cash inflows and outflows. These risks are Environmental and social managed through unutilised committed and uncommitted credit facilities. It is our policy to maintain sufficient cash balances and Our environmental and social policy and statement, together with a committed facilities to meet anticipated funding requirements. review of our performance during 2009, is set out in the Corporate These resources, together with the expected future cash flows to responsibility report on pages 31 to 37. be generated by the business, are regarded as sufficient to meet the anticipated funding requirements of the Group for at least the Key operating trends and outlook next 12 months. The key operating trends and outlook can be found on page 19 of the Chairman and Chief Executive statement. Financing and interest rate risk Our exposure to interest rate risk is managed through the use of interest rate swaps, options, caps and forward rate agreements. Hedging transactions are undertaken after a review of the effect on profit after tax of a range of interest rate assumptions and probabilities, determined by reference to the general economic climate and market forecasts for interest rates.

Foreign currency risk Less than 2% of the Group’s turnover and operating costs are generated in currencies other than sterling. Given the minimal impact on profit after tax of fluctuations in foreign currencies, we trade foreign currencies at spot rates. The payment of interest and capital on borrowings denominated in foreign currencies is fully hedged through cross-currency interest rate swaps. Whilst a substantial proportion of our newsprint supplies are sourced from outside the UK, the prices are agreed in sterling, although the sterling prices are impacted to some extent by foreign currency movements.

Covenants risk We seek to maintain standard terms for all our financial covenants where possible. Our covenants are monitored on an ongoing basis with formal testing of financial covenants at each reporting date. The Company continues to comply with all borrowing obligations and financial covenant obligations. 4 March 20104 March Executive Chief Bailey Sly work them prevent otherwise might qualifications and backgrounds whose Catch and I am particularly pleased by our continued involvementOur community inengagement the activities remain of great importance external verification. in safety award. That site is anticipated to the achieve the standard early on OHSAS 18001 Health and Safety Award. We accreditationachieved our undergoal the ISO 14001 Environmental universal towards working been have sites To print our end that Award and the a This statement is not meant to be just about awards but we put and very further. This is a remarkable achievement givenThe the statistics number of later in this report show that in 2009 we improved this important milestone. of reaching proud be can staff our all and award an such received that a large newspaper printing and publishing recognised been has improvement sustained group like ours has am delighted I years. five previous the over standards that our the It is also a testament to all our staff that we have programme. been responsibility awarded corporate of our strands various faced, we that conditions trading tough the that, despite pleased I am C report responsibility Corporate

high value on external assessment and recognition of our effort. 2010. These standards bring with them the rigo the them with bring 2010. standards These hief Executive’shief statement

the environmental standard with all sites now having reached RoSPA Gold Medal for consistently improving health and safety award level and have only one site still to gain the health and and health the to gain still site one only have and level award

installation programmes undertaken. installation programmes significant office moves and the major press improvement

in a media company. amedia in from taking the first steps in a media career, to experience career, to media experience in a steps first the taking from

22 initiative described in the report that allows young people, we maintained throughout 2009 our commitment to the . This is the first time u r required for

– – – 2009: during taken were initiatives following the improvement, of continuing goal of our pursuit In initiatives safety and health 2009 years. consecutive five for standard gold the achieving to those presented is safety, which aR to receive was Trinity Mirror that news good the with started year The made. were improvements considerable some and maintained been have standards safety and health good Nevertheless reorganisation. further in resulted which Group the for year challenging very another was This H – – – – –

and projects to consolidate our premises, various during maintained were relocate standards safety and health good some of our staff inspections; safety standards. This is in addition to regular departmentalcarried outhealth to andensure compliance with legislationa andprogramme maintain of internal and external health and safety audits 2010; in early plant was remaining the at achieved be will compliance that is expected It certification. for recommended being and standard the achieving plant one but all with plants printing the at 18001 OHSAS system continued management safety and health efforts to ensure compliance with the internationally recognised up action, as appropriate. as action, up the through monitored were developments safety and health wider and campaigns; and Safety Manager and participation in their topic-relatedin the printing safety industry, through involvementAdvisory of theCommittee Group inHealth their efforts to improve healththe Group and safetyhas continued to support the HSE Printing Industry updated; and revised also were work at phones mobile introduced. Policy documents covering smoking andnew thepolicy use coveringof the reporting of accidents throughand incidents the Group was Health and Safety Risk Management Forum 2010; in a to continue scheduled is work this and training awareness management standards managers were provided with asstress part of a plan to achieve compliance with HSE stress Group; the across of provision uniformity ensure and standards relevant with compliance to ensure out a review of personal protective equipment was carried ealth and safety and ealth Group Health and Safety Risk Management Forum with follow

upgrade presses at the Newcastle printing plant; printing Newcastle the at presses upgrade o SPA Gold Medal award for occupational health and and health occupational for award SPA Medal Gold Annual Report & Accounts 2009 &Accounts Report Annual Trinity Mirror plc

31

Financials Governance Business review Who we are Trinity Mirror plc 32 Annual Report & Accounts 2009

Corporate responsibility report

Group health and safety statistics Health and safety enforcement activity The tables below provide statistics for occupational health and safety There were nine visits to our premises by health and safety in 2009, with a comparison to the previous year. Analysis of the data enforcement officers in 2009, which is the same number as in the reveals that there has been a further reduction in the total number previous two years. These visits were all intended to verify that the of accidents, including those reportable under RIDDOR. As a Company was meeting its statutory duties for health and safety and consequence there has also been a substantial fall in the number in each case where the need for follow up action was identified it was of working days lost. promptly taken. No enforcement action of any kind was required.

Health and safety performance indicator 2009 2008 Future health and safety initiatives To achieve our goal of continual improvement in 2010 the Group Fatalities 0 0 intends to: RIDDOR major injuries 2 5 – continue with our work to achieve and maintain compliance RIDDOR over 3 day injuries 16 19 with OHSAS 18001 and other management systems at all of our printing plants; RIDDOR occupational ill health/diseases/conditions 0 0 – provide our Health and Safety Managers with specialist training RIDDOR dangerous occurrences 0 0 in behavioural safety so that the benefits of introducing such a Total number of accidents 238 297 programme can be explored; RIDDOR events frequency rate † 0.13 0.17 – carry on with a schedule of internal regulatory compliance audits issuing reports with recommendations for improvement, where † All accidents frequency rate 1.84 2.12 appropriate; Total days lost – accidents and occupational 368 497 – continue our involvement with the HSE Printing Industry Advisory ‡ ill health (0.02) (0.03) Committee in an effort to improve health and safety in the Group and throughout the wider industry sector; † Frequency Rate = number of accidents per 100,000 hours worked. ‡ Figure in brackets represents the percentage of total days worked by all employees in the – continue with work already started on implementing new policies Group. and procedures relating to the management of work-related stress and safe driving. Some of our other policies will also be reviewed RIDDOR All RIDDOR All and updated, as necessary; accidents accidents accidents accidents Breakdown of accidents 2009 2009 2008 2008 – maintain good health and safety standards in engineering and by type of event % % % % construction projects that are planned for completion during the year; and Slips and falls (same level) 23.5 20 29 23 – continue to monitor health and safety developments, taking Lifting and handling of materials 17.5 10 9 13 action to ensure compliance with new legislation and promoting Contact with machinery 17.5 8 13 4 further improvement through the Group Health and Safety Risk Management Forum. Falls from a height 12 3 8 0.5 Stepping on or striking fixed Environmental management object 0 16 8 15 We have continued to pursue programmes and targets in the areas Struck by moving vehicle 0 1 4 2 where the Company has the most potential to affect the environment. Contact with sharp/abrasive We are especially pleased that every one of our print sites has now material 0 19 0 12 achieved certification to the international standard ISO 14001 for Struck by flying or falling object 6 3.5 8 2.5 environmental management systems, exceeding the target that we set for 2009. A particular benefit is that all our manufacturing sites Contact with hazardous are now regularly audited by external specialists and this provides substance 0 8.5 0 3.5 greater assurance that environmental controls meet best practice. Contact with hot material/ Energy and carbon management continued to have a high priority substance 6 3 0 4.5 during 2009 and further reductions in electricity and associated Object collapsing or overturning 0 0 0 0 carbon emissions have been achieved. A strategy for meeting the new legal requirements of the CRC Energy Efficiency Scheme has Use of hand tools 0 2.5 0 3.5 been developed and this will be a focus for activity during 2010. Contact with electricity 0 0 0 1.5 During the coming year an evidence pack of carbon reductions will be compiled which will be audited in 2011 allowing the renewal of Others 17.5 5.5 21 15 our existing Carbon Trust Standard accreditation in 2011. Total 100 100 100 100 No breaches of environmental legislation were reported in 2009. Our efforts to implement environmental policy commitments, through The total number of accidents involving slips and falls (same level) the achievement of defined annual targets, have yielded real benefits and lifting and handling of materials was much lower than in the over the past five years. But it is now timely to review the policy to previous year. However, this is not clearly reflected in the percentages ensure that it remains aligned with developments in legislation, listed above. There was an increase in the total number of accidents the expectations of stakeholders and the needs of the business. involving contact with machinery and falls from height and as a result During 2010, we will therefore undertake a risk-based review of these matters will both come under closer scrutiny in the year ahead. environmental and other sustainability issues, with a view to developing a new and comprehensive sustainability policy for the Company. Carbon Trust Standard Carbon of the award the through programme reduction carbon and energy its of recognition independent received Trinity Mirror 2008, During of by 10,500 end by the tonnes emissions dioxide carbon equivalent that we are also well on-track of 2%. We target believe to our with compared meet measures, ourconservation target of reducing our of 13.9% energy of our aresult consumption as electricity in reduction that were still in operation at 2007 and the during operation in end were that sites at of consumption ie basis 2009, we have achieved a of this reduction, but comparing consumption on2007 a strict target like-for-like baseline. Site closures have our (18.2%) with kWh compared by 22 million clearly annum reduced per accounted for some has consumption electricity Our systems. heating efficient more and including improved metering and monitoring, power voltage reductions was approved to enable a range funding 2009, During of targets. further reduction carbon and energy energyambitious saving projects to pursue implemented being is Programme Management A Carbon Energy consumption and greenhouse gases including the paper usage. products, of printed footprint carbon the to quantify initiative industry The Group will continue to support and participate in the forests. printing sustainable and managed well from coming as certified independently been has that fibre virgin or materials recycled The Group will continue to source 75% of its newsprint from eitherCurrent target: fibre or certified fibre, against our recycled from 87% current of newsprint sourced and issue this on targetsuppliers of 75%. fibre from certified forests. During 2009, we continuedto maximise tothe work newsprint with that Weis aim sources. produced sustainable from comes paper its from to produce used recycled fibre, or fibre wood the that to ensuring committed remains Trinity Mirror Paper sourcing and sustainable forestry website. Company’s The full version of our Environmental Policy may be found on the Performance against all of these areas is reportedof below.contracted printing and product distributionorganic services. compound emissions from print works and sustainablethe purchase forestry, waste management sourcing, paper notably and environment, the torecycling, affect potential the has volatile continued to pursue targets in specific areas whereenvironmental the Group management systems and on to initiatives the climate addition In developments. and issues change,relevant we have the Group’s environmental programme remains toaligned meet with in 2009.all The Steering Group Director, continued Legal Group and has Secretary the a via remitCommittee to ensure that The Environmental Steering Group, reporting to the Executive environmental impact are reported below. Further information and data relating to our main areas of or certifiedfibre Newsprint pr 20 20 20 20 0 2009

2010 (versus 2008). 06 08 07 05 20 oportion ofsupplyfr (%) 40 . This certification is due for renewal om re 60 cycled Ta rget 81 81 82 80

87 87

10

0

GFHG emissions(tonnesCO well-developed. 2010 and our plans for complying with theseneed requirements to register are and provide baseline consumption Scheme. Levy Change Climate data during existing the under by agreements covered already is sites print our at consumption of energy proportion ahigh because scheme the from exempt be will Printing Trinity Mirror that We anticipate 2008. Act introducedScheme Efficiency Energy under the Climate Change new, the CRC with statutory, to comply strategy our implement energy management plans. During the coming year weindependent will also audit of our policies, achievements afurther 2011Trustin and undertaking Carbon the involve future will and the latest equipment and water-based technology. and equipment latest the approaching the minimum emissions that can be achievedlow level using relative to our production. We tobelieve target that this we issueare nowand our consumption continue sites print our All washes). blanket and of fountains inks, from VOCs remains at a vapours solvent (mostly operations printing of from VOCs emissions Over the past five years Trinity Mirror 2009 has during sites worked hard to reduce printing Group’s bythe (VOCs) emissions compound Estimated annual consumption of volatile organic 138,267 192,280). (2008: metres cubic 2009 Group’s of the ‘core’ during sites consumption water The Water consumption 2008. versus basis dioxide emissions by 10,500 tonnes per annum,By theon aend like-for-like of 2010 the Group will reduce its equivalent carbon Current target: Internal electricityconsumption(kWh) VOCs (kgpermillionpages) 20 20 20 20 20 20 20 20 20 20 0 20 0

2009 2009 2009

06 06 08 07 05 08 07 05 08 07 0. 05 0. 10 40 0. 10 0. 20 60 0. 0. 15 17 0. 0. 19 30 The rest of the Group will, however, 0. 2 80 Annual Report & Accounts 2009 &Accounts Report Annual Trinity Mirror plc equivalent)permillionpage s 0. 20 0. 23 24 0. 40 0. 99 25 10 0. 0. 0

0. 52 53 50 0. 30 0. 12 12 59 0 12 1 33 0. 12 12 0 0. 60

0. 8 8 35 38

was

0. 0. 14 70 40 0

Financials Governance Business review Who we are Trinity Mirror plc 34 Annual Report & Accounts 2009

Corporate responsibility report

Energy consumption and associated CO2 emissions

GHG emissions (CO2 equivalent tonnes) GHG conversion Consumption factor 2009 2009 2008 2007 SCOPE 1 1 Gas combustion (heating, all Trinity Mirror premises) 26,490,674 kWh 0.184 x 10–3 4,874 5,846 5,911 Oil combustion (electricity generation, all Trinity Mirror premises) 45,299 litres 2.544 x 10 –3 115 384 450 Refrigerant gas loss (all Trinity Mirror premises) 1,999 kg 1,525.5 x 10 –3 3,049 140 708 Commercial vehicles (all Trinity Mirror owned vehicles) 8,614,037 km 0.273 x 10 –3 2,352 2,185 2,108 SCOPE 2 2 Grid electricity use (all Trinity Mirror premises) 99,088,645 kWh 0.544 x 10–3 53,904 65,015 63,990 SCOPE 3 3 Business travel (road, not involving company vehicles) 9,695,853 km 0.2149 x 10–3 2,084 2,760 3,350 Business travel (rail) 1,577,256 km 0.0611 x 10–3 96 93 139 Business travel (air) 4,967,499 km 0.1728 x 10–3 858 1,017 1,296 Electricity for contracted printing 4 4,623,528 kWh 0.544 x 10–3 2,515 2,514 2,543 Gas for contracted printing 4 10,383,922 kWh 0.184 x 10–3 1,911 1,944 2,244 Vehicle fuel for contracted distribution 2,200,000 litres 2.67 x 10–3 5,874 4,997 6,075 Total Group 77,632 86,895 88,814 Total Group per million pages of printed output 0.53 0.59 0.52

1 Scope 1 covers all direct greenhouse gas emissions, ie emissions from sources that are owned or under the direct management of the Company (Greenhouse Gas Protocol Corporate Accounting and Reporting Standard, 2004). 2 Scope 2 covers indirect greenhouse gas emissions associated with imported electricity use. 3 Scope 3 covers other indirect greenhouse gas emissions, ie where the emissions are from sources that are not owned by Trinity Mirror and where the Company does not have management control. 4 Data reported is based on estimates.

Waste management and recycling During 2009, individual press sites have targeted waste reduction from press operations through their ISO 14001 environmental management system programmes. We have also worked with our group-wide contractor to optimise treatment of press wastes, so that they are either recycled or re-used wherever possible. In 2009, we achieved an overall reduction in the quantity of press wastes generated, compared with the previous year. For example, for the highest volume liquid waste streams – blanket wash and CTP developer – we achieved reductions of 15% and 42% respectively. Treatment routes and recycling rates for our major press wastes in 2009 are summarised in the table below.

Quantity generated % Waste stream Treatment recycled 2009 2008 Aluminium plates Re-melted and re-used as pure metal 100 878,682 kg 1,079,538 kg Blanket wash Solids separation by gravity, liquid fraction used as low grade fuel 95 1,044,537 litres 1,235,849 litres CTP developer pH adjustment and biodigestion 95 357,495 litres 615,970 litres Ink Solids separation by gravity, liquid fraction used as low grade fuel 20 35,575 kg 47,963 kg Fountain solution Solids separation and biodigestion 80 13,540 litres 33,000 litres Mineral oil Solids separation by gravity, liquid fraction used as low grade fuel 100 19,220 litres 16,018 litres London, Middlesbrough and Newcastle by the end of 2011. end by the Newcastle and Middlesbrough London, Liverpool, Hamilton, , Cardiff, Birmingham, in locations office major its at standard system management environmental Trinity Mirror will achieve certification to Phase 3 of the BS8555 Current target: (Blantyre sites remaining The to ISO certified systems management environmental establishing of goal Our Environmental management systems of 2011. end by the equipment refrigeration in held gases HCFC all replace will Group The Current target: 2011.until completed be not now will offices regional of 2010 smaller some but end by the sites major all on replacement to achieve target our meet to track on We remain sites. print Oldham and the at projects replace ozone-depleting gases in cooling equipment,During including 2009, wemajor commenced the last phase of ourRefrigerant gases programme to standards. industry current with line in to waste landfill, general nil to achieve strive will Group The ends). reel and (paper,waste cores The Group will continue to recycle 100% of all non-hazardous press Current target: landfill). from diverted otherwise or recycled materials relationship with Remploy disabled continuing our persons through handled was equipment workshops IT redundant our All (98% of waste. printed waste from printing operations comprising reel Asends, in previouscores and years, we also continued to recycle 100% of paper complaints from any regulator were identified during 2009. during identified were regulator any from complaints other or prosecutions No legislation. environmental with compliance including process audit internal an in part taken have sites print and office major of our 14001 all ISO of the programme, part as specialists In addition to the auditing already undertaken by independent to 14001) stone ISO (a stepping standard of 2011.BS8555 end by the Newcastle Middlesbrough Liverpool, Cardiff, Quay, Birmingham, Central This new programme will start with locations. our office major to our systems offices management atof environmental Canary Wharf, implementation the expand and success this on to build We wish now programme. this 2010, on Trust the during to support Groundwork by the undertaken be will staff for training Further manufacturing facilities now meets best practiceinvolved. for the industry.We are confident that environmentalahead management of schedule, at our and this is a tribute toWatford) the efforts have of successfullythe staff gained certification during 2009, well 14001, across Trinity Mirror Printing, has now been achieved. achieved. been now 14001, has Printing, Trinity Mirror across and Hamilton achieving certification to Phase 3 of the

Cardonald, Newcastle,, Cardonald, going implementation of of implementation going Teesside ,

and

political and civic activities. activities. civic and political entertainment, confidential information, insiderguidance information, on conflicts and of interest, the acceptanceThe policy of gifts itself and is available on the Company’s website of employment. contracts and of individual gives provisions any or Journalists) (e of employees groups to individual issued code specific any with conjunction in read be should document This practices.’ and values continuing our of Rather, areaffirmation is it of conduct. rules of new creation the or are conduct and of integrity standards essential the how on guidance and integrity of each and every one of honesty the us. upon protection its for This depends Company,of and the document gives businesses operate. Its reputation its which in is communities the and one suppliers of advertisers, and the most vital resources whom it has dealings, namely its employees, shareholders,Company. readers The Company recognises its obligationsof tointegrity those andwith personal conduct standards in highest the all maintaining of us all on matters depends business our which involve the of well-being and development continuing The plc. UK amajor and UK the in publishers newspaper largest of the one is plc ‘Trinity Mirror states: policy current the to introduction review. The we regularly which Conduct Business of Standards on apolicy had has Company the years many For E lieu of a fee for an interview or in some to acharity to apayment form make asked are they where only so ofdo support. The People are most unlikely to make and Mirror Mirror, Sunday Daily ofdirect the titles National The Scotland. cash donations. They will make a number of donations to similarly appropriate will Limited Mail Sunday and Record Daily Scottish charitiesbased. based in is newspaper the which in community the in working to charities have a small budget out of which they will supportmake directshould becash given. donations Each of our regional newspapercase to companiesbe a demonstrable business or however, each in will, need There commercial criteria. two above the outside fall reason why such donations will be made to legitimate and supportableThere willcauses be thata further limited general pool of funds out of whichdonation. a receive would offices our of to one close very to based be happens just that charity national amajor that unlikely is It impact. abig make will donation a modest where charities based community smaller are support to receive likely surrounding the Group’s offices immediately and communities the in operating print to be charities will sites.support The charities that are cash of direct category Asecond industries. advertising or printing newspaper, the with associated or with connected charities various limited circumstances. The Company certain in will, to charities donations cash at direct make will plc a Trinity Mirror Group level, support newspaper. of each editor the for one be will comment editorial to run whether or appeal acharity to not or support to whether as decision the case every In charities. of various activities and aims the describing content, editorial through or donations for to readers appeals through be either will support This newspapers. of its pages the through charities support best can it that believes ‘Trinity Mirror follows: as is payments such other and donations to charitable regard with policy Company’s The Charities thics

to be maintained. It is not intended as a statement of new beliefs Annual Report & Accounts 2009 &Accounts Report Annual Trinity Mirror plc g Financial Dealings by

35

Financials Governance Business review Who we are Trinity Mirror plc 36 Annual Report & Accounts 2009

Corporate responsibility report

Any corporate donations requested from the national titles are likely The Charity Snowball Appeal makes donations to be redirected to the Group, as the Company’s headquarters share to disadvantaged and severely handicapped children in the Coventry the same office location as that of the national titles. and Warwickshire area. It raises funds from local readers, organisations and businesses through a variety of activities. Applications for financial All Group donations need the prior agreement of the Secretary and aid have to be supported by medical professionals and in 2009 grants Group Legal Director. Any local business donations require the prior have helped to purchase essential items of equipment including agreement of the relevant Managing Director. In addition to cash specially-adapted wheelchairs, tricycles and home computers. donations, the Company is active in making donations in kind in the form of used computer equipment, furniture, books, etc. Through its In the North East, the Journal launched ‘Think North East First’ in community involvement programmes, the Company makes available January which was aimed at encouraging readers to play their part in members of its staff for volunteering and mentoring programmes.’ helping the North East through the recession by buying local goods and services where possible. Community engagement The Evening Chronicle Sunshine Fund has raised funds and awarded Community engagement programmes throughout the Group are grants to individuals and local organisations, making a difference to so widespread and embedded that we sometimes find it hard to not only the lives of disabled children but the people who look after keep track ourselves of what we are doing. The main reason for this them. In October, the Sunflower Ball raised over £40,000 with the is that it is simply ‘what we do’. Our newspapers are integral to the help of patrons, Ant and Dec, who personally attended the Ball. lives of their readers and, particularly for our local and regional titles, Ant and Dec were interviewed at the Sunflower Ball by ITV Tyne Tees are simply part of the fabric of their local communities. and the interview was shown on the local news the following day. Activities range from large scale national events, such as the Pride More than 200 community groups benefited from donations through of Britain Awards, to small, but nonetheless important, local projects. the Evening Gazette’s ‘Wish’ campaign. They were all not-for-profit This report provides a snapshot of some of the numerous activities organisations that serve the Tees Valley community and ranged from undertaken in 2009 across the Group and provides an insight into schools and sports clubs to charities and groups for the elderly. the ability of communities to pull together, which is all the more A number of Trinity Mirror Southern titles (Surrey Herald Series, Ealing impressive given these economically challenging times. Gazette Series, Harrow Observer Series and Hounslow Chronicle Series) partnered with Bank for a fourth year to run the Local and regional titles ‘Let’s Do It’ Awards across their titles. Barclays put up a prize fund of A scheme launched by Adrian Sudbury, the late Huddersfield £15,000 across the titles to be awarded to local groups and charities Daily Examiner journalist, aimed at educating young people to help them with community projects and events. about the importance of bone marrow donation was hailed an ‘outstanding success’ by an independent assessor. The ‘Register The Ealing Gazette ran their ‘Pride in Our People’ Community Awards and Be a Lifesaver’ campaign, run by the Anthony Nolan Trust and to honour the unsung heroes across the boroughs of Ealing and NHS Blood and Transplant, was established after Adrian secured Fulham and . The Uxbridge Gazette again ran their £80,000 funding for a pilot project following a meeting with Prime popular ‘Local Heroes’ awards. Minister . Adrian rose to public prominence as the ‘Baldy Blogger’ charting experience of his illness. He spent the National titles last few months of his life campaigning for better and Now in its eleventh year, the Daily Mirror’s prestigious Pride of Britain information for young people on the importance of bone marrow Awards 2009 returned bigger and better than ever in October. donation. His legacy project has so far trained 65 volunteers to deliver Staged at a larger venue than before, the Grosvenor House in seminars in sixth forms and colleges. It has so far run educational London’s Park Lane, the glittering event became the most popular talks for 3,250 students across South Yorkshire and . The and highest-rated awards show of the year on British television, campaign hopes to become a national educational project. ahead of the Brits and the Baftas, with an audience of more than six million viewers on ITV. It also received extensive coverage on national In the North West, The Liverpool Echo and Daily Post have built and regional TV and radio and in newspapers and glossy magazines. on the success of their official charity ‘Liverpool Unites’. Inspired by Prince Charles called Pride of Britain a “unique way to celebrate some the way the city came together in support of murdered schoolboy truly remarkable people” and Prime Minister Gordon Brown said the Rhys Jones’ family, Liverpool Unites continues to support local occasion has become “a British institution” and a “highlight of our charities and community groups across Merseyside that help young national calendar.” people to break the cycle of crime and poverty. Embodied by the purple ribbon symbol, a mix of the red and of the city’s two Hosted by , high profile public figures, from the famous football clubs, the charity has raised more than £250,000 Prince of Wales and the Prime Minister to Sir , in its first two years. Everton Football Club named Liverpool Unites Joanna Lumley, and Simon Cowell, paid tribute to the as its official charity of the 2009/10 season and launched a purple nation’s most remarkable unsung heroes. These ranged from children away kit that has helped to raise over £100,000 for the charity. and adults who had performed acts of breathtaking courage to exemplary community champions, charity fund-raisers, teachers In the Midlands, the Birmingham Mail Charity Trust continued to and careworkers. Special recognition was given to members of the raise funds from local readers and businesses to give out in grants emergency services and armed forces who had gone beyond the call to community groups. Fund-raising events in 2009 included the of duty. England cricketer Andrew ‘Freddie’ Flintoff and Gary Lineker Birmingham Mail Fun Run which saw nearly 3,000 people raise even flew to Afghanistan to present a Mirror award to the medics £70,000 and the Santa Dash in December. All proceeds were given risking their lives to save troops on the front line. out in grants ranging from £500 to £2,000, with recipients ranging from inner city playgrounds to deprived pensioners’ club day-trips. a the murdered schoolboys Jimmy Mizen and Damilola Taylor joinedcampaign sponsor a high-profile charity dinner. The parentsThe of Daily Mirror was proud to see its ‘Stop Knives, Save Lives’ of Commons motion demanding aHouse extra signed parties help political main three the for from members carers.Sixty quickly gained the support of MPs across elderly, the and sick the after look the who population of the political cent per ten spectrum. or people, million of six plight the highlighted which campaign, The law. the in to enshrined be leave to discretionary aright and carers for checks health and breaks respite of benefits, areview for calling October in Campaign Carers’ for ‘Caring its launched Mirror Daily The Trust. Meningitis Children Street Ormond Great Sargent, CLIC Prince the including charities supported of Britain year, This Pride winners. the selected of judges panel distinguished a and of researchers by ateam shortlisted were which received were at postboxes of Britain Pride at or online by post, either awards the for Readers of the Daily Mirror were invited to nominate unsung heroes are published. are they which in community the for and community the in community, of the part not are they if nothing are they Group’s believe The titles Southern region offices and on the Daily Mirror. gave we 2009 In deserve. they opportunities the obtain experience work or of qualifications by alack back held youngsters helping initiative an of22, Catch co-sponsors as support active its continued Group The and raise £32,000 in aid of two charities, The Marinathird Dalglishannual Santa Appeal 5k Dash in December. Glasgow’s supported Mail Sunday More the and Record than Daily Scottish The 3,300 helped across the UK celebrating modern, diverse Britain. its Mirror’s ‘ Daily The ‘Tackling Government pledging a further £5 million to support the crime. gun and knife and violence street against campaigns which

charity auction raise £25,000 for the Rob Knox Memorial Fund, 5,000 branches of The Co-operative all over the UK. 25,000 entries 25,000 entries UK. the over all Co-operative of The branches 5,000 message of tolerance and the campaign bus made its third trip trip third its made bus campaign the and of tolerance message family of Harry Potter actor Rob Knox for the event. They saw

The Prince and Princess of Wales Hospice. of Wales Princess and Prince The 12

The campaign also secured another success with the students work experience in our regional business in our

Knives Action Programme’. Hope Not Hate Not Hope ’ campaign continued to spread ’ s Hospital and the the and s Hospital ’ s Trust, ChildLine,

4 March 20104 March Director Legal Group and Secretary Vickers Paul responsible company. asocially as seen being from advantages commercial obvious will also be key in the retention of staff.our Wecorporate also believe social thatresponsibility there of things, are other programmes. many amongst assessment, an on made been Thosehaving programmes decision that industry, our entering those for of choice employer the as seen to being advantages are there that We believe reputational. similarly are areas these in opportunities that believes Company The codified. and consolidated been have and Safety policies and systems have Health Company’s the been recently More Group. of the put culture the within under review and embedded are Conduct of Business Standards Company’s The and managers. employees of relevant training through and systems and standards control and manage these risks is through a regularof reputational review of damage. its The procedure that theThe Group Board employs believes to that the Group’s main exposure would be catastrophic. be one would areas three of these any in afailure that unlikely is It policies. ethical or safety and health environmental, of its failure to adomestic led that failure a procedural be therefore, would, Group the for exposure greatest The exposure. operate in developing countries or at the sharpIt endis ofnot, environmental therefore, exposed industry. to ‘heavy’ in engaged it some is nor amultinational not of is Group The the risks faced by those who opportunities and Risks Annual Report & Accounts 2009 &Accounts Report Annual Trinity Mirror plc

37

Financials Governance Business review Who we are Trinity Mirror plc 38 Annual Report & Accounts 2009 Board and management team

1. Sly Bailey (48) 3. Gary Hoffman (49) Chief Executive Non-Executive Director Sly was appointed Chief Executive in February 2003. She started Gary joined the Board in March 2005. He was appointed Senior her media career in advertising sales at and then Independent Director in May 2007. Gary was appointed Chief . In 1989 she joined IPC Media Limited as Head Executive of Northern Rock plc in October 2008. Previously Gary of Classified Advertising Sales and joined their Board in 1994 as was Group Vice-Chairman and Executive Director of Barclays plc. Advertising Director. In 1997 Sly was appointed Managing Director He is a director of Visa Europe and 1NG Limited. Gary is also of IPC tx, the TV listings division. In December 1999 she was Vice-Chairman of Coventry City Football Club. appointed Chief Executive of IPC Media Limited and subsequently led the sale of the business to AOL Time Warner. 4. Jane Lighting (53) In November 2009, Sly was appointed non-executive director of Non-Executive Director Ladbrokes plc. She is also a trustee of The English National Ballet Jane joined the Board as a non-executive director in January 2008 School and is a director of Association and Chairman of and was appointed Chairman of the Remuneration Committee in its Remuneration Committee and President of NewstrAid, a charity 2009. Jane was Chief Executive of Five and of Flextech plc and is for the wholesale and retail news trade. Sly was previously Senior a Trustee and Fellow of the and Council Independent Director and Remuneration Committee Chairman of Member of the British Screen Advisory Council. Jane was appointed EMI plc and a non-executive director of Littlewoods Plc. as a non-executive director of Paddy Power plc in September 2009.

2. Sir Ian Gibson CBE (63) 5. Kathleen O’Donovan (52) Chairman Non-Executive Director Sir Ian joined the Board of Trinity Mirror and was appointed Chairman Kathleen joined the Board in May 2007. She is Chairman of the in May 2006. He is non-executive Chairman of Wm Morrison Audit and Risk Committee. Kathleen is a non-executive director at Supermarkets plc. Previously he was President of Nissan Europe and and Arm Holdings plc. During 2009, Kathleen was Senior Vice President of Nissan Group. Sir Ian was Chairman of BPB Deputy Chairman and Senior Independent Director of Great Portland plc, was on the Court of the Bank of England, was Deputy Chairman Estates plc. Previously she was on the Court of the Bank of England of Group plc, Senior non-executive director of Northern Rock and held non-executive directorships at O2 plc and EMI plc. Between plc and a non-executive director of GKN plc and Greggs plc. 1998 and 2002 she was CFO of Invensys plc, having previously been the Finance Director of its legacy company BTR plc which merged with Siebe plc to create Invensys.

13 10 12

5 2 3 4 1 6 7 positions with Gemini Consulting and Kleinwort Benson. Kleinwort and Consulting Gemini with positions Director, 1997, in to Tesco joining Strategy Prior plc. held Laura Tesco.com and a Director of TescoTesco.com aDirector and Laura joined the Board in August 2006. She Director is Non-Executive Chief Executive of (4 Wade-Gery Laura 8. PCC. the for remit the sets and director of the Press Standards Board Radio. of Virgin director of anon-executive Finance, previously was He the body that funds Director. Managing Assistant became subsequently he where TV-am Daily News, which he left to join the breakfastin television private practicecompany at the Bar. was and barrister as a He qualified was 1994. since originally He Group legalMirror manager of the London of adirector been 1999 having September in Board the joined Paul Director Legal Group and Secretary 7. 2003. May in Board the joined and Director Finance Group Treasury. appointed and was He Accounting of Director then Treasurer and Group Auditor. subsequently was He practice with Deloitte. He joined Mirror Group Vijayin 1994 qualified as asan Internala chartered accountant and Director Finance workedGroup in private Vaghela (4 Vijay 6. Paul Vickers ( Vickers Paul 9 50 3 ) ) 11 5 ) Bank . Previously she was Group Group was she . Previously 8 Paul is a a is Paul

at Storehouse plc, which incorporates Bhs and Mothercare. and Bhs incorporates which plc, Storehouse at Director Change Business and CIO Trinity Mirror, Group was he joining Tony was appointed Group IT Director Director Technology in Information DecemberGroup 2000. Prior to 13. Federation. Industry Printing British of the President and College Education Tower at Further Hamlets of Governors Chair is Rupert Printers. of Westferry Director Managing and Office, Stationery The within of adivision Director Managing been previously has Rupert the Daily Mail and The Independent. including publishers Prior external for copies of to volume asignificant joiningand Trinity Mirror, titles newspaper Trinity Mirror all prints that division manufacturing integrated the Printing, Trinity Mirror for responsible is He 2004. March Rupert joined Trinity Mirror as Group Director Manufacturing of Director of Manufacturing in 12. Ltd. Athletics of Scottish Chairman non-executive also is He agencies. advertising in industry in advertising sales at the Midland NewsWolverhampton Association Ltd Express & Star, having enteredLtd, the newspaperMarketing Director at MIN plc and ResearchBusiness Manager Development at the Director at Thomson Ltd. previously was He Media Weekly Regional of Midland Director Managing Newspapers Scottish Daily Record and Sunday Mail Ltd, priorin Septemberto which 2008.he was From 1998 he was Managing Director of the Mark was appointed as Managing Director of our Nationals d Nationals of our Director Managing as appointed was Mark Nationals Director, Managing 11. 2003. in Group was subsequently appointed Managing Director ofbecame Wallpaper* a member of the Board of IPC Media in Advertising2000 and in 1998, where she was Managing Director.Advertising Sales Georgina Director for SouthBank 1995 in Group as Media IPC and 1994. in joined Director She wentAdvertising on to form IPC media career at Express Newspapers where she was appointedGeorgina joined the Company in February 2005. Regionals Director, SheManaging started her 10. 2002.in public relations. He was appointed and investor including to communications the Group for Executive responsible is He Committee 1980. in Mirror Daily the for areporter as Group Mirror joined Nick Communications Corporate of Director 9. Director Legal Group and Secretary Vickers, Paul Director Finance Group Vaghela, Vijay Executive Bailey, Chief Sly Committee Executive

the mid 1980s. Mark spent the early part of his career working in in working career of his part early the spent 1980s. Mark mid the Nick Fullagar Nick Mark Hollinshead Georgina Harvey Georgina Tony Pusey Rupert MiddletonRupert Nick is a trustee of the Child Growth Foundation. Growth Child of the atrustee is Nick

Annual Report & Accounts 2009 &Accounts Report Annual Trinity Mirror plc

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ivision

Financials Governance Business review Who we are Trinity Mirror plc 40 Annual Report & Accounts 2009 Corporate governance

The Board is committed to maintaining high standards of corporate Directors governance and recognises the importance of good corporate There are currently eight directors: Chairman, Sir Ian Gibson; Chief governance. Sound governance is central to achieving the directors’ Executive, Sly Bailey; Senior Independent Director, Gary Hoffman; prime objective of maximising shareholder value and comprises, two other executive directors; and three other non-executive directors. principally, the processes by which the Group is directed and The directors’ biographies are set out on pages 38 and 39 and managed, risks are identified and controlled. illustrate the directors’ breadth of experience, which should ensure This statement, together with the Remuneration report on pages an effective Board to lead and direct the Group. 47 to 52, the Audit & Risk Committee report on pages 43 to 45 The Chairman and the non-executive directors have letters of and the Directors’ report set out on pages 53 to 55, describes how appointment which are available for inspection at the registered office the Company has applied the relevant principles of the June 2008 of the Company during normal business hours and at the place of the Combined Code on Corporate Governance as issued by the Financial Annual General Meeting. Reporting Council (FRC Combined Code). The Board believes that the Company complied with the FRC Combined Code in full during The non-executive directors are appointed for an initial term of the period ended 3 January 2010. three years and may be invited to serve subsequent terms. Before a non-executive director is proposed for re-election by shareholders The Board at the end of their initial term, the Nomination Committee meets to consider whether his or her performance continues to be effective The Board is responsible for promoting the success of the Company and whether they demonstrate a commitment to the role. and for providing leadership within a framework of prudent and effective controls that enable risk to be assessed and managed and During the year, the Chairman and non-executive directors met is accountable for the Group’s operations. without the executive directors being present. The non-executive directors meet without the Chairman being present at least once The Board has a formal schedule of matters reserved to it which a year to review the performance of the Chairman. includes: In accordance with the FRC Combined Code and the Company’s – the Group’s strategic plans; articles of association, every director is subject to reappointment by – acquisitions or disposals; shareholders at the first opportunity following their appointment and – capital expenditure; subsequently must seek re-election at least once every three years. – all financing matters; – the annual budget and the review of operating and The Board meets regularly and a schedule of attendance is shown financial performance; below in respect of all Board and committee meetings during – annual and half-year financial results and interim the year. management statements; – Board and Company Secretary appointments; Table of attendance of meetings – directors’ conflicts of interest; and Audit – dividend policy. & Risk Remuneration Nomination Board Committee Committee Committee AGM Other specific responsibilities are delegated to Board committees, Sly Bailey 9/9 3/3 4/4 2/2 1/1 each of which has clear written terms of reference. The terms of reference for the Audit & Risk Committee, the Nomination Sir Ian Gibson 9/9 3/3 4/4 2/2 1/1 Committee and the Remuneration Committee are available on Gary Hoffman 8/9 3/3 3/4 2/2 1/1 the Company’s website at www.trinitymirror.com/our-company/ corporate-governance. Jane Lighting 9/9 3/3 4/4 2/2 1/1 Kathleen O’Donovan 9/9 3/3 4/4 2/2 1/1 Chairman and Chief Executive Vijay Vaghela 9/9 3/3 – – 1/1 The roles of the Chairman and Chief Executive are separated and their responsibilities are clearly established, set out in writing and Paul Vickers 9/9 3/3 4/4 – 1/1 agreed by the Board. Laura Wade-Gery 9/9 3/3 4/4 2/2 1/1

Company Secretary Of the nine scheduled Board meetings, two were held at operating All directors have access to the advice and services of the Secretary sites in Birmingham and Cardiff during the year. and Group Legal Director, Paul Vickers, who is responsible for Board meetings are structured to allow open discussion and all ensuring that Board procedures and applicable rules are observed directors participate in the discussion of strategy, trading, financial and in the furtherance of their duties directors may take independent performance and risk management. Board papers are circulated professional advice if necessary at the Company’s expense. in sufficient time before a meeting to enable full and informed The Company Secretary’s responsibilities include ensuring good discussion. Members of the wider Executive Committee attend information flows to the Board and its committees and between Board meetings by invitation and make presentations regularly. senior management and the non-executive directors. more than nine years are subject to annual re-election. appointment. Any non-executive directors their following Meeting who General have Annual first the at served re-election for for stand must Board by the appointed directors any addition, In seek re-election by shareholders at least once to directors every all require three of Association years. Articles Company’s The directors of Re-election Board In addition to the availability of the Register of Conflicts at each followed. been have relevant procedures for authorisation the and 2009 throughout ofPolicy Conflicts the potential applied has Board The or actual conflicts when giving authorisation or subsequently conditions or limits impose may they if and Company ofappropriate. the success to act in the way they consider wouldnon- the be conflict, actual or mostpotential likely to promote the in the matter being considered. In deciding whetherconsidered to authorisefor authorisation a by those directorsprovides who havea formal no system interest for directors towhich 2008 October declarein Policy Conflicts aformal conflicts adopted Board The to be Directors’ conflicts and to perform him enabling place in are procedures appropriate and regularly Vickers’s Mr performance reviews Chairman The required. where independence to maintain able is Vickers Mr an executive director and Company Secretary as and Vickers’s of Paul roles believes effect the considered has that Board The control. direct his independence given the relationships were in areasnot outsidebelieve of that this former connection affectsCompany Mr Hoffman’s has connections with Barclays, the Although plc. of Barclays the Director Executive an Company and Barclays does Gary Hoffman was, until October 2008, Group Vice Chairman of his responsibilities. devotes sufficient time to the Company he that believes Board The plc. to Supermarkets properlyWm Morrison and fully fulfil his other significant commitment, which is hisof Chairmanship his appointment. of The Chairman date the at has independent was declared Chairman the that believes Board toThe the Company independent are directors non-executive its all that believes Board The Director independence duties. their out carrying in development professional The Company Secretary helps directors undertake any other to gain a deeper insight into year the during the sites Cardiff Group’s and Birmingham the visited Board The operating environment. taking into account their individual appropriate, as issues qualifications relevant on updates ongoing receive Directors and experience. directors. new and individually tailored induction Afull programme matters. governance-related other and is procedures of Board provided for all are provided with background reading directors New provided. is about training appropriate the and theappointment Group and details adirector’s on needs training of any made is assessment An Training and articles of association articles and Policy Conflicts the with accordance in basis aregular on of interest and

the Board will continue to monitor and review potential conflicts fulfil

meeting for review, an annual review has been conducted

his duties accordingly. duties his they consider necessary to assist them . conflicted directors are required required are directors conflicted

. found on page 38. page on found be can details Gibson’s Ian biographical Sir Chairman. and director anon-executive as commitment demonstrate and effectively perform to continues Meeting General Annual the at re-election for standing The Board has considered and agreed that Sir Ian Gibson who is insurance for its directors and officers. and directors its for insurance The Company maintains appropriate directors’ and officers’ liability 2006. Act Companies of the by s defined as provision indemnity party third qualifying in 2008, the directors have the benefit of anAs approvedindemnity which by shareholdersis a at the Annual General insurance Meeting and indemnity heldDirectors’ evaluation. by the raised matters of the each address appropriate procedures in place and actions areBoard being and taken its tocommittees continued the that to concluded was it operate Overall, committees. its and Board of the effectively with governance review. The review covered the rolesdiscussed and atprocesses a Board meeting as and part presented were of results The Long. by Dr a devised widerquestionnaire corporate internal an by using directors individual and committees of its that and Board participated in a formal evaluation of assistedits own withperformance performance evaluation for the Board.every thirdThis year, year. theIn 2008, Dr Tracy evaluation external with of engaging apolicy Long adopted has Board The of Boardroom Review, evaluationBoard performance through made also is Communication report. of this discussion Board the during present is He investors. institutional and analysts from received feedback and of comment details giving Board the for report runs the Company’s investor relations also who Communications, Twice of Corporate ayear,programme, Director the produces a formal shareholders. major concerning issues related any and activities The Board receive regular detailed reports on investor relations year.the during shareholders of major anumber with met Chairman The the Chairman will write to the shareholder tonotification offer a meeting. of a new substantial shareholder committeein the Company, Chairmen, are available including directors, for all Meeting questions. General Annual At the shareholders. In addition, on institutional and analysts with regularly meet Director Finance received orally or in writing. The Chief Executiveinstitutional and the Groupand private investors and respondsThe Companyquickly toencourages all queries two way communication with both its communications Shareholder Chairman. of its invitation the at Committee &Risk Audit of the meetings attends and Committee the Nomination Committee, is a full member of heldthe atRemuneration those meetings. Similarly debate the and ofChairman, discussion detail the to follow able are and meetings in addition to chairing committee during present are if they responsibilities her or his fulfil C believes that an increasing amount of C work Remuneration and Nomination is &Risk, Audit undertaken by these of the members as serve should directors non-executive all that Following a corporate governance review the Board has agreedCommittee membership ommittees and that a non-executive director can only properly

the Company’s website which is regularly updated. regularly is which website Company’s the

Annual Report & Accounts 2009 &Accounts Report Annual Trinity Mirror plc ommittees. The Board The ommittees.

ection 234 41

Financials Governance Business review Who we are Trinity Mirror plc 42 Annual Report & Accounts 2009

Corporate governance

Audit & Risk Committee Corporate governance compliance statement The Audit & Risk Committee is chaired by Kathleen O’Donovan. The Company has complied throughout the financial year with the Gary Hoffman, Jane Lighting and Laura Wade-Gery are members. provisions set out in the FRC Combined Code. The Committee meets as required during the year to monitor, review and approve the internal audit plan, direct the internal audit function Going concern basis and external auditors and to oversee the management of internal In accordance with LR 9.8.6(3) of the Listing Rules, and in determining financial controls and risk management systems. whether the Group’s annual consolidated financial statements can The Audit & Risk Committee report on pages 43 to 45 contains a be prepared on a going concern basis, the directors considered more detailed description of the Committees’ role, responsibilities, factors likely to affect future development, performance and financial activities and effectiveness during the year. position, including cash flows, liquidity position and borrowing facilities and the risks and uncertainties relating to business activities. These The Group Finance Director, other directors, the Group’s external are set out in the Chairman and Chief Executive Statement on pages auditors, internal auditors and other management, as appropriate, 16 to 19, the Business Review on pages 20 to 30 and in the notes to attend meetings of the Committee. the consolidated financial statements, in particular notes 27, 28, 29 The Committee has formal written terms of reference which are and 36. The key factors considered by the directors were as follows: published on the Company’s website. – the implications of the challenging economic environment on the Group’s revenues and profits. The Group undertakes forecasts and Remuneration Committee projections of trading and cash flows on a regular basis. This is essential for targeting performance and identifying areas of focus The Remuneration Committee is chaired by Jane Lighting who for management to improve performance and mitigate the possible was appointed in July 2009 in place of Gary Hoffman. Gary Hoffman adverse impact of a deteriorating economic outlook and also remains a member of the Committee. Other members of the provides projections of working capital requirements; Committee are; Sir Ian Gibson, Kathleen O’Donovan and Laura Wade-Gery. – the impact of the competitive environment within which the Group’s businesses operate. In particular, the Nationals operate in a highly The Committee meets as required during the year to review the competitive marketplace characterised by high levels of marketing Company’s general policy on executive remuneration, the application expenditure and cover price discounting; of the policy to the remuneration and benefits of the executive directors, and to recommend and monitor the level and structure of – the impact on our business of key suppliers (in particular newsprint) remuneration for senior management. being unable to meet their obligations to the Group; The Remuneration report on pages 47 to 52 contains a more detailed – the impact on our business of key customers being unable to meet description of the Company’s policies and procedures for executive their obligations for services provided by the Group; remuneration. During the year, as appropriate, the Chief Executive – the continued fragmentation of media and the implications for and the Secretary and Group Legal Director have attended meetings our business; of the Committee but they do not participate in discussions on their own remuneration. – the potential actions that could be taken in the event that revenues are worse than expected, to ensure that operating profit and cash The Committee has formal written terms of reference which are flows are protected; and published on the Company’s website. – the committed finance facilities available to the Group. The Group Nomination Committee has access to overdraft facilities and a committed bank facility to meet day-to-day working capital requirements, which at the year The Nomination Committee is chaired by the Chairman. All the end had undrawn facilities of £178.5 million. The bank facility non-executive directors and the Chief Executive are members. is committed to June 2013 and drawings can be made with The Committee meets as required to select and propose to the 24 hours’ notice. Board suitable candidates of appropriate calibre for appointment Having considered the factors impacting the Group’s businesses, as directors. The Committee would normally expect to use the including downside sensitivities, the directors are satisfied that the services of professional external headhunters to help in the search Group will be able to operate within the terms and conditions of for and selection of candidates and has followed this practice for the Group financing facilities for the foreseeable future. The Group all current directors. continues to operate comfortably within its debt covenants and does The Committee has formal written terms of reference which are not expect to have to refinance or renegotiate its facilities during the published on the Company’s website. next 12 months. The directors have a reasonable expectation that the Company Administration Committee and the Group have adequate resources to continue in operational The Administration Committee consists of the Chief Executive, Group existence for the foreseeable future. Accordingly, they continue to Finance Director and Secretary and Group Legal Director and meets adopt the going concern basis in preparing the Group’s Annual as necessary to deal with administrative matters of a day to day nature. Report and Accounts. Paul Vickers Accountability and operating and Secretary and Group Legal Director financial review 4 March 2010 Through the reviews of the performance and financial position in the Chairman and Chief Executive statement on pages 16 to 19 and the Business review on pages 20 to 30 together with the Directors’ report on pages 53 to 55, the Board seeks to present a balanced and understandable assessment of our position and prospects. The directors’ responsibility for the financial statements is set out on page 55. – – – – – –  to: are responsibilities principal Committee’s The Committee. by the implemented Company’s ‘whistleblower’ policy, which hasThe beenwebsite approved and theand Company’s intranet also carry details of the expense. Company’s authorisation for obtaining independent external itadvice has atto the address during the year. The termsare ofavailable reference to provideeffectively fulfilresources and the expertise relevant and accounting,appropriate the that satisfied audit and risk issues is it and Committee of the balance and composition the reviewed During the Board performance evaluation in 2009, the Board Committee. of the meetings attend auditors The Group Finance Director, other directors, the Group’s external of Tescoa director Bank of Tesco.com is and Executive Chief is Laura Five. company television of the and plc Flextech of both Executive Chief was Jane experience. Jane Lighting and Laura Wade-Gery each have extensive commercial plc. Rock of Northern Executive Chief currently is and plc of Barclays Chairman Vice Group was He services industry having spent 26 years with the GaryBarclays Hoffman alsogroup. has considerable experience of the financial plc. Estates Portland Great and plc of Prudential Committees Audit the was she 2009 Invensys).Chairman During (subsequently of the plc of BTR Director Young. 12 for Finance was the She years & Ernst at apartner was and Accountant aChartered is Kathleen experience. financial relevant and recent with member primary its as The Committee has identified its Chairman, Kathleen O’Donovan, Committee. &Risk Audit renamed was Committee the and 2009 this review amended terms of reference were adoptedwork involved in October the consideration recognised having Committee ofRisk risk and risk management. FollowingDuring the year the Board formally reviewed the remit r of Committee &Risk Audit the Audit &

whistleblowers; review the Company’s procedures for handling allegations guidance; ethical relevant from into account taking auditors, external the from services non-audit on policy implement and develop and regulatory requirements; and effectiveness including considering objectivity relevant auditor’s independence, external the review and UKmonitor professional of engagement; terms and remuneration their approve and auditor external of the appointment the to Board the recommend judgements; and issues reporting financial significant review nature; sensitive of aprice announcements as such documents, regulators and any financial information containedfinancial in certain performance, other reviewing significant financialstatements returns to and any other formal management announcementinterim results, financial half-year and annual its relatingincluding to its Company of the statements financial of the integrity the monitor , internal auditors . and other management other and that an increasing amount of its eport , as appropriate,

Company at risk. at Company the put not do and environment control arobust maintaining for and that compensation policies and practices nature and size of this agroup for adequate is policy areremuneration appropriate Company’s the that believes Committee The Committee. The Committee members are also members of the Remuneration Audit. and of Risk of Director role Charmian Committees’ of the areview Following companies. and has extensive experience of working at a seniorthe Committee.level in Thelarge Director of Risk by approved is and which of review Audit programme arolling has It controls. is highly qualified The internal audit function focuses on enhancing the Group’s Management. Risk and Control internal Internal headings the under 44 pages on found be can information Further probability. and impact by identified were risks principal 2009, During reference. management actions. It is a valuable and of occurrence source probability and business the on of impact of the information for key the details which map to arisk access has Committee The properly. operating are and adequate are place, in The Committee has considered that the appropriateaudit systems activities, are internal controls and risk managementThe Committee systems. monitors and reviews the effectiveness alike. of investors and internalshareholders to responsibilities its fulfil to sufficient in a timely manner and in formats management from which information required any are receives comprehensible Committee The and – – – – –

Committee of the Committee this approval may agreement the (with audit be internal for delegated responsible is who Audit and to the o appointment the approve and plan; audit internal the approve and review auditors; internal for standards professional appropriate meet ensure the function has the necessary and resources function audit internal of the remit the approve and and review is able to function; audit internal of the effectiveness the review and monitor system; management review the Company’s internal financial control system and risk Steven, former Head of Internal Audit, was promoted to the to the promoted was Audit, of Internal Head former Steven,

Chairman). r termination of the Director of Risk of Risk Director of the r termination Annual Report & Accounts 2009 &Accounts Report Annual Trinity Mirror plc risks, an assessment assessment an risks,

terms of reference, of reference, terms 43 and 45 and

Financials Governance Business review Who we are Trinity Mirror plc 44 Annual Report & Accounts 2009

Corporate governance

External auditors’ independence and non-audit work Internal control The Committee has primary responsibility for making The directors are responsible for the Group’s established system recommendations on the appointment, reappointment and removal of internal control and for reviewing its effectiveness. During the year of the external auditors. the Board has not been advised of any failings or weaknesses which were deemed to be significant. No system of internal control can The Committee recommended the reappointment of Deloitte LLP provide absolute assurance against material misstatement or loss. as external auditors following the annual external audit effectiveness review where the Committee concluded that the audit was fit for Such a system is designed to provide the directors with reasonable purpose. Deloitte LLP audits all significant subsidiaries of the Group. assurance that problems are identified on a timely basis and dealt with appropriately. The key procedures that have been established The current overall tenure of Deloitte LLP dates from 1999. and designed to provide effective internal financial control are: Any decision to open the external auditor to tender is taken on the recommendation of the Committee based on the results of the Management and organisational structure – the existing effectiveness review described below. There are no contractual organisational structure is considered appropriate to the size of the obligations that restrict the Company’s choice of external auditor. Group. This clearly identifies levels of delegated responsibility to operational management. The performance of senior management The external audit effectiveness review which was carried out by the is regularly evaluated and individual employees’ responsibilities are Committee, with the help of the Director of Risk and Audit, dealt with clearly defined and communicated. external auditor independence, planning, expertise and resources, audit process and communication. The review was in the form of Financial reporting – part of the comprehensive management an extensive questionnaire which was sent to directors and senior reporting discipline involves the preparation of detailed annual managers across the Group. The results were analysed by the budgets by all operating units. These budgets are reviewed by Director of Risk and Audit and a full report was submitted for review the Executive Committee and are ultimately summarised and by the Committee. There were no adverse findings. The report as submitted to the Board for approval. Weekly revenue and profit a whole was discussed with the external auditors. forecasts are received from all operating units followed by monthly management accounts, which are prepared promptly and reported The Committee is satisfied that there are no relationships (such against the approved budget. Consolidated monthly management as family, employment, investment, financial or business) between accounts, including detailed profit analysis (with comparisons to the auditor and the Company (other than in the ordinary course budget, latest forecasts, prior year and consensus market opinion) of business). together with a treasury report (including comparison to our financial Private meetings were held with Deloitte LLP to ensure there were no covenants) are prepared providing relevant, reliable and up to date restrictions on the scope of their audit and to discuss any items that financial and other information to the Board. Profit and cash flow the auditors did not wish to raise with the executive directors present. forecasts for the current year are prepared and submitted to the Board at quarterly intervals during the year. The Committee reviewed and agreed the engagement letter from Deloitte LLP confirming their independence and objectivity. It also Investment appraisal – we have a clearly defined framework reviewed the scope of non-audit services provided by Deloitte LLP for capital expenditure which is controlled centrally. Appropriate to ensure that there was no impairment of objectivity. authorisation levels and limits beyond which such expenditure requires the prior approval of the Capex Committee, consisting The Committee is satisfied that the level of fees payable in respect of the three executive directors and the Director of Group IT, or of audit services is appropriate for a group of its size and that an in certain circumstances, the Board, are clearly set. There is a effective audit was conducted during 2009. Further details prescribed format for capital expenditure applications which places concerning external audit fees can be found in note 6 to the a high emphasis on the overall Group strategy or support for the consolidated financial statements. expenditure and requires a comprehensive and justified financial The Board has accepted the Committee’s recommendation appraisal of the business case being put forward. All significant on a policy on the engagement of the external auditors to supply corporate acquisitions or investments are controlled by the Board non-audit services. The policy has been adopted by the Board or a Board sub-committee, and are subject to detailed investment and as a general rule the auditor will not be engaged to provide appraisal and performance of due diligence procedures prior to any additional services other than tax or accountancy advice and approval by the Board. circulation audits. There may, however, be circumstances where it Functional reporting – a number of our key functions, including could be in the Company’s and shareholders’ interests if the auditor treasury, taxation, internal audit, risk management, litigation, IT was engaged. Such circumstances are likely to be relating to either strategy and development, environmental issues and insurance are exceptional transactions or deemed not to be of a material nature. dealt with centrally. Each of these functions reports to the Board on In all cases, the engagement of the auditor for non-audit work must a regular basis, through the Chief Executive, Group Finance Director be approved in advance by the Committee Chairman. or Secretary and Group Legal Director, as appropriate. The treasury In line with the FRC Combined Code requirement, the Board function operates within the terms of clearly defined policy statements. undertook a review of the effectiveness of all its Committees during The policy statements exist to ensure that we are not exposed to any the year, including the Committee, as part of the annual review unnecessary risk and that where appropriate there is hedging against related to Board performance as described above. foreign currency and interest rate risks. The Committee reviews reports from management, the internal audit department and the external auditors to provide reasonable assurance that internal control procedures are in place and are being followed. Formal procedures have been established for instituting appropriate action to correct weaknesses identified from the above reports. areas which are critical to the achievement of business objectives. of business to achievement the critical are which areas on those a focus has and based risk is plan audit internal The fulfilled. to be strategy agreed the to team enable experienced and a skilled recruited has Audit and of Risk Director –the Audit Internal Group approval. for Board the procedures adopted by the Company prior to beingfor thesubmitted annual toreview of effectiveness prepared papers draft the of considers and issues the to emerging any Board risk management in the review of internal financialto the controls. internal audit The function, Committee to externalalerts the review,auditors andupdate to managementand approval of the –annual the Committee &Risk Audit roleinternal of theaudit Committee plan, directionincludes the 2009: during operated control of internal system the The following illustrate how the risk management process and committees. Board and policy review, steering, various the and reporting management controls, investment controls, financial include Board has taken into consideration the control, of internal a system of our number effectiveness the of reviewing In key elements, which acknowledged. is Group the within management of risk development ongoing and establishment the positive contribution made by recognised, senior is control internal for management responsibility Board’sthe overall to the for directors, as applicable for this accountingThe processperiod. accordsAlthough with the Turnbull Guidance on Internal Control Committee. and Audit by the and directly Board by the review to regular subject is process The report. of this to dateof approval up the and year the throughout place in remained has face we risks significant the managing and evaluating identifying, for process ongoing An Risk management Risk

and business of the operations into the further management risk and Board member. Steps have been every and of each taken required is reporting to compliance embed Ultimate control. internal control to operating company, divisional senior requiring and reporting, Group compliance executive management risk end year management 4 March 20104 March Committee &Risk Audit Chairman Kathleen O’Donovan 31 to pages 37. on published report, responsibility Corporate the in included is information relevant Further loss. or misstatement material against assurance absolute not and failure control are designed to manage rather than eliminateof the risk of Year end compliance reporting map. risk the in them documented and underway are or place taken have which initiatives and actions plans, the reviewed have managers senior relevant the and key risk each of owner Committee Executive the risks, Group of significant and focused monitoring, reporting, – key risks toevaluation functional enable Group and consistentandDivisional management risk. to mitigate and the other sources of assurance force in upon policies the Group, the which throughout risks to minimise reliancetaken is placed actions the to show updated regularly and developed been has map risk A reviewed. been have risks significant all and year the during objectives for the risk management agreed The framework department. audit internal of the members with haveclosely been achieved management activities of the Risk Management GroupThe workingSecretary and Group Legal Director co-ordinatesof thethe riskExecutive Committee together with – Group theinvited Management Risk Risk senior Management executives. Group is formed

management and the Board. The Group’s systems of internal confirm their responsibilities for risk management and internal

to deal with areas of improvement which come to the attention

to achieve business objectives and can only provide reasonable

– a formal process exists for Annual Report & Accounts 2009 &Accounts Report Annual Trinity Mirror plc

45

Financials Governance Business review Who we are Trinity Mirror plc 46 Annual Report & Accounts 2009 Remuneration at a glance

Key points in 2009 What are the component parts of reward? – second consecutive pay freeze for executive directors and senior Senior managers; managers Group and directors – the new employee bonus scheme introduced for 2009 in which Available employees only a common Group operating profit target was set for both the Fixed base salary √ √ management and staff bonus schemes saw payments of 81.3% of potential to each employee; Benefits including pensions √ √ – senior manager and executive directors received bonus payments Variable annual bonus √ √ of 81.3% of potential for significant outperformance of Group operating profit targets; and Share awards x √ – improved impact of incentive arrangements for 2010 by a slight rebalancing with enhanced potential awards of Deferred Shares How has the structure changed year on year offset by a reduction in awards of Performance Shares under the for executive directors? LTIP. No overall change in expected value. 2010 reward Remuneration policy Base salary Held at 2008 levels The Group aims to provide remuneration packages that comprise Annual cash bonus No change to maximum % of base of 75% to competitive fixed pay package and variable pay which provides the 110% for executive directors and 50% to 75% potential for significant rewards related to performance which are for Executive Committee aligned with the Group’s strategic objectives and shareholder interests. Share awards Broadly equivalent potential value to 2008 with increase in potential award of What are the principles of our remuneration policy? Deferred Shares and reduced awards of Performance linked Performance Shares A significant part of executive directors’ reward is determined by the Group’s success. Failure to achieve threshold levels of performance What did executive directors receive in 2009? results in no payout under short or long-term incentives. Benefits Shareholder aligned excluding Annual cash bonus Total cash Base pension and cash Aligned with the Group’s strategic objectives, a considerable part of the salary contribution Potential Actual equivalents reward is related to share price performance and is paid in shares that have £000 £000 £000 £000 £000 to be retained until minimum shareholding requirements have been met. Sly Bailey 750 12 825 671 1,433 Competitive Vijay Vaghela 430 11 430 350 791 The Group aims to provide remuneration packages that reward senior executives in relation to other relevant companies. The Paul Vickers 375 25 281 229 629 Company seeks to balance the ‘package’ for senior executives Granted in 2009 between rewarding short and long-term performance. Pension contributions Deferred Performance Who are our peer group companies? £000 shares shares In setting remuneration, the Remuneration Committee, with its Sly Bailey 248 – 270,270 advisers, currently reviews arrangements for the constituent members Vijay Vaghela 110 – 123,964 of the FTSE 350 Media Index and a Pan Sector Group of companies. The Pan Sector Group, which includes companies of a broadly similar Paul Vickers 119 – 108,108 size to the Group, is used to validate data obtained on the FTSE 350 Media Index. The FTSE Media Index comprised: How are the rewards structured? Aegis Group plc The relative weighting of each of the key elements of executive director British Sky Broadcasting plc remuneration for 2010 (excluding pension and benefits) is included in Daily Mail and General Trust plc the table below and discussed in greater detail in the remuneration report. Euromoney Institutional Investor plc plc At risk (maximum) ITE Group plc Base Cash Deferred Performance ITV plc salary bonus Shares Shares Johnston Press plc Moneysupermarket.com Group plc Sly Bailey 28% 31% 19% 22% Pearson plc Vijay Vaghela 31% 31% 19% 19% Reed Elsevier plc plc Paul Vickers 36% 27% 16% 21% Thomson plc United Business Media plc WPP Group plc Yell Group plc – – – – – – scheme based on Group performance, share-based incentives share-based performance, Group on based scheme package are basic annual salary and benefits, director’ executive of each an components main The annual bonus companies. relevant to other relation in motivate and retain senior attract, executives that packages remuneration to is provide aim The interests. who are rewarded competitively are the comprise competitive fixed pay and variable payThe which Company’s provides policy is to provide remuneration packages Remuneration policy which – issues: remuneration following the to met consider Committee the 2009, During activities Committee of d Board of the acommittee is Committee The in C as Hoffman Gary succeeded Lighting Jane Wade-Gery. Sir Ian Gibson, Gary Hoffman, Kathleen (Chairman), Lighting of Jane O’Donovan consists Committee Remuneration The and Laura Committee Remuneration The report Remuneration are appropriately reviewed and controlled. and reviewed appropriately are ensuring that potential risks arising from remunerationand move arrangementsthe Group further towards a performancewith culture, and supportive whilst of the main strategic objectivesobjective of to the ensure Group, that the remuneration policyThe Committeeis fully andconsistent the Board have continued to pursue their the to services other any provide not do Associates Company. Hewitt Committee but who also provide remuneration by the appointed were who Associates), advice of Hewitt name (a trading to the Street Bridge New Hewitt are advisers external Director. principal Its Legal Group and Secretary the and Executive Chief the including internally, parties relevant with consultation informal and meetings The Committee fulfils its duties with a combination of both 2009. in formal freeze pay aGroup-wide to impose decision the Board’s discussion of remuneration issues for all staff including in participate not does Chairman (the Chairman of the remuneration remuneration for senior management. The Committeedirectors. sets the The Committee also monitors executive the for conditions theemployment and benefits levelremuneration, and structure of appropriate the to determine authority has Committee The website www.trinitymirror.com/our-company/corporate-governance.A Board. by the approved of reference terms formal with established

approval of remuneration report. of remuneration approval awards; and to outstanding attaching conditions of performance of status review AwardPlan; Share Deferred and approval of awards to be made under the Long Term directors; Incentive executive for arrangements pension Plan arrangements; pay director of executive review of long review senior executives and all other staff other all and executives senior for policy remuneration executive practice of best review directors, copy of the terms of reference are available on the Company’s July 2009. July The Committee leads the the leads Committee The remuneration). of his discussion any

potential for significant rewards related to performance which Group. During 2009, the Committee met on three occasions. three on met Committee the 2009, During Group. aligned with the Group’s strategic objectives and shareholder and short-term incentive arrangements; incentive short-term and ; irectors and has been has and irectors s remuneration s remuneration hairman

package is weighted towards ‘at risk’ performance pay. performance ‘at towards risk’ weighted is package remuneration executive of the balance the that ensures incentives share-based long-term and bonus cash annual from remuneration directors with the interests of shareholders.of The combined potential element of remuneration has a specific role in linked achieving the aims £750,000, Vijay Vaghela £430,000 and Paul Vickers £375,000. Vickers Paul and £430,000 £750,000, Vaghela Vijay directors will therefore remain at their 2008 2010. in levels, executive of the 2010, increases In salaries salary base of:receive Sly Bailey not did they that requested directors executive the addition, In 2009. for salaries base to not increase taken was decision the environment, In light of the economic climate and the challenging trading work. comparative such to avoid the ‘ratchet’ effect that keen of and conscious is can Committee be Group). The Sector Pan (the size created by an over reliance on similar of abroadly organisations other and stocks media 350 FTSE of group comparator our in executives senior and directors executive to comparison in of total remuneration competitiveness of the review in-depth annual an to conduct advisers) principal Committee’s (the Committee, we continue to engage Hewitt Executive the and directors to executive paid New to salaries the Bridge relation In Street data. market comparative from relative to comparable roles in selected relevantBasic companiessalaries aredrawn reviewed annually by the Committee and salary annual areBasic set bonus payment of 8 payment bonus of 10.8% of £105.4 approximately excess 2009 was for in profit million at being set significantly in excess of consensus budgetedmarket expectationsoperating profit with the highly stretchingGroup, thebudget executive figure directors’ bonus criteriaIn 2009, were tolinked reflect wholly the to immediate and short-term issues facing salary. of pensionable the part form maximum potential of either 50% or 75%. TheseMembers payments of the doExecutive not Committee participate 75% and Bailey, Vaghela 100% Vickers. Sly for Paul for Vijay for insalary the scheme with of 110% to up amaximum bonuses of base cash annual for provides This directors. executive including executives of senior anumber for scheme bonus related performance annual an operates Group The Annual bonus a believes that the level of bonus reflects thebusiness incredibly processes fast and results significant in of new cost delivery savings. immediate for need the recognised Board TheThe Committee performance relative to both budget the by excellent andjustified is payment marketbonus of level this that satisfied is expectations. being to For 2010 the executive directors’ bonus targets are again linked approximately twice that between threshold and target performance. performance. target and threshold between that twice approximately stretch required between target and maximum bonuswith will 100% be only payable after a significant stretch.for threshold The degreeperformance, of 50% of potential willof reportedbe payable operating at target profit for 2009.outperformance 2010 in 30% significant payment no be without will ofThere potential will be payable

tough trading environment.

the remuneration policy and aligning the interests of executive of executive interests the aligning and policy remuneration the the original consensus market expectations and resulted in a the time that it was approved by the Board. The outturn operating budgeted operating profit. The targets themselves are not not are themselves targets The profit. operating budgeted

disclosed at this stage for reasons of commercial sensitivity. sensitivity. of commercial reasons for stage this at disclosed to the delivery of shareholder value, and pensions. Each Each pensions. and value, of shareholder to delivery the 1.3 % of the maximum potential. The Committee Annual Report & Accounts 2009 &Accounts Report Annual Trinity Mirror plc

47

Financials Governance Business review Who we are Trinity Mirror plc 48 Annual Report & Accounts 2009

Remuneration report

The Committee considers that the performance conditions applying To determine whether the performance condition has been met, the to the annual bonus scheme are relevant and adequately stretching TSR of each of the companies will be measured. The companies will and that this results driven approach is in the interests of shareholders then be ranked, in descending order, according to their TSR, and the and promotes the long-term success of the Company. Payment of performance shares will vest depending on the Company’s TSR any bonus earned from profit performance is also dependent upon ranking as follows: the executive director having achieved a satisfactory level of Percentage of personal performance during the year in their performance and TSR ranking of company shares vesting (%) development review. 9th to 17th (below median) 0 Deferred Share Award Plan (DSAP) 8th (median) 35 An eligible employee may be granted an award of Deferred Shares 7th 50 based on a percentage of their previous year’s gross bonus. These 6th 65 shares are held in trust. 5th 80 Given the short-term challenges facing the Company, the Committee has decided that a slight increase in the emphasis on financial 4th 90 performance in 2010 is appropriate. Accordingly, for executive 1st to 3rd 100 directors, in 2010 the maximum value of Deferred Shares that they can earn will be 60% of their cash bonus (2009: maximum of 40% of cash bonus). This potential increase in Deferred Shares will, however, The Committee considers TSR to be an appropriate performance be directly offset by a lower level of grant to the executive directors measure as it aligns the interests of senior executives with those of under the LTIP in 2010 with no overall change in expected value for shareholders and complements the financial measures used in the the directors. annual bonus schemes. TSR is independently calculated for the Committee by Hewitt New Bridge Street. Irrespective of TSR If the employee remains employed by the Group, their award of performance, before any vesting can occur the Committee must Deferred Shares will normally become exercisable on the third be satisfied that the underlying performance of the Company has anniversary following its date of grant. The DSAP is for key executives been satisfactory throughout the relevant performance period. with the Company and is designed to align their interests with those of shareholders by awarding them a stake in the future success of Directors’ shareholding the Company. At the point of vesting, all Deferred Share awards are capable of exercise at ‘nil cost’ to the participant. A shareholding expectation was placed on the senior executives in conjunction with the LTIP. Within five years of the Annual General Meeting in 2004 or of the date of first appointment, senior executives Long Term Incentive Plan (LTIP) are expected to build a holding in the Company’s shares equal to The LTIP was originally approved by shareholders at the Annual the following value of their salaries: General Meeting in 2004. Shareholder approval was given at the Annual General Meeting in 2006 to modify and simplify the LTIP. – Chief Executive: 150% of her salary; In any financial year an employee may be granted an award over – other executive directors: 100% of their salaries; and Performance Shares, the final vesting of which is subject to continued – members of the Executive Committee: 30% or 50% of their employment within the Group and satisfaction of a performance base salary depending on the level of their bonus potential. condition, as set out in the table below. If these targets are not met, a restriction will be placed on the The normal maximum award of Performance Shares would be an disposal of shares that vest to them under the LTIP. award over shares not exceeding 100% of that person’s base annual salary. However, in order to facilitate the recruitment of a particular The Board now expects that non-executive directors will acquire eligible employee that higher figure may be increased to 200% of shares equal in value to one times their annual fee during a period base annual salary. With the exception of 2009, when the Committee of three years from the date of their appointment. limited awards following the fall in the Company’s share price, the standard award policy in recent years has been shares worth 100% Savings-related share option scheme of base salary for the Chief Executive and 80% of base salary for the All eligible employees, including executive directors, may participate other executive directors. Given the increase in potential Deferred in a savings-related share option scheme which is an approved all Share awards for 2010 outlined above, the standard award policy will employee share option plan in which performance conditions are not be reduced for 2010 with the Chief Executive receiving a Performance allowed to be attached to the exercise of options. Under the scheme, Share award worth 80% of base salary and the other executive participants are granted options over the Company’s shares and may directors receiving awards worth 60% of base salary. save up to £250 per month to purchase these shares at a discount of For the awards made in 2009, the vesting of the Performance Shares up to 20%. The last options were issued in 2006. will be determined by the Company’s three year Total Shareholder Return (TSR) performance compared to a group of other media Executive directors’ pension arrangements companies listed below: Sly Bailey receives an annual cash sum to use for pension purposes Aegis Group plc Pearson plc that is equivalent to 33% of base salary. British Sky Broadcasting plc Reed Elsevier plc Vijay Vaghela participates in the contributory MGN Pension Scheme, Daily Mail and General Trust plc Rightmove plc which accrues pension at the rate of 1/60th per year of service on Euromoney Institutional Investor plc Thomson Reuters plc salary up to the earnings cap referred to below. Informa plc United Business Media plc ITE Group plc WPP Group plc Paul Vickers participates in the contributory Trinity Retirement Benefit ITV plc Yell Group plc Scheme as well as the non-contributory Trinity Mirror plc Retirement Johnston Press plc Plan, which together provide final salary based pensions on retirement Moneysupermarket.com Group plc at age 60 of up to two thirds of his pensionable earnings subject to the earnings cap referred to below. directorships for which they receive any fees. any receive they which for directorships Neither Vijay Vaghela or Paul Vickers of £43,000. fee annual an currently receives she which for 18 2009 November hold any external on plc of Ladbrokes director non-executive appointed was Bailey Sly there is no conflict of interest and to retainpermission, any fees.allowed to accept one such appointmentthe Company.as long as Executive directors of to benefit the are experience and therefore, knowledge directors’ the broaden with the Board’s The Committee believes that these non-executiveto duties can The Company acknowledges that its executive directors are appointments external Policy on likely Vaghela’s Vijay 18 2003. dated and is 2002 April 9 December Bailey’s dated is Sly 2000, 28 dated April is Vickers’sPaul contract period. that for entitlement bonus pro-rata year the prescribed sum will include financial of any months an six after amount contract her terminates equivalentCompany to her if the that specifies Bailey’s contract Sly loss. pension and salary to receive predetermined compensation equal to of12 the months Company base (other than request the at for service gross leaves director executive any If notice. misconduct)written they will be entitled Company which can be terminated by the with contract either aservice has party directors executive of the Each giving one year’s ofservice Contracts every £123,600, increased cap, currently normally The is schemes. maintained by amending the rules of their respectivebeen has Vickers Paul and Vijay of Vaghela pension benefits pension the to applying cap ‘A’ earnings the Following 2006 6April on day cap. of the excess they receive an annual cash sum equivalent to As30% Vijay of salaryVaghela in and Paul Vickers are subject to the earnings service. in cap, occurs death if payable are sums lump and death on payable are spouse’s pensions In addition to their pensions, Vijay Vaghela’s and scheme. Paulpension contribution Vickers’s defined Company’s of the members schemes. Both Mr Vaghela respective of their members and deferred become will Mr Vickers Mr and Vickers will become contributing 2010. 31 on March Vaghela Mr accrual point At that to future schemes The Company proposes to close all its defined benefit pension From the annual salary that is below the cap as amended from time to time. time from amended as cap the below is that salary annual has agreed to pay Mr Vickers Company a the casharrangement, of that part supplementAs salary. pensionable final of 35% of his salary pensionable thirds of two apension Vickers Mr to provide obligation During the year, the Committee received legal advice that the negative. was 2009 September based accrued benefits under the Trinity his to limited be will benefits Retirement pensions his proceed, accrual future Benefit Scheme to closure that, should agreed has Vickers Mr plc. Group Mirror and of Trinity plc merger the after renegotiated was contract employment Company entered into for full consideration by Mr Vickers when his

be invited to become non-executive directors of other companies. Retail Prices Index (RPI) for September in the previous year.

6

6

at age 60 was a direct contractual commitment on the the on commitment contractual adirect was 60 age at of closure, and to dateof closure, his service capped pensionable on

April 2010 the cap will remain at £123,600 at 2010 remain for RPI the will as April cap the April at the discretion of the Company by reference to to by reference Company of the discretion the at April

Compa Compa FTSE As the main comparator group for the Company shares is the by TSR. measured is by legislation, required Company’s performance should be measured. Performance,appropriate as form of ‘broad equity market index’compared against to whichthe FTSEthe 250 Index, which is consideredThe following the most graph illustrates the Company’s performance Performance graphs that points pl at in in the th Tr Grap 50 10 15 20 25 30 Tr Grap 0 50 10 15 20 25 30 0 init init e FT 0 0 0 0 0 0 0 0 0 0

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Financials Governance Business review Who we are Trinity Mirror plc 50 Annual Report & Accounts 2009

Remuneration report

Audited information Remuneration for the period The aggregate remuneration of the directors of the Company was as follows:

Total Total Annual Deferred excluding excluding Pension Pension Base cash Taxable Share pensions pensions contributions contributions salary bonus benefits1 Award3 Fees 2009 2008 2009 2008 £000 £000 £000 £000 £000 £000 £000 £000 £000 Executive directors Sly Bailey2 736 671 12 15 1,434 757 248 246 Vijay Vaghela 430 350 11 8 – 799 438 110 107 Paul Vickers 375 229 25 6 – 635 398 119 117 Non-executive directors Sir Ian Gibson – – – – 220 220 220 – – Gary Hoffman4 – – – – 67 67 70 – – Jane Lighting4 – – – – 44 44 40 – – Kathleen O’Donovan – – – – 55 55 55 – – Laura Wade-Gery – – – – 40 40 40 – – Total 1,541 1,250 48 29 426 3,294 477 – Total 2008 1,545 – 48 – 426 2,018 470

1 Incorporates the value of all tax assessable benefits arising from employment with the Company related to the provision of car and fuel allowance and healthcare cover. 2 Excludes the value of sacrificed salary under the Group’s holiday purchase scheme amounting to £14,423. 3 The Deferred Share awards granted in 2006 represent and relate to 2005 performance. Shares may be released under the DSAP within a period of six months from the third anniversary of the grant. The share price at the point of exercise was £0.5125, therefore the values above relate to the share price at the point of exercise. 4 Gary Hoffman is the former Chairman of the Remuneration Committee. Jane Lighting was appointed Chairman on 28 July 2009. * Deferred Shares exercisable at nil cost in 2013 will be granted in April 2010 to each executive director equal in value to 40% of 2009 cash bonus paid. Directors’ pension entitlements The following executive directors were members of defined benefit schemes provided by the Company during the year. Pension entitlements and corresponding transfer values increased as follows during the year:

Transfer value of real increase in Accrued Transfer Real accrued Increase in( Accrued Transfer pension at value at increase in Increase pension (less transfer value pension at value at 3 January 3 January accrued in accrued director’s (less director’s( Director’s 28 December 28 December 20101 20102 pension pension contribution)3 contributions)4 contributions5 20081 20082 £000 £000 £000 £000 £000 £0004 £000 £000 £000

Vijay Vaghela 32 357 4 4 33 133 7(5) 28 217 Paul Vickers 42 718 4 5 70 (2) 7(5) 37 713 Total 74 1,075 8 9 103 131 14 () 65 930

1 Pension accruals shown are the amounts which would be paid annually on retirement based on service to the end of the year. 2 Transfer values have been calculated based on the bases adopted by the trustees following the introduction of new legislation of The Occupational Pension Schemes (Transfer Values) (Amendment) Regulations 2008 (SI 2008/1050) and The Occupational Pension Schemes (Transfer Values) (Amendment) Regulations 2008 (SI 2008/2450). In agreeing to the new bases trustees also had to consider the guidance issued by the Pensions Regulator ‘Transfer Values – Guidance to the trustees of private sector occupational pension schemes providing defined benefits – September 2008’ which came into effect from October 2008. 3 The transfer value of the real increase in accrued pension over the year represents the incremental value to the director of their service during the year. It is based on the accrued pension increase less the director’s contribution. 4 The increase in the transfer value from 29 December 2008 to 3 January 2010 includes the effect of fluctuations in the transfer value due to factors beyond the control of the Company and directors such as stock market movements and is net of the director’s contribution. 5 Directors did not pay any voluntary contributions during the year.

The above disclosure of directors’ pensions is in line with the latest Companies Act 2006 requirements. The figures for each director give the accrued pension to which each director would have been entitled had they left service at the end of 2009 (and the equivalent figure for the preceding year and the increase in accrued pension over the year). Also disclosed is the transfer value of the accrued pension at the end of 2009 (and the preceding year) and the increase in the transfer value during the year (net of directors’ contributions). The transfer values represent a liability of the pension scheme where funded and of the Company where unfunded. They are not sums due to be paid to the directors. Paul Vickers Paul Vaghela Vijay 1 Bailey Sly Name Street. Bridge New Hewitt by independently performed is of TSR calculation The dategrant. of the from of four,years six and five aperiod over retested be can they then years three after satisfied fully not are criteria performance the If performance. percentile 80th at vesting to full scale sliding a with performance median at exercisable become salary of 75% to value the annual options of base executives senior other and directors executive For median. least at is ranking Company’s the unless measure either on place take will vesting No companies. media 20 other against the FTSE Mid-250 index of companies averageon the dateof 2% of pergrant. annum Theover other a period 50% ofis threesubjectare exercisable years.to a 50%comparison unlessof options No each the conditions. of grantTSRGroup’s of performance to satisfaction with the of subject dateof grant the 10an from a and three years earningsgroupoption between exercisable are of Options perto about shareeach individualgrowth exceeds is subject inflation, to a TSRmeasured comparison by reference made. be will grants to further no and 2004 the since Retailschemes Prices Index, these plus under made been have an grants No schemes. Group’s option the share under shares to purchase options held directors following The schemes option Share 2010 3January to 2008 December 29 activity Directors’ shares in Interest schemes. share or scheme bonus annual in the participate cannot They office. registered Company’s the at inspection for available are and appointment of their terms the out set which of appointment letters have directors non-executive and Chairman The Committee of Remuneration Chairman Committee &Risk of Audit Chairman Senior Independent Director Chairman 2009 below: out set as 2005, 1 July to Company, effective the services these providing for remuneration additional receive Chairmen Committee and Director Independent Senior director. Chairman, The non-executive each offor £40,000 fees of annual consists remuneration current The remuneration. own her or his about discussion any in apart plays director No Board. by the determined is directors of non-executive remuneration The Non-executive directors  necessarily beenmet. Exercisable betweendatesare thefirstpossibleexercisable datefortheseoptions–thisdoesnotmeanthattheare exercisable asperformanceconditionshavenot Option price 488.6p 488.6p 395.5p 544.0p 544.0p 452.5p 452.5p 470.5p 470.5p 28 December Balance at Balance 113,970 505,689 135,069 102,333 102,333 133,319 133,319 140,441 140,441 10,951 16,737 14,751 2008

102,333 133,319 140,441 321,341 14,751 Lapsed in year – – – –

Balance at Balance 3 January 184,348 135,069 Annual Report & Accounts 2009 &Accounts Report Annual Trinity Mirror plc 113,970 10,951 16,737 20 10 – – – –

May 2003 to 2010 May 2003 May May 2003 to 2010 May 2003 May Aug 2006 to 2013 Aug 2006 Aug Aug 2006 to 2013 Aug 2006 Aug Feb 2006 to 2013 Feb 2006 Feb Apr 2005 to Apr 2012 to Apr 2005 Apr Apr 2005 to Apr 2012 to Apr 2005 Apr Apr 2004 to Apr 2011 to Apr 2004 Apr

Apr 2004 to Apr 2011 to Apr 2004 Apr Exercisable between 51

180,000 20,000 15,000 10,000

£ 1

Financials Governance Business review Who we are Trinity Mirror plc 52 Annual Report & Accounts 2009

Remuneration report

Long-Term Incentive Plan (LTIP) Sharesave Sly Bailey, Vijay Vaghela and Paul Vickers held 140,268, 64,123 and The sharesave options issued in 2006 at an exercise price of 453.3p 56,909 options respectively to purchase shares under the LTIP exercisable between June to December 2009 matured during the relating to the award made in 2006 which lapsed during the year. year. Sly Bailey, Vijay Vaghela and Paul Vickers each had 2,062 shares A total of 261,300 LTIP awards lapsed accordingly. capable of exercise under their respective savings contracts. However, the contract price at which the directors could purchase shares was The following directors held ‘nil cost’ options to purchase shares greater than the then market price and as a result the directors closed under the LTIP relating to awards made in 2007, 2008 and 2009: their respective savings accounts without exercising their options. Performance Number of Share price at Nominal Share award shares date of grant vesting date The interests of the directors, all of which are beneficial, in the ordinary shares of the Company are shown below: 2007 Award Sly Bailey 134,181 539.0p 5 April 2010 3 January 28 December 2010 2008 Vijay Vaghela 61,340 539.0p 5 April 2010 Executive directors Paul Vickers 54,439 539.0p 5 April 2010 Sly Bailey 107,374 90,231 2008 Award Vijay Vaghela 41,792 32,580 Sly Bailey 270,270 277.5 p 14 March 2011 Paul Vickers 48,684 41,559 Vijay Vaghela 123,964 277.5 p 14 March 2011 Non-executive directors Paul Vickers 108,108 277.5 p 14 March 2011 Sir Ian Gibson 36,550 36,550 2009 Award Gary Hoffman 12,000 12,000 Sly Bailey 270,270 28.5p 3 April 2012 Jane Lighting – – Vijay Vaghela 123,964 28.5p 3 April 2012 Kathleen O’Donovan – – Paul Vickers 108,108 28.5p 3 April 2012 Laura Wade-Gery – –

The 2009 award was granted on 3 April 2009. For an explanation As beneficiaries under the T I H Employee Benefit Trust, the directors concerning the LTIP and performance criteria, further information are deemed to be interested in 90,855 ordinary shares held by the can be found on page 48. employee benefit trust at 3 January 2010. Deferred Share Award Plan (DSAP) There were no movements between the year end and the date of this report. Sly Bailey, Vijay Vaghela and Paul Vickers held 28,898, 15,568 and 12,060 options respectively to purchase shares under the DSAP The lowest price of the shares during the year was 19.8 pence as relating to the award made in 2006 which were exercised at ‘nil cost’ at 2 March 2009 and the highest price was 192.0 pence as at on 29 June 2009 at a share price of £0.5125 at a total value of 16 October 2009. The share price as at 3 January 2010 was £14,810, £7,978 and £6,180 respectively. The following directors held 150.6 pence. options to purchase shares under the Group’s DSAP relating to For and on behalf of the Board awards made in 2007 and 2008:

Deferred Number of Share price at Nominal Jane Lighting Share award shares date of grant vesting date Chairman Remuneration Committee 2007 Award 4 March 2010 Sly Bailey 56,174 539.0p 5 April 2010 Vijay Vaghela 29,777 539.0p 5 April 2010 Paul Vickers 18,581 539.0p 5 April 2010 2008 Award Sly Bailey 114,321 277.5 p 14 March 2011 Vijay Vaghela 59,387 277.5 p 14 March 2011 Paul Vickers 37,5 5 3 277.5 p 14 March 2011

It is planned that the vesting date of the 2007 awards be accelerated by three weeks to enable the necessary procedural steps to have been completed prior to Easter and the increase in personal income tax rates to 50% on 6 April 2010. The Committee is comfortable that this is an appropriate step as the original vesting date was prior to 6 April 2010 and that the acceleration is purely for administrative ease. There were no awards granted under the DSAP in 2009 to Sly Bailey, Vijay Vaghela and Paul Vickers. All Deferred Share awards are made at ‘nil cost’ to the participant. For an explanation concerning the DSAP, further information can be found on page 48. in and dissemination of financial statements may website.differ from Legislationlegislation in the governing the the preparation The directors are responsible for the maintenance and integrity of for the Companies Act 2006. They are also responsible for that safeguarding the transactions and disclose with reasonable accuracyrecords at anythat time are sufficient to show and explainThe thedirectors Company’s are responsible for keeping adequate accounting – – – – to: required are In preparing the parent company financial statements, the directors – – – – directors: that 1requires Standard Accounting In preparing the consolidated financial statements, International G G of the affairs they are satisfied that they give unless a accounts the true approve not must directors the law andcompany fair view of the state of (United Kingdom Generally Accepted Standards Accounting Accounting Kingdom United and law Practice). applicable with Under accordance in statements financial company parent the to prepare European Union and Article 4 of by the adopted the as (IFRS) Standards IAS Reporting Regulation Financial International and have elected with accordance in statements financial consolidated the prepare to required are directors law the that year.Under financial each for Company law requires the directors to prepare financial regulations. statements and law applicable with accordance in Accounts The directors are responsible for preparing the Annual responsibilities Report directors’ of Statement and Directors’ report

roup continue unless prepare the financial statements on the going concern basis and statements; financial the in explained and have been followed, subject to Standards any Accounting material Kingdom United applicable whether state departures disclosed prudent; and reasonable are that estimates and judgements make consistently; them apply then and policies accounting suitable select a C of the assessment an make and performance; and conditions on the entity’s financial positionto and financial specific requirements in IFRS are insufficient toprovide enable additionalusers disclosures when compliance with the information; that amanner in policies, accounting including information, present policies; accounting apply and select properly other jurisdictions. other

the prevention and detection of fraud and other irregularities. other and of fraud detection and prevention the corporate and financial information included on the Company’s steps reasonable taking for hence and Company of the assets financial position of the Company and enable them to ensure going concern. going

the parent company financial statements comply with the understand the impact of particular transactions, other events provides relevant, reliable, comparable and understandable

or C or

it is inappropriate to presume that the C the that to presume inappropriate is it

in business. ompany for that period. that for ompany roup or C or roup ompany and of the profit or loss of the ompany’s ability to continue as ompany will

note should Shareholders statements. forward-looking the on reliance undue to not place cautioned are shareholders Company’s The the The forward-looking statements should be read inwhich particular could causein actual results or trends to reasonable,differ materially. but they may be affected by a widethe range expectations of variables set out in these that believed is It forward-lookingahead. year financial the during information the statements are revise or to update obligation any undertake not does Company the information available to directors and knowledge of the at basis the on the prepared been have datereport of its preparation and control. The information contained Company’s the in outside these cases some in are which factors sections other and of the annual circumstances events, to as future assumptions and expectations on based are they and to change subject inherently are strategies the directors’ expectations, beliefs, hopes, plans, intentions and a and Company of the business of the review afair with shareholders These sections have been prepared to provide the Company’s a involve statements forward-looking nature, their By statements. forward-looking contain report annual of the sections These purpose. other any for not be relied upon by anyone, including the Company’s shareholders, or they the the forward-looking statements. No assurance canoutcomes be given to that differ materially from those expressed in or implied by independently verified. – – – report: into this by reference incorporated is and that fulfils this requirement can be found in theirthe sectionsduty to setpromote out below the success performed have of directors the how the assess them help Company. and Company The information present a Business review in this report to directors the that 417 requires inform 2006 Act Section Companies of the shareholders of the Business review in the Chairman and Chief Executive s Executive Chief and Chairman the in contained is period the during activities and business of our A review statements. financial 5to consolidated the 4and notes in included United Kingdom. The analysis of the in turnover primarily of websites, portfolio and agrowing and operatingof newspapers profit are printing and publication the is Group of the activity principal The development future and activities Principal both readers and advertisers. and readers both customers, of our needs the meet which services and products with digital, and print across positions strong sustaining and by developing business, media multi-platform agrowing to is build goal strategic Our r Business the and

description of the principal risks and uncertainties facing it. It may number of risks, uncertainties and future assumptions because 44 and 45 and 44 pages on management risk and controls internal concerning statements the 20 pages on business r Business the the Chairman and Chief Executive s Executive Chief and Chairman the

may not occur in the future and could cause actual results and context of the specific risk factors identified. factors risk specific of the context forward-looking statements will be realised. Statements about

relate to events and/or depend on circumstances that may may that circumstances on depend and/or torelate events have sections these that eview including key performance indicators for each eview on pages 20 pages on eview . to 30 not been audited or otherwise ; and Annual Report & Accounts 2009 &Accounts Report Annual Trinity Mirror plc to 30 tatement on pages 16 pages to on tatement tatement on pages 16 pages on tatement .

53 to 19

19

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Financials Governance Business review Who we are Trinity Mirror plc 54 Annual Report & Accounts 2009

Directors’ report

Results and dividends Payment of suppliers The profit for the period attributable to equity holders of the parent We have a supplier payment policy which provides for payment of all was £29.3 million (2008: £59.1 million loss). The directors do not suppliers (other than those with agreed alternative terms) at the month propose a final dividend for the year and no interim dividend was end following the month of receipt of invoice. All companies within the declared. In 2008, the directors declared and paid an interim Group are encouraged to make payments in accordance with those dividend of 3.2 pence per share and no final dividend was paid. terms and conditions provided that the supplier has also complied After dividends, retained profit for the period was £29.3 million with them. At 3 January 2010, the Group had an average of 33 days (2008: £67.1 million loss). (2008: 40 days) purchases outstanding in trade creditors.

Charitable and political donations Share capital During the year contributions for charitable purposes totalled Details of the movements in the Company’s called-up share capital £84,000 (2008: £84,000), principally to various charities connected including purchases of its own shares are included in note 31 to the or associated with the newspaper, printing or advertising industries consolidated financial statements. and local charities serving the communities in which we operate. No direct political contributions were paid during the period Substantial shareholdings (2008: £nil). The editorial stance of our national titles, and in particular that of the Daily Mirror and the Daily Record, is politically left of centre In accordance with Rule 5 of the Disclosure and Transparency Rules, and often supportive of the Labour Party. Although we do not make as at 3 March 2010, the Company had been notified of the following direct political donations, it has been in the best interests of the beneficial interests in its ordinary shares: Daily Mirror and Daily Record to sponsor, on commercial terms, certain events in aid of the Labour Party. This is a practice that Number of shares Percentage has been followed for many years. plc 48,492,342 19.10% At the Company’s Annual General Meeting held in 2009, the Company and its subsidiaries received authority from shareholders Standard Life Investments 30,964,858 12.02% under the Companies Act 2006 to make donations to political plc 21,914,377 8.50% parties of up to £75,000 in aggregate per annum. In 2009 there were no such payments (2008: £nil). Old Mutual Asset Managers 12,266,209 4.76% Legal & General Group plc 10,291,384 3.99% Employment policies and employees Barclays plc 10,023,158 3.78% The Group employs over 6,500 people in more than 68 locations across the UK, including eight print sites. The Company is committed Lloyds TSB Group plc 8,931,102 3.46% to increasing the service quality, profitability and efficiency of the All percentages are based on date of notification as opposed to current issued share Company by attracting and recruiting the people who are best suited capital figure. to meet the standards for the role and the Company without regard to race, creed, colour, nationality (subject to legal eligibility), ethnic Corporate governance statement origin, religion, gender, age, sex change, sexual orientation, marital The corporate governance statement, in accordance with Rule 7.2 status, connections with a national minority, membership or non of the Disclosure and Transparency Rules and Rule 9.8.6(5) and (6) membership of a trade union or, unless justifiable, disability. of the Listing Rules, on page 42 forms part of this directors’ report. We pursue a policy of equal opportunities for all employees and potential employees. We have continued our policy of giving fair Directors consideration to applications for employment made by disabled The directors of the Company who served during the period, unless persons bearing in mind the requirements for skills and aptitude stated otherwise, are listed below: for the job. In the areas of planned employee training and career development, we strive to ensure that disabled employees receive Executive maximum possible benefits including opportunities for promotion. Sly Bailey Every effort is made to ensure that continuing employment and Vijay Vaghela opportunities are also provided for employees who become disabled. Paul Vickers Within the limitations of commercial confidentiality and security, it is the policy of the Company to take views of employees into account Non-executive in making decisions and wherever possible, to encourage the Sir Ian Gibson c b e involvement of employees in the Group’s performance. Gary Hoffman Group companies evolve their own consultative policies. Methods Jane Lighting of communication used include staff forums, advisory committee Kathleen O’Donovan meetings, newsletters, bulletins, pension trustee reports, Laura Wade-Gery management briefings and staff surveys. Their remuneration is summarised on page 46 and details of the Since January 2009, Paul Vickers, Secretary and Group Legal directors’ beneficial and non-beneficial interests in shares can be Director, has been identified as the executive director with Human found on pages 51 and 52 in the remuneration report. Resource responsibility. In accordance with the Articles of Association, Sir Ian Gibson and Vijay Vaghela will retire and offer themselves for re-election at the Annual General Meeting to be held on 13 May 2010. shareholders at the next Annual General Meeting. General Annual next the at shareholders as Deloitte LLP have expressed their willingness to continue in office of s provisions the with accordance in interpreted be should and given is confirmation This – – that: confirms accounts and Report Annual Each of the persons who is a director at the date of Auditors approval of this Scheme. Option Share Savings-Related the with connection in granted option of an exercise an satisfy The Company allotted 165 ordinary shares of 10 pence each to charge. or a lien and no shares were acquired by forfeiture shares own of its purchases no or made year, the Company the surrenderDuring or subject to days. business five preceding the for price mid-market average of the 105% exceeding not and 10each) pence (being share of each value 10% of the issued share capital) at prices of 25,769,036 approximately (being to up amaximum shares notshares less than the nominal an At the Annual General Meeting in 2009, shareholders approved 2009 in Meeting General Use of authorities granted at the Annual Accounts. and Report Annual the accompanies which of Meeting Notice the in out set are details 2010. in Meeting Further General Annual the at proposed be will 2006 Act Companies the within provisions final the accommodate resolution proposing the adoption Aspecial of shareholders. of the meeting new ageneral at articles resolution special of association to by a amended be only may of association articles Company’s The association of Articles

auditors are aware of that information. of that aware are auditors any taken as a director in order to make himselfthe or director herself aware has taken of all the steps that he or she ought to and unaware; are have auditors Company’s the of which so far as the director is aware, there is no relevant audit information

auditors of the Company and their reappointment will be put to authority for the Company to make market purchases of its own

relevant audit information and to establish that the Company’s ection 418 2006. Act ection Companies of the 4 March 20104 March Director Legal Group and Secretary Vickers Paul Board of the order By – – knowledge: of their best to the confirm directors The statement Directors’ responsibility

they face. they together with a description of the principal therisks undertakings and uncertainties included in the and consolidation Company of the position the and business of the takenperformance as a whole, Business the review and the undertakings included in the and consolidationCompany the of loss or profit and position financial takenliabilities, as a whole; assets, of the view fair and atrue give framework, reporting financial the financial statements, prepared in accordance with the relevant , includes a fair review of the development and and development of the review afair , includes Annual Report & Accounts 2009 &Accounts Report Annual Trinity Mirror plc

55

Financials Governance Business review Who we are Trinity Mirror plc 56 Annual Report & Accounts 2009 Group consolidated accounts

Independent auditors’ report to the Opinion on financial statements members of Trinity Mirror plc In our opinion the consolidated financial statements: We have audited the consolidated financial statements of Trinity – give a true and fair view of the state of the Group’s affairs as at Mirror plc for the 53 weeks ended 3 January 2010 which comprise 3 January 2010 and of its profit for the 53 weeks then ended; the consolidated income statement, the consolidated statement of recognised income and expense, the consolidated balance sheet, – have been properly prepared in accordance with IFRS as adopted the consolidated cash flow statement and the related notes 1 to 40. by the European Union; and The financial reporting framework that has been applied in their – have been prepared in accordance with the requirements of the preparation is applicable law and International Financial Reporting Companies Act 2006 and Article 4 of the IAS Regulation. Standards (IFRS) as adopted by the European Union. This report is made solely to the Company’s members, as a body, Opinion on other matters prescribed by the in accordance with Chapter 3 of Part 16 of the Companies Act 2006. Companies Act 2006 Our audit work has been undertaken so that we might state to the Company’s members those matters we are required to state to In our opinion the information given in the directors’ report for the them in an auditors’ report and for no other purpose. To the fullest 53 weeks ended 3 January 2010 for which the financial statements extent permitted by law, we do not accept or assume responsibility are prepared is consistent with the Group financial statements. to anyone other than the Company and the Company’s members as a body, for our audit work, for this report, or for the opinions Matters on which we are required to report we have formed. by exception We have nothing to report in respect of the following: Respective responsibilities of directors Under the Companies Act 2006 we are required to report and auditors to you if, in our opinion: As explained more fully in the statement of directors’ responsibility on page 53, the directors are responsible for the preparation of – certain disclosures of directors’ remuneration specified the consolidated financial statements and for being satisfied that by law are not made; or they give a true and fair view. Our responsibility is to audit the – we have not received all the information and explanations consolidated financial statements in accordance with applicable we require for our audit. law and International Standards on Auditing (UK and Ireland). Those standards require us to comply with the Auditing Practices Under the Listing Rules we are required to review: Board’s Ethical Standards for Auditors. – the directors’ statement contained within the corporate governance report in relation to going concern; and Scope of the audit of the financial statements – the part of the corporate governance report relating to An audit involves obtaining evidence about the amounts and the Company’s compliance with the nine provisions of disclosures in the financial statements sufficient to give reasonable the June 2008 Combined Code specified for our review. assurance that the financial statements are free from material misstatement, whether caused by fraud or error. This includes an Other matter assessment of: whether the accounting policies are appropriate to the Group’s circumstances and have been consistently applied and We have reported separately on the parent company financial adequately disclosed; the reasonableness of significant accounting statements of Trinity Mirror plc for the 53 weeks ended 3 January estimates made by the directors; and the overall presentation of the 2010 and on the information in the directors’ remuneration report financial statements. that is described as having been audited. Panos Kakoullis (Senior Statutory Auditor) for and on behalf of Deloitte LLP Chartered Accountants and Statutory Auditors London, UK 4 March 2010

Neither an audit nor a review provides assurance on the maintenance and integrity of the website, including controls used to achieve this, and in particular whether any changes may have occurred to the financial information since first published. These matters are the responsibility of the directors but no control procedures can provide absolute assurance in this area. Legislation in the United Kingdom governing the preparation and dissemination of financial information differs from legislation in other jurisdictions. Investment revenues Investment – – expenses: Administrative Actuarial losses on defined benefit pension schemes taken to equity taken to schemes pension benefit defined on losses Actuarial 2008) 28 December 2010 ended (52 weeks 3January ended weeks 53 the for recognised income and expense Consolidated statement of * Earnings/(loss) per share –diluted share per Earnings/(loss) –basic share per Earnings/(loss) Adjusted earnings per share* –diluted share* per earnings Adjusted –basic share* per earning Adjusted share per Earnings parent the of holders equity to attributable period the for Profit/(loss) Tax (charge)/credit tax before Profit/(loss) costs Finance (charge)/credit finance Pension Operating profit/(loss) of associates: of results Share costs Distribution profit Gross of sales Cost Revenue 2008) 28 December 2010 ended (52 weeks 3January ended weeks 53 the for Consolidatedstatement income the parent the of holders equity to attributable period the for expense and income Total recognised parent of the holders equity to attributable period the for Profit/(loss) equity in directly recognised loss Net by associates equity in recognised of items Share equity taken to schemes pension benefit defined on losses Tax actuarial on  on derivative financial instruments and the impact of tax legislation changes. A reconciliation between the adjusted result and the statutory result is provided in note 39 on page 98 page on 39 note in provided is result statutory the and result adjusted the between reconciliation A changes. legislation tax of impact the and instruments financial derivative on amorti the items, non-recurring of exclusion to the relate items Adjusted Amortisation of intangible assets of intangible Amortisation Non-recurring items: Non-recurring items items non-recurring before Results Other Other assets of intangible Impairment s ation of intangible assets, the retranslation of foreign currency borrowings, the impact of fair value changes changes value fair of impact the borrowings, currency foreign of retranslation the assets, intangible of ation

8, 17 Notes Notes Notes Annual Report & Accounts 2009 &Accounts Report Annual Trinity Mirror plc 4, 5 35 35 10 13 13 13 13 15 17 17 11 11 8 8 9 (390.4) (186.9)

( 763.3 372.9 105.7) Pence (48.5) (34.7) (10.5) (7 ( ( (81.1) 2009 42.0 29.3 29.3 20.0 29.6 12.7) 19.8 11.3) 87.0 11.5 11.4 2009 (1.7) (7.1) 0.2 0.5 7.8) £m £m – –

57 (443.7) (190.0) (190.4) (113.0) 428.0 (172.1) (157.1) 871.7 Pence (34.5) (73.5) (88.4) (92.2) (22.6) (22.6) (59.1) (59.1) 33.4 33.4 44.0 2008 2008 14.4 11.4 (0.5) (0.2) (1.8) 7.3) ( 4.0 0.1 £m £m

.

Financials Governance Business review Who we are Trinity Mirror plc 58 Annual Report & Accounts 2009 Consolidated balance sheet at 3 January 2010 (28 December 2008) 2009 2008 Notes £m £m Non-current assets Goodwill 14 74.5 77.0 Other intangible assets 15 871.4 879.6 Property, plant and equipment 16 423.2 448.7 Investment in associates 17 6.3 7.5 Deferred tax assets 22 83.4 58.1 Derivative financial instruments 28 – 41.7 1,458.8 1,512.6 Current assets Inventories 18 5.9 7.6 Trade and other receivables 19 95.6 121.6 Cash and cash equivalents 19 61.2 20.6 162.7 149.8 Total assets 1,621.5 1,662.4 Non-current liabilities Borrowings 27 (355.0) (388.3) Obligations under finance leases 21 – ( 7.6) Retirement benefit obligation 35 (296.6) (206.9) Deferred tax liabilities 22 (318.8) (325.4) Provisions 23 (7.2) (10.6) Derivative financial instruments 28 (2.9) – (980.5) (938.8) Current liabilities Borrowings 27 – (10.0) Trade and other payables 20 (115.6) (143.0) Current tax liabilities 11 (23.0) (16.0) Obligations under finance leases 21 – (3.0) Provisions 23 (10.1) (14.8) Derivative financial instruments 28 (3.1) (2.1) (151.8) (188.9) Total liabilities (1,132.3) (1,127.7 ) Net assets 489.2 534.7

Equity Share capital 30, 31 (25.8) (25.8) Share premium account 30, 31 (1,120.5) (1,120.5) Capital redemption reserve 30 (4.3) (4.3) Retained earnings and other reserves 30 661.4 615.9 Total equity attributable to equity holders of the parent (489.2) (534.7)

These consolidated financial statements were approved by the Board of directors and authorised for issue on 4 March 2010. They were signed on its behalf by:

Sly Bailey Vijay Vaghela Chief Executive Group Finance Director Cash and cash equivalents at the end of period of end the at equivalents cash and Cash of period beginning the at equivalents cash and Cash equivalents cash and cash in increase/(decrease) Net activities financing in used cash Net overdrafts bank in Decrease programme buy-back share under of shares Purchase Repayment of obligations under finance leases finance under of obligations Repayment of borrowings Repayment borrowings in Increase leases finance on paid Interest undertakings of subsidiary Acquisition Cash generated from operations from generated Cash activities operating from flows Cash 2008) 28 December 2010 ended (52 weeks 3January ended weeks 53 the for Consolidated cash flow statement Interest paid on borrowings on paid Interest paid Dividends Financing activities activities investing in used cash Net equipment and plant of property, Purchases equipment and plant of property, disposal on Proceeds of businesses disposal on Proceeds Interest received Interest Investing activities activities operating from inflow cash Net paid tax Income Notes Annual Report & Accounts 2009 &Accounts Report Annual Trinity Mirror plc 38 29 29 29 29 29 29 29 26 12

(22.9) (43.3) (14.8) (10.0) 20.6 40.6 89.6 61.2 97.6 2009 (8.0) (9.8) (0.6) (5.7) 0.2 8.9 £m – – – – – –

59 (101.8) (191.0) 102.3 (241.1) 211.6 101.1 (35.5) (48.4) (61.4) (51.0) (54.1) 20.6 10.0 2008 (0.8) (0.6) (2.6) (1.2) (5.1) 0.2 4.0 4.0 £m

Financials Governance Business review Who we are Trinity Mirror plc 60 Annual Report & Accounts 2009 Notes to the consolidated financial statements for the 53 weeks ended 3 January 2010 (52 weeks ended 28 December 2008)

1 General information 3 Accounting policies Trinity Mirror plc is a company incorporated in England and Wales The principal accounting policies adopted in the preparation of these under the Companies Act 2006 and listed on the London Stock consolidated financial statements are set out below. These policies Exchange. The Company’s registered number is 82548. The address have been consistently applied to all years presented. of the registered office is One Canada Square, Canary Wharf, London E14 5AP. The principal activities of the Group are discussed in the International Financial Reporting Standards (IFRS) Business Review on pages 20 to 30. The Group has adopted standards and interpretations issued by the International Accounting Standards Board (IASB) and the International These consolidated financial statements were approved for issue Financial Reporting Interpretations Committee (IFRIC) of the IASB that by the Board of directors on 4 March 2010. The 2009 Annual Report are relevant to its operations as adopted by the European Union (EU). and Accounts will be made available on the Company’s website at www.trinitymirror.com, at the Company’s registered office and sent Individual standards and interpretations have to be adopted by to shareholders in early April 2010. the EU and the process leads to a delay between the issue and adoption of new standards and interpretations and in some cases 2 Adoption of new and revised standards amendments by the EU. In the current period, the Group has not adopted any new standards The parent company financial statements of Trinity Mirror plc for and interpretations. the 53 weeks ended 3 January 2010, prepared in accordance with applicable law and United Kingdom Accounting Standards, At the date of approval of these consolidated financial statements the are presented on pages 99 to 107. following revisions and amendments to standards and interpretations, which have not been applied, were in issue but not yet effective: Basis of preparation IFRS 2 (Revised) Share-Based Payment: Vesting Conditions These consolidated financial statements have been prepared and Cancellations on a going concern basis as set out on page 42 of the corporate IFRS 3 (Revised) Business Combination governance report. IFRS 5 (Revised) Non-current Assets Held for Sale and For administrative convenience, the consolidated financial statements Discontinued Operations are made up to a suitable date near the end of the calender year. IFRS 7 (Revised) Financial Instruments: Disclosure IFRS 8 Operating Segments These consolidated financial statements have been prepared for IFRS 9 Financial Instruments the 53 weeks ended 3 January 2010 and the comparative period IAS 1 (Amended) Presentation of Financial Statements has been prepared for the 52 weeks ended 28 December 2008. IAS 7 (Amended) Statement of Cash Flows The impact of the additional weeks’ trading is to increase revenue IAS 16 (Amended) Property, Plant and Equipment by £9.9 million and operating profit by £4.2 million and the IAS 17 (Amended) Leases comparative amounts in the consolidated financial statements IAS 19 (Amended) Employee Benefits are not entirely comparable. IAS 20 (Amended) Government Grants and Disclosure of Government Assistance Basis of accounting IAS 23 (Amended) Borrowing Costs These consolidated financial statements have been prepared in IAS 24 (Revised) Related Party Disclosure accordance with International Financial Reporting Standards (IFRS) IAS 27 (Revised) Consolidated and Separate Financial and IFRIC interpretations as adopted by EU and with those parts of Statements the Companies Act 2006 applicable to groups reporting under IFRS. IAS 28 (Amended) Investments in Associates The consolidated financial statements have been prepared under the IAS 29 (Amended) Financial Reporting in Hyperinflationary historical cost convention as modified by the revaluation of freehold Economies properties which on transition to IFRS were deemed to be the cost IAS 31 (Amended) Investments in Joint Ventures of the asset. A summary of the more important Group accounting IAS 32 (Amended) Financial Instruments: Presentation policies is set out below. IAS 36 (Amended) Impairment of Assets IAS 38 (Amended) Intangible Assets Basis of consolidation IAS 39 (Amended) Financial Instruments: Recognition The consolidated financial statements incorporate the financial and Measurement statements of Trinity Mirror plc and all entities controlled by it for IAS 40 (Amended) Investment Property the 53 weeks ended 3 January 2010. Control is achieved where IAS 41 (Amended) Agriculture the Company has the power to govern the financial and operating IFRIC 14 (Issued) The Limit on a Defined Benefit Asset, policies of an entity so as to obtain benefits from its activities. Minimum Funding Requirements and their Interaction All intra-group transactions, balances, income and expenses IFRIC 15 (Issued) Agreements for the Construction of Real Estate are eliminated on consolidation. IFRIC 17 (Issued) Distributions of Non-cash Assets to Owners On the acquisition of a business, including an interest in an IFRIC 18 (Issued) Transfers of Assets from Customers associated undertaking or a joint venture, fair values are attributed IFRIC 19 (Issued) Extinguishing Financial Liabilities Equity to the Group’s share of the identifiable assets and liabilities of Instruments the business existing at the date of acquisition and reflecting the With the exception of IFRIC 14, the directors anticipate that the conditions as at that date. Where necessary, adjustments are adoption of these Standards and Interpretations in future periods made to the financial statements of businesses acquired to bring will have no material impact on the financial statements other than their accounting policies in line with those used in the preparation the requirement for additional disclosure. The impact of IFRIC 14 of the consolidated financial statements. is disclosed in note 35. value business initially Goodwill arising on acquisition is recognised as an asset and their the identifiable assets, liabilities and contingent directlyliabilities attributable that meet to the business combination. the The acquiree’s liabilities incurred or assumed, and equity instrumentsof issued by method. The cost of the acquisition purchase the using for accounted is is measured of subsidiaries acquisition The at the aggregate Business combinations control. dateof relinquishing to effective up the of disposals respect in and dateof acquisition effective the from statement Results of businesses are included in the consolidated income3 net If, recognised. assets net is The statement. income consolidated the in immediately recognised is excess the contingent of the On disposal of a subsidiary, associate or jointly controlled entity, and statement income consolidated the in immediately recognised amount carrying the than less is amount more frequently when there is date anor reporting indication each at unit cash-generating relevant of the thatpart the recoverable allocated to a cash-generating goodwill the unit and cost at asset an as is reviewed recognised initially is Goodwill for impairment as amounts. GAAP UK previous the at retained been tohas IFRS dateof transition the before acquisitions jointly controlled entity at the or associate date of asubsidiary, recognised of liabilities acquisition. contingent and Goodwill arising on liabilities less assets identifiable of the value fair the Group’s in interest units Goodwill arising on consolidation is allocated toGoodwill cash-generating venture. joint the Group’s in of the to extent interest the eliminated its consolidated income statement. Where the Groupof transacts with in jointly controlled entities using interest its reports Group the equity material, When entities. accounting these controls and its share its entities The Group has joint venture arrangements where ventures Joint separate expense. and income of recognised statement consolidated of recognised share method influence but not control and are significant accounted has Group the which over entities all are forAssociates by the equity associates in Investment liabilities

Accounting

initially measured at the minority’s proportion of the acquiree’s the fair values, at the date of completion, of assets acquired, acquired, of assets dateof completion, the at values, fair the the profit or loss on disposal. on loss or profit the the entities’ profit or loss is accounted for as a single entry in the post jointly controlled entities, unrealised profits and losses are subsidiaries has an interest and along with other ventures jointly

conditions for recognition under IFRS 3 are recognised at Group in exchange for control of the acquiree, plus any costs remaining amount of goodwill is included in the determination fair fair

is fair

and represents the excess of the cost of acquisition over the

of

post associates’ of its

not subsequently reversed. subsequently not

- measured at cost, being the excess of the cost of the

other than goodwill, less liabilities and contingent liabilities of the value value have been established. In each entity the Group or one of

acquisition movements in reserves is recognised in the

the acquiree’s identifiable assets, including intangible values at the acquisition date. acquisition the at values of accounting, initially recognised at cost. The Group’s The cost. at recognised initially of accounting, recognised.

combination over the Group’s interest in the net fair

liabilities exceeds the cost of the business combination, combination, business of the cost the exceeds liabilities in the consolidated income statement, and its share

of the identifiable assets less liabilities and contingent after reassessment, the Group’s interest in the interest of minority shareholders in the acquiree acquiree the in shareholders of minority interest acquiree’s identifiable assets, liabilities and

policies policies acquisition profits or losses is is losses or profits acquisition continued . Any impairment is

Interest astraight on statement income receivable under operating leases are Rentals credited of service. provision or of sale time the at torecognised the consolidated is revenue events and leaflets including revenue Other campaign. online of the period the over recognised is revenue Digital provided. is service the when recognised is revenue Printing of sale. time the is recognised upon publication. revenue Circulation Advertising tax. added value and discounts revenue of applicable net is recognised at received, consideration of the value fair the at measured is Revenue Revenue recognition are Costs incurred in the development and maintenance of websites tested assets will generate revenues and profits for the Group and are value Assets held under finance leases are recognised atto their fair of ownership rewards and risks the all substantially transfer lease the of terms the whenever leases finance as classified are Leases Leases established. been have payment to receive rights shareholders’ basis. Dividend income from investments is recognised when the and cost of the investment is allocated between categoriesin respect ofof assetsonline activities. names domain and On the relationships customer and acquisition activities publishing of a business the comprise acquired publishing rights and units and to cash-generating titles allocated are assets intangible inOther respect of print assets intangible Other An of estimated to be less than its carrying amount,adjusted. the carrying Ifvalue the recoverable amount of a cash-generatingto unit is specific risks and of money value time of the assessments market apost-tax using value present cash-generating unit relating to the asset areIn discounted to their use. in value and to sell costs less value of fair higher the is amount recoverable amount is less than the carrying amount. Recoverable at Publishing rights and titles are initially recognised as an flows. asset cash discounted on based calculated is assets the using amortised are names domain and relationships Customer in statement in the period in which it occurs and may be reversed date cash-generating unit are tested for impairment to at each reporting Lease the property, plant and equipment and the correspondingof liability to straight received as incentives to enter into the astraight on statement agreementincome are spread on a to consolidated the charged are leases operating under payable Rentals in are

subsequent subsequent periods. the lease obligation. lease the assessing value in use the estimated future cash flows of the the cash-generating unit is reduced to its recoverable amount. the fair the Group. All other leases are classified as operating leases. the asset for which estimates of future cash flows have not been been nothave flows cash of future estimates which for asset the amortisation and the publishing rights and titles allocated to a

impairment loss is recognised in the consolidated income income consolidated the in recognised is loss impairment straight-line is lessor only capitalised if the criteria specified in IAS 38 are met. are 38 IAS in specified criteria the if capitalised only charged to the charged

liabilities on a fair value basis. The fair value of other intangible

or more frequently when there is an indication that the that indication an is there when frequently more or

at value with an indefinite economic life. They are not subject subject not are They life. economic indefinite an with value

minimum lease payments. The asset is recognised within payments are apportioned between finance charges which for impairment at each reporting date. reporting each at impairment for -

income from bank deposits is recognised on an accruals line basis over the lease term. lease the over basis line the inception of the lease or, if lower, the present value included within obligations under finance leases. method over the expected life over which those consolidated income statement and reductions discount rate that reflects current - - line basis over the lease term. Benefits term. lease the over basis line line basis over the lease term. Annual Report & Accounts 2009 &Accounts Report Annual Trinity Mirror plc

61

Financials Governance Business review Who we are Trinity Mirror plc 62 Annual Report & Accounts 2009 Notes to the consolidated financial statements continued 3 Accounting policies continued Property, plant and equipment Property, plant and equipment are stated in the consolidated balance Foreign currency sheet at cost less accumulated depreciation and impairment losses. Transactions denominated in foreign currencies are translated Cost includes the purchase price and all directly attributable costs of at the rates of exchange prevailing on the date of the transactions. bringing the asset to its location and condition necessary to operate At each reporting date, items denominated in foreign currencies are as intended. retranslated at the rates prevailing on the reporting date. Exchange differences arising on settlement and on retranslation are included Assets in the course of construction are carried at cost, less any in the consolidated income statement for the period. recognised impairment loss. Depreciation commences when the assets are ready for their intended use. Retirement benefits Depreciation is charged so as to write-off the cost, other than freehold The Group operates a number of defined benefit pension schemes, land and assets under construction which are not depreciated, using all of which have been set up under trusts that hold their financial the straight-line method over the estimated useful lives of buildings assets separately from those of the Group and are controlled by (15–67 years) and plant and machinery (3–25 years). the trustees. Assets held under finance leases are depreciated over their expected The liability recognised in the balance sheet in respect of defined useful lives on the same basis as owned assets or, where shorter, benefit pension schemes is the present value of the defined benefit over the term of the relevant lease. obligation at the reporting date less the fair value of scheme assets, together with adjustments for unrecognised actuarial gains or losses The gain or loss arising on the disposal or retirement of an asset is and past service costs. The defined benefit obligation is calculated determined as the difference between the sale proceeds and the at each reporting date by independent actuaries using the projected carrying amount of the asset and is recognised in the consolidated unit credit method. The present value of the defined benefit obligation income statement. is determined by discounting the estimated future cash outflows using interest rates of high quality corporate bonds approximating Inventories to the terms of the related pension liability. Unrealised gains and Inventories are stated at the lower of cost and net realisable value. losses are recognised in the consolidated statement of recognised Cost represents materials, direct labour and production overheads. income and expense. Cost is calculated using the first in first out method. Payments to defined contribution pension schemes are charged as an expense as they fall due. Financial instruments Financial assets and financial liabilities are recognised in the consolidated balance sheet when the Group becomes a party Tax to the contractual provisions of the instrument. The tax expense represents the sum of the corporation tax currently payable and deferred tax. Trade receivables The corporation tax currently payable is based on taxable profit for Trade receivables do not carry any interest. Conversion to a readily the period. Taxable profit differs from profit before tax as reported known amount of cash occurs over a short period and is subject in the consolidated income statement because it excludes items to an insignificant risk of changes in value. Therefore balances are of income or expense that are taxable or deductible in other years stated at their nominal value as reduced by appropriate allowances and it further excludes items that are never taxable or deductible. for estimated irrecoverable amounts. The Group’s liability for current tax is calculated using tax rates that have been enacted or substantively enacted by the reporting date. Cash and cash equivalents Cash and cash equivalents comprise cash in hand and demand Deferred tax is the tax expected to be payable or recoverable on deposits. differences between the carrying amounts of assets and liabilities in the consolidated financial statements and the corresponding tax Borrowings bases used in the computation of taxable profit, and is accounted Sterling interest bearing loans and bank overdrafts are recorded for using the balance sheet liability method. Deferred tax liabilities at the proceeds received, net of direct issue costs. Foreign currency are generally recognised for all taxable temporary differences and interest bearing loans are recorded at the exchange rate at the deferred tax assets are recognised to the extent that it is probable reporting date. Finance charges, including premiums payable on that taxable profits will be available against which deductible settlement or redemption and direct issue costs, are accounted for temporary differences can be utilised. on an accruals basis in the consolidated income statement using Deferred tax liabilities are recognised for taxable temporary the effective interest method and are added to the carrying differences arising on investments in subsidiaries, associates and amount of the instrument to the extent that they are not settled interests in joint ventures, except where the Group is able to control in the period in which they arise. All other borrowing costs are the reversal of the temporary difference and it is probable that the recognised in the consolidated income statement in the period temporary difference will not reverse in the foreseeable future. in which they are incurred. The carrying amount of deferred tax assets is reviewed at each Derivative financial instruments reporting date and reduced to the extent that it is no longer probable The Group uses derivative financial instruments, including currency that sufficient taxable profits will be available to allow all or part of the swaps, cross-currency interest rate swaps, interest rate swaps asset to be recovered. Deferred tax is calculated at the tax rates that and other hedging instruments to minimise exposure to the financial are expected to apply in the period when the liability is settled or the risks of changes in foreign currency exchange rates and interest asset is realised. rates. The Group does not use derivative financial instruments Deferred tax is charged or credited in the consolidated income for speculative purposes. The Group has elected not to apply statement, except when it relates to items charged or credited hedge accounting. directly to equity, in which case the deferred tax is also dealt with in the consolidated statement of recognised income and expense. value the the be as obligation apresent has Group the when recognised are Provisions Provisions a significant concentration of credit risk, with assignedexposure by spread international over credit-rating agencies.limited The Groupbecause hasthe no counterparties is instruments are financial derivative banks and funds liquid on risk with credit The high credit ratings environment. economic current of the assessment and experience of allowances for doubtful receivables, net are sheet balance estimated consolidated the in presented amounts The based on prior receivables. to trade its attributable primarily is risk Group’sThe credit risk Credit in a Trade payables are not interest bearing. PaymentsTrade payables occur over statement. income consolidated the in reported losses or gains closely related to those of the underlying contract,separate withderivatives unrealised when their as risks treated are contracts and commercial in characteristics embedded Derivatives are not in value of derivative financial instruments are valuerecognised immediately Derivative financial instruments are separately recognised at3 fair grant. dateof the at value fair at measured are payments share-based equity These 2005. of 3January as vested not had that 2002 7November after instruments of equity grants to all applied been has 2, of IFRS standard the provisions transitional the with accordance In The Group issues equity-settled benefits to certain payments Share-based employees. liabilities. current in included are accruals These where it is judged probable that damages will bein payable. a holders until the shares are cancelled, reissued or disposed of. disposed or reissued cancelled, are shares the until holders taxes, is deducted from equity attributable to the Group’s of income net costs, incremental equity attributable directly any including paid consideration the purchased, are Group’s the shares own Where of tax. net proceeds, the from adeduction as attributable to the issue of directly costs new Incremental equity. sharesas classified are or shares optionsOrdinary are shown in equity Share capital considerations. behavioural and restrictions, exercise of non-transferability, effects the for estimates, best directors’ the on based adjusted, been has model the in used life expected The calculation. Black-Scholes amodified or model binomial) (Monte-Carlo of astochastic by use measured is value Fair conditions. vesting based of non-market effect the for adjusted and vest eventually will that of shares estimate

Accounting large number of counterparties and customers. and of counterparties number large short straight value. Therefore balances are stated at their nominal value. nominal their at stated are balances Therefore value. the consolidated income statement. income consolidated the respect of libel litigation in progress and for estimated damages

a result of a past event, and it is probable that the Group will will Group the that probable is it and event, of apast a result required to settle that obligation. Provisions are measured at at measured are Provisions obligation. that to settle required obligation at the reporting date, and are discounted to present to present discounted are date, and reporting the at obligation directors’ best estimate of the expenditure required to settle to settle required expenditure of the estimate best directors’

where the effect is material. Accruals are made for legal costs legal for made are Accruals material. is effect the where in the consolidated financial statements. Changes in the fair

The fair value determined at the grant date is expensed on

period and are subject to an insignificant risk of changes - line basis over the vesting period, based on the Group’s the on based period, vesting the over basis line

policies policies continued

- settled

change significantly from period period. to period from significantly change can and value fair at recognised are instruments financial Derivative Derivative financial instruments assumptions. Advice is sourced from independent actuaries in selectingvary the surplussuitable or deficit of defined benefit pensionActuarial schemes. assumptions adopted and external factors Retirement benefits can significantly value. present calculate to order rate in discount asuitable and unit cash-generating the from arise to expected flows cash future the to estimate Group the requires to which these have been allocated. unit cash-generating of the The use in value of the value estimation an requires in use calculation impaired are assets intangible other and goodwill whether Determining assets intangible other and goodwill of Impairment below: year,discussed are financial next the within liabilities and of causing a material adjustment to the carryingestimation amounts ofuncertainty assets at the reporting of key sources other and date, future the concerning that key assumptions The have a significant risk uncertainty estimation of Key sources necessary. if frequently date, more or reporting each at impairment for reviewed analysis. The initial valuations market of and forecasts acquired acquisition pre on based assets intangibleintangible assets are Judgements have been made in respect assets of the intangible and identificationAcquisitions of statements: the most significant effect on the amounts recognisedabove, in managementthe financial has made the following described policies, Group’s the accounting judgements of applying process the In that have policies accounting Critical judgements in applying the Group’s Group. of the performance financial consolidated income statement to assist in understandingto the or size are included under the statutory nature of their by virtue to non-recurring be classification deemed are which Items appropriate items Non-recurring approved. are dividends the which in period in the statements financial consolidated the in aliability as recognised are to shareholders Company’s the distributions Dividend Dividend distributions to attributable equity in included is effects, tax income related the and received, net of any directly attributable incrementalshares are transaction subsequently costs reissued such Where or reserve. disposed redemption capital the in shown is of,cancelled any consideration Where such shares are cancelled, the nominal value of shares

their nature but are separately disclosed on the face of the holders. Group’sthe equity Annual Report & Accounts 2009 &Accounts Report Annual Trinity Mirror plc

63

Financials Governance Business review Who we are Trinity Mirror plc 64 Annual Report & Accounts 2009 Notes to the consolidated financial statements continued 4 Revenue 2009 2008 £m £m Advertising 331.8 426.5 Circulation 339.3 345.3 Other 92.2 99.9 Total 763.3 871.7

5 Business and geographical segments For management purposes, the operations of the Group are organised into the following divisions: Regionals, Nationals and Central. These divisions are the basis on which the Group reports its primary segment information. The secondary reporting segment is a geographical source analysis. The Regionals division publishes a large portfolio of newspaper and online brands across the UK. The Nationals division publishes two daily and three Sunday newspapers and related online brands and activities. Central includes costs not attributed to the Regionals or Nationals divisions. The revenues and costs of each segment are clearly identifiable and allocated according to where they arise.

Primary segments – business segment analysis Regionals Nationals Central Total 2009 2009 2009 2009 £m £m £m £m Revenue Segment sales 311.8 467.8 – 779.6 Inter-segment sales (8.9) (7.4) – (16.3) Total revenue 302.9 460.4 – 763.3 Operating profit/(loss) before associates and non-recurring items 28.8 83.6 (14.6) 97.8 Share of results of associates – – 0.5 0.5 Non-recurring items 2.3 (5.6) (8.0) (11.3) Operating profit/(loss) by segment 31.1 78.0 (22.1) 87.0 Investment revenues 0.2 Pension finance charge (10.5) Finance costs (34.7) Profit before tax 42.0 Tax charge (12.7) Profit for the period 29.3

Other information Capital additions 2.7 10.5 0.8 14.0 Depreciation 15.9 20.4 0.5 36.8 Amortisation of intangible assets 7.1 – – 7.1 Impairment of trade receivables 3.0 5.8 – 8.8

Capital additions comprises additions to property, plant and equipment (note 16). and except the US$ denominated private placement loan notes. loan placement private denominated US$ the except of Ireland Republic and Kingdom United the in are liabilities and assets All liabilities. tax current and payables other and trade provisions, comprise liabilities Segment receivables. other and trade and inventories equipment, and plant property, assets, intangible other of goodwill, consist assets Segment Total liabilities Deferred tax liabilities tax Deferred Retirement benefit obligation benefit Retirement Borrowings Segment liabilities Liabilities Total assets Cash and cash equivalents cash and Cash Deferred tax assets tax Deferred associates in Investment Segment assets Segment Assets sheet Balance analysis segment –business segments Primary 5 Impairment of trade receivables of trade Impairment sales Segment Revenue Operating profit/(loss) before associates and non-recurring items non-recurring and associates before profit/(loss) Operating Total revenue sales Inter-segment Capital additions comprises additions to goodwill (note 14), other intangible assets (note 15) and property, plant and equipment (note 16). equipment and (note (note 14), plant 15) assets to goodwill property, and additions intangible other comprises additions Capital assets of intangible Amortisation Depreciation Capital additions Other information period the for Loss Tax credit Loss before tax costs Finance credit finance Pension revenues Investment of associates share including items Non-recurring items non-recurring before of associates of results Share Operating (loss)/profit by segment by (loss)/profit Operating Business

and

geographical

segments continued continued Regionals Regionals 50 50 (138.5) (199.4) 396.0 ( ( 401.4 58.5) 58.5) 60.9 2009 16.3 2008 27.4 (5.4) 2.9 2.9 1.0 7.3 £m £m – – – – – – –

Nationals Nationals 967.7 967.7 482.8 475.7 (81.1) (81.1) 88.9 88.9 Annual Report & Accounts 2009 &Accounts Report Annual Trinity Mirror plc 20.8 2009 25.7 2008 0.6 7.1) ( £m £m – – – – – – – – –

Unallocated (992.7) (296.6) (318.8) (361.0)

150.9 Central (16.3) (38.8) (26.9) 83.4 61.2 2009 (11.7) 2008 (0.2) 6.3 6.5 0.9 £m £m – – – – – –

65 Consolidated (1,13 1,6 1,47 (296.6) (318.8) (361.0) (15 (226.3) 884.2 138.1 871.7 (73.5) (88.4) 83.4 61.2 (12.5) 21.5 (59.1) 38.0 2009 59.6 2008 14.4 11.4 Total (0.5) (0.2) 2.3) 5.9) 6.3 0.6 4.0 1.6 7.3 £m £m

Financials Governance Business review Who we are Trinity Mirror plc 66 Annual Report & Accounts 2009 Notes to the consolidated financial statements continued 5 Business and geographical segments continued Primary segments – business segment analysis continued Balance sheet Regionals Nationals Unallocated Consolidated 2008 2008 2008 2008 £m £m £m £m Assets Segment assets 538.4 996.1 – 1,534.5 Investment in associates – – 7.5 7.5 Deferred tax assets – – 58.1 58.1 Derivative financial instruments – – 41.7 41.7 Cash and cash equivalents – – 20.6 20.6 Total assets 538.4 996.1 127.9 1,662.4 Liabilities Segment liabilities (83.0) (94.9) (6.5) (184.4) Borrowings – – (400.4) (400.4) Obligations under finance leases – – (10.6) (10.6) Retirement benefit obligation – – (206.9) (206.9) Deferred tax liabilities – – (325.4) (325.4) Total liabilities (83.0) (94.9) (949.8) (1,127.7 )

Segment assets consist of goodwill, other intangible assets, property, plant and equipment, inventories and trade and other receivables. Segment liabilities comprise provisions, trade and other payables and current tax liabilities. All assets and liabilities are in the United Kingdom and Republic of Ireland except the US$ denominated private placement loan notes.

Secondary segment – geographical source segment analysis The Group’s operations are located in the United Kingdom. The Group’s revenue source by geographical market is set out below:

2009 2008 £m £m United Kingdom and Republic of Ireland 757.0 863.7 Continental Europe 5.4 6.6 Rest of World 0.9 1.4 Total 763.3 871.7 – under finance leases finance – under for: to auditors Company’s the payable Fees Auditors’ remuneration: (note items 8) Non-recurring loss/(gain) exchange foreign Net impairment Trade receivables – – property payable: rentals lease Operating assets of intangible Amortisation – owned assets – owned equipment: and plant of property, Depreciation of sales acost as recognised of inventories Cost (note 7) costs Staff charging/(crediting): after at arrived is period the for profit Operating 6 (2008: £104.2 million loss) included in finance costs (notecosts 10). finance in £104.2(2008: included loss) million of Total foreign exchange gain during the period was £32.9 million (2008: £103.1 £1.8 (2008: of £nil charge million). anon-recurring million and loss) £0.2 (2008: million loss) of £0.5 million items comprising a net foreign exchange loss non-recurring before profit of share comprising loss) £2.0 (2008: million £0.5 toof million aprofit amounted of associates Total of results share to £ (note 8) amounting £2 to amounted profit operating in included expenses Total administrative an & Audit of the work of the A description £nil). date(2008: reporting the at contracted services future no were There schemes. In addition to the amounts shown above, the auditors received fees of £20,000 (2008: £20,000) for the audit of two of the Group’s pension services: Other vehicles, Result – the audit of the Company’s subsidiaries pursuant to legislation pursuant subsidiaries Company’s of the audit – the accounts annual Company’s of the audit – the – other services relating to taxation relating services – other to legislation pursuant services – other

£0.4 million (2008: £1.1 million gain) included in operating profit and a gain on the retranslation of borrowings of £33.3 million explanation of how auditor objectivity and independence are safeguarded when non-audit services are provided by the auditors. by the provided are services non-audit when safeguarded are independence and objectivity auditor of how explanation plant and equipment and plant

for

the

11.3 million (2008: £224.5 million) and amortisation of intangible assets of £7.1 assets of intangible 11.3 £7.3 (2008: amortisation £224.5 (2008: million and million) million million). year Risk Committee is set out in the Co the in out set is Committee Risk 05.3 million (2008: £422.2 million) including non-recurring items items non-recurring £422.2 (2008: including 05.3 million million) rporate governance report on pages 40 pages on report governance rporate Annual Report & Accounts 2009 &Accounts Report Annual Trinity Mirror plc

to

45

120.2 251.2 and includes includes and 35.9 11.3 2009 8 3.8 0.2 6.3 0.8 0.5 0.3 0.9 0.4 0.1 0.1 7.1 £m .8

67

226.3 290.7 124.0

36.3 2008 0.2 8.4 5.0 0.6 0.4 (1.1) 1.6 1.0 1.7 0.1 0.1 7.3 £m

Financials Governance Business review Who we are Trinity Mirror plc 68 Annual Report & Accounts 2009 Notes to the consolidated financial statements continued 7 Staff costs The average number of persons, including executive directors, employed by the Group in the period was:

2009 2008 Number Number Production and editorial 3,452 4,165 Sales and distribution 2,147 2,824 Administration 1,217 1,330 6,816 8,319

All employees are employed in the United Kingdom and Republic of Ireland. The above excludes 502 (2008: 695) casual workers working for the Group at the reporting date due to the impracticality of determining an average. Staff costs, including directors’ emoluments, incurred during the period were:

2009 2008 £m £m Wages and salaries 211.8 237.8 Social security costs 19.6 21.4 Share-based payments in the period (note 34) 3.2 3.9 Pension costs – defined contribution pension schemes (note 35) 1.1 1.2 Pension costs – defined benefit pension schemes (note 35) 15.5 26.4 251.2 290.7

Disclosure of individual directors’ remuneration, share options, long-term incentive schemes, pension contributions and pension entitlements required by the Companies Act 2006 and those elements specified for audit by the Financial Services Authority are shown in the tables in the Remuneration report on pages 47 to 52 and form part of these consolidated financial statements.

8 Non-recurring items 2009 2008 £m £m Impairment of intangible assetsa – 190.0 Restructuring costsb 17.9 25.1 Profit on disposal of land and buildingsc (5.1) (4.6) Loss/(profit) on disposal of businessesd 2.4 (0.3) Impairment of receivablese 6.0 – Defined benefit scheme liabilitiesf (9.9) – Impairment of fixed assetsg – 14.3 Non-recurring items included in administrative expenses 11.3 224.5 Non-recurring items included in share of results of associatesh – 1.8 Total non-recurring items 11.3 226.3

a An impairment review of the carrying value of the Group’s intangible assets undertaken in accordance with IAS 36 indicated that no impairment charge was required (2008: £190.0 million). The impairment charge in 2008 was based on comparing carrying value with value in use and reduced the carrying value of the publishing rights and titles relating to the Midlands and the South cash-generating units as a result of advertising revenue falls. b Restructuring costs of £17.9 million (2008: £25.1 million) have been incurred in the delivery of cost reduction measures and implementation of a new operating model for the Group. c The Group disposed of surplus land and buildings realising a profit on disposal of £5.1 million (2008: £4.6 million). d The Group disposed of Globespan Media Limited incurring a loss on disposal of £2.4 million. In 2008, certain newspaper titles within the Midlands were disposed of realising a profit on disposal of £0.3 million. e Impairment of receivables relates to a write-off against circulation receivables following a wholesale distributor going into administration. f Defined benefit scheme liabilities have been reduced by £9.9 million in respect of the curtailment gain relating to redundancies and the Group indicating that it will no longer exercise discretion in providing enhancements to past service on redundancy. g In 2008, an impairment of fixed assets was made following the decision to close the print site in Liverpool. h In 2008, included in the share of results of associates was the Group’s share of non-recurring items. Finance costs Finance of borrowings retranslation on (gain)/loss exchange Foreign instruments financial derivative on loss/(gain) value Fair Tax (charge)/credit and In 2008, the deferred tax credit included a credit of £53.2 million from in relation to the impairment charge 28% rate of 28% and to of up 30% 2008 31 28.5% (2008: prevailing amix UK the March is being with tax rate of corporation respect standard The to intangible assets 2008, *In tax rate of corporation Standard Reconciliation of tax (charge)/credit tax of Reconciliation period the for charge tax Corporation tax Current 11 expense Total interest leases finance under obligations on Interest borrowings and overdrafts bank on Interest 10 deposits bank on income Interest 9 Deferred tax credit tax Deferred adjustment period Prior changes* Tax legislation period the for credit tax Deferred Deferred tax (note 22) charge tax Current adjustment period Prior Tax charge rate adjustment period Prior Impact on the current period deferred tax charge of tax legislation changes legislation of tax charge tax deferred period current the on Impact (2008: £22.6 (2008: of £25.0 million tax of £4.6 £21.4 (2008: deferred tax million and million) of equity taken to schemes pension benefit defined on losses actuarial on tax The of associates of results of share Tax effect profit/(loss) taxable determining in deductible not are that of items Tax effect Tax effect of items that are not taxable in determining taxable profit/(loss) taxable determining in taxable not are that of items Tax effect Investment Tax Finance £4.0 of acredit

1

The current tax liabilities amounted to £23.0 million (2008: £16.0 million) at the period end. £16.0 (2008: to period £23.0 the at million amounted million) liabilities tax current 2008). The April tax legislation changes related to the impact of the phasing out of Industrial Buildings Allowance. Buildings Industrial of out phasing the of impact to the related changes legislation tax

costs

million in relation to the impairment of fixed assets. assets. of fixed to impairment the relation in million revenues

* £ 29.6 million (2008: £44.0 million) comprises current million). Annual Report & Accounts 2009 &Accounts Report Annual Trinity Mirror plc

(33.3) (18.0) (12.7) (19.6) 22.4 30. 28.0 45.6 34.7 21.8 2009 2009 2009 2009 (0.4) ( (1.6) 0.2 4.0) 6.9 4.9 0.9 6.0 0.6 1.7 £m £m £m % 2 – –

69 104.2 (140.1) (28.5) (28.6) (16.5) (19.6) 30.9 36.4 35.6 2008 2008 2008 2008 14.4 47.9 12.1 (3.8) (9.3) (1.7) . ) 7.7 ( 4.2 0.5 0.8 0.8 4.0 9.4 £m £m £m %

Financials Governance Business review Who we are Trinity Mirror plc 70 Annual Report & Accounts 2009 Notes to the consolidated financial statements continued 12 Dividends No dividend is proposed and no dividend has been declared for the 53 weeks to 3 January 2010 (52 weeks to 28 December 2008: 3.2 pence per share interim dividend declared and paid). In 2009, no dividend has been paid. In 2008, £48.4 million (18.7 pence per share) was paid in dividends being £40.3 million in respect of the final dividend for the 52 weeks to 30 December 2007 (15.5 pence per share) and £8.1 million in respect of the interim dividend for the 52 weeks to 28 December 2008 (3.2 pence per share).

13 Earnings per share 2009 2008 £m £m Profit after tax before adjusted items* 51.1 87.3 Adjusted items*: Non-recurring items (after tax) (7.8) (159.3) Amortisation of intangibles (after tax) (5.1) (5.3) Impact of the fair value (loss)/gain on derivative financial instruments (after tax) (32.8) 100.9 Foreign exchange gain/(loss) on retranslation of borrowings (after tax) 23.9 (75.0) Tax legislation changes – ( 7.7 ) Profit/(loss) for the period attributable to equity holders of the parent 29.3 (59.1)

*Adjusted items relate to the exclusion of non-recurring items, the amortisation of intangible assets, the retranslation of foreign currency borrowings, the impact of fair value changes on derivative financial instruments and the impact of tax legislation changes. A reconciliation between the adjusted result and the statutory result is provided in note 39 on page 98. 2009 2008 Thousand Thousand Weighted average number of ordinary shares for basic earnings per share 255,874 261,350 Effect of potentially dilutive ordinary shares in respect of share options 1,989 – Weighted average number of ordinary shares for diluted earnings per share 257,863 261,350

Basic earnings per share is calculated by dividing profit attributable to equity holders of the parent by the weighted average number of ordinary shares during the period. Diluted earnings per share is calculated by adjusting the weighted average number of ordinary shares in issue on the assumption of conversion of all potentially dilutive ordinary shares.

2009 2008 Earnings per share Pence Pence Adjusted earnings* per share – basic 20.0 33.4 Adjusted earnings* per share – diluted 19.8 33.4 Earnings/(loss) per share – basic 11.5 (22.6) Earnings/(loss) per share – diluted 11.4 (22.6)

*Adjusted items relate to the exclusion of non-recurring items, the amortisation of intangible assets, the retranslation of foreign currency borrowings, the impact of fair value changes on derivative financial instruments and the impact of tax legislation changes. A reconciliation between the adjusted result and the statutory result is provided in note 39 on page 98.

The basic earnings per share impact for each category of non-recurring item disclosed in note 8 is as follows:

2009 2008 Pence Pence Impairment of intangible assets – (52.3) Restructuring costs (5.0) (6.0) Profit on disposal of land and buildings 2.0 1.8 (Loss)/profit on disposal of businesses (1.1) 0.1 Impairment of receivables (1.7) – Defined benefit scheme liabilities 2.8 – Impairment of fixed assets – (3.9) Loss per share – non-recurring items included in administrative expenses (3.0) (60.3) Loss per share – non-recurring items included in share of results of associates – (0.7) Loss per share – total non-recurring items (3.0) (61.0) Goodwill is allocated to cash-generating units. The carrying value of goodwill analysed by business segment is as follows: as is segment by business analysed of goodwill value carrying The units. to cash-generating allocated is Goodwill periods. prior in T consideration to deferred Adjustment Closing balance Acquisitions unit of these reasonably possible changes could be an impairment of up to of up £10 million. impairment an be could changes possible reasonably of these unit generating cash recruitment national specialist online the on impact review. The impairment of the conclusions the change not would rates growth of 1% 1% rate or change discount perpetuity the the in in possible areasonably unit, cash-generating recruitment national specialist online of the exception the With units. Group’s of the any in cash-generating impairment amaterial in result not will factor asingle in change b unit, cash-generating recruitment national specialist online of the exception the With rates. growth perpetuity the rate and discount the notably most used, key in assumptions to achange sensitive is review impairment The 2.5%. 0% and between vary used rates growth perpetuity The between 2011 the in rates growth 2010 for revenue then to 201 and performance forecast current our We assumed have the Management believes replacement. itpress printing is including appropriaterequired, investment capital of cycle the reflect to forecast tobeen have flows cash forecast expenditure Capital for a period of greater than five years 201 for print businesses to most appropriately thereafter reflect projections and 8.0 rate is discount pre-tax equivalent of 2.5 The to ratio EBITDA times. debt along-term assuming value enterprise end period the on based mix debt and equity of level the and rates growth cost and rate, revenue discount the regarding those are calculations use in value the in used key assumptions The online businesses. to 205 periods of respect in projections flow cash using assets, those from derived flows cash of future value present net by the supported was of goodwill value carrying the whether assessing basis, use in avalue on undertaken was date, areview reporting end period At the impaired. be might goodwill that indications are there if frequently more dateor reporting each at impairment for level unit cash-generating the at of goodwill value carrying the tests Group The unit. cash-generating asingle comprises division Nationals The units. cash-generating eight comprises division Regionals The Disposals (note 38) Disposals Nationals Regionals balance Opening 14 he adjustment to deferred consideration relate consideration to deferred adjustment he

capital expenditure required. The post The required. expenditure capital Goodwill 6 and for online businesses to reflect the recovery from the current cyclical downturn. cyclical current the from recovery the to reflect businesses online for and cycle investment capital of the length are extrapolated based on estimated growth rates which do not exceed the average long-term growth rates for the relevant markets. markets. relevant the for rates growth long-term average the exceed not do which rates growth estimated on based extrapolated are 0 % and 15 % and % (2008: 9.0%). The Group prepares cash flow forecasts derived from the most recently approved annual budget for 2010 for budget annual approved recently most the from derived forecasts flow cash 9.0%).% (2008: prepares Group The maturity of the relevant market relevant of the maturity and position market units cash-generating of the view management’s with vary % which . The cash flow forecasts reflect past experience of and the risk associated with each asset. Cash flows beyond beyond flows Cash asset. each with associated risk the and of experience past reflect forecasts flow cash . The - tax discount rate used at the period end reporting date was 7 datewas reporting end period the at rate used discount tax d to the reduction in the estimate of the amount payable in respect of acquisitions made made of acquisitions respect in payable amount of the estimate the in d to reduction the 8 for goodwill relating to print businesses and to 201 and businesses to print relating goodwill for ased on the Group’s sensitivity analysis, a modest amodest analysis, Group’s the on sensitivity ased .0 % (2008: 7 % (2008: Annual Report & Accounts 2009 &Accounts Report Annual Trinity Mirror plc 6 for goodwill relating to 6 projections in the range range the in projections .0 %) reflecting a long-term long-term a %) reflecting

7 77.0 7 2009 7 (0.6) 2009 (1.9) 4.5 2.2 2.3 4.5 £m £m –

71

73.9

2008 77.0 2008 74.8 77.0 . (2.7) 5.8 2.2 £m £m

–

Financials Governance Business review Who we are Trinity Mirror plc 72 Annual Report & Accounts 2009 Notes to the consolidated financial statements continued 15 Other intangible assets Customer Publishing relationships rights and domain Group and titles names total £m £m £m Cost At 30 December 2007 1,822.8 39.8 1,862.6 Acquisitions – 2.7 2.7 At 28 December 2008 1,822.8 42.5 1,865.3 Disposals (note 38) – (1.1) (1.1) At 3 January 2010 1,822.8 41.4 1,864.2 Accumulated amortisation At 30 December 2007 (775.0) (13.4) (788.4) Impairment (190.0) – (190.0) Amortisation – ( 7.3) ( 7.3) At 28 December 2008 (965.0) (20.7) (985.7) Amortisation – ( 7.1) ( 7.1) At 3 January 2010 (965.0) (27.8) (992.8)

Carrying amount At 28 December 2008 8 57.8 21.8 879.6 At 3 January 2010 857.8 13.6 871.4

The Group tests the carrying value of publishing rights and titles with indefinite economic lives at the cash-generating unit level for impairment at each reporting date or more frequently if there are indications that publishing rights and titles might be impaired. The directors consider publishing rights and titles have indefinite economic lives due to the historic longevity of the brands and the ability to evolve the brands in the ever changing media landscape. It is not practicable to review individual publishing rights and titles due to the interdependencies of the inflows within the cash-generating units. The impairment review of the carrying value of the Group’s publishing rights and titles performed at the period end reporting date indicated that no impairment was required (2008: an impairment charge was required in respect of the cash-generating units of the Midlands and the South both of which are included in the Regionals business segment). The impairment review was based on comparing carrying value with value in use. The impairment charge in 2008 reduced the carrying value of the publishing rights and titles of the cash-generating unit relating to the Midlands by £161.0 million and to the South by £29.0 million before tax. Net of tax, the impairment reduced the carrying value of the publishing rights and titles by £136.8 million. The impairments arose due to declining profits in the respective cash-generating units as a result of advertising revenue falls. The customer relationships and domain names included above have estimated useful lives of between five and 10 years and are tested at the cash-generating unit level for impairment at each reporting date or more frequently if there are indications that customer relationships and domain names might be impaired. of level the and rates growth cost and rate, revenue discount the regarding those are calculations use in value the in used key assumptions The names. domain and relationships to 205 periods of respect in projections flow cash using assets, those from derived flows cash of future value present net on based was use in Value supported. were names domain and relationships customer titles, and rights of publishing value carrying the whether to assess use in value to determine undertaken was dateareview reporting end period At the unit. cash-generating asingle comprises division Nationals The units. cash-generating eight comprises division Regionals The Total The sensitivity of the impairment review to changes in key assumptions is set out in note in 14. out set is key in assumptions to changes review impairment of the sensitivity The 2.5%. 0% and between vary used rates growth perpetuity The between 2011 the in rates growth 2010 for revenue then to 201 and performance forecast current our We assumed have appropriately replacement. Management believespress printing including itrequired, is investment capital appropriate of cycle the reflect to forecast been have flows to cash expenditure forecast Capital markets. for a period of greater than five years for print 201 beyond businesses to most 8.0 rate is discount pre- equivalent The thereafter. 2010 for budget projections and annual approved recently most the from derived forecasts flow cash prepares Group of 2.5 The to ratio EBITDA times. debt along-term assuming value enterprise end period the on based mix debt and equity Regionals follows: as is segment by business analysed assets intangible of other value carrying The 15 Nationals

post-tax discount rate used at the period end reporting date was 7.0% datewas reporting end 7.0%) (2008: period the at rate used long-term a discount post-tax reflecting The required. expenditure capital Other intangible assets continued assets intangible Other 0 % and 15 % and 6 are extrapolated based on estimated growth rates which do not exceed the average long-term growth rates for the relevant reflect the length of the capital investment cycle. investment capital of the length the reflect % (2008: 9.0%). The cash flow forecasts reflect past experience of and the risk associated with each asset. Cash flows maturity of the relevant market relevant of the maturity and position market units cash-generating of the view management’s with vary % which

Publishing and titles and 210.8 857.8 647.0 rights £m

relationships and domain Customer names 13.6 13.6 £m –

8 for publishing rights and titles and to 201 and titles and rights publishing for 224.4 871.4 647.0 Total 2009 £m

Publishing and titles and 210.8 57.8 8 47.0 6 rights Annual Report & Accounts 2009 &Accounts Report Annual Trinity Mirror plc £m

6 projections in the range range the in projections relationships and domain Customer

names 21.8 21.8 £m 6 for customer for –

73 tax tax 232.6 879.6 47.0 6

2008 Total

£m .

Financials Governance Business review Who we are Trinity Mirror plc 74 Annual Report & Accounts 2009 Notes to the consolidated financial statements continued 16 Property, plant and equipment

Land and buildings Plant and Assets under Freehold Leasehold equipment construction Total £m £m £m £m £m Cost At 30 December 2007 203.4 23.4 361.5 57.7 646.0 Additions 2.2 0.1 41.2 10.6 54.1 Acquisition of subsidiary undertakings – – 0.2 – 0.2 Disposals – (2.3) – – (2.3) Reclassification 5.7 3.0 45.9 (54.6) – Write-off of assets (6.7) (2.6) (61.5) – (70.8) At 28 December 2008 204.6 21.6 3 87.3 13.7 627. 2 Additions 1.2 – 6.2 6.6 14.0 Disposal of subsidiary undertakings – – (0.1) – (0.1) Disposals (2.2) (0.1) – – (2.3) Reclassification 7.6 4.4 (1.7) (10.3) – Write-off of assets – (4.0) (76.0) (0.1) (80.1) At 3 January 2010 211.2 21.9 315.7 9.9 558.7 Accumulated depreciation and impairment At 30 December 2007 (21.6) (13.8) (163.4) – (198.8) Impairment charge – – (14.3) – (14.3) Charge for the period (4.0) (1.1) (32.9) – (38.0) Acquisition of subsidiary undertakings – – (0.2) – (0.2) Disposals – 2.0 – – 2.0 Reclassification (2.9) 2.9 – – – Write-off of assets 6.7 2.6 61.5 – 70.8 At 28 December 2008 (21.8) ( 7.4) (149.3) – (178.5) Charge for the period (4.9) (0.9) (31.0) – (36.8) Disposal of subsidiary undertakings – – 0.1 – 0.1 Disposals 0.2 – – – 0.2 Write-off of assets – 3.7 75.8 – 79.5 At 3 January 2010 (26.5) (4.6) (104.4) – (135.5)

Carrying amount At 28 December 2008 182.8 14.2 238.0 13.7 448.7 At 3 January 2010 184.7 17.3 211.3 9.9 423.2

Included within the carrying amount of property, plant and equipment is £nil (2008: £2.8 million) in respect of assets under finance leases. Depreciation for the period on those assets was £0.9 million (2008: £1.7 million). Finance leases were secured on the assets leased.

2009 2008 £m £m Capital commitments Expenditure contracted for but not provided in the consolidated financial statements 2.4 9.8 of results of associates wa of associates of results share the in included 2008, In made. adjustments end year appropriate with used been have 2009 of December to end up the accounts 3 ended year the for of Limited Group statements PA financial audited the of accounting, method equity the applying of year.purposes each the For up to made December are 31 of Limited Group statements PA financial The PA Group Limited PA Group Closing balance equity in recognised losses of actuarial Share years of prior respect in adjustment of tax Share (note items 8) Non-recurring items non-recurring before Results of associates: of results Share Other receivables Other income accrued and Prepayments receivables trade Net receivables doubtful for Allowances receivables trade Gross receivables other and Trade 19 consumables and materials Raw 18 period the for Group’s of results share period the for Profit/(loss) Total assets balance Opening Wales. and England in a21.54% incorporated has Group agency The anews PA in Limited, interest Group 17 The Group consumed £ consumed Group The Revenue assets Group’s of net share assets Net Total liabilities Investment in associates in Investment Inventories Other financial assets financial Other 120.2 s a £1.8 million after tax non-recurring charge. non-recurring tax s a£1.8 after million million (2008: £124.0 (2008: period. the million during of inventories million) December 2008 together with the management management the with together 2008 1 December

Annual Report & Accounts 2009 &Accounts Report Annual Trinity Mirror plc

(32.4) 84.2 62.0 85.6 95.6 29.6 78.6 15.1 2009 2009 2009 2009 (5.6) (1.7) 2.4 6.3 6.3 5.9 0.5 0.5 1.9 7.5 £m £m £m £m – – 75

102.5 121.6 107.8

(34.1) 83.8 69.2 16.0 2008 2008 2008 2008 35.1 (0.2) (5.3) (9.3) (2.0) (1.8) 9.4 3.1 0.1 7.5 7.5 7.6 £m £m £m £m –

Financials Governance Business review Who we are Trinity Mirror plc 76 Annual Report & Accounts 2009 Notes to the consolidated financial statements continued 19 Other financial assets continued Net trade receivables Gross trade receivables net of allowances for doubtful receivables at the reporting date amounted to £78.6 million (2008: £102.5 million). The average credit period taken on sales of goods is 37 days (2008: 41 days). No interest is charged on the receivables. The Group has provided fully for all receivables over 120 days because historical experience is such that these receivables are generally not recoverable. Trade receivables less than 60 days and between 60 days and 120 days are provided for based on specific circumstances and by reference to past default experience. Before accepting any new customers, the Group, where appropriate, uses an external credit scoring system to assess the potential customer’s credit quality and defines credit limits by customer. Limits attributed to customers are reviewed during the period where appropriate. There are no customers who represent more than 10% of net trade receivables in either period. Included in net trade receivables balance are debtors with a carrying amount of £1.7 million (2008: £4.4 million) which are past their due date at the reporting date for which the Group has not provided as there has not been a significant change in credit quality and the amounts are still considered recoverable. The Group does not hold any collateral over these balances. The average age of these receivables is 82 days (2008: 83 days).

2009 2008 Ageing of past due but not impaired receivables £m £m 60–90 days 1.6 3.6 90–120 days 0.1 0.8 Total 1.7 4.4

2009 2008 Movement in allowance for doubtful debts £m £m Opening balance 5.3 4.5 Impairment losses recognised 8.8 1.6 Utilisation of provision (8.5) (0.8) Closing balance 5.6 5.3

In determining the recoverability of a trade receivable, the Group considers any change in the credit quality of the trade receivable from the date credit was initially granted up to the reporting date. The concentration of credit risk is limited due to the customer base being large and unrelated. Accordingly, there is no further credit provision required in excess of the allowance for doubtful debts. There are no significant amounts included in the allowance for doubtful debts relating to impaired trade receivables which have been placed under liquidation. The impairment recognised represents the difference between the carrying amount of these trade receivables and the present value of the expected liquidation proceeds. The Group does not hold any collateral over these balances.

2009 2008 Ageing of impaired receivables £m £m Less than 60 days 2.1 1.0 60–90 days 0.9 0.8 90–120 days 0.6 0.9 120+ days 2.0 2.6 Total 5.6 5.3

The carrying amount of trade and other receivables approximates their fair value.

2009 2008 Cash and cash equivalents £m £m Total 61.2 20.6

Cash and cash equivalents comprise cash held by the Group and short-term bank deposits with an original maturity of one week or less. The carrying amount of these assets approximates their fair value. The Group’s obligations under finance leases were secured by the lessors’ right over the leased assets disclosed in notein 16. disclosed assets leased the over right lessors’ by the secured were leases finance under Group’sThe obligations amount. carrying their approximated obligations Group’s of the value lease fair The rate risk. interest value to fair Group the exposed thus and 6.18%. datewas date contract reporting at the fixed were prior rates rate the at Interest interest effective The payments. rental contingent for into entered been had arrangements no and basis repayment afixed on were leases All years. four datebeing reporting prior the at term lease average the with sterling in denominated were obligations lease All repaid. were leases Group’s of the all finance period the During (shown under non-current liabilities) non-current under (shown 12 after months settlement for due Amounts obligations of lease value Present (shown under current liabilities) current under (shown 12 within months settlement for due Amounts charges finance future Less years five After payables Other income deferred and Accruals taxes other and security Social Within two to years five two Within year one Within leases: finance under payable Amounts 21 value. fair to their approximates payables of trade amount carrying The timeframe. credit the within paid are payables all that to ensure place in policies management risk financial has Group The rates. interest various at balances outstanding the on charged is interest Thereafter, invoice. 33 is purchases trade for taken period credit average The costs. ongoing and purchases trade for outstanding amounts comprise principally Trade payables Trade payables payables other and Trade 20 Obligations under finance leases finance under Obligations Other financial liabilities financial Other days (2008: 40 days). For most suppliers no interest is charged on the trade payables for the first 60 days from the date of the date of the the from days 60 first the for payables trade the on charged is interest no days). suppliers 40 (2008: days most For Minimum lease payments 2009 £m – – – – – –

Minimum lease payments 10.6 2008 11.1 (0.5) 0.6 3.1 7.4 £m

Present value of minimum lease payments 2009 £m – – – – – – – –

Present value of minimum lease payments Annual Report & Accounts 2009 &Accounts Report Annual Trinity Mirror plc 10.6 10.6 200 (3.0) 0.5 3.0 7.6 £m 7.1 – 8

Future minimum non-cancellable receipts under subleases sublease

11 8 13.3 2009 2009 4.8 8.4 5.6 9.1 £m £m – – – –

Future minimum non-cancellable non-cancellable 77 receipts under subleases sublease 143.0 45.2

2008 200 81.5

8.3 0.2 8.0 0.1 0.1 £m £m – 8

Financials Governance Business review Who we are Trinity Mirror plc 78 Annual Report & Accounts 2009 Notes to the consolidated financial statements continued 22 Deferred tax assets and liabilities The following are the major deferred tax assets and liabilities recognised by the Group and movements thereon:

Other Accelerated short-term Rolled-over Retirement tax timing and held-over benefit Share-based depreciation differences gains Intangibles obligations payments Total £m £m £m £m £m £m £m At 30 December 2007 64.4 (10.8) 1.4 301.0 (35.1) (0.7) 320.2 Acquisition of subsidiary undertakings – – – 0.6 – – 0.6 Charge/(credit) to consolidated income statement 8.4 15.7 – (55.3) (0.2) 0.5 (30.9) Credit to equity – – – – (22.6) – (22.6) At 28 December 2008 72.8 4.9 1.4 246.3 (57.9) (0.2) 267.3 Credit to consolidated income statement (2.1) (2.2) – (2.3) (0.1) (0.2) (6.9) Credit to equity – – – – (25.0) – (25.0) At 3 January 2010 70.7 2.7 1.4 244.0 (83.0) (0.4) 235.4

Certain deferred tax assets and liabilities have been offset. The following is the analysis of the deferred tax balances in the consolidated balance sheet:

2009 2008 £m £m Deferred tax liabilities 318.8 325.4 Deferred tax assets (83.4) (58.1) 235.4 267.3

At the reporting date, the Group has unused tax losses of £11.9 million (2008: £10.4 million) available for offset against future profits in respect of the hotgroup business. No deferred tax asset has been recognised in respect of the tax losses due to the unpredictability of future profit streams. The tax losses can be carried forward indefinitely. The provisions have been analysed between current and non-current as follows: as non-current and current between analysed been have provisions The 2010 3January At Utilisation of provisions Utilisation Released to consolidated income statement income to consolidated Released statement income to consolidated Charged At 28 December 2008 At 28 December Utilisation of provisions Utilisation Released to consolidated income statement income to consolidated Released Charged to consolidated income statement income to consolidated Charged Transfer from accruals Transfer from At 30 December 2007 December At 30 23 This provision is expected to be utilised during the next period. next the during to utilised be expected is provision This measures. reduction of cost delivery the in incurred severance restructuring to non-recurring the relates provision restructuring The leases. of the term remaining the over utilised be will provision This properties. vacant and let to occupied, related costs committed future and leases property to onerous relates provision property The of awards. crystallisation to future the attached obligations Insurance to National relates provision payments share-based The Non-current Current is held shares of ordinary proportion and activity principal of incorporation, country name, including subsidiaries, principal of the A list 25 under for accounted been not has Limited Group’sfish4 in The interest Limited. fish4 in holding a50% 50%) (2008: has equity Group The 24

given Joint ventures Joint Principal subsidiaries Provisions

the

in

equity method on the grounds of immateriality. grounds the on method equity note 15 in the notes to the parent company financial statements. financial note company 15 to parent notes the the in Share-based payments 1.2 0.2 0.6 0.4 1.0 £m – – – – – Property 10.4 Annual Report & Accounts 2009 &Accounts Report Annual Trinity Mirror plc 12.9 (4.3) (1.2) (0.1) (4.1) 9.8 2.8 7.5 £m – Restructuring

(23.9) (15.9) 10. 2009 17.3 22.4 18.5 11.5 (0.5) (0.4) 5.7 7. 3.5 2.0 £m £m 1 2 79

(28.0) (20.2) Total 30.3 17.3 25.4 25.4 13.9 10.6 2008 14.8 21.5 (0.6) (1.6) 2.0 £m £m

Financials Governance Business review Who we are Trinity Mirror plc 80 Annual Report & Accounts 2009 Notes to the consolidated financial statements continued 26 Notes to the consolidated cash flow statement 2009 2008 £m £m Operating profit/(loss) 87.0 (88.4) Depreciation of property, plant and equipment 36.8 38.0 Amortisation of other intangible assets 7.1 7.3 Share of results of associate (0.5) 2.0 Impairment of other intangible assets – 190.0 Impairment of fixed assets – 14.3 Charge for share-based payments 3.2 4.0 Profit on disposal of land and buildings (5.1) (4.6) Loss/(profit) on disposal of businesses 2.4 (0.3) Pension funding in excess of income statement charge* (26.5) (63.6) Operating cash flows before movements in working capital 104.4 98.7 Decrease/(increase) in inventories 1.7 (0.8) Decrease in receivables 23.6 23.8 Decrease in payables (32.1) (19.4) Cash flows from operating activities 97.6 102.3

*In 2008, this included £53.8 million of special contributions. 27 Borrowings 2009 2008 £m £m Bank facility – (10.0) Loan notes (355.0) (388.3) Derivative financial instruments (note 28) (6.0) (2.1) (361.0) (400.4) The borrowings are repayable as follows: or within one year (3.1) (12.1) In the second year (137.7) – In the third year (65.7) (146.1) In the fourth year (50.2) (70.9) In the fifth year (41.3) (64.9) After five years (63.0) (106.4) (361.0) (400.4) The borrowings are included in the consolidated balance sheet as follows: Amount included in non-current liabilities (357.9) (388.3) Amount included in current liabilities (3.1) (12.1) (361.0) (400.4)

The amount included in non-current liabilities represents borrowings of £355.0 million (2008: £388.3 million) and derivative financial instruments of £2.9 million (2008: £nil) and in current liabilities represents borrowings of £nil (2008: £10.0 million) and derivative financial instruments of £3.1 million (2008: £2.1 million). Non-current assets include £nil (2008: £41.7 million asset) relating to derivative financial instruments which is deducted from borrowings to calculate net debt in note 29. The effective interest rates at the reporting date are as follows: as dateare reporting the at rates interest effective The which of respect in facilities borrowing £178.5 2010 available committed had £163.5 (2008: Group of the undrawn At 3January million million) notes loan placement private US and facility bank overdrafts, bank The indicated. otherwise unless sterling in denominated are borrowings All represent not do values date. These reporting the at value fair at disclosed are rate swaps interest cross-currency the rate and date exchange are swaps cross-currency and notes loan the applied, been not has 39 IAS under accounting hedge As rate swaps. interest cross-currency use of the through rate sterling intofloating swapped notes were loan denominated US$ on the rateinterest fixed and repayments capital datethe issue the 2002. On 2001 in and issued were million £26 and million US$522 totalling notes loan placement private US The notes £10 loan million notes £16 loan million US$252 million loan notes loan US$252 million Closing balance Non- Repayments retranslation on gain/(loss) exchange Foreign Finance leases notes loan £ denominated notes loan denominated US$ Bank facility notes loan US$270 million notes: loan of Composition balance Opening period: the in movement notes Loan 27 book values and are not repeated in this analysis. this in repeated not are and values book the from different notematerially in not are 28, instruments financial derivative excluding liabilities, and assets financial of other value fair The risk. credit includes that factor discount appropriate an using discounted been have flows cash future the notes loan of the value fair the estimating In Finance leases £ denominated loan notes loan £ denominated notes loan denominated US$ notes loan commercial and facility bank overdrafts, Bank date is as follows: as date is reporting at the estimate rate.The market at the flows cash future their by discounting estimated is Group’s of the value borrowings fair The

Borrowings shown separately in accordance with IAS 39. The loan notes are disclosed at amortised cost and translated into sterling at the reporting the at into sterling translated and cost amortised at disclosed are notes loan 39. The IAS with accordance in separately shown cash movements cash

are unsecured. are all conditions precedent had been met. been had precedent conditions all

the amounts required to repay the loan notes or cancel the related cross-currency interest rate swaps. interest cross-currency related the cancel or notes loan the to repay required amounts the continued Annual Report & Accounts 2009 &Accounts Report Annual Trinity Mirror plc (388.3) (355.0) (355.0) (329.0) (168.4) (160.6)

(26.0) (16.0) (10.0) 33.3 7.22 6.75 2009 2009 2009 2009 £m £m £m % – – – – – –

81 (388.3) (388.3) (362.3) (342.2) (104.2) (184.7) (177.6)

(26.0) (16.0) (10.0) (10.0) (10.6) 58.2 5.34 6.75 2008 2008 2008 2008 .22 7. 6.18

(0.1) £m £m £m %

Financials Governance Business review Who we are Trinity Mirror plc 82 Annual Report & Accounts 2009 Notes to the consolidated financial statements continued 28 Derivative financial instruments The movement in the derivative financial instruments is as follows:

2009 2008 £m £m Opening asset/(liability) 39.6 (103.7) Movement in fair value (45.6) 140.1 Repayments – 3.2 Closing (liability)/asset (6.0) 39.6

The derivative financial instruments are included in the consolidated balance sheet as follows:

2009 2008 £m £m Non-current liabilities (2.9) – Current liabilities (3.1) (2.1) Non-current assets – 41.7 (6.0) 39.6

The Group has cross-currency interest rate swaps to manage its exposure to foreign exchange movements and interest rate movements on the US private placement loan notes. Fair value is calculated using discounted cash flows based upon forward rates available to the Group. In October 2008, certain derivative financial instruments matured and were settled and the fair value change up to the settlement date was included in the movement in fair value. In October 2008, an interest rate swap was entered into which converted the floating rate interest payments on £180.0 million of principal into fixed for a period of 12 months to October 2009. In April 2009, it was agreed with the counterparties in respect of £135.0 million of principal to extend the settlement date until October 2010. The fair value change from the prior period end up to the reporting date has been included in the movement in fair value. In October 2009, the swap in respect of £45.0 million principal was settled on the due date. The fair value change from the prior period end up to the settlement date has been included in the movement in fair value.

29 Net debt The statutory net debt for the Group is as follows:

Consolidated Other income Loans non-cash 2008 Cash flow statement* repaid changes 2009 £m £m £m £m £m £m Non-current liabilities Loan notes (388.3) – 33.3 – – (355.0) Derivative financial instruments – – (2.9) – – (2.9) Obligations under finance leases ( 7.6) – – 7.6 – – (395.9) – 30.4 7.6 – (357.9) Current liabilities Bank facility (10.0) – – 10.0 – – Derivative financial instruments (2.1) – (1.0) – – (3.1) Obligations under finance leases (3.0) – – 2.2 0.8 – (15.1) – (1.0) 12.2 0.8 (3.1) Non-current assets Derivative financial instruments 41.7 – (41.7) – – – 41.7 (41.7) – – – Current assets Cash and cash equivalents 20.6 40.6 – – – 61.2 20.6 40.6 – – – 61.2 Net debt (348.7) 40.6 (12.3) 19.8 0.8 (299.8)

*The impact on the loan notes of translation into sterling at the reporting date exchange rate and the impact on the derivative financial instruments of being stated at fair value at the settlement date or at the reporting date are included in the consolidated income statement within finance costs as set out in note 10. Cash and cash equivalents represent the sum of the Group’s bank balances and cash in hand at the reporting date. £101.8 was paid 33,791,214 and back bought consideration were 33,333,279 cash 2008, shares The During cancelled. were programmes. The capital redemption reserve represents the nominal value of the shares purchased and subsequently cancelled under 2010 share 3January At buy-back follows: as debt net to contracted the reconciles debt net statutory The cost of the asset and the revaluation reserve has been transferred to retained earnings and other reserves. other and earnings to retained transferred been has reserve revaluation the and asset of the cost to the be deemed were properties of freehold amounts revalued to the IFRS, to transition £25.9 (2008: 1998 On million). £25.9prior is million (2008: at £ reserves other and earnings retained in included are Benefit Trust Employees’ Trinity Mirror by the purchased Shares Credit to equity for equity settled share-based payments share-based settled equity for to equity Credit Net debt Net Total recognised income and expense and income Total recognised 2008 At 28 December equivalents cash and Cash assets Current Credit to equity for equity settled share-based payments share-based settled equity for to equity Credit leases finance under Obligations Buy-back shares cancelled shares Buy-back instruments financial Derivative Bank facility Current liabilities Dividends Total recognised income and expense and income Total recognised 2007 December At 30 reserves and capital 30 Share leases finance under Obligations notes Loan Non-current liabilities follows: as to is maturity, prior terminated not are rate swaps interest cross-currency the and notes loan placement private the that assuming Group, the for debt net contracted The 29 Loan notes at period end exchange rate rate exchange end period at notes Loan debt net Statutory Loan notes at swapped exchange rates Contracted net debt net Contracted Cross-currency interest rate swaps interest Cross-currency Net debt continued debt Net

£11.9 million), classified as Treasury Shares. Cumulative goodwill written off to reserves in respect of continuing businesses acquired acquired businesses continuing of respect in reserves to off written goodwill £11.9Cumulative Shares. as Treasury classified million), million. The cancelled shares had a par value of £3.3 million. value apar had shares cancelled The million. (384.2) (389.7) (382.1) (15.1) 20.6 (10.0) 20.6 2008 (3.0) 7.6) ( (2.1) £m

Cash flow Cash capital (25.8) Share (25.8) 40.6 40.6 (29.1) 40.6 3.3 £m £m – – – – – – – – – – – –

Consolidated statement (1,120.5) premium (1,120.5) (1,120.5) income Share (1.0) (1.0) (1.0) £m £m – – – – – – – – – – – – –

redemption reserve Capital repaid Loans 12.2 19.8 Annual Report & Accounts 2009 &Accounts Report Annual Trinity Mirror plc 10.0 (4.3) (3.3) (4.3) (1.0) 7.6 2.2 £m £m 7.6 – – – – – – – – –

other reserves earnings and earnings non-cash Retained changes (355.0)

299.8 324.0 382.1 661.4 100.3 298.7 615.9 Other 172.1 48.5 48.4 2009 10.6 (2.9) (3.0) (3.6) 0.8 0.8 0.8 £m £m £m – – – – – – –

million 83 (489.2) (324.0) (382.1) (382.1) (388.3) (534.7) (851.9) 384.2 348.7 100.3 382.1 172.1 61.2 61.2 48.5 Total 48.4 2009 2008 41.7 (3.1) (3.1) (3.0) (3.6) £m £m £m – – –

Financials Governance Business review Who we are Trinity Mirror plc 84 Annual Report & Accounts 2009 Notes to the consolidated financial statements continued 31 Called-up share capital 2009 2009 2008 2008 Number £m Number £m Authorised Ordinary shares of 10 pence each 450,000,000 45.0 450,000,000 45.0

2009 2009 2008 2008 Number £m Number £m Allotted, called-up and fully paid ordinary shares of 10 pence each Opening balance 257,690,355 25.8 291,481,569 29.1 Shares issued 165 – – – Shares cancelled – – (33,791,214) (3.3) Closing balance 257,690,520 25.8 257,6 9 0,3 5 5 25.8

The Company has one class of share capital, being ordinary shares with a nominal value of 10 pence each. The Company’s ordinary shares give the shareholders equal rights to vote, receive dividends and to the repayment of capital. There are no restrictions on these shares in relation to the distribution of dividends and the repayment of capital. During the period, 165 shares were issued under the Group’s Savings-Related Share Option Scheme at a price of 453.3 pence per share. During the prior period, 33,333,279 shares were bought back and cancelled and 457,935 shares were cancelled having been bought in 2007 and held to be cancelled at the 2007 period end. The total number of shares cancelled during 2008 was 33,791,214 for a par value of £3.3 million. An employee benefit trust administered by the trustee Barclays Wealth Trustees (Guernsey) Limited holds shares of the Company for subsequent transfer to employees under a restricted share plan. At 3 January 2010 the trust held 90,855 shares (2008: 90,855), with a carrying value of £445,523 (2008: £445,523) and a market value of £136,828 (2008: £45,428) in the Company, none of which (2008: none) had options granted over them under the restricted share plan. Dividends on the shares are payable at an amount of 0.01 pence (2008: 0.01 pence) per share. Shares held by the trust have been excluded from the weighted average number of shares used in the calculation of earnings per share. The lowest closing price of the shares during the year was 19.8 pence (2008: 29.3 pence) and the highest closing price was 192.0 pence (2008: 348.5 pence). The closing share price as at the reporting date was 150.6 pence (2008: 50.0 pence).

Share option schemes Under the terms of the Group’s various share option schemes, the following options to subscribe for shares were outstanding:

Number Exercise Exercise Scheme Grant dates of shares prices dates Executive approved 2000–2003 131,465 396–544p May 2003–Aug 2013 Executive unapproved 2000–2003 851,563 396–544p May 2003–Aug 2013

Long-Term Incentive Plan and Deferred Share Award Plan The Long-Term Incentive Plan (LTIP) was approved by shareholders at the Annual General Meeting on 6 May 2004 and an employee benefit trust was established in Jersey and is administered by the trustee Appleby Trust (Jersey) Limited. An amendment to the LTIP rules was approved by shareholders at the Annual General Meeting on 4 May 2006 and a new plan, the Deferred Share Award Plan (DSAP), was also approved. At the reporting date the trust holds shares of the Company for subsequent transfer to employees under the terms of the LTIP as Performance Share awards if they vest on 5 April 2010, 14 March 2011 and 3 April 2012 and under the terms of the DSAP as Deferred Share awards if they vest on 5 April 2010, 14 March 2011 and 3 April 2012. The exercise price of the granted awards is £1 for each block of awards granted. At the reporting date, the trust held 1,725,338 shares (2008: 1,940,090 shares) with a carrying value of £10,582,768 (2008: £11,900,000) and a market value of £2,921,776 (2008: £970,045). In addition, the trust holds cash to purchase future shares of £554,122 (2008: £549,896). The costs associated with the trust are included in the consolidated income statement as they accrue. Shares held by the trust have been excluded from the weighted average number of shares used in the calculation of earnings per share. Movements in share options granted pre 7 November 2002 are as follows: as are 2002 7November pre granted options share in Movements Lapsed during the year the during Lapsed of period start at outstanding Options is ranking Company’s the unless place take will of options vesting No companies. media 20 other of about agroup with return shareholder of total to acomparison subject 50% is other The dateof grant. the on of companies Mid-250 index FTSE the against comparison return to atotal shareholder subject is individual to each option of an grant 50% of each addition, In performance. share per of earnings achievement and participant of the employment to continued the subject dateof grant the 10 from and three years between exercisable are Options 7 after instruments of equity grants to all provisions transitional the with accordance 2in of IFRS requirements the applied has Group The Long of the introduction However, the following options. granted are management senior and directors executive which under scheme option share existing an operates Company The scheme option share Executive period. the during payments to £4.0 (2008: share-based related of million) £3.2million acharge recognised Group The 34 years five After years five than less and one than Later year one Within year one Within leases: operating non-cancellable under Total commitments 33 Closing balance period the in allotted shares ordinary on Premium balance Opening 32 average contractual life of one life contractual average of 497.5 price exercise 2010 average aweighted had 3January at outstanding options The 74.5 was period the during lapsed options share for dateof lapse the at price share average weighted The period of end at outstanding Options years five After years five than less and one than Later Total Total

November 2002 that had not vested as of 3 January 2005. of 3 January as vested not had that 2002 November at Share premium account premium Share Share-based payments Share-based leaseOperating commitments

least median. with tenants under non-cancellable property operating leases: operating property non-cancellable under tenants with payments lease minimum future year (2008: two (2008: year years). There were no share options exercised during the current or prior period. prior or current the during exercised options share no were years). There Term Incentive Plan in 2004, no further options have been granted under this scheme. this under granted been have options further no 2004, in Plan Term Incentive equipment plant and plant Vehicles, 2009 pence (2008: 484.8 pence) and a weighted aweighted and 484.8 (2008: pence) pence 3.5 1.9 1.6 £m –

Property 25.8 34.5 pence (2008: 209.9 pence). 209.9 (2008: pence). pence 70.4 10.1 Annual Report & Accounts 2009 &Accounts Report Annual Trinity Mirror plc 2009 £m

( 1,992,600 1,193,920 798,680 equipment 1,120.5 1,120.5 plant and plant Vehicles,

10.7 2009 2009 2009 2008 4.9 3.7 2.1 5.2 3.4 Options granted pre granted Options 1.8 £m £m £m £m 7 November 2002 7 November – – )

85 2,453,546 1,992,600 (460,946)

1,120.5 1,120.5 Property

90.6 39.3 39.8 22.0 2008 2008 2008 2008 11.5 9.5 9.4 3.1 £m £m £m £m

–

Financials Governance Business review Who we are Trinity Mirror plc 86 Annual Report & Accounts 2009 Notes to the consolidated financial statements continued 34 Share-based payments continued Details of the share options outstanding and the weighted average exercise price of options granted post 7 November 2002 are as follows:

Number of options Exercise price Granted post 7 November 2002: – 28 February 2003 184,348 395.5p

Movements in share options granted post 7 November 2002 are as follows:

Options granted Options granted 28 February 2003 7 August 2003 2009 2008 2009 2008 Options outstanding at start of period 505,689 505,689 653,368 801,414 Lapsed during the year (321,341) – (653,368) (148,046) Options outstanding at end of period 184,348 505,689 – 653,368

The weighted average share price at the date of lapse for share options lapsed during the period was 68.5 pence (2008: 236.8 pence). The options outstanding at 3 January 2010 had a weighted average exercise price of 395.5 pence (2008: 448.0 pence) and a weighted average contractual life of three years (2008: four years). There were no share options exercised during the current or prior period. The estimated fair values at the date of grant of the share options granted post 7 November 2002 are as follows:

£ 28 February 2003 375,145

These fair values were calculated using a stochastic (Monte-Carlo binomial) model at the date of grant. The inputs to the model were as follows:

Options granted 28 February 2003 Expected volatility (%) 27.0 Expected life (years) 6.0 Expected dividend yield (%) 4.4 Risk-free rate (%) 3.9

Expected volatility was determined by calculating the historical volatility of the Company’s share price over a period prior to the grant date that is commensurate with the length of the expected life of the option. The expected life of the options used in the model is a weighted average driven by simulated share price movements in the model.

Long-Term Incentive Plan and Deferred Share Award Plan Under these schemes, the Remuneration Committee can recommend the grant of awards of shares to an eligible employee. From 2006, awards have taken the form of Performance Shares or Deferred Shares. Prior to 2006 awards took the form of Performance Shares and Matching Shares. All awards prior to 2006 have lapsed. Full details of how the schemes operate are explained on page 48 of the Remuneration report. The vesting period is three years and is subject to continued employment of the participant. The Performance Shares granted in 2007, 2008 and 2009 vest if targets measuring the Company’s total shareholder return against the performance of a comparator group of companies are met. The Deferred Shares have no performance conditions. share 137.9 was period the during average 198.0 (2008: weighted lapsed pence The pence). options the for price share average weighted The period of end at outstanding Awards Deferred Shares Deferred Shares Performance period the during Granted of period start at outstanding Awards was: period the during Shares Deferred and Shares Matching Shares, of Performance number the in movement The 34 Lapsed during the period the during Lapsed period the during Exercised of period start at outstanding Options (%) volatility Expected Awards outstanding at end of period of end at outstanding Awards the for and model binominal) (Monte-Carlo a stochastic using calculated were Shares Matching and Shares Performance the for values fair The period the during Lapsed The movement in the number of shares under option during the period was: period the during option under of shares number the in movement The date. to grant the prior period year three the over price share Company’s of the volatility historical the by calculating determined been has rate 4.4%. volatility free 3.9% risk and Expected yield dividend expected 3.25 20.3%, life years, expected volatility were: expected to model the inputs The dateof grant. the at calculation Black-Scholes £3,706,597. amodified was using options of the value fair calculated were estimated values The fair The Scheme. Option Share Savings-Related of the terms the 2,917,754 over granted under were share options per 2006, In pence of 453.3 price asubscription at shares Scheme Option Share Savings-Related £ is model the in used price exercise date. The grant the to prior period year three the over price share Company’s of the volatility historical the by calculating determined been has volatility Expected (%)Risk-free (%) yield dividend Expected (years) life Expected The estimated fair values at the date of grant of the shares awarded are as follows: as are awarded shares of the dateof grant the at values fair estimated The The The 2 was Shares Deferred the and Shares Performance the both for dateof grant the at price share The period the during Exercised Share-based payments continued payments Share-based Deferred Shares a modified Black-Scholes calculation at the date of grant. The inputs to the model for awards from 2007 were as follows: 2007from were awards for model to the inputs The dategrant. of at the calculation Black-Scholes amodified Shares Deferred

weighted weighted average share price at the date of lapse for awards lapsed during the period was 57.1 was period the during lapsed 211.0 (2008: awards for pence dateof lapse the at price share average pence). weighted

pence nil (2008: 70.5 was pence period the during exercised options the for price

average share price at the date of exercise for awards exercised during the period was 89.3 pence (2008: nil pence). nil (2008: 89.3 was pence period the during exercised awards for dateof exercise the at price share average Performance 1,008,452 1,199,765 (214,752) nil as the exercise price of the granted awards is £1 for each block of awards granted. of awards block £1 is each for awards granted of the price exercise the as nil Deferred (13,357) 36,796 Shares Award 80.5 2009 2009 3.0 2.1 –

Performance 1,345,382 2,769,046 3,301,407 (813,021) Deferred Shares Award 2009 2009 3.0 – – – –

Performance Matching ). Shares Award 2009 22.8 2008 3.9 8.0 3.0 – – – – –

Awarded in Awarded 1,199,765 194,000 546,707 8.5 709,100 (56,042) Deferred Deferred 9,000 Shares Award pence (2008: 274.0 (2008: pence pence). Annual Report & Accounts 2009 &Accounts Report Annual Trinity Mirror plc 2009 2008 2008 3.0 – – – – £

(1, 1,328,348 Performance Performance Performance 2,085,298 1,943,000 1,504,000 2,769,046 1,591,840 Awarded in Awarded (908,092) 328,183)

Shares Award (165) 2009 18.8 2008 2008 2007 3.0 5.4 4.1 – – £

87 1,850,000 2,236,652 1,328,348 1,788,000 Awarded in Awarded (908,304) (179,090) 179,090 Matching Deferred Shares Award 2008 2008 2007 2007 3.0 – – – – – – – £

Financials Governance Business review Who we are Trinity Mirror plc 88 Annual Report & Accounts 2009 Notes to the consolidated financial statements continued 35 Retirement benefit schemes Defined benefit pension schemes The Group operates 10 defined benefit pension schemes for certain employees which were closed to new employees with effect from 1 January 2003 and following an extensive consultation process the Group announced the closure of all defined benefit pension schemes to future accrual from 31 March 2010. All active members of the defined benefit pension schemes will now have the option to join the Trinity Mirror Pension Plan (‘TMPP’), a defined contribution plan, from 1 April 2010. All new employees are entitled to join the TMPP. Formal valuations of the defined benefit pension schemes are carried out regularly. The actuarial methods and assumptions used to calculate each scheme’s assets and liabilities vary according to the actuarial and funding policies adopted by their respective trustees. All of the schemes are being funded in accordance with the recommendations of the respective actuaries. The most significant of the schemes are the Mirror Group Pension Scheme (the ‘Old Scheme’), the MGN Past Service Pension Scheme (the ‘Past Service Scheme’), the MGN Pension Scheme (the ‘MGN Scheme’), the Trinity Retirement Benefit Scheme (the ‘Trinity Scheme’) and the Midland Independent Newspapers Pension Scheme (the ‘MIN Scheme’) which together represent over 95% of the aggregate market value of the schemes assets and liabilities. The full actuarial valuation of the Trinity Scheme was completed in September 2007, the MIN Scheme was completed in June 2008 and the Old Scheme, the Past Service Scheme and the MGN Scheme were completed in October 2008. The valuations did not result in an increase in the annual deficit funding payments. Following the disposals completed in 2007, agreement was reached with the trustees of the defined benefit pension schemes to make a special contribution totalling £107.5 million. On 20 December 2007 £37.5 million and on 24 December 2007 a further £16.2 million was paid into the schemes with the balance of £53.8 million paid on 4 January 2008. The Old Scheme and the Past Service Scheme cover the liabilities for service up to 13 February 1992 for employees and former employees who worked regularly on the production and distribution of Mirror Group’s newspapers. The Old Scheme was closed on 13 February 1992 and the Past Service Scheme was established to meet the liabilities, which are not satisfied by payments from the Old Scheme and the Maxwell Communications Pension Plan or by the State. The last formal valuation of these schemes was completed in October 2008 for valuation date as at 31 December 2007 and showed a deficit of £106.6 million. During 2009, £6.5 million was paid into the schemes (2008: £28.0 million). For 2010, agreement has been reached with the trustees to pay £14.1 million into the schemes. The next full actuarial valuation of the schemes is 31 December 2010. The valuation of the schemes is likely to be completed in 2011. The last formal valuations were completed in September 2007 for valuation date as at 30 June 2006 for the Trinity Scheme, in June 2008 for valuation date as at 31 March 2007 for the MIN Scheme and in October 2008 for valuation date as at 31 December 2007 for the MGN Scheme. These valuations showed deficits of £23.3 million, £28.2 million and £55.7 million respectively. During 2009 deficit funding payments (including funding in excess of the 15% employers contribution for future accrual) were £2.3 million (2008: £5.8 million), £2.4 million (2008: £12.5 million) and £4.8 million (2008: £20.0 million) respectively. For 2010, agreement has been reached with the trustees to pay £5.0 million, £2.5 million and £7.0 million respectively into these schemes. The next full actuarial valuation date for these schemes are, Trinity Scheme 30 June 2009, the MIN Scheme 31 March 2010 and the MGN Scheme 31 December 2010. During 2010, the valuation of the Trinity Scheme is likely to be agreed. The valuations of the MIN Scheme and MGN Scheme are likely to be completed in 2011. For the purposes of the Group’s annual consolidated financial statements, valuations have been performed in accordance with the requirements of IAS 19 with scheme liabilities calculated using a consistent projected unit valuation method and compared to the market value of the scheme assets at close of business on 30 December 2009, the last day prior to the period end for which such values were available. IFRIC 14 has not been adopted early, and the estimate of the impact on the deficit at 3 January 2010 being an increase of £8.3 million (2008: £21.4 million). The assets and liabilities of the most significant schemes included above as at the reporting date are:

Old Scheme/ Past Service MGN Trinity MIN Scheme Scheme Scheme Scheme £m £m £m £m Present value of scheme liabilities (733.6) (389.4) (327.5) (189.3) Fair value of scheme assets 572.6 285.2 326.2 159.2 Scheme deficits included in non-current liabilities (161.0) (104.2) (1.3) (30.1) Expected rate of salary increases rate of salary Expected Pension increases: At 30 December 2007 December At 30 2006 At 31 December Post-retirement mortality tables and future life expectancies at age 65 are: 65 age at expectancies life future and tables mortality Post-retirement assets scheme on return Actual liabilities of scheme value Actuarial Expected return on scheme assets scheme on return Expected rate Inflation rate Discount Principal annual actuarial assumptions used: are: assets scheme on return Based on actuarial advice, the assumptions used in calculating35 the scheme liabilities and the actuarial value of those liabilities and the actual At 3 January 2010 3January At 2008 At 28 December In deferment In Post 6 April 1997 6April Post pensions Pre 6 April 1997 6April Pre pensions Retirement benefit schemes continued schemes benefit Retirement (years) for (years) Future life expectancy 21.6 Male 18.6 21.4 20.1 currently

a pensioner aged 65 aged Female 24.0 23.8 23.0 21.3 Annual Report & Accounts 2009 &Accounts Report Annual Trinity Mirror plc

5.00 3.00 3.40 1,683.1

– – 213.0 – 3.50 3.50 6.90 5.00 23.4 5.70 3.75 3.75 Male 23.2 2009 2009 19.6 21.6 for a for non-pensioner £m currently aged 55 aged currently % (years) at age 65 (years)

expectancy Future life 89 3.00 3.00 4.80 1,378.8 (250.8) Female – – – 25.7 5.00 3.50 6.50 3.25 25.6 22.4 6.70 24.4 2008 2008 2.75 2.75

£m

%

Financials Governance Business review Who we are Trinity Mirror plc 90 Annual Report & Accounts 2009 Notes to the consolidated financial statements continued 35 Retirement benefit schemes continued

The amount included in the consolidated balance sheet, consolidated income statement and consolidated statement of recognised income and expense arising from the Group’s obligations in respect of its defined benefit pension schemes is as follows:

2009 2008 2007 2006 2005 £m £m £m £m £m Present value of scheme liabilities (1,683.1) (1,378.8) (1,538.5) (1,511.0) (1,535.5) Fair value of scheme assets 1,398.1 1,233.6 1,458.9 1,322.9 1,233.0 Effect of asset ceiling (11.6) (61.7) (45.2) (24.9) (3.1) Scheme deficits included in non-current liabilities (296.6) (206.9) (124.8) (213.0) (305.6)

2009 2008 £m £m Current service cost 14.6 24.1 Past service costs 0.9 2.3 Total included in staff costs 15.5 26.4 Curtailment gain (4.3) – Past service costs (5.6) – Total included in non-recurring items (9.9) – Expected return on scheme assets (76.7) (98.7) Interest cost on pension scheme liabilities 87.2 87.3 Pension finance charge/(credit) 10.5 (11.4) Total included in the consolidated income statement 16.1 15.0

2009 2008 2007 2006 2005 £m £m £m £m £m Effect of changes in actuarial assumptions on scheme liabilities (294.1) 231.9 12.9 68.1 (145.0) Experience adjustments on scheme liabilities 2.0 (23.0) 9.1 0.9 38.9 Experience adjustments on scheme assets 136.3 (349.5) (6.0) 15.5 106.8 Effect of asset ceiling 50.1 (16.5) (20.3) (21.8) (3.1) Consolidated statement of recognised income and expense (105.7) (157.1) (4.3) 62.7 (2.4)

The cumulative amount of actuarial gains and losses recognised in the consolidated statement of recognised income and expense since adoption of IFRS is losses of £171.2 million (2008: £65.5 million). Pension schemes assets include no direct investments in the Company’s ordinary shares nor any property assets occupied or other assets used by the Group for any period. The contributions made during the period totalled £32.1 million (2008: £90.0 million). The Group expects to contribute approximately £35 million to its defined benefit pension schemes in 2010. Up to 31 March 2010, the contribution rates for the Group’s most significant schemes range from 15.0% to 20.0% of pensionable salaries. Closing fair value of scheme assets scheme of value fair Closing Benefits paid Benefits contributions Employee gains/( Actuarial Closing present value of scheme liabilities scheme of value present Closing costs service Past Employee contributions Employee losses/( Actuarial Benefits paid Benefits Interest cost by employer Contributions return Expected Curtailment gain Curtailment cost service Current liabilities of scheme value present Opening liabilities: scheme of value present the in Changes assets of scheme value fair Opening assets: scheme of value fair the in Changes 35 Retirement benefit schemes continued schemes benefit Retirement losses gains ) ) Annual Report & Accounts 2009 &Accounts Report Annual Trinity Mirror plc 1,233.6 1,378.8 1,398.1 1,683.1

136.3 292.1 (86.9) (86.9) 76.7 32.1 14.6 87.2 2009 2009 (4.3) (4.7) 6.3 6.3 £m £m 91 1,538.5 1,233.6 1,458.9 1,378.8 (208.9) (349.5) (72.9) (72.9) 90.0 98.7 2008 2008 87.3 24.1 8.4 8.4 2.3 £m £m –

Financials Governance Business review Who we are Trinity Mirror plc 92 Annual Report & Accounts 2009 Notes to the consolidated financial statements continued 35 Retirement benefit schemes continued 2009 2008 £m £m Fair value of scheme assets: UK equities 290.2 250.1 US equities 76.4 66.1 Other overseas equities 227.2 183.1 Property 3.1 3.7 Corporate bonds 461.0 361.3 Fixed interest gilts 31.0 63.4 Index linked gilts 177.4 169.8 Cash 131.8 136.1 Fair value of scheme assets 1,398.1 1,233.6

2009 2008 % % Expected nominal rates of return on plan assets: Equities 8.00 7.9 0 Property 6.40 7.0 0 Corporate bonds 5.70 6.50 Fixed interest gilts 4.50 3.90 Index linked gilts 4.20 4.20 Cash 4.40 3.60

For each scheme the expected return on assets has been derived as the weighted average of the expected returns from each of the main asset classes. The expected return for each asset class reflects a combination of historical performance analysis, the forward-looking views of the financial markets as suggested by the yields available and the views of investment organisations.

Defined contribution pension schemes The Group operates two defined contribution pension schemes for qualifying employees, the Southnews Money Purchase Scheme which is closed to new members and the TMPP. The assets of the schemes are held separately from those of the Group in funds under the control of trustees. The current service cost charged to the consolidated income statement of £1.1 million (2008: £1.2 million) represents contributions payable to these schemes by the Group at rates specified in the scheme rules. Contributions that were due have been paid over to the schemes at both reporting dates. Following closure of the defined benefit pension schemes to future accrual from 31 March 2010, all active members of the defined benefit pension schemes will have the option to join the TMPP and the membership of this scheme could increase by around 3,000 from the current membership of around 900. Compliance with policies and exposure limits is reviewed by the i by the reviewed is limits exposure and policies with Compliance liquidity. of excess investment the and instruments financial non-derivative and derivatives of financial use the risk, credit rate risk, interest risk, exchange on foreign principles written provide which Board, by the approved policies by governed is derivatives of financial use The exposures. these hedge to appropriate where instruments financial derivative by using risks of these effects the to minimise seeks Group The and analysing exposures byDirector Finance degree Group the with meetings and regular magnitude through Group of the operations to the relating ofrisks risk. financial the manages These and monitors risks include market and markets risk financial (including international and to domestic access currency co-ordinates to business, the risk, services provides fair Group’s function The Treasury value interest rate risk objectives management risk Financial statement. income consolidated the through value fair as classified are instruments financial Group’s The cost. derivative amortised at held and accordingly heldare and atreceivables and amortisedloans as classified are which cost.receivables and other Tradetrade and cash are assets financial and Group’sThe significant other payables, bank overdrafts and loan notesCategories of financialare instruments all designated as other financial liabilities note in 3. disclosed are instrument, equity and liability financial asset, of financial class of each respect in recognised, are expenses and income which on basis the and measurement of basis the recognition, for criteria the including adopted, methods and policies accounting significant of the Details policies accounting Significant £178.5 the and facility. bank million notes loan placement private US the under covenants worth net on based requirements capital imposed to externally subject is Group The requirement capital imposed Externally down the of all 2009 during addition, In repaid. were facility of £10.0 the on made drawings cash million of 2009, 3.75to ratio EBITDA During times. debt net maximum a and of cover 2.5 times interest minimum a are facility to this attached covenants 2010 and 2009 financial the During amortisation. and items non-recurring before is profit Operating assets. fixed and assets of intangible impairments of the exception the with items non-recurring after stated is EBITDA equivalents. cash and cash less instruments financial derivative includes and borrowings short-term and long-term as defined is debt Net or Interest cover The Group’s Treasury function provides a monthly report to the Board covering compliance with covenants and other T other and covenants with compliance covering to Board the report amonthly provides Group’s function The Treasury Total interest expense (note 10)Total expense interest (note39) profit Operating EBITDA to debt Net EBITDA (note 29) debt Net follows: as datewere reporting the at cover interest and ratio gearing The 4.7 was 4.0). (2008: period the for Group’s cover date. The interest reporting the at considers the cost of capital review, Board of this the part As cover, interest required. and as and of gearing the level the including risks structure, capital the reviews associated Board The with each class of capital. The Group’s ratio Gearing net debt to EBITDA ratio is 2.5 (2008: 2.2) (note 30). reserves and capital share comprising parent, of the holders to equity attributable (note 19) equity and equivalents (note cash 27), and borrowings cash the includes which of debt, consists Group of the structure capital The equity. and of debt balance optimal an through to shareholders The Group manages its capital to ensure management risk thatCapital entities in the Group will be able to continue as a going concern 36 while maximising the return

trade financial instruments, including derivative financial instruments, for speculative purposes. speculative for instruments, financial derivative including instruments, financial trade Financial instruments Group finance leases were repaid in full. As a result of repayment of the Newcastle press finance lease the related guarantee drawn drawn guarantee related the lease finance press Newcastle of the repayment of result As a full. in repaid were leases finance Group

price risk), credit risk, liquidity risk and cash flow interest rate risk. rate interest flow cash and risk liquidity risk, credit risk), price

on the bank facility was released leaving the bank facility undrawn at the reporting date. date. reporting the at undrawn facility bank the leaving released was facility bank the on nternal nternal a uditors on a continuous basis. The Group does not enter into Annual Report & Accounts 2009 &Accounts Report Annual Trinity Mirror plc reasury related matters. related reasury

299.8 105.4 121.0 22.4 2009 2.5 4.7 £m 93

348.7 145.2 161.2

36.4

2008 2.2 4.0 £m

Financials Governance Business review Who we are Trinity Mirror plc 94 Annual Report & Accounts 2009 Notes to the consolidated financial statements continued 36 Financial instruments continued Market risk The Group’s activities expose it primarily to the financial risks of changes in foreign currency exchange rates and interest rates. The Group has entered into specific derivative financial instruments to manage its exposure to interest rate and foreign currency risk primarily in respect of its US private placement loan notes as set out in note 28.

Foreign currency risk management The Group undertakes certain transactions denominated in foreign currencies. Hence, exposures to exchange rate fluctuations arise. Exchange rate exposures are managed within approved policy parameters utilising forward exchange contracts where appropriate. The carrying amounts of the Group’s foreign currency denominated monetary assets and monetary liabilities at the reporting date are as follows:

Liabilities Assets 2009 2008 2009 2008 £m £m £m £m Euro – – 1.6 5.1 US$ 331.9 362.3 0.1 41.7

Foreign currency sensitivity analysis The Group is mainly exposed to the Euro and US$. The Euro exposure arises on sales of newspapers in Europe. The Euro sales represent less than 2% (2008: 2%) of Group revenue. The Euros are kept on deposit and used to fund Euro costs. When Euros on deposit build to a target balance they are converted into sterling. The Group does not hedge the Euro income or deposits because the risk of foreign exchange movements is not deemed to be significant. The US$ exposure arises on the US private placement loan notes which are mainly US$ denominated and fixed interest. At the time of the US private placement loan notes issue the Group entered into cross-currency interest rate swaps to change the US$ principal and US$ fixed interest profile of the debt to sterling principal and sterling floating interest. The timing of the swaps exactly match every private placement principal and interest payment due. As a result the Group is not subject to any US$ foreign exchange exposure on its US private placement loan notes and matching swaps. The Group’s consolidated balance sheet shows the US private placement loan notes converted to sterling at the reporting date currency rate. The matching swaps are carried at fair value which represents the value of the fixed to floating swap, the currency element of the principal payments due and the currency element of the interest payments due. The difference between the valuation approaches gives rise to a charge or credit to the consolidated income statement. The following tables detail the Group’s sensitivity to a 10% increase and decrease in the sterling rate against the Euro and US$ in the current and prior period. A 10% movement in exchange rates based on the level of foreign currency denominated monetary assets and liabilities represents the assessment of a reasonably possible change in foreign exchange rates. The sensitivity analysis includes only outstanding foreign currency denominated monetary items including external loans.

Euro currency impact US$ currency impact 2009 2008 2009 2008 10% strengthening of sterling £m £m £m £m Increase/(decrease) in profit (0.2) (0.5) – – Increase/(decrease) in equity – – – –

Euro currency impact US$ currency impact 2009 2008 2009 2008 10% weakening of sterling £m £m £m £m Increase/(decrease) in profit 0.1 0.6 – – Increase/(decrease) in equity – – – –

Forward foreign exchange contracts It is the policy of the Group to enter into forward foreign exchange contracts only to cover specific foreign currency payments such as significant capital expenditure. During the current and prior period no contracts were entered into. increase by £ increase decrease/ would period Group’s the the for profit constant, held were variables other all and 2% higher/lower been had rates interest If change. possible of areasonably assessment the represents and used been has rates interest in A 2% increase model. forecasting cash Group’s the monthly using prepared is analysis the rateliabilities, floating date. For reporting the at instruments non-derivative and derivatives both for rates to interest exposure the on based determined been have below analyses sensitivity The analysis sensitivity rate Interest note. of this section management risk liquidity in the detailed are liabilities and assets financial the on rates to interest Group’sThe exposures inter protecting or sheet balance the positioning by either applied, are strategies hedging optimal ensuring appetite, risk defined and rate views interest with to align regularly evaluated are activities Hedging rate contracts. interest forward and contracts rate swap interest use of the by borrowings, rate floating and fixed between mix appropriate an maintaining by Group the by managed is risk The rates. interest floating and fixed both at funds borrows it as rate risk to interest exposed is Group The management risk rate Interest 36 HSBC Bank plc Bank HSBC the dateusing reporting the at Group’s counterparties the with major deposit on amount and limit credit internal the shows below table The risk. to credit exposure maximum Group’sthe represents losses, impairment net of is which statements, financial in the recorded assets of financial amount carrying The agencies. rating credit by international assigned ratings credit high with banks are counterparties the because limited is instruments financial derivative and funds liquid on risk credit The Poor. and by Standard counterparty that for assigned ratings credit to long-term the by reference limited is counterparty asingle with risk characteristics. similar having The Groupcounterparties of group any or definescounterparty single any to counterparties exposure risk credit significant any have not does Group The as having similar characteristics if they are connected entities.receivables. of trade condition Concentrationfinancial of credit the on performed is evaluation credit Ongoing sectors. diverse across spread of customers number of alarge consist Trade receivables counterparties. approved amongst spread is concluded of transactions value aggregate the and times appropriate at Board by the reviewed are counterparties of its ratings credit and Group’s The exposure customers. major rateits to records trading its own and information financial available publicly other uses not,Group if the and, available where agencies rating by independent supplied is information This above. and grade to investment equivalent the rated are that institutions financial with transacts only Group The counterparties. creditworthy with dealing of only apolicy adopted has Group The Group. to the loss financial in resulting obligations contractual its on default will acounterparty that to risk the refers risk Credit Credit risk management schemes. pension benefit defined its through exposure indirect has Group The investments. these trade actively not does Group The risk. price to equity exposed directly not is and investments equity listed no has Group The risks price Other to of £135.0principal of respect in million counterparties the with agreed it was 2009, April In of 2009. October period to months a 12 for fixed into on £180.0principal of payments million rateinterest floating the converted into which entered was rate swap interest an 2008, October In markets. financial the in to turmoil the given been has consideration value, fair below. calculating In disclosed is and contract in the inherent risk credit the and date reporting at the curves yield using flows cash future the by discounting determined dateis reporting the at rate swaps interest the of value fair The held. debt rate variable issued the on exposures flow cash the and held debt rate fixed issued of value fair the on rates interest of changing risk the to mitigate Group the enable contracts Such amounts. principal notional agreed on calculated amounts rate interest floating and fixed between difference the to exchange agrees Group the contracts, rate swap interest Under contracts swap rate Interest Royal Bank of Scotland plc of Scotland Bank Royal Barclays Bank plc plc Bank TSB Lloyds UK Santander facility was released. was facility Group’s the bank against down drawn guarantee bank the lease finance press Newcastle of the repayment of the aresult as 2009, During

extend the settlement date until October 2010. In October 2009, the swap in respect of £45.0 million principal was settled on the due date. due the on settled was principal of £45.0 million respect 2010. in swap the 2009, October dateuntil October In settlement the extend Financial instruments Standard and Poor credit rating symbols: rating credit Poor and Standard 7.6 million (2008: £ (2008: million 8.1 million). This is mainly attributable to the Group’s exposure to interest rates on its variable rate borrowings. variable its on rates to to Group’s interest the exposure attributable mainly is This million). continued London London London London London Location Rating AA AA A+ A+ A e st expense through interest rate cycles. interest through expense st Credit limit 20.0 50.0 20.0 50.0 50.0 2009 £m

Deposit 34.1 10.9 15.0 Annual Report & Accounts 2009 &Accounts Report Annual Trinity Mirror plc 2009 0.1 1.1 £m

Credit limit

50.0 50.0 50.0 20.0 2008 £m –

95

Deposit

10.2 2008

0.2 0.6 9.6 £m

–

Financials Governance Business review Who we are Trinity Mirror plc 96 Annual Report & Accounts 2009 Notes to the consolidated financial statements continued 36 Financial instruments continued Liquidity risk management Liquidity risk results from having insufficient financial resources to meet day-to-day fluctuations in working capital and cash flow. Ultimate responsibility for liquidity risk management rests with the Board. The Group manages liquidity risk by maintaining adequate reserves, banking facilities and reserve borrowing facilities, by continuously monitoring forecast and actual cash flows and by matching the maturity profiles of financial assets and liabilities.

Liquidity risk and interest risk tables The following tables detail the Group’s remaining contractual maturity for its non derivative and derivative financial instruments. The tables have been drawn up based on undiscounted cash flows of financial liabilities based on the earliest date on which the Group could be required to pay. The table includes both principal and interest cash flows. Where the amount payable or receivable is not fixed, the amount disclosed has been determined by reference to the projected interest and foreign currency rates as illustrated by the yield curves existing at the reporting date.

Less than More than 1 year 1–2 years 2–3 years 3–4 years 4–5 years 5 years £m £m £m £m £m £m 2009 Non-derivative financial instruments: Sterling variable interest rate – – – – – – Sterling fixed interest rate 1.9 17.9 0.7 0.7 10.4 – Non-sterling fixed interest rate 26.3 140.9 75.9 59.9 36.7 73.4 Derivative financial instruments: Financial assets (26.3) (140.9) (75.9) (59.9) (36.7) (73.4) Financial liabilities 14.3 143.8 77.8 60.8 37.8 75.4

2008 Non-derivative financial instruments: Sterling variable interest rate 13.0 3.2 3.4 1.0 – – Sterling fixed interest rate 1.9 1.9 17.9 0.7 0.7 10.4 Non-sterling fixed interest rate 25.3 25.3 153.7 82.7 65.4 120.1 Derivative financial instruments: Financial assets (25.3) (25.3) (153.7) (82.7) (65.4) (120.1) Financial liabilities 19.2 15.1 143.5 77.7 60.6 112.9

The non-derivative financial instruments include the US private placement loan notes, bank overdrafts, finance leases and the bank facility. The non-sterling fixed interest rate liabilities arise on the Group’s US private placement loan notes. The related swaps are shown under derivative instruments. Swaps are gross settled and each leg of the swap is split into either a financial asset or liability. The weighted average effective interest rate is set out in note 27. The Group has access to financial facilities of which the total unused amount is £178.5 million (2008: £163.5 million) at the reporting date. The Group expects to meet its other obligations from cash held on deposit, operating cash flows and its committed financing facilities.

Fair value of financial instruments The fair value of the Group’s financial liabilities are set out in note 27. report on pages 47 pages on report remuneration the in provided is directors of individual remuneration the regarding information Further of individuals. performance and position market to competitive regard having Committee Remuneration by the determined is key executives other and of directors remuneration The Termination of employment payments of employment Termination period the in payments Share-based benefits Retirement Total consideration disposal on Loss assets Net Trade receivables other and assets intangible Other Goodwill of Globespa disposed Group the period the During 38 benefits employee Short-term follows: as was period the during remuneration their and directors) executive of the all includes (which Committee Executive of the members and directors non-executive the comprise Group of the personnel Key management personnel key of management Compensation payment. by cash settled be will amounts outstanding Any parties. the between relationship the and purchase volume to reflect discounted prices market at made were Purchases discounts. volume average less prices Group’s list the at made usual were parties to related services and of goods Sales Limited. by fish4 owed £0.4(2008: million) of £0.5 million (2008: £1.4 support £4.3 (2008: of £4.9 Financial million). million received million) services for charges £0.1 (2008: incurred of £nil Group the revenue and was million) provided duringgenerated trade This theLimited. fish4 and PAperiod. Limited ventures: Group joint and The undertakings amounts associated following the with traded Group outstandingThe at the reporting date amounted toTrading £0.5 transactions million below. disclosed are transactions party related of other notein Details 35. disclosed are schemes benefit retirement the note. with Transactions this in disclosed not are and consolidation on eliminated Company, ofbeen have the parties related are The immediate parent and controlling party of the Group is 37 Trinity Mirror plc. Transactions between the Company and its subsidiaries, which Related party transactions party Related Disposal of business of Disposal to 52 . n Media Limited realising a loss on disposal of £2.4 million. disposal on aloss realising Limited n Media Annual Report & Accounts 2009 &Accounts Report Annual Trinity Mirror plc

2009 0.3 5.4 0.7 1.4 7.8 £m 97 2009 2008 (2.4) 2.4 0.6 0.7 0.8 1.1 4.0 1.5 £m 7.4 1.1 £m

–

Financials Governance Business review Who we are Trinity Mirror plc 98 Annual Report & Accounts 2009 Notes to the consolidated financial statements continued 39 Reconciliation of Group statutory results to adjusted results 53 weeks ended 3 January 2010 Tax Statutory Non-recurring) Finance legislation Adjusted results items Amortisation costs changes results £m £ma £mb £mc £md £m Revenue 763.3 – – – – 763.3 Operating profit 87.0 11.3 7.1 – – 105.4 Profit before tax 42.0 11.3 7.1 12.3 – 72.7 Profit after tax 29.3 7.8 5.1 8.9 – 51.1 Basic earnings per share (pence) 11.5 3.0 2.0 3.5 – 20.0

52 weeks ended 28 December 2008 Tax Statutory Non-recurring Finance legislation Adjusted results items Amortisation costs changes results £m £ma £mb £mc £md £m Revenue 871.7 – – – – 871.7 Operating (loss)/profit (88.4) 226.3 7.3 – – 145.2 (Loss)/profit before tax (73.5) 226.3 7.3 (35.9) – 124.2 (Loss)/profit after tax (59.1) 159.3 5.3 (25.9) 7.7 87.3 Basic (loss)/earnings per share (pence) (22.6) 61.0 2.0 (9.9) 2.9 33.4

a Details of non-recurring items are set out in note 8. b Amortisation of other intangible assets. c Impact of the translation of foreign currency borrowings and fair value changes on derivative financial instruments. d In 2008, tax legislation changes related to the impact of the phasing out of Industrial Building Allowances.

40 Post balance sheet events The Group announced on 9 February 2010 that it had exchanged contracts to acquire GMG Regional Media for a cash consideration of £7.4 million, from Guardian Media Group plc, with the transaction due to complete on 28 March 2010. Following an extensive consultation process the Group announced the closure of all defined benefit pension schemes to future accrual from 31 March 2010. All active members of the defined pension schemes will now have the option to join the Trinity Mirror Pension Plan, a defined contribution pension scheme, from 1 April 2010. Trinity Mirror plc Annual Report & Accounts 2009 99 Parent company accounts

Independent auditors’ report to the members Opinion on financial statements of Trinity Mirror plc In our opinion the parent company financial statements: We have audited the parent company financial statements of Trinity – give a true and fair view of the state of the parent company’s affairs Mirror plc for the 53 weeks ended 3 January 2010 which comprise as at 3 January 2010; the balance sheet and the related notes 1 to 16. The financial reporting – have been properly prepared in accordance with United Kingdom Who we are framework that has been applied in their preparation is applicable Generally Accepted Accounting Practice; and law and United Kingdom Accounting Standards (United Kingdom – have been prepared in accordance with the requirements of the Generally Accepted Accounting Practice). Companies Act 2006. This report is made solely to the Company’s members, as a body, in accordance with Chapter 3 of Part 16 of the Companies Act 2006. Opinion on other matters prescribed by the Our audit work has been undertaken so that we might state to the Companies Act 2006 Company’s members those matters we are required to state to them in an auditors’ report and for no other purpose. To the fullest extent In our opinion: permitted by law, we do not accept or assume responsibility to anyone – the part of the directors’ remuneration report to be audited has other than the Company and the Company’s members as a body, for been properly prepared in accordance with the Companies Act our audit work, for this report, or for the opinions we have formed. 2006; and – the information given in the directors’ report for the 53 weeks ended Respective responsibilities of directors 3 January 2010 for which the financial statements are prepared is and auditors consistent with the parent company financial statements.

As explained more fully in the statement of directors’ responsibility review Business on page 53, the directors are responsible for the preparation of the Matters on which we are required to parent company financial statements and for being satisfied that report by exception they give a true and fair view. Our responsibility is to audit the parent We have nothing to report in respect of the following matters where company financial statements in accordance with applicable law the Companies Act 2006 requires us to report to you if, in our opinion: and International Standards on Auditing (UK and Ireland). Those standards require us to comply with the Auditing Practices Board’s – adequate accounting records have not been kept by the parent Ethical Standards for Auditors. company, or returns adequate for our audit have not been received from branches not visited by us; or – the parent company financial statements and the part of the Scope of the audit of the financial statements directors’ remuneration report to be audited are not in agreement An audit involves obtaining evidence about the amounts and with the accounting records and returns; or disclosures in the financial statements sufficient to give reasonable – certain disclosures of directors’ remuneration specified by law are assurance that the financial statements are free from material not made; or misstatement, whether caused by fraud or error. This includes an – we have not received all the information and explanations we require assessment of: whether the accounting policies are appropriate to for our audit. the parent company’s circumstances and have been consistently applied and adequately disclosed; the reasonableness of significant Other matter Governance accounting estimates made by the directors; and the overall presentation of the financial statements. We have reported separately on the consolidated financial statements of Trinity Mirror plc for the 53 weeks ended 3 January 2010.

Panos Kakoullis (Senior Statutory Auditor) for and on behalf of Deloitte LLP Chartered Accountants and Statutory Auditors London, UK 4 March 2010 Financials

Neither an audit nor a review provides assurance on the maintenance and integrity of the website, including controls used to achieve this, and in particular whether any changes may have occurred to the financial information since first published. These matters are the responsibility of the directors but no control procedures can provide absolute assurance in this area. Legislation in the United Kingdom governing the preparation and dissemination of financial information differs from legislation in other jurisdictions. Trinity Mirror plc 100 Annual Report & Accounts 2009 Parent company balance sheet at 3 January 2010 (28 December 2008) Company registration number 82548

2009 2008 Notes £m £m Fixed assets Investments 4 1,571.6 1,569.8 1,571.6 1,569.8 Current assets Debtors – due within one year 5 1,188.1 1,015.5 – due after more than one year 5 428.3 449.6 Cash at bank and in hand 15.1 0.2 1,631.5 1,465.3 Creditors: amounts falling due within one year Borrowings 7 (4.2) (13.2) Other creditors 8 (1,588.7) (1,358.6) (1,592.9) (1,371.8) Net current assets 38.6 93.5 Total assets less current liabilities 1,610.2 1,663.3 Creditors: amounts falling due after more than one year Borrowings 7 (357.9) (388.3) Deferred tax liabilities 6 (4.9) (9.1) (362.8) (3 97.4) Net assets before pension scheme liabilities 1,247.4 1,265.9 Pension scheme liabilities 9 – – Net assets 1,247.4 1,265.9

Equity capital and reserves Called-up share capital 10 25.8 25.8 Share premium account 11 1,120.5 1,120.5 Capital redemption reserve 12 4.3 4.3 Profit and loss account 12 96.8 115.3 Equity shareholders’ funds 1,247.4 1,265.9

These parent company financial statements were approved by the Board of directors and authorised for issue on 4 March 2010. They were signed on its behalf by:

Sly Bailey Vijay Vaghela Chief Executive Group Finance Director standard FRS 30, ha FRS standard s amendment the statements, financial company parent of these dateofAt approval the 29. FRS equivalent Practice Accounting Accepted from disclosures that comply with the IFRS of Unitedrequirements the is exempt 7, meet that statements Kingdomfinancial Generally consolidated up drawing of agroup company aparent Company, as The undertakings. Group fellow with transactions reported not has 8and FRS in contained exemption of the advantage taken also has Company The statement. flow acash produced not has 1and FRS The Company has taken advantage of the exemption contained in period. prior and below and have been applied on a consistent basisPractice). in the currentThe particular accounting policies adoptedStandards are(United described Kingdom Generally Accepted Accountingaccordance with applicable law and United Kingdomthe Accounting parent company financial statements have presentedbeen prepared as in required by the Companies Act 2006.The Asparent permitted, company financial statements of the Company are 1 2008) 28 December 2010 ended (52 weeks 3January ended weeks 53 the for statementsfinancial Notes to the parent company tax deferred the to not discount elected has Company The deducted. be can differences timing underlying of the reversal future the which from profits taxable suitable be will there that not than likely more as regarded be can it when only recognised therefore and recoverable as regarded is asset tax Adeferred revaluations. investment on tax deferred for made is provision No purposes. taxation and accounting timing differences arising from the different on rates treatment tax anticipated the at full in provided is of taxation itemsDeferred for taxation Deferred amount. carrying the than less is amount recoverable date or more frequently when there reporting each at is undertaken is review an impairment indication An impairment. that the Fixed asset investments are stated at cost investments asset lessFixed provision for any declared. is dividend the which in period the in recognised are dividends The investments. from dividends represent amounts These undertakings Group in shares from Income Task Force. Issues Urgent of the pronouncements and Board Standards Accounting Kingdom United of the standards accounting applicable with accordance in and convention cost historical the under prepared been have statements financial company parent These accounting of Basis financial company parent the on impact material no have have and effective

Accounting Accounting policies

assets and liabilities. and assets to 11, FRS FRS 25, FRS 26, FRS 29 and the new will adoption their and applied been not therefore ve not been applied but were but applied been not in issue but not yet not but issue in statements.

financial statements. financial Company are disclosed in note 6 to the in relating fees audit the The million). £395.5 (2008: of £20.5 million notes to the consolidated period the for loss aretained reported Company The period. the for Company has elected not to present by s its permitted As own profit and loss account 2 in with dealt are schemes option share employee within held Shares schemes option share Employee are replaced, not are they that to extent the of borrowings, repayment the with associated discount or premium 26. of FRS Any principles Financial instruments are accounted for in accordance withFinancial instruments the appropriate. as debt or interest minority capital, share non-equity capital, share equity as classified are 26 of FRS and principles Capital instruments are accounted for in accordanceCapital instruments with the term. lease the over basis astraight on charged are leases of operating respect in Costs leases Operating account. loss and profit the through taken are differences Exchange transactions dateof the the on prevailing of exchange rates the at translated are currencies foreign in denominated Transactions Foreign currency period. the in actually achieved is reflected in other recognisedAny differencegains and between losses the expected profit. to operating return charged is provision pension of the on cost assetsservice and that operating and financing items inbetween split is the deficit or profit surplus scheme the in movement and The sheet. loss account. The full balance of the face on the presented and full in recognised is deficit or recoverable) is it that (to extent the surplus scheme pension Each benefits Retirement in of related finance expense. No amounts are recognised the with cost or income net to the match in accrued are respectpayments is

amortised over the life of the transaction. Interest receipts and and receipts Interest transaction. of the life the over amortised the balance sheet as a deduction from equity shareholders’ funds accordance with FRS 20. FRS with accordance future periods. Gains and losses on early termination or on Result for the period the for Result

purchase of interest rate and foreign exchange instruments instruments exchange foreign rate and of interest purchase taken to the profit and loss account. loss and to profit the taken ection 408 of the Companies Act 2006, the the 2006, Act Companies of the 408 ection

Annual Report & Accounts 2009 &Accounts Report Annual Trinity Mirror plc

101 - line .

Financials Governance Business review Who we are Trinity Mirror plc 102 Annual Report & Accounts 2009 Notes to the parent company financial statements continued 3 Staff costs The average number of persons, including directors, employed by and charged to the Company in the period was:

2009 2008 Number Number Administration 8 8

A number of employees (not directors) who have contracts of employment with the Company are charged to other Group companies and their staff costs are disclosed in those companies’ statutory accounts. All employees are employed in the United Kingdom.

2009 2008 £m £m Staff costs, including directors’ emoluments, incurred during the period were: Wages and salaries 3.3 2.0 Social security costs 0.6 0.4 Share-based payments 1.2 0.9 Pension costs 0.5 0.5 5.6 3.8

Disclosure of individual directors’ remuneration, share options, long-term incentive schemes, pension contributions and pension entitlements required by the Companies Act 2006 and those elements specified for audit by the Financial Services Authority are shown in the tables in the Remuneration report on pages 47 to 52 and form part of these parent company financial statements.

4 Investments

Shares in Group undertakings £m Cost At 28 December 2008 1,949.8 Share-based payments debit in subsidiary undertakings 1.8 At 3 January 2010 1,951.6 Provisions for impairment (380.0) Net book value At 28 December 2008 1,569.8 At 3 January 2010 1,571.6

The principal subsidiary undertakings of the Company are set out in note 15.

5 Debtors

2009 2008 £m £m Amounts falling due within one year: Amounts owed by subsidiary undertakings 1,187.1 1,013.8 Other debtors 1.0 1.7 1,188.1 1,015.5 Amounts falling due after more than one year: Amounts owed by subsidiary undertakings 428.3 407.9 Derivative financial instruments – 41.7 428.3 449.6

The details of the Company’s derivative financial instruments are the same as those of the Group and are disclosed in note 28 in the notes to the consolidated financial statements. Derivative financial instruments financial Derivative Closing liability Loan notes Loan The loan bank unsecured Syndicated notes loan £10 unsecured million US$100 million 7.42%US$100 million 2017 20 June due C notes Series £10 7.14% million 2014 20 June due Dnotes Series US$50 million 7.27% Series B notes dueUS$102 7.17% 20 million June 2012 20 June 2014 due Anotes Series United the in placing aprivate £10 through and US$252 million million totalling notes loan unsecured issued 2002,Group the 20 June On notes loan £10unsecured and million million US$252 notes. of the term the over off written being are issue of the costs The notes. loan these under outstanding remains (netof costs) £200.7(2008: million) have been swapped into notes loan denominated floating US$ the under payments interest and rate repayments capital the Both maturity. on sterling full in repayable are notes the All through the use of cross-currency interest rate2008. on full October in 24 repaid were notes swaps.floating) million E (£6 Series and 6.6% fixed) million At A(US$80 3 Series JanuaryThe 2010, £184.4 million 7.19% million US$80 2013due notes C October 24 rateSeries fixed £16 million 7.3% fixed rate Series US$190D notes duemillion 24 7.04% October 2011 fixed rate Series B notes follows: as maturities due and rates interest £16different 24 with and US$270 million million October 2011 totalling notes of loan series of three consist notes loan of the balance outstanding The respectively. Kingdom United and States United the in placing aprivate through million £22 and million US$350 totalling notes loan unsecured 24 2001,On issued October Group the notes loan £16unsecured and million million US$270 7 differences timing short-term Other comprise: recognised Amounts Tax Opening (liability)/asset 6 Syndicated unsecured bank loan overdrafts Bank £16 million unsecured loan notes loan £16 unsecured million notes loan unsecured US$252 million notes loan unsecured US$270 million comprise: notes Loan liabilities and assets tax Deferred Borrowings re charge is no drawing (2008: £10.0 million) on the bank facility of £178.5 £10.0 (2008: facility £ (2008: bank drawing the no on is million million)

States and United Kingdom respectively. The placing consisted of four series with different interest rates and maturities as follows: as maturities and rates interest different with series of four consisted placing The respectively. Kingdom United and States /(credit) 178.5 million Due within one year one 2009 4.2 3.1 1.1 £m – –

), which is committed until June 2013. June until committed is ), which more than more Annual Report & Accounts 2009 &Accounts Report Annual Trinity Mirror plc Due after one year one 355.0 357.9 2009 2.9 £m – –

Due within Due one year one 355.0 168.4 160.6 16.0 10.0 2009 2009 2009 13.2 10.0 2008 (4.9) (4.9) (9.1) 4.2 £m £m £m 2.1 1.1 £m 103 –

more than more

Due after Due one year one 388.3 388.3 388.3 184.7 177.6

(10.9) 16.0 10.0 2008

2008 2008 2008 (9.1) (9.1) 1.8 £m £m £m £m – – –

Financials Governance Business review Who we are Trinity Mirror plc 104 Annual Report & Accounts 2009 Notes to the parent company financial statements continued 7 Borrowings continued All the loan notes are repayable in full on maturity. Both the capital repayment and interest payments under the US$ denominated loan notes have been swapped into floating rate sterling through the use of cross-currency interest rate swaps. At 3 January 2010, £170.6 million (2008: £187.6 million) (net of costs) remains outstanding under these loan notes. The costs of the issue are being written off over the term of the notes.

Derivative financial instruments The details of the Company’s derivative financial instruments are the same as those of the Group and are disclosed in note 28 in the notes to the consolidated financial statements.

8 Other creditors

2009 2008 £m £m Amounts owed to subsidiary undertakings 1,579.6 1,3 47.1 Other creditors 1.3 1.7 Accruals and deferred income 7.8 9.8 1,588.7 1,358.6

9 Pension scheme liabilities The Company contributes to a number of the Group’s defined benefit pension schemes which operate for employees of a number of Group companies and is the sponsoring company for the Trinity Mirror plc Retirement Plan (the ‘Scheme’). The Company accounts for the Scheme in these parent company financial statements. The Company has announced the closure of this scheme to future accrual from 31 March 2010. For the schemes where the Company is not the sponsoring company, it is impracticable for the Company to identify its share of the underlying assets and liabilities and under FRS 17 the actual cost of providing pensions to these schemes is charged to the profit and loss account as incurred during the period. The pension credit before tax in the Company’s profit and loss account in the period was £0.2 million (2008: £nil). Based on actuarial advice, the financial assumptions used in calculating the Scheme’s liabilities under FRS 17 are:

2009 2008 2007 2006 2005 % % % % % Inflation rate 3.50 2.75 3.30 3.00 2.80 Discount rate 5.70 6.50 5.80 5.10 4.75 Expected return on Scheme’s assets 5.80 6.20 5.80 5.90 6.00 Expected rate of salary increases 3.75 3.25 4.35 4.00 4.10 Rate of pension increases in payment: pre 6/04/97 pensions 3.75 3.50 3.80 3.00 2.80 Rate of pension increases in payment: post 6/04/97 pensions 3.75 3.50 3.80 3.00 2.80 Rate of pension increase in deferment 3.50 2.75 3.30 3.00 2.80

Mortality rates are as follows:

2009 2008 2007 2006 Years Years Years Years Future life expectancy for a pensioner currently aged 65: – male 21.6 21.4 20.1 18.6 – female 24.0 23.8 23.0 21.3 Future life expectancy at age 65 for a non-pensioner currently aged 55: – male 23.4 23.2 21.6 19.6 – female 25.7 25.6 24.4 22.4

Expected contributions and deficit payments for 2010 are £0.1 million and £0.4 million respectively. The expected rates of return on each class of assets and the market value of assets, in the Scheme are: Scheme the in of assets, value market the and of assets class each on of return rates expected The Scheme the in surplus/(deficit) Closing Actuarial (losses)/gains Actuarial Closing fair value of Scheme’s assets Scheme’s of value fair Closing Benefits paid Benefits Contributions Scheme’s on assets gain/(loss) Actuarial Pension finance credit/(charge) finance Pension Expected return on Scheme’s on assets return Expected The movement in the surplus/(deficit) during the period is analysed below: analysed is period the during surplus/(deficit) the in movement The Net liabilities Contributions cost service Current Scheme in the surplus/(deficit) Opening tax Deferred Scheme’s of the assets value Fair follows: as is Scheme of the respect in sheet balance the in included amount The 9 The movement in the fair value of Scheme’s assets during the period is analysed below: analysed is period the during of Scheme’s assets value fair the in movement The Cash gilts linked Index gilts interest Fixed Opening fair value of Scheme’s assets value fair Opening equities UK Irrecoverable surplus Net surplus/(deficit) Scheme’s of the liabilities value Actuarial Corporate bonds US equities US Property equities overseas Other

Pension

scheme

Expected liabilities liabilities return at rate of rate 4.20 8.00 8.00 8.00 4.50 4.40 6.40 5.70 2009 %

value at Market continued 17.10 2.90 1.30 5.70 0.10 2009 7.10 £m – – –

Expected return at return rate of rate 3.90 3.60 6.50 4.20 2008 . 0 7.9 . 0 7.9 . 0 7.9 . 0 7.0 %

value at value Market 15.80 3.90 0.30 1.30 2008 2.70 . 0 7.6 £m – – –

(12.7) 15.8 2009 2009 2009 (2.3) 17.1 17.1 (4.4) (1.6) Expected (0.1) 0.3 4.4 4.4 4.6 1.2 1.2 1.4 1.0 £m £m £m return at return – – rate of rate 5.80 6.50 4.35 4.60 4.50 . 0 7.9 . 0 7.9 . 0 7.9 2007

%

value at value Market 16.70 3.80 4.90 (11.2) 0.50 4.40 1.30 1.80 15.8 15.8 2008 2008 2008 16.7 2007 (0.2) (4.6) (2.7) (1.3) 0.2 0.3 2.2 4.6 4.6 1.0 2.1 2.1 £m £m £m £m – – – –

Expected return at return rate of rate Annual Report & Accounts 2009 &Accounts Report Annual Trinity Mirror plc 8.00 8.00 8.00 6.00 4.00 4.50 4.40 2006 5.10 % (14.5) 13.6 16.7 16.7 2007 2007 2007

(0.2)

(0.7) (2.2) 0.2 0.8 2.2 2.2 2.8 2.8 0.7 (1.1) £m £m £m – – –

value at value Market 13.60 3.50 0.50 4.20 2.40 1.60 2006 1.40

£m – –

(14.7) 13.6 13.6 2006 2006 2006 11.4 Expected (0.8) (0.2) (3.6) (0.7) 0.8 0.3 0.4 (1.1) 0.7 (1.1) 1.8 1.9 return at return 105 £m £m £m rate of rate – – 3.80 5.90 4.00 8.25 8.25 8.25 2005 4.75 4.10

%

value at value Market 11.40 (15.0) 3.60 0.50 3.40 0.40 1.90 1.60 2005 2005 2005 2005 11.4 11.4 (0.3) (3.6) (0.2) (3.6) (2.5) (0.4) (4.5) (0.1) 0.6 0.6 9.0 1.5 1.6 1.1 £m £m £m £m – – –

Financials Governance Business review Who we are Trinity Mirror plc 106 Annual Report & Accounts 2009 Notes to the parent company financial statements continued 9 Pension scheme liabilities continued The profit and loss account is analysed below:

2009 2008 2007 2006 2005 £m £m £m £m £m Profit and loss account excluding pension scheme 96.8 115.3 608.9 589.3 565.6 Pension reserve – – – (0.8) (2.5) Profit and loss account 96.8 115.3 608.9 588.5 563.1

10 Called-up share capital The details of the Company’s called-up share capital are disclosed in note 31 in the notes to the consolidated financial statements. Dividends are disclosed in note 12 in the notes to the consolidated financial statements.

11 Share premium account The details of the Company’s share premium account are disclosed in note 32 in the notes to the consolidated financial statements.

12 Other reserves

Capital redemption Profit and reserve loss account £m £m Opening balance 4.3 115.3 Transfer of retained loss for the period – (20.5) Other net recognised losses in the period – (1.0) Share-based payments credit – 3.0 Closing balance 4.3 96.8

The capital redemption reserve represents the nominal value of the shares purchased and subsequently cancelled as part of share buy-back programmes.

13 Operating lease commitments The Company has annual commitments under non-cancellable operating leases in respect of land and buildings as follows:

2009 2008 £m £m On operating leases which expire: After five years 6.8 7.8

The Company had contracted with tenants for the following future minimum lease payments:

2009 2008 £m £m On operating leases which expire: Within one year 0.1 0.1 In second to fifth years 0.4 0.4 After five years 1.0 2.1 1.5 2.6

14 Contingent liabilities The Company has undertaken to provide financial support as required by, and has guaranteed the borrowings of, a number of its subsidiaries. At 3 January 2010 the amount guaranteed was £nil (2008: £8.4 million). Trinity Mirror plc Annual Report & Accounts 2009107

15 Principal subsidiaries Details of the Company’s principal subsidiaries, all of which are incorporated in the United Kingdom, at 3 January 2010 are as follows:

Proportion of ordinary Principal activity shares held % Subsidiary undertakings MGL2 Limited Holding company 100.00* Trinity Mirror Regionals plc Holding company 100.00* Trinity Mirror Digital Limited Holding company 100.00* Who we are MGN Limited Newspaper publishing 100.00 Scottish Daily Record and Sunday Mail Limited Newspaper publishing 100.00 Gazette Media Company Limited Newspaper publishing 100.00 NCJ Media Limited Newspaper publishing 100.00 Trinity Mirror Southern Limited Newspaper publishing 100.00 Limited Newspaper publishing 100.00 Trinity Mirror North West & North Wales Limited Newspaper publishing 100.00 Trinity Mirror Cheshire Limited Newspaper publishing 100.00 Trinity Mirror Merseyside Limited Newspaper publishing 100.00 Trinity Mirror North Wales Limited Newspaper publishing 100.00 Trinity Mirror Huddersfield Limited Newspaper publishing 100.00 Trinity Mirror Midlands Limited Newspaper publishing 100.00 review Business Scottish and Universal Newspapers Limited Newspaper publishing 100.00 AMRA Limited National advertising sales house 100.00 Trinity Mirror Printing Limited Contract printers 100.00 Trinity Mirror Printing (Blantyre) Limited Contract printers 100.00 Trinity Mirror Printing (Cardiff) Limited Contract printers 100.00 Trinity Mirror Printing (Liverpool) Limited Contract printers 100.00 Trinity Mirror Printing (Midlands) Limited Contract printers 100.00 Trinity Mirror Printing (Newcastle) Limited Contract printers 100.00 Trinity Mirror Printing (Oldham) Limited Contract printers 100.00 Trinity Mirror Printing (Saltire) Limited Contract printers 100.00

Trinity Mirror Printing (Teesside) Limited Contract printers 100.00 Governance Trinity Mirror Printing (Watford) Limited Contract printers 100.00 Trinity Mirror Digital Recruitment Limited Online recruitment 100.00 Trinity Mirror Digital Property Limited Online property 100.00 Rippleffect Studio Limited Online consultancy 100.00

*Owned directly by the Company. 16 Post balance sheet events The details of the Company’s post balance sheet events are disclosed in note 40 in the notes to the consolidated financial statements. Financials Trinity Mirror plc 108 Annual Report & Accounts 2009 Group five year summary

2009 2008 2007 2006 2005 £m £m £m £m £m Income statement Revenue 763 872 971 1,003 1,038 Operating profit before non-recurring items 98 138 190 184 224 Operating profit/(loss) after non-recurring items 87 (88) 30 (63) 221 Pension finance (charge)/credit (10) 11 12 10 2 Finance costs net of investment revenues (35) 4 (21) (36) (38) Continuing operations profit/(loss) before tax 42 (73) 21 (89) 185 Discontinued operations profit before tax – – 136 60 22 Tax (charge)/credit (13) 14 46 18 (60) Profit/(loss) for the period 29 (59) 203 (11) 147

Basic earnings per share before non-recurring items 14.5p 38.4p 56.6p 42.5p 50.5p Non-recurring items continuing and discontinued (3.0)p (61.0)p 13.3p (46.5)p (0.2)p Basic earnings/(loss) per share of total operations 11.5p (22.6)p 69.9p (4.0)p 50.3p

Dividends per share – 3.2p 21.9p 21.9p 21.9p

Balance sheet Intangible assets 946 957 1,149 1,418 1,689 Property, plant and equipment 423 449 447 421 387 Other assets and liabilities (580) (522) (496) (675) (829) 789 884 1,100 1,164 1,247 Net debt (300) (349) (248) (441) (493) Net assets 489 535 852 723 754

Total equity (489) (535) (852) (723) (754) 2009 in context Investor relations In a tough year for the media industry, and against the challenging backdrop of a slowdown in the UK economy, Trinity Mirror management took decisive action, focusing on leading We communicate with the financial community on a regular and Trinity Mirror share price and traded volumes 2009 ongoing basis to support our stakeholders in their investment the business through recession, while decision process. While the investor relations programme is (p) (m) continuing to develop the business driven by statutory reporting requirements, it also contains a 200 20 strong element of additional communication in the form of 180 18 for longer term growth. meetings and presentations. 160 16 In response to declining revenues and 140 14 inflationary cost pressures, a comprehensive Key activities 120 12 package of self-help measures was put In addition to standard regulatory reporting, key themes in our 100 10 communications with the financial market in 2009 were the 80 8 in place to substantially reduce our fixed implications of the extreme credit conditions on our industry, 60 6 the resulting volatile financial markets, the downturn in advertising, cost base. 40 4 the strength of our balance sheet, our financing facilities and our stable pension position. 20 2 At the same time, the Group continued to 0 0Jan Feb Mar AprMay JunJul AugSep OctNov Dec0 In 2009, the Company made the following announcements: invest in our multi-media future, modernising Average weekly price Weekly volume our publishing operations and launching 26 Feb 2009 Preliminary Results Announcement 13 May 2009 Annual General Meeting new digital products and services. The Trinity Mirror vs FTSE 350 Media Index 2009 13 May 2009 Interim Management Statement implementation of the new operating model 400 across the business has resulted in a step 30 Jul 2009 Interim Results Announcement 350 change in the way we publish across print 12 Nov 2009 Interim Management Statement and digital achieving efficiencies and a 300 In 2009, the focus of our investor relations efforts continued to be 250 significantly lower cost base but without on institutional investors and analysts. This year we maintained a detriment to quality. proactive targeting programme, reaching out to new investors in the 200 UK, Continental Europe and the US. In addition to these marketing Our strategy of diversifying revenue streams efforts, we continued to respond to ad hoc queries and meeting 150 requests from analysts and investors. We held meetings with over 100 coupled with the impact of the downturn on 60 institutional investors during the year, nearly half of whom were advertising revenues has resulted in a more non-holders. The largest concentration of meetings was among 50 UK investors, followed by the US and Continental Europe. resilient mix of revenues. 0 JanFeb Mar AprMay JunJul AugSep OctNov Dec Trinity Mirror FTSE 350 Media At the end of 2009, Trinity Mirror is a leaner Key dates in 2010 and fitter business which is well positioned 4 Mar 2010 Preliminary Results Announcement Dividend policy to take full advantage of any upturn in 13 May 2010 Annual General Meeting Our dividend policy is to increase dividend progressively while market conditions. maintaining a dividend cover (adjusted earnings per share/dividend 13 May 2010 Interim Management Statement per share) of at least 2x if earnings are increasing. However, in light 29 Jul 2010 Interim Results Announcement of the challenging trading environment faced by the Group, the Board concluded at the 2008 preliminary results that it was prudent to retain 11 Nov 2010 Interim Management Statement maximum capital flexibility for the Group. Therefore, alongside actions being taken on costs and in other areas of the business, the Board did not pay a final dividend for 2008 or any dividend for 2009. Key contacts Sly Bailey, Chief Executive Vijay Vaghela, Group Finance Director Online share dealing Paul Vickers, Secretary and Group Legal Director Trinity Mirror provides an internet-based service called Shareview Nick Fullagar, Director of Corporate Communications through Equiniti Limited. The service allows current shareholders Claire Harrison, Investor Relations Equity Analyst to sign up for e-communication and receive shareholder mailings electronically, buy and sell shares online using Shareview Dealing and send their voting instruction electronically if they have already registered for Shareview or have received a voting form with an electronic reference. For more information on the service, please see www.trinitymirror.com/ir/services/dealing/.

Design and production: Radley Yeldar www.ry.com Trinity Mirror plc Registered office: 2009 & Accounts Report Annual plc Mirror Trinity One Canada Square Canary Wharf, London E14 5AP Trinity Mirror plc Annual Report & Accounts T: 020 7293 3000 F: 020 7293 3405 www.trinitymirror.com

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