Future Plc Annual Report and Accounts

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Future plc Annual Report and Accounts 2015 01 Future plc Group overview Future plc is an international media group and leading digital publisher, listed on the London Stock Exchange (symbol: FUTR). These highlights refer to the Group’s annual results for the year ended 30 September 2015.

Strategic Report Continuing Revenue Net Debt

01 Group overview 02 Chairman’s statement 03 Chief Executive’s review £59.8m £(1.8)m 05 Strategic overview 2014: £66.0m 2014: Net Cash £7.5m 07 What we do 09 Risks and uncertainties 11 Corporate responsibility Continuing EBITDAE Continuing Exceptional items

Financial Review

13 Financial review £3.6m £(2.5)m 2014: £(7.0)m 2014: £(24.3)m

Corporate Governance

17 Board of Directors Continuing EBITE Continuing Loss before tax 19 Directors’ report 23 Corporate Governance report 29 Directors’ remuneration report 41 Independent auditors’ report £0.8m £(2.3)m 2014: £(10.3)m 2014: £(35.4)m

Financial Statements

43 Financial statements Continuing Digital Advertising Continuing Users 80 Notice of Annual General Meeting 85 Investor information 75% 48.3m of total continuing advertising a month (Q4 up 3% on Q3) revenues (2014: 66%)

EBITDAE represents EBITE represents Exceptional items for earnings before interest, earnings before 2014 above includes tax, depreciation, interest, tax, impairment impairment of intangible amortisation, impairment and exceptional items. assets of £16.8m. and exceptional items. Annual Report and Accounts 2015 02 Strategic Report

Chairman’s statement Building momentum Following a year of significant transformation for Future in 2014, the 2015 results show an immediate positive response to the changes. The Group has built on its profitability in all territories throughout the year via the creation of high growth revenue streams, strong audience growth and a commitment to our strategy.

With the transformation activity completed, On 3 August 2015, we appointed Penny With the transformation Future has entered a new and exciting period Ladkin-Brand as our Chief Financial Officer. of regeneration. Our strategy has allowed us We are delighted to have Penny join Future “ activity completed, to focus on building momentum during the and she brings experience in digital media and Future has entered a year, particularly around our growing digital monetisation models – experience that digital and diversified revenue streams. will prove essential as we continue to drive our new and exciting period digital revenues. The strategy and transformed business have of regeneration. most notably resulted in a return to profitability Mark Wood has decided not to seek re-election ” in all territories. The changes and developments to the Board at the AGM in February 2016 and have set us in good stead to progress further the Board would like to take this opportunity to into the optimisation stage in 2016 for which the thank Mark for his contribution to Future over Peter Allen trends are extremely encouraging. the last 5 years, as both CEO and then more Chairman recently as a non-executive Director. During the year we restructured the balance sheet and a new favourable debt facility is On behalf of the Board, I would like to now in place. thank all our employees for their hard work, dedication and commitment to our new strategy As we move forward into 2016 we hold true and returning Future to profitability after a to our strategy; creating content that connects particularly challenging period. The Group could with audiences, customers and consumers not have achieved this transformation without continues to be at the centre of what we do, the positive and dedicated approach of our staff. underpinned by a leaner, simpler business and a strengthened balance sheet.

In order to position Future for growth as we enter the optimisation stage, the Group will split into two separately managed brand-led divisions: Media and Magazine. Peter Allen Chairman 03 Future plc

Chief Executive’s Strategic report review With Future having now successfully completed an 18-month transformation, 2015 has been a year of building momentum on the back of a simplified and right-sized organisation. Focusing on its Content that Connects strategy allows Future to focus and improve upon its core strengths and its growing digital and diversified revenue streams.

Transformation completed markets with three complementary revenue We have completed a streams: e-commerce, events and digital Future has completed a substantial advertising. It has a number of leading “ substantial transformation transformation programme; the Group brands including techradar, PC Gamer, of the business over the has been simplified, the balance sheet GamesRadar+, The Photography Show, strengthened and non-core assets sold. Generate and Golden Joysticks. last 18 months, with 2015 The headcount has been reduced to around 520 and the property estate rationalised, with The Magazine division, with ten key titles and being a year of building the Group now operating from two UK offices. around 150 publications in total, will be brand-led momentum. All territories are with tight management of the decline in revenue. The completion of the transformation is a now profitable and we are major milestone for Future, which has Creating Content that Connects with revolutionised the way it works and has audiences, customers and consumers is at seeing the acceleration of our allowed the Group to focus on the high the centre of the Group’s strategy and is now growing digital and diversified growth areas within the business. underpinned by a leaner, simpler business. revenue streams. The Group is in a stronger position to optimise Momentum building on the momentum built during the last ” financial year. Leading on from the transformation programme, Zillah Byng-Thorne the focus in 2015 has been to build revenue and Chief Executive profit momentum. This resulted in all territories The Future Wheel - a virtuous circle becoming profitable and the acceleration of the of engagement growing digital and diversified revenue streams. Future has created two new material revenue streams: e-commerce and events, both with attractive margins.

Audience engagement continues to be strong, with over 48 million users a month accessing Future’s digital sites. The total digital reach across the portfolio is over 79 million, growing at a rate of 14% YoY on a rolling 12-month basis; whilst the social media reach is also up by 82% over the same period.

In December 2014 the Group set an all-time page view record for Future, delivering 288 million page views throughout the month. In January 2015, Future passed the one billion page view mark for the financial year, quicker than the business has done before. Brilliant at the Basics

Leaner, Simpler Business Optimisation

After a successful year of building momentum, the Group now enters the optimisation stage. Growth capital - £3.3m of funds raised To maximise opportunities, the Group will split into two separately managed divisions, In order for the Group to accelerate the Media and Magazine, with operating models growth opportunities in the Media division, appropriate to their needs. on 27 November 2015 Future raised £3.3m by way of a placing of new shares. The two independently managed divisions will manage a number of market leading brands, The funds raised will be used to invest in with significant opportunities and a remit to a number of rapidly growing new revenue grow profitably. streams including e-commerce, events and digital advertising. These businesses The Media division will focus on being at the need investment to grow and develop. The forefront of digital innovation, in particular additional funds will enable Future to increase the high growth technology and games the level of investment into these new revenue Annual Report and Accounts 2015 04 Strategic Report

streams beyond that achievable from existing and bookazines hold leading market positions facilities, with the aim of accelerating growth and have a global reach with magazines and profit generation. exported to 39 countries.

Future continues to see substantial Digital and Diversified opportunities internationally with 77 strategic partnerships and 218 licensed editions in 71 The focus on understanding the customer countries. The Group has seen an encouraging need has presented an opportunity to trend of stabilising copy sales for a number of develop a meaningful new revenue stream in its print magazines in the second half of this Future and its partners e-commerce. The market leading technology year. This has been achieved through stronger reach 62% of the site techradar targets consumers when they product offerings, better alignment and a focus 18-44 male audience are in their research phase and influences on execution in the retail team. in the UK. their product choice from the moment they first consider buying to the moment they purchase. The Group is the number one digital consumer magazine publisher in the UK with over 200,000 23% of techradar’s downstream traffic is to digital subscriptions and 20,000 digital single retailer websites. Unique data insight and issues downloaded every month across Apple content resulted in techradar ranking number Newsstand, Google Play, Amazon, Barnes & one on Google search on Black Friday 2014 for Noble, Zinio and its own subscriptions website “techdeals” and created significant revenues My Favourite Magazines. for the Group. Future continues to maximise its market share The events portfolio was extended in the year with bundled print and digital products, which with the launch of the first ever dedicated help to introduce the existing print customers We have a digital PC Gaming show at E3 in the US, which to digital versions. reach of over 79 brought in over $550,000 of revenue. The million users from Photography and Creative & Design events across the globe. continued to show good growth. Awarded Managing talent “Event of the Year” in the 2015 PPA Awards, The Photography Show had revenue growth Future is committed to fostering new talent and of over 40% in 2015. developing the expertise within the business. The Group hired 158 new starters during 2015, During 2015 the Group concentrated on which is less than 26% of its total headcount. building its digital reach to become a market Future re-invested in headcount in areas leading player online. The Group’s top brand, where it is most required and a third of all new techradar, is the number one UK consumer hires are focused on the key areas of product technology content site. GamesRadar+ and & technology and commercial. PC Gamer are global brands with a strong foothold in the online market, with PC Gamer We have over being the global number one PC gaming site. Current trading and outlook 445,000 subscribers worldwide. In PC gaming Future is extending its brand With the additional funds raised to support reach to connect with the audience in new the Group’s investment in the Media division, ways and is now offering a weekly scheduled the Board expects the Group’s profitability broadcast channel live streamed on Twitch TV. to continue to grow and seize further margin expansion in the current financial year. CreativeBloq is the number one UK & US design content site, with users reaching 4 The Directors expect the business to be net million, representing 55% growth year-on-year. cash generative by 2017 and to be generating Within photography, Digital Camera World is underlying EBITDAE margins of 8% in 2016 the second largest photography website in the and 12% in 2017. UK, and in music, MusicRadar is also number two in its sector online.

Print business

The Group continues to develop and innovate Zillah Byng-Thorne within the print magazine market. With global Chief Executive print circulation of over 620,000, the magazines 05 Future plc

Strategic overview Optimised Future Future’s strategy focuses the business on its core skills that make it a market leading content provider. Creating Content that Connects with audiences, customers and consumers is at the centre of the Group’s strategy.

Content that Connects In line with our B2B technology strategy techradar pro has produced good growth over T omo RR MassiVe 2 0 1 5 Waards issue! Creating content that connects with our the past year, seeing its user base increase by oW'S oW'S PHONES | WEARABLES | AUDIO | TVS | LAPTOPS engaged audiences 144% year-on-year and monthly page views TE chnology FIRST REVIEWS! grow by 10 million, a 249% increase. T oday iPHONE 6S Future entertains, informs and engages its

T3 & iPAD PRO aWaRd Discover the incredible consumers in five key verticals – Technology, Future conducted a cross platform re-launch Apple upgrades every S 2015 tech addict has to have Games & Entertainment, Music, Photography of its iconic T3 brand by re-designing the I

ISS uE Plus! Why the T V was worth the wait

248 and Creative & Design through magazines, magazine, re-platforming the website and websites and events. We monetise our re-launching the T3 Awards. The May 2015 re- audience via paid-for content, commercial launch magazine issue saw ad revenue almost sales, ticket sales and e-commerce. double from the prior issue and UK newsstand sales have grown by 32% from half one to half GADGET OF THE YEAR THE OF GADGET

olyMPus oM-d e-M5 We simultaneously engage and inform two. Year-on-year social reach has increased

aPPle 172 WatcH consumers with world-class, multi-platform by 13% and the site is popular with mobile pag e s o f content. This content, which is at the heart users whose dwell time has increased by 11%. red hot tech! Discover the must-own tech of 2015 of everything we do, is driven by a variety of in our bumper awards issue nest Protect sony Playstation 4

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issue Meeting the Consumer Need 2015

PR WWW i NT e D i N TH .T3.com e u BMW i8 £4.99 K Future’s portfolio has highly engaged and Monetising the consumer need through two targeted demographics with Future and its Net clear customer experiences Communities partners reaching 62% of the 18-44 male audience in the UK. Our audience Future operates in two exciting industries at the is passionate and loyal with magazine readers’ forefront of change: technology and games. retention rates on average 67%. The global technology market is worth more than $2.3 trillion and is forecast to grow by 5.9% We’ve seen a rapid expansion in our social in 2016. In 2014 the UK technology market reach over the last year, achieving a combined alone was worth £22.9 billion and the US market reach of over 20 million in September 2015, $225 billion. Future is capitalising on the growth an increase of 25% from last year. In the same of this market through our leading technology period the number of Facebook fans has brand, techradar, by providing our audience with increased by 19% and Twitter followers by 45% two main content types that meet their needs as (a real term increase of 1.2 million followers). well as being monetisable: a “how to” channel with expert advice on getting the most out of We lead in our verticals; our top technology their favourite gadgets and reviews where they brand, techradar, is the number one consumer can be helped with their research and compare technology content website in the UK, offers. Also we are focusing particularly on the generating its largest ever number of page fastest growing sectors in the technology market views in August 2015 of 73 million. Likewise, with two new content channels for “wearables” our leading games sites, PC Gamer and and “car tech” making techradar truly the GamesRadar+, now have a combined monthly “home of technology”. reach of 16.5 million gamers. The re-launched PC Gamer site has seen page views growth of The games market in particular is also 91% year-on-year. flourishing as PC gaming enjoys a resurgence, now being larger than the console market. MusicRadar delivered some amazing results at In 2015 the games market is estimated to be the National Association of Music Merchants worth $74.2 billion and is forecast to grow to (NAMM) show in the US, generating 237 news $79.7 billion in 2016. PC Gamer is capitalising articles and 50 videos, all of which delivered on the rapid growth with the launch of the first the site’s biggest ever month for page views at ever dedicated PC gaming show at E3 in the 16.2 million. US, with PC Gamer obtaining 3.1 million users and 18.7 million page views during E3 week Digital Camera World continues to provide (up more than 30% on last year’s event). The engaging content at the cutting edge of development of PC Gamer Pro enabled us to photographic developments, and has as a take advantage in the global phenomenon of result experienced fantastic year-on-year competitive gaming, contributing to an increase growth in users of 21%. in overall monthly page views of over 24 million. Strategic Report 06

44% Handheld devices 44% of online sessions are devices. handheld from 863,000 Circulation Monthly have a monthlyWe global circulation of 863,000. Future in numbers in Future 490m ImpressionsAd facilitateWe over 490m ad impressions month. per 253m Views Page Future receives 253m monthly page views. 20.2m MediaSocial Future has 20.2 million followers across all the main social networks.

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AnnualReport and Accounts 2015 a the transforming GamesRadar+, to titles games brand into a global powerhouse and a one-stop entertainment. modes of all destinationfor creation process. have undergoneWe a platform consolidation from nine platforms to just two, reducing the complexity of our structure and creating a more integrated and complete user experience. We expect all our websites to be migrated over to one common platform during In order 2016. to focus on market leading brands in our core markets, we have also been able to migrate delivery and operations offices, exchange making. decision have relocatedWe 99% of print content Avoiding complexity and keeping it simple A core part of our strategy is to simplify our business. have reduced We our operating locations in the UK from four to two main A leaner, simpler Business leaner, A in surpassed. Our search page rankings and our content surrounding the events put us in a very strong position, with Black Friday articles alone generating over one million clicks. As a result, we saw record levelsof e-commerce revenues, with total revenues generated for our retail partners reaching an unprecedented million.total of over £1.1 Through needs, we were able to capitalise on the international sales events of Black Friday and Cyber Monday These 2014. were a great success for us, as we saw our expectations films Movies, TV and Cool Stuff. The migration echoes the progression of how traditional gaming consoles have become home million entertainment eight Reaching devices. users, GamesRadar+ has become a one-stop destination for audiences who love games, GamesRadar+, of the market leading gaming site as it launches In November Film Total and 2014 SFX joined forces with GamesRadar to form 07 Future plc What we do Our portfolios

Future plc is an international media group creating over 210 magazines, apps, websites and events. Across our portfolios we reach 79 million of the most passionate and loyal consumers in the world.

FEBRUARY 2015 issUE 228

revieW oF the 60 year must see movies The 60 besT films of 2014 including S t a r Wa r S: the Force aWakenS besT posTers Mad Max: BEst trailErs Fury road WorsT dialogue! criMSon Peak

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Technology Games & Entertainment Kotaku UK Edge Future’s technology portfolio is market Future’s Games & Entertainment portfolio is Total Film leading. Constantly innovating, it moves in famous across the globe, reaching 16.5 million SFX line with the fast moving technology market users each month. With Totalfilm and SFX PC Gamer Show responding with the launch of new channels, content migrating over to GamesRadar+ earlier Golden Joysticks Awards such as “wearables” and “car tech”, making in the year the site has become the global the sites responsive so they can be viewed heart of entertainment providing world class seamlessly across devices and by meeting games, film and television content. Music our audience’s needs with reviews, how to’s and e-commerce offerings. We hold a unique position in the global games Future has one of the most highly-respected media market, combining the strongest games music portfolios in the world with long- We reach more mainstream technology industry partnerships with an innovative multi- established, market-leading brands such as enthusiasts than ever before through digital, channel approach. Guitarist, Computer Music and Rhythm. We print and events. Over 24 million users every continue to lead the market through print and month use our technology websites, including With leading brands such as GamesRadar+, digital innovation as we look to target more techradar, T3, Gizmodo UK, Lifehacker UK PC Gamer, Edge, Gamesmaster, Kotaku UK, musicians on a global scale, best seen by the and Maximum PC. We also have a strong Official PlayStation magazine and Official Xbox hugely successful development of MusicRadar. B2B technology offering in techradar pro magazine, Future engages with its audience and ITProPortal. across online, print, digital editions, social MusicRadar delivered some amazing results media, video, mobile, on-console and events. at the National Association of Music Merchants These websites are supported by a host of The quality of our magazines within this portfolio (NAMM) show in the US, generating 237 news market leading print and digital magazines is widely recognised, with Edge winning articles and 50 videos, all of which delivered including MacFormat, the UK’s largest Apple Specialist Magazine of the Year at the Digital the site’s biggest ever month for page views magazine; Linux Format, the UK’s largest Magazine Awards at the end of last year. at 16.2 million. Linux magazine; Windows: Help & Advice; and T3 magazine. In the US, the magazine With the world famous movie magazine Brands: portfolio is further strengthened by Mac|Life Total Film, and the equally renowned SFX, and Maximum PC. Future has an enviable portfolio of film MusicRadar magazines which engage with movie and Guitarist In events, the annual T3 Gadget Awards, now TV lovers worldwide. Total Guitar entering its 10th year, are widely regarded Guitar Techniques as the Oscars of the UK technology industry, Future continues to innovate in this sector such Rhythm recognising the best technology from the as SFX and GamesRadar+ launching the first Computer Music preceding 12 months. episode of a new weekly Star Wars show, “Star Future Music Wars: Stay on Target” in May 2015 as well as Brands: an exclusive bookazine, “Art of Star Wars”. Photography techradar Future launched the first ever dedicated T3 PC Gaming show at E3 in the US this year Future’s photography magazine portfolio is Gizmodo UK which resulted in 147 million impressions and made up of Digital Camera, the UK’s best- Lifehacker UK 1.5 million livestream video plays during E3 selling photography magazine, Photo Plus and MacFormat week. We continue to host the annual Golden NPhoto, “Consumer Magazine of the Year” at Mac|Life Joysticks awards which go from strength to the Pixel Awards. These brands are supported Maximum PC strength with over 9 million votes this year. by Photography Week, the international number LinuxFormat one photography weekly on iPad and iPhone. ITProPortal Brands: techradar pro The photography portfolio is also responsible T3 Awards GamesRadar+ for one of Future’s most significant events, Windows: Help & Advice PC Gamer the award winning The Photography Show Annual Report and Accounts 2015 08 Strategic Report

Business review Pr OF ess GEAR SPECIAL 2015’S HOTTEST NEW GUITARS, AMPS & EFFECTS SebaStiao Salgado

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– the UK’s largest event for enthusiast and Brands: Creative Bloq, the number one UK design professional photographers. content website, and the market-leading Digital Camera magazines Net, ImagineFX and Computer The portfolio’s expert photography content N-Photo Arts, “Visual Arts Magazine of the Year” at comes together online in Digital Camera Photo Plus the Digital Magazine Awards. World, a website which is the second largest Professional Photographer photography website in the UK and at the Photography Week The portfolio also hosts the highly successful cutting edge of photographic developments. The Photography Show Generate events, the conferences for web Digital Camera World reaches 1.8m users Professional Photography designers and developers that take place in globally each month. Digital Camera World both London and New York.

Future launched a brand new magazine Brands: Professional Photography in October 2015, Creative & Design Creative Bloq a luxurious new title designed to appeal to Net professional and advanced photographers, Future’s Creative & Design portfolio reaches Computer Arts as well as those who just simply love over four million web designers, developers, ImagineFX fine-art photography. graphic designers and 3D artists through Generate

Business review

Key Performance Indicators

The key performance indicators are presented on a continuing basis.

2015 2014 Corporate KPIs EBITDAE (£m): 3.6 (7.0) EBITE (£m): 0.8 (10.3) Digital KPIs Digital and Diversified revenues as a percentage of total revenues 47% 41% Number of users visiting our websites (monthly) 48.7m 57.3m Number of page views (monthly) 253m 263m Number of digital magazines sold per month (thousands) 248 287 Digital subscriber base (thousands) 220 250 Print KPIs Number of magazines sold per month (thousands) 628 735 Print subscriber base (thousands) 259 281 Copies sold as a percentage of copies printed 51% 42% (including subscriptions) 09 Future plc

Risks and uncertainties Risks and uncertainties

Like all businesses, our business faces risks and uncertainties that could impact on the Group’s achievement of its objectives. Risk is accepted as being a part of operating any business and we have therefore established a continuous process of identifying, evaluating and managing risk.

Risk management

Risks Description Mitigation

Operating environment The structural change in our operating environment and the pace of the transition from print Future continues to innovate, making available its special-interest content to consumers in remain a real risk. There is a risk that print circulation volumes and print advertising revenues print, where we have had a number of successful launches. We create best-in-class content to decline at a faster rate than anticipated and digital revenues do not grow at a rate to offset create an emotional connection with our audiences of engaged enthusiasts, who represent an the decline. attractive audience for advertisers. We become an integral part of the purchase cycle which can be monetised via affiliates and e-commerce.

Intellectual property Future uses, and grants licences to its licensees allowing them to use, various types of third- Future produces guidance and in-house training to educate its staff on the importance of party content including music, audiovisual material, photos, images and text. As a publisher, obtaining appropriate rights or licences and has a dedicated in-house rights management team. Future is responsible for any intellectual property or other infringement relating to the same and Future’s legal team reviews all significant licences relating to third-party content and, where as licensor, Future is responsible to its licensees. appropriate, seeks warranties and indemnities relating to the same. Future licenses content to third parties based on standard contracts which seek to limit Future’s liability.

Forecasting remains difficult in all consumer markets. As we diversify our revenue streams, Future’s forecasting in respect of innovative products will become easier as those products new activities are inherently more difficult to forecast accurately. develop a more consistent customer base and stable business models.

Advertising pipelines can be subject to slippage, with the risk that resulting revenue is pushed Careful monitoring of the pipeline and bookings to close the gap in the event of any shortfall. into later accounting periods.

The Group is exposed to interest rate risk and foreign exchange risk. The Directors consider Future’s exposure to interest rate and foreign exchange risk to be low and therefore there are no hedges in place (see note 24 to the financial statements for more detail).

The Group is exposed to credit risk in respect of its magazine distributors, in that it indemnifies Future regularly reviews the credit worthiness of key distributors and where appropriate them in the event of non-payment by the end customer. considers the need for credit insurance.

The significant issues considered in relation to the financial statements for the year ended Review by Audit Committee with external auditor. 30 September 2015 are set out in the Audit Committee section of the Corporate Governance report on page 27.

IT The business is increasingly dependent on technology. Future’s network has at least two diverse routes for all key offices and business-critical data is held on three highly resilient storage devices in different locations. In addition, all core In the event of a total network or server failure, or data loss, there would be a major impact on the switches are duplicated in different buildings so there are no single points of failure. Servers production of magazines, operation of websites and the operational effectiveness of the business. are distributed across two main data centre locations and several controlled server rooms in different buildings in Bath and San Francisco. Future can switch services from one server to another within a few hours. In addition, all mission-critical services have more than one server so there is no single point of failure. Further investment in the IT infrastructure has been made in 2015 and more is already underway in 2016.

Staff The Group’s strong reputation as a leading content provider makes its staff potentially attractive Future employs people who are passionate about their subject. Future offers a number of staff to competitors. There is a risk that key staff will move elsewhere if offered significant increases benefits and incentive programmes to attract and retain key staff, and steps are taken to ensure in remuneration with which Future is unable to compete. that the Group is not excessively reliant upon any one employee.

Personal data A loss of personal data or a cyber attack would trigger the need to notify users and the Future seeks to ensure all of its systems comply with best practice as regards to security and cyber fraud Information Commissioner’s Office (ICO) and Future may suffer reputational risk, as well as and has in place a plan to mitigate the effects of any hack. The Group is continually investing a significant financial penalty, if it is responsible for the breach. and upgrading its IT systems and processes to ensure that they are sufficiently robust and appropriate for the digital age.

No attacks were suffered in 2015. Annual Report and Accounts 2015 10 Strategic Report

Risk management There are a number of general business risks to which Future is naturally exposed in the UK and US. In addition, the range Risks Description Mitigation of industry-specific risks faced by Future has increased since last year, due to the Operating environment The structural change in our operating environment and the pace of the transition from print Future continues to innovate, making available its special-interest content to consumers in remain a real risk. There is a risk that print circulation volumes and print advertising revenues print, where we have had a number of successful launches. We create best-in-class content to increasingly digital focus of the media decline at a faster rate than anticipated and digital revenues do not grow at a rate to offset create an emotional connection with our audiences of engaged enthusiasts, who represent an landscape and the increasing number the decline. attractive audience for advertisers. We become an integral part of the purchase cycle which can of evolving business models. be monetised via affiliates and e-commerce.

Debt financing Future has a bank facility totalling £5.5m at 30 September 2015. Failure to comply with the Future continually monitors its cash flows and covenants and has operated within all its Our internal controls seek to minimise the financial covenants of the facility could result in additional finance costs and the possible covenants throughout the year. The existing facility expires in December 2017 with an option for impact of risks, as explained in our Corporate withdrawal of the facility. extension available. Governance report on pages 25 and 26, and during the year we have continued to develop those controls in response to the Intellectual property Future uses, and grants licences to its licensees allowing them to use, various types of third- Future produces guidance and in-house training to educate its staff on the importance of wider range of risks. party content including music, audiovisual material, photos, images and text. As a publisher, obtaining appropriate rights or licences and has a dedicated in-house rights management team. Future is responsible for any intellectual property or other infringement relating to the same and Future’s legal team reviews all significant licences relating to third-party content and, where as licensor, Future is responsible to its licensees. appropriate, seeks warranties and indemnities relating to the same. Future licenses content to third parties based on standard contracts which seek to limit Future’s liability.

Financial The long lag time for reporting on sales of exported printed copies continues to be an area of On printed product, in particular bookazines, a more conservative initial view on sales estimates Y 02. IF EV forecasting uncertainty. continues with emerging trends becoming more apparent. T A N L E U D A I . T 1 Forecasting remains difficult in all consumer markets. As we diversify our revenue streams, Future’s forecasting in respect of innovative products will become easier as those products E 0 new activities are inherently more difficult to forecast accurately. develop a more consistent customer base and stable business models. Future’s assessment

into later accounting periods. 3

. O

4 The Group is exposed to interest rate risk and foreign exchange risk. The Directors consider Future’s exposure to interest rate and foreign exchange risk to be low and 0 therefore there are no hedges in place (see note 24 to the financial statements for more detail).

The significant issues considered in relation to the financial statements for the year ended Review by Audit Committee with external auditor. 01 Identification of risks 30 September 2015 are set out in the Audit Committee section of the Corporate Governance report on page 27. 02 Evaluation of level of risks and controls in place to manage those risks IT The business is increasingly dependent on technology. Future’s network has at least two diverse routes for all key offices and business-critical data is held on three highly resilient storage devices in different locations. In addition, all core 03 Action taken to manage risks In the event of a total network or server failure, or data loss, there would be a major impact on the switches are duplicated in different buildings so there are no single points of failure. Servers production of magazines, operation of websites and the operational effectiveness of the business. are distributed across two main data centre locations and several controlled server rooms 04 Risks reported and monitored in different buildings in Bath and San Francisco. Future can switch services from one server to another within a few hours. In addition, all mission-critical services have more than one server so there is no single point of failure. Further investment in the IT infrastructure has been made in 2015 and more is already underway in 2016.

No attacks were suffered in 2015. 11 Future plc

Corporate responsibility Responsible business

Corporate responsibility is integral to the way Future conducts its business. We focus our efforts around three key areas where we think we can make a difference.

1. The environment Recycling and waste Policy on disability The Group is strongly incentivised to minimise The Group aims to ensure that when A responsible approach to the environment is the number of unsold magazines and we considering recruitment, training, career essential to ensure the future sustainability of employ sophisticated techniques to help development, promotion or any other aspect our business. achieve this. In the UK, Future’s unsold of employment, no employee or job applicant magazines are recycled. We also support is discriminated against, either directly or Sourcing paper the PPA’s initiative encouraging readers to indirectly, on the grounds of disability. Paper is the largest raw material we use as recycle their magazines after use and we a Group. We work hard to make sure that incorporate the WRAP recycle logo in all our If an employee became disabled while in whatever we consume, we do in a way that magazines. We comply with our obligations employment and as a result was unable to is ethically responsible and environmentally under the Producer Responsibility Obligations perform their duties, we would make every sustainable. In 2015, 100% of our paper across (Packaging Waste) Regulations. The disposal effort to offer suitable alternative employment the Group was sourced from either recycled of waste materials is also included in our print and assistance with retraining. fibre or sustainable forests where at least one supplier audit. tree is planted for every tree felled. In the UK, Internal communication Future holds the FSC (Forestry Stewardship Plastic packaging Future has policies on employee Council) Chain of Custody certification. This We use plastic film to package magazines communication, acceptable use of IT, health recognises Future’s commitment to sourcing at retail and to wrap subscriptions copies for and safety and whistle-blowing, and we have paper supplies from sustainable forests. mailing. Future is a member of the OPRL (On- a commitment to diversity and opportunity. Pack Recycling Label) scheme to encourage In 2015, over 90% of the paper we used in the readers to recycle plastic film. Some plastic We hold regular town hall sessions for all UK was FSC certified. We actively encourage films are unsuited to recycling and in these employees, and extended leadership team our suppliers to work towards FSC certification instances we use oxo-biodegradable film. meetings where we discuss key strategic or one of the other internationally recognised initiatives and the performance of the business. and independently audited certification Supplier audits In the UK we held an all company conference schemes for environmental care in forest We undertake environmental and ethical audits in October 2015. These initiatives ensure management and conservation on our main suppliers which include aspects that communication is constantly improving such as the processing and disposal of across the business, reinforce the building effluents, emissions and waste materials, and of a positive working environment where we the use of labour. celebrate successes and also help to ensure there is alignment across the business. Our environment is one where we encourage 2. Our people employees to freely give their views and contribute to initiatives, as this continuously Future’s employees are our most important develops and improves our offering for the assets; they are the driving force behind our benefit of our consumers and clients. success as a business.

Health and safety 3. The community The health and safety of all employees is a key priority for the Group. Future is largely Future in the wider community an office-based environment. All companies Future people have been actively involved across the Group comply with relevant in the year with a number of national legislation and we communicate our health organisations including the Professional and safety policy to all employees. In the UK, Publishers Association, European Magazine during the year to 30 September 2015, there Media Association, Association of Online were no fatalities, two reportable (RIDDOR) Publishers, NABS, European & Leisure Future in the UK holds injuries, and no minor injuries. There were Software Publishers Association, the IPA, FSC Chain of Custody no fatalities or injuries in the US or Australia the Marketing Society and the International certification. This recognises Future’s during this year. Federation of the Periodical Press. commitment to sourcing paper supplies from well managed forestry.

Employment data across the Group 2015 Split of female:male employees as at 30 September 2015 30%:70% Split of female:male Directors of the Company as at 30 September 2015 3:3 Split of female:male members of the Executive Committee as at 30 September 2015 1:5 We are members of the Earnings meet at least legal minimum or minimum set by industry Yes Professional Publishers Association (PPA) and Cases of reported and proven discrimination or harassment None support its initiative Consultation and communication procedures in place for all areas of the business Yes encouraging readers to recycle their magazines Code of conduct circulated to all existing and new employees Yes after use. We incorporate the recycle logo in all our Employment of young people under the age of 15 None UK magazines. Strategic Report

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W forestry. sustainable from paper (estimatedto be less than 0.5% of total emissions) andis deemed to be immaterial to overall reporting and trends. S F on averaged annual mileage. annual averaged on S are except of their own meters. S S Base Total Revenue Total per £1m) Intensity Ratio (CO2e Tonnes The purchase of electricity: heat, steam or cooling The purchase of electricity: heat, steam or cooling by the Group for its own use (Scope 2) Emissions (CO2e Tonnes) Total The combustion of fuel: gas for heating and fuel; The combustion of fuel: for vehicles (Scope 1) Emissions from Emissions

• Intensity • e • • cope • ugitive • cope • cope emissions fall under Scope 1 (the combustion of fuel) and Scope2 (the purchase of electricity). Notes: • cope financial Methodology: We tatements. calculate We The AnnualReport and Accounts 2015 Statement of Greenhouse Gas (GHG) Emissions for the Group Gas (GHG) Emissions for the Group Statement of Greenhouse Global GHG emissions in tonnes of CO 13 Future plc

Financial review Building momentum

The financial results demonstrate that after the completion of the transformation programme that commenced in 2014 the Group is gaining momentum.

Financial summary Digital and Diversified The financial review is based primarily on a comparison of continuing results for the year ended “ revenues now represent 30 September 2015 with those for the year ended 30 September 2014. Unless otherwise stated, 47% of Group revenues, change percentages relate to a comparison of these two periods.

up from 41% last 2015 2014 year, driven by strong Continuing operations £m £m Revenue 59.8 66.0 growth in events and EBITDAE 3.6 (7.0) e-commerce, two areas Depreciation charge (0.5) (1.0) of strategic importance. Amortisation of intangible assets (2.3) (2.3) ” Operating profit/(loss) pre-exceptional items 0.8 (10.3) Exceptional items (2.5) (7.5) Impairment - (16.8) Penny Ladkin-Brand Chief Financial Officer Operating loss (1.7) (34.6) and Company Secretary Net finance costs (0.6) (0.8) Loss before tax (2.3) (35.4)

Loss per share (p) (0.6) (10.5) Adjusted earnings/(loss) per share (p) 0.0 (3.2)

Revenue

Group revenue was £59.8m (2014: £66.0m) reflecting the continued decline in print revenues. UK revenue was £47.3m (2014: £53.1m) and in the US £13.4m (2014: £13.7m).

Digital and Diversified revenues now represent 47% of Group revenues, up from 41% last year, driven by strong growth in events and e-commerce, two areas of strategic importance. Digital display advertising revenue grew by 14% and overall Digital & Diversified revenue grew by 3%. Digital and Diversified Defined: 2015 2014 £m £m • Digital circulation Digital and Diversified 28.1 27.3 • Digital advertising Print 31.7 38.7 • Digital commerce Total revenue 59.8 66.0 • FutureFolio • Future Fusion In the UK, Digital and Diversified revenues increased by 2% with significant growth in events and • Events e-commerce being partly offset by a decline in digital editions of magazines. In only its second year, The Photography Show at Birmingham’s NEC generated revenue growth of over 40% year- on-year, which has partially offset the continued decrease in print revenue. Financial Review 14 41% 47%

2 1 1 Diversified Diversified 2

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Group revenue 2014 1: 2: igital rint 59% 1: 2: igital rint 53% Group revenue 2015

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The tax credit for the year amounted comprising £0.5m), to £0.3m (2014: a current tax credit of £0.3m) and£0.3m a deferred (2014: tax charge £0.2m of £nil credit). (2014: The current tax credit arises in the UK where the standard rate of corporation tax is 20.5%. Overall the effective rate for the Group when applied to the loss before tax was The 13%. Group continues to focus on compliance with tax authorities in all territories in which it operates. Taxation refinancing The Group pre-tax loss was £35.4m). £2.3m (2014: Net finance costs Net relate of a UK property and a bad debt credit of £0.4m represents a partial reversal of the prior year provision. exceptional Exceptional items Exceptional Restructuring costs were £7.5m). £2.5m (2014: costs of £2.8m include headcount reduction and the rationalisation of the property portfolio. Vacant property provisions of £0.4m the employees considerably lower like-for-like overhead base. The (2014: The EBITDAE Digital advertising in the UK now of 63%) UK advertising represents (2014: 71% revenues. In e-commerce revenues. Circulation revenue overall fell by 16%. Advertising revenues grew by 18%, where growth in digital advertising more than offset the decline in print advertising. Digital advertising in the USnow represents of US advertising 73%) 82% (2014: revenues. AnnualReport and Accounts 2015 15 Future plc

Financial review

(Loss)/earnings per share

2015 2014 Basic loss per share (p) (0.6) (10.5) Adjusted earnings/(loss) per share (p) 0.0 (3.2)

Adjusted earnings/(loss) per share is based on the loss after taxation which is then adjusted to exclude exceptional items, impairment and related tax effects. The continuing adjusted profit after tax amounted to £0.1m (2014: £10.6m loss) and the weighted average number of shares in issue was 333m (2014: 332m).

Dividend

The Board is not recommending a final dividend for the year.

Cash flow and net debt

Net debt at 30 September 2015 was £1.8m (2014: net cash £7.5m), a decrease of £9.3m in the year.

During the year net cash outflows totalled £9.5m (2014: £14.5m inflow). There was a cash outflow 3 1 from operations before exceptional items of £2.3m (2014: £4.3m inflow) arising from an increase in the working capital cycle as the business mix changed. There were also £5.2m (2014: £4.6m) of restructuring payments made in the year and £2.0m (2014: £2.6m) of capital expenditure. The sale of one of the Group’s UK properties amounted to a £1.2m cash inflow (2014: £nil). Foreign exchange and other movements accounted for the balance of cash flows.

2 Credit facility and covenants The Group successfully refinanced during the year, with facilities of up to £5.5m at 30 September 2015. This amended facility expires on 31 December 2017 with the option of Group revenue 2015 further extension available.

1: Digital and Diversified 47% The Group was in compliance with all the covenants under the new facility at 30 September 2015. 2: UK Print 46% 3: US Print 7% Further details are set out in note 21. Financial Review 16

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and Company Secretary Company and 2015 December 15 Penny Ladkin-BrandPenny Chief The Executive’s responsibility sections) and the Financial Review are approved by the Board of Directors and signed on its behalf by: Now that the transformation programme is complete the Group moves into a period of optimisation, with additional £3.3m by a placing of shares post year-end. The Group is well placed to achieve its ambitions and for 2016 beyond. Conclusion Key performance indicators (KPIs) Management performance, the most important of these KPIs are set out on page 8. Post balance sheet event On 27 November the Group 2015 announced it had raised £3.3m by of way a placing of Ordinary shares in Futureplc. future. For these reasons the Directors continue to adopt the going concern basis in preparing the consolidated Going concern After due consideration, the Directors have concluded that there is a reasonable expectation that AnnualReport and Accounts 2015 17 Future plc

Board of Directors Strong leadership

Peter Allen Zillah Byng-Thorne Independent non-executive Chairman Chief Executive

Penny Ladkin-Brand Manjit Wolstenholme Chief Financial Officer and Senior independent Company Secretary non-executive

Hugo Drayton Mark Wood Independent non-executive Non-executive Annual Report and Accounts 2015 18

Peter Allen Zillah Byng-Thorne Chairman Chief Executive sln Zillah was appointed as Chief Executive on Peter was named Chairman in August 2011. 1 April 2014. She joined Future in November He was Chief Financial Officer of Celltech 2013 as Chief Financial Officer and Company Group plc between 1992 and 2004. In 2003 he Secretary. Prior to her appointment to the was also appointed Deputy Chief Executive Future plc Board, she was CFO of Trader Officer of Celltech until the company was sold Media Group – owner of Auto Trader – from in 2004. He was Chief Financial Officer of the 2009 to 2012, and interim CEO of Trader electronics company Abacus Group plc from Media from 2012 to 2013. Before this, Zillah 2005 until the company was sold to Avnet Inc was Commercial Director and CFO at Fitness in January 2009. Peter is currently Chairman First Limited and Chief Financial Officer of the of Clinigen plc, Advanced Medical Solutions Thresher Group. Zillah is currently a non- Group plc, Oxford Nanopore Technologies executive Director of Betfair plc. Limited and Diurnal Limited.

Penny Ladkin-Brand Manjit Wolstenholme Chief Financial Officer Senior independent non-executive and Company Secretary sln

Penny was appointed as Chief Financial Officer Manjit joined Future as the senior non- and Company Secretary on 3 August 2015, executive Director in February 2011. She having joined the business as interim Chief is Chairman of Provident Financial plc and Financial Officer in June 2015. Prior to this she CALA Group, and a non-executive Director was Commercial Director at AutoTrader Group of Unite Group plc and Aviva Investors. After Corporate Governance plc. Penny is a chartered accountant with a qualifying as a chartered accountant in 1988 background in digital media and expertise in with PricewaterhouseCoopers, Manjit spent digital monetisation models. 13 years with Dresdner Kleinwort, latterly as co-head of investment banking including more than a decade specialising in the media sector. She was a partner at Gleacher Shacklock from 2004 to 2006

Hugo Drayton Mark Wood Independent non-executive Non-executive sl Mark joined Future in April 2009 as an Hugo joined Future on 1 December 2014. independent non-executive Director. He was He is CEO of the advertising technology appointed as Chief Executive of Future UK in business, InSkin Media. Prior to ISM, he spent September 2010 and Chief Executive of Future two years as CEO of behavioural targeting plc in October 2011. He stepped down as Chief specialist, Phorm, following two years as Executive on 1 April 2014 and was appointed European Managing Director of Advertising. as a non-executive Director. Before joining com. He spent 10 years at The Telegraph Future, Mark was Chief Executive of ITN, Group, as Group Managing Director, and the television news organisation, where he previously as Marketing & New Media developed a range of digital ventures, including s Director. Hugo is a Trustee of the British a world-leading digital image business. Prior Member of the Skin Foundation, chaired the British Internet to ITN, Mark was Editor-in-Chief and Head of Nomination Publishers’ Alliance, and is a regular contributor Media at Reuters. He began his career as a Committee to trade press and publishing conferences. foreign correspondent for Reuters and was l based in Berlin, Moscow, Bonn and Vienna. Member of the Mark is Chief Executive of Ten Alps plc. Mark Remuneration has decided not to seek re-election to the Committee Board at the AGM in February 2016. n Member of the Audit Committee 19 Future plc

Directors’ report Directors’ report

For the year ended The information presented in this Directors’ report relates to 30 September 2015 Future plc and its subsidiaries. The Chairman’s statement, Chief Executive’s review, Financial review and Corporate responsibility statement are each incorporated by reference into, and form part of, this Directors’ report.

Principal activity Result of 2015 Annual General Meeting Financial Conduct Authority), there are no restrictions on the voting rights attaching to The principal activity of the Company and All resolutions put to the Annual General the Ordinary shares or on the transfer of the its subsidiaries (the ‘Group’) as a whole is Meeting held on 4 February 2015 were Ordinary shares. The Articles of Association the publishing of special-interest consumer passed unanimously on a show of hands. may be amended only by a special resolution magazines, apps and websites, and the Shareholders holding more than 73% of all of the Company’s shareholders. operation of events notably in the areas of: issued shares submitted proxy votes and of Technology; Games and Entertainment; and these, more than 95% were cast in favour of Details of all movements in share capital Photography and Creative. all resolutions. are given in note 25 on page 75. As at 30 September 2015, the number of shares in The Company is incorporated and domiciled in issue was 334.4 million. This represents a the UK and has subsidiaries operating in the Reported financial results small increase of 0.2% compared with the UK, the US and Australia. number of shares in issue as at 30 September The audited financial statements for the 2014. All of the new shares were issued in year ended 30 September 2015 are set out satisfaction of employee share awards vesting Business review on pages 43 to 79. Details of the Group’s or Share Incentive Plan matching share awards results are set out in the consolidated income during the year. The purpose of the Annual Report is to provide statement on page 44 and in the notes to the information to the shareholders of the Company. financial statements on pages 54 to 79. Directors Reviews of the Group’s activities during the year, the position at the year-end and Dividends Biographical details of the Directors holding developments since then are set out in the office as at 15 December 2015 are set out on Chairman’s statement, Chief Executive’s The Board’s policy is that dividends should be page 18. review, the Corporate Governance report and covered at least twice by adjusted earnings per the Financial review. The Financial review and share. The Company’s Employee Benefit Trust Directors’ shareholdings in the Company’s Strategic report explain financial performance, (EBT) waives its entitlement to any dividends. share capital are set out opposite. No Director KPIs, the position at the year-end, any post has any interest in any other share capital of balance sheet events, any likely future the Company or any other Group company, nor developments and a description of the principal Share capital does any Director have a material interest in risks and uncertainties facing the Group and any contract of significance to the Group. how these are managed. The Company has a single class of share capital which is divided into Ordinary shares The Annual Report contains certain of one penny each. The rights and obligations Significant agreements forward-looking statements with respect to attaching to the Company’s Ordinary shares the operations, performance and financial and provisions governing the appointment and The provisions of the European Directive on condition of the Group. By their nature, these replacement of, as well as the powers of, the Takeover Bids (as implemented in the UK in statements involve uncertainty since future Directors, are set out in the Company’s the Companies Act 2006) require the Company events and circumstances can cause results Articles of Association, copies of which can to disclose any significant agreements which to differ from those anticipated. The forward- be obtained from Companies House in the UK take effect, alter or terminate upon a change of looking statements reflect knowledge and or by writing to the Company Secretary. Save control of the Company. In common with many information available at the date of preparation for restrictions that may from time to time be other companies, the Group’s bank facility of this Annual Report and the Company set out in the Company’s Articles of (details of which are set out in note 21 on page undertakes no obligation to update those Association or imposed by laws and 70) is terminable upon change of control of the forward-looking statements. regulations (including the Listing Rules of the Company. In common with market practice,

Significant shareholdings

At 15 December 2015, the Company had been notified of the following significant interests in its Ordinary shares:

Percentage of Shareholder Number of shares issued share capital Aberforth Partners LLP 96,694,195 26.28% Schroders Plc 89,121,792 24.23% Henderson 67,120,132 18.24% Investec Asset Management Ltd 28,892,556 7.85% UBS 28,724,211 7.81% Herald Investment 20,765,000 5.64% 331,317,886 90.05% Directors’ holdings (see opposite) 2,594,258 0.71% Total of significant holdings 333,912,144 90.76% Total number of shares in issue 367,887,141 100% Annual Report and Accounts 2015 20

Directors’ shareholdings (audited)

Balance as at Purchases Balance as at Directors in office at 30 September 2015 30 September 2014 during the year 30 September 2015 Executive Zillah Byng-Thorne 191,738 229,631 421,369 Penny Ladkin-Brand - - - Non-executive Peter Allen 800,000 200,000 1,000,000 Manjit Wolstenholme 87,889 120,000 207,889 Mark Wood - - - Hugo Drayton - - - Total 1,079,627 549,631 1,629,258

Notes: 1. All holdings are beneficial. 2. On 27 November 2015, Zillah Byng-Thorne purchased 670,000 shares and on 4 December 2015 Zillah Byng-Thorne transferred these shares to her personal SIPP by way of an on-market sale and purchase, resulting in a total holding of 1,091,369 shares. Also on 27 November 2015 Penny Ladkin-Brand purchased 150,000 shares resulting in a total holding of 150,000 shares, Peter Allen purchased 100,000 shares resulting in a total holding of 1,100,000 shares and Manjit Wolstenholme purchased 45,000 shares resulting in a total holding of 252,889 shares. 3. Details of the share options and awards for executive Directors are set out on page 33. No such options or awards are granted to non-executive Directors. However, Mark Wood continues to hold options over shares in the Company that were awarded to him as Chief Executive. Details of such awards are also set out on page 33.

awards under certain of the Group’s long- considered will be able to take the relevant together with the reports of the Directors and term incentive plans (details of which are set decision and in taking the decision the auditors. The audited financial statements out in the Directors’ remuneration report on Directors act in a way they consider, in appear on pages 43 to 79. page 31 and note 26 on page 75) will vest or good faith, will be most likely to promote the potentially be exchangeable into awards over Company’s success); and (iii) records are a purchaser’s share capital upon change of kept of conflicts of interest and authorisations. Ordinary resolution 2 – Directors’ Corporate Governance control of the Company. There is also a change The Directors are satisfied that the Board’s remuneration implementation report of control provision in the service agreements powers of authorisation of conflicts are of the two executive Directors, exercisable operating effectively and that the procedures Shareholders will be asked to approve the within three months of a change of control by have been followed. The procedures and Directors’ remuneration implementation report the Company or on one month’s notice by the any authorisations will continue to be for the financial year ended 30 September executive to expire no later than three months reviewed annually. 2015, which is set out on pages 30 to 35. from the date of the change of control.

Corporate responsibility Ordinary resolutions 3 to 7 – Election Financial instruments of Penny Ladkin-Brand and annual The Board considers that issues of corporate re-election of other Directors Information in relation to the Group’s use of responsibility are important. The Board’s financial instruments is set out in note 24 on report, including the Group’s policies on Following Penny Ladkin-Brand’s appointment pages 71 to 74. employee involvement and disability, and a to the Board on 3 August 2015, she stands for statement on Greenhouse Gas Emissions for election to confirm her appointment. the Group, is set out on pages 11 and 12. Corporate governance Consistent with our policy since 2004, all Directors with the exception of Mark Wood, The Board’s report on this subject is set out on Annual General Meeting 2016 who has elected not to stand, are proposed for pages 23 to 28. re-election. Biographical details of all Directors At the Company’s seventeenth Annual are set out on page 18. General Meeting, which will be held on Political contributions Wednesday 3 February 2016 at 10:30am at Following a rigorous evaluation and taking Future’s London office at 1-10 Praed Mews, into account the need for progressive No political contributions were made during London, W2 1QY, a number of resolutions refreshing of the Board, the Board confirms either the current or prior years. will be proposed. The resolutions are set that the performance of each executive and out in the Notice of Annual General Meeting non-executive Director of the Company on pages 80 to 81 and an explanation of all continues to be effective and demonstrates Conflicts of interest proposed resolutions is provided below. commitment to the role. The Nomination Committee has carefully considered the The Board has a set of procedures to ensure time commitments required from and the that: (i) conflicts of interest are raised by Ordinary resolution 1 – Financial contribution made by each Director and Directors (and any potential Directors prior statements both the Nomination Committee and the to appointment); (ii) appropriate guidelines Board unanimously recommend that Penny are followed before any conflict is authorised Shareholders will be asked to approve the Ladkin-Brand be elected as a Director (including ensuring that only Directors who financial statements of the Company for the and each Director standing for re-election have no interest in the matter being financial year ended 30 September 2015, be re-elected. 21 Future plc

Directors’ report

For the year ended 30 September 2015

Ordinary resolutions 8 and 9 – Auditors under paragraph 10.1 of the Notice of require a company to offer all allotments AGM, they will all stand for re-election for cash first to existing shareholders in A resolution proposing the reappointment of at the following AGM. proportion to their holdings). The relevant PricewaterhouseCoopers LLP as auditors of circumstances are either where the allotment the Company and authorising the Directors to The Directors do not have any present takes place in connection with a rights issue determine their remuneration will be proposed intention of exercising this authority other than or the allotment is limited to a maximum at the Annual General Meeting. An explanation in connection with any exercises under share nominal amount of £367,880, representing regarding the Board’s proposal to reappoint option and other share incentive schemes, approximately 10% of the nominal value PricewaterhouseCoopers LLP as auditors can but intend to seek this authority each year. of the issued ordinary share capital of be found on pages 27 and 28 in the Corporate In addition, there may be circumstances the Company as at 15 December 2015 Governance report. where it would be appropriate for the being the latest practicable date before Company to issue new Ordinary shares, publication of this notice. Unless revoked, such as an acquisition where it might be varied or extended, this authority will expire Ordinary resolution 10 – To authorise appropriate for the consideration to be settled at the conclusion of the next AGM of the the Directors to issue and allot new in whole, or in part, by the issue of new Company or 31 March 2017, whichever is Ordinary shares Ordinary shares. The Company does not the earlier. The Board confirms that it will hold any shares in treasury. only allot shares representing more than 5% Under the provisions of section 551 of the of the issued ordinary share capital of the Companies Act 2006 (the 2006 Act), the Company (excluding treasury shares) for Directors may allot and issue Ordinary Ordinary resolution 11 – Approval of cash pursuant to the authority referred to in shares only if authorised to do so by the political donations paragraph (b) of resolution 12, where that Company’s Articles of Association or by allotment is in connection with an acquisition shareholders at a shareholders’ meeting. It remains the policy of the Company not to or specified capital investment (within the Consistent with guidance issued by the make political donations or to incur political meaning given in the Pre–Emption Group’s Association of British Insurers (ABI) this expenditure, as those expressions are Statement of Principles) which is announced resolution will, if passed, authorise the normally understood. However, following contemporaneously with the allotment, or Directors to allot shares up to a maximum broader definitions introduced by the 2006 which has taken place in the preceding nominal value of £2,452,500 as follows: Act, the Directors continue to propose a six-month period and is disclosed in the resolution designed to avoid inadvertent announcement of the allotment. In respect (a) i n relation to a pre-emptive rights issue infringement of these definitions. of the authority referred to in paragraph (b) only, equity securities (as defined by of resolution 12, the Board also confirms section 560 of the 2006 Act) up to a The 2006 Act requires companies to obtain its intention to follow the provisions of the maximum nominal amount of £2,452,500 shareholders’ authority for donations to Pre–Emption Group’s Statement of Principles which represents approximately two thirds registered political parties and other political regarding cumulative usage of authorities of the Company’s issued Ordinary shares organisations totalling more than £5,000 in within a rolling three–year period where the (excluding treasury shares) as at any 12-month period, and for any political Principles provide that usage in excess of 15 December 2015. This maximum expenditure, subject to limited exceptions. 7.5% of issued ordinary share capital of the is reduced by the nominal amount of The definition of donation in this context Company (excluding treasury shares) should any Relevant Securities allotted under is very wide and extends to bodies such not take place without prior consultation with paragraph 10.2 of the Notice of AGM; and as those concerned with policy review, shareholders, except in connection with an law reform and the representation of the acquisition or specified capital investment as (b) in any other case, Relevant Securities business community. It could also include referred to above. up to a maximum nominal amount of special interest groups, such as those £1,226,250 which represents just under involved with the environment, which the one third of the Company’s issued Company and its subsidiaries might wish to Special resolution 13 – General Ordinary shares as at 15 December support, even though these activities are not meetings on 14 days’ notice 2015. This maximum is reduced by the designed to support or to influence support nominal amount of any equity securities for any particular political party. Notice periods for AGMs must give at least 21 allotted under paragraph 10.1 of the days’ clear notice. For other general meetings, Notice of AGM in excess of £1,226,250. the old minimum notice period of 14 days If granted, this authority would replace Special resolution 12 – Disapplication was increased to 21 days by the Companies all previous authorities granted in this of statutory pre-emption rights (Shareholders’ Rights) Regulations 2009, connection. The authority granted by this unless shareholders approve a shorter period resolution will expire on 31 March 2017 Resolution 12 authorises the Directors of at least 14 clear days. In the interests of or, if earlier, following the conclusion in certain circumstances to allot equity greater efficiency, resolution 13 seeks to of the next AGM of the Company. If the securities for cash other than in accordance renew approval for notice periods of at least Directors exercise the authority granted with the statutory pre-emption rights (which 14 clear days. Annual Report and Accounts 2015 22

Action to be taken Statement of Directors’ responsibilities governing the preparation and dissemination of financial statements may differ from legislation A form of proxy is included with this Annual The Directors are responsible for preparing in other jurisdictions. Report for use in connection with the Annual the Annual Report, the Directors’ remuneration General Meeting. Please complete and return report and the financial statements in Each of the Directors, whose names and the form in accordance with the instructions accordance with applicable law and regulations. functions are listed in the Board of Directors printed on it to Computershare Investor section on pages 17 and 18, confirm that to the Services PLC, The Pavilions, Bridgwater Road, Company law requires the Directors to best of their knowledge: Bristol BS99 6ZY as soon as possible and, in prepare financial statements for each any event, no later than 10:30am on Monday 1 financial year. Under that law the Directors (a) the Group financial statements, which have February 2016. The return of the form of proxy have prepared the Group and Parent been prepared in accordance with IFRSs will not prevent you from attending the Annual company financial statements in accordance as adopted by the EU, give a true and General Meeting and voting in person if you with International Financial Reporting fair view of the assets, liabilities, financial wish to do so. Further information about the Standards (IFRSs) as adopted by the position and loss of the Group; and AGM, including about electronic appointment European Union. Under company law the of proxies, is provided on pages 82 to 84. Directors must not approve the financial (b) the Strategic report and Financial review statements unless they are satisfied that include a fair review of the development they give a true and fair view of the state of and performance of the business and Recommendations affairs of the Group and the Company and of the position of the Group, together with the profit or loss of the Group for that period. a description of the principal risks and The Board believes that each of the resolutions In preparing these financial statements, the uncertainties that it faces; and to be proposed at the Annual General Meeting Directors are required to: is in the best interests of the Company and Approved by the Board of Directors and signed its shareholders as a whole. Accordingly, the :: select suitable accounting policies and then on its behalf by: Directors unanimously recommend that you apply them consistently; vote in favour of all of the resolutions proposed, as they intend to do in respect of their own :: make judgements and accounting beneficial holdings. estimates that are reasonable and prudent;

:: state whether applicable IFRSs as adopted

Annual General Meeting procedures by the European Union have been followed, Penny Ladkin-Brand Corporate Governance and result subject to any material departures disclosed Chief Financial Officer and explained in the financial statements; and Company Secretary As in previous years, the Company will: (a) 15 December 2015 indicate the level of proxies lodged on each :: prepare the financial statements on resolution together with the balance for and the going concern basis unless it is against each resolution and the number of inappropriate to presume that the Company abstentions; (b) announce the results of voting will continue in business. to the London Stock Exchange; and (c) post the results of voting on our corporate website, The Directors are responsible for keeping www.futureplc.com. adequate accounting records that are sufficient to show and explain the Company’s transactions and disclose with reasonable accuracy at any Disclosure of information to time the financial position of the Company the auditors and the Group and enable them to ensure that the financial statements and the Directors’ The Directors confirm that they have complied remuneration report comply with the Companies with the relevant provisions of the 2006 Act in Act 2006 and, as regards the Group financial preparing the financial statements. statements, Article 4 of the IAS Regulation. They are also responsible for safeguarding the assets In addition, each of the Directors confirms that, of the Company and the Group and hence for so far as they are aware, there is no relevant taking reasonable steps for the prevention and audit information of which the auditors are detection of fraud and other irregularities. unaware. Each Director has taken all reasonable steps to ensure that they are aware of any The Directors are responsible for the relevant audit information and that the auditors maintenance and integrity of the Company’s are aware of any relevant audit information. website. Legislation in the United Kingdom 23 Future plc

Corporate Governance Good Practice report Effective corporate governance requires not just compliance with legislative and regulatory requirements, but also applying the principle of good governance in the boardroom and throughout the business.

Our approach to corporate of the business and in ensuring that corporate Although Standard governance governance remains at the top of the agenda. “ Listed, we continue to The non-executive Directors all serve three- comply with the spirit In this report, we provide detail on the role year terms, terminable by either party on three of the Board of Directors, followed by a more months’ notice at any time and subject to their of the Corporate detailed focus on the work of each of the three election and annual re-election or removal by key committees: the Audit Committee, the shareholders. Although annual re-election is Governance Code. Nomination Committee and the Remuneration not a requirement for Future, we believe it is the ” Committee. Together, these give a clear best way to ensure non-executives are directly insight into how we manage corporate accountable to shareholders. governance principles and processes within Penny Ladkin-Brand the Group. All of the non-executive Directors, with the Chief Financial Officer exception of Mark Wood, are considered to be and Company Secretary On 13 August 2014, the Group moved from a independent by the Board. Mark Wood was Premium Listing to a Standard Listing on the Chief Executive of Future plc until 1 April 2014 Official List. and holds options over shares in the Company which were granted to him during his time as As a Standard Listed entity the Group is not Chief Executive. Consequently, the Board does required to comply with the requirements of the not consider that Mark Wood meets the relevant UK Corporate Governance Code (September independence criteria. Manjit Wolstenholme is 2014) (the “Code”) and therefore the Group has the Senior independent non-executive Director. not adopted the Code, however the Directors There is a genuine mix of views and insights, as continue to comply with the spirit of the Code. well as experience.

Each non-executive Director is expected to 1. Board of Directors commit 20 days a year to their role to allow for preparation for, and attendance at, Board and Membership of the Board Committee meetings and keeping in touch with The Board consists of two executive and the senior management team, shareholders and four non-executive Directors. Biographies other stakeholders. of Directors and details of their other time commitments are set out on page 18. Roles of the Chairman and Chief Executive The duties and responsibilities of the Board Board changes during the year are effectively divided so that the Chairman Richard Haley was appointed to the Board as leads the Board and the Chief Executive leads Chief Financial Officer and Company Secretary the business. Quick find contents on 1 October 2014 and resigned from these positions on 9 July 2015. Zillah Byng-Thorne Board meetings was appointed Company Secretary in the The Board had nine scheduled meetings during Board of Directors interim period between Richard’s resignation the financial year and attendance is summarised Page 23 and the appointment of his successor. Penny below. The Board had one unscheduled Ladkin-Brand was appointed to the Board as telephone meeting to deal with matters that Audit Committee Chief Financial Officer and Company Secretary arose during the year, during which the Page 26 on 3 August 2015. Chairman and Chief Executive were present.

Nomination Committee On 1 December 2014, Mark Whiteling stood All Directors are aware of the need to be Page 28 down as a non-executive Director and Hugo available and there is a clear contact process. Drayton was appointed in his place. There Board meetings are sometimes preceded by Remuneration Committee were no other changes during the year to an informal dinner where Board Directors can Page 28 30 September 2015, however subsequent to meet with and discuss business issues with the the year-end Mark Wood signalled his intention Group’s senior management team. not to seek re-election to the Board. There is a regular and comprehensive Role of the non-executive Directors exchange of information between meetings to The non-executives play a critical role on the ensure Board members are well informed to Board in overseeing and scrutinising the running participate effectively in meetings. Directors Annual Report and Accounts 2015 24

receive a Board pack before each meeting with Board decisions are made unanimously minutes of the previous meeting, all papers whenever possible, but can be made by for agenda items, a report from the Company majority. If Directors have concerns that Secretary summarising any key legal issues cannot be resolved about the running of the and providing any regulatory/legislative Company or a proposed action, their concerns updates, and a summary of share ownership are recorded in the minutes. No such concerns and recent share dealing. Similar packs are arose in the year. The Board regularly appoints i provided for all Committee meetings. Between a sub-committee consisting of at least two meetings, the Board receives a monthly Board Directors in order to finalise and approve those report written by the executive Directors matters that have been approved in principle Terms of reference for the which summarises financial and operational by the Board, subject to final amendments only. Audit, Remuneration and performance and provides updates on key A permanent sub-committee consisting of at Nomination Committees programmes within the business. least two Directors exists to approve the issue and allotment of new shares in satisfaction of The terms of reference for all There is a written schedule of matters reserved employee share schemes. Committees are available on for the Board which sets out those matters the Company’s website at that require Board approval including setting The Board has a number of nominated strategy, approving budgets and financial advisers (as listed on page 86). During the www.futureplc.com statements and setting up policies. This last financial year meetings were regularly schedule was reviewed in July 2015 and it was held with key advisers to keep them aware noted that 39 matters had been considered of issues, and PricewaterhouseCoopers LLP by the Board during the year. The schedule is attended Audit Committee meetings and available on the Company’s website at www. briefings with members of the executive and futureplc.com. The Board delegates day-to- senior finance teams. day operational matters to the Group’s senior management team. Advice and support All Directors have access to the Company

Secretary who can advise them on issues Corporate Governance Attendance Director (9 scheduled meetings) of governance, best practice and any other legislative or regulatory matters. Peter Allen 9 of 9 Zillah Byng-Thorne 9 of 9 The appointment and removal of the Company Manjit Wolstenholme 9 of 9 Secretary is a Board decision. The Directors may also take independent professional Mark Wood 9 of 9 advice at the Company’s expense provided Hugo Drayton that they give notice to the Chairman. No 7 of 7 (appointed 1 December 2014) such advice was sought during 2015. The Company maintains appropriate insurance for Penny Ladkin-Brand 2 of 2 its Directors. (appointed 3 August 2015) Effective Development Richard Haley (appointed 1 October 2014 7 of 7 Training and induction and resigned 9 July 2015) The Board’s training and development policy requires that all new Directors should Mark Whiteling 2 of 2 receive appropriate induction on joining (resigned 1 December 2014) the Board, both in respect of the Group’s

Summary of performance evaluation

Objectives for 2015 Steps taken during 2015

Complete the restructuring of the Group Transformation programme has been completed and optimisation phase commenced

Support management with growth in the US US delivered EBITDAE profit for the first time in five years. 25 Future plc

Corporate Governance report

activities as a whole and of each operating Credit facility company individually. Ongoing training In May 2015, the Company arranged new bank for Directors is available as appropriate facilities totalling £5.5m with Santander which The Board completed a whether by presentations to the Board by run until 31 December 2017, with an option of senior management or more formally where further extension. “ self-performance individual Directors request training on evaluation as we specific issues. The training and development Financial covenant compliance needs of each individual Director are Key covenants are tested quarterly. The continue to adopt the assessed and discussed as part of the annual Group has covenants in respect of net debt/ Board performance evaluation process. The bank EBITDA(E), bank EBITDA(E)/interest and spirit of the Code. Board encourages appropriate training, and capital expenditure, all of which were met at ” regular updates and refresher sessions are 30 September 2015. provided by the Company Secretary and the Company’s legal advisers and auditors, to Risk management and internal controls Peter Allen inform the Board or relevant Committees of Details of the principal risks and the Group’s Chairman important changes in legislation, regulation approach to managing them are set out on and best practice. pages 9 and 10. The Board conducted an annual review of financial, operational, Performance evaluation legal and compliance risks with the assistance of members of the Group legal The Directors completed a detailed Board and finance teams and the Executive performance evaluation questionnaire as Committee to ensure that there is a sound part of the annual performance evaluation system of internal controls in place and that process. Each questionnaire was analysed these are sufficient to manage (rather than and the results were presented to the Board eliminate) those risks effectively. No for discussion. The Chairman discussed significant failings or weaknesses were the Board’s performance during the year identified as part of this review. and any specific requirements for training and development with each Director. During The internal controls that are in place to ensure the process the Board also compared effective risk management are structured its performance with the results and to ensure a timely flow of information within recommendations from the prior year’s the Group and a clear structure of delegated performance evaluations and noted that authority and responsibility. The main features the Board had made significant progress of the Group’s internal control and risk in dealing with the risks and challenges management systems are explained further in identified for the year. The Board considers the following paragraphs. this exercise to be of significant value in ensuring a functional and effective Board The Board approves a set of control and Committees. documents which specify:

The Chairman also met with the non-executive (i) various financial and treasury policies to Directors during the year without the executive be followed across the Group; and Directors, in order to assess the performance of the executive Directors. (ii) the powers of delegated authority across the Group. Going concern The Directors are required to make an The Group finance team manages the financial assessment of the Group’s ability to continue reporting processes ensuring that there is to trade as a going concern. After due appropriate control and review of the financial consideration, the Directors have concluded information including the production of the that there is a reasonable expectation that the consolidated financial statements. Group Group has adequate resources to continue finance is supported by operational finance in operational existence for the foreseeable managers throughout the Group who have the future. For this reason they continue to adopt responsibility and accountability to provide the going concern basis in preparing the information in accordance with our policies Group’s financial statements. and procedures. Annual Report and Accounts 2015 26

The Executive Committee hold monthly of views as expressed by shareholders during management meetings with combined UK and meetings held with Directors or as reported US senior management in order to provide a to Directors through the Company’s brokers, proper opportunity for financial results and together with copies of analysts’ notes, press other business and operational issues to be articles and other relevant information. explored and addressed in a timely manner.

Internal audit 2. Audit Committee The Audit Committee and the Board have again during 2015 reconsidered whether Attendance there is a need for an internal audit function. Member (3 scheduled meetings) It was concluded that, whilst an independent internal audit department with the necessary Mark Whiteling 1 of 1 technical skills is not currently justified, the (Chairman resigned Committee should continue to review this 1 December 2014) subject each year. Peter Allen 3 of 3

Whistle-blowing policy Manjit Wolstenholme1 3 of 3 As part of its internal controls, the Group (Chairman from has a whistle-blowing policy which is updated 1 December 2014) regularly and published on the Group’s intranet to encourage employees to report, 1. T he Chairman of the Committee, Manjit Wolstenholme, has in good faith, any genuine suspicions of fraud, recent and relevant financial experience. bribery or malpractice in order to identify any problems within the Group at an early stage. The Audit Committee’s primary objective is The policy is also designed to ensure that to provide effective financial governance and any employee who raises a genuine concern monitor the integrity of the Group’s financial is protected. statements and internal controls. Corporate Governance

Relations with shareholders/ The Audit Committee meets before the interim communication and annual results announcements and reviews We aim to have an open relationship with the relevant financial results with the executive our shareholders, and shareholders can find management team and the external auditors. up-to-date information on Group activities on The Audit Committee also meets separately the Company’s website at www.futureplc.com. for the purposes of planning the audit process, There is a specific Investor Relations section monitoring its effectiveness, reviewing the on that site which includes links to all of the Group’s relationship with the external auditors Group’s public announcements made via the and undertaking a detailed review of the Group’s Regulatory News Service of the London Stock internal controls and risk management systems. i Exchange including the Company’s latest It considered whether the 2015 Annual Report annual and interim results. was fair, balanced and understandable and Re-election of Directors advised the Board accordingly. All Directors are available to meet We are not required to offer shareholders at the AGM or on request The Audit Committee carries out the functions all our Directors up for annual by contacting the Chairman or Company required by rule 7.1.3 of the Disclosure and election, however, all our Secretary. Because more than 80% of Transparency Rules. Directors take individual and the Company’s shares are held by major collective responsibility for institutions, the executive Directors hold a Significant financial reporting judgements the decisions that the Board series of meetings presenting the interim and The Audit Committee discussed the key risks makes and are happy to let annual results to these institutions in order to and judgements with management and the shareholders judge their update them on the progress of the business auditors as part of the audit planning process in performance by standing for and gauge their views following the analyst July 2015. At the same time they discussed and annual re-election. We have presentations of the results. agreed upon appropriate levels of materiality followed this practice since the in the context of the anticipated results for the AGM in 2005. In order that all Directors are aware of the views year. As a result of those discussions an audit of shareholders, Board packs include a note plan was agreed and subsequently executed. 27 Future plc

Corporate Governance report

The significant judgements considered in 4. Exceptional items relation to the financial statements for the year ended 30 September 2015, which were Due to the finalisation of the transformation The Audit Committee originally identified and discussed as part of programme in the year there are a number the planning process referred to above, are set of items considered exceptional in nature. “ monitors the Company’s out below and were addressed as follows: The Audit Committee has discussed the safeguards against items with the auditors and agrees with 1. Revenue recognition the conclusion that these items should be compromising the presented as exceptional. The areas of revenue which carry the most objectivity and judgement are newstrade revenue (both 5.x Ta independence of the domestic and export). Management has carefully considered the estimates of T he Audit Committee has reviewed the tax external auditors. returns made in respect of newstrade position of the Group with management and revenues and the recognition of revenues the auditors. During the year, the Committee ” on the larger advertising contracts and has been actively involved in considering have concluded that they are appropriate. any areas of judgement relating to tax Manjit Wolstenholme The estimates and judgements made have positions in the UK, US and Australia. Chairman of the been discussed with the auditors and the Audit Committee Audit Committee. Audit fees The Audit Committee has reviewed 2. Carrying value of goodwill and long the remuneration received by lived assets PricewaterhouseCoopers LLP for non-audit work conducted during the financial year. IAS 36 requires an impairment test to The fees for non-audit work were comparable be performed for goodwill on an annual with the audit fee. For further details regarding basis or where there is an indication of fees paid, see note 4 to the financial impairment. Management prepared a statements on page 56. detailed impairment assessment of the UK business at 30 September 2015. Auditor independence The Audit Committee monitors the Company’s The key assumptions made in that safeguards against compromising the assessment were as follows: objectivity and independence of the external auditors by performing an annual review of - Long term growth rate to perpetuity 2.0% non-audit services provided to the Group and their cost, reviewing whether the auditors - EBITDAE margins assumed 5.2% believe there are any relationships that may to 12.4% affect their independence and obtaining written confirmation from the auditors that - Discount rate (post-tax) 9.0% they are independent.

Management concluded that no For the financial year ended 30 September impairment was required. The Audit 2015, the Audit Committee has conducted Committee agree with this conclusion. its review of the auditors’ independence and concluded that no conflict of interest exists 3. Going concern between PricewaterhouseCoopers LLP audit and non-audit work, and that their involvement in non- The Audit Committee has considered the audit matters, which mainly comprised advice going concern assumption as set out on in respect of various share incentive issues page 25. Management prepared detailed and taxation, was the most effective way of assessments of going concern that set out conducting the Group’s business during the year. all relevant considerations. These were reviewed in depth by the Audit Committee, Auditor appointment policy who confirmed that these assessments The Audit Committee has reviewed its policy continued to support the position of the for appointing auditors and awarding Group as a going concern. non-audit work. Annual Report and Accounts 2015 28

The Group has had little non-audit work, excluded from approving the proposal for but has an open mind about instructing firms their re-election. other than PricewaterhouseCoopers LLP where appropriate. 4. Remuneration Committee On the recommendation of the Audit Committee, the Board has decided that it Attendance i is in the best interests of the Company to Member (3 scheduled meetings) put a resolution to shareholders that Manjit Wolstenholme PricewaterhouseCoopers LLP, who have 3 of 3 (Chairman) been the Company’s external auditor for Investor Relations 16 years, be reappointed as auditors for the Peter Allen 3 of 3 forthcoming year. The resolution to appoint For copies of all of the Group’s Hugo Drayton 1 of 1 PricewaterhouseCoopers LLP will propose (appointed 1 December 2014) public announcements made that they hold office until the conclusion of via the RNS and copies of the next Annual General Meeting at which Mark Whiteling the Committees’ terms of 2 of 2 accounts are laid before the Company, at a (resigned 1 December 2014) reference, visit level of remuneration to be determined by the Directors. www.futureplc.com/investors There were three scheduled meetings and one unscheduled meeting during the year, at which 3. Nomination Committee all Committee members were present.

Attendance The Remuneration Committee determines Member (1 scheduled meeting) the remuneration packages of executive Peter Allen (Chairman) 1 of 1 Directors, including performance-related awards and share-based incentives,

Manjit Wolstenholme 1 of 1 remuneration policy, which includes the Corporate Governance Hugo Drayton individual bonus targets for executive Directors 1 of 1 (appointed 1 December 2014) and performance criteria attached to share- based incentives, the remuneration of the Mark Whiteling - Chairman, recommendations of remuneration (resigned 1 December 2014) levels for non-executive Directors and senior management in line with industry remuneration packages and the implementation of any new In addition to the scheduled meeting, there share-based incentive scheme proposed to was one conference call during the year be implemented. The Directors’ remuneration on which all Committee members were report is set out on pages 29 to 39. present to discuss the appointment of Penny Ladkin-Brand as Chief Financial Officer and Approved by the Board of Directors and signed Company Secretary. on its behalf by:

Penny brings with her a wealth of experience in digital media and digital monetisation models and the Board believes that the executive team are well placed to take the Group forward into the next phase of its strategy. Penny Ladkin-Brand Following discussion of the skills and Chief Financial Officer contribution of each Director, the Nomination and Company Secretary Committee supports the proposed re-election 15 December 2015 of all Directors standing for re-election at the 2016 AGM and the election of Penny Ladkin-Brand to confirm her appointment to the Board. In line with best practice, each Committee member seeking re-election was 29 Future plc

Directors’ remuneration Annual statement report The remuneration philosophy is designed to ensure that For the year ended 30 September 2015 reward for performance is competitive, and appropriate for the transformational phase that the Group has undergone as well as the future development of, and results delivered by, the Group.

The remuneration policy seeks to align remuneration Dear shareholders, with shareholder I am pleased to present the Directors’ remuneration report for the financial year ended 30 September 2015. This report has been prepared on behalf of the Future plc Board by interests based on the Remuneration Committee, and has been approved by the Future plc Board. the achievement of As required under the Large and Medium-sized Companies and Groups (Accounts strategic objectives and and Reports) (Amendment) Regulations 2013 (Sl 2013/1981) Directors’ Remuneration Regulations, this report is split into three sections: this letter, an Implementation report, financial performance. setting out details of Directors’ remuneration for the financial year ended 30 September 2015, and a Remuneration policy report, repeating the Group’s remuneration policy (“Policy”) for executive and non-executive Directors for the three year period from 1 October 2013.

The key challenges faced by the Remuneration Committee during the year were: determining and setting incentives of the new senior management team which was recruited as part of the transformation of the business, to ensure alignment with the executive Directors; setting appropriate performance targets for short-term and long-term incentives for both executive Directors and the new senior management team during this period of significant change for the Group, and the change of Chief Financial Officer.

During the year to 30 September 2015, the Committee has considered the level and make- up of the executive Directors’ remuneration packages, including the grant of share-based incentive awards and the basis of performance-related bonuses, details of which are set out in the Implementation report and the Policy. The Committee, in particular, focused its efforts at the beginning of the financial year on updating the rules and the performance targets of the Performance Share Plan (PSP) as part of the process of extending the PSP, as well as extending the Deferred Annual Bonus Scheme (DABS) and updating the rules. The Committee consulted with major shareholders in relation to certain changes to the PSP, including: (i) allowing 10% of the Company’s issued share capital to be issued over any ten year period in relation to any employee share incentive schemes, whether discretionary or not, and (ii) the setting of new performance targets for the PSP which the Committee considers to be more appropriate to the current scale, size and future development of the Group.

Further, the Committee replaced the all employee save-as-you-earn scheme (Sharesave) with a share incentive plan (SIP) in order to encourage active employee share ownership. The Committee believes that by holding shares in the Company employees will be more productive and feel more invested in the Company’s future, sharing in the same risks and rewards as all shareholders.

The remuneration philosophy is designed to ensure that reward for performance is competitive and appropriate for the transformational phase that the Group has undergone, as well as the future development of, and the results delivered by, the Group. The remuneration policy seeks to align remuneration with shareholder interests based on the achievement of strategic objectives and financial performance. As a result, remuneration levels are designed to reflect the relative performance of the business for the relevant period. Quick find contents We believe that the Policy incentivises the executive team to deliver growth in the short, medium and long term.

Implementation report Page 30

Remuneration policy Manjit Wolstenholme report 15 December 2015 Page 36 Annual Report and Accounts 2015 30 Implementation report

The following report provides details of Directors’ remuneration for the year ended 30 September 2015. In setting remuneration for the year, the Committee applied the principles set out in the Remuneration policy report.

Remuneration Committee Richard Haley was replaced as Secretary to responsible for fixing the Chairman’s the Committee by Zillah Byng-Thorne on an remuneration and approving the terms of any Four independent non-executive Directors interim basis until the appointment of Penny new share-based incentive scheme for any served on the Remuneration Committee during Ladkin-Brand on 3 August 2015. employees of the Group, subject, where the year to 30 September 2015: Manjit appropriate, to shareholder approval. Wolstenholme chairs the Committee, Peter The Committee is responsible for determining Allen served throughout the year, Mark the basic annual salaries, incentive It is the Board that is responsible for Whiteling served until he stepped down from arrangements and terms of employment determining the remuneration of non-executive the Board with effect from 1 December 2014, of executive Directors, for making Directors following the recommendation of the and Hugo Drayton served on the Committee recommendations regarding non-executive Committee as set out on page 32. from his appointment to the Board on 1 Directors’ fees, the level and make-up of the December 2014. On 1 October 2014, Richard remuneration packages of senior managers, No Director is involved in deciding his or her Haley, (formerly) Chief Financial Officer and including bonus schemes and share-based own remuneration. As explained on page 24, Company Secretary, was appointed as incentives, and ensuring that remuneration the terms of reference of the Remuneration Secretary to the Committee. Following his policies and practices do not encourage Committee, reviewed annually, are available on resignation from the Board on 9 July 2015, excessive risk-taking. The Committee is also the Company’s website.

Single Total Figure of Remuneration (audited)

The remuneration of the Directors is set out below:

Salary/fees Benefits1 Annual bonus2 PSP2 Pension Total

2015 2014 2015 2014 2015 2014 2015 2014 2015 2014 2015 2014 £’000 £’000 £’000 £’000 £’000 £’000 £’000 £’000 £’000 £’000 £’000 £’000

Executive Directors in office as at 30 September 2015 Corporate Governance Zillah Byng-Thorne 296 209 10 8 128 63 - - 37 26 471 306 Penny Ladkin-Brand 3 29 - - - 15 - - - - - 44 - Total for executive Directors 325 209 10 8 143 63 - - 37 26 515 306

Non-executive Directors in office as at 30 September 2015 Peter Allen 120 120 ------120 120 Manjit Wolstenholme 49 45 ------49 45 Hugo Drayton6 33 ------33 - Mark Wood 5 20 ------20 - Total for non-executive Directors 222 165 ------222 165

Former executive Directors Mark Wood5 - 146 - 5 - - - - - 18 - 169 Richard Haley4 135 - 7 - 28 - - - 6 - 176 - Total for former executive Directors 135 146 7 5 28 - - - 6 18 176 169

Former non-executive Director Mark Whiteling 8 45 ------8 45

Total 690 565 17 13 171 63 - - 43 44 921 685

Notes: 1. Benefits for executive Directors comprise principally car allowance, private health insurance and life assurance. There were no taxable expenses paid to any Director in the year. 2. Details relating to the Annual Bonus Scheme and the Performance Share Plan (“PSP”) are set out on pages 31 and 32. 3. Penny Ladkin-Brand was appointed to the Board on 3 August 2015, replacing Richard Haley as Chief Financial Officer and Company Secretary. 4. R ichard Haley was appointed to the Board on 1 October 2014 and resigned on 9 July 2015. He received pay in lieu of notice for the period from 9 July 2015 to 30 September 2015 totalling £40,203 and no further amounts are payable. 5. Following termination of his appointment as Chief Executive with effect from 1 April 2014, Mark Wood received £27,552 per month during the 12-month period up to and including March 2015, which related to basic salary, car allowance and cash supplement in lieu of pension payments. These monthly payments were to be reduced by the amount of any fees or benefits payable to Mark Wood in respect of any other position that he took up during this 12-month period including fees payable in respect of his appointment as non-executive Director of Future plc, although he was entitled to retain any fees and/or benefits payable in respect of the first non-executive director role that he accepted in addition to his role as non-executive Director of Future plc. Mark Wood was appointed as chief executive of Ten Alps plc with effect from 15 December 2014 but he received no remuneration for this role in the period from appointment to 31 March 2015. 6. Hugo Drayton was appointed to the Board on 1 December 2014. 31 Future plc

Directors’ remuneration report

For the year ended 30 September 2015

Performance-related bonus (Annual :: If EBITDAE is 5% below target EBITDAE, interests of the executive Directors with those Bonus Scheme) 30% of the potential maximum of the of the shareholders. Those targets are set out profit-related bonus will be payable in the below and opposite. The maximum amount of Operation of the scheme event that the Committee determines, in its an n award i any financial year is normally 100% absolute discretion, that such payment is of basic annual salary. However, in exceptional The performance-related bonus is subject to merited by the individual. circumstances, where it is felt necessary both profit related and subjective individual :: If EBITDAE target is achieved, 50% of the to provide further incentive to the executive performance criteria, with 20% of the potential maximum of the profit-related Directors, awards of up to 200% of basic potential maximum performance-related bonus will be payable. annual salary may be approved. Awards under bonus payable being subject to subjective :: If EBITDAE target is exceeded by 5%, this scheme are granted to executive Directors individual performance criteria determined by 65% of the potential maximum of the and key senior executive management. the Committee, although the Committee has profit-related bonus will be payable in the discretion to vary the potential total maximum event that the Committee determines, in its The PSP was due to expire in January 2015 bonus, the weighting of the variable elements absolute discretion, that such payment is and, following consultation with shareholders, it and the stretch of the targets in order to merited by the individual. was renewed for a further ten years. In addition, incentivise or recruit executive Directors, :: If EBITDAE target is exceeded by 10%, the PSP rules were updated to bring them in line provided that the total potential maximum 85% of the potential maximum of the with current best practice where applicable, and bonus payable for any year shall not exceed profit-related bonus will be payable in the new performance targets were set, which the 150% of salary and the bonus shall only be event that the Committee determines, in its Committee considers to be more appropriate payable for over performance. The potential absolute discretion, that such payment is for the size, scale, current positioning and future maximum performance-related bonus payable merited by the individual. development of the Group. under the Annual Bonus Scheme during 2015 :: If EBITDAE target is exceeded by 15% or was 120% of basic annual salary to Zillah more, 100% of the potential maximum of Performance criteria in respect of awards Byng-Thorne as Chief Executive and 50% of the profit-related bonus will be payable. granted since 4 February 2015 basic annual salary to Penny Ladkin-Brand as :: If EBITDAE falls in between any of the Chief Financial Officer. above levels, a percentage of the potential Subject to the executive Directors remaining in maximum profit-related bonus will be employment at the vesting date, awards granted The potential maximum performance-related payable, on a pro rata basis to the levels since 4 February 2015 shall vest subject to the bonus that was payable to Richard Haley under expressed above, in the event that the following criteria having been met at the end of the Annual Bonus Scheme during 2015 was Committee determines, in its absolute the relevant three-year measurement period. 50% of basic annual salary. As an incentive to discretion, that such payment is merited aid recruitment of Richard Haley, a contractual by the individual. Earnings Per Share (50% of award) bonus equal to one third of the 2015 potential maximum bonus is payable in December 2015. The EBITDAE target is not disclosed as this is EPS for the last financial year of the believed to be a commercially sensitive number performance period of at least 1.0p for this part Payment of any performance-related bonus but it is set by the Committee to be challenging of the award to vest (at this level the vested under the Annual Bonus Scheme is usually and is set by reference to the budget for amount is 25% of this part of the award), with made in December, following announcement the relevant financial year. The individual full vesting at 1.4p and on a straight-line basis of the preliminary results and conclusion of the performance criteria set by the Committee between these amounts. audit in respect of the preceding financial year. were designed to reward the successful Payment of any performance-related bonus implementation of specific elements of the Total Shareholder Return (50% of award) is also subject to the executive Director being Group’s financial and operational strategy. in the Company’s employment at the time of The comparator group of companies for the payment of such performance-related bonus Payment of any part of the individual TSR element of the award is the constituent and not having given or received notice of performance-related bonus is subject to the companies of the FTSE Small Cap Index, termination of employment and certain other 85% EBITDAE floor being achieved. excluding investment trusts, on the date of grant. events not having occurred. Actual performance against targets If the Company’s TSR performance places it Performance targets for the year below median ranking, none of the part of the award dependent on TSR performance will The profit criteria for payment of the Based on EBITDAE performance achieved for vest. If the TSR performance places it in median performance-related bonus set for 2015 was 2015, and on individual performance measures, ranking, 25% of this part of the award will vest in a range from 85% to 115% target EBITDAE, the Committee awarded a total Annual Bonus through to 100% if the Company is ranked in the as follows: payment of £127,980 to the Chief Executive. The upper quintile, i.e. top 20%. Between median Committee also exercised its discretion to award and upper quintile, this part of the award will :: If EBITDAE is more than 15% below a bonus of £15,000 to the Chief Financial Officer. vest on a pro rata straight-line basis. target EBITDAE, no profit-related bonus These payments were made in November 2015, will be payable. the Chief Executive and Chief Financial Officer Performance criteria in respect of awards :: If EBITDAE is 15% below target EBITDAE, invested their bonuses in the placing of shares granted prior to February 2015 10% of the potential maximum of the which took place on 27 November 2015. profit-related bonus will be payable in the Subject to the executive Directors remaining in event that the Committee determines, in its employment at the vesting date, awards granted absolute discretion, that such payment is 2005 Performance Share Plan (PSP) prior to 4 February 2015 shall vest subject to the merited by the individual. following criteria having been met at the end of :: If EBITDAE is 10% below target EBITDAE, Operation of the scheme the relevant three-year measurement period. 20% of the potential maximum of the profit-related bonus will be payable in the The PSP has been in operation since 2005 Earnings Per Share (50% of award) event that the Committee determines, in its and is designed to reward performance over a absolute discretion, that such payment is three-year period in the context of performance Growth in EPS over the three years of at least merited by the individual. targets which are designed to align the annual Retail Price Index (RPI) + 3% for this Annual Report and Accounts 2015 32

part of the award to vest (at this level the vested Performance against targets in respect of whole. The Chairman’s fee has been reduced amount is zero) with full vesting at annual RPI + the 18 January 2012 awards from £120,00 to £95,000 with effect from 8% and on a straight-line basis between the two. 1 January 2016. The Committee exercised its discretion to waive Total Shareholder Return (50% of award) the requirement for Mark Wood and Graham Harding to remain employed within the Group Pension entitlements (audited) The Company’s TSR performance is at the vesting date and to allow the awards compared against a basket of comparator to vest on a pro rata basis in January 2015, The only element of remuneration that is companies comprising at all times a minimum subject to the relevant performance criteria pensionable is basic annual salary, excluding of 15 companies. having been met. The movement in EPS for performance-related bonuses and benefits in the relevant measurement period was -286% kind. Employer’s pension contributions are If the Company’s TSR performance places it for the total Group and TSR performance payable for the executive Directors at a rate of below median ranking, none of the part of the placed the Company 17th within the group of 12.5% for the Chief Executive and up to 6% for award dependent on TSR performance will 18 comparator companies. Consequently, the the Chief Financial Officer. The liability of the vest. If the TSR performance places it in median PSP awards granted to Mark Wood and Graham Company in respect of the executive Directors’ ranking, 25% of this part of the award will vest Harding on 18 January 2012 lapsed in their pensions amounts to £3,125 as at 30 through to 100% if the Company is ranked in the entirety on 18 January 2015. September 2015. Normal retirement age under upper quintile, i.e. top 20%. Between median the scheme rules is 75. and upper quintile, this part of the award will Performance against targets in respect of vest on a pro rata straight-line basis. the 17 December 2012 awards Payments to past Directors (audited) In respect of the TSR performance for awards The Committee exercised its discretion to granted from 21 December 2010 to 3 February waive the requirement for Mark Wood to remain No payments were made to any past 2015, the Company’s TSR performance was employed within the Group at the vesting date Directors during the financial year ended measured against the following basket of and to allow the award to vest on a pro rata 30 September 2015. comparator companies: basis in December 2015, subject to the relevant performance criteria having been met. The Bloomsbury Publishing movement in EPS for the relevant measurement Payments for loss of office (audited) Centaur Media period was -82% for the total Group and Chime Communications TSR performance placed the Company 16th During the financial year to 30 September 2015, Ebiquity within the group of 18 comparator companies. the following payments in respect of loss of

Haynes Publishing Consequently, the remainder of the PSP award office were made. Corporate Governance HIBU granted to Mark Wood on 17 December 2012 Huntsworth will lapse in its entirety on 17 December 2015. Following termination of Mark Wood’s Johnston Press appointment as Chief Executive with effect from M&C Saatchi 1 April 2014, he received £27,552 per month Mecom Group Non-executive Directors’ remuneration during the 12-month period to March 2015, Motivcom which related to basic salary, car allowance and Progressive Digital Media Non-executive Directors do not participate cash supplement in lieu of pension payments. Quarto Group in any of the Company’s share incentive Under the terms of his agreement these monthly STV Group arrangements, nor do they receive any payments were to be reduced by the amount Ten Alps benefits. Their fees are reviewed every of any fees or benefits payable to Mark Wood Trinity Mirror three years. The Chairman’s fees are set in respect of any other position that he took Wilmington Group by the Committee, and those for the non- up during this 12-month period, including fees YouGov executive Directors are set by the Board as a payable in respect of his appointment as non-

Share incentives awarded during the year (audited)

PSP Grants

% vesting at No. shares Date of award % salary Value (£) min performance awarded Performance period Richard Haley 4 February 2015 100% £165,000 25% 1,629,630 EPS element: 1 Oct 2014 – 30 Sept 2017 TSR element: 4 Feb 2015 – 3 Feb 2018

Penny Ladkin-Brand 3 August 2015 100% £175,000 25% 1,647,834 EPS element: 1 Oct 2014 – 30 Sept 2017 TSR element: 3 Aug 2015 – 2 Aug 2018

Notes: 1. T he value of the PSP awards are usually calculated using the share price at the date of grant, which was 10.62p per share for the 3 August 2015 award to Penny Ladkin-Brand. The value of Richard Haley’s award was based on the share price of 10.125p per share on 1 December 2014. 2. The PSP awards are exercisable at nil value. 3. The performance conditions attached to the grant of the above awards are the same as set out on page 31. 4. The percentage vesting at minimum performance represents the 25% vesting of the TSR element and the 25% vesting of the EPS element of the award. 5. Richard Haley’s award lapsed in full on 9 July 2015, the date on which his employment within the Group ended. 6. Zillah Byng-Thorne received no share incentive award during 2015. 33 Future plc

Directors’ remuneration report

For the year ended 30 September 2015

executive Director of Future plc, although he was 1 November 2013 and will end on 31 October The following is a list of the companies entitledo t retain any fees and/or benefits payable 2018. As at 15 December 2015, Zillah currently included in the FTSE All Share Media in respect of the first non-executive director Byng-Thorne has a holding of 1,091,369 Index (UK companies): role that he accepted in addition to his role as shares, of which 191,738 were purchased non-executive Director of Future plc. Although at a price of 7.75p on 16 July 2014, 185,018 4 Imprint Group Mark Wood was appointed CEO of Ten Alps plc were purchased at a price of 7.99p on 21 Bloomsbury Publishing in December 2014, he received no remuneration November 2014, 44,613 were purchased at a British Sky BCast Group for this role in the period from appointment to 31 price of 11.13p on 18 May 2015 and 670,000 Centaur Media March 2015 and therefore continued to receive were purchased at a price of 10.00p on 27 Chime Comms the monthly payments referred to above for the November 2015 then on 4 December 2015 Entertainment One (DI) period from December 2014 to March 2015. the 670,000 shares were transferred to Zillah Euromoney Instl. Investor Byng-Thorne’s personal SIPP by way of an Huntsworth Following Richard Haley’s resignation as Chief on-market sale and purchase at a price of Informa Financial Officer on 9 July 2015, he received 11.00p. In respect of Penny Ladkin-Brand, ITE Group payments in lieu of notice for the period from the period commenced on 3 August 2015 ITV 9 July 2015 to 30 September 2015 totalling and will end on 2 August 2020. As at 15 Johnston Press £40,203 and no further amounts are payable. December 2015, Penny Ladkin-Brand has Mecom Group a holding of 150,000 shares, all of which Moneysupermarket.com GP were purchased at a price of 10.00p on Pearson Statement of Directors’ shareholding 27 November 2015. Perform Group and share interests (audited) Reed Elsevier Details of Directors’ shareholdings are set out Rightmove The Company has a policy on share ownership on page 20 of the Directors’ report. STV Group by executive Directors which requires that any Tarsus Group such Director should accumulate a holding in Trinity Mirror shares over a five year period from appointment Company performance UBM where the acquisition cost of those shares UTV Media represents at least one times salary. The performance graph opposite shows the WPP TSR on a holding of shares in the Company Zoopla Property Group In respect of Zillah Byng-Thorne, the compared with the FTSE All Share Media relevant five year period commenced on Index (UK companies).

Directors’ interests in share schemes (audited)

Details of options and other share incentives held by executive Directors and movements during the year are set out below, including details of the awards made during the year.

Price Exercise Lapsed paid price per Balance at Granted Vested unexercised Balance at for Earliest Expiry share 1 Oct during the during the during 30 Sept Date of grant grant exercise date date (p) 2014 year3 year the year 2015 PSP1 Mark Wood 4 18 Jan 2012 Nil 18 Jan 2015 N/A Nil 2,564,325 - - (2,564,325) - 17 Dec 2012 Nil 17 Dec 2015 N/A Nil 678,159 - - - 678,159 16 Dec 2013 Nil 16 Dec 2016 N/A Nil 156,022 - - - 156,022 Zillah Byng-Thorne 16 Dec 2013 Nil 16 Dec 2016 N/A Nil 2,000,000 - - - 2,000,000 16 Jul 2014 Nil 16 July 2017 N/A Nil 2,500,000 - - - 2,500,000 Richard Haley 3, 5 4 Feb 2015 Nil 4 Feb 2018 N/A Nil - 1,629,630 - (1,629,630) - Penny Ladkin-Brand 3 3 Aug 2015 Nil 3 Aug 2018 N/A Nil - 1,647,834 - - 1,647,834 Sharesave2 Zillah Byng-Thorne 13 Dec 2013 Nil 1 Feb 2017 1 Aug 2017 13.0 69,230 - - - 69,230

As noted on page 20, Zillah Byng-Thorne’s beneficial interests in the shares of the Company were 421,369 at 30 September 2015 (191,738 at 30 September 2014). Penny Ladkin-Brand held no beneficial interest in the shares of the Company at 30 September 2015.

Notes: 1. The performance criteria which apply to awards granted under the PSP scheme are set out on pages 31 and 32. 2. Details of the Sharesave scheme, which has no performance conditions, are set out in note 26 on page 76. 3. The market price at the time of grant of the PSP awards on 4 February 2015 and 3 August 2015 was 10.88p and 10.62p respectively. 4. Following the termination of Mark Wood’s appointment as Chief Executive with effect from 1 April 2014, the Committee exercised its discretion to waive the requirement for Mark Wood to remain in employment on the vesting date of the PSP awards granted to him during his appointment as Chief Executive and to allow a portion of the PSP awards granted to him on 18 January 2012, 17 December 2012 and 16 December 2013 to vest as normal on 18 January 2015, 17 December 2015 and 16 December 2016 respectively on a pro rata basis (subject to the relevant performance criteria being met). The remaining 2,564,325 options granted on 18 January 2012 lapsed on 18 January 2015 since the relevant performance criteria had not been met and the remaining 678,159 options granted on 17 December 2012 will lapse on 17 December 2015 since the relevant performance criteria have not been met. The 156,022 options granted on 16 December 2013 will vest as normal three years from the date of grant, subject to performance criteria having been met. 5. Following the termination of Richard Haley’s appointment as Chief Financial Officer with effect from 9 July 2015, the PSP award granted to him on 4 February 2015 lapsed in its entirety on 9 July 2015. Annual Report and Accounts 2015 34

Graph: Past seven financial years ended 30 September 2015

Total Shareholder Return: Rebased to Future plc as of 1 October 2008

350

300

250

200

150

100

2008 2009 2010 2011 2012 2013 2014 2015

Future (rebased to 100) FTSE All-Share Media Index (UK companies) (rebased to 100) Corporate Governance

Chief Executive pay during last seven years

Chief Executive single figure Bonus paid as % Share based incentives Year £’000 of maximum vesting as % of maximum 2009 (Stevie Spring) £423 0% 100%1 2010 (Stevie Spring) £746 40% 48%2 2011 (Stevie Spring) £546 0% 100%3 2012 (Mark Wood) £430 50% 0%4 2013 (Mark Wood) £331 0% 0%4 2014 (Zillah Byng-Thorne) £3066 20% 0%5 2015 (Zillah Byng-Thorne) £471 36% 0%5

Notes: 1. This represents shares which were granted as part of an exceptional one-off award intended to aid recruitment and retention. The award was not subject to performance criteria. 2. This represents the first tranche of a deferred bonus share award which was not subject to performance criteria and the PSP award granted in December 2006 which partially vested in December 2009 following the partial satisfaction of TSR performance criteria. 3. This represents the second tranche of a deferred bonus share award which was not subject to performance criteria. The PSP award granted in December 2007 lapsed in December 2010. 4. The first awards granted to Mark Wood under the PSP were granted in January 2012 and lapsed on 18 January 2015, since the relevant performance criteria were not met. 5. The first awards granted to Zillah Byng-Thorne under the PSP were granted in December 2013 and will not vest until December 2016, subject to performance criteria being met. 6. The single figure for Zillah Byng-Thorne for 2014 includes five months of her Chief Financial Officer salary and six months of her salary as Chief Executive.

Percentage change in remuneration of Chief Executive

Salary Benefits (inc pension) Bonus

2015 2014 % change 2015 2014 % change 2015 2014 % change Chief Executive £300,000 £285,000 +5.3% £47,000 £46,000 +2.2% £127,980 £62,750 +104.0% All employees £39,621 £35,878 +10.4% £2,931 £2,980 -1.6% £285 £80 +256.3% 35 Future plc

Directors’ remuneration report

For the year ended 30 September 2015

Relative importance of spend on pay

The relative importance of the spend on pay for the business is shown in the table below.

2015 2014 £m £m Group pay 26.6 41.7 Group operating costs excluding Group pay & exceptional costs 33.3 52.2 Capital expenditure 2.0 2.6 Dividends - 0.7

The table shows the actual expenditure of the Group, and change between the current and previous years, on remuneration paid to all employees compared to the total operating costs for the Group excluding exceptional costs and remuneration, and investment in capital expenditure and dividends.

Shareholder voting

At the last Annual General Meeting, votes on the Directors’ remuneration report for the year ended 30 September 2014 were cast as follows:

For % Discretionary % Against % Abstain Approval of Directors’ remuneration 257,254,298 99.96 10,124 0.00 96,826 0.04 85,251 report for 2014

Implementation of remuneration policy in the year to 30 September 2016

The Remuneration Committee does not propose to make any changes to the remuneration policy that was outlined in the Annual Report for the year ended 30 September 2013 and approved at the Company’s Annual General Meeting on 3 February 2014, a copy of which is set out on pages 36 to 39. Since there are no changes to the remuneration policy, the Company does not intend to submit the Remuneration policy report to shareholders for approval at the Company’s Annual General Meeting on 3 February 2016.

Performance, Element Operation of element Max. potential value weighting & time Base salary No change No change1 No change Benefits No change No change No change Annual Bonus No change No change2 The Committee approved a decrease in the stretch of the range of profit- related targets, from 85% to 115% of EBITDAE to a range of 90% to 110% of EBITDAE. PSP No change No change No change Pension No change No change No change

Notes: 1. Pay reviews take place annually and any increase for 2016 will take effect from 1 January. 2. Performance targets for the Annual Bonus for 2016 are not disclosed due to their commercial sensitivity. In the event that there is an increase in the executive Directors’ base salaries during the year, the potential maximum value of the Annual Bonus and pension shall increase accordingly.

Advisers to the Remuneration Committee

PricewaterhouseCoopers LLP was appointed during 2015 by the HR director, with the consent of the Committee, to advise the Committee in respect of various share incentive issues, including various changes to the PSP scheme, the tightening of headroom under the dilution limits and the implementation of a Share Incentive Plan for all UK employees in place of the Sharesave scheme.

Compliance with the UK Corporate Governance Code

The Board has complied fully with the provisions of Section D of the UK Corporate Governance Code in relation to Directors’ remuneration policy and practice, and has followed Schedule A to the Code in relation to performance-related remuneration policy. Further information regarding the Company’s approach to corporate governance is set out on pages 23 to 28. Annual Report and Accounts 2015 36 Remuneration policy

The Policy set out below applies to all financial years beginning on or after 1 October 2013 to 30 September 2016, following shareholder approval at the Company’s Annual General Meeting on 3 February 2014.

The Committee considers the remuneration Element of remuneration Maximum % of salary so as to attract, retain and motivate high policy annually to ensure that it remains calibre Directors to perform at the highest Not higher than aligned with the Group’s business needs Salary levels, whilst at the same time ensuring that market value and is appropriately positioned relative to recruitment and remuneration expenditure the market. Since the Committee does not Dependent on is not excessive and does not encourage Benefits propose to make any changes to the policy circumstances excessive risk-taking. that was approved by shareholders at the 12.5% of basic Company’s Annual General meeting on 3 Pension (b) The interests of executive Directors February 2014, it does not intend to put the annual salary should be aligned with those of policy forward to shareholders for approval at shareholders by ensuring that a Performance- the Company’s Annual General Meeting to be 150% significant proportion of remuneration related bonus2 held on 3 February 2016. is linked to Group performance. Share incentive 100% schemes1 (c) Remuneration packages and employment Approach to recruitment conditions of executive Directors are considered in conjunction with both those of remuneration for executive and Notes: non-executive Directors 1. P SP scheme rules provide for awards of up to 100% of basic key senior managers (keeping succession annual salary, save in exceptional circumstances where planning in mind) and all employees in The Committee’s objective at the time of the Committee is allowed discretion to award up to 200% of the Group in order to achieve a consistent basic annual salary. an appointment to a new role is to weight 2. The Committee retains discretion to make one-off sign remuneration policy across the Group. The executive Directors’ remuneration packages on payments or to grant awards under the share-based Committee has given particular attention to towards performance-related pay, with incentive scheme of up to 200% of basic annual salary to the extent that it is necessary to recruit a high calibre ensuring that the remuneration packages performance-related targets linked to financial individual, or to compensate the individual for loss of bonus of the key senior managers recruited during performance of the Group against budget and or other incentive awards granted by the previous employer. the year are aligned with those of the 3. In the event of an internal promotion, any commitments made the Group’s performance against business by the Company to an internal candidate shall be honoured executive Directors. objectives and its stated strategy. even if it would otherwise be inconsistent with the policy. (d) Bonus potential and share scheme awards Any new executive Director’s remuneration In determining the level and make-up that are capped at a percentage of salary package would include the same elements as of executive Directors’ remuneration, are restricted if salaries are low. those of the existing executive Directors, as the Committee carefully considers the shown in the next column. following issues: (e) Subjective criteria are applied to an

element of the performance-related bonus Corporate Governance (a) Remuneration packages offered to executive of the Chief Executive and Chief Financial Directors should be competitive with those Officer (with a financial underpin) in order available for comparable roles in companies to ensure that the Committee retains operating in similar markets and on a similar discretion and to ensure no performance- scale. They should be sufficiently desirable related bonus is unjustly received.

Service contracts and payments for loss of office

Executive Directors

Contract provision Policy Details Notice periods Director or Company shall be entitled to serve A Director may be required to work during their 6 months’ notice (in Penny Ladkin-Brand’s case) notice period or be put on garden leave. or 12 months’ notice (in Zillah Byng-Thorne’s case).

Compensation for loss of office Director shall be entitled to receive 6 months’ salary While service agreements allow for monthly (in Penny Ladkin-Brand’s case) or 12 months’ payments during notice period which are subject salary (in Zillah Byng-Thorne’s case) and benefits to mitigation, the Committee retains discretion to during any unexpired notice period. make payments in such manner as is deemed appropriate, particularly by reference to the circumstances of the loss of office. Treatment of share incentives Incentives will lapse or vest at the Committee’s The Committee has discretion to allow awards on termination discretion, subject to performance criteria being to vest partially or in full on termination, or to met and the rules of the scheme. preserve awards.

Change of control In the event of a change of control, a Director In the event of termination by either the may terminate their appointment on serving no Director or the Company, the Director will be less than 1 month’s notice. entitled to receive 6 months’ salary.

Non-executive Directors Notice periods 3 months’ notice from either Company Appointed for a three year term, subject to or Director. annual re-election by shareholders at the Company’s AGM.

Copies of Directors’ service agreements and letters of appointment are available for inspection on request at the Company’s registered office. 37 Future plc

Directors’ remuneration report

For the year ended 30 September 2015

Remuneration table

Executive Directors

Element Operation Objective & link to strategy Max. potential value Performance measures Changes for 2016

Basic annual salary Basic annual salary is paid in 12 equal monthly instalments during the year and is reviewed annually. To recruit, retain and motivate individuals of high calibre, Current basic annual salary of Chief Executive is £300,000 and Not applicable. No change. When assessing the level of basic annual salary, the Committee takes into account performance, market and reflect the skills, experience and contribution of the Chief Financial Officer is £175,000. Salary increases shall generally conditions, remuneration of equivalent roles within comparable companies, the size and scale of the relevant Director. reflect market conditions, performance of the individual, new business and pay in the Group as a whole. challenges or a new strategic direction for the business. Similarly, the Committee may approve a higher basic annual salary for a newly appointed Director than the outgoing Director received where it considers it necessary in order to recruit an individual of sufficient calibre for the role.

Benefits Current benefits available to executive Directors are car allowance, permanent health insurance, To ensure broad competitiveness with market practice. The Company shall continue to provide benefits to executive Not applicable. No change. healthcare and life assurance. Additional benefits may be offered if applicable and subject to the Directors at similar levels; where insurance cover is provided by the maximum value of all benefits not exceeding the maximum potential value set by the Committee. Company, that cover shall be maintained at a similar level and the Company shall pay the then current market rates for such cover.

Pension The Company shall make a contribution up to a maximum percentage of basic annual To ensure broad competitiveness with market practice. Total cost annually shall not exceed 15% of basic annual salary. Not applicable. No change. salary (currently 12.5% for the Chief Executive and 6% for the Chief Financial Officer).

Performance- Targets are set annually by the Committee, based on (i) financial performance against budget and Designed to reward delivery of shareholder value and Chief Executive: 120% of basic annual salary (of which Profit element: related bonus1 (ii) individual subjective performance targets which are determined for each executive Director. implementation of the Group’s strategy. 80% is linked to profit targets and 20% is linked to individual If EBITDAE is more than 15% below target EBITDAE, no profit-related bonus If EBITDAE is more than 10% below target, no The Committee retains discretion to set the financial targets based on the performance during the subjective criteria). will be payable. profit-related bonus will be payable. previous financial year and the budget for the forthcoming year, and performance of the individual Chief Financial Officer: 50% of basic annual salary (of which If EBITDAE is 15% below target EBITDAE 10% of the potential maximum of the If EBITDAE is 10% below target, 20% of the against their specific subjective performance targets. 80% is linked to profit targets and 20% is linked to individual profit-related bonus will be payable in the event that the Committee determines, potential maximum of the profit-related bonus subjective criteria). The Committee retains discretion to vary the in its absolute discretion, that such payment is merited by the individual. will be payable. potential total maximum bonus, the weighting of the variable If EBITDAE is 10% below target EBITDAE, 20% of the potential maximum of the If EBITDAE is 5% below target, 35% of the elements and the stretch of the targets in order to incentivise profit-related bonus will be payable in the event that the Committee determines, potential maximum of the profit-related bonus or recruit executive Directors, provided that the total maximum in its absolute discretion, that such payment is merited by the individual. will be payable. potential bonus for any one year shall not exceed 150% of basic If EBITDAE is 5% below target EBITDAE, 30% of the potential maximum of the If EBITDAE target is achieved, 50% of the annual salary and that maximum bonus shall only be payable for profit-related bonus will be payable in the event that the Committee determines, potential maximum of the profit-related bonus over performance. in its absolute discretion, that such payment is merited by the individual. will be payable. If EBITDAE target is achieved, 50% of the potential maximum of the profit-related If EBITDAE target is exceeded by 5%, 75% bonus will be payable. of the potential maximum of the profit-related If EBITDAE target is exceeded by 5%, 65% of the potential maximum of the bonus will be payable. profit-related bonus will be payable in the event that the Committee determines, If EBITDAE target is exceeded by 10% or in its absolute discretion, that such payment is merited by the individual. more, 100% of the potential maximum of the If EBITDAE target is exceeded by 10%, 85% of the potential maximum of the profit-related bonus will be payable. profit-related bonus will be payable in the event that the Committee determines, If EBITDAE falls in between any of the above in its absolute discretion, that such payment is merited by the individual. levels, a percentage of the potential maximum If EBITDAE target is exceeded by 15% or more, 100% of the potential maximum profit-related bonus will be payable, on a pro of the profit-related bonus will be payable. rata basis to the levels expressed above, in If EBITDAE falls in between any of the above levels, a percentage of the potential the event that the Committee determines, in maximum profit-related bonus will be payable, on a pro rata basis to the levels its absolute discretion, that such payment is expressed above, in the event that the Committee determines, in its absolute merited by the individual. discretion, that such payment is merited by the individual. Subjective element: Up to 20% of maximum potential bonus is determined by subjective criteria.

Long term Annual awards to executive Directors of up to a maximum of 1x basic annual salary, with discretion Designed to reward delivery of shareholder value in the Value of grant as a maximum percentage of salary is 100% of basic Awards vest at the end of three-year performance period. 50% of award vests based on No change. share-based to award up to a maximum of 2x basic annual salary in exceptional circumstances, e.g. recruitment of medium-to-long term. annual salary, however in exceptional circumstances the Committee EPS performance and 50% vests based on TSR performance. incentive2 a Director or to “buy out” awards granted by prior employer. The scheme rules allow the Committee retains discretion to grant awards of a value up to 200% of basic EPS: Vesting will occur on a straight-line basis between the lower and higher ends discretion to change the performance targets and the Committee shall be entitled to exercise its annual salary. of the EPS target range, with 25% of the EPS element of the award vesting if EPS is discretion to change performance criteria to the extent that it reflects market practice and/or the equal to the lower end of the range through to 100% vesting if EPS reaches or exceeds Committee considers alternative performance targets to be more appropriate to the business. the top end of the range. The EPS target range for awards granted since 4 February 2015 is 1.0p per share to 1.4p per share for the last financial year of the performance period and the performance period is from 1 October 2014 to 30 September 2017. TSR: The comparator group of companies for the TSR element of the award is the FTSE Small Cap Index, excluding investment trusts, on the date of grant. If TSR performance places it in median ranking 25% will vest through to 100% if placed in the upper quintile. Between median and upper quintile, the award vests on a pro rata straight-line basis. The Committee retains the discretion to set such performance criteria as are deemed appropriate to the Company at the time an award is made.

Notes to the table 1. Performance-related bonus targets: The performance targets are determined annually by the Committee and are designed to align executive Directors’ interests with those of the Company’s shareholders and to reward good performance by the Company. Financial targets are set by reference to the Company’s budget for the relevant financial year, and individual performance targets are set by reference to the Company’s strategy and goals for the relevant financial year. The targets for the financial year to 30 September 2016 are not disclosed here due to their commercial sensitivity. 2. PSP performance targets: additional details of the performance criteria attaching to PSP awards granted to date are set out on page 31.

Non-executive Directors

Element Operation Objective & link to strategy Max. potential value Performance measures Changes for 2016

Fees1 Non-executive Directors’ fees are reviewed every three years and paid in 12 monthly instalments. Reflects the time commitment and responsibilities of the roles. Chairman: £120,000 Not applicable. No change to fees for 2016 compared to Current fees were set in 2011. Other non-executive Directors: £40,000 2015 except that Peter Allen’s fee has Additional fees payable: been reduced to £95,000 with effect from Chairman of Committee: £5,000 1 January 2016. Senior independent Director: £5,000 Member of Committee: Nil

Notes to the table 1. Fees are paid at a standard annual rate to reflect the time, commitment and responsibilities of the roles, with additional fees paid to those who chair Board Committees to reflect their additional responsibilities. Separately, the Board sets the fee payable to the Chairman of the Board. Additional fees for chairing a Committee apply only once, regardless of the number of Committees of which a non-executive Director is Chairman. Non-executive Directors are not included in any performance-related bonus, share incentive schemes or pension arrangements. Annual Report and Accounts 2015 38

Remuneration table

Executive Directors

Element Operation Objective & link to strategy Max. potential value Performance measures Changes for 2016

If EBITDAE falls in between any of the above levels, a percentage of the potential the event that the Committee determines, in Corporate Governance maximum profit-related bonus will be payable, on a pro rata basis to the levels its absolute discretion, that such payment is expressed above, in the event that the Committee determines, in its absolute merited by the individual. discretion, that such payment is merited by the individual. Subjective element: Up to 20% of maximum potential bonus is determined by subjective criteria.

3. All employees of the Group receive a basic annual salary, benefits, pension and annual bonus (subject to financial performance). The maximum value of remuneration packages is based on the seniority and responsibilities of the relevant role. Discretionary share incentives are not awarded to employees other than executive Directors and senior managers, however during the year the Company replaced its Sharesave scheme with a Share Incentive Plan in order to encourage active employee share ownership.

Non-executive Directors

Element Operation Objective & link to strategy Max. potential value Performance measures Changes for 2016

Directors’ remuneration report

For the year ended 30 September 2015

Total remuneration scenarios

Zillah Byng-Thorne

Salary, pension 1,300 £1,197,000 & benefits 1,200 Bonus 1,100 PSP 1000 41% 900 £808,000 Penny Ladkin-Brand 800

700 30% 350 £271,000 600 300 £236,000 30% 500 250 27% £184,000 32% £348,000 22% 400 200

300 150 100% 68% 78% 29%

200 43% 100 100%

100 50

Minimum Target Maximum Minimum Target Maximum

Notes: 1. Penny Ladkin-Brand was appointed to the Board as Chief Financial Officer on 3 August 2015. 2. Annual salary is based on basic salary for the financial year ending 30 September 2016. 3. The value of pension is determined as a percentage of salary, based on salary for 2016. The value of benefits in kind is calculated on the basis of the value for 2015. 4. On-target performance would deliver 60% of the maximum annual bonus for the Chief Executive and the Chief Financial Officer, assuming that individual performance targets are met and the maximum individual performance-related element of the bonus is awarded by the Committee. Maximum performance would result in the maximum annual bonus payment of 120% of basic annual salary for the Chief Executive and 50% of basic annual salary for the Chief Financial Officer. 5. The final year of the performance period in respect of both EPS and TSR targets for the PSP awards granted to Zillah Byng-Thorne in December 2013 and July 2014 is the year ending 30 September 2016. On-target performance assumes that 50% of the awards would vest while maximum performance would result in 100% of the awards vesting. The value of the shares that would vest has been calculated using a share price of 10.88p per share being the latest available share price.

Consideration of employee conditions PSP and DABS schemes, the details of which within the Group are set out at note 26 on page 77. During 2015 the Group introduced a Share Incentive Plan The Committee takes into consideration the to replace the Sharesave scheme, in order to pay and conditions of employees across the encourage active employee share ownership. Group when determining remuneration for executive Directors. Consideration of shareholder views All employees receive a basic annual salary, benefits and an entitlement to receive a bonus, The remuneration policy remains largely subject to financial performance, under the unchanged from previous years, although Group’s profit improvement scheme. during 2015 the Company consulted with shareholders regarding changes to the Discretionary share incentive awards are PSP scheme including amendments to the granted to certain senior managers under the performance targets. Annual Report and Accounts 2015 40 Corporate Governance 41 Future plc

Independent auditors’ report Independent auditors’ report to the members of Future plc

Report on the financial statements

Our opinion adopted by the European Union and, as regards the Company financial statements, as In our opinion: applied in accordance with the provisions of the Companies Act 2006. • Future plc’s Group financial statements and Company financial statements (the In applying the financial reporting framework, “financial statements”) give a true and fair the Directors have made a number of view of the state of the Group’s and of the subjective judgements, for example in respect Company’s affairs as at 30 September 2015 of significant accounting estimates. In making and of the Group’s loss and the Group’s such estimates, they have made assumptions and the Company’s cash flows for the year and considered future events. then ended;

• the Group financial statements have been Opinions on other properly prepared in accordance with International Financial Reporting Standards matters prescribed by the (“IFRSs”) as adopted by the European Union; Companies Act 2006 • the Company financial statements have been properly prepared in accordance with In our opinion: IFRSs as adopted by the European Union and as applied in accordance with the • the information given in the Strategic Report provisions of the Companies Act 2006; and and the Directors’ report for the financial year for which the financial statements are • the financial statements have been prepared prepared is consistent with the financial in accordance with the requirements of the statements; and Companies Act 2006 and, as regards the Group financial statements, Article 4 of the • the part of the Directors’ remuneration IAS Regulation. report to be audited has been properly prepared in accordance with the Companies Act 2006. What we have audited

The financial statements, included within the Other matters on which we Annual Report and Accounts (the “Annual Report”), comprise: are required to report by exception • the Consolidated balance sheet and Company balance sheet as at 30 September 2015; Adequacy of accounting records and • the Consolidated income statement and information and explanations received Consolidated statement of comprehensive income for the year then ended; Under the Companies Act 2006 we are required to report to you if, in our opinion: • the Consolidated and Company cash flow statements for the year then ended and the • e w have not received all the information and notes thereto; explanations we require for our audit; or

• the Consolidated statement of changes • adequate accounting records have not been in equity and the Company statement of kept by the Company, or returns adequate changes in equity for the year then ended; for our audit have not been received from branches not visited by us; or • the Accounting policies; and • the Company financial statements and the • the Notes to the financial statements, which part of the Directors’ remuneration report include other explanatory information. to be audited are not in agreement with the accounting records and returns. The financial reporting framework that has been applied in the preparation of the financial We have no exceptions to report arising from statements is applicable law and IFRSs as this responsibility. Annual Report and Accounts 2015 42

Directors’ remuneration • the reasonableness of significant accounting estimates made by the Directors; and Under the Companies Act 2006 we are required to report to you if, in our opinion, certain • the overall presentation of the financial disclosures of Directors’ remuneration specified statements. by law are not made. We have no exceptions to report arising from this responsibility. We primarily focus our work in these areas by assessing the Directors’ judgements against available evidence, forming our own Responsibilities for the judgements, and evaluating the disclosures in financial statements and the financial statements. the audit We test and examine information, using sampling and other auditing techniques, to the extent we consider necessary to provide a Our responsibilities and those of reasonable basis for us to draw conclusions. the Directors We obtain audit evidence through testing the effectiveness of controls, substantive As explained more fully in the Statement of procedures or a combination of both. Directors’ responsibilities set out on page 22, the Directors are responsible for the preparation In addition, we read all the financial and non- of the financial statements and for being financial information in the Annual Report satisfied that they give a true and fair view. to identify material inconsistencies with the audited financial statements and to identify Our responsibility is to audit and express any information that is apparently materially an opinion on the financial statements in incorrect based on, or materially inconsistent accordance with applicable law and International with, the knowledge acquired by us in the Standards on Auditing (UK and Ireland) (“ISAs course of performing the audit. If we become (UK & Ireland)”). Those standards require us aware of any apparent material misstatements to comply with the Auditing Practices Board’s or inconsistencies we consider the implications Ethical Standards for Auditors. for our report. Corporate Governance This report, including the opinions, has been Colin Bates (Senior Statutory Auditor) prepared for and only for the Company’s for and on behalf of members as a body in accordance with Chapter PricewaterhouseCoopers LLP 3 of Part 16 of the Companies Act 2006 and for Chartered Accountants and Statutory Auditors no other purpose. We do not, in giving these Bristol opinions, accept or assume responsibility for 15 December 2015 any other purpose or to any other person to whom this report is shown or into whose hands it may come save where expressly agreed by our prior consent in writing.

What an audit of financial statements involves

We conducted our audit in accordance with ISAs (UK & Ireland). An audit involves obtaining evidence about the amounts and disclosures in the financial statements sufficient to give reasonable assurance that the financial statements are free from material misstatement, whether caused by fraud or error. This includes an assessment of:

• whether the accounting policies are appropriate to the Group’s and the Company’s circumstances and have been consistently applied and adequately disclosed; 43 Future plc

Financial statements Financial statements

Contents

Consolidated income statement 44

Consolidated statement of 44 comprehensive income

Consolidated statement of 45 changes in equity

Company statement of 45 changes in equity

Consolidated balance sheet 46

Company balance sheet 47

Consolidated and Company cash flow statements 48

Notes to the Consolidated and Company cash flow statements 49

Accounting policies 50

Notes to the financial statements 54 Annual Report and Accounts 2015 44

Consolidated income statement for the year ended 30 September 2015

2015 2014 Note £m £m Continuing operations Revenue 1, 2 59.8 66.0

Operating profit/(loss) before depreciation, amortisation, exceptional items 1 3.6 (7.0) and impairment of intangible assets Depreciation 12 (0.5) (1.0) Amortisation 13 (2.3) (2.3) Exceptional items 5 (2.5) (7.5) Impairment of intangible assets 3 - (16.8)

Operating loss 3 (1.7) (34.6) Finance income 7 - 0.2 Finance costs 7 (0.6) (1.0) Net finance costs 7 (0.6) (0.8) Loss before tax 1 (2.3) (35.4) Tax on loss 8 0.3 0.5 Loss for the year from continuing operations (2.0) (34.9) Discontinued operations Profit for the year from discontinued operations 11 0.7 1.0 Loss for the year attributable to owners of the parent (1.3) (33.9)

Earnings per 1p Ordinary share

2015 2014 Note pence pence Basic loss per share – Total Group 10 (0.4) (10.2) Diluted loss per share – Total Group 10 (0.4) (10.2) Basic loss per share – Continuing operations 10 (0.6) (10.5) Diluted loss per share – Continuing operations 10 (0.6) (10.5)

As permitted by the exemption under Section 408 of the Companies Act 2006 no Company income statement or statement of comprehensive income is presented.

Consolidated statement of comprehensive income for the year ended 30 September 2015

2015 2014 Note £m £m Loss for the year (1.3) (33.9) Items that may be reclassified to the consolidated income statement Financial Statements Continuing operations Currency translation differences - (0.1) Net fair value losses on cash flow hedges 27 - (0.2) Other comprehensive loss for the year from continuing operations - (0.3)

Total comprehensive loss for the year attributable to continuing operations (2.0) (35.2) Total comprehensive income for the year attributable to discontinued operations 0.7 1.0 Total comprehensive loss for the year attributable to owners of the parent (1.3) (34.2)

Items in the statement above are disclosed net of tax. 45 Future plc

Financial statements

Consolidated statement of changes in equity for the year ended 30 September 2015

Issued Share Cash flow share premium Merger Treasury hedge Accumulated Total capital account reserve reserve reserve losses equity Group Note £m £m £m £m £m £m £m Balance at 1 October 2013 3.3 24.8 109.0 (0.3) 0.2 (69.6) 67.4 Loss for the year - - - - - (33.9) (33.9) Currency translation differences - - - - - (0.1) (0.1) Cash flow hedges 27 - - - - (0.2) - (0.2) Other comprehensive loss for the year - - - - (0.2) (0.1) (0.3) Total comprehensive loss for the year - - - - (0.2) (34.0) (34.2) Final dividend relating to 2013 9 - - - - - (0.7) (0.7) Share schemes - Value of employees’ services 6 - - - - - 0.1 0.1 Balance at 30 September 2014 3.3 24.8 109.0 (0.3) - (104.2) 32.6 Loss for the year - - - - - (1.3) (1.3) Currency translation differences ------Cash flow hedges 27 ------Other comprehensive income for the year ------Total comprehensive loss for the year - - - - - (1.3) (1.3) Share schemes - Value of employees’ services 6 - - - - - 0.1 0.1 Balance at 30 September 2015 3.3 24.8 109.0 (0.3) - (105.4) 31.4

Company statement of changes in equity for the year ended 30 September 2015

Issued Share share premium Retained Total capital account earnings equity Company Note £m £m £m £m Balance at 1 October 2013 3.3 24.8 40.2 68.3 Loss for the year - - (28.9) (28.9) Other comprehensive income for the year - - - - Total comprehensive loss for the year - - (28.9) (28.9) Final dividend relating to 2013 9 - - (0.7) (0.7) Share schemes - Value of employees’ services 6 - - 0.1 0.1 Balance at 30 September 2014 3.3 24.8 10.7 38.8 Loss for the year - - (0.9) (0.9) Other comprehensive income for the year - - - - Total comprehensive loss for the year - - (0.9) (0.9) Share schemes - Value of employees’ services 6 - - 0.1 0.1 Balance at 30 September 2015 3.3 24.8 9.9 38.0 Financial Statements - 46 £m 1.0 7.5 0.7 2.8 1.2 3.3 9.1 3.5 0.5 0.6 1.2 0.8 4.4 1.2 (0.3) 2014 22.9 68.8 24.8 68.8 40.9 32.6 12.8 45.9 25.9 27.1 36.2 109.0 (104.2) by:

- £m 0.6 2.5 0.7 2.1 0.8 7.1 3.3 0.5 0.5 0.9 3.5 4.3 2.9 1.2 (0.3) 2015 19.5 64.4 24.8 64.4 40.9 31.4 15.3 44.9 25.9 33.0 20.7 109.0 behalf (105.4)

its

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8 8 8 12 18 19 13 15 22 23 25 27 21 13 17 20 27 15 16 Note and

2015

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Directors

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Board

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enny Ladkin-Brand enny P Chief approved

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sale 79

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held

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assets statements

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financial

Total current assets Total assets Total Intangible assets - goodwill Deferred tax Provisions Other non-current liabilities liabilities non-current Total Total equity and liabilities equity Total Equity and liabilities Equity Issued share capital Non-current Cash Share premium account Merger reserve Current liabilities Financial liabilities - interest-bearing loans and borrowings Property, Assets Non-current assets Intangible assets - other and other receivables Trade Total equity Total Non-current liabilities Corporation tax payable and other payables Trade Treasury reserve Treasury Accumulated losses Deferred tax non-current assets Total Current assets Inventories Corporation tax recoverable Corporation tax payable liabilities current Total liabilities Total Peter Allen Peter Chairman The Consolidated balance sheet Consolidated as at 30 September 2015 AnnualReport and Accounts 2015 47 Future plc

Financial statements

Company balance sheet as at 30 September 2015

2015 2014 Note £m £m Assets Non-current assets Investment in Group undertakings 14 131.9 131.9 Total non-current assets 131.9 131.9 Current assets Trade and other receivables 17 46.7 44.0 Total current assets 46.7 44.0 Total assets 178.6 175.9 Equity and liabilities Equity Issued share capital 25 3.3 3.3 Share premium account 24.8 24.8 Retained earnings 9.9 10.7 Total equity 38.0 38.8 Non-current liabilities Corporation tax payable 8 3.5 4.4 Total non-current liabilities 3.5 4.4 Current liabilities Financial liabilities - interest-bearing loans and borrowings 21 4.3 - Financial liabilities - non-interest-bearing overdraft 21 7.9 8.6 Trade and other payables 20 124.0 123.2 Corporation tax payable 8 0.9 0.9 Total current liabilities 137.1 132.7 Total liabilities 140.6 137.1 Total equity and liabilities 178.6 175.9

The financial statements on pages 43 to 79 were approved by the Board of Directors on 15 December 2015 and signed on its behalf by:

Peter Allen Penny Ladkin-Brand Chairman Chief Financial Officer

Future plc Company registration number: 3757874 Annual Report and Accounts 2015 48

Consolidated and Company cash flow statements for the year ended 30 September 2015

Group Company Group Company 2015 2015 2014 2014 £m £m £m £m Cash flows from operating activities Cash used in operations (7.5) (0.5) (0.3) (1.6) Tax received 0.5 - - - Interest paid (0.6) (0.5) (1.0) (0.8) Tax paid (1.0) (0.7) (1.5) (0.7) Net cash used in operating activities (8.6) (1.7) (2.8) (3.1) Cash flows from investing activities Purchase of property, plant and equipment (0.2) - (0.4) - Purchase of computer software and website development (1.8) - (2.2) - Purchase of share in associate - - (0.2) - Disposal of property, plant and equipment 1.2 - - - Disposal of magazine titles and trademarks 0.1 - 22.3 - Costs of business disposals - - (1.0) - Net movement in amounts owed to/by subsidiaries - (1.8) - 10.2 Net cash (used in)/generated from investing activities (0.7) (1.8) 18.5 10.2 Cash flows from financing activities Draw down of bank loans 3.5 3.5 3.8 2.0 Repayment of bank loans - - (15.6) (9.0) Bank arrangement fees (0.2) (0.2) (0.5) (0.5) Equity dividends paid - - (0.7) (0.7) Net cash generated from/(used in) financing activities 3.3 3.3 (13.0) (8.2) Net (decrease)/increase in cash and cash equivalents (6.0) (0.2) 2.7 (1.1) Cash and cash equivalents at beginning of year 7.5 (8.6) 4.6 (7.5) Exchange adjustments 0.1 - 0.2 - Cash and cash equivalents at end of year 1.6 (8.8) 7.5 (8.6) Amount attributable to continuing operations 1.6 (8.8) 7.5 (8.6) Financial Statements 49 Future plc

Financial statements

Notes to the Consolidated and Company cash flow statements for the year ended 30 September 2015

A. Cash used in operations The reconciliation of (loss)/profit for the year to cash flows used in operations is set out below:

Group Company Group Company 2015 2015 2014 2014 £m £m £m £m (Loss)/profit for the year – Continuing operations (2.0) (0.9) (34.9) (28.9) – Discontinued operations 0.7 - 1.0 - Loss for the year – Total Group (1.3) (0.9) (33.9) (28.9) Adjustments for: Depreciation charge 0.5 - 1.0 - Amortisation of intangible assets 2.3 - 2.3 - Impairment of intangible assets - - 26.0 - Profit on disposal of magazine titles and trademarks (0.1) - (3.5) - Profit on disposal of property, plant and equipment (0.3) - - - Share schemes - Value of employees’ services 0.1 - 0.1 - Impairment of investment in Group undertakings - 0.1 - 27.3 Provision against amount due from Group undertaking - - - 0.2 Net finance costs 0.6 1.5 0.8 0.6 Tax credit (0.4) (1.2) (0.8) (0.8) Profit/(loss) before changes in working capital and provisions 1.4 (0.5) (8.0) (1.6) Movement in provisions (0.7) - 1.3 - Decrease in inventories 0.1 - 1.0 - (Increase)/decrease in trade and other receivables (2.8) - 9.6 - Decrease in trade and other payables (5.5) - (4.2) - Cash used in operations (7.5) (0.5) (0.3) (1.6)

B. Analysis of net cash/(debt)

1 October Other non-cash Exchange 30 September 2014 Cash flows changes movements 2015 Group £m £m £m £m £m Cash and cash equivalents 7.5 (6.0) - 0.1 1.6 Debt due within one year - (3.5) 0.1 - (3.4) Net cash/(debt) 7.5 (9.5) 0.1 0.1 (1.8)

1 October Other non-cash 30 September 2014 Cash flows changes 2015 Company £m £m £m £m Cash and cash equivalents (8.6) (0.2) - (8.8) Debt due within one year - (3.5) 0.1 (3.4) Net debt (8.6) (3.7) 0.1 (12.2)

C. Reconciliation of movement in net cash/(debt)

Group Company Group Company 2015 2015 2014 2014 £m £m £m £m Net cash/(debt) at start of year 7.5 (8.6) (6.9) (14.1) (Decrease)/increase in cash and cash equivalents (6.0) (0.2) 2.7 (1.1) Movement in borrowings (3.5) (3.5) 11.8 7.0 Other non-cash changes 0.1 0.1 (0.4) (0.4) Exchange movements 0.1 - 0.3 - Net (debt)/cash at end of year (1.8) (12.2) 7.5 (8.6) Annual Report and Accounts 2015 50 Accounting policies

Basis of preparation

These financial statements have been prepared under the historical cost convention, except for derivative financial instruments and share awards which are stated at fair value.

The principal accounting policies applied in the preparation of the consolidated financial statements published in this 2015 Annual Report are set out on pages 50 to 53. These policies have been applied consistently to all years presented, unless otherwise stated.

The financial statements of the Group have been prepared in accordance with International Financial Reporting Standards (IFRS) issued by the International Accounting Standards Board (IASB) and the IFRS Interpretations Committee’s (IFRS IC) interpretations as adopted by the European Union, applicable as at 30 September 2015, and those parts of the Companies Act 2006 applicable to companies reporting under IFRS.

The going concern basis has been adopted in preparing these financial statements as stated by the Directors on page 25.

Discontinued operations and are considered when assessing whether the risks and rewards of ownership have been non-current assets held for sale Group controls another entity. Subsidiaries transferred to the buyer. Revenue from are fully consolidated from the date on which services rendered is recognised in the During 2014 the Sport, Craft and Auto control is transferred to the Group. They are income statement once the service has portfolios were disposed of. In accordance deconsolidated from the date that control been completed. with IFRS 5 the results of these operations are ceases. The purchase method of accounting presented as discontinued operations in the is used to account for the acquisition of Revenue comprises the fair value of the Consolidated income statement. See note 11 subsidiaries by the Group. consideration received or receivable for the for further details. sale of goods and services in the ordinary The cost of an acquisition is measured as course of the Group’s activities. Revenue Where the Group expects to recover the the fair value of the assets given, equity is shown net of value-added tax, estimated carrying amount of a group of assets through a instruments issued and liabilities incurred or returns, rebates and discounts and after sale transaction rather than through continuing assumed at the date of exchange, and includes eliminating sales within the Group. The use, the assets are available for immediate the fair value of any asset or liability resulting following recognition criteria also apply: sale in their present condition, management from a contingent consideration arrangement. is committed to the sale and a sale is highly Acquisition-related costs are expensed as • Magazine newsstand circulation and probable at the balance sheet date, the assets incurred. Identifiable assets acquired and advertising revenue is recognised according are classified as held for sale. liabilities and contingent liabilities assumed in to the date that the related publication goes a business combination are measured initially on sale. After classification as held for sale, the assets at their fair values at the acquisition date. The are measured at the lower of the carrying excess of the cost of acquisition over the fair • Revenue from the sale of digital magazine amount and fair value less costs to sell. value of the Group’s share of the identifiable subscriptions is recognised uniformly over An impairment loss is recognised in the net assets acquired is recorded as goodwill. the term of the subscription. income statement for any write-down of the assets to fair value less costs to sell. A gain Inter-company transactions, balances and • Event income is recognised when the event for any subsequent increase in fair value unrealised gains on transactions between has taken place. less costs to sell is recognised in the income Group companies are eliminated. Unrealised statement to the extent that it does not exceed losses are also eliminated but are considered • Licensing revenue is recognised on the the cumulative impairment loss previously an impairment indicator of the asset supply of the licensed content. recognised. No depreciation or amortisation transferred. Accounting policies of subsidiaries is charged in respect of non-current assets have been changed where necessary to • Other revenue is recognised at the time of classified as held for sale. ensure consistency with the policies adopted sale or provision of service. by the Group. If the group of assets constitutes a separate

major line of business it is classified as a Foreign currency translation Financial Statements discontinued operation. Segment reporting (a) Functional and presentation currency The Group is organised and arranged Items included in the financial statements of Basis of consolidation primarily by geographical segment. Operating each of the Group’s entities are measured segments are reported in a manner consistent using the currency of the primary economic The consolidated financial statements with the internal reporting provided to the environment in which the entity operates incorporate the financial statements of Chief Operating Decision Makers who are (‘the functional currency’). The consolidated Future plc (the Company) and its subsidiary considered to be the executive Directors of financial statements are presented in sterling, undertakings. Subsidiaries are all entities Future plc. which is the Group’s presentation currency. over which the Group has the power to govern the financial and operating policies, (b) Transactions and balances generally accompanying a shareholding of Revenue recognition Foreign currency transactions are translated more than one half of the voting rights. The into the functional currency using the exchange existence and effect of potential voting rights Revenue from the sale of goods is recognised rate prevailing at the date of the transaction. that are currently exercisable or convertible in the income statement when the significant Foreign exchange gains and losses resulting 51 Future plc

Financial statements

from the settlement of such transactions The grant by the Company of share awards excluded – as are items that are never taxable and from the translation at balance sheet to the employees of subsidiary undertakings or deductible. Current tax assets relate to exchange rates of monetary assets and is treated as a capital contribution. The payments on account not offset against current liabilities denominated in foreign currencies fair value of employee services received, tax liabilities. are recognised in the income statement, measured by reference to the grant date fair with exchange differences arising on trading value, is recognised over the vesting period Deferred tax is provided in full, using the transactions being reported in operating as an increase to investment in subsidiary liability method, on temporary differences profit and with those arising on financing undertakings, with a corresponding credit to arising between the tax bases of assets and transactions reported in net finance costs equity in the Company’s financial statements. liabilities and their carrying amounts in the unless, as a result of cash flow hedging, they consolidated financial statements. However, are reported in other comprehensive income. Shares in the Company are held in trust to deferred tax is not accounted for if it arises from satisfy the exercise of awards under certain initial recognition of an asset or liability in a (c) Group companies of the Group’s share-based compensation transaction other than a business combination The results and financial position of all the Group plans and exceptional awards. The trust is that at the time of the transaction affects neither entities that have a functional currency different consolidated within the Group financial accounting nor taxable profit or loss. Deferred from the presentation currency are translated statements. These shares are presented tax is determined using tax rates (and laws) that into the presentation currency as follows: in the consolidated balance sheet as a have been enacted or substantively enacted deduction from equity at the market value by the balance sheet date and are expected (i) Assets and liabilities for each balance on the date of acquisition. to apply when the related deferred tax asset is sheet are translated at the closing rate at realised or the deferred tax liability is settled in the date of that balance sheet. (c) Bonus plans the appropriate territory. The Group recognises a liability and an expense (ii) Income and expenses for each income for bonuses taking into consideration the profit Deferred tax assets are recognised to the statement are translated at average attributable to the Company’s shareholders after extent that it is probable that future taxable exchange rates. certain adjustments. The Group recognises a profits will be available against which the provision where contractually obliged or where temporary differences can be utilised. (iii) All resulting exchange differences are there is a past practice that has created a Deferred tax is provided on temporary recognised as a separate component constructive obligation. differences arising on investments in of equity. subsidiaries, except where the timing of the reversal of the temporary difference is On consolidation, exchange differences Leases controlled by the Group and it is probable arising from the translation of the net investment that the temporary difference will not reverse in foreign operations, and of borrowings and Leases in which the Group assumes in the foreseeable future. other currency instruments designated as substantially all the risks and rewards of hedges of such investments, are taken to ownership of the leased assets are classified Deferred tax assets and liabilities are offset shareholders’ equity. When a foreign operation as finance leases. All other leases are classed against each other where they relate to is sold, exchange differences that were as operating leases. the same jurisdiction and there is a legally recorded in equity are recognised in the income enforceable right to offset. statement as part of the gain or loss on sale. Assets held under finance leases are included either as property, plant and equipment or intangible assets at the lower of their fair Dividends Employee benefits value at inception or the present value of the minimum lease payments and are depreciated All dividend distributions to the Company’s (a) Pension obligations over their estimated economic lives or the shareholders are recognised as a liability in the The Group has a number of defined contribution finance lease period, whichever is the shorter. financial statements in the period in which they plans. For defined contribution plans the Group The corresponding liability is recorded within are approved. pays contributions into a privately administered borrowings. The interest element of the rental pension plan on a contractual or voluntary costs is charged against profits over the period basis. The Group has no further payment of the lease using the actuarial method. Property, plant and equipment obligations once the contributions have been paid. Contributions are charged to the income Payments made under operating leases (net Property, plant and equipment is stated at statement as they are incurred. of any incentives received from the lessor) are cost (or deemed cost) less accumulated charged to the income statement on a straight- depreciation and impairment losses. Cost (b) Share-based compensation line basis over the period of the lease. includes expenditure that is directly attributable The Group operates a number of equity- to the acquisition of the items. settled, share-based compensation plans. The fair value of the employee services Tax received in exchange for the grant of the Depreciation awards is recognised as an expense. The Tax on the profit or loss for the year comprises total amount to be expensed over the current tax and deferred tax. Tax is recognised Depreciation is calculated using the straight- appropriate service period is determined by in the income statement except to the extent line method to allocate the cost of property, reference to the fair value of the awards. The that it relates to items recognised directly in plant and equipment less residual value over calculation of fair value includes assumptions equity in which case it is recognised in equity. estimated useful lives, as follows: regarding the number of cancellations and excludes the impact of any non-market Current tax is payable based on taxable • Land and buildings – 50 years or period of vesting conditions (for example, earnings per profits for the year, using tax rates that have the lease if shorter. share). Non-market vesting conditions are been enacted or substantively enacted included in assumptions about the number at the balance sheet date, along with any • Plant and machinery – between one and of awards that are expected to vest. At each adjustment relating to tax payable in previous five years. balance sheet date, the Group revises its years. Management periodically evaluates estimates of the number of awards that are items detailed in tax returns where the tax • Equipment, fixtures and fittings – between expected to vest. It recognises the impact of treatment is subject to interpretation. Taxable one and five years. the revision of original estimates, if any, in profit differs from net profit in the income the income statement, with a corresponding statement in that income or expense items that The assets’ residual values and useful lives adjustment to equity. are taxable or deductible in other years are are reviewed, and adjusted if appropriate, Annual Report and Accounts 2015 52

at each balance sheet date. An asset’s frequently when there is an indication that it in determining the profit or loss on disposal. The carrying amount is written down immediately may be impaired. Therefore, the evolution of goodwill allocated to the disposal is measured to its recoverable amount if the asset’s general economic and financial trends as well on the basis of the relative profitability of the carrying amount is greater than its estimated as actual economic performance compared operation disposed and the operations retained. recoverable amount. to market expectations represent external indicators that are analysed by the Group, Gains and losses on disposals are determined together with internal performance indicators, Inventories by comparing proceeds with carrying amounts. in order to assess whether an impairment test These are included in the income statement. should be performed more than once a year. Inventories are stated at the lower of cost and net realisable value. For raw materials, cost is IAS 36 ‘Impairment of Assets’ requires these taken to be the purchase price on a first in, first Intangible assets tests to be performed at the level of each out basis. For work in progress and finished CGU or group of CGUs likely to benefit from goods, cost is calculated as the direct cost of (a) Goodwill acquisition-related synergies, within an production. It excludes borrowing costs. Net In respect of business combinations that have operating segment. realisable value is the estimated selling price in occurred since 1 October 2004, goodwill the ordinary course of business, less applicable represents the difference between the cost Any impairment of goodwill is recorded in the variable selling expenses. of the acquisition and the fair value of net income statement as a deduction from operating identifiable assets acquired. In respect of profit and is never reversed subsequently. business combinations prior to this date, Trade and other receivables goodwill is included on the basis of its Other intangible assets with a finite life are deemed cost, which represents the amount amortised and are tested for impairment only Trade and other receivables are initially recorded under previous GAAP. where there is an indication that an impairment recognised at fair value and subsequently may have occurred. measured at amortised cost using the effective Goodwill is stated at cost less any interest method, less a provision for impairment. accumulated impairment losses. Goodwill is allocated to appropriate cash generating units Recoverable amount A provision for impairment of trade (those expected to benefit from the business receivables is made when there is objective combination) and it is not subject to amortisation To determine whether an impairment loss evidence that the Group will not be able to but is tested annually for impairment. should be recognised, the carrying value of collect all amounts due in accordance with the assets and liabilities of the CGUs or the original terms of the receivables. (b) Titles, trademarks, customer lists, groups of CGUs is compared to their advertising relationships and other recoverable amount. ‘magazine and website related’ intangibles Cash and cash equivalents Magazine-related intangible assets have a Carrying values of CGUs and groups of CGUs finite useful life and are stated at cost less tested include goodwill and assets with finite Cash and cash equivalents include cash in accumulated amortisation. Assets acquired useful lives (property, plant and equipment, hand, deposits held at call with banks and as part of a business combination are initially intangible assets and net working capital). bank overdrafts for the purpose of the cash stated at fair value. Amortisation is calculated flow statement. Bank overdrafts are shown using the straight-line method to allocate the The recoverable amount of a CGU is the within borrowings in current liabilities on the cost of these intangibles over their estimated higher of its fair value less costs to sell and balance sheet. useful lives (between one and five years). its value in use. Fair value less costs to sell is the best estimate of the amount obtainable Expenditure incurred on the launch of new from the sale of an asset in an arm’s length Trade and other payables magazine titles is recognised as an expense transaction between knowledgeable, willing in the income statement as incurred. parties, less the costs of disposal. This Trade and other payables are initially estimate is determined, on 30 September, on recognised at fair value and subsequently (c) Computer software and website the basis of the discounted present value of measured at amortised cost using the development expected future cash flows plus a terminal effective interest method. Non-integral computer software purchases value and reflects general market sentiment are stated at cost less accumulated and conditions. amortisation. Costs incurred in the Borrowings development of new websites are capitalised Value in use is the present value of the only where the cost can be directly attributed future cash flows expected to be derived Borrowings are recognised initially at fair value, to developing the website to operate in the from the CGUs or group of CGUs. Cash net of transaction costs incurred. Borrowings manner intended by management and only flow projections are based on economic are subsequently stated at amortised cost with to the extent of the future economic benefits assumptions and forecast trading conditions any difference between the proceeds (net of expected from its use. These costs are drawn up by the Group’s management, transaction costs) and the redemption value amortised on a straight-line basis over their as follows: recognised in the income statement over the

estimated useful lives (between one and three period of the borrowings using the effective Financial Statements years). Costs associated with maintaining • cash flow projections are based on five-year interest method. computer software or websites are recognised business plans; as an expense as incurred. Borrowings are classified as current liabilities • cash flow projections beyond that time frame unless the Group has an unconditional right to are extrapolated by applying a 2.0% growth defer settlement of the liability for at least 12 Impairment tests and Cash-Generating rate to perpetuity; and months after the balance sheet date. Units (CGUs) • the cash flows obtained are discounted A CGU is defined as the smallest identifiable using appropriate rates for the business and Provisions group of assets that generates cash inflows the territories concerned. that are largely independent of the cash inflows Provisions are recognised when the Group has from other assets or groups of assets. If goodwill has been allocated to a CGU and a present legal or constructive obligation as a an operation within that CGU is disposed, result of past events, and it is more likely than Goodwill is not amortised but tested for the goodwill associated with that operation is not that an outflow of resources will be required impairment at least once a year or more included in the carrying amount of the operation to settle the obligation. 53 Future plc

Financial statements

Provisions are measured at the Directors’ best This classification excludes impairment charges (c) Revenue recognition estimate of the expenditure required to settle made on the carrying value of CGUs or groups The Group makes a provision for sales returns the obligation at the balance sheet date, and of CGUs. The separate reporting of exceptional at the end of each month. The UK estimate is are discounted to present value where the items helps provide a better picture of the calculated by looking at the forecast sales effect is material. Group’s underlying performance. projections for the following month of the titles that were on sale at the year-end and providing for any shortfall. The US estimate is Derivative financial instruments and Critical accounting assumptions, made based on a study of the historic levels hedging activities judgements and estimates of returns.

The Group uses derivative financial instruments The preparation of the financial statements to reduce exposure to foreign exchange and under IFRS requires the use of certain New or revised accounting standards interest rate risks and recognises these at fair critical accounting assumptions and requires and interpretations value in its balance sheet. The Group applies management to exercise its judgement and cash flow hedge accounting under IAS 39 to make estimates in the process of applying There has been no material impact from in respect of certain instruments held. For the Group’s accounting policies. The areas the adoption of the following new or revised instruments for which hedge accounting is requiring a higher degree of judgement or standards or interpretations which are relevant applied, gains and losses are taken to equity. areas where assumptions and estimates are to the Group: Any changes to the fair value of derivatives significant to the financial statements are not hedge accounted for are recognised in the discussed below: • Annual improvements to IFRSs 2011- income statement. Any new instruments entered 2013 Cycle. into by the Group will be reviewed on a ‘case by (a) Carrying value of goodwill and case’ basis at inception to determine whether other intangibles Certain new standards, amendments and they should qualify as hedges and be accounted The Group uses forecast cash flow information interpretations to existing standards have been for accordingly under IAS 39. In accordance and estimates of future growth to assess published that are mandatory for accounting with its treasury policy, the Group does not hold whether goodwill and other intangible assets periods beginning on or after 1 October 2015 or or issue any derivative financial instruments for are impaired. If the results of an operation in later periods but which the Group has chosen trading purposes. future years are adverse to the estimates used not to adopt early. These include the following for impairment testing, an impairment may be standards which are relevant to the Group: triggered at that point, or a reduction in useful Investments economic life may be required. • Annual improvements to IFRSs 2012- 2014 Cycle. The Company’s investments in subsidiary (b) Taxation undertakings are stated at the fair value The Group is subject to tax in all territories, • Amendment to IAS 1 Presentation of consideration payable, including related and judgement and estimates of future of financial statements on the acquisition costs, less any provisions profitability are required to determine the disclosure initiative. for impairment. Group’s deferred tax position. If the final tax outcome is different to that assumed, resulting • IFRS 15 Revenue from contracts changes will be reflected in the income with customers. Exceptional items statement or statement of changes in equity as appropriate. The Group corporation tax • IFRS 9 Financial instruments. The Group classifies transactions as exceptional provision reflects management’s estimation of where they relate to an event that falls outside the amount of tax payable for fiscal years with The Group does not expect that these the ordinary activities of the business and open tax computations where liabilities remain standards and interpretations issued but not where individually or in aggregate they have to be agreed with Her Majesty’s Revenue and yet effective will have a material impact on a material impact on the financial statements. Customs and other tax authorities. results or net assets. Annual Report and Accounts 2015 54 Notes to the financial statements

1. Segmental reporting

The Group is organised and arranged primarily by reportable segment. The executive Directors consider the performance of the business from a geographical perspective, namely the UK and the US. The Australian business is considered to be part of the UK segment and is not reported separately due to its size.

(a) Reportable segment (i) Segment revenue

2015 2014 £m £m UK 47.3 53.1 US 13.4 13.7 Revenue between segments (0.9) (0.8) Total continuing operations 59.8 66.0

Transactions between segments are carried out at arm’s length.

(ii) Segment EBITDAE

2015 2014 £m £m UK 3.3 (5.3) US 0.3 (1.7) Total segment EBITDAE from continuing operations 3.6 (7.0)

EBITDAE is used by the executive Directors to assess the performance of each segment.

A reconciliation of total segment EBITDAE from continuing operations to loss before tax from continuing operations is provided as follows:

2015 2014 £m £m Total segment EBITDAE from continuing operations 3.6 (7.0) Depreciation (0.5) (1.0) Amortisation (2.3) (2.3) Exceptional items (2.5) (7.5) Impairment of intangible assets - (16.8) Net finance costs (0.6) (0.8) Loss before tax from continuing operations (2.3) (35.4)

(iii) Segment assets and liabilities

Segment assets Segment liabilities Segment net assets

2015 2014 2015 2014 2015 2014 £m £m £m £m £m £m UK 60.2 63.3 (29.0) (31.9) 31.2 31.4 US 4.2 5.5 (4.0) (4.3) 0.2 1.2 Total 64.4 68.8 (33.0) (36.2) 31.4 32.6

(iv) Other segment information Financial Statements

Depreciation Capital expenditure and amortisation Impairment charges Exceptional items

2015 2014 2015 2014 2015 2014 2015 2014 £m £m £m £m £m £m £m £m UK 1.7 1.8 1.9 2.5 - 13.4 2.1 5.9 US 0.3 0.8 0.9 0.8 - 3.4 0.4 1.6 Continuing operations 2.0 2.6 2.8 3.3 - 16.8 2.5 7.5 Discontinued operations - - - - - 9.2 (0.1) (3.5) Total 2.0 2.6 2.8 3.3 - 26.0 2.4 4.0

Other than the items disclosed above and a share-based payments charge of £0.1m (2014: £0.1m) there were no other significant non-cash expenses during the year. 55 Future plc

Financial statements

1. Segmental reporting (continued)

(b) Business segment After geographical location, the Group is managed into three key business segments. Each business segment comprises groups of individual magazines, websites and events, combined according to the market sector in which they operate. During the year an additional segment, Other, was added to better reflect the nature of transactions. These include unallocated salaries and other direct costs which are no longer directly charged to the business segments for internal reporting purposes. The Group considers that the assets within each segment are exposed to the same risks.

(i) Revenue by business segment

2014 2015 restated £m £m Technology 19.7 20.0 Games and Entertainment 25.7 29.0 Photography and Creative 13.6 16.2 Other 1.7 1.6 Revenue between segments (0.9) (0.8) Total continuing operations 59.8 66.0

(ii) Gross profit by business segment

2014 2015 restated £m £m Technology 15.2 15.0 Games and Entertainment 18.4 21.3 Photography and Creative 8.9 11.0 Other (26.8) (36.5) Add back: distribution expenses 3.5 4.6 Total continuing operations 19.2 15.4

2. Revenue

An additional analysis of the Group’s revenue is shown below:

2015 2014 £m £m Digital and Diversified 28.1 27.3 Print 31.7 38.7 Total continuing operations 59.8 66.0

3. Operating loss from continuing operations

2015 2014 £m £m Revenue 59.8 66.0 Cost of sales (40.6) (50.6) Gross profit 19.2 15.4 Distribution expenses (3.5) (4.6) Administration expenses (14.9) (21.1) Exceptional items (2.5) (7.5) Impairment of intangible assets - (16.8) Operating loss from continuing operations (1.7) (34.6) Annual Report and Accounts 2015 56

4. Fees paid to auditors

2015 2014 £m £m Audit fees in respect of the audit of the financial statements of the Company and the consolidated financial statements 0.13 0.13 Audit related assurance services 0.02 0.02 0.15 0.15 Tax compliance services 0.10 0.09 Tax advisory services 0.08 0.02 Services relating to corporate finance transactions - 0.13 Total fees 0.33 0.39

5. Exceptional items from continuing operations

2015 2014 £m £m Vacant property provision movements 0.4 1.3 Restructuring and redundancy costs 2.8 5.3 Profit on disposal of property (0.3) - Provision for bad debts (0.4) 0.9 Total charge 2.5 7.5

The vacant property provision movement during the year relates to surplus office space in the UK and the US.

The restructuring and redundancy costs relate mainly to property related costs, incurred as a result of continuing the rationalisation of the Group’s property portfolio, and staff termination payments. The profit on disposal of property relates to the sale of one of the Group’s UK properties for cash proceeds of £1.2m.

The provision for bad debts represents the release of part of a provision made in 2014 in relation to amounts owed to the Group which were no longer considered recoverable following the filing for bankruptcy of Source Home Entertainment LLC and its group companies, one of the Group’s distributors in the US.

6. Employees from continuing operations

2015 2014 £m £m Wages and salaries 23.6 31.7 Social security costs 2.2 4.1 Other pension costs 0.8 1.1 Share schemes - Value of employees’ services 0.1 0.1 Total staff costs from continuing operations 26.7 37.0

2015 2014 Average monthly number of people for continuing operations (including Directors) No. No. Production 436 597 Administration 94 117 Total 530 714 Financial Statements At 30 September 2015, the actual number of people employed by the Group was 521 (2014: 577). In respect of our reportable segments, 448 (2014: 486) were employed in the UK and 73 (2014: 91) were employed in the US.

Key management personnel compensation

Group Company Group Company 2015 2015 2014 2014 £m £m £m £m Salaries and other short-term employee benefits 0.9 0.2 0.8 0.2 Termination benefits - - 0.5 0.3 Total 0.9 0.2 1.3 0.5

Key management personnel are deemed to be the members of the Board of Future plc. It is this Board which has responsibility for planning, directing and controlling the activities of the Group. 57 Future plc

Financial statements

6. Employees from continuing operations (continued)

Zillah Byng-Thorne, Richard Haley and Penny Ladkin-Brand were paid by Future Publishing Limited, a subsidiary company, for their services. In 2015 £0.1m (2014: £0.1m) was recharged to Future plc by Future Publishing Limited in respect of Zillah Byng-Thorne, £nil (2014: £nil) was recharged in respect of Richard Haley and £nil (2014: £nil) was recharged in respect of Penny Ladkin-Brand.

Further details on the Directors’ remuneration and interests are given in the Directors’ remuneration report on pages 29 to 39. The highest paid Director during the year was Zillah Byng-Thorne (2014: Mark Wood) and details of her remuneration are shown on page 30.

7. Finance income and costs

2015 2014 £m £m Fair value gain on interest rate derivative not in a hedge relationship - 0.2 Total finance income - 0.2 Interest payable on interest-bearing loans and borrowings (0.2) (0.6) Amortisation of bank loan arrangement fees (0.4) (0.5) Other finance costs (0.2) (0.3) Exchange gains 0.2 0.4 Total finance costs (0.6) (1.0) Net finance costs from continuing operations (0.6) (0.8)

In October 2007, the Group entered into a UK interest rate collar over £5.0m which had a seven-year period and expired in October 2014. The collar had a cap at 6.00% and a floor of 4.65%. A fair value gain of £0.2m on interest rate derivatives was included within finance income in 2014 as hedge accounting was not applied to these contracts.

8. Tax on loss

The tax credited in the consolidated income statement for continuing operations is analysed below:

2015 2014 £m £m UK corporation tax Current tax at 20.5% (2014: 22%) on the loss for the year - - Adjustments in respect of previous years (0.3) (0.3) Current tax (0.3) (0.3) Deferred tax origination and reversal of temporary differences Current year charge/(credit) 0.1 (0.1) Adjustments in respect of previous years (0.1) (0.1) Deferred tax - (0.2) Total tax credit on continuing operations (0.3) (0.5)

The tax assessed in each year differs from the standard rate of corporation tax in the UK for the relevant year. The differences are explained below:

2015 2014 £m £m Loss before tax (2.3) (35.4) Loss before tax at the standard UK tax rate of 20.5% (2014: 22%) (0.5) (7.8) Non-deductible amortisation & impairment - 5.9 Losses generated and unrecognised 0.3 1.6 Losses and other timing differences not recognised in respect of tax in the US 0.2 - Profits relieved against brought forward losses (0.1) (0.1) Other net disallowable items 0.2 0.3 Adjustments in respect of previous years (0.4) (0.4) Total tax credit on continuing operations (0.3) (0.5)

In 2013 the Group reached agreement with HMRC relating to the tax treatment of certain one-off transactions which took place in 2003. Part of that agreement will result in the Group paying tax of £6.2m plus interest (comprising instalments of £85,000 per month over five years from July 2013 and a final instalment of £2.0m). The tax payable was fully provided for in prior years’ accounts.

The liability in the balance sheet has been split based on this agreement between current liabilities and non-current liabilities.

The Group has continued to recognise a portion of its historic losses of £1.3m (2014: £1.3m). The Directors consider that no material change in circumstances have occurred during the year to affect this amount. Annual Report and Accounts 2015 58

9. Dividends

Equity dividends 2015 2014 Number of shares in issue at end of year (million) 334.4 333.8 Dividends paid in year (pence per share) - 0.2 Dividends paid in year (£m) - 0.7

The dividends totalling £0.7m paid during the year ended 30 September 2014 related to the final dividend for the year ended 30 September 2013 of 0.2 pence per share.

10. Earnings per share

Basic earnings per share are calculated using the weighted average number of Ordinary shares in issue during the year. Diluted earnings per share have been calculated by taking into account the dilutive effect of shares that would be issued on conversion into Ordinary shares of awards held under employee share schemes.

Adjusted earnings per share removes the effect of exceptional items, impairment of intangible assets and any related tax effects from the calculation.

Total Group 2015 2014 Adjustments to loss after tax: Loss after tax (£m) (1.3) (33.9) Exceptional items (£m) 2.4 4.0 Impairment of intangible assets (£m) - 26.0 Tax effect of the above adjustments (£m) (0.5) (0.3) Adjusted profit/(loss) after tax (£m) 0.6 (4.2)

Weighted average number of shares in issue during the year: - Basic 332,796,904 332,208,630 - Dilutive effect of share options 536,550 2,814,149 - Diluted 333,333,454 335,022,779 Basic loss per share (in pence) (0.4) (10.2) Adjusted basic earnings/(loss) per share (in pence) 0.2 (1.3) Diluted loss per share (in pence) (0.4) (10.2) Adjusted diluted earnings/(loss) per share (in pence) 0.2 (1.3)

The adjustments to loss after tax have the following effect: Basic and diluted loss per share (pence) (0.4) (10.2) Exceptional items (pence) 0.7 1.2 Impairment of intangible assets (pence) - 7.8 Tax effect of the above adjustments (pence) (0.1) (0.1) Adjusted basic and diluted earnings/(loss) per share (pence) 0.2 (1.3) Financial Statements 59 Future plc

Financial statements

10. Earnings per share (continued)

Continuing operations 2015 2014 Adjustments to loss after tax: Loss after tax (£m) (2.0) (34.9) Exceptional items (£m) 2.5 7.5 Impairment of intangible assets (£m) - 16.8 Tax effect of the above adjustments (£m) (0.4) - Adjusted profit/(loss) after tax (£m) 0.1 (10.6)

Weighted average number of shares in issue during the year: - Basic 332,796,904 332,208,630 - Dilutive effect of share options 536,550 2,814,149 - Diluted 333,333,454 335,022,779 Basic loss per share (in pence) (0.6) (10.5) Adjusted basic earnings/(loss) per share (in pence) - (3.2) Diluted loss per share (in pence) (0.6) (10.5) Adjusted diluted earnings/(loss) per share (in pence) - (3.2)

The adjustments to loss after tax have the following effect: Basic and diluted loss per share (pence) (0.6) (10.5) Exceptional items (pence) 0.7 2.3 Impairment of intangible assets (pence) - 5.0 Tax effect of the above adjustments (pence) (0.1) - Adjusted basic and diluted earnings/(loss) per share (pence) - (3.2)

Discontinued operations 2015 2014 Adjustments to profit after tax: Profit after tax (£m) 0.7 1.0 Exceptional items (£m) (0.1) (3.5) Impairment of intangible assets (£m) - 9.2 Tax effect of the above adjustments (£m) (0.1) (0.3) Adjusted profit after tax (£m) 0.5 6.4

Weighted average number of shares in issue during the year: - Basic 332,796,904 332,208,630 - Dilutive effect of share options 536,550 2,814,149 - Diluted 333,333,454 335,022,779 Basic earnings per share (in pence) 0.2 0.3 Adjusted basic earnings per share (in pence) 0.2 1.9 Diluted earnings per share (in pence) 0.2 0.3 Adjusted diluted earnings per share (in pence) 0.2 1.9

The adjustments to profit after tax have the following effect: Basic and diluted earnings per share (pence) 0.2 0.3 Exceptional items (pence) - (1.1) Impairment of intangible assets (pence) - 2.8 Tax effect of the above adjustments (pence) - (0.1) Adjusted basic and diluted earnings per share (pence) 0.2 1.9 Financial Statements 60

£m £m 6.4 1.0 0.3 3.8 8.1 3.5 0.2 0.3 3.5 0.2 2.3 (1.5) (0.2) (9.2) (2.8) (2.8) (2.8) (1.5) 2014 2014 22.9 19.3 19.8 24.8 22.3 23.3 (14.8) costs

made.

those

been

Only

has - -

£m 0.2 0.4 0.5 0.5 0.5 0.5 0.1 0.7 0.1 0.2 0.6 (0.1) 2015 below.

overheads

analysed

central

year

prior

the

apportionment

and

discontinued

operations

from

discontinued

profit

The

within

year.

the

classified

during been

have

titles

discontinued

disposed

the

classified

were

profit attributable

operations

Gain on sale of operations after tax Cost of sales Distribution expenses Administration expenses exceptional items and impairment of intangible assets Operating profit before depreciation, amortisation, Impairment of intangible assets Operating profit/(loss) Profit/(loss) from discontinued operations before tax Profit/(loss) from discontinued operations Profit/(loss) after tax from discontinued operations Gain on sale of operations Tax on sale of operations Tax Profit from discontinued operations Revenue Gross Gain on sale of operations Intangible assets Investment in associate Inventories Net assets at disposal: Subscription liabilities consideration Total Costs of disposal Consideration: Cash Deferred consideration AnnualReport and Accounts 2015 of operations for the in 2014 disposed titles is set out below: The gain on sale of operations relates in 2015 to contingent consideration received in relation to the Crafttitles that were soldThe in gain 2014. on sale 11. Discontinued11. operations No directly 61 Future plc

Financial statements

11. Discontinued operations (continued)

(i) Disposal of Sport and Craft titles

On 21 July 2014, the Group completed the disposal of a portfolio comprising its Sport titles and Craft titles and as such the results of this portfolio have been included within discontinued operations. The portfolio was sold for cash proceeds of £20.0m and magazine deferred revenue retained by the Group of £2.0m.

During 2015 cash flows relating to the Sport and Craft titles were immaterial. During 2014 the Sport and Craft titles increased the Group’s operating cash flows by £4.9m, paid £0.2m in respect of investing activities and paid £nil in respect of financing activities.

The results of the Sport and Craft titles are set out below:

2015 2014 £m £m Revenue 0.2 18.5 Cost of sales 0.3 (12.1) Gross profit 0.5 6.4 Distribution costs (0.1) (1.4) Administration expenses - (0.2) Operating profit before depreciation, amortisation, exceptional items and impairment of intangible assets 0.4 4.8 Impairment of intangible assets - (9.2)

Operating profit/(loss) 0.4 (4.4) Profit/(loss) before tax from discontinued operations 0.4 (4.4) Profit/(loss) after tax from discontinued operations 0.4 (4.4) Gain on sale of operations 0.1 0.8 Tax on sale of operations 0.1 0.3 Gain on sale of operations after tax 0.2 1.1 Profit/(loss) from discontinued operations 0.6 (3.3)

The gain on sale of operations in 2014 for these titles is set out below:

2014 £m Consideration: Cash 20.0 Subscription liabilities 2.0 Total consideration 22.0 Costs of disposal (1.5) 20.5

Net assets at disposal: Intangible assets 19.3 Investment in associate 0.2 Inventories 0.2 19.7 Gain on sale of operations 0.8 Financial Statements

62 £m £m 1.2 1.2 1.2 1.2 3.4 2.2 2.2 3.6 1.3 2.3 0.1 2.2 1.8 0.2 0.3 (2.3) (0.1) 2014 2014 Group’s

the

- - - - £m increased 0.1 0.1 0.1 0.1 0.1 0.1 0.1

2015 Plus

riathlon T

and

activities.

titles

Auto

financing

the

2014

respect

During

£nil

paid

immaterial. and

were

activities

Plus

riathlon investing T

and

titles respect

Auto

£nil

the

to paid

£1.2m, relating

flows

cash

profit

2015

Gain on sale of operations after tax Cost of sales Distribution costs Operating profit before depreciation, amortisation, exceptional items and impairment of intangible assets Operating profit before depreciation, amortisation, Operating profit Profit before tax from discontinued operations Profit after tax from discontinued operations Gain on sale of operations Profit from discontinued operations Gross Revenue Net assets at disposal: Inventories Gain on sale of operations Subscription liabilities consideration Total Consideration: Cash Deferred consideration AnnualReport and Accounts 2015 The gain on sale of operations in 2014 for these titles is set out below: The gain on sale of operations in During operating Plus are set out below: Triathlon Auto titles and The results of the 11. Discontinued11. operations (continued) Plus titles and Triathlon Auto (ii) Disposal of have been included Plus and as such the results of this portfolio Triathlon Auto titles and its 2014, the Group disposed of a portfolio comprising August On 18 proceeds of £1.8m and magazine deferredtotal initial consideration of £2.1m, comprising cash The portfolio was sold for within discontinued operations. 30 September 2015 based on of £0.2m was received during the year ended Group of £0.3m. In addition, deferred consideration revenue retained by the revenue performance. 63 Future plc

Financial statements

11. Discontinued operations (continued)

(iii) Disposal of Fast Bikes

On 21 August 2014, the Group disposed of Fast Bikes magazine and associated website and as such the results of this title have been included within discontinued operations. The title was sold for cash proceeds of £0.5m, resulting in a profit on disposal of £0.5m.

During 2015 there were no cash flows relating to Fast Bikes. During 2014 Fast Bikes increased the Group’s operating cash flows by £0.4m, paid £nil in respect of investing activities and paid £nil in respect of financing activities.

There were no results in 2015 relating to Fast Bikes. The results of Fast Bikes in 2014 are set out below:

2014 £m Revenue 0.8 Cost of sales (0.4) Gross profit 0.4

Operating profit before depreciation, amortisation, exceptional items and impairment of intangible assets 0.4

Operating profit 0.4 Profit before tax from discontinued operations 0.4 Profit after tax from discontinued operations 0.4 Gain on sale of operations 0.5 Gain on sale of operations after tax 0.5 Profit from discontinued operations 0.9

The gain on sale of operations in 2014 for this title is set out below:

2014 £m Consideration: Cash 0.5

Net assets at disposal - Gain on sale of operations 0.5 Annual Report and Accounts 2015 64

12. Property, plant and equipment

Equipment, Land and Plant and fixtures and buildings machinery fittings Total Group £m £m £m £m Cost At 1 October 2013 4.1 6.0 2.5 12.6 Additions - 0.3 - 0.3 Disposals - (1.4) (0.2) (1.6) Transferred to non-current assets held for sale (1.2) - - (1.2) At 30 September 2014 2.9 4.9 2.3 10.1 Additions - 0.2 - 0.2 Disposals (1.4) - (0.6) (2.0) Exchange adjustments 0.1 0.1 0.1 0.3 At 30 September 2015 1.6 5.2 1.8 8.6

Accumulated depreciation At 1 October 2013 (2.7) (5.3) (2.1) (10.1) Charge for the year (0.3) (0.5) (0.2) (1.0) Disposals - 1.4 0.2 1.6 Transferred to non-current assets held for sale 0.4 - - 0.4 At 30 September 2014 (2.6) (4.4) (2.1) (9.1) Charge for the year (0.1) (0.3) (0.1) (0.5) Disposals 1.4 - 0.5 1.9 Exchange adjustments (0.1) (0.2) - (0.3) At 30 September 2015 (1.4) (4.9) (1.7) (8.0)

Net book value at 30 September 2015 0.2 0.3 0.1 0.6 Net book value at 30 September 2014 0.3 0.5 0.2 1.0 Net book value at 1 October 2013 1.4 0.7 0.4 2.5

Depreciation is included within administration expenses in the consolidated income statement. Financial Statements 65 Future plc

Financial statements

13. Intangible assets

Magazine Goodwill and website Other Total Group £m £m £m £m Cost At 1 October 2013 305.1 15.6 14.2 334.9 Additions - - 2.3 2.3 Disposals (19.3) (0.3) (1.2) (20.8) Exchange adjustments (0.2) (0.1) - (0.3) At 30 September 2014 285.6 15.2 15.3 316.1 Additions - - 1.8 1.8 Disposals - (3.1) (2.8) (5.9) Exchange adjustments 1.9 0.3 0.5 2.7 At 30 September 2015 287.5 12.4 14.8 314.7

Accumulated amortisation At 1 October 2013 (218.8) (15.2) (11.1) (245.1) Charge for the year - (0.3) (2.0) (2.3) Impairment charge (26.0) - - (26.0) Disposals - 0.3 1.2 1.5 Exchange adjustments 0.1 0.1 - 0.2 At 30 September 2014 (244.7) (15.1) (11.9) (271.7) Charge for the year - (0.1) (2.2) (2.3) Disposals - 3.1 2.7 5.8 Exchange adjustments (1.9) (0.3) (0.5) (2.7) At 30 September 2015 (246.6) (12.4) (11.9) (270.9)

Net book value at 30 September 2015 40.9 - 2.9 43.8 Net book value at 30 September 2014 40.9 0.1 3.4 44.4 Net book value at 1 October 2013 86.3 0.4 3.1 89.8

Magazine and website related assets relate mainly to trademarks, advertising relationships and customer lists. These assets are amortised over their estimated economic lives, typically ranging between one and five years.

Any residual amount arising as a result of the purchase consideration being in excess of the value of identified magazine related assets is recorded as goodwill. Goodwill is not amortised under IFRS, but is subject to impairment testing either annually or on the occurrence of some triggering event. Goodwill is recorded and tested for impairment on a territory by territory basis.

Other intangibles relate to capitalised software costs and website development costs.

Amortisation is included within administration expenses in the consolidated income statement.

Impairment assessments for goodwill and other intangibles The goodwill balance at 30 September 2015 and 30 September 2014 relates to the UK.

The basis for calculating recoverable amounts is described in the accounting policies.

Trends in the economic and financial environment, competition and regulatory authorities’ decisions, or changes in competitor behaviour in response to the economic environment may affect the estimate of recoverable amounts, as will unforeseen changes in the political, economic or legal systems of some countries. Financial Statements

66 US £m

2014 flow

(27.2) 2.0% 159.1 131.9

11.7% 15.0% was Holdings

cash

Value in use Value rate

Rho

0.4% to 23.3% Five year plans in

restructuring

- Discounted £m discount

2015 131.9 131.9 investment Group’s

pre-tax

the

which

Company’s

in UK UK

flow flow years. the

2.0% 9.0% 2.0%

11.3% 10.4% 13.3% required

five

cash cash

review, Value in use Value Value in use Value

5.2% to 12.4% 7.8% to 17.4% environment Five year plans Five year plans

this

would

the

Discounted Discounted over trading

Following

and

lower impairment

17%

climate

below:

than investments.

out

£8.0m.

set by

more economic

are

value

were Company’s

the

flows of

amounts challenging

carrying

cash

the

patterns,

valuations

recoverable

forecast

their if

exceeded

trading

the

estimated

reviewed higher

business

points considered

influence

the

Directors

that the basis

use

Directors 200 in

2014,

The

than

value

assumptions

T more U September

EBITDA margins assumed margins EBITDA Post-tax discount rate Pre-tax discount rate Growth rate to perpetuity Basis of recoverable amount Source used At 1 October Provision for impairment At 30 September Company Shares in Group undertakings EBITDA margins assumed EBITDA Post-tax discount rate Pre-tax discount rate Growth rate to perpetuity Basis of recoverable amount Source used AnnualReport and Accounts 2015 In Limited was written down to a carrying value of £130.9m resulting in an impairment charge of £27.2m. The Directors believe that the carrying value of the investments are supported by their underlying assets, taking into account the amounts owed by theThe Directors believe that the carrying value of the investments are supported by their underlying Company to Group undertakings (see note 20). In assessing this carrying value the same assumptions as referred to in note 13 have been used. 14. Investments14. in Group undertakings segments. at 31 March 2014. activities were taking place to be indicators of impairment, and therefore tested for impairment value of the UK segment and £3.4m being taken against theThe impairment test resulted in an impairment charge of £22.6m being taken against the carrying operations and £9.2m in respect of discontinued operations). carrying value of the US segment at 31 March 2014 (comprising £16.8m in respect of continuing Goodwill is not considered to be impaired at 30 September 2015. Goodwill is not considered to be impaired at 30 Impairment US to be an indication of impairment in respect of the carrying amount of goodwill of the UK and At 31 March 2014, the Directors considered there (i)K he At 30 September 2014 13. Intangible assets (continued) assets Intangible 13. Other At 30 September 2015 Sensitivity of recoverable amounts recoverable of Sensitivity At 30 September the analysis 2015 of the recoverable amounts gave rise to the following assessments of sensitivity: 67 Future plc

Financial statements

15. Deferred tax assets and liabilities

The following are the major deferred tax assets and liabilities recognised by the Group, and the movements thereon, during the current and prior years.

Intangible Share-based Depreciation vs assets payments tax allowances Tax losses Total £m £m £m £m £m At 1 October 2013 (1.2) 0.1 0.3 - (0.8) Credited/(charged) to income statement 0.1 (0.1) 0.1 0.1 0.2 – Continuing operations Credited to income statement 0.4 - - - 0.4 – Discontinued operations At 30 September 2014 and 30 September 2015 (0.7) - 0.4 0.1 (0.2)

Certain deferred tax assets and liabilities have been offset against each other where they relate to the same jurisdiction. The following is the analysis of deferred tax balances after offset for balance sheet purposes:

2015 2014 £m £m Deferred tax assets 0.5 0.5 Deferred tax liabilities (0.7) (0.7) Net deferred tax liability (0.2) (0.2)

The deferred tax asset of £0.5m (2014: £0.5m) is disclosed as a non-current asset of which the assets due within one year total £0.1m (2014: £0.2m). The deferred tax liability of £0.7m (2014: £0.7m) is disclosed as a non-current liability of which the liabilities due within one year total £nil (2014: £nil).

As at 30 September 2015 the Group has: • unprovided deferred tax assets on tax losses totalling £16.1m (2014: £11.2m) of which £15.0m (2014: £10.7m) arose in the US; and • unprovided deferred tax assets on other temporary differences totalling £1.1m (2014: £2.1m) of which £1.1m (2014: £2.1m) arose in the US.

Deferred tax assets have been recognised in respect of tax losses and other temporary differences where it is probable that these assets will be recovered.

No deferred tax is recognised on the unremitted earnings of overseas subsidiaries as any remitted earnings would not give rise to a tax liability in the foreseeable future.

The Company has no unprovided deferred tax assets or liabilities at 30 September 2015 (2014: £nil).

Changes to the UK corporation tax rates were announced in the Chancellor’s Budget on 8 July 2015. These include reductions to the main rate to reduce the rate to 19% from 1 April 2017 and to 18% from 1 April 2020.

As the changes had not been substantively enacted at the balance sheet date their effects are not included in these financial statements.

16. Inventories

2015 2014 £m £m Raw materials 0.1 0.2 Work in progress 0.3 0.4 Finished goods 0.1 - Total 0.5 0.6

The cost of raw material inventories recognised as an expense and included within cost of sales amounted to £3.5m (2014: £4.4m). Annual Report and Accounts 2015 68

17. Trade and other receivables

Group Company Group Company 2015 2015 2014 2014 £m £m £m £m Current assets: Trade receivables 11.3 - 8.3 - Provisions for impairment of trade receivables (0.6) - (1.1) - Trade receivables net 10.7 - 7.2 - Amounts owed by Group undertakings - 46.7 - 43.6 Other receivables 0.5 - 0.5 - Prepayments and accrued income 4.0 - 4.7 0.4 15.2 46.7 12.4 44.0 Non-current assets: Other receivables 0.1 - 0.4 - Total 15.3 46.7 12.8 44.0

The Directors consider that the carrying amount of trade and other receivables approximates their fair value.

Receivable balances from the two main magazine distributors, one in the UK segment and one in the US segment, represented 14% (2014: 13%) of the Group’s trade receivables balance at 30 September 2015.

The Group has provided for estimated irrecoverable amounts in accordance with its accounting policy described on page 52 of these financial statements.

Credit checks are obtained and, if applicable, guarantees put in place before a new customer is accepted and terms and credit limits are agreed. Bookings are not taken before these factors have been fulfilled. In addition, annual credit checks are carried out and fully documented. Final decisions on credit terms are made by an appropriate senior manager within advertising or finance. In the event of a request to increase a customer’s credit limit the following factors will be considered: trading history to date, review of credit status and review of the reason for the increase.

Included within the Group’s trade receivables balance are receivables with a carrying amount of £2.9m (2014: £2.7m) which are past due at the reporting date but for which the Group has not provided as there has not been a significant change in credit quality and the Group believes that the amounts are still recoverable. These relate to advertising and licensing debtors in the UK and US. The Group does not hold any security over these balances. A breakdown of the ageing is set out below:

Group Group 2015 2014 Past due £m £m 0-30 days 0.7 1.5 31-60 days 0.5 0.7 61-90 days 0.5 0.4 91+ days 1.2 0.1 Total 2.9 2.7

As at 30 September 2015, trade receivables of £0.6m (2014: £1.1m) were impaired and provided for. The individually impaired receivables mainly relate to advertising and licensing customers. It is assessed that a portion of the receivables is expected to be recovered.

The movement in the Group provision for trade receivables during the year is as follows:

Group Group 2015 2014 £m £m At 1 October 1.1 0.2 Financial Statements Provision for receivables impaired (0.1) 1.2 Receivables written off during the year (0.4) (0.3) At 30 September 0.6 1.1

The creation and release of provisions for impaired receivables have been included in administration expenses in the income statement with the exception of a credit of £0.4m in 2015 and a charge of £0.9m in 2014 relating to a distributor that filed for bankruptcy which were included within exceptional items, as described in note 5. Amounts charged to the provision are written off when there is no realistic expectation of recovering additional cash.

The other asset classes within trade and other receivables do not contain impaired assets. 69 Future plc

Financial statements

17. Trade and other receivables (continued)

The maximum exposure to credit risk at the reporting date is the carrying value of each class of receivable mentioned above. The Group does not hold any collateral as security for trade receivables.

All the Company’s receivables are with Group undertakings, with the exception of £nil (2014: £0.4m) relating to prepaid bank arrangement fees, and no additional disclosure in relation to credit risk is required. Interest on £0.3m (2014: £0.3m) of the amounts owed by Group undertakings has been charged at three-month LIBOR + 3.1%. The balance of amounts owed by Group undertakings is interest-free without any terms for repayment.

18. Cash and cash equivalents

Group Company Group Company 2015 2015 2014 2014 £m £m £m £m Cash at bank and in hand 2.5 - 7.5 - Cash and cash equivalents (excluding bank overdraft) 2.5 - 7.5 -

Cash and cash equivalents include the following for the purposes of the cash flow statements:

Group Company Group Company 2015 2015 2014 2014 £m £m £m £m Cash at bank and in hand 2.5 - 7.5 - Bank overdraft (note 21) (0.9) (8.8) - (8.6) Cash and cash equivalents 1.6 (8.8) 7.5 (8.6)

The Group has a number of authorised counterparties with whom cash balances are held in the countries in which the Group operates. Credit risk is minimised by considering the credit standing of all potential bankers before selecting them by the use of external credit ratings. 98% of the Group’s cash is held at counterparties with a minimum S+P credit rating of A-.

19. Non-current assets held for sale

As a result of the Group’s decision to sell one of its properties in the UK, the property’s net book value of £0.8m was presented as held for sale in the consolidated balance sheet at 30 September 2014.

The Group completed the sale of the property for £1.2m on 10 November 2014, realising a profit on disposal of £0.3m after costs.

20. Trade and other payables

Group Company Group Company 2015 2015 2014 2014 £m £m £m £m Trade payables 6.8 - 9.3 - Amounts owed to Group undertakings - 124.0 - 123.1 Other taxation and social security 0.7 - 0.9 - Other payables 1.2 - 1.7 - Accruals and deferred income 12.0 - 14.0 0.1 Total 20.7 124.0 25.9 123.2

Trade payables and accruals principally comprise amounts outstanding for trade purchases and ongoing costs. The Group has financial risk management policies in place to ensure all payables are paid within the agreed credit terms.

The Directors consider that the carrying amount of trade payables approximates to their fair value.

Amounts owed to Group undertakings are unsecured and interest-free without any terms for repayment. Financial Statements 70 - - - - -

£m £m 2014 2014 in

out Company Company

Covenant set

< 2.00 times > 4.00 times is

- - - - - £m £m 2014 2014 year-end Group Group

the

position

£m £m 4.3 4.3 0.9 3.4 4.3 2015 2015 0.45 23.04 Company Company covenant

the

30 September 2015 September 30 and

£m £m 0.9 4.3 4.3 3.4 4.3 2015 2015 Periods from 31 March 2016 onwards – more than 4.50 times Periods from 31 March 2016 onwards – more than Group Group Periods from 31 December 2016 onwards – less than 1.75 times Periods from 31 December 2016 onwards – less months

Periods from 30 June 2015 to 30 September 2016 – less than 2.00 times Periods from 30 June 2015 to 30 September 2016 Periods from 30 June 2015 to 31 December 2015 – more than 4.00 times Periods from 30 June 2015 to 31 December 2015 - -

preceding 2014

the

for

30 September Interest rate at rate Interest figures

2015 3.0% 3.0% rolling

30 September 30 Interest rate at Interest rate basis

the

quarterly

tested

EBITDA(E) are

EBITDA(E)/Interest

debt/Bank

covenants

Sterling revolving loan Bank overdraft Net debt/Bank EBITDAE Bank EBITDAE/Interest Net Bank Within one year Total Total The Company also has a non-interest-bearing £8.6m) overdraft which (2014: forms of £7.9m part of the Group cash pooling account and can be offset companies.against cash Group balances other in The Group has an additional covenant in respect of capital expenditure which was met at 30 September 2015. The table: following the In May 2015, theIn May 2015, Group negotiated a new multicurrency revolving and overdraft facility to replace its existing facility which was dueThe to expire total in facility December available 2015. to the Group at 30 September amounts 2015 to £5.5m and this can be drawn in sterling, US Dollars or Euros. The term runs December until31 with options 2017 to increase the facility by £2.0m and to extend it December to 31 The Group 2019. has granted security to the banks and theavailability of the facility is subject to certain covenants. Fees relating to the new facility amounted to £0.2m and these are being amortisedover the initial term of the facility. The bank borrowingsguaranteed and by Future interest plc, Future are Holdings 2002 Limited, Future Publishing Limited, Future US, Inc, Future Publishing (Overseas) Limited, Future Limited. IP Limited FutureFolio and Interest payable under the current credit facility is calculated as the cost of one-month LIBOR (currently approximately plus 0.5%) 2.00% an interest and 2.50%, margin of between dependent on the level of Bank EBITDAE. The covenants key are set out in the following table where net debt is exclusive of non-current tax and other payables and Bank EBITDA(E) is not materiallydifferent to statutory EBITDA(E) on a total Group basis. 21. Financial liabilities – loans, borrowings and overdrafts and borrowings loans, – liabilities Financial 21. Currentliabilities AnnualReport and Accounts 2015 The interest-bearing loans and overdraft are repayable as follows: 71 Future plc

Financial statements

22. Provisions

Property Group £m At 1 October 2014 2.8 Charged in the year 0.2 Utilised in the year (0.9) At 30 September 2015 2.1

The provision for property relates to dilapidations and obligations under short leasehold agreements on vacant property. The vacant property provision is expected to be utilised over the next five years.

Provisions for the Company were £nil (2014: £nil).

23. Other non-current liabilities

2015 2014 Group £m £m Other payables 0.8 1.2

Other payables consist mainly of deferred subscription revenue and deferred property lease liabilities.

24. Financial instruments

Financial instruments by category

The Group’s financial assets and financial liabilities are set out below:

Amortised cost 2015

Loans and Other Total carrying Total fair receivables liabilities value value Group Note £m £m £m £m Trade receivables net 17 10.7 - 10.7 10.7 Other receivables 2.4 - 2.4 2.4 Cash and cash equivalents 18 2.5 - 2.5 2.5 Total financial assets 15.6 - 15.6 15.6 Trade payables 20 - (6.8) (6.8) (6.8) Other liabilities - (10.5) (10.5) (10.5) Overdraft 21 - (0.9) (0.9) (0.9) Current borrowings 21 - (3.4) (3.4) (3.4) Total financial liabilities - (21.6) (21.6) (21.6)

Amortised cost 2014

Loans and Other Total carrying Total fair receivables liabilities value value Group Note £m £m £m £m Trade receivables net 17 7.2 - 7.2 7.2 Other receivables 2.1 - 2.1 2.1 Cash and cash equivalents 18 7.5 - 7.5 7.5 Total financial assets 16.8 - 16.8 16.8 Trade payables 20 - (9.3) (9.3) (9.3) Other liabilities - (9.5) (9.5) (9.5) Total financial liabilities - (18.8) (18.8) (18.8)

Total financial liabilities are shown net of unamortised costs which amounted to £0.1m (2014: £nil). Financial Statements

£m £m (8.8) (3.4) (8.6) 46.7 46.7 43.6 43.6 value value (136.2) (124.0) (131.8) (123.2) based

Total fair Total Total fair Total exists,

market

technique

2015 2014 £m £m flows. (8.8) (3.4) (8.6)

46.7 46.7 43.6 43.6 active value value

(136.2) (124.0) (131.8) (123.2) an

valuation cash

Total carrying Total Total carrying and

parties.

- - - - discounted £m

£m (8.8) (3.4) (8.6) Other Other estimation (136.2) (124.0) willing (131.8) (123.2)

liabilities liabilities

estimated

accepted

------£nil).

£m £m including 46.7 46.7 43.6 43.6 knowledgeable,

Amortised cost Amortised cost generally

(2014:

Loans and and Loans Loans and and Loans or receivables receivables

between

flow £0.1m

techniques

cash

17 20 21 21 17 20 21 Note Note valuation exchanged

of amounted

discounted use

could which

the

below:

by exist

costs out

not

set

instrument

does are

determined

unamortised

financial

market

of a

liabilities

net

active and

which

an instruments

for

If shown

assets

are

financial amount

applied.

is the financial

liabilities is

value

price

value

financial

market fair Company’s

market

Total financial liabilities Total Company Other receivables Overdrafts Current borrowings financial liabilities Total Other receivables financial assets Total Other liabilities Company Total financial assets Total Other liabilities Overdrafts AnnualReport and Accounts 2015 the on market conditions at the balance sheet date isused to calculate an estimated value. The Total The 24. Financial instruments (continued) The 73 Future plc

Financial statements

24. Financial instruments (continued)

Treasury overview The Group uses financial instruments to raise funding for its operations and to manage the financial risks arising from those operations. The agreements governing the principal instruments entered into were approved by the Board.

The principal financing and treasury exposures faced by the Group arise from foreign currencies, working capital management, the financing of capital expenditure and acquisitions, the management of interest rates on the Group’s debt, the investment of surplus cash and the management of the Group’s debt facilities. The Group manages all of these exposures with an objective of remaining within covenant ratios agreed with the Group’s banks, and the Group has been in compliance with its covenants during the year. These ratios are disclosed in note 21.

The capital structure of the Group is reviewed regularly by the Board to ensure that the debt/equity ratio of funding remains appropriate for the Group.

In order to maintain or adjust the capital structure, the Group may return capital to shareholders, issue new shares or sell assets to reduce debt.

Currency and interest rate profile The currency and interest rate profile of the Group’s financial assets and liabilities is shown below:

Financial assets Financial liabilities

Non- Non- Net financial Floating interest Floating Fixed interest (liabilities)/ rate bearing Total rate rate bearing Total assets £m £m £m £m £m £m £m £m At 30 September 2015 Currency: Sterling - 9.6 9.6 (4.3) - (13.4) (17.7) (8.1) US Dollar - 4.7 4.7 - - (3.5) (3.5) 1.2 Euro - 0.6 0.6 - - (0.1) (0.1) 0.5 Other - 0.7 0.7 - - (0.3) (0.3) 0.4 Total - 15.6 15.6 (4.3) - (17.3) (21.6) (6.0)

At 30 September 2014 Currency: Sterling - 9.8 9.8 - - (15.7) (15.7) (5.9) US Dollar - 4.5 4.5 - - (2.6) (2.6) 1.9 Euro - 0.4 0.4 - - (0.3) (0.3) 0.1 Other - 2.1 2.1 - - (0.2) (0.2) 1.9 Total - 16.8 16.8 - - (18.8) (18.8) (2.0)

Interest rate risk Details of the interest rates on borrowings as at 30 September 2015 are set out in note 21.

The Group’s overall policy on hedging interest rate risk is as follows: • To the extent that net debt is below £10m there is no requirement to hedge against interest rate fluctuations on the balance of the gross debt. • To the extent that net debt is above £10m a minimum of 25% of the balance of the gross debt greater than £10m should be hedged.

In applying the above policy, management takes full consideration of cash flow projections to fix the period for which any hedging arrangements are entered into.

For 2015, if interest rates on net borrowings had been on average 0.5% higher/lower with all other variables held constant, the post-tax loss for the year would have decreased/increased by £nil (2014: £nil).

There would be no impact on equity excluding retained earnings.

Foreign exchange risk Some of the Group’s activities are carried out in countries outside the United Kingdom where transactions are carried out in that country’s own functional currency. Movements in exchange rates can therefore have a significant impact on the Group’s total cash flows, whilst the translation of the results, assets and liabilities of foreign operations into sterling can have a significant effect on the Group’s reported profits and balance sheet. The main exposures are to movements in the US Dollar and Australian Dollar against sterling.

Financial Statements

74 of

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Financial statements

25. Issued share capital

2015 2014 £m £m

Authorised share capital 600,000,000 Ordinary shares of 1p each 6.0 6.0

2015 2014

Number of Number of shares £m shares £m Allotted, issued and fully paid (capital) Ordinary shares of 1p each At beginning of year 333,781,473 3.3 333,398,827 3.3 Share scheme exercises 653,725 - 382,646 - Share Incentive Plan matching shares 6,049 - - - At end of year 334,441,247 3.3 333,781,473 3.3

During the year 653,725 Ordinary shares with a nominal value of £6,537 were issued by the Company pursuant to share scheme exercises and a further 6,049 Ordinary shares were issued under the Share Incentive Plan for a total cash commitment of £nil, as detailed in note 26.

In 2014 382,646 Ordinary shares with a nominal value of £3,826 were issued by the Company for a total cash commitment of £7,078 pursuant to share scheme exercises as detailed in note 26.

26. Share-based payments

The income statement charge for the year for share-based payments was £0.1m (2014: £0.1m). This charge has been included within administration expenses.

These charges arise when employees are granted awards under the Group’s share option schemes, performance share plan (PSP), deferred annual bonus scheme (DABS) or Share Incentive Plan (SIP) and when employees are granted awards by the trustees of The Future Network plc 1999 Employee Benefit Trust (EBT). The charge equates to the fair value of the award and has been calculated using the Monte Carlo and Black- Scholes models, using the most appropriate model for each scheme. Assumptions have been made in these models for expected volatility, risk-free rates and dividend yields.

A reconciliation of movements in share options and other share incentive schemes is shown below:

2015 2015 2014 2014 Number of Weighted average Number of Weighted average options/awards exercise price options/awards exercise price Outstanding at the beginning of the year 12,885,930 £0.027 13,780,954 £0.055 Granted 12,293,441 £0.000 8,877,662 £0.037 Share awards exercised – new share issues (653,725) £0.000 (382,646) £0.018 Lapsed (8,343,432) £0.017 (9,390,040) £0.078 Outstanding at 30 September 16,182,214 £0.012 12,885,930 £0.027 Exercisable at 30 September 57,052 £0.000 44,294 £0.081

The weighted average share price at the date of exercise of share options and other share incentive awards during the year was £0.104 (2014: £0.145). Financial Statements ------76 2 1 3 3 3 2 1 2 3 1 3 1% 1% 2014 55% £0.077 £0.175 £0.130 13/12/13 Sharesave

- 3 3 3 1% 3% 5% ------PSP 3 1 2 1 1 2 2 3 2 56% contractual life in years in life contractual 2015 £0.084 £0.053 £0.078 £0.027 16/07/14 Weighted average remaining - 3 3 3 1% 1% 5% PSP 2014 55% ------£0.113 £0.175 £0.141 £0.169 16/12/13 2014 £0.027 £0.165 £0.140 £0.130 - - - - 3 3 3 1% 1% 55%

DABS £0.175 £0.169 ------16/12/13 possible. 2015

£0.012 £0.165 £0.140 £0.130

where

- - 3 3 3 Weighted average exercise price 1% 3% life, PSP

54% £0.106 £0.090 £0.106 £0.074 03/08/15 expected - - -

the

2014 to 1,043

- - 21,433 21,818 3 3 3 118,152 534,476 333,459 678,159 1% 4% PSP equal 1,135,366 1,377,233 4,008,769 2,156,022 2,500,000 2015

54% 12,885,930 £0.105 £0.090 £0.105 £0.075 18/05/15 period

- - over

2015 - - 3 3 3 Number of options/awardsNumber of 1,043 5,924 1% 6% 50,085 PSP 55% 159,869 102,093 691,958 805,833 678,159 averaged

2,500,000 6,336,415 1,046,979 1,647,834 2,156,022 £0.096 £0.109 £0.082 £0.109 16,182,214 04/02/15 volatility,

historical

Future’s

based

volatility

expected

notably total shareholder return, the Group has used a Monte Carlo model to determinegrants the fair which value. The have Black-Scholes market-based performance model has been used criteria; to value all the options Monte Carlo with model the exception has been used of 50% to of the value PSP these awards. T The

Total outstanding at 30 September Total December 2012 December 2013 November 2009 December 2010 January 2012 May 2015 August 2015 DABS December 2012 December 2013 July 2014 February 2015 December 2013 PSP January 2012 Sharesave Plan December 2010 December 2012 Fair value – EPS element TSR element Fair value – Dividend yield TSR correlation Fair value Option life (years) Expected life (years) Risk-free rate Exercise price period (years) Vesting Expected volatility Grant date Share price at grant date The fair value per share for grants made during the year and the assumptions used in the calculation are as follows: The fair value per share for grants made during AnnualReport and Accounts 2015 1. 2. he Group has used the Black-Scholes model to value instruments with non-market-based performance criteria such as earnings per share. For instruments with market-based performance criteria, Future plc operates one share option scheme being the Future plc Approved 2010 Sharesave Sharesave Plan (2010 Plan) and at 30 September 2015 options had been granted under this scheme. The 2010 Sharesave Plan (the Sharesave Plan) Under the Sharesave Plan the option entitlement granted to participating employees is linked to the monthly contributionsagreed which to pay into such the Sharesave employees Plan to have a maximum (up amount of £250 per month). The options granted under the Sharesave Plan vest on the third anniversary of the grant of such options. Where legal and regulatory constraints permit, the Company uses its discretionthe Sharesave to offer Plan at a discount options granted to the market under price in force at the date of the invitation being made. The Board exercised its discretion in November to issue 2013 invitations to participate in the Sharesave Plan to eligible employees inoption the UK. The price represented a 20% discount to the market price at the time of the invitation. Notes: 26. Share-based (continued) payments For options and other share incentive schemes outstanding at 30 September the weighted average exercise prices and remainingas follows: contractual lives are 77 Future plc

Financial statements

26. Share-based payments (continued)

Other share-based payments No further share options are to be granted. Instead, the Group has put into place a number of alternative share incentive schemes.

Performance Share Plan (PSP) The PSP is a share-based incentive scheme open to the executive Directors and certain other key senior managers, usually based on a percentage of the participant’s salary. Awards under this scheme are subject to stretching performance criteria measured against both earnings per share (EPS) and total shareholder return (TSR). Subject to the participant’s continued employment within the Group, awards will vest three years after the date of grant assuming that the following performance criteria are achieved:

Performance criteria in respect of awards granted prior to 4 February 2015

• A maximum of 50% of an award will vest if the Group’s growth in adjusted EPS is equal to RPI plus 8%, 0% will vest if the Group’s growth in adjusted EPS is equal to RPI plus 3%, and vesting will be on a pro rata straight-line basis between the two. If growth in the Group’s adjusted EPS is less than RPI plus 3%, none of that 50% of the award will vest.

• The remaining 50% of the award will vest if the Company’s TSR performance, compared to a group of similar companies, places it in the top quintile as against the comparator companies. If the Company’s TSR performance is median, 12.5% of the award will vest, and vesting will be on a pro rata straight-line basis between the two points. If the Company’s performance is below median, none of that 50% of the award will vest. The comparator group of companies is as disclosed on page 32 of this Annual Report.

Performance criteria in respect of awards granted since 4 February 2015

• A maximum of 50% of an award will vest if the Group’s adjusted EPS for the year ended 30 September 2017 (the last financial year of the performance period) is 1.4p, 12.5% will vest if the Group’s EPS is 1.0p, and vesting will be on a pro rata straight-line basis between the two. If the Group’s adjusted EPS is below 1.0p, none of that 50% of the award will vest.

• The remaining 50% of the award will vest if the Company’s TSR performance, compared to the constituents of the FTSE Small Cap Index (excluding investment trusts) on the date of grant, places it in the top quintile as against the comparator companies. If the Company’s TSR performance is median, 12.5% of the award will vest, and vesting will be on a pro rata straight-line basis between the two points. If the Company’s performance is below median, none of that 50% of the award will vest.

Grants were made under the PSP in December 2013, July 2014, February 2015, May 2015 and August 2015.

Deferred Annual Bonus Scheme (DABS) The DABS is a share-based incentive scheme open to senior management across the Group. The maximum value of any shares granted under the DABS to any one participant will be an additional amount which is equal to a fixed percentage of that eligible participant’s annual cash bonus actually received or payable for the previous financial year. The number of shares over which an award is to be granted to each participant will be calculated by reference to the market value of an Ordinary share in the Company on the date of the award. The shares awarded under the DABS will be issued or transferred to the participant three years after the date of the award, subject only to the employee remaining in the employment of the Group throughout the three-year period.

A grant was made under the DABS in December 2013.

Share Incentive Plan (SIP) In April 2015 the Group adopted a SIP which is open to all UK employees including the executive Directors. The scheme is a tax efficient incentive plan pursuant to which employees are eligible to acquire up to £150 (or 10% of salary, if less) worth of Ordinary shares in the Company per month or £1,800 per annum. Under the SIP employees are invited to subscribe for Partnership shares via salary deductions. If an employee agrees to buy Partnership shares the Company currently matches the number of Partnership shares bought with an award of Matching shares on the basis of one Matching share for every four Partnership shares. Matching share awards to date have been met by the issue of Ordinary shares to Yorkshire Building Society as Trustee of the SIP. Financial Statements

- - - 78 £m US £m £m

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Between one and five years After five years Total Within one year Net fair value losses At 30 September At 1 October At beginning and end of year At beginning and end of (b) There are no contingent liabilities expected to result in a material loss for the Group. liabilities ontingent (c) There were no material capital commitments as at 30 £nil). September (2014: 2015 apital commitments The rights. Future minimum sub-lease receipts expected under non-cancellable subleases at 30 September £2.4m). total (2014: 2015 £1.5m £3.4m) wasDuring recognised (2014: the £1.9m year, in the income statement in respect of operating lease rental payments and £1.5m) £0.2m (2014: was recognised in respect of sub-lease receipts. (a) Operating(a) lease commitments At 30 September the 2015, Group had the following total future lease payments under non-cancellable operating leases: 29. Commitments and contingent liabilities In employees. The section 401(K) plan allows employees to invest in 29 funds Rowe Price, run by T. but the employees, not the employer, have complete control over which funds they invest in, although they have no control over the stocks owned by the funds. During contributions £1.3m) the £0.8m year, (2014: were made to these plans and at 30 September the outstanding 2015 balance due to be paid over £0.1m). to the (2014: plans was £0.1m 28. Pensions The Dollars and Australian Dollars. These contracts had monthlymaturity dates and ended in August 2014. A to these contracts. reserve Merger The merger reserve arose £109.0m) following of £109.0m (2014: the 1999 Group reorganisation and is non-distributable. During the prior year the Group hedged its exposure to transactional foreign currency risk through forward foreign exchange contracts to sell US The 27. Other reserves Other 27. reserve Treasury The treasury reserve representsthe cost of shares in Future plc purchased in the market and heldby the EBT to satisfy awards made by the trustees. AnnualReport and Accounts 2015 The 1,426,848) 1,426,848 shares (2014: held by the EBT represent of the Company’s 0.4%) issued (2014: 0.4% share capital. The treasury reserve is non-distributable. Cash flow hedge reserve 79 Future plc

Financial statements

30. Related party transactions

The Group had no material transactions with related parties in 2015 or 2014 which might reasonably be expected to influence decisions made by users of these financial statements.

During the year, the Company had management charges payable of £0.2m (2014: £0.2m receivable) to subsidiary undertakings. The outstanding balance owed at 30 September 2015 was £0.2m (2014: £0.2m receivable).

31. Subsidiary undertakings

Details of the Company’s subsidiaries at 30 September 2015 are set out below. All subsidiaries are included in the consolidation. Shares of those companies marked with an * are indirectly owned by Future plc through an intermediate holding company.

Country of Nature of Company name incorporation business Holding % Class of shares A&S Publishing Company Limited* England and Wales Non-trading 100 £1 Ordinary shares Beach Magazines and Publishing England and Wales Non-trading 100 £1 Ordinary shares Limited* Future Holdings (2002) Limited England and Wales Holding 100 £1 Ordinary shares company Future IP Limited England and Wales Intellectual 100 £1 Ordinary shares property Future Network Limited* England and Wales Non-trading 100 £1 Ordinary shares Future Publishing Limited* England and Wales Publishing 100 £1 Ordinary shares Future Publishing (Overseas) Limited* England and Wales Publishing 100 £1 Ordinary shares Future Publishing Holdings Limited England and Wales Holding 87.5 1 pence Ordinary shares company Future US, Inc* USA (State of California) Publishing 100 Not applicable Future Verlag GmbH* Germany Non-trading 87.5 €1 Ordinary shares FutureFolio Limited* England and Wales Digital publishing 100 £1 Ordinary shares solutions FXM International Limited England and Wales Non-trading 100 £1 Ordinary shares Rho Holdings Limited Guernsey Investment 100 £1 Ordinary shares company Sarracenia Limited England and Wales Dormant 100 £1 Ordinary shares

32. Post balance sheet event

On 27 November 2015 the Group announced it had raised £3.3m by way of a placing of Ordinary shares in Future plc. Financial Statements

80 Meeting Notice of Annual General Annual

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t t T i requirements and exchange; stock nominal amount of£1,226,250 (such amount to be reduced by the nominal defined £2,452,500 of amount nominal aggregate nominal the by reduced be to amount (such amount of any relevant securities allotted below): paragraphunder 10.2 capital of the Company in proportion (as nearly as may be practicable) to their respective holdings of Ordinary shares in the capital of the Company; and required or as the Directors otherwise consider necessary, but subject to such exclusions or other arrangements as the Board may deem necessary or expedient in relation treasury fractional shares, entitlements, to record dates, legal or practical problems in or under the laws of any territory, or the authority, the Directors be and are unconditionally and generally hereby authorised in accordance with section 551 of exercise all the powers of the Company to allot shares in the Company and to grant rights to subscribe or to convert for, any security into, shares in the Company: rights i

your

office, 10.2 n any other case, up to an aggregate (a) (a) o holders of Ordinary shares in the (b) o 10. hat, in substitution for any existing 10.1 n connection with an offer byof way a

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Notice T T T T T T T T T Ladkin-Brand. 30 September 2015. Byng-Thorne. the remuneration of the auditors of the Company. Company of the next General Meeting at which accounts are laid before the Company. LLP, Chartered Accountants and LLP, Registered Auditors, as auditors of the Wolstenholme. implementation report as set out in pages 30 to 35 of the Annual Report of the Company statements of the Company for the financial and the reports of the Directors and the Report”). “Annual (the auditors

Wednesday

9. o authorise the Directors to determine 7. 8. o re-elect as aDirector Hugo Drayton. reappointo PricewaterhouseCoopers 6. o re-elect as aDirector Manjit 4. 5. o re-elect as aDirector Peter Allen. o re-elect as aDirector Zillah 3. o elect as aDirectorPenny 2.o Ordinary resolutions 1. o Ordinary Business This Notice is hereby given that the seventeenth Annual General Meeting of Future plc will be held on at 10:30am at which the following resolutions numbered will be proposed 1 to 11 as ordinary resolutions, and resolutions numbered and will 13 be 12 proposed as special resolutions. Notice of Annual General Meeting Notice of If you sold have or otherwise transferred all your shares inFuture plc, please forward this notice, together with the accompanying documents, as soon as possible either to thepurchaser or transferee, or to the person who arranged the sale or transfer so that they can pass these documents to the purchaser or transferee. If you are in any doubt as to what actionyou should take, you should consult your stockbroker, bank solicitor, manager, accountant or other independent adviser authorised under the Financial Services and Markets Act 2000. AnnualReport and Accounts 2015

General Meeting General Notice Notice Annual of 81 Future plc

Notice of Annual General Meeting

amount of any equity securities allotted (a) the allotment of equity securities in under paragraph 10.1 above in excess connection with an offer by way of a of £1,226,250), at any time or times rights issue, open offer or pre-emptive during the period beginning on the date offer to holders of Ordinary shares on the of the passing of this resolution and register of members of the Company on ending following the conclusion of the a date fixed by the Directors where the Company’s next Annual General Meeting equity securities to be allotted to existing or, if earlier, on 31 March 2017 (unless shareholders shall be in proportion (as previously revoked or varied by the nearly as may be) to their respective Company in General Meeting) save that holdings and, if the rights attaching to the Company may before expiry of this any other equity securities so provide, authority make an offer or agreement in favour of the holders of those equity which would or might require relevant securities in accordance with such rights, securities to be allotted after its expiry but subject to such exclusions or other and the Directors may allot relevant arrangements as the Directors consider securities pursuant to such an offer or necessary or expedient in connection agreement as if the authority hereby with Ordinary shares representing conferred had not expired. fractional entitlements or on account of either legal or practical problems arising 11. That, following the broader definitions in connection with the laws of any introduced by sections 363 to 365 of the territory, or of the requirements of any Act of the terms used in (i), (ii) and (iii) generally recognised regulatory body or below (which for the purposes of this stock exchange in any territory; and resolution have the meanings given by the Act), the Company and its subsidiaries (b) the allotment (otherwise than pursuant to at any time during the period for which sub-paragraph (a) above) of equity the resolution is effective be authorised securities up to an aggregate nominal together to: amount of £367,880 (representing just under 10% of the issued share capital of (i) make political donations to political the Company as at 15 December 2015) parties and/or independent election and such authority shall expire at the candidates not exceeding £50,000 in total; conclusion of the Company’s next Annual General Meeting or, if earlier, on 31 (ii) make political donations to political March 2017 (save that the Company may organisations other than political parties before the expiry of such authority make not exceeding £50,000 in total; and an offer or agreement which would or might require equity securities to be (iii) incur political expenditure not exceeding allotted after its expiry and the Directors £50,000 in total, during the period may allot equity securities pursuant to beginning with the date of the passing such an offer or agreement as if the of this resolution and ending following power hereby conferred had not expired). the conclusion of the Company’s next Annual General Meeting or, if earlier, on 13. That a general meeting, other than an 31 March 2017. Annual General Meeting, may be called on not less than 14 clear days’ notice. Special resolutions On behalf of the Board 12. That, subject to the passing of resolution 10, the Directors be and are hereby authorised pursuant to Article 3.2 and section 570 of the Act to allot equity securities (within the meaning of section 560 of the Act) for cash pursuant to the authority conferred upon it for the Penny Ladkin-Brand purposes of section 551 of the Act by Chief Financial Officer resolution 10 provided that such authority and Company Secretary shall be limited to: 15 December 2015 Financial Statements

and

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A T who is a person that has been nominated under section of the 146 Act to enjoy information does not have a right to appoint a proxy. a Nominated However, Person undermay, an agreement with the registered they whom shareholder by were have a right to be appointed to have (or someone else appointed) as a proxy for the meeting. Alternatively, if a Nominated Person does not have such a right, or does not wish to exercise it, they may have a right under any such agreement to give instructions to the Relevant Member as to the exercise of voting rights. A contact in terms of their investment in the Company remains the Relevant Member (or, custodian or broker) and the Nominated Person should continue to contact them (and not the Company) regarding any Nominated their interest in the Company (including any administrativematters). The only exception to this is where the Company expressly Nominated Person. 41 Regulations members on the register ofthe Company as at 6pm on Monday 1 February 2016 if thisor, meetingis adjourned, in the register of members 48 hours before the time of any adjourned meeting, shall be entitled to attend and vote at the meeting in respect of the number of shares registered in their name at that time. Changes to entries on the Register after 6pm on Monday 1 February if this or, 2016 meeting is adjourned, in the register of members 48 hours before the time of any adjourned meeting, shall be disregarded in determining the rights of any person to attend or vote at the meeting.

8. 8. ny person to whom this notice is sent Eligible shareholders 7. he Company, pursuant to Regulation Indirect investors

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received

Company’s

London, London, Bath, B i 1 P 1 W Q T A A Y the of appointment for the non-executive Directors will be available for inspection during usual business hours on any weekday (Saturdays, Sundays and public holidays London 2015 (being2015 the last business day prior to the publication of this notice) the Company’s Ordinary shares of one of 367,887,141 penny each. Each Ordinary share carries one vote. There are no shares held in treasury. The total number of voting rights in the Company is therefore 367,887,141. proxy form, you may appointa proxy electronically by visiting the following website: Shareholder the Reference Number, ww.investorcentre.co.uk/eproxy. Number and (SRN) PIN as printed on your proxy form and to agree to certain terms and conditions. be effective, To electronic appointments must have been Registrars not later than 10:30am on Monday 1 February 2016.

A1 1UA ncluding on the day of the meeting from completion. its until 0:15am 6. rinted copies of the service contracts of Praed Mews, -10 2 1QY and uay House, he Ambury, Number of shares in issue 5. s at the close of business December on 15 Documents available for inspection Electronic appointment of proxies Electronic appointment 4. s an alternative to completing the printed ou will be asked to enter the Control

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February being 2016 two business days before the time appointed for the holding of the meeting. If you submit more than one appointment the appointment, proxy valid received last before the latest time for the receipt of proxies will take precedence. The Pavilions, Bridgwater Road, Bristol BS99 6ZY received at the meeting may appoint one or more proxies to attend, speak and vote in their place. A member may appoint more than one proxy provided that each proxy is appointed to exercise the rights attached to a different share or shares held by that shareholder. If you appoint multiple proxies for a number of shares in excess of your holding, the proxy appointments may be treated as invalid. A proxy need not be a member of the Company. A proxy card is enclosed. be effective, To proxy cards should be completed in accordance with these notes and the notes to the proxy form, signed and returned so as to be Mews, time for registration. Appointment of a proxy does not preclude a member from attending the meeting and voting in person. If member a has appointed a proxy and attends the meeting in person, automatically will appointment proxy the be terminated. person, please bring the attendance card attached to your form of proxy and arrive at including of thesection Act, is available 311A from: www.futureplc.com/investors.

AnnualReport and Accounts 2015 ot later than 10:30am on Monday 1 omputershare Investor Services PLC, 3. ny member entitled to attend and vote Appointment of proxies 2. 2. f you wish to attend the meetingin Attendance at the AGM Attendance at the 1. nformation regarding the meeting, Further information about the AGM about the Further information Notes 83 Future plc

Notice of Annual General Meeting

Appointment of proxies in relation to the input of CREST Proxy Computershare Investor Services PLC, through CREST Instructions. It is the responsibility of the The Pavilions, Bridgwater Road, CREST member concerned to take (or, if Bristol BS99 6ZY. 9. CREST members who wish to appoint the CREST member is a CREST personal a proxy or proxies through the CREST member or sponsored member or has Note that the deadlines for receipt of proxy electronic proxy appointment service appointed a voting service provider(s), to appointments (see above) also apply in relation may do so for the meeting and any procure that his CREST sponsor or voting to revocations; any revocation received after adjournment(s) thereof by using the service provider(s) take(s)) such action the relevant deadline will be disregarded. procedures described in the CREST as shall be necessary to ensure that a Manual. CREST personal members or other message is transmitted by means of the CREST sponsored members, and those CREST system by any particular time. In Corporate members CREST members who have appointed a this connection, CREST members and, voting service provider(s), should refer to where applicable, their CREST sponsors 12. In the case of a member which is a their CREST sponsor or voting service or voting service providers are referred, in company, any proxy form, amendment provider(s), who will be able to take the particular, to those sections of the CREST or revocation must be executed under its appropriate action on their behalf. Manual concerning practical limitations of common seal or signed on its behalf by the CREST system and timings. an officer of the company or an attorney In order for a proxy appointment or for the company. Any power of attorney instruction made using the CREST service The Company may treat as invalid or any other authority under which to be valid, the appropriate CREST a CREST Proxy Instruction in the the documents are signed (or a duly message (a ‘CREST Proxy Instruction’) circumstances set out in Regulation certified copy of such power of authority) must be properly authenticated in 35(5)(a) of the Uncertificated Securities must be included. A corporate member accordance with Euroclear UK & Ireland Regulations 2001. can appoint one or more corporate Limited’s specifications and must representatives who may exercise, on contain the information required for such its behalf, all its powers as a member instructions, as described in the CREST Amending a proxy provided that no more than one corporate Manual. The message, regardless of representative exercises powers over whether it constitutes the appointment of a 10. To change a proxy instruction, a member the same share. Members considering proxy or an amendment to the instruction needs to submit a new proxy appointment the appointment of a corporate given to a previously appointed proxy using the methods set out above. Note representative should check their own must, in order to be valid, be transmitted that the deadlines for receipt of proxy legal position, the Company’s articles of so as to be received by the issuer’s agent appointments (see above) also apply association and the relevant provision of (ID 3RA50) by 10:30am on Monday in relation to amended instructions; the Companies Act 2006. 1 February 2016 or, if the meeting is any amended proxy appointment adjourned, not less than 48 hours before received after the relevant deadline the time fixed for the adjourned meeting. will be disregarded. Where a member Joint holders For this purpose, the time of receipt will has appointed a proxy using the paper be taken to be the time (as determined proxy form and would like to change the 13. W here more than one of the joint holders by the timestamp applied to the message instructions using another such form, that purports to vote or appoint a proxy, only by the CREST Applications Host) from member should contact the Registrars on the vote or appointment submitted by the which the issuer’s agent is able to retrieve +44 (0)870 707 1443. member whose name appears first on the the message by enquiry to CREST in the register will be accepted. manner prescribed by CREST. After this If more than one valid proxy appointment time any change of instructions to proxies is submitted, the appointment received appointed through CREST should be last before the deadline for the receipt of Questions at the AGM communicated to the appointee through proxies will take precedence. other means. 14. Under section 319A of the Act, the Company must answer any question you CREST members and, where applicable, Revoking a proxy ask relating to the business being dealt their CREST sponsors or voting service with at the meeting unless: providers should note that Euroclear UK 11. In order to revoke a proxy instruction, a & Ireland Limited does not make available signed letter clearly stating a member’s (a) answering the question would interfere special procedures in CREST for any intention to revoke a proxy appointment unduly with the preparation for the meeting particular messages. Normal system must be sent by post or by hand to the or involve the disclosure of confidential timings and limitations will therefore apply Company’s Registrars: information; Financial Statements

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s Co F Q T B o m i s b P m i m m i s Secretary; and Secretary; form, the email. may not use You this electronic address to communicate with the Company for any other purpose. supporting sent by another member, clearly identifying the being supported; accompanied by a statement setting out the persons making it; and than six weeks before the date of the AGM; form, and address; of business of which notice is to be given by either setting it out in full if or,

(ii) ent either: by post to Secretary, mpany uture plc, uay House, he Ambury, 1UA; ath BA1 r by fax to +44(0)1225 732266 arked for the attention of the Company (e) n (i) (ii) tate your full name and address; and e sent to [email protected]. lease (ii) ust identify the resolution or the matter (iii) n the case of aresolution, must be (iv) ust be authenticated by the person or (v) ust be received by the Company not later (d) n (i) igned by you and state your full name and

time

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m a T a t m I a m i t m s electronic form; full or, if supporting a statement sent supporting if sent statement a or, full identify the clearly member, another by statement which is being supported; and one week before the AGM. Company’s the statement is made available on the Company’s the business of the AGM. form and must be authenticated by the person or persons making it (see note below); and (e) 19(d) at the AGM and holding, on average, at least of £100 paid up share capital. be ineffective (whether by reason of inconsistency withany enactment or the Company’s not be defamatory of any person, frivolous or vexatious; rights set above out in notes the to 17 15 relevant vote at the AGM and holding at least of 5% total voting rights of the Company; or

the

(c) (i) beay in hard copy form or in (b) (b) t least 100members having aright to vote Conditions 19. (a) that: conditionshe are ny resolution must not, if passed, (b) he resolution or matter of business must (f) ust be received by the Company at least qualification criteria Members’ 18. n (a) ember or members having aright to (b) (b) t must forward the statement to the (c) he statement may be dealt with as part of The (d) equest: beay in hard copy form or in electronic (e) hould either set out the statement in

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i W P U U i t request the such a statement on its website: audit the audit) that are to be laid before the AGM. Act, members set out at below, note the 18 Company must publish on its website a statement setting out any matter that such members propose to raise at the AGM relating to the criteria set out at below, note may, 18 subject to the conditions set out at note 19, business to be dealt with at the AGM a matter (other than a proposed resolution) which may properly be included in the business matter (a of business). or set out subject at below, note may, 18 to conditions Company to give to members notice of a resolution which may properly be moved and is intended to be moved at that meeting. members Company or the good order of the meeting that a website in the form of an answer to a question;

(a) t here audit concerns Website publication of any Website 17. ursuant to Chapter 5of Part of the 16 business dealt with at the AGM business dealt with at the 16. nder section 338A of the Act, amember Members’ right to have a matter of Members’ Members’ right to require circulation of right to require Members’ AGM at the a resolution to be proposed 15. nder section 338 of the Act, amember or (c) (c) t is undesirable in the interests of the (b) (b) heanswer has already been given on AnnualReport and Accounts 2015 85 Future plc

Investor information Investor information For enquiries of a general nature regarding the Company and for investor relations enquiries please contact Penny Ladkin- Brand at the Company’s Registered Office, or visit www.futureplc.com and select the investor relations section.

Registrar and transfer office

The Company’s share register is maintained by:

Computershare Investor Services PLC The Pavilions Bridgwater Road Bristol BS13 8AE Tel: +44 (0)870 707 1443

Shareholders should contact the Registrar, Computershare, in connection with changes of address, lost share certificates, transfers of shares and bank mandate forms to enable automated payment of dividends.

Online information – www.investorcentre.co.uk

Our Registrar, Computershare, has a service to provide shareholders with online internet access to details of their shareholdings.

The service is free, secure and easy to use. To register for the service, go to www.investorcentre.co.uk.

Unsolicited mail

The share register is by law a public document. To limit the receipt of mail from other organisations, please register with the Mailing Preference Service, by visiting www.mpsonline.org.uk/mpsr/.

Warning to shareholders – ‘boiler room’ scams

In recent years, many companies have become aware that their shareholders have received unsolicited phone calls or correspondence concerning investment matters. These are typically from overseas-based ‘brokers’ who target UK shareholders, offering to sell them what often turn out to be worthless or high-risk shares in US or UK investments. These operations are commonly known as ‘boiler rooms’. These ‘brokers’ can be very persistent and extremely persuasive.

It is not just the novice investor that has been duped in this way; many of the victims had been successfully investing for several years. Shareholders are advised to be very wary of any unsolicited advice, offers to buy shares at a discount or offers of free company reports. If you receive any unsolicited investment advice: i • Make sure you get the correct name of the person and organisation • Check that they are properly authorised by the FCA before getting involved by visiting www.fca.org.uk/register

Registered office • Report the matter to the FCA either by calling 0800 111 6768 or by completing the fraud reporting form on the FCA website at: www.fca.org.uk/consumers/scams/investment- Future plc scams/share-fraud-and-boiler-room-scams/reporting-form Quay House The Ambury • If the calls persist, hang up. Bath BA1 1UA If you deal with an unauthorised firm, you will not be eligible to receive payment under the Tel +44 (0)1225 442244 Financial Services Compensation Scheme.

www.futureplc.com/investors Details of any share dealing facilities that the Company endorses will be included in company mailings.

More detailed information on this or similar activity can be found at www.moneyadviceservice.org.uk. Financial Statements 86

Financial calendar Announcement of annual results 27 November 2015 General MeetingAnnual 3 February 2016 end Half-year March31 2016 Announcement of interim results May 2016 year-endFinancial 30 September 2016

Square

Place

E Square

Paternoster

Triton

Regent’s London NW1 3AN Solicitors Osborne Clarke LLP East Back Temple 2 Quay Temple Bristol BS1 6EG Registrar ServicesComputershare Investor PLC Pavilions The Bridgwater Road Bristol 8AE S13 Advisers Independent auditors LLP PricewaterhouseCoopers Chartered accountants and statutory auditors 2 Glass Wharf Bristol BS2 0FR Broker Numis Securities Ltd 10 London Principal bankers Santander UK PLC C4M 7LT 2

Officer

Financial

AnnualReport and Accounts 2015 London +44Tel (0)20 7042 4000 www.futureplc.com 2 1QY Company registration number 3757874 Wales and England Registeredin Offices Registered office Future plc Quay House Ambury The 1UA Bath BA1 442244 +44Tel (0)1225 London Office Praed Mews 1-10 Chief Secretary Company and Wolstenholme Manjit independentSenior Director non-executive DraytonHugo Independent non-executive Director Mark Wood Director Non-executive Zillah Byng-Thorne Zillah Chief Executive Ladkin-BrandPenny Peter Allen Chairman Directors Directors and advisers and Directors Contacts Future plc and London office Future Publishing Ltd 1-10 Praed Mews Registered office London W2 1QY Quay House The Ambury Tel +44 (0)20 7042 4000 Bath BA1 1UA

Tel +44 (0)1225 442244

Future US, Inc. Future Publishing 1 Lombard Street (Overseas) Ltd Suite 200 Suite 3, Level 10 San Francisco 100 Walker Street CA 94111 North Sydney USA NSW 2060 Australia Tel +1 650 238 2400 Tel +61 2 9955 2677