Trinity Mirror plc Annual Report & Accounts 2010 Our strategic goal is to build a growing multi-platform media business, by developing and sustaining strong positions across print and digital, with products and services which meet the needs of our customers, both readers and advertisers. * The adjusted results on pa on results adjusted * The and profit durin performance proved successful, very delivering astrong revenue business of scale. New ITs ourstrategicsupporting goal of building amultimedia have improved they remain underpressure due to the increasing to 16.2% from 13.8%. While revenue trends a to do thesamethin flexibility andis tradin deficit funding. Group The has significant financial challenging revenue environment andcontinued pension during theyear, withstrong cash generation despite the f T e v e O T e w the our clear andconsistent strategy and this has enabled 2010During we continued to focus of onthedelivery 2010 context in

the technology enables fundamental changesto the continues to rea processes and structures throughout theGroup, Our investment in themodernisation of business in these key geographies. Westthe North andtheSouth providing scale further signi to re-en across pr change in theway content is gathered andpublished to 44.6 pence to 44.6 A reconciliation between the adjusted results and the statutory results is provided in note 38 38 note in provided is results statutory the and results adjusted the between A reconciliation On a basis statutory revenue decreased from £763.3 million to £761.5 million, operatin o c o increased from £87.0 million to £138.0 million and earnin or any upturn in market conditions. han f intan n pa ia the implementation of thenew operating model, d xtends the ntire publishing process, achieving e conomic environment. he business is leaner andfitter and well he ith operating pro ur acquisition of vert g g es on derivative financial instruments and the impact of tax le tax of impact the and instruments financial derivative on es G e 99 g G f icantly lower cost base withoutdetriment to quality. ible assets, the retranslation of forei of retranslation the assets, ible roup to deliver astrong financial performance roup has further strenroup has further . s g i . ng an ineer how we publish across editorial, i nt an nt G d roup’s reach across print anddigital in d pre-press. g p es 1 to 17 exclude the impact of non-recurrin of impact the 17 1 to exclude es

di sustainable efficiencies while efficiencies sustainable f G it* up17.0% andoperating margin* g g i M ta g s with G well within its covenants. l . I Regional Media, in March, has mportant g Thi n currency borrowin f y ewer people. Instead, g g stems have enabled us thened its balance sheet s theyear. acquisition The h g as resu as s per share increased from 11.5 pence from increased share s per l y we are not try ff g iciencies at a at iciencies g s, the impact of fair value value fair of impact the s, islation chan l te p g d items, the amortisation amortisation the items, ositioned ositioned

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Financials Governance Business review Who we are Trinity Mirror plc 2 Annual Report & Accounts 2010 Group at a glance Trinity Mirror is one of the UK’s largest publishers. Our award winning Revenu e portfolio includes five national ; the , the , The £ 761.5m x0.2% People, the and the Sunday 2009: £763.3m Mail as well as over 160 regional titles including household names such as the O perating profit* Echo, Evening News, Mail, and £ 123.3m h17.0 % Newcastle Chronicle. 2009: £105.4m Our print titles are complemented by our digital portfolio of more than 500 digital O perating margin* products. These include companion websites, mobile sites and national platforms 16.2 % for recruitment and property advertising. 2009: 13.8% The Group is the largest contract printer of newspapers in the UK. We also own Pr ofit before tax* and manage national and regional events including the Daily Mirror Pride of Britain £ 101.5m h39.6% Awards and the Great Scot Awards as 2009: £72.7m well as a number of exhibitions which extend the reach and influence of our brands. E arnings per share* The Group employs over 6,500 people in around 60 locations across the UK, 2 8.6p h43.0% including nine print sites. The Group has two 2009: 20.0p trading divisions: Regionals and Nationals. Ne t debt^ £ 265.9m x17.9% 2009: £324.0m

* The adjusted results on pages 1 to 17 exclude the impact of non-recurring items, the amortisation of intangible assets, the retranslation of foreign currency borrowings, the impact of fair value changes on derivative financial instruments and the impact of tax legislation changes. A reconciliation between the adjusted results and the statutory results is provided in note 38 on page 99.

^ On a contracted basis assuming the private placement loan notes and related cross-currency interest rate swaps are not terminated prior to maturity. O R ( Operating profit* (including acquisitions) Revenue print anddi leadin businesses, events andexhibitions. Durin Our Nationals division publishes five national newspaper titles which are amon Nationals Our Re Regionals divisions Trading pro recovery andanimprovement in revenue trends in theyear. h x h h includin evenue peratin 6 9 3 4 f itability andmar itability . . . 4 0 3 5 g g media brands complemented by astron g . acquisitions ionals division publishes avibrant anddiverse of market portfolio leadin 0 g % % % £ £m profit* m g % ital media across theUK.2010 saw areturn to profit 35.9 302.9 83.6 460.4 2009 2009 2009 2009 £ £ m m ) g ins . 86.1 430.3 51.7 331.2 2010 2010 2010 2010 (including acquisitions R ( Operating margin* Revenue O 1 2. 1. 3 2 3 includin . . . .

A A evenue O O C C peratin dv d i i t th r r h v c c e e e e u u g r r r r l l t t a a £ £ i i 2010 thebusiness demonstrated resilient s s t t 5 3 i i i i g o o 7. 5 n n n n . acquisitions g g 3 g 5 £m £ £ £ m £ £ m mar 73.2 2 m 128 2 44. 22.5 g , multi-plat . m 2 8 m m m g in* 11.9 18.2 2009 2009 2 % % ) ) 2 f 3 3 orm port orm 15.6 20.0 2010 2010 g rowth, with stron with rowth, f olio o 1 1 f di A Trinity Mirror plc Mirror Trinity nnua g g ital l g theUK’s

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Financials Governance Business review Who we are Trinity Mirror plc 4 Annual Report & Accounts 2010 Regionals Our Regionals division publishes a vibrant and diverse portfolio of Revenue market leading brands across the 2009: £302.9m UK with more than 160 regional daily and weekly titles and over Operating profit* 500 digital products. £ 51.7m 2009: £35.9m A strong portfolio of regional daily and weekly titles reaches the length and breadth of the country and Operating margin* serves some of the UK’s biggest cities and metropolitan areas. We have a strong presence in the North West of England and North Wales, the 15.6 % 2009: 11.9% North East, the Midlands, South Wales, Scotland and the South of England. Number of titles In our key markets, our brands have a significant reach amongst the adult population reaching 58% on a weekly basis in Scotland, 73% in the North 160+ East, 86% in the North West, 70% in the Midlands, 71% in South Wales and 56% in the South. Websites We publish 13 paid-for daily newspapers across the UK which have a circulation of just under half a million copies. We have three of the UK’s top 10 regional 500+ evening newspapers with the , and Newcastle Chronicle. We publish over 70 paid-for weekly titles which includes three of the top 10 regional Sunday titles: in Newcastle, the in Birmingham and the Wales on Sunday. In addition we publish around 80 free weekly titles and six metro titles. Overall our regional newspapers have a weekly circulation figure of 6.4 million copies and readership of 7.7 million. Our digital portfolio complements our print titles and extends our reach across our markets. We publish a wide range of digital products including companion websites to our key newspaper titles, hyperlocal sites serving specific communities and local and national recruitment and property websites. In the recruitment category, we publish a network of specialist job sites, including leading brands such as GAAPweb, totallylegal, totallyfinancial, PlanetRecruit, SecsintheCity and The Career Engineer and generalist brands such as fish4. Our property websites include Smartnewhomes and email4property. Our websites attract 11.1 million unique users every month, up 17% year on year.

trinitymirror.com/our-portfolio/regionals

* The adjusted results on pages 1 to 17 exclude the impact of non-recurring items, the amortisation of intangible assets, the retranslation of foreign currency borrowings, the impact of fair value changes on derivative financial instruments and the impact of tax legislation changes. A reconciliation between the adjusted results and the statutory results is provided in note 38 on page 99.

A Trinit nnua y l

Mirror R e p ort ort & p

lc A ccounts 2010 5

Financials Governance Business review Who we are Trinity Mirror plc 6 Annual Report & Accounts 2010 Trinity Mirror plc Annual Report & Accounts 2010 7 Who we are

Regionals readership iew v e r ess 7.7 m n Busi Unique users 11.1 m per month e overnanc G cials n a n Fi Trinity Mirror plc 8 Annual Report & Accounts 2010 Nationals The Nationals division publishes the Daily Mirror, the Sunday Mirror Revenue and The People across the £ 430.3m 2009: £460.4m UK and the Daily Record and the predominantly Operating profit* in Scotland. £86.1m 2009: £83.6m Our national titles provide news and analysis readers can trust, delivered in a package that is easy to Operating margin* consume and popular with advertisers. From news and sport to politics and showbiz, our newspapers provide our readers with compelling value-for-money 20.0 % 2009: 18.2% content and campaigning journalism every day of the week. At the of our business lies our proud Number of titles journalistic heritage which provides the cornerstone for our multi-platform development as we take our brands, content and expertise across exciting 5 new media platforms. The strength of our newspapers is clear from the Websites significant paid-for circulation volumes of our titles and the mass audience reach they provide in a fragmenting media landscape. The Daily Mirror and 10 Daily Record achieved a joint circulation in excess of 1.5 million copies per day during 2010 with readership per issue of 3.9 million. Our national Sunday titles – the Sunday Mirror, The People and the Sunday Mail – achieved a joint circulation of 2.0 million copies per week in 2010 with readership per issue of 6.1 million. The Sunday Mail continues to be the biggest selling newspaper in Scotland, with a circulation which is nearly 100,000 copies larger than the next best-selling title. Our newspaper titles are complemented by a growing multi-platform digital businesses. Our digital portfolio comprises the established companion websites to our national titles and also standalone websites such as mirrorfootball.co.uk and 3am.co.uk and a range of mobile sites. Interactive services such as Mirror Bingo add to the rich consumer experience. The national websites attract 10.7 million unique users every month. We own and manage over 15 annual events and a number of exhibitions which extend the reach and influence of our brands into a range of commercial markets. Events include the Daily Mirror Pride of Britain Awards – the most watched award ceremony of its kind on British television – Great Scot Awards and the Scottish PLC Awards.

trinitymirror.com/our-portfolio/nationals

* The adjusted results on pages 1 to 17 exclude the impact of non-recurring items, the amortisation of intangible assets, the retranslation of foreign currency borrowings, the impact of fair value changes on derivative financial instruments and the impact of tax legislation changes. A reconciliation between the adjusted results and the statutory results is provided in note 38 on page 99.

A Trinit nnua y l

Mirror R e p ort ort & p

lc A ccounts 2010 9

Financials Governance Business review Who we are Trinity Mirror plc 10 Annual Report & Accounts 2010 Trinity Mirror plc Annual Report & Accounts 2010 11 Who we are

Nationals readership iew v e r ess 10.0 m n Busi Unique users 10.7 m per month e overnanc G cials n a n Fi Trinity Mirror plc 12 Annual Report & Accounts 2010

Acquisition of GMG Investment to grow core Regional Media print and digital revenues Highly successful acquisition of GMG Regional Investment in new initiatives presents Media, including Manchester Evening News, opportunities to drive diversified revenue and weekly titles and streams across multiple media channels. websites in the North West and South of England.

Strong financial Efficient operating model performance Investment in state-of-the-art IT systems Resilient portfolio of newspaper and digital has resulted in a step change to the entire brands, delivering strong operating profit* publishing process, achieving efficiencies growth of 17% in 2010, despite challenging without detriment to quality across multimedia revenue environment. platforms.

Contract printing Strong balance sheet Largest contract printer of newspapers in the Strong cash generation, low levels of debt and UK through leveraging our network of nine reduced pension obligations ensuring lower high quality, full colour, printing facilities across leverage and increased financial flexibility. the UK.

Investment in people Launch of Inspirational Leadership and Talent Development Programmes tailored to develop, support and enhance the capabilities of staff across the Group. cont c of trading in 2009 which contributed contributed which 2009 in of trading t of only of only consideration acash for completed was acquisition the as investment saw low low saw the revenues from from revenues the with net debt falling by per a G b £ T £ A of12.4decline ev G £ G the T £ The Chairman and Chief Executive statement tren businesses. Mana o The in pershare earnings increasing by 43.0%. profit andreduced interest costs resulted fell by fell performance ofperformance on revenues, demonstrates the resilience of our stron ofour resilience the demonstrates revenues, on grow h Chairman CBE Gibson Ian Sir cquisition of h 110.1 million paying after 761.5 million. Excluding the acquisition of f he he stron 25 million, ene strong operat rou by 6.9% to down were revenues roup from down marginally were revenues roup t e severe weat e severe 265.9 million. id a h ll G d ence o e G i eng nue p fi f s roup achieved revenues broadly in line with 2009. Importantly 2009. with line in broadly revenues achieved roup ormance ormance t pens £ y roup roup enabled continued investment in our business and the the and business our in investment continued enabled G G i £ ear. n 2010 64.7 million in the year including structural cost savings o i ng i 7.4 million. d G ng tra ng g roup remained highly cash generative financial strong a delivered roup to t to DP growth, high unemployment and continued pressure pressure continued and unemployment high growth, DP performance in afra in performance f g an £ i enerated cash flows from operatin from flows cash enerated on sc 5 million of ahead the target we set at the beginning b G igh % di h i y 17.0 M i mprovement h ng pro £ ave ng con experienced during 2009. The year-on-year revenue revenue year-on-year The 2009. during experienced t er con 50.9 million from l G y mana g h G Regional Media ement’s focus on maximisin emes. b M f een a or 2010 withoperating pro G fi di di t per % Regional Media did not require significant significant require not did Media Regional t t g i i £ ons, coup ons across t across ons Th e t . d 31.9 million to fund deficits in our defined f verse ormance was ac was ormance Th i h e strong e strong n revenue tren n revenue e cost e cost g e ile economic environment, which ly G £

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Financials Governance Business review Who we are Trinity Mirror plc 14 Annual Report & Accounts 2010

Chairman and Chief Executive statement

‘‘Revenues for the Regionals division increased by 9.3% reflecting the benefit of the acquisition of GMG Regional Media. ’’

Following an extensive consultation process the Group closed all its Regionals Division defined benefit pension schemes to future accrual on 31 March 2010. 2010 has proven to be another challenging year for the regional The much improved financial position provides the Group with newspaper industry against the backdrop of a difficult economic headroom for investment in growing our print and digital revenues. environment. However management’s continued focus on strong A number of investment initiatives have already commenced and portfolio management, the implementation of the new operating once fully implemented will present multiple opportunities to drive model, the acquisition of GMG Regional Media and the strong revenues. The investments already underway include: national advertising performance from our Metro titles has resulted in a substantial increase in operating profit and strong margin recovery. –A new customer relationship management system which will Operating profit increased by 44.0% from £35.9 million to £51.7 million provide opportunities to drive advertising revenues through better with operating margin increasing by 3.7 percentage points from customer data and insight. The new system will provide tools for 11.9% to 15.6%. more effective targeting of marketing initiatives and improve customer service. Key areas of focus will include increasing Revenues for the Regionals division increased by 9.3% reflecting the customer numbers, improving customer retention and increasing benefit of the acquisition of GMG Regional Media, partially offset by customer value; an underlying decline in revenues. We were encouraged by the continued improvement in revenue trends which saw underlying – Implementation of a new digital content management system revenues during the year fall by 7.5% representing a significant (dcms). This system will increase the functionality of our websites improvement compared to the 23.5% decline during 2009. In 2010 and enable the development of audience-growth initiatives. digital activities represented 9.8% of revenue and 18.2% of operating These include the integration of social media, an improvement in profit for the division. editorial speed around breaking news and the flexibility to manage the publication of our content on any device i.e. PC, mobile, The underlying revenue performance reflects the impact of the fragile smartphone or tablet. The dcms will be fully integrated with the economic environment with falling public sector spending, high levels recently implemented Contentwatch editorial production system of unemployment, a sluggish property market and low levels of and together with our contextual and behavioural targeting systems consumer confidence. Whilst the acute cyclical pressures have will drive new advertising revenue opportunities; and most adversely impacted our classified advertising categories of recruitment, property and motors, these categories now represent – Investment in our digital marketing services offering. The investment, a smaller proportion of our advertising revenues. in both staff and infrastructure, will enable the development of new digital products and services in order to widen the customer base For the Regionals division in 2010, recruitment, property and motors and increase revenues. Examples include website design and represented 34.2% of advertising revenues with 26.1% of these development, search engine optimisation, e-mail marketing and revenues being digital. The impact on the division from these social media. categories is much reduced and they are well placed to benefit from a combination of cyclical recovery and any structural changes when These investments will provide the appropriate platform for the market conditions improve. In recent months our national recruitment business to drive more diversified revenue streams across multiple websites have returned to growth. This improved performance media channels. Whilst these investments will, in the short term combined with our taking full control of fish4 is forecast to see digital increase operating costs during 2011, they support our strategic represent some 45% of recruitment advertising revenue in 2011. objective of building a multimedia business of scale to deliver significant value enhancement for shareholders. The investment for these initiatives will be funded within the £15 million per annum targeted capital expenditure, with incremental operating costs of some £5 million. of weekly titles and associated websites in the the in websites associated and titles of weekly anumber comprises Media S&B ofEngland. West North the in

MEN Media relocated to our freehold buildin freehold to our relocated Media MEN the Group’s position in the important important the in Group’sthe position Media and and Media MEN included acquisition The successful. 2010, highly proved has further scale in these key these in scale further operatin £ a 13 2010,On October Grou the fish4 S the covering website companion ‘Greaterbusiness magazine Ma b C ad a T T Media Regional GMG SmartNewHomes. Launched in 1999, o in fish4 Launched SmartNewHomes. Evenin tools such as Local Mole, our local business director business local our Mole, Local as such tools Group’s generating the with revenue them equipped and businesses November 2010. portfolio including portfolio previously controlled. fish4 sits alongside the brands in our digital in the ac in the ensure £5.7 million, achieving a margin of 11.2%. o one was fish4jobs homes. and cars jobs, for websites known best nd will boost digital recruitment revenues advertising by around nd extends the Group’s reach across print and digital providing f 3 million in the full first he acquisition has been fully inte fully been has he acquisition he acquisition of GMG Re us ince completion of the acquisition, the business has delivered strong delivered has business the acquisition, ofthe completion ince hadderton, t vert h i ness reta e UK’ i g s d i News and a number of weekly titles and associated websites websites associated and titles ofweekly anumber and News g t n q h results with revenues of £50.9 million and operatin g uired business saw MEN Media launch a new free weekl free anew launch Media MEN saw business uired s at se S fi rst mass-mar &B Media. MEN Media com Media MEN Media. &B b G i ns ac ns lf est pract serve pro serve reater Manchester, in G i AAPweb, totallylegal, totallylegal, AAPweb, t y centre y i ce ear ofcontrol. ear d g k uct. eo i g et recru s ional Media, completed on 28 on March completed Media, ional g p h p raphies. resence resence are nchester Business Week’ and took control of the 50% of fish4 not 50% offish4 ofthe control took G g d i rated into our Re into our rated reater Manchester area in tment we tment

b S g etween ex etween eptember 2010, though the eneralist recruitment market recruitment eneralist O i n p ur mana S M rises the Manchester Manchester the rises ecsinthe anc g b at our print plant in in plant print atour p s S erates one of the UK’s ofthe one erates i h tes. tes. outh of En i st ester. g i ement teams have teams ement n g C fi g y s ionals division ity and and ity an and ou and h I 4 strengt nvestment nvestment d acqu g land. g r profit of of profit i re h ens ens d y

‘‘ The strength of our newspaper titles is clear from the significant significant the from clear is titles newspaper ofour strength The the next best-sellin next the than larger 100,000 copies nearly is which a circulation with Scotland, their a their Sunda r 2 d i d division The downturn. the through businesses ofthe the resilience O Division Nationals A O o ci o c A 1 r c a 3 c a p by b e a m e F m m p r m E t The of thebusinesses. demonstrating theresilience stronglyperformed in 2010, Our Nationals division mprovin h evenue evenue eadership terms reaching 46% more readers than the next best-read best-read next the than readers 46% more reaching terms eadership elevance and im 0.7 m fficiencies without compromisin fficiencies ontinued to decline year on year. The circulation performance o performance year. circulation on The year to decline ontinued avera opies on avera on day per opies nd the Sunda nd Dail n ditorial ollowin 010 partially miti 010 partially .9 million. f marketing spend which do not provide a return on investment. investment. on a return provide not do which spend f marketing ur five national titles reflects our policy of not chasin ofnot policy our reflects titles national ur five aid-for circulation volumes of our titles and the mass audience reach audience mass the and titles ofour volumes circulation aid-for art eclines of 6.5% reflect there being no cover price increases during increases price cover no being there of6.5% reflect eclines elivered operatin een reduced by around 200 positions, including 60 which were filled filled were which 60 including positions, 200 by around reduced een ach of our national titles broadly maintained advertisin maintained broadly titles national ofour ach cross t BC circulation figures than any of their national competitors. national oftheir any than figures circulation BC rcu ur Nationals division stron performed ur titles have ahi have ur titles ey prov ultimedia newsrooms for our titles. Chan titles. our for newsrooms ultimedia onth volatilit onths durin ar casua d structures k i S cu l et s at unday Mail continues to be the biggest selling newspaper in in newspaper selling biggest to the be continues Mail unday g y illi l i ar ensure encies. The stron The encies. on vo title. The websites of our national titles and brands have have brands and titles national ofour websites The title. g y h p on average mont average on g p h l Record achieved a achieved Record id the investment and implementation of the ofthe implementation and investment the wor e nat roduction s roduction by 1.8 percenta erformance are e O i ur national l n a g ume t y. d k i 2010 althou y ona ers. h ur Mail, achieved a achieved Mail, g ave e d f p i e in 2010 with readership per issue of 6.1 million. g ragment ng t g t g ortance of our national brands to advertisers and to advertisers brands national ofour ortance ated by asi g l profit popu h h her proportion of full rate sales within their audited their within rate sales offull proportion her title. The Sunday Mail is also market leader in leader market also is Mail Sunday The title. roug at t y h . li stem, we have created more efficient more created wehave stem, m e year, t h S g i g nate l e h g e durin unday titles, the the titles, unday ar newspaper mar hl i market positions of our UK brands in brands UK ofour positions market g i ng me cover pr cover rowth of3.0% operatin with rowth r a g y un e points from 18.2 from e points A Trinit h we have seen continued month on month continued seen h wehave nnua d d j oint circulation in excess of 1.5 million g h out vert nificant improvement in the advertisin the in improvement nificant i y ere que users. que users. l g

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Financials Governance Business review Who we are 16 Annual Report & Accounts 2010

Chairman and Chief Executive statement

‘‘We remained committed to attracting and retaining a talented workforce and have continued to invest in supporting and developing staff. ’’

Regulation Cash Flow and Net Debt Whilst we are disappointed that the Government decided not to The Group continued to generate strong cash flows during the year progress with the pilots for Independently Funded News Consortia, which enabled net debt on a contracted basis to fall by £58.1 million we await with interest their final plans for local TV. We also note the from £324.0 million to £265.9 million. On a statutory basis, net debt Government is progressing with its plans to relax all local cross media fell by £62.5 million from £299.8 million to £237.3 million. ownership regulations. Any increase in flexibility provided by relaxation Our strong cash flows and prudent management of our financing in media ownership rules presents potential opportunities to react facilities ensured that the Group maintained significant financing to market changes and consider cross-platform options in an era flexibility with no drawings on the Group’s £178.5 million bank facility when traditional platform distinctions are increasingly irrelevant to which is committed until June 2013. The Group holds a significant consumers and advertisers. cash balance which at the year end amounted to £116.2 million, The Group believes that scale in regional media can be an important in order to provide ready funds for the next repayment of the private driver of value for shareholders and the acquisition of GMG Regional placement loan notes which is due in October 2011 and is expected Media during the year was a compelling demonstration of this. to be repaid substantially through cash balances and cash generated The Group will consider further regional consolidation opportunities in 2011. where there is a strong financial case and a good commercial and strategic fit. Pensions Following an extensive consultation process the Group closed all its Capital Expenditure defined benefit pension schemes to future accrual on 31 March 2010. We continued to tightly manage our capital expenditure during the All former members were given the option to join the Group’s defined year. Capital expenditure in the year was £14.2 million against contribution pension scheme. The closure of the defined benefit depreciation of £33.9 million. Proceeds from the sale of two freehold pension schemes to future accrual ensures that the Group is no properties amounted to £2.7 million. Net capital expenditure longer increasing pension obligations with the potentially uncapped amounted to £11.5 million. and increasing costs associated with the provision of defined benefit pensions. This step will also eliminate the volatility in the income Capital expenditure is expected to be maintained at around statement operating profit charge for pensions as this will be based £15 million per annum for the foreseeable future and will remain on the actual contributions to the Group’s defined contribution below depreciation as the Group has already invested in pension schemes. new presses. The defined benefit pension net deficit has fallen materially during the year by £135.6 million from £296.6 million to £161.0 million (£117.5 million net of deferred tax). The fall in the net deficit largely reflects the benefit of increasing assets values. Liabilities have increased marginally, with the significant reduction following the Government change to link state pension increases to CPI instead of RPI, which has impacted most of our deferred pensions, being more than offset by a reduction in the real discount rate and other changes. Trinity Mirror plc Annual Report & Accounts 2010 17

‘‘Managements drive to maximise revenues and tightly manage costs while investing for growth will help support profitability in 2011. ’’ Who we are

Employees Key Operating Trends and Outlook We remained committed to attracting and retaining a talented The highly successful acquisition of GMG Regional Media enabled workforce during 2010 and have continued to invest in supporting Group revenue to increase by 3% in January and February. Excluding and developing our staff. At the beginning of 2010 we established a GMG Regional Media, revenues fell by 6% with advertising revenues iew

Group Training and Development Steering Committee chaired by the falling by 10% and circulation revenues falling by 5%. Advertising v e

Chief Executive to ensure that resources were channelled to best revenues for Regionals, excluding GMG Regional Media, fell by 11% r support the Group’s strategic goal. It is particularly pleasing to report and for Nationals fell by 9%. ess that during 2010 strong progress has been made on a number of key n In 2010 the Group delivered a reduction in the underlying cost base of initiatives:

£64.7 million with structural cost savings of £25 million. The Group’s Busi – An Inspirational Leadership Programme was launched to develop focus on maximising revenues and tight management of the cost the skills and capabilities of senior managers across the Group. base enabled profit to grow in 2010. In 2011 we will continue to tightly Over 90 managers took part in the three day programme in 2010; manage the cost base and expect at least £10 million structural cost savings, although this will be more than offset by general inflationary – A Talent Development Programme was designed to develop the price increases, average increase in newsprint prices in excess of skills of the next level of managers. These and other training 20% and investment in our businesses. We expect restructuring programmes contributed to 90% of the management team costs in 2011 to be around £10 million. benefiting from training during 2010; and The Board envisages a volatile and slow recovery in the UK economy – A Customer Service Promise was introduced to all employees as public sector spending cuts and taxation increases continue to outlining our commitment to customers. During the year, over impact consumer confidence, unemployment and the property 1,800 members of staff received training specific to this initiative. market. However, the Board remains confident that management’s

drive to maximise revenues and tightly manage costs while investing e Dividend for growth will help support profitability in 2011 whilst positioning the The Board continues to see an improvement in the cash flows Group for growth when market conditions improve. generated by the Group which has contributed to net debt falling by

£58.1 million to £265.9 million. This continued improvement in the overnanc Group’s financial position has been achieved against the backdrop G of a challenging trading environment. The strong cash generation of the business provides the Board with confidence that the Group is making progress towards the Sir Ian Gibson CBE Sly Bailey reinstatement of dividends. Nevertheless, the Board believes it Chairman Chief Executive prudent to maintain financial flexibility for the time being and therefore the Board is not proposing a dividend until such time that we see an improvement in the trading environment. The consistent key factors that the Board will consider in assessing the trading environment are: –Y ear on year stability and improved visibility in advertising revenues; and

– Clear evidence that the economy has returned to a sustainable cials n

period of growth. a n Fi Trinity Mirror plc 18 Annual Report & Accounts 2010 Board and management team

13 3410 2 12 1

1. Sly Bailey (49) 5. Kathleen O’Donovan (53) Chief Executive Non-Executive Director Sly was appointed Chief Executive in February 2003. She started Kathleen joined the Board in May 2007. She is Chairman of the Audit her media career in advertising sales at and then and Risk Committee. Kathleen is the senior independent director of . In 1989 she joined IPC Media Limited as Head ARM Holdings plc and is a non-executive director at Prudential plc. of Classified Advertising Sales and joined their Board in 1994 as Previously she was on the Court of the Bank of England and held Advertising Director. In 1997 Sly was appointed Managing Director of non-executive directorships at O2 plc and EMI plc. Between 1998 IPC tx, the TV listings division. In December 1999 she was appointed and 2002 she was CFO of Invensys plc, having previously been the Chief Executive of IPC Media Limited and subsequently led the sale Finance Director of its legacy company BTR plc which merged with of the business to AOL Time Warner. Siebe plc to create Invensys. Sly is a non-executive director and Remuneration Committee member of Ladbrokes plc. She is also a Governor of The English 6. Vijay Vaghela (44) National Ballet School and is a non-executive director of the Press Association and President of NewstrAid, a charity for the wholesale Group Finance Director and retail news trade. Sly was previously Senior Independent Vijay qualified as a chartered accountant and worked in private Director and Remuneration Committee Chairman of EMI plc practice with Deloitte. He joined Mirror Group in 1994 as an Internal and a non-executive director of Littlewoods Plc. Auditor. He was subsequently Group Treasurer and then Director of Accounting and Treasury. He was appointed Group Finance Director 2. Sir Ian Gibson CBE (64) and joined the Board in May 2003. Chairman 7. Paul Vickers (51) Sir Ian joined the Board of Trinity Mirror and was appointed Chairman in May 2006. He is non-executive Chairman of Wm Morrison Secretary and Group Legal Director Supermarkets plc. In September 2010, Sir Ian was appointed Paul joined the Board in September 1999 having been a director of non-executive member of the Public Interest Board for Mirror Group since 1994. He originally qualified as a barrister and was PricewaterhouseCoopers LLP. Previously he was President of Nissan in private practice at the Bar. He was legal manager of the Europe and Senior Vice President of Nissan Group. Sir Ian was Daily News, which he left to join the breakfast television company Chairman of BPB plc, was on the Court of the Bank of England, was TV-am where he subsequently became Assistant Managing Director. Deputy Chairman of Asda Group plc, Senior non-executive director He was previously a non-executive director of Virgin Radio. Paul is a of plc and a non-executive director of GKN plc and director of the Press Standards Board of Finance, the body that funds Greggs plc. and sets the remit for the PCC.

3. Gary Hoffman (50) 8. Laura Wade-Gery (45) Non-Executive Director Non-Executive Director Gary joined the Board in March 2005 and has been Senior Laura joined the Board in August 2006. Laura has been appointed as Independent Director since May 2007. Gary has been appointed as executive director, Multi-channel E-commerce at Marks and Spencer Chief Executive of NBNK Investments plc (effective May 2011). He is plc and will take up that role during the course of the year. Previously a director of Visa Europe. Previously Gary has been Chief Executive Laura has been Chief Executive of Tesco.com, Director of Tesco of Northern Rock plc, Vice-Chairman of City Football Club Bank and Group Strategy Director, Tesco plc. Prior to joining and Group Vice-Chairman and Executive Director of plc. Tesco in 1997, Laura held positions with Gemini Consulting and Kleinwort Benson. 4. Jane Lighting (54) Non-Executive Director Jane joined the Board as a non-executive director in January 2008 and was appointed Chairman of the Remuneration Committee in 2009. Jane was Chief Executive of Five and of Flextech plc and is a Trustee and Fellow of the and Council Member of the British Screen Advisory Council. Jane was appointed as a non-executive director of Paddy Power plc in September 2009. Trinity Mirror plc Annual Report & Accounts 2010 19 Who we are

6 57 9118

Executive Committee 12. Rupert Middleton Sly Bailey, Chief Executive Director of Manufacturing Vijay Vaghela, Group Finance Director Rupert joined Trinity Mirror as Group Director of Manufacturing in

Paul Vickers, Secretary and Group Legal Director w

March 2004. He is responsible for Trinity Mirror Printing, the integrated e

manufacturing division that prints all Trinity Mirror newspaper titles vi e

9. Nick Fullagar and a significant volume of copies for external publishers including r the and The Independent. Prior to joining Trinity Mirror,

Director of Corporate Communications ess

Nick was appointed Director of Corporate Communications in 2001. Rupert has previously been Managing Director of a division within in

He started his career in journalism on local and regional newspapers, The Stationery Office, and Managing Director of Westferry Printers. us including the Western Mail in Cardiff, before joining the Daily Mirror in Rupert is Chair of Governors at Tower Hamlets Further Education B 1980. After a number of roles, including news editing, Nick moved College and President of the British Printing Industry Federation. into communications in 1993 as Head of Public Relations for Mirror Group. Nick is a trustee of the Child Growth Foundation and a 13. Tony Pusey governor of Grove Park school, East Sussex. Group Information Technology Director Tony was appointed Group IT Director in December 2000. Prior to 10. Georgina Harvey joining Trinity Mirror, he was Group CIO and Business Change Managing Director, Regionals Director at Storehouse plc, which incorporates Bhs and Mothercare. Georgina joined the Company in February 2005. She started her media career at Express Newspapers where she was appointed Advertising Director in 1994. She joined IPC Media in 1995 as Group Advertising Sales Director for SouthBank and went on to form IPC Advertising in 1998, where she was Managing Director. Georgina became a member of the Board of IPC Media in 2000 and was subsequently appointed Managing Director of Wallpaper* Group in 2003. Georgina was appointed as President of the Newspaper Society in July 2010. Governance

11. Mark Hollinshead Managing Director, Nationals Mark was appointed as Managing Director of our Nationals division in September 2008. From 1998 he was Managing Director of the Scottish Daily Record and Sunday Mail Ltd, prior to which he was Managing Director of Midland Weekly Media Ltd. He was previously Business Development Director at Thomson Regional Newspapers Ltd, Marketing Director at MIN plc and Research Manager at the Wolverhampton Express & Star, having entered the newspaper industry in advertising sales at the Midland News Association Ltd in the mid 1980s. Mark spent the early part of his career working in

advertising agencies. He is a director of the Newspaper Publishers s l a

Association Ltd and former Chairman of Scottish Athletics Ltd. i c n a Fin Trinity Mirror plc 20 Annual Report & Accounts 2010 Business review The Business review unless otherwise Our marketplace stated, is presented on an adjusted basis The UK economy remained fragile in 2010 with further pressure created by the implications of the announced public sector spending to provide a more meaningful comparison cuts and tax rises and increasing uncertainty regarding the financial of the Group business performance stability of a number of major European countries. The ongoing fragility in the UK economy led to only marginal growth in GDP, between 2009 and 2010. Adjusted results high unemployment and a sluggish and volatile property market. exclude the impact of non-recurring items, The challenging economic environment continued to place pressure the amortisation of intangible assets, the on the Group’s key advertising and circulation revenues. retranslation of foreign currency borrowings, The severe weather conditions in December 2010 contributed to a more marked slowdown in advertising revenues as advertisers the impact of fair value changes on derivative cancelled spend and also impacted circulation volumes due financial instruments and the impact of tax to the difficulties in getting our newspapers to retailers and legislation changes. The Business review therefore consumers. has been prepared for the 52 weeks The Group continues to manage the implications of media fragmentation coupled with the highly competitive national ended 2 January 2011 and the comparative newspaper market characterised by ongoing price cutting in the period has been prepared for the 53 weeks tabloid marketplace, although we have seen some moderation ended 3 January 2010. The additional in cover price cutting as we have moved into 2011. week of trading in 2009 contributed Whilst the market conditions remained challenging, the strength of our portfolio of brands ensured that we saw an improvement in revenue of £9.9 million and operating profit the rate of decline in advertising revenues during the year and we of £4.2 million. A reconciliation between the continued to provide significant reach across the UK through our mass circulation national newspapers portfolio, our market leading adjusted results and the statutory results is regional newspapers and our national and local websites. provided in note 38 on page 99.

Group activities Trinity Mirror is one of the UK’s largest newspaper publishers with an award winning portfolio including five national newspapers, over 160 regional newspapers and more than 500 digital products. The Group employs over 6,500 people in around 60 locations across the UK, including nine print sites. The Group has two trading divisions: Regionals and Nationals.

Group strategy Our strategic goal is to build a growing multi-platform media business, by developing and sustaining strong positions across print and digital, with products and services which meet the needs of our customers, both readers and advertisers. rate c tax of the impact the and taxable being not Media Regional ofGMG acquisition the on gain to accounting the due primarily Profit before tax on astatutor on tax before Profit non-recurrin the of benefit a credit non-recurring of £20.7 million compared to a On a statutory basis operatin basis astatutory On £763.3 million to £761.5 million. Media acquisition despite 2010 having one less week oftrading week 2010 less despite one having acquisition Media is driven by the improved underlyin improved by the driven is £87.0 million to £138.0 million. The material increase in operating profit Share of results ofassociates ofresults Share a T l £ 2010 in revenue mar Group fell Earnin P T Fi Operatin N Operating cost R a a T Statutor Group performance on deferred tax balances of the chan ofthe balances tax deferred on credit of £4.0 million and a credit of £11.4 million relating to the impact of £12.3 million in the instruments which were a credit of £7.5 million compared to a charge financial derivative on changes value fair and borrowings currency compared to the 53 weeks ended 3 January 2010 3January ended weeks to 53 the compared Amortisation ofintan Amortisation statutor 8.4% 2011. represents ofthe April in charge tax effective statutory The is and year the in enacted 28%from to substantively 27% was which basis increased b basis increased £29.3 million to £113.3 million. Earningsper share on a statutory Profit on a statutory after tax basis improved by £84.0 million from Profit before tax before Profit with the operatin the with ower ower ax char significant improvement in performance due to the management to management the due performance in improvement significant current year charge of £25.8 by offset a million prior year partially ction taken in 2009 and 2010 and the benefit from the GMG Regional Regional GMG the from 2010 and benefit 2009 the in and taken ction 42.0 million to he statutory tax char tax statutory he 2011 2January (2010) ended 52 the weeks for results statutory he ro nance on-recurr evenu fi t a h i nterest costs an costs nterest ange. g y f i e ge

s per shar s per tems ter tax p g y rofit before tax. This is lower than the statutor the than lower is This tax. before rofit i profi ng result g char i s tems £ g 123.7 million. This reflects increased operating profit, t y profit of GMG Re ofGMG profit 33.1 g s e of £11.3 million in the prior year. e g p ible g d rior e for the was period £10.4 million reflectin t p h s ence from 11.5 e y ear b g y ene profit improved by £51.0 million from basis increased b increased basis . g inally by £1.8 million from fi t g f g profitability of the Group to Group ofthe profitability rom t rom g ional Media of £5.7 million and e in the rate of corporation tax tax rate ofcorporation the e in p h ence to 44.6 e retrans (638.9) 44.6 1 1 138 7 ( ( 1 23.7 20 6 10.4 14.3 2 ( 3 0 1.5 6.0 010 £ y . . .7 .7 m p 3 0

£ ) ) ) ( 81.7 million from 2009 l at 684 19.5 (658.4) i 11.5 7 on o ( ( ( 12.7 45.0 11.3 42.0 29 8 63. p y 2009 71 1.1 (7.1) 7. 0 ) rate of28% ence. £ represents . .5 m p 3 0 3 f

) ) ) f ore Variance g . 33.1 i gn gn ether ether g 8 8 30 5 32 ( 1.8 4. 1.7 1. 2 0

£ . .7 . .2 m p 0 3 0 0 ) to t the m r R £ g r O ( D Non-recurring items L I D P Re R G N r to decreased expense interest The ( o Th c r I T b F i F I P I F e i r a o £ non-recurrin schemes’ pension benefit defined The ( o The n The £ W nstrument providing in discretion exercise longer no will it that ndicating mpairment of receivable nvestment revenues increased to increased revenues nvestment ex nterest revenues nvestment 2009: 2009: 2009: 2009: e esultin e e ofacurtailment espect ccrual and the impact of redundancies ofredundancies impact the and ccrual air value value air osts osts 10 million 4.8 by offset transaction million partially costs of nhancements to nhancements orei oss on ota o further costs are expected are costs o further f of to aprofit rise giving buildings freehold f two 0.4 million cost of a comprises past service oodwill of n assets an n assets orrowing ens rofit on disposal of land and buildin and ofland disposal on rofit inance item estructurin charge estructuring e uring 2010,uring the ain on acquisition of busines n 28 March 2010n 28 March the on-recurring items on-recurring fl fl d odel for the the odel for e expect tota e expect £ e pens l fi ect ect h ease uct 7.9 million relatin G ne G G e c g l i on

roup’s defined benefit pension schemes was was schemes pension benefit roup’s defined i i i fi roup received cash proceeds of of accruals released roup n exchan d ncurre i n ng on measures an £ £ £ g l nance g ar

11.3 million charge 10.5 million 5.1 million b in an accountin an in di o fi

i l hi nance c ene on ifi f g ower avera s p sposa . s acc ain cat g £ ens g h 23.6 million and a gain on print contract a cancelled o d d fi fi char G er net cas net er nance c t /( on t i t r on o i l e g h loss ua restructur roup amounted to amounted roup p tems c s l e unw e (loss)/ o ens G h l p s g g h f roup had a net non-recurring credit of credit non-recurring anet had roup arg ). f )

ast service on redundanc on service ast certa ain on the disposal of a property in Birmin in ofaproperty disposal the on ain g es in connection with the delivery of cost ofcost delivery the with connection in es on derivative financial derivative on e b i g s on sc to the us i h ssue o e e i d G n arge w h i h g nes i g g di

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ares h R b h £ 3.6 million e e £ £ represents an assume an represents ers p 28.4 million representin g £ 1.4 million 11.1 million ort ort di gs to redundancies and the the and to redundancies 16.1 million . i scount on i ’ n pr & d on o i

n 2011 to £ b

A G i 2.7 million from the sale ene nterest on a on nterest ccounts 2010 ( g 2009: 2009: M i or per the schemes to future schemes the f t G fi ( h 2009: 2009: ts £ y) Re e new operat e new ( 8.3 million in relation 2009: 2009: . ( 2009: 2009: l £ ess acurta ess £ li ( i b o 2009: 2009: g 9.9 million gain in a 1.3 million £ e aroun d ional Media ional Media bili 1.1 million £ £ s. g 7.1 million nil loss o t VAT £ i es w £ 0.2 million ) ( ( ( for which which for 17.9 million £ 20 2 16 11.1) 14.3 16.1 2 20 ( (8.9) ( 22.4 million 1.4 7.3 1. 3 7.1 0.4 re 010 £m £m £ d d 1 .4 .7 . g 3 6 20.7 million i – – 21 0 i return return

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Financials Governance Business review Who we are Trinity Mirror plc 22 Annual Report & Accounts 2010

Business review

The impact of fair value changes in derivative financial instruments advertising revenues, £7.2 million circulation revenues and £3.4 million and the retranslation of foreign denominated borrowings resulted other revenues during 2010. Excluding GMG Regional Media, in a net credit of £7.5 million (2009: £12.3 million net charge). revenues declined by 6.9% with advertising revenue falling by 6.3%, circulation revenue falling by 8.6% and other revenue falling by 3.0%. Adjusted results The overall decline in revenues reflects the fragility of the UK economy 2010 2009 Variance which continues to adversely affect our customers, both readers and £m £m % advertisers. However, we have seen a marked improvement in the Revenue 761.5 763.3 (0.2) rate of decline in advertising revenue which is down 6.3% in 2010 compared to a decline of 22.2% during 2009. Lower circulation Labour (248.8) (255.6) 2.7 revenues reflect lower circulation volumes only marginally mitigated by Newsprint (105.0) (114.5) 8.3 limited cover price increases in the Regionals and no cover price increases in the Nationals. The fall in other revenue is driven by the Depreciation (33.9) (36.8) 7.9 impact of contract print services previously charged to GMG Regional Other costs (251.2) (251.5) 0.1 Media which are now classified as internal charges. Excluding all charges to GMG Regional Media for 2009 and in 2010 prior to the Operating costs (638.9) (658.4) 3.0 acquisition, other revenues increased by 3.2% due to new third-party Share of results of associates 0.7 0.5 40.0 contract print revenues. Operating profit 123.3 105.4 17.0 Group digital revenue, included in advertising and other revenue, increased by £1.5 million from £35.6 million to £37.1 million. Excluding Pension finance charge (7.1) (10.5) 32.4 GMG Regional Media, Group digital revenue fell marginally by Net interest costs (14.7) (22.2) 33.8 £0.7 million from £35.6 million to £34.9 million. This reflects ongoing declines in recruitment and property advertising revenues driven Profit before tax101.5 72.7 39.6 by high levels of unemployment and a sluggish property market, Tax charge (28.9) (21.6) (33.8) in particular the new homes market. Encouragingly we continue to see growth in other digital revenues such as motors and directories. Profit after tax 72.6 51.1 42.1 Audience growth remains strong with average monthly unique users Earnings per share 28.6p 20.0p 43.0 for the year increasing by 19% year on year to reach 21.6 million for the year. We remain committed to growing our digital revenue and have continued to invest in new launches. Group revenue in 2010 fell marginally by £1.8 million from £763.3 million to £761.5 million. Excluding GMG Regional Media, Group revenue by division, including and excluding GMG Regional Group revenues fell by £52.7 million from £763.3 million to Media, is set out below: £710.6 million. The revenue trends have been adversely impacted Including GGGMG Regional Media Excluding GGGMG Regional Media by the additional week’s trading in 2009 which contributed revenue of £9.9 million and by the impact of the severe weather conditions 2010 2009 Variance 2010 2009 Variance £m £m % £m £m % across the UK during December 2010. Regionals 331.2 302.9 9.3 280.3 302.9 (7.5) Group operating profit increased by £17.9 million from £105.4 million to £123.3 million. Operating costs decreased by £19.5 million and Nationals 430.3 460.4 (6.5) 430.3 460.4 (6.5) excluding GMG Regional Media operating costs fell by £64.7 million. Total The significant reduction in costs reflects the ongoing tight revenue 761.5 763.3 (0.2) 710.6 763.3 (6.9) management of costs, the structural cost savings of £25 million and lower average newsprint prices during the year. Operating margins increased by 2.4 percentage points to 16.2%. Revenue for the Regionals increased by 9.3% to £331.2 million and for the Nationals fell by 6.5% to £430.3 million. Excluding GMG Profit before tax improved by £28.8 million from £72.7 million to Regional Media, Regionals revenue fell by 7.5%. £101.5 million reflecting the improved operating profit, lower interest costs and a lower pension finance charge. The tax charge of Group operating profit analysis £28.9 million for the year represents 28.5% of profit before tax. Group operating profit by division, including and excluding GMG Profit after tax improved by £21.5 million from £51.1 million to Regional Media, is set out below: £72.6 million with earnings per share growing by 43.0% from 20.0 pence to 28.6 pence. Including GGGMG Regional Media Excluding GGGMG Regional Media 2010 2009 Variance 2010 2009 Variance Group revenue analysis £m £m % £m £m % Group revenues by type, including and excluding GMG Regional Media, is set out below: Regionals 51.7 35.9 44.0 46.0 35.9 28.1 Nationals 86.1 83.6 3.0 86.1 83.6 3.0 Including GGGMG Regional Media Excluding GGGMG Regional Media 2010 2009 Variance 2010 2009 Variance Central (14.5) (14.1) (2.8) (14.5) (14.1) (2.8) £m £m % £m £m % Total Advertising 351.3 331.8 5.9 311.0 331.8 (6.3) operating profit 123.3 105.4 17.0 117.6 105.4 11.6 Circulation 317.4 339.3 (6.5) 310.2 339.3 (8.6)

Other 92.8 92.2 0.7 89.4 92.2 (3.0) Group operating profit increased by 17.0% from £105.4 million to Total 761.5 763.3 (0.2) 710.6 763.3 (6.9) £123.3 million despite revenue being under pressure. Both Regionals and Nationals increased operating profit by 44.0% and 3.0% respectively. Excluding GMG Regional Media, Regionals operating The revenue performance reflects an increase in advertising revenues profit grew by 28.1%. of 5.9%, a fall in circulation revenues of 6.5% and an increase in other revenues of 0.7%. GMG Regional Media contributed £40.3 million newspaper of recruitment and property, di property, and of recruitment s 54.6 in the respective sections of the Business review Business ofthe sections respective in the included are division each for indicators key performance Relevant property revenues now a sma now a revenues property 18.8 t with the acquisition of GMG Regional Media and the strong national strong the and Media Regional ofGMG acquisition the with classified cate muc property and motors and national sites in recruitment and property property and recruitment in sites national and motors and property Despite the challen the Despite weoperate. which in markets in the 86% in the North West, 70% in the Midlands, 71% West, 70% Midlands, the in North the 86% in in in line with or ahead of competitors or comparators takin comparators or ofcompetitors ahead or with line in of 6.4 million copies and readershipof 7.7 million. our weekly basis. includes companion Our websites digital portfolio to a on population 70% over adult ofthe reach titles print our regions, geographical ofour majority the In Media. Regional GMG with acquired 31 titles includes and titles newspaper free 160 and paid-for digital media brands across the comprisesover UK. The print portfolio the proportion of advertisin P i a b O a Whil i ad R a a a T Regionals division T T indicators Key performance reaching 58% on a weekly basis in in basis 58% aweekly on reaching proport on cost, the implementation of the new operatin new ofthe implementation the cost, on property mar property consumer and advertiser confidence. Re confidence. advertiser and consumer of our publishin of our now represents 45.4 represents now the Newspaper the Newspaper we have experienced in 2010, in the experienced we have as market, adeclining In reach. and users unique volumes, circulation c have been hit particularly hard by the economy due to hi the due economy by the hard particularly hit been have GDP oflow impact mot 11.1 m 11.1 2010 n ncrease h ig vailability ofvailability credit, hi com l nd 56% in the 56% the nd in n ofrecruitment, key verticals the in sites local communities, nd he Re operatin revenue, include hese financial. primarily are Group the for indicators keyhe performance ran ress ress eg ass d ur re ese categor d vert n ustry awar ustry a k i ifi i st t % vate % h ona d ey newspaper t ey newspaper ifi cant proport h re s g A g i bi respectively of advertising revenues. With recruitment and and recruitment With revenues. ofadvertising respectively illi of advertising revenues. The more resilient display advertising advertising display resilient more The revenues. ofadvertising e s as proven to g h i row ional paid-for and free newspapers have a weekly circulation aweekly have newspapers free and paid-for ional h war d i on o on average mont average on nat ng per d l d ionals division publishes an extensive portfolio of print and and ofprint portfolio extensive an publishes division ionals e acute cyc e acute s ave as i a n operat uce pro di d i i d on o n i v n vert f s. a g k i d d d f s i g es to a et w

ess an d s f i ustry w ustry digi g on cont ories. Whilst revenues remain under pressure, ou pressure, under remain revenues Whilst ories. ormance S ig S i f vert s d strate cyc outh. The stren The outh. ociety Awards and the Press Press the and Awards ociety i n i i d ur n i ng pro ona ta on o hi ifi g t g g b i i li c s n l in cant reac i h % revenues, t revenues, mar rowth, fallin li t ca d e anot g i h l g ca e ng revenues re revenues ng es, g l i verse wor . In addition, within the key classified categories key the classified within addition, . In t co g h levels of unemployment and aslu and ofunemployment h levels t f i h environment, mana l nue t b pressures pressures y and that of our competitors. ofour that y and l h recovery an recovery un fi h us hl f k e per h rom our our rom t an ll ese com et ect y un yper g kf d i h l d ness y revenues comin revenues i to prov to n orce er c er d h i i g ll mpact t ve g i er proport strong marg i o amon l l serv que users. y oca ital revenue accounts for 38.6% and 38.6% for and accounts revenue ital g g h d g h l i y contr ng revenue revenue ng i profit and operatin and profit public sector spend, limited ese cate s now s now , th of our brands and hi and brands th ofour h a G M i i h ll as S n nc l s en roup seeks to target performance performance to target seeks roup id ave s i etro t g ces o cotland, 73% in the North East, 73% North cotland, the in l d at g i l

e s h tes serv tes b u structura gi f st t i rom rom e ve to c een recogn di ib n b i g i b n gn i on o g i etter etter ute t gn h g ff ional media businesses l us g I year year es n our n our e a er g or digi i severa ifi n recovery. ifi ement’s continued focus focus continued ement’s g d d i ness cant au i i n h cant f es now represent i i from the more cyclical cyclical more the from to to ec d ng spec a rcu pl G g as ta u l g c f . d . ace li azette Regional or t k l l model, coupled t popu l O , t nes, re vert l ow ey mar h l at l e y i i l n t ur websites have an h se awar d i h g d i on revenues an revenues on e potent mpacte di S to asu e re l i mar to to h d eve s g outh Wales ifi ence reac e s i

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Week’ and a companion website in Greater in website acompanion and Week’ the South serve pro serve p o h b C MEN a b O b R into ou integrated fully been has business Media Regional GMG The a p w n r p 2 28 on March completed Media, Regional ofGMG acquisition The C b a W a p b p n i di Th 0 u i n o f f a i r a fi a O a p of n the acquired businesses with new revenue generating tools such tools generating revenue new with businesses acquired the successful. The acquisition is astron is acquisition The successful. t Surrey Advertiser and a number of weekly titles in the South and a and South the in titles ofweekly anumber and Advertiser Surrey the includes which Media, S&B and websites, associated and titles totallyle s or mportant mportant ncreased its audience with visits u visits with audience its ncreased u ish4 reported revenue during the period of period the during revenue reported ish4 h evenue of evenue ecruitment websites. fish4 strengthens the Group’s position in the in Group’s the position strengthens fish4 websites. ecruitment s new free weekly business ma dvertising revenues being boosted by circa by circa boosted being revenues dvertising cross print and digital and adds scale in the West North and s Local Mole, our local business directory and our advertisin our and directory business local our Mole, s Local lon nd by brin n mass-market UK’s ofthe one first was fish4Jobs homes. nd .3 m ow conso ine months since ac since months ine as been fully inte fully been as at p 62% to 1.1 million and job applications increasin etwork providin etwork 010 for a cash consideration of £7.4 million, has proved highly perat peratin usiness retains a city centre presence in Manchester. S&B Media S&B Manchester. in presence centre acity retains usiness usiness has relocated to rint plant in Readin in plant rint achieving expectations ofour ahead performed has and ortfolio rov rov o launch the with business the in We invested have revenues. rint lant in Readin etween ex etween South. and West North the across reach abroader from enefits een conso egionals division. The Group is already seeing advertising revenue advertising seeing already is Group The division. egionals anary Wharf in 2011 in Wharf anary hadderton, v hich comprises the Manchester Evenin Manchester the comprises hich ur management teams ensured that best practice is shared shared is practice best that ensured teams ur management n 13 October 2010, the Group took control of fish4. fish4 sits sits n 13 fish4 2010, offish4. October control took Group the newspapers w ll at e cont h d e new operat e new

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Financials Governance Business review Who we are Trinity Mirror plc 24 Annual Report & Accounts 2010

Business review

Revenue and operating profit Revenue by type The revenue and adjusted operating profit for our Regionals division, Revenues by type, including and excluding GMG Regional Media, are including and excluding GMG Regional Media, is as follows: set out below:

Including GGGMG Regional Media Excluding GGGMG Regional Media Including GGGMG Regional Media Excluding GGGMG Regional Media 2010 2009 Variance 2010 2009 Variance 2010 2009 Variance 2010 2009 Variance £m £m % £m £m % £m £m % £m £m % Revenue Advertising 222.5 198.9 11.9 182.2 198.9 (8.4) Print and Circulation 73.2 72.5 1.0 66.0 72.5 (9.0) other related Other 35.5 31.5 12.7 32.1 31.5 1.9 activities 298.8 272.1 9.8 250.1 272.1 (8.1) Total Digital revenue 331.2 302.9 9.3 280.3 302.9 (7.5) activities 32.4 30.8 5.2 30.2 30.8 (1.9) Total Total revenue comprises advertising (67.2%), circulation (22.1%) and revenue 331.2 302.9 9.3 280.3 302.9 (7.5) other (10.7%). All revenue categories have grown during the year. Operating Excluding GMG Regional Media both advertising and circulation profit revenues have declined whilst other revenues grew by 1.9%. Print and Advertising revenues other related Advertising revenue increased by 11.9% including advertising revenue activities 42.3 29.3 44.4 37.7 29.3 28.7 of £40.3 million from GMG Regional Media. Excluding GMG Regional Digital Media, advertising revenue fell by 8.4% reflecting a decline of 8.0% in activities 9.4 6.6 42.4 8.3 6.6 25.8 the first half and 8.9% in the second half. The rate of decline in the second half has been adversely impacted by the additional week’s Total trading in 2009 and adjusting for this, advertising revenues in the operating second half declined by 7.8% which is a marginal improvement on the profit 51.7 35.9 44.0 46.0 35.9 28.1 first half. The second half was also impacted by the severe weather Operating conditions in December 2010. Although the advertising environment margin 15.6% 11.9% 3.7% 16.4% 11.9% 4.5% remained challenging throughout the year, we are encouraged by the material improvement in the year on year decline from the 29.5% decline in advertising revenues during 2009. Revenue for the Regionals division increased by 9.3% to £331.2 million reflecting the benefit of the acquisition of GMG Advertising categories Regional Media partially offset by a decline in underlying revenues. Revenues by key advertising category, including and excluding We are encouraged by the improvement in revenue trends which GMG Regional Media, are set out below: have seen underlying revenues during the year fall by 7.5%, a significant improvement compared to the 23.5% decline during 2009. Including GMG Regional Media Excluding GMG Regional Media Operating profit for the Regionals division increased by 44.0% to 2010 2009 Variance 2010 2009 Variance £51.7 million and operating margin improved by 3.7 percentage points £m £m % £m £m % from 11.9% to 15.6%. The operating profit performance reflects the benefits of management actions to improve efficiencies and the Display 101.0 81.6 23.5 81.0 81.6 (1.0) acquisition of GMG Regional Media. Excluding GMG Regional Media, Recruitment 38.6 39.3 (2.0) 31.8 39.3 (19.4) operating profit grew by 28.1% to £46.0 million and operating margin increased by 4.5 percentage points from 11.9% to 16.4%. Property 23.9 21.4 11.1 19.7 21.4 (8.6) Print and other related activities revenue increased by £26.7 million Motors 13.7 12.6 8.6 11.2 12.6 (11.6) and operating profit increased by £13.0 million. Whilst revenues Other excluding GMG Regional Media remained under pressure we classified 45.3 44.0 4.2 38.5 44.0 (11.1) grew underlying operating profits by 28.7% from £29.3 million to £37.7 million. Advertising revenue 222.5 198.9 11.9 182.2 198.9 (8.4) Digital activities revenue increased by £1.6 million and operating profit increased by £2.8 million. Digital activities now represent 9.8% of revenues and 18.2% of operating profit of the division. Whilst Advertising revenue by category year on year was as follows: display revenues excluding GMG Regional Media were under pressure we up 23.5%, recruitment down 2.0%, property up 11.1%, motors up grew underlying operating profits by 25.8% from £6.6 million to 8.6% and other classified categories up 4.2%. Excluding GMG £8.3 million and increased our audience reach. Average monthly Regional Media, display was down 1.0%, recruitment down 19.4%, unique users across our websites grew by 17% year on year to property down 8.6%, motors down 11.6% and other classified 11.1 million per month. categories down 11.1%. Within display advertising, we are encouraged by the performance of our Metro titles which achieved year on year growth. months our national recruitment websites have returned to returned have websites recruitment national our months o

– r of fish4, digital will represent some 45% of recruitment advertising discretionary spend pa 9.0% 10.6% and for Sundays dailies, paid-for for for paid-for of7.6% declines volume year on year weexperienced Media, Regional GMG year. the Excluding during increases price cover limited by 9.0% fell only with revenue circulation Media, Regional revenue of £7.2 million from GMG Regional Media.Excluding GMG better placed to benefit from a combination of cyclical recovery and and recovery ofcyclical acombination from to benefit placed better now are they and years recent over reduced much has categories revenue increased by 1.9 increased revenue by 12.7% increased revenues other including Regionals O h Al Th * ^ S S Li H T Mail Western W Echo Wales South C Re revenuesCirculation a a from c below: 26.1% comin is ofthese and revenues 34.2% ofadvertising represented motors and property ofrecruitment, 2010, categories In cyclical most the Wales on on Wales Evening (Newcastle) Birmin rate o JIC REG Januar REG JIC e Actual average ABC July to December 2010 and actual average ABC July to December 2009. toDecember July ABC average 2010 actual and toDecember July ABC average Actual i nd this improved performance combined with our taking full control control full taking our with combined performance improved this nd chan ny structural a f he Journal Journal he unda Mercury unday rcu irculation and readership volumes for our largest titles are set out set are titles largest our for volumes readership and irculation u verpoo S some 350,000 v t ther revenue e lf h id e g dd e aturday l o s oug ionals circulation revenues increased by 1.0% increased includin revenues circulation ionals n - M l h f G at f ue f ers or wee t

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( Newcastle l to June 2010 Januar and toJune D Newcastle umes we ost ( o 0 g Wales f es re a g or anum or 11 ional Media. Excludin ily from di y E ( . ( . Teeside i Birmin s nue to exper nue

ven E g fl . xam ) es when market conditions improve. In recent recent In improve. conditions market when es ect i n h ) i g ) g ng t b g ave seen an encoura an ave seen i

% ner ital. The impact on the division from these these from division the on impact The ital. ) er o ham N driven by higher contract print revenue print contract by higher driven ews h e f

) k i i ence year on year year on year ence mpact o ey pa h y c to June 2009. toJune ir a 48 5 43,610 28 4 8 20 27 27 3 55190,629 35,581 33 54 cu d 2 0 7,1 1, a l , , , ,8 , 5 ,774 , , , g a Dail 2 id 2 613 6 660 91 185 495 9 725 ti

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sub-editin thereby continuin w c in reporters football our day; ofthe stories I a 1 O e i y c Th m w n o b p we Scotland, In People. The and Mirror Mirror, Sunday the Daily the a The Nationals division publishes five national newspapers which are division Nationals P f b e a m f D c a m o m h w a wi t a w p G t We continue to develop our brands and content across platforms across content and brands our to develop We continue Scotcareers. We also operate a number of other commercial activities activities commercial ofother anumber operate We also Scotcareers. such as Mirrorfootball.co.uk, 3am.co.uk, Mirrormobile and Scottish market. All our newspapers are complemented by aportfolio complemented are newspapers our All market. Scottish trapped miners emer miners trapped The advertisin nto 2011. n 2010 our newspapers once a once n 2010 newspapers our ully rolled out across the Nationals division creating a more efficient amore creating division Nationals the across out rolled ully illed by casual workers. As part of the restructure a proportion o aproportion restructure ofthe part As workers. casual illed by h h ear, although we have seen some moderation in cover price cutting cutting price cover in moderation some seen wehave ear, although .5 million and 2.0 million respectively with readership of 3.9 million so fficiencies without compromising quality. Editorial headcount has headcount Editorial quality. compromising without fficiencies dvertisin udience of 6.9 million. ont ontinue to experience month on month volatility. volatility. month on month to experience ontinue mong t nd 6.1 million respectively nd structure have eliminated outdated processes, delivering delivering processes, outdated eliminated have structure nd aptured the colourful emotion of The World World ofThe emotion colourful the aptured nv ational newspapers and a number of digital sites complementary ave fallen marginally for 2010, each of our UK national titles broadly broadly titles 2010, for national UK ofour each marginally ave fallen f growing digital brands, including companion websites for all ou ur national brands to advertisers and their agencies. The strong The agencies. their and to advertisers brands national ur y more readers than any other daily and and daily other any than readers y more ublish the Daily Record and Sunday Mail which combined are read are combined which Mail Sunday and Record Daily the ublish ublishin een re ress uring 2010 our new editorial production system, Contentwatch, was was system,Contentwatch, production 2010uring editorial new our on eat atched television pro hich include events, readers’ offers and a market leading business business leading amarket and offers readers’ events, include hich eneral Election while the Daily Mirror was on the spot in in spot the on was Mirror Daily the while Election eneral ur national titles provided average daily and and daily average provided titles national ur e e ultimedia newsroom environment. Chan environment. newsroom ultimedia agazine in Scotlandagazine arket year, the during share market volume advertising their aintained t e nat h i UK ‘D ronment. marg f i h nue ten g a er con reat plaudits for their insi their for plaudits reat A

il N i p d ssoc ona y i h ng o d g ositions of our UK brands in in brands UK ofour ositions uce at g e Mi i g cover pr cover O in print, online and on mobile. We also own and mana and own We also mobile. on and online print, in na revenues revenues i for the UK Nationals titles is now outsourced to the to the outsourced now is titles Nationals UK the for ona UK’ l ur titles continued to perform well in a challenging trading achallenging in well to perform continued ur titles rror newspaper mar di i d l f at growt t g

t b h i i s environment for our national newspapers, in particula in newspapers, national our for environment l on ons t e mar y aroun P l i g ea t r l id es, was muc was es, i to demonstrate the relevance and importance o importance and relevance the to demonstrate i n ce i h di n e o N . g g ng me . k D D di g ed from their many days under days many their from ed ort rew for most months durin months most rew for et w f d ecem ramme of its kind in Britain in 2010 in an Britain with in kind ofits ramme ur

scount B 200 pos 200 h i r ng t .

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l g a u d unday package in the in package unday es to the editorial process to editorial the es outh Africa brilliantly brilliantly outh Africa st a lf hl di ur o C S y compet ng 60 w i up, our political team political up, our f ng t unday circulation o circulation unday 2010 weexper d hi h k vert g ene i e c tors tors 2010 althou h h UK was t was e i s d g fi i d hi

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2010 s h we h we f g

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Financials Governance Business review Who we are Trinity Mirror plc 26 Annual Report & Accounts 2010

Business review

Revenue and operating profit Circulation revenues The revenue and adjusted operating profit for our Nationals division Nationals circulation revenue for the year has fallen by 8.5% from are as follows: £266.8 million to £244.2 million. Excluding the additional week of trading in 2009, circulation revenues have fallen by 6.9% from 2010 2009 Variance £m £m % £262.2 million to £244.2 million. The decrease in circulation revenue reflects volume declines with no cover price increases during the year. Revenue 430.3 460.4 (6.5) Circulation volumes declines for the year were Daily Mirror down 7.1%, Operating profit 86.1 83.6 3.0 Sunday Mirror down 7.3%, The People down 8.7%, Daily Record down 6.0% and the Sunday Mail down 7.5%. Operating margin 20.0% 18.2% 1.8% The average monthly change in circulation volumes for 2010 and the average readership of our national titles were as follows: Revenue declines of 6.5% from £460.4 million to £430.3 million were more than offset by a fall in costs of 8.7% from £376.8 million to 2010 2009 2010 2009 Volume Volume Average Average £344.2 million enabling operating profit to increase by 3.0% from actuala actuala Change readersb readersb Change £83.6 million to £86.1 million. The cost reductions resulted in 000 000 % 000 000 % operating margin increasing by 1.8 percentage points from 18.2% to 20.0%. The additional week’s trading in 2009 contributed revenue Daily Mirror 1,221 1,314 (7.1) 3,012 3,477 (13.4) and operating profit of £7.5 million and £3.6 million respectively, Sunday Mirror 1,127 1,216 (7.3) 3,750 3,840 (2.3) thereby distorting the year on year revenue and profit performance of the division. Excluding the additional week’s trading in 2009, revenue The People 524 574 (8.7) 1,264 1,413 (10.5) has fallen by a reduced 5.0% and operating profit has risen by an Daily Recordc 296 315 (6.0) 909 1,050 (13.4) increased 7.6%. Sunday Mailc 360 389 (7.5) 1,131 1,201 (5.8) Digital revenues have declined by £0.1 million from £4.8 million to £4.7 million reflecting a decline in bingo revenues which has been a Average circulation for the 12 months to December 2010 and December 2009. b NRS 12 months to September 2010 and September 2009. almost fully offset by growth in other digital revenues. Audience reach c Within Scottish market only. continues to grow, with average monthly unique users growing by 21% year on year to 10.7 million per month. Other revenues Other revenue declined by 5.6% from £60.7 million to £57.3 million Revenue by type reflecting the impact of contract print revenue previously charged to The revenues by type in the Nationals division are as follows: GMG Regional Media which is now classified as internal charges. 2010 2009 Variance Excluding all charges to GMG Regional Media for 2009 and in 2010 £m £m % prior to the acquisition, other revenues increased by 3.9% due to new third-party contract print revenues. Advertising 128.8 132.9 (3.1) Circulation 244.2 266.8 (8.5) Central Other 57.3 60.7 (5.6) Central includes costs not allocated to the operational divisions Total revenue 430.3 460.4 (6.5) and the share of results of associates. The result for the year was a loss of £14.5 million compared to £14.1 million in the prior year. Costs not allocated to the operational divisions increased marginally Total revenue comprises advertising (29.9%), circulation (56.8%) and by £0.6 million from £14.6 million to £15.2 million and the share of other (13.3%). All revenue categories have declined during the year. results of associates increased by £0.2 million from £0.5 million Both advertising and circulation revenues have declined due to the to £0.7 million. fragile economic conditions. The advertising is much improved on the 7.8% decline experienced in 2009 while circulation has deteriorated from the 0.5% decline last year.

Advertising revenues Nationals advertising revenue decreased by 3.1% from £132.9 million to £128.8 million. The year on year trend in advertising revenues improved materially during the first half of 2010, with revenues growing by 2.2% compared to declines of 14.4% in the first half of 2009. However, we experienced declines in advertising revenue of 7.8% in the second half due to a weaker advertising market, the severe weather conditions in December 2010 and the additional week of trading in 2009. Adjusting for the extra week of trading in 2009, advertising revenues in the second half fell by 4.7% and for the full year by a much reduced 1.4%. The advertising performance across the year reflects a strong performance from the UK Nationals titles, partially offset by a weaker performance by the Scottish Nationals titles which have a higher proportion of the more cyclical classified advertising revenues. directl £13.0 million

Deferred tax assets tax Deferred t T Investment in associates a P A andLand building P of d t by increased have titles and rights Publishing Goodwil Customer relationshi P I assets Net li current net and liabilities Non-current N Provisions liabilities Deferred tax R M C I P I Balance sheet decreased bydecreased £0.9 million from £6.3 million to £5.4 million reflectin char part of GMG Re GMG part of Short-term debt D Intan R Pro Plant and equipment N ntang nvestment nvestment he he acquisition of ntan a nd a reclassification of £0.9 million being higher than additions o he carryin oma roperty, p roperty, u ssets un ssets ro ro et e e ash and cash equivalents cash and ash e o e £ bili bli tir riv t di n- i p p 6.0 million. rement rement p p cu g e ert s um-term a rofit of £0.7 b million offset ert ert cu e of £33.9 million (2009: £36.8 million), disposals of £1.4 million g gibl m t i y hi ibl tiv n names n names rr i to e ible assets es y ng r e e l e assets e rr , y y nt nt fin p , , d e assets e pl pl lant and e and lant l g er construct er q ant an b be i i nt o n assoc g value of our 21.54% share in the PA Group Limited has 21.54% ofour has value PA the Limited in Group share a uit ene ( th ant an ant an h 2009: £14.0 million n n d asse ts an c e y e e h g . i r li fi fit a b ave re ional Media of £10.3 million G t o d l in s t ab asse equ M d i t d d bli ate s p s t q iliti G e e tr s and domain names domain s and i ui gat t d Re u l es i s e i q q t on p pmen uce s m s u u ment has decreased due to de the due decreased has ment i o e g ip ip n nt ional Media. d men men

s t b y y amort ) actuarialof losses £1.6 million taken and the ac the and t t i sat C ustomer relationships and i on c q . uisition of assets as as ofassets uisition £ 30.0 million reflecting h arge 1 d ( ( ( ( ( ,503.1 1 969 88 41 969 41 679.6 11 2 823.5 318.3 222.1 226.1 140.0

( ( i 09 9 7 12. 4 6 18.7 14.5 n t 2 20 2010 0 3 7. 4. 7 7. 6 5 0 3.8 1.1 0 £ £ £m 1 1 . . . . .4 . . . . h m m 0 5 9 5 6 8 2 3 6 9 3 8 0 0 e per ) ) ) ) ) ) ) p 1, reciation ( ( ( ( 969.6 318.8 296.6 357.9 458.8 4 9 4 211.3 202.0 9 8 4 ( ( i 37.1 17.3 6 23.2 8 45.9 2 4 7 1 57. 89.2 o f 2 2009 2 ( g

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.2 . . . m 9 9 6 8 – – ) ) ) ) ) ) terminated prior to maturity, decreased by £58.1 million from through cross-currency interest rate swaps with the same maturity same the with rate swaps interest cross-currency through The US the loan notes loan the substantially throu U US$602 million and £32 million. In October 2008, million US$80 f O N N C A N ( P N £ l N R a ( p C C m p i p i a n a c £ N N C I i C i C Sterlin US astatutor on debt, net The £ a R £ sterling Libor plus a margin. The key financial covenants for the U the for covenants key financial The amargin. plus Libor sterling sterling amount of the US the sterling amount of The total sterlin The nto ster to maturity hedged are notes loan US$ the on repayments nterest nc ncluded in liabilitie oan notes and the cross-currency interest rate swaps are not are rate swaps interest cross-currency the and notes oan excluding items non-recurring excluding items), non-recurring net capitalexpenditure of £11.5 million nterest rate swap nterest unded through the US private placement markets. A repayment o Arepayment markets. placement private US the through unded sset of sset of ross-currency interest rates swaps at the period end was anet was end period atthe swaps rates interest ross-currency re £69.7 million in June 2012 nd the cash consideration of consideration cash the nd nd 145.4 million is due in October 2011 and is ex 44.2 million in June 2014 and £68.3 million in June 2017 otes was otes was 324.0 million to £265.9 million during the year as follows: 299.8 million to ayments in excess of the income statement char statement income ofthe excess in ayments rivate interest US$ fixed with notes loan the as rofile ension funding in excess of the income statement charge statement income ofthe excess in funding ension cquisition of e e S ash flow was positive during the year after pension funding funding pension after year the during positive was flow ash ash and cash equivalent cash and ash ross-currenc rate swaps interest ross-currency et other cash inflow cash et other expenditure et capital placement private the that assuming basis, acontracted on et debt, et debt, on astatutor on et debt, or n a contracted basis, the Grou the basis, n acontracted et et et ash flow and net deb net and flow ash ax p g l private placements issued durin issued placements private $ u p ional Media a denominated loan note loan denominated i £ d d d d mum oration tax and net interest interest net and tax oration y 6 million of these loan notes were repaid on their maturity date. e e e e g ments on the US US the on ments d p b b b denominated loan note loan denominated $ li £

lacements are a minimum interest cover of two times and times oftwo cover interest aminimum are lacements ng var and sterling denominated loan notes are part oftwo part are notes loan denominated sterling and t on acontracte t on acontracte t on t on a statutory astatutory t on i n assets 10.4 million d £ e 363.9 million b G . y t to i g a interest rate swa rate interest . M repayment was was repayment bl £ s G g s e 237.3 million. fair The value of the EBITDA h cash balances and cash cash and balances h cash Regional Medi i nterest rates payments payments rates nterest s ( 2009: 2009: y basis, decreased b decreased basis, p ( rivate $ 2009: 2009: s rat y b denominated and the sterling loan loan sterling the and denominated d d A Trinit t basis, is as follows as is basis, as s

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Financials Governance Business review Who we are Trinity Mirror plc 28 Annual Report & Accounts 2010

Business review

The contracted net debt repayment profile is as follows: The mortality assumptions applied in calculating liabilities are consistent with those adopted at 3 January 2010. The life expectancy 2010 2009 £m £m increases marginally over time as a 1% future improvement has been assumed in the mortality assumptions. The assumed life expectancy Repayment within one year 145.4 3.1 from age 65 for members aged 65 and 55 in 2010 is shown below:

Between two and five years 168.4 269.6 Future life expectancy Future life expectancy (years) at age 65 for After five years 68.3 112.5 (years) for a pensioner a non-pensioner Cash and cash equivalents (116.2) (61.2) currently aged 65 currently aged 55 Male Female Male Female Net debt on a contracted basis 265.9 324.0 At 2 January 2011 21.7 24.1 23.5 25.8 Net debt on a contracted basis is different to the statutory net debt At 3 January 2010 21.6 24.0 23.4 25.7 which includes the US$ denominated loan notes at the year end exchange rate and the related cross-currency interest rate swaps at The Group continues to fund pension scheme deficits in accordance fair value. with funding schedules agreed with the pension scheme trustees. The Group had no drawings as at 2 January 2011 on its Valuations are undertaken on a triennial basis. In 2008, the valuations £178.5 million committed bank facility which expires in June 2013. of all of the significant schemes, except the Trinity Retirement Benefit Net debt is expected to continue to fall further during 2011 and the Scheme, were completed. The Trinity Retirement Benefit Scheme Group continues to operate comfortably within the financial valuation has a valuation date of 30 June 2009 and was agreed in covenants attached to the Group’s financing facilities. the year. Pension payments in excess of the income statement charge (excluding non-recurring items) were £30.6 million At the year end, committed facilities of £560.6 million (2009: (2009: £16.6 million). The estimated deficit payments in 2011 £563.7 million) were available to the Group as set out below: are expected to be around £35 million. 2010 2009 £m £m Deferred tax assets and liabilities Bank facility 178.5 178.5 The deferred tax assets have fallen by £39.6 million from £83.4 million to £43.8 million primarily due to the fall in the retirement benefit US private placements 382.1 382.1 obligation included in liabilities. Interest rate swap – 3.1 Deferred tax liabilities have decreased by £0.5 million from Committed financial facilities 560.6 563.7 £318.8 million to £318.3 million primarily due to the restatement of the opening liability following the reduction in the corporation tax rate from Drawn facilities 382.1 385.2 28.0% to 27.0%, offset by deferred tax on acquisition of businesses. Undrawn facilities 178.5 178.5 Provisions Committed financial facilities 560.6 563.7 Provisions have decreased by £2.8 million from £17.3 million to £14.5 million due to the utilisation of restructuring provisions and Retirement benefit assets and obligation property provisions for vacant property partially offset by additional Retirement benefit assets of £61.1 million represents the surpluses charges during the year. before deferred tax in a number of the defined benefit pension schemes calculated in accordance with IAS 19. Net current other liabilities Net current other liabilities includes current assets excluding cash The Group closed all of its defined benefit pension schemes to future and cash equivalents less trade and other payables and current tax accrual on 31 March 2010. From 1 April 2010 a majority of the liabilities. Net current liabilities have reduced by £18.4 million from members of the defined benefit pension schemes joined the £37.1 million to £18.7 million reflecting a reduction in working capital Trinity Mirror Pension Plan, a defined contribution pension scheme. and current tax. The operating profit charge (excluding non-recurring items) in the year for defined benefit and defined contribution pension costs was Net assets £15.1 million (2009: £15.7 million). Included in non-recurring items is Total equity at the year end was £679.6 million, an increase of a loss of £0.4 million (2009: £9.9 million gain) in of the defined £190.4 million from £489.2 million. The increase reflects the benefit pension schemes. The pension finance charge in the year £190.8 million total comprehensive income for the period marginally was £7.1 million (2009: £10.5 million). We estimate there being a offset by £0.4 million of other movements. These comprise of a pension finance credit of £2.7 million in 2011. charge for the purchase of own shares of £3.5 million less a credit to equity for equity-settled share-based payments of £2.0 million and a The defined benefit pension deficits have fallen materially during refund of VAT on share issue costs of £1.1 million. the year by £135.6 million from £296.6 million to £161.0 million. This reflects the impact of an increase in assets of £126.0 million, The total comprehensive income for the period includes the profit a reduction in the asset ceiling of £11.6 million partially offsetting an for the period and the actuarial gains on the defined benefit increase in liabilities of £2.0 million. The increase in liabilities includes a pension schemes. £80.1 million benefit due to the government announced changes in state pension increases being linked to CPI instead of RPI which impacts most deferred pensions in the Group’s schemes. This was more than offset by the impact of a fall in the real discount rate from 2.20% to 1.95% due to a fall in the corporate bond rate only partially offset by a fall in inflation and other changes. o financial position to provide astron to provide

largest contract printer of newspapers in the UK. UK. the in ofnewspapers printer contract largest We ma We Circulation the continuing launch of new digital brands. and acquisitions through presence online our We strengthened have potential lon development pro the impact of media fra ofmedia impact the d in disru result could to Group the obligations their to meet unable were if they which newsprint) particular (in ofkey suppliers We anumber have i ad T A W T O a b G T M a mo and websites including brands ofonline development and launch titles. We continue to strive for growth in our digital by audiences the ofunprofitable disposal or closure the and publications enhanced o ofnew to launch the led has This portfolio. our reviewed have and brands print ofour profitability and value the maximise We will O T T uncertainties Risks and Ke management of the significant risks faced by the by the faced risks significant ofthe management t not overly reliant on any sin any on reliant overly not t across colour full giving presses colour in We invested have titles. our in ofinvestment levels appropriate and returns sustainable on focus offerin by service customer to improve technology state-of-the-art using functions advertising our in We investing are fragmentation. media leadership pro report on pagereport 44. governance Corporate ofthe section control internal the in described plans relies on the appropriate appropriate the on plans relies mpacte i h g nd structures, includin s contract pr s contract f he fra he loss of major clients or reduction in a sector may adversely affect affect adversely may asector in reduction or clients ofmajor loss he strate our implement and to execute ability he below: described are key risks he and evaluation identification, the for process ongoing an is here us epen dvertisin roup’s financial performance. We have reviewed all aspects of our ofour aspects all We reviewed have performance. roup’s financial ta e networ rganisation and peopl perationa e cont acro economy h vert y bil t management o t management i ness an l su ent. e s g i d s g y p increased flexibility such as online bookin online as such flexibility increased ency on spec i d ex ile economic environment may have an adverse effect on the the on effect adverse an have may environment economic ile pp ng, w i i tion. We use as Wetion. use nue to tes. tes.

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Financials Governance Business review Who we are Trinity Mirror plc 30 Annual Report & Accounts 2010

Business review

Financing and interest rate risk Employees Our exposure to interest rate risk is managed through the use of The commitment, innovation and drive of our staff are central to the interest rate swaps, options, caps and forward rate agreements. ongoing development and success of our business. Hedging transactions are undertaken after a review of the effect on profit after tax of a range of interest rate assumptions and During the year, the voluntary rate of employee turnover increased probabilities, determined by reference to the general economic year on year to 7.8% (2009: 6.8%). During the same period the climate and market forecasts for interest rates. retention rate, defined as employees in the Group’s employment for the full 12 months, remains stable at 88% from 89% in the Foreign currency risk previous year. Less than 2% of the Group’s turnover and operating costs are During the year the Group’s absenteeism rate, which follows the generated in currencies other than sterling. Given the minimal impact common definition used by the Advisory, Conciliation and Arbitration on profit after tax of fluctuations in foreign currencies, we trade foreign Service (ACAS), was an average of 1.9% (2009: 2.1%). This compares currencies at spot rates. The payment of interest and capital on favourably with the national average level of employee absence of borrowings denominated in foreign currencies is fully hedged through 3.4% (2009: 3.5%). (Source: CIPD Absence Management Survey cross-currency interest rate swaps. Whilst a substantial proportion of October 2010.) our newsprint supplies are sourced from outside the UK, the prices are agreed in sterling. The sterling prices are impacted to some extent The Group is committed to equality of opportunity in all its by foreign currency movements. employment practices to ensure we attract and retain the best people. In 2010, women made up 38% of staff (2009: 38%) and the Covenants risk number of women occupying senior managerial roles was 21% We seek to maintain standard terms for all our financial covenants (2009: 22%). where possible. Our covenants are monitored on an ongoing basis In response to trading conditions, the Group took the decision with formal testing of financial covenants at each reporting date. to freeze salaries throughout the Group in 2009. In 2010 senior The Company continues to comply with all borrowing and financial management salaries were again frozen, with staff below senior covenant obligations. management receiving an annual pay award. In addition to base salary all our employees have the opportunity to participate in performance related incentive schemes. For many staff this is through inclusion in the Group’s Employee Bonus scheme. We also provide a competitive range of benefits to employees, including the opportunity to join a Group-wide defined contribution pension scheme. We continue to introduce initiatives enabling staff greater flexibility in their work-life choices.

Environmental and social Our environmental and social policy and statement, together with a review of our performance during 2010, is set out in the Corporate responsibility report on pages 31 to 39.

Key operating trends and outlook The key operating trends and outlook can be found on page 17 of the Chairman and Chief Executive statement. undertaken overundertaken thelast year. a local charity here orthere.a local charity For Trinity Mirro volunteering activities orasmall donation to many companies use to describe their sta travelled. This has only been achieved throu achieved been only has This travelled. Environmental Award and the the Awardand Environmental underway to brin from 3 March 201 3 March strands of our Corporate Responsibility programme. programme. Responsibility Corporate ofour strands a and Board C S we maintained throu wefaced, that conditions trading tough the that, despite pleased I am Fi T requ a I the under accreditation to achieve weundertook year Last Ro the awarded wewere year second the for that pleased so I am ac C Executive’sChief statement report responsibility Corporate zero zero to a make to able is be aim our and too many one is injury any that

look at the atthe look staff they would have failed have would they staff standards. This comes after four successive successive four after comes This standards. we see itdi verification of real and sustained carbon use reduction use carbon sustained and ofreal verification independent leading –the Trust Standard Carbon the re-awarded Award across all our print sites. I am very happy to confirm that we we that to confirm happy very Iam sites. print our all across Award staff on the ground. Health and and Health ground. the on staff in this report that highlightsin this report onlysome o mind we have included anexpanded section communities that the nothing ifthey are not from andfor the brands both in print andonline. They are heart of thecompany andis thesoulheart of ou r chieved this l na hief Executive i y n ommunity engagement is aphraseommunity that S Baile i tiviti ty ll PA PA i d re y, y, G ec Mi d M i n 2010 we G

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m g h cat e 33 to see just how far we have already already wehave far how just toe 33 see ave some wayto go ave some . e h i on.

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T Annual Re r i n i ty Mi p rror p ort & Accounts 2010 &Accounts ort l c 31

Financials Governance Business review Who we are Trinity Mirror plc 32 Annual Report & Accounts 2010

Corporate responsibility report

Health and safety 2010 summary Group health and safety statistics The tables below provide statistics for occupational health and safety This was another very challenging year for the Group which resulted in 2010, with a comparison to the previous year. Analysis of the data in further reorganisation. Nevertheless health and safety standards reveals that there has been a further reduction in the total number of have been maintained and some considerable improvements accidents, including those reportable under RIDDOR. However, the were made. number of working days lost due to accidents has risen, pointing to Health and safety initiatives during 2010 a possible increase in severity. This represents a considerable challenge for 2011 when amongst other initiatives behavioural safety In pursuit of our goal of continuing improvement, the following programmes will be introduced to secure further improvement in our initiatives were taken during 2010: performance. Although there was little change in the total number of – A programme of internal and external health and safety audits was accidents involving slips and falls (same level) and materials handling carried out at our printing plants to ensure compliance with this year, more of the latter resulted in events reportable under legislation and with the international health and safety management RIDDOR. Consequently these items will remain priority areas for system specification OHSAS 18001. Scheduled departmental improvement in 2011. health and safety inspections also continued with follow-up action, where appropriate; Health and safety performance indicator 2010 2009 Fatalities 0 0 – Good standards of health and safety were maintained during major engineering and refurbishment projects at and Oldham. RIDDOR major injuries 4 2 Compliance inspections and audits were also carried out in the RIDDOR over 3 day injuries 12 16 newly acquired GMG Regional businesses comprising MEN Media, Chadderton, Surrey & Berkshire at Stoke Mill and the Reading RIDDOR occupational ill health/diseases/ printing plant; conditions 0 0 – Work to ensure compliance with HSE recommended standards for RIDDOR dangerous occurrences 0 0 the management of work-related stress continued with a further Total number of accidents 180 238 150 managers completing stress awareness training; RIDDOR events frequency rate† 0.15 0.13 – Further work was undertaken to update records of driver licensing and driving risk assessment. Those involved in driving on company All accidents frequency rate† 1.70 1.84 business were also issued with a new drivers handbook Total days lost – accidents and occupational incorporating road safety advice and guidance; ill-health‡ 437 368 – Liaison continued through the Group Health and Safety Risk (0.03) (0.02) Management Forum and the current policy covering home working was revised and updated; † Frequency Rate = number of accidents per 100,000 hours worked. ‡ Figure in brackets represents the percentage of total days worked by all employees in – The Group has continued its involvement with the HSE the Group. Printing Industry Advisory Committee and Newspaper Publishers Association; and RIDDOR All RIDDOR All accidents accidents accidents accidents – A review of the arrangements for occupational health was carried Breakdown of accidents by type 2010 2010 2009 2009 out and recommendations made for improvement in 2011. of event % % % % Slips and falls (same level) 25 28 23.5 20 Current targets for health and safety – 2011 onwards Lifting and handling of materials 44 9.5 17.5 10 To achieve our goal of continual improvement in 2011 the Group intends to: Contact with machinery 6 12 17.5 8 – Continue with our work to maintain compliance with OHSAS 18001 Falls from a height 6 3 12 3 and other management systems at all of our printing plants; Stepping on or striking – Provide our Health and Safety Managers with specialist training fixed object 0 11.5 0 16 in behavioural safety so that the benefits of introducing such a Struck by moving vehicle 0 2 0 1 programme can be explored; Contact with sharp/abrasive – Continue the system of internal regulatory compliance audits issuing material 0 13.5 0 19 reports with recommendations for improvement, where appropriate; Struck by flying or falling object 6 4 6 3.5 – Continue our involvement with the HSE Printing Industry Advisory Committee in an effort to improve health and safety in the Group Contact with and throughout the wider industry sector; hazardous substance 0 3 0 8.5 – Continue to develop new policies and procedures relating to the Contact with hot material/ management of work-related stress and safe driving; substance 0 3 6 3 – Maintain good health and safety standards in engineering and Object collapsing or overturning 0 0 0 0 construction projects that are planned for completion during the Use of hand tools 6 2 0 2.5 year; and Contact with electricity 0 0.5 0 0 – Continue to monitor health and safety developments, taking action to ensure compliance with new legislation and promoting further Others 7 8 17.5 5.5 improvement through the Group Health and Safety Risk Total 100 100 100 100 Management Forum. eac A – – – T E The Environment p C p T b T en RIDD Compliance 1 2 2 1,000 1,500 00 90 60 80 3 4 5 20 , 70 ,5 10 he safety and by health premises to our visits six were here has that improvement substantial the illustrate graphs following he rom rev een ma 000 5 ompany was meetin was ompany nv nnual workin nnual susta per systems including the B the including systems b th C A t C 0 0 0 f o meet or or o meet 00 00 orcement o us voiding pollution and improving the the improving and pollution voiding ontinually reviewing the sustainability of all products throughout throughout products ofall sustainability the reviewing ontinually continuing and legislation environmental relevant all with omplying h e supp W C Di 2 2 i C i ous two two ous case w 0 0 ombined total ronmenta f p or seases an i ormance t nesses; ompany is committed to: committed is ompany 0 0 O t ki 1 1 ly i na R re ng ta d bl e 2 2 l d y c k 0 0 e commo ays ays i en. n occupat 0 0 h i mprove upon ex p y 2 2 d ere t h ears. ffi con ortable eventsortable 2001–201 l a os h N cers i 2 2 n an l rou t g o en po 0 0 di h 0 0 days lost 2001–2010 e nee t Th 3 3 i ons gh i d n 2010, w li di g f i ese v en orcement act ona cy statement its statutory duties for health and safety and in in and safety and health for duties statutory its pro 2 2 t i 0 0 O es w d 0 0 S d ver 3da ver

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0 0 the potential to affect the environment, notably paper sourcin paper notably environment, the to affect potential the the Group’s environmental pro Group’sthe environmental the achievement of defined annual tar annual ofdefined achievement the susta to ensure t ensure to the environment and therefore takes careful measures to ensure it to ensure measures careful takes therefore and environment the on impact an have activities business its that recognises Group The the expectations of stakeholders and the needs of the business. ofthe needs the and ofstakeholders the expectations c e r S c m m key (ESC) comprises Committee Steering Environmental The m E – – C Th Th a B 3ofthe towards Phase M Th 2 A c i di e a i D o O a c o to ensure t to ensure – Measuring and reporting the consumption of Volatile Organic Organic ofVolatile consumption the reporting and Measuring – – the Environmental the Environmental nten ts corporate respons ts corporate e valuated during the coming year. The coming the during valuated c ga ontinued to pursue tar to pursue ontinued the via Committee to Executive the reports and ommunications ontracted printin ontracted nd ar nv 011, of awareness to reinforce ver the past five years. The Group’s policies are kept under review under kept are Group’s The policies years. five past the ver r new proce new ecretary and and ecretary uring 2010,uring the om nvironmental mana nvironmental g ur efforts to implement environmental policy commitments, through through commitments, policy environmental to implement efforts ur Working with our suppliers to ensure wood fibre for newsprint newsprint for fibre wood to ensure suppliers our with Working and where possible reducing energy consumption; consumption; energy reducing possible where and business ofthe consumption energy the reporting and Measuring g Recyclin w C r m c l ana anages an embers with specific day-to-day responsibility for environmental for responsibility day-to-day specific with embers anchester Evenin g evant evant hi e reporte no were ere pu e core ecycled materials or wood from certified sustainable forests; forests; sustainable certified from wood or ecycled materials i omes b eneral waste to waste landfill. eneral anic compound emissions from print works and the purchase of of purchase the and works print from emissions compound anic ta i ompounds (VOCs) throughout the Group and substituting these these substituting and Group the throughout (VOCs) ompounds ith alternatives wherever possible; and possible; wherever alternatives ith i inimum of 75% newsprint manufactured from fibre usin fibre from of75% manufactured inimum newsprint ronmenta eve t nst a f p on d p u l i g me erformance. The recommendations of this review will be full be will review ofthis recommendations The erformance. na s to wor ll an ement, le vers f ootpr bl i ssues an y hi ll f di o ’s website ’s rom we rom e g s h h a pro all non-hazardous press waste and strivin and waste press non-hazardous all f i at t at f bli by on o t orestry, waste management an management waste orestry, d d h i l m management systems an systems management nt o ure k s i t G t rema ese areas areas ese h w hi h ey are ey are g i roup Legal Director. E The Legal roup d f n ng s C e en our our g al, health and safety, procurement and safety, procurement and health al, ll i d f f ucts a ucts i t -manage suc or m S h and product distribution services. Performance services. distribution product and ompany commissioned an independent review of of review independent an commissioned ompany

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Financials Governance Business review Who we are Trinity Mirror plc 34 Annual Report & Accounts 2010

Corporate responsibility report

The Company has set the following environmental Quantity generated targets for 2011 onwards: % – Achieve certification to Phase 3 of the BS 8555 environmental Waste stream Treatment recycled 2010 2009 management system standard at its major office locations in Aluminium Re-melted and 100 987,942 kg 878,682 kg Birmingham, Cardiff, Central Quay, Chadderton, Glasgow, plates re-used as pure Hamilton, Liverpool, London, Middlesborough and Newcastle by metal of 2011; Solvents Solids separation by 100 758,530 1,044,537 – Maintain ISO14001 certification at the following print plants: (Blanket gravity, liquid fraction litres litres Birmingham, Blantyre, Cardiff, Cardonald, Newcastle, Oldham, wash) used as low grade Teesside, Watford; fuel – Review existing environmental management systems at Reading CTP pH adjustment and 95 322,020 357,495 print plant; developer biodigestion litres litres – Continue to use a minimum of 75% newsprint manufactured from Ink Solids separation by 100 24,758 kg 35,575 kg fibre using recycled materials or wood from certified sustainable gravity, liquid fraction forests; used as low grade – Continue to recycle 100% of all non-hazardous waste fuel (paper, cores and reel-ends); Fountain Solids separation 80 5,800 13,540 – Strive to achieve nil general waste to landfill; solution and biodigestion litres litres – Replace all HCFC gases held in refrigeration equipment by the Mineral oil Solids separation by 100 23,870 19,220 end of 2011; gravity, liquid fraction litres litres used as low grade – Review water consumption at all major sites during 2011; and fuel – Reduce group grid electricity consumption by 2% by the end of 2012. Our redundant IT equipment was handled through our continuing relationship with Remploy disabled persons workshops where 87% Paper sourcing and sustainable forestry of IT equipment was recycled and the remaining 13% otherwise The paper used by the Company for newsprint originates from a reused thereby ensuring none of this equipment ends up in mixture of recycled and virgin fibres. As paper is recycled, the quality landfill sites. of the paper fibre deteriorates. It is necessary to introduce virgin fibres to the mix in order to produce paper of the requisite quality. The virgin Volatile Organic Compound emissions (VOCs) fibres come from softwood (conifers) not hardwood sources and as The emission of VOCs (mostly solvent vapours from inks, fountains such do not contribute to the deforestation of rainforests. and blanket washes) has historically been one of the key The Company maintains a clear policy commitment to maximise the environmental concerns associated with printing operations and newsprint that is produced from recycled fibre, or fibre from forests continues to be a main criterion in the statutory regulation of print that have been independently certified as sustainable. Sustainable works. The availability of new equipment and technologies, using forests work to a careful management plan which balances extraction water-based chemicals, now offers the printing industry significant with replanting. In 2010, we sourced 89% of newsprint from recycled opportunities for reducing VOC emissions. Trinity Mirror Printing has fibre or certified fibre, against our current target of 75%. taken advantage of these developments and by adopting new technology and best practice, our print sites have now reduced consumption of VOCs to a very low level relative to our production % recycled or certified newsprint output. The use of VOCs will continue to be reviewed and reduced where possible. 2008 87 VOCs (kgs per million pages) 2009 87 2008 0.19 2010 89 2009 0.19 0 20 40 60 Target 75 100 2010 0.19 Waste management and recycling 0 0.04 0.08 0.12 0.16 0.2 The Company strives to ensure that, wherever possible, waste materials (including hazardous wastes) generated by our press Refrigerant gases operations are recycled or otherwise beneficially re-used and that the amount of waste sent to landfill is minimised. Trinity Mirror’s programme to replace ozone-depleting HCFC refrigerant gases, across all press and office locations, has continued During 2010, the Company has continued to recycle 100% of paper to move forward. We remain on track to meet our target of replacing wastes comprising reel ends, cores and printed waste. We have also, all HCFCs at major press and publishing locations by the end of 2011. by working closely with our main contractor, achieved 80 – 100% recycling rates for the more difficult press wastes that we generate Water consumption including aluminium plates, blanket wash, CTP developer, fountain The water consumption of the Group’s ‘core’ sites during 2010 was solutions and waste oil. Where these products cannot be recycled we 102,000 cubic metres (2009: 138,000 cubic metres). Throughout ensure that they are safely and responsibly disposed of through an 2011, the Company will review water consumption across its sites, approved and regulated contractor. Treatment routes and recycling recognising that responsible management of water is an essential rates for our major press wastes in 2010 are summarised in the component of an effective environmental management programme. table below:

capital projects and and projects capital all Trinit 6 5 4 3 2 1 Business travel pr Total V G El B company vehicles B SCO 93 premises) Trinity Mirror (all use electricity Grid SCO owned vehicles Commercial vehicles p R O p Gas combustion (heatin SCO a f Ag ev data first ofthe submission including place, in well are scheme ofthe requirements updated the with complying fully for plans our Scheme to CRC the Energy Changes dioxide. Efficiency carbon to emit permits to have buy will users electricity major where trade’ scheme th in aparticipant as registered year, the Company the During years. five past the over measures reduction ofenergy programme arolling delivering in staff by our shown been has that commitment Go G T footprint carbon and consumption Energy consumption and associated carbon footprint is a key priority in the in akey is priority footprint carbon associated and consumption we w issues affectin issues Ener Ener Our print sites have worked hard to meet thei to meet hard worked have sites print Our Total Total becomin All numbers in italics are based on unaudited numbers provided by contractors. by provided numbers unaudited on based are italics in numbers All Compan for Factors Conversion GHG Defra/DECC’s the in provided guidance latest the from taken been have factors conversion GHG ocus S S E S Accountin cross the Group in order to identify further ener further to identify order in Group the cross e he Company recognises that climate change is one of the foremost ofthe one is change climate that recognises Company he remises remises remises efri usiness travel usiness travel as for contracted printin contracted for as roup’s environmental management programme. programme. management roup’s environmental il combustion (electricity ectr xc cope 3 covers other indirect cope 2 covers indirect direct all 1covers cope id i hi reemen nte v l ence pac e c u g g di PE PE PE 1 ill rnm l i i g e erant y Efficiency Schem y Efficiency n c G G n cont d g y i y consumption and associated C associated and y consumption g f ty roup per million pages o rou outpu ue Mirror re on our ma our on g g 3 2 were announced in the Government’s Spending Review and and Review Spending Government’s the in announced were ) e and Reportin and 2 f the first company to achieve re-certification to the re-certification to achieve company first the

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Financials Governance Business review Who we are Trinity Mirror plc 36 Annual Report & Accounts 2010

Corporate responsibility report

Environment and the Community This document should be read in conjunction with any specific code A number of Trinity Mirror businesses engage with the local issued to individual groups of employees (eg Financial Dealings by community to promote environmental education and awareness. Journalists) or any provisions of individual contracts of employment. One such example is Go Green, run by with the The policy itself is available on the Company’s website and gives support of Welsh Assembly Government, the Carbon Trust, the guidance on conflicts of interest, the acceptance of gifts and Energy Saving Trust, The Open University, the University of Wales and entertainment, confidential information, insider information, and other local and national businesses. Go Green provides information political and civic activities. for greener living for individuals and businesses as well as providing a valuable source of local and global environmental news. Go Green The Company is currently reviewing all applicable policies ahead of will continue to report on environmental issues throughout 2011 with the enactment of the Bribery Act 2010 which, at the time of writing, a focus on the Top 10 environmental issues affecting us all. has been delayed pending the publication of guidance by the Ministry of Justice. Further information: www.walesonline.co.uk/go-green/ Mirror Go Green, working in partnership with ShP Limited, continues Charity donations to promote recycling by its readers, a trade in scheme for unwanted electronic equipment such as: mobile phones, laptops, MP3 players The Company’s policy with regard to charitable donations and other and car satellite navigation systems which are restored and sold on to such payments is as follows: developing markets, thereby diverting it from landfill. ‘Trinity Mirror believes that it can best support charities through the Further information: www.mirrorgogreen.co.uk pages of its newspapers. This support will either be through appeals to readers for donations or through editorial content, describing the aims and activities of various charities. In every case the decision as to whether or not to support a charity appeal or whether to run editorial comment will be one for the editor of each newspaper. Trinity Mirror plc will make direct cash donations to charities in certain limited circumstances. The Company will, at a Group level, support various charities connected with or associated with the newspaper, printing or advertising industries. A second category of direct cash The Daily Mirror will celebrate 50 years of support and collaboration support will be to charities operating in the communities immediately with the World Wildlife Fund through a special feature reviewing the surrounding the Group’s offices and print sites. The charities that are last five decades of the Charity’s conservation efforts. likely to receive support are smaller community based charities where a modest donation will make a big impact. It is unlikely that a major Green 500 national charity that just happens to be based very close to one of our Trinity Mirror’s head office at and Trinity Mirror Printing offices would receive a donation. have signed up to the Mayor of London’s Green500 carbon emissions reduction programme and the Green500’s assessors There will be a further limited general pool of funds out of which have visited both Canary Wharf and Watford sites. London, along donations will be made to legitimate and supportable causes that fall with 70 other major cities worldwide, have pledged to reduce outside the above two criteria. There will, however, need in each case carbon emissions. The Green500 is made up of companies and to be a demonstrable business or commercial reason why such organisations with a significant presence in London. support should be given. Each of our regional newspaper companies have a small budget out of which they will make direct cash donations to charities working in the community in which the newspaper is Ethics based. Scottish Daily Record and Sunday Mail Limited will similarly For many years the Company has had a policy on Standards of make a number of donations to appropriate charities based in Business Conduct which we regularly review. The introduction to the Scotland. The National titles of the Daily Mirror, Sunday Mirror and current policy states: The People are most unlikely to make direct cash donations. They will do so only where they are asked to make a payment to a charity in ‘Trinity Mirror plc is one of the largest newspaper publishers in the UK lieu of a fee for an interview or some form of support. and a major UK plc. The continuing development and well-being of our business depends on all of us maintaining the highest standards Any corporate donations requested from the national titles are likely to of integrity and personal conduct in all matters which involve the be redirected to the Group, as the Company’s headquarters share Company. The Company recognises its obligations to those with the same office location as that of the national titles. whom it has dealings, namely its employees, shareholders, readers All Group donations need the prior agreement of the Secretary and and advertisers, suppliers and the communities in which its Group Legal Director. Any local business donations require the prior businesses operate. Its reputation is one of the most vital resources of agreement of the relevant Managing Director. In addition to cash the Company, and depends for its protection upon the honesty and donations, the Company is active in making donations in kind in the integrity of each and every one of us. This document gives guidance form of used computer equipment, furniture, books, etc. Through its on how the essential standards of integrity and conduct are to be community involvement programmes, the Company makes available maintained. It is not intended as a statement of new beliefs or the members of its staff for volunteering and mentoring programmes.’ creation of new rules of conduct. Rather, it is a reaffirmation of our continuing values and practices.’ with recipients ranging from inner city playgrounds to deprived playgrounds city inner from ranging recipients with to £2,000, £500 from ranging grants in out given were All proceeds Minister 120 presentations to 5,000 students. The project is bein is project The students. to 5,000 120 presentations Unites was was Unites to Liverpool of£20,000 League 2010,In Premier the from adonation years. two first its in £250,000 than more raised has charity the clubs, s Examiner journalist, aimed ateducatin aimed journalist, Examiner importance of bone marrow donation has been hailed an hailed been has donation marrow ofbone importance communities local oftheir fabric ofthe part simply are titles, regional and local our for particularly and, readers their of to lives the integral are wedo’. ‘what simply is newspapers it Our that is this for reason main The doing. weare ofwhat ourselves track

break the c the break Jones’ famil Rhys schoolboy ofmurdered support in together came city way the Unites’. by the Inspired ‘Liverpool charity official oftheir success the Blo ‘Baldy recogn p a a a Th Y v f f a ‘ by Adrian launched A scheme a a a T projects. local important, nonetheless but to Awards, small, Britain of Pride the as such events, national scale large from range Activities w so are Group the throughout programmes engagement Community fundraising and Campaigns engagement Community Birmin 2010 in the events included Fundraising groups. to community information for youn for information donation. His le His donation. undertaken in 2010 across the Group and provides an insight into the insight an provides and 2010 in Group the across undertaken em and 13 ofeducation aged out to are 25 who people young their for Local and re and Local In the North West, The Liver West, The North the In NH The Huddersfield Daily Examine Daily Huddersfield The on a nationwide basis after a successful pilot in and and Bristol in pilot asuccessful after basis anationwide on ra The Birmin Below are some examples from the wide range of fundraising and offundraising range wide the from examples some are Below times. challenging economically these given In the Midlands, the Birmin the Midlands, the In outstan ew mont un o y wareness campaigns carried out during 2010 by our local, regional 2010 regional during local, out by our carried campaigns wareness cross Merseyside that positively en bility of communities to pull together, which is all the more impressive impressive more the all is together, to pull which ofcommunities bility nd youn to people young help that Merseyside across groups community nd campai aLifesaver’ Be nd n or his report provides a snapshot of some of the numerous activities activities numerous ofthe ofsome asnapshot provides report his ensioners’ club da id i mbol, a mix of the red and blue of the cit ofthe blue and red ofthe amix mbol, se l d unteers to e di p k S esprea nat s lo Blood and Transplant, was established after Adrian secured secured Adrian after Transplant, established was and Blood Li ng f hi un y g verpoo i re ment. The Liver The ment. se an i ham Mail Fun Run and the Santa Dash in December. December. in Dash Santa the and Fun Run Mail ham ona f di G d or ap or h g h s ng success ordon Brown. Adrian rose to public prominence as the the as prominence to public rose Adrian Brown. ordon gg d s o people. av y f g an l y rom rom t g cle of crime and and ofcrime cle , Liver er’ chartin iven to Fairbrid d i d i f ham Mail ng secure t

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Financials Governance Business review Who we are Trinity Mirror plc 38 Annual Report & Accounts 2010

Corporate responsibility report

Trinity Mirror Southern titles in the fifties and sixties. The Sunday Mirror continued to fight for A number of Trinity Mirror Southern titles (Surrey Herald Series, Ealing the 3,000 surviving veterans and their families whose lives have Gazette Series, Series, Hounslow Chronicle Series been blighted with cancers, bone deformities and birth defects in and Staines News) partnered with Barclays Bank for a fifth year to run their children. the ‘Let’s Do It’ Community Awards across their titles. Barclays put up a prize fund across the titles to be awarded to local groups and The People charities to help them with community projects and events. The People raised awareness through their Fuel Poverty campaign by urging the Work and Pensions Department to pass on details The Ealing Gazette ran their ‘Pride in Our People’ Community Awards to major power suppliers of those entitled to pension credits. As a in partnership with Thames Valley University to honour the unsung result of this campaign, the big six energy companies agreed to heroes across the boroughs of Ealing and Fulham and Hammersmith. a £20 million deal giving 250,000 pensioner households rebates on electricity. The Pride of Reading awards have gone from strength to strength Similarly, The People was highly instrumental in persuading the since they began seven years ago. Hosted by Reading-born Ministry of Defence to ensure that military ID can be used by troops Chris Tarrant, the awards recognise community stalwarts, cultural to prevent civilian ID such as passports or driving licences falling champions, creative businesses, restaurants and eateries, into the hands of rebel forces. environmental projects and more. Winners included a small Reading business which joined Google and in being the only The Scottish Daily Record and the Sunday Mail companies to do a multi-million pound deal to connect with Twitter’s The Scottish Daily Record and Sunday Mail supported Glasgow’s ‘firehose’, BG Group for Business in Action and the organiser of fourth annual Santa 5k Dash in January 2011. The fun run had been Reading’s gay Pride festival. scheduled to take place on 12 December but had to be postponed because of atrocious weather conditions. More than 3,000 people National titles dressed in Santa outfits to participate in a 5k around the streets of Glasgow. Daily Record staff participated, along with clients, local Daily Mirror celebrities and Santa Dash patrons, Kenny and Marina Dalglish. The Daily Mirror’s prestigious Pride of Britain Awards 2010 returned £45,000 was raised in aid of The Marina Dalglish Appeal which has for the 12th time in November. The glittering event has firmly supports Nordoff-Robbins Music Therapy, The Prince and Princess established itself as the most popular awards show on television. of Wales Hospice in Glasgow and the Marie Curie Hospice in Stobhill. Almost seven million ITV viewers tuned in to watch the emotionally Kenny Dalglish, who helps organise the race, said: “It was an amazing charged ceremony. The viewing figures were once again much higher sight seeing all the Santas running through Glasgow’s city centre on a than for the Brits and the Baftas. It also received huge coverage on quiet Sunday morning in January.” national and regional TV and radio, newspapers and glossy magazines. Prime Minister David Cameron said the awards “say so The Group’s titles believe they are nothing if they are not part of the many great things about our country. They demonstrate the decency community, in the community and for the community in which they of the British people.” are published. HRH The Prince of Wales paid tribute to the nation’s incredible Catch 22 unsung heroes. Children and adults who had performed acts of The Group continued its active support as co-sponsors of Catch 22, unbelievable courage, charity fundraisers, teachers, care workers, an initiative helping youngsters held back by a lack of qualifications or charity fund-raisers and members of the armed services were among work experience obtain the opportunities they deserve. In 2010 we those receiving awards. Sir David Jason even flew to Afghanistan to gave 12 students work experience in our regional business in our present a bomb disposal squad with their award. Footage of the visit Southern region offices and on the Daily Mirror. Further information was screened at the ceremony – which was sponsored by of the initiative can be found at www.catch-22.org.uk. Littlewoods.com for the first time. The Daily Mirror Youth Achievers Ball celebrated the achievements of Employee volunteering marginalised teenagers in Northern Ireland. The black tie ball pays The employee volunteering policy is to support those members of tribute to young people who have lived through trauma and staff across the group who want to – or already do – take part in challenges most adults would baulk at, from health to caring voluntary activities in our local communities. We acknowledge that responsibilities, poverty to abuse. Despite this, these youngsters work voluntary work with deserving good causes and initiatives is one of to make a real difference to their community. The ball at Parliament the most direct ways that we can engage with the community on a Buildings, Stormont – which was held for the third year – recognised local level, and we hope this policy will further strengthen our their efforts. connections with the communities in which we operate. The Daily Mirror also became Age UK’s media partner in its Spread The Warmth campaign. The charity – formed after the merger of Age Concern and Help The Aged – worked with the Daily Mirror to reduce the number of preventable winter deaths and to help more that 350,000 older people live safer, healthier and more fulfilling lives.

The Sunday Mirror The Sunday Mirror continued its long-running campaign for Britain’s forgotten nuclear test veterans. More than 20,000 servicemen witnessed hundreds of atom tests in Australia, US and South Pacific reputat within the culture of the ofthe culture the within

exposure. The greatest exposure for the Group would, therefore, be be therefore, would, Group the for exposure greatest The exposure. ofenvironmental end sharp atthe or countries developing in operate our corporate soc corporate our respons 3 Le Group and Secretary Paul T T T a a I T opportunities Risks and emp ofrelevant training through and systems and standards ofits review aregular through is risks these manage and to control employs Group the that procedure The damage. ofreputational one be havin health and safety or ethical policies. It is unlikely that a failure in any o any in afailure that unlikely Itis policies. ethical or safety and health implementation of the Bribery Act 2010. Act Bribery ofthe implementation to proposed the prior policies applicable all reviewing currently these three areas would be catastrophic. The Group’s principal risks Group’s The principal catastrophic. be would areas three these the employer of choice for those enterin those for ofchoice employer the obvious commercial advanta are there that believe We also ofstaff. retention key the in be also will t proce nd uncertainties can be found on page 29. page on found be can uncertainties nd March 201 March he he would area this in Group’s exposure the that main believes Board he industry. ‘heavy’ in engaged it is nor amultinational not is Group he i s not, t C C l

oyees an oyees g Vicke ompany believes that opportunities in these areas are similarly similarly are areas these in opportunities that believes ompany ompany’s been made on an assessment, amon assessment, an on made been i ona d ibl h ura ere e company l . r l 1

s W f f a ore, expose d e il managers. ure t S b i tandards of Business e a li l respons eve t h . at G l g e h roup. As stated earlier, the the earlier, stated roup. As al Director d d at t to a to some o to some ibili g h es from bein ere are a are ere ty programmes. programmes. ty d omest f t d g h i C c vantages to vantages our industry, that decision decision that industry, our e r onduct are embedded embedded are onduct f a g i il s seen as a socially asocially as seen ure o g k st many other thin s f Th ace f

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Mirror R e p ort ort & p

lc A ccounts 2010 39

Financials Governance Business review Who we are Trinity Mirror plc 40 Annual Report & Accounts 2010 Corporate governance

The Board is committed to maintaining high standards of corporate The Board meets regularly and a schedule of attendance is shown governance and recognises the importance of good corporate below in respect of all Board and committee meetings during the governance. Sound governance is central to achieving the directors’ year. prime objective of maximising shareholder value and comprises, principally, the processes by which the Group is directed and Table of attendance of meetings managed and how risks are identified and controlled. Audit & Risk Remuneration Nomination This statement, together with the Remuneration Report on page 47, Board Committee Committee Committee AGM the Audit & Risk Committee Report on page 43, the Nominations Committee Report on page 42 and the Directors’ Report set out on Sly Bailey 10/10 4/4 5/5 2/2 1/1 pages 53 to 55, describes how the Company has applied the relevant Sir Ian Gibson 10/10 4/4 5/5 2/2 1/1 principles of the June 2008 Combined Code on Corporate Governance as issued by the Financial Reporting Council (FRC Gary Hoffman 10/10 4/4 5/5 2/21/1 Combined Code). Jane Lighting 9/10 4/44/5 2/21/1 The FRC Combined Code was replaced by the UK Corporate Kathleen O’Donovan 9/10 4/44/5 2/2 1/1 Governance Code (UK Code) which applies to financial years beginning on or after 29 June 2010. The Board has reviewed the Vijay Vaghela 10/10 4/4––1/1 content of the UK Code and has decided to adopt provision B.7.1 in Paul Vickers 10/10 4/4 5/5 – 1/1 respect of directors being subject to annual election by shareholders. Laura Wade-Gery 8/10 4/4 4/5 2/2 1/1 Each director will submit themselves for re-election by shareholders at the 2011 Annual General Meeting to be held on 12 May 2011. Where a director was unable to attend a meeting, they were provided The Board believes that the Company complied with all of the with all the papers and information relating to that meeting and were FRC Combined Code provisions during the financial year ended able to discuss issues with the Chairman and Chief Executive. 2 January 2011. In 2010, the Board was scheduled to meet eight times, additional time The role of the Board was spent reviewing strategy and governance. Additional Board meetings are called as required and in total the Board met 10 times The Board is responsible for promoting the long-term success of the during the year. The Board holds meetings in regional offices which Company and for providing leadership within a framework of prudent provides a valuable opportunity for the directors to further their and effective controls that enable risk to be assessed and managed understanding of the Group’s operations and key regions. and is accountable for the Group’s operations. Board meetings are structured to allow open discussion and all The Board has a formal schedule of matters reserved to it which directors participate in the discussion of strategy, trading, financial includes: performance and risk management. Board papers are circulated – The Group’s strategic plans; in sufficient time before a meeting to enable full and informed discussion. Members of the wider Executive Committee attend Board – Acquisitions or disposals; meetings by invitation and make presentations regularly. – Capital expenditure; – All financing matters; Committee membership The Board has agreed that all non-executive directors should serve – The annual budget and the review of operating and financial as members of the Audit & Risk, Nomination and Remuneration performance; committees. The Board believes that an increasing amount of work is – Annual and half year financial results, annual report and accounts undertaken by these committees and that a non-executive director and interim management statements; can only properly fulfil his or her responsibilities if they are present during committee meetings and are able to follow the detail of – Board, Company Secretary and Committee Chairman discussion and debate held at those meetings. Similarly the appointments; Chairman, in addition to chairing the Nomination Committee, is a full – Terms of reference for all Board Committees; member of the Remuneration Committee and attends meetings of the Audit & Risk Committee at the invitation of its chairman. – Directors’ conflicts of interest; and – Dividend policy. Chairman and Chief Executive Other specific responsibilities are delegated to Board committees, The roles of the Chairman and Chief Executive are separated and each of which has clear written terms of reference. The terms of their responsibilities are clearly established, set out in writing and reference for the Audit & Risk Committee, the Nomination Committee agreed by the Board. The Chairman is responsible for ensuring that and the Remuneration Committee are available on the Company’s the directors receive accurate, timely and clear information and website at www.trinitymirror.com/our-company/corporate-governance. cultivating a boardroom culture for honest and effective debate The Chief Executive is responsible for the day-to-day leadership, enabling constructive contribution of all the non-executive directors. operational and performance management of the Company within the strategy and plans agreed by the Board. This is implemented Directors through the executive directors, Executive Committee and the rest of There are currently eight directors: Chairman, Sir Ian Gibson; Chief the management team. Executive, Sly Bailey; Senior Independent Director, Gary Hoffman; two other executive directors; and three other non-executive directors. The directors’ biographies are set out on page 18 and illustrate the directors’ breadth of experience, which should ensure an effective Board to lead and direct the Group. without the executive directors bein directors executive the without Chairman and such ameetin such and Chairman t

qualifyin contracts which are similarly available for inspection at the re atthe inspection for available similarly are which contracts sen Annual General Meetin General Annual ofthe place atthe and hours business normal during Company of the Com to gain a deeper insight into the into the insight adeeper to gain Th d C Di new a a a A Training i T a ofthe services and to advice the access have directors All Company Secretary i T Meetin General Annual atthe by shareholders approved As insurance and indemnity Directors’ a T bein Chairman the without to meet directors non-executive the a y T T Th A During the year, the the During present at 2008, t 2008, Meeting General Annual atthe and office in the Notice ofMeeting. Notice the in included is information Further Meeting. General Annual forthcoming atthe re-election seek will directors all Code, UK ofthe provisions new ofthe support In years. three every once atleast re-election Code, UK Code, the Companies Act 2006 and related legislation. legislation. related and 2006 Act Companies the Code, UK Code, opportunity following their appointment and subsequently must see must subsequently and appointment their following opportunity first atthe by shareholders to reappointment subject is director every Articles, the and Code FRCCombined the with accordance In shareholders. ta ensur 2006. Act Companies of the o per Nomination Committee meets to consider whether his or he or his whether to consider meets Committee Nomination the term, initial oftheir end atthe by shareholders re-election n nsurance h ears an commitment to the role. to role. the commitment re provided with background reading about the the about reading background with re provided ppo re atthe inspection for available are which ppointment n nd f he liability officers’ and directors’ appropriate maintains Company he of letters have directors non-executive the and Chairman he ofthree term initial an for appointed are directors non-executive he by approved resolution by aspecial amended be may Articles he eve n assessment n assessment f ompany ppointment and retirement of directors retirement and ppointment

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The Board applied the Conflicts Policy throu Policy Conflicts the applied Board The The Wm Morrison Supermarkets plc. During the year, the Chairman was was year, the Chairman the During plc. Supermarkets Wm Morrison M e an as Vickers’s ofPaul roles effect the considered has Board The d i n C B G r L a h o date atthe independent was Chairman the that believes Board The i are directors non-executive its all that believes Board The Director independence a necessary if advice professional independent take may directors The Independent advice a B g di u p Thi 2 e Th evaluation performance Board o B m I e c w r a C c i c p a adopted Board The Directors’ conflicts f a t sufficient time to the time sufficient the Board and its committees. Overall committees. its and Board the n ndependent n the matter.n the decidin In n addition to the availability of the Register of Conflicts at each Board Board ateach ofConflicts Register ofthe to availability the n addition u h esponsibilities. elevant procedures for authorisation of potential or actual conflicts actual or ofpotential authorisation for procedures elevant xecutive director and and director xecutive xternal appointment or any outside commercial interest commercial outside any or appointment xternal very third year. The last formal external evaluation took place in place took evaluation external formal year. last third The very t the t the ut ompromise to the independence of any director arisin director ofany to independence the ompromise on interest no have who directors by those authorisation for onsidered ppointed as a non-executive member of PricewaterhouseCoopers of PricewaterhouseCoopers member anon-executive as ppointed ppropriate procedures in place. enablin place in are procedures ppropriate ot believe that this former connection affects Mr Hoffman’s Mr affects connection former this that ot believe is other significant commitment, which is his Chairmanship o Chairmanship his is which commitment, significant is other LP – Public Interest Board. The Board believes that he devotes devotes he that believes Board The Board. Interest –Public LP sin 008 which was facilitated by Dr Tracy by Dr Lon facilitated was 008 which f his appointment. The The appointment. f his overnance review. The review covered the roles and processes of of processes and roles the covered review review. The overnance n a regular basis. basis. n aregular irect control rov erformance and that of its committees and individual directors by by directors individual and committees ofits that and erformance arc oar review and to monitor continue will oard d ompany has connections with Barclays, the the Barclays, with connections has ompany ompany and they may impose limits or conditions when giving when conditions or limits impose may they and ompany ere followed. The Board agrees that there is currently no currently is there that agrees Board The followed. ere scusse ary Hoffman was, until until was, Hoffman ary lfil ey cons eeting for review, an annual review has been conducted and the and conducted been has review review, annual for an eeting r e s year, t epen h Vi

fli g hi B C or id l d c ays an ays ct, t an internal questionnaire. The results were presented and presented were results The questionnaire. internal an s oar hairman reviews Mr Vickers’s performance re Vickers’s Mr performance reviews hairman an C es a es k i sat ers d ompany’s expense d d h ut d d ence g id i e non-con ata on or su

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Financials Governance Business review Who we are Trinity Mirror plc 42 Annual Report & Accounts 2010

Corporate governance

Shareholder communications Nomination Committee The Company encourages two way communication with both its The Nomination Committee is chaired by the Chairman. All the institutional and private investors and responds promptly to all queries non-executive directors and the Chief Executive are members. received orally or in writing. The Chief Executive and the Group The Committee meets as required to select and propose to the Finance Director meet regularly with analysts and institutional Board suitable candidates of appropriate calibre for appointment as shareholders. directors. The Committee would normally expect to use the services The Board receive regular detailed reports on investor relations of professional external headhunters to help in the search for and activities and any related issues concerning major shareholders. selection of candidates. Twice a year, the Investor Relations team produce a formal report for The Committee has due regard for the benefits of diversity on the the Board giving details of comment and feedback received from Board, including gender. The current composition of the Board analysts and institutional investors. reflects this. As part of the board evaluation process, the Committee continues to identify and develop short-term contingencies for The Company’s website is regularly updated and contains a wide ensuring the Company maintains an appropriate balance of skills range of information of interest to both institutional and private and experience. investors, including any announcements made by the Company to the as well as presentations of interim and The Committee has formal written terms of reference which are annual presentations made to analysts. published on the Company’s website. In addition, on notification of a new substantial shareholder in the Company, the Chairman will write to the shareholder to offer a Administration Committee meeting. The Chairman meets with major shareholders as requested. The Administration Committee consists of the Chief Executive, Group Finance Director and Secretary and Group Legal Director Audit & Risk Committee and meets as necessary to deal with administrative matters of a day-to-day nature. The Audit & Risk Committee is chaired by Kathleen O’Donovan. Gary Hoffman, Jane Lighting and Laura Wade-Gery are members. Accountability and audit operating and The Committee meets as required during the year to monitor, review and approve the internal audit plan, direct the internal audit function financial review and external auditors and to oversee the management of internal Through the reviews of the performance and financial position in financial controls and risk management systems. the Chairman and Chief Executive Statement on pages 12 to 17 and the Business review on pa The Audit & Risk Committee report on pages 43 to 45 contains a ges 20 to 30 together with the Directors’ report on pa more detailed description of the Committees’ role, responsibilities, ges 53 to 55, the Board seeks to present a balanced an activities and effectiveness during the year. d understandable assessment of our position and prospects. The directors’ responsibility for the financial statements is set out The Group Finance Director, other directors, the Group’s external on page 55. auditors, internal auditors and other management, as appropriate, attend meetings of the Committee. Corporate governance compliance statement The Committee has formal written terms of reference which are The Company has complied throughout the financial year with the published on the Company’s website. provisions set out in the FRC Combined Code. Remuneration Committee The Remuneration Committee is chaired by Jane Lighting. Other members of the Committee are; Sir Ian Gibson, Kathleen O’Donovan, Gary Hoffman and Laura Wade-Gery. The Committee meets as required during the year to review the Company’s general policy on executive remuneration, the application of the policy to the remuneration and benefits of the executive directors, and to recommend and monitor the level and structure of remuneration for senior management. The Remuneration report on pages 47 to 52 contains a more detailed description of the Company’s policies and procedures for executive remuneration. During the year, as appropriate, the Chief Executive and the Secretary and Group Legal Director have attended meetings of the Committee but they do not participate in discussions on their own remuneration. The Committee has formal written terms of reference which are published on the Company’s website. consolidated financial statements financial consolidated existence for the foreseeable future. Accordingly, they continue to to continue they Accordingly, future. foreseeable the for existence operational in to continue resources adequate have Group the

3 S P a T – – – – – – – T fi the whether determining in and Rules, 9.8.6(3) LR Listing ofthe with accordance In basis concern Going in particular notes 25, notes 26, 27 34. and in particular statements, financial to consolidated notes the the in 20 to and 30 12 pages on to 17, statement pages on Executive review Business the Chief and Chairman the in out set are These activities. business to its relating uncertainties and risks the and facilities borrowing factors likely to affect its future development, performance and its its and performance development, future its to affect likely factors all considered directors the basis, concern a going on prepared next 12 months. the during facilities its renegotiate or to to have refinance expect not does Group The future. foreseeable the for facilities financing Group Grou the that satisfied are directors the sensitivities, downside including Group’s the businesses, impacting factors the all considered Having nanc dopt the going concern basis in preparing the the preparing in basis concern going the dopt March 201 March he directors have a reasonable ex areasonable have directors he follows as were directors by the considered key factors he ecretary and and ecretary au hi prov end had undrawn facilities of facilities undrawn had end mar 2 h T f a Th b T t T bein T G Th a f i T projections of trading and cash flows on a regular basis. Whilst this this Whilst basis. aregular on flows cash and oftrading projections and forecasts undertakes Group The profits. and Group’s revenues meet day-to-day workin is committed to June 2013 to June drawin and is committed s essent or management to improve performance and mitigate the possible the mitigate and performance to improve management or lows are protected; an protected; are lows heir obli 4 hours’ notice. dverse impact ofadeterioratin impact dverse re worse than expected, to ensure that operatin that to ensure expected, than re worse as access to over access as he committed finance facilities available to the available facilities finance committed he fra continued he bein ofkey customers business our on impact he ofkey suppliers business our on impact he the on environment economic challenging ofthe implications he us g roup’s businesses operate. In particular, the Nationals operate in a a in operate Nationals the particular, In operate. roup’s businesses l Vi e potent e hly competitive marketplace characterised by hi characterised marketplace competitive hly p i k i ness; g i id will be able to o able be will a mpact o et unable to meet their obli their to meet unable l c pos e pro i k ng expen g e i a ations for services provided by the by the provided services for ations r l i 1 G s

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ocus ocus ) – Jane Lighting and Laura Wade- Laura and Lighting Jane The website and the Com the and website The th – Monitor and review the external auditor’s independence, objectivity objectivity auditor’s independence, external the review and Monitor – a The Grou d P E p c o b i a i G C ( Y K a G O’Donovan. by Kathleen chaired is Committee &Risk Audit The report Committee &Risk Audit – – – – – – – – – i C C a h a r D satisfied that the a the that satisfied The Committee’s Committee’s The The Committee has identified its Chairman, Kathleen O’Donovan, O’Donovan, Kathleen Chairman, its identified has Committee The s the former former s the m ndustry having spent 26 years with the Barclays group. He was He group. Barclays the with 26 years spent having ndustry subsequently Invensys). She has been Chairman of the Audit ofthe Chairman been has Invensys). She subsequently eviewed the composition and balance of the ofthe balance and composition the eviewed u uthorisation for obtainin s its primary member with recent and relevant financial experience. financial relevant and recent with member primary s its ommercial experience. Jane was Chief Executive of both Flextech ofboth Executive Chief was Jane experience. ommercial ppointed re available to effectively fulfil the accountin the fulfil to effectively re available oung. as to a n 1 May 2011.n 1May irector of multi-channel E-commerce at Marks and and atMarks E-commerce ofmulti-channel irector lc and of the television com television ofthe and lc een appointed Chief Executive of NBNK Investments plc, effective plc, Investments ofNBNK Executive Chief appointed een ersonal Finance xecutive ofTesco.com Januar xecutive in athleen is a Chartered Accountant and was a partner at Ernst & & atErnst apartner was and Accountant aChartered is athleen urin ommittee of a number of public companies ofpublic ofanumber ommittee om ompany’s expense. ary Hoffman also has extensive experience of the financial services financial ofthe experience extensive has also Hoffman ary members. are Wade-Gery Laura and Lighting Jane ary Hoffman, e an an and Audit who is responsible for internal audit (with the agreement agreement the (with audit internal for responsible is who Audit and sens C o App R m e R M m R whi R e D R R c r r m i inte the Monitor an nc p di eturns to re eturns financial significant reviewing performance, to financial its elating xterna

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Financials Governance Business review Who we are Trinity Mirror plc 44 Annual Report & Accounts 2010

Corporate governance

The Committee receives any required information from management The Committee is satisfied that there are no relationships (such as in a timely manner and in formats which are comprehensible and family, employment, investment, financial or business) between the sufficient to fulfil its responsibilities to shareholders and investors alike. auditor and the Company (other than in the ordinary course of business). The Committee monitors and reviews the effectiveness of internal audit activities, internal controls and risk management systems. The Private meetings were held with Deloitte LLP to ensure there were no Committee has considered that the appropriate systems are in place, restrictions on the scope of their audit and to discuss any items that are adequate and are operating properly. The Committee has access the auditors did not wish to raise with the executive directors present. to a risk map which details a description of the risks, an assessment The Committee reviewed and agreed the engagement letter from of the impact on the business, probability of occurrence, Deloitte LLP confirming their independence and objectivity. It also management accountability, applicable policies, sources of reviewed the scope of non-audit services provided by Deloitte LLP assurance, risk factors and associated actions. It is a valuable source to ensure that there was no impairment of objectivity. of information for reference and is regularly reviewed. The Committee is satisfied that the level of fees payable in respect During 2010, principal risks were identified, assessed and reviewed of audit services is appropriate for a group of its size and that an by impact and probability. Further information within this report under effective audit was conducted during 2010. Further details the headings Internal Controls and Risk Management. The principal concerning external audit fees can be found in note 6 to the risks and uncertainties facing the business can be found on pages consolidated financial statements. 29 and 30 under the heading ‘Risks and uncertainties’. During 2010, the following items were reviewed at the Audit & Risk Non-audit services Committee meetings: The Board has accepted the Committee’s recommendation on a policy on the engagement of the external auditors to supply non-audit – Reports and Financial Statements; services. The policy has been adopted by the Board and as a general – Tax, Treasury and Contingent Liabilities; rule the auditor will not be engaged to provide any additional – Internal Control and Risk Management; services other than tax or accountancy advice and circulation audits. – Review of External Auditors; There may, however, be circumstances where it could be in the – Risk Map; Company’s and shareholders’ interests if the auditor was engaged. – Internal Audit Plan; Such circumstances are likely to be relating to either exceptional – External Audit Plan; transactions or deemed not to be of a material nature. In all cases, the engagement of the auditor for non-audit work must be approved – Review of Accounting Standards Changes; and in advance by the Committee Chairman. – External Audit Fees. The Board undertook a review of the effectiveness of all its The internal audit function focuses on enhancing the Group’s internal Committees during the year, including the Committee, as part of the controls. It has a rolling programme of review which is approved by annual review related to Board performance as described above. the Committee. The Director of Risk and Audit is highly qualified and has extensive experience of working at a senior level in large companies. Internal control The directors are responsible for the Group’s established system of The Committee members are also members of the Remuneration internal control and for reviewing its effectiveness. During the year the Committee. The Committee believes that the Company’s Board has not been advised of any failings or weaknesses which remuneration policy is adequate for a group of this size and nature were deemed to be significant. No system of internal control can and that compensation policies and practices are appropriate for provide absolute assurance against material misstatement or loss. maintaining a robust control environment and do not put the Such a system is designed to provide the directors with reasonable Company at risk. assurance that problems are identified on a timely basis and dealt External auditors’ independence and with appropriately. The key procedures that have been established and designed to provide effective internal financial control are: non-audit work The Committee has primary responsibility for making Management and organisational structure recommendations on the appointment, reappointment and removal The existing organisational structure is considered appropriate to of the external auditors. the size of the Group. This clearly identifies levels of delegated responsibility to operational management. The performance of The Committee recommended the reappointment of Deloitte LLP senior management is regularly evaluated and individual employees’ as external auditors following the annual external audit effectiveness responsibilities are clearly defined and communicated. review where the Committee concluded that the audit was fit for purpose. Deloitte LLP audits all significant subsidiaries of the Group. Financial reporting The current overall tenure of Deloitte LLP dates from 1999. Any Part of the comprehensive management reporting discipline involves decision to open the external auditor to tender is taken on the the preparation of detailed annual budgets by all operating units. recommendation of the Committee based on the effectiveness review These budgets are reviewed by the Executive Committee and are described below. There are no contractual obligations that restrict the ultimately summarised and submitted to the Board for approval. Company’s choice of auditor. Weekly revenue and profit forecasts are received from all operating units followed by monthly management accounts, which are The external audit effectiveness review which was carried out by the prepared promptly and reported against the approved budget. Committee, with the help of the Director of Risk and Audit, dealt with Consolidated monthly management accounts, including detailed external auditor independence, planning, expertise and resources, profit analysis (with comparisons to budget, latest forecasts and prior audit process and communication. The review was in the form of an year together with a treasury report (including comparison to our extensive questionnaire which was sent to directors and senior financial covenants) are prepared providing relevant, reliable and up to managers across the Group. The results were analysed by the date financial and other information to the Board. Profit and cash flow Director of Risk and Audit and a full report was submitted for review forecasts for the current year are prepared and submitted to the by the Committee. There were no adverse findings. The report as a Board at quarterly intervals during the year. whole was discussed with the external auditors. A number of our key functions, including treasury, taxation, internal internal taxation, treasury, including key functions, ofour A number si within the within the expenditure capital for format aprescribed is There set. clearly to re reasonable assurance that internal control procedures are in place in are procedures control internal that assurance reasonable to provide auditors external the and department audit internal the management, from reports reviews Committee The rate risks. interest institutin

Director of Grou to detailed investment appraisal and performance of due dili ofdue performance and appraisal investment to detailed subject are and sub-committee, aBoard or Board by the controlled are investments or acquisitions corporate significant All forward. the above reports above the t Committee. which such expenditure requires the prior approval of the Capex Capex ofthe approval prior the requires expenditure such which Grou Th a i B I B f T a An on Risk management a L a F a a C W Investment appraisal t system o system procedures prior to approval by the Board. by the to approval prior procedures esta controlled centrall controlled Chief Executive, Group Finance Director or Secretary and Group Group and Secretary or Director Finance Group Executive, Chief these functions reports to the Board on are on to Board the reports functions these t and risk to unnecessary any exposed not weare that to ensure exist strategy or support for the expenditure and requires acomprehensive requires and expenditure the for support or strategy env nc n rev or h h h udit, risk management, litigation, IT strategy and development, development, and strategy IT litigation, management, risk udit, pplications which places a high emphasis on the overall Group Group overall the on emphasis a high places which pplications n n n bein case business ofthe appraisal financial justified nd e he process accords with the Turnbull Guidance on Internal Control Control Internal on Turnbull the Guidance with accords process he unct g oar oar ommittee, consisting of the three executive directors and the the and directors executive three ofthe consisting ommittee, at w e pos o e terms e g d d d e nificant risks we face has remained in place throu place in remained has we face risks nificant l di u i a t to up t are h ronmenta bli f g d d d’ rectors, as app as rectors, o l p h ave ac i

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Financials Governance Business review Who we are Trinity Mirror plc 46 Annual Report & Accounts 2010 Remuneration at a glance Key points in 2010 What are the component parts of reward? – third consecutive pay freeze for executive directors and senior Senior managers managers; Group and executive Reward element employees directors only – review of current share scheme arrangements; Fixed base salary ✓ ✓ – the employee bonus scheme which had a Group operating profit target saw payments of 80% of potential to each participant; and Benefits including pensions ✓ ✓ – senior managers and executive directors received bonus payments Variable annual bonus ✓ ✓ of up to 80% of potential for significant outperformance of Group Share awards ✗ ✓ operating profit targets.

Remuneration policy How has the structure changed year on year The Group aims to provide remuneration packages that comprise for executive directors? competitive fixed pay packages and variable pay which provides the potential for significant rewards related to performance aligned with 2010 reward the Group’s strategic objectives and shareholder interests. Base salary Held at 2008 levels

What are the principles of our remuneration policy? Annual cash No change to maximum % of base of 75% to bonus 110% for executive directors and 50% to 75% for Performance linked Executive Committee A significant part of executive directors’ reward is determined by the Group’s success. Failure to achieve threshold levels of performance Share awards LTIP award sizes reduced in 2010 and DSA results in no payout under short or long-term incentives. potential increased. Approximate value maintained. Should any new remuneration Shareholder aligned proposals be recommended they will be put to Aligned with the Group’s strategic objectives, a considerable part of shareholders at the 2011 AGM. the reward is related to share price performance and is paid in shares that have to be retained until minimum shareholding requirements have been met. What did executive directors receive in 2010?

Competitive Benefits excluding Annual cash bonus Total cash The Group aims to provide remuneration packages that reward pension and cash senior executives in relation to other relevant companies. Base salary contribution Potential Actual equivalents The Company seeks to balance the ‘package’ for senior £’000 £’000 £’000 £’000 £’000 executives between rewarding short and long-term performance. Sly Bailey 750 12 825 660 1,408 Who are our peer group companies? Vijay Vaghela430 11 430 344 785 In setting remuneration, the Remuneration Committee, with its Paul Vickers 375 25 281 225 625 advisers, currently reviews arrangements for other listed companies and companies of a broadly similar size. GdiGranted in 2010 Pension contributions Deferred Performance £’000 shares shares Sly Bailey 248 286,693 600,901 Vijay Vaghela 106 140,046 258,388 Paul Vickers 126 91,600 225,338

How are the rewards structured? The relative weighting of each of the key elements of executive director remuneration for 2010 (excluding pension and benefits) by fair value is included in the table below and discussed in greater detail in the remuneration report. Reward structure (%)

Sly Bailey 46 25 1387 16

Vijay Vaghela 49 25 13 13

Paul Vickers 54 20 11 15 0 20 40 60 75 100 Base salary Cash Bonus DSA LTIP pac remuneration executive ofthe balance the that ensures incentives share-based long-term and bonus cash annual from remuneration move the the move compr with consistent fully is policy remuneration the that to ensure objective meetin ensurin includin Wade-Gery. its principal external consultants. Followin consultants. external its principal Director. During 2010,Director. During the relation to other relevant com relevant to other relation in competitively by rewarding executives senior retain and motivate attract, that packages remuneration to is provide aim The interests. T a T policy Remuneration the within employees i a a T T B T governance. C T S T Committee Remuneration The Remuneration report During 2010,During the Board. A copy of the terms of reference are available on the on available are ofreference terms ofthe Acopy Board. by the approved ofreference terms formal with established been in any discussion of his remuneration remuneration of the Chairman (the Chairman does not participate the sets Committee The management. senior for remuneration of structure and level the monitors also Committee The directors. executive the for conditions employment and benefits remuneration, potent scheme linked to Grou linked scheme bonus annual an benefits, and salary annual basic are package with the interests of shareholders. The combined combined The ofshareholders. interests the with directors ofexecutive interests the aligning and policy remuneration ofthe aims the achieving in role aspecific has remuneration Kepler Associates were appointed with effect from from effect with appointed were Kepler Associates deliver s sens ligned with the the with ligned re appropriately reviewed and controlled. In addition, the the addition, In controlled. and reviewed re appropriately nd supportive of the main strate main ofthe supportive nd he Committee is a committee of the Board of Directors and has has and ofDirectors Board ofthe acommittee is Committee he he main com he he he appropriate the to determine authority has Committee he he Remuneration Committee consis ir Ian Ian ir oar ompany’s website www.trinitymirror.com k C C C d’ age ompany’s policy is to provide remuneration packages which packages remuneration to is provide ompany’s policy their to pursue continued have Board the and ommittee formal ofboth acombination with duties its fulfils ommittee i y i s g G a i se compet t g of shareholder value, and and value, ofshareholder g i l s and informal consultation with relevant parties internally, internally, parties relevant with consultation informal s and ve to t di

ibson, that potential risks arisin risks potential that the the f i or s s we G scuss roup further towards a performance culture, whilst whilst culture, aperformance towards further roup C i gn h i p g hief Executive and the the and Executive hief G e onents of each executive director’s remuneration executive ofeach onents i h G ifi on o ary Hoffman, Kathleen Kathleen Hoffman, ary C te l i cant rewar eve roup’s strategic objectives and shareholder shareholder and roup’s objectives strategic t ommittee met on five occasions i ve d towar f l remunerat G s o fi p xe roup when decidin when roup

p f t d rofit, share-based incentives linked to the to the linked incentives share-based rofit, C h d pay an pay ommittee reviewed the appointment of of appointment the reviewed ommittee e remunerat s d p s re ‘ anies. at r i on g g l i ate p s d ic objectives of the ofthe objectives ic from remuneration arran k’ ension. Each element o element Each ension. var i ssues ) d per . The . The S ts of Jane Lighting (Chairman), Lighting ts ofJane to per to ecretary and and ecretary i a i O on pac bl f g ormance pay ’Donovan and Laura g / a ‘beauty parade’, a‘beauty e pay w e pay C f our-company executive director pay or a ommittee leads the the leads ommittee f ormance w ll k sta ages o ages p hi otential otential . O ff c G ctober 2010. . h G roup Le roup prov . roup, and roup, and f ot / hi corporate C c h f g ommittee ommittee

id h e ements are r es t g al al h . e - This performance was a result of considerable restructuring – – restructuring ofconsiderable aresult was This performance t – tra salary for Sly Bailey, Va 100% Sly for Vijay for salary scheme with maximum the time that it was approved by the Board. The outturn operating outturn The Board. by the approved was it that time the C I c B salary annual Basic – – – – r D Committee activities b p p p b b G I p O p f The Grou bonus Annual V w i e w a I c c o e of a – – takes into account individual performance, experience and market and experience performance, individual into account takes satisfied that this level of bonus ofbonus level this that satisfied ncreases in 2011. in ncreases 2011 In n re n 2010, to reflect the immediate and short-term issues facin issues short-term n 2010, and immediate the to reflect n li or a number of senior executives including executive directors. This This directors. executive including executives ofsenior anumber or h emunerat xecutive directors requested that they did not receive salary salary receive not did they that requested directors xecutive or other and companies media listed atother xecutives dvisers to conduct an annual in-depth review of the competitiveness competitiveness ofthe review in-depth annual an to conduct dvisers reated by an over reliance on such comparative work. comparative such on reliance over by an reated ompet onsc nd principal risks and uncertainties faced by the by the faced uncertainties and risks principal nd f a broadly similar size. In considerin In size. similar f abroadly ayment of up to 80% of the maximum potential. The Committee is Committee The potential. tomaximum ofup the 80% ayment a uildin figure budget stretching highly the with profit operating udgeted rofit for 2010 of £123.3 million was a u bonuses cash annual for rovides er e ijay Va asic salaries are reviewed annually by the by the annually reviewed are salaries asic uring 2010, the Committee met to consider the following the to 2010,met consider uring Committee the ommittee, we continue to en wecontinue ommittee, as ta ill therefore remain at their 2008 levels, of: levels, 2008 attheir remain ill therefore roup, the executive directors’ bonus criteria were linked wholly to wholly linked were criteria bonus directors’ executive roup, the ther members of the Executive Committee participate in the the in participate Committee Executive ofthe members ther tota e or senior executives and all other staff; other all and executives senior and Deferred A o R A R R R R arrangements; y di i ng set s set ng g utstanding awards; and f pproval of 2009 remuneration report. Plan Term Long the Incentive under to made be ofawards pproval eview of status of performance conditions attaching to attaching conditions ofperformance ofstatus eview pay executive senior and director ofexecutive eview arrangements; incentive short-term –and oflong eview consultants remuneration ofexternal eview ev ments do not form form not do ments ormance re l ng env ht of the economic climate, the challen the climate, economic ht ofthe at i i i g ew o l g i ous o k remunerat on to t i g en not to not en on the work in 2009 – and was delivered despite atou despite delivered was –and 2009 in work the on i na t i hela veness. p i l on consensus mar consensus o i f i gn ronment

f b an p h est pract £ i ifi erates an annual ssues e sa 430,000 and Paul Vickers Vickers Paul and 430,000 cant l S d at i hare Award Plan; hare

i ncrease i k on ve to l een to avo een ar l . y : i i n compar es pa i n excess o n excess i p ce remunerat b p art ofart ot , otential of either 50% or 75%. 50% or ofeither These otential base salaries of the executive directors executive ofthe salaries base b h k id A Trinit ase sa et expectat

nnua b to execut to id p u g t p i ensionable salar d y p a son to execut son l

Mirror h erformance related bonus scheme bonus related erformance R g get an a f consensus mar consensus e e y e with the the e with l ar p ment is ‘ ort ort p ratc i i on po es g pp to a maximum of110% to amaximum ofbase g & p such data, the the data, such i

hela and 75% for Paul Vickers. 75% and Vickers. Paul hela for lc d ve A i ons an roximatel h f ccounts 2010 mar or 2010.or et £ di li 375,000 g ’ j C cy S ustified b e rectors an rectors in C ommittee. This review This ommittee. ly Bailey k i ff ve g ommittee’s principal et expectat ; f d ect t or execut tradin y. resu di y I G n a k 17% o excess in rectors an rectors . et expectat h roup, a decision at can at can y ddi l te g the excellent excellent the £ C d environment 750,000, d t ommittee is t g i h

ve i on, t i 47 anisations i n a e ons. b di E g d e xecut the the rectors, b h sen i ons at ons at onus g e h i o i f ve ve

r

Financials Governance Business review Who we are Trinity Mirror plc 48 Annual Report & Accounts 2010

Remuneration report

Following a review and recognising the challenges facing the Group, For the awards made in 2010, the vesting of the Performance Shares the executive directors’ bonuses for 2011 will continue to be linked will be determined by the Company’s three year Total Shareholder to Group operating profit. The targets themselves are not being Return (TSR) performance compared to a group of 14 other media disclosed at this stage for reasons of commercial sensitivity. 20% of companies listed below: potential will be payable for threshold performance, 50% of potential Aegis Group plc Moneysupermarket.com Group plc will be payable at target with 100% only payable at stretch. Payment British Sky Broadcasting plc Pearson plc of any bonus earned from profit performance is also dependent Daily Mail and General Trust plc Reed Elsevier plc upon the executive director having achieved a satisfactory level of Euromoney Institutional Investor plc Rightmove plc personal performance during the year in their performance and plc United Business Media plc development review. ITE Group plc WPP Group plc ITV plc Yell Group plc Deferred Share Award Plan (DSAP) An eligible employee may be granted an award of Deferred Shares To determine whether the performance condition has been met, the based on a percentage of their previous year’s gross bonus. These TSR of each of the companies will be measured. The companies will shares are held in trust. then be ranked, in descending order, according to their TSR, and the In 2010 each executive director received a grant of Deferred Shares performance shares will vest depending on the Company’s TSR equal in value to 40% of his or her 2009 cash bonus. In 2011, as ranking as follows: described in the 2009 Remuneration Report, the executive directors Percentage of will receive a Deferred Share Grant equal to 60% of their actual cash TSR ranking of company shares vesting (%) bonus. The size of the Performance Share grant made under the LTIP in 2010 was reduced as a result. The Committee is currently 9th to 15th (below median) 0 reviewing the level of DSAP awards (which would normally be made 8th (median) 35 in March 2012) in conjunction with the level of 2011 LTIP awards. Further details will be provided in the Notice of Annual General 7th 50 Meeting. 6th 65 If the employee remains employed by the Group, their award of 5th 80 Deferred Shares will normally become exercisable on the third anniversary following its date of grant. The DSAP is for key executives 4th 90 with the Company and is designed to help align their interests with 1st to 3rd 100 those of shareholders by awarding them a stake in the future success of the Company. At the point of vesting, all Deferred Share awards are capable of exercise at ‘nil cost’ to the participant. TSR is independently calculated for the Committee by its external advisers. Irrespective of TSR performance, before any vesting can occur the Committee must be satisfied that the underlying Long Term Incentive Plan (LTIP) performance of the Company has been satisfactory throughout the The LTIP was originally approved by shareholders at the Annual relevant performance period. General Meeting in 2004. Shareholder approval was given at the Annual General Meeting in 2006 to modify and simplify the LTIP. Directors’ shareholding In any financial year an employee may be granted an award over A shareholding expectation was placed on the senior executives in Performance Shares, the final vesting of which is subject to continued conjunction with the LTIP. Within five years of the Annual General employment within the Group and satisfaction of a performance Meeting in 2004 or of the date of first appointment, senior executives condition, as set out in the table below. are expected to build a holding in the Company’s shares equal to the The normal maximum award of Performance Shares would be an following value of their salaries: award over shares not exceeding 100% of that person’s base annual – Chief Executive: 150% of her salary; salary. However, in order to facilitate the recruitment of a particular eligible employee that higher figure may be increased to 200% of – other executive directors: 100% of their salaries; and base annual salary. Following the increase in potential Deferred Share – members of the Executive Committee: 30% or 50% of their base awards for 2010 outlined above, the standard award policy was salary depending on the level of their bonus potential. reduced for 2010 with the Chief Executive receiving a Performance Share award worth 80% of base salary and the other executive Executive directors are required to retain at least 50% of shares directors receiving awards worth 60% of base salary. vesting (after tax) under the LTIP and DSAP until guideline is achieved. The Board expects that non-executive directors will acquire shares equal in value to one times their annual fee during a period of three years from the date of their appointment. Retirement Benefit Benefit Retirement Prices Index Index Prices schemes. The cap, currently cap, currently The schemes. employment contract was rene was contract employment ma o earn they receive an annual cash sum equivalent to 30 equivalent sum cash annual an receive they occurs 6 April at the discretion of the ofthe discretion atthe 6 April the Company a Company the d 28 dated A is Vickers’sPaul contract em p p y C C E ofservice Contracts a li a a F A I Plan Pension 3 Mi U M contributory the in 2010, March participated Until Vaghela Vijay to salary. 33% ofbase equivalent is that purposes pension for to use sum cash annual an receives Bailey Sly arrangements pension directors’ Executive of his annual salar annual of his Durin referred to below referred Pension t salar pens written notice. Ifan notice. written 18 A 18 in the Trinity Mirror Pension Plan Plan Pension Trinity Mirror the in c he contributes 9% and the the 9% and contributes he spouses are ent are spouses entere 7% and the the the referred to above based on on based to above referred c to provide Paul Vickers a pension of two thirds pensionable salary at at salary pensionable thirds oftwo apension Vickers Paul to provide o excess receive n a o m ear the the ear 1 March 2010. Thereafter, he participated in the Trinity Mirro the in 2010.1 March participated he Thereafter, ge 60 was a direct contractual commitment on the the on commitment contractual adirect was 60 ge l l nd his capped final pensionable salary. As part of that arrangement, ofthat part As salary. pensionable final capped his nd nd Mirror o f ro-rata bonus entitlement for that that for entitlement bonus ro-rata ate erformance criteria and to be and criteria erformance ac s osure o ose nt ompany terminates her contract after six months of any financial ofany months six after contract her terminates ompany party by either terminated be can which ompany serv tim rror p ll i te Vij i p ow il ddi nta C h

d i p lo y ngs cap re cap ngs M i d d g on ompany ay e o 9 and and ril 2003. y d to to i 2009, the the 2009, to to t i . i n arc f th ce on sa ne i ees i

p on to t l n serv g c i D V p b nto S f redetermined com redetermined f

t hi ag d t f ecem rescribed sum will include an amount e amount an include will sum rescribed ene ‘A’ R h e cheme, and accrued pension at the rate of1 atthe pension accrued and cheme, uture accrua h ). G p h

s accrue

2010, et b e e cap. C h e sc ension loss. Sl

f roup plc. Paul Vickers has agreed that following the following that agreed has Vickers Paul plc. roup ( d y amen or x RPI e i ( fi ompany 8% of his salary up to the earnings cap cap to earnings up the 8% salary ofhis ompany rement rement i h a defined contribution plan contribution a defined ecu ( ay on 6 ay on ce. l ts o other than for gross misconduct gross for than other a an e g f f b l i erre ary up to up t ary u h t i . reed to pay Paul Vickers a cash supplement of35% supplement acash to Vickers Paul pay reed ) r pens er 2002 an l C for for ll e emes to tiv y P cons f y d

that is below the ca the below is that ommittee received le S d Vij au executive director leaves service at the re atthe service leaves director executive d d e to pens to di cheme as well as the non-contributory Trinity non-contributory the as well as cheme

S

P to to Pl ay b d l n A

eptember in the previous year. previous the in eptember au l Vi ene ir i on 31 g an unt ons, pr id ec b V t c l erat

e il ag h k h Vi f 2006 t 2006 y t fi uture accrua C l ers part e ru o ow e earn p p Baile d ts c i h Vij ons an r ompany 10% of his salary up to the to up the 10% salary ompany ofhis ensation e £ ensionable service to ofclosure, date service ensionable

k i s C e il on Vij 123,600, is normally increased every increased 123,600, normally is f M . ers are su are ers t h ay rom t rom p l l g ompany by reference to Retail the by reference ompany a an es o h ay aid at the same time as othe as time same atthe aid arc ( as otiated after the mer the after otiated a defined contribution plan contribution a defined b ey c y V h i ’s contract s contract ’s ngs cap re cap ngs y p

V i ag e earn c a d h d f P h eriod ag t p

i 2010.

pate

l se e l au h h ose P ril 2000, Sl 2000, ril ump sums paya sums ump h e e p au d q rvi l g l , e i l

bj as amended from time time from amended as r respect a e ual to 12ual base months’ ) Vi to which he contributes contributes he to which al advice that the obli the that advice al hi d l i d l ’ a n ( fi ce

ect to t ect s an sub Vi to to c

ne ’ s pens g s contract s contract i Th n t k

s cap app s cap c f co ers w d erre k f j erea h d uture accrua ect to satisfaction o to satisfaction ect p

) ers they will be entitled to to entitled be will they b ntr e contr

ecifies thatecifies if the P y ene q h % d i Baile i au ve pens ons ac e earn uivalent to her h f h to to g ter ter of salary in in ofsalary as en ivin l C fi t with th t with g

Vi t sc b er of Trinity plc ofTrinity er i bl ompany ompany h s b / l ib b y y hi c 60th per year year per 60th e g e part ene e ’s contract is is contract ’s i d een een k utory n l one year’s i s ow unt ngs cap, h ate ers if g i on on emes emes

to t to l d on fi ) to which to ’ e ts are ts are d r eat r s q i

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the directors’ knowledge and experience to the benefit ofthe to benefit the experience and knowledge directors’ the C r C a c the illustrates graph following The graphs Performance h a r S i p C b to likely are directors executive its that acknowledges Company The Policy on external appointments is 3 A The 2 75 100 125 1 C s no conflict of interest and to retain any fees any to retain and ofinterest conflict s no 12 150 0 50 75 1 equired by legislation, is measured by T measured is by legislation, equired emunerat 0 50 25 ompared to FT the ompared ppropriate form of ‘broad equity market index’ against which the the which against index’ market equity of‘broad form ppropriate nnual fee of £50,000. Neither Vijay Vaghela or Paul Vickers currently currently Vickers Paul or Vaghela Vijay Neither of£50,000. fee nnual o 50 Media Index, relative T relative Index, 50 Media erm e ly Bailey is a non-executive director and member ofthe member and director anon-executive is Bailey ly s the main comparator comparator main s the

00 50

ompany’s performance should be measured. Performance, as Performance, measured. be should ompany’s performance Board’s the with therefore, are directors ompany. Executive 5

ompany against performance FT s ompany performance against FTSE 250 index 250 FTSE against performance ompany 5 ld i h nv any externa any C o FTSE 350 Media index index Media 350 FTSE Trinity Mirror (Total return F T i 200 ss wn i 200 ommittee believes that these non-executive duties can broaden broaden can duties non-executive these that believes ommittee rinit T te S i d on, a E 250 index E 250 index 5 y 5 be to to Mirror i on comm l o b ll w ecome non-execut owe ( . Total return l

2006 di 2006 ( d Total return Total rectors to accept one suc one to accept S i ttee o

E 250 Index, which is considered the most most the considered is which E 250 Index,

( Total return Total ) ) g roup for the Company shares is the FTSE the is shares Company the for roup hi f S

T Annual & Report Accounts 2010 ) L ps R performance compared to that compared R performance r 200 i a 200 n db i t f y or w 7

7 ) Mi ro i ve C rror k ompany’s performance hi es p di c pl rectors o rectors h h c appo S t l 2008 c 2008 h R S f ey rece . or w E 350 Media inde Media E 350

.

i ntment as as ntment f ot hi c h i ve any ve any h er compan s 2009 2009 h e rece

49

l ong as t as ong f ees i ves an an ves . g i es. roup 20 20 x h 1 1 ere 0 0

Financials Governance Business review Who we are Trinity Mirror plc 50 Annual Report & Accounts 2010

Remuneration report

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

Total Total Annual Deferred excluding excluding Pension Pension Base cash Taxable Share pensions pensions contributions contributions salary bonus benefits1 Award 2 Fees 2010 2009 2010 2009 £000 £000 £000 £000 £000 £000 £000 £000 £000 Executive directors Sly Bailey 7363 660 12 57 – 1,465 1,434 248 248 Vijay Vaghela 430 344 11 30 – 815 799 106 110 Paul Vickers 375 225 25 19 – 644 635 126 119 Non-executive directors Sir Ian Gibson – – – – 220 220 220 – – Gary Hoffman – – – – 60 60 67 – – Jane Lighting – – – – 50 50 44 – – Kathleen O’Donovan – – – – 55 55 55 – – Laura Wade-Gery – – – – 40 40 40 – – Total 1,541 1,229 48 106 425 3,349 480 – Total 2009 1,541 1,250 48 29 426 3,294 477

1 Incorporates the value of all tax assessable benefits arising from employment with the Company related to the provision of car and fuel allowance and healthcare cover. 2 The Deferred Share awards granted in 2007 represent and relate to 2006 performance. Shares may be released under the DSAP within a period of six months from the third anniversary of the grant. The share price at the point of exercise was £1.016, therefore the values above relate to the share price at the point of exercise. 3 Excludes the value of sacrificed salary under the Group’s holiday purchase scheme amounting to £14,423.

Deferred shares exercisable at nil cost in 2014 will be granted in March 2011 to each executive director equal in value to 60% of 2010 cash bonus paid.

Directors’ pension entitlements The following executive directors were members of defined benefit schemes provided by the Company during the year. Pension entitlements and corresponding transfer values increased as follows during the year:

Transfer value of real increase Accrued Transfer Real in accrued Increase in Accrued Transfer pension at value at increase in Increase pension (less transfer value pension at value at 2 January 2 January accrued in accrued director’s (less director’s Director’s 3 January 3 January 20111 20112 pension pension contribution)3 (contributions)4 contributions5 20101 20102 £000 £000 £000 £000 £000 £000 £000 £000 £000 Vijay Vaghela 32 373 (1) – (7) 14 2 32 357 Paul Vickers 45 799 1 3 10 79 2 42 718 Total 77 1,172 – 3 3 93 4 74 1,075

1 Pension accruals shown are the amounts which would be paid annually on retirement based on service to 31 March 2010. 2 Transfer values have been calculated based on the bases adopted by the trustees following the introduction of new legislation of The Occupational Pension Schemes (Transfer Values) (Amendment) Regulations 2008 (SI 2008/1050) and The Occupational Pension Schemes (Transfer Values) (Amendment) Regulations 2008 (SI 2008/2450). In agreeing to the new bases trustees also had to consider the guidance issued by the Pensions Regulator ‘Transfer Values – Guidance to the trustees of private sector occupational pension schemes providing defined benefits – September 2008’ which came into effect from October 2008. 3 The transfer value of the real increase in accrued pension over the year represents the incremental value to the director of their service during the year. It is based on the accrued pension increase less the director’s contribution. 4 The increase in the transfer value from 3 January 2010 to 2 January 2011 includes the effect of fluctuations in the transfer value due to factors beyond the control of the Company and directors such as stock market movements and is net of the director’s contribution. 5 Directors did not pay any voluntary contributions during the year. The above disclosure of directors’ pensions is in line with the latest Companies Act 2006 requirements. The figures for each director give the accrued pension to which each director would have been entitled had they left service at 31 March 2010 (and the equivalent figure for the preceding year and the increase in accrued pension over the year). Also disclosed is the transfer value of the accrued pension at the end of 2010 (and the preceding year) and the increase in the transfer value during the year (net of directors’ contributions). The transfer values represent a liability of the pension schemes. They are not sums due to be paid to the directors.

014025_TriMir_31-55_v9.indd 50 06/04/2011 20:34 remuneration. The share schemes. retested over a period of four, five and six years from the date of date the from years six offour, and five aperiod over retested y three after satisfied fully not are criteria performance Ifthe performance. percentile at80th vesting to full scale sliding performanc atmedian exercisable become salary of75% to value annual the options ofbase executives senior other and directors Chairman of Remuneration Committe Senior Inde Director Independent Senior for fee Additional Additional fee for Chairma for fee Additional inspection at the Company’s re Company’s atthe inspection external principal advisers. principal external 1 Vicker Paul Vij S N a a a O T S Di Interest in shares T O Committe &Risk ofAudit Chairman C Th – Remuneration Committe Committee &Risk – Audit committees: chairing for fee Additional B C T T Non-executive directors

sc 20 other media companies. No vestin No companies. media 20 other Exercisable between dates are the first first the are dates between Exercisable bee verage of 2% per annum over a period of three years. 50% of each grant of an option to each individual is subject to aT subject is individual to each option ofan grant 50% ofeach years. ofthree aperiod over annum of2% per verage gainst the FT the gainst re exercisable unless the the unless re exercisable am he following directors held options to purchase shares under the the under shares to purchase options held directors following he ofa letters have directors non-executive and Chairman he he or his about discussion any in apart plays director No Board. by the determined is directors ofnon-executive remuneration he l ase hare o h ompany, effective 1 July 2005, as set out below: out set as 2005, 1July ompany, effective ptions are exercisable between three and 10 years from the date of grant subject to the satisfaction of performance conditions. ofperformance to satisfaction the subject ofgrant date the 10 from and years three between exercisable are ptions th y ay h rectors e ta a Baile emes s e e n m irm C r n V f hairman, bl ee ag e a o t. e y n p n- h b e tion scheme i e s e nce 2004 an 2004 nce p la ’ x act l endent Director ow summar ecu S S E Mid-250 index of companies on the date of grant. The other 50% is subject to a comparison ofT to acomparison 50% subject is other The dateofgrant. the on ofcompanies E Mid-250 index i enior Independent Director and and Director Independent enior tiv v C i e ty 4 ty

ommittee decided that the non-executive directors fees should remain unchanged at the current time. current atthe unchanged remain should fees directors non-executive the that decided ommittee d ir ec d s i J ses t no n t G anuary 2010 2 to anuary o e r roup’s earnin s f urt p h ossible exercisable date for these o these for date exercisable ossible g e istered office and at the Annual General Meetin General Annual atthe and office istered h f ee structure structure ee er grants w grants er e g e will take place on either measure unless the the unless measure either on place take will g s per share share s per ill

f b or 2010 J e ma C anuary 2011anuary ommittee d g : e. rowth exceeds inflation, measured by reference to the Retail Prices Index, plus an an plus Index, Prices to Retail the by reference measured inflation, exceeds rowth p tions – this does not mean that the o the that mean not does –this tions pp C ointment which set out the terms of their a oftheir terms the out set which ointment hairmen receive additional remuneration for providing these services to the services these providing for remuneration additional receive hairmen O g ption pric 47 16,737 544. 470.5p 544. 395.5 rant. The calculation ofT calculation The rant. G 0 roup’s share option schemes. No grants have been made under these these under made been have grants No schemes. roup’s option share 5 1 .5p 0p 0 p1 p e 11 184 B 3 3 a g J l 5, 3,9 0 ance a . They cannot participate in the annual bonus scheme or or scheme bonus annual the in participate cannot . They anuar , , 20 069 9 348 7 51 C 1 p 0 0 ompany’s rankin y t tions are exercisable as as exercisable are tions S R has been performed independently by the independently performed been R has 1 1 10 3,9 L i apse n year , 9 7 51 0 – – – d T Annual & Report Accounts 2010

r i n g i is at least median. For executive executive For median. atleast is t p y pp erformance conditions have not necessaril not have conditions erformance

B Mi 1 1 2 a ointment and are available for for available are and ointment

rror 3 16 8 J l ance at anuar 5, 4, , 20 069 737 3 pl 4 c 1 8 – – 1 y S R with a group ofabout agroup R with ears then they can be be can they then ears Ma M F A Apr 2005to201 ay 2003to e S pr 2005to y b R comparison 2003toMa 2006to E xerc her own No options i 51 sa e with a e with M bl F A 2 1 e e ay 201 pr 201 b 20 80,000 40 50 5 60,000 1 1 20 40,000 y b etwee 5 0,000 5, 201 201 y , , , , , 000 000 000 000 000 000 2 2 3 0 0 n £ 1

Financials Governance Business review Who we are TrinitTrinityy Mirror pplclc 52 AAnnualnnual RReporteport & AAccountsccounts 20120100

Remuneration report

Long-Term Incentive Plan (LTIP) Beneficial interests Sly Bailey, Vijay Vaghela and Paul Vickers held 134,181, 61,340 and During the year, the following directors completed purchases of 54,439 options respectively to purchase shares under the LTIP ordinary shares in the Company. The table below details the relating to the award made in 2007 which lapsed during the year. purchases: A total of 249,960 LTIP awards lapsed accordingly. Total The following directors held ‘nil cost’ options to purchase shares beneficial under the LTIP relating to awards made in 2008, 2009 and 2010: Number of holding Date of shares Price following Performance Number of ShShare price i at Nominal Director purchase purchased per share notification Share award shares date of grant vesting date Sir Ian Gibson 26 June 2010 26,854 £0.741 63,404 2008 Award Sly Bailey 26 June 2010 33,724 £0.735 168,734 Sly Bailey 270,270 277.5p 14 March 2011 Vijay Vaghela 26 June 2010 13,490 £0.735 69,930 Vijay Vaghela 123,964 277.5p 14 March 2011 Paul Vickers 26 June 2010 13,490 £0.735 71,309 Paul Vickers 108,108 277.5p 14 March 2011 Gary Hoffman 12 November 2010 25,000 £0.85 37,000 2009 Award Sly Bailey 270,270 28.5p 3 April 2012 The interests of the directors, all of which are beneficial, in the ordinary shares of the Company are shown below: Vijay Vaghela 123,964 28.5p 3 April 2012 2 January 3 January Paul Vickers 108,108 28.5p 3 April 2012 2011 2010 2010 Award Executive directors Sly Bailey 600,901 99.8p 28 May 2013 Sly Bailey 168,734 107,374 Vijay Vaghela 258,388 99.8p 28 May 2013 Vijay Vaghela 69,930 41,792 Paul Vickers 225,338 99.8p 28 May 2013 Paul Vickers 71,309 48,684 Non-executive directors The 2010 award was granted on 28 May 2010. For an explanation concerning the LTIP and performance criteria, further information can Sir Ian Gibson 63,404 36,550 be found on page 48. Gary Hoffman 37,000 12,000 Deferred Share Award Plan (DSAP) Jane Lighting – – Sly Bailey, Vijay Vaghela and Paul Vickers held 56,174, 29,777 and Kathleen O’Donovan – – 18,581 options respectively to purchase shares under the DSAP relating to the award made in 2007 which were exercised at ‘nil cost’ Laura Wade-Gery – – on 27 May 2010 at a share price of £1.016 at a total value of £56,735, £30,075 and £18,767 respectively. As beneficiaries under the T I H Employee Benefit Trust, the directors The following directors held options to purchase shares under the are deemed to be interested in 90,855 ordinary shares held by the Group’s DSAP relating to awards made in 2008 and 2010: employee benefit trust at 2 January 2011.

Deferred Number of Share price at Nominal There were no movements between the year end and the date of Share award shares date of grant vesting date this report. 2008 Award The lowest price of the shares during the year was 64.5 pence as at 30 June 2010 and the highest price was 171.5 pence as at Sly Bailey 114,321 277.5p 14 March 2011 11 January 2010. The share price as at 4 January 2011 was Vijay Vaghela 59,387 277.5p 14 March 2011 74.25 pence. Paul Vickers 37,553 277.5p 14 March 2011 Approved by the Board of Directors and signed on its behalf by:

2010 Award Jane Lighting Sly Bailey 268,693 99.8p 28 May 2013 Chairman Remuneration Committee Vijay Vaghela 140,046 99.8p 28 May 2013 3 March 2011 Paul Vickers 91,600 99.8p 28 May 2013

There were no awards granted under the DSAP in 2009 to Sly Bailey, Vijay Vaghela and Paul Vickers. All Deferred Share awards are made at ‘nil cost’ to the participant. For an explanation concerning the DSAP, further information can be found on page 48. During the year, the Committee agreed to accelerate the vesting date of the 2007 awards by three weeks to enable necessary procedural steps to be completed before Easter and personal income tax rates increased to 50% on 6 April 2010. The Committee decided that this was an appropriate step to make as the original vesting date was prior to 6 April 2010 and that the acceleration was purely for administrative ease.

with applicable law and United Kingdom Accounting Accounting Kingdom United and law applicable with financial 2006. They are also responsible for safe for responsible also are They 2006. affairs of the ofthe affairs and detection of fraud and other irre other and offraud detection and prepare t to required are directors the law that year. Under financial each for t European Union and Article 4 of the IA 4 ofthe Article and Union European the corporate and financial information included on the the on included information financial and the corporate are requ transactions and disclose with reasonable accurac C A T responsibilities ofdirectors’ Statement report Directors’ Th C p T – – – – I – – – – A I G company Under Practice). Accounting Accepted Generally Kingdom (United to prepare t to prepare International Financial Reporting Reporting Financial International records that are sufficient to show and ex and to show sufficient are that records in other jurisdictions in other website. Le website. and dissemination of financial statements may differ from le from differ may statements offinancial dissemination and n prepar n prepar h he directors are responsible for keeping adequate accounting accounting adequate keeping for responsible are directors he and Report Annual the preparing for responsible are directors he arent com ccounting ccounts ompany and hence for taking reasonable steps for the prevention the for steps reasonable taking for hence and ompany statements financial to prepare directors the requires law ompany roup or roup or ey are sat ey are un unless it is ina is unless it an continue in business. continue in prepare the financial statements on the the on statements financial the prepare h Accounting Kingdom United applicable statewhether ma select suitable accountin g ofthe assessment an make r prov m present information, includin p cons on t t h e equirements in IFR in equirements ave o roper e anner t di d d i n k i h exp erstan mpact o rectors are respons are rectors g e id i e ent b stent concern. j e a i u een p l re i i h y se n ng t C d osition of the ofthe osition l l i e conso aw t a n accor g d h gements an gements ddi ompany for that period. that for ompany g i h p i t s i to: S d ne l at prov ty y islation in the United Kin United the in islation G e parent company company e parent an f fi l h h a tandard 1 requires that directors that 1requires tandard ect an o ; e ’ t f e parent company company e parent e conso roup or or roup d h s bl ll i part d ona y owe pp e

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Financials Governance Business review Who we are Trinity Mirror plc 54 Annual Report & Accounts 2010

Directors’ report

Principal activities and future development Group companies evolve their own consultative policies. Methods of communication used within the Group include staff forums, advisory The principal activity of the Group is the publication and printing of committee meetings, newsletters, bulletins, pension trustee reports, newspapers and a growing portfolio of websites, primarily in the management briefings and staff surveys. United Kingdom. The analysis of turnover and operating profit are included in notes 4 and 5 to the consolidated financial statements. Since January 2009, Paul Vickers, Secretary and Group Legal Director, has been identified as the executive director with Human A review of our business and activities during the period is contained Resource responsibility. in the Chairman and Chief Executive statement on pages 12 to 17 and the Business review on pages 20 to 30. Payment of suppliers Our strategic goal is to build a growing multi-platform media business, by developing and sustaining strong positions across print and digital, We have a supplier payment policy which provides for payment of all with products and services which meet the needs of our customers, suppliers (other than those with agreed alternative terms) at the month both readers and advertisers. end following the month of receipt of invoice. All companies within the Group are encouraged to make payments in accordance with those terms and conditions provided that the supplier has also complied Results and dividends with them. At 2 January 2011, the Group had an average of 36 days’ The profit for the period attributable to equity holders of the parent (2009: 33 days’) purchases outstanding in trade creditors. was £113.3 million (2009: £29.3 million). The directors do not propose a final dividend for the year and no interim dividend was declared Share capital (2009: no dividend). Retained profit for the period was £113.3 million (2009: £29.3 million). Details of the movements in the Company’s called-up share capital including purchases of its own shares are included in note 29 to the consolidated financial statements. Charitable and political donations During the year contributions for charitable purposes totalled Substantial shareholdings £50,000 (2009: £84,000), principally to various charities connected or associated with the newspaper, printing or advertising industries In accordance with Rule 5 of the Disclosure and Transparency Rules, and local charities serving the communities in which we operate. as at 3 March 2011, the Company had been notified of the following No direct political contributions were paid during the period beneficial interests in its ordinary shares: (2009: £nil). The editorial stance of our national titles, and in particular Number of shares Percentage Nature of holding that of the Daily Mirror and the Daily Record, is politically left of centre and often supportive of the Labour Party. Although we do not make Schroders plc 40,923,929 15.88% Indirect interest direct political donations, it has been in the best interests of the Daily Standard Life Direct and Mirror and Daily Record to sponsor, on commercial terms, certain Investments 35,976,036 13.96% indirect events in aid of the Labour Party. This is a practice that has been followed for many years. Direct and plc 22,194,892 8.61% indirect At the Company’s Annual General Meeting held in 2010, the Company and its subsidiaries received authority from shareholders Royal London Asset under the Companies Act 2006 to make donations to political parties Management Limited 13,609,355 5.28% Direct interest of up to £75,000 in aggregate per annum. In 2010 there were no such Blackrock Inc. 12,817,868 4.97% Indirect interest payments (2009: £nil). JPMorgan Asset Management (UK) Employment policies and employees Limited 12,666,887 4.92% Indirect interest The Group employs over 6,500 people in around 60 locations across Old Mutual Asset the UK, including nine print sites. The Company is committed to Managers (UK) Ltd 12,556,497 4.87% Direct interest increasing the service quality, profitability and efficiency of the Company by attracting and recruiting the people who are best suited Legal & General to meet the standards for the role and the Company without regard to Group plc 10,291,384 3.99% Direct interest race, creed, colour, nationality (subject to legal eligibility), ethnic origin, Barclays plc 10,023,158 3.78% Indirect interest religion, gender, age, sex change, sexual orientation, marital status, connections with a national minority, membership or non Direct and membership of a trade union or, unless justifiable, disability. Lloyds TSB Group plc 8,931,102 3.46% indirect We pursue a policy of equal opportunities for all employees and potential employees. We have continued our policy of giving fair All percentages are based on date of notification. consideration to applications for employment made by disabled persons bearing in mind the requirements for skills and aptitude for the job. In the areas of planned employee training and career development, we strive to ensure that disabled employees receive maximum possible benefits including opportunities for promotion. Every effort is made to ensure that continuing employment and opportunities are also provided for employees who become disabled. Within the limitations of commercial confidentiality and security, it is the policy of the Company to take views of employees into account in making decisions and wherever possible, to encourage the involvement of employees in the Group’s performance. 12 May 2011. is Notice The spec cons 12 of the avera of the No use was made of this authority during the year. the during authority ofthis made was use No stated otherwise, are listed below listed are otherwise, stated Kathleen t the Disclosure and Transparency Rules and Rule 9.8.6 Rule and Rules Transparency and Disclosure the for re-election annually. Each director bein director Each annually. re-election for T Meeting General Annual v a Annual At the Meeting in 2010 General Annual the at granted Authorities the report, dateofthis atthe As Issued share capital T of Association Articles C Th f di T J G S N P Vij S E T Directors T Corporate governance statement in the booklet which accom which booklet in the shares up to a maximum of25,769,052 to up amaximum shares shares Hilton London 10% of the issued share ca share 10% issued ofthe Annual atthe re-election for himself details of each of the directors can be found on pa on found be can directors ofthe ofeach details Laura Wade- oun h alue of each share share ofeach alue ane uthorit he Annual he heir remuneration is summarised on pa ofthe directors he 7.2 Rule with o accordance in statement, governance corporate he au ir Ian Ian ir ly Bailey orporate x rectors ary Hoffman ary on-execut e ay e ecu M Li l

d C B Vi i i ay 2011 V sts o sts a st Li on pa oar ompany’s Articles of Association may only be amended by a by a amended be only may ofAssociation ompany’s Articles ag l c G reso g i t y ng k h i ibson ’ for the Com the for h er v

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257,690,520 or R G ng s ’Donovan h ene l g a G l g u ut as overnance overnance . e mid-market price for the precedin the for price e mid-market G es 51 an l eneral Meeting of Trinity Mirror plc will be held at the atthe held be will plc ofTrinity Mirror Meeting eneral G es, on page 42 page on es, i i C C on atagenera on er fi v d eneral Meeting in 2010, shareholders approved an an approved 2010, in Meeting shareholders eneral B c e anar ec E y i a l an id C ( bein y e p ompany who served during the period, unless period, the during served who ompany d Wharf, Marsh Wall, London E14 Wall, London Marsh 9 Wharf, d d an 52 52 to a to non- C g y ode, whereby the entire Board should stand should Board entire the whereby ode, 10each pence to make market di i p g n t p d nary s nary ital iven, to anies this re this anies b l opt t meet f h orms part o orms part ene ) e remunerat at C : ompany’s issued share capital capital share ompany’s issued h fi h p c e prov i ares o ng o G g rices not less than the nominal nominal the than less not rices i a ether with explanatory notes, notes, explanatory with ether eneral Meeting to be held on on to held be Meeting eneral l

i nterests nterests f g t p i ) f e 50 and details of the ofthe details e 50and g s f h and not exceedin not and ort. ort. 10eac pence t i p eli e s i on hi on report. report. on urchases of its own own ofits urchases s g h i n t ible, therefore offers offers therefore ible, di ( are bein i g n s rectors h five business days. g h e new e new h e 18. o g ares can can ares approximately ld Bi ( 5 ers. ’ ) S o report and and h UK H on g . rap g

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shareholders at the next Annual Annual next atthe shareholders This confirmation is given and should be interpreted in accordance in interpreted be should and given is confirmation This – Th Directors’ statement responsibility a D w – – A E Auditors 3 Le Group and Secretary P B – uditors of the ofthe uditors March 201 March ach of the persons who is a director at the date of approval of this ofthis dateofapproval atthe adirector is who persons ofthe ach nnua au y or e ith the provisions of section 418 ofsection ofthe provisions the ith an toget taken as a director in order to make himself or herself aware of any ofany aware herself or to himself make order in adirector as taken l f t r t o so p t t au t the undertakin the iabilities, financial position and profit or loss of the ofthe loss or profit and position financial iabilities, inancial reportin h h h h h e elevant audit information and to establish that the the that to establish and information audit elevant l f which the the f which o erformance of the business and the position of the ofthe position the and business ofthe erformance e un e e ey e l di di d i

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h 1 i s h e t l ki e statements, prepare statements, h h ave expresse C di C a as ta n B ompany’s auditors are unaware; and unaware; are ompany’s auditors g g ompany and their reappointment will be put to put be will reappointment their and ompany rector rector oar d fi d s s included in the consolidation taken as a whole, awhole, as taken consolidation the in s included g i rm to t escr ew,

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r rev illi i h on. i n accor h i ngness to cont e nc pl i s no re s no at i r c h C i i k ew o pa lid at: h ompanies Act 2006 Act ompanies now e or s e or at l r d i i l on ta s f evant au evant ance w t l e k h dg s an h e e oug d k e en as aw as en : eve C d C i nue i uncerta ompany and t ompany’s C h di h l t opment an ompany and t t to 55 h i i n o n e re f ormat h ffi h ave ave . i l nt evant evant o ce as ce as l i e; e; es es i on on d

Financials Governance Business review Who we are Trinity Mirror plc 56 Annual Report & Accounts 2010 Group consolidated accounts Independent auditor’s report to the Opinion on financial statements members of Trinity Mirror plc In our opinion the consolidated financial statements: We have audited the consolidated financial statements of Trinity – give a true and fair view of the state of the Group’s affairs as at Mirror plc for the 52 weeks ended 2 January 2011 which comprise 2 January 2011 and of its profit for the 52 weeks then ended; the consolidated income statement, the consolidated statement of comprehensive income, the consolidated statement of changes in – have been properly prepared in accordance with IFRS as adopted equity, the consolidated balance sheet, the consolidated cash flow by the European Union; and statement and the related notes 1 to 38. The financial reporting – have been prepared in accordance with the requirements of the framework that has been applied in their preparation is applicable Companies Act 2006 and Article 4 of the IAS Regulation. law and International Financial Reporting Standards (IFRS) as adopted by the European Union. Opinion on other matter prescribed by the This report is made solely to the Company’s members, as a body, Companies Act 2006 in accordance with Chapter 3 of Part 16 of the Companies Act 2006. Our audit work has been undertaken so that we might state to the In our opinion the information given in the directors’ report for the Company’s members those matters we are required to state to them 52 weeks ended 2 January 2011 for which the financial statements in an auditor’s report and for no other purpose. To the fullest extent are prepared is consistent with the Group financial statements. permitted by law, we do not accept or assume responsibility to anyone other than the Company and the Company’s members Matters on which we are required to report as a body, for our audit work, for this report, or for the opinions by exception we have formed. We have nothing to report in respect of the following: Respective responsibilities of directors Under the Companies Act 2006 we are required to report to you if, and auditor in our opinion: As explained more fully in the statement of directors’ responsibility – certain disclosures of directors’ remuneration specified by law are on page 53, the directors are responsible for the preparation of the not made; or consolidated financial statements and for being satisfied that they – we have not received all the information and explanations we require give a true and fair view. Our responsibility is to audit and express an for our audit. opinion on the consolidated financial statements in accordance with applicable law and International Standards on Auditing (UK Under the Listing Rules we are required to review: and Ireland). Those standards require us to comply with the Auditing – the directors’ statement contained within the corporate governance Practices Board’s Ethical Standards for Auditors. report in relation to going concern; and – the part of the corporate governance report relating to the Scope of the audit of the financial Company’s compliance with the nine provisions of the June 2008 statements Combined Code specified for our review; and An audit involves obtaining evidence about the amounts and – certain elements of the report to shareholders by the Board on disclosures in the financial statements sufficient to give reasonable directors’ remuneration. 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 Other matter the Group’s circumstances and have been consistently applied and We have reported separately on the parent company financial adequately disclosed; the reasonableness of significant accounting statements of Trinity Mirror plc for the 52 weeks ended 2 January estimates made by the directors; and the overall presentation of the 2011 and on the information in the directors’ remuneration report that financial statements. is described as having been audited. Panos Kakoullis (Senior Statutory Auditor) for and on behalf of Deloitte LLP Chartered Accountants and Statutory Auditor London, UK 3 March 2011

Neither an audit nor a review provides assurance on the maintenance and integrity of the website, including controls used to achieve this, and in particular whether any changes may have occurred to the financial information since first published. These matters are the responsibility of the directors but no control procedures can provide absolute assurance in this area. Legislation in the United Kingdom governing the preparation and dissemination of financial information differs from legislation in other jurisdictions.

Share of results ofassociates ofresults Share expenses administrative Other Pension finance char finance Pension Total comprehensive income/(costs) for the perio the for income/(costs) Total comprehensive O by associates equity in recognised ofitems Share rate tax in change future from resulting charge tax Deferred Tax actuarial on A P 2011 2 January ended 52 the weeks for comprehensive income of statement Consolidated * E E A A E P char Tax P Finance costs I O Non-recurring item Ad Di Gross profit C R 2010 3January 2011 ended weeks 2January (53 ended 52 weeks the for Consolidated income statement

nv Adjusted items relate to the exclusion of non-recurrin of exclusion tothe relate items Adjusted financial instruments and the impact of tax le tax of impact the and instruments financial djusted earnin djusted earnin ctuarial arn arn arn ro ro ro ost ofsale ost e peratin ther comprehensive income str es m v A fi fi fi e ib i tm n i i i t t t mort n ngs per s per ngs s per ngs s per ngs ut i f f b strat ue or t or t e e i g on cost nt r g f e g i ore tax ains sat i h h profit ve expenses s e e per e v i on o e /( p g g n losses s er g h h h per share* –basi share* per s per share* –diluted share* s per ues ains/(losses) on defined benefit pension schemes taken to equity taken schemes pension benefit defined on ains/(losses) are – are – ar f i i

o o i ntang e d d g attr ) e on defined benefit pension schemes taken to equit taken schemes pension benefit defined on s dil b : as ibl ute ib e assets ic uta d bl /( g c e to e e to islation chan costs ( 53 weeks ended 3 January 2010 3January ended weeks 53 g items, the amortisation of intan of amortisation the items, q ) for the perio the for u i g t es. A reconciliation between the adjusted result and the statutory result is provided in note 38 on pa on 38 note in provided is result statutory the and result adjusted the between Areconciliation es. y

h o ld ers o d d f t h e p g ible assets, the retranslation of forei of retranslation the assets, ible aren ) ) t y g n currency borrowin A T r nnua i n i ty l

R Mi Note N Note e g 4, 5 p ote rror p s, the impact of fair value chan value fair of impact the s, 1 10 3 1 15 1 1 3 13 13 13 13 ort ort 1 3 9 7 8 7 1 3 s s s &

l A c ccounts 2010 g e 99 ( ( 7 11 11 3 1 11 1 1 164.9 393.2) Pe ( ( ( 23 38 2 68.3 6 90 77.5 44 44. 2 28.6 10.4 80.8 30.4) 2 20 (3.0) ( ( (6.0) (1.6) . 3 1.4 0 0 1. 2 3 8 8.6 7.1 n 010 010 £ £ ce 1 . .7 . .7 .7 . .5 . . . m m 3 0 5 8 3 5 6 5 0 ) ) ) ) ) 57 g es on derivative ( ( ( 105.7 186.9) 390.4 372.9 763.3 (11.3) (48.5) ( ( ( ( (81.1) Pence 77.8 12.7 34.7 10.5 4 29 11 11 1 20 29 8 2 2009 2009 ( ( 1.7 7.1) 0.5 9 9 2 0 7. £ £m . . . .5 . . . . .2 m 6 3 4 8 0 3 0 0 – ) ) ) ) ) ) )

Financials Governance Business review Who we are Trinity Mirror plc 58 Annual Report & Accounts 2010 Consolidated statement of changes in equity for the 52 weeks ended 2 January 2011 ShShare CilCapital Retained Share redemption redemption earnings and capital premium reserve other reserves Total £m £m £m £m £m At 3 January 2010 (25.8) (1,120.5) (4.3) 661.4 (489.2)

Profit for the period – – – (113.3) (113.3) Other comprehensive income for the period – – – (77.5) (77.5) Total comprehensive income for the period – – – (190.8) (190.8)

Credit to equity for equity-settled share-based payments – – – (2.0) (2.0) Purchase of own shares – – – 3.5 3.5 Refund of VAT on share issue costs – (1.1) – – (1.1)

At 2 January 2011 (25.8) (1,121.6) (4.3) 472.1 (679.6)

for the 53 weeks ended 3 January 2010 Share CilCapital Retained Share redemption redemption earnings and capital premium reserve other reserves Total £m £m £m £m £m At 28 December 2009 (25.8) (1,120.5) (4.3) 615.9 (534.7)

Profit for the period –––(29.3) (29.3) Other comprehensive costs for the period – – – 77.8 77.8 Total comprehensive costs for the period – – – 48.5 48.5

Credit to equity for equity-settled share-based payments – – – (3.0) (3.0)

At 3 January 2010 (25.8) (1,120.5) (4.3) 661.4 (489.2) Cash and cash e s Retirement benefit asset benefit Retirement Property, plant and equipmen Non-current liabilities D Sly Bailey Bailey Sly T T reserves other and earnings Retained Ca Share Share ca E N T D P Cu T C D P liabilities Deferred tax obli benefit Retirement B T T I Current asset Defe I O G N 2011 2January at Consolidated balance sheet he xctv Grou Chief Executive Borrowin nvestment nvestment nv rade and other other and rade receivables other and rade ig ota ota ota hese consolidated financial statements were a were statements financial consolidated hese rov rov qu orrow er e e oodwil o urrent liabilities e ther intangible asset intangible ther e ne riv riv p rr t n- i nt vat ital redem e i i i asse rr s s l l l t a a d e asset nt t cu o y i i ed li tiv tiv on on p on i r a ve i q ng remium account ies l e e rr t bili a u p s s gs fin fin t a x li fi e ita s i i s ts t nanc x i nt y n assoc t s a a ab l i asse attr b es n n p asse e c c iliti tion reserve tion s h i i i p a a a q a ( es t a ib 3 January 2010 3 January l in l l in

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h Vijay Va Vijay o ld ers o p Finance Director Finance pp g f t hela roved b roved h e p aren y the Board of directors and authorised for issue on 3 March 2011. 3March on issue for authorised The and ofdirectors Board the t A Trinity Mirror plc Mirror Trinity nnua 28 28 l

R Note e , , p 30 29 2 19 1 18 26 2 3 1 1 1 14 2 2 2 22 1 20 2 26 22 2 33 ort ort 5 9 1 3 7 6 5 8 8 6 1 5 1 s &

A ccounts 2010 ( ( 1 1,5 1,121.6 1,046.4 ( ( ( ( ( ( ( ( , 41 472.1 7 222 116.2 89 6 226.1 679.6 271.8 106.5 137.8 774.6 318.3 222.1 ( ( 99.4 4 26 03 12. 6 74. 7 25.8 18.9 00 20 2 ( ( ( ( 7. 3 1.1 5 0 5.4 9 4.3 2.2 6.4 8.1 010 010 £ . . .1 . .4 . . m 0 9 3 6 8 3 5 6 – ) ) ) ) ) ) ) ) ) ) ) ) ) ) ) ) y 59 were ( ( 1,120.5 1,132.3 1,45 1, ( ( ( ( ( ( ( 489.2 151.8 115.6 980.5 318.8 296.6 355.0 661.4 871.4 62 4 1 423.2 ( ( ( 25.8 10.1 23.0 95.6 89 62 6 83 74.5 2009 ( ( ( ( 4.3 3.1 2.9 7.2 6.3 1.5 8 1. 5 £m .2 .7 . . .4 8 2 9 – – – ) ) ) ) ) ) ) ) ) ) ) ) ) ) ) )

Financials Governance Business review Who we are Trinity Mirror plc 60 Annual Report & Accounts 2010 Consolidated cash flow statement for the 52 weeks ended 2 January 2011 (53 weeks ended 3 January 2010) 2010 2009 Notes £m £m Cash flows from operating activities Cash generated from operations 24 110.1 97.6 Income tax paid (19.1) (8.0) Net cash inflow from operating activities 91.0 89.6 Investing activities Interest received 1.4 0.2 Proceeds on disposal of property, plant and equipment 2.7 8.9 Purchases of property, plant and equipment (14.2) (14.8) Cash consideration on acquisition of business 36 (7.4) – Cash acquired on transfer of business 36 0.2 – Net cash used in investing activities (17.3) (5.7) Financing activities Interest paid on borrowings (16.3) (22.9) Interest paid on finance leases – (0.6) Repayment of borrowings – (10.0) Repayment of obligations under finance leases – (9.8) Purchase of own shares (3.5) – Refund of VAT on share issue costs 1.1 – Net cash used in financing activities (18.7) (43.3)

Net increase in cash and cash equivalents 27 55.0 40.6

Cash and cash equivalents at the beginning of period 27 61.2 20.6 Cash and cash equivalents at the end of period 27 116.2 61.2 to shareholders in early April 2011 April early in to shareholders se operating the in to achange led not has This performance. their applied to acquisitions durin to acquisitions applied IFR

or total e or total presentat d b as i p p 1 IAS followin the had have which period financial current the during standards amended and new, adopted revised has Group The standards revised ofnew and 2 Adoption T information 1 General 2Januar ended 52 the weeks for financial statements Notes to the consolidated www.trinitymirror.com, at the atthe www.trinitymirror.com, at website Company’s the on available made be will and Accounts to recogn to to reco to number of chan w statement rather than as an adjustment to adjustment an as than rather statement expense acqu expense the Grou the IFRS 3 IFRS Group that are re are that Group t by issue for approved were statements financial consolidated These 20 to 30. pages on Review Business the in discussed are Group E14 London ofthe Wharf, 5AP. activities Canary Square, principal The Canada One is office registered ofthe address 82548. is The number registered Company’s The Exchange. Stock London the on listed and ssues, are are ssues, h r art of the costs of the ac ofthe costs ofthe art rior to the current financial financial to current the rior ec e i i e t n g hi p id S i ments but has impacted disclosure. impacted has but ments B i ty s reviousl n t 8‘ ent oar i on ma ( Mi Amended g h ( Revised O ifi e nise contin d q rror p p: i e i perating ona o se c uit fi d nanc d f y on t k

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ter 1 ter Ca i rme n d d d d i rement g roval of these consolidated financial statements the statements financial consolidated ofthese roval rev s start s start s start g J ) ) ) ) ) n on or a or on ‘Financial Instruments’ – effective for periods periods for –effective Instruments’ ‘Financial to Owner Assets ofNon-cash Distributions ‘Extinguishing Financial Liabilities with Equity Equity with Liabilities Financial ‘Extinguishing Customers from Transfers ofAssets Minimum Asset, Benefit aDefined on Limit The Requirements and their Interaction their and Requirements u ) ) ) ce d Consolidated and Se and Consolidated Disclosur Instruments: Financial ‘Related Party Disclosures’ – effective for for –effective Disclosures’ Party ‘Related J l g y 2010 i ear anuary 2011,anuary w se ) ) ) ) ) ) ) ) Im Presentatio Instruments: Financial Ventures Joint in Investments Associate in Investments Pro ‘Prepayments of a Minimum Funding Funding ofaMinimum ‘Prepayments ‘ Pro Investment reements for the Construction of Real Estate ofReal Construction the for reements ll G G ’ a C –e i i i d ’ roup: roup n a or on ng a or on ng ) ) ti g ‘Deferred Tax’ – effective date to be Tax’ –effective ‘Deferred fo –effective Instruments’ ‘Financial –e lassification of Rights Issues’ – effective for for –effective Issues’ ofRights lassification l stan p o g y 2011 riculture f p n airment ofAsset airment on or a or on ter 1 ter Annual & Report Accounts 2010 Trinit ff ert g s ff ect . s ible Asset ect d y y , Plant and E and , Plant i ar Mirror S ve J i ve anuary 2013anuary

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Financials Governance Business review Who we are Trinity Mirror plc 62 Annual Report & Accounts 2010

Notes to the consolidated financial statements continued

3 Accounting policies On the acquisition of a business, including an interest in an associated undertaking or a joint venture, fair values are attributed The principal accounting policies adopted in the preparation of these to the Group’s share of the identifiable assets and liabilities of consolidated financial statements are set out below. These policies the business existing at the date of acquisition and reflecting the have been consistently applied to all years presented except for the conditions as at that date. Where necessary, adjustments are made changes in note 2 on page 61. to the financial statements of businesses acquired to bring their International Financial Reporting Standards (IFRS) accounting policies in line with those used in the preparation of the consolidated financial statements. The Group has adopted standards and interpretations issued by the International Accounting Standards Board (IASB) and the International Results of businesses are included in the consolidated income Financial Reporting Interpretations Committee (IFRIC) of the IASB that statement from the effective date of acquisition and in respect of are relevant to its operations as adopted by the European Union (EU). disposals up to the effective date of relinquishing control. Individual standards and interpretations have to be adopted by the EU Business combinations and the process leads to a delay between the issue and adoption of Acquisitions of subsidiaries and businesses are accounted for using new standards and interpretations and in some cases amendments the acquisition method. The consideration for each acquisition is by the EU. measured at the aggregate of the fair value (at the acquisition date) of The parent company financial statements of Trinity Mirror plc for the assets given, liabilities incurred or assumed and equity instruments 52 weeks ended 2 January 2011, prepared in accordance with issued by the Group in exchange for control of the acquiree. applicable law and United Kingdom Accounting Standards, are Acquisition related costs are recognised in the profit or loss account presented on pages 100 to 109. as incurred.

Basis of preparation Where applicable, the consideration for the acquisition includes any asset or liability resulting from a contingent consideration These consolidated financial statements have been prepared on arrangement, measured at its acquisition date fair value. Subsequent a going concern basis as set out on page 43 of the corporate changes in such fair values are adjusted against the cost of governance report. acquisition where they qualify as measurement period adjustments. For administrative convenience, the consolidated financial statements All other subsequent changes in fair value of contingent consideration are made up to a suitable date near the end of the calendar year. classified as an asset or liability are accounted for in accordance with the relevant IFRS. Changes in the fair value of contingent These consolidated financial statements have been prepared for consideration classified as equity are not recognised. the 52 weeks ended 2 January 2011 and the comparative period has been prepared for the 53 weeks ended 3 January 2010. Investment in associates The additional weeks trading in the 53 weeks ended 3 January 2010 Associates are all entities over which the Group has significant included revenue of £9.9 million and operating profit of £4.2 million. influence but not control and are accounted for by the equity method The Group has revised the classification of items of expenditure of accounting, initially recognised at cost. The Group’s share of its between cost of sales, distribution costs and administrative expenses associates’ post-acquisition profits or losses is recognised in the to better reflect the nature of the costs. In the current period, consolidated income statement, and its share of post-acquisition £13 million of costs have been included in cost of sales and £4 million movements in reserves is recognised in the consolidated statement of costs have been included in distribution costs which would have of comprehensive income. previously been reported in administrative expenses. Joint ventures Basis of accounting The Group has joint venture arrangements where separate entities These consolidated financial statements have been prepared in have been established. In each entity the Group or one of its accordance with International Financial Reporting Standards (IFRS) subsidiaries has an interest and along with other ventures jointly and IFRIC interpretations as adopted by EU and with those parts of controls these entities. When material, the Group reports its interest the Companies Act 2006 applicable to groups reporting under IFRS. in jointly controlled entities using equity accounting and its share of The consolidated financial statements have been prepared under the the entities’ profit or loss is accounted for as a single entry in the historical cost convention as modified by the revaluation of freehold consolidated income statement. Where the Group transacts with its properties which on transition to IFRS were deemed to be the cost jointly controlled entities, unrealised profits and losses are eliminated of the asset. A summary of the more important Group accounting to the extent of the Group’s interest in the joint venture. policies is set out below.

Basis of consolidation The consolidated financial statements incorporate the financial statements of Trinity Mirror plc and all entities controlled by it for the 52 weeks ended 2 January 2011. Control is achieved where the Company has the power to govern the financial and operating policies of an entity so as to obtain benefits from its activities. All intra-group transactions, balances, income and expenses are eliminated on consolidation. un impairment at each reporting date reporting ateach impairment for tested are and Group the for profits and revenues generate will est domain names in respect of online activities. activities. ofonline respect in names domain statement recoverable amount is less than the carrying amount. Recoverable Recoverable amount. carrying the than less is amount recoverable date or more fre more date or reporting ateach either impairment for reviewed are titles and rights publishing The belongs. asset the to which unit cash-generating An impairment loss is reco is loss An impairment amount. to recoverable its reduced is unit cash-generating of the

subsequent periods been not have flows cash offuture estimates which for to the asset cash-generating unit is less than the carrying amount of the unit, the the unit, ofthe amount carrying the than less is unit cash-generating ofthe amount recoverable Ifthe units. cash-generating as known o mar strai the using amortised are names domain and relationships Customer a usin value present a v g a v P a v O O O a a g i l F the over ofacquisition cost of the excess the represents entity ofan acquisition the on arising Goodwill Goodwil policies 3 Accounting a a ofwebsites maintenance and development the in incurred Costs in respect of print publishin ofprint respect in rema the carrying value. carrying the in decline apossible indicate circumstances in changes or events if frequently more or annually either impairment for reviewed is Goodwill acquisition. upon statement income consolidated the in directly recognised is acquisition an on arising goodwill Negative losses. impairment accumulated any less atcost measured subsequently is and atcost asset an as recognised initially is Goodwill of acquisition. date atthe recognised entity ofthe liabilities and assets identifiable the not generate cash flows that are independent from other assets, other from independent are that flows cash generate not does asset the Where units. cash-generating as known flows, cash or loss arisin cash flows. cash-generating unit relating to the asset are discounted to thei discounted are to asset the relating unit cash-generating In assessin carryin ofthe basis the on pro-rated profit or loss on disposal. on loss or profit between the net disposal proceeds, if any, if carryin the and proceeds, disposal net the between mpa owest owest alue in use estimates are made based on the cash flows of the ofthe flows cash the on based made are estimates use in alue to subject not are They life. economic indefinite an with alue intan ofother alue subsequent period. djusted. If the recoverable amount ofacash- amount recoverable Ifthe djusted. re me re onl use. in value and to sell costs less value offair higher the is mount are assets testing, ofimpairment purpose the For mortisation. mount o mount. An impairment loss reco or t f rouped at the lowest levels for which there are separately identifiable separately are there which for levels lowest atthe rouped oodwill allocated to the unit and then to the other assets of the unit, ofthe assets to other the then and to unit the allocated oodwill u n disposal of a subsidiary, associate or jointly controlled entity, the controlled jointly or associate ofasubsidiary, n disposal ther intan ther t ther intangible asset intangible ther i bli t, t, i h mate k g e h b s i et assessments o et assessments i rment ht-line method over the expected life over which those assets assets those which over life expected the over ht-line method n e purpose o e purpose hi ut su i tem, tem, y i t l ng amount o eve . ng r ca d f to to l t i p l n t g bj g s h i i O l g s recogn italised if the criteria s criteria the if italised oss value in use the estimated future cash flows of the ofthe flows cash future estimated the use in value g ible assets comprise acquired publishin acquired comprise assets ible e re ect to re not ect b f h h n disposal of an entity or closure of a title, the carryin the ofatitle, closure or entity ofan n disposal or w from de-reco e ts an e per q l i l ess t s a ate uentl f hi g

g i a post-tax discount rate that reflects current reflects rate that discount apost-tax mpa d c ll d i f . ible assets is calculated based on discounted discounted on based calculated is assets ible o goo ocate t i h se

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l i y e-recogn n t b d id h g e d i h

e carry se O ent i l oodwill is not reversed in in reversed not is oodwill ncome statement. ow may may e g n acquisition, the fair fair the n acquisition, h d eneratin d e carry ifi as an asset at asset an as eterm i a ts recovera bl i d b se Intan i ng amount o g r e reverse e cas ri i d s i an g i nat k g ng va hts and titles hts and s spec g unit is unit is d ible Assets g h d i att on o amount amount

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toget the rates ofexchan the rates to the Group. All other leases are classified as operating leases. leases. operating as classified are leases other All to the Group. is service the when recognised is revenue Printing ofsale. time the t l a i pl m a A l L L b I i r r c p i n R R a P r i d c r a i a obli b Th a all The R d r A T F c R term. Benefits received as incentives to enter into the a into tothe enter incentives as received Benefits term. shareholders’ ri terms o terms the consolidated income statement for the period the for statement income consolidated the sprea to t s recognised upon publication. Circulation revenue is recognised at at recognised is revenue Circulation publication. upon s recognised s nc astrai on statement ncome nterest rates o rates nterest ease o ofownership rewards and risks the all substantially transfer ease nterest income from bank deposits is recognised on an accruals an on recognised is deposits bank from nterest income h eceivable under operating leases are credited to the consolidated to consolidated the credited are leases operating under eceivable Rentals ofservice. provision or ofsale time atthe ecognised ecogn eport etrans ransact t the inception of the lease or, if lower, the present value of the or, ofthe value lease lower, ofthe if present the inception t the ssets separately from those of the ofthe those from separately ssets re onsolidated income statement on astrai on statement income onsolidated re apportioned between finance char finance between re apportioned ppropr n expense as t as n expense n ampai eases are c are eases et of applicable discounts and value added tax. Advertisin tax. added value and discounts et ofapplicable asis. Dividend income from investments is recognised when the when recognised is investments from income Dividend asis. ifferences arisin ifferences rovided. Di rovided. eterm ene t each reportin t each ayments to ayments orei ssets ssets ease evenue evenue enta ant an evenue recognitio evenue et e trustees inimum lease payments. The asset is reco is asset The payments. lease inimum o i d nc e amount recogn e amount l di h u gat

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e g . h fi high h y e conso g er ene i ustments ustments hts to receive payment have been established. been have payment hts to receive ifi g ne e rates preva e rates scount bli g b ey d date, items denominated in forei in denominated date, items i d e present va e present d h n on settlement and on retranslation are included in in included are retranslation on and settlement on e een set u set een h e fi gat g d

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Mirror eases w l R tant tant resent va resent l ty. l nised over the period of the online ofthe period the over nised i fi er trusts t trusts er eases are c are eases ance s gn currenc g e bli i nance l mate p ue o f leaflets and events revenue is is revenue events and leaflets t ort ort G U h gat h h e i roup and are controlled by by controlled are and roup li e nrea es us h & p e b a g i

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Financials Governance Business review Who we are Trinity Mirror plc 64 Annual Report & Accounts 2010

Notes to the consolidated financial statements continued

3 Accounting policies continued Inventories Inventories are stated at the lower of cost and net realisable value. Tax Cost represents materials, direct labour and production overheads. The tax expense represents the sum of the corporation tax currently Cost is calculated using the first in first out method. payable and deferred tax. Financial instruments The corporation tax currently payable is based on taxable profit for Financial assets and financial liabilities are recognised in the the period. Taxable profit differs from profit before tax as reported consolidated balance sheet when the Group becomes a party to in the consolidated income statement because it excludes items the contractual provisions of the instrument. of income or expense that are taxable or deductible in other years and it further excludes items that are never taxable or deductible. Trade receivables The Group’s liability for current tax is calculated using tax rates that Trade receivables do not carry any interest. Conversion to a readily have been enacted or substantively enacted by the reporting date. known amount of cash occurs over a short period and is subject Deferred tax is the tax expected to be payable or recoverable on to an insignificant risk of changes in value. Therefore balances are differences between the carrying amounts of assets and liabilities in stated at their nominal value as reduced by appropriate allowances the consolidated financial statements and the corresponding tax for estimated irrecoverable amounts. bases used in the computation of taxable profit, and is accounted for using the balance sheet liability method. Deferred tax liabilities Cash and cash equivalents are generally recognised for all taxable temporary differences and Cash and cash equivalents comprise cash in hand and demand deferred tax assets are recognised to the extent that it is probable deposits. that taxable profits will be available against which deductible temporary differences can be utilised. Borrowings Sterling interest bearing loans and bank overdrafts are recorded at Deferred tax liabilities are recognised for taxable temporary the proceeds received, net of direct issue costs. Foreign currency differences arising on investments in subsidiaries, associates and interest bearing loans are recorded at the exchange rate at the interests in joint ventures, except where the Group is able to control reporting date. Finance charges, including premiums payable on the reversal of the temporary difference and it is probable that the settlement or redemption and direct issue costs, are accounted for temporary difference will not reverse in the foreseeable future. on an accruals basis in the consolidated income statement using the The carrying amount of deferred tax assets is reviewed at each effective interest method and are added to the carrying amount of reporting date and reduced to the extent that it is no longer probable the instrument to the extent that they are not settled in the period that sufficient taxable profits will be available to allow all or part of the in which they arise. All other borrowing costs are recognised in asset to be recovered. Deferred tax is calculated at the tax rates that the consolidated income statement in the period in which they are expected to apply in the period when the liability is settled or the are incurred. asset is realised. Derivative financial instruments Deferred tax is charged or credited in the consolidated income The Group uses derivative financial instruments, including currency statement, except when it relates to items charged or credited directly swaps, cross-currency interest rate swaps, interest rate swaps and to equity, in which case the deferred tax is also dealt with in the other hedging instruments to minimise exposure to the financial consolidated statement of comprehensive income. risks of changes in foreign currency exchange rates and interest Property, plant and equipment rates. The Group does not use derivative financial instruments for speculative purposes. The Group has elected not to apply Property, plant and equipment are stated in the consolidated balance hedge accounting. sheet at cost less accumulated depreciation and impairment losses. Derivative financial instruments are separately recognised at fair value Cost includes the purchase price and all directly attributable costs of in the consolidated financial statements. Changes in the fair value bringing the asset to its location and condition necessary to operate of derivative financial instruments are recognised immediately in the as intended. consolidated income statement. Assets in the course of construction are carried at cost, less any Derivatives embedded in commercial contracts are treated as recognised impairment loss. Depreciation commences when the separate derivatives when their risks and characteristics are not assets are ready for their intended use. closely related to those of the underlying contract, with unrealised Depreciation is charged so as to write-off the cost, other than gains or losses reported in the consolidated income statement. freehold land and assets under construction which are not depreciated, using the straight-line method over the estimated useful Trade payables lives of buildings (15–67 years) and plant and machinery (3–25 years). Trade payables are not interest bearing. Payments occur over a short period and are subject to an insignificant risk of changes in Assets held under finance leases are depreciated over their expected value. Therefore balances are stated at their nominal value. useful lives on the same basis as owned assets or, where shorter, over the term of the relevant lease. The gain or loss arising on the disposal or retirement of an asset is determined as the difference between the sale proceeds and the carrying amount of the asset and is recognised in the consolidated income statement. requ use In accordance with the transitional provisions ofIFR provisions transitional the with In accordance Share ca Share share-based payments are measured at fair value at the dateo atthe value atfair measured are payments share-based the Group’s equity holders. Group’sthe equity the on based period, vesting the over basis straight-line has been applied to all to all applied been has received, net ofan net received, of, consideration any disposed or reissued subsequently are shares w Where such shares are cancelled are shares such Where includin prio on based estimated receivables, doubtful for of allowances 2002 t 2002 a a a Ordinar a Black- amodified or model ofastochastic by use measured is value Fair g T S Th a obligation apresent has Group the when recognised are Provisions Provision a T environment economic current ofthe assessment and experience Th T Credit risk policies 3 Accounting limited because the counterparties are banks with high credit ratings credit high with banks are counterparties the because limited where it is jud is it where obli the to settle required expenditure ofthe estimate best directors’ Where the Grou the Where of non-market based vestin based of non-market effect the for adjusted and vest eventually will that ofshares estimate est respect of libel liti oflibel respect holders until the shares are cancelled, reissued or dis or reissued cancelled, are shares the until holders to Group’s the equity attributable equity from deducted is taxes, cancelled is shown in the ca the in shown is cancelled large number of counterparties and customers and ofcounterparties number large a over spread exposure with risk, ofcredit concentration significant ttributable to the issue of new shares or options are shown in equity equity in shown are options or shares ofnew to issue the ttributable s a deduction from the the from s adeduction the that probable is it and event, ofapast s aresult The agencies. credit-rating by international ssigned n n rant. The fair value determined at the atthe determined value fair The rant. he is instruments financial derivative and funds liquid on risk credit he receivables. to trade its attributable primarily is Group’s risk he credit hare-based payment h d d ese accrua presente e amounts i ere t mates, g d t G b i ation at the reportin atthe ation re

h i e n t roup issues equity-settled benefits to certain employees. employees. to certain benefits equity-settled issues roup e re h d h h y g at to sett to av h shares are classified as e as classified are shares e any directly attributable incremental costs, net ofincome net costs, incremental attributable directly any e mo l h ate i f p oura or t s a ff ita d ect d g l not veste not s are s are h d

ed probable that dama that probable ed l e t i l l e cons ncome tax e tax ncome p e i g s mater ’s own shares are l

h ation in pro in ation y h ff at o directl i as nc ects o ects id l d b u g bli erat d

een a d g rants of equity instruments after 7 November 7November after instruments ofequity rants p i i n t a as o gat date, and are discounted to present value to present discounted are date, and e roceeds, net oftax. net roceeds, y l f . d non-trans S attributable incremental transaction costs costs transaction incremental attributable i s g ons. h A

p i ff choles calculation. The expected life life expected The calculation. choles conditions i on. e conso n current n current g ccrua ital redem dj ects, ects, f 3 ress and for estimated dama estimated for and ress uste P J , the nominal value of shares ofshares value nominal the continued rov anuary 2005. 2005. anuary q l i s are ma s are p s uit d urchased, the consideration consideration the urchased, lid , i f i s nc era g y b g i li . Incremental costs directl costs . Incremental ons are measure are ons ate es will be payable. p a ase . rant date is expensed on a a on expensed is date rant l u tion reserve. Where such such Where reserve. tion bili bili d d d e t

ty, exerc i b d es d on t ( a e Monte-

i . l . n equ ance s f or Th h e l ese equ ega S i di se restr G i G 2, the standard 2, standard the p ty attr ty C h rectors osed of. roup has no has roup roup will be arlo binomial l eet are net net are eet costs costs G d att roup’s ib i ty-sett g i ct uta es ’ h

i i b n ons, ons, e f r est est

bl y p e to e to l

. e aid aid d )

Impairment of goodwill and other intangible asset intangible other and goodwill of Impairment K if r a i Jud A f h ab I a C f c o I N w a D D ch D D a Ad v A Retirement benefit di e i c i D a o e concernin key assumptions The to their nature but are separately disclosed on the face ofthe face the on disclosed separately are but nature to their mpa ntan n use calculation requires the Group to estimate the future cash flows flows cash future the to estimate Group the requires calculation n use tems which are deemed to non-recurrin be deemed are which tems n the process of applying the Group’s accounting policies, described policies, Group’s the accounting ofapplying process n the inancial statements inancial Group ofthe performance inancial eviewed for impairment at each reportin ateach impairment for eviewed necessary ar xpecte s a liabilit ssumpt onsolidated income statement to assist in understandin in to assist statement income onsolidated na nd liabilities within the next financial year, are discussed below: year, discussed are financial next the within liabilities nd ash- st ave the most significant effect on the amounts recognised in the the in recognised amounts the on effect significant most ave the f causin r size are included under the statutory classification appropriate appropriate classification statutory the under included are r size ccounting policies ctuar cquisitions and intangible asset intangible and cquisitions er eterminin ividend distributions to the Company’s shareholders are recognised recognised are to shareholders Company’s the distributions ividend scount rate ey sources of estimation uncertaint ofestimation ey sources hich the dividends are approved are dividends the hich er on-recurring items on-recurring ritical jud ividend distributions ange s ove, management ove, management v i y mat i l g i vat i ys t ce vat gibl i ements have been made in respect of the identification o identification ofthe respect in made been have ements re h g i i e sur s. i a eneratin i d ve i on uncerta s source d i l e assets e assets assumpt requ ve ve i g Th ons. i to ar to gn y fi a material adjustment to carryin the adjustment amaterial g in the consolidated financial statements in the the in statements financial consolidated the in nanc pl e . fi whether whether ifi nanc us or i i g cant i n n or res an est an res i se g ements in applyin i t i i unit to which these have been allocated. The value The allocated. been have these to which unit d a a b

f d l l i l va

f ons a rom t rom y ase i i i rom rom nty att nty d er to ca nstruments are recogn are nstruments a : f e rom per rom l s l h

g uat fi i d c as ma nstrument oodwill and other intan other and oodwill on pre-acqu i h i d n i t o mat i e cas ons o d opte h epen l f e report cu

A Trinit d i nnua on o i d o e l d ate present va ate present e t h d fi f an acqu y ne -generat d to per to g l

Mirror R h ent actuar f the future and other key sources of of key sources other and future the e t . e d d s p . i h ng

ort ort externa f b e va o i s i g re ene s ll & p i i ow t the Group’s the d o

lc i A d on ate, t d. i ccounts 2010 l g ng un

ue fi i i ntang date, or more frequently frequently date, more or ng i t se f i orecasts an orecasts g p es l i

l n use o n use ue by virtue of their nature oftheir by virtue f h ens d j actors can s can actors g u y g at at i i t an ible assets are are assets ible d n se . amounts ofassets amounts ibl gements t gements i h on sc f e assets are e assets ave as a d i l r va ect f asu t h h i e d l n ue an emes. s 65 mar g g i i ta gn i p su the the gn h bl eriod in at ifi ifi e i k d ta cant r f cant et et

can can bl e l y i s k

Financials Governance Business review Who we are Trinity Mirror plc 66 Annual Report & Accounts 2010

Notes to the consolidated financial statements continued

4 Revenue 2010 2009 £m £m Advertising 351.3 331.8 Circulation 317.4 339.3 Other 92.8 92.2 Total 761.5 763.3

5 Operating segments The Group has adopted IFRS 8 which requires operating segments to be identified on the basis of internal reports about components of the Group that are regularly reviewed by the Board and chief operating decision maker to allocate resources to the segments and to assess their performance. The segments reported under IFRS 8 are no different to those previously reported as they reflect the operating segments of the Group about which financial information is regularly reviewed by the Board and chief operating decision maker in assessing performance and allocating resources. The Regionals division publishes a large portfolio of newspaper and online brands across the UK. The Nationals division publishes two daily and three Sunday newspapers and related online brands and activities primarily in the UK. Central includes costs not allocated to the operational divisions and the share of results of associates. The revenues and costs of each segment are clearly identifiable and allocated according to where they arise. The Group is not subject to significant seasonality during the year. The accounting policies used in the preparation of each segment’s revenue and results are the same as the Group’s accounting polices described in note 3 on pages 62 to 65.

Segment revenue and results Regionals Nationals Central Total 2010 2010 2010 2010 £m £m £m £m Revenue Segment sales 339.5 443.8 – 783.3 Inter-segment sales (8.3) (13.5) – (21.8) Total revenue 331.2 430.3 – 761.5 Segment result 51.7 86.1 (14.5) 123.3 Amortisation (6.0) Non-recurring items 20.7 Operating profit 138.0 Investment revenues 1.4 Pension finance charge (7.1) Finance costs (8.6) Profit before tax 123.7 Tax charge (10.4) Profit for the period 113.3 R Segment resul Investment revenue Investment revenue Total Continental Euro United Kin the for Profit tax before Profit Finance costs A T Kin United the in located are Group’sThe operations char Tax P Operating profi Non-recurring items Inter-se S R continue results and revenue Segment continued segments 5 Operating

ota ens egment sales m es evenu o t rt l i o on isa f W g e ge fi ment sales t nance c ion o g rl dom and Republic of Ireland d p eriod t pe t h arge s d g dom. The Group’s revenue by location of customers is set out below: out set is ofcustomers Group’s by location The dom. revenue Re 3 3 g 29460. 35.9 02.9 11. ionals 2 ( 8.9) 009 £ m 8 T Annual Re r i n i National t y 4

Mi 8 6 2009 ( p rror 7.4) 3.6 7. £m ort & Accounts 2010 &Accounts ort 4 8 s pl c 756.1 7 C ( 41 105.4 14.1) 6 entra 2009 20 1. 1.0 4.4 £ £m 1 m 5 763.3 – – – 0 l

67 757. 7 77 ( ( ( (16.3) (11.3) 12.7 34.7 10.5 63 87.0 2 4 2009 2009 2009 ( T 7.1 5.4 0 9 2 0.2 9 otal £m £m . . . . . 3 9 0 3 0 6 ) ) ) )

Financials Governance Business review Who we are Trinity Mirror plc 68 Annual Report & Accounts 2010

Notes to the consolidated financial statements continued

6 Result for the year 2010 2009 £m £m Operating profit for the period is arrived at after (charging)/crediting: Staff costs (note 7) (244.4) (251.2) Cost of inventories recognised as a cost of sales (116.8) (120.2) Depreciation of property, plant and equipment: – owned assets (33.9) (35.9) – under finance leases – (0.9) Amortisation of intangible assets (6.0) (7.1) Operating lease rentals payable: – property (6.6) (6.3) – vehicles, plant and equipment (3.3) (3.8) Trade receivables impairment (1.6) (8.8) Net foreign exchange loss (0.1) (0.4) Non-recurring items (note 8) 20.7 (11.3) Auditors’ remuneration: Audit fees payable to the Company’s auditors for: – the audit of the Company’s annual accounts (0.3) (0.3) – the audit of the Company’s subsidiaries pursuant to legislation (0.5) (0.5) Total audit fees (0.8) (0.8) Non-audit fees payable to the Company’s auditors for: – other services pursuant to legislation (0.1) (0.1) – other services relating to taxation (0.2) (0.1) – other services relating to corporate finance transactions (0.3) – Total non-audit fees (0.6) (0.2)

In addition to the amounts shown above, the auditors received fees of £21,700 (2009: £20,000) for the audit of two of the Group’s pension schemes. There were no future services contracted at the reporting date (2009: £nil). A description of the work of the Audit & Risk Committee is set out in the Corporate Governance Report on pages 40 to 45 and includes an explanation of how auditor objectivity and independence are safeguarded when non-audit services are provided by the auditors. Total administrative expenses included in operating profit amounted to £150.2 million (2009: £205.3 million) including non-recurring items (note 8) amounting to a credit of £20.7 million (2009: £11.3 million charge) and amortisation of intangible assets of £6.0 million (2009: £7.1 million). Total share of results of associates amounted to a profit of £0.7 million (2009: £0.5 million). Total foreign exchange loss during the period was £9.0 million (2009: £32.9 million gain) comprising a net foreign exchange loss of £0.1 million (2009: £0.4 million loss) included in operating profit and a loss on the retranslation of borrowings of £8.9 million (2009: £33.3 million gain) included in finance costs (note 10).

during the period due to the impracticality of determining an average an ofdetermining to impracticality the due period the during ( ( ( ( ( ( ( T L I D P R R G items 8 Non-recurring R r D S S W Pension costs – defined benefit benefit –defined costs Pension contribution –defined costs Pension S A A Sa P T costs 7 Staff d e c a m g f b e ) oss on ota he average number of persons, including executive directors, employed by the Group in the period was: period the in Group by the employed directors, executive including ofpersons, number average he dministration ro ro ocial securit hare-based taff costs, including directors’ emoluments, incurred during the period were period the during incurred emoluments, directors’ including costs, taff ll employees are employed in the United Kin United the in employed are employees ll elease of accrual estructur emunerat ) ) e isclosure of individual directors’ remuneration, share options, lon options, share remuneration, directors’ ofindividual isclosure )

) ain on ac on ain ) ) q ages an ages

In 2009, the the 2009, In The The

p l fi es uired b fi d airment of receivables In 2009, there was an impairment of receivables of of receivables impairment an was there 2009, In w The Defined benefit together with a gain on a cancelled contract of contract acancelled on again with together ne and the impact on redundancies redundancies on impact and the G c o Restructuring charges of charges Restructuring of gain accounting ofan consists ofbusiness acquisitions on gain The t on t on uct l larification of certain members’ benefits less a curtailment of acurtailment less benefits members’ ofcertain larification f the new operatin new f the

non-recurr h roup indicatin a d o n

i l G G b on an di d esa di ene

roup disposed of surplus land and buildin and land ofsurplus disposed roup rou d y s i d sposa q ng c i the Com the sa p on report on pages 47 pages to on 52 an report on i uisition of business l s e osa p y fi tri p d t l cost di released accruals of accruals released ar a bu h e p y str G l arge i l o ens e o di ments in the the in ments ti roup disposed of disposed roup i s s ib f o ng tor g f

s ( p

c b n l that it will no lon no will it that utor go ) p i an ension scheme liabilities increased b s on sc us i anies Act 2006 and those elements s elements those and 2006 Act anies a ( i b g tem d ) l i ness model for the the for model an (f) h s d i eme ng (

£ g b ) p 11.1 million u ( i a eriod nto a p ) ildi s ension schemes ( e ) n G £ gs d g p ( ( 3.6 million for costs which no are further ex 2009: 2009: lobespan Media Limited incurring a loss on disposal of disposal on aloss incurring Limited Media lobespan note 32 m er exercise discretion in providin ension schemes ( G d ) i n roup ( i 2009: 2009: strat d £

f g . ) orm part o part orm 9.9 million reduction in respect of the gain relating curtailment to redundancies and the dom and Republic of Ireland. The above excludes casual employees workin employees casual excludes above The ofIreland. Republic and dom i on. £ 17.9 million ( £ note 33 g 4.8 million transaction less costs s realisin £ ( f note 33 6.0 million which related to the write of off circulation receivables followin t y h

) £ ese conso p 0.4 million in res ) ecified for audit b audit for ecified were incurred in the delivery of cost reduction measures and implementation and measures reduction ofcost delivery the in incurred were g a profit on disposal of disposal on aprofit ) £ g 7.9 million relating to the -term incentive schemes, pension contributions and pension entitlements entitlements pension and contributions pension schemes, incentive -term . lid g enhancements to past service on redundancy on service to past enhancements ate £ d 28.4 million representing negative goodwill of

p : fi ect ofa ect nanc y the Financial Services Authorit Services Financial the p ected. i a l statements £ £ p 1.1 million. 1.3 million ast service cost of cost service ast G £ roup closing the schemes to future accrual accrual to future schemes the closing roup 2.4 million. . ( 2009: 2009: A Trinit nnua y £ l

Mirror R 5.1 million £ e p 8.3 million in relation to the ort ort y & p are shown in the tables in the the in tables the in shown are

lc A ccounts 2010 ) . ) . N ( ( 1 3 6 1,576 244.4 210.3 u ( ( £ m , , ,1 20 2 20.4 11.1 2 2 20 650 888 ( ( ( ( g 23.6 million 1. 3 7. 4.6 7.0 2.1 0.4 010 010 010 ber £ £ 86 for the Group Group the for 1 .7 . m m 3 6 3 – – 0 ) ) ) ) ) ) ) )

g 69 a ( ( Numbe 251.2 211.8 6,816 2,147 3,452 1 ( ( ( ( 11.3 17.9 15.5 19.6 , 2 2009 2 217 ( ( ( ( 2.4 6.0 1.1 3.2 9.9 5.1 009 009 £ £ m m – – r ) ) ) ) ) ) ) ) ) )

Financials Governance Business review Who we are Trinity Mirror plc 70 Annual Report & Accounts 2010

Notes to the consolidated financial statements continued

9 Investment revenues 2010 2009 £m £m Interest income on bank deposits and other interest receipts 1.4 0.2

Other interest receipts include £0.9 million of interest received during the period on the refund of VAT on share issue costs in prior periods.

10 Finance costs 2010 2009 £m £m Interest on bank overdrafts and borrowings (16.1) (21.8) Interest on obligations under finance leases – (0.6) Total interest expense (16.1) (22.4) Fair value gain/(loss) on derivative financial instruments 16.4 (45.6) Foreign exchange (loss)/gain on retranslation of borrowings (8.9) 33.3 Finance costs (8.6) (34.7)

11 Tax 2010 2009 £m £m Current tax Corporation tax charge for the period (25.9) (18.0) Prior period adjustment 4.7 (1.6) Current tax charge (21.2) (19.6) Deferred tax (note 21) Deferred tax credit for the period 0.1 6.0 Deferred tax rate change 11.4 – Prior period adjustment (0.7) 0.9 Deferred tax credit 10.8 6.9 Tax charge (10.4) (12.7)

Reconciliation of tax ()/(charge)/credit % % Standard rate of corporation tax 28.0 28.0 Tax effect of items that are not deductible in determining taxable profit/(loss) 1.4 4.9 Tax effect of items that are not taxable in determining taxable profit/(loss) (7.3) (4.0) Deferred tax rate change (9.3) – Prior period adjustment (3.2) 1.7 Utilisation of tax losses (0.9) – Tax effect of share of results of associates (0.3) (0.4) Tax charge rate 8.4 30.2

The standard rate of corporation tax is the UK prevailing rate of 28% (2009: 28%). The current tax liabilities amounted to £18.9 million (2009: £23.0 million) at the reporting date. The tax in respect of actuarial gains on defined benefit pension schemes taken to the statement of comprehensive income of £30.4 million (2009: £29.6 million tax in respect of actuarial losses) comprises a current tax credit of £6.2 million (2009: £4.6 million credit) and a deferred tax charge of £36.6 million (2009: £25.0 million credit). The change in the standard rate of corporation tax from 28% to 27% is effective from 1 April 2011. The impact on the opening deferred tax position being recalculated is a £11.4 million credit in the income statement and a £3.0 million debit in the statement of comprehensive income. Tax legislation change Defined benefit pension scheme pension benefit Defined

Impact of the fair value gain value fair ofthe Impact ofintan Amortisation Impairment of receivables tax (after items Non-recurring items*: Adjusted P R Gain on ac A Gain/(loss) per shar per Gain/(loss) L R Th * E Earnin Adj E B Wei Wei Eff non-recurrin of exclusion tothe relate items Adjusted * tax (after ofborrowings retranslation on (loss)/gain exchange Foreign the for Profit P share per 13 Earnings period. either for declared is dividend No 12 Dividends 7,3 3 9, 25 5 5 25 9, 3 7,3 assum shares durin

d Adj derivative financial instruments and the impact of tax legislation changes. A reconciliation between the adjusted result and th and result adjusted the between Areconciliation changes. legislation tax of impact the and instruments financial derivative oss on djusted earnin rofit on disposal of land and buildin and ofland disposal on rofit arn arn ro estructuring costs estructuring e as er ect o e l ease o uste uste i g g vat i fi c earn b hted avera hted avera i i t a as ngs per s per ngs s per ngs i ve d p g d f

tion of conversion of all ofall ofconversion tion i i f

tems re tems fi c earn di p s per share –basic share s per earn ter tax tax ter nanc f otent sposa accrua ( i q 2009: 5,016,0262009: ngs per s per ngs uisition of business g i a the period. Diluted earnin Diluted period. the i l l ate tot ate ngs

p i i i nstruments an n g g g a eriod h h g l b lly e number of ordinary shares for diluted earnin diluted for shares ofordinary e number earnin basic for shares ofordinary e number s* per share –basi share s* per o are – are s per s s per * ls e

per s per f h dil

f b e exc h ore a us ut are e i i dil ve or l ness us h h i are – are s ca are d dj i ute on o t ) h . uste di e i f l i mpact d non-recurr mpact o g cu nar dil p ibles (after tax (after ibles s s otentiall l d ate ute y

s i c tems gs d f d h tax tax f /( or eac

ares b loss i ng ) g y g l y eg s per share is calculated by adjustin calculated is share s per items, the amortisation of intan of amortisation the items, i di dilutive ordinar tems, t tems, * i ) s i on derivative financial instruments instruments financial derivative on v n res l at h idi i cate on c ) ng pro h e amort p h ect o anges. g ory o ory fi i sat t attr f A s i on o reconc y f h non-recurr shares. The number of number The shares. are o ib f

i uta ntang g ili g s per shar s per at p bl s per share s per g i on t ibl ible assets, the retranslation of forei of retranslation the assets, ible i e to equ on e assets, t e assets, b etween t etween s i n g

i e tem tem i h ty h e retrans e a g h di dj the wei the o ( ) after tax after uste sc ld ers o l l ose p at d resu otentiall i on o d g f t ) l

hted avera f t an

i f n note 8 h ore e parent e parent d i y t g gn currency h dilutive ordinar n currency borrowin e statutory result is provided in note 38 on page 99. page on 38 note in provided is result e statutory e statutory resu i s as s as g b e number of ordinary shares in issue on the on issue in shares ofordinary e number y t A Trinit b nnua orrow f h o e we ll y l ows: t l

Mirror R i i s prov ngs, t e g y p s, the impact of fair value chan value fair of impact the s, i shares not currentl not shares ort ort g h h id & p te e

e lc A i d mpact o d ccounts 2010

i average num average n note 38 on page 99 page on 38 n note Thousan 2 2 f 53 54

f a 113.3 P P i r va , 11.4 1 28 7 11. 44. 28 28.6 , 12. 44. e enc 2 20 20 20 736 454 71 (6.5) ( ( ( 2 2 0.5 1 4.4 0.1 3.1 n 010 010 £ l ce 1 1 1 ue c . . . . . m 8 0 2 6 0 4 3 5 6 5 – – d e 0 0 0 ) ) )

h y b anges on dilutive was er o 71 . g es on f 2 2 or Thousan 57 55 1, di ( P P 32.8 23.9 2 ,863 , 11.4 11. 1 51.1 29.3 2009 2009 2 2009 989 874 ( ( ( ( ( ( e ence nary nary 3.0 1.1 1.7 5.0 5.1) 7.8) 2.0 2.8 9 0 009 n £m . . ce 5 8 0 – – – d ) ) ) ) )

Financials Governance Business review Who we are Trinity Mirror plc 72 Annual Report & Accounts 2010

Notes to the consolidated financial statements continued

14 Goodwill 2010 2009 £m £m Opening balance 74.5 77.0 Adjustment to deferred consideration – (1.9) Disposals (note 38) – (0.6) Closing balance 74.5 74.5

In 2009 the adjustment to deferred consideration related to the reduction in the estimate of the amount payable in respect of acquisitions made in prior periods. Goodwill is allocated to cash-generating units. The carrying value of goodwill analysed by business segment is as follows:

2010 2009 £m £m Regionals 72.3 72.3 Nationals 2.2 2.2 Total 74.5 74.5

The Regionals division comprises nine (2009: eight) cash-generating units. The Nationals division comprises a single cash-generating unit. The Group tests the carrying value of goodwill at the cash-generating unit level for impairment at each reporting date or more frequently if there are indications that goodwill might be impaired. At the period end reporting date, a review was undertaken on a value in use basis, assessing whether the carrying value of goodwill was supported by the net present value of future cash flows derived from those assets, using cash flow projections in respect of periods to 2020. The key assumptions used in the value in use calculations are those regarding the discount rate, revenue and cost growth rates and the level of capital expenditure required. The post-tax discount rate used at the period end reporting date was 7.0% (2009: 7.0%) reflecting a long-term equity and debt mix based on the period end enterprise value assuming a long-term debt to EBITDA ratio of 2.5 times. The equivalent pre-tax discount rate is 8.8% (2009: 8.0%). The Group prepares cash flow forecasts derived from the most recently detailed approved annual budget and two year projections for 2011 to 2013 and high level projections for 2014 to 2020. The cash flow forecasts reflect past experience of and the risk associated with each asset. Cash flows beyond 2020 are extrapolated based on estimated growth rates which do not exceed the average long-term growth rates for the relevant markets. Capital expenditure cash flows have been forecast to reflect the cycle of capital investment required, including printing press replacement. Management believes it is appropriate to forecast for a period of greater than five years to most appropriately reflect the cash flows relating to the cash-generating units and to reflect the recovery from the current cyclical downturn. We have assumed our current projected performance for 2011 to 2013 and then revenue growth rates in the 2014 to 2020 projections in the range between 0% and 7% which vary with management’s view of the cash-generating units market position and maturity of the relevant market. The perpetuity growth rates used from 2020 vary between 0% and 2.5%. The impairment review is sensitive to a change in key assumptions used, most notably the discount rate and the perpetuity growth rates. With the exception of the online specialist national recruitment cash-generating unit, based on the Group’s sensitivity analysis, a modest change in a single factor will not result in a material impairment in any of the Group’s cash-generating units. With the exception of the online specialist national recruitment cash-generating unit, a reasonably possible change of 1% in the discount rate or 1% in the perpetuity growth rates would not change the conclusions of the impairment review. The online specialist national recruitment cash-generating unit has a headroom of £6 million at the reporting date. A change in the discount rate of 7.0% of 0.4% or the perpetuity growth rate of 2.5% by 0.6% would eradicate the headroom. Additions Additions Amortisatio Accumulated amortisatio Disposals a Th T publishin a T A Carryin At 2Januar Am A A A A 2 At Cos 15 assets intangible Other

that no impairment was required required was impairment no that t At 3Januar ever chan ever w h t eac nd domain names mi names nd domain he impairment review of the carrying value of the Group’s publishing rights and titles performed at the period end reporting da reporting end period atthe performed titles and rights Group’s ofthe value publishing carrying ofthe review impairment he carryin the tests Group he t 3 t 28 201 t 3January t 201 t 2January i e cas t e customer re e customer hi 2 o 8

n t t J rti J D anuary 201anuary D h anuary anuary sa h h report ecem ece e cas g -generat g ti amount g ( on ri ( note 36 note 38 in m n y g 201 g y b be hts and titles have indefinite economic lives due to the historic lon to historic the due lives economic indefinite have titles hts and h i 201 media landscape. It is not practicable to review individual publishin individual to review practicable not Itis landscape. media ng er 2008 20 -generat r 2 l at 0 0 0 i 1 ng un d ) 008 ) 1 1 1 i ate or more ate more or ons g hi i i t ht be impaired ng un ps an l eve g value ofpublishin value n l

i f ts. d or f

requent d i ( mpa oma 2009: no impairment i i . n names n names rment ateac rment l y if t h ere are are ere g ri i nc g l hts and titles with indefinite economic lives at the cash- atthe lives economic indefinite with titles hts and u h d report i n e di ) . The impairment review was based on comparing carrying value with value in use in value with value carrying comparing on based was review impairment . The d cat a b i i ng ove ons t d h ate or more ate more or h ave est at pu bli i mate s hi ng r f requent d g use evity of the brands and the ability to evolve the brands in the in brands the to evolve ability the and brands ofthe evity i g g h ri ts an f u g l y l hts and titles due to the interdependencies of the inflows inflows ofthe to interdependencies the due titles hts and

li if ves o ves t d h t ere are are ere i t l es m f

b etween etween i g i n h di T Annual Re t r b cat Publishin i n a ,5. 41.4 1,852.8 42. 1 1,822.8 e i fi ty nd titles ( , ve an ( ( i i 965.0 965.0) 2. 141 41.4 822.8 88 8 965.0 ons t mpa Mi rights g 3 57. p rror p eneratin 0.0 7. £ ort & Accounts 2010 &Accounts ort m 8 8 – – – g d i h re ) ) 10 an years at customer re at customer l d c . Th relationships g and domain unit level for impairment for level unit e C ustomer di n rectors cons rectors ( ( ( ames 27.8 20.7) 1 33.8 ( ( ( 6.0 7.1 1.1 7. 3 d £ . m are teste are 5 6 6 – l ) ) ) ) ) at te indicated i ons 73 hi id d 1 1,865.3 ps at e ( ,894.2 , ( ( 992.8 985.7) 864.2 895 8 998.8 G r . 71.4 30.0 roup roup total ( ( ( 6.0 7.1 1.1 £ .4 m ) ) ) ) )

Financials Governance Business review Who we are Trinity Mirror plc 74 Annual Report & Accounts 2010

Notes to the consolidated financial statements continued

15 Other intangible assets continued The carrying value of other intangible assets analysed by business segment is as follows:

Customer CCustomer Publishing relationships Publishing relationships rights and domain Total rights and domain Total and titles names 2010 and titles names 2009 £m £m £m £m £m £m Regionals 240.8 7.6 248.4 210.8 13.6 224.4 Nationals 647.0 – 647.0 647.0 – 647.0 Total 887.8 7.6 895.4 857.8 13.6 871.4

The Regionals division comprises nine (2009: eight) cash-generating units. The Nationals division comprises a single cash-generating unit. At the period end reporting date a review was undertaken to determine value in use to assess whether the carrying value of publishing rights and titles, customer relationships and domain names were supported. Value in use was based on net present value of future cash flows derived from those assets, using cash flow projections in respect of periods to 2020. The key assumptions used in the value in use calculations are those regarding the discount rate, revenue and cost growth rates and the level of capital expenditure required. The post-tax discount rate used at the period end reporting date was 7.0% (2009: 7.0%) reflecting a long-term equity and debt mix based on the period end enterprise value assuming a long-term debt to EBITDA ratio of 2.5 times. The Group prepares cash flow forecasts derived from the most recently approved detailed annual budget and two year projections for 2011 to 2013 and high level projections for 2014 to 2020. The equivalent pre-tax discount rate is 8.8% (2009: 8.0%). The cash flow forecasts reflect past experience of and the risk associated with each asset. Cash flows beyond 2020 are extrapolated based on estimated growth rates which do not exceed the average long-term growth rates for the relevant markets. Capital expenditure cash flows have been forecast to reflect the cycle of capital investment required including printing press replacement. Management believes it is appropriate to forecast for a period of greater than five years to most appropriately reflect the cash flows relating to the cash-generating units and to reflect recovery from the current cyclical downturn. We have assumed our current projected performance for 2011 to 2013 and then revenue growth rates in the 2014 to 2020 projections in the range between 0% and 7% which vary with management’s view of the cash-generating units market position and maturity of the relevant market. The perpetuity growth rates used from 2020 vary between 0% and 2.5%. The sensitivity of the impairment review to changes in key assumptions is set out in note 14. Expenditure contracted for but not provided in the consolidated financial statements financial consolidated the in provided not but for contracted Expenditure Disposals A A A Disposal of undertaking subsidiary 2 At Cost equipment and plant 16 Property, D Di W R W D W Di C A Char A period the for Charge A A A ofassets Write-off Reclassificatio Included within the carryin the within Included A A Carryin Addition Depreciation for the period on those assets was was assets those on period the for Depreciation t 3 t 3Januar t 2 t 3 dd c ec t t 2Januar t ccumulated de is undertakin ofsubsidiary isposal a s s r ofassets rite-off rit q i 2 2 p p p p te-o e 8 8 l uisition of busines iti

ass osals osa osa J J ital commitments g J J - D

o anuary 201anuary anuary 201anuary Dece o e for the period the e for anuar anuar n ff ff ece ifi l l s s g o s s o cat amount f f assets m m asse y i 201 y y y on be be 2011

n 20 20 r 2 r 2 t s 0 0 0 11 11 008 008 p reciation and im s g amount of property, plant and equipment is is equipment and plant ofproperty, amount g p airmen t £ nil ( 2009: 2009: £ 0.9 million ) . F £ reehold 1 1. 1 212.4 1. 1935799558.7 9.9 315.7 21.9 211.2 2 1 nil ( ( ( 26.5 21.8 0 82 8 30.3 Land andbuildings ( ( ( ( ( ( 2.2 0.3 2.0 0.3 4.3 4.9 2 1. 1.2 4. . 17. 4.7 0 0 0 . 4.4 7.6 ( £m 2009: 2009: . 115.4 .1 1. . .2 . 8 0 6 3 2 – – ––0 3.7 – ) ) ) ) ) ) ) ) ) £ nil Leasehold ) in respect of assets under finance leases. finance under ofassets respect in 21. ( ( ( ( ( ( ( ( ( .)(60 01 (80.1) (0.1) 3.1 (76.0) 4.0) 0.1 0.1 0.8 4.6 0.9 7.4 . 9. 8 0.1 0 0 3.5 £m . . .1 6 9 1 3 8 – – – – ) ) ) ) ) ) ) ) A Trinity Mirror plc Mirror Trinity nnua e quipment Plant and ( ( ( l 104.4 149.3 38 3 209 2 103.3

R ( ( ( 29.9 28.8 31.0 12. 11. 29 7 e ( ( p 1.7) 0.1) . . 13.0 2.7 7 9.3 6 7. 5. £ ort ort . .4 .2 . . m 3 3 8 0 3 9 8 1 – – – – ) ) ) ) ) & )

A ccounts 2010 Assets under c onstruction ( 10.3) 1 20 ( 8.8 6 3 3 0 3 9 £ £ 1 . .7 . . . . m m 6 8 3 8 9 1 – – – – 2.0 – – 79.5 – 0.1 – – – – – – – – 0 )

75 ( ( ( 135.5 178.5 41 4 5 6 137.1 ( ( ( 33.9 36.8 30.3 23 47.4 27.2 30 14. Total 2009 ( ( ( ( 0.9 3.4 2.3 0.1) 2 0 0 0 £ £ .4 . . . . . m m 3 2 3 2 3 0 – ) ) ) ) ) ) ) ) )

Financials Governance Business review Who we are Trinity Mirror plc 76 Annual Report & Accounts 2010

Notes to the consolidated financial statements continued

17 Investment in associates The Group has a 21.54% interest in PA Group Limited, a news agency incorporated in England and Wales.

2010 2009 £m £m Opening balance 6.3 7.5 Share of results of associates: Results recognised in the consolidated income statement 0.7 0.5 Share of actuarial losses recognised in equity (1.6) (1.7) Closing balance 5.4 6.3

2010 2009 PA Group Limited £m £m Total assets 58.0 62.0 Total liabilities (32.6) (32.4) Net assets 25.4 29.6 Group’s share of net assets 5.4 6.3 Revenue 82.8 85.6 Profit for the period 3.4 2.4 Group’s share of results for the period 0.7 0.5

The financial statements of PA Group Limited are made up to 31 December each year. For the purposes of applying the equity method of accounting, the audited financial statements of PA Group Limited for the year ended 31 December 2009 together with the management accounts up to the end of December 2010 have been used with appropriate year end adjustments made.

18 Inventories 2010 2009 £m £m Raw materials and consumables 7.3 5.9

The Group consumed £116.8 million (2009: £120.2 million) of inventories during the period.

19 Other financial assets 2010 2009 Trade and other receivables £m £m Gross trade receivables 84.5 84.2 Allowances for doubtful receivables (6.0) (5.6) Net trade receivables 78.5 78.6 Prepayments and accrued income 19.5 15.1 Other receivables 1.4 1.9 99.4 95.6 present value of the expected liquidation proceeds. The The proceeds. liquidation expected ofthe value present where where period the during reviewed are to customers attributed by customer. Limits limits credit defines and quality customer’s credit potentia the to system assess scoring credit external an uses appropriate, where Group, the customers, new any accepting Before to past default experience.

120+ 120+ da 60–90 un T still considered recoverable. The Group does not hold any collateral over these balances. The average age of these receivables receivables ofthese age average The balances. these over collateral any hold not does Group The recoverable. still considered unre Th C C T To 90–120 day L AAg Th I C Utilisation of Ac I Openin M 90–120 day 60–90 A ( a a T T T receivables trade Net continued assets financial 19 Other prov date credit was initially initially was credit date Included in net trade balanceare receivables debtors amount of with £2.9 a carrying million (2009: £1.7 million) which are pas mpa n determinin 2009: 82days 2009: rade receivables less than 60 days and between 60 days and 120 days are provided for based on specific circumstances and by ref and circumstances specific on based for 120 and days 60 provided are days between and days 60 than less receivables rade rade net receivables of allowances for at doubtfulreceivables the date reporting amounted to £78.5 million (2009: £78.6 millio t the reporting date for which the Group has not provided as there has not been a significant change in credit quality and the the and quality credit in change asignificant been not has there as provided not has Group the which datefor reporting t the ppropriate. There are no customers who represent more than 10% of net trade receivables in either period. either in 10% than receivables more trade ofnet represent who customers no are There ppropriate. ess t o he carrying amount of trade and other receivables approximates their fair value. fair their approximates receivables other and oftrade amount carrying he Gro The receivables. the on 37 (2009: charged days is 40 days). is interest No ofgoods sales on taken period credit average he geing of past due but not impaired receivables impaired not but due past of geing ash and cash equivalents comprise cash held by the by the held cash comprise equivalents cash and ash ash and cash equivalents cash and ash losing balanc o d e carry s no are ere q t t ein al al v er uisition of businesse id l e ate i rment d h m e li g ay d qu an 60 g d of impaired receivables d e a balanc

. s f i nt in y y id n u A s s g ll at s s l ccor y osses recogn amount o p g i d f rovisio on. the recoverability of a trade receivable, the the receivable, ofatrade recoverability the or a ig ). a a e n y di ll e s ifi Th o ll n cant amounts amounts cant rece w gl n e a y, t y, i mpa n f g t i ce h ranted up to reportin up the ranted s va h ere ese assets approx assets ese i se bl f i rment recogn o es over 120 over es d i s no s no r doub i nc f urt l u tf h d u er cre e l d d i deb se

ays ays i n t d i mates t di represents t represents h t b s t prov e a ecause g date. The concentration of credit risk is limited due to the customer base bein base to customer the due limited is risk ofcredit concentration date. The ll owance owance h i s e i on requ i G r hi G f roup and short-term bank deposits with an ori an with deposits bank short-term and roup a stor G h roup does not hold any collateral over these balances. these over collateral any hold not does roup i r va e f roup considers any chan any considers roup or i diff ca i l re d ue. ou l erence exper d

i b n excess o n excess t f u l i

ence d b e etween t etween b ts re i s suc f t h l at e a h i n h e carry t g ll g owance owance h to to e in the credit quality of the trade receivable from the the from receivable trade ofthe quality credit the e in at t i mpa h i ng amount o ese rece i f re or d d tra ou i va A Trinit d b nnua e rece t bl f g u f es are genera are es t y inal maturity of one week or less. less. or week ofone maturity inal l l

Mirror h R d e ese tra ese e p i b ort ort va ts & bl p .

lc A es w ccounts 2010 d e rece hi ll y not recovera y not c h 11 i

va h 2 2 20 20 ( 2. 5 2. 0.3 2 6 6 1 0 6 0 1. 1. 2.0

010 010 010 ave £ £ £ £ bl 1 1 .6 ...... m m m m 9 6 2 0 7 8 3 2 0 8 6 t their due date date due t their 0 0 es an ) amounts are n)

b is 78 days g . een p up has up has lar 77 d l g t bl erence e and e and h l e. ace e 61.2 2009 2009 2 2009 ( 8.5 d 5.6 2 0.6 0 2 5. 8 5 1.7 0 1. 009

£ £ £ £ . . .1 . . .1

m m m m 0 9 6 8 3 6 – )

Financials Governance Business review Who we are Trinity Mirror plc 78 Annual Report & Accounts 2010

Notes to the consolidated financial statements continued

20 Other financial liabilities 2010 2009 Trade and other payables £m £m Trade payables (11.2) (13.3) Social security and other taxes (8.6) (8.4) Accruals and deferred income (78.7) (84.8) Other payables (8.0) (9.1) (106.5) (115.6)

Trade payables principally comprise amounts outstanding for trade purchases and ongoing costs. The average credit period taken for trade purchases is 36 days (2009: 33 days). For most suppliers no interest is charged on the trade payables for the first 60 days from the date of the invoice. Thereafter, interest is charged on the outstanding balances at various interest rates. The Group has financial risk management policies in place to ensure that all payables are paid within the credit timeframe. The carrying amount of trade payables approximates to their fair value.

21 Deferred tax assets and liabilities The following are the major deferred tax assets and liabilities recognised by the Group and movements thereon:

OhOther Accelerated short-term Retirement tax timing Rolled-over benefit Share-based depreciation differences and held-over Intangibles obligations payments Total £m £m gains £m £m £m £m £m At 28 December 2008 (72.8) (4.9) (1.4) (246.3) 57.9 0.2 (267.3) Credit to consolidated income statement 2.1 2.2 – 2.3 0.1 0.2 6.9 Credit to equity – – – – 25.0 – 25.0 At 3 January 2010 (at 28% tax rate) (70.7) (2.7) (1.4) (244.0) 83.0 0.4 (235.4) Change of tax rate applying to deferred tax: Credit to income 2.5 0.1 0.1 8.7 – – 11.4 Charge to equity ––––(2.9) (0.1) (3.0) Revised opening balance at 4 January 2010 (at 27% tax rate) (68.2) (2.6) (1.3) (235.3) 80.1 0.3 (227.0) Acquisition of business 0.2 (2.4) – (8.1) – – (10.3) Credit/(charge) to consolidated income statement (0.6) (1.6) – 1.6 – – (0.6) Charge to equity – – – – (36.6) – (36.6) At 2 January 2011 (68.6) (6.6) (1.3) (241.8) 43.5 0.3 (274.5)

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

2010 2009 £m £m Deferred tax liabilities (318.3) (318.8) Deferred tax assets 43.8 83.4 (274.5) (235.4)

At the reporting date, the Group has unused tax losses of £20.8 million (2009: £11.9 million) available for offset against future profits. No deferred tax asset has been recognised in respect of the tax losses due to the unpredictability of future profit streams. The tax losses can be carried forward indefinitely. The Group also has unrecognised capital losses of £35.9 million (2009: £37.2 million) at the reporting date. Utilisation of provisions

Gain on acquisition of business O * C ( O charge statement ofincome excess in funding Pension A D Dec L P payments share-based for Charge S A D flow statement cash consolidated 24 Notestothe includin subsidiaries, principal ofthe A list Principal23 subsidiaries T T T T T N C Th R statemen income to consolidated Charged R A statemen income to consolidated Charged A 22 Provisions in note 14in note to notes the the in Utilisation of provisions Increase Includin oss on his provision is expected to be utilised durin toutilised be expected is his provision he restructurin remainin the over utilised be will his provision he obli Insurance to National relates provision payments share-based he t 3 t 28 ro hare of results ofassociate ofresults hare mort eleased to consolidated income statemen income to consolidated eleased e t 2Januar ecrease eprec urrent o ash flows from operatin from flows ash perating cash flows before movements in working capital working in movements before flows cash perating peratin e l n- ease fi r p p t on t on J ease cu ro rov anuary 201anuary D i sat g i ecem rr p anon-recurrin at d di i di ) e ert s to conso to /decrease in inventories in /decrease

i i g on o on o i i n sposa i n paya n r sposa ons profi t y y

ecei b p 201 f f er 2008 rovision relates to onerous h property, p property, ot g ave l l o 0 provision relates to non-recurrin the relates provision o t v bl h ables 1 g lid f er es f

char

b l b an ate us i een ana ntan d g i d ness e of e of an

i gibl ncome statemen l ant an £ d 0.4 million g p

b e assets ly activitie arent com u se ildi d d equ n

b g ( 2009: 2009: etween current an s i s pmen p g £ an p 9.9 million credit name, country of incorporation, principal activity and proportion of ordinary shares held is is held shares ofordinary proportion and activity principal ofincorporation, country name, t t ro t t y g p financial statements financial t g the next period. next the ert term of the leases. ofthe term y leases and future committed costs related to occu related costs committed future and leases g ) restructurin described in note 8. note in described * d non-current as as non-current . g severance incurred in the delivery of cost reduction measures. reduction ofcost delivery the in incurred severance g ations attached to the future crystallisation ofawards crystallisation to future the attached ations f o ll ows : S hare-based payments ( ( ( ( ( 0.1) 1.2 0.2) 1.0 1.3 £ m – – – – ) ) ) A Trinit nnua p ied, let and vacant vacant and let ied, Propert y l

Mirror R ( ( ( 10.4 12.9 10.1 e ( ( p 3.8) 2.8) . 3717.6 13.7 1.6 3.9 0.2 2 0.4 4.1 1.2 £m ort ort y ) ) & ) p

lc A ccounts 2010 Restructurin 11 11 1 ( ( ( ( ( ( ( 21 (16.0) 12.1) (21.5) 18.5) 11.5 33 38 14.5 17.3 30.2 28.4 p 20 20 ( ( ( ( ( (1.1 ( 5.7 1 3 0 9 9 2.1 6 8.1 6.4 3.1 1.3 0.7

ro £ £ £ 1 1 01.2 .0 . .1 .1 .4 . . . m m m . 9 0 9 0 – g 0 0 p ) ) ) ) ) ) ) ) ) ) ) )

erties. 79 g iven 1 ( (32.1) (26.5) ( ( ( ( 17.3 10.1 17.3 25.4 97.6 0 23 36 8 2 14.5 T 2 2009 ( ( ( 5.1 0.5 7.2 1.7 4.4 2 3 7 7. 8 o 009 £m £ £ t . .4 .2 .1 . . m m a 6 8 0 0 – l ) ) ) ) ) ) ) )

Financials Governance Business review Who we are Trinity Mirror plc 80 Annual Report & Accounts 2010

Notes to the consolidated financial statements continued

25 Borrowings 2010 2009 £m £m Loan notes (363.9) (355.0) Derivative financial instruments (note 26) (2.2) (6.0) (366.1) (361.0) The borrowings are repayable as follows: or within one year (140.0) (3.1) In the second year (65.8) (137.7) In the third year (51.5) (65.7) In the fourth year (42.7) (50.2) In the fifth year – (41.3) After five years (66.1) (63.0) (366.1) (361.0) The borrowings are included in the consolidated balance sheet as follows: Amount included in non-current liabilities (226.1) (357.9) Amount included in current liabilities (140.0) (3.1) (366.1) (361.0)

The amount included in non-current liabilities represents borrowings of £226.1 million (2009: £355.0 million) and derivative financial instruments of £nil (2009: £2.9 million) and in current liabilities represents borrowings of £137.8 million (2009: £nil) and derivative financial instruments of £2.2 million (2009: £3.1 million). Non-current assets include £12.6 million (2009: £nil) relating to derivative financial instruments which is deducted from borrowings to calculate net debt in note 27.

2010 2009 £m £m Loan notes movement in the period: Opening balance (355.0) (388.3) Foreign exchange (loss)/gain on retranslation (8.9) 33.3 Closing balance (363.9) (355.0)

2010 2009 £m £m Composition of loan notes: US$270 million loan notes (173.3) (168.4) US$252 million loan notes (164.6) (160.6) £16 million loan notes (16.0) (16.0) £10 million loan notes (10.0) (10.0) (363.9) (355.0)

The US private placement loan notes totalling US$522 million and £26 million were issued in 2001 and 2002. On the issue date the capital repayments and fixed rate interest on the US$ denominated loan notes were swapped into floating rate sterling through the use of cross-currency interest rate swaps. As hedge accounting under IAS 39 has not been applied, the loan notes and cross-currency swaps are shown separately in accordance with IAS 39. The loan notes are disclosed at amortised cost and translated into sterling at the reporting date exchange rate and the cross-currency interest rate swaps are disclosed at fair value at the reporting date. These values do not represent the amounts required to repay the loan notes or cancel the related cross-currency interest rate swaps. At 2 January 2011 the Group had available £178.5 million (2009: £178.5 million) of undrawn committed borrowing facilities in respect of which all conditions precedent had been met. All borrowings are denominated in sterling unless otherwise indicated. The bank facility and US private placement loan notes are unsecured. In estimatin In In

to extend the settlement date until dateuntil settlement the to extend the U the cre In up to t C No Th The N Current liabilitie Th C value fair in Movement O T instruments financial Derivative 26 b T £ US da T £ notes loan denominated US$ T 25 Borrowings continued fixed for a period of12 to aperiod months for fixed

he movement in the derivative financial instruments is as follows: as is instruments financial derivative the in movement he excludin liabilities, and assets financial ofother value fair he at estimate rate. The market atthe flows cash future their by discounting estimated is Group’s ofthe value borrowings fair he follows: as date are reporting atthe rates interest effective he oo on-current asset losing asset losin pening de de O O t e cross-currenc e n- $ di e k ctober 2010, the swap in respect of 2010,ctober respect in swap the on payments rate interest floating the converted into which entered was rate swap interest an 2008, ctober i G d denominated loan notes loan denominated n n t r cu va S s o o er roup has cross-currency interest rate swaps to rate mana swaps interest cross-currency has roup h

private placement loan notes. Fair value is calculated using discounted cash flows based upon forward rates available to the available rates forward upon based flows cash discounted using calculated is value Fair notes. loan placement private i min min as g s rr e sett i l vat ues an k. asset e ( f liability nt li o a a i g ve ll t t the fair value of the loan notes the future cash flows have been discounted usin discounted been have flows cash future the notes loan ofthe value fair the ed ed o l ement ab w fi s l l d nanc /( /( s: )/ oa oa iliti are not repeate not are liability liability asse s y es n n

i i nterest rate swa nterest d a o o ate l t

i t t nstruments are are nstruments es es ) ) h as b een d O

i O n t ctober 2009. In April 2009, it was a was it 2009, April In 2009. ctober i nc ctober 2010.ctober In p hi s are c s are l u s ana i nc £ d 135.0 million principal was settledon the due date. The fair value change from the prior end period e l u d d

l l i ys asse e n t d i s. h

i n t e movement e movement d

h i O n e conso ctober 2009, the swap in respect of respect in swap the 2009, ctober l eve l t g h g e its exposure to forei exposure e its lid ree o ree derivative financial instruments in note 26, are not materially different from the from different note materially in 26, not are instruments financial derivative i n ate f a f d i t r va

h b e a l g l ue. fi ance s reed with the counterparties in respect of respect in counterparties the with reed nanc i a h l eet as

i nstruments nstruments g n exchan f o ll ows £ 45.0 million principal was on settled the due date. g hi g : an appropriate discount factor that includes includes that factor discount appropriate an erarc e movements and interest rate movements on on rate movements interest and e movements hy A Trinit nnua . y l

Mirror R e p ort ort & p £

lc A 180.0 million of principal into ccounts 2010 £ 135.0 million of principal ( 337.9 ( 7.22 6 1 1 1 16.4 26.0) 20 2 20 20 ( ( .75 0 2 0 2.2 6.0 010 010 £ £ £ 1 1 1 .4 . .4 % m m m 6 – 0 0 0 the reporting the ) ) )

81 G roup. ( 329.0) (26.0) ( 45.6 6.75 7.22 39 2009 2 2009 2 ( ( ( ( 6.0 3.1 2.9 6.0 009 009 £ £m £ . % m m 6 – ) ) ) ) )

Financials Governance Business review Who we are Trinity Mirror plc 82 Annual Report & Accounts 2010

Notes to the consolidated financial statements continued

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

Consolidated income Transfer 2009 Cash flow statement* to current 2010 £m £m £m £m £m Non-current liabilities Loan notes (355.0) – (8.9) 137.8 (226.1) Derivative financial instruments (2.9) – 2.9 – – (357.9) – (6.0) 137.8 (226.1) Current liabilities Loan notes – – – (137.8) (137.8) Derivative financial instruments (3.1) – 3.1 (2.2) (2.2) (3.1) – 3.1 (140.0) (140.0) Non-current assets Derivative financial instruments – – 10.4 2.2 12.6 – – 10.4 2.2 12.6 Current assets Cash and cash equivalents 61.2 55.0––116.2 61.2 55.0 – – 116.2 Statutory net debt (299.8) 55.0 7.5 – (237.3)

* The impact on the loan notes of translation into sterling at the reporting date exchange rate and the impact on the derivative financial instruments of being stated at fair value at the settlement date or at the reporting date are included in the consolidated income statement within finance costs as set out in note 10. Cash and cash equivalents represent the sum of the Group’s bank balances and cash in hand at the reporting date. The contracted net debt for the Group, assuming that the private placement loan notes and the cross-currency interest rate swaps are not terminated prior to maturity, is as follows:

Consolid ated income Transfer 2009 Cash flow statement* to current 2010 £m £m £m £m £m Non-current liabilities Loan notes (382.1) – – 145.4 (236.7) (382.1) – – 145.4 (236.7) Current liabilities Loan notes –––(145.4) (145.4) Derivative financial instruments (3.1) – 3.1 – – (3.1) – 3.1 (145.4) (145.4) Current assets Cash and cash equivalents 61.2 55.0 – – 116.2 61.2 55.0 – – 116.2 Contracted net debt (324.0) 55.0 3.1 – (265.9)

* Th e impact on the derivative financial instruments of being stated at fair value at the settlement date or at the reporting date are included in the consolidated income statement within finance costs as set out in note 10.

Cross-currenc exchan end atperiod notes Loan Contracted net debt net Contracted Durin A T A Share28 capital and reserves rates exchange atswapped notes Loan deb net Statutory T debt 27 Net R Pu Credit to e T A Cumulative £ earnin retained in Trust Trust’) (‘the included Benefit are Employees’ Trinity by Mirror the purchased Shares p Th senior managers relating to the grant made in 2007 under the Deferred Share Award Plan approved in 2006 in approved AwardPlan Share Deferred the 2007 in under made to grant the relating managers senior been transferred to retained earnin to retained transferred been Credit to e On transition to IFRS, the revalued amounts of freehold offreehold amounts revalued to the IFRS, On transition the Company and utilised £0.6 million of cash held by the Trust to purchase these shares. Durin otal com otal otal com otal 12.8 million he statutory net debt reconciles to the contracted net debt as follows: as debt net to contracted the reconciles debt net statutory he r t 3 t 28 e t og e ca r f 2 un c

J h r J g ammes. anuar D d ase anuary anuary the the period Trust purchased 4,000,000 shares for a consideration of £4.1 million. The Trust received a payment of £3.5 mill pi o ecem ta f

p p o VAT q q l re rehensive costs for the the for costs rehensive rehensive income for the the for income rehensive f y g uit uit o 201 ( oodwill written off to reserves in respect ofcontinuin respect in to reserves off written oodwill b 2009: 2009: d wn y y on s y er 2008 20 em for e for for e for interest rate swa rate interest 0 11 s p continued h h t t £ a i q q are on reserve re reserve on 10.6 million r uit uit es y y i ssue cost -settled share-based share-based -settled settled share-based share-based settled ) p , classified as Treasury g p s s p e rate g resents t resents eriod s and other reserves. other s and p eriod h e nom p p a a y y ments ment i na l va p s S ro hares. l ue o p erties were deemed to be the cost of the asset and the revaluation reserve has reserve revaluation the and asset ofthe cost to the be deemed were erties f t h g e s businesses acquired businesses prior to 1998 is £25.9 million (2009: £25.9 million). h ares c ( ( ( S a 25.8 25.8 25.8 p har p urc £m ita – – – – – – e l ) ) ) h ase d redem an ( ( ( 1,120.5 1,120.5 1,121.6 p remiu d S su p har ( 1.1 tio £m b m – – – – – n e se ) ) ) ) g the period 310,854 shares were released to to 310,854 released were period the shares q uent A Trinit redem nnua ly y r cance C l ese

Mirror R a g p e ( ( ( p p 4.3 4.3 tio 4.3 s and other reserves at at reserves other s and £ rv ita . ort ort m 8548.5 48.5 – – – – – – n e l ) ) & ) p ll

lc A e ccounts 2010 d un d and othe Re earnin rese er s ( ( ( ( 190.8 66 6 363 47 265.9) 382.1 237.3) t ( a 15. 10.4 2 ( ( in rv h 3.0 2.0 1.4 3 2 010 010 £ £ ed gs are es . . . m m 9 9 5 1 – r ) ) ) ) ) b 83 u y - ion from ion from b ac ( ( ( ( ( ( ( 190.8 489.2 534.7 324.0 382.1) 299.8) 355 679.6 k

T 2 ( ( ( 1.1 2.0 3.0 3 2.9 o 009 £ £m t . . m a 5 0 l ) ) ) ) ) ) ) )

Financials Governance Business review Who we are Trinity Mirror plc 84 Annual Report & Accounts 2010

Notes to the consolidated financial statements continued

29 Called-up share capital 2010 2010 2009 2009 Number £m Number £m Authorised Ordinary shares of 10 pence each 450,000,000 (45.0) 450,000,000 (45.0)

2010 2010 2009 2009 Number £m Number £m Allotted, called-up and fully paid ordinary shares of 10 pence each Opening balance 257,690,520 (25.8) 257,690,355 (25.8) Shares issued – – 165 – Closing balance 257,690,520 (25.8) 257,690,520 (25.8)

The Company has one class of share capital, being ordinary shares with a nominal value of 10 pence each. The Company’s ordinary shares give the shareholders equal rights to vote, receive dividends and to the repayment of capital. There are no restrictions on these shares in relation to the distribution of dividends and the repayment of capital. In 2009, 165 shares were issued under the Group’s Savings-Related Share Option Scheme at a price of 453.3 pence per share. An employee benefit trust administered by the trustee Barclays Wealth Trustees (Guernsey) Limited holds shares of the Company for subsequent transfer to employees under a restricted share plan. At 2 January 2011 the trust held 90,855 shares (2009: 90,855 shares) with a carrying value of £445,523 (2009: £445,523) and a market value of £63,144 (2009: £136,828) in the Company, none of which (2009: none) had options granted over them under the restricted share plan. Dividends on the shares are payable at an amount of 0.01 pence (2009: 0.01 pence) per share in the event that the Group declares any dividends. Shares held by the trust have been excluded from the weighted average number of shares used in the calculation of earnings per share. The lowest closing price of the shares during the year was 64.5 pence (2009: 19.8 pence) and the highest closing price was 171.5 pence (2009: 192.0 pence). The closing share price as at the reporting date was 69.5 pence (2009: 150.6 pence).

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

Number Exercise Scheme Grant dates of shares prices Exercise dates Executive approved 2000–2003 41,412 396–544p May 2003–Aug 2013 Executive unapproved 2000–2003 612,762 396–544p May 2003–Aug 2013

Long-Term Incentive Plan and Deferred Share Award Plan The Long-Term Incentive Plan (LTIP) was approved by shareholders at the Annual General Meeting on 6 May 2004 and the Trinity Mirror Employee Benefit Trust (‘the Trust’) was established in Jersey and is administered by the trustee Appleby Trust (Jersey) Limited. An amendment to the LTIP rules was approved by shareholders at the Annual General Meeting on 4 May 2006 and a new plan, the Deferred Share Award Plan (DSAP), was also approved. At the reporting date the Trust holds shares of the Company for subsequent transfer to employees under the terms of the LTIP as Performance Share awards if they vest on 14 March 2011, 3 April 2012 and 28 May 2013 and under the terms of the DSAP as Deferred Share awards if they vest on 14 March 2011, 3 April 2012 and 28 May 2013. The exercise price of the granted awards is £1 for each block of awards granted. At the reporting date, the Trust held 5,414,484 shares (2009: 1,725,338 shares) with a carrying value of £12,761,217 (2009: £10,582,768) and a market value of £3,763,066 (2009: £2,598,359). In addition, the Trust holds cash to purchase future shares of £7,866 (2009: £554,122). The costs associated with the Trust are included in the consolidated income statement as they accrue. Shares held by the Trust have been excluded from the weighted average number of shares used in the calculation of earnings per share. Closing balanc R

During the period A L Within one T five After five than less and one than Later Within one T commitments lease 31 Operating Opening balanc account premium Share 30 prior periods ota otal future minimum lease payments with tenants under non-cancellable property operatin property non-cancellable under tenants with payments lease minimum future otal ater t fter five e f u l n comm d h

an one an o f VAT y y ear ears y y i ea ea tments un tments . s r r o e n e d £ s

h 1.1 million was credited to share premium for a cash receipt relating to a VAT refund on share issue costs relating to l ess t a r d e i er non-cance ssue h an fi

cos ve y y t ears ears s ll a bl e operat i ng l eases : e q plant and Vehicles ui p ment 20 ( ( ( g 5.6 3.1 2.5 £m leases 1 – 0 , ) ) )

: A Trinit nnua Pro y l

Mirror R ( ( ( ( 64.4 19.1 35.2 10.1 p e 2 p ert 0 £ ort ort 1 m 0 y & ) ) ) ) p

lc A ccounts 2010 ( (1,120.5) eq 1,121.6 p Vehicles ui lant and p 2 2 20 ment (1.1) ( ( ( 3.5 1.9 1.6 9 2.6 5 1.9

009 010 £ £ £m 1 . . m m 5 0 – 0 , ) ) ) )

85 (1,120.5) (1,120.5) Pro ( ( ( ( 70.4 25.8 34.5 10.1 1 2 2 2009 p 3.7 0 4. 2 009 009 ert £ £m £m .7 .1 m 9 – y ) ) ) )

Financials Governance Business review Who we are Trinity Mirror plc 86 Annual Report & Accounts 2010

Notes to the consolidated financial statements continued

32 Share-based payments The charge related to share-based payments during the period was £2.1 million (2009: £3.2 million).

Executive share option scheme The Company operates an existing share option scheme under which executive directors and senior management are granted options. Following the introduction of the Long-Term Incentive Plan in 2004, no further options have been granted under this scheme. The Group has applied the requirements of IFRS 2 in accordance with the transitional provisions to all grants of equity instruments after 7 November 2002 that had not vested as of 3 January 2005. Options are exercisable between three and 10 years from the date of grant subject to the continued employment of the participant and achievement of earnings per share performance. In addition, 50% of each grant of an option to each individual is subject to a total shareholder return comparison against the FTSE Mid-250 index of companies on the date of grant. The other 50% is subject to a comparison of total shareholder return with a group of about 20 other media companies. No vesting of options will take place unless the Company’s ranking is at least median. Movements in share options granted pre 7 November 2002 are as follows:

2010 2009 Number of options Number of options Options outstanding at start of period 798,680 1,992,600 Lapsed during the year (328,854) (1,193,920) Options outstanding at end of period 469,826 798,680

The weighted average share price at the date of lapse for share options lapsed during the period was 103.7 pence (2009: 74.5 pence). The options outstanding at 2 January 2011 had a weighted average exercise price of 470.5 pence (2009: 497.5 pence) and a weighted average contractual life of one year (2009: one year). There were no share options exercised during the current or prior period. Details of the share options outstanding and the weighted average exercise price of options granted post 7 November 2002 are as follows:

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

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

Options granted Options granted 28 February 2003 7 August 2003 2010 2009 2010 2009 Options outstanding at end of period 184,348 505,689 – 653,368 Lapsed during the year – (321,341) – (653,368) Options outstanding at end of period 184,348 184,348 – –

The options outstanding at 2 January 2011 had a weighted average exercise price of 395.5 pence (2009: 395.5 pence) and a weighted average contractual life of two years (2009: three years). No share options were exercised and none lapsed during the current or prior period. The weighted average share price at the date of lapse for share options lapsed during the prior period was 68.5 pence. The estimated fair values at the date of grant of the share options granted on 28 February 2003 was £375,145. The fair value was calculated using a stochastic (Monte-Carlo binomial) model at the date of grant. The inputs to the model were: expected volatility 27.0%, expected life 6.0 years, expected dividend yield 4.4% and risk-free rate 3.9%. Expected volatility was determined by calculating the historical volatility of the Company’s share price over a period prior to the grant date that is commensurate with the length of the expected life of the option. The expected life of the options used in the model is a weighted average driven by simulated share price movements in the model. The wei

Lapsed durin period the during Granted Expected life dateof atthe price share The Remuneration Report Ex volatilityExpected (% t E R T D P A E A T a T a a From 2006, employee. to eligible an ofshares ofawards grant the recommend can Committee Remuneration the schemes, these Under Plan Award Share Deferred and Plan Long-Term Incentive 32 payments Share-based modified Black- The estimated fair values at the dateof atthe values fair estimated The The wei met. The Deferred Deferred met. The he grant date. The exercise price used in the model is is model the in used price exercise date. The grant he wards have taken the form of Performance ofPerformance form the taken have wards nd 2010 vest if targets measuring the Company’s total shareholder return against the performance of a comparator group ofcompa group ofacomparator performance the against return total shareholder Company’s the 2010nd measuring targets if vest oft 48 page on explained are operate schemes the ofhow details Full lapsed. have to 2008 prior awards All Shares. Matching nd Shares a Deferred the for and model binominal) (Monte-Carlo astochastic using calculated were Shares Performance the for values fair he he movement in the number of Performance Shares and Deferred Shares during the period was: period the during Shares Deferred and Shares ofPerformance number the in movement he 2 in granted Shares Performance The participant. ofthe employment to continued subject is and years three is period vesting he erformance Shares xpected volatility has been determined by calculatin determined been has volatility xpected xerc isk-free (% war war eferred eferred p ected dividend i d d se s outstan s outstan g g d hted avera hted avera S

d hare ur ) g ( i years ng t the perio the s S choles calculation at the date of grant. The inputs to the model for awards from 2008 were as follows: as were 2008 from awards for to model the inputs The dateofgrant. atthe calculation choles di di h S e per ) y g g ng at en o start at ng hares have no performance conditions performance no have hares ield e share price at the date of exercise for awards exercised durin exercised awards for of exercise date atthe price e share durin lapsed awards for oflapse date atthe price e share ) . d ( i o % d ) d g o rant for both the Performance Performance the both for rant f per f per i o i g o d rant of the shares awarded are as follows as are awarded shares ofthe rant d continued S hares or Deferred Deferred or hares P g er the historical volatility of the ofthe volatility historical the £ f ormance nil as the exercise price of the granted awards is is awards granted ofthe price exercise the as nil 10 a . w 20 1 3 1. a S 1 .4 . r 0 5 – d 0 hares and the Deferred Deferred the and hares S hares. Prior to 2006 awards took the form of Performance ofPerformance form the took awards to 2006 Prior hares. D e a f erre w 20 3 a 1 . r g 0 – – – d d 0 the period was 141.6 was period the 57.1 (2009: pence pence). : C g ompany’s share price over the three year period prior to to prior period year three the over price ompany’s share 2 1 1 P the period was 120.1 was period the 89.3 pence). (2009: pence ( , ,629,900 , er 30 008 310,854 S ( D f 22,620 ormance hares was 99.8 pence 99.8 pence was hares eferred S 4, a hare ,45 80 20 2 8 w 2 3 009 7 a 1 .1 . .5 r 8 2 0 – d 0 s ) )

P A Trinit 4 1 3 1, 1 erformance A nnua ( , ,724,886 , ,054,000 w 362 30 627 664,147 a D y S l r 1,4 £

Mirror e R ded a hare 1 for each block of awards granted ofawards block each 1 for ,14 , 2009 f e 2 20 erre 000 w p 3 0 0 a ort ort 1 1

. r i 6 7 0 – – – – n d d 0 £ 0 s & ) p

( lc A 2009: 28.5 pence 2009: ccounts 2010 1 1 P , ,199,765 ( er A 214,752 008 19 ( war f 13,357 3 ormance Deferred 6 9,000 4, S a d ,45 , 22 h 2009 2009 2008 2009 796 000 w e a 3 8.0 3 d a r . . . es

r S 2 9 0 8 i d £ n ) )

hares hares 87 ) 008, 2009 he . 1,9 1 3 1, 2 Performance ,5 , ,769,046 ( A 813,021 nies are 30 345 war 4 0 D 3,000 4, 1,4 S e a d ,

f h 2008 2008 2009 erre 000 382 w e a 3 d 0 a r . es

r 0 7 i – – – – d d £ n . )

Financials Governance Business review Who we are Trinity Mirror plc 88 Annual Report & Accounts 2010

Notes to the consolidated financial statements continued

32 Share-based payments continued Savings-Related Share Option Scheme In 2006, options were granted over 2,917,754 shares at a subscription price of 453.3 pence per share under the terms of the Savings-Related Share Option Scheme. The estimated fair value of the options was £3,706,597. The fair values were calculated using a modified Black-Scholes calculation at the date of grant. The inputs to the model were: expected volatility 20.3%, expected life 3.25 years, expected dividend yield 3.9% and risk free rate 4.4%. Expected volatility has been determined by calculating the historical volatility of the Company’s share price over the three year period prior to the grant date. The movement in the number of shares under option during the period was:

2010 2009 £m £m Options outstanding at start of period – 1,328,348 Exercised during the period – (165) Lapsed during the period – (1,328,183) Awards outstanding at end of period – –

The weighted average share price for the options lapsed during the prior period was 137.9 pence. The weighted average share price for the options exercised during the prior period was 70.5 pence.

33 Retirement benefit schemes Defined benefit pension schemes The Group operates 10 defined benefit pension schemes for certain employees which were closed to new entrants with effect from 1 January 2003 and closed to future accrual from 31 March 2010. All employees have the option to join the Trinity Mirror Pension Plan, a defined contribution pension scheme. Formal valuations of the defined benefit pension schemes are carried out regularly. The actuarial methods and assumptions used to calculate each scheme’s assets and liabilities vary according to the actuarial and funding policies adopted by their respective trustees. All of the schemes are being funded in accordance with the recommendations of the respective actuaries. The most significant of the schemes are the Mirror Group Pension Scheme (the ‘Old Scheme’), the MGN Past Service Pension Scheme (the ‘Past Service Scheme’), the MGN Pension Scheme (the ‘MGN Scheme’), the Trinity Retirement Benefit Scheme (the ‘Trinity Scheme’) and the Midland Independent Newspapers Pension Scheme (the ‘MIN Scheme’) which together represent the majority of the aggregate value of the schemes assets and liabilities. The Old Scheme and the Past Service Scheme cover the liabilities for service up to 13 February 1992 for employees and former employees who worked regularly on the production and distribution of Mirror Group’s newspapers. The Old Scheme was closed on 13 February 1992 and the Past Service Scheme was established to meet the liabilities, which are not satisfied by payments from the Old Scheme and the Maxwell Communications Pension Plan or by the State. The last formal valuation of these schemes was completed in October 2008 for valuation date as at 31 December 2007 and showed a deficit of £106.6 million. During 2010, £14.1 million was paid into the schemes (2009: £6.5 million). For 2011, agreement has been reached with the trustees to pay £14.1 million into the schemes. The next full actuarial valuation of the schemes is 31 December 2010. The valuation of the schemes is likely to be completed in 2011. The last formal valuations were completed in June 2010 for valuation date as at 30 June 2009 for the Trinity Scheme, in October 2008 for valuation date as at 31 December 2007 for the MGN Scheme and in June 2008 for valuation date as at 31 March 2007 for the MIN Scheme. These valuations showed deficits of £102.2 million, £55.7 million and £28.2 million respectively. During 2010 deficit funding payments were £6.2 million (2009: £2.3 million), £7.0 million (2009: £4.8 million) and £2.5 million (2009: £2.4 million) respectively. For 2011, agreement has been reached with the trustees to pay £6.2 million, £7.0 million and £2.5 million respectively into these schemes. The next full actuarial valuation dates for these schemes are: Trinity Scheme 30 June 2012, the MGN Scheme 31 December 2010 and the MIN Scheme 31 March 2010. The valuations of the MGN Scheme and the MIN Scheme are likely to be completed in 2011. For the purposes of the Group’s annual consolidated financial statements, valuations have been performed in accordance with the requirements of IAS 19 with scheme liabilities calculated using a consistent projected unit valuation method and compared to the value of the scheme assets at 31 December 2010, the last day prior to the reporting date for which such values were available. IFRIC 14 has been adopted and has had no impact on the retirement benefit assets or obligations. Following detailed consideration and legal advice on the recoverability of pension scheme surpluses we are no longer applying the asset ceiling. Post-retirement mortality tables and future life expectancies ata expectancies life future and tables mortality Post-retirement

Fair value of scheme assets ofscheme value Fair Scheme (deficit)/surplu The impact on the defined benefit obligation at the reporting date to variations in key assumptions are: a0.25 key in assumptions dateto variations reporting atthe obligation benefit defined the on impact The In defermen Ex E D P A A A A A e w P Consumer R e the and liabilities ofthose value actuarial the and liabilities scheme the calculating in used assumptions the advice, actuarial on Based Present value of scheme liabilitie ofscheme value Present T Retirement benefit33 schemes xpecte ffect of a one year increase in assumed life expectancy would increase the obli the increase would expectancy life assumed in increase year ofaone ffect he assets and liabilities of the most significant schemes included above as at the reporting dateare: reporting atthe as above included schemes significant most ofthe liabilities and assets he t 3 t 28 t 30 t 31 ens xpecte r eta t iscount rat ould increase the obli the increase ould Pre 6A P i p 2 nc ost 6 ost ected rate of salar of rate ected

J il J i

on anuary 201anuary D D i D p anuar pa r ecem ecem ecem d i d ce i ncreases Ap return on sc on return l p return on sc on return annua ril 1997 p i n e r rice inflation rat inflation rice il y b b fl b 1997 1997

t at er 2006 er 2008 er 2007 er 20 i on rat 0 1 l : actuar 1 p p ensions ens y h h e g increase eme assets are assets eme eme assets eme ation by £60 million, a 0.25% increase in the inflation assumptions would increase the obli i ons i s a e l assumpt s s : i ons use d continued : g e 65 are e 65 : g ation by £60 million. S/ OS O Past ld S S cheme 178 5.)4 (57.8) (147.8) (750.1) S cheme 6 ervice F 20.1 23323. 02.3 2 2 2 18 M uture pens 1.7 1. 1.4 £m a . le 6 6 /

( years i oner current lif ag e expectancy e d A Trinit ) fora

6 nnua 5 S y ( F l cheme 8.)(314.5) 381.7)

Mirror R ema 2 2 23 2 2 M e l y p . 1624.4 4.1 21.6 4. 3.0 1. G £ ort ort . % m le N 0 8 3 9 & p decrease in the discount rate discount the in decrease

lc A ccounts 2010 g ation by £40 million and the 4. 2.60–5.00 2.70–3.4 3 .1 80 0 Schem – – 360. Trinit F 6 2.7 3 5 23 23 23 1 3 M 2 ( uture years .4 .4 .40 6 9 .7

010 010 c £ a a non-pens . .5 .4 . . % urrent m l 0 0 5 2 7 2 6 5 5 – e e y

lif ) atage65for e expectancy e expectancy 89 l y a 3 3 5.00–6.90 g .4 . 00 i e one 0 Schem d ( F 5 187.7) 171.2 – – ema (16.5 5.70 3 5 2 2 2 22 3.50 3 3 r 5 2009 2009 MIN MIN 5. 5.7 5. .75 . .75 .5

£ 00 .4 m % l 8 6 0 – e e )

Financials Governance Business review Who we are Trinity Mirror plc 90 Annual Report & Accounts 2010

Notes to the consolidated financial statements continued

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

2010 2009 2008 2007 2006 £m £m £m £m £m Present value of scheme liabilities (1,685.1) (1,683.1) (1,378.8) (1,538.5) (1,511.0) Fair value of scheme assets 1,524.1 1,398.1 1,233.6 1,458.9 1,322.9 Effect of asset ceiling – (11.6) (61.7) (45.2) (24.9) Net scheme deficit (161.0) (296.6) (206.9) (124.8) (213.0)

Non-current asset – retirement benefit assets 61.1 – – – – Non-current liabilities – retirement benefit obligations (222.1) (296.6) (206.9) (124.8) (213.0) Net scheme deficit (161.0) (296.6) (206.9) (124.8) (213.0)

Net scheme deficit included in consolidated balance sheet (161.0) (296.6) (206.9) (124.8) (213.0) Deferred tax included in consolidated balance sheet 43.5 83.0 57.9 34.9 63.9 Net scheme deficit after deferred tax (117.5) (213.6) (149.0) (89.9) (149.1)

2010 2009 £m £m Current service cost (4.6) (14.6) Past service costs – (0.9) Total included in staff costs (4.6) (15.5) Curtailment gain 7.9 4.3 Past service costs (8.3) 5.6 Total included in non-recurring items (0.4) 9.9 Expected return on scheme assets 85.5 76.7 Interest cost on pension scheme liabilities (92.6) (87.2) Pension finance charge (7.1) (10.5) Total included in the consolidated income statement (12.1) (16.1)

2010 2009 2008 2007 2006 £m £m £m £m £m Effect of changes in actuarial assumptions on scheme liabilities 16.7 (294.1) 231.9 12.9 68.1 Experience adjustments on scheme liabilities 8.1 2.0 (23.0) 9.1 0.9 Experience adjustments on scheme assets 76.1 136.3 (349.5) (6.0) 15.5 Effect of asset ceiling 11.6 50.1 (16.5) (20.3) (21.8) Consolidated statement of comprehensive income 112.5 (105.7) (157.1) (4.3) 62.7

The cumulative amount of actuarial gains and losses recognised in the consolidated statement of comprehensive income since adoption of IFRS is losses of £58.7 million (2009: £171.2 million). Pension schemes assets include no direct investments in the Company’s ordinary shares nor any property assets occupied or other assets used by the Group for any period. Up to 31 March 2010, prior to closure of the schemes to future accrual, the contribution rates for the Group’s most significant schemes range from 15.0% to 20.0% of pensionable salaries. The contributions made during the year totalled £35.2 million (2009: £32.1 million). The Group expects to contribute approximately £35 million to its defined benefit pension schemes in 2011. The movement in liabilities during the period includes a £80.1 million benefit due to the government announced changes in state pension increases being linked to CPI instead of RPI which impacts most deferred pensions in the Group’s schemes. Actuarial gains Actuarial Expected return assets ofscheme value fair Opening Contributions by employer US e Cor contribution Employee Fai C F P UK e F I O C A Benefits E A Int C costs Past service cost Current service O C T C A B Chan Retirement benefit33 schemes

n ixed interest gilts he actual return on scheme assets was £161.6 million a m ro ctuarial nnuit nnu ene ash and othe and ash urtailment urtailment d losing present value of scheme liabilitie scheme of value present losing asset scheme of value fair losing pening present value of scheme liabilities ofscheme value present pening han ther overseas e e ir v ex r v pl p r p es ert q q orate bond o fi i ty contract g g li alue a uities ts pa uities y y t n l ee contr es in the present value of scheme liabilities scheme of value present the in es es in the fair value of scheme assets: scheme of value fair the in es contrac y cos ue k p e g ai d ain/(losses)

id of o t d g g f ai

il sche sc ts r n ib t s h q ut e uitie i m m on e e s s s

asse asse t t s: s s s continued ( 2009: £213.0 million : ) . T Annual & Report Accounts 2010 r i n i t y

Mi rror pl c ( ( 1,398.1 1,524.1 1 1,683.1 1,685.1 , 5 23 4 2 2 ( ( 24.8 7 85.5 35 2 9 8 2 5 98 99 7 4 78.0 92.6 20 20 20 ( ( ( ( 6 1.2 6 4.1 1.4 1. 3 7. 0 2.7 8 7. 8.3 4.6 6.0 1.2 £m £m £ 1 1 1 . . .1 .1 . . .4 . m 0 2 3 3 6 3 0 9 0 0 0 ) ) ) ) ) ) ) )

91 ( ( 1,683.1 1,378.8 1,233.6 1 1 , , ( 292.1 136.3 290.2 1 227.2 398.1 398.1 177.4 461.0 ( ( (86.9) 87.2 14.6 76.7 31.0 3 76.4 86 32.1 2009 2009 2009 ( 6.3 6.3 1. 3.1 4. 4.7 £m £m £m . 8 9 3 – – ) ) ) ) ) )

Financials Governance Business review Who we are Trinity Mirror plc 92 Annual Report & Accounts 2010

Notes to the consolidated financial statements continued

33 Retirement benefit schemes continued 2010 2009 % % Expected nominal rates of return on plan assets: Equities 8.10 8.00 Property 6.30 6.40 Corporate bonds 5.40 5.70 Fixed interest gilts 4.20 4.50 Index linked gilts 4.00 4.20 Cash 4.10 4.40

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

Defined contribution pension schemes The Group operates two defined contribution pension schemes for qualifying employees, the Southnews Money Purchase Scheme which is closed to new members and the Trinity Mirror Pension Plan. The assets of the schemes are held separately from those of the Group in funds under the control of trustees. The current service cost charged to the consolidated income statement of £7.0 million (2009: £1.1 million) represents contributions payable to these schemes by the Group at rates specified in the scheme rules. Contributions that were due have been paid over to the schemes at both reporting dates.

34 Financial instruments Capital risk management The Group manages its capital to ensure that entities in the Group will be able to continue as a going concern while maximising the return to shareholders through an optimal balance of debt and equity. The capital structure of the Group consists of debt, which includes the borrowings (note 25), cash and cash equivalents (note 19) and equity attributable to equity holders of the parent comprising share capital and reserves (note 28).

Gearing ratio The Board reviews the capital structure, including the level of gearing and interest cover, as required. As part of this review, the Board considers the cost of capital and the risks associated with each class of capital. The gearing ratio and interest cover at the reporting date were as follows:

2010 2009 £m £m Net debt (note 27) (237.3) (299.8) EBITDA 177.9 130.9 Net debt to EBITDA 1.3 2.3

Operating profit (note 38) 123.3 105.4 Total interest expense (note 10) (16.1) (22.4) Interest cover 7.7 4.7

Net debt is defined as long-term and short-term borrowings and includes derivative financial instruments less cash and cash equivalents. EBITDA is stated after non-recurring items with the exception of the impairments of intangible assets and fixed assets. Operating profit is before non-recurring items and amortisation. For 2010 the financial covenants attached to the bank facility are a minimum interest cover of 2.5 times and a maximum net debt to EBITDA ratio of 3.75 times. For 2011 the minimum interest cover increases to 2.75 times and net debt to EBITDA decreases to 3.5 times. As a result of the cash generated by the Group during 2010 at the end of the year the Group cash balance increased from £61.2 million to £116.2 million. The financial covenants in respect of the US$ private placement loan notes remained unchanged during 2010, requiring minimum interest cover of 2.0 times and for net debt to EBITDA a maximum cover of 4.0 times. The financial covenants are the same in 2011. ma price risk liabilities and held at amortised cost. The The cost. atamortised held liabilities and of the U of the basis on which income and expenses are recognised, in respect of each class of financial asset, financial liability and equity equity and liability financial asset, offinancial class ofeach respect in recognised, are expenses and income which on basis US E as T E T F h T M T tra C i T T a T Financial risk mana i a T Categories of financial instrument di D S a T E continued instruments Financial 34

monitors and manages the financial risks relating to the operations of the ofthe to operations the relating risks financial the manages and monitors nterest rate r nterest ncome statement ccor s well as in respect of the ofthe respect in as s well nalysin as entere he carrying amounts of the ofthe amounts carrying he he he he is derivatives offinancial use he he he he he ur xc ore eta ignificant accounting policie ompliance with policies and exposure limits is reviewed by the internal auditors on a continuous basis. The The basis. acontinuous on auditors internal by the reviewed is limits exposure and policies with ompliance xterna sc ar f d $ tt o o h e l G G G G G G G ose ers il k ll ange rate exposures are manage are rate exposures ange i s o o di fi roup’s significant financial assets are cash and trade and other receivables which are classified as loans and receivables and and receivables and loans as classified are which receivables other and trade and cash are assets financial roup’s significant U the under covenants worth net on based requirements capital imposed to externally subject is roup roup undertakes certain transactions denominated in foreign currencies. Hence, exposures to exchange rate fluctuations arise. arise. rate fluctuations to exchange exposures Hence, currencies. foreign in denominated transactions certain undertakes roup ofchan risks to financial the primarily it expose roup’s activities coverin to Board the report amonthly provides roup’s function Treasury ex these to hedge appropriate where instruments financial derivative by using risks ofthese effects the to minimise seeks roup markets financial international and to domestic access co-ordinates to business, the services provides roup’s function Treasury et r gn currency r nanc w ng . S g d f s: ) t private placement loan notes as set out in note in 26 out set as notes loan placement private exposures by de exposures , credit risk, liquidity risk and cash flow interest rate risk interest flow cash and risk liquidity risk, , credit

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Financials Governance Business review Who we are Trinity Mirror plc 94 Annual Report & Accounts 2010

Notes to the consolidated financial statements continued

34 Financial instruments continued Foreign currency sensitivity analysis The Group is mainly exposed to the Euro and US$. The Euro exposure arises on sales of newspapers in Europe. The Euro sales represent less than 1% (2009: 2%) of Group revenue. The Euros are kept on deposit and used to fund Euro costs. When Euros on deposit build to a target balance they are converted into sterling. The Group does not hedge the Euro income or deposits because the risk of foreign exchange movements is not deemed to be significant. The US$ exposure arises on the US private placement loan notes which are mainly US$ denominated and fixed interest. At the time of the US private placement loan notes issue the Group entered into cross-currency interest rate swaps to change the US$ principal and US$ fixed interest profile of the debt to sterling principal and sterling floating interest. The timing of the swaps exactly match every private placement principal and interest payment due. As a result the Group is not subject to any US$ foreign exchange exposure on its US private placement loan notes and matching swaps. The Group’s consolidated balance sheet shows the US private placement loan notes converted to sterling at the reporting date currency rate. The matching swaps are carried at fair value which represents the value of the fixed to floating swap, the currency element of the principal payments due and the currency element of the interest payments due. The difference between the valuation approaches gives rise to a charge or credit to the consolidated income statement. The following tables detail the Group’s sensitivity to a 10% increase and decrease in the sterling rate against the Euro and US$ in the current and prior period. A 10% movement in exchange rates based on the level of foreign currency denominated monetary assets and liabilities represents the assessment of a reasonably possible change in foreign exchange rates. The sensitivity analysis includes only outstanding foreign currency denominated monetary items including external loans, that are unhedged.

Euro currency impact US$ currency impact 2010 2009 2010 2009 10% strengthening of sterling £m £m £m £m Decrease in profit (0.2) (0.2) – – Decrease in equity – – – –

Euro currency impact US$ currency i mpact 2010 2009 2010 2009 10% weakening of sterling £m £m £m £m Increase in profit 0.2 0.1 – – Increase in equity – – – –

Forward foreign exchange contracts It is the policy of the Group to enter into forward foreign exchange contracts only to cover specific foreign currency payments such as significant capital expenditure. During the current and prior period no contracts were entered into.

Interest rate risk management The Group is exposed to interest rate risk as it borrows funds at both fixed and floating interest rates. The risk is managed by the Group by maintaining an appropriate mix between fixed and floating rate borrowings, by the use of interest rate swap contracts and forward interest rate contracts. Hedging activities are evaluated regularly to align with interest rate views and defined risk appetite, ensuring optimal hedging strategies are applied, by either positioning the balance sheet or protecting interest expense through interest rate cycles. The Group’s exposures to interest rates on the financial assets and liabilities are detailed in the liquidity risk management section of this note. In characteristics. The The characteristics. investments. The The investments. instruments at the reporting date. For floating rate liabilities, the analysis is prepared using the the using prepared is analysis the rate liabilities, floating date. For reporting at the instruments In market financial the in to turmoil the given been has consideration value, fair below. calculating In disclosed is and contract maximum ex maximum to extend the settlement date until dateuntil settlement the to extend Under interest rate swap contracts, the the contracts, rate swap interest Under Llo S H Fi S T T a Th T T a T C C T O report i I Th I continued instruments Financial 34 m r T Ulster Bank R Na B

risk with a single counterparty is limited by reference to the long-term credit ratings assigned for that counterparty by counterparty that for assigned ratings credit to long-term the by reference limited is counterparty asingle risk with sprea the the on agreed notional principal amounts. fixed for a period of 12 to aperiod months for fixed rate by £7.6 million (2009: £7.6 million). is This mainly to attributable the Group’s exposure to interest rates on its variable rat If interest rates had been 2% higher 2% been had rates interest If change. possible ofareasonably assessment the represents and used been has rates interest in A 2% increase financial condition of trade receivables oftrade condition financial ssue ate of interest, the Grou the ate ofinterest, nterest rate swap contracts swap rate nterest sens rate nterest rade receivables consist ofalar consist receivables rade ss n he table below shows the internal credit limit and amount on deposit with the Group’s major counterparties at the reportin atthe Group’s counterparties the with major deposit on amount and limit credit internal the shows below table he he carryin he he he he Board a Board he antander U tandard and Poor’s credit ratin Poor’s and credit tandard nanc oyal Bank of Scotland pl ofScotland Bank oyal arc S redit risk refers to the risk that a counterparty with the the with acounterparty that to risk the refers risk redit redit risk mana risk redit ther price risk price ther aterially after repayment of the £145.4 million of loan notes due in October 2011 O O d e cre e sens ti y B i G d cre gne o ds T ctober 2010, the swap in respect of the outstanding principal of principal outstanding ofthe 2010,ctober respect in swap the on payments rate interest floating the converted into which entered was rate swap interest an 2008, ctober G G G C l t ays ays d n roup uses other publicly available financial information and its own tradin own its and information financial available publicly other uses roup d i i a roup does not have any significant credit risk exposure to any single counterparty or any group of counterparties having simila having ofcounterparties group any or counterparty to single any exposure risk credit significant any have not does roup The counterparties. creditworthy with dealing ofonly apolicy adopted has roup The risk. price to equity exposed directly not is and investments equity listed no has roup h ng

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e number of customers spread across diverse sectors. sectors. diverse across spread ofcustomers e number ly i g d O ng agenc i / es are rev are es ctober 2009. In April 2009, it was agreed with the counterparties in respect of respect in counterparties the with agreed was it 2009, April In 2009. ctober ra er b lower and all other variables were held constant, the the constant, held were variables other all and lower s ctober 2010.ctober In een i d i . vat s S h e an i G es uch contracts enable the the enable contracts uch

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i b nterest rates rates nterest . i mes an y d i p n e h lc. This remains under review and cash balances will fall fall will balances cash and review under remains lc. This d C b e counterpart G epen redit limit h t g roup only transacts with financial institutions that are are that institutions financial with transacts only roup e report h d G overnment stake and it offerin it and stake overnment O e t £ 2 7 75 25 2 2 roup’s profit for the period would decrease would period roup’s the for profit 20 ld n h 45.0 million principal was on settled the due date. . 5. 5 5 5. 5. d £m g e aggregate va e aggregate . 1 . . . . ent rat G 0 0 0 0 0 0 0 f oin 0 Th or g roup’s monthly cash forecasting model. forecasting roup’s cash monthly G ations resultin ations i e g ng b roup does not actively trade these trade actively not does roup credit evaluation is performed on the on performed is evaluation credit ot f a i i n T Annual & Report Accounts 2010 es are are es d h i r va r g ate an i

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Financials Governance Business review Who we are Trinity Mirror plc 96 Annual Report & Accounts 2010

Notes to the consolidated financial statements continued

34 Financial instruments continued Liquidity risk management Liquidity risk results from having insufficient financial resources to meet day-to-day fluctuations in working capital and cash flow. Ultimate responsibility for liquidity risk management rests with the Board. The Group manages liquidity risk by maintaining adequate reserves, banking facilities and reserve borrowing facilities, by continuously monitoring forecast and actual cash flows and by matching the maturity profiles of financial assets and liabilities.

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

Less than More than 1 year 1–2 years 2–3 years 3–4 years 4–5 years 5 years £m £m £m £m £m £m 2010 Non-derivative financial instruments: Sterling variable interest rate – – – – – – Sterling fixed interest rate 17.9 0.7 0.7 10.4 – – Non-sterling fixed interest rate 145.3 78.2 61.8 37.8 4.7 71.0 Derivative financial instruments: Financial assets 145.3 78.2 61.8 7.8 4.7 71.0 Financial liabilities (136.2) (73.5) (57.6) (35.6) (2.9) (68.3) 2009 Non-derivative financial instruments: Sterling variable interest rate – – – – – – Sterling fixed interest rate 1.9 17.9 0.7 0.7 10.4 – Non-sterling fixed interest rate 26.3 140.9 75.9 59.9 36.7 73.4 Derivative financial instruments: Financial assets 26.3 140.9 75.9 59.9 36.7 73.4 Financial liabilities (14.3) (143.8) (77.8) (60.8) (37.8) (75.4)

The non-derivative financial instruments include the US private placement loan notes, bank overdrafts, finance leases and the bank facility. The non-sterling fixed interest rate liabilities arise on the Group’s US private placement loan notes. The related swaps are shown under derivative instruments. Swaps are gross settled and each leg of the swap is split into either a financial asset or liability. The weighted average effective interest rate is set out in note 25. The Group has access to financial facilities of which the total unused amount is £178.5 million (2009: £178.5 million) at the reporting date. The Group expects to meet its other obligations from cash held on deposit, operating cash flows and its committed financing facilities.

Fair value of financial instruments The fair value of the Group’s financial liabilities are set out in note 25. sett w amounts outstanding Any parties. the between relationship the and purchase volume to reflect discounted prices atmarket made T T Share-based R S a ofthe personnel Key management C S T T T b a T transactions party Related 35

Financial support of Financial support Report on pa Report re information Further ofindividuals. performance and position erm ll of the executive directors executive the ll of re related parties of the ofthe parties re related he remuneration of directors and other key executives is determined by the Remuneration Committee havin Committee Remuneration by the determined is key executives other and ofdirectors remuneration he his trade generated revenue of £nil (2009: £nil) and the Group received incurredof charges for £4.5 services million (2009: £4 he subsidia its and Company the between Transactions plc. Trinity Mirror is Group ofthe party controlling and parent immediate he ene ra hort-term em ales of goods and services to related parties were made at the atthe made were parties to related services and ofgoods ales et ompensation of key management personne ofkey management ompensation i l rement rement di e G i fi d nat t sc roup traded with the following associated undertakings and joint ventures: PA ventures: joint and undertakings associated following the with traded roup ng transact

b i y cas on o h emes are are emes b ene g f p h em es 47es to 52 p a payment. lo y fi ments in the the in ments ts y pl ee benefit o £ i y di ons nil ment sc ( C 2009: 2009: l ose . ompany, have been eliminated on consolidation and are not disclosed in this note. Transactions with the retirement retirement the note. with this Transactions in disclosed not are and consolidation on eliminated ompany, been have ) p and their remuneration during the period was as follows as was period the during remuneration their and s a d p y

i £ ment n note 33. erio 0.5 million G d s roup comprise the non-executive directors and members of the Executive Executive ofthe members and directors non-executive the comprise roup D ) was provided during the period. the during provided was eta il s o f ot h er re l l ate g d ardin G party transact party roup’s usual list prices less average volume discounts. Purchases were Purchases discounts. volume average less prices roup’s list usual g the remuneration of individual directors is provided in the Remuneration the in provided is directors ofindividual remuneration the i ons are are ons G : roup Limited and fish4 Limited Limited fish4 and Limited roup di sc l ose d

b e T Annual & Report Accounts 2010 l r ow. i n i t y

Mi rror g re pl C c g ommittee ard to competitive market toard competitive ( up to 13 2 ( ( ( ( 7.0 1.2 0.7 5.1 010 010 £ ( which includes m – .9 million). ) ) ) ) O ctober 2010 ries, which 97 ill be ill be 2009 2009 ( ( ( ( ( 7.8 0.3 1.4 0.7 5.4 £ m ) . ) ) ) ) )

Financials Governance Business review Who we are Trinity Mirror plc 98 Annual Report & Accounts 2010

Notes to the consolidated financial statements continued

36 Acquisitions GMG Regional Media On 28 March 2010 the Group acquired the trade and assets of GMG Regional Media.

2010 £m Recognised amounts of identifiable assets acquired and liabilities assumed: Trade and other receivables 12.3 Inventory 0.3 Property, plant and equipment 10.3 Identifiable intangible assets 30.0 Trade and other payables (4.1) Deferred tax (10.5) Total identifiable assets 38.3 Negative goodwill (23.6) Total consideration 14.7 Satisfied by: Initial cash consideration 7.4 Additional payment for working capital 2.5 Contract cancellation 4.8 Total consideration 14.7

Trade and other receivables include trade receivables with a gross value of £10.1 million reduced by a bad debt provision of £0.4 million and prepayments of £2.6 million. The negative goodwill of £23.6 million arising on the acquisition has been taken to non-recurring items included in administrative expenses in the consolidated income statement. The negative goodwill arises due to the value of the identifiable assets acquired and liabilities assumed are more than the total consideration. The negative goodwill is not taxable for income tax purposes. The contract cancellation of £4.8 million relates to the value ascribed to a pre-existing print contract which was terminated as part of the acquisition consideration and has been taken to non-recurring items included in administrative expenses in the consolidated income statement. The accounting gain is not taxable for income tax purposes. Acquisition related transaction costs, included in non-recurring items within administrative expenses in the consolidated income statement, amounted to £1.1 million. GMG Regional Media contributed £50.9 million to the Group’s revenue and £5.7 million to the Group’s profit for the period between the date of acquisition and the reporting date. fish4 The Group took control of the 50% interest in fish4 not previously controlled on 13 October 2010. The consideration was £1 and the fair value of assets transferred was £0.9 million and the fair value of liabilities transferred was £0.9 million. The assets include trade receivables with a gross value of £0.6 million reduced by a bad debt provision of £0.4 million, prepayments of £0.2 million, cash of £0.2 million, deferred tax of £0.2 million and other debtors of £0.2 million. fish4 contributed £0.9 million to the Group’s revenue and a loss of £0.4 million to the Group’s profit for the period between the date of full control and the reporting date.

Impact on results for the period If control of both GMG Regional Media and fish4 had been completed on the first day of the reporting period, the Group’s revenue for the period would have been £781.0 million and the Group’s operating profit for the period would have been £136.9 million. T Net asset Profit before ta before Profit Basic earnings per share share per earnings Basic share per earnings Basic Profit after tax after Profit Operatin Revenu 201 2January ended 52 weeks results toadjusted results ofstatutory Reconciliation 38 L T Other intan Good T 37 Disposals 5 P P Operating profi R

d c b a Tax le intan other of Amortisation Impact of the translation of foreign currency borrowings and fair value changes on derivative financial instruments. financial derivative on changes value fair and borrowings currency foreign of translation the of Impact 8. note in out set are items non-recurring of Details rade and other receivables other and rade oss on o 3 weeks ended 3Januar ended 3 weeks here were no disposals during 2010. During 2009 the Group disposed of Globespan Media Limited realising a loss on disposal of£ disposal on aloss realising Limited Media ofGlobespan disposed Group 2010. the 2009 during During disposals no were here rofit after ta after rofit tax before rofit evenue t a l g wil co islation chan e l di g n s profit sposa s g i de ible asset x x t r g a es relates to the impact of the chan the of impact tothe relates es l ti on g ible assets. s ( ( pence pence y 201 0 ) ) 1 g e in the tax rate from 28% to 27% on the openin 28% to27%the on from rate tax the e in S S tatutory tatutory tatutor 7 123.7 7 113.3 138.0 resu r 6 9378518. 5.1 7.8 11.5 29.3 8 63 44. 201. 7. 11.3 42.0 esu 1. 7. £ £ l . m l ts m ts ts 5 0 3 6 y

N on-recurr N on-recurr

( ( ( ( i

11. 20.7 20.7 11.0 28.2 tems i tems 3 £m i £ i n n . m 0 3 – – g g g ) ) ) ) a deferred tax position in 2010. in position tax deferred a A mort A mort i sat i sat 6.0 6.0 1 4.4 2 7. £ i £ i o on .7 . m m 0 1 1 – – n b b T Annual & Report Accounts 2010 r i n i t Fi y Fi

nance Mi nance cos 1 cos ( ( ( rror 2.3 3 7.5 2.2 5.5 £m £ . ts m ts 5 9 – – – – ) ) ) pl c c c T ax T ax l eg l c e ch h gi i s ange ( s l ange 11.4 at l ( at 4.5 £m i £ i on on m 72.7 – 101. – – – – – –7 – s s ) ) d d 99 2.4 million Adj Adj 1 123.3 7 resu resu uste 0 63 6 20 51.1 28 72.6 uste 2009 ( ( ( ( ( 2.4) 2.4) 0.7) 1.1) 0.6 5.4 1. £m

£ £m l . . . l t m t 0 3 6 5 5 – d d s s . )

Financials Governance Business review Who we are Trinity Mirror plc 100 Annual Report & Accounts 2010 Parent company accounts

Independent auditor’s report to the Opinion on other matters prescribed by the members of Trinity Mirror plc Companies Act 2006 We have audited the parent company financial statements of Trinity In our opinion: Mirror plc for the 52 weeks ended 2 January 2011 which comprise – the part of the directors’ remuneration report to be audited has the parent company balance sheet, and the related notes 1 to 14. been properly prepared in accordance with the Companies Act The financial reporting framework that has been applied in their 2006; and preparation is applicable law and United Kingdom Accounting Standards (United Kingdom Generally Accepted Accounting – t he information given in the directors’ report for the 52 weeks ended Practice). 2 January 2011 for which the financial statements are prepared is consistent with the parent company financial statements. This report is made solely to the Company’s members, as a body, in accordance with Chapter 3 of Part 16 of the Companies Act 2006. Matters on which we are required to report Our audit work has been undertaken so that we might state to the Company’s members those matters we are required to state to them by exception in an auditor’s report and for no other purpose. To the fullest extent We have nothing to report in respect of the following matters where permitted by law, we do not accept or assume responsibility to the Companies Act 2006 requires us to report to you if, in our opinion: anyone other than the Company and the Company’s members as a body, for our audit work, for this report, or for the opinions we – adequate accounting records have not been kept by the parent have formed. company, or returns adequate for our audit have not been received from branches not visited by us; or – the parent company financial statements and the part of the Respective responsibilities of directors directors’ remuneration report to be audited are not in agreement and auditor with the accounting records and returns; or As explained more fully in the statement of directors’ responsibilities – certa in disclosures of directors’ remuneration specified by law are on page 53, the directors are responsible for the preparation of the not made; or parent company financial statements and for being satisfied that they – we have not received all the information and explanations we require give a true and fair view. Our responsibility is to audit and express an for our audit. opinion on the parent company financial statements in accordance with applicable law and International Standards on Auditing (UK and Ireland). Those standards require us to comply with the Auditing Other matter Practices Board’s Ethical Standards for Auditors. We have reported separately on the consolidated financial statements of Trinity Mirror plc for the 52 weeks ended 2 January 2011.

Scope of the audit of the financial Panos Kakoullis statements (Senior Statutory Auditor) An audit involves obtaining evidence about the amounts and for and on behalf of Deloitte LLP disclosures in the financial statements sufficient to give reasonable Chartered Accountants and Statutory Auditor assurance that the financial statements are free from material London, UK misstatement, whether caused by fraud or error. This includes an 3 March 2011 assessment of: whether the accounting policies are appropriate to the parent company’s circumstances and have been consistently applied and adequately disclosed; the reasonableness of significant accounting estimates made by the directors; and the overall presentation of the financial statements.

Opinion on financial statements In our opinion the parent company financial statements: – give a true and fair view of the state of the Company’s affairs as at 2 January 2011; – have been properly prepared in accordance with United Kingdom Generally Accepted Accounting Practice; and – have been prepared in accordance with the requirements of the Companies Act 2006.

Neither an audit nor a review provides assurance on the maintenance and integrity of the website, including controls used to achieve this, and in particular whether any changes may have occurred to the financial information since first published. These matters are the responsibility of the directors but no control procedures can provide absolute assurance in this area. Legislation in the United Kingdom governing the preparation and dissemination of financial information differs from legislation in other jurisdictions. N Capital redemption reserve year one within due falling amounts Creditors: – E Pension scheme asset Other creditor Sly Bailey Bailey Sly T Eq Pr Share N D B C T current Net B Cas yea one within – due D C I Fix 8254 number registration 20112010) Company 2January (3 at Parent company balance sheet Called-u

si he xctv Grou Chief Executive nvestments o hese parent company financial statements were approved by the Board of directors and authorised for issue on 3 March 2011. 3March on issue for authorised They and ofdirectors Board by the approved were statements financial company parent hese g q orrow orrow e e d urrent asset reditors: amounts fallin amounts reditors: e et assets o t f ned on its behalf by behalf its on ned b u uit ue a t ed e fit a h tor i asse rr l t a a y y

ed asse p asse s n t s ca i i f ngs ngs remium account ter more t more ter d ba p t h l share ca share t a are p oss s nk x li t t ital and reserves s b s ( l ab s a e liabilities

h accou ess n f s o ore pens iliti d ld h in h es

p an one yea ers cu ita r nt a rr : l s ’ n

e f )/ d un nt li asset i on sc ds g due after more than one year one than more after due ab r s iliti h eme assets eme es Vijay Va Vijay p Finance Director Finance g hela 8 T Annual Re r i n i ty Mi Note p rror p 12 12 1 10 ort & Accounts 2010 &Accounts ort 7 7 8 5 5 4 1 9 6 s l c ( ( 1 1 1,897.0 1,57 1, 1 1 1 1, 2,085.9 1,945.9 ( ( ( , , , , , 478.9 991.9 572.9 2 121.6 248.4 2 226.1 140.0) 233.4 ( 8 1 4 96 2 45.5 94.0 2 ( 2. 2 2 8 4. 5 2.9 7.3 010 £ . . .4 .7 . m 9 3 6 3 8 101 ) ) ) ) ) ) ( ( were 1,592.9 1,588.7 1 1 1 1,571.6 1, 1 1 1, 1,571.6 , ,2 , , , ( ( 362.8 357.9 2 120.5 2 610.2 631.5 188.1 42 47.4 47.4 47.4 96 2 38 1 2009 ( ( 4.9 4.2) 4. 5 5 8 £m . . . .1 . 8 3 8 6 3 – ) ) ) ) )

Financials Governance Business review Who we are Trinity Mirror plc 102 Annual Report & Accounts 2010 Notes to the parent company financial statements for the 52 weeks ended 2 January 2011 (53 weeks ended 3 January 2010)

1 Accounting policies Retirement benefits Each pension scheme surplus (to the extent that it is recoverable) or The parent company financial statements of the Company are deficit is recognised in full and presented on the face of the balance presented as required by the Companies Act 2006. As permitted, sheet. The movement in the scheme surplus or deficit is split between the parent company financial statements have been prepared in operating and financing items in the profit and loss account. The full accordance with applicable law and United Kingdom Accounting service cost of the pension provision is charged to operating profit. Standards (United Kingdom Generally Accepted Accounting Any difference between the expected return on assets and that Practice). The particular accounting policies adopted are described actually achieved is reflected in other recognised gains and losses below and have been applied on a consistent basis in the current in the period. and prior period. The Company has taken advantage of the exemption contained in Foreign currency FRS 1 and has not produced a cash flow statement. The Company Transactions denominated in foreign currencies are translated at has also taken advantage of the exemption contained in FRS 8 the rates of exchange prevailing on the date of the transactions. and has not reported transactions with fellow Group undertakings. Exchange differences are taken through the profit and loss account. The Company, as a parent company of a group drawing up consolidated financial statements that meet the requirements of IFRS Operating leases 7, is exempt from disclosures that comply with the United Kingdom Costs in respect of operating leases are charged on a straight-line Generally Accepted Accounting Practice equivalent FRS 29. basis over the lease term. In the current year certain minor amendments to UK financial Capital instruments reporting standards were issued by the UK Accounting Standards Capital instruments are accounted for in accordance with the Board. The adoption of these amendments has not had any material principles of FRS 26 and are classified as equity share capital, impact on the parent company financial statements. non-equity share capital, minority interest or debt as appropriate. At the date of approval of these parent company financial statements, the amendments to SSAP 25, FRS 8 and FRS 29 have not been Financial instruments applied but were in issue but not yet effective and have therefore not Financial instruments are accounted for in accordance with the been applied and their adoption will have no material impact on the principles of FRS 26. Any premium or discount associated with parent company financial statements. the purchase of interest rate and foreign exchange instruments is amortised over the life of the transaction. Interest receipts and Basis of accounting payments are accrued to match the net income or cost with the These parent company financial statements have been prepared related finance expense. No amounts are recognised in respect of under the historical cost convention and in accordance with future periods. Gains and losses on early termination or on repayment applicable accounting standards of the United Kingdom Accounting of borrowings, to the extent that they are not replaced, are taken to Standards Board and pronouncements of the Urgent Issues the profit and loss account. Task Force. Employee share option schemes Income from shares in Group undertakings Shares held within employee share option schemes are dealt with in These amounts represent dividends from investments. The dividends the balance sheet as a deduction from equity shareholders’ funds in are recognised in the period in which the dividend is declared. accordance with FRS 20.

Fixed asset investments 2 Result for the period Fixed asset investments are stated at cost less provision for any impairment. An impairment review is undertaken at each reporting As permitted by section 408 of the Companies Act 2006, the date or more frequently when there is an indication that the Company has elected not to present its own profit and loss account recoverable amount is less than the carrying amount. for the period. The Company reported a retained loss for the period of £0.9 million (2009: £20.5 million). The audit fees relating to the Deferred taxation Company are disclosed in note 6 in the notes to the consolidated Deferred taxation is provided in full at the anticipated tax rates on financial statements and are borne by another Group company. timing differences arising from the different treatment of items for accounting and taxation purposes. No provision is made for deferred tax on investment revaluations. A deferred tax asset is regarded as recoverable and therefore recognised only when it can be regarded as more likely than not that there will be suitable taxable profits from which the future reversal of the underlying timing differences can be deducted. The Company has elected not to discount the deferred tax assets and liabilities. t Pension costs Pension re Other debtors undertakin subsidiary in debit payments Share-based Amounts owed by subsidiary undertakin by subsidiary owed Amounts year: one than more after due falling Amounts D A A 5 Debtors T A A Provisions for im A C W were: period the during incurred emoluments, directors’ including costs, Staff Ne A 4 Investments lon options, share remuneration, directors’ ofindividual Disclosure S cost Social security All ofemployees A number Ad T costs 3 Staff Remuneration on pa Report h he undertakin principal subsidiary he average number of persons, including directors, employed by and charged to the Company in the period was: period the in to Company the charged by and employed directors, including ofpersons, number average he t 3 t 3Januar hare-based mounts owe mounts mounts t t er ost e q a emp m 2 2 t i uired b g r sta i vat

book J es an i J J n anuary 201anuary anuary anuary anuar i strat i ve l ff oyees are emp are oyees costs are are costs f d y fi v a the Com the nanc i sa lli y o alue 201 ng y n p d

l 20 20 ar a

d b y i a i 0 0 es y su ue w ments 1 1 l

1 1 i p nstrument s di airmen p sc b anies Act 2006 and those elements s elements those and 2006 Act anies i t s l hi oye l idi ose ( n one year: not directors ary un ary d d g

t i

n t es 47 to 52 and form part of these parent company financial statements. financial company parent ofthese 47es part to form 52 and s i n t h d h e erta ose compan U g s of the s ofthe n ) ki i who have contracts of employment with the the with ofemployment contracts have who te ng d gs

s Ki ng C ompany are set out in note 14. in out set are ompany d i es om ’ statutory accounts. statutory . gs p ecified for audit b audit for ecified g -term incentive schemes, pension contributions and pension entitlements entitlements pension and contributions pension schemes, incentive -term y the Financial Services Authorit Services Financial the C ompany are charged to other to other charged are ompany A T r nnua i n i t y l

R Mi eport rror y & pl are shown in the tables in the the in tables the in shown are

A c ccounts 2010 G roup companies and 1 1,897.0 Nu ,896 m 12. 1 2 2 20 0. 5 0 0.6 3 2 0 103 010 010 ber £ £ 1 .1 .7 . . . .7 m m 5 3 8 6 6 3 – 0 SGS hares in u ndertakin 1 1 1,571.6 1,9 1 1,188.1 ( , ,57 , Numbe 1 951.6 428.3 4 380.0 G 28 8 5 2009 2009 2 rou 5. 1.2 7.1 2 2 1.0 1. 0 0 3 009 £ £ £ g . . . .5 . . m m m 9 9 3 3 6 6 3 8 – p s r )

Financials Governance Business review Who we are Trinity Mirror plc 104 Annual Report & Accounts 2010

Notes to the parent company financial statements continued

5 Debtors continued The details of the Company’s derivative financial instruments are the same as those of the Group and are disclosed in note 26 in the notes to the consolidated financial statements.

6 Deferred tax liabilities 2010 2009 £m £m Opening liability (4.9) (9.1) Change of tax rate applying to deferred tax 0.2 – Revised opening balance (4.7) (9.1) Tax (charge)/credit (2.6) 4.2 Closing liability (7.3) (4.9)

2010 2009 £m £m Amounts recognised comprise: Other short-term timing differences (7.3) (4.9)

7 Borrowings Due after Due after Due within more than Due within more than one year one year one year one year 2010 2010 2009 2009 £m £m £m £m Bank overdrafts – – 1.1 – Loan notes 137.8 226.1 – 355.0 Derivative financial instruments 2.2 – 3.1 2.9 140.0 226.1 4.2 357.9

2010 2009 £m £m Loan notes comprise: US$270 million unsecured loan notes 173.3 168.4 US$252 million unsecured loan notes 164.6 160.6 £16 million unsecured loan notes 16.0 16.0 £10 million unsecured loan notes 10.0 10.0 363.9 355.0

Syndicated unsecured bank loan There is no drawing (2009: £nil) on the bank facility of £178.5 million (2009: £178.5 million) which is committed until June 2013. notes have been swapped into floating rate sterling through the use of cross-currency interest rate swaps. At 2 January 2011, At 2January rate swaps. interest ofcross-currency use the through rate sterling into floating swapped been notes have

A Other creditor undertakin to owed subsidiary Amounts creditors 8 Other T instrument financial Derivative ( US the under payments interest and repayment capital the Both maturity. on full in repayable are notes loan the All £ United On 20 June 2002, the Group unsecured issued loan notes totalling US$252 million and £10 million through a private placing in th US US United On 24 October 2001, the Group unsecured issued loan notes totalling US$350 million and £22 million through a private placing in US$270 million £16 and loan notes million unsecured continued7 Borrowings US of the notes of the to t US notes of the (2009: £184.4 million) (net of costs) remains outstanding under these loan notes. costs The of the issue are being off written 2011, At 2January rate swaps. interest £189.3 ofcross-currency use the through rate sterling into floating swapped have been lo denominated US$ the under payments interest and repayments capital the Both maturity. on full in repayable are notes the All US £16 million 7.3% fixed rate D Series notes due 24 October 2011 US US$270 million and £16 million with interest different rates and maturities as follows 2009: 10 million 7.14 he details of the ofthe details he ccrua $ $ $ $ $ h $ 100 million 7.42% C Series notes due 20 June 201 102 million 7.17% A Series notes due 20 June 2012 190 million 7.04% fixed rate B Series notes due 24 October 2011 e conso 50 million 7.27% B notes Series due 20 June 2014 80 million 7.19% fixed rate C Series notes due 24 October 2013 252 million £10 and loan note million unsecured £ S S l s an 170.6 million tates and United Kingdom respectively. The placing consisted of four series with different interest rates and maturities as fol as maturities and rates interest different with series offour consisted placing The respectively. Kingdom United and tates totallin notes ofloan series ofthree consist notes loan ofthe balance outstanding The respectively. Kingdom United and tates . . d lid

d s ate % e f

erre S C d eries D notes due 20 June 2014 20 June due Dnotes eries

ompany’s derivative financial instruments are the same as those of the ofthe those as same the are instruments financial ompany’s derivative fi ) nanc d

( net ofcosts net

i ncom i a l statements. e ) remains outstandin remains s g s g 7 under these loan notes. The costs of the issue are bein are issue ofthe costs The notes. loan these under s : G roup and are disclosed in note 26 in the notes note in 26 the in disclosed are and roup A Trinit nnua y l

Mirror R e p ort ort & p g

lc A written off over the term term the over off written ccounts 2010 $ denominated loan loan denominated 1, 1 , 9 936.4 45. 20 8 0 105 £ over the term term the over 1 . . m 9 9 6 0 £ 174.6 million million million an notes e the the lows: g 1 1 , , 588.7 57 2 9 7 1. 009 £ . . m 6 8 3

Financials Governance Business review Who we are Trinity Mirror plc 106 Annual Report & Accounts 2010

Notes to the parent company financial statements continued

9 Pension scheme assets and liabilities The Company contributes to a number of the Group’s defined benefit pension schemes which operate for employees of a number of Group companies and is the sponsoring company for the Trinity Mirror plc Retirement Plan (the ‘Scheme’). The Company accounts for the Scheme in these parent company financial statements. The Company has announced the closure of this scheme to future accrual from 31 March 2010. For the schemes where the Company is not the sponsoring company, it is impracticable for the Company to identify its share of the underlying assets and liabilities and under FRS 17 the actual cost of providing pensions to these schemes is charged to the profit and loss account as incurred during the period. The pension credit before tax in the Company’s profit and loss account in the period was £0.3 million (2009: £0.2 million). Based on actuarial advice, the financial assumptions used in calculating the Scheme’s liabilities under FRS 17 are:

2010 2009 2008 2007 2006 % % % % % Inflation rate 3.45 3.50 2.75 3.30 3.00 Discount rate 5.40 5.70 6.50 5.80 5.10 Expected return on Scheme’s assets 4.90 5.80 6.20 5.80 5.90 Expected rate of salary increases – 3.75 3.25 4.35 4.00 Rate of pension increases in payment: pre 6/04/97 pensions 3.75 3.75 3.50 3.80 3.00 Rate of pension increases in payment: post 6/04/97 pensions 3.75 3.75 3.50 3.80 3.00 Rate of pension increase in deferment 2.70 3.50 2.75 3.30 3.00

Mortality rates are as follows:

2010 2009 2008 2007 2006 Years Years Years Years Years Future life expectancy for a pensioner currently aged 65: – male 21.7 21.6 21.4 20.1 18.6 – female 24.1 24.0 23.8 23.0 21.3 Future life expectancy at age 65 for a non-pensioner currently aged 55: – male 23.5 23.4 23.2 21.6 19.6 – female 25.8 25.7 25.6 24.4 22.4

Expected contributions and deficit payments for 2011 are £nil million and £0.6 million respectively. The amount included in the balance sheet in respect of the Scheme is as follows:

2010 2009 2008 2007 2006 £m £m £m £m £m Fair value of the Scheme’s assets 24.3 17.1 15.8 16.7 13.6 Actuarial value of the Scheme’s liabilities (20.3) (12.7) (11.2) (14.5) (14.7) Net surplus/(deficit) 4.0 4.4 4.6 2.2 (1.1) Irrecoverable surplus – (4.4) (4.6) (2.2) – Deferred tax (1.1) – – – 0.3 Net surplus/(deficit) 2.9 – – – (0.8)

The movement in liabilities during the period includes a £0.5 million benefit due to the government announced changes in state pension increases being linked to CPI instead of RPI which impacts deferred pensions in the Scheme. e upu/dfct 4. Net surplus/(deficit)

The ex Contributions cost Current service Pension schem Pension Openin T liabilities and assets scheme 9 Pension C I F Cor P e overseas Other U UK e A P B C A E O T P excludin account loss and Profit C A T n ixed interest he movement in the surplus the in movement he he movement in the fair value of Scheme’s assets durin ofScheme’s assets value fair the in movement he he ension finance credit xpected return on on return xpected ropert r ctuarial gain ctuarial nnuit enefits enefits S ash ontribution d losing fair value of of value fair losing penin ofi e ex p p t q q orate bond a rofit and loss account is anal is account loss and rofit li uities uities y p n n g g contract y k ected rates of return on each class of assets and the market value of assets, in the Scheme are: Scheme the in ofassets, value market the and ofassets class each on ofreturn rates ected d fair value of value fair Schem the in surplus/(deficit) p e (

losses aid loss d g s /( il g

t loss accou ilt s e )/ s s q gain uities ) on S S nt cheme’s assets s cheme’s asset S S cheme’s assets cheme’s asset /( deficit g pension schem pension y E sed below return a ) xpecte during the period is analysed below: analysed is period the during s r e ate o 4 4 4 5 6 8 8 8 20 2 – .1 . .20 .40 1.20 . .10 .1 .1 00 30 s 1 % 0 0 0 d 0 t f : va M e l 24.3 6 7. 6 2. ar ue a 20 . .4 k £m 80 00 90 1 et 0 – – 0 t g the period is analysed below: analysed is period the E re xpecte t rate o 6 8 8 4.4 4. 5 4.5 8.00 urn a urn 2009 continued .4 . . .7 00 00 20 % 0 0 0 0 d t f v 17.1 M a 1 2 0 5.7 7 l 2009 ue at ar .30 . .1 .1 90 £ k m et 96 93 2 17.1 0 0 0 0 – – – 201 20 201 ( ( 0 0 4. 2. 4. 6 0 1 0 1.2 1.4 £m £m £m 1 . . .7 . . . . . 0 3 5 4 9 8 3 0 5 2 9 – 0 0 0 ) ) E re xpecte t rate o 7 7 7 7 3 4 3 6 urn a urn 2008 . .90 ...... 00 90 90 60 20 90 50 % d t f 96 9 1 1 2009 2 2009 ( ( ( 1.6 0.1) 2.3 . . (1.1) 2.2 4.6 . . . 1.9 2.8 4. 2.1 4.4 0. 1.2 6. 7. 1. 1 1. 5 009 v 15. £m £ £ M a . . . m m 1 2 0 3 7 3 8 8 1 2 4 0 8 – –––– l 2008 ue a ar .30 .7 . . . ) ) 80 30 90 60 £ k m e 0 – – – t t A Trinit nnua E re xpecte t y rate o 6 7 7 7 4 4 4 5 urn a urn l 11 115.

Mirror 2007 R 9 1.8 .5 .90 . . . .5 . . 16 1 e 90 90 3 60 80 2008 2 2 ( ( ( p .)(0.2) 0.2) 1.3 2.7 5 0. 0.2 5. 2 1. % 008 008 0 51.0 d £ £ £m ort ort t f 71 .7 . . m m 6 3 3 3 8 1 0 – ) ) & p

lc A ccounts 2010 v 1 M a 4.4 6 3 4. 0 l 200 ue a ar .7 . . 30 80 90 50 £ k m e 0 0 0 – – 7 t t 608 608. 1 200 2 2007 ( 0.7 . 0.8 2.2 0.7 . 0.7 2 0 0.8 3 6 00 107 E £ £ £ . . . . . re xpecte m m m 8 2 6 9 9 7 – – 7 7 t rate o ) .01.60 6 8.00 8 8 4. 4.4 4.5 5 urn a urn 2006 . . . .1 00 00 00 00 % 0 0 0 d t f va 588 589.3 1 M 3 1 11.4 1.4 3 2 0 4. l 2006 2 2006 2006 ar ue a ( ( ( ( ( 0.8 0.7 1.1) 0.2) 3.6) 3 1. 0 . .5 .4 . 006 60 50 20 £ £ £ £ k . . .4 m m m m e 5 6 8 0 0 0 – – – t t ) )

Financials Governance Business review Who we are Trinity Mirror plc 108 Annual Report & Accounts 2010

Notes to the parent company financial statements continued

10 Called-up share capital The details of the Company’s called-up share capital are disclosed in note 29 in the notes to the consolidated financial statements. Dividends are disclosed in note 12 in the notes to the consolidated financial statements.

11 Share premium account The details of the Company’s share premium account are disclosed in note 30 in the notes to the consolidated financial statements.

12 Other reserves CilCapital redemption Profit and reserve loss account £m £m Opening balance 4.3 96.8 Transfer of retained loss for the period – (0.9) Other net recognised gains in the period – 2.3 Share-based payments credit – 2.0 Purchase of own shares – (3.5) Closing balance 4.3 96.7

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

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

2010 2009 £m £m On operating leases which expire: After five years 6.7 6.8

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

2010 2009 £m £m On operating leases which expire: Within one year 0.1 0.1 In second to fifth years 0.4 0.4 After five years 1.0 1.0 1.5 1.5

t t I ** * Owned directl M T T M undertakings Subsidiary 2011 at2January as are Kingdom, United the in incorporated are ofwhich all subsidiaries, principal Company’s ofthe Details 14 Principal subsidiaries MEN Media Limite Media MEN S T T T T T T Limite Wales Media T N S f R T T T T T T T T T T T AMRA of subsidiaries will be submitted to submitted be will of subsidiaries Gazette Media Company Limite Company Media Gazette n addition to the companies shown above, the the above, shown to companies the n addition ish4 Limite he with accordance In statements. financial consolidated the in figures the affect significantly not do opinion he directors’ r plc Regionals Mirror rinity r rinit rinit Limited Merseyside Mirror rinity rinit r Limite Southern Mirror rinity r r rinity Mirror Printing rinity Mirror Printin rinity Mirror Printin rinity Mirror Printing rinity Mirror Printing rinity Mirror Printin Limite (Cardiff) Printing Mirror rinity rinity Mirror Printin rinity Mirror Printin cottish and Universal News Universal and cottish Limite Mail Sunday and Record Daily cottish i CJ Media Limite Media CJ i i i i i C pp G G n n n n n ontrolled by the i i i i i C L2 Limit N Limited ty ty ty t t y y y y y leffect Studio Limite om Mirror Limited Huddersfield Limited Wales North Mirror Limited Cheshire Mirror Mi Mi Mi Mi Mi

Li rror rror rror rror rror p m anies Act 2006, a full list of subsidiaries was annexed to the 2010 annual return and submitted to submitted to 2010 and the annexed return was annual ofsubsidiaries list afull 2006, Act anies i d te ed y Di Di Di Midl N b d y ort g g g G the Com the i i i roup. ta ta ta an h d d l l l

g g g g g W Li P R d d (Teesside) Limited (Teesside) Limited (Saltire) (Midlands) Limite Limite (Blantyre) Limited s ( (O ( roperty roperty ecru m est Newcastle Watford p Li an i ldham te m d & y. d i tment tment i

te N d ort d p Li ) ) Limited Limite a m p h d ) Li Limite i

ers Limited te W m d C d a i te ompanies House during 2011 l d d es d d d Li m i te d d C ompany also holds investments in a number of other subsidiary undertakings, which in which undertakings, subsidiary ofother anumber in investments holds also ompany . N at i ona D l a i g N N N N N N N N N N N N N N d ital marketin ewspaper publishin ewspaper publishin ewspaper publishin ewspaper pu ewspaper publishin ewspaper publishin ewspaper pu ewspaper publishin ewspaper pu ewspaper publishin ewspaper publishin ewspaper pu ewspaper pu ewspaper publishin vert O O H Holdin Holding compan i C C C Contract Contract Contract C Contract Contract printer s nline recruitment nline recruitment o i O ontract printer ontract printer ontract ontract printer ng sa ldi P nline propert rincipal activit ng compan g A Trinit compan g nnua l es services bli bli bli bli bli p p p p p y h rinter rinter rinter rinter rinter l

Mirror s s s s s R ouse hi hi hi hi hi e p C n n n n n ort ort om g g g g g g g g g g g g g g s s s s s s s s s y y y y y & p

lc A p ccounts 2010 anies House. A full list list Afull House. anies S ection 410 Proportion ofordinary 109 follows s hares held ( 2 )( : a 1 100 100 1 100 100 1 100 100 100 100 1 100 1 100 100 100 100 100 1 100 100 100 1 100 1 1 1 100.00* 1 ) 00.00 00.00 00.00 00.00 00.00 00.00 00.00 00.00 00.00 00 00 53.55** o f ......

00 00 00 00 00 00 00 00 00 00 00 00 00 00 00 00 00 00 00* 00 % *

Financials Governance Business review Who we are Trinity Mirror plc 110 Annual Report & Accounts 2010 Group five year summary

2010 2009 2008 2007 2006 £m £m £m £m £m Income statement Revenue 762 763 872 971 1,003 Operating profit before non-recurring items 117 98 138 190 184 Operating profit/(loss) after non-recurring items 138 87 (88) 30 (63) Pension finance (charge)/credit (7) (10) 11 12 10 Finance costs net of investment revenues (7) (35) 4 (21) (36) Continuing operations profit/(loss) before tax 124 42 (73) 21 (89) Discontinued operations profit before tax – – – 136 60 Tax (charge)/credit (11) (13) 14 46 18 Profit/(loss) for the period 113 29 (59) 203 (11) Basic earnings per share before non-recurring items 33.6p 14.5p 38.4p 56.6p 42.5p Non-recurring items continuing and discontinued 11.0p (3.0)p (61.0)p 13.3p (46.5)p Basic earnings/(loss) per share of total operations 44.6p 11.5p (22.6)p 69.9p (4.0)p

Dividends per share – – 3.2p 21.9p 21.9p

Balance sheet Intangible assets 970 946 957 1,149 1,418 Property, plant and equipment 410 423 449 447421 Other assets and liabilities (463) (580) (522) (496) (675) 917 789 884 1,100 1,164 Net debt (237) (300) (349) (248) (441) Net assets 680 489 535 852 723

Total equity (680) (489) (535) (852) (723) * 1,000,001 + Company website: www.trinitymirror.co website: Company

Com 5 • t 500,001 –1,000,000 1 5 10 1, 101 –50 51 –100 1 –5 R A A • If Th S W re queries any have If you 121 +44 415 Shareholders: Overseas For 7047 T 6DA BN99 Sussex West Lancing, Road Spencer House, Aspect Equiniti Limite R 2 New D A T Th A Director Finance Group Vaghela, Vijay Communication ofCorporate Fullagar, Director Nick Manage Relations Investor Harrison, Claire Le Group and Secretary Vickers, Paul Re T L Canar Squar Canada One Registered offic informationShareholder T the Annual General Meeting which will be held at11.00 held be will which on Meeting am General the Annual Marsh Wall, London E14 London Marsh Wall, 9SH. • Report the matter to F the matter the • Report London EC4A 3B EC4A London risk shares in U in shares risk • United Kingdom h you rece you ele e C telephone providers may vary. Lines are open from 8.30am to 5.30pm Monday toFriday Monday to5.30pm 8.30am from open are Lines vary. may providers telephone 00 an o o 0 0 hursday, 12 May 2011 at the Hilton London Canary Wharf, hursday, 12 Wharf, 2011 May Canary London Hilton atthe hareholders are advised to be very wary of any unsolicited advice, offers to buy shares at a discount or offers of free company offree offers or atadiscount shares to buy offers advice, unsolicited ofany wary to very be advised are hareholders s at2 e 00 uditors na Meetin General nnual If C M eg e reg arn l alls to this number are charged at 8 pence per minute from a BT landline. landline. aBT from minute per 8pence at charged are number tothis alls , 1 –1, , n ese are typ are ese e t ep t g l 001 –50 g 00 o heck that they are properly authorised by the F by the authorised properly are they that heck a a , do p h e istered in En in istered 1 – 00 N i l i l 0 k tte e ca h +44 hone: ys strar s p 1 – ot e sure you you e sure y i n E14 one: 0871one: 2235 384 1 –5 i ng to s S an Whar strars. J 000 i LLP i ce o treet treet 0 anuary 2011,anuary t s o 0 ll y i , s pers 00 ve any unso ve any 000 s contact , 00 00 f 5 f ,

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Financials Governance Business review Who we are Trinity Mirror plc 112 Annual Report & Accounts 2010 Investor relations

We communicate with the financial community on a regular and Dividend policy ongoing basis to support our stakeholders in their investment Our dividend policy is to increase dividend progressively while decision process. While the investor relations programme is driven by maintaining a dividend cover (adjusted earnings per share/dividend statutory reporting requirements, it also contains a strong element of per share) of at least 2x if earnings are increasing. However, in light of additional communication in the form of meetings and presentations. the challenging trading environment faced by the Group, the Board concluded at the 2008 preliminary results that it was prudent to retain Key activities maximum financial flexibility for the Group. Therefore, alongside In addition to standard regulatory reporting, key themes in our actions being taken on costs and in other areas of the business, the communications with the financial market in 2010 were the Board did not pay a final dividend for 2008 or any dividend for 2009 modernisation of business processes and structures throughout the and is not declaring a dividend for 2010. Group via the implementation of the new operating model, implications of the fragile economic environment, the downturn in Online share dealing advertising, the acquisition of GMG Regional Media, the strength of Trinity Mirror provides an internet-based service called Shareview our balance sheet, our financing facilities and our pension position. through Equiniti Limited. The service allows current shareholders to sign up for e-communication and receive shareholder mailings Key dates in 2010 electronically, buy and sell shares online using Shareview Dealing and send their voting instruction electronically if they have already 4 March 2010 Preliminary Results Announcement registered for Shareview or have received a voting form with an 13 May 2010 Annual General Meeting electronic reference. For more information on the service, please see www.trinitymirror.com/ir/services/dealing/ 13 May 2010 Interim Management Statement Trinity Mirror share price and traded volumes 2010 29 July 2010 Interim Results Announcement 11 November 2010 Interim Management Statement (p) (m) 200 40 In 2010, the focus of our investor relations efforts continued to be on 180 36 institutional investors and analysts. This year we maintained a 160 32 proactive targeting programme, reaching out to new investors in the 140 28 UK, Continental Europe and the US. In addition to these marketing 120 24 efforts, we continued to respond to ad hoc queries and meeting 100 20 requests from analysts and investors. We held meetings with over 40 institutional investors during the year. The largest concentration 80 16 of meetings was among UK investors, followed by the US and 60 12 Continental Europe. 40 8 20 4 Key dates in 2011 0Jan Feb Mar AprMay Jun Jul AugSep OctNov Dec0 Average weeklyy price Weeklyy volume 3 March 2011 Preliminary Results Announcement 12 May 2011 Annual General Meeting Trinity Mirrorr vs FTSE 350 Media Index 2010 12 May 2011 Interim Management Statement 28 July 2011 Interim Results Announcement 200 10 November 2011 Interim Management Statement 175

150

Key contacts 125 Sly Bailey, Chief Executive 100 Vijay Vaghela, Group Finance Director 75

Paul Vickers, Secretary and Group Legal Director 50

Nick Fullagar, Director of Corporate Communications 25

Claire Harrison, Investor Relations Equity Analyst 0 JanFeb Mar AprMay Jun Jul AugSep OctNov Dec Trinity Mirror FTSE 350 Media Indeex Design and production: Radley Yeldar www.ry.com Trinity Mirror plc Investor Relations Registered offi ce: Claire Harrison One Canada Square Trinity Mirror plc Canary Wharf One Canada Square London E14 5AP Canary Wharf +44 (0)20 7293 3000 London E14 5AP www.trinitymirror.com +44 (0)20 7510 6613 [email protected]