Experian 2009 Annual Report Download - page 37

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35Experian Annual Report 2009
Introduction
2 – 7
Business review
Financial review
Governance
44 – 72
Financial statements
73 – 148
35
Interest rate risk
The Group’s interest rate exposure
is managed by the use of xed and
oating rate borrowings and by the
use of interest rate swaps to adjust
the balance of xed and oating rate
liabilities. The Group also mixes the
duration of its borrowings and interest
rate swaps to smooth the impact of
interest rate uctuations.
Credit risk
The Group’s exposure to credit risk is
managed by dealing only with banks
and nancial institutions with strong
credit ratings, within limits set for each
organisation. Dealing activity is closely
controlled and counterparty positions
are monitored regularly.
Liquidity risk
The Group maintains long-term
committed facilities to ensure it has
sufcient available funds for operations
and planned expansions. The Group
monitors rolling forecasts of projected
cash ows to ensure that it will have
adequate undrawn committed facilities
available.
Capital risk management and
going concern
The Group’s objectives in managing
capital are to safeguard its ability to
continue as a going concern in order to
provide returns for shareholders and
benets for other stakeholders and to
maintain an optimal capital structure
and cost of capital.
In order to maintain or adjust the
capital structure, the Group may
adjust the amount of dividends paid
to shareholders, return capital to
shareholders, issue new shares or
sell assets to reduce net debt. As part
of its internal reporting processes
the Group monitors capital employed
by geographical segment. For this
purpose, capital employed excludes net
debt and taxation balances. The Group
manages its working capital in order
to meet its target for the conversion of
at least 85% of its EBIT into operating
cash ow. This target forms one of its
key performance indicators.
The board has formed a judgment
at the time of approving the nancial
statements that there is a reasonable
expectation that the Group and the
Company have adequate resources to
continue in operational existence for
the foreseeable future. In arriving at this
conclusion the board has taken account
of current and anticipated trading
performance, together with the current
and anticipated levels of net debt and the
availability of the committed borrowing
facilities detailed above. For this reason,
the going concern basis continues to be
adopted in the preparation of the Group
and the Company nancial statements.
Exceptional items
Expenditure of US$92m arose in
the year in connection with the
Group’s strategic programme of cost
efciency measures. Of this, US$51m
related to redundancy and US$34m
related to offshoring activities, other
restructuring and infrastructure
consolidation costs. The programme
of cost efciency measures is now
expected to deliver annualised savings
of approximately US$150m, of which
US$80m has been realised in the
current year. Total exceptional costs of
this programme are now expected to
be in the region of US$170m.
During the year Experian initiated the
closure of its Canadian credit bureau
and is in discussions to terminate the
joint venture in Japan.
Demerger and related restructuring
costs comprise legal and professional
fees, together with costs in connection
with the cessation of a number of
subsidiaries of the former GUS plc.