Experian 2008 Annual Report Download

Download and view the complete annual report

Please find the complete 2008 Experian annual report below. You can navigate through the pages in the report by either clicking on the pages listed below, or by using the keyword search tool below to find specific information within the annual report.

Page out of 148

  • 1
  • 2
  • 3
  • 4
  • 5
  • 6
  • 7
  • 8
  • 9
  • 10
  • 11
  • 12
  • 13
  • 14
  • 15
  • 16
  • 17
  • 18
  • 19
  • 20
  • 21
  • 22
  • 23
  • 24
  • 25
  • 26
  • 27
  • 28
  • 29
  • 30
  • 31
  • 32
  • 33
  • 34
  • 35
  • 36
  • 37
  • 38
  • 39
  • 40
  • 41
  • 42
  • 43
  • 44
  • 45
  • 46
  • 47
  • 48
  • 49
  • 50
  • 51
  • 52
  • 53
  • 54
  • 55
  • 56
  • 57
  • 58
  • 59
  • 60
  • 61
  • 62
  • 63
  • 64
  • 65
  • 66
  • 67
  • 68
  • 69
  • 70
  • 71
  • 72
  • 73
  • 74
  • 75
  • 76
  • 77
  • 78
  • 79
  • 80
  • 81
  • 82
  • 83
  • 84
  • 85
  • 86
  • 87
  • 88
  • 89
  • 90
  • 91
  • 92
  • 93
  • 94
  • 95
  • 96
  • 97
  • 98
  • 99
  • 100
  • 101
  • 102
  • 103
  • 104
  • 105
  • 106
  • 107
  • 108
  • 109
  • 110
  • 111
  • 112
  • 113
  • 114
  • 115
  • 116
  • 117
  • 118
  • 119
  • 120
  • 121
  • 122
  • 123
  • 124
  • 125
  • 126
  • 127
  • 128
  • 129
  • 130
  • 131
  • 132
  • 133
  • 134
  • 135
  • 136
  • 137
  • 138
  • 139
  • 140
  • 141
  • 142
  • 143
  • 144
  • 145
  • 146
  • 147
  • 148

Annual Report 2008
Realising a vision

Table of contents

  • Page 1
    Annual Report 2008 Realising a vision

  • Page 2
    ... Decision Analytics businesses help organisations and consumers to fulfil their ambitions through access to affordable credit. Its Marketing Services and Interactive businesses help organisations to grow successfully by reaching new markets and finding and keeping profitable customers. Experian...

  • Page 3
    ... Executive's review North America Latin America UK and Ireland EMEA/Asia Pacific Financial review Report on corporate responsibilities Key performance indicators Risks and uncertainties Business and market overview Governance 38 - 64 Governance 38 40 44 51 64 Board of directors Directors' report...

  • Page 4
    ... world. We have developed new and innovative products for credit managers and marketers, as well as for consumers wanting to protect their credit records. And we have continued to expand into new market sectors, such as government, energy, telecommunications and healthcare. In the UK alone, we won...

  • Page 5
    ... for all their support. Looking ahead, we are far from complacent about conditions in the US and UK financial markets, but the actions taken by the management team this year give me confidence in our ability to continue to steer through the current disruption. I believe that Experian is in good...

  • Page 6
    ... and message. Interactive Allowing consumers to monitor their personal credit files securely over the internet and to find the best deals on products and services. Credit Services Revenue by region Decision Analytics Revenue by region North America 43% Latin America 16% UK and Ireland 15% EMEA...

  • Page 7
    ... South Africa South Korea Spain Sweden Turkey United Kingdom United States Countries without Experian offices where Experian sells to clients Financial statements 65 - 144 Marketing Services Revenue by region Interactive Revenue by region North America 46% Latin America 1% UK and Ireland...

  • Page 8
    ...of North America Marketing Services. l New contract wins from major • clients, including Barclays, IBM Italia, Homeserve and GE Money. l Strong demand for our countercyclical products, including collections solutions and account management. Don Robert Chief Executive Officer 6 Experian Annual...

  • Page 9
    ... new marketing channels. l Development of new products in Consumer Direct for fraud prevention and identity protection. l Investment in new analytics Governance 38 - 64 Evolving our strategy At Experian, we are fortunate to have many opportunities to drive growth, underpinned by global expansion...

  • Page 10
    ...ended 31 March 2007 is now further analysed to show North and Latin America as separate segments Profit includes US$11m Serasa integration charge for the year ended 31 March 2008 Discontinuing activities include MetaReward, UK account processing and Loyalty Solutions 2 3 8 Experian Annual Report...

  • Page 11
    ...including the 70% stake in Serasa, Hitwise, Tallyman, N4 Solutions and a number of smaller infills. Acquisitions in the year are currently trading at least to plan, and Serasa is on plan for revenue and exceeds EBIT buy plan. Financial performance Despite the market challenges, we delivered a good...

  • Page 12
    ...wins for business credit reports and portfolio scoring services. There was also continued strong growth in automotive information, driven by market share gains in the sale of vehicle history reports. There was good strategic progress during the year, with a focus on new product development, enhanced...

  • Page 13
    ...'s new Family Secure protects families against identity theft through constant monitoring of both their Experian credit report and the personal information of their children, alerting them to any suspicious activity. Fraud Resolution Representatives provide expert support in resolving any issues and...

  • Page 14
    North America continued Interactive Includes Consumer Direct (online credit reports, scores and monitoring services sold direct to consumers) and lead generation businesses (LowerMyBills, online education and PriceGrabber) Revenue at Interactive grew by 5% in the year. Consumer Direct continued to ...

  • Page 15
    ... and the other products expected to result from the alliance will enable financial institutions to make more accurate credit management decisions. Business review North America Business review North America Governance 38 - 64 Financial statements 65 - 144 Experian Annual Report 2008 13

  • Page 16
    ...EBIT margin of 23.1% • Acquisition of 70% stake in Serasa transforms Experian's presence in Latin America Credit Services Includes consumer credit and business information In the year, Credit Services delivered revenue of US$305m, relating entirely to Serasa. Serasa benefited from positive macro...

  • Page 17
    ... position in one of the world's fastest growing markets for credit. It has also created exciting opportunities for Experian to introduce Serasa's clients to a wide range of powerful analytical products. Business review Latin America Governance 38 - 64 Financial review Revenue was US$324m for Latin...

  • Page 18
    ...the trade credit sector, as well as in account management and collections. During the year, there was also further focus on enhancing operational efficiency with new investment in low-cost delivery centres. Decision Analytics Includes credit analytics, decision support software and fraud solutions...

  • Page 19
    ... system during the year include Abbey, part of the Santander Group, Coors Brewers and Zurich, the home and car insurance company. Business review UK and Ireland Marketing Services Includes data integrity and data management, database management and analytics, digital services, internet marketing...

  • Page 20
    ...is defined as year-on-year revenue growth at constant exchange rates 2006, 2007 and 2008 exclude UK account processing Interactive Comprises CreditExpert (online credit reports, scores and monitoring services sold direct to consumers) and PriceGrabber (comparison shopping) Interactive delivered an...

  • Page 21
    ... 06 05 04 105 100 113 114 117 Business review UK and Ireland Expanding our product portfolio with marketleading collections software Experian acquired the Tallyman debt management system in May 2007. This market-leading collections software is used by consumer credit providers around the world to...

  • Page 22
    ...ected The pH Group. During the year, Experian disposed of Loyalty Solutions in Germany. There were strong credit bureaux performances across both consumer and business information, particularly in Southern and Eastern Europe and South Africa. New business wins in the year included GE Money in Norway...

  • Page 23
    ... in Sinotrust. Sinotrust is the market leader in China for business information and consulting services and one of the largest market research suppliers. More than 80% of the Fortune 500 companies operating in China use Sinotrust products and services. The company employs over 800 people and has of...

  • Page 24
    ...increase in revenue from continuing operations including the benefit of acquisitions. Earnings and dividends per share Basic earnings per share were 43.3 US cents in the year ended 31 March 2008. Bringing new confidence to the buying of used cars Experian's vehicle history information is a vital...

  • Page 25
    ... of the Group's borrowings are shown in note 30 to the financial Business review Financial review Share price and total equity The share price of Experian ranged from a low of 358p to a high of 633.5p during the year. On 31 March 2008, the mid market price was 367p, giving a market capitalisation...

  • Page 26
    ... margin Credit Services - direct business Decision Analytics Marketing Services Interactive Total EBIT margin3 1 2 3 574 154 78 189 (57) 938 7 945 27.4% 32.8% 9.4% 22.0% 21.8% Growth at constant exchange rates Discontinuing activities include MetaReward, UK account processing and Loyalty Solutions...

  • Page 27
    ... consolidation costs. Costs relating to the demerger of Experian and Home Retail Group comprise legal and professional fees in respect of the transaction, together with costs in connection with the cessation of the corporate functions of GUS plc and, in the year ended 31 March 2007, a charge...

  • Page 28
    ... US$m US$m Accounting policies and standards The principal accounting policies used by the Group are shown in note 2 to the financial statements. Revenue North America 2,061 Latin America 324 UK and Ireland 965 EMEA/Asia Pacific 710 Total revenue EBIT North America - direct business FARES 4,059...

  • Page 29
    ...-term partner, Mirae Credit Information Services (MCI). Experian Decision Analytics Korea will be accelerating the availability of highly customised and advanced credit management services for the financial services sector in South Korea, as well as extending these solutions to new market segments...

  • Page 30
    ..., responsible for the global Interactive and Marketing Services business lines and now CEO of UK and EMEA, and Tomas Carmona, an experienced CR manager from Serasa in Brazil. through our products, services and capabilities, balancing commercial benefit with consumers' rights and needs. l Inform...

  • Page 31
    ...software that ensures customer data accuracy at the point of capture. It has more than 10,000 clients in sectors as diverse as retailing, education and healthcare. St Clare's Healthcare System, which operates four hospitals in New Jersey, chose QAS for verifying and standardising address information...

  • Page 32
    Report on corporate responsibilities continued Looking forward One of the new roles for the CR Management Group is to hold regular 'horizon scanning' meetings looking at the risks and opportunities presented by a longer-term view around each of Experian's key responsibilities. These discussions are...

  • Page 33
    ... 2-5 Business review Report on corporate responsibilities Governance 38 - 64 Helping Government to improve the payment of child maintenance The Child Support Agency (CSA) is a Government organisation in the UK whose role is to help ensure that parents who live apart from their children contribute...

  • Page 34
    ... by the board and management team to assess Experian's success in achieving its objectives. Total revenue growth In the year ended 31 March 2008, Experian increased its revenue from continuing activities by 14% at constant exchange rates. Acquisitions accounted for 10% of the revenue growth, largely...

  • Page 35
    ....com Number of consumer credit bureaux Experian's consumer credit bureaux provide the foundation for its Credit Services and Decision Analytics businesses. During the year, Experian acquired a controlling interest in Serasa in Brazil, the fourth largest credit bureau in the world. Serasa provides...

  • Page 36
    ... IT systems, Experian maintains off-site copies of all information contained in databases and runs back-up data centres. The Group also has established support arrangements with third party vendors and strict standards, procedures and training schemes for technology services, physical security...

  • Page 37
    ... permission-based email marketing company, in May 2007. The acquisition extended the geographical reach of Experian's existing CheetahMail business into one of the largest and fastest growing email markets in Europe. Emailing Solution was founded in 2001 and provides email marketing services in...

  • Page 38
    ... portfolio - by product type, country and vertical market. l In the year ended 31 March 2008, l Experian owns and operates However, there are a number of companies that Experian views as key competitors, which are identified below: consumer credit bureaux in 15 countries and business credit...

  • Page 39
    ... / publishing / advertising Government / non-profit / education Automotive Other 1 Management estimate of percentage of revenue by vertical market Fair Isaac North America Excludes discontinuing activities and Serasa Source: Latest full year revenue, company 10k Experian Annual Report 2008 37

  • Page 40
    ... Officer of Experian North America in December 2002. In February 2005, he took responsibility for Experian globally as Chief Executive Officer of the Experian Group. Don joined the Board of the former GUS plc in April 2005. He is a Director of First Advantage Corporation, a Member of the Chapman...

  • Page 41
    ... companies (Experian Group Limited and Home Retail Group plc) at the end of 2006, since when he has developed a portfolio career. David has a degree in Economics from Cambridge University, is a Fellow of the Chartered Institute of Management Accountants and a Member of the Association of Corporate...

  • Page 42
    ... directors present their report and the audited financial statements for the year ended 31 March 2008. Principal activities and business review Experian is a global leader in providing information, analytical and marketing services to organisations and consumers to help manage the risk and reward...

  • Page 43
    .... The joint venture agreement provides The First American Corporation with a call right to purchase the Group's interest in FARES in the event of a change of control of the Company. Details of provisions relating to a change of control in directors' service contracts are described in the report on...

  • Page 44
    ... affecting the Group's performance is also disseminated through management channels, conferences, meetings, publications and internet sites. Employees are actively encouraged to become shareholders in Experian through the provision of save as you earn and other all-employee share plan arrangements...

  • Page 45
    ...annual general meeting. By order of the board Charles Brown Company Secretary 20 May 2008 Corporate headquarters: Newenham House Northern Cross Malahide Road Dublin 17 Ireland Registered office: 22 Grenville Street St Helier Jersey JE4 8PX Financial statements 65 - 144 Experian Annual Report 2008...

  • Page 46
    ... judgment. However, David Tyler was the group finance director of GUS plc and so did not fully meet the independence criteria on his appointment. The non-executive directors are appointed for three-year renewable terms. Sir Alan Rudge is the senior independent director. The board plans to have six...

  • Page 47
    ...During the year under review, the non-executive directors visited Group business locations in Dublin, London and Nottingham to update and develop their knowledge. Additionally, at board meetings, the directors receive specific business presentations from senior management. All directors received an...

  • Page 48
    ... they are members was as follows for the year ended 31 March 2008: Board* (Scheduled) Board (Ad hoc) Nomination committee* Remuneration committee* Audit committee* John Peace Don Robert Paul Brooks Fabiola Arredondo Laurence Danon Roger Davis Sean FitzPatrick Alan Jebson Sir Alan Rudge David Tyler...

  • Page 49
    ... audit committee comprises the seven non-executive directors including David Tyler who did not fully meet the independence criteria on his appointment. Alan Jebson is the chairman of the committee. Following a review of principal board committee membership during the year, it remains the opinion of...

  • Page 50
    ... written terms of reference to assist in its monitoring of corporate governance issues. The committee's responsibilities include keeping under review all legislative, regulatory and corporate governance developments that might affect the Company's operations and making recommendations to the board...

  • Page 51
    ...relating to social, environmental and ethical matters. This process was in place throughout the year under review and up to the date of approval of the annual report and meets the requirements of the Code. For certain joint arrangements, the board places reliance upon the systems of internal control...

  • Page 52
    ... halfyearly reports, at the annual general meeting and through the processes described below. Although most shareholder contact is with the Chief Executive Officer and the Chief Financial Officer, supported by management specialising in investor relations, it is the responsibility of the board as...

  • Page 53
    ... published on the Company's website www.experiangroup.com. Committee membership and meetings The remuneration committee comprises the following non-executive directors: Roger Davis (Chairman) Fabiola Arredondo Laurence Danon Sean FitzPatrick Alan Jebson Sir Alan Rudge David Tyler All members of the...

  • Page 54
    ... performance-related elements of the package. In fair value terms, the proportion of total remuneration (excluding pension and benefits) which is shown as variable is approximately 71% as illustrated. Fair value of executive director remuneration Fixed 29% Variable 71% 52 Experian Annual Report...

  • Page 55
    ...-year period - Relative total shareholder return against a tailored comparator group measured over a threeyear period, subject to satisfactory overall financial performance Governance Report on directors' remuneration Experian Share Option Plan - Direct link to value creation through share price...

  • Page 56
    ... the GUS Co-investment Plan). Executive directors will not participate in the Experian Co-investment Plan in respect of the 2007/08 fiscal year and bonus payments will be made in cash. Experian performed strongly in 2007/08 in a particularly difficult trading environment and the bonuses payable to...

  • Page 57
    ...Experian's Total Shareholder Return ('TSR') (defined as share price movement plus reinvested dividends) relative to the following group of peer companies: Acxiom Alliance Data Systems Bisys Group Capita Group Choicepoint Dun & Bradstreet Equifax . Governance Report on directors' remuneration Fair...

  • Page 58
    ... subsidiaries are eligible to participate in Sharesave if they have been employed by Experian for a qualifying period. Sharesave provides an opportunity for employees to save a regular monthly amount which at the end of the savings period may be used to purchase Experian Group Limited shares...

  • Page 59
    ...Experian Group Limited shares and other executive directors, one times their base salary, including shares held under the Co-investment and Reinvestment plans. Each of the executive directors meets these guidelines. Governance Report on directors' remuneration Non-executive directors' remuneration...

  • Page 60
    ...per annum in respect of their services as directors of Experian Group Limited. Such fees form part of, and are not additional to, the remuneration set out in the table. 5. During the year under review, Don Robert served as a non-executive director of First Advantage Corporation for which he received...

  • Page 61
    ...the board of GUS plc in April 2005 were granted under the GUS North America Stock Option Plan. The 2005 and 2006 grants were made under the GUS Executive Share Option Scheme. 3. Options were granted to David Tyler in respect of his role as an executive director of GUS plc. On the demerger of GUS plc...

  • Page 62
    ... made to executive directors on demerger in October 2006 under the Experian Performance Share Plan. Both awards are outlined below. For awards granted under the rolled over GUS Performance Share Plan, the performance condition is based on Total Shareholder Return against the comparator group adopted...

  • Page 63
    ... Plan awards vested at the time of the GUS plc demerger, and he did not reinvest these awards. David Tyler's 2006 GUS Co-investment Plan awards were rolled over on the basis described in footnote 3 to the Share Options table on page 59. Financial statements 65 - 144 Experian Annual Report...

  • Page 64
    ... Six former directors of Experian Finance plc (formerly GUS plc) have been receiving unfunded pensions from the Company for a number of years. The pensions of two of these former directors were transferred into the registered scheme in October 2006. Three of the former directors are now members of...

  • Page 65
    ...of the Company's subsidiaries. Shares held in Experian Group Limited at 31 March 2008 (1) Chairman John Peace Executive directors Don Robert (2) Paul Brooks (2) Non-executive directors Fabiola Arredondo Laurence Danon Roger Davis Sean FitzPatrick Alan Jebson Sir Alan Rudge David Tyler Notes: 1,136...

  • Page 66
    ... and the report on directors' remuneration in accordance with applicable law and United Kingdom Accounting Standards (UK Generally Accepted Accounting Practice). The directors are responsible for preparing financial statements for each financial year which give a true and fair view, in accordance...

  • Page 67
    ... reported separately on the parent company financial statements of Experian Group Limited for the year ended 31 March 2008 and on the information in the report on directors' remuneration that is described as having been audited. Respective responsibilities of directors and auditors Business review...

  • Page 68
    ...acquisition intangibles exclude: goodwill adjustment exclude: charges in respect of the demerger-related equity incentive plans exclude: financing fair value remeasurements exclude: tax expense on share of profit of associates...year dividend per share 14 18.5 17.0 66 Experian Annual Report 2008

  • Page 69
    ... assets Equity Share capital Share premium Retained earnings Other reserves Total shareholders' equity Minority interests in equity Total equity 2,117 Financial statements Group financial...the board on 20 May 2008 and were signed on its behalf by: John Peace Director Experian Annual Report 2008 67

  • Page 70
    ... ended 31 March 2008 Net income/(expense) recognised directly in equity Cash ï¬,ow hedges Net investment hedge Reversal of net investment hedge Fair value losses on available for sale financial assets Actuarial gains in respect of defined benefit pension schemes Currency translation differences...

  • Page 71
    ... Home Retail Group at demerger Exchange and other movements (including movements in respect of debt) Net debt at the end of the financial year (note 25) Financial statements Group financial statements (1,408) (487) (707) - (97) (2,699) (3,437) 495 1,427 435 (328) (1,408) Experian Annual Report...

  • Page 72
    ...of Experian and Home Retail Group was completed by way of demerger. As part of the demerger, the Company became the ultimate holding company of GUS plc (now Experian Finance plc) and related subsidiaries and shares in GUS plc ceased to be listed on the London Stock Exchange on 6 October 2006.Trading...

  • Page 73
    ... subscriptions to services, software and database customisation and development and the sale of software licences, maintenance and related consulting services. Revenue in respect of the provision and processing of data is recognised in the year in which the service is provided. Subscription revenues...

  • Page 74
    ... The Group has a number of equity settled, share-based compensation plans. These include awards in respect of shares in the Company made at or after demerger together with awards previously made in respect of shares in GUS plc which were rolled over into awards in respect of shares in the Company at...

  • Page 75
    ... in the year in which it is incurred. Business review 6 - 37 Databases and computer software Databases Capitalised databases comprise the fair value of databases acquired as part of a business combination or the data purchase and data capture costs of internally developed databases. Databases are...

  • Page 76
    ... on disposal exclude dividend and interest income. At each balance sheet date, the Group assesses whether there is objective evidence to suggest that available for sale financial assets are impaired. In the case of equity securities, a significant or prolonged decline in the fair value of the...

  • Page 77
    .... Business review 6 - 37 Accounting for derivative financial instruments and hedging activities The Group uses derivative financial instruments to manage its exposures to ï¬,uctuations in foreign exchange rates, interest rates and certain obligations, including social security obligations...

  • Page 78
    ... for hedge accounting are recognised immediately in the Group income statement. Costs in respect of derivatives entered into in connection with social security obligations on employee share incentive schemes are charged as an employment cost; other changes are charged within financing fair value...

  • Page 79
    ... lease. Financial statements Group financial statements Employee benefits Defined benefit pension arrangements - funded schemes The retirement benefit assets recognised in the Group balance sheet comprise the fair value of plan assets of funded schemes less the present value of the related de...

  • Page 80
    ... benefits to certain retired employees and their dependent relatives.The principal scheme relates to former employees in the UK and, under this scheme, the Group has undertaken to meet the cost of post-retirement healthcare insurance for all eligible former employees who retired prior to 1 April...

  • Page 81
    ... a five year period. The growth rates used do not exceed the long-term average growth rate for the businesses in which the segment operates. In view of the significance of the Serasa acquisition on the Latin American segment goodwill, the impairment review was based on the fair value evidenced by...

  • Page 82
    ... the Group's accounting periods beginning on or after 1 April 2008: l IFRS 3 (Revised) 'Business Combinations' (*); l IFRS 8 'Operating segments'; l IAS 23 'Amendment to IAS 23 'Borrowing Costs'' (*); l IAS 27 (Revised) 'Cost of an Investment in a Subsidiary, Jointly Controlled Entity or Associate...

  • Page 83
    ...capital sums invested and ensure adequate short-term liquidity, whist maximising returns. Prior to the demerger in October 2006, the Group transacted primarily in Sterling. The hedging and risk management strategies pursued for the years then ended reï¬,ected this. Policies adopted since demerger re...

  • Page 84
    ... 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...

  • Page 85
    ... Credit Services database information and helps clients by applying analytical tools and software to convert data held internally and other data into usable business information. Financial statements Group financial statements Marketing Services helps clients to acquire new customers and to manage...

  • Page 86
    ... to the Group financial statements continued 5. Segmental information (continued) Geographical segments - 2008 (a) Income statement - Year ended 31 March 2008 North America1 US$m Latin America1 US$m UK & EMEA/ Ireland Asia Pacific US$m US$m Central activities US$m Total Group2 US$m Revenue from...

  • Page 87
    ... 294 164 1,033 - 50 711 - 72 387 1 54 - - 4 3,605 295 344 1. As indicated in note 2, an additional segment has been included for the year ended 31 March 2008 to report activity in Latin America. Governance 38 - 64 Financial statements Group financial statements Experian Annual Report 2008 85

  • Page 88
    ... in note 2, the segmental information presented in respect of the Americas for the year ended 31 March 2007 is now further analysed to show North and Latin America as separate segments. 2. Additional information on discontinued operations, which comprise Home Retail Group, together with a tax...

  • Page 89
    ... segments. 2. Additional information on discontinued operations, which comprise Home Retail Group, together with a tax charge in respect of disposals, is shown in note 12. Business segments (a) Income statement Year ended 31 March 2008 Credit Services US$m Decision Analytics US$m Marketing Services...

  • Page 90
    ... from Credit Services included US$11m of inter-segment revenue with discontinued operations. 3. Inter-segment revenue represents the provision of services between Experian and discontinued operations. 4. No allocation by business segment is made for charges in respect of the demerger-related equity...

  • Page 91
    ...ected in the geographical analysis, all Group properties are included within Central activities as they are not allocated by business segment. (c) Capital expenditure 2008 US$m 2007 US$m Continuing operations Credit Services Decision Analytics Marketing Services Interactive Central activities Total...

  • Page 92
    ..., including fees for the review of the Group's half-yearly financial report Taxation services Services in respect of the demerger All other services, including regulatory and compliance services Total fees payable to the Company's auditor and its associates for other services 105 102 320 3 1,582...

  • Page 93
    ...Social security costs Share-based payments Pension costs - defined benefit plans Pension costs - defined contribution plans Total continuing operations 35 27 27 1,249 208 76 12 37 1,582 1,025 161 91 17 33 Business review 6 - 37 1,327 Average number of employees (including executive directors...

  • Page 94
    ... on early vesting and modification of share awards at demerger of Experian and Home Retail Group Other costs incurred relating to the demerger of Experian and Home Retail Group Closure of UK Account Processing Loss on disposal of businesses Gain arising in associate on the partial disposal of its...

  • Page 95
    ...). Charges in respect of demerger-related equity incentive plans relate to one-off grants made to senior management and at all staff levels at the time of the demerger, under a number of equity incentive plans.The cost of these one-off grants is being charged to the Group income statement over the...

  • Page 96
    ... (16) (9) (34) (3) (9) 68 The effective tax rate for the year of 17.7% (2007: 17.3%), after adjusting for the net income from associates, is lower than the standard rate of corporation tax in the United Kingdom of 30% (2007: 30%). The differences are explained above. 94 Experian Annual Report 2008

  • Page 97
    ... of Home Retail Group were distributed by way of a dividend in specie. As a consequence, these operations were classified as discontinued in the Group financial statements for the year ended 31 March 2007. The tax charge in respect of disposals related to taxation assets no longer recoverable...

  • Page 98
    ... for diluted earnings per share. The weighted average number of ordinary shares in issue during the year ended 31 March 2007 includes ordinary shares of GUS plc in issue to the date of the demerger and the ordinary shares of the Company in issue thereafter (excluding own shares held in Treasury in...

  • Page 99
    ... relating to the demerger of Home Retail Group Full year dividend for the year ended 31 March 6.5 11.5 - 18.0 66 116 - 182 - 5.5 - 40.3 45.8 55 - 346 Business review 6 - 37 401 5,627 18.5 17.0 170 A dividend of 12 US cents per ordinary share will be paid on 25 July 2008 to shareholders...

  • Page 100
    ... year acquisitions. Following the demerger of Home Retail Group in the year ended 31 March 2007, there is no goodwill carried in the Group balance sheet in respect of that business. Experian US$m Home Retail Group US$m Total US$m At 1 April 2006 Differences on exchange Additions through business...

  • Page 101
    ... US$m Acquisition intangibles1 US$m Total US$m Cost At 1 April 2006 Differences on exchange Additions through business combinations Other additions Demerger of Home Retail Group Disposals At 31 March 2007 Amortisation and impairment losses At 1 April 2006 Differences on exchange Charge for the year...

  • Page 102
    ...'s share of revenue for the year ended 31 March 2008 is US$249m (2007: US$249m), and its share of profit after tax US$50m (2007: US$67m). First American Corporation, which holds the balance of the capital of FARES, has the right to acquire from Experian its interest in FARES at a purchase price...

  • Page 103
    ... 2,373 - 3,139 766 2,373 40 3,179 1. VAT and other tax payable of US$52m (2007: US$42m), social security costs of US$95m (2007: US$75m) and accruals of US$196m (2007: US$200m) are included in trade and other payables in note 23 but are excluded from this analysis. Experian Annual Report 2008 101

  • Page 104
    ... - 11 11 There is no material difference between the fair value of trade and other receivables and the book value stated above. All non-current trade and other receivables are due within five years from the balance sheet date. (b) The carrying amounts of the Group's trade and other receivables are...

  • Page 105
    ... for the year ended 31 March 2007 reported above exclude any movements in respect of the provisions that related to Home Retail Group trade receivables in the period from 1 April 2006 to the date of demerger. Other provisions in respect of trade receivables mainly comprise credit note provisions...

  • Page 106
    ... 68 1,031 - - - 17 35 52 There is no material difference between the fair value of trade and other payables and the book value stated above. Noncurrent trade and other payables of US$nil (2007: US$1m) are due after more than five years from the balance sheet date. 24. Loans and borrowings (a) The...

  • Page 107
    ... - 273 1 2,377 Governance 38 - 64 (d) The minimum lease payments payable under finance leases comprise: 2008 US$m 2007 US$m Not later than one year Later than one year and not later than five years Total minimum lease payments Future finance charges on finance leases Present value of finance...

  • Page 108
    ... of UK Marketing Services, which was utilised in full in the year ended 31 March 2008. The restructuring provision at 31 March 2007 of US$30m disclosed within non-current liabilities comprised the anticipated future costs of the withdrawal by Experian from large scale credit card and loan account...

  • Page 109
    ... by that business. On demerger the pension rights of certain Home Retail Group employees, who had been members of the then GUS Pension Scheme, were transferred to the Argos Pension Scheme. Certain Home Retail Group employees who had been members of the then GUS Money Purchase Pension Plan were...

  • Page 110
    ... UK Marketing Services businesses, as well as the cessation of certain corporate functions in GUS plc. The charge to the Group profit and loss account reserve in the year ended 31 March 2007 in respect of the Argos Pension Scheme formed part of the dividend in specie on the demerger of Home Retail...

  • Page 111
    ...US$56m) in respect of the Group's unfunded arrangements. Changes in the market value of the plan assets 2008 US$m 2007 US$m At 1 April Differences on exchange Demerger of Home Retail Group Additions through business combinations Expected return on schemes' assets Settlement or curtailment Actuarial...

  • Page 112
    ... policy. Expected yields on fixed interest investments and securities are based on gross redemption yields as at the balance sheet date. Expected returns on equity and other investments reï¬,ect the long-term real rates of return experienced in the respective markets. 110 Experian Annual Report...

  • Page 113
    ... - UK Listed equity securities - North America 34 8 42 29 9 38 (c) Available for sale financial assets are denominated in the following currencies: 2008 US$m 2007 US$m Financial statements Group financial statements Sterling US Dollar 34 8 42 29 9 38 There is no material difference between...

  • Page 114
    ... in respect of acquisition of Serasa minority interest Total other financial liabilities - 16 32 2 50 - 50 20 5 - 66 91 583 674 40 - - - 40 - 40 There is no material difference between the fair values of these assets and liabilities and the book values stated above. (b) Notional principal...

  • Page 115
    ... of the written put on acquisition of Serasa and has no impact on the results previously reported at 30 September 2007.The gain since acquisition of US$69m, which is recorded as a financing fair value remeasurement, primarily relates to a fall of 7 in the expected future Experian P/E ratio during...

  • Page 116
    ... on the interest rate profile. 2. VAT and other tax payable of US$52m (2007: US$42m), social security costs of US$95m (2007: US$75m) and accruals of US$196m (2007: US$200m) are included in trade and other payables in note 23 but are excluded from this analysis. 114 Experian Annual Report 2008

  • Page 117
    ... April Differences on exchange Income statement charge (note 11) (including US$nil (2007: US$5m) relating to discontinued operations) Business combinations (note 34) Demerger of Home Retail Group Tax charged to equity Transfers At 31 March Net deferred tax (liabilities)/assets have been presented in...

  • Page 118
    ... year - Employee share option schemes: - value of employee services - - proceeds from shares issued 1.1 Exercise of share options - Liability on put option over minority interests - Minority interest arising on business combinations - Purchase of own shares by employee trusts - Equity dividends...

  • Page 119
    ... of Experian and Home Retail Group was completed by way of demerger. As part of the demerger, Experian Group Limited became the ultimate holding company of GUS plc and related subsidiaries and shares in GUS plc ceased to be listed on the London Stock Exchange on 6 October 2006. Trading of shares in...

  • Page 120
    ... shares in the Company held by the Experian Group Limited Employee Share Trust and the Experian UK Approved All-Employee Plan Trust, including shares purchased by the GUS ESOP Trust to satisfy certain of the Group's obligations under its share incentive plans. During the year these trusts purchased...

  • Page 121
    ... Other than those obligations acquired in connection with the purchase of Serasa, the Group did not enter into any new finance lease arrangements during the year (2007: US$nil). Finance lease obligations of Serasa at the date of acquisition in June 2007 were US$19m. Experian Annual Report 2008 119

  • Page 122
    ...the acquisition and, at 31 March 2008, the Group's interest in Serasa was 70%.There are put and call options associated with the shares held by the remaining principal shareholders of Serasa and these are exercisable for a period of five years from June 2012. As indicated in note 2, the net present...

  • Page 123
    ...years Share distribution 5% Market price over the 3 dealing days preceding the grant Governance 38 - 64 1. Three day averages are calculated by taking middle market quotations of an Experian Group Limited share from the London Stock Exchange daily official list. Experian Sharesave Plans A number...

  • Page 124
    ... GUS share option plans, which were primarily rolled over into Experian equivalent plans at demerger, are as follows: Arrangements The 1998 Approved and Non-Approved Executive Share Option Schemes The North America Stock Option Plan Savings related share option schemes Nature Vesting conditions...

  • Page 125
    ... and Non-Approved Executive Share Option Schemes had expected lives of 4 years, The North America Stock Option Plan had an expected life of 3.75 years and the savings related share option schemes had expected lives of either 3 or 5 years. Share price on grant date: Experian Share Option Plan - The...

  • Page 126
    ... 1.26 5.83 4.72 26.7% 3.8% 5.7% 3.3 years 1.58 (v) Weighted average estimated fair values and the inputs into the Black-Scholes models - former GUS plans The 1998 Approved and Non-Approved Executive Share Option Schemes Arrangements The North America Stock Option Plan Share price on grant date...

  • Page 127
    ...) Number of options 2007 m Weighted average exercise price 2007 £ Options in respect of shares in GUS plc outstanding at 1 April 2006 New grants Forfeitures1 Exercised options Options in respect of shares in GUS plc at demerger Less: options rolled over into Home Retail Group share plans Less: GUS...

  • Page 128
    ...after demerger together with awards rolled over from former GUS plans: Experian Free Shares Plan and the Experian UK Approved All-Employee Plan Arrangements Experian Co-Investment Plan Experian Reinvestment Plan Experian Performance Share Plan Nature of arrangement Vesting conditions: - Service...

  • Page 129
    ...the value of demerger share awards. For the former GUS plans the value of awards is determined as the market closing price on the date awarded grants are issued to participants. For the Experian Reinvestment Plan and the former GUS Co-Investment Plan, this occurs after the first year of performance...

  • Page 130
    ...Experian Group Limited outstanding at 31 March 2008 24.6 2.1 (2.5) (0.5) 23.7 Number of awards 2007 m Awards in respect of shares in GUS plc outstanding at 1 April 2006 New grants Vesting Awards in respect of shares in GUS plc outstanding at demerger Less: awards rolled over into Home Retail Group...

  • Page 131
    Introduction 2-5 35. Share-based payment arrangements (continued) (d) Other share awards During the year ended 31 March 2007, Experian Group Limited issued put options to a small number of employees who owned an equity interest in a subsidiary. Under the terms of the associated agreement, these ...

  • Page 132
    ...parent company and its subsidiaries, and between subsidiaries, have been eliminated on consolidation. Home Retail Group Home Retail Group is no longer a related party of the Group and there has been no charge in the year (2007: US$0.3m) in respect of services provided under the terms of the demerger...

  • Page 133
    ... statements of Experian Group Limited for the year ended 31 March 2008. Respective responsibilities of directors and auditors Business review 6 - 37 The directors' responsibilities for preparing the annual report, the report on directors' remuneration and the parent company financial statements...

  • Page 134
    Parent company profit and loss account for the year ended 31 March 2008 2008 £m 2007 £m Notes Administrative expenses Operating loss Net interest (expense)/income Net foreign exchange gain Loss on ordinary activities before taxation Tax on loss on ordinary activities Loss for the financial year...

  • Page 135
    ....7 777.5 5,062.4 5,894.6 54.7 773.8 5,061.2 5,889.7 The financial statements on pages 132 to 141 were approved by the board on 20 May 2008 and were signed on its behalf by: Governance 38 - 64 John Peace Director Financial statements Company financial statements Experian Annual Report 2008 133

  • Page 136
    ... the parent company financial statements for the year ended 31 March 2008 A. Corporate information Experian Group Limited (the 'Company') is incorporated and registered in Jersey as a public company limited by shares. The principal legislation under which the Company operates is Jersey Companies Law...

  • Page 137
    ... expected to be recoverable. Business review 6 - 37 Own shares The Experian Group Limited Employee Share Trust, the Experian UK Approved All-Employee Share Plan and the GUS plc ESOP Trust are separately administered trusts. Liabilities of these trusts are guaranteed by the Company and the assets of...

  • Page 138
    ... before 31 March 2008. For further details of payment arrangements see note 14 in the Experian Group financial statements. Additionally, in the period ended 31 March 2007, there was a dividend in specie of £3,497.5m relating to the demerger of Home Retail Group. 136 Experian Annual Report 2008

  • Page 139
    ...864.3) - 3,676.5 8,675.6 (6,381.6) (4,833.2) 1,137.3 At 31 March 2007, the total investment in group undertakings included £4,833.2m in respect of an advance to Experian Investment Holdings Limited. During the year ended 31 March 2008, the amount of this advance has been reduced by £2,791.2m in...

  • Page 140
    Notes to the parent company financial statements continued H. Investments in group undertakings (continued) Additions in the year ended 31 March 2008 comprised the fair value of the share incentives issued to employees of subsidiary undertakings during the year of £33.0m and subscriptions of £150...

  • Page 141
    ... share incentive schemes At 31 March 2008 Period ended 31 March 2007 Loss for the financial period Transfer to profit and loss account on reduction in share capital Equity dividends paid during the year Dividend in specie relating to the demerger of Home Retail Group Transfer of own shares at fair...

  • Page 142
    ... during the financial year Dividend in specie relating to the demerger of Home Retail Group Transfer of own shares at fair value Purchase of own shares by employee trusts Share issues on demerger of Home Retail Group Share issues by way of Global Offer Exercise of share options Credit in respect of...

  • Page 143
    ... QAS Limited Hitwise Pty Ltd Serasa SA Experian A/S Experian Holdings France S.A. CreditInform AS Experian North America, Inc. ConsumerInfo.com Inc. PriceGrabber.com, Inc. LowerMyBills, Inc. Experian Information Solutions Inc. Experian Services Corporation Experian Marketing Solutions Inc. Associate...

  • Page 144
    ...the Company's Registrars, Equiniti (Jersey) Limited. Registration is via the Company's website, www.experiangroup.com, or direct via www.experianshareview.com. The service enables shareholders to access a comprehensive range of shareholder services online, including dividend payment information, the...

  • Page 145
    ... one Experian Group Limited ordinary share. For further information please contact: Shareholder Relations The Bank of New York Mellon PO Box 11248 Church Street Station New York NY 10286 - 1258 United States T: + 1 610 382 7836 (from the USA: 1-888-BNY-ADRS) Business review 6 - 37 Governance 38...

  • Page 146
    Shareholder information continued Financial calendar Second interim dividend record date Interim management statement - First quarter Annual general meeting* Second interim dividend to be paid First half trading update Half-yearly financial report Interim management statement - Third quarter ...

  • Page 147
    ...-based inks and a single-site production facility that required no transport between processes. The report is printed on an environmentally responsible paper that uses 50% certified de-inked post consumer waste and 50% certified virgin fibre from sustainable sources. Experian is also working with...

  • Page 148
    ... headquarters Experian Talbot House Talbot Street Nottingham NG80 1TH United Kingdom T +44 (0) 115 941 0888 F +44 (0) 115 934 4905 Experian 475 Anton Blvd Costa Mesa CA 92626 United States T +1 714 830 7000 F +1 714 830 2449 Corporate website www.experiangroup.com Corporate Responsibility Report...