---

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SECURITIES AND EXCHANGE
COMMISSIONWashington, D.C. 20549



FORM 20-F

[   ]
    REGISTRATION STATEMENT PURSUANT TO SECTION 12(b) OR (g) OF
      THE SECURITIES EXCHANGE ACT OF 1934OR[X]
    ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
      SECURITIES EXCHANGE ACT OF 1934 For the fiscal year ended
      December 31, 2003OR[   ]
    TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
      SECURITIES EXCHANGE ACT OF 1934For the transition period
      from_________to__________




Commission file number 333-11296



TDL INFOMEDIA HOLDINGS PLC(Exact name of
Registrant as specified in its charter)



ENGLAND AND WALES(Jurisdiction of incorporation of
organization)



THOMSON HOUSE, 296 FARNBOROUGH ROAD,
FARNBOROUGH, HAMPSHIRE GU14 7NU, ENGLAND(Address of principal executive offices)



Securities registered or to be registered pursuant of Section
12(b) of the Act.

None

__________________________

Securities registered or to be registered pursuant to Section
12(g) of the Act.

None

____________________________



Securities for which there is a reporting obligation pursuant to Section
15(d) of the Act.

15.5% Senior Discount Notes due 2010



Indicate the number of outstanding shares of each of the issuer's classes of
capital or common stock as of the close of the period covered by the annual
report.

39,712,444 Ordinary shares of £0.01 each



Indicate by check mark whether the registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 12 months (or for such shorter period that the
registrant was required to file such reports), and (2) has been subject to such
filing requirements for the past 90 days.

Yes
      _____X______
    No
  _______________Indicate by check
      mark which financial statement item the registrant has elected to
      followItem 17
      _________
    Item 18
    _____X_____




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> TABLE OF CONTENTS

|           |                                                                                                    |                                                                    |    |  | Pages
|---------- | -------------------------------------------------------------------------------------------------- | ------------------------------------------------------------------ | -- |  | -----
|PART I     |                                                                                                    |                                                                    |    |  | 1    
|           | ITEM 1.      IDENTITY OF
      DIRECTORS, SENIOR MANAGEMENT, AND ADVISORS                          | 1                                                                 
|           | ITEM 2.      OFFER
      STATISTICS AND EXPECTED TIMETABLE                                         | 1                                                                 
|           | ITEM 3.      KEY
      INFORMATION                                                                 | 1                                                                 
|           |                                                                                                    | A.   SELECTED FINANCIAL
      DATA                                 | 1 
|           |                                                                                                    | B.   CAPITALIZATION AND
      INDEBTEDNESS                         | 5 
|           |                                                                                                    | C.   REASONS FOR THE OFFER AND USE OF
      PROCEEDS               | 5 
|           |                                                                                                    | D.   RISK FACTORS                                                  | 5 
|           | ITEM 4.      INFORMATION
      ON THE COMPANY                                                      | 10                                                                
|           |                                                                                                    | A    HISTORY AND DEVELOPMENT OF THE
      COMPANY                  | 10
|           |                                                                                                    | B    BUSINESS
      OVERVIEW                                       | 12
|           |                                                                                                    | C.   ORGANISATIONAL
      STRUCTURE                                | 23
|           |                                                                                                    | D.   PROPERTY, PLANTS, AND
      EQUIPMENT                         | 24
|           | ITEM 5.      OPERATIONAL
      AND FINANCIAL REVIEW AND PROSPECTS                                  | 24                                                                
|           |                                                                                                    | A.   OPERATING
RESULTS                                             | 24
|           |                                                                                                    | B.   LIQUIDITY AND CAPITAL
      RESOURCES                         | 29
|           |                                                                                                    | C.   RESEARCH AND DEVELOPMENT, PATENTS,
      AND LICENSES, ETC    | 31
|           |                                                                                                    | D.   TREND
      INFORMATION                                       | 31
|           |                                                                                                    | E.   OFF-BALANCE SHEET
      ARRANGEMENTS                          | 31
|           |                                                                                                    | F.   TABULAR DISCLOSURE OF CONTRACTUAL
      OBLIGATIONS           | 32
|           |                                                                                                    | G.   SAFE HARBOR                                                   | 32
|           | ITEM 6.      DIRECTORS,
      SENIOR MANAGEMENT, AND EMPLOYEES                                     | 33                                                                
|           |                                                                                                    | A.   DIRECTORS AND SENIOR
      MANAGEMENT                         | 33
|           |                                                                                                    | B.   COMPENSATION                                                  | 35
|           |                                                                                                    | C.   BOARD
    PRACTICES                                           | 36
|           |                                                                                                    | D.   EMPLOYEES                                                     | 36
|           |                                                                                                    | E.   SHARE
    OWNERSHIP                                           | 36
|           | ITEM 7.      MAJOR
      SHAREHOLDERS AND RELATED PARTY TRANSACTIONS                               | 36                                                                
|           |                                                                                                    | A.   MAJOR
      SHAREHOLDERS                                      | 36
|           |                                                                                                    | B.   RELATED PARTY
      TRANSACTIONS                              | 37
|           |                                                                                                    | C.   INTERESTS OF EXPERTS AND
      COUNSEL                        | 38
|           | ITEM 8.      FINANCIAL
      INFORMATION                                                           | 39                                                                
|           |                                                                                                    | A.   CONSOLIDATED STATEMENTS AND OTHER
      FINANCIAL INFORMATION | 39
|           |                                                                                                    | B.   SIGNIFICANT
      CHANGES                                     | 39
|           | ITEM 9.      THE OFFER AND
      LISTING                                                           | 39                                                                
|           |                                                                                                    | A.   OFFER AND LISTING
      DETAILS                               | 39
|           |                                                                                                    | B.   PLAN OF
      DISTRIBUTION                                    | 39
|           |                                                                                                    | C.   MARKETS                                                       | 39
|           |                                                                                                    | D.   SELLING
      SHAREHOLDERS                                    | 40
|           |                                                                                                    | E.   DILUTION                                                      | 40
|           |                                                                                                    | F.   EXPENSES OF THE
      ISSUE                                   | 40
|           | ITEM 10.    ADDITIONAL
      INFORMATION                                                           | 41                                                                
|           |                                                                                                    | A.   SHARE
CAPITAL                                                 | 41
|           |                                                                                                    | B.   MEMORANDUM AND ARTICLES OF
      ASSOCIATION                  | 41
|           |                                                                                                    | C.   MATERIAL
      CONTRACTS                                      | 41
|           |                                                                                                    | D.   EXCHANGE
      CONTROLS                                       | 41
|           |                                                                                                    | E.   TAXATION                                                      | 42
|           |                                                                                                    | F.   DIVIDENDS AND PAYING
      AGENTS                             | 44
|           |                                                                                                    | G.   STATEMENT BY
      EXPERTS                                    | 44
|           |                                                                                                    | H.   DOCUMENTS ON
      DISPLAY                                    | 44
|           |                                                                                                    | I.    SUBSIDIARY
      INFORMATION                                 | 44
|           | ITEM 11.    QUANTITATIVE AND
      QUALITATIVE DISCLOSURES ABOUT MARKET RISK                       | 45                                                                
|           | ITEM 12.    DESCRIPTION OF
      SECURITIES OTHER THAN EQUITY SECURITIES                           | 46                                                                
|PART II    |                                                                                                    |                                                                    |    |  | 46   
|           | ITEM 13.    DEFAULTS, DIVIDEND
      ARREARAGES, AND DELINQUENCIES                                 | 46                                                                
|           | ITEM 14.    MATERIAL MODIFICATIONS
      TO THE RIGHTS OF SECURITY HOLDERS AND USE OF
    PROCEEDS | 46                                                                
|           | ITEM 15.    CONTROLS AND
      PROCEDURES                                                          | 46                                                                
|           | ITEM 16.   
      [RESERVED]                                                                       | 47                                                                
|           | ITEM 16A.  AUDIT COMMITTEE FINANCIAL
      EXPERT                                                  | 47                                                                
|           | ITEM 16B.  CODE OF
    ETHICS                                                                      | 47                                                                
|           | ITEM 16C.  PRINCIPAL ACCOUNTANT FEES AND
      SERVICES                                            | 47                                                                
|           | ITEM 16D.  EXEMPTIONS FROM LISTING STANDARDS
      FOR AUDIT COMMITTEES                            | 47                                                                
|           | ITEM 16E.  PURCHASES OF EQUITY SECURITIES BY
      THE ISSUER AND AFFILIATED PURCHASERS            | 47                                                                
|PART III   |                                                                                                    |                                                                    |    |  | 48   
|           | ITEM 17.    FINANCIAL
      STATEMENTS                                                             | 48                                                                
|           | ITEM 18.    FINANCIAL
      STATEMENTS                                                             | 48                                                                
|           | ITEM 19.   
      EXHIBITS                                                                         | 48                                                                
|SIGNATURES |                                                                                                    |                                                                    |    |  | 50   



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Unless otherwise indicated, the words ''we,'' ''our'', ''us'' and "the Group"
collectively refer to TDL Infomedia Holdings plc and its subsidiaries. These
subsidiaries include our principal operating subsidiary, Thomson Directories
Limited. ''Thomson group'' refers to TDL Infomedia Limited, the ultimate
U.K.parent company of TDL Infomedia Holdings plc and its subsidiaries.



CURRENCY PRESENTATION

In this annual report, unless otherwise specified or the
context otherwise requires, references to ''pounds sterling,'' ''£'' or ''p''
are to the lawful currency of the United Kingdom. We prepare our financial
statements in pounds sterling.



CAUTIONARY STATEMENT FOR THE PURPOSES OF THE "SAFE HARBOR" PROVISIONS OF THE
UNITED STATES PRIVATE SECURITIES LITIGATION REFORM ACT OF 1995

This Annual Report on Form 20-F contains certain forward
looking statements as defined in section 27A of the Securities Act and in
section 21E of the United States Securities Exchange Act of 1934. These forward
looking statements are accompanied by, and should be read in conjunction with,
an explanation of factors that could cause actual results to differ materially
from those expressed by such forward looking statements. By their nature,
forward looking statements involve risk and uncertainty, and the factors
described in the context of such forward looking statements, and other factors
referred to in this Annual Report on Form 20-F, particularly in Item 3.D "Key
Information - Risk Factors, Item 4. "Information on the Company" and Item 5.
"Operating and Financial Review and Prospects" could cause actual results and
developments to differ materially from those expressed in or implied by such
forward looking statements. TDL Infomedia Holdings plc is claiming the benefits
of the safe harbor provisions referred to above.



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PART 1



ITEM
1          IDENTITY OF DIRECTORS,
SENIOR MANAGEMENT AND ADVISORS

Not applicable.

ITEM
2          OFFER STATISTICS AND
EXPECTED TIMETABLE

Not applicable.

ITEM
3          KEY
INFORMATION

(A)         
SELECTED FINANCIAL DATA

The following historical financial information for the years
ended 31 December 2003, 2002, 2001 and 2000 and for the period from 31 July 1999
to 31 December 1999 has been derived from the audited Consolidated Financial
Statements of TDL Infomedia Holdings plc and its subsidiaries, and the
historical financial information for the period from 1 January 1999 to 30 July
1999 has been derived from the audited Consolidated Financial Statements of TDL
Group Limited and its subsidiaries. This table should be read in conjunction
with the Financial Statements of TDL Infomedia Holdings plc and its subsidiaries
and accompanying notes appearing elsewhere in this annual report.

The Group prepares its Consolidated Financial Statements in
accordance with accounting principles generally accepted in the United Kingdom
('U.K. GAAP'), which differ from generally accepted accounting principles in the
United States ('U.S. GAAP'). A description of the significant differences and
reconciliations of net income and shareholders' equity are set forth in Note 31
of Notes to the Financial Statements.



|                               | TDL Group
      Limited        | TDL Infomedia Holdings
      plc
|------------------------------ | ------------------------------ | --------------------------------
|                               | From1 Jan 1999to 30
      July | From 31July 1999to 31
      Dec 
|                               | 1999                           | 1999                            
|Profit and Loss Data           | £'000                          | £'000                           
|U.K. GAAP:                     |                                |                                 
|Turnover                       | 40,648                         | 49,651                          
|Cost of Sales                  | (17,601)                       | (20,572)                        
|Gross Profit                   | 23,047                         | 29,079                          
|Acquisition Costs              | (3,244)                        | -                               
|Other Operating Costs          | (17,262)                       | (18,517)                        
|Operating Profit               | 2,541                          | 10,562                          
|Share of Loss in Joint Venture | (1,061)                        | (1,102)                         
|Interest Receivable            | 157                            | 236                             
|Interest Payable               | (3,607)                        | (10,789)                        
|(Loss)/Profit Before Tax       | (1,970)                        | (1,093)                         
|Taxation                       | (854)                          | (1,499)                         
|Loss for the financial year    | (2,824)                        | (2,592)                         
|                               |                                |                                 
|Dividends declared per share   | 9p                             | -                               
|                               |                                |                                 
|U.S. GAAP:                     |                                |                                 
|Total Revenues                 | 40,648                         | 49,651                          
|Net Loss (7)                   | (4,898)                        | (1,260)                         



1

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|                                                                  | TDL Group Limited              | TDL Infomedia Holdings plc     
|----------------------------------------------------------------- | ------------------------------ | -------------------------------
|                                                                  | From 1 Jan 1999 to 30
    July | From 31 July 1999 to 31
    Dec
|                                                                  | 1999                           | 1999                           
|                                                                  | £'000                          | £'000                          
|Other Data                                                        |                                |                                
|Return on Base(3)                                                 |                                | 79.4% (7)                      
|Number of Printed Directories Accounts(3)                         |                                | 92,834 (7)                     
|Average Value per Printed Directories  Account (£) (3),
      (4) |                                | £932 (7)                       
|Number of Printed Directories                                     |                                | 167 (7)                        
|U.K. GAAP:                                                        |                                |                                
|Depreciation and Amortisation                                     | 1,025                          | 5,144                          
|Capital Expenditure                                               | 1,137                          | 591                            
|Operating Cash Flow                                               | 9,029                          | 10,565                         
|EBITDA(1)                                                         | 2,505                          | 14,604                         
|Ratio of Earnings to Fixed Charges (2)                            |                                | 1.0x                           
|                                                                  |                                |                                
|U.S. GAAP:                                                        |                                |                                
|Depreciation and Amortisation                                     | 2,953                          | 3,393                          
|Capital Expenditure                                               | 1,137                          | 591                            
|Operating Cash Flow                                               | 6,627                          | 5,862                          
|EBITDA(1)                                                         | 2,202                          | 14,294                         
|Ratio of Earnings to Fixed Charges (2), (7)                       |                                | 1.1x                           

|Balance Sheet Data
      (At End of Period) |  |          |          |          |          |         
|------------------------------------------- |  | -------- | -------- | -------- | -------- | --------
|U.K. GAAP:                                  |  |          |          |          |          |         
|Fixed Assets(5)                             |  | 206,503  | 191,252  | 190,857  | 176,120  | 160,824 
|Total Assets                                |  | 257,344  | 238,065  | 222,681  | 208,361  | 204,016 
|Net Current Assets/ (Liabilities)           |  | 16,203   | (32,558) | (36,651) | (20,000) | (4,831) 
|Total Assets lessCurrent Liabilities        |  | 222,706  | 158,694  | 154,206  | 156,120  | 155,993 
|Total Debt                                  |  | 147,828  | 151,738  | 144,042  | 144,924  | 139,126 
|Net Debt                                    |  | 136,303  | 143,505  | 142,365  | 143,428  | 131,540 
|Net Assets                                  |  | 77,120   | 60,485   | 50,237   | 38,445   | 35,213  
|Share capital                               |  | 397      | 397      | 397      | 397      | 397     
|Shareholders' Equity                        |  | 77,120   | 60,485   | 50,237   | 38,445   | 35,213  
|Number of shares ('000)                     |  | 39,712   | 39,712   | 39,712   | 39,712   | 39,712  
|                                            |  |          |          |          |          |         
|U.S. GAAP:                                  |  |          |          |          |          |         
|Fixed Assets (5)                            |  | 118,237  | 99,206   | 104,695  | 103,390  | 102,218 
|Total Assets (7)                            |  | 176,022  | 148,114  | 133,702  | 122,439  | 128,108 
|Net Current Assets/(Liabilities) (7)        |  | 23,147   | (30,463) | (39,468) | (33,535) | (22,467)
|Total Assets lessCurrent Liabilities (7)    |  | 141,384  | 68,743   | 65,227   | 69,855   | 79,751  
|Total Debt                                  |  | 151,464  | 154,799  | 146,161  | 145,234  | 137,945 
|Net Debt                                    |  | 139,939  | 146,566  | 144,484  | 143,738  | 130,359 
|Net Liabilities (7)                         |  | (19,360) | (34,205) | (42,792) | (49,964) | (42,252)
|Shareholders' Equity (7)                    |  | (19,360) | (34,205) | (42,792) | (49,964) | (42,252)

> 2

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> 

|(1) | Earnings before interest,
      taxation, depreciation and amortisation ("EBITDA") is reconciled to loss
      for the financial year in the table below. We consider EBITDA to be an
      important indicator of the operational strength of the Group. This measure
      eliminates the effects of interest, taxation depreciation and amortisation
      from period to period, which we believe is useful to management and
      investors in evaluating the operating performance of the Group as such
      costs are not directly attributable to the underlying performance of the
      Group's operations.
|--- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

> 

|                            | TDL Group Limited                   | TDL Infomedia Holdings plc     
|--------------------------- | ----------------------------------- | -------------------------------
|                            | From 1 Jan 1999 to 30
    July      | From 31 July 1999 to 31
    Dec
|                            | 1999                                | 1999                           
|Profit and Loss Data        | £'000                               | £'000                          
|U.K. GAAP:                  |                                     |                                
|Loss for the financial year | (2,824)                             | (2,592)                        
|Add:                        | Taxation                            | 854                            
|                            | Interest
Payable                    | 3,607                          
|                            | Depreciation and
      Amortisation | 1,025                          
|Less: Interest Receivable   | (157)                               | (236)                          
|                            |                                     |                                
|EBITDA                      | 2,505                               | 14,604                         
|                            |                                     |                                
|U.S. GAAP:                  |                                     |                                
|Loss for the financial year | (4,898)                             | (1,260)                        
|Add:                        | Taxation                            | 697                            
|                            | Interest
Payable                    | 3,607                          
|                            | Depreciation and
      Amortisation | 2,953                          
|Less: Interest Receivable   | (157)                               | (236)                          
|                            |                                     |                                
|EBITDA                      | 2,202                               | 14,294                         
|                            |                                     |                                



|(2) | For the purposes of computing the
      ratios of earnings to fixed charges, earnings represent profit or loss
      before tax plus fixed charges and our share of the loss in the joint
      venture. Fixed charges represent total interest payable and an amount
      representative of the interest component of rental expense. Under U.K.
      GAAP, our earnings were inadequate to cover fixed charges by £0.8 million,
      £12.7 million, £7.4 million and £10.5 million during the period from 1
      January 1999 to 30 July 1999 and the years ended 31 December 2000, 2001
      and 2002 respectively. Under U.S. GAAP, our earnings were inadequate to
      cover fixed charges by £3.1 million in the period from 1 January 1999 to
      30 July 1999 and by £12.8 million, £22.1 million, £13.5 million and £3.6
      million in the years ended 31 December 2000, 2001, 2002 and 2003
      respectively.
|--- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|(3) | Return on base represents the
      current year revenues generated from our previous year's customers as a
      percentage of the total revenues generated in the previous
      year.We
      calculate return on base, number of printed directories accounts and
      average value per printed directories account only on a calendar-year
      basis, not for interim periods. These measures are operating performance
      measurements used by management. They are not financial measures in
      accordance with UK or US GAAP.                                                                                                                                                                                                                                                                                                                                                                                      
|(4) | Calculated by dividing printed
      directories revenues by the total number of printed directories accounts
      sold during the year. Average value per printed directories account is an
      operating performance measurement used by management. It is not a
      financial measure in accordance with either UK or US
GAAP.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               
|(5) | Fixed assets consist of tangible
      assets, goodwill, intangible assets and fixed asset investments (including
      interests in joint ventures).                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
|(6) | Represents data for the full year
      from 1 January to 31 December 1999.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
|(7) | The U.S. GAAP data for the year
      ended 31 December 2000 reflects the cumulative effect of the Group's
      adoption of SAB 101 related to deferred costs. See Note 30 of Notes to the
      Financial Statements for more information.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         

> 3

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> 

Exchange Rates

The following table sets forth, for the periods and dates
indicated, information regarding the noon buying rate in the City of New York
for cable transfers in pounds sterling as announced by the Federal Reserve Bank
of New York for customs purposes, expressed in U.S. dollars per
£1.00.

|                       | AtPeriod End | Average (1) | High   | Low   
|---------------------- | ------------ | ----------- | ------ | ------
|Year ended 31 December |              |             |        |       
|1999                   | 1.6150       | 1.6146      | 1.6765 | 1.5515
|2000                   | 1.4955       | 1.5125      | 1.6182 | 1.4210
|2001                   | 1.4543       | 1.4382      | 1.5040 | 1.3730
|2002                   | 1.6095       | 1.5084      | 1.6095 | 1.4074
|2003                   | 1.7842       | 1.6450      | 1.7842 | 1.5500

(1) The average of the noon buying rates on the last day of each month during
the year.

The following table sets forth, for the months indicated,
information regarding the high and low noon buying rate expressed in U.S.
dollars per £1.00:

|               | High   | Low   
|-------------- | ------ | ------
|September 2003 | 1.6642 | 1.5732
|October 2003   | 1.7025 | 1.6598
|November 2003  | 1.7219 | 1.6693
|December 2003  | 1.7842 | 1.7200
|January 2004   | 1.8511 | 1.7842
|February 2004  | 1.9045 | 1.8182



The noon buying rate on 19 March 2004, the latest practicable
date prior to the date of this report, was 1.8270.



4

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(B)         
CAPITALISATION AND INDEBTEDNESS

Not applicable.



(C)         
REASONS FOR THE OFFER AND USE OF PROCEEDS

Not applicable.



(D)         
RISK FACTORS



Our revenue growth may be constrained by our regulatory
environment

During 2001, the Office of Fair Trading, the government agency
responsible for the enforcement of competition policy in the United Kingdom
revised the undertakings given by Yell Group Limited (previously BT Yellow
Pages) which regulate the prices Yell Group Limited can charge for classified
advertisements in the United Kingdom. The revised undertakings limit any annual
price increase to the rate of inflation (as measured by the retail price index)
less 6%, effective for all directories published from 1 January 2002. These
revised undertakings are expected to remain in effect for a period of four
years. Although we were not required to give any similar undertakings, the cap
imposed on Yell Group Limited has the indirect effect of constraining our
ability to increase our advertising rates. To date, the impact to our business
caused by the revised undertakings has not been significant. Yell Group Limited
is also prohibited from publishing more than one consumer classified directory
in any particular geographic area, except in areas where no other classified
directories are published.



Our business could be adversely affected by turnover of our
field account and tele-sales representatives

Our success depends to a significant extent on our ability to
identify, hire, train and retain qualified sales personnel. In 2001, 2002 and
2003 we experienced turnover in our sales force of approximately 48.2%, 37.6%
and 34.2% respectively. Turnover is highest among new hires, with over 50% of
new hires having left within one year of their employment in 2001. In 2002,
fewer new hires left during their first year of employment (40%) hence the
reduction in overall sales staff turnover for the year. Sales staff turnover has
decreased further in 2003 following the introduction of various staff retention
schemes and the greater emphasis placed on career paths and personal development
planning. Our ability to attract and retain qualified sales personnel depends on
numerous factors, including factors out of our control, such as conditions in
the local employment markets in which we operate. Although our business plan
calls for a continued increase in the number of sales representatives, we may
not be able to hire or retain a sufficient number of sales representatives to
achieve our financial objectives.



Fluctuations in the price of paper could adversely affect our
business

Paper is our most important raw material. In the past, paper
costs have fluctuated significantly. For example, since 1994, paper prices have
fluctuated between £376 and £622 per tonne. Paper costs represented 5.9% of our
turnover in 2001, 5.5% in 2002 and 5.7% in 2003. We estimate that a 10% change
in current paper prices would have a £0.6 million annual impact on our EBITDA.
During 2002 and 2003 we entered into paper contracts with three suppliers that
expire in 2005 and 2006. Under these contracts paper prices are fixed for the
term of the contracts unless there is a variation in market prices of +/-8%. Any
increase in paper costs under these circumstances, or after expiry of these
contracts, would have an adverse effect on our business, financial condition or
results of operations.



5

---



We are dependent on local economies and have a high
concentration of customers in the South East regions of the United
Kingdom

We derive most of our revenues from the sale of advertising in
our printed directories in the United Kingdom. Our advertising revenues are
dependent on a variety of factors specific to the geographic regions that our
directories serve. Local economic conditions, as well as the economic conditions
of specific retail, wholesale and service segments, will impact local
businesses' expenditure on classified directories advertising. Our advertising
sales are particularly concentrated in the South East regions of the United
Kingdom, including the London metropolitan area. If there was an economic
downturn in the South East regions of the United Kingdom or the other local
economies of the communities we serve, our financial condition or results of
operations could be adversely affected.



Our business may be adversely affected by our reliance on, and
our extension of credit to, small businesses

The majority of our turnover is derived from selling
advertising to small to medium-sized businesses. In the ordinary course of our
business, we extend credit to these customers for advertising purchases. Small
businesses, however, tend to have fewer financial resources and higher financial
failure rates than larger businesses. We believe these limitations are a
significant contributing factor to having approximately one-third of our
customers in any given year not renew their advertising in the following year.
In addition, full collection of delinquent accounts can take an extended period
of time. Consequently, we could be adversely affected by our dependence on and
our extension of credit to small businesses.



Changing technology in our industry makes our future
uncertain

The classified directories advertising business is subject to
changes arising from developments in technology, including information
distribution methods and users' technological preferences. Our growth and future
financial performance will depend upon our ability to develop and market new
products and services and create new distribution channels to accommodate the
latest technological advances and user preferences and leverage and fully
utilise technology successfully to improve the operations of our business. The
increasing use of the Internet by consumers as a means to transact commerce may
result in new technologies being developed and services provided that could
compete with our products and services. We also believe that our online
directory may compete with our printed directories for advertising sales and
consumer usage, which may result in revenues from our printed directories being
replaced over time, in whole, or in part, by our Internet revenues.

Although revenues from Internet advertising represented only
4.6% of our turnover in 2003, in the future we may derive a substantial amount
of our revenues from Internet advertising. However, the demand and market
acceptance for Internet advertising is uncertain. There are currently no
commonly accepted standards for the measurement of the effectiveness of Internet
advertising, and the industry may need to develop standard measurements to
support and promote Internet advertising as a significant advertising medium. If
these standards do not develop, existing advertisers may not continue their
levels of Internet advertising. Furthermore, advertisers that have traditionally
relied upon other advertising media may be reluctant to advertise on the
Internet. Our business could be adversely affected if the market for Internet
advertising fails to develop or develops more slowly than expected. Different
pricing models are used to sell advertising on the Internet. It is difficult to
predict which, if any, will emerge as the industry standard. This makes it
difficult to project our future advertising rates and revenues.



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We are in a competitive business

We compete in the classified directories advertising market in
the United Kingdom, which currently has one dominant market participant, Yell
Group Limited (formerly BT Yellow Pages). In August 2002, BT Group plc acquired
the assets of Scoot.com and announced its intention to re-enter the print
classified directories market. To date, the impact of BT's re-entry into the
print classified directories market on our business has not been significant. We
also compete, to a lesser extent, with numerous printed information guides,
Internet listing services, other publishers, other forms of advertising and
providers of business information. Given that most of our customers advertise
with us pursuant to one-year contracts, a substantial portion of them could move
their advertising to competing classified directories, or to other forms of
advertising entirely, quickly and at a low cost, thereby increasing our exposure
to competitive pressures and consequent fluctuations in revenues and operating
results.

We are also subject to intense competition with respect to our
Internet business. We cannot predict whether we will adequately compete with
existing competitors, such as Yell Group Limited which operates www.yell.co.uk,
or with other new entrants into the online directories market. If we fail to
anticipate or respond adequately to changes in technology and user preferences,
or are unable to finance the necessary capital expenditures, our business,
operating results or financial condition could be materially adversely
affected.

Our current principal competitor Yell Group Limited has, and
potential competitors such as BT Group plc may have, access to substantially
greater financial and operational resources than we do. Particular challenges
that we could face from these competitors include increased competition for
sales staff, substantial increases in their advertising budgets, substantial
discounting of their advertising rates and their development of a database or an
Internet service that provides the same or better benefits than our current
products and services.

Our ability to compete successfully for both users and
advertisers depends on elements both within and outside of our control,
including user demand for our services, successful and timely development of new
products, our ability to deliver appropriate levels of service to users and
advertisers, pricing, industry trends and general economic trends.



Key personnel - our success depends on certain key senior
executives

Our performance depends in large part upon the abilities and
continued service of our senior management personnel. The loss of the services
of any of our senior management could seriously affect our business prospects.
If one or more key employees joins a competitor or forms a competing company,
the resulting competition could have a material adverse effect on our business,
financial condition or results of operations. In the event of the loss of any
such employee, we may not be able to prevent the unauthorized disclosure or use
of our procedures, practices, new product developments or client lists.
Moreover, our future success depends on our continuing ability to identify,
hire, train and retain such personnel in the future. If we are unable to attract
and retain necessary sales, marketing, technical and managerial personnel, it
could have a material adverse effect on our business, financial condition or
results of operations.



7

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Risk of adverse effects of government regulation

We are subject to governmental regulation by the United Kingdom
and the European Union and may in the future be subject to regulation in
countries in which we may provide services. In addition, decisions by
regulators, including the Office of Fair Trading, could adversely affect our
financial condition and results of operations. The adoption of new laws,
policies or regulations that change the present regulatory environment could
adversely affect our existing services or restrict the growth of our business in
the United Kingdom, the European Union or any other countries.

The European Commission has approved a new data protection
directive regarding the processing of personal data and the protection of
privacy in the electronic communications section. See Item 4(B) "Business
Overview - Regulatory Environment". Compliance with this new directive may
entail additional expense to our business.



We rely on BT Group plc for the supply of business listings
data

Our principal source for business listings data is BT Group
plc, which currently provides such data pursuant to a non-exclusive licence
agreement for an annual fee of £0.6 million.

BT has served us with notice of termination under our current
licence agreement (and has done the same to other licensees of the core
database) with a view to putting a new standard licence in place. The
termination notice originally terminated the licence on 31 December 2003, but
three extensions were made resulting in the expiry date currently being 31 May
2004. Negotiations on the licence terms are continuing. The cost of data
acquisition may be substantially higher under a new licence agreement.



Our financial results are subject to quarterly
fluctuation

Our turnover and operating results exhibit a significant degree
of variability from quarter to quarter and between periods. Although we process
sales at a fairly constant rate, we do not recognise turnover with respect to
processed sales for any given directory or the costs directly related to sales,
production, printing and distribution of that directory until the month in which
it is distributed. Individual directories are not always published at the same
time each year, which can result in significant shifts in quarterly turnover and
EBITDA. Many of our largest revenue generating directories are published between
October and December. If publication of any directories were delayed into the
following year, for example because of printing delays, recognition of related
turnover and EBITDA would also be delayed. EBITDA and other financial indicators
generally relied on by investors to evaluate a company's ability to incur and
service its debt may not, in our case, reflect actual cash received during a
given period.



We rely on our intellectual property rights

We rely on our intellectual property, principally our business
database and related licence rights and our right to use the Thomson name. If we
fail to adequately protect our intellectual property rights, our business could
be harmed. In addition, although we believe that our business does not infringe
the intellectual property rights of others and that we have all the rights
needed to use the intellectual property employed in our business, it is possible
that we could become subject to claims alleging infringement of third-party
intellectual property rights. Any claims could subject us to litigation and
could require us to pay damages or incur expenses to develop non-infringing
intellectual property.



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System failure could hurt our business

Loss of all or part of our information systems for a period of
time could have a material adverse effect on our business. Our operations are
dependent on our ability to protect our system from interruption caused by
damage from fire, power loss, telecommunications failure, unauthorised entry or
other events beyond our control, such as regional disasters. Our back-up site is
equipped with some of the hardware, software and communications equipment
necessary to recover from a disaster impacting our Farnborough office in a
reasonable amount of time. The recovery procedure involves the use of third
party suppliers. Our back-up site is located approximately three miles from our
headquarters, where some of our computer systems, including processing
equipment, are currently operated and maintained. In the event of major
disasters, both locations could be equally affected.



Foreign exchange rate fluctuations may adversely affect our
financial condition and results of operations

As our reporting currency is pounds sterling any movement in
foreign currency exchange rates in relation to pounds sterling, particularly
movements in the dollar/sterling exchange rate, given our dollar-denominated
notes, could have an impact on our financial condition and results of
operations. In order to minimise this risk the directors have decided to part
hedge the exposure on the dollar-denominated notes and will continue to monitor
fluctuations in exchange rates. However, we cannot assure you that exchange rate
fluctuations will not adversely affect our financial condition and results of
operations.



Our exposure to defamation and privacy claims could have a
material effect on our operating results or our financial condition

We are exposed to defamation and breach of privacy claims
relating to our directories business as well as methods of collection,
processing and use of personal data. The subjects of our data and users of data
collected and processed by us could also have claims against us if our data were
found to be inaccurate, or if personal data stored by us was improperly accessed
and disseminated by unauthorised persons. Although we have not had any material
claims relating to defamation or breach of privacy claims to-date, we may be
party to litigation matters that could have a material adverse effect on our
business, financial condition or results of operations or otherwise distract our
management.



Our ability to refinance our existing debt depends on certain
factors beyond our control

The future success of our operations will in large part dictate
our ability to refinance our existing debt, some of which is repayable on the
earlier of 23 July 2004 or a change of control. Our future operating results
will be affected by general economic, competitive, marketing and other
conditions, many of which are beyond our control. Any failure to refinance our
indebtedness would result in a default in the debt facilities and a default
under the notes. Our parent has not guaranteed our obligations under the notes
nor has it any obligation to provide additional equity financing to us. We
cannot assure you that we will be able to refinance our debt, obtain additional
financing or sell assets on commercially reasonable terms or at all.



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ITEM
4          INFORMATION ON THE
COMPANY

(A)         
HISTORY AND DEVELOPMENT OF THE COMPANY



Corporate

TDL Infomedia Holdings plc, or the Company, was incorporated on
23 June 1999 under the laws of England and Wales as a public limited company
with registered number 3794458. The address of TDL Infomedia Holdings plc's
registered office is Thomson House, 296 Farnborough Road, Farnborough, Hampshire
GU14 7NU, England, telephone number +44 (0) 1252 516111.



Group Structure

TDL Infomedia Limited and the three Infomedia subsidiaries were
formed for the purpose of financing the £149.7 million acquisition of TDL Group
Limited and its subsidiaries and the £70.3 million repayment of TDL Group
Limited's borrowings and fee obligations on 30 July 1999 (the "1999
Acquisition"). The 1999 Acquisition was funded through investments of £80
million by Apax, Advent, 3i and participating management and employees (where
"management" refers to the direct and indirect ownership by officers, directors
and members of their immediate families) together with the debt financing
described below.

The aggregate proceeds from the debt financing of £150.0
million comprised (1) borrowings by TDL Infomedia Group plc of £55.0 million
under a £65.0 million senior credit facility which was subsequently refinanced
on 29 December 2000 (as described in Item 5(B) "Liquidity and Capital
Resources"), (2) borrowings by TDL Infomedia Group plc of £70.0 million under a
senior subordinated financing facility which has been refinanced by the issue of
£70,000,000 12 1/8% Senior Subordinated Notes due 2009 and (3) borrowings by TDL
Infomedia Holdings plc of £25.0 million under a senior discount financing
facility which has been refinanced by the issue of US $87,360,000 151⁄2% Senior
Discount Notes due 2010 at a price of 47.366%.

On 1 August 2000 SEAT Pagine Gialle SpA acquired 99.6% of the
issued share capital of TDL Infomedia Limited, the ultimate U.K. parent company
of the Group, for an equity value of £308 million and the assumption of
approximately £150 million of debt. Since then SEAT Pagine Gialle SpA have
acquired a further 0.24% of the issued share capital of TDL Infomedia Limited.
Participating management and members of their immediate family hold the
remaining 0.16% of the issued share capital of TDL Infomedia Limited.



History

In 1965, The Thomson Corporation of Canada, under contract with
the British General Post Office, introduced the United Kingdom's first
classified telephone directory, which was later named the Yellow Pages.

In 1980, the contract between The Thomson Corporation of Canada
and the British General Post Office expired and the rights to publish Yellow
Pages in the United Kingdom were awarded to British Telecom. The Thomson
Corporation of Canada decided to produce its own directories in competition with
the Yellow Pages and created Thomson Directories Limited, a partnership between
the Dun & Bradstreet Corporation and The Thomson Corporation of Canada. In
1981, it commenced the national roll-out of the Thomson Locals.

In 1994, Thomson Directories Limited was sold to U S WEST, a
regional telecommunications company in the United States (now known as Qwest
Communications International Inc). U S WEST also entered into a licence
agreement to continue using the ''Thomson'' name and related trademarks for its
directories business. In 1994, Thomson Directories Limited began developing its
Business Information services derived from its proprietary database.

In June 1997, U S WEST sold Thomson Directories Limited to TDL
Group Limited, a company formed by 3i plc, non-institutional investors and
several members of Thomson Directories Limited's senior management team. Shortly
thereafter, Advent International Corporation purchased a portion of 3i plc's
interests. Thomson Directories Limited agreed the right to use the ''Thomson''
name and trademarks until 2027 for a nominal annual fee.



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In July 1998, Thomson Directories Limited
entered into a joint venture, TDL InfoSpace (Europe) Limited, with Infospace.com
Inc., an Internet company based in the United States. Thomson Directories
Limited sold its interest in TDL InfoSpace (Europe) Limited to a company owned
by its principal shareholders in January 1999. We maintain a supplier and sales
relationship with TDL InfoSpace (Europe) Limited. See Item 7(B) "Related Party
Transactions".

In February 1999, Thomson Directories Limited expanded
internationally by investing in a directories joint venture in Belgium with the
intention to replicate its paper directories and Internet Services business
model abroad. On 30 March 2001 Thomson Directories Limited sold its investment
in, and loans to, TDL Belgium SA to a newly formed company, TDL Investments BV,
a wholly owned subsidiary of TDL Infomedia Limited. The investment and loans
were sold for £4.1 million, the net asset value reflected in the Group's
accounts on the date of sale.

The 1999 Acquisition (described above) was completed in July
1999.

On 1 August 2000, 99.6% of the issued share capital of TDL
Infomedia Limited, the ultimate parent company of TDL Infomedia Holdings plc,
was acquired by SEAT Pagine Gialle SpA, as described above.



Business Description

The Group is the second largest publisher of printed classified
directories in the United Kingdom, publishing 174 directories in 2003 (173
Thomson Local directories and 1 WebFinder directory) that together cover
approximately 85% of the U.K. population. In 2003, 101,061 businesses purchased
classified advertising in our directories, and we distributed approximately 22
million of these directories to homes and businesses free of charge. Our
advertising customer base is highly diverse and consists primarily of small and
medium-sized businesses operating in well-defined local areas as well as large
national advertisers.

In the U.K. classified directories market, we have been the
market innovator for introducing new product modifications, having, for example,
developed directional tabs, local community guides and premium advertising
opportunities such as White Knock-out and colour advertisements. We believe
these product innovations have made our directories easier to use for consumers
and increased their value to our customers. While printed directories are our
primary business, we have executed a strategy of leveraging our strategic
assets, which include our enhanced proprietary information database of more than
2.2 million business listings, nationwide sales force, established customer base
and ''Thomson Directories'' brand, selectively across two high margin business
areas of Internet Services and Business Information, which together represented
£12.2 million or approximately 11.2% of recognised revenues (before discounts)
in 2003.

We organise our products and services into three business
areas: Paper Directories, Internet Services and Business Information which are
further described below.



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(B)         
BUSINESS OVERVIEW



Classified Directories Market

The classified directories market consists of both regional and
local directories. Regional publications generally cover a relatively large
geographic or metropolitan region, while local directories cover smaller
geographic regions or sections of a metropolitan area. The two largest
classified directory publishers in the United Kingdom are Yell Group Limited
(formerly BT Yellow Pages) and ourselves. During the 2003 financial year Yell
Group Limited published 88 regional directories (and six "Business Pages"
directories) throughout the United Kingdom and we published 173 local
directories. Yell Group Limited's U.K. printed directories revenues totalled
£573.7 million during the 12 months ended 31 March 2003, compared to our printed
directories revenues of £96.2 million for the year ended 31 December 2003.

The U.K. classified directories market has been subject to
reviews by the Office of Fair Trading, the government agency responsible for
enforcing competition policy under the Fair Trading Act 1973, in 1995 and, more
recently, in 2001 (as described in Item 4(B) "Business Overview - Regulatory
Environment"). Following its most recent review, on 11 May 2001 the Office of
Fair Trading announced that the price cap limiting annual price increases in
advertising rates by Yell Group Limited should be tightened from RPI (as
measured by the retail price index) minus 2% to RPI minus 6% for directories
published from January 2002. Although we were not required to give any similar
undertakings, the cap imposed on Yell Group Limited has the indirect effect of
constraining our ability to increase our advertising rates. (See Item 3(D) "Risk
Factors").

In August 2002, BT Group plc acquired the assets of Scoot.com
and announced its intention to re-enter the print classified directories market.
To date, the impact of BT's re-entry into the print classified directories
market has not had a significant impact on our business.



Paper Directories

General

Thomson Local is a printed classified business directory, in
which business listings are arranged by business type. It is our core product
and accounted for almost 90% of recognised revenues in 2003. Our directories are
distributed throughout England, Scotland and Wales. We design our directories to
meet the informational needs of consumers and the advertising needs of our
customers. Our directories consist of several sections including local
information and entertainment guides, an A-Z business phone book listings
section detailing all businesses alphabetically in the area and a classified
section. The local information section includes full colour plans of principal
towns, a local area road map and community and entertainment information. We
believe that this information increases consumer usage of our directories. In
the A-Z business phone book listings section, we list all businesses within the
related geographical region free of charge.



The majority of the advertising sold in our directories appears
in the classified section. However, we also sell advertising on the front and
back covers, the tabbed dividers and the local and entertainment guides.



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Proprietary Database

All business areas rely upon the repackaging and distribution
of U.K. business-related content from our database. The base input to our
directories is business listings data from our database. We receive new business
listings data from BT Group plc (formerly British Telecom) on a daily basis and
we verify and enhance this data before entering it into our database. We enhance
the value of this information by classifying each business entry and adding
relevant information such as the length of time a business has been at a
particular location, the number of employees, the name of the senior decision
maker, its fax numbers and the type of location. Our database also contains
''Thomson-only'' data, which has not been provided by BT and which we
independently collect principally from requests for free listings and telephone
numbers. By enhancing the business listings data in this way we create our own
proprietary database in which we own intellectual property rights. Our sales
teams use the information in our database to focus their sales efforts and our
Business Information team uses our database for resale purposes.



Product Development

We continually seek to introduce new products and features in
order to create incentives for our customers to renew their prior year's
advertising subscription and increase their expenditure on our products. We
typically roll out these product innovations over two to three years to the
majority of our directories. In 1998 we rolled out White Knock-out, a feature
which allows a customer's advertisement to stand out from its competitors by
printing the advertisement against a white backdrop. In 1999 we launched yellow
highlighted advertisements and double column unit advertisements as compared to
standard single column advertisements. In 2000 we launched colour advertisements
in the classified section of 39 directories. The roll-out of such colour
advertisements was extended across seven more directories in 2002 and a further
11 directories in 2003. We intend to roll-out it out across a further 102
directories in 2004.

In December 2002 and 2003 also we published a directory of web
addresses, WebFinder, for distribution throughout Central London.



New Directories

We already cover most of the areas of England, Scotland and
Wales that can be cost effectively served by local classified directories.
Consequently, our pace for introducing new directories has slowed through the
1990's as our coverage has expanded to approximately 85% of the U.K. population.
Nevertheless, we believe there are select opportunities to introduce additional
new directories. We are currently reviewing options for introducing additional
directories.



Printed Directories Publishing Cycle

We publish our directories on a 12-month cycle. Although
publishing dates may be moved back and forward by a few weeks within the year,
we aim to publish each directory once per calendar year. In order to meet the
calendar year publishing cycle nearly all selling activity for the directories
takes place before the end of October. This allows eight to ten weeks for
photocomposition, printing and distribution. We consider directories to be
''published'' when we have commenced distribution. The sales cycle of a
particular directory varies based on the size of the revenue base and potential
customer base and can range from a few weeks to as long as six months.



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Photocomposition Process

Photocomposition is the process of converting all directories
material into a digital format that is used by the printers. Prior to 1998, we
outsourced the photocomposition process to a third party. In mid 1998, we
brought the photocomposition process in-house, which eliminated the need for
third-party photocomposition processing by investing in new publishing hardware
and software and retraining existing personnel, and improved advertisement
design and production turnaround for our customers. Bringing the
photocomposition process in-house cost approximately £1.5 million, of which £0.6
million related to hardware, which was capitalised, and an estimated £0.9
million to software, information technology support and retraining programs,
which was expensed in 1998. Bringing the photocomposition function in-house has
given us added flexibility to improve the lay-outs of our directories, which has
also reduced our paper requirements and our publishing cycle and allowed the
publishing of our customers' advertisements on the Internet.



Paper and Printing

Prior to the expiry of the contracts on 31 December 2001, we
outsourced our printing and paper requirements to two printers located in Spain
and Sweden. On 1 January 2002 we entered into two new print contracts with
printers located in Sweden and Italy, both of which commenced in January 2002
and expire in December 2004. We have also entered into separate paper contracts
with three suppliers based in Sweden and Finland which expire in 2005 and 2006.
Although we rely on two printers, a single printer could provide all of our
printing, and we believe that there are alternative suppliers that could meet
our needs. Similarly, we believe that there are alternative paper suppliers that
could satisfy our paper requirements. New product innovations typically increase
our printing and paper costs. For example, introducing White Knock-out in 1998
and full colour in selected directories in 2000 required more expensive printing
processes. In the future we expect to incur additional printing and paper costs
with new product innovations.



Distribution

Each year, we distribute approximately 22 million directories
free of charge throughout England, Scotland and Wales. We outsource our
distribution requirements to two companies: one for East Anglia and the Home
Counties area in and surrounding London, and another for Scotland, the North
East, the Midlands and the West. Although we rely on only two distribution
companies, we believe either company could service all of our distribution needs
and we believe there are additional distributors that could cover our
distribution requirements.



Sales

Printed and online directories advertising is a direct sales
business, which requires both servicing existing accounts and developing new
customers. Our core account base consists primarily of repeat customers and many
of these customers have advertised in our directories for several years. For
2001, 2002 and 2003, 64.3%, 67.3% and 68.7% respectively of our print directory
customers advertised again in the following year, generating a return on base
(as defined on page 3) of 81.6%, 85.3% and 86.5% respectively. We believe that
this return on base reflects the importance of our directories to our local
customers, for whom classified directories advertising is an important medium of
advertising due to its comparatively low cost, widespread distribution, lasting
presence, focus on local geographic areas and high consumer usage. In addition,
printed classified directories advertising is often an integral part of the
local advertising strategy for larger national companies.

As at 30 December 2003, our printed and online directories
sales force consisted of 470 employees (representing 50.5% of the total work
force).



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We have well-established practices and
procedures to manage the productivity and effectiveness of our sales force. All
new Field Account and Tele-Sales Representatives complete a formal two and one
half-week training program and receive continuous on-the-job training through
the regional sales management structure and periodic formal training. Each Field
Account and Tele-Sales Representative has a specified account assignment
consisting of both new business leads and renewal accounts and is accountable
for daily, weekly and monthly sales results. Our sales force receives sales
data, which include details of our new product initiatives, local market data,
planned distribution numbers for each directory and credit details on our prior
year's customers.

Field Account and Tele-Sales Representatives are compensated in
the form of base salary, commissions and car allowance. Approximately one third
of total Field Account and Tele-Sales Representative compensation is in the form
of commissions tied to sales performance and account growth. We use a number of
commission and bonus schemes with varying terms depending on the role and grade
of the employee. Bonus schemes are based on key business drivers such as: return
on base, account growth, new business and development of staff and revenues. Our
senior sales managers' bonuses are also linked to our overall profitability.



Marketing and Brand Management

Our marketing team is responsible for strategy, product
development for our printed directories, pricing, market research, advertising,
promotion and sales support materials. It is also responsible for overall
branding strategy and public relations.



Internet Services

Our proprietary database, experienced sales professionals,
established customer base and our ''Thomson Directories'' brand has enabled us
to widely introduce and cross-sell online classified advertisements since late
1998. We retain printed advertisements in a digital format, which facilitates
producing Internet ready versions of our customers' advertisements.

In April 2002, we launched our new proprietary Internet site,
ThomsonLocal.com. This local information portal features an enhanced business
finder, useful local area information, a "search nearby" facility and a web
search facility for UK businesses. ThomsonLocal.com has been well received by
users and advertisers and it has been launched on major partner sites, such as
Freeserve and Ask Jeeves.

Since 1998, we have also had a website services agreement with
a supplier, TDL InfoSpace (Europe) Limited whereby it hosts our other online
directory, Thomweb.co.uk.

TDL InfoSpace (Europe) Limited integrates this online directory
with other content such as local weather forecasts, news and horoscopes in
creating its content packages. As well as being distributed on our own
Thomweb.co.uk Internet site, these packages are co-branded with the ''co-brand''
partners and distributed on various other websites (the "InfoSpace
Network").

Prior to September 2000, we acted under an exclusive sales
agency agreement with TDL InfoSpace (Europe) Limited to sell enhanced classified
business listings on their behalf to our customers in the United Kingdom. We
retained a sales commission for this activity and paid an annual fee to TDL
InfoSpace (Europe) Limited for their services. Under the terms of our new
website service agreement with TDL InfoSpace (Europe) Limited dated 1 September
2000, we retain all advertising revenues and pay a fee to TDL InfoSpace (Europe)
Limited for their services. As a result of this change in the nature of the
sales arrangement with TDL InfoSpace (Europe) Limited, we now recognise Internet
advertising revenues and fees paid to TDL InfoSpace (Europe) Limited evenly over
the twelve month period of the advertising contract.

We will continue to innovate and develop new Internet products
for our users and advertisers and intend to continue working with InfoSpace and
other distribution partners in order to drive traffic to our advertisers.



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Our Internet advertising packages on Thomweb.co.uk and
ThomsonLocal.com incorporate variations on the following features:

-
    an online
      business listing with a higher position page in an ''enhanced listing''
      section and an adjacent ''Info Button'' where the advertiser's details are
      presented and hyper-text linked to the advertiser's website;-
    an online
      version of the customer's printed advertisement; and-
    guaranteed
      placement in the ''preferred listings'' section, which is currently
      limited to the first five listings of a customer's business category and a
      ''branded'' sponsorship button, which the user may click to go to the
      advertiser's website.


We sell these Internet packages on a geographical area basis
that corresponds to the scoping of our printed directories. Similar to our
printed directories, customers can purchase multiple advertisements to appear
when a user searches in a number of different geographical areas of the Internet
directory. We update Thomweb.co.uk and ThomsonLocal.com with new advertisements
each month.

In January 2003 we launched WebFinder.com, a pay-per-click
search engine marketing tool, enabling us to participate in the fast growing
paid listings sector. WebFinder.com allows advertisers to promote their websites
on our proprietary websites as well as across a portfolio of partner sites on
either a fixed fee or a pay-per-click basis.

During 2002 and 2003 we sold Internet advertising to
approximately 25% of our existing printed directories customer base. A further
3,143 advertisers purchased Internet only advertising from us during 2003.

Total published Internet advertising sold increased from £4.3
million in 2002 to £5.2 million in 2003 following the launch of our pay-per
click service, WebFinder.com, in January 2003. Internet advertising revenues
recognised as revenue in 2003 amounted to £4.8 million (2002: £4.5 million).

We have entered the Internet advertising segment primarily
utilising our existing personnel. Over time, we expect to add a dedicated
Internet sales force. We believe that our online directory complements our
printed directories products and provides operational synergies and
cross-selling opportunities with our existing printed directories business.



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Business Information

Our Business Information team sells business information from
our proprietary database relating to U.K. businesses to both wholesale and
retail customers. In the wholesale category, our sales are relatively
concentrated. A small number of large companies use information from our
database to update their own databases for resale purposes or to incorporate
such information from our database in their products and services. Our wholesale
customers include direct marketing companies, directory enquiries service
providers and several of the major U.K. credit companies, who use our database
for marketing and compiling business information reports. Wholesale customers
are either charged an annual licence fee or a royalty, based on usage or a
percentage of product sales and subject to a minimum fee. Licence agreements
with our wholesale customers generally have terms from three to five years.
Revenues are recognised over the period of the licence agreements.

In the retail category, we develop and market the following
products and services:

|- | Business Search Pro is a CD-ROM
      that contains approximately 2.1 million business listings providing name,
      address, telephone numbers and business type. Details for each business
      listing may also show number of employees, how long the business has been
      at that location, senior decision maker, fax number and type of premise.
      This additional information allows the CD-ROM to be used for many purposes
      including direct marketing with enhanced credit metering technology
      enabling our customers to download data from our database on a
      ''pay-as-you-go'' basis. Business Search Pro acts as both a directory
      enquiry and a direct marketing tool. The addition of Telephone/Fax
      Preference Service matching is a unique selling point in the market. In
      2002, we added Telemarketing functionality to the product which has
      increased sales to customers using the data to make telesales calls. The
      product won "Best CD-ROM" and overall "Champion Directory" at the 2002 DPA
      Awards. In 2003 the product won two further awards, the "Best CD-Rom" at
      the 2003 DPA Awards and the "Best B2B Offline Product" at the 2003 EADP
      Awards. | 
|- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- | 
|  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      | 
|- | In 2003, we launched BSP Online.
      This new Internet service allows users 24x7 access to an up to date online
      version of the Thomson Database. Customers can buy data and download it
      themselves, either on a pay as you go basis or by paying an annual
      membership fee which entitles them to preferential rates for subsequent
      data purchases.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         | 
|  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      | 
|- | New Connections is a monthly
      subscription service that provides customers with information for sales
      and marketing purposes such as whether a business has recently started
      trading or relocated and is targeted at 90 different types of businesses
      who benefit from this kind of information.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              | 
|  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      | 
|- | New Connections Plus X is another
      Business Information innovation. It provides customers with sales and
      marketing information about small businesses that started up or relocated
      over the past six months and are still in business. This product is now
      bundled with the core New Connections product to help get customers
      started immediately with their marketing activities.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     | 
|  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      | 
|- | Fastest Growing Companies is a
      new service that provides customers with sales leads and marketing
      information about the fastest growing limited companies and plc's in the
      UK. The data is compiled twice a year from analysis of the Thomson
      database and data from Companies House.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        | 

As there are very few incremental costs in producing the data
in a format suitable for Business Information customers, this business area
generates higher operating margins than our overall operating margins. Revenues
relating to Business Information have increased to £7.4 million in 2003 (2002:
£6.9 million) due to wholesale customer account growth and continued growth in
retail product sales.



17

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The Thomson Name

We have the right to use the ''Thomson'' name in connection
with both printed and online directories in the United Kingdom until the end of
2027 pursuant to a licence agreement with The Thomson Corporation of Canada.
Annual royalty payments after 1998 under the licence are nominal. The licence
agreement provides for termination of the licence upon several enumerated
changes of control. We obtained the written consent of The Thomson Corporation
for the change of control on 1 August 2000, when TDL Infomedia Limited, the
ultimate U.K. parent company of the Group, was acquired by SEAT Pagine Gialle
SpA.



BT Data Supply



On 1 January 1999, in order to comply with the
Telecommunications (Open Network Provision) (Voice Telephony) Regulations 1998
and in response to the recommendations of the Office of Telecommunications, BT
made its core database more widely available and adopted a new pricing mechanism
for this database. As a result of BT's desire to replace our existing licence
with a new ''standard'' licence which will be available to persons using the
data for the purpose of providing directories or a directory information
service, our existing licence was terminated on 31 December 2000. With effect
from 1 January 2001 we entered into a new licence agreement pursuant to which we
are required to pay an annual fee for usage of all classified data, plus
additional royalties for any A-Z usage of residential data. BT has served us
with notice of termination under this licence (and has done the same to other
licensees of the core database) with a view to putting a new standard licence in
place. The termination notice originally terminated the licence on 31 December
2003, but three extensions were made resulting in the expiry date currently
being 31 May 2004. Negotiations on the licence terms are continuing.



18

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Regulatory Environment

1996 Report on the Supply of Classified Directory
Advertising Services in the United Kingdom

In 1995, the U.K. Office of Fair Trading, the government agency
responsible for enforcing competition policy under the Fair Trading Act 1973,
undertook a review of the classified directories industry due to concerns
regarding the market position of BT Yellow Pages (now Yell Group Limited), its
rates of return and its ability to act anti-competitively. As a result of that
review, the Director General of Fair Trading, who heads the Office of Fair
Trading, requested the Monopolies and Mergers Commission to investigate and
report on the supply of classified directories advertising services in the
United Kingdom under the monopoly provisions of the Fair Trading Act 1973. The
Monopolies and Mergers Commission is now known as the Competition Commission.
The primary directories covered by the review were BT Yellow Pages and Thomson
Local directories.

In March 1996, the Monopolies and Mergers Commission published
its report entitled ''Classified Directory Advertising Services.'' The
Monopolies and Mergers Commission concluded that BT Yellow Pages held a monopoly
position in the classified directories advertising services market and that it
was exploiting this position by charging excessive prices to advertisers in BT
Yellow Pages. It also found that BT Yellow Pages' publication of local
directories was likely to reduce the effectiveness of competition to BT Yellow
Pages. The Monopolies and Mergers Commission report outlined several
recommendations to the Secretary of State for Trade and Industry including the
imposition of a limit on the annual increase in rates for advertising in BT
Yellow Pages, a prohibition of British Telecom (now BT Group plc) from
publishing or distributing more than one consumer classified directory in any
particular area and establishment of BT Yellow Pages as a separate subsidiary of
BT Group plc ("BT"). The Secretary of State for Trade and Industry accepted the
Monopolies and Mergers Commission's recommendations, with the exception of the
requirement that BT Yellow Pages be established as a separate subsidiary. The
Secretary of State also sought undertakings from BT requiring it to publish
annual financial statements for its classified directories business and to
provide the Office of Fair Trading with information so that it could monitor the
effectiveness of the remedies. On 26 July 1996, the Department of Trade and
Industry announced that BT had agreed to give these undertakings.

In March 1996, the Department of Trade and Industry asked the
Director General of Fair Trading to report back in three years, or earlier, if
necessary, on the effectiveness of BT's undertakings in addressing the MMC's
concerns.

Following its review of the effectiveness of these
undertakings, on 11 May 2001 the Office of Fair Trading announced that the price
cap limiting annual increases in advertising rates by Yell Group Limited should
be tightened from RPI (as measured by the retail price index) minus 2% to RPI
minus 6% every year for a period of four years for directories published from
January 2002. It also stated that Yell Group Limited is required to observe
certain other conditions including a prohibition on publishing more than one
printed consumer classified directory in each distribution area except as
allowed in certain limited areas and an obligation to prepare and make available
financial statements in respect of the printed consumer classified directory
business. Yell Group Limited has given undertakings requiring it to observe the
conditions. The Director General of Fair Trading has undertaken to keep under
review the operation and ongoing effectiveness of the undertakings.



19

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1998 OFTEL Statement on the Provision of Directory Information
Services and Products and 1999 OFTEL Publication on Responses to the Statement
on the Provision of Directory Information Services and Products

The Office of Telecommunications was, until the end of 2003,
the regulator for the U.K. telecommunications industry. On 25 September 1998,
the Office of Telecommunications published a Statement entitled ''Provision of
Directory Information Services and Products'' (''1998 OFTEL Statement'') to
address the privacy concerns of individual subscribers concerning the manner in
which their directory information is used, ensure that customers have access to
more comprehensive directory information services and directories and enable
competition to develop in the supply of directory information services and
directories. In particular, the Office of Telecommunications proposed to amend
BT's licence under the Telecommunications Act 1984, as at 1 January 1999, to
give potential service providers of directory information the right to request
downloads of directory information from BT's directory database and online
access to BT's directory enquiries database on the same terms as public
telecommunications operators who already had access. The Office of
Telecommunications stated that the purpose of this modification was to promote
competition in the provision of telephone directories and directory information
services.

The 1998 OFTEL Statement also proposed the development of a
Code of Practice on the use of directory information in order to provide a
workable set of rules and guidelines on the use of individuals' directory
information. Pursuant to this proposal, the Office of the Data Protection
Registrar (which administered the Data Protection Act 1984 (the ''DPA 84'') and
will, as the Information Commissioner, now administer the Data Protection Act
1998 (the ''DPA 98'') which has replaced and superceded the DPA 84), issued the
Code of Practice on Telecommunications Directory Information Covering the Fair
Processing of Personal Data (the ''Code of Practice'') on 21 December 1998.

In May 1999, OFTEL published a Statement entitled ''Responses
to the Statement on the Provision of Directory Information Services and
Products.'' The Office of Telecommunications confirmed its amendment to BT's
licence, effective as at 1 January 1999, to allow equal access to BT's database
of subscribers provided that it is for the purpose of providing directories or a
directory information service, regardless of who actually offers such products
or services. The way in which electronic communications networks and services
are regulated changed from 25 July 2003. Licence conditions were replaced by
general conditions of entitlement and specific conditions, including specific
conditions to ensure the provision of a universal service. BT has been
designated a universal service provider in the UK and has had specific universal
service conditions imposed upon it which now contain its obligations with regard
to allowing access to its database of subscribers.



20

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Data Protection Legislation

Pursuant to BT's specific conditions referred to above, any
person downloading BT's database of subscribers must undertake to comply with
data protection legislation, including DPA 98, which replaces and supersedes the
DPA 84, and any relevant codes of practice issued by the Information
Commissioner.

The first ''data protection principle'' which was set out in
the DPA 84 required all personal data to be ''processed'' fairly.
''Processing,'' in relation to information or data, means obtaining, recording
or holding the information or data or carrying out any operation or set of
operations on the information or data. The Code of Practice provides guidance on
the application of this requirement to processing of personal data held, or
derived from, telecommunications directory services or products. Specifically,
the Code of Practice discusses the fair processing of personal data based upon
the type of directory information released or made available. For example, the
Code of Practice states that the information that individuals request to be
listed in a telephone directory may not be changed without their permission and
directory enquiry services may only provide an individual's telephone number if
the person calling the directory service provides the name and home address of
the individual. Although the Code of Practice relates primarily to residential
subscribers, telecommunications directory information that relates to sole
traders and partnerships established in England and Wales is likely to be
considered personal data and, therefore, the same requirements relating to
information about residential subscribers under the DPA 84 would apply.

The DPA 98 maintains the requirement that personal data must be
processed fairly. The Data Protection Commissioner considers that the processing
of personal data in breach of the Code of Practice will be a breach of the fair
processing requirement of the DPA 98.

The Data Protection Commissioner interprets the first data
protection principle in both the DPA 84 and the DPA 98 to mean that personal
data should not be processed in a particular manner if it was not obvious, or
actually pointed out, to the individual concerned, when he or she provided the
data, that they might be processed in that manner, unless the individual
concerned has subsequently consented to the processing. The Data Protection
Tribunal has supported this interpretation in a number of cases.

The DPA 98 supplements the first data protection principle with
an explicit requirement to provide information to the individuals to whom
personal data relate - specifically, information about the identity of the
person controlling their data, the purposes for which the data is used and any
other information necessary to ensure that the processing is fair. This
requirement will arise even where the data are not collected directly from the
individual concerned. There will be an exception to the requirement where
providing the information would involve a disproportionate effort, but the
circumstances in which providing the information would be deemed to involve a
disproportionate effort are not yet clear. Transitional relief provisions
provided in the DPA 98 have now expired.

Breach of the first data protection principle is not a criminal
offence. The Data Protection Commissioner may, however, respond to a breach by
serving an enforcement notice, which requires the data user to take steps to
remedy the breach. Breach of an enforcement notice is a criminal offence. The
DPA 98 introduces a new right for individuals to claim compensation if they
suffer damage or, in certain circumstances, distress as a result of a breach of
the requirements of the DPA 98, including the first data protection principle,
which includes the requirement to provide information to individuals.



21

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Implementation in the United Kingdom of Directive Concerning
Data Protection in Electronic Communications Services

EU Directive 2002/58/EC on the processing of personal data and
the protection of privacy in e-communications was approved on 12 July 2002 by
the European Parliament. The Directive applies to the processing of personal
data in e-communications services via public networks in the EU. It is
implemented in the UK with effect from 11 December 2003 by the Privacy and
Electronic Communications (EC Directive) Regulations 2003 (the "2003
Regulations").

The 2003 Regulations distinguish between individual and
corporate subscribers to public electronic communications services. "Individual
subscribers" include sole trades who are individuals trading under their own
name or under a business name, whose businesses do not have a legal personality
distinct from that of the individual concerned. "Individual subscribers" also
include partnerships established in England and Wales. "Corporate subscribers"
include companies organised under the Companies Act 1985, Scottish partnerships
and other corporate bodies.

The 2003 Regulations provide that the personal data of an
individual subscriber may not be included in a directory unless the subscriber
has been informed of the purposes of the director and given the opportunity to
determine whether his personal date should be included.

The 2003 Regulations contain provisions relating to unsolicited
direct marketing calls, direct marketing faxes and use of email for direct
marketing purposes. Subscribers have the right to indicate that they do not wish
to receive direct marketing calls and direct marketing faxes are not permitted
to be sent to individual subscribers without their prior consent. Corporate
subscribers have the right to indicate that they do not wish to receive
unsolicited direct marketing faxes. With regard to email, unsolicited email
communications for direct marketing purposes may not be sent to individual
subscribers unless the recipient has previously notified the sender that he
consents. However there is a limited exemption where a business obtains e-mail
addresses from its customers in the context of a sale of a product or service to
those customers. The 2003 Regulations say that subscriber and users of public
electronic communications services should receive clear and comprehensive
information about "cookies" (electronic tracking devices) in advance, enabling
them to refuse them.



22

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(C)         
ORGANISATIONAL STRUCTURE

The following is a chart describing the organisation of the
Thomson group at 31 December 2003. The Thomson group's ultimate parent company
is SEAT Pagine Gialle S.p.A.

|TDL Infomedia Limited
      SEAT Pagine Gialle SpA (99.86%)Management (0.14%)
      (1)
|---------------------------------------------------------------------------------------
|                                                                                       
|TDL Infomedia Finance Limited                                                          
|                                                                                       
|TDL Infomedia Holdings plc
      Senior Discount Notes Issuer                          
|                                                                                       
|                                                                                       
|TDL Infomedia Group plc
      Senior Subordinated Notes Issuer                         
|                                                                                       
|                                                                                       
|TDL Group Limited                                                                      
|                                                                                       
|                                                                                       
|Thomson Directories Limited                                                            



|(1) | "Management" refers to the direct
      and indirect ownership by officers, directors (and members of their
      immediate families) and employees of the Thomson group.
|--- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|    |                                                                                                                                                                          
|(2) | Unless otherwise stated all
      shareholdings are 100% and direct.                                                                                                     
|    |                                                                                                                                                                          
|(3) | Unless otherwise stated all
      companies in the Thomson group are incorporated in Great
      Britain.                                                                



23

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(D)         
PROPERTY, PLANTS AND EQUIPMENT

In January 2001 we purchased Thomson House in Farnborough, our
national headquarters and largest property, covering approximately 71,500 sq.
ft.

At 31 December 2003 we also occupied a further 14 leased
properties located throughout the United Kingdom. These leased properties house
our regional sales offices and warehouse and vary in size from 1,000 sq. ft. to
8,000 sq. ft. These properties have leases expiring at various dates between
2004 and 2015. Each of the properties is insured in accordance with the terms of
the relevant leases.





ITEM
5          OPERATING AND FINANCIAL
REVIEW AND PROSPECTUS

(A)         
OPERATING RESULTS

On 1 August 2000, the Group was indirectly acquired by SEAT
Pagine Gialle SpA, as described in Item 4.A. With the exception of a reduction
in the estimated useful life of goodwill from 20 years to 15 years following a
review thereof by the directors after the acquisition of the Group by SEAT
Pagine Gialle SpA, the change in control did not have a significant impact on
the Group's results for the year ended 31 December 2000.



Results of Operations

The following table summarises our historical results and cash
flows for the years ended 31 December 2001, 2002 and 2003. The data is derived,
without adjustment, from the audited consolidated accounts of TDL Infomedia
Holdings plc included elsewhere in this report.



|                                                           | Year ended 31 December
      (£'000)
|---------------------------------------------------------- | ------------------------------------
|Operating results                                          | 2001                                
|Turnover                                                   | 93,137                              
|Cost of sales                                              | (40,052)                            
|Gross profit                                               | 53,085                              
|Operating costs                                            | (41,924)                            
|Operating profit                                           | 11,161                              
|Operating loss from joint venture                          | (636)                               
|Net interest expense                                       | (18,568)                            
|(Loss)/profit on ordinary activities before
      taxation | (8,043)                             
|Taxation                                                   | (2,205)                             
|Loss on ordinary activities after taxation                 | (10,248)                            
|Cash flows                                                 |                                     
|Net cash inflow from operating activities                  | 30,564                              
|Returns on investments and servicing of
    finance        | (11,112)                            
|Tax paid                                                   | (690)                               
|Capital expenditure and financial
    investments          | (11,546)                            
|Net cash received for sale of joint venture
      interest | 807                                 
|Net cash inflow before financing                           | 8,023                               
|Net cash outflow for financing                             | (14,579)                            
|(Decrease)/increase in cash                                | (6,556)                             



24

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Critical Accounting Policies

We prepare our consolidated financial statements in conformity
with accounting principles generally accepted in the United Kingdom, which
differ from generally accepted accounting principles in the United States. Note
30 of the consolidated financial statements discusses the differences between UK
GAAP and US GAAP. Our significant accounting policies are more fully described
in Note 1 to our consolidated financial statements. However, certain of our
accounting policies are particularly important to the portrayal of our financial
position and results of operations and require the application of significant
judgment by management; as a result they are subject to an inherent degree of
uncertainty. In applying those policies, management uses its judgment to
determine the appropriate assumptions to be used in the determination of certain
estimates. Those estimates are based on our historical experience, terms of
existing contracts, our observance of trends in the industry, information
provided by our customers and information available from other outside sources,
as appropriate. Our significant accounting policies include:



Revenue Recognition

We recognise revenues from the sale of advertisements placed in
each paper directory when the completed directory is distributed to households
and businesses in the respective regions. Costs directly related to sales,
production, printing and distribution of each directory are recorded initially
as work in progress and then matched against related revenues upon
distribution.

With effect from 1 September 2000 our Internet advertising
arrangement changed and we now recognise Internet advertising revenues evenly
over the 12 month period of the advertising contract. Previously we recognised
Internet advertising commission revenues in full on publication of the Internet
advertisement in the same way as paper directory revenues. This change in the
timing of Internet revenue recognition arose following a change in the nature of
the sales arrangement with TDL InfoSpace (Europe) Limited and our customers from
sales agent to principal (as described in Item 4(B) "Business Overview -
Internet Services"). With effect from 1 September 2000 incremental costs
directly related to the sale of Internet advertisements are recognised evenly
over the 12 month period of the advertising contract. All other operating costs
are recognised during the period when incurred.

Our publication schedule is adjusted from time to time to
accommodate changes to the length of the selling period, changes to sales
staffing levels, our response to market and competitive conditions and the
introduction of new directories. As a result, individual directories may be
published at a different time each year and may move from one quarter to
another. Both quarterly and year-to-year results, therefore, depend on both
timing and performance factors



Goodwill, Intangible and Other Long-Lived Assets

Property, plant and equipment, goodwill, intangible and certain
other long-lived assets are amortized over their useful lives in accordance with
generally accepted accounting practice in the United Kingdom. Useful lives are
based on management's estimates of the period that the assets will generate
revenue. Intangible assets are reviewed for impairment whenever events or
changes in circumstances indicate that the carrying amount of an asset may not
be recoverable.



Pension benefits

The determination of our obligation and expense for pension
benefits is dependent on our selection of certain assumptions used by actuaries
in calculating such amounts. Those assumptions are described in Note 24 to the
consolidated financial statements and include, among others, the discount rate,
expected long-term rate of return on plan assets and rates of increase in
salaries. In accordance with U.K. generally accepted accounting principles,
actual results that differ from our assumptions are accumulated and amortized
over future periods and therefore, generally affect our recognized expense and
recorded obligation in such future periods. While we believe that our
assumptions are appropriate, significant differences in our actual experience or
significant changes in our assumptions may materially affect our pension and
other postretirement obligations and our future expense.



25

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Deferred Taxes

Following the adoption of FRS19 during 2002, we now recognise
deferred tax assets and liabilities based on the differences between the
financial statement carrying amounts and the tax bases of assets and
liabilities. Deferred tax assets are recognised only to the extent that the
directors consider that it is more likely than not that there will be suitable
taxable profits from which the future reversal of the underlying timing
differences can be deducted. In 2002 and 2003 no deferred tax assets were
recognised in the balance sheet as they were not expected to reverse in the
foreseeable future. Should we generate sufficient future taxable income, or if
there is a material change in the actual effective tax rates or time period
within which the underlying temporary differences become taxable or deductible,
we may be able to realise such deferred tax assets in the future in excess of
the net recorded amount. Such an adjustment to deferred tax assets would
increase income in the period the determination was made.



Allowance for Doubtful
Accounts

The Group evaluates the collectibility of accounts receivable
based on numerous factors, including past transaction history with customers and
their credit worthiness. Initially, the Group estimates an allowance for
doubtful accounts as a percentage of net sales based on historical bad debt
experience. This estimate is periodically adjusted when the Group becomes aware
of a specific customer's inability to meet its financial obligations (e.g.
bankruptcy, etc.), or as a result of changes in the overall ageing of accounts
receivable. While the Group has a large customer base our advertising sales are
concentrated in the South East regions of the United Kingdom. If there was a an
economic downturn in the South East regions of the United Kingdom or the other
local communities we serve, our ability to collect amounts due to us may be
adversely affected.



Turnover

Turnover increased by 4.1% from £93.1 million to £96.9 million
in 2002 and by 7.4% to £104.1 million in 2003. During this period, print
directory revenues (before discounts) increased from £86.9 million in 2001 to
£89.4 million in 2002 and to £96.2 million in 2003.

The increase in revenues from paper directories from £86.9
million in 2001 to £89.4 million in 2002 was achieved as a result of a 4.5%
growth in customer numbers from 88,839 in 2001 to 92,825 in 2002. Similarly, the
increase in revenues from paper directories from £89.4 million in 2002 to £96.2
million in 2003 was achieved as a result of an 8.9% growth in customer numbers
from 92,825 in 2002 to 101,061 in 2003. In both years the increase in the number
of customers was driven by various pricing and other account growth initiatives.
The average value of print directory accounts ("AVAs") decreased from £975 in
2001 to £960 in 2002 and to £952 in 2003 partly as a result of these
initiatives. Return on base, which represents the revenues generated from our
previous year's customers as a percentage of the total revenues generated in the
previous year, increased from 81.6% in 2001 to 85.3% in 2002 and to 86.5% in
2003.

Published Internet advertising sales (before discounts)
declined from £4.4 million in 2001 to £4.3 million in 2002. Despite an increase
in the proportion of customers purchasing Internet advertisements in 2002, up
from 20% in 2001 to 25% in 2002, published Internet advertising revenues
declined in 2002 as a result of lower average spend per customer. In 2003
published Internet advertising sales increased by 21.9% to £5.2 million, largely
as a result incremental revenues generated following the launch of our new pay
per click service, WebFinder.com. Approximately 25% of our print advertiser
customer base purchased Internet advertising in 2003 and a further 3,143
customers purchased Internet only advertising. Internet advertising revenues
recognised in the accounts amounted to £3.5 million in 2001, £4.5 million in
2002 and £4.8 million in 2003.

Business Information revenues (before discounts) have grown
rapidly during the last two years, increasing from £6.2 million in 2001 to £6.9
million in 2002 and to £7.4 million in 2003. These increases have been driven
primarily by wholesale customer account growth, coupled with continued growth in
retail product sales.



26

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Cost of Sales

Our principal costs in this category are direct sales costs,
production, paper and printing. At the individual directory level, production,
paper and printing costs are largely fixed for an established circulation. Gross
margins increased from 57.0% in 2001 to 59.2% in 2002, as a result of print and
paper cost savings achieved under the new contracts entered into on 1 January
2002. Gross margins have since declined, to 58.7% in 2003 as a result of the
increased production costs associated with "Value Plus" rate card initiatives
and the introduction of full colour advertising in a further 11 directories in
2003.

Direct sales expense correlates closely with the size of our
sales force. Our ability to complete selling in each directory within a
prescribed time frame depends on sales staff levels and productivity. The size
of our direct sales force decreased from 463 in 2001 to 449 in 2002 before
increasing to 470 in 2003. Despite the increased headcount in 2003 direct sales
expenses as a percentage of turnover have continued to decrease, from 26.3% of
turnover in 2001 to 25.0% of turnover in 2002 and 24.8% in 2003.



Operating Costs

Our operating costs include advertising, general and
administrative expenses, distribution costs, office costs, bad debts and
customer credits and depreciation and amortisation charges. The increase in
operating costs from £41.9 million in 2001 to £43.5 million in 2002 primarily
reflects the impact of the release of a £1.0 million onerous lease provision
during 2001 as well as the costs incurred during 2002 to develop our new online
search engine, WebFinder.com, which was launched in January 2003.

The increase in operating costs from £43.5 million in 2002 to
£46.8 million in 2003 primarily reflects the £1.7 million increase in
advertising expenditure during the year, coupled with the costs incurred to
develop our new online search engine, WebFinder.com, which was launched in
January 2003.

As a percentage of turnover, our operating costs have remained
relatively static at 45.0% in 2001, 44.9% in 2002 and 44.9% in 2003.



Operating Loss from Joint Venture

In February 1999, we established a Belgian joint venture, TDL
Belgium S.A., with Deficom S.A., a local investor, to provide printed and
Internet directories in Belgium. At that time, we and Deficom S.A. each held a
47% direct interest in TDL Belgium S.A., with the remainder to be transferred to
its management team.

On 30 March 2001 the Group sold its investment in, and loans
to, TDL Belgium S.A. to a newly formed company, TDL Investments BV, a wholly
owned subsidiary of TDL Infomedia Limited, the company's ultimate U.K. parent
company. The investment and loans were sold for £4.1 million, the value of the
net investment including loans and our portion of the joint venture's losses
since inception reflected in the Group's accounts on that date.

The Group's share of the joint venture's operating losses
(before interest and taxation) during 2001, up to the date of sale, totalled
£0.6 million.



Net Interest Expense

The increase in the net interest expense from £18.6 million in
2001 to £24.3 million in 2002 primarily reflects the premium paid on the
repurchase of 86.2% of the outstanding Senior Discount Notes during 2002.



The decrease in the net interest expense from £24.3 million in
2002 to £13.6 million reflects the substantially lower premiums paid on the
repurchase of the Senior Discount Notes in 2003 (with only $785,000 of Senior
Discount Notes repurchased in 2003, compared to repurchases of Notes with a face
value of $75,300,000 during 2002) coupled with lower borrowing costs incurred on
the debt used to fund such repurchases, of approximately 7% compared to the
15.5% coupon rate on the Senior Discount Notes.



27

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Net Income and Shareholders' Equity Determined Under U.S.
GAAP

You should read the notes to the audited financial statements
included in Item 18 of this report for a discussion of the differences between
U.K. GAAP and U.S. GAAP as well as net income and shareholders equity determined
under U.S. GAAP. Some of the differences include:

|- | Capitalisation and amortisation
      of goodwill and identifiable intangibles acquired in connection with
      business combinations;
|- | ---------------------------------------------------------------------------------------------------------------------------------------
|  |                                                                                                                                        
|- | Deferral of sales costs related
      to directories in progress;                                                                      
|  |                                                                                                                                        
|- | Basis of calculation and
      recognition of cost of providing pension benefits; and                                                  
|  |                                                                                                                                        
|- | Treatment of deferred
      consideration payable by SEAT Pagine Gialle
S.p.A.                                                         

Other than the differences related to goodwill expense, pension
costs and deferred consideration, the discussion on our Operating Results and
Liquidity and Capital Resources is substantially the same under U.K. GAAP as it
is under U.S. GAAP.



Common European Currency

The single European currency known as the euro came into
existence on 1 January 1999, but the United Kingdom is not one of the 12
European Union Member States currently participating. Our turnover currency
consists of sales primarily made in the United Kingdom and is not directly
affected by the change of currency. Although no decision has been made as to
when, or even if, the United Kingdom will participate in the single European
currency we believe that our commercial operations can be adapted to accommodate
the euro without a material adverse effect on our operations.



Effect of Inflation

Because of the relatively low level of inflation experienced in
the U.K., inflation did not have a material impact on the results of operations
for the periods presented.



28

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(B)         
LIQUIDITY AND CAPITAL RESOURCES

Cash flow and funding

Our principal source of liquidity is cash flow generated from
operations. In addition we have access to (i) a Multicurrency Facility with SEAT
Pagine Gialle S.p.A., which had an undrawn balance at 31 December 2003 of £22.8
million, (ii) a further facility Agreement with SEAT Pagine Gialle S.p.A. which
had an undrawn balance at 31 December 2003 of £12.0 million and (iii) an
unutilised £3.0 million revolving credit facility with our bankers.

Cash generated by operating activities amounted to £30.6
million in 2001, £28.8 million in 2002 and £29.2 million in 2003.

Despite an increase in Group operating profits (before
depreciation, amortisation and share of joint venture losses) from £27.6 million
in 2001 to £30.4 million in 2002, cash generated by operating activities during
2002 was lower, at £28.8 million, than the £30.6 million generated in 2001 which
included the proceeds received on the sale of our Belgian joint venture.

The increase in operating profits (before depreciation and
amortisation) from £30.4 million in 2002 to £30.7 million in 2003 contributed to
the increase in operating cash flows in 2003 from £28.8 million in 2002 to £29.2
million.

Cash was used to pay taxes of £0.7 million in 2001, £2.7
million in 2002 and £2.5 million in 2003 and net interest of £11.1 million in
2001, £9.6 million in 2002 and £10.4 million in 2003. The decrease in net
interest paid in 2002 reflects the reduced borrowing levels of the Group during
the period. The increase in net interest paid in 2003 reflects the impact of the
higher interest rates incurred following the refinancing, in July 2003, of the
two SEAT Pagine Gialle S.p.A facilities referred to above.

Cash outflows in connection with capital expenditure and
financial instruments amounted to £11.6 million in 2001, £1.7 million in 2002
and £1.2 million in 2003. The 2001 expenditure includes the purchase of our
corporate head office in Farnborough, Hampshire, in January 2001 for £9.5
million. We anticipate capital expenditure of approximately £2.0 million in
2004.



Borrowings

The 1999 Acquisition resulted in cash outflows of £140.1
million for the acquisition of shares, £66.9 million to repay borrowings as well
as outflows in connection with costs associated with the raising of debt. These
debt raising costs amounted to £11.8 million within TDL Infomedia Holdings plc
and to £10.0 million within TDL Infomedia Group plc. At the TDL Infomedia
Holdings plc level the acquisition was funded through an equity investment
(including capital contribution) of £68.3 million, a share for share exchange
valued at £11.4 million and borrowings of £150.0 million. At the TDL Infomedia
Group plc level the equity investment (including capital contribution) amounted
to £91.1 million with borrowings of £125.0 million. The Group borrowings
consisted of: (1) borrowings by TDL Infomedia Group plc of £55.0 million under a
£65.0 million senior credit facility, (2) borrowings by TDL Infomedia Group plc
of £70.0 million under a senior subordinated financing facility which was
refinanced by the issue of £70,000,000 12.125% Senior Subordinated Notes due
2009 and (3) borrowings by TDL Infomedia Holdings plc of £25.0 million under a
senior discount financing facility which was refinanced by the issue of US
$87,360,000 15.5% Senior Discount Notes due 2010 at a price of 47.366%.

Following the change of control of the Group on 1 August 2000 a
tender offer was made to acquire all the outstanding Senior Subordinated and
Senior Discount Notes at 101% of the principal amounts outstanding. Acceptances
were received from holders of £2,250,000 of the Senior Subordinated Notes. No
acceptances were received from holders of the Senior Discount Notes.



29

---



Following a change of control of the Group's parent company,
SEAT Pagine Gialle S.p.A, in August 2003 a tender offer was made to acquire all
the outstanding Senior Subordinated Notes at 101% of the principal amounts
outstanding. No acceptances were received.

Under the terms of the indenture relating to the Senior
Discount Notes, a majority in principal amount of the Senior Subordinated Notes
had to consent to a similar tender offer being made to the holders of the Senior
Discount Notes or such an offer could not be made. The Group did not receive the
requisite consents therefore it did not make a tender offer for the Senior
Discount Notes.

During 2002, TDL Infomedia Holdings plc accepted four offers to
repurchase a portion of its outstanding US$87,360,000 15.5% Senior Discount
Notes ("the Notes"). The repurchases were completed as follows:

- On 14 August we completed the repurchase of US$10.0 million
  in aggregate principal amount at maturity of the Notes;
- On 18 September we completed the repurchase of US$12.2
  million in aggregate principal amount at maturity of the Notes;
- On 8 October we completed the repurchase of US$15.21 million
  in aggregate principal amount at maturity of the Notes; and
- On 16 December we completed the repurchase of US$37.89
  million in aggregate principal amount at maturity of the
Notes.

All repurchased Notes were promptly cancelled. As a result of
the aforementioned repurchases, the aggregate principal amount at maturity of
the Notes outstanding at 31 December 2002 was US$12,060,000.

In February 2003, we accepted an offer to repurchase $785,000
of the outstanding Notes. The repurchased Notes have since been cancelled. As a
result, the aggregate principal amount at maturity of the Notes outstanding at
31 December 2003 was US$11,275,000. No further repurchases have been made since
31 December 2003.

All of the above repurchases were financed by the £55.0 million
Facility Agreement dated 12 August 2002 with Sogerim S.A (now Telecom Italia
Finance S.A.), which has since been refinanced by a new £55.0 million Facility
Agreement with SEAT Pagine Gialle S.p.A dated 31 July 2003. The new facility
bears interest at an effective rate of LIBOR plus 3.30% and is repayable on the
earlier of 15 October 2010 or change of control.

The senior debt of £55.0 million raised at the time of the 1999
Acquisition was refinanced on 29 December 2000 under a one year syndicated
revolving credit facility of £65.0 million bearing interest at an effective rate
of LIBOR plus 1.10%.

On 14 December 2001 the Thomson group entered into a new £65.0
million Multicurrency Facility agreement with Sogerim S.A. (now Telecom Italia
Finance S.A.), a subsidiary of Telecom Italia S.p.A. This facility bore interest
at an effective rate of LIBOR/EURIBOR plus 1.375%.

On 10 September 2002 this facility was refinanced by a new one
year £55.0 million Multicurrency Facility Agreement with Sogerim S.A. (now
Telecom Italia Finance S.A.). The new facility bore interest at an effective
rate of LIBOR/EURIBOR plus 1.625% p.a.

As a result of the change of control of our parent company,
SEAT Pagine Gialle S.p.A., this facility was refinanced on 31 July 2003 by a new
one year £55.0 million Multicurrency Facility Agreement directly with SEAT
Pagine Gialle S.p.A. The new facility bears interest at an effective rate of
LIBOR/EURIBOR plus 1.875% p.a.



30

---



As at 31 December 2003, the Thomson group had drawn £32.2
million under this facility, of which £15.4 million had been drawn down by TDL
Infomedia Holdings plc and its subsidiaries. The undrawn balance under this
facility of £22.8 million on 31 December 2003 is considered by the Group to be
sufficient for present working capital requirements. The directors believe they
will be able to refinance this facility when it becomes repayable, on 31 July
2004 (see Item 3(D) "Risk Factors").

> 

(C)         
RESEARCH AND DEVELOPMENT, PATENTS AND LICENSES, ETC.

We continually seek to introduce new products and features in
order to create incentives for our customers to renew their prior year's
advertising subscription and increase their expenditure on our products. We
typically roll out these product innovations over two to three years to the
majority of our directories. In 1998 we rolled out White Knock-out, a feature
which allows a customer's advertisement to stand out from its competitors by
printing the advertisement against a white backdrop. In 1999 we launched yellow
highlighted advertisements and double column unit advertisements as compared to
standard single column advertisements. In 2000 we launched colour advertisements
in the classified section of 39 directories. The roll-out of such colour
advertisements has since been extended across a further 18 directories and in
2004 we intend to introduce full colour advertisements across a further 102
directories.

In December 2002 we launched a new directory of web addresses,
WebFinder, for distribution throughout Central London.

> 

(D)         
TREND INFORMATION

During 2003 we grew our print advertising customer base by
8.9%, from 92,825 to 101,061. Our Internet advertising customer base also
increased during 2003, with approximately 25% of our print advertiser customer
base purchasing Internet advertising in 2003 and a further 3,143 customers
purchasing Internet only advertising (as discussed in Item 5(A) "Operating
Results"). While we expect to be able to continue to drive customer account
growth across all areas of our business during 2004, we operate in a competitive
market and the actions of competitors may impact our ability to continue to
attract and retain new customers. It is too early to assess, for example, the
impact that BT's re-entry into the print classified directories market during
2003 will have on our business.



(E)         
OFF-BALANCE SHEET ARRANGEMENTS

The Group had no off-balance sheet arrangements in place during 2003 as
defined by the Commission.



31

---



(F)         
TABULAR DISCLOSURE OF CONTRACTUAL OBLIGATIONS

The following table sets forth the aggregate maturities of the
Group's debt and operating leases and other long term obligations for the five
years subsequent to 31 December 2003.



|                                  | 2004   | 2005  | 2006  | 2007  | 2008  | Thereafter | Total  
|--------------------------------- | ------ | ----- | ----- | ----- | ----- | ---------- | -------
|                                  | £'000  | £'000 | £'000 | £'000 | £'000 | £'000      | £'000  
|Borrowings                        | 15,444 | -     | -     | -     | -     | 116,292    | 131,736
|Operating lease obligations       | 2,492  | 1,802 | 906   | 479   | 195   | 139        | 6,013  
|Unconditional purchasecommitments | 5,859  | 3,041 | 3,084 | -     | -     | -          | 11,984 
|                                  | 23,795 | 4,843 | 3,990 | 479   | 195   | 116,431    | 179,733

The expected pension contributions payable by TDL Infomedia Holdings plc in
2004 to meet its future commitments are included in the amount of £3.7 million
given in the additional US GAAP disclosures for employee benefit plans in Note
30 to the consolidated financial statements. This is the best estimate of the
company in light of uncertainty over future market fluctuations in the pension
plan as a result future commitments have not been included in the above
table.



(G)         
SAFE HARBOR

In addition to historical information, certain statements
contained herein constitute "forward-looking statements" as that term is defined
under the Private Securities Litigation Reform Act of 1995. These statements
relate to our future prospects, developments and business strategies and are
based on analyses of forecast of future results and estimates of amounts not yet
determinable. These forward looking statements are made only as of the date of
the annual report, and we do no undertake to publicly update or revise theses
statements, whether as a result of new information, future events or otherwise,
except as required by law.

These forward-looking statements are identified by their use of
terms and phrase such as "anticipate", "believe", "should", "positioned",
strategy", could", "estimate", "expect", "intend", "may, "plan", "predict",
project", "will" and similar terms and phrases, including references to
assumptions.

Such forward-looking statements involve known and unknown
risks, uncertainties and other factors that may cause our actual results,
performance or achievements, or our industry results, to be materially different
from those contemplated, projected, forecasted, estimated or budgeted, whether
express or implied, by such forward looking statements. Such factors include the
following: general economic and business conditions in the United Kingdom and
financial conditions worldwide; our ability to continue to grow our business,
changes in the regulatory environment in which we operate and competition from
other companies.

The risks described above and in the section entitled Item 3.D
"Key Information - Risk Factors" are not exhaustive. We operate in a competitive
and rapidly changing environment. New risks, uncertainties and other factors
emerge from time to time and it is not possible for us to predict all such risk
factors, nor can we assess the impact of all such risk factors on our business
or the extent to which any factor, or combination of factors, may cause actual
results to differ materially from those contained in any forward-looking
statements as a prediction or guarantee of actual results.



32

---



ITEM
6          DIRECTORS, SENIOR
MANAGEMENT AND EMPLOYEES

(A)         
DIRECTORS AND SENIOR MANAGEMENT

The following table sets forth information about the directors of TDL
Infomedia Holdings plc, the executive officers of TDL Group Limited and Thomson
Directories Limited and other members of senior management of Thomson
Directories Limited who served during 2003.

|Name                                                                      | Age | Position                                                                                                         
|------------------------------------------------------------------------- | --- | -----------------------------------------------------------------------------------------------------------------
|Executive and Non-ExecutiveDirectors of TDL Infomedia Holdings
      plc: |     |                                                                                                                  
|                                                                          |     |                                                                                                                  
|Linda Pancratz*                                                           | 48  | Executive Director of TDL Infomedia Holdings plc and Chief Executive
      Officer of Thomson Directories Limited
|Kevin Watson*                                                             | 38  | Executive Director of TDL Infomedia Holdings plc and Chief Financial
      Officer of Thomson Directories Limited
|Marco Sala* (1)                                                           | 45  | Non Executive Director of TDL Infomedia Holdings plc                                                             
|Paolo Giuri*                                                              | 41  | Non Executive Director of TDL Infomedia Holdings plc                                                             
|Francesco Nigri* (2)                                                      | 43  | Non Executive Director of TDL Infomedia Holdings plc                                                             
|Giacomo Casassa*(3)                                                       | 52  | Non Executive Director of TDL Infomedia Holdings plc                                                             
|Ernesto Mauri (4)*                                                        | 57  | Non Executive Director of TDL Infomedia Holdings plc                                                             
|Fabrizio Vigo (5)                                                         | 32  | Non Executive Director of TDL Infomedia Holdings
  plc                                                           

* Also a director of TDL Infomedia Limited and TDL Infomedia
Finance Limited.

(1) Marco Sala resigned on 24 February 2003(2) Francesco
Nigri resigned on 7 April 2003(3) Giacomo Casassa was appointed on 1 October
2003(4) Ernesto Mauri was appointed on 7 April 2003 and resigned on 17
September 2003(5) Fabrizio Vigo was appointed on 7 April 2003

> 

|Name                                | Age | Position                                                                                    
|----------------------------------- | --- | --------------------------------------------------------------------------------------------
|Other Members of Senior Management: |     |                                                                                             
|                                    |     |                                                                                             
|Douglas Bisset                      | 52  | Regional Sales and Customer Relations Director of Thomson Directories
      Limited         
|Sheila
Fleming                      | 43  | Regional Sales Director
      of Thomson Directories Limited                                
|Richard
      Staunton              | 38  | Regional Sales Director of Thomson Directories Limited                                      
|Kendall Gordon                      | 46  | Marketing and Strategic Development Director of Thomson Directories
      Limited           
|Andrew Hopson                       | 39  | Management Information Services and Publishing Director of Thomson
      Directories Limited
|Laurence O'Toole                    | 34  | Business Information and New Media Director of Thomson Directories
      Limited            
|Paolo Ferrari (6)                   | 35  | Operations Director of Thomson Directories
  Limited                                        



(6) Paolo Ferrari resigned on 13 January 2004



33

---



Linda Pancratz was appointed Chief Executive of Thomson
Directories Limited on 1 February 2002. Prior to that Ms Pancratz was the Chief
Operating Officer of Thomson Directories Limited from 1997 until 2002. Ms
Pancratz joined the Group as Sales Director in 1995. From 1986 through 1995, she
held several executive positions with U S WEST, including Vice President of
Sales and Services of the Business and Government Service Unit, Vice President
of Small Business Services of the Northern Region, Vice President of Mass
Markets Service Delivery and Vice President of Market Services Organisation.
Prior to joining U S WEST, Ms Pancratz worked for nine years with Northwestern
Bell Telephone Company in a variety of marketing, sales management and
operational positions. She received a Bachelor of Science Degree in Business
Administration from the University of North Dakota, graduating with honours. Ms.
Pancratz also attended Stanford University and Northwestern University where she
completed Executive Management Programs. Ms Pancratz is also a director of
Mobile Commerce Limited and Eurodit SA.

Kevin Watson has been the Chief
Financial Officer of Thomson Directories Limited since 1998. Mr. Watson joined
TDL Group Limited from Dairy Crest Group plc in February 1998 where he was
Finance Director of the logistics division. Prior to this appointment, he had
been recruited to manage the 1996 flotation of Dairy Crest Group plc on the
London Stock Exchange. Prior to joining Dairy Crest Group plc, Mr. Watson worked
for five years in the Corporate Finance Department of Coopers & Lybrand. He
became a member of the Institute of Chartered Accountants in England and Wales
in 1989 and graduated from Bristol University with an Economics and Accountancy
Degree (with Honours) in 1986.

Marco Sala was appointed Director of TDL Infomedia Holdings
plc on 9 April 2002. Mr Sala was the managing director of the Directories
business of SEAT Pagine Gialle SpA until January 2003 when he left to become
managing director of Buffeti SpA. Prior to that, Mr Sala worked for Magneti
Marelli, a subsidiary of the Fiat Group, as Head of the Board for co-ordinating
e-business initiatives. Mr Sala graduated in 1985 with a degree in Business and
Economics. Mr Sala resigned from the Company's board on 24 February 2003.

Paolo Giuri was appointed Director of TDL Infomedia
Holdings plc on 9 April 2002. He is also a director of NetCreations Inc., Icom
Inc., Consodata SA, Consodata Solutions and BCA Finance. Mr Giuri has been the
M&A Manager of SEAT Pagine Gialle SpA since joining the company in March
2000. Mr Giuri joined SEAT Pagine Gialle SpA from UNIM SpA, where he was
Strategic Planning and Acquisitions Manager. Mr Giuri graduated from Sienna
University with a degree in Economics and Banking in 1991.

Francesco Nigri was appointed Director of TDL Infomedia
Holdings plc on 9 April 2002. He is also a director of Euredit SA, Esri Italia
SpA and Eurodirectory SA. Mr Nigri has been a Corporate Controller of SEAT
Pagine Gialle SpA since joining the company in January 2001. Mr Nigri graduated
from Turin University in 1987 with a degree in Economics.

Giacomo Casassawas appointed Director of TDL Infomedia
Holdings plc on 1 October 2003. Mr Casassa joined SEAT Pagine Gialle SpA in 1973
and is currently Director of Operations for the SEAT group. Mr Casassa has a
degree in Business Administration.

Ernesto Mauri was appointed Director of TDL Infomedia
Holdings plc on 7 April 2003 and subsequently resigned on 17 September 2003.
Prior to leaving the group in 2003, Mr Mauri was the Director for Business Area
Directories at SEAT Pagine Gialle SpA.

Fabrizio Vigowas appointed Director of TDL Infomedia
Holdings plc on 7 April 2003. Mr Vigo joined SEAT Pagine Gialle S.p.A in June
2001 and is currently responsible for reporting on the group's subsidiaries and
the Directory Assistance division of SEAT Pagine Gialle SpA. Prior to joining
SEAT Pagine Gialle SpA Mr Vigo worked for Franco Tosi SpA in Milan.

Douglas Bisset was appointed Regional Sales and Customer
Relations Director of Thomson Directories Limited on 1 February 2002. Prior to
that Mr Bisset was Regional Sales Director of Thomson Directories Limited from
July 1997 to 2002. Mr. Bisset joined Thomson Directories in 1987 from Top Frost
International Limited as a National Account Executive and was appointed General
Sales Manager in 1995.



34

---



Sheila Fleming was appointed Regional Sales Director of
Thomson Directories Limited in August 2000. Ms. Fleming joined Thomson
Directories as a tele-sales rep in June 1985.

Richard Staunton was appointed Regional Sales Director
of Thomson Directories Limited in March 2001. Mr Staunton joined Thomson
Directories in 2001 from Croner CCH as Director - Group Sales and Marketing.
Previously he was President of Spafax Media (North America) and General Manager
of The Media Hub.

Kendall Gordon was appointed Marketing and Strategic
Development Director of Thomson Directories Limited on 1 February 2002. Prior to
that Mr Gordon was Marketing Director of Thomson Directories Limited from
September 1999 to 2002. Mr. Gordon joined the company as Marketing Manager in
1989. Previously he was employed as Marketing Manager, Consumer Products by
Bayer plc. Prior to joining Bayer plc in 1984, Mr. Gordon was Marketing Manager
at Mills and Bonn Ltd. Mr. Gordon received a Bachelor of Arts Degree (with
honours) in Economics and Politics from Warwick University.

Andrew Hopson was appointed Management Information Services
and Publishing Director of Thomson Directories Limited on 1 February 2002. Prior
to that Mr Hopson was the Management Information Services Director of Thomson
Directories Limited from 1999 until 2002. He joined Thomson Directories Limited
in 1995 as a Development and Support Manager. From 1992 to 1995 he was
Information Technology and Telecommunications Manager at IMS International,
which is a division of Dun & Bradstreet. Mr. Hopson began his employment as
a trainee accountant with Reed International before pursuing a career in
information technology.

Laurence O'Toole was appointed Business Information and New
Media Director of Thomson Directories Limited on 1 February 2002. Mr O'Toole
joined the company as a Marketing Executive in 1996. Previously he worked in the
information technology industry for Fujitsu ICL. Mr O'Toole graduated from
Manchester Metropolitan University with a Bachelor of Arts Degree (with Honours)
in Business Studies.

Paolo Ferrari was appointed Operations Director of Thomson
Directories Limited on 2 December 2002. Mr Ferrari joined the Group from SEAT
Pagine Gialle SpA. Prior to joining SEAT Pagine Gialle SpA Mr Ferrari was
Commercial and Business Development director at Kataweb SpA. Mr Ferrari resigned
from the Thomson group on 13 January 2004.



Employment Agreements

Pursuant to employment agreements, Ms Pancratz is employed by
TDL Group Limited, and Mr Watson is employed by Thomson Directories Limited. The
agreements with Ms Pancratz and Mr Watson are terminable by either party on one
year's notice and contain non-compete provisions that restrict them from being
involved with, for the period of their employment and for a period of one year
thereafter, any business relating to UK classified directories.

> 

(B)         
COMPENSATION

The aggregate compensation paid to all persons who served in
the capacity of director of TDL Group Limited and Thomson Directories Limited in
2003, including bonuses under the bonus scheme described below, was £0.8
million. Pursuant to their employment agreements, executive officers, directors
and other members of senior management are entitled to participate in an annual
bonus scheme pursuant to which they can receive annual bonus payments for
achieving business plan targets.

As at 31 December 2003 retirement benefits were accruing in
respect of the two executive directors under a defined benefit scheme. Cash
contributions of £45,126 were made under the scheme during 2003 (2002:
£11,556).



35

---



(C)         
BOARD PRACTICES

TDL Infomedia Holdings plc's articles of association provide
for a minimum of one director, other than alternate directors, but do not set
any maximum number. Directors may be elected by the shareholders at a general
meeting or appointed by the members of the board of directors of TDL Infomedia
Holdings plc.

The Company does not have a separate audit or remuneration
committee, consequently the full board of directors fulfills these
functions.

> 

(D)         
EMPLOYEES

The average number of persons employed by the Group during the
period, by category was:

|                    | Year ended 31 December
|------------------- | ----------------------
|                    | 2001                  
|                    |                       
|Sales and Marketing | 584                   
|Production          | 116                   
|Administration      | 156                   
|                    | 856                   

Approximately 40 employees are members of the Supervisory,
Administrative and Technical Association (S.A.T.A.) labour union. The Group has
a good relationship with S.A.T.A.



(E)         
SHARE OWNERSHIP

None of the directors and other members of senior management
listed in Item 6.A beneficially own more than one percent of the issued share
capital of TDL Infomedia Limited, the ultimate U.K. parent company of the
Group.



ITEM
7          MAJOR SHAREHOLDERS AND
RELATED PARTY TRANSACTIONS

(A)         
MAJOR SHAREHOLDERS

On 1 August 2000 SEAT Pagine Gialle SpA acquired 99.6% of the
issued share capital of TDL Infomedia Limited, the ultimate U.K. parent company
of the Group, for an equity value of £308 million and the assumption of
approximately £150 million of debt. Since then Pagine Gialle SpA have acquired a
further 0.26% of the issued share capital of TDL Infomedia Limited.
Participating management and members of their immediate family hold the
remaining 0.14% of the issued share capital of TDL Infomedia Limited. The
acquisition was effected by means of a share exchange.

As of 31 December 2003 the principal shareholders of the share
capital of TDL Infomedia Limited, the ultimate U.K. parent company of TDL
Infomedia Holdings plc, were as follows:

|                                                                                                                                         | OrdinaryShares | "A" InvestmentShares | "B" InvestmentShares | "C" InvestmentShares | Percentage ofTotal
  OrdinaryShares
|---------------------------------------------------------------------------------------------------------------------------------------- | -------------- | -------------------- | -------------------- | -------------------- | -----------------------------------
|                                                                                                                                         |                |                      |                      |                      |                                    
|SEAT Pagine Gialle SpA                                                                                                                   | 13,895,706     | 18,924               | 18,924               |                      | 99.86%                             
|The beneficial direct
      and  indirect ownership of officers  and directors and
      other  members of senior  management as a
group | -              | -                    | -                    | 18,924               | 0.14%                              



36

---



As of 31 December 2003, there were 13,952,478 shares in the
capital of TDL Infomedia Limited in issue consisting of 13,895,706 Ordinary
shares of £0.01 each, 18,924 "A" Investment shares of £0.01 each, 18,924 "B"
Investment shares of £0.01 each and 18,924 "C" Investment shares of £0.01 each.
In the event of a winding-up of TDL Infomedia Limited the Ordinary shares rank
ahead of the Investment shares. The Investment shares have equal voting rights
to Ordinary shares but have no dividend rights. Investment "A" shares rank pari
passu with Investment "B" and Investment "C" shares.



(B)         
RELATED PARTY TRANSACTIONS

Relationships and Transactions Relating to TDL InfoSpace (Europe)
Limited

In July 1998, Thomson Directories Limited formed a joint
venture with InfoSpace.com, Inc. pursuant to which TDL InfoSpace (Europe)
Limited, the joint venture vehicle, would develop Internet content services by
acquiring Internet content, developing technology to enable the use of that
content such as through data search and retrieval and developing distribution
channels for the sale of that content and technology. Thomson Directories
Limited and InfoSpace.com, Inc. each initially contributed £300,000 to the joint
venture. Gary List, then the Chief Executive Officer of TDL Group Limited and
Thomson Directories Limited, was a director of InfoSpace.com, Inc. from July
1998 to May 2000.

TDL InfoSpace (Europe) Limited holds non-exclusive licences of
Thomson Directories' database and InfoSpace.com, Inc's website technology for
the purposes of developing and marketing Internet content services. In addition,
for the period July 1998 to August 2000, Thomson Directories Limited and TDL
InfoSpace (Europe) Limited were parties to a website services agreement under
which TDL InfoSpace (Europe) Limited hosted Thomson Directories' website
(www.thomweb.co.uk) and Thomson Directories had an exclusive sales agency
agreement with TDL InfoSpace (Europe) Limited to sell enhanced classified
business listings on their behalf to customers in the United Kingdom. We
retained a sales commission for this activity and paid an annual fee to TDL
InfoSpace (Europe) Limited for their services.

In January 1999, Thomson Directories Limited sold its interest
in TDL InfoSpace (Europe) Limited at cost for £300,000 to TDLI.com Limited, a
company owned by the principal shareholders of TDL Infomedia Limited. At the
time four directors of Thomson Directories Limited, Mr GC List, Ms LM Pancratz,
Mr JG Hudson and Mr KJ Watson were directors of TDLI.com Limited. At the time
seven directors of TDL Group Limited, Mr GC List, Ms LM Pancratz, Mr J G Hudson,
Mr KJ Watson, Mr HW Battcock, Mr BR Norman and Mr EA Barton were directors of
TDLI.com Limited. On 29 January 1999 Mr GC List, Ms LM Pancratz, Mr KJ Watson,
Mr JG Hudson, Mr BR Norman and Mr HW Battcock and their immediate families held
beneficial interest in shares of TDL Group Limited and TDLI.com Limited. In
addition, Mr HW Battcock had an interest in funds which had invested in TDLI.com
Limited and TDL Group Limited.

In connection with its purchase of the joint venture interest,
TDLI.com Limited assumed some of the rights and obligations of Thomson
Directories Limited under the agreement governing the joint venture. However,
Thomson Directories Limited agreed to guarantee the performance by TDLI.com
Limited of all of its obligations under the agreement.

TDLI.com Limited's purchase of the joint venture interest was
funded by Thomson Directories Limited pursuant to an intercompany funding
agreement, with interest accruing at four per cent per annum above the base rate
at Barclays Bank plc. As at 30 December 1999, the amount outstanding under the
intercompany funding agreement was £300,000.

On 1 September 2000, InfoSpace Inc (previously InfoSpace.com
Inc.) acquired 100% of the issued share capital of TDLI.com Limited. The amounts
owed by TDLI.com Limited to Thomson Directories Limited under the intercompany
funding agreement were settled in full on completion of the sale and, with the
exception of the restriction from engaging in activities that would compete with
TDL InfoSpace (Europe) Limited (which remained in effect for a period of one
year), Thomson Directories Limited was released from all obligations and
guarantees under the TDL InfoSpace (Europe) Limited joint venture agreement. Mr
List, Mr Watson and Ms Pancratz resigned as directors of TDLI.com Limited and
TDL InfoSpace (Europe) Limited at that time.



37

---



Thomson Directories Limited continues to licence its database
on a non-exclusive basis to TDL InfoSpace (Europe) Limited under the terms of a
revised database licence agreement dated 1 September 2000 for the purposes of
TDL InfoSpace (Europe) Limited developing and marketing Internet content
services.

On 1 September 2000 Thomson Directories Limited entered into a
new website and merchant services agreement with TDL InfoSpace (Europe) Limited
pursuant to which Thomson Directories Limited has exclusive rights to sell
preferred listings on the "InfoSpace Network" in the United Kingdom. We pay a
monthly fee to TDL InfoSpace (Europe) Limited based on the revenues earned from
advertisers or other third parties purchasing listing enhancements provided
under this agreement. The agreement also sets forth the revenue sharing
arrangements in respect of revenue generated from sales of banner advertisements
and sponsorship.



Other Related Party Transactions and Relationships

During 1999 and 2000 the Group loaned BEF 146 million and BEF
331 million (approximately £2.3 million and £5.0 million) respectively to TDL
Belgium SA. Prior to the sale of thereof on 30 March 2001, the Group loaned a
further BEF100 million (approximately £1.7 million) to the joint venture. The
Group sold its investment in, and loans to, TDL Belgium SA to a newly formed
company, TDL Investments BV, a wholly owned subsidiary of TDL Infomedia Limited.
The investment and loans were sold for £4.1 million, the net asset value
reflected in the Group's accounts on the date of sale. The Group has no further
funding obligations in this regard. Three directors of the Company, Mr GC List,
Ms LM Pancratz and Mr KJ Watson were also directors of TDL Belgium SA throughout
2001. Mr GC List retired on 1 February 2002.

Thomson Directories Limited recharges the Thomson Pension Fund
the costs of administration and independent advisors borne by Thomson
Directories Limited. The total amount recharged in the year to 31 December 2003
was £33,044 (2002 : £25,568).

On 14 December 2001 the Group refinanced its borrowings with a
new Multicurrency Facility agreement of £65.0 million from Sogerim S.A., a
Telecom Italia subsidiary. This facility has since been refinanced on 10
September 2002 with a new £55.0 Multicurrency Facility agreement from Telecom
Italia Finance S.A. (formerly Sogerim S.A.). On 12 August 2002 the Group also
entered into a £55.0 million Facility Agreement with Telecom Italia Finance S.A.
to finance bond repurchases. Both these facilities have since been refinanced by
two £55.0 million facilities from SEAT Pagine Gialle S.p.A.

On 17 January 2003 the Group entered into a five year
Advertising and Data Use Agreement with 118866 Limited, a subsidiary of our
parent company SEAT Pagine Gialle S.p.A, in terms of which the Group provides
118866 Limited advertising opportunities in our printed directories and supplies
data for use in their directory enquiries business.



(C)         
INTERESTS OF EXPERTS AND COUNSEL

Not applicable.



38

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ITEM
8          FINANCIAL
INFORMATION

(A)         
CONSOLIDATED STATEMENTS AND OTHER FINANCIAL INFORMATION

The Consolidated Statements required by this Item are contained
in the Financial Statements, commencing on page F-1. See Item 18.

Legal Proceedings

We are not aware of any current pending or threatened
litigation or disputed claims, arbitration or regulatory agency action against
any member of our group of companies that would materially affect its operations
or assets. We also are not aware of any circumstances which might give rise to
any such proceedings.

Dividends

The Group's ability to pay dividends is restricted under the covenants set
out in the Senior Discount Note indenture. Consequently, no dividends were
declared during 2003 (2002: Nil).



(B)         
SIGNIFICANT CHANGES

No significant change has occurred since the date of the Annual
Financial Statements included in Item 18.



ITEM
9          THE OFFER AND
LISTING

(A)         
OFFER AND LISTING DETAILS

Not applicable.

(B)         
PLAN OF DISTRIBUTION

Not applicable.

(C)         
MARKETS

Nature of trading market

On December 30 1999, we made our initial submission of the
registration Statement with the Securities and Exchange Commission with respect
to the exchange for the new Senior Subordinated Notes of all old Senior
Subordinated Notes. The Registration Statement was declared effective on
February 14, 2000. The new Senior Subordinated Notes were issued on 17 March,
2000. £69,250,000 of the old Senior Subordinated Notes were exchanged for new
Senior Subordinated Notes. As of 21 March 2000 the new Senior Subordinated Notes
were registered under the US Securities Act of 1933, as amended. The remaining
£750,000 of Senior Subordinated Notes remained unregistered. Following the
change of control of the Group on 1 August 2000 a tender offer was made to
acquire all the outstanding Notes at 101% of the principal amounts outstanding.
Acceptances were received from holders of £2,250,000 of the notes.

Following a change of control of the Group's parent company,
SEAT Pagine Gialle S.p.A, in August 2003 a tender offer was made to acquire all
the outstanding Senior Subordinated Notes at 101% of the principal amounts
outstanding. No acceptances were received.



39

---



On December 30 1999, we made our initial submission of the
registration Statement with the Securities and Exchange Commission with respect
to the exchange for the new Senior Discount Notes of all old Senior Discount
Notes. The Registration Statement was declared effective on February 14, 2000.
The new Senior Discount Notes were issued on 17 March, 2000. All of the old
Senior Discount Notes were exchanged for new Senior Discount Notes. As of 21
March 2000 the new Senior Discount Notes were registered under the US Securities
Act of 1933, as amended. Following the change of control of the Group on 1
August 2000 a tender offer was made to acquire all the outstanding Notes at 101%
of the principal amounts outstanding. No acceptances were received.

The Notes are listed in the Luxembourg Stock Exchange, and have
been accepted for clearance, directly or indirectly, through DTC, Euroclear and
Clearstream, Luxembourg. Management does not have any reliable information as to
the position of the Notes held in the U.S. or the number of record holders of
the Notes in the U.S.



(D)         
SELLING SHAREHOLDERS

Not applicable.

(E)         
DILUTION

Not applicable.

(F)         
EXPENSES OF THE ISSUE

Not applicable.



40

---



ITEM
10          ADDITIONAL
INFORMATION

(A)         
SHARE CAPITAL

Not applicable.

(B)         
MEMORANDUM AND ARTICLES OF ASSOCIATION

The objects of TDL Infomedia Holdings plc as contained in
clause 3A of its Memorandum of Association are, inter alia, to act as an
investment holding company and to co-ordinate the business of any companies in
which the Company is for the time being interested.

In accordance with its Articles of Association the Company
shall be managed by the directors who shall exercise all the powers of the
Company. The Company's directors may vote at a meeting of directors or a
committee of directors on any resolution concerning a matter in respect of which
a director has, directly or indirectly, an interest or duty. Said director must
be counted in the quorum present at a meeting when any such resolution is under
consideration and, if he votes, his vote must be counted. The directors are not
subject to retirement by rotation. No director is required to vacate his office
at any time because he has reached the age of 70 or another age. There is no
share qualification required for the appointment of a director.

The Company's authorised share capital comprises 45,000,000
ordinary shares of 1p each. All issued ordinary shares are entitled to receive
dividends declared by the Company. Any dividend which has remained unclaimed for
12 years from the date when it became due for payment shall, if the directors so
resolve, be forfeited and cease to remain owing by the company.

The voting rights attached to the Company's ordinary shares are
on a show of hands, every member who (being an individual) is present in person
or (being a corporation) is present by a duly authorised representative, not
being himself a member entitled to vote, shall have one vote for every share of
which he is the holder.

An annual general meeting and an extraordinary general meeting
called for the passing of a special resolution or an elective resolution must be
called by 21 clear days notice. All other extraordinary general meetings must be
called by at least 14 clear days notice but a general meeting may be called by
shorter notice if it is so agreed (i) in the case of an annual general meeting
or a meeting for the passing of an elective resolution, by all the members
entitled to attend and vote at that meeting; and (ii) in the case of any other
meeting, by a majority in number of the members having a right to attend and
vote.

> 

(C)         
MATERIAL CONTRACTS

Refer to Item 5 (B) "Liquidity and Capital Resources" and Item 7(B) "Related
Party Transactions" for details of all borrowing agreements and other material
contracts.



(D)         
EXCHANGE CONTROLS

There are currently no U.K. laws, decrees or regulations
affecting security holders.



41

---



(E)         
TAXATION

The following summary describes the material U.K. tax
consequences of the ownership of the Senior Discount Notes as of the date hereof
but does not purport to be comprehensive. Except where noted, it relates only to
the position of persons who are the absolute beneficial owners of their Senior
Discount Notes and may not apply to special situations, such as those of dealers
in securities. Furthermore, the discussion below is generally based upon the
provisions of the U.K. tax laws and U.K. Inland Revenue practice as of the date
hereof, and such provisions may be repealed, revoked or modified (possibly with
retrospective effect) so as to result in U.K. tax consequences different from
those discussed below. As used herein, the term "Noteholder" means any absolute
beneficial owner of the Senior Discount Notes that owns those Senior Discount
Notes as an investment.

Noteholders who are in any doubt as to their tax position
should consult their professional advisers. Persons considering the purchase,
ownership or disposition of Senior Discount Notes should consult their tax
advisers concerning U.K. tax consequences in the light of their particular
situations as well as any consequences arising under the law of any other
relevant tax jurisdiction. Noteholders who may be liable to taxation in
jurisdictions other than the United Kingdom in respect of their acquisition,
holding or disposal of the Senior Discount Notes are particularly advised to
consult their professional advisers as to whether they are so liable (and if so
under the laws of which jurisdictions), since the following comments relate only
to certain United Kingdom taxation aspects of payments in respect of the Senior
Discount Notes. In particular, Noteholders should be aware that they may be
liable to taxation under the laws of other jurisdictions in relation to payments
in respect of the Senior Discount Notes even if such payments may be made
without withholding or deduction for or on account of taxation under the laws of
the United Kingdom.

No representations with respect to the tax consequences to any
particular Noteholder of Senior Discount Notes are made. The following is a
general guide and should be treated with appropriate caution.

EU Savings Directive

On 3 June 2003 the EU Council of Economic and Finance Ministers
adopted a new directive regarding the taxation of savings income. The directive
is scheduled to be applied by Member States from 1 January 2005, provided that
certain non-EU countries adopt similar measures from the same date. Under the
directive each Member State will be required to provide to the tax authorities
of another Member State details of payments of interest or other similar income
paid by a person within its jurisdiction to an individual resident in that other
Member State; however, Austria, Belgium and Luxembourg may instead apply a
withholding system for a transitional period in relation to such payments,
deducting tax at rates rising over time to 35%. The transitional period is to
commence on the date from which the directive is to be applied by Member States
and to terminate at the end of the first full fiscal year following agreement by
certain non-EU countries to the exchange of information relating to such
payments.

U.K. Withholding Tax on Interest on the Senior Discount
Notes

|(1) | The Senior Discount Notes, which
      carry a right to interest, will constitute "quoted Eurobonds" provided
      they are and continue to be listed on a recognised stock exchange. On the
      basis of the United Kingdom Inland Revenue's published interpretation of
      the relevant legislation, securities which are listed on a stock exchange
      in a country which is a Member State of the European Union or which is
      part of the European Economic Area will satisfy this requirement if they
      are listed by a competent authority in that country and are admitted to
      trading on a recognised stock exchange in that country; securities which
      are listed on a stock exchange in any other country will satisfy this
      requirement if they are admitted to trading on a recognised stock exchange
      in that country. The Luxembourg Stock Exchange, on which the Senior
      Discount Notes are listed, is currently a recognised stock exchange for
      these purposes. Whilst the Senior Discount Notes are and continue to be
      "quoted Eurobonds", payments of interest on the Senior Discount Notes may
      be made without withholding or deduction for or on account of United
      Kingdom income tax.
|--- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              



42

---



|(2) | In all cases falling outside the
      exemption described in (1) above, interest on the Senior Discount Notes
      may be paid under deduction of United Kingdom income tax at the lower rate
      (currently 20%) subject to such relief as may be available under the
      provisions of any applicable double taxation treaty or to any other
      exemption which may apply.
|--- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

Provision of Information Obligation

Noteholders should note that where any interest on the Senior
Discount Notes is paid to them (or to any person acting on their behalf) by us
or any person in the United Kingdom acting on behalf of us (a "paying agent"),
or is received by any person in the United Kingdom acting on behalf of the
relevant Noteholder (other than solely by clearing or arranging the clearing of
a cheque) (a "collecting agent"), then we, the paying agent or the collecting
agent (as the case may be) may, in certain cases, be required to supply to the
United Kingdom Inland Revenue details of the payment and certain details
relating to the Noteholder (including the Noteholder's name and address). These
provisions will apply whether or not the interest has been paid subject to
withholding or deduction for or on account of United Kingdom income tax and
whether or not the Noteholder is resident in the United Kingdom for United
Kingdom taxation purposes. Where the Noteholder is not so resident, the details
provided to the United Kingdom Inland Revenue may, in certain circumstances, be
passed by the United Kingdom Inland Revenue to the tax authorities of the
jurisdiction in which the Noteholder is resident for taxation purposes.

The provisions referred to above also apply, in certain
circumstances, to payments made on redemption of any Senior Discount Notes where
the amount payable on redemption is greater than the issue price of the Senior
Discount Notes.

Tax on Interest Payments

Interest and any element of discount or premium on the Senior
Discount Notes constitutes U.K. source income for U.K. tax purposes and, as
such, may be subject to U.K. tax by direct assessment even where paid without
withholding. However, interest, discount or premium with a U.K. source received
without deduction or withholding on account of U.K. tax will not be chargeable
to U.K. tax in the hands of a Noteholder who is not resident for tax purposes in
the United Kingdom unless that Noteholder carries on a trade, profession or
vocation in the United Kingdom through a branch, agency or permanent
establishment in connection with which the interest is received or to which the
Senior Discount Notes are attributable. There are exemptions for interest
received by some categories of agent, such as some brokers and investment
managers.

General

Any discount element on the Senior Discount Notes will not, in
general, be subject to any United Kingdom withholding tax pursuant to the
provisions mentioned in the sections relating to withholding tax above, but may
be subject to reporting requirements as outlined above. Where a premium is
payable on redemption of the Senior Discount Notes, as opposed to the Senior
Discount Notes being issued at a discount then any such element of premium may
constitute a payment of interest. Payments of interest are subject to U.K.
withholding tax and reporting requirements as outlined above.

In general, references to "interest" mean "interest" as
understood in U.K. tax law. The statements contained in this section "United
Kingdom Taxation" do not take account of any different definitions of "interest"
or "principal" which may prevail under any other law or which may be created by
the terms and conditions of the Senior Discount Notes or any related
documentation.

Where interest has been paid under deduction of United Kingdom
income tax, Noteholders who are not resident in the United Kingdom may be able
to recover all or part of the tax deducted if there is an appropriate provision
in any double taxation treaty.

The above description of the United Kingdom withholding tax
position assumes that there will be no substitution of an issuer and does not
consider the tax consequences of any such substitution.



43

---



Ownership and Disposal, including Redemption, by U.K.
Corporation Tax Payers

In general, Noteholders which are within the charge to U.K.
corporation tax will be charged to tax on all returns on and fluctuations in
value of the Senior Discount Notes broadly in accordance with their statutory
accounting treatment so long as the accounting treatment is in accordance with a
mark-to-market basis or an accruals basis which is authorised for tax purposes.
Such Noteholders will generally be charged to tax in each accounting period by
reference to interest accrued in that period and any profit or loss which, in
accordance with such Noteholders' authorised accounting method, is applicable to
that period.

Ownership and Disposal, including Redemption, by other U.K. Tax
Payers

In relation to ownership of the Senior Discount Notes,
reference should be made to the paragraphs "Tax on Interest Payments" above.

The Senior Discount Notes will be "relevant discounted
securities" for the purposes of U.K. legislation and any profit on transfer
(including redemption, sale, exchange or gift) of the Senior Discount Notes will
be taxed as income in the hands of a Noteholder liable to U.K. income tax, or,
if it gives rise to a loss, will entitle the non-corporate Noteholder to relief
from income tax in respect of that loss, when the note is redeemed or
transferred. An exchange of notes pursuant to an Exchange Offer may be
considered to be a transfer for these purposes. The Senior Discount Notes will
also constitute "qualifying corporate bonds" within the meaning of section 117
of the Taxation of Chargeable Gains Act 1992 and therefore a disposal by a
Noteholder will not give rise to a chargeable gain or an allowable loss for the
purposes of the U.K. taxation of chargeable gains. The Accrued Income Scheme
does not apply to relevant discounted securities.

Stamp Duty and Stamp Duty Reserve Tax

No U.K. ad valorem stamp duty or stamp duty reserve tax is
payable on the issue or the transfer by delivery of the Global Note.

> 

(F)         
DIVIDENDS AND PAYING AGENT

Not applicable.



(G)         
STATEMENTS BY EXPERTS

Not applicable.



(H)         
DOCUMENTS ON DISPLAY

Publicly available documents concerning the Company may be
inspected at the Securities and Exchange Commission's Public Reference Room, 450
Fifth Street, NW, Room 1024, Washington, DC 20549.



(I)         
SUSIDIARY INFORMATION

Not applicable.



44

---



ITEM
11          QUANTITATIVE AND
QUALITATIVE DISCLOSURES ABOUT MARKET RISK

The following table summarises the expected maturity date and
fair value of our outstanding financial instruments at 31 December 2003.



|                                         | Expected Maturity Date of Financial
      Instruments(excluding accrued interest) |      | 2003
|---------------------------------------- | --------------------------------------------------------------------------------- | ---- | ----
|                                         |                                                                                   |      |     
|                                         | 2003                                                                              | 2004 | 2005
|                                         | £'000                                                                             |      |     
|Variable rate borrowings                 |                                                                                   |      |     
|Sterling                                 | 15,444                                                                            | -    | -   
|Weighted average interest rate           |                                                                                   |      |     
|                                         |                                                                                   |      |     
|Fixed rate borrowings                    |                                                                                   |      |     
|Sterling                                 | -                                                                                 | -    | -   
|Weighted average interest rate           |                                                                                   |      |     
|US Dollars                               | -                                                                                 | -    | -   
|Effective weighted average interest rate |                                                                                   |      |     
|                                         |                                                                                   |      |     



Exchange risk management

The Group raised part of its high yield debt denominated in US
dollars. The principal amount of the US dollar debt raised was US $87.36
million, but it was issued on 13 October 1999 at 47.366% of the principal
amount. The debt accretes value at 15.5% p.a. for five years after which
interest is payable. The principal value, including value accreted to 15 October
2004, is repayable on 15 October 2010. The value of this instrument had reached
$57.2 million, translated to £39.4 million, at 31 December 2001. During 2002,
the Group repurchased 86.2% of these bonds. Consequently, at 31 December 2002
the value of this instrument was US $9.2 million translated to £5.7 million. A
further 0.9% of the bonds were repurchased in 2003. Consequently, at 31 December
2003 the value of this instrument was US $9.9 million translated to £5.5
million.

The directors introduced partial currency hedging for this
instrument in March 2002. From April 2002 to December 2003 hedging covered
between 95% and 100% of the US dollar exposure.

Interest rate risk management

We finance our operations through a combination of subsidiary
profits, long-term loans, high yield debt finance and bank borrowings. The
directors aim to minimise exposure to fluctuating interest rates along with the
potential impact on liquidity by holding borrowings on both fixed and floating
interest rates.

The Group raised high yield debt at fixed rates during 1999.
The debt was raised in the form of Sterling and US Dollar bonds. The Sterling
bonds were issued for £70 million, 96.8% of which were still outstanding at 31
December 2002. The Dollar bonds had a face value of $87.36 million issued at
47.366% of face value and accreting for 5 years to attain the face value. The
Group repurchased 86.2% of these Dollar bonds during 2002 and a further 0.9% in
2003 using a new variable rate loan facility negotiated by the central treasury
operation of Telecom Italia S.p.A. This variable rate loan facility has since
been refinanced by a similar facility from SEAT Pagine Gialle S.p.A. The Group
has also raised long term loans using both fixed and variable instruments.

At 31 December 2003 55.6% (2002: 52.2%) of the Group's
borrowings were at fixed rates.



45

---



Liquidity risk

The Group policy is to ensure that it maintains continuous
sources of funding with at least 50% of its borrowings maturing after more than
five years. At 31 December 2003 88.3% (2002: 81.9%) of the Group's borrowings
were due to mature in more than 5 years.

Concentration of Credit risk

The majority of our turnover is derived from selling
advertising to small to medium-sized businesses, although we do have several
larger national customers. Our accounts receivable balance of £21.5 million at
31 December 2003 (2002: £18.7 million) is comprised of many small balances. No
one customer comprised more than 10% of our annual sales during each of the
three years ended 31 December 2003 or more than 5% of our accounts receivables
balances at 31 December 2002 and 2003. In the ordinary course of our business we
extend credit to these customers for advertising purchases. Our advertising
sales are concentrated in the South East regions of the United Kingdom. If there
was an economic downturn in the South East regions of the United Kingdom or the
other local economies of the communities we serve, our ability to collect
amounts due to us may be adversely affected.



ITEM
12          DESCRIPTION OF
SECURITIES OTHER THAN EQUITY SECURITIES

Not applicable.



PART II



ITEM
13          DEFAULTS, DIVIDEND
ARREARAGES AND DELINQUENCIES

None.



ITEM
14          MATERIAL MODIFICATION
TO THE RIGHTS OF SECURITY HOLDERS AND USE OF PROCEEDS

None.



ITEM
15          CONTROLS AND
PROCEDURES

The board of directors has overall responsibility for reviewing
our financial reporting procedures and internal controls to ensure full and
accurate disclosure of our financial position. We carried out an evaluation,
under the supervision and with the participation of our chief executive officer
and chief financial officer, of the effectiveness of the design and operation of
our internal controls and procedures as of the end of the period covered by this
report. Based on this evaluation, our chief executive officer and chief
financial officer have concluded that our disclosure controls and procedures are
effective in timely alerting them to material information required to be
included in our periodic reports to the SEC. In addition, we reviewed our
internal controls and there have been no significant changes in our internal
controls or in other factors that could significantly affect those controls
subsequent to the date of the last evaluation. Although we believe our
pre-existing disclosure controls and procedures and internal controls were
adequate to enable us to comply with our disclosure obligations, as a result of
such review we intend to implement changes, primarily to formalize and document
procedures already in place. You should note that the design and operation of
any system of controls and procedures is based in part upon certain assumptions
about the likelihood of future events, and there can be no assurance that any
design will succeed in achieving its stated goals under all potential future
conditions, regardless of how remote.



46

---



ITEM
16          RESERVED



ITEM
16A        AUDIT COMMITTEE FINANCIAL
EXPERT

The Company does not have a separate audit or remuneration
committee, consequently the full board of directors fulfills these functions.
Our chief financial officer, Kevin Watson, is determined to be the Company's
audit committee financial expert.



ITEM
16B        CODE OF ETHICS

We have not yet adopted a "code of ethics" as that term is
defined in the rules promulgated under the Sarbanes-Oxley Act, however we intend
to adopt such a code prior to our next financial year end reporting date of 31
December 2004.



ITEM
16C        PRINCIPAL ACCOUNTANT FEES AND
SERVICES

During 2002 and 2003 we paid the following amounts to our
auditors, Ernst & Young LLP, for audit services and tax services:

2002£'000
    2003£'000Audit fees
    66
    98Tax fees
    5
    -Total
    71
    98




ITEM
16D        EXEMPTIONS FROM THE LISTING
STANDARDS FOR AUDIT COMMITTEES

Not applicable.



ITEM
16E        PURCHASES OF EQUITY SECURITIES BY
THE ISSUER AND AFFILIATEDPURCHASERS

Not applicable.



47

---



PART III

ITEM
17          FINANCIAL
STATEMENTS

The Company has responded to Item 18 in lieu of this item.



ITEM
18          FINANCIAL
STATEMENTS

The following financial statements together with the report of Ernst &
Young LLP thereon are filed as part of the annual report:

|Report of Independent
      Auditors.                                                           | F-1
|----------------------------------------------------------------------------------------------- | ---
|Consolidated profit and loss
      accounts for the years ended 31 December 2001, 2002 and 2003 | F-2
|Consolidated balance sheets at 31
      December 2002 and 2003                                  | F-3
|Consolidated cash flow statements
      for the years ended 31 December 2001, 2002 and 2003     | F-4
|Notes to the accounts                                                                           | F-5



ITEM
19         
EXHIBITS

|Number | Description                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
|------ | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|       |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      
|1.1    | Memorandum and Articles of Association of TDL Infomedia Holdings plc.
      (1)                                                                                                                                                                                                                                                                                                                                                                                                                                      
|       |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      
|2(c).1 | Indenture, dated 13 October 1999, between TDL Infomedia Group plc, as
      issuer, and The Bank of New York, as trustee, relating to the 12 1/8%
      Senior Subordinated Notes due 2009. (1)                                                                                                                                                                                                                                                                                                                      
|       |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      
|2(c).2 | Indenture, dated 13 October 1999, between TDL Infomedia Holdings plc,
      as issuer, and The Bank of New York, as trustee, relating to the 151⁄2%
      Senior Discount Notes due 2010.(1)                                                                                                                                                                                                                                                                                                                           
|       |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      
|2(c).3 | Registration Rights Agreement, dated 13 October 1999, between TDL
      Infomedia Group plc and CIBC World Markets plc, relating to the 12 1/8%
      Senior Subordinated Notes due 2009.(1)                                                                                                                                                                                                                                                                                                                         
|       |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      
|2(c).4 | Registration Rights Agreement, dated 13 October 1999, between TDL
      Infomedia Holdings plc and CIBC World Markets plc, relating to the 151⁄2%
      Senior Subordinated Notes due 2010.(1)                                                                                                                                                                                                                                                                                                                         
|       |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      
|2(c).5 | Note Depositary Agreement, dated 13 October 1999, between TDL Infomedia
      Group plc and The Bank of New York, relating to the 12 1/8% Senior
      Subordinated Notes due 2009.(1)                                                                                                                                                                                                                                                                                                                               
|       |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      
|2(c).6 | Note Depositary Agreement, dated 13 October 1999, between TDL Infomedia
      Holdings plc and The Bank of New York, relating to the 151⁄2% Senior
      Discount Notes due 2010.(1)                                                                                                                                                                                                                                                                                                                                   
|       |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      
|4(a).1 | Sale and Purchase Agreement, dated 30 July 1999, among the Vendors, TDL
      Infomedia Group plc, TDL Infomedia Finance Limited, GM LLC and others
      relating to the sale and purchase of the issued share capital of TDL Group
      Limited.(1)                                                                                                                                                                                                                                                               
|       |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      
|4(a).2 | Facility Agreement, dated 30 July 1999, in relation to a £35,000,000
      Term Loan A Facility, a £20,000,000 Term Loan B Facility and a £10,000,000
      Revolving Credit Facility among TDL Infomedia Limited, TDL Infomedia
      Finance Limited, TDL Infomedia Holdings Limited (now known as TDL
      Infomedia Holdings plc), TDL Infomedia Group Limited (now known as TDL
      Infomedia Group plc), TDL Group Limited, Thomson Directories Limited, CIBC
      World Markets plc and BankBoston N.A.(1)



48

---



Item 19 Exhibits - continued

|Number  | Description                                                                                                                                                                                                                                                     
|------- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|        |                                                                                                                                                                                                                                                                 
|4(a).3  | Multicurrency Facility Agreement dated 10 September 2001, in relation
      to a £65 million revolving credit facility among TDL Infomedia Limited,
      TDL Infomedia Group plc, TDL Group Limited, Thomson Directories Limited
      and Sogerim S.A.(2)     
|        |                                                                                                                                                                                                                                                                 
|4(a).4  | Multicurrency Facility Agreement dated 10 September 2002, in relation
      to a £55 million revolving credit facility among TDL Infomedia Limited,
      TDL Infomedia Group plc, TDL Group Limited, Thomson Directories Limited
      and Sogerim S.A. (3)    
|        |                                                                                                                                                                                                                                                                 
|4(a).5  | Multicurrency Facility Agreement dated 23 July 2003, in relation to a
      £55 million revolving credit facility among TDL Infomedia Limited, TDL
      Infomedia Group plc, TDL Group Limited, Thomson Directories Limited and
      SEAT Pagine Gialle S.p.A.
|        |                                                                                                                                                                                                                                                                 
|4(a).6  | Facility Agreement dated 12 August 2002, in relation to a £55 million
      credit facility among TDL Infomedia Limited, TDL Infomedia Holdings plc
      and Sogerim S.A. (3)                                                                                  
|        |                                                                                                                                                                                                                                                                 
|4(a).7  | Facility Agreement dated 23 July 2003, in relation to a £55 million
      credit facility among TDL Infomedia Limited, TDL Infomedia Holdings plc
      and SEAT Pagine Gialle S.p.A.                                                                           
|        |                                                                                                                                                                                                                                                                 
|4(a).8  | Business Customer Database Licence Agreement dated 27 October 1994,
      between British Telecommunications plc and Thomson Directories
      Limited.(1)                                                                                                      
|        |                                                                                                                                                                                                                                                                 
|4(a).9  | Directory Information Licence Agreement dated 1 January 2001, between
      British Telecommunications plc and Thomson Directories Limited.(2)                                                                                                                  
|        |                                                                                                                                                                                                                                                                 
|4(a).10 | Share Purchase Agreement dated 30 March 2001, in relation to the sale
      of shares in TDL Belgium S.A. and Indirect Sprl S.A. to Maracana Holdings
      B.V.(2)                                                                                             
|        |                                                                                                                                                                                                                                                                 
|4(a).11 | Assignment and Assumption Agreement dated 30 March 2001, in relation to
      the assignment of loans to TDL Belgium S.A. to Maracana Holdings B.V.(2)                                                                                                          
|        |                                                                                                                                                                                                                                                                 
|8.1     | List of subsidiaries of TDL Infomedia Holdings plc.(1)                                                                                                                                                                                                          
|        |                                                                                                                                                                                                                                                                 
|12.1    | Certification by Chief Executive Officer                                                                                                                                                                                                                        
|        |                                                                                                                                                                                                                                                                 
|12.2    | Certification by Chief Financial Officer                                                                                                                                                                                                                        
|        |                                                                                                                                                                                                                                                                 
|13.1    | Certification by Chief Executive Officer pursuant to 18 U.S.C Section
      1350                                                                                                                                                                                



(1)



49

---



> SIGNATURES

The registrant hereby certifies that it meets all of the requirements for
filing on Form 20-F and that it has duly caused and authorised the undersigned
to sign this annual report on its behalf.

TDL Infomedia Holdings
      plcRegistrantDate: 23 March 2004By: /s/ KJ WatsonName:
      KJ WatsonTitle: Chief Financial
Officer




50

---



EXHIBIT INDEX

|Number | Description                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           | Sequentially numbered page
|------ | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- | --------------------------
|1.1    | Memorandum and Articles of Association of TDL Infomedia Holdings
      plc.(1)                                                                                                                                                                                                                                                                                                                                                                                                                                        | n/a                       
|2(c).1 | Indenture, dated 13 October 1999, between TDL Infomedia Group plc, as
      issuer, and The Bank of New York, as trustee, relating to the 12 1/8%
      Senior Subordinated Notes due 2009.(1)                                                                                                                                                                                                                                                                                                                        | n/a                       
|2(c).2 | Indenture, dated 13 October 1999, between TDL Infomedia Holdings plc,
      as issuer, and The Bank of New York, as trustee, relating to the 151⁄2%
      Senior Discount Notes due 2010.(1)                                                                                                                                                                                                                                                                                                                            | n/a                       
|2(c).3 | Registration Rights Agreement, dated 13 October 1999, between TDL
      Infomedia Group plc and CIBC World Markets plc, relating to the 12 1/8%
      Senior Subordinated Notes due 2009.(1)                                                                                                                                                                                                                                                                                                                          | n/a                       
|2(c).4 | Registration Rights Agreement, dated 13 October 1999, between TDL
      Infomedia Holdings plc and CIBC World Markets plc, relating to the 151⁄2%
      Senior Subordinated Notes due 2010.(1)                                                                                                                                                                                                                                                                                                                          | n/a                       
|2(c).5 | Note Depositary Agreement, dated 13 October 1999, between TDL Infomedia
      Group plc and The Bank of New York, relating to the 12 1/8% Senior
      Subordinated Notes due 2009.(1)                                                                                                                                                                                                                                                                                                                                | n/a                       
|2(c).6 | Note Depositary Agreement, dated 13 October 1999, between TDL Infomedia
      Holdings plc and The Bank of New York, relating to the 151⁄2% Senior
      Discount Notes due 2010.(1)                                                                                                                                                                                                                                                                                                                                    | n/a                       
|4(a).1 | Sale and Purchase Agreement, dated 30 July 1999, among the Vendors, TDL
      Infomedia Group plc, TDL Infomedia Finance Limited, GM LLC and others
      relating to the sale and purchase of the issued share capital of TDL Group
      Limited.(1)                                                                                                                                                                                                                                                                | n/a                       
|4(a).2 | Facility Agreement, dated 30 July 1999, in relation to a £35,000,000
      Term Loan A Facility, a £20,000,000 Term Loan B Facility and a £10,000,000
      Revolving Credit Facility among TDL Infomedia Limited, TDL Infomedia
      Finance Limited, TDL Infomedia Holdings Limited (now known as TDL
      Infomedia Holdings plc), TDL Infomedia Group Limited (now known as TDL
      Infomedia Group plc), TDL Group Limited, Thomson Directories Limited, CIBC
      World Markets plc and BankBoston N.A.(1) | n/a                       
|4(a).3 | Multicurrency Facility Agreement dated 10 September 2001, in relation
      to a £65 million revolving credit facility among TDL Infomedia Limited,
      TDL Infomedia Group plc, TDL Group Limited, Thomson Directories Limited
      and Sogerim S.A. (2)                                                                                                                                                                                                                                                          | n/a                       
|4(a).4 | Multicurrency Facility Agreement dated 10 September 2002, in relation
      to a £55 million revolving credit facility among TDL Infomedia Limited,
      TDL Infomedia Group plc, TDL Group Limited, Thomson Directories Limited
      and Sogerim S.A. (3)                                                                                                                                                                                                                                                          | n/a                       
|4(a).5 | Multicurrency Facility Agreement dated 23 July 2003, in relation to a
      £55 million revolving credit facility among TDL Infomedia Limited, TDL
      Infomedia Group plc, TDL Group Limited, Thomson Directories Limited and
      SEAT Pagine Gialle S.p.A.                                                                                                                                                                                                                                                      |                           



51

---



EXHIBIT INDEX - continued

|Number  | Description                                                                                                                                                                           | Sequentially numbered page
|------- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- | --------------------------
|4(a).6  | Facility Agreement dated 12 August 2002, in relation to a £55 million
      credit facility among TDL Infomedia Limited, TDL Infomedia Holdings plc
      and Sogerim S.A. (3)        | n/a                       
|4(a).7  | Facility Agreement dated 23 July 2003, in relation to a £55 million
      credit facility among TDL Infomedia Limited, TDL Infomedia Holdings plc
      and SEAT Pagine Gialle S.p.A. |                           
|4(a).8  | Business Customer Database Licence Agreement dated 27 October 1994,
      between British Telecommunications plc and Thomson Directories
      Limited.(1)                            | n/a                       
|4(a).9  | Directory Information Licence Agreement dated 1 January 2001, between
      British Telecommunications plc and Thomson Directories Limited.(2)                                        | n/a                       
|4(a).10 | Share Purchase Agreement dated 30 March 2001, in relation to the sale
      of shares in TDL Belgium S.A. and Indirect Sprl S.A. to Maracana Holdings
      B.V.(2)                   | n/a                       
|4(a).11 | Assignment and Assumption Agreement dated 30 March 2001, in relation to
      the assignment of loans to TDL Belgium S.A. to Maracana Holdings B.V.(2)                                | n/a                       
|8.1     | List of subsidiaries of TDL Infomedia Holdings plc.(1)                                                                                                                                | n/a                       
|12.1    | Certification by Chief Executive Officer                                                                                                                                              |                           
|12.2    | Certification by Chief Financial Officer                                                                                                                                              |                           
|13.1    | Certification by Chief Executive Officer pursuant to 18 U.S.C Section
      1350                                                                                                      |                           



(1)

52

---



REPORT OF INDEPENDENT AUDITORS



To the Board of Directors of TDL Infomedia Holdings plc

We have audited the accompanying consolidated balance sheets of
TDL Infomedia Holdings plc as of 31 December 2003 and 2002 and the related
consolidated profit and loss accounts and consolidated cash flow statements for
each of the three years in the period ended 31 December 2003. Our responsibility
is to express an opinion on these financial statements based on our audits.

We conducted our audits in accordance with United Kingdom
auditing standards and United States generally accepted auditing standards.
Those standards require that we plan and perform the audit to obtain reasonable
assurance about whether the financial statements are free from material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statement. An audit also includes
assessing the accounting principles used and significant estimates made by the
management, as well as evaluating the overall financial statement presentation.
We believe that our audits provide a reasonable basis for our opinion.

In our opinion, the consolidated financial statements referred
to above present fairly, in all material respects, the consolidated financial
position of TDL Infomedia Holdings plc at 31 December 2003 and 2002 and the
consolidated results of its operations and its consolidated cash flows for each
of the three years in the period ended 31 December 2003 in conformity with
accounting principles generally accepted in the United Kingdom which differ in
certain respects from those followed in the United States (see Note 30 of Notes
to the Financial Statements).







/s/ Ernst & Young LLP

ERNST & YOUNG LLPSouthampton, England

2 March 2004



F-1

---



TDL INFOMEDIA HOLDINGS PLCCONSOLIDATED PROFIT AND LOSS
ACCOUNTS



|                                                     | Notes | Yearended31 December2001 | Yearended31 December2002 | YearEnded31 December2003
|---------------------------------------------------- | ----- | ------------------------ | ------------------------ | ------------------------
|                                                     |       | £'000                    | £'000                    | £'000                   
|                                                     |       |                          |                          |                         
|Turnover (incl. share of joint ventures)             |       | 93,461                   | 96,945                   | 104,125                 
|Less: share of joint venture turnover                |       | (324)                    | -                        | -                       
|Turnover                                             | 2     | 93,137                   | 96,945                   | 104,125                 
|Cost of sales                                        |       | (40,052)                 | (39,576)                 | (43,103)                
|Gross profit                                         |       | 53,085                   | 57,369                   | 61,022                  
|Net operating expenses                               | 3     | (41,924)                 | (43,535)                 | (46,800)                
|Group operating profit                               | 4     | 11,161                   | 13,834                   | 14,222                  
|Share of loss in joint venture                       |       | (636)                    | -                        | -                       
|Total operating profit                               |       | 10,525                   | 13,834                   | 14,222                  
|Interest receivable and similar income               | 7     | 163                      | 43                       | 34                      
|Interest payable and similar charges                 | 8     | (18,731)                 | (24,341)                 | (13,677)                
|(Loss)/profit on ordinary activities before taxation |       | (8,043)                  | (10,464)                 | 579                     
|Taxation on loss on ordinary activities              | 9     | (2,205)                  | (1,328)                  | (3,811)                 
|Loss for the financial year                          |       | (10,248)                 | (11,792)                 | (3,232)                 



There were no recognised gains or losses other than those shown above.

A summary of the significant adjustments to loss for the financial year that
would be required had United States generally accepted accounting principles
been applied instead of those generally accepted in the United Kingdom is set
out in Note 30 of Notes to the Financial Statements.











The accompanying notes form an integral part of these Financial
Statements.



F-2

---



TDL INFOMEDIA HOLDINGS PLCCONSOLIDATED BALANCE
SHEETS

|                                               |       | 31 December | 31 December
|---------------------------------------------- | ----- | ----------- | -----------
|                                               | Notes | 2002        | 2003       
|                                               |       | £'000       | £'000      
|                                               |       |             |            
|Fixed assets                                   |       |             |            
|Intangible assets                              | 10    | 163,632     | 149,508    
|Tangible assets                                | 11    | 12,488      | 11,316     
|                                               |       |             |            
|Current assets                                 |       |             |            
|Stocks                                         | 12    | 8,130       | 8,295      
|Debtors:                                       |       |             |            
|amounts falling due within one
      year      | 13    | 22,426      | 27,148     
|after one year                                 | 13    | 189         | 163        
|Cash at bank and in hand                       |       | 1,496       | 7,586      
|                                               |       | 32,241      | 43,192     
|Creditors: amounts falling due within one year | 14    | (52,241)    | (48,023)   
|Net current liabilities                        |       | (20,000)    | (4,831)    
|Total assets less current liabilities          |       | 156,120     | 155,993    
|Creditors: amounts falling due after one year  | 15    | (117,555)   | (120,700)  
|Provisions for liabilities and charges         | 18    | (120)       | (80)       
|Net assets                                     |       | 38,445      | 35,213     
|                                               |       |             |            
|Capital and reserves                           |       |             |            
|Called up share capital                        | 20    | 397         | 397        
|Share premium account                          | 20    | 39,315      | 39,315     
|Other reserves                                 | 21    | 40,000      | 40,000     
|Profit and loss account                        | 22    | (41,267)    | (44,499)   
|Total equity shareholder's
      funds         | 23    | 38,445      | 35,213     





A summary of the significant adjustments to total equity
shareholder's funds that would be required had United States generally accepted
accounting principles been applied instead of those generally accepted in the
United Kingdom is set out in Note 30 of Notes to the Financial Statements.











The accompanying notes form an integral part of these Financial
Statements.



F-3

---



TDL INFOMEDIA HOLDINGS PLCCONSOLIDATED CASH FLOW
STATEMENTS



|                                                                           | Notes tocash
      flowstatement | Yearended31December2001 | Yearended31December2002 | YearEnded31December2003
|-------------------------------------------------------------------------- | -------------------------------- | ----------------------- | ----------------------- | -----------------------
|                                                                           |                                  | £'000                   | £'000                   | £'000                  
|Net cash inflow from operating activities                                  | 1                                | 30,564                  | 28,765                  | 29,212                 
|Returns on investments and servicing of finance                            |                                  |                         |                         |                        
|Interest received                                                          |                                  | 159                     | 43                      | 37                     
|Interest paid                                                              |                                  | (11,271)                | (9,655)                 | (10,372)               
|Costs associated with the servicing of
      finance                       |                                  | -                       | (35)                    | (95)                   
|Net cash outflow from returns on investment and servicing of
      finance |                                  | (11,112)                | (9,647)                 | (10,430)               
|Tax paid                                                                   |                                  | (690)                   | (2,712)                 | (2,540)                
|Capital expenditure and financial investments                              |                                  |                         |                         |                        
|Payments to acquire tangible fixed
      assets                            |                                  | (11,577)                | (1,710)                 | (1,202)                
|Receipts from sales of tangible
      fixed assets                         |                                  | 31                      | -                       | 51                     
|Net cash outflow for capital expenditure and financial
      investments   |                                  | (11,546)                | (1,710)                 | (1,151)                
|Acquisitions and disposals                                                 |                                  |                         |                         |                        
|Net cash received for sale of loans and investment in joint
      venture  |                                  | 807                     | -                       | -                      
|Net cash inflow for acquisitions and disposals                             |                                  | 807                     | -                       | -                      
|Net cash inflow before financing and management of liquid
      resources  |                                  | 8,023                   | 14,696                  | 15,091                 
|Financing                                                                  |                                  |                         |                         |                        
|(Decrease)/increase in borrowings                                          |                                  |                         |                         |                        
|long term loans repaid                                                     |                                  | -                       | (4,264)                 | (398)                  
|short term loans and debentures
      repaid                               |                                  | (15,000)                | (13,500)                | (10,102)               
|costs associated with the repayment of
      debt                          |                                  | (60)                    | (345)                   | (339)                  
|Group undertakings                                                         |                                  | 481                     | 3,232                   | 1,838                  
|Net cash (outflow)/inflow for financing                                    |                                  | (14,579)                | (14,877)                | (9,001)                
|                                                                           |                                  |                         |                         |                        
|(Decrease)/increase in cash                                                | 2,3                              | (6,556)                 | (181)                   | 6,090                  



The significant differences between the cash flow statements
presented above and those required under United States generally accepted
accounting principles are described in Note 30 of Notes to the Financial
Statements.



The accompanying notes form an integral part of these Financial
Statements.



F-4

---

TDL INFOMEDIA HOLDINGS PLCCONSOLIDATED CASH FLOW STATEMENTSNOTES TO
THE CASH FLOW STATEMENTS

1.     RECONCILIATION OF OPERATING PROFIT TO OPERATING
CASH FLOWS

> 

|                                          | Yearended31
    December2001 | Yearended31
    December2002 | YearEnded31
    December2003
|----------------------------------------- | ---------------------------- | ---------------------------- | ----------------------------
|                                          | £'000                        | £'000                        | £'000                       
|                                          |                              |                              |                             
|Total operating profit                    | 10,525                       | 13,834                       | 14,222                      
|Depreciation charge                       | 2,335                        | 2,459                        | 2,321                       
|Amortisation                              | 14,126                       | 14,124                       | 14,124                      
|Share of joint venture losses             | 636                          | -                            | -                           
|Increase in stock and work in progress    | (1,479)                      | (265)                        | (165)                       
|Decrease/(increase) in debtors (1)        | 3,961                        | 513                          | (5,054)                     
|(Decrease)/increase in creditors          | (450)                        | (888)                        | 3,766                       
|Increase/(decrease) in group liabilities  | 910                          | (1,012)                      | (2)                         
|Net cash inflow from operating activities | 30,564                       | 28,765                       | 29,212                      



(1) The 2001 decrease in debtors includes the sale of loans to
TDL Belgium S.A. - see note 19.





2.     ANALYSIS OF NET DEBT

|                               | At 31December2002 | Cashflows | Other
non-cash charges | Foreignexchangelosses | At 31December2003
|------------------------------ | ----------------- | --------- | ---------------------- | --------------------- | -----------------
|                               | £'000             | £'000     | £'000                  | £'000                 | £'000            
|Cash in hand                   | 1,496             | 6,090     | -                      | -                     | 7,586            
|Debt due in less than one year | (27,369)          | 11,109    | (31)                   | -                     | (16,291)         
|Debt due after one year        | (113,185)         | (819)     | (335)                  | (153)                 | (114,492)        
|Total net debt                 | (139,058)         | 16,380    | (366)                  | (153)                 | (123,197)        
|                               |                   |           |                        |                       |                  

|                               | At 31December2001 | Cashflows | Other
non-cash charges | Foreignexchangelosses | At 31December2002
|------------------------------ | ----------------- | --------- | ---------------------- | --------------------- | -----------------
|                               | £'000             | £'000     | £'000                  | £'000                 | £'000            
|Cash in hand                   | 1,677             | (181)     | -                      | -                     | 1,496            
|Debt due in less than one year | (40,233)          | 13,008    | (144)                  | -                     | (27,369)         
|Debt due after one year        | (103,809)         | (6,974)   | (1,118)                | (1,284)               | (113,185)        
|Total net debt                 | (142,365)         | 5,853     | (1,262)                | (1,284)               | (139,058)        
|                               |                   |           |                        |                       |                  

|                               | At 31December2000 | Cashflows | Other
non-cash charges | Foreignexchangelosses | At 31December2001
|------------------------------ | ----------------- | --------- | ---------------------- | --------------------- | -----------------
|                               | £'000             | £'000     | £'000                  | £'000                 | £'000            
|Cash in hand                   | 8,233             | (6,556)   | -                      | -                     | 1,677            
|Debt due in less than one year | (54,797)          | 14,378    | 186                    | -                     | (40,233)         
|Debt due after one year        | (96,941)          | (5,459)   | (495)                  | (914)                 | (103,809)        
|Total net debt                 | (143,505)         | 2,363     | (309)                  | (914)                 | (142,365)        



F-5

---



TDL INFOMEDIA HOLDINGS PLCCONSOLIDATED CASH FLOW
STATEMENTSNOTES TO THE CASH FLOW STATEMENTS



3.     RECONCILIATION OF NET CASH FLOW TO MOVEMENT IN NET
DEBT

|                                             | Yearended31 December2001 | Yearended31 December2002 | YearEnded31
  December2003
|-------------------------------------------- | ------------------------ | ------------------------ | --------------------------
|                                             | £'000                    | £'000                    | £'000                     
|(Decrease)/increase in cash in the period    | (6,556)                  | (181)                    | 6,090                     
|Cash outflow from decrease in net debt       | 8,919                    | 6,034                    | 10,290                    
|Change in net debt resulting from cash flows | 2,363                    | 5,853                    | 16,380                    
|Foreign exchange losses                      | (914)                    | (1,284)                  | (153)                     
|Amortisation of debt issue costs             | (309)                    | (1,262)                  | (366)                     
|Movement in net debt in the period           | 1,140                    | 3,307                    | 15,861                    
|Net debt at start of period                  | (143,505)                | (142,365)                | (139,058)                 
|Net debt at end of period                    | (142,365)                | (139,058)                | (123,197)                 



F-6

---



TDL INFOMEDIA HOLDINGS PLCNOTES TO THE FINANCIAL
STATEMENTS

1.     ACCOUNTING POLICIES

These financial statements comprise the accounts of TDL
Infomedia Holdings plc, a holding company and its direct and indirect wholly
owned subsidiaries, TDL Infomedia Group plc, TDL Group Limited and Thomson
Directories Limited, (together the ''Group''). The Group publishes classified
directories in the United Kingdom and earns revenues and commissions on
advertisements contained in such directories. A summary of the principal
accounting policies, all of which have been applied consistently, is set out
below:



a.     Accounting convention

The financial statements have been prepared under the
historical cost convention and in accordance with applicable U.K. accounting
standards. Accounting principles generally accepted in the U.K. differ in
certain significant respects from accounting principles generally accepted in
the U.S. The application of the latter would have affected the determination of
profit, cash flows and shareholder's equity, as detailed in Note 30.



b.     Use of estimates

The preparation of consolidated financial statements require
management to make estimates and assumptions about future events that affect the
reporting and disclosure of assets and liabilities at the balance sheet dates
and the reported amounts of revenues and expense during the period covered by
the consolidated financial statements. In the event estimates and/or assumptions
prove to be different from actual amounts, adjustments are made in subsequent
periods to reflect more current information.



c.     Basis of consolidation

The Group financial statements consolidate the
financial statements for TDL Infomedia Holdings plc and its direct and indirect
wholly owned subsidiary undertakings, TDL Infomedia Group plc, TDL Group Limited
and Thomson Directories Limited.

Where a subsidiary is acquired by the issue of the share
capital the investment is shown in the accounts of the holding company at the
fair value of the shares issued less any provision for permanent diminution in
value.

The Group's share of net profit or loss of the joint venture is
included in the consolidated profit and loss account, and the Group's share of
their net assets is included in the consolidated balance sheet. Where the
financial statements of subsidiaries and joint ventures do not conform with the
Group's accounting policies, appropriate adjustments are made on consolidation
in order to present the group financial statements on a consistent basis.



d.     Goodwill

Goodwill arising on consolidation represents the excess
of the consideration given over the fair value of the separable net assets
acquired. Goodwill arising on the acquisition of subsidiaries is capitalised and
amortised over 15 years. Impairment reviews are performed annually to ensure
that the intangible asset is not carried above the recoverable amount.



F-7

---



TDL INFOMEDIA HOLDINGS PLCNOTES TO THE FINANCIAL STATEMENTS
- Continued

e.     Turnover

Turnover arises from the Group's continuing activities
and mainly comprises advertising revenue received and receivable in respect of
directories published, in both paper and electronic format, during the year,
agency sales commission and other income. Advertising revenue for paper
directories is recognised on the publication of directories. Agency sales
commission is recognised on completion of sale. Revenues from internet
advertising and other services are recognised over the period of the obligation.
Turnover is recorded net of VAT and discounts.



f.     Stocks

Stocks are stated at the lower of cost and net realisable
value. Raw materials comprises paper used in the production of directories. Work
in progress comprises the direct costs incurred in producing advertisements for
directories not yet published.



g.     Fixed assets, depreciation and
amortisation

Fixed assets are stated at cost, net of depreciation
and provision for permanent diminution in value.

Depreciation is provided on a straight-line basis at rates
calculated to write off the cost of each asset over its estimated useful life.
The annual rates for the major classes of tangible fixed assets are as
follows:

|Freehold properties             | 6.7%           
|------------------------------- | ---------------
|Short-term leasehold properties | Period of lease
|Software                        | 33.34%         
|Computer equipment              | 33.34%         
|Office furniture and equipment  | 10-20%         

The carrying value of tangible assets is reviewed for
impairment if events or changes in circumstances indicate the carrying value may
not be recoverable.



h.     Fixed asset investments

Fixed asset investments are stated at the lower of cost and net
realisable value.



i.     Provisions

A provision is recognised where there is a present obligation,
whether legal or constructive, as a result of a past event for which it is
probable that a transfer of economic benefits will be required to settle the
obligation and a reliable estimate can be made of the amount of the
obligation.



F-8

---



TDL INFOMEDIA HOLDINGS PLCNOTES TO THE FINANCIAL STATEMENTS
- Continued



j.     Financial instruments

Financial assets are recognised when the Group has rights or
other access to economic benefits. Such assets consist of cash, a contractual
right to receive cash or another financial asset, or a contractual right to
exchange financial instruments with another entity on potentially favourable
terms. Financial liabilities are recognised when there is an obligation to
transfer benefits and that obligation is a contractual liability to deliver cash
or another financial asset or to exchange financial instruments with another
entity on potentially unfavourable terms. When these criteria no longer apply, a
financial asset or liability is no longer recognised.



k.     Derivative financial
instruments

The derivative instruments used by the Group, which are used
solely for hedging purposes, are forward foreign exchange contracts. Such
derivative instruments are used to alter the risk profile of an existing
underlying exposure of the Group in line with the Group's risk management
policies. The Group uses forward foreign currency contracts to reduce exposure
to foreign exchange rates. The rates under such contracts are used to record the
hedged item. As a result, gains and losses are offset against the foreign
exchange gains and losses on the related financial assets and liabilities, or
where the instrument is used to hedge a commitment or probable future
transaction, are not recognised until the transaction occurs.



l.     Borrowings and debt issue
costs

All borrowings are initially stated at the fair value of the
consideration received after the deduction of issue costs. Issue costs, together
with finance costs, are charged to the profit and loss account over the term of
the borrowings and represent a constant proportion of the balance of capital
repayments outstanding.



m.     Operating leases

Operating lease rentals are charged to the profit and loss
account on a straight line basis over the lease term.



n.     Pensions

The Group operates a defined benefit scheme available
to all employees with more than one year's service. Pension costs are charged to
the profit and loss account so as to spread the costs (as a level percentage of
salary) over the estimated average service lives for the employees in the
scheme.



F-9

---



TDL INFOMEDIA HOLDINGS PLCNOTES TO THE FINANCIAL STATEMENTS
- Continued



o.     Deferred Taxation

Deferred tax is recognised in respect of all timing
differences that have originated but not reversed at the balance sheet date
where transactions or events have occurred at that date that will result in an
obligation to pay more, or a right to pay less or to receive more, tax, with the
following exceptions:

- provision is made for tax on gains
  arising from the revaluation (and similar fair value adjustments) of fixed
  assets, and gains on disposal of fixed assets that have been rolled over into
  replacement assets, only to the extent that, at the balance sheet date, there
  is a binding agreement to dispose of the assets concerned. However, no
  provision is made where, on the basis of available evidence at the balance
  sheet date, it is more likely than not that the taxable gain will be rolled
  over into replacement assets and charged to tax only where the replacement
  assets are sold;
- deferred tax assets are recognised
  only to the extent that the directors consider that it is more likely than not
  that there will be suitable taxable profits from which the future reversal of
  the underlying timing differences can be deducted.

Deferred tax is measured on an undiscounted basis at the tax
rates that are expected to apply in the periods in which timing differences
reverse, based on tax rates and laws enacted or substantively enacted at the
balance sheet date.



p.     Foreign Currency Transactions

Transactions in foreign currencies are recorded at the
rate ruling on the date of the transaction except for those covered by a forward
contract where the forward rate is used. All foreign exchange differences are
taken to the profit and loss account.

Monetary assets and liabilities denominated in foreign
currencies are retranslated at the rate of exchange ruling at the balance sheet
date.



F-10

---



TDL INFOMEDIA HOLDINGS PLCNOTES TO THE FINANCIAL STATEMENTS
- Continued



2.     TURNOVER

An analysis of segmental sales revenues, all of which are
revenues from external customers, is as follows:



Yearended31 December2001
    Yearended31 December2002
    Yearended31
  December2003£'000
    £'000
    £'000U.K. Paper Directories
    86,918
    89,370
    96,212Internet Services
    3,498
    4,474
    4,834Business Information
    6,161
    6,892
    7,355Less: Discounts
    (3,440)
    (3,791)
    (4,276)Total
    93,137
    96,945
    104,125




3.     NET OPERATING EXPENSES



Yearended31 December2001
    Yearended31 December2002
    Yearended31
  December2003£'000
    £'000
    £'000Distribution costs
    3,865
    3,929
    4,136Administrative expenses
    38,059
    39,606
    42,66441,924
    43,535
    46,800




4.     GROUP OPERATING PROFIT

Yearended31December2001
    Yearended31December2002
    Yearended31December2003£'000
    £'000
    £'000Group operating profit  is
      stated after charging:Auditors' remuneration - audit
      services
    85
    66
    98Auditors' remuneration - non-
      audit services
    5
    5
    -Rental costs relating to operating
      leases
    3,229
    2,520
    2,631Depreciation of tangible fixed
      assets
    2,335
    2,459
    2,321Profit on disposal of fixed
      assets
    -
    -
    51Amortisation of intangible fixed
      assets
    14,126
    14,124
    14,124Advertising costs
    1,520
    1,953
    3,621Rental income
    (519)
    (623)
    (661)


Rental costs relating to operating leases stated above, include
hire of plant and machinery of £2,205,000 for the year ended 31 December 2003,
£1,946,000 for the year ended 31 December 2002 and £2,566,000 for the year ended
31 December 2001. Rental income is generated from the sub-leasing of un-utilised
office space.



F-11

---



TDL INFOMEDIA HOLDINGS PLCNOTES TO THE FINANCIAL STATEMENTS
- Continued



5.     EMPLOYEES



Yearended31 December2001
    Yearended31 December2002
    Yearended31
  December2003The average monthly number of persons employed by the Group during the
      period, by category was:Sales and marketing
    584
    545
    588Production
    116
    125
    132Administration
    156
    165
    183856
    835
    903






Yearended31December2001
    Yearended31December2002
    Yearended31 December2003£'000
    £'000
    £'000The aggregate remuneration andassociated costs of Group employees
      was:Salaries and
      wages
    27,484
    26,802
    30,673Social security
      costs
    2,875
    2,723
    3,379Pension costs (see note
      24)
    1,293
    1,424
    1,57531,652
    30,949
    35,627




6.     DIRECTORS' EMOLUMENTS

Total emoluments of all directors for services to the group are:

Yearended31 December2001
    Yearended31 December2002
    Yearended31
  December2003£'000
    £'000
    £'000Aggregate emoluments
    1,248
    915
    795


At 31 December 2003 retirement benefits were accruing in
respect of two directors under the Group's defined benefit scheme. Cash
contributions of £45,126 were made to the pension scheme during the year in
respect of the two directors (2002 -- £11,556).



F-12

---



TDL INFOMEDIA HOLDINGS PLCNOTES TO THE FINANCIAL STATEMENTS
- Continued



6.     DIRECTORS' EMOLUMENTS - continued

Highest paid director
    Yearended31 December2001
    Yearended31 December2002
    Yearended31
  December2003£'000
    £'000
    £'000Aggregate emoluments
    623
    645
    622Defined benefit schemes:accrued pension at end of period
    24
    25
    29


At 31 December 2003 two of the directors of the Company were
also directors of its principal subsidiaries and their remuneration is paid
directly by the subsidiaries



7.     INTEREST RECEIVABLE AND SIMILAR
INCOME

Yearended31 December2001
    Yearended31 December2002
    Yearended31
  December2003£'000
    £'000
    £'000Interest receivable on short term deposits
    159
    43
    34Interest receivable by joint venture
    4
    -
    -163
    43
    34




8.     INTEREST PAYABLE AND SIMILAR
CHARGES

Yearended31 December2001
    Yearended31 December2002
    Yearended31
  December2003£'000
    £'000
    £'000On bank loans, overdrafts and notes (1)
    16,786
    13,832
    9,564On intercompany loans
    164
    2,147
    3,927Loss on foreign
      currency revaluation of debt instrument
    914
    1,284
    153Interest payable by joint venture
    171
    -
    -Premiums paid and write
      off of debt raising expenses
    696
    7,078
    3318,731
    24,341
    13,677


(1) - Included in interest is an amount of £0.9 million (2002:
5.5 million and 2001: £5.4 million) being interest accreting on the Senior
Discount Notes. The premium on repurchase of the Notes is analysed in Note
16.



F-13

---



TDL INFOMEDIA HOLDINGS PLCNOTES TO THE FINANCIAL STATEMENTS
- Continued



9.     TAXATION ON LOSS ON ORDINARY
ACTIVITIES

The taxation charge is based upon the results for the year and
comprises:

Yearended31 December2001
    Yearended31 December2002
    Yearended31
  December2003£'000
    £'000
    £'000UK Corporation tax-Current tax
    2,205
    1,328
    3,811




(a)     Factors affecting the current tax
charge:

The tax assessed on the profit on ordinary activities for the
year is higher than the standard rate of corporation tax in the UK of 30% (2002
- 30%). The differences are reconciled below:

2001
    2002
    2003£'000
    £'000
    £'000(Loss)/profit on ordinary activities  multiplied
      by standard rate of  corporation tax in the UK of 30% 
      (2001 - 30%)
    (2,413)
    (3,139)
    174Expenses not deductible
      for tax purposes  (including Goodwill amortisation)
    4,068
    4,239
    4,253Decelerated/(accelerated) capital  allowances
    162
    97
    99Pensions contributions
      in excess  of/(lower than) the pensions charge
    388
    131
    (715)Total current tax
    2,205
    1,328
    3,811




(b)     Factors that may affect future tax
charges

The group has tax losses arising in the UK of £1,583,892 (2002
- £1,583,892) that are available indefinitely for offset against future taxable
profits of the company in which the losses arose. Deferred tax assets have not
been recognised in respect of these losses as they may not be used to offset
taxable profits elsewhere in the group, and they have arisen in a company that
has been loss-making for some time.



F-14

---



TDL INFOMEDIA HOLDINGS PLCNOTES TO THE FINANCIAL STATEMENTS
- Continued



10.     INTANGIBLE ASSETS

Goodwill arising on the acquisition of TDL Group Limited on 31
July 1999 has been capitalised in accordance with Financial Reporting Standard
number 10 - Goodwill and Intangible Assets. Following the acquisition of TDL
Infomedia Limited by SEAT Pagine Gialle SpA on 1 August 2000, the directors have
reviewed the useful life of the goodwill, in light of changing market
conditions, and determined that the useful life from the goodwill's inception
should be revised from 20 years to 15 years.

2002£'000
    2003£000'sCostAt 1
      January and 31 December
    
    
    208,112
    208,112AmortisationAt 1
      January
    
    
    30,356
    44,480Charge for the year
    
    
    14,124
    14,124At
      31 December
    
    
    44,480
    58,604Net book value at 31
      December
    
    
    163,632
    149,508




F-15

---



TDL INFOMEDIA HOLDINGS PLCNOTES TO THE FINANCIAL STATEMENTS
- Continued



11.     TANGIBLE ASSETS

FreeholdProperty
    Short-termLeaseholdProperties
    OfficeFurniture
&Equipment
    ComputerEquipment&
    Software
    Total£'000
    £'000
    £'000
    £'000
    £'000CostAt 1 January 2003
    10,045
    2
    5,129
    4,682
    19,858Additions
    -
    -
    479
    672
    1,151Disposals
    -
    (2)
    (1,149)
    (1,128)
    (2,279)At 31 December 2003
    10,045
    -
    4,459
    4,226
    18,730DepreciationAt 1 January 2003
    1,340
    2
    3,178
    2,850
    7,370Charge for year
    670
    -
    526
    1,125
    2,321Disposals
    -
    (2)
    (1,149)
    (1,126)
    (2,277)At 31 December 2003
    2,010
    -
    2,555
    2,849
    7,414Net book value at 31 December 2003
    8,035
    -
    1,904
    1,377
    11,316CostAt 1 January 2002
    10,045
    2
    5,454
    3,944
    19,445Additions
    -
    -
    507
    1,340
    1,847Disposals
    -
    -
    (832)
    (602)
    (1,434)At 31 December 2002
    10,045
    2
    5,129
    4,682
    19,858DepreciationAt 1 January 2002
    670
    2
    3,455
    2,217
    6,344Charge for year
    670
    -
    555
    1,234
    2,459Disposals
    -
    -
    (832)
    (601)
    (1,433)At 31 December 2002
    1,340
    2
    3,178
    2,850
    7,370Net book value at 31 December 2002
    8,705
    -
    1,951
    1,832
    12,488


On 5 January 2001 Thomson Directories Limited acquired the
title to Thomson House, 296 Farnborough Road, Farnborough, Hampshire for the sum
of £9,550,000 plus associated costs.



12.     STOCKS

2002
    2003£'000
    £'000Raw materials
    979
    644Work in progress
    7,151
    7,6518,130
    8,295




F-16

---



TDL INFOMEDIA HOLDINGS PLCNOTES TO THE FINANCIAL STATEMENTS
- Continued



13.     DEBTORS

2002
    2003£'000
    £'000Amounts falling due within one yearTrade debtors (1)
    18,673
    21,512Other debtors
    1,798
    1,689Amounts owed by group undertakings
    -
    3Prepayments
    1,955
    3,94422,426
    27,148Amounts falling due after one yearAmounts owed by group undertakings
    189
    163


(1) Trade debtors are stated net of provisions for doubtful debts (see Note
30).



14.     CREDITORS - AMOUNTS FALLING DUE WITHIN ONE
YEAR

2002
    2003£'000
    £'000Bank loans and overdrafts
    1,062
    1,433Trade creditors
    4,504
    4,526Amounts owed to parent undertakings
    27,869
    18,794Other creditors
    332
    174Corporation tax payable
    1,299
    2,308Other taxation and social security
    3,539
    4,598Accruals and deferred revenue
    13,636
    16,19052,241
    48,023


Included in 'Amounts owed to parent undertakings' is an amount
of £16,993,006 (2002: £26,307,000) relating to the SEAT Pagine Gialle S.p.A
(2002: Telecom Italia Finance S.A.) loans - see note 16.

> 

15.     CREDITORS - AMOUNTS FALLING DUE
AFTER ONE YEAR

2002
    2003£'000
    £'000Bank loans and other borrowings
    71,303
    71,499Amounts owed to parent undertaking
    46,252
    49,201117,555
    120,700


Included in 'Amounts owed to parent undertaking' is an amount of £42,993,175
(2002 - £41,882,000) relating to the SEAT Pagine Gialle S.p.A (2002: Telecom
Italia Finance S.A.) loan - see note 16.



F-17

---



TDL INFOMEDIA HOLDINGS PLCNOTES TO THE FINANCIAL STATEMENTS
- Continued



16.     BANK LOANS AND OTHER BORROWINGS

Group bank loans and other borrowings at period end are
stated net of unamortised issue costs of £2,135,000 (2002: £2,522,000). These
costs, together with the interest expense, are allocated to the profit and loss
account over the term of the facility or debt instrument at a constant rate on
the carrying amount.



Value
    Total Issue Costs2002
    2003
    2002
    2003£'000
    £'000
    £'000
    £'000Senior Discount Notes*
    5,732
    5,549
    1,969
    1,969Senior Subordinated Notes
    67,750
    67,750
    6,140
    6,140Telecom Italia Finance S.A. borrowings
    67,382
    -
    -
    -SEAT Pagine Gialle S.p.A borrowings
    -
    58,437
    -
    -140,864
    131,736
    8,109
    8,109




* The Senior Discount Notes are denominated in US dollars and
accrete to US$11.275 million by 15 October 2004.

Following the change of control of the Group's parent company,
SEAT Pagine Gialle S.p.A, borrowings through Telecom Italia Finance S.A. were
refinanced by new facilities directly with SEAT Pagine Gialle S.p.A.



The maturity analysis of the Group's bank and other borrowings
is as follows:

2002
    2003£'000
    £'000Within one year
    
    27,712
    18,426Between 1 and 2 years
    
    -
    -Between 2 and 3 years
    
    -
    -Between 3 and 4 years
    
    -
    -Between 4 and 5 years
    
    -
    -After 5 years
    
    115,364
    114,492Issue costs
    
    (2,522)
    (2,135)Total Loans
    
    140,554
    130,783


On 30 July 1999 the Group borrowed £70,000,000 under a senior
subordinated bridge financing facility from CIBC World Markets plc. This
borrowing was repaid on 15 October 1999 from the proceeds of an issue of
£70,000,000 Senior Subordinated Notes. The Senior Subordinated Notes incur
interest of 12.125% and are repayable by 15 October 2009. On 17 March 2000 the
Group completed an exchange offer on the outstanding £70,000,000 12.125% Senior
Subordinated Notes. £69,250,000 of these notes were exchanged for £69,250,000
12.125% new Senior Subordinated Notes (the 'Exchange Notes'). As of 21 March
2000 the Exchange Notes were registered under the US Securities Act of 1993, as
amended. Following the change of control of the Group on 1 August 2000 a tender
offer was made to acquire all the outstanding Exchange Notes at 101% of the
principal amounts outstanding. Acceptances were received from holders of
£2,250,000 of the notes.



F-18

---



TDL INFOMEDIA HOLDINGS PLCNOTES TO THE FINANCIAL STATEMENTS
- Continued



16.     BANK LOANS AND OTHER BORROWINGS -
continued

Following a change of control of the Group's parent
company, SEAT Pagine Gialle S.p.A, in August 2003 a tender offer was made to
acquire all the outstanding Exchange Notes at 101% of the principal amounts
outstanding. No acceptances were received. Under the terms of the indenture
relating to the Senior Discount Notes (described below), a majority in principal
amount of the Senior Subordinated Notes had to consent to a similar tender offer
being made to the holders of the Senior Discount Notes or such an offer could
not be made. The Group did not receive the requisite consents therefore it did
not make a tender offer for the Senior Discount Notes.

On 30 July 1999 the Group borrowed £25.0 million under a senior
discount bridge financing facility from CIBC World Markets plc. This borrowing
was repaid on 15 October 1999 from the proceeds of an issue, at a discount of
47.366%, of USD87,360,000 Senior Discount Notes. The Senior Discount Notes incur
interest of 15.5% and are repayable by 15 October 2010. On 17 March 2000 the
Group completed an exchange offer on the outstanding USD87,360,000 15.5% Senior
Discount Notes. All of these notes were exchanged for 15.5% new Senior Discount
Notes (the 'Exchange Notes'). As of 21 March 2000 the Exchange Notes were
registered under the US Securities Act of 1993, as amended. Following the change
of control of the Group on 1 August 2000 a tender offer was made to acquire all
the outstanding Exchange Notes at 101% of the principal amounts outstanding. No
acceptances were received.

During the year the Group repurchased $0.785 million of its
$12.06 million outstanding Senior Discount Notes (2002: repurchased $75.3
million of its $87.36 million outstanding Senior Discount Notes). The total cost
of the repurchase, including the premium and write off of issue costs, was
£32,596 (2002: £6.6 million).

On 14 December 2001 the Group borrowed £39,000,000 under a
£65,000,000 Multicurrency Facility agreement with Sogerim S.A. (now Telecom
Italia Finance S.A), a subsidiary of Telecom Italia S.p.A. On 10 September 2002
the Facility was renewed at the lower level of £55,000,000. During the 2002 the
Group repaid a total of £13.5 million against these facilities. On 31 July 2003
the Group refinanced the outstanding balance under this facility with a new
£55,000,000 facility (see below).

On 31 July 2003 the Group borrowed £15,444,293 under a new
£55,000,000 Multicurrency Facility agreement with SEAT Pagine Gialle S.p.A. The
facility is repayable on 23 July 2004. The directors believe they will be able
to refinance this facility when it becomes repayable (see Item 3(D) "Risk
Factors").

On 12 August 2002 the Group entered into a £55,000,000 Facility
Agreement with Sogerim S.A. (now Telecom Italia Finance S.A). The Group had
drawn down £41,882,000 under this facility by 31 December 2002 and a further
£1.1 million in 2003. These draw downs were used to finance the repurchase of
the Senior Discount Notes described above. On 31 July 2003 the Group refinanced
the outstanding balance under this facility with a new £55,000,000 facility (see
below).

On 31 July 2003 the Group entered into a new £55,000,000
Facility Agreement with SEAT Pagine Gialle S.p.A. This facility is repayable on
the earlier of 15 October 2010 or a change of control. The Group had drawn down
£42,993,175 under this facility by 31 December 2003. The directors believe they
will be able to refinance this facility when it becomes repayable (see Item 3(D)
"Risk Factors").



F-19

---



TDL INFOMEDIA HOLDINGS PLCNOTES TO THE FINANCIAL STATEMENTS
- Continued



17.     FINANCIAL INSTRUMENTS

Treasury

The Group's financial instruments comprise borrowings, cash and
liquid resources, as well as derivative financial instruments. Short term trade
debtors and trade creditors have been excluded from the following disclosures
other than those relating to currency risk. The main purpose of all the
financial instruments other than the derivatives is to raise finance for the
Group's operations. The Group does not trade in financial instruments. The Group
periodically enters into derivative transactions (generally foreign exchange
contracts). The purpose of these transactions is to manage currency risk.

The main risks arising from the Group's financial instruments
are interest rate risk, liquidity risk and foreign currency risk. The Board
reviews and agrees policies for managing each of these risks as described below.
The policies adopted following the formation of the Group have been applied
consistently until early 2002. Subsequently, the Group has replaced some high
cost fixed interest dollar bonds with lower cost variable rate sterling
borrowings. This policy has added slightly to interest rate risk, but
significantly reduced both the cost of borrowings and currency risk.

Interest rate risk

The Group finances its operations through a combination of
subsidiary profits, long-term loans, high yield debt finance and bank
borrowings. The directors aim to minimise exposure to fluctuating interest rates
along with the potential impact on liquidity by holding borrowings on both fixed
and floating interest rates.

The Group raised high yield debt at fixed rates during 1999.
The debt was raised in the form of Sterling and US Dollar bonds. The Sterling
bonds were issued for £70 million, 96.8% of which were still outstanding at 31
December 2003. The Dollar bonds had a face value of $87.36 million issued at
47.366% of face value and accreting for 5 years to attain the face value. The
Group had repurchased 87.1% of these Dollar bonds by 31 December 2003 using a
new variable rate loan facility from SEAT Pagine Gialle S.p.A.

At 31 December 2003 55.6% (2002: 52.2%) of the Group's
borrowings were at fixed rates.

Foreign currency risk

The Group raised part of its high yield debt denominated in US
dollars. The principal amount of the debt was US$87.36 million, but it was
issued on 13 October 1999 at 47.366% of the principal amount. The debt accretes
value at 15.5% p.a. for 5 years after which interest is payable. The principal
value is repayable on 15 October 2010. The value of this instrument had reached
$57.2 million, translated to £39.4 million, at 31 December 2001. During 2002,
the Group repurchased 86.2% of these bonds. Consequently, at 31 December 2002
the value of this instrument was US $9.2 million translated to £5.7 million.
During 2003, the Group repurchased a further 0.9% of these bonds. Consequently,
at 31 December 2003 the value of this instrument was US $9.9 million translated
to £5.5 million.

The directors introduced partial currency hedging for this
instrument in March 2002. During December 2003 hedging covered between 95% and
100% of the US dollar exposure.

At 31 December 2003 the Group held no Euro denominated bank
balances (2002: Euro 60,000 or £40,000).



F-20

---



TDL INFOMEDIA HOLDINGS PLCNOTES TO THE FINANCIAL STATEMENTS
- Continued



17.     FINANCIAL INSTRUMENTS -
Continued

Liquidity risk

The Group policy is to ensure that it maintains continuous
sources of funding with at least 50% of its borrowings maturing after more than
five years.

At 31 December 2003 88.3% of the Group's borrowings were due to
mature in more than 5 years (2002: 81.9%).

Financial assets and liabilities

The Group has chosen not to include short term debtors and
short term creditors in the analysis of Financial Instruments, either due to the
exclusion of short term items, or because they do not meet the definition of a
financial asset or financial liability.

Financial assets

The Group had the following financial assets (excluding short
term debtors) all of which were held as part of the financing arrangements of
the Group:



2002
    2003£'000
    £'000
    
    Ruling
      currencyCash and short term
    deposits
    1,456
    7,585
    
    Pounds
    sterlingCash and short term
    deposits
    40
    -
    Euro1,496
    7,585




The interest rate risk associated with financial assets is as
follows:

Currency
    Short-term
      deposits£'000At
      December 2003Sterling
    18Euro
    -US Dollars
    -Total
    18At
      December 2002Sterling
    1,044Euro
    -US Dollars
    -Total
    1,044


The short term deposits earn variable interest rates. Other
sterling balances included in the table of financial assets are not interest
bearing.



F-21

---



TDL INFOMEDIA HOLDINGS PLCNOTES
TO THE FINANCIAL STATEMENTS - Continued



17.     FINANCIAL INSTRUMENTS -
continued

Financial liabilities

The interest rate profile of the Group's financial liabilities
(excluding short term creditors) at 31 December was:



Currency
    Total£'000
    FloatingRateFinancialLiabilities£'000
    Fixed
      rateFinancialLiabilities£'000
    FinancialLiabilitieson which noInterest is
      paid£'000At 31
      December 2003Sterling
    126,187
    58,437
    67,750
    -US
      Dollars
    5,549
    -
    5,549
    -131,736
    58,437
    73,299
    -


At 31
      December 2002Sterling
    135,132
    67,382
    67,750
    -US
      Dollars
    5,732
    -
    5,732
    -140,864
    67,382
    73,482
    -




Fixed rate financial liabilities
    Financial liabilities on which no interest is
      paidCurrency
    Weighted averageinterest
      rate%
    Weighted averageperiod for whichrate is
      fixedYears
    Weighted averageperiod
      untilmaturityYearsAt 31 December
      2003Sterling
    12.13
    5.8
    -US Dollars
    15.50
    6.8
    -12.38
    5.9
    -




At 31 December
      2002Sterling
    12.13
    6.8
    -US Dollars
    15.50
    7.8
    -12.39
    6.9
    -




The floating rate financial liabilities comprise sterling
denominated bank borrowing that bear interest at rates based on LIBOR or
EURIBOR. The average rate of interest on these loans at 31 December 2003 was
6.38% (5.57% at 31 December 2002).



F-22

---



TDL INFOMEDIA HOLDINGS PLCNOTES TO THE FINANCIAL STATEMENTS
- Continued



17.     FINANCIAL INSTRUMENTS -
continued

Foreign currency exposures

As reported under "Foreign Currency Risk" the directors
introduced hedging of US dollar exchange rate exposure on the Group's US dollar
bonds in March 2002. The Group's US Dollar exposure was fully hedged at 31
December 2003.

The table below shows the Group's currency exposures that give
rise to net gains and losses recognised in the profit and loss account. These
exposures represent the monetary assets and monetary liabilities of the group
that are not denominated in sterling. As at 31 December 2003 those exposures
were:



Net foreign currency monetary assets/(liabilities) in
£'000

Currency of operation
    US Dollar
    Euro
    TotalAt 31
      December 2003Sterling
    -
    -
    -At 31
      December 2002Sterling
    -
    40
    40


Maturity of financial liabilities

The maturity profit of the Group's financial liabilities
(excluding short-term creditors) as at 31 December was as follows:

2002
    2003£'000
    £'000In one year or less or on
      demand
    25,500
    15,444Between one and five
    years
    -
    -In more than five years
    115,364
    116,292140,864
    131,736




Borrowings facilities

The Group has an agreed revolving credit facility with its
bankers which constitutes an "undrawn committed borrowing facility". As at 31
December 2003 the undrawn balance of this facility on which all conditions
precedent had been met was as follows:

£'000Expiring in one year or less on
      demand
    3,000


The Group also has two agreed credit facilities with Telecom
Italia Finance S.A., a subsidiary of Telecom Italia S.p.A.

£'000The undrawn balance of these
      facilities, expiring in one year or less or on demand, is:
    22,780The undrawn balance of these
      facilities, expiring in 5 years or more, is:
    12,007


The facilities can be drawn at interest rates based on LIBOR or
EURIBOR.



F-23

---



TDL INFOMEDIA HOLDINGS PLCNOTES TO THE FINANCIAL STATEMENTS
- Continued



17.     FINANCIAL INSTRUMENTS -
continued

Fair values of financial assets and financial liabilities

Set out below is a comparison by category of book values
and fair values of all the Group's financial assets and financial liabilities as
at 31 December 2003:

Book value£ '000
    Fair value£ '000Primary financial instruments held or issued to finance the Group's
      operations:Short term borrowings and current
      portion of long term borrowings
    (15,444)
    (15,444)Long term borrowings
    (116,292)
    (123,977)Cash deposits
    7,585
    7,585Derivative financial instruments held to hedge the currency exposure on
      expected future purchases:Forward
      exchange currency contracts
    -
    (579)




Set out below is a comparison by category of book values and
fair values of all the Group's financial assets and financial liabilities as at
31 December 2002:

Book value£ '000
    Fair value£ '000Primary financial instruments held or issued to finance the Group's
      operations:Short term borrowings and current
      portion of long term borrowings
    (25,500)
    (25,500)Long term borrowings
    (115,364)
    (121,018)Cash deposits
    1,496
    1,496Derivative financial instruments held to hedge the currency exposure on
      expected future purchases:Forward
      exchange currency contracts
    -
    (106)


Market values have been used to determine the fair value of all
forward foreign currency contracts and listed debt issued.



Gains and losses on hedges

The Group enters into forward foreign currency contracts to
eliminate the currency exposures that arise on purchases denominated in foreign
currencies when those borrowings are arranged. This policy was introduced during
2002.

Changes in the fair value of instruments used as hedges are
recognised in the financial statements on an ongoing basis. Exchange losses
incurred on hedged currency exposure in the year totaled £813,815.



F-24

---



TDL INFOMEDIA HOLDINGS PLCNOTES TO THE FINANCIAL STATEMENTS
- Continued



18.     PROVISIONS FOR LIABILITIES AND
CHARGES

2002
    2003£'000
    £'000Provisions for liabilities and charges comprise:Provision for onerous
      contracts
    
    120
    80Deferred tax
    
    -
    -120
    80


The onerous contract provision relates to the expected loss on
the remainder of the lease term for the Enfield property.

Yearended31 December2002
    Yearended31
  December2003£'000
    £'000Balance as at beginning of period
    160
    120Release to profit and loss account- onerous contracts
    provision
    (40)
    (40)Balance at end of period
    120
    80


As at 31 December 2003 the following deferred tax assets have not been
recognised in the balance sheet:

2002
    2003£'000
    £'000Accelerated capital allowances
    260
    357Pension costs
    100
    (504)Tax losses
    475
    475Other timing differences
    539
    376Deferred tax asset
    1,374
    704


The deferred tax assets have not been recognised in the balance
sheet as they are not expected to reverse in the foreseeable future.



F-25

---



TDL INFOMEDIA HOLDINGS PLCNOTES TO THE FINANCIAL STATEMENTS
- Continued

> 

19.     SHARE CAPITAL AND SHARE PREMIUM

Share Capital

2001
    2002
    2003Authorised
    £'000
    £'000
    £'00045,000,000 Ordinary shares of £0.01
      each
    450
    450
    450Issued, called up and fully paid39,712,444 Ordinary shares of £0.01
      each
    397
    397
    397


Share Premium

2001
    2002
    2003£'000
    £'000
    £'000Balance at 1 January
      and 31 December
    39,315
    39,315
    39,315


> 

20.     OTHER RESERVES

2001
    2002
    2003£'000
    £'000
    £'000Balance at 1January and
      31 December
    40,000
    40,000
    40,000


On 30 July 1999 the Company received a distributable, capital
contribution of £40,000,000 from TDL Infomedia Finance Limited. The contribution
was made by payment of £28,566,000 in cash and the transfer of 76,244 shares in
TDL Group Limited



F-26

---



TDL INFOMEDIA HOLDINGS PLCNOTES TO THE FINANCIAL STATEMENTS
- Continued



21. PROFIT AND LOSS ACCOUNT

2001
    2002
    2003£'000
    £'000
    £'000Opening balance
    (19,227)
    (29,475)
    (41,267)Retained loss for the period
    (10,248)
    (11,792)
    (3,232)Closing balance
    (29,475)
    (41,267)
    (44,499)




22. RECONCILIATION OF MOVEMENTS IN SHAREHOLDERS' FUNDS

Yearended31December2001
    Yearended31December2002
    Yearended31December2003£'000
    £'000
    £'000Retained loss for the period
    (10,248)
    (11,792)
    (3,232)Opening shareholders' funds
    60,485
    50,237
    38,445Closing shareholders' funds
    50,237
    38,445
    35,213




23. PENSIONS

The pension scheme is a defined benefit scheme, externally
funded, and the Group assets are held in a separate trustee administered fund.
The trustee company is Thomson Directories Pension Company Limited. The pension
cost is assessed in accordance with the advice received from an independent
qualified actuary on the basis of financial valuations.

The cost for the period was:

Yearended31 December2001
    Yearended31 December2002
    Yearended31
  December2003£'000
    £'000
    £'000Regular pension cost
      8.77%*  (2002: 8.84% and 2001: 8.7%) of  pensionable
      salaries
    1,405
    1,383
    1,368Variation from regular cost
    -
    -
    222Imputed interest at 8%
      to June and 7.5%  from July (2001 and 2002: 8%) on 
      prepayment
    (112)
    (8)
    (15)1,293
    1,375
    1,575


* The regular pension cost percentage was amended from 8.84% to
8.77% following the triennial actuarial valuation at 30 June 2003. The interest
rate for financial reporting under SSAP 24 was reduced to 7.5% based on
information supplied following that actuarial valuation.



F-27

---



TDL INFOMEDIA HOLDINGS PLCNOTES TO THE FINANCIAL STATEMENTS
- Continued

24.     PENSIONS - continued

The triennial valuation of the scheme was carried out at 30
June 2000 using the Projected Unit Method. The material assumptions
were:

Realistic BasisRate of return on investments- during active membership
    6.5%- at other times
    4.5%Increase in pensionable salaries
    4.6%Increase in pensions
    2.6%


The actuarial valuation at 30 June 2003 (performed by actuaries
Punter, Southall and Co) showed that the market value of the scheme's assets was
£25,851,000 and that the actuarial value of those assets represented 60% of the
benefits that had accrued to members, after allowing for expected future
increases in earnings. Cash contributions from the Group were increased to 23%
of pensionable salaries during 2003, from 6% in 2002. The Group has agreed to
continue contributing at 23% of pensionable salaries following discussions with
the Fund Actuary. The contribution of employees remains at either 4.0% or 5.5%
of earnings.

A prepayment of £1,681,000 is included in debtors (2002:
provision of £332,000).



Pension disclosure statement in respect of FRS 17

In November 2000 the Accounting Standards Board issued FRS
17 'Retirement Benefits' to replace SSAP 24 - Accounting for Pension Costs. FRS
17 is fully effective for periods ending on or after 1 December 2005 though
certain disclosures are required in the transitional period. The following
additional disclosure on pensions is required under Financial Reporting Standard
17.

The pension cost that would have been charged to operating
profit under FRS 17 for the year amounts to £2,217,000.

The valuation used for this disclosure has been based on the
most recent actuarial valuation of the Scheme as at 30 June 2003 updated by an
independent qualified actuary to take account of the requirements of FRS 17 in
order to assess the liabilities of the Scheme at 31 December 2003. Scheme assets
are stated at their market values at 31 December 2003.



Actuarial Assumptions adopted as at 31 December

2001
    2002
    2003Discount rate
    5.8% pa
    5.6% pa
    5.4% paRate of general increase in salaries
    4.5% pa
    3.8% pa
    4.4% paRate of price inflation
    2.5% pa
    2.3% pa
    2.9% paRate of increase to pensions in payment
    2.5% pa
    2.3% pa
    2.9% pa




F-28

---



TDL INFOMEDIA HOLDINGS PLCNOTES TO THE FINANCIAL STATEMENTS
- Continued



24.     PENSIONS - continued

Assets in the Scheme and their expected rates of return as at
31 December



Main Asset Categories
    Long termrate of returnexpected as at31
      December2001
    Value as at31
      December2001£'000
    Long termrate of returnexpected as at31
      December2002
    Value as at31
      December2002£'000
    Long termrate of returnexpected as at31
      December2003
    Value as at31
      December2003£'000Equities
    8.0% pa
    22,985
    8.1% pa
    18,953
    8.3% pa
    25,579Corporate Bonds
    5.8% pa
    1,046
    5.0% pa
    966
    4.8% pa
    3,976Government Bonds
    5.0% pa
    2,932
    4.5% pa
    2,374
    5.4% pa
    1,017Cash and Other
    
    -
    
    -
    4.0% pa
    38Total Market Value
    
    26,963
    
    22,293
    
    30,610




Value of Scheme Liabilities

The present value of the scheme's liabilities, which are
derived from cash flow projections over long periods and which are thus
inherently uncertain, were:

2002£'000
    2003£'000Present Value of Scheme Liabilities
    37,289
    47,148




Scheme Deficit and Net Pension Liability

2002£'000
    2003£'000Market Value of Scheme Assets
    22,293
    30,610Present Value of Scheme Liabilities
    37,289
    47,148Deficit in the Scheme
    (14,996)
    (16,538)Related Deferred Tax Asset
    4,499
    4,961Net Pension Liability
    (10,497)
    (11,577)


The related deferred tax asset at the standard tax rate of 30% would be
£4,961,000 (2002: £4,499,000).

Volatility of FRS 17

It should be noted that the methodology and assumptions
prescribed for the purposes of FRS 17 mean that the disclosures will be
inherently volatile and may vary greatly according to investment market
conditions at each accounting date.



F-29

---



TDL INFOMEDIA HOLDINGS PLCNOTES TO THE FINANCIAL STATEMENTS -
Continued



24.     PENSIONS - continued

Components of the Pension Charge if FRS 17 had been adopted

If FRS 17 had been adopted in these accounts the Profit and Loss account
would have included the following:



2002£'000
    2003£'000Amount chargeable to Operating ProfitCurrent Service Cost
    (2,264)
    (2,217)Amount credited to Other Finance IncomeExpected Return on Scheme Assets
    2,044
    1,690Interest on Scheme Liabilities
    (1,903)
    (2,088)Net Return
    141
    (398)


Analysis of amount recognised in the Statement of Total
Recognised Gains and Losses (STRGL)

If FRS 17 had been adopted in these accounts the Profit and Loss account
  would have included the following:



2002
          £'000
        2003
          £'000Amount chargeable to Operating ProfitCurrent Service Cost
        (2,264)
        (2,217)Amount credited to Other Finance IncomeExpected Return on Scheme Assets
        2,044
        1,690Interest on Scheme Liabilities
        (1,903)
        (2,088)Net Return
        141
        (398)




Analysis of amount recognised in the Statement of Total
  Recognised Gains and Losses (STRGL)

If FRS 17 had been adopted in these accounts a Statement of
  Total Recognised Gains and Losses would have included the following:



2002
          £'000
        2003
          £'000Actual return less expected return on Scheme Assets
        (7,675)
        2,729% of the scheme asset value
        (34.4%)
        8.9%Experience gains and losses arising on Scheme Liabilities
        318
        305% of the scheme liabilities
        0.9%
        0.6%Changes in assumptions underlying the present value of the Scheme
          Liabilities
        (609)
        (5,549)% of the scheme liabilities
        (1.6%)
        (11.8%)Actuarial loss recognised in the STRGL
        (7,966)
        (2,515)% of the scheme liabilities
        (21.4%)
        (5.3%)




F-30

---



TDL INFOMEDIA HOLDINGS PLCNOTES TO THE FINANCIAL STATEMENTS -
Continued



24.     PENSIONS - continued

During the year the Group contributed at the rate of 23% of
pensionable salaries.



Impact on the Group's Balance Sheet if FRS 17 had been
adopted

2002£'000
    2003£'000Net assets
    38,445
    35,213Pension liability under FRS 17
    (14,996)
    (16,538)SSAP 24 pension adjustment
    332
    (1,681)Net assets if FRS 17 were adopted
    23,781
    16,994Profit and loss Reserve
    (41,267)
    (44,499)Pension reserve under FRS 17
    (14,996)
    (16,538)SSAP 24 pension adjustment
    322
    (1,681)Profit and loss reserve if FRS 17 were
    adopted
    (55,931)
    (62,718)




25. OPERATING LEASES

2003£'000Annual commitments under non-cancellable operating leases which are as
      follows:Land and buildingsWithin one year
    133Between one and five years
    310After five years
    100543OtherWithin one year
    219Between one and five years
    1,730After five years
    -1,949




26.     CAPITAL COMMITMENTS

2002
    2003£'000
    £'000Capital expenditure commitments contracted for but not
      provided
    107
    140




F-31

---



TDL INFOMEDIA HOLDINGS PLCNOTES TO THE FINANCIAL STATEMENTS
- Continued



27.     RELATED PARTY TRANSACTIONS

Thomson Directories Limited recharges the Thomson Pension Fund
the costs of administration and independent advisors borne by Thomson
Directories Limited. The total amounts recharged during 2001, 2002 and 2003 were
£22,874, £25,568 and £33,044 respectively.

Prior to the sale of TDL Belgium on 30 March 2001 the Group
loaned BEF 146 million, BEF 331 million and BEF100 million to the joint venture
during 1999, 2000 and 2001 respectively. On 30 March 2001 the Group sold its
investment in, and loans to, TDL Belgium S.A. to a newly formed company, TDL
Infomedia B.V., a wholly owned subsidiary of TDL Infomedia Limited. The
investment and loans were sold for £4.1 million, the net asset value reflected
in the Group's accounts on the date of sale. Three directors of the company, Mr
GC List, Ms LM Pancratz and Mr KJ Watson were also directors of TDL Belgium S.A.
throughout 2001. Mr GC List retired on 1 February 2002.

During 2001 the Group recharged MyBlueCat.com Limited, a wholly
owned subsidiary of TDL Infomedia Limited, £40,000 (2001: £40,000) in respect of
management charges and £198,608 (2001: £767,143) in respect of other costs. Two
of the directors of the Group, Ms Pancratz and Mr Watson are also directors of
MyBlueCat.com Limited. On 31 December 2001 the Group purchased from
MyBlueCat.com Limited, a wholly owned subsidiary of TDL Infomedia Limited,
computer equipment at its net book value of £162,275. On 19 December 2002 the
Group purchased the net liabilities of MyBlueCat.com Limited at their net book
value of £1,000.



F-32

---



TDL INFOMEDIA HOLDINGS PLCNOTES TO THE FINANCIAL STATEMENTS
- Continued

> 

28.     ULTIMATE HOLDING COMPANY

The immediate parent undertaking is TDL Infomedia Finance
Limited. The ultimate U.K. holding company is TDL Infomedia Limited.

The smallest company within which these accounts are
consolidated is TDL Infomedia Limited. The consolidated accounts of TDL
Infomedia Limited can be obtained from the Company Secretary, TDL Infomedia
Limited, Thomson House, 296 Farnborough Road, Farnborough, Hampshire, GU14
7NU.

The largest group in which the results of the company are
consolidated is SEAT Pagine Gialle S.p.A., incorporated in Italy.

The ultimate parent company and controlling party is SEAT
Pagine Gialle S.p.A., incorporated in Italy.

Copies of the consolidated accounts of SEAT Pagine Gialle
S.p.A. maybe obtained from the company secretary of SEAT Pagine Gialle S.p.A.,
Via Aurelio Saffi 18, 10138 Turin, Italy.



29.     NEW U.K. ACCOUNTING STANDARDS

In 2000 the U.K. Accounting Standards Board ("ASB") issued
Financial Reporting Standard ("FRS") 17 "Retirement Benefits".

FRS 17 introduces radical changes to the way companies account
for defined benefit pension schemes. The FRS approaches pension cost accounting
from a balance sheet perspective, requiring pension scheme assets to be measured
at market value, pension scheme liabilities to be measured using an actuarial
valuation method and discounted using a corporate bond rate and the resulting
pension scheme surplus or deficit to be recognised immediately on the company
balance sheet. Actuarial gains and losses are to be recognised immediately in
the statement of recognised gains and losses. The cost of benefit improvements
are to be charged to the profit and loss account as soon as they vest. The Group
is not required to adopt the FRS fully until the year ending 31 December 2004
although additional disclosure has been provided in note 24, as required.



F-33

---



TDL INFOMEDIA HOLDINGS PLCNOTES TO THE FINANCIAL STATEMENTS
- Continued



30.     SUMMARY OF DIFFERENCES BETWEEN U.K.
AND U.S. GENERALLY ACCEPTED ACCOUNTING PRINCIPLES (GAAP)

The accompanying financial statements have been prepared in
accordance with accounting principles generally accepted in the United Kingdom
('U.K. GAAP'), which differ from generally accepted accounting principles in the
United States ('U.S. GAAP').

The following is a summary of the adjustments to profit after
tax for the financial year and shareholders' funds which would have been
required if U.S. GAAP had been applied instead of U.K. GAAP.

a. Work in progress

Under U.K. GAAP, sales related costs and other direct overhead
amounts are deferred and capitalised as inventoriable costs to the extent the
expenditures are incurred in the normal course of business to bring the product
or service to its present location and condition. Under U.S. GAAP only
incremental direct costs associated with selling and creating the directories
are deferred.

b. Goodwill

Under U.K. GAAP, for accounting periods ended before 23
December 1998, goodwill arising on the acquisition of a subsidiary could be set
off against reserves in the year in which that subsidiary was acquired. Under
U.S. GAAP, such goodwill is capitalised and amortised through the profit and
loss account over its estimated useful life, not exceeding 40 years. The Company
has an amortisation period of 15 years. For U.S. GAAP purposes, the carrying
amount of goodwill is periodically compared with future estimated cash flows
over the remaining amortisation period. In the event the carrying value is in
excess of the future estimated undiscounted cash flows from operating
activities, an impairment loss is recognised.

Under U.K. GAAP, assets which are not considered ''separable''
from the principal business under FRS 7 ''Fair Value in Acquisition Accounting''
are included as goodwill on acquisition. U.S. GAAP requires that intangible
assets related to name licences, patents and brand names be excluded from
goodwill and treated as intangible assets. See ''Name Licence''
below.



F-34

---



TDL INFOMEDIA HOLDINGS PLCNOTES TO THE FINANCIAL STATEMENTS
- Continued

> 

30.     SUMMARY OF DIFFERENCES BETWEEN U.K.
AND U.S. GENERALLY ACCEPTED ACCOUNTING PRINCIPLES (GAAP) - continued

b. Goodwill - continued

The cost of goodwill under US GAAP is based on 54.69% carry
over of the goodwill from the acquisition completed in June 1997 and 45.31% of
the goodwill from the acquisition completed in July 1999. The new accounting
basis for TDL Infomedia Holdings plc is based on Apax Partners & Co Ventures
Limited's acquisition of 45.31% of the outstanding voting stock of TDL Infomedia
Limited, the ultimate holding company of TDL Infomedia Holdings plc. The fair
value of net liabilities acquired on this basis under US GAAP on the 30 July
1999 were £27,415,000. Under U.K. GAAP, fair value adjustments relate to
original estimates which were made for pension prepayments, investments and
creditor balances. The fair value of the pension prepayment for U.S. GAAP was
recorded at 31 December 1999.

The Group performed impairment reviews in respect of long lived
assets, including goodwill, following the acquisition of its ultimate U.K.
holding company, TDL Infomedia Limited, by SEAT Pagine Gialle SpA on 1 August
2000, in light of changing market conditions. A similar impairment review was
carried out on 31 December 2001. No adjustment to carrying values was considered
necessary by the Group at that time.

FAS 142 was first applicable to the Group's financial
statements for the year ended 31 December 2002. It requires that goodwill and
other intangible assets with an indefinite useful life are tested at least
annually for impairment, rather than amortized periodically. On adoption of FAS
142, the Group tested the existing goodwill for impairment. The Group is
considered to be a single reporting unit for the purpose of the test. The first
step of the goodwill impairment test did not identify an impairment,
consequently no adjustment to carrying values at 31 December 2002 was considered
necessary by the Group.

The Group tested goodwill for impairment again as at 31
December 2003. The first step of the goodwill impairment test did not identify
an impairment, consequently no adjustment to carrying values at 31 December 2003
is considered necessary by the Group.

FAS 142 does not require prior periods to be restated.
Therefore, in all tables presented in this note, 2002 and 2003 amounts are
presented in compliance with FAS 142 whereas 2001 amounts are not. The following
table sets forth on a post-tax basis what the Group's consolidated US GAAP net
loss would have been in 2001 if adjusted to exclude the amortisation expense
related to goodwill that is no longer amortised.

2001£'000
    2002£'000
    2003£'000Reported net loss under US GAAP
    (24,931)
    (14,557)
    (10,217)Amortisation expense for goodwill
    7,551
    -
    -Adjusted net loss under US GAAP
    (17,380)
    (14,557)
    (10,217)




F-35

---



TDL INFOMEDIA HOLDINGS PLCNOTES TO THE FINANCIAL STATEMENTS
- Continued

> 

30.     SUMMARY OF DIFFERENCES BETWEEN U.K.
AND U.S. GENERALLY ACCEPTED ACCOUNTING PRINCIPLES (GAAP) - continued

b. Goodwill - continued

Carrying amount of goodwill

The movements in the carrying amount of goodwill recognised
under U.S. GAAP for the years ended 31 December 2002 and 2003 were as
follows:

2002£'000
    2003£'0001 January
    90,902
    90,902Additions due to purchase business combinations
    -
    -Amortisation expense
    -
    -Impairment losses
    -
    -31 December
    90,902
    90,902




c. Pension plans

U.S. GAAP requires readjustment of the significant
actuarial assumptions annually to reflect current market and economic conditions
in determining the provision for pension benefits. U.K. GAAP permits the use of
longer term discount rates. In addition to the difference in discount rates, the
amortisation procedure under U.S. GAAP applies a corridor approach for
recognising gains and losses in the determination of periodic expense. The
corridor approach shields actuarial gains and losses falling within a defined
corridor from required amortisation. The corridor is defined as the greater of
10 per cent of the market-related asset value or 10 percent of the projected
benefit obligation as of the beginning of the year.

Under both U.K. GAAP and U.S. GAAP, the cost of providing
pensions under TDL's defined benefit schemes is charged to the consolidated
profit and loss account over the employees' service lives. U.S. GAAP requires
that the projected benefit obligations be matched against the fair value of the
schemes' assets and that adjustments be made to reflect any unrecognised
obligations or assets in determining the pension cost or credit for the
period.



F-36

---



TDL INFOMEDIA HOLDINGS PLCNOTES TO THE FINANCIAL STATEMENTS
- Continued

> 

30.     SUMMARY OF DIFFERENCES BETWEEN U.K.
AND U.S. GENERALLY ACCEPTED ACCOUNTING PRINCIPLES (GAAP) - continued

c. Pension plans - continued

Additional Pension and Post-retirement Benefits under U.S.
GAAP

Yearended31 December2002
    Yearended31
  December2003£'000
    £'000Benefit obligation at beginning of period
    32,809
    37,289Service cost
    2,264
    2,217Interest cost
    1,903
    2,088Plan participants' contributions
    872
    810Actuarial loss/(gain)
    291
    5,244Benefits paid
    (850)
    (500)Benefit obligation at end of period
    37,289
    47,148Fair value of plan assets at beginning of period
    26,963
    22,293Actual return on plan assets
    (5,631)
    4,419Employer contributions
    939
    3,588Plan participant contributions
    872
    810Benefits paid
    (850)
    (500)Fair value of plan assets at end of period
    22,293
    30,610Funded status
    (14,996)
    (16,538)Unrecognised actuarial loss
    14,549
    16,291Prepaid pension balance/(pension provision)
    (447)
    (247)Provision for shortfall against accrued benefit
    obligations
    (11,354)
    (12,919)Prepaid pension/(pension shortfall)
    (11,801)
    (13,166)




Yearended31 December2001
    Yearended31 December2002
    Yearended31
  December2003£'000
    £'000
    £'000Service cost
    2,164
    2,264
    2,217Interest cost
    1,703
    1,903
    2,088Expected return on plan assets
    (2,284)
    (2,044)
    (1,690)Net amortisation
    -
    254
    773Net periodic cost
    1,583
    2,377
    3,388




F-37

---



TDL INFOMEDIA HOLDINGS PLCNOTES TO THE FINANCIAL STATEMENTS
- Continued



30.     SUMMARY OF DIFFERENCES BETWEEN U.K.
AND U.S. GENERALLY ACCEPTED ACCOUNTING PRINCIPLES (GAAP) - continued

c. Pension plans - continued

Additional Pension and Post-retirement Benefits under U.S. GAAP
- continued

Assumptions used to determine pension cost for the defined benefit plan
were:

31 December2001%
    31 December2002%
    31 December2003%Discount rate
    5.8
    5.6
    5.4Rate of return on assets
    7.58
    7.58
    7.74Salary growth
    4.5
    3.8
    4.4


Plan assets

The Group's pension plan weighted average asset allocations as
at 31 December 2002 and 2003, by asset category, were as follows:



Main Asset Categories
    Weighted averageassetallocations
    Value as at31
    December2002£'000
    Weightedaverageassetallocations
    Value as at31
    December2003£'000Equities
    85.0%
    18,953
    83.6%
    25,579Corporate Bonds
    4.3%
    966
    13.0%
    3,976Government Bonds
    10.7%
    2,374
    3.3%
    1,017Cash and Other
    -
    -
    0.1%
    38Total Market Value
    100.0%
    22,293
    100.0%
    30,610


The Group invests the majority of its assets in equities, half
of which are invested in active funds and half in passive funds. In 2003 the
Group slightly increased the weighting in bonds to reflect the growing maturity
of the pensioner membership component.

Contribution cash flows

The Group expects to contribute £3.7 million to its pension
plan in 2004.

d. Name licence

Under U.K. GAAP, the name licence acquired in the 4
June 1997 leveraged buy out was not considered as a separate asset because it
was determined not to be separable from the business and was written off against
reserves as goodwill. Under U.S. GAAP, the name licence was treated as a
separate asset, and was capitalised. For U.S. GAAP purposes it was amortised
over its useful life of five years. Consequently, the name licence was fully
amortised by June 2002.



F-38

---



TDL INFOMEDIA HOLDINGS PLCNOTES TO THE FINANCIAL STATEMENTS
- Continued



30.     SUMMARY OF DIFFERENCES BETWEEN U.K.
AND U.S. GENERALLY ACCEPTED ACCOUNTING PRINCIPLES (GAAP) - continued

e. Taxation

Under U.K. GAAP, deferred tax is recognised in respect
of all timing differences that have originated but not reversed at the balance
sheet date where transactions or events have occurred at that date that will
result in an obligation to pay more, or a right to pay less or to receive more,
tax. Under U.K. GAAP, deferred tax assets are recognised only to the extent that
the directors consider that it is more likely than not that there will be
suitable taxable profits from which the future reversal of the underlying timing
differences can be deducted. U.S. GAAP requires deferred TDL Group Limited
taxation to be provided in full, using the liability method on all temporary
differences between the tax and book basis of assets and liabilities.

Under U.S. GAAP, deferred tax assets and liabilities are
recognised for all temporary timing differences and income tax losses, in
accordance with FAS 109 ''Accounting for Income Taxes.'' Valuation allowances
with respect to deferred tax assets are provided when it is considered more
likely than not that all, or a portion, of the deferred tax assets will not be
realised.

The Company has concluded that realisation of its U.S. and U.K.
deferred tax assets does not meet the "more likely than not" recognition
criteria. Additionally, the Company has determined that it will not recognize
deferred tax benefits related to future losses or future increases in the
minimum pension liabilities continuing for an uncertain period of time.
Accordingly, the Company increased its deferred tax valuation allowance in 2001
through 2003 to offset deferred tax benefits related to net U.S. deferred tax
assets and in 2002 and 2003 to offset deferred tax benefits related to U.K.
deferred tax assets.

Regular reviews of the "more likely than not" criteria and
availability of tax planning strategies will continue to require significant
management judgment.

The following table summarises the Company's deferred tax
assets under U.S. GAAP as at 31 December 2002 and 2003:



2002
    2003£'000
    £'000Accelerated capital allowances
    260
    357Pension costs
    134
    74Tax losses
    475
    475Other timing differences
    539
    376Valuation allowance
    (1,408)
    (1,282)Net deferred taxes
    -
    -


All profit before taxation was earned in the United Kingdom and
is subject to taxation only in the United Kingdom.



F-39

---



TDL INFOMEDIA HOLDINGS PLCNOTES TO THE FINANCIAL STATEMENTS
- Continued



30.     SUMMARY OF DIFFERENCES BETWEEN U.K.
AND U.S. GENERALLY ACCEPTED ACCOUNTING PRINCIPLES (GAAP) - continued

f. Joint Ventures

Under UK GAAP, the Group's interest in joint ventures is
accounted for using the "gross equity method of accounting". Under this method
of accounting, the Group's share of turnover, operating profit, interest and
taxation of its joint ventures is included in the appropriate captions in the
consolidated profit and loss account, and its investment in joint ventures is
presented on the consolidated balance sheet analysed between its share of gross
assets and gross liabilities.

Under US GAAP, the Group's share of after tax profits would be
reflected as a single line item before minority interest and the investment in
joint ventures would be reflected as a single line item on the consolidated
balance sheet. This difference in presentation would have no impact on net loss
or shareholder's deficit.

g. Administrative expenses - staff costs

Under UK GAAP deferred consideration payable by SEAT Pagine
Gialle S.p.A. in respect of acquiring the Group is accounted for in the books of
that company, and does not impact of the amounts recorded in the Group's
financial statements.

Under US GAAP certain consideration paid in accordance with the
terms of the acquisition of TDL Infomedia Limited by SEAT Pagine Gialle S.p.A.,
has been accounted for as compensation expense by SEAT. Under US GAAP, pursuant
to the provisions of Staff Accounting Bulletin No. 55, this expense should be
reflected in the profit and loss account of the Group.

h. Debt issuance costs

Under U.K. GAAP, debt issuance costs are shown as a reduction
of the liability and amortised over the debt terms. Under US GAAP, these costs
are capitalized as an asset and amortised over debt terms. The Company had net
deferred financing costs of £2,522,000 and £2,135,000 at 31 December 2002 and 31
December 2003 respectively.



F-40

---



TDL INFOMEDIA HOLDINGS PLCNOTES TO THE FINANCIAL STATEMENTS
- Continued



30. SUMMARY OF DIFFERENCES BETWEEN U.K. AND U.S. GENERALLY
ACCEPTED ACCOUNTING PRINCIPLES (GAAP) - continued

Effect on loss after tax and shareholder's funds of differences
between U.K. GAAP and U.S. GAAP

Note
    Yearended31 December2001
    Yearended31 December2002
    Yearended31
  December2003Effect on loss after tax:
    
    £'000
    £'000
    £'000Loss on ordinary activities after tax under U.K.
      GAAP
    
    (10,248)
    (11,792)
    (3,232)Work in
      progress
    30(a)
    (782)
    39
    (345)Amortisation
      of goodwill
    30(b)
    6,575
    14,124
    14,124Pension
      benefit
    30(c)
    (290)
    (1,002)
    (1,813)Amortisation
      of name licence
    30(d)
    (691)
    (692)
    -Administrative expenses -
      staff costs
    30(g)
    (19,549)
    (15,535)
    (16,103)Deferred
      taxes: On above adjustments
    30(e)
    54
    301
    543Net loss under U.S. GAAP
    
    (24,931)
    (14,557)
    (6,826)




Note
    31 December2002
    31 December2003Effect on shareholder's funds:
    
    £'000
    £'000Shareholder's funds under U.K.
      GAAP
    
    38,445
    35,213Work in
    progress
    30(a)
    (4,245)
    (4,590)Intangible assets - Cost
      of Goodwill
    30(b)
    (117,210)
    (117,210)Intangible assets -
      Amortisation of Goodwill
    30(b)
    44,480
    58,604Prepayments -
      Pensions
    30(c)
    (115)
    (1,928)Creditors: amounts falling
      due after one year
    30(c)
    (11,354)
    (12,919)Intangible assets - Cost
      of Name Licence
    30(d)
    3,860
    3,860Intangible assets -
      Amortisation of Name Licence
    30(d)
    (3,860)
    (3,860)Current Assets - Debt
      issue costs
    30(h)
    2,522
    2,135Creditors: amounts falling
      due after one year
    30(h)
    (2,522)
    (2,135)Current Assets - Deferred
      taxes
    30(e)
    35
    578Shareholder's funds under U.S.
      GAAP
    
    (49,964)
    (42,252)




F-41

---



TDL INFOMEDIA HOLDINGS PLCNOTES TO THE FINANCIAL STATEMENTS
- Continued

> 

30.     SUMMARY OF DIFFERENCES BETWEEN U.K.
AND U.S. GENERALLY ACCEPTED ACCOUNTING PRINCIPLES (GAAP) - continued

Effect on loss after tax and shareholder's funds of differences
between U.K. GAAP and U.S. GAAP

U.S. GAAP£'000Movements in Shareholder's funds under U.S.
      GAAP:Balance at 1 January
      2001
    (34,205)Loss for the
      year
    (24,931)Pension scheme accrued
      benefit obligation
    (3,205)Comprehensive
      income
    (28,136)Capital contribution -
      consideration accounted for as compensation
      by      parent company
    19,549Balance at 31 December
      2001
    (42,792)Loss for the
      year
    (14,557)Pension scheme accrued
      benefit obligation
    (8,150)Comprehensive
      income
    (22,707)Capital contribution -
      consideration accounted for as compensation
      by      parent company
    15,535Balance at 31 December
      2002
    (49,964)


Loss for the
      year
    (6,826)Pension scheme accrued
      benefit obligation
    (1,565)Comprehensive
      income
    (8,391)Capital contribution -
      consideration accounted for as compensation
      by      parent company
    16,103Balance at 31 December
      2003
    (42,252)




F-42

---



TDL INFOMEDIA HOLDINGS PLCNOTES TO THE FINANCIAL STATEMENTS
- Continued



30.     SUMMARY OF DIFFERENCES BETWEEN U.K.
AND U.S. GENERALLY ACCEPTED ACCOUNTING PRINCIPLES (GAAP) - continued

Consolidated Cash Flow Statements

The Consolidated Cash Flow Statements present
substantially the same information as that required under U.S. GAAP. U.K. GAAP
and U.S. GAAP differ, however, with regard to classification of items within the
statements and as regards the definition of cash and cash equivalents. The
principal differences between U.K. GAAP and U.S. GAAP cash flow presentation are
as follows:

|1. | Under U.K. GAAP, net cash flow
      from operating activities is determined before considering cash flows from
      (a) returns on investments and servicing of finance and (b) taxes paid.
      Under U.S. GAAP, net cash flow from operating activities is determined
      after these items.
|-- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|2. | Under U.K. GAAP, capital
      expenditure is classified separately, while under U.S. GAAP, it is
      classified as an investing activity.                                                                                                                                                       
|3. | Under U.K. GAAP, movements in
      short-term investments are not included in cash, but classified as
      management of liquid resources. Under U.S. GAAP, short term investments
      with an original maturity of three months or less are included within cash
      and cash equivalents.  

> 

The categories of cash flow activity as defined under U.S. GAAP
can be summarised as follows:

Yearended31 December2001
    Yearended31 December2002
    Yearended31
  December2003£'000
    £'000
    £'000Cash provided by operating activities
    18,761
    16,406
    16,242Cash used in investing activities
    (10,739)
    (1,710)
    (1,151)Cash (used in)/provided
      by financing activities
    (14,578)
    (14,877)
    (9,001)Increase/(decrease) in cash and cashequivalents
    (6,556)
    (181)
    6,090Cash and cash
      equivalents at beginning of period under U.S. GAAP
    8,23
    1,677
    1,496Cash and cash
      equivalents at end of period under U.S. GAAP
    1,677
    1,496
    7,586




F-43

---



TDL INFOMEDIA HOLDINGS PLCNOTES TO THE FINANCIAL STATEMENTS
- Continued



30.     SUMMARY OF DIFFERENCES BETWEEN U.K.
AND U.S. GENERALLY ACCEPTED ACCOUNTING PRINCIPLES (GAAP) - continued

Other disclosures under U.S. GAAP and presentation
differences

Current assets under U.K. GAAP include amounts which
fall due after more than one year. Under U.S. GAAP such assets would be
reclassified as non-current assets. Provisions for liabilities and charges under
U.K. GAAP include amounts due within one year which would be reclassified to
current liabilities under U.S. GAAP.

Valuation and qualifying accounts

31 December 2002
    Charged toprofit andloss
    account
    Charged tootheraccounts
    Deductions
    31 December 2003Doubtful debt provision
    4,129
    3,984
    -
    (3,914)
    4,199






31 December 2001
    Charged toprofit andloss
    account
    Charged tootheraccounts
    Deductions
    31 December 2002Doubtful debt provision
    5,368
    3,753
    -
    (4,992)
    4,129






31 December 2000
    Charged toprofit andloss
    account
    Charged tootheraccounts
    Deductions
    31 December 2001Doubtful debt provision
    5,036
    4,456
    -
    (4,124)
    5,368




F-44

---



TDL INFOMEDIA HOLDINGS PLCNOTES TO THE FINANCIAL STATEMENTS
- Continued



30.     SUMMARY OF DIFFERENCES BETWEEN U.K.
AND U.S. GENERALLY ACCEPTED ACCOUNTING PRINCIPLES (GAAP) - continued

Operating leases

2003£000Total commitments under operating leases payable during
      thefollowing periods are:Land and
      buildingsWithin one year
    543Within one to two years
    548Within two to three years
    369Within three to four years
    267Within four to five years
    195Thereafter
    1392,061OtherWithin one year
    1,949Within one to two years
    1,254Within two to three years
    537Within three to four years
    212Within four to five years
    -Thereafter
    -3,952


Total minimum future rentals receivable under non-cancelable
subleases at 31 December 2003 amount to £708,000.



Impact of new accounting standards

As disclosed in the notes to the audited financial
statements, included elsewhere in this report, we prepare our accounts in
accordance with U.K. GAAP and reconcile profit after taxation, shareholders'
equity and cash flows to U.S. GAAP. At 31 December 2003, the following new
accounting standards had been issued by the Financial Accounting Standards
Board:



F-45

---



TDL INFOMEDIA HOLDINGS PLCNOTES TO THE FINANCIAL STATEMENTS
- Continued



30.     SUMMARY OF DIFFERENCES BETWEEN U.K.
AND U.S. GENERALLY ACCEPTED ACCOUNTING PRINCIPLES (GAAP) - continued

Impact of new accounting standards -
continued

FASB Interpretation No. 46 (Revised), "Consolidation of
Variable Interest Entities", was published in December 2003, and clarified the
application of ARB No. 51 to certain entities where a controlling financial
interest is achieved without majority voting interest. The principle
requirements come into effect from January 1, 2004. TDL Infomedia Holdings plc
has not identified any material variable interest entity of which it would be
regarded as the primary beneficiary under FIN No. 46 and which it would
consequently have to consolidate. Therefore, TDL Infomedia Holdings plc does not
anticipate that full adoption of FASB Interpretation No. 46 (Revised) will have
any effect on the consolidated financial statements.

EITF 00-21, "Revenue Arrangements with Multiple Deliverables",
was issued in November 2002, and addresses how a vendor allocates revenue
between multiple products and services covered by the same revenue arrangement.
The EITF consensus will apply to TDL Infomedia Holdings plc with effect from
January 1, 2004. TDL Infomedia Holdings plc does expect to earn revenue from
multiple deliverable arrangements in 2004 and future years.

EITF 01-8, "Determining Whether an Arrangement Contains a
Lease", was issued in May 2003, and will become effective for agreements TDL
Infomedia Holdings plc enters into or modifies from January 1, 2004.



F-46